Appendix 1 - ALEO's Review - Progress Update September 2025
Perth and Kinross Council · 29 October 2025
Back to Perth and Kinross Council — 29 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Appendix 1 ALEO’s REVIEW – RECOMMENDATIONS & ACTION AS AT DECEMBER 2023 PROGRESS UPDATE – SEPTEMBER 2025 ACTION / RECOMMENDATION OWNER STATUS / PROGRESS FURTHER DETAIL GOVERNANCE & PROCUREMENT 1 A formal ALEO governance framework should include how the Council’s Scrutiny Committee holds ALEOs to account for the services they are contracted to provide under the SLA, and how these contribute to the Council Plan. Specific financial monitoring should also be reported at a reasonable frequency for the purposes for monitoring the impact on the General Fund (suggested quarterly). Reinstate quarterly monitoring of ALEO by Scrutiny and Performance Committee. This is in line with Glasgow Audit recommendations for the Council to ensure it is clear about what the ALEOs deliver in return for the contract fee (Best Value and Following the Public Pound). It is also important given the significant financial pressures and risks relating to ALEOs in the coming years. Ensure the current Council governance and monitoring framework allows for sufficient oversight of risk across the ‘family group’ of services delivered by ALEOs. Strategic Lead – Legal & Governance ONGOING COMPLETE ONGOING Governance is already in place within individual contracts for services. However, there is still work to be progressed with this action currently underway and reflected in the recommendations of the Options Appraisal Report (Appendix 2) for a Strategic ALEO Alliance agreement. Financial monitoring for all ALEOs is regularly reported to F&R Committee. Quarterly reporting is in place to S&P Committee, two meetings are written reports only and two in person meetings with presentations to Committee per annum. Although measures are already in place, the Strategic Alliance recommended within Appendix 2 will strengthen this approach.
Page 2
2 Review of the current size of the Boards in conjunction with ALEO senior management to determine if they are appropriately sized. A skills needs assessment should also be considered. ALEO CE’s CONCLUDED There has been no suggestion as a result of engagement on this project that there are any issues with ALEO Boards or the size of them and therefore no plans to review at this point. A separate skills matrix exercise has been carried out individually. 3 Internal Audit Management should appoint an Internal Auditor for each ALEO. This could be provided by PKCs Internal Auditors. Strategic Lead – Legal and Governance CONCLUDED While oversight and monitoring of ALEOs is ongoing by PKC, the PKC audit team do not have the capacity to appoint an individual and the cost of this would outweigh any benefits realised. It should be noted that external audits are carried out in relation to ALEO’s. 4 A review of the procurement arrangements across the ALEOs should be undertaken to determine the most effective procurement arrangements to be put in place to ensure compliance with the public sector procurement regulations and where joint procurement arrangements for particular commodities may bring financial savings to the Council group Strategic Lead – Legal and Governance ONGOING The Options Appraisal report gives a quick win for introducing savings on energy costs through an agency agreement (joint procurement process) which is being progressed. In addition, the Strategic Commissioning & Procurement project is in progress as part of our Transformation & Change programme. Support and advice are given to ALEOs where required. 5 Move the ALEO contract monitoring/compliance post to the corporate Strategic Commissioning and Procurement Team. This will address a key person dependency risk and enable ALEO contract monitoring to benefit from wider improvements underway to Council procurement practice; and align the ALEO contract monitoring closely with Legal teams involved in the preparation of ALEO contracts Strategic Lead – Economy, Development and Planning COMPLETE The PKC Senior Leadership Structure Review moved the ALEO contract monitoring function, and this action is resolved.
Page 3
A review of the arrangements for the ALEOs applying for grant funding should be undertaken to determine if there are any opportunities to undertake joint working/joint funding applications, particularly to those funders that all of the ALEOs receive funding from. ALEO Working Group / Strategic ALEO Alliance ONGOING We will continue to work in partnership with ALEOs to consider any opportunities for joint funding. FINANCE 6 A review should be undertaken to ensure all parties are clear on the rationale for services provided by PKC and the associated recharges. Recharges should be based on proper accounting practice, and any changes in service / recharges may need to be reflected through corresponding SLA financing changes. Strategic Lead – Finance & Business Support / Strategic Lead - Digital CONCLUDED The options appraisal review has set out the costings involved in a number of areas across ALEO’s. For example, our IT services now have a standard charge that is being applied consistently across all ALEOs who are accessing PKC systems. 7 Consideration to be given to streamlining the finance arrangements by the utilisation of the one financial system for all ALEOs with separation between the 3 organisations using different company codes. Ideally this would align with the PKC system. This would reduce maintenance and support costs for the current three separate systems that are in operation and also provide some resilience with staff able to support the other organisations if required Establish a shared finance function for ALEOs based on the same financial system. This will allow the Council more effective oversight of financial risks across the ALEO ‘family group’ of services, enable more complete management information reports to be generated and support wider efficiencies in financial management, reporting and monitoring. Strategic Lead – Finance & Business Support Strategic Lead – Finance & Business Support CONCLUDED CONCLUDED As per the evidence provided within the Options Appraisal Review at Appendix 2, the costs and resources required to implement these changes outweigh any benefits. As above, the options appraisal review considered the consolidation of all ALEO corporate services into PKC and the costs outweighed benefits.
Page 4
8 Review the arrangements for delivery of the payroll services at each of the ALEOs. As part of this the option for having a payroll hub which delivers the payroll services to all three of the ALEOs thereby keeping the money within the Council group and making a net saving should be explored. As a minimum the options for one of the other two ALEOs to provide the payroll services to CPK should be explored. Strategic Lead – Strategic Planning, People & Performance / HR Manager CONCLUDED As per the evidence provided within the Options Appraisal Review at Appendix 2, the costs and resources required to implement these changes outweigh any benefits. STRUCTURE & CONSOLIDATION 9 Clear messaging should be used going forward so that all parties are clear that they are part of the wider Council Group. This perspective is important when assessing options for changes to services and structures. ALEO Review Working Group CONCLUDED This recommendation has been taken forward as the principle for partnership working on the ALEO Options Appraisal Review process. Moving forward, we will continue to build on key relationships and closer working between PKC and the different ALEOs. 10 Starting from 2024/25, corporate functions across the 3 current ALEOs should be consolidated, prioritising: - Finance -Business conferencing - Facilities Management - HR (policy and transactional services e.g. payroll) Strategic Lead – Projects & Programmes CONCLUDED This action has been reviewed as part of the options appraisal process and recommendations for taking forward presented. At this time, the cost and resources to implement this structure outweigh any benefits that could be realised. However, new innovative and efficient ways of working should continue to be explored together in future. 11 A full review of all back-office services provided by each of the ALEOs to be undertaken to seek opportunities for more joint working or creation of a hub of excellence that could deliver a specific function to all 3 ALEOs. As a minimum when one of the ALEOs recognises the need for additional ALEO Review Working Group ONGOING The Strategic Alliance proposed within the recommendations of Appendix 2 will pick up on this action and ensure that support, advice and where possible improved collaboration / shared services are always considered
Page 5
help with a support service, the first port of call should always be PKC and the other 2 ALEOs before going out to the market. between PKC and the ALEOs as a first port of call. 12 There is wider potential to integrate ALEO and Council functions on Perth city events and destination marketing, and to extend shared service arrangements with wider funded partners ALEO Review Working Group ONGOING Appendix 2 will pick up on this action and ensure that support, advice and where possible improved collaboration / shared services are always considered between PKC and the ALEOs as a first port of call. PROPERTY 13 A full review of all properties from which the ALEOs currently deliver services from. The review should include the following: - condition and suitability of each property; - the annual repairs and maintenance costs for each property and whole life costing of the assets, including information on whole life costing; and - the usage of each property. This information should then be used to determine if best use is being made of the joint assets and inform decision making as part of any options appraisals for future transformation / service reform of all the property assets. This review should take account of the work currently ongoing in relation to properties including LAL/sports properties and the previous work in relation properties including the library property review. There are examples in other authorities of a variety of services being delivered from the same properties, e.g., libraries incorporating access to jobs, skills and benefits advice. Strategic Lead – Property Services CONCLUDED This action is being taken forward as part of the Corporate Asset Management Plan programme. For info - there are currently 35 buildings used by ALEO’s (32 owned by PKC and 3 by LAL). 11 of these are libraries. 14 The current ALEO property portfolio should be rationalised to ensure it is affordable and sustainable. This will also enable business rates relief, which helps protect front-line services, to be maximised. Strategic Lead – Property Services ONGOING Plans are currently underway to consider rationalising the property portfolio. An example of this is the work being undertaken with communities regarding future use of library
Page 6
buildings. All ALEO managed properties have been reviewed as part of the Leisure Asset Review, with a view to utilising these assets in a more sustainable way. 15 Consolidation of the Perth city sports offer onto one site should be considered. This recommendation is based on evidence from the Leisure Assets Review about affordability of maintaining 3 major sites in the city centre, alongside rising cost pressures, operating deficits, and changing customers/markets. Strategic Lead – Property Services ONGOING As above, plans are underway on this action including PH20. Progress on this will be reported to full Council when appropriate. 16 Consolidate key library provision to Community Campuses and the AK Bell Library. Trial the Open Library model at Scone and co-locate other rural library services where possible within the wider Council/public estate. This recommendation is based on evidence and recommendations from a review of libraries carried out by CPK on behalf of the Council which identified changing usage and rising cost pressures. Strategic Lead – Property Services / Culture Perth & Kinross ONGOING The implementation of the Library Strategy is underway with local communities and is f outcomes will be presented to Council in due course. 17 Consolidate CPK and potentially PTCH storage facilities as part of the Smarter Working programme. This recommendation would enable storage for the CPK museum and archive collections plus storage of some PTCH resources at Pullar House, if Council takes a decision to retain the building next year. Strategic Lead – Property Services / Legal & Governance ONGOING The corporate archive records function has now been consolidated into the PKC Records and Information Team from Culture PK which has meant moving staff between the organisations. In addition, there are still some workstreams to be progressed e.g. additional PTCH / Museum Collections Storage space within Pullar House. 18 Expand support for the Community Asset Transfer (CAT) programme for Community Halls operated by LAL. This recommendation is based on wider corporate asset Strategic Lead – Housing & Communities ONGOING Across the eight identified halls progress varies. Pitlochry is now under community management and aiming for full ownership by
Page 7
management work to support CAT where feasible. The Leisure Assets Review recommends that additional support to communities is designated from 2024/25 onwards to enable this. October 2025, Dunning in lease discussions, and Coupar Angus preparing a feasibility funding bid. Other communities have shown limited engagement, often due to expectations that PKC and LAL will continue operating the sites. Tulloch presents a more complex case, with conditional interest tied to future funding decisions and uncertainty around the Tulloch Institute’s lease renewal in 2028. 19 Consider disposal of the Fergusson Gallery and Willam Soutar House. The Fergusson Collection is now displayed at Perth Art Gallery following investment in the latter and various attempts to operate the William Soutar House as an events space have not proved sustainable over the years. Disposal of these assets will create capital receipts for reinvesting in services. Strategic Lead – Property Services ONGOING The Fergusson Gallery is now closed to the public. Work is progressing in relation to William Soutar House. The property has been declared surplus to operational requirements by Perth and Kinross Council and a consultation is currently underway. The house was ‘gifted’ by William Soutar’s sister and was originally accepted subject to the condition that the house would revert to her or her successors, should the local authority no longer have reason to occupy it. Therefore, the Council proposes to return Soutar House to Evelyn’s successors, subject to approval from the Perth Common Good Fund Committee. The consultation ends on 7 November 2025. ICT 20 A review of the ICT arrangements across the ALEOs should be undertaken to map out the current arrangements for: - Networks and server estate - ICT security - Applications & currency - Service desk - End User Computing. Thereafter work should be undertaken to ensure the ICT related risks are managed appropriately from a group perspective. Strategic Lead – Digital & IT COMPLETE IT systems and arrangements and the implications of change have been considered as part of the ALEO Options Appraisal Review with no recommendation to make changes at this stage.
Page 8
Work can continue to develop this and ensure that any proposed changes are considered in terms of efficiency and shared services. PEOPLE 21 A review of the salary structures should be undertaken to determine if harmonisation of similar roles can be undertaken. Discussions should also be undertaken with regards the real living wage. A review of Employment issues should be undertaken to assess any potential risks. Strategic Lead - Strategic Planning, People & Performance / HR Manager CONCLUDED CONCLUDED As part of the ALEO Options Appraisal Review, harmonisation of terms and conditions across ALEO’s has been considered for each structural model proposed. There is a significant cost attached to this area and at present no recommendation for change being presented. The Real Living Wage has been implemented across all organisations for consistency. There has been no additional risk to the challenge of equal pay as a result of the review. 22 Senior management structures should be reviewed in light of the consolidation of corporate functions. Strategic Lead - Strategic Planning, People & Performance / HR Manager CONCLUDED The ALEO Options Appraisal Review has considered various different senior management structures along with costings / benefits etc. of change.