Agenda pack
North Lanarkshire Council · 1 March 2023
Back to Finance and Resources Committee — 1 March 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Our Ref: Your Ref: Contact: Tel: Fax: E-Mail: Date: Andrew Rose 07951 409714 rosean@northlan.gov.uk 20 Feb 2023 Members of the Finance and Resources Committee Chief Executive’s Office Archie Aitken Chief Officer of Legal & Democratic Civic Centre, Windmillhill Street Motherwell ML1 1AB DX 571701, Motherwell 2 www.northlanarkshire.gov.uk Notice is given that a Meeting of the FINANCE AND RESOURCES COMMITTEE is to be held within the Council Chamber, Civic Centre, Motherwell on Wednesday, 1 March 2023 at 10:00 am which you are requested to attend. The agenda of business is attached. Chief Officer of Legal and Democratic Members : Councillors: A Beveridge, A Bustard, J Cairns, A Campbell, T Carragher, C Costello, S Coyle, D Crichton, G Currie, P Di Mascio, K Duffy, H Dunbar, T Fisher, F Fotheringham, J Hume, D Johnston, T Johnston, J Jones, P Kelly, J Keltie, J Linden, J Logue, H Loughran, F MacGregor, B McCluskey, B McCulloch, F McKay, R McKendrick, J McLaren, F McNally, M McPake, L Mitchell, L Roarty, D Robb, G Robinson, K Stevenson, A Stubbs, L Stubbs, R Sullivan, S Watson. Page 1 of 289
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Agenda (1) Declarations of Interest In Terms of the Ethical Standards In Public Life Etc. (Scotland) Act 2000 Operational (2) Bank Holiday in Honour of the Coronation of His Majesty King Charles III (page 9 - 16) Submit report by the Chief Officer (People Resources) asking the Committee to consider the implications of the proposals for an additional holiday on service provision and seeking agreement on the principles around the application of the additional bank holiday (copy herewith) (3) Revised F7 Leave of Absence for Teachers and Associated Professional Policy and Accompanying Guidance Note (page 17 - 52) Submit report by the Chief Officer (People Resources) (1) providing a summary of the review of the F7 Leave of Absence Policy for Teachers and Associated Professionals and the accompanying Guidance Note and (2) highlighting a few of the key areas that have been developed or changed (copy herewith) (4) Annual Data Protection Report for Financial Year 2021-22 (page 53 - 60) Submit report by the Chief Officer (Legal and Democratic) providing information on the Council’s Data Protection compliance and activity in respect of financial year 2021-22 (copy herewith) Financial (5) Treasury Management Strategy - 2023/2024 Treasury Management and Prudential Indicators 2023/2024 to 2025/2026 (page 61 - 106) Submit report by the Chief Officer (Finance) (1) outlining the Treasury Management Strategy for 2023/2024 in accordance with the CIPFA Code of Practice on Treasury Management, and (2) reporting on the treasury and prudential indicators as required by the above code and the CIPFA Prudential Code for Capital Finance in Local Authorities (copy herewith) (6) Non-Domestic Rates - Empty Property Relief (page 107 - 114) Submit report by the Chief Officer (Finance) seeking approval that North Lanarkshire Council’s Empty Property Relief Policy mirrors existing reliefs for a period of at least one year to 1 April 2024 prior to a full review for the creation of a new policy by April 2024, required due to the devolvement of this area to local government from April 2023 (copy herewith) (7) Payment of Local Taxation and Benefit Update (page 115 - 122) Submit report by the Chief Officer (Finance) providing an update on the performance within the Revenues and Benefits functions of Financial Solutions as at 31 December 2022 (copy herewith) Page 3 of 289
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2 (8) North Lanarkshire Properties: Re-Financing October 2023 (page 123 - 128) Submit report by the Chief Officer (Finance) (1) advising that the current financial borrowing agreement between NL Properties and its current lender ceases in October 2023 and that a new funding arrangement requires to be put in place, and (2) indicating that as part of the existing loan arrangement North Lanarkshire Council (NLC) provide an 80% guarantee (copy herewith) (9) Local Taxation Debt Write-Off 2022/23 (page 129 - 134) Submit report by the Chief Officer (Finance) presenting the summary of outstanding local taxation accounts which are deemed uncollectible following all attempts at recovery and, in accordance with financial guidelines, a provision for credit losses has previously been established for the outstanding accounts (copy herewith) Remits (10) Remit from Housing Committee held on 15 February 2023 - Former Tenant Arrears Write Off to 31 March 2021 (page 135 - 140) Submit report by the Chief Officer (Housing Management) which was considered at the meeting of the Housing Committee at its meeting held on 15 February 2023 seeking approval by the Finance and Resources Committee to write off the items (copy herewith) Monitoring (11) Revenue Budget Monitoring Report; Chief Executives and Other Corporate Services 1 April 2022 to 6 January 2023 (Period 10) (page 141 - 152) Submit report by the Chief Officer (Finance) (1) providing a summary of the Chief Executive and other Corporate Services' financial performance for the period 1 April 2022 2022 to 6 January 2023 (Period 10), and (2) illustrating the provisional outturn as at 31 March 2023, with major outturn variances highlighted and explained per the Council’s approved Financial Regulations (copy herewith) (12) Chief Executive Service - Capital Monitoring Report 1 April 2022 to 6 January 2023 (Period 10) (page 153 - 160) Submit report by the Chief Officer (Finance) highlighting the financial performance and provisional outturn of 2022/23 Chief Executive capital programme for the period ended 6 January 2023 (Period 10) (copy herewith) (13) Revenue Monitoring Report Council Summary 1 April 2022 to 6 January 2023 (page 161 - 172) Submit report by the Chief Officer (Finance) (1) providing an update on the overall position for the General Fund Account, Housing Revenue Account and Adult Health and Social Care for the financial year to 31 March 2023; (2) consolidating the budget monitoring position of all Services, and (3) highlighting and explaining major variances as per the Council’s approved Financial Regulations (copy herewith) (14) Capital Programme 2022/23 Monitoring Report (page 173 - 184) Submit report by the Chief Officer (Finance) (1) providing an update on the 2022/23 resources and expenditure for the Council's Strategic Capital Investment Programme, and (2) detailing the 2022/23 projected outturn position and the resultant variances (copy herewith)Page 4 of 289
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3 (15) Treasury Management Monitoring Report for Quarter Ended 31 December 2022 (page 185 - 196) Submit report by the Chief Officer (Finance) (1) fulfilling the key requirements of the Council’s reporting procedures for Treasury Management in accordance with the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities, and (2) informing on the quarterly Treasury Management activity for the period 1 October to 31 December 2022 and compliance with the mandatory treasury and prudential indicators (copy herewith) (16) POW 11 - Review of 2022/23 Budget Savings (page 197 - 202) Submit report by the Chief Officer of (Finance) providing an update on the achievement of the approved net savings for the financial year 2022/23 of £10.484m (copy herewith) Performance (17) Strategic Performance Framework - latest performance results for Business and Digital (page 203 - 212) Submit report by the Chief Officer (Business and Digital) providing an update of the latest results for the suite of performance indicators used by Business and Digital to inform service delivery and underpin operational decisions (copy herewith) (18) Strategic Performance Framework - latest performance results for Finance (page 213 - 224) Submit report by the Chief Officer (Finance) presenting the six-monthly Performance Review for Financial Solutions across a range of measures (copy herewith) (19) Strategic Performance Framework - latest performance results for Legal and Democratic (page 225 - 232) Submit report by the Chief Officer (Legal and Democratic) presenting a summary of the performance of Legal and Democratic (copy herewith) (20) Strategic Performance Framework - latest performance results for Assets and Procurement (page 233 - 244) Submit report by the Chief Officer (Assets and Procurement) providing an update of current performance reflecting the service’s key areas of activity across Assets and Procurement Solutions (copy herewith) (21) Strategic Performance Framework - latest performance results for People Resources (page 245 - 252) Submit report by the Chief Officer (People Resources) summarising performance across People Resources (copy herewith) Page 5 of 289
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4 Property (22) Land Re-allocation - Former YMCA and 303 Brandon Street, Motherwell, ML1 1RS (page 253 - 258) Submit report by the Chief Officer (Assets and Procurement) seeking approval for the transfer of a building and land held by General Services for inclusion in the new build programme (copy herewith) (23) Land Re-allocation - Petersburn Primary School Site, Petersburn Road, Airdrie, ML6 8DX (page 259 - 264) Submit report by the Chief Officer (Assets and Procurement) seeking approval for the transfer of land held by Education and Families for inclusion in the new build programme (copy herewith) Contracts (24) Contract Award for LAN/SAN and Server Hardware Supply and Maintenance Services (page 265 - 274) Submit report by the Chief Officer (Business and Digital) seeking approval of a contract for Local Area Network/Storage Area Network (LAN/SAN) and Server Hardware Supply and Maintenance (copy herewith) (25) Contract Award for HR Case Management Solution (page 275 - 282) Submit report by the Chief Officer (People Resources) informing the Committee of the award of a contract, taken under delegated authority, for an HR Case Management Solution (copy herewith) (26) Contracts Awarded Below Committee Approval Threshold (page 283 - 290) Submit report by the Chief Officer (Assets and Procurement) notifying the Committee of the contracts awarded between 1 October to 31 December 2022 with a value below the financial threshold requiring Committee approval (copy herewith) 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 items of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraphs 8 & 9 of Part 1 of Schedule 7A of the Act." (27) Disposal of Former Willowbank School, 299 Bank Street, Coatbridge, ML5 1EG (page 291 - 298) Submit report by the Chief Officer (Assets and Procurement) seeking consent to sell the site of the former Willowbank School, 299 Bank Street, Coatbridge to the highest bidder at the closing date following a marketing campaign (copy herewith) Page 6 of 289
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5 (28) Proposed Purchase of Houses at Bertramfarm, Shotts (page 299 - 304) Submit report by the Chief Officer (Assets and Procurement) seeking consent to acquire 10 houses at Bertramfarm, Shotts to support the council’s new housing supply programme (copy herewith) (29) Drumcavel Road/Lochend Road, Gartcosh - Licence for Off-Site Junction Upgrade Works (page 305 - 310) Submit report by the Chief Officer (Assets and Procurement) seeking approval to amend the terms of a previously approved Licence with the works being associated with a mixed-use private development on Avenuehead Road, Moodiesburn (copy herewith) (30) Proposed Purchase of Houses at Torrance Park, Holytown (page 311 - 316) Submit report by the Chief Officer (Assets and Procurement) seeking consent to acquire up to 8 terraced houses at Torrance Park, Holytown to support the Council’s new housing supply programme (copy herewith) Page 7 of 289
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North Lanarkshire Council Report Finance & Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref: FW/LC Date 01/03/23 Bank Holiday in honour of the Coronation of His Majesty King Charles III From Fiona Whittaker, Chief Officer People Resources E-mail Whittakerf@northlan.gov.uk Telephone 07973 728628 Executive Summary Both the UK and Scottish Government have proclaimed a bank holiday in honour of the Coronation of His Majesty King Charles III. The bank holiday will take place on Monday 8 May 2023 following the Coronation on Saturday 6 May 2023. The purpose of the additional bank holiday is to allow for a three-day weekend that will give families and communities across the country the opportunity to come together to celebrate. The Scottish Government have stated that the ‘Coronation will be a historic moment for Scotland’ and the Scottish Government want to give as many people as possible the opportunity to join in the celebrations. The additional bank holiday is in line with what happened at the time of the Her Majesty Queen Elizabeth II Coronation. In relation to schools and early years establishments, Scottish Ministers have confirmed their view that it is important that families in Scotland are able to participate in the Coronation celebrations and are supportive of the additional bank holiday becoming a school holiday. Although there has been no instruction to close schools or any other local authority services, there will be an expectation that many workers will be afforded the opportunity to have the day off. The purpose of this report is to ask the Finance & Resources Committee to consider the implications of the additional holiday on service provision and to agree the principles around the application of the additional bank holiday. Recommendations The Finance & Resources Committee are asked to: 1. Note the formal announcement of a bank holiday on Monday 8 May 2023 to allow people to celebrate the Coronation of King Charles III. 2. Agree to the closure of all schools and nursery establishments on Monday 8 May 2023. 3. Consider and agree the wider extent of closure of the Council on Monday 8 May 2023. 4. Note that to enable this, we will apply for the statutory schooling days for pupils in North Lanarkshire Council to be reduced to 188 days from 190 days in session AGENDA ITEM 2 Page 9 of 289
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1. Background 1.1 On 6 November 2022, both the UK and Scottish Government announced that there would be an additional bank holiday on Monday 8 May 2023 following the Coronation of King Charles III on Saturday 6 May 2023. 1.2 The Scottish Government have advised that the introduction of the additional bank holiday, will result in a three-day Coronation Weekend that will allow individuals, businesses and other organisations to celebrate the Coronation. 1.3 For clarification, bank holidays (although not normally recognised by the Council) are holidays when banks and many other businesses are closed for the day. Public holidays are holidays which have been observed by custom and practice, i.e. Christmas Day and Easter. 1.4 As outlined above, the Council does not refer to, nor normally recognise bank holidays, but in these exceptional circumstances, the rules and procedures around public holidays should apply to the declared bank holiday. 1.5 As an individual employer, the Council does have the option to designate the day as an additional day of annual leave, rather than a public holiday. Awarding an extra day’s annual leave would be less costly for those essential services who must run on that day, however it is deemed that it would not be appropriate under the circumstances to take this approach. 1.6 As this is an exceptional and unprecedented circumstance, we also expect that trade unions and employee’s expectations will be that the day will be acknowledged as a bank holiday and therefore the rules around public holidays will apply to those who are required to work. 2. Report 2.1 Legal Position 2.1.1. The Scotland Act 1998 gives Scottish Ministers the responsibility for setting bank holidays (Part II of Schedule 5). The Banking and Financial Dealings Act 1971 provides the statutory basis for UK bank holidays; and Schedule 1 to the Act prescribes Scottish bank holidays. Special days can be appointed under the 1971 Act as bank holidays (either additional or in place of bank holidays which fall on a Saturday or Sunday) subject to Royal Proclamation each year. On 6 November 2023, both the Scottish and UK Government announced an additional bank holiday on Monday 8 May 2023. 2022/23. (This is due to the additional bank holiday for the Queen’s Funeral on 19 September 2022 and this additional day) 5. Agree the principles around the application of the bank holiday within the Council. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition Page 10 of 289
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2.1.2 There is no statutory right for employees to take public holidays off work. Any right to time off depends on the terms of the employee’s contract of employment. If the contract of employment entitles the worker to a specified number of days' holiday inclusive of bank and public holidays, then the additional holiday will have no effect on the overall contractual entitlement. If the contract entitles the worker to a specified number of days’ holiday plus all recognised bank and public holidays, they will be contractually entitled to the additional day. 2.1.3 As contracts of employment within the Council outline the number of days leave inclusive of public holidays, which are clearly specified, there is no contractual entitlement to the additional days leave. It is the decision of the Council as to whether to award the additional day as a bank holiday or annual leave day. 2.1.4 The conditions that govern single status staff (known as the Red book) state that general and public holidays recognised by the Council for its employees will be granted as holidays with pay and that by local agreement some of these may be added to annual leave. 2.2 Proposal 2.2.1 It is proposed that an additional day’s leave is awarded to all employees of North Lanarkshire Council in the form of a bank holiday on Monday 8 May 2023, allowing the Council to close on this day. 2.2.2 However, unlike other public holidays where some services operate, it is proposed that the Council closes all services, except those which are deemed essential to support the residents of North Lanarkshire. This will allow for as many employees as possible to celebrate the Coronation of King Charles III. 2.2.3 During both the Queen’s Jubilee holiday and state funeral bank holiday, our Waste Services remained open, alongside our essential Health and Social Care services, and a decision will need to be made on whether there is a requirement to keep these open again, given the recent impact of strikes, or close to allow staff to join the celebrations. There may also be other services, to be discussed and agreed, who may wish to stay open for emergency response purposes. 2.2.4 At the current time, all schools and nursery establishments will be closed on Monday 1 May 2023 which is the normal May holiday with the 2nd May being an in-service day for teaching staff. The schools will then close again for the May weekend which is on Monday 26 May to Friday 29 May 2023. The additional bank holiday will also mean the schools and nursery establishments will be closed on Monday 8 May 2023. There has been no communication from the government to suggest the moving of any of the bank holidays to accommodate the additional day. 2.2.5 If Finance & Resources Committee agree to awarding the additional bank holiday on Monday 8 May 2023 and agree to closing schools and nursery establishments, the statutory number of schooling days within North Lanarkshire Council will reduce from 190 to 188 days. This is because the statutory days have already been reduced to 189 in this school year due to the declared bank holiday for the Queen’s funeral on 19 September 2022. Scottish Government guidance states that where an application for an exemption from Regulation 5 of the Schools General (Scotland) Regulations 1975 is required, these should be submitted and will be dealt with quickly. Page 11 of 289
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2.2.5 If a bank holiday is applied, rather than a day of annual leave, all employees who are required to work on Monday 8 May 2023, will receive the enhanced rates and provisions that are applicable to public holidays. 2.2.6 Part-time employees will benefit from a pro-rated entitlement and employees on maternity leave will also benefit from an additional bank holiday on their return to work. Employees who work an alternative work pattern to the normal 35 hours over five days (i.e. Monday to Friday) will have the additional bank holiday entitlement calculated in the same way as all other public holidays. Due to the nature and reason for this additional bank holiday, managers should encourage employees to take the bank holiday at the earliest possible point. 2.2.7 Employees who are on sickness absence or suspended from duty will not receive an additional day if they remain absent from work on Monday 8 May 2023 and this is in line with the Council’s conditions of service and current practice. 2.2.8 Once the Council’s proposed position has been agreed by Finance & Resources Committee, appropriate communications will be issued to staff, parents and the local community, and the school holidays for session 2022/23 will be updated accordingly. 3. Measures of success 3.1 The decision to award an additional bank holiday on Monday 8 May 2023 is applied fairly and consistently across the Council and in line with conditions of service, policy and procedure. 3.2 Employees are afforded the opportunity to join in a long weekend of celebrations following the Coronation of King Charles III on Saturday 6 May 2023. 4. Supporting documentation 1.0 Letter from Scottish Government dated 9 December 2022 Fiona Whittaker Chief Officer, People Resources Page 12 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? With the contractual requirement to pay enhanced rates to employees who are required to work on a public holiday, there will be an additional cost to the Council. At the time of writing this report, the estimated cost was not available however if the Council chooses to close almost all services, the cost should be less than normal public holidays expenditure 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Contractually, employees are not entitled to an additional day’s leave, but there is an explicit expectation that the Council will honour the decision on this matter. It is the sole decision of the Council as to how any additional leave which is granted, should be classified or applied, in line with locally agreed policies and conditions and within the Red Book for single status employees. 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 have 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 ☒ Page 13 of 289
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If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 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 14 of 289
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Cidhe Bhictòria, Dùn Èideann, EH6 6QQ Victoria Quay, Edinburgh EH6 6QQ www.gov.scot Buidheann-Stiùiridh an Ionnsachaidh Learning Directorate T: 0131 244 0132 E: sam.anson@gov.scot Directors of Education 9 December 2022 Dear Colleague, KING CHARLES III CORONATION – 8 MAY 2023 You will be aware that His Majesty King Charles III will celebrate His Coronation in May next year. The First Minister has confirmed, along with the other nations of the United Kingdom, the introduction of a Bank Holiday to mark the celebration of His Majesty’s Coronation. In relation to schools in Scotland, Ministers have confirmed their view that it is important that families in Scotland are also able to participate in the Coronation celebrations next year and is supportive of these days being taken as school holidays. If your local authority intends to close public schools in its area on 8 May 2023 to mark His Majesty’s Coronation, such closures might result in a breach of the requirement in Regulation 5 of the Schools General (Scotland) Regulations 1975 (which requires authorities to secure that schools are open for 190 school days in every school year). Where this would be the case, an application for a direction under section 133(4) of the Education (Scotland) Act 1980 exempting your authority from that requirement to the necessary extent should be submitted to exceptionalclosure@gov.scot. We are conscious that SQA exams were scheduled to take place on this date. In light of the announced public holiday, no exams will now take place on 8 May. SQA has engaged with partners in finalising where the relevant exams should be moved within the existing timetable, and will be informing centres of the finalised arrangements shortly. With regard to early learning and childcare (ELC), the decision on how to approach the public holiday is at local authority discretion and Local Authorities should consider how their services are provided in line with the statutory obligation to provide 1140 hours of funded ELC over the course of the year. If you have any further comments or concerns please feel free to contact me. Page 15 of 289
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Cidhe Bhictòria, Dùn Èideann, EH6 6QQ Victoria Quay, Edinburgh EH6 6QQ www.gov.scot Yours sincerely, Sam Anson Deputy Director: Workforce, Infrastructure and Digital Page 16 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref FW/LC Date 01/03/23 Revised F7 Leave of Absence for Teachers and Associated Professional Policy and accompanying Guidance Note From Fiona Whittaker, Chief Officer, People Resources E-mail Whittakerf@northlan.gov.uk Telephone 07973 728628 Executive Summary In recognition that the F7 – Leave of Absence Policy for Teachers and Associated Professionals has not been reviewed for several years, a sub-group of the Joint Negotiating Committee for Teachers (JNCT) was created for the purpose of considering the existing terms of the policy along with any legislative and operational changes that had occurred in the intervening period. It should also be noted that Teacher’s terms and conditions of employment are governed by the Scottish Negotiating Committee for Teachers (SNCT), therefore some aspects of the policy are not negotiable. As part of the review, a guidance note was also developed and introduced as it was recognised that some of the provisions within the policy required further detail and instruction on how and when they applied. Both the revised Policy and Guidance Note have been discussed and approved at both the Informal JNCT that took place on 6 September 2022 and the Formal JNCT that took place on 27 September 2022. The remainder of this report summarises the review of the F7 Leave of Absence Policy for Teacher’s & Associated Professionals and accompanying Guidance Note and highlights a few of the key areas that have been developed or changed. Recommendations It is recommended that Finance and Resources Committee: (1) Note the contents of this report. (2) Approve the changes as described within this report and accompanying documents. (3) Agree to the revised F7 Leave of Absence Policy for Teachers and Associated Professionals and Guidance Note being implemented at the earliest possible point. AGENDA ITEM 3 Page 17 of 289
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1. Background 1.1 As outlined above, a review of the F7 Leave of Absence for Teachers and Associated Professionals was undertaken in recognition that the policy had not been reviewed for several years. 1.2 A sub-group of the JNCT was created consisting of trade union colleagues, managers from Education and Families and members of the Employee Relations and Business Partner teams. 1.3 During discussions, it was recognised that a Guidance Note to accompany the revised policy would be beneficial as this would provide the appropriate level of direction and support on the policy’s application for both managers and employees. 1.4 Both the revised policy and guidance note have been approved by the JNCT at both the Informal and Formal meetings and the service are keen to implement at the earliest possible point. 1.5 Detailed within the remainder of this report are the key areas that were changed or developed within the policy. 2. Report 2.1 Policy Review 2.1.1 On review of the F7 Leave of Absence for Teachers and Associated Professionals, it was agreed that some of the information was obsolete and no longer applicable and therefore required to be removed from the Policy. It should also be noted that during the review of the policy, the SNCT terms & conditions were continually checked to ensure that any entitlement to leave listed within the SNCT was replicated within the Policy. 2.1.2 One of the main areas identified for improvement was the requirement to detail how many occasions of leave could be granted under specific categories of special leave. This has now been added to the policy and guidance note. 2.1.3 Another area of concern was the lack of provision of special leave to look after seriously ill dependents. Prior to the review, teaching staff did not have access to special leave for this purpose, however all other employees of the Council can apply for Time off for Care of a Dependent (formally known as Carer’s Leave). 2.1.4 It was also agreed that it would be beneficial to categorise the various types of leave into categories with additional subcategories to make the Policy more user friendly. 2.1.4 It was noted that the Policy could become lengthy and the development of a Guidance Note to support the Policy would be a beneficial addition. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition Page 18 of 289
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2.2 Policy Changes 2.2.1 One of the key areas of change was applied to Section 5 of the revised policy which covers the leave applicable to those who have suffered a bereavement. The policy has now been amended to include guidance on the amount of time that would be expected to be granted off work on a paid basis depending on the relationship the employee has with the deceased. 2.2.2 Section 5.4 details the Statutory Right to Parental Bereavement Leave which came into effect on 6 April 2020 and had previously not been included within the policy. However, it should be noted that prior to this policy addition, requests for leave for these circumstances were granted through management discretion. 2.2.3 Section 6 of the policy namely ‘Time off for Dependants’ now differentiates between the type of leave available in these circumstances, for example, leave available for up to a maximum of 1 working day to deal with unexpected illness of a dependent, care arrangements breaking down or attending hospital with a dependant. The policy also now clearly specifies the maximum number of periods that can be authorised in a 12- month period. 2.2.4 The addition of Time off for Dependant’s due to terminal or serious illness or post operative recovery is also reflected in Section 6.4, 6.5 and 6.6 of the Policy. The application and authorisation processes are outlined in Section 6.7 of the policy. Both the trade unions and management team were keen to ensure the inclusion of this provision in the knowledge that other employees within the Council already have access to this provision. 2.3 Guidance Note 2.3.1 The Guidance Note has been developed to provide employees and managers with additional assistance when making a request for or granting leave of absence. 2.3.2 In relation to Time of for Dependants for Post Operative Recovery a table has been added to section 3.24 of the Guidance Note outlining the anticipated timescales for leave that may be required in each circumstance and the factors that could affect the recovery times are also provided. 2.3.3 Appendix 1 of the Guidance Note is the application form for Time of for a Dependant due to Terminal Illness/Serious Illness or Post Operative Recovery which requires medical evidence to be submitted to support the application and must be authorised by a Head of Service. 2.4 Next Steps 2.4.1 Following approval by Finance & Resources Committee and Full Council, communications will be issued to all relevant employees advising them on the revised policy and accompanying guidance note. 2.4.2 Discussions will continue with the trade unions and management to ensure the viability of the policy and monitoring will take place regarding the use and application. 2.4.3 Finally, it should be noted that the trade unions have expressed their gratitude for the joint working that has been undertaken in relation to this review. Page 19 of 289
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3. Measures of success 3.1 Revised F7 Leave of Absence Policy & Guidance Note for Teachers & Associated Professionals is implemented fairly and consistently across the service. 4. Supporting documentation 4.1 Appendix 1 - F7 Leave of Absence Policy for Teachers & Associated Professionals 4.2 Appendix 2 - F7 Leave of Absence Guidance Note for Teachers & Associated Professionals Fiona Whittaker Chief Officer, People Resources Page 20 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Financial Solutions? 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 have been discussed and agreed with People and Organisational Development? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The main impact is likely to be resourcing issues if there are large numbers of employees requesting leave at the same time, however this is unlikely to be the case. Monitoring of application and compliance will also need to take place to ensure consistency and appropriate management of leave across the service. 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 have been discussed and agreed with Legal and Democratic Solutions? 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 21 of 289
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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 technology, has an assessment been carried out (or scheduled) 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. Page 22 of 289
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Change record Appendix 1 F7 - Leave of Absence Policy for Teachers & Associated Professionals Consultation process Consulted with Trade Unions and Employee Equality Forum Joint Trade Unions Employee Equality Forum Employees Distribution Author Contact details Owner Fiona Whittaker whittakerf@northlan.gov.uk Date Version number 1 Document status Draft Governance Committee JNCT Date approved Review date Strategic Alignment Improving the Council’s Resource Base – A Workforce Strategy that is built around the needs of the Council (as a single resource base) to deliver the priority outcomes, ensuring future workforce requirements, new skills and innovative approaches, and succession planning are recognised. Date Author Change made Page 23 of 289
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Contents Page 1. Introduction 2. Legislation & Associated Policies 3. Our Position 4. Scope 5. Bereavement Leave 5.1 Close Relatives 5.2 Other Relatives of the Employee or their Spouse or Partner 5.3 Friend or Colleague 5.4 Parental Bereavement Leave 6. Time of for Dependants 6.1 Support of Dependant(s) 6.2 Attending Hospital with a Dependant 6.3 Attending Court/Children’s Panel with a Dependant Minor 6.4 Terminal Illness of a Dependant 6.5 Serious/Long Term Health Condition of a Dependant 6.6 Post-Operative Recovery 6.7 Applications and Supporting Evidence 7. Family Leave 8. Leave for Medical Purposes 8.1 Non-Emergency Medical/GP Appointments 8.2 Hospital Appointments 9. Personal Leave 9.1 Attendance at Weddings 9.2 Marriage During Term Time 9.3 Accompanying spouse on holidays and business trips 9.4 House Removal 9.5 Interviews 9.6 Other Personal Business 10. Participation in Sporting Events 11. Time off for Public Duties 11.1 Jury Service 11.2 Services as a Witness 11.3 Employment Tribunal/Attendance at Court in Course of Duties 11.4 Justice of the Peace Duties 11.5 Member of Children’s Panel 11.6 Election Duties 11.7 Candidates in Elections/ Election Agents 11.8 National Conference of a Political Party 11.9 Local Authority Business 11.10 Service in Non-Regular Forces 11.11 Community Emergency Services Page 24 of 289
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12. Holidays or Festivals of Religious or Ethnic Groups 12.1 Religious ceremonies of a family 13. Participation in Cultural Events 14. Time of for Education Related Matters 14.1 Attendance at exhibitions of the teacher’s own work 14.2 Leave to undertake authorised expeditions of an educational nature 14.3 Attendance at the National Mod as a competitor or adjudicator 14.4 Work of the GTC, Education Scotland, SQA or other approved bodies 14.5 Meetings or conferences of an educational or religious nature 15. Learning & Development Leave 15.1 Training Connected with a Course of Study 15.2 Study Tours 15.3 Study Leave 16. Career Break & Self – Funded Sabbaticals 17. Attendance at meetings of trade union or professional associations 18. Other Special Leave 19. Process for Applying for Special Leave Page 25 of 289
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1. Introduction This policy is based on the principle that teachers should not make personal arrangements which conflict with the requirement that they be at work at times previously agreed by the employer other than in the circumstances outlined in this policy. Wherever possible, requests for leave should be planned and submitted well in advance. The need to ensure continuity of educational provision makes it particularly important that these general principles should be scrupulously applied in the case of teaching staff. The council recognises that there will be times when teachers may require leave of absence to undertake obligations or attend events outside of their working life. While it is expected that there will be instances where such responsibilities/events can be supported there is an obligation to ensure that such events cannot take place out with the pupil day or holiday period. 2. Legislation and Associated Policies This policy complies with the legal requirements set out in the legislation detailed below: Children and Families Act 2014 The Shared Parental Leave Regulations 2014 The Parental Bereavement Leave Regulations 2020 Maternity/Adoption/Paternity Leave Legislation Equality Act 2010 Work and Families Act 2006 Employment Act 2002 Employment Relations Act 1999 Employment Rights Act 1996 Employment Protection (Consolidation) Act 1978 Trade Union and Labour Relations (Consolidation) Act 1992 Juries Act 1974 Time Off for Public Duties Order 2018 This policy should be read in conjunction with the SNCT Handbook, relevant sections of the council's Smarter Working Policy, Managing Attendance policy for Teachers and Leave of Absence for Teachers Guidance Note. 3. Our Position The Council recognises the requirement for fairness and consistency when considering requests for leave of absence. All applications for leave of absence will be examined on an individual basis, having due regard to the council policies on Equality of Opportunity in Employment and Dignity at Work. In authorising leave of absence, Head of Establishment/Line Manager should consider:- all the circumstances surrounding the request, the need to ensure that services are minimally disrupted, and consistency of application of this policy throughout the council Head of Establishment/Line Manager are required to ensure that, in line with responsibilities under the Equality Act 2010, special consideration is given to requests from disabled employees (or employees supporting a disabled dependant), where that request is linked to a matter arising from the disability. This will include the requirement to consider reasonable adjustments, as appropriate. Page 26 of 289
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The Equality Act 2010 defines a disability as “a physical or mental impairment which has a substantial and long-term adverse effect on your ability to carry out normal day-to-day activities.” If clarification is required on this or any area of the policy, Head of Establishment/Line Manager should contact People & Organisational Development. 4. Scope This policy is available to all teachers and associated professional of the council, regardless of length of service or contractual status, with the exception of single status staff who are covered by a separate policy. There are, however, eligibility criteria for Time off for Dependants (Section 6.4 to 6.6). All leave of absence granted will be to a maximum of a teacher’s contracted daily hours and calculated on the basis of a “normal working week”. 5. Bereavement Leave It is expected that Head of Establishment/Line Manager will take all circumstances into account when granting paid leave for bereavement, such as the closeness of the relationship and whether the employee is responsible for making the funeral arrangements. The following guidelines should be adhered to bearing in mind the conditions detailed above:- 5.1 Close Relatives • 1 day to attend the funeral • Up to 4 compassionate days However, the amount of leave granted will depend on the individual circumstances of each case, such as the closeness of the relationship. Close relationships would generally include: Parent(s) Sibling(s) Child/ren Spouse or partner Spouse or partner’s parent(s) or child/ren Grandparents or grandchildren These relationships would also include step or foster relationships. Additional leave of up to 2 days will be granted to conduct business in connection with the funeral if undertaking this responsibility. This leave will normally only be granted to employees who are the designated next of kin of the deceased person. Bereavement leave for part time/job share/flexible working employees will be authorised as the equivalent of up to one of their normal working weeks. In all circumstances, paid leave will be up to a maximum of contracted daily hours. 5.2 Other Relatives Paid leave to attend the funeral up to a maximum of one day per occasion, with a maximum of three occasions in a rolling 12 month period. Consideration will be given to individuals who need to travel a long distance. Page 27 of 289
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5.3 Friend or Colleague Paid leave to attend the funeral up to a maximum of one day per occasion with a maximum of three occasions in a rolling 12 month period. The above allowances for each category of leave for bereavement are considered to be inclusive of any travel time necessary to attend the funeral. Consideration will be given to individuals who need to travel a long distance. In all circumstances consideration will be given on a case by case basis whereby an employee either requires more than 3 occasions in a leave year or more the maximum time allowed per occasion. The circumcentres of the bereavement and the nature of the relationship will be taken into account. 5.4 Parental Bereavement Leave Parental Bereavement Leave (PBL) is a new entitlement for bereaved parents to be absent from work, for up to two weeks. The new statutory right is available to the parents of a child who dies on or after 6 April 2020. To qualify for this leave you must be: The biological parent or adult with parental responsibility i.e. adoptive parent, foster parent, guardian who has suffered the loss of a child under the age of 18, or The biological father or the mother’s (or adoptive mother’s) husband, partner or civil partner who has suffered a stillbirth after 24 weeks of pregnancy. N.B Female employees who suffer a stillbirth from the 24th week of pregnancy, are still entitled to the maternity pay and leave that they would have been entitled to in the event of a live birth, or in the event that a child dies following the birth. Teachers are entitled to this leave regardless of length of service and the Council has enhanced the statutory pay entitlement so that employees will receive their normal contractual pay during the period of parental bereavement leave. The leave must be taken within 56 weeks of the date of the child’s death and either in one block of two weeks, or as two separate blocks of one week each. For eligible parents as the result of the death of more than one child, the employee is entitled to leave in respect of each child. Further guidance is contained in the Leave of Absence for Teachers Guidance Note. 6. Time Off for Dependants A dependant is someone who depends on the teacher for care. Normally, this will be a spouse, partner, child, or parent, however a dependant may also be someone who reasonably relies on the teacher to make arrangements for the provision of care i.e an elderly neighbour or a friend that has no other support network. Where leave of absence is required for the purposes of supporting or caring for a dependant, special consideration to appropriate provision must be made where the person for whom the teacher is providing support or care to, has a disability. Further advice is available from People & Organisational Development. In all circumstances, paid leave will be up to a maximum of contracted daily hours. Page 28 of 289
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It is accepted that in certain limited circumstances a teacher may be unable to discuss the requirement for leave of absence in advance with their Head of Establishment/Line Manager. In such circumstances, the teacher must make contact with the appropriate Head of Establishment/Line Manager by telephone (text messaging and email are not acceptable unless alternative contact arrangements have been made as part of a reasonable adjustment) as soon as possible and not later than the commencement of core time on the day the leave is required, or within 1 hour of normal starting time. Failure by the teacher to make contact with their Head of Establishment/Line Manager could result in the employee taking unauthorised leave of absence which may lead to disciplinary action. Establishments should have arrangements in place for when the Head of the Establishment or Line Manager is not available for the employee to contact directly. An “occasion” as defined within the policy is one instance where a teacher is required to apply for and take leave of absence. The number of occasions provided for relate to each teacher and not each dependant. An occasion may be as little as one hour up to a maximum of one day – there is not an automatic entitlement to a full day off. Applications for leave of absence under category 6.4 – 6.6 require to be authorised by the Head of Service. A teacher is eligible to time off during working hours to take necessary action for the circumstances listed below. 6.1 Support of Dependant(s) Paid leave will be granted on up to 3 occasions in a rolling 12 month period, limited to a maximum of up to 1 working day on each occasion. Leave of absence may be granted to support the following circumstances: Consideration can be given on a case-by-case basis to extending the number of occasions an employee can take time off for dependants, however this would be unpaid. To provide assistance or make arrangements for the provision of care for a dependant who is ill, falls ill or is injured. To make alternative arrangements for the care of a dependant whose normal care arrangements are unexpectedly and unavoidably disrupted, i.e. illness of the usual carer. To make arrangements to deal with an incident which involves a child of the teacher and which occurs unexpectedly in a period during which an educational establishment which the child attends has responsibility for that child. Category 6.1 may be taken as 3 consecutive days with the agreement of the Head of Establishment/Line Manager. However, each occasion cannot be authorised in advance and the employee is required to contact their line manager by telephone (text messaging and email are not acceptable unless alternative arrangements have been agreed as a reasonable adjustment) on a daily basis. This should be done as soon as possible and not later than the commencement of core time on the day the leave is required or within 1 hour of normal starting time. Establishments should have arrangements in place for when the Head of the Establishment or Line Manager is not available for the employee to contact directly. Page 29 of 289
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Leave of absence taken over consecutive days will only be granted subject to the exigencies of the service. Teachers who are required to take this leave over consecutive days must be aware that they will not have any further leave of absence provision available to them under this category for a further 12 months. Teachers who wish to provide support to dependants recovering from short term illness or incapacity may also be granted a temporary change in working hour’s e.g. later start or earlier finish, to assist in the provision of care or to assist with childcare responsibilities. Alternatively, unpaid leave may be granted. 6.2 Attending Hospital with a Dependant Paid leave will be granted on up to 3 occasions in a rolling 12 month period, limited to a maximum of up to 1 working day on each occasion, to attend a prearranged medical examination or hospital appointment with a dependant. A hospital appointment card or a letter from the hospital will require to be produced, to be checked by the employee’s manager prior to authorisation of leave. 6.3 Attending Court/Children’s Panel with a Dependant Minor Time off may be granted to a teacher who is required to attend court/children’s panel hearing with a dependant, and that dependant is a minor. A minor for this purpose is someone under the age of 16. Paid leave will be granted on up to 2 occasions in a rolling 12 month period, limited to a maximum of up to 1 working day on each occasion. 6.4 Terminal Illness of a Dependant A terminal illness is defined as an illness which has a finite duration in terms of life expectancy, and normally of no more than 12 months. Up to a maximum of 16 working weeks leave in a rolling 12 month period may be granted. The time taken may be broken down into smaller periods e.g. 1 day or 3 hrs, but the cumulative total cannot exceed 16 working weeks. Subject to the appropriate evidence payment for leave under 6.4 may be available for up to 8 weeks paid and 8 weeks unpaid. This period of leave may be extended to a maximum of 13 weeks paid leave, and 8 weeks unpaid leave in exceptional circumstances. Each case will be considered on its own merits, taking into account the individual circumstances, and following discussion with Employee Relations. All applications require to be approved by a Head of Service. 6.5 Serious/Long Term Health Condition of a Dependant A “Serious Health Condition” means an illness, injury, impairment, or physical or mental condition that involves one or more of the following: A period of illness or incapacity of more than 3 consecutive days requiring treatment* from a GP, Hospital, Specialist etc . Multiple Treatments (including any period of recovery) e.g. chemotherapy, radiation, etc., kidney dialysis, physical therapy, serious physiological treatment, Page 30 of 289
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Permanent or Long Term Conditions e.g. cancer, dementia, Parkinson’s stroke, heart condition, multiple sclerosis. Time off may be required to provide respite care, make arrangements for long term care. Hospital Stays. This will normally only apply where a child is required to stay in hospital for more than 3 days. Time off for dependants receiving end of life care in a hospital or hospice is covered by Terminal Illness of a Dependant. Up to a maximum of 8 working weeks leave in a rolling 12 month period may be granted. The time taken may be broken down into smaller periods e.g. 1 day or 3 hrs, but the cumulative total cannot exceed 8 working weeks. Subject to the appropriate evidence payment for leave under 6.5 may be available for up to 4 weeks paid and 4 weeks unpaid. All applications require to be approved by a Head of Service. 6.6 Post-Operative Recovery Time off to support a dependant who is recovering from a more serious operation and who requires support at home following release from hospital may be granted. Whilst not exhaustive a list of the types of operations that may require support at home are detailed in the Leave of Absence Guidance Note, Section 4.1.3, along with the timescales for the amount of leave that may be required. Head of Establishment/Line Manager must ensure that a fair and consistent approach is taken when approving leave for this purpose, whilst taking individual circumstances into account. It is not intended that time off under this category would be granted where the dependant has had a minor operation e.g. bunion removal, ingrown toenail removal, hernia repair (keyhole), haemorrhoidectomy etc. Teachers who wish to provide support to dependants recovering from these types of surgery may be granted a temporary change in working hour’s e.g. later start or earlier finish, to assist in the provision of care or to assist with childcare responsibilities. Alternatively, unpaid leave may be granted. Categories 6.4 to 6.6 above seeks to help balance the needs of teachers with serious/longer term responsibilities for dependants with their role as an employee of North Lanarkshire Council. Leave under these categories, either paid or unpaid, will not be available until the applicant has accrued 26 weeks continuous service. All applications require to be approved by a Head of Service. 6.7 Applications and Supporting Evidence Teachers applying for leave under categories 6.4 to 6.6 are required to complete an application form and provide appropriate supporting/medical evidence. Please refer to the Leave of Absence guidance note for more information on the application process and appropriate supporting evidence. In all circumstances, the Head of Establishment/Line Manager must discuss the particulars of each request with the teacher requesting leave in order to clarify the reasons for the Page 31 of 289
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application and to ensure that the type of leave requested is the most appropriate option in the circumstances. On receipt of an application, the line manager must pass a copy to the Employees Relations team and discuss the application before forwarding any requests to the Head of Service for approval. Leave for part time/job share/flexible working employees will be authorised as the equivalent of their normal working weeks. In all circumstances, any paid leave will be up to a maximum of contracted daily hours. All leave granted will be counted as continuous service for contractual purposes. 7. Family Leave For information relating to entitlement to Maternity Leave, Adoption Leave, Shared Parental Leave, Surrogacy Leave, Maternity and Adoption Support Leave including Paternity Leave please refer to Part 2 Section 7 of the SNCT Handbook here: Part 2 Section 7 - SNCT Handbook 8. Leave for Medical Purposes 8.1 Non-Emergency Medical/GP Appointments Employees requiring non-emergency medical treatment from opticians, dentists or GPs should make arrangements to obtain such treatment out with working hours. Where this is not possible, appointments must be made for the beginning or end of the working day. 8.2 Hospital Appointments A teacher who has been referred to a hospital for examination/treatment should, where feasible, try to arrange appointments outwith normal working hours. If this is not possible, then paid leave, up to a maximum of contracted daily hours, will be granted for attendance at hospital. A hospital appointment card or a letter from the hospital may be asked to provide an appointment card, to be checked by the Head of Establishment/Line Manager prior to authorisation of leave. Where a teacher is required to attend hospital on more than 4 occasions in a rolling 12 month period, the ongoing availability of leave of absence for this purpose should be discussed with the Head of Establishment/Line Manager in the first instance. 9. Personal Leave 9.1 Attendance at Weddings Up to two days may be granted in a rolling 12 month period although only one of which may be with pay for attendance at a wedding Page 32 of 289
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9.2 Marriage during term-time Leave of absence will not normally be granted during the school term time. Only in very exceptional circumstance, for example when the spouse to be is unable to take leave during the school holiday period will a limited period of leave be granted. 9.3 Accompanying spouse on holidays and business trips Leave of absence will not normally be granted for this purpose. Any leave granted in exceptional circumstances will be without pay. 9.4 House removal Where a removal cannot be arranged for a holiday up to two days leave of absence may be granted in a rolling 12 month period. One day shall be with pay, the second, if required, shall be without pay. 9.5 Interviews Paid leave will be granted to teachers called to attend a job interview for a post. The teacher will be required to produce an interview letter prior to authorisation of leave. 9.6 Other Personal Business If the head of establishment is satisfied that the request is reasonable, short periods of less than a day can be granted with pay. 10. Participation in Sporting Events If a teacher is selected to participate in a sporting event at national or international level as a representative of thier country, up to a maximum of 5 days paid leave (or the equivalent of one of the teacher’s normal working weeks) in a rolling 12 month period may be granted. This provision includes team managers or coaches required to attend the event. It also includes time off for a teacher who is the parent/guardian of a child under the age of 16, and who is required to accompany the child while participating in the sporting event. There is no age limit if required to accompany a disabled participant. 11. Time off for Public Duties 11.1 Jury Service If a teacher is called to serve on a jury, there is a requirement for a teacher to attend by virtue of the Juries Act 1974. The teacher must notify their Head of Establishment/Line Manager of the summons. The jury citation letter will require to be produced, to be checked by the teacher’s Head of Establishment/Line Manager prior to authorisation of leave. A teacher will be granted leave with pay to attend unless exemption is secured. The teacher will claim the allowance payable under the Jurors Allowances Regulations and this amount will be deducted from pay. Page 33 of 289
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11.2 Service as a Witness If a teacher is cited to attend court as a witness, leave of absence will be granted as follows: If a teacher is attending as a witness on behalf of the council, leave with pay will be granted, on the understanding that witness fees received (excluding travel and subsistence expenses) are paid to the council. In the case of a teacher called as a Crown Court witness, cited by the Procurator Fiscal or equivalent, leave with pay will be granted, on the understanding that loss of earnings received by the teacher from the Court, will be paid back to the council In all other cases where the teacher is called to attend court as a witness, leave without pay will be granted. Teachers can claim from the person citing them, the relevant amount in respect of loss of earnings. 11.3 Employment Tribunal/Attendance at Court in Course of Duties If a teacher is required to attend court as a witness on behalf of the council, then paid leave will be granted. 11.4 Justice of the Peace Duties All employers must, by law, allow time off work to enable a Justice of the Peace to undertake their role. Time off without pay will be provided. Employees can claim for loss of earnings from the court service. 11.5 Membership of children’s panels Paid time off for members of any statutory tribunals such as a Children’s Panel is available in conjunction with the Time off for Public Duties Policy which can be found here: Time off for Public Duties Policy – My NL 11.6 Election Duties Subject to the exigencies of the service, and authorisation by the Head of Establishment/Line Manager, paid leave will be granted to allow teachers to undertake official duties at elections or referenda of North Lanarkshire Council. 11.7 Candidates in Elections/ Election Agents Subject to the exigencies of the service, unpaid leave for a period not exceeding up to 10 days (or up to the equivalent of two of the teacher’s working weeks) will be granted at the time of the election to teachers who stand for election or undertake the duties of an Election Agent for a Local Authority/Parliamentary/Scottish Parliamentary/European Candidate. 11.8 National conference of a political party Two days leave of absence without pay may be granted. Requests for leave beyond two days should be referred to the Head of Service. Page 34 of 289
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11.9 Local Authority Business Leave can be granted without pay, up to a maximum of two consecutive days at each time of asking, to teachers who are elected members of local authorities. The Head of Service should be specifically informed of each absence. The Assistant Chief Executive of Education is empowered to agree special arrangements in the case of provosts, council leaders and others holding very senior positions. Any such arrangements will be made known to the head of establishment. 11.10 Service in Non-Regular Forces A teacher who is a member of the non-regular forces and who attends annual training camp for a period of not less than one week, will be granted leave with pay for the period of actual attendance at the training camp, up to a maximum of 15 days (or up to the equivalent of three of the employee’s working weeks) and subject to deduction of service pay and allowances received. 11.11 Community Emergency Services A teacher who is a member of a community emergency service, for example retained fire fighters, will be granted paid leave to attend emergencies during working hours. 12. Holidays or Festivals of Religious or Ethnic Groups Teachers who celebrate holidays or festivals on days other than those allocated by the Council and who have fixed annual leave will be allowed, subject to the requirements of the service, up to a maximum of two of their working days, with pay to participate in such religious festivals. Other requests for leave of absence will be considered following discussion with Employee Relations. The total leave in any one year should not exceed five days. 12.1 Religious ceremonies of a family nature Up to one day’s leave of absence with pay may be granted to attend the ordination of, or similar service for a near relative. Requests for additional leave will normally be without pay following discussion with Employee Relations. 13. Participation in Cultural Events Leave of absence will only be where the cultural event is of national or international significance. Such leave of absence will normally be without pay. If the event involves the teacher in visiting a country with which relations are particularly sensitive, the Head of Service will refer the matter to the Chief Executive. 14. Time off for Education Related Matters 14.1 Attendance at exhibitions of the teacher’s own work Leave of absence will not normally be granted for this purpose. Any leave granted in exceptional circumstances will be without pay. 14.2 Leave to undertake authorised expeditions of an educational nature Leave may be granted without pay, for this purpose. Where the teacher undertakes work which is of significant benefit in educational terms a limited amount of leave with salary may Page 35 of 289
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be granted. If the expedition involves the teacher in visiting a country with which relations are politically sensitive, the Head of Service will refer the matter to the Assistant Chief Executive. If a teacher is taking pupils on an educational expedition as part of their work then no leave of absence is required. 14.3 Attendance at the National Mod as a competitor or adjudicator Two days leave of absence with pay may be granted. Requests for leave beyond two days should be referred to the Head of Service who will be empowered to grant further leave. 14.4 Work of the GTC, Education Scotland, SQA or other approved bodies Leave of absence, with pay will normally be granted to teacher who has been invited to participate in the work of such professional bodies provided that the exigencies of the service permit. Requests for leave beyond two days should be referred to the Head of Service with a recommendation and any other details including whether suitable arrangements can be made for the teacher’s duties to be covered. 14.5 Meetings or conferences of an educational or religious nature Leave may be granted where an applicant has been selected to attend certain significant conferences or meetings of an educational or religious nature in a representative capacity. Leave will be granted with salary subject to the deduction of any bursary or other payments made. Other than in exceptional circumstances the period of leave will not exceed five days. If the conference or meeting involves the teacher in visiting a country with which relations are politically sensitive, the Head of Education will refer the matter to the Assistant Chief Executive. 15. Learning & Development Leave 15.1 Training Connected with a Course of Study The Council has a Learning and Development Policy which can be viewed on myNL. You can also access LearnNL which provides details of the training courses available to employees of the Council. 15.2 Study Tours Leave of absence will normally be granted where the applicant has been selected to undertake certain study tours of direct benefit to the education service by enhancing the applicant’s abilities relative to the teaching post held. Leave shall normally be with pay subject to the deduction of bursary or other payments made. If the event involves the teacher visiting a country with which relations are particularly sensitive, the Head of Education will refer the matter to the Assistant Chief Executive. 15.3 Study Leave Study leave with or without pay may be granted to assist teachers undertaking approved qualifying courses. The conditions relating to this are laid down in Standard Circular F16. Page 36 of 289
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16. Career Breaks & Self-Funded Sabbaticals Please refer to Part 2 Section 9 of the SNCT Handbook for further details which is available here: Part 2 Section 9 - SNCT Handbook 17. Attendance at meetings of trade union or professional associations Teachers may request leave of absence for a number of purposes as a result of their membership of trade unions/professional associations. The term ‘professional association’ is used in this context to define bodies such as EIS, SSTA, NASUWT, AHTS and SLS rather than interest groups such as the Association of Advisers etc. Minimum entitlements in relation to time off in connection with the business of trade unions are set out in the Employment Protection (Consolidation) Act 1978 as amended by the 1996 Employment Act. The legislation makes a distinction between trade union duties for which time off is given with pay and trade union activities for which time off is given without pay. Trade union duties include matters such as attendance at negotiating meetings and representing members at grievance and disciplinary hearings. Trade union activities may involve participation in a wide range of business other than that immediately concerned with industrial relations matters. The authority’s policies are based on the statutory requirements but also take into account local agreements made with the teachers’ trade unions. In deciding how much leave of absence may be given and on what basis, the following general principles will be applied (a) Release of teachers in connection with the business of trade unions and professional associations will be subject to the exigencies of the service and will require the specific permission of the Assistant Chief Executive or in consultation with the headteacher. (b) Subject to the conditions above, teachers will be granted leave of absence with pay: (i) to attend local and national negotiating meetings, (ii) to represent members at grievance and disciplinary hearings and at employment tribunals, (iii) to represent their trade unions on certain educational bodies, (iv) to undertake approved training relating to their duties as trade union representatives (v) in connection with other duties directly concerned with industrial relations matters, (vi) attendance at the annual conference of the trade union at no additional cost to the school. (c) Teachers will be granted leave of absence, which will normally be without pay, for certain union activities such as: (i) attendance at other specially convened conferences or meetings of the policy making body of the union which do not directly concern this authority, Page 37 of 289
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(ii) attendance at branch or local meetings of the trade union convened during normal working hours but not dealing predominantly with local authority matters. 18. Other Special Leave There may be occasions when special leave is appropriate but may not be covered by the Special Leave provisions. In these exceptional circumstances, the relevant Head of Service has the discretion to authorise special leave, either paid or unpaid, up to a maximum of 10 working days in total (or up to the equivalent of two of the employee’s normal working weeks), within a 12 month rolling period for situations not already covered by this policy. Applications for special leave which exceed 10 working days, either paid or unpaid, and which are not covered in the above provisions, must be authorised by the Assistant Chief Executive. It is requested that, prior to any approval of a request for more than 10 days leave is given that the merits of the request be discussed with People & Organisational Development to ensure that no unintentional precedent is established. 19. Process for Applying for Special Leave Please note that the process for applying for special leave will vary dependent upon the type of special leave requested. Details of how to apply are contained in the relevant guidance notes which should be read in conjunction with this policy. Please note that leave granted in accordance with the terms of this policy, will be considered as continuous service with this council. The one exception to this is leave taken under Section 20, Career Breaks, where the period of leave will not be counted as continuous service. Page 38 of 289
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Appendix 2 F7 - Leave of Absence Guidance Note for Teachers & Associated Professionals Author Lynn McKenzie, Tracy Simpson Contact details mckenziel@northlan.gov.uk SimpsonT@northlan.gov.uk Owner Fiona Whittaker whittakerf@northlan.gov.uk Date Version number 1 Document status Draft Strategic Alignment Improving the Council’s Resource Base – A Workforce Strategy that is built around the needs of the Council (as a single resource base) to deliver the priority outcomes, ensuring future workforce requirements, new skills and innovative approaches, and succession planning are recognised. Change record Date Author Change made Page 39 of 289
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CONTENTS 1. Introduction 2. Bereavement 3. Time off for Dependants 4. Family Leave 5. Personal Leave 6. Leave for Medical Purposes 7. Participation in Sporting Events 8. Jury Service/Service as a Witness 9. Holidays or Festivals of Religious or Ethnic Groups 10. Career Breaks & Self-Funded Sabbaticals 11. Attendance at Meetings of Trade Union or Professional Associations 12. Other Special Leave 13. How to apply for period of Leave of Absence & Continuity of Service Appendix 1 Application Form for Leave (Time Off for Dependants 6.4-6.6) Page 40 of 289
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1. Introduction 1.1 The following guidance provides additional assistance when making a request for or granting leave of absence, and should be read in conjunction with the Leave of Absence for Teachers and Associated Professionals Policy. 1.2 For further clarification on any aspect of the policy, please contact People & Organisational Development. 2. Bereavement (Section 5 of the Leave of Absence Policy) 2.1 By the very nature of this category of special leave, care will be taken to consider all the circumstances surrounding your request for time off. 2.2 The list of relationships included in the policy is provided as a guideline only, and leave of absence will not be limited to the relationships detailed. Close relationships will vary from person to person and consideration will be given to each individual case. 2.3 It is expected that bereavement leave is to be taken at or around the time of the funeral, and is not to be used to deal with business relating to the estate of the deceased which may arise some time after the funeral. 2.4 It is expected that travel time to attend a funeral, within the United Kingdom, will be included in the amount of any paid leave of absence granted, up to the maximum detailed in the policy for each category of bereavement leave. However, if leave is required over and above the amount of leave already authorised, consideration may also be given to a period of additional leave under Section 18 of the policy. 2.5 If you have to travel abroad as a result of a bereavement, for example to attend a funeral or to make arrangements to retrieve remains of the deceased, it is expected that the necessary travel time will be included in the amount of any paid leave of absence granted, up to the maximum detailed in the policy. However, if leave is required over and above the amount of leave already authorised, consideration may also be given to a period of additional leave under Section 18 of the policy. 2.6 Parental Bereavement Leave (Section 5 of the Leave of Absence Policy) As detailed at Section 5.4 of the Leave of Absence for Teachers and Associated Professionals Policy, employees who suffer the loss of a child under the age of 18 are entitled to 2 weeks Parental Bereavement Leave (PBL). This includes parents who suffer a stillbirth after 24 weeks of pregnancy. Employees will be entitled to the maternity pay and leave that they would have been entitled to in the event of a live birth or in the event that a child dies following the birth. 2.6.1 You can take the leave at the time(s) you choose within the 56 weeks after your bereavement. However, the leave must be taken in blocks of at least one week, it cannot be taken as individual days. 2.6.2 If you wish to take the leave within the first 56 days after your bereavement, you do not need to provide any notice, however you must advise your line manager no later than when you are due to start work on the first day on which you wish to take leave or, if that is not feasible, as soon as you can. 2.6.3 To take leave more than 56 days after your bereavement, you must give your line manager at least one week's notice. Page 41 of 289
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2.6.4 If you change your mind about taking the leave you can cancel it and take it at a different time (within the 56 weeks after your bereavement). Where your leave was due to begin during the first 56 days after your bereavement, you must let your line manager know you no longer wish to take it before your normal start time on the first day of the leave. 2.6.5 Where your leave was due to begin more than 56 days after your bereavement leave you must advise your line manager know at least one week in advance that you wish to cancel it. You cannot cancel any week of parental bereavement leave that has already begun. 2.6.6 The Council recognises the need to provide bereaved parents with as much support as possible, and therefore you will continue to receive your normal contractual pay during the period of Parental Bereavement Leave. 2.6.7 During your leave, all the terms and conditions of your contract will continue. For example, holiday entitlement continues to accrue and pension contributions will continue to be paid. 3. Time Off for Dependants (Section 6 of the Leave of Absence Policy) 3.1 The right to request time off for dependant’s falls into three categories, one is time off work to deal with unforeseen matters or genuine emergencies, and the second is time of for a pre-arranged situation such as time to attend a pre-arranged hospital appointment with a dependant (Section 6.1 and 6.2 of the policy). The third category is to deal with the care or support of a dependant (Sections 6.4-6.6 of the policy). 3.2 A specific amount of time off is allowed for the different types of leave under Section 6 of the policy, however Heads of Establishment/Senior Officers must give additional consideration to the amount of time off available where the person for whom the employee is providing support or care to, has a disability. Further advice is available from People & Organisational Development. 3.3 It may not always be necessary or possible to take a full day’s leave on each occasion. It may be necessary to grant a half day of leave, allowing more flexibility both for the service and for you. It should be noted that if you choose to take half days, this will be counted as one occasion, and the maximum number of occasions per leave year prescribed within the policy cannot be exceeded. 3.2 Support of Dependant(s) 3.2.1 Section 6.1 of the policy allows employees to request time off to deal with the immediate situation/problem and make longer term arrangements for the care of the dependant. If necessary, and subject to the exigencies of the service, employees may be able to take the three occasions allowed over consecutive days. If you choose to do so, there will be no further special leave available under this category for a further 12 months from the first day of consecutive leave taken. 3.2.2 Section 6.2 of the policy allows employees to request time off to attend a prearranged medical examination or hospital appointment with a dependant. Paid leave will be granted for up to three occasions in a 12 month rolling period. 3.2.3 Section 6.4 to 6.5 allows employees to request time off to support or care for a dependant who has been diagnosed with a terminal illness or has a serious/long term health condition, as defined in the policy. The amount of time off for each of these Page 42 of 289
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circumstances is detailed in the policy, however Heads of Establishment/Senior Officers should seek advice from Employee Relations before referring applications to the Head of Service for approval to ensure consistency of application. 3.2.4 Post-Operative Recovery Employees can also request time off to care for a dependant who is recovering from an operation (Section 6.6 – Post-Operative Recovery). The table below provides a list of the types of operations that may require a dependant to have support at home following their operation. Whilst the list of operations are not exhaustive it covers the most common operations and should provide a good overall guide for managers. Details of the anticipated timescales for the amount of leave that may be required in each circumstance and the factors that could affect the recovery times are also provided. Heads of Service must ensure that a fair and consistent approach is taken when approving leave for this purpose, whilst taking individual circumstances into account, including whether the dependant has a disability. Post-Operative Recovery Type of Surgery Timescale for Leave Main Factors that could affect timescales Major Abdominal Surgery e.g. removal of bowel Up to 2 weeks Case by case basis Gall Bladder removal Up to 1 week Type of Surgery i.e. Keyhole or open Any complications Stent Up to 1 week Nature of underlying condition Any complications Major Cardiovascular surgery i.e. heart bypass Up to 4 weeks Case by case basis Breast Cancer - Mastectomy Up to 4 weeks Nature of surgery i.e. open or keyhole Any additional treatment inc. psychological Breast Cancer - Lumpectomy Up to 1 week Nature of surgery Any additional treatment inc. psychological Hysterectomy Up to 4 weeks Nature of surgery i.e. open or keyhole Any additional treatment inc. psychological Prostatectomy Up to 1 week Nature of underlying condition Any complications Kidney transplant/removal Up to 4 weeks Nature of surgery Any complications Any ongoing treatment Eye Surgery (not elective) Up to 1 week Nature of surgery Any complications Hip Replacement Up to 2 weeks Nature of Surgery i.e. total or part replacement Any complications Knee Replacement Up to 2 weeks Nature of Surgery i.e. total or part replacement Any complications Page 43 of 289
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3.2.5 Application process for Leave under Section 6.4 to 6.6 26 weeks continuous service is required to apply for time off under Sections 6.4 to 6.6, and employees must complete the application form attached to this guidance note (Appendix 1). Applications for such leave will be considered where an employee has the primary care responsibility for a dependant who has a terminal or serious illness, or is recovering from an operation as detailed at Section 6.6 of the policy. The application form, which is attached as an appendix to this guidance note, should be submitted to the Head of Establishment/Senior Officer at least four weeks prior to the proposed date of commencement of leave. However, if this is not feasible, reasonable notice should be provided. You are also required to provide appropriate medical evidence such as a letter from a GP, Hospital or other medical/care provider. This information should contain details of the nature of the care/support required and anticipated timescales if possible. The application form requires to be approved by the Head of Service. Further information is available from Employee Relations. 4. Family Leave (Section 7 of the Leave of Absence Policy) 4.1 Please refer to Part 2 Section 7 of the SNCT Handbook for further information. 4.2 In addition to statutory paternity leave as detailed within the SNCT Handbook, a father, husband or partner of an expectant mother is entitled to two additional week’s occupational paternity leave at full pay. Occupational paternity leave must be taken within 12 months of the birth and must be taken in blocks of no less than one week (subject to the exigencies of the service). If the father or partner of the expectant mother meets the criteria for statutory paternity leave, an employee can apply for occupational paternity leave by requesting this through myself. This will be recorded as special leave – occupational paternity leave. 5. Leave for Medical Purposes (Section 8 of the Leave of Absence Policy) 5.1 If you are requesting leave for non-emergency medical purposes, appointments should be arranged out with normal working hours. If this is not possible, appointments must be made at the start or end of the working day. 5.2 You should discuss time required with your Head of Establishment/Senior Officer – time will be given on a paid basis. 5.3 Leave to attend a hospital appointment will be authorised on the production of an appointment card or letter. There is no requirement for your manager to retain a copy of the appointment details on file. 5.4 There may be circumstances when you require time off to attend a hospital appointment, but due to the nature of the appointment, you may not wish to show the appointment card or letter to your Head of Establishment/Senior Officer. In these circumstances it may be appropriate for you to contact your POD representative, who will check the details on the appointment card or letter and then notify and confirm with your manager that leave may or may not be authorised. Page 44 of 289
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5.5 Where you are required to attend hospital on more than 4 occasions in a rolling 12 month period, the ongoing availability of leave of absence for this purpose should be discussed with the Head of Establishment/Senior Officer in the first instance. Each case will be considered on its own merits. 5.6 It is recognised that disabled employees may require an increased number of hospital appointments due to ongoing medical treatment. The Equality Act 2010 requires that the employer makes reasonable adjustments in order to retain disabled employees in employment. Each case will be considered on its own merits 6. Personal Leave (Section 9 of the Leave of Absence Policy) 6.1 As referred to in section 9 of the Leave of Absence policy, examples of personal leave include: Attendance at Weddings Marriage during Term-time Accompanying Spouse on Business trips and Holiday House Removal Interviews Other Personal Business The entitlement associated with each type of leave is detailed in the Leave of Absence Policy. 7. Participation in Sporting Events (Section 10 of the Leave of Absence Policy) 7.1 This provision is not exclusive to those detailed in the policy. All requests received for paid leave under this category will be considered on an individual basis. If you request leave under this category, you may also make use of Section 18 of the policy, if required. 8. Jury Service/Service as a Witness (Section 10 & 11 of the Leave of Absence Policy) 8.1 If you attend court either to serve on a jury or as a witness or a witness on behalf of the Council, paid leave will be granted, on the understanding that the equivalent of any monies received, either witness fees or loss of earnings, will be paid back to the Council. 8.2 Payroll will be advised by your Head of Establishment/Senior Officer, of the details of your attendance at court, attaching a copy of the letter from the court advising the amount of fees or earnings paid. Payroll will then deduct this amount from your earnings to ensure that you are not paid twice. 8.3 Not all court or witness leave will be paid. An example which would not qualify you for paid leave could be attending court to deal with divorce proceedings. If you are cited to attend as a witness for another party, it is expected that loss of earnings will be reimbursed by the individual requesting your attendance as a witness and that unpaid leave will be granted to attend court. 8.4 There may be occasions when you have to attend legal proceedings, not as a witness, but to accompany a minor. Examples are accompanying a minor who has been called as a court witness or accompanying a minor attending a Children’s Panel Hearing, and paid time off will be granted for this purpose. Page 45 of 289
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8.5 Non regular forces or the Volunteer Reserve Forces consist of the Royal Naval Reserve (RNR), the Royal Marines Reserve (RMR), the Territorial Army (TA) and the Reserve Air Forces. 8.6 If you are a Reservist and are called for duty into full-time service with the Regular Forces, a call out notice will be issued to you. In addition, the Council will be issued with an acknowledgement notice, to be returned to the Ministry of Defence, as the consent of your employer is required. 8.7 Leave for the duration of Reservist duty will be paid leave. At the end of your period of duty, you have the right to return to your former employment or suitable alternative employment. For further advice on Reservists, contact POD. 9. Holidays or Festivals of Religious or Ethnic Groups (Section 17 of the Leave of Absence Policy) 9.1 If you celebrate holidays or festivals on days other than those allocated by the Council and have fixed annual leave, you will be allowed, subject to the requirements of the service, up to a maximum of two of your working days, with pay, to participate in such festivals. The total leave should not exceed five days within a 12 month period. 9.2 It should be noted that there may not always be a requirement for an employee to have time off during working hours for religious observance. Consequently, due consideration should be given prior to authorisation of leave on this basis to avoid setting precedents. 10. Career Breaks & Self-Funded Sabbaticals (Section 16 of the Leave of Absence Policy) 12.1 Please refer to Part 2 Section 15 of the JNCT Handbook for further information. 12.2 A Career Break is defined as a period of special leave without pay. The purpose of a career break is to provide teachers and associated professionals with an opportunity to obtain an extended break. While there are no prescribed activities that a career break must involve, examples might include the care of children (or other family members), voluntary work, travel or study. 12.3 Eligible employees are required to have at least 2 years’ continuous employment, on a permanent or temporary basis, with the Council. In the case of teachers, the employee is required to have at least 2 years’ continuous employment after achieving the Standard for Full Registration with the General Teaching Council for Scotland. 12.4 A career break will last for a minimum of 6 months and a maximum of 5 years. Breaks of a shorter duration will be covered by special leave requests (see paragraph 1.3 above). The length of the intended career break should be identified at the point of application. 11. Attendance at Meetings of Trade Union or Professional Associations (Section 17 of the Leave of Absence Policy) Details on what leave is available is outlined within Leave of Absence Policy for Teachers. These general guidelines will be applied in specific circumstances noted in the following paragraphs: Page 46 of 289
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(a) Where a member of the teaching staff in the authority has been elected to high office in one of the major trade unions or professional associations, he/she will be granted additional leave to allow the wider duties of the post held to be undertaken effectively. The actual amount of additional leave to be granted will be determined by the Assistant Chief Executive. Where the teacher accepts with the agreement of their Assistant Chief Executive a convenership or vice convenership of a national body, he/she will be treated more favourably than the general provisions made below. Such exceptional circumstances should be taken into consideration in the staffing arrangements made for the school involved. (b) In all other cases a limit will be set on the amount of leave granted in any one session. In normal circumstances the leave limit will be equivalent to twenty days (FTE). The maximum amount of leave will only be granted where the full twenty days is actually required. Teachers applying for such leave must seek the approval of the Assistant Chief Executive. The twenty days will include time for all activities. Where a teacher is appointed by the trade union to represent it on an outside body such as the LTS, SQA or committees of these or other bodies of a professional nature, time for attendance shall be included within the twenty days. Where teachers who are trade union officials are separately elected to such bodies, time for attendance shall not be included within the twenty days limit. (c) At the start of each session, teachers involved must indicate the time which they estimate will be required for trade union duties. This will include attendance at the AGM of the association, executive meetings approved as duties, STUC conferences, SNCT national and local meetings etc. Thereafter, the remaining time may be requested for other activities in which the teacher is involved as a result of their union membership. It is recognised that it is difficult to estimate in advance the number of days required for trade union duties. Nevertheless, past experience should provide a relatively accurate guide. (d) The onus is on the teacher to make application for leave for individual duties and activities as defined in paragraph (c) above. For this purpose, Form PS16 – Time Off For Trade Union Duties, Training and Activities should be completed by the applicant and given to the head teacher for onward transmission to the Personnel Section. The form reproduced as Appendix 2 will be used for this purpose. (e) Where difficulties arise in handling individual applications, reference should be made to the Assistant Chief Executive of education. In certain cases, the Assistant Chief Executive will contact the general secretary of the professional association union or thier nominated representative to clarify the situation before a final decision is reached. 12. Other Special Leave (Section 18 of the Leave of Absence Policy) 12.1 Section 18 of the policy is the provision of leave for other occasions that are not categorised within the policy. 12.2 Examples of instances when this section of the policy could be accessed are additional bereavement leave; additional leave to participate in a sporting event. These are examples only and applications under this section should be given individual consideration before any decision is taken. Page 47 of 289
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12.3 The relevant Head of Service has the discretion to authorise leave of up to a maximum of 10 days, either paid or unpaid. If you are seeking leave of up to 10 days, either paid or unpaid, you should forward a request in writing to your Head of Service, stating the reasons for the request for leave. The Head of Service will consider the request and respond in writing to you. 12.4 If the requested leave exceeds 10 days, either paid or unpaid, approval must be sought by the Assistant Chief Executive. You should forward a request in writing to the Assistant Chief Executive stating the reasons and the amount of leave requested. For requests for leave exceeding 10 days, the Assistant Chief Executive will consult with the People & Organisational Development. If, following consultation, agreement is reached on a recommendation, the Assistant Chief Executive will respond in writing to you. 12.5 If, following consultation, agreement cannot be reached to recommend leave, the Assistant Chief Executive will respond in writing to you. You have the right to appeal against this decision, using the council’s Grievance Framework for Teachers. 13. How to apply for a period of leave of absence 13.1 The majority of applications for leave of absence can be made by using Myself, however, application forms must be completed and approved prior to this for some categories of special leave such as Time for Dependants, Maternity/Adoption Support Leave, Shared Parental Leave and Career Breaks. 13.2 Where special leave is requested in advance, you must ensure you provide adequate time for your Head of Establishment/Senior Officer to consider your request, if this is feasible. You should also submit any supporting documentation to your Head if Establishment/Senior Officer at the same time. There is no requirement for your manager to retain a copy of appointment details on file. 13.3 It is accepted that in certain limited circumstances you may be unable to discuss the requirement for leave of absence in advance with your Head of Establishment/Senior Officer. In such circumstances, you must make contact with your manager by telephone (text messaging and email are not acceptable unless alternative contact arrangements have been made as part of a reasonable adjustment) as soon as possible and not later than the commencement of core time on the day the leave is required. Failure to make contact with your manager could result you taking unauthorised leave of absence which may lead to disciplinary action. 13.4 Leave granted within the terms of the Leave of Absence Policy will be considered as continuous service with this council. 13.5 The one exception to this is leave taken under Section 16, Career Breaks & Self-Funded Sabbaticals. The period leave will not be counted as continuous service, however, service prior to and following the leave will be linked and these two periods will count as continuous service for contractual purposes, even although there has been a break in service. Please refer to SNCT for further guidance. Page 48 of 289
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Appendix 1 F7- Leave of Absence Policy Application for Time off for Dependant(s) - (6.4 – 6.6) Leave may be available for employees with 26 weeks continuous service. Terminal Illness of a Dependent - Subject to the appropriate evidence a maximum of 16 working weeks leave be taken. Payment for leave may be available for up to 8 weeks paid and 8 weeks unpaid. The maximum period of leave may be extended in exceptional circumstances. Serious/Long Term Health Condition of a Dependant - Subject to the appropriate evidence a maximum of 8 working weeks leave may be taken. Payment for leave may be available for up to 4 weeks paid and 4 weeks unpaid. Post-Operative Recovery – The available time off in these circumstances will depend on the nature of the operation.( See section 4.2.3 of this guidance note) Leave for all categories may be broken down into smaller periods of leave i.e. 1 day but cannot exceed the maximum working weeks. Part 1 – Employee details (to be completed by employee) You can apply for dependants leave if you have 26 weeks continuous service at the date of commencement of your period of leave. You must submit this application to your line manager for authorisation by the appropriate Head of Service or nominated officer, at least four weeks prior to the proposed date. However, if this is not feasible, reasonable notice should be provided. Employee name: Service/Division: Job title: Employee number: Continuous service start date* *This is recognised continuous service detailed in NLC Core Conditions of Service Part 2 – Reason(s) for leave (to be completed by employee) I am applying for carers’ leave for the following reason: (Please select the relevant reason below and provide further detail) 6.4 Terminal Illness of a Dependant(s) 6.5 Serious/Long Term Condition 6.6 Post-Operative Recovery Further Information Page 49 of 289
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Evidence attached (please tick):
Letter from GP
Letter from hospital
Letter from consultant
Evidence attached (please tick):
Supporting memo from line manager
Other (please give details below):
Leave requested:
Date from:
Date to:
Number of working days if less than a full
week:
Full day / part day (please delete)
Times requested if less than a full day:
No of weeks:
Other arrangement:
Do you have any other relatives or friends who can share the caring responsibility? YES
NO Please give details:
If you answered yes to the above question, does your relative or friend work for North
Lanarkshire Council? YES NO
If your relative or friend works for NLC, please provide further details:
Employee name: Service/division:
Job title:
Has the above named –
Applied for time off to support your dependant? YES NO
Has it been approved? YES NO DECISION PENDING
If it has been approved, please detail the dates to/from and the amount of leave being
taken:
If you have taken time off to
support a dependant under 6.4-6.6
in the last twelve months, provide
dates when leave was taken and
reason:
____________________________________________ Employee Signature
____________________________________________ Date
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Part 3 – Authorisation A - Line manager considered application - approve YES NO (If not approved please provide reason) Requested Approved Date from: Date to: Number of working days if less than a full working week: Full day / part day (please delete) Times requested if less than a full day: Total No of weeks: Other arrangement: Signature – Date - If approval varies from request please give details and any review period agreed – If yes, what, management action will be taken in order to maintain service provision during period of leave (this will apply more often during prolonged period of leave) – B –Head of Service / Nominated Officer considered application – approve YES NO Signature – Date – If no, reason(s) – C – Copy of completed form with decision to be provided to employee by line manager: Date form provided to employee – ___/____/____ Line manager will advise payroll of the period of leave authorised. Page 51 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref AA/AG/PC/GG Date 29/11/22 Annual Data Protection Report for Financial Year 2021-22 From Archie Aitken, Chief Officer (Legal and Democratic) E-mail aitkena@northlan.gov.uk Telephone 07939 280102 Executive Summary The purpose of this report is to provide Committee with information on the Council’s Data Protection compliance and activity in respect of financial year 2021-22. Recommendations It is recommended that Committee 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 AGENDA ITEM 4 Page 53 of 289
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1. Background 1.1 This report by the Chief Officer of Legal and Democratic, as the Council’s Data Protection Officer (DPO), provides an update in relation to the Council’s data protection compliance and activity in respect of the Financial Year 2021/22. 2. Report 2.1 The Information Governance Policy Framework brings together the Council’s information governance policies, including the Data Protection Policy. The Framework was reviewed in 2020/21 and approved by Policy and Strategy Committee before being issued as part of the Council’s Information Governance week in June 2021. A review of corporate data protection arrangements is currently underway and a report on the review will be submitted to Committee, once concluded. It was previously identified that there was a need to review corporate procedures for dealing with subject access requests to ensure that requests were being dealt with consistently across the Council. This work was impacted by the pandemic, however, comprehensive Subject Access Request Guidance was completed in April 2021 and circulated to Services in June 2021 alongside the following resources: - Personal Data Breach Case Study and Lessons Learned Note - Info Note 1: What is Personal Data - Info Note 2: Data Controllers and Data processors - Info Note 3: Data Protection Principles - Info Note 4: Privacy Notices 2.2 Personal Data Breaches 2.2.1 The Council has a statutory obligation to report a personal data breach (where it has been assessed as resulting in a risk to the rights and freedoms of the individual(s) affected) without undue delay and, where feasible, not later than 72 hours after having become aware of the breach, to the Information Commissioner’s Office (ICO). Where the risk to the data subject is considered to be high then the Council should also contact them to advise them of the breach. 2.2.2 The DPO maintains a record of personal data breaches in accordance with the Data Protection Act 2018 and the UK GDPR. The total number of breaches notified to the DPO in the financial year 2021/22 was 69. This compares with 49 in the previous year. Of these, 5 met the threshold for reporting to the ICO, compared with 12 in the previous year. This represents a year on year increase of 41% in the volume of data breaches recorded across the Council with a significant improvement in the proportion of cases meeting the threshold for reporting to the ICO. 2.2.3 The ICO did not take enforcement action in respect of any of the reported breaches. It did, however, make a number of observations and recommendations. - One breach resulted from a cyber-attack on one of the Council’s contractor’s systems, which culminated in a police investigation. Although actions were taken by the contractor, as data processor, to mitigate and report the breach, the Council were not timeously notified of the breach and this was the subject of a review with the data processor. - The importance of accurately recording information about data subjects within records and ensuring that any manually recorded information is accurately Page 54 of 289
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migrated into any electronic record. - Ensuring that any attachments to emails are correctly identified and that any manual correspondence is accurately addressed and contains only information properly intended for that recipient. - populated forms should not be provided in response to requests for blank forms - forms populated with an individual’s personal data must not be used as a template. - ensuring appropriate double checking and verification measures are in place. - managers must remind staff of their responsibilities to ensure that personal data is processed securely. 2.3 Subject Access Requests 2.3.1 As members are aware, a Subject Access Request (SAR) is a request made by an individual in order to access their personal information that is held by an organisation, which normally has to respond to the request within one month. However, if the individual has made a number of requests or if the request is complex then the organisation may need additional time to consider the request and can take up to a further two months to provide their response. If they intend to do this then they should let the individual know within one month that more time is required and the reason for this. 2.3.2 The Council’s SharePoint platform has been used since December 2019 to record the number of SARs received by services and the extent of compliance with statutory timescales in responding to such requests. The volume of SARS received throughout the Council and the extent of compliance is reported quarterly to the Data Governance Board. 2.3.3 167 SARs were recorded as received during 2021/2022. 73.7% of these were responded to within statutory timescales. This compares with 98 SARs received in 2020/2021, of which 62% were actioned within statutory timescales. There has therefore been an improvement in the rate of compliance with statutory timescales for responding to SARS despite a higher overall number of SARs being received. 41.3% of all recorded SARs received by the Council in 2021/2022 were in respect of Social Work. 2.4 Complaints 2.4.1 There were 5 recorded complaints received from the ICO during 2021/22. These related to the following: - a failure to respond timeously to one of a series of SARs made by a data subject - reference to outdated data protection legislation within one form issued by the Council - a complaint that the Council had failed to provide certain information in response to a SAR that required responses from a number of services Page 55 of 289
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- personal data relating to an individual had wrongly been made available on one of the Council’s online public portals - a complaint that a SAR had not been properly responded to because the information provided in response to it had not covered the period of time specified in the request. 2.4.2 The ICO have adopted a policy of increasingly encouraging data controllers to engage directly with individuals who have made complaints to their office as regulator, rather than directly intervening. At the conclusion of the complaint, where the ICO have not decided to take any formal enforcement, they will usually make recommendations to the data controller about any steps which they feel could be taken to address any shortcomings in respect of their compliance highlighted in the particular case (as referred to in Section 2.2 above). Any such recommendations have been fed back directly to relevant Services by the Information Governance Team and also by periodic reporting through meetings of the Council’s Data Governance Board. 2.4.3 The total of 5 reported regulator complaints compares with one reported ICO complaint for the year 2020/2021. This represents a significant increase from a low comparator. It is not possible to definitively ascertain whether this increase results from a reduction in compliance or whether because of an increased general awareness of the right to complain to the regulator. The majority of ICO complaints related, as would be expected, to responses to SARs. The Council received a 70.4% increase in the level of SARs received during this financial year. A corresponding increase could therefore be anticipated in ICO complaints. 2.5 Data Protection Training 2.5.1 The Council’s online training portal has several mandatory modules which staff are required to complete every two years. Data Protection and Information Security Awareness training falls within the category of mandatory training and the level of uptake of these modules is reported to and monitored by the Data Governance Board. In addition to the basic Data Protection training module, an advanced module has also been developed. Since June 2021, the advanced training module has been mandatory for all employees who have responsibility for staff and for those whose roles have been identified as requiring an enhanced level of training. 2.5.2 A review of the Council’s Information Governance and Security arrangements was undertaken and is detailed in the Internal Audit Progress Report which was reported to the Audit and Scrutiny Panel in March 2021. The review concluded that, while there was a ‘reasonable assurance’ that the Council had appropriate and generally effective arrangements in place in relation to information governance and security, the uptake of mandatory training across the Council by relevant staff was low and in need of improvement. Training compliance in respect of the mandatory online training modules increased from between 6 to 13% compliance in 2019/2020 to between 54 to 61% in 2020/2021. The compliance level in respect of the advanced Data Protection module for 2020/2021 was 69%. 2.5.3 As at March 2022, 50% of relevant staff had completed the Data Protection Essentials Module, 63% of staff had completed the Advanced Data Protection module and 48% had completed the Information Security Awareness and Records and Information Management mandatory modules. Although levels of training undertaken in this area has increased significantly from a low base in 2019/2020, the level of uptake has fallen short of levels achieved in the previous financial year. Page 56 of 289
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2.6 Service Specific Training 2.6.1 Further training sessions have been developed and delivered by Legal Services’ Information Governance Team. At the request of the Social Work Service, face to face training has been delivered through Microsoft Teams to officers who have direct responsibility for responding to subject access requests, and 75 officers have received the training to date. This encompasses a variety of posts, including but not restricted to, social workers, senior social workers and residential and house managers. The training encompassed and reinforced principles contained within the Corporate Subject Access Request Guidance, with a particular emphasis on good practice in the redaction of information in response to requests. The training also focused on the importance of responding within statutory timescales and of appropriately supporting social work clients who may be receiving substantial quantities of very sensitive personal information. 2.6.2 Legal Services aim to continue to deliver similar training to the other Council Services as part of a rolling programme during Financial Year 2022/2023. 3. Measures of success 3.1 Continued compliance with statutory responsibilities and improved uptake of mandatory training. 4. Supporting documentation None Archie Aitken Data Protection Officer & Chief Officer of Legal and Democratic Page 57 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? This report forms part of the duties of the Council’s Data Protection Officer (DPO) whose role is to facilitate compliance with data protection legislation 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? Page 58 of 289
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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? This report contains tracking and monitoring performance information relating to Information Governance and Information Security. The Information Governance and Information Security Risk is a key corporate risk on the Council’s Risk Register, and tracking and monitoring performance in this area forms part of the management controls which aim to reduce the risk and provide assurance on how effectively it is being 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 59 of 289
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North Lanarkshire Council Report Finance & Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref; EK/KS/RM Date 01/03/23 Treasury Management Strategy 2023/2024 Treasury Management and Prudential Indicators 2023/2024 to 2025/2026 From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939 280 601 1. Background 1.1 Each year, in line with the Code of Practice, the Council approves a Treasury Management Strategy. This report updates the strategy for year 2023/2024. Executive Summary This report fulfils the key requirements of the Local Government Act 2003 to: • Outline the Treasury Management Strategy for 2023/2024 in accordance with the CIPFA Code of Practice on Treasury Management. • Report on the treasury and prudential indicators as required by the above code and the CIPFA Prudential Code for Capital Finance in Local Authorities. Recommendations It is recommended that Committee: 1) Approves the Treasury Management Strategy 2023/2024 and adopts the Treasury Management and Prudential Indicators for 2023/2024 to 2025/2026, set out within Appendix 1 to this report. 2) Acknowledges the proposed use of specific fiscal flexibilities as advised by Scottish Government, in 2022/2023 and 2023/2024, with the implementation of such managed in line with the principles detailed within the Treasury Management Strategy 2023/2024. 3) Remits the Treasury Management Strategy 2023/2024 to the Council for approval. 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 AGENDA ITEM 5 Page 61 of 289
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1.2 In addition, the Treasury Management Strategy outlines the Prudential and Treasury Indicators, which are monitored on a regular basis to demonstrate that the Council’s investment plans are managed within a sound financial environment. 1.3 This strategy continues to emphasise, under the revised Code of Practice, an enhanced role for members in terms of accountability and awareness. The Finance & Resources Committee is responsible for the development of the strategy, its implementation and monitoring, while the Audit and Scrutiny Panel has a specified role in the effective scrutiny, as part of its work on reviewing the internal financial controls of the Council. 1.4 The report also reflects The Local Government Investments (Scotland) Regulations 2010 which were enacted from 1 April 2010 containing a requirement for the annual investment strategy and annual investment report to be approved by the full Council and not delegated to a committee or sub-committee. As a result, this strategy, if endorsed by committee, should be remitted to the Council for approval. 2. Report 2.1 The strategy fully detailed within Appendix 1 covers the: • debt and investment projections • outlook in interest rates • borrowing and investment strategies • treasury management performance measures • policy on repayment of loans funds advances • treasury management/prudential indicators. 2.2 The requirements of the Local Government Investments (Scotland) Regulations 2010 have been incorporated within the 2023/2024 Strategy. 2.3 The introduction of the Prudential Code for Capital Finance in Local Authorities in April 2004 brought about a change to capital spending controls, giving councils the freedom to invest in capital projects without the limitation of legislative controls, provided their programmes can be shown to be prudent, affordable, and sustainable. 2.4 This report builds on this framework outlining the Council’s prudential and treasury management indicators for 2023/2024 to 2025/2026. The key mandatory indicators required by both the Treasury Management Code and the Prudential Code are illustrated for these years and, along with local indicators, with a view to more fully informing the decision-making process. 2.5 As outlined in 2022, the Scottish Government introduced fiscal flexibilities for Local Government to help manage the cost of COVID, subject to statutory guidance. Discussions have taken place between the CIPFA Directors of Finance, Scottish Government and COSLA, to determine the application and impact of these with statutory guidance circulars issued for implementation. As a result, these flexibilities options have been reviewed and considered and Council seeks approval to use specific fiscal flexibilities in 2022/2023 and 2023/2024, with the implementation of the fiscal flexibilities managed in line with the principles detailed within the Treasury Management Strategy 2023/2024. Further information can be found in Appendix 1. 2.6 Members should note that the forecasts contained within this report are indicative, pending the outcome of the consideration of approval around the fiscal flexibilities, and already incorporate the 5-year Capital Programme 2021/2022 to 2025/2026. The financial implications of implementing this plan are accounted for in the Council’s Medium Page 62 of 289
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Term Financial Planning assumptions. 2.7 Material changes to the estimates/forecasts provided within this strategy and prudential indicators will be reported during the quarterly Treasury Management monitoring process. 3. Measures of success 3.1 The Treasury Management Strategy and the Prudential/Treasury Management indicators illustrated in Appendix 1, provide members with assurance that the key objectives of the Prudential Framework (i.e. prudence and affordability) will be satisfied, and the inherent risks of Treasury Management risks will be controlled effectively and efficiently, providing value for money. When taken together, the indicators illustrate that the proposed capital investment plans for 2023/2024 onwards are prudent and affordable. Healthy prudential margins from 2023/2024 onwards justify the investment levels, the cost or affordability of which is contained within the existing financial management strategies. 4. Supporting documentation 4.1 Appendix 1: Treasury Management Strategy 2023/2024 and the Treasury Management and Prudential Indicators for 2023/2024 to 2025/2026 (see attached). Elaine Kemp Chief Officer for Finance Page 63 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? All financial impacts are contained within the 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 have 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 have 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 ☒ Page 64 of 289
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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 scheduled) 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? 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 65 of 289
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Appendix 1 Treasury Management Strategy 2023/2024 & Treasury Management Indicators & Prudential Indicators 2023/2024 to 2025/2026 Page 66 of 289
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Appendix 1 Index 1. Introduction 2. Annual Borrowing Requirement 2023/2024 3. Outlook for Interest Rates 4. Annual Borrowing Strategy 2023/2024 5. Annual Investment Strategy 2023/2024 6. Performance Measurement Indicators and Benchmarking 7. Treasury Management Indicators 2023/2024 to 2025/2026 8. Prudential Indicators 2023/2024 to 2025/2026 9. Policy on Repayment of Loans Fund Advances 2023/2024 10. Fiscal Flexibilities Annex A: Treasury Management Policy Statement and Clauses adopted Annex B: Explanation of Long-term Rating Definitions Annex C: Permitted Investments, Associated Controls Credit Rating, Money and Time Limits Annex D: Interest Rate Forecast March 2023 until December 2025 Annex E: Sensitivity Analysis of Prudential Indicators: Affordability 2023/24, 2024/25 and 2025/26 Annex F: Loans Fund Repayment Schedule Page 67 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 1. Introduction 1.1 Treasury Management (TM) deals with the borrowing and investment activity of the Council and is an integral part of the financial management strategy of the Council. It seeks to ensure that both capital borrowing requirements and day to day revenue cash transactions are fully funded. Its importance has increased as a result of the additional freedoms provided by the Prudential Code, with specific treasury management and prudential indicators included in this Strategy that require approval. 1.2 The treasury management and prudential indicators outlined within section 7 and 8 below consider the affordability and impact of capital expenditure decisions, whilst the treasury management service considers the effective funding of these decisions. Together these form part of a process to ensure the Council meets its balanced budget requirement. 1.3 The Council’s treasury management activities are strictly regulated by statutory requirements and a professional code of practice. In accordance with the Council’s financial regulations the Council adopts the CIPFA “Treasury Management in the Public Services” Code of Practice (the Code) issued in December 2021 including the Treasury Management Policy statement, and the adoption of the key clauses outlined within Annex A. The Council also complies with the CIPFA Prudential Code issued in December 2021 and the setting of three-year prudential indicators. As previously advised the Council will adopt the revised reporting requirements for the first time during financial 2023/24. 1.4 The Council has a Capital Strategy which is approved and reviewed annually by the Policy and Strategy Committee, in conjunction with the Strategic Capital Investment Programme to demonstrate that the Council takes capital expenditure and investment decisions in line with the Councils service objectives and properly takes account of stewardship, value for money, prudence, affordability and sustainability. 1.5 The Prudential Code requires the Council’s Capital Strategy to be aligned to the Treasury Management Strategy. To ensure this integrated approach between the capital expenditure plans and Treasury Management Strategy, the Council will continue to incorporate the Prudential Indicators with regard to capital expenditure within this document. 1.6 The Treasury Management Strategy outlines the Council’s debt position, including the anticipated level of debt and the authorised borrowing limit. The capital expenditure plans determine the borrowing need of the Council. The Treasury Management team essentially monitor the long-term cash flow planning, to ensure the Council can meet its capital spending obligations. 1.7 The Code re-affirms the Audit and Scrutiny Panel’s role in providing effective scrutiny of the Treasury Management Strategy and policies, whilst the Finance and Resources Committee remains responsible for the development of the strategy, its implementation and monitoring. 1.8 The revised Prudential and Treasury Codes emphasises members responsibility in this area, requiring increased member awareness, to enable greater member scrutiny of treasury management activity. This also enables local authorities to demonstrate that members have the necessary skills and knowledge in this complex and technical area, to make informed decisions. The Treasury Management team provide in house awareness sessions, with members also provided with the opportunity to review the Councils Treasury Management Practices manual. A new Treasury Management Toolkit has been developed by CIPFA Scotland Treasury Management Forum and CIPFA, which provides an online training resource to elected members and financial staff, to further develop knowledge and understanding of elements of treasury management. 1.9 In accordance with the CIPFA Treasury Management Code recommendations, the Council has a Treasury Management advisory contract in place. The current providers are Arlingclose Ltd, who provide specific advice on investment, debt and capital finance issues. 1.10 Per the CIPFA Treasury Management Code, the Council adopts a high-level approach to setting policies for borrowing and investment activity. An appropriate scheme of delegation is in place to ensure all staff employed in treasury management have the suitable skills and resources, to carry out delegated treasury management activities effectively, efficiently and achieving value Page 68 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 for money. 1.11 The treasury management staff regularly attend training courses, seminars and workshops provided by the Council’s advisors, the CIPFA Scotland Treasury Management Forum and other ad hoc providers, including brokers and financial institutions. Staff also receive regular treasury related updates, information and newsletters on a daily/weekly basis via email from banks and other financial institutions. Staff also have access to treasury related websites to maintain awareness of treasury management issues. 1.12 The requirements of the Code have been incorporated within the 2023/2024 Treasury Management Strategy and in the preparation of the Treasury Management Indicators & Prudential Indicators for 2023/2024 to 2025/2026. 1.13 The Code of Practice requires the Council to produce reports on its Tre 7asury Management policies, practices, and activities on a regular and ongoing basis. This encompasses the preparation and approval of an Annual Strategic Plan, which defines the arrangements for managing the Treasury Management function in the incoming year. This report details the proposed Strategy for 2023/2024. 1.14 This Strategy covers: ♦ The debt and investment projections ♦ Outlook in interest rates ♦ The borrowing and investment strategies ♦ Treasury Management performance indicators ♦ Specific limits on treasury management activities 1.15 The requirements of the Local Government Investments (Scotland) Regulations 2010 have been incorporated within the 2023/2024 Strategy, including the preparation of an investment strategy which must be approved by the full Council. 1.16 As outlined previously, the Scottish Government introduced fiscal flexibilities for Local Government to help manage the cost of COVID, subject to statutory guidance. Further detail is provided within Section 10. Discussions have taken place between the CIPFA Directors of Finance, Scottish Government and COSLA, to determine the application and impact of these with statutory guidance circulars issued for implementation. As a result, these flexibilities options have been reviewed and considered and Council seeks approval to use specific fiscal flexibilities in 2022/2023 and 2023/2024, with the implementation of the fiscal flexibilities managed in line with the principles detailed within the Treasury Management Strategy 2023/2024. 1.17 Members should note that the forecasts contained within this report are indicative, assuming the outcome of the consideration of approval around the fiscal flexibilities, and already incorporate the 5-year Capital Programme 2021/2022 to 2025/2026. Material changes to the estimates/forecasts provided within this TM strategy and Prudential indicators will be reported during the quarterly Treasury Management Monitoring Process. 2. Annual Borrowing Requirement 2023/2024 2.1 At the beginning of 2023/2024, it is anticipated that the Council’s total debt outstanding including long term liabilities will amount to £982.6m. The Capital Programme for the period 2022/2023 to 2025/2026 was approved by the Policy and Strategy Committee on 17 March 2022 and is reviewed on a continual basis by the Strategic Capital Delivery Group (SCDG) including re- profiling adjustments within the programme. It should be noted therefore that the estimates presented within this report are based on the current forecasts of the progression of the programme and projected resources available. On this basis, it is currently anticipated that during 2023/2024 there will be a total capital investment of £298.4m which comprises the General Fund Community Investment programme (£167.4m) and the Housing Revenue Account programme (£131.0m). 2.2 The forecast capital expenditure will be resourced by capital grants, external contributions and capital funded from current revenue (CFCR), with the balance of £196.5m representing capital investment funded by borrowing. This represents an in year borrowing need, which will contribute towards the net increase in the Capital Financing Requirement (CFR). Table 7 within Section 8 below sets out the forecast Capital Expenditure plans for the period 2023/2024 to Page 69 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 2025/2026. 2.3 During 2022/2023 the Council has primarily used internal cash balances, short term borrowing, plus credits due to the scheduled principal repayments to the loans fund from service departments (annuity based), to meet its borrowing requirement. This strategy is adopted in light of interest rate expectations, management of carrying costs, and the availability of short-term borrowing up to 364 days at attractive rates. A similar borrowing strategy is anticipated during 2023/2024 with the current sources adopted in lieu of future long-term borrowing in line with the borrowing strategy outlined below. However, this will be kept under review. 2.4 To meet the capital programme financing requirement, the replacement of maturing long-term debt and the maintenance of cash balances necessary to meet on going daily liquidity requirements, it is estimated that the Council will source long-term borrowing of £172.6m in 2023/2024, £205.0m in 2024/2025 and £135.0m in 2025/2026. 2.5 These borrowing projections exclude temporary borrowing undertaken, with average levels held expected to be approximately £242.0m over the three-year period. This level of short-term borrowing proves attractive to the Council, due to the lower rates currently available, however it is currently anticipated that these rates may rise in the short term as a result of recently announced increases in the Bank of England Base Rate, due to economic and inflationary pressures, but are anticipated to stabilise over time. 2.6 The Council’s borrowing requirement is set firmly within the framework of wider Council activity and will be driven by ‘the Plan’ for North Lanarkshire, the Capital Strategy and the Medium Term Financial Plan. 3. Interest Rates Outlook and Other Economic Updates 3.1 The ongoing impact on the UK from the war in Ukraine, higher inflation, higher interest rates, uncertain government policy, and a deteriorating economic outlook, are some of the issues that will present major challenges for the Council’s Treasury Management Strategy for 2023/24. 3.2 The Bank of England (BoE) base Bank Rate was increased by 0.50% to 3.50% in December 2022, with an additional rise of 0.5% to 4.0% announced in February 2022. These increases followed a 0.75% rise in November 2022, which was the largest single rate rise since 1989, and the ninth successive rise since December 2021. 3.3 The Bank of England forecasts a prolonged but shallow recession in the UK, with CPI inflation at 10.5% in December, which is forecast to remain elevated at around 8%, in the coming year. While the projected peak of inflation is lower than previous forecasts, due in part to the government’s support package for household energy costs, inflation is expected to remain higher for longer over the forecast horizon and the economic outlook remains weak, with unemployment projected to start rising. 3.4 Wholesale gas prices have recently fallen, and global supply chain disruption appears to have subsided as global demand has slowed. Domestic inflationary pressures in the United Kingdom have become firmer than expected. Both regular pay growth in the private sector and CPI inflation in the services sector have been significantly higher than forecast by the BoE in November. Given the lags in monetary policy transmission, Bank Rate increases since December 2021 are expected to have a greater impact on the economy in the coming quarters. 3.5 The Council’s treasury management advisors Arlingclose, forecast that the Bank Rate will continue to rise in 2023 as the Bank of England attempts to subdue inflation, which is significantly above its 2% target. Arlingclose expects the Bank Rate to rise to 4.25% by June 2023 with forecast rate cuts during 2024, with the risks in the near and medium-term should inflation not evolve as the Bank forecasts and remains persistently higher. 3.6 Gilt yields are expected to remain broadly at current levels over the medium-term, with 5, 10 and 20-year gilt yields expected to average around 3.5%, 3.5%, and 3.85% respectively over the period to December 2025. The risks for short, medium and longer-term yields are judged to be broadly balanced over the forecast horizon. As ever, there will undoubtedly be short-term volatility due to economic and political uncertainty and events. 3.7 Movements in supply and demand for UK gilts heavily influence the gilt prices and yields, with Page 70 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 corresponding movements up or down in the PWLB interest rates reflecting the perception of improved stability or increased uncertainty in both the UK and other non UK financial markets respectively. 3.8 Annex D provides details of the forecast official Bank rate, 3-month money market rate and PWLB rates over the next three years which are underpinned by the economic risks and uncertainties outlined in the preceding paragraphs above. 3.9 The Council’s main source of borrowing is the Public Works Loan Board (PWLB), with PWLB lending generally available at 100bps (1.00%) above UK gilt prices with any forecast movements in PWLB interest rates closely correlated to gilt movements. 3.10 Table 1 below includes forecast average PWLB rates anticipated for a range of maturity periods over the next 3 years based on the forecast per Annex D. The interest rates shown take account of the 0.20% reduction in the standard rates which will apply if the Council, as expected, meets the qualifying criteria for the certainty rate in 2023/2024. Annual Average Bank Rate 3 months Money Market Rate PWLB Rates 5 year 10 year 20 year 50 year 2023 4.19% 4.39% 4.55% 4.30% 4.65% 4.40% 2024 3.88% 4.08% 4.35% 4.30% 4.65% 4.40% 2025 3.25% 3.43% 4.10% 4.30% 4.65% 4.40% Table 1 – Medium Term Interest Rate Estimates (averages) 3.11 These projections underpin the borrowing and investment strategies outlined in the following paragraphs. 4.0 Annual Borrowing Strategy 2023/2024 4.1 The Council uses a combination of internally accumulated cash funds i.e. its revenue reserves/balances plus working capital, temporary borrowing (up to 364 days) and external borrowing from both the markets and PWLB, to fund its capital financing requirement (CFR). This minimises the amount of investment balances held, managing credit and counterparty risk and the impact of low investment returns, resulting in the Council currently being in an under borrowed position, which is in line with the strategic approach adopted. 4.2 The borrowing strategy to meet the current year (2022/2023) capital programme financing requirement of £148.1m (excluding credit arrangements), has been to use a combination of internal cash balances, and short-term borrowing where available at attractive rates, in lieu of future long-term borrowing plus credits due to the scheduled principal repayments. This strategy is supported by efficient cashflow management, interest rate outlook, forecast balance sheet analysis of reserves and provisions, and effective treasury risk management. It is proposed that a similar borrowing strategy be adopted where possible to meet the financing requirement of £196.5m in 2023/2024. 4.3 The successor to IAS17 Leases, IFRS16 Accounting for Leases is applicable for Local Authorities from 1 April 2022. An optional two-year delay has been announced and each authority has the choice of when to implement this new standard by no later than 1st April 2024. Implementation will, dependent upon the nature of the financing and business model, require costs previously presented as revenue costs, restated and shown as capital expenditure under a credit arrangement. This will primarily impact upon the current treatment for vehicles and plant and equipment, acquired under operating lease arrangements when implemented, with a forecast increase in the Council’s 2024/2025 Capital Financing Requirement of approximately £3.5m. This is reflected in Table 7 within Section 8.0 below. 4.4 For 2023/2024, it is anticipated that the Capital Financing Requirement will increase by £220.9m, which comprises the capital investment funded by borrowing and movement in balances held under credit arrangements due to implementation of a change in accounting for existing service concession agreements following the publication of new statutory guidance published in September 2022; Local government finance circular 10/2022 – accounting for service concession arrangements, leases and similar arrangements. Page 71 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 4.5 It is estimated that the Council will source long-term borrowing of £172.6m in 2023/2024, £205.0m in 2024/2025 and £135.0m in 2025/2026 to meet the on-going capital financing requirements, the replacement of maturing long-term debt and the maintenance of cash balances necessary to meet on going daily liquidity requirements. 4.6 These borrowing projections exclude monies borrowed and repayable over a shorter period, with average levels held expected to be approximately £242.0m over the three-year period. This level of short-term borrowing is attractive to the Council due to lower rates generally available. 4.7 The Council’s capital expenditure planning processes and investment/borrowing analysis enables it to time its borrowing to take advantage of opportunities that may arise to achieve beneficial borrowing rates, minimising interest rate risk. 4.8 The timing of new borrowing will also take into account the level of cash balances and investments held so that there may be an option of postponing borrowing and continuing to use these balances in the short term. 4.9 The Councils borrowing strategy will be underpinned not only by the absolute borrowing rates but also the relationship between short and long-term interest rates. This difference creating a ‘cost of carry’ for any new longer term borrowing where the proceeds of borrowing are temporarily held as investments because of the difference between what is paid on the borrowing and what is earned on the investment. The cost of carry is likely to be an issue for the foreseeable future. 4.10 The Council will closely monitor movements in long and short-term interest rates to manage its interest rate risk. 4.11 The repayment terms of new borrowing will take account of the debt maturity profile to ensure that an acceptable amount matures in any one year, managing the refinancing risk, whilst being undertaken at the most advantageous rate. 4.12 The forecast debt maturity profile at the 31 March 2023 per the graph below highlights that there are a number of points in the maturity spectrum at which the Council has little or no debt due for repayment. In general, the current maturity profile provides the Council with flexibility in determining the maturity period for new borrowing, whilst ensuring the strategy adopted minimizes the debt interest costs. 4.13 It should be noted that the debt maturity profile per the graph is based on the maturity date of LOBO (Lender’s Option Borrower’s Option) loans, whilst noting the Code requires the Council to classify LOBO type loans as having a potential maturity in the year where options or calls exist. A LOBO option is called, when the lender exercises its right to amend the interest rate, at which point the Council can accept the revised terms or reject them and repay the loan. 5 10 15 20 25 30 MILLIONS FINANCIAL YEAR Forecast Long Term Debt Maturity Profile 31 March 2023 PWLB Page 72 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 4.14 The Council currently has a £3.0m exposure to LOBO loans which can be called within 2023/2024, which represents less than 0.67% of the projected long-term debt held at the 31 March 2023 of £447.211m. The interest rates on the LOBO loans held range from 10.625% to 10.937%, averaging 10.781%. 4.15 A comparison of the LOBO loan option 2023/2024 call dates to the maturity date is provided within Table 2 below: Loan Value 2021/2022 Call Dates Year of Maturity Current Interest Rate £2,000,000 1 June & 1 December 2025/2026 10.625% £1,000,000 3 April & 3 October 2026/2027 10.937% Table 2 –Lobo Loans Summary 4.16 Based on the current and the forecast interest rates, the likelihood of these loans being called has been assessed as minimal. In the event that the call option is exercised, the default position will be the repayment of the LOBO without penalty, with the associated treasury management risks (refinancing/interest rate/liquidity) managed in line with the borrowing strategy for other maturing debt. 4.17 The Council’s Treasury Management advisors provide forecasts of interest rates for different maturity dates in future years. Using these forecasts, it is projected over the years 2023/2024, 2024/2025 and 2026/2026 respectively, the PWLB borrowing rates may average between 4.10% and 4.55% (up to 5 years) and between 4.36% and 4.48% (up to 50 years). 4.18 Uncertainty over future interest rate movements increases the risks associated with treasury management borrowing activity, therefore it should be noted, that the period over which any new borrowing is taken will be guided by movements and fluctuations in the interest rate yield curve and capital financing requirement. 4.19 No more than 25% of the total debt outstanding shall be taken from any one lender at any one time, except for borrowing from Public Works Loan Board (or its successor body), unless expressly approved by the Chief Officer for Finance in line with current policy. 4.20 The Council must apply annually to be eligible for a certainty rate discount. The Council was successful in its application to the PWLB in October 2022, meeting the criteria and obtaining eligibility for the certainty rate discount on PWLB loans, accessible from 1 November 2022. Note within Table 1 above the medium-term interest rate average forecasts for the PWLB interest rates include the 20 basis point (bps) discount. 4.21 The Council, also made a successful application in 2019/2020 to the PWLB to access the infrastructure rate and will receive a further discount of 0.20% on future borrowing of up to £8.3m, this reduced rate continues to be available for financial year 2023/2024 of £1.3m. 4.22 The Council will consider a number of borrowing structures in 2023/2024 which will include; • Internally accumulated cash funds. The Council may temporarily use its cash backed revenue reserves/balances plus working capital to support its capital programme generally known as internal borrowing, in lieu of future short and long-term borrowing. This approach may be adopted to manage the level of investment balances held, managing credit and counterparty risk and the impact of low investment returns and cost of carry. • Short-term Borrowing The Council may borrow on a temporary basis (up to 364 days) which would significantly reduce the carrying costs whilst managing the refinancing and interest rate risk. For example for loans up to 364 days, other local authorities are currently offering better terms than those of the PWLB for a 1 year loan, with this option therefore being more attractive. This may also be used to meet cashflow demands to cater for temporary fluctuations in cash balances held on a daily basis. • PWLB Variable Rate Loans These loans are available for periods of up to 10 years with the interest payable generally Page 73 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 linked to movements in short term rates, with increases in interest rates expected to be limited over the next three years and costs expected to remain cheaper than long term rates. Liquidity within the short-term borrowing market may supercede the potential benefits of this type of borrowing. • PWLB Fixed Rate Maturity Loans (< 20 years) New loans for periods up to 20 years, which fit in with the existing debt maturity profile, are attractive, providing relatively low refinancing risk as short-term rates are expected to remain lower than their longer dated counterparts in the foreseeable future. These could offer greater flexibility to repay/reschedule on beneficial terms in the future, depending on the volatility of interest rates. • PWLB Equal Instalment Payment and Annuity Loans (< 30years) These loans are different from fixed rate maturity loans as the repayments are made up of both interest and principal with the principal outstanding reducing at 6 monthly intervals throughout the life of the loan, with corresponding reduction in interest payments on the balance outstanding. The interest rates payable are lower than the fixed rate maturity loans for short and medium dated maturities with an additional benefit being a smoother debt maturity profile on the debt e.g. £2.5m every year for 10 years as opposed to £25m payable in 10 years. This also spreads the refinancing risk and may also present beneficial opportunities dependent upon the interest yield curve at the time repayments are due. • Medium/Long Term Fixed PWLB Loans (> 20 years) These loans will be considered in conjunction with managing the current debt maturity profile, the higher interest rate profile and the additional cost of carry. These loans currently offer less flexibility in terms of debt restructuring as a result of PWLB Circular 147, which left the premature repayment rates unaltered. As a result, these are the least attractive option at present but circumstances will be monitored to identify beneficial opportunities to source PWLB loans within this maturity spectrum. • Market Loans At present availability is limited, but in the future these loans may become more attractive given the 0.80% margin on PWLB loan rates, as these loans could be cheaper than similar long term PWLB loans despite this being partially offset by the certainty rate. In addition to the possibility of advantageous interest rates, there is also the ability to fix the rate for receipt at a date in the future, avoiding the cost of carry for example to cover future maturities in 2024/2025 and 2025/2026. • Local Authority Bonds Local authority bonds can be issued by a public stock exchange listing, a private placement or a retail bond but would only become a viable option if the size of funds to be borrowed reached a minimum of £150m. Prior to undertaking a bond issuance, the Council would carry out a due financial diligence process. Factors to be considered would be the type of bond issue e.g. index linked, the set-up costs, the timing of the issue, the potential cost of carry, the credit rating process, the projected long term capital financing requirement position and the nature of the projects being funded e.g. income streams index linked. • Leasing On occasions, leasing will be used if an option appraisal review identifies this as being advantageous to the Council. 4.23 As part of its borrowing strategy, the Council will seek to identify and evaluate opportunities for debt rescheduling to accrue potential benefits including: • achievement of cash interest savings, without exposing the Council to additional risk; • ensuring a better balanced maturity profile and volatility ratio; and • achieving the desired borrowing strategy. 4.24 The Council will continue to monitor its debt portfolio and movements in interest rates across PWLB interest rate structures, to identify opportunities to generate interest savings, whilst strategically managing any premiums or discounts incurred as a result of the rescheduling/ restructuring. Page 74 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 4.25 The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 legislation enacted on 1 April 2016 and associated Local Government Circular 7/16 Statutory Guidance on Loans Fund Accounting provide the legislative background governing the Council's borrowing activity. 5.0 Annual Investment Strategy 2023/2024 5.1 Investment Regulations 5.1.1 The Investment Regulations became statutory instruments by force of the Scottish Parliament on the 1 April 2010 in conjunction with the associated Code on the Investment of Money by Local Authorities. This requires the Council to approve all the types of investments to be used and set appropriate time and money limits for the amount that can be held in each investment type. These types of investments are termed permitted investments and any investments used which have not been approved as a permitted investment will be considered as ultra vires. 5.1.2 Following a Markets in Financial Instruments (MiFID III) directive, from the 3 January 2018, local authorities were to be treated as retail clients, with the option to opt up to professional status provided certain criteria was met. The Council continues to meet the conditions to opt up to professional status and therefore continues to have access to products including money market funds, pooled funds, treasury bills, bonds shares and to financial advice. 5.2 Risk Management 5.2.1 In accordance with the revised code, the Council recognises the importance of risk management and the effective management of all the associated treasury management risks encountered in working with the approved permitted list of investments. The treasury management risks and tools put in place to manage these risks include: • Credit and counterparty risk: this is the risk of failure by a counterparty to meet its contractual obligations to the Council, particularly as a result of the counterparty’s diminished creditworthiness and the resulting detrimental effect on the Council’s capital or revenue resources. There are no counterparties where the risk is zero although AAA rated organisations have a very high level of creditworthiness. The Council has in place minimum credit criteria to determine which counterparties and countries are of high creditworthiness to enable investments to be made safely. • Liquidity risk: this is the risk that cash will not be available when it is needed. While it could be said that all counterparties are subject to at least a very small level of liquidity risk, the Council measures this risk on the basis as to whether or not instant access to cash can be obtained from each form of investment. The Council has developed a detailed cashflow model to record known and forecast income and payment events arising in the short, medium to long term. • Interest Rate Risk: This is the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the Council’s finances against which the Council has failed to protect itself adequately. To manage this risk, the Council takes a view of the future course of interest rates and formulates a Treasury Management Strategy accordingly, aiming to maximise investment earnings and minimise borrowing costs, whilst giving full regard to other treasury management risk factors including security and liquidity. • Price Risk Management: This risk primarily relates to financial instruments that are regularly traded in the various financial market exchanges. This is the risk that the Council is required to redeem this type of investment prematurely at prices above and below the price on which the financial instrument was originally purchased (par value) and thus be subjected to the market conditions prevailing at that time. If the investment is held to maturity the principal sum is guaranteed with it being redeemed at par value. The Council will only use those which appear on its permitted investment list, if their redemption price is not expected to vary much during its short life or for example in the case of treasury bills they offer a higher rate of return than depositing in the Debt Management Account Deposit Facility for a similar level of security. • Legal and Regulatory Risk: This is the risk that the Council itself or an organisation with which it is dealing in its treasury management activities fails to act in accordance with its legal powers or regulatory requirements and the Council suffers losses accordingly. In the event of Page 75 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 any doubt as to the legal and regulatory issues the Council has recourse to its own in-house legal services team and also the Council’s appointed treasury advisors Arlingclose Ltd. The Council also currently has in place a highly experienced and qualified Treasury Management team. 5.3 Permitted Investments 5.3.1 The permitted investments which may be used in the forthcoming year are: a. Deposits with the Debt Management Account Facility (UK Government); b. Deposits with other local authorities or public bodies; c. Instant Access Accounts; d. Call Accounts; e. Term Deposits; f. Money Market Funds; g Instant Access Funds held with Council’s own bankers; h. UK Government Gilts and Treasury Bills; i. Supranational Bonds (e.g. World Bank); j. Certificates of deposits with financial institutions (banks and building societies); k. Covered Bonds; l. Reverse repurchase agreements and other collateralised arrangements; m. Investment properties; n. Loans to third parties, including soft loans; o. Loans to a local authority company; p. Shareholdings in a local authority company; q. Non-local authority shareholdings; r. Subordinated debt in projects delivered via ‘Hubco / DBFM’ model 5.3.2 In respect of Money Market funds (MMF) listed per f) above, these funds invest in high-quality short-term fixed income instruments and adhere to very strict credit quality, diversification and maturity guidelines with preservation of capital constituting the primary objective. Prior to January 2019, the Council used Constant Net Asset Value (CNAV) Funds meaning for every £1 of principal invested the fund will return £1 of principal on withdrawal by the investor, plus interest with preservation of capital the prime objective. 5.3.3 However on the 21 January 2019, as a result of MMF Industry reform, the CNAV funds are no longer available and on this date two types of funds became available to the Council: • a Public Debt CNAV (assets invested in government debt); and • a ‘Low Volatility NAV’ (LVNAV) that is a hybrid between CNAV and VNAV 5.3.4 After scrutiny of the new products available, the Council continues to use money market funds, primarily using the LVNAV type as an investment instrument. It is worth noting that one of the main differences between the LVNAV and CNAV fund is the Council is no longer guaranteed preservation of capital i.e. for every £1 of principal invested the fund will no longer guarantee a return £1 of principal on withdrawal. 5.3.5 However the day to day operation of LVNAV funds is very similar and has many of the attractive features of the CNAV fund and the probability of the price changing and loss of capital, within the boundaries set for price changes i.e. “the collar”, is widely regarded as de minimis. Therefore the use of these investments continue to remain within the risk appetite adopted by the Council per its investment approach. 5.3.6 Bail-in legislation which ensures that large investors including local authorities will rescue failing banks instead of taxpayers in the future, is now fully implemented in the UK. Under the UK Financial Services Compensation Scheme and similar European Schemes most private sector investors are now partially or fully exempt from contributing to a bail-in. The credit risk associated with making unsecured bank deposits has therefore increased relative to the risk of other investment options. 5.3.7 To manage the bail-in risk, covered bonds, reverse repurchase arrangements and other collateral arrangements with financial institutions are included within the permitted investment list. These investments are secured on the assets of the borrower, which limits the potential Page 76 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 losses in the unlikely event of insolvency and would be exempt from bail-in. 5.3.8 Whilst there is no investment specific credit rating for these types of arrangements, the collateral upon which the investment is secured has a credit rating, with the highest of the collateral credit rating and the counterparty credit rating being used to determine cash and time limits. Note the combined secure and unsecured investments in any one bank should not exceed the cash limit for that counterparty. 5.3.9 Investments in subordinated debt in projects delivered via the ‘Hubco/DBFM’ model included within the permitted investments list will only be undertaken, following a full risk/benefit analysis, subject to a maximum investment amount of £1.5m per project and for a maximum term of 30 years. 5.3.10 For cash investments, there is a risk of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates and for term deposits and loans if they are redeemed early. Therefore, the Council will undertake these investments in conjunction with its cashflow/liquidity projections and medium-term financial plans to manage this risk. 5.3.11 Within the Treasury Management code, it suggests the use of financial derivatives but given that the legal power to use derivative instruments remains unclear, the Council does not intend to use derivatives. Should the legal position change, the Council may seek to develop a detailed and robust risk management framework, governing the use of derivatives, but prior to adoption, full Council approval will be sought. 5.4 Investment Security 5.4.1 Although the yield on investment is a key consideration, the primary principle governing the Council’s investment criteria is the security of its investments. 5.4.2 After this main principle the Council will ensure: • It has sufficient liquidity in its investments, carefully selecting the maximum periods for which funds may prudently be committed also applying the Council’s prudential and treasury management indicators covering the maximum principal sums invested. • It maintains a policy covering the categories of investment types it will invest in, the criteria for choosing investment counterparties with adequate security, and to continually monitor security. 5.4.3 The Council minimises risk by identifying those financial institutions that it may invest in to maximise security and liquidity of investment including the specification of maximum time and money limits for each type of permitted investment offered by financial institutions. The counterparty must meet the relevant credit rating requirement with the focus being on the minimum acceptable quality adding a further security overlay to the investment activity of the Council. 5.4.4 The Council utilises the research of the world’s foremost providers of independent credit ratings. The ratings defining the likelihood of an investor such as the Council receiving their money back on the terms in which it was invested. (Long term Rating types and definitions are shown in Annex B). 5.4.5 The Council defines ‘high credit quality’ organisations and securities as those having a credit rating of A- or higher that are domiciled in the UK or a foreign country with a sovereign rating of AA+ or higher. For money market funds and other pooled funds the Council defines a high credit rating as those having a credit of A- or higher. Investments with organisations with long term ratings in the BBB long term category will therefore be restricted by cash and maturity limits. 5.4.6 The Council also supplements its credit rating information by accessing and applying additional operational market information before making any specific investment decision from the agreed pool of counterparties. 5.4.7 This additional market information will be applied to compare the relative security of differing investment counterparties and will include: • Credit Default swap prices; • Quality financial press; Page 77 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 • Share prices; • Government support status / Bank Resolution and Recovery Directive; • Annual Reports; • Statements to the market; and • Financial Regulations; 5.4.8 Should this additional market information raise concerns regarding the security of a financial institution, then subject to further investigation this may also result in removal from the list. 5.4.9 The creditworthiness of counterparties will be monitored regularly. The Council receives credit rating information from Arlingclose Ltd (the Council’s advisors) as and when ratings change and counterparties are checked promptly. If a ratings change results in the counterparty failing to meet the Council’s strict criteria, they are removed immediately from the list. Similarly, if a counterparty rating is updated and they meet the Council’s strict criteria, they will be added to the list. 5.4.10 Full details of the Council’s investment approach including the type of investments, treasury management risks, associated controls, credit rating, money and time limits are shown in Annex C. The credit rating criteria indicated within the Annex stipulates a long-term rating requirement as this is considered the ultimate driver of credit worthiness of financial institutions. This represents a rating agency view of an institutions capacity to honour its financial obligations and its vulnerability to foreseeable events. The Council in conjunction with its advisors will continue to monitor other information provided from credit rating agencies in terms of short term, individual rating, support rating and outlook. 5.4.11 The Council will give due care when considering the country, group and sector exposure of the Council’s investments and will endeavour to have no more than 25% placed with any non-UK country at any time. A group of banks under the same ownership will be treated as a single organisation for limit purposes with industry /sector activity monitored regularly for appropriateness. 5.4.12 Environmental, social and governance (ESG) considerations are increasingly a factor in global investors’ decision making. Therefore, the Council requires to develop a formal ESG Policy, which may include ESG scoring or other real-time ESG criteria at an individual investment level. However, the framework for evaluating investment opportunities is still developing. In the meantime, when investing in banks and funds, the Council will prioritise banks that are signatories to the UN Principles for Responsible Banking and funds operated by managers that are signatories to the UN Principles for Responsible Investment, the Net Zero Asset Managers Alliance and/or the UK Stewardship Code. 5.5 Investment Strategy 5.5.1 The Council, by efficient cashflow management and balance sheet analysis, will identify its liquidity requirements and the core funds within its cash balances that could be locked in over a longer period up to the maximum limits as defined within Annex C. This will achieve the optimum performance, spreading investment periods and security of return, subject to over-riding credit counterparty security. 5.5.2 The 2023/2024 Treasury Management Strategy has been developed assuming that the annual borrowing requirement and debt repayments, net of credits due to the scheduled principal repayments to the loans fund, will be fully funded by undertaking external borrowing. Therefore, it is anticipated that the Council cash balances available for short term investment will average approximately £30.0m throughout the period 2023/2024 to 2025/2026. 5.5.3 This projected balance being subject to variation dependent upon actual level and timing of external borrowing undertaken, which will reflect positive and negative movements in working capital and level of revenue reserves/balances held during the 3 year period. 5.5.4 All investment activity will be governed by the principles laid out within sections 5.1 to 5.5 above and 5.7 below. 5.6 Borrowing and the Investment of Money 5.6.1 The Council will not borrow more than or earlier than required with the prime intention to profit from the investment return of the extra sums borrowed. Page 78 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 5.6.2 Borrowing in advance will only be taken for risk management reasons subject to sound justification. When considering borrowing in advance the Council will balance investment risks, such as the credit and interest risks resulting from the temporary investment of the proceeds of borrowing, against the risk of adverse interest rate movements if borrowing is deferred. Consideration will also be given to the existing debt maturity profile over the medium term. 5.6.3 The Council will appraise all risk associated with advance borrowing activity with subsequent reporting either within the mid-year or annual reporting mechanism. This report will comply with the minimum data and analytical requirements outlined within The Local Government Investments (Scotland) Regulations 2010. 5.7 Non Treasury Management Investment Activity 5.7.1 The CIPFA Treasury Management Code includes a section on Non Treasury Management investment activity, which would normally be for those investments made for policy reasons outside of normal Treasury Management Activity, and may include: • service investments held clearly and explicitly in the course of the provision and for purposes of operational services • commercial investments which are taken mainly for financial reasons and to achieve a financial return 5.7.2 Normal treasury management activity would cover those investments which arise from the organisation's cashflows and debt management activity and ultimately represent balances which need to be invested until cash is required for use in the course of the Council's normal business. 5.7.3 For investments that fall outwith normal treasury management activity the Council will ensure that proper due diligence is carried out to ensure that there is a proper understanding as to: • the powers under which the investment is made to ensure the activity is legal • the service rationale behind the decision to undertake this type of investment • the extent to which capital invested is placed at risk • impact of any potential losses on the financial sustainability of the Council • the specialist professional advice required to assist in the decision making process 5.7.4 The Council will carry out more careful risk assessment, as it recognises there may be instances where such investments do not give priority for security and liquidity over yield whether due the nature of the transaction itself e.g. commercial investments or for valid service reasons 5.7.5 Effective scrutiny will be carried out and the justification behind the decision should be explicit, clearly outlining that it is within the Councils legal powers, the level of risk to both capital and returns, the requirement to seek specialist advice if sought and the potential impact on future sustainability if risks come to pass. 5.7.6 This would also include any external underwriting of those risks e.g. guarantees. Given the increase in Councils creating ALEO’s and increasing partnership working, the Council may be asked to provide a financial guarantee to enable other parties to access funds which may not otherwise be available due to their size/ lack of credit history. This may also result in external funds being accessed at more favourable terms than they are likely to receive, which will accrue both an operational and financial benefit to the Council. 5.7.7 In general, a financial guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. Prior to agreeing to the provision of a financial guarantee, due financial diligence of the terms of the financial guarantee must be carried out, including an assessment as to the likelihood of the guarantee being called and potential financial liability to the Council. 5.7.8 The responsibility for proper scrutiny and final approval is the Council’s Chief Officer of Finance. Information in respect of non-Treasury Management investments must be clearly laid out and available within the Council’s statutory accounts. 5.7.9 Following the PWLB consultation in the first half of 2020, the PWLB announced revised terms of engagement for borrowing in particular around non Treasury Management activity. Of greater relevance in England and Wales, given recent activity, Councils are required to confirm there is Page 79 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 no intention to borrow for the purposes of acquiring investment assets primarily for yield e.g. retail outlets, hotels in the current or next two financial years otherwise the facility may be suspended or withdrawn fully. The revised Prudential Code also makes it a requirement that local authorities must not borrow to invest primarily for financial return. 6.0 Performance Measurement Indicators & Benchmarking 6.1 The Code of Practice on Treasury Management requires the Council to use performance indicators to assess the adequacy of the treasury management function over the year and incorporate benchmarking to assess performance which is reported within the Annual Treasury Management Activity report. These are distinct historic indicators, which are additional to the predominantly forward-looking prudential indicators outlined in later sections of this report. 6.2 In respect of liquidity which is defined as the Council “having adequate, though not excessive cash resources, borrowing arrangements, overdrafts or standby facilities to enable it at all times to have the level of funds available to it which are necessary for the achievement of its business/service objectives” (CIPFA Treasury Management Code of Practice) the Council will seek to maintain: Liquid short term deposits of at least £3m available on an overnight basis. 6.3 This Council generally uses the following historic indicators to monitor its loan portfolio performance and benchmarking: Borrowing: Average rate of borrowing for the year compared to average in previous year. Investments: Local measures of yield benchmarks are the Council’s average return on short term investment activity in comparison to: - 3 month money market rate - Council’s own bank: Instant Access Account; - Council’s Advisors benchmarking club 6.4 In the context of benchmarking security, this is a much more subjective area to assess. The Council currently evidences this by the application of minimum quality criteria to investment counterparties, through the use of credit ratings, supplied by the three main credit rating agencies, together with additional market information available as described earlier within this report and outlined within Annex C. 7.0 Treasury Management Local and Mandatory Indicators 2023/2024 to 2025/2026 7.1 Treasury Management Local Indicator: Interest Rate Exposure 7.1.1 Per the revised CIPFA TM code, the Council is no longer required to set a mandatory indicator for limits with regard to fixed and variable interest rate exposure. The Council will monitor its interest rate exposure by the local indicator shown in Table 3 below. The proportion of fixed interest rate costs to variable interest costs will be monitored on a quarterly basis to identify if there are any potential risks if interest rates were to move significantly upwards. The Council will also monitor debt maturity profile, the spend profile of the capital programme and also continue to adopt a prudent approach to use of internal balances in lieu of future long-term borrowing i.e. monitor under borrowing position. The economic outlook and interest rate forecast will supplement this on-going review of interest rate exposure. Content of loan portfolio 2023/24 2024/25 2025/26 £m % £m % £m % External Interest Council is due to pay: Fixed rate loan debt 37.8 99.2% 45.1 99.3% 52.9 99.5% Variable rate loan debt 0.3 0.8% 0.3 0.7% 0.3 0.5% 38.1 100.0% 45.4 100.0% 53.1 100.0% External Interest Council is due to receive: Investments – variable terms 1.3 100.0% 1.1 100.0% 1.1 100.0% Net Loan Interest Payments 36.8 44.3 52.0 Table 3 – Local Indicators Interest Rate Exposures 2023/24 to 2025/26 Page 80 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 7.1.2 Table 3 above relates only to external interest payments, excluding interest on revenue balances, and includes a number of assumptions regarding the timing and nature of the new borrowing anticipated. As mentioned previously the capital planning process and investment/borrowing analysis enables the Council to take advantage of opportunities that may arise, to achieve beneficial borrowing rates over the same period. 7.1.3 Table 3 highlights that the Council anticipates net loan external interest payments of approximately £36.8 million for 2023/2024. Of this total, £37.8million relates to interest payable on fixed rate debt, for which interest payments are guaranteed until the loans mature, £0.3million for interest payable on variable rate debt, and (£1.3) million relates to interest receivable on funds invested. Variable rate loans and funds deposited are subject to changes in interest rates and will be monitored as part of the Council’s Treasury Management Strategy on an ongoing basis. 7.1.4 The table below highlights the estimated impact of a one basis point increase or decrease (e.g. 4.0% variable rate rising to 5.0% or falling to 3.0%) in interest rates to treasury management costs/income for next year. Fixed interest rate debt will not be affected by interest rate changes. Financial Year : 2023/24 Estimate £m +1% £m -1% £m Net impact on Council -1.0 -0.4 +0.4 Table 4 –Sensitivity to Interest Rate Movements 2023/24 7.2 Treasury Management Mandatory Indicator: Maturity Structure of Borrowing 7.2.1 The Treasury Management Code requires the Council to specify upper and lower limits regarding the maturity structure of its long-term borrowing in order to minimise the risk associated with the Council having to replace large sums of long-term debt at a time when there may be uncertainty over interest rate exposure. 7.2.2 Table 3 illustrates that the Council has high levels of fixed rate debt however the current maturity profile of this debt is unlikely to be a major risk factor for the Council. The limits of fixed and variable rate maturity are set out within Table 5 below; Table 5– Maturity Structure of Fixed Rate Borrowing 7.2.3 The upper limit for long-term rate debt, maturing in less than 12 months, is set at 15.0% to accommodate the requirement within CIPFA TM Code to recognise the possibility of the Council loans classified as LOBO type loans having their option or call exercised within the next 12 months, under the terms of the loans as described within paragraph 4.14 above. 7.3 Treasury Management Indicator: Credit Risk 7.3.1 The Council will manage its credit risk by implementing the investment strategy per Section 5 and remaining within the guidelines outlined within Annex C. 7.3.2 The Council has also adopted a voluntary measure of its exposure to credit risk by monitoring the value weighted average credit rating of its investment portfolio. This is calculated by applying a score to each investment and taking the arithmetic average weighted by the size of each investment. Target Portfolio Average Credit Rating A- Table 6 – Credit Risk Indicator 2023/24 Maturity Structure of borrowing < 12m 12m to 2yrs 2 to 5yrs 5 to 10yrs 10 to 20yrs 20 to 40yrs 40yrs+ Upper limit – long term debt 15.0% 15.0% 25.0% 30.0% 35.0% 45.0% 30.0% Lower limit – long term debt 0.0% 0.0% 5.0% 5.0% 5.0% 10.0% 10.0% Page 81 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 8.0 Prudential Indicators 2023/2024 to 2025/2026 8.1 Prudential Indicator: The Capital Expenditure Plans 8.1.1 The Prudential Code requires the Council to outline its capital expenditure plans taking into account the sources of funding available and also the cost to the council in supporting any additional borrowing burden which will require to be paid for from the Council’s own resources. The Government has power to control the level of prudential borrowing although no control has yet been implemented. Some of the estimates for other sources of funding may also be subject to change over this timescale. 8.1.2 Table 7 sets out the revised Capital Expenditure plans for 2022/2023 (Revised) and forecast for the period 2023/2024 to 2025/2026 as per the 5 year Capital Programme for the period 2021/2022 to 2025/2026 approved by the Policy and Strategy Committee on 17 March 2022, and is reviewed on a continual basis by the Strategic Capital Delivery Group (SCDG) including re-profiling adjustments within the 5 year programme. It should be noted therefore that the estimates presented within this report are based on the current forecasts of the progression of the programme and projected resources available. Capital Expenditure 2022/23 Revised £m 2023/24 Forecast £m 2024/25 Forecast £m 2025/26 Forecast £m Capital Expenditure : General Services 153.7 167.4 165.8 79.5 Capital Expenditure : HRA 106.7 131.0 146.8 153.8 Total Capital by Expenditure 260.3 298.4 312.6 233.2 Cumbernauld School/Theatre DBFM - - - - IFRS16: Vehicles & Buildings - - 3.5 - Service Concessions: PPP Schools - 49.3 9.5 9.0 Total Capital by Credit Arrangements - 49.3 13.0 9.0 Total Capital Investment 260.3 347.7 325.6 242.2 Financed by: Capital Grants 79.5 73.7 71.5 56.4 Capital from Current Revenue 31.8 27.1 27.1 27.1 Capital Receipts 1.0 1.0 1.0 1.0 CFR : Borrowing : General Services 89.6 114.6 115.9 45.1 CFR : Borrowing : HRA 58.5 81.9 97.1 103.6 Credit Arrangements - 49.3 13.0 9.0 Total Capital Funding Resources 260.3 347.7 325.6 242.2 Table 7 – Capital Expenditure Plans 2022/23 to 2025/26 8.1.3 General Services within Table 7 above encompasses the Capital Financing Requirement, reflecting the borrowing needs, for the General Fund Community Investment Programme which includes Town and Community Hubs, Schools Modernisation, Digital Infrastructure and Innovation, Children & Young People, Asset Management Plan Priorities, and the City Deal whilst HRA includes the New Build, Buy Back Scheme and the Ambition programmes. 8.1.4 For 2024/2025, an estimate of £3.5m has been included to reflect the potential implications of IFRS16 Accounting for Leases in respect of the reclassification for buildings, vehicle and plant, currently accounted for as operational leases within revenue currently managed outwith the prudential framework until changes are adopted by the Council on 1 April 2024. Page 82 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 This is a change in accounting for leases and does not represent cash expenditure. 8.1.5 For 2023/2024 to 2025/2026, estimates have been included to reflect the potential impacts due to implementation of a change in accounting for existing service concession agreements following the publication of new statutory guidance published in September 2022; Local government finance circular 10/2022 – accounting for service concession arrangements, leases and similar arrangements. It should be noted this change does not represent cash expenditure, nor does it impact the cash payments to the contractors for such arrangements. 8.2 Prudential Indicator: Capital Financing Requirement (CFR) 8.2.1 The CFR is essentially a measure of Council’s underlying borrowing need i.e. capital expenditure which is not resourced by capital grants, receipts or CFCR - and any new borrowing will increase the CFR. The CFR includes long term liabilities representing outstanding obligations under the education PPP, finance leasing arrangements and the projects in relation to Cumbernauld Academy/Theatre, the Clyde Valley Waste Facility plus IFRS16 implications from 2024/2025. 8.2.2 However the Council pays off an element of the accumulated capital spend each year through a revenue charge, comprising scheduled debt repayments from service departments (annuity based) which reduces the CFR. Committee is asked to approve the CFR projections at the 31 March for each financial year set out below. 2022/23 Revised £m 2023/24 Forecast £m 2024/26 Forecast £m 2025/26 Forecast £m Capital Financing Requirement General Services 797.7 948.5 1,060.1 1,095.4 HRA 449.5 519.5 603.1 691.2 Total CFR 1,247.1 1,468.0 1,663.2 1,786.7 Movement in CFR 141.1 220.9 195.2 123.4 Table 8 – CFR Projections 2022/23 to 2025/26 8.2.3 The year on year movement in CFR is shown in Table 9 below. 2022/23 Revised £m 2023/24 Forecast £m 2024/25 Forecast £m 2025/26 Forecast £m CFR : Borrowing : General Services 89.6 114.6 115.9 45.1 CFR : Borrowing : HRA 58.5 81.9 97.1 103.6 Credit Arrangements - 49.3 13.0 9.0 Scheduled Loan Debt Amortisation - -22.2 -25.6 -29.4 Leasing Amortisation -0.5 -0.5 -1.4 -1.0 Education PPP Amortisation -6.5 -2.3 -3.7 -3.9 Movement in CFR 141.1 220.9 195.2 123.4 Table 9 – Movements in CFR 2022/23 to 2025/26 8.2.4 The scheduled loan debt and education PPP amortisation figures presented within Table 9 above are based on the current profile of the 5 year Capital Programme 2020/2021 to 2025/2026, and assume implementation of the changes to accounting for service concessions as a result of Scottish Government fiscal flexibilities options. 8.3 Prudential Indicator: Gross Debt and the Capital Financing Requirement: 8.3.1 Within the prudential indicators there are a number of key indicators to ensure the Council operates its activities within well-defined limits. For the first of these the Council needs to ensure that its total borrowing, does not, except in the short-term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2023/2024 and the Page 83 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 next two financial years. 2022/23 Revised £m 2023/24 Forecast £m 2024/25 Forecast £m 2025/26 Forecast £m Gross Borrowing : Loan Debt 815.7 961.5 1,149.8 1,266.8 Long term Liabilities 166.9 213.5 221.3 225.4 Gross Debt 982.6 1,175.0 1,371.1 1,492.2 Capital Financing Requirement 1,247.1 1,468.0 1,663.2 1,786.7 Prudential Margin 264.5 293.0 292.1 294.5 Gross Debt =< year 3 CFR Yes Yes Yes Yes Table 10 – Prudential Margins 2022/23 to 2025/26 8.3.2 The above table demonstrates that healthy prudential margins will continue to exist from 2023/2024 onwards and that the Council complies with this prudential indicator in the current year and does not envisage difficulties in the future. This view takes into account current commitments, existing plans and the proposals in respect of the capital investment levels proposed. 8.4 Prudential Indicator: Liability Benchmark 8.4.1 The Treasury Management Code 2021 states that organisations should evaluate the amount, timing and maturities needed for new borrowing in relation to planned borrowing needs, for example using a liability benchmark, 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 flow. 8.4.2 This represents the comparison of the Council’s actual borrowing against an alternative strategy. A liability benchmark has been calculated showing the lowest risk level of borrowing. 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. 8.4.3 This is shown in the chart below together with the maturity profile of the Council’s existing borrowing; Page 84 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 8.4.4 The Loans CFR line (solid light blue) represents the total cost of the capital expenditure plans based on the current profile of the 5-year Capital Programme 2020/2021 to 2025/2026. This reduces over time as scheduled principal repayments are made to the loans fund. The Net Loans Requirement line (dotted red) 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 line (solid red) 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. 8.4.5 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. 8.5 Prudential Indicator: The Authorised Limit for External Debt. 8.5.1 This represents the maximum limit beyond which borrowing is prohibited. Although this limit is deemed to be affordable in the short-term, it is not desirable or a sustainable level of borrowing for the council and is therefore being set at a level as the maximum allowable in each of the years 2023/2024 through to 2025/2026. The initial level set for 2022/2023 is shown for comparison. The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 provide a statutory backing to the Prudential Code requirement for an authority to set an authorised limit for external debt. Authorised Limit 2022/23 Initial Limit £m 2023/24 Estimated £m 2024/25 Estimated £m 2025/26 Estimated £m Gross Borrowing :Loan Debt 1,215 1,350 1,490 1,645 Other Long-Term Liabilities 185 235 240 245 Total External Debt 1,400 1,585 1,730 1,890 Table 11 – Authorised Limit 2022/23 to 2025/26 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 £m Liability Benchmark -North Lanarkshire Fixed rate loans LOBO loans Loans CFR Liability benchmark Net loans requirement Page 85 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 8.6 Prudential Indicator: The Operational Boundary for External Debt. 8.6.1 This indicator is based on the expected maximum external debt during the course of the year; it is not a limit. This operational boundary allows flexibility to borrow, re-invest and undertake debt restructuring during the course of the year. It is therefore possible and acceptable, for actual borrowing to vary around this boundary for short periods during the year. Operational Boundary 2022/23 Initial Limit £m 2023/24 Estimated £m 2024/25 Estimated £m 2025/26 Estimated £m Gross Borrowing :Loan Debt 1,240 1,300 1,495 1,618 Other Long-Term Liabilities 185 235 240 245 Total External Debt 1,425 1,535 1,680 1,840 Table 12 – Operational Boundary 2022/23 to 2025/26 8.7 Prudential Indicators: Affordability 8.7.1 The previous sections cover the treasury management and overall capital and control of borrowing prudential indicators, but within this framework, prudential indicators are required to assess the affordability of the capital investment plans. These provide an indication of the impact of the capital investment plans on the overall Council finances. The Council is asked to approve the following affordability indicator. 8.8 Prudential Indicator: The Proportion of Financing Costs to Net Revenue Stream. 8.8.1 Since capital expenditure impacts on the revenue budget through financing charges, the Council needs to ensure that financing costs not only remain affordable, but also do not constitute an excessive proportion of the revenue resources available. The proportion of capital financing costs to revenue forecasts for the next 3 years are illustrated in Table 13 below showing that the General Services loan charges represent up to 6.98% of the total revenue budget available. The increase in the proportion still remains within prudent levels demonstrating that the capital programme investment appears to be affordable and sustainable. 8.8.2 In noting the percentage on loan charges within the HRA budget, a major element of revenue costs in the Housing Account is the funding support to sustain the substantial investment programme; the other main elements of expenditure being repair costs and management costs. The level of loan charges is acceptable and deemed prudent and affordable within the framework of the Council’s 30-year Housing investment plan. Page 86 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 Proportion of Financing Costs to Net Revenue Stream Estimated 2023/24 Estimated 2024/25 Estimated 2025/26 £m £m £m Total General Fund (GF) Loan Charges 34.520 40.888 47.125 Total General Fund Finance Lease/PPP Costs 17.978 16.340 15.440 Total General Fund : Capital Financing Costs 52.498 57.228 62.565 General Fund : Net Revenue Stream 896.198 896.198 896.198 GF- Proportion of Financing Costs to Net Revenue Stream 5.86% 6.39% 6.98% Total Housing Revenue Account (HRA) Loan Charges 28.048 32.739 38.108 Total Housing Revenue Account Finance Lease Costs 0.325 0.325 0.325 Total HRA : Capital Financing Costs 28.373 33.064 38.433 HRA : Net Revenue Stream 148.178 155.737 164.769 HRA- Proportion of Financing Costs to Net Revenue Stream 19.15% 21.23% 23.33% Table 13 – Proportion of Financing Costs to Net Revenue Streams 2023/24 to 2025/26 8.8.3 The scheduled loan debt and education PPP amortisation figures presented within Table 9 above are based on the current profile of the 5 year Capital Programme 2020/2021 to 2025/2026, and the assumed implementation of the new circular in respect of accounting for service concessions. 8.9 Prudential Indicator: Affordability – Sensitivity Analysis 8.9.1 For the Prudential Indicators relating to affordability, the table within Annex E provides a summary of the sensitivity of the most likely outcomes outlined within the preceding paragraphs provided above to the following movements, all assessed independently of each other: (i) a plus or minus 10% change in the capital financing requirement i.e. the level of borrowing undertaken to retain average investment balances and under borrowing position at prudent levels. (ii) a plus or minus 50 bps change in the interest rates achievable for new long-term borrowing i.e. ½ percent movement (iii) a plus or minus 10% change in the net revenue stream used to calculate the proportion of financing costs to net revenue stream. 9.0 Policy on Repayment of Loans Fund Advances 2023/2024 9.1 The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 within Regulation 13 require the Council to make a loans fund advance equal to the amount of capital expenditure that the Council has determined will be financed by borrowing. The Capital Expenditure definition being that adopted by proper accounting practice, the statutory control framework and the Prudential Code. 9.2 Loans fund advances also incorporate grants to third parties on third party assets and loans to third parties where the other party meets the criteria laid out within Part 3 of the Regulations e.g. other local authorities or joint boards. Page 87 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 9.3 Accounting for loans fund advances also changed from 1st April 2016. Prudent repayment of loans fund advances are required to be made in line with Scottish Government Statutory Guidance on Loans Fund Accounting (Circular 7/16). 9.4 The broad aim of prudent repayment is to ensure that the Authority’s capital expenditure is financed over a period of years which that expenditure is expected to provide a benefit, and that each year's repayment amount is reasonably commensurate with the period and pattern of the benefits. 9.5 The statutory guidance requires the Council to approve a policy on loans fund repayments each year and it is proposed the Council adopts the following options for calculating prudent repayments in 2023/24. 9.6 For pre-existing Loans Fund advances made up to 31st March 2016 and for the most part capital expenditure plans for the period up to and including the 31 March 2021, the Council continued to use Option 1 the Statutory Method. This approach taking into account the 5-year transitional period from 31/3/2016 to 31/3/2021 available within the new guidance, during which the current methodology may continue to be selected. The repayment of Loans Fund advances therefore being equal to the annual amount determined in accordance with Schedule 3 of the Local Government (Scotland) Act 1975. 9.7 However the Council undertook an initial review of the loans fund advances annuity models in 2021/22 and a review of the initial asset lives adopted and determined it would be prudent to adopt Option 3: Asset Life Method, with the Council applying this option accordingly for 2020/2021. This approach allows a retrospective review for ‘prudent repayment’ of all historic loans fund advances outstanding at 31 March 2020 with no distinction made between debt held prior to 31 March 2016 and since the prudent repayment methodology was introduced on 1 April 2016. 9.8 Following this initial exercise, a further review was carried out during 2020/2021 in conjunction with Treasury specialists to investigate further adaptations to the repayments policy. Per the report submitted to this Committee on the 26 November 2020 entitled Loans Fund Advance Repayment Policy Review a revised policy was approved. 9.9 This included the application of a fixed average life to all loans fund advances, and changes to the annuity rate adopted to calculate loans fund advance repayments, including the retrospective adjustment to the period over which historic loans fund advance repayments can be made and applying this approach to future loans fund advances. The repayment periods and annuity rate can be updated in future years, if deemed prudent to do so, to reflect the changing nature and durability of assets financed by loans fund advances linked to Treasury Management strategy. 9.10 The revised Policy resulted in a revised loans fund advance repayment profile, the Council adopting the flexibility within the policy and will consider alternative approaches including reprofiling back to initial advance date. A prudent approach specific to the Council’s financial position will be adopted including an assessment of the whole life impact both in nominal and NPV terms of this proposal. 9.11 Alternatively if it is determined that it may be prudent to recognise grant funding or other income streams when determining both the period of the repayment and/or the annual repayment of any loans fund advance, Option 4 Funding/Income profile method will be selected. Some examples of where this income approach may be considered prudent would include the deferred UK and Scottish Government grant support for the City Deal. Therefore, for capital expenditure incurred for specified projects where it is reasonable to link an income /funding stream, the annual repayment of Loans Fund advances may be profiled to reflect the income/funding stream. The Council will keep the income streams under review to ensure the provision for repayment remains prudent and, if required, address any shortfall. 9.12 The Statutory Guidance, allows a further option referred to as Option 2: the Depreciation method within the guidance and after due consideration the Council did not adopt this in 2021/2022. 9.13 In accordance with the Statutory Guidance, the Council has outlined within Annex F its commitments in respect of loans fund advance repayments, however these are based on the Page 88 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 current profile of the 5 year Capital Programme 2021/2022 to 2025/2026, the implementation of approved loans funds advance repayment policy and the outcome of the discussions around the fiscal flexibilities. Material changes to these estimates/forecasts will be reported during the quarterly Treasury Management Monitoring Process. 9.14 In accordance with the statutory guidance the HRA Loans Fund advances and associated annual repayments have been identified separately from that of the General Fund. 10. Fiscal Flexibilities 10.1 In October 2020 the Council received notification of the availability of Local Government Financial Flexibilities for the cost of COVID, agreed by Scottish and UK Governments, which the Council broadly welcomed. 10.2 The three specific areas covered within the flexibilities applicable to the Treasury Management Strategy outlined above are; Capital Receipts 10.3 This flexibility would allow the Council to use capital receipts to meet significant one-off revenue funding pressures, and COVID related costs recognising that whilst COVID has also had an impact on the sale of assets, permitting this facility over three financial years up to 2022/2023 will support Councils with their financial recovery from COVID. 10.4 This would provide minimum benefit to the Council as the Councils capital receipts policy currently allows for capital receipts to be transferred to a capital fund. This innovative accounting approach already providing a revenue funding benefit, which allows this income to be allocated from the capital fund providing a contribution towards the annual repayment of loans fund debt advances. Service Concession Arrangements: Credit arrangements 10.5 Service concession arrangements are likened to a lease. The statutory intervention on service concession arrangements in Scotland was introduced in 2010 to address a financial impact when service concession assets, mostly schools, were first brought onto a local authority’s balance sheet. The current statutory arrangements require the repayment of the liability to be charged to the revenue account over the contract period. Accounting standards allow depreciation of the asset to be over the useful life of the asset where the asset will remain with the authority at the end of the contract period. For consistency the Scottish Government wish to see the statutory reforms, i.e. reverting to accounting standards, being applied to all leases and service concession arrangements. The Scottish Government assessed that this would generate a saving for Councils, as the cost is spread over the useful life of the asset rather than the contract period. This flexibility being applicable to existing service concession arrangements only. 10.6 In September 2022 the Scottish Government published new statutory guidance; Local government finance circular 10/2022 – accounting for service concession arrangements, leases and similar arrangements. The statutory guidance provides a temporary statutory override to the requirements of the Code of Practice for Local Authority Accounting in accounting for infrastructure assets. This essentially provides the details of the options available in accounting for PPP arrangements. 10.7 Officers have reviewed the guidance and have taken specialist independent advice to review and critically appraise the options available, and to model and verify the financial implications of such options. It should be noted that the option proposed must be adopted no later than financial year 2023/24. The guidance also stipulates that any change to accounting for service concessions as a result of this circular, requires full Council approval. 10.8 The change in accounting treatment will see a reduction in annual accounting charges for service concession arrangements, in the short to medium term, due to spreading them over the remaining useful life of the assets, rather than the shorter contract life, which is currently applicable, thus resulting in a short to medium term financial benefit for the Council. However, a further consequence of such action is that the Council will now incur charges beyond the contract period. Based on the analysis undertaken, an annual financial saving of £4 million is Page 89 of 289
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Appendix 1 Treasury Management Strategy 2023/2024, Treasury Management Indicators and Prudential Indicators 2023/2024 to 2025/2026 estimated to be prudent and sustainable over the short to medium term. It should also be noted there is a £44.8 million benefit arising from the retrospective application of the change in accounting. Any use of the one-off benefit will most likely requiring additional borrowing, which will incur additional material interest costs. 10.9 It should also be noted that CIPFA/LASAAC published the 2022/23 edition of its Code of Practice on Local Authority Accounting in the United Kingdom (the Code) in August 2022. This sets out the accounting for service concession arrangements under the new IFRS 16 Leases accounting standard, which the Council currently plans to adopt in 2024/25 financial year. Implementing the new standard is expected to generate a further financial benefit in respect of accounting for service concession arrangements which will be further clarified in future budgetary strategies. 10.10 It is proposed that the Council applies this Service Concessions flexibility in 2023/24 which provides the Council with a one-off revenue saving of £44.8m, and recurring annual savings of c.£4m with recognition that this will be ultimately repaid via increased financing and loan charges, and that budgetary provisions will be reviewed as part of the annual medium-term financial plan updates to ensure affordability, sustainability and prudence. This position was reported to Council on 23 February 2023. Loans Fund Repayment holiday 10.11 The statutory arrangements for the repayment of borrowing in Scotland, requires the Council to make an annual repayment of debt which it considers prudent. As an exceptional measure the Scottish Government has confirmed they will allow Councils to take a loans fund repayment holiday, the maximum permitted being the planned repayment for 2022-23, which the Council would be required to repay within the period of the loan fund advance, but where the loan period exceeds 20 years, within 20 years. 10.12 This would provide the Council with a one-off revenue saving in year of application but due to the conditions attached the Council will need to ensure that it makes the necessary provision within its Medium Term Financial Plan to meet the additional payments per the time horizons proposed. 10.13 It is proposed that the Council applies this Loan Debt Repayment Holiday flexibility in 2022/23, which provides the Council with a one-off revenue saving of £18.455m (General Fund £8.738m and HRA £9.807m) with recognition that this will be repaid over the following 20 years via increased loan charges, and revenue provisions will be reviewed as part of the annual Medium Term Financial Plan updates, to ensure affordability. 10.14 The Council seeks approval to use the fiscal flexibilities outlined above as appropriate. This will assist the Council in managing the on-going impact of COVID and other pressures with the implementation of the fiscal flexibilities managed in line with the principles detailed within this Treasury Management Strategy and the setting of prudential indicators. Page 90 of 289
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Annex A Treasury Management Policy Statement & Clauses adopted The Treasury Management Policy Statement adopted by North Lanarkshire Council: 1. The Council defines its Treasury Management activities as: “The management of the organisation’s borrowing investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.” 2. The Council regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the Council and any financial instruments entered into to manage these risks. 3. The Council acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money in treasury management, and to employing suitable comprehensive performance measurement techniques, within the context of effective risk management 4. The Council adopts a high-level approach to setting policies for borrowing and investment activity having in place an appropriate scheme of delegation and ensuring all staff employed in Treasury Management have the suitable skills and resources to carry out delegated treasury management activities effectively, efficiently and achieving value for money. CIPFA Treasury Management code clauses formally adopted by North Lanarkshire Council: 1. This Council will create and maintain, as the cornerstones for effective treasury management: • A treasury management policy statement, stating the policies, objectives and approach to risk management of its treasury management activities; • Suitable treasury management practices (TMPs), setting out the manner in which the Council will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities. 2. The Council will receive reports on its treasury management policies, practices and activities, including as a minimum, an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close, in the form prescribed in its TMPs. 3. The Council delegates responsibility for the development of the Treasury Management Strategy and implementation and monitoring of its treasury management policies and practices to the Finance and Resources Committee and for the execution and administration of treasury management decisions to the Head of Financial Solutions, who will act in accordance with the Council's Treasury Policy statement and TMPs and CIPFA's Standard of Professional Practice on Treasury Management. 4. The Audit and Scrutiny Panel will be responsible for ensuring effective scrutiny of the Treasury Management Strategy and policies as part of its work on reviewing the internal financial controls of the Council. 5. In accordance with The Local Government Investments (Scotland) Regulations 2010, the Council is responsible for the approval of the Annual Investment Strategy and Annual Investment Report. Page 91 of 289
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Annex B Explanation of Long-Term Rating Definitions Type of Rating Rating Explanation Fitch – long-term AAA Indicates exceptionally strong capacity for timely payment of financial commitments and this capacity is highly unlikely to be adversely affected by foreseeable events. AA- Indicates very strong capacity for timely payment of financial commitments and this capacity is not significantly vulnerable to foreseeable events. A- Indicates strong capacity for timely payment of financial commitments. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. BBB Indicates an adequate capacity for timely payment of financial commitments but adverse business or economic conditions more likely to impair this capacity. Moody’s – long-term Aaa Offer excellent credit quality, with susceptibility to long-term risks that are mostly unlikely to materially impair the banks strong position. Aa Offer excellent credit quality, with susceptibility to long-term risks with a vulnerability to greater fluctuations within protective elements. A Offer excellent credit quality, but elements suggest a susceptibility to impairment over the long-term. Baa Rated as medium grade, with some speculative elements and moderate credit risk. Standard & Poor’s - long-term AAA Indicates extremely strong capacity for timely payment of financial commitments AA- Indicates very strong capacity for timely payment of financial commitments A- Indicates strong capacity for timely payment of financial commitments This capacity may, nevertheless, be more susceptible to the adverse effects of changes in circumstances or in economic conditions than is the case for higher rated category. BBB Indicates an adequate capacity for timely payment of financial commitments but adverse business or economic conditions more likely to impair this capacity. Page 92 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits a. Deposits with the Debt Management Account Facility (UK Government). Deposit with the UK Government and as such credit/counterparty and liquidity risk is very low, and there is no market risk to the principal sum. Little mitigating controls required as this is a UK Government investment. The monetary limit is unlimited to allow for a safe haven for investments. The sovereign rating is monitored with the impact of any changes to this sovereign rating evaluated and removal of the investment from the permitted list if necessary. Long-term rating n/a No limit O/night b. Deposits with other local authorities or public bodies Quasi UK Government debt and as such credit/counterparty risk is very low, and there is no market risk to principal sum. Liquidity may present a problem as deposits can only be broken with the agreement of the counterparty, and penalties can apply. Little mitigating controls required for local authority deposits, as this is a quasi UK Government investment. The sovereign rating is monitored with the impact of any changes to this sovereign rating evaluated and removal of the investment from the permitted list if necessary. Long-term rating n/a £20m Up to a max period of 3 years c. Instant Access Accounts These tend to be low risk investments, but will exhibit higher risks than categories (a) and (b) above. These investments are subject to risk of loss via bail-in should the regulator determine that the bank is failing or likely to fail. Lending will be restricted to those counterparties meeting the credit rating criteria with the selection defaulting to the lowest available credit rating to provide additional risk control measures. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Long-term rating Above or equal to A- or equivalent £20m Daily access if required BBB or equivalent £10m Page 93 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits d. Call Accounts These tend to be low risk investments, but will exhibit higher risks than categories (a) to (c) above. With this type of investment liquidity can be low or high, determined by the call account facility adopted e.g. 35 days. Call deposits can only be broken with the agreement of the counterparty, and penalties may apply. These investments are subject to risk of loss via bail-in should the regulator determine that the bank is failing or likely to fail. Lending will be restricted to those counterparties meeting the credit rating criteria with the selection defaulting to the lowest available credit rating to provide additional risk control measures. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Long-term rating Above or equal to A- or equivalent £20m up to a max of 364 days BBB or equivalent £10m up to a max of 30 days. e. Term Deposits These tend to be low risk investments, but will exhibit higher risks than categories (a) to (d) above. With this type of investment, liquidity is low and term deposits can only be broken with the agreement of the counterparty, and penalties may apply. These investments are subject to risk of loss via bail-in should the regulator determine that the bank is failing or likely to fail. Lending will be restricted to those counterparties meeting the credit rating criteria with the selection defaulting to the lowest available credit rating to provide additional risk control measures. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Long-term rating Above or equal to A- or equivalent £20m up to a max of 364 days. BBB or equivalent £10m up to a max of 30 days. Page 94 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits f. Money Market Funds (MMFs) The Council is no longer guaranteed preservation of capital i.e. for every £1 of principal invested the fund will no longer guarantee a return £1 of principal on withdrawal. However the day to day operation of LVNAV funds is very similar and has many of the attractive features of the former Constant Net Asset Value (CNAV) fund and the probability of the price changing and loss of capital, within the boundaries set for price changes i.e. “the collar”, is widely regarded as de minimis. Two types of funds are available to the Council • a Public Debt CNAV (assets invested in government debt); and • a ‘Low Volatility NAV’ (LVNAV) The Council will not use Variable NAV Funds. Assessment of credit worthiness will be underpinned by additional market intelligence including credit default swaps, sovereign support and share price data and information regularly received from the Council’s Treasury Advisors Arlingclose Ltd. Long-term rating n/a £10m per MMF fund up to a max of £40m in total or 0.5% of fund size. Daily access if required g. Instant Access Funds held with Council’s own bankers These tend to be low risk investments, but will exhibit higher risks than categories (a), (b) and (c) above. These investments are subject to risk of loss via bail-in should the regulator determine that the bank is failing or likely to fail. If the council’s own bankers fail to meet the credit rating criteria per c) above , for operational purposes limited funds may be held within this account but the Council will ensure funds kept at the lowest levels manageable Long-term rating n/a n/a Overnight basis only Page 95 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits h. Government Gilts and Treasury Bills These are marketable securities issued by the UK Government and as such counterparty and liquidity risk is very low, although there is potential risk to the market value arising from an adverse movement in interest rates (no loss if these are held to maturity). Little mitigating controls required as this is a UK Government investment. The monetary limit is unlimited to allow for a safe haven for investments. Any changes to the sovereign rating is evaluated and the removal of this type of investment from the permitted list if necessary. Assessment of credit worthiness will be further strengthened by additional market intelligence including credit default swaps, sovereign support and share price data. Cashflow management tools will endeavour to ensure that this type of investment is held until maturity to limit market risk. Long-term rating n/a No limit Up to a max period of 5 years i. Supranational Bonds These are bonds issued by institutions such as the European Investment Bank (EIB) and the World Bank as such counterparty and liquidity risk is very low, although there is potential market risk to principal amount arising from an adverse movement in interest rates (no loss if these are held to maturity). Lending restricted to those meeting credit rating criteria. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Cashflow management tools will endeavour to ensure that this type of investment is held until maturity to limit market risk Long-term rating A- or equivalent £20m max period of 5 years. Page 96 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits j. Certificates of deposits with financial institutions These are short dated marketable securities issued by financial institutions and as such counterparty risk is low, but will exhibit higher risks than categories (a) to (h) above. There is risk to value of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates. Liquidity risk will normally be low. Lending will be restricted to those counterparties meeting the credit rating criteria with the selection defaulting to the lowest available credit rating to provide additional risk control measures. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Long-term rating A- or equivalent £20m Up to a max period of 364 days. k. Covered Bonds These are bonds issued by financial institutions and guaranteed by a group company that holds mortgage assets. There is risk of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates. Liquidity risk will normally be low as highly liquid market. These investments are exempt from the bail-in provisions should the regulator determine that the bank is failing or likely to fail. These investments are secured on the borrower’s assets up to a value of 125% of the principal amount which limits the potential losses in the event of default. Process in place to monitor the value of the cover arrangements throughout the bond term. i.e. value of assets providing security Bonds will be restricted to those meeting credit rating criteria. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Cashflow management tools will endeavour to ensure that this type of investment is held until maturity to limit market risk. Long-term rating A- or equivalent (Criteria required for the covered bond.) £20m Up to 5 years. BBB or equivalent (Criteria required for the covered bond.) £10m Up to 6 months. Page 97 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits l. Reverse repurchase agreements and other collateralised arrangements These are bonds issued by financial institutions with collateral provided by the lender to the Council by transferring the custody and title to bonds or other investment securities valued at a price above par e.g. 105% of the principal amount. There is risk of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates. Liquidity risk will normally be low as highly liquid market. These investments are exempt from the bail-in provisions should the regulator determine that the bank is failing or likely to fail. These investments are secured by the borrower giving the Council custody and title to marketable securities valued above par that will be retained in the event of default Process in place to monitor the value of the collateral in place throughout the bond term to ensure adequate cover. Collateral arrangements will be restricted to those meeting credit rating criteria. Assessment of credit worthiness will be further strengthened by the use of additional market intelligence including credit default swaps, sovereign support and share price data. Cashflow management tools will endeavour to ensure that this type of investment is held until maturity to limit market risk Long-term rating A- or equivalent (Criteria required for collateral arrangement) £20m Up to 5 years. BBB or equivalent (Criteria required for the collateral) £10m Up to 6 months. Page 98 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits m. Investment properties These are non-service properties which are being held pending disposal or for a longer term rental income stream. These are highly illiquid assets with high risk to value (the potential for property prices to fall or for rental voids). Funding for this type of investment must be met from revenue & balances as borrowing to on-lend for this purpose is prohibited per Scottish Government Investment guidance. In larger investment portfolios some small allocation of property based investment may counterbalance or compliment the wider cash portfolio. Property holding will be re-valued regularly and reported annually with gross and net rental streams. Strategy/Policy driven subject to scrutiny by Head of Financial Solutions. n/a Policy Driven Policy Driven, n. Loans to third parties including soft loans These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Funding for this type of investment must be met from revenue & balances as borrowing to on-lend for this purpose is prohibited per Scottish Government Investment guidance. Prior to awarding loans to a third party the Service Strategy/Policy decision to award this type of loan/loans must be subject to scrutiny and approval by the Head of Financial Solutions. Full detail of the service rationale behind awarding the loan and the likelihood of partial or full default must be assessed. n/a Policy Driven Policy Driven, o. Loans to a local authority company These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Funding for this type of investment must be met from revenue & balances as borrowing to on-lend for this purpose is prohibited per Scottish Government Investment guidance. Prior to awarding loans to a local authority company the Service Strategy/Policy decision to award this type of loan/loans must be subject to scrutiny and approval by the Head of Financial Solutions. Full detail of the service rationale behind awarding the loan and the likelihood of partial or full default must be assessed. n/a Policy Driven Policy Driven, Page 99 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits p. Shareholdings in a local authority company These are service investments which may exhibit market risk and are likely to be highly illiquid. Funding for this type of investment must be met from revenue & balances as borrowing to on-lend for this purpose is prohibited per Scottish Government Investment guidance. Each equity investment in a local authority company requires member approval and each application will be supported by the service rationale behind the investment and the likelihood of loss. Service Strategy/Policy driven subject to scrutiny by Head of Financial Solutions. n/a Policy Driven Policy Driven q. Non-local authority shareholdings These are non-service investments which may exhibit market risk, be only considered for longer term investments and will be likely to be liquid. Funding for this type of investment must be met from revenue & balances as borrowing to on-lend for this purpose is prohibited per Scottish Government Investment guidance. Any non-service equity investment will require separate Member approval and each application will be supported by the service rationale behind the investment and the likelihood of loss. Service Strategy/Policy driven subject to scrutiny by Head of Financial Solutions n/a Policy Driven Policy Driven Page 100 of 289
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Annex C Permitted Investments, Associated Controls, Credit Rating, Money and Time Limits Type of Investment Treasury Management Risks Mitigating Controls Credit Rating Money Limits Time Limits r. Subordinated debt in projects delivered via ‘Hubco/DBFM’ model The ‘Hubco/DBFM’ delivery model fails to meet its’ contractual obligations resulting in failure to repay the principal sum invested. The cash forming part of the Council’s reserves and balances is required during the term of the investment as the type of investment is highly illiquid. Fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the Council’s finances against which the Council has failed to protect itself adequately. The Council must assess the merits of each individual subordinated debt investment opportunity via the ‘Hubco/DBFM’ model prior to investing, carrying out a full risk/benefit analysis. Employ efficient cashflow management and forecasting tools including annual balance sheet analysis. Set a cap on the level of long term investments of this nature i.e. to avoid cash reserves being fully extinguished resulting in future non compliance with ‘borrowing to on lend’ restrictions. Implement Long term Financial Plans which are robust including the setting of contingencies and cash backed reserves at levels to leave prudent headroom to cater for long term cash commitments. Where possible consider selling subordinated debt to a secondary market provider. For investments in subordinated debt for projects delivered via the ‘Hubco’ model the rate of return is fixed over the term of the investment and in normal circumstances will not vary. n/a £1.5m per project Up to 30 years Page 101 of 289
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Annex D Interest Rate Forecast March 2023 until December 2025 (Source: Arlingclose Ltd December 2022) *Official Bank rate: (also called the Bank of England base rate or BOEBR) is the interest rate that the Bank of England charges Banks for secured overnight lending. **MM: the short term readily available from banks and building societies and similar financial organisations ***PWLB: Public Works Loan Board Central Forecast Mar June Sept Dec March June Sept Dec March June Sept Dec Official Bank Rate* 4.00% 4.25% 4.25% 4.25% 4.25% 4.00% 3.75% 3.50% 3.25% 3.25% 3.25% 3.25% 3-mth MM Rate** 4.40% 4.40% 4.40% 4.35% 4.30% 4.25% 4.00% 3.75% 3.50% 3.40% 3.40% 3.40% 5-yr PWLB*** 4.40% 4.60% 4.60% 4.60% 4.50% 4.40% 4.30% 4.20% 4.10% 4.10% 4.10% 4.10% 10-yr PWLB 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 4.30% 20-yr PWLB 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 4.65% 50-yr PWLB 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 4.40% 2023 2024 2025 Page 102 of 289
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Annex E SENSITIVITY ANALYSIS OF PRUDENTIAL INDICATORS: AFFORDABILITY 2023/24, 2024/25 & 2025/26 The Tables below highlights the impact of (i) a plus or minus 10% change in the capital financing requirement i.e the level of borrowing undertaken to retain average investment balances and under borrowing at prudent levels Prudential Indicators : Affordability CFR Movement 23/24 24/25 25/26 £m £m £m Total Composite Capital Financing Costs +10% 52.62 57.51 63.00 No Change 52.50 57.23 62.57 -10% 52.38 56.96 62.15 Total HRA Capital Financing Costs +10% 28.45 33.31 38.90 No Change 28.35 33.06 38.43 -10% 28.26 32.83 37.97 General Fund : Ratio of financing costs to net revenue stream +10% 5.87% 6.42% 7.03% No Change 5.86% 6.39% 6.98% -10% 5.84% 6.36% 6.93% HRA : Ratio of financing costs to net revenue stream +10% 19.20% 21.39% 23.61% No Change 19.14% 21.23% 23.33% -10% 19.07% 21.08% 23.05% Page 103 of 289
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Annex E SENSITIVITY ANALYSIS OF PRUDENTIAL INDICATORS: AFFORDABILITY 2023/24, 2024/25 & 2025/26 (ii) a plus or minus 50bps change in the interest rates achievable for new long-term borrowing i.e. 1/2 per cent movement Prudential Indicators : Affordability Interest Rate Movement 23/24 24/25 25/26 £m £m £m Total Composite Capital Financing Costs +50bps 53.65 58.87 64.63 No Change 52.50 57.23 62.57 -50bps 51.35 55.59 60.51 Total HRA Capital Financing Costs +50bps 29.13 34.17 39.84 No Change 28.35 33.06 38.43 -50bps 27.58 31.97 37.04 General Fund : Ratio of financing costs to net revenue stream +50bps 5.99% 6.57% 7.21% No Change 5.86% 6.39% 6.98% -50bps 5.73% 6.20% 6.75% HRA : Ratio of financing costs to net revenue stream +50bps 19.66% 21.94% 24.18% No Change 19.14% 21.23% 23.33% -50bps 18.61% 20.53% 22.48% Page 104 of 289
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Annex E SENSITIVITY ANALYSIS OF PRUDENTIAL INDICATORS: AFFORDABILITY 2023/24, 2024/25 & 2025/26 (iii) Prudential Indicators : Affordability Movement in Net Revenue Steam 23/24 24/25 25/26 General Fund : Ratio of financing costs to net revenue stream +10% 5.33% 5.81% 6.35% No Change 5.86% 6.39% 6.98% -10% 6.51% 7.10% 7.76% HRA : Ratio of financing costs to net revenue stream +10% 17.40% 19.30% 21.21% No Change 19.14% 21.23% 23.33% -10% 21.26% 23.59% 25.92% a plus or minus 10% change in the net revenue stream used to calculate the proportion of financing costs to net revenue stream Page 105 of 289
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Annex F LOANS FUND REPAYMENT SCHEDULE Loans Fund Repayments Schedules Composite Estimated Loans Fund Pool Open Balance HRA Estimated Loans Fund Pool Open Balance Total £m £m £m Estimated Loans Fund Pool Open Balance 642.69 437.54 1,080.23 Estimated New Advances 23/24 114.60 81.89 196.49 Estimated New Advances 24/25 115.87 97.14 213.01 Estimated New Advances 25/26 45.14 103.56 148.70 Total Debt Repayments Due 918.30 720.13 1,638.43 Scheduled Debt Amortisation Composite HRA Total £m £m £m Within 1 year (10.49) (11.67) (22.16) Within 2 to 5 years (58.66) (62.90) (121.56) within 5 to 10 years (95.06) (96.92) (191.98) within 10 to 15 years (120.12) (119.11) (239.23) within 15 to 20 years (145.88) (121.60) (267.48) within 20 to 25 years (156.50) (104.81) (261.31) within 25 to 30 years (140.36) (93.23) (233.59) within 30 to 35 years (95.27) (60.30) (155.57) within 35 to 40 years (78.82) (38.50) (117.32) within 40 to 45 years (17.14) (11.09) (28.23) within 45 to 50 years 0.00 0.00 0.00 within 50 to 55 years 0.00 0.00 0.00 within 55 to 60 years 0.00 0.00 0.00 (918.30) (720.13) (1,638.43) Page 106 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref EK / GT Date 01/03/23 Non-Domestic Rates – Empty Property Relief From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 07939 280601 Executive Summary As part of the Scottish Government’s 2019/20 budget proposals a commitment was made to devolve Empty Property Relief to local government from 1 April 2023. The aim of devolving this relief is to ensure greater fiscal empowerment, enabling councils to administer rates charges for unoccupied properties in a way that is tailored to local needs. There has been considerable discussion and debate at professional forums, COSLA and with the Scottish Government about the implementation of changes and reporting requirements with the quantum of funding only recently agreed through COSLA. Given the short timescales available prior to 1 April 2023, it is proposed that North Lanarkshire Council’s Empty Property Relief Policy mirrors existing reliefs for a period of at least one year to 1 April 2024. It is the intention of Financial Solutions to undertake a review of the Empty Property Relief Policy during 2023 with a view to implementing a revised policy from 1 April 2024. The Service will ensure engagement with key internal and external stakeholders as part of the policy review. Recommendations It is recommended that Committee: (1) Approves the proposed policy to be effective from 1 April 2023; (2) Recognises that Financial Solutions intends to review the Empty Property Relief policy during 2023 with a view to implementing a revised policy from 1 April 2024 onwards; and (3) Recognises that Financial Solutions will consult with key stakeholders to inform the revised policy from 1 April 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 AGENDA ITEM 6 Page 107 of 289
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1. Background 1.1 All Scottish local authorities currently administer Empty Property Relief (EPR) using the following legislation and regulations: • Local Government (Scotland) Act 1966 – Sections 24 and 24A, • Non-Domestic Rating (Unoccupied Property) (Scotland) Regulations 1994, and • Non-Domestic Rating (Unoccupied Property) (Scotland) Regulations 1998. 1.2 As part of its 2019/20 budget agreement, the Scottish Government committed to the devolution of EPR at the next Non-Domestic Rates (NDR) valuation. The next revaluation will be on 1 April 2023 at which point all elements of EPR will be devolved to local government. 1.3 To enact this change, the Scottish Parliament has repealed the existing provisions for award of relief for unoccupied properties in Section 24 of the Local Government (Scotland) Act 1966 from 1 April 2023. The repeal was legislated through the Non- Domestic Rates Act (Scotland) 2020. 1.4 Councils have the power to award discretionary local reliefs for Non-Domestic Rates through Section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 as amended by Section 140 of the Community Empowerment (Scotland) Act 2015. 1.5 The devolution of EPR aims to deliver greater fiscal empowerment, enabling councils to administer support for unoccupied properties in a way that is tailored to local needs. The Scottish Government, in line with the independent Barclay Review of non-domestic rates, supports measures that help bring empty property back into economic use. 2. Report 2.1 The Council is required to establish its own policy for Empty Property Relief to be effective from 1 April 2023 following the repeal of existing legislation. 2.2 Despite the commitment being made to devolve EPR in the Scottish Government’s 2019/20 budget agreement, there has been considerable discussion and debate at professional forums, COSLA and with the Scottish Government about the nature of the implementation of changes, the quantum of funding being made available, reporting requirements and future reviews of the policy intent. Some of these aspects have only recently been agreed nationally. 2.3 Therefore, it is proposed that given the timescales involved, North Lanarkshire Council mirrors the existing reliefs for a period of at least one year to 1 April 2024. The proposed North Lanarkshire Council Non-Domestic Rates Empty Property Relief Policy is shown in Appendix 1. 2.4 If the Council does not set a policy full rates would be charged on all empty non- domestic properties from 1 April 2023. Funding 2.5 The Scottish Government will provide an annual allocation of £105m distributed amongst local authorities until the next revaluation in 2026. The quantum of £105m reflects the Scottish Fiscal Commission’s Medium Term Financial Strategy Forecasts and incorporates estimates of future inflation. Page 108 of 289
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2.6 The Local Government Finance Settlement for 2023/24 confirms a total of £3.974m for North Lanarkshire Council. It is for individual local authorities to allocate the recurring revenue as they wish, however, the Scottish Government intends to review the impact of devolving EPR during 2025/26 which may limit any longer-term policy changes. 2.7 The following table highlights the EPR awarded for 2022/23: Type of Relief Number of Awards Value of Relief Awarded (£) Industrial Property – 100% 115 412,963 Industrial Property – 10% 96 135,493 Other Property – 50% 47 19,190 Other Property – 10% 389 346,214 Listing Building 29 633,534 Land – no buildings 76 76,532 Small Rateable Value (£1,700) 266 44,532 Trustee 1 3,332 Prohibited by Law 2 23,203 Compulsory Purchase 0 0 Administration 8 127,973 Company Wound Up 19 299,407 Total 1,048 2,122,374 2.8 The funding being provided is greater than the total awards made for empty relief during 2022/23. However, the funding is fixed for a three year period and actual relief awarded may be affected by a number of factors including: • The rate poundage applied by the Scottish Government when it sets its budget each financial year. It should be noted that the rate poundage will be fixed between 2022/23 and 2023/24, • The impact of the 1 April 2023 revaluation on the rateable value of individual properties, and • Wider economic impacts increasing the number and type of empty properties eligible for relief. Administration 2.9 Given the recommendation to mirror the existing statutory reliefs in North Lanarkshire’s policy, businesses eligible for continuing relief on 31 March 2023 will transfer onto the new relief policy on 1 April 2023. Any balance of relief remaining will continue into the new financial year. Any application for new relief from 1 April 2023 until 31 March 2024 will be assessed in line with the Council’s new policy. 2.10 The Council will be required to amend its statistical reporting and administration of local reliefs to align with the new statutory basis of reliefs and ensure it can continue to report on any bad debts and debt write offs for empty properties through the old regime. This may require system changes to support efficient collection and reporting of data and keeping rates records up to date. The Council will continue to comply with Scottish Government reporting requirements for Non-Domestic Rates. 2.11 Financial Solutions will carry out a full review of empty property relief records to ensure they reflect the correct proprietor, tenant and occupier information. 2.12 The Council will also continue to take cognisance of its commitments in relation to Subsidy Control and will consider whether reliefs awarded under the new policy Page 109 of 289
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represent a subsidy under the Trade and Cooperation Agreement and the Subsidy Control Act 2022 when it comes into force. Review 2.13 It is the intention of Financial Solutions to undertake a review of the Empty Property Relief Policy during 2023 with a view to implementing a revised policy from 1 April 2024. The review will include consideration of the following areas: • The appropriateness of award categories, • The appropriateness of relief percentages, • The appropriateness of relief time limits, • Whether there are any policy interventions that could incentivise bringing empty properties back into use, and • The Council’s ongoing financial sustainability. 2.14 The Service will ensure engagement with key internal and external stakeholders to inform the policy review. 3. Measures of success 3.1 Approval of the policy will ensure empty properties continue to benefit from relevant reliefs. The review of the Council’s policy during 2023/24 will ensure the future policy supports local businesses and communities, incentivises brining empty properties back into use and supports the Council’s financial sustainability. 4. Supporting documentation Appendix 1 – Non-Domestic Rates Empty Property Relief Policy Elaine Kemp Chief Officer of Finance Page 110 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? Funding received from the Scottish Government will exceed the cost of current Empty Property Reliefs. However, the total reliefs awarded may be impacted by changes to the rate of poundage, the upcoming rates revaluation and a potential recession on the North Lanarkshire economy. Additional temporary staffing costs to support the review of existing properties awarded relief, system change requirements and the policy review will cost £0.143m and be funded from Scottish Government grant support. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 ☐ Page 111 of 289
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If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 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 112 of 289
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Appendix 1 North Lanarkshire Council Non-Domestic Rates – Empty Property Relief Policy 1. Background Following the repeal of Section 24 of the Local Government (Scotland) Act 1966, Empty Property Relief policy is no longer set by the Scottish Government. From 1 April 2023 individual local authorities can set their own policy for the administration of Empty Property Relief. This policy is written in accordance with Section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 as amended by Section 140 of the Community Empowerment (Scotland) Act 2015. This policy does not include any reliefs on part occupied properties which are still governed by Section 24A of the Local Government (Scotland) Act 1966. 2. Time Limited Reliefs 2.1. Industrial properties will receive 100% relief for 6 months from the last date of occupation and 10% relief thereafter indefinitely. 2.2. All other properties will receive 50% relief for the 3 months from the last date of occupation and 10% relief thereafter indefinitely. 2.3. A change of ratepayer does not affect the qualifying time period. 2.4. A property is treated as if it has been unoccupied during any period of occupation that ended within six months of when it started. 2.5. Short periods of occupation of 3 months or less will be ignored when assessing last occupation date for 2.1 and 2.2 above. 3. 100% Relief The following types of properties / owners / rateable occupiers will received 100% relief for an indefinite time on unoccupied properties as follows: 3.1. Listed Buildings or subject to preservation order where the rateable subjects are: 3.1.1. Subject of a building preservation notice(s) as defined by Section 56 of the Town and Country Planning (Scotland) Act 1972 or included in a list compiled under Section A of that Act; or 3.1.2. Included in the Schedule of Monuments compiled under Section 11 of the Ancient Monuments and Archaeological Areas Act; or 3.1.3. Industrial lands and heritages. 3.2. Properties not comprising one of more buildings or part of a building. 3.3. Properties with a rateable value (RV) under £1,700. 3.4. Properties where the rateable occupier is in administration (or subject to an administration order) Page 113 of 289
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3.5. Properties where the rateable occupier is a person entitled to possession only so entitled as a liquidator, as the trustee under a trust deed for creditors or an award of sequestration, or as the executer of a deceased person’s estate. 3.6. Properties where the rateable occupier is a company or limited liability partnership subject to a winding-up order made under the Insolvency Act 1986 or being wound up voluntarily under that Act. 3.7. Properties where occupation is prohibited by law. For properties prohibited by law from occupation, a rates exemption would be granted where legal action had been taken to prevent its use. However, if legal action had been taken to prevent one particular person or trade from using the property, then it would be unlikely to be exempt unless that person was the owner. 3.8. Properties where action is being taken by or on behalf of the Crown or any public authority with a view to prohibiting occupation or to acquisition (e.e. compulsory purchase order). 3.9. The Council will restrict the award of 100% empty property relief where the ratepayer has entered insolvency, compulsorily or voluntarily, shortly after occupation where properties which are let under a lease agreement, and have become unoccupied within a period of 6 months from the date the property first became unoccupied under the lease agreement, with at least one of the three further indicators connected to reduction or mitigation of rates liability also present. The three additional criteria are: 3.9.1. the rent charged for the lands and heritages is significantly below the level of the rent which could reasonably have been obtained at the time the lease was entered into, in all the circumstances; 3.9.2. payment of the rent is optional in terms of the relevant lease; 3.9.3. the purpose of the arrangement is identified in the lease as being for the purpose of mitigating rates liability. 3.10. Any unoccupied property that is rateable is, for the purposes of determining charity relief eligibility, treated as if it is being used for the purpose for which it was used when last occupied. It may not however be eligible for Charity Relief unless the proprietor (or the party entitled to occupation) also satisfies the relevant criteria. 4. Awarding Reliefs 4.1. 100% Reliefs awarded as at 31 March 2023 in accordance with Section 24 of the Local Government (Scotland) Act 1966 will continue to be awarded in accordance with this Policy on 1 April 2023. 4.2. Where time limited reliefs are in place at 31 March 2023, the Council will continue to award the relief. However, each premises will only receive the balance of relief based on the overall maximum period of relief outlined in Section 2 of this Policy. 4.3. For new relief applications, the rateable occupier will be required to make an application to the Council for the relief to be applied. The application form and required evidence are available on the Council’s website. Page 114 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK / GT Date 01/03/23 Payment of Local Taxation & Benefit 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 Financial Solutions as at 31 December 2022. Key points to note include: • As at 31 December 2022, 83.1% of Council Tax due for 2022/23 had been collected. This is an increase of 0.7% on the same period last financial year but is largely attributable to cash received from the Scottish Government in respect of the Cost-of-Living Award. • Non-Domestic Rates collection has shown a year-on-year reduction from 78.7% to 31 December 2021 to 68.8% to 31 December 2022. This is largely attributable to the timing of payments from other public sector bodies. • The service continues to meet statutory timescales for administering benefits applications and changes of circumstance. • The service continues to support the administration of Cost-of-Living support measures. Recommendations It is recommended that Committee: (1) Acknowledges the content of the report. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions AGENDA ITEM 7 Page 115 of 289
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1. Background 1.1 Financial Solutions 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. 1.3 During the course of the Covid-19 health pandemic and with the current cost of living crisis, the Service has supported thousands of North Lanarkshire’s residents with support payments for schemes such as Self Isolation Support Grant, Fuel Hardship Payment, Pensioner Fuel Grant and the North Lanarkshire Child Payment. 2. Report Council Tax 2.1 The graph below shows the cash collected at 31 December 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 2021/22) and does not include cash collected in subsequent years (i.e. billed in 2021/22 but received in 2022/23). This ensures a like for like comparison. 2.2 The collection figure for the current financial year of 83.1% is 0.7% higher than the same period last financial year. However, the current year collection figure has benefited from the impact of the Scottish Government’s Cost of Living Award. Total cash received from the Scottish Government of £18.6m has been allocated to 2022/23 which is inflating the overall in-year collection figure. 2.3 Members will recall that this one-off £150 credit to Council Tax accounts for eligible households will reduce Council Tax bills throughout the financial year so it is expected that over the remainder of the financial year the cash collected will trend towards historic rates. 2.4 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 80.00 81.00 82.00 83.00 84.00 85.00 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Percentage of annual billing collected (%) Financial Year Council Tax Collection Rate at 31 December Page 116 of 289
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the Council’s finances and is reflected in the regular budget monitoring reports to Committee. Non-Domestic Rates 2.5 The following graph shows the cash collected at 31 September for each financial year. 2.6 The collection figure for 2022/23 at 31 December is 68.8%; 9.9% lower than the same period last financial year. These year to date figures can fluctuate significantly depending on the timing of payment from individual ratepayers i.e. a number of large ratepayers will pay in one instalment and the figures can be skewed depending on when that payment is made. In the current financial year, the Council’s own NDR bill was paid in Quarter 4 of the financial year rather than Quarter 3 in 2021/22 accounting for the lower in year collection rate. 2.7 The Scottish Government has now ended the 100% rates relief for the retail, hospitality, and leisure sectors for the 2022/23 financial year. In a change from the previous scheme, 50% relief is awarded to one property for the period 1 April to 30 June 2022. 2.8 The revised recovery processes for Non-Domestic Rates have been implemented during 2022/23 which has led to earlier recovery action commencing in May 2022. It is hoped that early engagement with businesses will improve the overall collection rates. Housing Benefits 2.9 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 year to 31 December 2022. The Scottish average comparator is based on the latest information published by DWP at Q4 2021/22. Days to Process 2021/22 2022/23 Quarter 4 2021/22 Scotland Average New Claims 13 14 17 Change of Circumstances 6 9 3 65 70 75 80 85 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Percentage of annual billing collected (%) Financial Year Non Domestic Rates Collection Rate at 31 December Page 117 of 289
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2.10 The service continues to perform well in the speed of processing for new claims compared to the previous financial year and the most recent Scottish average. The service also continues to meet statutory requirements for the speed of processing changes of circumstance. Council Tax Reduction Scheme 2.11 As at 31 December 2022 a total of £24.544m in Council Tax Reduction has been awarded for the 2022/23 financial year. This compares to £24.153m to the same period during 2021/22, representing a small increase of £0.391m (1.6%). 2.12 The service received 5,119 applications between 1 April and 31 December 2022 compared with 4,965 during the same period during 2021/22, representing an increase of 3.1%. 2.13 The service continues to see a downward trend in the volume of changes in circumstances requests. From 1 April to 31 December a total of 60,618 changes were processed compared to 94,393 the previous financial year; a decrease of 35.8%. Discretionary Housing Payments 2.14 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. 2.15 As at 31 December 2022 the total paid in respect of Bedroom Tax was £5.233m. In comparison this sum was £5.352m as at the same point in 2021. 2.16 In addition the Council also receives £0.603m in respect of non-bedroom tax related issues. In June 2022, the Scottish Government provided an additional £0.131m of funding. This increased the annual budget to £0.734m. As at 31 December 2022 £0.698m (95%) has been paid or committed from the fund. 2.17 The Service will continue to liaise with colleagues in Housing Solutions and Housing Associations to encourage applications to the fund. Scottish Welfare Fund 2.18 The Council has administered the Scottish Government’s Scottish Welfare Fund (SWF) since 1 April 2016. 2.19 The Scottish Government provides an annual award budget of £2.760m to North Lanarkshire Council. In recognising the current cost of living crisis, the Council’s Investment Budget for 2022/23 allocated an additional £0.500m on a one-off basis. In addition, the Council allocated £1.142m on a one-off basis from the Scottish Government’s Financial Insecurity Fund to support the maintenance of Scottish Welfare Fund at Medium priority during 2022/23. Therefore, the total award budget for 2022/23 is £4.402m. 2.20 There are two grant schemes and their relative performance to date during 2022/23 and prior year comparison is as follows: Page 118 of 289
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2022/23 Applications Assessed Awards Unsuccessful Applications Acceptance Rate Crisis Grants 14,424 11,053 3,371 76.6% Community Care Grants 4,643 3,292 1,351 70.9% Total 19,067 14,345 4,476 75.% 2021/22 Applications Assessed Awards Unsuccessful Applications Acceptance Rate Crisis Grants 12,879 9,476 3,403 73.6% Community Care Grants 4,834 3,729 1,105 77.1% Total 17,713 13,205 4,508 74.5% 2.21 As at 31 December 2022, the total financial value of grants paid from the Scottish Welfare Fund amounted to £3.253m which represents 74% of the total budget for the current financial year. 2.22 The Council experienced a significant surge in demand during December 2022, largely linked to the period of cold weather. The higher demand continued into the early weeks in January 2023. The significantly increased demand created a challenge for the service in maintaining processing within legislative timescales. However, all available staff have been working to process applications as quickly as possible and as a result the service is now operating again at the timescales expected by Scottish Government guidance (2 working days for Crisis Grants and 15 working days for Community Care Grants). Self-Isolation Support Grant 2.23 On 12 October 2020, Scottish Government introduced a self-isolation support grant. The grant was initially intended to provide a £500 payment to those employed or self- employed on a qualifying benefit who will lose earnings as a result of being required to self-isolate and are unable to work from home. This scheme is being administered as a Crisis Grant. 2.24 The scheme was revised on 1 May 2022 to reflect changes in the public health advice relating to Covid-19 with the removal of asymptomatic testing on 18 April 2022 and symptomatic testing on 30 April 2022. Eligible applicants were then entitled to an award of £225 with it now being linked to the Real Living Wage. In addition, the Scottish Government introduced a three claim cap in a 12 month period. 2.25 In late December 2022 the Scottish Government confirmed the closure of the scheme to new applicants on 5 January 2023. Anyone who had booked a PCR test through the scheme portal on or before this date can apply for the grant up to 28 days from their positive PCR test result. 2.26 As at 31 December 2022, for the 2022/23 financial year the Council has received 1,343 applications and awarded a total of 672 with a combined value of £0.246m. Cost-of Living Support 2.27 The Policy and Strategy Committee on 29 September 2022 considered three separate cost-of-living support payments for low-income households. These are being administered by Financial Solutions. Page 119 of 289
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2.28 The Fuel Hardship Payment for working low-income households not in receipt of benefits or other government supports was launched in October. The funding available can support a maximum of 14,000 payments. 2.29 As at 18 January 2023, the Council had received 4,736 applications for the Fuel Hardship Payment with 4,150 assessed and 586 waiting to be assessed. Of those assessed 2,573 (62%) have been awarded totalling £0.386m and 1,242 have been rejected because the applicant was ineligible (30%). The Service continues to work through outstanding and new applications as quickly as possible. 2.30 The Pensioner Fuel Grant was initiated in November 2022 with the Council writing to 8,692 eligible households to provide bank details to ensure the £100 grant payment can be made directly to their bank accounts. 2.31 As at 18 January 2023, 4,381 payments have been made to eligible households (50%). For the remaining households the Council is processing returned mandates confirming bank account details with weekly payment runs to ensure the grant is received by eligible households as quickly as possible. 2.32 Finally, the North Lanarkshire Child Payment was processed in early November 2022 for the parents / guardians of 12,450 eligible children. 3. Measures of success 3.1 Continuous improvement in processing and collection rates. 4. Supporting documentation None Elaine Kemp Chief Officer (Finance) Page 120 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 121 of 289
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 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 122 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref: EK/NL Date: 01 March 2023 North Lanarkshire Properties: Re-Financing October 2023 From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 Executive Summary North Lanarkshire Properties LLP (NLP) current financial borrowing agreement with its current lender, Barclays Bank plc, ceases in October 2023 and a new funding arrangement requires to be put in place to fund the remaining balance of £33m. NLP appointed external financial advisers to support the internal project team and Azets were awarded the contract in December 2022. Documents are currently being prepared by the team at Azets to issue to lenders outlining the borrowing requirement and requesting terms for this. As part of the existing loan arrangement North Lanarkshire Council (NLC) provide an 80% guarantee. As part of the scoping documents being issued to lenders it would be beneficial to include confirmation of this guarantee going forward as this is anticipated to attract more lenders and potentially provide enhanced beneficial rates. Recommendations It is recommended that Finance and Resources Committee: 1. Acknowledge the requirement for NLP to progress a re-financing arrangement with an external lender in the region of £33m; 2. Acknowledge the current financial trading position of NLP; 3. Approve the continuation of the 80% guarantee from North Lanarkshire Council to North Lanarkshire Properties. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition Statement (3) Maximise the use of our marketable land and assets through improved development in business and industrial infrastructure AGENDA ITEM 8 Page 123 of 289
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1. Background 1.1. Following the decision by NLC in June 2012 to externalise its commercial property portfolio, North Lanarkshire Properties (NLP) LLP became operational from October 2013 with responsibility for marketing, leasing and managing the council’s commercial properties. 1.2. NLP acquired the council’s commercial properties in October 2013 by entering into a £45m loan agreement with Barclays Bank plc to finance the property transfer. The loan facility agreement was agreed for an initial 10-year period and is subject to an 80% guarantee being provided by the council. The loan agreement generated a capital receipt for the council and 968 properties transferred from the council’s commercial property portfolio to the new company. 1.3. This initial 10-year loan facility agreement between NLP and the current lender will terminate on 31 October 2023 and as such the company must now refinance its remaining borrowing requirements. 1.4. To support this re-financing project, NLP undertook a procurement exercise to engage financial advisers who specialise in this type of transaction. Azets submitted the most economically advantageous tender and have therefore been awarded the contract. Their role will be to assist the project team in preparing the scoping documents to be issued to prospective lenders, to review offers provided by lenders and ultimately assist with brokering the new loan arrangements. 1.5. On completion of this exercise a report will be presented to the NLP Management Committee and Finance and Resources Committee for consideration outlining the proposed terms of the future financial agreement from 1 November 2023 onwards. 2. Report 2.1. The Loan facility agreed with Barclays Bank plc in 2013 will end on 31st October 2023, at that point the outstanding balance will be approximately £33m. 2.2. A condition of the current loan agreement with Barclays Bank is an 80% guarantee provided by NLC. As part of their preliminary work the team at Azets have been reviewing the current loan agreement and have spoken to NLP’s Relationship Manager at Barclays Bank who advised that this 80% guarantee was considered the main collateral for the loan arrangement as opposed to the value of NLP’s estate. 2.3. The scoping documents for the initial approach to lenders are currently being prepared and Azets have advised that it would be beneficial to have confirmation of the Council guarantee within these. This guarantee is anticipated to realise more beneficial rates than could be expected without it and, similar to Barclays Bank’s position, lenders may use this as the loan collateral which could avoid a lengthy valuation process. 2.4. NLP has maintained a strong trading position over the last 10 years; Covid-19 had an impact on tenancy levels leading to a downturn in income and the use of reserves of £0.591m to fund a deficit in 2021/22. To reflect this position in 2022/23 the approved budget was set at deficit of £0.340m with this to be funded from reserves however due to improving income levels and effective cost management the projected outturn position is a surplus of £0.115m. 2.5. The company also has a strong balance sheet with net assets of £42.637m and an acid test ratio of 2.62:1 showing a positive liquidity position. There are useable reserves of over £3m and in addition there is a further £2.7m reserve which represents the working capital provided to NLP by NLC in 2013 which has never had to be utilised by the company. As part of the agreement with Barclays Bank a suite of financial reports are submitted to them quarterly, within this is a 12-month rolling cashflow statement which projects cash balances to range from £7.254m to £8.621m during the next 12 months. Page 124 of 289
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2.6. The team at Azets are confident that this trading position, along with a continuation of the 80% guarantee from North Lanarkshire Council will be sufficient to attract lenders to submit proposals for the required loan arrangement. 2.7. This risk to the Council in approving this 80% guarantee is reduced based on the outlined trading position and level of reserves held by the company. 2.8. Further information will be submitted to the Finance and Resources Committee in early course if there is a risk of this guarantee requirement materialising at any point during the remaining and future loan period. 3. Measures of success 3.1 Sourcing the required funds to finance North Lanarkshire Properties LLP for the remainder of the loan requirement. 4. Supporting documents N/A Elaine Kemp Chief Officer (Finance) Page 125 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Financial Guarantee of 80% would represent a risk to the Council of £26.4m over the remainder of the loan agreement. However based on the forecast trading position of the company and the reserves position it is unlikely that this guarantee would have to be utilised. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 126 of 289
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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 financial transactions have an element of risk however these are mitigated by the financial position outlined within the report along with the level of reserves held by North Lanarkshire Council. 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 127 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref EK / GT Date 01/03/23 Local Taxation Debt Write-Off 2022/23 From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 1. Background 1.1 For the financial year 2022/23, the Council has billed £196m Council Tax and Water Charges and £119m Non Domestic Rates charges. 1.2 The Council follows to best practice and legislation in relation to the recovery of outstanding charges for Council Tax (including water and sewerage charges) and Non Domestic Rates. This includes issuing reminder letters, agreeing payment plans with individuals and business and passing outstanding debt to the Council’s contracted Sheriff Officer, Walker Love, for further recovery action. 1.3 Despite these processes there are a number of debts that are deemed uncollectible. This annual process of assessing the likelihood of debt non-recovery conforms to Executive Summary The purpose of this report is to present to Committee the summary of outstanding local taxation accounts which are deemed uncollectible following all attempts at recovery. In accordance with financial guidelines a provision for credit losses has previously been established for the outstanding accounts. The total recommended for write-off for 2022/23 is £5,350,609.52. Recommendations It is recommended that Committee: (1) Acknowledge the decision of the Chief Officer (Finance) to write off £2,028,171.32 for debts under £500 under delegated responsibilities. (2) Approve the write off of all items over £500 to the value of £3,322,438.20. 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 AGENDA ITEM 9 Page 129 of 289
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accepted best accounting practice and reflects a reasonable assessment of expected income. 1.4 Despite the recommendation for write off, there will continue to be an appraisal of outstanding balances to re-assess those which are deemed uncollectible, especially where circumstances may have changed. 2. Report 2.1 An analysis of outstanding balances has been conducted and £5,350,609.52 has been identified as uncollectible: Cause Analysis Council Tax £ Non Domestic Rates £ Total £ Deceased 2,381,249.08 38,568.35 2,419,817.43 Liquidation / sequestration etc 1,149,152.94 1,781,639.15 2,930,792.09 Total 3,530,402.02 1,820,207.50 5,350,609.52 Value Analysis < £500 2,019,684.70 8,486.62 2,028,171.32 >£500 1,510,717.32 1,811,720.88 3,322,438.20 Total 3,530,402.02 1,820,207.50 5,350,609.52 2.2 The values written off during 2021/22 were as follows: Cause Analysis Council Tax £ Non Domestic Rates £ Total £ Deceased 479,977.91 20,462.77 500,440.68 Liquidation / sequestration etc 526,462.13 2,013,008.98 2,539,471.11 Total 1,006,440.04 2,033,471.75 3,039,911.79 2.3 Collection of local taxation is sought from all payees in the year of liability and subsequent years with use of diligence as appropriate. The level of in year collection is reported to each committee cycle and monitored on an ongoing basis. 2.4 Over time the collection of outstanding sums is prevented where there is no longer any legal basis to collect. This occurs where a person or business is subject to a sequestration, bankruptcy, winding-up or where the estate of the deceased has no funds to meet the debt and there is no other liable party. 2.5 The increase in the debt proposed for write off in the current financial year relates to a Financial Solutions decision to undertake a comprehensive review of accounts for write off going back to the 1993 Council Tax year. In previous years, the write off review was more focussed on recent Council Tax years. A further breakdown of the age profile of debt proposed for write off is shown in Appendix 1. Page 130 of 289
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2.6 Council Tax debt for years up to and including 2015/16 have been fully provided for and as such there is no costs to the Council associated with the write-off of these debts. For subsequent years, the Council has made an assessment of likely irrecoverable debts. This assessment is subject to ongoing review as part of regular monitoring of the Council Tax position and a consideration in completing the Council’s statutory accounts each year. 2.7 There is no cost of the Council in respect of the Non Domestic Rates write off as this is accounted for in the pooled funding arrangements with Scottish Government. 3. Measures of success 3.1 The Council continues to take all reasonable steps to recovery outstanding debt. 4. Supporting documentation Not applicable. Elaine Kemp Chief Officer (Finance) Page 131 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? The write off of more recent Council Tax debts has the potential to impact on the in year Council income position. However, this is subject to ongoing monitoring of the overall Council Tax position and will be finalised as the Council completes its statutory annual accounts for 2023/23. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 132 of 289
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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. Page 133 of 289
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Appendix 1 Proposed Local Taxation Write-Off Per Year Council Tax Non Domestic Rates Total Year Amount (£) Number Amount (£) Number Amount (£) Number 1993/94 21,469.34 105 0.00 0 21,469.34 105 1994/95 36,337.73 144 0.00 0 36,337.73 144 1995/96 51,663.07 165 0.00 0 51,663.07 165 1996/97 58,364.17 195 0.00 0 58,364.17 195 1997/98 74,650.09 266 0.00 0 74,650.09 266 1998/99 73,823.05 293 0.00 0 73,823.05 293 1999/00 78,279.26 314 0.00 0 78,279.26 314 2000/01 75,611.20 339 0.00 0 75,611.20 339 2001/02 78,433.46 366 778.91 2 79,212.37 368 2002/03 91,467.47 439 39.52 1 91,506.99 440 2003/04 102,965.84 472 0.00 0 102,965.84 472 2004/05 97,959.27 461 0.00 0 97,959.27 461 2005/06 122,481.03 553 294.35 1 122,775.38 554 2006/07 124,883.82 599 1,302.83 1 126,186.65 600 2007/08 135,955.43 610 3,920.46 3 139,875.89 613 2008/09 147,486.72 626 3,548.14 3 151,034.86 629 2009/10 167,719.89 690 8,596.28 2 176,316.17 692 2010/11 168,219.72 707 390.05 1 168,609.77 708 2011/12 226,007.19 928 729.87 2 226,737.06 930 2012/13 244,707.99 1,017 34,273.42 8 278,981.41 1,025 2013/14 239,194.61 956 98,072.15 5 337,266.76 961 2014/15 247,280.82 896 37,385.57 10 284,666.39 906 2015/16 221,386.75 859 115,891.04 20 337,277.79 879 2016/17 175,112.37 676 116,448.35 24 291,560.72 700 2017/18 161,859.39 626 371,834.98 65 533,694.37 691 2018/19 173,339.10 563 736,486.62 101 909,825.72 664 2019/20 84,083.02 235 235,532.91 40 319,615.93 275 2020/21 16,829.55 61 43,418.85 1 60,248.40 62 2021/22 7,894.02 36 5,586.00 1 13,480.02 37 2022/23 24,936.65 28 5,677.20 1 30,613.85 29 Total 3,530,402.02 14,225 1,820,207.50 292 5,350,609.52 14,517 Page 134 of 289
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☒ Yes ☐ No Ref SL / GT / AJ Date 15/02/23 Former Tenant Arrears Write Off to 31 March 2021 From Stephen Llewellyn, Chief Officer of Housing Management E-mail telferg@northlan.gov.uk Telephone Greg Telfer, Business Finance Manager, 01698 302836 Executive Summary The purpose of this report is to present to Committee a summary of outstanding Housing Rent debts which are deemed uncollectable following all attempts at recovery by the Housing Rents and Court teams or are considered uneconomically viable to continue pursuing. In accordance with financial guidelines a provision for expected credit losses has previously been established for the outstanding accounts highlighted below. The debt to be written off relates to former tenancies where the tenancy end date is prior to 31 March 2021. The total recommended write-off is £2,610,389.07 which equates to 1.82% of the total rent income of £143,783,000. Recommendations It is recommended that Committee: (1) Acknowledge the decision of the Chief Officer of Housing Management and the Chief Officer of Finance to write off £317,507.27 under delegated responsibilities; (2) Approves the write off of £2,292,882.10 which includes individual debts greater than £500; (3) Approves the write off of credit balances that have arisen in some former tenancy rent accounts, totalling £39,592.85; (4) Remit this report to the Finance and Resources Committee. The Plan for North Lanarkshire Priority Enhance participation, capacity, and empowerment across our communities Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions AGENDA ITEM 10 Page 135 of 289
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1. Background 1.1 The Housing Service has a turnover in tenancies each year of approximately 3,000 with tenancies terminating for a variety of reasons. 1.2 The Housing Service has a full rent arrears process in place ranging from reminder letters at the early stages through to the pursuit of arrears via the courts. The arrears process actively pursues debt in both current tenancies and former tenancies and only ever seeks to write-off debt relating to former tenancies once all avenues of recovery have been exhausted. 1.3 A whole range of payment methods are available to tenants to enable them to make payments towards their rents in a timely and consistent manner that suits their circumstances. These range from Direct Debits, Online Payment facility, Standing Orders, Post Office, Paypoint and deductions from wages. 1.4 Early intervention and engagement with current tenants who fall into arrears is a key part of the process to minimise the level debt that exist when tenancies terminate. 1.5 As a result of these proactive efforts, the Council’s collection rate improved from 99.51% in 2015/16 to 99.57% in 2016/17. However, the impact of Universal Credit in recent years has challenged this with collection rates reducing to 98.81% in 2017/18 and 97.46% in 2018/2019. Due to the efforts of the service in recovering historic debts, the equivalent figure for 2019/2020 figure was 100.45%. 1.6 Rent collection levels reduced to 97.9% in 2020/21 following the onset of the Covid-19 pandemic and remained at similar levels during 2021/22 at 97.8%. however, the arrears position has stabilised through the significant efforts from the Housing Rents team in securing more direct Universal Credit payments, pursuing other non-Universal Credit tenant debt and the ongoing benefits of the Universal Credit Assistance Fund and various rent relief funds made available over the last two financial years. 1.7 Despite these steps there are a number of debts that are deemed uncollectible or are considered not economically viable to engage further collection activities and costs. This annual process of assessing the likelihood of debt non-recovery conforms to accepted best accounting practice and is a realistic assessment of expected outcome. 1.8 The impact of various welfare reform measures has seen a significant increase in total rent arrears from 2013/14 onwards. North Lanarkshire Council moved onto full Universal Credit status in April 2018 and there has been a significant increase in current tenant arrears as a result. This is likely to an adverse impact of the future levels of former tenant arrears that will be sought for write off. A full Income Maximisation Service is offered to all tenants to try and mitigate the impact of welfare reform on them. 2. Report 2.1 An exercise has been undertaken to identify debt that is now considered to be non- collectable. In accordance with financial guidelines a provision for expected credit losses has previously been established for the outstanding accounts highlighted below. 2.2 There are a number of reasons why the outstanding balances are being written off and these are summarised below: a) Liquidation / Sequestration. The debtor has been liquidated / sequestered etc, and there is no prospect of recovery of funds. b) Deceased. The debtor is deceased and there have been insufficient funds within the estate to meet the sum due. Page 136 of 289
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c) Eviction / Abandonment / No Forwarding Address. The debtor has been unable to be located following eviction or abandonment of their tenancy or have left no forwarding address and there is no prospect of recovery of funds. d) Recovery exhausted. All avenues of recovery have now been exhausted via our internal processes and via the courts and the decision has been taken not to pursue any further any recovery is considered to be not possible. 2.3 The following tables categorise the value of debt recommended for write-off by cause and value: Cause Analysis Write-Off Value £ No of Tenancies Average Write- Off Value 2023 £ Average Write- Off Value 2022 £ Abandoned 442,890.73 296 1,496.25 1,611.67 Deceased 254,708.03 573 444.52 406.44 Eviction 72,940.30 31 2,352.91 2,860.40 Liquidations/Sequestrations 66,551.97 46 1,446.78 1,787.40 No forwarding address 220,804.67 258 855.83 864.71 Recovery exhausted 1,552,493.37 1,876 827.56 1,062.70 Total 2,610,389.07 3,080 847.53 1,132.82 Credit Balances (39,592.85) 339 (116.79) (35.0) Value Analysis Write-Off Value £ No of Tenancies Average Write- Off Value 2023 £ Average Write- Off Value 2022 £ < £500 317,507.27 1,933 164.26 185.93 >£500 2,292,882.10 1,147 1,999.03 2,118.45 Total 2,610,389.37 3,080 847.53 1,132.82 2.4 The write off being proposed to 31 March 2021 represents 1.82% of the total rental income of £143.783m. The following table outlines the value of the annual former tenant arrears write-off over the previous 5 years: Former Tenant Arrears Written Off to Value (£) % of income 31 March 2020 3,560,465 2.57 31 March 2019 3,505,183 2.54 31 March 2018 2,408,607 2.09 31 March 2017 1,518,109 1.36 31 March 2016 1,445,028 1.29 Page 137 of 289
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2.5 The previous tables highlight a reduction in the overall write off value up to 31 March 2021 compared to the peaks over the last two financial years. Importantly, it’s worth noting that the average value of the write-off has reduced for most categories and overall. This reflects the continued efforts of the Housing service over the last few years in relation to early engagement with tenants and offering the income maximisation service. It is hoped that this positive trend will continue. 2.6 The Council will continue to seek collection of the outstanding balance if the circumstances of the debtor alter and recovery is deemed practical. 3. Measures of success 3.1 The Service continues to engage in a number of activities aimed at improving collection rates, reducing debt arising and streamlining the recovery process. The Council will continue to seek collection of the outstanding balance if the circumstances of the debtor alter and recovery is deemed practical. 4. Supporting documentation Not applicable. Stephen Llewellyn Chief Office of Housing Management Page 138 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? There are no additional financial implications linked to this report for the current financial year because a corresponding bad debt provision has been included in the previous year’s accounts. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 139 of 289
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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. Page 140 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/NL/PF Date 01/03/23 Revenue Budget Monitoring Report; Chief Executives & Other Corporate Services 01.04.22 –06.01.23 (Period 10) From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939 280 601 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. Executive Summary This report provides a summary of the Chief Executive & Other Corporate Services financial performance for the period 1 April 2022 to 6 January 2023 (Period 10). The report illustrates the provisional outturn as at 31 March 2023, with major outturn variances highlighted and explained per the Council’s approved Financial Regulations. The Council approved its General Fund Revenue Budget on 17 February 2022, of which £96.226m currently represents the Net Revenue Budget for the Chief Executive & Other Corporate Services. The Service is currently projecting a favourable position of £1.171m for the financial year which includes £2.171m of approved COVID funding. Recommendations It is recommended that the Committee: (1) acknowledge the financial position of the 2022/23 Chief Executive & Other Corporate Services 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 AGENDA ITEM 11 Page 141 of 289
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2. Report 2.1 Summary of Financial Position 2.1.1 The Council approved its General Fund Revenue Budget on 17 February 2022, of which £93.565m (10.55%) represented the approved Revenue Budget for the Chief Executive & Other Corporate Services. Incorporation of the COVID Recovery budget of £2.171m and the realignment of Communities budgets have been included. Following a number of budget realignments throughout the year there is a revised budget for the service of £96.226m. 2.1.2 The overall projected outturn position of the Service is a favourable position of £1.171m. Appendices one to five provide further information in respect of this position. 2.1.3 In light of the ongoing impact of COVID-19 and other financial pressures, Services have been requested to continue to implement mitigating actions to ensure the position is managed and the Council remains financially sustainable. The mitigating action includes vacancy management and the curtailment of non-essential expenditure. 2.1.4 The 2022/23 budget incorporates a revised savings value of £0.361m previously approved by Council. 2.1.5 The Service is currently anticipating increased costs as a result of inflationary pressures within ICT contracts of £0.088m in the current year, however these costs can be managed within the current budget envelope. Future year increases will be addressed as part of the Budget Setting process. 2.2 Analysis of Significant Variances 2.2.1 Employee costs are anticipated to result in a year end net underspend of £0.403m, primarily as a result of vacancies and pensions charges. 2.2.2 Supplies & Services are projected to be underspent by £1.248m due to management action being taken within numerous contract lines and timing of the transition to Cloud based solutions across the council. 2.2.3 Income is currently projecting to under-recover by £0.522m. This is a result of continuing under-recoveries within licencing (liquor and taxi) due to the continuing impact of Covid-19, coupled with under-recoveries in internal recharges for areas such as printing and insurance and less grant income than was anticipated relating to the modern apprentice programme. 2.3 Earmarked and One-Off Resources 2.3.1 In finalising the Council’s draft accounts to 31 March 2022, the service was given approval to earmark £5.519m of resources to fund key projects and initiatives profiled over a number of years. Following several realignments during the year, along with identifying £1.362m to be deferred to future years there is a revised balance of £3.911m within the Chief Executive’s service. It is anticipated that £3.154m of the reserve balances will be utilised in 2022/23 with a total £0.757m of reserves identified as no longer required. 2.3.2 Details of the Service’s earmarked funds are provided in Appendix 4. 2.3.3 The Service has not yet incurred any VRS costs relating to savings/restructures. There is therefore no requirement to utilise any of the Corporate Change Management fund at this time. Costs arising from 2022/23 savings/restructures will be reported in future reports as they are incurred Page 142 of 289
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2.3.4 These costs are not included in the Service outturn position. 2.4 2022/23 Budget Savings 2.4.1 The 2022/23 budget incorporates £0.361m of savings approved by Council on 17 February 2022. 2.4.2 The Service has not fully implemented the approved 2022/23 savings however there has been management action taken to offset these in the current year: • Business and Digital – there has been a planned reduction of spend within Contract lines to support savings target of £0.198m, • POD – there has been a proactive approach to vacancy management to support the savings target of £0.163m in the current financial year. 2.4.3 Appendix 5 provides a summary of the savings, including commentary in relation to challenging savings and any actions taken to address the funding gap which has arisen. 2.5 Covid-19 Costs 2.5.1 The approved COVID Recovery Budget has been incorporated with an additional net expenditure budget of £2.674m provided. This reflects anticipated increased costs of £1.895m, and additional investment of £0.779m. The Service is currently projecting slippage of £0.770m to 2023/24 due to delays in recruitment of staff and has identified £0.009m of funding no longer required. Details of the Service’s COVID Budget are provided in Appendix 6. 2.6 Management Actions 2.6.1 The Service is being pro-active to ensure expenditure is contained within its approved 2022/23 budget. 3. Measures of success 3.1 The Service continues to operate within approved budget resources. 4. Supporting documentation Appendix 1 Objective Summary Appendix 2 Subjective Summary Appendix 3 Payments to Other Bodies Appendix 4 Earmarked Reserves Appendix 5 Budget Savings Appendix 6 COVID Recovery Budget Elaine Kemp Chief Officer (Finance) Page 143 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Service is being pro-active to ensure expenditure is contained within its approved 2022/23 budget. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 144 of 289
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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 2022/23. To minimise risk this report has been prepared by service based Financial Solutions 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 145 of 289
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APPENDIX 1 [1] [2] [3] [5] [6] [8] [9] [10] DIRECTORATE & SUPPORT 628,972 616,598 12,374 FAV 874,841 852,804 22,037 FAV 2.5% (212) FINANCIAL SOLUTIONS 17,870,165 17,856,054 14,111 FAV 45,590,644 45,575,304 15,340 FAV 0.0% 6,321 AUDIT & RISK 486,399 457,445 28,953 FAV 579,364 545,285 34,079 FAV 5.9% 2,734 Underspend due to vacancies LEGAL & DEMOCRATIC SOLUTIONS 1,763,058 1,987,391 (224,333) ADV 2,155,476 2,394,687 (239,211) ADV (11.1%) 335 Under recovery in relation to postage and printing income, legal insurance fee and registrars and overspend associated with the opening / closure of Civic Centre partially offset by underspends within Employee costs, printing and postages BUSINESS & DIGITAL 12,766,239 12,216,750 549,488 FAV 17,404,666 16,797,175 607,491 FAV 3.5% 357,500 Increased underspends within contract lines and vacancies within employee costs partially offset by one- off costs associated with WIPRO insourcing. PEOPLE & ORGANISATIONAL DEVELOPMENT 6,874,202 6,687,283 186,920 FAV 8,142,731 7,896,840 245,892 FAV 3.0% 143,011 Underspends due to vacancies partially offset by turnover plus receipt of Young Persons Guarantee Grant income within MA programme resulting in increased underspend within the core programme. STRATEGIC COMMUNICATIONS 4,204,093 4,108,424 95,669 FAV 5,156,219 5,025,049 131,170 FAV 2.5% 13,031 Vacancies across the service and underspends within admin, travel costs and supplies and services. OTHER CORPORATE SERVICES 2,566,608 2,256,969 309,639 FAV 3,684,556 3,330,210 354,346 FAV 9.6% 18,328 Underspends in transitional relief no longer applied to CLNL properties, Pension Increases / DLO Pension charges, staff travel and admin costs partially offset by increased costs for ICT purchases for newly elected members. JOINT BOARDS 9,491,805 9,491,805 0 12,637,971 12,637,971 0 0.0% 0 NET EXPENDITURE 56,651,540 55,678,718 972,822 FAV 96,226,468 95,055,324 1,171,144 FAV 1.2% 541,048 FAV = Favourable Variation, underspend etc ADV = Adverse Variation, overspend etc NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Objective Analysis Period 10 (01 April 2022 - 06 January 2023) A - Chief Executive's DIVISION OF SERVICE BUDGET TO DATE ACTUAL TO DATE YEAR TO DATE VARIANCE ANNUAL BUDGET [4] [7] PROJECTED OUT-TURN VARIANCE PROJECTED OUT-TURN % PERIOD MOVEMENT ANALYSIS Page 146 of 289
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APPENDIX 2 [1] [2] [3] [5] [6] [8] [9] [10] EMPLOYEE COSTS 27,856,604 27,464,727 391,877 FAV 38,287,387 37,884,572 402,815 FAV 1.1% 161,789 Underspend due to vacancies across all services. PROPERTY COSTS 1,800,298 1,844,848 (44,550) ADV 2,267,111 2,330,676 (63,565) ADV (2.8%) 9,000 SUPPLIES & SERVICES 9,302,711 8,346,400 956,311 FAV 10,563,672 9,315,689 1,247,983 FAV 11.8% 256,680 Underspend primarily within Business and Digital due to advancement of budget to support the transition to Cloud based solutions. TRANSPORT & PLANT 90,153 57,939 32,215 FAV 164,671 122,355 42,316 FAV 25.7% 12,713 Decreased staff travel across all areas and spend within school holiday club transport. ADMINISTRATION COSTS 4,044,269 4,032,962 11,307 FAV 6,691,950 6,648,226 43,724 FAV 0.7% 10,601 PAYMENTS TO OTHER BODIES 12,449,728 12,363,679 86,049 FAV 17,976,333 17,882,709 93,624 FAV 0.5% 81,000 TRANSFER PAYMENTS 60,099,096 60,092,886 6,210 FAV 111,404,054 111,395,354 8,700 FAV 0.0% 0 CAPITAL FINANCING COSTS 500,000 500,000 0 4,072,342 4,072,342 0 0.0% 0 REVENUE FINANCING COSTS 0 0 0 0 0 0 0.0% 0 OTHER EXPENDITURE 3,147,539 3,210,177 (62,638) ADV 3,847,047 3,929,857 (82,810) ADV (2.2%) (60,959) TOTAL EXPENDITURE 119,290,398 117,913,617 1,376,781 FAV 195,274,566 193,581,780 1,692,788 FAV 0.9% 470,824 INCOME (62,638,858) (62,234,899) (403,959) ADV (99,048,101) (98,526,456) (521,645) ADV 0.5% 70,224 Under recovery in L&D postage and printing income, legal insurance fee and registrars, Learning Centre partially offset by receipt of Young Persons Guarantee Grant (MA programme) plus other minor over- recoveries. NET EXPENDITURE 56,651,540 55,678,718 972,822 FAV 96,226,466 95,055,324 1,171,142 FAV 1.2% 541,048 FAV = Favourable Variation, underspend etc ADV = Adverse Variation, overspend etc [4] [7] PROJECTED OUT-TURN VARIANCE PROJECTED OUT-TURN % PERIOD MOVEMENT ANALYSIS NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Subjective Analysis Period 10 (01 April 2022 - 06 January 2023) A - Chief Executive's CATEGORY BUDGET TO DATE ACTUAL TO DATE YEAR TO DATE VARIANCE ANNUAL BUDGET Page 147 of 289
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APPENDIX 3 [1] [2] [3] [5] [6] [8] [9] [10] PAYMENTS TO OTHER BODIES GENERAL 310,438 234,169 76,269 FAV 915,378 834,378 81,000 FAV 8.9% 81,000 Underspend as a result of reduced by-election costs plus a reduction in social media account costs MEDICAL FEES 724 724 0 9,637 9,637 0 0.0% 0 AGENCY FEES 19,633 19,633 (1) ADV 81,542 81,542 0 0.0% 0 TOWN TWINNING 2,720 1,283 1,437 FAV 3,533 3,533 0 0.0% 0 CHILDRENS PANEL 3,767 5,204 (1,436) ADV 25,035 25,035 0 0.0% 0 COSLA ANNUAL LEVY 195,000 192,376 2,624 FAV 195,000 192,376 2,624 FAV 1.4% 0 COMMUNITY COUNCIL GRANTS 80,696 73,540 7,156 FAV 158,629 148,629 10,000 FAV 6.3% 0 GRANTS TO ORGANISATIONS 895,706 895,706 0 1,129,625 1,129,625 0 0.0% 0 EXTERNAL AUDIT FEE 0 86 (86) ADV 529,389 540,526 (11,137) ADV (2.1%) 0 ELECTION PROVISION 0 0 0 0 0 0 0.0% 0 TOURISM - VISIT NORTH LANARKSHIRE 20,998 20,998 0 37,000 37,000 0 0.0% 0 SCOTTISH WELFARE FUND 3,069,177 3,069,177 0 4,402,115 4,402,115 0 0.0% 0 SUB-CONTRACTOR PAYMENTS 0 0 0 1,869 1,869 0 0.0% 0 LOCAL TAX PAYPOINT COMMISSION 15,064 15,064 0 35,000 35,000 0 0.0% 0 COSLA MIGRATION SCOTLAND 112,500 150,000 (37,500) ADV 150,000 150,000 0 0.0% 0 LANDS VALUATION CONTRIBUTION 1,579,434 1,577,190 2,244 FAV 2,105,910 2,105,910 0 0.0% 0 SPT CONTRIBUTION 4,089,840 4,068,684 21,156 FAV 5,453,118 5,453,118 0 0.0% 0 SPT CONCESSIONARY FARES CONTRIBUTION 429,708 428,930 778 FAV 572,943 572,943 0 0.0% 0 CUSTOMER FIRST CONTRIBUTION 1,624,323 1,611,000 13,323 FAV 2,700,000 2,700,000 0 0.0% 0 TOTAL EXPENDITURE 12,449,728 12,363,766 85,964 FAV 18,505,722 18,423,235 82,487 FAV 0.5% 81,000 FAV = Favourable Variation, underspend etc ADV = Adverse Variation, overspend etc [4] [7] PROJECTED OUT-TURN VARIANCE PROJECTED OUT-TURN % PERIOD MOVEMENT ANALYSIS NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Payments to Other Bodies Period 10 (01 April 2022 - 06 January 2023) A - Chief Executive's CATEGORY BUDGET TO DATE ACTUAL TO DATE YEAR TO DATE VARIANCE ANNUAL BUDGET Page 148 of 289
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APPENDIX 4 Value % Service Specific Earmarked Reserves: PWC VAT FS 27 0 27 27 27 100.0% 0 27 Support Plan for North Lanarkshire L&D 100 (67) 33 0 33 100.0% 0 33 0 0 0 0 0 0 0% 0Digital Savings L&D 45 0 45 45 45 100.0% 0 45 0 0 0 0 0 0 0% 0Digitisation Reserve B&D 2,499 (607) 1,892 767 1,135 60.0% 757 1,135 Budget required in 2023/24. £757k was incorrectly carried forward into 2022/23 budget. 0 0 0 0 0 0 0% 0Digital Savings B&D 1,000 (1,000) 0 0 0 0.0% 0 0 0 0 0 0 0 0 0% 0Family Firm POD 173 (173) 0 0 0 0.0% 0 0 Creation of Learning Academy POD 100 0 100 0 100 100.0% 0 100 0 0 0 0 0% 0Creation of Construction Academy POD 300 (200) 100 0 100 100.0% 0 100 0 0 0 0 0 0 0% 0ESC Resources Reserve POD 154 (61) 93 66 93 100.0% 0 93 0 0 0 0 0 0 0% 0Digital NL Post POD 36 0 36 25 36 100.0% 0 36 Customer Services Hub SC 212 (82) 130 97 130 100.0% 0 130 0 0 0 0 0 0 0% 0Customer Services Hub SC 50 (50) 0 0 0 0.0% 0 0 0 0 0 0 0 0 0% 0Cumbernauld Theatre SC 35 0 35 0 35 100.0% 0 35 0 0 0 0 0 0 0% 0VANL (New) SC 60 0 60 60 60 100.0% 0 60 LDP Prog Play Areas and additional projects SC 500 0 500 500 500 100.0% 0 500 0 0 0 0 0 0% 0Recover NL - grant award prog SC 172 (172) 0 0 0 0.0% 0 0 Service has prioritised spend against Growth funds of £150k Cost of Living EMR SC 450 0 450 214 450 100.0% 0 450 Cost of Living EMR (comms) SC 15 0 15 7 15 100.0% 0 15 0 0 0 0 0 0 0% 0Ukraine Humanitarian Appeal MM 15 0 15 15 15 100.0% 0 15 0 0 0 0 0 0 0% 0Pakistan Flood Appeal MM 15 0 15 15 15 100.0% 0 15 Change Management / Non-Service Specific: 0 0 0 0 0 0.0% 0 0 CLNL Insourcing POD / B&D 168 62 230 168 230 100.0% 0 230 0 0 0 0 0 0 0% 0CLNL ICT Development B&D 135 0 135 0 135 100.0% 0 135 TOTAL 6,261 (2,351) 3,911 2,008 3,154 80.6% 757 3,154 DESCRIPTION OF EARMARKED RESOURCE DIVISION Reserve Allocation Adjustments In Year Approved Reserve Total Spend to Date Projected Spend Reserves No Longer Required Reserves Required In Year Commentary Regards Usage NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Status of Earmarked Reserves A - Chief Executive's FINANCIAL YEAR 2022/23 Period 10 (01 April 2022 - 06 January 2023) Page 149 of 289
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APPENDIX 5 £000 £000 £000 £000 £000 Digital NL B&D 198 0 198 Management action taken within contract lines in current year 198 0 Reduction of ESC Admin posts POD 163 0 163 WSCG (09/12/22) approved restructure which will be fully implemeneted by 01/04/23. Vacancy management action to support the savings target in the current year. 163 0 Restructure approved 09/12/22. FY saving will be achieved in 2023/24 TOTAL 361 0 361 361 0 NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Savings Period 10 (01 April 2022 - 06 January 2023) A - Chief Executive's CommentaryDESCRIPTION OF APPROVED SAVING DIVISION Target Value Value Deliverable Saving Gap APPROVED SAVINGS REPLACEMENT SAVING / FUNDING DESCRIPTION Value BUDGET GAP Page 150 of 289
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APPENDIX 6 £000 £000 £000 £000 Costs: Increased Costs 1,895 1,665 230 (26) Underspends in Employee Costs / overtime relating to Covid and Cost of Living Grants and Recover NL programmes. Service has identified funding for Webex Licences (£0.007m) is no longer required Reduced Costs 0 0 0 0 Lost Income 0 0 0 0 Income Over-Recovery 0 0 0 0 Delay in Achievement of Savings 0 0 0 0 Unavoidable Investment Commitments 0 0 0 0 Other 0 0 0 0 Investment Proposals Agreed 779 229 549 0 Extension of Recover NL staff to 31/08/2023, funding required in 2023/24 Contingencies 0 0 0 0 Service Costs Total 2,674 1,895 779 (26) Income: Earmarked COVID Funding (2,674) (1,895) (779) 26 Service Contributions 0 0 0 0 NLC Use of Reserves 0 0 0 0 21/22 COVID Funding - GRG 0 0 0 0 21/22 COVID Funding - RF 0 0 0 0 Service Income Total (2,674) (1,895) (779) 26 TOTAL NET COSTS 0 0 0 0 NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Forecast COVID-19 Costs Period 10 (01 April 2022 - 06 January 2023) A - Chief Executive's CommentaryDESCRIPTION OF COVID-19 COSTS BUDGET PROJECTED OUT-TURN PROJECTED OUT-TURN VARIANCE PERIOD MOVEMENT Page 151 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/NL/PF Date 01/03/23 Chief Executive Service – Capital Monitoring Report 1 April to 6 January 2023 (Period 10) From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939 280 601 Executive Summary This report highlights the financial performance and provisional outturn of 2022/23 Chief Executive capital programme for the period ended 6 January 2023 (Period 10). In summary the Service has a total capital budget of £14.289m, comprising of £10.470m within Business and Digital and £3.819m within Communities. CMT (11 October 2022) approved capital budget reductions across all services, per the recommendations of the Capital Investment Programme Review. This will result in a reduction of £0.490m within Business and Digital and £4.016m within Communities over the remaining program. Subject to approval at SCDG, Business and Digital have identified a reduction of £0.206m and Communities identifying a reduction of £1.000m within 2022/23, with the balance of £3.300m to be reprofiled over future years. The Service is currently projecting year end variance of £3.629m (£1.000m within Business and Digital and £2.629m within Communities), which includes the proposed Capital Investment Programme Review budget reduction of £1.206m. Further explanation of project variances and management action taken by the Service is included within the main report and attached appendices. Recommendations It is recommended that the Committee: (1) Considers the financial position of the 2022/23 Chief Executive capital programme. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning AGENDA ITEM 12 Page 153 of 289
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1. Background 1.1 This report provides a summary of the Chief Executive Service financial performance for the period 1 April 2022 to 6 January 2023 (Period 10). The report illustrates the provisional outturn as at 31 March 2023, with major outturn variances highlighted and explained per the Council’s approved Financial Regulations. 1.2 The Council approved its Capital 5-year programme at Policy and Strategy Committee on 18 March 2021 with an allocated budget of £13.036m for the current year. Following a number of realignments, the allocation of growth funding and reprofiling budgets to future years the revised Capital Programme is £14.249M for the 2022/23 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, Executive Directors 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 Summary of Financial Position 2.1.1 The service is currently projecting an underspend of £3.629m within the current financial year, inclusive of the proposed Capital Investment Programme Review budget reduction of £1.206m. A request to reprofile £2.423m within the Composite Capital Programme will be presented to SCDG (February 2023). Actual budget movements are explained in more detail in Section 2.2 below. In addition, capital budgets and expenditure are detailed in Appendix 1 and a summary of proposed budget reprofiling requests in Appendix 2. 2.2 Analysis of Significant Variances 2.2.1 A explanation of variances within Business and Digital is detailed below: • Digitisation & Innovation The budget for this theme is £7.462m with an updated projected spend of £7.222m by 31 March 2023. The current year spend to date per the ledger is £3.997m with a projected committed spend of £7.167m. The current projection has resulted in a reprofiling request of £0.240m. • Line of Business (LOB) This theme has been reprofiled to £1.504m with a year-end projection of £1.044m. The actual year to date spend is low due to timing issues. Current spend is £0.323m with committed spend of £0.892m. A projected underspend of £0.460m is being reported to reflect the reprofiling request this period, which includes the proposed £0.006m reduction relating to the Capital Investment Programme Review. • End User Device (EUD) The budget is £1.504m with spend and commitments totalling £1.194m. A projected underspend of £0.300m is being reported to reflect the reprofiling request which includes the proposed £0.200m reduction relating to the Capital Investment Programme Review. 2.2.2 Challenges facing the Service throughout financial year 2021/22 in respect of lengthy delivery times and competing resourcing have continued into 2022/23. Business and Page 154 of 289
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Digital therefore reviewed projections and requested £4.424m be reprofiled to later years, better reflecting the likely phasing of project costs. Work packages aligned to the DigitalNL programme continue to be closely monitored to ensure they remain within the available capital investment. 2.2.3 An explanation of variances within Communities is detailed below: The Communities budget reduction in relation to the Capital Investment Programme Review is £4.016m over the remaining years of the programme with appropriate substitutions being identified from alternative funding sources. The Service are therefore proposing to remove £1.000m from the 2022/23 budget, subject to SCDG approval, leaving a reduction of £3.016m from future years. The Service has actual spend and commitments amounting to £0.803m and is projecting spend at year end of £1.190m resulting in a year end variance of £2.629m, which includes the proposed £1.000m reduction relating to the Capital Investment Programme Review. This is due to challenges faced in obtaining bids for tendered projects and contractors unable to deliver projects within previously agreed timeframes. Expenditure on these projects will not therefore be incurred until 2023/24. 2.3 Management Actions 2.3.1 The service will continue to review phasing of associated programmes with updates being provided to the SCDG, DigitalNL Board and Committee accordingly 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 4.1 Appendix A Summary Expenditure by Project / Theme Elaine Kemp Chief Officer (Finance) Page 155 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Service aims to operate within approved funding levels across the term of the programme and utilise budget virements to support emerging issues. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 Page 156 of 289
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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 managed 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 service based Financial Solutions 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 157 of 289
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Appendix 1 Chief Executives Capital Programme 2022/23 Thematic Expenditure Summary 1st April 2022 - 6th January 2023 (Period 10) Theme Budget £ Actual £ Committed £ Uncommitted £ Projected Outturn £ Outturn variance £ Digitisation & Innovation 7,461,528 3,997,390 7,167,323 54,205 7,221,528 240,000 Line of Business (LOB) System Portfolio 1,504,322 323,181 892,038 152,249 1,044,287 460,035 End User Device (EUD) Refresh 1,503,902 68,514 1,193,800 10,102 1,203,902 300,000 TOTAL BUSINESS and DIGITAL 10,469,752 4,389,085 9,253,161 216,556 9,469,717 1,000,035 COMMUNITIES Community Board Project Investment Fund 3,819,345 665,100 803,422 386,493 1,189,915 2,629,430 TOTAL COMMUNITIES 3,819,345 665,100 803,422 386,493 1,189,915 2,629,430 TOTAL CHIEF EXECUTIVES 14,289,097 5,054,185 10,056,583 603,049 10,659,632 3,629,465 YTD OUTTURN Page 158 of 289
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Appendix 2 SUMMARY OF PROPOSED BUDGET REPROFILING/ACCELERATION REQUESTS Amount Category From To Service: Chief Executives £ Re-profiling to future years Business & Digital: Digitisation & Innovation (240,000) 3 Digitisation & Innovation (Year 2) Digitisation & Innovation (Year 3) Line of Business (LOB) System Portfolio (197,550) 3 Line of Business (LOB) System Portfolio (Year 2) Line of Business (LOB) System Portfolio (Year 3) Line of Business (LOB) System Portfolio (256,685) 3 Line of Business (LOB) System Portfolio (Year 2) Line of Business (LOB) System Portfolio (Year 4) End User Device (EUD) Refresh (Year 2) (100,000) 3 Total Business & Digital (794,235) Community Boards Community Board Project Investment Fund (1,629,430) 3 Community Board Project Investment Fund (Year 2) Community Board Project Investment Fund (Year 3) Total Community Boards (1,629,430) Total reprofiling to Future Years (2,423,665) Capital Investment Programme Review Business & Digital: Line of Business (LOB) System Portfolio (Year 2) (5,800) 2 Reduction approved by CMT End User Device (EUD) Refresh (Year 2) (200,000) 2 Reduction approved by CMT End User Device (EUD) Refresh (Year 3) (232,237) 2 Reduction approved by CMT End User Device (EUD) Refresh (Year 4) (51,763) 2 Reduction approved by CMT Total Business & Digital (489,800) Community Boards Community Board Project Investment Fund (Year 2) (1,000,000) 2 Reduction approved by CMT Community Board Project Investment Fund (Year 3-5) (3,016,000) 2 Reduction approved by CMT Total Community Boards (4,016,000) Total Chief Executive - net movement (6,439,665) Page 159 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref; EK/KS Date 01/03/23 Revenue Monitoring Report Council Summary 1 April 2022 to 6 January 2023 From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939280601 Executive Summary This report updates the Finance and Resources Committee on the overall position for the General Fund Account, Housing Revenue Account and Adult Health and Social Care, for the financial year to 31 March 2023. 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 17 February 2022. Following notification from Scottish Government of further funding made available to local authorities and the reallocation of Scottish Child Payments Grant as Agency managed grants the budget has been revised to £886.197m. The Council is currently projecting a surplus of £11.937m which will be earmarked to support future budget pressures resulting in break-even position shown against budget. It should be noted that this position reflects a net £5.531m overspend attributable to inflationary pressures experienced across services. However, resources totalling £10.147m have been provided through a combination of corporate budgetary provision and use of reserves to help manage these increased costs, which offset the forecast overspends, leaving a balance of £4.616m to support any further pressures not yet realised. It should also be noted that services are required to continue to take action to help manage the overall position including managing vacancies and curtailing non- essential expenditure. The 2022/23 budget incorporates £10.484m of net savings with resources of £3.372m set aside to manage the impact of delayed implementation, reducing the current year target to £7.112m. It is projected that £5.417m of the current year target (76%) will be delivered within the financial year, with replacement savings identified to fully address the shortfall. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the financial position of the 2022/23 revenue budget; and (2) Otherwise endorse the contents of this report. AGENDA ITEM 13 Page 161 of 289
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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 Summary of General Fund Financial Position 2.1.1. At its meeting of 17 February 2022, the Council approved a General Fund Revenue Budget of £887.270m. This included spend which is offset by ring fenced grants of £50.126m resulting in an opening budget position for Net Service Expenditure of £837.144m. Additional funding has since been confirmed as part of the Scottish Government budget setting, including additional directed funding for Adult Social Care, Free School Meal Expansion monies, Local Heat and Energy Efficiency Strategy funding and additional DHP funding offset by a reallocation of Scottish Child Payments Grant to agency managed grants resulting in an overall total budget of £886.197m. 2.1.2. Following the budget setting in February the Council has an approved savings target £10.484m for 2022/23. However, £2.000m of one-off resources have been set aside from General Fund reserves to manage the financial impact of the delayed implementation of the Active and Creative Communities saving of £3.058m, and £1.372m has been earmarked from the IJB reserves in respect of the delayed closure of the Muirpark facility. These actions reduce the overall savings requirement in 2022/23 to £7.112m. Further detail can be found in Section 2.3 below. 2.1.3. The following table summarises the projected income and expenditure position which illustrates a projected surplus of £11.937m earmarked for future budget pressures: Annual Budget (£m) Projected Outturn (£m) P10 Variance (£m) P6 Variance (£m) P6 to P10 Movement (£m) Expenditure Total Expenditure 886.197 874.260 11.937 (0.538) 12.475 Income Aggregate External Finance 722.147 722.147 - - - Local Tax Collection 158.050 158.050 - - - Use of Balance 6.000 6.000 - - - Total Income 886.197 886.197 - - - Projected variance: (Surplus)/Deficit at 31 March 2023 - (11.937) 11.937 (0.538) 12.475 Earmarked for future budget pressures - 11.937 (11.937) - (11.937) Surplus/(Deficit) at 31 March 2023 Post Reserve Allocation - - (0.538) 0.538 Table 1 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 Page 162 of 289
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2.2. Analysis of Significant Variations 2.2.1. Table 2 below illustrates the projected outturn financial position of services: Service P10 Outturn (£m) P6 Outturn (£m) P6 to P10 Movement (£m) Education Children and Families (3.563) Overspend (5.144) Overspend 1.581 Enterprise and Communities (3.341) Overspend (3.959) Overspend 0.618 Chief Executives and Other Corporate Services 1.171 Underspend 0.353 Underspend 0.818 Social Work (Non-Integrated) - On Budget - On Budget - Executive Services Total (5.733) Overspend (8.750) Overspend 3.017 Financing Costs 7.000 Underspend - On Budget 7.000 Budget Assumptions 8.066 Underspend 2.927 Underspend 5.139 Use of Reserves (inflation) 2.604 Over Recovery 5.285 Over Recovery (2.681) Total Projected Surplus/(Deficit) 11.937 Underspend (0.538) Overspend 12.475 Earmarked for future budget pressures (11.937) Overspend - On Budget (11.937) Total 0.000 On Budget (0.538) Overspend 0.538 Table 2 2.2.2. Education, Children and Families is reporting a projected overspend of £3.563m. There is a projected overspend in property costs of £5.586m largely due to an anticipated increase in utilities/energy costs due to inflationary pressures (£5.300m) and other overspends (£0.286m), a projected overspend in transport costs of £5.513m largely due to ongoing demand pressures within ASN transport (£2.678m) and increases to mainstream transport contract rates(£2.810m). There is also a projected increase in payments for ASN placements of £0.329m and Family Placements of £0.579m due to cost pressures associated with External Fostering and Kinship Care Placements and a projected under recovery in income of £1.227m due to reduced membership and visitor fees for Active and Creative Communities. These are partially offset by a projected reduction in employee costs of £6.914m, largely due to delays in recruitment and establishment of staffing models, projected underspends in other expenditure of £0.826m, supplies and services of £1.822m and administration costs of £0.012m predominately due to management action and curtailment of non-essential expenditure. 2.2.3. Enterprise and Communities is projecting an overspend of £3.341m, largely due to inflationary pressures of £2.625m in relation to utilities, food, fuel, materials and waste tonnage. There are also forecast increased non-inflationary related costs of £3.239m Page 163 of 289
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mainly due to delay in the achievement of office rationalisation savings (£0.580m), increased use of agency staff to support waste collection due to ongoing recruitment difficulties (£0.535), increased requirement in vehicle leasing and hire costs (£0.432m) and vehicle parts (£0.117m), increase in costs in relation to charging of electric vehicles (£0.539m), overspend in consultancy costs (£0.253m) and a number of other expenditure cost pressures (£0.783m). These overspends are partially offset by a £1.988m underspend in Employee costs due to vacancies across the services, an over recovery in income of £0.345m and a number of smaller underspends across a number of budget headings. 2.2.4. Chief Executives and Other Corporate Services are projecting an underspend of £1.171m, primarily due to lower than budgeted contract costs as a result of a delay in transferring to a cloud environment, thus reducing the forecast cloud consumption costs by £1.248m, an underspend in employee costs of £0.403m in relation to vacancies, savings and minor savings across a number of other budget headings, as a rest of management action, offset by a £0.522m under recovery in income in the areas of licencing (liquor and taxi) and internal recharges such as insurance and printing. 2.2.5. Prudent management of the Council’s borrowing and cashflow position, as well as reflecting the latest forecast expenditure on the capital programme, is estimated to generate a one-off underspend of £7.000m. In addition, members are advised that consideration is currently being given to the implementation of the option of a loan debt holiday, which is one of the fiscal flexibilities introduced by the Scottish Government, initially to support the cost of COVID. Further details are outlined in the Treasury Management Strategy report to this Committee. If implemented this will generate a further one-off saving in 2023/24. However, it should be noted that this does not change the overall debt to be repaid and any benefit generated will need to be repaid within the shorter of either the remaining period of the loans fund advance or twenty years. The decision on this will be reviewed as part of the year end closedown. 2.2.6. Within the services’ financial positions shown above, unmanaged inflationary overspends totalling £5.531m have been reported. However, officers will recall resources totalling £10.147m have been provided through a combination of budgetary provision and use of reserves to help manage the increased costs arising from higher inflation rates. Therefore, there is an offsetting drawdown of £5.531m from such resources, leaving a balance of £4.616m to support any further pressures not yet realised. 2.2.7. An underlying reported underspend of £8.066m is reported within budget assumptions, which reflects the release of resources held in relation to budget assumptions now not anticipated to be realised. This includes resources held for inflation noted in 2.2.6 above along with £1.411m in relation to the reversal of increased employer national insurance contributions from November 2022, and £0.657m in relation to the teacher strike action days (24 November and 7 December). 2.2.8. The net surplus of £11.937m will be earmarked to support future budget pressures. Therefore, a breakeven position is reported for 2022/23. 2.2.9. Given the volatility of the economy, Government policy announcements and market conditions, it is very difficult to accurately assess the impact of inflation across the Council. Whilst the Council has identified funds to assist with offsetting the impact of inflation within the current year, it continues to be vitally important that services curtail all non-essential expenditure to support the Council’s overall management of this significant risk in future years. Page 164 of 289
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2.3. 2022/23 Budget Savings 2.3.1. As outlined in paragraph 2.1.2 above, the Council has approved net savings of £10.484m for 2022/23. After taking account of the £3.372m one-off resources set aside to manage the delayed implementation of savings, the overall savings target is £7.112m. Each Service reports on the achievement of their savings within the relevant Services’ monitoring report. It is projected that £5.417m of savings (76%) will be achieved in the current year. It is anticipated that the remaining in year gap of £1.694m will be fully mitigated by replacement savings and implemented in full in future years. 2.4. Earmarked Reserves and Change Management Fund 2.4.1. The Council’s audited annual accounts highlight a General Fund reserve balance of £236.264m. This balance includes £8.000m for the Contingency Reserve. There is also a total of £170.444m earmarked for specific future commitments including £31.054m in relation to COVID and £54.175m to support the future contractual obligations in respect of PPP schools, following a change in presentation in respect of such balances, as discussed and agreed with Audit Scotland. A further £29.424m has been allocated 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 strategic financial plan. This leaves £28.396m of unallocated balances. 2.4.2. A total of £103.630m of earmarked reserves are profiled for use in 2022/23 with a further £66.814m profiled for use in future years. It is currently projected that £97.742m of the 2022/23 earmarked reserves will be spent during this financial year with £4.872m anticipated to be required in future years and reserves of £1.016m deemed no longer required. A summary position in respect of the above is shown in Appendix 2. 2.4.3. The unallocated reserves will change depending on overall financial performance year on year, unexpected commitments and to account for future drawdowns from the capital fund. Therefore, reflecting the current year break-even forecast, commitments during the year of £0.819m, earmarked reserves no longer required of £1.016m and the capital fund drawdown of £0.396m, the unallocated General Fund balance is currently forecast to reach £30.347m by the financial year end. Appendix 3 summarises this position. 2.5. Risks and Uncertainty 2.5.1. 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 such as the rising forecast of pay and non-pay inflation, on-going COVID impact, the cost of living crisis and other external factors, have the potential to impact upon the Council’s ability to provide quality services within approved budget levels. 2.6. Housing Revenue Account 2.6.1. The Housing Revenue Account is currently projecting an underspend of £1.067m for the financial year. There is an underspend in employee costs of £1.400m largely due to vacancy savings in conjunction with reversal to increased national insurance rates, an underspend in financing costs of £1.643m due to proactive treasury management activity reducing average loans funds interest rates and lower than anticipated capital expenditure 2021/22 outturn, an anticipated underspend in ambitions funding of £1.107m and a smaller underspend within Admin Costs of £0.180m. These are largely offset by an overspend in property costs of £2.607m relating to an increase in repairs costs (£2.000m), utilities overspends (£0.337m) and other smaller areas of underspends (£0.270m) coupled with an under recovery of income £0.667m relating to Rental Income (£0.447m) and Fees and Charges (0.200m). Page 165 of 289
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2.7. Adult Health and Social Care 2.7.1. Council Adult Health and Social Care provision to the Integration Joint Board (IJB) is projecting an underspend of £8.496m. This position is primarily due to a projected underspend in employee cost of £4.265m as a result of slippage in recruitment of posts relating to “Winter Planning and Enhanced Support”, a projected under spend in payments to other bodies of £2.700m as a result of staff shortages within the care at home sector SDS commissioning framework, a projected underspend in administration costs of £1.871m due to lower than anticipated Carers costs and several other smaller budget movements. 3. Measures of success 3.1. The Council continues to operate within approved budgeted resources. 4. Supporting documents 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) 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 have been discussed and agreed with Financial Solutions? 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 have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Page 166 of 289
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Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? 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 technology, has an assessment been carried out (or scheduled) 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)? Page 167 of 289
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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 168 of 289
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LINE SERVICE ACCOUNT BUDGET ACTUAL VARIANCE ANNUAL PROJECTED NO. TO DATE TO DATE TO DATE BUDGET OUTTURN (1) (2) (3) (4) (5) (6) (7) £ £ £ £ £ £ 1 Education & Families 191,511,868 194,517,243 (3,005,375 ) 460,191,888 463,754,745 (3,562,857 ) 2 Early Years 16,357,142 16,357,142 - 31,807,284 31,807,284 - 3 Primary Schools 65,375,458 65,375,458 - 136,209,480 136,209,480 - 4 Secondary Schools 66,087,699 66,087,699 - 127,846,098 127,846,098 - 5 Special Schools 10,092,590 10,092,590 - 20,651,426 20,651,426 - 6 Education & Families Service Delivery 3,815,443 6,521,092 (2,705,649 ) 71,465,354 74,275,149 (2,809,795 ) 7 Childrens Services Social Work 17,697,732 17,246,824 450,908 36,567,528 36,278,319 289,209 8 Justice Services 641,179 492,748 148,431 73,431 93,863 (20,432 ) 9 Active and Creative Communities 4,391,015 5,212,135 (821,120 ) 25,037,035 26,367,925 (1,330,890 ) 10 Employability 3,571,016 3,571,016 - 3,906,759 3,876,032 30,727 11 Community Learning 2,126,964 2,119,270 7,694 4,645,059 4,345,898 299,161 12 Welfare 1,355,630 1,441,269 (85,639 ) 1,982,434 2,003,271 (20,837 ) 13 Strategy for Young People - - - - - - 14 Enterprise & Communities 91,756,902 91,020,839 736,063 144,529,656 147,871,215 (3,341,559 ) 15 Environmental Assets 23,747,538 23,765,204 (17,666 ) 47,357,455 48,022,576 (665,121 ) 16 Regulatory Services & Waste Solutions 25,097,823 25,649,228 (551,405 ) 37,123,707 39,609,856 (2,486,149 ) 17 Assets & Procurement 31,759,645 31,236,648 522,997 38,272,520 39,289,023 (1,016,503 ) 18 Planning & Regeneration 4,496,069 3,966,960 529,109 9,545,283 8,647,959 897,324 20 Housing Solutions 1,120,851 1,041,532 79,319 5,330,715 5,364,201 (33,486 ) 22 Business, Housing Property & Projects 6,158,968 5,976,608 182,360 7,495,518 7,533,142 (37,624 ) 23 Trading Accounts (623,992 ) (615,341 ) (8,651 ) (595,542 ) (595,542 ) - 24 Chief Executives & Other Corporate Services 56,651,541 55,678,719 972,822 96,226,467 95,055,325 1,171,142 25 Directorate & Support 628,972 616,598 12,374 874,841 852,804 22,037 26 Fiancial Solutions 17,870,165 17,856,054 14,111 45,590,644 45,575,304 15,340 27 Audit & Risk 486,399 457,445 28,954 579,364 545,285 34,079 28 Legal & Democratic Solutions 1,763,058 1,987,391 (224,333 ) 2,155,475 2,394,687 (239,212 ) 29 Business & Digital 12,766,239 12,216,750 549,489 17,404,666 16,797,175 607,491 30 People & Organisational Development 6,874,202 6,687,283 186,919 8,142,731 7,896,840 245,891 31 Strategic Communication 4,204,093 4,108,424 95,669 5,156,219 5,025,049 131,170 32 Other Corporate Services 2,566,608 2,256,969 309,639 3,684,556 3,330,210 354,346 33 Joint Boards 9,491,805 9,491,805 - 12,637,971 12,637,971 - 34 Social Work (non Integrated) 187,964,805 187,964,805 - 188,700,126 188,700,126 - 35 GENERAL FUND SERVICES 527,885,116 529,181,606 (1,296,490 ) 889,648,137 895,381,411 (5,733,274 ) 36 FINANCING COSTS 26,021,122 20,636,507 5,384,615 (40,729,875 ) (47,729,875 ) 7,000,000 37 Reversal of Capital Charge (56,192,339 ) (56,192,339 ) - (73,050,041 ) (73,050,041 ) - 38 Loan Charges 25,438,589 20,053,974 5,384,615 33,070,166 26,070,166 7,000,000 39 Interest on Revenue Balances (576,923 ) (576,923 ) - (750,000 ) (750,000 ) - 40 OTHER BUDGETARY ISSUES 28,675,898 28,675,898 - 37,278,667 26,608,258 10,670,409 41 Assumptions not yet Realised 28,675,898 28,675,898 - 37,278,667 29,212,258 8,066,409 42 Drawdown from Reserves - - - - (2,604,000 ) 2,604,000 43 TOTAL EXPENDITURE 582,582,136 578,494,011 4,088,125 886,196,929 874,259,794 11,937,135 44 SOURCES OF FUNDING 681,689,945 681,689,945 - 886,196,929 886,196,929 - 45 Aggregate External Finance 555,498,049 555,498,049 - 722,147,464 722,147,464 - 46 Council Tax 121,576,512 121,576,512 - 158,049,465 158,049,465 - 46 Use of balances 4,615,385 4,615,385 6,000,000 6,000,000 47 (SURPLUS) / DEFICIT (99,107,809 ) (103,195,935 ) (4,088,125 ) - (11,937,135 ) 11,937,135 48 Earmarked for Future Budget Pressures - - - - 11,937,135 (11,937,135 ) 49 (SURPLUS) / DEFICIT (99,107,809 ) (103,195,935 ) (4,088,125 ) - - - 50 HOUSING REVENUE ACCOUNT (SURPLUS) / DEFICIT (34,458,156 ) (34,456,358 ) (1,798 ) - (1,067,000 ) 1,067,000 51 ADULT HEALTH AND SOCIAL CARE (SURPLUS) /DEFICIT (4,248,549 ) (10,784,051 ) 6,535,502 - (8,496,152 ) 8,496,152 Appendix 1 NORTH LANARKSHIRE COUNCIL SUMMARY BY DIVISION FOR PERIOD ENDING 06 January 2023 (PERIOD 10) PROVISIONAL VARIANCES Page 169 of 289
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Appendix 2 Total Total Reserve Balances 2022/23 Revised Earmarked Reserve 22/23 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 Change Management Fund 29,424 29,424 1,624 27,800 27,800 - - - - - Earmarked & One Off Resources Schools Future Contractual Obligations 54,175 - - - - - 54,175 54,175 - - COVID-19 Directed Funding 6,392 6,392 6,102 290 38 252 - - - 252 COVID-19 General Funding 21,662 19,900 17,725 2,175 2,168 7 1,762 1,762 - 7 Covid Recovery (From Core) 3,000 3,000 3,000 - - - - - - - Early Learning and Childcare 14,249 7,490 7,490 - - - 6,759 6,759 - - Strategice Workforce Planning 13,000 13,000 13,000 - - - - - - - Temporary Accomodation 9,288 9,288 9,288 - - - - - - - 2022/23 Budget One-off Investment 6,000 6,000 6,000 - - - - - - - DSM Balances 5,332 5,332 5,332 - - - - - - - Winter Reserve 1,500 1,500 - 1,500 1,500 - - - - - Youth Guarantee Funding 2,367 2,367 2,367 - - - - - - - Pupil Equity Fund 5,122 5,122 5,122 - - - - - - - Energy Costs and Other Non Pay Inflation 7,220 7,220 7,220 - - - - - - - Digitisation 2,499 1,892 1,135 757 - 757 607 607 - 757 Digital NL Savings 1,000 1,000 1,000 - - - - - - - Enterprise Contract 1,686 1,000 634 366 366 - 686 686 - - Business Gateway & Business Recovery 1,700 801 201 600 600 - 899 899 - - Active and Creative Communitites 2,000 2,000 2,000 - - - - - - - Rapid Rehousing (Non-COVID) 1,159 650 650 - - - 509 509 - - Other Earmarked Funds 11,093 9,676 9,476 200 200 - 1,417 1,417 - - Earmarked & One Off Resources Total 170,444 103,630 97,742 5,888 4,872 1,016 66,814 66,814 - 1,016 Total Reserves 199,868 133,054 99,366 33,688 32,672 1,016 66,814 66,814 - 1,016 Contingency Reserve 8,000 Unallocated Balance 28,396 General Fund Surplus at 31 March 2021 236,264 NORTH LANARKSHIRE COUNCIL ANTICIPATED COMMITMENTS AGAINST EARMARKED RESERVES AS AT 06 January 2023 (PERIOD 10) 2022/23 Future Years Page 170 of 289
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Appendix 3 £000 £000 Total Balance B/f per 2021/22 Annual Accounts 29,424 29,754 Approved commitments (819) 29,424 28,935 Period 10 reported variance 0 Earmarked Reserves no longer required 1,016 Total Balance 2022/23 before commitments 29,424 29,951 Known Commitments :- Revised one - off costs of approved savings (1,624) Draw down from Capital Fund 396 Total Balance 2022/23 27,800 30,347 Estimated future Capital Fund Drawdown to 2023/24 1,000 Forecast Balance 27,800 31,347 NORTH LANARKSHIRE COUNCIL AVAILABILITY OF GENERAL FUND BALANCES AS AT 06 January 2023 (PERIOD 10) Change Management Fund Unallocated General Fund Page 171 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/GT/RMcN Date 01/03/23 Capital Programme 2022/23 Monitoring Report From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 01698 302408 Executive Summary The purpose of the report is to provide an update on the 2022/23 resources and expenditure for the Council's Strategic Capital Investment Programme. The report also shows the 2022/23 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. As a result, it is currently anticipated that the General Fund programme will underspend during 2022/23 by £26.937m, with expenditure reprofiled to future years of the programme. Similarly, with the HRA programme, the current market for house sales has limited the Council’s ability to purchase the targeted number of houses through buy back schemes but this has been offset by increases in build costs for both the New Build and Mainstream programmes; resulting in slippage of £0.177m. Recommendations It is recommended that the Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 6 January 2023. 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 AGENDA ITEM 14 Page 173 of 289
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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 2022/2023 to 2025/2026 approved in March 2022 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 2022/2023 General Services Capital Programme is £175.985m with a £110.358m investment programme in relation to the Housing Revenue Account. The budget reflects the approved budget in March 2022 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 2022/23 budget by Service Programme and associated approved budget movements. 1.5 Committee will be aware that the Community Investment Fund Annual Update was presented to Policy and Strategy Committee on 29 September 2022. The report highlighted a reduction in projected CIF resources as a result of higher borrowing costs and lower than anticipated Council Tax growth. Consequently, there is a requirement to reduce the current 5-year capital investment programme by £22.076m. The budget reductions were approved at Policy and Strategy Committee on 1 December 2022 and SCDG will now work with services to identify the profile of expenditure reductions across the remaining years of the capital programme which may have an impact on resources available during 2022/23. 2. Report 2.1 Overall Council Strategic Capital Investment Programme 2.1.1 The overall Council Strategic Capital Investment programme for 2022/23 and the projected outturn to the 31 March 2023 is summarised in Table 1 as follows: Page 174 of 289
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Table 1 2.1.2 On a budgeted programme of £286.343m expenditure is anticipated to be £27.114m under budget at this stage of the financial year. Further financial performance information regarding each of the programmes is discussed in section 2.2 and 2.3 below. 2.2 General Services Capital Programme and Projected Outturn by Service/ Programme 2.2.1 The financial performance of the overall General Services Investment programme at 31 March 2023 is detailed in Appendix 2 and summarised below. General Services Total Resources Community Capital Investment Programme Summary 2022/23 Current Programme £000s Projected Outturn £000s Outturn Variance £000s Enterprise & Communities 159,192 136,139 23,053 Chief Executives 14,289 10,660 3,629 Adult Health & Social Care 2,504 2,249 255 General Services: Total Capital Investment 175,985 149,048 26,937 General Services Resources: General Fund External Grants & Contributions 2021/22 51,476 51,476 0 External Grants & Contributions b/f 2020/21 7,124 7,124 0 External Grants & Contributions Unapplied (992) (992) 0 Net External Grants & Contributions 57,608 57,608 0 Capital Receipts 1,000 3,534 2,534 Capital Receipts -Transfer to Capital Fund 0 (2,534) (2,534) CFCR 10,520 10,520 0 General Services: Total Resources 69,128 69,128 0 General Services : Borrowing Requirement 106,857 79,920 (26,937) HRA : Total Capital Investment 110,358 110,181 177 HRA Resources: Net External Grants & Contributions 24,122 23,600 (522) Capital Receipts 0 7 7 CFCR 27,146 27,146 0 HRA : Total Resources 51,268 50,753 (515) HRA : Borrowing Requirement 59,090 59,428 338 Summary Total Council : Capital Investment 286,343 259,229 27,114 Total Council : Resources 120,396 119,881 (515) Total Council : Borrowing Requirement 165,947 139,348 (26,599) Page 175 of 289
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2.2.2 The revised programme approved by the SCDG is £175.985m with total resources available to meet the current programme forecast to be £69.128m, resulting in a borrowing requirement of £106.857m. 2.2.3 In 2022/23 net external grants and contributions of £57.608m will be utilised. This capital resource primarily includes the Scottish Government (SG) General Capital Grants receivable of £23.681m and other specific SG Grants including City Deal £15.800m, the Place Based Investment Programme (PBIP) £2.358m, Vacant and Derelict Land Fund (VDLF) £2.058m, Regeneration Capital Grant Fund (RCGF) £3.221m, Active Travel £2.184m, Strathclyde Passenger Transport (SPT) £1.725m, Nature Restoration Fund £0.305m and Play Parks £0.319m. In addition, capital grants received in 2021/22 have been added to the programme including £2.912m for VDLF, £1.315m for PBIP, £1.170m for RCGF, £0.324m for Play Parks, £0.321m for CO2 monitors and £0.272m for Early Years Expansion grant, these applied in the current year to match expenditure as it is incurred and grant conditions met. This has been offset by £0.992m of external grant and contributions which will not be applied in 2022/23, including £0.733m for PBIP and £0.211m for VDLF, in respect of projects which will not now be completed until 2023/24. 2.2.4 Receipts from the sale of assets are projected to be £3.534m, which is £2.534m 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 2.2.5 As indicated in Table 1 the General Services investment programme is £175.985m. At Period 10, the final outturn spend is anticipated to be £26.937m under budget. This is primarily due to the investment programme continuing to face a number of risks and challenges associated with programme delivery including inflationary pressures as contractors continue to face issues with the supply of both labour, equipment and materials. The Council’s SCDG continues to monitor the situation closely. Further analysis by service/ programme is outlined below and summarised within Appendix 2. 2.2.6 Enterprise and Communities projects outturn expenditure of £136.139m, which is £23.053m under budget. This is attributable to continuing difficulties in programme phasing and delivery timing in the Town and Community Hubs, Street Lighting, Bellshill Depot, A73 Carlisle & South Biggar Road and Fleming House projects resulting in in- year reprofiling requirements of £2.286m, £0.953m, £1.818m, £0.629m and £0.537m respectively. Delays in contract awards and project timings for Carbon Management and Bothwellpark projects have now resulted in reprofiling requirements of £1.610m and £2.009m respectively. The Loaning project has been delayed due to on-going public consultation resulting in spend of £0.240m being completed in 2023/24. There is programme slippage in re-wire and re-roofing projects of £0.863m and £0.317m respectively, 1140 Programme (£0.221m), Sustainable Estate (£0.276m( and future capital receipts (£0.211m) although these are being partially offset by acceleration of expenditure in other projects such as Health & Safety works (£0.580m) and Toilet Upgrades (£0.415m), and by the acceleration of other projects such as within Office Rationalisation (£0.455m), Time Capsule major maintenance (£0.300m) and Bellshill Cultural Centre cafe of (£0.197m) within Asset and Procurement Solutions. Page 176 of 289
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Outdoor Education and Outdoor Spaces is reporting an programme slippage of £3.165m relating to additional funding agreed for Pitch development where the spend is now forecast to fall into 2023/24. Ground issues identified at Pather Farm have also resulted in a requirement to reprofile £2.711m within the Cemeteries/Tree Infrastructure programme. A revised programme profile for works on the West Coast Main Line mean expenditure of £1.296m will now slip into 2023/24 within City Deal. There is further expenditure reprofiling required in relation to Ambition projects of £1.685m linked to the likely timing of property transactions and the Vehicle Replacement Programme (£1.399m) as the external market continues to experience issues with the availability of vehicles. Maximisation of external funding and underspends in staffing costs within the Infrastructure and Transportation Improvements has resulted in an underspend of £2.506m. Requests to reprofile budget into 2023/24 were successfully presented at the meeting of the SCDG on 2 February 2023 and will be incorporated in the next monitoring report at Period 11. Committed expenditure of £113.552m is currently reported, which represents 83.41% of the targeted expenditure, and actual expenditure is £72.410m. 2.2.7 Chief Executives projects total expenditure of £10.660m, which is £3.629m under budget. This is mainly attributable to challenges faced in obtaining bids for projects subject to tender and contractors being unable to deliver projects within previously agreed timelines. A request to re-profile budget into 2023/24 was successfully presented to the meeting of the SCDG on 2 February 2023 and will be incorporated in the next report at P11. Committed expenditure of £10.057m is currently reported, which represents 94.34% of the targeted expenditure, and actual expenditure is £5.054m. 2.2.8 Adult Health & Social Care projected outturn expenditure of £2.249m, which is £0.255m under budget. This is attributable to demand levels not returning to pre- pandemic levels and the in-year variance will be re-profiled across the remainder of the 5-year capital investment programme. Committed expenditure of £1.483m is currently reported, which represents 65.94% of the targeted expenditure, and actual expenditure is £1.314m. 2.3 HRA Capital Investment 2.3.1 The financial performance of the HRA Capital Programme is reported in detail to the Housing Committee. A summary of performance as at 6 January 2023 is provided at Appendix 3. Total expenditure of £110.181m is forecast for 2022/23 which is £0.177m under budget, attributable to lower than budgeted purchases through the Council’s Buy Back Schemes of £4.606m, offset by increased material and contractor costs of £1.488m for the Mainstream Programme and £2.941m for the New Build Programme. Committed expenditure of £106.190m is currently reported, which represents 96.33% of the targeted expenditure, and actual expenditure is £75.230m. 2.4 Service Re-profiling Requests 2.4.1 As mentioned in paragraph 2.2.6 and 2.2.7, to ensure available resources more closely reflect operational activity across themes, requests within the Enterprise and& Communities and Chief Executive services to re-profile budget to future years of the programme were successfully presented for approval at the meeting of the SCDG on 2 February 2023 and these decisions will be incorporated in future reports. 3. Measures of success 3.1 N/A Page 177 of 289
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4. Supporting documentation 4.1 Appendix 1: Strategic Capital Investment Programme 2022/23 budget movements Appendix 2: General Services Capital Investment Programme Summary 2022/23 Appendix 3: HRA Capital Investment Programme Summary 2022/23 Elaine Kemp Chief Officer (Finance) Page 178 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 179 of 289
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or scheduled) 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 ☐ Despite the updated programme phasing approved at Policy and Strategy Committee on 17 March 2022 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 180 of 289
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2022/23 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 22/23 Opening programme approved Policy& Strategy Committee 17 March '22 157,167 17,352 2,600 0 177,119 103,358 280,477 21/22 Overs/Unders Carry Forward 5,796 178 (96) 0 5,878 0 5,878 22/23 Budget adjustments approved by SCDG 0 0 0 0 0 0 0 22/23 Policy & Strategy Committee reprofiling 0 0 0 0 0 0 0 Increase/(Decrease) in Externally Funded Projects 714 683 0 0 1,397 7,000 8,397 CFCR 10,020 500 0 0 10,520 0 10,520 22/23 re-profiling of projects to future years (14,505) (4,424) 0 0 (18,929) 0 (18,929) Revised Capital Programme 2022/23 159,192 14,289 2,504 0 175,985 110,358 286,343 Page 181 of 289
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General Services Capital Investment Programme Summary 2022/23 - as at 31 March 2023 Appendix 2 Investment Current Programme 2022/23 £000s Projected Outturn 2022/23 £000s Outturn Variance 2022/23 £000s Committed Expenditure @ P10 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P10 £000s Enterprise & Communities 159,192 136,139 23,053 113,552 83.41% 72,410 Chief Executives 14,289 10,660 3,629 10,057 94.34% 5,054 Adult Health & Social Care 2,504 2,249 255 1,483 65.94% 1,314 Total General Services Investment 175,985 149,048 26,937 125,092 83.93% 78,778 General Services Resources; External Grants & Contributions 2022/23 51,476 51,476 0 External Grants & Contributions b/f 2021/22 7,124 7,124 0 External Grants & Contributions Unapplied cfwd to 2022/23 (992) (992) 0 Net External Grants & Contributions 57,608 57,608 0 CFCR 10,520 10,520 0 Capital Receipts 1,000 3,534 2,534 Capital Receipts - Transfer to Capital Fund 0 (2,534) (2,534) Total Resources 69,128 69,128 0 Borrowing Requirement: General Services 106,857 79,920 (26,937) Total General Services Borrowing Requirement 106,857 79,920 (26,937) Total Resources incl Borrowing Requirement 175,985 149,048 (26,937) Page 182 of 289
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HRA Capital Investment Programme Summary 2022/23 - as at 31 March 2023 Appendix 3 Investment Current Programme 2022/23 £000s Projected Outturn 2022/23 £000s Outturn Variance 2022/23 £000s Committed Expenditure @ P10 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P10 £000s Mainstream Programme 59,950 61,438 (1,488) 61,074 99.41% 45,153 New Build Programme 39,436 42,377 (2,941) 42,377 100.00% 26,122 Council Buy Back Scheme 10,972 6,366 4,606 2,739 43.76% 3,955 Total HRA Investment 110,358 110,181 177 106,190 96.33% 75,230 HRA Capital Resources; External Grants & Contributions 24,122 23,600 (522) External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 24,122 23,600 (522) CFCR 27,146 27,146 0 Capital Receipts 0 7 7 Total Resources 51,268 50,753 (515) Borrowing Requirement: HRA - Mainstream 30,474 31,425 951 HRA - New Build 21,788 23,764 1,976 HRA - Buyback Scheme 6,828 4,239 (2,589) Total Borrowing Requirement 59,090 59,428 338 Total Resources incl Borrowing Requirement 110,358 110,181 (177) Page 183 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS/RM/GM Date 08/02/23 Treasury Management Monitoring Report for quarter ended 31 December 2022 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 October 2022 to 31 December 2022 and compliance with the mandatory treasury and prudential indicators. Recommendations It is recommended that Committee note the Treasury Management Activity for the quarter ended 31 December 2022 including the positive 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 AGENDA ITEM 15 Page 185 of 289
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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 Treasury activity undertaken in the third quarter of 2022/23 reflects the key requirements of the Council’s 2022/23 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 2022/23 investment strategy. 2. Report 2.1 Summary Position 2.1.1 The net overall borrowing position to 31 December 2022 is £797.6m, this is an increase of £53.4m from the position at the 30 September 2022 with a detailed breakdown of the net cash movement shown in column (6) within Appendix 1. 2.2 Borrowing 2.2.1 At the end of the quarter, total external debt amounted to £852.4m which represented an increase of £44.7m. This was mainly due to a net increase in temporary borrowing activity of £49.0m as £50.0m falling due for repayment was offset by £99.0m of new temporary borrowing. There was also a decrease of £0.8m in the municipal bank balances available to the Council following the closure of the bank on 30th September 2022. In addition, net long-term borrowing reduced by £1.5m due to the repayment of existing PWLB borrowing. Lease payments under existing finance lease and PPP obligations of £2.0m also fell due for repayment during the quarter. 2.2.2 The approach to borrowing is in line with the approved strategy, which is to take advantage of temporary (short-term) borrowing at attractive rates and use of internal cash balances to meet the principal repayments, daily revenue account requirements and the capital financing requirement in lieu of future long-term borrowing for capital purposes. The strategy adopted reflects 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. 2.2.3 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 31 March 2023 and beyond subject to a further successful application. 2.3 Debt Restructuring 2.3.1 During the quarter under review, in conjunction with our Treasury advisors, we monitored the economic climate in relation to our financial targets and Treasury Page 186 of 289
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Management strategy. The interest rates prevailing throughout the period resulted in no beneficial opportunities for debt restructuring /rescheduling of the existing PWLB debt portfolio arising. 2.3.2 The Council continued 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. No banks exercised their option during the quarter. 2.3.3 Further reports regarding future activity will be presented to Committee as appropriate. 2.4 Investments 2.4.1 At the end of the third quarter of 2022/23, the Council held total investments of £54.8m, which is a net decrease of £8.7m in cash and cash equivalents, mainly due to an £14.9m decrease in short-term investments, partly offset by a reduction in the bank overdraft including cash in transit of £6.2m, as shown within column 6 of the attached Appendix 1. 2.4.2 The decrease in short term investments reflects repayment of maturing temporary borrowing of approximately £297.3m and undertaking new short-term investments of £282.4m. 2.4.3 At quarter end, the bank overdraft including cash in transit was £0.5m which is a positive cash position compared to the position at the end of the previous quarter. The net positive cash position reflects the Council festive period closedown as no significant BACS payment runs fell due for clearance at the quarter end date. The balance at 31 December 2022 comprises of £0.7m net BACS receipts outstanding due for clearance within 3 days of the quarter end date and £0.2m of cash in transit, partially offset by cheques unpresented of £0.4m. 2.4.4 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. 2.4.5 On 3 November 2022, the Bank of England Base Rate was increased from 2.25% to 3.00% and then by a further 0.50% to 3.50% on 14 December 2022, to help combat ongoing high inflation, fuelled by high energy and commodity prices and its impact on consumers cost of living as well as the low likelihood that the Russia- Ukraine hostilities will end any time soon with associated impact on supply chains. The increases in the Bank of England Base Rate over the period under review, with the prospect of more increases to come, short-dated cash rates ranging between 0.7% - 1.5% at the end of March, rose by around 2.7% for overnight/7- day maturities. There is no noticeable difference between the 7 day and 1-month SONIA 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. 2.4.6 Overall the Treasury Management team continues to take a prudent approach to investing surplus funds in line with the approved 2022/23 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. Page 187 of 289
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Non Treasury Management Investments 2.4.7 During the quarter, repayments of £0.009m were made in respect of third-party advances in connection with the Cumbernauld Academy DBFM and Greenfaulds DBFM. 2.5 Interest Rate Movements & Other Economic Updates 2.5.1 The ongoing conflict in Ukraine has continued to keep global inflation elevated and the economic outlook for UK and global outlook remains weak. Political uncertainty in the UK improved in the later part of the quarter following a change in government to what financial markets perceived as being more fiscally prudent. The Bank of England, Federal Reserve and the European Central Bank all increased interest rates over the period and committed to fighting inflation, even in the face of potential recessions in those regions. 2.5.2 As outlined above, the Bank of England increased the official Bank Rate to 3.50% over the period. The Monetary Policy Committee (MPC) has approved rises ate every meeting this year, with most recent rises of 0.75% in November and 0.50% in December. The MPC again noted that domestic inflationary pressures are expected to remain strong. Therefore, given the strong and continuing rhetoric around tackling inflation, further Bank Rate rises are expected. 2.5.3 UK inflation remained extremely high but there are tentative signs it may have peaked. Annual headline CPI hit 11.1% in October, the highest rate for 40 years, before falling modestly to 10.7% in November with a further slight reduction to 10.5% in December. RPI registered 14.2% in October and fell slightly to 14.0% in November and to 13.4% in December. The UK government under Rishi Sunak and Jeremy Hunt reversed some of the support to household energy bills announced under the previous Liz Truss leadership. The previous support package which would have seen average consumption cost £2,500 annually until 2024 was replaced by a less generous scheme which was only maintained at this level until March 2023, to be replaced by a higher cap of £3,000 per year for the typical household from April 2023 onwards. 2.5.4 The labour market remained tight through the period but there was some evidence of softening demand for new labour. The unemployment rate for April fell to 3.8% which declined to 3.6% in July and picked up again to 3.7% in December. Pay growth in December was 6.1% for both total pay (including bonuses) and regular pay, however once adjusted for inflation, both measures fell by 2.7%. 2.5.5 Uncertainty remained a key driver of financial market sentiment and bond yields remained relatively volatile due to concerns over elevated inflation and higher interest rates. In September and October, volatility in financial markets was significantly exacerbated by the fiscal plans of the then UK government (under Liz Truss), leading to an acceleration in the rate of the rise in gilt yields and decline in the value of sterling. However, the subsequent change of government leadership to Rishi Sunak and Jeremy Hunt lead to gilts yields falling in November and December, albeit at higher levels compared to earlier in the period. 2.5.6 Over the period the 5-year UK benchmark gilt yield rose from 1.41% to peak at 4.7% in September before falling to 3.62% in December. Over the same timeframe, the 10-year gilt yield rose from 1.61% to peak at 4.51% before falling back to 3.67%, while the 20-year yield rose from 1.82% to 4.96% and then reduced to 4.03%. This resulted in the PWLB 10 year borrowing rate reducing from 5.15% Page 188 of 289
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at the start of the quarter to 4.79% at the end of the quarter, showing a spread of 1.57% between the highest and lowest interest rate which were 4.08% and 5.65% respectively, averaging 4.64%. 2.5.7 Following the increases in the base rate in November and December, short-term borrowing interest rates increased with the short term 7-day offer rate ranging between 2.40% and 3.85% 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 than long term borrowing. This will manifest itself in increased temporary borrowing costs for the Council partially offset by increased investment income earned on surplus balances but remains within budgetary forecasts. 2.5.8 The Treasury Management Section will continue to monitor financial and economic policy and their impact upon the Council’s investment and borrowing activity. 2.6 The Prudential Code for Capital Finance in Local Authorities 2.6.1 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. 2.6.2 Committee, at its meeting on 10 March 2022, approved a report titled, “Treasury Management Strategy 2022/2023 and Treasury and Prudential Indicators 2022/2023 to 2024/2025”. 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 2022/23 to date is detailed within Appendix 2. 2.6.3 Committee will wish to note the following salient points:- (i) Indicator 1(a) illustrates that investment on capital expenditure is forecast to be lower than anticipated by £36.2m. This reflects decrease of £12.4m in the General Fund capital investment and £23.8m for the HRA Mainstream and New Build programmes. This is primarily due to the investment programmes continuing to face a number of risks and challenges associated with programme delivery including inflationary pressures as contractors continue to face issues with the supply of both labour, equipment and materials, and lower than budgeted purchases through the Council’s Buy Back Schemes. 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 2022/23. (ii) The mix of resources used to finance the capital expenditure in 2022/23 reflect the updates to the forecast capital investment outlined above. Therefore, the level of in-year borrowing is anticipated to be lower by £59.1m due to a reduction in HRA and General Fund programmes, of £34.4m and £24.7m respectively. The forecast level of borrowing also reflects a net increase in capital grants and external contributions of £18.3m, with additional funds available to the General Fund and HRA programmes of £17.3m and £1.0m respectively. An additional £4.6m of CFCR is also available for the General Fund programme. (iii) As a result of accounting issues arising from the pandemic recovery, the implementation of IFRS 16 Lease Accounting has been delayed yet again. Therefore, a restatement of existing liabilities for operating leases to the credit arrangement category will not be applied in 2022/23, with the spend and associated financing under credit arrangements estimated to be £3.5m will be accounted for in future years. Page 189 of 289
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(iv) The Prudential Code requires the Council’s capital investment to be affordable and prudent. To demonstrate this, a Prudential Margin (the need to borrow versus actual borrowing) is calculated. Indicator 1(b) demonstrates a healthy prudential margin of £299.3m as at 31 December 2022. 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. (v) Indicator 2 illustrates that both the overall authorised and operational borrowing 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. (vi) Indicator 3(a) highlights the proportion of external interest payable by the Council which is fixed and external interest payable which may vary over the term of the borrowing, and which exposes the Council to the effects of interest rate changes. At the 31 December 2022 the level of borrowing subject to variability is deemed to be within acceptable levels. (vii) Indicator 3(b) highlights a projected loan charge underspend of £4.5m compared to the prudential estimates for 2022/23. This projection takes into account the treasury management activity, the loans fund advances repayment policy adopted in 2021/22 and the decisions of the P&S Committee on 30 September 2021 and the SCDG to reprofile the capital programme in response to the significant delivery related challenges. However, given the current economic and financial market volatility this will be kept under review. This current loan charge underspend is made up of: • A net treasury management saving of £4.1m is projected (£2.1m General Fund and £2.0m HRA), which is a reflection of the cashflow management techniques adopted, directing the timing of new borrowing, managing investment security, liquidity and interest rate risk. As a result, there is a net forecast reduction in loans fund interest payments and expenses. However, during the quarter short-term borrowing and investment rates have risen as detailed above therefore the forecast incorporates prudent further increases in borrowing rates for the remainder of the financial year. This will be kept under review as the financial year progresses and depending on how actual market rates perform, there may be further movements in borrowing costs compared with forecast. • In 2022/23 it is anticipated there will be reduction in anticipated loans fund advance repayments of £0.1m and £0.3m for the General Fund and HRA respectively. This primarily due to the Council benefiting from the revised loans fund advance repayment policy approved at the Finance and Resources Committee on the 26 November 2020, whereby the Council continues to use the annuity model, apply a fixed average life to the loans fund advances, and apply a prudent annuity rate. (viii) Indicator 3(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. 3.1 Overall the approach adopted by the Council’s Treasury Management team during the quarter under review met the key requirements of the 2022/23 Treasury Management Strategy. Prudential indicators have remained in accordance with those approved by Committee on 10 March 2022. 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 Page 190 of 289
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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 documents 4.1 Appendix 1: Loans, Long term Liabilities & Investments as at 31 December 2022 Appendix 2: Summary of Treasury and Prudential Indicators as at quarter ended 31 December 2022 Elaine Kemp Chief Officer for Finance Page 191 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 192 of 289
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or scheduled) 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 ☐ 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 193 of 289
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LOANS, LONG TERM LIABILITIES & INVESTMENTS AS AT 31 DECEMBER 2022 Appendix 1 DEBT RESTRUCTURING BALANCE 1-October-22 EARLY REDEMPTION REFINANCING NEW BORROWING / LONG-TERM LIABILITIES PRINCIPAL REPAYMENTS NET CASH MOVEMENTS BALANCE 31-December-22 (1) (2) (3) (4) (5) (6) (7) LONG-TERM LOANS PWLB 403,553,604 0 0 0 (1,430,375) (1,430,375) 402,123,229 MONEY MARKET LOANS 67,000,000 0 0 0 0 0 67,000,000 ENERGY EFFICIENCY LOAN 1,101,665 0 0 0 (98,006) (98,006) 1,003,658 471,655,269 0 0 0 (1,528,381) (1,528,381) 470,126,888 SHORT-TERM LOANS TEMPORARY 165,000,000 0 0 99,000,000 (50,000,000) 49,000,000 214,000,000 MUNICIPAL BANK 799,675 0 0 0 (799,675) (799,675) 0 INTERNAL LOANS 6,280 0 0 0 0 0 6,280 165,805,955 0 0 99,000,000 (50,799,675) 48,200,325 214,006,280 LONG -TERM LIABILITIES FINANCE LEASE OBLIGATIONS 1,551,782 0 0 0 (4,471) (4,471) 1,547,311 LONG TERM LIABILITY 168,660,124 0 0 0 (1,981,019) (1,981,019) 166,679,105 170,211,906 0 0 0 (1,985,490) (1,985,490) 168,226,416 TOTAL EXTERNAL DEBT 807,673,129 0 0 99,000,000 (54,313,546) 44,686,454 852,359,583 INVESTMENTS THIRD PARTY ADVANCES 1,187,655 0 0 0 (9,421) (9,421) 1,178,234 BANKS & OTHER FINANCIAL INSTITUTIONS 67,991,192.28 0 0 0 0 (14,883,821) 53,107,371 BANK OVERDRAFT INCL CASH IN TRANSIT (5,725,783) 0 0 0 0 6,231,991 506,208 CASH & CASH EQUIVALENTS 63,453,064 0 0 0 (9,421) (8,661,251) 54,791,813 NET BORROWING 744,220,065 0 0 99,000,000 54,304,125 53,347,705 797,567,770 Page 194 of 289
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Summary of Treasury and Prudential Indicators as at quarter ended 31 December 2022 Appendix 2 1. Capital Expenditure, Capital Financing Requirement and Prudential Margin (a) Capital Expenditure Initial Estimate 2022/2023 (£m) Projected Outturn 2022/2023 (£m) Total spend : Capital Expenditure 296.5 260.3 Total spend : Credit Arrangement 0.0 0.0 Total Capital Investment 296.5 260.3 Financed By: Borrowing 207.2 148.1 Capital receipts 1.0 2.6 Capital receipts transfer to Capital Fund 0.0 -1.6 Capital Grants & Other External Contributions 61.2 79.5 Capital from Current Revenue 27.1 31.7 (b) Prudential Margin Calculation Initial Estimate 2022/2023 (£m) Projected Outturn 2022/2023 (£m) Capital Financing Requirement 1,321.8 1,228.6 Gross Borrowing 1,194.3 929.3 Prudential Margin 127.5 299.3 2. Authorised Limit and Operational Boundary Initial Authorised Limit 2022/2023 (£m) Initial Operational Boundary 2022/2023 (£m) Maximum Borrowing Level Q3 2022/2023 (£m) Borrowing 1,215.0 1,240.0 686.1 Other Long-term Liabilities 185.0 185.0 166.7 Totals 1,400.0 1,425.0 852.8 3. Treasury Management Indicators a) Interest Rate Exposures on External Interest Payments Position as at 31/12/2022 (£m) % External Interest Payable on Fixed Rate Loan Debt 22.75 98.1% External Interest Payable on Variable Rate Loan Debt 0.45 1.9% b) Loans Fund Revenue Account Initial Estimate 2022/2023 (£m) Projected Outturn 2022/2023 (£m) Variance £m) %age Loans Fund Interest Payments 30.0 26.4 3.6 12.0% Loans Fund Expenses 0.4 0.4 0.0 7.0% Total Loans Interest Payments & Expenses 30.4 26.8 3.6 11.9% Loans Funds Investment Income -0.2 -0.7 0.5 -250.0% Total Loans Fund Interest Payments Investment Income & Expenses 30.2 26.1 4.1 13.6% Allocated as follows : Loans Fund Interest Payments Investment Income & Expenses:General Fund 17.6 15.5 2.1 11.9% Loans Fund Interest Payments Investment Income & Expenses:HRA 12.6 10.6 2.0 15.9% Capital Advances Repayments - General Fund 8.8 8.7 0.1 1.1% Capital Advances Repayments - HRA 10.1 9.8 0.3 3.0% Total Capital Advances 18.9 18.5 0.4 2.1% Total Loan Charges 49.1 44.6 4.5 9.2% 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% 5.0% Maturity structure at the start of Q3 8.7% 4.5% 12.0% 11.8% 20.5% 36.5% 5.4% Maturity structure at the end of Q3 8.8% 4.7% 11.9% 11.9% 20.4% 36.8% 5.5% Page 195 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS Date 01/03/23 POW 11 – Review of 2022/23 Budget Savings From Elaine Kemp, Chief Officer of Finance E-mail KempE@northlan.gov.uk Telephone 07939 280601 1. Background 1.1 At its meeting of 17 February 2022, the Council approved a General Fund Revenue Budget of £887.270m. This included spend which is offset by ring fenced grants of £50.126m resulting in an opening budget position for Net Service Expenditure of £837.143m. Additional funding has since been confirmed as part of the Scottish Government budget setting, including additional directed funding to the Adult Health and Social Care and funding for Free School Meal Expansion, increasing the budget to £875.141m. Net savings totalling £10.484m were incorporated into the budget set on 17 February 2022. However, £2.000m of one-off resources has been set aside from General Fund reserves to manage the financial impact of the delayed implementation of the Active in Creative Communities saving of £3.058m, and £1.372m has been earmarked from IJB reserves in respect of the delayed closure of the Muirpark facility. These actions reduce the overall savings requirement in 2022/23 to £7.112m. Executive Summary This report provides the Finance and Resources Committee with an update on the achievement of the approved net savings for financial years 2022/23 of £10.484m. The council set aside one-off resources of £3.372m to manage anticipated delays in delivering savings in respect of Active & Creative Communities and the closure of the Muirpark facility, reducing the 2022/23 target to £7.112m. It is currently forecast that £5.417m (76%) of the savings will be delivered in year with the remaining balance to be delivered in future years. Recommendations It is recommended that Committee: (1) Acknowledges 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 AGENDA ITEM 16 Page 197 of 289
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1.2 Services are required to monitor the delivery of their target savings to ensure they remain within approved budgets and provide periodic progress updates within individual Service revenue monitoring reports, identifying alternative solutions to any in-year shortfall envisaged. In addition, Services are required to monitor whether the original approved saving has been implemented and if not, provide an explanation along with alternative action required to ensure the recurring financial saving will be achieved going forward. 1.3 This report summarises the progress in achieving the approved savings for 2022/23. 2 Report 2.1 Approved 2022/23 Savings 2.1.1 A summary of the approved savings for 2022/23 by Service is provided at appendix 1, along with the current forecast of savings that will be delivered in year. It is anticipated that £5.417m of the net approved saving will be achieved in the current financial year. As indicated above, one-off resources totalling £3.372m has been earmarked to fund the financial impact of the delayed implementation of savings in relation to the closure of Muirpark (£1.372m) and Active and Creative Communities (£2.000m). This planned action reduces the current year target and in-year savings gap to £7.112m and £1.695m, respectively. The remaining in-year gap will be managed by alternative solutions with all savings anticipated to be fully implemented for the beginning of the new financial year. Therefore, there is no anticipated recurring budget impact. 2.1.2 Appendix 2 shows further detail on those savings delayed in 2022/23, all of which are anticipated to be fully implemented resulting in no ongoing budget impact in 2023/24. 3. Measures of success 3.1 The Council continues to operate within approved budgeted resources. 4. Supporting documentation Appendix 1 Total 2022/23 Savings by Service Appendix 2 Budget Savings by Exception 2022/23 Elaine Kemp Chief Officer for Finance Page 198 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Financial Solutions? 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 have been discussed and agreed with People and Organisational Development? 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 have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 199 of 289
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Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) 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. Page 200 of 289
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Appendix 1 Service Approved Saving £m Agreed Solutions £m Revised Savings Target £m Projected Savings £m In-year Savings Gap £m Recurring Gap £m Adult Social Care 2.024 1.372 0.652 0.652 0.000 0.000 Chief Executive's 0.361 0.000 0.361 0.000 0.361 0.000 Enterprise & Communities 1.270 0.000 1.270 0.797 0.474 0.000 Education & Families 6.829 2.000 4.829 3.969 0.860 0.000 Total Service Savings 10.484 3.372 7.112 5.417 1.695 0.000 North Lanarkshire Council Revenue Budget 2022/23 Service Savings Monitoring 2022/23 Page 201 of 289
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Service Division Saving Detail Savings Ref Approved Saving £m Projected Savings £m In Year Savings Gap £m Recurring Gap £m CEX Business Solutions DigitalNL CE05 0.198 0.000 0.198 0.000 CEX People & Organisational Development Digital Savings - Reduction of ESC Administration CE05 0.163 0.000 0.163 0.000 E&C Assets & Procurement Asset Management Rationalisation/Office Dis-investment. EC10 (Part 1) 0.800 0.327 0.474 0.000 E&F Education Merger/Rezoning School Catchments EF18 0.675 0.175 0.500 0.000 E&F Education Residential/Family Placements/Throughcare EF08 0.600 0.300 0.300 0.000 E&F Education Librarians EF19 0.238 0.178 0.060 0.000 Total Savings 2.674 0.980 1.695 0.000 2022/23 Review of Budget Savings by Exception 2022/23 Appendix 2 Page 202 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 01/03/23 Strategic Performance Framework - latest performance results for Business and Digital From Katrina Hassell Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary Business and Digital comprises two areas of activity that work corporately across the council: • Technology Strategy Solutions, who are responsible for the live delivery and operational management of technology solutions required to support services and schools in delivering front line day to day operations and in progressing activities which facilitate delivery of the council’s strategic place-based ambition. A key aspect of this area of activity is also the development of the technology estate, its solutions, and integrations with third party suppliers. • Business Strategy, who are responsible for driving business change, improvement, and service redesign in order to provide efficient and effective services in line with the council’s, and the North Lanarkshire Partnership’s, strategic aims and plans. This area of activity also includes measuring success against The Plan for North Lanarkshire and ensuring the established frameworks and supporting governance remains relevant and up to date. Business and Digital maintains a range of performance indicators which are monitored in various ways, including subject matter specific monthly review meetings as well as quarterly business management meeting discussions. These meetings make use of the evidence base provided by the performance results to inform discussions around the best use of resources and decide priorities in this respect, as well as to highlight areas requiring improvement. The service’s four weekly risk management meetings also consider the impact of performance achieved within critical areas of the service. For strategic overview and scrutiny purposes, this report provides Members of the Finance and Resources Committee with an update of the latest results for the suite of performance indicators used by Business and Digital to inform service delivery and underpin operational decisions. Recommendations It is recommended that the Finance and Resources Committee: (1) Review the high-level performance overview presented in Appendix 1, and the supporting data contained within the linked Excel spreadsheet, and identify where further information is required to understand or investigate performance further. AGENDA ITEM 17 Page 203 of 289
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1. Background 1.1 There are six inter-related strategic frameworks which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery towards achieving the overall vision by ensuring each stage is appropriately planned, guided, implemented, and governed. 1.2 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. 1.3 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.4 The Strategic Performance Framework is aligned to the Accounts Commission statutory direction which places a requirement on councils to report a range of information in terms of (1) improving local services and outcomes, and (2) demonstrating Best Value. Key points of note in this respect are that the Accounts Commission also expect to see: (a) A balance in reporting areas of improvement that have been achieved and not achieved. (b) Reporting that is undertaken in a timely manner. (c) Easy access to performance information for all citizens and communities. 1.5 A Performance Reporting Schedule supports the timely submission of a range of performance information that facilitates Elected Members and senior management to undertake regular performance reviews that inform scrutiny, challenge, and decision making processes. This Schedule, endorsed by the Audit and Scrutiny Panel in February 2023, includes Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 1.6 This report therefore presents the Finance and Resources with the latest performance results for Business and Digital for Members’ further review and scrutiny. 2. Strategic Performance Framework Finance and Resources Committee responsibilities 2.1 In line with the terms of reference outlined in the Scheme of Administration, the Finance The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 204 of 289
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and Resources Committee is responsible for monitoring and reviewing performance information for the following Ambition Statements from The Plan for North Lanarkshire: 18. Ensure our digital transformation is responsive to all people’s needs and enables access to the services they need. 24. Review and design services around people, communities, and shared resources. 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. 2.2 The high-level performance overview in Appendix 1 presents Members with a summary of the latest results for each performance indicator within the remit of the Chief Officer (Business and Digital). 2.3 The information in Appendix 1 comprises the following: • An ideal direction arrow - this indicates whether a higher or lower figure is the preferred direction of travel. • Measurement unit - for example whether the result is a %, a number, a unit cost (in £), or a ratio. • Performance results for the last four financial years (depending on availability of data) along with the latest year’s target and corresponding RAG status (for indicators where it is appropriate to set targets). • The most recent monthly or quarterly results, along with the corresponding target and RAG status. Note the inclusion of this information is dependent on the measurement frequency of the indicator and availability of data as at the time of reporting. • A trend graph - this captures the direction of travel achieved over the four financial years and includes the most recent monthly or quarterly results where available. • Comments - narrative summarising the current position and providing an explanation for any significant variations in performance. Where applicable, this narrative also highlights the effect of the pandemic on service delivery, e.g. any increase or decrease in the volume of transactions or enquiries processed. 2.4 A large volume of data supports the high-level performance overview in Appendix 1. This is outlined in the latest performance results for Business and Digital Excel spreadsheet which is available through the following link for Members to carry out a deep dive and review and scrutinise each performance indicator further. The Menu on the second tab of the spreadsheet contains built in hyperlinks that automatically take the user to a tab for each performance indicator and therefore provides a useful navigation aid to review the contents of the file. • Latest performance results for Business and Digital.xlsx Current context 2.5 The service’s operating environment has changed significantly in recent years and, as such, the performance information presented in Appendix 1 should be considered within the context of the following: A higher figure is better A lower figure is better Key to RAG status Performance is on target and/or within acceptable thresholds Performance does not meet target and is outwith acceptable thresholds Performance surpasses the target and exceeds expectations Page 205 of 289
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• The extent to which the service has supported the council in terms of responding to and recovering from the pandemic over the last two years, while resuming business as usual activities at pace. • The changing structure required following approval to insource those services previously outsourced to Wipro (supplier of the ICT service delivery contract), the alignment of service provision following the insourcing of culture, sport, and leisure services (previously delivered through Culture and Leisure NL Limited), and the final steps in the integration of the schools’ technician’s service. • Service specific advancements in terms of the procurement of the Connectivity project in December 2021. • The end of the contract with Agilisys in April 2022 and the ensuing significantly reduced resource available going into 2022/23. • The direction set for the service in the DigitalNL - Year 4 Roadmap report submitted to the Policy and Strategy Committee in September 2022 and the follow up DigitalNL - Next Steps report approved in December 2022. • The development of the Business and Digital Integrated Programme Plan which aims to capture all areas of activity across the service and serve as a guide to support resource planning and operational delivery, as well as the relevant project management and governance controls. Recent performance highlights 2.6 An area of performance which continues to improve on the target (as shown in Appendix 1) is the number of occasions in a month that a priority service (P1) has not been available to users. This continues to show a year on year decrease with 2021/22 and 2022/23 figures to date reflecting a range of targeted work which includes increasing IT infrastructure resiliency, the initial move to home working having a greater but more specific focus on the infrastructure delivering remote working, insourcing of the Wipro service which has led to more accurate recording of P1 incidents, and the removal of legacy systems and many legacy features which restrict the council’s further adoption of cloud. Areas of performance requiring improvement 2.7 An area of activity being kept under review is that in relation to service desk incidents resolved within target. Following the insourcing of Wipro, this indicator was changed to capture all severity level 3 tickets regardless of who resolves them in order to provide a more complete and accurate picture of all incidents that require to be resourced by the service. This has increased the volume of incidents recorded within this indicator and additional information is being analysed monthly in terms of which teams tickets are assigned to, how long tickets remain open, and any recurring issues in this respect. This analytical approach needs to be balanced against the ability to prioritise workloads across the whole service, as opposed to the previous contractually driven model. This allows for a more agile and responsive approach to be taken, balancing development, maintenance, and operational activities. The decision was taken to maintain existing baseline Service Levels Agreement targets; however it is expected these will be adjusted moving forward once a clear picture is available. Managing this workload is also undertaken in tandem with infrastructure developments across the service which, although improvements in the longer term, can often result in an initial backlog of issues which require to be resolved in order to ensure a successful transition to a new approach (e.g. the removal of the extra sign on step when using AnyConnect for remote working). This complete analysis is building up a picture to Page 206 of 289
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help understand demand and thereby allocate resources accordingly and set a realistic target moving forward; a further update in this respect will be provided in the next six monthly performance report to Committee. 2.8 The complaints handling ratio is also currently under review to ensure that the council continues to be proactive in responding to all routine complaints at the frontline at stage 1 (in line with the national local authority model Complaints Handling Procedure). Historical figures in this respect show that the council has consistently responded to 9 out of 10 complaints received at stage 1. The implementation of the new Dynamics complaints system, combined with a significant increase in the volume of complaints received, has impacted on the figures shown for 2021/22 and further analysis is currently underway to identify the root cause and the actions that need to be implemented to improve this ratio moving forward. Next steps 2.9 As noted in paragraph 1.5, the Strategic Performance Framework is supported by a Performance Reporting Schedule. This sets out the arrangements for service, statutory, and Strategic Performance Framework reporting to committee. In this respect the relevant Committee can expect to receive the following in respect of Business and Digital areas of work during 2023/24. Report Description Committee Committee cycle Senior Information Risk Owner (SIRO) annual report This report provides an update relating to the responsibilities of North Lanarkshire Council’s Senior Information Risk Owner (SIRO) and outlines activity and performance related to information governance. It provides assurances that information risks are being effectively managed, what is going well, and where improvements can be made. It complements the data protection annual report by the council’s Data Protection Officer (DPO). Audit and Scrutiny Panel Cycle 1 in 2023 North Lanarkshire Community Planning Partnership - annual report The Community Empowerment (Scotland) Act 2015 introduced a range of new requirements on local authorities and community planning partners to empower and strengthen community involvement in the design, planning, and delivery of local services. The statutory duty of community planning requires all public sector agencies to work collaboratively in agreeing both strategic and local priorities for their areas to improve outcomes and address poverty and inequalities. Community Planning Partnerships must also annually review and report on their progress. Communities Committee Cycle 1 in 2023 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the Page 207 of 289
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council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix 1 - High-level performance overview Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ Page 208 of 289
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If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences is being advanced further in line with the development of the DigitalNL work package for the Business Intelligence Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The implementation of the Strategic Performance Framework, and Member’s scrutiny of individual services therein, contributes towards the mitigation of the risks on the Corporate Risk Register for Governance, Leadership, and Decision Making and Managing Strategic Change. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ Page 209 of 289
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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 210 of 289
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Appendix 1 Business and Digital High-level performance overview - as at January 2023 Page 211 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref EK / SL / GT Date 01/03/23 Strategic Performance Framework - latest performance results for Finance From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939 280601 Executive Summary This report has been prepared in line with the Council’s Strategic Performance Framework and enables progress against strategic priorities and day to day operations to be regularly reported to service committees to support Elected Members in their role of monitoring and scrutinising service performance. This can support the identification of areas requiring further investigation or improvement. The report represents the six-monthly Performance Review for Financial Solutions across a range of measures. The Service continues to deal with demand pressures and additional workloads as a result of the lingering effects of the pandemic and cost-of-living support payments, however performance continues to be strong across a number of areas including Council Tax collection and administration of Benefits and Scottish Welfare Fund. There are, however, areas where performance is lower than expected, including with Creditors processing times. The service has an action plan in place to improve service resilience and performance. Recommendations It is recommended that Committee: (1) Review the high-level performance overview presented in Appendix 1, and the supporting data contained within the linked Excel spreadsheet, and identify where further information is required to understand or investigate performance further. The Plan for North Lanarkshire Priority All priorities Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions AGENDA ITEM 18 Page 213 of 289
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1. Background 1.1 There are six inter-related strategic frameworks which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery towards achieving the overall vision by ensuring each stage is appropriately planned, guided, implemented, and governed. 1.2 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self- Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. 1.3 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long- term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.4 The Strategic Performance Framework is aligned to the Accounts Commission statutory direction which places a requirement on councils to report a range of information in terms of (1) improving local services and outcomes, and (2) demonstrating Best Value. Key points of note in this respect are that the Accounts Commission also expect to see: (a) A balance in reporting areas of improvement that have been achieved and not achieved. (b) Reporting that is undertaken in a timely manner. (c) Easy access to performance information for all citizens and communities. 1.5 A Performance Reporting Schedule supports the timely submission of a range of performance information that facilitates Elected Members and senior management to undertake regular performance reviews that inform scrutiny, challenge, and decision making processes. This Schedule, endorsed by the Audit and Scrutiny Panel in February 2023, includes Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 1.6 This report therefore presents the Finance and Resources Committee with the latest performance results for Finance for Members’ further review and scrutiny. 2. Strategic Performance Framework Finance and Resources Committee responsibilities 2.1 In line with the terms of reference outlined in the Scheme of Administration, the Finance and Resources Committee is responsible for monitoring and reviewing performance information for the following Ambition Statements from The Plan for North Lanarkshire: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions 2.2 The high-level performance overview in Appendix 1 presents Members with a summary of the latest results for each performance indicator within the remit of the Chief Officer (Finance). Page 214 of 289
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2.3 The information in Appendix 1 comprises the following: • An ideal direction arrow - this indicates whether a higher or lower figure is the preferred direction of travel. • Measurement unit - for example whether the result is a %, a number, a unit cost (in £), or a ratio. • Performance results for the last four financial years (depending on availability of data) along with the latest year’s target and corresponding RAG status (for indicators where it is appropriate to set targets). • The most recent monthly or quarterly results, along with the corresponding target and RAG status. Note the inclusion of this information is dependent on the measurement frequency of the indicator and availability of data as at the time of reporting. • A trend graph - this captures the direction of travel achieved over the four financial years and includes the most recent monthly or quarterly results where available. • Comments - narrative summarising the current position and providing an explanation for any significant variations in performance. Where applicable, this narrative also highlights the effect of the pandemic on service delivery, e.g. any increase or decrease in the volume of transactions or enquiries processed. 2.4 A large volume of data supports the high-level performance overview in Appendix 1. This is outlined in the latest performance results for Finance Excel spreadsheet which is available through the following link for Members to carry out a deep dive and review and scrutinise each performance indicator further. The Menu on the second tab of the spreadsheet contains built in hyperlinks that automatically take the user to a tab for each performance indicator and therefore provides a useful navigation aid to review the contents of the file. • Latest performance results for Finance.xlsx Current context 2.5 Throughout 2022/23 the service is managing a number of pandemic and cost-of-living related support measures initiated by the Council such as Fuel Hardship Grant to potentially 14,000 eligible residents, Pensioner Fuel Grant to 8,692 eligible residents and the North Lanarkshire Child Payment to the parents / carers of 12,450 eligible children. In addition, the Service continues to administer payments such as the Self- Isolation Support Grant and Scottish Child Payment Bridging Payment on behalf of the Scottish Government. 2.6 Following the end of the pandemic and the developing cost-of-living crisis, the Service has experienced increased demand for service such as Scottish Welfare Fund and other benefit applications. In addition, the insourcing of Culture and Leisure NL and the pace of capital investment activity following the pandemic have both contributed to increasing volumes of creditors payments. Recent performance highlights 2.7 Council Tax collection – Despite the performance measure being linked to year end performance, in-year reporting has highlighted an increased year to date collection rate A higher figure is better A lower figure is better Key to RAG status Performance is on target and/or within acceptable thresholds Performance does not meet target and is outwith acceptable thresholds Performance surpasses the target and exceeds expectations Page 215 of 289
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compared to the same period during 2021/22. This is partially attributable to receipt of funding in support of the Cost of Living Award. 2.8 Benefits administration – average days to process both new claims and changes of circumstances both remain low and well below the target number of days. 2.9 Scottish Welfare Fund – total number of Crisis Grant applications has increased by 14% from the same period last year. Despite this the service continues to meet Scottish Government guidance for decisions to be made within two working days. Areas of performance requiring improvement 2.10 There are two areas identified with a Red RAG status in Appendix 1. • Non domestic rates - % collected in the year highlights 93.68% for 2021/22 against a target of 95.8%. This measures continues to be affected by the pandemic and wider cost-of-living impacts. However, despite the year to date figure for 2022/23 only being 68.08% (9.9% lower than last year) there are encouraging signs. This low year to date figure is largely attributable to later than anticipated payment of rates charges from a number of public sector bodies, including the Council itself. If these payments had been made when anticipated and in line with 2021/22 dates the year to date performance would have been around 82% and shown an improved position. • Payment of invoices - % paid within 30 calendar days of receipt shows a year to date figure of 73.4% compared to 84.5% in 2021/22. The service has been pro- actively managing the creditors position with more staff trained to ensure peak demands can be met. In addition, the service continues to work with frontline service areas to improve the accuracy of payment requests and reduce delays in authorised invoices reaching the Creditors team. The service has an action plan in place to ensure performance improves. Next steps 2.11 As noted in paragraph 1.5, the Strategic Performance Framework is supported by a Performance Reporting Schedule. This sets out the arrangements for statutory, and Strategic Performance Framework reporting to committee. In this respect the relevant committee can expect to receive the following in respect of Finance during 2023/24. Report Description Committee Committee cycle Revenues and Benefits update report This report provides an update on the payment performance for council tax and non-domestic rates and the administration of welfare benefits and Council Tax Reduction Scheme. Finance and Resources Committee Each cycle Treasury Management annual activity report This report fulfils the key requirements of the council’s reporting procedures for Treasury Management in accordance with the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities and reports on the council’s performance in complying with the mandatory prudential indicators. Finance and Resources Committee Cycle 3 in 2023 Financial monitoring report - council This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. Finance and Resources Committee Each cycle Page 216 of 289
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summary (revenue) Financial monitoring report - council summary (capital) This report presents the council’s capital monitoring position for the council’s capital programmes, including general services, housing revenue account, City Deal, etc. Finance and Resources Committee Each cycle Financial monitoring - savings This report provides an update on the achievement of the three-year financial savings targets and progress in implementing one-off investment priorities. Finance and Resources Committee Each cycle Annual accounts (audited) The Local Authority Accounts (Scotland) Regulations 2014 require the council to prepare an annual Statement of Accounts in accordance with proper accounting practices. These regulations also required that, as committee of the authority whose remit includes audit or governance functions, the Audit and Scrutiny Panel meet to consider the audited annual accounts with the aim to approve these for signature no later than 30th September, and to publish these by 31st October immediately following the financial year to which they relate. The Local Authority Accounts (Scotland) Regulations 2014 require the council to prepare an annual Statement of Accounts in accordance with proper accounting practices. These regulations also required that, as committee of the authority whose remit includes audit or governance functions, the Audit and Scrutiny Panel meet to consider the audited annual accounts with the aim to approve these for signature no later than 30th September, and to publish these by 31st October immediately following the financial year to which they relate. Audit and Scrutiny Panel Cycle 2 in 2023 (unaudited accounts) Cycle 3 in 2023 (audited accounts) 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. Page 217 of 289
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4. Supporting documentation 4.1 Appendix 1 - High-level performance overview Elaine Kemp Chief Officer (Finance) Page 218 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 219 of 289
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? 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 220 of 289
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Appendix 1 Finance High-level performance overview - as at January 2023 Indicator id ideal direction unit of measureme nt 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Statutory financial reports - % completed by deadline date i099 higher figure is better % 100.0 100.0 100.0 100.0 100.0 green only measured annually 100.0 All statutory financial reports continued to be completed by the deadline date. Treasury - % of prudential indicators complied with i100 higher figure is better % 100.0 100.0 100.0 100.0 100.0 green only measured annually 100.0 The council continues to achieve 100% compliance with the suite of prudential indicators. Accounts - cost of closure of accounts as a % of gross expenditure i095 lower figure is better % 0.021 0.019 0.019 0.016 0.030 blue only measured annually 0.030 There has been an increase in Gross Expenditure in the Annual Accounts compaired from prior year coupled with a decrease in cost of completion due to staffing restructure, working from home, and change in methodology of overhead allocation due to changes in internal recharges. Accounts - % variation between forecast outturn and actual outturn i096 ideal direction is as close to zero as possible % -0.837 -0.157 0.029 -0.776 0.000 green only measured annually 0.000 Increased year end underspend linked to the reprofiling of loan charges conducted as the service closed down the 2021/22 annual accounts. This created a one-off benefit that wasn't previously included within the projected outturn position and was fully explained within the management commentary of the statutory annual accounts. Council tax - % of income due from council tax collected in the year Pi119 higher figure is better % 94.08 94.08 93.32 94.61 95.0 green 83.10 95.0 The figures for this indicator accumulate during the year; it is only at the year end that the YTD figure is comparable to the target Council tax collection rates as at the end of 2021/22 (94.61%) show an increase from previous years. It is worth noting that the total council tax collected also increased - from £121.8m in 2020/21 to £125.9m in 2021/22. Council tax collected as at end of December 2022 (83.10%) exceeds collection rates for the same period in the previous three years (82.44% as at December 2020, 80.99% as at December 2021, and 82.19% as at December 2019). Council tax collection - cost of collecting council tax per dwelling i093 lower figure is better £ 6.37 6.65 8.65 7.90 10.50 blue only measured annually 10.50 The cost of collecting council tax per dwelling increased in 2020/21 following a reduction in intevention income linked the Covid-19 (reduced income increases the net cost). However, the outcome for 2020/21 was still an improvement on target. Costs have improved in 2021/22, decreasing to £7.90 per dwelling; this reflects a reduction in the overall cost of collecting council tax combined with an increase in the number of domestic properties liable for council tax from 157,998 in 2020/21 to 159,003 in 2021/22. 90.0 92.0 94.0 96.0 98.0 100.0 2018/19 2019/20 2020/21 2021/22 90.0 92.0 94.0 96.0 98.0 100.0 2018/19 2019/20 2020/21 2021/22 0.00 0.01 0.02 0.03 2018/19 2019/20 2020/21 2021/22 -1.00 -0.50 0.00 0.50 1.00 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 4.0 6.0 8.0 10.0 2018/19 2019/20 2020/21 2021/22 Page 221 of 289
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Indicator id ideal direction unit of measureme nt 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Council tax - % payers opting to pay by direct debit i115 higher figure is better % 55.3 55.9 57.5 59.2 54.0 blue only measured annually 54.00 The volume of council tax payers signing up to direct debits continues to show a year on year increase in line with the council's digital ambitions. Over the period of the data provided the number of council tax payers paying by direct debit has increased by almost 22% from 77,154 in 2015/16 to 94,034 in 2021/22. Non domestic rates - % collected in the year Pi120 higher figure is better % 96.30 96.12 92.65 93.68 95.8 red 68.08 95.8 The figures for this indicator accumulate during the year; it is only at the year end that the YTD figure is comparable to the target Non domestic rates collection rates as at the end of 2021/22 (93.68%) show an increase from the previous year (92.65%), but this is still showing signs of being impacted by the pandemic as the levels of income received and the level of income due for 2020/21 and 2021/22 remains lower than pre pandemic levels. During 2022/23 68.08% collection rates as at December 2022 is lower than the same month in previous years but is reflective of the timing of payments from public sector bodies, including from the council itself (payments made in Q4 rather than Q3). Payment of invoices, council wide - % paid within 30 calendar days of receipt i094 higher figure is better % 89.9 84.2 82.5 84.2 96.0 red 73.4 96.0 Council performance in processing invoices in 30 days dipped in 2019/20 as the service was required to support a number of other priorities such as improving Purchase to Pay processes, introduction of electronic invoicing, the introduction / maintenance of Purchase Cards and the initial impact of the pandemic. Results during 2020/21 reflect the impact of the move to large scale working from home (with a number of suppliers continuing to send paper invoices). The service continues to work with administrators and authorisers across the council to reduce the time taken for invoices to reach the Creditors team. Performance for 2021/22 (84.5%) started to show improvement in performance compared to previous years, although year to date figures in 2022/23 (73.4%) has dipped - the service continues to pro- actively manage creditors processing and following the Financial Solutions restructure from April 2022 there is greater resilience and capacity within the team which will improve the time taken for invoices to be paid. Benefits administration - gross cost per case for housing benefits and council tax reduction i039 lower figure is better £ 30.54 12.48 18.09 23.42 27.50 blue only measured annually 27.50 Recent costs of processing claims continues to be significantly below historical levels. The increased value of claims during 2021/22 - combined with a decreased volume of claims - has had an impact on the overall costs per case, but the indicator remains significantly below target. 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 60.0 70.0 80.0 90.0 100.0 2018/19 2019/20 2020/21 2021/22 2022/23 ytd 40.0 60.0 80.0 100.0 2018/19 2019/20 2020/21 2021/22 0.0 10.0 20.0 30.0 40.0 2018/19 2019/20 2020/21 2021/22 Page 222 of 289
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Indicator id ideal direction unit of measureme nt 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Benefits administration - average days to process new claims Pi062 lower figure is better number 24.6 16.8 15.0 13.2 21.0 blue annual indicator measures average days taken for processing; volume of transactions is monitored monthly 21.0 The volume of new claims for housing benefit processed in 2021/22 was 1,627, a decrease from 1,948 in 2020/21 and 1,776 in 2019/20. In 2022/23 to date, the volume of new claims for housing benefit (1,561) is similar to same period in 2021/22 (1,572) but higher than 2020/21 (1,332) and 2019/20 (1,300). The volume of new claims for the council tax reduction scheme processed in 2021/22 was 6,623, a decrease from 9,985 in 2020/11 and 6,976 in 2019/20. In 2022/23 to date, the volume of new claims for housing benefit (5,119) is higher than the same period in 2021/22 (4,965), but lower than 2020/21 (7,963) and 2019/20 (6,298). The change in the volume of new claims for both housing benefit and the council tax reduction scheme has not had a significant impact on processing times which remain low and well below target. Benefits administration - average days to process claims for changes of circumstances Pi063 lower figure is better number 7.4 4.7 4.3 4.1 7.0 blue annual indicator measures average days taken for processing; volume of transactions is monitored monthly 7.0 The volume of claims for changes of circumstances in housing benefit processed in 2021/22 was 38,338, a decrease from 39,649 in 2020/21 and 47,871 in 2019/20. In 2022/23 to date, the volume of claims for changes of circumstances in housing benefit (15,925) is lower than the same period in 2021/22 (19,981), 2020/21 (17,998), and 2019/20 (21,257). The volume of claims for changes of circumstances in the council tax reduction scheme processed in 2021/22 was 133,408, higher than 129,643 in 2020/11 and 86,991 in 2019/20. In 2022/23 to date, the volume of claims for changes of circumstances in housing benefit (60,618) is lower than the same period in 2021/22 (94,393), 2020/21 (83,963) and 2019/20 (46,649). The change in the volume of claims for changes of circumstances for both housing benefit and the council tax reduction scheme has not had a significant impact on processing times which remain low and well below target. Scottish Welfare Fund crisis grants - % decisions made within one day CORP9 higher figure is better % 97.5 100.0 94.8 93.0 n/a only measured annually n/a These four measures have newly been introduced into the Local Government Benchmarking Framework (LGBF) by the Improvement Service as they aim to provide useful and timely insight on policy critical issues such as vulnerability, poverty, and inequality and which will be increasingly important considering the impact of the cost of living. National comparisons will be available at the end of March 2023; at this time the council's performance will be reviewed and appropriate context added. Scottish Welfare Fund community care grants - % decisions made within 15 days CORP10 higher figure is better % 94.8 99.0 88.5 89.8 n/a only measured annually n/a These four measures have newly been introduced into the Local Government Benchmarking Framework (LGBF) by the Improvement Service as they aim to provide useful and timely insight on policy critical issues such as vulnerability, poverty, and inequality and which will be increasingly important considering the impact of the cost of living. National comparisons will be available at the end of March 2023; at this time the council's performance will be reviewed and appropriate context added. Scottish Welfare Fund - % of budget spent CORP11 higher figure is better % 100.7 102.0 66.1 103.2 n/a only measured annually n/a These four measures have newly been introduced into the Local Government Benchmarking Framework (LGBF) by the Improvement Service as they aim to provide useful and timely insight on policy critical issues such as vulnerability, poverty, and inequality and which will be increasingly important considering the impact of the cost of living. National comparisons will be available at the end of March 2023; at this time the council's performance will be reviewed and appropriate context added. Discretionary housing payments - % of funding spent CORP12 higher figure is better % 110.0 111.7 111.2 104.3 n/a only measured annually n/a These four measures have newly been introduced into the Local Government Benchmarking Framework (LGBF) by the Improvement Service as they aim to provide useful and timely insight on policy critical issues such as vulnerability, poverty, and inequality and which will be increasingly important considering the impact of the cost of living. National comparisons will be available at the end of March 2023; at this time the council's performance will be reviewed and appropriate context added. 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2018/19 2019/20 2020/21 2021/22 0.0 5.0 10.0 15.0 20.0 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 60.0 80.0 100.0 120.0 2018/19 2019/20 2020/21 2021/22 60.0 80.0 100.0 120.0 2018/19 2019/20 2020/21 2021/22 Page 223 of 289
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Indicator id ideal direction unit of measureme nt 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Scottish Welfare Fund community care grant - number of applications received i120a number 2019/20 = 4,213 YTD @ Oct 2019 = 2,643 2020/21 = 4,696 YTD @ Oct 2020 = 2,147 2021/22 = 6,417 YTD @ Oct 2021 = 3,770 n/a 2022/23 YTD @ Oct 2022 = 3,621 n/a Graph shows YTD comparisons @ Oct each year Year to date figures in 2022/23 (as at October 2022) show the council received 3,621 applications for community care grants - this is lower than the same period in 2021/221 (3,770 applications) but higher than 2020/21 (2,147) and 2019/20 (2,643). Scottish Welfare Fund community care grant - council spend i120b £ 2019/20 = £1.63m YTD @ Oct 2019 = £1.05m 2020/21 = £1.78m YTD @ Oct 2020 = £0.85m 2021/22 = £2.83m YTD @ Oct 2021 = £1.75m n/a 2022/23 YTD @ Oct 2022 = £1.59m n/a Graph shows YTD comparisons @ Oct each year As can be seen from the trend line in the graph, council spend in respect of community care grants mirrors the increased volume of applications and reflects the maintenance of a Medium priority level for evaluating applications through the financial year. Scottish Welfare Fund crisis grant - number of applications received i121a number 2019/20 = 15,795 YTD @ Oct 2019 = 9,363 2020/21 = 15,965 YTD @ Oct 2020 = 8,632 2021/22 = 18,233 YTD @ Oct 2021 = 9,594 n/a 2022/23 YTD @ Oct 2022 = 10,957 n/a Graph shows YTD comparisons @ Oct each year Year to date figures in 2022/23 (as at October 2022) show the council received 10,957 applications for crisis grants - this is higher than the same period in 2021/22 (9,594 applications), 2020/21 (8,632), and 2019/20 (9,363). Scottish Welfare Fund crisis grant - council spend i121b £ 2019/20 = £0.98m YTD @ Oct 2019 = £0.62m 2020/21 = £1.04m YTD @ Oct 2020 = £0.56m 2021/22 = £1.38m YTD @ Oct 2021 = £0.72m n/a 2022/23 YTD @ Oct 2022 = £0.87m n/a Graph shows YTD comparisons @ Oct each year As can be seen from the trend line in the graph, council spend in respect of crisis grants mirrors the increased volume of applications and reflects the maintenance of a Medium priority level for evaluating applications through the financial year. Discretionary housing payments - number of applications i122a number 2018/19 = 9,735 YTD @ Oct 2018 = 8,696 2019/20 = 10,122 YTD @ Oct 2019 = 8,999 2020/21 = 10,804 YTD @ Oct 2020 = 9,091 2021/22 = 10,861 YTD @ Oct 2021 = 9,670 n/a 2022/23 YTD @ Oct 2022 = 9,691 n/a Graph shows YTD comparisons @ Oct each year Year to date figures in 2022/23 (as at October 2022) show the council received 9,691 applications for discretionary housing payments - this is higher than the same period in 2021/22 (9,670), 2020/21 (9,091), 2019/20 (8,999), and 2018/19 (8,696). Discretionary housing payments - value of awards i122b £ 2018/19 = £4.5m YTD @ Oct 2019 = £4.1m 2019/20 = £5.07m YTD @ Oct 2019 = £4.61m 2020/21 = £6.01m YTD @ Oct 2020 = £5.13m 2021/22 = £6.19m YTD @ Oct 2021 = £5.72m n/a 2022/23 YTD @ Oct 2022 = £5.86m n/a Graph shows YTD comparisons @ Oct each year Council spend in this respect mirrors the increased volume of applications. 0 1,000 2,000 3,000 4,000 2019/20 2020/21 2021/22 2022/23 0 3000 6000 9000 12000 2018/19 2019/20 2020/21 2021/22 0 500,000 1,000,000 1,500,000 2,000,000 2019/20 2020/21 2021/22 2022/23 0 3000 6000 9000 12000 2018/19 2019/20 2020/21 2021/22 2022/23 0 500,000 1,000,000 1,500,000 2019/20 2020/21 2020/21 2021/22 2021/22 0 2,000,000 4,000,000 6,000,000 8,000,000 2018/19 2019/20 2019/20 2020/21 2021/22 Page 224 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref Date 01/03/23 Strategic Performance Framework - latest performance results for Legal and Democratic From Archie Aitken, Chief Officer of Legal and Democratic E-mail AitkenA@northlan.gov.uk Telephone Executive Summary Following a comprehensive restructure of Legal and Democratic in April 2022, the Service comprises the following service areas:- (1) Democratic, with a responsibility for committees, governance arrangements, Members Services, and the administration of Children’s Panels; (2) Enterprise, supporting, with legal advice and representation, all contractual, planning and property matters, together with an advisory and co-ordinating role in respect of data protection and freedom of information; (3) Litigation, which provides all legal advice and assistance, not otherwise within the remits of Enterprise and People, and representation in court proceedings; and (4) People, with responsibility for the Civic Centre complex, community councils, elections, employment law, licensing, registration, serious organised crime/counter- terrorism and veterans issues. Performance across all of these areas is monitored, as required, at fortnightly extended management meetings chaired by the Chief Officer. As can be seen from the above summary of the Service, significant areas of service delivery are carried out in support of other Council Services and, accordingly, performance targets are often not within the sole gift of Legal and Democratic. The indicators set out in Appendix 1, therefore, focus on those areas where the Service does have control of performance. Recommendations It is recommended that the Finance and Resources Committee: (1) Review the high-level performance overview presented in Appendix 1, and the supporting data contained within the linked Excel spreadsheet, and identify where further information is required to understand or investigate performance further. AGENDA ITEM 19 Page 225 of 289
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1. Background 1.1 There are six inter-related strategic frameworks which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery towards achieving the overall vision by ensuring each stage is appropriately planned, guided, implemented, and governed. 1.2 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. 1.3 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long- term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.4 The Strategic Performance Framework is aligned to the Accounts Commission statutory direction which places a requirement on councils to report a range of information in terms of (1) improving local services and outcomes, and (2) demonstrating Best Value. Key points of note in this respect are that the Accounts Commission also expect to see: (a) A balance in reporting areas of improvement that have been achieved and not achieved. (b) Reporting that is undertaken in a timely manner. (c) Easy access to performance information for all citizens and communities. 1.5 A Performance Reporting Schedule supports the timely submission of a range of performance information that facilitates Elected Members and senior management to undertake regular performance reviews that inform scrutiny, challenge, and decision making processes. This Schedule, endorsed by the Audit and Scrutiny Panel in February 2023, includes Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 1.6 This report therefore presents the Finance and Resources with the latest performance results for Legal and Democratic for Members’ further review and scrutiny. 2. Strategic Performance Framework Finance and Resources Committee responsibilities 2.1 In line with the terms of reference outlined in the Scheme of Administration, the Finance and Resources Committee is responsible for monitoring and reviewing performance information for the following Ambition Statements from The Plan for North Lanarkshire: The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Page 226 of 289
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21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. 25. Ensure intelligent use of data and information to support fully evidence based decision making and future planning. 2.2 The high-level performance overview in Appendix 1 presents Members with a summary of the latest results for each performance indicator within the remit of the Chief Officer of Legal and Democratic. 2.3 The information in Appendix 1 comprises the following: • An ideal direction arrow - this indicates whether a higher or lower figure is the preferred direction of travel. • Measurement unit - for example whether the result is a %, a number, a unit cost (in £), or a ratio. • Performance results for the last four financial years (depending on availability of data) along with the latest year’s target and corresponding RAG status (for indicators where it is appropriate to set targets). • The most recent monthly or quarterly results, along with the corresponding target and RAG status. Note the inclusion of this information is dependent on the measurement frequency of the indicator and availability of data as at the time of reporting. • A trend graph - this captures the direction of travel achieved over the four financial years and includes the most recent monthly or quarterly results where available. • Comments - narrative summarising the current position and providing an explanation for any significant variations in performance. Where applicable, this narrative also highlights the effect of the pandemic on service delivery, e.g. any increase or decrease in the volume of transactions or enquiries processed. 2.4 A large volume of data supports the high-level performance overview in Appendix 1. This is outlined in the latest performance results for Legal and Democratic Excel spreadsheet which is available through the following link for Members to carry out a deep dive and review and scrutinise each performance indicator further. The Menu on the second tab of the spreadsheet contains built in hyperlinks that automatically take the user to a tab for each performance indicator and therefore provides a useful navigation aid to review the contents of the file. • Latest performance results for Legal and Democratic.xlsx Current context 2.5 As a result of the service restructure in April 2022, it was necessary to allow a period of time for the new arrangements to be implemented, including a change to the roles and responsibilities of a number of officers and this process was concluded by the end of July in time for the new committee cycle. As a consequence of these changes, the performance indicators for the Service required to be reviewed and those set out in Appendix 1 are currently considered to be the most meaningful. They will, however, be subject to ongoing review to ensure that they set out targets which accurately reflect A higher figure is better A lower figure is better Key to RAG status Performance is on target and/or within acceptable thresholds Performance does not meet target and is outwith acceptable thresholds Performance surpasses the target and exceeds expectations Page 227 of 289
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the operational activities of the Service and are able to be measured against Service specific controls. Recent performance highlights 2.6 With reference to Appendix 1, it can be seen that the ratio of legal versus non-legal work undertaken reflects the continuance in delivery of an efficient and effective service, with a low hourly rate and a high proportion of staff time spent on the delivery of legal advice and support as opposed to management/administration. With regards to the Registration Service, while inspection outcomes are still awaited from National Records of Scotland for the last two calendar years, it is anticipated that accuracy levels will remain in the top quartile nationally, as per the outcomes previously reported on an annual basis, notwithstanding the significant increase in workload over that period and statutory changes to the way the service required to be delivered, as a result of the pandemic. It should be noted that, in respect of Freedom of Information, there has been full recovery from the pandemic’s impacts on service delivery and a return to previous compliance levels has been achieved. Areas of performance requiring improvement 2.7 With reference to Appendix 1, while there are no red indicators in terms of RAG status and, therefore, no identified areas for improvement, each indicator will continue to be closely monitored on a regular basis, as set out in the Executive Summary. Next steps 2.8 As noted in paragraph 1.5, the Strategic Performance Framework is supported by a Performance Reporting Schedule. This sets out the arrangements for service, statutory, and Strategic Performance Framework reporting to committee. In this respect Finance and Resources Committee can expect to receive the following in respect of Legal and Democratic during 2023/24. Report Description Committee cycle Freedom of Information annual report This report provides details of the number of Freedom of Information (FOI) and Environmental Information Requests (EIR) received by the council during the previous financial year and those completed by the statutory deadlines and also provides further comparative and ancillary information. Cycle 3 in 2023 Registration service performance This report provides an update on the performance of the registration service, for the latest calendar year. The performance of the Registration Service provided is monitored annually by the District Examiners from National Records of Scotland. Note production of this report relies on the timely receipt of the respective performance data from the NRS. Cycle 1 in 2023 Annual data protection report This reports on the council’s data protection compliance and activity for the latest financial year in lined with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA) which came into force on 25 May 2018. The report is from the council’s Data Protection Officer (DPO) and provides an update, following the introduction of the legislation, in relation to data sharing, breaches, complaints, and training. Cycle 1 in 2023 Page 228 of 289
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3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix 1 - High-level performance overview Chief Officer of Legal and Democratic 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 have 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 have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? Page 229 of 289
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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 have 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 ☐ 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)? Page 230 of 289
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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 231 of 289
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Appendix 1 Legal and Democratic High-level performance overview - as at January 2023 Indicator id ideal direction unit of measurem ent 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Freedom of information - % of requests responded to within 20 working days i112 higher figure is better % 98.3 98.8 94.6 98.3 100.0 green only measured annually 100.0 Compliance levels during 2020/21 can largely be attributed to the effects of the pandemic, particularly in the first quarter of 2020/21 following changes to ways of working and delivering services were prioritised. The Coronavirus (Scotland) (No. 2) Act which revoked the extension that had been made to FOI timescales on 27 May, also had an effect on compliance in quarter one - as the council had been working to the extended 60 day timescale and had little time to adjust to the return of the 20 day timeframe. The remainder of 2020/21 saw a return to more typical levels of compliance and the final rate for 2020/21 is in the range considered “good” by the Scottish Information Commissioner. Compliance levels in 2021/22 (98.3%) have returned to pre pandemic levels. Legal services - cost per hour of providing the legal service function i102 lower figure is better £ £47.26 £30.15 £32.23 £32.48 £44.76 blue only measured annually £32.19 As apportion expenses were removed in 2019/20, a new formula for calculating the indicator was introduced for 2020/21 onwards but the targets were not revised accordingly. Revised targets in line with the new formula will be introduced from 2022/23 onwards. Legal services - hours spent delivering legal services as a percentage of all staff hours in the service i101 higher figure is better % 84.3 80.9 80.8 84.1 100.0 green only measured annually 100.0 Latest results for 2021/22 show that 84.1% of hours spent delivering legal services can be attributed to proportion of hours that solicitors and paralegals spend on specific legal work (as opposed to management/admin roles) - this shows the high proportion of the service’s time that is spent on service delivery. Registration of events - % of entries without errors i125 higher figure is better % 99.17 99.01 100.0 blue only measured annually 100.0 2021 registers are still being examined by the NRS District Examiner and 2022 has not been started yet. The latest figures (for 2020) show a slightly reduced accuracy rating compared to previousn years; this service was impacted on by Covid restrictions and births and marriages were not being registered at certain points during 2020. Children's panel expenses - % processed and passed for payment within 3 working days i122 higher figure is better % n/a n/a n/a n/a n/a n/a only measured annually New measure from 2023/24 onwards. Appeals hearings - % acknowledged within 5 working days i035 higher figure is better % 100.0 100.0 100.0 100.0 100.0 blue only measured annually 100.0 The council has a duty to respond to requests to hold education exclusion and school placing request appeal hearings within the required statutory periods; all 48 hearings requested during 2021/22 were acknowledged within 5 working days. Appeals hearings - % heard within 28 calendar days i036 higher figure is better % 100.0 100.0 100.0 97.9 100.0 green only measured annually 100.0 The council has a duty to respond to requests to hold education exclusion and school placing request appeal hearings within the required statutory periods. Appeals about placing requests and exclusions are heard by an appeal committee, set up and maintained by the education authority. During 2021/22 there were 47 out of 48 appeals hearings heard within 28 calendar days. Appeals hearings - % decision notifications made within 14 calendar days i037 higher figure is better % 100.0 100.0 100.0 100.0 100.0 blue only measured annually 100.0 The council has a duty to notify decisions made in terms of education exclusion and school placing request appeal hearings within the required statutory periods. An appeals committee must give its decision within 14 calendar days of the end of the hearing. During 2021/22 all 48 appeals hearing decsions were notified within 14 calendar days. 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 £0.00 £10.00 £20.00 £30.00 £40.00 £50.00 2018/19 2019/20 2020/21 2021/22 75.0 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 80.0 85.0 90.0 95.0 100.0 2018/19 2019/20 2020/21 2021/22 0.00 20.00 40.00 60.00 80.00 100.00 2018/19 2019/20 0.0 20.0 40.0 60.0 80.0 100.0 2018/19 2019/20 2020/21 2021/22 Page 232 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref Date 01/03/23 Strategic Performance Framework - latest performance results for Assets and Procurement From James McKinstry, Chief Officer (Assets and Procurement) E-mail McKinstryJ@northlan.gov.uk Telephone Executive Summary Assets and Procurement Solutions sits within the Enterprise and Communities service area of the council and comprises the following areas - asset management, estates management, enterprise project, forward planning and specification, town and community hub development programme, technical and design, procurement and support, and facility support services. The teams play a key role in leading and delivering on a number of key areas that support the delivery of the place based ambition set out in The Plan for North Lanarkshire. This includes the strategic commercial partnership for the enterprise project, asset rationalisation and development, the corporate asset management plan and property rationalisation, the hub development and delivery programme, climate change - committing to net zero, and improving procurement capability and capacity. The work carried out by the teams also supports the delivery of a number of other key areas across the council such as the new supply programme, economic regeneration delivery plan, planning and place making, city deal, the early learning and childcare expansion programme, additional support needs provision, and the leadership and operating model for the hubs. Performance is measured across many of the above service areas and is monitored by the service’s management team as well as within operational teams. This report provides an update of current performance reflecting the service’s key areas of activity. Recommendations It is recommended that the Finance and Resources Committee: (1) Review the high-level performance overview presented in Appendix 1, and the supporting data contained within the linked Excel spreadsheet, and identify where further information is required to understand or investigate performance further. The Plan for North Lanarkshire Priority All priorities AGENDA ITEM 20 Page 233 of 289
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1. Background 1.1 There are six inter-related strategic frameworks which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery towards achieving the overall vision by ensuring each stage is appropriately planned, guided, implemented, and governed. 1.2 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. 1.3 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.4 The Strategic Performance Framework is aligned to the Accounts Commission statutory direction which places a requirement on councils to report a range of information in terms of (1) improving local services and outcomes, and (2) demonstrating Best Value. Key points of note in this respect are that the Accounts Commission also expect to see: (a) A balance in reporting areas of improvement that have been achieved and not achieved. (b) Reporting that is undertaken in a timely manner. (c) Easy access to performance information for all citizens and communities. 1.5 A Performance Reporting Schedule supports the timely submission of a range of performance information that facilitates Elected Members and senior management to undertake regular performance reviews that inform scrutiny, challenge, and decision making processes. This Schedule, endorsed by the Audit and Scrutiny Panel in February 2023, includes Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 1.6 This report therefore presents the Finance and Resources with the latest performance results for Assets and Procurement for Members’ further review and scrutiny. 2. Strategic Performance Framework Finance and Resources Committee responsibilities 2.1 In line with the terms of reference outlined in the Scheme of Administration, the Finance and Resources Committee is responsible for monitoring and reviewing performance information for the following Ambition Statements from The Plan for North Lanarkshire: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Ambition statement All ambition statements Page 234 of 289
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22. Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners. 2.2 The high-level performance overview in Appendix 1 presents Members with a summary of the latest results for each performance indicator within the remit of the Chief Officer (Assets and Procurement). 2.3 The information in Appendix 1 comprises the following: • An ideal direction arrow - this indicates whether a higher or lower figure is the preferred direction of travel. • Measurement unit - for example whether the result is a %, a number, a unit cost (in £), or a ratio. • Performance results for the last four financial years (depending on availability of data) along with the latest year’s target and corresponding RAG status (for indicators where it is appropriate to set targets). • The most recent monthly or quarterly results, along with the corresponding target and RAG status. Note the inclusion of this information is dependent on the measurement frequency of the indicator and availability of data as at the time of reporting. • A trend graph - this captures the direction of travel achieved over the four financial years and includes the most recent monthly or quarterly results where available. • Comments - narrative summarising the current position and providing an explanation for any significant variations in performance. Where applicable, this narrative also highlights the effect of the pandemic on service delivery, e.g. any increase or decrease in the volume of transactions or enquiries processed. 2.4 A large volume of data supports the high-level performance overview in Appendix 1. This is outlined in the latest performance results for Assets and Procurement Excel spreadsheet which is available through the following link for Members to carry out a deep dive and review and scrutinise each performance indicator further. The Menu on the second tab of the spreadsheet contains built in hyperlinks that automatically take the user to a tab for each performance indicator and therefore provides a useful navigation aid to review the contents of the file. • Latest performance results for Assets and Procurement.xlsx Current context 2.5 Assets and Procurement have streamlined office accommodation across the estate and supported management teams as they have moved to more agile ways of working. The service has continued to progress the development of Community Growth Areas to promote inward investment in North Lanarkshire, delivering new build community hubs with three projects at Newmains / St Brigid’s, Riverside, and Chryston opening later this calendar year, 2023. The service also leads on the implementation of a number of national policy initiatives including full roll out of free school meals, nutritional standards for school meals, and climate change duties. A higher figure is better A lower figure is better Key to RAG status Performance is on target and/or within acceptable thresholds Performance does not meet target and is outwith acceptable thresholds Performance surpasses the target and exceeds expectations Page 235 of 289
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With a significant level of capital and revenue resources under the service’s control, the service closely manages and monitors inflationary and logistical challenges on major capital and revenue projects. Recent performance highlights 2.6 The policy framework that exists for the council’s procurement activity is well developed and in the last procurement and commercial improvement programme (PCIP) the council’s performance assessment moved from quartile 4 to quartile 1. The council has a well established relationship with collaborative framework providers such as Scotland Excel and Hub South West Scotland which enables procurement activities to be progressed in an efficient and effective manner. In relation to the Climate Change agenda, the council has a well-defined five year Climate Plan with good progress being made. Going forward the rate of progress will require ongoing monitoring due to the level of funding and the cost of new technology, albeit there will be a requirement to do so. For school meals the service continuously promotes the benefits of a nutritional meal and the savings it can offer to parents. Areas of performance requiring improvement 2.7 Two indicators which show as requiring improvement relate to the occupancy levels in schools - that being the number of pupils at any given school, compared with the number of spaces within any given school. In the case of primary schools - any school which has occupancy of 80% and above can experience capacity and configuration issues in any given year. A primary school capacity is based on 25 pupils at P1 (or composite classes), 30 pupils at P2 and P3, and 33 pupils at P4 to P7. Understandably, pupils do not present in perfect numbers as per their age and stage. Therefore, a couple of more pupils (say 34 pupils in P3) can require extensive reconfiguration across the whole school. While it is optimal for schools to operate around 80-85% occupancy, this leaves very little room for a drop in occupancy. In secondary establishments, similarly, there are different capacity numbers for practical (20) and non-practical (30) subjects, and a range of subject choices from S3 and above. Again, there is a fine balance to be struck between schools being efficient, and schools experiencing timetable issues due to pupil choice. In both sectors, it is the view from an operational perspective that it is better to have some under occupancy, rather than have over occupancy. Where there is significant under occupancy, the council does look for ways to reduce the capacity of the school while keeping the school sustainable. Different uses of spaces for use by cluster staff, or as touchdown spaces are areas being explored. However, these spaces must be within the right geographical area for the user demand. Equally, capital investment is required to adapt spaces and maintain the secure bubble of the school. Capital funding has in recent years, primarily focused on creating spaces where there is excess occupancy (i.e. too many pupils, too few spaces), rather than on under occupancy. However, the teams in Assets and Procurement will look to work with Education & Families Services, responsible for the delivery of initiatives which could use spaces within establishments - whilst recognising that there is a fine line between Page 236 of 289
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removing some capacity and removing too much capacity which then presents a capacity issue in future years. Next steps 2.8 As noted in paragraph 1.5, the Strategic Performance Framework is supported by a Performance Reporting Schedule. This sets out the arrangements for service, statutory, and Strategic Performance Framework reporting to committee. In this respect the relevant Committees can expect to receive the following in respect of insert Assets and Procurement during 2023/24. Report Description Committee Committee cycle Public Sector Duties Climate Change annual report As part of its climate change duties, the council is required to complete an annual submission to demonstrate that as a public sector organisation it is contributing to the nationally set climate change targets as well as adhering to its other responsibilities in terms of both adaptation and sustainability. Environment and Climate Change Committee Cycle 1 in 2023 Annual procurement report This report discharges the council’s duties in terms of the Procurement Reform (Scotland) Act 2014, to prepare an annual report on its regulated procurement activities. Finance and Resources Committee Cycle 3 in 2023 North Lanarkshire Properties NLP LLP is a limited liability partnership established in 2013 between the council and its wholly owned company, North Lanarkshire Property Investments Ltd. NLP LLP 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. A six-monthly report provides a performance and finance update to Committee. Finance and Resources Committee Cycles 2 and 4 in 2023 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support Page 237 of 289
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the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix 1 - High-level performance overview Chief Officer (Assets and Procurement) Page 238 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have 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 have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 239 of 289
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Managing and monitoring service performance supports the ongoing monitoring of the service’s risk register. 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 240 of 289
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Appendix 1 Assets and Procurement High-level performance overview - as at January 2023 Page 241 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref FW Date 01/03/23 Strategic Performance Framework - latest performance results for People Resources From Fiona Whittaker, Chief Officer (People Resources) E-mail WhittakerF@northlan.gov.uk Telephone 1. Background 1.1 There are six inter-related strategic frameworks which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery towards achieving the overall Executive Summary The Council’s overall performance against the key performance indicators included in this report is largely favourable when taken over time. This comes in the context of particular challenges with absence performance over the course of the pandemic, and the impact of this can be seen within the overall data. Despite these challenges, the Council has recently implemented a revised approach to absence management for non-teaching employees, and we continue to see the benefits of this approach in the figures for 2021/22. Further targeted work within key services and a revised absence policy for teaching employees are also in progress, and these are expected to bring further benefits over the course of 2022/23 and into 2023/24. Finally, the Council has key strengths in terms of its consistently low gender pay gap and strong senior female representation across all services, and these will continue to form a core part of our wider focus on equality and the Council’s ongoing commitment to the Public Sector Equality Duties. Recommendations It is recommended that the Finance and Resources Committee: (1) Review the high-level performance overview presented in Appendix 1, and the supporting data contained within the linked Excel spreadsheet, and identify where further information is required to understand or investigate performance further. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition AGENDA ITEM 21 Page 245 of 289
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vision by ensuring each stage is appropriately planned, guided, implemented, and governed. 1.2 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self- Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. 1.3 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day to day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.4 The Strategic Performance Framework is aligned to the Accounts Commission statutory direction which places a requirement on councils to report a range of information in terms of (1) improving local services and outcomes, and (2) demonstrating Best Value. Key points of note in this respect are that the Accounts Commission also expect to see: (a) A balance in reporting areas of improvement that have been achieved and not achieved. (b) Reporting that is undertaken in a timely manner. (c) Easy access to performance information for all citizens and communities. 1.5 A Performance Reporting Schedule supports the timely submission of a range of performance information that facilitates Elected Members and senior management to undertake regular performance reviews that inform scrutiny, challenge, and decision making processes. This Schedule, endorsed by the Audit and Scrutiny Panel in February 2023, includes Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 1.6 This report therefore presents the Finance and Resources Committee with the latest performance results for People Resources for Members’ further review and scrutiny. 2. Strategic Performance Framework Finance and Resources Committee responsibilities 2.1 In line with the terms of reference outlined in the Scheme of Administration, the Finance and Resources Committee is responsible for monitoring and reviewing performance information for the following Ambition Statements from The Plan for North Lanarkshire: 23. Build a workforce for the future capable of delivering on our priorities and shared ambition. 2.2 The high-level performance overview in Appendix 1 presents Members with a summary of the latest results for each performance indicator within the remit of the Chief Officer (People Resources). 2.3 The information in Appendix 1 comprises the following: Page 246 of 289
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• An ideal direction arrow - this indicates whether a higher or lower figure is the preferred direction of travel. • Measurement unit - for example whether the result is a %, a number, a unit cost (in £), or a ratio. • Performance results for the last four financial years (depending on availability of data) along with the latest year’s target and corresponding RAG status (for indicators where it is appropriate to set targets). • The most recent monthly or quarterly results, along with the corresponding target and RAG status. Note the inclusion of this information is dependent on the measurement frequency of the indicator and availability of data as at the time of reporting. • A trend graph - this captures the direction of travel achieved over the four financial years and includes the most recent monthly or quarterly results where available. • Comments - narrative summarising the current position and providing an explanation for any significant variations in performance. Where applicable, this narrative also highlights the effect of the pandemic on service delivery, e.g. any increase or decrease in the volume of transactions or enquiries processed. 2.4 A large volume of data supports the high-level performance overview in Appendix 1. This is outlined in the latest performance results for People Resources Excel spreadsheet which is available through the following link for Members to carry out a deep dive and review and scrutinise each performance indicator further. The Menu on the second tab of the spreadsheet contains built in hyperlinks that automatically take the user to a tab for each performance indicator and therefore provides a useful navigation aid to review the contents of the file. • Latest performance results for People Resources.xlsx Current context 2.5 It should be noted from the data highlighted in Appendix 1 that levels of short-term absence were significantly affected during 2020/21 by the pandemic and therefore this cannot be used as a comparator for overall absence performance in 2021/22. 2.6 This impact was seen across all Local Authorities and can be seen in the detailed data which shows the Councils data compared to the Scottish and family group average figures. 2.7 Non-teaching related absence in 2020/21 did not decrease to such an extent, and this was due to high levels of absence being seen in frontline services such as Health and Social Care, which have continued to be impacted by the post pandemic and other known system pressures within this sector in 2021/22. 2.8 A similar pattern of reduction in Riddor reportable Health & Safety incidents was seen in 2020/21 due to the reduction of operational activity in some services. Recent performance highlights 2.9 The Council agreed a new Absence Management Policy for non-teaching employees A higher figure is better A lower figure is better Key to RAG status Performance is on target and/or within acceptable thresholds Performance does not meet target and is outwith acceptable thresholds Performance surpasses the target and exceeds expectations Page 247 of 289
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in March 2021, with a much clearer approach to targets and the management of absence stages. This has now been rolled out across all services and is yielding results particularly with respect to our numbers of long-term mental health related absences which have decreased by around 10% over the last 12 months. 2.10 This can be seen in the Councils overall absence performance which has not returned to the previously high levels of absence seen in 2019/20 before the start of the pandemic. 2.11 With respect to the Council’s gender pay gap, the Council performs well in this area and has a stable gender pay gap of around 4% which is significantly lower than the UK average pay gap of 8.3%. 2.12 The Council also has good female representation in its senior positions, including Chief Officers across all services. Areas of performance requiring improvement 2.13 Despite significant improvements seen in overall absence between our comparator years of 2019/20 and 2021/22, and a cumulative reduction of more than 10% over time, levels of absence in non-teaching employees remain high and above the Council’s intended target. 2.14 Our revised Absence Policy is yielding results, but more targeted work is required within key frontline services including Heath & Social Care and Enterprise and Communities to bring levels down further to meet the Councils target of 9.86 days per employee. 2.15 Work is currently underway to revise the Managing Absence Policy for teachers and this will be taken forward in 2023. Although levels of teacher absence are low in comparison to non-teaching employees, the Council’s remains 29th out of 32 Councils in terms of teacher absence and this would suggest that there is room for significant improvement in this area. Next steps 2.16 As noted in paragraph 1.5, the Strategic Performance Framework is supported by a Performance Reporting Schedule. This sets out the arrangements for service, statutory, and Strategic Performance Framework reporting to committee. In this respect the relevant Committees can expect to receive the following in respect of insert service name during 2023/24. Report Description Committee Committ ee cycle End of year absence statistics This reports on the council’s year-end outturn position (including teachers and local government employees) for the average FTE days lost due to sickness absence. JCC for Local Government Employees Cycle 4 of 2023 Public Sector Equality Duties Every two years public bodies covered by the Public Sector Equality Duties (PSED) are required to publish a number of reports and information to evidence how they are meeting the needs of people whose characteristics are protected by the Equality Act 2010 - the PSED (General Duty). Wellbeing and Tackling Poverty Committee / Policy and Strategy Committee Cycle 2 of 2023 Page 248 of 289
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3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix 1 - High-level performance overview Fiona Whittaker Chief Officer, People Resources Page 249 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have 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 have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Changes are planned to the Managing Absence Policy for teachers and these will be fully managed in line with our normal approach. 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 have 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 Page 250 of 289
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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. Page 251 of 289
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Appendix 1 People Resources High-level performance overview - as at January 2023 Indicator id ideal direction unit of measurement 2018/19 2019/20 2020/21 2021/22 2021/22 target 2021/22 RAG status 2022/23 ytd 2022/23 target 2022/23 RAG status trend comments Sickness absence, all employees - average number of days lost per employee Pi132 lower figure is better number 10.39 11.12 7.06 9.46 9.86 green The Council saw a significant drop in overall short term absence during 2020/21 due to the impact of high levels of covid related absence. This pattern was also seen in other Local Authorities. Although levels of short term absence have returned over the last 12 months, we have seen an improvement in our long term absence figures, due to the implementation of our new policy and therefore our end of year outurn has now stabilised at a lower figure. Sickness absence, teachers - average number of days lost per employee Pi133 lower figure is better number 8.01 8.15 4.53 6.43 6.42 green The number of days lost per FTE within teaching positions is generally lower than for non-teaching. A focus on long term absence cases over the last 12 months has also brought benefits to the level of teachers absence which is currently tracking on target. Teacher absence in 2020/21 followed the same pattern of a drop in short term absence over the course of the pandemic. Sickness absence, all employees but excluding teachers - average number of days lost per employee Pi134 lower figure is better number 11.20 12.21 8.05 10.57 9.86 Red The number of days lost per FTE within non- teaching positions is generally higher than for non-teaching and is currently above the target of 9.86. This is primarily driven by levels of absence in frontline services such as Homcare and Waste. Recent joint action on absence between the Adult Health & Social Care Service and the HR team has started to show benefits, and we have seen a reduction in levels of absence within this service in the last three months. Gender pay gap - % gap between average hourly rate of pay for male and female employees Pi136 lower figure is better % 4.65 3.09 4.65 4.90 only measured annually The Councils pay gap of 4.9% compares well with the median UK pay gap figure of 8.3% for the UK as a whole. Equal opportunities - % of women employees in top 5% earners of all employees Pi135 higher figure is better % 61.0 61.5 63.0 61.4 only measured annually The Council performs well in this area and has good female representation across its senior positions in all servcies. RIDDOR - number of reported injuries, diseases, dangerous occurrences Pi143 lower figure is better number 64 60 30 44 only measured annually Overall levels of reportable injuries have shown a positive deacreasing trend over the last 4 years, with a significant drop in 2020/21 due to the impact of the pandemic on operational services. A rise in activity over the last 12 months has seen levels increase however there has not been a return to the highest levels seen in 2018/19. 0.00 5.00 10.00 15.00 2018/19 2019/20 2020/21 2021/22 0.00 2.00 4.00 6.00 8.00 10.00 2018/19 2019/20 2020/21 2021/22 0.00 5.00 10.00 15.00 2018/19 2019/20 2020/21 2021/22 0.00 2.00 4.00 6.00 8.00 10.00 2018/19 2019/20 2020/21 2021/22 0.0 20.0 40.0 60.0 80.0 2018/19 2019/20 2020/21 2021/22 0 20 40 60 80 2018/19 2019/20 2020/21 2021/22 Page 252 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref IM/JR Date 01/03/23 Land Re-allocation – Former YMCA & 303 Brandon Street, Motherwell, ML1 1RS From James McKinstry, Chief Officer (Assets & Procurement) E-mail martini@northlan.gov.uk Telephone Ian Martin 07966 397637 1. Background 1.1 The Council purchased the YMCA building on 27th March 2020 to enable the redevelopment of the building as part of the New Build programme. 1.2 The Public Convenience on Crosshill Street was declared surplus at the Community Services (Community Development) Sub Committee on 16th November 2006. The former janitor’s house at 47 Crosshill Street was declared surplus at the Housing & Technical Services committee on 8th February 2007. The remainder of the 303 Brandon Street site was declared surplus at the Planning and Environment committee on 28th March 2007. Executive Summary The purpose of this report is to seek committee approval for the transfer of a building and land held by General Services for inclusion in the new build programme. Recommendations It is recommended that the Finance and Resources Committee: 1) approves the land transfer of the former YMCA building and the 303 Brandon Street site from General Services to Planning and Regeneration on the terms detailed in Section 2.2 of this report. 2) all other terms and conditions to be adjusted by the Chief Officer of Assets & Procurement. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth AGENDA ITEM 22 Page 253 of 289
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2. Report 2.1 Description The development site comprises a former YMCA building and a cleared former school site at 303 Brandon Street with access via Crosshill Street. The entire site area is 1.4 acres or thereby. This consists of the YMCA building site comprising 0.29 acres and the 303 Brandon Street site comprising 1.1 acres or thereby. The former YMCA building is Category B Listed, was designed by Alexander Cullen and completed in 1898. The property comprises a traditional red sandstone three storey building surmounted by a series of pitched slate covered roofs. The property is currently in a state of disrepair and the rear of the building was demolished in 2022. The remainder of the site (303 Brandon Street) consisted of the former St Joesph’s High School and the associated janitor's house, subsequently used as NLC office buildings for Planning and Regeneration and a former public convenience located on Crosshill Street. The proposal is to develop 48 social housing units as part of the council’s overall transformation strategy. The proposed development would redevelop the former YMCA building into 6 flats and provide a new build development of 42 new build flats. There will be a mix of 1,2 & 3 bed flats, some with lift and wheelchair access. 2.2 Re-allocation The contractor has carried out site investigation works and submitted an assessment of abnormal development costs. The costs relate to upgraded foundations, invasive weeds and service diversion. The New Supply team have fully assessed the costs and have confirmed that they are reasonable given the extent of the works required. The amount of abnormal development costs has been confirmed at £93,431. The headline value of the land is £846,000 and therefore to competently complete this transfer, a capital sum of £752,569 is to be paid from the Housing Revenue Account to the General Services Account. The transfer sum reflects the abnormal development costs required in developing this site. 3. Measures of success 3.1 The residential development will regenerate a brownfield site and help the council meet its new supply targets contributing to meeting local housing need, while creating new residential units for social rent. 4. Supporting documentation Appendix 1 – Location Plan. JAMES MCKINSTRY Chief Officer of Assets & Procurement Page 254 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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? This development will help address inequality through the provision of high-quality housing for rent which will help address housing need. The properties will be built to Housing for Varying Needs standards making them more accessible for people with a physical disability. 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? HRA has confirmed that there are sufficient funds within their budget to pay for the internal transfer. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 ☐ Page 255 of 289
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If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The new homes will be more energy efficient contributing to the reduction in CO² emissions. 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 256 of 289
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Appendix 1 – Location Plan Page 257 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref IM/JR Date 01/03/23 Land Re-allocation – Petersburn Primary School Site, Petersburn Road, Airdrie, ML6 8DX From James McKinstry, Chief Officer (Assets & Procurement) E-mail martini@northlan.gov.uk Telephone Ian Martin 07966 397637 1. Background 1.1 Petersburn Primary School was declared surplus at the Education and Families committee on 15th May 2020. The demolition of the school was completed in February 2021. 2. Report 2.1 Description The development site comprises the former Petersburn Primary School which was demolished in 2021. The 3.59 acre or thereby site, is predominately rectangular in shape and located in a mainly residential area. Executive Summary The purpose of this report is to seek committee approval for the transfer of land held by Education and Families for inclusion in the new build programme. Recommendations It is recommended that the Finance and Resources Committee: 1) Approves the land transfer of the former Petersburn Primary School site from Education and Families to Planning and Regeneration on the terms detailed in Section 2.2 of this report. 2) All other terms and conditions to be adjusted by the Chief Officer of Assets & Procurement. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth AGENDA ITEM 23 Page 259 of 289
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The site is situated next to the Petersburn Family Centre and St Dominics Primary School. Part of the original site (79 sqm) was transferred to Petersburn Family Centre to accommodate garden amenity space for the centre. The proposal is to develop 40 NLC social housing units as part of the council’s overall transformation strategy. The proposed development would consist of a mix of terraced, semi-detached houses, bungalows and cottage flats. Planning permission for the site was achieved on 22nd September 2022, with development programmed to start in early 2023. 2.2 Re-allocation The building contractor has carried out site investigation works and submitted an assessment of abnormal development costs. The costs relate to trench fill foundations, retaining walls and an acoustic fence. The New Supply team have fully assessed the costs and have confirmed that they are reasonable given the extent of the works required. The amount of abnormal development costs has been confirmed at £367,117. The headline market value of the land is £1,000,000 and therefore to competently complete this transfer, a capital sum of £632,883 is to be paid from the Housing Revenue Account to the General Services Account. The transfer sum reflects the abnormal development costs required in developing this site. 3. Measures of success 3.1 The residential development will regenerate a brownfield site and help the council meet its new supply targets contributing to meeting local housing need, while creating new residential units for social rent. 4. Supporting documentation Appendix 1 – Location Plan. JAMES MCKINSTRY Chief Officer (Assets & Procurement) Page 260 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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? The development will help address inequality through the provision of high-quality housing for rent which will help address housing need. The properties will be built to Housing for Varying Needs standards making them more accessible for people with a physical disability 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? HRA have confirmed that sufficient funds are within their budget to pay for the internal transfer. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 ☐ Page 261 of 289
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If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The new homes will be more energy efficient contributing to the reduction in CO² emissions. 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 262 of 289
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Appendix 1 – Location Plan Page 263 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref: MB/KH Date: 01 March 2023 Contract Award for LAN/SAN & Server Hardware Supply & Maintenance Services From Chief Officer, Business & Digital E-mail hassellk@northlan.gov.uk Telephone 07903 096121 Executive Summary Committee is asked to approve the award of a contract for Local Area Network/Storage Area Network (LAN/SAN) & Server Hardware Supply & Maintenance (the ‘Contract’) to Virgin Media Business Ltd. The Contract is for a total period of 36 months anticipated to commence on 1/4/2023. The value of the Contract shall not exceed £3,932,110 Pounds Sterling exclusive of VAT. Recommendations It is recommended that Committee approves the award of the Contract to Virgin Media Business Ltd at the maximum value of three million, nine hundred and thirty-two thousand, one hundred and ten Pounds Sterling (£3.932,110) exclusive of VAT. This recommendation follows the completion of a procurement procedure, where the tender recommended for award has been evaluated as providing the most economically advantageous tender in terms of cost and quality for the Council. The Plan for North Lanarkshire Priority All priorities Ambition Statement All ambition statements AGENDA ITEM 24 Page 265 of 289
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1. Background 1.1 The requirements within the Contract are currently under contract with Virgin Media Business Ltd. This contract is due to expire on 31st March 2023 with the Contract detailed within this report due to supersede it. 1.2 Due to the reliance on connectivity for all digital solutions used within the council, there is a requirement to ensure the associated core network components, which are used to manage, secure, control and monitor network activity, are covered under a maintenance provision. Such provision supports the continuity of digital services across corporate, education and public access sites as well as the continued requirement for remote working. Further, there is also a requirement for the contract to provide support for the physical infrastructure, such as servers, storage, and associated services, which reside in the on-premises datacentres. 1.3 In addition, the contract will also offer a provision to supply replacement hardware with maintenance as the above items reach end of support and therefore become beyond secure and economical use. 2. Report 2.1 A user intelligence group (the ‘UIG’) of technical and procurement representatives was formed to review technical specifications, routes to market and to agree the procurement strategy that would deliver maximum benefit for the Council via the Contract. 2.2 The initial estimated value of the Contract 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 “Mini Competition” from the Crown Commercial Services, Network Services 2 framework agreement, RM3808, Lot 2 - Local Connectivity Services. 2.4 The Contract award recommendation is made on the basis of the tenderer who submitted the most economically advantageous tender. 2.5 The tender submitted by Virgin Media Business Ltd was the only bid received and has been evaluated as representing the most economically advantageous tender for this Contract. 2.6 In order to demonstrate value can be achieved from this award, a further benchmarking exercise of the hardware component pricing was carried out as part of the evaluation process; this involved two different engagements as follows: a) The pricing received from Virgin Ltd was evaluated against another framework, RM6068, Technology Products and Associated Services, also capable of offering the services; b) Engagement with Cisco, the manufacturer of the equipment, was carried out to understand what level of discount from RRP was being offered within the tender. 2.7 Appendix 1 confirms the scoring achieved by the tenderer and outlines the findings of the hardware benchmarking comparisons. Further details of the procurement procedure are provided in Appendix 2 with the SME status and location of all tenderers located within Appendix 3. Page 266 of 289
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2.8 The value of the Contract is three million, nine hundred and thirty-two thousand, one hundred and ten Pounds Sterling (£3,932,110) exclusive of VAT. 2.9 The costs associated with contract delivery will be contained within both Revenue for the Hardware Maintenance and Capital budget for the supply of Hardware within Business and Digital. Price Savings / Increases 2.10 There are no savings being offered as part of this contract award. Price Stability 2.11 The maintenance pricing is fixed for the contract term. 2.12 The supply of Hardware from the call off agreement within this contract will fluctuate according to dollar exchange rate however pricing will be fixed for 30 days from quotation and contract management will be applied to constantly benchmark the pricing received throughout the lifetime of the contract. 2.13 The benchmarking exercise discussed in section 2.6 and engagement with Cisco confirmed that the council received on average a 65% discount from RRP within the Virgin tender. The pricing exercise carried out against RM6068 Technology Products and Associated Services demonstrated Virgin Media Business Ltd tender offered best value. Further details can be seen in Appendix 1. Community Benefits 2.14 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. 2.14.1 Within their tender, Virgin Media Business Ltd committed to deliver the following community benefits within the Contract: Community Benefit Type Quantity Committed Supporting basic digital skills for North Lanarkshire: We will work collaboratively with the Council to identify existing, local initiatives and deliver 15 hours of digital skills support via our Connect More programme. 15 Hours 2.14.2 The community benefits delivered as part of the Contract does not include the creation of jobs or apprenticeships. Fair Work First Page 267 of 289
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2.15 Within their tender submission, Virgin Media Business Ltd advised they will commit to key aspects of the Scottish Governments “Fair Work First” initiative: 2.15.1 Virgin Media Business Ltd have committed to paying the Living Wage for key staff involved in the contract and that they do not use zero-hour contracts. Contract Management 2.16 Officers from Business and Digital will be responsible for managing the Contract which will be undertaken in accordance with the council’s agreed approach to contract and supplier management. 3. Measures of success 3.1 The aim of the contract is to appoint a single supplier to support and maintain the council’s LAN/WLAN, storage & servers and establish a direct route to market for call-off requirements to install new LAN hardware equipment as and when required. 4. Supporting documents Appendix 1 Summary of Tender Evaluation Process Appendix 2 Summary of Procurement Process Appendix 3 SME Status and Location of All Tenderers Katrina Hassell Chief Officer of Business and Digital Page 268 of 289
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? - Contract commit volume is within Business and Digital Revenue Budget commitments. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have 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 have 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 ☐ Page 269 of 289
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If Yes, please provide a brief summary of the impact? - This contract is required to manage, secure, control and monitor network activity to be covered under a maintenance provision contract which will help the council deliver digital services. 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. Page 270 of 289
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Appendix 1 – Summary of Tender Evaluation Process Final Rank Tenderer Name Total Tender Score (%) Recommended for Contract Award (Y / N) 1 Virgin Media Business Ltd 100% Y Benchmarking Exercise as mentioned in 2.6 Hardware Component Type Cisco Switch C9200-48T Cisco Switch C9200-48P Cisco Wireless Access Point 9120-AXI-E Estimated Quantity over 3 years 250 250 3500 RRP CISCO £5,227 £7,113 £1,777 Virgin Bid Pricing £2,001 £2,378 £611 RRP Discount % -62% -67% -66% Computacenter Bid Framework RM6068 £1,894 £2,904 £742.43 Virgin Bid Total £500,470 £594,661 £2,139,040 Computacenter Benchmark Total £473,580 £726,080 £2,598,505 Virgin Hardware Bid Total £3,234,171 Computacenter Benchmarking Total £3,798,165 Page 271 of 289
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Appendix 2 – Summary of Procurement Process Response CPT Contract Reference Allocated: NLC-SLP-22-089 Tender Platform Utilised: PCS-Tender (PCST) Procurement Procedure Utilised: Mini Competition Governing Legislation / Regulations: Public Contracts (Scotland) Regulations 2015 Date Contract Strategy Approved: 25 November 2022 Date Contract Notice Published: 29 November 2022 Number of Companies Invited to Take Part: 35 SME % of Expressions of Interest: 0 NLC Based % of Expressions of Interest: 0 Tender Return Deadline: 12/12/2022 Number of Tenders Received: 1 Where Only One Tender Is Received, Why?: The perception is that as the incumbent supplier Virgin receives the greatest level of partner discount from Cisco RRP this would have negatively impacted the Framework competitors’ advantage on bidding. Tenders Received from SME’s: 0 Tenders Received from NLC Based Tenderers: 0 Number of Non−compliant Tenders: 0 Number of Compliant Tenders: 1 Number of Recommended Tenderers: 1 Basis of Contract Award: Quality: 60% Price: 40% Evaluation Team: Mark Brennan – Supplier Manager (Price Assessor) Viki Forsyth - Infrastructure Team Leader (Quality) Tracey Hughes - Infrastructure Team Leader (Quality) Nicola Stewart - Infrastructure Team Leader (Quality) Evelyn Anderson - Infrastructure Team Leader (Quality) Anticipated Contract Start Date: 03 April 2023 Total Contract Period (Months): 36 months Maximum Total Contract Value: £3,932,110 Page 272 of 289
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Appendix 3 – SME Status and location of all Tenderers Name of Tenderer Size of Tendering Organisation (Micro, Small, Medium or Large) Location (Local Authority / Council Area) Virgin Media Business Ltd Large Reading Page 273 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref: FW/JH Date: 01 March 2023 Contract Award for HR Case Management Solution From Fiona Whittaker, Chief Officer, People Resources E-mail Whittakerf@northlan.gov.uk Telephone 07973 728628 Executive Summary In the absence of Committee, Chief Executive Approval was sought (in accordance with General Contracts Standing Orders 21.3.2) to expedite the contract award for an HR Case Management Solution (the ‘Contract’) to CDW Limited. This approval was granted on the 31st October 2022. The Contract is for an initial period of 12 months commencing on 1st November 2022. The Council may seek the option to extend the contract for 12 months plus another extension period of 14 months and 15 days. This extension period will align this contract with the current ITSM contract with CDW Limited. The value of the Contract shall not exceed one million, three hundred and twenty-seven thousand, two hundred Pounds and sixty eight Pence Sterling (£1,327,200.68) exclusive of VAT. Recommendations It is recommended that Committee notes the approval by the Chief Executive to award the Contract to CDW Limited at the maximum value of one million, three hundred and twenty seven thousand, two hundred Pounds and sixty eight Pence Sterling (£1,327,200.68) exclusive of VAT. This recommendation follows the completion of a procurement procedure, where the tender recommended for award has been evaluated as providing the most economically advantageous tender in terms of cost and quality for the Council. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition Statement (23) Build a workforce for the future capable of delivering on our priorities and shared ambition AGENDA ITEM 25 Page 275 of 289
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1. Background 1.1 The requirements of the Contract have never been contracted before by the Council therefore historical contract information is not available. 1.2 It was recognised as part of very early work on the People and OD (POD) service sprint (M8.3) in 2019 that the service received a large number of enquiries via email and telephone, over 200,000 annually with over 100 different types of enquiry and tasks logged. 1.3 There are over 40 team inboxes managed on a day-to-day basis across 190 staff with no ability to manage demand in any proactive way. There is also no way to track enquiries, causing numerous emails to go back and forth between teams and also between managers and for timeframes around replies to be longer than anticipated. 1.4 Following an option appraisal, ServiceNow (provided by CDW Limited) is the recommended solution to provide a CRM for People and OD and has significant benefits for both the People and OD service as well as for staff and managers across all services. 1.5 The business case was submitted to EAGG on 5 October 2022 and EAGG approved the case to progress with ServiceNow system as the recommended CRM. CMT also approved the progression to procurement on 11 October 2022. 2. Report 2.1 A user intelligence group (the ‘UIG’) of technical and procurement representatives was formed to review technical specifications, discuss trading processes, market conditions and trends, ways to maximise community benefits and sustainability and to agree the procurement strategy that would deliver maximum benefit for the Council via the Contract. 2.2 The procurement procedure was undertaken as a “Direct Award” from the Crown Commercial Services G-Cloud 12 framework agreement for Cloud Software. 2.3 The Contract award recommendation is made on the basis of alignment with the current ITSM contract providing the most economically advantageous tender by increasing existing contracted system capabilities and ensuring maximum efficiencies delivered from compatibility. 2.4 The value of the Contract is one million, three hundred and twenty seven thousand, two hundred Pounds and sixty eight Pence Sterling (£1,327,200.68) exclusive of VAT not including any option to extend the Contract. 2.5 The costs associated with contract delivery will be contained within revenue and capital budgets for Business and Digital. Page 276 of 289
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Price Savings / Increases 2.6 The inefficiences of using email for such large volumes of enquiries and highly manual tasks is the biggest non-financial cost with significant time wasted from emails going back and forth and administrative transactions. Efficiences in time are projected for both POD and managers and further financial savings will be realised as the system beds in. Price Stability 2.7 The contract is awarded on the basis of a fixed price for the duration of the contract. Community Benefits 2.8 The procurement did not include a community benefit requirement as specific community benefit requirements can only be derived from a mini-competition procurement route when using the CCS G-Cloud 12 framework. Fair Work First 2.9 Within their tender submission, CDW Limited advised that they will commit to the areas of the Scottish Governments “Fair Work First” initiative. Contract Strategy 2.10 Officers from the People and OD service will be responsible for managing the Contract which will be undertaken in accordance with the Councils agreed approach to contract and supplier management. 3. Measures of success The Contract will deliver the following outcomes; • Enhancing the digital first, self-service mindset for employee productivity and engagement. • Increases the self-service capabilities of front-line employees, over 4000 of whom currently have little way to interact digitally. • Simplified work environment for POD staff, significantly improving response times • Improvements in employee experience • Reduction in efficiencies and manual tasks • Reduction in data errors and breaches • Integration with iTrent • Significant improvements in time take to resolve enquiries from managers • Ability to widen out to other services – legal, enterprise already looking at it • Dashboard analytics to target communication campaigns, support frequent enquirers and aid performance. Page 277 of 289
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4. Supporting documents Appendix 1 Summary of Tender Evaluation Process Appendix 2 Summary of Procurement Process Appendix 3 SME Status and Location of All Tenderers Fiona Whittaker Chief Officer, People Resources Page 278 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Funding has been secured for capital and revenue spend in line with contract. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Change to way customers interact with POD, change management process discussed and agreed. 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 have 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 279 of 289
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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? Use of more efficient system to manage tasks and enquiries, adds to Digital First ambition. Increases automation and enhances the digital maturity of customers. 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? Increased ability to communicate with employees across all services. 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? Risk register been completed to support the project. Main risks relate to the project not being completed on time due to resource requirements. Project team and plan in place to mitigate this risk. 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 280 of 289
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Appendix 1 – Summary of Tender Evaluation Process Final Rank Tenderer Name Total Tender Score (%) Recommended for Contract Award (Y / N) 1 CDW Limited 100% Y Appendix 2 – Summary of Procurement Process Contract Title Response Procurement Procedure Utilised: This is a Direct award call off contract from the Crown Commercial Services G-Cloud 12 Framework Lot 2 Cloud Software (ref: RM1557.12) Governing Legislation / Regulations: Procurement (Scotland) Regulations 2015 Number of Companies Invited to Take Part: 1 Number of Tenders Received: 1 Where Only One Tender Is Received, Why?: Direct Award from 3rd Party Framework Tenders Received from SME’s: 0 Tenders Received from NLC Based Tenderers: 0 Number of Non−compliant Tenders: 0 Number of Compliant Tenders: 1 Number of Recommended Tenderers: 1 Basis of Contract Award: Quality: 30% Price: 70% Evaluation Team: Jennifer Hardy Yvonne Doyle IT Team Anticipated Contract Start Date: 1st November 2022 Total Contract Period (Months): 12 months plus 12 months plus 14 months and 15 days Maximum Total Contract Value: The value of the Contract shall not exceed one million, three hundred and twenty seven thousand, two hundred Pounds and sixty eight Pence Sterling (£1,327,200.68) Page 281 of 289
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Appendix 3 – SME Status and location of all Tenderers Name of Tenderer Size of Tendering Organisation (Micro, Small, Medium or Large) Location (Local Authority / Council Area) CDW Limited Large London Page 282 of 289
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North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref CG/JMcK Date 01/03/23 Contracts awarded below Committee approval threshold From Chief Officer of Assets and Procurement E-mail mckinstryj@northlan.gov.uk Telephone James McKinstry 07939 281102 1. Background Executive Summary This report notifies the Committee of the contracts awarded between 1 October 2022 to 31 December 2022. It sets out those contracts awarded with a value below the financial threshold requiring Committee approval. Recommendations The Finance and Resources Committee are: • advised of the Contracts awarded below Committee approval threshold between 1 October 2022 to 31 December 2022 as per the process within the Council’s General Contract Standing Orders. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement All ambition statements 1.1 The Councils General Contract Standing Orders (the ‘GCSOs’) outline financial approval thresholds for contracts for goods, works and services. Contract awards above £500,000 for Supplies and Services and above £2,000,000 for Works require approval by the Committee. These contract awards are considered by the Committee on a case-by-case basis. 1.2 Where the value of a contract award is between £50,000 and £500,000 for Supplies and Services and between £500,000 and £2,000,000 for Works, GCSOs require that the Head of Asset and Procurement Solutions award these contracts on behalf of the appropriate Chief Officer. 1.3 The Head of Asset and Procurement Solutions is required to notify Committee on a regular basis of any such contracts awarded on behalf of Procuring Service Areas. AGENDA ITEM 26 Page 283 of 289
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2. Report 3. Measures of success 4. Supporting documentation James McKinstry Chief Officer of Assets and Procurement 2.1 The GCSOs require that contracts in excess of £500,000 for supplies and services and £2,000,000 for works are approved, on a case-by-case basis, by the Committee before award. 2.2 The GCSOs require that contracts with a value above £50,000 but less than £500,000 for Supplies and Services and above £500,000 but less than £2,000,000 for Works are awarded by the Head of Asset and Procurement Solutions on behalf of the appropriate Chief Officer. 2.3 The contracts awarded by the Head of Asset and Procurement Solutions that are under the £500,000 Committee financial approval threshold for Supplies and Services and £2,000,000 for Works in the period from 1 October 2022 to 31 December 2022 are detailed in Appendix 1. 3.1 Contracts support the delivery of Council and service priorities. 3.2 Appointment of contractors who have suitable experience and capability to deliver the required supplies, services or works. 3.3 Contracts awarded by the Council are compliant with GCSOs and procurement legislation. 3.4 The Council’s Contract Register is kept updated by services and management information is comprehensive and accurate. 3.5 Best Value is both demonstrable and achieved. 4.1 Appendix 1 - Summary of contracts awarded. Page 284 of 289
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact 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 have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Where Financial impacts have been identified, they have been established and addressed in each specific Contract Strategy and incorporated into the project. The Council’s Procurement Strategy proposes methods of maximising the delivery of procurement benefits that could bring improved financial return to the Council and the areas wider economy. Certain benefits have a monetary value attached and these will be monitored on a project-by-project basis. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☒ No ☐ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Where HR impacts have been identified, they have been established and addressed in each specific Contract Strategy and incorporated into the project. Contracts awarded by the Council are compliant with GCSOs and procurement legislation. 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 have been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Where Legal impacts have been identified, they have been established and addressed in each specific Contract Strategy and incorporated into the project. Page 285 of 289
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Contracts awarded by the Council are compliant with GCSOs and procurement legislation. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Sustainable procurement is one of the key objectives of the Council’s Procurement Strategy and will have a positive impact, including, embedding sustainable procurement as business as usual and incorporating community benefits into the Councils contracts. Supporting local businesses and SMEs through closer working with colleagues in the Council’s Enterprise department and by making our processes more streamlined and accessible. Where Environmental/Carbon impacts have been identified, they have been established and addressed in each specific Contract Strategy and incorporated into the project. 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? Where Risk impacts have been identified, they have been established and addressed in each specific Contract Strategy and incorporated into the project. Page 286 of 289
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Contract award procedures may be susceptible to legal challenge if they are not discharged in accordance with GCSO and procurement legislation. 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 287 of 289
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Contract Description Contract Award Date Contract Start Date Contract End Date Contract Extension Contract Value (incl extension) (£s) Successful Tenderer Supplies Services Works No of Tenders Received Route* Managed Detection & Response Service (SIEM) 2022-25 11/10/2022 17/10/2022 16/10/2024 16/10/2025 £355,980.00 NCC Group Security Services Ltd Services 1 *DAF3 St Patrick's PS, Shotts - Rewire, Fire Stopping and Redecoration 13/10/2022 14/11/2022 13/09/2023 N/A £1,047,186.8 Clark Contracts Ltd Works 2 CO Palacerigg Master Planner 25/10/2022 01/11/2022 17/03/2025 N/A £150,000.00 Stantec UK Limited Services 1 *DAF3 Hosting, Support & Licensing of Gladstone MRM Booking System 26/10/2022 01/10/2022 31/10/2023 N/A £286,159.07 Softcat PLC Services 1 *DAF3 Adobe Acrobat Licensing 2022- 25 28/10/2022 01/10/2022 30/09/2025 N/A £184,693.55 Softcat PLC Services 1 *DAF3 Total Learning Management System Government (Public Sector) Catalogue Integration Maintenance 2022-26 04/11/2022 04/11/2022 03/11/2024 03/11/2026 £300,000.00 Learning Pool Services 1 *DAF3 Provision of Cash Collection Services 2022-23 01/12/2022 01/12/2022 30/11/2023 N/A £131,681.00 Security Plus + Limited Services 1 *DAF3 Fresh Meats, Cooked Meats & Fresh Fish Lots 1, 3 & 4 01/11/2022 01/11/2022 31/03/2023 N/A £231,130.00 McLay’s Ltd Supplies 1 *DAF3 Fresh Meats, Cooked Meats & Fresh Fish Lot 2 01/11/2022 01/11/2022 31/03/2023. N/A £120,000.00 Brake Bros Ltd Supplies 1 *DAF3 Assistive Technology Client Support Services & Maintenance 2022-23 30/11/2022 01/12/2022 30/11/2023 N/A £207,933.00 David J Robertson T/A Asset Technology Company Ltd Services 1 **N Glencryan School, Cumbernauld - Rewire, Fire Stopping & Redecoration 14/12/2022 16/01/2023 16/07/2023 N/A £1,298,988.2 Clark Contracts Ltd Works 1 ***CO UI Path Licensing 2022-25 15/12/2022 24/12/2022 23/12/2025 N/A £160,185.65 Softcat PLC Services 1 *DAF3 * DAF3 Contracts awarded by Direct Award via the use of external 3rd party frameworks (SVAR, ESPO, SXL) to best value providers APPENDIX 1 – SUMMARY OF BELOW THRESHOLD CONTRACT AWARDS Page 288 of 289
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**N - Contract awarded via the use of the Negotiated Tendering Procedure to incumbent provider to ensure continuity of service provision in the short term for officers who require Assistive Technology Services whilst a review and redesign of future requirements is undertaken for these Services. ***CO - Open procedure contract award where a single bid was received. Key – Procurement Route CO - Contract Open Procedure CR - Contract Restricted Procedure FO - Framework Open Procedure FR - Framework Restricted Procedure FMCC - Mini Comp Council Framework FMC3 - Mini Comp 3rd Party Framework DAFC - Direct Award Council Framework DAF3 - Direct Award 3rd Party Framework DAH&SC - Direct Award Health & Social Care Related Services N - Negotiated Contract EXT - Extension to Contract/Framework Page 289 of 289