Agenda Document Pack - Moray Council - 25/09/2024
Moray Council · 25 September 2024
Back to Moray Council — 25 September 2024 and its agenda
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Moray Council Wednesday, 25 September 2024 NOTICE IS HEREBY GIVEN that a Meeting of the Moray Council is to be held at Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Wednesday, 25 September 2024 at 09:30. BUSINESS 1. Sederunt 2. Declaration of Group Decisions and Members Interests * 3. Resolution Consider, and if so decide, adopt the following resolution: "That under Section 50A (4) and (5) of the Local Government (Scotland) Act 1973, as amended, the public and media representatives be excluded from the meeting for Items 16 and 17 of business on the grounds that it involves the likely disclosure of exempt information of the class described in the relevant Paragraphs of Part 1 of Schedule 7A of the Act.” 4. Minutes 4a. Minute of Special Meeting of Moray Council on 11 June 2024 7 - 8 4b. Minute of Meeting of Moray Council on 13 August 2024 9 - 16 5. Notice of Motion - Winter Fuel Payments 17 - 20 6. Notice of Motion - Action to Reduce Seagull Numbers in Elgin 21 - 24 7. Written Questions ** Page 1
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8. Financial Reserves Policy Report by the Depute Chief Executive (Economy, Environment and Finance) 25 - 40 9. Savings Delivery Plan Report by the Depute Chief Executive (Economy, Environment and Finance) 41 - 60 10. Connected Charities Audited Annual Accounts 1 April 2023 to 31 March 2024 Report by the Depute Chief Executive (Economy, Environment and Finance) 61 - 84 11. Treasury Management Prudential Indicators Report by the Depute Chief Executive (Economy, Environment and Finance) 85 - 98 12. Change to Calendar of Meetings Report by the Depute Chief Executive (Education, Communities and Organisational Development) 99 - 102 13. Climate Adaptation Benchmarking 2023 Report by the Depute Chief Executive (Economy, Environment and Finance) 103 - 130 14. Climate Change Plan and Routemap to Net Zero 2024 Report by the Depute Chief Executive (Economy, Environment and Finance) 131 - 196 15. Moray Council Bus Revolution Phase 2 Report by the Depute Chief Executive (Economy, Environment and Finance) 197 - 234 16. Cultural Quarter Governance Models [Para 8 and 9] • 8 & 9. Information on proposed terms and/or expenditure to be incurred by the Authority; 17. Former Offices [Para 6 8 and 9] • 6. Information relating to the financial or business affairs of any particular person(s); • 8 & 9. Information on proposed terms and/or expenditure to be incurred by the Authority; Page 2
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Watching the Meeting You can watch the webcast live by going to: http://www.moray.gov.uk/moray_standard/page_43661.html Webcasts are available to view for 1 year following the meeting. You can also attend the meeting in person, if you wish to do so, please come to the High Street entrance door and a member of staff will be let into the building. Page 3
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GUIDANCE NOTES * Declaration of Group Decisions and Members Interests - The Chair of the meeting shall seek declarations from any individual or political group at the beginning of a meeting whether any prior decision has been reached on how the individual or members of the group will vote on any item(s) of business on the Agenda, and if so on which item(s). A prior decision shall be one that the individual or the group deems to be mandatory on the individual or the group members such that the individual or the group members will be subject to sanctions should they not vote in accordance with the prior decision. Any such prior decisions will be recorded in the Minute of the meeting. ** Written Questions - Any Member can put one written question about any relevant and competent business within the specified remits not already on the agenda, to the Chair provided it is received by the Proper Officer or Committee Services by 12 noon two working days prior to the day of the meeting. A copy of any written answer provided by the Chair will be published on the Council’s committee management system by 4pm the day before the meeting. The Member who has put the question may, after the answer has been published, ask one supplementary question directly related to the subject matter at the meeting, but no discussion will be allowed. No supplementary question can be put or answered more than 10 minutes after the Council has started on the relevant item of business, except with the consent of the Chair. If a Member does not have the opportunity to put a supplementary question because no time remains, then he or she can submit it in writing to the Proper Officer who will arrange for a written answer to be provided within 7 working days. Page 4
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MORAY COUNCIL Moray Council SEDERUNT Councillor Kathleen Robertson (Chair) Councillor Donald Gatt (Depute Chair) Councillor James Allan (Member) Councillor Peter Bloomfield (Member) Councillor Neil Cameron (Member) Councillor Tracy Colyer (Member) Councillor Theresa Coull (Member) Councillor John Cowe (Member) Councillor John Divers (Member) Councillor Amber Dunbar (Member) Councillor Jérémie Fernandes (Member) Councillor David Gordon (Member) Councillor Juli Harris (Member) Councillor Sandy Keith (Member) Councillor Scott Lawrence (Member) Councillor Marc Macrae (Member) Councillor Paul McBain (Member) Councillor Neil McLennan (Member) Councillor Shona Morrison (Member) Councillor Bridget Mustard (Member) Councillor Derek Ross (Member) Councillor John Stuart (Member) Councillor Draeyk van der Horn (Member) Councillor Sonya Warren (Member) Councillor Ben Williams (Member) Clerk Name: Tracey Sutherland Clerk Telephone: 07971 879268 Clerk Email: committee.services@moray.gov.uk Page 5
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MORAY COUNCIL Minute of Special Meeting of the Moray Council Tuesday, 11 June 2024 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Councillor James Allan, Councillor Peter Bloomfield, Councillor Neil Cameron, Councillor Tracy Colyer, Councillor Theresa Coull, Councillor John Cowe, Councillor John Divers, Councillor Jérémie Fernandes, Councillor Donald Gatt, Councillor David Gordon, Councillor Juli Harris, Councillor Sandy Keith, Councillor Scott Lawrence, Councillor Graham Leadbitter, Councillor Marc Macrae, Councillor Paul McBain, Councillor Neil McLennan, Councillor Shona Morrison, Councillor Bridget Mustard, Councillor Kathleen Robertson, Councillor Derek Ross, Councillor John Stuart, Councillor Draeyk van der Horn, Councillor Sonya Warren, Councillor Ben Williams APOLOGIES Councillor Amber Dunbar IN ATTENDANCE Interim Chief Executive; Depute Chief Executive (Education, Communities and Organisational Development); Depute Chief Executive (Economy, Environment and Finance); Head of Governance, Strategy and Performance; Head of Financial Services and Caroline O'Connor, Committee Services Officer. 1. Pre-Election Period The Chair reminded the Council the meeting was taking place during the pre-election period and that there are restrictions on the Council over publishing material which could show support for a particular party. As Council meetings are webcast they fall within these restrictions. The Chair stated the advice from the Monitoring Officer was that, whilst the Council can continue to deal with "business as usual" items, should debate become overtly political then the Chair may require to intervene. 2. Declaration of Group Decisions and Members Interests * In terms of Standing Orders 21 and 23 and the Councillors' Code of Conduct, there were no declarations from Group Leaders or Spokespersons in regard to any prior decisions taken on how Members will vote on any item on the agenda or any declarations of Member's interests in respect of any item on the agenda. 3. Best Value in Moray Council The meeting had before it a report by the Interim Chief Executive asking members to consider the Accounts Commission Findings on the Controller of Audit's Statutory Report on the Council in relation to its Best Value duty. Item 4a. Page 7
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The Council joined the Civic Leader in thanking Officers and Members for the collaborative work that had gone into producing the plan and noted the commitment from Members to endeavour to continue the focus on collaborative working moving forward. Following consideration the Council unanimously agreed to:- i) note the Accounts Commission's findings and key messages; ii) fully accept the Accounts Commission's findings (Appendix 1); iii) note that the Corporate Committee meeting on 24 April 2024 considered the Accounts Commissions findings along with recent external audit recommendations and a strategic self-assessment against the Best Value statutory guidance criteria; iv) note that the Corporate Committee agreed a Best Value Action Plan 2024-2027 at its meeting on 24 April (Appendix 2) setting out the Council's priorities for the next 3 years to enable it to meet its Best Value duty with progress to be monitored on a quarterly basis and an annual review based on further strategic self-assessments; and v) endorse the Best Value Action Plan 2024-2027 agreed by the Corporate Committee and the steps agreed for monitoring progress, quarterly reporting along with an annual self-assessment. Page 8
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MORAY COUNCIL Minute of Meeting of the Moray Council Tuesday, 13 August 2024 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Councillor James Allan, Councillor Peter Bloomfield, Councillor Neil Cameron, Councillor Tracy Colyer, Councillor Theresa Coull, Councillor John Cowe, Councillor John Divers, Councillor Amber Dunbar, Councillor Jérémie Fernandes, Councillor Donald Gatt, Councillor David Gordon, Councillor Juli Harris, Councillor Sandy Keith, Councillor Scott Lawrence, Councillor Graham Leadbitter, Councillor Marc Macrae, Councillor Paul McBain, Councillor Neil McLennan, Councillor Shona Morrison, Councillor Bridget Mustard, Councillor Kathleen Robertson, Councillor Derek Ross, Councillor John Stuart, Councillor Draeyk van der Horn, Councillor Sonya Warren, Councillor Ben Williams APOLOGIES No apologies were submitted. IN ATTENDANCE The Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance), Depute Chief Executive (Education, Communities and Organisational Development), Interim Chief Officer, Health and Social Care Moray, Interim Chief Social Work Officer, Head of Service, Health and Social Care Moray, Chief Financial Officer, Head of Governance, Strategy and Performance, Head of HR, ICT and Organisational Development, Acting Head of Economic Growth and Development, Head of Environmental and Commercial Services, Principal Climate Change Strategy Officer, Development Officer, Public Transport Manager and the Democratic Services Manager. 1. Chair The meeting was chaired by Councillor Kathleen Robertson. 2. Suspension of Standing Orders In terms of Standing Order 83, the Chair sought the Council's agreement to suspend Standing order 75 to continue the meeting until 1.00pm or the conclusion of the particular item and then allow a lunch break and resume the meeting at 2.00pm. This was unanimously agreed. 3. Welcome and Congratulations The Council joined the Chair in welcoming Judith Proctor, Interim Chief Officer, Health and Social Care Moray and Jim Lyon, Interim Chief Social Work Officer to their first meeting of the Council. Item 4b. Page 9
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The Council also joined the Chair in congratulating Councillor Leadbitter on being elected as the new Moray West, Nairn and Strathspey Member of Parliament following the General Election in July. The Chair further thanked Councillor Leadbitter for all his work as a Councillor over the last 17 years, this being his final meeting of the Council as he was resigning from 14 August 2024. 4. Declaration of Group Decisions and Members Interests * In terms of Standing Orders 21 and 23 and The Councillors' Code of conduct the Council noted that there were no declarations for Group Leaders or Spokesperson in regard to any prior decisions taken on how members will vote on any item on the agenda or any declarations of Member's interests in respect of any item on the agenda. 5. Minute of Meeting of Moray Council on 26 June 2024 The minute of the Meeting of Moray Council on 26 June 2024 was submitted for approval. Councillor McLennan sought that the minute be amended to reflect the agreement by the Head of Environmental and Commercial Services to include Safe School Routes in the consultation on the School Transport Policy. Subject to the change the Council agreed the minute as an accurate record of the meeting. 6. Written Questions Under reference to Standing Order 36 a written question from Councillor McLennan was submitted in the following terms: A decision by a Scottish Court to uphold a complaint against Moray Council social workers making false sexual claims about a foster parent and the events therein costing the council a total of £1.3 million including damages of £346,000 reported in the Press and Journal 28.06.2024. The press reports suggest the false allegations levelled at the foster parent(s) were potentially motivated by the fact the foster parents had made a complaint about the Council. Understanding this case, having assurances and ensuring lessons are learned which ensure no repeat of this is vital for public trust and Best Value. This includes eradicating any culture of attacking those who speak up on serious matters and wrongdoing. What assurances can be given that such wrongdoing will not occur again that those involved in this case are properly investigated (and if appropriate, censured) by their governing body and that children are, and have been safe under the care of Moray Council? RESPONSE There has been a reporting restriction on this case which was only lifted on the appeal decision by the Courts in July 2024. This does not apply to the original Court decision which still has only limited detail in the public domain. The case was around the impact on the human rights of a foster family, and the fostered children, of a decision in 2017 to end a foster care placement. Page 10
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For clarity, the total sum of compensatory payments made under Human Rights legislation was £346,000. Legal costs associated with the case were £514,000. The Chief Social Work Officer (CSWO) has met with existing employees who were involved at the time and a member of a partner provider service, from which he has drawn out points of learning. Work is underway for professional learning and development from the themes identified. The CSWO is co-operating fully with the Scottish Social Services Council (SSSC) in its investigations into potential misconduct by officers involved in the case. These investigations have not yet concluded and when their findings are received, appropriate action will be taken as required. Councillor McLennan as a supplementary question sought clarification on which Officers and Elected Members were aware of the complaint as he did not remember seeing any Section 3 reports coming before Committee. In response the Interim Chief Executive stated that he was unable to give an answer to the question as the case went back to 2017 and a number of Officers involved in the case no longer work for the Council, however he confirmed that he would endeavour to provide a response and circulate to Members following the meeting. 7. Chief Social Work Officer Annual Report 2023-2024 The meeting had before it a report submitted by the Chief Social Work Officer which informed the Council of the annual report of the Chief Social Work Officer (CSWO) on the statutory work undertaken on the Council's behalf during the period 1 April 2023 to 31 March 2024 inclusive. Following lengthy consideration, the Council unanimously agreed to note the contents of the report. 8. Moray Integration Joint Board Summary Report The meeting had before it a report by the Interim Chief Officer, Health and Social Care Moray informing the Council of the latest approved minutes of the meetings of the Moray Integration Joint Board. Following consideration, the Council unanimously agreed to note the content of the report. 9. Resumption of the Meeting PRESENT Page 11
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Councillor James Allan, Councillor Peter Bloomfield, Councillor Neil Cameron, Councillor Tracy Colyer, Councillor Theresa Coull, Councillor John Cowe, Councillor John Divers, Councillor Amber Dunbar, Councillor Jérémie Fernandes, Councillor Donald Gatt, Councillor David Gordon, Councillor Juli Harris, Councillor Sandy Keith, Councillor Scott Lawrence, Councillor Graham Leadbitter, Councillor Marc Macrae, Councillor Paul McBain, Councillor Neil McLennan, Councillor Shona Morrison, Councillor Bridget Mustard, Councillor Kathleen Robertson, Councillor Derek Ross, Councillor John Stuart, Councillor Draeyk van der Horn, Councillor Sonya Warren, Councillor Ben Williams APOLOGIES No apologies were submitted. ALSO IN ATTENDANCE The Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance), Depute Chief Executive (Education, Communities and Organisational Development), Interim Chief Officer, Health and Social Care Moray, Interim Chief Social Work Officer, Head of Service, Health and Social Care Moray, Chief Financial Officer, Head of Governance, Strategy and Performance, Head of HR, ICT and Organisational Development, Acting Head of Economic Growth and Development, Head of Environmental and Commercial Services, Principal Climate Change Strategy Officer, Development Officer, Public Transport Manager and the Democratic Services Manager. 10. Transformation Strategy Development The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) asking the Council to consider and endorse the ongoing development of projects that form part of the delivery of the Council's Transformation Strategy. Following consideration the Council unanimously agreed to: i) endorse the further development and definition of the Council's Transformation Strategy (Appendix 1), in particular the specification of projects that are reported in separate reports on the Council agenda) and the links with the Council's corporate priorities: a) Energy (LED) b) Energy (Solar PV) The Council also unanimously agreed to: i) note the further planned work with members to continue to define and develop the overall long-term definition of and approach to transformation; ii) note work is underway to prepare an expanded set of projects with financial benefits, in particular relating to leisure, libraries, learning estate and workforce projects by December 2024; iii) note that this work will contribute to the development of the future Council transformation programme of change that is scheduled for June 2025; and Page 12
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iv) approve budget from transformation reserves as set out in paragraphs 4c for resources required to progress the School Business Administration and Learning Estate projects. Councillor Harris joined the meeting during the consideration of this item. 11. Forres Conservation Heritage Scheme Delivery Phase The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) informing the Council that the 12 month Development Phase of the Heritage and Place Programme, which was funded through Historic Environment Scotland and the National Lottery Heritage Fund, has been successfully completed. Following consideration, the Council unanimously agreed: i) to note the progress of the Heritage and Place Programme Development Phase of the project; ii) that applications for the Delivery Phase be submitted to the National Lottery Heritage Fund and Historic Environment Scotland which, if successful, will result in a £3.3m 5-year investment programme; and iii) to delegate authority to the Acting Head of Economic Growth and Development Services to approve and submit the Delivery Phase applications with supporting documents. 12. Findhorn and Kinloss Area Bus Service The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) informing the Council of the withdrawal of the commercial bus service linking Kinloss and Findhorn with Forres and Elgin, the impact on these communities and the options open to the Council. Councillor Keith moved adding an additional recommendation and sought agreement from the Council for the Council Leader to write to the minister responsible for the Network Support Grant Legislation seeking a review as one size does not fit all. Moray is a rural area which has issues that central Scotland does not have. In response, Councillor Robertson, confirmed that she would be delighted to second the motion and happy to write the letter. Councillor Leadbitter confirmed that he was happy with agreeing Option 3 but confirmed he would be happy to support writing to the Ministry of Defence and Stagecoach to seek assistance from them until a new provision via the Moray Growth Deal can be introduced. Councillor Robertson confirmed that she was happy to also write to the Ministry of Defence and Stagecoach and sought clarification from Officers on the implications if the report was to be deferred until the next meeting of Council in September 2024 to allow the responses to the letters to be considered. Page 13
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The Head of Environmental and Commercial Services confirmed that deferring the report would not have any significant implications. Following further consideration the Council unanimously agreed: i) note the options available to this service; ii) that Officers include proposals for Council to consider and determine in relation to bus services servicing Findhorn, Kinloss and Forres as part of a forthcoming wider report m.connect - as set out in Option 3 at para 4.4; iii) the Council Leader will write to the Transport Secretary seeking a review of the Network Support Grant Legislation; iv) the Council Leader will write to the Ministry of Defence and Stagecoach seeking assistance with funding to continue the bus service in the interim; and v) the Council Leader will also include an ask of Stagecoach in seeking a continuation of the service provided until the end of September 2024 to allow the Council to consider options further for an interim service. 13. Local Heat and Energy Strategy The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) seeking agreement of the Council to approve the Moray Local Heat and Energy Efficiency Strategy (LHEES) and Delivery Plan as amended following public consultation. Following consideration, the Council unanimously agreed to: i) approve the Moray LHEES (Appendix 1) and Delivery Plan (Appendix 2) as amended following public consultation feedback (Appendix 3); ii) note that while work will progress on the LHEES if agreed, several aspects as highlighted within the Delivery Plan cannot be met within existing resources; and iii) delegate authority to the Acting Head of Economic Growth and Development to allocate any additional government funding, which may be made available following consideration of the LHEES, in accordance with the LHEES Strategy and Delivery Plan as agreed. 14. LED Replacement Programme Corporate Buildings The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) which outlined the proposed plan to replace lighting within the Council’s Corporate Estate with Light Emitting Diode (LED) to improve the environment in the property and reduce running costs and seeks approval to delegate authority to the Head of Housing and Property Services and the Chief Financial Officer to approve individual projects on a spend to save basis. Page 14
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Following consideration the Council agreed to: i) note the proposed plan to replace lighting in corporate assets; and ii) delegate authority to the Head of Housing and Property Services and Chief Financial Officer to progress projects that meet the Council’s spend to save principles in line with the Council’s standard governance processes including ancillary project management governance. 15. Programme to Install Solar Photovoltaic on Council Buildings The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) outlining the proposed plan to install solar photovoltaic (PV) on Council assets to generate electricity to be used in the buildings. Following consideration the Council unanimously agreed to: i) note the proposed plan to install solar PV on corporate assets; and ii) delegate authority to the Head of Housing and Property Services and Chief Financial Officer to agree individual projects based on the spend to save principles in line with the Council’s standard governance processes including ancillary project management governance. Page 15
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__________________________________________________ NOTICE OF MOTION TO MORAY COUNCIL WEDNESDAY 25 SEPTEMBER 2024 Winter Fuel Payments Preliminary issues • Council notes with concern the recent decision by the UK Government to introduce means-testing for the Winter Fuel Payment. This decision threatens to significantly impact pensioners in our community, particularly given that Moray experiences some of the coldest winter temperatures in the United Kingdom. Background • The consequence of this decision means that the Scottish Government would need to allocate an additional £100 million to ensure that the Pension Age Winter Heating Payment remains universal. This financial burden could detract from other critical services and supports necessary for our residents. • Furthermore, it is essential to highlight that over 5,000 pensioners in Moray benefited from the Winter Heating Payment last year. The introduction of means-testing would directly affect these individuals, potentially leaving them vulnerable during the coldest months of the year. • Be concise but include sufficient and clear info for members to make an informed and balanced decision. • Give clear links to any reference material. Action • Council firmly believes that all pensioners, irrespective of their income, should be supported during the winter months to ensure they can adequately heat their homes and maintain a decent standard of living. The Winter Fuel Payment has historically been a vital lifeline for many elderly individuals in our community, helping to mitigate the risks of cold-related health issues and ensuring their well-being during harsh winter conditions. • Therefore, Moray Council calls on the UK Government to reverse its decision to means-test the Winter Fuel Payment, and ensure that the financial burden of Item 5. Page 17
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maintaining a universal winter fuel payment is not passed onto the Scottish Government and therefore on local authorities. • We urge the UK Government to recognise the unique climatic challenges faced by regions such as Moray and to maintain this critical support for all pensioners. • Moray Council resolves that the Leader of the Council should write to the Chancellor of the Exchequer expressing the Council’s strong opposition to the means-testing of the Winter Fuel Payment and highlighting the financial strain it would place on the Scottish Government to maintain universal payments. Financial implications • There are no financial implications for the Council in writing the letter Proposed By: Councillor Sonya Warren Seconded By: Councillor Theresa Coull Date Motion Submitted: 6 August 2024 Page 18
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**[Date]** Rt Hon Rachel Reeves MP Chancellor of the Exchequer HM Treasury 1 Horse Guards Road London SW1A 2HQ Dear Chancellor, Request to Reverse the Decision to Means-Test the Winter Fuel Payment I am writing to you on behalf of the Moray Council to express our deep concern regarding the recent decision by the UK Government to introduce means-testing for the Winter Fuel Payment. We believe this decision will have severe and detrimental effects on the pensioner population within our community. Moray is known for experiencing some of the coldest winter temperatures in the United Kingdom. In such a climate, the Winter Fuel Payment has been a vital lifeline for many of our elderly residents, helping them to adequately heat their homes and protect their health during harsh winter conditions. Last year alone, over 5,000 pensioners in Moray benefitted from this crucial support. The consequence of the means-testing decision means that the Scottish Government would need to find an additional £100 million to maintain the universal provision of the Pension Age Winter Heating Payment. This substantial financial burden would likely necessitate reallocation from other critical services, thus impacting the broader community adversely. Moray Council firmly believes that all pensioners, regardless of their income, should be supported through the winter months. The universal nature of the Winter Fuel Payment has ensured that vulnerable individuals are not missed and that no pensioner has to choose between heating and other essentials. In light of these considerations, Moray Council passed a motion calling on the UK Government to reverse its decision to means-test the Winter Fuel Payment. We urge you to reconsider this policy, taking into account the unique climatic challenges faced by regions such as Moray and the essential support this payment provides to all our pensioners. We hope that you will give this matter the urgent attention it deserves and take immediate steps to ensure that all pensioners continue to receive the Winter Fuel Payment without means-testing. By doing so, you will help protect the health and well-being of thousands of elderly individuals in Moray and across the UK. Thank you for your attention to this important matter. Yours sincerely Page 19
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__________________________________________________ NOTICE OF MOTION TO MORAY COUNCIL ON WEDNESDAY 25 SEPTEMBER 2024 Preliminary Issues None to consider Background Over recent years seagulls have become a menace to the people of Elgin. Despite the efforts of bodies like Elgin BID, the Moray Council and other public sector organisations and private companies in seeking to address the problems caused by the seagulls the issue remains. Seagulls are traditionally a coastal species but have spread to towns like Elgin. These so-called urban gulls are now commonplace and often attack people, cause noise and general disturbance. Whilst introducing gull proof bins and installing sonic sound devices, paid for by the Elgin Common Good Fund, has seen some improvements in terms of fewer chicks being raised, the identified problems have continued and the issue of seagulls continues to be a matter of concern for Elgin residents. The NatureScot licensing system does not allow for the Moray Council to properly address the problem of seagull numbers. Ministerial direction is sought to ensure NatureScot considers the impact on residents of affected towns – alongside any objective to protect endangered birds. Action This Council notes the public concern over seagull numbers in Elgin and agrees to approach Scottish Ministers seeking further interventions to control numbers going forward. It is proposed that the Council instructs the Council Leader to write to the Cabinet Secretary for Rural Affairs, Land Reform and Islands. This letter will seek ministerial direction in the matter and instruct NatureScot to licence further interventions to reduce the menace of seagull numbers in Elgin and elsewhere. Item 6. Page 21
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Financial Implications There are no financial implications arising from this report. Proposed By: Councillor Sandy Keith Seconded By: Councillor John Divers Date Motion Submitted: 6 September 2024 at 11.04am DRAFT LETTER Mairi Gougeon Cabinet Secretary for Rural Affairs, Land Reform and Islands The Scottish Government St. Andrew’s House Regent Road Edinburgh. EH1 3 DG. Dear Ms Gougeon Action to Reduce Seagull Numbers in Elgin At the Moray Council meeting on Wednesday 25th September 2024 members debated a Notice of Motion calling for urgent action to reduce the seagull population in Elgin and I was mandated to write to you as a consequence. For many years the public of Elgin have become used to the phenomenon of “urban gulls.” The numbers of gulls inhabiting the town are such that they have become a danger to the general public. Moray Council has tried to work within the licensing system operated by NatureScot. The Moray Council has carried out egg and nest removal initiatives when licensing allowed and has for the last two seasons spent a considerable sum of public money on sonic sound devices and other activities. Provision of gull proof bins has also been funded. The business community has been on board this journey and Elgin BID has funded sonic devices in Elgin Town Centre. Other private companies have also opted to do likewise. Whilst these initiatives have seen the numbers of young chicks fall in general, it would be fair to say that the results are still way off what is required to finally address the matter and see seagull numbers drastically reducedin urban areas. Furthermore, changes to NatureScot’s licencing regime have made it practically impossible for councils to take more effective actions like egg and nest removal. Page 22
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Public finances are stretched across the UK at this time. It cannot be right for public funding to continue to be used on very limited measures of lesser efficacy than options which are not permitted by NatureScot, in the face of what, at best, seems a very gradual decline in numbers. For example, Elgin Common Good Fund has spent £26,000 in 2024/25 and in the last financial year Moray Council spent £100,000 on seagull control measures across Moray. The business sector has also spent many thousands in this regard. The public of Elgin and Moray in general would like to see decisive action, withpeople living in fear of attack, noise is causing many problems with their sleep patterns and the seagull droppings are both unsightly and a potential health hazard. Anecdotally, tourists are telling us that they do not plan to come back to Elgin due to the nuisance caused by seagulls. Council members are united in their belief that urgent action to reduce seagull numbers is necessary going forward. Once numbers are reduced to safe levels remedial action will be necessary to maintain the population at this lower baseline. This control of numbers will allow for the smaller garden birds to make a comeback as they will no longer have to compete with these aggressive birds thus biodiversity will be enhanced. I would, therefore, be obliged if you could give this matter some consideration. NatureScot has a belief that numbers of these birds are falling but the council questions their numbers. The Joint Nature Conservation Committee acknowledges that population estimates of Herring Gulls and Lesser Black-backed Gulls are considered unreliable due to likely under-estimation of roof-nesting gull numbers. Ministerial direction is deemed necessary for NatureScot to be required to balance legitimate endeavours aimed an protecting endangered birds and with the well evidenced effects upon humans. This does not require a change to the law, as the Wildlife and Countryside Act 1981 continues to provide for general licenses to control wild bird populations. S16A(5) provides that NatureScot acts as a licensing authority under written ministerial direction. We therefore urge you to act. In order to maintain public confidence in wider efforts to protect endangered species of birds, we therefore seek action to remove excessive restrictions on the control of urban gulls. I look forward to hearing from you in due course. Page 23
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: FINANCIAL RESERVES POLICY BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To seek approval of the Council’s updated Financial Reserves Policy. 1.2 This report is submitted to Council in terms of Section B (7) of the Council’s Scheme of Administration relating to regulating and managing the finances of the Council and preparing and reviewing from time to time such rules as may be necessary for the proper administration of the Council’s financial affairs. 2. RECOMMENDATION 2.1 It is recommended that the Council: (i) approves the Financial Reserves Policy attached as APPENDIX 1 to this report; and (ii) agrees that the next review will be no later than October 2027. 3. BACKGROUND 3.1 Members consider the purpose and use of financial reserves as part of the financial planning process, culminating in the approval of the Revenue budget for the year ahead. The Financial Reserves Policy was last reviewed by Council on 15 September 2021 (paragraph 29 of the Minute refers). It was agreed at that time that the policy would be reviewed no later than October 2024. 3.2 The Reserves Policy follows CIPFA and LASAAC guidance on financial reserves and covers four main areas: • The types of reserve held by the Council • Statutory and governance requirements • The arrangements for reporting and review • The minimum level of free general reserve. Item 8. Page 25
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3.3 The approach to setting the minimum level of Free General Reserve continues to be to have due regard to the strategic, operational and financial risks facing the Council. The level of Free General Reserve as a percentage of the Council’s turnover (defined as General Revenue Grant plus budgeted Council Tax income) is also considered and benchmarked. When the Council set its budget for 2024/25 on 28 February 2024 (paragraph 7 of the Minute refers) it approved transfer of £1 million from the ear-marked reserve for Council priorities into Free General Reserve. The review of the minimum level confirms this as an appropriate level of Free General Reserve for the Council. 3.4 This report meets the target for reporting on reserves policy included in the Best Value Action Plan. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The Financial Reserves Policy supports the Council’s Short to Medium Term and Medium to Long Term Financial Strategies, which are aligned to the Corporate Plan. (b) Policy and Legal This policy is in accord with the CIPFA and LASAAC guidance: the Statutory Basis for Accounting for and Disclosing Reserves in Scottish Local Government bodies 2021. This guidance is mandatory and ensures compliance with section 12 of the Local Government (Scotland) Act 2003. (c) Financial implications There are no financial implications arising directly from this report. The report recommends amending the policy position on the minimum amount of Free General Reserves to £6 million, and that is the amount currently in Free General Reserves. (d) Risk Implications This policy assist the Council to manage the financial risk to which the Council is exposed. (e) Staffing Implications There are no staffing implications arising directly from this report. (f) Property There are no property issues arising directly from this report. Page 26
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(g) Equalities/Socio Economic Impact There are no equalities issues arising directly from this report. (h) Climate Change and Biodiversity Impacts There are no climate change and biodiversity issues arising from this report. (i) Consultations CMT have been consulted in the preparation of this report. 5. CONCLUSION 5.1 It is best practice for the Council to have and to regularly review a Financial Reserves Policy, which informs the Financial Strategies and financial planning process of the Council. Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Held in Financial Services Ref: SPMAN-1293228629-1151 Page 27
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APPENDIX 1 FINANCIAL RESERVES POLICY Owner of Policy Chief Financial Officer Author Lorraine Paisey Date of review September 2024 Date of previous version September 2021 Policy approved Next review date September 2027 Item 8. Page 29
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THE FINANCIAL RESERVES POLICY 1. Introduction 1.1 It is good financial practice that the Council has a documented and approved Financial Reserve Policy. 1.2 The Statutory Basis for Accounting for and Disclosing Reserves in Scottish Local Government Bodies (2021) provides mandatory guidance from LASAAC in respect of Local Authority Reserves and Balances. 1.3 The following Policy reflects the key messages from the guidance and also outlines the practical application for the Council. 2. Types of Useable Reserves Operated by the Council 2.1 Useable reserves are those that can be applied to fund expenditure whereas Unusable Reserves are restricted to accounting entries. General Fund Reserve 2.2 The General Fund Reserve is split into a non-Earmarked portion and Earmarked Reserve. The former is often referred to as the “Free General Reserve” and it is held for unforeseen emergencies and contingencies. The current Council policy is that the Free General Reserve should not be lower than £5 million which represented 2.5% of annual turnover where turnover is defined as General Government Revenue Grant Income and Council Tax Budgeted Income when the policy was approved. 2.5% of the current General Services Revenue Budget for 20214/225 is £6.7 5.5million and the balance on the Free General Reserve as at 31 March 2024 is £6,000,000. 2.3 Earmarked Reserves are sums of money retained for future use for a specific purpose or commitments made which cannot be accrued at year-end due to not being in receipt of the service or goods. In recent years a greater use has been made of ear-marked reserves than had previously been the case to ensure than any windfall funding is directed towards Council priorities, including the transformation of Council services. Significant sums of restricted funding from government grants are now also being held and ear-marking these assists in transparency and good management of these funds. 2.4 The following cash backed ear-marked reserves are held within the General Fund Reserve: Page 30
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Fund Purpose of fund Balance @ 31 March 20212024 £000s Covid-19 funding Working Reserve Carry forward funds given as part of General Revenue Grant in 2020/21 to deal with issues arising from the pandemic Balance of uncommitted funds above Free General Reserve 16,421 8,686 Transformation of services To facilitate the Improvement and Modernisation Programme (IMP) projects under theTransformation Strategy 3,664 6,152 Council priorities To advance projects related to achieving Council priorities, including £4 million set aside to cover cash flow implications from the Moray Growth Deal 2,881 7,134 Devolved School Management (DSM) To enable DSM budgets to be managed over more than one financial year, per the DSM scheme 1,343 753 Pupil Equity Funding (PEF) Education Attainment Fund To enable PEF funding from Scottish Government for targeted support for children and young people to be managed over the academic year, per the funding conditions 802 919 Expansion of Early Years and Childcare (ELC) To carry forward specific grant funding to use for the purposes the grant was given 573 Whole Family Wellbeing Fund (WFWF) To carry forward unspent funds from Scottish Government for WFWF, expenditure plans for which must be approved by Community Planning partners 827 Refuge resettlement To carry forward unspent funds for a variety of refugee resettlemtn programmes 2,449 Other Primarily unspent grants / funding with restrictions on its use 839 878 Total 26,523 27,798 2.5 In addition to these cash backed ear-marked reserves the Council has an ear- marked reserve arising from the retrospective element of the revision to accounting for the Service Concession. This totals £7,526,000 and is being held to support borrowing for schools’ new build / refurbishment. Funds which are not earmarked for specific purposes are set aside to deal with unexpected events or emergencies or at the discretion of Members. Page 31
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Housing Revenue Account (HRA) 2.6 These are funds which are for use by the Council’s Housing Service to smooth expenditure or to fund emergencies on the HRA. The funds are ring- fenced for the Council’s Housing ServiceHRA. As at 31 March 2024 they amounted to £1,587,000. Statutory Funds 2.7 There are also amounts set aside from the General Fund and HRA balances in Statutory Funds to provide for future expenditure. These are the Repairs and Renewals Fund, which was established to assist with uninsured losses to council properties arising from flooding incidents but which can be used for any property maintenance or repairs, and the Insurance Fund, which was set aside to pay any uninsured losses regarding school buildings but which can be used to meet any insurable costs elected by the Council to self-insure. The General Services element of the Repairs and Renewals Fund was expended in full in 2023/24 and the balance of £2,167,000 at 31 March 2024 relates to the HRA. There is a balance of £1,514,000 on the Insurance Fund. Capital Fund 2.8 The Capital Fund is used to directly finance future capital expenditure. Capital Grants Unapplied 2.89 This reserve holds grants and contributions received towards capital projects. The balance of £3,681,000 as at 31 March 2024 represents funds which have yet to be applied to meet the expenditure and which would otherwise require repayment. Capital Receipts Reserve 2.910 This reserve holds the proceeds from the disposal of land or other assets and its use can only be for capital purposes as a general rule. However for a four year period ending 31 March 2021 Scottish Government gave a concession that capital receipts could be used to fund expenditure anticipated to give rise to recurring savings and the Council has taken advantage of this concession unless specific permission is given by Scottish Government to use capital receipts for other purposes. The balance at 31 March 2024 was £1,664,000. 3. Governance of Reserves 3.1 The governance arrangements are as follows for each reserve: 3.1 General Fund Reserve Page 32
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o Level of Free Reserves agreed as part of the Reserve Policy and reviewed no less frequently than 3 yearly by the Corporate Committee or full Council. o Projected Balance reported to the Corporate Committee when expenditure for the year is forecast. o Reported annually to the full Council as part of the review of the Financial Strategy. 3.2 Earmarked Reserves o Creation of Earmarked Reserves approved by the Corporate Committee or full Council. o Update in respect of Earmarked Reserves reported monthly to the Corporate Management Team. o Projected balances reported to Corporate Committee of full Council in quarterly monitoring reports and in Short to Medium Term Financial Strategy updates 3.3 Repairs and Renewal Fund o Additions to the Repairs and Renewal Fund require Corporate Committee approval. This fund was set up specifically to provide for expenditure arising from flooding incidents prior to the construction of flood alleviation schemes. As part of the financial planning process use of the General Services portion of the fund has been proposed for a number of years. This use has not been yet required but is still planned. 3.4 Capital Receipts Reserve o All receipts from sales of assets are paid into the Capital Receipts Fund unless otherwise approved by the Corporate Committee. o Capital Receipts FundReserve update reported as part of the quarterly monitoring of the Capital Plan to Corporate Committee. o Decisions to utilise the Capital Receipts Fund approved by the Moray Council.Capital receipts will be used to fund capital expenditure before any additional borrowing 3.5 Insurance Fund o Insurance Fund Balance reviewed and reported as part of the Annual Accounts to the Moray Council. Earmarked Reserves Process 3.6 An earmarked reserve cannot be established without the approval of the Chief Financial Officer and the Corporate Committee or full Council. 3.7 For each earmarked reserve there needs to be a clear documented and Page 33
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approved understanding of the purpose of the reserve, the timescale for which the reserve is required and anticipated phasing. 3.8 For earmarked reserves projecting over £50,000 of spend during the year then the annual spend requires monthly phasing. 3.89 As part of the year end accounts the remaining balance and continuing purpose of the earmarked reserve requires reviewing by the budget holder and approval by the Chief Financial Officer. 3.10 Any earmarked reserve no longer required is to be written back to free General Fund reserves. 4. Role of the Chief Financial Officer 4.1 The Chief Financial Officer is responsible for advising on the targeted optimum levels of reserves the Council aims to hold. The Council based on that advice should then approve the appropriate reserve strategy as part of the financial planning process. 5. Reporting and Review 5.1 The Reserves Policy requires to be reviewed and approved no less frequently than three yearly and reported to the Corporate Committee or full Council. 5.2 In the event that it is projected that the Council’s Non-Earmarked General Fund Reserve (‘Free General Reserve’) will fall below the approved limit, then the Chief Financial Officer should report no later than to the next meeting of the Corporate Committee or full Council, whichever is earlier, explaining the reasons for this shortfall and the options available to rectify the situation. 6. Level of Free General Reserve 6.1 The level of free general reserve held by the Council is a key component in risk management for the Council and so it is considered appropriate that in determining the minimum level of reserves to be held by the Council that explicit recognition of the risks likely to impact on that balance are recognised. 6.2 An update to the Council’s corporate risk register was approved by the Corporate Committee at its meeting on 23 April 2024 and includes the following risks with potential financial impact: 1. Demand for services outstrips available budget 1.2. Price inflation and increased borrowing costs 2.3. Savings require to be made to create a sustainable financial operating environment 3.4. MIJB – no council control but liability for around 50% overspend, (if any). Page 34
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4.5. Inability to recruit 5.6. Impact of climate change and severe weather events 6.7. Regulatory penalties: Data protection breaches, Health and Safety incidents 7.8. Economic performancerecovery – poor local economic performance could result in lost Council Tax and Non Domestic Rates income, lower rentals from the industrial estate and pressure on services The mitigations in place for these risks are set out in the risk register. 6.3 The following points of detail should be considered: Service demand 6.4 There is anticipated to be a change in increasing demand for council services arising from demographic movementsgrowth. There is an element of the council’s allocation of General Revenue Grant which is based on population numbers. This is based on statistical projections of population numbers from the National Records of Scotland (NRS). Historically these projections have lagged behind the actual growth of Moray’s population, which means that existing budgets are under pressure to accommodate population based service growth. A report to the Economic Growth, Housing and Environmental Sustainability Committee on 24 August 2021 highlighted some particular concerns with current population projections for Moray. A change in demographic balance is projected, with decreasing numbers of under 18 year old and increasing numbers of over 65 year old. This will require a reshaping of the services the Council delivers. Savings 6.5 The Council requires to make significant savings and as yet there is no defined plan agreed suite of savings to meet the whole funding gap. There is an underlying overspend which had previously been funded from a combination of retention of Non Domestic rates income under the Business Rates Incentivisation Scheme (BRIS) and use of reserves. It is currently anticipated that there will be no funding available from in the workingcovid ear-marked reserve to cover the underlying budget gap in 20225/236 and contribute towards it in 2023/24. 6.6 Savings arising from transformation programmes generally (i) take time and (ii) require upfront funding. A cushion of reserves will be needed for this process and as indicated above the uncommitted element of the covid ear marked reserve is currently planned to be used to plug the budget gap. Further reserves require to be identified for investment in changeand there is a limited amount of reserves set aside to fund transformation of Council services. 6.7 The Council has been making significant savings since 2008. As time progresses savings are more difficult to find and there is a risk that savings offered are more difficult to achieve. Savings which rely on increased income Page 35
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from charging for services are particularly at risk as the initial impact of increased charges is usually decreased uptake of service. 6.8 A combination of the impact of the UK leaving the EU and the effect of the pandemic is causing shortages of labour and goods, resulting in current high level of construction costs and above target general inflation as measured by CPIH is anticipated later in this financial year. This may have on-going impacts on costs which could result in further savings being required. Inflation as measured by CPIH has reduced and stabilised from the recent high and volatile measures but there is no guarantee that this will continue. 6.9 The pay award for 20214/225 has not been agreed for any of the employee groups. Recent hHigher inflation and pay settlements in England are contributing to could play out in continuing increased pay demands. The Council is looking at consolidating the Living Wage into its pay scales. This will have cost implications. Various options are currently being considered. MIJB 6.10 The MIJB is currently overcommitted against budget is also in excess of agreed funding. Previously planned savings were put on hold during the response to the pandemic. An ambitious recovery plan has been approved by the Board. Demand for services is rising. Recruitment 6.11 If the Council is unable to recruit into posts then these must be covered by other staff working additional hours, agency staff or out-sourcing. As a general rule, it is more expensive to employ agency staff or to outsource than to employ Council staff. Climate Change and severe weather events 6.12 The Council has recognised a climate change emergency and adopted a Climate Change Strategy. This recognises that severe weather events are increasingly likely. In the past the Council has had to deal with damage to Council buildings, roads, bridges and harbour infrastructure due to severe weather events, as well as the costs of immediate response eg provision of alternative accommodation for people whose houses have been affected. 6.13 The Bellwin scheme, which is designed to assist councils in dealing with major emergencies, does not cover all expenditure incurred by a council and in particular assumes that the council will meet all costs up to the threshold (currently 0.2% of the council’s net budget). 6.14 The winter maintenance budget is set for a mild winter. Unlike many other councils, Moray does not hold a specific ear-marked winter maintenance reserve for bad winters. Page 36
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6.15 There are suggestions that energy prices may rise to fund developments in energy production such as green hydrogen. Perhaps related to current weather patterns an increasing number of landslips and other infrastructure failures such as sink holes are occurring. Regulatory penalties 6.16 The General Data Protection Regulation (GDPR) has a regime of potentially swingeing penalties for breach of GDPR. Health and Safety breaches can incur fines and can result in higher insurance costs. Economic RecoverySustainability 6.17 The risk of a prolonged economic downturn following the pandemic and Britain’s withdrawal from the European Union is recognised in the Corporate Risk Register.Increased costs from the effect of inflation and higher interest rates have the potential to have a negative impact on business, nationally and locally. An economic downturn would be likely to have effects which are both direct – in terms of lower Council Tax, Non Domestic Rates, housing and property rental and increased benefit claims – and indirect – in terms of changing and increasing demands on Council services – and is compounded by the continued restrictions on construction activity, supply chain shortages and high current level of construction inflation. 6.18 In addition to those risks specifically included in the Corporate Risk Register, the largest area of uncertainty of direct relevance to the Council’s finances is the level of income available to Scottish Government – with more money generated directly or indirectly from a share of national taxes the income available for Holyrood to distribute is less certain than under the Block Grant system – and the willingness of Scottish Government to direct unrestricted funding to local authorities. The medium to long-term impact of both the pandemic and the UK withdrawal from the EU are unknowns both of which could have significant impact on revenue generated by Scottish Government 6.19 CIPFA in the draft suite of Financial Resilience Indicators (for use in England and Wales) include reference to the availability of council reserves as a test of resilience. In essence the lower the level of council reserves the less resilient that council is in regard to the ability to cope with unplanned events. Benchmarking against other Scottish local authorities prior to 2020/21for 2024/25 shows Moray to have a fairly typical minimum approved level, with 1.52% - 34% of annual turnover being roughly the range reported and 2% the most common. The position for all Scottish local authorities changed dramatically for the year ended 31 March 2021, with very significant increases in funding announced and received towards the end of that financial year, largely directly related to the pandemic, although mainly paid as redetermination to General Revenue Grant. Moray’s share of this funding has been ear-marked, and a considerable proportion of the ear-marked funding is estimated to be required in 2021/22. The question of the appropriate policy position regarding free general reserve should be considered without reference to this ear-marked reserve. Page 37
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6.20 As a test of the reasonableness of the policy position on free general reserves the following table gives some guidance: Risk Proposed measure £000s Rise in demand Pay award Increase from provision in 2021/22 budget to Scottish Government public sector pay policy current pay offer to 5.5% as per settlement in England 700 1,500 Further increase to pay demand 1,000 Living Wage To be determined following modelling MIJB Level of budget above funding (Ccouncil share) 726 Allowance for overspend / demographic growth (Council share) 1,000 Insurance claims – employer’s liability Average claims over last four years (not updated – claims have been lower but excess increased) 250 Insurance claims – pot holes Based on previous numbers of claims in a bad winter 100 Infrastructure failure Average over last 2 years (not updated) based on current recent estimates 6001,000 Emergency event Bellwin threshold (202340/241 – latest published figures) 443 478 Winter maintenance Average historic spend above budget for last two years 600 Budget variance Based on average Directors of Finance PIs (0.8% variance) for 2018/19 and 2019/20 as 2020/21 not a typical year because of pandemic 1% 21,700 Government grant less than forecast Sensitivity 1% 1,680 2,200 Interest rates Increase in loans pool rate from higher borrowing charges (20230/241 rate plus 100 bps) 865 1,000 Increase in Council Tax Reduction Level of increase during pandemic 330 Reduction in Council Tax collection rate By 0.5% 3700 Reduction in Industrial Estate rentals By 5% 100 Total 11,628 10,394 A free reserve of £65 million gives 4852% coverage of the quantified risks Page 38
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above. It is unlikely that all of these scenarios would arise and so 5248% coverage is considered reasonable. It is not considered prudent to reduce the level of free reserve below £65 million. This currently represents 2.332.78% of the Council’s General Services revenue budgetturnover as defined in paragraph 2.2. Page 39
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: DEVELOPMENT OF SAVINGS PLAN FOR SHORT TO MEDIUM TERM BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To consider progress made in identifying savings to bridge the budget gap in 2024/25 and 2025/26, following the Council’s approved Short to Medium Term Financial Strategy. 1.2 This report is submitted to the Council in terms of the Council's Administrative Scheme section (III) (A) (2) relating to considering Capital and Revenue budgets and long term financial plans. 2. RECOMMENDATION 2.1 It is recommended that the Council considers and notes: (i) progress made in identifying potential savings, following the Short to Medium Term Financial Strategy; (ii) Additional savings of £307,000 as set out in paragraph 3.9; (iii) that further potential savings still require to be identified and the timeline for budget developments; (iv) that there is still considerable uncertainty around key budget assumptions in 2025/26 which may further alter the budget gap; and (v) that this report meets a target in the Best Value Action Plan of developing a Savings Plan by the end of August 2024. 2.2 It is recommended that the Council agrees to continue to deploy the budget engagement strategy as set out in Appendix 1 to engage on future Council priorities and delivery of services within a reduced budget. Item 9. Page 41
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3. BACKGROUND 3.1 The Council’s revenue budget for 2024/25 was approved at a meeting of Moray Council on 28 February 2024 (paragraph 7 of the Minute refers). A budget shortfall in 2024/25 of £10.2 million was planned to be funded from reserves and a savings target of £14 million for 2025/26 projected. At the time this budget was set, this level of use of reserves was recognised as a high-risk strategy. 3.2 Amendments to the budget were reported to Council on 26 June 2024 (paragraphs 11 and 14 of the Minute refer). The net result of those amendments is that the projected use of working reserves required to balance the budget in 2024/25 is £8.1 million and savings required to balance the budget in 2025/26 and 2026/27 are projected to be £12.7 million, with savings of £1.1 million already approved and indicative savings of £0.4 million from Transformation projects, leaving a balance of £11.2 million to be found across the two years. The report also reflected the reduction in Working Reserve from that previously estimated, following an exercise to separately identify and account for all unspent funding with conditions on its use. That resulted in £4 million being transferred to ear-marked reserves, reducing the Working Reserve to £8.7 million as at 31 March 2024. 3.3 Given the level of the Working Reserve and the planned use of that reserve in 2024/25, it is evident that no reliance can be placed on the Working Reserve to help to fill the budget gap for 2025/26. 3.4 At its meeting on 26 June 2024, Council approved a Short to Medium Term Financial Strategy (paragraph 11 of the Minute refers), focussed on eliminating the budget gap by 2026/27. Effectively this means eliminating the budget gap in 2025/26, with a small level of residual savings currently forecast as required in 2026/27. The Strategy reiterated the Council’s approved hierarchy of transformation (which in this context means spend to save), income generation, service reduction and cessation. The Strategy also set out three principal strands of work to identify savings: the thematic approach, the review-led approach and the partnership approach (with Moray Integration Joint Board (MIJB)). Spend to Save 3.5 Proposals for two new spend to save projects were approved as part of the update to the Transformation Strategy reported to Council on 13 August 2024 (paragraph x of the Minute refers) which will also contribute to the Council’s priority of reducing carbon emissions. The current high level estimate of net savings is £280,000 full year effect once all measures have been implemented. Income Generation 3.6 Income generation includes income from Council Tax. The income strategy approved by Council on 12 December 2023 (paragraph 10 of the Minute refers) included increasing Council Tax in 2025/26 to recover from the Council Tax freeze in 2024/25. Inflation as measured by the Consumer Price Index including Housing (CPIH) at that time (4.7%) was used as the baseline on which to base the increases included in the indicative budgets for 2025/25 and Page 42
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2026/27 (7% and 6.2% respectively), with CPIH projections for 2025/26 and 2026/27 of 3.6% and 1.8% respectively. CPIH has since fallen to 2.8% and is projected to be 2% for 2026/27 Consideration as to an appropriate level of increase will be required and inflation trends and projections will be closely monitored as budget setting approaches. A range of increases will be put forward as options to be considered. At this juncture it is assumed that Scottish Government will not impose a Council Tax freeze. 3.7 A review of charges for services has commenced. No estimate for the impact of the annual increase in charges has been included in the base line budget. If CPIH falls to the Treasury target of 2% then the RPIH+1% included in the three year Income Strategy as a baseline would generate approximately £240,000 if applied to all charges within the Council’s discretion Further Savings 3.8 A budget workshop for Heads of Service and third tier officers was held on 19 June, to incorporate review of historic budgets, options for income generation, the thematic approach and high level service review. A range of options were identified and initial estimates of savings of around £3 million identified to be developed, assessed and more accurately costed. Following refinement of the proposals a workshop with elected members was held on 21 August to present the proposals and discuss these and other areas of work which will feed into the budget. Current estimates of the savings options identified are a total of £1.25 million, with further options being prepared. 3.9 The workshop also identified windfall savings totalling £0.37 million as listed below and these will be removed from service budgets following this meeting: Description 2024/25 £000s 2025/06 £000s Economic Growth and Development - misc 2 3 Strategic Planning - misc 15 HR, ICT and OD - misc 3 3 ICT review of contracts 90 Taxation – recharges to outside bodies 10 Internal Audit – recharges to outside bodies 20 Internal mail reduced frequency 10 Education – vacant posts: English as a second Language 61 Sensory Education Service 80 Educational Psychology 70 TOTAL 50 317 3.10 It is proposed that this approach continues and that further options are brought forward with a view to identifying minimum standards of service and relating the actual standard of service delivered to corporate priorities confirmed at the council meeting on 28 February 2024 to identify scope for change. Benchmarking information will be used in this process. Page 43
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Review led approach 3.11 The Leisure and Library review is also planned to be reported in October and this has the potential to generate savings. A high level overview indicates a maximum potential for savings of £1 million. 3.12 A review of Early Learning and Childcare was reported to the Education, Children’s and Leisure Services Committee on 19 April 2023 (paragraph 23 of the Minute refers) and savings of around £610,000 are estimated to accrue during 2024/25 and 2025/26. Partnership Approach 3.13 MIJB on 30 May 2024 approved a Recovery Plan (paragraph 11of the Minute refers) which contains savings of £8.3 million in 2024/25 and £3.9 million in 2025/26, subject to staff and public consultation. The report assessed the risk of not achieving savings as planned in 2024/25, quantified at £1.48 million, based on the risk status of the different proposals. On that basis, to be prudent the Council should assume that the maximum savings likely to be achieved in 2024/25 are £6.82 million and estimate the highest level of savings accruing to the Council from MIJB in 2024/25 as 50% (the Council’s share) of that amount ie £3.4 million in total and assume for planning purposes at this early stage that the likelihood with such a complex programme of projects would be a lower figure. A working figure of £2 million is proposed, with a further £1 million in 2026/27. This figure will be refined as the Recovery Plan progresses and in particular when the estimated out turn for MIJB for 2024/5 is available in the late autumn. 3.14 It should be noted that the Recovery Plan has been approved by MIJB, as the responsibility of how services are delivered rests with the Board. However staff delivering these services (unless contracted out) are employed by NHS Grampian or by Moray Council and there will be proposals in the recovery plan which impact on Council staff. The Council’s HR policies and procedures will be adhered to in progressing these proposals. 3.15 In summary the Council has made the following progress in closing the budget gap: Para 2025/26 £ million 2026/27 £ million Spend to Save 3.5 0.14 0.14 Income Generation 3.7 0.24 0.24 Review led approach (ELC) 3.10 .30 0.31 Partnership approach (working assumption) 3.13 2.00 1.00 Budget reductions 3.9 0.37 Total 3.05 1.69 3.17 Per paragraph 3.2 savings of £11.2 million are estimated to be required across 2025/26 and 2026/27, accordingly a further £6.46 million remains to be identified. This Savings Plan identifies the areas where further savings options are being sought. Page 44
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Spend to Save 3.18 There is scope to increase the savings from energy efficiency, as the estimated savings included above are based on the initial proposals submitted for immediate progression. The report to Council on 23 August 2024 indicated a potential for savings of £600,000. Savings of £240,000 are included above as having a high degree of certainty. Other options will be investigated. Income generation 3.19 Each 1% increase in Council Tax generates additional income of around £0.55 million. Given the commitment to moving to a sustainable financial position, there is potential for further increase above that included in current budget assumptions. 3.20 No income from grant funding dependent on maintaining teacher numbers has been included in budget assumptions. Discussions between COSLA and Scottish Government are currently on-going regarding this. The maximum funding the Council could get from this funding stream is £2.44 million Review led approach 3.21 As indicated in paragraph 3.11, there are currently reviews of the Library Service and Leisure Services underway and these will offer options for savings. 3.22 A review of the Council’s Learning Estate is underway. This is not primarily focussed on delivering savings but has potential to deliver savings from rationalisation and redesign. 3.23 As reported to Council on 13 August 2024 (paragraph x of the Minute refers) a workforce review is being scoped, with a view to delivering financial benefit. Partnership approach 3.24 As noted in paragraph 3.13 MIJB have approved a programme aimed to deliver savings of £8.3 million. There is clearly scope for the Council to benefit from a greater reduction in the MIJB overspend than assumed in paragraphs 3.13 and included in the table at 3.15. The provision made in the Council’s budget for funding for MIJB overspend is £5 million. 3.25 Although MIJB is the Council’s largest partner organisation by far, there are other partner organisations and scope to deliver savings from a recalibration of funding arrangements. It is intended that options are brought forward in regard to this. Further savings 3.26 Per paragraph 3.10, Heads of Service are being asked to further develop options for service reduction / cessation. 3.25 An estimate of the scope for contributing towards meeting the budget gap from each of the above elements is set out below. Page 45
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para £ million Energy efficiency 3.18 0.35 Council Tax (up to 10% increase) 3.19 1.65 Teacher numbers (max) 3.20 2.44 Leisure and Library review 3.21 1.00 Learning Estate 3.22 0.50 Workforce review (indicative - 1% of pay bill) 3.23 1.00 MIJB (remove overspend completely) 3.24 2.00 TOTAL 8.94 3.26 The Council will continue to bring forward service options. Whereas the potential for income relating to teacher numbers is largely outwith the Council’s control (at least until grant conditions are agreed) there are elements of choice in the other areas listed and the Council has a clearly mapped work plan which will potentially remove the budget gap. 3.27 These workstreams are complemented by the service reviews being carried out (paragraph 3.10). 3.28 All this work is done with the background of uncertainty regarding future funding from Scottish Government. Recent announcements from Scottish Government emphasise that their budget is under severe pressure. The savings plan must acknowledge the need for headroom to give leeway for potential reductions in grant funding as well as for other unforeseen contingencies. 4 COMMUNICATION AND PUBLIC ENGAGEMENT 4.1 The Council on 23 August 2023, agreed a budget engagement strategy to engage on future priorities and delivery of services within a reduced budget. The strategy set out a number of stages of engagement with communities: awareness and understanding; involvement and influence; and implementation and developing the future. There are 3 types of communication that will be identified for savings proposals and are set out in Appendix 1 to this report. ➢ Engaging – where there is scope for the community to influence and be involved so that we can work together on how the issue progresses; ➢ Consulting – where we have proposals and are inviting views on these so that we understand the impact, views and any further options before deciding upon the final solution; ➢ Informing – where we are clear how we plan to act but want to communicate effectively to ensure that people are informed about what we plan to do. 4.2 The engagement strategy was deployed in the lead up to the setting of the Council budget in February 2024 with feedback on the various stages being reported to the Council to inform decision making in the budget process. The Page 46
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approach used drew positive feedback in the Council’s Best Value Audit report being recognised as an area of good practice and was effective in drawing in interest and views from the public, including informative stakeholder sessions on the future of leisure and library services (as reported to Full Council 26 June 2024). Therefore, it is proposed to continue with this overall approach and develop the engagement strategy to apply it to community and public engagement on the next stage of engagement on corporate priorities and budget planning. 4.3 Appendix 1 sets out the proposed strategy for community and public engagement, noting proposed topics for information and awareness, engagement and consultation. These topics require to be developed and adjusted as the council progresses with its short to medium term financial planning so that they align with emerging areas for review and there is flexibility in the topics covered for that reason. 4.4 As a development from the tools used to date, it is proposed to make use of a wider range of online options to engage more people in an ongoing dialogue over time and with a view to appealing to a wider demographic, for example younger people and parents of young children may be more likely to use an online opinion tool or virtual engagement than attend an in person meeting. An online tool will also enable a build up of an ongoing dialogue and information bank where people can access information. 4.5 If the Council agrees the proposal to develop the engagement as set out, the next steps would be to: • Update and finalise the factual information to support the engagement activity • Set up the online information • Make ready the online tools and any survey for particular points (e.g. council tax level) • Set up and activate social media engagement • Set dates and develop options for in person events • Gather feedback for reporting to council late 2024/early 2025 5 SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)), Financial Planning is integral to the Council’s overall planning processes and allows the Council to direct resources to its agreed priorities. (b) Policy and Legal The Council is required by statute to set a balanced budget before the start of the financial year. The requirement is set out in the Local Government Finance Act 1992 (section 93). (c) Financial implications The Council has an underlying structural deficit of over £8 million which will be met from reserves in 2024/25 and a continued and heightened budget gap is forecast for 2025/26 with further savings required in Page 47
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2026/27, estimated at £12.7 million across the two years, with £1.5 million already approved and a further £0.36 million identified in this report. Early action to tackle the projected funding gap for 2025/26 is urgently required and the Short to Medium Term Financial Strategy sets out how this is planned to be achieved. There are considerable uncertainties regarding a number of budget pressures, particularly pay awards and future local government settlements, and other areas of risk to the budget process. To achieve financial stability and sustainability the creation of further non-essential budget pressures must be avoided. (d) Risk Implications The forecast deficits for 2024/25 and 2025/26 represent a significant risk to the Council. There is also a risk that the deficits are understated. The main areas of risk are: Regarding the levels of savings – these represent a high proportion of the Council’s budget and not all budgeted spend is under the Council’s control. Regarding the projected levels of deficit – • The level of future grant funding from Scottish Government is unknown at present but Scottish Government are indicating that their budget is overcommitted • Pay awards are not agreed for 2024/25 and future pay awards are unknown at present and the impact of pay awards is significant • The impact of continuing inflation on procured goods and services may be greater than forecast. Although the rate of inflation is decreasing this is not necessarily translating into falling prices. • Interest rates remain higher than in recent years • Approved savings might not achieve target • There may be emerging budget pressures from changing circumstances not captured in the current projections. (e) Staffing Implications No staffing implications arise directly from this report, however the MIJB Recovery Plan may impact on Council staff. (f) Property There are no property implications arising directly from this report. (g) Equalities/Socio Economic Impact Any savings proposal with an equalities impact will be subject to an Equalities Impact Assessment (EIA) when reported. (h) Climate Change and Biodiversity Impacts There are no implications for biodiversity arising directly from this report. (i) Consultations CMT and Heads of Service have been fully involved in the development of the proposed Savings Plan. Page 48
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6 CONCLUSION 6.1 There are considerable uncertainties regarding the Council’s budgetary position in 2024/25 and beyond, however the underlying position is a substantial deficit, funded by use of ear-marked reserves to balance and that is not sustainable. 6.2 The Savings Plan sets out the steps taken to date, further actions in train and current estimates of savings likely to be available. 6.3 The Engagement Strategy sets out the next stage of engagement on the budget. Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Ref: SPMAN-1293228629-1121 Page 49
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Appendix 1 Budget Engagement 2025/6 Introduction In preparing to set our 2024/25 budget, the Council set out an approach to engagement to enable community participation and influence in our budget setting. We are now taking that approach forward into our financial planning for 2025/26 onwards. This paper sets out how the Council will engage on its agreed priorities and delivery of services within the context of a reduced financial envelope and a budget deficit of between £10m and £18m. Current estimates are that £10m savings are required by 2025/26 and £0.5m in 2026/27 with an estimated 2.5% real terms reduction on budget funding anticipated, further reductions to operating costs will be required. It’s likely that services will have to be reduced and that we may have to target them to meet greatest need. The Council continues to have to consider what services to provide and to think differently about what and how services are provided that are financially sustainable and to engage with our community in what the Moray Council of the future should be. Aim To build understanding and relationships between the Council and the community to help both understand and take action on the needs or issues that communities experience in an affordable way. We want our engagement and consultation to lead to decisions that make the best use of our resources to: - Delivery efficient and effective services that provide value for money - Better align services to meet essential needs - Better reflect community values and improve outcomes - Have a greater likelihood of effective implementation Approach Our engagement with the communities of Moray will continue as a staged approach as the issues develop and become clearer. This will mean that the work with communities will vary from engagement, to consultation to information depending on circumstances. The aim is to enable a dialogue with communities to help the Council to understand the impact of decisions, including equality impacts, possible alternatives, mitigations and how implementation could best be managed. For each proposal, the council will be clear about the nature of the discussion and what it would be possible to influence. The outline below illustrates the purpose and points for information gathering that will be used at each stage, although this will require development as the detail emerges. The approach also aims to manage expectations by making it clear that during a time of increasing need and declining resources, the outcomes may well be the council doing less, reducing standards, increasing charges and targeting services to the most vulnerable. Item 9. Page 51
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There will be various stages to the engagement work and differing degrees of maturity in the proposals under discussion. Some of the budget measures that need to be considered will have a higher degree of urgency if they are to contribute towards the 2025/26 budget setting process, however there are also longer term changes and transformation that require to be progressed where there can be a developing engagement over time. Some of service areas may already been subject to some level of community engagement and be entering the next phase while others will be new. We recognise that it is important to be clear about the purpose and expectations of our communication with communities and so with each topic we will make it clear whether we are: ➢ Engaging – where there is scope for the community to influence and be involved so that we can work together on how the issue progresses ➢ Consulting – where we have proposals and are inviting views on these so that we understand the impact, views and any further options before deciding upon the final solution ➢ Informing – where we are clear how we plan to act but want to communicate effectively to ensure that people are informed about what we plan to do Outcomes This engagement is taking place at a time of increasing needs and reducing financial resources. Delivering priorities and services in that context continues to mean that the Council will do less than it does now, that standards may have to reduce and that we have to focus services on the most vulnerable: targeted to those who experience the greatest inequalities or with the highest needs. Charges have increased previously but it is likely that Council Tax will have to go up by more. Whilst this is not a welcome position, it is one that the Council wants to hear views on to ensure that community perspective and the experience of service users is built into how these difficult decisions are taken and implemented within the available time and budget. One of the key messages that has to be conveyed is that with the anticipated reduction in budget coming in to the Council from UK and Scottish Governments, the Council will have to continue to reduce its operating costs year on year to be able to operate in a financially sustainable way. So while the savings proposals for 2025/26 are significant, more are likely to be required in future years which means the Council will continue to review how we operate and to look for ways to be more efficient. To achieve that we plan to continue to review our services and make changes to service delivery that incorporate digital and lean principles through the Council’s Transformation programme as well as to consider further savings on an ongoing basis. Stakeholders We understand that this continues to be a difficult time of change for our workforce, partners and communities and we are committed to communicating effectively with all stakeholders over the period of change. Where our workforce is affected, we will make every effort to ensure that this is handled sensitively and confidentially with those directly affected ahead of any wider communication and we will fully involve trade unions in this process. Page 52
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The timing of workforce communications is cross referenced in this plan but there is a separate parallel plan to deal with workforce engagement and consultation. Engagement will also take place with partners through the Community Planning Partnership arrangements as well as with any specific agencies and organisations in relation to particular proposals. Page 53
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Workforce Community Dates Issues Audience Purpose and Points to Test Feedback Focus Approach/Tools Stage 1: Awareness and Understanding October Information and Engagement October Corporate Plan Progress - Priorities - Vision and value - Future focus Financial Planning – refresh and learning from 2023 - Awareness - Savings preferences - More income? Public – all community councils and groups Refresh, Update and Recognise starting point Raise awareness & Understanding of : financial situation, council priorities and performance related to these Recognition that this is next stage of ongoing work Views on how priorities should translate into service budgets Create appetite for future involvement Test tolerance for increased charges (council tax)? Test tolerance for service reductions (any specifics?) Council Tax – views on max increase Charges Reduced services: Community priorities for spend/budget allocation New web tool (if available) Online service prioritisation (if tool available) Online survey (if enough service proposals to ask about) Council website and social media channels Stage 2: Involvement and Influence November/ December Engagement Nov/Dec Big Conversation: - Topics to be confirmed as budget work progresses Public – all interest groups Enhance council understanding of community and citizen experiences Contribution to future service design Priorities for future services Where to retain Online information and surveys Focus groups Page 54
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Workforce Community Dates Issues Audience Purpose and Points to Test Feedback Focus Approach/Tools - First phase: general engagement on whole council of future, themes in corporate plan, testing of awareness and boundaries on what council can do Understanding of and contributions of views to options for lower cost services Feedback on priorities for services Scope for community transfers/involvement/delivery Options to increase community self-service, resilience Increased or structured charging Where reductions tolerable Ideas for income generation Views on significant change Ward Open Drop in Sessions (Cllrs, Leader, CMT) Consultation Nov/Dec Consultation on specific service proposals: Libraries Equalities: on specific proposals Service users Interest groups Understanding impact of proposals Consider mitigations Identify/consider alternatives Soundings and input on delivery method Response to specific proposals Information on mitigations and impacts Alternatives for in service saving Points to address in implementation Online information and surveys Directed comms to specific groups and users In person service led events / workshops Stage 3: Implementation and Developing Future Plans Jan/Feb 25 Topics at this stage will be those moving from engagement to consultation from earlier stages Or, may be new areas where proposals are emerging and engagement is initiated Page 55
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Workforce Community Dates Issues Audience Purpose and Points to Test Feedback Focus Approach/Tools There will also be some proposals where information is being provided on implementation As financial planning work progresses, there may be numerous engagement, consultation and information activities at differing stages of progress running simultaneously. This is very likely by Stage 3 Engagement To be confirmed New and emerging topics where there is scope for influence and involvement in future options Online information and surveys Focus groups Ward Open Drop in Sessions (Cllrs, Leader, CMT) Consultation To be confirmed Specific proposals for consultation, for example to o gather information about impact or methods of implementation (may have been previous engagement) Online information and surveys Directed comms to specific groups and users In person service led events / workshops Information To be confirmed Changes at implementation stage where information is being provided to stakeholders As required for each change Page 56
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Workforce Community Dates Issues Audience Purpose and Points to Test Feedback Focus Approach/Tools Or new information, for example about the council financial position Page 57
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: MORAY COUNCIL’S CONNECTED CHARITIES’ AUDITED ANNUAL ACCOUNTS FOR THE PERIOD 1 APRIL 2023 TO 31 MARCH 2024 BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To submit to the Council the audited Annual Accounts for Moray Council’s Connected Charities for the year ended 31 March 2024. 1.2 This report is submitted to Council in terms of Section III B (20) of the Council’s Scheme of Administration relating to the he management and investment of any funds including Common Good Funds and trust funds, under the control of the Council. 2. RECOMMENDATION 2.1 It is recommended that the Council considers and approves the audited Annual Accounts for the Connected Charities for the financial year 2023/24. 3. BACKGROUND 3.1 Moray Council (all 26 councillors) acts as sole trustee for the administration of 30 small charitable trusts, which are all registered with the Office of the Scottish Charities Regulator (OSCR). 3.2 Section 106 of the Local Government (Scotland) Act 1973 applies the accounting and auditing requirement of the Act to any trust fund where an authority or some members of the authority are the sole trustees. As section 106 requires an audit, the appointments of local authority auditors include the provision of an auditor’s report for charitable funds covered by that section. 3.3 Regulation 7 of the Charities Accounts (Scotland) Regulations permits charities that have a common purpose or shared management to prepare a single set of “connected charities” accounts. Moray Council acts as sole trustee to 30 individual small charitable trusts. On the basis of this shared management arrangement, it has been agreed with the Council’s auditors that Item 10. Page 61
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the financial result of the 30 individual small charitable trusts can be consolidated into a single set of accounts for audit purpose. 3.4 A copy of the Connected Charities Audited Annual Accounts for 2023/24 is attached as APPENDIX 1 to this report. 3.5 The audit process highlighted identified no changes to the financial information contained in the Annual Accounts and therefore there has been no change in the balances held. Minor presentational amendments have been made. 3.6 The External Auditors have given the Council an unqualified opinion in the Independent Auditors’ Report, which can be found on pages 16-18 of the Accounts. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) There are no implications for the Corporate Plan or the LOIP. (b) Policy and Legal According to Paragraph 6 (1) of the Local Authority Accounts (Scotland) Regulations 1985, a Local Authority is required to submit its Audited Accounts to the Council by 30 September each year. Work was not completed on the audit of the Council’s main accounts in time for this deadline to be met, but in the case of the Connected Charities Accounts the deadline has been met. The review by the External Auditors of the council’s Accounts is in accordance with the council’s Code of Corporate Governance and ensures that the council complies with established policies, procedures, laws and regulations. (c) Financial implications The audit process highlighted identified no changes to the financial information in the Annual Accounts and therefore there has been no change in the balances held. (d) Risk Implications There are no risk issues arising directly from this report. The work undertaken by the External Auditor provides assurance to the council that the Connected Charity Accounts for 2023/24 give a true and fair view of the financial position and expenditure and income of the council for the year. (e) Staffing Implications Staff throughout the Council provide information for the inclusion in the annual Statement of Accounts. (f) Property There are no property issues arising directly from this report. Page 62
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(g) Equalities/Socio Economic Impact There are no equalities issues arising directly from this report. (h) Climate Change and Biodiversity Impacts There are no climate change and biodiversity issues arising from this report. (i) Consultations None. 5. CONCLUSION 5.1 The Council’s External Auditor has issued an opinion with no qualifications for the 2023/24 Connected Charities’ Annual Accounts which means that the audited financial statements give a true and fair view of the financial position and expenditure and income of the council’s Connected Charities for the year. Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Held in Financial Services Ref: SPMAN-1293228629-1138 Page 63
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AUDITED The Moray Council - Connected Charity Trust Funds Trustees' Report and Financial Statements For the year ended 31 March 2024 Item 10. Page 65
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Contents Pages Trustees' Annual Report 1 - 4 Statement of Financial Activities 5 Balance Sheet 6 Notes to the Financial Statements: Note 1 Statement of Financial Activities 7-8 Note 2 Balance Sheet 9-10 Note 3 Investment Income 11 Note 4 Awarding of Grants 11 Note 5 Investments 12 Note 6 Other Income 12 Note 7 Debtors 12 Note 8 Creditors: amounts falling due within one year 13 Note 9 Financial Instruments 13 Note 10 Related Parties 13 Note 11 Trustee Remuneration, Benefits and Expenses 13 Note 12 Staff Costs and Emoluments 13 Note 13 External Audit Costs 14 Note 14 Accounting Policies 14-15 Independent Auditor’s Opinion 16 Page 66
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1 Trustees' Annual Report Objectives and Activities Moray Council acts as sole trustee for 8 Connected Charity Trust Funds listed below which have charitable status and are registered with the Office of the Scottish Charity Regulator (OSCR). The policy relating to the reinvestment of income in, and disbursement from, Trust Funds was amended on 8 October 2013. The policy was amended to allow disbursement of capital from Trust Funds in accordance with the trust deed, provided there is unanimity amongst the trustees. For all other trusts the whole annual income of the trust will be available for disbursement in accordance with the trust deed, provided sufficient funds are maintained to meet commitments. The following table gives the OSCR charity registration number, the charity name and an indication of the purpose of each Trust. The only activity carried out by each of the Trusts in relation to those purposes is the making of grants. Charity Number Charity Name Purpose SC019017 Moray and Nairn Educational Trust To provide assistance to persons who have been resident in Moray and Nairn for the last five years and to organisations belonging to the former counties of Moray and Nairn for: •bursaries for attendance at a Scottish University or central institution • grants for adult education •provision and maintenance of sports facilities for the benefit of young people •travel grants for educational purposes SC019033 Keith Poor Householders Fund (Keith Nursing Trust Fund) The relief of poverty for residents of the burgh of Keith and provision of financial assistance for funerals. Such individuals may apply to the trust fund for a grant. Only residents of Keith are eligible. SC019065 Castlehill Trust To support in the upkeep, maintenance and management of Castlehill, Forres. SC019066 Grant Park Trust To support in the upkeep, maintenance and management of Grant Park, Forres. SC019068 George Boyd Anderson Bequest To support improvements to the community of Lossiemouth. Individuals and groups may apply to the trust fund for a grant. Only people resident in Lossiemouth are eligible. SC019069 Mr & Mrs William J Watt Dufftown Food Fund The relief of poverty amongst residents of Dufftown by providing groceries. Such individuals may apply to the trust fund for a grant. Only residents of Dufftown are eligible. SC019071 Robert Young Trust The relief of poverty for men in Forres aged over 65. Such individuals may apply to the trust fund for a grant. Only residents of Forres are eligible. SC046791 The Moray Council Charitable Trust Single Trust created for the reorganisation of existing funds that are restricted or have been fulfilled as far as possible. The trust purposes must follow those of the reorganised trusts. There are nine sub categories within the trust, by location and purpose. The Council agreed to a trust reorganisation process at a meeting on 14 November 2012; to create a single charitable Trust which would enable the reorganisation and transfer of assets of existing small charities held by the Council whose purposes could no longer be met. Page 67
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2 Trustees' Annual Report (continued) The Moray Council Charitable Trust was created in August 2016 with the objective of reorganising existing trust funds that are frustrated, perhaps due to limited funds or out of date purposes, into one large trust, split into geographical areas then split again into charitable purposes. The Trusts being transferred into the single charitable trust will be utilised, as far as possible, in a manner consistent with the original Trust purposes. This will create many ring-fenced funds within the single Trust, but will enable the resources of these trusts to be applied to better effect for charitable purposes rather than remaining in a frustrated trust that cannot be used. Achievements and Performance During the year 24 grants totalling £15,801 were made to individuals from the Moray and Nairn Educational trust, which includes means tested grants for education within Moray and Nairn, and bursaries for attendance at further education institutions in Scotland. Also during the year one grant of £3,791 was made from The Moray Council Charitable Trust in support of the local food bank. Financial Review The Moray and Nairn Educational Trust is an endowment fund, with income from investments allocated to an unrestricted fund of the trust. All other funds are unrestricted. This differentiation of funds is an essential feature in the presentation of a charity's statement of financial activities (SoFA) and balance sheet. The trust funds use the Moray Council's bank account for financial transactions and the balance is invested in the Council's Loans Fund for which it earns interest on the balance. It was agreed at the Moray Council meeting on 10 August 2022 that interest on balances held in the Council’s bank for the next two years would be calculated using the two year fixed Public Works Loans Board rate as at 1 April 2022 of 2.35%. Income received during the year was £27,528 (2022/23 £27,384). This was made up of £10,117 interest received from the Council's Loans Fund and £17,411 of dividend income (2022/23 £9,772 and £17,612 respectively). Grants totalling £19,592 were paid out during the year (2022/23 £14,752). Governance costs for the year were £8,174 (2022/23 £7,493). The Trust Funds have no specific reserves policy other than noted above regarding disbursement of capital and annual income. For many of the trust funds, the terms of the trust deed are very restrictive and this has resulted in a gradual accumulation of reserves over time. In the event that an individual trust fund falls into deficit, the trustees will consider whether it is likely that the deficit is temporary and can be recovered. If deficit recovery is considered unlikely, the Trust is effectively wound up and an application will be made to OSCR to remove them from the Scottish Charity Register. The revenue reserves held at 31 March 2024 were £1,047,476 (31 March 2023 £1,016,369). Structure, Governance and Management The trustees of the funds are the councillors listed on page 4. The trustees of the funds are the local Councillors who are appointed at local government elections and by-elections The trust funds are governed using the same governance framework that is applicable to the Council. This framework includes the principles: • taking informed and transparent decisions which are subject to effective scrutiny and managing risk • engaging with local people and other stakeholders to ensure robust public accountability Statement of trustees' responsibilities The trustees are responsible for preparing the Trustees' Annual Report and the financial statements in accordance with applicable law and regulations. The law applicable to charities in Scotland requires the trustees to prepare financial statements for each financial year. Under that law the trustees have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under that law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair Page 68
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3 Trustees' Annual Report (continued) view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the trustees are required to: • select suitable accounting policies and then apply them consistently; • observe the methods and principles in the Charities SORP; • make judgements and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. The trustees are responsible for keeping accounting records that are sufficient to show and explain the charity's transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the charity and financial information included on the Moray Council's website in so far as it relates to the charity. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Parent Entity Moray Council has a 100% interest in the Connected Charities and for the purposes of incorporation within the Council’s own Group Accounts, recognition has been made of the Council’s controlling interest. The Council administers these charities, but their assets are not available to the Council and have not been included in the Council’s balance sheet but are considered in Moray Council’s Group Accounts. The Charities SORP guidance requires that where a charity is a subsidiary they must disclose in a note to their account’s additional information of its parent entity, including: Parent’s principal purposes and activities Moray Council is local authority in Scotland and provides statutory functions and provides public services, including education, social care, waste management, libraries and planning. Control exercised by the parent Control can be exercised by the Council (the parent) through corporate trusteeship. Decisions regarding the general control and management of the Connected Charity Trust Funds are made by the Corporate Committee of the Council, which has delegated authority from the Council in this regard, but ultimately control rests with the full Council of elected members. Auditor The Connected Charity Trusts Auditor is: Grant Thornton UK LLP Level 8 110 Queen Street Glasgow G1 3BX Reference and Administrative details The financial statements of the charities listed on page 1 are included in this report. Page 69
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4 Trustees' Annual Report (continued) Trustees In terms of the "Trustees" of the Connected Charity Trust Funds, the guidance provided by OSCR is that those who have “general control and management" of the charity are the charity trustees. Decisions regarding the general control and management of the Connected Charity Trust Funds are made by the Corporate Committee of the Council, which has delegated authority from the Council in this regard; but ultimately control rests with the full Council of elected members. We have therefore interpreted the above guidance as meaning all elected members are charity trustees. All of the trustees for the financial statements are normally elected or re-elected at local government elections. By-elections are held to elect new members, on the occasions of elected members vacating their positions, who automatically become trustees. Names of Trustees in financial year 2023/24 Councillor James Allan Councillor Peter Bloomfield Councillor Neil Cameron Councillor Tracy Colyer Councillor Theresa Coull Councillor John Cowe Councillor John Divers Councillor Amber Dunbar Councillor Jeremie Fernandes Councillor Donald Gatt Councillor David Gordon Councillor Juli Harris Councillor Sandy Keith Councillor Scott Lawrence Councillor Graham Leadbitter Councillor Marc Macrae Councillor Paul McBain Councillor Neil McLennan Councillor Shona Morrison Councillor Bridget Mustard Councillor Kathleen Robertson Councillor Derek Ross Councillor John Stuart Councillor Sonya Warren Councillor Ben Williams Councillor Draeyk Van Der Horn Principal Address of the Trust Funds is: The Moray Council Council Offices High Street Elgin IV30 1BX Signed by one trustee on behalf of all the trustees: Councillor Kathleen Robertson Leader of Moray Council Page 70
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5 Statement of Financial Activities for the year ended 31 March 2024 2023/24 2023/24 2023/24 2022/23 Notes Unrestricted Endowment Total Funds Total Funds £ £ £ £ Income and endowments from: Investments 3 27,528 - 27,528 27,384 Voluntary Income 6 - - - 268 Total 27,528 - 27,528 27,652 Expenditure on: Charitable Activities 4 27,766 - 27,766 22,245 Total 27,766 - 27,766 22,245 Net gains/(losses) on investments 5 - 31,345 31,345 (15,815) Net Income/(Expenditure) (238) 31,345 31,107 (10,408) Transfers between funds - - - - Net movement in funds (238) 31,345 31,107 (10,408) Reconciliation of Funds: Total funds brought forward at 1 April 324,654 691,715 1,016,369 1,026,777 Total funds carried forward at 31 March 324,416 723,060 1,047,476 1,016,369 All results derive from continuing operations. There is no material difference between the funds carried forward for the financial year stated above and their historical cost equivalents, with the exception of the Fixed Asset Investments which are carried at fair value. All gains and losses recognised in the year are included in the statement of financial activities. Page 71
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6 Balance Sheet as at 31 March 2024 2023/24 2022/23 Notes £ £ Fixed Assets: Investments 5 615,059 583,714 Current assets: Loan Fund Balance 438,013 437,500 Debtors 7 1,304 1,655 439,317 439,155 Liabilities: Creditors: amounts falling due within one year 8 (6,900) (6,500) Net current assets 432,417 432,655 Total net assets or liabilities 1,047,476 1,016,369 The funds of the charity: Endowment Funds 723,060 691,715 Unrestricted Funds 324,416 324,654 Total charity funds 1,047,476 1,016,369 The notes on pages 8 to 16 form part of these financial statements. The unaudited Financial Statements were issued by the Trustees on 25 September 2024. Councillor Kathleen Robertson Leader of Moray Council Page 72
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7 Notes to the Financial Statements Note 1 Statement of Financial Activities for the year ended 31 March 2024 Moray and Nairn Educat ional Trust Moray and Nairn Educat iona l Trust Keit h Poor Householders Fund ( Keit h Nursing Trust Fund) Cast lehill Trust Grant Park Trust George Boyd Anderson Bequest Mr and Mrs William J Wat t Duf f t own Food Fund Robert Young Trust The Moray Council Charit able Trust Tot al Unrest rict ed f unds Tot al Endowment f unds SC019017 SC019017 SC019033 SC019065 SC019066 SC019068 SC019069 SC019071 SC046791 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 2023/ 24 Notes Unrestricted Endowment Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted £ £ £ £ £ £ £ £ £ £ £ Income and endowment s f rom: Investment Income 3 20,265 - 62 3 75 819 - 347 5,957 27,528 - Voluntary Income 6 - - - - - - - - - - - Tot al 20,265 - 62 3 75 819 - 347 5,957 27,528 - Expendit ure on: Charitable Activities 4 21,405 - 165 - 165 173 - 167 5,691 27,766 - Tot al 21,405 - 165 - 165 173 - 167 5,691 27,766 - Net gains/(losses) on investments 5 - 31,345 - - - - - - - 31,345 Net Income/ ( Expendit ure) ( 1,140) 31,345 ( 103) 3 ( 90) 646 0 180 266 ( 238) 31,345 Transf ers bet ween f unds - - - - - - - - - - Net movement in f unds ( 1,140) 31,345 ( 103) 3 ( 90) 646 0 180 266 ( 238) 31,345 Reconciliat ion of f unds: Total funds brought forward at 1 April 2023 12,614 691,715 2,561 - 3,103 35,271 - 14,862 256,243 324,654 691,715 Tot al f unds carried f orward at 31 March 2024 11,474 723,060 2,458 3 3,013 35,917 - 15,042 256,509 324,416 723,060 Page 73
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8 Notes to the Financial Statements (continued) Note 1 Statement of Financial Activities for the year ended 31 March 2023 Moray and Nairn Educat ional Trust Moray and Nairn Educat iona l Trust Keit h Poor Householders Fund ( Keit h Nursing Trust Fund) Cast lehill Trust Grant Park Trust George Boyd Anderson Bequest Mr and Mrs William J Wat t Duf f t own Food Fund Robert Young Trust The Moray Council Charit able Trust Tot al Unrest rict ed f unds Tot al Endowment f unds SC019017 SC019017 SC019033 SC019065 SC019066 SC019068 SC019069 SC019071 SC046791 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 2022/ 23 Notes Unrestricted Endowment Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted £ £ £ £ £ £ £ £ £ £ £ Income and endowment s f rom: Investment Income 3 20,414 - 62 3 74 786 - 334 5,711 27,384 - Voluntary Income 6 - - - 133 - - 135 - - 268 - Tot al 20,414 - 62 136 74 786 135 334 5,711 27,652 - Expendit ure on: Charitable Activities 4 20,028 - 136 136 136 144 135 138 1,392 22,245 - Tot al 20,028 - 136 136 136 144 135 138 1,392 22,245 - Net gains/(losses) on investments 5 - (15,815) - - - - - - - (15,815) Net Income/ ( Expendit ure) 386 ( 15,815) ( 74) 0 ( 62) 642 0 196 4,319 5,407 ( 15,815) Transf ers bet ween f unds - - - - - - - - - - Net movement in f unds 386 ( 15,815) ( 74) 0 ( 62) 642 0 196 4,319 5,407 ( 15,815) Reconciliat ion of f unds: Total funds brought forward at 1 April 2022 12,228 707,530 2,635 - 3,165 34,629 0 14,666 251,924 319,247 707,530 Tot al f unds carried f orward at 31 March 2023 12,614 691,715 2,561 - 3,103 35,271 - 14,862 256,243 324,654 691,715 Page 74
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9 Notes to the Financial Statements (continued) Note 2 Balance Sheet as at 31 March 2024 Moray and Nairn Educational Trust Keith Poor Household ers Fund (Keith Nursing Trust Fund) Castlehill Trust Grant Park Trust George Boyd Anderson Bequest Mr and Mrs William J Watt Dufftown Food Fund Robert Young Trust The Moray Council Charitable Trust TOTAL SC019017 SC019033 SC019065 SC019066 SC019068 SC019069 SC019071 SC046791 2023/24 2023/24 2023/24 2023/24 2023/24 2023/24 2023/24 2023/24 2023/24 Notes £ £ £ £ £ £ £ £ £ Fixed Assets Investments 5 615,059 - - - - - - - 615,059 Current Assets Loans Fund Balance 122,935 2,622 3 3,177 36,081 - 15,206 257,989 438,013 Debtors 7 1,304 - - - - - - - 1,304 124,239 2,622 3 3,177 36,081 - 15,206 257,989 439,317 Liabilities: Creditors: amounts falling due within one year 8 (4,764) (164) - (164) (164) - (164) (1,480) (6,900) (4,764) (164) - (164) (164) - (164) (1,480) (6,900) Net Current Assets 119,475 2,458 3 3,013 35,917 - 15,042 256,509 432,417 Total net assets or liabilities 734,534 2,458 3 3,013 35,917 - 15,042 256,509 1,047,476 The funds of the charity: Endowment Funds 723,060 - - - - - - - 723,060 Unrestricted Funds 11,474 2,458 3 3,013 35,917 - 15,042 256,509 324,416 Total charity funds 734,534 2,458 3 3,013 35,917 - 15,042 256,509 1,047,476 Page 75
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10 Notes to the Financial Statements (continued) Note 2 Balance Sheet as at 31 March 2023 Moray and Nairn Educational Trust Keith Poor Householder s Fund (Keith Nursing Trust Fund) Castlehill Trust Grant Park Trust George Boyd Anderson Bequest Mr and Mrs William J Watt Dufftown Food Fund Robert Young Trust The Moray Council Charitable Trust TOTAL SC019017 SC019033 SC019065 SC019066 SC019068 SC019069 SC019071 SC046791 2022/23 2022/23 2022/23 2022/23 2022/23 2022/23 2022/23 2022/23 2022/23 Notes £ £ £ £ £ £ £ £ £ Fixed Assets Investments 5 583,714 - - - - - - - 583,714 Current Assets Loans Fund Balance 123,429 2,696 135 3,238 35,407 136 14,996 257,463 437,500 Debtors 7 1,655 - - - - - - - 1,655 125,084 2,696 135 3,238 35,407 136 14,996 257,463 439,155 Liabilities: Creditors: amounts falling due within one year 8 (4,469) (136) (135) (135) (135) (136) (135) (1,219) (6,500) (4,469) (136) (135) (135) (135) (136) (135) (1,219) (6,500) Net Current Assets 120,615 2,560 - 3,103 35,272 - 14,861 256,244 432,655 Total net assets or liabilities 704,329 2,560 - 3,103 35,272 - 14,861 256,244 1,016,369 The funds of the charity: Endowment Funds 691,715 - - - - - - - 691,715 Unrestricted Funds 12,614 2,560 - 3,103 35,272 - 14,861 256,244 324,654 Total charity funds 704,329 2,560 - 3,103 35,272 - 14,861 256,244 1,016,369 Page 76
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11 Notes to the Financial Statements (continued) 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2022/ 23 £ £ £ £ £ £ £ £ £ £ £ £ Note 3 Investment Income Interest earned on loans pool balances 2,854 2,802 - - 62 62 3 3 75 74 819 786 Dividend income 17,411 17,612 - - - - - - - - - 20,265 20,414 - - 62 62 3 3 75 74 819 786 Note 4 Charitable Activities Grants Paid 15,801 14,752 - - - - - - - - - - Governance Costs: Accountancy and Legal costs 840 807 - - 1 1 - - 1 1 8 8 Audit of Financial Statements 4,764 4,469 - - 164 135 - 136 164 135 165 136 21,405 20,028 - - 165 136 - 136 165 136 173 144 Total Unrestricted funds Total Endowment funds 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2022/ 23 2023/ 24 2023/ 24 2023/ 24 2022/ 23 £ £ £ £ £ £ £ £ £ Note 3 Investment Income Interest earned on loans pool balances - - 347 334 5,957 5,711 10,117 - 10,117 9,772 Dividend income - - - - - - 17,411 - 17,411 17,612 - - 347 334 5,957 5,711 27,528 - 27,528 27,384 Note 4 Charitable Activities Grants Paid - - - - 3,791 - 19,592 - 19,592 14,752 Governance Costs: Accountancy and Legal costs - - 3 3 421 173 1,274 - 1,274 993 Audit of Financial Statements - 135 164 135 1,479 1,219 6,900 - 6,900 6,500 - 135 167 138 5,691 1,392 27,766 - 27,766 22,245 George Boyd Anderson Bequest M oray and Nairn Educational Trust M oray and Nairn Educational Trust Keith Poor Householders Fund (Keith Nursing Trust Fund) Castlehill Trust Grant Park Trust Unrestricted SC019017 SC019017 SC019033 SC019065 SC019066 SC019068 TOTAL SC019069 SC019071 SC046791 Unrestricted Endowment Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted Unrestricted M r and M rs William J Watt Dufftown Food Fund Robert Y oung Trust The M oray Council Charitable Trust Page 77
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12 Notes to the Financial Statements (continued) Note 5 Investments There is only one trust with investments; Moray and Nairn Educational Trust (SC019017). The investments are all unit trusts managed in line with the investment policy of the trust. Investments are included at fair value as at the balance sheet date. The return on investment is made up of the income derived from the investment (e.g. interest and dividends) and any gain or loss in the market value of the investment. If a charity sells an investment, a gain or loss on the carrying amount of the asset is realised upon its disposal. Where a charity retains an investment, an unrealised gain or loss on the carrying amount of the investment may arise at the balance sheet date. Trust law applies different rules to endowment funds. In an endowment, trustees cannot add the income from investments to the endowment capital; the income from the investment is allocated to the unrestricted fund. However, any gain or loss on investment is attributed to the endowment capital. The gain/(loss) on Revaluation figure includes the movement in the market value of all investments held by the trust. 2023/24 2022/23 £ £ Add: Net (loss)/gain on revaluation 31,345 (15,815) Net gains/(losses) on investments 31,345 (15,815) Balance Sheet 2023/24 2022/23 £ £ Opening Balance 583,714 599,529 Add: Net (loss)/gain on revaluation 31,345 (15,815) Balance sheet value of Investments 615,059 583,714 SoFA - Movement in the Available for Sale Reserve Note 6 Voluntary Income Voluntary income includes incoming resources which provide core funding or are of a general nature. Having due regard to the Council's plans to support any trust funds likely to fall into deficit, including funding any future deficits until the charity can be reorganised or wound up, there was a contribution of £268 in the previous year to support two Trusts: 2023/24 2022/23 £ £ Castlehill Trust - 133 Mr and Mrs William J Watt Dufftown Food Fund - 135 Total Contribution from Moray Council - 268 Note 7 Debtors 2023/24 2022/23 £ £ Investment income - Moray and Nairn Educational Trust 1,304 1,655 Total 1,304 1,655 Page 78
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13 Notes to the Financial Statements (continued) Note 8 Creditors: amounts falling due within one year 2023/24 2022/23 £ £ Audit fee 6,900 6,500 6,900 6,500 Note 9 Financial Instruments The trust funds only have financial assets and financial liabilities of a kind that qualify as basic financial instruments per FRS 102. Basic financial instruments are recognised at transaction value. The financial instruments disclosed in the Balance Sheet are made up of the following categories: 2023/24 2022/23 £ £ Debtors Financial Assets carried at contract amounts 1,304 1,655 Loans Fund Balances 438,013 437,500 Total Debtors 439,317 439,155 Creditors Financial Liabilities carried at contract amounts 6,900 6,500 Total Creditors 6,900 6,500 Note 10 Related Parties The Trustees and Moray Council are the only related parties of the Connected Charities. There were no transactions during the year between any of the Trustees and the Connected Charity Trust Funds. The trust funds use Moray Council's bank account for all transactions and the balance is invested in the Council's loans fund, for which it earns interest. There are no other outstanding balances due to or from Moray Council at 31 March 2024. The trustees are required by the Charities SORP to disclose material transactions with related parties; bodies or individuals that have the potential to control or influence the Trusts Funds, or to be controlled or influenced by the Trust Funds. The amounts paid by the Connected Charities to Moray Council for support services, including legal and finance costs, in 2023/24 was £1,274 (2022/23 £993). Note 11 Trustee Remuneration, Benefits and Expenses None of the trustees of the Trust Funds and no associated person connected with any of them have received any remuneration or any other benefit for their services. Further, no directly incurred expenses were reimbursed to the trustees during the year. Note 12 Staff Costs and Emoluments The Trust Funds have no employees and have not incurred any staff costs or emoluments. Page 79
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14 Notes to the Financial Statements (continued) Note 13 External Audit Costs The Connected Charities incurred £6,900 of statutory audit fees for the audit of the Connected Charities Trustees Report and Financial Statements for the year ended 31 March 2024. This cost has been accrued in 2023/24 and allocated to each trust (£6,500 2022/23). Note 14 Accounting Policies Basis of Preparation The financial statements for the charitable trusts have been prepared in accordance with the Charities: Statement of Recommended Practice 2015, commonly referred to as the SORP, in accordance with the Financial Reporting Standard 102 (FRS 102), which is effective for accounting periods beginning after 1 January 2019. The financial statements have been prepared under the historical cost convention as modified by the inclusion of investments at fair value, in accordance with the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). The financial statements are prepared on a going concern basis, and in accordance with applicable United Kingdom accounting standards. The principal accounting policies have been applied consistently throughout the year. In line with Regulation 7 of the 2006 Regulations, these financial statements have been prepared on the basis that the Trust funds for which it acts as sole Trustee are connected charities. As such the financial statements for the individual charities have been prepared on a collective basis for the Council. An amendment to the Charities SORP (FRS 102) issued by the Financial Reporting Council and published in February 2016 states the requirement for larger charities to prepare a statement of cash flow. The charitable trusts are not classed as a large charity and so a cash flow statement has not been prepared this year. Fund Accounting Unrestricted funds are spent or applied at the discretion of the trustees to further any of the charity's purposes. Endowment funds represent those assets which must be held permanently by the charity. Income generated from endowment funds held for investment must be spent on furthering its charitable purposes. Incoming Resources Investment income and other income is accounted for in the period in which the charity is entitled to the receipt and the amount can be measured with reasonable certainty. Resources expended Expenditure is included in the financial statements on an accruals basis and recognised when the activity takes place and not simply when the cash payment is made. Governance costs include the costs of the preparation and examination of statutory financial statements; legal advice to trustees on governance or constitutional matters and costs of administering grants. Investments Investments are included at fair value at the balance sheet date in accordance with the principles of the SORP. Investment gains and losses include any gain or loss on the sale of investments and any gain or loss resulting from revaluing investments to fair value at the end of the period. Page 80
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15 Notes to the Financial Statements (continued) Note 14 Accounting Policies (continued) Other Matters The Connected Charities is an arrangement that enables the trust funds for which Moray Council are sole trustees, and which are individually registered with OSCR, to be brought together and included in the Connected Charities Trustees' Report and Financial Statements. As registered charities, they are entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charities primary objectives, if these profits and surpluses are applied solely for charitable purposes. The connected charities are a Public benefit entity as defined by FRS 102 in that their primary objective is to make grants to the individuals or community groups rather than with a view to providing a financial return to trustees. The Charitable Activities of the trusts are making grants in accordance with the trust deeds and in agreement of the Trustees. There are no judgements, apart from those involving estimations, that the trustees have made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the accounts. There are no key assumptions concerning the future, or other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. Page 81
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16 Independent auditor’s report to the trustees of The Moray Council – Connected Charity Trust Funds and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements We certify that we have audited the financial statements in the statement of accounts of The Moray Council – Connected Charity Trust Funds for the year ended 31 March 2024 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Financial Activities, Balance Sheet, Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the charity as at 31 March 2024 and of its incoming resources and application of resources for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of The Charities Accounts (Scotland) Regulations 2006. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. Responsibilities of the trustees for the financial statements As explained more fully in the Statement of Trustees, the trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees intend to discontinue the charity's operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Page 82
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17 Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector and charity sector to identify that the Local Government (Scotland) Act 1973, the Charities and Trustee Investment (Scotland) Act 2005, and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charity; • inquiring of the Trustees as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charity; • inquiring of the Trustees concerning the charity’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the charity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Reporting on other requirements Other information The trustees are responsible for the other information in the statement of accounts. The other information comprises the Trustees’ Annual Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Trustees’ Annual Report to the extent explicitly stated in the following opinion prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Trustees’ Annual Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Charities SORP (FRS 102). Matters on which we are required to report by exception We are required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in our opinion: • proper accounting records have not been kept; or • the financial statements are not in agreement with the accounting records; or Page 83
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18 • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Angela Pieri, (for and on behalf of Grant Thornton UK LLP), 110 Queen Street Glasgow G13BX Date: ………………………………………………. Grant Thornton UK LLP is eligible to act as an auditor in terms of Part VII of the Local Government (Scotland) Act 1973. Page 84
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: REPORT ON TREASURY MANAGEMENT PERFORMANCE AND TREASURY AND CAPITAL INVESTMENT PRUDENTIAL INDICATORS FOR 2022/23 BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To provide Council with the annual outturn report on Treasury Management and details of the Council’s Prudential Indicators for Treasury Management and Capital Investment for the year ended 31 March 2024 1.2 This report is submitted to Committee in terms of Sections III B (3) of the Council's Scheme of Administration relating to Treasury Management and the Capital Plan. 2. RECOMMENDATION 2.1 It is recommended that the Council considers and notes the Treasury Management Performance and the Council’s Treasury Management and Capital Investment Prudential Indicators for 2023/24 as set out in APPENDIX 2. 3. BACKGROUND 3.1 The Council has adopted the CIPFA Code of Practice for Treasury Management in the Public Sector 2021 (the Code) and the Local Government Investment (Scotland) Regulations 2010. All treasury management activities are carried out in accordance with the Code and regulations. 3.2 The primary requirements of the Code are as follows: • An approved Treasury Management Policy, which sets out the policies and objectives of the Council’s treasury management activities. • An annual treasury management strategy report to Council for the year ahead and an annual review report to Council of the previous year. 3.3 The Local Government (Scotland) Act 2003 requires the Council to adopt the CIPFA Prudential Code for Capital Finance in Local Authorities and to Item 11. Page 85
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produce the prudential indicators set out in the Prudential Code. These indicators are designed to support and record affordable and sustainable capital investment and treasury management. 4. TREASURY PERFORMANCE 2023/24 4.1 This annual Treasury Management performance report covers: • The Economy and Interest Rates 2023/24 • Treasury Management Strategy and Performance for 2023/24 • Annual Investment Strategy and Performance 2023/24 • Investment Outturn for 2023/24 • Long Term Borrowing and Debt Rescheduling • Short Term Borrowing • Prudential Code for Capital Finance in Local Authorities The Economy and Interest Rates 2023/24 4.2 Between April 2023 and March 2024, the UK economy faced significant challenges, marked by persistent inflation and rising interest rates. The Bank of England maintained a restrictive monetary policy stance throughout this period, with the Bank Rate peaking at 5.25%. This was part of an effort to curb inflation, which remained above the 2% target, although there were signs of it gradually moderating by March 2024. Overall, while inflationary pressures began to ease towards the end of the period, the UK economy remained under strain, with the outlook for growth and inflation continuing to be a major concern. 4.3 The Bank of England (BoE) increased the Bank Rate from 4.25% at the beginning of the period to a high of 5.25% by September where it remained for the rest of the financial year. Whilst not as dramatic as the increases in interest rates experienced during 2022/23, rates had not been that high since February 2008. As at the writing of this report the Bank Rate has dropped to 5.00% with the authority’s treasury adviser Arlingclose forecasting that the chance of a cut in Bank Rate remains slim. 4.4 The Consumer Price Index (CPI) saw a steady decline from 8.7% to 3.2% over the period. This was attributable to the tighter monetary policy as mentioned above as well as a slowing domestic demand caused by higher interest rates, increased cost of living and reduced real incomes. This weakened demand exerted downward pressure on prices, particularly sectors sensitive to consumer sentiment, such as housing and retail. Inflation has continued to decrease eventually meeting the Government’s target of 2% in June 2024 before increasing slightly to its current rate of 2.2% 4.5 Quarterly Gross Domestic Product (GDP) increased 0.6% in the year, recovering from two consecutive quarters of negative growth (a technical recession) and a quarter of stagnated growth. Annual Investment Strategy 4.6 The Council’s creditworthiness policy was formulated after consultation with Arlingclose, the Council’s treasury advisers. The Chief Financial Officer maintains a counterparty list in compliance with the minimum criteria approved Page 86
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by Full Council on 3 March 2020 (paragraph 4 of the minute refers) 4.7 All credit ratings are monitored daily, and the Counterparty list amended to reflect any changes if necessary – there were no changes during 2023/24. Investment Outturn for 2023/24 4.8 The Council managed its investment in-house and invested with the institutions listed on the Council’s approved Counterparty list. 4.9 The table below shows the overall investment undertaken by the Council during 2023/24. Total sum deposited (£m) Average rate (%) Approved Financial Institutions 651.945 4.96 Council’s Bankers 92.186 3.84 TOTAL 744.131 4.80% The above figures are cumulative, and the actual amounts invested at any one time range from £6.187m to £54.425m. 4.10 The average rate of interest earned on investments during the year was 4.80%, compared to the average 7 day London Inter Bank Date Rate (LIBID) of 4.96%. When the Bank of England base interest rate increases, the Council’s Bank of Scotland call account rate is increased from that day, as is the LIBID rate. The money market funds in which the Council invests the balance of funds takes time to catch up as their interest rates are not set and fluctuate depending on the market and the size of the investment in each fund. The Council’s investments throughout the year were in line with the Treasury Management Practices and money deposited in the approved funds, redeeming from the ones with the lower rates first. 4.11 As at 31 March 2024, the following balances were invested Counterparty Investment Amount (£m) Interest Rate (%) Bank of Scotland Call Account 1.000 4.10 CCLA Money Market Fund 11.100 5.27 TOTAL 12.100 5.18 Long Term Borrowing and Debt Rescheduling 4.11 The Council’s long term external debt position at 31 March 2024 compared with the position at the end of the last financial year was as follows Page 87
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31 March 2023 31 March 2024 Actual (£000) Rate (%) Average Life Actual (£000) Rate (%) Average Life Fixed Rate Funding (PWLB) Fixed Rate Funding (Market) 126.542 33,400 4.99 4.68 17.35 50.82 128,417 33,400 5.07 4.68 17.18 49.81 TOTAL DEBT 159.942 4.88 161,817 5.07 There was no variable rate borrowing in the year. 4.12 The Council has maintained an under borrowed position which means the capital borrowing need (Capital Financing Requirement) has not been fully funded with loan debt. Cash supporting the Council’s reserves, balances and cash flows have been used as temporary measures to offset the need to borrow. 4.13 The strategy of effectively delaying new long term borrowing by utilising internal and temporary borrowing has served well at a time when comparatively cheaper temporary borrowing from other local authorities in readily available, and historically low investment returns gives rise to potentially significant carrying costs for new long-term borrowing. 4.14 There was no new long term borrowing from the Public Works Loans Board (PWLB) in the new year. 4.15 No debt rescheduling was undertaken during the year as the differential between PWLB new borrowing rates and PWLB premature repayments rates made rescheduling unviable. Short Term Borrowing 4.16 During the year, 19 new temporary loans, totalling £95m were borrowed from other UK local authorities. A table detailing the short term loans outstanding at 31 March 2024 can be found at APPENDIX 1. The Prudential Code for Capital Finance in Local Authorities 4.17 The Local Government (Scotland) Act 2003 requires the Council to undertake its treasury activities with regard to the Prudential Code for Capital Finance in Local Authorities 4.18 To comply with the Prudential Code, authorities must not borrow to invest primarily for financial return. The Prudential Code also states that it is not prudent for local authorities to make investment or spending decisions that will increase the Capital Financing Requirement (CFR) unless directly and primarily related to the functions of the authority. Borrowing is permitted for cash flow management, interest rate risk management, to refinance current borrowing and to adjust levels of internal borrowing. Borrowing to refinance capital expenditure primarily related to the delivery of a local authority’s function but where a financial return is also expected is allowed, provided that financial return is not the primary reason for the expenditure. Page 88
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4.19 The Code requires the Council to produce mandatory indicators aimed at assisting members in ensuring that proposed capital investment levels and treasury management decision satisfy the key requirements of affordability, prudence and sustainability. The Prudential Indicators for 2023/24 were approved at Full Council on 1 March 2023 (paragraph 6 of the minute refers). Performance against key indicators is shown in APPENDIX 2. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) None specifically arising from this report. (b) Policy and Legal The Local Government in Scotland Act 2003 provides the powers to borrow and invest as well as providing controls and limits on these activities. The Council has adopted the CIPFA Prudential Code and the CIPFA Treasury Management in the Public Services Code of Practice and Guidance Notes (“the CIPFA Code”) which was revised in 2021. The Council also complies with the Local Government Investments (Scotland) Regulations 2010 (“the Regulations”). All Treasury Management activities are carried out in accordance with the CIPFA Code and the Regulations. (c) Financial implications All financial considerations are contained within the body of the report and the attached APPENDICES 1 and 2. (d) Risk Implications The Council is aware of the risks of passive management of the treasury portfolio and, with the support of the Council’s treasury advisers, will proactively manage its investments and debt over the year. Capital expenditure is closely monitored and Budget Managers are aware of their responsibilities to manage budget allocations. (e) Staffing Implications None specifically arising from this report. (f) Property None specifically arising from this report. (g) Equalities None specifically arising from this report. (h) Climate Change and Biodiversity Impacts None specifically arising from this report. Page 89
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(i) Consultations This report has been produced in consultation with Arlingclose, the Council’s Treasury Advisors 6. CONCLUSION 6.1 The Council’s requirements for funds continues to be managed in accordance with the agreed Treasury Management Strategy. All treasury management and capital investment activities have been undertaken within the limits set by the Prudential Code Performance Indicators for 2023/24. Authors of Report: Jamie Fraser, Senior Accountant Background Papers: Ref: SPMAN-1293228629-1156 Page 90
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Appendix 1 Short Term Loans Outstanding as at 31 March 2024 Organisation Maturity Date Borrowing rate (%) Amount (£m) West Of England Combined Authority 13/06/2024 4.20 5.00 Fylde Borough Council 30/04/2024 4.50 2.00 Mansfield District Council 30/04/2024 4.50 3.00 Vale Of White Horse District Council 26/04/2024 4.50 5.00 Crawley Borough Council 06/09/2024 4.75 3.00 Gwynedd Council 16/09/2024 5.00 5.00 Rushcliffe Borough Council 22/07/2024 5.00 5.00 Renfrewshire Council 22/04/2024 5.70 5.00 West Yorkshire Combined Auth 23/07/2024 5.55 5.00 Western Isles Council 25/07/2024 5.90 5.00 Warwickshire County Council 27/03/2025 5.65 5.00 Bridgend County Borough 25/02/2025 5.60 5.00 Crawley Borough Council 14/02/2025 5.60 2.00 Oxfordshire County Council 26/11/2024 5.80 5.00 Westminster City Council 28/11/2024 5.90 5.00 Greater Manchester Comb Auth 19/04/2024 5.60 5.00 London Bor'Of Havering 22/04/2024 5.60 5.00 East Sussex County Council 13/03/2025 5.55 5.00 Wealden District Council 19/03/2025 5.65 5.00 West Yorkshire Pension Fund 13/08/2024 6.10 5.00 Middlesborough Council - Teeside Pension Fund 10/04/2024 6.25 5.00 TOTAL 95.00 Item 11. Page 91
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Appendix 2 TREASURY AND PRUDENTIAL INDICATORS External Debt and Treasury Indicators 1. The Authorised Limit for External Debt The authorised limit for external debt is required to separately identify external borrowing and other liabilities such as Public Private Partnership (PPP), Design, Build, Finance, Maintain (DBFM) Contracts and finance lease obligations. This limit provides a maximum figure to which the Council could borrow at any given point during the financial year. Authorised Limit 2023/24 Approved Indicator 2023/24 Estimated Indicator 2023/24 Actual Maximum £000 £000 £000 Borrowing 363,864 279.635 270,867 Other Liabilities 52,466 50,687 50,499 Total External Debt 416,330 330,322 312,366 The table shows that the limit was not breached. 2. Operational Boundary for External Debt This indicator is a management tool for in-year monitoring and is based on an estimate of the most likely level of external borrowing at any point during each year. The estimated indicators are based on the approved capital plan as part of the Council’s budget setting process. The actual is based on the capital expenditure in the year and there was slippage in various projects which has resulted in a variance. Operational Boundary 2023/24 Approved Indicator 2023/24 Estimated Indicator 2023/24 Actual Maximum £000 £000 £000 Borrowing 348,864 274,635 265,867 Other Liabilities 52,466 49,687 49,499 Total External Debt 401,330 324,322 315,366 The table shows that the limit was not breached. 3. Actual External Debt This is measured at the end of each financial year. The actual external debt reported in the annual accounts for the previous year is required to be shown as an indicator for comparison purposes only. Item 11. Page 93
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Appendix 2 Actual Debt At 31 March 2023 At 31 March 2024 £000 £000 Borrowing 241,020 259,917 Other Liabilities 50,009 48,499 Total External Debt 291,029 308,416 Other Liabilities include the PPP finance liability for Elgin Academy and Keith Primary School and the DBFM finance liability for Elgin High School. 4. Treasury Management Indicator There are four treasury prudential indicators, the purpose of which is to contain the activity of the treasury function within certain limits, thereby managing risk and reducing the impact of an adverse movement in interest rates. However, if these are set to be too restrictive they will impair the opportunities to reduce financing costs. The indicators are: • Upper limits on variable rate exposure – This indicator identifies a maximum limit for variable interest rates based upon the debt position net of investments. • Upper limits on fixed interest rate exposure – Similar to the previous indicator this covers a maximum limit on fixed interest rates. • Maturity structures of borrowing – These gross limits are set to reduce the Council’s exposure to large fixed rate sums falling due to refinancing within the same financial year, and are required for upper and lower limits. • Maximum period of investment - Following changes arising from the new Investment Regulations applicable from 1 April 2010, the Council can invest for periods longer than 364 days. The Council does not currently take advantage of this change and so has set a limit of Nil for investing over 364 days. Fixed and Variable Rate Limits 2022/23 Actual 2023/24 Approved Limits 2023/24 Actuals Interest Rate Exposure Upper Limit Upper Limit Upper Limit Limits on fixed interest rates based on net debt 100% 100% 100% Limits on variable interest rates based on net debt 35% 35% 0% Page 94
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Appendix 2 Maturity Structure of Fixed Interest Rate Borrowing 2022/23 Actual % 2023/24 Approved Limits 2023/24 Actual (£m) 2023/24 Lower Upper <12 months 36.44 0% 37% 102.869 40.06% 12-24 months 2.97 0% 20% 7.219 2.81% 2-5 years 10.77 0% 25% 25.238 9.83% 5-10 years 8.40 0% 50% 22.328 8.69% >10 years 41.43 0% 85% 99.163 38.61% Short term rates are low compared to longer term borrowing and in 2023/24 the Council has continued its policy of short term borrowing resulted in a minor breach of the <12 months limit. All other limits were maintained during the year. Maximum Principal Sums Invested Greater than 364 days 2022/23 Actual 2023/24 Actual Principal sums invested >364 days £0m £0m Capital Expenditure Indicators 5. Capital Expenditure This indicator is included so the Council complies with the Local Government in Scotland Act 2003 which requires the Council to establish and keep under review capital investment plans which are affordable. 2023/24 Approved Indicator 2023/24 Revised Indicator 2023/24 Revised Capital Plan 2023/24 Actual £000 £000 £000 £000 Capital Expenditure: General Services 61,566 61,566 42,936 30,429 HRA 19,671 19,671 19,671 5,883 Financed by: Capital Receipts 156 156 156 119 Capital Grant & Contributions 25.631 25,361 25,753 13,559 Reserves 0 0 124 4,896 Revenue 1,502 1,502 1,502 739 Total Funding 27,289 27,289 27,535 19,313 Net Financing Need for the year 53,948 53,948 35,072 16,999 Page 95
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Appendix 2 The General Service Capital Programme for 2023/24 final approved amount was £42.936 million. Expenditure for the year was £30.429 million, representing a delivery rate of 71% of the programme. The shortfall was largely a result of Education Estate expenditure being reprofiled into future years given the need to divert resource to the Reinforced Autoclaved Aerated Concrete (RAAC) works at Forres Academy and delays to the Learning Estate Improvement Programme (LEIP) 3 funding agreement. HRA spend in the same period was £5.883m against a revised capital plan of £19.671m representing a 30% delivery rate. Planned expenditure for the year included the new builds at Speyview, Aberlour and Bilbohall, Elgin which were delayed due to construction industry volatility causing these projects to be reviewed. Underspend to housing improvements occurred as a result of a lack of availability of external contractors and internal staff resourcing issues that led to delays in the development of some key investment programmes Prudence Indicators 6. Gross Debt and the Capital Financing Requirement This indicator records the extent that gross debt is less than the capital financing requirement. This indicator shows prudence by demonstrating that over the medium term external borrowing is used only for a capital purpose. The values are measured at the end of each financial year. Debt is the sum of external borrowing and other liabilities relating to the financing of assets (i.e. PPP, DBFM and finance leases). The Capital Financing Requirement (CFR) measures the Council’s underlying need to borrow for capital investment. The capital financing requirement rises over the period as a large proportion of the Council’s capital expenditure is financed by additional borrowing thus increasing the Council’s total outstanding debt. The Council pays off an element of the accumulated debt each year through a revenue charge (the scheduled debt amortisation). 2022/23 Actual 2023/24 Approved Indicator 2023/24 Revised Estimate 2023/24 Actual £000 £000 £000 £000 Borrowing 241,020 300,937 251,285 259,917 Other Liabilities 54,365 51,466 48,687 48,499 Gross Debt 295,385 352,403 299,972 308,416 CFR 368,461 411,617 418,722 370,760 Under Limit by 73,076 59,214 77,451 62,344 The above figures confirm that the Council’s borrowing is under the Capital Financing Requirement. Page 96
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Appendix 2 Affordability Indicators 7. Ratio of Financing Costs to Net Revenue Stream This is an indicator of affordability and calculates the proportion of the net revenue budget required to finance the costs associated with borrowing and investment and is calculated by taking the total financing costs, including the costs of PPP/DBFM schemes as a proportion of the income received by the Council. The Council has set a limit of 10% for General Services and 35% for the HRA. The relevant proportions are set out below. 2022/23 Actual 2023/24 Approved Indicator 2023/24 Revised Indicator 2023/24 Actual General Services 8.72% 8.54% 8.84% 8.72% HRA 21.95% 23.30% 24.36% 23.60% 8. Estimates of Incremental Impact of New Capital Investment Decisions on Council Tax and House Rents This indicator demonstrates the expected incremental impact of planned capital expenditure and associated borrowing on council tax and rent levels, calculated on the assumption that capital expenditure is funded by an increase in Council Tax and rent. Service 2022/23 Actual 2023/24 Approved Indicator 2023/24 Revised Indicator 2023/24 Actual Council Tax – Band D £54.45 £36.60 £39.49 £34.48 Average Weekly Housing Rents £0.79 £1.26 £2.64 £2.13 The calculated amount on Council Tax reflects the increasing cost of borrowing. Interest rates are continuing to rise and this will have an impact on the Council’s future cost of borrowing. For the HRA the 2023/24 actual impact on rents was less than the revised indicator due to less expenditure than planned due to delays on various projects. Page 97
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: CHANGE TO SCHEDULE OF MEETINGS BY: DEPUTE CHIEF EXECUTIVE (EDUCATION, COMMUNITIES AND ORGANISATIONAL DEVELOPMENT) 1. REASON FOR REPORT 1.1 To request agreement from the Council to change a scheduled ordinary meeting of the Council to a special meeting to consider the Budget and add in an additional meeting. 1.2 This report is submitted to Committee in terms of Section III (B) (6) of the Council's Scheme of Administration relating to any new matter which does not fall within the terms of reference of any other Committee. 2. RECOMMENDATION 2.1 It is recommended that Council agree to: i) designate the scheduled ordinary meeting of the Council on 26 February 2025 as a special meeting to consider the 2025/26 Budget; ii) add in an additional meeting on 19 February 2025 as an ordinary meeting of the Council; and iii) add a special meeting of Moray Council on 22 October 2024 and a diary hold for a special meeting on 14 January 2025, pending confirmation of this date. 3. BACKGROUND 3.1 Each year a special meeting of the Council is arranged for members to consider the budget for the forthcoming year. 3.2 Due to timings for council tax billing for 2025/26, it has been determined that the scheduled meeting on 26 February 2025 would be the ideal date for Council to consider and set the budget. As this meeting is already scheduled as an ordinary meeting it is proposed to amend this meeting to make it a special meeting for the budget. Item 12. Page 99
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3.3 In order to consider other items of business not connected to the Council’s budget it is proposed to add in a further meeting which would normally be considered as a special meeting and make it an ordinary meeting on 19 February 2025. 3.4 Additional meetings of Moray Council are required on 22 October 2024 – after the Planning and Regulatory Services meeting - to consider the first tranche of budget savings and on 14 January 2025 to consider the second tranche. It is not possible to accommodate this business at ordinary meetings due to timings for workforce and other consultation periods while taking into account the October and Christmas holiday periods. As timings are still being finalised, it is asked that meantime 14 January 2025 is kept as a diary hold to be confirmed by the meeting on 4 December 2024 at the latest. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) None (b) Policy and Legal None (c) Financial implications None (d) Risk Implications None (e) Staffing Implications None (f) Property None (g) Equalities/Socio Economic Impact None (h) Climate Change and Biodiversity Impacts None (i) Consultations Consultations were carried out with the Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance) and Depute Chief Executive (Education, Communities and Organisational Development) and Head of Governance, Strategy and Performance have been consulted and any comments incorporated into the report. 5. CONCLUSION 5.1 The Council is asked to amend the scheduled calendar of meetings to take into account the timing of setting the Council’s budget for 2025/26. Page 100
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Author of Report: Tracey Sutherland, Democratic Services Manager Background Papers: Ref: SPMAN-2045703626-462 Page 101
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: CLIMATE ADAPTATION BENCHMARKING 2023 BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To inform the Council of the findings from the council’s first climate adaptation benchmarking exercise and propose updated actions for the Climate Change Action Plan. 1.2 This report is submitted to Council in terms of Section III (F) (33) of the Council’s Scheme of Administration relating to the review or preparation of a Climate Change Strategy. 2. RECOMMENDATION 2.1 It is recommended that the Council agree:- i) to note the council’s statutory duty to ensure activities and programs are designed to best support delivery of climate adaptation; ii) to note the contents of the first adaptation benchmarking report and; iii) the existing adaptation action within the Climate Change Action Plan be updated as outlined in para 5.6. 3. BACKGROUND 3.1 Scotland’s climate is changing faster than scientists predicted, in some cases by many decades. At the same time as rapidly reducing carbon emissions to meet net zero, it is also essential that the unavoidable impacts of climate change are understood and acted upon. This is referred to as climate adaptation. 3.2 Adaptation is a legal requirement for local authorities, with the Climate Change (Scotland) Act 2009 requiring that all public sector organisations ensure their activities and programming are designed so as to best support delivery of the Scottish statutory adaptation programme and to report progress annually. Other legislative and policy drivers, particularly around planning, Item 13. Page 103
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flood risk and emergency planning also require climate adaptation to be addressed. Climate change officers recognised that the Climate Change Strategy and Action Plan did not clearly address adaptation, but that the council is already contributing to the national adaptation plan, for example through flood prevention and the local development plan. At a meeting of the Economic Development and Infrastructure Services Committee on 2 May 2023 a new action to the Action Plan was agreed to ‘identify current adaptation work happening across the council, including gaps and opportunities’ (para 10 of the minute refers). 3.3 The Scottish Government’s funded programme, Adaptation Scotland, provides support and advice to public bodies on how to adapt. Existing staff used these free tools and support to undertake an initial snapshot of climate readiness across the council, including the completion of an Adaptation Benchmarking template that will be shared with Adaptation Scotland. 3.4 The Benchmarking Tool helps illustrate an organisation’s adaptation journey. It should be used to provide a baseline assessment of the organisation’s current adaptation capabilities and how their development progresses over time. It highlights which capability areas the organisation is excelling at and others where more work may be needed. It can aid communication and engagement to demonstrate the ambitions of the organisation and the steps required to get there. 3.5 Feedback from Adaptation Scotland’s public sector network indicates that progress across Scottish local authorities is mixed, with some being several years into dedicated, funded programs, and others at very early stages or not yet engaging with the programme. 4. FINDINGS Risk and vulnerability 4.1 Some of the main risks to the council have been identified as • Increased damage to infrastructure from heavy rainfall, storms and sea level rise. • Increased risk to already vulnerable people from extreme heat in summer, dampness in winter, isolation during emergencies, and rising costs. • Severe threat to ecosystem services such as water, food and air from biodiversity loss, the spread of pests and diseases, and extreme weather both locally and globally. Moray Council’s climate readiness 4.2 Adaptation Scotland’s Capability Framework sets out best practice steps for a public body to take to prepare for climate impacts. The benchmarking tool is structured around the framework (Appendix 1 - summary and wider discussion, and Appendix 2 for the completed benchmarking tool). 4.3 Adaptation is very clearly evidenced in some key service areas, most notably coastal change and flood management planning, and local development Page 104
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planning. While some progress is being made in other areas, the organisation as a whole is in the very early stages of preparing for climate impacts. 4.4 The Capability Framework highlights ways the council should consider to progress the council’s climate readiness, including: • Increase understanding of the risks from the wide range of climate impacts across all services, plans and policies. • Develop a long term, strategic approach that takes advantage of early action and opportunities to combine adaptation with other work • Increase the urgency of the response; and assess the cost of inaction • Climate change governance structures should comprehensively include and monitor adaptation activity. • The need for an area wide strategy or plan for climate change 5. NEXT STEPS 5.1 The climate readiness report (Appendix 1) discusses how to address this challenge, taking into account the difficult financial context. Progress will be made where capacity allows, and aligned with other work as far as possible or reports submitted where funding or resource direction decisions are required. 5.2 As a practical next step, it is proposed that two new actions be added to the Climate Change Action Plan, replacing the existing action to ‘identify current adaptation work happening across the council, including gaps and opportunities’ with the following: a) Action: Climate change officers to work with all services to develop a list of adaptation actions based on the council’s current adaptation capability, Scottish National Adaptation Programme (SNAP) 3 objectives, and taking a measured approach regarding resources. To be consulted on and brought to members with the Climate Change Strategy update by quarter 3 2025. b) Action: A climate risk assessment to be undertaken, reporting on current, historical and projected costs of climate impacts on the council. To be carried out in late 2024 to inform the Climate Change Strategy update in 2025. c) If agreed, these actions will be later added to the Climate Change Plan and Route Map to Net Zero, which is in a separate report to this committee meeting. Delivery of the actions will then support informed decisions to be made when the Climate Change Strategy update is reported to the council in 2025. 6 DRAFT SCOTTISH NATIONAL ADAPTATION PROGRAMME 3 (SNAP 3) 6.1 The next Scottish National Adaptation Programme (SNAP 3) has recently been out for consultation, with the final plan due in September 2024. Moray did not respond to the consultation, however the draft does provide a steer on how the council should develop its adaptation work over the coming year, most notably with the forthcoming Climate Change Strategy update. Page 105
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6.2 Draft SNAP 3 proposes the following five outcomes; 1. Nature Connects, 2. Communities, 3. Public Services and Infrastructure, 4. Economy, Business and Industry, and 5. International Action. 6.3 There is a strong focus on cross cutting policies, reflecting the need to work synergistically to achieve meaningful change and make use of available resources. National Planning Framework 4 is a good example of where this is already in practice, with action to address climate change and nature loss woven throughout the policies. Other policy links outlined in the draft SNAP include Just Transition plans, flood resilience, biodiversity strategy, health and social care, the Learning Estate Investment Programme, and Sustainable Procurement Duty. 6.4 New statutory guidance to support public bodies in the delivery of SNAP 3 is expected in 2025, but it is recognised that the pace of delivery for the council will be dependent on available funding and in particular external funding. In the meantime it is recognised that local authorities have a statutory duty to embed climate adaptation into public service design and operational resilience and that SNAP 3, alongside Adaptation Scotland’s guidance, reinforces and guides how this duty can be delivered. 7 SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The council has declared both a climate emergency and a nature emergency, recognising the responsibility the council has to take urgent action. Adaptation supports all three corporate priorities by: ensuring those who are most vulnerable, particularly children, are protected; progressing a green economy and green skills in Moray, ensuring long term wellbeing is achieved, and; embedding climate change and biodiversity in all processes, plans and policies. The Corporate Plan under challenges to Build thriving, resilient empowered communities states “Effects of climate change on our environment and communities and under opportunities “Achievement of Climate Change targets”. (b) Policy and Legal The Climate Change (Scotland) Act 2009, requires that all public sector organisations ensure their activities and programming are designed so as to best support delivery of the Scottish statutory adaptation programme and to report progress annually. Adaptation Scotland highlights a wide range of legislation, plans and policies relevant to adaptation, including; • Civil Contingencies Act (2004) • Flood Risk Management (Scotland) Act 2009 • Planning (Scotland) Act 2006 Page 106
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(c) Financial implications While some adaptation action may have associated costs, there are funding streams available to progress some, and this report has suggested an approach be taken whereby adaptation is embedded in existing work as far as possible. There are almost certainly financial implications arising from failure to progress adaptation measures. Further work is required to identify these. (d) Risk Implications The risks arising from climate impacts are increasing and already affecting council services, however these have not yet been thoroughly investigated or costed. There is a risk that avoidable financial costs could be incurred by the council in the future if adaptation action is not taken. (e) Staffing Implications Existing climate change staff can only deliver limited progress on adaptation due to existing workloads and priorities. Support will be required from other services in terms of data collation and engagement with action setting, which will be undertaken alongside planned engagement for the climate change strategy update. Research and Information officers will support with some data collection for the risk assessment. There is a request within the Climate Change Plan and Route Map to Net Zero being reported to this same committee to provide cross-service development and management support for decarbonisation projects, spend-to-save opportunities and associated funding bids across buildings and natural capital opportunities for 12 months. Should that recommendation be approved, this will relieve some capacity within the Strategic Planning and Development team to lead the proposed actions within this report. Both proposed adaptation actions will be deliverable regardless of the recommendation in the Climate Change Plan report for additional resources, though the comprehensiveness and timeliness of the risk assessment would be reduced. (f) Property Adapting to climate impacts will require changes to how property is managed and will reduce risk and costs in the future. (g) Equalities/Socio Economic Impact No EIA is required for this report, however it is noted that climate change most affects those already vulnerable in society, including those with underlying health conditions, low income/tenancy status, children and minorities. (h) Climate Change and Biodiversity Impacts This report aims to progress understanding of how climate change may impact on the council, supporting the organisation to become more prepared and to take advantage of opportunities, including making use of nature based solutions where possible. Page 107
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(i) Consultations Consultations have been undertaken with the Depute Chief Executive (Economy, Environment and Finance), the Head of Economic Growth and Development, the Head of Housing and Property, the Head of Environmental and Commercial Services, the Head of Education, the Programme Manager (Learning Estate), the Head of HR, ICT & Organisational Development, the Legal Services Manager, the Strategy and Performance Manager, the Equal Opportunities Officer, the Chief Financial Officer and Democratic Services Manager. Where comments have been received, these have been included within the report. 8. CONCLUSION 8.1 The Council has a statutory duty to deliver climate adaptation. This report outlines an initial review of the council’s progress and contributions to the Scottish adaptation programme, and proposes updates to the existing adaptation action within the Climate Change Action Plan. Author of Report: Sophie Ward, Climate Change Strategy Officer Background Papers: • James Hutton Institute, 2023: https://www.hutton.ac.uk/news/scotland%E2%80%99s-climate- changing-faster-predicted • Economic Development and Infrastructure Committee 2 May 2023 https://moray.cmis.uk.com/moray/CouncilandGovernance/Meetings/tab id/70/ctl/ViewMeetingPublic/mid/397/Meeting/1925/Committee/9/Select edTab/Documents/Default.aspx • Adaptation Scotland https://www.adaptationscotland.org.uk/how- adapt/your-sector/public-sector • Legislation and policies https://www.adaptationscotland.org.uk/application/files/1815/4350/0403 /Legislation_Policies_and_Strategies_-_Adaptation.pdf Ref: Page 108
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1 Appendix 1 Moray Council Climate Readiness - A report covering the background and context for the council’s first adaptation benchmarking exercise, 2023. Why take action on adaptation? “Scotland’s climate has already changed. The 10 warmest years in the UK have all been since 2003. Since the early 20th century, rainfall levels have increased in Scotland by around 11% and on a shorter timescale, since the early 1960s, by around 27%. We expect these changes to continue and intensify. 1 in 11 homes and 1 in 7 businesses in Scotland are already at risk of flooding and, on average, around 2000 more properties will be at risk every year due to climate change.” Scotland’s Adaptation Programme 2019-2024 Climate change is already happening, and the impacts are being felt here in Moray. Extreme weather events such as heatwaves, drought and sudden heavy rainfall are increasing in frequency (see fig. 1). These changes are projected to continue and intensify1. Climate impacts experienced in other world regions will also affect us locally, for example disruption to supply chains or higher costs following drought in food producing countries, or where conflicts arise over resources. Fig. 1 Data sourced from Scottish public bodies Even if we are successful at reducing our carbon emissions on a global scale, projections show that the variable weather we presently experience will remain at similar levels throughout the rest of the century. However, if climate targets are missed and the current global emissions trajectory continues, the extreme weather experienced in Moray by 2100 will make the quality of life we know today no longer recognisable to our children. We must be prepared for both scenarios. Policy and legislation The Climate Change (Scotland) Act 2009 requires public bodies to carry out actions designed to best support delivery of the Scottish adaptation programme. The Climate Change (Duties of Public Bodies: 1 https://online.flippingbook.com/view/703120/ Item 13. Page 109
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2 Reporting Requirements) (Scotland) Order 2015 also requires us to report annually on how we are contributing to Scotland’s Adaptation Programme, Climate Ready Scotland. The current adaptation programme covers 2019 – 2024, with the most relevant outcomes that we as a local authority are required to contribute to including: Outcome 1: Our communities are inclusive, empowered, resilient and safe in response to the changing climate Outcome 3: Our inclusive and sustainable economy is flexible, adaptable and responsive to the changing climate Outcome 5: Our natural environment is valued, enjoyed, protected and enhanced and has increased resilience to climate change The National Planning Framework 4 (NPF4) identifies the Scottish adaptation programme as a cross cutting policy link . NPF4 Policy 1 states that Local Development Plans ‘must address the global climate emergency and nature crisis by ensuring the spatial strategy will reduce emissions and adapt to current and future risks of climate change by promoting nature recovery and restoration in the area’. Further policies throughout NPF4 detail the need to consider and take steps to address a range of climate risks within any development. The Civil Contingencies Act (2004) requires Public Bodies to assess the risk of emergencies occurring and maintain plans to ensure services continue to be delivered in the event of an emergency. Severe weather and climate change are linked to emergencies that may result in wide impacts ranging from loss of human life to serious environmental damage2. Under the Flood Risk Management (Scotland) Act 2009 the council has a statutory duty to implement and maintain flood protection actions and prepare local flood risk management plans. Moray Council is the lead authority for the Findhorn, Nairn and Speyside Local Plan District and works with partners to deliver the plan. The council’s climate change strategy identifies the importance of progressing adaptation actions alongside mitigation (reducing carbon) and for adaptation to be embedded across all departments. Risk and vulnerability The Scottish Government’s Climate Change Adaptation Programme: Climate Ready Scotland identifies 15 key consequences that we should prepare for, some of which are discussed below. Of immediate concern for the council is the potential impact on infrastructure. Investment in flood defence has prevented millions of pounds worth of damage over the last ten years, but climate impacts such as more frequent heavy rainfall after droughts will increase the risk of events like flash flooding and landslides which can cause damage to buildings, roads, bridges and other infrastructure that we are responsible for. Rising sea levels and storms will exacerbate coastal erosion, threatening coastal communities and infrastructure. Because UK buildings were not generally designed for these extremes, there will be a greater risk to vulnerable people during events such as heatwaves or winter storms which cause power cuts. Last year saw people without power for up to two weeks following storm Arwen. The elderly, young 2 https://ready.scot/how-scotland-prepares/preparing-scotland-guidance/keeping-scotland-running/guide-6- building-resilience-changing-climate Page 110
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3 children, and those with underlying medical conditions or reduced mobility will be most affected. Milder, wetter winters may increase the health risks associated with damp and mould, similarly affecting already vulnerable people more, especially those in rented accommodation or on low incomes. Of major concern is the threat to local food security linked to increased pests, disease, damage to soil health and ecosystems, although the growing season may lengthen with warmer average temperatures. Global food supplies will likely be disrupted and costs increase as other regions experience even more intense climate impacts than we do. Even in Moray there may be water shortages. This would impact households as well as agriculture and locally important industries such as distilling which rely on large supplies of water during processing. It is safe to assume that pressure on council services will increase as a result of climate change. While we can’t foresee by exactly how much, it is clear that we need to prepare now so that we are ready no matter which scenario plays out. Many of our buildings are not designed for the level of heat we are starting to see in summers. Often those who are already most vulnerable are affected most, such as young children and the elderly and the record breaking heatwaves in summer 2023 saw 3,271 excess deaths in England and Wales. Drought impacts on a Lancashire reservoir. Scottish Water foresee a greater demand on water supply in future, at the same time as increased risk of drought. In the last decade, over £170 million has been invested to alleviate the impacts of flooding in Moray. These flood alleviation schemes have protected homes and infrastructure from flood events to an estimated value of £86 million and counting. Rapid coastal erosion at Kingston is already affecting households in the village. The Scottish Government recommends a trigger based adaptive pathways approach to coastal change planning, and recognises the importance of working with natural systems. Page 111
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4 How climate ready is Moray Council? Carbon reduction has been the main focus of our Climate Change Strategy, and until 2023 there was no specific action for addressing adaptation. It was recognised that the council will already be doing lots of work which contributes to our climate readiness, for example through flood prevention and the local development plan, so the first adaptation action was added to the Route Map update last year to ‘identify current adaptation work happening across the council, including gaps and opportunities’. That work has resulted in this report. Adaptation Capability Framework Adaptation Scotland is a Scottish Government funded programme to advise and support Scotland to prepare for and build resilience to climate impacts. They have produced a Capability Framework as a step by step guide to support public bodies to be climate ready. The framework allows us to identify where we are on our adaptation journey (see fig. 3 on next page) As figure 3 outlines, public bodies should develop these four capabilities: Organisational Culture and Resources – Aligning adaptation activities with the organisation’s priorities and then mainstreaming these into plans, policies and procedures so it becomes part of business as usual for your organisation. Understanding the Challenge - Gathering evidence on climate risks and vulnerabilities and integrating these into internal systems and procedures. This enables informed decisions based or actual or expected change. Planning and Implementation - Setting appraised options into an adaptation strategy and action plan, adopting an approach that maintains flexibility and seeks pathways for an adaptation transition. Working Together - Forging connections with key partners to share ideas and find opportunities to collaborate. Engaging a diverse range of stakeholders to help shape adaptation plans brings shared benefits. Organisations move through different maturity levels, though the maturity for each capability may be different: Starting - Adaptation is completely new to the organisation, so this stage focuses on research and early engagement. Intermediate – More evidence is built around understanding, the organisation is starting to put governance and early actions in place and to work with partners. Advanced – Robust processes and risk assessments are in place, actions are being delivered and formal partnerships made. Mature – Focusing on embedding, mainstreaming, sharing and widening engagement. Page 112
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5 Figure 3: Scotland Adapts: A Capability Framework for a Climate Ready Public Sector Page 113
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6 Results of the Benchmarking exercise The process of reviewing Moray Council’s adaptation capability was initiated in 2023 using tools from the framework. Climate change officers gathered information from across council services, through a workshop, one-to-one meetings and via a short survey. This provided an overview of some of the adaptation activity, and challenges, within the council and this was fed into the Climate Change Public Bodies Report (see Economic Development & Infrastructure Services committee agenda item 10). Volunteers from several services further met to discuss the findings and agree initial scores for the Adaptation Scotland public bodies benchmarking tool. The results of this initial review are summarised in the following sections and within the Adaptation Benchmarking document that will be submitted to Adaptation Scotland (please see Appendix 2). Only starting and intermediate levels were assessed; given the early progress level that was scored for these first two levels it was not deemed appropriate to review the more mature levels during this initial exercise Organisational Culture and Resources Moray Council has begun to consider where adaptation fits in the organisation, at officer level in some key services. The importance of addressing climate impacts has been communicated within the Climate Change Strategy and Route Map, linking with the organisation’s strategic objectives, but adaptation has not yet been identified/prioritised within corporate plans and policies. A governance structure is in place within the Climate Change Strategy and Board, and an informal working group has been established but there are no resources yet identified to progress actions beyond this initial review. Adaptation is only being resourced within existing capacity and generally to deliver policy e.g. flood risk, local development plan. The benefits of embedding adaptation within existing work range from long term financial savings to improved social outcomes, but this practice has not yet been embedded. Maturity: Starting and Intermediate levels both in progress Progress identified: ✓ Adaptation within Climate Change Strategy ✓ Climate Change Plan and Route Map to Net Zero: adapting to climate impacts align with the council’s corporate priorities. Financial savings in the long term and improving social outcomes ✓ Climate Change Strategy action to ‘identify current adaptation work happening across the council, including gaps and opportunities’ ✓ Climate change officers co-ordinating information gathering and reporting, adaptation activity progressing within existing resources across several services. Risk areas: • Climate impacts and adaptation opportunities are not yet understood across all services. • Climate impacts and adaptation opportunities are not yet considered within corporate plans and policies • No resources specifically identified to help embed adaption within existing work • No existing revenue resources identified to develop new adaptation actions Page 114
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7 Suggested tasks to develop the Planning and Implementation capability and be more climate ready: ➢ Climate risks and opportunities recognised and embedded within service plans ➢ Identify where adaptation should be included within standard procedures etc. ➢ Embed adaptation considerations within project/plan/policy. ➢ Leadership and adaptation working group to advocate adaptation and mainstream identifying opportunities for action. (Raise profile of co-benefits): ➢ Collaboration across services to maximise funding opportunities, pooling of resources and achieving multiple benefits Understanding the Challenge Moray Council is learning about climate change and its potential impacts in Scotland. Key information that is most relevant to the council has been collated and this is being used to raise awareness and develop a common understanding of potential consequences. Potential climate impacts that are specific to our context and linked to strategic and operational priorities have not been evidenced and are not understood across all services. The council is already aware of, and responding to, some of the most obvious impacts such as flood risk and coastal erosion. However at the organisational level no climate risk assessment has been undertaken and so vulnerabilities remain largely unknown. Initial engagement with key services has begun to identify key functions that could be affected by climate change, but further work is required to engage these services and to raise awareness of the wider range of impacts on the council and communities we support. Maturity: Starting mostly complete, Intermediate in progress Progress identified: ✓ Coastal Change Adaptation Plans in development ✓ Flood Risk Management Plans in place ✓ Initial engagement with key services for benchmarking report ✓ Climate change training and e-module - Approx 2.5% of staff and councillors have directly engaged with climate learning opportunities that cover adaptation. Risk areas: • Not enough capacity to deliver climate training across all services • Limited engagement with climate change learning opportunities across all services • Little evidence of understanding the full range of climate impacts relevant to all council services • Climate risks and opportunities have not yet been evidenced and costed Suggested tasks to progress Understanding the Challenge capability and be more climate ready: • Conduct a local climate impacts profile (LCLIP) or other comprehensive risk assessment reporting on how climate impacts are already affecting the council – compiling historical costs as well as reviewing resources to identify which key functions will be most impacted in future. • Extreme weather log to record disruptive events as they happen to track damage, costs, resource requirements Page 115
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8 • Focus workshops and training with senior management and key services – learning to be cascaded (link to action on service plans) • Embedding adaptation within existing service training should be explored in future. Planning and Implementation Moray Council has begun to identify where adaptation action is being delivered through targeted engagement, though further work is required to ensure this is thoroughly captured. Recognition of the contribution we make to Climate Ready Scotland was evident in the most recent Climate Change Route Map and Public Bodies Climate Change Report. The council’s ‘climate ready’ vision has not yet been developed into defined adaptation outcomes that align with the council’s purpose. This, along with identified actions, have yet to be included within the Climate Change Strategy and supporting documents. Maturity: Starting mostly complete, Intermediate no processes in place yet Progress identified: ✓ £226,000 coastal change funding secured for three case studies within Moray for 2024/25 ✓ Community resilience plans, out of hours comms and hybrid working; Engagement for the LDP, delivery of NPF4 policies; Flood Risk Management Strategies in place; Energy efficiency (HEEPS /EESSH), Meeting Scottish Housing Quality Standard ✓ Delivering Forest and Woodland Strategy – next version at consultation stage ✓ Delivery of outdoor learning through the curriculum; Wildflower and living lawn action for pollinators; Rain garden installation; Restoration and enhancement of key nature sites; Removal of invasive non-native species; Delivery of NPF4 and woodland strategy Risk areas: • Some adaptation actions are not recognised as relevant to climate change, which may result in missed opportunities • No desired adaptation vision and outcomes that align with the council’s purpose • No action plan in place to prepare for the impacts of climate change Suggested tasks to progress the Planning and Implementation capability and be more climate ready: • Adaptation actions to be added to the CCS plan. • An adaptation plan embedded within the next CCS. • All council activity that is contributing to SNAP to be recognised within the CCS action plan and statutory reporting. Working Together Moray Council is beginning to forge connections with others working on adaptation. We are becoming active in relevant networks to share learnings and expertise. We are also identifying opportunities to consider adaptation in other groups, partnerships and forums. Some specific areas have well developed connections with partners on adaptation, for example regarding flood and coastal risk management. In these specific (but impactful) areas, opportunities are being taken to deliver initial actions. The importance of collective action and co-delivery of initial actions have yet to be developed and clearly linked to climate adaptation. Maturity level: Starting complete, Intermediate in progress Page 116
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9 Progress identified: ✓ Public Sector Climate Adaptation Network members ✓ Informal networking with other local authorities ✓ Internal consideration of relevant Moray groups, partnerships and forums to engage with ✓ Limited engagement with some local groups Risk areas: • No capacity to lead Moray-wide collaboration on adaptation • No Moray-wide climate strategy or action plan in place Suggested tasks to progress the Working Together capability and be more climate ready: • Work with Moray CAN to embed adaptation into a Moray area climate change strategy. • Ensure adaptation measures are embedded within planned Just Transition bid. • Support Moray CAN and other partners to communicate and engage with the community. • Support adaptation work delivered by Moray CAN and other partners Adaptation as an opportunity A number of outcomes from Scotland’s second national adaptation plan align strongly with Moray Council’s corporate priorities. Most notably, both recognise the importance of focusing on the most vulnerable people in our society. Those who are already vulnerable are also at most risk from climate impacts, and taking action in this area will improve health and wellbeing as well as reduce health and social care costs. Linking across all three Corporate Priorities, young people stand to risk the most from climate impacts and should be supported to develop the skills they will need to adapt and respond to the changing climate. Nature based solutions are recognised as cost-effective, long lasting and multi- benefit and are expected to be a significant growth area3. Investment in nature based solutions can help our economy, communities and natural environment be resilient and safe in response to climate change and give young people the skills, opportunity and motivation to stay in Moray. The council’s most significant contribution to the national adaptation programme is through the innovative pathway approach now being used to develop new flood and coastal erosion plans. This will enable the council to plan for, and react to, different scenarios as they are triggered. Collaborative working across services will ensure adaptation planning around how services can be delivered while taking account of possible climate change impacts like these. Opportunities to combine adaptation with other objectives to achieve shared outcomes should be maximised, especially given the limited existing capacity and budgetary constraints. Such opportunities include carbon offsetting, delivering the council’s biodiversity duty and nature networks, town centre regeneration, learning estate and active travel improvements. Addressing climate adaptation is actively encouraged within many funding streams such as the Just Transition Fund which has so far brought in £880,000 to the council, the Nature Restoration Fund’s £471,000 direct grants over the past three years and £226,000 for coastal change adaptation case studies in 2024-5. Further competitive grants are available through all of these funds. Other funds that that can, and should, contribute to Moray’s climate readiness, include the £18m Levelling Up 3 https://www.nature.scot/professional-advice/social-and-economic-benefits-nature/nature-based-jobs-and- skills#:~:text=Significant%20further%20growth%20in%20nature,is%20expected%20to%20be%20significant Page 117
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10 Fund, £670,000 UK Shared Prosperity Fund, £200,000 Economic Recovery Fund, £35,000 Town Centre Capital Fund, £466,000 Scottish Government Place Based Improvement Fund. Last year’s active travel funding totalled approximately £1,366,000 and can often present opportunities for adaptation measures. Nature based solutions and adaptation measures are already a key feature of several existing plans and collaboration across council services continues. Further opportunities to generate income through private investment and development should be explored, as this is a fast growing area with significant potential. The new Moray Climate Action Network (Moray CAN) will support climate adaptation to be progressed at the community level, so close working between the council, tsiMORAY and other partners is already underway. Funding opportunities available to communities already include the SSEN Resilient Communities Fund, Just Transition Fund and Moray Local Action Fund. An improved understanding of what Moray needs to be climate ready will support wider partnership working and embedding of adaptation action within existing groups and forums etc. Conclusion Without deep, rapid and sustained global greenhouse gas emissions reduction we will see the likelihood of abrupt and irreversible impacts increase4. Adaptation is therefore a long-term challenge that requires strategic planning and implementation to achieve the necessary outcomes. This early stage has focused on pulling existing adaptation activity together and explaining what adaptation is to key services. The Council’s Climate Change Strategy and the Scottish National Adaptation Programme ask us to go beyond this, to take steps to help to address the gaps and take further action, including working to embed adaptation across all services and operations. In addition to the most obvious impacts such as storm damage, there will be hidden costs to identify (especially from slow onset impacts); health and safety considerations for staff, pupils and the wider public; emerging global pressures with local consequences. There may also be opportunities to take advantage of. Further resources may need to be identified in future to progress this, but there are also indications that the next Scottish adaptation programme (expected in 2024) will more clearly identify the expectations required from public bodies. It is hoped that this information will be available to feed into the next Moray Council Climate Change Strategy update to support decision making. As a practical next step, it is proposed that two new actions be added to the Climate Change Action Plan, replacing the existing action to ‘identify current adaptation work happening across the council, including gaps and opportunities’. These actions, in combination, will further support informed decisions to be made when the Climate Change Strategy update is reported to the council in 2025: 4 https://www.ipcc.ch/report/ar6/syr/resources/spm-headline-statements Page 118
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11 Proposed actions: 1. Climate change officers to work with all services to develop a list of adaptation actions based on the council’s current adaptation capability, SNAP 3 objectives, and taking a measured approach regarding resources. To be consulted on and brought to members with the Climate Change Strategy update in 2025. 2. A climate risk assessment to be undertaken, reporting on current, historical and projected costs of climate impacts on the council. To be carried out in late 2024 to inform the Climate Change Strategy update in 2025. Page 119
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ORGANISATIONAL CULTURE & RESOURCES << Return Home 2020 2021 2022 2023 0.6667 Maturity Stage: 1. STARTING 2020 2021 2022 2023 1 Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task OC1A dd.mm.yy Starter pack completed, initial engagement with key officers Adaptation considered at officer level in some key service areas, not all. Less evidence at corporate level. Climate Change Strategy update an opportunity. Very limited resources to deliver the engagement required. OC1B dd.mm.yy Starter pack completed No staff resource dedicated solely to adaptation. Resources mainly for existing work to deliver policy e.g. flood risk, local development plan Need to embed adaptation across existing work and processes, align with other priorities to deliver actions. As above, ability to deliver this slowed by lack of resources. MATURITY STAGE: 2. INTERMEDIATE 2020 2021 2022 2023 1 Notes on Starting Maturity Stage The council’s climate change strategy aims to identify adaptation activity and develop new policy and actions to address gaps, as well as embedding adaptation across all services and operations. The co-benefits of adapting to climate impacts align with the council’s corporate priorities as highlighted in the 2023 route map update, not only making financial savings in the long term but improving social outcomes too. A number of the council’s climate change actions support adaptation progress, but the 2023 update included a specific action to ‘identify current adaptation work happening across the council, including gaps and opportunities’. This has initiated the council’s adaptation journey, contributing to Scotland’s adaptation programme and improving the resilience of the organisation and wider community. Climate change officers have been co-ordinating information gathering and reporting, and ongoing activity within some services is progressing within existing, limited, resources. Notes on Intermediate Maturity Stage Governance arrangements in place for climate change, but very limited evidence of progress on adaptation. Your organisation is now prepared to work on adaptation. Leadership has put in place governance arrangements and committed suitable resources to progress with your initial adaptation plans. There is an emerging set of people in your organisation who can see opportunities to deliver adaptation – and may become adaptation ‘champions’. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Score Identify resources available for adaptation Yes Yes Description of how capability is displayed by organisation at this stage: Progress Level: Task Description Is this task relevant for you? Are processes in place to undertake task? Consider how adaptation fits with your organisation and its objectives Yes Yes Score Scotland Adapts: A Capability Framework for a Climate Ready Public Sector CAPABILITY AREA: Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is able to communicate why adaptation matters by linking it to your strategic objectives. You have considered where adaptation fits in your organisation and identified key opportunities to begin your adaptation work – as well as what resources are available to support it. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Annually Score APPENDIX 2 Item 13. Page 121
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? Consider how adaptation fits with your organisation Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task OC2A dd.mm.yy None at coporate level Aligning with other work (local plan, flood/coastal risk) works well, but need to raise profile of co-benefits and ensure adaptation is always considered in any project/plan/policy. Aligning with other OC2B dd.mm.yy Informal adaptation working group including managers and officers across different services, elected member workshop Awareness raising successful, but limited to key individuals so far. Senior management support would enable embedding across services so more opportunities are identified OC2C dd.mm.yy Currently falls within Climate Change Strategy and it's internal Board Appropriate given size of LA and resources available, however more top down support would enable further / quicker progress MATURITY STAGE: 3. ADVANCED 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task OC3A dd.mm.yy Initial list of opportunities identified in starter pack but no further planning undertaken OC3B dd.mm.yy OC3C dd.mm.yy Maturity Stage: 4. MATURE 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task Identify opportunities to include adaptation in plans, policies and procedures Yes Notes on Advanced Maturity Stage No Task Description Is this task relevant for you? Are processes in place to undertake task? Annually Score Establish governance arrangements for adaptation Yes Motivate ‘champions’ and actively promote adaptation across the organisation Yes No Put governance arrangements for adaptation into operation Yes No Notes on Mature Maturity Stage Task Description Is this task relevant for you? Are processes in place to undertake task? Description of how capability is displayed by organisation at this stage: Progress Level: Annually Score Your organisation delivers a broad range of action on adaptation, which is now being mainstreamed into many plans, policies and procedures. Your governance arrangements are kept up-to-date and are able to reflect changing demands as more people become involved. There is a supported network of ‘champions’ who continue to lead the way on adaptation. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Partly Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation now has governance arrangements in place to deliver adaptation. You are systematically identifying opportunities to include adaptation in plans, policies and procedures. These opportunities are being taken up by emerging adaptation ‘champions’ across your organisation. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Secure resources to plan and deliver adaptation Yes No Engage with colleagues to identify adaptation opportunities and potential ‘champions’ Yes Partly Task Description Is this task relevant for you? Are processes in place to undertake task? Page 2 of 10Page 122
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? Consider how adaptation fits with your organisation OC4A dd.mm.yy OC4B dd.mm.yy OC4C dd.mm.yy Review and update governance arrangements for adaptation Yes No Mainstream adaptation into your organisation’s plans, policies and procedures Yes No Develop a network of recognised adaptation ‘champions’ Yes No Page 3 of 10Page 123
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UNDERSTANDING THE CHALLENGE << Return Home 2020 2021 2022 2023 1 Maturity Stage: 1. STARTING 2020 2021 2022 2023 2 Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task UC1A dd.mm.yy •Adaptation within Climate Change Strategy and Plan •Flood risk and coastal change planning •Adaptation slideshow and local extreme weather chart Approx 2.5% of staff and councillors have directly engaged with climate adpatation learning opportunities. Good but need to reach wider. Still confusion between adaptation and mitigation so specific Very limited resources to deliver the engagement required. UC1B dd.mm.yy As above plus LDP engagement as above Very limited resources to deliver the engagement required. MATURITY STAGE: 2. INTERMEDIATE 2020 2021 2022 2023 1 Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task UC2A dd.mm.yy Flood risk and coastal change planning, Local development plan (NPF4). Carbon Literacy training Some teams extremely knowledgeable - (e.g. flood/coastal risk). Less evidence of this across the orgnisation or for wider impacts. Very limited resources to deliver the engagement required. UC2B dd.mm.yy This benchmarking exercise and completing starter pack Very basic information captured when completing starter pack and not from all service areas. Ability to deliver this slowed by lack of resources. Notes on Intermediate Stage Evidence should be gathered of how climate impacts are already affecting the council. A report could identify historical costs as well as which key functions will be most impacted in future. This will help identify strategic and operational priorities for adaptation work. No resources idenitfied to progress this yet. Scotland Adapts: A Capability Framework for a Climate Ready Public CAPABILITY AREA: Annually Score Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is learning about climate change and its potential impacts in Scotland. You will have pulled together key information that is most relevant to your organisation – and this is being used to raise awareness and develop a common understanding of potential consequences. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Notes on Starting Maturity Stage The council is already aware of, and responding to, some of the most obvious impacts such as flood risk and coastal erosion. Initial engagement with key services has begun, but further work is required to raise awareness of the wider range of impacts on the council and communities we support. There will be hidden costs to identify (especially from slow onset impacts); health and safety considerations for staff, pupils and the wider public; emerging global pressures with local consequences. There may also be opportunities to take advantage of. •Adaptation within Climate Change Strategy and Plan •Flood risk and coastal change planning •Initial engagement with key services and councillors including adaptation slideshow highlighting local weather trends/impacts •E-module and Carbon Literacy training •LDP engagement Task Description Is this task relevant for you? Are processes in place to undertake task? Annually Score Learn about Scotland's changing climate Yes Yes Learn about climate impacts affecting Scotland Yes Yes Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is building an understanding – and evidence – of potential climate impacts that are specific to your context and linked to strategic and operational priorities. By engaging internal stakeholders you are able to identify key functions that could be affected by climate change. Exploring recent weather events provides insight into climate-related vulnerabilities. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Score Task Description Is this task relevant for you? Are processes in place to undertake task? Develop understanding of climate risk and vulnerability Yes Partly Consider how your organisation’s functions might be affected by climate change Yes Partly Page 4 of 10Page 124
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? UC2C dd.mm.yy MATURITY STAGE: 3. ADVANCED 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task UC3A dd.mm.yy UC3B dd.mm.yy UC3C dd.mm.yy UC3D dd.mm.yy Maturity Stage: 4. MATURE 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task UC4A dd.mm.yy UC4B dd.mm.yy UC4C dd.mm.yy Sharing learnings from coastal change adaptation plans with others Notes on Advanced Stage Notes on Mature Stage Explore the impact of recent weather events on your organisation Yes No Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is building an evidence base for long-term climate impacts under a range of possible futures. This is used to inform climate change risk assessment - whether for strategic organisational risks, priority service areas or specific projects. You are now able to identify knowledge gaps and are working with others to address them. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Score Task Description Is this task relevant for you? Are processes in place to undertake task? Explore future changes by developing scenarios and/or storylines for climate impacts Yes No Undertake strategic climate change risk assessment Yes No Identify knowledge gaps, seek expertise and foster links with research and innovation Yes No Undertake project-level risk assessment Yes No Score Task Description Is this task relevant for you? Are processes in place to undertake task? Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is embedding knowledge on climate and adaptation into internal systems, enabling routine use by people in their day-to- day roles. This includes assessing climate risk within a wider risk management framework. You continue to learn and adjust to the climate adaptation challenge connecting with a wide range of partners to co-produce adaptation solutions. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Actively engage in sharing, learning, research and innovation Yes Partly Mainstreaming of climate change risk assessment Yes No Accessible climate adaptation knowledge is integrated into internal systems and procedures Yes No Page 5 of 10Page 125
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? Page 6 of 10Page 126
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PLANNING & IMPLEMENTATION << Return Home 2020 2021 2022 2023 0.6667 Maturity Stage: 1. STARTING 2020 2021 2022 2023 2 Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task PI1A dd.mm.yy Starter pack completed , benchmarking engagement and Public Bodies Climate Change Duties Report Some activity may have been missed as some departments were not engaged Ability to deliver further slowed by lack of resources. PI1B dd.mm.yy As included in Public Bodies Climate Change Duties Report submitted 2023 Only for the report as noted. Same issue as above. Ability to deliver further slowed by lack of resources. PI1C dd.mm.yy Identified when completing starter pack and infrmation gathering for benchmarking Senior management support could help achieve buy-in from key staff not yet engaged Ability to deliver further slowed by lack of resources. MATURITY STAGE: 2. INTERMEDIATE 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task PI2A dd.mm.yy Notes on Intermediate Stage Adaptation only featured within wider Climate Change Strategy with no clearly identified vision or outcomes. Only one action which is to '‘identify current adaptation work happening across the council, including gaps and opportunities’ introduced in 2023 - so far resources have been limited to completing the starter pack, public bodies climate change duties adaptation section, and this benchmarking exercise . Being a small LA and limited resources, this next stage will likely be embedded within the Climate Change Strategy framework so that the adaptation vision, outcomes and action will be delivered within existing governance arrangements. Likely to progress in 2025 with the strategy update. Scotland Adapts: A Capability Framework for a Climate Ready Public CAPABILITY AREA: Annually Score Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is able to look at the big picture and see where it can make a contribution to a Climate Ready Scotland. You have recognised ways that you are already delivering adaptation actions – and have a plan for engaging key people from across your organisation. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Notes on Starting Stage The Scottish Climate Change Adaptation Programme identifies several policy areas that local authorities are responsible for delivering, focusing on local planning, flood risk and coastal erosion as well as greenspace and outdoor learning. While at varying stages, the council is taking action in each of these areas. What is our contribution to Climate Ready Scotland (SCCAP2)? Outcome 1: Our communities are inclusive, empowered, resilient and safe in response to the changing climate •Development of community resilience plans, and out of hours comms service and hybrid working •Engagement for the local development plan, supporting communities to develop place plans and delivery of NPF4 policies •Flood Risk Management Strategies in place •Delivering HEEPS, strategy and plans for delivering EESSH •Meeting Scottish Housing Quality Standard (SHQS) Outcome 3: Our inclusive and sustainable economy is flexible, adaptable and responsive to the changing climate •Delivering Forest and Woodland Strategy – next version at consultation stage Outcome 5: Our natural environment is valued, enjoyed, protected and enhanced and has increased resilience to climate change •Delivery of outdoor learning through the curriculum •Wildflower and living lawn action for pollinators •Restoration and enhancement of key nature sites •Removal of invasive non native species •Installation of two rain gardens, plans for more •Delivery of NPF4 and woodland strategy Task Description Is this task relevant for you? Are processes in place to undertake task? Score Annually Identify actions already delivering adaptation Yes Partly Identify key internal stakeholders for adaptation Yes Yes Consider how you contribute to Scotland's adaptation outcomes Yes Partly Task Description Is this task relevant for you? Are processes in place to undertake task? Define a vision and outcomes for adaptation Yes No Annually Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation has developed a clear vision of ‘climate ready’ and has defined adaptation outcomes that align with your organisation’s purpose. You are considering an emerging set of potential adaptation actions and can pull these together into an action plan - while implementing early action practical actions. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Score Page 7 of 10Page 127
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? PI2B dd.mm.yy PI2C dd.mm.yy PI2D dd.mm.yy MATURITY STAGE: 3. ADVANCED 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task PI3A dd.mm.yy PI3B dd.mm.yy PI3C dd.mm.yy PI3D dd.mm.yy Maturity Stage: 4. MATURE 2020 2021 2022 2023 0 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task PI4A dd.mm.yy Notes on Advanced Stage Notes on Mature Stage Your organisation should be able to take early practical action on adaptation by building upon existing projects or implementing no-regret / quick-wins. These help raise the profile of adaptation - building internal support and helping to spur more action Yes No PI2C Develop an initial adaptation (strategy and) action plan Yes No Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation has developed and is now implementing an adaptation strategy and action plan. This coordinates and integrates adaptation into relevant projects, policies and plans across your organisation and with partners. There is an appraisal of adaptation options that places them within a strategic context, aligned with your organisation’s adaptation goals/outcomes. This enables effective prioritisation and sequencing of adaptation measures. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Score Task Description Is this task relevant for you? Are processes in place to undertake task? Develop a strategic change process for achieving adaptation outcomes Yes No PI3B Appraisal of adaptation options Yes No Develop a comprehensive adaptation strategy and action plan Yes No Score Implement a programme of adaptation actions Yes No Description of how capability is displayed by organisation at this stage: Progress Level: Identify a range of potential adaptation (measures, options, actions) Yes No Adopt an ongoing adaptive management cycle for adaptation planning Yes No Your organisation is now taking a strategic approach to adaptation, which is becoming business-as-usual as it is mainstreamed into plans, policies and procedures. You are able to be flexible and allow for uncertainty, adopting an iterative adaptive management cycle and planning into the long-term, for example using adaptation pathways to manage climate risks. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Task Description Is this task relevant for you? Are processes in place to undertake task? Annually Page 8 of 10Page 128
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Task Code Start Date (Optional) Resource Required (Optional) Tasks Required (Optional) No. Days Required (Optional) Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual taskTask Description Is this task relevant for you? Are processes in place to undertake task? PI4B dd.mm.yy PI4C dd.mm.yy No Implement pathways for adaptation / transformational change Yes No Taking action on adaptation is mainstreamed into your organisation’s (functions / services) Yes Page 9 of 10Page 129
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UNDERSTANDING THE CHALLENGE << Return Home 2020 2021 2022 2023 1.3333 Maturity Stage: 1. STARTING 2020 2021 2022 2023 3 Task Code Start Date Resource Required Tasks Required No. Days Required Evidence to justify progress Learning (what worked well and what could be better) Other thoughts / comments for each individual task WT1A dd.mm.yy Member of Public Sector Climate Adaptation Network, Sniffer flood resilience network, national/regional communications groups, non-adaptation specific networks where the topic will be discussed. Adaptation as a topic not evident in all national networks (housing/property an example) Needs greater engagement at the national level WT1B dd.mm.yy List identified - see notes Positive engagement where there is resource to do this Ability to deliver this slowed by lack of resources. MATURITY STAGE: 2. INTERMEDIATE 2020 2021 2022 2023 Notes on Starting Stage Council officers attend regular adaptation networking meetings and engage with colleagues in neighbouring local authorities to share learnings. Key sections engage with national discussion re flood risk, resilience comms etc. While there has been some consideration of how to bring adaptation into Moray groups, partnerships and forums, little engagement with them has occurred yet. Some engagement, but either not clearly identified climate adaptation (JCC) or at very early stages (MorayClimate Action Network) Groups may include: •Grampian Local Resilience Partnership - Emergency Planning Unit •Joint Community Councils •Moray Climate Action Network •Health and Social Care Partnership •Moray Firth Coastal Partnership •Scottish Council for Development and Industry •Business Resilience Forum •NESBiP (biodiversity partnership) Notes on Intermediate Stage The council has good relationships and existing partnerships that will support area wide adaptation, however progress is very limited due to available resources, particularly for engagement. Scotland Adapts: A Capability Framework for a Climate Ready Public CAPABILITY AREA: Task Description Is this task relevant for you? Are processes in place to undertake Annually Score Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is beginning to forge connections with others working on adaptation. You are becoming active in relevant networks to share learning and expertise. You are also identifying opportunities to consider adaptation in other groups, partnerships and forums. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Score Join relevant professional and adaptation networks Yes Yes Identify relevant external organisations and partnerships Yes Yes Description of how capability is displayed by organisation at this stage: Progress Level: Your organisation is deepening its connection with partners on adaptation. You are taking opportunities to include adaptation in a range of your organisation’s external activities, including co-delivery of initial actions. Together you are emphasising the importance of collective action. How accurately does the description of an organisation at that maturity stage reflect your current organisational situation? Please provide an assessment on a scale of 0-3 where 0 indicates your organisation does not display or illustrate any of the traits or characteristics described in the summary box at all and 3 meaning that your organisation currently matches the description provided accurately. Annually Page 9 of 9Page 130
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: CLIMATE CHANGE PLAN AND ROUTE MAP TO NET ZERO BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To ask the Council to approve the update to the Climate Change Plan and Routemap to Net Zero, to note the Council’s progress to date and actions required to meet targets and statutory duties, to agree budget to support development and management of decarbonisation projects, spend-to-save opportunities and funding bids, and to agree reporting requirements surrounding ongoing work. 1.2 This report is submitted to the Council in terms of Section III (F) (33) of the Council's Scheme of Administration relating to providing, developing and monitoring the Council’s Economic Development and Infrastructure Services. 2. RECOMMENDATION 2.1 It is recommended that Council: (i) approves the update to the Climate Change Plan and Routemap to Net Zero (Appendix 1); (ii) notes that if the Council’s targets and statutory duties are to be met, action is required to accelerate the pace of building decarbonisation, and development of a delivery model for natural capital enhancements, the groundwork for which has now been completed or is currently underway; (iii) notes that significant funding opportunities are currently and in future are likely to become available to the Council to make progress in these areas; (iv) agrees that existing decarbonisation and natural capital project groundwork be built upon by working up projects in detail with a view to submitting funding bids and spend-to-save opportunities; (v) agrees to delegate authority to the Acting Head of Service for Economic Growth and Development to proceed with project Item 14. Page 131
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development, management and associated funding bids where no additional council resource is required; (vi) agrees that further reports should be submitted to Council where funding bids and spend-to-save opportunities are developed which require additional council resource to progress; (vii) agrees that a Climate Change Working Group be formed as set out in paragraph 4.10, with a Terms of Reference document to be reported to the next available meeting of the Council. (viii) notes that a decision point report will be produced in 2025 for members to reassess the Council’s decarbonisation targets, considering changes in the policy and funding landscape, which will form the basis for a review of the Climate Change Strategy 2020-30; (ix) agrees that a 12 month fixed-term project officer be appointed, funded by savings within the Economic Growth and Development staffing budget, to support cross-service project development and management of decarbonisation projects and associated funding bids, as set out in paragraph 5.3; (x) considers whether to commit £20,000 from reserves towards supporting cross-service project development and management costs of decarbonisation projects and associated funding bid support that is otherwise unavailable as set out in paragraphs 5.3 and 5.4 and the financial implications section, with a report as set out in paragraph 5.4 to be provided to Council within 3 months of the proposed post commencing; and (xi) agrees that the £30,000 committed within the 2024-25 budget for Just Transition be used for consultancy to support the development of a funding bid from August 2024. 3. BACKGROUND 3.1 Climate change is a significant and escalating threat to Moray’s natural environment, people and economic wellbeing. The impacts of climate change are already being felt. These will continue to worsen, posing major challenges for both current and future generations, ecosystems, infrastructure and key sectors including food and drink, agriculture and tourism. 3.2 The Climate Change (Scotland) Act 2009 requires the Council to respond to these challenges by reducing greenhouse gas emissions, adapting to the changing climate, and to act in a way considered most sustainable. The Council must report on compliance with these duties annually. 3.3 Contributing to the achievement of sustainable development through continuous improvement in performance is a key component of the Council’s Best Value duties set out by the Local Government in Scotland Act 2003. Achieving sustainable development means meeting the needs of the present Page 132
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without compromising the ability of future generations to meet their own needs. 3.4 On 27 June 2019, the Council made a declaration of climate emergency, which stated that the Council must take necessary actions to protect our area, country and planet (para 6 of the Minute refers). 3.5 In response to the commitments made in the declaration, on 10 March 2021 (para 13 of the Minute refers) the Council adopted a Climate Change Strategy for 2020-30. The strategy set a net zero target of 2030, and required that its officers and elected members work with other across Moray to deliver that goal. It was agreed that an annual Climate Change Plan and Routemap to Net Zero would be produced and updated with the latest data on current emissions, progress and future projections. 3.6 On 28 February 2024, the Council agreed a new Corporate Plan 2024-29, with climate change integrated prominently throughout its priorities (para 15 of the Minute refers). 3.7 On 18 April 2024, the Scottish Government replaced annual carbon reduction targets with multi-year carbon budgets. This action retains the statutory target of net zero carbon emissions by 2045 within the public sector but removes the target of a 75% reduction by 2030. The Scottish Government also announced a new package of climate action measures on transport, uptake of EV chargers and land use. Some of the new actions aim to increase funding for peatland restoration, tree planting and renewable energy generation. 3.8 In May 2024, the Cabinet Secretary for Net Zero and Energy wrote to the Council Leader and Chief Executive regarding the latest public bodies’ climate change duties reporting. The Cabinet Secretary commended officers for continued on-time compliance with the duty and gave an overview of analysis undertaken on the reporting. The analysis reveals areas where attention needs to be focused over the coming years, including scaling up project delivery to decarbonise heating and strengthening reporting on climate risk assessment and adaptation action. The Cabinet Secretary has requested that all public bodies undertake an internal review of their reporting processes and quality assurance procedures to ensure compliance with their duties under the Climate Change (Scotland) Act 2009. 4. CLIMATE CHANGE PLAN AND ROUTEMAP TO NET ZERO 4.1 The updated Climate Change Plan and Routemap to Net Zero is set out in Appendix 1. It details how the Council is progressing its statutory duties under three key themes: • Reducing carbon emissions; • Restoring nature; and • Being ready for climate impacts. 4.2 It also sets out how embedding climate action within services supports the delivery of the Council’s new corporate priorities and vision, presenting a Page 133
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strategic and cost-effective way to overcome the challenges identified within the Corporate Plan 2024-29. 4.3 The document has been produced in collaboration with key services across the Council, all of which have a responsibility to lead climate action in their respective workstreams. 4.4 Whilst this year’s report highlights areas of progress and best practices, carbon emissions have increased due to a continuation of business-as-usual practices within the Council. Beyond business-as-usual emissions increases, progress on carbon emissions reduction has been restricted for several reasons: • Services within the Council increasingly lack the resources or expertise needed to develop and manage effective carbon and cost reduction projects, and/or secure external funding; • A lack of shared ownership, leadership and collaboration across services together with competing priorities has created a situation where climate change is often regarded as a separate issue, rather than an opportunity which can be integrated into existing work – creating efficiencies; • Mixed understanding of climate change at all levels within the Council can hinder buy-in, proactive action and sustainable development; and • Some decisions taken by the Council have contributed to a delay in carbon emissions reduction. For example, the Council’s new fleet replacement strategy which delayed uptake of low emission vehicles due to immature technology and funding constraints. 4.5 In addition, obligations around nature conservation and opportunities and funding to support natural capital projects have grown since the publication of the Climate Change Strategy 2020-30. Future success in this area will require securing new funding sources and integrating biodiversity efforts with other initiatives where appropriate to create efficiencies and opportunities for spend- to-save initiatives. 4.6 There also remains a critical gap in the Council’s readiness for the impacts of climate change. A recent assessment revealed a low level of maturity of response to climate adaptation and understanding of the Council’s vulnerability to climate impacts and the potential financial implications. Further work is required in this area to ensure that the Council meets its statutory obligations and is otherwise satisfied that it is prepared for the impacts of climate change. It is important to note that some authorities have already completed this work while others are yet to start. Aberdeenshire Council has undertaken three rounds of this work and Highland Council is undertaking its first round. Both authorities are willing to share experience in this area with officers in Moray. It is hoped that this work can be completed to inform the revised Climate Change Strategy in 2025. A separate report on climate change adaptation to this Council sets out how this may be resourced, though it is noted that the approval of the recommendation for additional resourcing within this report would provide capacity to move this work forward in a more comprehensive and timely manner than otherwise could be achieved. Page 134
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4.7 Significant opportunities lie ahead to make progress against these challenges, including: • The Scottish Government’s £500m North East Just Transition Fund, which officers are developing future bids for. To date, the Council has secured £881,000 from this Fund and officers propose to work with partners to develop a multi year, multi million pound bid across a range of projects, supporting economic growth, carbon reduction, renewable energy generation, use of natural capital and this will include spend to save opportunities • Potential future funding for the actions raised within the Council’s Local Heat and Energy Efficiency Strategy; • Incoming Regional Land Use Partnerships (RLUPs) which will be key to delivery of natural infrastructure development. Funding to enable peatland restoration, tree planting and renewable energy generation is expected to be made available by a new carbon tax; • Work to maximise socio-economic benefits from energy developments in Moray which could deliver significant funding opportunities for ongoing projects locally. This is based upon National Planning Framework 4 Policy 11 and guidance approved by the Council on 24 April 2024 (para 4a of the Minute refers). The Local Development Plan is required to identify opportunities for renewable energy and along with grid infrastructure, these are required by Policy 11 to maximise net economic impact, including local and community socio-economic benefits. The guidance proposes that a strategic regional approach is taken, which is additional to the existing community benefit process, to identify regional interventions which will be developed by the Council and HIE and could include elements of economic growth and spend to save, such as energy efficiency measures, affordable housing, renewables generation, tourism infrastructure, apprenticeship schemes, green skills and business space; • Power purchase agreements (PPAs) to cover capital funding of renewable energy installations, and provide a reduced energy cost to the Council; and • Retrofit credits for retrofitting works principally in social housing. 4.8 Success will require a combination of strong leadership, collaboration across services, knowledge building and adequate resourcing to realise these opportunities. 4.9 The groundwork to strengthen the Council’s position for advancing projects and securing external funding has been completed in some areas and is ongoing in others. This includes completion of the Council’s Local Heat and Energy Efficiency Strategy (LHEES), natural capital opportunities study, rooftop solar feasibility studies for buildings together with a further programme of lighting replacement and costing actions to inform the Climate Change Strategy update in 2025. Renewable energy projects on buildings are actively in development, with indicative payback periods of around 6 years, and demonstrating high net lifetime savings for the Council. These sit within the Transformation Strategy. 4.10 Owing to the upcoming decision point and review of the Climate Change Strategy, it is proposed that a members and officers’ Climate Change Working Group be established. This model previously operated during the Page 135
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development of the Climate Change Strategy and provided useful in-depth oversight around key areas of policy development. It is suggested that the working group follow a similar structure to existing working groups, with membership to include: • The Depute Chief Executive (Economy, Environment and Finance) and Heads of Service; • The Corporate (Chief Executive) and Elected (Cllr Van Der Horne) Climate Change champions; • The Climate Change Team • Relevant operational officers from key sections as required; • Nominated representatives from the member body; and • A representative from Moray Climate Action Network (Moray CAN). 4.11 If the working group proposal is approved, officers will seek nominations for representatives from Group Leaders and work with the nominees to develop a Terms of Reference setting out the focus, function and outcomes of the working group. The Terms of Reference will be reported to the next available meeting of the Council. 5 NEXT STEPS 5.1 This Climate Change Plan and Routemap to Net Zero, along with the latest carbon emissions reporting, will form the basis for officers producing a decision point report for members in 2025 on the Council’s continued commitment to net zero by 2030. This will provide an understanding of progress to date, the estimated costs and the level of carbon sequestration required to meet this target, and the impact on other aspects of the Council’s climate and nature crisis response. Recent and ongoing changes to national decarbonisation targets and the funding landscape will be analysed for impacts on work locally. 5.2 The planned revision of the Climate Change Strategy 2020-30 will take place in 2025 following the Council’s consideration of the decision point report. The revised strategy will be informed by engagement with elected members and the wider community. As part of this process, an internal review of climate change reporting processes and quality assurance procedures will be undertaken to ensure continued compliance with the Council’s statutory duties and in line with the Cabinet Secretary’s request at paragraph 3.8 above. 5.3 Building on the groundwork undertaken to take advantage of upcoming funding and spend-to-save opportunities will require support to progress project development and management that cannot be met within existing staff resources and expertise. In this regard, it is proposed that savings within Economic Growth and Development staffing budget be used to fund a temporary 12 month Project Officer post to provide cross-service development and management support for decarbonisation projects, spend-to-save opportunities and associated funding bids across buildings and natural capital opportunities. £20k is requested from reserves to assist this workstream by funding technical studies where necessary to progress renewables projects already subject to project mandates which demonstrate significant return on investment, develop future renewables and natural capital projects ready for Page 136
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funding as set out in the opportunities discussed above at paragraph 4.7. If approved, a report will be provided to Council within 3 months of the post commencing which will detail the funding being targeted, potential timeframe for bids, projects under consideration/development for bids into that funding, and objectives to be met by the projects including meeting statutory duties, national and local targets, and/or spend to save, and the potential value of the bid and any associated saving. 5.4 The Council has recognised that significant external funding will be required to meet its net zero targets and has already approved £30k as part of the 2024- 25 budget which is requested to be used to appoint consultants to inform development of a future bid to the Just Transition Fund from August 2024. However, this will only be sufficient to support workshops, analysis and development of the overall bid and will not cover the cost of developing elements of the detail to go into the Just Transition bid or the interventions for the Regional Socio- Economic Benefit Fund. Future project officer costs, if bids are successful, will be written in to funding bids where applicable to provide capacity for ongoing project development and delivery to reduce the need for council resources. 6 SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The Climate Change Strategy 2020-30 supports the priorities set out in the Corporate Plan and 10 Year Plan. The Council has declared a climate and nature emergency, and the measures being progressed as part of the strategy seek to create a resilient, biodiverse, fair and more sustainable future for everyone within Moray. The actions of the strategy align fully with the priorities: • Tackling poverty and inequality; • Building a stronger, greener, vibrant economy; and • Building thriving, resilient, empowered communities. (b) Policy and Legal Climate Change (Scotland) Act 2009 places a duty on public bodies to act in the way best calculated to contribute to the delivery of Scotland’s climate change targets; in the way best calculated to help deliver any programme for climate change adaptation laid before the Scottish Parliament; in a way it considers most sustainable. Local Government in Scotland Act 2003 places Best Value duties on the Council which include contributing to the achievement of sustainable development through continuous improvement in performance. Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Order 2015 requires that public bodies prepare a report on compliance with climate change duties as set out by the Climate Change (Scotland) Act 2009. Page 137
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Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020 requires that public bodies provide further details within their mandatory reporting on climate change duties. Nature Conservation (Scotland) Act 2004 places a duty on the Council to consider biodiversity in its decision-making processes and to promote the conservation of local habitats and species. Local Heat and Energy Efficiency Strategies (Scotland) Order 2022 requires the Council to develop plans to improve energy efficiency and reduce carbon emissions in buildings across Moray. Heat Networks (Scotland) Act 2021 requires the Council to develop plans to improve energy efficiency and reduce carbon emissions in buildings across Moray. Transport (Scotland) Act 2019 provides the Council with powers to improve active travel infrastructure and implement low emission zones. Planning (Scotland) Act 2019, through National Planning Framework 4 (NPF4), incorporates national climate change targets into the local planning system to promote sustainable development, and consider carbon, biodiversity and climate change impacts throughout the planning process. In addition, climate change is increasingly being embedded in in all government policies ranging from infrastructure delivery to energy policy, and these are likely to influence the Council’s work moving forward. (c) Financial implications £20k is requested from reserves to provide a limited budget for technical studies where necessary to support cross-service development and management support for decarbonisation projects, spend-to-save opportunities and associated funding bids across buildings and natural capital opportunities, as set out in paragraphs 5.3 and 5.4. This budget will be used by a fixed term project officer to be recruited at Grade 9 (£41,696.20-£45,730.10) for 12 months using existing budget and savings identified within the Economic Growth and Development staffing budget. This consists of £20k in both 2024/25 and 2025/26 from the economic strategy budget which was retained to provide consultancy, £10k from the local development plan revenue budget 2024/25 and £10k from the Strategic Planning and Development staffing budget arising from vacancy management and secondment to Elgin Town Board. To support the post £20k is required for technical studies as outlined above, without which progress will be limited. The proposed works align with all three of the corporate priorities: • Tackling poverty and inequality; • Building a stronger, greener, vibrant economy; and • Building thriving, resilient, empowered communities. The projects progressed within the opportunities set out at paragraph 3.7 focus both on leveraging in funding to deliver climate and socio- Page 138
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economic benefits and, where possible, on spend to save opportunities such as those from renewables, other energy saving works and potential income generation including carbon and retrofit credits. The scale at which these opportunities can be realised cannot yet be quantified, but even if Moray achieved its pro-rata share of funding from the Just Transition Fund alone, that would equate to around £90m over 10 years. That work cannot be accommodated within existing resources. Corporate Management Team Additional Expenditure Warning When the Council approved the budget for 2024/25 on 28 February 2024 (paragraph 7 of the Minute refers) it balanced only by using reserves. The indicative 3 year budget shows a likely requirement to continue to make savings in the order of £13 million in the next two years. All financial decisions must be made in this context and only essential additional expenditure should be agreed in the course of the year. In making this determination the committee should consider whether the financial risk to the Council of incurring additional expenditure outweighs the risk to the Council of not incurring that expenditure, as set out in the risk section below and whether a decision on funding could reasonably be deferred until the budget for future years is approved. As the budget has been balanced using reserves and reduced free general reserves to the policy minimum, this would use further earmarked reserves of no more than £20k in 2024/25 and increase savings required in 2025/26 by £20k if approved. (d) Risk Implications Climate change is a serious risk to the Council’s service provision. It poses significant risks to our health, our economy, our environment and endangers the wellbeing of current and future generations. The actions within the Climate Change Strategy 2020-30 are designed to ensure compliance with the Council’s statutory obligations and targets. There is a risk that progress will be limited if the project officer post is approved without the additional £20k being approved for technical studies. (e) Staffing Implications Groundwork to strengthen the Council’s position for advancing decarbonisation projects and external funding is principally led by officers in Strategic Planning and Development, with support from officers in Housing and Property and Transportation. These services are under significant workload pressures associated with Climate Change Duties, Local Development Plan, Moray Growth Deal, Levelling Up Fund, and Elgin Town Board. This has limited progress on developing future Just Transition projects and in further developing the Socio-economic benefits guidance and regional interventions. If approved, a fixed-term project officer at grade 9 will be recruited for 12 months to support officers in Strategic Planning and Development to develop and manage projects and funding bids as outlined in the Financial Implications section. This would provide sufficient workload capacity to consider the Council’s climate change impacts vulnerability assessment work in a comprehensive and timely manner, to inform the Climate Change Strategy update in 2025. Page 139
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(f) Property The development of decarbonisation projects will impact on corporate buildings, council landholdings and the learning estate. Implications for specific sites will be set out as projects are developed in detail. As agreed by the Council in the case of natural capital projects, any landholdings identified as potentially suitable for change will be assessed on a case-by-case basis in collaboration with key stakeholders. If any proposed improvements would lead to change of use of common good land, then this would be subject to a statutory public consultation under S104 of the Community Empowerment (Scotland) Act 2015 to ensure community support for the proposals and will be subject to future reporting. (g) Equalities/Socio Economic Impact Climate change will impact on every service area of the Council. By considering climate change across services, it is possible to deliver positive equalities and socio-economic impacts. Climate action is integral in progressing the Council’s corporate priorities of tackling poverty and inequality, building a stronger greener economy, and building thriving, resilient, empowered communities. Climate change will lead to more extreme weather events in Moray which will have a disproportionate impact on those already in poverty or with the inability to adapt to this change. (h) Climate Change and Biodiversity Impacts This report focuses attention on the actions required to ensure that the Council meets its statutory obligations and targets. Reducing carbon emissions, restoring nature and being ready for climate impacts are necessary steps to act on the climate and nature emergency and show local leadership. (i) Consultations Consultations have been undertaken with the Interim Chief Executive, the Depute Chief Executive (Economy, Environment and Finance), the Depute Chief Executive (Education, Communities and Organisational Development), the Acting Head of Economic Growth and Development, the Head of Governance, Strategy and Performance, the Head of Housing and Property, the Head of Environmental and Commercial Services, the Chief Financial Officer, the Democratic Services Manager, the Roads Maintenance Manager, the Vehicle Services and Compliance Manager, the Programme Manager (Learning Estate), the Waste Manager, the Energy Officer, and the Equal Opportunities Officer. A briefing on this report for elected members was conducted on 3 September 2024. Page 140
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7 CONCLUSION 7.1. The Climate Change Plan and Routemap to Net Zero provides an update on the Council’s progress towards its targets and statutory duties in relation to climate change. If the Council’s 2030 net zero target is to be achieved, there is a need for improvement in the Council’s response across the key areas of carbon reduction, restoring nature and being prepared for the impacts of climate change. 7.2. Groundwork has been completed is some areas and is underway in others to respond to opportunities for improvement. Significant funding resources are currently and are likely to become available to progress these decarbonisation projects and having project options prepared ahead is likely to be key to achieving success in these funding streams. 7.3. £20k is requested from reserves to assist provision of cross-service development and management support by funding any technical studies as required to progress decarbonisation projects, income generation and spend-to-save opportunities, and associated funding bids. Author of Report: George Gunn, Climate Change Strategy Officer Background Papers: Ref: SPMAN-813460984-597 Page 141
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Appendix 1 Moray Council Climate Change Strategy 2020-2030 Climate Change Plan and Routemap to Net Zero 2024 update Item 14. Page 143
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Contents Executive Summary 1 Why are we taking climate action 2 How we approach climate action 3 Our climate action progress 3.1 Building Heat and Electricity 3.2 Transport 3.3 Waste 3.4 Operating Emissions 3.5 Procurement and Investment 3.6 Nature and Carbon Sequestration 3.7 Adaptation 3.8 External Influence 4 Where are we going 5 Conclusion Glossary Climate Change Plan and Route Map to Net Zero 2024 update 1 2 10 16 18 21 24 26 28 30 34 37 40 47 48 Page 144
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Climate change and its impact on nature are already being felt across Moray communities. From coastal erosion to severe storms and flooding, these impacts affect the way that Moray Council delivers vital public services. The Council’s declaration of a climate and nature emergency places urgency on its work to both reduce carbon emissions and prepare public services and communities for the impacts of tomorrow. This Climate Change Plan and Routemap to Net Zero is an annual report on the progress of the Moray Council Climate Change Strategy 2020-2030. It provides a strategic outlook to ensure the greatest impact from our resources whilst addressing the climate and nature emergencies. Whilst this year’s report highlights progress and best practices, carbon emissions have increased due to business-as-usual practices. This reinforces the need to use resources to their best advantage in a challenging financial climate and underlines that achieving the Council’s aspirations and statutory duties requires revisiting the following fundamental principles: Strong leadership Sufficient resources Well-defined roles and responsibilities An empowering change culture Clear and transparent communication Knowledge and expertise Robust targets, measurement and evaluation 1Climate Change Plan and Route Map to Net Zero 2024 update A decision point report will be produced in 2025 for members to reassess the Council’s decarbonisation targets, considering changes in the policy and funding landscape, which will for the basis for a review of the Climate Change Strategy 2020-30. Achieving the Council’s target of net zero by 2030 will require further action in key areas. This includes building decarbonisation, continuing progress in waste reduction and developing a delivery model for natural capital enhancements. Groundwork in these areas has been completed or is currently underway, including on the Council’s Local Heat and Energy Efficiency Strategy, natural capital opportunities study, rooftop solar feasibility studies for buildings and costing actions to inform the Climate Change Strategy update in 2025. Significant opportunities lie ahead to make progress in these areas, including through the Scottish Government’s £500m North East Just Transition Fund. Success will require a combination of strong leadership, collaboration across services, knowledge building and adequate resourcing to realise these opportunities. Executive Summary Page 145
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1.1 Introduction Moray Council is committed to acting on the causes and impacts of climate change. Since declaring a climate emergency in June 2019, the Council has introduced a Climate Change Strategy with a target of reducing direct emissions from council activities to net zero by 2030. This Climate Change Plan and Routemap to Net Zero supports the strategy, providing an annual update on progress, actions and will inform the strategy update in 2025. The Council also declared a nature emergency in February 2023. This recognises the value of nature and its role in achieving climate targets, maintaining a strong economy and protecting the health and wellbeing of future generations. The importance of using nature-based solutions to climate change are well recognised, with positive outcomes for both mitigation and adaptation1. 2 Climate Change Plan and Route Map to Net Zero 2024 update 1.2 Think global, act local The climate is changing faster than ever previously experienced. Scientists agree that greenhouse gas emissions from human activities are the main reason for global temperature increases over the past 150 years2 (Figure 1). Urgent cutting of carbon emissions is needed to limit global warming to 1.5°C. To achieve this, some argue that countries with the highest emissions should take greater responsibility. However, as Figure 2 illustrates, there is a responsibility on all nations to contribute. The UK contributed the majority of global emissions until the 1900s. Increased carbon dioxide in the atmosphere also has a profound impact on the health and wellbeing of the population. There is approximately 1 excess death per 4,500 tCO2e emitted3 and the impacts of climate change will be felt disproportionately by people on low incomes who have contributed least to the increase in greenhouse gas emissions4. 1. Why we are taking climate action 1 Seddon et al. (2020) ‘Global recognition of the importance of nature-based solutions to the impacts of climate change’. 2 IPCC (2021) Climate Change 2021: The Physical Science Basis. 3 Bressler (2021) ‘The mortality cost of carbon’. 4 UK Government (2019) The Impacts of Climate Change. Annual Moray carbon emissions of approximately 500,000 tCO2e = estimated 111 excess deaths per year3 Page 146
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Moray’s climate is no longer what it used to be. Weather patterns are becoming increasingly erratic and sea levels are rising, with the impacts already being felt. Extreme weather events such as heatwaves, droughts and sudden heavy rainfall are increasing in frequency. These changes are projected to continue and intensify in the future. Climate impacts experienced elsewhere on Earth will also affect life in Moray. For example, disruption to supply chains or higher costs following drought in major food producing countries, or where conflict arises over access to natural resources. Pressure on local services will increase due to climate change. Impacts will include: Damage to infrastructure such as buildings, roads, railways and power supplies; Damage to ecosystems, water supplies and agricultural production; Disrupted food supply chains and increased costs; and Disproportionate health and economic effects on vulnerable people. 3Climate Change Plan and Route Map to Net Zero 2024 updatePage 147
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4 Climate Change Plan and Route Map to Net Zero 2024 update Coastal flooding and erosion is a high risk in Moray due to rising sea levels and storm surges leading to property damage, infrastructure disruption and loss of habitable land. Storms and wildfires already have a significant impact on Moray’s woodland resources. Climate change and biodiversity loss are inextricably linked. The rapid loss of nature is both a result and driver of climate change. Biodiversity loss will negatively impact our ability to adapt to a changing climate, with implications for the Moray food and drink sector, tourism sector, and overall health and wellbeing. The severity of future climate change depends on how fast we reduce greenhouse gas emissions. Early and significant emissions cuts can lessen the degree and impact of climate change. But past and present global emissions have already set some effects in motion, regardless of future reductions. The Council should prepare for a global temperature increase of 2°C, but also plan for a potential rise of up to 4°C by 2100. This is because global carbon emission trajectories at present fall far short of restricting average temperature rises to within safe limits, and historical emissions will continue to have an impact long after we have reached net zero. If targets continue to be missed, the quality of life that we know in Moray today will no longer be recognisable to our descendants by the end of this century. This will be due to the extreme circumstances that they will be forced to live in. To reduce the severity of these impacts, deep and urgent cuts to the carbon emissions (mitigation) are necessary, alongside preparation for the unavoidable impacts (adaptation). It is not possible to achieve this within the confines of the Council’s budget alone. Funding opportunities are currently and in future are likely to become available to make progress in these areas. Page 148
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1.3 Co-benefits of climate action Moray Council and its community planning partners play a vital leadership role in driving the ambition and local collaboration necessary to integrate climate action and a just transition into planning and investment decisions5. Recognising that every council service has an impact on the climate is necessary to deliver a sustainable future for Moray. Ensuring that the Council’s budget of over £278 million is strategically invested, and opportunities for external funding maximised, presents co-benefits which support multiple demands from communities and businesses. The wider benefits of climate action can include the creation of green jobs, reduction of fuel poverty and energy costs, improved public health from active travel and cleaner air, and enhanced biodiversity due to the expansion and enhancement of green spaces. Climate action supports the delivery of the Council’s corporate priorities and vision, presenting opportunities to improve multiple outcomes at once. Embedding climate action within services offers a strategic and cost-effective way to overcome the challenges identified in the corporate plan. 5Climate Change Plan and Route Map to Net Zero 2024 update Early investment in climate change adaptation delivers strong value for money. It has been found that most measures deliver £2 to £10 of net wider economic benefits locally for every £1 spent6. In addition, around £9 in property damages and wider impacts can be avoided. 1.3.1 Tackling poverty and inequality The most vulnerable people in our communities are also most at risk from climate impacts. Those with existing health conditions, the elderly, the very young, and those on a low income or in rented accommodation are all disproportionately affected by climate change. Actions such as improving poor housing energy efficiency and greenspaces can: √ Protect the most vulnerable from climate impacts; √ Reduce fuel poverty by lowering bills and living costs; √ Improve health and wellbeing; √ Lead to healthier diets √ Reduce health and social care costs; and √ Increase productivity by reduction in missed school and workdays. 5 Improvement Service (2023) Community Planning Improvement Board: Climate change and sustainability key messages. 6 UK National Audit Office (2022) ‘Climate change adaptation: the government’s role and progress’. Page 149
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6 Climate Change Plan and Route Map to Net Zero 2024 update 1.3.2 Building a stronger, greener, vibrant economy Promoting green skills to people from an early age, investing in low carbon technologies and nature-based solutions in projects and taking opportunities to develop local skills and industry in these areas can: √ Increase demand and opportunities for green jobs and skills; √ Retain young people in Moray; √ Reverse biodiversity loss; √ Strengthen the Moray economy and build community wealth; √ Improve standards of living; √ Build resilience to climate change impacts such as flooding or droughts; √ Reduce energy and maintenance bills; √ Reduce costs from severe weather damage; and √ Create new opportunities for Council revenue generation. Page 150
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1.3.3 Building thriving, resilient, empowered communities Being able to respond to climate impacts and benefit from the opportunities through a just transition will require communities to work together. Actions such as improving public transport, active travel, and access to greenspace, facilitating resilience planning and green grants can support: √ Strong, well-connected communities with enhanced job prospects; √ Increased community wealth – keeping money in Moray; √ Reduced health costs; √ Improved physical and mental health; √ Community-led improvements; √ Public involvement in planning; √ Community income generation; and √ Less waste. 7Climate Change Plan and Route Map to Net Zero 2024 updatePage 151
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1.4 Statutory obligations Moray Council has a statutory responsibility to undertake climate change action. Scotland aims to reduce greenhouse gas emissions to reach net zero by 2045. The Climate Change (Scotland) Act 2009 places a duty on all public bodies to act to deliver on the national climate change targets. Under this legislation, Moray Council has three main duties: Mitigation: To contribute to reducing greenhouse gas emissions Adaptation: To help Moray adapt to the changing climate Sustainability: To act in a sustainable manner. The Council must report on compliance with these duties annually in accordance with the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Order 2015 and subsequent amendments. 8 Climate Change Plan and Route Map to Net Zero 2024 update The Council is required to provide the following information in annual climate change reports: its target date for achieving zero direct emissions; its targets for reducing indirect emissions; how its targets will align spending plans and use of resources to contribute to reducing emissions; how it will publish progress to achieving emissions reduction targets; and what contribution it has made to helping deliver Scotland’s Climate Change Adaptation Programme. National Planning Framework 4 (NPF4) considers carbon, climate change and biodiversity by incorporating the national climate change targets into the local planning system to promote sustainable development. The Heat Networks (Scotland) Act 2021 aims to regulate and support the development of heat networks. Heat networks distribute heat from a central source to multiple buildings, reducing the need for individual heating systems and promoting energy efficiency. The council is required to undertake assessments of the potential for heat networks in Moray and develop plans to promote their use. The Local Heat and Energy Efficiency Strategies (Scotland) Order 2022 requires the council to develop plans to improve energy efficiency and reduce carbon emissions in buildings across Moray, to support the transition to net zero. Page 152
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The Nature Conservation (Scotland) Act 2004 aims to protect and conserve biodiversity and natural habitats. It places a duty on the council to consider biodiversity in its decision-making processes and to promote the conservation of local habitats and species. The Transport (Scotland) Act 2019 aims to promote sustainable transport and reduce greenhouse gas emissions from the transport sector. It has provided the council with greater powers to implement Low Emission Zones and improve active travel infrastructure. 9Climate Change Plan and Route Map to Net Zero 2024 update Figure 1. Global atmospheric carbon dioxide (CO2) concentration from 803,720 BCE to present day. Data from National Oceanic and Atmospheric Administration (2023). Figure 2. Share of global cumulative carbon emissions since 1750. Data from Our World In Data/Global Carbon Budget (2023). Page 153
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The Council recognises that a considered approach is necessary for successful climate action. To ensure the greatest impact from our resources, climate action measures should be designed into all services and budgets rather than considered in isolation. A dedicated team of climate change officers are responsible for preparing, monitoring and implementing the Climate Change Strategy. The scope of this team continues to grow as more statutory duties are placed on the authority. The team also act as a consultee and provide guidance on planning applications and provide advice to support funding bids and delivery of Council and Community Planning Partnership projects including Moray Growth Deal, Elgin Town Board and the Levelling Up Fund. The Council’s declaration of a climate and nature emergency places urgency on the pace and scope of all actions. The Climate Change Strategy therefore sets out how the Council will respond to the climate and nature emergencies, and its statutory duties. To achieve this requires: 1. Strong leadership It is recommended that climate action is supported by elected members and all of the Council’s managers. They lead by example and are visibly involved in climate action initiatives, and routinely engage in updates on the Council’s progress to net zero. This outlines the importance of these actions to employees and encourages them to get involved. 10 Climate Change Plan and Route Map to Net Zero 2024 update Climate change is reflected as priority in corporate and service plans of the Council. It is recommended that all tier 1-3 managers and elected members have completed climate and nature emergency training, to improve understanding and encourage wider participation. 2. Sufficient resources Implementation of projects is supported by sufficient resources and staffing. Embedding actions within ongoing transformation of services is essential to ensure that the Council reduces costs and its impacts on the climate and nature. 3. Well-defined roles and responsibilities It is regularly promoted that everyone at the Council has a responsibility to act sustainably in the interests of the organisation and the environment. A governance structure for climate action is included within the Climate Change Strategy. The Climate Change Board meets quarterly to review actions and progress is reported annually to the Council via the Climate Change Plan and Routemap to Net Zero. 2. How we approach climate action Page 154
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Two climate champions promote climate action within their respective remits and ensure effective communication. The Corporate Climate Change Champion is the Chief Executive, and the Elected Climate Change Champion is chosen by members. These individuals are briefed regularly by the Council’s climate change officers and are invited to attend the Climate Change Board. 4. An empowering change culture The Council fosters a culture that encourages and supports innovative ideas for reducing emissions and wider impact on the environment. It does so by regularly consulting with colleagues and stakeholders and responding to their ideas. The Council celebrates success and milestones achieved through annual staff awards and the employee magazine, Connect. It is recommended that climate change is an integral part of the annual staff conference, where officers update staff on progress and seek their feedback. 5. Clear and transparent communication Communications around climate and nature should be clear and explain why action is being taken, to ensure understanding and promote behaviour change. Elected members, staff and stakeholders are kept informed about the Council’s progress on climate action, including any challenges, through the annual Climate Change Plan and Routemap to Net Zero update. 11Climate Change Plan and Route Map to Net Zero 2024 update 6. Knowledge and expertise In addition to its climate change officers, the Council recognises the importance of upskilling to achieve its targets. Training and development opportunities are created and provided for employees and elected members on the climate and nature emergency. The Council works closely with academic institutions such as UHI and industry bodies to leverage their expertise and knowledge. 7. Robust targets, measurement and evaluation The Council’s targets are measurable and recording mechanisms transparent and improved over time. Where there is uncertainty, assumptions backed by expertise will be made and stated clearly to avoid understating the Council’s climate and nature impacts. Reports should be candid in their evaluation of activities to provide opportunities for continuous improvement and learning by the Council and the wider community. Page 155
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2.1 How we define net zero Net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere – for example, by oceans and forests7. Emissions originate from sources directly within the Council’s control (Scope 1), or where it is the direct user of a good or service (Scope 2), e.g. fleet vehicle emissions and grid electricity use. The Council’s target for net zero is to reduce direct operating emissions of the council to net zero by 2030. Other emissions originate from sources where the council has an interest but no direct control (Scope 3), e.g. procurement of food for school catering. Calculating these emissions involves a greater level of uncertainty: both in the emissions themselves, and the level of responsibility for them. The Council has a statutory duty to report on all Scope 1 and 2 emissions, and all Scope 3 emissions from “relevant and significant areas of the organisation’s indirect emissions” greater than 1% of total organisational emissions. Figure 3 provides an overview of all emission scopes. 12 Climate Change Plan and Route Map to Net Zero 2024 update 7 United Nations (2023) What is net zero? Figure 3. Emissions scope classification for Moray Council activities. Page 156
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2.2 Setting our targets The Council’s targets include direct and indirect emissions. They: Are clear on what is included in the scope of the Council’s emissions; Cover all Scope 1 and 2 emissions and appropriate areas of Scope 3 emissions (e.g. municipal waste); Have interim reduction targets at set periods that align to the Scottish Government targets; and Reduce residual emissions to as low a level as possible and set out how carbon sequestration methods will be used to achieve net zero emissions. 13Climate Change Plan and Route Map to Net Zero 2024 update The Council uses a carbon management hierarchy approach to prioritise its targets and necessary actions (Figure 4). This approach prioritises the avoidance of carbon emissions to deliver lasting change. Where avoidance of emissions is not possible then they should be reduced through service efficiencies or redesign. Removal of emissions is required where further reductions cannot be achieved. Figure 4. Moray Council carbon management hierarchy. Page 157
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Offsetting ‘unavoidable’ emissions through offsetting schemes should be considered as a last resort in target setting. Offsetting significant levels of carbon is discouraged as large-scale offsets are not sustainable and guidance makes clear that public bodies are required to reduce emissions as much as possible before considering offsets. For example, actions might look like: AVOID: Redesign services to enable smarter working. REDUCE: Reduce energy through smart timing solutions or motion sensors. REPLACE: Decarbonisation of the Council’s fleet. OFFSET: Plant an area of woodland to offset unavoidable emissions. 2.3 Baselining our emissions Calculating a baseline of emissions helps to determine the level of intervention needed to achieve net zero carbon emissions, and to allow progress to be monitored. The Council’s carbon emissions from 2017/18 are used as a baseline for emissions (Table 1). This year was chosen as it was the earliest year that had a comprehensive return of emissions to the Scottish Government. It should be noted that as these data are from prior to the COVID- 19 pandemic, operational emissions were minimal as most staff worked from an office base and home working emissions were not being recorded. The first time that the Council recorded homeworking emissions was during the pandemic. 14 Climate Change Plan and Route Map to Net Zero 2024 updatePage 158
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Table 1. Moray Council 2017/18 baseline carbon emissions. 15Climate Change Plan and Route Map to Net Zero 2024 update Building heat Building electricity Emission source by area and source 4,077.9 1,034.1 34.7 15.4 Subtotal - 5,162.1 1,122.0 1,177.3 1,685.5 523.8 358.5 145.7 249.6 346.2 611.0 Subtotal - 6,219.6 Natural gas Gas oil Biomass Purchased heat and steam Primary schools and nurseries Secondary schools Unmetered electricity Offices Community facilities Residential homes and day centres Sports facilities Industrial Other Carbon emissions (tCO2e) Transport Waste Operational emissions Emission source by area and source 3,591.5 27.5 776.6 0.0 0.0 68.2 Subtotal - 4,463.8 0.0 9,130.3 2,048.7 387.2 Subtotal - 11,566.2 72.1 0.0 125.8 394.8 Subtotal - 592.7 TOTAL - 28,004.4 Diesel Petrol Gas oil Electric vehicles Hybrid vehicles Marine fuel oil Landfill gas Municipal refuse to landfill Commercial, industrial and clinical waste to landfill Recycling and composting Outdoor spaces Homeworking emissions Water supply and treatment Corporate travel Carbon emissions (tCO2e) Page 159
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16 Climate Change Plan and Route Map to Net Zero 2024 update 3. Our climate action progress The following milestones have been adopted by Moray Council in response to the wider commitments set by the Scottish Government for Scotland and the public sector. From 2021 Moray Council implements its Climate Change Strategy with the goal to be net zero by 2030 Public bodies tasked with embedding climate change and circular economy principles in procurement strategies and reporting 2022 Public bodies have to report target date for zero direct emissions and for reducing indirect emissions. 2025 Council decision point to reassess commitment to 2030 net zero target Updated Climate Change Strategy due for publication New petrol and diesel light commercial vehicles phased out of Scottish public bodies’ procurement Scotland-wide ban on landfilling biodegradable municipal waste 2030 Moray Council target to be net zero New petrol and diesel large commercial vehicles phased out of Scottish public bodies’ procurement Scotland and international goals to halt and reverse biodiversity loss Scotland goal to restore and regenerate biodiversity 2038 Scotland has zero direct emissions from public buildings 2045 Scotland target to be net zero 2023 2022 2030 2045 2038 2021 2025 2023 Moray Council diverts all waste from landfill to energy from waste facility. 2024 Moray Council agrees draft Local Heat and Energy Efficiency Strategy and commits to developing a natural capital enhancements delivery model. Work commences to cost interventions to inform review of the Climate Change Strategy. Page 160
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The way that the Council conducts its work and manages its assets all has an impact on the climate and nature. Every service has a responsibility to reduce this impact. If progress is to be made on the Council’s targets, it must consider what it is doing and how it is doing it. Within that, the Council should also reflect on the lessons that it can learn from examples of good progress and how these can be applied to future action. 17Climate Change Plan and Route Map to Net Zero 2024 updatePage 161
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18 Climate Change Plan and Route Map to Net Zero 2024 update 3.1.1 Overview The Council’s property portfolio comprises a range of buildings including offices, schools, libraries, sports facilities and depots. These buildings vary in age, size, energy efficiency and condition. Most of the Council’s buildings are heated by natural gas or gas oil. However, there are some sites where biomass has been installed. Building electricity is drawn from the national grid. A small minority of buildings have been fitted with solar PV panels. Electricity use also includes street lighting and safety floodlighting. There are a series of national phased targets for all publicly owned buildings to meet zero emission heating requirements, with a backstop of 2038. To enable this, support is being provided by the Scottish Government via the: Scottish Government Heat Network Support Unit Grant Scottish Public Sector Energy Efficiency Loan Scheme Scottish Central Government Energy Efficiency Grant Scheme 3.1 Building heat and electricity Page 162
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3.1.2 Current emissions Emissions from the Council’s buildings are split into two categories: building heat and building electricity. Building electricity emissions currently represent 11% of our overall emissions. As shown in Figure 5, building electricity emissions have decreased by 66% from our baseline. This is due to a greener national grid and reduced electricity consumption through efficiency programmes such as those in Case Study 1. Further significant emissions reduction is achievable in this area with strategic investment (spend-to-save basis) – particularly through widespread adoption of roof-mounted solar PV panels. 19Climate Change Plan and Route Map to Net Zero 2024 update Building heat emissions currently represent 24% of the Council’s overall emissions. Whilst use of gas oil and purchased heat and steam has decreased over the baseline period, Figure 5 illustrates a continued reliance in the most recent reporting period on natural gas and gas oil for building heat. This is largely due to a return to ‘business as usual’ working practices following the marked decrease in these emissions during the Covid-19 pandemic working restrictions, as well as decisions made to continue use of gas boilers on cost grounds. Figure 5. Building heat and electricity emissions from baseline to present. Page 163
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Case study 1: Pilmuir Nursery Pilmuir Nursery, a large nursery built in 2020, demonstrates how modern design principles can contribute to emissions reduction. The nursery uses an Air Source Heat Pump (ASHP) for heating. This uses renewable energy from the ambient air, resulting in at least three times the efficiency of conventional gas or oil boilers. This shift translates to a significant reduction in CO2 emissions. Rooftop solar PV panels generate around 2,500 kWh of clean electricity per year. This offsets the energy costs of the ASHP and the entire nursery, reducing reliance on the grid and saving an estimated 480 kgCO2e each year. Pilmuir Nursery serves as a successful example of how sustainable design can be effectively integrated into council buildings. By prioritising energy efficiency and renewable energy generation, the nursery demonstrates a cost-effective and sustainable building solution. 20 Climate Change Plan and Route Map to Net Zero 2024 update 3.1.3 Action areas Increasing building user awareness of ways to reduce energy use and save utility costs Curtailing building opening times Progress a ‘fabric first’ approach to building design Identifying opportunities for heating and power refurbishment in the learning estate Promoting Smarter Working Feasibility studies to consider renewable energy potential across the Council’s property portfolio, and potential for connect to a heat network Installing renewable energy technologies on council-owned buildings and land Replacement of carbon-based heating systems Aim to achieve zero carbon standards for all new buildings, including housing and schools Achieve Energy Efficiency Standard for Social Housing (EESSH) for all council housing Reduced heat and electricity consumption More energy produced by renewables and low carbon sources Reduced building carbon output and increased energy efficiency Outcomes Actions include: Page 164
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3.2.1 Overview The Council’s fleet is used by employees to conduct council business and deliver services for the people of Moray. It comprises over 500 cars, vans, buses, trucks, specialist vehicles and vessels. Most of the fleet runs on diesel or gas oil fuel. Marine fuel oil is currently used in council vessels. Petrol is used for open spaces machinery. There are currently a series of national targets in relation to public sector transport fleets: All fossil fuel cars to be replaced by zero emission alternatives by 2025 No purchases of fossil fuel powered light commercial vehicles (under 3.5 tonnes) after 2025, with remaining vehicles phased out by 2030 Phase out heavy-duty vehicles by 2040 21Climate Change Plan and Route Map to Net Zero 2024 update Case study 2: Bus Revolution The Bus Revolution project launched in May 2023 with a goal of reducing the environmental impact of transport in Moray by 30 tCO2e by 2030. Bus Revolution leverages existing public transport expertise to tackle a critical need: connecting residents in rural Moray to essential services like work, education, and leisure. This innovative project offers a flexible, on-demand service accessible through a user-friendly app. In the first 6 months of service, the project's electric vehicles saved consumption of an estimated 3,400 litres of diesel and 8.5 tCO2e. With the carbon cost of electricity included, this resulted in direct emission savings of 7.6 tCO2e, exceeding the project's annual carbon saving target of 4.3 tCO2e. Bus Revolution represents a transformation in rural mobility, offering freedom and opportunity while promoting sustainability. 3.2 Transport Page 165
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3.2.2 Current emissions Emissions from the Council’s fleet are mostly from the use of diesel (Figure 6). In the most recent reporting period, there has been a rise in emissions from diesel use (Figure 7). This is largely due to a continued return to ‘business as usual’ working practices following the COVID-19 pandemic working restrictions. Fossil fuel cars in Moray will not all be replaced by the national target of 2025, owing to decisions taken recently by the Council due to immature technology and funding constraints. Subject to decisions on funding and infrastructure, it is possible that no purchases of fossil fuel powered light commercial vehicles (under 3.5 tonnes) will occur after 2025, with remaining vehicles phased out by 2030. The Zero Emission Fleet Replacement Strategy details the Council’s plans to decarbonise the remainder of the fleet in line with the Scottish Government’s net zero targets. 22 Climate Change Plan and Route Map to Net Zero 2024 update Figure 6. Breakdown of Moray Council transport emissions 2022-23. Figure 7. Transport emissions from baseline date to present. Page 166
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Outcomes Actions include: 3.2.3 Action areas 23Climate Change Plan and Route Map to Net Zero 2024 update Decarbonised council fleet Increased awareness of actions and opportunities to reduce emissions Facilitating emissions reduction Displacing fossil fuel powered vehicles and plant with ULEV alternatives Developing and promoting staff travel plans Delivering and promoting active travel to school campaigns Developing a calendar of sustainable events Developing strategy and guidance for provision of public EV charging facilities in Moray Organising bicycle maintenance sessions and led rides for staff Parking management around schools and supporting modal shift from vehicles to active travel Page 167
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3.3.1 Overview Waste is collected across Moray from households and commercial organisations. The Council is in the process of closing its landfill site at Nether Dallachy which now handles a small volume of commercial and industrial waste. From May 2023, the Council diverted its municipal waste from landfill to a new energy from waste facility (Case Study 2). Disposing of waste within landfill is the worst option for the environment and leads to significant carbon emissions. It should be the last resort for waste disposal (Figure 8). Prioritising the waste management hierarchy is crucial for further reduction in waste emissions. This means encouraging and implementing initiatives which promote waste prevention, reuse and recycling wherever possible. There are several national targets in relation to waste management: Minimum recycling from all sources to be 70% by 2025 Maximum of 5% of all waste sent to landfill by 2025 33% reduction in food waste by 2025 24 Climate Change Plan and Route Map to Net Zero 2024 update Case study 2: NESS Energy from Waste facility Despite the Council’s efforts to reduce residual waste through minimisation campaigns, recycling, composting and use of other treatments, a substantial quantity of residual waste that is generated will still need to be collected and cannot be landfilled anymore. The NESS Energy from Waste facility, a collaboration between Aberdeen City, Aberdeenshire and Moray Councils, opened in April 2024 and diverts non-recyclable waste from landfill and transforms it into clean energy. This state-of-the-art plant processes 150,000 tonnes of waste annually, generating electricity for the national grid and heat for a local district heating network. Diverting this residual waste from landfill to this facility will reduce the Council’s waste emissions by around 95%. Leader of Moray Council, Councillor Kathleen Robertson, said: “The opening of this facility couldn’t come at a better time and ensures that we not only meet our legislative obligations but will ensure that value, in terms of heat and electricity, is extracted from our waste. “As a high performing recycling authority, we’re pleased we have a modern facility that will serve the residents of Moray, and our partner authorities, for decades to come.” 3.3 Waste Figure 8. Scotland’s waste management hierarchy (Scottish Government 2015) Page 168
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Outcomes Actions include: 3.3.2 Current emissions Moray recorded the highest recycling rate across all local authorties in Scotland during 2022. The Council’s waste operations are undergoing a significant transformation. While currently responsible for 97% of all waste emissions (Figure 9), a switch to energy from waste technology will lead to a significant reduction in the next reporting year. Beyond existing landfill emissions, further emissions result from the processes involved in recycling and composting waste. The ongoing production of landfill gas at Nether Dallachy results in a negligible level of annual emissions. 25Climate Change Plan and Route Map to Net Zero 2024 update 3.3.3 Action areas Reduced emissions from non-recyclable waste Reduction in residual waste Diverting non-recyclable waste to NESS energy from waste facility in Aberdeen Working with Zero Waste Scotland and third sector partners to progress projects to reduce waste through re- use and recycling Carrying out education on recycling and waste reduction to improve sustainability awareness and recycling in schools and across council buildings Continue to drive participation in kirbside recycling including green waste through promotion and increased sales of the green waste permit Supporting creation and promotion of a Community Identified Benefits Portal, facilitating collaborative relationships between local construction firms/developers and circular economy initiatives Improving recycling and food composting facilities in schools Figure 9. Waste emissions from baseline date to present. Page 169
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3.4.1 Overview Operating emissions result from the day-to-day work of the Council. These include an annually estimated carbon emissions impact for employees working from home, commuting, electricity use in outdoor spaces, the use and treatment of water, and corporate travel. 3.4.2 Current emissions The Council’s operating emissions have marginally increased over the past year (Figure 10). Homeworking emissions were first required to be recorded in 2020/21, and since 2022/23 have also included staff commuting emissions. Emissions from electricity use in outdoor spaces have followed a decreasing trend in recent years owing to ongoing decarbonisation programmes such as those in Case Study 3. 26 Climate Change Plan and Route Map to Net Zero 2024 update Case study 3: LED street lighting programme The Council’s street lighting spend-to-save programme saw the replacement of approximately 17,600 lamps across Moray with LED alternatives. The typical lifespan of an LED street light is estimated to around 25 years. By comparison, traditional lamps last 4-5 years, resulting in more costly maintenance regime requirements. The programme has resulted in energy use reductions of almost 70%, as well as a reduction in light pollution across the Moray region. 3.4 Operating Emissions Figure 10. Operating emissions from baseline date to present. Page 170
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3.4.3 Action areas 27Climate Change Plan and Route Map to Net Zero 2024 update Outcomes Actions include: Supporting homeworkers to reduce their emissions through relevant advice and practical assistance Introducing an ultra-low emission vehicle (ULEV) salary sacrifice scheme for employees Promoting Smarter Working Increasing use of the cloud to reduce server network and electricity consumption Continue to make school meals more sustainable with a reduced carbon impact Developing and promoting more vegetarian and vegan food options Developing and delivering climate and nature emergency training for staff and elected members Updating climate change awareness training as part of the employee induction process Increasing opportunities for ‘Learning for Sustainability’ within the school curriculum Reduced emissions from operational actions Increased awareness of actions and opportunities to reduce emissions Outcomes Actions include: Applying zero and low carbon objectives as a factor in all investment decisions in relation to budgets and the Capital Plan Ensuring the Climate Change Strategy and Action Plan are living documents and remain fresh and valid until 2030 Assessing climate change and biodiversity impacts as part of all reports to committee Supporting the development of knowledge and skills to promote innovation and effective carbon management across departments Supporting opportunities for teachers and pupils to access and share knowledge/resources to progress climate change work Page 171
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3.5.1 Overview Around a third of the country’s emissions are dependent on sectors that are directly shaped or influenced by local authority practices, policy or partnerships8. It is to this end that procurement performs such a key role in reducing national climate impact. 28 Climate Change Plan and Route Map to Net Zero 2024 update procurement and community wealth building, as well as advisers from Business Gateway. Existing suppliers were on hand to share their experience of supplying the council. Suppliers liked that they could come to talk with relevant officers and obtain information before deciding whether to proceed with the tender process. It was an excellent opportunity for officers to handle any concerns or misconceptions about the process at an early stage. Feedback from attendees was very positive. Three local butchers went on to join the tender process, and one purchased an electric van. 3.5 Procurement and Investment 8 UK Climate Change Committee (2020) ‘Local authorities and the sixth carbon budget’. Case study 4: Food for Moray supplier engagement event The Food for Moray event invited any business interested in supplying fresh meat, fruit and veg and bakery products to schools to learn more about the process and gain advice from the teams involved. Suppliers spoke with relevant officers to find out about the criteria for supplying schools, how they can operate more sustainably and evidence this in their bids. The event was attended by officers from catering, climate change, Procurement of goods and services with the Council amounts to some £140 million annually. The Council therefore has a significant influence locally and regionally on climate change through procurement. The Procurement Reform (Scotland) Act 2014 introduced a sustainable procurement duty for local authorities. This requires that before the Council buys anything, it must think about: how it can improve the social, environmental and economic wellbeing of Moray, with a particular focus on reducing inequality how its procurement processes can facilitate the involvement of SMEs, third sector bodies and supported business how public procurement can be used to promote innovation Page 172
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Outcomes Actions include: Climate change and procurement officers have worked to develop a simple process for suppliers to evidence their carbon reduction actions when bidding for smaller contracts. The Council has also developed Sustainable Procurement Guidance and an associated training module and embedded this within the tender process to reflect the priorities and actions of the Climate Change Strategy. 3.5.2 Action areas 29Climate Change Plan and Route Map to Net Zero 2024 update Support suppliers to reduce their climate impact Maximise opportunities for climate action through procurement Developing a simple process for suppliers to evidence their carbon reduction actions when bidding for smaller contracts Developing an action plan for raising awareness to local business of new opportunities created through the Scottish Government’s Just Transition approach, following approval of the Community Wealth Building Strategy Continuing to develop the non-cash benefits available through procurement Implementing updates into the procurement process Developing sustainable procurement guidance and updating modules as appropriate Supporting and informing departmental lead officers through the sustainable procurement process Page 173
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3.6.2 Current activity - internal The Council’s latest biodiversity duty report was published in December 2023, highlighting continued improvements in managing council land positively for nature. Key actions from the past year have been: Five new wildflower / living lawn sites added, and condition surveys for all wild flower sites completed with recommendations for improved management; Invasive non-native tree removal in the Oakwood Site of Special Scientific Interest; Replacing even aged spruce with mixed native trees at Millbuies woodland and loch; and Reducing the use of herbicides in parks by almost half, allowing grass to grow longer and flowering plants to be present in some areas. Most of the Council’s land is not being managed with biodiversity as primary objective. This currently includes most park land, roadside verges, school playgrounds, and smaller spaces around buildings. 3.6.1 Overview The Council has a duty to further the conservation of biodiversity when carrying out its work. Many of the Council’s activities have the potential to drive biodiversity loss or nature recovery. These include discharging responsibility as Planning Authority through application of policy, as a landowner by how the estate is managed, and as Education Authority through how young people are connected with nature. The Council’s biodiversity duty should be exercised through all these responsibilities to support the national target to restore and reverse biodiversity loss by 2045. Enhancing biodiversity can also sequester carbon through well- managed soil and vegetation, thereby reducing net emissions (Figure 12). The Scottish Biodiversity Strategy recognises the key role that local authorities must play in delivering nature recovery with broad national targets for Scotland to halt and reverse nature loss by 2030, and to restore and regenerate biodiversity by 2045. NPF4 places the climate and nature crises at the centre of planning policy, in addition to rebalancing planning policy to ensure that positive effects for biodiversity are secured. Significant weight is to be given to the climate and nature crises in all development decisions, so that biodiversity is enhanced, and nature networks strengthened. The policies also promote the use of nature-based solutions. 30 Climate Change Plan and Route Map to Net Zero 2024 update 3.6 Nature and carbon sequestration Page 174
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31Climate Change Plan and Route Map to Net Zero 2024 update 3.6.2 Current activity – Moray area and Council influence Developments of every size are required to enhance biodiversity and should also use nature-based-solutions where possible. With planning permission granted for over 12,000 units each year in Moray, this presents a significant opportunity to secure positive effects for nature. The Council’s quality audit process has highlighted that while some protective measures are working as they should be, there is evidence of a lack of site-specific biodiversity improvements across development sites, particularly in smaller housing developments. A biodiversity study was completed during 2023 to inform the next LDP, reviewing the Council’s current policies against NPF4 and highlighting important species, habitats and ecological links across Moray. This also provided a foundation for the development of a Moray Nature Network, which is now being mapped. The nature network will address nature recovery on a landscape scale. The Council’s new Woodland and Forestry Strategy highlights opportunities for climate mitigation and adaptation alongside nature recovery. The strategy will help to guide new woodland creation as well as to encourage more urban tree cover and skills development to support this growing sector. Studies to identify natural capital enhancement opportunities which could enable carbon sequestration on council land and across Moray were presented to Council in spring 2024. Council agreed that the opportunities be progressed as part of the next LDP and through a suitable project delivery model yet to be agreed. Page 175
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32 Climate Change Plan and Route Map to Net Zero 2024 update Case study 5: Millbuies woodland restructuring Major forestry operations were undertaken at Millbuies woodland and loch with the aim of improving biodiversity and climate resilience. A large area of even aged non-native conifers were planted between 1960 and 1990 and while they provide some refuge for wildlife this is very limited compared to a more diverse native woodland composition. The devastating rate of biodiversity loss evidenced over the last 25 years, combined with increased frequency and severity of storm damage, risk of pests and diseases on woodland motivated urgent action to be taken. 9,750 mixed native trees have now been replanted across 3.6 hectares to the south of the loch, including Scots pine, oak and silver birch. This diverse mix will soon create a much healthier ecosystem and will be managed with low intervention and cost in the future. Outcomes Actions include: Maximise opportunities to sequester carbon within existing council assets Contribute to halting and restoring nature loss Progress and monitor carbon sequestration opportunities on council land holdings, beginning with the development of a suitable delivery model Deliver the direct grant from Scottish Government’s Nature Restoration Fund and increase nature positive management of council land Promote and support developments to be nature positive through the planning process Work with partners, including NESBiP and Moray CAN, to progress biodiversity actions at the local level and support the development of Nature Networks 3.6.3 Action areas Page 176
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33Climate Change Plan and Route Map to Net Zero 2024 update Figure 11. Nature based solutions to climate change (based on content from Improvement Service 2021). Improving health and wellbeing and reducing health inequalities Building stronger and more resilient communities Nurturing our young people Preventing the loss of biodiversity and protecting our natural capital Reducing carbon emissions and storing carbon safely Adapting to the impacts of climate change Supporting a Green Recovery and Just Transition Page 177
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Overview The Council has a statutory obligation within its annual Public Bodies Climate Change Duties reporting to record how it is contributing to Scotland’s Adaptation Programme. There is also a statutory duty to carry out actions to adapt to the impacts of climate change. The key outcomes that the Council is required to contribute to include: Outcome 1: Our communities are inclusive, empowered, resilient and safe in response to the changing climate. Outcome 3: Our inclusive and sustainable economy is flexible, adaptable and responsive to the changing climate. Outcome 5: Our natural environment is valued, enjoyed, protected and enhanced and has increased resilience to climate change. NPF4 identifies the Scottish adaptation programme as a cross- cutting policy link, requiring LDPs to adapt to the current and future risks of climate change by promoting nature recovery and restoration in Moray and introducing policy requirements which ensure that developments consider and take steps to address a range of climate risks. 34 Climate Change Plan and Route Map to Net Zero 2024 update 3.7 Adaptation Page 178
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35Climate Change Plan and Route Map to Net Zero 2024 update The Civil Contingencies Act (2004) requires the Council to assess the risk of emergencies occurring and maintain plans to ensure that services continue to be delivered in the event of an emergency. Severe weather and climate change are linked to emergencies that may result in wide impacts ranging from serious environmental damage to loss of life. Under the Flood Risk Management (Scotland) Act 2009, the Council has a statutory duty to implement and maintain flood protection actions and prepare local flood risk management plans. The Council is the lead authority for the Findhorn, Nairn and Speyside Local Plan District and works with partners to deliver the plan. Page 179
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Current activity A climate change adaptation benchmarking process was undertaken over the past year, which involved collating council activity which contributes to the Scottish adaptation programme. While the Council is a national leader in our approach to coastal change and has robust flood risk management plans in place, very little consideration has been given to how the wide range of impacts of climate will affect the organisation and services it delivers. The benchmarking process itself has begun to raise awareness and understanding, alongside the climate change training programme. The Scottish Government’s guidance outlines the need for flexible measures to be taken to adapt to climate change risks to critical infrastructure. The Council has supported the establishment of 14 Community Resilience Groups and draft plans are now in place for Lossiemouth, Forres, Keith, Elgin, Portgordon, Buckie and Aberlour. Moray is covered by Regional and Local Flood Risk Management Plans that identify vulnerabilities and actions in place to address risks. The plans follow a 6-year cycle, prioritising actions with the local plans detailing the responsible body, timescales and funding for these actions. An innovative pathway approach is now in place for Moray’s coastline. The Regional Coastal Change Adaptation Plan and ten local plans will enable the council to plan for, and react to, different scenarios as they are triggered. Collaborative working across services will ensure that the coastal plans links with wider adaptation plans and how services can be delivered while considering possible climate change impacts. 36 Climate Change Plan and Route Map to Net Zero 2024 updatePage 180
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3.8.1 Overview Many of the Council’s statutory duties are related to reducing greenhouse gas emissions in the wider Moray area. This includes actions such as supporting energy efficiency improvements in homes, active travel and green training as part of a just transition away from fossil fuels. While this will not reduce the Council’s direct carbon footprint, the Climate Change Strategy also seeks to reduce carbon emissions across Moray by demonstrating leadership and good practice. The leadership role of local authorities is reflected in the Scottish Public Engagement Strategy for Climate Change, to support the wider area to understand, participate and act on climate change. This includes being prepared for the impacts of climate change, and several of the Council’s responsibilities to the wider area cross over with the duty to support delivery of the Scottish National Adaptation Programme. In delivering the Biodiversity Duty, the Council must also aim to engage the wider community with nature alongside embedding nature conservation in service delivery. Engaging with the community is essential to understand local concerns and bring about necessary change. A collaborative approach can lead to more effective policies, behavioural changes, enhanced community resilience and a reduction in climate change impacts. 37Climate Change Plan and Route Map to Net Zero 2024 update 3.8.2 Current activity The Council has produced its first draft Local Heat and Energy Efficiency Strategy (LHEES). This strategy is crucial for communities as it aims to provide affordable and sustainable heating solutions, reduce energy consumption and alleviate fuel poverty. LHEES can help to create jobs in the green sector, improve health and wellbeing, and contribute to achieving net zero – thus ultimately benefitting the local economy and wider environment. NPF4 will help to guide the location of new housing, transport links and infrastructure, ensuring that communities have access to the services they need whilst enhancing the environment and meeting net zero targets. NPF4 introduces the concept of Local Place Plans (LPPs) which are community-led plans that provide a framework for shaping the future of local places. LPPs are an essential tool for engaging with communities and fostering local democracy, ensuring that Moray’s towns and villages are designed with the people who live there in mind. The Council’s Hydrogen Strategy seeks to encourage a local supply chain for hydrogen production and use, providing job opportunities and economic benefits for the region. Using green hydrogen as a fuel for transport, heating and industrial processes it likely to be essential for cutting Moray’s regional carbon emissions (Case Study 6). 3.8 External influence Page 181
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Moray Climate Action Network (Moray CAN), which is hosted by tsiMORAY, is a collaborative initiative funded by the Scottish Government as a designated climate hub. The network facilitates knowledge exchange, project collaboration, and commissioning opportunities, aiming to address gaps in climate action and build upon existing efforts within the community. The Council is a member of Moray CAN and contributes support and expertise as well as benefitting from taking a collaborative approach to climate engagement. In 2023-24 Moray CAN distributed £25,900 in community grants to 19 projects that delivered action on climate change, community wellbeing and sustainability. 38 Climate Change Plan and Route Map to Net Zero 2024 update Case study 6: Moray hydrogen stakeholder workshop Over 100 representatives from 75 organisations convened at a two-day workshop in Elgin to explore opportunities in the hydrogen sector. The now annual event, co-organised by Hydrogen Scotland, Moray Council and HIE, highlighted Moray's potential for green hydrogen production. The Council’s Hydrogen Strategy aims to leverage the region's abundant renewable resources to produce clean hydrogen by creating a local supply chain. Discussions at the workshop explored how this green hydrogen can be used by local industries, particularly distilleries seeking to decarbonise their operations. By fostering collaboration between public and private sectors, and through production of its regional hydrogen strategy, the Council has been successful in having Moray recognised by the Scottish Government as a ‘hydrogen hub’ within its strategic plans. This will not only benefit the environment, but also create economic opportunities in green hydrogen production, storage, and distribution. Page 182
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Outcomes Actions include: 3.8.2 Action areas 39Climate Change Plan and Route Map to Net Zero 2024 update Develop skills and the economy Enabling the community to understand and take action on climate change Increasing provision of relevant skills and knowledge for a greener economy to support delivery of the Moray Apprenticeship Strategy Supporting the planning and delivery of awareness raising events for businesses to transition to a green economy Joining support networks to assist the progress of climate change action Consulting community groups and residents about climate action and delivering the Moray Climate Change Engagement Strategy Supporting the work of Moray CAN Engaging with communities to facilitate renewable energy projects Promoting Moray-specific climate emergency training for community groups and organisations Promoting the Active Travel Strategy Delivering the LHEES programme Continuing the Energy Efficiency Scotland: Area Based Scheme (EES: ABS) Delivering the Moray Hydrogen Strategy Outcomes Actions include: Implementing NPF4 policies relating to the climate and nature crises. Updated the Council’s Climate Change Strategy and contributing to a Moray- wide climate strategy Developing a Regional Spatial Strategy Delivering the new Forest and Woodland Strategy, Food Growing Strategy and Open Space Strategy Developing 20-minute neighbourhood concepts for Moray’s main towns and embedding within the next Local Development Plan Promoting and supporting brownfield over greenfield development Providing sustainability guidance to support Moray Growth Deal projects Implementing and reviewing carbon guidance for planning applications in line with NPF4 Monitoring and reporting of area-wide carbon emissions and actions Strategic planning which reflects the climate and nature emergency Page 183
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4.1 Reducing carbon emissions The Council currently faces a significant challenge in meeting its carbon reduction targets, both locally and nationally. Existing efforts will need to be coupled with further action if the 2030 net zero target is to be met. The current pathway of recorded emissions is a projection created using the baseline and other known emissions data. It shows how recorded emissions may change over time when considering the Council’s pre-planned actions. Only activities which are highly likely are accounted for within this projection. This pathway highlights the increase in emissions as a result of the Council’s services returning towards a ‘business as usual’ approach following the pandemic. Notwithstanding that, the overall trend remains that emissions continue to reduce from the baseline value to a level where a carbon sequestration scheme may be used to offset any remaining emissions in the future (Figure 12). In this figure, annual emissions are divided into five categories (Table 2). 40 Climate Change Plan and Route Map to Net Zero 2024 update 4. Where are we going Category Operating emissions Waste Building electricity Transport Building heat Description Emissions generated by the council through its day-to-day work. These consist of emissions that the council can control and influence. These are recorded in the annual greenhouse gas emissions reporting. Emissions from dealing with municipal and industrial-level waste. These are recorded in the annual greenhouse gas emissions reporting. Emissions from electricity use in council buildings. These are recorded in the annual greenhouse gas emissions reporting. Emissions from the operation of the Council’s fleet vehicles and vessels. These are recorded in the annual greenhouse gas emissions reporting. Emissions from heating of council buildings. These are recorded in the annual greenhouse gas emissions reporting. Table 2. Explanation of emissions categories used in carbon emission reporting. Page 184
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The current pathway aims to find a compromise between speed, technological limitations and funding. Whilst there are likely to be budgetary restrictions, this pathway avoids late adoption of technology and measures. This is to reduce carbon emissions and also because demand could impact on the cost of supply as the 2045 deadline approaches and public and private sectors are potentially legislated to take action. A balanced approach to the implementation of measures is more likely to benefit from reducing costs of measures as the scaling up of production reduces costs. This could also allow planned solutions to align with national infrastructure investment. For example, vehicles could continue to transition to zero carbon using batteries, or hydrogen could become more dominant if electricity distribution networks are unable to cope with the electrification of both heat and transport. The calculations for the current pathway account for: Internal factors: Known internal changes that will impact on emissions, e.g. confirmed waste management change. External factors: Known external changes that will impact on emissions, e.g. ongoing decarbonisation of the national grid. Population change: Annual changes in population, based on the 2018 Scottish Sub-National Populations Projections for Moray, which may impact future emissions. 41Climate Change Plan and Route Map to Net Zero 2024 updatePage 185
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42 Climate Change Plan and Route Map to Net Zero 2024 update Figure 12. Current pathway of recorded carbon emissions from baseline date to 2030. Figures from 2023 onwards are forecast estimates and denoted by a lighter colour. Page 186
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Concerns Progress on carbon emissions reduction has been restricted. There are several reasons for this: Services within the Council increasingly lack the resources or expertise needed to develop and manage effective carbon and cost reduction projects, and/or secure external funding; A lack of shared ownership, leadership and collaboration across services together with competing priorities has created a situation where climate change is often regarded as a separate issue, rather than an opportunity which can be integrated into existing work – creating efficiencies; Mixed understanding of climate change at all levels within the Council can hinder buy-in, proactive action and sustainable development; and Some decisions taken by the Council have contributed to a delay in carbon emissions reduction. For example, the Council’s new fleet replacement strategy which delayed uptake of low emission vehicles due to immature technology and funding constraints. The upcoming update to the Climate Change Strategy presents an opportunity to reassess the Council’s approach and to begin addressing these issues, as well as to better embed climate and sustainable development within transformation plans. To inform a robust and impactful updated strategy, the Council needs to address several key issues and decide on its net zero targets. These decisions will lay the groundwork for a cohesive approach that delivers on the Council’s aspirations. 43Climate Change Plan and Route Map to Net Zero 2024 update Net zero must be budgeted for and taken into consideration in the pace of decision making around the renovation and rationalisation of the council building stock. This will enable the production of accurate estimates of financial costs and emissions reductions which will assist future planning. Deciding on the level of commitment to renewable energy projects is crucial. Exploring options like solar panels will help to reduce reliance on fossil fuels which are rising in price and contribute to significant emissions reductions. Agreeing a delivery model for carbon offsetting through natural capital enhancements presents an opportunity to invest in a variety of benefits for communities whilst reducing emissions. Identifying and allocating sufficient resources is essential for effective project management. This will ensure the successful implementation of carbon reduction initiatives. The difficulty and expense of converting buildings to reach net zero means that if further delays are experienced then emissions relating to buildings may not reduce sufficiently to meet targets. Therefore, greater emphasis on other parts of council operations reaching net zero faster, and increased carbon sequestration, may have to be explored if the pace of change continues to be insufficient. If all information gathering and decisions on future change are made by 2025 then a more accurate assumption can be made for residual emissions and the need for carbon sequestration. This will provide a decision point milestone for the council to reassess the commitment to the 2030 net zero target knowing the full costs and carbon sequestration requirements. Page 187
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Benefits and threats associated with current pathway In summary, the benefits of threats of the current pathway are: 44 Climate Change Plan and Route Map to Net Zero 2024 update 4.2 Restoring nature The Council's commitment to nature conservation has grown, but future success hinges on securing new funding sources and integrating biodiversity efforts with other initiatives. While expected statutory targets and the uncertainty of dedicated funding pose challenges, the Council plans to address them through a new Moray Biodiversity Strategy, improved staff training, and a focus on community engagement and evidence-based actions. The level of nature positive activity taken by the Council has been steadily increasing since the 2018-20 Biodiversity Duty report. The Scottish Government is expected to introduce statutory targets for nature restoration, bringing further responsibilities for local authorities. In terms of land management, improvements largely relied on dedicated funding through the Scottish Government’s Nature Restoration Fund, which runs until 2025/26. There is a risk that progress will slow if this funding stream ends, so alternative sources including private finance and embedding biodiversity within other projects such as the Moray Growth Deal and town centre improvements will be essential. As the Council’s natural capital study recommends, carbon sequestration should also be delivered in conjunction with biodiversity enhancement. Benefits Reflects the path the council is currently pursuing. Does not commit the council to altering the timing or type of planned expenditure. Most statutory deadlines are met. Threats Carbon sequestration will be required to reach net zero by 2030 as decarbonisation of estate and fleet will not be complete. Uncertainty around timescale for building improvement relating to carbon emissions. Many of the current commitments to reduce carbon emissions are currently unfunded. The Council requires to use its full breadth of powers to raise/attract funding, apply for government and other external funding, and lobby for further powers or financial assistance as may be required. Some statutory deadlines are not met. Page 188
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A Moray Biodiversity Strategy will be produced alongside the Climate Change Strategy update, focussing on achievable actions that are balanced with the urgency of reversing biodiversity loss. Engaging communities, and increasing opportunities for young people to engage with nature to bring additional benefits should be a priority and support the sourcing of funding. Actions and improvements should be evidence led, using national guidance and measurements as they are available. Statutory responsibilities for biodiversity have significantly increased through the introduction of NPF4, introducing additional work that is currently being met within existing staff capacity. Improved guidance and training is being developed to support the planning service to deliver positive effects for biodiversity in Moray. Ecological expertise will be drawn upon for larger and more complex developments. Going forward there should be an emphasis on proper biodiversity assessment of all developments, resulting in specific plans that enhance biodiversity and help link to the wider environment. A significant challenge over the coming years will be the delivery of a Moray Nature Network, which is a requirement of the LDP. While the Scottish Government has funded mapping and engagement, delivery and monitoring will require additional resources. This should delivered through an integrated approach, bringing wider community benefits while also supporting climate adaptation and mitigation. 45Climate Change Plan and Route Map to Net Zero 2024 updatePage 189
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4.3 Being ready for climate impacts There remains a critical gap in the Council’s readiness for the impacts of climate change. A recent assessment revealed a low level of maturity of response to climate adaptation and understanding of the Council's vulnerability to climate impacts and the potential financial implications. The Council’s first adaptation benchmarking exercise highlights the significant shift required to understand and recognise where it is vulnerable to the impacts of climate change, and what the financial implications may be going forward. An adaptation plan will be embedded within the next Climate Change Strategy Update. This should be evidence led and risk informed, the scope of which will be subject to available resources. The planned programme of engagement for the strategy update will be an opportunity to both gather new information and increase understanding of climate risk. Until a climate risk assessment has been undertaken the cost to the Council of climate impacts remain unknown, however as the Scottish Fiscal Commission have outlined, ‘the implications of not investing in adaptation would be harmful in the long term and could lead to even more pressure on future Scottish Budgets’. 46 Climate Change Plan and Route Map to Net Zero 2024 update The draft third Scottish National Adaptation Programme (SNAP 3) places greater emphasis on the interconnection between climate and nature, drawing close links to the delivery of the Scottish Biodiversity Strategy and National Planning Framework 4. As SNAP 3 is expected to be published by the end of 2024, the Council’s climate change strategy update will be able to integrate the planned national outcomes with local needs, as well as develop measures that align with the national monitoring framework. Page 190
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The Council recognises that further action will be required if its 2030 net zero target is to be met. Though progress has been made, current efforts fall short of local and national targets. Whilst challenges lay ahead, there is significant scope to turn these into opportunities for the Council and the wider community. The upcoming Climate Change Strategy update presents a critical opportunity to address these challenges. It remains feasible for the Council to achieve net zero if key decisions on building decarbonisation and rationalisation of the estate are taken, and progress is made to enhance solar provision on buildings, consistently improve fleet vehicles and reduce waste in the future. There is also a need to develop a suitable delivery model for natural capital enhancements which will provide any necessary carbon offsetting opportunities. Securing external funding will be essential if these aspirations are to be met. Success will require a combination of strong leadership, collaboration across services, knowledge building and adequate resourcing to realise opportunities. 47Climate Change Plan and Route Map to Net Zero 2024 update Assuming that all necessary decisions are made and information is gathered by 2025, this will enable the development of robust pathways that accurately project residual emissions and the level of carbon sequestration required from 2030 onwards. With this information, elected members can reassess the feasibility of the 2030 net zero target. They will have a clear picture of the estimated costs, the level of carbon sequestration required, and the impact on other aspects of the Council's climate and nature response. This will enable a well-informed decision on whether to maintain the 2030 target or revise it to achieve a more cohesive and sustainable approach. 5. Conclusion Page 191
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Glossary 48 Climate Change Plan and Route Map to Net Zero 2024 update active travel adaptation baseline biodiversity carbon Journeys made by modes of transport that are fully or partially people-powered, irrespective of the purpose of the journey. It includes walking, people using wheelchairs, cycling (including e-bikes) to name a few. Adjustments in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities. Historical period specified for the purpose of comparing greenhouse gas emissions. The variability among living organisms from all sources, including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems (UN 1992). Umbrella term used to describe all of the greenhouse gases. carbon dioxide (CO2) carbon neutrality carbon sequestration circular economy climate action climate change climate emergency A naturally occurring gas, CO2 is also a by- product of burning fossil fuels (such as oil, gas and coal), of burning biomass, of land-use changes and of industrial processes (e.g., cement production). It is the principal anthropogenic greenhouse gas that affects the Earth’s radiative balance. See net zero. A process by which carbon dioxide is removed from the atmosphere and held in solid or liquid form. A circular economy is one in which resources are kept in use for as long as possible. Efforts taken to mitigate and adapt to the impacts of climate change. The state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties and that persists for an extended period, typically decades or longer. A situation in which urgent action is required to reduce or halt climate change and avoid potentially irreversible environmental damage resulting from it. Page 192
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49Climate Change Plan and Route Map to Net Zero 2024 update co-benefits direct emissions drought excess deaths flood green jobs The positive effects that a policy or measure aimed at one objective might have on other objectives, thereby increasing the total benefits for society or the environment. Co- benefits are often subject to uncertainty and depend on local circumstances and implementation practices, among other factors. Co-benefits are also referred to as ancillary benefits. Emissions directly under the organisation's control. A prolonged period of abnormally low rainfall, leading to a shortage of water. The number of deaths from all causes during a crisis above and beyond what we would have expected to see under 'normal' conditions. The overflowing of the normal confines of a stream or other body of water, or the accumulation of water over areas that are not normally submerged. Floods include river (fluvial) floods, flash floods, urban floods, pluvial floods, sewer floods and coastal floods. Employment opportunities that contribute to environmental sustainability. green recovery greenhouse gas emissions heatwave indirect emissions insetting IPCC The transition to a more sustainable and resilient economy following a crisis, such as the Covid-19 pandemic, that prioritises investment in low carbon technologies, sustainable infrastructure and job creation in environmentally friendly sectors. Any gas that contributes to the greenhouse effect by absorbing infrared radiation in the atmosphere. A heatwave is an extended period of hot weather relative to the expected conditions of the area at that time of year. In Moray, a heatwave event is defined a at least three consecutive days with daily maximum temperatures meeting or exceeding 25°C. Emissions outside the organisation's control but over which it has an influence. The process of offsetting carbon emissions by sequestering carbon within the organisation's own landholdings. Intergovernmental Panel on Climate Change. A scientific body established by the United Nations to provide policymakers with regular assessments of the state of climate science and the potential impacts of climate change, as well as strategies for mitigation and adaptation. Page 193
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50 Climate Change Plan and Route Map to Net Zero 2024 update Just transition Mitigation Nature emergency Nature network Net zero Designing policies in a way that ensures the benefits of climate action are shared widely, while the costs do not unfairly burden those least able to pay, or whose livelihoods are directly or indirectly at risk as the economy shifts and changes. A human intervention to reduce emissions or enhance the sinks of greenhouse gases. The rapidly worsening state of the natural world, including the loss of biodiversity, ecosystem degradation, and the threat of ecological collapse, caused by human activities such as habitat destruction, pollution and climate change. A network which connects together nature- rich sites, including restoration areas and other environmental projects, through a series of areas of suitable habitat, habitat corridors, and stepping-stones. Net zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period. Offsetting Renewable energy Sustainable development tCO2e Wildfire The practice of compensating for carbon emissions by funding projects that reduce greenhouse gas emissions outside of the organisation's own landholdings. Energy derived from natural sources that are replenished at a higher rate than they are consumed. Meeting the needs of the present without compromising the ability of future generations to meet their own needs. Tonnes of carbon dioxide equivalent. A metric measure used to compare the emissions from various greenhouse gases on the basis of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential. Any uncontrolled vegetation fire which requires a decision, or action, regarding suppression. Page 194
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51Climate Change Plan and Route Map to Net Zero 2024 updatePage 195
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REPORT TO: MORAY COUNCIL ON 25 SEPTEMBER 2024 SUBJECT: BUS REVOLUTION PHASE 2 (SERVICE EXPANSION PLAN) BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To inform the Council of operational plans and revenue requirements supporting the incremental expansion of m.connect services in Moray for the second Phase of the Bus Revolution project plan within the wider Moray Growth Deal programme. 1.2 This report is submitted to Council in terms of Section III (F) (18) to exercise the function of the Council in relation to public passenger transport under the Transport Act 1985. 2. RECOMMENDATION 2.1 It is recommended that Council: (i) approve m.connect service amendments, changes, expansions of new services that form the operational plans for phase 2 of project delivery Moray wide, as set out in paragraph 5; and (ii) review and approve the fares proposals and revenue requirements, noting the cost neutrality of the changes, to be implemented from 1 April 2025, to deliver the operational plans as set out in this report. 3. BACKGROUND 3.1 The Bus Revolution project is part of the Moray Growth Deal and aims to improve public transport connectivity across Moray by providing additional public transport services (On-demand and Timetabled services) to improve access and use of public transport, helping residents of Moray connect with work, education and recreational / welfare facilities. Two key elements of the project were the introduction of app-based technology (for improved bookings and journey management) and Electric Vehicles (EV), reducing carbon emissions to create environmentally sustainable public transport. Item 15. Page 197
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3.2 There are five key funding phases throughout the 10-year span of the project life cycle, each providing the opportunity to add vehicle and staff resource to increase public transport service provision across Moray. The long-term aim being to provide public bus services seven days a week from early morning to late evening. This will be achieved through incremental expansion aligned to project funding phases, enabling deliverable growth. 3.3 Phase one of project delivery launched on the 2 May 2023 and built on the previous Dial M for Moray demand response service (re-branded m.connect), which extended the hours of operation of the service in Buckie, Keith and Speyside (formally 0915-1430hrs Mon-Fri to 0630-2030hrs Mon-Fri). The project also introduced a timetabled service (309), linking Cullen, Buckie and Keith to the rail network, whilst also enhancing an existing service in Speyside (366) that served Aberlour, Knockando and Archiestown, to improve and increase connectivity into Elgin. 3.4 Implementation of a real-time booking and management system (including the release of a passenger app for customers to plan, book, pay and manage their journeys) offered greater operational management of the on-demand service, making efficiencies in route planning, booking and seating availability whilst offering detailed analytics on current passenger trends, forecasting efficiencies through simulation of any proposed changes to service structure. 3.5 The introduction of EV’s within the vehicle fleet has evidenced environmental benefits through reduced carbon emissions but has also created a number of challenges for the operational team relating to warranty and technician support to retain the vehicles on the road for any prolonged period of time. Collaboration with Scottish government and UK suppliers, hopes to address these issues for the medium- and longer-term betterment of project deliverables. 3.6 Lastly, a revised zonal fare structure was cascaded across all m.connect services. The fares structure (approved at ED&I Committee on 6 September 2022, para 8 of the minute refers) aimed to simplify fares which could be marketed effectively, comparable to what commercial operators charged, offering value for money on longer journeys whilst mitigating but not fully offsetting operational costs. 4. PROGRESS TO DATE 4.1 The first year of m.connect and the additional service provision introduced through the project, has experienced good success to date, evidenced through the project’s investment objectives, as noted below: 4.2 Investment objective 1 was to Increase public transport passenger journeys by 30,000 per annum by 2030. The first year of m.connect operations generated in excess of an additional 9000 passenger journeys, surpassing the annual growth target by 66% (Targeting an additional 4286 passenger journey for 2023-24). Page 198
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4.3 Positive progress has also been made for Investment objective 2: To reduce the environmental impact of transport in the area by 30t CO2e p.a. by 2030. Again, the service has surpassed the annual C02e savings target for emission reductions (4.3tC02e reduction target for FY 23-24), creating a total saving of 11.6 tC02e in year one. 4.4 Investment Objective 3: 20% reduction in number of people facing transport barriers to employment, education or recreation by 2030. A complex objective to develop data to monitor and evidence. Surveys, collaboration with Moray Pathways, developing the Young Workforce (DYW) in Moray and the Department of Work & Pensions (DWP) have all helped benchmark access and use of transport in Moray to date. Event transport support to the Whisky Festival and the Findhorn Bay Festival has evidenced improved connectivity to access these events through public transport. Something that the project intends to repeat and grow in 2025 and beyond. 4.5 One real success story has been the project’s impact on local employment, creating 10 additional driver posts and one grade 4 supervisor position. It is estimated that the project will create an additional 21 positions based on the assumptions set out in the FBC. 4.6 Collaborative work with the Department for Work and Pensions (DWP) has also generated opportunities for those currently in unemployment and seeking opportunities within the local workforce. The project and DWP have created an upskilling pathway (funded through DWP) for job seekers looking to develop driving skills to improve career and job choice opportunities. Additional skills training included customer service and interview skills training. 4.7 On completion of the upskilling course, the Public Transport Unit (PTU) assist with mock interviews, assessing transferable skills and general fitness for role and personal attributes. On completion of the package job seekers are then signposted to open vacancies within Moray Council, in particular, roles within the PTU. Job seekers / candidates then process through the safer recruitment process along with other candidates. 4.8 To date the PTU have benefited from this process by employing 5 candidates through the upskilling pathway, with future candidates in the pipeline awaiting opportunity. Not only has this work benefited the PTU, but it has also benefited the wider transport sector, where qualified driver shortages are impacting on local and national transport service providers. 5. PHASE 2 PLANS 5.1 As well as making efficiencies within the current m.connect network for the second phase of project delivery, the project team built a comprehensive understanding of customer need (Appendix 1 to this report), which helped inform and develop a service options appraisal package for project board to review against project objective 3 (evidence a 20% reduction in number of people facing transport barriers to employment, education or recreation by 2030). Page 199
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5.2 Activities to evidence need included: • Annual transport survey response and analysis • Engagement with Moray Pathways, department of Work and pensions (DWP), Developing the Young Workforce Moray (DYW), Early years education groups and Moray Chamber of Commerce. • Community engagement feedback from Elgin, Lossiemouth, Hopeman, Burghead, Kinloss, Findhorn and Forres communities. • Annual bus network review (Moray) - Understanding gaps, weaknesses in current network provision, whilst assessing service changes from commercial suppliers • Detailed analysis of m.connect services, reviewing service performance, app performance and use, demand profiles, ride sharing, trip optimisation and vehicle utilisation opportunities, booking success rates and missed demand rates. 5.3 All this work helped develop an option appraisal package that allowed the project board to assess the merits and benefits of each option. Mindful of revenue budget implications, the board collectively agreed on the following package of works to be presented to the committee for approval, inclusive of revenue requirements. The package includes amendments to existing services in order to achieve best value, including the recommended removal of a number of services which are not demonstrating an effective use of resource. In these instances, the revised proposals incorporate alternative new/amended services which meet the evidenced demand in a more inclusive and efficient way. Following this meeting there will be clear communication with communities where it is proposed to amend the service provision, setting out the reasons why some services are being removed and the benefits of the alternative services for both any existing customers impacted and for new and additional customers. Service Amendments / Cancellations: Item / Service Change / Action Rationale Service 309 Timetable change 0515-2030 to 0715-2030 First two service rotations carry no passengers. Service 366 Redesign to Service 368 Main corridor into Elgin duplicated with stagecoach service. Current passenger journeys can’t sustain the level of service provision on offer. Service 362 End External contract. Current patronage included in new service design Cost and service efficiency. Service 363 End External contract. Current patronage included in new service design Cost and service efficiency. Service 338 End and include in Service redesign. Current patronage included in new service design Cost and service efficiency. Service 365 End and include in Service redesign. Current patronage Cost and service efficiency. Page 200
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Item / Service Change / Action Rationale included in new service design m.connect Speyside Remove bus 3 from network from 1200-1400hrs Service efficiency, vehicle underutilised – current demand being met through Bus 1,2 & 4. m.connect Forres End External contract. Deliver internally Cost and service efficiency. Deliver service internally. m.connect Forres (Saturday) End External contract. Deliver internally Cost and service efficiency. Deliver service internally. Amendments, expansions and new services to be introduced: Item / Service Change / Action Rationale Amendments / Expansions Service 334 Extending route into Elgin, connecting Larch court, Hamilton Gardens, Morriston Road to Dr Gray’s Hospital, Tesco and Elgin Town Centre. Hourly service from 0725 to 1805 Mon-Fri. On Demand service in Elgin has huge un-met demand for journeys in central Elgin that the existing service cannot accommodate. By extending the 334- service routing into Elgin, the un-met demand will be accommodated and open up additional capacity within the on-demand service to met demand out with central Elgin. Service 691 m.connect Speyside on-demand Add drivers hours to cover 1645-2030hrs Mon-Fri Similar situation to Buckie. Charging time requirements impacting on service availability. Additional drivers hours allocated due to geography of Speyside and length of journeys requested. Weekend services Service 694 m.connect Buckie on- demand Introduce a Saturday on- demand service covering 0900-1700hrs. Single vehicle operation Evidence of expediential growth in customers and journeys during phase 1 delivery. Good location to introduce Saturday service. Community council and customer feedback has also indicated public interest / need for weekend service provision. Service 691 m.connect Speyside on-demand Introduce a Saturday on- demand service covering 1000-2200hrs. Two vehicle operation Providing Connectivity to core network public bus service provision to rural communities, whilst offering connectivity local communities to hospitality venues beyond 1700hrs. Service 690 m.connect Forres on-demand Currently a contracted provision. Deliver service internally covering 0900- 1700hrs on Saturdays only, retaining existing provision More cost effective to deliver service internally than contract out. Page 201
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New Services Service 333 Provide coastal communities of Burghead-Hopeman- Lossiemouth connecting service every 70mins from 0750-1800hrs Mon-Fri Service to connect coastal communities to health and welfare facilities. Affordable transport to access pre and after school care provision (Earthtime – established need), whilst offering connectivity to local employment opportunities. Timetable information (Appendix 2 to this report). Service 367 Formed to serve existing demand evidenced on the 363 and 366 services. Connecting Communities of Auchbreck, Knockando and Archieston to the main bus network for onward travel to Elgin / Dufftown (Service 36) 0755-1945 Mon-Fri A re-designed service accommodating existing demand, whilst offering lifeline connectivity to communities in Auchbreck, Glenlivet and Ballindaloch to the main bus network. Reduces duplication on the main corridor into Elgin with stagecoach services whilst reducing operational costs. Timetable information (Appendix 2 to this report). Service 368 Formed to serve existing demand evidenced on the 362 and 365 services. Connecting Communities of Tomintoul, Tomnavoulin and Auchbreck to Dufftown and the main bus network for onward travel to Elgin(Service 36) / Keith. 0645-1950 Mon-Fri A re-designed service accommodating existing demand from the 362, 365 and m.connect on-demand service. On-demand service currently accommodating journeys from Dufftown to Keith between 0900-1100hrs. Displace those journeys onto service route to free up capacity within the on- demand service to accommodate other demand in Speyside. 368 offers routine connection to Elgin via 36 service further reducing duplication. Timetable information (Appendix 2 to this report). Service 690 m.connect Forres on-demand Currently a contracted provision. Deliver service internally covering 0800- 1700hrs Mon-Fri retaining existing provision More cost effective to deliver service internally than contract out. 5.4 Forres – Kinloss/Findhorn Bus Services: Further to the decision of Council at the meeting on 13 August 2024 (para 11 of the draft minute refers), consideration was given to the Council introducing a timetabled service Page 202
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between Forres and Kinloss/Findhorn then onward to Burghead via College of Roseisle, linking in to the proposed timetabled service along the Moray coastline between Burghead and Lossiemouth. 5.5 To achieve this on a commensurate level with the service withdrawn by Stagecoach, would create a net additional cost to the Council of £32k per annum. It has not been possible to incorporate this into the Phase 2 proposals for Bus Revolution without either creating a budget pressure or removing proposals that have arisen directly in line with the expansion of service provision that delivers the project aims and objectives, and connects in with the underlying community engagement. The clearly expressed community aspirations regarding the Forres – Kinloss – Burghead service have been driven by the commercial decision of Stagecoach rather than the position of the underlying network. 5.6 As agreed at the meeting, the Council Leader has written to Stagecoach Bluebird, the Commanding Officer of 39 Engineer Regiment and the Station Commander of RAF Lossiemouth. A meeting has been arranged with the Commanding Officer of 39 Engineer Regiment to take place in mid-October. The MD of Stagecoach Bluebird has replied to the Council Leader, setting out the reasons why Stagecoach are unable to provide any financial support. This means that at this point in time discussions around potential funding sources for this service have not yet been concluded. As such, it is recommended that the Council does not take forward a timetabled service at this point in time, but that this will be revisited should there be identifiable funding sources to bridge the budget gap. 5.7 Summary of Service Proposals: The proposals set out above create a step change in network provision across Moray in line with the project objectives to grow provision and use of the m.connect services. Whilst this does not necessarily meet all expressed need for service expansion across Moray, it creates a positive change on what is assessed to be a cost neutral basis. 5.8 Vehicles: In order to deliver the operational plan, and in line with the Growth Deal funding profile, the project board have approved the procurement of an additional 4 vehicles, 3 to be operationally active and 1 to bolster the operational resilience of the fleet to cover planned and unplanned maintenance periods. Vehicle orders were placed in early August 2024 to ensure build time and delivery was achieved by end of quarter 4 FY2024-25. 5.9 In addition, EV charging infrastructure supporting m.connect services will also expand, seeing 2 additional units installed within the school estates in Forres and Lossiemouth respectively (Pilmuir Primary School & Hythehill Primary School). Work is ongoing to ensure installation and commissioning of units are completed by the end of quarter 3 FY2024-25. Page 203
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Fares 5.10 The current fares base is as follows: Zone Single Return 10 journey 1 £3.00 £5.00 £20.00 2 £5.50 £9.00* £36.00 3 £7.50 £9.00* £36.00 4 – All day travel £9.00* £9.00* £36.00 *All £9.00 tickets qualify for all day travel across m.connect services 5.11 A review of FY2023-24 ticket sales was completed to help inform a full financial picture if fare price point increases of either £0.50 or £1.00 were applied. 5.12 Analysis of ticket sales generated in FY2023-24 evidenced an 8.4% increase in sales value for £0.50 increases, whilst a 17.4% increase in sales value occurred when a £1.00 increase was applied. FY2023-24 sales broken down below to show impact of changes: FY23-24 Existing Fare Prices £0.50p Price Point Rise £1.00p Price Point Rise Base Income £129,724 Project Income £30,891 Total Income £160,615 £175,351 £194,361 5.13 86% of the existing customer base use National Travel Entitlement Cards (NEC) to pay for journeys taken on m.connect service, with only a small percentage of customers paying cash at present. This coupled with high volumes (over 50%) of short distance journeys at £3.00, has adversely affected income generated to date. 5.14 The fare increase options proposed are modest and retain value for money when compared to commercial market fares for similar type journeys. Fares have increased in recent years reflecting the higher cost inflation of the last 2 years. First Glasgow Single fares £2.00 (1 stage), £2.95, £6.35. £2.95 is the main Glasgow City fare and £6.35 anywhere outside city fare. Glasgow to Hamilton/Helensburgh, £6.35. First Glasgow Day Tickets £5.60 in Glasgow City, £7.50 full network. First Aberdeen Single Fare £2.00 Day Ticket £5.30 Lothian Single fare £2.00, Day Ticket £5.00 but capped at £4.80 on “TapTap Cap”. McGills Glasgow Single Fare £5.50 also doubles as Day Saver. Evening Saver £4.45 McGills Network Inverclyde, Renfrewshire and Glasgow Day Saver £8.75, Evening Saver £7.10 McGills Midland Bluebird £5.95 Single and Day Saver. Evening Saver Page 204
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Stirling and Clackmannanshire £5.00 McGills Midland Bluebird Falkirk - £5.95 Single and Day saver. Evening Saver £5.00 Xplore Dundee Short Hop single £2.40 (1 fare stage), Standard Single £2.90. Day Saver £4.40 Evening Saver £3.50 Stagecoach Bluebird Elgin single £2.70 Elgin Day Rider is £4.60. Travelling further afield as an example, a single Elgin to Dufftown is £8.40 and a Moray Day Rider is £11.70 5.15 The proposed m.connect fare price points would change as follows: Fare Price points with £0.50 applied Zone Single Return 10 journey 1 £3.50 £6.00 £23.00 2 £6.00 £9.00 £39.00 3 £8.00 £9.00 £39.00 4 – All day travel £9.00 £9.00 £39.00 *All £9.00 tickets qualify for all day travel across m.connect services Fare Price points with £1.00 applied Zone Single Return 10 journey 1 £4.00 £7.00 £25.00 2 £6.50 £10.00 £41.00 3 £8.50 £10.00 £41.00 4 – All day travel £10.00 £10.00 £41.00 *All £10.00 tickets qualify for all day travel across m.connect services 5.16 The current impact assessment on fares price point increases concluded that, due to the high volume of NEC users within the service, impact to personal finances is negligible. In addition, there will be retention of favourable multi journey tickets for fare paying passengers, including the 10 journey ticket and the £9 / £10 all day travel ticket, ensuring that fare paying passengers are not disadvantaged by any increases approved by this committee. 5.17 It is therefore recommended that the committee approve a £1.00 fare increase, providing improved income generation to offset operational costs and reduce subsidy per passenger for existing and new services introduced for phase 2 operational plans. 6. FINANCIAL IMPACT 6.1 These percentage increases have been applied to forecasted and existing income to formulate a full financial assessment of existing and proposed service developments contained within the phase 2 operational plan. Below sets out the detail for review. The current costs are based on 23/24 as this is the most up to date full year data. Page 205
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Costs Current cost of operation 25/26 Cost inclusive of Phase 2 Baseline £572,786 £393,543 Project £358,179 £674,889 Total £930,965 £1,068,432 Income Current Income 25/26 Income inclusive of Phase 2 Baseline farebox Income £129,724 £129,724 Baseline Network Support Grant £27,057 £24,468 Project Farebox Income £85,815* £125,326** Project Network Support Grant £40,000 £68,865 Developer Contributions £0 £25,000 Total £282,596 £373,383 Net Position pre-fares adjustment £648,369 £695,049 *Forecasted income for FY 2024-25 ** FY24-25 Income plus anticipated income generated from additional services. 6.2 On the basis of the recommended £1.00 uplift to fares, the table below sets out the revised projected income for the project, and a revised net position. Costs Current cost of operation 25/26 Cost inclusive of Phase 2 Baseline £572,786 £393,543 Project £358,179 £674,889 Total £930,965 £1,068,432 Income Current Income uplifted for revised fares 25/26 Income inclusive of Phase 2 and revised fares Baseline farebox Income £129,724 £129,724 Project Farebox Income £85,815* £125,326** Total Farebox Income £215,539 £255,050 Revised Total with uplift applied £299,428 Baseline Network Support Grant £27,057 £24,468 Project Network Support Grant £40,000 £68,865 Developer Contributions £0 £25,000 Total £282,596 £417,761 Net Position including fares adjustment £648,369 £650,671 Page 206
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*Forecasted income for FY 2024-25 ** FY24-25 Income plus anticipated income generated from additional services. 6.3 It is intended, that on approval of the operational plans, revenue and fares uplift approval, service implementation plans would be created and activated to deliver service in early quarter one in FY 2025-26. 7. PASSENGER JOURNEY AND INCOME MODELLING 7.1 Predicting passenger uplift through introduction of new services is notoriously difficult and attracts risk when using predicted figures to model income outcome, however, the table below shows predicted passenger journey outcomes for each of the services to be introduced and how the figure was generated that helped inform of financial impact on revenue modelling. • Timetable Income assumptions based on average ticket price x capacity carried in 2023-24 • On-Demand Income based on average ticket price x daily average passengers (PPH – Passenger per hour) carried in 2023-24. Service Predicted Passenger Journey Uplift Evaluation 333 Burghead – Hopeman – Lossiemouth 2,286 Based on an 8.5% capacity being used daily 334 Elgin Town extension 1,778 Based on a 6% capacity being used daily 367 Auchbreck – Knockando – Craigellachie – Aberlour 762 Existing journeys from service 363 and 366 368 Tomintoul – Auchbreck – Dufftown – Keith 563 Existing journeys from service 362 and 365 694 m.connect Buckie on-demand - Sat Service 357 Based on Speyside area passengers per hour 691 m.connect Speyside on-demand – additional evening resource 1,270 Based on Speyside area passengers per hour 691 m.connect Speyside on-demand - Sat Service 663 Based on Speyside area passengers per hour 7,679 additional passenger Journeys 7.2 Appendix 3 provides a detailed summary of the project financial position for end of year 1 (Financial Year 2023-24). Page 207
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8. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The proposals, which fit within the inclusive economic growth principles of the Growth Deal support the council’s priority for a growing and diverse economy, as well as supporting health and wellbeing through access to services. (b) Policy and Legal The proposed amendments fit within the Scottish Government’s transport policy priorities, and the objectives established in Moray’s Growth Deal. Bus services operated by the council are regulated through s19 and s22 permits and registration of services with the Traffic Commissioner. Future services may utilise the powers in the Transport (Scotland) Act 2019 which allow use of O Licensed operations, however, this statutory power has still to be enabled. Both s19 & s22 and O Licensed operations still require registration of local bus services, and the Traffic Commissioner holds the regulatory role in all these regards. (c) Financial implications The financial implications of the operational plan for the second phase of Bus Revolution are set out in the paragraphs above and have been prepared on a cost neutral basis. (d) Risk Implications The principal commercial and reputational risks have been evaluated as part of the Full Business Case along with routine financial monitoring and review. There are reputational risks around service developments / expansions that is not in line with community expectations, and this has been mitigated by detailed service analysis and community engagement activity as documented in para 3.6. Risks around growth in passenger journey and income assumptions will be monitored through the Project Board and routine service and financial performance monitoring and reporting. (e) Staffing Implications The expansion of additional services will require the recruitment of additional drivers / driver hours, which are included in the revenue request presented to Full Council committee for approval. (f) Property There are property implications relating to the installation of 2 additional charging units supporting service expansion. Work with Property services and design consultants have been ongoing to ensure that Design, procurement, siting, connections and metering arrangements of charging infrastructure is coordinated and delivered within existing council property and budget, minimising impact to project and operational activity. Page 208
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(g) Equalities/Socio Economic Impact The project aims to reduce inequalities through the provision of accessible and affordable transport options, particularly tackling barriers to employment. A full Equalities Impact Assessment has been carried out as part of the project. (h) Climate Change and Biodiversity Impacts The project has established objectives and measurements relating to a positive impact on the environment and a reduction in carbon emissions and supports the carbon statement contained within the Full Business Case. (i) Consultations The Depute Chief Executive (Economy, Environment and Finance), Head of Environmental and Commercial Services, Legal Services Manager, Chief Financial Officer, Community Support Unit Manager, Equalities Officer and Democratic Services Manager have been consulted and their comments incorporated into this report. 9. CONCLUSION 9.1 This report seeks approval for the operational plans supporting Phase 2 of Bus revolution project delivery, the revenue request supporting the operational plan and authority to uplift fares proportionate to an acceptable balance where operational cost is covered (but not in full) through income generated for ticket sales. Author of Report: Stevie Robertson Senior Project Officer (Bus Revolution) Background Papers: 20240925 Bus Revolution Phase 2 Appendix 1 20240925 Bus Revolution Phase 2 Appendix 2 20240925 Bus Revolution Phase 2 Appendix 3 Ref: SPMAN-524642768-1139 Page 209
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20240827 Full Committee Bus Revolution Phase 2 Appendix 1 Project Officer - Needs Appraisal Community Engagement Summary Event Dates - January 2024 Date Venue Time Attendance 1.01.2024 Forres Community Centre 1200-1600hrs 2 16.01.2024 Lossiemouth Community Centre 1800-2000hrs 1 18.01.2024 Elgin Library 1200-1600hrs 4 18.01.2024 Elgin Community Centre 1800-2000hrs 0 23.01.2024 Lossiemouth Community Centre 1800-2000hrs 0 24.01.2024 Elgin Community Centre 1800-2000hrs 0 25.01.2024 Rafford Village Hall 1130-1400hrs 12 26.01.2024 Elgin Library 1200-1600hrs 2 Total attendees 21 March 2024 Date Venue Time Attendance 19.03.2024 Hopeman Village Hall 1030-1230hrs 8 19.03.2024 Burghead Community Hall 1400-17000hrs 4 20.03.2024 Lossiemouth Community Centre 1000-1200hrs Cancelled 20.03.2024 Elgin Community Centre 1400-1600hrs Cancelled 21.03.2024 Findhorn Village Centre 1400-1600hrs 3 Item 15. Page 211
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22.03.2024 Lhanbryde Community Centre 1000-1200hrs Cancelled 26.03.2024 Kinloss Village Hall 0930-1130hrs 3 26.03.2024 Lossiemouth Community Centre 1800-2000hrs 0 27.03.2024 Elgin Library 1400-1600hrs 8 28.03.2024 Forres Community Centre 0900-1200hrs 9 Total attendees 35 Feedback from sessions: Forres: Town service to run later and into weekends Passenger App slow, sometimes does not work (unresponsive). Would like an edit trip function and a drop-down menu to select previous journeys rather than cancel a trip to re-book. Town service to operate earlier than 0840hrs to allow school children to access bus during poor weather conditions. Flip seats on new vehicle – unaware of button activation (driver to brief boarding public or provide information notice). Call centre response times up to 20mins to answer. Extend operating hours of the on-demand bus. Saturday service unreliable and always late (Maynes – Investigate and review) More information on the service – some still unaware of its existence and use. Leaflet drops for Community locations. Sunday service 1000-1500hrs or 0900-1700hrs Positive feedback on current m.connect service and established an m.connct champion with customer testimony on how the service has positively impacted their life. Request to explore the potential to support a walking festival and walking groups in general. Better connectivity to Dyke / Broadie – uses the service currently to get children to school, on occasion, cant get return journeys, but generally, service is excellent. Evening service Mon-Sat 1700-2300hrs Forres town centre to Lossiemouth 314 service to operate on Saturdays Establish a service route to link Findhorn-Kinloss-Forres Page 212
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Lossiemouth: The availability from groups to book journeys for attendees. Outreach to local groups to promote service (it is not known to all) social media does not reach everyone. After school clubs / care location could benefit from better and more cost effective transport provision – Earth time an established need for up to 15 children per day. Could increase capacity if transport links were robust and cost effective. Vulnerable adults struggling to access m.connect currently, lack of availability (due to high demand) and limited operating hours (currently 0900-1430hrs). Weekend service for coastal communities – 1000-1800hrs Better access to m.connect on-demand, not always getting an accepted journey, no availability (due to high demand in zone 1). Longer operating hours for m.connect ( community liked the idea of 0630-2030hrs) Saturday service 0900-2359hrs More m.connect during holiday periods i.e. Boxing day. Passenger app is slow and unresponsive at times (Investigate issue). Burghead and Hopeman: m.connect on-demand lack of availability lack of availability (due to high demand) and limited operating hours (currently 0900-1430hrs). On occasion, can get a partial journey, not always get a return. Better connectivity of coastal communities to Lossiemouth. Currently need to take the service bus from Burgead to Elgin to then get bus from Elgin to Lossiemouth….. over 1hr 40mins at best rather than the 15-20mins a direct journey would offer. Transport from Hopeman to Burghead for pupils to access breakfast clubs (0800hrs). Earth time an established need. Active dialog with Earth time staff and Moray pathways has evidenced transport is a existing barrier for parents. Cost for (privilege transport) is excessive and disadvantages some for accessing after school care. Restricts parents job opportunities due to lack of after school care provision or access to it. Employee access to Lossie from Burghead / Hopeman….currently reliant on lifts, cycling or walking to work……. Regular bus service would connect locals to local employment locations and opportunities. Customer service response times to calls over 20mins, abandon booking the service. If service wants to develop, need to resolve access to booking via customer service agents. App not for everyone, retain the call centre telephone line. Evening services beyond 1800hrs Trial a service route linking the coastal communities. Findhorn, Duffus, Burghead, Cummingston, Hopeman, Lossiemouth. Training pathway for elderly customers to access m.connect on-demand services. Page 213
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Better promotion of the service, not everyone on social media. Service road shows to groups in the community. Better transport for locals accessing the hub and ball groups (100-1200 / 1200- 1400hrs) in Burghead & Hopeman. Access to Silver Sands holiday park – employment opportunities. Difficulty accessing Lossie Medical practice, regular service would connect residents to appointment opportunities. 32 service over capacity, lots are using the service to get to Lossiemouth (anecdotal comment). Partial timetable service complimented by additional on-demand service to be considered. Weekend transport a must. Timetable service linking Rosisle- Duffus-Burghead-Hopeman-Lossiemouth Improve service information sharing - do not sign post to online material as a default Any transport surveys in future should have paper copies dropped off within community locations for completion. Visit community groups to explain service and provide information sessions. Direct link to Elgin rail station. Elgin – Larch court residents, receiving window for vehicle arrival and it is confusing customers. Drivers always seem to arrive at the latest time of window. Some drivers share information showing they have been provided a different arrival time from booking window issued by customer advisor. Can never get return journeys and end up paying for taxi as service stops at 1430hrs. Costing pensioners more money. Want more buses and longer operating hours. Like the door to door service as most residents have mobility issues. Customer service response times to calls are getting worse……difficult to get hold of anyone and can’t / won’t use the app. Want the on-demand service to improve its availability (0630-2030hrs of operation) with extra vehicles. Weekend service would be good. App is terrible, stopped using it. Very clunky and slow, sometimes wont even work. Takes up to 10-20mins to make a booking, even then…..wont get a full journey. Reinstate the service route Deveron coaches operated in Elgin, rather than it be an hourly service, make it 2 hourly….great service and everyone used it to connect within Elgin. 6 day a week service, Saturday up to 1800hrs. Page 214
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Findhorn - The service is unknown to most, please advertise better and visit local groups to make them aware of the service. Community council will help sign post service if provided information and will support roadshow events. Better connectivity with Forres / Elgin for doctor /dental and hospital appointments required. App is slow Findhorn car share scheme winding up, require better transport options. On-demand service does not meet all requests and restricted by the operating zone. Displacing lots of journeys when scheme ends, need more m.connect vehicles to accommodate Findhorn residents Weekend service is required. Kinloss – Extend the operating hours of the service, finishing at 1700hrs impacts returning home from work. App is slow and freezes, need to close down and restart to get a booking made. Service is good and use it often, when available. Difficult to get bookings made due to availability (High Demand in Forres). Community council don’t understand how the service works – make an appointment to visit and explain. Better service promotion – most don’t know the service exists. Create a service route linking Plusgarden with Dallas, Rafford Kinloss, Forres. Rafford – Expand 314 town service to serve Rafford Provide a limited timetable service that links Rafford, Loggie to Forres – once twice a week. Not everyone aware of m.connect – promote better within community Extend the operating hours of m.connect, make it more available…..difficult to get a booking (High demand in Forres). New housing development being built in Rafford, benefit from public transport link. Page 215
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Key / Common findings: 1. m.connect on-demand service in Forres and Elgin would benefit from additional operating hours and vehicles to match demand. 0630-2030hrs suggestion proved popular. 2. Potential timetable service(s) in Elgin to accommodate routine demand within the town centre – Alleviating the high demand within the on-demand service and allowing the service to meet demand outside of Zone 1 (Elgin). The routine service would also offer assurance to passengers over 60 that return journey could be accommodated with resorting to taxi journeys at cost due to limited on-demand service availability. 3. Passenger app is an issue that needs reviewed and resolved by Liftango. (Resolved through data management interventions in May 2024). 4. Access to customer services is elongated and frustrating for the customer. (on going issue due to staff resource) 5. Improved direct marketing required through leaflet drops / customer engagement / and a planned road show for organised groups / community councils. (On-going and part of the holistic phase 2 marketing, PR and Comms planning). 6. Weekend services desired. (Staged approach to weekend services across Moray). 7. Better connectivity for coastal communities. Possible timetable route from evidenced need / employee transport / after school clubs and access to local health care services. 8. 314 service review – improved timetable to extend operating hours and introduce service into the weekend. 9. 32 service high demand – Connectivity to Lossiemouth to be retained 10. Better connectivity for Findhorn-Kinloss-Forres residents to access local amenities and health facilities. Lessons learned: 1. Longer engagement programme to cover more community locations – avoid double sessions in a day. Whole Public Transport Unit responsibility. 2. Engagement programme not condensed into 2-week slots, look to plan a 6 week programme of activity cycle that can be repeated and amended as required / requested. 3. Engagement programme / service road show leading up to Phase 2 service launch. 4. Communication plan launched at least 4 months in advance of Phase 2 start date. 5. Community councils to assist with community awareness of service. – CC Road show. 6. Service information and material must be available offline as well as online. Replication of service leaflet campaign in east Moray for Phase 2. Page 216
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Annual Moray Council Public Transport Survey: Analysis of Findings The survey was developed to better inform the Bus Revolution project of current issues relating to the full Bus network in Moray. Helping to understand barriers, challenges and the level of demand for any particular service the communities in Moray would like introduced…… Informing the project team of potential service development to consider in future service expansion phases. The survey will be amended and issued annually to track trends and changes in responses, whilst also monitoring or evaluating impact of m.connect services when introduced in Moray. The 2023 survey provided a wide understanding of the usage and views of people in Moray in relation to current bus services (unless otherwise stated the survey questions relate to all bus services in Moray i.e., Stagecoach, m.connect, and Deveron Coaches). Almost 500 people took part in the survey in October/November 2023. Some 41% of respondents are aged 60 or over, of which, 30% were retirees. Whilst this is a disproportionately higher proportion of both over 60s and retirees than the general population, it perhaps reflects that people in these demographics are more likely to be bus users. Some 22% of respondents are aged 30 or below, and 37% aged 31- 59. A significant proportion of respondents (31%) reported things that make it difficult for them to use public transport and these were predominately mobility and health related. Almost half (49%) of respondents are very regular users of bus services, taking the bus at least once or twice a week, while a further 13% take the bus once or twice a month. Interestingly, there was a good level of engagement in the survey amongst people who do not currently use bus services, accounting for 22% of survey responses. Perhaps unsurprisingly, amongst those that currently use bus services,the busier Stagecoach routes were the services that respondents were most likely to use. For example, 54% use Stagecoach Service 10: Aberdeen, Elgin, Inverness. In terms of the m.connect on-demand services, these accounted for a low proportion of respondents – ranging from 2% for the Keith service to 7% for the Forres service. As would be expected, survey respondents are most likely to currently travel on buses between the hours of 0800-1800, with the two-hour period when most travel being 0800-1000 (52%). When respondents were asked what periods of the day they would like to travel on the bus service, but cannot because it is currently not available, a significant number indicated that they would like more opportunities to travel by bus in the evenings: 1800-2000 (28%), 2000-2200 (30%), and 2200-0001 (24%). It is not possible to gauge from the survey evidence the true scale of this demand as respondents were not asked to indicate the frequency at which they would use additional evening services if available (daily, weekly, monthly, once or twice a year etc). That being said, the results are insightful in evidencing that there is likely to be a significant number of people that would use evening services to some degree. Some 47% of respondents are in employment (full-time/part-time/self-employed). However, only 17% of respondents indicated that ‘travelling to/from work’ is their main purpose for bus journeys. Some of the respondents that are in Page 217
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employment may account for some of the survey respondents that do not currently use bus services, but it can also be surmised that many of them use alternatives to buses – either through choice or necessity – to get to/from their place of work but use buses for other types of trips (leisure, shopping trips etc). The most common main purpose for bus journeys is travel for shopping trips (38%), followed by appointments (doctor, hospital, professional etc) (30%), visiting friends or relatives (30%), and leisure trips (29%). When asked to rank what is most important as a passenger, around two-thirds (66%) of respondents consider ‘availability and frequency of scheduled services’ the most important, while 29% feel that ‘affordability of passenger fare’ is the most important. Elsewhere in the survey, it was similarly found that a clear majority (60%) of respondents would be encouraged to use their local bus services if they were more frequent. There was also a high number that indicated they would be encouraged to use their local bus service ‘if buses were more reliable’ (44%). Indeed, amongst the 43% of respondents that use the bus less often than before (compared to only 19% using the bus more), reliability issues were the most frequently mentioned reasons (noted by 30%), followed by reductions in services (27%). In respect of the survey respondents that do not currently use local bus transport, the most common reasons given was that buses are not frequent enough (37%). Other reasons commonly given were lack of availability (22%) and concerns about reliability (21%). Around a quarter (26%) of those do not use buses said that they prefer to travel by car and 23% feel that bus is less convenient than the alternatives. An overwhelming majority of respondents, around 90%, usually go online to access timetable information for the service routes available in Moray. ‘Traditional’ means of accessing timetable information are far less likely to be the usual go-to source: bus stops (11%), bus station (11%), and paper timetables (9%). It is striking that only 42% of respondents feel that it is easy to access bus service information, and of these a mere 13% feel that it is ‘extremely easy’. More than one in five (22%) are of the view that it is either ‘difficult’ or ‘extremely difficult’ to get bus information. Elsewhere in the survey, it is found that almost half (48%) of respondents know either ‘not very much’ or ‘nothing at all’ about local bus services, compared to 52% that have a ‘fair amount’ or a ‘great deal’ of knowledge. However, there is evidence that many respondents would be receptive to more information, with around a quarter (26%) indicating that they would be encouraged to use their local bus service ‘If I was more aware of, and /or more confident about local bus routes, timetables, fares etc.’ Focusing on the m.connect on-demand service, 77% of respondents have at least some knowledge of the service, suggesting a good level of awareness within the community. It should be noted that those engaging with the survey may be more likely than most to have an existing awareness of m.connect. Nevertheless, it is an encouraging indication that the service has developed good visibility in Moray. Page 218
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Moreover, over half (57%) of respondents have seen adverts for m.connect on- demand transport – slightly more than have seen adverts for Stagecoach. Again, this suggests that in the relatively short period of time that m.connect has been operational there has been success in making the service visible to people in Moray, albeit that reach has so far not been universal. When asked what factors that would encourage respondents to use local on-demand bus services such as m.connect, an overwhelming majority agreed that the following would make it more likely: ‘Reasonable journey times’ (89%), ‘Guaranteed response times (from booking to pick up)’ (87%), ‘Safety’ (87%), ‘Stops are reasonably close by’ (86%), ‘Comfort/ Cleanliness’ (84%), ‘Extended hours of operation’ (82%), ‘Affordability’ (79%), and ‘It’s better for the environment’ (77%). In terms of how people would like to use on-demand services, 56% would like to use a mobile phone app. Whilst this accounts for over half of respondents, it is notable that there is a large minority (44%) that have not indicated a preference for using a phone app which, whilst not the only means to book, is the primary booking platform for m.connect on-demand. A sizeable minority (28%) that would like to book on-demand bus services via phone – suggesting that there are many existing/potential m.connect customers that have a preference for booking via an arrangement similar to the previous ‘Dial M for Moray’ on demand service. The survey also found that 42% would like to book online, 18% by email, and 18% by SMS/text. Elsewhere in the survey when respondents were asked to rank what is important to them as a passenger, ‘ease of scheduling on-demand services’ was found to be a key issue for many, with almost a quarter (24%) considering this the most important and around a third (34%) the second most important. m.connect service analysis On-Demand service, explanatory notes: Matched bookings = Journey that was offered and accepted within range of original booking request. Unmatched bookings = Requested and couldn’t be accommodated by the service and no alternative time to travel was offered. Rider Rejected bookings = Bookings that have been offered by the service but customer rejects Cancelled = A confirmed booking cancelled by the customer. Service rejected bookings = The number of booking requests rejected by the booking system – this is usually followed by an offer to travel at an alternative time - See rider rejected figure. Bookings cancelled by service = Where the service is impacted by breakdown and journeys require to be cancelled as there is no resource to re-allocate to another vehicle. Ride expired bookings = Where bookings are created on the app but are not completed …they then expire when the booking page is idle for 5mins. Page 219
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Buckie – Service headlines: Buckie – experienced a 45% increase in passenger journeys from May 2023 to Mar 2024 Additional journeys accommodated – 1345 Passenger app use is trending toward 50/50 split with use of call centre Peak Journey periods between 0800-1100hrs daily 46% - single zone Journeys, 15% - 2 zone Journeys, 39% 3+ zone journeys. 51% bookings matched. 25% rider rejected bookings 16% Service rejected bookings 8% bookings expired Page 220
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Keith – Service headlines: Keith – experienced a 4% decline in passenger journeys from May 2023 to Mar 2024 Journey pattern remained similar to that of 2022-23 Passenger app use is low, use of call centre high Peak Journey periods between 1000-1200hrs daily 30% - single zone Journeys, 4% - 2 zone Journeys, 27% 3+ zone journeys and 39% journeys into Speyside. 52% bookings matched. 28% rider rejected bookings 13% Service rejected bookings 7% bookings expired Page 221
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Speyside – Service headlines: Speyside – experienced a 34% Increase in passenger journeys from May 2023 to Mar 2024 Passenger app use exceeding call centre requests Peak Journey periods between 0900-1100hrs and peaks again from 1300-1500hrs daily 45% - single zone Journeys, 15% - 2 zone Journeys, 2% 3 zone journeys, 4 zone journeys 3% and 35% journeys into Keith. 53% bookings matched. 28% rider rejected bookings 12% Service rejected bookings 7% bookings expired On-demand service struggling to accommodate and connect Tomintoul and other rural communities in zones 3 due to the distance vs demand from Zones 1, 2 and Keith journey requests. Page 222
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Elgin – Service headlines: Elgin – experienced a 2% decline in passenger journeys from May 2023 to Mar 2024 Passenger app use growing; however, call centre requests remain high in Elgin. Peak Journey periods between 0900-1300hrs daily…. Demand requested beyond 1400hrs that can’t be accommodated as service ends at 1430hrs. 63% - single zone Journeys, 4% - 2 zone Journeys, 15% 3 zone journeys and 18% journeys into Fochabers / Buckie area. 36% bookings matched. 29% rider rejected bookings 27% Service rejected bookings 8% bookings expired On-demand service struggling to accommodate level of demand with current operating hours, including connections into coastal communities. This is due to high demand in Central Elgin and demand in Fochabers for journeys into Elgin. Service only managing to meet only a 1/3 of demand in the Elgin / Coastal area at present Page 223
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Forres – Service headlines: Forres – experienced a 6% Increase in passenger journeys from May 2023 to Mar 2024 Passenger app use growing and exceeding call centre requests. Peak Journey periods between 0900-1100hrs, 12-1330hrs and 1400-1600hrs daily…. 66% - single zone Journeys, 28% - 2 zone Journeys, 6% - 3 zone journeys 45% bookings matched. 31% rider rejected bookings 19% Service rejected bookings 5% bookings expired On-demand service struggling to accommodate level of demand requests for single zone journeys (Zone 1, central Forres). This impacts on the services ability to meet demand requests outside of zone 1 as evidenced in the percentage figures. The bulk of service rejected rides are requests for zone 1 to 1 journeys. Page 224
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20240827 Full Committee Bus Revolution Phase 2 Appendix 2 Bus Revolution Phase 2 New Service Timetable information Service 333 Burghead – Hopeman – Duffus – Lossiemouth Mon-Fri Item 15. Page 225
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Service 334 – Elgin North Circular Elgin-Garmouth-Kingston on Spey Mon-Fri Service 376 Auchbreck-Knockando-Aberlour Mon-Fri Page 226
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Service 368 Tomintoul-Dufftown-Keith (Aberlour / Elgin Connector) Mon-Fri Page 227
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20240827 Full Committee Bus Revolution Phase 2 Appendix 3 Project Financial Position End of Year 1 (Financial Year 2023-24) Capital budget for the project remained, largely on track throughout the financial year, recording a modest underspend that has been reallocated into future years capital profile through the approved governance gateways within the project and programme management framework. Revenue Budget supporting the project deliver the enhanced services introduced during phase 1 is summarised below from the full Business case to actual figures at the end of year one: Revenue Expenditure FBC (£) Actual (£) Variance (£) App Licencing 5000 5000 Staff Costs 228,840 228,840 Fuel (electric & diesel) 27,375 21,411 -5964 Vehicle maintenance 30,345 30345 Marketing 17,107 0 -17,107 Project Manager 60,000 71,363 11363 Total 368,667 356,959 11,708 Funded By: Additional Farebox Income 79,044 30,395 48,649 Network Support Grant (NSG) 20,353 40,000 -19647 Employer Income 75,000 0 75000 Other – HiTrans (App Development) 5000 5000 Moray Council 60,000 71,363 Total 239,397 135,395 104,002 Item 15. Page 229
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Below provides a summary financial position of all public transport provision provided by the Public Transport Unit pre and post Bus Revolution Phase 1. FY2022-23 Pre-Phase 1 Public Transport Unit Operational Costs Passenger Journeys Concessionary Fares Cash Fares Total Fares Timetable Bus services £135,006 27002 £46,030 £9801 £55,831 On-Demand Bus services £270,623 18879 £34,992 £2494 £37,486 Total £405,629 45881 £81,022 £12,295 £93,317 Annual NSG Income £27,057 Total Income £120,374 Total Operational Cost £405,629 Net Subsidy £285,255 Subsidy per passenger £6.22 per journey The above income values, creates a Baseline income in which to monitor project impact on passenger journeys, income and a subsidy per passenger position at the end of each financial year (FY). As noted previously, the project introduced a zonal fare price point structure that was implemented on 02 May 2023. Zone Single Return 10 Journey 1 £3.00 £5.00 £20.00 2 £5.50 £9.00 £36.00 3 £7.50 £9.00 £36.00 4 – All day travel £9.00 £9.00 £36.00 Page 230
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The introduction of the 2023 fares model outlined a need to remodel the baseline income to accurately reflect fare price point changes. This ensured that monitoring income was comparable and didn’t create a false uplift in income that couldn’t be repeated in future years. This work created a baseline position to monitor income and expenditure for whole m.connect operations. These figures are used for monitoring financial performance of both project and PTU budget allocations. The subsidy per passenger figure generated in FY2022-23 has also been retained as a performance indicator, which was £6.22 per passenger. FY2023-24 Post-Phase 1 (Year one) end of year position. Public Transport Unit Operational Costs Passenger Journeys Concessionary Fares Cash Fares Total Fares Timetable Bus services £295,308 34538 £89,883 £16,235 £106,118 On-Demand Bus services £430,142 21106 £49,458 £5039 £54,497 Total £725,450 55644 £139,691 £21312 £160,615 Annual NSG Income £67,057 Total Income £227,672 Total Operational Cost £682,420 Net Subsidy £497,778 Subsidy per passenger £8.94 per journey The end of year one evidenced an overall increase in subsidy per passenger. Below provides a quick analysis of income which may explain why the subsidy increase occurred: • Income model used to create Income forecasts within Full Business Case (FBC) accounted for a higher percentage of full fare paying passengers in year one than what was evidenced. Page 231
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• FBC also assumed a 50% increase in farebox income value once 2023 fare structure was introduced, however, detailed analysis showed only a 28% increase in income value. • Overall passenger growth from FY23-24 was 22%, whereas farebox income grew by 26%. The service required a 40% growth in farebox income to achieve income targets set (£208,768). Subsidy per passenger would have remained high at £7.30 if income target was achieved. • Over 50% of journeys were single zone, short distance journeys at £3.00, with 86% of customers being concessionary card travellers. Netting the service only 54% of set fare price (e.g. £3.00 fare would be reimbursed at £1.66). Evidencing the case that short distance fare price point position will require review. • End year average fare price across the whole m.connect service was £2.89. To meet farebox income targets set within the FBC the service would have had to carry a total of 71988 passengers in order to achieve set target or increase fare price points to obtain a £3.75 average fare. • No April farebox income recorded as project started in May 2023. Assessed value for that month - £4,112 The Service did record additional income through Network support Grant (NSG) reimbursements totalling £19,647. This along with the assumed £4,112 of missed income from April 2023 reduces Net farebox income shortfall to £24,890. In response to the Income shortfall for farebox revenue, the project board agreed the following actions which are incorporated in the proposals above: • Redesign Speyside service routes as part of Phase 2 operational plans, reducing operational cost whilst retaining the core patronage that existing services carry. • Conduct a detailed farebox analysis, to include annual income outcomes if fare price points were to increase by £0.50p and. or a £1.00 – Impact on subsidy per passenger figure. • Assess fare increase impact and model into income assumptions for Phase 2 operational plans. • Minimise revenue request for Phase 2 through efficiencies made to existing services within the m.connect network. • Review of Income trajectory 6 months into Phase 2 delivery. If Income levels remain lower than FBC forecast, a full financial case review to be initiated. With the uplift in income being experienced during 24/25 the Net Passenger Subsidy for the year is projected to be £8.66. Page 232
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Based on the information set out in the above sections, the projected Net Passenger Subsidy for 25/26 incorporating Phase 2 proposals and fares revisions is £7.88, demonstrating a marked improvement. Page 233
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