Agenda Document Pack - Moray Council - 04/12/2024
Moray Council · 4 December 2024
Back to Moray Council — 4 December 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Moray Council Wednesday, 04 December 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, 04 December 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 17 - 22 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 Meeting of 25 September 2024 7 - 24 4b. Minute of Special Meeting of 22 October 2024 25 - 36 5. Notice of Motion - Gaza 37 - 38 6. Written Questions ** 7. Moray Integration Joint Board Summary Report Report by Chief Officer, Health and Social Care Moray 39 - 54 Page 1
Page 2
8. Medium to Long Term Financial Strategy Report by Depute Chief Executive (Economy, Environment and Finance) 55 - 82 9. Revenue Expenditure to 30 September 2024 Report by Depute Chief Executive (Economy, Environment and Finance) 83 - 116 10. Capital Plan 2024-25 Quarter 2 Report by Depute Chief Executive (Economy, Environment and Finance) 117 - 130 11. Capital Strategy Report by Depute Chief Executive (Economy, Environment and Finance) 131 - 148 12. Corporate Asset Management Plan Report by Depute Chief Executive (Economy, Environment and Finance) 149 - 166 13. Committee Changes - Roles and Outside Bodies Report by Depute Chief Executive (Education, Communities and Organisational Development) 167 - 184 14. Proxy Voting by Councillors Consultation Report by Depute Chief Executive (Education, Communities and Organisational Development) 185 - 192 15. Climate Change Plan and Routemap to Net Zero 2024 Update Report by Depute Chief Executive (Economy, Environment and Finance) 193 - 268 16. Information Reports - if called in Item(s) which the Committee may wish to consider with the Press and Public excluded 17. Applications For Voluntary Early Retirement - Voluntary Severance [Para 1] • 1. Information relating to staffing matters; Page 2
Page 3
18. Collaborative Leadership Development Work Update [Para 1] • 1. Information relating to staffing matters; 19. Smarter Working Project Report- Phase 2 Update [Para 1] • 1. Information relating to staffing matters; 20. Short to Medium Term Financial Plan [Para 1] • 1. Information relating to staffing matters; 21. Residential Property Acquisition [Para 9] • 9. Information on terms proposed or to be proposed by or to the Authority; 22. Moray Growth Deal Full Business Case - Cultural Quarter [Paras 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; Information Reports - Not for Discussion at this Meeting Any member wishing to call in a noting or information report from one meeting shall give notice to Committee Services at least 48 hours before the meeting for which the report is published. The Notice shall be countersigned by one other elected member and shall explain the reason for call in including any action sought. Information Report - Accounts Commission Report - Transformation in Councils 269 - 292 Information Report - Monitoring Officer Report 1 November 2023 - 31 October 2024 293 - 298 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
Page 4
Page 4
Page 5
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 5
Page 6
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 Elaine Kirby (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 6
Page 7
MORAY COUNCIL Minute of Meeting of the Moray Council Wednesday, 25 September 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 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 APOLOGIES Councillor Draeyk van der Horn IN ATTENDANCE Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance), Depute Chief Executive (Education, Communities and Organisational Development), Head of Governance, Strategy and Performance, Head of Housing and Property Services, Head of Environmental and Commercial Services, Chief Financial Officer, Acting Head of Economic Growth and Development, Asset Manager - Commercial Properties, Moray Growth Deal Programme Manager, Project Manager (Cultural Quarter), Climate Change Strategy Officer, Democratic Services Manager and Angela Pieri, External Auditor. 1. Chair The meeting was chaired by Councillor Kathleen Robertson. 2. 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 Councillor Lawrence confirmed that the SNP Group had agreed a position on Item 18 - No Compulsory Redundancy Policy. Councillor Robertson declared that the Conservative Group had also agreed a position on Item 18 - No Compulsory Redundancy Policy. There were no declarations of Member's interests in respect of any item on the agenda. In relation to Item 16 - Cultural Quarter Governance Models, Councillor Williams stated for transparency there was a connection due to a family member's Item 4a. Page 7
Page 8
employment, however he felt it did not meet the threshold and would remain in the meeting for the consideration of the item. 3. Resolution Councillor McLennan sought clarification on whether Items 18, 19 and 20 on the agenda were confidential or except in term sof the Local Government (Scotland) Act 1973. The Head of Governance, Strategy and Performance confirmed the reports contained information which the Officers will have considered as exempt in Schedule (7) (2) of the 1973 Act. He further added that although the exempt information may only be a small section of the report, it would still mean that the report be heard in confidence and the rules provide that the Chair can then provide any public statements following the meeting depending on the decision made. Councillor McLennan moved that Items 19 and 20 be moved into the open section of the meeting. On failing to find a seconder the motion fell and Councillor McLennan's dissent was recorded. Thereafter the meeting resolved that in terms of 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 10 and 11 of business on the grounds that it involves the likely disclosure of exempt information of the class. Para number of the minute Para Number of Schedule 7a 10 Para 8 and 9 Information on proposed terms and/or expenditure to be incurred by the Authority 11 Para 6 Information relating to the financial or business affairs of any particular person(s) Para 8 and 9 Information on proposed terms and/or expenditure to be incurred by the Authority 12 Para 1 Information relating to staffing matters 13 Para 1 Information relating to staffing matters 14 Para 8 and 9 Information on proposed terms and/or expenditure to be incurred by the Authority 4. Order of Business Page 8
Page 9
Under reference to Standing Order 29, the Chair advised the Council that the confidential items would be taken following Item7 - Written Questions on the agenda due to some members having unavoidable appointments in the afternoon. 5. Minute of Special Meeting of Moray Council on 11 June 2024 The minute of the special meeting of Moray Council on 11 June 2024 were submitted and approved. 6. Minute of Meeting of Moray Council on 13 August 2024 The minute of the meeting of the Moray Council on 13 August 2024 was submitted and approved subject to the Clerk reviewing the webcast and making any necessary changes following the amendments proposed by Councillor McLennan. 7. Notice of Motion - Winter Fuel Payments In terms of Standing Order 35a there was submitted a Notice of Motion by Councillors Warren and Coull in the following terms: 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. Page 9
Page 10
• 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 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 Draft Letter 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 Page 10
Page 11
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 Councillor Robertson, seconded by Councillor Dunbar proposed an amendment to the Notice of Motion in the following terms: Preliminary issues • Council notes with concern the recent decisions by both the UK and Scottish Governments 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 UK government decision affects pensioners in England and Wales. The Scottish Government’s decision to take the lead from the UK government is entirely their decision as they were due to start administering the Winter Fuel Payment’s replacement from this winter, but have instead handed back this power to the UK Government. • The Scottish Fiscal Commission recently highlighted Scottish government makes its own choices that lead to its own financial position. In order to fund public-sector pay rises, money has been taken/raided from the Nature Restoration Fund, Free school meal expansion for p6/7, flood adaptation schemes and other funds are well reported but no money has been taken from the portfolio on the constitution. • Additionally, it should be noted that since this decision was taken it has been announced that energy bills are to increase from October further adding to the risk of fuel poverty to our pensioners. • Furthermore, it is essential to highlight that 19,988 pensioners in Moray benefitted from the Winter Fuel Payment last year and a further cost-of-living payment on top of that. The introduction of means-testing will cut the number of pensioners receiving the payment in Moray by around 18,000, potentially leaving them vulnerable during the coldest months of the year. Action • Council firmly believes that all pensioners, irrespective of their income, should be supported during the winter months to ensure they can adequately heat Page 11
Page 12
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 wellbeing during harsh winter conditions. • Therefore, Moray Council calls on the Scottish Government to reverse its decision to means-test the Winter Fuel Payment in recognition that this is within their gift to do so as it is a devolved issue. • Moray Council also calls on the UK Government to reverse its decision to means test the Winter Fuel Payment in recognition of the impact this will have on pensioners across the UK, in the hope that the Scottish Government will follow suit. • We urge both Governments 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 alongside the Council’s Joint Older Person’s Champions should write to both the Chancellor and the Cabinet Secretary for Finance expressing the Council’s strong opposition to the means-testing of the Winter Fuel Payment. Financial Implications • There are no financial implications for the council arising from writing these letters. Proposed by Cllr Kathleen Robertson Seconded by Cllr Amber Dunbar Draft letter to Chancellor Rt Hon Rachel Reeves MP Chancellor of the Exchequer HM Treasury 1 Horse Guards Road London SW1A 2HQ Dear Chancellor, 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. It is regrettable that whilst this is a devolved matter, your decision has emboldened the Scottish Government to take the same steps in regards to winter fuel payments. 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 thousands of our elderly residents, helping them to adequately heat their homes and protect their health during harsh winter conditions. Page 12
Page 13
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 requesting I write to you, 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. I would hope that in doing so, the Scottish Government would follow suit. Thank you for your attention to this important matter. Yours sincerely Draft letter to Cabinet Secretary – Shona Robison MSP Cabinet Secretary for Finance and Local Government Scottish Government St Andrew's House Regent Road Edinburgh EH1 3DG Dear Cabinet Secretary I am writing to you on behalf of the Moray Council to express our deep concern regarding the recent decision by the Scottish Government to follow the UK Government’s decision to means test the Winter Fuel Payment. This decision will have severe and detrimental effects on the pension 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 thousands of our elderly residents, helping them to adequately heat their homes and protect their health during harsh winter conditions. 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 requesting I write to you, calling on the Scottish Government to reverse its decision to means-test the Winter Fuel Payment, as it is entirely within the remit of the Scottish Government to do so. Page 13
Page 14
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. Thank you for your attention to this important matter. Yours sincerely Following consideration the Chair proposed a short adjournment to allow the proposers and seconders for the motion and amendment to try and come to a consensus. On the resumption of the meeting, the motion and the amendment still stood and on the division there voted For the motion (9) Councillor Warren, Coull, Cameron, Cowe, Fernandes, Harris, Lawrence, Morrison and Stuart. For the Amendment (15) Councillors Robertson, Dunbar, Allan, Bloomfield, Colyer, Divers, Gatt, Gordon, Keith, Macrae, McBain, McLennan, Mustard, Ross, Williams Abstention (0) Accordingly the amendment became the finding of the meeting and the Council agreed that a letter from the Council Leader and Joint Older Person's Champions would be sent to the Chancellor and the Cabinet Secretary for Finance expressing the Council's strong opposition to the means testing of the Winter Fuel Payment. 8. Notice of Motion - Action to Reduce Seagull Numbers in Elgin In terms of Standing Order 35a there was submitted a Notice of Motion by Councillors Keith and Divers in the following terms: Action to Reduce Seagull Numbers in Elgin 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. Page 14
Page 15
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. Financial Implications There are no financial implications arising from this report. Proposed By: Councillor Sandy Keith Seconded By: Councillor John Divers 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. Page 15
Page 16
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. 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. Councillor Macrae sought agreement from Councillor Keith and Councillor Divers to amend the wording in the letter reflect that the issue of seagulls is a Moray wide issue. Page 16
Page 17
Councillors Keith and Divers confirmed that they were happy to accept Councillor Macrae's amendment. There being no one other wise minded the Council unanimously agreed the Notice of Motion. 9. Written Questions ** Under reference to Standing Order 36 a written question from Councillor McLennan was submitted in the following terms: Between April 2022 and now (April 2022 to April 2023; April 2023 to April 2024; April 2024 to now i.e budget years*) how many temporary workers; contract workers; consultants and /or consultancy organisations ¥ and staff working overtime has Moray Council paid for* and what was the total cost of each of these types of worker per the year’s asked about? *please break up as below ¥ please also note travel and substance costs for consultants brought to work for Moray Council Number of temporary workers & total cost to Moray Council Number of consultants and total cost to Moray Council Number of Moray Council staff working overtime and total cost to Moray Council Number of consultants working for Moray Council and total cost to Moray Council Number of consultancy organisations (i.e the Improvement Service etc) working for Moray Council and total cost to Moray Council Total cost of consultants subsistence and travel costs and how many consultants was this for April 2022 to April 2023 April 2023 to April 2024 April 2024 to date of response to Written Question RESPONSE As Council Leader I am happy to ask Officers to provide the information requested. Unfortunately it has not been possible to assemble all of this information in the timescale available. Page 17
Page 18
It would be helpful for Officers compiling this information if Councillor McLennan was able to narrow down the request to a particular area or set of circumstances. Councillor McLennan sought assurances from the Council Leader that legislation will be followed and ACAS codes adhered to when looking at budgeting and employment matters. In response, the Interim Chief Executive confirmed that the Council will be happy to respond as indicated in the response to the written question. He further advised that the amount of information requested was significant and appreciated the sentiment about having the information available but due to holidays of staff involved in providing the information, it has not been possible to obtain all the information in the level of detail requested going back more than one year. He further assured Councillor McLennan that the information sought will be provided. 10. Cultural Quarter Governance Models [Para 8 and 9] The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) which informed the Council of an options appraisal commissioned as part of the Cultural Quarter (CQ) Full Business Case. The report appraised a range of options for the governance and management of the CQ and establishes a preferred model to support the sustainable future of the project. The Council was also asked to consider the information provided in the report and seek in principle agreement for the preferred governance model in advance of presentation of the CQ Full Business Case at a future Council meeting. Following consideration the Council unanimously agreed to: i) agree in principle the preferred model recommended in the options appraisal as a core principle for the sustainable implementation of the Cultural Quarter project as part of the Moray Growth Deal; and ii) note that the Cultural Full Business Case will be presented to Council for approval on the basis of this governance model. 11. Former Offices [Para 6 8 and 9] The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) asking the Council to consider offers received to acquire the former offices at 30-32 High Street, Elgin. Following consideration, the Council unanimously agreed to: i) approve the sale of the former offices at 30-32 High Street, Elgin as detailed in Section 5 of this report; and ii) authorise the Asset Manager (Commercial Buildings) and the Legal Services Manager to finalise detailed terms and conditions and conclude the transaction. Page 18
Page 19
The Council joined the Chair in wishing Mr Stuart Beveridge, Asset Manager (Commercial Buildings) a long and happy retirement as this was his last meeting of the Council. 12. Revised Redundancy Policy [Para 1] The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) inviting the Council to review the principle of no compulsory redundancies (NCR) and to reverse that as a policy position. Councillor Robertson moved the recommendations as printed in the report, this was seconded by Councillor Gatt. Councillor Lawrence, seconded by Councillor Coull proposed amending recommendations to read: It is recommended that the Council considers the content of the report and Appendix 1 in relation to a principle of no compulsory redundancies. Councillor McLennan proposed amending the recommendations as follows: i) as written in the report; ii) defer a decision until the budget is known; iii) request an urgent answer to the written question. In failing to obtain a seconder, the amendment fell and Councillor McLennan's dissent was recorded. Councillor McLennan sought clarification on whether the Council had the information required to determine the report. The Depute Chief Executive (Education, Communities and Organisational Development) confirmed that all the information is before the meeting. On the division there voted: For the motion (12) Councillors Robertson, Gatt, Allan, Bloomfield, Colyer, Cowe, Dunbar, Gordon, Macrae, McBain, Mustard and Ross For the Amendment (11) Councillors Lawrence, Coull, Cameron, Divers, Fernandes, Harris, Keith, McLennan, Morrison, Warren and Williams. Abstention (1) Councillor Stuart Accordingly the motion became the finding of the meeting and the Council agreed to: i) note the contents of the report and Appendix 1 in relation to a principle of no compulsory redundancy and that the principle is removed as a policy position of the Council; and Page 19
Page 20
ii) revert to the previous policies and procedures which include the use of compulsory redundancies, only as a measure of last resort, to achieve necessary workforce change and contraction. 13. Senior Management Recruitment Update [Para 1] The meeting had before it a report by the Interim Chief Executive asking the Council to note and endorse arrangements for recruiting a permanent Chief Executive including approval for a mentoring support and performance review process for the successful candidate. The report also asked the Council to approve an extension of the tenure of the Interim Chief Social Work Officer/Head of Service. Following consideration the Council unanimously agreed to: i) approve the proposed arrangements for recruitment of a permanent Chief Executive; ii) note that a review of the current policy for recruitment of Chief Officers will be progressed for approval by Corporate Committee by January 2025; iii) the Interim Chief Executive for the role of principal professional advisor to the Recruitment Panel for shortleeting and the professional/technical interview and subsequent Moray Council interview; iv) endorse the appointment of external professional services to support the recruitment and selection process; v) endorse the development of a mentoring support and performance review process for the permanent Chief Executive with the details to be submitted for approval of at Corporate Committee in January 2025; and vi) approve the extension of the temporary employment of the Interim Chief Social Work Officer/Head of Service until May 2025 to ensure appropriate cover is in place until a permanent Chief Officer Moray Integrated Joint Board (MIJB) has recruited a permanent Chief Social Work Officer (CSWO)/Head of Service. 14. Consultancy Support For Review Of Council Corporate Management Structure [Para 8 and 9] The meeting had before it a report by the Interim Chief Executive seeking budgetary approval for the use of external consultancy services to support a corporate management restructure within the Council. Following consideration the Council unanimously agreed to: i) the use of consultancy services to provide support for a review of its corporate management structure on the terms set out in paragraph 4.5; and Page 20
Page 21
ii) delegate authority to the Interim Chief Executive, in consultation with Political Group Leaders, to make an appointment based on relevant skills, experience and cost. Councillor Harris left the meeting following the conclusion of this item. 15. Financial Reserves Policy The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) seeking approval from the Council to update the Financial Reserves Policy. Following consideration the Council unanimously agreed: i) to approve the Financial Reserves Policy attached as Appendix 1 of the report; and ii) that the next review will be no later than October 2027. 16. Savings Delivery Plan The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) asking Council 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. Councillor Robertson moved the recommendations as printed in the report. Councillor McBain sought clarification on whether the figure in recommendation (ii) should read £370,000 and not £307,000 as printed. The Chief Financial Officer confirmed that the figure should read £370,000 and apologised for the error. Councillor McLennan sought clarification on when the overall single plan on the £10million savings be available and asked whether the paper should be deferred until the plan is available. In response, the Interim Chief Executive confirmed that the Council cannot wait, savings need to start being made. Councillor McLennan proposed defering the report until the overall plan and all information is available. In failing to find a seconder the amendment fell and Councillor McLennan's dissent was recorded. Following further consideration the Council agreed to note: i) the progress made in identifying potential savings, following the Short to Medium Term Financial Strategy; ii) additional savings of £370,000 as set out in paragraph 3.9; Page 21
Page 22
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. The Council further agreed 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. Councillor Cowe left the meeting at the conclusion of this item. 17. Connected Charities Audited Annual Accounts 1 April 2023 to 31 March 2024 The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) which submitted the audited Annual Accounts for Moray Council's Connected Charities for the year ended 31 March 2024. Following consideration the Council unanimously agreed to approve the audited Annual Accounts for the Connected Charities for the financial year 2023/24. 18. Treasury Management Prudential Indicators The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) providing 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. Following consideration the Council unanimously agreed to note the Treasury Management Performance and the Council’s Treasury Management and Capital Investment Prudential Indicators for 2023/24 as set out in APPENDIX 2. 19. Change to Calendar of Meetings The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) requesting 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. Following consideration the Council unanimously agreed 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. Page 22
Page 23
20. Appointment of Chair and Depute Chair for Audit and Scrutiny Committee The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) inviting the Council to appoint a new Chair and Depute Chair of Audit and Scrutiny Committee. Councillor Macrae moved to appoint Councillor Lawrence as Chair of Audit and Scrutiny, this was seconded by Councillor Divers. Councillor Macrae moved to appoint Councillor Coull as Depute Chair of Audit and Scrutiny, this was seconded by Councillor Divers. Following consideration and there being no one otherwise minded the Council unanimously agreed to appoint Councillor Lawrence as Chair of Audit and Scrutiny and Councillor Coull as Depute Chair. 21. Climate Adaptation Benchmarking 2023 The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) informed the Council of the findings from the council’s first climate adaptation benchmarking exercise and propose updated actions for the Climate Change Action Plan. Following consideration, the Council unanimously agreed to: i) note the Council's statutory duty to ensure activities and programs are designed to best support delivery of climate adaptation; ii) 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. 22. Moray Council Bus Revolution Phase 2 The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) informing 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. Under reference to Standing Order 81, the Chair sought agreement to Suspend Standing Order 75 to continue the meeting past 12.45pm to conclude the meeting. This was unanimously agreed. Following lengthy consideration, the Council unanimously agreed to: 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) 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 Page 23
Page 24
23. Early Years STEM Full Business Case The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) informing the Council of progress made by the Moray Growth Deal (MGD) to prepare a full business case for the Early Years Science, Technology, Engineering and Mathematics (EY STEM) project and seek delegated authority to enable final approval of the business case enabling the project to move into delivery. Councillor Macrae proposed the recommendations as printed and selected Option 4 from the options in para 5.6 of the report. This was seconded by Councillor Robertson. Following further consideration the Council unanimously agreed to: i) approve the Full Business Case summarised in this report and contained in Appendix 1; ii) delegate authority to the Depute Chief Executive (Education, Communities and Organisational Development) to make any final changes as required following completion of the Government review process, with a view to agreeing a final version of the FBC to progress to implementation; iii) delegate authority to the Depute Chief Executive (Economy, Environment and Finance) or other such signatory as may be required to accept the Government grants for the projects in line with the terms of the MGD; and iv) the intermediate option - provision in targeted locations across Moray, a mobile and outreach offering and partnership activity. Page 24
Page 25
MORAY COUNCIL Minute of Special Meeting of the Moray Council Tuesday, 22 October 2024 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Councillor James Allan, Councillor Peter Bloomfield, Councillor Neil Cameron, Councillor Tracy Colyer, 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 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 Theresa Coull IN ATTENDANCE The Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance), Depute Chief Executive (Education, Communities and Organisational Development), Head of Governance, Strategy and Performance, Chief Financial Officer, Head of Housing and Property Services, Head of Environmental and Commercial Services, Acting Head of Economic Growth and Development, Head of HR, ICT and Organisational Development, Customer Development Manager, Sport and Culture Services Manager, Moray Growth Deal Programme Manager, Cultural Quarter Project Manager, Tracey Laing, Senior Auditor, Benefits Manager, Democratic Services Manager and Angela Pieri, External Auditor. 1. Chair The meeting was chaired by Councillor Kathleen Robertson. 2. 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. Transparency Statements: Councillor Gatt - Items 5a and 6 - Chair of Grampian Valuation Joint Board Item 4b. Page 25
Page 26
Councillor Warren - Items 5a and 6 - Member of Grampian Valuation Joint Board Councillor Divers and Fernandes - Item 14 - Advisers to Moray Citizens Advice Bureau Councillor Williams - Item 11 - there was a connection due to a family member's employment, however he felt it did not meet the threshold and would remain in the meeting for the consideration of the item. Councillors Macrae, Gordon and Cameron - Item 11 - Directors on the Board of Moray Leisure Centre 3. Resolution Councillor McLennan sought clarification in terms of Standing Order 78 on whether Councillors had all the information required to make decisions today, given that the response to his written question from 25 September 2024 was still outstanding and may be relevant to the decisions being made today. In response, the Interim Chief Executive confirmed that in his professional view the information requested is not material in terms of the decisions that need to be taken at the meeting. He further added that he had responded to Councillor McLennan with regards to the written question relative to the information he had requested. The information requested has been given in regard to temporary workers for the last 3 years. Identifying the information sought in regard to consultants is more difficult to determine and work is being carried out to provide the information which is taking longer than anticipated. Councillor McLennan had been asked to hone down the particular request for information to make it easier for Officers to answer. Councillor McLennan sought further clarification from the Monitoring Officer that he was happy for the Council to proceed with the decisions to be made at the meeting. The Head of Governance, Strategy and Performance confirmed that he had nothing further to add to what the Interim Chief Executive had stated and that he was satisfied that Elected Members had the information before them to make decisions at the meeting. Thereafter the meeting resolved that in terms of 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 10 and 11 of business on the grounds that it involves the likely disclosure of exempt information of the class. Para number of the minute Para Number of Schedule 7a 12 Para 1 Information relating to staffing matters 13 Para 1 Information relating to staffing matters 14 Para 6 Information relating to the financial or business affairs of any particular person(s) 15 Para 1 Page 26
Page 27
Information relating to staffing matters Para 8 and 9 Information on proposed terms and/or expenditure to be incurred by the Authority 16 Para 9 Information on terms proposed or to be proposed by or to the Authority 18 Para 8 and 9 Information on proposed terms and/or expenditure to be incurred by the Authority 19 Para 6 Information relating to the financial or business affairs of any particular person(s) 4. Jo Cox Foundation The meeting had before it a report by the Interim Chief Executive asking the Council to consider a recommendation by COSLA Leaders that Councils consider making a donation to the Jo Cox Civility Commission in support of its work against abuse, intimidation and violence towards politicians. Following consideration the Council unanimously agreed to: i) note the recommendation of COSLA Leaders meeting on the 30 August 2024 for consideration of funding support for the Jo Cox Civility Commission; and ii) make a donation of £500 in support of the work of the Jo Cox Civility Commission. 5. Best Value Workforce Thematic Draft Outcomes The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) informing the Council of the outcomes from the Best Value Workforce Thematic report and invited consideration of the key messages. The Thematic Report was introduced by Angela Pieri, External Auditor, Grant Thornton UK LLP Following consideration, the Council unanimously agreed to note the key messages in the best value workforce innovation thematic review. 6. External Audit - Annual Report to Members on 2023-24 Audit The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) providing Council with a copy of the External Auditor's Annual Audit Report to Council on the 2023/24 Accounts. The report was introduced by Angela Pieri, External Auditor, Grant Thornton LLP UK. Page 27
Page 28
Following consideration, the Council unanimously agreed to note the contents of the Annual Audit Report 2023/24. 7. Audited Annual Accounts 1 April 2023 to 31 March 2024 The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) submitting to the Council the Audited Annual Accounts for the Moray Council for the year ended 31 March 2024. Following consideration the Council unanimously agreed to: i) note the Audited Annual Accounts for the financial year 2023/24; and ii) approve that the Annual Accounts are signed, having regard to the Annual Report from the External Auditor which another item on this agenda. 8. Budget Protocol The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) providing the Council with an updated Budget Protocol reflecting feedback on the version used for the 2024/25 budget setting process and seek endorsement of this as a policy for the budget setting process for 2025/26. Councillor Keith expressed unease with the wording in paragraph 2 in the Appendix under the section Budget Amendments. In response, the Depute Chief Executive (Economy, Environment and Finance) confirmed that the wording is intended to ensure all members are aware of the officers from whom they can get early advice on proposed amendments to ensure that the amendments proposed are based on robust information and that the proposals are deliverable. Councillor McLennan sought clarification on whether there were any legislative implications with regards to section 6 of the protocol and also para 3 of the section on Budget Amendments in relation to late amendments. In response the Head of Governance, Strategy and Performance confirmed that what is being discussed is good decision making of the Council and he drew members particular attention to the Accounts Commission Guidance note which stated, are we getting it right, is fair notice being given for decisions the Council has to make and as he had stated earlier, Councillors having sufficient information before them to come to a reasonable and balanced decision. Councillor McLennan moved to remove paragraph 3 under Budget Amendments in the Appendix and Principle 6 under section Principles. This was seconded by Councillor Keith. The Head of Governance, Strategy and Performance advised the Council that the more that is written in the protocol the better as removing these elements are leaving it to chance at the time and that Councillors not in the administration would benefit from these paragraphs for the reasons stated earlier in terms of the Council making valid decisions. As Monitoring Officer, it was his recommendation to keep the sections in the protocol. Page 28
Page 29
Councillor Macrae, seconded by Councillor Ross proposed agreeing the recommendations as printed in the report. On the division there voted: For the motion (3) Councillors McLennan, Keith and Stuart For the Amendment (18) Councillors Macrae, Ross, Allan, Bloomfield, Cameron, Colyer, Cowe, Divers, Dunbar, Gatt, Gordon, Harris, Lawrence, Macrae, McBain, Mustard, Robertson and Warren Abstention (2) Councillors van der Horn and Williams Accordingly, the amendment became the finding of the meeting, and the Council agreed: i) the updated Budget Protocol (V13.1) produced as Appendix I as a statement of policy to apply to the process leading to setting of the Council budget for 2025/26; and ii) to note that the Budget Protocol will continue to be reviewed at least annually to reflect political and other changes as required, for endorsement by members of the Budget Development Forum, which failing by a further report to Council. Councillor McLennan's dissent was recorded. 9. Operation of a Cap on Capital Expenditure for 2025-26 The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) recommending a methodology for keeping the Council’s capital expenditure within affordable limits, having in regard the life of the indicative ten-year capital plan. Following consideration, the Council unanimously agreed to approve the methodology for the application of a cap to capital expenditure as set out in this report and summarised in paragraphs 5.1 to 5.3. 10. Pre-Election Period The Chair reminded members that the Council is currently in a pre-election period for the Elgin City South by election which takes place on 7 November. National guidance places restrictions on the Council publishing material showing support for a particular political party. Should the debate become overtly political whilst being webcast, then as Chair, may need to intervene. The Chair further added that should any votes take place on confidential items on the meeting agenda, the voting results will not be published on CMIS until after the by- election has taken place. 11. Order of Business Page 29
Page 30
The Chair advised that Item 13 - Non-Domestic Rates Recovery will be taken at the end of the agenda. 12. Short to Medium Term Financial Plan [Para 1] The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) seeking approval to proposed savings, subject to consultation where appropriate, for implementation in 2024/25 and 2025/26, in accordance with the Council’s Short to Medium Term Financial Strategy. Following consideration the Council unanimously agreed to: i) note the financial update summarised APPENDIX 1; ii) notes the savings options set out in APPENDIX 2, having due regard to the Integrated Impact Equalities Assessments summarised in APPENDIX 3; iii) the greatest level of savings possible, subject to Stage 2 public communications as indicated in APPENDIX 2 and/or workforce consultation as required; and iv) notes that there is still significant uncertainty around budget assumptions for 2025/26 which may alter the budget gap. 13. Libraries Learning Centres and Heritage Service Redesign and Savings Delivery [Para 1] The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) informing the Council of the proposed service redesign and savings delivery options in relation to the Libraries, Learning Centres and Heritage Team. Following length consideration in which a number of Councillors raised concerns about the proposals the Council unanimously agreed to: i) note the transformation work undertaken by the Libraries, Learning Centres and Heritage service to date and the future service strategy to meet changing demand/need; ii) note the proposal in regard to future provision of the service which aligns with the savings hierarchy of transformation and service reduction to aid the Council’s short to medium term financial strategy; iii) proceed with consultation on the proposed future service provision; and iv) a report due back to Council in January 2025 on consultation responses. 14. Moray Leisure Centre Update [Para 6] Councillor Morrison joined the meeting at this juncture. Page 30
Page 31
The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) updating Council on developments in relation to Moray Leisure Centre operations. Following consideration, the Council unanimously agreed to note: i) the update in regard to the Moray Leisure Centre expansion plans; ii) the ‘do minimum’ repairs and maintenance required to keep the facility functional for the next 12-18mths; and iii) that a report for further consideration on this will be brought back to a future meeting of the Council alongside the outcome of the sport and leisure asset review, which is planned for December 2024. 15. Review of Out of Hours Service [Para 1 8 and 9] The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) detailing the findings of a review of the Council’s out of hours service and to consider recommendations for an alternative method of service delivery. Following consideration the Council unanimously agreed to: i) note the findings of the review of the Council's out of hours service; ii) approve the Business Case at Appendix I, including the request for funding of £53k from transformation reserves to proceed with the proposed implementation of an alternative method of service delivery; and iii) note that periodic updates on progress will be provided to the Council to monitor and scrutinise progress. 16. Service Level Agreement with Moray Citizens Advice Bureau [Para 9] The meeting had before it a report by the Depute Chief Executive (Education, Communities and Organisational Development) inviting the Council to consider the operational and financial arrangement between The Council and Moray Citizens Advice Bureau (CAB) via a revised Service Level Agreement in respect of the provision of Benefits, Debt and Housing advice. Councillor Divers expressed concern about the paper as he felt it would reduce the service provided to the people of Moray. He added that if Moray Citizens Advice Bureau folds, then all the cases they deal with will revert back to the Council to take on. He moved to defer the report until further information is available. In response, the Head of Governance, Strategy and Performance confirmed that the report could be deferred to allow consultation with the Moray CAB and bring back a further report to a future meeting but was unclear on what further information Councillor Divers sought. He further added that if Council were minded to reduce the funding with a range of amounts then consultation could take place with Moray CAB and a report could then come back to a future meeting with the results of the consultation. Page 31
Page 32
Councillor McLennan echoed Councillor Divers concern but was re-assured by the comments from the Head of Governance, Strategy and Performance but the option was not reflected in the recommendations. Councillor Gatt said that he had great sympathy with what Councillors Divers and McLennan had said and sought clarification on whether Moray CAB could be consulted on all the proposals with a report back on the result of those discussions. The Head of Governance, Strategy and Performance confirmed that this would be possible. Councillor Lawrence noted that there is the possibility of the Shared Prosperity Funding running out in March 2025. In response the Benefits Manager confirmed that it is likely that the funding will continue but at present there is no guarantee. Councillor Robertson suggested deferring the report until after information on the Shared Prosperity Fund is known. Following further consideration the Council unanimously agreed to: i) defer the report until consultation had taken place with Moray CAB on the options and a decision on the Shared Prosperity Fund is known; and ii) delegate authority to the Head of Governance, Strategy and Performance to consult with Moray CAB on the options. 17. Suspension of Standing Orders Under reference to Standing Order 83 the Chair sought agreement from the Council to suspend Standing Order 75 to continue the meeting after 5.00pm. This was unanimously agreed. 18. Cultural Quarter Full Business Case [Para 8 and 9) The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) informing the Council of progress made by the Moray Growth Deal (MGD) to prepare a full business case for the Cultural Quarter project and grant delegated authority to enable final approval of the business case so enabling the project to move into delivery. Councillor Stuart re-joined the meeting during the consideration of this item. Councillor Allan left the meeting during the consideration of this item. During lengthy consideration, concern was raised by a number of Councillors on various aspects of the full business case. Councillor Gatt moved to approve the Full Business Case in principle and that the project is brought back into budget and cost no more than originally agreed. Page 32
Page 33
Councillor McBain added that there had been a huge amount of work put into the project and that Members needed to have confidence in the information before them. Councillor McBain, seconded by Councillor Robertson proposed to agree the recommendations as printed. Councillor Mustard sought to add to Councillor McBain's amendment by adding in a caveat that the Council are not agreeing to anything that has not already been agreed by the Council i.e. Tourist Visitor Levy. Councillor McBain was happy with the addition of the caveat. Councillor McLennan proposed the following amendment: i) agree as printed ii) a report back to a future meeting of Council to agree any final changes as required following completion of the Government review process, with a view to agreeing final versions of each Full Business Case (FBC) to progress to implementation; iii) agree as printed iv) agree as printed v) an urgent report is brought back to a future meeting of the Council on Grant Lodge. Following further lengthy consideration, Councillor Robertson proposed a short adjournment to see whether all members could reach a consensus. On the resumption of the meeting Councillor Gatt withdrew his motion and Councillors McBain and McLennan withdrew their amendments. Councillor Robertson moved the following: i) agree as printed; ii) a report back to a future meeting of Council to agree any final changes as required following completion of the Government review process, with a view to agreeing final versions of each Full Business Case (FBC) to progress to implementation; iii) agree as printed; iv) agree as printed; v) Commitment that £3.9m is being provided by the Council and that any deviation has to come back to a meeting of the Council before any spend, that safeguards are in place and there are no implied decision/actions or agreements such as Tourism Visitor Levy and in other Council funding that requires a separate decision. This was seconded by Councillor McLennan. There being no one otherwise minded the Council unanimously agreed to: Page 33
Page 34
i) considers and approves the Full Business Case (FBC) summarised in this report and contained in Appendix 1; ii) a report back to a future meeting of Council to agree any final changes as required following completion of the Government review process, with a view to agreeing final versions of each Full Business Case (FBC) to progress to implementation; iii) delegates authority to the Depute Chief Executive (Economy, Environment and Finance) or other such signatory as may be required to accept the Government grants for the projects in line with the terms of the MGD; iv) delegates authority to the Depute Chief Executive (Economy, Environment and Finance) to submit applications for funding that will assist in addressing the financial shortfall associated with the project; and v) a commitment that £3.9m is being provided by the Council and that any deviation must come back to a future meeting of the Council before any spend, that safeguards are in place and there are no implied decision/actions or agreements such as Tourism Visitor Levy and in other Council funding that requires a separate decision. 19. Non-Domestic Rates Recovery [Para 6] The meeting had before it a report by the Depute Chief Executive (Economy, Environment and Finance) asking the Council to agree a position on the enforcement of non-domestic rates against a property in Elgin. Councillors Morrison and van der Horn left the meeting during the consideration of this item. Concern was raised by Councillor Fernandes regarding the timing of the paper as it was during a pre-election period. In response Councillor Robertson confirmed that any vote taken on the report would not be published until after the by-election and any enforcement action would take place after 8 November 2024. Following lengthy consideration, Councillor Keith said that the Council needed to be financially prudent and moved to accept recommendation (i) and agree Option 2 in para 6.5. This was seconded by Councillor Fernandes. Councillor Gatt, seconded by Councillor Gordon proposed the recommendations as printed in the report. On the division there voted: For the Motion (5) Councillors Keith, Fernandes, Cameron, Divers and Harris, For the Amendment (15) Councillors Gatt, Gordon, Bloomfield, Colyer, Cowe, Dunbar, Lawrence, Macrae, McBain, McLennan, Mustard, Robertson, Ross, Stuart and Warren Page 34
Page 35
Abstention (1) Councillor Williams Accordingly, the amendment became the finding of the meeting, and the Council agreed: i) to note the three options set out in paragraph 6.5 of this report, and summarised in Appendix 1; and ii) that Officers progress Option 1, with no action being taken until after 7 November 2024. Page 35
Page 36
Page 36
Page 37
__________________________________________________ NOTICE OF MOTION TO MORAY COUNCIL WEDNESDAY 4 DECEMBER 2024 Background This council notes the public concern over the escalation of hostilities in the middle east. In particular in Israel, Gaza, Lebanon and Iran. Council takes no sides and believes that the values of equality, democracy, human rights and the international rule of law are of fundamental importance. Moray has a long-held mission of serving its local people whilst also offering a helping hand to those who find themselves in desperate need, whether at home or hosting refugees from overseas. UK armed forces have already taken part alongside other NATO countries in the region and we are rightly concerned that with two important military facilities located here in Moray, that men and women stationed locally may end up in harms way. Action Moray Council calls on the UK Government to exercise every diplomatic tool at its disposal to seek a cessation of all hostilities at the earliest possible opportunity and to encourage all parties to engage in the internationally accepted need for a 2-state solution, which can be implemented through peaceful dialogue and collaboration of all political sides. Council instructs the Council Leader to write to the Prime Minister seeking diplomatic interventions of the highest level both in the region of hostility and at the United Nations to seek an end to the senseless death and destruction, with innocent lives being taken across several borders. Financial Implications There are no financial implications arising from this motion. Proposed by: Councillor Marc Macrae Seconded by: Councillor Sonya Warren Date Motion Submitted: 7 October 2024 Item 5. Page 37
Page 38
DRAFT LETTER Rt. Hon. Keir Starmer MP Prime Minister 10 Downing Street London SW1A 2AA Dear Prime Minister At a meeting of the Moray Council on Wednesday 4 December 2024 members debated a motion on the ongoing hostilities in the middle east and I am writing to you on behalf of all elected members. Council takes no sides in the conflicts which have arisen and believes that the values of equality, democracy, human rights and the international rule of law are of fundamental importance. Moray Council asks, that as Prime Minister, you will instruct the UK Government to exercise every diplomatic tool at its disposal to seek a cessation of all hostilities at the earliest possible opportunity, and to encourage all relevant parties to engage in peaceful dialogue so that the internationally accepted need for a 2-state solution can be implemented. I hope that you will give this matter the urgent attention it deserves and work not just with your government but those overseas as well as the United Nations to seek the end of hostilities and to end the senseless killing on all sides of innocent men, women and children. Thank you for your attention to this matter and I look forward to hearing from you in due course. Yours faithfully Page 38
Page 39
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: MORAY INTEGRATION JOINT BOARD CHIEF OFFICER UPDATE BY: CHIEF OFFICER, HEALTH AND SOCIAL CARE MORAY 1. REASON FOR REPORT 1.1 To inform the Council of the latest approved minutes of the meetings of the Moray Integration Joint Board and an up to date overview of activities. 1.2 This report is submitted under Section II (22) of the Council's Scheme of Administration relating to the Moray Integration Joint Board (MIJB). 2. RECOMMENDATION 2.1 The Council is invited to consider and note the content of this report. 3. BACKGROUND 3.1 The MIJB was established on 6 February 2016 under the terms of the Public Bodies (Joint Working) (Scotland) Act 2014 with full delegation of functions and resources to enable integration of primary and community health and social care services effective from 1 April 2016. The MIJB is a separate legal organisation and acts as principal in its own right. The principal ambitions of health and social care integration are to: Support the improvement of the quality and consistency of services for patients, carers, service-users and their families. Provide seamless, joined-up quality health and social care services in order to care for people in their homes or a homely setting where it is safe to do so. Ensure resources are used effectively and efficiently to deliver services. 4. KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 The approved minute from the MIJB meeting held on 27 June 2024, which was accepted as a correct record of the meeting on 26 September 2024, can be found at Appendix 1. A few key highlights from the meeting for the Moray Council to note were, the MIJB: Item 7. Page 39
Page 40
27 June 2024 Noted a report by the Interim Chief Officer which detailed activities that support the delivery against the MIJB’s strategic priorities as set out in the Strategic Plan. Approved the unaudited Annual Accounts to be submitted to the external auditor, noting all figures remain subject to audit. Noted the Annual Governance Statement and accounting policies applied in the production of the unaudited Annual Accounts. Approved the updated Local Code of Corporate Governance which supports the Annual Governance Statement. Received a report from the Interim Head of Service and Chief Social Work Officer which informed members of the progress of the replacement social work and social care case management system and approved the project to progress to Outline Business Case. Noted NHS Grampian’s Putting People First framework, ambition and guiding principles and priorities for the foundation years, and considered opportunities for collaboration around the new approach. Noted progress made on delivery of the objectives within the local carer strategy: Morays Unpaid Carers Strategy and instructed the Lead Officer for Unpaid Carers to report back to the Board on an annual basis, and to Clinical and Care Governance Committee quarterly, as a minimum, to monitor the progress of the actions within the strategy. Received a report updating members of a change in strategy for the Telecare transition in Moray, following the announcement by Openreach to extend the deadline for analogue to digital phone line migration from December 2025 to January 2027. The Board approved the revised strategy and the revised financial expectations. Approved the MIJB Directions Policy. 4.2 The link to the webcast and reports submitted to the MIJB meeting on 27 June 2024 can be found here: https://moray.cmis.uk.com/moray/CouncilandGovernance/Meetings/tabid/70/ct l/ViewMeetingPublic/mid/397/Meeting/2320/Committee/18/Default.aspx 4.3 It is recognised that providing a summary of approved MIJB minutes alone offers limited value to the Council. With the aim of providing the Council with an up to date overview of activities please find attached the Chief Officer report, at Appendix 2, which was presented to MIJB on 28 November 2024. The intention is to develop this update report further to provide assurance. 4.4 Approved minutes, reports and link to webcast library for all MIJB meetings can be found here: https://moray.cmis.uk.com/moray/CouncilandGovernance/Committees/tabid/6 2/ctl/ViewCMIS_CommitteeDetails/mid/381/id/18/Default.aspx Page 40
Page 41
5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) This report forms part of the governance arrangements of MIJB; good governance arrangements will support the Board to fulfil its objectives. (b) Policy and Legal There are no policy or legal implications associated with this report. (c) Financial implications There are no financial implications associated with this report. (d) Risk Implications There are no risk implications associated with this report. (e) Staffing Implications There are no staffing implications arising from this report. (f) Property There are no property implications arising from this report. (g) Equalities/Socio Economic Impact An Equalities Impact Assessment is not required as there is no change to policy and procedures resulting from this report. (h) Climate Change and Biodiversity Impacts There are no climate change or biodiversity implications arising from this report. (i) Consultations Consultation on this report has taken place with Corporate Manager, Health and Social Care Moray who is in agreement with the content in relation to their area of responsibility. 6. CONCLUSION 6.1 This report provides a summary of the business addressed by the MIJB at their meeting on 27 June 2024 and an up to date overview of activities. Author of Report: Isla Whyte, Corporate Business Support Manager, Health and Social Care Moray Background Papers: available online Ref: SPMAN-305227695-154 Page 41
Page 42
Page 42
Page 43
MINUTE OF MEETING OF THE MORAY INTEGRATION JOINT BOARD Thursday, 27 June 2024 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Mr Ivan Augustus, Mrs Sheila Brumby, Mr Sean Coady, Councillor Tracy Colyer, Councillor Scott Lawrence, Dr Robert Lockhart, Mr Jim Lyon, Mr Derick Murray, Ms Deborah O'Shea, Mr Sandy Riddell, Mr Dennis Robertson, Ms Elizabeth Robinson, Dr Malcolm Simmons, Mr Kevin Todd, Ms Janette Topp, Councillor Ben Williams Councillor Donald Gatt (for Councillor Peter Bloomfield) APOLOGIES Councillor Peter Bloomfield, Professor Duff Bruce, Mr Adam Coldwells, Ms Sonya Duncan, Ms Jane Ewen, Ms Deirdre McIntyre, Mr John Mundell IN ATTENDANCE Service Manager - Strategic Commissioning; Strategic Development Manager, NHS Grampian; SDS and Unpaid Carers Team Manager; Business Change Manager (TEC); Consultant Psychiatrist and Clinical Lead; Lead for Mental Health and Learning Disability (MHLD) Inpatient, Specialist Services and Children and Adolescent Mental Health Services (CAMHS); Locality Manager - Forres and Lossiemouth and Caroline O'Connor, Committee Services Officer. 1. Chair The meeting was chaired by Councillor Tracy Colyer. 2. Pre-Election Period The Chair reminded the Board the meeting was taking place during the pre-election period and, with regards to discussion relating to the budget, asked that members observe discretion with regards to discussion of any new new policies or actions which may be seen to be politically motivated at a time when it was important that the Board remains politically impartial. 3. Declaration of Member's Interests Item 7. Page 43
Page 44
Mr Riddell stated for transparency that he was Chair of the Mental Welfare Commission Scotland. The Board noted there were no other declarations of member's interests. 4. Welcome and Apologies The Board joined the Chair in welcoming Jim Lyon, who was replacing Tracy Stephen as Interim Chief Social Work Officer, to his first meeting of the Board. The Chair also confirmed Judith Proctor had been appointed to the position of Interim Chief Officer, Health & Social Care Moray from mid July. 5. Minute of meeting of 30 May 2024 The minute of the meeting of 30 May 2024 had been submitted. In respect of Item 18 "General Adult Mental Health Secondary Care Pathway Review Report", Mr Murray stated he had suggested at the meeting that it would be useful if the report was not finalised until such time as the Moray Mental Health Secondary Care Pathway Review was completed and asked that the minute be amended to reflect his comments. The Chair confirmed she was in agreement with the suggested change. Subject to the amendment above, the Committee agreed the minute of the meeting. 6. Action Log of 30 May 2024 The Action Log of the meeting of 30 May 2024 was discussed and updated accordingly. 7. Minute of meeting Clinical and Care Governance Committee of 28 March 2024 The Board noted the minute of the meeting of the Clinical and Care Governance Committee of 28 March 2024. 8. Chief Officer Report The meeting had before it a report by the Interim Chief Officer informing the Board of the Chief Officer activities that support the delivery against the Moray Integration Joint Board's (MIJB's) strategic priorities articulated in the Strategic Plan, and the delivery against the 9 Health and Wellbeing outcomes. Strategic planning needs to maintain a focus on transformational change to deliver services to our community within the resources we have available. 2024/25 is a very challenging year for delivering within the budget, with our two funding partners, Moray Council and NHS Grampian, under considerable financial pressure as well. Following consideration the Board unanimously agreed:- i) to note the content of the report; and ii) that transforming services to meet the aspirations of the MIJB's Strategic Plan remains a priority. Page 44
Page 45
9. Unaudited Annual Accounts 2023-24 The meeting had before it a report by the Chief Financial Officer informing the Board of the unaudited Annual Accounts of the Moray Integration Joint Board (MIJB) for the year ended 31 March 2024. Mr Riddell, as Chair of Audit, Performance and Risk Committee, advised the draft unaudited Annual Accounts had been considered at the Committee earlier that day and agreed to recommend to the Board approval in order that the accounts could be signed off and submitted to the external auditors. Following consideration the Board unanimously agreed to:- i) approve the unaudited Annual Accounts to be submitted to the external auditor, noting that all figures remain subject to audit, in Appendix 1; ii) note the Annual Governance Statement contained within the unaudited Annual Accounts; iii) note the accounting policies applied in the production of the unaudited Annual Accounts, pages 46 to 27 of the accounts; and iv) approve the updated Local Code of Corporate Governance which supports the Annual Governance Statement, in Appendix 2. 10. Carefirst Replacement The meeting had before it a report by the Interim Head of Service and Chief Social Work Officer informing the Board of the progress of the replacement Social Work and social care case management system and the outline business case. Following consideration the Board unanimously agreed to:- i) note the project mandate (Appendix 1) and the enabling work required at 4.9; ii) note the governance arrangements and proposal to use existing resources as set out in Appendix 3; and iii) approve the project to progress to Outline Business Case to be reported back to the Board in September 2024 for consideration of funding requirements. 12. Putting People First - NHS Grampians New Approach to Listening to and Involving People The meeting had before it a report by the Strategic Development Manager, NHS Grampian updating the Board on the new NHS Grampian Putting People First framework and asking the Board to consider opportunities to collaborate around listening to and involving the public in improving services and creating more preventative and sustainable models of care. Following consideration the Board unanimously agreed to:- i) note NHS Grampian's Putting People First framework, ambition and guiding principles and priorities for the foundation years; and Page 45
Page 46
ii) consider opportunities for collaboration around the new approach including the proof of concept areas. 13. Progress Report on Morays Unpaid Carers Strategy The meeting had before it a report by the Lead Officer for Unpaid Carers updating the Board of the progress in delivering on the objectives within the local carer strategy. Preparation and review of the strategy is a requirement of the Carers (Scotland) Act 2016. Following consideration the Board unanimously agreed to:- i) note the progress made in meeting the objectives within the strategy; and ii) instruct the Lead Officer for Unpaid Carers to report back to the Board on an annual basis, and to Clinical and Care Governance Committee quarterly, as a minimum, to monitor the progress of the actions within the strategy. 14. Analogue to Digital Telecare Transition (A2DT) Update The meeting had before it a report by the Interim Chief Officer updating the Board of a change in strategy for the Telecare transition in Moray, following the announcement by Openreach to extend the deadline for analogue to digital phone line migration from December 2025 to January 2027. Following consideration the Board unanimously agreed to:- i) note the current situation in relation to the procurement of a digital alarm receiving centre; ii) approve the the revised strategy for the replacement of analogue devices, which includes the opportunity to collaborate with Digital Health and Care Institute (DHI) to look at more innovative solutions; and iii) approve the revised financial expectations, which have now been attributed over three financial years (having regard to the caveat in paragraphs 4.5 and 4.17). 15. Moray Integration Joint Board - Directions Policy The meeting had before it a report by the Chief Financial Officer providing the Board with a Directions Policy which has been developed in line with the provisions of the Public Bodies (Joint Working) (Scotland) Act 2014 and statutory guidance issued by Scottish Government. Following consideration the Board unanimously agreed to:- i) note the content of this report, the requirements of the Public Bodies (Joint Working) (Scotland) Act 2014 and the statutory guidance issues by the Scottish Government in relation to Directions; and ii) approve the updated MIJB Directions Policy and Procedures as set out in Appendix 1. 16. Options for Ward 4 Inpatient Unit for Patients with Mental Illness [Para 6.2.1] Page 46
Page 47
The meeting had before it a report from the Interim Integrated Service Manager, Mental Health and Drug and Alcohol Service updating the Board on the options for Ward 4, which is the mental health inpatient ward on the Dr Gray's Hospital site. Concern was raised by members of the Board that there was not enough detailed information in the report for a decision to be made at the meeting. The Chair moved to defer the report in order for development work to be undertaken to provide a full detailed report to a future meeting of the Board. The Interim Chief Officer confirmed the necessary work would be undertaken and a further report would be brought back to the Board in approximately 3 months time. Following lengthy consideration and there being no-one otherwise minded, the Board unanimously agreed that further development work be undertaken in order to prepare a full detailed report which would be brought back to the Board for consideration. Page 47
Page 48
Page 48
Page 49
REPORT TO: MORAY INTEGRATION JOINT BOARD ON 28 NOVEMBER 2024 SUBJECT: CHIEF OFFICER REPORT BY: INTERIM CHIEF OFFICER 1. REASON FOR REPORT 1.1 To inform the Board of the Chief Officer activities that support the delivery against the Moray Integration Joint Board’s (MIJB’s) strategic priorities articulated in the Strategic Plan, and the delivery against the 9 Health and Wellbeing outcomes. 1.2 Strategic planning needs to maintain a focus on transformational change to deliver services to our community within the resources we have available. 2024/25 is a very challenging year for delivering within the budget, with our two funding partners, Moray Council and NHS Grampian, under considerable financial pressure as well. 2. RECOMMENDATION 2.1 It is recommended that the Board: i) consider and note the content of the report; and ii) agree that transforming services to meet the aspirations of the MIJB’s Strategic Plan remains a priority. 3. BACKGROUND Home First 3.1 The numbers of patients whose discharge is delayed remains challenging. The current position at time of report is 34 patients delayed, with the target being 26. In response teams are developing innovative ways to tackle this. The Discharge to Assess Team (D2A) has joined forces with the START team (care at home enablement team) to ensure more patients are discharged from hospital after an acute stay and that their ongoing needs are assessed in their own home. This pilot will run throughout November. Additionally, a new link is being piloted between acute hospital and primary care Multi-disciplinary Teams (MDT). This District Nurse Led pilot will see teams from three pilot areas ensure that patients at risk of a complex discharge are discussed and Item 7. Page 49
Page 50
supported by their local MDT as well as their hospital one and will run throughout November. 3.2 Health and Social Care Moray (HSCM) continues with daily strategic MDT and focus on the use of Predicted Date of Discharge. The operational staff investment in this has been recognised across Grampian as an area of good practice and teams in City and Shire are hoping to replicate some of this work. HSCM are linked in with the Grampian and National programmes designed to support work on winter pressures and delayed discharges and are assured on the ability to operationally deploy available resource, particularly during times of intense acute pressure will be invaluable as services head into winter. 3.3 The Making Everyone Opportunity Count (MEOC) Ageing Well Tool is in use in a variety of settings including both primary and community care. A digital version of the tool is currently being piloted in Moray. Realistic Medicine principles and values based care approaches are promoted through taster sessions for HSCM staff and volunteers. A rolling programme of Ageing Well health and wellbeing presentations, focusing on prevention, has been delivered to older people’s groups throughout Moray. 3.4 A final evaluation report was presented to Scottish Government Realistic Medicine Policy Team providing an overview of the Realistic Medicine Wellbeing Coordinator project. Feedback was positive with the original outcomes met and the increased value of the project made clear. The unintended outcomes /opportunities were recognised, with particular reference being paid to the delivery of the Community Appointment Day which promoted values based on shared care decision making. It was noted that the project has supported to link HSCM systems together as well as contributing to the Grampian wide Realistic Medicine action plan and progress. Overall, the project was described as inspiring. Vaccination Programme 3.5 Due to issues with the data collection platform used by the national vaccination team, the data for this report is unavailable, but a comprehensive report will be available for the next reporting period. 3.6 The vaccination team in Moray have delivered the shingles vaccination program which commenced in January 2024, this programme is currently paused and will recommence in January 2025. 3.7 The Respiratory Syncytial Virus (RSV) programme commenced in August 2024, and all eligible citizens will have been offered a vaccine. For Moray, this is in the region of 5,800 citizens. 3.8 Pneumococcal vaccination concluded in September 2024, a total of 26,000 were eligible, this program will recommence in January 2025. 3.9 The COVID-19 and Flu national vaccination programme commenced on 16 September 2024 and is focussing on residents in care homes, all adults aged 65yrs and over, individuals aged six months and over who are in a clinical at- risk group, including pregnant women, front-line health and care workers and staff in care homes for older adults. Bespoke clinics have been made available for staff to maximise opportunities for the uptake of eligible vaccines. Additionally, to reduce unnecessary travel, outreach clinics for those over Page 50
Page 51
75yrs have also been organised within each locality. Options for clinics and the contact centre details are within the letters to residents. 3.10 The vaccination centre will remain at the Southfield location for the next financial year. Ward 4 3.11 Workshops were set up by the Mental Health and Learning Disability (MHLD) Portfolio Board and commenced in November, as part of the Mental Health Bed Base Review for Grampian. The health and care system has remained under considerable pressure, nationally and locally, and has not recovered since the covid pandemic. Royal Cornhill Hospital operates almost entirely at GOPES Level 4, the highest ranking of pressure, on a daily basis. Mental health beds elsewhere in Grampian remain high in demand, often exceeding capacity. Discharging people back into community settings is made more challenging with other sectors also under pressure. 3.12 A bed base review of inpatient mental health beds across Grampian has been commissioned with the aim of achieving a balance between capacity and demand within the resources available. This will include consideration of under usage in some areas, and how pathway redesign can help put balance back into the system. 3.13 A key consideration within the review is that Ward 4, inpatient mental health unit at Dr Gray’s Hospital, may not be operable in the future due to infrastructure issues, and there is a requirement to explore all options, including the potential for a different model of community-based delivery. 3.14 The bed base review recognises the considerable improvement work that is ongoing in a pressured and complex system, and is not intending to replicate that, but to pull on the experience and expertise of those working in the system to understand how to better match capacity to demand, and how the risks associated with any change proposals can be safely managed. 3.15 Workshops were held 6 and 12 November 2024 where data was presented and services were asked to contribute a narrative for each area that explained the data, and to explore solutions to address system pressures. The NHS Benchmarking Network data 2023/24 for Adult and Older People’s Mental Health Services was used to support local data at the workshops. 3.16 A timetable has been set out in the Programme Initiation Document, agreed by the MHLD Programme Board that reaches conclusions on the way forwards within this financial year. Aberlour Medical Centre Update 3.17 The tender interviews have now concluded and the process to transfer Aberlour Medical Practice to the successful candidate is now in progress. The agreed transfer date is 1 April 2025, and the practice will remain under the running of HSCM until that date. Lossiemouth Locality Update 3.18 The Scottish Government report titled ‘Independent Report on the Moray Coast Branch Surgeries Closure’ was presented to the MIJB on the 26 September 2024 (para 15 of minute refers). Page 51
Page 52
3.19 The Head of Service and Deputy Head of Service of, HSCM subsequently met with the Save our Surgeries (SOS) group on 23 October 2024 to discuss the three key points within Recommendation 2 of the report:- The Continued Engagement with Community Groups on the Innovative use of the Burghead Building. At the recent meeting with SOS members and Health and Social Care Moray present explored this further and have agreed to meet again in December 2024. It was noted that the primary structure for service planning will continue to be progressed through the Lossiemouth Locality Planning Group to ensure a 'whole system' approach is taken to service delivery. The Community Empowerment Act. Contact details for staff within Moray Council were provided to further inform the group on the Community Empowerment Act. The Glasgow School of Art. Funding remains an issue however Health and Social Care Moray remain committed to undertaking this work if at all possible. Management capacity 3.20 The programme management office has been established to co-ordinate and support progress of savings projects with the re-deployment of a service manager and part time support manager. Management capacity to progress actions to release savings remains a challenge, so opportunities for development have been identified for circulation with wider staff groups, that are intended to provide additional capacity in key project areas. External Inspections of our services 3.21 The Care Inspectorate carried out an Adult Support and Protection (ASP) Progress Review from July to September 2024 in Moray adult services partnership, as a follow up to their full Inspection of ASP in June 2022. Their report on the findings of the Progress Review was published at the end of October 2024 and highlighted significant improvement, the top of the improvement scale applied, across all the practice areas reviewed. 3.22 The scale of improvement was remarkable which was a result of the passion, and unwavering commitment of those driving forward the ASP Improvement Plan and front-line staff developing their practice. Moreover, it is good news for the people of Moray who experience the need for support in the work we do in adult protection. 3.23 As always with inspections, there are areas requiring further attention including developing our risk assessments and greater involvement of the adults at the centre of adult support and protection. This work will be taken forward diligently within the ASP Improvement Plan. Primary Care Out of Hours (GMED) 3.24 The GMED service has faced recurring difficulties in staffing shifts across its centres. It is not always possible to secure staff through the bank system to cover unplanned absences and staff may decline requests to redeploy to other areas which are short-staffed. 3.25 Agreements have been put in place to limit lone working for clinicians in GMED centres following representations around professional isolation and safe working environments to improve sustainability. Page 52
Page 53
3.26 Contingency protocols activated by GMED in October have included:- Fraserburgh operations: Clinician and driver relocated to Peterhead. Huntly operations: Following a review of protocols, Huntly remains in full operations. These arrangements are subject to daily review to ensure that protocols remain appropriate and safe for both patients and staff. There is no change to the way patients access the GMED service across the Grampian region. 3.27 Early in 2024, Chief Officers for Moray, Aberdeen City and Aberdeenshire health and social care partnerships requested a review of the GMED model. 3.28 The review, led by a programme board, aims to enhance the quality, safety and efficiency of the service while ensuring sustainable workforce levels and promoting staff wellbeing. 3.29 It is anticipated that the review will be completed by the end of January 2025 with review findings due to be presented to the three Integration Joint Boards in March 2025. A programme of engagement and consultation will be included as informed by the national ‘Planning with People’ guidance. 4. KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 To support the acceleration of the MIJB ambitions set out in the Strategic Plan the Delivery plan is currently being refreshed to support next steps 4.2 The challenge of finance persists and there remains the need to address the underlying deficit in core services. The development of a Programme Management Office is in progress to support our financial savings. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) and Moray Integration Joint Board Strategic Plan “Partners in Care 2022 – 2032” Working with our partners to support people so they can cope with, and where possible, overcome the health and wellbeing challenges they may face. Ensuring that the right care is provided at the right place at the right time when people are in need. Ensuring that our systems are as simple and efficient as possible. (b) Policy and Legal The Chief Officer continues to operate within the appropriate level of delegated authority, ensuring that the MIJB is sighted on key issues at the earliest opportunity, and continues to influence and agree the strategic direction. (c) Financial implications There are no financial implications arising directly from this report. The Chief Finance Officer continues to report regularly. There is an ongoing requirement to find efficiencies and to demonstrate best value for money. Page 53
Page 54
(d) Risk Implications and Mitigation The risk of not redesigning services will mean that HSCM and the Moray Portfolio cannot respond adequately to future demands. (e) Staffing Implications Staff remain the organisation’s greatest asset, and engagement with all sectors must continue to ensure full involvement, which will create the best solutions to the challenges faced. HSCM staff are facing continued pressures on a daily basis, and effort into ensuring staff well-being must continue. (f) Property There are no issues arising directly from this report. (g) Equalities/Socio Economic Impact Any proposed permanent change to service delivery will need to be impact assessed to ensure that HSCM are not disadvantaging any section of the community. HSCM will continue to work closely with all partners ensuring the continued contribution to the health and well-being of the community and support the recovery phase of the Covid-19 pandemic. (h) Climate Change and Biodiversity Impacts Care closer to and at home, delivered by teams working on a locality basis, will reduce HSCM’s reliance on centralised fixed assets and the associated use of utilities. (i) Directions There are no directions arising from this report. (j) Consultations The Moray Portfolio Senior Management Team, the Legal Services Manager and Caroline O’Connor, Committee Services Officer have been consulted in the drafting of this report. 6. CONCLUSION 6.1 The Board are asked to acknowledge the significant efforts of staff, across in-house providers, externally commissioned services, the Independent and Third Sector, who are supporting the response to the recovery, and the drive to create resilience and sustainability through positive change. 6.2 The size of the financial challenge facing the MIJB, and also its two funding partners, means that redesign and transformation is not an option but a necessity. HSCM’s approach will be to prioritise quality, safety and good outcomes in all service redesigns. Author of Report: Judith Proctor, Interim Chief Officer, Moray Portfolio Page 54
Page 55
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: MEDIUM TO LONG TERM FINANCIAL STRATEGY BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To ask Council to consider an updated financial strategy to facilitate medium to long term financial planning. 1.2 This report is submitted to Council in terms of Section III (A) 2 of the Council's Scheme of Administration relating to long term financial plans. 2. RECOMMENDATION 2.1 It is recommended that Council approves the updated Medium to Long Term Financial Strategy at APPENDIX 1 to this report. 3. BACKGROUND 3.1 The Council’s Corporate Plan provides direction and focus for financial planning through clarification of corporate priorities. Council, on 28 February 2024 (paragraph 5 of the Minute refers), approved the Corporate Plan 2024- 29 and the approach to delivery and performance management through service and strategic plans. The Medium to Long Term Financial Strategy forms part of a suite of documents, including the Corporate Plan, used to facilitate planning, and was approved at the meeting of Council on 25 October 2023 (paragraph 9 of the Minute refers). 3.2 The objective of the Medium to Long Term Financial Strategy (MLTFS) is to provide clear guidance on how the Council can manage its financial resources in the next 10 years to ensure that effective financial planning contributes to the Council achieving its Corporate Priorities. 3.3 The Council faces significant challenges: to remove the reliance on reserves (the structural or underlying deficit in funding), to contain budget pressures from increased demand in services and the cost pressures arising from inflation. The strategy collates all known factors that affect the financial position and financial sustainability of the Council over the term, in one place, and addresses their impact on tackling these challenges. Item 8. Page 55
Page 56
3.4 The Financial Strategy identifies the principal cost drivers for the Council’s services and looks at the impact of these under a number of different scenarios - essentially taking a range of options for these cost drivers from an optimistic to a more pessimistic point on a scale, with a mid-point position. This enables an assessment of the possible financial position of the Council over the next ten years. As noted in the Strategy, the characteristics of a long-term financial strategy are quite different from a short term strategy, with the focus being on factors which are uncertain and a low degree of detail, looking at scenario planning to give a range of expected outcomes. 3.5 The Strategy also sets out the main vehicles which the Council will use to make strategic shifts in expenditure, in order to achieve financial sustainability and this has been updated to reflect work which has been ongoing over the last year and emerging work streams now planned for the future. The main vehicles will be asset management, service redesign and planning for future demand. As workstreams in these areas are developed they will be reported back to Council for approval. 3.6 This Strategy will be reviewed annually as part of the Council’s financial planning process. 3.7 The Strategy includes consideration of increases in Council Tax. The assumption for the medium to long term is that increasing Council Tax will remain a realistic option for Scottish local authorities, although one scenario shown in the Appendix is for a Council Tax freeze. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The Financial Strategy is a companion document to the Corporate Plan. (b) Policy and Legal There are no direct policy and legal implications arising from this report. (c) Financial implications There are no direct financial implications arising directly from this report. The Financial Strategy sets out the financial parameters within which the Council’s financial planning activity is expected to take place over the next ten years and looks at the main means of mitigating potential budget gaps. (d) Risk Implications Although the Strategy looks at the long term, the further off the financial projections are the greater risk of inaccuracy. (e) Staffing Implications No staffing implications arise directly from this report. (f) Property No property implications arise directly from this report. Page 56
Page 57
(g) Equalities/Socio Economic Impact There are no equalities issues or impact on the socio-economic duty arising from this report. (h) Climate Change and Biodiversity Impacts There are no implications for Climate Change and Biodiversity arising directly from this approach. The Council’s Climate Change Strategy and Road Map to Net Zero will have significant influence on the Council’s planned future spend. (i) Consultations The Medium to Long Term Financial Strategy has been prepared in consultation with CMT and SMT. 5. CONCLUSION 5.1 The Financial Strategy provides a detailed consideration of the factors which will impact on financial planning over the medium to long term and sets out the factors which the Council will have to consider in realigning its finances to achieve financial sustainability. 5.2 Reflecting the Council’s current plans and the wider context in which the Council makes these plans the Strategy indicates a continued challenge to achieve and maintain financial stability. Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Ref: SPMAN-1293228629-1185 Page 57
Page 58
Page 58
Page 59
1 APPENDIX 1 Medium to Long Term Financial Strategy 2025/26 to 2034/35 1. Introduction 1.1 The objective of the Medium to Long Term Financial Strategy (MLTFS) is to provide clear guidance on how the Council can manage its financial resources in the next 5 to 10 years to ensure that effective financial planning contributes to the Council achieving its Corporate Priorities. 1.2 The MLTFS forms part of a suite of documents used in the Council’s financial planning: the three-year budget reported when the Council Tax for the year is set, and the budget regularly updated in reports to Council the indicative 10-year Capital Plan, underpinned by the Council’s Capital Strategy the Council’s Reserves Policy the Council’s Charging Policy the Treasury Management Policy the Short to Medium Term Financial Strategy (SMTFS) sitting above all these, the Council’s Corporate Plan 1.3 The Council faces significant challenges: to remove the reliance on reserves (the structural or underlying deficit in funding), to contain budget pressures from increased demand in services and the cost pressures arising from inflation. 1.4 Given the extent of financial challenges experienced by local authorities it is vital that the Council develops an understanding of the wider financial environment within which it functions. The MLTFS will help enable that by identifying and managing risk factors and ensure that the Council shows resilience by being fully aware of the key financial challenges and uncertainties that it faces. This will place them in a stronger position for successful delivery of their Corporate priorities. 1.5 The key objectives of the MLTFS are: Summarise the Council’s financial position over the next 10 years for the period 2025/26 to 2034/35 based on a range of scenarios. Identify and explain the key variables that are influential in the financial planning of the Council and quantify the potential impact of these together. Provide a framework which enables the Council to effectively allocate its financial resources to achieve its objectives. Focus on the resources available to the Council to ensure they are directed to support the Corporate Plan. Ensure that the Council is fully aware how current financial challenges and uncertainties may impact on the financial position of the Council for the period of the Strategy and how to be resilient in its decision making. Item 8. Page 59
Page 60
2 Help achieve a sustainable and balanced budget without the need for reserves to balance the budget. Highlight and maximise the importance of income generation in the period of the MLTFS. 2. Key Financial Levers 2.1 Financial levers adopted in the SMTFS, the latest version of which was approved by Council on 26 June 2024 (paragraph 11 of the Minute refers) are key to both the short to medium and medium to long term financial strategies of the Council. The movement from each of these levers impacts on the others and the ability to get a sustainable, balanced budget. Council Tax Other Income generation Staff establishment Asset base 2.2 The SMTFS sets out a strategy to remove the structural deficit embedded within the Council’s revenue budget, setting out a strategy to achieve a balanced and sustainable budget in 2025/26 and is underpinned by a Savings Delivery Plan, approved by Council on 25 September 2024 (paragraph x of the Minute refers). 2.3 This MLTFS builds on that and extends the financial planning timeframe to 10 years, looking at the key influences and cost drivers that are considered to have the most bearing on the sustainability of the future budget. Characteristics of financial planning horizons in the Short, Medium and Long term as described by CIPFA are set out in the table below. Short Term Medium Term Long Term Nature Budget Financial Plan Financial Strategy Timeframe Annual 2-5 years 3-10 years + Focus Accountability Performance Transformation Unpredictability Risk Risk/Uncertainty Uncertainty Financial Techniques Estimating Forecasting Scenario Planning Level of Detail High Medium Low Page 60
Page 61
3 2.4 The MLTFS plays an important role in the financial planning process as it reinforces the long-term sustainability of the Council by ensuring that the financial outlook required to provide good quality services are sustainable within a changing economic outlook over the next 10 years. 2.5 The strategy makes a number of key assumptions and, while it is recognised that future projections covering a 10 year period will contain a degree of uncertainty, these assumptions are clearly laid out below, and will be updated annually to reflect latest developments. The approach for the assumptions is to assume a range of possible outcomes with an optimistic (i.e. a positive for the Council budget), a pessimistic (negative position for the Council) and a mid-range scenario. In this document it is taken that the mid-range scenario will be the most likely outcome. With that, the mid- range does assume a prudent position where applicable and these will be explained throughout. 2.6 The strategy places a lot of importance on achieving strategic and significant cost- cutting/savings proposals, in line with the Council’s priorities within the Corporate Plan. The intended outcome of the financial strategy is a sustainable financial plan, with planned revenue expenditure met by budgeted revenue income and use of earmarked reserves for planned spending for specific outcomes. 2.7 The strategy covers the period 2025/26 to 2034/35 with 2024/25 as base year. The main focus is on 2027 onwards as the Short to Medium Term Financial Strategy covers years 1 and 2 and is more detailed than this high-level strategy. It will: Highlight the key influences, risks and cost drivers for the Council’s service delivery Outline the Council’s high-level position over the years 2025/26 to 2034/35 Facilitate planning ahead to enable the impact of change to be managed more proactively and effectively Plan for a sustainable revenue budget and capital investment programme which will support the Council’s priorities and address the key issues for Moray Assist in increasing the people of Moray’s understanding of the Council’s financial position and the challenges facing it over the next ten years. 2.8 This Strategy sets out the financial roadmap for the Council for the medium to long term and gives background to the various financial pressures and drivers that will impact on the wider economy, and the communities in Moray. It will be reviewed annually as part of the Council’s financial planning process, with updates of the short- medium term position reported to Corporate Management Team and Corporate Committee on a regular basis. The inclusion of information in the Strategy does not imply approval. All financial estimates are subject to approval by Council as part of the budget setting process. 2.9 The scope of this Financial Strategy is the Council‘s General Fund. The Council’s Housing Revenue Account (HRA) is ring-fenced, according to statutory requirements, and consequently financial planning for the HRA is a separate exercise. Page 61
Page 62
4 3. Influences and Risks 3.1 There are several factors influencing the financial sustainability of the Council over the short, medium and long term as shown below. The MLTFS considers a number of macro-economic issues, some of which are outwith the Council’s control and others that are internal and can be influenced by the Council’s decision making. These are summarised in the table below. External Climate Internal Economic factors Rate of Inflation Interest rate fluctuations Level of grant funding from the Scottish Government Pay agreements Demographics Taxation changes impacting on the Council Climate change – Council’s policy and legislative requirements Flooding Storm damage Winter maintenance Corporate priorities Transformation of services Asset Management of the Council’s schools and other properties Other service costs efficiencies and reduction Participatory Budgeting, commitment to giving communities the influence on decisions for 1% of the Council’s budget The Council’s Treasury Management function and financing of the capital programme Council Tax levels 3.2 These are key variables that influence the financial planning of the Council and, while not an exhaustive list, these will be measured using a scenario basis that can be routinely updated to keep assumptions in line with the economic outlook. In doing so this ensures that the Council continues to meet its statutory obligations in line with its corporate policies. The key variables to be used are: Inflation, including pay awards Anticipated Scottish Government funding Council Tax levels Interest rates and loans charges Demand on services Savings from Transformational change Other efficiencies and cost reduction Page 62
Page 63
5 3.3 The following variables have been considered in preparing the 10-year plan: Funding from the Scottish Government Council Tax levels Inflation provision for pay awards and contracts Loans charges and the cost of borrowing to fund investment in the Capital Plan Increased demand for services e.g. Health and Social Care services Charging for services to maximise income generation Investment in modernisation of the Councilthrough Transformation/Council of the Future, includingAsset Management andService redesign/review of processes 4. Cost Drivers and Variables 4.1 The Council’s budget of £368 million gross revenue expenditure for 2024/25 includes £193 million for employee costs. Pay awards and pension costs are key cost drivers for the Council. Pay awards for 2024/25 have been agreed for teaching staff and recent negotiations for non-teaching staff at higher than the Council has budgeted for this year, any further increases will have a substantial effect on current and future years financial planning. 4.2 A significant proportion of the Council’s services are outsourced, with 18% of the Council’s expenditure being on services delivered by third parties. The procurement process therefore has a strong influence on the costs borne by the Council and significant savings have been made by procurement on the purchase of supplies and services as well as on out-sourced services. 4.3 The split of the Council budget is shown below. Employee Costs , 52% Property Costs , 6% Supplies and Services, 10% Transport & Plant Costs, 5% Support Services, 0% Third Party Payments, 18% Transfer Payments, 7% Financing Costs, 2% 2024/25 Budget Page 63
Page 64
6 Inflation 4.4 Cost pressures arise from the Council’s contractual obligations which are uplifted for inflation. Such inflationary uplifts are difficult to forecast as a result of uncertainties in the economy and how effective attempts by the Bank of England at reducing inflation will be, especially within the projected timescales. Inflation affects a small number of significant contracts – in particular the PPP schools contract – and also covers potential increases in utilities; energy prices have been one of the main forces in driving inflation levels in recent years. The cost of utilities and fuel has been volatile over the past couple of years, with additional budget pressures identified in the revenue budget for these areas. 4.5 The outlook for inflation remains a key source of uncertainty yet has a crucial influence in long term financial planning, particularly around pay and core contract inflations increases that are often linked to, or kept as closely aligned as possible, to the inflation rate. 4.6 Consumer Price Index (CPI) inflation peaked in the fourth quarter of 2022 at its highest rate in around 40 years. Inflation has been falling recently at a faster rate than was previously forecast. The path of inflation is to return to the Treasury’s 2% target. 4.7 The Scottish Fiscal Commissions (SFC) are a non-Ministerial Office who produce Scotland’s official, independent economic and fiscal forecasts to accompany the Scottish Government’s Budget cycle, and who are accountable to the Scottish Parliament for their functions (set out in the Scottish Fiscal Commission Act 2016), reporting twice a year. The Office for Budget Responsibility (OBR), an official independent fiscal watchdog that produces detailed forecasts for the economy and public finances, also provide UK Government with forecast data. The OBRs most recent forecast in August 2024 indicates a decline in the rate of inflation before levelling off to the 2% target thereafter for the remainder of the ten-year outlook, as the diagram below shows. CPI inflation remained just above the 2% target in August, with the Bank of England expecting this to increase to around 2.5% in the second half of this year as lower energy prices drive most of the downward revision and the impact of other domestic inflationary pressures come to light. 4.8 The OBRs most recent forecast in October 2024 make an initial assessment of the economic and fiscal effects of the new UK Government’s Budget, set out in October 2024. With CPI inflation having fallen back to around 2% mid 2024, the impact of Budget policies, including the increase in employers National Insurance Contributions (NICs) taking effect from April 2025 onwards, is expected to push up CPI by around 0.5% at its peak, meaning it is now projected to rise to 2.6% in 2025 and then gradually fall back to the target bank of England rate of 2% as the effects of the Budget measures fade out. Compared to the March 2024 forecast shown in paragraph 4.8, inflation is now expected to be 1.1% higher in 2025 and 0.6% higher in 2026. Page 64
Page 65
7 Source: ONS, OBR - Economic and Fiscal Outlook October 2024 Forecasts for Inflation (CPI, year on year) 4.9 The latest published forecast CPI inflation rates from the OBR from March 2024 are: 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 Inflation (Consumer Price Index (CPI)) 1.55% 1.60% 1.67% 1.97% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Source: Office for Budget Responsibility "Long-term economic determinants - March 2024 Economic and fiscal outlook" 4.10 W hen the 2024/25 revenue budget was approved, indicative figures for 2025/26 and 2026/27 were based on the forecast assumptions at that time that inflation, having peaked at over 11% in October 2022, would rapidly return to the 2% target. A budget provision of £4.7m was included in the 2024/25 budget for expected inflationary increases, including pay awards. Demographics 4.11 Population changes vary across Scotland, and between council areas from one year to the next. The National Records of Scotland most recent population estimates report is the Mid-2023 Population Estimates, Scotland 4.12 The population of Scotland has been increasing every year for the last 20 years and is projected to continue rising until around mid-2033 before beginning a gradual decline over the following two decades. Population change is driven by two main factors: natural change (number of births minus the number of deaths) and net migration (the number of people moving into an area minus the number of people leaving). Scotland’s population is ageing. An estimated 20.3% of the population were aged 65 and over, an increase from 16.1% in 2003. An estimated 16.3% were aged 0 to 15 years, a decrease from 18.7% in 2003. Page 65
Page 66
8 4.13 In Moray, the population grew by 6.6% from 2003 to 2023, with an increase of 0.4% in the year to June 2023, which can be further analysed as -0.5% natural change, +0.8% net migration and 0.1% due to other changes. The population is currently expected to decrease by 0.1% in the 10-year period between 2018 and 2028. Moray’s population is ageing, with life expectancy and healthy life expectancy for both men and women above the Scottish average. The age structure of the population in Moray in mid-2023 (with the mid-2021 figures in brackets for comparison) was: 0-15 years 16% (mid-2021 17%), 16-64 years 60% (mid-2021 61%) and 65 years and over 23% (mid-2021 22%). This trend indicates a reducing number of children with an even greater level of ageing population settling in Moray. Between 2018 and 2028 the age group 90 years and over is projected to see a +50.9% increase. The number of households in Moray has increased by 22.4% since 2001, at a more rapid change than the Scotland level for the same period (+15.5%). The level is projected to increase even further by 3.4% up to 2034. (Source National Records of Scotland, Household Estimates 2023). Likewise, the number of dwellings had steadily increased in the period from 2001 to 2023. In Moray, Council Tax band A has the highest proportion (25.3%), followed by Council tax band B (22.5%), with Council Tax band H the least (0.2%). 4.14 Primary and secondary school roll projections forecast a decrease in total over the next three years. This will impact on demand for services and also on grant support from Scottish Government under the present method of allocating general revenue grant. School pupil data is collected through the annual school pupil census. 4.15 A significant element of Scottish Government grant funding is allocated through Grant Aided Expenditure (GAE). GAE uses statistical measures to apportion funding across local authorities. Over 30% of GAE is linked to the number of school pupils in primary and secondary education. A further 15% is linked to population, either of a certain age group, working age population or the total population. The impact of demographic changes; migration, population growth may lead to funding changes for specific services particularly Education and will fall within the timescale of this strategy. The updated population projections will be reviewed to estimate the likely impact on income for the Council and to assist in financial planning for services likely to be impacted by changing population numbers. 5. Financial Outlook – Key factors and assumptions Funding from the Scottish Government 5.1 Scottish Government funding through General Revenue Grant (GRG) and the allocation of Non Domestic Rates (NDR) income accounts for around 77% of the Council’s funding, with the balance to be funded from Council Tax income and the utilisation of Council reserves. Single year settlements from the Scottish Government mean the Council must make assumptions in the revenue plan from years 2-10, and plan on that basis. For financial year 2024/25 a one year settlement was provided in December 2023. 5.2 The chart below shows the breakdown of funding sources budgeted for the Council in 2024/25. Page 66
Page 67
9 77% 18% 5% Scottish Government Funding Council Tax Use of Reserves Sources of Council funding 2024/25 5.3 The block grant from UK Treasury to the Scottish Government is based on the Barnett Formula and any changes in UK Government funding in addition to Scottish Government policies and economic forecasts may impact on the level of Council funding. Notably UK Government have departed from Barnett to separately negotiate funding to cover the impact of the recently announced amendments to employers national insurance contributions on the public sector. The likely result of this is at present unknown. 5.4 The current assumption in the MLTFS is that there will be a flat cash settlement each year in the core grant from the Scottish Government. Each 1% movement from this flat cash position accounts for around £2m of movement in funding. This is a particularly important assumption in financial planning. 5.5 In June 2023 the Verity House Agreement was signed between the Scottish Government and Local Government which was expected to support the Scottish Government’s proposed new deal for Local Government. A commitment was made to agree a new Fiscal Framework governing how funding is allocated to local authorities, reducing ring fencing and giving them greater flexibility over their budgets to meet local needs, by giving the freedom to be resourceful and removing the administration that ring-fenced funding and specific grants often come with. In financial year 2024/25, £9m of funding previously ring-fenced by Scottish Government has been baselined as part of that commitment. A multi-year funding settlement from Scottish Government including clarification on the remaining ring-fenced funding remains the aim for local government. There has also been a commitment from the Scottish Government to produce multi-year settlements which would allow more accurate forecasting to take place at all levels of government. 5.6 The Scottish Government’s Medium Term Financial Strategy published in May 2023 stated that “In order to prioritise the programmes that will have the greatest impact on delivery of our three missions, such as early learning and childcare, we will need to deprioritise programmes that make a less meaningful contribution to our central missions.” This suggests that local government (except for these priority areas) will be viewed as lower priority and subject to further reductions in funding support. It is expected that the Scottish Government will provide clarity on details of its financial Page 67
Page 68
10 strategy following the UK Budget in late October 2024, prior to the Local Government Finance Settlement in December 2024. 5.7 Until the settlement is announced, non-protected budgets are expected to face reduced settlements in the medium to long term. The optimistic scenario assumes a 2% increase from 2025/26, mid-range assumes 1% increase for one year then flat cash for the remainder of the plan. The pessimistic scenario assumes a 1% reduction year on year. The optimistic scenario is that the local government settlement covers target inflation but no growth. The pessimistic scenario assumes no inflation uplift and a reduction in nominal terms. These ranges are based on ranges used by various economic commentators and fall within the range of options being considered by other Scottish local authorities for planning purposes. This translates to the cash movements detailed below. Increase 2% - £4.34m No increase Decrease 1% (£2.17m) Optimistic Mid-range Pessimistic Assumption +2% Flat cash -1% Year 1 £4.340m - (£2.170m) Year 2 £4.427m - (£2.148m) Year 3 £4.516m - (£2.127m) Years 4-10 £34.242m - (£14.305m) Council Tax Income 5.8 Council Tax income accounts for 18% of the Council’s revenue and is the main fiscal lever that local authorities have. In setting Council Tax, estimated income is based on a combination of Band D equivalent numbers (the Council Tax base), householder base (single occupancy and other discounts) and the expected rate of collection. 5.9 The Council has discretion to increase tax levels however this has been capped in recent years through conditions set out by the Scottish Government in the annual local government settlement. The Council’s Band D equivalent was £1,135 for 10 years between 2007/08 and 2016/17 when the Scottish Government’s Council Tax freeze ended. The freeze was reinstated in 2021/22 during the Covid-19 pandemic and again in 2024/25 when its Band D equivalent is £1,431. 5.10 The rate of Council Tax must provide the Council with a degree of certainty around current and future funding levels. The system must therefore be stable and buoyant to provide this certainty and must not expose the Council to an unmanageable degree of financial risk by reduced collection rates. The number of chargeable dwellings between bands increase modestly year on year, reflecting new dwellings and developments in the area as well as properties removed. 5.11 There are general assumptions made when budgeting for Council Tax revenue raised: collection rates and the buoyancy of the tax base. The scenarios adopted in the long- term planning are twofold: increases in Council tax and an assumption for an element of growth in the tax base. Page 68
Page 69
11 5.12 For each 1% increase in Council Tax rates, at current 2024/25 rates, the Council could raise approximately £500,000 in additional revenue. For scenario planning the following key assumptions have been made in relation to Council Tax increases: all scenarios include a 1% increase in the number of chargeable dwellings each year, and maintain a stable collection rate of 98.5% (96.5% in year + 2% prior year recoveries) as these are not variables the Council has control over, although it is appreciated that as the % rate increases so does the risk of failure to pay resulting in a decrease in collection rate. 5.13 Council at its meeting on 12 December 2023 (paragraph 7 of the Minute refers) agreed as part of the Short to Medium Term Financial Plan update, that an increase on Council tax for 2025/25 and 2026/27 above the rate of inflation would be required to catch up on lost revenue from the Council tax freeze, with an increase of 7% included as the minimum intended increase for 2025/26 and a further 6.2% increase in 2026/27. At the same meeting Council approved the revised Charging for Services Policy and agreed the default increase for fees and charges for Council Services for the period 2024/25 to 2026/27. The revised Charging Policy is a default increase of CPI including owner occupiers housing costs (CPIH) plus 1% as measured for October of the year before the increase takes effect. These two positions constitute the Council’s Income Strategy for the short to medium term. 5.14 The scenarios for Council tax receipts are: the pessimistic scenario – from the baseline of the Council’s Income Strategy which seeks to preserve the real value of income to the Council – is based on a 3% increase in rates, which long term would be just above an inflationary increase The mid-point scenario is based on the Council’s revised Charging Policy for a default increase of CPI including owner occupiers housing costs (CPIH) plus 1% as measured for October of the year before the increase takes effect. This includes a factor to recoup income foregone from the 2024/25 freeze; 7% in 2025/26 and 6.2% in 2026/27. the optimistic scenario from a funding perspective assumes a 5% increase. A Council Tax freeze is also shown and the income projected is solely from the growth in the tax base of 1%. For this to be a practical option, a premise of Government Grant to match the projected shortfall in Council Tax receipts would be required. 5.15 In summary, additional revenue income generated from Council tax receipts year on year are as follows: Optimistic Mid-range Pessimistic Council tax freeze Assumption 5% CPIH+1% 3% Year 1 £3.075m £4.102m £2.048m £0.508m Year 2 £3.261m £3.989m £2.131m £0.513m Year 3 £3.458m £2.535m £2.217m £0.518m Years 4-10 £30.833m £19.579m £18.231m £3.778m Page 69
Page 70
12 5.16 Other revenue-raising methods that may give rise to additional income depending on the development of Council policy are: Council Tax on second homes and empty properties – currently charged at legal maximum NDR Empty Property Relief Local Visitor Levy Following changes in legislation the Council has adopted a premium on second homes and a levy on empty homes and has taken a policy position on NDR empty property relief. No further changes are assumed in the Medium to Long Term Financial Strategy and given the uncertainties about any future proposals for Council Tax nationally, no additional income is assumed at this stage. It would not be prudent to import this into longer term calculations without a degree of certainty. The Council will investigate the implications of raising funds through a Local Visitor Levy (tourist tax). MSPs have given approval for legislation giving local authorities a new discretionary power to introduce a levy on stays in overnight accommodation in their area, at a rate to be set by them. Revenue income raised from a visitor levy will be required to be reinvested within the visitor economy such as facilities or services substantially for or used by visitors. The intention is that funds raised are in addition to the local government settlement. An 18-month implementation period will apply before and levy scheme can be introduced to enable councils and businesses adequate time to put in place the systems required to administer and collect a levy therefore it is estimated the earliest date for putting into practice the levy is 2026, with an update report to Council due in early 2025. Pay 5.17 Pay accounts for over 72% of budgeted net expenditure across the Council. The Council’s financial planning requires to forecast future pay settlements as 1% change can result in a significant cost to the Council if not funded. Pay agreements for Council staff, including teachers, are negotiated at a national level. The 2023/24 budget process saw 3% included for the pay award however, as circumstances in the economy quickly changed with inflation rapidly increasing, and the cost of living crisis, pay awards actually averaged over 6% in the year, after agreements were reached for both the Scottish Negotiating Committee for Teachers (SNCT) and Scottish Joint Councils (SJC) pay deals. A funding package from the Scottish Government for the local government pay settlement has been agreed with Councils notified of allocations in October. The Council must satisfy itself that the pay bill and pay awards for the workforce are affordable and sustainable and remain within existing budget allocations. 5.18 In response to high inflation, average pay growth accelerated in 2022/23 and 2023/24 and continues to remain above current inflation, with uncertainty surrounding future years. The Council’s financial planning requires to take a sensible approach to future pay settlements as it is such a significant portion of the budget that even a modest change in assumption can affect the decisions made regarding the other financial levers. Page 70
Page 71
13 5.19 The Scottish Government’s 2024/25 Public Sector Pay Policy was published in May 2024, at a time when the pay awards for 2024/25 for much of the Scottish Public Sector were still in negotiation. Key features of the 2024/25 policy are: A multi-year framework from 2024-25 to 2026-27 which would offer pay metrics above forecasted levels of inflation (the Scottish Government use average Bank of England and Office of Budget Responsibility as sources for inflation); Pay metrics must balance flexibility with fairness and affordability; Agreeing a multi-year deal between Scottish Government, employers and Trade Unions Source: Scottish Government Public Sector Pay Policy 2024-25 5.20 For planning purposes, alternative scenarios are presented in the tables below. The multi-year framework set out in the Public Sector Pay Policy offers a deal above forecasted levels of inflation; 3% in the three years from, and including, 2024/25. The 2024/25 pay settlement has been agreed at a minimum rate of 3.6% for non-teaching staff and 4.27% for teachers. However. at 1% higher than the target rate of inflation, 3% has been maintained as the pay metric and is the mid-point scenario for future pay deals. The Scottish Government previously set a pay floor of 2%, therefore this is the optimistic scenario in the model. The pessimistic scenario, assuming a pay award to be fully funded by the Council, is 4%. All scenarios shown below are the budget pressures that would be borne by the Council; funding or flexibilities offered by the Scottish Government, and the impact on the rest of the Council’s budget, are not included. 5.21 In summary, budget cost pressures arising from workforce pay increases are as follows: Optimistic Mid-range Pessimistic Assumption 2% 3% 4% CPI forecast Year 1 £4.00m £6.01m £10.02m £5.2m Year 2 £4.01m £6.19m £10.52m £4.67m Year 3 £4.17m £6.38m £11.05m £4.21m Years 4-10 £31.62m £50.33m £94.44m £31.89m Contract Inflation 5.22 The provision for inflation needs continual monitoring in terms of the short-medium and medium-long term financial planning of the Council as, although inflation is continuing to show signs of stabilising at the target rate, lessons have been learned from the last few years just how exposed the Council is to economic factors such as how the conflict in Ukraine has impacted significantly on inflationary pressures, particularly energy prices, and the corresponding rise in interest rates having an impact on borrowing costs. Uncertainty remains high, particularly for the economy with expectations of how inflation and interest rates will go forward together and in order to be more prudent the MLTFS errs on the side of caution in such a volatile situation. 5.23 Key contracts receive an uplift in line with inflation for the prior 12-month period. For scenario planning, the mid-range scenario will apply a more cautious rate of the Page 71
Page 72
14 forecast inflation rate in the table +2% before stabilising at 2% in 2028/29 as forecasts suggest, thus removing the drop to 0% in assumptions, which is still a positive outlook given the volatility that national and global events can have inflation and interest rates. The optimistic scenario will be 1% less (until assuming the 2% target from 2028/29) and the pessimistic at 1% higher than mid-range. 5.24 The areas of cost pressures for inflation provisions, which are looked at individually below, are: Contracts – service contracts Contracts – PPP, Energy Pay 5.25 In summary, cost pressures arising with service contract inflation (excluding pay awards, energy and PPP contract uplifts which are shown separately) are as follows: Optimistic Mid-range Pessimistic Assumption Mid-range -1% CPI forecast +2% Mid-range +1% Year 1 £0.369m £0.476m £0.585m Year 2 £0.347m £0.462m £0.582m Year 3 £0.318m £0.433m £0.552m Years 4-10 £1.681m £1.844m £2.765m Energy Contracts 5.26 Energy costs include oil, gas, metered electricity, water and street lighting and unmetered electricity. The nature of these costs is such that inflation is not the only influencing factor; markets are volatile and affected by the national and global economy. As such, to predict with any level of accuracy the long-term position on energy costs is impossible and current forecasts available to the Energy Team only go to 2026/27. Updated prices and consumption along with forecast are reported each year in the annual Energy Report. The scenarios have been calculated using 2023/24 full year consumption as a basis. However, energy efficiency measures as part of the Council’s Road Map to Net Zero may go some way to reduce energy consumption. 5.27 Scenarios for energy costs have been calculated on the same basis as contract inflation above but with a wider range given the volatility of the energy market: the mid- range adopts forecast CPI +2% until levelling at 2% in 2028/29, the optimistic scenario will be 4% less and the pessimistic at 4% higher than mid-range. Optimistic Mid-range Pessimistic Assumption Mid-range -4% CPI forecast +2% Mid-range +4% Year 1 (£0.031m) £0.245m £0.522m Year 2 (£0.041m) £0.329m £0.639m Year 3 (£0.019m) £0.320m £0.668m Years 4-10 (£0.00m) £1.337m £3.205m PPP/PFI Contract Page 72
Page 73
15 5.28 The Council’s schools PPP/PFI contracts are significant contracts that attract an annual inflationary increase for the payments. The level of uplift applicable to the contract is the value of the Retail Price Index (RPI) for the month of February immediately preceding the indexation review date (1 April) compared to the value of RPI at the base date. As with the above scenarios for service contract and energy costs, the PPP assumptions will follow the same reasoning: the mid-range scenario will apply the forecast RPI rate +2% before stabilising at 2% in 2029/30 (two years behind CPI), the optimistic scenario will be 1% less (until assuming the 2% target from 2029/30) and the pessimistic at 1% higher than mid-range. 5.29 In summary, budget pressures associated with the PPP contact are as follows: RPI Optimistic Mid-range Pessimistic Assumption Mid-range -1% RPI forecast +2% Mid-range +1% Year 1 £0.287m £0.373m £0.458m Year 2 £0.283m £0.375m £0.469m Year 3 £0.331m £0.431m £0.534m Years 4-10 £1.176m £1.987m £2.891m The Cost of Capital Borrowing 5.30 The Council’s revenue budget is interconnected to the financing of its capital expenditure and to the treasury management function that lies beneath the day-to-day transactions of the Council’s service provision. When the Capital Programme is approved, the impact of debt and borrowing requirements that will arise from it are factored into the revenue budget. The affordability of the recurring interest and principal debt repayments are a significant part of the Council budget and changes to interest rates can create unexpected budget pressures. When there is a pressure on the revenue budget, this in turn can put a strain on decision making within the capital programme. 5.31 It is a statutory requirement under Section 93 of the Local Government Finance Act 1992 for the Council to produce a balanced budget. The Act specifies that a local authority must calculate its budget requirement for each financial year to include the revenue costs incurred from capital financing decisions. The key objectives are to ensure the capital investment plans of the Council are affordable, prudent and sustainable. 5.32 Given the volatility of interest rates recently, the Council is carefully monitoring the impact of current commitments and existing plans. A review of the Council’s capital plan has commenced and a mechanism for capping capital expenditure has been agreed. Increased construction costs in recent years are also a pressure for the capital plan and that translates into increased borrowing costs also. The Treasury Management Team, in partnership with the Council’s treasury advisors Arlingclose, will continue to monitor closely the situation around interest rates and take any necessary action on a day-to-day basis to avoid risk to the Council’s finances. In the longer term the Council’s approved Performance Indicator for the costs of borrowing – cost of borrowing as a percentage of the Council’s net revenue budget – will continue to be used as a litmus test for affordability. Page 73
Page 74
16 5.33 The Council has a revenue budget for debt charges and the increases in capital expenditure between 2024/25 and 2033/34 means that the revenue debt budget needs to be reviewed and increased. Current assumptions in respect of the debt charges are shown below along with optimistic and pessimistic scenarios based on the indicative 10-year Capital Plan approved at Council on 24 January 2024 (paragraph 11 of the minute refers). Although this indicative plan is used as the baseline the Council recognises that it becomes unaffordable even with heavy capping of expenditure during the second half of the period. The plan is currently under review. Several strands of the Transformation Strategy – Smarter Working, Depot and Stores review, Leisure review, Libraries review – will feed into this review, but this most significant aspect with be the Learning Estate review as it is the requirements of the Learning Estate which is creating the severe pressure in the latter years of the Plan which render it unaffordable. Optimistic spend is 60% expenditure of the approved plan and assumes underspends rather than carry forward to the following year. Mid case is 75% and pessimistic is 90% expenditure of the approved plan. Interest rates for the scenarios use the 20-year UK Gilt forecast from the Office for Budget Responsibility as at May 2024. Gilt rates are different to the base rate and is tracked by the Public Works Loans Board (PWLB) so are more reflective of the borrowing rates the Council would get. The immediate reaction to the UK Government’s October Budget saw the number of Gilt yields rise materially the day after, thus causing gilt prices to fall. Forecasts will be closely monitored for any marked change in the assumptions used below. The optimistic scenario assumes the actual UK Gilt forecast, mid-range is the gilt forecast +0.5% each year, and the pessimistic is the gilt forecast +1.0%. it is difficult to predict what will happen to interest rates, particularly in the long term, as it depends on whether inflation remains consistent near to the inflation target (see paragraphs 4.6-4.7 above). 5.34 Prudential borrowing levels are based on the capital expenditure of each scenario less the funding from capital grant and receipts. The loans charges are based on these borrowing requirements. Optimistic Mid-range Pessimistic Assumption 60% spend on Capital Plan UK Gilt forecast 75% spend on Capital Plan UK Gilt forecast + 0.5% 90% spend on Capital Plan UK Gilt forecast +1% Year 1 Increase in Loans Charges £2.106m £2.838m £3.652m Year 2 Increase in Loans Charges £1.428m £1.921m £2.469m Year 3 Increase in Loans Charges £0.903m £1.213m £1.557m Year 4-10 Increase in Loans Charges £5.419m £7.264m £9.305m 5.35 The Capital Plan is being reviewed and a cap on capital expenditure will be applied from the financial year 2025/26, which is intended to be reported to Council in Q4 2024/25. The Council has imposed a 10% limit of budgeted income to be spent on borrowing costs which is similar to many other local authorities. Page 74
Page 75
17 Charging for Services 5.36 The income generated by charging for services is around £8 million, of which £1 million is retained by the MIJB. Based on that budget, income might be expected to increase by £70,000 for every 1% increase in charges, although this needs to be caveated as increasing prices only if the demand for the service is buoyant; it is accepted that there will be an element of decline in the demand for services if the charges are increased too steeply. 5.37 Under the Council’s Charging for Services Policy, an annual revision of charges is required and charges within the control of the council are generally inflated annually. This is reinforced by the Income Strategy for 2024/25 to 2026/27. When setting Charges services should consider the scope for full cost recovery, with benchmarking against other local authorities a good test of reasonableness. 5.38 Council approved the revised Charging for Services Policy at a special meeting on 12 December 2023 (paragraph 7 of the minute refers) and agreed the default inflation increase for fees and charges for Council Services for the period 2024/25 to 2026/27. The revised Charging Policy is a default increase of CPI including owner occupiers housing costs (CPIH) plus 1% as measured for October of the year before the increase takes effect. 5.39 Not all charges are within the Council’s control, some are levied by statute and are excluded from the Policy and the scenarios below. 5.40 Assumptions used in the scenarios below are: Optimistic – 5 % (2 ½ times forecast inflation – a significant income boost) Mid-range – CPIH+1% - per current Income Strategy Pessimistic – 2% - target inflation only – minimum position per the Charging for Services Policy Optimistic Mid-range Pessimistic Assumption 5% CPIH +1% 2% Year 1 £0.368m £0.258m £0.143m Year 2 £0.386m £0.243m £0.146m Year 3 £0.405m £0.230m £0.149m Year 4-10 £3.464m £1.818m £1.127m Additional Financial Risks 5.41 There are several additional financial risks that cannot currently be quantified or classed as budget pressures, therefore they are categorised as risks that may or may not materialise during the period of time which the strategy covers. If and when this happens, officers will update the financial assumptions in the strategy and notify members. At this present time, these financial risks include: Moray Integration Joint Board (MIJB). The provision of health and social care and children’s social work is delivered by NHS Grampian and the Moray Page 75
Page 76
18 Council under the direction of the Moray Integration Joint Board (MIJB). The Council has no direct control over the strategic delivery of these services and is currently liable for 47% of any overspend by MIJB. Based on current levels of expenditure and future predicted demographic changes, MIJB is currently projecting an overspend, with particular pressure on adult health and social care services due to projected increases in the population of older people. This presents a significant risk for the Council in terms of budget management. They do have an approved savings plan in place and the Council has made budgetary provision for an element of overspend. There is a growing demand for Additional Support within Early Years and school settings. The Council has allocated additional funding in 2023/24. Other demand-led expenditure will vary according to the need for a particular service and can depend on social and economic factors at set points in time. For example, homelessness and the need for temporary accommodation must be managed within the service budget allocated yet are subject to unpredictable demand when linked to social and economic factors. Also, the Council budgets for a mild winter in terms of winter maintenance but the actual cost will be higher if weather conditions are poorer. 5.42 This medium to long term strategy includes known service specific cost pressures, either existing or anticipated to be new burdens. Other risks in the environment in which the Council operates are noted as above and any other emerging risks will be kept under review as part of the medium to long term financial planning process. Identification of these risks, monitoring and where possible mitigating them form part of the unquantifiable input into the financial planning process. 6. Other Influencing Factors Transformation Strategy 6.1 Within the Corporate Plan, the Council recognises transformation and innovation as a key priority. 6.2 The Council approved a Transformation Strategy “to ensure continued focus on delivering transformational projects to support the Council’s financial sustainability” (meeting of the Moray Council on 24 April 2024, paragraph xx of the minute refers). The emphasis is on achieving cash savings in support of closing the Council’s budget gap. The transition from its predecessor, the Improvement and Modernisation Programme (IMP), the Strategy takes forward projects already in progress in addition to new projects and others being investigated to determine their inclusion in the strategy. 6.3 The Council agreed the first iteration of the new Transformation Strategy which focuses on maintaining progress on currently identified projects and identifying scope for further development and engagement to proceed. The revised programme proposes: (i) New opportunities for discovery work have been identified from horizon scanning; (ii)Innovation areas for research and discovery to assess future potential; Page 76
Page 77
19 (iii)Additional projects for initiation have been added to the IMP; (iv)Expansion or acceleration projects have been identified from current transformation work; (v)Current projects that provide financial savings 6.4 The new Transformation Strategy is anticipated to develop over a number of stages as progress is made on current projects and seeing new concepts through from the idea to delivery stage. The end result will be continued sustainability that stretches into the duration of the medium to long term financial plan. 6.5 An update on the Transformation Strategy was reported to Corporate Committee on 5 November 2024 with latest progress on specific projects: (i) Leisure review (ii)Libraries review (iii)ASN review (iv)Learning estate (v)Out of Hours services (vi)Smarter working (vii) Depot review 6.6 A number of projects are reaching a stage where they will be ready to report early in 2025 which is in line with the planned 12 month period set out in the Strategy. As these develop all projects bar the ASN review, which is meeting increased demand within the core budget whilst ensuring the service is financially stable in the future, are projected to produce revenue savings which will contribute to the financial sustainability of the Council. The Learning estate and Depot review projects will also result in avoided capital spend. Sustainable Development 6.7 Sustainable Development is a fundamental part of Best Value that should be reflected in a local authority’s vision and strategic priorities. The Council’s Best Value Action Plan was approved at a meeting of Council on 11 June 2024 (paragraph 3 of the minute refers) and in section 6.1 of that Action Plan the Council undertook to develop a Sustainable Development Statement that draws together the range of work the Council has in place to deliver sustainability, identifying any gaps that require consideration and action. The Council’s Sustainable Development Statement was reported and approved at a meeting of Corporate Committee on 5 November 2024 (paragraph 16 of the minute refers). It sets out the way in which Sustainable Development within the Council is integrated into its policies, plans and procedures. 6.8 In line with Best value guidance, the Statement draws out the way in with sustainable development is embedded in the Corporate Plan 2024-2029 and wider corporate policies and strategies. In particular the Statement: Outlines the role of the Corporate vision and values in creating a culture focussed on sustainable development, with clea guiding principals to support this Exemplifies how sustainable development is integrated into corporate priorities, key strategies, plans and governance systems Page 77
Page 78
20 Sets out how the impact of sustainable development in relation to key economic, social and environmental issues will be measured, evaluated, reported and scrutinised. 6.9 S One of the main objectives of the medium to long term planning of the Council is to focus on the resources available and ensure they are directed to support the Corporate Plan. Sustainable Development is the wider context in which the Council seeks to ensure the future financial sustainability of the council. A clear and robust financial strategy is vital to identify the likely level of resources available each year to the council, as well as the anticipated level of demand for, and cost of, providing services. 6.10 Future progress in regard to the Statement will be reported through Best Value quarterly updates, performance reporting to service committees from Quarter 4 and through annual reports such as the Annual Corporate Plan report and Public Performance Report. Asset Management 6.11 Various strands of work are encompassed under this theme. The Smarter Working project is already in Phase 2 of delivery. The Depot review Outline Business Case is approved and the Full Business Case is being developed and will be reported by the end of the financial year. At this stage potential revenue savings of £200,000 to £400,000 have been provisionally estimated. The strategic review of the Learning Estate has commenced and again has potential to result in reduced running costs. With further investment there is scope to accelerate the pace of this review. Part of the Route Map to Net Zero involves a reduction is the Council’s energy use. Preliminary estimates are for financial savings of £100,000 to £200,000 resulting from this. As can be seen from the table at 8.1 a significant element of the budget gap is generated from planned capital spend. In common with other local authorities the Council needs to reduce its planned capital spend. This needs to be followed up by service reviews to determine the pattern of service delivery from a reduced asset base. A combination of reduced capital spend and a reduced asset base has the potential to reduce costs by the order of £1,000,000. Place Based Approach 6.12 In considering what the Council’s future asset base might look like, consideration must be given to the optimal basis on which to meet place based needs and other sources of service support including through partner organisations and services delivered by communities themselves. The rural nature and geography of Moray requires to be factored into the distribution of service bases in order to meet the needs of Moray’s population. This is an emerging aspect of the Transformation Programme. Future distribution of service bases is being reviewed across major asset classes taking account of factors such as operating cost, local population, service usage, travel (time/distance), geography (ease of access) and asset condition. In some cases a service base may not be proposed in every area where residents can access that service in a neighbouring or central area. Page 78
Page 79
21 Service redesign / review of processes 6.13 A Lean review of processes was been part of IMP2 for some time but work had been delayed. This needs to be progressed to facilitate digitisation of Council processes. Lean as a tool in itself and as a facilitator for digitisation is anticipated to generate significant savings. Linked to such a micro review of service delivery needs to be a macro review, considering management and governance arrangements, to ensure a more streamlined approach. Estimated savings are included in the current financial plan at £250,000 and since those savings were estimated further areas for consideration have been identified. 6.14 As can be seen from the table at paragraph 8.1 the biggest single contributor to the projected future budget gap is from pay awards. Service redesign resulting in a streamlined council with consequent reduced head count over time will mitigate this pressure. Participatory Budgeting 6.15 Participatory Budgeting (PB) is a democratic process in which members of the community decide how to spend part of a public budget. It gives the public influence in the decision-making over Council finances. 6.16 Scottish Local Authorities and the Scottish Government have a framework agreement with a target where at least 1% of Council budgets will be subject to PB. Currently the Council is actively engaged in a wide variety of PB projects and making every effort to reach the target, however, actual amounts allocated through PB fall short of the 2024/25 target of £2.17million. 6.17 PB goes above and beyond budget consultations and requires facilitation between the sponsor (Council) to ensure openness and transparency and a vote by stakeholders on the actual outcome to determine that outcome. 6.18 The benefits of Participatory Budgeting are perceived to be: Improved democratic process Improved public awareness and understanding of the Council Strengthens the relationship between the community and the Council 6.19 There are also risks with PB: Unrealistic expectations from the community if not properly facilitated Limited scope where restrictions on budgets Needs public buy-in Voting risks (excluding minority or hard to reach groups) Very time consuming and requires significant officer input 6.20 Embedding PB into the Councils business as usual processes is embedded in our Best Value Action Plan. This is exemplified through our budget engagement approach and consultation on major components of the Transformation Strategy such as the Learning Estate, Leisure and Libraries reviews. Page 79
Page 80
22 7. Conclusion 7.1 The impact of all the main assumptions listed above and the mid case scenarios discussed in this strategy are summarised below. The actions to balance 2024/25 and 2025/26 are driven by the Short to Medium Term Financial Strategy and are included here as illustrative information only. The main consideration within the Short to Medium Term Financial Strategy has been to remove the structural deficit. On the assumption that this has been achieved, the table below identifies the main influences on the budget from 2027/28 going forward. The key consideration for the Medium to Long Term is that from 2027/28 onwards a budget gap of approximately £6 million on average is anticipated to be created by inflationary pressures and the cost of borrowing, even after increase in Council Tax and charges for services. This Strategy therefore identifies how that ongoing gap could be bridged. 7.2 The Medium to Long Term Financial Strategy for a financially sustainable Council is to take work along three main strands of service development. 7.3 The Council will take a strategic approach to asset management, seeking to develop a strategically located asset base using a Place Based Approach to serve local communities from energy efficient facilities. 7.4 The Council will aim to be a more streamlined organisation, using recognised techniques to improve efficiency and taking advantage of technology to support service delivery. 7.5 The Council will seek to future proof its services, using the most up-to-date information on population to inform planning for future service delivery. 7.6 Work is on-going to develop workstreams to support the Council of the Future and reports will be brought to members as plans are developed. As approval is given for these developments the Medium to Long Term Financial Strategy will be updated to appropriately reflect them. 7.7 As can be seen from the summary of the mid-case assumptions in the section below, if the Council does not receive an uplift in revenue grant support then for the life time of this financial plan it will require to make significant savings year on year to cover the impact of pay awards and inflation. The strands of work indicated in paragraphs 7.3 to 7.6 indicate the direction of travel for the Council to future proof services as far as possible to mitigate the impact of below inflation settlements. 7.8 A reconciliation of the budget gaps for 2025/26 and 2026/27 as developed using the mid case assumptions in the Medium to Long Term Financial Planning process to the more detailed development of these used and reported in the Short to Medium Term Financial Plan is given below: 2025/26 £m 2026/27 £m Budget gap per Short Term Financial Plan 11.05 0.19 Balance of overbudget bf from 2024/25 (7.26) - Increase in GRG assumed in STFP 1.03 2.25 Page 80
Page 81
23 Loans charges difference (to be updated in Short Term Plan) 1.3 2.7 Decrease in school rolls (0.3) (0.4) Revised gap 5.82 4.74 A residual difference of £0.24m in 2025/26 and (£0.31m) in 2026/27 is considered to reflect timing differences. Page 81
Page 82
24 8. Mid-case Assumptions within the Financial Strategy Para Scenario Assumption 2025/26 2026/27 2027/28 2028/29 - 2034/35 % £m £m £m £m Income Government Grant core funding 5.7 Mid 0% £0.000 £0.000 £0.000 £0.000 Council Tax Income 5.15 Mid CPIH+1% £4.102 £3.989 £2.535 £19.579 Income – discretionary charges 5.4 Mid CPIH+1% £0.258 £0.243 £0.230 £1.818 Total Income £4.360 £4.232 £2.765 £21.397 Expenditure Pay Award 5.21 Mid 3% £6.012 £6.192 £6.378 £50.334 Inflationary pressures/Contract inflation – general 5.25 Mid CPI +2% £0.476 £0.462 £0.433 £1.844 Contract inflation - Energy (tariff changes) 5.27 Mid CPI +2% £0.245 £0.329 £0.320 £1.337 Contract inflation – PPP 5.29 Mid RPI +2% £0.373 £0.375 £0.431 £1.987 Loans Charges - borrowing for capital programme 5.34 Mid 75% spend £2.838 £1.921 £1.213 £7.264 Total Expenditure £9.944 £9.280 £8.775 £62.765 BUDGET GAP £5.584 £5.048 £6.009 £41.368 Page 82
Page 83
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: REVENUE BUDGET MONITORING TO 30 SEPTEMBER 2024 BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To advise Council of the revenue budget monitoring position to 30 September 2024 and the current estimated out-turn for 2024/25. 1.2 This report is submitted to Council in terms of Section III B (10) of the Council’s Administrative Scheme relating to monitoring current revenue expenditure against approved budget. 2. RECOMMENDATION 2.1 It is recommended that the Council considers and notes: (i) the budget monitoring position of £3,693,000 over budget for 2024/25 as at 30 September 2024; (ii) that this position consists of an underspend on Devolved School budgets of £686,000, an overspend of £1,879,000 on Adult Social Care and Children’s Services delivered on behalf of the Moray Integration Joint Board (MIJB), an overspend on Environmental Services of £1,486,000, and overspend on non-devolved Education budgets of £438,000, Strain on Fund costs of £252,000 and an overspend within other services of £324,000; (iii) movement of a £1,315,000 increase in General Revenue Grant, as detailed in paragraph 3.4; (iv) the current estimated out-turn for 2024/25 of an overspend in Council services including Health and Social Care of £1,406,000 after adjusting for the cost sharing agreement with NHS for MIJB, with overspends across services including Education of £680,000, Environmental and Commercial Services £818,000, other services £680,000 in total, MIJB £2,620,000 and reduction in requirement of provisions of £3,933,000, and planned use of non-working earmarked reserves (DSM, Transformation and other earmarked) of £2,889,000, Item 9. Page 83
Page 84
and that balance of funding from working earmarked reserves is currently showing higher than planned use due to unconfirmed funding allocations expected; (v) that Heads of Service will be tasked with reducing overspends and generally reducing expenditure to bring expenditure back into line with budget; and (vi) the emerging budget pressure noted in paragraph 6.2. 3. BACKGROUND 3.1 When the revenue budget for 2024/25 was approved by Moray Council on 28 February 2024 (paragraph 7 of the minute refers), General Revenue Grant of £215,396,000 was estimated for the year, based on the latest amount notified to the Council and included an increase of £9,167,000 for the transfer of Early Learning and Childcare from specific grant, as well as estimates for further distributions of grant expected during the year. Council Tax receipts of £51,375,000 were anticipated. Budgeted expenditure of £278,794,000 was agreed, and this required use of ear-marked reserves totalling £731,000 for transformation, £1,136,000 for Moray Growth Deal cash flow and of £10,156,000 from working (covid) reserves to balance the budget. 3.2 In addition to the Council’s core budget, monies allocated to schools through the Devolved School Management (DSM) scheme and not spent are brought forward from previous years. The DSM balance brought forward in 2024/25 is £753,000 (2023/24 £853,000). Unused Pupil Equity Fund of £677,000 received in 2023/24 and £76,000 funding for nursery snacks and fundraising have been carried forward into 2024/25 in accordance with the grant conditions. On 26 June 2024 Council approved additional expenditure of £192,000 to be funded from the working ear-marked reserve. All these adjustments have been posted to departmental budgets. 3.3 Additional General Revenue Grant (GRG) of £1 million has been included on Appendix 3 after being confirmed by the Scottish Government in May 2024 as the Council’s share of additional GRG totalling £62.7million across all Scottish local authorities. The funding will be baselined for future years. Further redeterminations of funding have been announced and are reflected in the revised budget: £19,000 for Scottish School Milk Subsidy Scheme and £296,000 for Children’s Social Care pay uplift. 3.4 The Council’s allocation of a total funding package of £77,500,000 from the Scottish Government to support the 2024/25 local government pay offer for SJC, Craft and Chief Officer staff was confirmed in late October as £1,283,000. This will be baselined as General Revenue Grant from 2025/26 onwards. This additional funding is not reflected in the quarter 2 figures but has been taken account of when calculating the estimated overspend. 3.5 With these adjustments to use of reserves and GRG, the Council’s overall General Services revenue budget currently stands at £281,941,000. 3.6 Reconciliation of the movements in the base budget from that which was approved by the Moray Council on 28 February 2024 is shown in APPENDIX Page 84
Page 85
3 and allocations to departments from the provisions for Inflation and Contingencies, Additional Costs and Savings are listed in APPENDIX 4. 4. BUDGET POSITION 4.1 APPENDIX 1 summarises the current position for each service, comparing actual expenditure with budget to 30 September 2024. 4.2 Overall the budget position at 30 September 2024 is expenditure over budget to date of £3,693,000 or 2.8% of budget to date, which includes services delivered on behalf of the Moray Integration Joint Board (MIJB). 4.3 The principal areas of overspend and underspend across the Council are summarised below. 4.4 In Education, Resources and Communities there is an underspend to date of £51,000. Much of this relates to the over achievement of income in Sport and Leisure services (£54,000) and underspends in the Learning Estate operational budget of £12,000. Libraries have an underspend on energy costs of £16,000 and under achieved on income of £3,000. There are overspends on licences within Leisure, along with underachievement of budgeted Public Private Partnership (PPP) contract deductions. 4.5 Education has a £248,000 underspend to date. Devolved School budgets are underspent by £686,000 at the end of the second quarter; £262,000 in primary schools and £424,000 in secondary schools. There is flexibility in DSM budgets to allow for planning for the sessions ahead and where spend is planned on the academic year. Non-devolved budgets are £137,000 overspent to date, mainly energy costs (£135,000). In Early Learning and Childcare, there is a £38,000 underspend on the earmarked snack and fundraising account, alongside a £13,000 training underspend. Underspends in Schools and Curriculum Development include: free sanitary products £15,000, advertising £9,000 and disturbance mileage £6,000. Overspends in central supply are £246,000 to date; a cost which is difficult to forecast due to being cover for maternity and sick leave. Out of Area is showing a £143,000 overspend; this is due to the extension of placements for two young persons until the end of the financial year and one new placement. 4.6 Environmental and Commercial Services are presenting a £1,486,000 overspend to date across sections within the service. Roads Maintenance There is a net overspend of £1,439,000 within Roads Maintenance revenue budget, primarily due to a processing time lag for the recharge to capital, which is £1.05m below target to date and will be processed in future periods. The bulk of the revenue maintenance budget is allocated to items such as carriageway repairs/footway repairs/gully cleaning/grass cutting and ditching maintenance. Actual works completed and works committed (i.e works identified and waiting to have repairs scheduled and undertaken) currently totals £700,000. It is forecast with high confidence that this revenue maintenance budget will be brought back into line and on budget at end of financial year. Page 85
Page 86
Fleet Services Fleet are currently £227,000 under budget. The overspend reported in Fleet Services in Quarter 1 has been reversed as internal recharges for vehicles and plant have now been reviewed and updated. Fleet recharges to departments for ad hoc maintenance work done in the workshop and hire of additional vehicles are now above budget. These will be reflected as overspends in departments. Building Cleaning and Catering Within Catering there are underspends on food costs of £6,000 and income ahead of budget to date £46,000. Facilities Management is under budget by £12,000 on free sanitary products. Open Spaces Lands and Parks operational budget is £19,000 under budget to date, with variances including within supplies and services and vehicle hire charges. Burial Grounds has an overspend of £69,000, primarily due to an income shortfall to date on interment fees and sale of lairs. Other Grounds Maintenance is under budget including Dorenell Core Paths projects; unspent funding for these projects will be carried forward in an earmarked reserves at the end of the year. Waste Management Waste is £60,000 over budget. Variances include overspends on the NESS Energy from Waste, but a credit is due from Aberdeen City Council which should offset the overspend. Underspends on a recycling contract of £22,000, energy costs £14,000 and Leachate and specialist services £11,000. Income variances include surplus of gas income at Dallachy £64,000 and tipping and street sweeping income £39,000, against income shortfalls of £109,000 in Green Waste permit income, and bulky and trade waste income £26,000. Traffic and Transportation An overspend of £271,000 to date is primarily due to shortfall in income across services: car park income £50,000; Harbours £94,000 (although this is due to invoicing falling behind due to staff sickness) and Traffic £36,000. Other overspends include Harbours staffing/agency costs and allowances £33,000 and electricity costs £22,000 which can be partly recharged externally. An upgrade of 25 car park machines to 4G was a one off additional expense of £17,000, which can be capitalised. Other minor overspends total £13,000. Engineering Design Variances total £85,000 of an underspend to date on Bridge Works and Flood Prevention budgets to date, which are due to timing of planned works against the budget. 4.7 Economic Growth and Development Services have a £282,000 underspend; planning fee income and building control income are ahead of target by £153,000 and £99,000 respectively, both due to large fee paying applications. Other underspends include administration costs £12,000 and Landlord registration fees within Environmental Health £15,000 ahead of target. Page 86
Page 87
4.8 Governance, Strategy and Performance have an underspend of £33,000 which is made up of several variances; overspends on Housing Benefits £101,000 and Discretionary Housing Payments £201,000 along with software costs £52,000 higher than budget. Underspends in Civic Licensing fee income of £109,000 mainly from Short Term Lets and Central Postages and photocopying £45,000 the latter of which is timing related. 4.9 General Services Housing and Property is overspent by £16,000 in total with over and under variances; overspends on corporate buildings repairs and maintenance of £119,000 and schools repairs and maintenance £93,000. Underspends within Homeless temporary accommodation £84,000 and a surplus of Industrial Estate rental income £121,000. 4.10 Other expenditure is over budget to date by £493,000 including £121,000 for supernumerary posts and voluntary redundancy payments which will be funded from Council Priorities reserve. Additional pension costs were £280,000 over budget (including Strain on the Fund). 4.11 Health and Social Care is reporting an overspend across services at the end of quarter 2 of £1,879,000. The figures included in this report relate purely to the services delivered by Moray Council on behalf of the MIJB for Adults and Children’s Services. There are overspends in most areas; the significant variances include Learning disability service of £1,100,000 for purchasing of care; older people and physical sensory disability of £1,300,000 which relates to purchasing of care and permanent care placements; £118,000 relating to children’s and justice services for continuing care placements and residential placements for children with a disability; which is being reduced by underspends in the care services provided in-house of £768,000 due to the challenges of recruitment in this area. 4.12 Income budgets across the Council are showing both positive and negative variances and the main variances have been identified above in paragraphs 4.1 - 4.11. 4.13 The quarter 2 position is summarised in the table below: Overspend £000 Underspend £000 Net Variance £000 Schools - DSM 686 Schools - Non-devolved energy costs (135) Central Supply teachers (246) Out of Area (143) Roads Maintenance (1,439) Environmental & Commercial Services income (384) 149 Other Environmental & Commercial Services 188 Building Control & Planning fee income 252 Property repairs & maintenance (212) Costs of early retirement/supernumeracy (401) Page 87
Page 88
MIJB - Health & Social Care and Children’s Services (1,879) Other Council Services (129) TOTAL (4,968) 1,275 (3,693) 5. BUDGET PRESSURES AND ADDITIONS 5.1 Budget pressures recognised when the budget was approved on 28 February 2024 are released when the pressure builds up to the extent that it can be accurately quantified. Provisions to meet budget pressures and new duties totalling £814,000 have been released in quarter 2 and these are itemised in APPENDIX 4. 5.2 Provisions still held centrally at the end of quarter 2 total £8,819,000 and are detailed in APPENDIX 5 and given a RAG assessment for likelihood of requirement. 5.3 Four provisions are assessed as red at this point, as no longer being required this year; the £30,000 Deposit Return Scheme budget pressure was confirmed by the Scottish Government to be delayed until October 2025. The Revised Improvement and Modernisation Plan (IMP) (now Transformation Strategy) of £596,000 for Raising Attainment was carried over from 2023/24 and was required for full year effect funding to cover April to August 2024; this has now all been drawn down and the balance is not required. An initial provision of £635,000 for Energy increases was included in the budget; latest projections (using 2023/24 consumption data) is that the current budget will be sufficient to cover overall costs for gas and electricity. This assessment is based on information included in the Annual Report on Energy Consumption and Expenditure reported to the Economic Development and Infrastructure Services Committee on 12 November 2024. The fourth is £57,000 for Trade Union Facility time that requires no drawdown of budget. 5.4 Nine provisions, totalling £7,368,000, are assessed as amber and have yet to be taken, or uncertain if required. Seven have had no draw down of budget this year to date and consist of: the Moray Growth Deal contribution to Early Years Science Technology, Engineering and Mathematics (EY STEM) £62,000 which was used in prior years to fund the Project Manager’s post and is now funded by ELC. A report to Council on 25 September 2024 informed Council of the progress of the EY STEM project and final stage of approval of the FBC was given by the Scottish Government in early November enabling the project to move into delivery stage, thus £44,000 will be required this year for revenue spend; Uprating Personal & Nursing Care £80,000 is awaiting confirmation of allocation but latest projections based on the GAE allocations are this could be £215,000 (share of an £11,500,000 allocation); Increase in loans charges £800,000; loans principal and interest projections show that this budget pressure will be required in full and forecasts will be updated during quarter three and drawn down if projections remain the same. The budget pressure allowed for the Council’s 47% share of the MIJB overspend will remain as amber until final year figures are known. At this point the anticipated variance, including the adjustment to reflect the cost sharing agreement, is estimated to be £2.4 m. The Joint Transition Plan pressure Page 88
Page 89
may fall into next year, depending on timing of procurement which is currently underway. The Free School Meals expansion project has been marked as amber as the Scottish Government this year announced it was delaying its policy of expanding free school meals to all primary pupils and will remain to be provided for all pupils in P1 to P5, and P6 and P7 pupils whose families receive the Scottish Child Payment. This budget pressure will therefore be removed, leaving £81,000 for school holiday provision for eligible families. Following the UK Budget in October 2024, the Levelling Up funds were confirmed for Moray (£18.2m) and the Elgin Town Plan (£20m). The budget pressure may not develop in this financial year, or will be minimal spend, and fall into next financial year. School Milk Subsidy funding of £19,000 has been confirmed as a redetermination to the General Revenue Grant. This is intended to be a contribution towards school milk in primary schools. 5.5 All other provisions are expected to be required in full at this juncture. 6. EMERGING BUDGET PRESSURES 6.1 Emerging budget pressures are noted throughout the year as they are identified. Pressures that were identified during quarter 2 are listed in the table below. Para Ref Estimated full year effect £000s Local Development Plan 2027 6.3 100 ____ Total 100 ==== 6.2 Planning authorities have a statutory requirement to set out a timetable for the review/production of their Local Development Plan (LDP) in the form of a Development Plan Scheme (DPS) and to submit this annually to the Scottish Government. The Planning (Scotland) Act 2019 introduced changes to the LDP preparation process and new LDP’s in Scotland are required to be place based, looking at areas of new growth, but also looking at what needs to change within existing neighbourhoods and greater focus on the re-use of vacant and derelict land. The LDP will reflect national priorities with a greater focus on carbon reduction, 20-minute neighbourhoods and better engagement with young people. 6.3 A budget pressure was highlighted in a report on Moray’s Local Development Plan 2025 to the Planning and Regulatory Services Committee on 23 March 2021 (paragraph 13 of the minute refers) for critical transportation appraisals of £200,000 in 2022/23 and £50,000 in 2023/24. It was later reported at a meeting of the same committee on 20 December 2022 that the budgets would not be spent that year due to delays finalising and adopting the government’s National Planning Framework 4, which resulted in many planning authorities delaying LPD reviews. Work on the Local Development Plan 2027 commenced in 2023/24 and will continue into 2024/25 and 2025/26, with a likely split of spend £100,000, £100,000 and £50,000 respectively. Other costs required to inform and develop the LDP will be met from the LDP annual Page 89
Page 90
revenue budget. A budget pressure has been identified of £100,000 in 2024/25 and £50,000 in 2025/26. 7. SAVINGS 7.1 Savings and increased charges of £9,370,000 were approved when the budget was set. These savings comprised one-off savings of £112,000 and other permanent savings of £8,916,000. The increase in charges per the budget paper was £342,000. 7.2 In addition to the savings approved when the budget was set, additional savings/income of £1,216,000 were carried forward from 2023/24 to be actioned in the current year. Further recurring savings/additional income of £225,000 were approved at Moray Council on 26 June 2024; £75,000 leisure services income and £150,000 energy costs saving (paragraph 14 of the minute refers) and £50,000 approved at Moray Council on 25 September 2024 (paragraph 16 of the minute refers). These are included on APPENDIX 6. 7.3 Of the original approved savings, a balance of £1,207,000 remains in central provisions as at the end of June. These are detailed in APPENDIX 6 and given a RAG assessment for anticipated achievement. The balance consists of savings not yet posted to services (£1,282,000) less additional savings found in year (£75,000). 7.4 Sixty nine savings marked as green have been achieved, or will be achieved in the year, totalling £8,618,000. 7.5 Twenty six savings classed as amber total £2,880,000 outstanding. Of these, £2,259,000 are still expected to be achieved this year. Several savings within Environmental and Commercial Services have been delayed and their positions being confirmed: the reduction in Building Cleaning across the HQ campus buildings is a part year saving and will be posted in quarter 3; £52,000 of increased income/savings in Parks and Open Spaces have yet to be taken from departmental budgets for the uplift in burial charges to full cost recovery; and the recharge for the maintenance of Common Good/Trust land and parks is to be posted against budgets; an amount of £65,000 has been identified as available funds in 2024/25 but the Common Good and Trust Funds are high risk savings in that the disbursable income in the year is linked to the interest rate, as well as repairs and maintenance and other expenditure, and if this is sufficient funding to cover the costs of grounds maintenance. Fleet have identified externally leased vehicles that can be ended and therefore reduce costs as user departments will share existing vehicles/plant. When vehicles have been collected, savings will then be generated and processed. In Waste Management, the reduction in Household Waste Recycling Centres opening hours will generate a part year saving this year as closure is from October 2024, and the reduced gate fee at the NESS Energy from Waste facility will be confirmed in quarter 3 as the invoicing is running two months in arrears. Cross service savings include the Electric Vehicle/Ultra Low Emission salary sacrifice are unconfirmed for this year. The expected increase in vacancy factor in line with pay awards will be determined now the pay award has been posted. The approved saving from the Elgin Community Centre closure will not be fully achieved until the building is sold. Page 90
Page 91
A one off saving of £73,000 is anticipated to accrue from the refund due from Grampian Valuation Joint Board, the amount of which will be confirmed when the accounts for 2023/24 are audited and approved by the Board – the saving will be posted thereafter. Indicative savings from the Improvement and Modernisation Programme (now Transformation Strategy) have a variety of classifications; Stream 4: Review and expansion of flexible working £44,000, Reduction in investment costs £4,000 which are expected this year, and LEAN review £125,000, a project which has been reprioritised for the Future Council work. 7.6 Savings carried forward from 2023/24 are still showing as amber but are all expected to be achieved and posted to the ledger: the review of purchasing card £30,000, which will be across services to ensure that VAT receipts are submitted per financial regulations and therefore all input VAT reclaimed; reduction in reinvestment costs of £18,000; and the balance of the schools PPP service concession which requires detailed calculations to be carried out to confirm the exact saving. 7.7 Approved savings that are now not expected to go ahead, marked in red on the APPENDIX 6, total £786,000: income generation of £100,000 from hiring out a new Roads Maintenance surface dressing machine will not materialise until well into 2025/26 due to a long delivery lead time; the saving from Dallachy will be delayed as the tender for the closure works is now live with an expected commencement date of April 2025. It is proposed to move these expected savings/income into 2025/26; £56,000 for the Stream 2: ICT and Digital, the schools admin review will not be realised. 7.8 An increase of £429,000 for Council tax receipts has also been forecast after the annual review of the Council Tax base and is reflected in the figures for quarter 2. 8 ESTIMATED OUT-TURN 8.1 APPENDIX 2 summarises the first estimated out-turn position for each service area, comparing the estimated expenditure with the budget to 31 March 2024. 8.2 Overall the estimated out-turn position for 2024/25 is expenditure over budget of £1,406,000 or 0.5% of budget for the year, including services delivered on behalf of the MIJB. 8.3 The principal area of forecast overspends and underspends across the Council reflect the major variances mentioned in section 4 of this report. Details of projected out-turn variances are summarised below. 8.4 The estimated out-turn position of 2024/25 for the MIJB is an overspend of £5,583,000. The Council’s share of funding for MIJB is now 47% of the total following the full delegation of Children’s and Justice services from 1 April 2024, therefore the Council’s share of this projected overspend is £2,626,000. The forecast deficit is the worse case scenario and work is still on going to produce savings in the second half of the year, which will be reflected in the quarter 3 report. The Council included a budget pressure of £5,000,000 at budget setting time, based on the recurring overspend position at the end of Page 91
Page 92
2023/24. The MIJB have worked hard to achieve a proportionate amount of savings to date to reduce this deficit in 2024/25. 8.5 Staff savings from vacancies and appointments below top of scale across all services are anticipated to exceed the overall budget provision. This excludes the current saving still to be posted against staffing budgets to increase the vacancy factor, which will be done when the pay award has been settled and department budgets updated. Income budgets across the Council are showing both positive and negative variances. This includes additional income in short term lets and licensing fees, industrial estate rental income and wayleaves, recycling and street sweeping income, school catering. Planning fee income and building control income are also ahead of target, and landlord registration fees. There is a shortfall in income for car park and harbours income, green waste and trade waste. Also, sale of lairs in Burial Grounds is below target budget. 8.6 In Education there is a projected overspend of £680,000. The overspends to date detailed in paragraph 4.5 are projected to be significantly higher by year end; central supply £650,000 and Out of Area £450,000. Underspends include spend on school sanitary products £15,000, clothing grants £5,000, disturbance mileage £6,000, staff advertising £9,000 and a review of the Speech and Language Therapy service generating a projected £35,000 underspend. Staffing vacancies also generating an overachievement of vacancy target by £312,000. 8.7 As mentioned earlier in this report (paragraph 4.9) there is an overspend in corporate buildings and schools repairs and maintenance. These are forecast to outturn at overspends of £125,000 and £200,000 respectively. Other projected overspends include Property fee income less than target by £130,000, and surplus property running costs £40,000 and less income from miscellaneous land sales £30,000. Underspends are expected on Homeless temporary accommodation £120,000, a surplus of industrial estate rental income and wayleaves £115,000, and staff savings higher than budgeted £143,000. The full year effect is a projected overspend on General Services Housing of £142,000. 8.8 Environmental and Commercial Services currently projecting an over spend of £818,000 for the year. Estimated Overspend £000 Estimated Underspend £000 Net Variance £000 Directorate - - - Savings (76) - (76) Roads Maintenance (262) - (262) Fleet Services (122) - (122) Building Catering & Cleaning - 99 99 Open Spaces (30) - (30) Waste Management - 6 6 Traffic & Transportation (524) - (524) Engineering Design - 91 91 Page 92
Page 93
TOTAL (1,014) 196 (818) Roads Maintenance Whilst Roads Maintenance has a current overspend against budget to date, this is largely due to timing of the recharges to capital projects. Current forecasts are for the service to outturn a £262,000 overspend. Of this, £126,000 is an overspend due to increases in materials costs, higher than planned vehicle costs and other variable costs such as insurance claims. Fleet Services Currently projecting a £122,000 overspend primarily around transport costs including spare parts, other materials, external vehicle hire for user departments (not staff car hire), trackers/radio contracts and accident damage. There are projected underspends on staff transport costs due to reduced external car hires. Building Catering & Cleaning Within catering there are projected underspends on income of £89,000. Facilities are projected to be under budget by £10,000 on free sanitary products. Open Spaces Open Spaces are projecting a £30,000 overspend for the year. Underspends expected on tools, materials, fuel etc total £10,000 and are offset by overspends on rent and rates, cleaning costs £10,000, transport maintenance costs, and additional costs in the War Memorial budget for plants since the closure of Greenfingers. Increased income from HRA and Flood Alleviation of £67,000 is offset by income shortfall in external income including annual inspections of play equipment, which is restricted by staff resources. The shortfall in Burial Ground income from sale of lairs is anticipated to recover later in the year. Waste Management Waste is forecasting to be within budget. Income surpluses include; gas at Dallachy £106,000, Recycling £50,000 and one off street Sweeping income £11,000. Underspend on Waste royalites due to less deposits at Dallachy are estimated at £24,000 and Recycling advertising which is now done internally is a possible £10,000 saving. Income shortfalls of £119,000 in Green Waste permit income due to number of estimated permits set too high and lower uptake, and trade waste income £88,000. Traffic and Transportation An overspend forecast of £524,000 are partly due to a shortfall in income from car parks of £180,000 and Bus Revolution £75,000. Other operational overspends include in car parks: upgrade of car park machines £17,000 (per paragraph 4.9), fees for Pay by Phone car parking charges £14,000, and in Harbours/Dredger: Harbours staffing/agency costs and allowances £35,000, Dredger repairs from the mid-term loadline survey £40,000, weighbridge hardware costs required during the upgrade £22,000, £20,000 increased Page 93
Page 94
electricity charges for Pier 3, Buckie (partly rechargeable externally), Deep dredging licence £5,000, additional van hire for harbours £6,000, management consultants for Harbours review £10,000. A further £100,000 overspend is estimated for Transport Studies for the Local Development Plan (LDP); as highlighted in section 6 above a 2 year budget was approved in 2022/23 however, due to delays, there was slippage in the LDP progression. Work commenced in 2023/24 and will continue into 2024/25 and 2025/26, with a likely split of spend £100,000, £100,000 and £50,000 respectively. A budget pressure has been identified of £100,000 in 2024/25 and £50,000 in 2025/26. Engineering Design With an underspend to date, Engineering Design is forecasting a £91,000 underspend at year end. Minor variances offset within the operational budget while there is a surplus income forecast of £75,000 from service users and £12,000 to other departments. 8.9 HR, ICT and Organisational Development have a projected overspend of £112,000: staff vacancy target shortfall £107,000 and central phones overspend £30,000 against a training underspend £25,000. 8.10 Financial Services has a net overspend of £412,000 projected; a staff vacancy target surplus of £95,000 is offset by postages, NDR reliefs and banking charges, and the payment of an uninsured loss that was incurred during the year. 8.11 Governance, Strategy and Performance have a net £252,000 overspend projected. Overspends on housing benefits of £100,000, Discretionary Housing Payments £218,000, and software costs £52,000, as well as election polling booths etc £11,000 to be funded from an earmarked reserve, and staff savings less than budget £19,000. Underspends include Members allowances and expenses £20,000, Money Advice – Accountant in Bankruptcy (AIB) income £8,000, Registrars income £10,000, Licensing Board income £40,000, Civic License fee income (mainly Short Term Lets) £40,000 plus other supplies and services budgets £30,000. 8.12 In Other expenditure, an overspend of £649,000 is forecast. This includes supernumerary, additional pension and Strain on the Fund costs, external advisor costs and one-off higher than budgeted salaries. 8.13 Loans Charges – an £800,000 budget pressure was approved as part of budget setting and remain in provisions at quarter 2. Loans Charges are currently forecasting an overspend against budget of £800,000 therefore the provision of £800,000 will be required in full. 8.14 Centrally held provisions are expected to underspend by £4,158,000. Additional Costs including the remaining budget pressure requirements as discussed in section 5 are estimated to be £5,604,000 under by the end of the year; primarily due to the forecast balance of the £5,000,000 budget pressure for the Council’s share of the MIJB overspend. As discussed in paragraph 8.4 the outturn currently estimated by the MIJB would result in £2,620,000 of this overspend to be funded by the Council. Another budgeted provision is for Page 94
Page 95
Free School Meals expansion (paragraph 5.4) with a balance of £1,141,000 which has been put on hold for Primary 6 and 7’s. 8.15 Savings outstanding were discussed in section 7 and the amber savings expected to be achieved this year of £2,101,000 (paragraph 7.5) have been included in the estimated outturn figure in APPENDIX 2. If these are realised there will be an overachievement of savings of £2,222,000 in the year. Provision for Contingencies and Inflation estimations include the current Local Government pay settlement which was implemented following a meeting of Council Leaders in September. Funding has been notified (per paragraph 3.4) which also includes Health & Social Care pay. Teachers pay has also been agreed and will be backdated in November. Funding towards the pay settlement from the Scottish Government has yet to be notified and is therefore not included in the estimations. The estimated position for inflation is an overspend of £2,461,000. 9 RESERVES 9.1 The Council needs to retain a certain level of free reserves in case of unforeseen contingencies or emergencies. The balance on free general reserves (excluding DSM and ear-marked reserves) as at 1 April 2024 was £6,000,000. This is the minimum level of reserves that can be held on free general reserves in terms of the Council’s financial reserves policy, recently reviewed and reported to Council on 25 September 2024 (paragraph 15 of the minute refers). 9.2 APPENDIX 7 itemises the movements on reserves during the year to date and gives the free balance on the reserves at 30 September 2024. The working reserve had a balance of £8,686,000 on 1 April (£8,721,000 reported to Moray Council on 26 June which was reduced by a DSM adjustment of £35,000) and has a commitment to balance the 2024/25 budget. Moray Council on 26 June 2024 approved an additional use of working ear marked reserves totalling £192,000 (paragraph 14 of the Minute refers) and a further £13,000 for School catering Fusion app upgrade approved at Corporate on 27 August 2024 (paragraph 10 of the minute refers). Savings were approved at Council on 25 September (paragraph 16 of the minute refers) and implemented in full, and as discussed in paragraph 7.8 above, an increase to the Council tax base is expected to generate £429,000 of income, thus reducing reliance on working reserve, bringing the balance of the reserve to £8,960,000, before planned use of the reserve to balance the 2024/25 budget. When the 2024/25 budget was set it was planned to use £10,156,000 of working reserves to balance the budget, as per paragraph 3.1. During the 2023/24 year end accounts closedown, £3,045,000 was transferred from the working reserve to other earmarked reserves, in order to preserve funding for specific projects, thus reducing the unrestricted portion of the working reserve. 9.3 APPENDIX 2 summarises the estimated out-turn position for the year and overall an overspend of £1,406,000 is forecast. The forecast use of working reserves is currently £10,858,000 which is higher than the available balance of £8,960,000. The Council awaits notification of funding for the Teachers pay settlement and funding towards the increase in Teachers Pensions, both of which are expected to be advised in December. Until figures have been confirmed, estimates have not been included in the Quarter 2 report and Page 95
Page 96
therefore the balance of funding required has been shown as requirement from working reserves. 9.4 Earmarked reserves for project slippages are held to keep track of funding for projects where reserves balances have built up and need to be drawn down as and when the expenditure is incurred. These include: Refugee resettlement funding, Education Attainment Fund, Whole Family Wellbeing Fund, Employability, Dorenell Windfarm fund, Sanquhar Loch. The current balance of these is £4,025,000. This excludes DSM reserve. 9.5 Balances on 30 September 2024 for other ear marked reserves include £5,964,000 for Transformation, £2,197,000 for Council priorities and £4,000,000 for Moray Growth Deal cash flow funding and £7,526,000 for the newly created reserve at 2023/24 closedown for the PPP Service Concession. 10 SUMMARY OF IMPLICATIONS (a) Moray 2026: A Plan for the Future and Moray Corporate Plan Effective budget management is an essential component of delivery of Council priorities on a sustainable basis. (b) Policy and Legal No policy or legal implications arise directly from the contents of this report. (c) Financial implications The financial implications are addressed throughout the report. (d) Risk Implications There are no risk implications arising directly from this report. Budget managers are aware of their responsibilities for managing their budgets in accordance with the Council’s Financial Regulations. There is a risk to the Council arising from the agreement that if the Moray Integrated Joint Board overspends the Council will meet 47% of the additional costs incurred. Variable inflation presents a risk to the Council’s budget; the Office for Budget Responsibility’s most recent forecast in October 2024 makes an initial assessment of the economic and fiscal effects of the new UK Government’s Budget set out in October 2024. With CPI inflation having fallen back to around 2% mid 2024, the impact of Budget policies, including the increase in employers National Insurance Contributions taking effect from April 2025 onwards, is expected to push up CPI by around 0.5% at its peak, meaning it is now projected to rise to 2.6% in 2025 and then gradually fall back to the target bank of England rate of 2%. (e) Staffing Implications No staffing implications arise directly from this report. (f) Property No property implications arise directly from this report. (g) Equalities/Socio Economic Impact No equalities implications arise directly from this report. Page 96
Page 97
(h) Climate Change and Biodiversity Impacts No climate change and biodiversity impacts arise directly from this report. (i) Consultations Consultation concerning Revenue Budget Monitoring is an on-going process with budget managers across the Council. CMT and Heads of Service have also been consulted in the preparation of this report and any comments incorporated. 11 CONCLUSION 11.1 The financial position of the Council at the end of September 2024 is an overspend against General Services Revenue Budget of £3,693,000, including services delivered on behalf of the Moray Integration Joint Board. 11.2 Variations in General Revenue Grant totalling £315,000 have been notified to the Council. 11.3 There is one additional budget pressure totalling £100,000 for quarter 2, noted in section 6. 11.4 The estimated out-turn position is for an over spend of £1,406,000. 11.5 The Council has estimated use of £8,685,000 from the working reserve in 2024/25. Author of Report: Susan Souter, Senior Accountant Background Papers: Held by author Ref: SS/LJC/SPMAN-1293228629-1189 Page 97
Page 98
Page 98
Page 99
APPENDIX 1 MORAY COUNCIL - APPENDIX 1 BUDGET MONITORING REPORT QUARTER 2 TO 30 SEPTEMBER 2024 Service Revised Budget 2024/25 £000s Budget to 30 September 2024 £000 Actual & Committed to 30 September 2024 £000s Year to date variance £000s Education, Resources & Community 12,990 6,525 6,474 51 Education 114,216 58,056 57,808 248 General Services Housing & Property 4,327 2,875 2,891 (16) Environmental & Commercial Services 28,202 13,368 14,854 (1,486) Economic Growth & Development Services 3,544 2,218 1,936 282 HR, ICT & Organisational Development 5,785 3,638 3,684 (46) Financial Services 1,631 1,325 1,763 (438) Governance, Strategy & Perfomance 5,680 3,917 3,884 33 Other Services 2,495 1,314 1,807 (493) SERVICES excl HEALTH & SOCIAL CARE 178,870 93,236 95,101 (1,865) Health & Social Care (IJB) 76,970 38,272 40,151 (1,879) Health & Social Care (Non IJB) 446 222 171 51 TOTAL SERVICES incl HEALTH & SOCIAL CARE 256,286 131,730 135,423 (3,693) Loans Charges 16,407 0 0 0 Provision for Contingencies and Inflation 1,636 0 0 0 Additional Costs 8,819 0 0 0 Unallocated Savings (1,207) 0 0 0 TOTAL PROVISIONS 9,248 0 0 0 TOTAL GENERAL SERVICES EXPENDITURE 281,941 131,730 135,423 (3,693) Commentary on Quarter 1 Performance Economic Growth & Development Services: underspend of £282k due to income surplus: planning fees £153k and building control income £99k, and landlord registration fees £15k. Health & Social Care: H&SC is reporting an overspend of £1,879k for services delivered on behalf of the MIJB. Overall the budget position at 30 September 2024 is expenditure over budget to date of £3.693m, or 2.8%, which includes services delivered on behalf of the Moray Integration Joint Board (MIJB). Environmental & Commercial Services: A net overspend to date of £1.486m to date across services. Roads maintenance recharging of works to the capital programme has fallen behind due to a time lag in pricessing and will be reprofiled in future periods. Traffic & Transportation budgets are over primarily to a shortfall in income. from car parks and harbours Education: Devolved School budgets are underspent by £686k at the end of the third quarter; £262k in Primary schools and £424k in Secondary schools. Non-devolved budgets are over budget by £137k. Overspends in central supply of £246k. Out of Area is £143k over due to the extension of secure care and new placements. 5.3% 47.0% 2.3% 10.8%1.8% 2.9% 1.1% 3.2% 1.1% 24.3% 0.2% 0.0%Budget YTD % of Total Education, Resources & Community Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Financial Services Governance, Strategy & Perfomance Other Services Health & Social Care (IJB) Health & Social Care (Non IJB) Loans Charges 5.3% 47.3% 2.4% 12.1% 1.6%3.0% 1.4% 3.2% 1.5% 22.1% 0.1% 0.0%Actual YTD % of Total Education, Resources & Community Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Financial Services Governance, Strategy & Perfomance Other Services Health & Social Care (IJB) Health & Social Care (Non IJB) Loans Charges (2,000) (1,000) 0 1,000 £000's YTD Actual Variance to Budget (excl Loans & Provisions) Education, Resources & Community #REF! Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Financial Services Item 9. Page 99
Page 100
Page 100
Page 101
APPENDIX 2 MORAY COUNCIL - APPENDIX 2 BUDGET MONITORING REPORT QUARTER 2 TO 30 SEPTEMBER 2024 Service Revised Budget 2024/25 £000s Estimated Outturn 2024/25 £000s Anticpated Variance 2024/25 £000s Variance vs Base Budget % Education, Resources & Community 12,990 12,816 174 1.3% Education 114,216 114,896 (680) (0.6)% General Services Housing & Property 4,327 4,469 (142) (3.3)% Environmental & Commercial Services 28,202 29,020 (818) (2.9)% Economic Growth & Development Services 3,544 2,865 679 19.2% HR, ICT & Organisational Development 5,785 5,897 (112) (1.9)% Financial Services 1,631 2,043 (412) (25.3)% Governance, Strategy & Perfomance 5,680 5,932 (252) (4.4)% Other Services 2,495 3,144 (649) (26.0)% SERVICES excl HEALTH & SOCIAL CARE 178,870 181,082 (2,212) (1.2)% Health & Social Care (IJB) 76,970 78,741 (1,771) (2.3)% Funded from central provision 0 855 (855) - Health & Social Care (Non IJB) 446 372 74 16.6% TOTAL SERVICES incl HEALTH & SOCIAL CARE 256,286 261,050 (4,764) (1.9)% Loans Charges 16,407 17,207 (800) (4.9)% Provision for Contingencies and Inflation 1,636 4,097 (2,461) (150.4)% Additional Costs 8,819 3,215 5,604 63.5% Unallocated Savings (1,207) (2,222) 1,015 (84.1)% TOTAL PROVISIONS 9,248 5,090 4,158 45% TOTAL GENERAL SERVICES EXPENDITURE 281,941 283,347 (1,406) -0.5% Funded By: Scottish Government Grant 216,711 216,296 415 0.2% Pay Award funding 0 1283 (1,283) 0.0% Council Tax 51,804 51,804 0 0.0% Funded From Reserves: DSM c/f 1,465 1,677 (212) (14.5)% Transformation 784 53 731 93.2% Working 8,882 10,858 (1,976) (22.2)% Other Earmarked 1,159 1,159 0 0.0% MGD Cash Flow 1136 0 1,136 100.0% Council Priorities 0 217 (217) 0.0% TOTAL FUNDING 281,941 283,347 (1,406) (0.5)% OVERALL VARIANCE 0 0 0 Commentary on Quarter 3 Performance Environmental & Commercial Services: projecting an outturn of £818k over; shortfall in income from car parking and harbours, alongside increased costs and one off expenditure. Overall the estimated out-turn position for 2024/25 is expenditure over budget of £1,406,000 or 0.5% of budget for the year, including services delivered on behalf of the MIJB. Education: a projected overspend of £680,000 primarily due to central supply costs and Out of Area. Staff vacancies above budget show an underspend. Health & Social Care (IJB) The estimated out-turn position for the MIJB is an overspend of £5.583m; the Council's share of funding for MIJB is 47%, £2.626m 4.6% 40.5% 1.5% 10.0% 1.3%2.1% 0.6% 2.0% 0.9% 27.3% 0.0% 0.2% 5.8%Budget 2024/25 % of Total Education, Resources & Community Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Financial Services Governance, Strategy & Perfomance Other Services Health & Social Care (IJB) Cost sharing agreement Health & Social Care (Non IJB) Loans Charges 4.5% 40.5% 1.6% 10.2% 1.0% 2.1% 0.7% 2.1% 1.1% 27.8% 0.3% 0.1% 6.1%Est Outturn % of Total Education, Resources & Community Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Financial Services Governance, Strategy & Perfomance Other Services Health & Social Care (IJB) Cost sharing agreement Health & Social Care (Non IJB) Loans Charges (2,000) (1,500) (1,000) (500) 0 500 1,000 £000's Est Outturn Variance to Budget (excl Loans & Provisions) Education, Resources & Community #REF! Education General Services Housing & Property Environmental & Commercial Services Economic Growth & Development Services HR, ICT & Organisational Development Governance, Strategy & Perfomance Other Services Health & Social Care (IJB) Health & Social Care (Non IJB) Item 9. Page 101
Page 102
Page 102
Page 103
Allocated Budget Provisions for Contingencies and Inflation Additional costs Savings Budget Loan Charges Depreciation Total Budget £000s £000s £000s £000s £000s £000s £000s £000s MC 28 Feb 2024 256,525 4,504 11,944 (10,586) 262,387 16,407 278,794 School carry forwards 753 753 753 PEF/SEF carry forwards 840 840 840 ELC carry forwards 34 34 34 Funded from Transformation Earmarked Reserve (43) (43) -43 Funded from Other Earmarked Reserves 822 822 822 Adjustment 1 - release to departments (3,677) (2,399) (2,639) 8,715 0 0 Corporate Committee 27/8/24 255,254 2,105 9,305 (1,871) 264,793 16,407 0 281,200 Additional GRG: Redeterminations 315 315 315 Additional Funding (to rec to overview) 1,000 1,000 1,000 Additional Council Tax (increase to Ctax base) 429 429 429 Savings approved at MC 25/9/24 (50) 50 0 0 Funded from Working Reserves (1,318) (1,318) -1,318 Funded from Transformation Earmarked Reserve 96 96 96 Funded from Other Earmarked Reserves 219 219 219 Adjustment 2 - release to departments 656 (469) (801) 614 0 0 Moray Council 4/12/24 256,286 1,636 8,819 (1,207) 265,534 16,407 0 281,941 APPENDIX 3 Item 9. Page 103
Page 104
Page 104
Page 105
APPENDIX 4 ALLOCATIONS FROM PROVISIONS Provision for Contingencies and Inflation Committee reference £000s £000s Balance at 30 June 2024 Corp 27/8/24 2,105 Education MBS (76) Contract Inflation increases (33) Increase in PVI hourly rate (342) Regrading H&SC post (9) Sale of unit of Coulardbank Industrial Estate, Lossiemouth (9) (469) Balance at 30 September 2024 1,636 Additional Costs Committee reference £000s £000s Balance at 30 June 2024 Corp 27/8/24 9,305 Movements in General Revenue Grant Redeterminations Scottish School Milk Subsidy Scheme 19 Chidlrens Social Care pay uplift 296 315 Additional Budget Pressures approved since budget setFusion app - school catering Corp 27/8/24 13 13 Budget pressures drawn down in Quarter 2 School roll numbers (63) NDR Liabilities increase in Uniform Business Rates (UBR) (230) Fusion app - school catering (13) New Burdens Free School Meals expansion (63) Service Developments Detached Youth Workers (62) Community Wardens (87) Additional funding allocated Chidlrens Social Care pay uplift (296) (814) Balance at 30 September 2024 8,819 Savings & Charges Committee reference £000s £000s Balance at 30 June 2024 Corp 27/8/24 (1,871) APPENDIX 4 Item 9. Page 105
Page 106
APPENDIX 4 Additional Savings/income identified since budget set: Savings approved at MC 25.9.24 MC 25/9/24 (50) Environmental & Commercial Services savings 8 Economic Growth and Development savings 152 Housing and Property 46 Education 247 Education Resources and Communities 71 Governance, Strategy and Performance HR, ICT & Organisational Development 3 Financial Services 30 Childrens Services Cross Service: NESPF pension fund rate from 19.3% to 14.3% adjustment (1) Income target per budget paper Environmental & Commercial Services charges 158 714 Balance at 30 September 2024 (1,207) Page 106
Page 107
APPENDIX 5 BUDGET PRESSURES Ref Description Original Amount Drawn Down Balance Status Comments RECOGNISED WHEN BUDGET SET £000 £000 £000 2023/24 opening position adj NDR Revaluation 37 23 14 Education School Roll numbers 243 53 190 Teacher's Pension increase from 23% to 26% (wef 1 April 2024) 1,500 1,517 (17) Economic Growth & Development MGD revenue contribution STEM 62 0 62 FBC reported to Council on 25 Sept and approved by Scottish Govt 5 Nov. £44k required for revenue costs in Q3 & 4 Environmental & Commercial Deposit Return Scheme 30 0 30 Won't be required this year. Move to 25-26 Fusion App upgrade - School catering 13 13 0 HR, ICT & Organisational Development ICT Software subscription 36 36 0 Other Uprating Personal & Nursing Care (share of £11.5m) 80 0 80 Allocation figures awaited but is a share of £11.5m and estimated at £215k Additonal Funding to the Scottish Welfare Fund - one year only 40 40 0 Cross Service Revised IMP 596 195 401 Nothing further funding will be drawn down as all positions finished in August. Increase in Loans Charges 800 800 Quarter 2 estimate this is required in full NDR Liabilities increase in Uniform Business Rates (UBR) 290 230 60 small number of queried accounts outstanding which may need further draw down. Emailed JT/IW for update 17.10.24 Item 9. Page 107
Page 108
Electricity/Gas increase 635 0 635 Unlikely to be required. Email from Iain Highet with latest 24/25 projections suggests that current budget for Gas/electricity should be sufficient to cover costs overall but Trade Union Facility time 57 0 57 for HR part - £23k was drawn down as V1 in 23/24 and has rolled so no further drawdown required but please advise if you wish any further entries posted to record as BP 24/25. ASN - MC 28/6/23 perm £0.7m 434 434 0 ASN - MC 28/6/23 temp £1.1m 325 325 0 MIJB Share of core overspend 5,000 0 5,000 Update on MIJB estimated outturn given in report. Qtr 2 £2m share of overspend Total 10,178 2,866 7,312 Funded from Transformation Earmarked Reserves Joint Transition Plan 30 0 30 May fall into next year. Looking at Procurement just now. Will update for Q3 Total 30 0 30 Free School Meals Expansion 1,204 63 1,141 A further £81k is required for school holidays Expansion of UFSM 79 79 0 SERVICE DEVELOPMENTS Levelling Up Fund 176 0 176 Still waitng for the outcome of the Investment plan to be approved. Will update in Q3. Likely to be little spend in this financial year Detached Youth Workers (8x0.69FTE) 200 62 138 4 positions drawn down. I understand there is a hold on the other 4. Community Wardens (2FTE) 90 87 3 Drawn down in full REDETERMINATIONS School Milk Subsidy Scheme 19 0 19 Children's Social Care Pay uplift 296 296 0 FUNDING FOR NEW DUTIES Page 108
Page 109
Total 2,064 587 1,477 Total 12,272 3,453 8,819 No longer required/slipped into future years Not taken and uncertain if required - more detail to be given Not taken but still required - more detail to be given Taken in full, or if more than original allocation Page 109
Page 110
Page 110
Page 111
SAVINGS APPENDIX 6 Update Q2 Ref Description Amount Posted Balance Status Reason for balance £000 £000 £000 2023/24 opening position adj Service Concession PPP (1,168) - (1,168) Saving will be taken next quarter exact amount not calculated. Reduction in reinvestment costs (18) 0 (18) Saving will be taken Review of purchasing card (30) 0 (30) VAT saving - Council wide Approved when 2023/24 budget set: Environmental & Commercial Services Roads maintenance - hire out machinery (100) 0 (100) Potential savings will not materialise this FY, and possibly not until well into 2025/26 Dallachy - closure (630) 0 (630) Tender for closure works now live. Likely to be April before the works commence. Move saving to 25-26 Stop School Transport on In Service Days (6) 6 0 Harbours commercial income (30) 30 0 Building cleaning HQ (20) 0 (20) Will be a part year saving this year from Oct - March. Will confirm amount for Q3 Waste Management - Increase charges for garden waste to £50 (308) 308 0 Underachievment of £120k to go back against savings. Open Spaces - Uplift burial charges to full cost recovery (165) 0 (165) Full cost recovery exercise is complete. £52k of saving achieved which will be taken in Q3. Open Spaces - Maintain parks of Common Good/Trust land from income from CG/Trusts as far as possible (92) 0 (92) Saving/income will be taken Catering - Dynamic Pricing (6) 6 0 Catering - Withdraw from Food for Life (70) 70 0 Fleet - Lease Specialist Vehicles (76) 0 (76) Fleet have identified externally leased vehicles that can be ceased and therefore reduced costs. User departments will share existing vehicles/plant. When vehicles have been collected, savings will then be generated and processed. Waste Management - Reduce HWRC opening hours (close 1 weekday) (50) 0 (50) Full year saving of £25K from next year as not all HWRC sites are closing on a Monday. Closure from Oct 2024 with minimal saving anticipated this year as staff are on protected salaries for 3 months. Admin - Remove 1fte (28) 31 3 Roads Maintenance - Reduce street lighting maintenance budget (25) 25 0 Roads Maintenance - Reduce operational staff by 3fte (100) 102 2 Elgin Car Parking Review - fye (311) 311 0 Energy from Waste reduced gate fee due to Electricity generation (minimum £300k) (150) 0 (150) To be reviewed for Q3. ACC invoices currently 2 months behind Sponsorship income (10) 0 (10) Lands and Parks - reduce Glyphosate use (8) 8 0 Economic Growth and Development Statutory fees for planning applications (40) 0 (40) Planning fee income on target. Will post for Q3 Employability - restructure the service so 1 keyworker is externally funded (13) 14 1 Item 9. Page 111
Page 112
Economic Development - Reduce budget for Business Gateway Advisor by 0.2fte reflecting current level of staffing (11) 12 1 Environmental Health and Trading Standards - Remove 1 Animal Services Officer post (30) 30 0 Planning Income (4) 4 0 Building Standards (24) 24 0 Building st - enforcement (18) 18 0 Fair Trading (38) 38 0 Perfomance monitoring (52) 36 (16) Part year effect. Full saving not able to be taken until 25/26 Fraud post (24) 24 0 Money Advice (66) 95 29 Moray Training - VER (102) 100 (2) Strategic Planning (Appendix 4 item 10) (33) 33 0 Environmental Health (Appendix 5 item 10) (48) 0 (48) Post was held in Transform but likely to be resolved now that no compulsory redundancy ban has been lifted. Potentially £12k saving this year and balance of £36k to be taken in 25-26 Corporate/Cross service EV / ULE salary sacrifice (20) 0 (20) Not yet operational Increase vacancy factor in line with pay awards (640) 0 (640) Will be calculated and posted against budgets in Q3 NESPF rate decrease from 19.3% to 14.3% from 1 April 2024 (1,900) 4,455 2,555 NESPF (Add back H&SC) (660) 0 (660) Empty Property Relief (338) 338 0 Discretionary NDR Relief (27) 27 0 Corporate Training (56) 57 1 Budget templates Primary Advisor role (15) 15 0 Housing and Property Homelessness - Negotiate discount for block pourchased temporary accommodation (96) 96 0 Homelessness - Allocate a further 5 flats for homelessness accommodation (5) 5 0 Housing Needs - Allocate 50% of Housing Support costs to HRA (197) 220 23 Housing General Services - Reallocate duties to HRA, reflecting general pattern of support reqd for Gypsy Travellers (8) 8 0 Property - Take a more commercial approach to rent reviews (65) 65 0 Property - Close two corporate offices (25) 44 19 Savings for closure of offices are being taken as soon as confirmed. These savings relate to 9 North Guildry and 13 Cluny Square (part year) but savinsg proposed for Beechbrae and 232-240 High St are to follow. Page 112
Page 113
Sale of 30/32 High St (MC 25.9.24) 2 2 Additional property saving taken Temporary Accommodation - increased charging policy (42) 0 (42) This was already taken as part of the opening postion adjustments Langstane rental 8 8 Education Early Learning & Childcare (ELC) - Delete Early Years PSA (12) 12 0 ELC - Reduce Early Years teaching team by 2 posts (83) 83 0 Primary - Pupil teacher ration move to statutory requirement (42) 41 (1) Secondary Schools - Reduce DSM (188) 192 4 Central Education - Remove 1QIM (109) 85 (24) Balance to be taken next year Learning Technologist (50) 43 (7) Schools Energy saving 0 150 150 St Thomas & St Peters pairing fm Apr 24 5 5 Knockando PS unpairing from Apr 24 48 48 Amend Cullen/Portgordon/Portknockie pairing fm Aug 24 (fye 2025-26) 10 10 East End/St Sylvester Federation Model (fye 2025- 26) (15) (15) MGD EY Stem PM end of funding 0 58 58 ELC CMP - NM's wks & 36.25-35hrs saving 0 62 62 ELC CMP - YR to TT savings 24/25 81 81 ELC CMP YR to TT saving 24/25 - Addition 2 2 ELC rental income 32 32 Education Resources and Communities Business Admin - Remove 4 fte posts (55) 111 56 The saving was to be over 2 years but due to vacancies it has all been taken in 24/25. There will be no further saving in 25/26 Primary School FM - Delete PAT testing post and contract out (27) 27 0 Sport and Culture - Replace mobile library with redesigned service (20) 20 0 Sport and Culture - Remove Health and Wellbeing Officer post (51) 51 0 Communities Team - Remove 1 Outdoor Learning post (59) 59 0 Communities Team - Remove 1.75fte from the Community Support Unit (88) 88 0 Communities Team - Reduce community capacity training budget (4) 4 0 Elgin Community Centre closure - VER (163) 123 (40) This will not be fully achieved - addl £51k posted in Q 2. There is a £71k budget in surplus property, this saving will be made when the building is sold. Library contract management systems (7) 7 0 Relocate staff from Auchernack plus Forres Community Centre staff restructure (20) 23 3 Page 113
Page 114
Governance, Strategy and Performance Customer Service - Print contract (13) 13 0 Customer Service - Reduce Contact Centre staff by 4fte (114) 114 0 Welfare Benefits & Money Advice - Co-locate Citizen's Advice Bureau (20) 0 (20) Report due to Committee HR, ICT and Organisational Development HR - Cease central short leating (50) 48 (2) Financial Services Procurement - Reduce the Buying Team by 1fte (31) 32 1 Childrens Services Children's Services savings target (454) 454 0 Savings approved at MC 25.9.24 Economic Growth and Development - misc (2) 2 0 Strategic Planning - misc (15) 15 0 HR, ICT and OD - misc (3) 3 0 Taxation - recharges to outside bodies (10) 10 0 Internal Audit - recharges to outside bodies (20) 20 0 Indicative Savings from I&M programme Stream 2: ICT & Digital - Schools Admin (56) 0 (56) Stream 4: Review & Expansion of Flexible Working (44) 0 (44) Care placements (245) 245 0 Reduction in reinvestment costs (4) 0 (4) LEAN review (125) 0 (125) TEMPORARY SAVIINGS Approved when 2023/24 budget set: Grampian Valuation Joint Board - refund 2018/19, 2020/21, 2021/22, 2022/23 (62) - (62) Amount will be confirmed when the accounts for 2023/24 are audited and approved by the Board LHEES saving 23/24 (50) 50 0 CHARGES Income target per budget paper (342) 281 (61) Increase to Leisure income target (MC 26/6/24) 75 75 Total Approved when budget set (9,370) 9,304 9 Further savings approved in 24/25 (50) 125 0 Savings c/fwd from 2023/24 (1,216) 0 (1,216) Balance at Qtr 2 (10,636) 9,429 (1,207) * Status Saving not taken and wont be achieved this year - if slipped into future years please give details in Col I Saving not taken and uncertain if it will be achieved in full this year Saving taken, or will be taken, in full Page 114
Page 115
APPENDIX 7 General Reserves Committee reference Approved £000s Budget released £000s General Reserves @ 1 April 2024 6,000 Free balance @ 30 Sept 2024 6,000 Transformation Ear marked Reserve Committee reference Approved £000s Budget released £000s Balance @ 1 April 2024 6,152 Project Management revenue costs for closure of two corporate officesSMC 25/10/23 (105) Plan for Just Transition Moray MC 28/2/24 (30) Clear Transfrom rolled budgets 24/25 to reserves 174 174 Reinstate Transform budget - PMO Admin (45) (45) Reinstate Transform budget - Snr Proj Officer (Office Review) (69) (69) Reinstate Transform budget - to cover costs 1377 PROP 2 2 Alliance Leisure Review (27) (27) BIM (64) (64) ECLS 19.9.23 - IMP Digital Snr ICT Officer to Sept24 (24) (24) (188) (53) Free balance @ 30 Sept 2024 5,964 Working Ear marked Reserve Committee reference Approved £000s Budget released £000s Balance @ 1 April 2024 8,686 Less commitments against reserves when budget was set: To balance budget MC 28/2/24 Funding from reserves approved in 2023/24 Corporate Training MC 26/6/24 (50) Homelessness MC 26/6/24 (20) Economic Development (East of Scotland Homes Fund) MC 26/6/24 (45) Burial Grounds - Headstones Inspections MC 26/6/24 (10) 10 Open Spaces - Tree Inspections MC 26/6/24 (67) 67 School Catering Fusion App upgrade Corp 27.8.24 (13) Savings approved at MC 25/9/24 MC 25/9/24 50 Council Tax increase (reduce use of reserves) 429 274 Approved use of reserves Free balance @ 30 Sept 2024 8,960 Item 9. Page 115
Page 116
Council Priorities ear marked Reserve Committee reference Approved £000s Budget released £000s Balance @ 1 April 2024 3,134 Voluntary Early Retirement costs (217) Free balance @ 30 Sept 2024 2,917 MGD Cash Flow Reserve Committee reference Approved £000s Budget released £000s Balance @ 1 April 2024 4,000 Free balance @ 30 Sept 2024 4,000 Service Concession (PPP) Committee reference Approved £000s Budget released £000s Balance @ 1 April 2024 7,526 Free balance @ 30 Sept 2024 7,526 Page 116
Page 117
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: CAPITAL PLAN 2024/25 BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT and FINANCE) 1. REASON FOR REPORT 1.1 To advise the Committee of expenditure to 30 September 2024 under the capital plan for financial year 2024/25 and of estimates of projected expenditure profiled into quarters. 1.2 This report is submitted to Committee in terms of Section III (B) 9 of the Council’s Administrative Scheme relating to monitoring progress of projects in the approved capital plan including any revisions to the price or phasing on a quarterly basis. 2. RECOMMENDATION 2.1 It is recommended that the Council: (i) considers and notes expenditure to 30 September 2024 of £7,087,000; (ii) considers and notes the current projected full year out turn of £42,292,000, prior to approval, and £43,350,000 following approval of amendments, as set out in APPENDIX 1; (iii) considers and notes the projected overall expenditure for projects spanning more than one financial year, as set out in APPENDIX 2 (iv) considers and notes the amended projected expenditure in the year as detailed in section 7 of the report; (v) considers and notes the latest affordability indicator outturn of 8.77% against an upper limit of 10% as set out in paragraph 8.1; and (vi) approve further net amendments of £6,798,000 for 2024/25, including carried forward requests to 2025/26 of £8,088,000 to the capital plan as detailed in section 5. Item 10. Page 117
Page 118
3. BACKGROUND 3.1 The capital plan for 2024/25 totalling £49,662,000 (excluding Moray Growth Deal projects) was approved by Moray Council on 24 January 2024 (paragraph 11 of the Minute refers). The Council approved carried forward budget and reprofiling amendments to future years of £12,529,000 on 26 June 2024 (paragraph 13 of the Minute refers) and further amendments of £3,047,000 at Corporate Committee on 27 August 2024 (paragraph 9 of the Minute refers). The results of these amendments are an amended capital plan for 2024/25 of £50,148,000, now including Moray Growth Deal projects. 3.2 The 2024/25 Capital Plan includes a £9,000,000 slippage factor, a reduction in core budget of 15%. For future years a cap on capital expenditure is to be applied to ensure the affordability of the capital plan. At a special meeting of the Council on 22 October 2024 (paragraph 9 of the Minute refers) the mechanism for applying a cap on capital expenditure from 2025/26 was agreed. The cap will allow a systematic approach to capital budgeting, focusing on asset prioritisation for individual projects as well as a general reduction in on-going programmes of work. 4. CAPITAL PLAN 2024/2025 4.1 The summary capital plan is shown below, with actual expenditure to 30 September 2024 of £7,087,000. This equates to 18% of the currently approved Capital Plan and is an underspend of £7,144,000 against budget to date. General Capital Grant of £4,500,000 has been received from the Scottish Government. In addition to this, Developer Contributions of £707,000 have been received along with capital receipts of £300,000 for the sale of land, buildings and vehicles. 4.2 The following table provides a breakdown of variances to date. For budgets with a variance of +/- £10,000 further narrative is provided. Estimated full year figures, and variances, are set out in APPENDIX 1. Area Para ref Annual Budget £000 Budget to Date £000 Spend to Date £000 (Over)/ Under Spend £000 Bridges 4.3 5,491 312 335 (23) Car Parks n/a 417 2 2 - Climate Change n/a 631 - - - Corporate Buildings n/a 46 - 4 (4) Fleet 4.4 3,783 2,873 828 2,045 Flood Risk & Coastal Protection 4.5 430 235 173 62 Harbours 4.6 1,483 1,500 1,568 (68) ICT 4.7 526 173 92 81 Industrial Portfolio 4.8 279 90 26 64 Learning Estate 4.9 11,979 3,031 1,612 1,419 Libraries & Leisure 4.10 3,300 127 21 106 Parks & Open Spaces 4.11 1,166 36 142 (107) Road Improvements 4.12 3,927 1,786 317 1,469 Page 118
Page 119
Area Para ref Annual Budget £000 Budget to Date £000 Spend to Date £000 (Over)/ Under Spend £000 Street Lighting 4.13 656 309 364 (55) Traffic & Road Safety n/a 277 59 60 (1) Waste Management n/a 3,275 127 117 10 Spend to Save - n/a 132 17 17 - Economic Development 4.14 1,294 188 161 27 Moray Growth Deal 4.15 603 3,003 1,099 1,904 Active Travel Infrastructure 4.16 411 226 148 78 TOTAL 40,106 14,094 7,087 7,077 4.3 Expenditure on Bridges was £335,000 against a budget to date of £312,000. The overspend to date is a result of works at Viewmill Bridge being completed earlier than profiled. A request to carry forward £364,000 has been made with details outlined in paragraph 5.2. Current projections, after that adjustment, are for an underspend of £20,000. 4.4 Expenditure on Fleet was £828,000 against a budget to date of £2,873,000. The underspend is due to the budget profile being based on vehicle orders, but not all orders placed have yet been delivered. The budget profile going forward will be corrected to better reflect spend timings and there is no expected variance for the full year. 4.5 Expenditure on Flood Risk Management and Costal Protection to 30 September 2024 was £173,000 against the profiled budget of £235,000 resulting in an underspend to date of £62,000. Minor delays due to licensing requirements for coastal erosion protection at Kingston have resulted in works being re-profiled to the next quarter. Historic compensation claims related to the Elgin and Findhorn Flood Alleviation Schemes have been settled resulting in a projected overspend for the year of £165,000. All other planned projects are projected to stay in budget. 4.6 Expenditure on Harbours to date has been £1,568,000 against a budget of £1,500,000. Overspend for the period was due to higher than anticipated costs for rock cutting and power upgrades at Buckie Harbour. Given this, the projected outturn for the year is an overspend of £96,000 4.7 Expenditure on ICT for the period was £92,000 against budget of £173,000. The underspend is attributable to delays in ordering equipment and has been reprofiled. Expenditure for the year is projected to be on budget. 4.8 Expenditure on the Industrial Estate portfolio for the period was £26,000 against a budget of £90,000. Workforce changes have resulted in delays to the programme which has been reprofiled to future quarters. Expenditure for the year is projected to be on budget. Page 119
Page 120
4.9 Expenditure on the Learning Estate for the period was £1,612,000 against planned spend of £3,031,000. The underspend is attributable primarily to project delays materialising on Elgin High School Extension and Forres Academy as well as works not starting across a number of schools under the BB programme, either due to additional design and survey works being required or the lead in time for procurement not being fully considered when profiling the budget. Further information related to the reprofiling and carry forward of spend is noted in paragraph 5.7 of this report. 4.10 Expenditure on Libraries and Leisure was £21,000 against planned spend of £127,000. Refurbishment works planned for quarter 2 are now expected in the next quarter. Spend associated with Moray Leisure Centre has been paused pending a review, which is the subject of another report to this meeting of Council. Pending the decision of the meeting there has been no adjustment to the projected spend. However, part of this budget has been identified as amber rated spend as noted in para 6.3 of the report and may be adjusted in future periods. 4.11 Expenditure on Parks and Open Spaces was £142,000 against planned spend of £36,000. Favourable summer conditions allowed two play area upgrades to be completed ahead of schedule bringing costs forward one quarter. There is a recommended carry forward relating to two play areas which have not progressed so quickly in paragraph 6.8 of this report. 4.12 Expenditure on Roads Improvements is recorded as £317,000 against a budget of £1,786,000. The apparent underspend has been reprofiled into future periods and is a result of works carried out not being recharged to capital before the quarter end. Cost pressures associated with landslips have highlighted an expected overspend in the year. Anticipated costs of £752,000 have been identified and where possible, existing budget has been allocated to absorb the cost. However, it is currently expected the budget will have an overspend of £473, 000 for the year. 4.13 Expenditure on Street Lighting for the period was £364,00 against planned spend of £309,000. This is considered to be a timing difference with expenditure for the year anticipated to be on budget. 4.14 Expenditure on Economic Development was £161,000 against a budget of £188,000. The underspend of £27,000 was due to a reprofiling of the Nature Restoration Fund brought forward from 2023/24 with a request to carry forward £18,000 to future years. 4.15 Expenditure on the Moray Growth Deal was £1,099,000 against anticipated spend to date of £3,003,000. The largest contribution to the underspend was delay in site acquisition for the Housing Mix Delivery. Delays in projects reaching full business case have also pushed back expenditure. Moray Growth Deal is projecting an estimated overall underspend in the year of £452,000. Further information related to the reprofiling and carry forward of spend is contained in paragraph 5.13 of the report. 4.16 Expenditure on Active Travel Infrastructure, which is fully funded by grant, was £148,000 against anticipated spend of £226,000. Initial profiling has been Page 120
Page 121
updated to reflect more accurate timings follow a review of the project profile. Funding is expected to be fully spent during the year. 5. CAPITAL PLAN AMENDMENTS 5.1 The following amendments are recommended for approval. Area Para ref Amendment Of which Carry Forward Increase £000 £000 Corporate Buildings 5.4 185 - Fleet 5.3/5.5/5.10 385 - Flood Risk Management and Coastal Protection 5.6 77 - Fleet 385 - ICT 5.7 92 - Roads Improvements 5.9 342 Active Travel Infrastructure Fund 5.11 23 - Waste – Dallachy 5.14 - 1,000 Total Increase 1,104 - Decrease Bridges 5.2 (364) 364 Climate Change 5.3 (431) 218 Learning Estate 5.8 (4,750) 4,497 Parks and Open Spaces 5.15 (190) 190 Nature Restoration Fund 5.12 (18) 18 Moray Growth Deal 5.13 (2,149) 2,149 Total Decrease (7,902) TOTAL NET AMENDMENTS (6,798) 8,088 5.2 It is recommended that £364,000 is deferred from the Bridges budget. Works related to New Bishopmill Bridge had been reprogrammed to future years in anticipation of works at Cloddach Bridge beginning this financial year. Confirmation on whether funding will be made available for Cloddach Bridge is still outstanding. Pending final decision, the Bridges team are reviewing work programmes to evaluate the possibility of pulling this work forward in the event of Cloddach Bridge not progressing. It is however unlikely the Bridges team would be unable to mobilise before the year end. 5.3 The £631,000 budget for Climate Change should have been split, with an element allocated towards the purchase of electric vehicles (EV) and EV charging points. It is recommended that £213,000 is reallocated to Fleet Services for this purpose. It is also recommended that £218,000 is carried forward to future years for Climate Change. Current planned spend in the year focuses on solar energy projects to council buildings and future spend will focus on the school estate, where time on site is limited to holidays. It is also expected future year spend will include more complex spend, for example where planning applications are required. Page 121
Page 122
5.4 £160,000 of monies received from SSEN for community resilience projects have been made available for the purchase of three power generators to be installed at sites across Moray – Aberlour Primary School, Applegrove Primary School and Cluny Primary. A need for a fourth generator (to be installed at Ashgrove depot, Elgin) has been identified and there are opportunities for economies of scale in terms of cost and design time if these are combined. It is recommended that £25,000 is added to the capital plan (Corporate Buildings) for 2024/25 as a contribution from Moray Council alongside the £160,000 received from SSEN. 5.5 It is recommended that a further £122,000 is re-instated from the original slippage applied to fleet services to cover the unexpected write-off of a vehicle.. 5.6 It is recommended that £77,000 is redirected from Roads Improvement to Flood Risk Management and Coastal Protection. Coastal erosion works at Findhorn have been identified at a cost of £155,000 with the remining cost being absorbed by existing budget. 5.7 It is recommended £92,000 is added to the capital plan to allow for the purchase and installation of an upgraded cashless catering system, Fusion, for schools. This is an essential software replacement that was not included in the original ICT budget. 5.8 Following the reprofiling of spend on the Learning Estate, a net reduction of £4,750,000 from the 2024/25 capital plan is being recommended. Of the reduction, £4,497.000 is recommended to be deferred to future years and £253,000 of design fee contingency to be removed completely from the plan. The deferral of works is due to the above mentioned delays in para 4.9. A further report is due to the Education Resources and Communities Committee in February 2025. 5.8 It is recommended that £190,000 is to be carried forward to 2025/26 for Play Area Upgrades. Public consultation, procurement lead in times and favourable weather conditions are required, making it unlikely these works can be completed this financial year. These upgrades are fully funded by Scottish Government grant. 5.9 It is recommended that £342,000 is re-instated from the original slippage applied to Road Improvements to cover emerging pressures with landslips. A programme of works is being established with planned works at Findhorn (noted above), A95 River Isla and A959 Creag Chalcaidh Quarry alongside feasibility studies expected to be carried out this year. 5.10 It is recommended that £50,000 is added to the plan for a MOT Testing Station upgrade as a cost avoidance exercise. Current equipment utilised by Fleet Services has begun to fail and the expected costs and loss of income relating to outsourcing this is estimated at £50,000 p.a. – loss of income from testing taxis (£20,000) and other vehicles (£12,000) plus additional costs of outsourcing testing (£17,000). Upgrading the MOT test equipment would also provide the opportunity to carry out testing on larger vehicles which is currently being outsourced at £2,000 pa. Page 122
Page 123
5.11 A slippage factor of £23,000 has incorrectly been applied to the capital plan for the Active Travel Infrastructure Fund. It is recommended this budget (Other Funded Projects) is reinstated as this will be fully funded from external sources. 5.12 It is recommended that £18,000 is carried forward from the Nature Restoration Fund. Reduced government funding has resulted in a reprogramming of current budget which has created a short delay in works being completed by the year end. 5.13 It is recommended that £2,149,000 is carried forward from Moray Growth Deal. A reprofile request has gone to Scottish Government as a result of development of the Manufacturing Innovation Centre being slower than initially anticipated. The request also covers spend on the Housing Mix Delivery and Bus Revolution projects progressing ahead of schedule. 5.14 From the end of 2025 landfilling of biodegradable waste will be banned. The Council has transitioned to the NESS Energy from Waste incinerator for the disposal of its mixed municipal waste, and, as part of the 2024/25 capital plan, £449,000 was earmarked for the final capping of Dallachy landfill. A tender exercise was undertaken in June/July 2024 but no compliant bids were received. Following the initial tender exercise, an options appraisal and market research were undertaken to understand the options available to the Council and the potential cost pressures for the final capping exercise. The tender for the capping works was republished and closed on 18 November 2024. Whilst the works will not commence until April 2025, and no spend will be needed until 2025/26, it is anticipated that approval of an additional £1,000,000 is required within 2024/25 in order to be able to award the contract in 2024/25. Once approved, carry forward of the full year budget 2025/26 will be recommended. The Council has no option but to carry out the final capping of Dallachy in accordance with statutory requirements. 5.15 In total, amendments to decrease the capital budget for 2024/25 by £6,798,000 is being recommended, with a request to carry forward £7,088,000 into future years. 6. ESTIMATED OUTTURN 6.1 The spend projected provided by budget managers are based on the best information available at this time. Where a budget manager has not provided an estimate the capital accountant has applied their judgement. Projects are graded for confidence of achieving projected expenditure with high confidence rates as green, medium confidence as amber, and low confidence as red. A summary of the ratings is given in the table below. Risk Status RAG No of Projects Budgeted Expenditure 2024/25 £000 High confidence of spend to estimate G 98 13,372 Page 123
Page 124
Medium confidence of spend to estimate A 49 22,239 Low confidence of spend to estimate R 7 6,681 Total Projected Expenditure 153 42,292 6.2 Red Rating - £6,681.000 has been given low confidence of spend to estimate in the year. The majority of this balance is made up of Bridges budget (£4,137,000) for Cloddach Bridge, as there is still uncertainty around government funding. £1,678,000 relates to two Moray Growth Deal projects (EY STEM and Manufacturing Innovation Centre) which are progressing slower than anticipated. The remaining red rating spend was for Dallachy landfill (£499,000) which will unlikely be progressed this year as the anticipated cost is higher than budget (see paragraph 6.14) and £350,000 related to the Learning Estate 6.3 Amber Rating - £22,239,000 has been given medium confidence of spend to estimate in the year. This equates to 54% of the capital programme. Three Moray Growth Deal Projects (Culture Quarter, Housing Mix Delivery and Business Enterprise Hub) equate to £5,688,000 of amber spend driven by the complexity of the projects and various business case sign off stages. £4,586,000 is related to the Learning Estate based on the current pace of works being completed and the required procurement lead in times for a number of the projects. £4,118,000 is related to fleet spend which has been hard to profile against in the last couple of years given the lengthy delivery windows for ordering new vehicles. £2,784,000 of Library and Leisure spend is currently pending the outcome of the Leisure Review. £2,428,000 is related to Waste Management for budget set aside of Ness Energy for Waste final account settlement. The balance of amber rate spend is to account for the optimism that budget managers historically give when profiling spend. 6.4 The Estimated outturn from budget managers has been revised at Programme level to reflect levels of slippage based on expenditure to date and levels of overall expenditure in the last three financial years. The 15% slippage during the budget setting has already been accounted for. £000 Projected Spend notified per departments 43,350 Amend for slippage on red projects 6,681 Amend for slippage on amber projects (35%) 7,784 Amend for slippage on green projects (15%) 2,005 Revised Estimated Out-turn 26,880 7. EMERGING ISSUES 7.1 An action of the Best Value Review was to align the capital plan to the revenue budget, particularly in terms of affordability. The capital plan has an impact on the revenue budget by the way of financing costs to service the loan debt taken out to fund capital expenditure. Going forward, these reports will make reference to the current affordability indicator which is the ratio of financing costs to net revenue stream. Financing costs are principal and interest loans charges in the year, which also include charges associated with the PPP and DBFM School leases. Net revenue stream is defined as Scottish Government Revenue Grant, Council Tax Income and NDR Income. Page 124
Page 125
£000 £000 Financing Cost Financing Costs for prior year spend 22,142 Estimated Financing cost for current year spend 1,087 Estimated Financing cost for PPP/DBFM Schools 93 Estimated Financing Cost 23,322 Net Revenue Budget Scottish Gov Revenue Grant 147,015 NDR (estimated) 67,220 Council Tax (estimated) 51,804 Estimated Net Revenue Budget 266,039 Affordability Indicator 8.77% The threshold for affordability has been set at 10%. The most recent estimate shows this is 8.77% which is within the threshold. 7.2 The announcement of the UK budget on 30 October 2024 plus the result of US elections have resulted in an increase in gilt yields. Borrowing rates via the PWLB are set in accordance with these gilt yields so any increases would result in higher borrowing costs for any new PWLB loans. These are monitored as part of our standard treasury management practices. 8. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Effective budget management is an essential component of delivery of Council priorities on a sustainable basis. (b) Policy and Legal There are no policy or legal implications arising directly from this report. (c) Financial implications The financial implications are highlighted within the report and APPENDICES 1 and 2 to the report. (d) Risk Implications Budget managers are aware of their responsibilities for managing budget allocations and approval for variance will be sought from Council in line with the financial regulations. (e) Staffing Implications There are no staffing implications arising directly from this report. (f) Property There are no property implications arising directly from this report. (g) Equalities/Socio Economic Impact There are no equalities issues arising from this report Page 125
Page 126
(h) Climate Change and Biodiversity Impacts There are no climate change or biodiversity issues directly arising from this report. (i) Consultations All capital budget managers have been consulted as part of the preparation of this report. All Heads of Service and the Corporate Management Team have been consulted and any comments incorporated in the report. 9. CONCLUSION 9.1 Capital expenditure to the quarter ended 30 September 2024 was £7,087,000 9.2 Capital expenditure is currently projected to be £26,397,000. Lower than the approved capital plan for 2024/25 but with a high degree of uncertainty. 9.3 Amendments to the capital plan amounting to a decrease of £6,798,000 in 2024/25 and an increase of £8,088,000 for future years is recommended. 9.4 The affordability indicator outturn is projected to be 8.77% This is within the agreed threshold of 10%. Author of Report: Jamie Fraser, Finance Manager Background Papers: Ref: SPMAN-1293228629-1175 Page 126
Page 127
Moray Council Capital Programme 2024/25 As at 30 September 2024 Section 5. Current Capital Plan 2024/2025 Budget to Date Actual to Date Variance to Date Full Year Projection Full Year Variance Amendments to QTR 2 for approval Amended Capital Plan £000 £000 £000 £000 £000 £000 £000 £000 Bridges 5,491 312 335 (23) 5,107 384 (364) 5,127 Car Parks 417 2 2 0 417 0 0 417 Climate Change 631 0 0 0 200 431 (431) 200 Corporate Buildings 46 0 4 (4) 231 (185) 185 231 Fleet 3,783 2,873 828 2,045 4,168 (385) 385 4,168 Flood Risk Management & Coastal Protection 430 235 173 62 672 (242) 77 507 Harbours 1,483 1,500 1,568 (68) 1,579 (96) 0 1,483 ICT 526 173 92 81 618 (92) 92 618 Industrial Portfolio 279 90 26 64 279 0 0 279 Learning Estate 11,979 3,031 1,612 1,419 7,229 4,750 (4,750) 7,229 Libraries & Leisure 3,300 127 21 106 1,950 1,350 0 3,300 Parks & Open Space 1,166 36 142 (107) 976 190 (190) 976 Road Improvements 3,927 1,786 317 1,469 4,271 (344) 342 4,269 Street Lighting 656 309 364 (55) 656 0 0 656 Traffic & Road Safety 277 59 60 (1) 277 (0) 0 277 Waste Management 3,275 127 117 10 3,275 0 0 3,275 Spend to Save 132 17 17 0 182 (50) 0 132 Other Funded Projects 411 226 148 78 434 (23) 23 434 Economic Development 1,294 188 161 27 1,276 18 (18) 1,276 Moray Growth Deal 10,645 3,003 1,099 1,904 8,496 2,149 (2,149) 8,496 50,148 14,094 7,087 7,007 42,292 7,856 (6,798) 43,350 Target Funding Prudential Borrowing 35,350 1,310 28,761 General Capital Grant (exc PSHG and CYPA) 7,959 4,286 7,959 Moray Growth Deal 6,238 476 6,029 Other Grants & Contributions 411 308 411 Developers Contributions 35 707 35 Useable capital receipts b/f 0 0 0 Receipts generated in year 155 0 155 50,148 7,087 43,350 APPENDIX 1 Section 4. Item 10. Page 127
Page 128
Page 128
Page 129
Major Capital Projects spanning more than 1 financial years (as at 30th September 2024) APPENDIX 2 Approved budget Total Expenditure in previous years Current budget 24-25 Actual spend 24-25 Remaining budget 24-25 Projected future years budget required Estimated Final Cost Projected Variance £000 £000 £000 £000 £000 £000 £000 £000 Schools Estate BB Programme 91,500 3,999 4,373 1,133 3,240 83,128 91,500 - Refurbishment and Rebuild 289,684 527 2,545 435 2,110 286,612 289,684 - Universal school meals 617 12 200 3 197 405 617 - Moray Growth Deal Bus Revolution 4,000 1,015 997 24 973 1,988 4,000 - Early Years STEM 4,800 66 2,077 115 1,962 2,657 4,800 - Housing Mix Delivery 7,500 1,385 - 157 157- 6,115 7,500 - Cultural Quarter 23,802 458 2,340 473 1,867 21,004 23,802 - Business Enterprise Hub 5,000 - 1,550 - 1,550 3,450 5,000 - Moray Aerospace, Advanced technology and Innovation Campus 27,035 - 1,032 - 1,032 26,003 27,035 - Manufacturing Innovation Centre 6,832 - 1,920 47 1,873 4,912 6,832 - Digital Health Innitiative 5,000 3,185 126 283 157- 1,689 5,000 - TOTAL 465,770 10,647 17,160 2,670 14,490 437,963 465,770 - Notes: School Estate Budget is indicative based on 10 year plan submitted 24 January 2024 Item 10. Page 129
Page 130
Page 130
Page 131
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: CAPITAL STRATEGY BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To ask Council to approve the amended Capital Strategy presented in draft as APPENDIX 1 to this report. 1.2 This report is submitted to Council in terms of Section III (B) (1) of the Council's Scheme of Administration relating to consideration of the financial and budgetary policy of the Council. 2. RECOMMENDATION 2.1 It is recommended that Council approve the amended Capital Strategy as set out in APPENDIX 1. 3. BACKGROUND 3.1 The Council’s current Capital Strategy was approved by the Council at its meeting on 24 January 2024 (paragraph 10 of the Minute refers). 3.2 The Prudential Code governs the Council’s capital expenditure. The Code states that the capital strategy should be tailored to local circumstances ensuring that each local authority will be able to determine its own prerequisites for their capital strategy, while taking into account any statutory requirements. The draft revised Capital Strategy at APPENDIX 1 complies with the Prudential Code 2021 and continues to follow the 2021 Chartered Institute of Public Finance and Accountancy (CIPFA) guidance on Capital Strategy and its emphasis on a whole organisation approach to capital planning. 3.3 As a document, the Capital Strategy complements other documents such as the Council’s Treasury Management Strategy. The Capital Strategy is not intended to be a technical document, but instead viewed as an accessible document, which sets out the context in which decisions about capital expenditure are to be made. This revised Capital Strategy sets the context for approving the Capital Plan for 2025/26, reflecting the approved mechanism for applying a cap to capital expenditure for 2025/26 onwards. Item 11. Page 131
Page 132
3.4 The draft Capital Strategy at APPENDIX 1 sets out: what constitutes capital expenditure; why the Council undertakes capital expenditure; how the capital programmes of the Council relate to Council priorities and other Council policies; the link between asset management and capital planning; how the Council finances capital expenditure; the main aims of Treasury Management; the Council’s governance arrangement for approving and monitoring capital expenditure; the risks the Council is exposed to from its capital programmes; how the Council accesses appropriate knowledge and skills; shows diagrammatically the links between different bodies, plans and processes and the Council’s capital plans. 3.5 All proposed amendments are made in tracked changes. There are no other substantive amendments proposed. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) The Capital Strategy indicates the links between the LOIP and the Council’s Corporate Plan and the Council’s planned capital expenditure (b) Policy and Legal Part 7 of the Local Government in Scotland Act 2003 requires local authorities to have regard to the Prudential Code. (c) Financial implications There are no financial implications arising directly from this report. The Capital Strategy is one of a number of documents which assist in the Council’s financial planning process. (d) Risk Implications There are no risk implications arising directly from this report. The Capital Strategy indicates risks associated with capital expenditure plans and introduces measures to deal with the risk the Council is exposed to from inflation and in particular rising construction costs and increased interest rates. There may be risks to service delivery which arise from application of the cap on capital expenditure and these will be reported as they are identified. (e) Staffing Implications There are no staffing implications arising directly from this report. Any staffing implications which arise from application of the cap on capital expenditure will be reported as they are identified. Page 132
Page 133
(f) Property There are no property implications arising directly from this report. Any property implications which arise from application of the cap of capital expenditure will be reported as they are identified. (g) Equalities/Socio Economic Impact There are no implications for equalities or the socio-economic duty arising directly from this report. (h) Climate Change and Biodiversity Impacts There are no climate change or biodiversity issues arising directly from this report. The revised Capital Strategy continues to recognise climate change as a Council priority which will have implications for the Council’s capital plan. (i) Consultations Members CMT have been consulted in the preparation of this report. 5. CONCLUSION 5.1 The Council’s Capital Strategy has been revised as part of the financial planning process 5.2 The Strategy underpins the Council’s 10 year indicative Capital Plan. Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Ref: LP/SPMAN-1293228629-1203 Page 133
Page 134
Page 134
Page 135
DRAFT APPENDIX 1 THE MORAY COUNCIL CAPITAL STRATEGY 2024/25 1. INTRODUCTION 1.1 The Council owns a range of assets which are used to deliver – directly or indirectly – services to the people of Moray. The investment needed to ensure that these assets meet the Council approved standard for the asset type is ascertained through the asset management planning process. The Capital Strategy links that process to the Council’s Capital Plan. The Council’s Corporate Asset Management Plan recognises that Asset Management Planning is an iterative process, with constraints imposed by financial affordability, and that is reflected directly in this Capital Strategy. Asset Management is recognised in the Council’s Medium to Long Term Financial Strategy as one of the main vehicles which the Council will use to make strategic shifts in expenditure to achieve financial sustainability. 1.2 The Council also requires to invest to provide the infrastructure needed for economic growth, in accordance with the Local Development Plan, but also to ensure that the Council operates efficiently and can meet the needs of transformation to a sustainable operating model. 1.3 The CIPFA Guidance to Capital Strategy 2021 recognises that a capital strategy is not simply a document but a whole organisation approach to effective, long-term planning and investment, with outputs and outcomes that lead to healthy, vibrant, green and resilient communities, businesses, organisations and geographic areas. 1.4 The Council through its medium-term financial planning, Corporate Plan, Climate Strategy and Asset Management Plans embraces the approach to capital strategy recommended by CIPFA, albeit tempered by issues of affordability, which have become more pressing in the current environment of higher interest rates and increased construction costs than were seen in the recent past. The Council has adopted a mechanism for capping the capital plan to reflect these constraints. 1.5 All investment in capital is made under the Prudential Code. A revised version of the Code was published in 2021. The new Code contains requirements for a Capital Strategy and this Strategy complies with those requirements. The Code states that: “A capital strategy should give a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the delivery of the authority’s plans and provisions of services along with an overview of how associated risk is managed and the implications for future financial sustainability.” 1.6 The Code requires each local authority to tailor their capital strategy to their own individual circumstances, whilst containing sufficient detail to allow members to understand how stewardship, prudence, sustainability, proportionality and affordability will be secured, taking into account any legislative requirements on reporting. 1.7 The Capital Strategy incorporates an approach to affordability based on an expenditure cap. This approach requires an iterative approach to capital planning, identifying the Item 11. Page 135
Page 136
DRAFT APPENDIX 1 expenditure required by the various drivers for capital expenditure then modifying planned expenditure to keep within the expenditure cap. In this respect the approach is similar to that adopted for revenue planning: a balanced budget is identified with estimated income limiting spending which is then planned and monitored to ensure it stays within that balanced budget. 2. CAPITAL EXPENDITURE 2.1 Capital expenditure is expenditure to acquire, improve, upgrade or extend the life of an asset, such as land and buildings, roads infrastructure, vehicles and equipment. The Council sets de minimis levels below which expenditure will not be accounted for as capital. The current levels are: Land and buildings, council houses, surplus assets (valued at current value) - £20,000 Infrastructure, vehicles, equipment, community assets (valued at historic cost) - £6,000 2.2 Much capital expenditure requires a lead-in time to ensure that relevant legal conditions are met, e.g. planning permission is in place; for project design, and for procurement. Capital expenditure therefore requires a longer planning timeframe than revenue expenditure. The Council therefore prepares and annually updates an indicative ten year capital programme to facilitate future planning. 2.3 Due to the short-term nature of Council funding settlements from Scottish Government, only the first year of the plan has been submitted to the Council for approval. In order to facilitate application of the cap whilst retaining the ability to commit to projects which will extend over more than one year a three year programme will be submitted for approval in 2025. The full ten year plan is approved as indicative of the Council’s intentions and allows the affordability of capital plans over a longer timeframe to be assessed. 2.4 Currently all of the Council’s planned capital expenditure is operational; none is for commercial or purely income generating purposes. 3. CAPITAL INVESTMENT OBJECTIVES 3.1 The Council’s objectives in investing in capital are to ensure an adequate suite of assets to deliver the Council’s services, in accordance with the Council’s policies, strategies and plans, and priorities; legislative duties and other requirements, including affordability. The Council’s Short to Medium Term Financial Strategy, the latest version of which was approved by Council on 26 June 2024, recognises the Council’s asset base as a key financial lever and the pressing need to review the use of the Council’s assets to generate savings. The Council’s Medium to Long Term Financial Strategy, approved by Council on 25 October 2023 with a revised version being reported on 4 December 2024 highlights the extent to which the Council’s forecast budget shortfall is created by the cost of maintaining the Council’s current asset base. Projected capital costs are very strongly influenced by the current condition of corporate assets, with the Page 136
Page 137
DRAFT APPENDIX 1 condition of the Learning Estate in particular having been consistently benchmarked as one of the poorest in Scotland for many years. 3.2 A key consideration in developing the capital plan is the requirement to provide new infrastructure and facilities to accommodate planned local developments. 3.3 The Capital Plan reflects the requirements identified in the Local Development Plan for Moray for infrastructure projects required to support growth including transport, schools, health services and where necessary sports and community facilities. These requirements are established through the strategic planning of relevant departments such as Transport and Education Resources but also include Community Planning Partners and the evidence base on housing and employment land demand and forecasted delivery. This evidence base allows for the long term planning of Capital expenditure to support economic growth and also for the Developer Obligations requirements to ensure that the development pays for the infrastructure burden it creates. 3.4 The process relies upon robust strategic planning of major infrastructure provision relating to Learning Estate, Transport, Health and Sports and Community facilities. Where this evidence base does not exist or is not robust it will be difficult to obtain developer obligations. The Council also needs to demonstrate its commitment to deliver the infrastructure required to support the economic growth within the Local Development Plan through its Capital Planning process. 3.5 The Community Planning Partnership’s priorities (Our People, Our Place, Our Future) are encompassed in the Moray 2027 Local Outcomes Improvement Plan (LOIP). The Council has adopted the following priorities in its Corporate Plan, which was approved on 28 February 2024: Tackle poverty and inequality Build a stronger, greener, vibrant economy Build thriving, resilient, empowered communities 3.6 The General Services Capital Plan includes investment in the local economy, principally through Moray Growth Deal and investment in the Council’s industrial portfolio. There is provision for investment under the heading of Climate change, and zero carbon aims are gradually being mainstreamed into ongoing programmes of work, such as the fleet replacement programme and planned work on corporate buildings and the Learning Estate. 3.7 A key outcome of the Local Housing Strategy is to ensure there is an adequate supply of affordable housing in a good quality condition. This is reflected in the Housing Revenue Account (HRA) Capital Plan. The originally planned new build programme has been scaled back following reduction in Scottish Government grant funding. 3.8 Council on 10 March 2021 agreed the Climate Change Strategy 2020-2030 (Para 13 Minute refers). The strategy supports the aims of the Council’s Corporate Plan 2024- 2027 to build a greener economy by creating a more resilient and sustainable future. As a complementary document the Council on 6 April 2022 approved a Route Map to Net Zero, setting out a series of actions within a carbon management hierarchy, which Page 137
Page 138
DRAFT APPENDIX 1 prioritises the avoidance of carbon emissions. Economic Development and Infrastructure Services Committee on 30 April 2024 approved the Zero Emission Feet Strategy. 3.9 Although many of the actions will not require capital investment, many do and in particular the Climate Change Strategy recognised that significant investment will be required to ensure that all corporate buildings (including the Learning Estate) meet the net zero carbon target. Further significant investment will be required to replace the Council’s fossil fuelled fleet and current technology coupled with local capacity and prohibitive cost does not allow for heavier vehicles to be replaced with zero emission alternatives. Future Capital Plans will incorporate Climate Change Strategy and Route Map to Net Zero implications as these are mainstreamed into asset management planning as has been done for fleet. 3.10 The balance of the Council’s Capital Plan arises from the need to invest in the Council’s current asset base, either to bring it to the approved standard or to maintain it at the Council’s approved standard for the asset type. The Council recognises that the asset management requirements of the current asset base are such that the asset base is unaffordable and that the Capital Plan must reflect the need to manage down the required level of capital investment in part by reducing the asset base. The Smarter Working Project has been instrumental in allowing the Council to start to reduce its corporate office base and the Depot and Stores review has also commenced the rationalisation process. 4. ASSET MANAGEMENT 4.1 The Council’s Asset Objectives were approved by the Policy and Resources Committee on 11 October 2011: To ensure that our assets are fit for purpose in terms of condition, sufficiency, suitability, and accessibility. To ensure that our asset use demonstrates Best Value in terms of running costs and environmental impacts. To ensure that our Asset Management processes reflect good practice. To ensure that our assets reflect the policies and priorities of the Council. 4.2 The Council adopted the following standards for the asset classes within the Capital Plan on 11 February 2014, which were reviewed during 2021 by the Asset Management Working Group to ensure that they remain relevant: Asset Type Recommended Standard Learning Estate B condition B suitability Offices, Depots etc Of a standard that supports the efficient delivery of services Leisure Centres and Community Centres B condition B suitability Children’s Play Areas To meet safety standards Page 138
Page 139
DRAFT APPENDIX 1 Asset Type Recommended Standard Day Centres and Resource Centres B condition B suitability ICT Schools 5 Year Replacement Offices etc 7 Year Replacement Plant and Vehicles Replacement based on cost effectiveness – assessment of replace or repair Industrial Estates B condition B suitability Waste Management Of a standard that supports the efficient delivery of services Roads Bridges Street Lighting Aim to be at the midpoint of the table for road conditions in Scotland. Harbours B condition B suitability 4.3 At the same meeting the Council adopted the following policy in relation to the preparation of the Capital Plan: “The Council recognises the importance of the principles underpinning the CIPFA Prudential Code in relation to capital expenditure, in particular, affordability and sustainability of its investment plans. The Council’s policy in relation to Capital Planning is: a) To maintain all buildings at a satisfactory level of condition and suitability for the provision of council services; b) To maintain the road infrastructure with regard to the safety of all road users and aim to be at the mid-point of the table for carriageway conditions in Scotland; c) To maintain all short-life assets (less than 10 years) required for the provision of council services at the optimum level to minimise the annual cost to the council; d) To provide investment funding to support economic development plans; and e) To identify assets for disposal. In relation to the council’s housing stock the same principles are applied in the Housing Business Plan. The Council is also required to meet the Scottish Housing Quality Standard.” It is implicit in the requirements for both affordability and sustainability that the Council’s asset base is of a size that it can afford to maintain to a suitable standard. Following the adoption of a cap on capital expenditure the policy in relation to capital planning will be reviewed in the context of the Corporate Asset Management Plan. 4.4 A 30 year Business Plan for the HRA is regularly updated to ensure that housing stock can be brought up to and maintained at the Scottish Housing Quality Standard (SHQS) and can achieve the second Energy Efficiency Standard for Social Housing (EESSH2) set in June 2019, for social rented houses to meet by 2032. This has a target that all Page 139
Page 140
DRAFT APPENDIX 1 social housing meets, or can be treated as meeting, EPC Band B, or is as energy efficient as practically possible by the end of December 2032 and within the limits of cost, technology and necessary consent. . 4.5 To ensure that the General Services Capital Plan is affordable and sustainable, the draft Capital Plan is reviewed in the context of the Council’s financial planning processes for the General Fund. 4.6 Good quality asset management information is vital to enable planning for capital expenditure. Where the expenditure required to maintain the Council’s asset base at approved levels is unaffordable, the Council must take steps to address this. This could be by increasing income to cover costs or by decreasing the asset base or approved asset standard. In its Financial Strategies (both short term and medium to long term) the Council recognises its asset base as a key financial lever. The Council has approved a capping mechanism for capital expenditure, to ensure that expenditure on servicing debt remains below 10% of income generated (government grant, Non Domestic Rates Income and Council Tax). To achieve this and continue to meet the objectives of capital spend requires that the Council’s asset base is reduced. 5. CAPITAL FINANCING 5.1 A number of sources of funding are available to the Council to finance its capital expenditure: General and specific capital grants from Scottish and UK Governments and other bodies Contributions from the Council’s revenue budgets Capital receipts from the disposal of surplus Council assets Developer contributions Borrowing, in the long term predominantly from the Public Works Loan Board (PWLB), although in recent years the Council has taken advantage of relatively cheap rates from other local authorities 5.2 The Council is awarded General Capital Grant from the Scottish Government and this is used to fund capital expenditure before the use of any other capital receipts. The HRA makes extensive use of contributions from its revenue budget, but the General Services Capital Plan does not budget for contributions from revenue. The amount of capital expenditure which cannot be met from grant or other receipts will be funded by borrowing. 5.3 When setting the amount which it is willing to borrow, the Council must comply with the Prudential Code. The two main criteria for compliance with the code are that the Council can demonstrate that the borrowing decision is affordable, sustainable, and prudent. Accordingly the Council approves Prudential Indicators, prescribed by the Code, when the budget is set. 5.4 The capital plan impacts on the revenue budget in two ways: the impact of increased loan charges required by additional borrowing required to finance capital expenditure and the revenue (running) costs of new facilities, or revenue savings achieved through Page 140
Page 141
DRAFT APPENDIX 1 spend-to-save projects. In the case of the Moray Growth Deal, because of the timing difference between spend and grant profile the Council will be spending in advance of funding to varying degrees and borrowing to cover that spend. This will incur additional loan charges for Moray Growth Deal and the Council earmarked £4 million of reserves to fund this expenditure. As the grant is received this will reduce the need to borrow in future, allowing the replenishment of reserves if this is considered prudent. As projects enter delivery their financial spend profile is finalised and used in agreeing the planned grant profile with Scottish Government for the year ahead. This will allow creation of a revised financial profile at programme level in 2025/26. 5.5 Loan charges represent the cost of interest on loans and also of principal repayments of loans used to fund capital expenditure. The Council has developed a local prudential indicator based on General Services loan charges as a percentage of the total General Services revenue budget. This indicator is to act as a guideline to assist with the Council budget setting process and to highlight the overall impact of capital expenditure to the Council’s annual budgeted revenue costs. As part of the financial planning process each year the budgeted cost of borrowing will be approved based on an approved level of borrowing for the year ahead and indicatively for the next nine years. Borrowing will be capped to a level deemed to be affordable at projected rates of interest. This will be measured across the length of the ten year indicative plan, to act as an early warning of future affordability and a cap approved for the first three years of the plan – a three year period will be used to facilitate the planning for lead-in time and preparatory work needed for capital projects. . 5.6 The period of time over which loans repayments are made into the loans pool is matched to the expected life of the asset. These can vary from three to sixty years. 5.7 Proposals for expenditure from the General Fund on asset maintenance are scrutinised to ensure that all costs which could potentially be capitalised are funded through the capital programme as in the short term this is the most economically advantageous way for the Council to fund replacement of failed elements or life-expired assets. 5.8 If appropriate specific grant funding is available it may be applied for to reduce the amount of borrowing required or to increase the level of expenditure possible within the Council’s agreed borrowing limit. 5.9 The Council entered into Public Private Partnership (PPP)/ Private Finance Initiatives (PFI) contracts in when Scottish Government was promoting these vehicles for learning estate improvement. Under such arrangements, the Council enters into a long-term contract with a private sector organisation to construct new assets. Annual payments are then made over the life of the contract for the assets provided. The Council has used such arrangements to facilitate the building of new schools in Keith and Elgin. Such arrangements can mean capital investment where, due to financial constraints, it might not have been possible otherwise. All the Council’s PPP/PFI arrangements have been supported by funding from Scottish Government. 5.10 The Scottish Government has moved away from supporting new PPP/PFI contracts to the LEIP funding model for school construction projects. Under this arrangement the Council will be fully responsible for the costs of construction of new schools or refurbishment of current schools from either existing capital budgets, or by borrowing Page 141
Page 142
DRAFT APPENDIX 1 through the PWLB. The LEIP outcome Based Funding Model has a number of key outcome requirements and Scottish Government revenue funding will be released on evidence of the achievement of these agreed outcomes. These key requirements are: Building Condition Energy Efficiency Digital Enabled Learning Carbon 6. TREASURY MANAGEMENT 6.1 Treasury management is concerned with keeping sufficient but not excessive cash available to meet the Council’s spending needs, while managing the risks involved. Surplus cash is invested until required, while a shortage of cash will be met by borrowing, to avoid excessive credit balances or overdrafts in the bank current account. The Council is typically cash rich in the short-term as revenue income is received before it is spent, but cash poor in the long-term as capital expenditure is incurred before being financed. 6.2 The Council’s main objectives when borrowing are to achieve a low but certain cost of finance while retaining flexibility should plans change in future. These objectives are often conflicting, and the Council therefore seeks to strike a balance between cheaper short-term loans and long-term fixed rate loans where the future cost is known but higher. Statutory guidance from the Prudential Code is that debt should remain below the capital financing requirement, except in the short-term. 6.3 Under the Prudential Code, the Council is legally obliged to set an affordable borrowing limit (also termed the authorised limit for external debt) each year, and a lower “operational boundary” is also set as a warning level should debt approach the limit. 6.4 Treasury investments arise from receiving cash before it is paid out again. Any investment made for service reasons or for pure financial gain would not generally be considered to be part of treasury management. The Council’s policy on treasury investments is to prioritise security and liquidity over yield, focussing on minimising risk rather than maximising returns. Cash that is likely to be spent in the near term is invested securely to minimise the risk of loss. Both near and longer-term investments may be held in pooled funds, where an external fund manager makes decisions on which particular investments to buy and the Council may request its money back at short notice. 7. GOVERNANCE 7.1 The development, control, management and delivery of capital investment programmes is of key concern to the Council to ensure that public money is used wisely, best value is secured and the responsibility for decisions is clearly understood and taken at the right level. In managing the aspirations for capital expenditure from Council Services, it is inevitable that demands for capital resources to meet capital investment needs and ambitions will exceed the resources available to the Council. Page 142
Page 143
DRAFT APPENDIX 1 7.2 As a consequence of this the Asset Management Working Group is tasked with corporate responsibility for asset management. It has the responsibility of ensuring systems are in place to develop and update asset management plans (AMPs) to identify the maintenance and replacement requirements to deliver the Council’s policy for assets and agreed position in relation to standards of condition and suitability, moderated by an assessment of affordability through the capital planning process. 7.3 The Asset Management Working Group aims to ensure that AMPs are robust and that tools such as options appraisal are used as appropriate. The assumptions behind AMPs are challenged periodically by the Group. In parallel to this process a number of projects in the Transformation Strategy are reviewing the requirements for the Council’s asset base – Smarter Working, Depot and Stores review, Learning Estate review, libraries review, leisure review, industrial estates review - and these will all feed into the asset management planning process. 7.4 The group is also responsible for developing the Council’s draft capital plan each year. A ten-year plan is prepared in draft and updated annually. The group uses a process of peer review to ensure that appropriate rigour can be demonstrated in preparing the draft ten year Capital Plan and that revenue consequences of capital expenditure are recognised in the financial planning process, including whole life costing in relation to maintenance requirements. All new proposals for capital expenditure are taken through the Council’s corporate Gateway process, from mandate to post-project review, as appropriate for the complexity of project and level of spend. In 2023, the group trialled a matrix for prioritising and ranking capital projects, taking into account Council priorities and other salient factors. In the light of experience this has been modified for use in the capping process and relevant factors approved as part of that process: Council priorities, legislative requirements, connectivity, community priorities. 7.5 Spend-to-save is a feature of the Council’s financial strategy. There is a presumption that a spend-to-save proposal with a suitable business case will be approved. However, such proposals will always be reviewed to ensure that they fit within the Council’s priorities and as an indicative guide the payback period of a spend-to-save project should be three years or less. The factors to be taken into account when assessing a spend-to-save proposal are: Size of investment required; Payback period; Risk assessment of achieving payback; Impact on service. 7.6 The Council’s Planning and Development service provide the Group with information on the infrastructure required to support new housing development – schools, roads, leisure and health facilities – and expenditure and developer contributions are factored into the Capital Plan. 7.7 To ensure that no capital project is considered on its own merits alone, but that all proposals for capital expenditure are considered in the context of the Council’s overall plans for capital expenditure, no individual request for capital projects is considered outwith the agreed cycle of approval when the revenue budget is set (February/March); Page 143
Page 144
DRAFT APPENDIX 1 reviewed when capital carry forwards from the previous year are considered (generally June); and when estimated actuals for the year are first reported (November). The exception to this general rule is spend-to-save projects, and only then if a good case can be made for why these should be considered outwith the normal planning cycle. Exception is also made for emergencies, but there is a general presumption that planned works will be delayed to minimise additional spend. 7.8 Governance arrangements for the council’s HRA capital plan are separate and recognise the ring-fenced nature of any HRA spend. The HRA Business Plan models scenarios for additional investment in further new build development which has been set against a range of risk factors, rent affordability and debt affordability levels to ensure borrowing levels are prudent, affordable and sustainable. 8. RISK AND RISK MANAGEMENT 8.1 The Council is exposed to risk in various ways through its programmes of capital expenditure. There are risks associated with various funding streams, different types of procurement, and predictability and controllability of spend. These are managed by individual project managers and corporately by the monitoring regimes for both General Services and HRA capital, which include Transformation Boards for strategic projects. The asset management led components of the programmes themselves are risk- mitigators against the risk of failure of the Council’s assets. 8.2 There are different types of risk associated with different methods of financing capital projects. Public-private partnerships seek to transfer risk to the private sector. Investors will typically expect higher returns for higher risk projects, so there is usually a financial trade-off when risk is transferred. General Capital Grant funding comes at no risk to the Council. The terms and conditions of the grant are well understood and the risk of having to repay grant because it had been misapplied are minimal. However, specific grants vary greatly in their terms and conditions. There is a much higher risk that some specific grants may have to be repaid. The terms and conditions are typically much more stringent and there are significant specific grants now available from both Scottish and UK governments, many with stringent monitoring regimes. 8.3 The Council generates capital receipts from the sale of surplus assets. As a general rule, capital receipts can only be applied to capital expenditure. Whilst no risk attaches to the use of capital receipts, there would be a risk in budgeting for significant funding from capital receipts that they would not meet the target either in terms of amount or timing. 8.4 Properties which no longer contribute to the delivery of the Council’s services or objectives are deemed surplus. The Council has procedures in place to ensure that surplus and/or under-used property is identified and reviewed prior to being offered for disposal, with the approval of the Asset Management Working Group as an early stage in that process. 8.5 The Council also receives developer obligations towards the cost of development of infrastructure or other requirements arising from developments. They are time-limited and the main risk from these is that they are used timeously. The amounts received Page 144
Page 145
DRAFT APPENDIX 1 might also be insufficient to fund the expenditure required. Developer obligations from major developments will typically be received over a long time scale, whereas the Council may have to invest up front to provide infrastructure. The Council bears the cost associated with the time-lag in funding; the risk that future contributions may not materialise, and the risk that relevant Council policy might change over time. 8.6 The Council manages the risks of borrowing through its Treasury Management strategy. The residual risk to the Council is that borrowing can carry very long term commitments and so capital expenditure in any one year can have revenue implications thirty or forty years into the future. 8.7 The Council can develop its asset base in conjunction with other public sector partners. The risks involved in that relate largely to the governance of the project, and to the possibilities of one partner rescinding on their agreement. These risks must be addressed at the inception of the project. 8.8 There are risks involved in developing assets through innovative funding models; such risks are likely to be largely outwith the Council’s control. 8.9 Inflation can pose a risk to the Council. Construction Industry inflation can be highly volatile. Projects are included in the Capital Plan at current prices. Depending on how far in advance these have been scheduled, costs may be significantly above the original estimate simply because of inflation in the intervening period. This is a risk to the affordability of the Capital Plan. 8.10 The cost to the Council of borrowing is calculated based on interest rates at that time. The interest rates rose within the previous 12 month period and it is considered likely that higher interest rates than seen in the recent past will continue. That is a risk to the affordability of the Capital Plan and will be taken into account when looking at future capital proposals. 8.11 A significant risk arises from the Council’s revenue budget for repairs and maintenance. If the budget for revenue maintenance is insufficient and results in deterioration of assets there may be a resulting requirement for capital expenditure to replace or renew the asset. If revenue budgets are reduced without a corresponding reduction in the asset base then the Capital plan will come under pressure. A related risk is the risk that a health and safety issue might arise, contravening the Council’s legislative responsibility to the public and to Council employees. 8.12 The other main risks concerning the Capital Plan relate to project management and the many factors which impinge upon the delivery of the Capital Plan. These factors may be internal – such as staff shortages or competing priorities – but are frequently external, ranging across supplier delivery time, landowner disputes/compensation requests, unforeseen site conditions, contractor delays, weather conditions and many others. Project specific risks are identified in the capital monitoring reports to committee and, where appropriate, project boards. Page 145
Page 146
DRAFT APPENDIX 1 9. KNOWLEDGE AND SKILLS 9.1 The Council employs professionally qualified and experienced staff in senior positions with responsibility for making recommendations on capital expenditure and borrowing and investment decisions. The Council also makes use of external advisors and consultants which are specialists in their field. Specialist advisors are generally specific to major capital projects and employed as required. This approach is more cost effective than employing specialist staff directly and ensures that the Council has access to knowledge and skills commensurate with its risk appetite. In addition, the Council also employs treasury management advisors, currently Arlingclose Ltd. Page 146
Page 147
DRAFT APPENDIX 1 10. LINKS WITH OTHER PLANS AND PROCESSES Community Planning Partnership Local Outcome Improvement Plan (LOIP) Asset Management Plans •Housing •ICT •Roads •Harbours •Fleet •Open Spaces •Learning Estate •Management Plans •Property Asset Strategy •Corporate Plan including Short to Medium and Medium to Long term Financial Plans •Treasury Strategy •Corporate Asset Management Plan •Local Development Plan •Departmental Service Plans Capital Strategy Capital Plan NHS Grampian Moray Integrated Joint Board MIJB Page 147
Page 148
Page 148
Page 149
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: CORPORATE ASSET MANAGEMENT PLAN BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To provide the Council with a report of progress made against the Corporate Asset Management Plan for 2024/25 and with a revised Corporate Asset Management Plan reflecting the cap on capital expenditure. 1.2 This report is submitted to Council in terms of Section III (B) (28) of the Council’s Scheme of Administration relating to the formulation, implementation and review of asset management policies and practices, and to the maintenance of an overview of the Council’s property disposal programme. 2. RECOMMENDATION 2.1 It is recommended that the Council: (i) considers and notes the work done to date to meet the targets set in the Corporate Asset Management Plan for 2024/25 as set out in paragraphs 4.1 to 4.6; (ii) notes that an updated Corporate Asset Management Plan fulfils one of the actions in the Best Value Action Plan; and (iii) approves the amended Corporate Asset Management Plan for 2024/25 as set out in APPENDIX 2. 3. BACKGROUND 3.1 The Policy and Resources Committee approved the Council’s first Corporate Asset Management Plan (CAMP) on 23 September 2008 (paragraph 6 of the minute refers). The CAMP is updated annually and the updated CAMP for 2023/24 was approved by Corporate Committee on 13 June 2023 (paragraph 8 of the minute refers). The update to the CAMP for 2024/25 was delayed due to the review of the capital planning progress and this updated follows the approval of the capital expenditure cap mechanism at a special meeting of Council on 22 October 2024 (paragraph 9 of the Minute refers). Reporting an Item 12. Page 149
Page 150
updated CAMP as part of the review of capital is an action in the Best Value Action Pan. 3.2 A schematic representation of the asset management planning process is included as APPENDIX 1. This representation has always accompanied the CAMP and Council should note the iterative nature of asset management planning, taking financial affordability into account. This is brought into greater focus with the application of a cap on capital expenditure. 3.3 Asset Management Planning is recognised as one of the main drivers for the Capital Plan. The lead-in time for capital projects can be up to 24 months, allowing for design work, planning permission if required and depending on the procurement route appropriate to the project. Consequently the Council prepares ten year capital plans as part of the planning process for future years. This also facilitates assurance of financial sustainability by forecasting future investment needs of the current asset base of the Council. 4. REPORT ON PROGRESS UNDER THE CORPORATE ASSET MANAGEMENT PLAN 2023/24 4.1 There were eight key tasks identified for 2023/24 and these are discussed below. 4.2 Improve and automate capital monitoring information provided to budget managers to facilitate better management of the capital plan. A project plan has been developed for this task and the feasibility of using current budget monitoring tools is being investigated through the Finance Development working group. 4.3 Continue work on prioritisation of the capital plan for including in the budget process. A prioritisation tool which had been developed for use in prioritising small service developments was trialled through 2023. The Asset Management Working Group concluded that the tool, although complex, worked reasonably well for individual projects but was not a suitable tool for prioritising programmes of work. Further review as part of the cap mechanism led to the recommendation of a simpler prioritisation method, using the following criteria – contributes towards achieving a corporate priority in the Corporate Plan; fulfils a legislative requirement; impact on connectivity between communities and facilities; community priority – and these were approved by Council on 22 October 2024. 4.4 Update the Asset Management Planning Process to incorporate the requirements of the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020. This requires local authorities to report how they will align their spending plans and use of resources to contribute to reducing emissions and delivering their emissions reduction target. The Council has approved a vehicle replacement policy, incorporating targets for electric vehicles. A programme of energy efficiency measures is included in the Transformation Strategy. Carbon budgeting comparisons with financial impacts are included in the decision-making process for property improvements. Climate change implications feature in Page 150
Page 151
procurement weightings and the recent photocopier procurement process used this. 4.5 Progress with the development of the Learning Estate Strategy – this is on- going and is reported to Education, Children’s and Leisure Service Committee and is a strand within the Transformation Strategy. 4.6 Progress with the Smarter Working Project with a view to increasing occupancy in the HQ campus – Stage one of this project is complete and Stage 2 has commenced with closure of offices in Elgin and Buckie to date. This is also part of the Transformation Strategy and is the main vehicle through which the Council will achieve its aim of reducing its asset base for corporate buildings. 4.7 Continue to develop the outline business case (OBC) for the rationalisation of depots and stores taking into account the need to decarbonise the Council’s property and fleet assets in line with the Council’s climate change objectives. This is linked with the task described in paragraph 4.4. The OBC has been developed and work is in hand to develop the Full Business Case. This is another piece of work which will see the reduction of the Council’s asset base for corporate buildings, and a number of early closures have successfully been achieved. This too is a strand in the Transformation Strategy. 4.8 Continue to develop a selection process for post project reviews. This task has stalled, with the emphasis having been on financial sustainability. 4.9 Review the status of Asset Management Plans and develop a programme of updates. A full review has been largely superseded by other work – Smarter Working, the depot and stores review, the Learning Estate Strategy, the Libraries Review, the Leisure Review – all of which will have implications for asset management plans. 5. CORPORATE ASSET MANAGEMENT PLAN 2023/24 5.1 The Corporate Asset Management Plan (CAMP) for 2024/25 continues with the actions included in the 2023/24 CAMP, moot of which are significant pieces of work which will continue into 2025/26. 5.2 The full CAMP can be found at APPENDIX 2. 6. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Asset management planning assists the Council to deliver Council and community planning priorities whilst achieving Best Value. (b) Policy and Legal There are no policy or legal implications arising directly from this report. Page 151
Page 152
(c) Financial implications There are no financial implications arising directly from this report. Asset management planning feeds into the Council’s financial planning process and forms a key part of the strategy for reducing budget pressures and of the Council’s Transformation Strategy. (d) Risk Implications There are no risks to the Council arising directly from this report. Asset management planning reduces the risk to the Council of unexpected issues arising relating to the Council’s assets. (e) Staffing Implications There are no staffing implications arising directly from this report. All recommended actions are planned to be carried out within current staffing resources. (f) Property There are no property implications arising directly from this report. (g) Equalities/Socio Economic Impact There are no equalities issues arising directly from this report. (h) Climate Change and Biodiversity Impacts The mandatory annual reporting under the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020 means that the annual compliance reports must now include details of how Moray Council will align its spending plans and use of resources to contribute to reducing emissions and delivering national and regional emissions reduction targets. This means the asset management plan should align with the Climate Change Strategy and the Route Map to Net Zero. (i) Consultations Members of the Corporate Management Team and of the Asset Management Working Group have been consulted in the preparation of this report. 7. CONCLUSION 7.1 Progress has been made on 6 of the 8 actions identified in the CAMP for 2023/24. 7.2 The action to develop a prioritisation process for the capital plan is complete and will be reviewed for success or problems once used. 7.3 All other actions are carried forward into the CAMP for 2024/25. 7.4 Reporting an updated CAMP completes one of the actions contained in the Best Value Action Plan. Page 152
Page 153
Author of Report: Lorraine Paisey, Chief Financial Officer Background Papers: Ref: SPMAN-1293228629-1180 Page 153
Page 154
Page 154
Page 155
Dwelling houses School Estate Corporate Offices Other operational builidings Industrial Estates Roads Harbours Flood Alleviation Schemes Fleet ICT Draft AMP Draft SEMP Draft Offices AMP Draft ops building AMP Draft IE AMP - annual report Draft roads AMP Draft AMP FAS AMP Draft vehicles AMP Draft ICT AMP C A P I T A L P L A N Housing Investment Plan Final AMP SEMP Offices AMP Ops building AMP IE AMP (annual report) Roads AMP Harbours AMP FAS AMP Vehicles AMP ICT AMP A S S E T M A N A G E M E N T P L A N N I N G Land and buildings Infrastructure Members set policy for asset class Members set priorities across asset classes to achieve corporate priorities Review overall affordability C A P I T A L S T R A T E G Y APPENDIX 1 Vehicles, Plant & Equipment Gather information Technical review and recommendation Affordability Planning Composite Capital Plan / Revenue Repairs & Maintenance / Other General Services Revenue Costs Item 12. Page 155
Page 156
Page 156
Page 157
APPENDIX 2 CORPORATE ASSET MANAGEMENT PLAN 2024/25 1. INTRODUCTION 1.1 The Council’s Corporate Asset Management Plan (CAMP) describes the arrangements which the Moray Council has made for asset management planning; links the asset management planning process to other key concerns of the Council; highlights progress in the preparation of asset management plans for the six main categories of asset, and includes an action plan for the coming year. 1.2 The CAMP also seeks to make explicit the links which exist between the asset management planning process and the financial planning process, particularly capital planning, and this is addressed throughout the CAMP. 1.3 The CAMP has been prepared according to the guidelines set out in the CIPFA Guide to Asset Management and Capital Planning (“the CIPFA Guide”). 2. BACKGROUND 2.1 The Asset Management Working Group (AMWG) was established to develop and oversee overall asset management arrangements within Moray Council. A key task for the group is to assist in the development of proposals for capital expenditure based on asset management principles. These proposals are then fed into the Council’s financial planning process. They aim to establish appropriate expenditure plans for the medium term. Indicative ten year plans are prepared, reflecting approved asset standards and asset conditions at the time the plan is prepared, and reported to Council when the Council Tax is set to facilitate longer term planning. The current indicative ten year plan was approved on 24 January 2024, along with the capital plan for 2024/25. The 2024/25 plan continues to reflect increased costs of construction. . The increased interest rates are also putting pressure on spending plans. 2.2 The AMWG is also responsible for developing the corporate asset management framework and for overseeing progress on the development of individual asset management plans. Progress on the development of asset management planning is generally reported to the Corporate Committee, which approves the CAMP on an annual basis. 2.3 The key drivers for asset management planning are listed below: Driver Item 12. Page 157
Page 158
Driver Condition This requires to be measured for each class of asset, and each asset within that class graded. The Council sets targets for condition for each asset class. Suitability This assesses whether or not an asset is fit for purpose. Sufficiency This is about asset capacity rather than asset use and reflects demand for the asset. Revenue Costs The costs of operating the asset. Accessibility Both physical accessibility – e.g. with the duty to make reasonable adjustments under the Equalities Act 2010 – and whether specialist knowledge is required to operate the asset, potentially restricting its use. Value This could be the book value of the asset, the market value or replacement value. 2.4 Asset management planning is closely linked to capital planning, and has come of age in local government under the Prudential Code. Long-term affordability is therefore a major concern for asset management planning. The recognised six drivers listed above all impact on affordability. The CAMP places this under the umbrella of sustainability and this will be discussed from three aspects – financial sustainability, environmental sustainability and economic sustainability – in section 3. 2.5 As well as affordability, the asset management process aims to achieve efficiency in terms of use of assets, and maximisation of value in terms of asset disposal. These twin aims imply a reduction in the Council’s asset base to reduce the cost of holding more assets than strictly required to deliver the Council’s aims and this coheres with a recommendation in the Annual Audit Report from the Council’s auditors and is included in the Best Value Action Plan 2.6 The CIPFA Guide identifies the six main categories of asset for asset management planning as property, open space, roads and associated structures, housing, fleet and ICT. Asset Management Plans should be based on robust data about the number of assets in each category; their condition; suitability for use; sufficiency for use, and revenue cost of use. They should set targets for performance; relate to service plans for future delivery of service; identify investment needs; support the Local Outcome Improvement Plan, Corporate Plan or other Council policy priorities. 2.7 In order to better reflect local priorities and operational needs two of these main categories have been subdivided. Property is subdivided into the school estate, industrial estates and offices and other properties with the later groups managed as the Council’s corporate properties; Roads etc. is subdivided into Page 158
Page 159
roads and directly associated infrastructure; harbours; flood alleviation schemes. 2.8 Assessment of current progress on preparation of asset management plans for each asset type is summarised in section 4. 2.9 The Action Plan for 2024/25 forms section 5 of the CAMP. 3. SUSTAINABILITY Financial Sustainability 3.1 For the Council to be able to assess the sustainability of its asset base, it must have good quality information on the condition of its assets and use this to estimate the cost to the Council of maintaining each asset over its expected life. 3.2 The Council’s Capital Strategy sets out the principles underlying the Capital Planning process and in doing so describes how Asset Management Planning and Capital Planning inter-relate. The latest version of the Capital Strategy was approved by Council on 24 January 2024 (paragraph 10 of the Minute refers). 3.3 The Council requires to reduce expenditure to an affordable and sustainable level. An important part of this process will be to reduce the Council’s asset base and to agree on an affordable level of capital expenditure using the Council’s internal Performance Indicator (PI) for affordability: the percentage of general revenue funding (grant funding, Non Domestic Rates income and Council Tax) spent on servicing debt should be less than 10% 3.4 The ten-year plan when first developed was based on the work required to meet the Council’s approved standards for all asset groups. The plan presented to the Council on 24 January 2024 also reflected the requirement to provide new or improved infrastructure and facilities to accommodate planned local developments, along with expenditure arising from Asset Management Plans (AMPs). Accordingly, the Capital Plan is framed by drivers for expenditure that: recognise the Local Development Plan and other Council plans (specifically for Economic Development); Asset Management Planning; service efficiencies, particularly spend-to-save initiatives; expenditure arising from Legislative Requirements; Funded Government Priorities and Responsive Expenditure. The Plan is divided into ongoing programmes of work, named projects, fully funded projects and spend-to-save. 3.5 When the initial draft Plan has been scoped out, affordability will be assessed over the life of the Plan, using the agreed PI. This is a more rigorous test of affordability than the required Prudential Indicators as it takes a longer-term view of affordability and so acts as an early warning. Any required cap on capital expenditure will be applied pro rata to programmes and the totality of named projects. Named projects will be prioritised and ranked, with projects included in the final draft Plan up to the total capped ceiling of expenditure, as Page 159
Page 160
approved by Council on 22 October 2024, when the methodology of applying a cap to the capital plan was agreed. Environmental Sustainability 3.6 The Council’s first Climate Change Strategy and Action Plan was approved on 10 March 2021 (paragraph 13 of the Minute refers). At a meeting of the Council on 6 April 2022 a Route Map to Net Zero (RMNZ) Carbon Emissions was approved. Revised versions of the Strategy and Route map were reported to Council on 4 December 2024. 3.7 The Council has invested in energy efficiency projects and in prior years has benefited from the Scottish Government. The Council is investigating solar energy projects to progress as spend to save energy proposals with possible funding through SALIX Loans. An annual report on the Council’s Energy Strategy is made to the Economic Development and Infrastructure Service Committee, with the latest report being to that committee on 12 November 2024. 3.8 The Council undertook a project to replace all SON and SOX street lanterns with LED lanterns and this was successfully complete in 2022/23. A project to replace lighting in corporate buildings with LED lighting where this will generate cost savings is included in the Transformation Strategy. 3.9 The Council also funds on-going small scale energy saving projects and an allowance is included in the capital plan each year to fund such projects. 3.10 Environmental considerations will remain an important consideration in the development of individual asset management plans and in developing individual projects. Proposals for capital projects will seek to maximise environmental benefits, balanced with cost to the Council. With respect to the Learning Estate and LEIP funding, this has set an energy efficiency target of 67/kWh per square metre per annum for core facilities use. At a meeting of Economic Development and Infrastructure Services Committee on 7 February 2023 (paragraph 12 of the minute refers) it was agreed that for capital spend on fleet and property the value of carbon should be incorporated into the appraisal of projects. As per guidance from the UK Government Department for Business, Energy & Industry Strategy (BEIS) the social costs of carbon should be monetised and included in appraisal and evaluations to ensure the impacts of carbon are taken into consideration. The Zero Emission Fleet Strategy was approved by Economic Development and Infrastructure Services Committee on 30 April 2024 (paragraph 15 of the Minute refers). 3.11 Each key service area has a responsibility of supporting the Council’s budget strategy through reducing the cost and impact of the use of resources, including water, energy and transport fuel. This has associated carbon reductions that will contribute to the goal of the Council being carbon neutral. Page 160
Page 161
Economic Sustainability 3.12 The Council aims to support a sustainable economy in Moray through various policy initiatives designed to support economic development locally and in particular through the development of the Moray Economic Partnership, Moray Economic Strategy and the Moray Growth Deal. 3.13 For asset management planning, economic sustainability has three strands: ensuring the Council’s asset management planning process supports the economic development process by joined-up planning with partners in the Moray Economic Partnership and Moray Growth Deal; planning asset management which directly supports economic development (such as developing industrial estates or facilitating development at Buckie harbour), and reflecting the requirements of the Local Development Plan. 3.14 Asset disposal can support financial sustainability by maximising capital or other financial receipts. Economic sustainability can also be assisted by facilitating community development and the Council’s Community Asset Transfer process seeks to support local sustainable community ventures. This process continues to be part of the mainstream asset management planning function of the Council. 3.15 The Moray Growth Deal was formally signed by the Council and the both the UK and Scottish Governments on 20 December 2021. The outline business cases (OBC) for the various projects were presented to Government and agreed as a precursor to sign off. The financial spend and funding profile in the full business case for the Digital Health Initiative and OBCs for the other seven projects were incorporated into the Council’s ten year Capital Plan. As Full Business Cases are and signed off the capital plan is updated to reflect the latest planned profile. Any amendments arising from approved change requests will also be reflected in Council’s ten year capital plan. The current plan reflects 2 of the Council-led projects being in delivery. 4. ASSET MANAGEMENT PLANS 4.1 Property 4.1.1 The Learning Estate The Council is reviewing its Learning Estate in a phased process based around Associated School Groups (ASGs) A Learning Estate team was established in May 2021 to deliver the 2020 Moray Learning Estate Strategy. In addition to managing refurbishment and new build projects, the team are focused on developing options for estate rationalisation, engaging with the local community and other stakeholders to deliver a long term sustainable and affordable Learning Estate. At Council on 9 October 2020 (paragraph 4 of the Minute refers) the draft approach on the Learning Estate Strategy was presented. The approach confirmed that B suitability and B condition across Page 161
Page 162
all elements of a school should be a minimum standard. An updated Learning Estate Strategy was agreed at Council on 28 September 2022 (paragraph 12 of the minute refers). The Scottish Government have stipulated minimum standards for schools funded through the Learning Estate Improvement Programme (LEIP). There are four key elements to LEIP. Firstly condition, where a new learning environment is built to a high quality (Condition A) and well maintained (not less than Condition B) over the long-term (25 years). Secondly, new build should be energy efficient and over the long-term contribute to net zero commitments. Thirdly, it should enable digital learning and advancements in technology. Finally, the investment creates new jobs and enables inclusive economic growth. It recognised there needs to be whole life costing and maintenance plans adequately provided for in the Council’s financial planning and recognition that it may take many years to achieve this across the whole school estate. 4.1.2 Offices / Other operational buildings A review of the Council’s office accommodation is progressing as part of the Smarter Working Project following the move to hybrid working as the norm. The project began with the HQ Campus and the general principles are now being rolled out across all Council offices. The outline business case was approved by Full Council on 2 February 2023. Surplus office assets have been identified as part of this process and revenue savings have been and continue to be identified. The outline business case for the rationalisation of depots and stores was approved by the Economic Development and Infrastructure Services Committee on 30 April 2024 (paragraph of the Minute refers) and the full business case is being developed. This will facilitate decarbonisation of the Council’s property and fleet assets in line with the Council’s climate change objectives. These two projects are part of the Council’s Transformation Strategy. 4.1.3 Industrial Estates The annual industrial portfolio report on industrial estates is the vehicle for asset management planning for the Council’s industrial portfolio. The latest report was to the Economic Development and Infrastructure Committee on 3 September 2024. The Industrial Estate portfolio plays an important role in supporting the Corporate Plan aim of facilitating economic growth and diversification of the local economy. A recent development has been the inclusion of a review of disposal on part of the industrial portfolio in the Council’s Transformation Strategy, as part of the process of challenging the Council’s asset base with a view to reducing it where this will generate savings. 4.2 Open Space 4.2.1 The Council does not have an approved all-encompassing asset management plan for open spaces (including park and cemeteries), however specific types of open space – in particular cemeteries – have strategies approved by committee. The Cemetery Strategy was approved by the Economic Page 162
Page 163
Development and Infrastructure Services Committee on 4 December 2018 (paragraph 6 of the Minute refers) and provision of a new cemetery in Elgin is being progressed. 4.2.2 The Council has a rolling programme of replacement of play area equipment Play area upgrades are prioritised and selected from condition scores received annually from an independent play inspection report. This is currently funded by Scottish Government grant. 4.2.3 A programme of infrastructure repairs for parks and cemeteries has been developed and includes road, steps and footpath repairs; and where required refurbishments to walls, gates and fences. 4.2.4 Given the annual value of the capital programme for open space, the development of a full Asset Management Plan is not currently a priority of the service due to other competing demands on the team’s resources but investment continues to be made and prioritised in response to health and safety concerns and as outlined above. 4.3 Roads and other infrastructure 4.3.1 Roads and Associated Infrastructure The first Roads Asset Management Plan (RAMP) was completed in April 2012, following a nationally developed model. The RAMP addressed the specific lifecycle requirements of 5 different asset groups: carriageways, footways (including footpaths and cycle tracks), structures (road bridges, foot bridges and retaining walls), street lighting and street furniture. This was then modified in the preparation of the financial plan for 2014/15 in which a target of reducing the standard of Moray’s roads to the Scottish average over the next ten years was set in order to achieve savings, and this target has since been clarified as being a desired mid-table ranking. The latest RAMP was presented to the Economic Development and Infrastructure Services Committee on 7 February 2023 (paragraph 6 of the Minute refers). It was approved that Officers continue to monitor the Road Condition Indicator (RCI) on an annual basis and subject to the outcome of these, consider undertaking a more detailed analysis that would provide a more up to date long-term prediction on road condition for the future years. In the meantime, work would continue to the current standard, which is mid-table in terms of the highlight RCI score. The latest report on RCI was to Economic Development and Infrastructure Services Committee on 30 April 2024 (paragraph 8 of the Minute refers). 4.4 Harbours 4.4.1 Condition surveys of the harbours have been used to develop a planned programme of work which forms the Asset Management Plan for the harbours. That plan is reviewed annually. The nature of the asset is such that emergency and unplanned works can be required, particularly following Page 163
Page 164
severe weather events, and an agile approach to asset management planning is required. 4.5 Flood Alleviation Schemes 4.5.1 Maintenance of the Council’s seven flood protection schemes is undertaken as and when required. Inspection of these schemes is considered critical and any work identified during these inspections will be prioritised based on risk. 4.5.2 Under the Flood Risk Management (Scotland) Act 2009, the Council must prepare and publish Flood Risk Management Plans for Moray. This is done in partnership with SEPA and neighbouring authorities. The plans set out at a fairly high level actions to address flood risk over a six year cycle. As part of the plan, an annual schedule of Clearance and Repair is published, subject to agreement by members. 4.5.3 Small watercourses, culverts and coastal protection systems as identified on the flood team’s schedule of clearance and repair are prioritised based on risk. 4.5.4 The Council has also approved a Coastal Adaption Plan for managing the coastline within the Moray area (Economic Development and Infrastructure Service Committee on 30 April 2024, paragraph 9 of the Minute refers) 4.6 Housing 4.6.1 The Council’s housing stock requires significant investment to meet the Scottish Housing Quality Standard (SHQS) and Energy Efficiency Standard for Social Housing (EESSH) within appropriate timescales and work has been and continues to be ongoing to achieve this. The Housing Investment Plan approved by Council on 28 February 2024 (paragraph 8 of the minute refers) sets out the areas of spend for next financial year and the following two years in order that the Council can significantly improve the quality of the housing stock in line with legislation, with a particular emphasis on improvement to the poorest energy efficient properties first. 4.6.2 A review of the Housing Business Plan was carried out in 2023 to assess the capacity of the Housing Revenue Account to deliver the housing service’s ongoing investment priorities, and this was refreshed in 2024 following significant increase in interest rates.. 4.6.3 The Council’s Strategic Housing Investment Plan 2023/28 sets out proposals for the delivery of new Council housing over the planned period. The programme will be funded from resources provided by the Scottish Government as part of the Moray Affordable Housing Programme. Targets have been revised following a decrease in Scottish Government funding for housing new build. The new council housing is being built to high levels of sustainable design and energy efficiency, achieving EPC B and the “silver” level of current Building Regulations in respect of both Carbon Emissions and Energy for Space Heating. Page 164
Page 165
4.7 Fleet 4.7.1 The current policy for replacing vehicles is to plan to replace them at the age assessed as being, on average, the optimum replacement age for that type of vehicle, balancing the cost of repairs and downtime with the cost of replacement. The Zero Emission Fleet Strategy was approved by Economic Development and Infrastructure Services Committee on 30 April 2024 (paragraph 15 of the Minute refers). 4.8 ICT 4.8.1 The use of ICT underpins all of the Council’s activities, to a greater or lesser extent. It is recognised that robust asset management planning for this area is of great importance. The response to the pandemic has changed the shape of the Council’s ICT asset base through extensive roll out of devices to support hybrid working. Another significant change is the move to hosted, or Cloud based, systems which reduces the requirement for ICT infrastructure at our own premises. The impact of these changes on future requirements is still being assessed. 4.8.2 The current policy for replacing ICT assets varies, depending whether the equipment is related to the schools’ network, or the corporate network but is essentially based on the optimal age for the type of asset in the particular setting. Actual replacement, however, does need to take into account other factors such as performance of the asset but also external factors such as third party support, compatibility with other products, general trends in technology, and security requirements / accreditation. The increased number of mobile devices will also have a bearing on the current policy. This will be addressed when consideration is given to the replacement of the mobile devices which were rolled out during a short period of time. 5. ACTIONS PLANNED FOR 2024/25 5.1 The key tasks are noted below: Improve and automate capital monitoring information provided to budget managers to assist in improved management of the capital plan, with a target completion date of March 2025, subject to ICT requirements; Continuing to update Asset Management Planning Process to incorporate the requirements of the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020. Progress with the development of the Learning Estate Strategy; Progress with the Smarter Working Project Stage 2; Continue to develop the full business case for the rationalisation of depots and stores taking into account the need to decarbonise the Council’s property and fleet assets in line with the Council’s climate change objectives. Page 165
Page 166
Continue to develop a selection process for post project reviews, with a target of March 2025; Review the status of Asset Management Plans in January 2025 and develop a programme of updates by June 2025, incorporating the timeframes from the Transformation Strategy for those AMPS which relate to reviews which form part of Transformation. A rolling 5 year programme is envisaged as the likely outcome. Page 166
Page 167
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: COMMITTEE CHANGES, ROLES AND RESPONSIBILITIES AND OUTSIDE BODY VACANCIES BY: DEPUTE CHIEF EXECUTIVE (EDUCATION, COMMUNITIES AND ORGANISATIONAL DEVELOPMENT 1. REASON FOR REPORT 1.1 To ask Council to consider the number of members on Committees, Outside Body vacancies and changes to roles and responsibilities. 1.2 This report is submitted to Committee in terms of Section II (16) of the Council's Scheme of Administration relating to the review and amendment of the Council’s constitutional documents. 2. RECOMMENDATION 2.1 It is recommended that Council agree: i) the number of councillors who sit on principal Committees; ii) that Councillor Gatt becomes the Depute Chair of Planning and Regulatory Services Committee; iii) whether an amendment to the Standing Orders is brought forward to allow substitutes at Committees; iv) to appoint Councillors to the vacant positions on outside bodies detailed in paragraph 4.1; v) to review Councillor membership on Outside Bodies and a report to be brought back to the March 2025 meeting to determine a position; vi) a position on the role of Council Champions; and vii) an amendment to the Council Roles and Responsibilities document to allow deputising for the Civic Leader as detailed in paragraph 7.1 below and paragraph 7.4 of Appendix 1. Item 13. Page 167
Page 168
3. MEMBERSHIP OF COMMITTEES 3.1 Service Committees currently have a membership of 15 with the following political balance agreed by Council on 7 December 2022 (para 17 of the minute refers). Conservative SNP Labour Independents Conservative Non Aligned/Green 5 5 2 2 1 3.2 Following the recent by election the political balance for committee membership of 15 would be as follows: Conservative SNP Labour Independents Conservative Non Aligned/Green 5 4 2 2 2 3.3 It is proposed to amend the membership to 11 with the following political balance. Conservative SNP Labour Independents Conservative Non Aligned/Green 4 3 1 2 1 3.4 The current convention within the Council is that the Council agrees the numbers on Committee and political balance. Group leaders then notify Committee Services of how they wish to fill their allocated committee spaces with a similar process taking place for independent/non-aligned councillors. If a Councillor is unable to attend a Committee they are marked as absent. 3.5 The Council are asked to consider whether Committee members should be able to appoint a substitute for any Committee they are unable to attend. Many Local Authorities across Scotland allow substitutes on their Committees Pros Cons Allows consistent representation for groups on high value issues There is already some flexibility in the current system for medium to longer term absences with group leaders able to switch nominated councillors for committees. Would align with national proposals to allow Councils to adopt proxy voting. A workaround would be needed for the committee management system in which committee members names are pre-populated. Note: Substitutes on Planning and Regulatory Services Committee and Moray Local Review Body would need to have specific training Page 168
Page 169
3.6 This would require a change to the Council’s Standing Orders and could be actioned at the next annual review in January 2025. 4. COMMITTEE DEPUTE CHAIR CHANGE 4.1 At the meeting of Moray Council on 18 May 2022 (para 3 of the minute refers) it was agreed that Councillor Macrae would be Depute Chair of Planning and Regulatory Services Committee. Due to a change within the Administration Group, it is proposed that Councillor Macrae will be replaced by Councillor Gatt as the Depute Chair of Planning and Regulatory Services Committee. 5. OUTSIDE BODY APPOINTMENTS 4.1 Due to changes in membership the following vacancies require to be filled: Local Space Leadership Group Moray Economic Partnership NESS Energy From Waste Project – Elected Members Engagement Group NHS Grampian nominated member One MIJB nominated member and MIJB Chair 4.3 As the Council is mid way through the term it would be prudent to clarify the position with regards to Councillor positions on the remaining Outside Bodies to determine whether a representative from the Council is still required. 4.4 It is proposed that a report will be brought back to Council in March 2025 to consider the responses and whether the Council still wish to appoint to the various Outside Bodies. 6. COUNCIL CHAMPIONS 5.1 The Council currently has 4 Champion roles, Armed Forces, Climate Change, Equalities and Older Persons. The Armed Forces Champion role is a requirement of the Armed Forces Covenant which the Council have signed up to and is linked to Scottish National War Memorial Outside Body. The remaining Champion roles have been agreed by councillors to promote particular themes. 5.2 The responsibilities of the Champions are listed in the Councillors Roles and Responsibilities document, agreed at a meeting of the Council on 28 September 2022 (para 11 of the minute refers) Appendix 1 and are detailed below for information: Encourage best practice, make suggestions and act as a positive influencers within the Council in relation to the theme, goal or group to which they have been nominated; Maintain links with relevant Officers, chairs and external groups/bodies as appropriate in relation to their particular role; and Participate in appropriate publicity relevant to their particular role. Page 169
Page 170
5.3 There has been some confusion over the Champion role. In particular the extent of authority of the Champion role and how this relates to the role of Committee Chairs . It is therefore considered prudent to review the definition of the Champion role. 6. COUNCIL CHAMPIONS - OPTIONS GOING FORWARD 6.1 There are a number of options the Council may wish to consider in how the Champions role is managed going forward. 6.2 Option 1 Do nothing – leave the roles as they currently are. This does not address the issues detailed in 5.3 above. Option 2 Give the roles to the relevant Committee Chair with the following suggestions: Armed Forces - Police and Fire Climate Change – Economic Development and Infrastructure Equalities - Corporate Older Persons - Moray Integration Joint Board Chair/Vice Option 3 Amend the definition to the Champions roles to remove the second two bullet points, as follows: • Encourage best practice, make suggestions and act as positive influencers within the Council in relation to the theme, goal or group to which they have been nominated; • Maintain links with relevant Officers, chairs and external groups/bodies as appropriate in relation to their particular role; and • Participate in appropriate publicity relevant to their particular role. 7. DEPUTISING FOR THE CIVIC LEADER 7.1 An amendment to the Councillor Roles and Responsibilities document is proposed to allow the Council Leader or Depute Leader to deputise for the Civic Leader for one-off occasions. The proposed wording amendment is shown as a tracked change in the version of this document contained in Appendix 1. The relevant exact is as follows: Additional responsibilities Para 7.4: The Civic Leader is authorised to wear the Council chain of office and is expected to:- act as civic head, hosting Council events and attending other events as civic leader and representative of the Council and the Moray communities. Where Page 170
Page 171
the Civic Leader is unable to attend a particular event then either the Council Leader or Depute Leader may deputise for them with authority to wear the Council chain of office for that event. If neither is available, then in consultation with the Chief Executive another Senior Member may deputise. 8. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) None (b) Policy and Legal There is no legal requirement to have Champions roles within the Council. (c) Financial implications There are no financial implications associated with this report. (d) Risk Implications There are no risk implications associated with this report. (e) Staffing Implications There are no staffing implications associated with this report. (f) Property There are no property implications associated with this report. (g) Equalities/Socio Economic Impact Two of the Champions roles relate to the promotion of the interests of protected groups in Council decision making. As the options in paragraph 4.2 above (Options 2,3 and 4) provide for some continuation of this promotion through the Chair and as the Council still require in law to have regard to the interests of these groups in its decision making there is not considered to be any detrimental impact on these groups. (h) Climate Change and Biodiversity Impacts There are no climate change and biodiversity impacts associated with this report. (i) Consultations The Interim Chief Executive, Depute Chief Executive (Economy, Environment and Finance), Depute Chief Executive (Education, Communities and Organisational Development), Head of Governance, Strategy and Performance, Head of HR, ICT and OD and Acting Head of Economic Growth and Development have been consulted and any comments included in the report. 9. CONCLUSION Page 171
Page 172
9.1 Council is asked to consider membership of committees, political balance on committees, appointments to certain outside bodes and whether to amend the role of Council Champion. Author of Report: Alasdair McEachan, Head of Governance, Strategy and Performance and Tracey Sutherland, Democratic Services Manager Background Papers: Ref: Page 172
Page 173
APPENDIX 1 MORAY COUNCIL COUNCILLORS’ ROLES AND RESPONSIBILITIES The document sets out the different roles which Councillors can hold within the Council and the Council’s expectations of these roles. It has been created for the benefit of the public, Councillors and Officers in the interests of clarity and transparency. Date approved 28 September 22 Document status For publication Document owner Head of Governance, Strategy and Performance Date for review September 25 1. ALL COUNCILLORS Legal Duties 1.1 All Councillors must comply with general legal requirements in carrying out their duties. They also have specific legal duties to:- • sign a declaration of acceptance office • at least once in a six-month period, attend a meeting of the Council, a committee, a sub-committee, a joint committee, a joint board or other formal outside body as a Council representative • maintain an accurate and up-to-date Register of Interests available on the Councillors pages of the Committee Management Information System CMIS • familiarise themselves with and comply with the Councillors’ Code of Conduct, having regard to Standards Commission guidance and advice • comply with duties under the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 • comply with regulations concerning remuneration, expenses and allowances and the Council’s Scheme of Elected Members’ Remuneration, Allowances and Reimbursement of Expenses Other duties and expectations 1.2 There are other duties and expectations over and above that legal minimum. They arise in the following areas. Councillors have to maintain a complex balance and mix of roles:- • as Moray residents and recipients of Council services • as holders of a public office • as ward members, to the ward area and constituents • as Council members, to the whole Council and its constituents • as members of a political party or group, expressing political values and supporting the group to which they belong and its policies and values • as independent Councillors, supporting and following their values and the platform on which they were elected • as decision-makers in a regulatory capacity • as holders of additional responsibilities and positions within the Council Item 13. Page 173
Page 174
APPENDIX 1 • as representatives of the Council in partnership working, outside body appointments and dealing with the public in general Values and principles 1.3 In everything they do, Councillors are expected to uphold and comply with the Council’s values as set out in our Corporate Plan. Those are:- Fair • tackle inequalities • treat people fairly • promote equalities and awareness • consider our impact on others Ambitious • promote and celebrate Moray • be a great place to work • ensure sustainable and efficient Council services • improve life for the most vulnerable• Improving • Drive improvement • Encourage innovation • Take commercial opportunities • Invest in transforming to meet future needs Responsive • Be open and transparent • Promote community participation and involvement • Listen to and involve our communities 1.4 The Councillors’ Code of Conduct sets out the principles of good conduct which Councillors must follow:- • Duty • Selflessness • Integrity • Objectivity • Accountability • Stewardship • Openness • Honesty • Leadership • Respect Public office 1.5 As holders of public office Councillors are accountable to the public of Moray for their decisions. Through their personal conduct and through their work Page 174
Page 175
APPENDIX 1 including contact with the people in the area they represent, the media and other agencies, Councillors are expected to:- • uphold and act in accordance with the law • fulfil and act in accordance with the public trust placed in them • justify their actions to the public • maintain the highest standards of conduct • promote the core values of the Council • provide an example to others • enhance the reputation of the Council and Moray • safeguard and enhance the public perception of the Council and its status • take a key role in advancing the social, economic and environmental wellbeing of Moray • facilitate and encourage partnership working with other committees/boards in responding to meeting the needs of Moray communities • avoid any circumstance which could lead to the suspicion or appearance of improper conduct or which could bring the Council into disrepute • carry out their roles and duties in a dignified and respectful manner Internal Rules and Procedures 1.6 Councillors are expected to comply with the Council’s internal governance arrangements by:- • being familiar with and complying with Standing Orders • respecting other Councillors, the Chair and rulings by the Chair at meetings • adhering to the protocols approved to guide Councillor and Officer relations • following the Council’s rules regarding the use of Council facilities • respecting the role and responsibilities of Officers • complying with corporate policies which apply to them as well as Officers (for example, information security) Duties to whole Council and to the Ward 1.7 Councillors have responsibilities and duties to the Council and Council area as a whole. They are expected to:- • participate in the decision making of the Council and the formation of the Council’s policies and programmes • monitor and scrutinise the effectiveness and efficiency of the Council in the discharge of its functions • ensure that the Council uses its resources prudently and in accordance with the law • represent, both in Council decision-making and in contact with Officers of the Council, all of the constituents in the area which they are elected to represent • promote participation and citizen involvement in the decision making process through recognised means. Page 175
Page 176
APPENDIX 1 • have regard to the policies and decisions of the Council when representing the interests of their constituents • recognise the cultural diversity within the area and encourage equal opportunities • attend training and briefing sessions and progress their own personal development • seek advice where appropriate from colleagues and senior Officers • consider issues on their merits, taking account of the views of others • accept responsibility individually and collectively for ensuring that adequate provisions for the proper conduct of the Council’s business are in place 1.8 Alongside the duties to the Council as a whole, Councillors have specific roles and duties in relation to their ward area. They are expected to:- • be accessible to all the people within their ward area • represent conscientiously the interests of the people within their ward to the Council and to other public sector committees/boards • respect and work constructively with their ward Councillor colleagues • have regard to and respect the policies and decisions of the Council when representing the interests of their constituents without limiting their ability to scrutinise and review the application and continuing relevance and fitness for purpose of these policies and decisions. • interpret and express the wishes of their constituents to the Council • exercise community leadership and involvement, both in their ward and in Moray as a whole • develop local knowledge of local issues and use it to inform Council decisions and policy-making • listen and respond to the needs of local people • carry out casework on behalf of constituents • account for service priorities, the allocation of resources and the performance of the Council to constituents Regulatory and quasi-judicial business 1.9 Councillors may be appointed to make decisions on regulatory or quasi- judicial business. This means that they are acting like a court of law in making a decision on an application or determination of individual rights or an appeal. 1.10 Councillors have duties and responsibilities in these cases which are higher than normal:- • They must be impartial • They must be aware of and understand the relevant legal provisions and take advice where necessary • They must be aware of relevant Council policies • They must make decisions based only on relevant facts and circumstances which have been brought to their attention as part of the meeting or hearing Page 176
Page 177
APPENDIX 1 • They must apply the appropriate legal tests and rules to those relevant factors • They must not take irrelevant factors into account • They must ensure that everyone is treated fairly and equally and is given a fair hearing • They must avoid making statements or doing or saying anything which may give the perception of bias or pre-judgment • They must not make decisions according to a pre-determined political or group line, or lobby colleagues to reach a particular determination External work and relationships 1.11 Councillors may be appointed by the Council to external committees/boards, including arms-length external organisations (ALEOs). They have particular responsibilities in relation to those appointments. Those are:- • participating in the activities of the outside body • providing two-way communication between it and the Council • developing and maintaining a working knowledge of the Council’s policies and practices in relation to that body and of the community’s needs and aspirations in respect of that body’s role and functions • contributing to community planning by acting as a representative of the Council, working in partnership with relevant external committees/boards • representing the Council and Moray at events at local, national and international level • acting as an effective ambassador for the Council and Moray at all times • representing the interests of the people of Moray to the Council to other public sector committees/boards 1.12 The Councillors’ Code of Conduct extends to Councillors representing the Council on outside committees/boards. It also requires compliance with any other Code of Conduct applicable to the outside body itself. 2. COUNCILLORS WITH ADDITIONAL RESPONSIBILITIES Defined 2.1 The Council recognises a number of positions with additional responsibilities to that of a Councillor. These positions are described in more detail below and comprise: • Council Champions • Chairs of Committees and Boards • Leader of the Council • Depute-Leader of the Council • Leader of Largest Non-Administration Group • Civic Leader Page 177
Page 178
APPENDIX 1 Additional allowances 2.2 Under statutory remuneration regulations every Councillor receives a basic allowance. A fixed higher allowance is payable for the positions of Council Leader, Civic Leader and Chairs/Vice-Chairs of Joint Boards. In addition the remuneration regulations give the Council discretion to approve up to 9 further senior responsibility allowances or SRA’s. 2.3 The posts which attract SRA’s are not fixed and require to be approved at a Council meeting. For transparency the remuneration of Councillors is reported annually to the Council. 3. COUNCIL CHAMPIONS Defined 3.1 The Council may nominate individual Councillors as Champions to promote an aspirational theme, goal or group interest in which that Councillor has a particular interest, knowledge or affinity. Responsibilities 3.2 Council Champions are expected to: • Encourage best practice, make suggestions and act as a positive influencers within the Council in relation to the theme, goal or group to which they have been nominated. • Maintain links with relevant Officers, chairs and external groups /bodies as appropriate in relation to their particular role • Participate in appropriate publicity relevant to their particular role. 4. CHAIRS OF COMMITTEES AND BOARDS Defined 4.1 The Council delegates functions to committees and sub-committees to make recommendations and to take decisions in relation to the delivery of services and the discharge of the Council’s functions. These committees require an individual Councillor to chair their meetings. Chairs are appointed by Moray Council. 4.2 Chairs (who may have multiple roles) will generally be classed as Senior Councillors and receive a higher level of remuneration than ordinary Councillors. 4.3 The role of Chairs goes beyond that of ordinary Councillors. Chairs are expected to provide a focus for Councillors in relation to the services within the remit of the committees/boards they chair and to enhance the reputation of the Council and Moray. Additional responsibilities 4.4 Chairs are expected to: Page 178
Page 179
APPENDIX 1 • promote corporate responsibility for the policies and decisions of their committees/boards and ensure clear political direction and guidance in the best interests of the whole of Moray. • ensure that the Leader of the Council is briefed as appropriate on significant issues within their committee remit • work with the appropriate Officers in respect of the services within the remits of the committees/boards they chair • foster and develop effective and constructive working relationships with other members of the Council and Officers, and with relevant outside bodies • liaise closely and effectively with senior Officers in relation to the business of their committees/boards • chair meetings and ensure the proper conduct of meetings including keeping order; ensuring that members have a fair hearing; that reasonable steps are taken to enable effective participation by members, Officers and members of the public participating by being present physically or by remote-access; regulating participation by Officers and the public; ruling on all matters of procedure, competency and relevancy; and ensuring the business on the agenda is concluded efficiently and effectively within the terms of the Council’s Standing Orders. • promote compliance with the Council’s Constitutional Documents corporate policies and objectives and the Council’s committees/boards as they affect their committees/boards’ remit • communicate and link effectively with other committees and working groups and with individual elected members, other committees/boards and community groups • promote the core values of the Council in the work of their committees/boards • act at all times in a manner to enhance the reputation of the Council in terms of fair representation, open government and accountability and as a representative of both the Council and the community • maintain the highest standards of integrity and behaviour personally and act as an example to others • assist in identifying and raising awareness of relevant training for members of their committees/boards Vice-Chairs and Acting Chairs 4.5 These responsibilities apply to the Depute-Chairs when acting in the role of Chair. 4.6 These responsibilities apply to any Councillor appointed in an acting capacity under the Council’s Family Leave Scheme for Elected Members or where they are covering an extended absence. 5. COUNCIL LEADER Defined 5.1 The Leader of the Council is a Councillor elected by the other members of the Council to be the political figurehead and leader of the Council and its Page 179
Page 180
APPENDIX 1 Councillors and is the title given by the Council to the Councillor performing the role of “Convener” and elected under section 4 of the Local Government etc. (Scotland) Act 1994. The statutory requirement of this role is to chair Moray Council. 5.2 The Leader of the Council is usually the head of the political party or group which forms the administration group on the Council. The role will carry overall political responsibility for all Council service areas as well as any specific area defined in the Scheme of Administration. The role carries a higher level of remuneration (prescribed by regulation) which is distinct from Senior Councillor payments. 5.3 The Leader of the Council is expected to enhance the reputation of the Council in terms of fair representation, open government and accountability and to maintain the highest standards of integrity and behaviour. 5.4 As leader of their political group, they have particular responsibility to represent and communicate the views of their group as part of the formal decision making processes of the Council and its committees and through informal working groups and forums. They are to provide leadership of their group and act as its main spokesperson to ensure clear political direction and guidance is given on behalf of the political administration. Additional responsibilities 5.5 In addition to meeting the expectations of a Council Chair and an ordinary Councillor the Leader of the Council is expected to:- • chair meetings of Moray Council and ensure the proper conduct of meetings including keeping order; ensuring that members have a fair hearing; that reasonable steps are taken to enable effective participation by members, Officers and members of the public participating by being present physically or by remote-access; regulating participation by Officers and the public; ruling on all matters of procedure, competency and relevancy; and ensure the business on the agenda is concluded efficiently and effectively in terms of Standing Orders. • lead the political administration of the Council • ensure clear political direction and guidance in the best interests of the whole of Moray. • carry overall political responsibility to promote the vision, policies, strategies and decisions of the Council as a whole • promote public confidence in the activities of the Council as a whole • have particular responsibility with regard to community leadership • exercise sound and fair political leadership • be responsible for developing and overseeing effective political relationships with partner organisations • act as the Council’s main political spokesperson to communicate and promote the policies, strategies, decisions and the achievements of the Council within agreed communications strategies. Page 180
Page 181
APPENDIX 1 • provide feedback to the Chief Executive where requested in the following areas: organisational and management processes of the Council, decisions to be taken under delegated powers, budget priorities, service planning and performance and pre committee formulation of policy • promote an inclusive working environment involving all members of the Council • develop and encourages effective working relationships among Councillors and Officers • represent the Council at meetings of the Convention of Scottish Local Authorities (COSLA) and ensures that the position and interests of the Council are represented at COSLA meetings and that feedback from these meetings is given through established channels within the Council. • if appointed, chair significant policy consideration/discussion groups established by the Council such as the Political Group Leaders group • help ensure that the work of all committee Chairs contributes to the corporate effectiveness of the Council as a whole • liaise closely with the Depute Leader over the division and delegation of responsibilities between the Leader and Depute Leader roles • liaise closely with the Civic Leader in terms of civic roles and functions on behalf of the Council Depute Leader, Acting Leader, Joint Leaders 5.6 In addition to meeting the expectations of a Council Chair and an ordinary Councillor the Depute Leader is expected to assist the Council Leader in discharging the roll of Council Leader. They may undertake any responsibilities associated with the Leader role as informally agreed by the Council Leader, or in terms of any more formal division agreement, and shall liaise with and work constructively and effectively with the Council leader. In particular the Depute Leader is expected to: • Provide cover for chairing of Moray Council or attendance at COSLA leaders meetings where the Council Leader is unable to attend. • promote an inclusive working environment involving all members of the Council • develop and encourage effective working relationships among Councillors and Officers • provide feedback to the Chief Executive where requested in the following areas: organisational and management processes of the Council, decisions to be taken under delegated powers, budget priorities, service planning and performance and pre committee formulation of policy 5.7 These responsibilities apply to any Councillor appointed in an acting capacity under the Council’s Family Leave Scheme for Elected Members or covering a period of extended leave. 5.8 Joint Leaders may be elected by the Council. The responsibilities of the Leader will apply equally to those who share the office. Joint Leaders have the additional responsibility of liaising with and working constructively and effectively with each other in the best interests of the Council and the Page 181
Page 182
APPENDIX 1 Council’s area and residents. If joint Leaders are appointed then either will be able to take the chair at Moray Council meetings. 6. GROUP LEADER Defined 6.1 A Group Leader is the nominated representative/spokesperson of any non- administration political party or group comprising three or more Councillors. The holder of the position is not elected by the Council and there is no automatic right to additional remuneration. 6.2 The holder of the post carries all of the duties and responsibilities of an ordinary Councillor (and Chair if applicable) with additional responsibilities to ensure that the views of their group are communicated and represented as part of the democratic governance of the Council. Additional responsibilities 6.3 A Group Leader is expected to:- • represent and communicate the views of their group as part of the formal decision making processes of the Council and its committees and through informal working groups and forums • provide leadership of their group • act as the group’s main spokesperson in order to enable the group to participate effectively in the decision-making processes • ensure clear political direction and guidance is given on behalf of their group in the best interests of the Council and Moray • participate actively and effectively in the scrutiny of the Council’s policies, budgets and service delivery and their effectiveness in meeting the strategic and operational objectives agreed by the Council and the needs of the communities in Moray • promote an inclusive working environment and ensure the participation of members of their group in debate and policy decision making processes of the Council • maintain effective communications with other Group Leaders and the Chief Executive • participate as required in consultation organised by the Council with Moray’s communities to ensure that their full range of views and opinion are expressed to Council in the formulation and review of policies, budgets, strategies and service delivery • represent their group in Council events, community involvement and in other forums in order to further the interests of the Council and Moray • promote the core values of the Council in fulfilling their remit Depute, Acting and Joint Group Leader 6.4 These responsibilities apply to any Depute Group Leader appointed by a group. Page 182
Page 183
APPENDIX 1 6.5 The responsibilities of Group Leader will apply equally to any Acting Leader (acting in that capacity under the Council’s Family Leave Scheme for Elected Members or covering a period of extended leave) or to those who share the office as Joint Leaders 7. CIVIC LEADER Defined 7.1 The Civic Leader fulfils a unique and important function as the civic head in representing the Council and the wider Moray community at ceremonial and other formal events and occasions both within and outside Moray. The Civic Leader is the formal representative of the Council when meeting with visiting dignitaries. 7.2 The position shall attract a higher level of remuneration, defined “Civic Head” in terms of the remuneration regulations. 7.3 The holder of the post carries all of the duties and responsibilities of an ordinary Councillor with the additional responsibilities set out below. Additional responsibilities 7.4 The Civic Leader is authorised to wear the Council chain of office and is expected to:- • act as civic head, hosting Council events and attending other events as civic leader and representative of the Council and the Moray communities. Where the Civic Leader is unable to attend a particular event then either the Council Leader or Depute Leader may deputise for them with authority to wear the Council chain of officer for that event. If neither is available, then in consultation with the Chief Executive another Senior Member may deputise. • act as civic head, hosting Council events and attending other events as civic leader and representative of the Council and the Moray communities with authority to appoint a substitute when they are unable to attend. • • promote Moray’s profile to the wider community through public appearances at social, community, cultural and business events and though the media • foster networks with other organisations in both the business and public sectors to support and enhance the development of Moray and its communities • liaise closely with the Leader of the Council in terms of the civic roles and functions on behalf of the Council, and with the Depute Leader • promote the core values of the Council • act at all times in a manner to enhance the reputation of the Council in terms of fair representation, open government and accountability and as a representative of both the Council and the community Page 183
Page 184
APPENDIX 1 • maintain the highest standards of integrity and behaviour personally and act as an example to others • hold an ex officio position on any cross party policy formulation groups established by the Council (such as the Political Group Leaders group) to assist them in meeting their civic duties Acting Civic Leader 7.5 These responsibilities apply to any Councillor appointed in an acting capacity under the Council’s Family Leave Scheme for Elected Members. Page 184
Page 185
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: RESPONSE TO CONSULTATION ON PROPOSAL TO ALLOW PROXY VOTING BY COUNCILLORS BY: HEAD OF GOVERNANCE STRATEGY AND PERFORMANCE 1. REASON FOR REPORT 1.1 To advise the Council of a consultation by the Scottish Government on a proposal to allow proxy voting by councillors; and 1.2 This report is submitted to Committee in terms of Section II (19) of the Council's Scheme of Administration relating any new policy matter which does not fall within the terms of reference of any Committee. 2. RECOMMENDATION 2.1 The Council is asked to approve the following recommendation(s):- (i) note the contents of this report; and (ii) agree the proposed response by the Council to the consultation, as included in Appendix 1 to this report. 3. BACKGROUND 3.1 On 3 October 2024, the Scottish Government opened a consultation on a proposal to allow proxy voting by councillors. 3.2 The consultation closed on 28 November 2024 however special dispensation has been sought to submit this response late. 3.3 The consultation paper advises that concerns have been raised with the Scottish Government around the absence of proxy voting provision for councillors. The consultation notes that the absence of explicit provisions allowing for proxy voting within local authorities could impact councillors on parental leave, or those who are unable to attend for other reasons, for example, because of an accident or serious illness. Proxy voting in these circumstances would allow a councillor to nominate another specified councillor to vote on their behalf during Council decisions. Item 14. Page 185
Page 186
3.4 The relevant legislative framework allows for formal local authority meetings (including committees, joint committees and sub-committees) to be conducted in any way in which each member is enabled to participate, even if not physically present. However, there are no provisions which explicitly allow for proxy voting, and the consultation seeks views on introducing a provision to permit proxy voting within local authorities. 3.5 The consultation notes that there may be options, short of proxy voting, that could aid decision making. The Scottish Government notes that local authorities could introduce informal pairing agreements along the lines of those previously used in the Scottish Parliament prior to its introduction of explicit proxy voting provisions. Pairing occurs where two individuals from opposing parties both agree not to vote on a decision. In local government, this would allow a councillor to be absent without affecting the result of the vote as the absences balance each other out. 3.6 The Scottish Government does, however, recognise that there could be difficulties around this given councils are smaller, with more limited numbers of councillors to pair. There may also be instances where local circumstances mean it would not be possible to agree a pair. Such a pairing agreement might also prevent quorum requirements being met, particularly in smaller authorities. 3.7 The consultation notes that local authorities could also consider the appointment of named substitutes to committees, effectively allowing a form of proxy voting to be used. Most Scottish local authorities allow substitutes on committees and this is the subject of a separate report to the Council at this this meeting. The consultation does, however, note that where there are independent members or a smaller number of councillors from the same party then opportunities for named substitutes may be limited. It would also not be possible to apply this to full Council meetings as all councillors are required at those meetings. 3.8Given the above limitations to these options, the Scottish Government believes that a statutory provision around proxy voting would be preferable. 4 PROPOSALS 4.1 The Scottish Government proposes to amend the Local Government (Scotland) Act 1973 to enable a councillor in Scotland to arrange for their vote to be cast by a proxy. A further amendment would also be made which would require local authorities to agree and publish a scheme setting out how proxy voting would work in practice, where they choose to introduce proxy voting. 4.2. The Scottish Government advise that the operational details, including the criteria of the scheme, would not be set out in legislation. It would be for local authorities to determine how a scheme could work in practice and under which circumstances proxy voting could be available, should they wish to allow for it. Joint guidance would be produced by COSLA and the Scottish Government to assist the drafting of the operational scheme. Page 186
Page 187
4.3. The Scottish Government proposes the following criteria be included within the operational guidance as suggestions on where proxy voting could be appropriate: maternity leave, paternity leave, parental leave, shared parental leave or adoption leave; complications arising from pregnancy, childbirth, miscarriage or baby loss; serious long-term illness or injury; bereavement; attending to a person who is near the end of their life; any other reason subject to agreement of the full Council. 4.4. The Scottish Government has, however, advised that at this time there is no suitable legislative opportunity to introduce this amendment should the consultation support the introduction of proxy voting. The Scottish Government will continue to support authorities to investigate other options to enable councillor participation until such time an amendment can be introduced. 4.5. Officers have assessed the proposal. Broadly speaking, officers can see benefit in permitting local authorities the ability to introduce some form of proxy voting, in such form as an individual local authority considers appropriate. Officers have drafted a proposed consultation response, included in Appendix 1 to this report. As included in the draft response, there are a few comments that it is suggested are worth noting in the response:- It is understood that most, if not all, local authorities already have arrangements for substitutions, so in practical terms this is most likely only to be relevant for meetings of the full Council, or where a member cannot arrange a substitute; It is commonly accepted that in the exercise of a proxy vote, the person entitled to vote (Cllr A) instructs their proxy (Cllr B) to exercise their vote in accordance with their wishes (ie Cllr A’s wishes). Quasi-judicial matters cannot be pre-determined and there is a clear requirement for elected members to only make a decision once all relevant considerations have been suitably considered. It is difficult to see how this could be reconciled with a member arranging for a proxy to vote on their behalf in a particular way. If this is how the Government intends the proposal to operate, and the proxy does not have discretion as to how they vote, then it is recommended that proxy votes are not permitted for quasi-judicial matters; Linked to the above, whilst some local authorities require certain motions and amendments to be tabled in advance of the meeting, this is not the case for all, and even then there will still be the ability to move proposals at the meeting itself. If an elected member is not able to participate in the meeting, then they will not have heard the full discussion and debate and, as such, might not be able to fully take all relevant considerations into account before they vote. They will neither be able to ask questions or contribute to the discussion/debate themselves as they might otherwise have done had they been able to participate. In this context, relevant considerations could include the application of the Public Sector Equality Duty and the Fairer Scotland Duty Page 187
Page 188
to the matter in question. Decisions of the Council are at risk of legal challenge if there is a flaw in the decision-making process, for instance because a relevant duty was not suitably discharged. As above, if this is how the Government intends the proposal to operate, then it is recommended that consideration is given to proxy votes not being permitted for matters where councillors need to be able to participate in the meeting; If someone arranges for a proxy to vote on their behalf this presumably would not be counted as attendance at the meeting, in terms of Section 35 of the Local Government (Scotland) Act 1973; A member who would otherwise have been unable to vote on the matter in question should not be able to have a proxy vote on their behalf, e.g. where they are currently in a period of suspension following a decision of the Standards Commission or where they would have declared an interest and recused themselves from the meeting; A member who has arranged for a proxy to vote on their behalf should not count towards a quorum at the meeting; Whilst it would no doubt be for each authority to consider their own local rules, any proxy arrangements would need to be advised to relevant Council officials by a suitable time in advance of the meeting commencing; and Councils now use a variety of electronic meeting systems, some with voting options, and individual Councils would need to ensure their system could accommodate a proxy vote. 5 SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) No direct implications. (b) Policy and Legal If legislation where changed to allow proxy voting at council meetings then a further decision would be required by the council and, if agreed then a change to the council's standing orders would be required. (c) Financial implications There are no financial implications arising directly from this report. (d) Risk Implications None (e) Staffing Implications There are no employee implications arising directly from this report. (f) Property No direct implications. Page 188
Page 189
(g) Equalities/Socio Economic Impact No direct implications. (h) Climate Change and Biodiversity Impacts There are no climate change, sustainability and environmental implications arising directly from this report. (i) Consultations Group leaders have been consulted on the merits of bringing this report to the Council. 5. CONCLUSION 5.1 The Council are asked to agree a response to the Scottish Government on proposals to allow proxy voting within Council meetings. Author of Report: Alasdair McEachan Background Papers: Ref: Page 189
Page 190
Page 190
Page 191
APPENDIX 1 Consultation on proposal to Allow Proxy Voting by Councillors Consultation Questions Question 1 Do you agree that an explicit provision should be introduced to allow a councillor to arrange for their vote to be cast by proxy (YES/NO) Proposed Response: Yes Question 2 Do you agree with the optional criteria set out at paragraph 12 which could be applied by a local authority to allow for proxy voting? (YES/NO) Proposed Response: Yes Question 3 Are there any further comments that you wish to make on the proposal to allow for proxy voting (free text, 300 word maximum)? In general terms, the Council is supportive of the additional flexibility that proxy voting might permit. Clearly, how such an arrangement might operate in any individual council would be for them to determine, and would need to take account of its size, political composition and meeting arrangements (including any electronic meeting/voting systems adopted). However, the Council believes the following points are also worthy of consideration:- Many local authorities already have arrangements for substitutions in committees, so proxy voting is most likely only to be relevant for meetings of the full Council, or where a member cannot arrange a substitute; In the exercise of a proxy vote, the person entitled to vote instructs their proxy to exercise their vote in accordance with their wishes. Quasi -judicial matters cannot be pre-determined and there is a clear requirement for a councillor to only make a decision once all relevant considerations have been suitably considered. It is difficult to see how this could be reconciled with a member arranging for a proxy to vote on their behalf in a particular way. If this is how it is envisaged proxy voting would operate, then it is recommended that proxy votes are not permitted for quasi-judicial matters; Many motions and amendments are tabled at meetings following debate. An elected member giving a proxy will not have heard the full discussion and debate and, as such, might not be able to fully take all relevant considerations into account before they vote. They will neither be able to ask questions or contribute to the discussion/debate themselves as they might otherwise have done had they been able to participate. In this context, relevant considerations could include the application of the Public Sector Equality Duty and the Fairer Scotland Duty to the matter in question. Decisions of the Council are at risk of legal challenge if there is a flaw in the decision-making process, for instance because a relevant duty was not suitably discharged. As above, if this is how the Government intends the proposal to operate, Item 14. Page 191
Page 192
then it is recommended that consideration is given to proxy votes not being permitted for matters where councillors need to be able to participate in the meeting; If someone arranges for a proxy to vote on their behalf this presumably would not be counted as attendance at the meeting, in terms of Section 35 of the Local Government (Scotland) Act 1973; A member who would otherwise have been unable to vote on the matter in question should not be able to have a proxy vote on their behalf, e.g. where they are currently in a period of suspension following a decision of the Standards Commission or where they would have declared an interest and recused themselves from the meeting; A member who has arranged for a proxy to vote on their behalf should not count towards a quorum at the meeting; Page 192
Page 193
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 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 the scope and process of updating the Climate Change Strategy in 2025. 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 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, progress in waste reduction, 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 available to the Council to make progress in these areas, including the Scottish Government’s £500m North East Just Transition Fund; (iv) agrees that existing decarbonisation project groundwork be built upon by working up projects in detail with a view to submitting funding bids for committee approval and progressing spend-to- save opportunities, noting that funding bids should align with aspirations for the pathway to net zero that emerges as the review progresses; Item 15. Page 193
Page 194
(v) agrees that a member and officer Climate Change Working Group be established to oversee the Climate Change Strategy update (Appendix 2); (vi) notes that on 18 April 2024, the Scottish Government removed the target of a 75% reduction by 2030 while retaining the statutory target of net zero carbon emissions by 2045; (vii) agrees that the Climate Change Strategy update should move away from committing the Council to a 2030 net zero target and adopt decarbonisation targets for each area within the council. As set out in para 6.6 of this report, these should at least align to national targets and could show greater ambition where this is felt to be practically and financially achievable; and (viii) Agrees that a briefing for members will be provided as high-level work on Just Transition and socio-economic benefits is developed. 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 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 others 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. Page 194
Page 195
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 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 the 2022-23 report highlights areas of progress and best practice; 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; Page 195
Page 196
A lack of shared ownership 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 External factors and funding availability have resulted in some decisions taken by the Council contributing 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. 5. ADDITIONAL INFORMATION TO ROUTEMAP TO NET ZERO 5.1 There has been a delay in presenting the 2022-23 Route Map to Net Zero to Council. Since the report was written there havebeen a number of changes which are worth noting. Firstly, as reported to the ED&I committee on 12 November 2024 (para 13 of the draft minute refers) in 2023/24, the Council’s recorded carbon emissions decreased by 7,836 tCO2e (-29%) compared to reporting year 2022/23. This is principally the result of the use of the NESS Energy from Waste facility, which processes non-recyclable waste to produce electricity for the national grid, and heat for a district heating network. 5.2 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. The Nature Network Opportunity Map is currently being finalised and expected to be complete by March 2025 and the creation of a Biodiversity Strategy is being developed alongside the Climate Change Strategy update and expected to be complete by August 2025. These will contribute to the new Local Development Plan. However, the reduction in Nature Restoration Funding has had an impact on the Council’s ability to progress biodiversity projects. Future success in this area will require securing new funding sources and integrating biodiversity efforts with other initiatives where appropriate to create efficiencies. 5.3 There also remains a critical gap in the Council’s readiness for the impacts of climate change. As reported to Council on 25 September 2024 (para 21 of the draft minute refers), adaptation is very clearly evidenced in some key service areas, most notably coastal change and flood management planning, and local development planning. While some progress is being made in other areas, the organisation is clearly in the early stages of preparing for climate impacts. Continuing 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. 5.4 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 are exploring at a high level the opportunity to work with partners to develop a multi-year, multi million pound bid across a range of projects, supporting economic growth, carbon Page 196
Page 197
reduction, renewable energy generation, use of natural capital. This will include potential spend to save opportunities. Potential future funding for the actions raised within the Council’s Local Heat and Energy Efficiency Strategy (LHEES); 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. As high-level work develops on Just Transition and socio-economic benefits a briefing for members will be provided. 5.5 Success will require a combination of strong leadership, collaboration across services, knowledge building and adequate resourcing to realise these opportunities. 5.6 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. 6. NEXT STEPS – CLIMATE CHANGE STRATEGY UPDATE 6.1 To ensure the Climate Change Strategy (CCS) remains relevant and accounts for ongoing national policy development, it is subject to review. The Strategy and its targets now require updating to reflect the progress that has taken place over the last three years, the greater understanding of the decarbonisation pathway the Council is on, and the changes in national policies around Climate Change. It is recommended that a member and officer Page 197
Page 198
Climate Change Working Group be established to oversee this CCS update. A similar arrangement was beneficial during development of the original CCS and can provide useful in-depth oversight around key areas of policy development. 6.2 The scope of work for the CCS update (including details of the need to amend the Council net Zero target), the terms of reference for the Climate Change Working Group, and the process for engagement are detailed in Appendix 2. 6.3 A decision point in 2025 was built into the CCS 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. It is proposed to take this decision early as part of the scope setting for the Climate Change Strategy update 2025. 6.4 As reported to the ED&I committee on 12 November 2024 (para 13 of the draft minute refers), the latest Moray Council annual Public Bodies Climate Change Duties Report shows a reduction in carbon emissions. However, the rate of reduction is not enough to reach the 2030 target. The RMNZ report 2022/23 highlights the need for action at pace and greater resourcing if the pace of decarbonisation is to be increased. This is unlikely within the current finance arrangements, although officers have commissioned high level work exploring potential projects for Just Transition funding for Moray wide projects. 6.5 The areas of building heat and fleet are the largest areas of emissions for Moray Council and among the most difficult to reduce. Relevant strategies on these areas currently use national decarbonisation targets and these legislative deadlines are being used in calculating Moray Council carbon emissions reductions. Savings from other areas and carbon sequestration will not take overall carbon emissions down to net zero by 2030. 6.6 The recommendation is that the Climate Change Working Group should update the Climate Change Strategy by moving away from the 2030 target, adopt decarbonisation targets for each area within the council and track these individually. These should at least align to national targets and could show greater ambition where this is felt to be achievable in terms of financial availability and technical practicality. This will mean a backstop date of 2045 for overall net zero, but could include interim targets for each area as appropriate. When setting any interim targets, the dates and emission reductions should be set using the best available data and knowledge. 6.7 It is proposed that the new working group would follow a similar structure to existing council working groups, with membership including: The Depute Chief Executive (Economy, Environment and Finance) Heads of Service (as appropriate) The Climate Change Team Nominated representatives from the member body Relevant operational officers from key sections as required 6.8 If the Working Group proposal is approved, officers will seek nominations for representatives from the member body. Membership will be established to Page 198
Page 199
reflect the political balance of the Council and comprise of Members of the parent committee (Economic Development & Infrastructure). 6.9 Climate Change officers will collate information from officers working in relevant fields and report to the working group. This information should include: appropriate decarbonisation pathways, existing strategies and relevant actions with appropriate staff existing governance and reporting processes for these strategies and action plans suggest targets and interim targets. Link these to financial estimates and any additional requirements needed to meet targets identify barriers to progress and suggested solutions to address these set out proposals for clear governance and monitoring of actions. This should consider inclusion of actions in service plans 6.10 The Climate Change Working Group will not replicate or work in addition to the Climate Change Board. It is recommended that the Climate Change Board will pause while the Working Group is operating. It is recommended that the Climate Change Working Group will meet monthly to carry out its role of updating the CCS, and while it is operating, it will receive the quarterly action updates of the Climate Change Board to inform its work. It is anticipated that six meetings of the Working Group would be required to oversee the CCS update. Each meeting would focus on a specific topic, although they would also consider any relevant information. 6.11 The timeline for the update of the CCS is: Route Map to Net Zero report and CCS update report December 2024 New Draft Climate Change Strategy report August 2025 Public consultation on draft strategy ends October 2025 Final Climate Change Strategy report December 2025 7. 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 Page 199
Page 200
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. 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 This report has no additional financial expenditure for the Council. However, there are significant challenges to fund decarbonisation actions as well as significant opportunities to lever in funding for these. Whenever possible, the update to the Climate Change Strategy should include annual financial estimates of actions to decarbonise the activities of the Council. Page 200
Page 201
(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. There is a risk that the Council’s statutory obligations and targets will not be met if the actions within the Climate Change Strategy 2020-30 are not progressed as a priority. (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. There is no staffing resource to progress beyond high level work on developing Just Transition bids and delivering the Socio-economic benefit Fund and this will require further consideration in the future. (f) Property The development of decarbonisation projects will impact on corporate buildings, council landholdings and the learning estate. 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. (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. Page 201
Page 202
(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. 8. CONCLUSION 8.1 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. 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. 8.2 Groundwork has been completed in some areas and is underway in others to respond to the need for improvement. Significant funding opportunities lie ahead to progress these decarbonisation projects. 8.3 The Climate Change Strategy will require to be updated in 2025. This will be overseen by an Officer Member Working Group which will amend the net zero target of 2030 to at least align to national targets. Representatives from the member body will reflect the political balance of the Council and comprise of Members of the parent committee (Economic Development & Infrastructure). Authors of Report: Rod Lovie, Principal Climate Change Strategy Officer George Gunn, Climate Change Strategy Officer Background Papers: Ref: Page 202
Page 203
Climate Change Plan and Routemap to Net Zero 2024 update Moray Council Climate Change Strategy 2020-2030 Item 15. Page 203
Page 204
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 204
Page 205
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 205
Page 206
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 206
Page 207
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 207
Page 208
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 208
Page 209
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 209
Page 210
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 210
Page 211
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 211
Page 212
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 212
Page 213
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 213
Page 214
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 214
Page 215
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 215
Page 216
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 216
Page 217
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 217
Page 218
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 218
Page 219
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 219
Page 220
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 220
Page 221
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 221
Page 222
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 222
Page 223
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 223
Page 224
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 224
Page 225
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 225
Page 226
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 226
Page 227
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 227
Page 228
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 228
Page 229
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 229
Page 230
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 230
Page 231
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 231
Page 232
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 232
Page 233
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 233
Page 234
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 234
Page 235
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 235
Page 236
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 236
Page 237
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 237
Page 238
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 238
Page 239
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 239
Page 240
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 240
Page 241
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 241
Page 242
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 242
Page 243
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 243
Page 244
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 244
Page 245
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 245
Page 246
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 246
Page 247
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 247
Page 248
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 248
Page 249
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 249
Page 250
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 250
Page 251
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 251
Page 252
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 252
Page 253
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 253
Page 254
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 254
Page 255
51Climate Change Plan and Route Map to Net Zero 2024 updatePage 255
Page 256
Page 256
Page 257
APPENDIX 2 Climate Change Strategy Update – Process and Scope of Work 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). 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 (SSC) for 2020 -30. The strategy set a net zero target of 2030 and required that its officers and elected members work with others 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. To ensure the Strategy remains relevant and accounts for ongoing national policy development, it is subject to review. Therefore, the Strategy and its targets now require updating to reflect the progress that has taken place over the last three years, the greater understanding of the decarbonisation pathway the Council is on, and the changes in national policies around Climate Change. It is recommended that a member and officer Climate Change Working Group be established to oversee this CCS update. A similar arrangement was beneficial during development of the original CCS and can provide useful in-depth oversight, influence, and information around key areas of policy development. To set the context of the update it is important to: Define the scope of work for the CCS update 2025 Define the terms of reference for the Climate Change Working Group Set out the process for engagement to underpin the update of the strategy. Item 15. Page 257
Page 258
APPENDIX 2 The scope of work for the Climate Change Strategy update 2025 The CCS should detail how the Council will progress its statutory duties under three key themes: Reducing carbon emissions (mitigation) Being ready for climate impacts (adaptation) and Acting in a sustainable manner (sustainable development and biodiversity) Content Statutory guidance on the expected content of LA Climate Change Plans is being developed to support the Public Bodies Climate Change Duties. These are likely to recommend LA Climate Change Plans should cover: Corporate emissions - activities and the emissions generated by the Council, including relevant scope 3 emissions Area-wide emissions - many of which will lie outside the control of the LA but within their sphere of influence. Corporate adaptation – main hazards, vulnerabilities and exposure; key risks and opportunities in relation to assets, service delivery and fulfilment of LA functions; key partners and stakeholders Area-wide adaptation – main hazards, vulnerabilities and exposure; key risks and opportunities for the LA area (or wider region if appropriate) and wider priorities (e.g. economic development); key partners and stakeholders Corporate sustainability – consideration of wider environmental, social and economic issues, beyond GHGs and net zero. Contribution to and alignment with the National Performance Framework and UN SDGs. Area-wide sustainability - wider environmental, social and economic issues; LA area or regional issues such as air and water pollution, contaminated or abandoned land or property, health, areas of deprivation, inequalities. Any specific issues, challenges and opportunities. How the LA fits into the national picture, contribution to and alignment with the National Performance Framework and UN SDGs. The strategy should be supported and implemented by a series of targeted policies, route maps and action plans which lay out the more granular detail for relevant assets, functions and activities. Many of these plans are already created so the overarching LA Climate Change plan will be made up of the Climate Change Strategy and a suite of additional documents including but not exclusively: Zero Emission Fleet Replacement Strategy (April 2024) Biodiversity Strategy (in production) Local Development Plan (in production) Local Heat and Energy Efficiency Strategy (August 2024) Coastal Adaptation Plan for Moray (in production) Heat Network legislation Page 258
Page 259
APPENDIX 2 Regional Just Transition Plan (in production) Regional Spatial Strategy (in production) Regional Climate Change Strategy (in development with Scottish Climate Information Service (SCIS) and Moray CAN) Other key issues to be addressed through the updated strategy include: Distinction between the internal Moray Council strategy and forthcoming area- wide strategy. Set clear boundaries to the strategy including Scope 3 emissions Embedding a climate adaptation strategy and action plan within the CCS, aligned with SNAP 3 Embedding Sustainable Development Priorities and actions within the CCS Aligning the CCS with the forthcoming Biodiversity Strategy Targets A decision point in 2025 was built into the Climate Change Strategy (CCS) 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. It is proposed to take this decision early as part of the scope setting for the Climate Change Strategy update 2025. In April this year the Scottish Government scrapped the national target of cutting emissions by 75% by 2030 but maintained the long-term target to reach net zero by 2045. A recent audit commission report (2022) found that 28 of the 32 Councils in Scotland had declared a climate emergency and 26 Councils had a target for their own emissions. Most of these Councils have targets to reach net zero by 2045. The latest Moray Council annual Public Bodies Climate Change Duties Reports shows a reduction in carbon emissions. However, the rate of reduction is not enough to reach the 2030 target. The draft RMNZ report 2022/23 highlights the need for action at pace and greater resourcing if the pace of decarbonisation is to be increased. This is unlikely within the current finance arrangements although officers have commissioned high level work exploring potential projects for Just Transition funding for Moray wide projects. The areas of building heat and fleet are the largest areas of emissions for Moray Council and among the most difficult to reduce. Relevant strategies on these areas currently use national decarbonisation targets and these legislative deadlines are being used in calculating Moray Council carbon emissions reductions. Savings from other areas and carbon sequestration will not take overall carbon emissions down to net zero by 2030. In terms of LA corporate emission reduction targets there are various national policy targets and ambitions in place, for example around heat in buildings, fleet decarbonisation and the circular economy. Public Bodies Climate Change Duties Page 259
Page 260
APPENDIX 2 guidance is when setting their corporate targets LAs should, as best practice, align to these; and could show greater ambition where this is felt to be achievable. Therefore, an overall net zero target for scopes 1 and 2 should be no later than 2045, earlier where possible. Page 260
Page 261
APPENDIX 2 The legislative deadlines for different areas and how these are influencing our current and future activities are: Building Heat Legislative Deadlines Comments 2038 Scotland has zero direct emissions from public buildings Moray Council has a large and diverse building portfolio which will be difficult to transition to decarbonised heating. While strides have been made to reduce carbon, sell surplus property, and retrofit remaining buildings, the difficulty of retrofitting buildings at speed and within restricted budgets are shown in the projections which will not see all buildings decarbonised by 2030. At present, the legislative deadline of 2038 is being used in calculating carbon reductions. Building Electricity Legislative Deadlines Comments 2030 Grid Decarbonisation - The equivalent of 50% of the energy for Scotland's heat, transport and electricity consumption to be supplied from renewable sources. Carbon emissions from electricity have been decreasing and will continue to decrease due to the increased national use of renewables. Moving to electrical heating systems in buildings will greatly reducing carbon emissions compared to fossil fuel. However, this will also require the use of more electricity so our overall carbon emissions from electricity will be a balance over time influenced by overall grid decarbonisation and increased electricity consumption Transport Legislative Deadlines Comments 2025 New petrol and diesel light commercial vehicles phased out of Scottish public bodies’ procurement 2030 New petrol and diesel large commercial vehicles phased out of Scottish public bodies’ procurement. The recent Fleet Decarbonisation Strategy adopted national targets for our fleet decarbonisation journey. These were seen to be challenging due to financial pressures and the immaturity of the market for low carbon large fleet vehicles. However, this also means that we will still have fossil fuel vehicles operating out their lifespan well after the deadline to stop purchasing new ones, meaning the projected target for zero emissions from fleet is well beyond 2030. Waste Legislative Deadlines Comments 2025 Scotland-wide ban on landfilling biodegradable municipal waste The EfW plant in Aberdeen will see Moray Council meeting this deadline. However, our relatively high recycling levels makes it difficult to source funds for additional recycling and reuse facilities. Operating Emissions Legislative Deadlines Comments Page 261
Page 262
APPENDIX 2 A variety of guidance on commuting, procurement etc. The deadline would be national net-zero target of 2045 Additional aspects such as scope 3 emissions (emissions from procurement etc) will soon have to be included into our net zero projections. The recommendation is that the Climate Change Working Group should update the Climate Change Strategy by moving away from the 2030 target and adopt decarbonisation targets for each area within the council and track these individually. These should at least align to national targets and could show greater ambition where this is felt to be achievable in terms of financial availability and technical practicality. This will mean a backstop date of 2045 for overall net zero but could include interim targets for each area as appropriate. When setting any interim targets, the dates and emission reductions should be set using the best available data and knowledge. Page 262
Page 263
APPENDIX 2 Terms of reference for the Climate Change Working group It is proposed that the new working group would follow a similar structure to existing council working groups, with membership including: The Depute Chief Executive (Economy, Environment and Finance) Heads of Service (as appropriate) The Climate Change Team Nominated representatives from the member body Relevant operational officers from key sections as required If the Working Group proposal is approved, officers will seek nominations for representatives fromthe member body. Membership will be established to reflect the political balance of the Council and comprise of Members of the parent committee (Economic Development & Infrastructure). The Climate Change Working Group will not replicate or work in addition to the Climate Change Board. It is recommended that the Climate Change Board will pause while the Working Group is operating. It is recommended that the Climate Change Working Group will meet monthly to carry out its role of updating the CCS, and while it is operating, they will receive the quarterly action updates of the Climate Change Board to inform its work. Four new theme groups, led by climate change officers, will be established to address specific themes within the Climate Change Strategy update (See Figure 1). These themes are: Energy and buildings Transport and travel Operating emissions Area based emissions Officers working on relevant actions will be invited to join these theme groups and Climate Change officers will collect information on possible actions.. This will eliminate the need for individual officer action update reporting. Climate change officers will compile reports for the Working Group based on these theme group discussions. It is envisaged that much of this work of the theme groups will be through email, but it would require at least two workshops of each theme group. Climate Change Working Group Energy and Buildings Theme Group Transport and Travel Theme Group Operating Emissions Theme Group Area Based Emissions Theme GroupFigure 1. Proposed structure of Climate Change Working Group and theme groups. Page 263
Page 264
APPENDIX 2 Theme group Focus Energy and buildings Energy consumption Heat consumption Heat decarbonisation Energy efficiency Renewable energy Adaptation Opportunities for biodiversity enhancement Transport and travel Fleet decarbonisation Active travel promotion Sustainable travel hierarchy Commuting Adaptation Opportunities for biodiversity enhancement Operating emissions Procurement Waste Homeworking Education and engagement Adaptation Opportunities for biodiversity enhancement Area Based Emissions Moray wide emissions reduction projects Moray CAN regional climate strategy link Strategic Planning Adaptation Opportunities for biodiversity enhancement Each theme group will be asked to carry out the following tasks: Collate information on appropriate decarbonisation pathways, existing strategies and relevant actions with appropriate staff Identify existing governance and reporting processes for these strategies and action plans Suggest targets and interim targets. Link these to financial estimates and any additional requirements needed to meet targets Identify barriers to progress and suggested solutions to address these Set out proposals for clear governance and monitoring of actions. This should consider inclusion of actions in service plans. The area of governance and monitoring will remain with the working group, though officers in the action groups will be requested to provide feedback where appropriate. It is anticipated that six meetings of the Working Group would be required to oversee the CCS update. Each meeting would focus on a specific topic, Page 264
Page 265
APPENDIX 2 although they would also consider any information from the theme groups. The order of topics for the six meetings could be: 1. High level pass of tasks and process. Also, a focus on Governance and Monitoring 2. Transport and travel 3. Energy and buildings 4. Operating emissions 5. Area based emissions 6. Sustainable development, cross cutting and co-benefits Page 265
Page 266
APPENDIX 2 The engagement plan to underpin the update of the strategy. The council’s Climate Change Engagement Strategy sets out the principles, aims and objectives that will act as a guide throughout the CCS update engagement: Possible Internal Engagement - Identify key services: action holders and potential new action holders Group Engagement Purpose Method Climate Change Working group Share information, raise awareness, steer priorities and objectives, explore opportunities and barriers Initial presentation: existing strategy vision Micro workshops on topics/ workstreams (e.g. governance, mitigation, adaptation, nature, sus dev) Key services Learning, share information, raise awareness, explore opportunities and barriers, refine and agree action plans Officer/ management: workshops Operational staff: possibly Focus groups Sections not included in theme groups Ensure all of Council is included eg Health & Social Care, Wider staff group and those not online Share information, raise awareness, Inform Engagement opportunities may include: Suggestion tree at depots Pop up coffee and chat Connect Objectives Understand communicate the change and how it relates to each relevant group Participate involve stakeholders in the design/shaping of the network Act inspire positive change, so that (particularly community) groups feel supported and empowered to get involved Principles Positive uplifting, motivating, relatable, co-benefits Putting people first communities play a key role Participative conversation and discussion Just understanding and engaging with those most affected Inclusive equal and accessible engagement Evidence based using sound science, improving engagement through active reflection Open and transparent ensuring our actions are seen and understood Page 266
Page 267
APPENDIX 2 Elected Members Briefing Committee report Possible External Engagement Group Engagement Purpose Method CPOG/CPB Engage around regional strategy Engage with interested parties To consult on draft strategy Workshop (Jan-May) Moray CAN Engage around regional strategy Engage with interested parties Survey Monkey (climate week) Mentimeter (climate week) Workshop (Jan-May) Wider public To consult on draft strategy TBD Formal consultation Young people To consult on draft strategy TBD The above engagement list is aspirational and will be dependent on internal capacity. Engagement will be prioritised to those groups and methods that have priority. Timeline November 2024 Public Sector Bodies Climate Change Duties report December 2025 Route Map to Net Zero report and CCS update report August 2025 New Draft Climate Change Strategy report Mid-October 2025 Public consultation on draft strategy ends December 2025 Final Climate Change Strategy report Page 267
Page 268
Page 268
Page 269
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: INFORMATION REPORT: ACCOUNTS COMMISSION REPORT – TRANSFORMATION IN COUNCILS BY: DEPUTE CHIEF EXECUTIVE (EDUCATION COMMUNITIES AND ORGANISATIONAL DEVELOPMENT) 1. REASON FOR REPORT 1.1 To inform the Council of the findings of the Accounts Commission presented in their Transformation in Councils report published on 1 October 2024. 1.2 This report is submitted to Council in terms of Section II (19) of the Council's Scheme of Administration relating to any new policy matter which does not fall within the terms of reference of any Committee. 2. BACKGROUND 2.1 The Accounts Commission report on Transformation in Councils (Appendix 1) is part of a series of reports to provide an independent overview of local government and provide insight into how the sector is responding to a key challenge facing local government. 2.2 The report looks at the role that transformation and collaboration can play in helping councils to achieve financial sustainability. It recognises that councils have never faced such a challenging financial situation, placing vital public services at risk and identifies an urgent need for local government to transform 2.3 While noting that there is no single definition of transformation, the report sets out that it is about radically changing how councils operate and deliver services to achieve planned outcomes in a financially sustainable way. 2.4 The key messages emerging from the report are: 1. Councils need to urgently transform how they deliver services as the financial and services challenges continue to deepen but councils face barriers and progress has been slow Page 269
Page 270
2. A sector-led Transformation Programme has been put in place by the Society of Local Authority Chief Executives (Solace) and the Improvement Service but this is at an early stage and more clarity is needed on timescales for achieving outcomes and there are risks around workforce capacity and skills to realise ambitions 3. Councils cannot deliver transformation alone, it will be more effective through collaboration with Scottish Government, Community Planning and third sector partners to achieve consensus on a longer term vision. 4. Public and political support is critical and public engagement and communication campaign should be undertaken. Councils should prioritise workforce capacity and capability to match the ambition and pace needed to transform. 2.5 This message of transformation for future financial sustainability is one that the Council has recognised and has reflected in the Moray Transformation Strategy which also prioritises progressing at pace. However, the difficulty of doing so while also delivering “business as usual” in such a difficult environment is recognised by the Accounts Commission report as exceptionally difficult circumstances. Nonetheless, councils are urged to commit to the long term transformation work to sustain a programme of transformation. 2.6 The findings of the Report will be taken account of and relevant actions and learning from it built into the developing projects within the Council’s transformation work and will be reflected in the next iteration of the Council’s Transformation Strategy. 3. 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 directly from this report, although to increase pace and scale of transformation would require investment, which will be addressed in reports on proposed developments to the Council’s transformation work (d) Risk Implications: None (e) Staffing Implications: None (f) Property: None Page 270
Page 271
(g) Equalities/Socio Economic Impact: None (h) Climate Change and Biodiversity Impacts: None (i) Consultations: None 4. CONCLUSION 4.1 This report draws to the Council’s attention the report from the Accounts Commission on Transformation in Councils. Author of Report: Denise Whitworth, DCE ECOD Background Papers: Ref: SPMAN-1108985784-1034 / SPMAN-1108985784-1035 Page 271
Page 272
Page 272
Page 273
Prepared by Audit Scotland October 2024 Transformation in councils Sector-led change and collaboration to achieve financial sustainability Page 273
Page 274
2Transformation in councils Contents Key messages 3 Commission expectations 5 Introduction 6 1. Councils must transform to become financially sustainable 7 2. Urgent action is required to progress transformation 12 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. Audit team The core audit team consisted of: Derek Hoy, Lucy Jones, Lorna Munro, Becki Lancaster and Niamh Pritchard under the direction of Blyth Deans. Page 274
Page 275
3Key messagesKey messages Key messages 1 As financial and service demand challenges continue to deepen, councils know they urgently need to transform how they deliver services. Transformation in local government has been happening for decades, but a step change is now urgently required. Councils face barriers to transformation and progress has been slow, but reform is vital and must happen at greater pace and scale. Not doing so puts the sustainability of vital public services at risk. 2 To meet these challenges, the Society of Local Authority Chief Executives (Solace) and the Improvement Service have put in place a sector-led Transformation Programme. This is focused on developing proposals for a future operating model for councils through short-term transformation projects, dialogue with public sector partners and a forum for developing leadership capabilities. The Transformation Programme is a positive development representing a radical change to how councils work towards transformation. But the work is at an early stage. More clarity is needed on the timescales for achieving outcomes and there are significant risks around workforce capacity and skills to realise ambitions. 3 Councils cannot deliver transformation alone and it is essential that the Scottish Government and Community Planning and third sector partners support the transformation of local services through more effective collaboration. Achieving consensus on the longer-term vision for local services is crucial. Faster progress in delivering the aims of the Verity House Agreement (VHA) should also aid the development and delivery of sector-led and local transformation work. Page 275
Page 276
Key messages 4 4 Public and political support is critical. All elected members must exercise their responsibilities to give clarity on the longer- term vision and ambitions of the councils they represent. A coordinated sector-wide public engagement and communication campaign should be undertaken to help gain backing from communities. To deliver on the change now urgently needed, councils must prioritise both capacity and capability in their workforces to match the ambition and pace needed to transform. This is highly challenging given the significant pressures they face to deliver day-to-day services. Page 276
Page 277
5Commission expectations Commission expectations The Commission recognises the challenging situation councils and their public and third sector partners face and welcomes the Transformation Programme. It sees the potential of sector-led transformation work, alongside other local approaches, to help councils achieve financial sustainability and deliver better outcomes in the medium to long term. Effective collaboration is needed across the sector to realise that potential. While this work is at an early stage, the Commission urgently calls for the pace to be accelerated. In the next 12 months we expect: • the local government sector, the Scottish Government and councils’ Community Planning and third sector partners to make significant progress in agreeing a future operating model for councils and how council services can be sustainably delivered according to local circumstances • the local government sector to initiate an effective coordinated public engagement campaign to obtain agreement on the future operating model for councils, how it will be achieved, and the impact this will have on communities • Solace and the Improvement Service to sustain momentum of the Transformation Programme and be clear on the actions needed to successfully deliver across the different workstreams. This includes more clarity on timescales, costs, resources, outcomes, outputs and impact • the Convention of Scottish Local Authorities (COSLA) and the Scottish Government to make sustained progress on the commitments within the VHA including to agree a fiscal framework, an accountability and assurance framework and to conclude the Local Governance Review • individual councils to prioritise and urgently progress the delivery of their local transformation ambitions and engage effectively in sector- led transformation activity, securing political backing and committing resources. We will be auditing local transformation work through year three of our Best Value reporting programme that starts in October 2024. Page 277
Page 278
6Introduction Introduction 1. This report is part of a series of outputs produced by the Accounts Commission that, taken together, provide an independent overview of the local government sector. It provides an insight into how the sector is responding to a key challenge currently facing local government. The report follows on from three other outputs in the series published earlier in 2024: Local government in Scotland: Financial bulletin 2022/23, Local government budgets 2024/25 and a Local government blog on benchmarking and performance. It also draws on local Best Value audit work and the Accounts Commission’s wider work programme. 2. This report looks at the role that transformation and collaboration can play in helping councils to achieve financial sustainability. The work undertaken to date in the series has brought financial sustainability into sharp focus. This report provides an opportunity for the Accounts Commission to assess progress with sector-led approaches to transformation. It will set the scene for the analysis of plans for transformation at an individual council level that will be captured as part of our Best Value thematic focus in the 2024/25 annual audit, with the national Best Value thematic report on transformation scheduled for 2026. 3. Financial sustainability is an issue that extends across the whole public sector. This report complements work planned by the Auditor General for Scotland on the Scottish Government’s approach to fiscal sustainability and reform due for publication later this year. Local government in Scotland: Financial bulletin 2022/23 provides a high- level independent analysis of the financial performance of councils during 2022/23, including funding and expenditure, year end financial position and the financial outlook. Local government budgets 2024/25 examines the 2024/25 budgets set by councils, including analysis of anticipated budget gaps and actions to set a balanced budget. Page 278
Page 279
71. Councils must transform to become financially sustainable 1. Councils must transform to become financially sustainable Councils face significant financial sustainability challenges, placing vital public services at risk 4. We reported last year in our Local government overview 2023 that councils have never faced such a challenging situation, with increasing demand, workforce pressures and council budgets under severe strain. Our audit work over the past year has continued to show the significant financial sustainability challenges councils face, placing vital public services at risk: • Our most recent assessment of councils’ financial position and outlook, in our Local government in Scotland: Financial bulletin 2022/23, was that the financial outlook is extremely challenging and presents real risks for the future. • Our Local government budgets 2024/25 report found that councils have had to make difficult budget-setting decisions for 2024/25 to bridge a gap of at least £585 million between their anticipated expenditure and the funding and income they expect to receive (the ‘budget gap’). The budget gap is estimated to rise to £780 million by 2026/27, which represents five per cent of councils’ revenue budget. • Our blog on performance reporting included findings from the latest Local Government Benchmarking Framework annual report that shows the pace of improvement in council services is slowing. 2022/23 is the first year that the rate of decline in indicators has overtaken the rate of improvement. • Our Best Value work in the last year highlighted the risk to financial sustainability and the need for transformation. 5. The unprecedented financial and service demand pressures mean there is an urgent need for the local government sector to transform how it operates if it is to sustainably maintain services. 6. We recognise that there is no single, concise definition of transformation in a local government context. Transformation means different things for different councils, and individual councils must have the flexibility to transform their service delivery appropriate to the needs of their communities. We have developed some principles (Exhibit 1, page 8) to help guide all councils around our expectations for transformational activity at a council level, while allowing for the flexibility required. We expect all councils to follow those principles. Page 279
Page 280
1. Councils must transform to become financially sustainable 8 Exhibit 1. Transformation principles Transformation is about radically changing how councils operate and deliver services to achieve planned outcomes in a financially sustainable way. Source: Accounts Commission Vision Have a clear vision that sets out the intended end state of any transformation activity, focused on: • delivering large-scale recurring savings or generating income for the council, contributing to its longer-term financial sustainability • improving outcomes for citizens in line with council priorities • taking a whole-system approach to see and realise opportunities both within councils and more widely • meeting the needs of the people who use services and reduce inequalities • focusing on preventative activity, where applicable, to reduce the demand for services and to make them sustainable in the longer term. Planning • Be clear on the scale of the change required and ensure transformation plans are sufficiently ambitious to credibly respond to the scale of the challenge. • Commit staff with appropriate skills, time and resources to ensure transformation occurs at the scale and pace required and that there is enough capacity for the changes to be embedded. • Be clear about the timescales, costs, outcomes, and anticipated impacts of transformation projects. • Show urgency and progress projects at pace without compromising appropriate governance on projects. Governance • Have a clear process for monitoring, evaluating and reporting progress. • Put in place effective governance and escalation processes so that the transformation activities are well managed in their own right, but also able to be given priority alongside other business-as-usual activities. Collaboration • Develop better working relationships with communities and/or partners to achieve a sustainable model of service delivery. • Actively consider the opportunities offered by regional or national sectoral collaboration, or by integrating services locally with partners, or by supporting individuals and communities to achieve desired outcomes in place of an existing service. • Learn from good practice across Scotland and beyond. Innovation • Implement new ways of thinking, including innovation, creativity and a desire, willingness and action to change and do things in new and different ways that achieve the outcomes needed. • Embed the right culture and behaviours to manage change and help maximise the contribution of all the team. Page 280
Page 281
1. Councils must transform to become financially sustainable 9 7. As we stated in our Local government overview 2023, the Accounts Commission recognises how challenging it is for councils to work on three planning horizons: to continue to deliver services here and now, to identify and make improvements in the short term and to plan and implement longer-term radical change. 8. Local government transformation is not a new concept and work in this area has been happening for decades. But a step change is needed, and the scale and pace of transformation must increase significantly. For example, that could be new innovative approaches to service delivery, reconsidering which services could be more effectively delivered by other partners, or identifying how economies of scale could be achieved by sharing services. 9. Evidence from our Best Value reporting work shows that transformation activity across Scotland’s 32 councils is varied. Some councils have made very little progress towards transformation. Others have shown some positive examples of innovative activity, but generally the scale and pace of transformation must increase. 10. Councils have generally been effective in identifying and delivering efficiency savings and have continued to deliver services in recent years. But the scale of the challenge is significant and relying on efficiency savings alone to stay within budget is not sustainable. Ring-fenced and directed funding also makes it difficult for councils to identify opportunities to make the level of savings required through efficiencies alone. Overall, there is not enough evidence of truly transformational change taking place at a local level to address the financial sustainability challenges facing councils. 11. Councils must ensure they fully engage in transformation and do all they can to deliver on their transformation ambitions. Our Best Value reporting shows the level of ambition to transform services is varied across Scotland’s councils. Where there is a good level of ambition there is, in some cases, a gap between that ambition and the councils’ ability to meet it. 12. For example, we reported that Orkney Islands Council needs to show greater urgency in a range of areas, including medium-term financial planning, management of capital projects, and its approach to tackling climate change, if its plans for transformation are to be successful. 13. We also reported that Moray Council must accelerate the pace and ambition of its plans for transformation and show clear, sustained evidence of this transformation. We highlighted the need to set out clear deliverables, deadlines and lines of accountability, and to ensure strong financial management, accurate forecasting and budget monitoring. We also acknowledged long-standing issues with recruiting senior staff, and the impact that has on the council’s capacity to deliver its transformation programme. Page 281
Page 282
1. Councils must transform to become financially sustainable 10 14. Some councils have made good progress in establishing and delivering against their plans for transformation. Dundee City Council has embarked on a lengthy transformational programme, which is now integrated within the Council Plan and has delivered £147 million in savings. It is focusing on large-scale transformative changes including property rationalisation, digital service provision, service re-design, shared services and payments and income generation. This should align well with the sector-led transformation activity covered in Part 2 of this report. 15. We know there are significant barriers that impact on councils’ ability to deliver services efficiently and progress their transformation ambitions (Exhibit 2, page 11). Some of these barriers are external and not within councils’ control. Others are internal or partially internal, and councils have at least some control over how they overcome or remove those barriers and should do all they can to do so. 16. These barriers partly account for the varied progress made so far across Scotland’s councils. It is vital that councils show real ambition for transformative change and prioritise the capacity and capability to meet that ambition at the pace and scale required. Elected members must support officers in progressing transformation. Where appropriate, councils should look to other councils, public sector partners and industry for transformation best practices. 17. The scale and nature of the challenge means that councils cannot deliver sustainable services on their own. It is only by working more collaboratively that councils and their local partners, communities and the third sector will be able to provide sustainable local services and deliver a significant programme of national reform to tackle issues such as climate change, child poverty and inequalities. Wider public service reform activities may change the context within which council services are delivered. It is important that councils also consider this within their transformation planning. 18. In our recent Integration Joint Board (IJB) finance and performance overview 2024 we highlighted that the Scottish Government, councils, IJBs and health boards all need to work together to deliver sustainable health and social care services. That point applies more widely around sustainable council services, and it is vital that councils’ Community Planning and third sector partners support the transformation of local services. Page 282
Page 283
1. Councils must transform to become financially sustainable 11 Exhibit 2. Barriers to transformation Source: Audit Scotland Ring-fenced funding and protected services Funding allocated to national priorities can limit the decisions councils can make about how funds are used at a local level to meet local need. Funding for children’s services, education and adult social care has been protected and increased due to national policy directives. Remaining services have consequently borne a disproportionate level of spending reductions. Short term-ism Preventative approaches to reduce the demand for services in the longer-term have not been prioritised due to the focus on meeting the current demand for services. Cost of Living Financial hardship is deepening for some people who use council services, evidenced by growing levels of rent arrears and homelessness applications. This places additional pressure on councils’ finances. Demographic changes Changes in the structure of the population are impacting demand and the type of services needed. For example, an ageing population increases demand on social care services, while some areas are experiencing falling school rolls. Workforce pressures Skills gaps, vacancies, absences, an ageing workforce and lack of retention are well known issues that continue to worsen. Workforce gaps are now seen in areas previously not impacted, such as statutory professional roles. Lack of coordinated decision- making Public sector bodies can often make decisions in isolation from their partners, which can impact the demand on other public services. There is also tension in relation to policies set by central government but delivered by councils. Public perception or push back on decisions Some councils are experiencing significant resistance when seeking to reduce services to balance budgets. Effective public engagement, including timely consultation with communities, is inconsistent and must improve. Risk appetite There is a low appetite for risk in some councils, where transformational activity is held back by fear of failure. Not every transformational change will succeed, but not progressing radical transformation is a greater risk. Increased service demand Demand for services, such as social care and housing, has increased. This can limit councils’ capacity to focus on transformational activity. Increasing costs The cost of materials and services has increased, affecting construction projects and social care in particular. Willingness and capacity of the council (both officers and elected members) to engage in and properly resource transformative activity. Page 283
Page 284
122. Urgent action is required to progress transformation 2. Urgent action is required to progress transformation Solace and the Improvement Service are in the early stages of delivering a Transformation Programme for councils 19. The main sector-led piece of work currently under way to help councils reform how they deliver services is the Transformation Programme launched by Solace and the Improvement Service in September 2023. It is focused on developing proposals for a future operating model for councils and options for the delivery of sustainable council services. The programme builds on the model that was proposed in the Delivering a future for Scottish Local authorities report published by the Improvement Service in October 2022. 20. The Transformation Programme is structured around the six key anchors identified in that report as the building blocks to transformation. Each anchor is sponsored by a council chief executive. Sitting below the anchors are three workstreams, which contribute to one or more of the anchors (Exhibit 3, page 13). 21. The Transformation Programme is still in the early stages, but good progress has been made in engaging with most councils and a small number of other public service bodies on the programme. 22. There is a basic outline of, and justification for, the programme on the Improvement Service website. But generally, it is not yet clear how the public will be engaged at a sector level on how council services should be reformed. 23. Financial sustainability is one of the outcomes of the programme, but it is currently unclear what level of contribution the programme will make towards it. We expect that the financial benefits will become clearer as the programme moves from the planning and discovery phase to implementation. Page 284
Page 285
2. Urgent action is required to progress transformation 13 Progress against the Transformation Programme workstreams is at an early stage Short-term projects 24. Work began on six focused 12-to-18-month projects in January 2024. These are aimed at helping councils achieve savings and identify longer- term solutions and set the foundation for collaboration and joint working across local authorities . 25. The six short-term projects are: • Collaboration within the local government sector on procurement . • Analysis of local government’s statutory and discretionary services. Exhibit 3. Transformation Programme structure Note 1. Including the Leadership Practitioner Forum. Source: Audit Scotland Anchor 1. Unlocking community action Anchor 2. Tackle inequality and meet the needs of all citizens Anchor 3. Enable a functioning, trusted local and central government relationship Anchor 4. Design for people’s needs Anchor 5. Create digital, design and technology- enabled transformation Anchor 6. Lead council and cross-sector partnerships Workstream Officer-led conversation on public sector reform Workstream Short-term local government transformation projects Workstream Building capacity to lead and deliver transformation1 Page 285
Page 286
2. Urgent action is required to progress transformation 14 • The full implementation of Crerar for Local Government. • Development of a Digital To-Be State for Scottish Local Government. • Identification of new digital shared services that could be delivered nationally or regionally . • Repository of examples of active communities/participatory design. 26. These projects are at an early stage of development. Volunteers were identified early and they are progressing through the discovery phase to set goals and engage subject matter experts. Projects leads now need to develop and finalise business cases for each project to provide clarity on timescales, resources needed and impact over the short, medium and long term. Although the projects are short term, it is likely that some could take years to implement and for the benefits to be realised, particularly if legislative changes are required. Building capacity to lead and deliver transformation 27. Council chief executives have established a Leadership Practitioner Forum aimed at aspiring chief executives, directors and heads of service. It has been set up to facilitate collaboration on the Transformation Programme anchors and workstreams and to develop leadership capabilities for the future. 28. Thirty of the 32 councils have engaged to date. Five meetings have taken place, covering the purpose of the group, key challenges and opportunities, progress on other workstreams, the VHA and budget position, and the local government workforce. 29. The forum is a welcome development and momentum and engagement appear to be strong, but it is too early to see its impact. Councils should be clear on the lifespan of the forum, its intended specific outcomes in relation to developing leadership capabilities, and how success will be measured. Officer-led conversation on public sector reform 30. This workstream aligns with the VHA and focuses on the need for behaviours and actions to change to collaborate effectively on reform. It has a long-term ambition to implement radical public sector reform over the next three to five years. Twenty-eight of the 32 councils have engaged so far. 31. This workstream organised a round-table discussion in March 2024 on ‘Delivering a Roadmap for Public Service Reform in Scotland’. There was representation at chief executive/chief officer level from local government (including COSLA), the Scottish Government, NHS, Scottish Fire and Rescue and the enterprise agencies. A follow up discussion is planned for the autumn. The Crerar Review, published in 2007, examined the current systems of audit, regulation, inspection and complaint handling of public services in Scotland. It made a number of recommendations around better coordination of scrutiny, more emphasis placed on self assessment and that the number of scrutiny bodies should be reduced. Page 286
Page 287
2. Urgent action is required to progress transformation 15 32. Local authority chief executives have demonstrated a clear desire to work with other public sector agencies and have taken steps to initiate dialogue with partners. It remains unclear how the councils and their partners intend to work collectively with shared ownership to make this happen. There must be clarity on how they will agree a vision and timeline for transformation across the sector. 33. As we state in paragraph 18, it is essential that councils’ Community Planning partners support the transformation of local services. There is a role for the Scottish Government, through its commitment in the VHA, to ensure that those public bodies that contribute to Community Planning play their part. There are risks to the overall delivery of the Transformation Programme 34. There are strategic risks to progressing transformation, which we discuss in paragraphs 43–49. But there are also practical risks to the successful delivery of the Transformation Programme. Programme, workstream and project documentation is in place for most activity but there is not yet sufficient detail on timescales, costs, resources, outcomes, outputs and impact on the overall programme aims. These could provide reassurance and clarity for councils’ medium to longer-term planning. 35. The Improvement Service is currently leading the programme, with the expectation that the role of councils develops as work progresses into the implementation phase. The Improvement Service would continue its programme management office function. The resource requirements are so far unquantified, with council staff supporting the programme on top of their day jobs. Councils should consider how to allocate staff resources to best build momentum with the programme and to minimise the risk of missing targets. 36. There are several facilitators of transformation associated with the Transformation Programme that have still to be progressed. There is a need for urgent action on these facilitators to minimise the risk of slow or no progress: • Preventative approach – there is the opportunity for councils to minimise demand through a ‘preventative approach’ by developing a deeper understanding of lived experience in the community, with the Transformation Programme anchors one, two and four aimed at engaging communities. • Innovation culture (Helsinborg Innovation) – fostering a culture of innovation and improvement, where new ideas are encouraged, tried and evaluated before being rolled out in a timeous manner. This was a key principle identified in the Delivering a future for Scottish local authorities report. This will need to be embraced and embedded as the Transformation Programme moves beyond the discovery phase if transformational change is to be successfully achieved at pace. Page 287
Page 288
2. Urgent action is required to progress transformation 16 • Whole public service approach – delivery of services to ensure demand is supported in the right place at the right time, with a focus on improving the effectiveness of prevention services. Examples include support for affordable sustainable housing through planning processes, supporting public health initiatives and bolstering economic development opportunities and initiatives. Anchor six of the Transformation Programme is aimed at engaging within councils and other public sector partners. COSLA and the Scottish Government must take action to facilitate sector-wide transformation Slow progress on the commitments in the Verity House Agreement (VHA) poses a risk to transformation 37. The VHA between COSLA and the Scottish Government was designed as a reset of the relationship between central and local government. It sets out a vision for a more collaborative approach to delivering shared priorities. It also includes commitments to agree a new fiscal framework and an accountability and assurance framework, to minimise ring-fenced funding, to review specific grants to allow for greater local discretion and to conclude the Local Governance Review (LGR). 38. In our Local government in Scotland: Financial bulletin 2022/23, published in January 2024, we reviewed early progress on the aims and commitments of the VHA and found key milestones had not been met. The VHA has now been in place for over a year and although discussions have taken place to progress several commitments, tangible progress is still limited: • Fiscal framework – Joint discussions have progressed work and additional exploratory work has been undertaken to look at how a rules-based framework might be established (at the request of COSLA). However, capacity within both COSLA and the Scottish Government has limited sustained progress. We do not yet know what the framework will look like, and no new deadline for agreeing the framework has been set. While it is important to get things right so that the framework endures, we reiterate the recommendation we made in our Local government in Scotland: Financial bulletin 2022/23 for momentum and progress to be accelerated. • Accountability and assurance framework – The VHA set out a commitment to jointly develop simple structures for accountability and assurance. Work is ongoing to unpick some of the complex issues around: where accountability lies for policy priorities, the existing accountability and assurance arrangements in place within local government, how assurance can recognise local difference and how to achieve proportionate reporting. This work goes hand in hand with agreeing a fiscal framework (and specifically reductions to ring-fenced funding) and while discussions are ongoing it is not clear when this will be achieved. The Local Governance Review looks at how power, responsibility and resources are shared with local government and different communities and what needs to change to enable public service reform, innovation and collective, whole system improvement. Page 288
Page 289
2. Urgent action is required to progress transformation 17 • Local governance review – The review is now in its seventh year. It was paused during the Covid-19 pandemic and restarted in 2023. A report on the outcome of the latest consultation, Democracy Matters 2, was published in September 2024. The pace of work will need to be significantly improved if the commitment to conclude the review by the Scottish Parliament election in 2026 is to be achieved. 39. Several actions, decisions and behaviours have challenged and risked undermining the collaborative vision of the VHA. These include the former First Minister’s announcement last October of a Council Tax freeze and the imposition of teacher numbers and learning hours. 40. COSLA and the Scottish Government must urgently take action to deliver on the commitments in the VHA. These are key facilitators to the successful delivery of transformation work and to councils’ ability to achieve financial sustainability. Further delay poses a risk to achieving these at the pace required. COSLA has the potential to facilitate sector-wide transformation and coordinate joint work with the Scottish Government 41. In late 2023, COSLA established the ‘Innovating Developing and Transforming’ special interest group (SIG) to facilitate collaboration between political leaders, the Scottish Government and other key public sector partners. It aims to create a more coordinated, transparent and efficient local government system that prioritises citizen engagement, financial stability, and transformative change. 42. In April 2024, it agreed it would be the key stakeholder group for political engagement and monitoring progress on transformation work. While it is too early to see the impact of SIG’s role in sector-led transformation work, it has potential to be an important mechanism for gaining political consensus on what the future of local government looks like. It also has the potential to facilitate better sector-wide public engagement and better collaboration between local and national government to implement the changes needed at both levels to achieve sustainable services that meet local needs. Urgency and collaboration are needed across the sector to deliver transformation 43. Councils are trying to deliver transformation in exceptionally difficult circumstances. Most councils, in common with most of the public sector, are finding it challenging just to deliver ‘business as usual’ services. They struggle to dedicate the time and resources to focus on long-term transformation work. But to deliver tangible progress, councils must commit to and sustain engagement with the Transformation Programme, other sector-led transformation work and their own plans for transformation, at political and officer level. Page 289
Page 290
2. Urgent action is required to progress transformation 18 44. Sector-led transformation work across local government is at an early stage. It is a long-term process, and most of the sector-led workstreams and projects will not deliver outcomes for several years. Councils should not view these programmes of work as solutions to their immediate and short- term financial sustainability issues. Nor should councils rely solely on sector- led approaches to deliver their long-term transformation goals. They should press ahead with their own plans for transformation and do everything they can to deliver them successfully. 45. The sector must also do all it can to ensure sector-led transformation work meets the needs of all councils where possible. There must be shared aims, outcomes and priorities. But there is no one-size-fits-all solution. Any new model for service delivery in councils should be principles-based and not overly prescriptive. It should give councils the flexibility to change how they deliver their services to best meet the needs of their communities efficiently, effectively and sustainably. 46. There are overall risks to the successful delivery of sector-led transformation work. Councils should recognise those risks, take collective ownership of them and work together to overcome them. They must ensure sufficient time and resources are focused on this transformation work, and that effective governance, planning and scrutiny arrangements are in place. 47. Given the scale of the challenge, councils cannot deliver transformation on their own and the Scottish Government and other public bodies need to collaborate with local government on transformation work. Partners from across the sector must urgently come around the table to agree a shared understanding of what local government transformation looks like, how it aligns with wider public sector reform and what it should achieve, how and by when. The Transformation Programme provides a forum for those officer-led discussions to take place, and momentum must be gained so that tangible progress can be seen. 48. There must also be meaningful engagement with the people who use council services to ensure transformation is aligned to their needs. Councils have a responsibility to do this as they implement their own plans for transformation. But a coordinated sector-wide public engagement and communication campaign should help gain acceptance from communities on what sustainable local services could look like in the future and how that will be achieved. There is potential for COSLA, via its ‘Innovating Developing and Transforming’ special interest group, to help facilitate this sector-wide public engagement. 49. While transformation is a long-term ambition, the need for change, innovation and action is urgent. The longer it takes to create solutions to the financial sustainability challenges facing the sector, the tougher those challenges will become and the more difficult it will be to find solutions. Page 290
Page 291
Transformation in councils Sector-led change and collaboration to achieve financial sustainability Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit.scot www.audit.scot ISBN 978 1 915839 51 0 Page 291
Page 292
Page 292
Page 293
REPORT TO: MORAY COUNCIL ON 4 DECEMBER 2024 SUBJECT: INFORMATION REPORT - MONITORING OFFICER REPORT FROM 1 NOVEMBER 2023 TO 31 OCTOBER 2024 BY: MONITORING OFFICER 1. REASON FOR REPORT 1.1 To inform the Council of the range of activities undertaken by the Monitoring Officer. 1.2 This report is submitted to Council in terms of Section III A (4) of the Council's Scheme of Administration relating to public performance reporting. 2. BACKGROUND 2.1 There is a statutory requirement for every Council to appoint a Monitoring Officer. The Head of Governance, Strategy and Performance performs this role in Moray Council supported by the Legal Services Manager who acts as Depute Monitoring Officer. 2.2 Legislation requires the Monitoring Officer to bring to the attention of the Council: A contravention of law or any code of practice made or approved under any enactment; or Maladministration or injustice in each case actual or potential and whether by the Council, committees, sub-committees or officers. 2.3 The position adopted by the Monitoring Officer is that a breach would require to be material, or a significant breach of the law in terms of the operations or finances of the Council to cause the Monitoring Officer to issue a report to the Council. 2.4 It is normal practice within local authorities for the Monitoring Officer to: Promote good governance and sound decision making. Promote the Councillors Code of Conduct. 2.5 The Council’s Policy and Resources Committee on 2 October 2012 agreed that the Monitoring Officer would present an annual report on the activities of the post (para 8 of the minute refers). 3. SUMMARY OF WORK UNDERTAKEN BY THE MONITORING OFFICER: Page 293
Page 294
Statutory role 3.1 There have been no formal reports by the Monitoring Officer of legal contravention or maladministration as described in paragraph 2.2. The Council have a number of systems and processes in place to deal with breaches or non-compliance with legislation/policy at a lower level. Governance role 3.2 During the period covered by the report the Monitoring Officer has: 3.3 Been appointed by the Interim Chief Executive as a member of CMT, attending weekly CMT meetings along with the Chief Financial Officer. This improves awareness on major issues facing the Council. 3.4 Helped commission external assistance to improve collaborative leadership amongst Councillors and Officers to help the Council make progress with its strategic agenda and priorities. The results of this work were considered by the Council’s Corporate Committee on 27 August 2024 (para 18 of the minute refers). 3.5 Helped ensure continued flexibility for Council/Committee meetings with the option of hybrid meetings and online voting. 3.6 Signed off agendas, reports and notices of motion submitted for all formal meetings of the Council and its Committees/Sub-Committees with assistance from the Legal Services Manager (Depute Monitoring Officer), Committee Services team and Legal team. This is a significant element of the Monitoring Officer’s workload, often undertaken over a very restricted period to enable Committee Agendas to be published within the statutory timescales. Given increasing and competing demands on the roles of the Monitoring Officer/Depute, and staffing gaps within Legal Services, a lighter touch is now being given to the report review process with time spent being relative to the risk. Due to workload pressures in other areas, reports are often received late which puts additional pressure on the agenda preparation process. The combined effect of these issues creates an increased risk that procedural problems arise at committee. 3.7 Introduced the guidance on Councillor/Officer relations and guidance for Councillors serving on outside bodies. 3.8 Delivered training on scrutiny for members of the Audit and Scrutiny Committee. 3.9 Advised all Councillors - administration and non-administration - on practical application of the Council’s Constitutional Documents to the committee Page 294
Page 295
system, including advice on notices of motion, competency of motions, written questions, political balance and rights to information. 3.10 Through the legal services section, managed the Council’s legal risk through: Dealing with claims in courts and tribunals Advice, statutory processes and transactional work Promotion of awareness of and compliance with major pieces of new legislation 3.11 Traditionally most legal work would be undertaken by an in-house team with a small amount of complex work being outsourced to experts. Ongoing difficulty in recruiting in-house solicitors has led to an increasing amount of routine work being outsourced to private firms through a framework arrangement. 3.12 Outsourcing legal work can be time consuming and costly and does not capitalise on the benefits of having skilled in-house solicitors advising in projects at an earlier stage. This creates a significant legal risk to the Council which could manifest itself through service or process failure, leading to financial or reputational damage. Code of Conduct Role 3.13 During the period covered by the report the Monitoring Officer has: 3.14 Maintained the register of councillors’ interests including six monthly reminders and council tax payment checks prior to budget setting. Councillors are reminded that any changes must be notified within one month of them occurring. 3.15 Provided regular updates to Councillors in relation to Standards Commission briefings and relevant hearings. It is recognised that further in person training is overdue and it is hoped to provide a training on external bodies/conflicts of interest by the end of 2024. . 3.16 Given advice to councillors on individual circumstances including: gifts and hospitality and what can be reasonably associated with councillors’ duties the requirement to declare an interest and how to make transparency statements registration of interests 3.17 Dealt with complaints against Councillors in terms of the Council’s policy. Whilst resolution of complaints at a political level is generally preferrable this is often not considered appropriate by those making complaints which are then passed to the Monitoring Officer. These complaints cover the same themes as those in from last year’s report: showing respect for other Councillors language used in social media allegations of bullying and harassment Page 295
Page 296
3.18 This intervention can be time consuming and the Monitoring Officer has no authority to enforce the code, only to promote its observance. Success is limited where there is no element of contrition from those complained about. In these circumstances the complainer is signposted to the complaints process of the Commissioner for Ethical Standards. 3.19 Given the political nature of the Council the level of complaints received does not seem outwith the norm and Moray appears to have a relatively low level of cases which are escalated to the Ethical Standards Commission. 3.20 Communicated with the Ethical Standards Commissioner and the Standards Commissioner over complaints covering respect provisions. 3.21 Participated with other Monitoring Officers in workshops with the Standards Commission over guidance on the Code of Conduct. 3.22 Maintained close links with other Monitoring Officers to act as a sounding board for tricky and complex issues. 4. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Effective governance is required for the delivery of the Council’s stated priorities and plans. (b) Policy and Legal These are detailed more fully in the report. (c) Financial Implications None. (d) Risks implications Actions taken by the Monitoring Officer help to manage political and regulatory risks within the Corporate Risk Register. (e) Staffing implications The role is carried out by the Head of Governance Strategy and Performance, supported by the Legal Services Manager. It can be challenging to fulfil the role alongside competing workload priorities. (f) Property Implications None (g) Equalities/Socio Economic Impact There are no issues arising directly from this report. (h) Climate Change and Biodiversity Impacts None Page 296
Page 297
(i) Consultations The Depute Monitoring Officer has been consulted and her comments have been reflected in the report. 5. CONCLUSION 5.1 The report informs the Council on the activities undertaken by the Monitoring Officer during the period covered by this report. Author of Report: Alasdair McEachan, Head of Governance, Strategy and Performance (Monitoring Officer) Background Papers: None Ref: Page 297
Page 298
Page 298