Agenda Document Pack - Perth and Kinross Council - 29/04/2026
Perth and Kinross Council · 29 April 2026
Back to Perth and Kinross Council — 29 April 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Ambition | Compassion | Integrity Our vision is for a Perth and Kinross where everyone can live life well, free from poverty and inequality Council Building 2 High Street Perth PH1 5PH 22/04/2026 A hybrid meeting of Perth and Kinross Council will be held in the Council Chamber on Wednesday, 29 April 2026 at 10:00. If you have any queries please contact Democratic 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: Provost X McDade Depute Provost A Parrott All Bailies All Councillors Page 1 of 138
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Perth and Kinross Council Wednesday, 29 April 2026 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 2 DECLARATIONS OF INTEREST 3 MINUTES 3(i) MINUTE OF MEETING OF PERTH AND KINROSS COUNCIL OF 25 FEBRUARY 2025 FOR APPROVAL (copy herewith) 5 - 12 3(ii) MINUTE OF SPECIAL MEETING OF PERTH AND KINROSS COUNCIL OF 4 MARCH 2026 FOR APPROVAL (copy herewith) 13 - 66 4 OUTSTANDING BUSINESS STATEMENT (copy herewith 26/114) 67 - 70 5 LDP3 DEVELOPMENT PLAN SCHEME Report by Strategic Lead - Economy, Development and Planning (copy herewith 26/115) 71 - 92 6 MID-MARKET RENT PROPOSAL Joint Report by Strategic Lead - Housing and Communities and Strategic Lead - Economy, Development and Planning (copy herewith 26/116) 93 - 138 7 PROPOSAL TO GRANT FREEDOM OF PERTH TO CITIZENS OF ASCHAFFENBURG, GERMANY Council is asked to endorse the decision of the Civic Affairs Sub- Committee of 20 April 2026 to grant the Freedom of the City of Perth to the Citizens of Aschaffenburg as set out in the following report. Freedom of the City of Perth to the Citizens of Aschaffenburg 8 ELECTED MEMBERS BRIEFING NOTES Council is asked to note the following Elected Members Briefing Notes that have been issued to elected Members since the previous Council meeting: Page 3 of 138
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19 February Budget survey results (advance copy - results will be published with budget papers) 20 February External funding update 20 February Protests over accommodation for people seeking asylum 20 February Fuel spill at River Dochart 21 February Update on diesel spill into Loch Tay, Saturday 21 February 2026 22 February Update on diesel spill into Loch Tay, Sunday 22 February 2026 25 February Climate Change Annual Report Year 4 3 March Employee Engagement Survey 2025 9 March Community Minibus Transfer 9 March Proposed EIS industrial action 10 March Test of Change - North Perthshire Crisis Support Service 13 March Proposed EIS industrial action called off 20 March Bell's Sport Centre update 20 March Grow Wild 20 March Street Weeds 31 March Commercial bus journeys 3 April HSCP briefing on private operator 8 April Make Room UNESCO Initiative 10 April April protest over accommodation for people seeking asylum 14 April Social Work and Social Care Absence analysis 14 April Braco Planning Applications Page 4 of 138
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Perth and Kinross Council Minute of hybrid meeting of Perth and Kinross Council held in the Council Chamber, 2 High Street, Perth on Wednesday 25 February 2026 at 10.15am. Present: Provost X McDade, Depute Provost A Parrott, Bailies C Ahern, A Bailey (up to Item 8), R Brock, C McLaren and M Williamson (up to Item 7); Councillors K Allan, H Anderson, L Barrett, P Barrett, B Brawn, S Carr, A Chan, D Cuthbert, S Donaldson, E Drysdale, J Duff, A Forbes, M Frampton, N Freshwater, K Harvey, D Illingworth, I James, N Khogali, G Laing, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, W Robertson, C Shiers, F Smith, C Stewart, G Stewart, A Watt, R Watters and J Welch. In Attendance: T Glen, Chief Executive; C Mailer, Depute Chief Executive; L Simpson, Strategic Lead - Legal and Governance; F Crofts, Strategic Lead – Environment and Infrastructure; S Merone, Strategic Lead – Economy, Development and Planning; E Ritchie, Strategic Lead – Housing and Communities; S Walker, Strategic Lead – Finance and Business Support; C Guild, Strategic Lead – Projects and Programmes; J Beveridge, Strategic Lead – Property Services; P Leonard, D Grant, G Key (all Environment and Infrastructure); S MacDonald (Economy, Development and Planning); P Johnstone (Strategic Planning, People and Performance); J Jennings (Finance and Business Support); S Hendry, A Brown and M Pasternak (all Legal and Governance). Provost X McDade, Presiding Provost led on Items 1-6 and 8-13, and Depute Provost led on Item 7. 1. Welcome and Apologies Provost McDade welcomed all those present to the meeting. It was agreed to re-order the business on the agenda and consider Item 6 prior to Item 4. The Provost noted that the previous day marked four years since the beginning of the war in Ukraine. The Provostreflected on the ongoing local support in Perth and Kinross for Ukraine, including twinning with Nikopol and the significant humanitarian aid sent from Tayside. The Provost reaffirmed the Council’s continued support for Ukrainian residents and the wider humanitarian effort. 2. Declarations of Interest In terms of the Councillors’ Code of Conduct, Councillor K Harvey declared a non-financial interest in Item 5(ii). 3. Minute of Meeting of Perth and Kinross Council of 14 January 2026 for Approval 3(i) Page 5 of 138
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The minute of the meeting of Perth and Kinross Council of 14 January 2026 was submitted and approved as a correct record. 4. Climate Change Annual Report – Year 4 There was submitted a report by Strategic Lead – Environment and Infrastructure (26/49) (1) providing an update on Perth and Kinross Council’s (PKC) progress delivering its Climate Change Strategy and Action Plan and delivering statutory responsibilities, (2) reviewing overall performance and progress and then exploring the progress in each of the eight themes identified in the plan, (3) proposing an annual update to the action plan for Year 5 (4) identifying the associated resources required to deliver them, (5) highlighting the good progress made and wide range of outcomes achieved, and also (6) highlighting the main delivery challenges the Council has, which are increased by the changing severity and frequency of climate impacts facing the Perth and Kinross Council area. Resolved: (i) The progress achieved be noted and the proposed amendments to the Climate Change Action Plan and KPI framework be approved; (ii) Amendments to Perth & Kinross Climate Risk and Opportunity Register be noted and approved; (iii) Elected Members and officers be requested to continue to raise the resource and delivery challenges associated with addressing the climate and biodiversity emergency with COSLA, the Scottish and UK Governments, and other relevant bodies whenever appropriate. (iv) It be noted that the resources required to take forward priority actions would be considered in the annual Revenue and Capital Budget setting processes. (There followed a short recess and the meeting reconvened at 12.08pm). It was agreed at this point to re-order the business on the agenda and consider Item 9 following Item 8. 5. Notice of Motion 5(i) Motion Regarding Visitor Levy – February 2026 Motion by Councillor A Forbes and J Duff Council recognises that, by the date of Full Council meeting on 29th April 2026, the Scottish Parliament is expected to have passed the final piece of legislation regarding the Visitor Levy. In practice, we already know what this will look like, as all political parties have already indicated their agreement. Page 6 of 138
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This is the final stage of the process and, taking into account the extensive consultation carried out by PKC over the last few months will allow Council, to make a decision on whether or not we implement a Visitor Levy. Council instructs officers to bring to Full Council meeting on 29 April 2026: The Outcome of the consultation process; The general principles of a Visitor Levy Scheme and an economic impact assessment based on the information available at the time; Any proposals and recommendations required to allow Council to make a decision. Amendment by Councillors E Drysdale and I Massie In order to ensure all elected members are in possession of all relevant facts to enable them to reach a decision on this matter which is of huge importance to Perth and Kinross and to this Council, that officers bring forward as detailed as possible an elected member briefing during April, and then a full paper to Council at its meeting in June. In terms of Standing Order 21, a roll call vote was taken 17 Members voted for the Motion as follows: Provost X McDade, Bailies C Ahern and R Brock, Councillors K Allan, H Anderson, B Brawn, A Chan, D Cuthbert, J Duff, A Forbes, N Freshwater, D Illingworth, I James, N Khogali, C Shiers, F Smith andC Stewart. 23 Members voted for the Amendment as follows: Depute Provost A Parrott, Bailies A Bailey, C McLaren and M Williamson, Councillors L Barrett, P Barrett, S Carr, S Donaldson, E Drysdale, M Frampton, K Harvey, G Laing, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, W Robertson, G Stewart, A Watt, R Watters and J Welch. Resolved: In accordance with the Amendment. (Councillor K Harvey left the meeting at this point) 5(ii) Motion on 1-5 High Street Page 7 of 138
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Prior to consideration of the Motion, the Provost confirmed in terms of Standing Order 23.2 that it was opinion that a material change of circumstances had occurred to such an extent that it was appropriate for the matter to be reconsidered within the six-month period since the previous decision of 10 December 2025. Motion by Councillors C Stewart and D Cuthbert That Council: notes the prior decisions taken in relation to the disposal of 1-5 High Street in summer 2020, April 2022, and December 2025; believes that since the Council decision in December 2025 on Report 25/355, additional information – including around running costs and other interest expressed - has been provided to elected members which may have changed their view and thus the decision; resolves to pause any current work on the Lock Terrace Ltd. proposal, and instead to undertake a new marketing exercise for 1-5 High Street to establish the full market potential of the building for any use, such marketing exercise to be for a period of no less than 12 weeks; and to instruct officers to bring back the results of such a marketing exercise to a full Council meeting by no later than September 2026. Amendment by Councillors E Drysdale and J Duff To reject the terms of the Motion and to proceed with the decision of Council of 10 December 2025. In terms of Standing Order 21, a roll call vote was taken 14 Members voted for the Motion as follows: Provost X McDade, Bailies C Ahern, A Bailey and R Brock, Councillors K Allan, H Anderson, A Chan, D Cuthbert, N Freshwater, N Khogali, G Laing, W Robertson, F Smith andC Stewart. 25 Members voted for the Amendment as follows: Depute Provost A Parrott, Bailies C McLaren and M Williamson, Councillors L Barrett, P Barrett, B Brawn, S Carr, S Donaldson, E Drysdale, J Duff, A Forbes, M Frampton, D Illingworth, I James, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, C Shiers, G Stewart, A Watt, R Watters and J Welch. Resolved: In accordance with the Amendment. Page 8 of 138
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6. Outstanding Business Statement The Outstanding Business Statement was noted, and it was agreed to remove the completed actions. There followed a recess and the meeting reconvened at 3.15pm COUNCILLOR HARVEY RETURNED TO THE MEETING AND BAILIE WILLIAMSON LEFT THE MEETING AT THIS POINT. 7. Update on Perth and Kinross Projects Under Tay Cities Region Deal Programme - Update on Local Growth Fund and Regional Economic Partnership Arrangements There was submitted a report by Strategic Lead – Economy, Development and Planning (26/51) (1) giving an update on the process of Reshaping the Tay Cities Deal (TCD), including the status of existing projects and possible new projects, and also (2) seeking to position Perth and Kinross Council in relation to forthcoming regional investment decisions associated with the Local Growth Fund, announced by the UK Government in January 2026 and evolving Regional Economic Partnership arrangements. Resolved: (i) The contents of the report, including the scale of funding opportunities from Tay Cities Deal Programme Strand 2 and Local Growth Fund, be noted; (ii) It be agreed that Council priorities are clearly articulated and promoted through the Tay Cities Regional Economic Partnership in relation to Strand 2 projects, taking into account Tay Cities Deal and Local Growth Fund criteria; (iii) It be agreed that the Leader of the Council and the Chief Executive engage with Tay Cities partners and other local authorities to understand and assess the implications of emerging Scottish and UK Government approaches to Regional Economic Partnerships for local authorities, the Tay Cities Regional Economic Partnership and Perth and Kinross Council; (iv) It be agreed that the Strategic Lead – Economy, Development and Planning provide a further update on projects at a future meeting. 8. Holiday Proposal for World Cup There was submitted a report by Strategic Lead – Strategic Planning, People and Performance (26/52) seeking to establish if the Council wished to support the Bank Holiday on Monday 15 June 2026 to mark Scotland’s participation in the men's football World Cup finals. If supported it was proposed that this be as an additional day’s annual leave for all employees, recognising the operational impact and any Page 9 of 138
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issues around the different Terms and Conditions for Teachers and other staff groups. Motion by Councillors G Laing and C Stewart Not to accept the proposal to grant 15 June 2026 as bank holiday. Amendment by Councillors J Duff and C Shiers This Council congratulates the Scottish national Men's football team on qualifying for the 2026 World Cup, the first time since 1998, and notes that this is a cause for celebration. However, given the serious monetary challenges facing this Council, it is not in the financial position to declare Monday 15 June 2026 a public holiday for Council employees. Alternatively, the Council seeks the opportunity to encourage our communities to come together to mark this occasion and agrees to allocate £26,000 from the Communities Fund earmarked reserve to provide grants to community groups for appropriate events connected with celebrating Scotland’s participation in the World Cup. Council would particularly welcome applications from groups who promote "Football for All" and encourage participation and inclusion especially in relation to grassroots football, the participation of women and girls, walking football and para-football. Council also recognises the great work done to promote football and sport more generally across Perth and Kinross and seeks to use the World Cup not only as an occasion to celebrate and support the Scottish football team but also as an opportunity to acknowledge and promote volunteering and participation in football and sports groups across Perth and Kinross. The Mover and Seconder of the Motion agreed to incorporate the Amendment into the Motion. Resolved: This Council congratulates the Scottish national Men's football team on qualifying for the 2026 World Cup, the first time since 1998, and notes that this is a cause for celebration. However, given the serious monetary challenges facing this Council, it is not in the financial position to declare Monday 15 June 2026 a public holiday for Council employees. Alternatively, the Council seeks the opportunity to encourage our communities to come together to mark this occasion and agrees to allocate £26,000 from the Communities Fund earmarked reserve to provide grants to community groups for appropriate events connected with celebrating Scotland’s participation in the World Cup. Council would particularly welcome applications from groups who promote "Football for All" and encourage participation and inclusion especially in relation to grassroots football, the participation of women and girls, walking football and para-football. Page 10 of 138
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Council also recognises the great work done to promote football and sport more generally across Perth and Kinross and seeks to use the World Cup not only as an occasion to celebrate and support the Scottish football team but also as an opportunity to acknowledge and promote volunteering and participation in football and sports groups across Perth and Kinross. BAILIE BAILEY LEFT THE MEETING AT THIS POINT 9. ALEO’s Review (Strategic Alliance Terms of Reference) There was submitted a report by Chief Executive (26/50) seeking Council approval of the Strategic Alliance Terms of Reference which has been developed in response to an action requested at full Council on 29 October 2025 (Report 25/279 refers). Resolved: (i) The Strategic Alliance Terms of Reference as set out in Appendix 1, to enable the implementation of the Strategic Alliance model, be agreed; (ii) It be agreed that the Terms of Reference be adopted by all participating parties and form the basis of collaborative joint working from 1 April 2026; (iii) It be noted that the Terms of Reference document will be reviewed every three years or earlier if required in line with the provisions to be set out within the Memorandum of Understanding document and that annual progress reports will come to full Council in October each year. 10. Treasury and Investment Strategy and Prudential Indicators 2026/27 – 2031/32 There was submitted a report by Chief Finance Officer (26/53) detailing the Council’s proposed Treasury Strategy for 2026/27 to 2031/32, the Investment and Property Strategy for 2026/27 and Prudential Indicators for 2026/27 to 2031/32. Resolved: (i) The contents of the report be noted; (ii) The six-year Treasury Strategy for 2026/27 to 2031/32, as detailed in the report, which is submitted in accordance with the Council’s approved Treasury Management Practices (TMP), be approved; (iii) The Permitted Investments and Investment Strategy for 2026/27, outlined at Section 7 and detailed at Appendix III of the report, be approved; (iv) The Property Investment Strategy for 2026/27, outlined at Section 8 and detailed at Appendix IV of the report, be approved; (v) The proposed Prudential Indicators for 2026/27 to 2031/32, including increasing the Council’s Authorised Limit for Borrowing from £1.3 billion to Page 11 of 138
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£1.355 billion, as outlined at Section 11 and detailed at Appendix V of the report, be approved. 11. Update to Scheme of Administration Resolved: The change to the Scheme of Administration as set out on the agenda be agreed. 12. Appointments to Committees / Outside Bodies / Partnerships and Working Groups Resolved: 1. Councillor Eric Drysdale be replaced by Councillor G Laing on the Economy and Infrastructure Committee. 2. Councillor Grant Laing be appointed Convener of the Economy and Infrastructure Committee. 13. Elected Members Briefing Notes The Elected Members Briefing Notes, issued since the previous Council meeting and as set out on the agenda, be noted. Page 12 of 138
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SPECIAL MEETING OF PERTH AND KINROSS COUNCIL Minute of special hybrid meeting of Perth and Kinross Council held in the Council Chamber, 2 High Street, Perth on Wednesday 4 March 2026 at 10.00am. Present: Provost X McDade, Depute Provost A Parrott, Bailies C Ahern, A Bailey, R Brock, C McLaren and M Williamson; Councillors K Allan, H Anderson, L Barrett, P Barrett, B Brawn, S Carr, A Chan, D Cuthbert, S Donaldson, E Drysdale, J Duff, A Forbes, M Frampton, N Freshwater, K Harvey, D Illingworth, I James, N Khogali, G Laing, I MacPherson, I Massie, C Mair, S McCole, T McEwan, J Rebbeck, W Robertson, C Shiers, F Smith, C Stewart, G Stewart, A Watt, R Watters and J Welch. In Attendance: T Glen, Chief Executive; C Mailer, Depute Chief Executive; L Simpson, Strategic Lead - Legal and Governance; S Walker, Strategic Lead – Finance and Business Support; J Pepper, Director/Chief Officer, Perth and Kinross Health & Social Care Partnership, J Beveridge, Strategic Lead – Property Services; S Merone, Strategic Lead – Economy, Development and Planning; E Ritchie, Strategic Lead – Housing and Communities; G Boland, Strategic Lead – Strategic Planning, People and Performance; C Guild, Strategic Lead – Projects and Programmes; A Taylor, Strategic Lead – Customer and Digital Services; L Brady, A O’Brien, C Palmer, J Jennings, J Sailsbury, G Walker (all Finance and Business Support), S Hendry, K Molley, A Brown, E Ferguson and M Pasternak (all Legal and Governance). Provost X McDade, Presiding. 1. Welcome And Apologies Provost McDade welcomed all those present to the meeting. No apologies were submitted. 2. Declarations Of Interest There were no Declarations of Interests in terms of the Councillors’ Code of Conduct. 3. Strategic Planning Update 2026/27 to 2028/29 and General Fund Revenue Budget There was submitted a report by Strategic Lead – Finance and Business Support (26/54) (1) providing an update on the delivery of the ongoing strategic transformation and change programme and alignment with the Medium-Term Financial Plan approved by Council on 10 December 2025, (2) focusing on delivering the Council’s vision of tackling poverty and inequality in areas of greatest need and the protection, within available resources, of services which deliver for individuals, families and communities across Perth and Kinross, and also (3) presenting the Provisional Revenue Budgets for 2026/27, 2027/28 and 2028/29 which seeks to allow the Council to continue its commitment to achieving its vision and corporate priorities. 3(ii) Page 13 of 138
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Motion (Councillors E Drysdale and I Massie) Council agrees: 1. To approve the 2026/27 Provisional Revenue Budget of £527.619 million as set out in Appendix B of Report No. 26/54. 2. To approve the 2027/28 Provisional Revenue Budget of £537.371 million as set out in Appendix B of Report No. 26/54. 3. To approve the 2028/29 Provisional Revenue Budget of £554.345 million as set out in Appendix B of Report No. 26/54. 4. To approve the expenditure pressures as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (i). 5. To approve the budget reductions / additional income as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (ii). 6. To approve the additional budget reductions / additional income as set out in Appendix (iii) of this Revenue Budget Motion. 7. To approve the additional expenditure proposals as set out in Appendix (iv) of this Revenue Budget Motion. 8. To approve an additional contribution from Reserves of £3.144 million in 2026/27 in this Revenue Budget Motion. 9. To approve an additional contribution from Reserves of £571,000 in 2027/28 in this Revenue Budget Motion. 10. To approve an additional contribution to Reserves of £2.436 million in 2028/29 in this Revenue Budget Motion. 11. To approve the Council Tax bases of 76,060 for 2026/27, 76,750 for 2027/28 and 77,606 for 2028/29. 12. To approve the contribution to Perth and Kinross Integration Joint Board of £120.956 million which is included in the 2026/27 Provisional Revenue Budget with a further £1 million earmarked in Reserves. 13. To approve the earmarked general fund balances set out in Appendix G with the exception of the adjustments listed in Appendices (v), (vi) and (vii). 14. To approve that uncommitted Reserves are maintained at a minimum of 2% to 4% of the 2026/27 Provisional Revenue Budget which equates to £10.552 million to £21.104 million. 15. To approve a provision for the non-collection of Council Tax of 1.75% in 2026/27, 2027/28 and 2028/29. 16. To approve the 2026/27 Final Revenue Budget of £532.647 million resulting in a Band D Council Tax of £1,673.84 as summarised in Appendix (v) of this Revenue Budget Motion. This represents a 8.9% increase from the Council Tax Band D figure for 2025/26. 17. To approve the 2027/28 Provisional Revenue Budget of £535.904 million resulting in an indicative Band D Council Tax of £1,757.53 as summarised in Appendix (vi) of this Revenue Budget Motion. This represents an indicative 5.0% increase from the Council Tax Band D figure for 2026/27. 18. To approve the 2028/29 Provisional Revenue Budget of £539.693 million resulting in an indicative Band D Council Tax of £1,845.41 as summarised in Appendix (vii) of this Revenue Budget Motion. This represents an indicative 5.0% increase from the Council Tax Band D figure for 2027/28. Page 14 of 138
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APPENDIX (i) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY Reference Report No. 26/54 Page No. 26/27 27/28 28/29 EXPENDITURE PRESSURES REJECTED £'000 £'000 £'000 TOTAL EXPENDITURE PRESSURES REJECTED 0 0 0 Page 15 of 138
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APPENDIX (ii) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY Reference Report No. 26/54 Page No. 26/27 27/28 28/29 BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED £'000 £'000 £'000 Tackling Poverty Reduction in Employability Support 72 25 25 Funding to increase School Clothing grant increase of 3% for academic year 2026/27 72 10 Removal of Permanent funding for activities over School Holidays 73 50 Change in Delivery of Free School Meals over the holiday funding 74 25 Review of funding streams for Perth - CAB 75 206 207 Developing a resilient, stronger and greener local economy Removal of Grant Funding to Pitlochry Festival Theatre 78 220 Reduction in Economic Development Events (partial) 79 39 Reduction in Civic Budget 79 20 Reduction in Support for Business 80 74 Reduction in Support for Growbiz - SLA 81 70 Removal of Funding for Mobile Toilets 82 26 Enabling our children and young people to achieve their full potential Early Learning and Childcare Sustainable Rate to Partner Providers 83 47 20 Reduce support to Parent Councils 84 24 Reduction in Central Team supporting Early Years and Childcare. 85 25 Removal of Remaining Early Learning and Childcare (ELC) funding 86 255 145 Removal of Peripatetic Team in Primary Sector (partial) 88 407 243 Cease Delivery of Duke Of Edinburgh Award 89 45 Carer Fees 90 35 Protecting and caring for our most vulnerable people Adult Learning Partnership SLA 92 92 Working in partnership with our communities Refuse Collection - Garden Waste Permit Charge 99 65 68 Page 16 of 138
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APPENDIX (iii) APPENDIX (ii)cont. Street Cleansing - Reduction in Activity 101 170 170 Public Conveniences and Comfort Schemes 102 116 Traffic and Road Safety Reductions 102 73 73 Removal of Community Environmental Challenge Fund 104 100 Removal of Dedicated Support for Tayside Bio Diversity Partnership 105 67 Restructure of External Funding Support 107 136 Organised to Deliver / Transformation Reduction in Revenue and Benefits Management 111 72 Reduction in IT Capacity 112 61 Reduction in Finance and Business Support Capacity 113 86 86 86 TOTAL BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED 2,163 1,374 227 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY 26/27 27/28 28/29 ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS £'000 £'000 £'000 Organised to deliver Operational Buildings - Efficiency Target 45 Funding Vary the long term empty properties policy to generate additional income. Subject to receipt of final guidance and updating the Council policy, Increase long-term empty surcharge to 200% and leave second homes unchanged at 100%. Implementation from 1 July 2026. 700 230 TOTAL ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS 745 230 0 Page 17 of 138
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APPENDIX (iv) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY CORPORATE PLAN 2022 - 2027 26/27 27/28 28/29 ADDITIONAL EXPENDITURE PROPOSALS £'000 £'000 £'000 TACKLING POVERTY Scottish Welfare Fund / Financial Insecurity Funding The cost of living crisis continues to cause significant hardships for many. Now in 2026, with price inflation including food and clothing, higher mortgage rates/rents and increasing energy costs, more and more families are struggling to make ends meet month to month. This funding will be available to residents feeling the impact of the current cost of living. (non recurring) 300 Buttons & Bows Additional funding to support the inspirational work of this Buttons and Bows who provide a valuable service to our families (non recurring) 30 Think Yes - Tenancy Sustainment Fund This will assist non-council tenants to maintain their home and proactively help prevent the need for a household to present to the council as homeless. The pro- active efforts of the housing team will not only help avoid the need for the household to present as homeless but also reduce the demand for temporary accommodation (non-recurring) 80 Tailored Employability Support for Priority Families To provide wrap around support to families experiencing poverty and challenges to access training and jobs (non-recurring) 300 The Big Hoose The Big Hoose provides free essential household items to families with children and young people under 25 who are struggling with the cost of living. Support workers from local organisations can refer families each week when items such from nappies and toiletries to bedding, clothing and cleaning products can be supplied, this service helps families stretch their income further. (non recurring) 65 Anti Poverty Taskforce Funding to support our anti poverty measures (non recurring) 60 TACKLING CLIMATE CHANGE AND SUPPORTING SUSTAINABLE PLACES Green Living Fund Funding for community-led projects focused on tackling the climate change and biodiversity emergencies, with the purpose of enabling applicants to use these funds to lever in additional funding.(non recurring) 200 200 Grounds Maintenance Reinvestment in grounds maintenance will support a managed, phased reduction in service levels, including trials within cemeteries and enhanced ecological surveying and monitoring, ensuring changes are introduced gradually and in partnership with local communities. This funding enables the service to consolidate progress to date while expanding proactive biodiversity work. It will also strengthen community engagement, support education and communications activity, while continuing to promote good practice already underway. (recurring) 150 Page 18 of 138
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APPENDIX (iv)cont. Grounds Maintenance Enhancement Squad The establishment of a dedicated, biodiversity-focused team working alongside the Horticultural Squad at Westbank. The squad will be responsible for tree and shrub planting, ecological enhancement, wildflower and meadow management, selective vegetation clearance and a range of wider greenspace tasks. This will strengthen capacity for high-quality, nature-positive land management guided by Biodiversity Action Plans. The squad will operate in line with industry best practice and will work closely with local communities to support collaborative, sustainable stewardship of greenspaces.(non recurring) 200 200 DEVELOPING A RESILIENT, STRONGER AND GREENER LOCAL ECONOMY Rural Events Continued investment in our rural economy by supporting inaugural events across a range of initiatives such as festivals, sport and cultural activities that demonstrate a direct economic return, while showcasing Perth & Kinross businesses. Events will be held in rural locations and have to have the backing of the local community and promote social inclusion. (non recurring) 40 City Centre Improvement Taskforce The £200,000 investment will deliver rapid, visible improvements to Perth’s city centre through deep cleaning, repairs, greening and vacant-unit enhancements. This will operate as a pilot scheme. If successful the intention would be to continue it and roll out to other towns and villages. (non recurring) 200 Perth Festival of the Arts Perth Festival of the Arts is responsible for operating and running and annual arts festival in the city. The restoration of its annual allocation from the council. It will allow the PFA to continue to operate with minimal resort to reserves, look to expand the locations in Perth and further afield, as well as looking to engage a wider breadth of artists and performers going forward. (recurring) 20 Adapt Your Property To encourage the development of empty and underused buildings to bring them back into use for economic and socially productive purposes, £550,000 of borrowing capacity in 2026/27 and a further £200,000 in 2027/28 (recurring) 25 10 Tourism Hub Creation of a tourism hub within Alyth Library on a pilot basis (non recurring) 10 Mobility Hub Feasibility Studies Funding to undertake feasibility studies for new and improved Mobility Hubs across Perth & Kinross — including Broxden Park & Ride, Kinross P&R, Bridge of Earn and other strategic sites. The studies will align with the Council’s Mobility Strategy and help future-proof the area’s transport network for the next 30 years, supporting planned reviews of Park & Ride provision and wider sustainable mobility priorities. The Council will also look for match funding to finance this task. (non recurring) 50 Page 19 of 138
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APPENDIX (iv)cont. Car Parking Strategy - Multi-Stories and Long Stay Car Parks (Perth City) High tariffs and inconsistent charging are driving low occupancy and reducing potential revenue generation from our multi-storey and some of our long stay car parks. Evidence strongly suggests that lowering charges to a competitive level will increase occupancy, particularly among long-stay users. Proposal Adjust tariffs to align MSCPs with the five long-stay car park pricing (26/27 inflationary increase added): - up to 1 hour – £1.20, up to 2 hours – £1.70, up to 3 hours – £2.60, up to 4 hours – £3.20 (reduction from £6.20), up to 6 hours – £5.00, up to 10 hours – £6.40(reduction from £12.80 This brings PKC MSCPs in line with the local market and removes the deterrent effect of higher charges and creates consistency in charging. It also significantly incentivises retail staff and people who work in the City Centre to use longer stay car parks over medium or variable stay car parks which will in turn help turnover and free up spaces for those who are visiting the city to shop. Align season tickets with the revised charging structure and permit use across all PKC long-stay car parks for increased customer choice and convenience. It is assumed that this will be cost neutral and funded from the car park trading account. ENABLING OUR CHILDREN AND YOUNG PEOPLE TO ACHIEVE THEIR FULL POTENTIAL Promise Improvement Lead Ensuring the best educational outcomes for our Care Experienced young learners (non recurring) 60 36 Outdoor Learning Development of outdoor environments in schools , and partner providers, to support children with more complex additional support needs (non-recurring) 50 Rural Primary Schools Additional funding for accelerated repairs and maintenance, especially where external buildings need investment to improve the thermal performance and internal environment (non-recurring) 100 Supporting NAVIGATE Provision for continuation of senior social care capacity in the NAVIGATE to support our vulnerable young people (non-recurring) 60 PROTECTING AND CARING FOR OUR MOST VULNERABLE PEOPLE Care Village A future-focused step by beginning work on feasibility of a possible Care Village. The feasibility study will allow us to map out a modern, joined-up model of care — bringing services, support, and community facilities together in one place. As our population ages and care needs grow, this is about planning sensibly now so that older residents can continue to live with dignity, independence, and the right level of support for years to come. (non recurring) 50 Page 20 of 138
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APPENDIX (iv)cont. ESOL Community cohesion and the integration of new residents to Perth & Kinross whose first language isn’t English is important to ensure everyone can make a positive contribution in our communities. Improving the provision of English for speakers of other languages plays an important part in achieving this aim. (non recurring) 98 Mental Health Support To support development of a multi-agency Neurodevelopmental triage system. (non recurring) 49 RASAC Further funding to support the vital work of this organisation (non-recurring) 35 35 Women's Aid Further funding to support the vital work of this organisation (non-recurring) 35 35 SUPPORTING AND PROMOTING PHYSICAL AND MENTAL WELLBEING The Neuk Support for the community Hub to strengthen and support the wellbeing of individuals (non recurring) 70 Community Mental Health Support Groups For community groups supporting better mental health across Perth and Kinross for example, Men's Shed, Women's Wellbeing Club, Andy's Man Club and Mindspace (non-recurring) 60 Community Ice Feasibility Study A feasibility study to examine viable options for a long term, sustainable community led future for ice in Perth. (non-recurring) 50 50 Contribution towards Perth Theatre and Concert Hall Transition Funding to support Perth Theatre and Concert Hall to transform their operating model (non recurring) 250 WORKING IN PARTNERSHIP WITH OUR COMMUNITIES Support for Culture Perth and Kinross To enable Culture Perth and Kinross to maintain current service provision for libraries and museums(non recurring) 200 Roads Maintenance / Structures / Pavements / Traffic Signals Investment in roads, bridges, pavements and traffic signals to fund a £15 million capital investment. (recurring) 215 215 215 Ditch and Gully Maintenance Gully and ditch cleaning keeps rainwater flowing safely away from roads and communities, reducing the risk of flooding and damage. Regular maintenance of these drainage systems helps protect infrastructure, improve road safety, and strengthen resilience during heavy rainfall. (non recurring) 120 Investment in local communities To empower local communities by supporting projects that tackle the local issues, improve quality of life and countering the effects of poverty and the cost of living. This aggregate of funds, administered under one single process will help ensure delivery for communities on the priorities they share with us and the support to access other funding streams when the need arises (non-recurring) 350 350 Community Halls Funding for LAL to maintain the provision of community halls (non recurring) 25 Page 21 of 138
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APPENDIX (iv)cont. APPENDIX (v) Armed Forces Covenant The Armed Forces Covenant is a commitment to ensure that those who serve or have served in the Armed Forces, and their families, are treated fairly and face no disadvantage in accessing public or commercial services. It strengthens the bond between the military and wider society by recognising their contribution and helping provide support where it is needed most. (non recurring) 3 Experience Crieff To support and sustain ongoing regeneration initiatives in Crieff via Experience Crieff. (non recurring) 45 45 TOTAL ADDITIONAL EXPENDITURE PROPOSALS 3,610 1,176 260 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY 2026/27 COUNCIL TAX CALCULATION 2026/27 £'000 £'000 2026/27 Provisional Revenue Budget 527,619 Adjustments: Reject Expenditure Pressures (Appendix i) 0 Reject Savings (Appendix ii) 2,163 Additional Savings Proposals (Appendix iii) (745) Additional Expenditure Proposals (Appendix iv) 3,610 5,028 2026/27 Updated Provisional Revenue Budget 532,647 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (1,426) Contribution from Service Concession Scheme (5,000) Contribution to unearmarked Reserves included in this Motion 56 Contribution from earmarked Reserves included in this Motion (3,200) (405,335) AMOUNT TO BE LEVIED FROM COUNCIL TAX 127,312 Page 22 of 138
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APPENDIX (v)cont. APPENDIX (vi) TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 76,060 FINAL 2026/27 BAND D COUNCIL TAX £ 1,673.84 INCREASE (2025/26 FINAL BAND D COUNCIL TAX £1,537.04) £ 136.80 PERCENTAGE INCREASE 8.9% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 2,572 Anti - Poverty 300 Feasibility 150 Culture 178 3,200 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY 2027/28 COUNCIL TAX CALCULATION 2027/28 £'000 £'000 2027/28 Provisional Revenue Budget 537,371 2027/28 Opening Deficit (5,615) Recurring impact of 2026/27 proposals 1,828 Adjustments: Reject Expenditure Pressures (Appendix i) 0 Reject Budget Reductions / Additional Income (Appendix ii) 1,374 Additional Savings Proposals (Appendix iii) (230) Additional Expenditure Proposals (Appendix iv) 1,176 2,320 2027/28 Updated Provisional Revenue Budget 535,904 Funding Total Revenue Funding (390,527) Page 23 of 138
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APPENDIX (vi)cont. APPENDIX (vii) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (678) Contribution from Service Concession Scheme (4,000) Contribution to unearmarked Reserves included in this Motion 380 Contribution from earmarked Reserves included in this Motion (951) (401,014) AMOUNT TO BE LEVIED FROM COUNCIL TAX 134,890 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 76,750 FINAL 2027/28 BAND D COUNCIL TAX £ 1,757.53 INCREASE (2026/27 FINAL BAND D COUNCIL TAX £1,673.84) £ 83.69 PERCENTAGE INCREASE 5.0% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 951 951 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET MOTION - SCOTTISH NATIONAL PARTY 2028/29 COUNCIL TAX CALCULATION 2028/29 £'000 £'000 2028/29 Provisional Revenue Budget 554,345 2027/28 Opening Deficit (5,615) 2028/29 Opening Deficit (12,721) Recurring impact of 2026/27 proposals 1,828 Recurring impact of 2027/28 proposals 1,369 Adjustments: Page 24 of 138
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APPENDIX (vii)cont. Reject Expenditure Pressures (Appendix i) 0 Reject Budget Reductions / Additional Income (Appendix ii) 227 Additional Budget Reductions / Income Proposals (Appendix iii) 0 Additional Expenditure Proposals (Appendix iv) 260 487 2028/29 Updated Provisional Revenue Budget 539,693 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (149) Contribution from Service Concession Scheme (3,000) Contribution to unearmarked Reserves included in this Motion 2,481 Contribution from earmarked Reserves included in this Motion (45) (396,478) AMOUNT TO BE LEVIED FROM COUNCIL TAX 143,215 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 77,606 FINAL 2028/29 BAND D COUNCIL TAX £ 1,845.41 INCREASE (2027/28 FINAL BAND D COUNCIL TAX £1,757.53) £ 87.88 PERCENTAGE INCREASE 5.0% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 45 45 Page 25 of 138
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1st Amendment (Councillors J Duff and F Smith) The Council agrees: 1. To approve the 2026/27 Provisional Revenue Budget of £527.619 million as set out in Appendix B of Report No. 26/54. 2. To approve the 2027/28 Provisional Revenue Budget of £537.371 million as set out in Appendix B of Report No. 26/54. 3. To approve the 2028/29 Provisional Revenue Budget of £554.345 million as set out in Appendix B of Report No. 26/54. 4. To approve the expenditure pressures as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (i). 5. To approve the budget reductions / additional income as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (ii). 6. To approve the additional budget reductions / additional income as set out in Appendix (iii) of this Revenue Budget Amendment. 7. To approve the additional expenditure proposals as set out in Appendix (iv) of this Revenue Budget Amendment. 8. To approve an additional contribution from Reserves of £1.932 million in 2026/27 in this Revenue Budget Amendment. 9. To approve an additional contribution from Reserves of £932,000 in 2027/28 in this Revenue Budget Amendment. 10. To approve an additional contribution from Reserves of £838,000 in 2028/29 in this Revenue Budget Amendment. 11. To approve the Council Tax bases of 76,243 for 2026/27, 76,935 for 2027/28 and 77,791 for 2028/29. 12. To approve the contribution to Perth and Kinross Integration Joint Board of £120.956 million which is included in the 2026/27 Provisional Revenue Budget with a further £1 million earmarked in reserves. 13. To approve the earmarked general fund balances set out in Appendix G with the exception of the adjustments listed in Appendices (v), (vi) and (vii). 14. To approve that uncommitted Reserves are maintained at a minimum of 2% to 4% of the 2026/27 Provisional Revenue Budget which equates to £10.552 million to £21.104 million. 15. To approve a provision for the non-collection of Council Tax of 1.50% in 2026/27, 2027/28 and 2028/29. 16. To approve the 2026/27 Final Revenue Budget of £529.456 million resulting in a Band D Council Tax of £1,643.86 as summarised in Appendix (v) of this Revenue Budget Amendment. This represents a 6.95% increase from the Council Tax Band D figure for 2025/26. 17. To approve the 2027/28 Provisional Revenue Budget of £532.588 million resulting in an indicative Band D Council Tax of £1,705.50 as summarised in Appendix (vi) of this Revenue Budget Amendment. This represents an indicative 3.75% increase from the Council Tax Band D figure for 2026/27. 18. To approve the 2028/29 Provisional Revenue Budget of £536.736 million resulting in an indicative Band D Council Tax of £1,760.93 as summarised in Appendix (vii) of this Revenue Budget Amendment. This represents an indicative 3.25% increase from the Council Tax Band D figure for 2027/28. Page 26 of 138
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APPENDIX (i) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 EXPENDITURE PRESSURES REJECTED £'000 £'000 £'000 Enabling our children and young people to achieve their full potential Home to School Transport (partial) 61 230 120 100 Working in Partnership with Communities Operations Fuel 68 17 9 33 Roads Reactive Maintenance 70 120 TOTAL EXPENDITURE PRESSURES REJECTED 367 129 133 Page 27 of 138
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APPENDIX (ii) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED £'000 £'000 £'000 Tackling Poverty Reduction in Employability Support 72 25 25 Removal of Permanent funding for activities over School Holidays 73 50 Review of funding streams for Perth - CAB (partial) 75 180 140 Developing a resilient, stronger and greener economy Remove Funding for Pitlochry Festival Theatre 78 220 Enabling our children and young people to achieve their full potential Early Learning & Childcare Sustainable Rate to Partner Providers 83 47 20 Removal of Remaining Early Learning and Childcare (ELC) funding 86 255 145 Removal of Peripatetic Team in Primary Sector (partial) 88 249 149 Cease Delivery of Duke Of Edinburgh Award 89 45 Protecting and caring for our most vulnerable people Adult Learning 92 92 Working in partnership with our communities Street Cleansing - Reduction in Activity 101 170 170 Public Conveniences and Comfort Schemes 102 116 Traffic and Road Safety Reductions 102 73 73 Removal of the Community Environmental Challenge Fund 104 100 TOTAL BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED 1,412 859 73 Page 28 of 138
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APPENDIX (iii) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP 26/27 27/28 28/29 ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS £'000 £'000 £'000 Tackling climate change and supporting sustainable places Climate Change and Sustainability: Reduction of resources by 1 FTE, reduction of project budget by 50% and dissolution of Climate Change and Sustainability Committee with work to be reported through the relevant service committees in accordance with the theme eg Environment & Infrastructure, Housing & Communities, Economy, Development & Planning (recurring) 173 Enabling our children and young people to achieve their full potential Breast Buddies 40 Protecting and caring for our most vulnerable people Maximising alternative funding: An extended savings target of an additional £50,000 in 2026/27 from maximising alternative funding sources, such as the Independent Living Fund, to help meet the needs of adults with social care needs (non-recurring). 50 Review of Contracts: An extended savings target of £50,000 in 2026/27 from the review of Health and Social Care contracts (recurring) 50 Working in partnership with our communities Brown Bin Charges - Additional Income - Increase charge in 2027/28 to £48 and 2028/29 £50 33 35 Tayside Contracts - savings target from productivity/efficiency in Council contracts 120 Organised to Deliver / Transformation Increase slippage to 6.5% 600 General Efficiency Target 615 Cease Membership of COSLA 90 TOTAL ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS 1,648 123 35 Page 29 of 138
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APPENDIX (iv) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP CORPORATE PLAN 2022 - 2027 26/27 27/28 28/29 ADDITIONAL EXPENDITURE PROPOSALS £'000 £'000 £'000 TACKLING POVERTY Buttons & Bows Additional funding of £20,000 in 2026/27 to support the inspirational work of this Buttons and Bows who provide a valuable service to our families (non recurring) 20 Child Poverty Fund Funding of £75,000 in 2026/27 to enable front line workers to make instant decisions and one-off payments for the purchase of goods and services to resolve a problem for a child or household affected by poverty (non-recurring) 75 Perth and Kinross Skills Passport: A £150,000 investment in 2026/27 to provide grants of up to £3,000 to assist a minimum of 50 people back into work or to get a better job through the provision of financial assistance for help such as a training course or equipment (non-recurring). 150 The Big Hoose Perthshire: Funding of £35,000 in 2026/27 to support the provision of free essential household items to families with children and young people under 25 who are struggling with the cost of living (non-recurring). 35 TACKLING CLIMATE CHANGE AND SUPPORTING SUSTAINABLE PLACES Support for Bloom Groups, Paths Groups and Friends of Cemeteries In order to support the invaluable contributions of Bloom Groups, Paths Groups and Friends of Cemeteries, funding of £10,000 in 2026/27 and 2027/28 towards cost of a Project Development Officer (non recurring). 10 10 Perth and Kinross Good Food Fund: Funding of £30,000 in 2026/27 to support local food and drink festivals, farmers markets and events that promote local food produce (non-recurring). 30 DEVELOPING A RESILIENT, STRONGER AND GREENER LOCAL ECONOMY Adapt Your Property Borrowing to create further funding capacity of £200,000 in 2026/27 and 2027/28 to encourage the conversion of underused/vacant town and city centre buildings to bring them back into use for economic and socially productive purposes. Providing 50% grants to a maximum of £75,000. (recurring) 10 10 Page 30 of 138
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APPENDIX (iv)cont. Perth Festival of the Arts: Funding of £25,000 in 2026/27 towards the celebration of the visual and performing arts, inspiring young people to participate in these arts and nurturing young talent (non-recurring) 25 Growbiz: An Investment of £35,000 in 2026/27 for Growbiz to deliver services in Perth and Kinross aimed at supporting small and micro businesses, the care and wellbeing sector, young entrepreneurs and new business start-ups. (non- recurring) 35 Open for Business Fund: An investment of £200,000 in 2026/27 to encourage small town and city centre businesses to ensure that the frontages of their premises are refreshed and welcoming and say "We're open for business" to encourage increased footfall and local and visitor spend (non-recurring) 200 City and Town Centre Cleanliness: An investment of £150,000 in 2026/27 to carry out a deep clean of our city and town centres, as well as Perth Lade, removing litter, weeds, graffiti and other detritus, sweeping pavements, cleaning roads and street signs, and making our centres more attractive places in which to live, work and visit (non-recurring) 150 Parking Services: No increase in parking charges for 2026/27 including residents car parking permits (non-recurring) 153 6 7 Parking Services: Funded from the Car Park Trading Account (non-recurring) (153) (6) (7) ENABLING OUR CHILDREN AND YOUNG PEOPLE TO ACHIEVE THEIR FULL POTENTIAL Starfish Way: Funding of £20,000 in 2026/27 to support young people facing challenges with mental health, poverty, lack of opportunity or with additional support needs to achieve accredited awards, confidence and life skills (non- recurring). 20 Blairgowrie High School - Feasibility Study: Funding of £75,000 in 2026/27 to undertake a feasibility study on the replacement of Blairgowrie High School, the study to be conducted in conjunction with the Property Asset Transformation Review of Blairgowrie (non-recurring). 75 Youth Justice Project: Funding of £50,000 in 2026/27 aimed at reducing anti- social behaviour among young persons at risk by providing structured activities and personal development opportunities in Perth and in rural areas across Perth and Kinross (non-recurring) 50 Inclusion Support Redesign: Reversal of the removal of 1FTE at Navigate and reversal of the removal of 0.6FTE from the Educational Psychology Service (recurring) 104 PROTECTING AND CARING FOR OUR MOST VULNERABLE PEOPLE RASAC Perth and Kinross: Funding of £45,000 in 2026/27 to support women and young people who have experienced sexual violence at any time in their lives (non-recurring). 45 Page 31 of 138
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APPENDIX (iv)cont. Perthshire Women's Aid: Funding of £45,000 in 2026/27 to offer specialist knowledge and understanding of the issues that surround domestic abuse for women, children and young people (non-recurring), 45 SUPPORTING AND PROMOTING PHYSICAL AND MENTAL WELLBEING The Neuk: Funding of £75,000 in 2026/27 towards its multi-agency, one-stop centre providing a safe and supportive environment for those suffering mental health crisis or requiring suicide prevention support (non recurring). 75 Community Mental Health Support Groups: Funding of £65,000 in 2026/27 for community groups supporting better mental health in Perth and Kinross for example, such as The Men's Shed, The Women's Wellbeing Club, Andy's Mans Club and Mindspace (non-recurring) 65 Samaritans: Funding of £10,000 in 2026/27 towards helping to reduce feelings of isolation and disconnection that can lead to suicide and to offer support to families affected (non-recurring). 10 Free Pitch Hire: Additional funding of £10,000 to cover the costs of the additional demand for grass pitch hire throughout Perth and Kinross (recurring) 10 CulturePK: Funding of £198,000 in 2026/27 to prevent the closure of the public libraries in Alyth, Auchterarder, Birnam, Comrie, North Inch, Pitlochry and Scone and preventing reduced operating hours in Perth Museum and Perth Art Gallery (non-recurring) 198 WORKING IN PARTNERSHIP WITH OUR COMMUNITIES Roads Infrastructure: Borrowing costs to create £2million additional capacity for roads maintenance in 2026/27 and 2027/28 (recurring) 86 86 Structures Infrastructure: Borrowing costs to create £2million additional capacity for structures maintenance in 2026/27 and 2027/28 (recurring) 86 86 Roads Reactive Maintenance: Funding of £140,000 in 2026/27, 2027/28 and 2028/29 for essential reactive maintenance budgets for road defect repairs, sign maintenance and cleaning, road markings and studs, ditch clearance and repairs to safety fences and barriers (non-recurring) 140 140 140 Extended Opening of Recycling Centres: Funding of £14,000 in 2026/27 to allow the recycling centres in Blairgowrie, Crieff, Friarton, Inveralmond, Kinross and Pitlochry to remain open for an extra 2 hours on one day per week during the summer months (non-recurring). 14 Visitor Management: Funding of £182,000 in 2026/27 to recruit 6 Rangers for 30 weeks including vehicle hire, fuel and miscellaneous equipment plus porta- loo hire and cleaning (non-recurring) 182 Page 32 of 138
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APPENDIX (iv)cont. Community Halls: Funding of £25,000 in 2026/27 for Live Active Leisure to maintain the provision of community halls (non-recurring) 25 War Memorial Cleaning and Repairs: Funding of £50,000 in 2026/27, 2027/28 and 2028/29 to undertake a programme of cleaning and repairs to war memorials across Perth and Kinross (non-recurring) 50 50 50 Litter Bins: Funding of £25,000 in 2026/27 to replace litter bins which have reached the end of their useful life or to install additional litter bins where needed (non-recurring) 25 Grit Bins: Funding of £20,000 in 2026/27 to replace existing grit bins which have reached the end of their useful life or to expand the grit bin network where needed (non-recurring) 20 Rural Events Fund: Funding of £50,000 in 2026/27 to support local groups and organisations in rural areas with the organisation of events (non-recurring) 50 A93 Tourist Route: Funding of £25,000 in 2026/27 to market the A93 tourist route linking Perth to Royal Deeside and Aberdeenshire, promoting Perth and our historic links with Scone Palace and the Stone of Destiny. including better signage and visitor information thereby improving our tourism offer in Perth and Kinross (non-recurring) 25 Bus Shelters: Funding of £30,000 in 2026/27 for three bus shelters in Rattray (non-recurring) 30 Ruthven Road near Alyth: Funding of £120,000 in 2026/27 to make improvements including passing places to Ruthven Road leading from Angus Council area to Alyth and Blairgowrie. When the River Isla floods, Ruthven Road is a lifeline for residents, bus passengers and visitors as one of the only open roads providing access to these two areas (non-recurring). 120 Ground Maintenance: Funding of £150,000 to reverse the proposed cut to ground maintenance activities in 2026/27 (recurring). 150 TOTAL ADDITIONAL EXPENDITURE PROPOSALS 2,440 382 190 Page 33 of 138
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APPENDIX (v) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP 2026/27 COUNCIL TAX CALCULATION 2026/27 £'000 £'000 2026/27 Provisional Revenue Budget 527,619 Adjustments: Reject Expenditure Pressures (Appendix i) (367) Reject Savings (Appendix ii) 1,412 Additional Savings Proposals (Appendix iii) (1,648) Additional Expenditure Proposals (Appendix iv) 2,440 1,837 2026/27 Updated Provisional Revenue Budget 529,456 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (1,426) Contribution from Service Concession Scheme (5,000) Contribution to unearmarked Reserves included in this Amendment 62 Contribution from earmarked Reserves included in this Amendment (1,994) (404,123) AMOUNT TO BE LEVIED FROM COUNCIL TAX 125,333 TAX BASE BAND D EQUIVALENT PROPERTIES (1.5% Non Collection) 76,243 FINAL 2026/27 BAND D COUNCIL TAX £ 1,643.86 INCREASE (2025/26 FINAL BAND D COUNCIL TAX £1,537.04) £ 106.82 PERCENTAGE INCREASE 6.95% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Page 34 of 138
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APPENDIX (v)cont. APPENDIX (vi) Revenue Grants 1,919 Feasibility Fund 75 1,994 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP 2027/28 COUNCIL TAX CALCULATION 2027/28 £'000 £'000 2027/28 Provisional Revenue Budget 537,371 2027/28 Opening Deficit (5,615) Recurring impact of 2026/27 proposals (157) Adjustments: Reject Expenditure Pressures (Appendix i) (129) Reject Budget Reductions / Additional Income (Appendix ii) 859 Additional Savings Proposals (Appendix iii) (123) Additional Expenditure Proposals (Appendix iv) 382 989 2027/28 Updated Provisional Revenue Budget 532,588 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (678) Contribution from Service Concession Scheme (4,000) Contribution from unearmarked Reserves included in this Amendment (732) Contribution from earmarked Reserves included in this Amendment (200) (401,375) AMOUNT TO BE LEVIED FROM COUNCIL TAX 131,213 TAX BASE BAND D EQUIVALENT PROPERTIES (1.5% Non Collection) 76,935 Page 35 of 138
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APPENDIX (vi)cont. APPENDIX (vii) FINAL 2027/28 BAND D COUNCIL TAX £ 1,705.50 INCREASE (2026/27 FINAL BAND D COUNCIL TAX £1,643.86) £ 61.64 PERCENTAGE INCREASE 3.75% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 200 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - CONSERVATIVE GROUP 2028/29 COUNCIL TAX CALCULATION 2028/29 £'000 £'000 2028/29 Provisional Revenue Budget 554,345 2027/28 Opening Deficit (5,615) 2028/29 Opening Deficit (12,721) Recurring impact of 2026/27 proposals (157) Recurring impact of 2027/28 proposals 789 Adjustments: Reject Expenditure Pressures (Appendix i) (133) Reject Budget Reductions / Additional Income (Appendix ii) 73 Additional Budget Reductions / Income Proposals (Appendix iii) (35) Additional Expenditure Proposals (Appendix iv) 190 95 2028/29 Updated Provisional Revenue Budget 536,736 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Page 36 of 138
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APPENDIX (vii)cont. Net Contribution to / (from) Reserves included in the Provisional Budget (149) Contribution from Service Concession Scheme (3,000) Contribution from unearmarked Reserves included in this Amendment (648) Contribution from earmarked Reserves included in this Amendment (190) (399,752) AMOUNT TO BE LEVIED FROM COUNCIL TAX 136,984 TAX BASE BAND D EQUIVALENT PROPERTIES (1.5% Non Collection) 77,791 FINAL 2028/29 BAND D COUNCIL TAX £ 1,760.93 INCREASE (2027/28 FINAL BAND D COUNCIL TAX £1,705.50) £ 55.43 PERCENTAGE INCREASE 3.25% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 190 Page 37 of 138
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2nd Amendment (Bailie C McLaren and Councillor A Watt) The Council agrees: 1. To approve the 2026/27 Provisional Revenue Budget of £527.619 million as set out in Appendix B of Report No. 26/54. 2. To approve the 2027/28 Provisional Revenue Budget of £537.371 million as set out in Appendix B of Report No. 26/54. 3. To approve the 2028/29 Provisional Revenue Budget of £554.345 million as set out in Appendix B of Report No. 26/54. 4. To approve the expenditure pressures as set out in Appendix C of Report No. 26/54. 5. To approve the budget reductions / additional income as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (ii). 6. To approve the additional budget reductions / additional income as set out in Appendix (iii) of this Revenue Budget Amendment. 7. To approve the additional expenditure proposals as set out in Appendix (iv) of this Revenue Budget Amendment. 8. To approve an additional contribution from Reserves of £2.078 million in 2026/27 in this Revenue Budget Amendment. 9. To approve an additional contribution to Reserves of £147,000 in 2027/28 in this Revenue Budget Amendment. 10. To approve an additional contribution to Reserves of £2.518 million in 2028/29 in this Revenue Budget Amendment. 11. To approve the Council Tax bases of 75,910 for 2026/27, 76,600 for 2027/28 and 77,456 for 2028/29. 12. To approve the contribution to Perth and Kinross Integration Joint Board of £120.956 million which is included in the 2026/27 Provisional Revenue Budget with a further £1 million earmarked in reserves. 13. To approve the earmarked general fund balances set out in Appendix G with the exception of the adjustments listed in Appendices (v), (vi) and (vii). 14. To approve that uncommitted Reserves are maintained at a minimum of 2% to 4% of the 2026/27 Provisional Revenue Budget which equates to £10.552 million to £21.104 million. 15. To approve a provision for the non-collection of Council Tax of 1.75% in 2026/27, 2027/28 and 2028/29. 16. To approve the 2026/27 Final Revenue Budget of £531.388 million resulting in a Band D Council Tax of £1,674.61 as summarised in Appendix (v) of this Revenue Budget Amendment. This represents a 8.95% increase from the Council Tax Band D figure for 2025/26. 17. To approve the 2027/28 Provisional Revenue Budget of £534.984 million resulting in an indicative Band D Council Tax of £1,758.34 as summarised in Appendix (vi) of this Revenue Budget Amendment. This represents an indicative 5.0% increase from the Council Tax Band D figure for 2026/27. 18. To approve the 2028/29 Provisional Revenue Budget of £539.400 million resulting in an indicative Band D Council Tax of £1,846.24 as summarised in Appendix (vii) of this Revenue Budget Amendment. This represents an indicative 5.0% increase from the Council Tax Band D figure for 2027/28. Page 38 of 138
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APPENDIX (i) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 EXPENDITURE PRESSURES REJECTED £'000 £'000 £'000 TOTAL EXPENDITURE PRESSURES REJECTED 0 0 0 Page 39 of 138
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APPENDIX (ii) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED £'000 £'000 £'000 Tackling Poverty Reduction in Employability Support 72 25 25 Funding to increase School Clothing grant increase of 3% for academic year 26/27 72 10 Removal of Permanent funding for activities over School Holidays 73 50 Change in Delivery of Free School Meals over the holiday funding 74 25 Review of funding streams for Perth - CAB 75 206 207 Review of Funding provision for Energy Advice 76 30 Developing a resilient, stronger and greener local economy Reduction in Support for Business (partial) 80 25 Enabling our children and young people to achieve their full potential Removal of Remaining Early Learning and Childcare (ELC) Funding 86 255 145 Removal of Peripatetic Team in Primary Sector (partial) 88 249 149 Cease Delivery of Duke Of Edinburgh Award 89 45 Protecting and caring for our most vulnerable people Adult Learning Partnership SLA 92 92 Working in partnership with our communities Street Cleansing - Reduction in Activity 101 170 170 Public Conveniences and Comfort Schemes (partial to retain conveniences) 102 66 Traffic and Road Safety Reductions 102 73 73 Removal of the Community Environmental Challenge Fund (partial) 104 50 Removal of Dedicated Support for Tayside Bio Diversity Partnership 105 67 Funding for NHS Community Food Initiatives 106 25 Organised to Deliver / Transformation Reduction in Revenue and Benefits Management 111 72 Reduction in Finance and Business Support Capacity 113 86 86 86 TOTAL BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED 1,319 1,084 159 Page 40 of 138
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APPENDIX (iii) APPENDIX (iv) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP 26/27 27/28 28/29 ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS £'000 £'000 £'000 TOTAL ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS 0 0 0 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP CORPORATE PLAN 2022 - 2027 26/27 27/28 28/29 ADDITIONAL EXPENDITURE PROPOSALS £'000 £'000 £'000 TACKLING POVERTY Scottish Welfare Fund / Financial Insecurity Funding Anti-Poverty Action to provide early intervention and crisis prevention supports (FIF) and crisis response (SWF) (non recurring) 500 Link Officer Resettlement Funding to recruit a Link Officer to continue and expand targeted housing support for asylum seekers and other NRPF (No Recourse to Public Funds) vulnerable groups, ensuring equitable access to housing, reducing pressure on temporary accommodation and supporting successful integration and tenancy sustainment. (non recurring) 50 50 Think Yes Tenancy Sustainment Fund for non-Council tenants Continue to deliver early intervention and prevention to support private sector tenants, administered by frontline homelessness team, to find solutions to avoid homelessness (non-recurring) 80 Landlord Incentive Scheme Mirroring the successful Ukraine Landlord Offer, this would incentivise landlords to offer their properties to private tenants through the Council’s Rent Bond Guarantee scheme at affordable rent levels. It represents an important opportunity for PKC Lets to positively engage with and support private landlords, while increasing the supply of affordable, good-quality private rented accommodation. (non-recurring) 80 Page 41 of 138
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APPENDIX (iv)cont. Big Hoose For PKAVS Big Hoose project providing free essential household items to families with children and young people under 25 who are struggling with the cost of living. (non recurring) 20 Community Foodshare To provide low cost staples, utility costs and volunteer support at Letham4All’s satellite Community Fridges at Muirton, Moncreiffe and Bankfoot (£3k), which save hundreds of tonnes of food from landfill every year and help tackle food poverty. (non recurring) 16 16 TACKLING CLIMATE CHANGE AND SUPPORTING SUSTAINABLE PLACES Support for Bloom Groups, Biodiversity Groups and Friends of Cemeteries In order to support the invaluable contributions of Bloom Groups, Biodiversity Groups and Friends of Cemeteries, supplementary funding for trees, shrubs, plants and seeds to support biodiversity. (non recurring) 30 Take a Pride in Perth & Kinross To support provision of project development and fundraising support for projects by Bloom Groups and Friends of Cemeteries (non recurring) 10 DEVELOPING A RESILIENT, STRONGER AND GREENER LOCAL ECONOMY Rural Employment Incentive A targeted incentive supporting rural SMEs to create employment or Modern Apprenticeship opportunities for individuals residing in rural Perthshire who face barriers to work. (non recurring) 50 50 ENABLING OUR CHILDREN AND YOUNG PEOPLE TO ACHIEVE THEIR FULL POTENTIAL Toxic Masculinity Project officer to lead work in schools on positive male role models to tackle misogyny and toxic masculinity and promote a whole school approach to preventing gender based violence. This budget will allow staff development and linkage with other related projects - in particular the "Violence Against Women Group" and our implementation of "Equally Safe" from Scottish Government. The post will develop a curriculum in our primary and secondary schools to sit alongside our other equalities curricular inputs - for example around anti-racist education. (non-recurring) 40 50 PROTECTING AND CARING FOR OUR MOST VULNERABLE PEOPLE ESOL To continue funding 2 full time ESOL posts to work with the asylum seeker population and other vulnerable groups to improve their English skills and confidence. The 2 ESOL posts are critical for staffing the “The Learning Station,” a dedicated ESOL base at Perth Bus Station and near the Station and Queens Hotels, and delivering ESOL classes. They significantly enhance the quality of life for non-native speakers, promote social cohesion, and contribute to the overall development and prosperity of communities. (recurring) 98 Page 42 of 138
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APPENDIX (iv)cont. RASAC Further funding to support the vital work of this organisation (non-recurring) 40 Women's Aid Further funding to support the vital work of this organisation (non-recurring) 40 SUPPORTING AND PROMOTING PHYSICAL AND MENTAL WELLBEING REFURBISHMENT OF MULTI-USE GAMES AREA AT COMMUNITY SCHOOL OF AUCHTERARDER To bring facilities back into use for all sports (non-recurring) 100 WORKING IN PARTNERSHIP WITH OUR COMMUNITIES Support for Culture Perth and Kinross To enable Culture Perth and Kinross to maintain current service provision for libraries and museums pending completion of the review (non recurring) 200 Rumbling Bridge Management Plan To develop a management plan for Rumbling Bridge Gorge (non recurring) 50 TRACKS To fund future TRACKS projects throughout Kinross-shire (non recurring) 20 20 Play Area Maintenance To maintain the budget for inspection and repair and replacement of equipment and address the backlog of closed playpark facilities, providing safe play areas for children and their families and increasing wellbeing (non recurring) 150 Fairer Communities (previously CIF and Participatory Budgeting)To continue with the above combined into one single fund. Fairer Communities for All is a process of distributing funds to community groups who can deliver projects which address the cost of living, income maximisation and employability. This supports an increased allocation to communities with highest need – Coupar Angus, Rattray, South Crieff, Perth City – Letham, Muirton and North Muirton, Aberfeldy / Kinloch Rannoch. (non-recurring) 350 Community Halls Funding for LAL to maintain the provision of community halls (non recurring) 25 25 Flood Prevention Grants Establishment of a fund to provide grants and advice to owners of properties at risk of flooding in areas not covered by a Flood Risk Management Plan (non recurring) 150 Roads £2million towards roads maintenance investment (recurring) 86 Infrastructure £15million over 3 years towards structures (bridges) investment (recurring) 215 215 215 Page 43 of 138
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APPENDIX (v) Ranger Service 2 staff to expand service (non recurring) 50 TOTAL ADDITIONAL EXPENDITURE PROPOSALS 2,450 426 215 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP 2026/27 COUNCIL TAX CALCULATION 2026/27 £'000 £'000 2026/27 Provisional Revenue Budget 527,619 Adjustments: Reject Expenditure Pressures (Appendix i) 0 Reject Savings (Appendix ii) 1,319 Additional Savings Proposals (Appendix iii) 0 Additional Expenditure Proposals (Appendix iv) 2,450 3,769 2026/27 Updated Provisional Revenue Budget 531,388 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (1,426) Contribution from Service Concession Scheme (5,000) Contribution from unearmarked Reserves included in this Amendment (27) Contribution from earmarked Reserves included in this Amendment (2,051) (404,269) AMOUNT TO BE LEVIED FROM COUNCIL TAX 127,119 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 75,910 FINAL 2026/27 BAND D COUNCIL TAX £ 1,674.61 INCREASE (2025/26 FINAL BAND D COUNCIL TAX £1,537.04) £ 137.57 Page 44 of 138
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APPENDIX (v)cont. APPENDIX (vi) PERCENTAGE INCREASE 8.95% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 2,051 2,051 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP 2027/28 COUNCIL TAX CALCULATION 2027/28 £'000 £'000 2027/28 Provisional Revenue Budget 537,371 2027/28 Opening Deficit (5,615) Recurring impact of 2026/27 proposals 1,718 Adjustments: Reject Expenditure Pressures (Appendix i) 0 Reject Budget Reductions / Additional Income (Appendix ii) 1,084 Additional Savings Proposals (Appendix iii) 0 Additional Expenditure Proposals (Appendix iv) 426 1,510 2027/28 Updated Provisional Revenue Budget 534,984 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (678) Contribution from Service Concession Scheme (4,000) Contribution to unearmarked Reserves included in this Amendment 358 Contribution from earmarked Reserves included in this Amendment (211) (400,296) AMOUNT TO BE LEVIED FROM COUNCIL TAX 134,688 Page 45 of 138
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APPENDIX (vi)cont. APPENDIX (vii) TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 76,600 FINAL 2027/28 BAND D COUNCIL TAX £ 1,758.34 INCREASE (2026/27 FINAL BAND D COUNCIL TAX £1,674.61) £ 83.73 PERCENTAGE INCREASE 5.00% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 211 211 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - LIBERAL DEMOCRAT GROUP 2028/29 COUNCIL TAX CALCULATION 2028/29 £'000 £'000 2028/29 Provisional Revenue Budget 554,345 2027/28 Opening Deficit (5,615) 2028/29 Opening Deficit (12,721) Recurring impact of 2026/27 proposals 1,718 Recurring impact of 2027/28 proposals 1,299 Adjustments: Reject Expenditure Pressures (Appendix i) 0 Reject Budget Reductions / Additional Income (Appendix ii) 159 Additional Budget Reductions / Income Proposals (Appendix iii) 0 Additional Expenditure Proposals (Appendix iv) 215 374 2028/29 Updated Provisional Revenue Budget 539,400 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Page 46 of 138
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APPENDIX (vii)cont. Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (149) Contribution from Service Concession Scheme (3,000) Contribution to unearmarked Reserves included in this Amendment 2,518 Contribution from earmarked Reserves included in this Amendment (396,396) AMOUNT TO BE LEVIED FROM COUNCIL TAX 143,004 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 77,456 FINAL 2028/29 BAND D COUNCIL TAX £ 1,846.26 INCREASE (2027/28 FINAL BAND D COUNCIL TAX £1,758.34) £ 87.92 PERCENTAGE INCREASE 5.00% Excluding Water and Waste Water charges determined by Scottish Water. Page 47 of 138
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3rd Amendment (Councillor C Stewart and Bailie R Brock) The Council agrees: 1. To approve the 2026/27 Provisional Revenue Budget of £527.619 million as set out in Appendix B of Report No. 26/54. 2. To approve the 2027/28 Provisional Revenue Budget of £537.371 million as set out in Appendix B of Report No. 26/54. 3. To approve the 2028/29 Provisional Revenue Budget of £554.345 million as set out in Appendix B of Report No. 26/54. 4. To approve the expenditure pressures as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (i). 5. To approve the budget reductions / additional income as set out in Appendix C of Report No. 26/54 with the exception of those listed in Appendix (ii). 6. To approve the additional budget reductions / additional income as set out in Appendix (iii) of this Revenue Budget Amendment. 7. To approve the additional expenditure proposals as set out in Appendix (iv) of this Revenue Amendment. 8. To approve an additional contribution from Reserves of £3.254 million in 2026/27 in this Revenue Amendment. 9. To approve an additional contribution to Reserves of £6.262 million in 2027/28 in this Revenue Amendment. 10. To approve an additional contribution to Reserves of £17.626 million in 2028/29 in this Revenue Amendment. 11. To approve the Council Tax bases of 76,060 for 2026/27, 76,850 for 2027/28 and 77,806 for 2028/29. 12. To approve the contribution to Perth and Kinross Integration Joint Board of £121.306 million which is included in the 2026/27 Provisional Revenue Budget with a further £1 million earmarked in Reserves. 13. To approve the earmarked general fund balances set out in Appendix G with the exception of the adjustments listed in Appendices (v), (vi) and (vii). 14. To approve that uncommitted Reserves are maintained at a minimum of 2% to 4% of the 2026/27 Provisional Revenue Budget which equates to £10.552 million to £21.104 million. 15. To approve a provision for the non-collection of Council Tax of 1.75% in 2026/27, 2027/28 and 2028/29. 16. To approve the 2026/27 Final Revenue Budget of £529.952 million resulting in a Band D Council Tax of £1,636.95 as summarised in Appendix (v) of this Revenue Budget Amendment. This represents a 6.5% increase from the Council Tax Band D figure for 2025/26. 17. To approve the 2027/28 Provisional Revenue Budget of £525.012 million resulting in an indicative Band D Council Tax of £1,702.43 as summarised in Appendix (vi) of this Revenue Budget Amendment. This represents an indicative 4% increase from the Council Tax Band D figure for 2026/27. This means there is no structural deficit in 2027/28. 18. To approve the 2028/29 Provisional Revenue Budget of £519.045 million resulting in an indicative Band D Council Tax of £1,770.52 as summarised in Appendix (vii) of this Revenue Budget Amendment. This represents an indicative 4% increase from the Council Tax Band D figure for 2027/28. This means there is no structural deficit in 2028/29. Page 48 of 138
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APPENDIX (i) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 EXPENDITURE PRESSURES REJECTED £'000 £'000 £'000 Protecting and caring for our most vulnerable people Adult Social Care Pressures - years two and three (partial) - to take into account best practices and transformation funding which will contribute to redesigning adult social care to ensure the sustainability of the service. 66 1,250 1,750 Working in partnership with communities Operations Fuel 68 17 9 33 Council Wide - Fleet Loan Charges 69 45 175 790 Good Food Nation - cost of this additional unfunded statutory duty to be absorbed by existing council functions 69 58 Organised to Deliver / Transformation 2028/29 Pay Award - reducing assumption from 3% to 2% 3,013 TOTAL EXPENDITURE PRESSURES REJECTED 62 1,492 5,586 Page 49 of 138
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APPENDIX (ii) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP Reference Report No. 26/54 Page No. 26/27 27/28 28/29 BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED £'000 £'000 £'000 Tackling Poverty Change in Delivery of Free School Meals over the holiday funding 74 25 Developing a resilient, stronger and greener economy Remove Grant Funding to Pitlochry Festival Theatre - recognising the significant impact this would have on this local charity's operations, in particular community engagement and their post COVID recovery. 78 220 Reduction in Support for Growbiz - SLA - recognising the vital support they provide to start-ups and small businesses and growing the Perth & Kinross economy. 81 70 Removal of funding for mobile toilets - this would have a significant negative impact on local events in Perth & Kinross. 82 26 Enabling our children and young people to achieve their full potential Reduction in Breast Buddies funding - maintaining and increasing this function will have positive, long-term health and social justice benefits for newborns, infants, children, young people and mothers. 83 40 Reduction in Central Team supporting Early Years and Childcare. 85 25 Cease Delivery of Duke Of Edinburgh Award - opportunities like the Duke of Edinburgh Award are essential to help young people build confidence, gain new experiences and instil volunteering from a young age. 89 45 Protecting and caring for our most vulnerable people Adult Learning Partnership SLA 92 92 Review and Redesign of Day Care/Opportunities for Older People - recognising that this would just increase pressures on the social care budget and remove an important support service for older people. 93 150 Review of Contracts - Care Home provision 94 200 Working in partnership with our communities Page 50 of 138
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APPENDIX (ii)cont. APPENDIX (iii) Street Cleansing - Reduction in Activity - to ensure our streets remain looking their best 101 170 170 Public Conveniences and Comfort Schemes - Perth & Kinross is a major destination and local conveniences are essential for visitors and residents. 102 116 Traffic and Road Safety Reductions - local residents are very concerned about road safety and this proposed cut would reduce already limited capacity. 102 73 73 Removal of the Community Environmental Challenge Fund - this is a vital funding resource for local communities to undertake projects, and will maximise council spend through mobilisation of volunteer resources. 104 100 Organised to Deliver / Transformation Savings from Treasury Management - by rejecting this saving we are ensuring that the Council reduces the debt burden passed on to future generations. 110 2,000 Reduction in Maintenance budget - rejection of this saving ensures that Council assets can be properly maintained and will reduce risk and future maintenance costs. 114 525 TOTAL BUDGET REDUCTIONS / ADDITIONAL INCOME REJECTED 3,667 380 73 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP 26/27 27/28 28/29 ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS £'000 £'000 £'000 Tackling climate change and supporting sustainable places Reduction in tree-planting function - recognising significant other external funding sources for tree planting. 52 Redesign of Climate Change function - prioritisation of function into supporting communities. 500 Developing a resilient, stronger and greener local economy Reduction to Development Plan function 213 212 Planning and Building Standards - increase in income 150 150 Page 51 of 138
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APPENDIX (iii)cont. Enabling our children and young people to achieve their full potential Introduce a small charge from September for use of minibuses by schools and community groups to support the costs of the service. 38 50 50 Recharge 100% of SERCC annual fee to schools' DSM budget 22 Efficiencies in Perth Secondary Schools 500 Redesign of Home to School Transport - including best use of council fleet and staff 100 450 450 Reduction in teacher sickness absence - further saving through reduced supply costs which are currently £1.022m 100 Supporting and promoting physical and mental wellbeing Live Active Leisure - extend savings target to make it more competitive with other leisure organisations 200 Working In Partnership With Our Communities Redesign of Community Learning and Development function 230 229 Income from allowing more than 2 garden waste permits per household 39 11 Expansion of Perth City parking permit zone - income to be applied to public transport costs 100 Charge for Broxden Park and Ride (with a free ticket to City Centre) - income to be applied to public transport costs 200 Organised to Deliver / Transformation Tayside Contracts - savings target from productivity/efficiency 100 Tayside Contracts slippage target raised from 2% to 3% (recurring) 100 Tayside Contracts share of overheads charged to PKC - not been revisited since 2018, despite reported savings of £500k per year 100 Tayside Contracts - leave in March 2027, and then introduce an efficiency savings target for the Roads Maintenance Partnership 100 100 Tayside Contracts - leave in March 2027, and then introduce an efficiency savings target for Facilities Management 25 25 Change of fuel type 100 Pullar House - income target from attracting further external organisations 50 100 100 Cease membership of COSLA 90 Cease membership of Scotland Excel 115 Procurement Savings - savings target from increased procurement capacity. 100 Business improvement external consultancy - savings target. 100 250 500 Page 52 of 138
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APPENDIX (iii)cont. APPENDIX (iv) Negotiate a reduction in charges from Dundee City Council for servicing of joint organisations. 100 Savings generated by disposal of unused council properties and land/increased income by bringing empty properties back into use. 100 100 Increase the second homes and long-term empty homes levy to 300% of council tax. 1,125 1,125 Council-wide efficiency target - including review of committee reporting cycles to ensuring best use of officer and Council resources. 2,000 2,000 2,200 Efficiencies through greater use of AI. 500 500 Increasing Slippage Target to 6.5%. 600 Reduce pay award pressure assumption for financial year 2027/28 by 0.5% to 2.5%. 1,500 TOTAL ADDITIONAL BUDGET REDUCTIONS / INCOME PROPOSALS 6,169 7,007 4,775 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP CORPORATE PLAN 2022 - 2028 26/27 27/28 28/29 ADDITIONAL EXPENDITURE PROPOSALS £'000 £'000 £'000 TACKLING POVERTY Citizens Advice Bureau Financial support for Perth CAB. Other additional in kind support to be offered such as office accommodation. (non-recurring) 207 207 TACKLING CLIMATE CHANGE AND SUPPORTING SUSTAINABLE PLACES Grass-cutting Recurring funding to reverse previously agreed reduction in grass cutting. (recurring) 380 Grass-cutting One off funding required to reverse previously agreed reduction in grass cutting to purchase new equipment. (non-recurring) 600 DEVELOPING A RESILIENT, STRONGER AND GREENER LOCAL ECONOMY Page 53 of 138
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APPENDIX (iv)cont. Rural Events Fund Funding to support rural events, recognising the important role they play in rural economic and community development. Introduction of revised application criteria so that existing events can also apply. (recurring) 50 Micro business grants scheme Restart of a successful scheme from previous years to help local businesses access funding for growth. (non-recurring) 250 Small business interest-free loans scheme To be set up during 2026/27 to commence from April 2027, potentially administered by an external organisation. (non-recurring) 1,000 Growbiz Support to bring former Coupar Angus Cycling Hub back into use (non- recurring) 100 Town & City Centre Hit Squad Funding to beautify the town and city centres (recurring) 113 ENABLING OUR CHILDREN AND YOUNG PEOPLE TO ACHIEVE THEIR FULL POTENTIAL Instrumental Music Service Reversal of previously agreed cut to staffing budget (Recurring) 188 Educational Psychology Service Improve referral and diagnosis pathway in the educational psychology service (non-recurring, from transformation reserve) 100 PROTECTING AND CARING FOR OUR MOST VULNERABLE PEOPLE Combatting Financial Scams Funding to maintain existing officer resource to help stop elderly and vulnerable residents from becoming victims of financial scams. (non recurring) 50 50 SUPPORTING AND PROMOTING PHYSICAL AND MENTAL WELLBEING LAL - Community Halls Funding to support the ongoing operation of community halls while local groups explore the possibility of Community Asset Transfers. (non- recurring) 25 CPK - Library Funding Funding to permanently reverse the proposed closures of Comrie, Scone, Alyth, Birnam, Auchterarder, Pitlochry, and North Inch libraries. (recurring) 280 Page 54 of 138
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APPENDIX (iv)cont. CPK - Library Funding Funding to maintain opening hours of AK Bell, Blairgowrie, Aberfeldy, Kinross & Crieff Libraries. (recurring) 90 CPK Funding to maintain services and opening hours of Perth Art Gallery and Perth Museum (recurring) 109 Access to Curling Initiative Funding to support increased participation in curling by young people across Perth & Kinross. (non-recurring) 25 WORKING IN PARTNERSHIP WITH OUR COMMUNITIES Community Investment Fund Funding to support local community projects. (non-recurring) 300 Feasibility study into new Ballinluig/Stanley/Bertha Park Integrated Transport Hub Railway Station/Bus Interchange/Park&Ride to help our communities access more environmentally friendly transport options. (non-recurring) 30 Kinross Railway Funding for a feasibility study into the reintroduction of a railway line and station to Kinross. (non-recurring) 30 Bloom/Path/Friends of Cemeteries Groups Core funding to support Perth & Kinross wide fundraising efforts to bring in funding to keep our communities looking beautiful. (non recurring) 20 20 Community Asset Transfers additional funding to support the transfer of Council owned assets to community groups by providing funding for remedial physical works to bring buildings up to an adoptable standard. (non-recurring) 250 War memorial cleaning To ensure on-going respect is shown to those who gave the ultimate sacrifice (non-recurring) 50 Management Plan for Rumbling Bridge Gorge To ensure completion of the partially completed management plan for the Devon Gorge in 2026/27 (non-recurring) 50 Crieff Regeneration Funding Grant to Creative Crieff to support regeneration efforts in Crieff. (non recurring) 60 60 Unadopted Roads Funding to top up the unadopted roads budget to assist communities in bringing unadopted roads up to an adoptable standard. (non-recurring) 100 Road Safety External resource to assist with backlog of projects (non- recurring) 250 Road Improvements Funding to support repairs to the road network i.e. potholes (non- recurring from car park reserve 26/27 only) 1,000 Page 55 of 138
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APPENDIX (iv)cont. Road Improvements Funding to support repairs to the road network i.e. potholes (recurring) 1,000 1,000 Road Reclamation Programme Funding for a programme to reclaim existing roads and pavements currently covered by overgrown verges. This programme will make rural routes safer by increasing the carriageway width for pedestrians, cyclists, horse-riders and vehicles. (non-recurring) 400 400 400 Improvements to Ruthven Road - when the roads over the River Isla are impassable due to flooding, this road (located in Angus Council area) is a lifeline for residents in Alyth and Blairgowrie, and for residents elsewhere seeking to access services there, and by buses which use this as a diversion. This would provide funding to include passing places and widening of 'pinch points' on the road (non-recurring). 120 Funding for High Priority Road safety projects in Kinross-shire Within Ward 8, there are 29 High Priority road safety projects. 7 of these have an environmental scoring between 27 and 7. All but one has a collision and casualty record. This funding is to ensure delivery of these High Priority projects (non-recurring) 55 Roads Reactive Maintenance Further investment in ditch and gully clearing in recognition (recurring) 80 Sauchie Road Footway Improvements and safety barriers at bridge area (non-recurring) 30 Road Sign Cleaning Sign clearing – B, C and unclassified Roads £20,000, Clearance of vegetation at signs £10,000. (non-recurring) 30 New Grit Bins Funding to support new grits bins in areas that don't currently have them to help residents with community winter resilience. (non-recurring) 20 New Bus Shelters/Stops Funding to install new bus shelters/stops and associated infrastructure e.g. dropped kerbs, raised kerbs, etc. (non-recurring) 120 ORGANISED TO DELIVER Every Penny Counts Initiative Funding to support the implementation of suggestions by Council staff to improve the efficiency and operation of Council services. (non-recurring, funded from transformation reserve) 100 Business Improvement Funding to provide external consultancy to support transformation and Council efficiency. (non-recurring, funded from transformation reserve) 100 100 TOTAL ADDITIONAL EXPENDITURE PROPOSALS 4,897 3,197 1,905 Page 56 of 138
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APPENDIX (v) PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP 2026/27 COUNCIL TAX CALCULATION 2026/27 £'000 £'000 2026/27 Provisional Revenue Budget 527,619 Adjustments: Reject Expenditure Pressures (Appendix i) (62) Reject Savings (Appendix ii) 3,667 Additional Savings Proposals (Appendix iii) (6,169) Additional Expenditure Proposals (Appendix iv) 4,897 2,333 2026/27 Updated Provisional Revenue Budget 529,952 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (1,426) Contribution from Service Concession Scheme (5,000) Contribution to unearmarked Reserves included in this Amendment 901 Contribution from earmarked Reserves included in this Amendment (4,155) (405,445) AMOUNT TO BE LEVIED FROM COUNCIL TAX 124,507 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 76,060 FINAL 2026/27 BAND D COUNCIL TAX £ 1,636.95 INCREASE (2025/26 FINAL BAND D COUNCIL TAX £1,537.04) £ 99.91 PERCENTAGE INCREASE 6.5% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Transformation and Workforce Management Reserves 300 Car Park Reserve 1,000 Page 57 of 138
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APPENDIX (vi) APPENDIX (v) Revenue Grants 2,855 4,155 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP 2027/28 COUNCIL TAX CALCULATION 2027/28 £'000 £'000 2027/28 Provisional Revenue Budget 537,371 2027/28 Opening Deficit (5,615) Recurring impact of 2026/27 proposals (1,822) Adjustments: Reject Expenditure Pressures (Appendix i) (1,492) Reject Budget Reductions / Additional Income (Appendix ii) 380 Additional Savings Proposals (Appendix iii) (7,007) Additional Expenditure Proposals (Appendix iv) 3,197 (4,922) 2027/28 Updated Provisional Revenue Budget 525,012 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (678) Contribution from Service Concession Scheme (4,000) Contribution to unearmarked Reserves included in this Amendment 8,099 Contribution from earmarked Reserves included in this Amendment (1,837) (394,181) AMOUNT TO BE LEVIED FROM COUNCIL TAX 130,831 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 76,850 FINAL 2027/28 BAND D COUNCIL TAX £ 1,702.43 INCREASE (2026/27 FINAL BAND D COUNCIL TAX £1,636.95) £ 65.48 Page 58 of 138
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APPENDIX (vi)cont. APPENDIX (vii) PERCENTAGE INCREASE 4.0% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Transformation and Workforce Management Reserves 100 Revenue Grants 1,737 1,837 PERTH AND KINROSS COUNCIL 4 MARCH 2026 REVENUE BUDGET 2026/27, 2027/28 AND 2028/29 REVENUE BUDGET AMENDMENT - INDEPENDENT GROUP 2028/29 COUNCIL TAX CALCULATION 2028/29 £'000 £'000 2028/29 Provisional Revenue Budget 554,345 2027/28 Opening Deficit (5,615) 2028/29 Opening Deficit (12,721) Recurring impact of 2026/27 proposals (1,822) Recurring impact of 2027/28 proposals (6,759) Adjustments: Reject Expenditure Pressures (Appendix i) (5,586) Reject Budget Reductions / Additional Income (Appendix ii) 73 Additional Budget Reductions / Income Proposals (Appendix iii) (4,775) Additional Expenditure Proposals (Appendix iv) 1,905 (8,383) 2028/29 Updated Provisional Revenue Budget 519,045 Funding Total Revenue Funding (390,527) Council Tax Second Home / Long Term Empty Properties (3,338) Capital Grants (1,600) Council Tax Single Person Discount (300) Net Contribution to / (from) Reserves included in the Provisional Budget (149) Contribution from Service Concession Scheme (3,000) Contribution to unearmarked Reserves included in this Amendment 18,343 Contribution from earmarked Reserves included in this Amendment (717) (381,288) Page 59 of 138
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APPENDIX (vii)cont. AMOUNT TO BE LEVIED FROM COUNCIL TAX 137,757 TAX BASE BAND D EQUIVALENT PROPERTIES (1.75% Non Collection) 77,806 FINAL 2028/29 BAND D COUNCIL TAX £ 1,770.52 INCREASE (2027/28 FINAL BAND D COUNCIL TAX £1,702.43) £ 68.09 PERCENTAGE INCREASE 4.0% Excluding Water and Waste Water charges determined by Scottish Water. Use of Earmarked Reserves Revenue Grants 717 (There followed a recess, and the meeting reconvened at 2.00pm.) Note: The Mover and Seconder of the Motion agreed to make the following adjustments / clarifications in relation to the Motion: From the Liberal Democrat Group: £50,000 (2026/27) and £50,000 (2027/28) non-recurring funding towards Link Worker; £150,000 (2026/27) non-recurring funding towards Flood Protection Grants; £80,000 (2026/27) non-recurring funding towards Landlord Initiatives; A non-recurring funding of £10,000 (2026/27) towards Bloom Groups (Take a Pride in P&K); £20,000 (2026/27) non-recurring funding towards Bloom Groups; £50,000 (2026/27) and £50,000 (2027/28) non-recurring funding towards Rural Employment Incentive; £20,000 (2026/27) and £20,000 (2027/28) non-recurring funding towards TRACKS; £50,000 (2026/27) non-recurring funding towards Rumbling Bridge Management Plan; Non-recurring funding of £16,000 (2026/27) towards Satellite Food Hubs; £150,000 (2026/27) non-recurring funding towards Maintenance of Playparks; £100,000 (2026/27) non-recurring funding towards Auchterarder MUGA; £15,000 (2026/27) and £15,000 (2027/28) non-recurring funding towards A&A Connected; £50,000 (2026/27) non-recurring funding towards Visitor Rangers; £40,000 (2026/27) and £50,000 non-recurring funding towards Toxic Masculinity. Page 60 of 138
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From the Independent Group: £15,000 (2027/28) and £15,000 (2028/29) non-recurring funding towards Creative Crieff (Experience Crieff); From the Conservative Group: £50,000 (2026/27) non-recurring funding towards War Memorials. 2025/26 2026/27 2027/28 Link Worker 50,000 50,000 - Non-recurring Flood Protection Grants 150,000 - - Non-recurring Landlord Initiatives 80,000 - - Non-recurring Bloom Groups (Take a Pride in P&K) 10,000 - - Non-recurring Bloom Groups 20,000 - - Non-recurring Rural Employment Incentive 50,000 50,000 - Non-recurring TRACKS 20,000 20,000 - Non-recurring Rumbling Bridge Management Plan 50,000 - - Non-recurring Satellite Food Hubs 16,000 - Non-recurring Maintenance of Playparks 150,000 - - Non-recurring Auchterarder MUGA 100,000 - - Non-recurring A&A Connect 15,000 15,000 - Non-recurring Visitor Rangers 50,000 - - Non-recurring Toxic Masculinity 40,000 50,000 - Non-recurring Creative Crieff (Experience Crieff) - 15,000 15,000 Non-recurring War Memorials 50,000 - - Non-recurring Revenue Grants Headroom Climate Change 465,000 56,000 246,000 Unearmarked Reserves 84,000 200,000 15,000 851,000 200,000 15,000 Page 61 of 138
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In accordance with Standing Order 21.6, a roll call vote was taken. 5 Membersvoted for the 2nd Amendment as follows: Bailie C McLaren, Councillors L Barrett, P Barrett,W Robertson and A Watt. 5 Members voted for the 3rd Amendment as follows: Provost X McDade, Bailies A Bailey and R Brock, Councillors D Cuthbert and C Stewart. 30 Members abstained as follows: Depute Provost A Parrott, Bailies C Ahern and M Williamson, Councillors K Allan, H Anderson, B Brawn, S Carr, A Chan, S Donaldson, E Drysdale, J Duff, A Forbes, M Frampton, N Freshwater, K Harvey, D Illingworth, I James, N Khogali, G Laing, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, C Shiers, F Smith, G Stewart, R Watters and J Welch. In terms of Standing Order 21.2, Provost X McDade exercised his casting vote in favour of the 3rd Amendment. The 3rd Amendment was therefore carried and became the 2nd Amendment. This was then put against the 1st Amendment. 13 Members voted for the 1st Amendment as follows: Bailie C Ahern, Councillors K Allan, H Anderson, B Brawn, A Chan, J Duff, A Forbes, N Freshwater, D Illingworth, I James, N Khogali, C Shiers and F Smith. 5 Members voted for the 2nd Amendment as follows: Provost X McDade, Bailies A Bailey and R Brock, Councillors D Cuthbert and C Stewart. 22 Members abstained as follows: Depute Provost A Parrott, Bailies C McLaren and M Williamson, Councillors L Barrett, P Barrett, S Carr, S Donaldson, E Drysdale, M Frampton, K Harvey, G Laing, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, W Robertson, G Stewart, A Watt, R Watters and J Welch. The 1st Amendment was therefore carried and became the substantive Amendment which was then put against the Revised Motion. 22 Members voted for the Revised Motion as follows: Depute Provost A Parrott, Bailies C McLaren and M Williamson, Councillors L Barrett, P Barrett, S Carr, S Donaldson, E Drysdale, M Frampton, K Harvey, G Laing, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, W Robertson, G Stewart, A Watt, R Watters and J Welch. Page 62 of 138
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13 Members voted for the Amendment as follows: Bailie C Ahern, Councillors K Allan, H Anderson, B Brawn, A Chan, J Duff, A Forbes, N Freshwater, D Illingworth, I James, N Khogali, C Shiers and F Smith. 5 Members abstained as follows: Provost X McDade, Bailies A Bailey andR Brock, Councillors D Cuthbert and C Stewart. Resolved: In accordance with the Revised Motion. (There followed a recess, and the meeting reconvened at 4.10pm). 5. Strategic Investment and Composite Capital Budget Update 2026/27 to 2031/32 There was submitted a report by Strategic Lead – Finance and Business Support (26/55)outlining (1) the strategic context within which the Council’s Capital Budget is set, (2) the progress to date in developing the Council’s Asset Management Plans, (3) detailing the budget proposals for the Composite Capital Programme for the six years from 2026/27 to 2031/32, and also (4) including an update on and seeking approval for further development of the Perth Eco-Innovation Park. Motion by Councillor E Drysdale and Councillor S Donaldson Approve the recommendations outlined in Report 26/55. Amendment by Councillor C Stewart and Bailie A Bailey In accordance with the Motion but with the following additions: 1. Consistent with the Council’s approved approach to investment proposals, instruct officers to develop alongside the Strategic Investment Advisory Group a Strategic Business Case for the provision of Ice Facilities in Perth. The Strategic Business Case would take cognisance of both the capital and revenue costs of any proposal. Subject to confirmation of the Strategic Business Case, the funding would be included within an Outline Business Case for inclusion in the approved Capital Budget. This Strategic Business Case would be considered alongside the previous work undertaken by officers in the lead up to the decision of Council in September 2024. Page 63 of 138
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2. Provides the capital funding of £1.5 million to take forward the West Kinfauns / Walnut Grove Park and Choose. 3. Establishes a new asset management programme for 3G Community Sports Pitch Funding with an investment of £5 million. 4. Provides £1 million of additional funding towards Structural Maintenance – specifically the Muirs/Lethangie Road, Kinross This additional expenditure to be funded by additional borrowing. In accordance with Standing Order 17.1, Councillor G Laing moved a procedural motion, seconded by Councillor K Allan, proposing that the item of business be deferred to a later date. (There followed a recess and the meeting reconvened at 5.25pm). (Councillor N Freshwater left the meeting at this point). In accordance with Standing Order 17.3, the procedural motion was put to a majority agree/disagree vote. 2 Membersvoted for the motion as follows: Councillors K Allan and G Laing. 37 Members voted against the motion as follows: Provost X McDade, Depute Provost A Parrott, Bailies C Ahern, A Bailey, R Brock, C McLaren and M Williamson, Councillors H Anderson, L Barrett, P Barrett, B Brawn, S Carr, A Chan, D Cuthbert, S Donaldson, E Drysdale, J Duff, A Forbes, M Frampton, K Harvey, D Illingworth, I James, N Khogali, I MacPherson, C Mair, S McCole, I Massie, T McEwan, J Rebbeck, W Robertson, C Shiers, F Smith, C Stewart, G Stewart, A Watt, R Watters and J Welch. Resolved: The item of business would not be deferred. In terms of Standing Order 21.3 a roll call vote was taken between the original motion and amendment. 21 Members voted for the Motion as follows: Depute Provost A Parrott, Bailies C McLaren and M Williamson, Councillors L Barrett, P Barrett, S Carr, S Donaldson, E Drysdale, M Frampton, K Harvey, I MacPherson, C Mair, I Massie, S McCole, T McEwan, J Rebbeck, W Robertson, G Stewart, A Watt, R Watters and J Welch. 17 Members voted for the Amendment as follows: Provost X McDade, Bailies C Ahern, A Bailey and R Brock, Councillors K Allan, H Anderson, B Brawn, A Chan, D Cuthbert, J Duff, A Forbes, D Illingworth, I James, N Khogali, C Shiers, F Smith and C Stewart. 1 Member abstained as follows: Page 64 of 138
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Councillor G Laing. Resolved: In accordance with the Motion as follows: (i) The progress made to date on developing the Council’s Asset Management Plans, as detailed in Section 5 of Report 26/55, be noted. (ii) The progress to date on the previously approved Perth Eco-Innovation Park, and approved programme of works, delivered through a staged gateway approach and the use of £1.5 million of the approved budget to progress the design stage of the project, as detailed in Section 6 of Report 26/55, be noted. (iii) The adjustments to the current approved Capital Budget from 2025/26 to 2030/31, set out in Section 7 of Report 26/55, be approved. (iv) The estimated new capital resources available for 2031/32 and the proposed expenditure allocations, as detailed at Section 8 of Report 26/55, be approved. (v) The six-year Composite Capital Budget for 2026/27 to 2031/32, as shown at Appendix III and IV of Report 26/55, be approved. 6. Valedictory – Jacquie Pepper The Provost, Councillors E Drysdale, J Duff and P Barrett referred to the upcoming retirement of Jacquie Pepper, Chief Officer/Director – Integrated Health and Social Care and wished her all the best for the future. J Pepper thanked members for their wishes. Page 65 of 138
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PERTH AND KINROSS COUNCIL OUTSTANDING BUSINESS STATEMENT (OBS) (Report No. 26/114) Please note that this statement sets out outstanding decisions of Council / this committee / sub-committee along with an update and estimated completion date. Actions which are overdue are shaded for ease of reference. Where an update reflects that an action is complete then agreement will be sought to its removal from the OBS. No Date / Minute Reference / Report Number Subject Title Outstanding Action Update Lead Officer /Service Action Due/ completed Action Expected 1. 14 January 2026. Item 4. Motion – Buskers Code of Conduct Officers to prepare a Buskers Code of Conduct for Perth City Centre and to bring a draft code of conduct for approval by Council for consultation with businesses and residents. Working group with key stakeholders being established. Report to be submitted to Council on 17 June. Strategic Lead – Housing and Communities DUE 17 June 2026 2. 14 January 2026. Item 10 Chief Social Work Officer Annual Report 2024-25 Elected Member Briefing Note to be circulated to all members providing more detail on the absence rates across social work/social care. Elected Member Briefing Note issued 13 April 2026. Strategic Lead – Children, Families and Justice COMPLETE 13 April 2026 4 Page 67 of 138
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No Date / Minute Reference / Report Number Subject Title Outstanding Action Update Lead Officer /Service Action Due/ completed Action Expected 3. 25 February 2026. Item 6 Climate Change Annual Report – Year 4 More detailed figures to be circulated regarding the benefits of schools built to Passivhaus standards. Elected Member Briefing Note issued 25 February 2026. Strategic Lead – Property Services. COMPLETE February 2026 4. 25 February 2026. Item 6 Climate Change Annual Report – Year 4 Date of Council policy decision on building to Passivhaus standards where possible on recent new builds to be circulated to all members for information. All new non-domestic Council buildings are delivered to Passivhaus standard, subject to affordability and deliverability considerations, as set out through the Council approved Climate Change Strategy and Circular Economy Strategy. Strategic Lead – Property Services. COMPLETE April 2026 5. 25 February 2026. Item 4(i) Motion Regarding Visitor Levy Scheme. Elected Member briefing note to be circulated to all members in April 2026 with the latest detail on the position prior to a report submitted to Council in June 2026. Elected Member briefing note to be issued by the end of April 2026. Elected Member briefing session arranged for 11 May 2026. Strategic Lead – Economy, Development and Planning. DUE 30 April 2026. Page 68 of 138
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No Date / Minute Reference / Report Number Subject Title Outstanding Action Update Lead Officer /Service Action Due/ completed Action Expected 6. 25 February 2026. Item 9 Holiday Proposal for World Cup Community groups to be encouraged to apply for grant funding for appropriate events connected with celebrating Scotland’s participation in the world cup and in line with Motion agreed by Council on 25 February. A cross-Council project group has been established, and an online application process and form have been developed. The call for applications is anticipated to open on 20 April, with a closing date of 4 May. Funding awards are expected to be issued in the week commencing 11 May. Promotional activity will be undertaken ahead of launch and during the application period. Strategic Lead – Housing and Communities / Strategic Lead – Economy, Development and Planning. COMPLETE April 2026. Page 69 of 138
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Perth and Kinross Council Date of Meeting: 29 April 2026 Report Title: LDP3 Development Plan Scheme Report Number: 26/115 Report Author: Brenda Murray, Development Plans Team Leader Organisational Lead: Serge Merone - Strategic Lead – Economy, Development and Planning ___________________________________________________________________ 1. Purpose 1.1 This report seeks approval for the updated statutory Development Plan Scheme (DPS) for the preparation of the next Perth and Kinross Local Development Plan (LDP3). The last update was approved by the Economy and Infrastructure Committee on 28 May 2025 (report 25/128 refers). 1.2 Sections 1. Purpose 2. Recommendation(s) 3. Background/Context 4. Progress 5. Proposals 6. Conclusion 7. Impact Value Assessment 8. Appendices 2. Recommendation(s) It is recommended that the Council: 2.1 approves the updated Perth & Kinross Council Development Plan Scheme 2.2 authorises the Strategic Lead – Economy, Development and Planning to submit the Scheme to the Scottish Ministers; 5 Page 71 of 138
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3. Background/Context 3.1 A Development Plan Scheme is a document setting out a planning authority’s programme for preparing and reviewing their Local Development Plan (LDP). The Planning Authority is required to update its Development Plan Scheme at least annually. The last update was approved by the Economy and Infrastructure Committee on 28 May 2025 (report 25/128 refers). 3.2 The annual update offers a chance to review and refine the timetable for the remaining stages of the plan’s preparation. This is valuable because the timetable represents our best estimate of when each stage will be completed and is therefore indicative, requiring regular monitoring and adjustment. 3.3 The Development Plan Scheme must set out, by financial quarter, when each component of the Local Development Plan will be prepared. Any changes to this timetable must, by law, be reported in future Development Plan Schemes, along with an explanation of why the timetable has been altered. 4. Progress 4.1 A substantial programme of work is required to prepare the Proposed Plan. This includes: assessing the Call for Sites; producing Locality Profiles; completing the Urban Capacity Study; undertaking the Open Space Audit and developing the Open Space Strategy; preparing the Forest and Woodland Strategy; conducting a Green Belt Review; identifying Nature Networks; carrying out Local Place Plans site assessments; completing the Transport Appraisal; preparing the Housing Need and Demand Assessment (HNDA) and the Gypsy/Travellers Housing Needs Assessment; updating the Retail Study; identifying 20-minute neighbourhoods; developing local policies and place-based proposals; undertaking the Strategic Environmental Assessment; and preparing the Plan’s Delivery Programme. 4.2 Good progress has been made across many of these workstreams. Key updates include: • Locality profile work has advanced to a stage that now supports development of the draft spatial strategy. • Site assessments are underway, enabling consideration of potential site options. • The audit of all LDP2 designated open spaces is complete, and the Open Space Strategy is currently being prepared for Committee consideration in August 2026. • The Forest and Woodland Strategy is in preparation and is also scheduled for Committee in August 2026. • The Gypsy/Travellers Housing Needs Assessment is being undertaken and is expected to be completed by July 2026. • The Green Belt Review methodology has been drafted and issued to stakeholders for comment. • The Retail Study update was completed in April 2026. • The Housing Need and Demand Assessment (HNDA) is being prepared and is scheduled for completion in Autumn 2026. Page 72 of 138
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4.3 Although substantial progress has been made across most workstreams, a revision to the timetable is now necessary. The Proposed Plan will be presented to Council in the first quarter of 2027 rather than December 2026. Consequently, the anticipated adoption of LDP3 will move from late 2027 to early 2028. 4.4 The delay stems from slower‑than‑expected progress of the Evidence Report through the gate check process. When the current Development Plan Scheme was published in May 2025, the Evidence Report for LDP3 had been submitted to the DPEA for gate check assessment to determine its sufficiency for progressing to the Proposed Plan stage. On 8 July 2025, the DPEA advised that further work was required and requested resubmission of the Evidence Report. A revised Evidence Report, addressing the Reporter’s recommendations, was approved by Council on 10 December 2025 (report 25/354) and subsequently submitted to the DPEA for assessment on 30 January 2026. 4.5 Following the resubmission, the Reporter issued a further request for information on 16 March 2026 relating specifically to housing matters. The Reporter asked whether, in light of the updated household projections based on the 2022 Census—published on 16 December 2025—“the Evidence Report as submitted continues to provide sufficient basis (particularly in relation to the indicative Local Housing Land Requirement (iLHLR)) to proceed to prepare the Proposed Plan,” or whether this new information indicates a level of change that would require the planning authority to withdraw from the current gate check. 4.6 A response will be provided confirming that the Evidence Report remains a sufficient basis on which to proceed to the Proposed Plan stage, for the following reasons: • The submitted Evidence Report recognises that new or updated data, such as 2022 Census outputs, would become available before the Local Housing Land Requirement (LHLR) is finalised in the Proposed Plan, and that this may result in a final LHLR that differs from the indicative figure set out in the Evidence Report. • A review of the Housing Need and Demand Assessment (HNDA) is currently underway, and this provides the appropriate mechanism for considering the updated population projections alongside other refreshed inputs. • The updated information was published after the Council’s approval of the Evidence Report 4.6 If the Reporter does not consider the above reasoning sufficient, this could affect the timetable for the remaining stages of plan preparation. Once the Reporter’s assessment is received, the timetable will be reviewed and, if required, an updated Development Plan Scheme will be presented to the Economy and Infrastructure Committee. The DPEA has contacted other planning authorities on this same issue, and it has been escalated through the Heads of Planning Group, who have discussed the matter with the Scottish Government. Page 73 of 138
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Proposals 5.1 Given the above, the updated Development Plan Scheme in Appendix 1 (pages 4 and 5) has been amended to incorporate the revised timetable, reflecting the new target date for presenting the Proposed Plan to Council in the first quarter of 2027 and the anticipated adoption date in early 2028. As noted in paragraph 3.2, the timetable represents our best estimate of when each stage of plan preparation will be reached, and any opportunities to accelerate progress towards adoption will be taken wherever possible. 6 Conclusion 6.1 Despite the setback of having to resubmit the Evidence Report, significant progress has been made in preparing LDP3. The Scottish Government expects all Local Authorities to have a new style Local Development Plan adopted by May 2028, and the Council currently remains on track to meet this requirement. 7. Impact Value Assessment https://www.pkc.gov.uk/media/55038/LDP3-Development-Plan-Scheme-April- 2026/pdf/LDP3_Development_Plan_Scheme_April_2026.pdf?m=1774334812 580 8. Appendices 8.1 Appendix 1 - Perth & Kinross Development Plan Scheme 2026 Page 74 of 138
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rgr PERTH & KINROSS C O U N C IL Perth and Kinross DEVELOPMENT PLAN SCHEME Programme for Local Development Plan 3: April 2026 DRAFT 5 Page 75 of 138
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Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 1 Development Plan Scheme The Development Plan Scheme is a statement setting out Perth & Kinross Council’s timetable for the preparation of the next development plan. Under statutory guidance, all planning authorities are required to publish annually a Development Plan Scheme. The Development Plan Scheme will set out to include: • an explanation of what the Local Development Plan is; • a timetable for the preparation of the next plan, Local Development Plan 3; • community engagement in the planning process and how relevant stakeholders, including residents of Perth and Kinross, can get involved. OVERVIEW Page 76 of 138
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Local Development Plan The Scottish Government requires every planning authority to prepare development plans for their area. The Development Plan is at the heart of the planning system setting out policies and proposals to guide the development, management and use of land. The Plan sets out a vision and a framework for future development; addressing needs and opportunities in relation to housing, economy, infrastructure, community facilities, safeguarding and enhancing environmental and landscape assets, the emerging needs of climate change and achieving well designed places for the residents, communities and businesses of Perth and Kinross. To support the preparation of the next Local Development Plan, there are a range of other plans and strategies that interlink with the LDP. National Planning Framework (NPF4) Community Plan & Corporate Plan Regional Spatial Strategy Government advice & strategies Local Housing Strategy Local Place Plans The Development Plan National Planning Framework 4 Tayside Local Biodiversity Action Plan + Local Development Plan Strategies including Forest & Woodland, Open Space, Food Growing Climate Change Strategy & Action Plan Mobility Strategy Perth City Plan Planning Guidance Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 2 Page 77 of 138
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National Planning Framework 4 (NPF4) LDP3 Process The Planning (Scotland) Act 2019 has introduced a number of changes to the key steps for preparing a Local Development Plan. Preparation of a new-style LDP will include: • Evidence gathering and early community and stakeholder engagement leading to an Evidence Report. • Submission of the Evidence Report to Scottish Ministers for an independent Gate Check. • Collaborative plan preparation, leading to publication of the Proposed Plan for consultation. • Submission of the Proposed Plan to Scottish Ministers for an independent examination of outstanding issues. • Adoption of the Local Development Plan National Planning Framework 4 was adopted in February 2023 and forms part of the Development Plan. It covers the period from its adoption to 2045 with 10 year reviews. It is a long term strategy that plans for development and investment in infrastructure; and identifies national developments and other strategically important opportunities in Scotland. The NPF contains both spatial and thematic planning policies and sets out the national policy position for land use planning. It will be used to determine planning applications. The New Plan: LDP3 Supporting assessments Alongside National Planning Framework 4, the Local Development Plan (LDP3) will be the main document which will influence future built development in Perth and Kinross. As NPF4 contains planning policy, new LDPs will be place-based documents with emphasis on maps, site briefs and masterplans, with minimal policy wording. The policies and proposals within the LDP are to be focused on places and locations, while National Planning Framework 4 will provide overarching thematic policies for decision making. There are several assessments that must be undertaken to support the preparation of a new Local Development Plan. They are an integral part of the plan-making process and should inform, and be informed by, the plan as it is being prepared. These include: • Strategic Environmental Assessment (SEA) • Public Sector Equality Duty Assessment • Fairer Scotland Duty Assessment • Habitats Regulations Appraisal Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 3 Page 78 of 138
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Change LDP3 Timeline The LDP3 Timeline opposite shows the timescales for each stage of the plan making process. Key to note is the extended timescale for preparation of the Proposed Plan. The previous Development Plan Scheme (October 2024) anticipated that the Proposed Plan would be published during Q4 2025 (January - March), however it is now programmed for Q4 2026 (January - March). There is a significant amount of work to be undertaken to prepare the Proposed Plan. Many of the tasks ahead will require collaboration both internally, and with key agencies, communities, infrastructure providers, the development industry, and landowners. This pathway for collaboration has already been established through the earlier engagement for the Evidence Report. Preparation of the Evidence Report, followed by a stage that allocates more time to engage and work collaboratively to prepare the Proposed Plan, should produce a plan that meets with greater consensus at the Examination stage. This has led us to revise the timetable to allocate more time to preparing the Proposed Plan and less time for the period from Examination to Adoption. The LDP3 Timeline on the next page shows the timescales for each stage of the plan making process. Key to note is the change to the date for publishing the Proposed Plan. The previous Development Plan Scheme (May 2025) anticipated that the Proposed Plan would be published during Q3 2026/7 (October - December 2026), however it is now programmed for Q4 2026/7 (January – March 2027). This will have a knock- on effect on the expected adoption of LDP3 pushing it from late 2027 to early 2028. There is a significant amount of work to be undertaken to prepare the Proposed Plan and whilst good progress has been made, a change in the timetable is required. The reason for the delay is that progress of the Evidence Report through the gate check process has been slower than anticipated and there have been several vacancies within the Development Plan Team over the last 12 months. The Scottish Government expectation is that all planning authorities will have replaced their current Local Development Plan with a new style Local Development Plan by May 2028. Development Plan Schemes must specify the numbered Quarter (Q) and the year in which the planning authority expects to publish certain elements of the Local Development Plan process. This applies to the following stages: Publish Evidence Report Q4 2024/5 (Jan - Mar 2025) Publish Proposed Plan Q1 2027/8 (April - June 2027) Send Proposed Plan to Scottish Ministers Q2 2027/8 (July - Sept 2027) Adopt LDP3 Q4 2027/8 (Jan – Mar 2028) A detailed timeline outlining the Local Development Plan’s key stages and the types of engagement to take place is provided in the Participation Statement. Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 4 Page 79 of 138
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Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 5 Page 80 of 138
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Perth and Kinross DEVELOPMENT PLAN SCHEME April 2026 6 Mediation The Council will work with all stakeholders to discuss any issues which could lead to potential challenges/concerns throughout the plan preparation process. One method that can be used to support this is mediation, which can help aid discussions. The preparation of the Evidence Report may provide the opportunity for concerns or disputes in the evidence base to be discussed, to explore whether a potential dispute may be resolved at this stage. Mediation may be used in the latter stages of the plan preparation when the Proposed Plan is published and subject to further representations. The Council will be open to considering any requests from stakeholders to use mediation, taking into account the potential benefits in terms of saving time and cost, and fostering better relationships going forward. This could be on an informal basis or through an independent third party Local Place Plans Local Place Plans offer communities the opportunity to produce a plan for their area expressing their aspirations and ambitions for future change. They focus on the community’s proposals for the development and use of land and provide a new opportunity for communities to feed into the planning system with ideas and proposals. While the steps to prepare a Local Place Plan are set out in regulations and guidance, there is scope for different approaches to be taken. Once registered, Local Place Plans are taken into account when the Proposed Plan is being prepared. They are valuable because they help us to better understand local issues and how to meet the community’s needs. Local Place Plans may be prepared at any time; however those that are registered before summer 2026 will have most opportunity to be taken into account when preparing the Proposed Plan. Information and guidance have been published for community groups who are interested in producing their own Local Place Plan and communities can seek assistance from the Council and its partners. This process of support is designed to be flexible to respond to issues as they arise. Further information on Local Place Plans can be found here: Local Place Plans - Perth & Kinross Council (www.pkc.gov.uk/localplaceplans) Page 81 of 138
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Perth and Kinross Council Local Development Plan review Participation Statement April 2026 Page 82 of 138
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Participation Statement The Planning (Scotland) Act 2019 places an increased emphasis on up-front engagement. This means that consultation needs to be comprehensive, co-ordinated and collaborative. The Participation Statement sets out our approach to consultation and engagement associated with the review of the Perth & Kinross Local Development Plan 3 (LDP3). Our consultation commitment is set out below. Consultation Commitment Statement The LDP3 engagement and evidence building process will be: Perth and Kinross Local Development Plan review: participation statement April 2026 7 Relevant Discussions will be relevant to each group or stakeholder, including both settlement development and policies and the methods that are used to carry out those discussions. Inclusive To shape places that work for all we will proactively seek the views of all people, especially those with specific needs and those whose views are seldom heard; identify and overcome barriers to engagement and invest in the promotion of the benefits of engaging. Informed Discussions will be informed by evidence already available including data gathering and prior consultations to ensure contributions have a greater impact and are more efficient Co-ordinated A joined up approach with the rest of Council and Council strategies, will deliver greater efficiency, and help avoid consultation fatigue. Information fed back to other departments will also help deliver their priorities Collaborative Co-designing consultation and supporting community partners to carry out their own engagement work will ensure the greatest reach and response working Transparent Ongoing communication and feedback between the team and stakeholders, communities and partners will support better outcomes and promote acceptance of outcomes. Accessible Engagement events and materials for the general public must be accessible to all wherever possible, and tailored arrangements made where this is not possible. Page 83 of 138
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Participation Statement Who will be consulted? Everyone will have an opportunity to get involved and comment throughout the LDP3 in the various stages of plan preparation. Once the Proposed LDP3 has been published there will be limited opportunity for further engagement, so it is important to get involved during the earlier stages of the process to ensure your voice is heard. We will keep you updated on when events are happening by publicising them on our website, through Council social media accounts such as facebook, using email updates and through the DPS Participation Statement. Throughout the preparation of LDP3, our approach to engagement and consultation will be based on a collaborative approach, including (but not exclusively) representatives of the following: Community Planning Partners: • Jobcentre Plus • NHS Tayside • Perth & Kinross Association of Voluntary Services (PKAVS) • UHI Perth • Police Scotland • Scottish Enterprise • Scottish Fire & Rescue Service • Skills Development Scotland • Community Development Trusts • Communities of Interest • Landowners and Developers • Businesses and business groups • Locality Partnerships • Tertiary students • Older people • Communities wishing to prepare Local Place Plans Where not already specified, we will seek the views of representatives of the following particular groups of people: • children and young people • disabled people • Gypsy/Travellers • Community Councils Key agencies: • NatureScot • SEPA • Scottish Water • Scottish Enterprise • TACTRAN • NHS Tayside • Historic Environment Scotland • Scottish Forestry • Transport Scotland Perth and Kinross Local Development Plan review: participation statement April 2026 8 Page 84 of 138
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Methods for Engagement The experience of preparing previous LDPs has helped us learn how to improve the way we include the public and reach a wide range of people. We are conscious that the pandemic and the cost-of-living crises have had an impact on people, which is why we are proposing to have a mix of in person and digital platform consultation and engagement events and meetings. Proposed methods for information sharing, engagement and consultation for the preparation of LDP3 may include: • Press releases; • Social media alerts; • Information and updates on Council webpage; • Directly notifying people signed up to our updates mailing list. You can sign up here developmentplan@pkc.gov.uk • In person and online meetings and discussions; • Drop-in sessions and engagement events using the Place Standard Tool in various locations across the council area; • Engaging with under-represented groups; • Notifying neighbouring properties to sites that are being considered for inclusion within the plan; • Council Consultation Hub – online questionnaires Key Stages in the process for engaging The following section outlines the key stages of preparation and the actions that have been/will be undertaken. Perth and Kinross Local Development Plan review: participation statement April 2026 9 Page 85 of 138
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Prepare Evidence Report (commenced 2022 and ongoing through to late 2024) Identification of groups and stakeholders to be proactively engaged Early 2022 Discussion with community partners and community councils on best consultation methods Early 2022 Co-ordination with other PKC departments on delivery of engagement, including those that may not need targeting at this early stage due to recent or existing work Mid 2022 Co-ordination with other PKC departments, community councils and community development trusts to secure way forward for Local Place Plans Late 2022 Launch of online area wide place feedback platform on consultation hub December 2022 Publicity and media support for upcoming engagement activities and throughout January-August 2023 Exploration of issues of importance with communities of place and community councils through Place Standard; including tailored discussions reflecting both policies and place such as affordable housing or natural space needs January-August 2023 General opportunities for the public (including landowners and developers) for discussions on policy and place such as the online place standard or surveys on consultation hub January-August 2023 Local Place Plan invitation October 2023 Assisting Community Councils and community partners to support the delivery of inclusive engagement to support LDP work and feeding into Local Place Plans January 2023-October 2024 Targeted discussions online and in person around policy with specified communities of interest or with specific (land use) need January-December 2023 Sharing and co-ordination of information with other services and strategies including Perth People Place and Mobility Strategy Late 2023 Targeted discussions with communities of interest or need about the places they live to support the wider public consultation January-December 2023 Discussion with key agencies and PKC stakeholders on data gathered to date and future plans that may affect policies or place including capacity of education, health, water etc. Late 2023-December 2024 Evidence Report checked for compatibility with any Local Place Plans; and place-based evidence shared with communities to inform LPPs Late 2023-December 2024 Perth and Kinross Local Development Plan review: participation statement April 2026 10 Page 86 of 138
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Collation and Submission of Evidence Report for Gate Check (April 2025) Collation of information and analysis of data and consultation exercises to inform identification of sites at the next stage October 2023-December 2024 Collation, publication and submission of the Evidence Report February – March 2025 Resubmission of the Evidence Report January 2026 Perth and Kinross Local Development Plan review: participation statement April 2026 11 Page 87 of 138
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Collaborative Preparation of Proposed Plan (April 2025 to early 2027) Following gatecheck of the Evidence Report, should any additional consultation be required by the Reporter this will be carried out and the final Evidence Report resubmitted July 2025 – January 2026 Issue Call for Sites April-June 2025 Local policy options relevant to each group or stakeholder discussed to find a preferred way forward or options April 2025-September 2026 Specific policy and place ideas, including those in Local Place Plans, explored with communities and discussed with developer and landowner groups and contacts April 2025-September 2026 Place proposals analysed (draft SEA and HRA) and comments sought from specific groups previously engaged with, community councils and public at large on preferred options April 2025-September 2026 Policy and site preferences discussed with key agencies and PKC stakeholders April 2025 – September 2026 All consultation and evidence analysed; outstanding issues discussed with stakeholders and potential resolutions incorporated into the Proposed Plan Autumn 2026 Proposed Plan drafted and submitted to Council January - March 2027 Perth and Kinross Local Development Plan review: participation statement April 2026 12 Page 88 of 138
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Perth and Kinross Local Development Plan review: participation statement April 2026 13 Proposed Plan Consultation (early 2027) Proposed Plan is published alongside HRA and SEA and general consultation April - June 2027 Public events to publicise the Proposed Plan and invite representations April – June 2027 Page 89 of 138
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Examination of Proposed Plan (mid to late 2027) Review representations and prepare examination papers July - September 2027 Proposed Plan with any modifications submitted to Scottish Ministers together with a July - December 2027 summary of unresolved issues for Examination process Modify Proposed Plan (early 2028) Make requisite modifications to Proposed Plan on receipt of examination report January - March 2028 Adopt Local Development Plan (early 2028) Publish adopted Local Development Plan March 2028 Publish SEA post-adoption statement March 2028 Adopt and publish the Delivery Programme Post-March 2028 Perth and Kinross Local Development Plan review: participation statement April 2026 14 Page 90 of 138
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If you or someone you know would like a copy of this document in another language or format, (on occasion, only a summary of the document will be provided in translation), this can be arranged by contacting the Customer Service Centre on 01738 475000. You can also send us a text message on 07824 498145. All Council Services can offer a telephone translation facility. For key updates on the preparation of LDP3 please email developmentplan@pkc.gov.uk and ask to be added onto our database. (PKC Design Team - 2020167) www.pkc.gov.uk Page 91 of 138
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Perth and Kinross Council Date of Meeting: 29 April 2026 Report Title: Mid-Market Rent Proposal Report Number: 26/116 Report Author: James Ross, Affordable Housing Enabler Housing Strategy - Economy, Development and Planning Organisational Lead: Joint report by Elaine Ritchie – Strategic Lead – Housing and Communities / Serge Merone – Strategic Lead – Economy, Development and Planning ___________________________________________________________________ 1. Purpose 1.1 The purpose of this Report is to seek approval to establish a Limited Liability Partnership (LLP) to enable the Council to directly deliver affordable housing through a Mid‑Market Rent model. The Report also seeks approval to borrow £1.38 million from the General Fund and on‑lend this to the LLP to support the acquisition of an initial tranche of 13 new‑build affordable homes at Westfields, Rattray. 1.2 Sections 1. Purpose 2. Recommendations 3. Background/Context 4. Main Issues 5. Proposals 6. Conclusion 7. Impact Value Assessment 8. Appendices 2. Recommendations It is recommended that Perth and Kinross Council: 2.1 Note the decision by Housing and Social Wellbeing Committee to endorse Option 3 to establish a Limited Liability Partnership (LLP) which will enable the Council to directly deliver Mid-Market Rent; 6 Page 93 of 138
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2.2 Approve the establishment of a LLP for the delivery of a Mid-Market Rent model; 2.3 Authorise the Strategic Lead - Economy, Development and Planning, in consultation with Strategic Lead - Legal and Governance to identify and appoint the LLP’s second member; 2.4 Authorise the Strategic Lead - Economy, Development and Planning to borrow £1.38m from the general fund and lend this to the LLP to acquire 13 new build affordable homes at Westfields, Rattray, subject to satisfactory due diligence and acceptable security arrangements. 3. Background/Context 3.1 Mid-market rent (MMR) is a type of affordable housing aimed at households on low to moderate incomes who may struggle to access suitable rented accommodation. MMR homes are let under a Private Residential Tenancy (not a social tenancy), but rent levels are set at or below Local Housing Allowance (LHA) rates to ensure they remain more affordable than typical private rents. In practice, MMR acts as a tenure that bridges the gap between social rent and private rent. Applicants must meet specific eligibility criteria to be offered an MMR tenancy – criteria that can be decided by the landlord to meet local housing need. 3.2 MMR is recognised nationally as an important element of affordable housing delivery. Housing to 2040, Scotland’s long term housing strategy, includes a commitment to deliver 110,000 new affordable homes by 2032. Of these, 70% are to be for social rent, with the remaining 30% delivered through low-cost home ownership and MMR. This report’s proposal contributes to the 30% non-social rent share via MMR. 3.3 The Perth and Kinross Local Housing Strategy (LHS) 2022-2027 sets out the strategic housing priorities for the area. The LHS includes a target to deliver 210 new supply affordable homes per year, with 70% (c.150) for social rent and the remaining 30% (c.60) delivered through alternative tenures such as MMR and low-cost home ownership, reflecting national policy direction. To help deliver these targets, a Business Plan and Growth Strategy will be developed to set out an ambition for the LLP, once fully operational, to build up a Council’s MMR properties stock at a rate of around 25 new homes per year. 3.4 Within Perth and Kinross, three Registered Social Landlords (RSLs) currently provide MMR properties, with a fourth expected to deliver homes over the next five years. • Kingdom Housing Association manages 124 MMR properties across Abernethy, Perth, Scone, Blairgowrie, and Crieff. • Hillcrest Housing Association manages 87 MMR properties across Perth and Blairgowrie. • LAR Housing Trust manages 16 MMR properties in Blairgowrie. Page 94 of 138
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3.5 In addition, the current Strategic Housing Investment Plan (SHIP), includes Places for People (PfP) to deliver new MMR properties in Scone, which will add to the existing total of 227 properties. 4. Main Issues 4.1 In Perth and Kinross, demand for MMR continues to grow, particularly in areas with high housing pressure, above-average rents, and limited access to low-cost home ownership options. Current supply through partner RSLs is not keeping pace with need. 4.2 The Council must therefore adopt a more active and flexible delivery approach if MMR outputs are to meet the expectations outlined in the LHS and Strategic Housing Investment Plan (SHIP). 4.3 The Council cannot directly deliver MMR because a Private Residential Tenancy cannot be issued by a Local Authority and so currently, the delivery of MMR through the Strategic Housing Investment Plan relies entirely on RSLs that operate MMR, via their subsidiaries. 4.4 Benefits of the Council delivering MMR are that it: • Provides an affordable option for those that are unlikely to be allocated a social tenancy. Many of whom approach our housing options service for help. Thereby reducing pressures on services and providing a viable alternative in areas with high private rents. • Delivers greater flexibility and choice for those looking for their first, or last, home. Households can be offered a home with 1 bedroom more than social housing allocations would allow. • Offers greater security of tenure than compared to the private rented sector. As an established landlord with a strong track record in property management and high‑quality repairs, the Council offers tenants greater stability and reassurance than individual private landlords. 5. Proposals 5.1 The Outline Business Case, in appendix 1, sets out three potential options available to the Council to deliver MMR. Following detailed appraisal, Option 3 has been identified as the preferred option. The three options considered are: - Option 1: Do Minimum / Existing Framework - Option 2: Leasing Arrangement with an RSL - Option 3: Establish a Limited Liability Partnership (LLP) 5.2 The development of the Outline Business Case has been informed by contributions from Housing Strategy, Housing, Legal Services, Finance, and procurement. In addition, external legal support has been procured from Burness Paul to provide specialist advice. Page 95 of 138
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Officers have also engaged with Edinburgh, Fife and Stirling Councils to learn from their experience of delivering MMR, as well as partner RSLs referenced in the report. Support has also been provided by the Scottish Futures Trust, who have supplied guidance and template documentation. 5.3 A suitable site has been identified for the first phase of MMR delivery. Construction is due to commence in 2026/27 at Westfields, Rattray, a location already approved within the Strategic Housing Investment Plan (SHIP). 5.4 Subject to Council’s approval, it is anticipated that establishing the LLP will take approximately six months and external business adviser, Burness Paul, will support the full set-up process, ensuring all legal and governance requirements are met including subsidy control, conflict management, insurance, Health and Safety compliance and lettings/management arrangements. It would be important to ensure that allocations/eligibility avoid indirect discrimination and are line with Council’s priorities. A budget has also been set aside to procure external financial advice, ensuring compliance with all relevant financial regulations and the implementation of financial controls. 5.5 A financial appraisal has been completed for the initial tranche of 13 new homes, which will form the LLP’s first stock. The appraisal confirms that £1.38m will be required, alongside Scottish Government grant funding (£1,213,864), commuted sums (£220,000), and Council Tax second / empty homes income (£260,000), to support the acquisition. Further sensitivity analysis will be carried out. This capital contribution would be paid on completion of the new homes and repaid by the LLP to the Council over a 30- year period. Once the initial investment has been repaid, any surplus generated will be reinvested in delivering additional MMR properties through the LLP. 5.6 In order to set up a LLP, a second member is required. Initial discussions have taken place with Scottish Futures Trust regarding the potential role of its investment subsidiary Scottish Futures Trust Investments Limited to become that second member. The second member will sit on the Board of Members but they will not outweigh the Council in decision-making nor have any financial gain from being a Member. 5.7 Once established, a Business Plan and Growth Strategy, will be developed to detail how the LLP plans to increase its stock levels. Future approval process for these stock increases will be dictated by the source of funding: • More General Fund lending would require approval by the Council (as required by paragraph 9.4 of the Scheme of Administration). • Private investment funding would require Finance and Resources Committee approval. • Utilising Council Tax 2nd Homes, Empty Homes and/or Commuted Sums funding would require Finance and Resources Committee approval. Page 96 of 138
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5.8 At its meeting on 25 March 2026, the Housing and Social Wellbeing Committee agreed to support Mid-Market Rent (MMR) as an affordable housing model for the Council to be delivered through a Limited Liability Partnership (LLP) (Report refers 26/75). 6. Conclusion 6.1 There is a clear and growing need for Mid‑Market Rent (MMR) homes in Perth and Kinross, particularly for households who are unable to access social housing yet are priced out of the private rented sector. Current delivery arrangements are not sufficient to meet this demand, particularly in high‑pressure areas. 6.2 The Outline Business Case demonstrates that establishing a Limited Liability Partnership (LLP) provides the most effective, flexible and sustainable mechanism for the Council to directly deliver MMR, while remaining compliant with legal and regulatory requirements. This approach enables the Council to take a more active role in addressing local housing need and delivering on the ambitions set out in the Local Housing Strategy and Strategic Housing Investment Plan. 6.3 The proposed first phase of delivery at Westfields, Rattray will provide 13 new MMR homes, supported by a robust financial appraisal. The required £1.38 million Council borrowing, to be on‑lent to the LLP, will be fully repaid over a 30‑year period, including principal and interest, ensuring the Council’s investment is protected. Any future surplus generated by the LLP will be reinvested to support further MMR delivery. 6.4 Approving the recommendations within this report will allow the Council to establish a scalable and financially sustainable model for MMR delivery, increase access to affordable housing, relieve pressure on housing services, and provide greater housing choice and security for residents across Perth and Kinross. 7. Impact Value Assessment 7.1 Impact Value Assessment 8. Appendices 8.1 Appendix 1: Business Case 8.2 Appendix 2: Mid-Market Rent FAQ’s Page 97 of 138
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1 | O u t l i n e B u s i n e s s C a s e Appendix 1 Outline Business Case FOR PROPOSED CAPITAL FUNDED PROJECT Title: Mid-Market Rent Proposal - PKC Executive Sponsor: Elaine Ritchie / Serge Merone Version: Author: James Ross Date: 27/02/2026 6 Page 99 of 138
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2 | O u t l i n e B u s i n e s s C a s e Executive Summary 1. Strategic Case 1.1. Project Objectives Mid-market rent (MMR) is a type of affordable housing aimed at households on low to moderate incomes, designed to help them access affordable rented accommodation. Homes for MMR are let under a Private Residential Tenancy (not a social tenancy) however rent levels should be at or below Local Housing Allowance (LHA) rates, to ensure that they are more affordable than private rents. Broadly it can be seen as a tenure that bridges the gap between social rent and private rent. There are criteria that must be met to be offered an MMR tenancy. National context MMR is seen as an important component of the delivery of new affordable housing nationally. Housing to 2040, Scotland’s long term national housing strategy, sets out a target to deliver 110,000 new affordable homes by 2032, with 70% of these for social rent, and the remaining 30% to be made up of low-cost home ownership and MMR properties. With the slowdown of low-cost home ownership schemes available, only 5 new shared equity units planned within the currently agreed Strategic Housing Investment Plan and the suspension, now lifted, of the Scottish Government’s Open Market Shared Equity (OMSE) scheme, to new applicants, there has been a greater reliance on MMR to deliver an alternative affordable tenure to social rent. The current climate can be challenging to deliver new supply low-cost home ownership schemes. The rising cost of construction inhibits the viability of such schemes as low-cost home ownership properties need to ensure that the market value of the property is greater than the cost to build. At the same time, high interest rates are making mortgages less affordable for households on modest incomes. As market values rise, properties become less suitable for inclusion in low-cost home ownership schemes, further limiting their feasibility. The provision of MMR can assist young people looking to enter into home ownership by providing a secure, affordable home, which enables them to save for a deposit on their first home and so creates a stepping stone into home ownership. MMR homes are often found in large urban areas to help those households on low to moderate incomes that have difficulty buying their own home or renting privately but who also would be unlikely to be allocated a social rented property. MMR properties can also be provided in more rural areas where residents often experience similar problems in securing housing within their community, as normally there is fewer options This tenure is broadly seen as providing a route for young people to secure housing, often for the first time, alleviating the challenges they face navigating the housing market with a lower income. However, the tenant profile of MMR is varied and often is Page 100 of 138
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3 | O u t l i n e B u s i n e s s C a s e dictated by the type of housing on offer and its location, and so it should be seen as a tenure open to all ages. Through the affordable housing supply programme’s main grant fund, Registered Social Landlords (RSL’s) will deliver MMR properties via a subsidiary, and many have substantial MMR properties as part of their stock. Whilst Local Authorities can also deliver MMR using Scottish Government grant there is a need for a third party as they are excluded from directly offering Private Residential Tenancies. There are different approaches to how Local Authorities can deliver new supply MMR, and these are set out in this paper. Perth and Kinross The Perth and Kinross Local Housing Strategy (LHS) 2022-2027 sets out the strategic aims for housing within Perth and Kinross. This report aims to contribute to the following actions and milestones within that strategy: Action 1.1 Deliver PKC’s affordable housing programme of 1,050 homes over the next five years. Milestone • Achieve an average of 210 affordable housing completions each year • 30% other affordable tenure (315 out of total 1050 over five years – Low-Cost Home Ownership (LCHO), MMR and Self Build). Action 1.4 Seek opportunities to deliver a wider range of affordable housing options e.g., intermediate housing, LCHO and affordable self-build etc. Milestone • Carry out feasibility studies. • Identify and develop partnerships to deliver wider range of affordable housing options. In Perth and Kinross there are three RSLs that currently operate MMR properties, with a fourth RSL due to deliver new properties within the next 5 years. Kingdom Housing Association has 124 MMR properties across Abernethy, Perth, Scone, Blairgowrie, and Crieff. Hillcrest Housing Association has 87 properties across Perth and Blairgowrie. LAR Housing Trust has 16 properties in Blairgowrie. Within the current Strategic Housing Investment Plan, Places for People (PfP) are also programmed to deliver MMR properties in Scone, thus adding further to the 227 existing properties. The MMR properties by Kingdom, Hillcrest and PfP are delivered via the Strategic Housing Investment Plan using Scottish Government grant to part fund the cost. LAR however use a different model whereby Scottish Government loan funding has been used rather than grant, with additionally sourced private investment to fund the cost. It’s not known whether this loan funding will continue to be available for LAR to deliver more homes in Perth and Kinross in that manner, though this is funding outwith the Strategic Housing Investment Plan. Page 101 of 138
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4 | O u t l i n e B u s i n e s s C a s e The Gannochy Trust, although not an RSL, are a charitable organisation within Perth and Kinross with almost 300 properties that they let out below LHA rates and so also make a valuable contribution to affordable rented accommodation in the area. However, Kingdom, Hillcrest, and PfP are continuing to pursue further MMR opportunities through the programme in Perth and Kinross and are being supported to do so by PKC as part of our role as strategic housing authority. Housing Strategy will remain in dialogue with LAR to consider any opportunities that fit in with their model. Work is also ongoing within PKC to enable organisations to harness Rural and Islands Housing Fund monies to assist the delivery of this tenure in rural areas also. The broad objective of this paper is to ensure that the delivery of MMR keeps pace with the targets set out in the Local Housing Strategy 2022-2027. 1.2. Existing Arrangements The current framework allows for PKC to direct where MMR is delivered on sites, where there is an identified need, though this would always be subject to a financial appraisal by the RSL, who would deliver the product. PKC has also in the past used commuted sums to support MMR projects where viability has been an issue, this ensures that the projects do not falter and can be delivered in areas of strategic importance. PKC’s Housing Strategy Team are tasked with coordinating the Strategic Housing Investment Plan, and it is via this document where the majority of MMR is delivered in Perth and Kinross. Beyond this, support is provided to qualifying applicants to access the Rural Housing Fund, where one of the potential end tenures is MMR. This is valuable work to enable local communities to have real input into the delivery of affordable housing local to them, but its outputs can be small, and time consuming, and so its capacity to supplement delivery of MMR is limited. The recently approved Strategic Housing Investment Plan sought to fund the delivery of 1426 new supply properties with 124 of these being MMR. It was hoped that a further 16 could be developed for low-cost home ownership, however this is proving difficult to make viable. Unfortunately, the delivery of MMR and low-cost home ownership homes are not keeping up with the expected targets, as these projections indicate less than 10% being delivered against a target of 30%. Low-cost ownership schemes are unlikely to deliver in the short term due to challenging conditions thereby placing greater weight on the delivery of MMR. The previous 5-year delivery of MMR also indicates that the Strategic Housing Investment Plan outputs will not increase significantly the MMR delivery without some action. 1.3. Business Needs Page 102 of 138
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5 | O u t l i n e B u s i n e s s C a s e Need and Demand Rents for MMR are capped at the LHA rate for first let, though are often slightly below and so the need for this product tends to be located in areas where private rents are higher. LHA is the maximum rate of housing benefit a qualifying applicant can expect to receive to cover the cost of their rent in a private tenancy, in any given market area. For the properties proposed in this paper, the LHA rates are around 50% higher than the rent levels set if they were PKC social housing and so should be seen as very much a different type of tenure from social rent. Often MMR is not deemed to be needed in areas where the LHA rates are too similar to the market levels. Across the Perth and Kinross area, the private rents are higher than LHA rates for all property sizes, though there is variance across the different size of properties, as shown in Table 1 below: Property Size Market Rents MMR 100% Difference 100% Difference 95% Difference 85% Difference 1 Bedroom £452 £424 -£28 -7% -12% -25% 2 Bedroom £613 £558 -£55 -10% -16% -29% 3 Bedroom £836 £748 -£88 -12% -18% -32% 4 Bedroom £1,348 £1,247 -£102 -8% -14% -27% Average £812 £744 -£68 -9% -15% -28% Table 1: LHA/Market rates by property size for Perth and Kinross. 2022/23 data. The allocation of MMR, being a private tenancy, and not social housing, tends to allow for households to apply for a property that has one bedroom more than the households needs. Therefore, 2 or 3 beds would be a typical property size for new supply MMR and are the house sizes where there is greatest variance between market rents and LHA rates, indicating an alignment with need and prospective supply However, as table 1 also highlights, by ensuring that the rent levels are below the maximum LHA rates, which would typically be the aim, the rent savings for all property types can become substantial and would therefore allow a greater number of people to access them. Naturally, there are specific areas within Perth and Kinross whereby market rents are higher and so places greater pressure on those seeking housing in the private sector. Table 2 sets out where the highest average rents are and the size of property with the highest rents. Size 1 bed - shared 1 bed 2 bed 3 bed 4+ bed Average Eastern £490 £422 £604 £774 £1,406 £801 Greater Perth £437 £447 £609 £819 £1,282 £789 Highland £431 £518 £660 £923 £1,302 £850 Kinross £261 £508 £650 £873 £1,310 £835 Strathearn £456 £472 £625 £891 £1,483 £868 Page 103 of 138
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6 | O u t l i n e B u s i n e s s C a s e Comrie £446 £458 £565 £773 £1,496 £823 Crieff £446 £458 £565 £773 £1,496 £823 North Eastern - £425 £650 £598 £1,600 £818 City Centre £431 £443 £600 £805 £1,209 £764 Perth & Kinross £441 £452 £613 £836 £1,348 £812 Table 2: Average market rents by location and property size. 2022/23 data. Whilst evidence here shows that Highland, Strathearn, and Kinross would be areas to target delivery of MMR, it should be noted that it can be popular as a product even when the savings households can make on rents is minimal. This is because prospective tenants will consider aspects such as the quality of the property, the likelihood that repairs will be attended to promptly, and the security the landlord can offer. Furthermore, even in Housing Market Areas with lower rents, there will be parts that have higher rents making it difficult for households to live in the areas they want to live in. MMR landlords are typically recognised organisations with a well-functioning repairs system in place and as they are not private individuals, the risk of the property being needed back by the landlord is diminished. Whilst the introduction of Private Residential Tenancies meant that tenants had greater security of tenure than they did under Short Assured Tenancies, there are still a number of grounds that a landlord can evict a tenant under. These include, but are not limited to, the landlord wanting to sell the property, undertake major repair, to live in the property themselves or let out to a family member. This means that in practice, a prospective tenant will consider that renting from a landlord with possibly only one or two properties, comes with less security. The locations where MMR has been delivered successfully in Perth and Kinross, demonstrates that it is not only the areas where need is greatest that have proved popular. All projects listed in table 3 have proved be in high demand and are considered to be successful MMR schemes. Site RSL Unit Number Year Moyness (Hazelwood), Blairgowrie Kingdom HA 7 24/25 Duchlage Road, Crieff Kingdom HA 8 23/24 Broich Road, Crieff Kingdom HA 4 23/24 Earlsgate, Scone (over 55’s only) Kingdom HA 51 21/22 Glenalmond Road, Rattray Kingdom HA 6 21/22 Table 3: MMR delivery in 2020/21 - 2024/25 (5 years) As noted earlier, MMR is not only targeted at those struggling to access good quality private rented accommodation but also those that cannot afford to access the home ownership market. For people living in communities where house prices are high, it is especially difficult to enter this market with a modest income. The table below shows Page 104 of 138
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7 | O u t l i n e B u s i n e s s C a s e the average house prices across a number of areas, and reflects the challenges faced within Perth and Kinross in trying to access home ownership. Table 4: Average house prices 2022/23 data. Whilst the average house price can demonstrate, broadly, the challenges faced within specific areas, it will include house prices of properties that many with modest incomes will not be pursuing. To assess the impact of house prices on the those with modest incomes, the lower end of the market needs to be considered. 2022/23 All Sales Average Price 1st Quartile Median 3rd Quartile 4th Quartile Eastern £228,176 £139,500 £219,975 £284,963 £844,626 Greater Perth £242,468 £133,390 £215,255 £315,548 £950,000 Highland £327,130 £187,000 £288,527 £432,500 £1,000,000 Kinross £305,881 £184,875 £283,000 £387,750 £800,000 Strathearn £313,241 £179,475 £270,000 £397,500 £995,000 Comrie £359,268 £202,488 £276,391 £389,250 £995,000 Crieff £286,330 £160,000 £249,450 £355,000 £865,000 North Eastern £354,616 £255,000 £280,000 £410,000 £844,626 Perth City Centre £205,533 £117,250 £187,886 £276,500 £780,000 Perth and Kinross £274,907 £155,385 £239,500 £344,998 £1,000,000 Table 5: House price quartiles. 2022/23 data. Table 6 demonstrates how much a household would need to be earning, to purchase a property at the lowest quartile in each area, assuming a mortgage multiplier of 3.2, which is an affordable level. Many of the incomes listed below would be above the maximum income an applicant for an MMR property could have and so shows how out of reach home ownership is for many. It should also be noted, that the more pressured an area, the greater the constraint there will be on supply also and so even if a household could afford a property at the lower end of the market, they are further inhibited by a constrained supply. 2022/23 All Sales Average Price Scottish Average + / - Eastern £228,176.13 £216,337 11,839.13 Greater Perth £242,467.80 26,130.80 Highland £327,129.88 110,792.88 Kinross £305,880.21 89,543.21 Strathearn £313,240.84 96,903.84 Comrie £359,267.96 142,930.96 Crieff £286,330.02 69,993.02 North-Eastern £354,615.54 138,278.54 Perth City Centre £205,532.71 -£10,804.29 Perth and Kinross £274,906.82 58,569.82 Page 105 of 138
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8 | O u t l i n e B u s i n e s s C a s e Required for market entry LQ income to buy Ave income to buy Eastern £37,055 £60,609 Greater Perth £35,432 £64,406 Highland £49,672 £86,894 Kinross £49,107 £81,249 Strathearn £47,673 £83,205 Comrie £53,786 £95,431 Crieff £42,500 £76,056 North Eastern £67,734 £94,195 Perth City Centre £31,145 £54,595 P&K £41,274 £73,022 Table 6. Income needed to buy property. 2022/23 data. Furthermore, it should be noted that this reflects data from 2022/23, and it is known that property prices and private rents have been on the rise, and so the current situation is even more challenging for those on modest income levels than the data here shows. Whilst traditionally MMR is seen as a tenure for young people entering into the housing market for the first time, it should not be seen as solely a tenure for the young. The Earlsgate, Scone development has demonstrated that MMR is attractive to older people also, if the property types are suitable and in the right area. Here, 51 properties were delivered, managed by Kingdom Housing Association, and for over 55’s only, with great success and high levels of demand. Providing suitable, affordable housing for older people ensures that they are not left in increasingly unsuitable accommodation as their physical capacity declines. This means for those households their needs are better met and reduces the risk of reaching crisis point and a sudden need for additional services. Beyond that, often these households are downsizing and so it creates a chain by freeing up more housing for younger people both in the social and private sectors. The Scottish Governments ‘Mid-Market Rent Analysis: The Characteristics of MMR providers and MMR tenants - December 2020 to February 2025’ shows that whilst most tenants are below 34, there are tenants throughout the age groups living in MMR properties. 1.4. Potential Scope The scope of each option is set out in the summary of options, below. The first proposed tranche of properties being proposed for option 2 or 3 is 13 new build properties at Westfield, Rattray. These are being developed by Bancon Construction and currently sit within the Strategic Housing Investment Plan. 1.5. Strategic Risks Page 106 of 138
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9 | O u t l i n e B u s i n e s s C a s e Each option comes with its own risks, these are listed in the summary of each option, below. 1.6. Constraints Each option comes with its own constraints, these are set out as part of the summary of each option, below. 1.7. Dependencies Internal External Area Description of dependency Area Description of dependency Legal Option 2 and 3 will require legal oversight Option 2 – administer any leasing arrangement taking instruction from Housing (Strategy). Option 3 – oversee the creation of LLP and securing appropriate legal input and advice to ensure PKC adheres to legislative requirements. Scottish Futures Trust Option 3 will require advice from those that have delivered such projects before. SFT cannot provide legal advice, more support and assistance. SFT are one of the options to become the initial 2nd member. Finance Options 2 and 3 require financial investment. Viability appraisals and oversight over appropriate use of funds will be required. Option 3 required ongoing oversight to ensure financial regulations are adhered to. Unidentified third- party organisation Option 3 requires a third party to establish an LLP. Page 107 of 138
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10 | O u t l i n e B u s i n e s s C a s e PKC Lets Option 3B requires the use of PKC Lets as the dept that manages the stock. Property Services Options 2 and 3 require new build properties, or acquisitions and so project management will be required to deliver this new supply housing as well as major cyclical replacements. Housing Option 3 will require reactive repairs to be done as part of ongoing maintenance. 1.8. Impact on the Community and Community Co-production The community will have direct input into any new build affordable housing as part of the planning process. It has input into the planning application for Westfields, Rattray already and it is clear that a mixed tenure development would more reflect community wishes than a purely social rented development. The community will benefit from the delivery of Mid-Market Rent housing as it will provide a greater mix of affordable housing available for local people. 1.9. Sustainability Strategic Environmental Assessment screening has been undertaken to identify impacts. 1.10. Inclusion and Equality An Equalities and Fairness Impact Assessment has been undertaken to fully identify any impacts. 1.11. Resource efficiency Page 108 of 138
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11 | O u t l i n e B u s i n e s s C a s e The various options have been considered in terms of resource efficiency. The summary of each is provided below and the selected option has been expanded upon further. 2. Economic Case 2.1 Critical Success Factors 2.2 Impact Analysis Prior to assessing the scored options, a detailed assessment of the ‘do nothing’ option must be carried out and evidenced within the business case. To allow stakeholders to make an informed decision on the progression of the project an objective assessment of risks of not doing this project is required by way of a detailed impact analysis. Critical Success Factors Critical Success Factor Option Appraisal Scoring Weighting (W) (cumulative 100) Reason for Weighting CSF1 – Accelerates the delivery of MMR to meet housing need and demand in Perth and Kinross. 25 Equal weighting for all CSF. Each of the 4 CSFs will get maximum of 25 points, so that maximum total score is 100. CSF2 – Delivers on Corporate Plan, and LHS priorities 25 Equal weighting for all CSF. Each of the 4 CSFs will get a maximum of 25 points, so that the maximum total score is 100. CSF3 – Makes a positive resource and financial impact for alternative affordable home delivery 25 Equal weighting for all CSF. Each of the 4 CSFs will get maximum of 25 points, so that maximum total score is 100. CSF4 – Increases the capacity of PKC to deliver new supply affordable housing 25 Equal weighting for all CSF. Each of the 4 CSFs will get maximum of 25 points, so that maximum total score is 100. Page 109 of 138
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12 | O u t l i n e B u s i n e s s C a s e Impact Analysis of ‘do nothing’ option (please note this is not scored and only to inform the decision-making process) Risk Organisational and/or Service Impact Probability (High/Medium/Low) Risk1 MMR delivery does not keep pace with targets. High Risk2 MMR is not directed at demographics where need is known by PKC Medium Risk3 PKC does not maximise the opportunities available to increase its affordable housing assets. High Risk4 PKC becomes at a competitive disadvantage and less attractive to partner in delivery of new affordable housing. Medium Financial implications of ‘do nothing’ option Recurring Annual Capital Requirements (net increase/decrease from current commitment) £0 Recurring Annual Revenue Requirements (net increase/decrease from current commitment) £0 2.3 Options Appraisal (including a minimum of do minimum, preferred option and transformational) Each option outlined below should include the following elements: • Narrative summary of option • Economic appraisal of cost and benefits • Optimism bias – including supporting rationale • Risk assessment Option 1 Summary of Option Option 1 – Do minimum / Business as usual The starting point for any options appraisal is to consider whether any substantial actions outwith current ways of working is required to achieve the results that are being looked for. The current approach to deliver MMR in Perth and Kinross, as set out in 1.2, is to support our partner RSLs to deliver MMR projects. Page 110 of 138
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13 | O u t l i n e B u s i n e s s C a s e To increase supply of MMR in Perth and Kinross within the existing framework, a re- orientation of the prioritisation framework that is used to assess potential sites, so that those sites delivering MMR are prioritised, could be done. This could achieve an increase in supply with minimal intervention, though naturally still relies on partner RSL’s to deliver them. Furthermore, if needs can be identified, such as key workers, or over 55’s, a negotiation can be had with our partner Housing Associations delivering these new properties to ensure that suitable allocations can be made. If PKC contributes to a scheme by providing additional finance via commuted sums, conditionality can be included to ensure that appropriate groups are targeted. An example of this, was the Earlsgate, Scone, development, which is an MMR project for over 55’s. Review of Option 1 Pros: • No additional resources needed. • No financial outlay for PKC. • Limited intervention, requiring only small changes to current working. Cons: • Current model not keeping up with expected delivery of MMR and concern that outputs cannot be achieved sufficiently. • PKC has less control over MMR schemes that are delivered and are reliant on others to do it, which is not keeping up with the targets set out in the LHS. • Does not allow PKC to deliver a mix of tenures on our own sites and so restricts options for new delivery and business opportunities. • Prioritising sites that seek to deliver other tenures such as MMR, may skew the prioritisation and lead to sites being added that are not the best strategic fit. Risks: • MMR delivery does not keep pace with targets. • MMR is not directed at demographics where need is known by PKC. • PKC does not maximise the opportunities available to increase its affordable housing assets, when others do. • PKC becomes at a competitive disadvantage and less attractive to partner in delivery of new affordable housing, due to being restricted to social housing only. Summary of Financial Resource Requirements Indicative Capital Investment Required £0 Optimism Bias (**%) £0 Rationale for Optimism Bias Total Capital Investment Required £0 Page 111 of 138
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14 | O u t l i n e B u s i n e s s C a s e Source of Indicative cost: N/A Professional Fees included ☐ Inflation included ☐ Recurring Annual Revenue Requirements (net increase/decrease from current commitment) £0 Source of Indicative cost: N/A Appraisal of Options against Critical Success Factors Scoring 3 Benefits exceed the Critical Success Factor (25 2 Benefits meet the Critical Success Factor (18.75 points) 1 Benefits partially meet the Critical Success Factor (12.5 points) 0 Benefits do not meet the Critical Success Factor (6.25) Critical Success Factor Benefits of implementation of Option 1 (Strengths) Score (S) 0 - 3 Weighted Score (A) = (S x W) CSF1 - Accelerates the delivery of MMR to meet housing need and demand in Perth and Kinross. See section above under ‘pros’ 0 6.25 CSF2 - Delivers on Corporate Plan, and LHS priorities. See section above under ‘pros’ 1 12.5 CSF3 - Makes a positive resource and financial impact for alternative affordable home delivery. See section above under ‘pros’ 2 18.75 CSF4 - Increases the capacity of PKC to deliver new supply affordable housing. See section above under ‘pros’ 0 6.25 Risks associated specifically with option Likelihood Scoring Impact Scoring 5 Highly Likely 5 Major impact to project delivery 4 Likely 4 Significant impact to project delivery 3 May or not occur 3 Manageable impact on project delivery 2 Unlikely 2 Minor impact to project delivery 1 Highly Unlikely 1 No impact to project delivery Page 112 of 138
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15 | O u t l i n e B u s i n e s s C a s e Description of Risk Likelihood of Risk (L) Impact of Risk (I) Score (B) = (L x I) Risk1 - MMR delivery does not keep pace with targets. 4 4 16 Risk2 - MMR is not directed at demographics where need is known by PKC 4 4 16 Risk3 - PKC does not maximise the opportunities available to increase its affordable housing assets 4 4 16 Risk4 - PKC becomes at a competitive disadvantage and less attractive to partner in delivery of new affordable housing, due to being restricted to social housing only. 4 5 20 Page 113 of 138
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16 | O u t l i n e B u s i n e s s C a s e Option 2 Summary of Option Option 2 – Leasing arrangement with RSL A leasing arrangement is a type of agreement between the Local Authority and an RSL that operates or is keen to operate in that Local Authority area. These types of arrangements are used in neighbouring authority, Fife, where the Local Authority own 167 MMR properties that are managed by Kingdom and Ore Housing Association. PKC currently has a leasing arrangement with Kingdom Housing Association, though this relates to a social housing, rather than MMR, development in Perth. This would work by PKC delivering new supply homes via its new build programme and then leasing out the properties to a partner RSL’s subsidiary, who will then manage and deliver those properties as MMR. The leasing contract will set out: • The length of the lease, how it rolls on thereafter, as well as any notification periods. • Delineation of repairs responsibilities. These can be divided up between planned and reactive repairs, or a different negotiated position can be derived, right up to full repairs responsibility being passed on as part of the lease. • The leasing price paid by the RSL, including how yearly increases are to be calculated. • How allocations are to be administered and whether specific groups are to be targeted. The leasing price would be derived from a financial appraisal conducted by PKC, that considers the cost of the following: • Construction, and other associated project costs, less any grant. • Planned maintenance costs, if applicable. • Ongoing costs, e.g staff time, insurance, white goods Once a leasing price is derived (which will vary by site, location and maybe the number of units on offer), the prospective RSL, will then need to make their own assessment on whether it’s a viable scheme or not, and thereafter this will inform rent levels charged to prospective tenants. Naturally, the lower the leasing price, the more likely a below LHA rent can be applied by the RSL. The properties will then be managed by the RSL until the agreement is terminated by either party. As PKC are leasing the buildings to an RSL, it will be the RSL’s subsidiary that is deemed to be the landlord of the tenants and not PKC and so Private Residential Tenancies can be issued. The new properties will be either be: • Directly developed by PKC, through its new build programme. Page 114 of 138
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17 | O u t l i n e B u s i n e s s C a s e • Purchased from a developer or housebuilder, through an off-the-shelf purchase of completed units. This approach can either be used indefinitely, or as part of a transition to option 3. Review of Option 2: Pros • This provides an entry into the field of MMR and therefore creates less risk. • Provides PKC with an opportunity to develop mix tenure new build schemes that include MMR as part of the mix. Having capacity to deliver an additional tenure type can often assist in the viability of individual developments and reduce the call on the finite grant that is available, as MMR typically receives less grant than new build social housing. • The tenant profile of MMR and social rent can be different, with those seeking social housing often, though not always, having lower incomes and so having the capacity to deliver different tenures, can provide a more balanced mix of tenants and so creating more integrated communities within PKC new build sites. • Large sites often benefit from a range of tenures to ensure more integrated communities. There is likely to be opportunities in locations where MMR would prove popular however this opportunity cannot be grasped by PKC if the capacity to deliver MMR is not there. • The contractual arrangement allows for a more formal implementation of allocations that are aligned with PKC preferences and so specific demographics can be targeted, e.g. key workers, over 55’s. s. s. • Enables PKC to build up its assets with minimal staffing resources needed to manage it. Once the initial outlay is paid off, the properties will then become an income generator for PKC. • Enables PKC to take up off the shelf opportunities that may be deemed unsuitable for social housing, but suitable for MMR. This would enable PKC to become a nimbler organisation in terms of its acquisitions. • The assets could potentially sit on the HRA, if the appropriate ministerial guidance was adhered to. Cons • Still reliant on a third party to deliver MMR, who may deem any proposed site as not meeting their strategic needs. This means that PKC identified opportunities may not be taken forward. • Significant staff time could still be needed to manage the relationship between the two organisations, especially if repairs are split, which is contrary to its purpose of having it managed elsewhere. A robust and detailed agreement may alleviate some of the potential areas for dispute. • Using an RSL to manage our assets as MMR, when PKC already have PKC Lets, an in-house management service for private landlords, is un underutilisation of an existing council resource that would be capable of doing this via an LLP model. Page 115 of 138
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18 | O u t l i n e B u s i n e s s C a s e • Relying on an RSL to manage our assets as MMR leaves us with little control over the quality of management and places PKC reputation in hands of another provider, if tenants are aware that the properties themselves are PKC owned. • Upfront funding will need to be made available to pay for the new build properties until that cost is recouped via the leasing income. The exact amount would be subject to a financial appraisal of a specific new build proposal however there would be a financial implication. Decisions would need to be made about where this funding would come from and that all appropriate approvals have been given. Option 2 - Risks • The RSL could terminate the contract when PKC are unprepared to continue managing them as MMR. This places a risk on PKC in terms of managing its assets but also to the tenant with regards to their tenancy. Whilst this is considered a low risk, its potential impact would be substantial. This could though be mitigated by securing an alternative partner however if the reason is due to unexpectedly higher costs to operate the model, then another partner may not be easily found and would then have to be converted into social housing, thereby losing the MMR offer. • The RSL does not adhere to preferred allocations, or significant staff time is needed to ensure they do. This can be mitigated by a detailed contractual arrangement though does not offer the same level of control that direct delivery through an LLP does. • PKC’s ability to grasp opportunities may be limited as it could establish a good opportunity for MMR but none of the partner RSL’s are interested in that specific location or the scale that is proposed. • Full financial appraisal could identify that there is no project that is viable without additional funding being applied or that it is viable by using LHA rates at their maximum, where aim would be to offer rents below LHA rates. Whilst the risk of no project being viable is low, the risk of not achieving a below LA rate rent level is higher. Summary of Financial Resource Requirements Indicative Capital Investment Required £1,380,000 Optimism Bias (0%) £0 Rationale for Optimism Bias Investment required refers to actual, current, costs provided by developer, once grant and contribution from council tax 2nd / empty homes has been considered. Total Capital Investment Required £1,380,000 Source of Indicative cost: PKC’s Housing Revenue Account, to be paid back through rental income over a 30- year period. Professional Fees included ☒ Inflation included ☒ Page 116 of 138
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19 | O u t l i n e B u s i n e s s C a s e Recurring Annual Revenue Requirements (net increase/decrease from current commitment) £0 Source of Indicative cost: To be paid via rental income as part of ongoing revenue costs associated with managing the project. Any surplus income will be re-invested either in new MMR projects or to provide benefit to the HRA. Appraisal of Options against Critical Success Factors Scoring 3 Benefits exceed the Critical Success Factor (25 2 Benefits meet the Critical Success Factor ( 1 Benefits partially meet the Critical Success Factor ( 0 Benefits do not meet the Critical Success Factor (6.25) Critical Success Factor Benefits of implementation of Option 2 (Strengths) Score (S) 0 - 3 Weighted Score (A) = (S x W) CSF1 - Accelerates the delivery of MMR to meet housing need and demand in Perth and Kinross. See section above under ‘pros’ 2 18.75 CSF2 - Delivers on Corporate Plan, and LHS priorities. See section above under ‘pros’ 2 18.75 CSF3 - Makes a positive resource and financial impact for alternative affordable home delivery. See section above under ‘pros’ 2 18.75 CSF4 - Increases the capacity of PKC to deliver new supply affordable housing. See section above under ‘pros’ 2 18.75 Risks associated specifically with option Likelihood Scoring Impact Scoring 5 Highly Likely 5 Major impact to project delivery 4 Likely 4 Significant impact to project delivery 3 May or not occur 3 Manageable impact on project delivery 2 Unlikely 2 Minor impact to project delivery 1 Highly Unlikely 1 No impact to project delivery Page 117 of 138
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20 | O u t l i n e B u s i n e s s C a s e Description of Risk Likelihood of Risk (L) Impact of Risk (I) Score (B) = (L x I) Risk1 - The RSL could terminate the contract when PKC are unprepared to continue managing them as MMR. 3 4 12 Risk2 - The RSL does not adhere to preferred allocations, or significant staff time is needed to ensure they do 3 3 9 Risk3 - PKC’s ability to grasp opportunities may be limited as it could establish a good opportunity for MMR but none of the partner RSL’s are interested in that specific location or the scale that is proposed 4 4 16 Risk4 - Full financial appraisal could identify that there is no project that is viable without additional funding being applied or that it is viable by using LHA rates at their maximum, where aim would be to offer rents below LHA rates. 3 3 9 Page 118 of 138
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21 | O u t l i n e B u s i n e s s C a s e Option 3 Summary of Option Option 3 – Establish an Arm’s Length External Organisation (ALEO) via a Limited Liability Partnership (LLP) Establishing a PKC Limited Liability Partnership (LLP) would be the most active approach to take forward the delivery of MMR. This is an approach taken by Local Authorities such as Stirling and Edinburgh. Stirling Council’s LLP, Steadfast Homes, has 128 properties and is actively seeking more opportunities. Whereas Edinburgh Council’s LLP, Edinburgh Living, has over 500 properties as part of its portfolio and similarly is continuing to look for opportunities. In Scotland, a residential tenancy issued by PKC would have to be a Scottish Secure Tenancy. The need to establish this organisation would be to enable the operation of a Private Residential Tenancy whilst retaining control by PKC. An LLP would not fall within the definition of a Local Authority landlord and is therefore able to issue tenancies other than Scottish Secure Tenancies, thereby enabling PKC to control the operation of MMR. This would typically be funded via Scottish Government grant and a loan from PKC, who would obtain the loan from the Public Works Loan Board (‘PWLB’), which is then ‘on-lent’ to the LLP. This on lending should come from PKC’s general fund, rather than the HRA. The grant funding must be applied for by PKC directly, and any loan funding between PKC and its LLP would need to be approved by the Scottish Government. The loan would then be paid back by the LLP as part of its ongoing business operation. The use of any general fund monies would need to through the relevant approval processes, incorporating a robust financial appraisal. This is done is via establishing an LLP with a separate organisation. An LLP structure requires a minimum of two members to form, and so it would be a joint venture between PKC and a second party. External legal advice has been sought, and provided, which confirms 1 That the LLP set up is the most appropriate form the ALEO should take 2 The legislative powers that PKC can use to establish an LLP to deliver MMR 3 The type of 2nd member that the LLP can have as a prospective 2nd member. This ranges from an existing PKC, or other ALEO, charitable organisations, other local authorities, or private organisations. The key legal documents required to aid the governance of this LLP would be the following. • A Members Agreement This is the main document between the Local Authority and the second member that sets out and regulates what the LLP can do. • A Facility Agreement: This is the document that sets out the terms of funding from the Local Authority to the LLP. • A Deed of Entrustment Page 119 of 138
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22 | O u t l i n e B u s i n e s s C a s e This is the document that ties the mid-market rent LLP to deliver a service of public economic interest (SPEI) for subsidy control purposes. • A Management and Maintenance Agreement: This is the document that sets out the agreement between the LLP and PKC to deliver management and maintenance services. PKC can do this in house or contract this out to an external party. Members Agreement Faculty Agreement Deed of Entrustment M & M Agreement Diagram 1. Operating Model The organisation that both Edinburgh and Stirling had their arrangement with initially was Scottish Futures Trust, themselves and arm’s length organisation owned by the Scottish Government. However, Stirling have now changed their partnership to another body because Scottish Futures Trust entered these arrangements to enable the LLP to become established and thereafter looked to withdraw. They are increasingly being approached about this and have just agreed to be 2nd member for Shetland Council also, and so cannot guarantee that they can be the second member for PKC, but discussions are ongoing, and consideration is being given to alternatives also. Scottish Futures Trust can still provide support and guidance to assist PKC to develop and create an LLP capable of delivering MMR, even if they are not the second member. Care would have to be taken though in identifying and negotiating with another party to ensure that an appropriate partnership was entered into. Scottish Futures Trust has developed a suite of legal agreements for use, that PKC could use as a starting point for drafting such agreements, either with them, or another party, these include: • Members Agreement • Facility Agreement • Deed of Entrustment • Management and Maintenance Agreement PKC control and accountability would be enshrined within the governance structure to ensure strategic objectives are met and would operate using a Board of Members and Management, structure. Local Authority Second Member LLP Page 120 of 138
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23 | O u t l i n e B u s i n e s s C a s e Board of Members Specific LLP decisions would be reserved to the member representatives and set out in the Members Agreement. As mentioned above, the control of the LLP’s activities would always lie with PKC members. This is reflected in the proposed division of voting rights between PKC and the second member. In meetings of the Members, PKC votes would always outweigh that of the Second member to ensure complete control by PKC. The Board of Members would typically be made up of PKC senior management, though elected members could also be included. Board of Management The day-to-day management of the LLP is delegated to a Board of Management, appointed by the Member organisations. This would typically comprise of six individuals, with five from PKC and one from the second member. The Board of Management would be made up of Senior Officers from PKC who oversee its operations day to day, and so this could be representatives from Housing, Place Strategies, Finance, Legal, and any other appropriate dept. The day-to-day operations would be done by PKC Officers, with a lead officer coordinating the ongoing operations, reporting into the ‘Board of Management.’ Once the LLP is operational, and begins to purchase homes, it will do so on a turnkey basis, and these will be either: • Directly developed by PKC through the PKC new build programme. • Purchased or procured from a developer or housebuilder – either through off-the- shelf purchase of completed units, or through a procured acquisition process. Following purchase, the LLP, and not PKC, is the tenants’ landlord and its business model will: • Earn rental income • Pay a management and maintenance fee, and insurance fee to PKC • Pay the debt servicing costs associated with the PWLB lending; and • Ensure there is reserves for lifecycle expenditure in advance of need and pay for lifecycle events out of this reserve and contemporary cash flows, if required. LLPs can also lease properties from the private sector and deliver as MMR, rather than purchasing them. This may expand the opportunities that there may be to harness institutional investment, to enable delivery of MMR. Work has begun to establish whether there are any such opportunities, though this would likely be in tandem with any formation of an LLP. There are two different approaches as to how the management of such properties would be undertaken, as different models are used by the Local Authorities, highlighted here. Option A – External Management Organisation Page 121 of 138
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24 | O u t l i n e B u s i n e s s C a s e The first approach is to contract an external organisation to manage the properties on behalf of the LLP and pay a fee for this. A procurement exercise would be needed to establish who would be best place to contract this out to. Option B – In House Management by PKC The second would be to pay a fee to PKC itself to manage the properties. As PKC Lets operates in this area currently for private landlords, the council is in a unique position to have existing structures in place to manage such a proposal or make minimal adaptations to current working to enable this. In addition to this, it provides PKC with an opportunity to enter an arrangement such as this without the need to have substantial stock levels to justify it and gives the potential to start with small numbers. However, as with the formation of the LLP, the management arrangement would need to be set out in a detailed agreement between the two parties. Due to the reasons outlined above the proposal here is to implement option B, and utilise PKC Lets as the preferred party to manage the stock. Review of Option 3: Pros: • Provides PKC with an opportunity to develop mix tenure new build schemes that include MMR as part of the mix. Having capacity to deliver an additional tenure type can often assist in the viability of individual developments and reduce the call on the finite grant that is available, as MMR typically receives less grant than new build social housing. • The tenant profile of MMR and social rent can be different, with those seeking social housing often, though not always, having lower incomes and so having the capacity to deliver different tenures, can provide a more balanced mix of tenants and so creating more integrated communities. • Enables PKC to build up its assets, albeit via an LLP. The properties will provide an income for PKC if PKC Lets is used to deliver the management services. • Enables PKC to take up off the shelf opportunities that may be deemed unsuitable for social housing. • Provides PKC with direct control over the delivery and allocation of MMR. • Large sites often benefit from a range of tenures to ensure more integrated communities. There is likely to be opportunities in locations where MMR would prove popular however this opportunity cannot be grasped by PKC if the capacity to deliver MMR is not there. • Can potentially assist with harnessing institutional investment from investors that want to enter MMR market. Cons: • Substantial work and time required to establish LLP and ensure the necessary contractual arrangements are in place to be able to deliver MMR. • Ongoing work will be required to ensure that the regulatory obligations of the LLP are adhered to. Page 122 of 138
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25 | O u t l i n e B u s i n e s s C a s e • Upfront funding will need to be made available via loan to the LLP by PKC until that is recouped via loan repayments. The exact amount would be subject to a financial appraisal of a specific new build proposal. • The funding required for the on lending would not come from the HRA and so monies from PKC general fund, or another suitable source, would need to be found. This would make it more challenging to deliver. Risks: • If MMR properties are not profitable enough to pay back the loan, the properties will need to be taken back by PKC and converted into social housing, or disposed, with grant returned. This will place the tenancies of the tenants at risk. The risk of this emanates from the cost of operating the properties being unexpectedly higher than anticipated. • This set up requires approvals from the Scottish Government and this will be subject to the detail of the proposal. • PKC cannot find a suitable partner prepared to enter LLP with. • A full financial appraisal may identify that a workable business model cannot be found, or PKC is unable to get approval for general fund on lending to the LLP. Summary of Financial Resource Requirements Indicative Capital Investment Required £1,380,000 Optimism Bias (0%) £0 Rationale for Optimism Bias Investment required refers to actual, current, costs provided by developer, once grant and contribution from council tax 2nd / empty homes has been taken into account. Total Capital Investment Required £1,380,000 Source of Indicative cost: PKC General Fund to be made available to the proposed LLP via on lending. This will be paid back each year, with interest, until the full balance is cleared. Professional Fees included ☒ Inflation included ☒ Recurring Annual Revenue Requirements (net increase/decrease from current commitment) £450 per unit per annum would be paid by LLP to PKC Lets for managing properties. This would be uplifted 3% each year, thereby increasing revenue. Source of Indicative cost: To be paid via rental income as part of ongoing revenue costs associated with managing the project. Any surplus income will be re-invested in more MMR projects. Page 123 of 138
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26 | O u t l i n e B u s i n e s s C a s e Appraisal of Options against Critical Success Factors Scoring 3 Benefits exceed the Critical Success Factor 2 Benefits meet the Critical Success Factor 1 Benefits partially meet the Critical Success Factor 0 Benefits do not meet the Critical Success Factor Critical Success Factor Benefits of implementation of Option 3 (Strengths) Score (S) 0 - 3 Weighted Score (A) = (S x W) CSF1 - Accelerates the delivery of MMR to meet housing need and demand in Perth and Kinross. See section above under ‘pros. 3 25 CSF2 - Delivers on Corporate Plan, and LHS priorities. See section above under ‘pros. 2 18.75 CSF3 - Makes a positive resource and financial impact for alternative affordable home delivery. See section above under ‘pros. 2 18.75 CSF4 - Increases the capacity of PKC to deliver new supply affordable housing. See section above under ‘pros. 3 25 Risks associated specifically with option Likelihood Scoring Impact Scoring 5 Highly Likely 5 Major impact to project delivery 4 Likely 4 Significant impact to project delivery 3 May or not occur 3 Manageable impact on project delivery 2 Unlikely 2 Minor impact to project delivery 1 Highly Unlikely 1 No impact to project delivery Description of Risk Likelihood of Risk (L) Impact of Risk (I) Score (B) = (L x I) Risk1 - If- If MMR properties are not profitable enough to pay back the loan, the properties will need to be taken back by PKC and converted into social housing, or 3 4 12 Page 124 of 138
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27 | O u t l i n e B u s i n e s s C a s e disposed, with grant returned. Risk2 - This- This set up requires approvals from the Scottish Government and this will be subject to the detail of the proposal 2 3 6 Risk3 - PKC- PKC cannot find a suitable partner prepared to enter LLP with 2 4 8 Risk4 - A- A full financial appraisal may identify that a workable business model cannot be found, or PKC is unable to find suitable funding source for the on lending to the LLP 3 4 12 Page 125 of 138
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28 | O u t l i n e B u s i n e s s C a s e Success Factor (CSF) Summary CSF Weighted Score (A) Total Risk Score (B) Total Scoring (A-B) Options Options Options 1 2 3 1 2 3 1 2 3 CSF1 6.25 18.75 25 16 12 12 -9.75 6.75 13 CSF2 12.5 18.75 18.75 16 9 6 -3.5 9.75 12.75 CSF3 18.75 18.75 18.75 16 16 8 2.75 2.75 10.75 CSF4 6.25 18.75 25 20 9 12 -13.75 9.75 13 - 24.5 29 49.5 To ensure that the scoring is weighted correctly, and that the total achievable CSF score is 100, each of the 4 CSFs have been scored as follows to ensure that the maximum amount each individual CSF can get is 25. 3 Benefits exceed the Critical Success Factor (25 points) 2 Benefits meet the Critical Success Factor (18.75) 1 Benefits partially meet the Critical Success Factor (12.5) 0 Benefits do not meet the Critical Success Factor (6.25) The risk factor scores are then subtracted from the CSF score to show the total score for each option. Option appraisal scores summary Total Score Option 1 - 25.5 Option 2 29 Option 3 49.5 Preferred Option = Option 3 Establish Arm’s Length External Organisation (ALEO) via a Limited Liability Partnership (LLP) 3. Commercial Case (for preferred option - to be completed in conjunction with Corporate Procurement) Page 126 of 138
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29 | O u t l i n e B u s i n e s s C a s e Procurement Strategy The 13 new build properties relate to a developer led housing scheme within the PKC new build programme. The PKC New Build Delivery Working Group, chaired by Property dept, has procurement representation ensuring that all procurement requirements are adhered to. External legal advice from Burness Paul has been sought to consider the procurement implications of the LLP, specifically the prospective 2nd member. This advice will be adhered to, and only suitable 2nd members are being considered. Service Requirements The LLP will be formed of a ‘Board of Members’ / ‘Board of Management’ structure. The Board of Members would typically be made up of PKC senior management and elected members, with one representative from the 2nd member. Voting rights would be weighted in favour of PKC so it had complete control of the LLP The day-to-day management of the LLP is delegated to a Board of Management, appointed by the Member organisations. This would typically comprise of six individuals, with five from PKC and one from the second member. The Board of Management would be made up of senior officers from PKC who oversee its operations day to day, and so this could be representatives from Housing, Place Strategies, Finance, Legal, and any other appropriate dept The maintenance of the stock would be contracted out to PKC Lets, however whilst this is a service requirement, it is one that would be paid for by the LLP in terms of a management fee. Charging Mechanism The development costs will be paid for as part of the PKC new build programme. These works will be funded by Scottish Government grant, Council Tax 2nd / Empty Homes, commuted sums, and a capital contribution. The capital contribution will be paid by way of a loan from the general fund. A payment schedule from the LLP to PKC general fund will be required as part of the ongoing business operations, to cover the cost of loan and interest. The payment from the LLP to PKC Lets will be made via the management agreement, a draft version of which is held on file that can be shared internally on request. A budget for external financial advice has been included within the startup costs to ensure that the appropriate financial arrangements are in place. Risk Transfer Page 127 of 138
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30 | O u t l i n e B u s i n e s s C a s e The exit strategy, should the LLP default on repayment of the loan, will consist of various options • The HRA can step in and convert the properties to social housing, with loan being repaid to PKC. • A partner RSL can be offered the properties to continue as MMR, with loan being repaid to PKC. • The properties can be sold on open market, with grant returned to Scottish Govt, and loan repaid to PKC Key Contractual Arrangements External legal advice has been procured, should approval be given, and costed as part of the startup costs. The contractual arrangements, set out within this business case, will be finalised with the external legal party’s oversight. Draft versions of each of these contracts are held on file and available internally, on request. Personnel Implications (to be completed in conjunction with HR) The LLP itself will have no staff. The governance arrangements are set out in this document and there is a suite of draft documents held on file that show how the LLP is to function. Accountancy Treatment (to be completed in conjunction with Finance) The assets will sit on the LLP, which will comply with all necessary financial regulations. A budget, as part of the startup costs, has been identified for external financial advice should that be required. 4. Financial Case (for preferred option - to be completed in conjunction with Finance) Capital and Revenue Requirements A separate appraisal has been conducted to establish the viability of the development. This sets out the capital costs in greater detail; however, the headline costs are set out below Capital Grant - £1,213,864 CT Monies - £260,000 Commuted sums - £220,000 Prudential borrowing - £1,380,000 Total - £3,073,864 Page 128 of 138
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31 | O u t l i n e B u s i n e s s C a s e An allowance has been provisioned in for external legal and financial advice, bringing the total capital contribution from the general fund to be on lent and paid back over 30 years at £1,380,000 Revenue The main revenue implication is derived from the management and maintenance of the stock. This will be undertaken by PKC Lets, though will be done for a management fee of £450 per property, per year, paid by the LLP to PKC Lets. This fee will increase 3% every year. Other revenue implications relate to the staffing required to be part of the ‘Board of Management’ and ‘Board of Members.’ It is expected that this role can be subsumed within current business operations and relates more to the governance of the LLP. This will need to be kept under review as more stock is added to the LLP, and future review may consider whether payment from the LLP to PKC needs to be made for these services also. Net Effect on Prices None Impact on Balance Sheet Due to capital contributions from Council Tax 2nd / Empty Homes and Commuted Sums, there will be a reduction in accounts here until they are replenished. There will be an amount of £1,380,000 paid via general fund that will be on lent to the LLP and thereafter paid back over a 30-year period covering the interest. Impact on Revenue Budget Staffing is the only implication, as set out under previous ‘Capital and Revenue Requirements’ heading. Funding Mechanisms and Affordability (including partnership and leverage) The funding mechanism has been set out under ‘Capital and Revenue Requirements’ heading. A viability appraisal has been conducted on the first tranche of properties. 5. Management Case (for preferred option) Page 129 of 138
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32 | O u t l i n e B u s i n e s s C a s e Programme and Project Management Methodology The new build properties will be managed and delivered in accordance with the current process for PKC new builds. They will be sold to the LLP on completion as they cannot be held on the HRA account. The management of the LLP is set out within the suite of legal documents that sit alongside this outline business case. These agreements are in draft form, with finalised versions to be created in tandem with external legal advisers. Programme and Project Management Plans The delivery of the properties themselves will be part of the PKC New Build programme and will adhere to project management processes agreed. The function of the LLP is set out in the draft legal agreements held on file. The proposal itself seeks to deliver on our Local Housing Strategy (LHS) vision that “Everyone in Perth and Kinross has access to the right home, in the right place, at the right cost." It further seeks to deliver on the specific LHS objectives, such as • Seek opportunities to deliver a wider range of affordable housing options e.g., intermediate housing, LCHO and affordable self-build etc. • Achieve an average of 210 affordable housing completions each year • 30% being of other affordable tenure such as LCHO, MMR, Self Build The proposed development sits within the Strategic Housing Investment Plan. This sets out investment priorities in new supply affordable housing over a 5-year period. Use of Specialist Advisers External legal advice has been procured for initial advice and to assist with the suite of legal documents needed to establish the LLP. They will support PKC Legal Services in overseeing the establishment of the LLP. A budget for external financial advice has also been included as part of the startup costs, should that be required, to ensure that the necessary financial arrangements are in place to adhere to regulatory requirements. Change and Contract Management Arrangements The contractual arrangements are set out within this document and the supplementary draft legal agreements provided alongside this business case. Benefits Realisation Page 130 of 138
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33 | O u t l i n e B u s i n e s s C a s e The arrangements for ongoing monitoring of the benefits accrued by the delivery of these homes via an LLP are set out in the draft legal agreements that sit alongside this business case. The need for MMR within Perth and Kinross is set out within this business case also, as well as the benefits to this being done directly by PKC. The benefit to PKC itself is control over an LLP with assets that will pay for themselves within a 30-year period. In future, when profits are accrued, these will be retained by the LLP to increase its stock levels and thereby providing further benefit to PKC. Once the LLP is established, private finance opportunities can be considered to bring further investment into Perth and Kinross. Risk Management The initial tranche of 13 properties is designed to provide a gentle introduction into MMR so that PKC can learn lessons for future acquisitions and review ongoing, and future staffing implications. The properties are designed to a standard that could be transferred over to another social or MMR housing provider should the LLP falter in some way. Post Implementation Evaluation Arrangements All new build affordable housing developments go through a value for money assessment, as part of grant conditions and so this will also be appraised in such a manner. This considers cost, timescales, and tenant satisfaction. Ongoing review of operations will be dealt with via the governance arrangements we put in place. Contingency Arrangements If the LLP is unable to return the loan provided, there are a number of exit strategies in place 1. The HRA can step in and convert the properties to social housing, with loan being repaid to PKC. 2. A partner RSL can be offered the properties to continue as MMR, with loan being repaid to PKC. 3. The properties can be sold on open market, with grant returned to Scottish Govt, and loan repaid to PKC. Page 131 of 138
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Appendix 2 Mid-Market Rent (MMR) FAQ’s Q. Do we really need MMR, when social housing is better and cheaper for people? A. Yes, MMR is needed wherever rents are much higher than Local Housing Allowance (LHA) rates, and this is clearly the case in some housing market areas in Perth and Kinross. Beyond that, MMR has been delivered in areas where rents are not substantially higher than LHA rates and these have still proved very popular. This shows that there is an identified need in some parts, but demand everywhere. MMR is not a substitute for social housing, it targets households who are unlikely to be allocated a social housing tenancy, but whom have a housing need and often approach our service for housing options assistance. Q. Will MMR properties reduce the number of social houses being built? A. No, the current Local Housing Strategy states 210 new affordable homes per year are needed. 70% of those are to be social rent with 30% of those to be either mid- market rent or low-cost home ownership, and this target will not change. Delivering MMR helps to achieve the 30% target and compliments the delivery of social housing, rather than replacing it. Q. Why do PKC need to do MMR, can we not just insist that the Housing Associations do more? A. As Strategic Authority, we can prioritise the delivery of MMR, though this still relies on partners doing it at the scale that we would want and in areas we would want. There are however competing priorities in terms of type of affordable housing being delivered such as adapted, supported etc. Having the capacity to do MMR ourselves gives us opportunities we do not have right now. Developing large scale developments requires a mix of tenures to create sustainable communities and so having the ability to deliver MMR will complement our PKC programme. We can also grasp smaller, off the shelf opportunities not suited for social housing. Q. Fife Council have a leasing arrangement with other Housing Associations, why can we not do the same? A. We can, though this is not the typical approach Local Authorities take to deliver MMR directly and does not offer us the control over management of the properties. This was a temporary measure to enable the formation of an LLP and so proposal is to deliver MMR directly using the mainstream approach to doing so. A leasing arrangement would not allow for PKC Lets to manage the properties and accrue income, and so would be an opportunity missed. Q. Why does it need to be an LLP? A. We have procured external legal advice on this matter and the advice is clear that the LLP is the appropriate type of legal entity to create to deliver MMR. PKC cannot issue Private Residential Tenancies for ourselves and so we need a 2nd member to provide the necessary separation from PKC to enable these tenancies to be issued. The LLP model is the one used by other local authorities. 6 Page 133 of 138
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Q. An LLP seems complicated, how do we ensure all legal requirements are met and adhered to? A. External legal adviser, Burness Paul, have been procured for initial advice and for after LLP is approved, to provide the necessary oversight ensuring that the LLP will meet all legal requirements. They are there to support the PKC legal service, who will oversee the actual legal arrangements. This has been budgeted for as part of start-up costs. There is also scope for procuring external financial advice to adhere to financial regulations, should finance team decide that is necessary. Q. Who will the 2nd Member organisation be? PKC have several options though first preference would be Scottish Futures Trust, though they have their own approval process for agreeing to be a 2nd member. They have, so far, not committed to us, though have been open to considering the proposal. This would enable the LLP to be established and allow us the opportunity to demonstrate how the LLP works to prospective 2nd members. Scottish Futures Trust would only agree to this in short term and so work will need to commence early on to identify the 2nd member that this would be thereafter. The external legal advice also specified what type of 2nd member organisation we can partner with, this will ensure that whomever we choose, the LLP will be a legally competent member. Q. Who is responsible for managing the LLP? A. PKC staff will operate the LLP as it will have no staff. PKC Lets will undertake the day-to-day management of the stock. A fee for these lettings' agency services will be paid. Beyond this, there will be a Lead Officer coordinating a working group of Officers from Legal, Finance, Housing, and Property to oversee the operation of the LLP itself. This group will report directly into the Board. Each Officer will have a different role, with varying levels of input, within the ongoing management of the LLP, summarised below. Team Leader, Housing Strategy (Lead Officer) – Coordinating role ensuring that all operational requirements are being met. Establishing working group meetings, providing board / committee reports, and ensuring a link between the varying departments. Solicitor, Legal and Democratic Services – Oversee the external legal advisors providing advice on startup. Thereafter providing ad hoc legal advice and assistance, within the parameters of what is appropriate, to the working group as part of ongoing operations. Team Leader, Finance – Oversee the establishment of the financial ledgers for the operation of the LLP and ensure payments can be made for services performed by PKC. Thereafter, providing budget monitoring statements from the LLP accounts to the working group ensuring that performance can be reviewed against targets by Lead Officer. Service Manager, Repairs and Improvements – Reactive repairs. Properties will be placed on PKC repairs schedule, as per council houses, and repairs done in same way. The cost of repairs will be paid for by the LLP. The role involves feeding in any issues with the repairs scheduling. Page 134 of 138
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Capital Projects and New Build, Service Manager – Large cyclical repairs. Properties will be placed on cyclical maintenance programmes as per PKC housing. This will not be needed for the first 10 years, though costs will be paid for by the LLP. Q. Will the LLP have a board, and if so, who sits on it? Yes, it will have two boards. However, the make-up of the boards will be agreed through the members agreement and so may vary depending on who the 2nd member is. A proposed board structure model would look like the below. 1. Board of Members. This is the main board that makes specific decisions about the LLP and sets its direction. It is made up of representatives from PKC and the 2nd member organisation. The PKC voting always outweighs that of the 2nd Member so that control is retained by PKC. Elected Members can sit on the Board of Members. There is an obligation on members to make decisions based on the best interests of the LLP Suggested participants include Strategic Lead, Housing and Communities, Strategic Lead, Economy, Development, and Planning 2nd Member Representative. Elected Members 2. Board of Management, or Senior Management Team (SMT) sits beneath the Board of Members and will oversee the day-to-day management of the LLP. This will be made up of senior management within PKC and representative from 2nd member organisation. The Lead Officer reports into this board. Suggested participants include: Strategic Lead, or Service Manager Housing and Communities Strategic Lead, or Service Manager Finance and Business Support Strategic Lead, or Service Manager Legal and Governance Strategic Lead, or Service Manager Economy, Development and Planning Strategic Lead, or Service Manager Property Services 2nd Member Representative There will be an obligation on all board members to review board reports, and act in the best interests of the LLP. Q. Who will do the LLP’s accounts? The ongoing financial management of the LLP will be done by the working group with budget monitoring by the Finance team feeding into the board reports. The proposal is that financial accounts will be reported to SMT for approval before being submitted by Strategic Lead, Finance. The initial tranche of properties is 13 and so Page 135 of 138
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financial arrangements should be straightforward to manage, however as the assets accrue, the ongoing financial oversight may need to be outsourced, paid for by the LLP. Q. Who will manage the actual properties? A. PKC Lets will manage the properties. They currently offer lettings agency services and so will take up this role on behalf of the LLP, for a fee. The maintenance of the properties will be undertaken by PKC, again with the cost paid for by the LLP. The properties will be added to planned maintenance cycles with a fee being paid for this. They will also be added to routine maintenance cycles, again for a fee. Any repairs to items such as white goods, blinds etc will be coordinated directly by PKC Lets. The LLP will have a budget for reactive repairs each year, which increases each year with inflation, and this will be used part of budget monitoring. Income will be held back to pay for future cyclical maintenance and replacements also. Q. Why does the LLP need a general fund loan to part fund the upfront capital cost, rather than the HRA? A. The HRA is prohibited from lending to the LLP. Whilst Scottish Government approval is needed to do so from general fund, this is the typical approach for Local Authorities to directly deliver MMR and so getting approval should be straightforward. Q. Does it have to be general funded, is there no other funds that can be used? A. Council Tax 2nd / Empty Homes has been used by Shetland, but the funding required would lead to a large reduction in monies available and this fund is needed to support wider delivery of affordable housing programme. Private finance can be used however this requires an interested private sector partner and substantial negotiation and so this avenue will be pursued once the LLP is established. Q. How can PKC justify using general fund monies for affordable housing, when budgets are so tight? A. Whilst the general fund will be ‘on lending’ £1.38m, there will be no detriment because this will be paid back with the interest charges covered and so it is being lent on a no detriment principle. The LLP will pay PKC Lets, a general funded service, a management fee for managing the properties and so there are also opportunities for generating income for the general fund. If there is a default on re- payment, the properties can be purchased by HRA and converted to social housing with loan repaid in full. Q. How long will it take to pay the loan back? A. The loan, with interest, will be paid back over a 30-year period. If the LLP accrues profit quicker than anticipated, then there will be option to increase payments, however the plan would be to pay back over 30-year period, and it has been appraised on such a basis. Q. What appraisals have been done to assess the financial viability of this proposal? Page 136 of 138
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A. A development viability assessment has been undertaken and established that the proposal stacks up financially, and furthermore, there are identified exit strategies should something go wrong. Q. Has there been a Business Plan or Growth Strategy developed to show plans beyond the first 13 properties. A. The aim is to begin with the first 13 as a starter to learn lessons that will inform the LLP’s growth. However, there is an aspiration to increase stock levels by 25 new homes per year to help achieve the Local Housing Strategy targets to deliver MMR. Once the LLP has been approved, a Business Plan, or Growth Strategy, will be set out in detail to identify how this aspiration will be achieved. The strategy will be provided as part of the update to Housing and Social Wellbeing Committee and will set out the funding opportunities available, future identified sites proposed, as well as staffing implications. Q. How can we be assured that the LLP will not make risky investment decisions that place it at risk. A. The governance structures in place will ensure that any new opportunity to expand stock are considered by the appropriate council officers, with general oversight of the LLP by Housing and Social Wellbeing Committee. Any future borrowing would need to be approved at Committee, so that there is appropriate oversight over future investment decisions. The nature of this investment will dictate which committee will approve it. More General Fund borrowing – Perth and Kinross Council Committee Private investment – Finance and Resources Committee Council Tax 2nd / Empty Homes – Housing and Social Wellbeing Committee Page 137 of 138
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