Agenda Document Pack - Risk and Audit Scrutiny Committee - 25/06/2025
South Lanarkshire Council · 25 June 2025
Back to Risk and Audit Scrutiny Committee — 25 June 2025 and its agenda
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Council Offices, Almada Street Hamilton, ML3 0AA Tuesday, 17 June 2025 Dear Councillor Risk and Audit Scrutiny Committee The Members listed below are requested to attend a meeting of the Committee to be held as follows:- Date: Wednesday, 25 June 2025 Time: 14:00 Venue: Hybrid - Committee Room 1, Council Offices, Almada Street, Hamilton, ML3 0AA The business to be considered at the meeting is listed overleaf. Yours sincerely Paul Manning Chief Executive Members Elaine McDougall (Chair), Mary Donnelly (Depute Chair), Mathew Buchanan, Colin Dewar, Alistair Fulton, Ross Gowland, Celine Handibode, Susan Kerr, Richard Lockhart Substitutes Monique Equi, Gavin Keatt, Julia Marrs, Helen Toner 1
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BUSINESS 1 Declaration of Interests 2 Minutes of Previous Meeting Minutes of the meeting of the Risk and Audit Scrutiny Committee held on 6 May 2025 submitted for approval as a correct record. (Copy attached) 3 - 6 Item(s) for Decision 3 Internal Audit Annual Assurance Report 2024/2025 Report dated 2 June 2025 by the Audit and Compliance Manager, Finance and Corporate Resources. (Copy attached) 7 - 24 4 Annual Governance Statement for 2024/2025 and Significant Governance Areas Quarter 4 Progress Report Report dated 3 June 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 25 - 64 Item(s) for Noting 5 Unaudited Annual Accounts 2024/2025 Report dated 2 June 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 65 - 208 6 Internal Audit Activity as at 30 May 2025 Report dated 3 June 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 209 - 216 7 2024 National Fraud Initiative Exercise Report dated 2 June 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 217 - 226 8 Forward Programme for Future Meetings Report dated 20 May 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 227 - 230 Urgent Business 9 Urgent Business Any other items of business which the Chair decides are urgent. Clerk Name: Elizabeth-Anne McGonigle Clerk Telephone: 07385403101 Clerk Email: elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 2
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RISK AND AUDIT SCRUTINY COMMITTEE Minutes of meeting held via Confero and in Committee Room 1, Council Offices, Almada Street, Hamilton on 6 May 2025 Chair: Councillor Mary Donnelly (Depute) Councillors Present: Councillor Mathew Buchanan, Councillor Colin Dewar, Councillor Monique Equi (substitute for Councillor Ross Gowland), Councillor Susan Kerr, Councillor Richard Lockhart, Councillor Helen Toner (substitute for Councillor Elaine McDougall) Councillors' Apologies: Councillor Alistair Fulton, Councillor Ross Gowland, Councillor Celine Handibode, Councillor Elaine McDougall (Chair) Attending: Finance and Corporate Resources J Taylor, Executive Director; Y Douglas, Audit and Compliance Manager; E-A McGonigle, Administration Adviser; A Norris, Administration Assistant; L O’Hagan, Head of Finance (Strategy); I Strachan, Head of Administration and Legal Services 1 Declaration of Interests No interests were declared. 2 Minutes of Previous Meeting The minutes of the meeting of the Risk and Audit Scrutiny Committee held on 18 February 2025 were submitted for approval as a correct record. The Committee decided: that the minutes be approved as a correct record. 3 Internal Audit Activity Report A report dated 15 April 2025 by the Executive Director (Finance and Corporate Resources) was submitted on work completed by Internal Audit during the period 25 January to 11 April 2025. Findings from internal audit assignments were reported to this Committee throughout the year and the last progress report was considered by the Committee on 18 February 2025. Information was provided for Internal Audit work completed during the period 25 January to 11 April 2025. As at 11 April 2025, 100% of the 2024/2025 Audit Plan was in progress. Of this, 94% of the Plan was at draft report stage. Assignments completed in the period 25 January to 11 April 2025, together with a summary of overall assurances, were detailed in Appendix 1 to the report. Key performance indicators for the period to 11 April 2025 were provided in Appendix 2 to the report. 2 3
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The Internal Audit function within the Council would continue to comply with the Public Sector Internal Audit Standards (PSIAS) in delivery of the Internal Audit Service in 2024/2025. The new Global Internal Audit Standards (GIAS) would apply from 1 April 2025 and future activity reports to the Committee would reflect the requirements of those new standards. Updates were also provided on:- meetings of the Chief Internal Auditors’ Group which had provided an opportunity to share best practice and attend presentations on topical issues. A copy of the Chief Internal Auditors’ Group 2024/2025 Annual Report was provided at Appendix 3 to the report progress against the Audit Strategy which was a requirement of the PSIAS. Delivery of the 2024/2025 Strategy had been evidenced by the completion of the Internal Audit Plan in year, and monitored during the year by performance indicators which were regularly reported to the Committee The Committee decided: that progress on Internal Audit activity be noted. [Reference: Minutes of 18 February 2025 (Paragraph 7)] 4 Audit Scotland Financial Bulletin 2023/2024 A report dated 8 April 2025 by the Executive Director (Finance and Corporate Resources) was submitted on the Audit Scotland report entitled ‘Local government in Scotland: Financial bulletin 2023/2024’ which had been published in January 2025. The report had been divided into 3 parts:- council funding and budgets financial performance financial position and outlook The key messages from each of those 3 parts of the Audit Scotland report were detailed in sections 4 and 5 of the report. An assessment of the position in South Lanarkshire Council was provided in section 6 of the report. The Committee decided: (1) that the key messages and recommendations contained in the Audit Scotland report entitled 'Financial bulletin 2023/2024', as detailed in sections 4 and 5 of the report, be noted; and (2) that the commentary on the Council’s position, as included in the Audit Scotland report and as detailed in section 6 of the report, be noted. [Reference: Minutes of 25 June 2024 (Paragraph 8)] 5 Financial Resources Scrutiny Forum Activity A report dated 3 April 2025 by the Executive Director (Finance and Corporate Resources) was submitted on reports considered by the Financial Resources Scrutiny Forum in the period from August 2023 to March 2024. A report on the business considered by the Financial Resources Scrutiny Forum would continue to be submitted to the Risk and Audit Scrutiny Committee on an annual basis. 4
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The Committee decided: that the summary of reports considered by the financial Resources Scrutiny Forum for the period August 2024 to March 2025, as detailed in Appendix 1 of the report, be noted. [Reference: Minutes of 24 June 2024 (Paragraph 9)] 6 Forward Programme for Future Meetings A report dated 11 April 2025 by the Executive Director (Finance and Corporate Resources) was submitted on the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 May 2026. As part of future arrangements, members were invited to suggest topics for inclusion in the Committee’s forward programme. The Committee decided: that the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 May 2026 be noted. [Reference: Minutes 18 February 2025 (Paragraph 10)] 7 Urgent Business There were no items of urgent business. 5
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Audit and Compliance Manager (Finance and Corporate Resources) Subject: Internal Audit Annual Assurance Report 2024/2025 1. Purpose of Report 1.1 The purpose of the report is to:- report on the progress and performance of Internal Audit and to provide an independent audit opinion on the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements for the year ended 31 March 2025 2. Recommendation(s) 2.1 The Committee is asked to approve the following recommendation(s):- (1) that Internal Audit’s performance be noted; (2) that if be noted that the overall findings from internal audit work will inform the Council’s 2024/2025 governance statement; and (3) that the level of assurance be noted. 3. Background Compliance with Public Sector Internal Audit Standards 3.1. During 2024/2025, the Internal Audit Service was delivered in South Lanarkshire Council (SLC) within the context of the Public Sector Internal Audit Standards (PSIAS) (revised 1 April 2017), compliance with which is mandatory under Section 95 of the Local Government (Scotland Act) 1973. The Service operated within this series of standards to ensure a professional, independent and objective internal audit service was delivered to support good governance within the Council. 3.2. PSIAS requires that a Quality Assurance and Improvement Programme (QAIP) is developed and implemented to provide assurance that internal audit activity is conducted in accordance with the Internal Audit Charter, that the Service operates in an efficient and effective manner and that it is perceived to be adding value and improving operations. The internal audit function’s compliance with PSIAS is assessed through periodic self-assessments as well as by way of an external inspection, once in each 5-year period. The overall assessment, from the last external inspection, reported to the Risk and Audit Scrutiny Committee (RASC) in 2023/2024, was that the internal audit function ‘fully conformed’ with 7 standards and ‘generally conformed’ in the remaining seven areas. Actions were agreed to address areas of non-compliance. 3 7
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3.3. One area of non-compliance remains around the Chief Internal Auditor (the Audit and Compliance Manager) reporting in their own name to the Risk and Audit Scrutiny Committee. Whilst the annual assurance report is in the name of the Chief Internal Auditor, in line with South Lanarkshire Council protocol, other reports are presented in the name of the Executive Director (Finance and Corporate Resources). Despite this being non-compliant, from a PSIAS perspective, it is not considered to impair the independence of the function or the role of the Chief Internal Auditor. Role of the Head of Internal Audit 3.4. In addition to the requirements placed on the Chief Internal Auditor by PSIAS, a review of the Audit and Compliance Manager role in SLC using the Chartered Institute of Public Finance and Accountancy (CIPFA) Statement “The Role of the Head of Internal Audit” was completed again in 2024/2025. Using as a benchmark, the 5 principles that define the core activities and behaviours that belong to the role of the Chief Internal Auditor in public service organisations and the arrangements needed to support them, the review confirmed core responsibilities were delivered in the year consistent with PSIAS requirements. Purpose and Approach of the Service 3.5. Internal Audit forms part of the Council’s wider governance framework and its primary objective is to evaluate and improve the effectiveness of governance, risk management and control processes. As a function, it does this by a delivering a programme of audit assignments and using the output from these reviews to inform an annual audit opinion on the effectiveness of the Council’s framework of governance, risk management and control arrangements. 3.6. During 2024/2025, there has been a focus on providing real-time advice and support in the development of new systems alongside the delivery of a programme of core internal audit assignments. Around 20% of all available time has been focussed in two main areas; implementation of Oracle Fusion and the provision of advice and guidance. In doing so, the function has actively supported and enhanced the Council’s operations and contributed to overall strategic objectives. 3.7. Around a further 10% of available time has been spent developing data analytical tools, assessing how Power BI may be used in the future, and in delivering the National Fraud Initiative, the UK-wide anti-fraud exercise. Along with a core programme of audit assignments, the function has delivered a service that aligns to the strategies, objectives, and risks of the Council. 3.8. Throughout the year, Internal Audit has reported to the Council’s Risk and Audit Scrutiny Committee (RASC). Reports to the RASC have detailed the findings from each finalised assignment in conjunction with information in relation to Internal Audit activity’s purpose, authority, responsibility and performance relative to the 2024/2025 Audit Plan. Link to Council’s Objectives and Top Risks 3.9. As a function, Internal Audit seeks to link to the Council’s Connect Value of ‘accountable, effective, efficient and transparent’ which underpins the Council’s overall vision ‘to improve the lives and prospects of everyone in South Lanarkshire’. 8
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3.10. In addition to Connect, assignments within the Audit Plan are linked to the Council’s top risks and to wider strategic risks. The Plan cannot cover all the Council’s top risks nor would an audit necessarily add value to the management of some of these risks. Assignments are prioritised to ensure a correct focus and that time is directed towards areas where an independent review would add greatest value. Top risk coverage across 2024/2025 is set out in Table 1. Table 1 4. Internal Audit Workload and Performance 2024/2025 Workload 4.1. The 2024/2025 Audit Plan, presented to RASC on 26 March 2024, set out a programme of audits to be delivered in the financial year. Progress with the delivery of the 44 assignments in the 2024/2025 Audit Plan1 is set out in Table 2 below with audit assignments2 relating to investigative work still in progress at 30 April 2025. Each of the audits, undertaken in the year, were conducted in conformance with PSIAS. Table 2 4.2. The function engaged with Council Services throughout the year to ensure the Audit Plan, agreed at the outset, continued to address known and emerging risks as the year progressed. Table 3 sets out planned v actual days with the differential in days relating to an unplanned secondment to the Election Office in 2024/2025. Table 4 sets out overall productivity which was marginally below target and Table 5, an analysis of non-productive time in the year. Table 3 1 A further 29 assignments were delivered for External Clients in 2024/2025 with separate audit plans approved by External Client Boards and audit committees. Progress with delivery assignments is reported throughout the year to senior management, Board and Committees. 2024/2025 annual reports will be presented in the period April – September 2025. 2 Outstanding assignments relate to investigative work and anti-fraud monitoring of lost or missing devices 0 2 4 6 8 10 12 14 16 18 20 Top Risks Covered Top Risks Not Covered Top Risk Coverage 96.30% 3.70% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Draft Report Work in Progress Audit Plan to Draft Report 1,258 1,287 1,200 1,225 1,250 1,275 1,300 Actual Days Delivered Target Planned v Actual Days 9
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Table 4 Table 5 4.3. The Plan is split across 3 main areas, SLC Routine Assignments, SLC Investigative Assignments and External Clients. Table 6 sets out the planned verses actual allocation of time across these 3 areas. This broadly aligned with External Client time delivered in full and a marginal reallocation of days from routine to investigative assignments to reflect the workload in 2024/2025. Table 6 2024/2025 Performance 4.4. Audit time is split across Resources (albeit not equally on an annual basis). Table 7 sets out the number of assignments per lead Resource3. Aside from delivery of the Plan, the effective and efficient performance of the team is measured by delivering assignments within the budgeted number of days and by draft reports being issued timeously after audit testing has been completed. Tables 8 and 9 set out performance against a target of 80% for each. 3 Those designated as ‘All’ relate to Cross-Resource audits. 79.42% 80.00% 75.00% 76.00% 77.00% 78.00% 79.00% 80.00% 81.00% Actual Productivity Target Productivity Productivity 16% 2% 37% 31% 14% Non-Productive Time Plan Admin Perfomance Monitoring Admin Team Meetings/Personnel Tasks Training 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% Routine Investigative External Clients Planned v Actual Split of Audit Plan Actual Planned 10
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Table 7 Table 8 Table 9 4.5. The Committee is asked to note Internal Audit’s workload and performance in the year to 31 March 2025 and that both were sufficient to support the audit opinion expressed within this report. 5. Basis of Audit Opinion 5.1. The opinion expressed within the report (at 6.4) has been based, primarily, on the output from the 2024/2025 Internal Audit Plan as well as reports that have been issued by the Council’s external auditors, regulators and inspectors during the year. Area of Assurance – Governance 5.2. Good governance arrangements are crucial within any organisation as this promotes accountability, transparency and effective decision-making, and leads to the delivery of intended outcomes and achievement of organisational objectives. The audit opinion includes assurances around the effectiveness of the Council’s governance arrangements. The findings that support the overall assessment are detailed in paragraphs 5.3 to 5.8 with a summary of key assurances below. Completion of routine governance tasks Delivery of internal audit actions Delivery of external audit actions Development of a refreshed fraud awareness programme 0 2 4 6 8 10 12 14 16 18 CER EDR FCR HTR SWR All Number of Audit Assignments 72.73% 12.12% 15.15% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% In budget Marginally outwith budget Outwith budget Assignments Within Budget 96.97% 3.03% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Draft reports within timescales Draft report outwith timescales Draft Reports Issued On Time 11
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5.3. Routine governance tasks have been delivered throughout the year including participation in the process to draft the Council’s Annual Governance Statement. Assurance around effective governance comes from this annual exercise that assesses the effectiveness of the governance arrangements within South Lanarkshire Council. An assurance mapping process is undertaken, in conjunction with the Good Governance Group, to inform the Council’s Annual Governance Statement. 5.4. Within individual Director’s Statement of Assurance, Resources have indicated a commitment to deliver against the recommendations of external auditors and other external review agencies, and report progress to Committees and Boards. Good governance is demonstrated by the timeous implementation of actions and recommendations made by both internal and external audit and external inspectors. 5.5. PSIAS places a responsibility for monitoring progress with the delivery of internal audit actions on the Chief Internal Auditor to ensure that recommendations are effectively implemented. Relatively few audit actions fell due in 2024/2025 reflecting the legacy impact of COVID on routine internal audit plans and the Internal Audit resources utilised in the project to implement Oracle Fusion. Although relatively few in 2024/2025, Council-wide, all internal audit actions were advised to be delivered on time. This is tested via a programme of formal follow-up that has been extended in 2024/2025 to capture follow up work that was deferred during COVID. The majority of follow up work will be concluded in 2025/2026 and will provide an opportunity to identify actions where implementation cannot be fully evidenced, or the action is no longer relevant. Where appropriate, revised actions will be agreed and tracked. 5.6. Audit actions also arise from external auditors. The Council’s External Auditor undertook the 2023/2024 financial audit during 2024/2025 and provided an unqualified opinion in relation to the Council’s financial statements. There were 6, separate improvement actions identified by External Audit, all of which have been implemented by 31 March 2025. There has been no formal interim audit output for 2024/2025. Internal Audit have liaised with External Audit periodically throughout the year and have collated financial year-end data extracts to assist auditors. 5.7. Audit Scotland also publish wider Public Sector reports throughout the year. Where appropriate, the key messages and their application to SLC are reported to Committees. 5.8. The final area of governance assurance relates to raising fraud awareness. A formal programme of communications throughout the year including routine reminders around the declaration of conflicts of interest, briefings on the NFI exercise, dissemination of general and topical fraud awareness issues and an annual presentation to the Risk Sponsors Group is being developed. This programme will commence in June 2025 and run throughout 2025/2026. Area of Assurance – Risk Management 5.9. An effective risk management framework ensures the Council understands and mitigates potential threats to support continuity of service and the delivery of stated objectives. By addressing risks, financial and operational impacts can be managed, and reputational damage minimised. The audit opinion expresses assurances in respect of the Council’s risk management arrangements. The findings that support the overall assessment are detailed in paragraphs 5.10 to 5.29 with a summary of key assurances below. 12
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Development of three lines methodology to analyse and improve controls Update and review of fraud risk registers Review of evolving cyber risk and controls to mitigate Review of process to re-fresh business continuity plans Review of progress in delivering sustainability targets and actions 5.10. Work to categorise controls that mitigate the Council’s top risks concluded in 2024/2025 using the Institute of Internal Auditors ‘three lines of defence’ methodology. This framework recognises that different parts and levels of the organisation play complementary roles in risk management. Controls that form the first line of defence sit at a Service level with the second line of defence being those that ‘oversee’ (Senior Management, Committees etc). The final level is that of independent assurance provided by internal and external audit or external inspectors. Good risk management will evidence controls across all ‘lines’. This analysis has informed the overall review process that determines the Council’s top risks and how these can be effectively managed. 5.11. Resource Fraud Risk Registers have again been reviewed and updated with work in progress using the same ‘three lines of defence’ format. Going forward, the review of these registers will align to the timetable of that of the Council’s top risks. 5.12. Cyber Security remains a significant risk with an attack possible, despite controls being in place resulting in, potentially, significant reputational, operational and financial impact. Recent coverage of cross-sector attacks has highlighted that vulnerabilities can be exploited to such an extent that normal operation is suspended. It is recognised, that, disruption in terms of the time that would elapse over a period of restoration, testing and establishing of a live production environment is, potentially, an area which cannot be fully mitigated. The focus remains on strengthening cyber response preparedness. 5.13. Key controls and arrangements to manage are in place in relation to preventing, preparing for, detecting, and managing an attack. A programme to replace legacy systems and hardware is progressing to allow the award of accreditations. Improving employee awareness is a key focus along with the screening of emails to reduce spam. 5.14. Specialist cyber support is available with the Council engaging with the National Cyber Security Centre to further bolster these arrangements and supply chain cyber resilience is being reviewed to strengthen external suppliers’ cyber preparedness. 5.15. Network segmentation is in place and system prioritisation has been considered and reflected in overall plans. 5.16. A management protocol for use in the event of a cyber-attack is in place for SLC that is the subject of ongoing review. A revised action plan has been agreed. It is recommended that progress continues to be monitored. 5.17. In parallel, revised Business Continuity plans outline important arrangements and considerations for Resources in the event of ongoing incidents (that disrupt business as usual) and around how this is managed during the recovery period. Work to fully revise continuity plans is in progress and being monitored by the SLC Resilience Team. 13
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5.18. It is intended that Resource continuity plans should pay proper cognisance to the impact of cyber incidents on business continuity and the prioritisation of systems in a recovery phase. Resource risk registers are being reviewed to ensure that they capture the risks and controls then required to mitigate. 5.19. Follow-up work in this area during 2024/2025 has identified that the Resilience Team continue to work with Heads of Service to ensure their plans and arrangements reflect recommended practice. 5.20. The Public Switched Telephone Network (PSTN) switch-off in the UK, when all remaining analogue services will be discontinued, is now scheduled for 2027, having been extended from the original 2025 deadline. With South Lanarkshire, community alarm service users rely on analogue alert alarms, which will become incompatible. SLC has established Analogue to Digital programme to manage this transition. As part of the plan, a digital alarm implementation team has been created to facilitate the shift to a modern and effective telecare service. Internal Audit have been advised that the programme is on course for completion in June 2025 with July to December 2025 set aside for any residual work. 5.21. The strategic Sustainability risk was updated again in 2024/2025 to reflect the fact that the Council’s ability to take the necessary action is continuing to be impacted by funding constraints. Although mitigating controls have been identified, and a series of actions are being taken (across different council strategies and action plans) these are not such as to reduce the risk score significantly. 5.22. The Climate Change (Emissions Reduction Targets) (Scotland) Act 2024 has resulted in the Scottish Government’s (SG) annual and interim targets for cutting greenhouse gas emissions being replaced by a carbon budget-based approach. Several new policies accompanied the new legislation and a new Climate Change Plan for 2025- 2040 is expected. Although SG have now said that their interim target to cut emissions by 75% by 2030 is out of reach, their commitment to net zero by 2045 remains. 5.23. The Council also remains committed to achieving net zero but a report to the Climate Change and Sustainability Committee (CCSC) in March 2025 is clear that the Council will not reach the zero emissions target by 2045 at the current pace of emissions reductions. The current focus for the Council is therefore in finalising the ‘route map’ of how the Council will get to net zero by 2045 with a particular focus on ‘scope 1’ emissions to address the Council’s legal obligations and the recommendations in the Audit Scotland report, Scotland’s councils’ approach to addressing climate change (September 2022). Clear actions, in response to the climate emergency, were reported to the CCSC in March 2025 which require to be underpinned by a comprehensive financial strategy once funding options have been clarified. 5.24. A Local Heat and Energy Efficiency Strategy (LHEES) was approved by CCSC in June 2024 with a continuing target to reduce emissions ‘as much as possible’ until more fixed targets are set out in the route map. Although in its early stages, it is intended to complement and support the Sustainable Development and Climate Change Strategy 2022 to 2027 and also the Community Plan and Local Housing Strategy whilst encompassing the requirements of relevant national policies. 14
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5.25. The LHEES does not commit to any expenditure. Funding options will need to be developed and reported on a project-by-project basis. It is anticipated that resourcing requirements will be reported to the relevant management teams when identified and that the council will use the LHEES to inform the development of capital and revenue programmes. 5.26. An action plan has been developed to support delivery of the LHEES to assist the Council and its partners deliver the changes identified in the Strategy. It covers both SLC properties and properties across South Lanarkshire with a plan for decarbonising heat in buildings and improving their energy efficiency to meet statutory national targets by 2045. 5.27. A key priority for the delivery of the LHEES is for the Council to develop a stakeholder engagement plan, with the Council then working with key stakeholders to progress the actions identified. An energy demand reduction plan is being developed as part of the Asset Management Plan. A paper on progress with the Plan was presented to CCSC in May 2024 noting that some action had been taken. 5.28. Over-arching the Council’s strategy and action plans is the need to ensure consistent consideration of the implications for the residents and communities in South Lanarkshire, in particular, the impact of decisions in areas of existing challenge, such as fuel and food poverty or other areas of inequality. 5.29. It is planned that 2025/2026, will see further incremental steps in the areas of carbon reduction mitigation and adaptation and developments that focus on meeting the needs of the present without compromising the ability of future generations to meet their own needs. Area of Assurance – Internal Control 5.30. Robust internal controls are important, irrespective of the activity or process, with their effective implementation supporting delivery of vital Council services to people and businesses in South Lanarkshire. The audit opinion expresses assurances in respect of the Council’s internal control framework. The findings that support the overall assessment are detailed in paragraphs 5.31 to 5.49 with a summary of key assurances below. Assistance in the pre and post go live period of Oracle Fusion Development of a data matching programme Delivery of a programme of routine audits Expansion of advice and guidance role Completion of investigative assignments Dissemination of fraud alerts Management and delivery of the National Fraud Initiative Exercise 5.31. Around 16% of internal audit resources in 2024/2025 have been utilised to support the staged implementation of Oracle Fusion, a cloud based human resources and financial management system. Most of this time related to assistance, at a function level, to implement new processes alongside providing support across early go live periods; providing analysis around usage and attending the Project Review Board. Recent focus has been on developing reports that Internal Audit use to extract data for the National Fraud Initiative Exercise and that will provide detail spend analysis to inform both routine and investigative assignments. 15
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5.32. Testing around duplicate controls, within the new system, began in 2024/2025 with specific reports produced to allow controls to be tested and confirmed as working as intended. A second phase of testing will continue in 2025/2026 when a formal report will be issued to the Service. 5.33. Project implementation assistance and the testing of duplicate controls was best use of the Oracle Fusion time budget in the 2024/2025 Audit Plan assisting in the critical pre and early post go live period. Plans are now being developed to deliver a rolling programme of audits of the new system functions over future years. 5.34. Separately, data matching of refunds commenced in June 2024 in response to a significant fraud within Aberdeen City Council. A review of controls within SLC established that, although these were robust, they could be enhanced by an independent check on refunds before payments are processed. This exercise is now ongoing across 4 main refund categories with no fraudulent transactions identified to date. 5.35. Other routine audit work, all within Education Resources, has included home education; independent schools and Pupil Equity Funding (PEF). A review of processes around Home Education to ensure that there was evidence of compliance with legislation, published guidance and best practice identified some areas for improvement around the provision of accessible information, processes and adherence to recommended time-scales. The process to place a child in an independent school was separately reviewed to ensure that this procedure is working as intended and that it complied with legislation, delivering outcomes that are in the best interests of the child. Again, some areas for improvement were identified around documentation and general information governance. For both audits, action plans are being agreed. 5.36. In respect of Pupil Equity Funding (PEF), the audit sought to provide assurance that there are robust governance arrangements in place within schools surrounding the planning, approval, monitoring and reporting of PEF spend. It concluded that there was local guidance in place that complimented national guidance albeit there were some minor recommendations made to strengthen this guidance. Schools sampled were found to be preparing school improvement plans that outlined objectives for addressing attainment gaps and that has involved stakeholders in this planning. Separately, schools are preparing a “profile of spend” report and there was evidence of good collaboration with students, parents, and teachers as to how this element of PEF should be spent on. It was recommended that there could be improved correlation of strategic and financial plans. 5.37. PEF spend was generally substantiated by documentation. Schools were reminded of the need to retain a complete audit trail to evidence PEF spend. Schools were found to be monitoring their PEF spend and liaising with Education Resources but it was recommended that specific interventions that contributed to the improvement could be clearer. 5.38. The audit also provided a detailed PEF data analysis report and an action plan agreed to address the required improvements set out in the paragraphs above. 16
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5.39. An audit reviewing a Prioritised Risk and Needs Assessment used by Social Work Resources to assess the need and allocation of aids and adaptations confirmed that there is a process in place using a standard form. Guidance was available and employees trained. Applicants were notified of decisions, generally, in a timely manner and there was evidence of assistance being targeted to areas of greatest need to make best use of available resources. 5.40. Suggested areas for improvement were around the creation of an application log; capturing of data to evidence timescales are met for ‘critical’ assessments with evidence that, for the sample selected, meeting the 48 hour review period was challenging and one that perhaps required a realistic re-set; retaining documentation; ensuring a consistent recording of financial commitments to aid accurate and discrete budget monitoring; validation of all costs to Equipu invoices and improvements in statistical reporting. An action plan is being agreed to address. 5.41. During the year, implementation of actions relating to information governance have been tracked. These will now be formally followed up in 2025/2026 to assess if fully implemented and as to whether audit work is required to assess the nature of the risk and controls that are in place. 5.42. Advice and guidance has been provided throughout the year, including responses to Freedom of Information enquiries; the development of linked spreadsheets to assist with the monitoring of service activity; governance of school funds and the suggestion of practical banking alternatives where there have been local bank branch closures. 5.43. Routine control work also continued through data that was used to inform ‘intelligent’ audit sampling and to provide detailed data to External Audit for the purposes of the Council’s interim 2024/2025 audit (now using data extracted from Oracle Fusion). 5.44. Time spent on investigative work was broadly in line with the planned split of days available across the year (see Table 6). Eight separate, investigative assignments were completed in the year covering processes, financial frauds, grants and complaints about a process. The majority, on investigation, found substance to concerns or allegations and appropriate actions were agreed to address the issue and amend processes going forward. The nature of these concerns were wide ranging and each of these were investigated in line with established fraud procedures and reflecting the Council’s zero tolerance approach to fraud. A detailed report on fraud statistics and activity will be presented separately to RASC. 5.45. External auditors are required to report significant frauds, or suspected frauds, to Audit Scotland, where they were caused or facilitated by weaknesses in public bodies’ internal controls. Frauds and irregularities are considered significant where the value of the loss is over £5,000 or where it is of significance owing to the nature of the activity. 5.46. Audit Scotland routinely report these significant frauds within technical bulletins which also includes detail around improvements to controls to prevent similar frauds occurring. Bulletins are reviewed and cases shared with relevant Services to assess whether controls require amendment. 17
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5.47. Three of the four cases reported related to payroll fraud and the fourth, the most significant, in relation to a Council Tax fraud at Aberdeen City Council which was the subject of a separate report by the Accounts Commission. Given the significance of the fraud, a series of actions were circulated to Local Authorities for review and implementation. Although controls within South Lanarkshire Council were considered to be robust, further monitoring arrangements have now been put in place with Internal Audit facilitating a monthly data analytical review of payments ahead of processing (see 5.34). 5.48. Internal Audit has also monitored fraud alerts through internal and external sources and disseminated information as appropriate. In 2024/2025 these have continued to relate to adhoc issues and have been shared with Council Resources as appropriate. 5.49. In 2024/2025, outcomes of £107,116 from the 2022 NFI Exercise was reported to RASC with the most significant outcome being due to the removal of 256 single person discounts with a value of £82,591. The pattern of outcomes across categories was broadly comparable to previous exercises. Services routinely review the reason for the fraud or error and take corrective action to improve controls. There were no specific trends or patterns that merited a more detailed audit. Data for the 2024 NFI Exercise was uploaded during the year with most matches now returned for investigation across 2025/2026. A report on returned matches and a proposed approach to investigating is presented to RASC in June 2025. 6. Summary of overall assurance and audit opinion Context 6.1. Adequate arrangements exist within SLC to escalate any concerns the Audit and Compliance Manager may have in relation to the level of risk accepted by management or SLC. 6.2. Internal control remains, primarily, a management responsibility to ensure that the Council conducts its business in a manner that has due regard to the principles of good governance. The presence of an internal audit function does not negate the importance of effective internal controls. Internal Audit cannot be expected to give total assurance that control weaknesses or irregularities do not exist. The audit opinion is based upon the work undertaken during the year and knowledge of the Council’s wider governance, risk management and control arrangements. 6.3. Many significant controls are imbedded within systems, and these have been tested throughout the year by a programme of internal and external audit testing. Key controls such as adherence to proper processes and procedures, segregation of duties, application of management checks and robust monitoring are generally vested in people and therefore remain an area of higher inherent risk. These processes continue to be subject to change and all reasonable steps have been taken to gather sufficient evidence to express an audit opinion for this year. There were no audits where the scope of work was restricted and the opinion therefore compromised. Audit Opinion 6.4. In 2024/2025, the Internal Audit opinion is that, overall, reasonable assurance can be placed on the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements for the year ending 31 March 2025. 18
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6.5. The Committee is asked to note the above findings and approve their inclusion in the Council’s Annual Governance Statement. An Annual Internal Statement of Assurance is included at Appendix 1 based on the view of the Council’s own internal audit function. 7. Employee implications 7.1. The Internal Audit service in 2024/2025 was delivered by a team of 8 (FTE 7.34). The team are fully or partly qualified through either the Chartered Institute of Internal Auditors or one of the Consultative Committee of Accountancy Bodies. 7.2. Feedback received in relation to audit assignment is used to highlight areas for training and development. These are progressed on an individual basis as part of the performance development review process. Best practice information is shared, and learning points are discussed throughout the year. 8. Financial implications 8.1. Audit and Compliance Services, during 2024/2025, materially utilised its allocated budget. 9. Future years Data Analytics 9.1. The 2024/2025 Internal Audit Plan sought to continue a return to a more routine programme of work. This has proved challenging in practice, with the implementation of Oracle Fusion requiring significant resource commitment that utilised experienced members of the team. 9.2. The momentum of evolving processes will continue after the implementation of Oracle Fusion with key Social Work and Housing systems planned to go live in 2025/2026. This, together with financial challenges across the Public Sector, means that the Council, like all local authorities, is in a period of transformational change. Investing time to fully develop data analytical tools will prove increasingly important and is being actively considered a part of post-system implementation reviews. A data strategy has been drafted to provide both a structure and focus for future plans. This strategy sets out where data is used, sourced and how we then use this data. It recognises the traditional use of data, how we currently use data analytics and how we want to extend its use. Anticipated outcomes include making more efficient use of time, improved outputs in terms of the provision of assurance across a wider data set and provision of management information as a value add to the audit. Various challenges inhibit progress such as team skills, the cost of interrogative IT tools or data not being in a format or comparable to allow meaningful analysis. Over-arching all of this is the need to act in a way that is compliant with data protection principles. A separate report on the proposed data strategy and approach will be presented to RASC in the second half of 2025/2026. Global Internal Audit Standards 9.3. The new Global Internal Audit Standards (GIAS) were effective from April 2025 with PSIAS the applicable standards for the period covered by this report and for which an audit opinion is expressed. A report on the new Standards was presented to RASC in February 2025. 19
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9.4. The latest external assessment of the function’s compliance with the PSIAS provided assurance that the function operated to expected professional standards. This level of conformance provides a good foundation to transition to the new Standards. Work to progress compliance with the new GIAS has continued throughout 2024/2025 and time has been allowed in the 2025/2026 Internal Audit Plan to fully imbed all requirements of the Standards within the function’s activities. This will include the development of a broader suite of performance indicators, a detailed audit strategy and completion of a wider assurance-mapping exercise. 9.5. Alongside the revised standards, will be the ongoing commitment to compare existing arrangements to wider best practice and report outcomes as appropriate. 9.6. Membership of the Chief Internal Auditor’s Group (SLACIAG) has continued to provide access to a valuable network of internal auditors across Scottish Local Authorities. SLC’s internal audit function has engaged with this Group across 2024/2025 participating in sub-groups that foster an understanding of common risks and approaches in areas such as data analytics and resourcing, and significant, key risks such as sustainability and climate change and financial resilience. 10. Other implications 10.1. Each audit assignment seeks to identify efficiencies and report as part of the audit opinion where appropriate. In practice this often translates to suggesting a more efficient way in which to deliver services. From Resources’ perspective, much of the value added element of an internal audit service is linked to the function’s ability to provide advice and guidance relating to specific queries or the implementation of a new system or process. The new audit standards echo this by defining a wider role for an internal audit function in the provision of advice, insight, oversight and foresight. 10.2. Responding to Services’ requests for assistance and participation in internal working groups is accommodated within the Plan and through contingency time. This aligns to the PSIAS requirement to deliver an effective internal audit service. 10.3. There are no sustainability issues in terms of the information contained in this report. 11. Integrated Impact Assessment and Consultation Requirements 11.1. There is no requirement to carry out an impact assessment in terms of the information contained within this report. 11.2. Resource Heads of Service are consulted in advance of every planned audit assignment and following completion of fieldwork. Resources and elected members are also consulted during preparation of the annual audit plan. Yvonne Douglas Audit and Compliance Manager 2 June 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Previous References Risk Audit Scrutiny Committee - 26 March 2024 (2024/2025 Internal Audit Plan 20
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Risk Audit Scrutiny Committee - 25 June 2024 (Internal Audit Annual Assurance Report 2023/2024) Risk Audit Scrutiny Committee - 24 September 2024 (2022 National Fraud Initiative Exercise) Risk Audit Scrutiny Committee - 24 September 2024 (Fraud Statistics Annual Report 2023/2024 ) Risk Audit Scrutiny Committee - 18 February 2025 (Fraud Statistics Six Monthly Update 2024/2025 ) Risk Audit Scrutiny Committee - 25 June 2024 (2024 National Fraud Initiative Exercise) List of Background Papers 2024/2025 progress reports to the Risk and Audit Scrutiny Committee Figtree statistical and assurance and time recording extracts Public Sector Internal Audit Standards (revised 2017) Fraud statistics and NFI updates Audit Scotland Technical Bulletins 2024/2025 Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 21
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Appendix 1 To the members of South Lanarkshire Council, the Chief Executive and Executive Directors As Audit and Compliance Manager of South Lanarkshire Council, I am pleased to present my annual statement and report on the adequacy and effectiveness of the governance, risk management and internal control systems of the Council for the year ended 31 March 2025. Respective responsibilities of management and internal auditors in relation to governance, risk management and internal control It is the responsibility of the Council’s senior management to establish appropriate and sound systems of governance, risk management and internal control and to monitor the continuing effectiveness of these systems. It is the responsibility of the Audit and Compliance Manager to provide an independent opinion on the adequacy and effectiveness of the governance, risk management and internal control systems of the Council. The Audit and Compliance Manager cannot be expected to give total assurance that control weaknesses or irregularities do not exist but can form an opinion based on work undertaken during the year and knowledge of control systems. The Council’s framework of governance, risk management and internal controls South Lanarkshire Council has a responsibility to ensure its business is conducted in accordance with legislation and proper standards and adheres to and works within a framework of internal values and external principles and standards. The governance framework comprises the systems and processes, culture and values by which the Council is directed and controlled and how it accounts to communities. It enables the Council to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate services and value for money. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and therefore only provides reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks that would prevent the achievement of South Lanarkshire Council’s policies, aims and objectives, to evaluate the likelihood and potential impact of those risks being realised, and to manage them efficiently, effectively and economically. The work of Internal Audit Internal Audit is an independent and objective assurance function established by the Council to review its governance, risk management and internal control arrangements. It objectively examines, evaluates and reports on the adequacy of these arrangements as a contribution to general governance arrangements and more specifically the proper, economic, efficient and effective use of resources. An external assessment of the extent of compliance as part of the Quality Assurance and Improvement Programme was reported in November 2023. The assessment did not identify any significant areas of non-compliance and the section was assessed as continuing to generally conform with the requirements set out in PSIAS. A self-assessment exercise in- year confirmed continuing compliance and that the Internal Audit Service operated in accordance with the Public Sector Internal Audit Standards (PSAIS) (revised 2017) throughout 2024/2025. 22
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The section undertakes an annual programme of work approved by the Risk and Audit Scrutiny Committee. All plans are based on a formal risk evaluation process, which reflects agreed and emerging risks and changes within the Council and is subject to periodic review throughout the year. All internal audit reports identifying risks, areas for improvement and/or non-compliance with expected controls are brought to the attention of management and include appropriate recommendations and agreed action plans. It is management’s responsibility to ensure that proper consideration is given to internal audit reports and that appropriate action is taken to implement audit recommendations. Internal Audit ensure that management has understood agreed actions or assumed the risk of not taking action. A programme of informal and formal follow-up audit assignments provides assurance around the complete and timeous implementation of audit recommendations. Significant matters arising from internal audit work are reported to the Executive Director Finance and Corporate Resources and the Council’s Risk and Audit Scrutiny Committee. Basis of opinion My evaluation of the control environment relates only to South Lanarkshire Council and is informed by a number of sources including internal audit work undertaken during 2024/2025. Limitation of scope No individual audit assignments were specifically limited in scope at the outset but scopes have been amended to reflect the output from the initial risk and control analysis undertaken at the start of each assignment and the resources available. Opinion It is my opinion, based on the above, that overall, reasonable assurance can be placed on the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements for the year ending 31 March 2025. Signature:- Yvonne Douglas BA CA 23 May 2025 23
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Annual Governance Statement for 2024/2025 and Significant Governance Areas Quarter 4 Progress Report 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide the proposed Annual Governance Statement for 2024/2025 for inclusion in the Council’s 2024/2025 Annual Accounts and progress update on significant governance areas for Quarter 4 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendations:- [ (1) that the Annual Governance Statement attached at Appendix 2, due to be included in the Council’s 2024/2025 Annual Report and Statement of Accounts, be approved; and (2) that progress against the significant governance areas identified within the Annual Governance Statement 2023/2024, attached at Appendix 3 be noted. [1recs] 3. Background 3.1. Each year the Council undertakes a comprehensive review of the governance arrangements that are required to support the Council’s financial and operational controls. The annual review of governance arrangements informs the Governance Statement which is included within the Council’s Annual Accounts. 3.2. Good Governance is underpinned by the principles contained in the Delivering Good Governance in Local Government framework and guidance for Scottish Local Authorities which were published in December 2016. The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) established the framework. The Council’s governance assurance framework is detailed at Appendix 1. 3.3. To achieve good governance, the Council should be able to demonstrate that its governance structures comply with the principles contained in the CIPFA/SOLACE framework (referred to as ‘the framework’ from here on) and should, therefore, develop and maintain a Local Code of Governance and governance arrangements reflecting these principles. The Council’s Local Code of Corporate Governance is reviewed and re-published annually. Compliance with the Local Code is reviewed as part of the Annual Review of Governance arrangements and informs the Annual Governance Statement. The Committee considered and approved the updated Local Code at its meeting on 18 February 2025. 4 25
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3.4. The Council’s cross-service Good Governance Group undertakes an annual review of the Council’s governance arrangements through a programme of peer reviews and evaluations to share learning, best practice and ensure consistency in approach (where relevant) across Resources. At the end of the review period, an evaluation of the governance process is completed, and arrangements revised (where relevant) in preparation for the next review. 3.5. Based on good practice highlighted by CIPFA in relation to the publication of Annual Governance Statements, a Good Governance page which provides links to relevant reports and documents is available on the Council’s website. 3.6. The purpose of this report is to provide the Committee with the Annual Governance Statement which is due to be included within the Council’s 2024/2025 Annual Report and Statement of Accounts and an update on progress against the actions highlighted as significant governance areas in the 2023/2024 Annual Governance Statement. 4. Annual Governance Statement 2024/2025 4.1. The Annual Governance Statement for 2024/2025 is attached at Appendix 2. 4.2. The CIPFA guidance which was provided via a webinar that took place in February 2021 set out the impacts on governance arrangements which were to be considered when drafting the 2020/2021 statement. This is kept under review each year, and where relevant other factors are considered in the drafting of the Annual Governance Statement 4.3. The internal assurance opinions which are also set out in Section 6 of the Governance Statement are as follows:- it is the opinion of the Council’s Audit and Compliance Manager that, overall, reasonable assurance can be placed on the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements for the year ending 31 March 2025 it is the opinion of the Council’s Risk Management Service that a good level of assurance can be placed on the Council’s strategic risk control environment and a good level of assurance can be placed on the Council’s operational risk control environment 4.4. Section 7 of the Annual Governance Statement highlights “Significant Governance Areas” which were identified through the Horizon Scanning process and the Director’s Statements of Assurance, and the key actions that are being taken to address these during 2025/2026. The Committee is asked to consider the areas detailed in the summary below. Comments have been added to show where this is new or has been carried forward from the previous statement: - Significant Governance Areas identified in 2024/2025 Comments Information Governance Compliance with statutory and Council performance targets. New. Some improvement in performance has been experienced in 2024/2025, however performance continues to be 26
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below targeted levels across several Resources. Cyber resilience Compliance with legislative and regulatory policy. Carried forward from 2022/2023 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of internal and external services. Carried forward from 2023/2024 Financial Challenges Reduction in real terms Council funding, resulting in difficulties maintaining front line services and taking forward new initiatives. Carried forward from 2022/2023 Homelessness The Council has seen unprecedented need and demand for statutory homelessness services including the need for temporary accommodation. The Service has breached the Unsuitable Accommodation Order in 2024/2025. Presentations levels during 2024/2025 were still high, placing significant pressure on the service and the general services fund. Carried forward from 2023/2024 Sustainable Development and Climate Change Deliver the Sustainable Development and Climate Change Strategy. Carried forward from 2022/2023 Economic Recovery and Renewal Deliver the Economic, ‘Response, Recovery and Renewal’ Strategy. Carried forward from 2022/2023 South Lanarkshire Leisure and Culture (SLLC) Work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability. Carried forward from 2023/2024 Recruitment and Retention Challenges Delivery of the workforce strategy and plans for 2025 to 2027 and a recruitment strategy to provide a framework of improved recruitment actions and standards. In addition, a strategic review of maximising attendance and enhanced Carried forward from 2022/2023 27
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employee support arrangements are in place and well developed. 4.5. The Committee is asked to note that the content of the Annual Governance Statement is subject to scrutiny by the External Auditor and, therefore, may change after approval by the Risk and Audit Scrutiny Committee. However, the final Governance Statement will be resubmitted for approval with the final Annual Accounts. 5. Governance Areas 5.1. Progress on the significant governance areas highlighted within the Annual Governance Statement 2023/2024 is attached at Appendix 3. 5.2. The preparation of the Annual Governance Statement follows completion of the Executive Directors Statements of Assurance supported by the Resource checklists. 5.3. The Good Governance Group did evaluate the governance review process during 2024/2025 and will continue to seek improvements in preparation for the 2025/2026 annual review of governance arrangements. 6. Employee Implications 6.1. Officers will continue to attend the Good Governance Group and will commit time to review and monitor governance and assurance arrangements. 6.2. Officers will be assigned to lead on areas identified as improvement areas. 7. Financial Implications 7.1. There are no financial implications directly associated with this report. 8. Climate Change, Sustainability and Environmental Implications 8.1. There are no significant implications for climate change or sustainability in terms of the information contained in this report. 9. Other Implications 9.1. The Annual Governance Statement will be subject to review by Audit Scotland as part of their consideration of the council’s Annual Report. 9.2. There are no significant issues in terms of risk associated with this report. 10. Integrated Impact Assessment and Consultation Requirements 10.1. All Resources, through senior officers, participate in the progress, monitoring and review of governance arrangements and the preparation of the Annual Governance. Statement. 11.2. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function, or strategy and, therefore, no impact assessment is required. Jackie Taylor Executive Director (Finance and Corporate Resources) 3 June 2025 28
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Link(s) to Council Values/Priorities/Outcomes Values focused on people and their needs working with and respecting others accountable, effective, efficient and transparent ambitious, self-aware and improving fair, open and sustainable excellent employer Priorities we will work to put people first and reduce inequality we will work towards a sustainable future in sustainable places we will work to recover, progress and improve Outcomes our children and young people thrive good quality, suitable and sustainable places to live thriving business, fair jobs and vibrant town centres caring, connected, sustainable communities people live the healthiest lives possible inspiring learners, transforming learning, strengthening partnerships Previous References Risk and Audit Scrutiny Committee – 25 June 2024 (Annual Governance Statement 2022/2023 and Quarter 4 Progress Report) Risk and Audit Scrutiny Committee – 18 February 2025 (Good Governance Update) List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Craig Fergusson, Head of Finance (Transactions) Ext: 4951 (Tel: 01698 454951) E-mail: craig.fergusson@southlanarkshire.gov.uk 29
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Annual Accounts 2025 (1) Good Governance Resource Self-Assessment Draft Statement Final Governance Statement Risk and Audit Scrutiny Committee (RASC) Corporate Management Team (CMT) (11) Group Assurances (8) External Reviews/ Regulation and Inspection Reports (7) Risk Register Monitoring/Reporting (6) Sample checks on Director’s Self-Assessment (4) Complaints/ Comments/ SPSO feedback (3) Executive Directors’ Statement of Assurance (2) Internal Audit Reports/Annual Assurance Report (17) ALEO Good Governance Self-Assessment and Statement of Assurance (16) Information Governance Self- Assessment and Statement of Assurance (15) Community Planning Partnership – Community Plan Progress Report (14) Connect, Resource and Service Plan Progress Reports (other performance reports) (13) Benchmarking Results (12) Performance, Review and Scrutiny Forum Reporting (18) Equality Duty Reporting Reporting Schedule: RASC – 25 June 2025 (19) Self-Assessment Activity (10) Governance Improvement Plan (9) External Audit Reports (20) Annual Report and Public Performance Reports Good Governance Group Minutes (5) Assessment of compliance with the Local Code of Corporate Governance Appendix 1 30
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Appendix 2 South Lanarkshire Council Annual Governance Statement 2024/2025 1. Scope of responsibility The residents of South Lanarkshire expect the Council to conduct its business in a lawful and transparent way. In particular, the Council has a duty to safeguard public money and account for it; and to continuously review and improve how its functions are discharged, focussing on the priorities of economy, efficiency, and effectiveness. The Council is responsible for putting in place proper arrangements for the governance of its activities, facilitating the effective exercise of its functions including clear arrangements for the management of risk. A Local Code of Corporate Governance (referred to as the “Code” from here on) has been approved and adopted. The Code is reviewed and updated annually and is consistent with the seven core principles of the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) framework entitled ‘Delivering Good Governance in Local Government’. This statement explains how the Council has complied with the Code during 2024/2025 and meets legislative requirements to include the Annual Governance Statement within the Annual Accounts. 2. The purpose of the council The Council Plan 2022-2027 - South Lanarkshire Council sets out the Council’s vision, values and objectives and what difference this will make to the residents and communities of South Lanarkshire. The Council Plan which was informed by the views of South Lanarkshire residents and information from many other sources including local community plans, face to face discussions, online feedback, feedback from Community Groups, Community events and surveys was approved by Council in June 2022. The Council is also a statutory Community Planning Partner and the Community Plan 2022- 2023 (Community Planning) provides a common vision for the South Lanarkshire Community Planning Partnership and sets out how the partners aim to achieve that vision. The Council has set the framework for strong corporate governance by having a clear vision and values which are outlined below: - Our vision is to improve the lives and prospects of everyone in South Lanarkshire. Our priorities are: • People – we will work to put people first and reduce inequality. • Progress – we will work to recover, progress and improve. • Planet – we will work towards a sustainable future in sustainable places. Our outcomes will be: • Communities and environment - Caring, connected, sustainable communities. 31
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• Education and learning - Inspiring learners, transforming learning, strengthening partnerships. • Health and wellbeing - People live the healthiest lives possible. • Children and young people - Our children and young people thrive. • Housing and land - Good quality, suitable and sustainable places to live. • Our economy - Thriving business, fair jobs and vibrant town centres. Our values are: • Focused on people and their needs • Working with and respecting others • Accountable, effective, efficient and transparent • Ambitious, self-aware and improving • Fair, open and sustainable • Excellent employer 3. The purpose of the Council’s governance framework The governance framework comprises of the culture, values, systems, and processes by which the council is directed and controlled. It describes the way the Council is accountable to communities. It enables the Council to monitor the achievement of its strategic objectives and consider whether these objectives have led to the delivery of appropriate and cost- effective services. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It is based on an ongoing process designed to identify and prioritise the risks to the achievement of the council’s aims and objectives by evaluating the likelihood and potential impact of those risks being realised. This enables the Council to manage risk efficiently, effectively, and economically. The governance framework has been in place at South Lanarkshire Council for the year ended 31 March 2025 and up to the date of approval of the Annual Report and Accounts. 4. How the Council monitors and evaluates the effectiveness of its governance arrangements? The Council annually reviews the effectiveness of its governance arrangements. The key sources of assurance that inform this review and underpin the statements made within this document are shown in the diagram below. 32
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2024/25 Annual Governance Assurance Framework 5. Key elements of the Council’s governance assurance framework The Council aims to achieve good standards of governance by adhering to the seven national principles below, which form the basis of the Council’s Code. These principles are used each year to evaluate governance arrangements and identify areas for improvement. Annual Accounts 2025 (1) Good Governance Resource Self-Assessment Draft Statement Final Governance Statement Risk and Audit Scrutiny Committee (RASC) Corporate Management Team (CMT) (11) Group Assurances (8) External Reviews/ Regulation and Inspection Reports (7) Risk Register Monitoring/Reporting (6) Sample checks on Director’s Self-Assessment (4) Complaints/ Comments/ SPSO feedback (3) Executive Directors’ Statement of Assurance (2) Internal Audit Reports/Annual Assurance Report (17) ALEO Good Governance Self-Assessment and Statement of Assurance (16) Information Governance Self- Assessment and Statement of Assurance (15) Community Planning Partnership – Community Plan Progress Report (14) Connect, Resource and Service Plan Progress Reports (other performance reports) (13) Benchmarking Results (12) Performance, Review and Scrutiny Forum Reporting (18) Equality Duty Reporting Reporting Schedule: RASC – 25 June 2025 (19) Self-Assessment Activity (10) Governance Improvement Plan (9) External Audit Reports (20) Annual Report and Public Performance Reports Good Governance Group Minutes (5) Assessment of compliance with the Local Code of Corporate Governance 33
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The following tables demonstrates how the council has complied with these principles and provides assurance as to how they are met. Significant elements of the systems and processes that comprise the council’s governance arrangements and important changes/ developments are described. Links to the key Council documents referred to below can be found in Section 2 of the Code. Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law Links to Council’s values: • Accountable, effective, efficient, and transparent; Working with and respecting others How we do this: • The Council’s values and objectives provide clear direction to councillors and employees and are embedded in all policies and processes. • Standards of conduct and integrity were promoted through the national Code of Conduct for Councillors and by the Standards and Procedures Advisory Forum. This is supplemented by role profiles which have a core accountability to maintain the highest standards of conduct. • The employee Code of Conduct outlines standards of conduct and integrity. All breaches including reported cases of suspected unethical behaviour and non-compliance with the law/policy were investigated through the employee disciplinary process and the recommended actions taken. • Professional Codes of Conduct ensured that ethical standards were maintained, and all breaches were investigated by the governing body. • To support integrity in decision making, the Council has a number of Committee procedural documents including decision making protocols known as the Scheme of Delegation, terms of reference documents, standing orders on procedures and contracts and financial regulations. • To ensure openness and transparency agendas and Committee reports are published to the council website at least five working days ahead of the scheduled meeting dates and any minutes of decisions taken by the Chief Executive during any period when committee meetings are suspended are publicised on the Council website. Committee meetings are live streamed to the Council’s YouTube channel. • To ensure openness and transparency in decision making processes, all declarations of interest made by councillors at meetings were recorded and made available online. • There are a range of policies such as the Counter Fraud, Bribery and Corruption Policy Statement and Strategy. These continue to be updated to reflect best practice and support a culture of ethical behaviour amongst employees and councillors. • Health and Safety compliance during 2024/2025 was assessed as being within the top rating band of “good”. • Legal Services maintained an overview of legislation and regulations and worked with services to ensure compliance. 34
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Principle B: Ensuring openness and comprehensive stakeholder engagement Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs; Working with and respecting others How we do this: • To ensure transparency and openness in decision making processes, all agendas, reports, and decisions were published on the Council’s website and printed copies were available for public inspection for all Committee and Forum meetings (except the Standards and Procedures Advisory Forum). From April 2021 all Committee meetings were live streamed to the Council’s YouTube channel http://bit.ly/SL_Committees. From August 2021 all Forum meetings have been live streamed. • The Committee Management Information System allows members of the public to register and be notified when Committee and forum papers are published. The system also facilitates the creation of online petitions to increase the potential reach of signatories. • The work of the Council and key information from our partners is communicated regularly using a range of communication channels. The South Lanarkshire View pages on the Council website provide a dedicated source of local information and news for communities. A variety of social media channels are used to communicate updates and share information. • A ‘Let’s Talk South Lanarkshire’ campaign has been established and was used to engage local people in an initial discussion about their experiences of the pandemic and continues to be used for ongoing dialogue with communities on both the Council and community planning priorities. • The Council’s Community Engagement Team continue their work to increase stakeholder engagement and involvement in decision making processes through the development of new Community Planning Partnership Neighbourhood Plans which are aimed at improving outcomes and reducing inequalities. • The Community Planning Partnership published its first Community Engagement and Participation Strategy 2020-2025 which is also available online in BSL and the Council has produced an online course for employees to complement this. • A partnership Participation and Engagement Group has been established to ensure that there is a consistent and co-ordinated approach to engaging with communities. • The Council carried out circa 50 surveys and engagement activities with residents, employees, and partners, and through the council’s Citizens Panel to inform policy and service delivery. Further information on our surveys is published on the Council’s website. • To ensure inclusivity and help shape service delivery, the Council co-ordinates regular engagement with targeted groups of people such as young people, older people, people with disabilities, unpaid carers, black and ethnic minorities, etc. Groups considered items such as the budget consultation, rent setting and performance reporting. • The Participation Requests and Community Asset Transfer processes support communities to engage with the Council to improve local outcomes. • The Council’s performance Spotlights summarise what the Council has achieved and the Public Performance Reports provide a comprehensive overview of service performance. These, along with the council’s Benchmarking report demonstrate the 35
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Council’s commitment to continuous improvement and achieving Best Value; summarise the progress that the council has made in meeting its priorities and how it is performing locally and nationally. • The Council’s Digital Strategy 2022 to 2027 sets out the overall approach to digital for the Council. A key objective within the strategy is to assist those people who are unable to get online to access services digitally. The Council also leads on the Digital Inclusion Sub Group, which reports into the Community Planning Partnership. • A comprehensive range of information on how the Council operates is available on the website. The Freedom of Information Publication Scheme ensures that key information about how the council works is accessible to the public. 36
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Principle C: Defining outcomes in terms of sustainable, economic, social, and environmental benefits Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs How we do this: • The Council has a Capital Strategy that has a long-term ambition on future capital investment (up to 2027/2028) and a capital programme agreed for 2024/2025. This document is underpinned by a suite of Asset Management Plans which are aligned with the council’s objectives and focus on creating an efficient, fit-for-purpose and sustainable core estate that delivers best value in terms of investment, running costs and environmental impact. • The Council Plan 2022 to 2027 and Community Plan 2022 to 2032 have clearly defined economic, social, and environmental outcomes to be delivered during the period. • A Community Wealth Building Strategy setting out the Council’s ambitions in relation to spending, workforce, land and property, finance and building the generative economy was approved in March 2021. A Community Wealth Building Commission was established to oversee the implementation of the Strategy, with the Commission receiving an annual report on progress. A Community Wealth Building Progress Group has been set up to ensure that timescales within the action plan are met. • The CWB Strategy is supported by an action plan which is reviewed annually, with progress reported to the Commission at Q2 and Q4 via the council’s Improve system. • Annual Resource Plans which deliver the objectives of the Council Plan were reviewed and updated. These plans outline the outcomes and actions to be achieved within the year and reference linkages with other key strategic plans of the Council and partnership plans. • The Sustainable Development and Climate Change Strategy 2022-27 was approved by the Council in June 2022 and which sets out the Council’s strategic vision ,themes and priorities in terms of the Council, environment and communities for sustainable development and climate change during the period was developed using the principles of the United Nation’s Sustainable Development Goals and to reduce the council’s contribution to global warming. • The Council’s Climate Change and Sustainability Committee oversees the delivery of the Sustainable Development and Climate Change Strategy 2022-2027,the Council’s transition to carbon neutrality and climate resilience. • The Council’s Procurement Strategy 2023-28 which is complemented by an annual action plan, sets out how value for money, national and local priorities will be delivered. It also demonstrates how the Council will deliver the wider social, economic, and environmental aims of procurement as required by the sustainable procurement duty. • Sustainability principles are embedded in procurement processes and in recognition of the importance of our suppliers in achieving the Council’s aim to become more sustainable. • Strategic Environmental Assessments (SEAs) were completed for all relevant Council led policies, plans and strategies developed during 2024/2025. • The South Lanarkshire Local Development Plan 2 was adopted by the Council on 9 April 2021. The spatial strategy of the plan is to encourage sustainable economic growth and 37
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regeneration, a move towards a low carbon economy, protect the natural and historic environment and mitigate against the impacts of climate change. • A summary of the findings resulting from Integrated Impact Assessments - South Lanarkshire Council Integrated Impact Assessments and Equality Impact Assessments of the Council’s key decisions on service users, communities and businesses have been published on the Council’s website. • Strategic decisions of the Council have been subject to a Fairer Scotland Impact Assessment which considers how inequalities of outcome can be reduced. 38
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Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Focused on people and their needs; Working with and respecting others How we do this: • There has been a programme of transformational reviews undertaken over recent years to identify savings and help manage balancing the Council’s budget. This programme is overseen by the Corporate Management Team with individual reviews led by Head of Service and sponsored by Executive Directors. Frameworks are in place for holding discussions with key stakeholders. Savings achievements are monitored monthly and reported to the Corporate Management Team quarterly. • The Financial Strategy which is aligned with the Council’s objectives was updated during the year to reflect the latest internal and external influences. This plan sets out the assumptions in terms of commitments, grant funding and efficiency requirement and demonstrates sound financial management and the ability to address projected funding gaps. • The annual budget setting consultations took place with members of the public, groups and the Council’s partners in order to inform the budget process. The annual budget is open to scrutiny and amendment by councillors until the approval of the final budget. • The Council’s Performance Management Framework has ensured that progress against intended outcomes has been regularly reported to Management Teams; Committees; and the Performance and Review Scrutiny Forum. Decisions and actions to address performance issues have been taken and monitored to ensure that they have been effective. • The Council has complied with its statutory and regulatory reporting requirements during the year. • The Public Bodies (Joint Working) (Scotland) Act 2014 sets out those Adult Care Services that are delegated to the Integration Joint Board (IJB) as set out in the South Lanarkshire Health & Social Care Integration Scheme. These services continue to be operationally delivered by the Council in line with the strategic direction set out in the Strategic Commissioning Plan and IJB Directions. • The Council considers the specification and achievement of community benefits, which focus on the health, economic, social, and environmental wellbeing of the South Lanarkshire area, when awarding contracts. • To improve efficiency and effectiveness, the Council is the lead authority for a range of collaborative projects and services delivered through the Clyde Valley Learning and Development Group. We also work closely with, and share services with partners including SLLC, IJB and Seemis. 39
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Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Excellent employer; Focused on people and their needs; Working with and respecting others How we do this: • A Leadership Challenge Programme which is linked to succession planning was rolled out during 2023-24, and this is continuing. • Learning and Development programmes were revised and employees at all levels can now access optional accredited management qualifications. • Training requirements were identified and online learning and development opportunities including webinars and e-briefings were developed and offered to all councillors. • A review of the approach to agile working commenced in 2024 and is expected to conclude in 2025. • A range of policies and activities are in place to support the Health and Wellbeing of employees including physical and mental health and these have been regularly communicated. Online wellbeing events were held in response to the new ways of working. • The Council recognises that skilled and motivated employees are a key asset. All employees have an annual performance appraisal which links to the Council values and a Personal Development Plan. The council offers a range of training interventions to support employee development. • The Council has a comprehensive and coordinated approach to workforce planning which also supports succession planning. Each Resource reviews their workforce plan and related action plan to better understand workforce capacity issues, further challenges, and opportunities to ensure that resources are in the right place, at the right time and people have the right skills. The Council Workforce Strategy and Planning process provides the framework for workforce planning in the Council. The Strategy and Plans are aligned to current and future Council service needs and details the approach by the Council to ensure that the workforce required is in place to meet those needs. • Senior Managers have overseen the annual scrutiny of the Council’s assets through the review of a suite of Asset Management Plans. Service Asset Management Plans have been developed in line with CIPFA guidance and these feed into the Corporate Asset Management Plan which outlines priorities and provides an overview of how the Council has performed in this area. • The Council’s Scheme of Delegation, Financial Regulations, Standing Orders on Contracts and Terms of Reference ensured that Committees, officers, and statutory officers were clear on the decisions that could be made within their area of authority. A Mid-Term Review of these arrangements having been concluded in 2024. This is supplemented by councillor’s role profiles which outline the key purpose, specific and core accountabilities for each role. • The Council continues to work with a range of public sector, business, and academic partners to improve outcomes for those living and working in South Lanarkshire. Strategic Partnerships include the Community Planning Partnership and the Glasgow City Region City Deal. 40
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• Local Government Benchmarking Framework (LGBF) results continue to be reported to the Performance Review and Scrutiny Forum, containing all LGBF indicators. As other reporting arrangements mature, the scale of this report may be reduced and the strategic suite of indicators aligned to Council Plan outcomes are featured in an appendix to the Council Plan Q4 report, giving an opportunity to assess the Council’s performance over time and comparative performance in the context of the Council Plan priorities. • Further LGBF indicators will feature in the Council’s public performance reporting, both in the Annual Performance Spotlights and in the PPR pages on the website. These are topic- based and place the LGBF information in a richer context than is possible in the annual LGBF report. The results are analysed and an action plan developed which will be monitored by the Senior Management Team. • To complement this work, an LGBF dashboard has been developed to provide easy access to the LGBF indicators and the narrative that sits alongside them. The dashboard shows time trends for each of the strategic indicators aligned with the council plan outcomes and provides charts comparing SLC performance with both the Scottish and the family group average. • The Council takes a risk-based approach to self-assessment which is used to review and redesign services with a focus on fundamental change. Progress and the impact of improvement activity was reported to the Senior Management Team and the Performance and Review Scrutiny Forum. • The Council has a robust complaints process which is underpinned by national complaints handling standards. Complaints performance was regularly reported to Senior Management and Committee and learning from complaints which is integral to this process is also published on the Council’s website. Complaint handling procedures have been updated in line with national changes and communicated to all employees. 41
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Principle F: Managing risks and performance through robust internal control and strong public financial management Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving How we do this: • The Council, in partnership with Trade Unions, ensured that safe systems of work were in place through a robust risk assessment process, changes to working methods and supply of personal protective equipment. • The Council has put in place comprehensive arrangements for identifying, evaluating, and controlling significant risks which threaten the council’s ability to meet its objectives to deliver services to the public. There is also a robust process in place for compliance monitoring of the Council’s Risk Management Strategy, Resource Risk Registers and Control Plans. • The annual end of year compliance statement evidenced that all Resources were compliant with Risk Management Strategic requirements. • The Council’s Internal Audit Service which complies with Public Sector Internal Audit Standards completed an annual programme of risk-based audits with an objective of providing an opinion on the adequacy and effectiveness of the Council’s risk management, governance, and internal control arrangements. Where improvements were required, action plans were developed and monitored and where necessary follow-up audit work completed. • In response to changes in working practices and the introduction of new systems, Internal Audit has advised on key internal controls that should be maintained. • The Information Governance Board is reasonably satisfied that Resources have followed the Information Governance operational arrangements to promote effective arrangements for the safe collection, storage, use and sharing of data, including processes to safeguard personal data, but this will be the subject of further work in 2025/26, including to work through an action plan approved by the Corporate Management Team and the Information Governance Board. • Information security incidents have continued to be monitored and considered for notification to the Information Commissioner’s Office and are reported to the Corporate Management Team on a quarterly basis and to the Council’s Senior Information Risk Officer (the Executive Director of Finance and Corporate Resources) upon internal notification. Throughout the period, the Council’s Data Protection Officer provided advice and assistance to Resources in relation to meeting their obligations under UK General Data Protection Regulations (GDPR). • The system of internal financial control is based upon the Financial Regulations which set out the rules to ensure robust internal control over the council’s finances. Control is maintained through regular management information, management supervision and a structure of delegation and accountability. • External Audit of the Council’s accounts is robust and a “clean audit certificate” was issued for 2023/2024. • Through a well-established Performance Management Framework, the Council has clearly defined processes in place for the identification, monitoring, and reporting of its objectives to ensure continued effectiveness and the achievement of Best Value. Progress is monitored and reported regularly to both managers and councillors. This includes areas of under-performance and the related improvement actions. 42
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• Trustees of the South Lanarkshire Charitable and Educational Trusts received independent legal training setting out their duties and responsibilities in ensuring that the trusts operate in a manner designed to benefit communities. • The Executive Director of Finance and Corporate Resources is a member of the Council’s Senior Management Team and as such, is integral in all major decisions taken by the Council, and in material matters which are submitted to councillors for decision. This involvement fulfils the expectation of CIPFA in terms of the role of the Chief Financial Officer. • The Council’s existing financial management controls and measures continue to provide comfort on the Council’s financial management and resilience. This includes the preparation of a medium-term strategy presented to members regularly as part of the annual budget process, providing members with the information required to assist budget planning. A report on the Council’s Financial Resilience was presented to the Risk and Audit Scrutiny Committee during 2024/2025. 43
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Principle G: Fair, Open and Sustainable; Implementing good practices in transparency, reporting, and audit to deliver effective accountability Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Working with and respecting others How we do this: • The Good Governance Group has completed the annual review of governance arrangements at resource level and in line with the CIPFA/SOLACE Delivering Good Governance Framework, this review having been reported to the Corporate Management Team and some changes to the previous arrangement having been agreed. Governance improvement actions have also been identified and are included in Resource/Service Action Plans. Progress against actions including those highlighted as significant governance areas for action will be reported to the Senior Management Team and Committee. • In the 2023/2024 annual audit report, the external auditor reported that the Council had in place appropriate arrangements to support good governance and accountability, and they were of the view that governance arrangements remained effective in 2023/24. • All Directors completed their annual Statement of Assurance and relevant assurances have been provided. • The Council prepares and publishes an Annual Governance Statement which is aligned with national guidance and reflects on the adequacy and effectiveness of the Council’s governance arrangements. This is independently considered by External Audit and published with the Annual Accounts and separately on a dedicated governance web page. • The annual review of governance arrangements for the Council’s at Arm’s Length External Organisations (ALEOs) and key external service providers has not highlighted any compliance issues. • The annual review of the Local Code of Corporate Governance was completed, and the revised Code was approved by Committee in February 2025 and re-published on the Council’s website. • All agendas, reports and decisions continue to be published (except those exempt under the Local Government (Scotland) Act 1973) on the Council’s website. All Committee and Forum meetings are livestreamed to the Council’s YouTube page http://bit.ly/SL_Committees. • The Risk and Audit Scrutiny Committee considered the adequacy and effectiveness of the Council’s governance arrangements and internal control environment and approved the Annual Governance Statement and Accounts. • Internal audit activity has continued to be reported to the Senior Management Team and to the Risk and Audit Scrutiny Committee. • Outcomes from external audit and inspection activity was reported to the appropriate Committee and action plans were developed for implementation where required. 44
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6. Review of Effectiveness The review of governance arrangements for 2024/2025 has also considered the following assurance outcomes: - Group Assurances In respect of the Joint Boards, Charities and Companies that fall within the Council’s group boundary, the review of their internal financial control systems is informed by: - • Annual Governance Statements included in the respective financial statements of the Joint Boards. • Assurances from company directors and/or other senior company officials; and • The work of the relevant body’s respective external auditors (and where relevant internal auditors) and other interim reports. The Executive Director of Finance and Corporate Resources, the Council’s Chief Financial Officer, has considered the effectiveness of the group’s internal financial control system for the year ended 31 March 2025. It is the Executive Director of Finance and Corporate Resources’ opinion that reasonable assurance can be placed on its effectiveness. Internal Assurance It is the opinion of the Council’s Risk Management Service that a reasonable level of assurance can be placed on the Council’s strategic risk control environment and a reasonable level of assurance can be placed on the council’s operational risk control environment. It is the opinion of the Council’s Audit and Compliance Manager that, overall, reasonable assurance can be placed on the adequacy and effectiveness of the council’s framework of governance, risk management and control arrangements for the year ending 31 March 2025. 7. Significant Governance Areas The 2023/2024 Annual Governance Statement identified 9 significant governance areas that the Council were working to address. Progress updates can be found on the Council’s website; see the Significant Governance Areas Update Q4 2023/2024. Eight of these areas remain as significant areas of action for the Council moving forward into 2025/2026 and will continue to be monitored as such. Through the 2024/2025 annual governance review, the following areas, which include an outline of the actions being taken to address them, have been identified as significant areas of work for the Council during 2025/2026: - No. Areas identified in 2024/2025 Actions Lead Officer 1 Information Governance Compliance with statutory and Council performance targets. New. Continue to closely monitor performance on information governance including FOI requests and Subject Access requests and data breaches. Review the guidance provided to staff regarding the safe use of Executive Director (Finance and Corporate Resources) 45
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No. Areas identified in 2024/2025 Actions Lead Officer emails and sharing of data supported by regular staff communication. 2 Cyber Resilience Compliance with legislative and regulatory policy A programme of actions to maintain cyber security and resilience in 2025/2026 will include: • Refresh/retiral of legacy systems, network equipment and end user devices (mobile phones, PCs) • Programme of security patching of all systems • Compliance with PSN and Cyber Essentials schemes • Incident response exercising and onboarding of Cyber Incident Response partner • Officer training and awareness (e.g., phishing, passwords) • Data security reviews as part of new system installation and security monitoring Executive Director (Finance and Corporate Resources) 3 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of services, to internal and external service users. This will include existing implementations of Liquidlogic (Social Work) and HOME (Housing and Technical Resources) and solutions to deliver the outputs of the Customer Engagement and Digital Transformation Reviews. Executive Director (Finance and Corporate Resources) 4 Financial Challenges Exceptional increase in costs, reduction in council funding, resulting in difficulties maintaining front line services The Council continues to face a challenging situation in the medium to long-term because of reduced funding in real terms, rising costs and an increase in demand. The Council has developed a medium- term strategy which identifies budget Chief Executive Executive Director (Finance and Corporate Resources) 46
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No. Areas identified in 2024/2025 Actions Lead Officer pressures, future risks and uncertainties, and projects budget gaps to 2027/2028. The Budget Strategy for 2026/2027 and 2027/2028 will be updated and presented to councillors in 2025. A Longer Term Financial Strategy will also be produced during 2025/2026. 5 Homelessness The Homelessness Strategic Action Plan was approved at H&TR Committee on 26 February 2025, for a further year, noting mitigations that the Service have put in place. The Service has breached the Unsuitable Accommodation Order in 2024/25; however, approval was sought at H&TR Committee on 24 April 2024 to enter into partnership with Social Bite and in turn a supported accommodation village is under development. This will help reduce reliance on unsuitable accommodation such as hotels. Other implications such as the Prisoner Early Release, increased asylum and refugee levels, continued removal of local connection feature within the Strategic Action Plan. In relation to the new Housing Bill, the potential new duties of ‘Ask and continue to be monitored as the Bill progresses through parliament as this could have consequences for the service. Executive Director (Housing and Technical Resources) 6 Sustainable Development and Climate Change A new Strategy for 2022 to 2027 was approved by the Council in June 2022 together with the Council Plan and Community Plan. An Action Plan was developed as part of the Strategy, and this continues to be implemented and reviewed annually with progress updates being reported to the Climate Change and Sustainability Committee on a 6 monthly basis. Following a period of public consultation, the Council approved in June 2024 its first Local Heat and Energy Efficiency Strategy (LHEES) for the period 2024 to 2028. The LHEES will be a key Executive Director (Community and Enterprise Resources) 47
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No. Areas identified in 2024/2025 Actions Lead Officer component of a long-term strategy to reduce of carbon emissions and reduce fuel poverty. 7 Economic Strategy A new Economic Strategy 2022 to 2027 was approved by Council in June 2022 as part of a suite of documents accompanying the draft Council Plan and Community Plan. The vision within the Strategy is “to make South Lanarkshire a flourishing, green, dynamic and equitable place for communities, visitors, businesses and investors”. The Strategy is framed around the 3 themes of sustainable, inclusive, economic development- People, Place and Business. Progress on the delivery of the Action Plan will be measured 6-monthly with the results being reported annually to the relevant committees. The Council continues to lead on local economic growth supporting South Lanarkshire businesses and promoting inward investment. The Council has prepared masterplans to support the regeneration of Hamilton and East Kilbride and is now working on the delivery of various projects and liaising with a number of external parties. Executive Director (Community and Enterprise Resources) 8 South Lanarkshire Leisure and Culture Continue to work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability Executive Director (Community and Enterprise Resources) 9 Recruitment and Retention Challenges The labour market has tightened, and employees have more mobility through agile working which is not necessarily tied to a geographical location. In addition, some older workers have reassessed priorities and taken up an option for partial or full retiral earlier than they would have done previously. As a result, there are a number of skills in short supply nationally and this is putting Chief Executive and all Executive Directors 48
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No. Areas identified in 2024/2025 Actions Lead Officer pressure on local government services. Examples of this include planners, environmental health officers, procurement, Social Care and Education posts. South Lanarkshire Council has experienced these issues and is taking the following actions: - • Workforce Strategy and Plans for 2025 to 2027 • A recruitment strategy to provide a framework of improved recruitment actions and standards. • A strategic review of maximising attendance • Enhanced employee support arrangements are in place and well developed 8. Summary The annual review of governance arrangements across the Council and overall compliance with the Council’s Code demonstrate sufficient evidence that the Code’s principles of Delivering Good Governance in Local Government operated effectively, and that the Council complies with its Code. During 2025/2026, steps will be taken to address the significant governance areas highlighted in this statement to further strengthen the council’s governance arrangements and evidence our commitment to continuous improvement. Joe Fagan Leader of the Council Signature: Date: Paul Manning Chief Executive Signature: Date: 49
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Appendix 3 Annual Governance Statement 2023/2024 – Significant Governance Areas Quarter 4 Update No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update 1 Cyber Resilience Compliance with legislative and regulatory policy A programme of actions to maintain cyber security and resilience in 2024/2025 will include: • Refresh/retiral of legacy systems, network equipment and end user devices (mobile phones, PCs) • Programme of security patching of all systems • Compliance with PSN and Cyber Essentials schemes • Incident response • Officer training and awareness ( for example, phishing) • Data security reviews as part of new system installation and security monitoring Executive Director of Finance and Corporate Resources • Refresh programme is ongoing, retiral of legacy systems is monitored and reported on by the IT Security team on a fortnightly basis and to the IT SMT monthly. • Enhancements to patching processes continue to follow best practice and provide protections to ever changing threats. • Council is aligned to PSN and Cyber Essentials Plus standards. • Incident response processes and supply chain is reviewed by the IT management team on an annual basis working with the Resilience team. • Ongoing staff awareness driven by regular campaigns such as Cyber Scotland week and posts. • Security reviews are embedded into the onboarding of new systems and a 50
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update enhanced Change Control process has been implemented 2 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of services, to internal and external service users. This will include the implementation of Oracle Fusion (Finance and Corporate Resources), Liquidlogic (Social Work) and HOME (Housing and Technical Resources). Executive Director of Finance and Corporate Resources • Major system upgrades progressing. Work continues on LiquidLogic and Home projects. Formal Project Review Boards are in place for all major projects planned or underway. • Digital Transformation programme continues to develop with work on governance, transformation opportunities well underway. Project Review Board and separate steering group will be put in place in Q1 2025/2026. Processing modelling platform procurement and implemented. • Work to transform Customer Engagement continues with consultant onboarded and action plan being delivered. 3 Financial Challenges Exceptional increase in costs, reduction in council funding, resulting in difficulties maintaining front line services The Council faces a challenging situation in the medium to long-term because of reduced funding in real terms, rising costs and an increase in demand. The Council has developed a long-term strategy which identifies budget pressures, future risks and uncertainties, and projects budget gaps to 2027/2028. Chief Executive Director of Finance and Corporate Resources • Reports on the Council’s financial position and challenges are regularly presented to the Executive Committee and / Council. • Throughout the year, the Budget position for the next 3 years has been reported to 51
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update The Budget Strategy for 2025/2026 will be updated and presented to councillors in 2024. elected members with the first report titled 2025/2026 to 2027/2028 Revenue Budget Strategy presented to the Executive Committee in June 2024. That report focussed on the financial outlook for the next 3 years, highlighting a Budget Gap of £77.275 million. The Budget Gap relating to financial year 2025/2026 was £22.355 million. • On 13 November 2024 a report on the 2025/2026 Revenue Budget Gap and Savings was presented to the Executive Committee, which noted that the budget gap had been reduced to £16.455 million. • The Council’s Budget Working Group has reformed with cross party membership to support preparations for the Council Budget setting in February 2025 and first met in December 2024. • The Budget Strategy was then reviewed following receipt of the Local Government Settlement in December 2024, and an update was provided to 52
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update the Budget Working Group on 9 January 2025 and a Special Executive Committee later that month. This has allowed elected members to consider the Council’s Budget position for the coming year. • Finally, a Budget for 2025/2026 was proposed to elected members at Council on 26 February 2025. An amendment to that Budget was approved which allowed the Council to set a Council Tax rate for the coming year, as well as a balance budget. The implications from setting that Budget on future years was noted at the meeting. • The next step is to provide members with a refreshed Budget Strategy for financial year 2026/2027 to 2027/2028, early in the new financial year. 4 Integration Joint Board – Health and Social Care The need for the Council to deliver the objectives set out in the Integration Joint Board (IJB) The current strategic direction set out and approved by the IJB is detailed within the Strategic Commissioning Plan. The council and NHS Board are required to deploy their resources in line with this strategic direction. Director, Health and Social Care, South Lanarkshire Health, and • The South Lanarkshire University Health and Social Care Partnership has responded to a steady increase in the number of Adult Support Protection (ASP) inquiries year on year with a 53
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update Strategic Commissioning Plan 2022 to 2025 The IJB issues Directions that set out the key actions to be delivered by the Council. This includes directions in respect of the actions required in order for the IJB to deliver the balanced budget agreed at its meeting in March 2024. The IJB monitors progress in respect of these Directions. Social Care Partnership 39% rise from 2,849 in 2021/2022 to 3,967 in 2024/2025. • Performance in quarter 4 has remained on target, with 93% of inquiries completed within the 5 working day timescale, against a national target of 75%. • The Care Inspectorate has undertaken inspections within McKillop Gardens and David Walker Gardens during the last quarter, awarding gradings of ‘very good’ in all aspects of care inspected. Care at Home teams, including Home Assessment, were also subject to inspection. Feedback was positive throughout with all areas of inspection graded as ‘very good’ or ‘good’ highlighting the impact of a substantial programme of redesign and modernisation of the service over the last five years in response to serious concerns identified by the Care Inspectorate in 2019. The Intermediate Care Service within Blantyre Life received its 54
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update first inspection in February 2025 with gradings of ‘very good’ in all inspected areas. Inspectors found the service had a knowledgeable staff group who supported people to gain independence and achieve their goals and outcomes. • Lanarkshire Carers, the commissioned service for adult carers in South Lanarkshire, engaged with and supported 1,233 carers in quarter 3, identified 301 new carers and supported the completion of 342 Adult Carer Support Plans. The organisation has offered support to 1,015 new carers in the first three quarters of this year. • The IJB approved its Strategic Commissioning Plan 2025 to 2028 at its meeting on 18 March 2025. The Plan sets out a vision for integrated, person- centred health and social care and focuses on five strategic goals: • Nurture • Access 55
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update • Flow • Recovery • Protect 5 Homelessness The Council has seen unprecedented need and demand for statutory homelessness services including the need for temporary accommodation. Presentations levels during 2023/2024 are the highest in the Council since records began, placing significant pressure on the service and the general services fund. A range of mitigations were approved at Housing and Technical Resources (H&TR) Committee on 7 February 2023 and these are now in place with managing and monitoring actions in place. Temporary accommodation solutions continue to be explored to minimise breaches of the unsuitable accommodation order and costs incurred through the use of B&B. Other implications such as the Prisoner Early Release, increased asylum levels, continued removal of local connection and potentially new duties of ‘Ask & Act’ within the new Housing Bill could have consequences for the service. Director of Housing and Technical Resources • The operating context in relation to homelessness continues to be extremely challenging. The prevailing socio-economic conditions adversely impacted upon the ability to prevent homelessness during 2024/2025. This trend has been mirrored nationally. • The Homelessness Strategic Action Plan continues to be the focus, this has been shared with both the Scottish Housing Regulator and the Scottish Government as linked to the national housing emergency. • Whilst there has been an 11% decrease in presentations since 2023/2024, the demands which continue to be placed upon services remain at levels unprecedented prior to the surge in demand. • These actions agreed by committee will continue to be monitored closely, with 56
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update progress updates provided to committee on a regular basis. 6 Sustainable Development and Climate Change A new Strategy for 2022 to 2027 was developed and presented to Council in June 2022 for approval together with the Council Plan and Community Plan. An Action Plan was developed for the first year of the Strategy, and this continues to be implemented and reviewed annually with progress updates being reported to the Climate Change and Sustainability Committee on a 6 monthly basis. Following a period of public consultation, the council will introduce its first Local Heat and Energy Efficiency Strategy (LHEES) in June 2024. Subject to the availability of finance and taking account of the need to address inequalities and just transition, the introduction of the LHEES will be a key component of a long-term strategy to reduce of carbon emissions, and reduce fuel poverty by 2045. Director of Community and Enterprise Resources • The Council’s Sustainable Development and Climate Change (SDCC) Strategy 2022 to 2027 and its accompanying 5-year action plan was developed in 2022. An annual Action Plan sitting under the 5- year Plan is produced each year and reported biannually at Climate Change and Sustainability Committee (CCS). • Delivery of the SDCC action plan provides the main focus for SLC’s sustainable development activity and incorporates actions from across all five Resources. The 2024/2025 Q2 progress report for the SDCC Strategy was presented at CCS Committee on 18 December 2024 with the Q4 update scheduled for 4 June 2025. • The Action Plan for 2025/2026 was approved by CCS Committee on 19 March 2025. This year’s action plan assigns 57
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update each action a thematic focus aligning with the three statutory duties for public bodies: mitigation, adaptation, and acting sustainably. This is the first year this has been carried out and has been done to align with refreshed guidance on statutory duties, better enabling the Council to track action against each duty. • A mid-point review for the 5- year SDCCS Action Plan is planned for 2025 to 2026. It is anticipated that this review will be presented to CCS Committee in September 2025. • Refreshed statutory guidance from the Scottish Government on public bodies climate change duties will inform action in this area at the end of the 2022 to 2027 SDCCS. The sustainability team are beginning to plan how the Council’s future climate change planning can best incorporate new statutory guidance. 7 Economic Strategy The new draft Economic Strategy 2022 to 2027 has been developed and approved by Council on 15 June 2022 as part of a Director of Community and • There have been number of positive economic indicators through the last financial year, 58
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update suite of documents accompanying the draft Council Plan and Community Plan. The vision within the Strategy is “to make South Lanarkshire a flourishing, green, dynamic and equitable place for communities, visitors, businesses and investors”. The Strategy is framed around the 3 themes of sustainable, inclusive, economic development- People, Place and Business. Progress on the delivery of the Action Plan will be measured 6-monthly with the results being reported annually to the relevant committees. The Council will continue to lead on local economic recovery for South Lanarkshire businesses through promotion of local economic support networks and contribution to the pan-Lanarkshire Economic Forum. The Council will also take forward its plans for the regeneration of Hamilton and East Kilbride, and the delivery of projects through its participation in the Glasgow City Region Deal. Enterprise Resources with the investment of the Council a key factor in driving these. An interim report on the Economic Strategy will be presented to the Community and Enterprise committee in the autumn which will capture the details, however these include the following: • Work on the masterplans in both East Kilbride and Hamilton is continuing at pace with significant funding for both masterplans now in place. • Discussions and agreements with key partners continue and it is clear that the investment by the Council in the masterplans has been fundamental to the progress made. • The sale of sites in both East Kilbride and Hamilton to third parties shows the strength of the masterplans in terms of stimulating market confidence in both towns. • The delivery of City Region projects continues in line with programme particularly around the school estate, roads 59
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update improvement projects and the design development of the Larkhall Leisure Centre replacement project. There has been significant market interest in a number of business use sites which again points to the success of these projects and improving market. • There has also been success in securing external funding including the Enabling Business Space fund through the City Region and Regeneration Capital Grant Funding for business space. These are all key indicators that the Council and partners have a strong economic base to continue to build from. 8 South Lanarkshire Leisure and Culture (SLLC) Work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability. Director of Community and Enterprise Resources • A report was presented to the Performance and Review Scrutiny Forum on 27 August 2024 outlining the approach being taken to ensure a successful and impactful leisure and culture service that meets the aims and objectives of the Council, that is more financially sustainable and that 60
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update works towards the ambitions of net zero. • This included a detailed terms of reference for three key workstreams: • a commissioning plan • a long-term estate strategy • an agreed financial relationship between the Council and SLLC • An Elected Members awareness session took place in December 2024 to provide an update on progress against each of these workstreams and detail the next steps towards the vision for a successful partnership. • The draft Commissioning Plan was tabled at Executive Committee on 12 March 2025 and discussed with the SLLC Board on 23 April 2025. The plan is now being finalised with approval targeted for Executive Committee in June 2025. • Work on the other two workstreams is ongoing. An update on the Estates Strategy was also presented to 61
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update Executive Committee on 12 March 2025. 9 Recruitment and Retention Challenges The labour market has tightened and employees have more mobility through agile working which is not necessarily tied to a geographical location. In addition some older workers have reassessed priorities and taken up an option for partial or full retiral earlier than they would have done previously. As a result there are a number of skills in short supply nationally and this is putting pressure on local government services. Examples of this include HGV drivers, procurement and Social Care. The impact on Senior Manager recruitment and retention is also clear and turnover at this level is closely monitored. South Lanarkshire Council has experienced these issues and is taking the following actions: - • Workforce Plans were refreshed to reflect the changed environment by 30 June 2022. The updated plans were reported to the relevant Resource Committees in September and October 2022 and are being delivered. • A grow your own approach is being used in key areas (recruited Chief Executive and all Directors • Work on the Council’s Workforce Strategy and Plan, has been finalised prior to presentation to the Executive Committee in May 2025. This outlines the workforce planning arrangements to enable the Council to have the required workforce in place to deliver the Council vision over the lifecycle of the plan. • Across the Council recruitment challenges and absence levels continue to impact on workforce availability and service delivery. The workforce planning process will identify specific actions in relation to this covering the following: • Strategic approach to the Council’s overall vison for Maximising Attendance. • A Recruitment Strategy to ensure the tools are available to provide suitable candidates and enhance workforce supply. • Resource Workforce plans are currently being 62
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No. Areas identified in 2023/2024 Actions Lead Officer Q4 Progress Update graduates in Procurement), and this will continue • Further increasing social media recruitment and use of job fairs • Employability routes will continue to be defined for skills shortage areas (e.g. social care) • Enhanced employee support arrangements are in place and well developed refreshed and will be presented to the committee from March 2025 onwards. 63
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Unaudited Annual Accounts 2024/2025 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] ♦ advise members of the requirement to consider the unaudited Annual Accounts of the Council and related Charitable Trusts [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that the unaudited Annual Accounts of the Council and related Charitable Trust are presented to Members of this Committee for their consideration, and that they will be submitted to Audit Scotland by the deadline of 30 June 2025, be noted. 3. Background 3.1. The Local Authority Accounts (Scotland) Regulations 2014 require the unaudited Accounts to be submitted to the External Auditor no later than 30 June. The Regulations also require elected members to consider the unaudited accounts at a meeting to be held no later than 31 August. 3.2. The Council’s Terms of Reference deems that the Risk and Audit Scrutiny Committee will formally consider the unaudited Accounts prior to submitting them to the External Auditor and making them available for public inspection. 3.3. This report provides the Council’s unaudited Accounts for Members’ consideration, (Section 4), as well as the related Charitable Accounts (Section 5). 4. Unaudited Accounts – South Lanarkshire Council 4.1. The Council’s unaudited Accounts for 2024/2025 are a statutory document which detail key information on the Council’s expenditure and income for the financial year ended 31 March each year. The Annual Accounts show a number of statements including a Comprehensive Income and Expenditure Statement, Balance Sheet, Movement in Reserves, Cash Flow and supplementary notes. They will also include the Annual Statement of Governance which is presented separately to this Committee. 4.2. The Council’s unaudited Accounts 2025 are included as Appendix 1 to this report for consideration. It is noted that the Accounts also contain the Council’s Group Account position. 4.3. These unaudited Accounts will be available for public inspection between 1 July 2025 and 22 July 2025, as prescribed by the Local Authority Accounts (Scotland) 5 65
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Regulations 2014. They will be available on the Council’s website and can also be provided to any member of the public upon request. Arrangements will be made to provide any information requested as part of this public consultation. The unaudited Accounts will be on the Council’s website from 1 July 2025 until the date the audited Accounts are published. 4.4. Following the audit of the Accounts across the summer months, the audited Annual Accounts will be brought back to this Committee. The scheduled date for the Committee to approve the audited Accounts is 30 September 2025. 4.5. A copy of the unaudited Accounts will be circulated to all elected members for information following submission of the Accounts to the External Auditor by 30 June 2025. 4.6. Restatement of Monitoring Figures Reported: The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Accounting Practice (the Code) introduced an Expenditure and Funding Analysis which must be prepared as part of the main Accounts. The purpose of the statement is to reconcile the monitoring position which will be reported to the Council’s Executive Committee, to the figures reported in the Comprehensive Income and Expenditure Statement, which are presented on an accounting basis. 4.7. A monitoring report on the year-end position of the Council’s Revenue Budget will be presented to the Executive Committee on 25 June 2025. The Executive Committee position shows an additional year-end Revenue Budget surplus of £0.548 million. The report proposes that the Committee approve that £0.040 million of this surplus is transferred to reserves to allow the continuation of the Winter Wishes campaign, and that the remainder (£0.508 million) is transferred to Reserves to assist in managing the risk of a higher pay award than budgeted (this is detailed in a separate report to the Executive Committee in relation to the Budget Strategy 2026/2027 and 2027/2028). This Executive Committee report on the year-end position also seeks approval to transfer funds to reserves to meet future commitments. The information contained in the unaudited Accounts takes into account the year-end position reported in the Executive Committee report, with the requested Transfers to Reserves being subject to the approval of the Executive Committee. If these proposed Transfers are not approved, the Accounts will be amended. 4.8. The position shown in Appendix 2 to this report reflects all of the Transfers to Reserves subject to approval at Executive Committee (25 June 2025), resulting in an overall breakeven position for the year. 4.9. Appendix 2 provides a reconciliation of this final breakeven position, as will be reported to the Council’s Executive Committee (25 June 2025), to the figures included in the Council’s Accounts 2025 (in the Expenditure and Funding Analysis Statement and the Comprehensive Income and Expenditure Account) and include the application of accounting entries in line with the CIPFA Code of Practice. 5. Unaudited Accounts – Charitable Trusts 5.1. In addition to the unaudited Accounts for the Council, this Committee is also required to consider the accounts of the South Lanarkshire Council Charitable Trust. These accounts are attached in Appendix 3 for consideration and will be e-mailed to all elected members following submission to External Audit before 30 June 2025. They will also be available on the Council’s website on 1 July 2025 for public inspection. 66
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5.2. These audited Accounts will also be brought back for approval and signature in Autumn 2025 along with the External Audit Members’ report. 6. Employee Implications 6.1. There are no direct employee implications from this report. 7. Financial Implications 7.1. The financial implications are detailed in section 4.7 and the relevant appendices. 8. Climate Change, Sustainability and Environmental Implications 8.1. There are no implications for climate change, sustainability or the environment in terms of the information contained in this report. 9. Other Implications 9.1. The main risk associated with the Council and Charitable Annual Accounts is a qualified audit report. The risk has been assessed as low due to the detailed preparation in relation to the year-end process, technical training undertaken by key finance staff and the roll out of this to Resource finance staff as appropriate. Finance and Resources work together to achieve key deadlines and actions set from timetables. 9.2. There are no implications for sustainability in terms of the information contained in this report. 10. Integrated Impact Assessment and Consultation Requirements 10.1. This report does not introduce a new policy, function or strategy or recommend a change to existing policy, function, or strategy and therefore no impact assessment is required. 10.2. There was also no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 2 June 2025 Link(s) to Council Values/Priorities/Outcomes ♦ Accountable, effective, efficient and transparent Previous References ♦ None List of Background Papers ♦ South Lanarkshire Council Annual Accounts 2024/2025 ♦ Charitable Trusts’ Annual Accounts 2024/2025 ♦ Financial Ledger 2024/2025 and associated working papers Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Lorraine O'Hagan, Head of Finance (Strategy) Ext: 2601 (Tel: 01698 452601) E-mail:- lorraine.o'hagan@southlanarkshire.gov.uk 67
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1 Appendix 1 5 69
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2 Contents Contents Introduction by Chief Executive and Council Leader 3 Management Commentary 4 Annual Governance Statement 21 Statement of Responsibilities 32 Remuneration Report 33 Comprehensive Income and Expenditure Statement 47 Balance Sheet 48 Movement in Reserves Statement 49 Cash Flow Statement 51 Notes to the Financial Statements Note 1 - Accounting Standards Issued but Not Yet Adopted 53 Note 2 - Assumptions Made About the Future and Other Major Sources of Uncertainty 53 Note 3 - Material items and Expenditure and Income 54 Note 4 - Expenditure and Funding Analysis Note 5 - Reconciliation of Adjustments Between Funding and Accounting Basis Shown in the Expenditure Funding Analysis (EFA) to Those Shown in the Movement in Reserves Statement (MIRS) 55 57 Note 6 - Expenditure and Income Analysed by Nature 58 Note 7 - Revenue From Contracts with Service Recipients 59 Note 8 - Adjustments Permitted Under Accounting Standards and Between Accounting Basis and Funding Basis Under Regulations 59 Note 9 - Other Operating Expenditure 63 Note 10 - Financing and Investment Income and Expenditure 63 Note 11 - Taxation and Non Specific Grant Income and Expenditure 63 Note 12 - Movement in Usable Reserves 64 Note 13 - Balance Sheet – Unusable Reserves 66 Note 14 - Members Allowances 69 Note 15 - External Audit Costs 69 Note 16 - Related Parties 69 Note 17 - Leases 71 Note 18 - Grant Income 73 Note 19 - Events After the Balance Sheet Date 73 Note 20 - Property, Plant and Equipment 74 Note 21 - Other Assets - Intangible, Heritage and Assets Held For Sale 79 Note 22 - Capital Expenditure and Capital Financing 80 Note 23 - Short Term Debtors 81 Note 24 - Debtors For Local Taxation 81 Note 25 - Short Term Creditors 81 Note 26 - Provisions 81 Note 27 - Receipts in Advance 82 Note 28 - Public Private Partnerships and Similar Contracts 82 Note 29 - Pension Schemes Accounted for As Defined Contribution Schemes 83 Note 30 - Defined Benefit Pension Scheme 84 Note 31 - Contingent Assets and Liabilities 89 Note 32 - Financial Instruments 90 Note 33 - Disclosure of Nature and Extent of Risks Arising From Financial Instruments 93 Note 34 - Common Good 97 Note 35 - Trust Funds 98 Note 36 - Accounting Policies 99 Note 37 - Critical Judgments in Applying Accounting Policies 106 Supplementary Statements Statement 1 - Housing Revenue Account Income and Expenditure Statement 107 Statement 2 - National Non-Domestic Rates Income and Expenditure Statement 109 Statement 3 - Council Tax Income and Expenditure Statement 110 Group Comprehensive Income and Expenditure Statement 111 Group Balance Sheet 112 Group Movement in Reserves Statement 113 Group Cash Flow Statement 115 Notes to Group Accounts 117 Audit Arrangements 124 Glossary of Terms 125 Joint Introduction by Chief Executive and Council Leader 70
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3 Welcome to the annual accounts for South Lanarkshire Council, covering 2024-25. This key document fulfils two central purposes: it shows how the council met its statutory obligation to balance our budget for the financial year in question; and it also demonstrates how we constantly strive for best value as we spend and invest the public money with which we are entrusted. Achieving both those aims has been particularly challenging in recent years due to pressures on public finances generally, and on local authorities in particular. A persistent gap over many years between the income the council receives and the cost of delivering our services meant that at the start of 2024-25, South Lanarkshire Council had been required to find efficiencies and savings totalling more than £160 million in little over a decade. As the budget-setting process began in late 2023 the estimated budget shortfall for 2024-25 suggested another £29.207m in savings would be required to balance our budget. Although this was revised to £20.570m by the time the budget had to be set in February 2024, this still left a substantial amount of work to do, and some difficult decisions to be made. This led to the Council approving a total of 38 savings options that had been presented by council officers. However, elected members were able to reject a number of other proposals, including options that would have impacted on teacher numbers and reduced budgets for keeping communities clean. Another would have introduced new parking charges at local attractions. A further saving option that was considered would have reduced our road maintenance spend, but that proposal was put into reverse, thanks to loan arrangements being agreed to fund £7.8m in additional improvements to the roads budget over three years. Two other key new investment funds were also agreed: the £1m Community Fightback Fund which has kept local halls and other facilities open while the council has supported local groups to take them over; and an additional fund targeted specifically at supporting future library services. It is important that we have been able to continue to invest in South Lanarkshire, even while working in a difficult financial climate. In fact, when our 2024-25 budget and associated spending plans were agreed our revenue budget for the year was £956.252m. In addition, Council approved a £49.512m general capital programme and a £77.303m housing capital programme. As with other local authorities, we were funded by the Scottish Government to implement a council tax freeze as part of that 2024-25 budget. Education once again accounted for the biggest part of our revenue budget, with Social Work our next biggest area of spend. The remainder of our revenue budget funded services delivered by Community and Enterprise, Housing and Technical, and Finance and Corporate Resources, with our teams working together and with partners and our communities to deliver our diverse range of services. Although these accounts cover 2024-25 it is perhaps worth reflecting on the up-to-date financial position as they are published during the new financial year, 2025-26. After those challenging years in which first Covid and then the cost-of-living crisis compounded general pressures on our finances, there have been welcome signs of improvement. The council received a real-term increase in its government funding for the new financial year which, combined with prudent financial planning, allowed elected members to agree a budget which featured the council’s biggest investment programme since our schools modernisation programme. Members were able to agree a budget which will finance £55m of local improvements, investing in the area’s buildings and roads, and helping pay for new town centre masterplans in East Kilbride and Hamilton, as well as landmark projects in Larkhall, Lanark and other parts of South Lanarkshire. Partly by ringfencing a proportion of the 2025-26 council tax increase, the investment fund will also be used to reduce waste and tackle fly-tipping, and it also increased the school clothing grant for those who are entitled to it. All of this is being delivered despite that council tax increase being held at 6%. This was not only the lowest increase among all Scottish councils for 2025-26, it also means that South Lanarkshire now has the lowest council tax in all of Scotland. Taking all this into account, we are pleased to report that South Lanarkshire remains a very popular place for people to live, with many moving to the area to take advantage of our fantastic schools, excellent transport connections and opportunities to either work here or easily commute to jobs in other areas. We regard our residents and communities as our partners. We worked together in the difficult times, like during Covid, and we are now working with them with the aim of making South Lanarkshire the best place in Scotland in which to live, learn, visit, and to do business. This is also true of our terrific workforce, most of whom are also our residents. We work together, and with colleagues in South Lanarkshire Leisure and Culture, the South Lanarkshire Health and Social Care Partnership and other partners, to deliver on our core vision to “improve the lives and prospects of everyone in South Lanarkshire.” 71
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4 Management Commentary Background The Management Commentary will provide the reader with key messages in relation to the council’s year-end financial position for 2024/2025, as well as details on its performance for the year. As well as providing a summary of the most recent financial year, the commentary also looks forward and provides information relating to the council’s future financial strategy and the challenges, risks and uncertainties it faces in the next few years, while we continue to work hard to maintain service delivery and meet the needs of the people of South Lanarkshire. To set the scene, the first section of the commentary will provide a brief introduction to the council area and its functions, as well as its key ambitions and achievements. Introduction to South Lanarkshire Council The Area The South Lanarkshire area is both urban and rural and covers 686 square miles from the Cathkin Braes to the Pentlands and down through the Southern Uplands. The council faces the dual challenge of catering for the busy towns in the north west (East Kilbride, Hamilton, Cambuslang and Rutherglen), while meeting the needs of residents in Lanark and the rural Clydesdale area. The Council Structure The council provides a range of essential public services across the area through its five Resources, facilitated by the commitment, dedication and ability of our 15,716 employees. The council’s five Resources, their functions and number of employees is detailed below: Council Resource Functions Employees Community and Enterprise Resources Facilities, Waste and Grounds, Leisure and Culture Services, Planning and Regulatory Services, Enterprise and Sustainable Development, Roads Transportation and Fleet 3,387 Education Resources Early Years, Schools, Quality and Improvement 7,335 Finance and Corporate Resources Finance, Information Technology, Personnel, Administration, Legal and Licensing, Communications and Strategy, Audit. 821 Housing and Technical Resources Housing and Property Services 1,392 Social Work Resources Adults and Older People, Children and Families, Criminal Justice 2,781 The Council’s 5 Resources serve around 323,686 people. This population is expected to both grow and age with projections suggesting that this population will rise c328,000 in 2043, an increase of 1.3%. The projected 2043 figures show the largest decrease of 7% in the 0-17 age group and the largest increase of 50% in the 75+ age group. Source: National Records of Scotland The Council’s overall has the 5th highest population out of the 32 council areas in Scotland. This ranking is projected to continue to 2043. These changes in population in terms of both number and age profile, influence how the council and its partners shape future service design and delivery and feed into the Council Plan. 72
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5 City Region City Deal The council is part of the Glasgow City Region City Deal partnership. The council’s capital programme, referred to later in this commentary, includes significant infrastructure projects which will bring economic benefit to the council area. Over recent years, the programme of works has included the completion of two significant roads projects (Cathkin Relief Road and the dualling of Greenhills Road in East Kilbride). It also includes numerous Community Growth Area (CGA) projects across the 4 CGAs: Hamilton, East Kilbride, Larkhall and Newton including some large-scale build projects such as a new Primary School and Nursery provision in Jackton and more recently, the Lanark Road Signalisation project in Larkhall. The Council Plan The Council Plan, Connect was originally approved by the Council on 15 June 2022, and a mid-term review approved in April 2025. The Council Plan and Community Plan were built using engagement to place residents’ views and aspirations front and centre, with more than 3,300 responses received, representing the largest consultation exercise ever carried out by the council. Connect is the key strategic document that shapes the work of the council. It sets out the key actions to be delivered over the five years from 2022 to 2027, and identifies a long-term vision supported by core values and priorities that influence how the council works. These in turn stretch out into all annual Resource Plans through what is known as the “golden thread”, and on further to Service Plans, and through personal development plans, on to the individual members of staff who are responsible for service delivery. Three cross-cutting themes emerged from the community responses and feedback, and these became the priorities for the new Plan. These were: People (in particular, the impact of poverty and inequalities), Progress (in particular, recovery from the pandemic) and Planet (in particular, sustainable development). Further analysis of what our residents and communities had told us they want, resulted in six outcomes being identified for the Council Plan and the Community Plan: Communities and Environment Caring, connected, sustainable communities Education and Learning Inspiring learners, transforming learning, strengthening partnerships Health and Wellbeing People live the healthiest lives possible Children and Young People Our children and young people thrive Housing and Land Good quality, suitable and sustainable places to live Our Economy Thriving business, fair jobs and vibrant town centres In 2024, with the Council Plan approaching the middle of its five year term, a mid-term review was undertaken to health-check the existing priorities and measures of success in light of the changing internal and external pressures impacting on the council. The mid-term review re-affirmed the council’s commitment to its vision and values. In view of current and future challenges, the priorities of the Plan were revised to acknowledge three themes: the financial challenges facing local government; messages around transformation and service redesign; tackling poverty and prevention as an overarching consideration in the work of the council – fairness and the need to support the most vulnerable Council Performance The council rates its performance using a number of measures which are aligned to the priorities and outcomes set out in the Council Plan. A total of 256 measures were identified within Resource Plans for 2024/2025. Of those 61 (24%) are nominated as key strategic measures for reporting progress against the Connect Outcomes detailed in the Council Plan. The measures are detailed within the individual Resource Plans and bi-annual progress reports, and can be found on the Performance pages of the council’s website. The Connect 2022-27 Quarter 2 Progress Report 2024/2025 was reported to the Performance and Review Scrutiny Forum on 19 November 2024. The latest reported performance figures for 2024/2025 (Quarter 2) are shown overleaf. Status of performance measures Definition Number of performance measures Blue Project complete 1 Green The timescale or target has been met as per expectations 43 Amber There has been minor slippage against timescale or minor shortfall against target 8 73
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6 Red There has been major slippage against timescale or major shortfall against target 3 Report later/ contextual The information is not yet available or included for information only. 6 Total 61 Status of council performance measures There are three ‘red’ status measures where performance has not met the target. These are taken in turn below: • Percentage of reports submitted to the Children’s Reporter within agreed timescales: To address this, monthly meetings are now taking place with locality Fieldwork Managers and representatives from the Scottish Children's Reporters Administration, providing an opportunity for the Reporter to flag up reports early. Further actions taken to address improvement include early tracking of reports by Service Managers, and improved staffing levels which has been a locality improvement activity for all front-line managers in Children and Families. The council is confident that with the above measures in place, the target will be met within the next quarter. • Percentage of Housing Options interventions where Homelessness prevented: As at quarter 2,356 (57.42%) homeless cases prevented. The operating context in relation to the prevention of homelessness remains extremely challenging and the pre- vailing socio-economic conditions continue to adversely impact upon the ability to prevent homelessness during 2024-25. This trend has been mirrored nationally. • Continue to implement Rapid Rehousing Transition Plan (RRTP): Fifth and final RRTP annual review reported to committee, ongoing actions incorporated into new Homeless Strategic plan. Actions identified to address severe pressure on homeless- ness services are being monitored closely ,and impact will be reported to committee as part of annual review process. The council continues to remain an active participant in the Local Government Benchmarking Framework (LGBF). As well as allowing the council to self-assess its performance across years, the main benefit of the LGBF is the ability to compare performance with peers against an agreed suite of performance indicators, which will assist in achieving best practice and efficiencies. The latest results available (2023/2024, as at January 2025) show that across the 102 indicators in that year’s suite, the council’s performance improved against 41 (40%) indicators, remained the same against 5 (5%) indicators, and declined for 34 (33%) indicators. There are 22 (22%) indicators for which there are no results or trend information available for 2023/2024. This is summarised in the table overleaf. Council performance against 102 indicators (latest available results – 2023/2024) KEY: Number (%) of indicators 2021/2022 2022/2023 2023/2024 South Lanarkshire performance IMPROVe Performance Blue Green Amber Red Report later/Contextual 74
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7 ↑ improving performance in SLC 39 (39%) 52 (52%) 41 (40%) ↓ declining performance in SLC 53 (54%) 36 (35%) 34 (33%) ↔ No change in performance in SLC 3 (3%) 4 (4%) 5 (5%) --- Results/trends not available 4 (4%) 9 (9%) 22 (22%) Comparison with Scottish average SLC results better than Scottish average 50 (51%) 51 (50%) 44 (43%) X SLC results worse than Scottish average 43 (43%) 40 (39%) 34 (33%) ↔ SLC results same as Scottish average 2 (2%) 2 (2%) 2 (2%) -- Results not available 4 (4%) 9 (9%) 22 (22%) 2021-22 Results at November 2023, 2022-23 Results at August 2024. 2023-24 results at January2025 In terms of South Lanarkshire’s figures relative to the Scottish results, our performance was better than the Scottish average for 44 indicators (43%) and worse for 34 indicators (33%). Key Achievements Communities and Environment • The percentage of household waste sent to landfill in the period January to June 2024 was 1.64%, remaining well below (better than) the 5% target. • The percentage of properties with Full Fibre Connection has increased to 50.6%, exceeding the annual target of 43% • Primary school meal uptake for the period April to September was 70%, exceeding target (66%). The new menu started on 26 August 2024. • A programme of bridge and other structure projects has continued to be implemented, including the £9.4m replacement of the Clyde Bridge completed in Quarter one. • Stewartfield Way/ East Kilbride Town Centre Enhancement - a report was presented to Community and Enterprise Commit- tee during April 2024 outlining the revised project. Updated traffic modelling has been completed and approval for the pro- ject's wider aims was obtained by the Glasgow City Region Chief Executives' Group in June 2024. A further report will be taken to Committee before completion/submission of the Outline Business Case (OBC) to the Glasgow City Region (GCR) Programme Management Office (PMO). • South Lanarkshire University Health and Social Care Partnership (SLUHSCP) continues to embed Care Opinion across all services and recently dovetailed with public engagement sessions held to develop the next Strategic Commissioning Plan 2025-28. • Recent statistics have shown that, in its early stages, the SLUHSCP has far exceeded the national average with record lev- els of engagement. In the first quarter of 2024-2025, South Lanarkshire University HSCP received 171 stories from mem- bers of the public. 92% of these stories were positive and received 218 responses from staff and services and 91.2% of sto- ries were responded to within 7 days. Moreover, these stories have been read more than 7,463 times. Education & Learning • SQA examination results for the 2024 exam diet were published by SQA on 6 August 2024. SLC pupils were presented for over 80,000 qualifications at National 5, Higher and Advanced Higher levels. When compared with National pass rates (based on entries in other Local Authorities) attainment levels in SLC are above the National Pattern. • An increasing percentage of our primary schools are now offering play-based learning at each stage between Primary 1-3. There is also one establishment implementing this approach across a P1-4 class. Primary1:Approximately 79.4%, Primary2:Approximately 53.7%, Primary3:Approximately 24.1% • Mobilize Music Project. To September 2024, the project has engaged almost 150 young people aged between 12 and 25 in music-based learning opportunities. These free opportunities have included access to music rehearsal spaces, recording sessions for our annual album project where young people write and record original songs for release, live performance opportunities through our monthly gig nights and open mic nights, access to music tuition on drums, guitar, ukulele and vocals, and group singing as part of our choir group. • Many learners have reported increased aspirations and have progressed to further learning opportunities such as further education courses at College and University or progressing to engaging in live performance at music venues in Glasgow and beyond. Learners also report increases in self-esteem and confidence, and they report that participation in the project results in much improved mental wellbeing Health and Wellbeing • The council’s affordable housing supply programme continues to increase the supply of council homes across South Lanarkshire, with a focus on ensuring that the new homes provide for changes in people's needs over the course of time. • All applications for adaptations to council homes were approved. • The council has appointed a consultant to undertake an independent objective review of council properties, including those operated by South Lanarkshire Leisure and Culture (SLLC). At the same time, the £13m Transition Fund is helping to modernise the leisure and culture asset base. • Formal grant funding from SPT to support active travel behaviour change initiatives has been confirmed and a grant of £195,500 has been awarded. 75
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8 Scottish Government funding is being used to support air quality monitoring activities as well as for active travel promotional campaigns, anti-idling campaigns, and Eco Stars support for businesses that operate fleet which travel through the South Lanarkshire area. • As at 30 September 2024, there were a total of 704 Looked After Children with 631 (90%) looked after in a community based setting. This position has been consistent since 1 April 2021 and reflects South Lanarkshire’s commitment to shift the way care is delivered to Looked After Children, with continued support to children and young people within the community. • In continuing to support carers, 1,762 co-produced assessments have been approved which is in line with the service achieving the annual target of 3,000 assessments. • Council work on Cost of the School Day presented at the national Facing Up to Poverty in Schools Network and highlighted as an example of good practice. Children and Young People • An individual housing plan was developed for all young people leaving care • As at September 2024, South Lanarkshire continues to have no under 18s in Polmont Young Offenders Institution. This has been the case since September 2021 and reflects the success of the proactive Whole System Approach, use of secure care (where necessary) and robust multi agency community risk management plans • Adult Literacy and Numeracy Team: - Over 200 adults have been supported to increase their skills in literacy and numeracy using the Social Practice Model of adult learning where learning is contextualised according to a learner’s interests, aspirations and goals. Additionally, 25% of these have successfully achieved accredited qualifications in SQA Core Skills (Communication/Numeracy/ICT) or REHIS (food safety) - 10% of adult literacy learners advanced to further education or training, while 5% secured employment, demonstrating the effectiveness of adult literacy and numeracy provision in facilitating career progression for those furthest removed from the labour market • ESOL (English for Speakers of Other Languages): Over the period 189 ESOL learners attended YFCL ESOL Provision across South Lanarkshire. • Multiply on Tour successfully engaged 581 adults in a series of summer events, highlighting the prevalence of numeracy in everyday life and promoting opportunities for adult learning. Housing and Land • Through its Affordable Housing Supply Programme, the council is on track to deliver a further 50 new council homes at Brackenhill Farm, Hamilton during 2024-2025. Planning and pre-development work is also underway to deliver over 250 new homes across eight sites in East Kilbride, Hamilton, Larkhall and Cambuslang throughout 2025-26. • In addition, progress is being made to acquire a further 150 homes this year through the Market Purchase Scheme, aiming to meet immediate housing needs in priority areas. • 99% of reactive repairs were completed right first time • 63.8% of lets to urgent homeless (UH) households, ensuring those with the highest housing need are prioritised Our Economy • To date, 1,340 participants have been supported on employability programmes, well on the way to reaching the 1,500 target. • Preparation of the Evidence Report which forms the first stage of the Local Development Plan 3 (LDP3) has commenced. An engagement strategy has been developed and incorporated in the 2024 Development Plan Scheme which received approval from the Planning Committee in May 2024. Delivering the Plan and Achieving Best Value Against an extremely challenging set of socio-economic circumstances, positive performance was achieved: the percentage of gross rent arrears (current and former) reduced over the same period from 8.00% in 2023-24 (Q4) to 7.26% in Quarter 2. With assistance from the Local Government Improvement Service, the council developed an SLC-focused LGBF dashboard reflecting the council's strategic outcomes as set out in the Council Plan, Connect. Following a presentation at the Performance and Review Scrutiny Forum (PRSF) on 28 May 2024, the dashboard was made available to the public via a link on the performance pages of the council's website. Oracle Fusion - HR and Payroll modules went live in August 2024. 76
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9 Financial Performance General Fund Position at end 2024/2025 The council’s General Fund budget for 2024/2025 was approved by the Council on 21 February 2024. This is the operational budget of the Council. At the end of 2024/2025, the Council’s budget was showing an underspend position of £30.090 million. After making a number of agreed Transfers to Reserves totalling £30.090 million, the final position was a breakeven position. The full position for the council’s Resources is detailed in the Revenue Budget Outturn 2024/2025 reported to the Executive Committee on 25 June 2025. This position takes account of the achievement of £12.667 million of the £13.190 million of approved savings for the year, with the remainder being pursued into 2025/2026. The split of the spend across the individual Resources is shown below. This reflects the council’s spend based on its operational structure (including transfers to reserves), with the biggest Resource being Education Resources. The budget is monitored internally on the basis of the five Resources. Council spend across its five Resources (£m) is noted in the diagram and table overleaf. Council Resource Spend (After Transfers to Reserves) £m Community and Enterprise Resources 129.318 Education Resources 483.334 Finance and Corporate Resources 41.242 Housing and Technical Resources 17.692 Social Work Resources 237.517 This spend against budget is shown in the South Lanarkshire Performance Section of the table below, which shows the Resources’ final outturn position before any transfers were made to reserves for specific funding or commitments. The main variances are explained as: • Community and Enterprise Resources: an underspend of £0.617 million offset by monies carried forward into 2025/2026 for committed spend as a result of underspends within Grounds and Roads Services. • Finance and Corporate Resources: an underspend of £2.092 million before transfers to reserves. The resultant position was a breakeven position after transfers to reserves. • Housing and Technical Resources: an underspend of £1.721 million before transfers to reserves. The resultant position was a breakeven position after transfers to reserves. • Social Work Resources: an underspend of £2.208 million before transfers to reserves. The resultant position was a breakeven position after transfers to reserves. • Loan Charges: an underspend of £0.193 million after carrying forward funding (£8.774 million) to assist in the Medium- Term Budget Strategy, reflecting the use of the Loans Fund Review and Interest on Revenue Balances. The underspend prior to the carry forward of these monies was £8.967 million. 0 50 100 150 200 250 300 350 400 450 500 Community and Enterprise Resource Education Resource Finance and Corporate Resource Housing and Technical Resource Social Work Resource Spend £m Council Spend Across its Five Resources (£m) 77
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10 • Corporate Items: an underspend of £10.559 million before carrying forward monies relating to Pay Award Funding, Utilities, Procurement Savings, Insurance Fund and Service Concessions. • Council Tax/Council Tax Reduction Scheme (over-recovery £3.253 million) mainly the impact of additional houses added in-year, higher than anticipated levels of income from previous years arrears collection and additional income from empty properties. The Comprehensive Income and Expenditure Statement of the Accounts (page 47) sets out the council’s year-end position on expenditure and income, in accordance with accounting requirements. This is different to the way that the council reports its financial monitoring internally as we are required to make a number of accounting adjustments. The Expenditure and Funding Analysis (EFA) on page 55 provides a link between the council's internal financial monitoring reports, and the figures in the Comprehensive Income and Expenditure Statement. Table 1 shows the reader of the Accounts how to go from the internal Monitoring Report, through to the first column of the EFA (page 55). SLC Annual Budget (Col 1) SLC Actual Outturn (Col 2) SLC Outturn Variance (Col 3) Building the EFA Actual Outturn (Col 2 Data) Building the EFA Move / Remove items not included in Cost of Services Building the EFA Net Expenditure Chargeable to the General Fund and HRA Services £m £m £m £m £m £m Community and Enterprise 129.318 128.701 0.617 128.701 - 128.701 Education 483.338 482.703 0.635 482.703 - 482.703 Finance and Corporate 41.242 39.150 2.092 39.150 0.986 40.136 HRA - - - - 2.981 2.981 Housing and Technical 17.692 15.971 1.721 15.971 0.001 15.972 Social Work 237.517 235.309 2.208 235.309 - 235.309 Joint Boards 1.902 1.864 0.038 1.864 - 1.864 Corporate Items 5.526 (5.033) 10.559 (5.033) (3.837) (8.870) Net Cost of Services 916.535 898.665 17.870 898.665 0.131 898.796 Other Income and Expenditure (916.535) (928.755) 12.220 (928.755) 22.311 (906.444) (Surplus) / Deficit on Provision of Services - (30.090) 30.090 (30.090) 22.442 (7.648) The council’s final reported outturn position for the year is a breakeven position (surplus of £30.090 million if you exclude the transfers to reserves at the end of the year – see col 2 above). However, as previously noted, this is not how the surplus is displayed in the various statements in the accounts due to accounting requirements to both exclude and include certain items for both the EFA and CIES, with the final entries being included as part of the Movement in Reserves Statement. The final column in the table shows a surplus of £7.648 million which corresponds to the figures in the first column on the Expenditure and Funding Analysis on page 55. To this, accounting regulations require us to add in other entries for items including pensions, holiday pay, capital financed from revenue and loans fund principal payments (column 2 on EFA page 55) to arrive at a deficit on the provision of services of £26.801 million. To this, we need to take into account accounting requirements to reverse some entries to the balance sheet and also transfers from reserves which were required to fund projects during the year and transfers to reserves at the end of the year which are required to fund commitments in future years. After taking into account all of these items, the final outturn position for the council was a breakeven position, as reported to the Executive Committee. The Movement in Reserves Statement on page 49 reconciles the financial position shown in the Comprehensive Income and Expenditure Statement (page 47) to the movement on the council’s Reserves (pages 49 to 50). During the year, the council drew money down from reserves, to meet current commitments or for agreed use in the 2024/2025 budget strategy, including Pupil Equity Fund for schools, Information Technology and funding for multi-year projects. In addition, the council made contributions to reserves for a variety of projects including multiyear investment plans, Pupil Equity funding and to meet future commitments. Money was also set aside for future budget strategies. The balance on the council’s total General Fund Reserve is £118.997 million and includes commitments for future projects as well as elements earmarked for use in future budget strategies. The General Fund Reserve is one of the statutory reserves that the council is permitted to hold and is included in the total usable reserves on the Balance Sheet totalling £147.568 million. A summary of the councils’ total usable reserves is shown in the table below, with full details of all the council’s usable reserves, including transfers to / from each of these reserves in 2024/2025 are detailed in Note 12. 78
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11 £000 £000 Total Usable Reserves 147,568 Less: General Fund (committed inc. budget strategies) 105,954 Repairs and Renewals (inc. Winter Maintenance) 5,123 Capital Funds (inc. Capital Receipts Reserve) 11,196 Insurance Fund 1,812 Housing Revenue Account 10,440 Total Committed Usable Reserves 134,525 Uncommitted General Fund 13,043 Note 12 shows that the council’s General Fund reserve comprises an earmarked element (£105.954 million) and an unearmarked balance of £13.043 million. The council’s Reserves policy identifies that there is no prescribed minimum level of reserves which should be held by a council. The level of Uncommitted General Fund of £13.043 million currently reflects a suitable cushion to contribute towards any unanticipated pressures that the council may face Housing Revenue Account As well as running a General Fund account to deliver services, the council also manages a stock of housing. The annual expenditure on the council houses (£127.383 million in 2024/2025) and the total income received (£124.402m in 2023/24), are held as a ring-fenced Housing Revenue Account (HRA). Any surplus funds are held in a Reserve on the council’s balance sheet and can be used in future years. The details are shown on pages 107-108. At the end of financial year 2024/2025, there was an overspend of £2.981 million on the Housing Revenue Account. This was funded from the Housing Revenue Account Reserve. The Reserve was also increased by £0.200 million for income received through Council Tax from owners of second homes. These transfers mean a decrease of £2.781 million in the Housing Revenue Reserve, taking its total to £10.440 million at the end of 2024/2025. These monies will be carried forward to future years to fund the increased volume and cost of repairs, the development costs related to the new housing management I.T. system and the continuation of the housing investment programme, as well as maintaining a reasonable level of reserves. The council has a medium to long term financial business plan for the HRA. This ensures the affordability of the council’s approved Strategic Housing Investment Programme (SHIP), a key part of the Local Housing Strategy (LHS) process. The strategic outcomes identified in the LHS, guide investment priorities outlined within the SHIP, including the increase in supply of affordable housing in areas of housing pressure, as well as coping with the needs of an ageing population. The Balance Sheet Taking the year’s activity into account, the council’s balance sheet (page 48) shows the position as at 31 March 2025 and brings together the council’s year end balances including the assets owned, the monies owed to and by the council and the reserves available to the council for use in future years. The position at the end of March 2025 as well as the previous year for information, is shown overleaf. 79
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12 The main change year on year is the increase in Property, Plant and Equipment within Long Term Assets. This mainly reflects the revaluation of Council Dwellings. In addition, there has also been an increase in Net Current Liabilities reflecting the amount of short term temporary borrowing undertaken during the financial year (which is offset by a reduction in long term borrowing) while current interest rates remain high. Other Long Term Liabilities have also increased reflecting the remeasurement of the Council’s lease liabilities, including PPP, under IFRS16. The Pension Liability is indicative of a broad position; however the reader should be aware that the council is meeting its pension costs on an annual basis. The council’s assets and liabilities are funded by an equivalent level of Reserves. These Reserves comprise Unusable Reserves of £2,412 million (maintained for accounting purposes only) and Usable Reserves of £147.5 million which as the name suggests, are those which the council can use to support service delivery through its Revenue and Capital budgets. The detail of these Reserves is noted in the Movement in Reserves Statement on page 49 with more detail provided in Note 12 (page 64) and the Accounting Policies (pages 99 to 105). It is expected that future revenue income, alongside the council’s budgeting and planning processes, will ensure management of future liabilities. It is therefore considered appropriate to adopt a going concern basis for the preparation of these financial statements. Capital Programme The council operates two distinct capital programmes: the General Services Capital Programme and the Housing Capital Programme. The spend across Resources and Housing is shown in the graphic (and the table) overleaf. 80
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13 The General Services Capital Programme spend was £54.652 million in 2024/2025, equating to approximately 74% of the original capital budget approved at the start of the financial year. The underspend reflects a variation from the expected timing of spend across a number of projects within multi-year programmes. The main projects contributing to the underspend include the Place Based Investment Programme, Leisure and Culture Transformation Fund, Rural Development Centre – Lanark, Three Rivers / Clydesdale Way, Hamilton Town Centre Masterplan, East Kilbride Town Centre Masterplan, Prioritised Urgent Investment, Glasgow City Region City Deal project Greenhills Road, Lifecycle Replacement Schools and St John the Baptist Kitchen Upgrade. Project budgets have been carried forward into 2025/26 to complete these projects where appropriate. Significant project spend during the year has been incurred on a number of projects including: • Hairmyres Station Park and Ride (£3.4m), • Roads Carriageway Investment Programme (£9.9m), • Our Lady of Lourdes Primary School Adaptations (£3.3m), • Oracle Fusion Project and Schools ICT (£4.2m) • Clyde Bride (£1.3m) • Lanark Road Signalisation (£1.1m) • Prioritised Urgent Investment (£1.1m) and • Larkhall Leisure Centre (£1.0m) The new Ponfeigh Bridge Replacement is shown in the image below Council Resource Spend £m Community and Enterprise Resources 35.448 Education Resources 7.039 Finance and Corporate Resources 3.790 Housing and Technical Resources 7.379 Social Work Resources 0.996 Housing Capital Programme 71.544 81
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14 The Lanark Road Signalisation, a City Region City Deal project is shown in the image below. The General Services Programme has been funded from a combination of grants from various funding bodies including Scottish Government and partner organisations (£29.050 million), borrowing (£9.482 million), capital receipts (£1.340 million), revenue contributions (£1.289 million) and specific reserves (£0.767 million). 82
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15 The Housing Capital Programme spent £71.544 million in 2024/2025, 93% of its revised budget target. This underspend is due to delays experienced at Cairnswell Avenue, Cambuslang where minimal spend was eventually incurred, and Brackenhill Farm, Hamilton (site 1). In addition, the average purchase price for properties purchased through the Market Purchase Scheme reduced reflecting the current size of properties being purchased. The focus of Housing Capital Programme expenditure on council housing stock was on the provision of additional housing and improvement and environmental works. The Housing Programme is ring-fenced and funded by the Housing Revenue Account, Government Grant, Borrowing and house/land sales. The new build Cornhill Village site in Hamilton is shown in the image below. The Capital Budget Monitoring Final Outturn – 2024/2025 for both Programmes was reported to the Executive Committee on 25 June 2025. The council is able to regulate its own capital spending limits within a Prudential Framework recommended by CIPFA and endorsed by the Scottish Government. As such, the repayment of borrowing, which falls as a future commitment against the council’s Revenue Budget, must be affordable. The repayments form part of the approved revenue budget, and the spend and debt repayments remain within the Prudential Framework limits approved by the council. The ratio of financing costs to the council’s Net Revenue Stream for 2024/2025 (Government Grant plus Council Tax Income) is 4.81%. Key Financial Ratios In order to monitor financial performance and to supplement the figures contained within the Annual Accounts, the council prepares a number of financial ratios as a result of best practice guidance contained within the Prudential Code for Capital Finance in Local Authorities. These relate to the borrowing the council undertakes. The following table provides information on these indicators: Financial Indicator and Commentary 2024/2025 Forecast £m 2024/2025 Outcome £m Debt/Long-term Borrowing Capital Financing Requirement (CFR) for the current year. External Debt Levels for the current year. (Excluding Accrued Interest) Gross Borrowing (External Debt Levels excluding PPP Finance Lease Liability) 1,439 1,287 1,121 1,592 1,331 1,031 Ratio of Financing Costs to Net Revenue Stream (as a %) which indicates how much of the council’s net revenue budget is used for servicing debt: • General Services • Housing Revenue Account 3.91% 8.58% 4.81% 9.33% 83
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16 The Capital Financing Requirement (CFR) shows how much the council needs to borrow in order to fund its capital expenditure. The actual CFR for the year is £153 million more than forecast due to the recognition of assets and liabilities under IFRS16 offset slightly be a reduction in borrowing required to fund the 2023/2024 capital programmes. This reflects the timing of spend across both capital programmes (General Services and HRA). The ratio of financing costs to net revenue stream for General Services shows what percentage of our income from Council Tax and Government Grant is used to pay for the costs of borrowing. For the Housing Revenue Account, the ratio shows how house rents have been used to pay for the cost of borrowing. For General Services the ratio is higher than forecast. This is due to costs previously classified as operating costs now being classified as financing costs under IFRS16. For the Housing Revenue Account, the ratio is higher than forecast due to actual borrowing costs being higher than forecast and a slight decrease in income. Financial Planning The council continues to face financial pressures as a result of pessimistic forecasts of government grant and continuing demand for services. Increasing cost burdens due to pay awards and above average contract inflation over recent years have continued to reduce the spending power of council budgets. Financial Planning is a key tool in managing these pressures. While the Council has Long Term Revenue and Capital Budget Strategies in place, a Revenue Budget Strategy is prepared in advance of the new financial year along with an annual report on the Prudential Indicators, the Treasury Management Strategy and the Annual Investment Strategy. This suite of reports lays out the position for the council across the coming years and identifies the key areas of financial risk and pressure. A new Capital programme is also approved each year, based on the aspirations of the Capital Strategy, but also taking account of any new areas of investment to be considered since the Strategy was drafted. A Medium-Term Revenue Financial Strategy covering 2026/2027 and 2027/2028 will be presented to the Executive Committee on 25 June 2025, with the promise of a refreshed Longer-Term strategy to be produced later in the year. Similarly, a longer term Capital Strategy will be presented to members later in the calendar year Financial Outlook including Risks and Uncertainties Outlook The council approved its 2025/2026 revenue budget of £1,019 million on 26 February 2025. For the coming years, the outlook for Scottish Public Finances is not positive. The Scottish Fiscal Commission (SFC) estimates that the overall Scottish Budget will have an average budget gap of over 10 percent each year over the next 50 years. They believe that these financial pressures will build as the population ages and as the cost of delivering services increases. A report prepared by Audit Scotland and released by the Accounts Commission in April 2024 (Local government budgets 2024/25 | Audit Scotland) reaffirms that Scottish councils are facing a significant gap between the money needed to deliver local services and the money they have available. Together, all 32 councils were noted as having a gap of £585 million for 2024/2025 and that is estimated to increase to £780 million by 2026/2027. The scale of the financial challenge remains significant. Given the magnitude of the national local government Budget Gap, it is acknowledged that there requires to be a fundamental re-think of what public services in Scotland can do to manage their budgets moving forward, including what councils can deliver by way of services to the public. At a local level, this means we are having to consider the things we do as a Council, how we do them and where we deliver them from. On 25 June 2025, a Revenue Budget Strategy covering the period 2026/2027 to 2027/2028 was presented to the Executive Committee, giving a medium term view on the financial position of the Council over the next 2 years. This included a initial Budget Gap of £24 million but noting that this could increase to £42 million if we factor in a higher than budgeted Pay Award. Given the magnitude of the Budget Gap, we had to manage for 2025/2026 and then the level we are facing for the coming 2 years at least, the council has acknowledged that fundamental change is required. Difficult decisions will continue to be required to balance the Council’s budget. As an organisation, we know we will need to significantly change what we deliver over the coming years with the focus being on statutory services. There will likely be areas where we will need do consider whether we can continue to deliver services and if so, what those services will actually look like. In order to deliver this, the programme of change (in the form of the Council’s Transformational Change programme) is ongoing, with the key aim being to drive continuous improvement as well as driving efficiencies. As they have done over many years, these efficiencies will feed into the Budget Strategy and support the delivery of a balanced budget. The Transformation Change programme is made up of a number of Cross-Cutting Reviews (cross-Resource reviews) as well as individual reviews across Service areas. The progress of these reviews is reported regularly to the Performance and Review Scrutiny Forum, or to Committee specifically if a decision is required to allow the review to progress, to ensure visibility and buy-in from elected members. Examples of these reviews are the Strategic Estates Review where we are looking at our buildings, their condition and the services we deliver from them; the Procurement Review where we are considering what, how and where we buy from; and Management and Organisational Structures where we are looking to ensure we have the optimum structure in place to make the organisation work. 84
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17 Risks and Uncertainties There are a number of other risks and uncertainties faced by the council. In looking at these areas, it is important to note the council’s governance arrangements. These are detailed in the Annual Governance Statement which sets out the proper arrangements for the governance of the council’s activities, facilitating the effective exercise of its functions and including clear arrangements for the management of risk. The Annual Governance Statement can be found on page 21. The council maintains a Risk Register which is updated on a regular basis by senior management and is presented to elected members. The latest reported version of the Risk Register was the Review of the council's Top Risks/Year End Risk Management Report reported to committee in September 2024. The risk register is one of the key sources of assurance that inform the council’s annual review of its governance arrangements. The council’s Top Risks (Very High level) are provided below. 1. The Budget Gap that the council is facing across the medium term is the biggest risk faced by the Council. The Budget Gap is the result of the continued real terms reduction in Government funding as well as the increased demand and increased cost of services including the significant impact of price increases on areas such as inflationary increases on utilities, and increased staff costs due to pay awards. Reduced fees/income received by the Council would add to budget pressures across Services 2. Inability of the council to effectively provide accommodation and support to households who are homeless and people who arrive in South Lanarkshire as part of refugee resettlement and the asylum seeker dispersal programmes (including those for unaccompanied children) 3. The council, in conjunction with its partners, is unable to provide the required support to reducing the overall impact of the costs of living crisis on households in South Lanarkshire resulting in increasing levels of poverty, debt, and poorer outcomes for people 4. Inability to take the necessary action due to funding constraints, to combat climate change, and work toward achieving net zero carbon emissions by 2045, thereby contributing to negative and irreversible environmental, social and economic impacts on the council and its residents 5. The council’s operations are affected by fraud, theft, organised crime and cyber attacks 6. The council does not fully deliver the strategic outcomes required of the IJB as outlined in their Strategic Commissioning Plan 7. The council fails to comply with or meet the expected standards of scrutiny and deliver the improvement actions identified by regulatory bodies 8. The provision of council services is disrupted because of industrial action 9. The council fails to comply with its statutory duties by not conducting sufficiently robust impact assessments where the same are required, including in respect of budget/service redesign proposals, leading to potential legal and financial challenges, which could result in failure to deliver those proposals 10. Adequate Inability to ensure public protection and safety 11. The council inherits commercially unviable shopping centres due to the financial failure of existing owner/management companies resulting in significant financial and operational liabilities transferring to the council 12. Increasing levels of adverse weather These key risks as well as the remainder of the council’s high-level risks are shown in the list and graphic below: • Failure to fulfil emergency response commitments befitting the council’s status as a Category One (emergency) responder • Due to the fragility and lack of capacity of the third and private sector market, providers are potentially unable to sustain their business models, which could result in a deterioration of their service standards and/or provider failure. This could result in the Council seeking alternative service provision in a reduced marketplace to allow us to meet the demand for services. • The council does not have the appropriate emergency / business continuity plans; contingency arrangements or partnerships in place to respond to/or recover from a pandemic/endemic event. • Procurement activity is affected by supply chain issues; a lack of resources; non-compliance or legal challenge • Lack of capacity and skills to meet increased service demands • Information governance not subject to adequate control • Historic childhood abuse • The council is materially affected by the implications arising from the National Care Service Bill • Implications of the Scottish Fire and Rescue Service Unwanted Fire Alarm Signals Policy within the council's non-domestic estate • Inability to maintain infrastructure, assets and properties in a well-maintained condition that will avoid unplanned closure, due to budget constraints and failure to achieve objectives of asset and property reviews • IT development, functionality and implementation of new systems does not support service delivery to secure efficiencies • The council fails to deliver the objectives of the Community Wealth Building Strategy • The council fails to deliver the outcomes of the Economic Strategy • Failure to ensure the health, safety and wellbeing of employees and the protection of service users and members of the public in the delivery of council services • Failure to achieve the outcomes of the Community Plan 2022-2032 • Failure to achieve the outcomes of the Council Plan 85
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18 Taken together, these risks and external influences represent a fast-changing environment, bringing opportunities as well as challenges, and driving the requirement for the council and its services to be open to new ways of working, to innovation and continuous improvement. Sustainable Development and Climate Change Sustainable development and climate change action is governed through the council's Climate Change and Sustainability Committee which has decision making powers to help to accelerate the pace and scale of action needed in response to the climate emergency and meet challenging climate change national targets. Our commitment to sustainable development begins with integrating climate considerations into our policies, plans, and decision- making processes. Sustainable development and Climate Change is embedded within the Council Plan, Community Plan as well as other relevant plans, policies and strategies. The council's Sustainable Development and Climate Change Strategy (SDCCS) 2022 - 2027 sets out our overall approach to sustainable development and the challenges and opportunities of climate change. The Climate Change (Scotland) Act 2009 has set a 2045 target for net-zero emission of all greenhouse gases. As a public sector body, we have a legislative requirement to contribute to this target and are required to set and report on our own carbon reduction targets. We are committed to measuring, monitoring, and reporting our greenhouse gas emissions, as well as the progress we 86
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19 make in achieving our carbon reduction targets. The most recent carbon footprint, for 2023-24 shows that reductions of 68.9% have been achieved since the baseline year of 2005-06. In addition to mitigating our own impact, we understand the importance of adaptation to climate change. Failure to meet sustainable development and climate change objectives was identified as one of the council’s top risks - these risks relate to economic, social and cultural influencers. Supplementary Information Common Good and Trust Funds The council operates Common Good and Trust Fund accounts which record the financial transactions in relation to funds the council administers. These do not represent charges or income to Council Tax payers. These are shown in pages 97-98 of the Accounts. 87
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20 Our Group The council has adopted the recommendations of the Accounting Code of Practice in the United Kingdom 2024/2025 and has produced a full set of Group Accounts. These accounts incorporate any material balances from identified associates of the Council, and include a Group Movement in Reserves Statement, a Group Balance Sheet, a Group Expenditure Funding Analysis Statement, a Group Income and Expenditure Statement and a Group Cash Flow. By including the Group entities along with the council’s own Accounts, the effect on the Group Balance Sheet is an increase in both Reserves and Net Assets of £103.478 million. This represents the council’s share of the net assets in these entities. The Group Accounts, including details of associates are included in pages 111-123. There has been no change to the Group membership since 2023/2024. More Information Further information about South Lanarkshire Council can be obtained on the Council’s website www.southlanarkshire.gov.uk. Alternatively, contact Finance and Corporate Resources, Floor 4, Almada Street, Hamilton ML3 0AB Jackie Taylor Executive Director, Finance and Corporate Resources Paul Manning Chief Executive Councillor Joe Fagan Leader of the Council 88
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21 South Lanarkshire Council Annual Governance Statement 2024/2025 1. Scope of responsibility The residents of South Lanarkshire expect the Council to conduct its business in a lawful and transparent way. In particular, the Council has a duty to safeguard public money and account for it; and to continuously review and improve how its functions are discharged, focussing on the priorities of economy, efficiency, and effectiveness. The Council is responsible for putting in place proper arrangements for the governance of its activities, facilitating the effective exercise of its functions including clear arrangements for the management of risk. A Local Code of Corporate Governance (referred to as the “Code” from here on) has been approved and adopted. The Code is reviewed and updated annually and is consistent with the seven core principles of the Chartered Institute of Public Finance and Ac- countancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) framework entitled ‘Delivering Good Governance in Local Government’. This statement explains how the Council has complied with the Code during 2024/2025 and meets legislative requirements to include the Annual Governance Statement within the Annual Accounts. 2. The purpose of the council The Council Plan 2022-2027 - South Lanarkshire Council sets out the Council’s vision, values and objectives and what difference this will make to the residents and communities of South Lanarkshire. The Council Plan which was informed by the views of South Lanarkshire residents and information from many other sources including local community plans, face to face discussions, online feed- back, feedback from Community Groups, Community events and surveys was approved by Council in June 2022. The Council is also a statutory Community Planning Partner and the Community Plan 2022-32 (Community Planning) provides a common vision for the South Lanarkshire Community Planning Partnership and sets out how the partners aim to achieve that vision. The Council has set the framework for strong corporate governance by having a clear vision and values which are outlined below: - Our vision is to improve the lives and prospects of everyone in South Lanarkshire. Our priorities are: • People – we will work to put people first and reduce inequality. • Progress – we will work to recover, progress and improve. • Planet – we will work towards a sustainable future in sustainable places. Our outcomes will be: • Communities and environment - Caring, connected, sustainable communities. • Education and learning - Inspiring learners, transforming learning, strengthening partnerships. • Health and wellbeing - People live the healthiest lives possible. • Children and young people - Our children and young people thrive. • Housing and land - Good quality, suitable and sustainable places to live. • Our economy - Thriving business, fair jobs and vibrant town centres. Our values are: • Focused on people and their needs • Working with and respecting others • Accountable, effective, efficient and transparent • Ambitious, self-aware and improving • Fair, open and sustainable • Excellent employer 3. The purpose of the Council’s governance framework 89
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22 The governance framework comprises of the culture, values, systems, and processes by which the council is directed and controlled. It describes the way the Council is accountable to communities. It enables the Council to monitor the achievement of its strategic objectives and consider whether these objectives have led to the delivery of appropriate and cost-effective services. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It is based on an ongoing process designed to identify and prioritise the risks to the achievement of the council’s aims and objectives by evaluating the likelihood and potential impact of those risks being realised. This enables the Council to manage risk efficiently, effectively, and economically. The governance framework has been in place at South Lanarkshire Council for the year ended 31 March 2025 and up to the date of approval of the Annual Report and Accounts. 4. How the Council monitors and evaluates the effectiveness of its governance arrangements? The Council annually reviews the effectiveness of its governance arrangements. The key sources of assurance that inform this review and underpin the statements made within this document are shown in the diagram below. 90
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23 5. Key elements of the Council’s governance assurance framework The Council aims to achieve good standards of governance by adhering to the seven national principles below, which form the basis of the Council’s Code. These principles are used each year to evaluate governance arrangements and identify areas for improvement. The following tables demonstrates how the council has complied with these principles and provides assurance as to how they are met. Significant elements of the systems and processes that comprise the council’s governance arrangements and important changes/ developments are described. Links to the key Council documents referred to below can be found in Section 2 of the Code. Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law Links to Council’s values: • Accountable, effective, efficient, and transparent; Working with and respecting others How we do this: • The Council’s values and objectives provide clear direction to councillors and employees and are embedded in all policies and processes. • Standards of conduct and integrity were promoted through the national Code of Conduct for Councillors and by the Stand- ards and Procedures Advisory Forum. This is supplemented by role profiles which have a core accountability to maintain the highest standards of conduct. • The employee Code of Conduct outlines standards of conduct and integrity. All breaches including reported cases of suspected unethical behaviour and non-compliance with the law/policy were investigated through the employee disciplinary process and the recommended actions taken. • Professional Codes of Conduct ensured that ethical standards were maintained, and all breaches were investigated by the governing body. • To support integrity in decision making, the Council has a number of Committee procedural documents including decision making protocols known as the Scheme of Delegation, terms of reference documents, standing orders on procedures and contracts and financial regulations. • To ensure openness and transparency agendas and Committee reports are published to the council website at least five working days ahead of the scheduled meeting dates and any minutes of decisions taken by the Chief Executive during any 91
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24 period when committee meetings are suspended are publicised on the Council website. Committee meetings are live streamed to the Council’s YouTube channel. • To ensure openness and transparency in decision making processes, all declarations of interest made by councillors at meetings were recorded and made available online. • There are a range of policies such as the Counter Fraud, Bribery and Corruption Policy Statement and Strategy. These continue to be updated to reflect best practice and support a culture of ethical behaviour amongst employees and council- lors. • Health and Safety compliance during 2024/2025 was assessed as being within the top rating band of “good”. • Legal Services maintained an overview of legislation and regulations and worked with services to ensure compliance. Principle B: Ensuring openness and comprehensive stakeholder engagement Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs; Working with and respecting others How we do this: • To ensure transparency and openness in decision making processes, all agendas, reports, and decisions were published on the Council’s website and printed copies were available for public inspection for all Committee and Forum meetings (except the Standards and Procedures Advisory Forum). From April 2021 all Committee meetings were live streamed to the Council’s YouTube channel http://bit.ly/SL_Committees. From August 2021 all Forum meetings have been live streamed. • The Committee Management Information System allows members of the public to register and be notified when Committee and forum papers are published. The system also facilitates the creation of online petitions to increase the potential reach of signatories. • The work of the Council and key information from our partners is communicated regularly using a range of communication channels. The South Lanarkshire View pages on the Council website provide a dedicated source of local information and news for communities. A variety of social media channels are used to communicate updates and share information. • A ‘Let’s Talk South Lanarkshire’ campaign has been established and was used to engage local people in an initial discus- sion about their experiences of the pandemic and continues to be used for ongoing dialogue with communities on both the Council and community planning priorities. • The Council’s Community Engagement Team continue their work to increase stakeholder engagement and involvement in decision making processes through the development of new Community Planning Partnership Neighbourhood Plans which are aimed at improving outcomes and reducing inequalities. • The Community Planning Partnership published its first Community Engagement and Participation Strategy 2020-2025 which is also available online in BSL and the Council has produced an online course for employees to complement this. • A partnership Participation and Engagement Group has been established to ensure that there is a consistent and co- ordinated approach to engaging with communities. • The Council carried out circa 50 surveys and engagement activities with residents, employees, and partners, and through the council’s Citizens Panel to inform policy and service delivery. Further information on our surveys is published on the Council’s website. • To ensure inclusivity and help shape service delivery, the Council co-ordinates regular engagement with targeted groups of people such as young people, older people, people with disabilities, unpaid carers, black and ethnic minorities, etc. Groups considered items such as the budget consultation, rent setting and performance reporting. • The Participation Requests and Community Asset Transfer processes support communities to engage with the Council to improve local outcomes. • The Council’s performance Spotlights summarise what the Council has achieved and the Public Performance Reports provide a comprehensive overview of service performance. These, along with the council’s Benchmarking report demon- strate the Council’s commitment to continuous improvement and achieving Best Value; summarise the progress that the council has made in meeting its priorities and how it is performing locally and nationally. • The Council’s Digital Strategy 2022 to 2027 sets out the overall approach to digital for the Council. A key objective within the strategy is to assist those people who are unable to get online to access services digitally. The Council also leads on the Digital Inclusion Sub Group, which reports into the Community Planning Partnership. • A comprehensive range of information on how the Council operates is available on the website. The Freedom of Infor- mation Publication Scheme ensures that key information about how the council works is accessible to the public. Principle C: Defining outcomes in terms of sustainable, economic, social, and environmental benefits Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs How we do this: • The Council has a Capital Strategy that has a long-term ambition on future capital investment (up to 2027/2028) and a capital programme agreed for 2024/25. This document is underpinned by a suite of Asset Management Plans which are aligned with the council’s objectives and focus on creating an efficient, fit-for-purpose and sustainable core estate that delivers best value in terms of investment, running costs and environmental impact. 92
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25 • The Council Plan 2022 to 2027 and Community Plan 2022 to 2032 have clearly defined economic, social, and environ- mental outcomes to be delivered during the period. • A Community Wealth Building Strategy setting out the Council’s ambitions in relation to spending, workforce, land and property, finance and building the generative economy was approved in March 2021. A Community Wealth Building Com- mission was established to oversee the implementation of the Strategy, with the Commission receiving an annual report on progress. A Community Wealth Building Progress Group has been set up to ensure that timescales within the action plan are met. • The CWB Strategy is supported by an action plan which is reviewed annually, with progress reported to the Commission at Q2 and Q4 via the council’s Improve system. • Annual Resource Plans which deliver the objectives of the Council Plan were reviewed and updated. These plans outline the outcomes and actions to be achieved within the year and reference linkages with other key strategic plans of the Council and partnership plans. • The Sustainable Development and Climate Change Strategy 2022-27 was approved by the Council in June 2022 and which sets out the Council’s strategic vision ,themes and priorities in terms of the Council, environment and communities for sustainable development and climate change during the period was developed using the principles of the United Na- tion’s Sustainable Development Goals and to reduce the council’s contribution to global warming. • The Council’s Climate Change and Sustainability Committee oversees the delivery of the Sustainable Development and Climate Change Strategy 2022-2027,the Council’s transition to carbon neutrality and climate resilience. • The Council’s Procurement Strategy 2023-28 which is complemented by an annual action plan, sets out how value for money, national and local priorities will be delivered. It also demonstrates how the Council will deliver the wider social, economic, and environmental aims of procurement as required by the sustainable procurement duty. • Sustainability principles are embedded in procurement processes and in recognition of the importance of our suppliers in achieving the Council’s aim to become more sustainable. • Strategic Environmental Assessments (SEAs) were completed for all relevant Council led policies, plans and strategies developed during 2024/2025. • The South Lanarkshire Local Development Plan 2 was adopted by the Council on 9 April 2021. The spatial strategy of the plan is to encourage sustainable economic growth and regeneration, a move towards a low carbon economy, protect the natural and historic environment and mitigate against the impacts of climate change. • A summary of the findings resulting from Integrated Impact Assessments - South Lanarkshire Council Integrated Impact Assessments and Equality Impact Assessments of the Council’s key decisions on service users, communities and busi- nesses have been published on the Council’s website. • Strategic decisions of the Council have been subject to a Fairer Scotland Impact Assessment which considers how ine- qualities of outcome can be reduced. Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Focused on people and their needs; Working with and respecting others How we do this: • There has been a programme of transformational reviews undertaken over recent years to identify savings and help man- age balancing the Council’s budget. This programme is overseen by the Corporate Management Team with individual reviews led by Head of Service and sponsored by Executive Directors. Frameworks are in place for holding discussions with key stakeholders. Savings achievements are monitored monthly and reported to the Corporate Management Team quarterly. • The Financial Strategy which is aligned with the Council’s objectives was updated during the year to reflect the latest internal and external influences. This plan sets out the assumptions in terms of commitments, grant funding and efficiency requirement and demonstrates sound financial management and the ability to address projected funding gaps. • The annual budget setting consultations took place with members of the public, groups and the Council’s partners in order to inform the budget process. The annual budget is open to scrutiny and amendment by councillors until the approval of the final budget. • The Council’s Performance Management Framework has ensured that progress against intended outcomes has been regularly reported to Management Teams; Committees; and the Performance and Review Scrutiny Forum. Decisions and actions to address performance issues have been taken and monitored to ensure that they have been effective. • The Council has complied with its statutory and regulatory reporting requirements during the year. • The Public Bodies (Joint Working) (Scotland) Act 2014 sets out those Adult Care Services that are delegated to the Inte- gration Joint Board (IJB) as set out in the South Lanarkshire Health & Social Care Integration Scheme. These services continue to be operationally delivered by the Council in line with the strategic direction set out in the Strategic Commis- sioning Plan and IJB Directions. • The Council considers the specification and achievement of community benefits, which focus on the health, economic, social, and environmental wellbeing of the South Lanarkshire area, when awarding contracts. • To improve efficiency and effectiveness, the Council is the lead authority for a range of collaborative projects and services delivered through the Clyde Valley Learning and Development Group. We also work closely with, and share services with partners including SLLC, IJB and Seemis. Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it Links to Council’s values: 93
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26 Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Excellent employer; Focused on people and their needs; Working with and respecting others How we do this: • A Leadership Challenge Programme which is linked to succession planning was rolled out during 2023-24, and this is continuing. • Learning and Development programmes were revised and employees at all levels can now access optional accredited management qualifications. • Training requirements were identified and online learning and development opportunities including webinars and e-brief- ings were developed and offered to all councillors. • A review of the approach to agile working commenced in 2024 and is expected to conclude in 2025. • A range of policies and activities are in place to support the Health and Wellbeing of employees including physical and mental health and these have been regularly communicated. Online wellbeing events were held in response to the new ways of working. • The Council recognises that skilled and motivated employees are a key asset. All employees have an annual performance appraisal which links to the Council values and a Personal Development Plan. The council offers a range of training interventions to support employee development. • The Council has a comprehensive and coordinated approach to workforce planning which also supports succession plan- ning. Each Resource reviews their workforce plan and related action plan to better understand workforce capacity issues, further challenges, and opportunities to ensure that resources are in the right place, at the right time and people have the right skills. The Council Workforce Strategy and Planning process provides the framework for workforce planning in the Council. The Strategy and Plans are aligned to current and future Council service needs and details the approach by the Council to ensure that the workforce required is in place to meet those needs. • Senior Managers have overseen the annual scrutiny of the Council’s assets through the review of a suite of Asset Man- agement Plans. Service Asset Management Plans have been developed in line with CIPFA guidance and these feed into the Corporate Asset Management Plan which outlines priorities and provides an overview of how the Council has performed in this area. • The Council’s Scheme of Delegation, Financial Regulations, Standing Orders on Contracts and Terms of Reference en- sured that Committees, officers, and statutory officers were clear on the decisions that could be made within their area of authority. A Mid-Term Review of these arrangements having been concluded in 2024. This is supplemented by councillor’s role profiles which outline the key purpose, specific and core accountabilities for each role. • The Council continues to work with a range of public sector, business, and academic partners to improve outcomes for those living and working in South Lanarkshire. Strategic Partnerships include the Community Planning Partnership and the Glasgow City Region City Deal. • Local Government Benchmarking Framework (LGBF) results continue to be reported to the Performance Review and Scrutiny Forum, containing all LGBF indicators. As other reporting arrangements mature, the scale of this report may be reduced and the strategic suite of indicators aligned to Council Plan outcomes are featured in an appendix to the Council Plan Q4 report, giving an opportunity to assess the Council’s performance over time and comparative performance in the context of the Council Plan priorities. • Further LGBF indicators will feature in the Council’s public performance reporting, both in the Annual Performance Spot- lights and in the PPR pages on the website. These are topic-based and place the LGBF information in a richer context than is possible in the annual LGBF report. The results are analysed and an action plan developed which will be monitored by the Senior Management Team. • To complement this work, an LGBF dashboard has been developed to provide easy access to the LGBF indicators and the narrative that sits alongside them. The dashboard shows time trends for each of the strategic indicators aligned with the council plan outcomes and provides charts comparing SLC performance with both the Scottish and the family group average. • The Council takes a risk-based approach to self-assessment which is used to review and redesign services with a focus on fundamental change. Progress and the impact of improvement activity was reported to the Senior Management Team and the Performance and Review Scrutiny Forum. • The Council has a robust complaints process which is underpinned by national complaints handling standards. Complaints performance was regularly reported to Senior Management and Committee and learning from complaints which is integral to this process is also published on the Council’s website. Complaint handling procedures have been updated in line with national changes and communicated to all employees. Principle F: Managing risks and performance through robust internal control and strong public financial management Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving How we do this: • The Council, in partnership with Trade Unions, ensured that safe systems of work were in place through a robust risk assessment process, changes to working methods and supply of personal protective equipment. • The Council has put in place comprehensive arrangements for identifying, evaluating, and controlling significant risks which threaten the council’s ability to meet its objectives to deliver services to the public. There is also a robust process in place for compliance monitoring of the Council’s Risk Management Strategy, Resource Risk Registers and Control Plans. 94
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27 • The annual end of year compliance statement evidenced that all Resources were compliant with Risk Management Stra- tegic requirements. • The Council’s Internal Audit Service which complies with Public Sector Internal Audit Standards completed an annual programme of risk-based audits with an objective of providing an opinion on the adequacy and effectiveness of the Coun- cil’s risk management, governance, and internal control arrangements. Where improvements were required, action plans were developed and monitored and where necessary follow-up audit work completed. • In response to changes in working practices and the introduction of new systems, Internal Audit has advised on key internal controls that should be maintained. • The Information Governance Board is reasonably satisfied that Resources have followed the Information Governance operational arrangements to promote effective arrangements for the safe collection, storage, use and sharing of data, including processes to safeguard personal data, but this will be the subject of further work in 2025/26, including to work through an action plan approved by the Corporate Management Team and the Information Governance Board. • Information security incidents have continued to be monitored and considered for notification to the Information Commis- sioner’s Office and are reported to the Corporate Management Team on a quarterly basis and to the Council’s Senior Information Risk Officer (the Executive Director of Finance and Corporate Resources) upon internal notification. Through- out the period, the Council’s Data Protection Officer provided advice and assistance to Resources in relation to meeting their obligations under UK General Data Protection Regulations (GDPR). • The system of internal financial control is based upon the Financial Regulations which set out the rules to ensure robust internal control over the council’s finances. Control is maintained through regular management information, management supervision and a structure of delegation and accountability. • External Audit of the Council’s accounts is robust and a “clean audit certificate” was issued for 2023/2024. • Through a well-established Performance Management Framework, the Council has clearly defined processes in place for the identification, monitoring, and reporting of its objectives to ensure continued effectiveness and the achievement of Best Value. Progress is monitored and reported regularly to both managers and councillors. This includes areas of under- performance and the related improvement actions. • Trustees of the South Lanarkshire Charitable and Educational Trusts received independent legal training setting out their duties and responsibilities in ensuring that the trusts operate in a manner designed to benefit communities. • The Executive Director of Finance and Corporate Resources is a member of the Council’s Senior Management Team and as such, is integral in all major decisions taken by the Council, and in material matters which are submitted to councillors for decision. This involvement fulfils the expectation of CIPFA in terms of the role of the Chief Financial Officer. • The Council’s existing financial management controls and measures continue to provide comfort on the Council’s financial management and resilience. This includes the preparation of a medium-term strategy presented to members regularly as part of the annual budget process, providing members with the information required to assist budget planning. A report on the Council’s Financial Resilience was presented to the Risk and Audit Scrutiny Committee during 2024/2025. Principle G: Fair, Open and Sustainable; Implementing good practices in transparency, reporting, and audit to deliver effec- tive accountability Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Working with and respecting others How we do this: • The Good Governance Group has completed the annual review of governance arrangements at resource level and in line with the CIPFA/SOLACE Delivering Good Governance Framework, this review having bene reported to the Corporate Management Team and some changes to the previous arrangement shaving been agreed. Governance improvement actions have also been identified and are included in Resource/Service Action Plans. Progress against actions including those highlighted as significant governance areas for action will be reported to the Senior Management Team and Com- mittee. • In the 2023/2024 annual audit report, the external auditor reported that the Council had in place appropriate arrangements to support good governance and accountability, and they were of the view that governance arrangements remained effec- tive in 2023/24. • All Directors completed their annual Statement of Assurance and relevant assurances have been provided. • The Council prepares and publishes an Annual Governance Statement which is aligned with national guidance and reflects on the adequacy and effectiveness of the Council’s governance arrangements. This is independently considered by Ex- ternal Audit and published with the Annual Accounts and separately on a dedicated governance web page. • The annual review of governance arrangements for the Council’s at Arm’s Length External Organisations (ALEOs) and key external service providers has not highlighted any compliance issues. • The annual review of the Local Code of Corporate Governance was completed, and the revised Code was approved by Committee in February 2025 and re-published on the Council’s website. • All agendas, reports and decisions continue to be published (except those exempt under the Local Government (Scotland) Act 1973) on the Council’s website. All Committee and Forum meetings are livestreamed to the Council’s YouTube page http://bit.ly/SL_Committees. • The Risk and Audit Scrutiny Committee considered the adequacy and effectiveness of the Council’s governance arrange- ments and internal control environment and approved the Annual Governance Statement and Accounts. • Internal audit activity has continued to be reported to the Senior Management Team and to the Risk and Audit Scrutiny Committee. 95
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28 • Outcomes from external audit and inspection activity was reported to the appropriate Committee and action plans were developed for implementation where required. 6. Review of Effectiveness The review of governance arrangements for 2024/2025 has also considered the following assurance outcomes: - Group Assurances In respect of the Joint Boards, Charities and Companies that fall within the Council’s group boundary, the review of their internal financial control systems is informed by: - • Annual Governance Statements included in the respective financial statements of the Joint Boards. • Assurances from company directors and/or other senior company officials; and • The work of the relevant body’s respective external auditors (and where relevant internal auditors) and other interim reports. The Executive Director of Finance and Corporate Resources, the Council’s Chief Financial Officer, has considered the effectiveness of the group’s internal financial control system for the year ended 31 March 2025. It is the Executive Director of Finance and Corporate Resources’ opinion that reasonable assurance can be placed on its effectiveness. Internal Assurance It is the opinion of the Council’s Risk Management Service that a reasonable level of assurance can be placed on the Council’s strategic risk control environment and a reasonable level of assurance can be placed on the council’s operational risk control environment. It is the opinion of the Council’s Audit and Compliance Manager that, overall, reasonable assurance can be placed on the adequacy and effectiveness of the council’s framework of governance, risk management and control arrangements for the year ending 31 March 2025. 7. Significant Governance Areas The 2023/2024 Annual Governance Statement identified 9 significant governance areas that the Council were working to address. Progress updates can be found on the Council’s website; see the Significant Governance Areas Update Q4 2023/2024. Eight of these areas remain as significant areas of action for the Council moving forward into 2025/2026 and will continue to be monitored as such. Through the 2024/2025 annual governance review, the following areas, which include an outline of the actions being taken to ad- dress them, have been identified as significant areas of work for the Council during 2025/2026: - No. Areas identified in 2024/2025 Actions Lead Officer 1 Information Governance Compliance with statutory and Council performance targets. New. Continue to closely monitor performance on information governance including FOI requests and Subject Access requests and data breaches. Review the guidance pro- vided to staff regarding the safe use of emails and sharing of data supported by regular staff communica- tion. Executive Director of Finance and Corporate Re- sources 2 Cyber Resilience Compliance with legislative and regulatory policy A programme of actions to maintain cyber security and resilience in 2025/2026 will include: • Refresh/retiral of legacy systems, network equipment and end user devices (mobile phones, PCs) • Programme of security patching of all systems • Compliance with PSN and Cyber Essentials schemes • Incident response exercising and onboarding of Cyber Incident Response partner • Officer training and awareness (e.g., phishing, passwords) • Data security reviews as part of new system installation and security monitoring Executive Director of Finance and Corporate Re- sources 3 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, in- cluding the more efficient and effective delivery of ser- vices, to internal and external service users. This will Executive Director of Finance and Corporate Re- sources 96
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29 No. Areas identified in 2024/2025 Actions Lead Officer include existing implementations of Liquidlogic (Social Work) and HOME (Housing & Technical Resources) and solutions to deliver the outputs of the Customer Engagement and Digital Transformation Reviews. 4 Financial Challenges Exceptional increase in costs, re- duction in council funding, result- ing in difficulties maintaining front line services The Council continues to face a challenging situation in the medium to long-term because of reduced funding in real terms, rising costs and an increase in demand. The Council has developed a medium-term strategy which identifies budget pressures, future risks and un- certainties, and projects budget gaps to 2027/2028. The Budget Strategy for 2026/2027 and 2027/2028 will be updated and presented to councillors in 2025. A Longer Term Financial Strategy will also be produced during 2025/2026. Chief Executive Director of Fi- nance and Corpo- rate Resources 5 Homelessness The Homelessness Strategic Action Plan was approved at H&TR Committee on 26 February 2025, for a further year, noting mitigations that the Service have put in place. The Service has breached the Unsuitable Accommoda- tion Order in 2024/25; however, approval was sought at H&TR Committee on 24 April 2024 to enter into part- nership with Social Bite and in turn a supported accom- modation village is under development. This will help reduce reliance on unsuitable accommodation such as hotels. Other implications such as the Prisoner Early Release, increased asylum and refugee levels, continued re- moval of local connection feature within the Strategic Action Plan. In relation to the new Housing Bill, the po- tential new duties of ‘Ask & continue to be monitored as the Bill progresses through parliament as this could have consequences for the service. Director of Hous- ing & Technical Resources 6 Sustainable Development and Climate Change A new Strategy for 2022-2027 was approved by the Council in June 2022 together with the Council Plan and Community Plan. An Action Plan was developed as part of the Strategy, and this continues to be imple- mented and reviewed annually with progress updates being reported to the Climate Change and Sustainabil- ity Committee on a 6 monthly basis. Following a period of public consultation, the Council approved in June 2024 its first Local Heat & Energy Ef- ficiency Strategy (LHEES) for the period 2024 - 2028. The LHEES will be a key component of a long-term strategy to reduce of carbon emissions and reduce fuel poverty. Director of Com- munity and Enter- prise Resources 7 Economic Strategy A new Economic Strategy 2022-2027 was approved by Council in June 2022 as part of a suite of documents accompanying the draft Council Plan and Community Plan. The vision within the Strategy is “to make South Lanarkshire a flourishing, green, dynamic and equitable place for communities, visitors, businesses and inves- tors”. The Strategy is framed around the 3 themes of sustainable, inclusive, economic development- People, Place and Business. Progress on the delivery of the Action Plan will be measured 6-monthly with the results being reported an- nually to the relevant committees. Director of Com- munity and Enter- prise Resources 97
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30 No. Areas identified in 2024/2025 Actions Lead Officer The Council continues to lead on local economic growth supporting South Lanarkshire businesses and promoting inward investment. The Council has prepared masterplans to support the regeneration of Hamilton and East Kilbride and is now working on the delivery of various projects and liaising with a number of external parties. 8 South Lanarkshire Leisure and Culture Continue to work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability Director of Com- munity and Enter- prise Resources 9 Recruitment and Retention Challenges The labour market has tightened, and employees have more mobility through agile working which is not neces- sarily tied to a geographical location. In addition, some older workers have reassessed priorities and taken up an option for partial or full retiral earlier than they would have done previously. As a result, there are a number of skills in short supply nationally and this is putting pressure on local govern- ment services. Examples of this include planners, envi- ronmental health officers, procurement, Social Care and Education posts. South Lanarkshire Council has experienced these is- sues and is taking the following actions: - • Workforce Strategy and Plans for 2025 – 27 • A recruitment strategy to provide a framework of improved recruitment actions and stand- ards. • A strategic review of maximising attendance • Enhanced employee support arrangements are in place and well developed Chief Executive and all Directors 8. Summary The annual review of governance arrangements across the Council and overall compliance with the Council’s Code demonstrate sufficient evidence that the Code’s principles of Delivering Good Governance in Local Government operated effectively, and that the Council complies with its Code. During 2025/2026, steps will be taken to address the significant governance areas highlighted in this statement to further strengthen the council’s governance arrangements and evidence our commitment to continuous improvement. Joe Fagan Leader of the Council Signature: Date: Paul Manning Chief Executive Signature: Date: 98
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31 Statement of Responsibilities The Risk and Audit Scrutiny Committee is required to: Make arrangements for the proper administration of its financial affairs and to secure that the proper officer has responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). South Lanarkshire Council has designated the Executive director of Finance and Corporate Resources as the officer with these responsibilities. Manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets. Ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014), and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003). Approve the Annual Accounts for signature. I confirm that these annual accounts were approved for issue by the Risk and Audit Scrutiny Committee at its meeting on 25 June 2025. Councillor Joe Fagan 99
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32 Leader of the Council Executive Director of Finance and Corporate Resources’ responsibilities The Executive Director of Finance and Corporate Resources is responsible for the preparation of the council’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Accounting Code). In preparing the Annual Accounts, the Executive Director of Finance and Corporate Resources has: selected suitable accounting policies and then applied them consistently. made judgements and estimates that were reasonable and prudent. complied with legislation. complied with the local authority Accounting Code (in so far as it is compatible with legislation) The Executive Director of Finance and Corporate Resources has also: kept proper accounting records which were up-to-date. taken reasonable steps for the prevention and detection of fraud and other irregularities. Annual Accounts I certify that the financial statements give a true and fair view of the financial position of the council (and its group) at the reporting date and the transactions of the council (and its group) for the year ended 31 March 2025. Jackie Taylor Executive Director (Finance and Corporate Resources) South Lanarkshire Council 100
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33 Remuneration Report Remuneration Policy Senior Employees The salary of senior employees is set by reference to national arrangements. The Scottish Joint Negotiating Committee (SJNC) for Local Authority Services sets the salaries for the Chief Officers of Scottish local authorities. COSLA Industrial Relations Circular 10 24b sets the amount of salary for Chief Officers and the Chief Executive of South Lanarkshire Council for 2024/2025. Senior Councillors The remuneration of councillors is regulated by the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 (SSI No. 2007/183) as amended most recently by The Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2024 (SSI 2024/24). The Regulations provide for the grading of councillors for the purposes of remuneration arrangements, as either the Leader of the Council, the Civic Head (or Provost), Senior Councillors or Councillors. The Leader of the Council and the Civic head (or Provost) cannot be the same person for the purposes of payment of remuneration. A Senior Councillor is a Councillor who holds a significant position of responsibility in the Council’s political management structure. The salary that is to be paid to the Leader of the Council is set out in the Regulations. For 2024/2025 the salary for the Leader of the Council is £49,810. The Regulations permit the Council to remunerate one Civic Head or Provost. The regulations set out the maximum salary that may be paid to that Civic Head. The Council follows the regulations and pays a salary of £37,360 to the Provost.. The Regulations also set out the remuneration that may be paid to Senior Councillors and the total number of Senior Councillors the Council may have. The maximum yearly amount that may be paid to a Senior Councillor is 75 per cent of the total yearly amount payable to the Leader of the Council. The total yearly amount payable by the Council for remuneration of all of its Senior Councillors shall not exceed £557,674 (excluding the Leader and Provost). The Council is able to exercise local flexibility in the determination of the precise number of Senior Councillors up to a maximum of 19 and their salary within these maximum limits. In 2024/2025, the Council had 19 Senior Councillors and the salary paid to these councillors totalled £551,007 which is less than the threshold. The Regulations also permit the Council to pay contributions or other payments as required to the Local Government Pension Scheme in respect of those Councillors who elect to become Councillor members of the pension scheme. In addition to the Senior Councillors of the Council the Regulations also set out the remuneration payable to Councillors with the responsibility of a Convenor or a Vice-Convenor of a Joint Board. The Regulations require the remuneration to be paid by the Council of which the Convenor or Vice-Convenor is a member. The Council is also required to pay any pension contributions arising from the Convenor or Vice-Convenor being a member of the Local Government Pension Scheme. The Council is reimbursed by the Joint Board for any additional remuneration paid to the member from being a Convenor or Vice-Convenor of a Joint Board. Audit Arrangements All information disclosed in the tables numbered 1 to 7 in this Remuneration Report will be audited by the Council’s auditors, Audit Scotland. The other sections of the Remuneration Report will be reviewed by Audit Scotland to ensure that they are consistent with the financial statements. Note 14 to the Accounts contains total payments made to all Councillors and will be audited as part of the audit of the Financial Statements and supplementary Notes to the Accounts. 101
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34 Table 1 – General Pay Band Disclosure for Senior Employees Annual Remuneration 2024/25 Number of Employees 2023/24 Number of Employees 50,000 - 54,999 541 1,521 55,000 - 59,999 381 371 60,000 - 64,999 228 216 65,000 - 69,999 206 204 70,000 - 74,999 139 163 75,000 - 79,999 84 87 80,000 - 84,999 37 50 85,000 - 89,999 5 7 90,000 - 94,999 6 6 95,000 - 99,999 3 7 100,000 - 104,999 3 6 105,000 - 109,999 6 3 110,000 - 114,999 3 16 115,000 – 119,999 13 2 120,000 – 124,999 1 - 125,000 – 129,999 2 1 130,000 – 134,999 - - 135,000 – 139,999 - 1 140,000 - 144,999 - 1 145,000 - 149,999 - 1 150,000 - 154,999 - 3 155,000 - 159,999 2 - 160,000 – 164,999 2 - 165,000 – 169,999 1 1 170,000 – 194,999 (Note 1) - - 195,000 – 199,999 1 - Note 1: These are merged pay bands covering more than £5,000 due to the fact that no employees fell into these bands in either financial year. Disclosure of Exit Packages There were no exit packages agreed by the Council in 2024/2025, therefore the total cost of exit packages for 2024/2025 totals is nil. No provisions have been made as there are no known exit packages that relate to employees who will leave the Council in the coming year (2025/2026). 102
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35 Disclosure of Remuneration The tables below provide details of the remuneration paid to the Council’s Senior Employees and Senior Councillors and to the Chief Executive or most senior manager of subsidiary bodies (South Lanarkshire Leisure and Culture Ltd and Routes to Work South). Comparative figures for 2023/2024 have been shown if they were in post at that time. We have also disclosed the remuneration of Councillors who hold Convenor and Vice-Convenor roles with Joint Boards. The Council pays the Councillor on behalf of the Joint Board for their role and recovers these charges from the Joint Board. The annual return of Councillors’ remuneration for 2024/2025 is available on the Council’s website (www.southlanarkshire.gov.uk). Table 2 – Senior Officers Post Salary / fees £ Taxable Expenses £ Compensation for Loss of Office £ Any Other Remuneration £ 2024/25 Total £ 2023/24 Total £ P Manning Chief Executive Executive Director of Finance and Corporate Resources (To 2 January 2024) 195,065 - - - - - - - 195,065 - 44,304 (Full year Equivalent 180,793) 125,011 (Full Year Equivalent 165,587) D Booth Executive Director of Community and Enterprise Resources 162,560 - - - 162,560 154,778 C McKenzie Executive Director of Education Resources (From 19 June 2023 to 23 February 2025) 158,737 (Full Year Equivalent 160,350) - - - 158,737 (Full Year Equivalent 160,350) 119,883 (Full Year Equivalent 152,631) A Donaldson Interim Executive Director of Education Resources (From 27 November 2024) 53,983 (Full Year Equivalent 158,126 - - - 53,983 (Full Year Equivalent 158,126 n/a J Taylor Executive Director of Finance and Corporate Resources (From 11 March 2024) Section 95 Officer (From 3 January 2024 to 10 March 2024) 158,126 - - - - - - - 158,126 - 8,772 (Full Year Equivalent 152,631) 20,976 (Full Year Equivalent 114,056) 103
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36 Post Salary / fees £ Taxable Expenses £ Compensation for Loss of Office £ Any Other Remuneration £ 2024/25 Total £ 2023/24 Total £ S Sengupta Executive Director of Health and Social Care (Note 1) 162,560 - - - 162,560 156,911 S Gibson Executive Director of Housing and Technical Resources 160,350 - - - 160,350 152,631 L Purdie Chief Social Work Officer 122,615 - - - 122,615 118,363 C Sneddon Chief Executive (To 2 January 2024) - - - - - 147,017 (Full Year Equivalent 193,577) T McDaid Executive Director of Education Resources (To 16 June 2023) - - - - - 33,066 (Full Year Equivalent 156,911) Total 1,173,996 - - - 1,173,996 1,081,712 The senior employees included in the table include any local authority employee: • Who has responsibility for management of the local authority to the extent that the person has power to direct or control the major activities of the authority (including activities involving the expenditure of money), during the year to which the Report relates, whether solely or collectively with other persons. • Who holds a post that is politically restricted by reason of section 2(1) (a), (b) or (c) of the Local Government and Housing Act 1989; or • Whose annual remuneration, including any remuneration from a local authority subsidiary body, is £150,000 or more. The total remuneration includes Returning Officer (RO) fees. An RO is the person responsible for administering an election. These duties are separate from any duties undertaken as a local government employee. The total RO fee for a UK Parliamentary Election is set by legislation for the election in question. The RO can appoint one or more persons to discharge any or all of the functions of the post but cannot delegate personal responsibility for delivering the election. Paul Manning was the RO appointed by South Lanarkshire Council during the financial year 2024/2025 and carried out his duties as RO for the 2024 United Kingdom General Election held on 4 July 2024. Note 1 While the Executive Director of Health and Social Care is contractually employed by the Council, a proportion of their total remuneration is funded by the South Lanarkshire Health and Social Care Partnership in respect of their role as Chief Officer of the Partnership. Table 3 - Senior Employees of the Council’s Subsidiary Bodies Name and Post Salary/fees Taxable Expenses £ Compensation for Loss of office £ Any other Remuneration £ 2023/24 Total £ 2022/23 Total £ K Morrison 104
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37 Chief Executive of South Lanarkshire Leisure and Culture Ltd 115,115 - - - 115,115 111,118 S Barr Chief Executive of Routes to Work South 85,398 - - - 85,398 82,396 Total 200,513 - - - 200,513 193,514 Table 4 - Remuneration of Senior Councillors and Convenors and Vice-Convenors of Joint Boards The table below shows the full year remuneration for all senior councillors in 2024/2025. This includes senior councillors who started or ended their role during the year. Name and Post Salary £ Taxable Expenses £ Compensation for Loss of Office £ Any Other Remuneration £ 2024/25 Total £ 2023/24 Total £ A Allison Opposition Leader – Second Opposition 28,251 - - - 28,251 26,602 R Brown Community and Enterprise Resources Committee Chair 31,413 - - - 31,413 29,579 A Buchanan East Kilbride Area Committee Chair 25,490 - - - 25,490 24,001 A Carmichael Licensing Committee Chair 25,490 - - - 25,490 24,001 M Chalmers Depute Leader of the Opposition 28,251 - - - 28,251 26,602 G Convery Depute Leader of the Council 32,399 - - - 32,399 30,507 M Cooper Provost 37,360 - - - 37,360 35,179 M Devlin Business Manager Ruling Group 32,399 - - - 32,399 30,507 J Fagan Leader of the Council 49,810 - - - 49,810 46,902 A Falconer Hamilton Area Committee Chair 25,490 - - - 25,490 25,127 105
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38 Name and Post Salary £ Taxable Expenses £ Compensation for Loss of Office £ Any Other Remuneration £ 2024/25 Total £ 2023/24 Total £ L Hamilton Education Resources Committee Chair (From 16 April 2023) 31,413 - - - 31,413 28,363 (Full Year Equivalent 29,579) C McClymont Clydesdale Area Committee Chair 25,490 - - - 25,490 24,001 L McDonald Finance and Corporate Resources Committee Chair 31,413 - - - 31,413 29,579 M McGeever Climate Change Committee Chair (To 27 June 2024) 7,574 (Full Year Equivalent 31,413) - - - 7,574 (Full Year Equivalent 31,413) 29,579 D McLachlan Housing and Technical Resources Committee Chair 31,413 - - - 31,413 29,579 R Nelson Planning Committee Chair 31,413 - - - 31,413 29,579 C Nugent Cambuslang and Rutherglen Area Committee Chair 25,490 - - - 25,490 24,001 N Rae Climate Change Committee Chair (From 12 September 2024) 17,299 (Full Year Equivalent 31,413) - - - 17,299 (Full Year Equivalent 31,413) n/a J Ross Opposition Leader – First Opposition 32,399 - - - 32,399 30,507 D Shearer Business Manager - Opposition (From 27 October 2023) 25,490 - - - 25,490 10,324 (Full Year Equivalent 24,001) 106
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39 Name and Post Salary £ Taxable Expenses £ Compensation for Loss of Office £ Any Other Remuneration £ 2024/25 Total £ 2023/24 Total £ G Thomson Depute Provost 31,017 - - - 31,017 29,206 M Walker Social Work Resources Committee Chair 31,413 - - - 31,413 29,579 M Horsham Business Manager Opposition (From 18 May 2022 to 22 October 2023) - - - - - 13,480 (Full Year Equivalent 18,430) G Keatt Education Resources Committee Chair (From 16 January 2023 to 15 April 2024) - - - - - 1,216 (Full Year Equivalent 29,579) Total 638,177 - - - 638,177 608,000 Councillors with Joint Board Responsibilities W Brogan Convenor Lanarkshire Valuation Joint Board 26,686 - - - 26,686 25,128 Total 26,686 - - - 26,686 25,128 The Council is reimbursed by Lanarkshire Valuation Joint Board for the additional remuneration that the Council paid to the member for being a Convenor of the Joint Board. The following recharges were made to Joint Boards for South Lanarkshire Council Councillors holding Convenor/Depute Convenor roles: • Recharge to Lanarkshire Valuation Joint Board in 2024/2025 - £5,341 (2023/2024 - £5,029) Pension Rights Pension benefits for councillors and local government employees are provided through the Local Government Pension Scheme (LGPS). Councillors’ pension benefits are based on career average pay. The councillor’s pay for each year or part year ending 31 March (other than the pay in the final year commencing 1 April) is increased by the increase in the cost of living, as measured by the appropriate index (or indices) between the end of that year and the last day of the month in which their membership of the scheme ends. The total of the revalued pay is then divided by the period of membership to calculate the career average pay. This is the value used to calculate the pension benefits. Local government employees had a final salary pension scheme prior to 1 April 2015. This means that pension benefits are based on the final year’s pay and the number of years that person has been a member of the scheme. As of 1 April 2015, local government employees are now part of a defined benefit pension scheme worked out on a career average basis. Benefits built up are calculated using pensionable pay each scheme year, rather than final salary. All benefits built up prior to this date are protected. 107
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40 From 1 April 2009, a five-tier contribution system was introduced with contributions from scheme members based on how much pay falls into each tier. This is designed to give more equality between the costs and benefits of scheme membership. Under The Local Government Pension Scheme (Scotland) Regulations 2014, the earnings ranges used to determine annual contribution rates are to be increased each year by any increase applied to pensions under the Pensions (Increase) Act 1971. In accordance with this the salary bands for 2022/2023 were uprated by the Consumer Prices Index (CPI) increase for 2023/2024. The member contribution rates and tiers for 2024/2025 are shown below along with those that applied in 2023/2024: Pensionable Pay Contribution rate 2024/25 Pensionable Pay Contribution rate 2023/24 On earnings up to an including £27,000 5.50% On earnings up to an including £23,000 5.50% On earnings above £27,000 and up to £33,000 7.25% On earnings above £23,000 and up to £28,100 7.25% On earnings above £33,000 and up to £45,300 8.50% On earnings above £28,100 and up to £38,600 8.50% On earnings above £45,300 and up to £60,400 9.50% On earnings above £38,600 and up to £51,400 9.50% On earnings above £60,400 12.00% On earnings above £51,400 12.00% From April 2015, if a person works part-time their contribution is based on their part-time pay. Prior to this, if a person worked part-time, their contribution rate was worked out on the whole-time pay rate for the job, with actual contributions paid on actual pay earned. There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for lump sum up to the limit set by the Finance Act 2004. From 1 April 2015, benefits are calculated on the basis of a revalued annual pension built up of 1/49th of pensionable pay each year, plus inflation to keep up with the cost of living. Prior to this date, the accrual rate guaranteed a pension based on 1/60th of final pensionable salary and years of pensionable service and prior to 2009 the accrual rate guaranteed a pension based on 1/80th and a lump sum based on 3/80th of final pensionable salary and years of pensionable service. The value of the benefits has been calculated without exercising any option to commute pension entitlement into a lump sum and without any adjustment for the effects of future inflation. In those cases where members have transferred pension entitlements from previous employments, the pension figures shown relate to the benefits that the person has accrued as a consequence of their total local government service, and not just their current appointment. It also reflects both employer and employee contributions. Table 5 – Pension Benefits: Senior Employees The Pension entitlement of Senior Employees for the year to 31 March 2024 are shown in the table below, together with the contribution made by the council to each senior employees’ pension during the year. The accrued pension benefit reflects both the employer and the employee contributions. Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution Made by the Council 2024/25 £ Pension Contribution Made by the Council 2023/24 £ P Manning Chief Executive Executive Director of Finance and Corporate Resources (To 2 January 2024) Pension Lump Sum 95 119 13 15 12,167 - 8,551 24,127 108
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41 Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution Made by the Council 2024/25 £ Pension Contribution Made by the Council 2023/24 £ D Booth Executive Director of Community and Enterprise Resources Pension Lump Sum 73 103 6 4 10,566 29,872 C McKenzie Executive Director of Education Resources (From 19 June 2023 to 23 February 2025) Pension Lump Sum 23 - 4 - 9,196 23,137 A Donaldson Interim Executive Director of Education Resources (From 27 November 2024 Pension Lump Sum 44 18 - - 3,509 n/a J Taylor Executive Director of Finance and Corporate Resources (From 11 March 2024) Section 95 Officer (From 3 January 2024 to 10 March 2024) Pension Lump Sum 61 61 7 5 10,278 1,693 4,048 S Sengupta Executive Director of Health and Social Care (Note 1) Pension Lump Sum 12 - 4 - 10,566 30,284 S Gibson Executive Director of Housing and Technical Resources (From 21 November 2022) Pension Lump Sum 13 - 7 - 10,423 29,458 L Purdie Chief Social Work Officer Pension Lump Sum 65 86 5 2 7,970 22,844 C Sneddon Chief Executive (To 2 January 2024) Pension Lump Sum n/a n/a n/a n/a n/a 28,374 T McDaid Executive Director of Education Resources (To 16 June 2023) Pension Lump Sum n/a n/a n/a n/a n/a 6,382 Total 74,675 208,770 109
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42 All senior employees shown in the table above are members of the Local Government Pension Scheme (LGPS). Where employees have joined the council but not transferred previous employment pension benefits into the Strathclyde Pension Fund the pension figures shown relate only to their current appointment, otherwise the figures shown relate to the benefits that the pension has accrued as a consequence of their total local government service including payments for election duties. Table 6 – Pension Benefits: Senior Employees of the Council’s Subsidiary Bodies Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution 2024/25 £ Pension Contribution 2023/24 £ K Morrison Chief Executive of South Lanarkshire Leisure and Culture Ltd Pension Lump Sum 32 20 8 1 7,482 21,446 S Barr Chief Executive of Routes to Work South Pension Lump Sum - - - - 6,832 6,592 Total 14.314 28,038 Routes to Work South operates a defined contributions scheme for its employees. Accordingly, the only information to be provided in respect of its senior employees is the amount of any pension contributions made to that scheme by the subsidiary body. Table 7 – Pension Benefits: Senior Councillors The Pension entitlement of Senior Councillors for the year to 31 March 2020 are shown in the table below, together with the contribution made by the council to each Senior Councillors’ pension during the year. The accrued pension benefit reflects both the employer and the employee contributions. Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution Made by the Council 2024/25 £ Pension Contribution Made by the Council 2023/24 £ A Allison Opposition Leader – Second Opposition Pension Lump Sum 5 - 1 - 1,808 5,134 A Buchanan East Kilbride Area Committee Chair Pension Lump Sum 9 2 1 - 1,631 4,632 M Chalmers Depute Opposition Leader Pension Lump Sum 5 - 1 - 1,808 5,134 G Convery Depute Leader Pension Lump Sum 2 - 1 - 2,074 5,888 110
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43 Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution Made by the Council 2024/25 £ Pension Contribution Made by the Council 2023/24 £ M Cooper Provost Pension Lump Sum 7 - 1 - 2,391 6,790 M Devlin Business Manager Ruling Group Pension Lump Sum 7 - 1 - 2,074 5,888 J Fagan Leader of the Council Pension Lump Sum 6 - 1 - 3,188 9,052 A Falconer Hamilton Area Committee Chair Pension Lump Sum 6 - 1 - 1,631 4,632 L Hamilton Education Resources Committee Chair Pension Lump Sum 7 - 1 - 2,010 5,474 C McClymont Clydesdale Area Committee Chair Pension Lump Sum 6 - - - 1,631 4,632 L McDonald Finance and Corporate Resources Committee Chair Pension Lump Sum 2 - 1 - 2,010 5,709 M McGeever Climate Change Committee Chair (To 27 June 2024) Pension Lump Sum 4 - 1 - 485 5,709 D McLachlan Housing and Technical Resources Committee Chair Pension Lump Sum 9 - 1 - 2,010 5,709 R Nelson Community and Enterprise Resources Committee Chair Pension Lump Sum 3 - - - 2,010 5,709 111
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44 Name and Post Title Accrued Pension Benefits to 31 March 2025 £000 Movement in Accrued pension Benefits since 31 March 2024 £000 Pension Contribution Made by the Council 2024/25 £ Pension Contribution Made by the Council 2023/24 £ N Rae Climate Change Committee Chair (From 12 September 2024) Pension Lump Sum 2 - n/a n/a 1,107 n/a D Shearer Business Manager – Opposition (From 27 October 2023) Pension Lump Sum 9 2 1 - 1,631 1,993 G Thomson Depute Provost Pension Lump Sum 2 - 1 - 1,985 5,637 M Walker Social Work Resources Committee Chair Pension Lump Sum 4 - 1 - 2,010 5,709 M Horsham Business Manager Opposition (From 18 May 2022 to 22 October 2023) Pension Lump Sum n/a n/a n/a n/a n/a 2,602 G Keatt Education Resources Committee Chair (From 16 January 2023 to 15 April 2023) Pension Lump Sum n/a n/a n/a n/a n/a 235 Total 33,494 94,275 Councillors with Joint Board Responsibilities W Brogan Convenor Lanarkshire Valuation Joint Board Pension Lump Sum 9 2 1 - 1,708 4,850 Total 1,708 4,850 All Senior Councillors shown in the table above are members of the Local Government Pension Scheme (LGPS). The pension figures shown relate to the benefits that the pension has accrued as a consequence of their total local government service and not just their current appointment. The council is reimbursed by the Joint Board for the additional pension contributions paid by the council for the Convenor. The following recharges were made to Joint Boards for South Lanarkshire Council Councillors holding Convenor roles: Recharge to Lanarkshire Valuation Joint Board in 2024/2025 - £347 (2023/2024 - £971) 112
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45 Trade Union Facility Time In addition to the regulation governing Senior Employees and Councillors, the Trade Union (Facility Time Publication Requirements) Regulations 2017, which apply from 1 April 2017, require public sector employers to collect and publish a range of information on trade union facility time in respect of their employees who are Trade Union Representatives. The figures below cover the period 1 April 2024 to 31 March 2025 and include employees of South Lanarkshire Council, South Lanarkshire Leisure and Culture, SEEMIS and Lanarkshire Valuation Joint Board. Relevant Trade Union Officials Number of employees who were relevant union officials during the relevant period 177 FTE Employee Number 151.17 Percentage of Time Spent on Facility Time % Time Number of Representatives 0% 45 1% - 50% 124 51% - 99% 3 100% 5 113
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46 Percentage of Pay Bill Spent on Facility Time Total cost of facility time £640,359 Total pay bill £721,919,907 Percentage of the total pay bill spent on facility time 0.08% Paid Trade Union Activities Time spent on paid Trade Union activities as a percentage of total paid facility time hours 7.08% Councillor Joe Fagan Leader of the Council Paul Manning Chief Executive 114
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47 Comprehensive Income and Expenditure Statement The Comprehensive Income and Expenditure Statement shows the accounting cost in the year of providing services in accordance with the CIPFA Accounting Code of Practice, rather than the amount to be funded from taxation. The council raises taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Expenditure and Funding Analysis and Movement in Reserves Statements. 2023/24 2024/25 Gross Expenditure £000 Gross Income £000 Net Expenditure / (Income) £000 Gross Expenditure £000 Gross Income £000 Net Expenditure / (Income) £000 199,435 39,128 160,307 Community and Enterprise Resources 213,111 57,036 156,075 490,181 53,097 437,084 Education Resources 513,697 20,327 493,370 122,327 72,466 49,860 Finance and Corporate Resources 111,383 66,110 45,273 Housing and Technical Resources 115,202 105,649 9,553 - Housing Revenue Account 113,953 114,283 (330) 81,368 55,198 26,170 - Housing Other 75,047 52,904 22,143 505,694 266,428 239,266 Social Work Resources 509,487 265,185 244,302 2,052 - 2,052 Joint Board 1,864 - 1,864 2,377 12,003 (9,626) Corporate Items 987 509 478 117 - 117 Corporate and Democratic Core (HRA) 105 - 105 1,518,753 603,969 914,784 Net Cost of Services 1,539,634 576,354 963,280 650 - 650 Other Operating Expenditure (Note 9) (7,268) (7,268) 36,670 16,127 20,542 Financing and Investment (Income) and Expenditure (Note 10) 72,597 12,287 60,310 - 913,708 (913,708) Taxation and Non-Specific Grant Income (Note 11) 989,521 (989,521) 1,556,073 1,533,804 22,269 (Surplus) / Deficit on Provision of Services 1,604,963 1,578,162 26,801 29,649 (Surplus) / Deficit on Revaluation of Fixed Assets (209,253) 87,095 Remeasurement of Pension Liability / (Asset) (53,043) 116,744 Other Comprehensive (Income) and Expenditure (262,296) 139,013 Total Comprehensive (Income) and Expenditure (235,495) . 115
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48 Balance Sheet The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the council. The net assets of the council (assets less liabilities) are matched by the reserves held by the council. Reserves are reported in two categories. ■ The first category of reserves are usable reserves, that is those reserves that the council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the Capital Receipts Reserve that may only be used to fund capital expenditure or repay debt). ■ The second category of reserves is those that the council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the Revaluation Reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis under regulations. 31 March 2024 £000 Note 31 March 2025 £000 3,734,534 Property, Plant and Equipment 20 4,113,384 3,853 Heritage Assets 21 3,853 138 Intangible Assets 21 10,059 1,793 Long Term Debtors 1,910 - Other Long-Term Assets (Pension) 30 - 3,740,318 Non-Current Assets 4,129,206 - Short Term Investments - 4,814 Inventories 4,179 102,248 Short Term Debtors 23 100,106 168 Assets Held for Sale 21 168 12,241 Cash and Cash Equivalents (see cash flow notes) 25,031 119,471 Current Assets 129,484 (63,096) Short Term Borrowing 33 (179,224) (203,943) Short Term Creditors 25 (235,287) (7,390) Other Short-Term Liabilities (PPP / Finance Leases) 28 (17,142) (1,676) Provisions 26 (608) (1,331) Receipts in Advance 27 (3,476) (277,436) Current Liabilities (435,737) (536) Long Term Provisions 26 - (980,762) Long Term Borrowing 33 (860,609) (164,646) Other Long-Term Liabilities (PPP / Finance Lease) 28 (306,113) (113,666) Other Long-Term Liabilities (Pension) 30 (97,992) (1,259,610) Long Term Liabilities (1,264,714) 2,322,744 Net Assets 2,558,239 133,689 Usable Reserves 147,568 2,189,055 Unusable Reserves 2,410,671 2,322,744 Total Reserves 2,558,239 The notes on pages 53 to 106 form part of the financial statements. The audited accounts were authorised for issue on 25 June 2025. Jackie Taylor Executive Director (Finance and Corporate Resources) 116
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49 Movement in Reserves Statement This statement shows the movement in the year on the different reserves held by the council, analysed into ‘usable reserves’ (those that can be applied to fund expenditure or reduce local taxation) and other reserves. The Surplus or (Deficit) on the Provision of Services line shows the true economic cost of providing the council’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance and the Housing Revenue Account for council tax setting and dwellings rent setting purposes. The Net Increase / Decrease before Transfers to Earmarked Reserves line shows the statutory General Fund Balance and Housing Revenue Account Balance before any discretionary transfers to or from earmarked reserves undertaken by the council. Revenue Statutory Fund Revenue Statutory Fund General Fund Balance £000 Housing Revenue Account £000 Repairs and Renewals Fund £000 Insurance Fund £000 Capital Statutory Fund £000 Capital Receipts Reserve £000 Total Usable Reserves £000 (Note 13) Unusable Reserves £000 Total Council Reserves £000 Balance at 1 April 2024 109,772 13,221 5,347 195 3,975 1,179 133,689 2,189,055 2,322,744 Movement in reserves during 2024/25 Total Comprehensive Expenditure and Income (37,682) 10,881 - - - - (26,901) 262,296 235,495 Adjustments to usable reserves permitted by accounting standards (note 8) 15,113 17,810 - - - - 32,923 (32,923) - Adjustments between accounting basis and funding basis under regulations (note 8) 33,196 (31,672) - - - 6,233 7,757 (7,757) - Net Increase / (Decrease) before Transfers to Reserves 10,627 (2,981) - - - 6,233 13,879 221,616 235,495 Transfers to/ (from) Reserves (1,402) 200 (224) 1,617 (191) - - - - Increase / (Decrease) in Year 9,225 (2,781) (224) 1,617 (191) 6,233 13,879 221,616 235,495 Balance at 31 March 2025 carried forward 118,997 10,440 5,123 1,812 3,784 7,412 147,568 2,410,671 2,558,239 117
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50 Revenue Statutory Fund Revenue Statutory Fund General Fund Balance £000 Housing Revenue Account £000 Repairs and Renewals Fund £000 Insurance Fund £000 Capital Statutory Fund £000 Capital Receipts Reserve £000 Total Usable Reserves £000 (Note 13) Unusable Reserves £000 Total Council Reserves £000 Balance at 1 April 2023 150,283 12,861 7,610 1,411 4,776 - 176,941 2,284,815 2,461,756 Movement in reserves during 2023/24 Total Comprehensive Expenditure and Income (30,602) 8,333 - - - - (22,269) (116,744) (139,013) Adjustments to usable reserves permitted by accounting standards (note 8) 13,723 17,344 - - - - 31,067 (31,067) - Adjustments between accounting basis and funding basis under regulations (note 8) (28,569) (25,318) - - - 1,838 (52,049) 52,049 - Net Increase / (Decrease) before Transfers to Reserves (45,448) 360 - - - 1,838 (43,252) (95,761) (139,013) Transfers to/ (from) Reserves 4,939 - (2,263) (1,216) (801) (660) - - - Increase / (Decrease) in Year (40,511) 360 (2,263) (1,216) (801) 1,178 (43,252) (95,761) (139,013) Balance at 31 March 2024 carried forward 109,772 13,221 5,347 195 3,975 1,178 133,688 2,189,055 2,322,743 118
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51 Cash Flow Statement The Cash Flow Statement shows the changes in cash and cash equivalents of the council during the reporting period. The statement shows how the council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the council are funded by way of taxation and grant income or from the recipients of services provided by the council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (that is borrowing) to the council. Further analysis of movements is provided in the cash flow notes following the statement. 2023/24 £000 2024/25 £000 (22,269) Net surplus / (deficit) on the provision of services (26,801) 27,804 Adjust net surplus / deficit on the provision of services for non-cash movements 175,115 (66,944) Adjust for items included in the net surplus / deficit on the provision of services that are investing and financing activities (58,626) (61,409) Net cash flows from Operating Activities 89,688 16,627 Investing Activities (56,553) (8,868) Financing Activities (20,345) (53,650) Net increase / (decrease) in cash and cash equivalents 12,790 65,890 Cash and cash equivalents at the beginning of the reporting period 12,241 12,241 Cash and cash equivalents at the end of the reporting period 25,031 Cash Flow Statement Note – Non-Cash Movements The balance of non-cash movements is made up of the following elements: 31 March 2024 £000 31 March 2025 £000 103,289 Depreciation, impairment and amortisation of assets 101,241 (22,469) Movement in creditors 30,494 (20,984) Movement in debtors 4,869 (497) Movement in inventories 635 (35,989) Movement in pension liability 37,369 4,454 Carrying amount of non-current assets and non-current assets held for sale, sold or derecognised 507 - Other non-cash items charged to the net surplus / deficit on the provision of services - 27,804 Net cash flows from the provision of services for non-cash movements 175,115 Cash Flow Statement Note – Operating Activities – Items Included in Net Surplus / (Deficit) on the Provision of Services That are Investing and Financing Activities The cash flows for these activities include the following items: 2023/24 £000 2024/25 £000 (63,140) Capital grants and contributions (50,581) (3,804) Proceeds from the sale of property, plant and equipment, investment property and intangible assets (7,775) (66,944) Net cash flows from items included in the net surplus / (deficit) on the provision of services that are investing and financing activities (58,626) Cash Flow Statement Note – Investing Activities 2023/24 £000 2024/25 £000 (120,334) Purchase of property, plant and equipment and intangible assets (113,472) (93,000) Purchase of short-term investments (40,000) 3,804 Proceeds from the sale of property, plant and equipment and intangible assets 7,775 163,000 Proceeds from short term investments 40,000 63,157 Other receipts from investing activities 49,144 16,627 Net cash flows from investing activities (56,553) 119
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52 Cash Flow Statement Note – Financing Activities 2023/24 £000 2024/25 £000 20,000 Cash receipts of short term and long term borrowing 145,000 (7,098) Cash payments for the reduction of the outstanding liabilities relating to finance leases for PPP contracts (16,575) (21,770) Repayments of short term and long term borrowing (148,770) (8,868) Net cash flows from financing activities (20.345) Cash Flow Statement Note – Cash and Cash Equivalents 31 March 2024 £000 31 March 2024 £000 104 Cash held by officers 101 (1,070) Bank current accounts 9,024 13,207 Short term deposits 15,906 12,241 Total cash and cash equivalents 25,031 The credit figures shown against Bank Accounts in 2025 relate to balances in the financial ledger. This is due to timing differences in posting transactions in the ledger. Actual balances held at bank are not in an overdraft position. 120
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53 Notes to the Financial Statements Note 1 Accounting Standards Issued but Not Adopted The Accounting Code of Practice requires the Council to disclose information relating to the impact of an accounting change that is required by a new standard that has been issued but not yet adopted. At the balance sheet date, the following new standards and amendments to existing standards have been published but not yet adopted by The Code: • Classification of Liabilities as Current or Non-current (Amendments to IAS 1) issued in January 2020. The amendments: o specify that an entity’s right to defer settlement must exist at the end of the reporting period; o clarify that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement; o clarify how lending conditions affect classification; and o clarify requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. This amendment is not expected to have a significant impact on the financial statements. • Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) issued in September 2022. The amendments to IFRS 16 add subsequent measurement requirements for sale and leaseback transactions. This amendment is not expected to have a significant impact on the financial statements. • Non-current Liabilities with Covenants (Amendments to IAS 1) issued in October 2022. The amendments improved the information an entity provides when its right to defer settlement of a liability for at least 12 months is subject to compliance with covenants. This amendment is not expected to have a significant impact on the financial statements. • International Tax Reform: Pillar Two Model Rules (Amendments to IAS 12) issued in May 2023. Pillar Two applies to multinational groups with a minimum level of turnover. The amendments introduced: o a temporary exception to the requirements to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes; and o targeted disclosure requirements for affected entities. These amendments to IAS 12 are not likely to significantly affect the Council’s transactions. • Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) issued in May 2023. The amendments require an entity to provide additional disclosures about its supplier finance arrangements. The IASB developed the new requirements to provide users of financial statements with information to enable them to: o assess how supplier finance arrangements affect an entity’s liabilities and cash flows; and o understand the effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it. The above amendment is not expected to have a material impact on the financial statements. Note 2 Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty The Financial Statements contain estimated figures that are based on assumptions made by the council about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the council’s Balance Sheet at 31 March 2025 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows: Item Uncertainties Effect if actual results differ from assumptions Pensions Liability – Actuarial Assumptions Estimation of the liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. A firm of consulting actuaries is engaged by Strathclyde Pension Fund, to provide the council with expert advice about the assumptions to be applied. Following decisions in relation to Age Discrimination and Guaranteed Minimum Pensions, the Actuary The effects on the pension liability of changes in individual assumptions can be measured. For instance, a 0.1% decrease in the discount rate assumption would result in an increase in the pension liability of £32.182m. However, the assumptions interact in complex ways. During 2024/2025, the council’s actuaries advised that the net pension liability had increased by £53.389m as a result of the return on assets, and decreased by £340.973m attributable to 121
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54 Item Uncertainties Effect if actual results differ from assumptions has included the estimated impact of these in the reported pension liability figure. However, the actual impact is influenced by a number of factors and therefore the actual impact could vary from the impact currently estimated and included in the liability. changes in demographic and financial assumptions and estimates being corrected through experience. For 2024/2025, the liability is far outweighed by the asset, however due to the pension asset in the balance sheet being capped under IFRIC 14, these figures do not tie to the difference between the 23/24 pension liability and the 24/25 pension asset as stated in the balance sheet. Property, Plant and Equipment – Valuation The Council’s assets are valued on a rolling programme over a maximum of 5 years. The valuation assumptions are ascertained by the professional valuers used by the Council. Given the current financial climate and the changes in the economy experienced across the past 5 years, the Council’s valuers have considered the potential uncertainty regarding the valuation of assets. Their work has concluded that the valuations are not subject to ‘material valuation uncertainty’ due to the current economic climate as at the valuation date. If the actual results differ from the assumptions, the value of the asset could be affected. The value of the assets subject to revaluation over the rolling programme is £3,689.385m. During 2024/2025 the assets that were revalued are now held on the Balance Sheet at a total value of £2,442.754m. This includes Council Dwellings, which are revalued on an annual basis. The value of assets not revalued in 2024/2025 has been reviewed and the potential impact on valuations is within margins of 10-15% which are considered to be acceptable by RICS. Therefore, the assets not included in this year’s programme for revaluation are not materially misstated. The impact of a 1% change in the valuations carried out in 2024/2025 would change the value of the assets held on the Balance Sheet by £24.426m, resulting in an increase or decrease to the Revaluation Reserve or change to Net Cost of Services. Any change would also impact on depreciation charged to the Net Cost of Services. Due to statutory mitigation, there would be no impact on the council’s usable reserves. Property, Plant and Equipment – Useful Life Assets are depreciated over useful lives that are dependent on assumptions about the level of repairs and maintenance that will be incurred in relation to individual assets. The Council has a programme of repairs and maintenance on its assets. Any decision to reduce spend in this area could affect the useful lives of assets. If the useful life of assets is reduced, depreciation increases and the carrying amount of the assets falls, it is estimated that the annual depreciation charge would increase and the carrying value would fall by £9.755m for each year that useful lives were reduced. This list does not include assets and liabilities that are carried at fair value based on a recently observed market price. Note 3 Material Items of Expenditure and Income Where material items of expenditure and income are not disclosed on the face of the Comprehensive Income and Expenditure Statement, or contained within other notes, the Code requires disclosure of the nature and amounts of these items. Material items of expenditure and income are detailed below: Item Nature Amount £000 Housing Benefit / Discretionary Housing Payment Paid Benefit paid to support customers on low income with Housing rent costs 62,086 Housing Benefit / Discretionary Housing Benefit Received Benefit received to support customers on low income with Housing rent costs 57,053 122
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55 Note 4 Expenditure and Funding Analysis The objective of the Expenditure and Funding Analysis is to demonstrate to council tax and rent payers how the funding available to the council (i.e. government grants, rents, fees and charges, council tax and business rates) for the year has been used in providing services in comparison with those resources consumed or earned by the council in accordance with the CIPFA Accounting Code of Practice. The Expenditure and Funding Analysis also shows how this expenditure is allocated for decision making purposes between the council’s services. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement on page 47. The segmental analysis in the Expenditure and Funding Analysis reflects the council's management structure, as reported to the relevant Committees during the financial year. 2023/24 2024/25 Net Expenditure Chargeable To the General Fund And HRA Balance £000 (Note 4) Adjustments between the Funding and Accounting Basis £000 Net Expenditure in the Comprehensive Income and Expenditure Statement £000 Net Expenditure Chargeable To the General Fund And HRA Balance £000 (Note 4) Adjustments between the Funding and Accounting Basis £000 Net Expenditure in the Comprehensive Income and Expenditure Statement £000 137,524 22,783 160,307 Community and Enterprise Resources 128,701 27,374 156,075 439,940 (2,856) 437,084 Education Resources 482,703 10,667 493,370 48,004 1,856 49,860 Finance and Corporate Resources 40,136 5,137 45,273 Housing and Technical Resources (360) 9,913 9,553 - Housing Revenue Account 2,981 (3,311) (330) 16,432 9,738 26,170 - Housing Other 15,972 6,171 22,143 237,204 2,062 239,266 Social Work Resources 235,309 8,993 244,302 2,052 - 2,052 Joint Board 1,864 - 1,864 (14,193) 4,567 (9,626) Corporate Items (8,870) 9,348 478 - 117 117 Corporate and Democratic Core (HRA) - 105 105 - - - Non-Distributed Costs – Non-Operational Assets (HRA) - - - 866,603 48,180 914,784 Net Cost of Services 898,796 64,484 963,280 (821,514) (71,002) (892,516) Other (Income) and Expenditure (906,444) (30,035) (936,479) 45,089 (22,822) 22,269 (Surplus) or Deficit (7,648) 34,449 26,801 General Fund HRA Total General Fund and HRA General Fund HRA Total General Fund and HRA (150,283) (12,861) (163,144) Opening General Fund and HRA Balance (109,772) (13,221) (122,993) 45,449 (360) 45,089 Less/plus (Surplus) or Deficit on General Fund (10,627) 2,981 (7,646) (4,938) - (4,938) Transfers to/from Other Reserves 1,402 (200) 1,202 (109,772) (13,221) (122,993) Closing General Fund and HRA Balance (118,997) (10,440) (129,437) 123
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56 Adjustments from General Fund to arrive at the Comprehensive Income and Expenditure Statement 2024/25 Adjustments for Capital Purposes (Note a) £000 Net change for the Pensions Adjustments (Note b) £000 Other Differences (Note c) £000 Total Adjustments between Funding and Accounting Basis £000 Community and Enterprise Resources 21,085 6,437 (148) 27,374 Education Resources 28,423 11,012 (28,768) 10,667 Finance and Corporate Resources 1,876 3,174 87 5,137 Housing and Technical Resources - Housing Revenue Account 6,219 1,061 (10,591) (3,311) - Housing Other 928 3,157 2,086 6,171 Social Work Resources 4,859 6,243 (2,109) 8,993 Joint Board - - - - Corporate Items - - 9,348 9,348 Corporate and Democratic Core (HRA) - - 105 105 Non-Distributed Costs – Non-Operational Assets (HRA) - - - - Net Cost of Services 63,390 31,084 (29,990) 64,484 Other Income and Expenditure from the Expenditure and Funding Analysis (62,239) 6,285 25,919 (30,035) Difference between General Fund surplus or deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services 1,151 37,369 (4,071) 34,449 2023/24 Adjustments for Capital Purposes (Note a) £000 Net change for the Pensions Adjustments (Note b) £000 Other Differences (Note c) £000 Total Adjustments between Funding and Accounting Basis £000 Community and Enterprise Resources 23,665 (766) (116) 22,783 Education Resources 26,136 (1,037) (27,955) (2,856) Finance and Corporate Resources 2,078 (348) 126 1,856 Housing and Technical Resources - Housing Revenue Account 18,217 (124) (8,180) 9,913 - Housing Other 9,918 (376) 196 9,738 Social Work Resources 3,224 (981) (181) 2,062 Joint Board - - - - Corporate Items - (45) 4,612 4,567 Corporate and Democratic Core (HRA) - - 117 117 Non-Distributed Costs – Non-Operational Assets (HRA) - - - - Net Cost of Services 83,238 (3,677) (31,381) 48,180 Other Income and Expenditure from the Expenditure and Funding Analysis (67,489) (32,312) 28,799 (71,002) Difference between General Fund surplus or deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services 15,749 (35,989) (2,582) (22,822) 124
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57 Note a – Adjustments for Capital Purposes This column adds in depreciation and impairment and revaluation gains and losses in the services line, and for: ■ Other Operating Expenditure – adjusts for capital disposals with a transfer of income on disposal of assets and the amounts written off for those assets. ■ Financing and Investment Income and Expenditure – the statutory charges for capital financing and other contributions are deducted from other income and expenditure as these are not chargeable under generally accepted accounting practices. ■ Taxation and Non-Specific Grant Income and Expenditure – capital grants are adjusted for income not chargeable under generally accepted accounting practices. Revenue grants are adjusted from those that are receivable in the year, to those that are receivable without conditions or for which conditions were satisfied throughout the year. The Taxation and Non-Specific Grant Income and Expenditure line is credited with capital grants receivable in the year without conditions or for which conditions were satisfied in the year. Note b – Net Change for the Pensions Adjustment Net change for the removal of pension contributions and the addition of IAS19 Employee Benefits pension related expenditure and income: ■ For Services this represents the removal of the employer pension contributions made by the council as allowed by statute and the replacement with current service costs and past service costs. ■ For Financing and Investment Income and Expenditure – the net interest on the defined benefit liability is charged to the Comprehensive Income and Expenditure Statement. Note c – Other Differences Other differences between amounts debited/credited to the Comprehensive Income and Expenditure Statement and amounts payable /receivable to be recognised under statute: ■ For Services, this represents the accrual made for the cost of holiday leave entitlements earned by employees but not taken before the year end which employees can carry into the next financial year. These require to be included in the Net Cost of Services under generally accepted accounting practices, however, are not chargeable to the General Fund. ■ For Financing and Investment Income and Expenditure the other differences column recognises adjustments to the General Fund for the timing differences for premiums and discounts. Note 5 Reconciliation of Adjustments Between Funding and Accounting Basis Shown in the Expenditure and Funding Analysis (EFA) to Those Shown In the Movement in Reserves Statement (MIRS) 2023/24 2024/25 £000 £000 (22,822) Adjustments between Funding and Accounting Basis as per EFA 34,449 3,804 Transfer of non-current asset sale proceeds from revenue to Capital Receipts Reserve (Note 8) 7,774 (1,966) Use of Capital Receipts Reserve to finance capital expenditure (Note 8) (1,542) (20,984) Adjustments between Funding and Accounting Basis as per MIRS 40,681 125
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58 Note 6 Expenditure and Income Analysed by Nature The council’s expenditure and income are analysed as follows: Community and Enterprise £000 Education £000 Finance and Corporate £000 Housing Revenue Account £000 Housing and Technical £000 Social Work £000 Joint Boards £000 Corporate Items £000 Other Non- Resource Lines £000 2024/25 Total £000 2023/24 Total £000 Expenditure Employee Benefits Expenses 101,716 361,414 36,523 9,402 47,345 115,655 - 95 - 672,150 655,105 Other Services Expenditure 90,256 123,860 72,984 64,821 26,278 388,973 1,864 892 105 770,033 759,565 Support Services Recharges - - - - - - - - - - - Depreciation, Amortisation, Impairment 21,139 28,423 1,876 39,730 1,424 4,859 - - - 97,451 103,138 Interest Payment - - - - - - - - 68,065 68,065 69,598 Pension Net Interest Expense - - - - - - - - 6,285 6,285 (32,312) Impairment on Financial Instruments - - - - - - - - (1,752) (1,752) (531) Loss on the Disposal of Assets - - - - - - - - (7,268) (7,268) 650 Total Expenditure 213,111 513,697 111,383 113,953 75,047 509,487 1,864 987 65,435 1,604,964 1,555,213 Income Fees and Charges and Other Service Income 40,190 5,405 7,747 114,283 45,773 206,633 - 509 - 420,540 413,494 Interest and Investment Income - - - - - - - - 13,188 13,188 16,069 Impairment on Financial Instruments - - - - - - - - (899) (899) 58 Gain on the Disposal of Assets - - - - - - - - - - - Income from Council Tax - - - - - - - - 161,060 161,060 159,053 Government Grants and Contributions 16,846 14,922 58,363 - 7,131 58,552 - - 828,460 984,274 944,270 Total Income 57,036 20,327 66,110 114,283 52,904 265,185 - 509 1,001,809 1,578,163 1,533,804 (Surplus) or Deficit on the Provision of Services 156,075 493,370 45,273 (330) 22,143 244,302 1,864 478 (936,374) 26,801 22,269 126
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59 Note 7 Revenue from Contracts with Service Recipients Amounts included in the Comprehensive Income and Expenditure Statement for contracts with service recipients. 2023/24 £000 2024/25 £000 44,754 Revenue from contracts with service recipients 44,925 - Impairment of receivables or contract assets - 44,754 Total included in Comprehensive Income and Expenditure Statement 44,925 Amounts included in Balance Sheet for contracts with service recipients. 2023/24 £000 2024/25 £000 - Receivables which are included in debtors (note 23) - - Contract Assets - - Contract Liabilities - - Total Included in Net Assets - Specific changes in the contract assets and the contract liabilities balances during the period are as follows: 2023/24 2023/24 2024/25 2024/25 Contract Asset £000 Contract Liability £000 Contract Asset £000 Contract Liability £000 - - Contract assets and liabilities at the beginning of the year - - - - Increases / decreases due to cash received (paid) - - - - Transfers from contract assets / (liabilities) recognised at the beginning of the period to receivables (payables) - - - - Changes as a result of changes in the measure of progress - - - - Contract assets and liabilities at the end of the year - - Note 8 Adjustments Permitted Under Accounting Standards and Between Accounting Basis and Funding Basis Under Regulations This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the council in the year in accordance with proper accounting practice to arrive at the resources that are specified by statutory provisions as being available to the council to meet future capital and revenue expenditure. The following sets out a description of the reserves that the adjustments are made against. General Fund The General Fund is the statutory fund into which all the receipts of the council are required to be paid and out of which all liabilities of the council are to be met, except to the extent that statutory rules might provide otherwise. These rules can also specify the financial year in which liabilities and payments should impact on the General Fund, which is not necessarily in accordance with proper accounting practice. The General Fund balance therefore summarises the resources that the council is statutorily empowered to spend on its services or on capital investment (or the deficit of resources that the council is required to recover) at the end of the financial year. Housing Revenue Account The Housing Revenue Account balance reflects the statutory obligation to maintain a revenue account for local authority housing in accordance with the Local Government and Housing (Scotland) Act 1987. It contains the balance of income and expenditure as defined by the 1987 Act that is available to fund future expenditure in connection with the council’s landlord function. Repairs and Renewals Fund The Repairs and Renewals Fund comprises a combination of balances brought forward from previous years adjusted for any utilisation of funds and contributions to the Fund in year. The funds will be used to deal with repairing or renewing council assets. 127
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60 Insurance Fund The Insurance Fund is held as a provision against unpaid claims. Council Services contribute to the Fund which meets the cost of property damage, public liability, employee liability, vehicle fleet and other claims. The council holds insurance cover to meet any large claims, the premium for which is charged to the Fund. Actuarial reviews are undertaken on a regular basis. The last full review took place during 2024/25. Capital Receipts Reserve The Capital Receipts Reserve holds the proceeds from the disposal of land or other assets which are restricted by statute from being used other than to fund new capital expenditure or to be set aside to finance historical capital expenditure. The balance on the reserve shows the resources that have yet to be applied for these purposes at the year end. 128
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61 Usable Reserves 2024/25 General Fund Balance £000 Housing Revenue Account £000 Repairs And Renewals Fund £000 Insurance Fund £000 Capital Statutory Funds £000 Capital Receipts Reserve £000 Total £000 Adjustments to Usable Reserves Permitted by Accounting Standards Adjustment for the Revaluation Element of Depreciation 15,113 17,810 - - - - 32,923 Total Adjustments to Usable Reserves Permitted by Accounting Standards 15,113 17,810 - - - - 32,923 Statutory Adjustments (Between Accounting and Funding Basis) Adjustments to Revenue Resources Amounts by which income and expenditure included in the Comprehensive Income and Expenditure Statement are different from revenue for the year calculated in accordance with statutory requirements: Pensions Costs transferred to (or from) the Pensions Reserve 36,094 1,275 - - - - 37,369 Financial Instruments (transferred to the Financial Instruments Adjustment Account) (271) (88) - - - - (359) Holiday Pay (transferred to (or from) the Accumulated Absences Reserve) 749 (20) - - - - 729 Reversal of entries included in the Surplus or Deficit on the Provision of Services in relation to capital expenditure (these items are charged to the Capital Adjustment Account) 39,034 22,224 - - - - 61,258 Total Adjustments to Revenue Resources 75,606 23,391 - - - - 98,997 Adjustments between Revenue and Capital Resources Transfer of non-current asset sale proceeds from revenue to Capital Receipts Reserve (7,572) (202) - - - 7,774 - Statutory Provision for the repayment of debt (transfer from Capital Adjustment Account) (3,730) (5) - - - - (3,735) Capital expenditure financed from revenue balances (transfer to Capital Adjustment Account) (1,605) (33,506) - - - - (35,111) Total Adjustments between Revenue and Capital Resources (12,907) (33,713) - - - 7,774 (38,846) Adjustments to Capital Resources Use of the Capital Receipts Reserve to finance capital expenditure - - - - - (1,542) (1,542) Application of capital grants to finance capital expenditure (29,501) (21,350) - - - - (50,851) Total Adjustments to Capital Resources (29,501) (21,350) - - - (1,542) (52,393) Total Statutory Adjustments (Between Accounting and Funding Basis) 33,198 (31,672) - - - 6,232 7,758 Total Adjustments to Usable Reserves Permitted by Accounting Standards 15,113 17,810 - - - - 32,923 Total Statutory Adjustments (Between Accounting and Funding Basis) 33,198 (31,672) - - - 6,232 7.758 Total Comprehensive Expenditure and Income (37,682) 10,881 - - - - (26,801) Net Increase / (Decrease) before transfers to / (from) Reserves 10,629 (2,981) - - - 6,232 13,880 Transfers to / (from) Reserves (1,402) 200 (224) 1,617 (191) - - Increase / (Decrease) in Year 9,227 (2,781) (224) 1,617 (191) 6,232 13,880 129
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62 Usable Reserves 2023/24 General Fund Balance £000 Housing Revenue Account £000 Repairs And Renewals Fund £000 Insurance Fund £000 Capital Statutory Funds £000 Capital Receipts Reserve £000 Total £000 Adjustments to Usable Reserves Permitted by Accounting Standards Adjustment for the Revaluation Element of Depreciation 13,723 17,344 - - - - 31,067 Total Adjustments to Usable Reserves Permitted by Accounting Standards 13,723 17,344 - - - - 31,067 Statutory Adjustments (Between Accounting and Funding Basis) Adjustments to Revenue Resources Amounts by which income and expenditure included in the Comprehensive Income and Expenditure Statement are different from revenue for the year calculated in accordance with statutory requirements: Pensions Costs transferred to (or from) the Pensions Reserve (34,770) (1,219) - - - - (35,989) Financial Instruments (transferred to the Financial Instruments Adjustment Account) (270) (90) - - - - (360) Holiday Pay (transferred to (or from) the Accumulated Absences Reserve) 452 (14) - - - - 438 Reversal of entries included in the Surplus or Deficit on the Provision of Services in relation to capital expenditure (these items are charged to the Capital Adjustment Account) 49,692 23,713 - - - - 73,405 Total Adjustments to Revenue Resources 15,104 22,390 - - - - 37,494 Adjustments between Revenue and Capital Resources Transfer of non-current asset sale proceeds from revenue to Capital Receipts Reserve (1,838) (1,966) - - - 3,804 - Statutory Provision for the repayment of debt (transfer from Capital Adjustment Account) (2,660) - - - - - (2,660) Capital expenditure financed from revenue balances (transfer to Capital Adjustment Account) (1,730) (20,046) - - - - (21,776) Total Adjustments between Revenue and Capital Resources (6,228) (22,012) - - - 3,804 (24,436) Adjustments to Capital Resources Use of the Capital Receipts Reserve to finance capital expenditure - - - - - (1,966) (1,966) Application of capital grants to finance capital expenditure (37,445) (25,695) - - - - (63,140) Total Adjustments to Capital Resources (37,445) (25,695) - - - (1,966) (65,106) Total Statutory Adjustments (Between Accounting and Funding Basis) (28,569) (25,317) - - - 1,838 (52,048) Total Adjustments to Usable Reserves Permitted by Accounting Standards 13,723 17,344 - - - - 31,067 Total Statutory Adjustments (Between Accounting and Funding Basis) (28,569) (25,318) - - - 1,838 (52,049) Total Comprehensive Expenditure and Income (30,602) 8,333 - - - - (22,269) Net Increase / (Decrease) before transfers to / (from) Reserves (45,448) 360 - - - 1,838 (43,252) Transfers to / (from) Reserves 4,939 - (2,263) (1,216) (801) (660) - Increase / (Decrease) in Year (40,511) 360 (2,263) (1,216) (801) 1,178 (43,252) 130
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63 Note 9 Comprehensive Income and Expenditure Statement – Other Operating Expenditure 2023/24 £000 2024/25 £000 650 (Gains) / losses on the disposal of non-current assets (7,268) 650 Total (7,268) Note 10 Comprehensive Income and Expenditure Statement – Financing and Investment Income and Expenditure 2023/24 £000 2024/25 £000 69,513 Interest payable and similar charges 68,065 (32,312) Pensions interest cost and expected return on pensions assets 6,285 (16,069) Interest receivable and similar income (13,186) (590) Impairment on Financial Instruments (853) 20,542 Total 60,311 Note 11 Comprehensive Income and Expenditure Statement – Taxation and Non-Specific Grant Income 2023/24 £000 2024/25 £000 (159,053) Council Tax income (161,060) (341,536) National Non-Domestic Rates (411,592) (349,979) Non-ringfenced Government grants (366,018) (63,140) Capital grants and contributions (50,851) (913,708) Total (989,521) 131
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64 Note 12 Movements in Usable Reserves This note sets out the amounts set aside from the General Fund and HRA balances in earmarked reserves to provide financing for future expenditure plans and the amounts posted back from earmarked reserves to meet General Fund and HRA expenditure in 2024/2025. 2023/24 Opening Balance 1 April 2023 £000 Transfers Out 2023/24 £000 Transfers In 2023/24 £000 2023/24 Closing Balance 31 March 2024 £000 2024/25 Opening Balance 1 April 2024 £000 Transfers Out 2024/25 £000 Transfers In 2024/25 £000 2024/25 Closing Balance 31 March 2025 £000 Future Budget Strategies – allocated to specific years 92,961 (42,786) 18,922 69,097 69,097 (33,798) 49,025 84,324 Investments (Multi Year) 3,899 (2,156) 3,293 5,036 5,036 (2,782) 202 2,456 Early Years (Multi-year) 11,517 (3,806) - 7,711 7,711 (5,350) - 2,361 Pupil Equity Fund (Specific funding) 905 (905) 323 323 323 (323) 631 631 Scottish Welfare Fund 145 (145) - - - - 1,153 1,153 Multi Year Projects 3,507 (8) - 3,499 3,499 (643) - 2,856 Schools (Multi-year) 1,355 (264) - 1,091 1,091 (1,091) - - Scheme of Assistance 742 - - 742 742 (255) - 487 Community and Enterprise Resources including Public Health and Local Plan 1,081 (69) 290 1,302 1,302 - 673 1,975 Temporary Homelessness / Community Safety (Specific funding) 1,575 - - 1,575 1,575 - 355 1,930 New Initiatives (Multi-year) 912 - - 912 912 - - 912 Sanitary Products Funding 339 (140) - 199 199 (64) 30 165 Counselling in Schools 1,256 (978) - 278 278 (278) - - Additional Support for Learning 1,189 (707) - 482 482 - - 482 Grants to Voluntary Organisations - Area Grants c/f 207 - - 207 207 - 106 313 Lanarkshire Valuation Joint Board - Scottish Government funding 118 - - 118 118 - - 118 Local Heat and Energy Efficient Strategies 75 - 25 100 100 - - 100 Other Funding (inc. LACER) 11,658 (9,338) - 2,320 2,320 (321) 40 2,039 Ukraine Resettlement - - 1,485 1,485 1,485 - 218 1,703 Balances Used during 2023/24 2,887 (2,887) - - - - - - Balances less than £0.100m 912 (716) 57 253 253 - - 253 Scotland Excel Contract - - - - - - 200 200 Office Accommodation - - - - - - 250 250 Hamilton Town Centre - - - - - - 898 898 Property Maintenance - - - - - - 350 350 Total Earmarked General Fund 137,240 (64,905) 24,395 96,730 96,730 (44,905) 54,131 105,956 Uncommitted General Fund Funding for Future Strategies - - - - - - - - Uncommitted General Fund 13,043 - - 13,043 13,043 - - 13,043 Total Uncommitted General Fund 13,043 - - 13,043 13,043 - - 13,043 Total General Fund 150,283 (64,905) 24,395 109,773 109,773 (45,905) 54,131 118,999 Repairs and Renewals Crematorium Sinking Fund and Shelter 241 (241) - - - - - - 132
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65 2023/24 Opening Balance 1 April 2023 £000 Transfers Out 2023/24 £000 Transfers In 2023/24 £000 2023/24 Closing Balance 31 March 2024 £000 2024/25 Opening Balance 1 April 2024 £000 Transfers Out 2024/25 £000 Transfers In 2024/25 £000 2024/25 Closing Balance 31 March 2025 £000 Fleet Sinking Fund 253 (253) 40 40 40 - 40 80 Waste 3,027 (36) - 2,991 2,991 (120) - 2,871 Repairs and Restorations (Various Projects) 3,685 (3,155) 1,363 1,893 1,893 (144) - 1,749 Winter Maintenance 404 - 18 422 422 - - 422 Total Repairs and Renewals 7,610 (3,685) 1,421 5,346 5,346 (264) 40 5,122 Capital Fund Capital Fund - - - - - Education Capital Items Replacement Fund 2,706 (671) - 2,035 2,035 - - 2,035 Adoptions 279 - - 279 279 - - 279 IT Development Fund / Digital Transformation 1,301 (70) 58 1,289 1,289 (1,000) - 289 Central Energy Efficiency Fund 490 (364) 246 372 372 (47) 856 1,181 Total Capital Fund 4,776 (1,105) 304 3,975 3,975 (1,047) 856 3,784 Total Usable Capital Receipts - (660) 1,838 1,178 1,178 (1,542) 7,775 7,411 Total Insurance Fund 1,411 (1,532) 316 195 195 (986) 2,603 1,812 Total Housing Revenue Account 12,861 - 360 13,221 13,221 (2,981) 200 10,440 Total Usable Reserves 176,941 (71,887) 28,634 133,688 133,688 (51,873) 65,753 147,568 133
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66 Note 13 Balance Sheet – Unusable Reserves Unusable Reserves are those that the council is not able to utilise to provide services. These reserves are kept to manage the accounting processes for non-current assets, financial instruments and retirement benefits and that do not represent usable resources for the council. The two reserves arising from the system of capital accounting are the Revaluation Reserve and the Capital Adjustment Account. The former represents the gains on revaluation of fixed assets not yet realised through sales and the latter relates to amounts set aside from capital resources to meet past expenditure. The reserve arising from accounting for financial instruments is the Financial Instruments Adjustment Account. This is a balancing account to allow for differences in statutory requirements and proper accounting practices for lending and borrowing by the council. The Pensions Reserve as limited by the assets ceiling cap under IFRIC 14, arises from IAS19 Accounting Disclosures for Retirement Benefits and recognises the council’s share of actuarial gains and losses in the Strathclyde Pension Fund and the change in the council’s share of the Pension Fund liability chargeable to the CIES. The Accumulated Absences Reserve arises from IAS19 accounting disclosures for Short Term Accumulated Benefits and recognises the council’s liability for compensated absences (annual leave) earned by staff but not taken in the year. The Statutory Arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the Reserve. 134
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67 Unusable Reserves 2024/25 Revaluation Reserve £000 Capital Adjustment Account £000 Financial Instruments Adjustment Account £000 Pension Reserve £000 Accumulating Compensated Absences Adjustment Account £000 Total £000 Opening Balance 1,333,554 996,027 (3,851) (113,666) (23,008) 2,189,056 Movement in Year 176,188 30,123 358 15,674 (728) 221,615 Closing Balance 1,509,742 1,026,150 (3,493) (97,992) (23,736) 2,410,671 Other Comprehensive Income and Expenditure 209,253 - - 53,043 - 262,296 Adjustments to Usable Reserves Permitted by Accounting Standards Difference Between Fair Value and Historic Cost Depreciation (32,923) 32,923 - - - - Adjustments Between Accounting Basis and Funding Basis Under Regulation Charges for Depreciation and Impairment of Non-Current Assets - (102,134) - - - (102,134) Revaluation Gains / Losses on Property, Plant and Equipment - 1,117 - - - 1,117 Amortisation of Intangible Assets - (224) - - - (224) Non-Current Assets Written Off on Disposal or Sale - (365) - - - (365) Accumulated Gains on Assets Sold or Scrapped (142) - - - - (142) Use of Capital Receipts Reserve to Finance New Capital Expenditure - 1,542 - - - 1,542 Capital Grants and Contributions - 50,851 - - - 50,851 Statutory Charge for the Repayment of Debt - 7,567 - - - 7,567 Statutory Provision for Financing of Capital Investment - 3,735 - - - 3,735 Capital Expenditure Charged Against the General Fund and HRA Balance - 35,111 - - - 35,111 Retrospective Benefit from applying revised Service Concession Guidance - - - - - - Transfer Between Revaluation Reserve and Capital Adjustment Account - - - - - - Premiums to be Charged Against the General Fund and HRA Balance - - 358 - - 358 Reversal of Items Relating to Retirement Benefits - - - (66,598) - (66,598) Employer’s Pension Contribution Payable in Year - - - 22,229 - 22,229 Amounts Accrued at the End of the Financial Year - - - - (728) (728) Total Movement in Year 176,188 30,123 358 15,674 (728) 221,615 135
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68 Unusable Reserves 2023/24 Revaluation Reserve £000 Capital Adjustment Account £000 Financial Instruments Adjustment Account £000 Pension Reserve £000 Accumulating Compensated Absences Adjustment Account £000 Total £000 Opening Balance 1,395,482 978,675 (4,211) (62,560) (22,570) 2,284,815 Movement in Year (61,928) 17,352 360 (51,106) (438) (95,761) Closing Balance 1,333,554 996,027 (3,851) (113,666) (23,008) 2,189,055 Other Comprehensive Income and Expenditure (29,648) - - (87,095) - (116,744) Adjustments to Usable Reserves Permitted by Accounting Standards Difference Between Fair Value and Historic Cost Depreciation (31,067) 31,067 - - - - Adjustments Between Accounting Basis and Funding Basis Under Regulation Charges for Depreciation and Impairment of Non-Current Assets - (96,521) - - - (96,521) Revaluation Gains / Losses on Property, Plant and Equipment - (6,703) - - - (6,703) Amortisation of Intangible Assets - (66) - - - (66) Non-Current Assets Written Off on Disposal or Sale - (3,241) - - - (3,241) Accumulated Gains on Assets Sold or Scrapped (1,213) - - - - (1,213) Use of Capital Receipts Reserve to Finance New Capital Expenditure - 1,966 - - - 1,966 Capital Grants and Contributions - 63,140 - - - 63,140 Statutory Charge for the Repayment of Debt - 3,273 - - - 3,273 Statutory Provision for Financing of Capital Investment - 2,660 - - - 2,660 Capital Expenditure Charged Against the General Fund and HRA Balance - 21,776 - - - 21,776 Retrospective Benefit from applying revised Service Concession Guidance - - - - - - Transfer Between Revaluation Reserve and Capital Adjustment Account - - - - - - Premiums to be Charged Against the General Fund and HRA Balance - - 360 - - 360 Reversal of Items Relating to Retirement Benefits - - - (33,620) - (33,620) Employer’s Pension Contribution Payable in Year - - - 69,609 - 69,609 Amounts Accrued at the End of the Financial Year - - - - (438) (438) Total Movement in Year (61,928) 17,352 360 (51,106) (438) (95,761) 136
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69 Note 14 Members Allowances The council paid the following amounts to Members of the council during the year: 2024/25 £ 2023/24 £ Salaries 1,246,071 1,169,378 Mileage Allowance 14,564 20,177 Expenses 3,782 3,083 Total 1,264,417 1,192,638 Note 15 External Audit Costs The council has incurred the following external audit costs: 2024/25 £000 2023/24 £000 Fee payable to Audit Scotland for external audit services 631 622 Total 631 622 The council incurred these costs in relation to the audit of the Annual Accounts, the certification of grant claims and a contribution towards Audit Scotland’s national work programme. Fees payable in respect of other services provided by the appointed auditor were nil (2023/2024: nil). Note 16 Related Parties The council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence or to be controlled or influenced by the council. Disclosure of these transactions allows readers to assess the extent to which the council might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the council. Scottish Government The Scottish Government has effective control over the general operations of the council – it is responsible for providing the statutory framework within which the council operates, provides the majority of its funding in the form of grants and prescribes the terms of many transactions that the council has with other parties (e.g. council tax bills, housing benefits). Grants received from government departments are set out in the subjective analysis in Note 6. Officers During 2024/2025, one senior officer of the Council (Executive Director of Finance and Corporate Resources) declared an interest in any RegenFX Youth Trust. No senior officer declared an interest of close family members in any organisations outwith those controlled or significantly influenced by the council. During 2024/2025, no senior officer of the council declared an interest in any organisation outwith those controlled or significantly influenced by the council. In addition, no senior officer declared an interest of close family members in any organisations outwith those controlled or significantly influenced by the council. The total remuneration paid to senior officers is shown in the Remuneration Report on page 35. Members Members of the council have direct control over the council’s financial and operating policies. The total of members’ allowances paid in 2024/2025 is shown in Note 14. During 2024/2025, works and services to the value of £6.618 million were commissioned from companies in which 20 members had an interest (2023/2024 - £7.635 million). Contracts were entered into in full compliance with the council’s standing orders. In addition, grants totalling £4.872 million were paid to 59 voluntary organisations in which members had an interest (2023/2024 - £3.913 million). The relevant members did not take part in any discussion or decision relating to the grants. Details of these transactions are recorded under each individual Councillor and can be found on the council’s website (Elected Members Interests). As these payments relate to payments ledgered in the financial year, there are no outstanding balances to be disclosed. The council has chosen a de minimis level of £0.100m as its threshold disclosure level for individual members interests in companies and voluntary organisations. In addition to the entities controlled or significantly influenced by the council (page 71), the council made individual payments above this threshold to the following companies and voluntary organisations in which members held an interest. These are detailed in the table overleaf. 137
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70 Member Organisation Individual Payment Exceeding £0.100m Cllr Alex Allison Biggar Rugby Football Club One payment of £0.429m. Grant in relation to extension and modernisation of building facilities Cllr Julia Marrs Computacenter (UK) Ltd Six payments totalling £0.670m: £0.130m for Omnissa Workspace 1. Four invoices totalling £0.439m relate to support costs and one invoice of £0.101m relating to licenses and other miscellaneous expenses Cllr Alex Allison COSLA One payment of £0.254m for Local Authority Subscriptions Cllr John Anderson Cllr Robert Brown Cllr Maureen Chalmers Cllr Gerry Convery Cllr Maureen Devlin Cllr Joe Fagan Cllr Gladys Ferguson- Miller Cllr Eileen Logan Cllr Katy Louden Cllr Hugh McDonald Cllr Richard Nelson Cllr John Ross Cllr Gavin Keatt General Teaching Council for Scotland One payment of £0.264m. Deduction at source Registration Fees from 1 April 2024 - 31 March 2025 Cllr John Anderson Routes to Work South Three payments of £0.221m and three payments of £0.125m totalling £1.038m. Three invoices Relate to Gateway to Employment Services (£0.633m) and Making It Work Delivery (£0.375m) Cllr Catherine McClymont Cllr Graeme Horne SEEMiS Group LLP One Payment of £0.329m. Membership Fee for 2024/25 Receipts and Payments Between the Council and Entities Controlled or Significantly Influenced by the Council 2024/25 Receipts £000 2024/25 Payments £000 2023/24 Receipts £000 2023/24 Payments £000 Subsidiaries: Common Good Fund 43 - 39 - Routes to Work South - 2,844 - 7,860 South Lanarkshire Leisure and Culture Limited 2,053 15,626 3,367 23,330 Total Subsidiaries 2,096 18,470 3,406 31,190 Joint Ventures: South Lanarkshire HSCP Integration Joint Board * 229,891 182,365 245,067 196,104 Total Joint Ventures 229,891 182,365 245,067 196,104 Joint Boards: Lanarkshire Valuation Joint Board 172 1,814 165 2,004 Strathclyde Partnership for Transport - 16,488 19 15,722 Strathclyde Concessionary Travel Scheme Joint Committee - 611 - 617 Total Joint Boards 172 18,913 184 18,343 Other Entities: Clyde Valley Learning and Development Joint Committee 59 12 59 13 Regen FX Youth Trust - 509 - 508 SEEMIS Group LLP 226 353 85 366 Total Other Entities 285 874 144 887 Total 232,444 220,622 248,801 246,524 138
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71 The amounts due (to) / from related parties are detailed below: 2024/25 £ 2023/24 £ Strathclyde Partnership for Transport - - South Lanarkshire Leisure and Culture Limited - - South Lanarkshire Health and Social Care Partnership (3,629) (2,809) Subsidiaries Common Good Fund The Common Good Fund is for the benefit of the geographical areas of the former burghs and is administered by the council. Routes to Work South Established in 1998, Routes to Work South’s main activity is supporting unemployed and workless residents in South Lanarkshire into employment, training, or further education. Routes to Work South delivers services to, and is funded by, the council. South Lanarkshire Council is the sole member of Routes to Work South and is included in the council’s group financial statements as a 100% subsidiary. South Lanarkshire Leisure and Culture Limited South Lanarkshire Leisure and Culture Limited was established as a Charitable Trust on 1 April 2002, became South Lanarkshire Leisure and Culture Limited in October 2010 and from 3 April 2023, the status of South Lanarkshire Leisure and Culture Limited changed from a Charitable Trust to a Scottish Charitable Incorporated Organisation (SCIO). The SCIO provides the council with a full range of leisure and cultural activities within the South Lanarkshire area. Whilst the Trust is entirely independent of the council under law and for taxation purposes, its activities are directed by means of contractual arrangements with the council, and, in recognition of this, South Lanarkshire Leisure and Culture Limited is treated as a 100% subsidiary, and included in the council’s group financial statements. Joint Ventures South Lanarkshire Health and Social Care Partnership Integration Joint Board The South Lanarkshire HSCP Integration Joint Board was established on 6 October 2015 as a partnership between South Lanarkshire Council and NHS Lanarkshire and is responsible for planning and seeing the delivery of a full range of community health and social work / social care services. In the year 2024/2025, the following financial transactions were made between South Lanarkshire Council and South Lanarkshire HSCP Integration Joint Board relating to the integrated and social care functions: 2024/25 £000 2023/24 £000 Contribution made to South Lanarkshire HSCP Integration Joint Board 182,365 196,104 Commissioning income received from South Lanarkshire HSCP Integration Joint Board 229,891 245,067 South Lanarkshire HSCP Integration Joint Board due (to)/from South Lanarkshire Council (3,629) (2,809) Joint Boards The council is represented on a number of joint boards which are independent public bodies formed by an Act of Parliament. These bodies are Lanarkshire Valuation Joint Board, Strathclyde Concessionary Travel Scheme and Strathclyde Partnership for Transport. All local government functions that relate to these bodies have been delegated from the constituent councils that comprise the area of each board. The members of each board are elected councillors and appointed by the councils in proportions specified in the legislation. The council has no shares, or ownership of any of these boards. Nevertheless, these boards are included within the council’s group accounts as associate, as the council is represented on the board and participate in policy making processes. The council’s share of each board’s net assets is calculated on its percentage share of the aggregate contributions made by the constituent councils. Other entities Details of all other public bodies in which the council has a significant interest are explained in the group accounts at Notes 4 to 7. Note 17 Leases Council as Lessee Finance Leases The council currently has obligations in relation to Glasgow Southern Orbital infrastructure and secondary schools. These are classed as PPP/PFI finance leases and are reported under Note 28 – Public Private Partnerships and Similar Contracts. Right of Use Assets The Council adopted IFRS 16 from 1 April 2024, to recognise all right of use assets. IFRS 16 will mean that the majority of leases where the Council acts as lessee will come onto the balance sheet and lessor accounting is effectively unchanged. Right-of-use 139
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72 assets and lease liabilities will have been calculated as if IFRS 16 had always applied but recognised in 2024/2025 and not by adjusting prior year figures. The main impact of the new requirements is that, for arrangements previously accounted for as operating leases (i.e. without recognising the leased vehicles, plant, equipment, property and land as an asset and future rents as a liability), a right-of-use asset and a lease liability are now on the balance sheet at 1 April 2024. Leases for items of low value (below £0.010m assets) and leases that expire on or before 31 March 2025 are exempt from the new arrangements. As a lessee, the Council has previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Council. Under IFRS 16, the Council recognises right-of-use assets and lease liabilities for most leases. The Council has decided to apply recognition exemptions to short-term leases and has elected not to recognise right-of-use assets and lease liabilities for short term leases that have a term of 12 months or less and leases of low value assets. The Council recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. This table shows the change in the value of right-of-use assets held under leases by the Council. Right of Use Assets 2024/2025 £000 Value at 1 April 26,565 Additions 0 Revaluations 0 Depreciation (3,789) Disposals 0 Value at 31 March 22,776 Land and Buildings 21,366 Vehicles, Plant and Equipment 1,410 Value at 31 March 22,776 The Council incurred the following expenses and cashflows in relation to leases. Transactions under Leases 2024/2025 £000 Comprehensive Income and Expenditure Statement Interest Expense on Lease Liabilities 1,215 Cashflow Statement Minimum lease payments 3,124 The lease liabilities are due to be settled over the following time bands (measured at the undiscounted amounts of expected cash payments). Maturity Analysis of Lease Liabilities 2024/2025 Finance Lease Liability £000 Not later than one year 3,124 Later than one year and not later than five years 12,348 Later than five years 11,093 Total Undiscounted Liabilities 26,565 Council as Lessor Operating Leases The council leases out property under operating leases. The purpose of the Lease Portfolio is principally Socio Economic – by supporting the wider corporate objectives of the council as stated in the Council Plan, Connect 2022-27, through strategic influence, control, occupational use and management of lease agreements. In particular, but not exclusively, to ‘support the local Economic Development by providing the right conditions for growth, improving skills and employability’. The future minimum lease payments receivable under non-cancellable leases in future years are: 140
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73 2024/25 £000 2023/24 £000 Not later than one year 6,014 5,070 Later than one year and not later than five years 11,368 13,129 Later than five years 91,468 93,386 Total 108,850 111,585 The minimum lease payments receivable do not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. In 2024/2025, no contingent rents were receivable by the council (2023/2024 – nil). Note 18 Grant Income The council credited the following grants, contributions and donations to the Comprehensive Income and Expenditure Statement in 2024/2025: 2024/25 £000 2023/24 £000 Credited to Taxation and Non Specific Grant Income Council Tax 161,060 159,053 Non Ring Fenced Government Grants 411,592 349,979 Non Domestic Rate Redistribution 366,018 341,536 Total 938,670 850,568 Credited to Services Scottish Government 34,808 67,226 European Grant Funding - 6,189 Skills Development Scotland 264 710 Central Government 69,196 63,069 Lottery 43 153 Creative Scotland 414 410 NHS (incl. Resource Transfer) 49,893 51,439 Other Grants 1,196 419 Total 155,814 189,615 Note 19 Events After the Balance Sheet Date The unaudited Annual Accounts were authorised for approval by the Executive Director (Finance and Corporate Resources) on 25 June 2025. There are no events that occurred between 1 April 2025 and the date that the unaudited Accounts were authorised for issue, that would have an impact on the financial statements. Where events taking place before this date provided information about conditions existing at 31 March 2025, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. 141
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74 Note 20 Property, Plant and Equipment Movements on Balances Movements in 2024/2025: Council Dwellings £000 Other Land And Buildings £000 Vehicles, Plant And Equipment £000 Community Assets £000 Surplus Assets £000 Assets Under Construction £000 Total Property, Plant and Equipment £000 PFI assets Included in Property, Plant and Equipment £000 Infrastructure Assets (Note 1) £000 Cost or Valuation As at 1 April 2024 1,477,115 1,966,148 57,415 1,626 10,250 24,790 3,537,344 515,933 Additions 59,019 2,585 3,975 111 1 28,745 94,436 189 19,036 Revaluation increases / (decreases) recognised in the Revaluation Reserve 129,415 129,781 - 0 (1,968) 32 257,260 116,952 - Revaluation increases / (decreases) recognised in the Surplus / Deficit on the Provision of Services (56) 1,604 - (10) (2,621) - (1,083) - - De-recognition – Disposals (304) (130) (5,098) (5) - - (5,537) - - Assets reclassified from Held for Sale - - - - - - - - - Other movements in Cost or Valuation 3,048 9,799 252 294 5,436 (31,669) (12,840) 548 2,695 At 31 March 2025 1,668,237 2,109,787 56,544 2,016 11,098 21,898 3,869,580 633,619 142
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75 Council Dwellings £000 Other Land And Buildings £000 Vehicles, Plant And Equipment £000 Communit y Assets £000 Surplus Assets £000 Assets Under Constructio n £000 Total Property, Plant and Equipment £000 PFI assets Included in Property, Plant and Equipment £000 Infrastructure Assets (Note 1) £000 Accumulated Depreciation and Impairment As at 1 April 2024 - 94,294 25,208 10 21 - 119,533 38,284 Depreciation Charge 39,317 42,158 8,948 - 8 - 90,431 10,453 11,702 Depreciation written out to the Revaluation Reserve (39,317) (53,819) - - (85) - (93,221) (41,803) - Depreciation written out to the Surplus / Deficit on the Provision of Services - (2,089) - - (113) - (2,202) - - Impairment losses / (reversals) recognised in the Revaluation Reserve - - - - - - - - - Impairment losses / (reversals) recognised in the Deficit on the Provision of Services - - - - - - - - - De-recognition – Disposals - (1) (5,029) - - - (5,030) - - Eliminated on reclassification to Assets Held for Sale - - - - - - - - - Other movements in Depreciation and Impairment - (198) - - 198 - - - - At 31 March 2025 - 80,345 29,127 10 29 - 109,511 6,934 Net book value At 31 March 2025 1,668,237 2,029,442 27,417 2,006 11,069 21,898 3,760,069 626,685 353,315 At 31 March 2024 1,477,115 1,847,310 30,186 1,617 10,231 24,790 3,391,246 477,649 343,286 Movements on Balances 143
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76 Movements in 2023/2024: Council Dwellings £000 Other Land And Buildings £000 Vehicles, Plant And Equipment £000 Community Assets £000 Surplus Assets £000 Assets Under Construction £000 Total Property, Plant and Equipment £000 PFI assets Included in Property, Plant and Equipment £000 Infrastructure Assets (Note 1) £000 Cost or Valuation As at 1 April 2023 1,531,317 1,896,013 54,315 1,474 10,190 33,095 3,526,404 507,528 Additions 60,084 3,877 4,524 229 64 24,809 93,587 179 26,732 Revaluation increases / (decreases) recognised in the Revaluation Reserve (122,610) 33,860 - - 47 - (88,703) 8,225 - Revaluation increases / (decreases) recognised in the Surplus / Deficit on the Provision of Services (99) (12,448) - (119) (66) - (12,732) - - De-recognition – Disposals (156) (3,710) (3,503) (11) (11) - (7,391) - (89,278) Assets reclassified from Held for Sale - 1 - - 479 - 479 - - Other movements in Cost or Valuation 8,579 24,012 58 53 (453) (33,114) (865) - 865 At 31 March 2024 1,477,115 1,941,604 55,394 1,626 10,250 24,790 3,510,779 515,933 144
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77 Council Dwellings £000 Other Land And Buildings £000 Vehicles, Plant And Equipment £000 Community Assets £000 Surplus Assets £000 Assets Under Construction £000 Total Property, Plant and Equipment £000 PFI assets Included in Property, Plant and Equipment £000 Infrastructure Assets (Note 1) £000 Accumulated Depreciation and Impairment As at 1 April 2023 - 85,317 19,517 9 17 - 104,860 31,681 Depreciation Charge 37,605 38,615 9,194 1 9 - 85,424 9,448 11,096 Depreciation written out to the Revaluation Reserve (37,618) (21,409) - - - - (59,027) (2,846) - Depreciation written out to the Surplus / Deficit on the Provision of Services - (6,024) - - (5) - (6,029) - - Impairment losses / (reversals) recognised in the Revaluation Reserve - - - - - - - - - Impairment losses / (reversals) recognised in the Deficit on the Provision of Services - - - - - - - - - De-recognition – Disposals - (2,194) (3,503) - - - (5,697) - (89,278) Eliminated on reclassification to Assets Held for Sale - - - - - - - - - Other movements in Depreciation and Impairment 13 (13) - - - - - - - At 31 March 2024 - 94,294 25,208 10 21 - 119,533 38,284 Net book value At 31 March 2024 1,477,115 1,847,310 30,186 1,617 10,231 24,790 3,391,246 477,649 343,286 At 31 March 2023 1,531,317 1,810,694 34,798 1,464 10,173 33,095 3,421,541 475,847 326,785 145
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78 Note 1: Infrastructure asset values have been disclosed in accordance with the Scottish Government’s Finance Circular 9/2022 Statutory Override - Accounting for Infrastructure Assets. The council has applied both statutory overrides set out in the circular which are as follows: For accounting periods commencing from 1 April 2021 until 31 March 2025, a local authority is not required to report the gross carrying amount and accumulated depreciation for infrastructure assets. For the accounting periods from 1 April 2021 to 31 March 2025, the carrying amount to be derecognised in respect of a replaced part of an infrastructure asset is to be accounted for as a nil amount, and no subsequent adjustment can be made to the carrying amount of the asset with respect to that part. The approach is set out in Note 36: Accounting Policies. Capital Commitments At 31 March 2025, the council has entered into a number of contracts for the construction or enhancement of Property, Plant and Equipment for housing and non-housing projects in 2025/2026 and future years. The major commitments for both Housing and General Services are as follows: Housing Projects £000 Non-Housing Projects £000 New Build Housing Housing Investment projects including Heating Projects, Windows and Doors, Fire Doors, External Fabric Upgrades, Roofing and Environmental Works 16,054 13,720 Outdoor Space - Lanark Hamilton Junctions Improvement SPT - Hairmyres Station Park and Ride Schools ICT Replacement SWISS Plus IT System Lanark Library - Roof Replacement Priory Changing Pavilion, Blantyre Clydesdale Way White Bridge & Pump Track Canberra Primary School - PV Panels Blantyre Leisure Centre - Library Provision St. John the Baptist Primary School - Roof & Kitchen works Leisure & Culture Transformation EK Masterplan 131 1,700 2,123 89 342 575 410 703 194 110 207 369 1,578 2,117 Revaluations The council carries out a rolling programme that ensures that all Property, Plant and Equipment required to be measured at fair value is revalued at least every five years. All valuations were carried out internally. Valuations of land and buildings were carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. Valuations of vehicles, plant and equipment are based on current prices where there is an active second-hand market or latest list prices adjusted for the condition of the asset. Vehicles, plant and equipment, despite being valued in the Balance Sheet at current costs are not included in the five year revaluation programme as any changes in valuation are considered to be immaterial. Council dwellings are revalued every year. The significant assumptions applied in estimating the fair values are: ■ All valuations are prepared in accordance with the current edition of the RICS Valuation Standards. ■ All valuations are provided by a Valuer directly employed by South Lanarkshire Council and are accordingly defined as internal valuations. Valuation Assumptions Unless the Appointed Valuer is advised or reports to the contrary, the following valuation assumptions shall apply to all asset valuations provided under this service: ■ It is assumed that the Local Authority shall continue to provide the services to which the assets relate; ■ It is assumed that the property valued, is not at the date of valuation, affected by any mining subsidence and will not be affected in the future; ■ It is assumed that the site is stable and will not occasion any extraordinary costs with regard to mining subsidence; ■ It is assumed that the title to the subject contains no onerous burdens and restrictive conditions and that it has not been ascertained what minerals, rights of support and compensation is attached to the land nor whether rights of use and re-entry have been reserved; ■ It is assumed that the property and its value are unaffected by any matters which would be revealed by local search and replies to the usual enquiries or by inspection of any register and that its condition, use, or intended use was, is or will be lawful; 146
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79 ■ It is assumed that the property has the necessary statutory consents for the current buildings and use and that there are no policies or proposals by statutory authorities that could impact positively or adversely on the value; ■ No investigation shall be undertaken, or information provided regarding the use of hazardous or deleterious materials or techniques in the construction of the property. It is assumed that no such materials or techniques have been used; ■ No investigation shall be undertaken, or information provided regarding the presence of contamination or hazardous substances in the property (including the site) and neighbouring properties. It is assumed that no such contamination or hazardous substances are present; ■ No environmental assessment shall be carried out or information provided on the presence of naturally occurring radon gas. It is assumed that no radon gas is present in the property; ■ It is assumed that adequate repairs and maintenance is being undertaken; and ■ Unless otherwise stated, the date of valuation shall be 1 April of the specified financial year. Revaluation Programme The table below shows the progress of the council’s programme for the revaluation of Property, Plant and Equipment that ensures that all its PPE assets required to be measured at fair value are revalued at least every five years. The measurement basis used for determining the gross carrying amount, and the significant assumptions applied in estimating the fair values are disclosed above and in Note 36 Accounting Policies under Section P ‘Property, Plant and Equipment’. Council Dwellings £000 Other Land and Buildings £000 Vehicles, Plant and Equipment £0000 Infrastructure Assets £000 Community Assets £000 Surplus Assets £000 Assets Under Construction £000 Total £000 Carried at historical cost - - 26,007 353,315 2,006 - 21,898 403,226 Valued at fair value 2024/25 1,668,237 722,524 - - - 2,105 2,392,866 2023/24 - 331,118 - - - 459 - 331,577 2022/23 - 295,816 - - - 716 - 296,532 2021/22 - 248,104 - - - 2,024 - 250,128 2020/21 - 410,514 - - - 5,765 - 416,279 5 years ago, and greater - - - - - - - - Total Cost or Valuation 1,668,237 2,008,076 26,007 353,315 2,006 11,069 21,898 4,090,608 Note 21 Other Assets – Intangible, Heritage and Assets Held For Sale Intangible Assets Intangible Assets Heritage Assets Heritage Assets Assets Held for Sale Assets Held for Sale 2024/25 £000 2023/24 £000 2024/25 £000 2023/24 £000 2024/25 £000 2023/24 £000 Cost or Valuation Balance at 1 April 302 375 3,853 3,826 168 3,408 Additions - 15 - - - - Revaluation increases / (decreases) recognised in the Revaluation Reserve - - - 27 - - De-recognition – Disposals - (88) - - - (2,761) Assets reclassified (to) / from Assets Held for Sale 10,145 - - - - (479) Balance at 31 March 10,447 302 3,853 3,853 168 168 Accumulated Depreciation Balance at 1 April 164 185 3,853 - - - Depreciation charge 224 66 - - - - Depreciation – Disposals - (87) - - - - Balance at 31 March 388 164 - - - - Net Book Value at 31 March 10,059 138 3,853 3,853 168 168 147
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80 Note 22 Capital Expenditure and Capital Financing The total amount of capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases and PFI/PPP contracts), together with the resources that have been used to finance it. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the council that has yet to be financed. The CFR is analysed in the second part of this note. General Fund 2024/25 £000 HRA 2024/25 £000 Total 2024/25 £000 General Fund 2023/24 £000 HRA 2023/24 £000 Total 2023/24 £000 Opening Capital Financing Requirement 1,102,027 307,217 1,409,244 1,089,036 292,706 1,381,742 Capital Investment Property, Plant and Equipment 41,928 71,544 113,472 58,079 62,240 120,319 Intangible Assets - - - 15 - 15 Decrease in PPP Finance Lease Liability 151,221 - 151,221 (7,097) - (7,097) Impact of Applying Service Concession Flexibility 9,007 - 9,007 4,437 - 4,437 Sources of Finance Capital Receipts (1,340) (202) (1,542) - (1,966) (1,966) Government Grants and Other Contributions (29,817) (21,369) (51,186) (38,599) (25,712) (64,311) Sums set aside from revenue: Direct Revenue Contributions (1,289) (33,506) (34,795) (576) (20,046) (20,622) Loans Fund Principal (3,730) (5) (3,735) (3,268) (5) (3,273) Closing Capital Financing Requirement 1,268,007 323,679 1,591,686 1,102,027 307,217 1,409,244 Explanation of movements in year: Increase in Underlying Need to Borrow 9,482 16,467 25,949 18,919 14,516 33,435 Loans Fund Repayments (3,730) (5) (3,735) (3,268) (5) (3,273) Assets Acquired Under PFI/PPP Contracts 151,221 - 151,221 (7,097) - (7,097) Impact of Applying Service Concession Flexibility 9,007 - 9,007 4,437 - 4,437 Increase / (Decrease) in Capital Financing Requirement 165,980 16,462 182,442 12,991 14,511 27,502 148
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81 Note 23 Short Term Debtors 31 March 2025 £000 31 March 2024 £000 Trade Receivables 31,099 27,429 Prepayments 8,220 13,780 Other Receivable Amounts 60,787 61,039 Total 100,106 102,248 Note 24 Debtors for Local Taxation The past due but not impaired amount for local taxation and non-domestic rates can be analysed by age as follows: 31 March 2025 Council Tax £000 31 March 2025 NDR £000 31 March 2024 Council Tax £000 31 March 2024 NDR £000 Less than one year 2,329 237 2,267 2,697 One to two years 854 345 357 - Two to five years - - - - More than five years - - - - Total 3,183 582 2,624 2,697 Note 25 Short Term Creditors 31 March 2024 £000 31 March 2024 £000 Trade Payables 109,667 85,557 Other Payables 125,620 118,386 Total 235,287 203,943 Note: Included within the Other Payables balance of £125.620m are balances held on behalf of third parties totalling £6.595m. They relate to Lanarkshire Valuation Joint Board, Clyde Valley Learning and Development Joint Committee, SEEMIS LLP, Regen FX Youth Trust, Supplier Development Programme, Common Good and Trust Funds whose financial transactions are hosted in the Council’s Financial Management System. Note 26 Provisions Injury and damage compensation claims £000 Other provisions (1) £000 Total £000 Balance at 31 March 2024 536 1,676 2,212 Additional provisions made in 2024/25 0 607 607 Amount used in 2024/25 (536) (1,676) (2,212) Unused amounts reversed in 2024/25 0 0 0 Unwinding of discounting in 2024/25 0 0 0 Balance at 31 March 2025 0 607 607 The above provisions can be further analysed into Short Term and Long Term as follows: 149
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82 Injury and damage compensation claims £000 Other provisions (2) £000 Total £000 Short Term 0 607 607 Long Term 0 0 0 Balance at 31 March 2025 0 607 607 (1) The majority of this amount relates to provisions in respect of orders for bespoke adaptations, and property dilapidations. Note 27 Receipts in Advance The council has received a number of grants and contributions that have yet to be recognised as income. This is because they have conditions attached to them which requires the monies or property to be returned to the giver if these conditions are not met. These monies are committed to spend in 2024/2025. The balances at 31 March 2025 are as follows: 31 March 2025 £000 31 March 2024 £000 Revenue Grants and Contributions Big Lottery - UK Government 219 206 Clyde Gateway 85 85 National Health Service 30 13 Scottish Coal 498 498 Scottish Government 1,046 221 North Lanarkshire Council Business Gateway 300 - North Lanarkshire Council ERDF 1,121 - Wind Turbine Construction Compensation (Various) 140 140 Other 38 168 Total 3,477 1,331 Note 28 Public Private Partnership and Similar Contracts The Council has two PPP or similar contracts: Secondary Schools PPP and Glasgow Southern Orbital. Secondary Schools PPP: The council entered the PPP agreement in June 2006 for the provision of 17 new build schools (which includes 2 named Additional Support Needs schools) as well as the major refurbishment of Stonelaw High School and Hamilton Grammar. The Unitary Charge is index linked with the inflation rate in the January of the preceding financial year used to agree the charge for the new financial year. The agreement will last 30 years and will end in 2039/2040. The unitary charge paid to the contractor includes the repayment of construction costs, interest and service charges and the projected payments due under the agreement, based on assumed RPI of 2.5% per annum. Glasgow Southern Orbital: The council entered the PPP agreement in July 2006 for the Design, Build, Finance and Operate Contract which covered both the Glasgow Southern Orbital and the M77 Extension with a contract value of £130m. The agreement will last 30 years and will end in 2035/2036. The actual payments made on PPP contracts are single sum unitary charge payments made to the contractor. For year-end accounting purposes we are required to calculate notional figures. Payments remaining to be made under PFI contracts for both Schools and Glasgow Southern Orbital as at 31 March 2025 (assuming an inflation rate of 2.5% for Schools PPP and excluding any estimation of availability/ performance deductions) are as follows: Payment For Services £000 Reimbursement Of Capital Expenditure £000 Interest £000 Contingent Rents £000 Total £000 Payable in 2025/2026 18,248 7,599 8,658 14,072 48,577 150
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83 Payable within two to five years 88.375 28,979 30,720 58,675 206,750 Payable within six to ten years 99,019 57,409 27,973 104,451 288,852 Payable within eleven to fifteen years 91,670 70,569 9,669 120,286 292,284 Total 297,313 164,646 77,021 297,484 836,464 The impact of a 1% movement in inflation on the 2025/2026 Unitary charge payment would be £0.473m. The liability outstanding to pay the contractor for capital expenditure incurred is as follows: 2024/25 £000 2023/24 £000 Balance outstanding at start of year 172,036 179,133 Payments during year (7,390) (7,097) Capital expenditure incurred in the year - - Reduction in liability for prepaid assets - - Balance outstanding at year end 164.646 172,036 Implementation of PPP Service Concession Flexibilities In accordance with Accounting Policy S on page 105 and in line with Finance Circular 10/2022, the Council implemented the permitted PPP Service Concession flexibility in financial year 2022/2023 on a retrospective annuity basis with a useful life of 50 years. The flexibility being applied is consistent with current Council Loans Fund arrangements and is considered prudent, sustainable, and affordable over the life of the asset. The implementation of this arrangement has no impact on the payments made to the contractor. The current notional repayments noted above have been compared against an annuity repayment profile based on the estimated useful asset lives for the each of the two PPP or similar arrangements, over the contract period. The most appropriate asset life is considered to be 50 years which replicates the useful asset life of other similar type assets held on the Council’s balance sheet (schools and roads). By applying the flexibility, a one-off combined retrospective saving of £59.733m was achieved. In addition to the one-off retrospective element, in-year savings have been realised in the scheduled debt repayments up to 2024/2025 of £18.078m. This will be followed by a reduction in the annual charges for further 16 years and then the continuation of the statutory charges after the PPP and similar contracts have been repaid. Over the full asset life of the arrangement, the total repayment for the debt liability remains the same. PPP debt repayment Original repayment £000 Revised repayment £000 Benefit / (Cost) £000 Pre 2024/2025 99,539 30,735 68,804 Paid in 2024/2025 13,451 4,444 9,007 Payable within one to five years 66,557 26,070 40,487 Payable within six to ten years 104,490 33,874 70,616 Payable within eleven to fifteen years 128,768 44,015 84,753 Payable within sixteen to twenty years - 57,193 -57,193 Payable within twenty-one to twenty-five years - 74,114 -74,114 Payable within twenty-six to thirty years - 96,234 -96,234 Payable within thirty-one to forty-five years - 46,126 -46,126 Total 412,805 412,805 - Note 29 Pension Schemes Accounted for as Defined Contribution Schemes Teachers employed by the council are members of the Teachers’ Pension Scheme, administered by the Scottish Government. The Scheme provides teachers with specified benefits upon their retirement, and the council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries. The Scheme is technically a defined benefit scheme. However, the Scheme is unfunded and the Scottish Government uses a 151
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84 notional fund as the basis for calculating the employers’ contribution rate paid by local authorities. The council is not able to identify its share of underlying financial position and performance of the Scheme with sufficient reliability for accounting purposes. For the purposes of the Financial Statements, it is therefore accounted for on the same basis as a defined contribution scheme. South Lanarkshire Council’s level of participation in the scheme is 5.23% based on the proportion of employer contributions paid in 2023/2024. In 2024/2025, the council paid £48.420 million into the Teachers’ Pension Scheme in respect of employer contributions, being 26.0% of pensionable pay. The figures for 2023/2024 were £41.558 million and 23.0% of pensionable pay. The council is responsible for the costs of any additional benefits awarded upon early retirement outside of the terms of the teachers’ scheme. These costs are accounted for on a defined benefit basis and detailed in Note 30. Note 30 Pension Schemes Accounted for as Defined Benefit Schemes The post-employment scheme for employees other than teachers is the Local Government Pension Scheme (LGPS) and is administered in the West of Scotland by Glasgow City Council in respect of all local authorities and admitted bodies in the former Strathclyde area. This is a multi-employer scheme in which it is possible for an employer to identify its share of the assets and liabilities on a consistent and reasonable basis. Employer’s liabilities can be evaluated directly by the Actuary at any time on membership data. Individual employer assets have been apportioned to each employer since 2002. Prior to that date, each employer was considered to have the same funding as the whole Fund. Benefits ■ It is a defined benefit final salary scheme, meaning that the council and employees pay contributions into a fund, calculated at a level to balance the pensions liability with investment assets. ■ A new Career Average Related Earnings (CARE) pension scheme has been introduced from 1 April 2015. The pension accrual rate guarantees a pension that is built up at a rate of 1/49th of the pensionable pay in the financial year. The amount built up in the year is transferred to the member’s pension account and at the end of each financial year the total in the member’s pension account is adjusted in line with the cost of living to ensure it retains its purchasing power. ■ For pension contributions from 2009 to 2015, the pension is based on 1/60th of final pensionable salary and years of service, and prior to 2009, the accrual rate guarantees a pension based on 1/80th and a lump sum based on 3/80th of final pensionable pay and years of pensionable service. ■ There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for lump sum up to the limits set by the Finance Act 2004. The scheme’s retirement age is the normal age for the state pension. Pensions are increased annually in line with changes to the Pensions (Increase) Act 1971 and Section 59 of the Social Security Pensions Act 1975. Governance ■ The Strathclyde Pension Fund is operated under the regulatory framework for the LGPS in Scotland and the governance of the scheme is the responsibility of the Strathclyde Pension Fund Committee. This committee is comprised solely of Elected Members of Glasgow City Council. Employing authorities (including South Lanarkshire Council) are represented at the Strathclyde Pension Fund Representative Forum. ■ Policy is determined in accordance with the Local Government Pension Scheme (Scotland) Regulations. Management of the Fund’s investments is carried out by the Fund’s Investment Advisory Panel which selects and appoints a number of external investment managers/partners and monitors their investment performance. ■ Under the Regulations, employers fall into three categories, scheme employers (also known as schedule bodies) such as South Lanarkshire Council, community admission bodies and transferee admission bodies. Admission agreements are generally assumed to be open-ended. However, either party can voluntarily terminate the admission agreement by giving an appropriate period of notice to the other parties. Any deficit arising from the cessation valuation will usually be levied on the departing admission body as a capital payment. Principal Risks ■ The principal risks to the scheme are the longevity assumptions, statutory changes to the scheme, changes to inflation, bond yields and the performance of the investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge the General Fund the amount due by statute as described in the accounting policy note. 152
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85 Discretionary Post-employment Benefits ■ Discretionary post-retirement benefits on early retirement are an unfunded defined benefit arrangement, under which liabilities are recognised when an award is made. There are no plan assets built up to meet these pension liabilities. Legal and Regulatory Uncertainty Section 37 confirmations (Virgin Media vs NTL Pension Trustees II Limited ruling) The actuary has advised on an initial legal judgement from July 2023 regarding Section 37 confirmations. The actuary has made no additional allowance within the accounting balance sheet for this because at the time of writing the ruling only applies to the above- named private sector pension scheme; the legal judgement was subject to appeal; it is unknown whether there would be any potential remedy required to public service schemes (including the LGPS); it is unknown what the impact of any potential remedy would be and it is unknown whether Section 37 certificates exist for prior scheme amendments. Accordingly, no provision has been made in the accounts. Guaranteed Minimum Pension Equalisation / Indexation Treatment (Lloyd’s Ruling) Guaranteed Minimum Pension (GMP) was accrued by members of the Local Government Pension Scheme (LGPS) between 6 April 1978 and 5 April 1997. Strathclyde Pension Fund’s actuary has allowed for the impact of full GMP indexation in the calculation of the latest funding valuation results. The Employer’s funding valuation results are used as the starting point for the accounting roll forward calculations and therefore an allowance for full GMP indexation has already been included in the accounting disclosure. Guaranteed Minimum Pension Equalisation - Historical Transfers (Further Lloyd’s Ruling) A further ruling was passed in relation to historical transfers and it is the opinion of Strathclyde Pension Fund’s actuary that this is unlikely to have a significant impact on the pension obligations of a typical employer. In addition, the historic individual member data to assess the impact is not readily available, therefore no allowance has been made in the calculations. McCloud / Sargeant Treatment Ruling – Age Discrimination When the Local Government Pension Scheme (LGPS) Scotland benefit structure was reformed in 2015, transitional protections were applied to certain older members close to retirement age. The benefits accrued from 1 April 2015 by these members are subject to an ‘underpin’ which means that they cannot be lower than what they would have received under the previous benefit structure. In December 2018, the Court of Appeal upheld a ruling (McCloud case) that similar transitional protections were unlawful on the grounds of age discrimination. This means that the LGPS Scotland benefits accrued from 2015 may need to be enhanced so that all eligible members, regardless of age, will benefit from the underpin. The impact of this will depend on the compensation awarded, members’ future salary increases, length of service, retirement age and whether (when) members withdraw from active service. In 2019, Strathclyde Pension Fund’s actuary included an estimate of the impact of this in their IAS19 reports and the Pension Liability reported in the council’s Balance Sheet. In July 2020, the Government published a consultation covering Scotland which proposed amendments to the Local Government Pension Scheme in order to provide a remedy for the McCloud and Sargeant legal rulings and actuaries reviewed their assumptions in the IAS19 reports. The actuary has allowed for the McCloud judgement in the calculation of the latest funding valuation results. The Employer’s funding valuation results are used as the starting point for the accounting roll forward calculations and therefore an allowance is included in the accounting disclosure. Goodwin Treatment Scottish Public Pension Agency circular (Local Government Pension Scheme 2020/04), refers to a ruling that same-sex survivors were originally entitled to survivor benefits, taking into account the member’s service from 6 April 1978. Following the Goodwin Tribunal, regulatory amendments will now need to be made with effect from the same date to extend that entitlement to male spouse survivors of female members. Previously, the male spouse survivor’s entitlement was based on service accrued from 6 April 1988. The change is backdated to 5 December 2005, therefore affects the pension of male spouse survivors where their entitlement arose on or after 5 December 2005. While there is still uncertainty surrounding the potential remedy to the Goodwin judgement, Strathclyde Pension Fund’s actuary has carried out analysis in order to understand the potential impact of implementing a solution to correct the past underpayment of spouses’ benefits and have ascertained that they feel the impact is very small for a typical fund (c0.1% of obligations), therefore no allowance has currently been made in the calculations. Other Cases (Walker and O’Brien) The actuary has also highlighted 2 other court cases which may impact on Local Government Pension Scheme benefits in the future. The first was the Walker case where it was ruled that surviving spouses in same sex marriages should be entitled to the same benefits as those in different sex marriages and also the O’Brien case where it was ruled that recognition of part time benefits should apply to service for the period prior to 7 April 2000. The Actuary’s view remains unchanged from previous years and is that they are unlikely to be significant judgements in terms of impact on pension obligations. Until further guidance is released from the relevant governing bodies in the LGPS, no allowance has been made for the potential remedies for these judgements. 153
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86 Transactions Relating to Post-Employment Benefits The cost of retirement benefits is recognised in the reported Cost of Services when they are earned by the council’s employees, rather than when the benefits are eventually paid as pensions. However, the charge that is statutorily required to be made against the Council Tax is based upon the pension contributions payable by the council in the year, and an adjustment is made in the Movement in Reserves Statement to achieve this. The following transactions have been made in the accounting statements in 2024/2025 and the prior year 2023/2024. 31 March 2025 £000 31 March 2024 £000 Comprehensive Income and Expenditure Statement (CIES) Cost of Services: Service cost comprising: • current service cost 60,313 65,932 • past service costs - - • unfunded benefits - - Financing and Investment Income and Expenditure • net interest expense 6,285 (32,312) Total Post Employment Benefit Charged to the Surplus or Deficit on the Provision of Services 66,598 33,620 Other Benefits Charged to the CIES Re-measurement of the net defined liability comprising: • Expected return on pension fund assets 53,389 (137,234) • Actuarial (gains) or losses arising on changes in demographic assumptions (3,614) (28,599) • Actuarial (gains) or losses arising on changes in financial assumptions (314,469) (113,469) • Actuarial (gains) or losses arising on changes in other experiences (22,890) 190,037 • Actuarial (gains) or losses arising on de-recognition of Pension Asset 234,541 176,360 Total Post Employment Benefit Charged to the CIES (53,043) 87,095 Net charge to the Surplus / Deficit on the Provision of Services brought forward 66,598 33,620 Movement in Reserves Statement (MIRS) • Reversal of net charges made to the Surplus or Deficit on the Provision of Services for post-employment benefits in accordance with the Code (37,369) 35,989 Actual amount charged against the General Fund balance for pensions in the year: Employers’ contributions payable to Strathclyde Pension Fund 29,229 69,609 Pensions Assets and Liabilities Recognised in the Balance Sheet The amount included in the Balance Sheet arising from the Council’s obligation in respect of its defined benefit plans is per the table below. The net asset arising from the Council’s involvement in the defined benefit scheme totals £1,196.386m at 31 March 2025. However, this has been limited to £nil in line with the accounting requirements of IFRIC 14 to limit the recognition of a pension asset to the extent to which the Council can recover the benefits through either refunds or reduced contributions. As the Council is not able to withdraw from the scheme or recover funds directly, the asset is therefore limited to the forecast reductions in contributions as compared to the forecast future service costs. This has limited the recognition of the pension asset to £nil. Separately the Council has continued to recognise the unfunded element of its pension liabilities as there are no scheme assets to cover the future costs of these liabilities as they are due going forward. 31 March 2025 £000 31 March 2024 £000 Present Value of Funded Obligations (1,784,877) (2,008,726) Fair Value of Pension Fund Assets 2,981,263 2,926,079 De-Recognition of Pension Fund Assets (Surplus) to Asset Ceiling (1,196,386) (917,353) Net Asset / (Liability) arising from Funded Obligations 0 0 Teachers’ Unfunded Pensions (38,073) (42,716) Unfunded Liabilities for Pension Fund (50,887) (60,099) 154
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87 Unfunded Liabilities Prior to 1996 Local Government Reorganisation (9,032) (10,941) Present Value of Unfunded Obligations Accounted for Separately (97,992) (113,666) A reconciliation of South Lanarkshire Council’s share of the present value of Strathclyde Pension Fund’s defined benefit obligation (liability) is as follows: 31 March 2025 £000 31 March 2024 £000 Opening balance at 1 April (2,122,392) (1,998,089) Current service cost (60,313) (65,932) Interest cost (102,831) (94,911) Contributions by Pension Fund participants (18,309) (18,691) Re-measurement gains and (losses) • Actuarial gains and losses arising on changes in demographic assumptions 3,614 28,599 • Actuarial gains and losses arising on changes in financial assumptions 314,469 113,469 • Actuarial gains and losses arising on changes in other experiences 22,890 (171,387) Past service costs (including curtailment) - - Settlements - - Benefits paid 80,003 84,550 Closing balance at 31 March (1,882,869) (2,122,392) Less Present Value of Unfunded Obligations Accounted for Separately 97,992 113,666 Present Value of Funded Obligations (1,784,877) (2,008,726) A reconciliation of South Lanarkshire Council’s share of the fair value of Strathclyde Pension Fund’s assets is as follows: 31 March 2025 £000 31 March 2024 £000 Opening fair value of pension fund assets 2,926,079 2,676,522 Interest Income 141,038 127,223 Re-measurement gains and (losses) • Expected rate of return on pension fund assets (53,389) 137,234 • Actuarial gains and (losses) - - • Actuarial losses arising on changes in other experiences - (18,650) The effect of changes in foreign exchange rates - - Contributions from employers 29,229 69,609 Contributions from employees into the scheme 18,309 18,691 Benefits paid (80,003) (84,550) Closing balance at 31 March 2,981,263 2,926,079 Analysis of Pension Fund’s Assets 31 March 2025 31 March 2024 Quoted Prices in Active Markets £000 Prices not quoted in Active Markets £000 Total £000 Quoted Prices in Active Markets £000 Prices not quoted in Active Markets £000 Total £000 Cash and cash equivalents - 72,538 72,538 4,558 49,683 54,241 Equity Instruments 617,603 1,927 619,530 590,977 641 591,618 Debt Instruments - - - - - - Real Estate - 224,930 224,930 - 230,076 230,076 Derivatives - (2) (2) - - - Private Equity - 689,123 689,123 - 698,575 698,575 Investment Funds 10,915 1,364,229 1,375,144 12,017 1,339,552 1,351,569 Total Assets 628,518 2,352,745 2,981,263 607,552 2,318,527 2,926,079 Basis for Estimating Assets and Liabilities The council’s share of the net obligations of the Strathclyde Pension Fund is an estimated figure based on actuarial assumptions about the future and is a snapshot at the end of the financial year. The net obligation has been 155
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88 assessed using the “projected unit method”, that estimates the pensions that will be payable in future years dependent upon assumptions about mortality rates, salary levels and so on. The Fund’s obligation has been assessed by Hymans Robertson, an independent firm of actuaries, and the estimates are based on the latest full valuation of the Fund at 31 March 2023. The significant assumptions used by the actuary are shown in the table below. Note 2 includes a sensitivity analysis for the pension obligation based on reasonably possible changes of these assumptions occurring at the reporting date. 31 March 2025 £000 31 March 2024 £000 Long term expected rate of return on assets in the Fund • Equity investment 4.85% 4.75% • Bonds 4.85% 4.75% • Property 4.85% 4.75% • Cash 4.85% 4.75% Mortality Assumptions (years): • Men 19.6 19.7 • Women 22.3 22.3 Longevity at 65 for future pensioners (years): • Men 20.4 20.5 • Women 24.1 24.2 Rate of inflation 2.75% 2.82% Rate of increase in salaries 3.45% 3.45% Rate of increase in pensions 2.75% 2.75% Rate for discounting Fund liabilities 5.80% 4.85% Take-up option to convert annual pension into retirement lump sum - Pre April 2009 service 75.0% 75.0% - Post April 2009 service 75.0% 75.0% Asset and Liability Matching (ALM) Strategy The main fund (Fund 1) of Strathclyde Pension Fund does not have an asset and liability matching strategy [ALM] as this is used mainly by mature funds. The Fund does match, to the extent possible, the types of assets invested to the liabilities in the defined benefit obligation. As is required by the pensions and investment regulations, the suitability of various types of investment has been considered, as has the need to diversify investments to reduce the risk of being invested in too narrow a range. The Fund invests in equities, bonds, properties and in cash. Impact of High Inflationary Environment The Fund’s actuary had advised that the CARE, deferred pensioner and pensioner obligations are increased each April in line with previous September rate of CPI, and the April 2024 Pension Increase Order of 6.7% has been applied to the obligations within the 31 March 2024 closing Balance Sheet figures. Impact on the Authority’s Cash Flow The objectives of the Fund are to keep employers’ contributions at as constant a rate as possible. The Fund has agreed a strategy to achieve a funding rate of 100% in the longer term. The Scheme is a multi-employer defined benefit plan and employers’ contributions have been determined so that employee and employer rates are standard across all participating Local Authorities. Following the completion of the triennial valuation as at 31 March 2023, employers’ contribution rates were set at a reduced rate of 6.5% for 2024/2025, from the previous 19.3%. They are due to increase up to 17.5% in 2026/2027. The total contributions expected to be made by the council to Strathclyde Pension Fund in the year to 31 March 2026 is £20.002million. The assumed weighted average duration of the defined benefit obligation for scheme members is 17.0 years. 156
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89 Note 31 Contingent Assets and Liabilities As at 31 March 2025 the council has the following material contingent liabilities: Historical Childhood Abuse The council recognises the potential for compensation claims deriving from the Scottish Government’s Limitation (Childhood Abuse) Scotland Act 2017. At this stage the extent of the council’s potential liability is unknown. The Government introduced a Redress Scheme in December 2021. This may have an impact on the extent of the Council’s liability. This cannot be quantified. Strathclyde Regional Council Intromissions Glasgow City Council are the accounting authority for any intromissions in relation to claims/litigation for the former Strathclyde authorities. The Council has included confirmed liabilities to date in the 2024/2025 Accounts, however, at this stage the extent of any further potential liability of the council is unknown. Pensions A ruling was passed in relation to historical transfers and it is the opinion of Strathclyde Pension Fund’s actuary that this is unlikely to have a significant impact on the pension obligations of a typical employer. In addition, the historic individual member data to assess the impact is not readily available, therefore no allowance has been made in the calculations. Given the uncertainty and the immaterial nature of any potential impact, no provision has been made in the Accounts. A circular from the Scottish Public Pensions Agency (Local Government Pension Scheme 2020/04) refers to a ruling that same-sex survivors were originally entitled to survivor benefits, taking into account the member’s service from 6 April 1978. Previously, the male spouse survivor’s entitlement was based on service accrued from 6 April 1988. The change is backdated to 5 December 2005, therefore affects the pension of male spouse survivors where their entitlement arose on or after 5 December 2005. Following the Goodwin Tribunal, regulatory amendments will now need to be made with effect from the same date to extend that entitlement to male survivors of female members. While this could have a financial impact on future years’ costs, and the impact cannot yet be quantified, current information from the Strathclyde Pension Fund actuary suggests that this is likely to be minimal. Given the uncertainty, and the immaterial nature of any potential impact, no provision has been made in the Accounts. In addition, the actuary also highlighted an awareness of 2 other court cases which may impact on pension benefits in the future. The first was the Walker case where it was ruled that surviving spouses in same sex marriages should be entitled to the same benefits as those in different sex marriages and also the O’Brien case where it was ruled that recognition of part time benefits should apply to service for the period prior to 7 April 2000. The actuary’s understanding is that these are unlikely to be significant judgements in terms of impact on future pension obligations of Employers. Again, given the uncertainty, the immaterial nature of any potential impact, and as no further guidance has been released from the relevant governing bodies in the LGPS no provision has been made in the Accounts. Finally, the actuary has advised on an initial legal judgement from July 2023 (Virgin Media vs NTL Pension Trustees II Limited ruling) regarding Section 37 confirmations. The actuary has made no additional allowance within the accounting balance sheet for this because at the time of writing the ruling only applies to the above-named private sector pension scheme; the legal judgement is currently being appealed; it is unknown whether there would be any potential remedy required to public service schemes (including the LGPS); it is unknown what the impact of any potential remedy would be and it is unknown whether Section 37 certificates exist for prior scheme amendments. Accordingly, no provision has been made in the accounts. Job Evaluation Scheme As part of the Council’s Job Evaluation Scheme, a range of posts have been identified as requiring review. Where there is no outcome agreed, any liability in respect of these reviews cannot be determined. Contractor Claims There are no outstanding claims that have not been accounted for in the Accounts. 157
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90 Note 32 Financial Instruments Categories of Financial Instruments The following categories of financial instrument are carried in the Balance Sheet: 31 March 2025 31 March 2024 Long Term £000 Current £000 Total £000 Long Term £000 Current £000 Total £000 Financial Assets Fair value through profit and loss - - - - Amortised Cost - 23,836 23,836 - 13,784 13,784 Total Financial Assets - 23,836 23,836 - 13,784 13,784 Financial Liabilities Fair value through profit and loss - - - Amortised cost (1,146,593) (193,054) (1,339,647) 1,145,408 70,486 1,215,894 Total Financial Liabilities (1,146,093) (193,054) (1,339,647) 1,145,408 70,486 1,215,894 158
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91 Income, Expense, Gains and Losses 2024/25 2023/24 Surplus or Deficit on the Provision of Services £000 Other Comprehensive Income and Expenditure £000 Total £000 Surplus or Deficit on the Provision of Services £000 Other Comprehensive Income and Expenditure £000 Total £000 Net Gains/Losses on: Financial Assets Measured at Fair Value Through Profit and Loss - - - - - - Financial Assets Measured at Amortised Cost - - - - - - Investments in Equity Instruments Designated at Fair Value Through Other Comprehensive Income - - - - - - Financial Assets Measured at Fair Value Through Other Comprehensive Income - - - - - - Financial Liabilities Measured at Amortised Cost - - - - - - Total Net Gains/Losses - - - - - - Interest Revenue Financial Assets Measured at Amortised Cost 3,711 - 3,711 8,922 - 8,922 Other Financial Assets Measured at Fair Value Through Other Comprehensive Income - - - - Total Interest Revenue 3,711 - 3,711 8,922 - 8,922 Interest Expense (38,921) - (38,921) (39,065) - (39,065) Fee Income Financial Assets or Financial Liabilities that are not at Fair Value Through Profit and Loss - - - - - - Trust and Other Fiduciary Activities - - - - - - Total Fee Income - - - - - - Fee Expense Financial Assets or Financial Liabilities that are not at Fair Value Through Profit and Loss - - - - - - Trust and Other Fiduciary Activities - - - - - - Total Fee Expense - - - - - - 159
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92 Fair Value of Financial Assets There are no financial assets held at fair value. Transfers Between Levels of the Fair Value Hierarchy There were no transfers between input levels 1 and 2 during the year. Changes in the Valuation Technique There has been no change in the valuation technique used during the year for the financial instruments. The Fair Values of Financial Assets and Financial Liabilities that are not Measured at Fair Value (but for which Fair Value Disclosures are Required) All financial assets and liabilities held by the authority are carried in the Balance Sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that take place over the remaining life of the instruments, using the following assumptions: ■ For loans from the Public Works Loans Board (PWLB), premature repayment rates from the PWLB have been applied to provide the fair value under PWLB debt redemption procedures. ■ For non PWLB loans, premature repayment rates from the PWLB have been applied to provide the fair value under PWLB debt redemption procedures. ■ Where an instrument has a maturity of less than 12 months the fair value is taken to be the principal outstanding. The fair values calculated are as follows: 2024/25 2024/25 2023/24 2023/24 Carrying Amount £000 Fair Value £000 Carrying Amount £000 Fair Value £000 Financial Liabilities Financial Liabilities held at amortised cost: PWLB Debt (980,907) (949,737) (1,015,254) (1,030,666) Financial Liabilities held at amortised cost: Non PWLB Debt (58,926) (59,501) (28,603) (29,227) PFI and Finance Lease Liabilities (299,814) (299,814) (172,036) (193,183) Total Financial Liabilities (1,339,647) (1,309,052) (1,215,893) (1,253,076) Financial Assets Financial Assets held at amortised cost 23,836 23,836 13,784 13,784 Total Financial Assets 23,836 23,836 13,784 13,784 The fair value of the liabilities is greater than the carrying amount because the Council’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the rates available for similar loans in the market at the balance sheet date. This shows a notional future loss (based on economic conditions at 31 March 2025) arising from a commitment to pay interest to lenders above current market rates. The fair value of Public Works Loan Board (PWLB) loans of £949.737m measures the economic effect of the terms agreed with the PWLB compared with estimates of the terms that would be offered for market transactions undertaken at the Balance Sheet date, which has been assumed as the PWLB redemption interest rates. The difference between the carrying amount and the fair value measures the additional interest that the Council will pay over the remaining terms of the loans under the agreements with the PWLB, against what would be paid if the loans were at prevailing market rates. However, the authority has a continuing ability to borrow at concessionary rates from the PWLB rather than from the markets, termed the PWLB Certainty interest rates. A supplementary measure of the fair value as a result of its PWLB commitments for fixed rate loans is to compare the terms of these loans with the new borrowing rates available from the PWLB. If a value is calculated on this basis, the carrying amount of £980.907m would be valued at £889.479m. But, if the authority were to seek to avoid the projected loss by repaying the loans to the PWLB, the PWLB would raise a penalty charge, based on the redemption interest rates, for early redemption of £31.170m for the additional interest that will not now be paid. The exit price for the PWLB loans including the penalty charge would be £949.737m. 160
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93 Fair Value Hierarchy for Financial Assets and Financial Liabilities that are not Measured at Fair Value as at 31 March 2025: Recurring fair value measurements using: Quoted Prices in Active Markets for Identical Assets (Level 1) £000 Other Significant Observable Inputs (Level 2) £000 Significant Unobservable Inputs (Level 3) £000 Total £000 Financial Liabilities Financial Liabilities held at amortised cost: PWLB Debt - (949,737) - (949,737) Financial Liabilities held at amortised cost: Non PWLB Debt - (59,501) - (59,501) PFI and Finance Lease Liabilities - (299,814) - (299,814) Financial Assets Financial Assets held at amortised cost 23,836 - - 23,836 Total Assets / Liabilities 23,836 (1,309,052) - (1,285,216) Fair Value Hierarchy for Financial Assets and Financial Liabilities that are not Measured at Fair Value as at 31 March 2024: Recurring fair value measurements using: Quoted Prices in Active Markets for Identical Assets (Level 1) £000 Other Significant Observable Inputs (Level 2) £000 Significant Unobservable Inputs (Level 3) £000 Total £000 Financial Liabilities Financial Liabilities held at amortised cost: PWLB Debt - (1,030,752) - (1,030,752) Financial Liabilities held at amortised cost: Non PWLB Debt - (29,228) - (29,228) PFI and Finance Lease Liabilities - (193,183) - (193,183) - (1,253,163) - (1,253,163) Financial Assets Financial Assets held at amortised cost 13,784 - - 13,784 Total Assets / Liabilities 13,784 (1,253,163) - (1,239,379) Note 33 Disclosure of Nature and Extent of Risks Arising From Financial Instruments Key Risks The council’s activities expose it to a variety of financial risks: ■ Credit Risk – the possibility that other parties might fail to pay amounts due to the council ■ Liquidity Risk – the possibility that the council might not have funds available to meet its commitments to make payments ■ Refinancing Risk – the possibility that the council might be required to renew a financial instrument on maturity at disadvantageous interest rates or terms ■ Market Risk – the possibility that financial loss might arise for the council as a result of changes in such measures as interest rates or stock market movements. 161
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94 Overall Procedures for Managing Risk The procedures for risk management are set out through a legal framework set out in the Local Government (Scotland) Act 2003 and the associated regulations. These require the council to comply with the CIPFA Prudential Code and the CIPFA Treasury Management in the Public Services Code of Practice. Overall these procedures require the Council to manage risk in the following ways: ■ by approving an investment strategy for the forthcoming year setting out its criteria for both investing and selecting investment counterparties; ■ by formally adopting the requirements of the Code of Practice; ■ by approving annually in advance prudential indicators for the following three years limiting: � The council’s overall borrowing � Its maximum and minimum exposures to fixed and variable rates � Its maximum and minimum exposures of the maturity structure of its debt � Its maximum annual exposures to investments maturing beyond a year These are required to be reported and approved at, or before, the council’s annual Council Tax budget setting. These items are reported within the Annual Treasury Management Strategy which outlines the detailed approach to managing risk in relation to the council’s financial instrument exposure. Actual performance is also reported quarterly to Members. These polices are implemented by a central treasury team. The council maintains written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and the investment of surplus cash through Treasury Management Practices (TMPs). Nature and Extent of Risks – Credit Risk Credit Risk Credit Risk arises from deposits with banks and financial institutions, as well as credit exposures to the council’s customers The council manages this risk by ensuring that investments are placed with the Debt Management Office, other local authorities or Banks and Building Societies having sufficiently high credit worthiness as set out in the Treasury Management Strategy. The table below summarises the nominal value of the Council’s investment portfolio at the end of 31 March 2025 into the relative credit ratings. Balance Invested as at 31 March 2025 Counterparty/Country Long Term Rating (Fitch) Up to 1 month £000 Greater than 1 month and up to 3 months £000 Greater than 3 months and up to 6 months £000 Greater than 6 months and up to 9 months £000 Greater than 9 months and up to 12 months £000 Greater than 12 months £000 Total £000 Debt Management Office AA- 5,901 - - - - - 5,901 Total UK Government 5,901 - - - - - 5,901 Local Authorities NR* 10,006 - - - - - 10,006 Total UK Local Authorities 10,006 - - - - - 10,006 Bank of Scotland AA- 7,683 - - - - - 7,683 The Royal Bank of Scotland A+ 246 - - - - - 246 Total UK Banks 7,929 - - - - - 7,929 Total 23,836 - - - - - 23,836 *NR = Not Rated The Ratings are as at 31 March 2025 and are intended to provide an indication of credit risk. These are not necessarily the ratings of institutions at the time deposits were placed. The Ratings above are from Fitch ratings. The Long-Term Rating is the benchmark measure of probability of default. 162
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95 Amounts Arising from Expected Credit Losses The council’s investments have been assessed and it has been concluded that the expected credit loss is not material and therefore no allowances have been made. The following analysis summarises the council’s potential maximum exposure to credit risk on the level of default on debtors. 2024/25 £000 Bad Debt Provision £000 2023/24 £000 Bad Debt Provision £000 Debtors 82,003 (7,961) 79,754 (6,049) The Debtors figure above does not include debtors for Council Tax, Non-Domestic Rates and Council House Rents as these are not considered to be financial assets. Of the gross Debtors figure included in the note, £20.109m (2023/2024: £14.504m) is considered to be past its date for payment. This past due amount can be analysed by age as follows: 2024/25 £000 2023/24 £000 Less than three months 11,251 7,998 Three to six months 1,790 1,359 Six months to one year 915 1,084 More than one year 6,153 4,063 Total 20,109 14,504 Nature and Extent of Risks – Liquidity Risk Liquidity Risk As the council has ready access to borrowings from the Public Works Loans Board, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments. There may be a risk that the council will be bound to replenish a significant proportion of its borrowings at a time of unfavourable interest rates. The approved prudential indicator sets limits on the maturity structure of debt, and the council’s approved treasury and investment strategies address the main risks, and the central Treasury team address the operational risks within the approved parameters. This includes: ■ Monitoring the maturity profile of financial liabilities and amending the profile through either new borrowing or the rescheduling of existing debt. ■ Monitoring the maturity profile of investments to ensure sufficient liquidity is available for the Council’s day to day cash flow requirements. The maturity analysis of financial liabilities is as follows: 2024/25 £000 2023/24 £000 Less than one year 179,224 63,096 Between one and two years 70,115 120,153 Between two and five years 213,468 211,558 More than five years 577,026 649,051 Total 1,039,833 1,043,858 All trade and other payables are due to be paid in less than one year. 163
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96 Nature and Extent of Risks – Market Risk Interest Rate Risk The council is exposed to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the council. For instance, a rise in interest rates would have the following effects: ■ borrowings at variable rates – the interest expense charged to the Comprehensive Income and Expenditure Statement will rise ■ borrowings at fixed rates – the fair value of the liabilities borrowings will fall ■ investments at variable rates – the interest income credited to the Comprehensive Income and Expenditure Statement will rise ■ investments at fixed rates – the fair value of the assets will fall Borrowings are not carried at fair value on the balance sheet, so nominal gains and losses on fixed rate borrowings would not impact on the surplus or deficit on the provision of services or other comprehensive income and expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the surplus or deficit on the provision of services and affect the General Fund balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in the other comprehensive income and expenditure. The council has a number of strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the council’s prudential indicators and its expected treasury operations, including an expectation of interest rate movements. From this Strategy a prudential indicator is set which provides maximum and minimum limits for fixed and variable interest rate exposure. The central Treasury team will monitor market and forecast interest rates within the year to adjust exposures appropriately. A sensitivity analysis has been carried out to assess the financial effect of a 1% variance in interest rates as suggested in the Code Guidance Notes 2024/2025. If all interest rates had been 1% higher (with all other variables held constant) the financial effect would be: £000 Increase in interest payable on variable rate borrowings 85 Increase in interest receivable on variable rate investments 751 Impact on Comprehensive Income and Expenditure Statement 836 Share of overall impact credited to the HRA 205 Decrease in fair value of fixed rate investment assets 0 Impact on Comprehensive Income and Expenditure Statement 0 Decrease in fair value of fixed rate borrowing liabilities (no impact on Comprehensive Income and Expenditure Statement) (64,524) The approximate impact of a 1% fall in interest rates would be as above but with the movements being reversed. These assumptions are based on the same methodology as used in the Note – Fair Value of Assets and Liabilities carried at Amortised Cost. Price Risk The council does not invest in equity shares and is therefore not exposed to losses arising from movements in the price of shares. Foreign Exchange Risk The Council has no financial assets or liabilities denominated in foreign currencies. It therefore, has no exposure to loss arising from movements in exchange rates. 164
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97 Note 34 Common Good Common Good funds are for the benefit of the geographical areas of the former burghs and the council’s Finance and Corporate Resources Committee considers the uses to which funds can be put. Summary of Common Good Funds 2023/24 Total £000 Lanark £000 Biggar £000 Hamilton £000 Rutherglen £000 2024/25 Total £000 Income and Expenditure Accounts 286 Income for Year 740 1 253 6 1,000 (200) Expenditure for Year (714) - (96) (1) (811) 86 Surplus / (Deficit) To Balance Sheet 26 1 157 5 189 Balance Sheet Fixed Assets 3,261 Property, Plant and Equipment 1,659 - 1,517 - 3,176 Investments - General - - - - - 1,024 Advances to South Lanarkshire Council Loans Fund 318 26 775 133 1,252 - Debtors - - - - - 4,285 Total Assets 1,977 26 2,292 133 4,428 Current Liabilities (18) Creditors 4,267 Total Assets less Current Liabilities 1,973 26 2,275 133 4,407 Represented by: 2,787 Common Good Account 1,207 25 1,526 128 2,886 86 Surplus / (Deficit) 26 1 156 5 188 12 Amortisation of Revaluation Reserve 6 - 8 - 14 - Gain / Loss on Disposal of Fixed Assets (58) - - - (58) 2,885 1,181 26 1,690 133 3,030 Revaluation Reserve 1,097 Opening Balance 790 - 593 - 1,383 297 Gain / Loss on Revaluation 8 - - - 8 (12) Amortisation of Revaluation Reserve (6) - (8) - (14) 1,382 Closing Balance 792 - 585 - 1,377 4,267 1,973 26 2,275 133 4,407 165
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98 Note 35 Trust Funds The Council administers a total of 3 Trust Funds, all of which are historically significant and some of which are financially significant. The most significant fund is the Loudon Bequest (shown within the Social Work section) which is used to finance holiday projects for elderly people. The balance of the fund as at 31 March 2024 was £0.814m. The Education Trust balances were transferred to the new South Lanarkshire Council Educational Trust during 2022/23. Those Trust Funds shown under Charitable trusts held by the previous District Councils and are used to provide financial assistance to organisations and individuals that meet the terms set by the specific funds. A report is made to the Finance and Corporate Resources Committee after the year end detailing the expenditure made from each fund and the balance remaining within the fund. The governance arrangements are considered and reviewed by the Council. These Trust Funds do not represent assets of the Council and as a result are not included in the Council's Balance Sheet. The individual funds have not been subject to a separate audit or audit opinion, however, they have been considered in overall terms, in the context of those materiality levels which apply to the Council's Financial Statements. Summary of Trust Funds 2022/23 Total £000 Charitable £000 The South Lanarkshire Charitable Trust £000 The South Lanarkshire Educational Trust £000 2023/24 Total £000 Note Income and Expenditure Account 49 Income for Year 35 5 5 45 (17) Expenditure for Year (4) (13) (13) (30) (32) Surplus / (Deficit) to Balance Sheet 31 (8) (8) 15 Balance Sheet 830 Investments - General 814 10 - 824 363 Investments - South Lanarkshire Council 176 104 100 380 1,193 Net Assets 990 114 100 1,204 Represented by: 832 Capital Account as at 1/4/2023 817 10 - 827 (2) Movement During Year (3) - - (3) 1 830 Capital Account as at 31/3/2024 814 10 - 824 331 Revenue Account as at 1/4/2023 144 111 108 363 32 Movement During Year 32 (7) (8) 17 2 363 Revenue Account as at 31/3/2024 176 104 100 380 1,193 Total Reserves 990 114 100 1,204 Note 1 The movement on the Capital Account represents the net purchase and sale of investments on the Loudon Bequest during the year, and the transfer of balances to the new South Lanarkshire Trusts. Note 2 The movement on the Revenue Account represents the income and expenditure of the trust fund. 166
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99 Note 36 Accounting Policies A General Principles The Annual Accounts summarise the council’s transactions for the 2024/2025 financial year and its position at the year-end of 31 March 2025. The council is required to prepare Annual Accounts by the Local Authority Accounts (Scotland) Regulations 2014, which section 12 of the Local Government in Scotland Act 2003 requires to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2024/2025, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2003 Act. The accounting convention adopted in the Annual Accounts is principally historical cost, modified by the revaluation of certain categories of non-current assets and financial instruments. The accounting policies have been applied consistently. B Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular: ■ Revenue from contracts is recognised reflecting the transfer of goods or services to the recipient at the amount which the council expects to be entitled to in exchange for those goods or services. ■ Other revenue is recognised when the council can measure reliably the percentage of completion of the transaction and it is probable that economic benefits or service potential associated with the transaction will flow to the council. ■ Supplies are recorded as expenditure when they are consumed – where there is a difference between the date supplies are received and their consumption, they are carried as stock on the council’s Balance Sheet. ■ Expenses in relation to services received are recorded as expenditure when the services are received, rather than when payments are made. ■ The Corporate i-Procurement system operates across the council’s service areas. For all purchases made via the i-Procurement system, sundry creditors were accrued on the basis of all goods and services received by 31 March 2025, regardless of value and materiality. During the financial year, period end accruals have also been made on a similar period by period basis. For any residual purchases, not made via the i- Procurement System sundry creditors are accrued on the basis of payments made during the first 3 weeks of April, together with specific accruals in respect of further material items. ■ Interest payable on borrowings and receivable on investments is accounted for respectively as expenditure and income on the basis of the effective interest rate for the relevant financial instrument rather than the cash flows fixed or determined by the contract. ■ Where revenue and expenditure have been recognised but cash has not yet been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. ■ Where revenue relating to a contract has been recognised but cash has not yet been received, this is recorded in the Balance Sheet as a contract asset. ■ Where cash relating to a contract has been received in advance of the transfer of goods or services, this is recorded in the Balance Sheet as a contract liability. ■ Where there is evidence that debts are unlikely to be settled, the balance of debtors is written down and a charge made to revenue for the income that might not be collected. Where the council is acting as an agent for another party (for example in the collection of National Non- Domestic Rates and Council Tax), income and expenditure are recognised only to the extent that commission is receivable by the council for the agency services rendered or the council incurs expenses directly on its own behalf in rendering the services. C Cash and Cash Equivalents Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in three months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the council’s cash management. D Charges to Revenue for Non- Current Assets Services are debited or credited with the following amounts to record the cost of holding non-current assets during the year: ■ depreciation attributable to the assets used by the relevant service ■ revaluation and impairment losses on assets used by the service where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off ■ amortisation of intangible fixed assets attributable to the service ■ the reversal of a revaluation or impairment loss previously charged to the Surplus or Deficit on the Provision of Services. The council is not required to raise Council Tax to cover depreciation, revaluation and impairment losses or amortisation. However, it is required to contribute towards the reduction in its overall borrowing requirement through loans fund principal charges. Depreciation, revaluation and impairment losses and amortisations are therefore replaced by a statutory adjustment in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two. E Employee Benefits Benefits Payable During Employment 167
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100 Short-term employee benefits (those that fall due wholly within 12 months of the year-end), such as wages and salaries, paid annual leave and paid sick leave and any non-monetary benefits for current employees, are recognised as an expense in the year in which employees render service to the council. An accrual is made against services in the Surplus or Deficit on the Provision of Services for the cost of holiday entitlements earned by employees but not taken before the year-end and which employees can carry forward into the next financial year. Any accrual made is required under statute to be reversed out of the General Fund Balance by a debit / credit to the Accumulating Compensated Absences Account in the Movement in Reserves Statement. In February 2018, the Scottish Government issued Financial Circular 2/2018 (replacing FC 3/2010), that amends the absences covered by the statutory mitigation. From 1 April 2018, the flexi and time in lieu absences are no longer covered by the statute and therefore cannot be reversed out. In terms of the teachers Statutory Accumulated Compensated Absences, the methodology for 2024/2025 reflects the changes to teachers’ terms and conditions as per SCNT 11/26 (12 July 2011). Termination Benefits Termination benefits are amounts payable as a result of a decision by the council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy and are charged on an accruals basis to the Comprehensive Income and Expenditure Statement when the council is demonstrably committed to either terminating the employment of an officer or group of officers or making an offer to encourage voluntary redundancy. Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund Balance to be charged with the amount payable by the council to the pension fund or pensioner in the year. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for termination benefits related to pensions enhancements and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year end. Post Employment Benefits Employees of the council are members of two separate pension schemes: ■ The Local Government Pension Scheme (Strathclyde Pension Fund), administered by Glasgow City Council. ■ Teachers Pension Scheme administered by the Scottish Pension Agency (Scottish Government). Both schemes provided defined benefits to members (retirement lump sums and pensions), earned as employees worked for the council. However, the arrangements for the teachers’ scheme mean that liabilities for these benefits cannot be identified specifically to the council. The scheme is therefore accounted for as if it were a defined contributions scheme – no liability for future payment of benefits is recognised in the Balance Sheet and the Education Service line in the Comprehensive Income and Expenditure Statement is charged with the employer’s contributions payable to Teachers’ Pensions in the year. The Local Government Pension Scheme The Local Government Scheme is accounted for as a defined benefits scheme: ■ The liabilities of the Strathclyde Pension Fund are included in the Balance Sheet on an actuarial basis using the projected unit method – that is an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees, based on assumptions about mortality rates, employee turnover rates, etc, and projected earnings for current employees. ■ Liabilities are discounted to their value at current prices, using a discount rate based on an average of high-quality corporate bonds. ■ Assets of the Strathclyde Pension Fund are ordinarily included in the Balance Sheet at their fair value (current bid prices as required under IAS19), principally the bid price for quoted securities, estimated fair value for unquoted securities and market price for property. However, while the requirements of IAS19 have been applied in the current year, the significant nature of the Asset has been reviewed, and in line with IFRIC14, the asset has been de-recognised to equate to the level of the asset ceiling, provided by the Fund’s actuary. This reflects the net present value of future service costs less the net present value of future obligations over the future working lifetime as at 31 March 2025. In relation to retirement benefits, statutory provisions require the General Fund Balance to be charged with the amount payable by the council to the pension fund or directly to pensioners in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are appropriations to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year end. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact on the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits are earned by employees. Discretionary Benefits The council also has restricted powers to make discretionary awards of retirement benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any member of staff (including teachers) are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme. F Events After the Reporting Period There are events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Annual Accounts is authorised for issue. An adjustment is made to the financial statements where there is evidence that the event relates to the reporting period, otherwise the financial statements are not adjusted, and where the amount is material, a disclosure is made in the notes. Events taking place after the date of authorisation for issue are not reflected in the Annual Accounts. G Material Items of Income and Expenditure When items of income and expenditure are material, their nature and amount is disclosed separately, either on the face of the Comprehensive Income and Expenditure Statement or in the notes to the financial statements, depending on how significant the items are to an understanding of the council’s financial performance. H Financial Liabilities Financial liabilities are recognised on the Balance Sheet when the council becomes a party to the contractual provisions of a 168
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101 financial instrument and initially measured at fair value and carried at their amortised cost. For most of the borrowings that the council has, this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest) and interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement. Costs associated with debt restructuring (premiums and discounts) are charged to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement in the year of repayment of the original debt in accordance with accounting regulations. Where premiums and discounts have been charged to the Comprehensive Income and Expenditure Statement, regulations permit the costs of restructuring to be released to revenue over the period of the replacement loan. The reconciliation of amounts charged to the Comprehensive Income and Expenditure Statement to the net charge required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. I Statutory Repayment of Loans Fund Advances The repayment of loans fund advances ensures that the council makes a prudent provision each year to pay off an element of the accumulated loans fund advances made in previous financial years. The policy for the repayment of loans fund advances is to use the most appropriate method of repayment for individual capital scheme or projects from the following methods: ■ Asset Life Method – loans fund advances will be repaid with reference to the life of an asset on an annuity basis. ■ Funding/Income Profile Method – loans fund advances will be repaid by reference to an associated income stream. For loans fund advances repaid using the annuity basis, the annual repayment will be calculated using an appropriate interest rate based on an average cost of funding capital advances to services. The council’s strategy for managing debt includes making additional voluntary repayments. These repayments will be used as a tool to reduce interest costs in the short to medium term by lowering the council’s need to borrow. These additional voluntary repayments will be retained and used to offset higher loans fund repayments in the long term. All of this helps to ensure that charges to the revenue account remain prudent and affordable in the long term. J Financial Assets Financial assets are classified into two types: ■ loans and receivables – assets that have fixed or determinable payments but are not quoted in an active market. ■ available-for-sale assets – assets that have a quoted market price and/or do not have fixed or determinable payments. Loans and Receivables Loans and receivables are recognised on the Balance Sheet when the council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value, then at amortised cost. For most of the loans that the council has made, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement. Where assets are identified as impaired because of a likelihood arising from a past event that payments due under the contract will not be made, the asset is written down and a charge made to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The impairment loss is measured as the difference between the carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. Available-for-Sale Assets Available for sale assets are assets that have a quoted market price and / or do not have fixed or determinable payments and are recognised on the Balance Sheet when the council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Where the asset has fixed or determinable payments, annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the amortised cost of the asset multiplied by the effective rate of interest for the instrument. Where there are no fixed or determinable payments, income (e.g. dividends) is credited to the Comprehensive Income and Expenditure Statement when it becomes receivable by the council. Assets are maintained in the Balance Sheet at fair value. Values are based on the following principles: ■ instruments with quoted market prices – the market price ■ other instruments with fixed and determinable payments – discounted cash flow analysis ■ equity shares with no quoted market prices – independent appraisal of company valuations. The inputs to the measurement techniques are categorised in accordance with the following three levels: ■ Level 1 inputs – quoted prices (unadjusted) in active markets for identical assets that the authority can access at the measurement date. ■ Level 2 inputs – inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. ■ Level 3 inputs – unobservable inputs for the asset. Changes in fair value are balanced by an entry in the Available-for-Sale Reserve and the gain/loss is recognised in the Surplus or Deficit on Revaluation of Available-for-Sale Financial Assets. The exception is where impairment losses have been incurred – these are debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, along with any net gain or loss for the asset accumulated in the Available-for-Sale Reserve. K Government Grants and Contributions Government grants, third party contributions and donations are recognised as due to the council when there is reasonable assurance that: ■ the council will comply with the conditions attached to the payments, and ■ the grants or contributions will be received 169
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102 Monies advanced as grants and contributions for which conditions have not been satisfied are carried in the Balance Sheet as Receipts in Advance. When conditions are satisfied, the grant or contribution is credited to the relevant service line (attributable revenue grants/contributions) or Taxation and Non- Specific Grant Income (non-ring-fenced revenue grants and all capital grants) in the Comprehensive Income and Expenditure Statement. Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants Unapplied Account. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied Account are transferred to the Capital Adjustment Account once they have been applied. L Intangible Assets Expenditure on non-monetary assets that do not have physical substance but are controlled by the council as a result of past events (for example, software licences) is capitalised when it is expected that it will bring benefits to the council for more than 12 months. Intangible assets are measured initially at cost. Amounts are not revalued as the fair value of the assets held cannot be determined by reference to an active market. The depreciable amount of an intangible asset is amortised over its useful life to the relevant service line(s) in the Comprehensive Income and Expenditure Statement. The useful life of these assets is deemed to be five years. M Interests in Companies and Other Entities The council has material interests in companies and other entities that have the nature of associates and jointly controlled entities and require it to prepare group accounts. More information about these entities is detailed in the Group Accounts and Notes to the Group Accounts (pages 111-123). N Inventories Inventories are included in the Balance Sheet at the lower of cost and net realisable value. The value of work in progress has been made at cost plus an appropriate proportion of overheads, with allowances for foreseeable losses. O Leases The Council adopted IFRS 16 (Leases) with effect from 1 April 2024. The main impact of the requirements of IFRS 16 is that, for arrangements previously accounted for as operating leases (where any leased equipment and property were not recognised as an asset, and future rents were not recognised as a liability), a right-of-use asset and a lease liability are now included on the balance sheet from 1 April 2024. The Council has elected to apply recognition exemptions to low value assets (below £10,000 when new) and to short-term leases (existing leases that expire on or before 31 March 2025), and new leases with a duration of less than 12 months. A contract is, or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases. P Overheads and Support Services The 2016/2017 Code removed the requirement for councils to report on a total cost basis per the CIPFA Service Reporting Code of Practice. Councils are only required to reallocate overheads and support costs if this is how they treat/report these services in their management reports throughout the year. The council reports these as services during the year and does not allocate them in the management reports, therefore the only overhead and support allocation will be to the Housing Revenue Account, where appropriate. Q Property, Plant and Equipment Assets that have physical substance and are held for use in the supply of goods or services, for rental to others or for administrative purposes and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment. Recognition Expenditure on the acquisition, creation or enhancement of Property, Plant and Equipment is capitalised on an accruals basis. Expenditure that merely maintains the condition of an asset e.g. repairs and maintenance is charged as an expense when it is incurred. Measurement Assets are initially measured at cost, comprising: the purchase price any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management The council does not capitalise borrowing costs incurred whilst assets are under construction. Assets are then carried in the Balance Sheet using the following measurement bases: dwellings – current value, determined using the basis of existing use value for social housing (EUV-SH) other land and buildings – current value, determined by the amount that would be paid for the asset in its existing use (existing use value – EUV) vehicles, plant and equipment – where non- property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for current value infrastructure, community assets and assets under construction – depreciated historical cost surplus assets – current value based on market value in highest and best use. Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost is used as an estimate of fair value. Council Dwellings and non-operational lease portfolio are valued annually. The remainder of the land and property assets are valued through a five year rolling programme. The programme is prioritised by asset type to ensure consistency. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Where decreases in value are identified, the revaluation loss is accounted for as follows: where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount 170
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103 of the asset is written down against that balance (up to the amount of the accumulated gains) where there is no balance in the Revaluation Reserve or insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement. The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. The values for land and property assets in the accounts are based upon certificates produced by the council valuer who is MRICS qualified (Member of Royal Institute of Chartered Surveyors) and issued in the name of the council’s Executive Director of Housing and Technical Resources. Impairment or Revaluation Loss Assets are assessed at each year end as to whether there is any indication that an asset may be impaired. Where indications of impairment exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall. Where impairment losses are identified, they are accounted for as follows: ■ where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains). ■ where there is no balance in the Revaluation Reserve or insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement. Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. Assets Held for Sale Property, land and buildings are classified as ‘Held for Sale’ when the following criteria are met: ■ The property is available for immediate sale in its present condition; ■ The sale must be highly probable and an active programme to locate a buyer and complete the plan must have been initiated; ■ The asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value; ■ The sale should be expected to qualify for recognition as a completed sale within one year (although events or circumstances, may extend the period to complete the sale beyond one year) When these criteria are met, assets within the category ‘Property, Plant and Equipment’ will be reclassified to ‘Assets Held for Sale’. Disposals When it becomes probable that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset is revalued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value costs to sell, the loss is taken to the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previously recognised losses in the Surplus or Deficit in Provision of Services. Disposal and Derecognition of Infrastructure Assets When a component of an infrastructure asset is disposed of or decommissioned, the carrying amount of the component in the Balance Sheet is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement, also as part of the gain or loss on disposal (i.e, netted off against the carrying value of the asset at the time of the disposal). The written-off amounts of disposals is not a charge against the council tax, as the cost of non-current assets is fully provided for under separate arrangements for capital financing. Amounts are transferred to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement. Where any part of infrastructure assets are replaced, an adaptation provided in a separate update to the Code assumes that from the introduction of the IFRS based Code when parts of an asset are replaced or restored the carrying amount of the derecognised part will be zero because parts of infrastructure assets are rarely replaced before the part has been fully consumed. Depreciation Depreciation is provided for on all Property, Plant and Equipment assets. An exception is made for assets without a determinable finite useful life (that is freehold land and certain Community Assets) and assets that are not yet available for use (i.e. assets under construction). Depreciation is calculated on the following bases: ■ dwellings and other buildings – straight-line allocation over the useful life of the property as estimated by the valuer (dwellings 40 years, other buildings 10 – 50 years). ■ vehicles, plant and equipment – straight line allocation over the useful life of the asset (3 – 20 years). ■ infrastructure – straight line allocation over 40 years. Where an item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately, if the component has a different useful life or depreciation method that differs significantly from the remainder of the asset. Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account. R Heritage Assets South Lanarkshire Council’s heritage assets comprise collections held within the Museum Service, Archives and Information Service and the Library Service. 171
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104 These collections reflect different aspects of our culture, identity and history. Heritage Assets, where the cost or value of the asset are known, are recognised on the balance sheet at valuation and no depreciation is charged on these assets. A de-minimis level of £10,000 has been applied. Assets which have a value of less than £10,000 will not be recorded on the Balance Sheet. Heritage assets will only be revalued where there is specific evidence that a revaluation is required and where the costs of the revaluation do not outweigh the benefit to users of the Annual Accounts. The carrying amounts of heritage assets are reviewed where there is evidence of impairment, for example where doubts arise as to its authenticity. Any impairment is recognised and measured in accordance with the council’s general policies on impairment. As a result of the cultural and education value of these assets, disposals of heritage assets tend to be rare. The proceeds of such disposals are accounted for in accordance with the council’s general provisions relating to the disposal of property plant and equipment and disclosed separately in the Notes to the Accounts. S Public Private Partnership (PPP) and Similar Contracts PPP and similar contracts are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passed to the PPP contractor. As the council is deemed to control the services that are provided under its PPP schemes and as ownership of the property, plant and equipment will pass to the council at the end of the contracts for no additional charge, the council carries the assets used under the contracts on its Balance Sheet as part of Property, Plant and Equipment. The original recognition of these assets at fair value (based on the cost to purchase the property, plant and equipment) was balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment. For Secondary Schools’ Modernisation Programme – Public Private Partnership (PPP), the liability was written down by an initial capital contribution of £48.050m. The amounts payable to the PPP operators each year are analysed into five elements: fair value of the services received during the year – debited to the relevant service in the Comprehensive Income and Expenditure Statement. finance cost – an interest charge is debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. contingent rent – increases in the amount to be paid for the property arising during the contract, debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. payment towards liability – applied to write down the Balance Sheet liability towards the PPP operator (the profile of write-downs is calculated using the same principles as for a finance lease). lifecycle replacement costs – there have been no lifecycle costs to date. The Scottish Government’s 2022 Resource Spending Review contained details of a Service Concession flexibility that related to the Council’s PPP schools. The flexibility permits councils to undertake internal accounting changes that extend the period over which the principal repayment of the unitary charge can be made which results in a one-off credit to the General Fund and ongoing annual savings for a period of time. In the remaining years following the end of the SCAs, the rescheduled debt repayments continue until the debt liability has been extinguished. The Council has applied the permitted change in the calculation of the statutory charge in 2024/25 and the adopted approach has been applied across all three such arrangements held by the Council in line with the key accounting principle of consistency. The annual unitary charge will continue to be paid to the contractor over the contract period. The guidance applies to principal and not to interest, service charge costs or grant. These will continue to be accounted for over the contract period. The Council has applied the permitted change in 2024/2025 and has been applied to the Secondary Schools PPP and the Glasgow Southern Orbital financial arrangement. Annuity method for revised repayment of debt liability The recalculation of the debt liability charges applies the annuity method to calculate the revised repayments. This method best represents the consumption of the assets over their useful lives. This methodology is applied within the Councils current Loans Fund repayment policy. The use of an annuity method for the writing down of the PPP debt liability therefore ensures a consistent approach for the writing down of all debt which is financing capital expenditure, in that; The annuity method provides a fairer charge than equal instalments as it takes account of the time value of money, whereby paying £100 in 10 years’ time is less of a burden than paying £100 now. The schedule of charges produced by the annuity method thus results in a consistent charge over an asset’s life, considering the real value of the amounts when they fall due. The annuity method is a prudent basis for providing for assets that provided a steady flow of benefits over their useful life.’ Useful Economic Life The most appropriate asset life for the calculation is considered to be 50 years which replicates the useful asset life of other similar type assets held on the Council’s balance sheet i.e. schools. The Council’s Loans Fund methodology use a Useful Economic Life of 50 years when calculating the repayment of debt liability for borrowing to support capital expenditure for similar types of assets. The proposed application a useful economic life of 50 years for the council’s 2 PPP or similar arrangement is therefore considered consistent with current council methodology. Capital Financing Requirement The reprofiling of the debt liability repayments over the life of the asset rather than the life of the contract increases the Capital Financing Requirement as at 1 April 2022. The increase in the Capital Financing Requirement will continue to be reduced by the revised repayments after each PPP or similar contract has expired until the end of the revised period. Accounting Treatment The statutory adjustment can be made as at 1 April in the year the revised repayments are applied. This option was implemented in 2022/2023 and applied retrospectively. Being a cumulative statutory adjustment there was no prior year restatement of statutory adjustments in the Annual Accounts. The statutory adjustment up to 31 March 2022 resulted in a retrospective debit to the Capital Adjustment account in 2022/2023 with a corresponding credit in the Movement in Reserves Statement 172
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105 within the General Fund. Further in year annual reductions will be applied along similar lines as the retrospective adjustment until the end of the contract period for each of the three SCAs. Thereafter the revised charges will result in higher cost being charged to the General fund that the current repayment profile until the end of the Useful Economic Life. T Provisions, Contingent Liabilities and Contingent Assets Provisions Provisions are made where an event has taken place that gives the council a legal or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential, and a reliable estimate can be made of the amount of the obligation. Provisions are charged as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year that the council becomes aware of the obligation, and measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet. Estimated settlements are reviewed at the end of each financial year – where it becomes less than probable that a transfer of economic benefits will now be required (or a lower settlement than anticipated is made), the provision is reversed and credited back to the relevant service. Contingent Assets and Liabilities A contingent asset or liability arises where an event has taken place that gives the council a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the council. Contingent assets and liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. Contingent assets and liabilities are not recognised in the Balance Sheet but disclosed in a Note to the Accounts. U Reserves Reserves are created by appropriating amounts out of the General Fund Balance in the Movement in Reserves Statement. When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against council tax for the expenditure. Usable Reserves The council has several reserve funds within this category. The Insurance Fund covers the main classes of insurance and is earmarked for insurance purposes. The Repairs and Renewals Fund provides for the upkeep of specific assets held by the council. The Capital Fund is used to meet the costs of capital investment and for the repayment of the principal element of borrowing. Unusable Reserves Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments and retirement benefits and that do not represent usable resources for the council. These reserves are explained in Note 13 on pages 66- 68. V Revenue Expenditure Funded from Capital under Statute Any expenditure incurred during the year that may be capitalised under statutory provisions but does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the Comprehensive Income and Expenditure Statement in the year. Where the council has determined to meet the cost of this expenditure from existing capital resources or by borrowing, a transfer is made in the Movement in Reserves Statement from the General Fund Balance to the Capital Adjustment Account, then reverses out the amount charged so that there is no impact on the level of council tax. W VAT VAT payable is included as an expense only to the extent that it is not recoverable from His Majesty’s Revenue and Customs. VAT receivable is excluded from income. 173
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106 Note 37 Critical Judgements in Applying Accounting Policies In applying the accounting policies set out in Note 36, the council has had to make certain judgments about complex transactions or those involving uncertainty about future events. The critical judgements made in the Annual Accounts are: ■ The council has entered into a Public Private Partnership (PPP) for the provision of secondary schools, their maintenance and related facilities. The annual unitary charge payable by the council in respect of this contract is allocated across the various expenditure headings. In the main, these transactions reflect the detailed financial model which is in line with the assumptions made within the service provider’s operating model. However, in relation to the repayment of debt, the Council previously took the opportunity to implement the guidance on Service Concessions and applied this in 2022/2023. This has no impact on the payments made to the contractor nor the lifetime of the contract. Further details are provided in Note 28. ■ In assessing potential liabilities arising from legal claims against the council, legal opinion has been sought. The council has considered and assessed its exposure to potential liabilities and made provision where it is probable that an outflow of resources will occur and where the amount of liability can be reliably quantified. Where it is not possible to measure the liability or is not probable in the council’s opinion that there will be a liability to meet, the contingent liability is disclosed in Note 31. ■ The accounts have been prepared on a going concern basis as it is expected that despite the uncertainty around future finance settlements, that the council’s process of delivering efficiency savings will provide sufficient resources to finance future liabilities. ■ Assets held at current value are revalued on a 5 year rolling basis. The council asserts that at any point in time, the carrying amount does not differ materially from that which would be determined using current value 174
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107 Supplementary Statement No 1 Housing Revenue Account Income and Expenditure Statement This statement reflects the statutory requirement to account for local authority housing provision, as defined in the Housing (Scotland) Act 1987. It shows the elements of expenditure incurred in the management and investment of the council’s housing stock and the funding of this by rents, and other income. The council has a duty to cover any deficit, and any accumulated surplus is carried forward to future years for use in the management and investment of its council housing stock. Housing Revenue Account Income and Expenditure Statement 2023/24 2024/25 £000 £000 £000 Expenditure 39,069 Repairs and Maintenance 42,937 31,725 Supervision and Management 25,025 38,238 Depreciation and Impairment on Non-Current Assets 39,730 1,844 Movement in the Allowance for Bad Debts 1,022 4,227 Other Expenditure 5,050 115,103 Total Expenditure 113,764 Income (102,615) Dwelling Rents (110,672) (3,024) Non-Dwelling Rents (3,601) - Housing Support Grants 0 - Other Income 0 (105,639) Total Income (114,273) 9,464 Net Cost of HRA Services as included in the Comprehensive Income and Expenditure Statement (509) 117 HRA Services share of Corporate and Democratic Core 105 - HRA Share of Other Amounts included in the Whole Council Net Cost of Services but not Allocated to Specific Services - 9,581 Net Cost for HRA Services (404) HRA share of the operating income and expenditure included in the Comprehensive Income and Expenditure Statement: 827 (Gain) or Loss on the Disposal of Non-Current Assets 102 9,786 Interest Payable and Similar Charges 12,374 (1,728) Interest and Investment Income (1,807) (1,094) Pension Interest Cost and Expected Return on Pension Assets 214 (25,705) Capital Grants and Contributions Receivable (21,360) (8,333) (Surplus) / Deficit for the Year on HRA Services (10,881) Note: The expenditure in the table above is higher than that included in the Comprehensive Income and Expenditure Statement (page 47) by £0.189 million (2023/2024: £0.099 million). This reflects the CIPFA Code of Practice requirement to transfer the movement in bad debt from the Net Cost of Services in the CIES to the Financing and Investment Income line, whilst in the Housing Revenue Account it remains part of the Net Cost of Services figure. Statement of Movement on the Housing Revenue Account Balance 175
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108 2023/24 2024/25 £000 Notes £000 £000 (12,861) Balance on the HRA at the end of the Previous Year (13,221) (8,333) Surplus / (Deficit) for the Year on HRA Income and Expenditure Statement (10,881) (17,345) Adjustments Permitted by Accounting Standards (17,810) 25,318 Adjustments between Accounting Basis and Funding Basis Under Statute 31,672 (360) Net (Increase) / Decrease Before Transfers to or from Reserves 2,981 0 Transfers (to) or from Reserves 200 (360) (Increase) / Decrease in the Year on the HRA 2,781 (13,221)) Balance on the HRA at the end of the Current Year (10,440) Housing Revenue Account Disclosures 1. Adjustments Permitted by Accounting Standards 2023/24 £000 2024/25 £000 (17,345) Charge for Depreciation and Impairment of Non-Current Assets (17,810) (17,345) Total (17,810) 2. Adjustments Between Accounting Basis and Funding Basis Under Statute 2023/24 £000 2024/25 £000 - Adjustment involving Revaluation Reserve - (20,923) Charge for Depreciation and Impairment of Non-Current Assets (21,920) (2,793) Adjustment involving Capital Adjustment Account (304) 25,695 Capital Grants and Contributions 21,350 5 Statutory Provision for the Financing of Capital Investment 5 20,046 Capital Expenditure funded by the HRA 33,506 1,966 Adjustment involving Capital Receipts Reserve 202 89 Adjustments involving Financial Instruments Adjustment Account 88 1,219 Adjustments involving the Pension Reserve (1,275) 14 Adjustments involving the Statutory Accumulated Compensated Absences Account 20 25,318 Total 31,672 3. Housing Stock The council’s housing stock at 31 March 2025 was 25,923 (25,742 at 31 March 2024) in the following categories: 2023/24 Number 2024/25 Number Average Weekly Rent 12,129 Houses 12,236 £94.35 1,349 High Rise 1,353 £76.34 5,504 Tenements 5,544 £69.66 4,672 4 in a block 4,697 £84.49 2,088 Maisonettes 2,093 £70.03 25,742 Total 25,923 4. Rent Arrears Rent Arrears at 31 March 2025 were £7.795 million (£8.633 million at 31 March 2024). 5. Impairment of Debtors In 2024/2025 an impairment of £12.761 million has been provided in the Balance Sheet for irrecoverable rents, a decrease of £0.433 million from the provision in 2023/2024. 6. Exceptional or Prior Year Adjustments There were no exceptional items or prior year adjustments not disclosed in the statement. 7. Void Rent Loss The figures above include rent loss on void properties of £2.625 million (£2.899 million for 2023/2024). 176
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109 Supplementary Statement No 2 National Non-Domestic Rates Income and Expenditure Statement National Non-Domestic Rates (NNDR) income is collected by councils, but all income is then remitted to the Scottish Government, where it is pooled nationally, and re-distributed back to councils along with the General Revenue Grant. The table below details the actual levels of NNDR collected by the council, and the overall increase/decrease between the rates collected and the amount that the council is entitled to receive under the National Pooling arrangement. 2023/24 2024/25 £000 £000 Note 405,892 Gross rates levied and contributions in lieu 408,051 1 Less: (38,627) Reliefs and other deductions (33,336) - Payments of interest (483) (6,206) Provision of bad and doubtful debts (3,055) 361,059 Net Non-Domestic Rate Income 371,177 - Adjustment for years prior to the introduction of the pool - 361,059 Contribution to the National Non-Domestic Rate pool 371,177 (19,523) Net contribution (to) / from National Non-Domestic Rate pool (5,159) 341,536 Gross Non-Domestic Rate Income to the Comprehensive Income and Expenditure Statement 366,018 - Non-Domestic Rate income retained by council (BRIS) - 2 341,536 Non-Domestic Rate Income per the Comprehensive Income and Expenditure Statement 366,018 Note 1 In 2024-2025, the gross rates levied amount of £408.051m includes an amount of £246.876m in relation to NDR Utilities which South Lanarkshire Council collected on behalf of the Scottish Government. This has resulted in a net contribution TO the NDRI pool FROM the Council of £5.159m. Note 2 The Business Rate Incentivisation Scheme (BRIS) permits the council to retain half of the NDR income, which exceeds the income target set by the Scottish Government. In 2023/2024, the Council did not receive any additional funding from BRIS. 2024-2025 £ Analysis of Rateable Values: Rateable Value at 01/04/24 782,677,809 Running Roll (Full Year Rateable Value) (2,500,500) Rateable Value at 31/03/25 780,177,309 Less: Wholly Exempt (2,870,260) Net Rateable Value at 31/03/25 777,307,049 Net Rateable Value Calculation The amount paid for Non-Domestic Rates is determined by the rateable value placed on the property by the Assessor multiplied by the Rate per £ (poundage) announced each year by the Scottish Government. The Scottish Government previously introduced three different property rates linked to the rateable value of properties. The 2024/25 rates are as follows: • Basic Property Rate (£0.498) • Intermediate Property Rate (£0.545) • Higher Property Rate (£0.559) Larger businesses with a Rateable Value between £51,001 and £100,000 pay an additional supplement of 4.7 pence in the pound and businesses with a Rateable Value over £100,000 pay an additional supplement of 6.1 pence in the pound, which contributes towards the cost of the Small Business Bonus Scheme. The Small Business Bonus Scheme provides a discount of between 0.5% and 100% to businesses in Scotland on individual properties with a rateable value of up to £20,000, with a maximum combined rateable value of £35,000. For information, South Lanarkshire Council’s Rateable Values at 1 April 2024: £ Commercial 129,389,284 Industrial and Freight Transport 63,001,280 Public Undertakings 510,848,500 Other 79,438,745 Total 782,677,809 177
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110 Supplementary Statement No 3 Council Tax Income and Expenditure Statement Local Councils raise taxes from residents by way of a property tax - the Council Tax - which is based on property values. Each dwelling house in a local authority area is placed into one of eight valuation bands A to H. The Council declares a tax for band D properties and all other properties are charged a proportion of this, lower valued properties pay less, higher valued properties pay more. 2023/24 £000 2024/25 £000 208,679 Gross Council Tax levied and contributions in lieu 210,831 2,360 Adjustments for prior years Council Tax 2.178 211,039 213,009 Adjusted for: (23,413) Council Tax Reduction (23,613) (23,948) Other discounts and reductions (23,651) (4,625) Provision for Non-collection (4,685) 159,053 Transfer to General Fund 161,060 From 1 April 2013, the Council Tax Reduction Scheme replaced Council Tax Benefit, with the resultant decrease in Council Tax Income shown in the Taxation and Non-Specific Grant Income line in the Comprehensive Income and Expenditure Statement. Council Tax Benefit grant and payments were previously disclosed as part of General Fund Housing in the Net Cost of Services. The calculation of the Council Tax Base 2024/25 No. of Dwellings No. of Exemptions Disabled Relief Discount 25% Discount 50% C Tax Reduction Total Dwellings Ratio to Band D Band D Equivalent Band A (discount) - - (104) 12 - - 92 5/9 51 Band A 37,399 1,747 (46) 5,262 271 10,837 19,328 6/9 12,885 Band B 32,031 1,226 (29) 4,106 240 6,610 19,878 7/9 15,460 Band C 28,103 691 7 2,794 160 3,771 20,680 8/9 18,382 Band D 23,364 368 (82) 1,856 124 1,685 19,413 9/9 19,413 Band E 21,787 296 95 1,255 68 733 19,340 473/360 25,408 Band F 14,658 117 64 541 39 286 13,611 585/360 22,117 Band G 7,487 55 82 245 23 87 6,995 705/360 13,697 Band H 610 11 11 17 4 3 564 882/360 1,382 Class 18 Dwellings - 119,901 Total 128,795 Provision for non-collection (2.875%) (3,703) Council Tax Base 125,092 Dwellings fall within a valuation band between A to H which is determined by the Assessor. The Council Tax charge is calculated using the Council Tax Base i.e. Band D equivalents. This value is then increased or decreased depending on the band. Based on the Council Tax base available to South Lanarkshire Council, the Band D charge for 2024/2025 was £1,300.81. South Lanarkshire Council £ per year for 2024/2025 Band A 867.21 Band E 1,709.12 Band B 1,011.74 Band F 2,113.82 Band C 1,156.28 Band G 2,547.42 Band D 1,300.81 Band H 3,186.98 178
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111 GROUP ACCOUNTS Group Comprehensive Income and Expenditure Statement The Comprehensive Income and Expenditure Statement shows the accounting cost in the year of providing services in accordance with the CIPFA Accounting Code of Practice, rather than the amount to be funded from taxation. The council raises taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Expenditure and Funding Analysis and Movement in Reserves Statements. Gross Expenditure £000 2023/24 Gross Income £000 Net Expenditure / (Income) £000 Gross Expenditure £000 2024/25 Gross Income £000 Net Expenditure / (Income) £000 215,979 55,496 160,483 Community and Enterprise Resources 232,000 76,451 155,749 490,181 53,097 437,084 Education Resources 513,697 20,327 493,370 117,497 67,648 49,849 Finance and Corporate Resources 111,769 66,529 45,240 Housing and Technical Resources 115,202 105,649 9,553 - Housing Revenue Account 113,953 114,283 (330) 81,368 55,198 26,170 - Housing Other 75,047 52,904 22,143 505,694 266,428 239,266 Social Work Resources 509,487 265,185 244,302 2,052 - 2,052 Joint Board 1,864 - 1,864 2,377 12,003 (9,626) Corporate Items 987 509 478 117 - 117 Corporate and Democratic Core (HRA) 105 - 105 - - - Non-Distributed Costs – Non-Operational Assets (HRA) - - - 200 286 (86) Common Good 811 1,000 (189) 1,530,667 615,805 914,862 Net Cost of Services 1,559,920 597,188 962,732 650 - 650 Other Operating Expenditure (Note 9) (7,628) - (7,628) 36,670 16,127 20,542 Financing and Investment (Income) and Expenditure (Note 10) 72,597 12,287 60,310 - 913,708 (913,708) Taxation and Non-Specific Grant Income (Note 11) - 989,521 (989,521) 1,567,987 1,545,640 22,347 (Surplus) on Provision of Services 1,625,249 1,598,996 26,253 (999) Share of the (Surplus) or Deficit on the provision of services by associates (7,436) 21,348 Group (Surplus) / Deficit 18,817 29,352 (Surplus) / Deficit on Revaluation of Fixed Assets (209,253) 12,247 Re-measurement of the Pension Liability / (Asset) (53,043) 1,006 Share of Other Comprehensive (Income) and Expenditure of Associates and Joint Ventures (496) 42,605 Other Comprehensive (Income) and Expenditure (262,792) 63,953 Total Comprehensive (Income) and Expenditure (243,975) 179
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112 Group Balance Sheet The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the council. The net assets of the council (assets less liabilities) are matched by the reserves held by the council. Reserves are reported in two categories. ■ The first category of reserves are usable reserves, that is those reserves that the council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the Capital Receipts Reserve that may only be used to fund capital expenditure or repay debt). ■ The second category of reserves is those that the council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the Revaluation Reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis under regulations’. Group 31 March 2024 £000 Single Entity 31 March 2025 £000 Group Adjustments 31 March 2025 £000 Group 31 March 2025 £000 3,738,085 Property, Plant and Equipment 4,113,384 3,416 4,116,800 3,853 Heritage Assets 3,853 - 3,853 138 Intangible Assets 10,059 - 10,059 89,029 Investments in associates and joint ventures - 98,282 98,282 1,793 Long Term Debtors 1,910 - 1,910 - Other Long Term Assets (Pension) - - - 3,832,898 Non Current Assets 4,129,206 101,698 4,230,904 - Short Term Investments - - - 4,966 Inventories 4,179 189 4,368 104,197 Short Term Debtors 100,106 1,349 101,455 168 Assets Held for Sale 168 - 168 19,656 Cash and Cash Equivalents (see cash flow notes) 25,031 7,897 32,928 128,987 Current Assets 129,484 9,435 138,919 (63,095) Short Term Borrowing (179,224) - (179,224) (210,533) Short Term Creditors (235,287) (5,430) (240,717) - Contract Liability – IFRS15 - - - (7,390) Other Short-Term Liabilities (PPP / Finance Leases) (17,142) - (17,142) (1,676) Provisions (608) - (608) (1,331) Receipts in Advance (3,476) - (3,476) (284,025) Current Liabilities (435,737) (5,430) (441,167) (649) Long Term Creditors - (667) (667) (787) Long Term Provisions - (251) (251) (980,762) Long Term Borrowing (860,609) - (860,609) - Liabilities in Associates and Joint Ventures - - - (164,646) Other Long-Term Liabilities (PPP / Finance Lease) (306,113) (1,307) (307,420) (36,707) Other Long-Term Liabilities (Pension) (97,992) - (97,992) (1,183,551) Long Term Liabilities (1,264,714) (2,225) (1,266,939) 2,494,309 Net Assets 2,558,239 103,478 2,661,717 133,689 Usable Reserves 147,568 - 147,568 2,189,055 Unusable Reserves 2,410,617 - 2,410,617 171,565 Group Reserves - 103,478 103,478 2,494,309 Total Reserves 2,558,239 103,478 2,661,717 The notes on pages 117 to 123 form part of the group financial statements. Jackie Taylor Executive Director (Finance and Corporate Resources) 180
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113 Group Movement in Reserves Statement This statement shows the movement in the year on the different reserves held by the council, analysed into ‘usable reserves’ (those that can be applied to fund expenditure or reduce local taxation) and other reserves. The Surplus or (Deficit) on the Provision of Services line shows the true economic cost of providing the council’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance and the Housing Revenue Account for council tax setting and dwellings rent setting purposes. The Net Increase / Decrease before Transfers to Earmarked Reserves line shows the statutory General Fund Balance and Housing Revenue Account Balance before any discretionary transfers to or from earmarked reserves undertaken by the council. Revenue Statutory Funds General Fund Balance £000 Housing Revenue Account £000 Repairs and Renewals Fund £000 Insurance Fund £000 Capital Statutory Fund £000 Capital Receipts Reserve £000 Total Usable Reserves £000 Unusable Reserves £000 Total Council Reserves £000 Council’s Share of Usable Reserves of Subsidiaries and Associates £000 Council’s Share of Unusable Reserves of Subsidiaries and Associates £000 Total Group Reserves £000 Balance at 1 April 2024 109,772 13,221 5,347 195 3,975 1,179 133,689 2,189,055 2,322,744 123,353 48,212 2,494,309 Restatement* - - - - - - - - - (78,003) 815 (77,188) Restated Balance at 1 April 2024 109,772 13,221 5,347 195 3,975 1,179 133,689 2,189,055 2,322,744 45,350 49,027 2,417,121 Movement in reserves during 2024/25 Total Comprehensive Expenditure and Income (37,682) 10,881 - - - - (26,801) 262,296 235,495 8,697 403 244,595 Adjustments permitted under accounting standards 15,113 17,810 - - - - 32,923 (32,923) - - - - Adjustments between accounting basis and funding basis under regulations 33,196 (31,672) - - - 6,233 7,757 (7,757) - (4,091) 4,091 - Adjustments for Changes in Council’s share of associates - - - - - - - - - - - - Net Increase / (Decrease) before Transfers to Reserves 10,627 (2,981) - - - 6233 13,879 221,616 235,495 4,606 4,494 244,595 Transfers to/ (from) Reserves (1,402) 200 (224) 1,677 (191) - - - - - - - Increase / (Decrease) in Year 9,225 (2,781) (224) 1,617 (191) 6233 13,879 221,616 235,495 4,606 4,494 244,595 Balance at 31 March 2025 carried forward 118,997 10,440 5,123 1,812 3,784 7,412 147,568 2,410,671 2,558,239 49,956 53,521 2,661,716 * There was one material restatements to the opening balance of the 2024/2025 Group Movement in Reserves Statement (£77.188m) 181
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114 Revenue Statutory Funds General Fund Balance £000 Housing Revenue Account £000 Repairs and Renewals Fund £000 Insurance Fund £000 Capital Statutory Fund £000 Capital Receipts Reserve £000 Total Usable Reserves £000 Unusable Reserves £000 Total Council Reserves £000 Council’s Share of Usable Reserves of Subsidiaries and Associates £000 Council’s Share of Unusable Reserves of Subsidiaries and Associates £000 Total Group Reserves £000 Balance at 1 April 2023 150,283 12,861 7,610 1,411 4,776 - 176,941 2,284,815 2,461,756 53,510 42,917 2,558,183 Restatement* - - - - - - - - - (2,528) 2,605 77 Restated Balance at 1 April 2023 150,283 12,861 7,610 1,411 4,776 - 176,941 2,284,815 2,461,756 50,982 45,522 2,558,260 Movement in reserves during 2023/24 Total Comprehensive Expenditure and Income (30,602) 8,333 - - - - (22,269) (116,744) (139,013) 75,769 (709) (63,953) Adjustments permitted under accounting standards 13,723 17,344 - - - - 31,067 (31,067) - - - - Adjustments between accounting basis and funding basis under regulations (28,569) (25,318) - - - 1,838 (52,049) 52,049 - (3,399) 3,399 - Adjustments for Changes in Council’s share of associates - - - - - - - - - - - - Net Increase / (Decrease) before Transfers to Reserves (45,448) 360 - - - 1,838 (43,252) (95,761) (139,013) 72,370 2,690 (63,953) Transfers to/ (from) Reserves 4,939 - (2,263) (1,216) (801) (660) - - - - - - Increase / (Decrease) in Year (40,511) 360 (2,263) (1,216) (801) 1,178 (43,252) (95,761) (139,013) 72,370 2,690 (63,953) Balance at 31 March 2024 carried forward 109,772 13,221 5,346 195 3,975 1,178 133,689 2,189,055 2,322,744 123,353 48,212 2,494,309 182
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115 Group Cash Flow Statement The Cash Flow Statement shows the changes in cash and cash equivalents of the council during the reporting period. The statement shows how the council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the council are funded by way of taxation and grant income or from the recipients of services provided by the council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (that is borrowing) to the council. Further analysis of movements is provided in the cash flow notes following the statement. 2023/24 £000 2024/25 £000 (22,347) Net surplus / (deficit) on the provision of services (26,599) 26,550 Adjust net surplus / deficit on the provision of services for non cash movements 175,318 (66,944) Adjust for items included in the net surplus / deficit on the provision of services that are investing and financing activities (58,626) (62,741) Net cash flows from Operating Activities 90,093 16,735 Investing Activities (56,254) (8,868) Financing Activities (20,345) (54,874) Net increase / (decrease) in cash and cash equivalents 13,494 75,553 Cash and cash equivalents at the beginning of the reporting period 20,686 20,679 Cash and cash equivalents at the end of the reporting period 34,180 Cash Flow Statement Note – Non-Cash Movements The balance of non-cash movements is made up of the following elements: 31 March 2024 £000 31 March 2025 £000 103,434 Depreciation, impairment and amortisation of assets 101,364 (24,267) Movement in creditors 29,350 (20,195) Movement in debtors 5,468 (503) Movement in inventories 598 (35,992) Movement in pension liability 38,368 4,454 Carrying amount of non-current assets and non-current assets held for sale, sold or derecognised 507 (381) Other non-cash items charged to the net surplus / deficit on the provision of services (337) 26,550 Net cash flows from the provision of services for non-cash movements 175,318 Cash Flow Statement Note – Operating Activities – Items Included in Net Surplus / (Deficit) on the Provision of Services That are Investing and Financing Activities The cash flows for these activities include the following items: 2023/24 £000 2024/25 £000 (61,140) Capital contributions and grants (50,851) (3,804) Capital receipts applied (7,775) (66,944) Net cash flows from items included in the net surplus / (deficit) on the provision of services that are investing and financing activities (58,626) 183
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116 Cash Flow Statement Note – Investing Activities 2023/24 £000 2024/25 £000 (120,607) Purchase of property, plant and equipment and intangible assets (113,510) (93,000) Purchase of short term investments (40,000) 3,804 Proceeds from the sale of property, plant and equipment and intangible assets 7,775 163,000 Proceeds from short term investments 40,000 63,538 Other receipts from investing activities 49,481 16,735 Net cash flows from investing activities (56,254) Cash Flow Statement Note – Financing Activities 2023/24 £000 2024/25 £000 20,000 Cash receipts of short term and long term borrowing 145,000 (7,098) Cash payments for the reduction of the outstanding liabilities relating to finance leases for PPP contracts (16,575) (21,770) Repayments of short term and long term borrowing (148,770) (8,868) Net cash flows from financing activities (20,345) Cash Flow Statement Note – Cash and Cash Equivalents 31 March 2024 £000 31 March 2025 £000 103 Cash held by officers 101 7,369 Bank current accounts 18,173 13,207 Short term deposits 15,906 20,679 Total cash and cash equivalents 34,180 The credit figures shown against Bank Accounts in 2025 relate to balances in the financial ledger. This is due to timing differences in posting transactions in the ledger. Actual balances held at bank are not in an overdraft position. The group cash flow statement represents the single entity cash flow for South Lanarkshire Council adjusted for its subsidiaries, Routes to Work South, Common Good and South Lanarkshire Leisure and Culture Trust. The adjusted figures are as follows: South Lanarkshire Council £000 Routes to Work South £000 Common Good £000 South Lanarkshire Leisure & Culture Trust £000 Total £000 Net surplus / (deficit) on provision of services (26,801) 7 188 7 (26,599) Adjust net surplus / (deficit) on the provision of services for non-cash movements 175,115 (460) 35 628 175,318 Adjust for items included in the net surplus / (deficit) that are investing and financing activities (58,626) - - - (58,626) Net Cash Flows from Operating Activities 89,688 (453) 223 635 90,093 Investing Activities (56,553) 23 - 276 (56,254) Financing Activities (20,345) - - - (20,345) Net increase / decrease in cash and cash equivalents 12,790 (430) 223 911 13,494 Cash and cash equivalents at beginning of period 12,241 2,109 1,029 5,307 20,686 Cash and cash equivalents at end of reporting period 25,031 1,679 1,252 6,218 34,180 184
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117 Notes to Group Financial Statements Note 1 Group Expenditure and Funding Analysis Net Expenditure Chargeable To the General Fund And HRA Balance £000 2023/24 Adjustments between the Funding and Accounting Basis £000 Net Expenditure in the Comprehensive Income and Expenditure Statement £000 Net Expenditure Chargeable To the General Fund And HRA Balance £000 2024/25 Adjustments between the Funding and Accounting Basis £000 Net Expenditure in the Comprehensive Income and Expenditure Statement £000 137,700 22,783 160,483 Community and Enterprise Resources 128,375 27,374 155,749 439,940 (2,856) 437,084 Education Resources 482,703 10,667 493,370 47,993 1,856 49,849 Finance and Corporate Resources 40,103 5,137 45,240 Housing and Technical Resources (360) 9,913 9,553 - Housing Revenue Account 2,981 (3,311) (330) 16,432 9,738 26,170 - Housing Other 15,972 6,171 22,143 237,204 2,062 239,266 Social Work Resources 235,309 8,993 244,302 2,052 0 2,052 Joint Board 1,864 - 1,864 (14,193) 4,567 (9,626) Corporate Items (8,870) 9,348 478 - 117 117 Corporate and Democratic Core (HRA) 105 105 - - - Non-Distributed Costs – Non-Operational Assets (HRA) - - - (86) - (86) Common Good (189) - (189) 866,682 48,180 914,862 Net Cost of Services 898,248 64,484 962,732 (821,513) (71,002) (892,515) Other (Income) and Expenditure (906,444) (30,035) (936,479) 45,169 (22,822) 22,347 (Surplus) or Deficit (8,196) 34,449 26,253 (999) - (999) Share of Associates (7,436) - (7,436) 45,170 (22,822) 22,348 (15,632) 34,449 18,817 General Fund including Subsidiaries and HRA General Fund Group Associates Total Group General Fund including HRA General Fund including Subsidiaries and HRA General Fund Group Associates Total Group General Fund including HRA (146,186) (91,317) (237,503) Opening General Fund and HRA Balance (128,212) (92,316) (220,528) 45,169 (999) 44,170 Less/plus Surplus or Deficit on General Fund (8,196) (7,436) (15,632) (27,195) - (27,195) Transfers to/from Other Reserves (16,232) 54,867 38,635 (128,212) (92,316) (220,528) Closing General Fund and HRA Balance (152,640) (44,885) (197,525) 185
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118 Adjustments from General Fund to arrive at the Comprehensive Income and Expenditure Statement 2024/25 Adjustments for Capital Purposes £000 Net change for the Pensions Adjustments £000 Other Differences £000 Total Adjustments between Funding and Accounting Basis £000 Community and Enterprise Resources 21,085 6,437 (148) 27,374 Education Resources 28,423 11,012 (28,768) 10,667 Finance and Corporate Resources 1,876 3,174 87 5,137 Housing and Technical Resources - Housing Revenue Account 6,219 1,061 (10,591) (3,311) - Housing Other 928 3,157 2,086 6,171 Social Work Resources 4,859 6,243 (2,109) 8,993 Joint Board - - - - Corporate Items - - 9,348 9,348 Corporate and Democratic Core (HRA) - - 105 105 Non-Distributed Costs – Non-Operational Assets (HRA) - - - - Net Cost of Services 63,390 31,084 (29,990) 64,484 Other Income and Expenditure from the Expenditure and Funding Analysis (62,239) 6,285 25,919 (30,035) Surplus or Deficit 1,151 37,369 (4,071) 34,449 Share of (Surplus) or Deficit on the Provision of Services by Associates - - - - Difference between General Fund Surplus or Deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services 1,151 37,369 (4,071) 34,449 2023/24 Adjustments for Capital Purposes £000 Net change for the Pensions Adjustments £000 Other Differences £000 Total Adjustments between Funding and Accounting Basis £000 Community and Enterprise Resources 23,665 (766) (116) 22,783 Education Resources 26,136 (1,037) (27,955) (2,856) Finance and Corporate Resources 2,078 (348) 126 1,856 Housing and Technical Resources - Housing Revenue Account 18,217 (124) (8,180) 9,913 - Housing Other 9,918 (376) 196 9,738 Social Work Resources 3,224 (981) (181) 2,062 Joint Board - - - - Corporate Items - (45) 4,612 4,567 Corporate and Democratic Core (HRA) - - 117 117 Non-Distributed Costs – Non-Operational Assets (HRA) - - - - Net Cost of Services 83,238 (3,677) (31,381) 48,180 Other Income and Expenditure from the Expenditure and Funding Analysis (67,489) (32,312) 28,799 (71,002) Surplus or Deficit 15,749 (35,989) (2,582) (22,822) Share of (Surplus) or Deficit on the Provision of Services by Associates 23,665 (766) (116) 22,783 Difference between General Fund Surplus or Deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services 26,136 (1,037) (27,955) (2,856) 186
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119 Note 2 Expenditure and Income Analysed by Nature (Group) The council’s expenditure and income are analysed below: 2024/25 £000 2023/24 £000 Expenditure Employee Benefits Expenses 697,892 655,248 Other Services Expenditure 764,534 772,155 Support Services Recharges - - Depreciation, Amortisation, Impairment 97,494 103,277 Interest Payment 68,065 69,598 Pension Net Interest Expense 6,285 (32,312) Impairment on Financial Instruments (1,752) (531) Loss on the Disposal of Assets (7,268) 650 Total Expenditure 1,625,250 1,567,987 Income Fees and Charges and Other Service Income 439,840 424,637 Interest and Investment Income 14,441 17,266 Impairment on Financial Instruments (618) 414 Gain on the Disposal of Assets - - Income from Council Tax 161,060 159,053 Government Grants and Contributions 984,274 944,270 Total Income 1,598,997 1,545,640 Surplus or Deficit on the Provision of Services 26,253 22,347 Note 3 Investments / Liabilities in Associates and Joint Boards The group’s share of the net asset / liabilities by associate and joint board is shown below: Investments in associates and joint boards 31 March 2025 £000 31 March 2024 £000 Strathclyde Partnership for Transport 78,457 72,049 Strathclyde Concessionary Travel Scheme Joint Committee 558 775 South Lanarkshire Integration Joint Board 16,991 14,418 Lanarkshire Valuation Joint Board 1,024 763 Total 97,030 88,005 Liabilities in associates and joint boards 31 March 2025 £000 31 March 2024 £000 Lanarkshire Valuation Joint Board - - Total - - 187
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120 Note 4 Disclosure of Interests in Other Entities The council has adopted the recommendations of the Code in the United Kingdom 2024/2025, as supported by the International Financial Reporting Standard (IFRS), which requires local authorities to consider their interests in all types of entity to incorporate into Group Accounts. A full set of Group Accounts, in addition to the council’s accounts, has been prepared which incorporates material balances from identified associates and joint ventures. The Financial Statements in the Group Accounts are prepared in accordance with the Accounting Policies set out in the Accounting Policies on pages 99 - 105. Note 5 Financial Impact of Consolidation By including the group entities (details of which are provided below), the effect on the Group Balance Sheet is an increase in both Reserves and Net Assets of £103.478M million. This represents the council’s share of the net assets in these entities. Note 6 Group Entities The Group Accounts consolidate the results of the council with eight other entities – Common Good Fund, four joint boards, South Lanarkshire Leisure and Culture Limited, Routes to Work South and Clyde Valley Learning and Development Joint Committee. The joint boards are: ■ Strathclyde Partnership for Transport ■ Strathclyde Concessionary Travel Scheme Joint Committee ■ Lanarkshire Valuation Joint Board ■ South Lanarkshire Integration Joint Board. South Lanarkshire Council holds no shares in the bodies governed by these Boards. The joint boards have a wide range of functions to discharge, and members of each Board are elected councillors and are appointed by the councils in proportions specified in the legislation. Under accounting standards guidance, South Lanarkshire Council can be seen to have significant influence over these statutory bodies, through nominated Council Member involvement in the bodies’ governing Boards. The Boards are included within the Group Accounts even when our interest in these bodies is less than the 20% that is normally presumed to represent significant influence. Further details on each of the Boards and the Trust are provided below: Common Good Fund The Common Good Fund is for the benefit of the geographical areas of the former burghs and is administered by the council. The council’s share of the year-end net asset of £4.407m is included in the Group Balance Sheet. The Common Good Account is included within the council’s core financial statements Note 34. Strathclyde Partnership for Transport Strathclyde Partnership for Transport is the statutory body responsible for formulating the public transport policy for the 12 local authorities in the former Strathclyde area of the West of Scotland. The accounting period for the Board is the twelve months to 31 March 2025. In 2024/2025, South Lanarkshire Council contributed 14.63% of the entity’s estimated running costs. This body has been included as an associate in the council’s Group Accounts, with the council’s share of the year-end net asset of £78.457m included in the Group Balance Sheet. Copies of the Board’s accounts may be obtained from the Treasurer to Strathclyde Partnership for Transport, 131 St Vincent Street, Glasgow, G2 5JF. The accounts of the Partnership have been subject to audit. Strathclyde Concessionary Travel Scheme Joint Committee Strathclyde Concessionary Travel Scheme Joint Committee comprises the 12 councils within the West of Scotland and oversees the operation of the concessionary fares scheme for public transport within its area. The Strathclyde Passenger Transport Executive administers the Scheme on behalf of the Joint Committee. The accounting period for the Joint Committee is the twelve months to 31 March 2024. In 2024/2025, South Lanarkshire Council contributed 14.93% of the Committee’s estimated running costs. This body has been included as an associate in the council’s Group Accounts with the council’s share of the year-end net assets of £0.558m included in the Group Balance Sheet. Copies of the Board’s accounts may be obtained from the Treasurer to Strathclyde Concessionary Travel Scheme Joint Committee, 131 St Vincent Street, Glasgow, G2 5JF. The accounts of the Committee have been subject to audit. 188
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121 Lanarkshire Valuation Joint Board Lanarkshire Valuation Joint Board was formed in 1996 at local government re-organisation. The Board maintains the Electoral, Council Tax and Non- Domestic Rates registers for North and South Lanarkshire. The Board’s running costs are met by the two member councils. Surpluses or deficits on the Board’s operations are shared between the councils. The accounting period for the Board is the twelve months to 31 March 2025. In 2024/2025, South Lanarkshire Council contributed 50.00% of the Board’s estimated running costs. This body has been included as an associate in the Group Accounts, with the council’s share of the year-end net assets of £1.024m included in the Group Balance Sheet. The following additional disclosures are required under accounting regulations for Lanarkshire Valuation Joint Board because the council’s share of the net assets of the Board exceeds 25%. The figures below show the entity’s position before group percentages have been applied. 2024/25 £000 2023/24 £000 Expenditure 3,725 3,835 Total Comprehensive Income and Expenditure (522) 50 Fixed Assets 557 113 Long Term Pension Assets - - Current Assets 4,676 2,098 Liabilities due within one year (2,269) (193) Liabilities due after one year (435) (493) Capital and reserves 2,047 1,525 Contingent liabilities - - Capital commitments - - Copies of the Board’s accounts may be obtained from the Treasurer to the Lanarkshire Valuation Joint Board, Floor 4, Council Offices, Almada Street, Hamilton, ML3 0AB. The accounts of the Board are subject to audit. South Lanarkshire Integration Joint Board South Lanarkshire Integration Joint Board was established by South Lanarkshire Council with NHS Lanarkshire to formally integrate health and social care provision within South Lanarkshire. South Lanarkshire Council delegated resources of £182.365m or 24.71% of the Board’s income in 2024/2025. This body has been included as a joint venture in the Group Accounts, with the council’s 50.00% share of the year end net asset of £16.991m included in the Group Balance Sheet. 2024/25 £000 2023/24 £000 Expenditure 732,771 720,070 Total Comprehensive Income and Expenditure (5,147) 9,105 Fixed Assets - - Current Assets 33,982 28,835 Liabilities due within one year - - Liabilities due after one year - - Capital and Reserves 33,982 28,835 Contingent Liabilities - - Capital Commitments - - Copies of the Integration Joint Board accounts may be obtained from the Chief Financial Officer of the South Lanarkshire Integration Joint Board, Floor 8, Council Offices, Almada Street, Hamilton, ML3 0AB. The accounts of the Integration Joint Board have been subject to audit. South Lanarkshire Leisure and Culture Limited South Lanarkshire Leisure Limited was established as a Charitable Trust on 1 April 2002, changed to South Lanarkshire Leisure and Culture Limited in October 2010 and then became a SCIO on 3 April 2023. It provides the council with a full range of leisure and cultural services within the South Lanarkshire area. The Trust is entirely independent of the council under law and for taxation purposes. The council and the council’s nominee company are the sole members of the SCIO. South Lanarkshire Council currently has 5 out of the 14 Board positions meaning 35.71% representation on the Board of Directors. The SCIO meets the definition of a structured entity. This describes an entity that has been designed so that the relevant activities are directed by means of contractual arrangements. In recognition of this, South Lanarkshire Leisure and Culture SCIO is included in the Group Financial Statements as a 100% subsidiary. The accounts of the SCIO are published separately and may be obtained from the Secretary, South Lanarkshire Leisure and Culture Limited, Floor 5, Council Offices, Almada Street, Hamilton, ML3 0AB. The accounts of the SCIO have been subject to audit. 189
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122 The following additional disclosures are required under accounting regulations for South Lanarkshire Leisure and Culture Limited because the council’s share of the net assets of the Board exceeds 25%. 2024/25 £000 2023/24 £000 Expenditure 37,807 43,241 Total Comprehensive Income and Expenditure 7 (176) Fixed Assets 213 258 Long Term Assets - - Current Assets 7,682 7,283 Liabilities due within one year (4,482) (5,153) Liabilities due after one year (667) (649) Capital and Reserves 1,439 259 Contingent Liabilities - - Capital Commitments - - On 3 April 2023, the status of South Lanarkshire Leisure and Culture Limited changed from a Charitable Trust to a Scottish Charitable Incorporated Organisation. This will have no impact on the relationship with the council moving forward. Routes to Work South Routes to Work South was established in 1998. Its main activity is supporting unemployed and workless residents of South Lanarkshire into employment, training or further education. Routes to Work South delivers services to the council and is funded by the council. South Lanarkshire Council is the sole member of Routes to Work South. In recognition of this, Routes to Work South is included in the Group Financial Statements as a 100% subsidiary. The accounts of Routes to Work South are published separately and may be obtained from the Secretary, Routes to Work South, 1-5 Main Street, Cambuslang, Glasgow G72 7EX. The accounts have been subject to audit. The following additional disclosures are required under accounting regulations for Routes to Work South because the Councils’ share of the net assets exceeds 25%. 2024/25 £000 2023/24 £000 Expenditure 3,257 3,030 Total Comprehensive Income and Expenditure (7) (13) Fixed Assets 27 32 Current Assets 1,753 2,234 Liabilities due within one year (928) (1,420) Liabilities due after one year (251) (251) Capital and Reserves 602 595 Contingent Liabilities - - Capital Commitments - - Clyde Valley Learning and Development Joint Committee Clyde Valley Learning and Development Joint Committee was established, with the backing of the Scottish Government’s Efficiency and Reform Fund, to provide procurement of training activities to each of its member councils. South Lanarkshire Council is the lead authority for this project and its constituent membership totalled 20.00% in 2024/2025. This body has been included as an associate in the council’s Group Accounts, however, as the Joint Committee net assets at 31 March 2025 are nil, there has been no financial impact on South Lanarkshire’s Single Entity Accounts. The accounts of Clyde Valley Learning and Development Joint Committee are published separately and may be obtained from the Treasurer, Finance and Corporate Resources, Floor 4, Almada Street, Hamilton, ML3 0AB. The Accounts of the Joint Committee are subject to audit. Note 7 Non-Material Interest in Other Entities The council also has an interest in: ■ Scotland Excel (previously Authorities Buying Consortium) is a Joint Committee established to serve the buying requirements of the councils within the former Strathclyde area. South Lanarkshire Council contributed 5.3% of Scotland Excel’s estimated running costs in 2024/2025, but the financial results of this organisation have not been consolidated into the council’s Group Accounts as the amounts are not material. . ■ West of Scotland Archaeology Service is a Joint Service established to provide planning related archaeological advice to its 11 member councils. South Lanarkshire Council contributed 9.45% of the estimated running costs of the Joint Service in 2024/2025, however, the financial results of this organisation have not been consolidated into the council’s Group Accounts as the amounts are not material. 190
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123 ■ Continuing Education Gateway is a consortium of 10 local authorities in the West of Scotland. It was formed in April 2000 to further the provision of careers and educational guidance services. South Lanarkshire Council contributed 14.50% of the consortium’s estimated running costs in 2024/2025, however, the financial results of this organisation have not been consolidated into the council’s Group Accounts as the amounts are not material. ■ Glasgow and the Clyde Valley Strategic Development Planning Authority was established to advise the member authorities on the structure plan. The Joint Committee was wound up during the year but there is a small staff team that is moving over to the City Region. South Lanarkshire Council contributed 12.5% of the committee’s estimated running costs in 2024/2025, however, the financial results of this organisation have not been consolidated into the council’s Group Accounts as the amounts are not material. ■ SEEMIS Group LLP is a not-for-profit body whose principal activity is the provision of education related information technology solutions to its member councils. South Lanarkshire Council contributed 6.21% of the organisation’s estimated running costs in 2024/2025, however, the financial results of this organisation have not been consolidated into the council’s Group Accounts as the amounts are not material. ■ Glasgow City Region – City Deal Cabinet was established on 20 January 2015. The purpose of the committee is to determine the Strategic Development Priorities for the Clyde Valley Region and to monitor and ensure delivery of the City Deal Programme as agreed between member authorities and the UK and Scottish Governments. The City Deal aims to deliver a £1.1 billion investment programme, including delivery of labour market and innovation programmes. South Lanarkshire Council contributed 17.7% of the organisation’s running costs in 2024/2025, however, the financial results have not been consolidated into the council’s Group Accounts as the amounts are not material. ■ The Rural Development Trust is based in South Lanarkshire and works with local communities to deliver innovative solutions including resolving transport problems in rural areas and developing markets towns. The council supports the Rural Development Trust. The financial results have not been consolidated into the council’s Group Accounts as the amounts are not material. ■ Regen: FX Youth Trust was established as a Charitable Trust on 1 April 2007. It serves the council by developing and co-ordinating out of school diversion activities within the South Lanarkshire area. The Trust is entirely independent of the council under law and for taxation purposes. The council has neither any shares in, nor ownership of the Trust. The financial results have not been consolidated into the council’s Group Accounts, as the amounts are not material. ■ Clyde Gateway was established to re-develop large sections of the East End of Glasgow extending into Shawfield and Rutherglen in South Lanarkshire. The key stakeholders are Glasgow City Council, Scottish Enterprise and South Lanarkshire Council, with the two council partners providing land holdings on a phased basis over the anticipated 20-year lifetime of the project as well as capital funding. The financial results have not been consolidated into the council's Group Accounts as the amounts are not material. 191
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124 Audit Arrangements Under arrangements approved by the Commission for Local Authority Accounts in Scotland (“The Accounts Commission”) the auditor with overall responsibility for the audit of the accounts of South Lanarkshire Council for the year ended 31 March 2025 is: Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN 192
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125 Glossary of Terms Much of the terminology used in this report is intended to be self-explanatory, however, the following additional definition and interpretation of terms may be helpful: 1. Current Service Cost (Pensions) The increase in the current value of a defined benefit scheme’s liabilities, expected to arise from employee service in the current financial year. 2. Past Service Costs (Pensions) For a defined benefit scheme, the increase in the present value of the scheme’s liabilities relating to employee service in prior years arising in the current financial year as a result of the introduction of, or improvement to, retirement benefits. 3. Interest Cost (Pensions) For a defined benefit scheme, the expected increase during the financial year of the scheme’s liabilities because the benefits are one year closer to settlement. 4. Actuarial Gains and Losses (Pensions) For a defined benefit scheme, the changes in actuarial deficits or surpluses that arise because events have not coincided with the actuarial assumptions made for the last valuation (experience gains and losses) or the actuarial assumptions have changed. 5. Pension Scheme Liabilities The liabilities of a defined benefits pension scheme for outgoings due after the valuation date. The scheme’s liabilities, measured using the ‘projected unit method’, reflect the benefits that the employer is committed to provide for service up to the valuation date. 6. Pension Reserve The Pension Reserve recognises the council’s share of the actuarial gains and losses in the Strathclyde Pension Fund and the change in the council’s share of the net liability chargeable to the Comprehensive Income and Expenditure Statement. 7. Asset An item having value to the council in monetary terms. Assets are categorised as either current or non-current. A current asset will be consumed or cease to have material value within the next financial year (e.g. cash and stock). A non- current asset provides benefit to the council and the services it provides for a period of more than one year. 8. Liability A liability is where the council owes payment to an individual or another organisation. A current liability is an amount which will become payable within the next financial year. A non-current liability is an amount which by arrangement is payable beyond the next year at some point in the future or to be paid off by an annual sum over the period of time. 9. Contingent Liability A contingent liability is either: • A possible obligation arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain events not wholly within the council’s control, or • A present obligation arising from past events where it is not probable that a transfer of economic benefits will be required, or the amount of the obligation cannot be measured with sufficient reliability. 10. Capital Expenditure and Financing This is expenditure incurred in creating, acquiring or improving assets. Expenditure is normally financed by borrowing (with repayment over a period of years), income from the sale of existing assets, revenue funds or external grants and contributions. 11. Capital Financed from Current Revenue This is expenditure incurred in creating, acquiring or improving assets where that expenditure is funded directly from the revenue account in the year in which it is incurred. 12. Non-Current Assets Fixed Assets are created as a result of the capital expenditure incurred by the council. As such, they comprise buildings, property, vehicles, plant and machinery, and computer equipment etc. 193
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126 13. Property, Plant and Equipment These are assets with physical substance (tangible assets) that are held for use in the production or supply of goods and services, for rental to others, or for administrative purposes, and expected to be used during more than one year. These are further analysed in the Notes to the Accounts as follows: a) Council Dwellings – these are council houses b) Other Land and Buildings c) Vehicles, Plant and Equipment d) Infrastructure Assets – these are assets where there is no prospect of sale or alternative use e.g. roads, bridges, tunnels, water supply and drainage systems e) Community Assets – assets that the council intends to hold in perpetuity that have no determinable useful life and may have restrictions on their disposal e.g. open land and public parks. f) Surplus Assets – assets that are not being used to deliver services, but which do not meet the criteria to be classified as either investment properties or non-current assets held for sale. g) Assets Under Construction 14. Heritage Assets Heritage assets are assets that have cultural, environmental, or historical association that make their preservation for future generations important. Heritage assets are maintained principally for their contribution to knowledge and culture, and it is this which distinguishes them from other assets e.g. museum artefacts. 15. Assets Held for Sale These are assets where the carrying value of the asset will be realised through its sale rather than continued use. 16. Intangible Asset These are assets which do not have a physical substance (e.g. IT software and licences) 17. Depreciation The measure of the cost of wearing out, consumption or reduction in the useful economic life of the council’s non- current assets during the financial year, whether from use, the passage of time or obsolescence through technical or other changes. 18. Impairment A reduction in the value of non-current asset to below its carrying value in the Balance Sheet. 19. Fair Value The fair value of an asset is the price at which it could be exchanged in an arm’s length transaction, less where applicable, any grants receivable towards the purchase or use of the asset. 20. Net Carrying Value The amount at which non-current assets are included in the Balance Sheet, i.e. historical cost or current value less the cumulative amounts provided for depreciation. 21. Accrual The concept that income and expenditure are recognised as they are earned or incurred, not as the money is paid or received. 22. Provision An amount put aside in the accounts for future liabilities or losses which are certain or very likely to occur but the amounts or dates or when they will arise are uncertain. 194
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Appendix 2 Table 1 Reconciliation of Monitoring Position to Annual Accounts Actual to 31/03/25 (Exec Com, 25 June 2025) £m Move Corporate Items £m Remove Approved Transfers to Reserves £m Remove Transfers from Reserves £m Revised General Fund Position per EFA £m Add: HRA Position £m Total EFA per Annual Accounts £m Statutory Accounting Adjustment £m CIES Figure per Annual Accounts £m Col 1 Col 2 Col 3 Col 4 Col 5 Col 6 Col 7 Col 8 Col 9 Community and Enterprise Resources 128.701 - - - 128.701 - 128.701 27.375 156.076 Education Resources 482.703 - - - 482.703 - 482.703 10.667 493.370 Finance and Corporate Resources 39.150 - - 0.987 40.137 - 40.137 5.136 45.273 Housing and Technical Resources 15.971 - - - 15.971 - 15.971 6.171 22.142 Housing Revenue Account - - - - - 2.981 2.981 (3.311) (0.330) Social Work Resources 235.309 - - - 235.309 - 235.309 8.993 244.302 Joint Boards 1.864 - - - 1.864 - 1.864 - 1.864 Corporate Items - (8.870) - - (8.870) - (8.870) 9.348 0.478 Corporate and Democratic Core - HRA - - - - - - - 0.105 0.105 Non-Distributed Costs - HRA - - - - - - - - - Total Resources 903.698 (8.870) - 0.987 895.815 2.981 898.796 64.484 963.280 CFCR 1.289 - - 0.314 1.603 - 1.603 Loan Charges 30.622 - - - 30.622 - 30.622 Corporate Items (5.033) 8.633 (3.600) - - - - Employers Contribution - T/f to Reserves 22.965 - (22.965) - - - - Investments - 23-24 T/f to Reserves 0.325 - (0.325) - - - - Council Tax (161.296) 0.237 - - (161.059) - (161.059) General Revenue Grant (411.592) - - - (411.592) - (411.592) Non Domestic Rates (366.018) - - - (366.018) - (366.018) Transfer from Reserves (45.050) - - 45.050 - - - Other Income and Expenditure (933.788) 8.870 (26.890) 45.364 (906.444) - (906.444) (30.035) (936.479) (Surplus)/Deficit on Provision of Services (30.090) 0.000 (26.890) 46.351 (10.629) 2.981 (7.648) 34.449 26.801 5 197
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Annual Accounts: Restatement of Monitoring Figures Reported This Appendix reconciles the monitoring figures reported to the Council’s Executive Committee (25 June 2025) to the figures in the Council’s Annual Accounts (in the Expenditure and Funding Analysis Statement and the Comprehensive Income and Expenditure Account). This is detailed below: • The starting point for the Expenditure and Funding Analysis (col 1) is the year-end outturn position shown in Appendix 1 of the report to Executive Committee, 25 June 2025), and is the monitoring surplus of £30.090 million. An adjustment is made to move the Corporate Items and an element of Council Tax from the Other Income and Expenditure to the Resources in Appendix 2 (col 2). This is where they are shown in the Annual Accounts. • Appendix 2 (col 3 and 4) then takes this monitoring surplus of £30.090 million, and removes the approved Transfer to Reserves of £26.890 million and Transfers from Reserves totalling £46.351 million, as the accounting requirements require us to remove both Transfers To and Transfers From Reserves, from these reported Committee figures. • The table in Appendix 2 then adds the HRA outturn position (col 6) to give the Council’s total position: a surplus on provision of services of £7.648 million. This represents the Council’s outturn position (General Fund plus HRA) on an accounting basis before Transfers To / Transfers From Reserves and is the position shown in the Expenditure and Funding Analysis (col 7). • Finally, the Expenditure and Funding Analysis position (col 7) is adjusted by adding the technical accounting transactions, including depreciation and pension accounting entries, which are out with the normal Council monitoring process, to arrive at the figures in the Comprehensive Income and Expenditure Statement of a deficit of £26.801 million, before the entries to reverse out the accounting transactions and to add in transfers to and from reserves. These transactions are for accounting purposes and reflect the Council spend in line with accounting guidance. They do not change the final outturn position of the Council and have no impact on the actual position of the Council and the funds available. • As detailed in above, the Expenditure and Funding Analysis shows the movement on the General Fund Reserve and HRA Reserve before any transfers to/from other reserves. These transfers relate to transfers from Other Reserves including the Repairs and Renewals Fund (including Winter Maintenance), the Insurance Fund and the Capital Fund to offset expenditure and commitments that have been charged to the Revenue Budget but where the funding to pay for these commitments sits in another Reserve and are shown in Table 3 below. 198
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• These transfers need to be taken into account to arrive at the total movement in the General Fund Reserve and HRA Reserve included in the Balance Sheet (Table 2 below). Table 2 below shows that when these transfers totalling £1.202 million are taken into account, the total General Fund and HRA position for the year is an increase of £6.444 million. This increase takes account of the final year end position of breakeven as well as all transfers to and from all reserves, including those above. Table 2 - Total Movement in General Fund Reserve and HRA Reserve General Fund £m HRA £m Total £m Closing General Fund and HRA Balance 109.772 13.221 122.993 Surplus/(Deficit) per EFA 10.627 (2.981) 7.646 Transfer (to)/from Other Reserves (see Table 3) (1.402) 0.200 (1.202) Total Movement in Year 9.225 (2.781) 6.444 Closing General Fund and HRA Balance 118.997 10.440 129.437 Table 3 - Transfers (to)/from Other Reserves General Fund £m Repairs and Renewals (including Winter Maintenance) 0.224 Insurance Fund (1.617) Capital Fund (including IT Development Fund, Central Energy Efficiency Fund, Education Capital Items Replacement) (0.191) Total Transfers to/(from) Other Reserves (1.202) 199
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1 South Lanarkshire Council Charitable Trusts Trustees’ Annual Report – for the year ended 31 March 2025 ________________________________________________________________________ The Trustees present their annual report together with the financial statements and Independent Auditors’ report for the year ended 31 March 2025. Reference and Administration Information Charity Name: South Lanarkshire Council Charitable Trusts Charity Number: SC025089 Principal Office: Finance Services Council Offices Almada Street Hamilton ML3 0AA Trustees: Finance and Corporate Resources Committee, South Lanarkshire Council Independent Auditors: Audit Scotland Structure, Governance and Management Governing Document South Lanarkshire Council Charitable Trusts includes one remaining Charitable Trust Fund / Bequest established under previous local authorities. The Trust Fund / Bequest is restricted for the purpose which it was set up. Charity Trustees The trustees of the charities are elected members (Councillors) of South Lanarkshire Council. Trustees are appointed through their election to the Finance and Corporate Resources Committee of South Lanarkshire Council. The current trustees of South Lanarkshire Council Charitable Trusts are detailed below: Councillor Alex Allison Councillor Martin Hose Councillor Walter Brogan (Depute Chair) Councillor Ross Lambie (from 12/03/2025) Councillor Matthew Buchanan Councillor Katy Loudon Councillor Andy Carmichael Councillor Hugh Macdonald Councillor Maureen Chalmers Councillor Catherine McClymont Councillor Margaret Cooper Councillor Lesley McDonald (Chair) Councillor Andrea Cowan Councillor Elaine McDougall Councillor Maureen Devlin Councillor Mark McGeever Councillor Mary Donnelly Councillor Richard Nelson (until 11/03/2025) Councillor Joe Fagan (Ex Officio) Councillor Mo Razzaq Councillor Grant Ferguson Councillor John Ross Councillor Gladys Ferguson-Miller Councillor Graham Scott Councillor Celine Handibode (Depute Chair) Councillor Kirsty Williams Councillor Graeme Horne Appendix 3 5 201
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2 South Lanarkshire Council Charitable Trusts Trustees’ Annual Report – for the year ended 31 March 2025 ________________________________________________________________________ Organisational Structure The trustees delegate the day-to-day administration of the charities to officers of the Council through the Scheme of Delegation as approved by South Lanarkshire Council on 18 May 2022. The trustees (as elected members of the Council) meet to consider and approve the Annual Accounts for South Lanarkshire Council which includes the financial statements for all South Lanarkshire Council Trust Funds. An annual report on Governance of Trust Funds is presented to the Finance and Corporate Resources Committee. This report details expenditure for the preceding financial year. Related Parties Trustees hold this position because they are elected members of South Lanarkshire Council. South Lanarkshire Council provides administration services to the Trust. Risk Management It is recognised that there is a risk that the funds of the Trusts are not used for the purpose that they were intended. To mitigate this risk, the governance arrangements in place ensure that the Finance and Corporate Resources Committee are advised of the balance and distribution of funds. In addition, the Office of the Scottish Charity Regulator (OSCR) also receive an annual report on the Trusts and their purpose. Management of Funds and Investment Policy The trustees rely upon the expertise of South Lanarkshire Council to manage the investments to ensure the maximum return at least risk to the charity is achieved. The majority of the funds of the charity are managed on behalf of the Council by Barclays Wealth. The investment objective is to provide a sustainable level of income, along with the prospect of growth in both capital and income through investment in a diversified portfolio of investments. The market value of these funds as at 31 March 2025 was £1,031,153 (2023/2024: £1,030,607). The remaining fund of the charity is managed by South Lanarkshire Council. The interest received is shown in the Statement of Receipts and Payments. During 2024/2025 income of £42,055 (2023/2024: £38,916) was received and is shown in the Statement of Receipts and Payments. Trustee Indemnity Insurance No such insurance has been taken out. 202
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3 South Lanarkshire Council Charitable Trusts Trustees’ Annual Report – for the year ended 31 March 2025 ________________________________________________________________________ Reorganisation of South Lanarkshire Council Trust Funds South Lanarkshire Council established The South Lanarkshire Charitable Trust (Charity Number SC049819) in December 2019 for the purposes of reorganising existing trust funds, including those held under South Lanarkshire Council Charitable Trusts (Charity Number SC025089). The constitution of The South Lanarkshire Charitable Trust (SC049819) is a Trust Deed granted by South Lanarkshire Council. It provides a modern constitution with appropriate purposes, powers and governance arrangements. The process of transferring the funds from South Lanarkshire Council Charitable Trusts (SC025089) to The South Lanarkshire Charitable Trust (SC049819) is ongoing. One Charitable Trust Fund / Bequest established under previous local authorities remains. Objectives and Activities The remaining fund is the Loudon Bequest Trust Fund which was used to help finance holidays for elderly people within 12 Local Authority areas in the West of Scotland. Achievements and Performance During the year to 31 March 2025, no grants were paid out. Financial Review Overview Income during 2024/2025 came from income on external investments of £31,663 (2023/2024: £30,301); interest calculated on the Trust Funds’ revenue balances of £7,295 (2023/2024: £5,692). Proceeds from the sale of investments of £3,097 (2023/2024: £2,923) were received. The trust held cash and bank balances of £179,264 (2023/2024: £144,422) as at 31 March 2025 and investments with a book value of £814,442 (2023/2024: £818,144). 203
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4 South Lanarkshire Council Charitable Trusts Trustees’ Annual Report – for the year ended 31 March 2025 ________________________________________________________________________ Reserves Policy The trusts are managed in order to allow the full potential benefit of the trusts to be realised. By ensuring distributed funds are of sufficient value to make a beneficial impact to recipients, there may be some erosion of capital. The Reserves of the Trust will be used in line with the specific requirements of the Trust. External Audit The auditor with responsibility for the audit of the accounts of South Lanarkshire Council Charitable Trusts for the year ended 31 March 2025 is: Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN Declaration The trustees declare that they have approved the trustees’ report above. Signed on behalf of the charity’s trustees Signature(s): Full Name(s): LESLEY MCDONALD Position: CHAIR OF FINANCE AND CORPORATE RESOURCES COMMITTEE Date: 25 JUNE 2025 204
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5 South Lanarkshire Council Charitable Trusts Statement of Receipts and Payments for the year ended 31 March 2025 ___________________________________________________________________________________________________________________ Note Unrestricted Funds Restricted Funds Expendable Endowment Funds Permanent Endowment Funds Total Funds (current year) Total Funds (last year) Restated £ £ £ £ £ £ Receipts Donations - - - - - - Income from investments other than land and buildings 4 - 38,958 - - 38,958 35,993 Sub Total - 38,958 - - 38,958 35,993 Receipts from Assets and Investments sales Proceeds from sale of investments 4 - 3,097 - - 3,097 2,923 Sub Total - 3,097 - - 3,097 2,923 Total Receipts - 42,055 - - 42,055 38,916 Payments External Audit Fee 8 - 2,000 - - 2,000 1,167 Investment Management Costs 7 - 3,097 - - 3,097 2,923 Administration Charge 9 - 2,115 - - 2,115 2,383 Grants and Donations 5 - - - - - 0 Purchase of Investments 4 - - 0 Total Payments - 7,212 - - 7,212 6,473 Net Receipts - 34,843 - - 34,843 32,443 Surplus / (Deficit) for the year - 34,843 - - 34,843 32,443 205
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6 South Lanarkshire Council Charitable Trusts Statement of Balances as at 31 March 2025 ___________________________________________________________________________________________________________________ Note Unrestricted Funds Restricted Funds Expendable Endowment Funds Permanent Endowment Funds Total Funds (current year) Total Funds (last year) Restated £ £ £ £ £ £ Cash and Bank Balances Opening Balance - 144,421 - - 144,421 114,031 Transfer of Assets to the South Lanarkshire Charitable Trust - - (2,053) Surplus shown on receipts and payments account - 34,843 - - 34,843 32,443 Closing Balance - 179,264 - - 179,264 144,421 Investments Market Value of Investments (Managed by Barclays Wealth) 7 - 1,031,153 - - 1,031,153 1,033,607 Total Investments - 1,031,153 - - 1,031,153 1,033,607 Signed on behalf of the charity’s trustees Signature(s): Full Name(s): LESLEY MCDONALD Position: CHAIR OF FINANCE AND CORPORATE RESOURCES COMMITTEE Date: 25 JUNE 2025 206
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7 South Lanarkshire Council Charitable Trusts Notes to the Financial Statements ___________________________________________________________________________________________________________________ 1. Basis of Accounting These financial statements have been prepared on the Receipts and Payments basis in accordance with the Charities & Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). 2. Fund Accounting Restricted funds are those funds that can only be applied for particular purposes. 3. Taxation The charity is not liable to income or capital gains tax on its charitable activities. 4. Trustee Remuneration, Expenses and Related Party Transactions • No remuneration or expenses were paid to charity trustees or persons connected to a trustee during the year. • The trust received income from external investments of £31,663 (2023/2024: £30,301) and £7,295 (2023/2024: £5,692) from South Lanarkshire Council. All transactions incoming and outgoing are made via South Lanarkshire Council’s accounts. • Proceeds from the sale of the Loudon Bequest investment of £3,097 (2023/2024: £2,923) were received. • There were no transactions between the charity and any trustee or any connected person during the year. 5. Grants In the year to 31 March 2025, there were no grants were paid out as the process of transferring the funds from South Lanarkshire Council Charitable Trusts (SC025089) to The South Lanarkshire Charitable Trust (SC049819) was ongoing. During 2023/2024 no grants were paid out. 207
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8 South Lanarkshire Council Charitable Trusts Notes to the Financial Statements ___________________________________________________________________________________________________________________ 6. Cash and Bank Balances During the year the Trust’s balances were held by South Lanarkshire Council, which manages the administration of the funds on behalf of the Trustees. No costs were incurred by the Trust for this administration. South Lanarkshire Council also acts as the banker for the charity and as detailed above, all transactions incoming and outgoing are made via the Council’s accounts. The balances are repayable on demand and interest is payable on balances. 7. Investments The charity has one investment managed by Barclays Wealth £1,031,153 (2023/2024: £1,033,607) on behalf of the Council with an objective of achieving a balance between income and capital growth subject to a medium level of risk. Barclays Wealth charged a portfolio management fee of £3,097 (2023/2024; £2,923). 8. External Audit Fee The external audit fee for 2024/2025 £2,000 (2023/2024: £1,167) is paid to Audit Scotland. 9. Administration Charge A charge for administration of the Trust Fund for 2024/2025 £2,115 (2023/2024: £2,383) is paid to South Lanarkshire Council. 208
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Internal Audit Activity as at 30 May 2025 1. Purpose of Report 1.1. The purpose of the report is to:- update the Risk and Audit Scrutiny Committee (RASC) on progress of the Internal Audit service in the period 12 April to 30 May 2025 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that progress be noted. 3. Background 3.1. Findings from internal audit assignments are reported to the Committee throughout the year. The last progress report to the Committee was in May 2025 and reported on work completed in the period 25 January to 11 April 2025. This report covers all work completed in the period 12 April to 30 May 2025. Performance information is also included. 4. Delivery of the 2024/2025 Internal Audit Plan: Progress and Performance 4.1. The 2024/2025 Audit Plan, presented to the Risk and Audit Scrutiny Committee on 26 March 2024, contained 54 assignments. Fifty-two assignments were completed to at least draft report stage by 30 April 2025 with 2 audit assignments, relating to investigative work, still in progress at that date. Each of the audits undertaken in the year were conducted in conformance with the Public Sector Internal Audit Standards (PSIAS). 4.2. Appendix 1 lists all assignments completed in the period 12 April to 30 May 2025 together with a summary of overall assurances from each area of work. 4.3. Key performance indicators for the year to 31 March 2025 are included at Appendix 2. 4.4. Members are asked to note progress with the completion of the 2024/2025 Internal Audit Plan. 6 209
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5. Global Internal Audit Standards 5.1. The Internal Audit function within South Lanarkshire Council (SLC) complied with the PSIAS in its delivery of the 2024/2025 Internal Audit Plan. 5.2. The new Global Internal Audit Standards (GIAS) will apply from 1 April 2025 to assignments included within the 2025/2026 Internal Audit Plan. All future activity reports on the 2025/2026 Plan to the Committee will reflect the requirements of these new Standards. 6. Progress against Strategy 6.1. The PSIAS require progress against the audit strategy to be monitored and reported to the Committee as part of regular monitoring reports that are presented at each meeting. 6.2. Delivery of the strategy in 2024/2025 has been evidenced by the completion of the Internal Audit Plan in-year and monitored through the performance indicators regularly reported to the Committee. 7. Employee Implications 7.1. There are no employee issues. 8. Financial Implications 8.1. Internal Audit, during 2024/2025, materially utilised its allocated budget. 9. Other Implications 9.1. The main risks to the delivery of the Audit Plan are, generally, vacancies and team up-skilling requirements, unforeseen service demands and delays with client sign-off. These are mitigated by coaching and training, regular meetings and escalation processes as well as inclusion of contingency time within the annual plan. The risk of significant, subsequent amendments to the Plan, arising from a change in the Council’s priorities or risks, is mitigated by regular reassessment of capacity and Audit Plan content to allow incremental adjustments as the year progresses. 9.2. There are no implications for sustainability in terms of the information contained in this report. 10. Integrated Impact Assessment and Consultation Requirements 10.1. There is no requirement to equality assess the contents of this report. 10.2. Heads of Service are consulted on each and every audit assignment. Jackie Taylor Executive Director (Finance and Corporate Resources) 3 June 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent 210
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Previous References Risk and Audit Scrutiny Committee-26 March 2024 (Internal Audit Plan 2024/2025) Risk and Audit Scrutiny Committee-25 June 2025 (Internal Audit Annual Assurance Report 2024/2025) List of Background Papers Figtree extracts of Action Plans Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 211
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Assignments completed 25 January to 11 April 2025. Appendix 1 Job Number Assignment name Draft Issue Final Issue Assurance Info I611219 Service Review 12/11/2024 31/03/2025 Analysis of data to assist with Service review. I410104 Sheltered Housing Cash 07/02/2025 07/02/2025 Follow up not required as no cash now held. I611226 Community Group Spend 19/03/2025 19/03/2025 Provision of advice and guidance around recovery of grant. I210120 Fusion 31/03/2025 31/03/2025 Participated in Fusion project. I341122 Sustainability 31/03/2025 31/03/2025 Position Statement – see Appendix 3. I410099 City Deal 31/03/2025 31/03/2025 Follow up of audit actions to confirm implemented. I612217 Data Analytics Strategy 16/04/2025 16/04/2025 Development of overall strategy. A separate report on the proposed data strategy and approach will be presented to RASC in the second half of 2025/2026. I674234 Primary School 16/04/2025 20/05/2025 Theft of cash. Action Plan developed to improve controls. Job Number Assignment name Draft Issue Final Issue Assurance Info External Clients I913241 South Lanarkshire Leisure and Culture (SLLC) Shared Systems 31/03/2025 31/03/2025 Reported to SLLC I913242 SLLC Shared Systems 31/03/2025 31/03/2025 Reported to SLLC I914244 SLLC Follow Up - Formal 09/04/2024 09/04/2024 Reported to SLLC I924250 Lanarkshire Valuation Joint Board Follow Up (LVJB) 2024/2025 05/03/2025 05/03/2025 Reported to LVJB I925251 LVJB Shared Systems 31/03/2025 31/03/2025 Reported to LVJB I934256 Scottish Educational Establishments Management Information System (SEEMIS) Follow Up 31/03/2025 31/03/2025 Reported to SEEMIS I923263 LVJB Voter Authority Certificate 24/03/2025 05/05/2025 Reported to LVJB 212
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Key audit performance indicators Appendix 2 Indicator Numbers Percentage Target Comment Assignments delivered within budget 24/33 73% 80% A further 12% were marginally over the budgeted number of days (within 2 days of target). Draft reports delivered within 6 weeks of file review 32/33 97% 80% 2024/2025 Audit Plan completed to draft by 30 April 2025 52/54 96% 100% Outstanding assignments relate to investigative work. Internal Audit recommendations delivered on time 8/8 100% 90% Client to agree findings and actions within 4 weeks of draft issue 32/32 100% 80% 213
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I341122 Sustainability – Position Statement Appendix 3 The Council’s strategic risk was updated again in 2024/2025 to reflect the fact that the Council’s inability to take the necessary action is due to funding constraints. Although mitigating controls are identified, and a series of actions being taken (across different Council strategies and action plans) these are currently unable to reduce the risk score significantly and the risk remains a very high strategic risk for SLC. It continues to be clear that achieving the aim of no longer generating carbon emissions from the Council’s non-domestic buildings by 2038 will be extremely challenging for reasons including costs, timescales and capacity. It is essential that future use of these buildings is understood so that plans can be made. Approaches to progress are being considered to respond to a motion passed by the Council in December 2022. Actions agreed related to producing an energy demand reduction plan; adopting the highest possible standards of energy efficiency for all South Lanarkshire Council funded building projects, and in the forthcoming Residential Design Guide, and a kick starting of the local green economy. Detailed “route map” for decarbonising heat in buildings will require to be underpinned by a comprehensive financial strategy, a supply chain and a skilled workforce to deliver this agenda. New Climate Change (Emissions Reduction Targets) (Scotland) Act 2024 now sees the Scottish Governments annual and interim targets for cutting greenhouse gas emissions replaced by a carbon budget-based approach which utilises five-year carbon budgets to measure efficiency every five years to assess progress towards net zero by 2045. New policies were announced (including car use reduction / increasing electric charging points) alongside the new legislation. A new Climate Change Plan for 2025 to 2040 is expected. Although the Scottish Government have now said that their interim target to cut emissions by 75% by 2030 is out of reach, their commitment to net zero by 2045 remains. The Council remain committed to achieving net zero but a report to the Climate Change and Sustainability Committee, March 2025 is clear that the Council will not reach the zero emissions target by 2045 at the current pace of emissions reductions. Clear actions, in response to the climate emergency, were reported to the Climate Change and Sustainability Committee which require to be underpinned by a comprehensive financial strategy once funding options have been clarified. The current focus for the council is therefore on finalising the ‘route map’ as to how the Council will get to net zero by 2045. Scope 1 emissions are the focus for the first phase of emission reduction mapping as there is an established baseline and a clear understanding of the challenges of decarbonising the council’s buildings and fleet. A scope 1 net zero route map would coordinate action, set clear and achievable emission targets and align spend to achieve those targets. The route map would not only address the council’s legal obligations but would also address the recommendations in the Audit Scotland report, Scotland’s councils’ approach to addressing climate change, published in September 2022. This report stated that Councils need to be more transparent about gaps between the level of impact of planned actions and the scale of the challenge, and recommended a series of actions in response to the climate emergency: The Council are noted as committed to reducing emissions from its buildings ‘as much as possible’ with the development of the draft Local Heat and Energy Efficiency Strategy (LHEES) being a key area to compliment and facilitate progress of the aims and objectives of the Sustainable Development and Climate Change Strategy whilst also focusing on legislative compliance relating to fuel poverty, heat networks, standards for social housing and national planning frameworks. LHEES was approved by the Climate Change and Sustainability Committee in June 2024. Although in its early stages, is intended to complement and support the Sustainable Development and Climate Change Strategy 2022-2027 and the Community Plan and Local Housing Strategy. It encompasses the requirements of relevant national policies (such as the Heat in Buildings strategy and legislation relating to fuel poverty, heat networks, standards for social housing and national planning frameworks). 214
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The LHEES does not commit to any expenditure. Funding options will need to be developed and reported on a project-by-project basis. It is anticipated that resourcing requirements will be reported to the relevant management teams when identified and that the Council will use the LHEES to inform the development of capital and revenue programmes. A Delivery Plan supports the Strategy and sets out how the Council will support implementation of the LHEES. It is an action plan that should enable the Council and its partners to work towards the delivery of the changes identified in the Strategy. It focuses on a fabric-first approach to transitioning to net zero emissions heating systems and developing heat networks and on actions for the next five years. It covers both Council properties and properties across South Lanarkshire. It aims to provide a plan for decarbonising heat in buildings and improving their energy efficiency to meet statutory national targets by 2045. However, it is at an early stage and reflects developments to date and projects already underway rather than a finalised set of actions. It will require further work in the next year. A key priority for the delivery of the LHEES is for the Council to develop a stakeholder engagement plan. This will draw on the stakeholder identification and mapping work which took place as part of the LHEES development. Based on the stakeholder identification work undertaken as part of the LHEES Strategy development, the Council will work with key stakeholders to progress the actions identified. An energy demand reduction plan is being developed as part of the HTR Asset Management Plan. A paper on progress with the Plan was presented to the Climate Change and Sustainability Committee in May 2024. The report stated that some action had been taken and further action for 2024/2025 was identified with the motion specifically focusing on no / low-cost ways to reduce bills. The Council’s strategy and action plan recognise that underlying all the corporate decisions there needs to be consistent consideration of the actual implications for the residents and communities in South Lanarkshire, particularly the impact of decisions in areas of existing challenge, such as fuel and food poverty or other areas of inequality. It is planned that there will be further incremental steps in 2025/2026 in the areas of carbon reduction mitigation and adaptation and developments that focus on meeting the needs of the present without compromising the ability of future generations to meet their own needs. 215
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: 2024 National Fraud Initiative Exercise 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise the Risk and Audit Scrutiny Committee (RASC) of matches resulting from the 2024 National Fraud Initiative (NFI) exercise and of the proposed target number of investigations to be undertaken in 2024/2025 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendations:- [recs] (1) that the results of the matching exercise and the initial target number of investigations be noted; and (2) that the 2024 to 2028 NFI Strategy, and associated 5 objectives, be noted. [1recs] 3. Background 3.1. NFI is a counter fraud exercise which takes data from councils and other public bodies and cross matches to identify the potential for fraud. Councils are then informed of the resulting indicative matches. It is the responsibility of councils to investigate the data matches that are identified for their organisation. The Cabinet Office has responsibility for the NFI throughout the UK however, Audit Scotland co-ordinates the exercise within Scotland. 3.2. South Lanarkshire Council (SLC) has taken part in the NFI exercise since 2004/2005. The full exercise, that takes place every second year, involves Council wide comparisons including benefits, payroll, creditors, council tax, licences and blue badge holders. This data is matched to other benefits and payroll data as well as Department of Work and Pensions (DWP) deceased persons’ records and the Electoral Register. Data extracts from Council systems were submitted by the due dates in 2024. 3.3. Within SLC, Internal Audit co-ordinates the NFI exercise and uploads the relevant data sets. Each Resource is assigned responsibility for investigating matches relevant to them. Internal Audit prepared a project plan at the start of this exercise and will periodically report progress against this to the Council’s External Auditors. 4. 2024 Match Results 4.1. There are nine separate match areas covered in the 2024 exercise. These are listed in Appendix 1. 7 217
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4.2. SLC have been provided with a list of matches from the 2024 NFI exercise. Datasets continue to be refreshed and, therefore, the number of matches may change marginally going forward. 4.3. The totals recorded in Appendix 2 reflect SLC matches as of 2 April 2025. At that date, there were a total of 32,675 matches. A comparison of matches across the 2022 and 2024 exercises is detailed in Appendix 2. For the 9 match areas, 7 categories had a decrease and 2, an increase in matches. 4.4. The greatest decrease in the number of matches relates to Creditors, Housing Tenants and Waiting Lists. In relation to Creditor matches, this decrease is, at least in part, attributable to the reduced dataset that was uploaded, covering only the post- implementation period of Oracle Fusion. 4.5. Normally, the last 3 financial years is extracted and uploaded for matching, which for this Exercise would have covered 1 October 2021 to 30 September 2024, however, guidance stated that if there had been a recent change in your system then, as a minimum, payment history data from 1 April 2024 would be accepted. Extracts covering the period 1 January to 30 September 2024 were, therefore, included for upload from the new Oracle Fusion system, which has, inevitably, resulted in a reduced number of matches identified in this area. 4.6. For Housing matches, 1,308 HMRC (His Majesty’s Revenue and Customs) matches are included in Housing Tenant matches for 2022, which are still to be released for 2024. The number of matches may, therefore, increase. The reduction in Waiting List matches is likely due to the ongoing re-registration exercise, resulting in the cancellation of housing applications on SLC systems. 4.7. The greatest increase in the 2024 matches is within Single Person Discount (SPC) as a result of two new match reports. Firstly, matching to all other datasets within NFI, and, secondly, specifically to deceased records where a Council Taxpayer is deceased, but the Council may not have been notified. There are an additional 11,091 matches across both these new match reports, and work will be undertaken by the Service to determine how these will be investigated. 4.8. Work to investigate matches identified within the NFI exercise will reflect the review work that is already ongoing to avoid any duplication and ensure investigative resources are used effectively. 4.9. An initial target number of investigations has been determined based on risk and passed to Service key contacts best placed to examine the match to review and feedback on any further matches to be included within the target. Internal Audit facilitate and report on the outcome from the Exercise. There is no obligation to investigate every match but the decision to restrict investigations must be risk based. In 2024, the initial target number of investigations has been determined by the following factors:- those that were denoted as high risk by NFI data analytics those that were identified as a key report those that were highlighted within the Fraud Report section outcomes from previous exercises new match reports for 2024 218
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4.10. This resulted in a total of 2,887 ‘high risk’ matches (excluding the majority of SPD) being identified as an initial target number. A breakdown of these is provided at Appendix 3. Heads of Service and key contacts have now been provided with their 2024 matches and have been asked to consider all match reports within their Service and advise of any further matches or reports which they think should form part of the target number based on their knowledge of any potential areas of concern. 4.11. Councils are still awaiting the release of further matches for 2024, including Small Business Bonus Scheme (SBBS) and HMRC matches. Upon receipt of these, analysis will be undertaken and, where required, target numbers will be increased. Consistent with previous year’s approach, targets can be amended as investigations progress to reflect the outcomes of the reviews and ensure that resources are directed to areas that are likely to produce the most significant outcomes. 4.12. Investigations have a proposed deadline for investigation of 31 December 2025. It is anticipated that most investigations will have been completed ahead of this date and further updates on progress will be reported during 2025/2026. 4.13. As the Housing Benefit Fraud Section transferred to the DWP Fraud and Error Service (FES), housing benefit fraud is no longer investigated by the Council. Initial NFI investigations still require to be undertaken by the Council and, if this indicates a potential fraud, the case passed to FES for further investigation. An outcome will be recorded through the NFI website once FES have concluded their investigation. This may result in a delay in closing some investigations. 5. 2024 to 2028 NFI Strategy 5.1. In February 2025, NFI published its strategy for 2024 to 2028. The intention of the strategy is to commit to and set out the NFI’s agenda for the next 4 years, giving a clear vision for both new and existing users. It is also intended that the strategy provides a holistic approach to data matching built upon public and private partnerships. 5.2. The strategy includes a vision statement to “better detect and prevent fraud by utilising data and technology from the public and private sector” and includes five objectives to achieving this vision. Each objective is underpinned by a series of specific, measurable actions that help ensure that the relevant objective can be delivered in a practical way and articulate how services, products and data matching techniques will be improved. A copy of the strategy is included at Appendix 4 for information. 6 Employee Implications 6.1. Internal Audit is responsible for co-ordinating the Exercise within SLC which includes facilitating the issue and receipt of information requests from other public bodies in relation to NFI cases, undertaking a limited number of investigations and reporting on employee benefit fraud cases, if required. A total of 45 days has been allocated in the 2025/2026 Internal Audit Plan. 6.2. In addition to the time allocated by Internal Audit, Resources are also required to allocate time to investigations and record time to complete. Every effort is made to ensure that the time spent by Resources investigating matches is commensurate with outcome. 7. Financial Implications 7.1. Other than employee time, there is no cost associated with NFI. 219
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8 Other Implications 8.1. Fraud Risk is recognised as one of the top risks facing SLC. This risk is significant as it can adversely affect the delivery of Council objectives and erode valuable resources. It is therefore important that the risk of fraud is soundly managed. 8.2. The NFI exercise is a valuable counter fraud exercise which has continued to identify fraud and error within the Council. 8.3. When a fraud or overpayment occurs, steps will usually be taken to recover the loss. Services are expected to examine why the loss occurred and demonstrate a change in their processes and procedures accordingly. 8.4. There are no sustainability issues associated with the content of this report. 9. Integrated Impact Assessment and Consultation Requirements 9.1. As the risks associated with the NFI are carried by the Cabinet Office and the Council is bound by statute to participate, there is no need to undertake a separate equality impact assessment. 9.2. Employees and SLC residents are informed of the commencement of the NFI exercise through a variety of sources. There is no requirement to undertake any further consultation in terms of the content of this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 2 June 2025 Link(s) to Council Values / Priorities/Outcomes Accountable, effective, efficient, and transparent Previous References Risk Audit Scrutiny Committee - 27 June 2023 (2022 National Fraud Initiative Exercise) Risk Audit Scrutiny Committee - 24 September 2024 (2022 National Fraud Initiative Exercise) List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 220
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List of “matched” areas in the 2024 NFI Exercise Appendix 1 Match area Match between Purpose of Match/Fraud Risk Housing Benefits (HB) HB to Student Loans To identify individuals claiming benefits, whose student loan eligibility results in them being ineligible for those benefits. HB to Housing Tenants (within SLC and between other authorities) To identify possible tenancy fraud and/or housing benefit fraud where an individual appears to be resident at two different addresses. HB to taxi drivers (within SLC and between bodies) To identify where housing benefit claimants have failed to declare income that may remove entitlement to the benefit or reduce the benefit payable. HB to CTRS To identify anyone claiming housing benefit and council tax reduction from one or more local authority at the same time. HB to DWP Deceased To identify where a claimant has passed away and who was in receipt of DWP benefits which would not have stopped HB to Waiting List To identify where an individual appears to be resident at two different addresses, as the address on the waiting list application is different to the address on the benefit system Council Tax Reduction Scheme (CTRS) CTRS to Payroll (within SLC and between other bodies) To identify where CTRS claimants have failed to declare income that may remove entitlement to benefit or reduce the benefit payable. CTRS to pensions To identify where CTRS claimants have failed to declare pension income that might remove entitlement to benefit or reduce the benefit payable. CTRS to CTRS (within SLC and between other authorities) To identify an individual claiming CTRS from one or more local authorities. CTRS to HB (within SLC and between other authorities) To identify where an individual is in receipt of council tax reduction and housing benefit from one or more local authorities simultaneously which may remove or reduce entitlement to the reduction. CTRS to Housing Tenants (within SLC and between other authorities) To identify possible cases of tenancy fraud and/or CTRS fraud where an individual appears to be resident at two different addresses. CTRS to taxi drivers (within SLC and between bodies) To identify where CTRS claimants have failed to declare income that may remove entitlement to benefit or reduce the benefit payable. CTR Scheme to DWP deceased To identify where a person has passed away but may be in receipt of CTR after the date of death 221
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Payroll Payroll to payroll (within SLC and between bodies) To identify individuals who may be committing employment fraud by failing to work their contracted hours because they are employed elsewhere or are taking long-term sickness absence from one employer and working for another employer at the same time. Payroll to Creditors To identify employees who are also creditors where there may be a conflict of interests or corruption. Payroll to Pensions To identify employees who have gone back into employment after drawing a pension that could result in an abatement of pension. Housing Tenants (HT) HT (within SLC and between bodies) To identify where an individual appears to be resident at two different addresses suggesting possible cases of subletting or dual tenancies. HT to HB To identify possible cases of tenancy fraud and/or housing benefit fraud, where an individual appears to be resident at two different addresses. HT to CTR Scheme To identify possible causes of tenancy fraud and/or incorrect claims for CTR where an individual appears to be resident at two different addresses. HT to State Benefits To identify possible cases of tenancy fraud against the organisation i.e. where an individual appears to be resident at two different addresses. HT to Waiting Lists (between bodies) To identify where an individual appears to be resident at two different addresses as they have registered on the waiting list using a different address to their tenancy address suggesting possible cases of subletting or dual tenancies. HT to DWP Deceased To Identify where the tenant has died, but the DWP has not been informed. Waiting Lists Housing Waiting Lists to Housing Tenants (within SLC and between bodies) To identify where an individual appears to have registered on the waiting list using a different address to the one on the housing rents system suggesting possible undisclosed changes in circumstances or that false information has been provided. Housing Waiting List to Housing Waiting List (within SLC and between bodies) To identify where an individual appears to have registered on the waiting list using two different addresses. Housing Waiting Lists to Housing Benefit Claimants (within SLC and between bodies) To identify where an individual appears to have registered on the waiting list using a different address from the one on the housing benefit system. Waiting List for DWP deceased To identify an applicant who has died but is still shown on the waiting list. Blue Badges Blue badge to blue badge To identify individuals who hold more than one Blue Badge. 222
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Blue badge to DWP deceased person To identify cases where a permit holder has died, but the local authority may not have been notified. Procurement Procurement – payroll to Companies House (Director) To identify potential undeclared interests that have given a pecuniary advantage. Creditors Duplicate creditors by Duplicate creditor payments and details To identify instances where the same supplier has been recorded against more than one reference number on the system, thus increasing the potential for creditors to obscure fraudulent activity. To identify possible duplicate payments. VAT overpaid This test identifies instances where VAT may have been overpaid. Council Tax Single Person Discount (SPD) Council Tax to Electoral Register To identify where SPD is being claimed and there is more than one person aged 18 or over registered within the property on the Electoral Register. SPD to Deceased To identify where a Council Taxpayer has died, but the Council has not been notified Single Person discount award to other government bodies To identify individuals who have declared they are living alone but have not declared they are living with a partner or non-dependant in the household. 223
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Comparison of 2022 and 2024 NFI Exercises Appendix 2 2024 2022 Increase/ (Decrease) Area Total Total Total Housing Benefits Matches 130 137 (7) Total Council Tax Reduction Scheme Matches 1,625 1,863 (238) Total Payroll Matches 115 160 (45) Total Tenant Matches 547 1,796 (1,249) Total Waiting List Matches 666 1,268 (602) Total Blue badge Matches 1,365 1,339 26 Total Creditor Matches 1,242 4,488 (3,246) Total Procurement Matches 39 202 (163) Total Single Persons Discount Matches 26,946 16,748 10,198 Overall matches 32,675 28,001 4,674 224
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Target Investigations Appendix 3 Area Total Target No. Anticipated Target Date Total Housing Benefits Matches 130 91 31/12/2025 Total CTRS Matches * 1,625 382 31/12/2025 Total Payroll Matches 115 78 31/12/2025 Total Tenant Matches 547 255 31/12/2025 Total Waiting List Matches * 666 127 31/12/2025 Total Blue badge Matches 1,365 1,365 31/12/2025 Total Creditor Matches 1,242 144 31/12/2025 Total Procurement Matches 39 39 31/12/2025 Total Single Persons Discount Matches ** 26,946 406 31/12/2025 Total 32,675 2,887 * This is an interim target. Depending on the outcome and employee resources available, this number may be increased. ** SPD matches are sent to our external provider, Data Tank, who screen and compare them to matches they are reviewing/have reviewed for SLC as part of their rolling programme of data checks in this area. The target number will be increased on receipt of Data Tank results, with NFI outcomes recorded only for those matches identified by NFI and not through Data Tank rolling reviews to date. 225
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2024 to 2028 NFI Strategy Appendix 4 Objective One: Evolve Our Products Through Innovation We will develop and deliver high impact biennial National Exercises that achieve significant counter fraud outcomes for taxpayers and participants; We will evaluate and integrate new tools and advanced technologies into our products, including AI and machine learning, making them easy to use and meeting the future needs of our participants; and We will provide increased opportunities for voluntary participation and the use of the NFI’s products to help maximise fraud outcomes across the public and private sector. Objective Two: Increase Data Access and Insight We will ensure that the highest-value NFI datasets are refreshed more regularly to improve the accuracy and effectiveness of data matches; We will deliver a pipeline of data-matching pilots that will identify and evaluate new data sources that demonstrate clear counter fraud potential and address the new and evolving fraud risks of NFI participants before wider implementation; and We will improve our matching techniques to reduce false positives and improve the prioritisation of data matches by refining matching rules, and risk scoring through predictive analytics. Objective Three: Uphold the Highest Standards of Service Quality and Data Security We will undertake an annual review with our stakeholders and the technology sector to identify opportunities for service and product improvement and seek regular feedback; and We will prioritise our internal and external data security, policy and governance mechanisms to protect and safeguard the data we are trusted to hold. Objective Four: Improve Training and Support We will expand the NFI’s participant training programme to provide bespoke learning and a full induction for all new contacts within six months of appointment; We will provide a dedicated support service and provide quality guidance for participants; and We will deepen the NFI Team’s counter fraud and data analytics expertise through targeted training and development opportunities, allowing us to better support participants. Objective Five: Enhance Engagement to Maximise Outcomes We will deliver an engagement plan and programme for our participants to co-design our products and pilots, enhance collaboration and maximise outcomes; and We will engage and share best practices on the matching of data with national and international public sector organisations in order to create new partnerships and collaboration opportunities. 226
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 25 June 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Forward Programme for Future Meetings 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of the forward programme for the meetings of the Risk and Audit Scrutiny Committee to 25 August 2026 invite members to suggest topics for inclusion in the Committee’s forward programme [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [recs] (1) that the report and the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 25 August 2026, attached as an Appendix to the report, be noted. [1recs] 3. Background 3.1. As part of a range of improvement measures introduced as a result of Audit Scotland’s report on the Audit of Best Value and Community Planning (2009), an Action Plan was prepared. One of the actions was to include, as a standard agenda item, a list of items proposed for consideration at subsequent meetings of this Committee to provide an opportunity for members to inform future agendas. The outline forward programme to 25 August 2026 is attached, for members’ information, as an Appendix to the report. 4. Employee Implications 4.1. There are no employee implications. 5. Financial Implications 5.1. There are no financial implications. 6. Climate Change, Sustainability and Environmental Implications 6.1. There are no Climate Change, Sustainability or Environmental implications in terms of the information contained within this report. 7. Other Implications 7.1. There are no risk implications in terms of the information contained within this report. 8 227
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8. Integrated Impact Assessment and Consultation Requirements 8.1. The report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 20 May 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Executive Committee 8 July 2009 List of Background Papers Audit Scotland Audit of Best Value and Community Planning Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Elizabeth-Anne McGonigle, Administration Adviser Tel: 0738 5403101 E-mail:- elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 228
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APPENDIX – RASC OUTLINE FORWARD PROGRAMME Meeting Date Item Responsibility 30 September 2025 External Auditor’s Annual Report to South Lanarkshire Council 2024/2025 External Audit Audited Annual Accounts 2024/2025 Head of Finance (Strategy) Audit Scotland Best Value Thematic Report External Audit Internal Audit Activity Report Audit and Compliance Manager Year End Insured Risks Report 2024/2025 Head of Finance (Transactions) Year End Risk Management Report 2024/2025 and Review of Council’s Top Risks 2025/2026 Head of Finance (Transactions) 9 December 2025 Internal Audit Activity Report Audit and Compliance Manager Audit Scotland Report: Local Government in Scotland Overview 2024 Head of Communications and Strategy Performance and Review Scrutiny Forum Annual Update Head of Communications and Strategy Good Governance Update Head of Administration and Legal Services 2025/2026 Six Monthly Fraud Report Audit and Compliance Manager Global Internal Audit Standards - Update Audit and Compliance Manager 10 March 2026 Internal Audit Activity Report Audit and Compliance Manager 2026/2027 Internal Audit Plan Audit and Compliance Manager 229
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Fraud Statistics Six Monthly Update 2025/2026 Audit and Compliance Manager Annual Audit Plan External Audit 26 May 2026 Internal Audit Activity Report Audit and Compliance Manager 2025 NFI Exercise Audit and Compliance Manager Audit Scotland – Financial Bulletin 2024/2025 Head of Finance (Strategy) Financial Resources Scrutiny Forum Activity Head of Finance (Strategy) 23 June 2026 Internal Audit Assurance Report 2025/2026 Audit and Compliance Manager • Annual Governance Statement for 2025/2026 and Significant Governance Areas for Quarter 4 Progress Report Head of Administration and Legal Services Unaudited Annual Accounts 2025/2026 Head of Finance (Strategy) 25 August 2026 Internal Audit Activity Report Audit and Compliance Manager Year End Insured Risks Report 2025/2026 Head of Finance (Transactions) Year End Risk Management Report 2025/2026 and Review of Council’s Top Risks 2026/2027 Head of Finance (Transactions) Fraud Statistics Annual Report 2025/2026 Audit and Compliance Manager N.B:- Audit Scotland national studies and reviews will appear as a recurring item but the frequency and subject matter will vary according to their programme. 230