250120 ARS Board Audit Scotland Transformation Report
Renfrewshire Council · 20 January 2025
Back to Audit, Risk and Scrutiny Board — 20 January 2025 and its agenda
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___________________________________________________________________ To: Audit, Risk and Scrutiny Board On: 20th January 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Summary of recent Audit Scotland Report on Transformation in Councils ___________________________________________________________________ 1. Summary 1.1 Audit Scotland publish regular national reports covering matters related to local government. In October 2024 Audit Scotland published ‘Transformation in Councils’. This report has been prepared by officers for Board members and summarises the findings of the Audit Scotland report. 1.2 The report summarises the current progress of transformation within local government and the challenges that may impact the delivery of the required changes. Audit Scotland have set out the barriers to Transformation Programmes and the actions that should be taken to mitigate any issues. 1.3 Elected Members are asked to note that as part of the national programme of thematic best value reviews applicable to local government, the Accounts Commission has agreed the focus for Best Value thematic work in 2024/25 should cover how councils are redesigning services to maintain outcomes and deliver services more efficiently. The Council’s external auditors will explore this theme in Renfrewshire as part of the annual audit programme, and will prepare a report on this matter later in 2025. The findings will also feed into a national report which will be published by the Accounts Commission. ___________________________________________________________________ 2. Recommendations
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2.1 It is recommended that members of the Audit, Risk and Scrutiny Board: • Note the content of the Audit Scotland report and the local activity relating to transformation, change and financial sustainability within Renfrewshire Council. _________________________________________________________ 3. Key Messages 3.1 Within this report, Audit Scotland gives an overview of the current financial challenges faced by Scottish councils and the increasing pressures on services caused by demographic changes. The report emphasises that the impacts of these challenges will affect individual councils to different extents and that there needs to be a flexible approach to meeting each council’s situation. To adapt to the different local factors, Audit Scotland has developed a set of principles that they believe should be used by councils to gauge their progress in transformation. These principles are broken down into five key themes: vision, planning, governance, collaboration, and innovation. 3.2 Audit Scotland notes within the report that councils need to be more ambitious with their transformation aims while ensuring that their aims remain achievable. Audit Scotland highlight that continued efficiency savings will not be enough to overcome the scale of challenges facing local authorities. These barriers include: ring-fenced funding; cost of living; workforce pressures; public perception; increased service demand; short term thinking; willingness and capacity; demographic changes; lack of coordinated decision making; appetite for risk and increasing costs. 3.3 Audit Scotland identifies that councils face both external and internal barriers to enacting transformative change. The report suggests that these barriers necessitate that councils work closely with local communities and partners to create a sustainable transformation and to continue to provide services in the future. 3.4 The report sets out a need for a programme of extensive coordinated transformation between Scottish councils in contrast to the individual transformation programmes that have been undertaken by councils up until this point. 3.5 The report highlights that the Society of Local Authority Chief Executives and the Improvement Service have been working on developing proposals for what local authorities in Scotland should look
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like in the future. These build on the findings of the Improvement Service’s report on ‘Delivering a future for Scottish Local Authorities’. 3.6 Audit Scotland reports that while this programme is in its initial stages, contact has been made with almost all councils and a group of other public sector organisations. Work is still ongoing on developing a process for engaging the public in decision-making. 3.7 The Improvement Service transformation programme has initiated six 12–18-month projects with a focus on fostering collaboration between local authorities, budget savings, and longer-term solutions to the financial challenges. Work is ongoing to ascertain the required resources and timescales for each project. The six projects are: • Collaboration within the local government sector on procurement; • Analysis of local governments’ statutory and discretionary services; • Full implementation of the Crerar Review for Local Government; • Development of a digital‘to-be’ state for Scottish Local Government; • Identification of new digital shared services that could be delivered nationally or regionally; • Repository of examples of active communities/participatory design. 3.8 Audit Scotland provides an update on various programmes that have been started to foster transformation in local authorities. One such programme was the Leadership Practitioner Forum which was set up to build capacity in leadership positions within the council. Thirty of the thirty-two councils have engaged with the programme so far including Renfrewshire where several officers have participated. The forum covers topics such as the Verity House Agreement, budget positions, and current challenges facing local authorities. Audit Scotland suggests that it is too early to properly gauge the effectiveness of the forum. 3.9 Audit Scotland highlights potential risks to the delivery of the Improvement Service’s Transformation Programmes. One risk they discuss is that councils are not resourced to enact the changes that are required as part of the Transformation Programme—namely, that council staff are currently working on top of their main duties rather than having staff dedicated to transformation. 3.10 In the report Audit Scotland sets out suggested actions to mitigate any potential risks to the Transformation Programme. The first mitigation is to gain a greater understanding of the needs of local communities to be
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able minimise demand. The second suggestion is that councils should create a culture that fosters ideas and innovative thinking so that transformation can take place at a faster rate. The third mitigation is that councils should encourage greater coordination between services to increase the effectiveness of preventative measures. 3.11 The report also calls for the signatories of the Verity House Agreement (VHA) to recommit to the goals of the agreement and to have greater collaboration between partners going forward. Audit Scotland describes the current progress as limited. They indicate that work on a shared fiscal framework, accountability and assurance framework, and the local governance review all need additional support and resources for them to be established. The report reiterates that delivering the commitments set out in the VHA will be a catalyst to the Transformation Programme. 3.12 Audit Scotland also highlight the role that COSLA has in facilitating collaboration between public sector organisations, local authorities, and the Scottish Government. It also suggests that the organisation can be used to improve the public engagement required for transformation. 3.13 Audit Scotland asserts that, while transformation is a long-term project, the need for change is urgent and that any delays will make it more difficult to resolve the financial challenges facing local authorities. 3.14 Within Renfrewshire Council, there is a well-established approach to supporting transformation and change, closely aligned to the Council’s financial sustainability programme. The Council’s Programme Management Unit works alongside a range of corporate support services to support change and transformation programmes across all Council services and at a corporate level. Robust governance is in place across Council programmes, with regular updates both at a project and programme board level, as well as to Corporate Management Team and to relevant Policy Boards. 3.15 The Director of Finance’s regular reports to the Council on the organisation’s financial outlook and medium-term financial planning have also given progress updates on the transformation, change and financial sustainability programmes. The update to Council in September 2024 outlined the measures the Council has taken to deliver substantial savings in recent years from transformation programmes, financial sustainability workstreams and corporate financing measures such as adjustments to the Council’s long term debt smoothing strategy. The report also noted that since 2011/12
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cumulative savings of £182 million have been secured from a combination of service savings and also through corporate financing options. Progress with the financial sustainability workstreams has highlighted the challenges involved in driving out significant savings that do not impact on service delivery. The report also noted that some workstreams will take longer to deliver savings, or in some cases, while not delivering significant savings in their own right, the work is important to undertake as it is a critical enabler in the delivery of other service changes or savings. The Council has agreed a number of financial sustainability workstreams which continue to be progressed, including the strategic property review, a connected communities review, updates to employee terms and conditions, strategic procurement measures and a strategic review of the services commissioned from OneRen. 3.16 A refreshed approach to managing transformation and change is currently being developed to ensure that the Council continues to deliver Best Value through these programmes, that resources are allocated effectively, and the organisation has a clear prioritisation of key projects, deliverables and associated financial or other resource savings and benefits. 3.17 The organisation also has a strengthened focus on understanding the impacts of our transformation, change and financial sustainability activity, recently undertaking a review of the equalities impact assessment process and a stock-take across key priorities and projects. The organisation is also seeking to recruit an officer to support this work at a corporate level. 3.18 To support effective transformational change, an organisational culture open to learning, innovation and creativity is essential. As part of the Council’s ongoing commitment to continuous improvement and self- evaluation, a bespoke model to self-assess organisational culture has been developed in partnership with the Improvement Service. Based on the well-established Public Service Improvement Framework which has been used in Renfrewshire Council for over 15 years, the Model explores organisational culture across four key themes – Leadership; People (employees); Collaborating, Learning and Listening; and Ethics and Governance. Key priority actions emerging from this work will be progressed through the Council’s Corporate Improvement Plan and any specific-service level actions through Service Improvement Plans for 2025/26.
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3.19 Elected Members are asked to note that as part of the national programme of thematic best value reviews applicable to local government, the Accounts Commission has agreed the focus for Best Value thematic work in 2024/25 should cover how councils are redesigning services to maintain outcomes and deliver services more efficiently. The Council’s external auditors will explore this theme in Renfrewshire as part of the annual audit programme, and will prepare a report on this matter later in 2025. The findings will also feed into a national report which will be published by the Accounts Commission. ___________________________________________________________________ Implications of the Report 1. Financial – While Renfrewshire is not directly mentioned in the report reference is made to the need for councils to adapt to the changing financial landscape. 2. HR & Organisational Development – While not directly mentioned in the report, Audit Scotland do highlight the need for dedicated staff working on transformation. 3. Community/Council Planning – None 4. Legal - None 5. Property/Assets – None 6. Information Technology – None 7. Equality & Human Rights – None – an equality impact assessment is not required for this report as it is a summary of a national report for noting only. 8. Health & Safety – None 9. Procurement– None 10. Risk – None 11. Privacy Impact – None 12. Climate Risk – None. 13. Children’s Rights – None.
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14. Cosla Policy Position – None _______________________________________________________ List of Background Papers Audit Scotland report: Transformation in councils ___________________________________________________________________ Author: Andrew Voysey, Assistant Policy Officer andrew.voysey@renfrewshire.gov.uk