Agenda Document Pack - Finance and Resources Committee - 13/09/2023
Perth and Kinross Council · 13 September 2023
Back to Finance and Resources Committee — 13 September 2023 and its agenda
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Securing the future… • Improving services • Enhancing quality of life • Making the best use of public resources Council Building 2 High Street Perth PH1 5PH 06/09/2023 A hybrid meeting of the Finance and Resources Committee will be held in the Council Chamber on Wednesday, 13 September 2023 at 14:00. If you have any queries please contact Committee Services on (01738) 475000 or email Committee@pkc.gov.uk. THOMAS GLEN Chief Executive Those attending the meeting are requested to ensure that all notifications are silent on their device and other devices are in silent mode. Please note that the meeting will be broadcast online and recorded. The recording will be publicly available on the Council’s website following the meeting. Members: Councillor Stewart Donaldson (Convener) Councillor Grant Laing (Vice-Convener) Bailie Chris Ahern Bailie Alasdair Bailey Councillor Peter Barrett Councillor Andy Chan Councillor Dave Cuthbert Councillor Eric Drysdale Councillor John Duff Councillor Angus Forbes Provost Xander McDade Councillor Tom McEwan Depute Provost Andrew Parrott Councillor John Rebbeck Councillor Caroline Shiers Councillor Colin Stewart Page 1 of 136
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Finance and Resources Committee Wednesday, 13 September 2023 AGENDA MEMBERS ARE REMINDED OF THEIR OBLIGATION TO DECLARE ANY FINANCIAL OR NON-FINANCIAL INTEREST WHICH THEY MAY HAVE IN ANY ITEM ON THIS AGENDA IN ACCORDANCE WITH THE COUNCILLORS’ CODE OF CONDUCT. 1 WELCOME AND APOLOGIES/SUBSTITUTES 2 DECLARATIONS OF INTEREST 3 MINUTES 3(i) MINUTE OF MEETING OF FINANCE AND RESOURCES COMMITTEE OF 7 JUNE 2023 FOR APPROVAL (copy herewith) 5 - 6 3(ii) MINUTE OF SPECIAL MEETING OF FINANCE AND RESOURCES COMMITTEE OF 20 JUNE 2023 FOR APPROVAL (copy herewith) 7 - 8 3(iii) MINUTE OF MEETING OF THE EXECUTIVE SUB-COMMITTEE OF FINANCE AND RESOURCES COMMITTEE OF 24 JULY 2023 FOR APPROVAL (copy herewith) 9 - 10 3(iv) MINUTE OF MEETING OF EXECUTIVE SUB-COMMITTEE OF FINANCE AND RESOURCES COMMITTEE OF 30 AUGUST 2023 FOR APPROVAL (copy herewith) 11 - 12 4 REVENUE BUDGET 2023/24 - UPDATE NO 1 Report by Head of Finance (copy herewith 23/242) 13 - 48 5 COMPOSITE CAPITAL BUDGET 2023/28 & HOUSING INVESTMENT PROGRAMME 2023/28 - MONITORING REPORT NO. 1 Report by Head of Finance (copy herewith 23/243) 49 - 86 6 TREASURY ACTIVITY AND COMPLIANCE REPORT 2023/24 QUARTER 1 87 - 106 Page 3 of 136
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Report by Head of Finance (copy herewith 23/244) 7 TRANSFORMATION AND CHANGE STRATEGY 2023/24 - 2027/28 - UPDATE REPORT Report by Chief Executive (copy herewith 23/245) 107 - 136 Page 4 of 136
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FINANCE AND RESOURCES COMMITTEE Minute of hybrid meeting of the Finance and Resources Committee held in the Council Chamber, 2 Hight Street, Perth on Wednesday 7 June 2023 at 2.00pm. Present: Councillors S Donaldson and G Laing, Bailies C Ahern and A Bailey, and Councillors P Barrett, A Chan, D Cuthbert, E Drysdale, J Duff, D Illingworth (substituting for Councillor A Forbes) S McCole (substituting for Depute Provost A Parrott), Provost X McDade, T McEwen and J Rebbeck In Attendance: T Glen, Chief Executive; L Simpson, Head of Legal and Governance Services; B Renton, Executive Director (Communities); S Devlin, Executive Director (Education and Children’s Services); C Mailer (Chief Executive’s Service); K Donaldson, Chief Operating Officer; S MacKenzie, Head of Finance, E Ritchie (Communities), S Walker, L Brady, K Fraser, P Johnstone, S Crawford, A Taylor, N Sutherland, K Molley, R Ramsay and M Pasternak (all Corporate and Democratic Services). Apology: Depute Provost Parrott, Councillors A Forbes, and C Stewart. Councillor S Donaldson, Convener, Presiding. 1. WELCOME AND APOLOGIES The Convener welcomed all those present to the meeting and apologies were noted above. 2. DECLARATIONS OF INTEREST There were no declarations made in terms of the Councillors’ Code of Conduct. 3. MINUTE OF PREVIOUS MEETINGS The minute of meeting of the Finance and Resources Committee of 26 April 2023 was submitted and approved as a correct record. 4. OUTSTANDING BUSINESS STATEMENT Resolved: (i) The contents of the Outstanding Business Statement, be noted. (ii) The removal of all completed actions from the Outstanding Business Statement, be agreed. 5. AUTHORITY TO WRITE OFF DEBTS AND OBSOLETE STOCK There was submitted a report by Head of Finance (23/174) (1) seeking approval to write off identified debts in respect of Sales Ledger; Council Tax (including Water & Wastewater charges); Non-Domestic Rates; Irrecoverable Rents; Housing Benefit Overpayments and Car Park Trading Account Income; (2) seeking approval to write off obsolete stock and write off other miscellaneous balances. 3(i) Page 5 of 136
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Amendment (Councillors J Rebbeck and P Barrett) On a one off / non-recurring basis and specifically in relation to school meal / breakfast club debt, this Amendment proposes to write off the balance at 31 March 2023 of £12,871. Councillors S Donaldson and G Laing agreed to incorporate Councillors J Rebbeck and P Barrett’s amendment into their motion. Resolved: (i) All amounts detailed in section 4 and the attached appendices to this report are written off for accounting purposes, be approved. (ii) It be noted, that whilst these amounts are written off, the files are not closed, and every effort will be made to collect outstanding debt where recovery is cost effective. (iii) The removal of charges for services for people seeking asylum for a further year – see section 5, be approved. (iv) It be approved, that on a one off / non-recurring basis in relation to school meal / breakfast club debt, to write off the balance at 31 March 2023 of £12,871. 6. SERVICE ANNUAL PERFORMANCE REPORT 2022/23 CORPORATE & DEMOCRATIC SERVICES There was submitted a report by Chief Operating Officer (23/175) (1) presenting the Service Annual Performance Report 2022/23 for Corporate and Democratic Services (CDS); and (2) detailing progress over the last year against improvement actions contained within the 2022/23 Service Business Management Improvement Plan. Resolved: The Corporate and Democratic Services’ Annual Performance Report 2022/23 (23/175), be approved. Page 6 of 136
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FINANCE AND RESOURCES COMMITTEE Minute of Special hybrid meeting of the Finance and Resources Committee held in the Council Chamber, 2 Hight Street, Perth on Tuesday 20 June 2023 at 2.00pm. Present: Councillors S Donaldson and G Laing, Depute Provost A Parrott, Bailies C Ahern and A Bailey, and Councillors P Barrett, D Cuthbert, E Drysdale, A Forbes, D Illingworth (substituting for Councillor A Chan), I James (substituting for Councillor J Duff), I Massie (substituting for Councillor J Rebbeck), S McCole (substituting for Provost X McDade), T McEwen and C Stewart. In Attendance: T Glen, Chief Executive; L Simpson, Head of Legal and Governance Services; S Walker, P Johnstone, K Molley, M Pasternak, and R Ramsay (all Corporate and Democratic Services). Apologies: Provost X McDade, Councillors A Chan, J Duff and J Rebbeck. Councillor S Donaldson, Convener, Presiding. 1. WELCOME AND APOLOGIES The Convener welcomed all those present to the meeting and apologies were noted above. 2. DECLARATIONS OF INTEREST There were no declarations made in terms of the Councillors’ Code of Conduct. THE VICE-CONVENER LED DISCUSSION ON THE FOLLOWING ITEM. 3. PERTH AND KINROSS COUNCIL LEADERSHIP REVIEW – NEW EXECUTIVE AND STRATEGIC LEADERSHIP STRUCTURE There was submitted a report by Chief Executive (23/195) providing an update on the Council’s Leadership Review transformation workstream which is a key element of the wider Transformation and Change Strategy 2022/23 to 2027/28. Resolved: (i) The contents of Report 23/195, be noted. (ii) The implementation of the new executive and strategic leadership structure as set out by the Chief Executive; the associated processes for the filling of posts; and consideration of any voluntary severance or voluntary redundancy applications, as appropriate, be approved. (iii) The convening of an Executive Sub-Committee of the Finance and Resources Committee on 24 July 2023 to consider applications for voluntary severance, redundancy and any other potential costs associated with the changes, as appropriate, recommended by the Chief Executive to assist in enabling the implementation of the new strategic leadership structure, be agreed. (iv) The establishment of an Appointment Sub-Committee for the recruitment of Director level posts within the new strategic leadership structure, be agreed. 3(ii) Page 7 of 136
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(v) It be noted that updates on this, and further phases of the Leadership Review, would be reported to future Finance and Resources Committees, in line with agreed reporting arrangements and would be supplemented through Elected Member briefing notes and member briefing sessions. Page 8 of 136
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EXCUTIVE SUB-COMMITTEE OF FINANCE AND RESOURCES COMMITTEE Minute of hybrid meeting of the Executive Sub-Committee of the Finance and Resources Committee held in the Council Chamber, 2 Hight Street, Perth on Monday 24 July 2024 at 1.00pm. Present: Councillors S Donaldson, G Laing, P Barrett, D Cuthbert, E Drysdale, J Duff, and C Shiers. In Attendance: T Glen, Chief Executive; L Simpson, S Walker, P Johnstone, and K Molley (all Corporate and Democratic Services). Councillor S Donaldson, Convener, Presiding. 1. WELCOME AND APOLOGIES The Convener welcomed all those present to the meeting. 2. DECLARATIONS OF INTEREST There were no declarations made in terms of the Councillors’ Code of Conduct. IT IS RECOMMENDED THAT THE PUBLIC AND PRESS SHOULD BE EXCLUDED DURING CONSIDERATION OF THE FOLLOWING ITEM(S) IN ORDER TO AVOID THE DISCLOSURE OF INFORMATION WHICH IS EXEMPT IN TERMS OF SCHEDULE 7A TO THE LOCAL GOVERNMENT (SCOTLAND) ACT 1973 3. VOLUNTARY SEVERANCE AND EARLY RETIREMENT REQUESTS There was submitted a report by Chief Executive (23/210) seeking approval for five requests for voluntary severance and early retirement. Resolved: (i) The contents of Report 23/210, be noted. (ii) The Chief Executive’s proposals to grant early retirement in the interests of efficiency of the service for the chief officers named, be approved. (iii) The Chief Executive’s proposal to grant voluntary severance for the chief officer named, be approved. (iv) It be noted that further updates on the Leadership Review be provided to the Council’s Finance and Resources Committee, as agreed. 3(iii) Page 9 of 136
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EXCUTIVE SUB-COMMITTEE OF FINANCE AND RESOURCES COMMITTEE Minute of hybrid meeting of the Executive Sub-Committee of the Finance and Resources Committee held in MR410, 2 Hight Street, Perth on Wednesday 30 August 2023 at 2.45pm. Present: Councillors S Donaldson, G Laing, P Barrett, D Cuthbert, E Drysdale, J Duff, and C Shiers. In Attendance: T Glen, Chief Executive; L Simpson, S Walker, P Johnstone, and K Molley (all Corporate and Democratic Services). Councillor S Donaldson, Convener, Presiding. 1. WELCOME AND APOLOGIES The Convener welcomed all those present to the meeting. 2. DECLARATIONS OF INTEREST There were no declarations made in terms of the Councillors’ Code of Conduct. IT IS RECOMMENDED THAT THE PUBLIC AND PRESS SHOULD BE EXCLUDED DURING CONSIDERATION OF THE FOLLOWING ITEM(S) IN ORDER TO AVOID THE DISCLOSURE OF INFORMATION WHICH IS EXEMPT IN TERMS OF SCHEDULE 7A TO THE LOCAL GOVERNMENT (SCOTLAND) ACT 1973 3. VOLUNTARY SEVERANCE AND EARLY RETIREMENT REQUESTS There was submitted a report by Chief Executive (23/237) seeking approval of a further request for voluntary severance and early retirement. Resolved: (i) The contents of Report 23/237, be noted. (ii) The Chief Executive’s proposals to grant early retirement in the interests of efficiency of the service for the chief officer named in paragraph 5.1 of Report 23/237, be approved. 3(iv) Page 11 of 136
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Perth & Kinross Council Finance & Resources Committee 13 September 2023 REVENUE BUDGET 2023/24 – UPDATE NO. 1 Contact Officer: Scott Walker, Chief Accountant (Report No. 23/242) 1. PURPOSE 1.1 This report provides an update on progress with the 2023/24 General Fund Revenue Budget based upon the June 2023 ledger, updated for any subsequent known material movements, and the projected financial position of the Housing Revenue Account. 1.2 The total net projected over spend on the 2023/24 General Fund Management Budget is £1.008 million (see Appendix 1). 2. RECOMMENDATIONS 2.1 The Committee is requested to: A. note the contents of the report, B. note the projected outturn for General Fund Services set out in Section 5 and Appendix 1 and 2, C. note the projected outturn for Corporate Budgets set out in Section 6, D. note the funding update provided in Section 7, E. note the projected outturn for the Housing Revenue Account, which is summarised in Section 8 and Appendix 3, F. approve the adjustments to the 2023/24 Management Revenue Budget detailed in Sections 10,11 & 12 and Appendices 1, 2, 4, 5, and 6, G. note the financial risks set out in Section 13 and Appendix 7. 3. STRUCTURE Section 4 Background Section 5 Revenue Monitoring – Service Budgets Section 6 Revenue Monitoring – Corporate Budgets Section 7 Revenue Monitoring – Funding Section 8 Revenue Monitoring – Other Updates Section 9 Issues Arising from Financial Year 2022/23 4 Page 13 of 136
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Section 10 2023/24 Additional Funding Section 11 2023/24 Virements Section 12 2023/24 Movements in Reserves Section 13 Financial Risks Section 14 Conclusions 4. BACKGROUND 4.1 This report updates the Committee on progress with the 2023/24 Revenue Budget. Appendix 1 to this report summarises the current projected year end (outturn) position for each Service based upon the June 2023 ledger, updated for any subsequent known material movements. 4.2 The budget total reflected in Column 1 of Appendix 1 to this report is that approved by the Council in setting the 2023/24 Final Revenue Budget on 1 March 2023 (Report No. 23/72 refers). In addition, adjustments approved by the Finance & Resources Committee on 26 April 2023 (Report No. 23/120 refers) and Executive Sub-Committee of the Finance and Resources Committee on 24 July 2023 (Report No. 23/219 refers) are reflected in Appendix 1 (Column 2). 5. REVENUE MONITORING – SERVICE BUDGETS 5.1 The total net projected under spend on Service budgets, which is summarised in Section 1 of Appendix 1 to this report, is £161,000 which represents 0.04% of total net Service expenditure. 5.2 Details of variances against individual Service budgets are shown in Appendix 2 to this report with the most significant variances summarised below. 5.3 The management of Service over and under spends are considered throughout the financial year and may also form part of the Revenue Budget strategy for future years. 5.4 There remains a risk that the Council continues to experience increases in costs over the short to medium term that are higher than budgeted inflation levels. This is already being seen in the cost of the materials required by property and housing maintenance teams. Going forward, this may continue to have an impact on projected outturns and future years’ budgets. Education & Children’s Services 5.5 The projected outturn for Education & Children’s Services excluding Devolved School Management (DSM) and the Pupil Equity Fund (PEF) is currently anticipated to be on target against budget. The individual elements contributing to this position is summarised in the following table and narrative. Page 14 of 136
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Function Projected Outturn Movement £’000 % £’000 Education Services Over spend 345 0.5 - Children, Young People & Families Under spend (20) (0.1) - Business & Resource Services Under spend (51) 0.7 - Catering Services Under spend (274) (3.8) - TOTAL - - - 5.6 Within non devolved Education Services there is a net projected over spend of £345,000. This is made up of the non-achievement of staff slippage (£253,000), reduced income (£88,000) and loan charges (£36,000) partially offset by savings on non-domestic rates (£32,000). 5.7 In Services for Children, Young People & Families there is a net projected under spend of £20,000. Within this projection there is a net under spend on support for young people and additional income partially offset by projected over spends on legal & translation fees, and client travel partially. 5.8 In Business & Resource Services there is a net under spend of £51,000 due to staff slippage partially offset by reduced school let income. 5.9 In Catering Services there is a net projected under spend of £274,000 due to updated meal projections. 5.10 The Devolved School Management Scheme is currently projected to be on target. However, schools are experiencing challenges in delivering approved staff slippage targets. The budgets for the Devolved School Management scheme are allocated by financial year (April – March), whereas expenditure is incurred by academic year (August – June). 5.11 At this stage of the academic year, expenditure met from the Pupil Equity Fund (PEF) is projected to be £100,000 less than the allocation from the Scottish Government of £1.874 million. Schools are being instructed to use this year’s PEF by 31 March 2024. It is anticipated that the projected under spend on teacher and support costs will be carried forward to 2024/25 to meet commitments. The budgets for the Pupil Equity Fund scheme are allocated by financial year, whereas expenditure is incurred by academic year. Communities 5.12 The projected outturn for Communities is currently anticipated to be £140,000 more than budget, which represents 0.2% of the Service Management Budget. The projected over spend is summarised in the following table and narrative. Page 15 of 136
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Function Projected Outturn Movement £’000 % £’000 Environmental & Consumer Services Over spend 45 0.1 - Planning & Development Over spend 30 0.5 - Housing Over spend 40 0.5 - Business & Resources Over spend 25 0.4 - TOTAL Over Spend 140 0.2 5.13 In Environmental & Consumer Services there is a projected net over spend of £45,000. The projected over spend is made up of additional costs relating to hire costs (refuse collection vehicles), consultancy fees (operational assets) and reduced income in corporate health & safety. These are partially offset by a net projected under spend on fleet management and additional income from Bereavement Services. 5.14 In Planning & Development there is a projected over spend of £30,000 in relation to Perth Harbour. 5.15 In Housing there is a projected over spend of £40,000 due to energy costs at Greyfriars Hostel and void rent loss in relation to housing support properties. 5.16 Within Business & Resources there is a projected over spend of £25,000 due to additional costs at Perth Bus Station. Corporate & Democratic Services 5.17 The projected outturn for Corporate & Democratic Services is currently anticipated to be £282,000 less that budget which represents 1% of the net Service budget. The main movements are summarised in the following table and narrative. Function Projected Outturn Movement £’000 % £’000 Legal & Governance Services Under spend (156) (3.5) - Finance Over spend 43 3.3 - Human Resources Under spend (12) (2.6) - IT & Revenues & Benefits Under spend (157) (1.6) - TOTAL Under spend (282) 1.0 - 5.18 In Legal & Governance, there is a projected under spend / additional income of £156,000 which is primarily a result of additional staff slippage. 5.19 Within Finance there is a projected over spend of £43,000 due to increased external audit fees. 5.20 In Human Resources there is a projected under spend of £12,000, due in the main to staff slippage. Page 16 of 136
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5.21 In Information Technology and Revenues & Benefits there is a projected under spend of £157,000, due primarily to the latest estimates on housing benefit subsidy. 5.22 Whilst the budget is on target across Property, there is a projected under spend on energy and Pullar House which is contributing to additional maintenance activity. Chief Executive Service 5.23 The projected outturn for the Chief Executive’s Service is currently anticipated to be £19,000 less than budget due to staff slippage and additional income. 6. REVENUE MONITORING – CORPORATE BUDGETS 6.1 Included within Section 2 of Appendix 1 is an update on the Council’s Corporate budgets. More information on variances against individual budget headings are set out below. Health & Social care 6.2 The Health & Social Care Partnership will report its first financial monitoring for Perth & Kinross Integration Joint Board (IJB), for the financial year 2023/24, to the IJB’s Audit & Performance Committee on 18 September 2023. 6.3 In setting the 2023/24 final Revenue Budget, the IJB approved the use of Reserves to deliver a balanced position. However, the financial position of the IJB remains challenging due to health and social care continuing to face recruitment challenges, increasing needs and complexities, uncertainty over funding and rising costs particularly within prescribing. 6.4 Any financial implications arising from the IJB will be reported to future meetings of the Finance & Resources Committee. 6.5 In relation to non-devolved functions there is currently a projected under spend of £31,000 which is reflected in Appendix 1. Council Tax Reduction Scheme 6.6 The application of the Council Tax Reduction Scheme is a statutory function for the Council. The promotion and encouragement of take up is a key responsibility for the Council, particularly when households are facing significant pressures on the cost of living. 6.7 The level of expenditure incurred by the Council is dependent upon two main drivers, firstly, the average number of weekly caseload and, secondly, the average value of weekly entitlements. The following graph sets out both variables over the current and previous six financial years. The graph shows a clear increase in the average weekly entitlement whereas the average caseload has been more volatile but has returned to higher levels. Page 17 of 136
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6.8 In the current financial year, the Council is supporting approximately 8,500 households across Perth and Kinross with the Council Tax Reduction Scheme with an average award of £16.65 per week. This results in a projected over spend on the Council Tax Reduction Scheme of approximately £1.2 million which is reflected in Appendix 1. 7. REVENUE MONITORING – FUNDING 7.1 Further information on the Council’s funding is set out within Section 3 of Appendix 1. More information on variances against individual budget headings are set out below. Council Tax Income 7.2 The amount of income the Council will generate from Council Tax is dependent on two main factors, firstly the collection levels and secondly, the number of Band D properties on the Valuation Roll. 7.3 Monitoring of Council Tax collection levels is carried out monthly. The following graph sets out collection performance to 31 July 2023 together with prior year comparative figures for the previous five financial years. Page 18 of 136
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7.4 Between 2018/19 and 2022/23, the average collection figure to 31 August was 46%. The actual collection figure to 31 August 2023 was 46.17% which is an increase of 0.17% compared to the five-year average, but a 0.08% reduction on the comparable position in 2022. 7.5 Secondly, in setting the Council’s Revenue Budget, assumptions are made on increases in the number of Band D equivalent properties. The graph set out below suggests that actual growth levels are in line with budget assumptions. Page 19 of 136
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7.6 Given the 2023/24 collection rate that is set out at paragraph 7.4 above is consistent with previous years, and that the growth in the number of Band D equivalent properties is in line with expectations, it is currently anticipated that Council Tax income is on target for the current year. Non-Domestic Rates 7.7 The actual collection rate to 31July 2023 was 22.89%, compared to 24.06% for the same period in 2022/23. 8. REVENUE MONITORING – OTHER UPDATES Impact on Arm’s Length External Organisations (ALEOs) 8.1 The Council continues to work closely with its three Arm’s Length External Organisations (ALEOs) – Live Active Leisure (LAL), Perth Theatre & Concert Hall (PTCH) and Culture Perth & Kinross (CPK) who make an important contribution to the Corporate Plan through the current Culture, Physical Activity and Sport Strategies approved by Council in May 2023. 8.2 To date, no significant financial issues have been identified relating to Culture Perth and Kinross or Perth Theatre & Concert Hall. 8.3 Live Active Leisure finished 2022/23 with a revenue deficit of £203,000. For 2023/24, LAL has a budgeted deficit of £630,000, which it expects to rise to £1.3 million in 2024/25. For 2023/24, LAL are funding the budgeted deficit from their Reserves and at this stage, there is no ask of the Council. 8.4 LAL’s projected deficits in 2021/22 and 2022/23 did not materialise, which is positive. However, Council officers will work with LAL throughout the year on best/worst/mid-range projections to ensure that the Committee has more certainty about the likely year end position for 2023/24. This will be particularly important to support work on the ALEO budget positions and SLA awards for 2024/25 given the continuing financial challenges which face the Council. Page 20 of 136
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8.5 As part of the ALEO Transformation Review, Glasgow Audit will be commissioned to review the financial resource position of each ALEO and provide some analysis and commentary on financial sustainability and governance. 8.6 The long-term sustainability if the Council’s ALEOs across future financial years will be kept under review with updates provided to future meetings of the Finance & Resources Committee. Tayside Contracts 8.7 The operating environment for Tayside Contracts remains challenging. They continue to experience significant inflationary pressures on the price of staple foods – beyond that of the headline CPI and RPI rates quote more widely. 8.8 Beyond that, negotiations on the 2023/24 pay award are still ongoing. Should the outcome of the negotiations exceed budgeted levels, without sufficient external funding forthcoming, there is a risk that this will cause a further significant risk to the profitability of Tayside Contracts. 8.9 Tayside Contracts are in the process of identifying mitigating actions and the three constituent Councils are looking at how they may assist. Work will continue between officers of the Council and Tayside Contracts to further refine these projections. 8.10 Both of these pressures may impact on the Council in the form of a request for additional financial support, as has been the case in previous financial years and / or the non-achievement of the budgeted income from the share of Tayside Contract’s surplus. 8.11 At this stage, the potential costs of providing additional financial support have not been factored into the Council’s projections. Any proposal to provide additional funding to Tayside Contracts will be brought back to a future meeting of the Finance & Resource Committee for approval by elected members. 8.12 In addition, given the financial challenges facing Tayside Contracts, there is a risk that the budgeted amount from the Trading Operations surplus of £550,000 will not be received in the current year. Housing Revenue Account 8.13 The Housing Revenue Account is currently projected to break even in the current financial year. The main elements are summarised below and set out in Appendix 3. 8.14 Across the Housing Revenue Account activity there is a net projected under spend of £110,000. This is made up of additional income from Interest on Page 21 of 136
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Revenue Balances and Recharges which is partially offset by IT system upgrades and expenditure on decant costs. 8.15 As a result of the variances identified above Capital from Current Revenue will increase by £110,000. 9. ISSUES ARISING FROM FINANCIAL YEAR 2022/23 9.1 In completing the 2022/23 Unaudited Annual Accounts, two issues have been identified which require adjustments to be made to the 2023/24 Management Budget. Devolved School Management / Pupil Equity Fund Balances 9.2 In setting the 2023/24 Final Revenue Budget on 1 March 2023 (Report No. 22/72 refers), the Council approved a projected Devolved School Management (DSM) carry forward of £777,000. However, the final under spends (which included agreed planned carry forwards) on the DSM scheme was £722,000 which is £55,000 less. 9.3 Similarly, the Council approved a projected Pupil Equity Funding carry forward of £300,000. However, the final under spend was £140,000 which is £160,000 less. Schools spent 95% of their total Pupil Equity Funding in 2022/23, a significant improvement on previous years. 9.4 ACTION: The Committee is requested to remove £215,000 from the Education & Children’s Services to reflect the actual Devolved School Management scheme and Pupil Equity Fund balances brought forward from 2022/23. This adjustment is reflected in Appendix 1 (Column 3) to this report and has no overall impact on the level of uncommitted Reserves. Revenue Grants 9.5 Accounting arrangements under International Accounting Standards require that, subject to certain conditions, revenue grants which were received by the Council in 2022/23 but not utilised by 31 March 2023 should be accounted for in Reserves at the end of the financial year. Approval is therefore sought to draw down £9.438 million in 2023/24 from the earmarked Reserve for Revenue Grants. These revenue grants are set out in detail in Appendix 4. 9.6 Approval is now sought to adjust the budgets of Education & Children’s Services (£1.639 million), Communities (£7.744 million) and Health & Social Care (£55,000). 9.7 ACTION: The Committee is asked to approve the adjustments totalling £9.438 million to the above Service budgets (set out in detail in Appendix 4), funded from Reserves, to reflect revenue grants received in 2022/23 in respect of expenditure which will not be incurred until 2023/24. These additional Page 22 of 136
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adjustments are reflected in Appendix 1 (Column 3) to this report and have no overall impact on the budgeted level of uncommitted Reserves. 10. 2023/24 ADDITIONAL FUNDING 10.1 Since the 2023/24 Revenue Budget was updated on 26 April 2023 (Report No. 23/120 refers), the Council has been advised of additional funding for the current financial year from several sources. To ensure that the 2023/24 Management Budget continues to reflect the operational requirements of the Council, several adjustments are required, which are summarised below and included in Appendix 1 and Appendix 5. Scottish Government – Revenue Support Grant: • Teachers Pay Award 2023/24: £4.068 million (Education & Children’s Services (ECS)) • Additional Funding for Summer Holidays: £98,712 (ECS) • No-One Left Behind – Approach to Employability: £322,000 (Communities) 10.2 The Scottish Government has advised that the increase in Revenue Support Grant identified above of £4.489 million will be made through a redetermination of the Council’s Revenue Support Grant. It is therefore necessary to adjust budgets for Education & Children’s Services and Revenue Support Grant. 10.3 ACTION: The Council is asked to approve the adjustments set out at paragraph 10.2 which is reflected in Appendix 1 (Column 4) to this report. Other Funding 10.4 Other funding amounting to £4.856 million will be paid outside the Revenue Support Grant mechanism as Other Grant income and is, therefore, cost neutral in terms of the budget summary. Details of this funding is set out in Appendix 5. 10.5 ACTION: The Committee is asked to note the receipt of £4.856 million of additional resources, with this funding being reflected within Education & Children’s Services, Communities and Health & Social Care as additional grant income. The current projected outturn assumes that all these additional resources will be fully expended in 2023/24 or will be carried forward under the terms of the grant award. 11. 2022/23 VIREMENTS Contribution to/from Capital Fund 11.1 In line with the strategy for managing the Council’s Capital Programme over the medium term, it is recommended that the eventual over or under spend on Page 23 of 136
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Capital Financing Costs and Interest on Revenue Balances be transferred from or to the Capital Fund. 11.2 The latest monitoring indicates a projected under spend on capital financing costs (loan charges) of £130,000 based on the latest treasury management activity and an increase of £633,000 in income from interest on revenue balances due to rising rates. This will result in an increased Contribution to the Capital Fund of £763,000 in the current financial year. 11.3 ACTION: The Committee is requested to approve the virement of £130,000 from the Capital Financing Costs (Loan Charges) Budget and £633,000 to Interest on Revenue Balances with a corresponding increase in the projected Contribution to the Capital Fund. These adjustments have been reflected in Appendix 1 (Column 5) to this report. 11.4 At 31 March 2023, the unaudited Annual Accounts included a Capital Fund balance of £26.343 million. The Capital Fund is currently projected to peak in 2024/25 at approximately £31.6 million, before gradually reducing until fully utilised in 2044/45. Service Virements 11.5 To ensure that the 2023/24 Management Revenue Budget continues to reflect current Service needs and operational requirements there are several virements that are reflected in Appendix 1 (column 5) that have been processed in line with the Scheme of Administration. 12. 2023/24 MOVEMENTS IN RESERVES 12.1 Included at Appendix 6 is an update on the Council’s General Fund Reserves. The appendix includes the following: • Earmarked and unearmarked Reserves as at 31 March 2023 (per unaudited Annual Accounts). • previously approved contributions to and from earmarked Reserves in 2023/24, 2024/25 and 2025/26. • The impact of proposals within this report on earmarked Reserves. • The impact of the latest revenue monitoring on the level of unearmarked Reserves. 12.2 The earmarked Reserves are brigaded under three headings as follows: i. Balances held under statute / regulation – these earmarked Reserves are prescribed under legislation and the Council has limited discretion in how they are applied. ii. Balances held for specific (previously approved) purposes – the purpose of these earmarked Reserves has been previously approved by Council in either the Reserves Strategy or Annual Accounts iii. Balances held for other purposes – the creation of these earmarked Reserves has been approved by Council, but not specific proposals. Page 24 of 136
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12.3 Going forward proposals involving earmarked Reserves under i. and ii. above will be advised to Committee in summary as Council either has limited discretion or previously approved their application. Proposals to apply earmarked Reserves under iii. above will include more detail for elected member consideration. Balances Held Under Statute / Regulation 12.4 The application of these earmarked Reserves was considered earlier in this report in Section 9. Balances Held for Specific (Previously Approved) Purposes 12.5 Theses earmarked Reserves have previously been approved by elected members in their consideration of the Reserves Strategy or Annual Accounts. The proposals listed below are simply about the transfers in and out of earmarked Reserves to take forward approved proposals. • Contribution to 2023/24 Revenue Budget - £12,000 • Culture - £31,000 • Financial Insecurity - £30,000 • Works Maintenance (River Ericht) - £200,000 • Project Feasibility Fund - £115,000 • Working Smarter - £15,000 Balances Held for Other Purposes 12.6 The Transformation & Workforce Management earmarked Reserve was created to provide the funding required to take forward the Transformation and Change Programme as well as fund the financial implications of workforce changes. 12.7 The 2023/24 Revenue Budget, approved by Council on 1 March 2023 included funding to take forward a number of anti-poverty initiatives. This funding will also support work in 2024/25, therefore approval is sought to transfer £74,000 from the Chief Executive’s Service to the earmarked Reserve. 12.8 In addition, approval is sought to transfer £52,000 from the Transformation & Workforce Management earmarked Reserve to ensure completion of several previously approved projects including mental health training and low carbon. 12.9 ACTION: The Committee is asked to approve the net transfer of £22,000 to the Transformation & Earmarked Reserve with adjustments reflected in Appendix 1 (Column 5) to the report. 12.10 Furthermore, under the Framework for Managing Workforce Change, the authority to approve voluntary severance requests sits with the Executive Leadership Team, except for requests from Chief Officers. With that in mind, Page 25 of 136
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approval is sought to draw down £178,000 from the Transformation and Workforce Management earmarked Reserve to fund the voluntary severance requests for seven officers across the Council. These voluntary severance requests will support the delivery of savings previously approved by Council and payback in less than two years. 12.11 ACTION: The Committee is asked to approve the transfer of £178,000 from the Transformation & Earmarked Reserve with adjustments reflected in Appendix 1 (Column 5) to the report. 12.12 The Covid-19 earmarked Reserve is was originally created to address the ongoing impact of the global pandemic. Latterly it has supported initiatives designed to mitigate against the cost of living. 12.13 To that end, approval is sought to transfer funding to the Warm Welcome Fund (formerly known as the Cost of Living Community Fund). This funding would be available for local community groups or organisations in Perth and Kinross to apply for to provide activities and warm spaces for those struggling with the cost of living over the winter months. Groups are being encouraged to work together to develop proposals which meet the needs of their local communities. To ensure that there are enough physical spaces and activities to meet the needs of communities within every ward an additional £50,000 is requested for the Warm Welcome Fund. 12.14 ACTION: The Committee is asked to approve the transfer of £50,000 from the Covid-19 earmarked Reserve to Communities for the Warm Welcome Fund. This adjustment is reflected in Appendix 1 (Column 5) to the report. 12.15 Subject to approval of the proposals included within this report, the level of earmarked Reserves will reduce to £30.361 million. 12.16 When the implications of the revenue monitoring included within Appendix 1 are factored in, unearmarked Reserves reduce to £17.069 million (3.6%). Scottish Crannog Centre 12.17 On 1 February 2023, the Finance & Resources Committee agreed to underwrite up to £210,000 of a contingency allowance for the Scottish Crannog Centre (Report No. 23/30 refers). 12.18 Following that decision, terms were confirmed with the project that this funding would contribute to unforeseen necessary works, not additional works or contract inflation. 12.19 The works on the Scottish Crannog Centre are progressing with a planned completion in Christmas 2023. Currently additional costs are being forecast for third party utilities connections, additional remedial works to existing buildings, additional external works only visible once on site and clarifications in specifications. The Scottish Crannog Centre has subsequently requested Page 26 of 136
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an interim drawdown of £93,000 of the contingency funding from the Council. Additional requests may be made before the contract completes. 12.20 ACTION: The Committee is asked to approve the transfer of £93,000 from unearmarked Reserves to Communities to support the Scottish Crannog Centre. This adjustment is reflected in Appendix 1. 13. FINANCIAL RISKS 13.1 In preparing the Council's 2023/24 Revenue Monitoring, officers have considered the key strategic, operational and financial risks facing the Council over this period. Whilst the risks may be managed in the current financial year, there is the potential for there to be an impact in the future. 13.2 To alleviate the impact these risks may have if they occur, a number of general risk mitigation factors are utilised by the Council which include detailed budget monitoring carried out by Services and having general fund balances available to meet unforeseen expenditure. 13.3 Going forward, new risks will be captured within the body of the report with a summary being maintained in Appendix 7. Budgeted Slippage on Teaching Posts 13.4 Across all Council Services there is an approved staff slippage target of 4%. The ability to manage this target is limited in early learning and childcare and school settings due to the requirement to fill all vacancies as they arise. It is also challenging due to the national requirement to maintain the teacher number ratio. Teaching slippage targets are currently not being met across all school settings. 13.5 As the financial year progresses, Education & Children’s Services will be able to quantify the impact on delivery of the 2023/24 Revenue Budget. If the requirement to maintain the ratio is continued beyond the current financial year, this will inevitably put further pressure on Revenue Budgets as well as restrict where future savings may be drawn from. Services for Children, Young People and Families 13.6 The 2023/24 Revenue Budget, agreed by Council on 1 March 2023 (Report No. 23/72 refers) includes additional non-recurring funding of £1.952 million for Services for Children, Young People & Families budget for 2023/24. Had this additional funding not been provided, the Services for Children, Young People & Families would likely show a projected over spend of £2 million. 13.7 The levels of need remain high following the impact of Covid-19. Recruitment and retention challenges have further exacerbated the situation. Notwithstanding the additional temporary staffing in place, there remains a risk to future revenue Budgets. Future budget projections do not allow for the £380,000 of funding for the REACH team. Page 27 of 136
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Financial Insecurity Funding 13.8 The Council has directed significant levels of non-recurring funding towards the Scottish Welfare Fund and the Financial Insecurity Fund to support vulnerable individuals and families with the cost-of-living pressures in recent years. In addition, the Council has received external funding which it has also directed to provide additional support. 13.9 As things stand, this additional funding will not be available in 2024/25. This will likely result in the Council having to raise the priority rating for the Scottish Welfare Fund to “high, most compelling”, which would be a first for Perth & Kinross Council. It may result in the provision of less dignified support during times of crisis and push households in crisis to community groups that would struggle to cope with the demand. It may also cut across the ambition of Cash-First. 13.10 In the current financial year, the Scottish Welfare Fund and Financial Insecurity Fund has had non-recurring additional funding of £600,000 and £500,000 respectively applied to them. 2023/24 Pay Awards 13.11 The non-teaching pay awards for 2023/24 have not yet settled. There is a risk to both the current year, and future years that the final increases exceed both the current budgetary provision and external funding made available by the Scottish Government. 13.12 Any shortfall could lead to further pressures on Reserves and / or cuts in service delivery. Tayside Contracts 13.13 There is a risk that the Council is required to provide additional funding for Tayside Contracts to contribute towards higher inflation costs, reduced demand for school meals and a pay award that exceeds budgeted levels. 14. CONCLUSION 14.1 Based on the June 2023 ledger, a projected over spend of £1.008 million has been identified in the current financial year. 14.2 This level of projected over spend will result in a reduction in the level of unearmarked Reserves to £17.069 million or 3.6%. 14.3 The financial position of the Council and its partners and ALEOs remains challenging and regular updates will be provided to the Council and the Finance & Resources Committee as the position develops. Page 28 of 136
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APPROVED Name Designation Date Stewart Mackenzie Head of Finance 31 August 2023 Karen Donaldson Chief Operating Officer 31 August 2023 Page 29 of 136
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce Yes Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications Corporate Plan 1.1 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: • Tackling poverty • Tackling climate change and supporting sustainable places • Growing a sustainable and inclusive local economy • Enabling our children and young people to achieve their full potential • Protecting and caring for our most vulnerable people • Supporting and promoting physical and mental wellbeing • Placing communities at the heart of how we work 1.2 This report relates to all these objectives. 2. Resource Implications Financial Page 30 of 136
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2.1 There are no direct financial implications arising from this report other than those reported within the body of the main report. Workforce 2.2 There are no direct workforce implications arising from this report other than those reported within the body of the main report. Asset Management (land, property, IT) 2.3 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments Equality Impact Assessment 2.4 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 2.5 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.3 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.4 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Sustainability 3.5 Under the provisions of the Local Government in Scotland Act 2003 the Council must discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.6 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Page 31 of 136
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4. Consultation Internal 4.1 The Executive Leadership Team have been consulted in the preparation of this report. 2. BACKGROUND PAPERS 2.1 No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES • Appendix 1 – 2023/24 Management Budget • Appendix 2 – General Fund 2023/24 Projected Outturn – Service Analysis • Appendix 3 – Housing Revenue Account 2023/24 Projected Outturn • Appendix 4 – Revenue Grants • Appendix 5 – Other Fundings • Appendix 6 – General Fund Balances • Appendix 7 – Financial Risks Page 32 of 136
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(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 2023/24 Previously Issues Movements Virements Movements 2023/24 Projected Variance Variance Council Approved Arising in in Revised Outturn to to Approved Adjustments From Funding Reserves Mgt Revised Revised Budget (Net) 2022/23 Budget Mgt Mgt Accounts Budget Budget £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 % SECTION 1 Service Budgets Education & Children's Services 230,985 234 1,424 4,167 41 236,851 236,851 0 0.0% Communities 70,439 232 7,744 322 320 496 79,553 79,693 140 0.2% Corporate & Democratic Services 39,596 912 (220) 25 40,313 40,031 (282) (1%) Chief Executive Service 3,712 1,235 (68) 134 5,013 4,994 (19) (0%) Sub - Total: Service Budgets 344,732 2,613 9,168 4,489 32 696 361,730 361,569 (161) (0.0%) SECTION 2 Corporate Budgets Health & Social Care 83,958 3,084 55 (100) 6 87,003 86,972 (31) (0%) Contribution to Valuation Joint Board 1,309 1,309 1,309 0 0.0% Capital Financing Costs 15,137 (130) 15,007 15,007 0 0.0% Interest on Revenue Balances (5054) (633) (5,687) (5,687) 0 0.0% Net Contribution to/(from) Capital Fund 3,099 763 3,862 3,862 0 0.0% Contribution to/(from) Insurance Fund 200 200 200 0 0.0% Trading Operations Surplus (550) (550) (550) 0 0.0% Support Service External Income (2153) (2,153) (2,153) 0 0.0% Tayside Pension Fund 1,725 (70) 1,655 1,655 0 0.0% Apprenticeship Levy 818 138 956 956 0 0.0% Council Tax Reduction Scheme 6,200 6,200 7,400 1,200 19.4% Discretionary Relief 1,104 1,104 1,104 0 0.0% Net Expenditure (General Fund) 450,525 5,697 9,223 4,489 0 702 470,636 471,644 1,008 0.2% SECTION 3 Funding Revenue Support Grant (239,627) (3,722) (4,489) (247,838) (247,838) 0 0.0% Ring Fenced Grant (17,725) 4 (17,721) (17,721) 0 0.0% Non Domestic Rate Income (60,754) (60,754) (60,754) 0 0.0% Council Tax Income (103,914) (103,914) (103,914) 0 0.0% Capital Grant (1,600) (30) (1,630) (1,630) 0 0.0% Total Financing (423,620) (3,748) 0 (4,489) 0 0 (431,857) (431,857) 0 0.0% Financed from/(returned to) Reserves 26,905 1,949 9,223 0 0 702 38,779 39,787 1,008 PERTH & KINROSS COUNCIL GENERAL FUND 2023/24 REVENUE BUDGET - SUMMARY 4 Page 33 of 136
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2023/24 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 30 June 2023) Variance Variance £'000 £'000 Education & Children's Services Total 0 DEVOLVED SCHOOL MANAGEMENT SCHEME (DSM) There are 66 primary schools, 7 secondary schools, 4 all through schools, 46 nurseries and early learning centres and 1 special school within the Council's DSM scheme. Each school has an individual budget, primarily based on pupil numbers. Headteachers are responsible for the annual budgets devolved to them in April each year. The total DSM budget for 2023/24 is £132.051 million including carry forwards. Within the scheme there is a facility allowing for DSM balances, whether surplus or deficit, to be brought forward from the previous financial year. In addition to the resources devolved, balances may also be available to headteachers of schools that have a carry forward. In 2022/23, £722,000 of DSM balances were brought forward. The Devolved School Management Scheme is currently on budget. Schools are experiencing challenges in achieving staff slippage targets. Pupil Equity Fund (100) The majority of schools within Perth & Kinross Council have been allocated a share of £1.874 million of Pupil Equity Funding from the Scottish Government as a ring fenced grant. Schools are being instructed to use this year’s PEF Grant by 31 March 2024 as per the revised Scottish Government guidance. At this time £100,000 is projected to be carried forward into 2024/25 for teacher and support staff costs to the end of the current academic year. 100 Projected carry forward of Pupil Equity Funding. NON DEVOLVED Education Services Nursery Sector (400) Additional slippage due to turnover of staff and appointments at the lower end of pay scales. (32) Projected under spend on non domestic rates. 88 Projected under recovery of income due to reduced attendances at Kids Clubs Primary Sector 1,187 Slippage target currently not being met within primary sector due to requirement to maintain teacher numbers. (312) Education Recovery funding applied towards slippage target. Secondary Sector 48 Staff slippage target not being met. 8 Increased loan charges due to interest rate rises. Special Sector (270) Additional slippage due to recruitment challenges, particularly for pupil support assistants. 28 Increased loan charges due to interest rate rises. Services for Children, Young People & Families (19) Projected under spend taking account of non-recurring funding of £800,000 provided for 2023/24. 84 Projected over spend on legal fees and translation / interpreter services 84 Projected over spend on client travel. (255) The budget for young people with complex behavioural issues, which includes a number of pupils placed within residential schools, is projected to under spend following the provision of £1.152 million of non-recurring 53 Projected over spends on Kinship Care (£32,000), Foster Care (£14,000) and Adoption (£7,000) due to increased demand. 46 There is a projected over spend in relation to supporting care experienced young people (continuing care, supported accommodation) due to a doubling of the number of DWP clients. 94 There is a projected over spend on self directed support (children & disability team - respite provision) due to the level of demand and an increase to the hourly rate paid to clients. (107) Additional grant funding including Unaccompanied Asylum Seeking Children (£84,000) and Wellbank rental income (£23,000). SERVICE Summary of Service Variances 4 Page 35 of 136
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2023/24 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 30 June 2023) Variance Variance £'000 £'000SERVICE Summary of Service Variances Business and Resources Services (70) Additional slippage due to turnover of staff. 19 Reduced income from school lets due to reduction in take up as well as closure of Perth High School pitch. Catering Services (500) Projected under spend within the Early Learning & Childcare 1140 grant for nursery meals based on latest uptake. (74) Projected net under spend on school meals due to uptake. 300 Projected reduction in school meal income. Page 36 of 136
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2023/24 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 30 June 2023) Variance Variance £'000 £'000SERVICE Summary of Service Variances Communities Total 140 ENVIRONMENTAL AND CONSUMER SERVICES Regulation 25 Projected shortfall in Corporate Health and Safety income Operations 35 Additional hire costs for refuse collection vehicles Fleet Management (115) Saving on loan charges due to slippage on planned vehicle replacement programme 100 Additional cost of vehicle materials and repairs Waste Strategy 40 Additional consultancy costs to support the review of operational assets. Bereavement Services (40) Additional income from Bereavement Services PLANNING AND DEVELOPMENT 30 Perth Harbour - projected increase in operating costs /shortfall in income HOUSING 20 Projected increase in energy costs at Greyfriars Hostel 20 Void Rent Loss for housing support properties BUSINESS AND RESOURCES Public Transport Unit / Car Parking Account 25 Perth Bus Station - increased costs Page 37 of 136
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APPENDIX 2 PERTH & KINROSS COUNCIL - GENERAL FUND 2023/24 PROJECTED OUTTURN - SERVICE ANALYSIS (Based on Expenditure to 30 June 2023) Variance Variance £'000 £'000SERVICE Summary of Service Variances Corporate & Democratic Services Total (282) Legal & Governance Services (102) Projected under spend on staff costs. (30) Projected under spend on supplies and services across the function. (24) Projected additional income from licensing and recharges Finance 43 Over spend on external audit fee following increase in charges. Human Resources (24) Projected under spend on staff costs. 12 Projected over spend on supplies and services. Information Technology and Revenues & Benefits (148) Projected under spend on Housing Benefit Subsidy based on latest activity. (9) Minor net under spends. Property 468 Projected overspend on property maintenance across the Council estate (237) Projected under spend on energy based on consumption to date. (231) Projected under spend on Pullar House due to updated inflation assumptions Chief Executive Service Total (19) Core Costs (19) Staff slippage and additional income TOTAL (161) Page 38 of 136
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APPENDIX 3 PERTH & KINROSS COUNCIL - HOUSING REVENUE ACCOUNT 2023/24 PROJECTED OUTTURN (Based on expenditure to 30 June 2023) £'000 (69) Housing Repairs Staff slippage (£72,000), partially offset by additional property costs (£3,000). 10 Improvements Projected over spend on staff costs. 161 Letham, North & South Projected over spends on IT costs (£90,000), staff costs (£20,000), decant costs in relation to burst pipes (£26,000), garden maintenance (£31,000), cleaning (£5,000) and other non-staff related budgets (£9,000). These are partially offset by a projected under spend on sheriff officer fees (and related income) (£20,000). 45 Perth City and Specialist Projected over spends on staff costs (£45,000) and decant costs / disturbance payments relating to burst pipes (£18,000). These are partially offset by additional income from the Common Housing Register (£18,000). 12 Housing Management Projected over spend on staff costs. (45) Administration Increased net income from recharges to and from the Housing Revenue Account (224) Income Additional income from interest on revenue balances (£239,000) partially offset by reduced commercial rentals (£15,000). 110 Capital Financed from Current Revenue As a result of the projected net under spends highlighted above, this is the increase in the amount available to invest in the HRA capital programme from the Revenue Budget. 0 Summary of Service Variances 4 Page 39 of 136
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APPENDIX 4 Revenue Grants Education & Children’s Services Whole Family Wellbeing £781,000 Education Recovery £255,000 Care Experienced Children and Young People £159,000 Other Grants £444,000 Communities Ukraine Tariff Funding £4,521,000 Place Based Investment Programme £1,042,000 Discretionary Fund £409,000 Young Persons Guarantee £196,000 Parental Employability Support Fund £212,000 Other Grants £1,364,000 Health & Social Care Other Grants £55,000 TOTAL £9,438,000 4 Page 41 of 136
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APPENDIX 5 Other Grant Funding Education & Children’s Services Scottish Government – Community Mental Health & Wellbeing £423,000 Scottish Government – Justice Social Work Service - Support Pandemic Recovery Work £311,966 Scottish Government – Ukraine Education Tariff £187,798 Gannochy Trust – Universal Youth Service Partnership £153,402 Communities Scottish Government – No One Left Behind £1,770,000 Scottish Government – Place Based Investment Programme 23-24 £766,000 Scottish Government – Delivery of Rural Community Led Local Development Funding 23- 24 £326,186 Scottish & Southern Electricity Networks – Community Resilience £200,000 Scottish Government – Warm Scottish Welcome £160,000 UK Government – Homes for Ukraine £157,920 Paths for All – Smarter Choices, Smarter Places 23-24 £137,800 Paths for All – Smarter Choices, Smarter Places 23-24 PTU £95,000 Scottish Government – Vacant & Derelict Land Investment Programme £93,809 Health & Social Care UK Government – Asylum Dispersal Scheme Grant £73,000 TOTAL £4,855,881 4 Page 43 of 136
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Appendix 6 General Fund Reserves Update Proposals Included in Report 31/3/23 2023/24 2024/25 2025/26 Balance £m £m £m £m £m £m General Fund Balance 70.046 Balances Held Under Statute / Regulation - Revenue Grants (16.270) 0.800 9.278 (6.192) - Council Tax Income for affordable housing (4.353) (0.083) (0.283) (0.283) (5.002) - Developers Contributions: Affordable Housing (4.298) (4.298) - Car Parking (1.512) (1.512) - Developers Contributions: Commuted Sums (1.242) (1.242) - Devolved School Management (0.722) 0.777 (0.055) 0.000 Sub total (28.397) 1.494 (0.283) (0.283) 9.223 (18.246) Balances Held for Specific (Previously Approved) Purposes 0.000 - Services for Children, Young People & Families (2.139) 1.858 (0.281) - Contribution to 2023/24 Revenue Budget (1.699) 1.687 0.012 0.000 - Perth High School (1.446) 0.450 0.312 (0.684) - Culture (1.172) 0.031 (1.141) - Learning Estate Decants (0.700) 0.700 0.000 - Financial Insecurity (0.680) 0.650 0.030 (0.000) - School Counsellors (0.556) 0.227 0.227 0.102 0.000 - Works Maintenance (0.400) 0.200 (0.200) - Bertha Park High School (0.347) 0.274 (0.073) - Modern Apprentice Scheme (0.340) (0.340) - Project Feasibility Fund (Covid-19) (0.279) 0.115 (0.164) - Cemetery Walls (0.271) 0.076 0.076 0.076 (0.043) - Primary School at Bertha Park (0.270) (0.270) - Perth and Kinross Offer (0.252) 0.252 0.000 - PH20 (0.212) 0.150 (0.062) - Working Smarter (Covid-19) (0.194) 0.015 (0.179) - UCI Cycling World Championships (0.180) 0.180 0.000 - Climate Change (0.153) (0.153) - Ventilation Measures (0.114) 0.090 (0.024) - Salix (0.113) (0.113) - Local Area Partnerships (0.090) (0.090) - Community Investment Fund (0.089) 0.051 (0.038) - Grounds Maintenance ( A9/A85) (0.060) 0.060 0.000 - Local Government Elections 0.000 (0.053) (0.053) (0.053) (0.159) - Financial Assistance (Mod) 0.000 (0.020) (0.020) (0.020) (0.060) Sub total (11.756) 6.632 0.542 0.105 0.403 (4.074) Balances Held for Other Purposes 0.000 - Transformation & Workforce Management (9.530) 2.638 0.260 0.060 0.206 (6.366) - Covid-19 (2.193) 0.479 0.040 (1.674) Sub total (11.723) 3.117 0.300 0.060 0.206 (8.040) Earmarked Reserves (51.876) 11.243 0.559 (0.118) 9.832 (30.360) Uncommitted General Fund Balance 18.170 Impact of Current Year Projected Outturn (1.008) Commitments from unearmarked Reserves (0.093) Updated Uncommitted General Fund Balance 17.069 Percentage of Net Revenue Budget 3.6% Approved Contributions from / (to) Reserves 4 Page 45 of 136
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Appendix 7 FINANCIAL RISKS Risk to Revenue Budget Mitigation 1 Achievement of staff slippage targets, particularly relating to teacher numbers and impact on pupil / teacher ratio - Proactive workforce management - Revenue monitoring - Future budget submissions 2 Increasing demand / need / complexity for services for children, young people and families and reducing budgets. - Proactive management - Revenue monitoring - Future budget submissions 3 Ceasing of additional Financial Insecurity Funding on 31 March 2024. - Proactive management - Revenue monitoring - Future budget submissions 4 Current year non-teaching pay awards - Revenue monitoring - Future budget submissions 5 Support for Tayside Contracts - Tayside Contracts Governance & Strategy Group - Revenue monitoring - Future budget submissions 4 Page 47 of 136
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PERTH & KINROSS COUNCIL Finance & Resources Committee 13 September 2023 COMPOSITE CAPITAL BUDGET 2023/28 & HOUSING INVESTMENT PROGRAMME 2023/28 – MONITORING REPORT NUMBER No.1 Report by Head of Finance (Report No. 23/243) 1. PURPOSE 1.1 This report provides a summary position to date for the 5-year Composite Capital Budget and the 5-year Housing Investment Programme for 2023/24 to 2027/28 and seeks approval for adjustments to the programmes. 2. RECOMMENDATIONS 2.1 It is recommended that the Committee: (i) notes the contents of this report. (ii) approves the proposed adjustments to the five-year Composite Capital Budget 2023/24 to 2027/28 set out in Sections 5 and 6 of this report and summarised in Appendices I and II. (iii) approves the proposed adjustments to the Housing Investment Programme Budget 2023/24 to 2027/28 set out in Section 7 of this report and summarised in Appendix III. 3. STRUCTURE 3.1 This report is structured over the following sections. The format of the report has been updated in light of elected member feedback from workshop sessions held in July : • Section 4: Background / Main Issues • Section 5: Composite Capital Programme – Gross Capital Resources • Section 6: Composite Capital Programme – Expenditure • Section 7: Housing Investment Programme • Section 8: Summary 4. BACKGROUND / MAIN ISSUES 4.1 The Finance & Resources Committee approved an updated six-year gross Composite Capital Budget for 2022/23 to 2027/28 totalling £727,448,000 and a five-year gross Housing Investment Programme for 2022/23 to 2027/28 totalling £87,018,000 at its meeting on 26 April 2023 (report 23/121 refers). 5 Page 49 of 136
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4.2 This report advises on the impact of the final outturn expenditure in 2022/23 on the programmes; expenditure to 31 July 2023, and the latest estimate of the projected outturn for each of the years to 2027/28 for the Composite Programme and for the Housing Investment Programme. 5. COMPOSITE CAPITAL PROGRAMME – GROSS CAPITAL RESOURCES 5.1 The current estimated total gross capital resources (which includes movements in Capital Receipts, Capital Grants, Contributions and borrowing) available over the five years 2023/24 to 2027/28 amount to £623,150,000. Movements from the revised Composite Capital Budget approved on 26 April 2023 for these five years are summarised in the table below, and the constituent elements for each year are shown in Appendix I. Total Gross Composite Capital Resources Approved 26 April 2023 Current Estimate Movement £’000 £’000 £’000 2023/24 198,729 202,214 3,485 2024/25 193,284 196,980 3,696 2025/26 109,577 110,535 958 2026/27 65,408 65,942 534 2027/28 46,605 47,479 874 Total 613,603 623,150 9,547 5.2 The monitoring position has been updated for amounts carried forward from 2022/23 as reflected within the unaudited accounts. The overall movement in the total Gross Resources for the 5 years 2023/24 to 2027/28 shown at Section 5.1 above can be summarised as follows: £’000 Resources Brought-forward from 2022/23: Property Receipts, including carried forward to future years 98 Capital Grants 332 Tay City, Developer, Other Third Party and Revenue Contributions 1,339 Borrowing 6,045 Total Resources Brought-forward from 2022/23 7,814 Increase in Resources from current monitoring: Increase in Commercial Property and other Receipts 381 Increase in Capital Grants (Section 5.3) 151 Increase in Third Party, Revenue and Developer Contributions (Section 5.4) 1,201 Total Increase in Gross Capital Resources (Section 5.1) 9,547 Page 50 of 136
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5.3 There is a net increase of £151,000 in capital grants for various programmes listed below. These have been reflected in the proposed expenditure budgets for these programmes, and are included in Appendix II, as follows: • £353,000 Nature Restoration included in the General Capital Grant (Section 6.3.5) • £30,000 Cycling Walking & Safer Streets (Section 6.3.2) • Less a reduction of £208,000 from the Recycling Improvement Fund (Section 6.3.8), and £24,000 for Gypsy Traveller Site Improvements (Section 6.3.11), reflecting reduced expenditure on the schemes. 5.4 Third Party Contributions have increased by £1,148,000. These relate to £150,000 from TACTRAN for the Cycling Walking & Safer Streets programme (Section 6.3.2), £109,000 from the Forestry Commission for Timber Routes (Section 6.3.3) and £889,000 from Scottish Water on the Commercial Property Investment Programme (Section 6.3.10). Revenue Contributions have increased by a net total of £53,000, with an increased contribution of £125,000 on the Mosaic Implementation Programme (Section 6.4.3), less a reduction in the funding of £72,000 required from the Salix Reserve (Section 6.4.2). 5.5 The projected borrowing requirement in 2023/24, which is effectively the balancing item for resources, is £152,394,000. This is £974,000 higher than the borrowing requirement approved on 26 April 2023. This comprises £6,045,000 of borrowing originally budgeted in 2022/23 which has been brought forward to 2023/24, less a reduction of £5,071,000 arising from the current monitoring exercise. 5.6 The total new borrowing requirement in the subsequent years 2024/25 to 2027/28 has increased by £5,071,000 to £345,480,000, resulting in no overall change in the total level of borrowing across the whole 5-year programme. The movement in borrowing (excluding the amount brought-forward) is summarised as follows: 2023/24 2024/25 2025/26 Later Years Total £’000 £’000 £’000 £’000 £’000 Movements arising from re- phasing of expenditure and receipts (Appendix II) (5,071) 2,830 958 1,283 0 Increase/(Decrease) in Borrowing Requirement (5,071) 2,830 958 1,283 0 5.7 The chart below shows the Capital Resources required to fund the 2023/24 Composite Capital Programme following the proposed budget adjustments detailed in this report. Page 51 of 136
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6. COMPOSITE CAPITAL PROGRAMME – EXPENDITURE 6.1 Total Expenditure and Proposed Budget Adjustments to the Current Programme 6.1.1. Total expenditure (net of grants and contributions) to 31 July 2023 on the Composite Capital Programme amounts to £40,660,000, which is detailed in Appendix II and summarised as follows: Net Expenditure to 31 July 2023 £’000 Education & Children’s Services 13,079 Communities 26,242 Health and Social Care 64 Corporate & Democratic Services 1,275 Total 40,660 6.1.2. A comprehensive monitoring exercise has been carried out, which is detailed in Appendix II, which also includes the various brought forward adjustments from 2022/23 as outlined in Section 5 above. The most significant features are discussed below. 6.1.3. In common with all Scottish local authorities and public and private sector bodies, the Council has experienced significant inflationary pressures on the delivery of its Capital investment programme over the past few years. 6.1.4. The early estimate for the BCIS All-in Tender Price Index, which shows the general movement on construction pricing, forecasts a 1.1% increase between Q1 2023 and Q2 2023 which represents an increase of 4.9% in the year from Q2 2022. By comparison the increase in the year to Q2 2022 from 75.4% 20.3% 0.6% 1.4% 0.9% 1.5% 4.4% Projected Capital Resources 2023/24 (August 2023) Borrowing (£152.394M) Grants (£40.975M) Tay City Deal (£1.257M) Developer Contributions (£2.847M) Third Party & Revenue Contributions (£1.732M) Receipts (£3.009M) £Million Page 52 of 136
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Q2 2021 was 10.3%. While construction costs continue to rise, this forecast indicates that the rate of increase is beginning to reduce. 6.2 Education and Children’s Services 6.2.1 The Executive Director (Education & Children’s Services) has reviewed the programme for their Service and proposes the following budget adjustments. 6.2.2 It was previously agreed that the upgrade works at Kirkmichael Primary School would be funded by a ring-fenced receipt from the sale of the former Straloch Primary School. The actual amount received for Straloch Primary exceeded the original estimate resulting in a further £28,000 for additional upgrades at Kirkmichael Primary School. 6.2.3 The remaining budget adjustments reflect timing differences on various projects, with the main proposed movements detailed in the table below: Project 2023/24 £’000 2024/25 £’000 Later Years £’000 Description Technology Upgrades (250) 0 250 Works programme rephased and extended to the summer holidays in 2025 Harris Academy (150) 150 0 The refurbishment of existing classrooms within the project to be undertaken in summer holidays 2024 6.2.4 There are several other small adjustments to various Education & Children’s Services projects relating to amounts carried forward from 2022/23 which are included in Appendix II. These mostly relate to projects that have been completed. All of the above proposed adjustments have been reflected in Appendices I & II. 6.3 Communities 6.3.1 The Executive Director (Communities) has reviewed the programme for their Service and proposes various budget adjustments, the most significant of which are described below. 6.3.2 Within Traffic & Road Safety, TACTRAN have provided a £150,000 Third Party Contribution towards the Cycling, Walking and Safer Routes (CWSR) programme. This is supplemented by an increase in the Scottish Government Grant of £30,000 which is proposed to be allocated to the Schools Road Safety Measures budget (£28,000) and the CWSR budget (£2,000) in the current year. 6.3.3 With Asset Management – Roads & Lighting, the Forestry Commission have allocated an additional £109,000 to the Council towards Timber Routes, which is included within the Structural Maintenance programme. This has been Page 53 of 136
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added to the 2023/24 budget which, when combined with an acceleration of budget from future years, increases the budget in the current year by £394,000. 6.3.4 Springfield have advised the Council that they will not construct the Perth Transport Futures Phase 3 Bertha Park Link Road themselves, and instead have exercised their legal right to provide an agreed sum through developer contributions over time as house sales are completed. Therefore, it has now become necessary for the Council to undertake the detailed design work for the road. It is proposed that up to £500,000 of the contingency included within the Phase 2 CTLR project is utilised for this design work, and that options for funding the construction, including the use of developer contributions, is considered by Council when it sets the next Capital Budget in February next year. 6.3.5 The Scottish Government has also allocated £353,000 to the Council for the Nature Restoration programme in 2023/24. This has therefore been added to the current year budget within the Other Planning programme, with the grant added to the Council’s General Capital Grant. The budget is also augmented by a small rounding adjustment of £1,000. 6.3.6 Within the City Centre Developments – Cultural Attractions programme, the construction phase of Perth Museum is now complete and the project remains within the total approved budget, with only final fit-out works ongoing, prior to its opening in the spring of next year. 6.3.7 The Letham Hub project is scheduled to conclude prior to Christmas 2023. Members are advised that the contractor has submitted a number of claims for an extension of time and a corresponding substantial financial claim. This is currently being evaluated and will be subject to ongoing discussion with the contractor. There is no request for additional funding at this time. 6.3.8 Within Waste Strategy, a reduction in expenditure of £208,000 has also meant the level of grant funding from the Recycling Improvement Fund has been reduced by a corresponding amount in the current year. 6.3.9 During the cyclical condition survey programme the roof structure of the Friarton Waste Transfer Station has been found to have incurred severe corrosion. Engineering advice is that the building and surrounding area may be at risk in the event of winter storms and/or heavy snow and remedial action has therefore been instigated at an estimated cost of £250,000 in 2023/24 which will be met from the Property Compliance Works Programme. Operational plans will be put in place by Communities to redirect waste to alternative locations from October. An update on the investment requirements on the Council’s operational estate will be included as part of the Corporate Asset Management Plan to Council in December. Page 54 of 136
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6.3.10 Within the Commercial Property Investment Programme, the costs to deliver the Broxden Drainage Mitigation Works have been revised with an additional £401,000 required in the current year and £866,000 next year for the full required works to be undertaken. Scottish Water are providing a contribution to the cost of the project, with an additional £231,000 this year and £658,000 next year. It is proposed that the remaining costs are met from the Commercial Receipts which have been brought forward. After allowing for other adjustments to the programme, this results in a net increase in expenditure of £353,000. 6.3.11 The various programmes of works for the Gypsy Traveller Sites are being reviewed, and specific proposals will be considered at a future meeting of this Committee. However, reduced expenditure of £24,000 on one of the grant funded schemes which originated in 2021/22 has resulted in a reduction in grant for the project, which has been reflected in Appendix I and II. 6.3.12 There have been several other small adjustments to various Communities projects relating to amounts carried forward from 2022/23 which are included in Appendix II. These mostly relate to projects that have been completed or rounding adjustments. All the above proposed adjustments have been reflected in Appendices I & II. 6.4 Corporate & Democratic Services 6.4.1 The Chief Operating Officer has reviewed the programme for their Service and proposes the budget adjustments described below. Property Services 6.4.2 It is proposed to reduce the Energy Efficiency Works funded from the Salix Reserve by £72,000, due to the complexities of installing the heating control systems in some buildings. Information Systems & Technology 6.4.3 The planned go-live date for the new Mosaic system has been moved from March 2024 to 1 April 2024. Therefore, this results in the full licence costs now being chargeable to new financial year when the system goes live, with only staff costs for the ongoing development and implementation being incurred in the current year. In addition, it also means that a further year of the current Revenue Contributions is available to meet some of the costs of the project in 2026/27. The budget has therefore been rephased for these proposed budget adjustments and been included in Appendix II. 6.4.4 The remaining budget adjustments reflect timing differences on various projects, with the main proposed movements detailed in the table below: Page 55 of 136
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Project 2023/24 £’000 2024/25 £’000 Later Years £’000 Description Property - Decarbonisation (1,300) 1,300 0 Following a review of the work to be undertaken in the new project, the budget has been rephased to reflect staff capacity and procurement timescales. ICT Infrastructure Replacement & Upgrade Programme (354) (721) 1,075 The Programme has been rephased to align with infrastructure replacement projects & licensing requirements. IST – Data & Analytics (442) 164 278 Rephasing of the Data Management Programme IST – Supporting Digital (564) 141 423 Works to be planned around the re-procurement of various digital platforms. School audio-Visual (AV) Replacement Programme (798) 173 625 The programme has been rephased to align with replacement plans and other property related project work. 6.4.5 Al the above proposed adjustments, together with other small movements, have been reflected in Appendix II. 6.5 Health & Social Care 6.5.1 The Developing Supported Tenancies project is a contribution towards works within the Housing Revenue Account. It has been confirmed that the budget of £229,000 will not be required in the current year and it is therefore proposed that the budget is moved to next year whilst options continue to be evaluated. 6.5.2 The above proposed adjustment has been reflected in Appendix II. 7. HOUSING INVESTMENT PROGRAMME Final Outturn 2022-23 7.1 The final position for 2022/23 on the Housing Investment Programme (subject to audit) was as follows: 2022/23 Budget Actual to 31 March 2023 Variance to Budget £’000 £’000 £000 Total Net Expenditure 18,180 13,856 (4,324) Total Receipts & CFCR (2,652) (2,741) (89) Borrowing Requirement 15,528 11,115 (4,413) Page 56 of 136
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7.2 In order to determine the carry-forward adjustments to 2023/24 required for each project, the difference between the 2022/23 actuals and previous projections are adjusted against the 2023/24 budgets. These adjustments are neutral over the 2 years and has resulted in a movement of £4,413,000 of borrowing from 2022/23 to 2023/24 and is shown in Appendix III. Current Programme: 2023/24 to 2027/28 7.3 The current estimated expenditure, net of contributions, for the Housing Investment Programme over the 5 years 2023/24 to 2027/28 amounts to £92,205,000. Movements from the previous estimates approved by the Finance & Resources Committee on 26 April 2023 are summarised in the table below and detailed in Appendix III. Approved 26 April 2023 Current Estimate Movement £’000 £’000 £’000 2023/24 20,422 27,597 7,175 2024/25 13,853 13,744 (109) 2025/26 15,519 17,253 1,734 2026/27 19,044 19,044 0 2027/28 19,044 14,567 (4,477) Total 87,882 92,205 4,323 7.4 The increase in resources of £4,323,000 represents £4,413,000 brought forward from 2022/23, less the increase in CFCR of £90,000 applied in 2022/23 which has not been carried forward. 7.5 Total Expenditure to 31 July 2023 (Housing Investment Programme) Net expenditure for 2023/24 to 31 July 2023 amounts to £5,015,000. As there have been no receipts, this therefore means that the borrowing requirement for the year to date is also £5,015,000. 7.6 After making adjustments relating to small carry-forward amounts from last year, which are included in Appendix III, the Executive Director (Communities) has reviewed the Housing Investment Programme and proposes further budget adjustments outlined below. 7.7 It is proposed to draw-down a total of £4,477,000 from the SHQS Future Developments budget in 2027/28 and to allocate this across various programmes as follows: • Heating Upgrades - £700,000 allocated to each of the years 2023/24, 2024/25 and 2025/26, due to additional properties requiring heating upgrades, and to maintain an ongoing programme of works. • Fire Precaution Measures - £427,000 allocated to 2023/24, to cover additional properties which were not included in the original programme of works. Page 57 of 136
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• Environmental Improvements - £500,000 allocated to 2023/24 to cover additional works required due to Health & Safety requirements. • Bathroom Modernisation Programme - £1,450,000 allocated to 2023/24, as a result of the continuing referrals from Occupational Therapists. 7.8 Due to the complexity of the redevelopment of the property in Balmoral Road, Blairgowrie, the estimated costs have increased. Consequently, it is proposed not to proceed with the project, and to transfer the budget of £264,000 to the redevelopment of 149-151 Dunkeld Road, Perth. It is also proposed to increase the budgets for Sheltered Housing (£20,000) and General Works (£77,000) by transferring £97,000 from the ICT Expenditure budget in 2023/24. 7.9 The remaining budget adjustments reflect timing differences on various projects, with the main proposed movements detailed in the table below: Project 2023/24 £’000 2024/25 £’000 Later Years £’000 Description External Fabric (net of Third party Contributions) 894 (528) (366) Following conclusion of the Tenement Management System, additional properties have been added to the current contract, primarily roof and harling works at Logie Crescent, Perth. Kitchen Modernisation Programme (1,400) 0 1,400 Increased lifespan of previous kitchen upgrades has reduced demand in the current modernisation cycle. Budget rephased to maintain a future replacement programme Energy Efficiency 279 (279) 0 Works have been completed faster than anticipated, consequently additional works have been planned and the budget rephased accordingly. 7.10 Capital Financed by Current Revenue (CFCR) increased by £90,000 in 2022/23 which has reduced the borrowing requirement on the programme. There are no further movements which impacts the borrowing requirement over the remainder of the 5-year programme. 8. BUDGET OVERVIEW 8.1 The projected net expenditure outturn in 2023/24 for the Composite Capital Budget is £180,346,000 and represents 101% of the 2023/24 budget as approved on 26 April 2023 (£178,033,000). The revised budget is based on the latest projection of expenditure and all budget adjustments outlined within this report. Page 58 of 136
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8.2 Net expenditure to 31 July 2023 on the Composite Capital Budget is £40,660,000 and represents 23% of the proposed revised budget for 2023/24 of £180,346,000. This level of expenditure is higher than normal at this early stage of the financial year, and reflects several larger projects being on-site with construction works now being undertaken. 8.3 The projected net expenditure outturn in 2023/24 for the Housing Investment Programme is £27,597,000 and represents 135% of the 2023/24 budget approved on 26 April 2023 (£20,422,000). The increase reflects the level of expenditure brought forward from last year as well as the allocation of some of the SHQS Future Developments budget from later years to specific projects in the current year. 8.4 Net expenditure to 31 July 2021 on the Housing Investment Programme is £5,015,000 which represents 18% of the proposed revised budget for 2023/24 of £27,597,000. 8.5 Overall, the estimated Council Borrowing Requirement in 2023/24 has increased as a result of borrowing previously budgeted last year being carried-forward to the current year. There is no movement in the level of borrowing arising from the current monitoring exercise. While the projections have been based on a comprehensive monitoring exercise, they continue to remain subject to uncertainty as a result of ongoing inflationary pressures, particularly in the construction industry, in the current economic environment. Author(s) Name Designation Contact Details John Jennings Senior Accountant CHXFinance@pkc.gov.uk Approved Name Designation Date Karen Donaldson Stewart MacKenzie Chief Operating Officer Head of Finance 1 September 2023 1 September 2023 Page 59 of 136
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce Yes Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications Corporate Plan 1.1 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: • Tackling Poverty • Tackling climate change and supporting sustainable places • Growing a sustainable and inclusive local economy • Enabling our children and young people to achieve their full potential • Protecting and caring for our most vulnerable people • Supporting and promoting physical and mental wellbeing • Placing communities at the heart of how we work 1.2 This report relates to all of these objectives. 2. Resource Implications Financial 2.1 There are no direct financial implications arising from this report other than those reported within the body of the main report. Page 60 of 136
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Workforce 2.2 There are no direct workforce implications arising from this report other than those reported within the body of the main report. Asset Management (land, property, IT) 2.3 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments Equality Impact Assessment 3.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 3.2 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.3 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.4 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Sustainability 3.5 Under the provisions of the Local Government in Scotland Act 2003 the Council has to discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.6 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. 4. Consultation Internal 4.1 The Chief Executive and the Executive Directors have been consulted in the preparation of this report. Page 61 of 136
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2. BACKGROUND PAPERS No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES • Appendix I – Composite Capital Programme - Estimated Capital Resources 2023/24 to 2027/28 • Appendix II – Composite Capital Programme - Summary of Capital Resources and Expenditure 2023/24 to 2027/28 • Appendix III – HRA Capital Investment Programme – Summary of Capital Resources and Expenditure 2023/24 to 2027/28 • Appendix IV – Significant Capital Projects Progress Update Page 62 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME Estimated Capital Resources 2023/24 to 2027/28 APPENDIX I Capital Capital Capital Capital Capital Capital Resources Resources Resources Resources Resources Resources 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Revised Revised Revised Revised Revised Revised Budget Budget Budget Budget Budget Budget Capital Grants Cycling, Walking & Safer Routes (CWSR) 1,112 200 200 200 200 1,912 Road Safety Improvement Fund 0 0 0 0 0 0 Town Centre Fund 0 0 0 0 0 0 Regeneration Fund 0 0 0 0 0 0 Recycling Improvement Fund 2,363 0 0 0 0 2,363 Cross Tay Link Road - Transport Scotland 15,000 0 0 0 0 15,000 Gypsy Travellers Sites Improvement Grant 0 0 0 0 0 0 General Capital Grant 22,500 13,847 12,639 12,150 12,150 73,286 Total Capital Grants 40,975 14,047 12,839 12,350 12,350 92,561 General Capital Receipts General Fund - Capital Receipts 976 250 250 250 250 1,976 General Fund - Ring Fenced Receipts 404 377 377 927 1,072 3,157 Total General Capital Receipts 1,380 627 627 1,177 1,322 5,133 Commercial Property Receipts Capital Receipts brought-forward 2,245 859 2,330 2,638 2,638 2,245 Commercial Property Capital Receipts 243 1,679 308 0 0 2,230 Capital Receipts carried-forward (859) (2,330) (2,638) (2,638) (2,638) (2,638) Total Commercial Property Receipts Applied 1,629 208 0 0 0 1,837 Contributions Tay Cities Deal 1,257 999 550 505 1,956 5,267 Third Party Contributions 1,702 658 0 2,000 3,000 7,360 Developer Contributions 2,847 2,300 2,367 2,600 2,600 12,714 Revenue Budget Contributions 30 124 125 125 0 404 Total Contributions 5,836 4,081 3,042 5,230 7,556 25,745 Capital Borrowing Requirement 152,394 178,017 94,027 47,185 26,251 497,874 TOTAL CAPITAL RESOURCES/ GROSS BUDGET EXPENDITURE 202,214 196,980 110,535 65,942 47,479 623,150 5 Page 63 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME Estimated Capital Resources 2023/24 to 2027/28 APPENDIX I Movements in Resources from Approved Budget - 26 April 2023 Revised Revised Revised Revised Revised Revised Budget Budget Budget Budget Budget Budget 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL £'000 £'000 £'000 £'000 £'000 £'000 Resources brought forward from 2022/23 7,814 0 0 0 0 7,814 Increase/(Decrease) in: Capital Receipts - General Fund 0 0 0 0 0 0 Capital Receipts - Commercial Property (2) 0 0 0 0 (2) Capital Receipts - Ring Fenced 28 0 0 0 0 28 Capital Grants: Cycling, Walking & Safer Routes (CWSR) 30 0 0 0 0 30 Road Safety Improvement Fund 0 0 0 0 0 0 Regeneration Fund 0 0 0 0 0 0 Recycling Improvement Fund (208) 0 0 0 0 (208) Town Centre Fund 0 0 0 0 0 0 Cross Tay Link Road - Transport Scotland 0 0 0 0 0 0 Gypsy Travellers Sites Improvement Grant (24) 0 0 0 0 (24) General Capital Grant 353 0 0 0 0 353 Tay Cities Deal 0 0 0 0 0 0 Third Party Contributions 490 658 0 0 0 1,148 Revenue Contributions (72) 0 0 125 0 53 Developer Contributions 0 0 0 0 0 0 Resources b/f 88 (147) (355) (355) (355) (1,479) Resources c/f to future years 59 355 355 355 355 1,834 Borrowing Requirement (5,071) 2,830 958 409 874 0 Total Increase/(Decrease) in Resources 3,485 3,696 958 534 874 9,547 Approved Resources 26 April 2023 198,729 193,284 109,577 65,408 46,605 613,603 Revised Resources 202,214 196,980 110,535 65,942 47,479 623,150 Page 64 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actuals Projected Revised Revised Revised Revised Revised Budget Carry Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 31-Jul-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2023/24 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) EDUCATION AND CHILDREN'S SERVICES 61,868 968 (400) 62,436 13,079 62,436 64,304 42,053 15,304 6,823 190,920 COMMUNITIES 101,869 4,654 882 107,405 26,242 107,405 116,800 57,471 38,138 25,996 345,810 HEALTH AND SOCIAL CARE 2,121 (23) (795) 1,303 64 1,303 2,098 1,303 1,303 1,319 7,326 CORPORATE AND DEMOCRATIC SERVICES 12,175 1,287 (4,260) 9,202 1,275 9,202 11,420 8,456 7,440 7,113 43,631 TOTAL NET EXPENDITURE 178,033 6,886 (4,573) 180,346 40,660 180,346 194,622 109,283 62,185 41,251 587,687 (NET OF GRANTS, REVENUE AND 3RD PARTY CONTRIBUTIONS, AND RING FENCED RECEIPTS) GENERAL CAPITAL GRANT (22,147) 0 (353) (22,500) (7,457) (22,500) (13,847) (12,639) (12,150) (12,150) (73,286) DEVELOPER CONTRIBUTIONS (2,100) (747) 0 (2,847) 0 (2,847) (2,300) (2,367) (2,600) (2,600) (12,714) CAPITAL RECEIPTS (1,215) (6) 2 (1,219) 0 (1,219) (1,929) (558) (250) (250) (4,206) ANNUAL BORROWING REQUIREMENT 152,571 6,133 (4,924) 153,780 33,203 153,780 176,546 93,719 47,185 26,251 497,481 CAPITAL RECEIPTS BROUGHT FORWARD (2,157) 0 (88) (2,245) (2,245) (2,245) (859) (2,330) (2,638) (2,638) (2,245) CAPITAL RECEIPTS CARRIED FORWARD 1,006 (88) (59) 859 2,245 859 2,330 2,638 2,638 2,638 2,638 TOTAL NET BORROWING REQUIREMENT 151,420 6,045 (5,071) 152,394 33,203 152,394 178,017 94,027 47,185 26,251 497,874 5 Page 65 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) EDUCATION AND CHILDREN'S SERVICES MIS - Procurement & Integration 57 0 0 0 0 0 0 0 0 MIS - SEEMIS Licensing 0 0 745 147 745 0 0 0 0 745 Blairgowrie Recreation Centre - Replacement 700 24 17,324 4,708 17,324 12,200 4,003 0 0 33,527 Schools Modernisation Programme Investment in the Learning Estate 1,300 85 (3) 1,086 354 1,086 10,688 8,550 8,650 6,823 35,797 Free School Meal Expansion Programme 913 913 1,348 1,348 2,000 0 0 0 3,348 Methven Primary School Refurbishment 280 (17) 14 6 14 250 0 0 0 264 Breadalbane Academy, Aberfeldy - 3G Pitch 0 0 29 18 29 0 0 0 0 29 Third Party Contribution (The Scottish Football Association) 0 0 (29) (14) (29) 0 0 0 0 (29) Kirkmichael Primary School Upgrades 91 (3) 28 32 32 0 0 0 0 32 Capital Receipt (ring-fenced) 0 0 (28) (128) (128) (128) 0 0 0 0 (128) Early Learning & Childcare 38 1 (1) 0 0 0 0 0 0 0 - Letham Primary School Upgrade Project 19 (4) 4 0 0 0 0 0 0 0 - Oakbank Primary School Upgrade Project 0 12 12 12 0 0 0 0 12 - Rattray Primary School Upgrade Project 1,645 (15) 155 22 155 0 0 0 0 155 North/West Perth - New Primary School 39 (2) 1,059 1,059 7,500 15,000 400 0 23,959 Riverside Primary New School 11,228 (15) 3,410 1,635 3,410 0 0 0 0 3,410 Technology Upgrades 15 (22) (250) 128 128 1,016 250 0 0 1,394 Perth Academy - Refurbishment 1,665 (204) 1,311 539 1,311 2,500 2,150 2,150 0 8,111 Perth Grammar School - Upgrade Programme Phase 3 598 6 1,469 128 1,469 1,500 1,500 504 0 4,973 Perth High School - Internal Services & Refurbishment 9 4 16 3 16 0 0 0 0 16 Perth High School - New School Investment 5,836 (56) 30,244 4,053 30,244 26,500 10,600 3,600 0 70,944 Harris Academy/Invergowrie - Extension 1,100 261 (150) 4,211 1,608 4,211 150 0 0 0 4,361 TOTAL: EDUCATION AND CHILDREN'S SERVICES 25,533 968 (400) 62,436 13,079 62,436 64,304 42,053 15,304 6,823 190,920 COMMUNITIES Traffic & Road Safety Road Safety Initiatives (20mph Zones etc..) 0 0 0 0 362 362 362 361 1,447 Additional Road Safety - Pedestrian Crossings 0 0 175 175 175 175 0 0 525 Schools Road Safety Measures 245 (13) 28 422 89 422 0 0 0 0 422 Scottish Government Grant - CWSS (106) 28 (28) 0 0 0 0 0 0 0 20mph Signage Programme - Schools 111 40 129 129 0 0 0 0 129 20mph Signage Programme 0 0 76 76 0 0 0 0 76 Cycling Walking & Safer Routes (CWSR) 987 128 152 1,262 116 1,262 200 200 200 200 2,062 Scottish Government Grant - CWSR (867) (128) (2) (1,112) (1,112) (200) (200) (200) (200) (1,912) Third Party Contribution (TACTRAN) (120) 0 (150) (150) (150) 0 0 0 0 (150) Car Parking Investment 45 15 (1) 291 291 0 0 0 0 291 Car Parking Investment - Pitlochry 0 0 150 150 0 0 0 0 150 Strathmore Cycle Network 0 0 0 0 0 84 0 0 84 Page 66 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Sub-Total 295 70 (1) 1,243 205 1,243 537 621 362 361 3,124 Asset Management - Roads & Lighting Structural Maintenance 13,770 376 394 12,086 4,985 12,086 9,498 9,498 9,706 7,500 48,288 Third Party Contribution (Forestry Commission Timber Routes) (1,316) (176) (109) (285) (13) (285) 0 0 0 0 (285) Traffic Signal Renewals - Upgrading 105 (21) 73 73 0 0 0 0 73 Third Party Contributions (3) 0 0 0 0 0 0 0 0 Footways 524 3 100 538 203 538 410 410 410 410 2,178 Third Party Contributions 0 0 0 0 0 0 0 0 0 Investment in Local Footpaths 0 0 0 0 0 100 100 0 200 Road Safety Barriers 10 (1) 22 22 0 0 0 0 22 Sub-Total 13,090 181 385 12,434 5,175 12,434 9,908 10,008 10,216 7,910 50,476 Asset Management - Bridges Bridge Refurbishment Programme 629 88 (3) 3,654 193 3,654 2,129 1,445 1,746 1,406 10,380 Dalhenzean Culvert 43 15 15 15 0 0 0 264 279 Dunkeld Golf Course 29 6 6 6 0 0 0 219 225 Vehicular Bridge Parapets Programme - Assess & Upgrade 0 0 0 1 0 29 0 0 0 29 Old Perth Bridge - Strengthening 10 10 190 190 10 2,369 0 0 2,569 Perth Queens Bridge - Strengthening 0 0 335 335 60 70 2,153 0 2,618 Garry Viaduct 0 0 110 110 300 300 1,900 1,790 4,400 Culteuchar Culvert 42 (4) 391 5 391 0 0 0 0 391 Glendevon Bridge 235 (2) 2 0 0 0 0 0 0 0 Tullyfergus Bridge 0 0 0 0 0 0 0 134 134 Sub-Total 988 113 (1) 4,701 199 4,701 2,528 4,184 5,799 3,813 21,025 Improvement Schemes A9/A85 Road Junction Improvements 359 271 (1) 270 8 270 0 0 0 0 270 Cross Tay Link Road (CTLR) 37,309 2,661 72,842 18,963 72,842 26,213 0 0 0 99,055 Scottish Government Grant (20,000) 0 (15,000) (15,000) 0 0 0 0 (15,000) A977 Upgrades 0 0 540 8 540 0 0 0 0 540 Brioch Road, Crieff - Road Realignment & Safety Measures 0 0 31 31 0 0 0 0 31 Sub-Total 17,668 2,932 (1) 58,683 18,979 58,683 26,213 0 0 0 84,896 Rural Flood Protection Schemes Almondbank Flood Protection Scheme 93 17 17 5 17 0 0 0 0 17 Revenue Contribution (54) 0 0 0 0 0 0 0 0 Perth Flood Protection Scheme (Pump Replacement) 0 0 0 0 0 0 0 0 0 Perth Flood Protection Scheme (South Inch Culvert Reinstatement) 35 3 354 5 354 0 0 0 0 354 Comrie Flood Protection Scheme 1,847 (10) 7,385 1 7,385 16,841 0 0 0 24,226 Milnathort Flood Protection Scheme 112 27 79 79 1,590 0 0 0 1,669 South Kinross Flood Protection Scheme 115 (15) 225 26 225 1,168 1,787 0 0 3,180 Scone Flood Protection Scheme 5 0 90 90 76 601 0 0 767 Coastal Change Adaptation 0 0 100 100 0 0 0 0 100 Page 67 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Sub-Total 2,153 22 0 8,250 37 8,250 19,675 2,388 0 0 30,313 Perth & Kinross Place-making Mill Street Environmental Improvements 0 0 127 127 0 0 0 0 127 Perth, Place, People 0 0 3,599 3,599 0 0 0 0 3,599 Perth City Centre Golden Route (Rail Station) 15 (5) 10 11 10 0 0 0 0 10 City Greening 0 0 31 31 0 0 0 0 31 Perth & Kinross Lighting Action Plan 875 (131) 2 1,071 228 1,071 677 0 0 0 1,748 Sub-Total 890 (136) 2 4,838 239 4,838 677 0 0 0 5,515 Other Planning Projects Creative Exchange (former St. John's Primary School) 53 53 53 53 0 0 0 0 53 Town Centre - Regeneration & Economic Improvements 26 0 0 0 0 0 0 0 0 Scottish Government Grant (66) 0 0 0 0 0 0 0 0 TCF Revenue Contribution (23) 0 0 0 0 0 0 0 0 Local Full Fibre Network 158 22 22 22 0 0 0 0 22 Third Party Contribution - DCMS 0 0 0 0 0 0 0 0 0 Third Party Contribution - TCF 40 0 0 0 0 0 0 0 0 Third Party Contribution - Tay Cities Deal (198) 0 0 0 0 0 0 0 0 Low Carbon Transport & Active Travel Hub - Broxden EV Chargers 703 139 (1) 429 179 429 0 0 0 0 429 Third Party Contribution - ERDF (266) (52) (162) (162) 0 0 0 0 (162) Third Party Contribution - Tay Cities Deal (436) (86) (267) (267) 0 0 0 0 (267) Perth Eco-Innovation Park at Perth West 0 0 3,000 3,000 20,800 9,017 0 0 32,817 Third Party Contributions - Tay Cities Deal 0 0 (990) (990) (999) (550) (505) (1,956) (5,000) Other Third Party Contributions 0 0 0 0 0 0 (2,000) (3,000) (5,000) Capital Receipts - Ring Fenced Land Disposals 0 0 0 0 0 0 (550) (725) (1,275) Coupar Angus - Strathmore Community Hub 63 0 0 0 0 0 0 0 0 Nature Restoration 206 32 354 386 386 0 0 0 0 386 Third Party Contributions 0 0 0 0 0 0 0 0 0 Sub-Total 260 108 353 2,471 179 2,471 19,801 8,467 (3,055) (5,681) 22,003 City Centre Developments - Cultural Attractions Perth Museum 10,943 301 2,368 2,368 0 0 0 0 2,368 Perth Art Gallery 112 68 3,272 16 3,272 0 0 0 0 3,272 Collections Centre 0 0 0 0 0 0 0 0 0 PH2O 0 0 0 0 30,000 25,000 20,000 15,000 90,000 Sub-Total 11,055 369 0 5,640 16 5,640 30,000 25,000 20,000 15,000 95,640 Community Planning Letham Community Wellbeing Hub 2,552 254 1,571 628 1,571 0 0 0 0 1,571 Scottish Government Grant (Regeneration Fund) (524) 0 0 0 0 0 0 0 0 Third Party Contribution (Letham4All) 0 0 (519) (519) 0 0 0 0 (519) Revenue Contribution (Place Based Development Grant) (735) 0 0 0 0 0 0 0 0 Sub-Total 1,293 254 0 1,052 628 1,052 0 0 0 0 1,052 Page 68 of 136
Page 69
PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Page 69 of 136
Page 70
PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Community Greenspace Play Areas - Improvements Implementation Strategy 92 6 503 27 503 987 878 150 150 2,668 Third Party Contribution (47) (10) (10) (10) 0 0 0 0 (10) Revenue Contribution (Developer Contribution Reserve) (2) 0 0 0 0 0 0 0 0 3G Pitch, Blairgowrie 38 20 20 20 100 0 0 0 120 Settlement/Neighbourhood Parks 25 (26) 27 1 1 0 0 0 0 1 Countryside Sites 23 (1) 1 0 0 139 0 0 0 139 Community Greenspace Sites 0 0 (30) (30) (30) 654 682 682 678 2,666 Community Greenspace Bridges 38 (1) 53 53 0 0 0 0 53 Core Path Implementation 48 9 9 3 9 0 0 0 0 9 Third Party Contribution (60) (21) (21) (21) 0 0 0 0 (21) Alyth Environmental Improvements 0 0 0 0 0 0 0 0 0 Premier Parks 39 (6) 8 8 0 0 0 0 8 Auchterarder Public Park 324 32 1 33 18 33 0 0 0 0 33 Revenue Contribution 0 (3) (3) (3) 0 0 0 0 (3) Third Party Contribution (201) 0 0 0 0 0 0 0 0 The Knock 9 0 0 0 0 0 0 0 0 Third Party Contribution 0 (3) (3) (3) 0 0 0 0 (3) Kinnoull Hill 8 4 4 4 0 0 0 0 4 Cemetery Extensions 25 15 459 459 150 100 100 100 909 Sub-Total 359 15 (1) 1,023 48 1,023 2,030 1,660 932 928 6,573 Waste Strategy Recycling Improvement Fund 358 208 (208) 2,363 26 2,363 0 0 0 0 2,363 Scottish Government Grant (358) (208) 208 (2,363) (2,363) 0 0 0 0 (2,363) Sub-Total 0 0 0 0 26 0 0 0 0 0 0 Support Services PC Replacement & IT Upgrades Hardware 22 1 16 1 16 15 15 14 14 74 Licenses 198 64 152 65 152 112 95 71 71 501 Sub-Total 220 65 0 168 66 168 127 110 85 85 575 Commercial Property Investment Programme North Muirton Industrial Estate - Site Servicing & Provision of Units 18 17 57 57 0 0 0 0 57 Broxden Business Park - Additional Infrastructure 17 (10) 20 10 10 0 0 0 0 10 Western Edge, Kinross - Site Servicing 17 4 1 5 5 0 0 0 0 5 Additional Infrastructure Investment - Broxden 46 46 (46) 0 0 0 0 0 0 0 Broxden Drainage Mitigation Works 308 237 401 638 638 866 0 0 0 1,504 Third Party Contribution (Scottish Water) (239) (239) (231) (470) (470) (658) 0 0 0 (1,128) Ruthvenfield Business Centre 301 18 1,372 1,372 0 0 0 0 1,372 Third Party Contribution (115) 0 0 0 0 0 0 0 0 North Muirton Drainage 47 17 17 17 0 0 0 0 17 North Muirton Industrial Estate Expansion Land - Servicing 0 0 0 0 0 0 0 0 0 Page 70 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) Sub-Total 400 90 145 1,629 0 1,629 208 0 0 0 1,837 Prudential Borrowing Projects Wheeled Bin Replacement Programme - Domestic Bins 265 4 (1) 203 12 203 200 200 200 200 1,003 Wheeled Bin Replacement Programme - Commercial Bins 39 15 35 35 20 20 20 20 115 Recycling Containers, Oil Banks & Battery Banks Replacement Progra 54 28 150 150 65 65 65 65 410 Capital Receipts - Disposals (4) 0 0 0 0 0 0 0 0 Litter Bins 25 0 25 5 25 50 50 50 50 225 Smart Cities - Smart Waste 172 11 1 145 46 145 0 0 0 0 145 Third Party Contribution (ERDF) (67) (2) (53) (53) 0 0 0 0 (53) Vehicle Replacement Programme 1,242 57 (1) 1,813 301 1,813 3,300 3,300 3,300 3,000 14,713 Capital Receipts - Vehicle Disposals (118) (4) (276) (22) (276) (377) (377) (377) (347) (1,754) Crematorium - Abatement Works 9 (1) 1 0 0 0 0 0 0 0 Street Lighting Renewal - LED & Column Replacement 650 38 (1) 804 120 804 888 825 541 592 3,650 Smart Cities - Intelligent Street Lighting 0 (3) 3 0 0 0 0 0 0 0 LED Traffic Signal Replacement 146 4 4 4 4 0 0 0 0 4 Almondbank Flood Protection Scheme 4 4 (1) 3 3 0 0 0 0 3 Land Purchase & Development (Hotel Development) 0 0 0 0 950 950 0 0 1,900 Technology & Innovation Incubator Units 0 0 0 0 0 0 0 0 0 Sub Total 2,417 151 1 2,853 466 2,853 5,096 5,033 3,799 3,580 20,361 Housing Projects Gypsy Travellers Site Improvement Works 207 195 195 195 0 0 0 0 195 Additional Gypsy Traveller Site Improvement Works 225 216 9 225 3 225 0 0 0 0 225 Scottish Government Grant 0 (24) 24 0 (24) 0 0 0 0 0 0 Gypsy Traveller Site Community Improvement Works 33 33 (33) 0 0 0 0 0 0 0 New Gypsy Traveller Site 0 0 2,000 2,000 0 0 0 0 2,000 Sub Total 465 420 0 2,420 (21) 2,420 0 0 0 0 2,420 TOTAL: COMMUNITIES 51,553 4,654 882 107,405 26,242 107,405 116,800 57,471 38,138 25,996 345,810 Health & Social Care Occupational Therapy Equipment 250 0 250 250 250 250 250 250 1,250 Technology Enabled Telecare 450 (13) (537) 1,000 64 1,000 1,537 1,000 1,000 1,000 5,537 Moving & Handling Office Refurbishment 0 0 (29) 0 0 29 0 0 0 29 Software Licences 43 (10) 53 53 53 53 53 69 281 Developing Supported Tenancies 0 0 (229) 0 0 229 0 0 0 229 TOTAL: HEALTH & SOCIAL CARE 743 (23) (795) 1,303 64 1,303 2,098 1,303 1,303 1,319 7,326 Page 71 of 136
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PERTH AND KINROSS COUNCIL COMPOSITE CAPITAL PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2027/28 APPENDIX II Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 13-Sep-23 31-Jul-23 13-Sep-23 13-Sep-23 13-Sep-23 13-Sep-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2022/23 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) (£'000) CORPORATE AND DEMOCRATIC SERVICES Property Services DDA Adaptation & Alteration Works Programme 174 10 410 87 410 200 200 200 200 1,210 Property Compliance Works Programme 1,626 198 627 2 627 650 650 650 650 3,227 Capital Improvement Projects Programme 1,937 425 2,275 85 2,275 1,800 1,800 1,800 894 8,569 Pitlochry High School - Upgrade Programme 465 56 316 67 316 0 0 0 0 316 Community School of Auchterarder - Structural Improvements 736 0 0 0 0 0 0 0 0 CO2 Monitors for Schools Programme 81 0 0 0 0 0 0 0 0 Energy Efficiency Works - Various Properties 0 0 (72) 27 27 27 0 0 0 0 27 Revenue Contribution (Salix Reserve) 0 0 72 (27) (27) 0 0 0 0 (27) Decarbonisation - Prudential Borrowing Programme (PB) 0 0 (1,300) 700 700 1,300 0 0 0 2,000 Energy Conservation & Carbon Reduction Programme (PB) 178 (2) 138 43 138 150 150 150 150 738 Information Systems & Technology ICT Infrastructure Replacement and Upgrade Programme 2,055 104 (354) 2,416 730 2,416 4,207 4,079 3,017 2,903 16,622 Data & Analytics 415 167 (442) 600 97 600 839 738 761 784 3,722 Third Party Contribution (ERDF) 0 0 0 0 0 0 0 0 0 Supporting Digital 700 8 (564) 750 30 750 855 878 901 926 4,310 Software Licences (Revenues & Benefits) 52 0 50 50 51 51 51 51 254 School Audio-Visual (AV) Equipment Replacement Programme 1,300 272 (798) 100 9 100 173 35 35 555 898 Mosaic - Swift Social Work System Replacement 412 49 (802) 820 98 820 1,319 0 0 0 2,139 Revenue Contribution 0 0 0 0 (124) (125) (125) 0 (374) Customer Service Blueprint 0 0 0 0 0 0 0 0 0 TOTAL: CORPORATE AND DEMOCRATIC SERVICES 10,131 1,287 (4,260) 9,202 1,275 9,202 11,420 8,456 7,440 7,113 43,631 TOTAL COMPOSITE NET EXPENDITURE 87,960 6,886 (4,573) 180,346 40,660 180,346 194,622 109,283 62,185 41,251 587,687 (NET OF GRANTS, REVENUE AND 3RD PARTY CONTRIBUTIONS, AND RING FENCED RECEIPTS) CAPITAL RECEIPTS General Capital Grant - Scottish Government (14,739) 0 (353) (22,500) (7,457) (22,500) (13,847) (12,639) (12,150) (12,150) (73,286) Developer Contributions (1,549) (747) (2,847) (2,847) (2,300) (2,367) (2,600) (2,600) (12,714) General Fund - Capital Receipts/Disposal (8) (4) 0 (976) 0 (976) (250) (250) (250) (250) (1,976) Commercial Property - Capital Receipts/Disposal (1) (2) 2 (243) 0 (243) (1,679) (308) 0 0 (2,230) Total: Capital Receipts (16,297) (753) (351) (26,566) (7,457) (26,566) (18,076) (15,564) (15,000) (15,000) (90,206) Annual Composite Borrowing Requirement 71,663 6,133 (4,924) 153,780 33,203 153,780 176,546 93,719 47,185 26,251 497,481 CAPITAL RECEIPTS BROUGHT FORWARD (2,556) 0 (88) (2,245) (2,245) (2,245) (859) (2,330) (2,638) (2,638) (2,245) CAPITAL RECEIPTS CARRIED FORWARD 2,157 (88) (59) 859 2,245 859 2,330 2,638 2,638 2,638 2,638 TOTAL NET COMPOSITE BORROWING REQUIREMENT 71,264 6,045 (5,071) 152,394 33,203 152,394 178,017 94,027 47,185 26,251 497,874 Page 72 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II EDUCATION AND CHILDREN'S SERVICES Project Project Description MIS - Procurement & Integration Schools Management Information System MIS - SEEMIS Licensing Licencing of Schools Management Information System Blairgowrie Recreation Centre - Replacement Replacement of the Recreation Centre in Blairgowrie Investment in the Learning Estate Investment to upgrade the infrastructure and environment of our existing school estate Free School Meal Expansion Programme Upgrading kitchen and dining facilities to provide the enhanced Free School Meals programme Methven Primary School Refurbishment Upgrade of Methven Primary School facilities Breadalbane Academy, Aberfeldy - 3G Pitch Additional investment required to upgrade 2G to 3G Kirkmichael Primary School Upgrades Upgrade of Kirkmichael Primary School facilities Early Learning & Childcare - Letham Primary School Upgrade Project 1140 hrs project plus upgrade of primary school infrastructure - Completed - Oakbank Primary School Upgrade Project 1140 hrs project - Completed - Rattray Primary School Upgrade Project 1140 hrs project plus upgrade of primary school infrastructure - Completed North/West Perth - New Primary School New primary school located at Bertha Park Riverside Primary New School Replacement of North Muirton and Balhousie primary schools Technology Upgrades Upgrade to practical teaching environment within the existing school estate Perth Academy - Refurbishment Investment to upgrade the infrastructure and environment of the Perth Academy including structural work to sports block, lighting upgrades, classroom upgrades and science block cladding Perth Grammar School - Upgrade Programme Phase 3 Investment to upgrade the infrastructure and environment of the Perth Grammar School including structural work to assembly hall, AV and WiFi upgrades, classroom refurbishment and door upgrades Perth High School - Internal Services & Refurbishment Necessary works to the infrastructure and environment of the current Perth High School Perth High School - New School Investment Replacement of the existing Perth High School Harris Academy/Invergowrie - Extension Extension and reconfiguration of existing space at Harris Academy in Dundee for continuation of access for pupils based in Invergowrie COMMUNITIES Project Project Description Traffic & Road Safety Road Safety Initiatives (20mph Zones etc.) A programme of works to improve road safety Additional Road Safety - Pedestrian Crossings A programme of works to provide pedestrian crossing facilities Road Safety Improvement Fund works Provision of safety barriers on routes where motor cycling is common Schools Road Safety Measures A programme of works to improve road safety in the vicinity of schools 20mph Signage Programme - Schools A programme of works to improve road safety in the vicinity of schools 20mph Signage Programme A programme of works to introduce 20mph speed limits. Cycling Walking & Safer Routes (CWSR) A programme of works providing infrastructure for cycling, walking and safer routes Car Parking Investment Construction of new car park in Auchterarder Car Parking Investment - Pitlochry Purchase of land and construction of a public car park Strathmore Cycle Network Contribution towards a shared use path between Coupar Angus and Blairgowrie Structural Maintenance Road maintenance to extend the life of roads, including predominately road resurfacing, surface dressings, installing new drainage infrastructure and repairs to and replacement of defective embankments and retaining walls Asset Management - Roads & Lighting Page 73 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Traffic Signal Renewals - Upgrading A programme of works to upgrade existing traffic signal infrastructure Footways Replacement of existing deteriorated footway surfaces Investment in Local Footpaths A programme of works to improve and provide local footpaths Road Safety Barriers Renewal of existing barriers where unrecoverable damage has occurred and renewal of barriers where timber posts have been used in construction Page 74 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Bridge Refurbishment Programme Used to appoint specialist external inspection teams and consultants to carry out specialist access bridge inspections and assessments Dalhenzean Culvert Culvert replacement project (later years) Dunkeld Golf Course Culvert replacement project (later years) Vehicular Bridge Parapets Programme - Assess & Upgrade Assessment and Upgrading of Vehicle Parapets Programme Old Perth Bridge - Strengthening Carry out works recommended by the 2018 Bridge Assessment study, including a range of assessment, investigation, strengthening and improvement works Perth Queens Bridge - Strengthening Carry out works recommended by the 2018 Bridge Assessment study, including a range of assessment, investigation, strengthening and improvement works Garry Viaduct Replacement of Bearings and Parapets; including strengthening of deck for bearing replacement jacking up, and to cater for increased parapet vehicular deterrent capacity Culteuchar Culvert Replace existing temporary steel bridge (on hire) with culvert Glendevon Bridge Major bridge repair works required due to severe river scour damage (now complete) Tullyfergus Bridge Installation of scour protection to protect existing bridge abutments (later years) A9/A85 Road Junction Improvements New infrastructure including a new A9 overbridge, a bridge over the River Almond and road linking the A85 to Inveralmond and Bertha Park (Phase 1 of Perth Transport Futures Project) - complete Cross Tay Link Road (CTLR) New road and major structure over the River Tay, linking the A9 north of Inveralmond and the A94 north of Scone (Phase 2 of Perth Transport Futures Project). A977 Upgrades A programme of works to improve road safety along the A977. Broich Road, Crieff - Road Realignment & Safety Measures Complete Almondbank Flood Protection Scheme Substantially complete Perth Flood Protection Scheme (Pump Replacement) Complete Perth Flood Protection Scheme (South Inch Culvert Reinstatement) Ground investigation and monitoring then design project to refurbish existing culvert Comrie Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Comrie Milnathort Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Milnathort South Kinross Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in South Kinross Scone Flood Protection Scheme Design and construction of a scheme to reduce the risk of flooding in Scone Coastal Change Adaptation Design and construct projects to deal with incidents of coastal erosion Mill Street Environmental Improvements Potential compensation payments associated with claims against compulsory land acquisition to enable delivery of environmental improvements to stimulate and support development and investment Perth, Place, People Design and development of sustainable transport corridors to improve access to and from Perth and enable additional development and improvement within Perth city centre Perth City Centre Golden Route (Rail Station) Design and development of improvements to access, signage and animation from rail and bus station to Perth city centre to complement improvements to integration of transport Asset Management - Bridges Improvement Schemes Rural Flood Protection Schemes Perth & Kinross Place-making Page 75 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description City Greening Improvements to support enhancement of retail trading environment and residential areas and enhanced use of space for markets, events and alfresco use Page 76 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Perth & Kinross Lighting Action Plan Architectural and creative lighting to enhance city and towns appearance, reduce energy cost and increase safety at nighttime to increase dwell time, support the hospitality sector, events and grow the evening economy Creative Exchange (former St. John's Primary School) Repurposing old school to offer space to creative industry businesses and create the Famous Grouse Idea Centre, a space to support business innovation. Complete Town Centre - Regeneration & Economic Improvements Complete Local Full Fibre Network Provision of gigabit fibre connectivity to Council's buildings to unlock gigabit connectivity for surrounding communities. Completed Low Carbon Transport & Active Travel Hub - Broxden EV Chargers Provision of fast EV chargers combined with solar power generation and battery storage at Broxden Park & Ride - Near completion Perth Eco-Innovation Park at Perth West Provision of enabling infrastructure (access road, A9 underpass and unit platforms) to develop 25ha of employment land supporting clean growth, business innovation and jobs - Phase 1 (11ha) - In development Coupar Angus - Strathmore Community Hub Complete Nature Restoration Protection and restoration of biodiversity focusing on over-exploitation of the natural environment and addressing its consequences; habitat loss and fragmentation; and invasive non-native species - 22/23 completed - 23/24 started Perth Museum Refurbishment of Perth City Hall to create new museum spaces and cafe. Main construction phase complete and install/fit out on schedule for planned opening spring 2024 Perth Art Gallery Refurbishment of temporary galleries - scheduled for completion November 2023 Collections Centre Project removed from programme PH2O Replacement of Perth Leisure Pool and Dewars Ice Rink. On hold pending outcome of Leisure and Culture Assets Review Letham Community Wellbeing Hub Refurbishment of Letham Wellbeing Hub to offer a range of services to the local community managed by Letham4All - scheduled for completion end 2023 Play Areas - Improvements Implementation Strategy Regular refurbishment of 146 play areas based on approx. 6-8 per year. Involves community engagement and often co-funding and design of the sites 3G Pitch, Blairgowrie Two phase community led project to provide a new full sized 3G football pitch and pavilion Settlement/Neighbourhood Parks Refurbishment of neighbourhood parks working in partnership with communities to improve, update and renew worn out or obsolete infrastructure Countryside Sites Refurbishment of more natural parks and open spaces Community Greenspace Sites Main fund for all Community Greenspace Sites which is drawn down to support the overall capital programme of refurbishments and upgrades Community Greenspace Bridges Refurbishment programme for all bridges on Community Greenspace sites Core Path Implementation Holding budget for Crieff Comrie Core path development mainly funded through Sustrans Alyth Environmental Improvements Town centre upgrade including community led refurbishment of the burnside - complete Premier Parks Small budget to facilitate refurbishment of former Premier Park upgrades Other Planning Projects City Centre Developments - Cultural Attractions Community Planning Community Greenspace Page 77 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Auchterarder Public Park Major play area upgrade co-funded and designed with the community The Knock Complete Kinnoull Hill Complete Cemetery Extensions Funding to allow the extension of existing or development of new cemeteries to address the pressure for burial space Page 78 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Recycling Improvement Fund External Scottish Government funding (Recycling Improvement Fund) to roll out 4th bin to householders for recycling Hardware Funding of additional or bespoke IT Hardware for Communities Staff Licenses Funding of software contracts North Muirton Industrial Estate - Site Servicing & Provision of Units Only road adoption works remaining Broxden Business Park - Additional Infrastructure Only road adoption works remaining Western Edge, Kinross - Site Servicing Only road adoption works remaining Additional Infrastructure Investment - Broxden Complete Broxden Drainage Mitigation Works Drainage/pumping station works underway and subject to agreement/contribution from Scottish Water Ruthvenfield Business Centre Works on redevelopment in progress North Muirton Drainage Drainage/pumping station underway North Muirton Industrial Estate Expansion Land - Servicing Complete Wheeled Bin Replacement Programme - Domestic Bins Replacement of damaged and end of life wheeled bins for households. Also suppling bins for new properties Wheeled Bin Replacement Programme - Commercial Bins Replacement of damaged and end of life wheeled bins for commercial customers. Also suppling bins for new customers and changes to collection contracts Recycling Containers, Oil Banks & Battery Banks Replacement Programme Replacement of damaged and end of life oil and battery banks Litter Bins Replacement of damaged and end of life litter bins and/or for general supply of litter bins where required. Smart Cities - Smart Waste Programme now complete - included introduction of In Cab system for refuse vehicles, fill level sensors on city centre litter bins Vehicle Replacement Programme Fleet vehicle replacement programme Crematorium - Abatement Works Complete Street Lighting Renewal - LED & Column Replacement Street Lighting LED conversion and column replacement programme Smart Cities - Intelligent Street Lighting Complete LED Traffic Signal Replacement Complete Almondbank Flood Protection Scheme Under Rural Flood Land Purchase & Development (Hotel Development) Development agreement secured and release of grant for heritage subject to progression through planning and cost evidence Technology & Innovation Incubator Units Complete Gypsy Travellers Site Improvement Works Programme of works for improvements on Gypsy Traveller sites at Bobbin Mill and Double Dykes Additional Gypsy Traveller Site Improvement Works Additional funding to support improvements works programme on Gypsy Traveller sites Gypsy Traveller Site Community Improvement Works Funding from Gypsy Traveller Scottish Government Funding Bid for replacement of chalets at Double Dykes New Gypsy Traveller Site Feasibility Study for Gypsy Traveller Transient Site CORPORATE AND DEMOCRATIC SERVICES Project Project Description DDA Adaptation & Alteration Works Programme To provide unhindered accessibility to all Council Buildings - e.g. Ramps/Lifts/Door Access/Accessible Toilets and Changing Areas Prudential Borrowing Projects Housing Projects Property Services Waste Strategy Support Services - PC Replacement & IT Upgrades Commercial Property Investment Programme Page 79 of 136
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PERTH AND KINROSS COUNCIL DESCRIPTIONS OF CAPITAL PROJECTS APPENDIX II Project Project Description Property Compliance Works Programme To ensure compliance with current and changing legislation including - New Fire Alarms; Lighting; Wiring; Fire Protection Works; Gas pipework within buildings and Roof Restraint safety systems Capital Improvement Projects Programme Roof Upgrades; Full internal refurbishment works; New Heating Systems; Boilers and pipework; Structural Upgrades; Small extensions; New Windows/Doors; New Fencing; New Cladding Pitlochry High School - Upgrade Programme Upgrades to Mechanical and Electrical Infrastructure, including rewiring, heating and controls systems, replacement lighting and consequential building works such as new ceilings, painting and flooring Community School of Auchterarder - Structural Improvements Undertake Structural improvement works following recommendations of Edinburgh schools report CO2 Monitors for Schools Programme Installation of CO2 monitors throughout the Property estate to monitor air quality and improve ventilation systems where necessary Energy Efficiency Works - Various Properties Focusing on a spend to save with projects aiming to reduce energy cost across the property estate Decarbonisation - Prudential Borrowing Programme (PB) This budget will support PKCs path to NetZero and focus primarily on the de-carbonisation of heat and replacing inefficient direct emissions heat sources Energy Conservation & Carbon Reduction Programme (PB) This budget is focused on works to reduce PKC energy consumption and help achieve annual KPI energy reduction of 3% ICT Infrastructure & Replacement and Upgrade Programme This Programme delivers the IT / digital environment, digital resources and systems required by staff and young people. The programme maintains, supports and develops computers; networks; telephony; Microsoft systems; connectivity and equipment; datacentres; servers; file storage and back up; security systems and video conferencing Data & Analytics Delivers the governance, tools, technologies and organisation-wide skills required for optimising value from Council data, driving informed decision making around resources, priorities and service delivery targets Supporting Digital Develops the capabilities we need to be an innovative digital organisation. Including developing the Council’s corporate employee (mobile working) and customer (online services) platforms, to create new digital products and services; investment in tools such as Microsoft; resourcing innovation and building digital skills, insight and expertise Software Licences (Revenues & Benefits) NAC Live system licensing for Revenues & Benefits team School Audio-Visual (AV) Equipment Replacement Programme Ensures all Perth and Kinross classrooms have equitable access to audio visual panels and the digital skills to exploit these resources for learning and teaching Mosaic - Swift Social Work System Replacement Purchase and Development of a new Social Work system to replace SWIFT Information Systems & Technology Page 80 of 136
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APPENDIX III Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 31-Jul-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2023/24 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL £'000 (£'000) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Council House New Build Programme Glebe, Scone - 65 Units 0 17 17 17 0 0 0 0 17 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 0 0 17 0 17 0 17 0 0 0 0 17 Milne Street, Perth - 8 Units 0 2 (2) 0 0 0 0 0 0 0 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Third Party Contribution (Commuted Sums) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 0 0 2 (2) 0 0 0 0 0 0 0 0 Huntingtower, Perth - 70 Units 0 (5) 6 1 1 0 0 0 0 1 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 0 0 (5) 6 1 0 1 0 0 0 0 1 Fairfield, Perth 0 252 (1) 251 129 251 0 0 0 0 251 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 (1) 1 0 0 0 0 0 0 0 0 251 0 251 129 251 0 0 0 0 251 Lynedoch Road, Methven 821 (123) 698 345 698 0 0 0 0 698 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 0 821 (123) 0 698 345 698 0 0 0 0 698 Newburgh Road, Abernethy 0 (53) 53 0 0 0 0 0 0 0 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 21 (21) 0 0 0 0 0 0 0 Capital Receipts 0 32 (32) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Future Developments 4,894 3,751 (4) 8,641 8,641 5,128 6,014 6,014 6,014 31,811 Council Tax (Second Income) 0 0 0 0 0 0 0 0 0 Scottish Government Subsidy 0 0 0 0 0 0 0 0 0 4,894 3,751 (4) 8,641 0 8,641 5,128 6,014 6,014 6,014 31,811 Total Council House New Build 5,715 3,893 0 9,608 474 9,608 5,128 6,014 6,014 6,014 32,778 HRA CAPITAL INVESTMENT PROGRAMME SUMMARY OF CAPITAL RESOURCES AND EXPENDITURE 2023/24 to 2026/27 PERTH AND KINROSS COUNCIL 5 Page 81 of 136
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APPENDIX III Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 31-Jul-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2023/24 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL £'000 (£'000) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Increase in Council House Stock Council House Buy-Backs 3,438 (474) 2,964 1,408 2,964 3,000 3,000 3,000 3,000 14,964 Scottish Government Subsidy (1,050) 0 (1,050) (1,050) 0 0 0 0 (1,050) 2,388 (474) 0 1,914 1,408 1,914 3,000 3,000 3,000 3,000 13,914 Lock-ups and Garage Sites 0 0 0 0 50 0 0 0 50 Standard Delivery Plan Heating Upgrade Contract Works 142 (66) 671 747 747 700 700 0 0 2,147 - less Third Party Contribution 0 (29) 29 0 0 0 0 0 0 0 Rewiring, Infrastructure & Property Refurbishment 1,000 515 1,515 65 1,515 1,686 0 0 0 3,201 Triple Glazing 2,500 (34) 2,466 1,486 2,466 0 0 0 0 2,466 Controlled Door Entry 0 (12) 12 0 0 28 0 0 0 28 - less Third Party Contribution 0 10 (10) 0 0 0 0 0 0 0 Kitchen Modernisation Programme 1,782 (8) (1,400) 374 73 374 1,504 2,025 0 0 3,903 Bathroom Modernisation Programme 0 (14) 1,450 1,436 411 1,436 0 0 0 0 1,436 External Fabric 198 (269) 1,029 958 554 958 0 259 0 0 1,217 - less Third Party Contribution 0 135 (135) 0 0 0 0 0 0 0 Energy Efficiency 0 (172) 279 107 107 107 596 625 0 0 1,328 Multi Storey Flats 2,000 243 2,243 23 2,243 0 0 0 0 2,243 Environmental Improvements 333 66 500 899 283 899 0 0 0 0 899 - less Third Party Contribution 0 1 (1) 0 0 0 0 0 0 0 Fire Precaution Measures 0 (28) 427 399 399 0 0 0 0 399 - less Third Party Contribution 0 1 (1) 0 0 0 0 0 0 0 Sound Insulation 162 127 289 289 100 42 0 0 431 Structural 458 20 478 478 250 522 0 0 1,250 SHQS Future Developments 0 0 0 0 0 4,066 10,030 5,553 19,649 Total Standard Delivery Plan 8,575 486 2,850 11,911 3,002 11,911 4,864 8,239 10,030 5,553 40,597 Page 82 of 136
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APPENDIX III Approved Proposed Proposed Revised Actual Projected Revised Revised Revised Revised Revised Budget Brought Budget Budget to Outturn Budget Budget Budget Budget Budget 26-Apr-23 Forward Adjustment 31-Jul-23 from Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 Report 1 2023/24 2022/23 2023/24 2023/24 2023/24 2023/24 2024/25 2025/26 2026/27 2027/28 TOTAL £'000 (£'000) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Other Investment in Council House Stock Total Major Adaptations to Council House Stock 0 4 4 4 100 0 0 0 104 Balmoral Road, Rattray, Refurbishment (3 Units) 0 264 (264) 0 0 0 0 0 0 0 Anchor House, Rannoch Road, Perth - Conversion (5 Units) 100 (13) 87 1 87 0 0 0 0 87 149-151 Dunkeld Road, Perth 0 13 264 277 103 277 0 0 0 0 277 - Government Grant 0 0 0 0 0 0 0 0 0 111 Rannoch Road, Perth (Former Driving Test Centre) 0 8 8 8 0 0 0 0 8 St.Catherine's Square Redevelopment 2,991 0 2,991 2,991 402 0 0 0 3,393 Shops & Offices 236 3 239 239 50 0 0 0 289 Greyfriars and Satellite Sites 0 34 34 2 34 50 0 0 0 84 Sheltered Housing 0 (9) 20 11 2 11 0 0 0 0 11 Double Dykes Chalet Replacement 0 (1) 1 0 5 0 0 0 0 0 0 - Scottish Government Grant 0 0 0 0 0 0 0 0 0 General Capital Works 0 (7) 77 70 18 70 0 0 0 0 70 Upgrade and Replacements to Lifts Programme 139 (2) 137 137 0 0 0 0 137 ICT Expenditure 228 0 (97) 131 131 50 0 0 0 181 Mortgage to Rent 50 125 175 175 50 0 0 0 225 Total Other Investment in Council House Stock 3,744 419 1 4,164 131 4,164 702 0 0 0 4,866 Total Net Expenditure 20,422 4,324 2,851 27,597 5,015 27,597 13,744 17,253 19,044 14,567 92,205 Income CAPITAL RECEIPTS 0 (1) 1 0 0 0 0 0 0 0 CFCR (2,055) 90 (90) (2,055) (2,055) (1,918) (2,248) (2,520) (2,752) (11,493) TOTAL BORROWING REQUIREMENT 18,367 4,413 2,762 25,542 5,015 25,542 11,826 15,005 16,524 11,815 80,712 Page 83 of 136
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SIGNIFICANT CAPITAL PROJECTS PROGRESS UPDATE APPENDIX IV Project Title Total Gross Budget (£'000) Third Party Funding (£'000) Total Net Budget (£'000) Projected Outturn (£'000) Completion Date Contract Awarded On Site Status Change Since Last Report Additional Commentary Blairgowrie Recreation Centre - Replacement 36,000 0 36,000 36,000 Easter 2025 - new centre currently scheduled to open late 2024 Yes Yes On track Yes - on-site. Works are progressing well on-site. North/West Perth New Primary School* 24,000 0 24,000 24,000 Summer 2026 No No On track Yes. New Project Request submitted to HubCo in February 2023. Design team selected and early design process has began. Riverside Primary New School 19,899 0 19,899 19,899 Early summer 2023 Yes Yes Phase 2 On Track Yes - School operational. Phase 1 is now complete and school is occupied, phase 2 is on-site being demolition works and new external spaces. Perth High School - New School Investment 80,200 0 80,200 80,200 Summer 2026 - school building curently scheduled to open summer 2025 Yes Yes On track Yes - on-site. FC concluded and construction works have now commenced. Harris Academy/Invergowrie Extension 5,200 0 5,200 5,200 Late 2023 Yes Yes On track Yes. Main extension complete, reconfiguration works still to be undertaken. Cross Tay Link Road (CTLR) 150,500 40,000 110,500 110,500 Spring 2025 Yes Yes On programme No Works progressing well and on programme. No significant movements in projected spend. Once piling works complete at River Tay structure, the constrution of the bridge deck works will commence - Autumn 2023. Monthly risk meetings taking place with T&T and once bridge deck works ongoing detailed analysis of contingency and compensation events will be undertaken. Comrie Flood Protection Scheme 28,435 0 28,435 28,435 Spring 2025 No No Advance works complete; Main works at tender assessment. Yes Detailed design completed April 2023 and tender for main works issued. Preliminary advance works completed in July 2023. Main works tender received in June 2023 but cost higher than anticipated; tender assessment is currently on-going (including independent tender estimate, tender clarification and value engineering). This has delayed the commencement of the main construction works; once started the works will have a duration of 18 months. Perth Eco Innovation Park* 32,817 11,275 21,542 21,542 Not currently programmed No No Preliminary design works completed Yes Following the application for Levelling Up Fund Grant funding of £10m being unsuccessful, the Council approved a net increased of £10m on 1 March 2023 however the balance of £20m remains unfunded. Further contributions and receipts are anticipated in years beyond the current programme to 2027/28. Perth Museum 27,232 10,300 16,932 16,932 Spring 2024 Yes Yes On track No Construction phase complete and building handover to CPK completed 8 August. Exhibition fit out underway. PH2O 90,000 0 90,000 90,000 Not currently programmed No No Outline Business Case reported to Council 23 February 2023, and project on hold pending review. Yes Council approved to put the project on hold due to affordability and pending the outcome of a wider review in to leisure and cultural assets and how best to target the required investment in arts and leisure for the benefit of the wider community. * Third Party Funding excludes Developer Contributions and receipts to be received in future years beyond the current 5-year programme. 5 Page 85 of 136
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PERTH AND KINROSS COUNCIL Finance & Resources Committee 13 September 2023 TREASURY ACTIVITY AND COMPLIANCE REPORT 2023/24 QUARTER 1 Report by Head of Finance (Report No. 23/244) 1. PURPOSE 1.1 The purpose of this report is to update the Committee on Treasury Activity for the quarter ending 30 June 2023 and to report on compliance with the Council’s Treasury Management Policy Statement (TMPS); Investment Strategy and Prudential Indicators. 2. RECOMMENDATION 2.1 It is recommended that the Committee: (i) note the content of this report. 3. STRUCTURE OF REPORT 3.1 This report is structured over the following sections: • Section 4: Economic Background • Section 5: Treasury Activity • Section 6: Compliance • Section 7: Investment Strategy Compliance and Performance • Section 8: Prudential Indicators • Section 9: Conclusion 4. ECONOMIC BACKGROUND 4.1 The Bank of England’s Monetary Policy Committee (MPC) increased the UK Bank Base Rate from 4.25% to 4.50% at its meeting on 11 May 2023 and to 5% on 22 June and 5.25% on 3 August 2023. These increases were in response to CPI inflation remaining significantly higher than the Bank’s target rate of 2%. However, whilst UK inflation remained unchanged at 8.7% in May, it fell more than expected to 7.9% in June, and then reduced further to 6.8% in July mainly due to lower fuel prices. UK retail sales for June rose by 0.7%, which was higher than forecast. UK unemployment rose to 4% in the period March to May 2023, whilst wages rose 6.9% from a year ago. 4.2 UK Gross Domestic Product (GDP) showed little growth in the 3 months to March 2023, rising by 0.1%, with initial indications that growth in the next quarter was around the same level. 6 Page 87 of 136
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4.3 Internationally, the Eurozone experienced no GDP growth in the quarter to 31 March 2023. CPI Inflation reduced due to falling energy prices, whilst interest rates were increased by 0.25% in June. In the US, GDP and inflation both fell. The US interest rate was increased to the range of 5.00% to 5.25% in May 2023, with a further increase to between 5.25% and 5.50% in July 2023. 4.4 The Public Works Loan Board’s (PWLB) certainty fixed interest rates for the quarter, which are based on yields on UK gilts, are shown in the graph at Appendix I. PWLB borrowing rates showed continuing volatility and increased over the quarter, particularly in respect of the shorter borrowing periods. This was due to the impact of base rate increases (including anticipated future increases), continued inflationary pressures, and economic growth prospects in the UK relative to other major economies. Over the 3-month period, all rates were higher by the end of the quarter. 4.5 When the Council last undertook significant new borrowing from the PWLB in 2019/20 and 2020/21, £260 million was borrowed at an average interest rate of 1.67% over a period of 47.8 years. Borrowing £260 million from the PWLB over the same duration would now incur an interest rate of approximately 5.06%, equivalent to an annual increase in interest charges of £8.8 million. A similar comparison of the Council’s borrowing over the last 10 years at 2.16% also highlights that borrowing at the current time incurs costs that are over double historic costs. 4.6 The Council has a requirement to undertake new borrowing of approximately £510 million to finance the approved Capital budget over the period 2023/24 to 2027/28. The expectation is that PWLB rates on long term borrowing will potentially not fall below 4% until mid-2025. As previously reported, this marked increase in the cost of borrowing will be a significant factor when members determine the Council’s strategic investment priorities in setting an affordable Capital budget in February / March of next year. 5. TREASURY ACTIVITY 5.1 A summary of the Council’s treasury position and transactions is shown at Appendix II. The main activities are detailed below. 5.2 During the quarter there was no new long-term PWLB borrowing undertaken, however, a 9-year PWLB fixed-rate loan for £5 million at 3.30% matured and was repaid in the quarter. Therefore, over the quarter the Council’s total long- term debt reduced from £603.3 million to £598.3 million. The average interest rate on long-term debt was 2.55% at the end of the quarter. There were 2 short-term market loans undertaken to manage cashflow , the first for £5 million for 28 days at 4.14% and the second for £4 million for 16 days at 4.12%. Both of these loans were repaid in the quarter. 5.3 Common Good and Charitable Fund balances held on fixed deposit with the Loans Fund remained the same at £2.294 million, with the average interest rate paid increasing from 3.93% to 3.95%. Funds held from associated bodies and organisations increased from £3.117 million to £4.299 million over the quarter, in line with their own cash flow requirements, whilst the average rate paid on these funds increased from 3.63% to 4.46% in line with increases in the Bank Base Rate. Page 88 of 136
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5.4 Short term cashflow surpluses are invested in a mixture of fixed term deposits, instant access accounts and money market funds. All investments were made in accordance with the approved Investment Strategy and Permitted Investments. Fixed Term Deposits 5.5 Cashflow surpluses which arise during the year, and which are not immediately required, are generally invested in fixed term deposits for periods of up to 12 months, or up to 3 years where forecast cashflow requirements allow. 5.6 There were 9 fixed rate deposits made in the quarter (totalling £53 million) at an average amount of £4.78 million and an average interest rate of 5.58% for an average term of 280 days. Therefore, fixed deposit activity in the current quarter decreased from the previous quarter to 31 March 2023 (£92 million) mainly due to increased expenditure on the Capital programme and cash requirements at the start of the new financial year. The deposits were spread between different banking sectors and other local authorities, and for varying durations. As interest rates increased over the quarter, the average rate on investments also improved. Fixed deposits undertaken in the quarter will generate £1,899,717 in interest at their maturity. Investments for Daily Cashflow Requirements 5.7 Cashflow surpluses which are required for more immediate needs are invested in the Council’s instant access and money market funds. These investment transactions in the quarter can be summarised as follows: • The daily average amount of such funds increased from £4.4 million in the last quarter to £6.1 million in the current quarter. • The average interest rate achieved on these accounts over the quarter increased from 3.64% to 4.31% reflecting the increase in the base rate. • Money Market Funds, which operate on instant access terms, were used extensively over the quarter. The average amount invested increased from £6.5 million in the previous quarter to £8 million in the current quarter, whilst the average interest rate increased from 3.72% to 4.32%. • The increase in activity on these accounts reflected the need to keep more funds for more immediate cashflow purposes over the quarter. • Interest generated on these investments over the quarter amounted to £144,782. 5.8 The total amount of investments outstanding at 30 June 2023 was £154.050 million compared to £173.650 million at the end of the previous quarter. The overall average rate of interest on the investments outstanding increased from 3.76% at the end of the previous quarter to 4.50% at the end of the current quarter. This reflects increases in the Bank Base Rate over the quarter. Page 89 of 136
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5.9 Income generated on investments undertaken during the quarter will total £2,044,499 on maturity. This measure reflects the total return on the investment activity undertaken in each quarter and is lower in comparison to the last quarter as fewer fixed term investments were undertaken. However, investments in the current quarter were undertaken at higher interest rates. 5.10 All of the above investment activities are consistent with the Council’s current investment strategy and cashflow requirements. 6. COMPLIANCE 6.1 For the quarter ending 30 June 2023, there were no breaches in compliance with the Council’s approved Treasury Management Policy Statement, Treasury Management Practices (TMP’s) or lending limits as detailed in TMP 4 (Approved Instruments, Methods & Techniques). 6.2 Appendix III shows the list of approved counterparties, based on the Council’s current lending policy, as at August 2023. 6.3 For the quarter ending 30 June 2023 the average closing cleared bank balance was £20,195.61 in credit. This reflects the application of the Council’s “sweep facility” operated by the bank, with any credit balance in excess of £35,000 being “swept up” overnight to the Council’s instant access account. 7. INVESTMENT STRATEGY COMPLIANCE AND PERFORMANCE 7.1 The Treasury Investment Strategy for 2023/24 was approved by the Council at its meeting on 10 May 2023 (report 23/135 refers). 7.2 In the current quarter, the level of Council investments peaked at £191.925 million on 19 April 2023 and reduced to £154.050 million by the end of the quarter. The average daily investment balance over the quarter was £168.004 million, which decreased from an average of £205.159 million in the previous quarter and from £256.348 million in the same quarter of last year. This highlights the steady reduction in investment balances over the last year as funds are applied in financing the approved Capital programme. 7.3 The Investment Strategy was applied in full over the quarter, with liquidity being maintained using instant access accounts and money market funds as detailed in paragraph 5.7 above. There were no other risks identified in the quarter. 7.4 The Investment Strategy also incorporates investments held by the Common Good Funds. All such investments during the quarter were with the Council’s Loans Fund. The only Council funds held by external fund managers relate to Council administered Charitable Trusts and are, therefore, not covered by this Investment Strategy. 7.5 The budgeted income in 2023/24 for Commercial Property investments is £2,004,000. There were no new property investments entered into during the quarter. Page 90 of 136
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8. PRUDENTIAL INDICATORS 8.1 Prudential Indicators for 2023/24 to 2027/28 were approved by the Council at the meeting on 10 May 2023 (report 23/135 refers) as part of the Annual Treasury & Investment Strategy report. 8.2 The latest estimates of the Prudential Indicators, in line with the Council’s current approved Capital Budget and Capital Financing (borrowing) requirements, are shown in Appendix IV. These show that the Council adhered to all Prudential Limits in the quarter. However, the annual Loan Charges relative to the Net Revenue stream and the Capital Financing (Borrowing) Requirement show an increasing trend which reflects the current Capital Programme and increasing interest rates forecast over the period. 9. CONCLUSION 9.1 The Bank of England’s MPC increased the Bank Base Rate from 4.25% to 5% over the quarter due to continued inflationary pressures, with a subsequent increase to 5.25% in August 2023. 9.2 Public Works Loans Board (PWLB) borrowing rates continued to be volatile over the quarter due to continued inflationary expectations and economic growth prospects. All PWLB borrowing rates increased over the quarter and are now currently around three times higher in comparison to the borrowing rates previously secured by the Council on long-term borrowing undertaken in 2019/20 and 2020/1. 9.3 Investment activity in the quarter consisted mainly of the use of fixed deposits, but at a reduced level from the previous quarter. Instant access and Money market funds were used to meet day-to-day cashflow requirement. Investment rates increased over the quarter, however, the total level of investments outstanding reduced. 9.4 The Council adhered to its Investment Strategy and policies throughout the quarter, with no breaches in compliance. 9.5 The Council’s Prudential Indicators were also adhered to throughout the quarter. Page 91 of 136
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Author(s) Name Designation Contact Details John Jennings Senior Accountant CHXFinance@pkc.gov.uk Approved Name Designation Date Stewart MacKenzie Karen Donaldson Head of Finance Chief Operating Officer 30 August 2023 30 August 2023 Page 92 of 136
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce None Asset Management (land, property, IST) None Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications Corporate Plan 1.1 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: • Tackling Poverty • Tackling climate change and supporting sustainable places • Growing a sustainable and inclusive local economy • Enabling our children and young people to achieve their full potential • Protecting and caring for our most vulnerable people • Supporting and promoting physical and mental wellbeing • Placing communities at the heart of how we work 1.2 This report relates to all of these objectives. 2. Resource Implications Financial 2.1 There are no direct financial implications arising from this report other than those reported within the body of the main report. Workforce Page 93 of 136
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2.2 There are no direct workforce implications arising from this report. Asset Management (land, property, IT) 2.3 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments Equality Impact Assessment 3.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 3.2 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.3 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.4 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Sustainability 3.5 Under the provisions of the Local Government in Scotland Act 2003 the Council has to discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.6 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. 4. Consultation 4.1 The Chief Executive and the Council’s Treasury advisors, Link Asset Services, have been consulted in the preparation of this report. Page 94 of 136
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2. BACKGROUND PAPERS 2.1 No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES • Appendix I – PWLB Fixed Maturity Interest Rates from 1 April to 30 June 2023. • Appendix II – Summary of the Treasury Position and Transactions from 1 April to 30 June 2023. • Appendix III – Approved Investment Counterparty List. • Appendix IV – Monitoring of Prudential Indicators – Quarter ending 30 June 2023. Page 95 of 136
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PWLB Fixed Maturity Interest Rates From 1st April to 1st July 2023 (Certainty Rate) APPENDIX I 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 6.00 6.25 6.50 01-Apr-23 08-Apr-23 15-Apr-23 22-Apr-23 29-Apr-23 06-May-23 13-May-23 20-May-23 27-May-23 03-Jun-23 10-Jun-23 17-Jun-23 24-Jun-23 01-Jul-23 1 Year 5 Years 10 Years 20 Years 30 Years 50 Years 6 Page 97 of 136
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SUMMARY OF THE TREASURY POSITION AND TRANSACTIONS 1 APRIL TO 30 JUNE 2023 APPENDIX II 1 LONG TERM BORROWING (a) Long Term Borrowing 1st April to 30th June 2023 Average Average Amount No. Rate (%) Life (years) (£) None 0 0.00% 0.00 0 0 0.00% 0.0 0 (b) Long Term Debt Repayments 1st April to 30th June 2023 Average Amount No. Rate (%) (£) PWLB - Maturity Loan - Scheduled Repayments 1 3.30% 5,000,000 1 3.30% 5,000,000 (c) Long Term Debt Outstanding Outstanding Average Outstanding Average 31-Mar-23 Rate 30-Jun-23 Rate £ £ Public Works Loan Board 560,000,000 2.40% 555,000,000 2.39% Money Market Loans (LOBO's) 43,200,000 4.59% 43,200,000 4.59% Other Long Term Debt 140,000 0.00% 140,000 0.00% TOTAL 603,340,000 2.56% 598,340,000 2.55% 2 SHORT TERM BORROWING (a) Short Term Market Borrowing - 1st April to 30th June 2023 Average Average Average Interest No. Amount (£) Rate (%) Term (Days) (£) Temporary borrowing 2 4,500,000 4.13% 23 23,103.56 2 4,500,000 4.13% 23 23,103.56 (b) Short Term Borrowing Outstanding Outstanding Average Outstanding Average 31-Mar-23 Rate 30-Jun-23 Rate £ £ Market Borrowing 0 0.00% 0 0.00% Common Good and Charitable Funds 2,293,508 3.93% 2,293,508 3.95% Local Trusts & Investors 3,117,401 3.63% 4,298,550 4.46% TOTAL 5,410,909 3.76% 6,592,058 4.28% 6 Page 99 of 136
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SUMMARY OF THE TREASURY POSITION AND TRANSACTIONS 1 APRIL TO 30 JUNE 2023 APPENDIX II 3 INVESTMENTS (a) Investment Transactions - 1st April to 30th June 2023 Average Average Average Total Fixed Deposits & Investments No. Amount (£) Rate (%) Term (Days) Interest (£) Banks 2 7,500,000 5.69% 338 784,349.32 Foreign Banks and Institutions 5 5,600,000 5.53% 249 1,078,586.58 Other Local Authorities 2 5,000,000 4.48% 30 36,780.82 9 4,777,778 5.58% 280 1,899,716.71 Average Average Total Instant/Notice Accounts & Money Market Funds Amount (£) Rate (%) Interest (£) Instant Access/Notice accounts 2,212,215 4.24% 34,003.90 Money Market Funds 8,075,298 4.32% 110,777.83 6,120,937 4.31% 144,781.73 (b) Investments Outstanding Outstanding Average Outstanding Average 31-Mar-23 Rate 30-Jun-23 Rate £ £ UK Banks 99,650,000 3.42% 71,050,000 4.33% Foreign Banks and Institutions 32,000,000 3.89% 53,000,000 4.69% Money Market Funds 0 0.00% 0 0.00% Other Local Authorities 42,000,000 4.47% 30,000,000 4.58% TOTAL 173,650,000 3.76% 154,050,000 4.50% Page 100 of 136
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APPROVED INVESTMENT COUNTERPARTY LIST APPENDIX III Fitch Credit CDS Maximum Country Rating Range Lending Note (2) Category 1 - Principal UK Clearing Banks - 40% Investment total (or £20M per Counterparty if higher) (Minimum rating required Fitch A, F1) Bank of Scotland (RFB) (5) UK A+, F1 In range 6 months £80million Group limit Barclays Bank plc (NRFB) (5) UK A+, F1 No data 3 months Barclays Bank plc (RFB) (5) UK A+, F1 In range 6 months Goldman Sachs International Bank UK A+, F1 In range 6 months Handelsbanken plc UK AA, F1+ No data 12 months HSBC Bank plc (NRFB) UK AA-, F1+ In range 12 months HSBC Bank plc (RFB) UK AA-, F1+ No data 12 months Lloyds Bank Corporate Markets Plc (NRFB) UK A+, F1 No data 6 months £80million Group limit Lloyds Banking Group plc (RFB) UK A+, F1 In range 6 months £80million Group limit NatWest Markets Plc (NRFB) UK A+, F1 In range 12 months Royal Bank of Scotland plc (RFB) (inc Nat West) (3) (4) UK A+, F1 Nationalised 12 months Sovereign Rating AA Santander UK plc (inc Cater Allen) UK A+, F1 No data 12 months Standard Chartered Bank UK A+, F1 In range 6 months Sumitomo Mitsui Banking Corporation Europe Ltd UK A, F1 In range 6 months Category 2 - Foreign Banks & Institutions - 25% Investment total (or £10M per Counterparty if higher) (Minimum rating required Fitch A, F1) Australia and New Zealand (ANZ) Banking Group Ltd Aus A+, F1+ In range 12 months Commonwealth Bank of Australia Aus A+, F1+ In range 12 months Macquarie Bank Ltd Aus A, F1 No data 6 months National Australia Bank Ltd Aus A+, F1+ In range 12 months Westpac Banking Corporation Aus A+, F1+ In range 12 months BNP Paribas Fortis Bank Belgium A+, F1 No data 1 month Sovereign Rating AA- KBC Bank Belgium A+, F1 No data 1 month Sovereign Rating AA- Bank of Montreal Can AA-, F1+ No data 12 months Bank of Nova Scotia Can AA-, F1+ No data 12 months Canadian Imperial Bank of Commerce Can AA-, F1+ No data 12 months National Bank of Canada Can A+, F1 No data 6 months Royal Bank of Canada Can AA, F1+ No data 12 months Toronto Dominion Bank Can AA-, F1+ No data 12 months Danske Bank Denmark A, F1 In range 6 months Nordea Bank Finland plc Finland AA-, F1+ No data 1 month Sovereign Rating AA+ BNP Paribas France A+, F1 In range 1 month Sovereign Rating AA Credit Agricole Corporate and Investment Bank France A+, F1 In range 1 month Sovereign Rating AA Credit Agricole SA France A+, F1 In range 1 month Sovereign Rating AA Credit Industriel et Commercial France A+, F1 No data 1 month Sovereign Rating AA DZ Bank AG Germany AA-, F1+ No data 12 months Landesbank Hessen-Thueringen Girozentral (Helaba) Germany A+, F1+ In range 12 months Landwirtschaftliche Rentenbank Germany AAA, F1+ No data 24 months NRW Bank Germany AAA, F1+ No data 24 months ABN AMRO Bank Netherlands A, F1 No data 6 months Bank Nederlandse Germeenten Netherlands AAA, F1+ No data 24 months Cooperatieve Rabobank Netherlands A+, F1+ In range 12 Months ING Bank Netherlands AA-, F1+ In range 12 Months DBS Bank Limited Singapore AA-, F1+ No data 12 months United Overseas Bank Ltd Singapore AA-, F1+ No data 12 months Skandinaviska Enskilda Banken AB Sweden AA-, F1+ No data 12 months Svenska Handelsbanken AB Sweden AA, F1+ No data 12 months Swedbank AB Sweden A+, F1 No data 12 months UBS AG Switzerland AA-, F1+ In range 6 months Bank of America, NA USA AA-, F1+ No data 12 months Bank of New York Mellon USA AA, F1+ No data 24 months Citibank, NA USA A+, F1 In range 12 months JP Morgan Chase Bank, NA USA AA, F1+ No data 12 months Wells Fargo Bank, NA USA AA-, F1+ In range 12 months 6 Page 101 of 136
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APPROVED INVESTMENT COUNTERPARTY LIST APPENDIX III Category 3 - Subsidiary Banks & Building Societies - 15% of Investment total (or £10M per Counterparty if higher) (Minimum rating required Fitch A, F1) (parent bank shown in brackets) Subsidiary Banks None Building Societies Nationwide Building Society UK A, F1 No data 6 months Category 4 - Other Local Authorities - 20% of Investment total (or £20M per Counterparty if higher) As arranged Category 5 Money Market Funds - 10% of Investment Total (or £10M per Counterparty if higher) (Minimum rating required Fitch AAA) Aberdeen Standard Investments UK AAA Aviva Investors Liquidity Fund UK AAA Federated Sterling Liquidity Fund (Class 3) UK AAA Insight Sterling Liquidity Fund (Class 5) UK AAA Note: (1) - Standard & Poor's credit ratings shown, as no Fitch credit rating available (2) - All Soveriegn credit ratings for above Countries are AAA, unless stated otherwise. (3) - Banks are part/majority owned by the UK government (4) - UK Sovereign Rating is AA (Fitch and Standard & Poor's) Last Updated: 01-Aug-23(5) - NRFB = Non Ring Fenced Bank, RFB = Ring Fenced Ban Page 102 of 136
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PERTH AND KINROSS COUNCIL PRUDENTIAL INDICATORS - QUARTER ENDING 30 JUNE 2023 APPENDIX IV 1 Financing Costs:Net Revenue Stream The ratio of Capital Financing Costs (Loan Charges) to the Council's net revenue stream shall not exceed the following limits, which are based on historic levels, and allow some headroom for movement in interest rates. The estimated Financing Costs below are based on the latest monitoring figures. 2023/24 2024/25 2025/26 2026/27 2027/28 Prudential Limit - General Fund 15.00% 15.00% 15.00% 15.00% 15.00% Estimated Ratio of Financing Costs to Revenue 7.08% 8.60% 10.09% 10.51% 9.99% Prudential Limit - HRA 30.00% 30.00% 30.00% 30.00% 30.00% Estimated Ratio of Financing Costs to Revenue 22.37% 22.31% 23.34% 23.55% 22.74% 2 Gross & Net Borrowing and Capital Financing Requirements For prudence, net external borrowing must not exceed the total capital financing requirement, thus ensuring that over the medium term, borrowing is only undertaken for capital purposes. The estimated total net borrowing and Capital Financing Requirement at the end of each of the years are as follows: Actual as at Projected Projected Projected Projected Projected 30-Jun-23 31-Mar-24 31-Mar-25 31-Mar-26 31-Mar-27 31-Mar-28 Net External Borrowing* 570,637,000 714,533,000 966,316,000 1,066,099,000 1,120,982,000 1,155,864,000 Gross External Borrowing* 724,687,000 744,533,000 986,316,000 1,086,099,000 1,140,982,000 1,175,864,000 Capital Financing Requirement 720,743,000 837,670,000 1,007,726,000 1,105,967,000 1,161,475,000 1,196,084,000 *For the purpose of this indicator, Borrowing includes the outstanding liability under PPP/PFI contracts. 3 Estimates of Gross Capital Expenditure The total estimated Capital Expenditure contained within the Council's Budgets for each year is as follows, based on updated monitoring figures. Composite Programme 2023/24 2024/25 2025/26 2026/27 2027/28 Current estimate 209,005,000 195,542,000 111,577,000 67,408,000 48,605,000 Original Budget Estimate (including Budget Motion) 192,880,000 182,661,000 111,465,000 67,816,000 46,219,000 Movement in Estimated Capital Expenditure 16,125,000 12,881,000 112,000 (408,000) 2,386,000 The Original Budget Estimates are those per the 2023/24 to 2027/28 Composite Capital Budget Report on 1 March 2023 The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 1 on 13 September 2023. HRA Programme 2023/24 2024/25 2025/26 2026/27 2027/28 Current estimate 24,746,000 13,853,000 15,519,000 19,044,000 19,044,000 Original Budget Estimate 18,457,000 13,858,000 18,669,000 19,044,000 19,044,000 Movement in Estimated Capital Expenditure 6,289,000 (5,000) (3,150,000) 0 0 The Original Budget Estimates are those per the 2023/24 to 2027/28 Housing & Social Wellbeing Budget Report on 25 January 2023. The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 1 on 13 September 2023. 6 Page 103 of 136
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PERTH AND KINROSS COUNCIL PRUDENTIAL INDICATORS - QUARTER ENDING 30 JUNE 2023 APPENDIX IV 4 Estimate of Capital Financing Requirement The estimate (as at July 2023) of the Capital Financing Requirement (ie new borrowing requirement for Capital Expenditure) for each year based on these plans is as follows: Composite Programme 2023/24 2024/25 2025/26 2026/27 2027/28 Current Estimated Capital Financing Requirement 157,207,000 175,445,000 93,069,000 46,776,000 25,377,000 Original Budget Estimate (including Budget Motion) 146,850,000 164,688,000 95,082,000 49,184,000 24,991,000 Movement in Estimated Capital Financing Requirement 10,357,000 10,757,000 (2,013,000) (2,408,000) 386,000 The Original Budget Estimates are those per the 2023/24 to 2027/28 Composite Capital Budget Report on 1 March 2023 The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 1 on 13 September 2023. HRA Programme 2023/24 2024/25 2025/26 2026/27 2027/28 Current Estimated Capital Financing Requirement 22,780,000 11,935,000 13,271,000 16,524,000 16,292,000 Original Budget Estimate 16,402,000 11,940,000 16,421,000 16,524,000 16,292,000 Movement in Estimated Capital Financing Requirement 6,378,000 (5,000) (3,150,000) 0 0 The Original Budget Estimates are those per the 2023/24 to 2027/28 Housing & Social Wellbeing Budget Report on 25 January 2023. The latest estimates for Capital Expenditure are based on the F&R Capital Monitoring Report No 1 on 13 September 2023. 5 External Debt (Gross and Net) As at Projected Projected Projected Projected Projected External Borrowing 30-Jun-23 31-Mar-24 31-Mar-25 31-Mar-26 31-Mar-27 31-Mar-28 Public Works Loan Board 555,000,000 580,000,000 827,000,000 932,000,000 992,000,000 1,032,000,000 Market Bonds (LOBOs) 43,200,000 43,200,000 43,200,000 43,200,000 43,200,000 43,200,000 Project Borrowing 140,000 0 0 0 0 0 Special Loans 2,293,508 2,293,508 2,293,508 2,293,508 2,293,508 2,293,508 Temporary Loans/Other Borrowing 4,298,550 4,000,000 3,700,000 3,400,000 3,200,000 3,000,000 Other Long Term Liabilities (PPP/PFI) 119,755,227 115,039,977 110,122,727 105,205,477 100,288,227 95,370,977 Total Gross External Debt 724,687,285 744,533,485 986,316,235 1,086,098,985 1,140,981,735 1,175,864,485 Short Term Investments (154,050,000) (30,000,000) (20,000,000) (20,000,000) (20,000,000) (20,000,000) Long Term Investments 0 0 0 0 0 0 Total Net External Debt 570,637,285 714,533,485 966,316,235 1,066,098,985 1,120,981,735 1,155,864,485 Note: Operational Boundary 725,000,000 745,000,000 986,000,000 1,086,000,000 1,141,000,000 1,176,000,000 Authorised Limit 1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000 The Operational Boundary and Authorised Limit are based on Gross External Debt. Page 104 of 136
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PERTH AND KINROSS COUNCIL PRUDENTIAL INDICATORS - QUARTER ENDING 30 JUNE 2023 APPENDIX IV 6 Principal Sums Invested Longer Than 365 Days The Upper Limit for sums invested for over 1 year up to 3 years is £45 million. There were no amounts invested within this period as at the end of the quarter. 7 MATURITY STRUCTURE The lower and upper limit for the proportion of the Council's total-long term debt which matures in each of the time bandings below, and is therefore subject to refinancing at the prevailing market rates, is as follows: Borrowing Maturity Structure Lower Limit Upper Limit Estimated Under 12 months 0% 35% 0.68% over 12 months and < 24 months 0% 35% 2.50% over 2 years and < 5 years 0% 50% 4.84% over 5 years and < 10 years 0% 75% 6.00% over 10 years 10% 95% 85.99% The maurity profile for the Council's current long-term portfolio as at 30th June 2023, measured from the start of the financial year, is as follows: Less 1 Year 1 - 2 Years 2 - 5 Years 5 - 10 Years 10 - 20 Years 20 - 30 Years 30 - 40 Years 40 - 50 Years Over 50 Years Total PWLB 0 13,000,000 20,000,000 17,500,000 5,000,000 0 50,500,000 449,000,000 0 555,000,000 LOBOs 0 0 0 0 0 13,000,000 25,200,000 5,000,000 0 43,200,000 Other 140,000 0 0 0 0 0 0 0 0 140,000 other 4,715,250 4,917,250 14,751,750 25,571,000 66,900,000 2,899,977 0 0 0 119,755,227 Total 4,855,250 17,917,250 34,751,750 43,071,000 71,900,000 15,899,977 75,700,000 454,000,000 0 718,095,227 Percentage 0.68% 2.50% 4.84% 6.00% 10.01% 2.21% 10.54% 63.22% 0.00% 100.00% Page 105 of 136
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PERTH AND KINROSS COUNCIL Finance & Resources Committee 13 September 2023 TRANSFORMATION & CHANGE STRATEGY 2022/23-2027/28 – UPDATE REPORT Report by Chief Executive (Report No. 23/245) 1. PURPOSE 1.1 This report provides an update on the Council’s Transformation & Change Strategy (Report 22/142), approved by Council in June 2022, and the Strategic Planning Update and 2023-26 General Fund Budget Report approved in March 2023 (Report 23/72). It also shows how the transformation and change programme acts as an enabler to the delivery of the key strategic objectives as outlined within the Medium Term Financial Plan 2023-29 (Report 22/249) and the Corporate Plan 2022-27 (Report 22/311). 1.2 This report outlines the progress made in setting the conditions to support the organisation through a period of significant change, as well as providing updates on the projects outlined within the Transformation & Change Strategy and how they dovetail with the Leadership Review presented to the Committee in June 2023 (Report No 23/195). 2. RECOMMENDATIONS 2.1 It is recommended that the Finance & Resources Committee: (i) Notes the contents of the report and the progress to date. (ii) Approves the use of £240,000 from the earmarked Reserve for Transformation & Workforce Management to further support the delivery of key projects as outlined in section 5 of this report. (iii) Notes that update/engagement sessions with all Elected Members will be programmed throughout the year for all Transformation and Change projects when appropriate. 3. STRUCTURE OF REPORT 3.1 This report is structured over the following sections: ▪ Section 4: Background and Progress Update ▪ Section 5: Proposals ▪ Section 6: Conclusion ▪ Appendices 7 Page 107 of 136
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4. BACKGROUND AND PROGRESS UPDATE 4.1 The Transformation & Change Strategy, our Financial Strategy and our Medium-Term Financial Plan, all align to support the delivery of the Council’s vision of “a Perth and Kinross where everyone can live life well, free from poverty and inequality,” together with the strategic priorities and key objectives outlined with the new Corporate Plan. 4.2 The Transformation & Change Strategy recognised that due to the size and complexity of the organisation a range of approaches to change would be required: ▪ transforming our customer’s experience ▪ transforming the shape and structure of our organisation ▪ transforming our systems and processes ▪ transforming our spending and response to demand 4.3 It also clearly set out that to support the necessary change we needed to: ▪ Take a greater collaborative approach to the delivery of our priorities. ▪ Create the environment where staff at all levels could take greater responsibility, be risk aware and take greater responsibility and ownership of their own areas of work. ▪ Have a more accessible organisation, with the right information at the right time for staff to be able to assist and support people more effectively. ▪ Enable staff and managers to adopt more of an enabling and empowering leadership style. 4.4 It was agreed that the programme would be developed and phased over a five year period, with work undertaken during year one (2023/24) being key to setting the foundation for the successful delivery of the programme in future years. To build these foundations, our focus during the first year has been around the Strategic Leadership Review and the nine agreed consolidation workstreams. The nine identified consolidation workstreams look to identify opportunities to consolidate functions and activities that are currently disaggregated, with the aim of reducing any areas of duplication, improving our systems and processes and putting the customer at the centre. 4.5 We also recognised that to enable change we needed to set the right conditions so that our people feel supported through organisational transformation. Fundamental to supporting staff is our cultural engagement programme, which has a focus on our purpose, vision and values, ensuring that these are reflected in our behaviours. It looks to continue to grow a culture where individuals are valued and treated with respect. 4.6 Within the Strategic Planning Update and 2023-26 General Fund Budget Report approved in March 2023 (Report 23/72), a £500,000 investment was approved. This funding has provided additional capacity, enabling a greater focus on planning and support to the delivery of the overall programme. Page 108 of 136
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4.7 The undernoted diagram is an illustration of the approach we are taking and will continue to be developed. Figure 1 – Nesta (July 2020) Progress Update – Culture 4.8 We need to create the right conditions to effectively change the way we work, and which allows us to achieve our aims and objectives. 4.9 In recognising this, since June 2022 we have held a series of workshops with staff with the Chief Executive and Executive Leadership Team (ELT) members where staff have been invited to share their experiences and contribute to transformation and key organisational topics. These sessions have offered staff the opportunity to have discussions around the vision and values of the organisation and give suggestions for change and improvement. 4.10 As previously mentioned, the cultural engagement programme is fundamental to the success of the transformation programme. The Employee Engagement Plan 2023/24 sets out the overall approach and a programme of events and actions to enable staff from across the organisation to become actively involved. 4.11 Since April 2023 we have:- ▪ Held monthly sessions with the Extended Executive Leadership Team to discuss progress, issues and areas for further collaboration and improvement. These meetings have had a particular focus on our leadership culture and provided an opportunity to engage and consult on the proposals within the leadership review. By holding meetings within different localities across the Perth and Kinross area the team have had an opportunity to better understand each locality and meet with local community representatives to discuss specific priorities and areas for development and improvement. Page 109 of 136
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▪ Provided monthly opportunities for service managers to give and receive information, collaborate on key issues and work across the organisation, influence strategic decisions and direction, build relationships and connections. ▪ Developed and piloted the Leadership Competencies and Performance & Development Discussion framework which sets out the expectations which focus on skills and behaviours. ▪ Continued to develop a coaching culture across the organisation with a range of coaching opportunities such as individual coaching, team coaching and coaching conversation programmes to equip participants with the tools, skills, and confidence to have coaching conversations with their staff and colleagues. ▪ Launched a revised Induction Welcome Event which included an interactive introduction and welcome to the Council for all new employees. ▪ Introduced a Transformation Learning Programme to support staff at all levels impacted by change. ▪ Continued our engagement with staff and teams across the organisation and have developed a programme of Transformation and Change - Make the Change You Want to See workshops. 4.12 The Transformation & Change Strategy recognises that we need to evolve and change. A significant contributor will be our approach to workforce management as we go through the change process to enable a shift of resources to where they are needed most, whilst also developing and skilling our workforce to meet changing priorities. These changes will take time to be fully effective. Progress Update - Consolidation 4.13 The Transformation & Change Strategy outlined nine consolidation projects and intimated a range of other projects which formed Phase 1 of the overall programme. Since April 2023 good progress has been made. This has been achieved at a time when the Council is going through significant change, whilst continuing to deliver normal business. 4.14 The work undertaken through the various consolidation projects informed the strategic leadership structure, which was approved at the Finance & Resources Committee on 20 June 2023. 4.15 The consolidation projects are bringing together disaggregated functions across the Council under single points of management, addressing gaps and areas of duplication, delivering efficiencies and a consistent organisational approach. These projects are also progressing a range of system and process improvements. Appendix 1 to this report outlines the overall status of the programme so far. 4.16 Project leads have each undertaken significant consultation and engagement with teams directly impacted by reviews and have also engaged with Elected Members where appropriate. An engagement plan with Elected Members has been developed and will be updated as the programme progresses to Page 110 of 136
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continue to enable ongoing communication, engagement and input into the programme. 4.17 Significant work has been undertaken to get each of the projects through the planning phase and to the point of developing transition and improvement plans. This has involved baselining data, understanding need/demand, identifying efficiencies and undertaking benchmarking to determine the optimum operating models. This has been key to developing the map and plan for the future, which has now dovetailed with the leadership review. Appendix 2 to this report provides further detail on each of the projects, and the benefits realised to date. 4.18 Each of the projects have their own benefits and challenges, however there are some which are common to them all:- • Greater collaborative working, with project team members working together, sharing knowledge and experience, and building relationships. • The creation of shadow boards in several projects means that decisions are being made at the right time and by the right people. • Baselining and benchmarking information has identified where system and process improvements could be made – placing the customer at the centre. • The key challenge for the individual projects teams has been balancing projects whilst undertaking normal business. • Feedback from some community groups have highlighted that they have seen positive changes in how we work with local communities. 4.19 As highlighted in Appendix 1, at the same time as progressing with the consolidation projects, progress is being made with Phase 2 projects. These projects are primarily managed though the relevant Service area(s) and progress reported to appropriate committee(s), however progress is also reported through the Transformation & Change Board and supported through the Programme Management Office. Appendix 3 to this report provides an overview of the projects and their current status. Leadership Review – Progress 4.20 Work is ongoing to develop and deliver the new strategic leadership structure. The recruitment process for the Director posts is underway and the next stage is the recruitment of the Strategic Leads. The strategic leadership structure will be fully implemented by April 2024. 4.21 At the same time the operating model is being developed and workshops have been held with the ELT, EELT, Leadership Forum and existing Service Management Teams to establish the risks, issues, and opportunities and to develop and implement a transition plan. Page 111 of 136
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4.22 Transition arrangements for the transfer of responsibilities, including leading consolidation projects, to Strategic Leads are underway to ensure timescales and implementation aligns with the leadership review. It is difficult at this stage to have fixed timescales as this will be dictated by the recruitment process. Indicative timescales are: Consolidation Programme Leadership Review Timeline Transformation & Change - Committee Approval Jun-22 Consolidation Reviews - Project Initiation Jun-22 Review Initiation & Consultation and Engagement Commenced Sep-22 Scoping complete Oct-22 Options Appraisals Complete Dec-22 Interdependency Mapping & Agreement on Best Fit Jan-23 Budget & Transformation Report – Council Mar-23 Formal Consultation Complete Jun-23 Strategic leadership structure approved by F&R Committee Jun-23 Operating Models Agreed Director Appointments Commence Aug-23 Strategic Lead Appointments Commence (following appointment of Directors) tbc Transition Plans Developed Sep-23 Dovetail with the Leadership Review (ongoing as appointments are made) Oct-23 Strategic Leadership Structure Fully Implemented Apr-24 Project implementation and improvement plans continuing (timescales vary according to the scale and complexity of the project) Ongoing Savings 4.23 Savings of £1.042m have been achieved in 2023/24. With further savings planned of £1.713m for 2024/25 and £3.288m for 2025/26 across the whole programme. In addition, the new Executive & Strategic Leadership Structure that was approved by the Finance & Resources Committee on 20 June 2023 (Report No. 23/195) will contribute further recurring savings of £789,000 by 2026/27. 4.24 As projects continue to progress, further savings will be identified. Efficiencies will also be achieved through cost avoidance and/or cost efficiency as a result of streamlined processes and a reduction in the duplication of activity. In particular, the Strategic Commissioning and Page 112 of 136
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Procurement project presents opportunities for the delivery of savings and small tests of change in this area have already delivered efficiencies. 5. PROPOSALS ▪ Project Leads will continue to take forward identified improvement activity as well as recognising that transition plans should reflect the impact of both the leadership review and the Council’s developing operating model. ▪ To take forward the approved transformation & change projects there is a requirement to provide non-recurring funding as follows – o Transforming Services for Children and Young People with Complex Additional Support Needs - £40,000 in 2023/24 for a Project Manager post to support this project – this is a multi year appointment with the remainder of the funding being included in future revenue budgets that will be agreed by Council in due course. o Development of financial systems and capacity to roll out improvements - £100,000 in 2023/24 o Strategic Procurement & Commissioning - £50,000 to provide capacity in 2023/24 o ALEOS - £10,000 to engage specialist consultancy o Strategic Planning - £40,000 to increase capacity on a temporary basis ▪ This initial ask of £240,000 will be funded from the earmarked Reserve for Transformation & Workforce Management. ▪ Elected members will be kept updated on the progress of with projects through ongoing engagement sessions and workshops as appropriate, throughout the delivery of the programme. 6. CONCLUSION 6.1 This report provides an update on the progress being made to deliver the Council’s Transformation & Change Strategy. It also provides an overview of the progress made to create the conditions for the organisation to change as well as providing and overview of progress on individual projects. 6.2 To allow further progress there is also a request to draw additional funding from the earmarked Reserve to support the delivery of the programme. Page 113 of 136
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Authors Name Designation Contact Details Clare Mailer Director – Strategy, People & Resources ComCommitteeReports@pkc.gov.uk 01738 475000 Carole Hendry Performance & Business Support Manager Approved Name Designation Date Thomas Glen Chief Executive 30 August 2023 APPENDICES • Appendix 1 – Overall Programme Status • Appendix 2 – Overview of Consolidation Projects • Appendix 3 – Overview of Phase 2 Projects Page 114 of 136
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce Yes Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications Corporate Plan 1.1 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: • Tackling Poverty • Tackling climate change and supporting sustainable places • Growing a sustainable and inclusive local economy • Enabling our children and young people to achieve their full potential • Protecting and caring for our most vulnerable people • Supporting and promoting physical and mental wellbeing • Placing communities at the heart of how we work 1.2 This report relates to all of these objectives. Page 115 of 136
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2. Resource Implications Financial 2.1 There are no direct financial implications arising from this report other than those reported within the body of the main report. Workforce 2.2 There are no direct workforce implications arising from this report other than those reported within the body of the main report. Asset Management (land, property, IT) 2.3 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments Equality Impact Assessment 3.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 3.2 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.3 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.4 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Sustainability 3.5 Under the provisions of the Local Government in Scotland Act 2003 the Council must discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.6 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. Page 116 of 136
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4. Consultation Internal 4.1 The Executive Leadership Team has been consulted in the preparation of this report. 2. BACKGROUND PAPERS 5.1 No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES • Appendix 1 – Overall Programme Status • Appendix 2 – Overview of Consolidation Projects • Appendix 3 – Overview of Phase 2 Projects Page 117 of 136
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Appendix 1 Overall Programme Status Page 118 of 136
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Appendix 2 Overview of Phase 1 Consolidation Projects Project Overview Benefits/Achievements Customer Services Consolidation of the many dispersed customer service functions including workforce, customer service centres and systems Consolidation of dispersed contact centres into 2 Customer Solutions Hubs (Money and Customer Services), from previous 11 separate contact centres, to enable a standardised, simplified approach across the Council. This will result in easier access for customers, getting them to the right place first time. There is also a potential reduction in telephone menus and licences required for contact centre technology. The “Money” Hub will specialise in handling customer needs in relation to Council Tax bills, payments, benefits and grants. This aligns strongly with the Council’s priority to tackle poverty and support our most vulnerable citizens. The second “Customer Services” Hub will deal with all other types of enquiries. This aligns well with infrastructure, property and environmental matters. The new model will focus on customer demand; adoption of new ways of working and emerging digital technologies. This includes ‘One Front Door’ which will simplify the customer journey, remove duplication of effort, improve performance reporting and forecasting of demand and decrease training overheads. The Council concession application process will be streamlined to ensure customers receive money/benefits as early as possible. Also, by focusing on digital by default, customers will receive a more efficient and convenient service, whilst costs are reduced. Press and Communication A centrally managed communications, design and marketing provision working to a single workplan incorporating consistent service level agreements for each service Bringing together resources from across the organisation into a consolidated team has enabled additional support to various projects. For example:- • Due to a transfer of resource, additional capacity has been introduced in relation to video skills, including filming and editing. • Housing/tenant communication lead now managed as part of corporate team. This has resulted in reduced duplication of effort and ensured that content produced is more effectively shared across relevant channels. Page 119 of 136
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Project Overview Benefits/Achievements • Following a review of the marketing and content creation contract for Perth City and Towns (our consumer-facing visitor and events channels), the management of the Facebook and Instagram channels for Perth City and Towns have been brought into the corporate Communications Team at no additional cost, allowing co-ordinated oversight of content and meaning that the funding available for the external contract can now get a better return on investment by focussing on creating new content and marketing campaigns. Finance A consolidated model which brings together corporate and service teams under one management business model with service business partnering arrangements. The legislative and business requirements for integrated finance functions serving the Integrated Joint Board were acknowledged Finance Project Board (Shadow Board) established to act as an interim management team during the transition to an integrated Finance function. All resource issues across teams are now managed through the Board. Significant upgrade to the Council’s Financial system, Integra, was successfully undertaken, with no disruption to service through the migration to Integra Centros. Operational improvements have been identified which are currently being implemented, however the move to Integra Centros also creates a platform for significant improvements in the automation of transactional activity and reporting. A baseline assessment of activity is being undertaken, supported through engagement with the finance teams and stakeholders, to identify opportunities for efficiencies and the streamlining and improvement of current processes. Professional & Business Support Consolidated Professional and Business Support Services under one management model, with staff operating in a business partner model for each Service A single consistent and streamlined approach across the Council for each of the functions within the remit of professional and business support consolidation workstream. This supports the removal of silo working, improves and standardises processes, delivers efficiencies/savings and brings a Team PKC approach to the areas in scope The approved model sets out the two aspects of business support provision being: ➢ Centrally Designed & Centrally Managed Business Support ➢ Centrally Designed, Locally Delivered Business Support Improvements also being made around:- Page 120 of 136
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Project Overview Benefits/Achievements ➢ Committee report writing/political awareness training sessions – Right First Time approach. ➢ New system for handling information requests (Freedom of Information / Subject Access Requests ARS) is being rolled out, resulting in a reduced staffing resource being required. ➢ Consolidated Teams and working practices for Business Support. ➢ A series of “quick wins” being considered for implementation. Strategic Planning and Performance A strategic planning, performance, and risk function under one business management model that will support continuous improvement evidence-based decision making and delivery on our priorities Systems Mapping – systems mapping exercise carried out, with the aim being to streamline, consolidate and review the various performance management systems currently in use. This will generate efficiencies and potentially savings in terms of system costs. Consolidation – work is underway to find ‘quick wins’, in terms of staff and team consolidations. Human Resources & Organisational Development Consolidated Organisational Development and Human Resources activity under one management business model with business partnering arrangements for each Service Systems Mapping exercise undertaken, leading to the following service improvements – Chatbot (Erica)– rollout of webchat function developed to provide managers and employees with a live chat function to assist in finding policies/procedures, guidance and template letters and forms etc both via the external website and EDMS managers’ site. DASH – Internal staff portal for case creation and management. Phase 1 and Phase 2 are complete, with Phase likely to be rolled out in September. The use of DASH will realise efficiency savings, which are being monitored. Recruitment Processes – processes are being reviewed, with the aim of making the process more effective and efficient for both managers and the recruitment team. Resourcelink- a procurement exercise for the HR & Payroll System (Resourcelink) is required in 24/25 and a scoping and evaluation exercise will be undertaken. Other Page 121 of 136
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Project Overview Benefits/Achievements processes and efficiencies in payroll and systems will be considered as part of this exercise. Teacher Supply System - developed in conjunction with IT and live from 17 April 2023 – this arrangement has capability to be used for other types of temporary resourcing i.e. for social care and/or Environmental Consumer Services. Community Engagement Activity is integrated at a locality level. Streamlining of local decision making, local community action plans and community grant schemes This Review is examining how we engage with communities: to inform and improve the services we deliver and to widen community participation in local democracy. The information-gathering and analysis stage was completed in early 2023 and the Review is now focused on three workstreams: the future shape of local democratic forums; the future delivery model for community engagement within the Council including partnership links; and business efficiency measures. The Review will report to Council in February 2024. Property Consolidation of all property related activity into a single service in a corporate landlord model, (includes property development programmes, including housing new builds and improvements and facilities management) Early work and improvement actions carried out so far include: • Shadow consolidation arrangements in place involving ECS, Housing and Property staff allowing consolidated approach and sharing of resources. • Developing a consolidated action plan • Arrangements for Property Helpdesk has been agreed. • Procurement centralised / shared with Property Services QS team– consistency, planned, efficiency. Linking with “Strategic Procurement & Commissioning” workstream to maximise value. • Contract review across Tayside with Test of Change. • Head of Establishment compliance improvements. • Improved Property Asset planning with shadow arrangements in place. Strategic Commissioning and Procurement Work is ongoing to develop a cohesive commissioning strategy aligned to priorities, supported by an effective procurement function to ensure spend is directed to where it is most needed Early work and improvement actions carried out so far include: • Repurposed Corporate Procurement Group to; - have a more whole system strategic focus. - support transformation programme and the development of the new strategy - facilitate better internal collaboration and identify opportunities for savings, efficiencies and innovation in the interim. Page 122 of 136
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Project Overview Benefits/Achievements - review existing contracts and support more effective contract management. • Review/revise contract rules – pilot increased threshold from £50k to £250k for works contracts to reduce workload and encourage more local SMEs. • Review and reduce suppliers on PECOS and remove all sundry suppliers – all sundry suppliers have been removed from PECOS. • Pilot product switch with janitorial supplies in schools to demonstrate potential savings – resulting in cost reduction based on February 2023 prices of £88k (42%) • Working with Scotland Excel on pilot for trades products. Page 123 of 136
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Appendix 3 Overview of Phase 2 Projects Project Overview Progress Transforming Services for Children and Young People with Complex Additional Support Needs To transform the experience children and young people with additional support needs and their families have when accessing education and learning so that they thrive, maximising their knowledge and skills and confidence to increase independent living, contribute to society and lead a fulfilling adult life. A key challenge is to address failure demand and continuing to lower/stem increases in external placement spend. • Reviewed Nurture classes to form Outreach Team, launched Aug 2022 • Allocated additional teachers to target additional support needs • Introduced new support staff roles - Family Learning Practitioners, Community Learning Assistants, Pupil Care and Welfare Officers • Reduced independent school placements = £300k redirected to earlier intervention • Re-organisation of Inclusion management The Transformation Board approved funding for a Project Manager to take this forward. Whole Family Wellbeing Families should be able to access the help they need, where and when they need it, for as long as it is needed. Holistic family support will address the needs of children and adults in a family at the time of need rather than at crisis point. • Initially focus on priority groups from SG Child Poverty Delivery Plan, then widened out to universal provision. Services must be able to demonstrate transformation and be self-sustaining by 2026 • Identification and evaluation of current support provision • Consultation with key stakeholders regarding current good practice and identification of gaps in provision • Collaboration with stakeholders and third-sector partners to co-design and develop evidence based family support options. • Development of the infrastructure to deliver transformation and evaluation of the impact of provision. • Commissioning of services to meet needs (including tests of change and workforce/leadership development) • Consolidation of aligned workstreams providing a range of support to families (including SEF, PEF, MH&W, ADP etc) ALEOs To review the Council’s arms-length delivery models for culture and leisure and recommend any structural/wider changes required to maximise Council investment in culture and sport services. Political and ALEO engagement on options for future delivery is ongoing. The Transformation Board has approved funding for financial analysis from Glasgow Audit at an estimated cost £10k. Page 124 of 136
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Project Overview Progress Transport This project will consider how subsidised local bus services might be configured to be more efficient, effective, economic, resilience and tackle poverty and the climate emergency. This project will include a review of how available funding is spent, routes and the potential to further employ responsive transport to meet need and community provided transport including the use of Council vehicles, as well as how financial support could be offered to people to enable the use of public transport including collaboration with businesses in our area. This project is at Project Initiation stage. A Project plan, Risk and Issue logs and communication plans are currently being developed. Locality Working Building stronger relationships with our communities and developing new ways of working to deliver services in a more joined-up flexible way by being responsive to needs of different localities Different approaches are currently being tested out within localities. Letham – Building on findings from Love Letham and listening to the wider community groups. Workshop being arranged to develop our response to the findings and how we can take an integrated approach. Highland – Initial work has been to make internal connections. Improvement Services working with the Steering Group and have developed workstreams and project plan to move forward. This will also look to engage with local communities. Coupar Angus – Following the completion of the Coupar Angus Action Plan a multi-disciplinary team approach is being adopted to implement the plan. This is in the initial stages. Crieff – Local community assets mapped, and data reviewed to identity key inequality issues. The existing Crieff Community Action Plan to be considered before initiating actions in order to avoid duplication and identify potential gaps. Overall Project Plan is currently being developed. Page 125 of 136
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Appendix 1 Overall Programme Status 7 Page 127 of 136
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Appendix 2 Overview of Phase 1 Consolidation Projects Project Overview Benefits/Achievements Customer Services Consolidation of the many dispersed customer service functions including workforce, customer service centres and systems Consolidation of dispersed contact centres into 2 Customer Solutions Hubs (Money and Customer Services), from previous 11 separate contact centres, to enable a standardised, simplified approach across the Council. This will result in easier access for customers, getting them to the right place first time. There is also a potential reduction in telephone menus and licences required for contact centre technology. The “Money” Hub will specialise in handling customer needs in relation to Council Tax bills, payments, benefits and grants. This aligns strongly with the Council’s priority to tackle poverty and support our most vulnerable citizens. The second “Customer Services” Hub will deal with all other types of enquiries. This aligns well with infrastructure, property and environmental matters. The new model will focus on customer demand; adoption of new ways of working and emerging digital technologies. This includes ‘One Front Door’ which will simplify the customer journey, remove duplication of effort, improve performance reporting and forecasting of demand and decrease training overheads. The Council concession application process will be streamlined to ensure customers receive money/benefits as early as possible. Also, by focusing on digital by default, customers will receive a more efficient and convenient service, whilst costs are reduced. Press and Communication A centrally managed communications, design and marketing provision working to a single workplan incorporating consistent service level Bringing together resources from across the organisation into a consolidated team has enabled additional support to various projects. For example:- • Due to a transfer of resource, additional capacity has been introduced in relation to video skills, including filming and editing. 7 Page 129 of 136
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Project Overview Benefits/Achievements agreements for each service • Housing/tenant communication lead now managed as part of corporate team. This has resulted in reduced duplication of effort and ensured that content produced is more effectively shared across relevant channels. • Following a review of the marketing and content creation contract for Perth City and Towns (our consumer-facing visitor and events channels), the management of the Facebook and Instagram channels for Perth City and Towns have been brought into the corporate Communications Team at no additional cost, allowing co-ordinated oversight of content and meaning that the funding available for the external contract can now get a better return on investment by focussing on creating new content and marketing campaigns. Finance A consolidated model which brings together corporate and service teams under one management business model with service business partnering arrangements. The legislative and business requirements for integrated finance functions serving the Integrated Joint Board were acknowledged Finance Project Board (Shadow Board) established to act as an interim management team during the transition to an integrated Finance function. All resource issues across teams are now managed through the Board. Significant upgrade to the Council’s Financial system, Integra, was successfully undertaken, with no disruption to service through the migration to Integra Centros. Operational improvements have been identified which are currently being implemented, however the move to Integra Centros also creates a platform for significant improvements in the automation of transactional activity and reporting. A baseline assessment of activity is being undertaken, supported through engagement with the finance teams and stakeholders, to identify opportunities for efficiencies and the streamlining and improvement of current processes. Professional & Business Support Consolidated Professional and Business Support Services under one management model, with staff operating in a business partner model for each Service A single consistent and streamlined approach across the Council for each of the functions within the remit of professional and business support consolidation workstream. This supports the removal of silo working, improves and standardises processes, delivers efficiencies/savings and brings a Team PKC approach to the areas in scope The approved model sets out the two aspects of business support provision being: Page 130 of 136
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Project Overview Benefits/Achievements ➢ Centrally Designed & Centrally Managed Business Support ➢ Centrally Designed, Locally Delivered Business Support Improvements also being made around:- ➢ Committee report writing/political awareness training sessions – Right First Time approach. ➢ New system for handling information requests (Freedom of Information / Subject Access Requests ARS) is being rolled out, resulting in a reduced staffing resource being required. ➢ Consolidated Teams and working practices for Business Support. ➢ A series of “quick wins” being considered for implementation. Strategic Planning and Performance A strategic planning, performance, and risk function under one business management model that will support continuous improvement evidence-based decision making and delivery on our priorities Systems Mapping – systems mapping exercise carried out, with the aim being to streamline, consolidate and review the various performance management systems currently in use. This will generate efficiencies and potentially savings in terms of system costs. Consolidation – work is underway to find ‘quick wins’, in terms of staff and team consolidations. Human Resources & Organisational Development Consolidated Organisational Development and Human Resources activity under one management business model with business partnering arrangements for each Service Systems Mapping exercise undertaken, leading to the following service improvements – Chatbot (Erica)– rollout of webchat function developed to provide managers and employees with a live chat function to assist in finding policies/procedures, guidance and template letters and forms etc both via the external website and EDMS managers’ site. Page 131 of 136
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Project Overview Benefits/Achievements DASH – Internal staff portal for case creation and management. Phase 1 and Phase 2 are complete, with Phase likely to be rolled out in September. The use of DASH will realise efficiency savings, which are being monitored. Recruitment Processes – processes are being reviewed, with the aim of making the process more effective and efficient for both managers and the recruitment team. Resourcelink- a procurement exercise for the HR & Payroll System (Resourcelink) is required in 24/25 and a scoping and evaluation exercise will be undertaken. Other processes and efficiencies in payroll and systems will be considered as part of this exercise. Teacher Supply System - developed in conjunction with IT and live from 17 April 2023 – this arrangement has capability to be used for other types of temporary resourcing i.e. for social care and/or Environmental Consumer Services. Community Engagement Activity is integrated at a locality level. Streamlining of local decision making, local community action plans and community grant schemes This Review is examining how we engage with communities: to inform and improve the services we deliver and to widen community participation in local democracy. The information-gathering and analysis stage was completed in early 2023 and the Review is now focused on three workstreams: the future shape of local democratic forums; the future delivery model for community engagement within the Council including partnership links; and business efficiency measures. The Review will report to Council in February 2024. Property Consolidation of all property related activity into a single service in a corporate landlord model, (includes property development programmes, including housing new builds and improvements and facilities management) Early work and improvement actions carried out so far include: • Shadow consolidation arrangements in place involving ECS, Housing and Property staff allowing consolidated approach and sharing of resources. • Developing a consolidated action plan • Arrangements for Property Helpdesk has been agreed. • Procurement centralised / shared with Property Services QS team– consistency, planned, efficiency. Linking with “Strategic Procurement & Commissioning” workstream to maximise value. Page 132 of 136
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Project Overview Benefits/Achievements • Contract review across Tayside with Test of Change. • Head of Establishment compliance improvements. • Improved Property Asset planning with shadow arrangements in place. Strategic Commissioning and Procurement Work is ongoing to develop a cohesive commissioning strategy aligned to priorities, supported by an effective procurement function to ensure spend is directed to where it is most needed Early work and improvement actions carried out so far include: • Repurposed Corporate Procurement Group to; - have a more whole system strategic focus. - support transformation programme and the development of the new strategy - facilitate better internal collaboration and identify opportunities for savings, efficiencies and innovation in the interim. - review existing contracts and support more effective contract management. • Review/revise contract rules – pilot increased threshold from £50k to £250k for works contracts to reduce workload and encourage more local SMEs. • Review and reduce suppliers on PECOS and remove all sundry suppliers – all sundry suppliers have been removed from PECOS. • Pilot product switch with janitorial supplies in schools to demonstrate potential savings – resulting in cost reduction based on February 2023 prices of £88k (42%) • Working with Scotland Excel on pilot for trades products. Page 133 of 136
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Appendix 3 Overview of Phase 2 Projects Project Overview Progress Transforming Services for Children and Young People with Complex Additional Support Needs To transform the experience children and young people with additional support needs and their families have when accessing education and learning so that they thrive, maximising their knowledge and skills and confidence to increase independent living, contribute to society and lead a fulfilling adult life. A key challenge is to address failure demand and continuing to lower/stem increases in external placement spend. • Reviewed Nurture classes to form Outreach Team, launched Aug 2022 • Allocated additional teachers to target additional support needs • Introduced new support staff roles - Family Learning Practitioners, Community Learning Assistants, Pupil Care and Welfare Officers • Reduced independent school placements = £300k redirected to earlier intervention • Re-organisation of Inclusion management The Transformation Board approved funding for a Project Manager to take this forward. Whole Family Wellbeing Families should be able to access the help they need, where and when they need it, for as long as it is needed. Holistic family support will address the needs of children and adults in a family at the time of need rather than at crisis point. • Initially focus on priority groups from SG Child Poverty Delivery Plan, then widened out to universal provision. Services must be able to demonstrate transformation and be self-sustaining by 2026 • Identification and evaluation of current support provision • Consultation with key stakeholders regarding current good practice and identification of gaps in provision • Collaboration with stakeholders and third-sector partners to co-design and develop evidence based family support options. • Development of the infrastructure to deliver transformation and evaluation of the impact of provision. • Commissioning of services to meet needs (including tests of change and workforce/leadership development) • Consolidation of aligned workstreams providing a range of support to families (including SEF, PEF, MH&W, ADP etc) ALEOs To review the Council’s arms-length delivery models for culture and leisure and recommend any structural/wider changes required to maximise Council investment in culture and sport services. Political and ALEO engagement on options for future delivery is ongoing. The Transformation Board has approved funding for financial analysis from Glasgow Audit at an estimated cost £10k. 7 Page 135 of 136
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Project Overview Progress Transport This project will consider how subsidised local bus services might be configured to be more efficient, effective, economic, resilience and tackle poverty and the climate emergency. This project will include a review of how available funding is spent, routes and the potential to further employ responsive transport to meet need and community provided transport including the use of Council vehicles, as well as how financial support could be offered to people to enable the use of public transport including collaboration with businesses in our area. This project is at Project Initiation stage. A Project plan, Risk and Issue logs and communication plans are currently being developed. Locality Working Building stronger relationships with our communities and developing new ways of working to deliver services in a more joined-up flexible way by being responsive to needs of different localities Different approaches are currently being tested out within localities. Letham – Building on findings from Love Letham and listening to the wider community groups. Workshop being arranged to develop our response to the findings and how we can take an integrated approach. Highland – Initial work has been to make internal connections. Improvement Services working with the Steering Group and have developed workstreams and project plan to move forward. This will also look to engage with local communities. Coupar Angus – Following the completion of the Coupar Angus Action Plan a multi-disciplinary team approach is being adopted to implement the plan. This is in the initial stages. Crieff – Local community assets mapped, and data reviewed to identity key inequality issues. The existing Crieff Community Action Plan to be considered before initiating actions in order to avoid duplication and identify potential gaps. Overall Project Plan is currently being developed. Page 136 of 136