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Argyll and Bute Council · 20 December 2024
Back to Argyll and Bute Council — 20 December 2024 and its agenda
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Argyll and Bute Council Comhairle Earra-Ghàidheal Agus Bhòid Executive Director: Douglas Hendry Kilmory, Lochgilphead, PA31 8RT Tel: 01546 602127 Fax: 01546 604435 DX 599700 LOCHGILPHEAD 13 December 2024 NOTICE OF MEETING A Special meeting of ARGYLL AND BUTE COUNCIL will be held ON A HYBRID BASIS IN THE COUNCIL CHAMBER, KILMORY, LOCHGILPHEAD AND BY MICROSOFT TEAMS on FRIDAY, 20 DECEMBER 2024 at 10:30 AM, which you are requested to attend. Douglas Hendry Executive Director BUSINESS 1. APOLOGIES FOR ABSENCE 2. DECLARATIONS OF INTEREST (IF ANY) 3. AUDITED ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2024 (a) Recommendation from Audit and Scrutiny Committee held on 17 December 2024 - to follow (b) Report by Section 95 Officer (Pages 3 - 244) 4. TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY - MID YEAR REVIEW REPORT 2024/25 (a) Recommendation from Audit and Scrutiny Committee held on 17 December 2024 - to follow (b) Report by Section 95 Officer (Pages 245 - 256) 5. AUDIT AND SCRUTINY COMMITTEE ANNUAL REPORT 2023/24 (Pages 257 - 266) Report by Chair of the Audit and Scrutiny Committee 6. ARGYLL AND BUTE COUNCIL DRAFT VISITOR LEVY SCHEME (Pages 267 - 318) Report by Executive Director with responsibility for Development and Economic Growth Public Document Pack
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7. LEARNING ESTATE INVESTMENT PROGRAMME (LEIP) - MULL CAMPUS UPDATE (Pages 319 - 438) Report by Executive Director with responsibility for Commercial Services and Education 8. APPOINTMENT OF A RECRUITMENT PANEL FOR THE HEAD OF ROADS AND INFRASTRUCTURE SERVICES (Pages 439 - 440) Report by Executive Director with responsibility for Legal and Regulatory Support 9. REVISION OF ARGYLL AND BUTE COUNCIL'S SHORT-TERM LET LICENSING POLICY (a) Recommendation from Planning, Protective Services and Licensing Committee held on 18 December 2024 - to follow (b) Report by Executive Director with responsibility for Development and Economic Growth (Pages 441 - 484) 10. OBAN AIRPORT BUSINESS PARK (a) Recommendation from the Policy and Resources Committee held on 5 December 2024 (Pages 485 - 486) E1 (b) Recommendations from report considered by Policy and Resources Committee held on 5 December 2024 (Pages 487 - 488) The Council will be asked to pass a resolution in terms of Section 50(A)(4) of the Local Government (Scotland) Act 1973 to exclude the public for items of business with an “E” on the grounds that it is likely to involve the disclosure of exempt information as defined in the appropriate paragraph of Part I of Schedule 7a to the Local Government (Scotland) Act 1973. The appropriate paragraph is – E1 Paragraph 6 Information relating to the financial or business affairs of any particular person (other than the authority). Argyll and Bute Council Contact: Hazel MacInnes, Senior Committee Officer Tel:01546 604269
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 20 DECEMBER 2024 AUDITED ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2024 1. INTRODUCTION 1.1 This report provides Members with an update on the external audit of the Annual Accounts of the Council for the year ended 31 March 2024. 1.2 The audit of the annual accounts for the year ended 31 March 2024 is substantially complete. However, the external Annual Audit Report identifies some residual matters that remain outstanding at the time of report preparation. Mazars has committed to providing an update in relation to the outstanding matters through issuance of a follow up letter. In addition, Mazars have noted that they expect to issue an unqualified opinion and the draft opinion has been inserted into the Annual Accounts document. 2. RECOMMENDATION 2.1 It is recommended that the Council: • Note that the audit is substantially complete and that Mazars have advised the Council that they are expecting to issue an unqualified opinion on the Council’s Annual Accounts for the year ended 31 March 2024; • Consider Mazars Annual Audit Report, given in Appendix 2; • Authorise for issue, the Council’s Audited Annual Accounts for the year ended 31 March 2024, included as Appendix 3, on the basis that no material changes are anticipated to arise from the follow up letter from Mazars, otherwise the Audited Annual Accounts would be referred back to Members for approval; and • Approve for signature the Letter of Representation, included as Appendix 4. 3. DETAIL 3.1 Mazars are the Council’s appointed external auditors, with financial year 2023-24 being year 2 of a 5 year contract period. 3.2 There has been a significant improvement in the timescale for completion of the audit from the previous year. It is anticipated that continuous improvements will be made in future years towards a target completion date of 30 September. 3.3 The audit of the annual accounts for the year ended 31 March 2024 is substantially complete. However, the external Annual Audit Report identifies some residual matters that remain outstanding at the time of report preparation. Mazars has committed to providing an update in relation to the outstanding matters through issuance of a follow Page 3 Agenda Item 3b
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up letter. In addition, Mazars have noted that they expect to issue an unqualified opinion and the draft opinion has been inserted into the Annual Accounts document. 3.4 A copy of the full external Annual Audit Report is included at Appendix 2. The key messages contained within the report are as follows: • Financial Management - The Council has an appropriate financial management culture in place. It reviews its system of internal financial control annually. - The Council has appropriate budget monitoring and reporting arrangements in place, with appropriate contingency funds in place in accordance with policies. - The Council has appropriate arrangements to prevent and detect fraud and corruption. • Financial Sustainability - The Council has effective financial planning, with an established process to ensure there is early engagement of budget proposals. • Vision, leadership and Governance - The Corporate Plan sets a clear vision for the Council for the four-year period. - The Corporate Plan sets out objectives, measures of success and key commitments under each priority. - The Council has considered equality outcomes and socio-economic impacts regarding key decisions. - The Council has appropriate governance arrangements in place. - The Council provides councillors with sufficient information to allow effective scrutiny of its finances and performance. • Use of Resources - The Council’s resource plans are aligned with the Corporate Plan. - The Council has identified how services will contribute to achievement of its strategic priorities and objectives. - The Council consults regularly with service users to understand how it can meet their needs. - The Council has clear priorities and suitable arrangements in place to measure improvement. • Best Value - The Council has a clear vision. - The Council has appropriate Governance arrangements in place. - The Council’s annual business plans, and workforce and digital strategies are aligned with its corporate plan. - The Council demonstrates participation in partnerships and collaborative working. - The Council knows it needs to work effectively with citizens and communities to achieve its strategic objectives. - Actions to reduce inequalities underpin the Council’s priorities and objectives. Page 4
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3.5 Assuming that there are no further changes to the accounts, the main adjustments, in addition to some presentational changes, are in respect of accounting for Pensions. It has been necessary to restate Pensions Assets, Liabilities and Reserves, to reflect technical guidance and accounting requirements of IAS19, in respect of the Asset Ceiling adjustment. Further details of the impact on the Financial Statements are provided in Appendix 1. 3.6 There has been no change to the General Fund balance, as a result of the adjustments noted in paragraph 3.5 above. 3.7 Key highlights of the Council’s financial position, based on the draft Audited Annual Accounts are as follows: • An accounting Surplus on Provision of Services for 2023-24 of £9.765m; • A Revenue Budget underspend for 2023-24 of £1.728m; • Total Assets less Liabilities as at 31 March 2024 of £522.020m; and • A General Fund Balance as at 31 March 2024 of £115.741m. 3.8 The committed funds within the General Fund are £107.443m per the draft Audited Annual Accounts, leaving an uncommitted General Fund balance of £8.298m as at 31 March 2024. This equates to 2.9% of the Council's approved budgeted net expenditure for 2023-24, exceeding the contingency set at 2% of approved budget, as agreed as part of the 2023-24 budget process. 3.9 The draft Audited Annual Accounts for the year ended 31 March 2024 are included as Appendix 3, while the Letter of Representation is given as Appendix 4 to this report. 3.10 There has been a significant improvement in the timescale for completion of the audit compared to the previous year. Whilst this is welcomed, continuous improvement is still required over future years, in order for the audit to be completed within the target timescale of 30 September, following the financial year end. A protracted audit process can have a detrimental impact in supporting other council priorities, such as the budget process, over this period. 4. CONCLUSION 4.1 This report advises Members on the expected conclusion of the audit of the annual accounts for the year ended 31 March 2024. The external auditors, Mazars expect to issue an unqualified opinion and minimal adjustments were made to the unaudited annual accounts during the audit process. Mazars have issued their Annual Audit Report for 2023-24, which is predominantly positive. 5. IMPLICATIONS 5.1 Policy – None 5.2 Financial – None, with no impact on the General Fund balance. 5.3 Legal – Not expected to be any legal issues. Page 5
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5.4 HR – Further pressure placed upon key finance staff in respect of competing priorities and resourcing challenges, due to the protracted audit process beyond target completion date of 30 September 2024. 5.5 Fairer Duty Scotland: 5.5.1 Equalities – protected characteristics – None 5.5.2 Socio-economic Duty – None 5.5.3 Islands – None 5.6 Climate Change – None 5.7 Risk – None known at this time. 5.8 Customer Service - None 5.9 The Rights of the Child (UNCRC) - None Kirsty Flanagan Executive Director/ Section 95 Officer December 2024 Policy Lead for Finance and Commercial Services: Councillor Ross Moreland For further information contact: Carolyn Earl, Acting Head of Financial Services carolyn.earl@argyll-bute.gov.uk APPENDICES Appendix 1 - Summary of Substantive Audit Changes to Financial Statements for the year ended 31 March 2024 Appendix 2 - Annual Audit Report 2023-24 Appendix 3 - Argyll and Bute Council draft Audited Annual Accounts for the year ended 31 March 2024 Appendix 4 - ISA 580 Letter of Representation Page 6
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Appendix 1 Summary of Substantive Audit Changes to Financial Statements for the year ended 31 March 2024 Financial Statement / Segment Audited Accounts £000s Unaudited Accounts £000s Change £000s Comments/Explanation Comprehensive Income and Expenditure Statement To reflect the technical guidance and accounting requirements of IAS19 in respect of Pensions. A restatement is required to reflect the Asset Ceiling adjustment, which brings the Pension Asset value to £nil, after allowing for the Unfunded Pensions Obligation/Liability. Other Comprehensive (Income) and Expenditure Actuarial (gains) or losses on Pension Assets and Liabilities 164,914 (123,880) 288,794 Movement in Reserves Statement Pension Reserve Other Comprehensive (Income) and Expenditure 164,914 (123,880) 288,794 Balance Sheet Long Term Assets Other Long Term Debtors (Pensions) 0 269,216 (269,216) Long Term Liabilities Unfunded Pensions Liability (19,578) 0 (19,578) Reserves Pensions Reserve 19,578 (269,216) 288,794 Note: The above adjustments reflect those within the Council’s (single entity) Financial Statements. Similar adjustments have also been made within the Group Financial Statements. Page 7
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Annual Audit Report Argyll and Bute Council – year ended 31 March 2024 December 2024 Appendix 2 Page 8
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Audit and Scrutiny Committee
Argyll and Bute Council
Lochgilphead
Argyll
PA31 8RT
6 December 2024
Forvis Mazars
26 Mosley Street
Newcastle upon Tyne
NE1 1DF
Dear Committee Members and Controller of Audit,
Annual Audit Report – Year ended 31 March 2024
We are pleased to present our Annual Audit Report for the year ended 31 March 2024.
The purpose of this document is to summarise our audit conclusions and findings from our
considerations of the wider scope audit specified in the Code of Audit Practice 2021
namely, financial management; financial sustainability; vision, leadership and governance;
and use of resources to improve outcomes.
The scope of our work, including identified significant audit risks, and other key judgement
areas, was outlined in our Annual Audit Plan, which we presented to you on 13 June 2024.
We have reviewed our Annual Audit Plan and concluded that the significant audit risks and
other key judgement areas set out in that report remain appropriate.
We would like to express our thanks for the assistance of your team during our audit.
If you would like to discuss any matters in more detail, then please do not hesitate to
contact me on 0191 383 6339.
Yours faithfully
Mark Outterside (Director)
Forvis Mazars LLP
Annual Audit Report letter
Forvis Mazars LLP – 26 Mosley Street – Newcastle upon Tyne – NE1 1DF Tel: {0191 383 6339} – www.forvismazars.com/uk
Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Wales with registered number OC308299 and
with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at
www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73
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3 Contents 01 Executive summary 02 Status of the audit 03 Audit approach 04 Significant findings 05 Internal control conclusions 06 Summary of misstatements 07 Wider Scope 08 Best Value A Appendix A: Draft management representation letter B Appendix B: Draft audit report C Appendix C: Confirmation of our independence D Appendix D: Other communications E Appendix E: Wider scope and Best Value ratings Our reports are prepared in accordance with Terms of Appointment Letter from Audit Scotland dated 18 May 2022 through which the Accounts Commission has appointed us as external auditor of Argyll and Bute Council (the Council) for financial years 2022/23 to 2026/27. We undertake our audit in accordance with Part VII of the Local Government (Scotland) Act 1973, as amended; and our responsibilities as set out within Audit Scotland’s Code of Audit Practice 2021. Reports and letters prepared by appointed auditors and addressed to the Council are prepared for the sole use of the Council and made available to Audit Scotland and the Accounts Commission, the Controller of Audit. We take no responsibility to any member or officer in their individual capacity or to any other third party. Page 10
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01Executive Summary Page 11
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5 Executive summary Audit conclusions and significant findings The detailed scope of our work as your appointed auditor for 2023/24 is set out in Audit Scotland’s Code of Audit Practice 2021. Our responsibilities and powers are derived from Part VII of the Local Government (Scotland) Act 1973 and as outlined in our Annual Audit Plan, our audit has been conducted in accordance with International Standards on Auditing (UK) and means we focus on audit risks that we have assessed as resulting in a higher risk of material misstatement. In section 4 of this report we have set out our conclusions and significant findings from our audit. This section includes our conclusions on the audit risks and areas of management judgement in our Annual Audit Plan, which include: • Management override of controls; • Valuation of the net defined benefit (liability)/surplus; • Valuation of property; and • Accounting for PFI and PPP contracts Misstatements and internal control recommendations Section 5 sets out internal control recommendations and section 6 sets out audit misstatements. Section 7 outlines our work on the Council’s arrangements to achieve economy, efficiency and effectiveness in its use of resources. Status and audit opinion Our audit work in on the financial statements is well progressed. However, we are finalising work in the areas highlighted in Section 2 of this report. We will provide an update to you in relation to the significant matters outstanding through issuance of a follow up letter. Subject to the satisfactory conclusion of the remaining audit work, we have the following conclusions: Audit opinion We expect to issue an unqualified opinion, without modification, on the financial statements. Our proposed audit opinion is included in the draft auditor’s report in Appendix B. Matters on which we report by exception We are required by the Accounts Commission to report to you if, during the course of our audit, we have found that adequate accounting records have not been kept; the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Page 12
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6 Executive summary (continued) Conclusions from our audit testing and audit opinion (continued) Other information We are required to report on whether the other information (comprising of Management’s Commentary, Statement of Responsibilities and the unaudited parts of the Remuneration Report), is materially inconsistent with the financial statements; is materially inconsistent with our knowledge obtained in the course of the audit; or is materially misstated. No inconsistencies have been identified and we expect to issue an unmodified opinion in this respect. Management Commentary and Annual Governance Statement We are required to report on whether the information given in the Management Commentary and Annual Governance Statement is consistent with the financial statements; and has been properly prepared in accordance with the statutory guidance issued under the Local Government in Scotland Act 2003 and Delivering Good Governance in Local Government Framework 2016. We have no matters to report in respect of the Management Commentary and Annual Governance Statement Wider powers Section 101 of the Local Government (Scotland) Act 1973 requires us to give any person interested, the opportunity to question us about the accounting records of the Council and to consider any objection made to the accounts. We did not receive any such correspondence from electors. Whole of Government Accounts (WGA) We anticipate completing our work on the Council’s WGA submission, in line with the Technical Guidance Note TGN/WGA/24, provided by Audit Scotland. We anticipate reporting that the WGA submission is consistent with the audited financial statements Page 13
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7 Executive summary (continued) Best Value and Wider Scope conclusions As auditors appointed by the Accounts Commission, our wider scope responsibilities are set out in Audit Scotland’s Code of Audit Practice 2021 and sits alongside Best Value requirements detailed the Local Government (Scotland) Act 1973. The Code requirements broaden the scope of the 2023/24 audit and allows us to use a risk-based approach to report on our consideration of the Council’s performance of best value and community planning duties and make recommendations for improvement and, where appropriate, conclude on the Council’s performance. The Code’s wider scope framework is categorised into four areas: • financial management; • financial sustainability; • vision, leadership and governance; and • use of resources to improve outcomes. It remains the responsibility of the Council to ensure proper financial stewardship of public funds, it complies with relevant legislation, and establishes effective governance of their activities. The Council is also responsible for ensuring that it establishes arrangements to secure continuous improvement in performance and, in making those arrangements, ensures resources are being used to improve strategic outcomes and demonstrate the economy, efficiency, and effectiveness throughout the use of its resources. These arrangements should be proportionate to the size and type of the Council, appropriate to the nature of the Council and the services and functions that it has been created to deliver. Wider Scope We anticipate having no risks in arrangements to report in relation to the financial management; financial sustainability; vision, leadership and governance; and use of resources to improve outcomes arrangements that the Council has in place. Further detail on our Wider Scope work is provided in section 7 of this report including any significant risks identified. Best Value We anticipate having no risks in arrangements to report in relation to the arrangements that the Council has in place to secure economy, efficiency and effectiveness in its use of resources. Further detail on our Best Value work is provided in section 8 of this report including any significant risks identified. Page 14
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02Status of the audit Page 15
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9 Status of our audit Our audit work is substantially complete and there are currently no matters of which we are aware that would require modification of our audit opinion, subject to the satisfactory resolution of the outstanding matters set out below. Audit Area and Description of Outstanding Matter Classification Debtors Our testing of debtors is substantially complete, a limited number of audit queries remain outstanding. Low Valuation of the net defined benefit (liability)/surplus We are finalising our work in this area, including review of the revised disclosures relating to audit adjustments. Medium Valuation of property, plant and equipment Our work is substantially complete, and we are finalising our work in this area. Medium Cash and Bank Balances We are finalising our work in this area; including receipt of a small number of third-party confirmations. Low Comprehensive income and expenditure testing We are working with officers to finalise our income, expenditure and cut-off testing for a limited number of queries. Low Consolidation process for group accounts Our work is substantially complete, we are finalising our review of this work. Low Annual report and accounts and letter of representation We will complete our final review of the annual report and accounts upon receipt of the final signed version of the accounts and letter of representation. Low Audit quality control and completion procedures Completion of Manager and Partner review and our quality control processes in respect of the audit. Review of post balance sheet events up to the point at which we sign our audit report. Low Status High - Likely to result in a material adjustment or a significant change to disclosures in the financial statements. Medium - Potential to result in a material adjustment or a significant change to disclosures in the financial statements. Low - Not considered likely to result in a material adjustment or a change to disclosures in the financial statements. Page 16
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03Audit Approach Page 17
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11 Audit Approach Changes to our audit approach There have been no changes to the audit approach we communicated in our Annual Audit Plan. Materiality Our provisional materiality at the planning stage of the audit was set at £9,529k for the Council and £9,665k for its group using a benchmark of 2% of gross revenue expenditure at surplus/deficit level. Our Performance materiality was set at £6,670k for the Council and £6,766k for its group. Based on the final financial statement figures the final overall materiality we applied was £9,697k for the Council and £9,810k for its group, final performance materiality: £6,788k for the Council and £6,867k for its group; final clearly trivial threshold: £291k for the Council and £294k for its group. Use of experts We used our experts to assist us in obtaining sufficient appropriate audit evidence in relation to specific areas of the accounts. In addition to the experts listed in our Annual Audit Plan, we used Forvis Mazars’ Real Estate Valuation Team to review the Council’s valuation methodology on DRC and EUV assets, consider the Council’s non-revalued assets methodology on DRC assets and review the Council's approach to non-revalued EUV assets. Service organisations International Auditing Standards (UK) (ISAs) define service organisations as third-party organisations that provide services to the Council that are part of its information systems relevant to financial reporting. We are required to obtain an understanding of the services provided by service organisations as well as evaluating the design and implementation of controls over those services. We have not identified any relevant service organisations. Charitable Trusts Our provisional materiality for the charitable trusts was set at £16,318, a single materiality to reflect that the charitable trusts financial statements are covered by a single audit opinion. This remains unchanged at final as it was based on the draft financial statements for 2023/24. We have provided our consideration of our independence as part of the Council engagement and Charitable Trust engagement in Appendix C. Page 18
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12 Audit Approach (continued) Group audit approach Group component Approach adopted Key points or matters to report Argyll and Bute Integration Joint Board Specific procedures. Our audit of the IJB is underway and we expect there to be changes to the IJB’s accounts, which will impact on our work. Dunbartonshire and Argyll & Bute Valuation Joint Board Desktop review procedures. Our work in this area is ongoing with no key points to report as at the time of this report. Live Argyll Audit of pension balances and disclosures. Our work in this area is ongoing with no key points to report as at the time of this report. Common Good Accounts N/A N/A . Full audit - Performance of an audit of the component’s financial information prepared for group reporting purposes using component materiality Audit of balances and/or disclosures - Performance of an audit of specific balances and/or disclosures included in the component’s financial information prepared for group reporting purposes, using component materiality Specific audit procedures - Performance of specific audit procedures on the component’s financial information Review procedures - Review of the component’s financial information prepared for group reporting purposes using the component materiality assigned Page 19
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04Significant findings Page 20
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14 Significant findings Significant findings, including key areas of management judgement The significant findings from our audit include: • our audit conclusions regarding significant risks and key areas of management judgement outlined in the Annual Audit Plan; • our comments in respect of the accounting policies and disclosures that you have adopted in the financial statements. On page 19 we have concluded whether the financial statements have been prepared in accordance with the financial reporting framework and commented on any significant accounting policy changes that have been made during the year; and • any significant difficulties we experienced during the audit. Page 21
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15 Significant findings Management override of controls ] Description of the risk This is a mandatory significant risk on all audits due to the unpredictable way in which such override could occur. Management at various levels within an organisation are in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Due to the unpredictable way in which such override could occur there is a risk of material misstatement due to fraud on all audits. How we addressed this risk We addressed this risk through performing audit work over: • Accounting estimates impacting amounts included in the financial statements for evidence of management bias; • Consideration of identified significant transactions outside the normal course of business; and • Journal entries recorded in the general ledger and other adjustments made in preparation of the financial statements Audit conclusion Our work has provided the assurance we sought in each of these areas and as at the time of this report has not highlighted any material issues to bring to your attention. Page 22
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16 Significant findings (continued) Valuation of the net defined benefit (liability)/surplus ] Description of the risk As at 31 March 2024, the net defined benefit surplus was £269m (2022/23 - £139m). The valuation of the Council’s net liabilities/assets includes use of discount rates, inflation rates, mortality rates etc., all of which should reflect the profile of the Council’s employees and other appropriate data. Due to the high degree of estimation uncertainty associated with the valuations, we have determined there is a significant risk in this area. How we addressed this risk We addressed this risk through: • challenging the reasonableness of the Actuary’s assumptions that underpin the relevant entries made in the financial statements; • critically assessing the competency, objectivity and independence of the Actuary; • liaising with the auditors of the Pension Fund to gain assurance that the overall IAS19 procedures and controls in place at the Pension Fund are operating effectively; • comparing assumptions to expected ranges; and • agreeing data in the Actuary’s valuation report for accounting purposes to the relevant accounting entries and disclosures in the Council’s financial statements. Audit conclusion Our work in this area is ongoing and there have been audit adjustments to the financial statements in respect of the asset ceiling, see Section 6. Page 23
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17 Significant findings (continued) Valuation of property] Description of the risk The Council held land and buildings (including council dwellings) with a net book value of £457 million at 31 March 2024 (2022-23 £451 million). The Council has adopted a rolling revaluation model which sees other land and buildings revalued over a five-year cycle. This may result in individual assets not being revalued for several years. This creates a risk that the carrying value of those assets that have been revalued in year is materially different from the year end fair value. Valuations are based on specialist and management assumptions and changes in these can result in material changes to valuations. Due to the high degree of estimation uncertainty associated with valuations, we have determined there is a significant risk in this area. How we addressed this risk We addressed this risk through: • assessing the scope and terms of engagement with the in-house Valuer; • assessing the competence, skills and objectivity of the in-house Valuer; • assessing how management use the in-house Valuer’s report to value land and buildings included in the financial statements; • testing the accuracy of the data used in valuations; • challenging the Council and in-house Valuer’s assumptions and judgements applied in the valuations; • reviewing the valuation methodology used, including the appropriateness of the valuation basis; • considering the reasonableness of the valuation by comparing the valuation output with market intelligence; • testing a sample of revaluations in the year, by agreeing the revaluations recorded in the Annual Accounts to the in-house valuer’s reports. As part of this testing, we checked whether the movements have been accounted for in accordance with the Code; • challenging management’s assessment for those assets not subject to valuation in the year; • for those valued on Existing Use Value on a market comparable basis, we checked market movements to assess the materiality of potential movement for 2023/24; and • for those valued on a Depreciated Replacement Cost basis, which would be impacted by changes in build costs during the year, we tested management’s analysis of changes in the Build Costs Information Service (BCIS) index and assessed any decisions management made in this regard. Audit conclusion Except for the work highlighted in section 2 of this report, our work in this area is substantially complete, and we do not expect to report any material issues for your attention. As this is a significant risk area, we have had detailed discussion with management and there has been additional audit focus on assumptions around indexation and inputs used in valuation such as property areas, in arriving at this conclusion. Page 24
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18 Significant findings (continued) Accounting for PFI and PPP contracts ] Description of the management judgement and enhanced risk The Council currently operates three Private Finance Initiative (PFI), or similar, contracts which are accounted for as Service Concession arrangements under IFRIC12 – Service Concession Arrangements. The Council has determined that in the case of the Schools NPDO contract and the new Schools DBFM contract, the Council has control over the services provided through use of the schools and that a qualifying asset has been created. Therefore, the assets are included on the Council’s Balance Sheet along with a finance lease liability. The Council also operates a Waste Management PPP contract. In this case the Council determined that a “qualifying asset” has not been created and that the Council does not have significant control over the services being provided. Therefore, the asset has not been included on the Council’s Balance Sheet and payments to the contractor are charged to the appropriate service line within the Comprehensive Income and Expenditure Account. The method of accounting for PFI and PP assets can be complex and involves management judgement as set out in Note 3 to the financial statements. Therefore, there is a potential risk of material misstatement if the Council fails to appropriately account for these assets. How our audit addressed this area of management judgement We addressed this risk through: • reviewing the Council’s adopted approach for accounting for its PFI arrangements; • reviewing any changes from prior years to the long-term financial model used; • critically reviewing the assumptions made by management; and • assessing the completeness and accuracy of disclosures. Audit conclusion Our work has provided the assurance we sought in each of these areas and as at the time of this report has not highlighted any material unadjusted issues to bring to your attention. Page 25
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19 Significant findings (continued) Qualitative aspects of the Council's accounting practices We have reviewed the Council's accounting policies and disclosures and concluded they comply with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2023/24, as amended by the Update to the Code and Specifications for Future Codes for Infrastructure Assets, published in November 2022, appropriately tailored to the Council's circumstances. The Draft accounts were approved for issue by the Council on 27 June 2024. We reviewed the approved draft accounts, and they were of a good quality. Significant matters discussed with management During our audit we communicated the following significant matter to management: Audit of areas with Complex Accounting Estimates As outlined in the previous section, we discussed with management valuation of defined benefit liability/assets as this material item of account, includes several complex estimations and judgments. As part of our work, we obtained assurance from the pension fund auditor over the controls relating to the accuracy of data used by the actuary. The pension fund auditor, identified an understatement of private equity, debt infrastructure and direct portfolio assets in the Strathclyde Pension Fund annual accounts. We therefore quantified the potential impact on the Council, based on its share of pension assets included in the total pension fund assets. This resulted in an estimated unadjusted uncertainty totalling £3,295k, as included in section 6 of this report. From the work of the pension fund auditor, we also noted that although we requested assurance on benefits paid during the year no assurance was provided on this. We therefore performed alternative procedures by directly testing data obtained from the Pension Fund and identified a difference above our clearly trivial threshold but below our performance materiality between the benefits paid amount in the unaudited financial statements disclosure notes and that provided by the Pension Fund, which we challenged management on and received a satisfactory explanation hence have not included this in section 6 of this report. During the course of the audit we have had the full co-operation of management. Due to ongoing audit work, the Council was unable to meet the submission date of 30 September 2024, specified in the Local Authority Accounts (Scotland) Regulations 2014, for approval of its audited annual accounts. Forvis Mazars has discussed the implications of this with Audit Scotland who confirmed there are no consequences for the Council. Page 26
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20 Significant findings (continued) Wider responsibilities – statutory reporting The 1973 Act allows any persons interested to inspect the accounts to be audited and the underlying accounting records of the Council. The act also allows any persons interested to object to the accounts. No such objections have been raised. We are required to notify the Controller of Audit when circumstances indicate that a statutory report may be required. • Section 102(1) of the 1973 Act allows us to prepare a report to the Commission about the Council's accounts; matters that have arisen during the audit that should be brought to the attention of the public; or the performance of the Council in their duties relating to Best Value and community planning. • Section 102(3) of the 1973 Act allows us to make a special report to the Commission if an item of account is contrary to law; there has been a failure on someone’s part to bring into account a sum which ought to have been brought into account; a loss has been incurred or deficiency caused by the negligence or misconduct of a person, or by the failure of a body to carry out a duty imposed on them by any enactment; or a sum which ought to have been credited or debited to one account of a body has been credited or debited to another account and the body has not taken, or is not taking, steps to remedy the matter. • Section 97A of the 1973 Act allows us to undertake or promote comparative and other studies to make and publish recommendations for the securing by local government bodies of Best Value, improving economy, efficiency and effectiveness in the provision of services by local government bodies and improving the financial or other management of local government bodies. Reporting to the NAO in respect of Whole of Government Accounts consolidation data The NAO, as group auditor, requires us to complete the WGA Assurance Statement in respect of its consolidation data. We will submit this information to the NAO upon completion of our audit. Page 27
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05Internal control conclusions Page 28
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22 Internal control conclusions Overview of engagement As part of our audit, we obtained an understanding of Council’s internal control environment and control activities relevant to the preparation of the financial statements, which was sufficient to plan our audit and determine the nature, timing, and extent of our audit procedures. Although our audit was not designed to express an opinion on the effectiveness of Council’s internal controls, we are required to communicate to the Audit and Scrutiny Committee any significant deficiencies in internal controls that we identified in during our audit. Deficiencies in internal control A deficiency in internal control exists if: • A control is designed, implemented, or operated in such a way that it is unable to prevent, detect, and/ or correct potential misstatements in the financial statements; or • A necessary control to prevent, detect, and/ or correct misstatements in the financial statements on a timely basis is missing The purpose of our audit was to express an opinion on the financial statements. As part of our audit, we have considered Council’s internal controls relevant to the preparation of the financial statements to design audit procedures to allow us to express an opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Council’s internal controls or to identify any significant deficiencies in their design or operation. The matters reported in this section of our report are limited to those deficiencies and other control recommendations that we have identified during our normal audit procedures and which we consider to be of sufficient importance to merit being reported. If we had performed more extensive procedures on internal control, we might have identified more deficiencies to report or concluded that some of the reported deficiencies need not in fact have been reported. Our comments in this section should not be regarded as a comprehensive record of all deficiencies that may exist or improvements that could be made. The deficiencies Council’s internal controls that we have identified as at the date of this report are in set out on the following pages. Significant deficiencies in internal control A significant deficiency in internal control is one which, in our professional judgement, has the potential for financial loss, damage to reputation, or a loss of information which may have implications on the achievement of business strategic objectives. Our view is that observations categorised as a significant deficiency is of sufficient importance to merit the attention of the Audit and Scrutiny Committee. We have not identified any significant deficiencies in the Council’s internal controls as at the date of this report. Other observations We also record our observations on the Council’s internal controls where, in our professional judgement, there is a need to strengthen internal control or enhance business efficiency that do not constitute significant deficiencies in internal control but which we view as being important for consideration by management. Page 29
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23 Internal control conclusions (continued) Other observations (continued) Our other internal control observations, as at the date of this report, are set out in this section. These have been reported to management directly and have been included in this report for your information. Whether internal control observations merit attention by the Audit and Scrutiny Committee and/ or management is a matter of professional judgment, taking into account the risk of misstatement that may arise in the financial statements as a result of those observations. Other deficiencies in internal control In our view, there is a need to address the deficiencies in internal control set out in this section (which are not deemed to be significant deficiencies) to strengthen internal control or enhance business efficiency. Our recommendations should be actioned by management in the near future. Description of deficiency - Property Plant and Equipment Valuation Reconciliations – Brought Forward from Prior Year The Council has improved its reconciliations in regard to results of revaluation exercises and summaries in that it now prepares and maintains a file reconciling the results of the inhouse valuation process undertaken under Programme 1 and Programme 2 to the associated disclosure note in the financial statements. Nonetheless, there is scope to improve the reconciliations further by maintaining clear records on how area inputs are recorded as in some instances these details were difficult to agree to the underlying records. Potential effects The lack of this reconciliation contributed to making this audit area time consuming to reconcile the area values in the valuation reports with the underlying supporting documents for instance the maps and architects’ area schedules. This also led to additional requests being made during the audit process. Recommendation As regular practice, management should prepare and maintain a reconciliation of the results of any revaluation exercises conducted with the fixed asset registers/general ledger and maintain summaries that agree as appropriate including to the underlying supporting records such as maps and architects’ plans. Management response Council finance and property officers welcome the opportunity for continuous improvement and will consider these comments for future years, continuing to build on the process improvements already introduced in this area. Page 30
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24 Internal control conclusions (continued) Other recommendations on internal control In our view, internal control should be strengthened in these additional areas when practicable. Description of observation – Dormant/Inactive Bank Accounts We noted that the Argyll and Bute Council administers numerous bank accounts, several of which were dormant during the period. From our audit testing, it is not clear whether these accounts are actively monitored, due to the low level of activity in each. Potential effects Bank statements should be obtained and reconciliations performed for all bank accounts, including those with zero balances and little or no activity, by a member of the finance group who does not have access to withdraw from the accounts. These reconciliations should be independently reviewed by a person independent of the reconciliation process. Maintaining and monitoring dormant/inactive accounts uses resources that could be better used elsewhere and may present an opportunity for the account to be used for inappropriate or fraudulent purposes. Recommendation A review of open bank accounts should be carried out periodically to identify dormant accounts. Any accounts that are no longer required should be closed as soon as possible. Management response There is an operational requirement for the council to hold a range of bank accounts for treasury management purposes, in order to limit its exposure to credit or counter-party risk. The Creditworthiness approach, set out within the approved Annual Investment Strategy 2024/25, limits the level of investments held with any one counter-party (generally banks or financial institutions) or country. As such, the council requires sufficient flexibility to manage its day-to-day cashflow requirements, whilst having regard to the investment priorities of security, liquidity and return. The deals offered in the market by any given bank on any given day can vary and subsequent to satisfying, firstly the priority of security and then liquidity, the council would look to maximise the return on cash balances invested. Management does not consider the holding of bank accounts that have been dormant during the period to present an issue with the control environment, rather it is an operational necessity to provide flexibility to support the effective delivery of treasury management activities and compliance with the approved Investment Strategy. Page 31
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25 Internal control conclusions (continued) Other recommendations on internal control (continued) In our view, internal control should be strengthened in these additional areas when practicable. Description of observation – Inconsistency in Related Party Records Our testing on related parties identified that one Policy Lead for Health and Social Care is disclosed in the Senior Councillors Remuneration in the accounts but not on the website of the Council. Potential effects Inconsistent related party information could be misleading to users of the financial statements/members of the public who access the Council’s website for accountability. Recommendation Management should perform an exercise regularly to ensure that there is consistency of disclosure between the financial statements’ information and the Council website. Management response Management accepts that process improvements could be made to minimise the risk of any future discrepancies. Action will be taken to ensure that information is disclosed consistently between the annual accounts and the Council website, through performing regular reconciliations. Page 32
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26 Internal control conclusions (continued) Follow up on previous internal control points We set out below an update on internal control points raised in the prior year. Description of deficiency – Errors in Exit Packages Our testing of payroll identified one exit packages that had errors on the redundancy request forms and amounts per workings. The differences were likely due to the two information systems used by the Council that is the HR system and the redundancy forms which would have been signed prior to the member leaving. Potential effects Amounts paid out to former staff may be inaccurate and could lead to complaints and further action by affected staff and reputational risk for the Council. Recommendation Management should use one system (HR system) for the calculation of exit packages. 2023/24 update No significant matters noted in this regard in 2023/24. Page 33
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27 Internal control conclusions (continued) Follow up on previous internal control points (continued) Description of deficiency – Related Parties Declarations Our testing of payroll identified several Annual Declaration forms for the Councillors had not been signed and the form initially submitted for audit had no dates, signatures. As the audit progressed more forms were subsequently obtained and provided to us. Potential effects Councillors/management not acting in the best interest of Council or with conflicts of interest may not be identified in a timely manner. Recommendation Management should establish and improve the procedures around annual declaration forms for related party transactions and work closely with Councillors and other relevant related parties to ensure the declarations are appropriately completed and signed off, in a timely manner. 2023/24 update All the Annual Declaration Forms in 2023/24 were signed and contained the expected information. Resolved. Page 34
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06Summary of misstatements Page 35
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29 Summary of misstatements We set out below and on the following pages a summary of the misstatements we identified during our audit, above the trivial threshold for adjustment of £291k for the Council and £294k for its group. The first table in this section sets out the misstatements we identified which management has assessed as not being material, individually or in aggregate, to the financial statements and does not plan to adjust. The second table outlines the misstatements we identified that have been adjusted by management. Our overall materiality, performance materiality, and clearly trivial (reporting) threshold were reported in our Annual Audit Plan, issued on 24 May 2024. Any subsequent changes to those figures are set out in the section 3 of this report. We will issue a follow up letter to this report, should we need to report any issues arising from the work highlighted in section 2 of this report. Page 36
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30 Summary of misstatements Unadjusted misstatements Management has assessed the misstatements in the table below as not being material, individually or in aggregate, to the financial statements and does not plan to adjust. We only report to you unadjusted misstatements that are either material by nature or which exceed our reporting threshold. Details of adjustment CIES CIES Balance Sheet Balance Sheet Blank Dr (£ ‘000) Cr (£ ‘000) Dr (£ ‘000) Cr (£ ‘000) Dr: Pension Asset Cr: CIES Remeasurement of net defined liability/ (surplus) To adjust for an error identified by the Strathclyde Pension Fund external auditor, apportioned to the Council, due to the understatement of private equity, debt infrastructure and direct portfolio assets in the Strathclyde Pension Fund annual accounts. 3,297 3,297 Dr: Gross Expenditure Cr:Gross Income To adjust for an error on internal recharges which had not been adjusted for in the gross income and expenditure figures. 1,553 1,553 Aggregate effect of unadjusted misstatements 1,553 4,850 3,297 - We will obtain written representations confirming that, after considering the unadjusted misstatements, both individually and in aggregate, in the context of the financial statements taken as a whole, no adjustments are required. Page 37
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31 Summary of misstatements (continued) Adjusted misstatements The misstatements in the table below have been adjusted by management. We report all individual misstatements above our reporting threshold that we identify during our audit and which management had adjusted and any other misstatements we believe the Audit and Scrutiny Committee should be made aware of. Details of adjustment CIES CIES Balance Sheet Balance Sheet Blank Dr (£ ‘000) Cr (£ ‘000) Dr (£ ‘000) Cr (£ ‘000) Dr: Pension Reserve Cr: Pension Asset Cr: Pension Obligation To adjust for the effects of the asset ceiling which brings the balance on the balance sheet to £Nil value instead of the current value of £269,219k which had not considered the effects of the asset ceiling. 288,794 269,216 19,578 Aggregate effect of adjusted misstatements - - 288,794 288,794 Page 38
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32 Summary of misstatements (continued) Disclosure misstatements We identified the following disclosure misstatements during our audit that have been corrected by management: • Remuneration report:- The Council has amended the employee's remuneration to include the taxable benefit values for the VIVUP (employee benefits platform) salary sacrifice scheme as result of the confirmations received relating to the Optional Remuneration Arrangements (OPRA) rules which states that the agreements include the employees tax liability. The Council changed the draft accounts and added 2 new personnel of the over £50k list and made changes for the 4 other employees on the list who moved to the next banding. • The amount originally disclosed for Note 15.2 relating to the rolling valuation programme increased by £3,514k following audit testing. • Note 27.2 Financial instruments was amended to increase the loans and receivables amount from £46,423k to £55,333k. Also updated the Charging Care Home Fees for consistency with related disclosures. • Note 29 Provisions and Management Commentary - disclosure narrative amended to elaborate on withheld sums. There were several other minor adjustments for disclosure, consistency or presentational issues made to the annual report and financial statements. We identified the following disclosure misstatements during our audit that have not been corrected by management: • The Statement of Cashflows was presented in a manner slightly inconsistent with established practice, in that the movements in operating cash flow were represented in the direction opposite to the expectation for example increase in debtors represented as a positive cash flow movement rather than negative. We will obtain written representations confirming that, after considering the unadjusted disclosure misstatements, both individually and in aggregate, in the context of the annual report and financial statements taken as a whole, no adjustments are required. Page 39
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07Wider scope Page 40
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Commentary on Wider Scope Overall Summary Page 41
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35 Commentary on Wider Scope Wider scope summary As auditors appointed by the Accounts Commission, our wider scope responsibilities are set out in the Code of Audit Practice 2021 and sits alongside Best Value requirements detailed in the Local Government (Scotland) Act 1973. The Code requirements broaden the scope of the 2023/24 audit and allow us to use a risk-based approach to report on our consideration of the Council’s performance of best value and community planning duties and make recommendations for improvement and, where appropriate, conclude on the Council’s performance. The Code’s wider scope framework is categorised into four areas: • financial management; • financial sustainability; • vision, leadership and governance; and • use of resources to improve outcomes. Overall summary by reporting criteria Subject to the satisfactory conclusion of the remaining audit work, we have the following conclusions: Blank Reporting criteria Commentary page reference Identified risks? Actual risks identified? Other recommendations made? Financial management 38 No No No Financial sustainability 41 Yes – see risk 1 on page 42 No No Vision, leadership and governance 44 No No No Use of resources to improve outcomes 47 No No No Page 42
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Commentary on Wider Scope Financial management Financial management is concerned with financial capacity, sound budgetary processes and whether the control environment and internal controls are operating effectively. Page 43
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37 Financial management Significant Risks and our overall assessment We have not identified any significant risks in arrangements as part of our continuous planning procedures. Area assessed Our findings Our judgements Risks identified Financial management culture The Council has approved a Local Code of Corporate Governance. This sets out its commitment to achieving good governance. The Code covers how the Council will manage risks and its performance through robust internal control and strong public financial management. As reported in the prior year, the Council has a system of internal control which is designed to manage risk to a reasonable level. The Council has an established medium-term budget (MTFP) process which is designed to keep Members fully informed on changes to assumptions and pressures that affect future year estimates. The plan is updated on a regular basis and reported to each Policy and Resources Committee. The MTFP is part of a Strategic Planning Framework, and our work confirms that arrangements were in place that: link the financial plan to the Council’s objectives to ensure the priorities are delivered; scrutinise the MTFP; and record key assumptions with each savings plan being risk assessed. Our review of Policy and Resource Committee minutes provides assurance that the Council monitors and identifies mitigations to manage any changes in demand and assumptions in the MTFP. The Council also has an established risk management framework (risk matrix), with regular reviews and reporting to the Policy and Resources Committee. The Council has an appropriate financial management culture in place. It reviews its system of internal financial control annually. No significant issues identified. Page 44
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38 Financial management Area assessed Our findings Our judgements Risks identified Accountability Officers regularly presented financial performance reports to the Policy and Resources Committee during 2023/24 to update members on the Council’s position against budget and the progress of savings programmes. The reports provide sufficient detail for Council members to effectively scrutinise the Council’s finances. The officers presented the 2024/25 budget to the Council in February 2024. The budget included previously agreed savings of £93,000 in 2024/25, rising to £1.957m by 2028/29. In order to balance the budget, with a £10.167m budget gap forecast for 2024/25, the main measures employed by the Council include operational and policy cost savings across service areas and an inflationary increase to fees and charges. In response to the pressures on the capital programme, officers have reviewed the earmarked balances and have agreed to release a total of £2.212m. This release is intended to help address some of the shortfall in the capital programme. After cost adjustments, the total gap within the capital programme forecast at 2026/27 is £29.843m per the Budget outlook. The Council’s general fund reserves at 31 March 2023 were £86.4m. The Council has a policy of holding a minimum uncommitted balance of 2% of its budgeted annual net expenditure. There was a revised contingency of circa. £6m of free reserves per the budgeting pack for 2024/25 and the annual accounts. Using the final net expenditure for March 2024, this represents a balance which is over 2% of annual net expenditure. The Council has appropriate budget monitoring and reporting arrangements in place, with appropriate contingency funds in place in accordance with policies. No significant issues identified. Our overall assessment Page 45
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39 Financial management (Continued) Area assessed Our findings Our judgements Risks identified Arrangements to prevent and detect fraud, error and other irregularities, bribery and corruption The Council has established arrangements for preventing and detecting fraud and corruption. These include: • Whistleblowing policy • Anti-fraud strategy • Codes of conduct for councillors and officers. The Council has a dedicated counter-fraud team which sits within its internal audit function to investigate fraudulent claims covering tenancy, procurement, council tax reduction, Scottish Welfare Fund, social care, employee, insurance, council tax exemptions and discounts and blue badges. Individuals can report concerns by phone, email or through an online form on the Council’s website. In 2023/24 the Counter Fraud team reported to the Audit and Scrutiny Committee with quarterly updates. They reported on continuous monitoring activities including employee expense claims, with no significant issues or fraud incidents noted indicating any significant weakness in arrangements. The Council also takes part in the National Fraud Initiative (NFI). An NFI check was performed in the 2022/23 Financial year, with none being performed in 2023/24. The council was able to clear all 1,281 matches in the prior year, with zero frauds being identified. The Council has established staff polices including • Public interest disclosure policy; and • Code of Conduct, which is based on the Nolan Principles of Public Life. The Council has an in-house internal audit team. The Internal Audit Plan and Head of Internal Audit Report is reviewed by the Council’s Audit and Scrutiny Committee, with quarterly reports being provided, to determine the priorities of the internal audit activity, consistent with the Council’s goals. Internal audit updates show progress is on track and the council’s arrangements are deemed satisfactory. The Council has appropriate arrangements to prevent and detect fraud and corruption. No significant issues identified. Our overall assessment Page 46
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Commentary on Wider Scope Financial sustainability Financial sustainability looks forward to the medium and longer term to consider whether the body is planning effectively to continue to deliver its services or the way in which they should be delivered. Page 47
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41 Financial sustainability Significant risks We have outlined below the significant risks in arrangements that we have identified as part of our continuous planning procedures, and the work undertaken to respond to each of those risks. Blank Significant Risk in Arrangements Identified Work undertaken and the results of our work 1 Financial Sustainability Councils continue to face significant financial challenges with pressures on funding and increasing demand for services. Budget estimates after the revised assumptions in October 2024 give an anticipated in-year budget gap of £9.147m for 2025/26, rising to a cumulative budget gap of £28.565m by the end of 2029/30 based upon a ‘midrange’ scenario. The Council’s ‘worst case’ scenario highlights a potential £93.220m cumulative budget gap by the end of 2029/30. In common with many local authorities the estimated budget gaps, highlighted in the Council’s analysis represent a potential risk in relation to financial sustainability, which could on the future provision of services in the Council’s area. Work undertaken We reviewed the Council’s: • medium to long term financial strategy; • financial position and track record in delivering planned recurrent and non-recurrent savings in 2023/24; • financial performance in 2023/24 and updates to its financial planning during the year, including the implications for general reserves balances; • regular reporting to members on financial performance, savings plans and financial risks; and • progress in developing plans to address future year budget gaps. Results of our work Our review of minutes and supporting papers has confirmed medium-term financial planning arrangements have remained in place in 2023/24. In our assessment, we have considered the prior budget outlook, covering 2023/24- 2027/28, and the updated Medium Term Financial Plan (MTFP) from the Policy and Resource Committee meeting in August 2024, covering 2025/26-2029/30. We have considered the Council’s performance in delivering it’s MTFP, including any identified saving targets. Savings targets were set in the February 2024 committee meeting. However, the Council does not have a dedicated savings plan document, these are only drawn up at the operational level although they do not feed into a larger, aggregated savings plan. We recommend that the Council implements a ‘savings plan’ document which tracks a range of saving options to ensure effective monitoring and decision making can take place. As in the previous year, we have confirmed that there has been regular monitoring of the Council’s financial position throughout the year, which included arrangements to routinely update the MTFP, enabling the Council to respond to any identified financial challenges during the life of the plan. In addition, quarterly performance reports for four area committees within Argyll & Bute are reported to the Policy and Resources Committee. Page 48
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42 Financial sustainability Significant risks - continued Blank Significant Risk in Arrangements Identified Work undertaken and the results of our work 1 Results of our work In June 2024, the 2023/24 Revenue Outturn Report presented to the Council highlighted a net overspend of £1.0 million (Excluding Loans Fund) against the net budget, representing 0.42% of the net budget. We have considered the Council’s performance in delivering its savings targets within the context of the MTFP and we recognise saving plans are an ongoing and iterative process, developed by officers and agreed by Members based on the latest information. The savings target for 2023/24 was £9.348 million from 20 savings options. Of this, the council achieved 97.9% of the savings totalling £9.152 million. Savings options totalling £4.194 million were included in the Budget Update report presented to the Policy and Resources Committee on 7 December 2023. These savings have been refined, and additional savings options have been identified, bringing the overall value of savings options to £4.974 million in the 2024/25 budget, which is 1.6% of the £311.468 million budgeted expenditure requirement for 2024/25. Our review of the MTFPs issued over the current reporting period, provides assurance that forecasts are based on prudent assumptions including the Council’s latest understanding of future government funding arrangements, local revenue assumptions, service demand and other costs pressures. Arrangements for identifying and delivering savings include a timetable for consultation with stakeholders ahead of approval before each financial year. The Council is not forecasting the use of reserves to support the delivery of a balanced budget; and we note the Council’s level of reserves do allow some flexibility, with a 2% General Fund contingency in place. Useable reserves have increased from £93.775m at 31 March 2023 to £121.701m at 31 March 2024. These reserves provide some mitigation against future financial challenges; however, the use of reserves cannot be relied on to provide a long-term solution to funding gaps. Therefore, all future income streams need to be considered in detail by the Council to mitigate future challenges, including reviewing Council Tax raising powers. We also note the plan is predicated by the application of £2m from the Strathclyde Pension Fund reduction in rates in 2024/25 and by the amount in both 2025-26 and 2026-27. In October 2024, the Council reported its financial position as at 31 August 2024/25, confirming it has achieved 84% (£5.431 million) of its saving total (£6.466 million). Page 49
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43 Financial sustainability Significant risks - continued Blank Significant Risk in Arrangements Identified Work undertaken and the results of our work 1 Results of our work The net capital expenditure for 2023-24 amounted to £37.860m, exceeding the annual budget of £33.166m. This budget was adjusted during the year to account for previously agreed slippages, accelerations, and virements. Consequently, there was a year-end overspend of £4.694m, representing 14.15%. The main ongoing projects are the Helensburgh Waterfront, Dunoon STEM Hub and CHORD Rothesay, with a combined overspend on these projects of £5.854m. While we recognise there is some uncertainty in the financial position of the Council, consistent with the overall situation of other entities in the Public Sector, our work did not identify any evidence to indicate a significant weakness in the Council’s arrangements to mitigate these risks. Page 50
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44 Financial sustainability (continued) Our overall assessment Area assessed Our findings Our judgements Risks identified Financial planning Officers present four financial updates a year to Council meetings. These provide an update on the financial challenges facing the Council and estimated revenue budget gaps under best case, worst case and mid-range scenarios. Scenarios are based on financial planning assumptions that are updated by officers on an ongoing basis. The Council faces a very challenging financial position. Its mid-range case scenario from the Budgeting pack for 2024/25, after some assumptions on future years options, but before the 2024/25 budget was approved, projects the following in-year budget gaps: £6.583 million in 2025/26 £5.550 million in 2026/27 £3.858 million in 2027/28 £5.200 million in 2028/29 In order to mitigate the above, the Council regularly communicates with the Scottish Government to secure funding and also performs regular budget setting annually, with cost savings being presented to the Policy & Resource Committee. The Council established a cross-party budget working group to ensure that there is early engagement and consensus on budget proposals. The Council previously approved a Council Tax increase of 10% for Argyll and Bute area for 2024/25 to enable sustainability of provision of services but after consideration froze Council tax in line with the Scottish Government’s Council Tax freeze direction and support. The Council faces challenges in delivering its capital programme due to a reduction in General Capital Grant settlement, as it has fallen by £3.428 million in annual funding from total funding of £12.262 million in 2019-20. After cost adjustments, the total gap within the capital programme forecast out to 2026/27 is £29.843m. To address this, among the mitigation measures the Council considers periodically is deferral of capital spending. The Council has effective financial planning, with an established process to ensure there is early engagement with relevant stakeholders on budget proposals. Councillors and officers should continue working together to make the difficult decisions to respond to the Council’s challenging financial position. The Council should also continue to make efforts to collect all outstanding taxes due. No significant issues identified. Page 51
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Commentary on Wider Scope Vision, leadership and governance Vision, Leadership and Governance is concerned with the effectiveness of scrutiny and governance arrangements, leadership and decision making, and transparent reporting of financial and performance information. Page 52
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46 Vision, leadership and governance Significant risks and our overall assessment We have identified one significant risks in arrangements as part of our continuous planning procedures. Area assessed Our findings Our judgements Risks identified Clarity of plans to implement the vision The Council adopted its Strategic Plan 2023 – 2027, known as the Corporate Plan. This sets a clear vision and key commitments for the Council over the period. The Council’s priorities for 2023 to 2027 are categorised under the themes of: • Education; • Roads, Amenities and Infrastructure; • Potential and Growth - turning opportunities into reality; and • Partnership and Action - everyone has a part to play in Argyll and Bute's success. We note that the Strategic plan along with other policy documents are undergoing revision due to a change in leadership following a successful political challenge to the previous administration. These are yet to be released. Several reviews are planned and scheduled to be completed prior to March 2025, and these should consider any changes in strategic direction. The Corporate Plan sets a vision for the Council for the four-year period. This focuses on working with residents, communities, and businesses to deliver the best possible services and targeting resources to those most in need. These are reported within the Council Annual Report in the form of Corporate outcome indicators across seven areas. This report is yet to be released for 2023/24, although for 2022/23 a total of 39 Indicators were above target or on track out of a total of 47 outcome indicators and from discussions with management a similar outcome is expected in 2023/24. The Council’s leadership should ensure that any revisions to the Corporate Plan maintain the clarity of vision, and that these changes are communicated effectively for understanding of staff across the Council for effective implementation. One risk has been identified relating to the adoption of new corporate plan along with other strategic documents such as a performance improvement framework. There is a risk that future strategic documents will be inconsistent with other related policy documents, adversely impacting the clarity of the Council's vision. Page 53
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47 Vision, leadership and governance Significant risks and our overall assessment We have identified one significant risks in arrangements as part of our continuous planning procedures. Area assessed Our findings Our judgements Risks identified Strategy and priorities The Council has described what success will look like for each of its objectives within the Corporate Plan, including measures of success for each priority and setting out key commitments. Details on activity, for each financial year, against the Council priorities will be set out in a new Annual Business Plan. This new document replaces the former annual Service Plans to bring more focus and scrutiny on the delivery and performance of the organisation against its priorities. This has been developed and linked to other documents such as the workforce plan and operational workforce plans. The Corporate Plan measures are based on improving key performance indicators over the four years of the plan. Services are responsible for setting targets for these measures in delivery plans and regularly monitoring and reporting progress. The Council makes use of equality impact assessments in any key decisions that may change service delivery and impact communities or employees. The council considers 'Fairer Scotland Duty' implications in each paper brought to the Full council or Policy and Resource committee. This includes considering the impact of decisions/ events on equality and socio-economic factors. The Corporate Plan sets out objectives, measures of success and key commitments under each priority. The Council has considered equality outcomes and socio-economic impacts regarding key decisions. No significant issues identified. Page 54
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48 Vision, leadership and governance (continued) Our overall assessment (continued) Area assessed Our findings Our judgements Risks identified Governance arrangements The Council’s governance arrangements are centred on Council meetings, service committees and the Audit and Scrutiny Committee. Council and Audit and Scrutiny Committee meetings are well attended by councillors and papers are subject to a good level of scrutiny. Council and committee meeting papers and minutes are available on the Council’s website and meetings are open to the public. Deputations can be heard at meetings of the Council and its principal committees. In addition, the Council Area Committees have a standing agenda item for Public Questions to be put and answered. The Council has appropriate governance arrangements in place. We found evidence of effective scrutiny and challenge, and transparent decision making at Council and Audit Committee meetings. No significant issues identified. Financial and performance information Officers present regular financial updates and budgetary control reports to Council meetings. The budgetary control reports provide an update on the general services revenue budget and the Council’s capital programme. These reports include additional information on budget variances and updates on the progress of agreed savings. The Council reports progress against delivery plans to councillors through its service committees. These reports show the performance of each service against its performance indicator targets and progress in delivering agreed actions. The Council provides councillors with sufficient information to allow effective scrutiny of its finances and performance. The Council’s annual performance report is clearly presented and accessible. No significant issues identified. Page 55
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Commentary on Wider Scope Use of resources to improve outcomes Audited bodies need to make best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. This includes demonstrating economy, efficiency, and effectiveness through the use of financial and other resources and reporting performance against outcomes. Page 56
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50 Use of resources to improve outcomes Significant risks and our overall assessment We have not identified any significant risks in arrangements as part of our continuous planning procedures. Area assessed Our findings Our judgements Risks identified Resources deployed to improve strategic outcomes The Council has a workforce planning process in place. It covers the strategic and team specific levels. This includes a risk matrix to identify areas of priority. Workforce issues appear on risk registers where appropriate and action plans are also in place. The strategic workforce plan is being integrated into the new people strategy to create a single delivery plan. Strategic priorities are subject to change due to new leadership and upcoming publication of new corporate plan and Performance Excellence Project scheduled for March 2025 implementation. The Council’s resource plans are aligned with the Corporate Plan. It can demonstrate budget decisions which reflected its strategic priorities in 2023/24 and reflects its strategic priorities in 2024/25. No significant issues identified. Page 57
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51 Use of resources to improve outcomes (continued) Our overall assessment (Continued) Area assessed Our findings Our judgements Risks identified Needs of service users being met The Council’s delivery plans set out how it will achieve its strategic priorities. There is a Council-wide annual business plan as opposed to individual service delivery plans. Within this, the Council consults with stakeholders including the Scottish Government to maximise funding, for 2023/24 this included an action to secure Home Energy Efficiency Programmes Scotland (HEEPS) funding for council led schemes. The Council also utilises local contractors for development works and involve residents and other stakeholders in the design and consultation process, an example of this was the Tobermory wall and rails. The Annual Business Plan sets out the strategic priorities for all services and demonstrates how they align with the Council’s priorities and the Local Outcomes Improvement Plan. The Council, through its Annual Business Plan, has identified how services will contribute to achievement of its strategic priorities and objectives. The Council consults regularly with service users to understand how it can meet their needs. No significant issues identified. Arrangements to deliver continuous improvements in priority services The Council’s corporate plan sets clear objectives and highlights the services it plans to prioritise. This plan measures are based on improving key performance indicators over the four years of the plan. Service lines are responsible for setting targets for these measures in delivery plans and regularly monitoring and reporting progress. This is done as part of the budget setting process and the savings updates presented to the Audit and Scrutiny committee. For instance, the Budgeting pack for 2024/25 was taken to Council in Feb 24. This includes an example of a Savings options for various service delivery areas. The relevant service leader provides commentary on potential savings options with associated risks and mitigating factors. The Council has clear priorities and suitable arrangements in place to measure improvement. The Council is looking at opportunities to make efficiencies through service innovation. No significant issues identified. Page 58
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08Best Value Page 59
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53 Best Value Best Value summary Under the Code of Audit Practice, the audit of Best Value is fully integrated within our annual audit work. We are required to assess the seven Best Value themes at the Council over the period of the audit appointment. We have used a risk-based approach that is proportionate to the size and type of the body, to assess whether the Council has made proper arrangements for securing Best Value and is complying with its community planning duties. We have also followed up on previously reported Best Value findings and have assessed the pace and depth of improvement implemented by the Council. At least once every five years, the Controller of Audit will report to the Accounts Commission on the Council’s performance in meeting its Best Value duties. We conduct thematic reviews as directed by the Accounts Commission. In 2023/24 this will be about workforce innovation. The Council is not included in the second year of the programme which runs from October 2023 to August 2024. Performance Audit and Best Value staff also prepare a report for the Controller of Audit using information and judgements on the pace and depth of continuous improvement reported in this Annual Audit Report. The Council is not included in the first year of the programme which runs from October 2023 to August 2024. At the planning stage of the audit, we undertook work to understand the arrangements that the Council has in place under each of the reporting criteria and we considered whether there were any risks to our audit in those arrangements. We have kept our understanding of arrangements under review and updated our risk assessment throughout the audit to reflect emerging issues that may suggest significant risks in arrangements exist. The following slides outline the work that we have undertaken for each of the seven Best Value themes and any improvements or risks in arrangements that have been identified as part of our assessment. We have reported recommendations for the risks identified. Page 60
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54 Best Value (continued) Overall summary by reporting criteria From the satisfactory conclusion of our audit work, we have the following conclusions: Blank Reporting criteria Commentary page reference Identified risks? Actual risks identified? Other recommendations made? Best Value 57 No No No Effectiveness of performance reporting 60 No Yes – see page 56 Yes – see page 56 Thematic reviews 62 No No No Statutory Performance Indicators 67 No No No Page 61
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55 Best Value (continued) Significant risks and our overall assessment of the Best Value themes We have not identified any significant risks in arrangements as part of our continuous planning procedures. Best Value theme Our findings Our judgements Service improvement considerations Risks identified Vision and leadership Our 2023/24 wider scope work considered: • How clear is the new Council vision and its priorities? • Overall, how effective has the leadership been (political and officer) in setting clear priorities and a sustainable approach to delivering them? See page 48. The Council has a clear vision with three outward facing priorities and one inward looking. The Council needs to maintain effective leadership to continue to achieve its priorities and to make the difficult decisions to respond to its challenging financial position. The Council needs to revisit its Corporate Plan in line with the new political leadership having assumed office in 2024. None identified. No significant issues identified. Page 62
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56 Best Value (continued) Our overall assessment of the Best Value themes (continued) Best Value theme Our findings Our judgements Service improvement considerations Risks identified Governance and accountability Our 2023/24 wider scope work considered: • Whether the Council can demonstrate that its governance arrangements are appropriate and operating effectively? • Is there evidence of effective scrutiny, challenge and transparency on decision making at governance committees? See page 40. The Council has appropriate governance arrangements in place. We found evidence of effective scrutiny and challenge, and transparent decision making at Council and Audit Committee meetings. None identified. No significant issues identified. Effective use of resources Our 2023/24 wider scope work considered: • How good are the delivery plans and is there alignment of financial, workforce, asset and digital plans with the Council’s priorities? See Page 52. The Council’s annual business plans, and workforce and digital strategies are aligned with its corporate plan. It can demonstrate 2023/24 budget decisions which reflected its strategic priorities. None identified. No significant issues identified. Partnerships and collaborative working Our 2023/24 Best Value Thematic work considered: • In what areas the council has implemented shared services with other councils and partners? • To what extent the council delivers functions through its communities, the third sector, private sector or other providers? See Page 52. The council participates in joint training and service delivery alongside other local government bodies, in addition to a joint transformation programme with SOLACE. The council also collaborates and delivers services via its subsidiary, LiveArgyll. None identified. No significant issues identified. Page 63
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57 Best Value (continued) Our overall assessment of the Best Value themes (continued) Best Value theme Our findings Our judgements Service improvement considerations Risks identified Working with communities Our 2023/24 wider scope work considered: • How effectively have the views of citizens and communities been reflected in the priorities and decisions taken by the Council? See Page 53. The Council knows it needs to work effectively with citizens and communities to achieve its strategic objectives. Community budgeting and participatory budgeting are two ways it is involving local people in decision making. Equality and Social-economic surveys also involve communities in the decision- making process for changes to service delivery. None identified. No significant issues identified. Sustainability We did not assess this theme in 2023/24 N/A N/A N/A Fairness and equality Our 2023/24 wider scope work considered: • Do strategic plans demonstrate a clear approach to improving inequality outcomes? See Page 48. Actions to reduce inequalities underpin the Council’s priorities and objectives. The Council is focussing on providing support to communities affecting by the cost-of-living crisis. None identified. No significant issues identified. Page 64
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58 Best Value (continued) Effectiveness of performance reporting Effective performance management arrangements should be in place to promote the effective use of the local authority’s resources. Performance is systematically measured across all areas of activity, and performance reports are regularly scrutinised by managers and elected members. The performance management system is effective in addressing areas of underperformance, identifying the scope for improvement and agreeing remedial action. We have outlined below a summary of what the Council is reporting in relation to service performance including the Council’s assessment of progress against its service priority measures and reporting on its relative performance (from the Local Government Benchmarking Framework and other information used locally). Effectiveness of performance reporting theme Our findings Our judgements Our conclusions Risks identified Effective performance management The Council uses the Performance Improvement Framework (PIF) to ensure performance is integral to the work of Council and is linked to the strategic corporate plan and overarching mission of the council. As a result of the elections and newly appointed administration, there are several changes anticipated to the strategic plans including a new corporate plan and priorities, and a revised performance improvement framework. The Council continue to pursue performance improvement activities and are in the process of reviewing the approach to self-assessment. As part of this, A template has been developed to evaluate the Council's performance in relation to meeting corporate objectives and key performance indicators, cost of delivering services and customer satisfaction. The Council issues Quarterly Area Committee Performance Reports, looking at performance in the four administrative areas across the Council. Each of the Area Committee performance reports directly link and assess Corporate outcomes laid out in the corporate plan, showing clear links to overall strategy with comparisons, status trackers and targets vs actuals. A template has been developed to evaluate the Council's performance in relation to meeting corporate objectives and key performance indicators, cost of delivering services and customer satisfaction. However, this is yet to be fully implemented. It is not clear from review of the Corporate plan and other strategic documents that clear KPIs have been implemented and are regularly monitored to assess the effectiveness of performance. We recommend that the Council ensure new strategic plans and documents interlink and contain clear KPIs that can be used in regular reviews by Those Charged With Governance (TCWG) to assess internal performance. There is a risk that the performance within the Council is not reliably monitored, and internal or external threats may not be identified or mitigated. Page 65
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59 Best Value (continued) Effectiveness of performance reporting (continued) Improvement plans reflect a pace and depth of improvement that will lead to the realisation of the local authority’s priorities and the long-term sustainability of services. The Council should demonstrate a trend of improvement over time in delivering its strategic priorities. We have outlined below our assessment on whether the Council can demonstrate a trend of improvement over time in delivering its priorities. Effectiveness of performance reporting theme Our findings Our judgements Our conclusions Risks identified Improvement plans The recent elections and change in administration of the Council has meant that there are planned changes to key policy and strategy documents other than the improvement plans, including the strategic corporate plan. The previous Corporate Improvement Plan (CIP) ended in 2022, and a new CIP is currently being developed as part of the Performance Excellence Project. The Council continued to report progress on its BV Action plan to Audit and Scrutiny Committee (ASC). This new plan will align with the Corporate Plan and support the new Council priorities which we expect will be brought forward by the new Administration in autumn 2024. Progress is reported annually to the Audit and Scrutiny Committee, for example in March 2024 the Corporate Improvement Plan Updated was presented to the ASC, highlighting continuous improvement activities including the Chief Executive’s Connect for Success Change Programme-Connect for Success-My Council Works that sets the strategic thematic goals for corporate improvement activities. There is currently a large gap between the prior improvement plan which came to an end in 2022 and implementation of an updated version, which has yet to be published. It will be implemented during the 2024/25 year. This represents a two- year gap in a Corporate improvement plan, which is detrimental to the council's ability to set and monitor its Strategic goals against KPI’s over time. As there are no clear KPIs assessed over time the pace and depth of improvements are difficult to determine. We recommend that the Council ensures the CIP is implemented in a timely manner. We also suggest that there are links to workforce planning and other key strategy documents to ensure coherency across the Council. There is a risk that the Council is unable to accurately track progress towards the Connect for Success themes as there is no finalised Improvement plan in place. It is difficult to assess whether improvements are being made, and the Council may not be able to identify areas that are falling behind in either pace or depth. Page 66
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60 Best Value (continued) Thematic reviews The Accounts Commission reports nationally on thematic aspects of local government bodies’ approaches to, and performance in, meeting their Best Value and community planning duties. As appointed auditors of the Council we are required to report on Best Value and related thematic work as prescribed by the Accounts Commission. For the thematic work in 2023/24, we are required to carry out an overview of workforce innovation. As part of this review, we are required to report on the areas documented in the table below. The full thematic review report for the Council can be found on Audit Scotland’s Website. Thematic themes Our findings Our judgements Risks identified Workforce strategy and priorities The council has implemented an up-to-date people strategy, containing 5 key strategic themes with a focus on attracting and retaining talent. A strategic workforce plan is in place till 2028 demonstrating a medium-term outlook on potential threats. At the operational level, workforce planning is performed at the managerial level which is beneficial as greater insights into resourcing can be achieved from first-hand experience in the day-to-day operations of the council. The 'connect for success' model included within the corporate plan is linked to the People Strategy, where each commitment is linked to a 'Connect for Success' theme. There is a clear attempt to link resourcing with the needs of the council per the corporate plan. A medium-term outlook up until 2028 demonstrates reasonable consideration for the future, although the new leadership and upcoming changes to key strategy documents such as the corporate plan further necessitate regular monitoring and reviews of the workforce plans to ensure they are consistent with the council's overall corporate plan. There is a risk surrounding the implementation of the updated corporate plan and that it might not link to the existing workforce strategy and the Medium- term Budget outlook and financial plans. The council should ensure that regular reviews and monitoring of workforce plans are performed so it is consistently aligned with the overall strategy of the council. Page 67
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61 Best Value (continued) Thematic reviews (continued) Equality and Socio-Economic Impact Assessments | Argyll and Bute Council Equality and Socio-Economic Impact Assessments | Argyll and Bute Council Thematic themes Our findings Our judgements Risks identified Digital technology and the workforce The council has taken advantage of digital technology to enhance productivity and reduce burden on human resources, for instance the council implemented collaborated with Education Services to digitalise and streamline registration and enrolment. This is to be further enhanced in 2024/25 with robotic updates via an integration into the SEEMIS Education system. The council was selected to participate in the National Records of Scotland paperless registration service, highlighting the Council's willingness to embrace digital transformation. Cost savings have also been realised through recurring reduced mileage being claimed due to continued homeworking and flexible working policies which were implemented in recent years. We are satisfied with the steps being taken to improve productivity and efficiency through digital technology and implementation of new software/ data management systems. We have confirmed that the Council engage staff and communities when changing service delivery, considering the impact of digital exclusion and service accessibility. This is done through Equality and Socio-economic Impact Assessments (EQSIA) – available on the public domain on the councils website: Equality and Socio-Economic Impact Assessments | Argyll and Bute Council. No significant issues identified. Flexible working and other innovative staff deployment The Council released a Hybrid and Flexible work policy in the 23/24 Financial year. Flexible working arrangements have been in place within the council for several years and the policy around this is continually reviewed and updated to reflect changes in services and the environment. The council has gathered feedback from Trade union and employee feedback discussions and are undertaking a first-year review of the Flexible working policy, scheduled for release in December 2024. The Council does not participate in the 4-day working week and we consider this appropriate due to the nature of the services being provided and continued reliance on its operation by taxpayers and service users. The outcomes from the flexible working policy review should be assessed and integrated going forward. We would recommend that regular monitoring of this is performed, beyond this first-year review. We are satisfied with the current steps being taken and note this as a point forward to consider in 24/25 once the review is finalised. No significant issues identified. Page 68
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62 Best Value (continued) Thematic reviews (continued) Thematic themes Our findings Our judgements Risks identified Developing future skills and capacity The strategic workforce plan references reducing the budget for the workforce in the long term, with the utilisation of technology compensating for the reduced human resource. The ‘Growing Our own’ (GOO) framework was implemented to ensure future recruitment into the council, it is a tool available to managers to support a pipeline of talent into the workforce. It includes development via Work Experience, Student Sponsorship, Trainees, Apprenticeships etc. The council is appropriately considering the balance between temporary and permanent staff, and the increased costs that come along with a higher ratio of temporary staff compared to permanent. Confirmed the Council is developing the capability of its workforce and is implementing modern agile work policies to enhance the capacity and skills of its workforce whilst also allocating them to specific areas. Reviews are planned to take place in the upcoming year before March 2025. We would look to revisit these in 2024/25 to determine results of these surveys and managements response. No significant issues identified. Page 69
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63 Best Value (continued) Thematic reviews (continued) Thematic themes Our findings Our judgements Risks identified Joint workforce arrangements across services and partners The Council participates in joint training and service delivery alongside other local government bodies in Scotland. The council is also involved in a joint transformation programme with SOLACE which aims to transition local government to a new service delivery model. The council delivers reciprocal training between all councils, with qualified coaches delivering these sessions. This encourages strengthening of working relationships between local government. Workforce trends outlined in the Strategic Workforce Planning Priorities show that temporary and casual staff have increased in recent years at around 16% of the workforce. Additionally, 60% of temporary staff leave before the end of their contract. This is being addressed in the Agile workforce plan, which aims to bring in greater hybrid/ flexible working arrangements promote more permanent positions. The Council should consider how it can improve employee retention and reduce the 60% of temporary staff ending their contract early. A high turnover and tendency for agency recruitment may lead to higher costs and reduced quality of services. The Agile Workforce plan is still in its early phase and as such we cannot determine how effective these working arrangements will be in changing the workforce trends. . The Council has plans to monitor and review the plans and these are scheduled alongside their review of the Hybrid and Flexible working policy, which is to be done annually at present. Yes – Risk identified relating to the increase in temporary and casual staff alongside high turnover rate before contracts end, in specific, hard to recruit service areas. Page 70
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64 Best Value (continued) Thematic reviews (continued) Thematic themes Our findings Our judgements Risks identified Measuring the impact of workforce planning Workforce planning actions laid out in the workforce planning risk matrix are monitored regularly on a quarterly basis. Operational line managers raise key concerns and suggestions which are taken to a workforce planning risk matrix. The council has several reviews targeted for completion within the 24/25 Financial year, these include: - A review of Flexible working policy - Regular quarterly reviews of Health of the Organisation ( HOO) reports - A review of the impact of the Council’s AB365 programme is underway - A Digital skills survey is to be repeated before March 2025 These contain key metrics and quantitative statistics for the chosen department/ Directorate compared to the council as a whole. Confirmed HOO Reports are used to monitor and inform workforce planning, with a section in the report relating to the delivery of a workforce plan. Council’s approach to workforce planning is actively being updated based on feedback to ensure that regular tracking of actions can be achieved. We will follow-up on these reviews in the following financial year once they have been completed. No significant issues noted. Page 71
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65 Best Value (continued) Statutory Performance Indicators We are required to report on the Council’s effectiveness and appropriateness of arrangements in place for complying with the Direction issued in December 2021, including the balance and timeliness of reporting to members along with its accessibility for citizens and communities. The table below details our overall assessment of the Council’s statutory performance indicators arrangements: Council Annual Reports | Argyll and Bute Council Council’s arrangements Our findings Our judgements Risks identified Statutory Performance Indicator 1: Improving local services and local outcomes Statutory Performance Indicator (SPI) 1 requires a council to report its performance in improving local public services and progress against agreed desired outcomes The Council’s website includes a section with information to help the public measure its performance. The website contains details on the nature of reports prepared and the frequency of preparation. It also contains links to strategic and area committee reports, as well as annual performance reports and the customer service charter and annual audit reports. The Council reports progress against its annual business plan to councillors. Progress is reported semi-annually to the Audit and Scrutiny Committee, and quarterly to Area Committees. On an annual basis, an annual performance review is undertaken by each service and an annual performance report is prepared and presented to the Council. For the 2023/24 financial year this is scheduled to be published in December 2024, as such information has not yet been released for 23/24. The prior year report can be found with others online: Council Annual Reports | Argyll and Bute Council. The Council has appropriate arrangements in place for complying with SPI 1. No significant issues identified. Page 72
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66 Best Value (continued) Statutory Performance Indicators We are required to report on the Council’s effectiveness and appropriateness of arrangements in place for complying with the Direction issued in December 2021, including the balance and timeliness of reporting to members along with its accessibility for citizens and communities. The table below details our overall assessment of the Council’s statutory performance indicators arrangements: Best Value 3 Report | Argyll and Bute Council Best Value 3 Report | Argyll and Bute Council Council’s arrangements Our findings Our judgements Risks identified Statutory Performance Indicator 2: Demonstrating Best Value SPI 2 requires a council to report its own assessment and audit, scrutiny and inspection body assessments of how it is performing against its duty of Best Value, and how it has responded to these assessments. The Council’s website includes a section on quarterly and annual reporting, which includes links to external audit reports. The Council’s website also includes its action plans in response to assessments made by audit, scrutiny and inspection bodies within the performance and improvement section of the website, for example its action plan on the previous Best Value Report 2020, which can be found online at: Best Value 3 Report | Argyll and Bute Council. The Council is compliant with SPI 2, as audit reports and assessments of the council are attached and accessible to the public on their website. No significant issues identified. Page 73
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Appendices A: Draft management representation letter B: Draft audit report C: Confirmation of our independence D: Other communications E: Wider scope and Best Value ratings Page 74
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68 Appendix A: Draft management representation letter Mark Outterside Forvis Mazars The Corner Bank Chambers 26 Mosley Street Newcastle upon Tyne NE1 1DF DD/MM/2024 Dear Mark Argyll and Bute Council - Audit for the Year Ended 31 March 2024 This representation letter is provided in connection with your audit of the financial statements of Argyll and Bute Council (the Council) and its group for the year ended 31 March 2024 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). I confirm that the following representations are made on the basis of enquiries of management and staff with relevant knowledge and experience (and, where appropriate, inspection of supporting documentation) sufficient to satisfy myself that I can properly make each of the following representations to you. My responsibility for the financial statements and accounting information I believe that I have fulfilled my responsibilities for the true and fair presentation and preparation of the financial statements in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). My responsibility to provide and disclose relevant information I have provided you with: • access to all information of which I am aware that is relevant to the preparation of the financial statements such as records, documentation and other material; • additional information that you have requested from us for the purpose of the audit; and • unrestricted access to individuals within the Council you determined it was necessary to contact in order to obtain audit evidence. I confirm as Section 95 Officer that I have taken all the necessary steps to make me aware of any relevant audit information and to establish that you, as auditors, are aware of this information. As far as I am aware there is no relevant audit information of which you, as auditors, are unaware. Accounting records I confirm that all transactions undertaken by the Council have been properly recorded in the accounting records and are reflected in the financial statements. All other records and related information, including minutes of all management and Board meetings, have been made available to you. Page 75
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69 Appendix A: Draft management representation letter Accounting policies I confirm that I have reviewed the accounting policies applied during the year in accordance with International Accounting Standard 8 and consider these policies to faithfully represent the effects of transactions, other events or conditions on the Council’s financial position, financial performance and cash flows. Accounting estimates, including those measured at fair value I confirm that the methods, significant assumptions and the data used by the Council in making the accounting estimates, including those measured at fair value are appropriate to achieve recognition, measurement or disclosure that is in accordance with the applicable financial reporting framework. Contingencies There are no material contingent losses including pending or potential litigation that should be accrued where: • information presently available indicates that it is probable that an asset has been impaired, or a liability had been incurred at the balance sheet date; and • the amount of the loss can be reasonably estimated. There are no material contingent losses that should be disclosed where, although either or both the conditions specified above are not met, there is a reasonable possibility that a loss, or a loss greater than that accrued, may have been incurred at the balance sheet date. There are no contingent gains which should be disclosed. All material matters, including unasserted claims, that may result in litigation against the Council have been brought to your attention. All known actual or possible litigation and claims whose effects should be considered when preparing the financial statements have been disclosed to you and accounted for and disclosed in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). Laws and regulations I confirm that I have disclosed to you all those events of which I are aware which involve known or suspected non-compliance with laws and regulations, together with the actual or contingent consequences which may arise therefrom. We have complied with all aspects of contractual agreements that would have a material effect on the accounts in the event of non-compliance. Page 76
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70 Appendix A: Draft management representation letter Fraud and error I acknowledge my responsibility as Section 95 Officer for the design, implementation and maintenance of internal control to prevent and detect fraud and error. I have disclosed to you: • all the results of my assessment of the risk that the financial statements may be materially misstated as a result of fraud; • all knowledge of fraud or suspected fraud affecting the Council involving: ▪management and those charged with governance; ▪employees who have significant roles in internal control; and ▪others where fraud could have a material effect on the financial statements. I have disclosed to you all information in relation to any allegations of fraud, or suspected fraud, affecting the Council's financial statements communicated by employees, former employees, analysts, regulators or others. Related party transactions I confirm that all related party relationships, transactions and balances, have been appropriately accounted for and disclosed in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). I have disclosed to you the identity of the Council’s related parties and all related party relationships and transactions of which I are aware. Future commitments I am not aware of any plans, intentions or commitments that may materially affect the carrying value or classification of assets and liabilities or give rise to additional liabilities. Ultimate parent company I confirm that the ultimate parent company for Argyll and Bute Council and its Group is the Scottish Government. Other Matters I confirm in relation to the following matters that: • COVID-19 – I have assessed the continued impact of the COVID-19 Virus pandemic on the Council and the financial statements and those of the Group, including the impact of mitigation measures and uncertainties, and am satisfied that the financial statements and supporting notes fairly reflect that assessment. • Ukraine – I confirm that I have carried out an assessment of the potential impact of the continued conflict in Ukraine on the Council and its Group and there is no significant impact on the Council’s operations from restrictions or sanctions in place. • RAAC – I confirm the Council has assessed the potential impact of Reinforced Autoclaved Aerated Concrete on the Council, and whether there are indications of a need for an impairment of the Council’s property, plant and equipment balances. I confirm there are no such indications of impairment in those assets. Going concern To the best of my knowledge there is nothing to indicate that the Council and its Group will not continue as a going concern in the foreseeable future. The period to which I have paid particular attention in assessing the appropriateness of the going concern basis is not less than twelve months from the date of approval of the accounts. Page 77
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71 Appendix A: Draft management representation letter Performance related allocations I confirm that I am not aware of any reason why the Council’s funding allocation limits would be changed. Subsequent events I confirm all events subsequent to the date of the financial statements and for which the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code), require adjustment or disclosure have been adjusted or disclosed. Should further material events occur after the date of this letter which may necessitate revision of the figures included in the financial statements or inclusion of a note thereto, I will advise you accordingly. Annual Governance Statement I am satisfied that the Annual Governance Statement fairly reflects the Council and its Group's risk assurance and governance framework, and I confirm that I am not aware of any significant risks that are not disclosed within the Annual Governance Statement. Annual Report The disclosures within the Annual Report and the Remuneration Report fairly reflect my understanding of the Council and its Group’s financial and operating performance over the period covered by the financial statements. Unadjusted misstatements I confirm that the effects of the unadjusted misstatements are immaterial, both individually and in aggregate, to the financial statements as a whole. Yours sincerely Kirsty Flanagan Section 95 Officer Page 78
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72 Appendix B: Draft audit report Independent auditor’s report to the members of Argyll and Bute Council and the Accounts Commission Report on the audit of the financial statements Opinion on the financial statements We certify that we have audited the financial statements in the annual accounts of Argyll and Bute Council and its group for the year ended 31 March 2024 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Statement of Comprehensive Income and Expenditure, the Balance Sheet, the Statement of Movement in Reserves, the Cash Flow Statement and notes to the financial statements, including significant accounting policies, the Group Statement of Comprehensive Income and Expenditure, the Group Balance Sheet, the Group Statement of Movement in Reserves, the Group Cash Flow Statement and notes to the group financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Council and its group as at 31 March 2024 and of its income and expenditure of the Council and its group for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2023/24 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 18 May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the Council and its group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Council and its group. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Council and its group’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Council and its group’s current or future financial sustainability. However, we report on the Council’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement We report in our Annual Audit Report the most significant assessed risks of material misstatement that we identified and our judgements thereon. Page 79
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73 Appendix B: Draft audit report Responsibilities of the Section 95 Officer and the Audit and Scrutiny Committee for the financial statements As explained more fully in the Statement of Responsibilities, the Section 95 Officer is responsible for the preparation of financial statements, that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Section 95 Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Section 95 Officer is responsible for assessing each year the Council and its group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the operations of the Council and its group. The Audit and Scrutiny Committee is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Council and its group; • inquiring of the Section 95 Officer as to other laws or regulations that may be expected to have a fundamental effect on the Council and its group; • inquiring of the Section 95 Officer concerning the Council’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Council and its group’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Page 80
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74 Appendix B: Draft audit report Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report We have audited the parts of the Remuneration Report described as audited. In our opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Section 95 Officer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In our opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which we are required to report by exception We are required by the Accounts Commission to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Page 81
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75 Appendix B: Draft audit report Conclusions on wider scope responsibilities In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in our Annual Audit Report. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Mark Outterside For and on behalf of Forvis Mazars LLP Forvis Mazars LLP 26 Mosley Street Newcastle upon Tyne NE1 1DF XXXX December 2024 Page 82
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76 Appendix C: Confirmation of our independence We communicate any matters which we believe may have a bearing on our independence or the objectivity of Forvis Mazars LLP and the audit team. As part of our ongoing risk assessment, we monitor our relationships with you to identify any new actual or perceived threats to our independence within the regulatory or professional requirements governing us as your auditors. We confirm that no new threats to independence have been identified since issuing our Annual Audit Plan and therefore we remain independent. Page 83
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77 Appendix C: Confirmation of our independence (continued) Fees for work as the Council’s auditor We reported our proposed fees for the delivery of our work under the Code of Audit Practice in our Annual Audit Plan presented to the Audit and Scrutiny Committee in June 2024. Having substantially completed our work for the 2023/24 financial year, we can confirm that our fees are as follows: Area of work 2023/24 fees 2022/23 fees Auditor remuneration £251,690 £237,440 Pooled costs £9,170 £0 Contribution to PABV costs £63,850 £57,770 Audit support costs £0 £9,000 Sectoral cap adjustment (£110) (£2,030) Additional fees in respect of testing required to reflect the transition to a new ledger in 2022/23 0 £4,225 Total fees £324,600 £310,465 Fees for other work We confirm that we have not undertaken any non-audit services for the Council in the year. Fees for audit of Charitable Trusts The audit fee in table above does not include the cost of auditing the Council’s 7 Scottish Charity Regulator (OSCR) registered charitable trusts. We propose setting a fee for the audit of these of £9,000 (2022/23 fees were £6,500). Services provided to other entities within the Council's group In addition, to auditing the Council’s 7 charitable trusts mentioned above, we are providing audit services to the following entities in the Council's group: • Argyll and Bute Integration Joint Board (total fee of £33,360) • Dunbartonshire and Argyll & Bute Valuation Joint Board (total fee of £9,320). • Live Argyll (total fee of £18,200) Page 84
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78 Appendix D: Other communications Blank Other communication Response Compliance with Laws and Regulations We have not identified any significant matters involving actual or suspected non-compliance with laws and regulations. We will obtain written representations from management that all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements have been disclosed. External confirmations We did not experience any issues with respect to obtaining external confirmations. Related parties We did not identify any significant matters relating to the audit of related parties. We will obtain written representations from management confirming that: a. they have disclosed to us the identity of related parties and all the related party relationships and transactions of which they are aware; and b. they have appropriately accounted for and disclosed such relationships and transactions in accordance with the requirements of the applicable financial reporting framework. Going Concern We have not identified any evidence to cause us to disagree with the Section 95 Officer that the Council will be a going concern, and therefore we have not identified any evidence to cause us to consider that the use of the going concern assumption in preparation of the financial statements is not appropriate. We will obtain written representations from management, confirming that all relevant information covering a period of at least 12 months from the date of approval of the financial statements has been taken into account in assessing the appropriateness of the going concern basis of preparation of the financial statements. Page 85
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79 Appendix D: Other communications (continued) Blank Other communication Response Subsequent events We are required to obtain evidence about whether events occurring between the date of the financial statements and the date of the auditor’s report that require adjustment of, or disclosure in, the financial statements are appropriately reflected in those financial statements in accordance with the applicable financial reporting framework. We will obtain written representations from management that all events occurring subsequent to the date of the financial statements and for which the applicable financial reporting framework requires adjustment or disclosure have been adjusted or disclosed. Matters related to fraud We have designed our audit approach to obtain reasonable assurance whether the financial statements as a whole are free from material misstatement due to fraud. In addition, we have assessed the adequacy of the Council’s arrangements for preventing and detecting fraud or other irregularities as part of the wider scope audit and concluded that they are sufficiently designed and implemented. We will obtain written representations from management, and where appropriate the Audit and Scrutiny Committee, confirming that: a) they acknowledge their responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud; b) they have disclosed to the auditor the results of management’s assessment of the risk that the financial statements may be materially misstated as a result of fraud; c) they have disclosed to the auditor their knowledge of fraud or suspected fraud affecting the entity involving: i. Management; ii. Employees who have significant roles in internal control; or iii. Others where the fraud could have a material effect on the financial statements; and d) they have disclosed to the auditor their knowledge of any allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators or others. Page 86
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80 Appendix D: Other communications (continued) Blank Other communication Response National Fraud Initiative The National Fraud Initiative (NFI) in Scotland is a counter-fraud exercise led by Audit Scotland and overseen by the UK’s Cabinet Office, designed to prevent and detect fraud. The NFI uses data analytics to compare information held on individual by different public bodies to highlight the existence of fraud or error. The Council has received matches for investigation in 2023 which are required to be investigated by 30 September 2023. We have monitored the Council’s participation and progress during the 2023/24 audit. During the 22/23 NFI exercise, the Council received a total of 48 reports containing 1,783 matches. Using a risk-based approach, the Council investigated 71.8% of the matches. A further 2,557 matches were made within council tax registers that form the basis of the Council Tax recheck and related work carried out by the Councils Counter Fraud Team on the back of the NFI matching in this area. The 22/23 investigation continued beyond 30 September 2023 therefore we continued to monitor the Council’s participation and progress during 2023/24 and found that 1,188 of the matches identified were cleared, with 93 data errors. Page 87
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81 Appendix E: Wider scope and Best Value ratings We need to gather sufficient evidence to support our commentary on the Council’s arrangements and to identify and report on any risks. We will carry out more detailed work where we identify significant risks. Where significant risks are identified we will report these to the Council and make recommendations for improvement. In addition to local risks, we consider challenges that are impacting the public sector as a whole. We have assigned priority rankings to each of the risks identified to reflect the importance that we consider each poses to your organisation and, hence, our recommendation in terms of the urgency of required action. The table below describes the meaning behind each rating that we have awarded to each wider scope area based on the work we have performed. Rating Description Level 1 The identified risk and/or significant deficiency is critical to the business processes or the achievement of business strategic objectives. There is potential for financial loss, damage to reputation or loss of information. The recommendation should be taken into consideration by management immediately. Level 2 The identified risk and/or significant deficiency may impact on individual objectives or business processes. The audited body should implement the recommendation to strengthen internal controls or enhance business efficiency. The recommendations should be actioned in the near future. Level 3 The identified risk and/or significant deficiency is an area for improvement or less significant. In our view, the audited body should action the recommendation, but management do not need to prioritise. Page 88
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Contact Forvis Mazars www.auditregister.org.uk Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Wales with registered number OC308299 and with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73 © Forvis Mazars 2024. All rights reserved. Contact information Mark Outterside Audit Director Tel: +44 191 383 6339 mark.outterside@mazars.com Page 89
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Argyll and Bute Council Comhairle Earra Ghàidheal agus Bhòid Audited Annual Accounts For the year ended 31 March 2024 Appendix 3Page 90
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FRONT COVER PICTURE: HELENSBURGH WATERFRONT DEVELOPMENT Page 91
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LANGUAGE OPTIONS If you would like this document in another language or format, or if you require the services of an interpreter, please contact us. Financial Services Argyll and Bute Council Kilmory Lochgilphead Argyll PA31 8RT Tel: 01546 605522 Page 92
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ANNUAL ACCOUNTS CONTENTS www.argyll-bute.gov.uk ________________________________________________ Page 1 Page Management Commentary 4-26 Statement of Responsibilities for the Annual Accounts 27 Annual Governance Statement 28-41 The Remuneration Report 42-50 Statement of Comprehensive Income and Expenditure 51-52 Balance Sheet 53-54 Statement of Movement in Reserves – Movement in 2023-24 55-56 Statement of Movement in Reserves – Comparative Movement in 2022-23 57-58 Cash Flow Statement 59 Notes to the Financial Statements (See Page 2-3) 60-124 Council Tax Income Account 125 Notes to the Council Tax Income Account 126 Non Domestic Rate Income Account 127 Notes to the Non Domestic Rate Income Account 128 Group Accounts - Introduction 129 Group Statement of Comprehensive Income and Expenditure 130 Group Balance Sheet 131-132 Group Statement of Movement in Reserves – Movement in 2023-24 133 Group Statement of Movement in Reserves – Comparative Movement 2022-23 Group Cash Flow Statement 134 135 Notes to the Group Financial Statements 136-140 Independent Auditors Report 141-144 Glossary of Terms Appendix A: Trade Union Facility Time Statement 2023-24 145-146 147-148 Page 93
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Notes to the Financial Statements Contents www.argyll-bute.gov.uk ________________________________________________ Page 2 P Note No Page 1 Summary of Significant Accounting Policies 60-73 2 Accounting Standards Issued But Not Yet Adopted 73 3 Critical Judgements in Applying Accounting Policies 73-74 4 Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty 74-76 5 Expenditure and Funding Analysis 77-80 6 General Fund Reserves 81-82 7 Supplementary Notes to the Statement of Comprehensive Income and Expenditure 83-84 8 Other Operating Income and Expenditure 84 9 Agency Services 84 10 Community Care and Health (Scotland) Act 2002 85 11 Fees Payable to External Auditors 85 12 Waste Management Public Private Partnership 86 13 Grant Income 86 14 Related Parties 87-88 15 Property, Plant and Equipment 89-94 16 Heritage Assets 94 17 Intangible Assets 95 18 Investment Property 96 19 Schools Built under Public Private Partnership Contracts (PPP) 96-99 20 Operating Leases 100 21 Finance Leases 100-101 22 Long Term Debtors 102 23 Debtors 102 24 Assets Held for Sale 103 25 Cash and Cash Equivalents 103 26 Creditors 104 27 Financial Instruments Disclosures 104-107 28 Other Liabilities 108 Page 94
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Notes to the Financial Statements Contents www.argyll-bute.gov.uk _______________________________________________ Page 3 Note No Page 29 Provisions 108-109 30 Capital Grants Received in Advance 109 31 Defined Benefit Pension Schemes 110-117 32 Unusable Reserves 117-118 33 Usable Reserves 118-119 34 Contingent Liabilities 119-120 35 Termination Benefits 120 36 Trust Funds and Other Third Party Funds 121 37 Common Good Funds 121-122 38 Tax Incremental Financing (TIF) Projects 122 39 Cash Flow Statement – Operating Activities 123 40 Cash Flow Statement – Investing Activities 123 41 Cash Flow Statement – Financing Activities 124 Page 95
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 4 1. INTRODUCTION Welcome to the financial statements for Argyll and Bute Council and its group for the year ended 31 March 2024. The statements have been compiled in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (the Code). This commentary outlines the key messages regarding the performance of the Council over the 2023-24 financial year as well as providing an indication of risks and issues which may impact upon the Council in the future. 2. PROFILE OF ARGYLL AND BUTE COUNCIL The report starts with outlining some key facts about Argyll and Bute. Page 96
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 5 3. VISION AND PRIORITIES The Council has a new 5 year Corporate Plan for the period 2023-2027 and also an Annual Business Plan. This new document replaces the former annual Service Plans to bring more focus and scrutiny on the delivery and performance of the organisation against its priorities. This delivers on the recommendation in our Best Value Audit to make the link between priorities and performance clearer. The Council’s vision is: We have a vision for a successful, vibrant Argyll and Bute with a growing population and a thriving economy. A place where people want to come to live, to work and to do business as a result of action to combat and reverse decline. We see the potential for thriving local economies that support our rich mix of remote, rural and island communities. Communities which also benefit from services that work – Page 97
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 6 where we make the best use of all of our resources so that our core business as a council is as effective as possible. We want Argyll and Bute’s communities to be on a level playing field with others around the country – that is why we will campaign for equity for our communities on issues like fair funding, coping with challenges like the cost of living, and securing digital access and physical access to other opportunities. We will do our utmost to ensure that local voices and needs are taken into account in national decision- making. We recognise that the cost of living crisis will affect countless households in Argyll and Bute. We want to play a part in responding to that and mitigating the impact on our communities’ overall wellbeing and future success. We see our council and our communities working together in playing our part and making our contributions to wider priorities like climate change, economic growth, strong local governance and more – using our strong track record in partnership working, at all levels, to secure the best possible outcomes. Our Priorities for the Council Term 2022 to 2027 are shaped around delivering this vision for Argyll and Bute, our people, our success and our future. At the Council meeting on 25 April 2024 there was a change in political management arrangements and therefore a new Corporate Plan for the period 2024-2028 will be prepared and presented to Council with updated priorities during 2024-25. Details on activity, for each financial year, against the Council priorities will be set out in a new Council Annual Business Plan which will also be presented to Council at the same time. The Argyll and Bute Community Planning Partnership (CPP) brings together local public services with communities they service, and provides a focus for partnership working that targets specific local circumstances. Partners work together to improve local services and to ensure that they meet the needs of local people, especially those who need the services most. The Argyll and Bute Outcome Improvement Plan has been in place for the last 10 years and had six key outcomes: • Our economy is diverse and thriving • We have an infrastructure that supports sustainable growth, • Education skills and training maximise opportunities for all, • Children and young people have the best possible start, • People live active, healthier and independent lives, • People will live in safe and stronger communities. The Argyll and Bute CPP has completed its community engagement on identifying the priorities for the next 10 years (2024 – 2034) and these are: 1. Transport Infrastructure, 2. Housing, 3. Community Wellbeing. Argyll and Bute Council will continue to be a leading partner in the partnership and ensure that the priorities of the CPP and the Council are aligned. Page 98
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 7 Some of our achievements, and the challenges we faced, in relation to the Council’s agreed Corporate Outcomes are highlighted below. Our economy is diverse and thriving Ardrishaig North Public Realm Project It was a long term aspiration of local residents and community organisations in Ardrishaig to see spaces be made more attractive including provision of better space for community events, improvements to the car parks and upgrading of the paths and landscaping. As part of an ambitious capital regeneration programme to help stimulate further public and private sector investment, works within Ardrishaig began in August 2022 and were certified as complete during 2023-24. These works included: • A new lochside viewing area with additional seating and art work; • Alterations to the north car park including an expansion of disabled parking; • New artwork on the canal embankment; • Reconfiguration of the memorial garden to include new seating areas, picnic benches and a path; • Improved accessibility for the Argyll Sea Kayak Trail making it easier for kayakers to go between Loch Fyne and the Crinan Canal; We have an infrastructure that supports sustainable growth Developing Infrastructure for Drones In 2023, the Council won the COSLA Excellence Award for innovation due to its work developing infrastructure and service change by using drones. The Council worked with Skyports (an international drone company) to develop a deliverable school meal delivery system using drone technology. This culminated in a successful pilot flight, which delivered school meals from Oban Airport to Lochnell Primary School, enabling proof of concept to be delivered. Argyll and Bute’s island and remote schools can often struggle to recruit catering staff and travel times to supply perishable goods can be long using roads and ferries. Drones potentially offer a low carbon and quicker alternative to traditional transport. Planning permission has now been granted to establish a permanent Oban Drone Facility to enable commercial deliveries in the area, with schools meals continuing to be a pilot test subject. Page 99
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 8 Funding has now been secured to establish this and the project is a component part of development of a new business park at Oban Airport. This will be the first permanent Drone Facility in the UK. This ensures that it is a sustainable delivery mechanism for the school meals and other service in the future. The Council has also been awarded £250K from the Regulator’s Pioneer Fund for the development of the UAV logistics hub, based at Oban Airport, to serve the islands, building on the pilot approach. Weather Incident During October 2023 Argyll and Bute suffered extensive storm damage and a major incident was declared within the Council area. The flooding resulted in substantial damage to bridges and a number of landslides which disrupted the roads network and cut off some areas altogether. Transport connections in and out of Argyll and Bute were severely compromised and for a period of time all of the trunk roads and many of the local roads were impassible. A number of helicopter evacuations took place and reception centres were set up in the immediate aftermath. This incident was unprecedented and every effort was made to re-open roads when safe to do so however some routes required more considerable remedial action. Works carried out were extensive with dozens of locations requiring attention from simple cleansing of a small drain to significant landslides requiring temporary roads to be created and full bridge replacements. Furthermore, to ensure all children in the impacted areas were able to attend school transport via boat was arranged. Road Safety Improvements During 2023-24 the Councils Network and Standards team secured £0.270m of funding from the National Road Safety Improvement Fund. This has allowed a number of safety improvements to our roads and footways including: • Village gateways at Clynder, Kilcreggan, Rosneath and Garelochhead including coloured surfacing at access points and speed roundels. Page 100
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 9 • Two new sections of footway at School Street, Bowmore with improved drainage, road markings and street lighting. • Carriageway widening and footway construction at Millpark Road, Oban including improvements to drainage, road markings and street lighting. • Provision of new footway in Taynuilt resulting in a safe route for school children to utilise. Education skills and training maximise opportunities for all Inclusion and Equality Argyll and Bute Council is investing more than £1.7 million over the next few years to establish four new Learning Centres in its schools so that children and young people with more complex Additional Support Needs (ASN) can benefit from enhanced and specialist support. This decision means that the Council will create dedicated primary Learning Centre provision in south Kintyre, cross-sector provision on Mull and Islay, as well as an additional Learning Centre targeted at secondary learners in Helensburgh and Lomond. The new Learning Centres at Castlehill Primary and Islay High School are scheduled to open in August 2024. The new facilities will include: • Breakout quiet rooms • Low stimulus and high stimulus sensory rooms • Changing facilities with specialist equipment to meet specific physical needs • Accessible teaching and outdoor spaces This development offers an exciting new opportunity for staffing as well. The teachers will work as part of a team to support children with severe and complex learning needs and/or complex medical/health needs. An important part of their role will involve planning and delivering individualised/elaborated curricula for children with a wide range of needs. Working with colleagues in other establishments and partner agencies will form an important part of their role too. ASN Assistants will also be recruited in the coming months to support teaching staff based in the new Learning Centre to deliver individualised/elaborated curricula and help the children and young people to develop vital life-skills. The new Learning Centres will support all learners to achieve their potential right here in Argyll and Bute. Page 101
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 10 Care Experienced Children and Young People (CECYP) The Care Experienced Education Team (CEET) team were part of the Developing the Young Workforce Conference and attended alongside our care experienced Vice Chair of the Corporate Parenting Board along with some of our Oban based care experienced young people. We delivered a Raising Awareness session to approximately 120 delegates to discuss how to support a care experienced young person in the workplace. Feedback collated to date has been positive with some employers indicating a commitment to action. Following a successful application, the Virtual School for CECYP has received a £1000 Award from the Argyll Community Housing Association (ACHA) 10th Anniversary Legacy School Awards Scheme. This will be used to support a new initiative for care experienced young people moving schools. Each CECYP person who moves school, within the authority or joins from out with the authority, will receive an ‘Always Belong’ box of resources. This project will begin in the 2024 – 25 academic year by listening to our current CECYP suggestions of what should be in the box. To date, we remain at zero care experienced children and young people excluded in this academic year. This can be attributed to a robust exclusion policy, an ongoing commitment from staff across our settings and a clear vision of inclusion from senior leaders across our Education Service. The Care Experience Education Team and Argyll and Bute Councils Chief Officers Group both achieved the We Promise Award being the first team in Scotland and first senior Council team in Scotland respectively to achieve this award. MCR Pathways In session 2023/24, the MCR Pathways Programme was established in three Argyll and Bute secondary schools: Hermitage Academy, Dunoon Grammar School and Oban High School. This programme addresses the gap in life-chances and educational outcomes, between care experienced young people and their peers through a school- based mentoring programme. An MCR Pathways Co-ordinator was appointed in each school. Each school contributed £12,000 to the overall cost of Co-ordinator recruitment (£35,309 per school, including on-costs), with the remainder being sourced internally by the Education Service. All other central costs for the running of the programme (around £28,000 per school) were covered by Scottish Government funding. Such government funding is secure until the end of the 2025/26 session for the three above schools which commenced the MCR Pathways programme in August 2023. In year 1, the MCR Pathways programme in all three schools has been highly successful, with all targets met or exceeded, and positive feedback provided by young people, mentors, Co-ordinators and MCR Pathways. Discussion with MCR Pathways has confirmed the possibility of expanding the MCR Pathways Programme to a further three schools in 2024/25: Rothesay Joint Campus, Lochgilphead Joint Campus and Campbeltown Grammar School. Page 102
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 11 Children and young people have the best possible start Childcare provision Our delivery trial of purchase-able childcare for working parents in some remote and rural communities, continues to support new parents return to work. On Bute, where an acute lack of childcare affected a growing number of parents return to work after childbirth, this provision is now being permanently delivered, as a result of building renovations to the Joint Campus. In its early stages, this provision will support increasing numbers of the islands parents engage in work or training opportunities, supporting the economic sustainability of young families Developing the Young Workforce (DYW) The second annual DYW Argyll & Bute Conference took place in May, in the Corran Halls, Oban. The purpose of the conference was to promote and celebrate the range of agencies and partnerships participating in preparing young people for the world of work, and the scope of activities and initiatives involved in doing so. This year’s conference had a particular focus on meeting the needs of and providing opportunities for the young people who need them most. The day itself involved around 100 delegates made up of Education colleagues, Community Learning and Development, Skills Development Scotland, employers, Third Sector partners and other agencies and organisations contributing to the DYW agenda across Argyll & Bute. Key elements of the conference included presentations from Who Cares? Scotland, Inspiralba, and a series of interactive workshops for delegates to take part in. The highlight of the day for many was the contributions from young people who were able to address first-hand how delegates could improve further their offering for young people across the region. The day culminated in a keynote speech from the Minister for Higher and Further Education, Graeme Dey MSP. Feedback from the event has been overwhelmingly positive with plans already being made for next year. People Live Active Healthier and Independent Lives Active Travel App In 2023/24, through funding from Smarter Choices Smarter Places, Argyll and Bute Council worked with the Heart of Argyll Wildlife Organisation and Aerial Digital to create a walking and cycling app for Mid Argyll. The app ‘Discover Dalriada Mid Argyll’ has been downloaded more than 250 times since its launch in April 2024. The app is designed to encourage people to get out and explore the Mid Argyll area through a series of self-guided walking, wheeling and cycling trails with each trail highlighting and providing additional information on a range of points of interest that can be seen along the trail. Page 103
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 12 The app also includes an ‘Eye Spy’ fun family challenge game. The Discover Dalriada Mid Argyll app is the latest in a series of active travel apps that have been developed over recent years and there are now active travel apps for: • Campbeltown • Dunoon • Helensburgh • Mid-Argyll • Oban • Rothesay Food for Thought Two schools were successful in Food for Thought grants. Gigha pupils planted and harvested their own produce and also used the grant to set up poultry farming (hens). Their produce is being used within school and community. Additional workshops for families were provided by a nutritionist to develop community knowledge of healthy recipes with locally available, affordable produce. A further session was provided for the community with the Gigha Foodies Group which allowed everyone on the island to access the knowledge of a professional nutritionist to help plan and make simple yet nutritious meals with ingredients which can be grown locally/purchased affordably. Funds in Ardrishaig have supported the purchase and use of gardening resources and materials to develop growth of food on school grounds. This is being used to learn about healthy eating and supports the sale of school-produce within the local community. People will live in safer and stronger communities Mentors In Violence Prevention (MVP) The Mentors In Violence Prevention (MVP) programme has continued to be developed across our secondary schools. The Programme is a mentor based programme that addresses gender based violence. This work continues to be an important part of the Violence Against Women and Girls Project. In November 23, a further 17 staff were trained, including partner agencies. This has increased engaged schools from 3 to 7. This exceeds our target for school engagement within our development plan. The work continues to bring together engagement from partners such as Police Scotland and Argyll & Bute Rape Crisis. Our aim for the next academic session would be to ensure engagement across all secondary schools and build capacity within our training team. Page 104
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 13 4. FINANCIAL PERFORMANCE 2023-24 The Council has a robust financial reporting framework in place and a comprehensive monitoring pack is prepared and presented to every Policy and Resources Committee. This includes reports on the revenue budget, capital plan, financial risks, treasury monitoring, reserves and balances and delivery of any previously agreed savings. The financial framework is shown on the left. Revenue: Outturn against Budget The performance against budget for financial year 2023-24, after adjusting for automatic and proposed earmarked reserve proposals, was an overall underspend of £1.728m, 0.55% as summarised in the table below. (The corresponding position for 2022-23 was an underspend of £3.273m, 1.06%.) 2023-24 Final Revenue Budget Outturn Actuals Budget Variance Percentage Adjusted for Automatic Earmarkings (Overspend) Underspend £000 £000 £000 % Chief Executive's Unit 1,155 1,161 6 0.53% Executive Director (Douglas Hendry) 139,308 139,999 691 0.49% Executive Director (Kirsty Flanagan) 58,610 57,258 (1,352) (2.36%) Weather related incident costs (not covered by Bellwin Scheme) 839 0 (839) 0.0% Joint Boards 1,319 1,396 77 5.56% Other 11,584 11,584 0 0.0% Service Concessions (40,869) (40,489) 380 (0.94%) Social Work 77,605 77,605 0 0.0% Net Expenditure 249,551 248,514 (1,037) (0.42%) Total Funding 314,827 314,794 33 0.01% OVERSPEND PRIOR TO LOANS FUND (1,004) (0.32%) Loans Fund 8,615 14,547 5,932 40.78% UNDERSPEND BEFORE EARMARKINGS 4,928 1.57% Proposed Unspent Budget Earmarking Proposals (3,200) UNDERSPEND AFTER PROPOSED EARMARKINGS 1,728 0.55% Page 105
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 14 Within the Chief Executive’s Unit (Community Planning) there was a small underspend resulting within travel codes due to staff travel costs coming in under budget due to increased digital working and less face to face meetings. Within the remit of Executive Director Douglas Hendry (Education, Legal and Regulatory Services and Commercial Services), there was an overall underspend due to: • Receipt of one-off historic water rate refunds. • Staffing underspends due to delays in recruitment and staffing underspends within Cleaning, Early Learning and Childcare and Legal and Regulatory Support. • Underspends within the Scheme of Devolved School Management where previous carry forwards were not fully utilised. Within the remit of Executive Director Kirsty Flanagan (Roads and Infrastructure, Development and Economic Growth, Customer Support Services and Financial Services) there was an overall overspend due to: • Reduction in income within Piers and Harbours • Additional fleet costs across the service • Increased staff costs for Pupil Transport • An unrealised Depot saving • Increased electricity costs for street lighting • Additional Car Parking maintenance costs • Reduction in TRO income in Roads. There were also costs relating to a significant weather incident that occurred during 2023-24 that could not be claimed through the Scottish Government’s Bellwin scheme which resulted in an overspend. Social Work, managed by the Health and Social Care Partnership, reported an overspend of £0.165m as a result of ongoing demand for older people care services, both residential and non-residential. Per CIPFA/LASAAC Guidance in prior years an earmarking relating to the HSCP was recognised as a creditor on the Council’s balance sheet making the funds available to Social Work to spend in future years, therefore this over spend has been drawn down from the creditor balance. There is a favourable year-end position in relation to Council Tax of which was due to Council Tax debt recovery after court summons being higher than anticipated. There was an underspend within the Loans Fund due to a number of reasons but largely as a result of effective Treasury Management which saw increased levels of interest received on investments combined with reduced borrowing costs which resulted in an improved position in excess of £3m compared to previous year. Significant slippage in the capital programme in 2022-23 resulted in lower principal repayments in 2023-24 than anticipated and there was also a one-off gain of £0.870m as a result of a discount received on the early repayment of loans. In 2023-24 the Council adopted the financial flexibility introduced by the Scottish Government relating to two service concession contracts for NPDO and DBFM schools which allowed the associated borrowing to be accounted for over the life of the asset as opposed to the life of the contract (see note 6.2 for further detail). This resulted in a one-off retrospective gain of £36.038m and gain in 2023-24 of £4.831m. As part of the 2024-25 budget setting process Council agreed to transfer £0.380m from the Service Concessions gain to the General Fund hence there is an underspend in 2023-24 relating to this that will increase the General Fund. Page 106
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 15 The overall favourable position for Departmental and Central Expenditure Budgets due to the underspend within the Loans Fund has provided the opportunity to earmark unspent budget for specific purposes aligned to the objectives, priorities and targets of the Council. Delivery of 2023-24 Agreed Savings The Council has been required to make significant budget savings for a number of years in order to ensure it responds to continued funding reductions, rising cost pressures and complies with its statutory requirement to set a balanced budget whilst meeting the needs of local residents. Budget savings of £9.348m (20 saving options) were agreed for 2023-24. These, and savings agreed in previous years which had to be delivered in 2023-24 totalling £0.031m (3 saving options), were monitored throughout the year. The chart on the right shows the overall delivery of savings and any shortfall was absorbed within departmental resources as is evidenced from the overall departmental underspends. Some of these saving options were non- recurring in nature (£2.581m). Capital: Outturn against Budget The net 2023-24 capital expenditure was £37.860m compared to an annual budget of £33.166m, (adjusted during the year for previously agreed slippages, accelerations and virements) giving rise to a year end overspend of £4.694m (14.15%). There are a number of under and (overspends) within the outturn position, the most significant are noted below: Page 107
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 16 Project (Over)/Under Spend (£m) Explanation Roads Reconstruction 0.507 Funding received late in 2023-24 so carried forward into 2024-25 when spend will be incurred. Oban High School Replacement 0.406 Ongoing negotiations with contractor have delayed final payments and retention invoices which are outstanding. Shared Offices 0.372 Delays in expenditure as only minor works have been carried out to offices during 2023-24 due to office rationalisation project. Town Centre Funds (0.350) External funding will not be received until works are complete. Overall the project is within budget. Harbour Investment Programme (0.408) Reversal of previous slippage - consultancy work at Fionnphort and Port Askaig concluded earlier than previously anticipated. Overall the project is within budget. Kilmory Business Park (0.432) Delays in invoicing due to legal requirements resulting in delays in receiving external funding. Overall the project is within budget. Environmental Projects Income (0.500) External funding will not be received until works are complete which creates an in year variance. Overall the project is within budget. CHORD – Rothesay Income (1.435) External funding will not be received until works are complete which creates an in year variance. Overall the project is within budget. Dunoon STEM Hub Income (2.050) Project has been delayed due ongoing discussions regarding the location of the STEM Hub and budgeted income will not be received until the project is complete. Overall the project is within budget. Helensburgh Waterfront Income (2.369) Timing of receipt of funding causing 2023-24 variance which will be received in 2024-25. Overall the project is within budget. After accounting for previously agreed slippages, the total slippage in the capital programme in 2023-24 was £23.143m. In 2023-24 capital expenditure across Scotland’s councils continues to be impacted by increased inflation rates and shortages in construction materials, affecting both cost and delivery plans. There are also elements of slippage that can be attributed to incorrect profiling of spend at the start of the financial year as opposed to delays in the programme. There are 169 projects within the Capital Plan: 143 of the projects are complete or on track and 26 are off track but recoverable as a result of the slippage mentioned previously within the capital programme. There are no projects off track that are not recoverable. Health and Social Care Partnership (HSCP) The Argyll and Bute Integration Joint Board (IJB) with responsibility for Social Work and a range of health services was established and came into effect on 1 April 2016. The Council approved the 2023-24 budget on 23 February 2023 and the amount approved for Social Work services transferring to the Integration Joint Board for 2023-24 was £76.253m. The budget figures quoted in the previous outturn table include in-year adjustments. In terms of the outturn position, the HSCP has reported an underspend for 2023-24 of £2.889m and there is no debt outstanding to the Council. The Council has a creditor totalling £3.389m on its balance sheet in relation to earmarked reserves which the Council holds on behalf of the HSCP. The earmarked balance comprises £0.791m of Scottish Government funding for a range of specific Scottish Government Initiatives, £0.630m of general reserves and £1.968m for service transformation and infrastructure investment. Page 108
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 17 5. FINANCIAL STATEMENTS Comprehensive Income and Expenditure Statement (CIES) The CIES shows the accounting cost of providing services rather than the amount to be funded from taxation. Councils raise taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement. The Council is required to make various statutory accounting adjustments to the net cost of services as reported in the budgetary outturn in order to comply with the Code of Practice for Local Authority Accounting in the United Kingdom 2023-24. These accounting adjustments include depreciation, loans fund principal repayment and accrued holiday leave not taken by 31 March 2024. Internal income also requires to be removed between segments within the CIES. Reconciliation of CIES to Revenue Budget Outturn A reconciliation of the Surplus on the Provision of Services of £9.765m as noted in the CIES to the revenue budget outturn of £1.728m underspend is shown below. Reconciliation of CIES to Revenue Budget Outturn £000 £000 Surplus/(Deficit) on Provision of Services 9,765 Remove statutory adjustments that don't feature in budget outturn: Depreciation 25,732 Impairment of Assets charged to services (2,576) Capital Funding (23,550) CFCR (1,616) Pension Adjustment (6,322) Statutory Repayment of Debt (7,696) Repayment of Finance Leases (5,280) Transfers to/from Other Statutory Reserves (77) Service Concessions 40,869 Other Adjustments 136 19,620 Movement In General Fund Balance 29,385 Adjust for earmarkings: Released sums earmarked to service budgets 2023-24 27,286 Supplementary estimates agreed during 2023-24 9 Revenue Budget 23-24 – transferred to General Fund (19) Contributions to earmarked reserves 2023-24 (54,933) (27,657) Revenue Budget Underspend/(Overspend) 1,728 Page 109
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 18 Balance Sheet The Balance Sheet summarises the Council’s assets and liabilities as at 31 March 2024 and explanatory notes are provided. The net worth of the Council has increased by £143.744m from £667.070m as at 31 March 2023 to £810.814m as at 31 March 2024. The major changes are set out in the table below. Main Balance Sheet Changes 31/03/2023 £000 31/03/2024 £000 Change £000 Main Reason Long Term Assets 886,601 769,486 (117,115) Largely due to the decrease in the value of the pension debtor partially offset by increase in the value of revalued assets. Current Assets 90,693 58,539 (32,154) Reduction in cash balances in comparison to previous year due to the early repayment of long- term loans and funding the capital programme through cash balances as opposed to taking out new long-term borrowing. Current Liabilities (68,592) (72,853) (4,261) Small increases in short term creditors and short- term borrowing. Long Term Liabilities (241,632) (233,152) 8,480 Reduction in long-term borrowing due to the early repayment of loans during the year and increase in the value of unfunded pension liabilities. Total 667,070 522,020 (145,050) Provisions The Council has provisions totalling £4.520m on the Balance Sheet as detailed in Note 29 to the Accounts. The larger provisions, those £0.250m or over, are summarised below. • £2.740m for landfill sites. A provision for landfill sites was created in 2014-15 reflecting the Council’s liability for restoration and ongoing maintenance in respect of landfill sites operated by the Council at Glengorm, Gartbreck and Gott Bay. These have been provided for based on the net present value of estimated future costs. • £1.025m for NPDO and Hub DBFM Payments. This provision is held in relation to disputed performance deductions and unbilled utility costs. Pension Asset The Council is required to account for its share of the Strathclyde Pension Fund assets and liabilities. The information included in the Accounts is provided by the Pension Fund actuaries following the annual valuation of the Fund. The Council’s share of the assets of the Strathclyde Pension Fund have been assessed on an actuarial basis using the projected unit method, an estimate of the pensions that will be payable in future years dependent on the assumptions about mortality rates, salary levels etc. The asset relates to benefits earned by existing or previous employees up to 31 March 2024. There has been a decrease in the pension valuation asset from £139.014m in 2022-23 to £0m in 2023- 24. This is as a result of the application of an asset ceiling applied in accordance with the requirements of IAS19. Page 110
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 19 The pension liability or asset can fluctuate significantly year on year. The table below shows the pension liability or asset over the last three years. Further detail on the pension estimates are included within Note 31. Pension (Liability)/Asset at the end of the financial year 2021-22 £000 2022-23 £000 2023-24 £000 Pension Asset 4,634 139,014 0 Borrowing During 2022-23 the Council’s external borrowing reduced by £23.037m from £143.973m as at 31 March 2023 to £120.936m as at 31 March 2024. The reduction was due to the early repayment of long term loans during the year in order to receive a discount and achieve an overall treasury gain. The Council was under borrowed by £68m at 31 March 2024. This was due to the early repayment of loans, minimal new long term borrowing taken out and slippage within the capital programme. The Council’s 2023-24 ‘Treasury Management Strategy and Annual Investment Strategy’ was approved at the full Council meeting on 23 February 2023 and outlines the Council’s capital prudential and treasury indicators. Statement of Movement in Reserves This Statement shows the movement on the different reserves held by the Council, analysed into usable reserves (resource backed reserves which can be used to fund expenditure) and unusable reserves (required purely for accounting purposes and are not backed by resources). The balance of unusable reserves has decreased by £172.976m from £573.295m as at 31 March 2023 to £400.319m as at 31 March 2024. The main reason for this movement is the decrease in the pensions reserve noted earlier in this commentary plus smaller accounting adjustments required through the Capital adjustment account and revaluation reserve. The balance of usable reserves has increased by £27.926m from £93.775m as at 31 March 2023 to £121.701m as at 31 March 2024. This is due to an increase in the General Fund of £29.385m offset by smaller reductions in the Capital Fund outlined in Note 34.1 and the Repairs and Renewals Fund outlined in Note 34.2. In respect of the General Fund Balance movement, there has been an increase of £29.385m from a balance of £86.356m to £115.741m and the detail on the movement in the balance is summarised within the table below. Movement on General Fund Balance £000 Balance on General Fund 31 March 2023 86,356 Revenue Budget 2023-24 – transfer to General Fund 19 Released sums earmarked to service budgets 2023-24 (27,286) Contributions to earmarked reserves 2023-24 – Service Concessions 35,658 Contributions to earmarked reserves 2023-24 - Other 19,275 Supplementary Estimate (8) Overall budget underspend as noted above 1,728 Page 111
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 20 Rounding (1) Balance on General Fund 31 March 2024 115,741 General Fund Balance The chart below shows what is included within the General Balance as at 31 March 2024 with a comparison to the position as at 31 March 2023. General Fund Balances as at 31 March 2023 and 31 March 2024 An analysis of the earmarked balances are shown in the chart below. Earmarked Balances held in the General Fund as at 31 March 2024 Group Accounts The Group accounts include Dunbartonshire and Argyll & Bute Valuation Joint Board as an Associate, as the Council have “significant influence” over their financial and operating policies. Live Argyll is a wholly owned subsidiary of Argyll and Bute Council and is consolidated within the group accounts on a line by line basis. Page 112
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 21 In addition, the Council’s Common Good Funds have been fully consolidated into the Group Accounts and Note 37 gives further details on the Council’s Common Good Funds. The effect of inclusion of the Associates, Subsidiary and Common Good Funds on the Group Balance Sheet is to increase both reserves and net worth by £21.472m. This gives an overall net asset position for the Group of £543.492m, a decrease of £143.800m from the previous year. The most significant decrease is in the pension position of £158.592m partially offset by an increase in non-current assets as a result of revaluations. The Argyll and Bute Integration Joint Board has responsibility for all health and social care functions relating to adults and children and will oversee the strategic planning and budgeting of these, together with corresponding service delivery for the residents of Argyll and Bute. Argyll and Bute Council contributed £77.605m towards the Argyll and Bute Integration Joint Board in the 2023-24 financial year. All transactions are accounted for and shown within the single entity statements and the IJB are treated as a Joint Venture within the Group Accounts therefore a share of their overall surplus and net assets have been recognised in the Group Statements. 6. KEY FINANCIAL INDICATORS The financial indicators outlined below have been developed to assist the reader in assessing the performance by the Council over the last financial year and the affordability of its ongoing commitments. Key Financial Indicators Financial Indicator 2022-23 2023-24 Comment Unallocated General Fund Balance as a proportion of next year’s Annual Budgeted Net Expenditure 2.44% 2.75% Reflects the level of funding available to manage financial risk/unplanned expenditure. This includes the 2% contingency. The 2023-24 position is slightly more than 2022-23 which confirms there are sufficient reserves to meet any unplanned expenditure. Movement in the Unallocated General Fund Balance (£0.6m) £1.06m Reflects the extent to which the Council is using its Unallocated General Fund Balance (excluding contingency). An increase in the 2023-24 balance to offset the reduction in the previous year and provide a degree of stability in the Council’s financial position. In-year Council Tax collection rate 96.82% 96.34% Reflects the Council's effectiveness in collecting Council Tax debt compared to a target of 96%. The target continues to be exceeded. Ratio of Council Tax Income to Overall Level of Funding 17.76% 19.9% Reflects the capacity of the Council to vary expenditure by raising Council Tax income. Actual Outturn compared to budgeted expenditure £3.273m 1.06% £1.728m 0.55% A measure of how the final outturn compares to the budgeted position. The surplus is a reflection of the effectiveness of the Council’s financial management particularly the Loans Fund. Capital Financing Requirement (CFR) for the current year £291.782m £332.394m Measurement of requirement to borrow for capital purposes. The increase in 2023-24 reflects writing back the overpayment of the debt element of Service Concession arrangements in prior years. External Debt Levels for the current year £142.536m £119.407m Actual borrowing for capital investment levels. Reduction in 2023-24 due to the early repayment of Page 113
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 22 Financial Indicator 2022-23 2023-24 Comment long term loans at a discounted rate to achieve a treasury gain and minimal need to borrow due to slippage in the capital programme and cash balances. Ratio of financing costs to net revenue stream 6.26% 2.74% Measures the percentage of income that has been committed towards meeting the costs of borrowing. The more income needed to fund financing costs the less that is available to meet other revenue expenditure. The ratio has dropped in 2023-24 as we have repaid long term borrowing during the year, used cash balances to fund the capital programme and delayed taking any new borrowing where possible while interest rates were high. There will be a need to increase borrowing again in the future and this ratio will rise again. 7. OUTLOOK A five year financial outlook informing Council of the estimated budget gap covering the period 2024-25 to 2028-29 using best case, worse case and mid-range scenarios was kept up to date during 2023-24 and presented to the Policy and Resources Committee in May, August, October and December 2023. Preparing any forward looking financial outlook is challenging due to the levels of uncertainty, for example the level of Scottish Government Grant, the impact of rising inflation and the uncertainty of pay awards being agreed before the budget setting process. The assumptions used to inform the outlook are reviewed, updated and reported regularly. The Council has a strong track record in financial management as recognised by previous years annual external audit reports and the Council’s Best Value report issued in May 2020. The chart below shows the cumulative budget gap over the next five years as reported to the Policy and Resources Committee on 9 May 2024. Cumulative Budget Gap 2025-26 to 2029-30 as reported on 9 May 2024 Budget Strategy A Budget Approach report was presented to Policy and Resources Committee on 11 May 2023 where it was agreed that a cross party Budget Working Group (BWG) be established comprising six elected members from the administration, three elected members from the opposition and two Trade Union representatives. The BWG’s role was to engage with officers and provide a sounding board to assist in Page 114
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 23 the development and identification of savings options. During 2023-24 the Council sought the views of the Community on high level priorities for the budget via a budget simulator. A report outlining the feedback from this consultation was presented to Policy and Resources Committee on 12 October 2023. This exercise allowed Elected Members to take into account the views of the Community when considering and preparing the budget for 2024-25. A further budget update report was presented to Policy and Resources Committee on 7 December 2023 which set out the latest financial position, initial savings options and other pressures that may have to be considered as part of the budget setting process. The BWG met on 18 September 2023, 9 November 2023 and 18 January 2024. During these meetings Members were presented with the findings from the consultation, updates on the financial position and savings options identified by officers. The Council continues to be committed to developing multi-year savings proposals with a focus on longer term planning. As part of the 2023-24 budget setting process savings that required more detailed work that could be considered in future years were also identified and these are already being explored as part of a pipeline of savings for future years. These include detailed reviews of the Roads and Infrastructure and Education Services. Preparation is already well underway for the 2025-26 budget setting process and a report on the proposed approach will be presented to Council on 27 June 2024. This includes a proposal to once again create a cross party BWG. There is no doubt that bridging the budget gap both in 2025-26 and future years will be extremely challenging. The budget gap is calculated using a number of assumptions and there are three areas where a change to the assumptions could have the biggest impact on the estimates: 1. Scottish Government Grant – within the mid-range scenario, a 0.5% decrease has been assumed which is similar to the reduction in 2024-25. Every 1% change is circa £1.4m. 2. Council Tax – within the mid-range scenario, a 5% increase has been assumed on the basis that the majority of Councils increased their Council Tax by at least 5% in 2023-24 prior to the freeze in 2024- 25. This is an officer assumption, as this is a matter for Council to agree. Every 1% change is circa £600k. 3. Pay Award – within the mid-range scenario, a 2% increase has been assumed. Every 1% change is circa £1.7m. As previously noted, the budget outlook is extremely challenging and this is made more so by the ring- fenced and directed spend by Scottish Government resulting in the budget where the Council is able to exercise any control being a lot smaller. It is hoped that the Verity House agreement may bring opportunities for the un-ring-fencing of some areas of budget. Furthermore, in April 2024 a new Provost and Leader of the Council were appointed which was followed by changes in Members of the administration. The new administration are currently considering their priorities which could have an impact on decisions made as part of the budget setting process. Cost of Living Crisis The ‘cost of living crisis’ refers to the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021. It is being caused predominantly by high inflation outstripping wage and benefit increases. Despite some stabilisation efforts, the persistent economic pressures are affecting both individuals and Council services significantly. The Council continues to see significant increases in all areas of supplies, but specifically in utilities, food and fuel costs and it will be extremely challenging to contain spending Page 115
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 24 within current resources. The Council remains committed to addressing these challenges through strategic planning and support initiatives for individuals. Rural Growth Deal Our £70m Rural Growth Deal is about turning economic potential into a successful future for Argyll and Bute. It is about investing in initiatives that will turn the area’s fantastic natural resources and business innovation into a thriving local economy. The Council signed the Heads of Terms in February 2021 and is working on producing the full deal documentation, which includes a business case for each of the themes within the deal. The deal was due to be signed on 7 June 2024 by the Council and both the Scottish and UK Governments but due to the calling of the UK General Election this has had to be postponed. The project themes in the deal are as follows: Marine Tourism/Place Programme including the Rothesay Pavilion at Full Business Case Low Carbon Economy - Islay Rural Skills Accelerator Housing – Isle of Mull and Isle of Islay Clyde Engineering & Innovation Centre West Coast UAV Marine Aquaculture Programme. Regular updates on progress are posted on the website, see link: Rural Growth Deal (argyll-bute.gov.uk). UK Government Levelling Up Agenda Levelling Up Fund The Levelling Up Partnership funding was announced by the UK Government in the 2023 Autumn Statement and Argyll and Bute has been allocated up to £20m of Levelling Up Partnership funding. The process to choose the final projects is different to previous Levelling Up funding rounds and is very much driven by the UK Government. It was originally envisaged that a long list of projects would be identified by May 2024 with a short list by mid-July 2024. Business cases would then be developed by the UK Government with a final decision made in September 2024. There will be a degree of public consultation led by the UK Government and the final decision on the successful projects will lie with the Secretary of Stage (not the Council). It is unclear how the General Election will impact on these timescales. In terms of the kind of projects, it very much follows the Levelling Up Agenda, that is business, transport connectivity, community safety, skills and education and housing. Shared Prosperity Fund (UKSPF) The UKSPF is a successor to the previous EU structural funds, it is viewed as a central pillar of the UK Government’s Levelling Up agenda. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. The project / programme activities outlined in the Argyll and Bute UKSPF Investment Plan are all aligned to three key investment priorities: communities and place; supporting local business; and people and skills, where each priority has predefined interventions, outputs and outcomes. In addition to core UKSPF monies, the investment plan includes a focus on ring-fenced ‘Multiply’ funding to support the delivery of an area-based adult numeracy programme. Argyll and Bute Council received an allocation from the UKSPF of just under £4.5m to support delivery over three financial year, specifically the final three months of 2022-23 and the next two financial years, 2023-24 and 2024-25, until the end of March 2025. There are 21 projects funded under the Core UKSPF and another three projects support by the Multiply Page 116
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 25 programme (also part of the UKSPF £4.5m allocation). Aligned to UK Government guidance, any underspend for 2023/24 has been carried over and reprofiled for 2024/25. It is anticipated that the full allocation will be spent by the end of March 2025. Learning Estate Investment Programme The Councils bid to the Scottish Governments Learning Estate Investment Programme (LEIP) for funding for a new school campus on Mull was successful. While this is good news and will provide welcome investment in the school estate it does come with a financial pressure that is required to be funded if the project is to proceed. The Scottish Government will fund up to 50% of eligible costs therefore the Council will be required to fund circa £20m prior to any associated borrowing costs. A Members seminar was held on the 12 April 2024 and a report subsequently presented to Council on 25 April 2024 outlining the financial, economic, community and educational implications of the proposed campus. Members agreed that up to £5m from the previously agreed earmarked LEIP funding could be used to commence the Business Case, undertake engagement exercises, commence the site selection process and establish governance arrangements. To progress with the project beyond this point Members will consider the capital and revenue budget provision required as part of the budget setting process. Risks The Council’s Strategic Management Team (SMT) actively manage strategic risks via a six monthly review of the Strategic Risk Register (SRR) which adopts established risk management arrangements including reviewing current mitigating measures and identifying key actions to further mitigate them. These actions are designed to be consistent with the work required to deliver services which are aligned to the Council’s objectives through the Council’s strategic and service plans. Furthermore departmental management teams review their operational risk registers (ORR) on a quarterly basis with all red risks identified in ORRs being reported to the SMT to ensure they are sighted on all emerging high priority risks. The SRR currently has 13 strategic risks which are categorised using a RAG (Red, Amber, Green) Status based on the residual impact and likelihood of crystallisation after accounting for mitigation measures. There are currently four risks classified as red as set out in the diagram below which also summarises the current mitigating actions. These are issues that the Council continues to manage through programmes of work such as the Rural Growth Deal, and the Levelling Up Fund, also the progression of a new Waste Strategy with a particular focus on the 2025 ban on Biodegradable Municipal Waste, reviewing contingency plans and disaster recovery plans in relation to Cyber Security and addressing the Housing Emergency through a Housing Strategy and Investment Plan. Page 117
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Management Commentary www.argyll-bute.gov.uk _______________________________________________ Page 26 8. CONCLUSION The Council has continued to have good financial planning arrangements in place in 2023-24. We have managed the continued inflationary pressures and taken the opportunity to repay borrowing at a discount which helped ensure that we operated within budget in 2023-24. The utilisation of the Service Concession flexibility has allowed us to earmark funds to address Council priorities and therefore not put further pressure on the budget position. It is recognised that ongoing real term reductions in Scottish Government core revenue grant continues to present significant financial challenges for all local authorities, however, our council is in a strong position to manage the financially challenging times. The Council are committed to deliver the best services to the people of Argyll and Bute within the available resources. 9. ACKNOWLEDGEMENTS We would take this opportunity to acknowledge the significant effort in producing the Annual Accounts and to record our thanks to both Elected Members and staff for their continued hard work and support. Councillor Jim Lynch Pippa Milne Kirsty Flanagan Leader Chief Executive Section 95 Officer 20 December 2024 20 December 2024 20 December 2024 •Maximise external funding •Rural Growth Deal •Levelling Up Fund •UK Shared Propsperity Funding Investment Plan Population, Infrastructure and Economic Decline •Developing options for new Waste Strategy •Planning for impact of Bio-degradable Municipal Waste Ban 2025 •Planning for impact of Scottish Deposit Return SchemeWaste Management •Contingency Planning •Raising Cyber Security awareness •Disaster Recovery Plan •Work with Scottish Government Cyber Resilience Team Cyber Security •Housing Strategy and Investment Plan •Housing Delivery Group •Islands Programme Award of Funding for worker accomodation Housing Availability Page 118
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Statement of Responsibilities for the Annual Accounts www.argyll-bute.gov.uk _______________________________________________ Page 27 THE AUTHORITY'S RESPONSIBILITIES The Council is required: • to make arrangements for the proper administration of its financial affairs and to ensure that one of its officers has the responsibility for the administration of those affairs (Section 95 of the Local Government (Scotland) Act 1973). In this Authority, that officer is the Executive Director; • to manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; • to ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014), and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003); • to approve the Annual Accounts for signature. Councillor Jim Lynch Leader 20 December 2024 SECTION 95 OFFICER RESPONSIBILITIES The Section 95 Officer is responsible for the preparation of the Council's Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (The Code). In preparing the Annual Accounts, the Section 95 Officer has: • selected suitable accounting policies and applied them consistently; • made judgements and estimates on a reasonable basis; • complied with legislation; • complied with the Local Authority Accounting Code of Practice 2023-24 (in so far as it is compatible with legislation). The Section 95 Officer has also: • kept adequate accounting records which were up to date; • taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the Annual Accounts give a true and fair view of the financial position of the Council and its group at the reporting date and the transactions of the Council and its group for the year ended 31 March 2024. Kirsty Flanagan Section 95 Officer 20 December 2024 Page 119
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 28 1. BACKGROUND AND SCOPE OF RESPONSIBILITY Argyll and Bute Council’s (the Council) governance framework includes the systems, processes and culture by which the Council is controlled, engages with communities and monitors the achievement of strategic objectives. The Council conducts its business in accordance with the law and proper standards. The Council has a duty to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to the economic, efficient and effective use of public money. The system of internal control is a key part of the framework and is designed to manage risk to an acceptable level. In discharging these responsibilities, the Council has put in place proper arrangements for the governance of its affairs and the stewardship of the resources at its disposal. The Council has approved and adopted a Local Code of Corporate Governance (the Code) which is consistent with the principles and requirements of the CIPFA/SOLACE revised Framework for ‘Delivering Good Governance in Local Government. This Statement explains how the Council has complied with the Code and meets the requirements of current good practice. 2. THE GOVERNANCE FRAMEWORK The Code details how the Council will demonstrate compliance with the fundamental principles of corporate governance for public sector bodies. The seven key principles of our governance arrangements in 2023/24 are described in the Code, along with our supporting principles and key aspects of our arrangements to ensure compliance. 1. Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law. We have four values, which underpin all that we do and provide a sound basis to achieve transformation to ensure we meet the challenges of the future and deliver quality services. These values are that we have a workforce which is: Caring Committed Collaborative Creative The Council has developed a change programme ‘Connect for Success’ with the seven principles – One Council One Place Approach, Purpose and Mission Focus, Employee Empowerment, Data and Evidence Driven Decision Making, Learning Council, Agile and Maximise Opportunities that Technology Offers - Connect for Success We have developed and communicated an Ethical Framework within the Council's Constitution, which defines standards of behaviour for Members and staff. Protocols for Member/Officer relations are also detailed within the Constitution. The Councillors’ Code of Conduct is set out at a national level, applying to all members in Scottish local authorities and is incorporated into the Council’s Constitution as part of the ethical framework which also includes a protocol for the Monitoring Officer. A Register of Members Interests is publicly available for inspection. In addition, the Constitution has a section on conduct at meetings and meeting agendas require declarations of interest to be made where appropriate. Standing orders for meetings are included within the Council’s constitution and training and support is provided to members on their role in Council committees. Anti-fraud and whistleblowing policies are in place and the Council has adopted the Scottish Public Services Ombudsman’s (SPSO’s) Model Complaints Handling Procedure. Page 120
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 29 The Council complies with CIPFA’s Statement on the Role of the Chief Financial Officer in Local Government. In addition, Professional advice on the discharge of statutory social work duties is provided to the Council by the Chief Social Work (CSWO). A structure of governance and framework across our day to day activities and which supports accountability, control, risk management and appropriate overview of the Council are outlined in the diagram below: Page 121
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 30 Decision Making / Procedural Council and Committee Structure Council and Committee Terms of Reference Council and Committee Standing Orders Scheme of Delegated Functions Standing Orders Relating to Contracts Councillor's Code of Conduct Corporate Governance Executive Leadership Team and Senior Management Team Risk Management Integrity HR and Individual Capability Strategic Planning Performance Management Framework Community Planning and Empowerment Stakeholder Engagement Financial Governance Internal Control ALEO Governance Scheme of Delegation ALEO Governance Framework Risk and Governance Reporting Financial and Operational Performance ALEO Risk Register Asset Governance Corporate Asset Management Strategy Corporate Asset Managment Plan and Capital Plan Records Management Information Management and Security Local Development Plan ICT and Digital Strategy Major Programmes/Projects Capital Investment Programme Conservation Area Regeneration Scheme (CARS) Projects Campbeltown, Helensburgh, Oban, Rothesay & Dunoon (CHORD) Projects Marine Asset Management Plan Rural Growth Deal Annual Status and Options Report External and Internal Audit and other regulatory inspections Constitution, Governance, Risk Management and Accountability Page 122
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 31 2. Ensuring openness and comprehensive stakeholder engagement. We have established clear channels of communication with the community and other stakeholders through our Communication Strategy. Key mechanisms include: Consultation Diary The Council has developed a consultation section on its website which hosts all consultations run by the Council and includes a section which publicises the results and/or outcome of the consultation and the resultant decisions that have been taken, showing how they were informed by the consultation process. This is part of our commitment to You Said, We Did information sharing for the public. Consultations provide communities with an opportunity to get involved with wide ranging aspects of the council’s work and life in Argyll and Bute. These include for example, play park funding, active travel routes, primary school consultations, and the council’s customer service strategy. Keep in the Loop Service Over 10,870 customers currently subscribe to receive notifications across the range of services. 'Myaccount' is a secure sign-in service for accessing online public services in Scotland. It provides the ability to set up an online account and use it to access a growing range of online public services, Scotland-wide, including Argyll and Bute Council. Currently 16,744 customers up from 15,399 last year have signed up to this service and it allows customers to access and personalise their interaction with the Council on a range of services. Public Performance Reporting The Council’s website makes all performance information available to the public. This includes information on performance scorecards, budgets and other service related information. This promotes open accountability to the public for its performance against agreed policies and standards. As part of phase two of the performance excellence project a review of the council's approach to public performance reporting is being undertaken. Accessibility In 2023/24 75% of 593,362 customer interactions through the council’s Customer Engagement Team were made using digital self-service. This very high proportion is because of the scope and quality of the digital services provided. In order to ensure maximum accessibility for everyone and meet our equalities responsibilities, the Council’s website was upgraded to the latest software version Drupal 10 and its content refreshed to meet the new international WCAG2.2 standard. In March 2024 it scored 98% in the UK Independent Silktide accessibility score, rating it the 37th highest ranking Council in the UK. In addition the Reachdeck supported access tool was added to the website to give read aloud and translation help to users seeking such additional assistance and our 24/7 automated telephone service was used 46,942 times by those customers who struggle with online digital services. Community Engagement To support strengthening communities, community empowerment and engagement the council has in place: • An officer Community Engagement Strategy Group to oversee the development and implementation of the council’s internal Engagement Strategy; advising on best practice in engagement tools and techniques, supporting skills development and capacity within the council to effectively engage with communities. On this group sit those officers with expertise in engagement including those from Corporate Communications and the Communities & Partnership Team. The Councils Communications Team has developed an engagement app for services to use, and the council’s Communities & Partnership Team has resources and expertise to support hard to reach groups, Page 123
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 32 community organisations and remote communities to have a voice in decision making. • A Community Development service, with a focus on improving active citizenship and capacity building through best practice in community development through a responsive and effectively targeted programme of Community Development support internally to the council and externally within communities across Argyll and Bute. • A range of training and resources to help build the knowledge, skills and confidence of community groups • Funding support to help empower community organisations to take forward priority projects and activities in their area: Monthly funding alert | Argyll and Bute Council (argyll-bute.gov.uk) • Resourcing community council liaison activities, including training and support activity, which helps to build the capacity of community councils. The Council also has a statutory lead role to ensuring Community Learning and Development provision in Argyll and Bute is set out in an Argyll and Bute Community Learning and Development Strategic Plan, and this is delivered through its collaboration with its Arms-length External Organisation (ALEO) partner Live Argyll. The Council continues to promote the Community-led action plan toolkit (developed in partnership with Scottish Community Development Centre) to help support communities interested in developing a local Community-led Action Plan. The Council also provides support for communities interested in development a Place Plan: Local Place Plans | Argyll and Bute Council (argyll-bute.gov.uk) The Council directly resources the management of the Community Planning Partnership (CPP) to bring partners together, including community, to deliver on the Outcome Improvement Plan. It actively seeks to ensure that young people are engaged in Community Planning and has implemented the following: • The 3 local Members of the Scottish Youth Parliament (MSYP's) attend the Community Planning Partnership Management Committee meetings on a rotational basis. • The Area Community Planning Groups (ACPG) invite members of local Youth Forums to attend meetings when they are held in their local areas & information is passed on to young people by Youth Workers who are kept updated on any developments. • The revised Scheme of Establishment for Community Councils outlines the requirement to encourage young people to attend and participate in community council meetings” and the age to become a Community Councillor was lowered to be 16 to encourage more young people to become involved. Council/Committee Meetings Meetings are always held in public, unless one of the statutory exemptions in the Local Government (Scotland) Act 1973, schedule 7A applies to the content of the report. Agendas for and minutes of meetings are detailed on the Council’s website. When schedule 7A applies papers are adjusted to ensure that the maximum amount of content is in the public domain. The Council’s Constitution defines the roles and responsibilities of the administration, committees, scrutiny and officer functions, with clear delegation arrangements and protocols for effective communication. The Standards Commission Advice Note for Councillors on Distinguishing between their Strategic Role and any Operational Work has previously been included in an Elected Member Seminar and is hosted on the Members Resource page on the Hub for ease of reference. Page 124
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 33 3. Defining outcomes in terms of sustainable economic, social, and environmental benefits. Our Corporate plan sets out our, and our community planning partner’s, vision for Argyll and Bute’s economic success to be built on a growing population. It also defines our mission “To make Argyll and Bute a place people choose to live, learn, work and do business” and establishes our outcomes, priorities and approach to delivering on our shared ambition with our community partners. We have a Performance Improvement Framework (PIF) that ensures performance is integral to the work of the Council. The PIF is focused not just on measuring what we do but on measuring the difference we make in terms of our outcomes. Asset management planning and capital investment is structured to consider and balance the combined economic, social and environmental impact of policies and plans when taking decisions about service provision. The Council has put arrangements in place to comply with key elements of the Community Empowerment Act. In determining how services and other courses of action should be planned and delivered the Council is increasingly engaging with internal and external stakeholders. Community benefit is an important consideration in the procurement of goods and services. The Council has acknowledges the effects of the ‘Cost of Living’ within Argyll and Bute and during 2023/2024 client gain achieved by the Flexible food and Fuel fund project reached £3.8 million. This project, supporting the most vulnerable low income households and those using foodbanks in our area to access short-term grants to cover the cost of food and fuel in the short term. In the longer term support through the provision benefit maximisation, money advice and energy advice services is provided by third sector partner agencies. In addition, this year the Council has issued 1,300 Scotland Loves Local Gift Cards to low income households in the year ensuring the £110,000 loaded onto the gift cards is spent in Island based local businesses in Argyll and Bute. The Council and the Third Sector Interface is supporting the Poverty Alliance on a project entitled “Taking Action on Rural Poverty” which is looking at new ways of addressing rural poverty in Argyll and Bute by reducing the rural poverty premium. The Council has also provided a one-stop-shop webpage where individuals and families can access energy advice, money advice and links to the services the Council provides in this area and those provided by third sector partner organisations. In 2022/23 Argyll & Bute Council recorded its lowest level of operational carbon emissions since reporting commenced in 2015/16 via the Public Bodies Climate Change Duties. This represents a reduction of 12,952 tCO2e (tonnes of carbon dioxide equivalent), approximately 33% against baseline figures. Work continues across Council services to reduce our emissions and support our journey to net zero including the transition to energy efficient LED streetlighting, moving to electric or hybrid fleet vehicles, and increasing diversion of waste from landfill. Integrated impact assessments as well as environmental, sustainability and island implications are considered during the decision making process to promote fair access to services. 4. Determining the interventions necessary to optimise the achievement of the intended outcomes. Decision makers receive detailed information indicating how intended outcomes would be achieved together with the implications associated with the proposals covering financial, risks and mitigations, integrated impact assessment, acting sustainably, carbon management, island proofing, and changes to schemes, by way of the compulsory sections of the Committee report. The Council’s Executive Leadership Team (ELT) meet regularly with the administration to discuss their key priorities and requirements for decision making in addition there is regular survey and feedback on their needs and a regular review of governance arrangements to ensure that decision making is fully supported. Page 125
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 34 In determining how services and other courses of action should be planned and delivered the Council is increasingly engaging with internal and external stakeholders. Community benefit is an important consideration in the procurement of goods and services. The Council fosters effective relationships, collaborative working and contractual arrangements with other public, private, and voluntary organisations in delivering services that meet the needs of the local community as stated in the Council’s Corporate Plan 5. Developing the entity’s capacity, including the capability of its leadership and the individuals within it. Elected Member Development The Council has signed up to the Improvement Service’s Continuing Professional Development Framework for Elected Members. All Elected Members are provided with opportunities to progress personal development plans so that individual training needs and aspirations are identified and support provided as appropriate. This is complemented by a comprehensive seminar and workshop programme which addresses a wide range of topics and strategic issues. Additional training was undertaken by Elected Members in relation to the technology, knowledge and skills necessary to support the transition to a virtual environment including webcasting of strategic Committee meetings and the operation of meetings on a hybrid basis, enabling a mixed attendance of members being physically or virtually present. Officer Development The Council supports officer development through a structured approach, driven by the values set out in the Corporate Plan and a behavioural competency framework. The Council has Argyll and Bute Manager and Leadership Programmes, which ensure that all employees who have management responsibilities are knowledgeable and effective in delivering services within the priority management policies and procedures of the Council, including finance, performance and people management. The Leadership Programme ensures that senior and aspiring leaders in the organisation have support to develop their leadership behaviours and to improve their overall impact and performance across the organisation. 6. Managing risks and performance through robust internal control and strong public financial management. Internal Financial Control Our standing orders, financial instructions, scheme of delegation and supporting procedure notes/manuals clearly define how decisions are taken and the processes and controls in place to manage risks. These are reviewed and updated on an annual basis. We ensure compliance with relevant laws and regulations, internal policies and procedures, and that expenditure is lawful. The Council’s Monitoring Officer advises on compliance with our policy framework, ensuring that decision making is lawful and fair. Furthermore the Council has a designated Data Protection Officer and all services have Information Asset Registers along with appropriate guidance on how data should be managed. Our financial management arrangements conform to the CIPFA Statement on the Role of the Chief Financial Officer and we ensure that our independent Audit and Scrutiny Committee undertakes the core functions identified in CIPFA’s Audit Committees – Practical Guidance for Local Authorities. The Council has a proactive, holistic approach to tackling fraud, theft, corruption and crime, as an integral part of protecting public finances, safeguarding assets, and delivering services effectively. It is based upon the national counter fraud standard CIPFA’s Code of Practice on ‘Managing the Risk of Fraud and Corruption’. The Council has a system of internal financial control designed to manage risk to a reasonable level. It is based on a framework of regular management information, financial regulations, administrative Page 126
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 35 procedures (including segregation of duties), management supervision, and a system of delegation and accountability. Development and maintenance of the system is undertaken by officers within the Council and the named bodies mentioned below. Internal Financial Controls and Prevention Are these in Place? Comprehensive budget systems Financial and budget monitoring systems Financial and Performance reporting systems Clearly defined Capital Expenditure guidelines Project Management processes and disciplines An effective Internal Audit Section An effective Counter Fraud Team Internal controls cannot eliminate risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. This annual review also covers the other bodies whose activities are incorporated into our Group Accounts and reliance is placed on the formal audit opinion contained in the financial statements of each individual body. • Dunbartonshire and Argyll and Bute Valuation Board • Live Argyll • Argyll and Bute Integration Joint Board The Council’s risk management processes are well developed. In particular the: • Strategic Risk Register is updated twice a year and approved by the SMT • Chief Executive presents the Strategic Risk Register to the Audit and Scrutiny Committee on an annual basis • Operational Risk Registers are updated quarterly by departmental management teams. • Internal Audit will perform an audit of compliance with risk management arrangements every three years. • The CIA performs an annual strategic risk assurance mapping exercise. 7. Implementing good practices in transparency, reporting, and audit to deliver effective accountability Internal Audit The Council and its Group bodies have internal audit functions, which operate to Public Sector Internal Audit Standards. The work of internal audit is informed by an analysis of the risk to which the Council and its Group bodies are exposed, with annual internal audit plans prepared based on that analysis. The Council's Audit and Scrutiny Committee endorses the preparation methodology and annual internal audit plan and monitors the performance of Internal Audit in completing the plan. In addition, the Council has developed a hybrid meeting facility enabling physical and virtual attendance at meetings with a public broadcast function so that members of the public can see and hear meetings of the Council’s strategic committees’ live increasing openness and transparency. Page 127
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 36 The Chief Internal Auditor (CIA) provides the Audit and Scrutiny Committee with an annual report on internal audit activity in the Council and an opinion of the assurance can be taken regarding the systems of governance and internal control and whether they are operating effectively. This is an independent and objective opinion of the CIA based on work carried out in conformance with the Public Sector Internal Audit Standards to fulfil statutory Internal Audit provision. Internal audit provides members and management of the Council with independent assurance on risk management, internal control and corporate governance processes. External audit has, and continues to, use the work of internal audit. The Annual Accounts and Report sets out the financial position in accordance with relevant accounting regulations. Review of the Adequacy of Effectiveness of the Council’s Governance Framework Work to deliver Argyll and Bute’s Covid Recovery Strategy and Action plan continued in 2023/24 with the same governance arrangements. Full details of the action plan is detailed in the document “Recovery, Renew and Restart”, which was approved by Councils Economic, Development and Infrastructure Committee. The Council has appropriate management and reporting arrangements to enable it to satisfy itself that its approach to corporate governance is adequate and effective in practice. The legislative framework of local government defines a number of posts which are primary to the Council’s governance arrangements. These include the Chief Executive, Pippa Milne fulfilling the role of Head of Paid Service. As Monitoring Officer, the Executive Director Douglas Hendry: • oversees the implementation of the Code and monitoring its operation • reports annually to the Council on compliance with the Code and any changes required to maintain it and ensure its effectiveness. Specific responsibilities are assigned to the Executive Director Kirsty Flanagan as the Council’s Chief Financial Officer (S95 Officer), to ensure that public funds are properly accounted for. In recognition of the significant role that the Chief Financial Officer has in relation to financial performance and the financial control environment, CIPFA has set out key principles that define the core activities and behaviours that belong to the role. These include, being a key member of the Leadership Team, being actively involved in and influencing decision making, and leading the delivery of good financial management across the whole organisation. The Council have appointed a Data Protection Officer in line with the requirements of the UK- General Data Protection Regulations and the Data Protection Act 2018. Covid Recovery Progress Report 2023/24 The Argyll and Bute Overarching Recovery Group (formed to lead this process with specific thematic groups focused on Council recovery, building back stronger communities, economic and social recovery, infrastructure and transportation, financial management and public health) continues to have an overview of the Councils Covid Recovery Strategy and critical themes, although the majority of the actions have either been completed or been mainstreamed into other strategic or operational plans. Key updates are as follows: a) Economic and Social Recovery: Issues and actions are incorporated within the Councils Economic Strategy b) Building Back Stronger Communities. Issues and actions are incorporated within the Corporate Community Planning priorities c) Our Modern Workspaces program. The Council have established hybrid working across its activities and Our Modern Workspace project aims to look at how we use offices on a town by town basis and take into account the needs of employees and members of the public, as well as any opportunities for working more closely with partners. Good progress is being made to develop Hub buildings and reducing heating and maintenance costs and our huge portfolio of buildings. Page 128
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 37 d) The Joint Health Protection Plan, agreed by Argyll and Bute Council, Highland Council and NHS Highland, sets out the public health arrangements for the management and control of public health incidents and outbreaks, together with detailing our collective public health priorities for 2023-25. FINANCIAL SUSTAINABILITY It is anticipated the Scottish public sector will continue to face a very challenging short and medium term financial outlook with uncertainty over the level of Scottish Government funding. The one year financial settlements do not provide any degree of medium term certainty and ring-fencing of monies and additional policy commitments which are not always fully funded limit financial flexibility and create additional financial pressures. In June 2023 the Verity House agreement was signed by representatives from Scottish Local Government and Scottish Government which signified a shared vision for a more collaborative approach to delivering our Services. This agreement included a commitment to improve engagement on budgetary matters and provide more flexibility to Local Authorities by baselining specific grants to allow them to be utilised on local priorities. It has been disappointing to note that very little has changed in light of this agreement with no engagement with Local Authorities prior to the Council Tax freeze announcement for 2024-25. The financial outlook continues to be impacted by higher levels of inflation than pre-COVID which results in significant price increases as well as ongoing disruptions to the supply chain and longer lead in times. Tender prices are substantially higher than in previous years meaning a reduced level of Service can be provided for the same amount of money. The Council continues to provide financial estimates for future years with their medium term financial outlook covering a five year window to provide a longer term view of the Council’s estimated budget gap. Preparing any forward looking financial outlook is challenging due to the levels of uncertainty however the assumptions are reviewed regularly and updated with the outlook prepared to reflect a best case, worst case and mid-range scenario. The Council has a strong track record in financial management as recognised by previous year’s annual external audit reports and the Council’s Best Value report issued in May 2020. The Best Value report also recognises that the Council’s medium to long term financial strategy helps support financial planning arrangements. In addition to providing revenue and capital projections the Strategy also sets out the position in relation to the Council’s general fund reserve, the approach to managing the financial impact of inflationary pressures, approach to Treasury Management and the strategy to address budget gaps. HEALTH AND SOCIAL CARE INTEGRATION The Argyll and Bute IJB has been established as a separate legal entity from Argyll and Bute Council and NHS Highland, with its own board of governance. The IJB comprises eight voting members with four Elected Members nominated by Argyll and Bute Council and four Board members from NHS Highland. In addition there are a number of non-voting appointees representing other sectors and stakeholder groups, such as the Third Sector, Independent Sector, Patients and Service Users, Carers and Staff. The arrangements for the operation, remit and governance of the IJB are set out in the Argyll and Bute Integration Scheme which has been prepared and approved by Argyll and Bute Council and NHS Highland. It has also been approved by the Scottish Government. The IJB, via a process of delegation from the Health Board and Local Authority as outlined in the Scheme of Integration has responsibility for the planning, resourcing and operational delivery of all health and social care services within Argyll and Bute. Page 129
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 38 The Council places reliance on the IJB’s framework of internal controls and similarly the IJB places reliance on the procedures, policies and operational systems of the Council and the Health Board. The IJB operates within an established procedural framework. The roles and responsibilities of board members and officers are defined within Standing Orders, the Integration Scheme, Financial Regulations and Standing Financial Instructions. The IJB has proportionate internal audit arrangements in place to provide independent assurance on risk management, corporate governance and the system of internal control. A risk based internal audit plan developed and commissioned for 2023/24 and the IJB’s internal auditor has issued a formal annual report providing their independent opinion on the effectiveness of the IJB’s risk management, internal control and governance processes. The overall conclusion of the Internal Auditor is to provide a satisfactory level of assurance on the adequacy of internal controls and governance arrangements within the IJB. During 2023-24 the IJB has progressed a number of initiatives to develop its governance arrangements including improving the use of Directions and the implementation of the integrated performance management system. It has also focused upon re-mobilising services following the pandemic, refreshing its service transformation program and progressing strategic development projects. It has focused on taking action to manage strategic risks during the year. However, it is acknowledged that budgetary challenges have resulted in some key capital projects and business case development work being paused. The financial position of the HSCP has also remained stable. It repaid all of the debt it owed to the Council in 2021/22 and reported an underspend against its approved budget in 2023/24. The operating environment going forward is very challenging as funding allocations have not kept pace with cost and demand increases. The impact of an increasing older population with on-going recruitment constraints and workforce shortages is adding to the challenge. The HSCP is working to address its workforce gaps throughout the area and across many professions in a variety of ways. For example, it is seeking to address key worker accommodation shortages in partnership with the Council, Shelter and the Social Housing Sector and is constantly trying new approaches to attract workers from outside Argyll & Bute. The new Health and Care Staffing act will also be progressively implemented throughout 2024/25 which places additional duties upon the IJB to monitor, manage and report upon its staffing levels and risks. These risks and challenges are particularly acute in many of our rural and island communities which are experiencing increasing costs along with very small scale, lifeline services which are become ever more difficult to sustain or operate in a financially efficient way. The IJB approved a budget for 2024/25 which indicates that additional funding from NHS Highland may be required, although it is likely that any actual gap can be funded by the allocation of HSCP reserves. The budget is also dependent upon the allocation of non-recurring pension fund savings held by Argyll & Bute Council. The management of longer-term financial sustainability is a priority and service change and transformation plans aimed at addressing this require to be developed, consulted upon and implemented during the course of 2024/25 and 2025/26. The delivery of the short term savings plan is a priority for the HSCP particularly as it seeks to manage down spend on expensive agency and locum staff whilst maintaining the safety of services. UPDATE ON AREAS FOR DEVELOPMENT IDENTIFIED IN PREVIOUS ANNUAL GOVERNANCE STATEMENTS The 2022/23 Annual Governance Statement identified a number of areas for further development. A summary update for each area is provided in the table below. Page 130
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 39 Area 2023/24 Update Continue to engage with the Scottish Government, other local authorities and our Waste PPP contractor to determine the most efficient and effective way of ensuring the Council can provide a waste solution which complies with the 2025 Bio- degradable Municipal Waste Ban We continue to pursue Scottish Government for either a derogation or financial contribution of circa £1.5M to enable the Waste PPP contract to be accommodated alongside the 2025 BMW ban. At the time of writing (30 April 2024) we are still awaiting final confirmation from Scottish Government although given the passage of time we are now working on the basis that a derogation will not be approved and are progressing discussions with Renewi for MBT plants to be converted to Waste Transfer Stations for use from January 2026 onwards, earlier if practical. Further enhance reporting of workforce planning to the Strategic Management Team Workforce planning conversations took place with Managers during January - March and operational workforce plans are now being finalised for reporting to SMT. Absence data is being included in the workforce planning risk matrix to improve reporting to SMT. Progress against actions outlined within operational workforce plans will now be reported through regular Health of the Organisation reporting to Department Management Teams and SMT. The council approved its revised People Strategy and updated strategic workforce planning priorities in February. All strategic workforce planning actions will be included in the annual People Strategy delivery plan. Continue to Improve quality and accuracy of asset information which will benefit asset valuations, calculations for utilities costs and asset management A further 57 condition surveys (7 within the school estate and 50 within the non-school estate) and in accordance with the Scottish Government’s Core Fact of Condition were commissioned in 2023/24 and output will be delivered in 2024/25. Additionally records were updated through inspections and measurements undertaken as part of the ongoing rolling programme of asset valuations. Develop data/analytics business intelligence tool The council is taking a two-pronged approach to building its capacity for business intelligence, within the framework of its new data strategy and action plan (2024-28) approved by SMT in October 2023: a) Microsoft PowerBI – PowerBI is one of the products in the Microsoft 365 (M365) productivity suite and includes some familiar aspects of Microsoft Excel but with much greater capacity to combine and visualise data from multiple sources. Since the council has a long-term plan for the adoption and utilisation of M365 it is the logical tool for data visualisation and analysis. b) The data platform – The “minimum viable product” (MVP) version of this was launched on 26/3/24 and is now available for staff to use. The Data Platform will be essential to allowing “democratised” access to data for use in PowerBI report building by services themselves. The Data Platform will also allow for access to datasets to be controlled and managed by a robust permissions framework; ensure consistent application of data quality, ethics and standards; and enable the FAIR Principles of making data Findable, Accessible, Interoperable and Re- usable. Page 131
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 40 Complete review of performance management Phase one of the Performance Excellence Project is now complete with the following deliverables: - Reduced set of Corporate Outcome Indicators to review and report on long term trends and progress against targets - Decommissioning of Pyramid and development of new Area Scorecards using MS365. - Development of a new Corporate Plan and Business Plan setting out elected members overall priorities and the activities and projects that will deliver on these. - Design and Pilot of a new approach to Self-Assessment which has been piloted at team level and thematic level. Phase Two of the project has been scoped and is now underway. Phase two of the project will involve redesign the council Performance Improvement Framework with workstreams covering planning, design of performance dashboards and the council's approach to public performance reporting. Complete the External Quality Assessment Framework The External Quality Assessment was undertaken and reported to the Audit and Scrutiny Committee. The findings were that the Internal Audit service are fully compliant with the Public Sector Internal Audit Standards in all 14 areas of assessment. Two minor recommendations were made and have been fully actioned. ISSUES FOR FURTHER DEVELOPMENT The review of governance and internal control has identified the following areas for consideration during 2024/25, particularly in the context of continuous improvement within the Council: • Preparation for the implementation of the Visitor Levy in 2026 - Work with the Digital Office, improvement Service, City of Edinburgh and Highland Council on the development of a new digital platform for the billing and collection of the new levy. (Head of Financial Services/Head of Development and Economic Growth – March 2025). • Preparation for new processes being implemented including the practice around Initial Referral Discussions relating to child protection, there will be a need to audit and develop practice further and the development of an action plan based on the findings will help improvement and the need to consider the staffing structures which support this vital area of work. (Head of Children, Families and Justice – March 2025) • Housing Emergency declared by the Council in June 2023 - Utilise outputs from the Housing Summit held, to develop a multi-stakeholder Action Plan, and synthesise the relative elements of this into a revised Local Housing Strategy Action Programme. (Head of Development and Economic Growth – March 2025) • The revaluation of properties for building insurances purposes - Estates will undertake a revaluation programme for the general portfolio, together with a programme of recorded inspections of vacant properties. (Head of Commercial services March 2025) • Publication of the Annual Procurement Report for the Council – This will promote our obligations set out in the Procurement Regulations. (Head of Legal and Regulatory Support – March 2025) • The Licensing Board will undertake a review of its Licensing Policy statement as required in terms of the Licensing (Scotland) Act 2005. (Head of Legal and Regulatory Support – March 2025) • The use of Cloud Storage – Following results of the Internal Audit, put in place actions to ensure optimum, appropriate and secure use of cloud storage is applied across all applications. (Head of Customer Support Services – March 2025) • Further enhance school engagement with national programmes and community partnership Page 132
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Annual Governance Statement www.argyll-bute.gov.uk _______________________________________________ Page 41 approaches supporting young people to build their confidence, increase mental health awareness and promote diversity. (Head of Education, Performance & Improvement – March 2025). CONCLUSION The conclusion from the review activity outlined above and our opinion is that reasonable assurance can be placed upon the adequacy and effectiveness of Argyll and Bute Council’s systems of internal control and governance. Although areas for further improvement have been identified, the annual review demonstrates sufficient evidence that the Council’s Local Code of Corporate Governance is operating effectively and that the Council complies with that Local Code in all significant respects. Systems are in place to regularly review and improve governance and systems of internal control. Councillor Jim Lynch Pippa Milne Kirsty Flanagan Leader Chief Executive Section 95 Officer 20 December 2024 20 December 2024 20 December 2024 Page 133
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 42 BACKGROUND The Local Authority Accounts (Scotland) Regulations 2014 (SSI No.2014/200) require local authorities in Scotland to prepare a Remuneration Report as part of the annual statutory accounts. All information disclosed in the tables in this Remuneration Report were audited by Forvis Mazars LLP. All other sections within the Remuneration Report were reviewed by Forvis Mazars LLP to ensure it is consistent with the Financial Statements. REMUNERATION POLICY AND ARRANGEMENTS Councillors The remuneration of councillors is regulated by the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 (SSI No 2020/26). The Regulations provide for the grading of councillors for the purposes of remuneration arrangements. There are 4 grades of councillor in each local authority for the purposes of payment of remuneration, the Leader of the Council; the Civic Head (Provost); senior councillors; and councillors. The Leader of the Council and the Provost cannot be the same person for the purposes of payment of remuneration. A senior councillor is a councillor who holds a significant position of responsibility in the Council’s political management structure. The Regulations also provide for the banding of local authorities. Argyll and Bute is in Band B and the Council has determined the level of remuneration for councillors within that banding. The salary that is to be paid to the Leader of the Council is set out in the Regulations. For 2023-24 the salary for the Leader of Argyll and Bute Council is £40,205. The Regulations permit the Council to remunerate one civic head. The Regulations set out the maximum salary that may be paid to that civic head. The Council’s civic head is the Provost and their remuneration is set at £30,154 which is the maximum allowed for local authorities in Band B. The Regulations also set out the remuneration that may be paid to senior councillors in addition to the Leader and Civic Head and the total number of senior councillors the Council may have. The maximum yearly amount that may be paid to a senior councillor is 75% of the total yearly amount payable to the Leader of the Council. The total yearly amount payable by the Council for remuneration of all its senior councillors shall not exceed £0.352m. The Council is able to exercise local flexibility in the determination of the precise number of senior councillors up to a maximum of 14 and their salary within these maximum limits. The Council’s policy is to pay a salary of £30,154 to each appointed policy lead. Chairs of Area Committees without a policy lead remit are paid a salary of £24,081. In 2023-24, Argyll and Bute Council had 11 senior councillors in the administration (excluding the Provost and the Leader). The total salary remuneration for senior councillors (excluding the Provost and the Leader) during 2023-24 was £0.313m. The Regulations also permit the Council to pay contributions or other payments as required to the Local Government Pension Scheme in respect of those councillors who elect to become councillor members of the pension scheme. Senior Employees The salary of senior employees is set by reference to national arrangements as well as local decisions on management structures and their associated remuneration levels. The Scottish Joint Negotiating Committee (SJNC) for Local Authority Services (Chief Officials) sets the salary levels for the Chief Executives of Scottish Local Authorities and also sets out the spinal column salary points for Chief Officers which local authorities can utilise in setting the salary levels for posts within their authority. Circular 2023 IR 11.23b sets the amount of salary for the Chief Executive of Argyll and Bute Council for 2023-24. The salaries of Executive Directors are paid at SCP 43 with Heads of Service being paid at SCP 29. Page 134
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 43 COUNCILLORS’ REMUNERATION Councillors’ payments are made in accordance with the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 and The Local Government (Allowances and Expenses) (Scotland) Regulations 2007. The total amount of councillors’ remuneration paid by the Council during the year was: 2022-23 2023-24 Actual Members Allowances Actual £'000 £'000 476 Basic Councillor Salaries 464 66 Leader and Provost's Salary 70 258 Senior Councillor Salaries 313 29 Other Expenses and Allowances paid to Members 25 829 Total Allowances 872 The annual return of councillors’ salaries and expenses for 2023-24 is available for any member of the public to view at all Council libraries and public offices during normal working hours. It is also available on the Council’s website at http://www.argyll-bute.gov.uk/council-and-government/councillors- and- community-councillors. Page 135
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 44 SENIOR COUNCILLORS’ REMUNERATION Additional disclosures are required for senior councillors’ remuneration. Senior councillors’ remuneration is in accordance with the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 which for the purpose of remuneration, grades Councillors as either the Leader of the Council, The Civic Head (Provost), senior Councillors or Councillors. Details of senior Councillors’ remuneration are as follows: 2022-23 Total Remuneration Senior Members Responsibility Salary, Fees and Allowances Taxable Expenses Total Remuneration £ £ £ £ 18,059 Councillor Garret Corner Chair of Mid Argyll, Kintyre & the Islands Area Committee from 24-11-22 24,054 - 24,054 24,932 Councillor Maurice Corry Provost from 19-05-22 30,120 - 30,120 38,254 Councillor Robin Currie Leader from 24-10-20 and Policy Lead for Strategic Development from 24-11-22 40,160 - 40,160 28,648 Councillor Kieron Green Policy Lead for Planning & Regulatory Services from 19-05-22 30,120 - 30,120 24,932 Councillor Amanda Hampsey Policy Lead for Care Services from 19-05-22 30,120 - 30,120 24,932 Councillor Andrew Kain Policy Lead for Roads and Transport and Chair of Oban, Lorn & the Isles Area Committee from 19-05-22 30,120 - 30,120 22,675 Councillor James Lynch Leader of the Largest Opposition Group from 19-05-22 24,054 - 24,054 27,554 Councillor Liz McCabe Policy Lead for Islands and Business Development and Chair of Bute & Cowal Area Committee from 19-05- 22 30,120 - 30,120 28,648 Councillor Yvonne McNeilly Policy Lead for Education 30,120 - 30,120 24,932 Councillor Ross Moreland Policy Lead for Climate Change and Environment Services from 19-05-22 30,120 - 30,120 28,648 Councillor Gary Mulvaney Depute Leader from 26-09-19 and Policy Lead for Finance and Commercial Services from 19-05-22 30,120 - 30,120 22,675 Councillor Gemma Penfold Chair of Helensburgh & Lomond Area Committee from 19-05-22 24,054 - 24,054 14,692 Councillor Alastair Redman Policy Lead for Economic Growth and Corporate Services from 24-11-22 30,120 - 30,120 2023-24 Senior Councillors’ remuneration in the tables above does not include non-taxable expenses. The values in the table above relate to the actual payments made during 2023-24 which differ slightly from those stated on page 42 due to timing differences in regards to payroll. There is no compensation/loss of office payments within the period and there were no benefits or bonuses paid during the year. Page 136
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 45 EMPLOYEES’ REMUNERATION The Regulations require that local authorities provide an analysis of the number of employees whose remuneration in the year was £50,000 or more, including those classified as senior employees who are subject to separate disclosure requirements. The definition of remuneration includes all sums paid to or receivable by an employee, expense allowances chargeable to tax and the monetary value of benefits received other than in cash. This definition therefore includes all payments made to the employee in respect of agreed employment terminations or retirements. However, employer pension contributions are excluded from the definition. Readers should be aware when making comparisons between years that, due to contractual incremental pay increases, the number of employees covered by this disclosure will increase each year. In addition, payments made in respect of agreed employment terminations or retirements can also distort the number and/or banding of employees. The number of employees whose remuneration, excluding employer pension contributions and including redundancy/retirement payments, was £50,000 or more in bands of £5,000 was: Total 652330 £115,000 - £119,999 3- £140,000 - £144,999 1- £120,000 - £124,999 -- £135,000 - £139,999 -1 £125,000 - £129,999 £130,000 - £135,000 - £105,000 - £109,999 1- £110,000 - £114,999 -2 - £95,000 - £99,999 -1 £85,000 - £89,999 131 £90,000 - £94,999 21 Range 2023-242022-23 £ Number of OfficersNumber of Officers £80,000 - £84,999 £50,000 - £54,999 303136 £60,000 - £64,999 7864 £55,000 - £59,999 10783 9 7 -- £65,000 - £69,999 7619 £75,000 - £79,999 173 £70,000 - £74,999 439 £100,000 - £104,999 11 Page 137
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 46 SENIOR EMPLOYEES’ REMUNERATION The table below provides details of the remuneration paid to the Council’s senior employees. This is defined by the regulations as; • someone who has responsibility for the management of the organisation, • occupy a position which is politically restricted, or • any additional employee whose annual remuneration is £150,000 or more (remuneration includes salary, non-cash benefits and any lump sum payment for loss of employment) The following table sets out the remuneration disclosures for 2023-24 for senior officers: Total Remuneration 2022-23 Post Holder Salary (Including Fees and Allowances) Taxable Expenses Total Remuneration 2023-24 £ £ £ £ 138,877 Chief Executive - Pippa Milne 143,625 510 144,135 112,406 Executive Director - Douglas Hendry 118,208 443 118,651 112,160 Executive Director, Section 95 Financial Officer - Kirsty Flanagan 118,064 573 118,637 84,180 Head of Children and Families and Criminal Justice (Section 3 Social Work Officer) - David Gibson 89,237 89,237 The following table sets out the remuneration disclosures for 2023-24 for Live Argyll: Total Remuneration 2022-23 Post Holder Salary (Including Fees and Allowances) Taxable Expenses Total Remuneration 2023-24 £ £ £ £ 84,180 Live Argyll General Manager (Subsidiary of Argyll & Bute Council) - Kevin Anderson 89,237 - 89,237 Page 138
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 47 PENSION BENEFITS Pension benefits for councillors and local government employees are provided through the Local Government Pension Scheme (LGPS). Councillors’ pension benefits are based on career average pay. A Councillor’s pay for pension purposes for each year or part year ending 31 March (other than the pay in the final year commencing 1 April) is increased by the increase in the cost of living, as measured by the appropriate index (or indices) between the end of that year and the last day of the month in which their membership of the scheme ends. The total of the revalued pay is then divided by the period of membership to calculate the career average pay. This is the value used to calculate the pension benefits. Local government employees had a final salary pension scheme prior to 1 April 2015. This means that pension benefits are based on the final year’s pay and the number of years that person has been a member of the scheme. As of 1 April 2015, local government employees are now part of a defined benefit pension scheme worked out on a career average basis. Benefits accumulated are calculated using pensionable pay each scheme year, rather than final salary. All benefits accumulated prior to 1 April 2015 are protected. A five-tier contribution system is in place with contributions from scheme members based on how much pay falls into each tier. This is designed to give more equality between the costs and benefits of scheme membership. The tiers and members contribution rates for 2023-24 are as follows: Whole time pay Contribution Rate 2023-24 On earnings up to and including £25,300 5.50% On earnings above £25,301 and up to £31,000 7.25% On earnings above £31,001 and up to £42,500 8.50% On earnings above £42,501 and up to £56,600 9.50% On earnings of £56,601 and above 12.00% From 1 April 2015, if a person works part-time their contribution is worked out on their part-time pay rate for the job. Prior to this, if a person worked part-time, their contribution rate was worked out on the whole- time pay rate for the job with actual contributions paid on actual pay earned. There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for a lump sum up to the limit set by the Finance Act 2004. From 1 April 2015, benefits are calculated on the basis of a revalued annual pension built up of 1/49th of pensionable pay each year, plus inflation to keep up with the cost of living. Prior to this date, the accrual rate guaranteed a pension based on 1/60th of final pensionable salary and years of pensionable service. Prior to 2009 the accrual rate guaranteed a pension based on 1/80th and a lump sum based on 3/80th of final pensionable salary and years of pensionable service. The value of the accrued benefits has been calculated on the basis of the age at which the person will first become entitled to receive a full pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. Page 139
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 48 SENIOR COUNCILLORS’ PENSION BENEFITS The pension entitlements for senior councillors for the year to 31 March 2024 are shown in the table below, together with the contribution made by the Council to each senior Councillor’s pension during the year. The pension benefits shown relate to the benefits that the individual has accrued as a consequence of their relevant local government service and not just their current appointment. In-year pension contributions Accrued pension benefits Senior Members In-year pension contributions Accrued pension benefits £ £'000 £ £'000 3,485 - Councillor Garret Corner Pension 4,642 1 - Lump Sum - 4,812 1 Councillor Maurice Corry Pension 5,813 1 - Lump Sum - 7,383 8 Councillor Robin Currie Pension 7,751 10 1 Lump Sum 1 5,529 4 Councillor Kieron Green Pension 5,813 5 Lump Sum - 4,812 1 Councillor Amanda Hampsey Pension 5,813 1 - Lump Sum - 4,812 1 Councillor Andrew Kain Pension 5,813 1 - Lump Sum - 4,376 2 Councillor James Lynch Pension 4,642 3 - Lump Sum - 5,318 1 Councillor Liz McCabe Pension 5,813 2 - Lump Sum - 5,529 3 Councillor Yvonne McNeilly Pension 5,813 4 Lump Sum - 4,812 - Councillor Ross Moreland Pension 5,813 1 - Lump Sum - 5,529 8 Councillor Gary Mulvaney Pension 5,813 9 2 Lump Sum 2 4,376 1 Councillor Gemma Penfold Pension 4,642 1 - Lump Sum - 2,836 2 Councillor Alastair Redman Pension 5,813 1 Lump Sum - For the year to 31 March 2023 For the year to 31 March 2024 Page 140
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 49 SENIOR EMPLOYEES’ PENSION BENEFITS The pension entitlements for senior employees for the year to 31 March 2024 are shown in the table below, together with the contribution made by the Council to each senior employee’s pension during the year. The pension benefits shown relate to the benefits that the individual has accrued as a consequence of their relevant local government service and not just their current appointment. In-year pension contributions Accrued pension benefits Senior Officers In-year pension contributions Accrued pension benefits £ £'000 £ £'000 26,709 70 Pension 27,699 75 111 Lump Sum 111 21,495 66 Pension 22,786 70 112 Lump Sum 112 21,495 37 Pension 22,786 41 32 Lump Sum 32 16,247 8 Head of Children and Families and Criminal Justice (Section 3 Social Work Officer) - David Gibson Pension 17,223 40 Lump Sum - For the year to 31 March 2023 For the year to 31 March 2024 Chief Executive - Pippa Milne Executive Director - Douglas Hendry Executive Director, Section 95 Financial Officer - Kirsty Flanagan Live Argyll Senior Employees’ Pension Benefits In-year pension contributions Accrued pension benefits Senior Officers In-year pension contributions Accrued pension benefits £ £'000 £ £'000 16,247 33 Pension 17,223 37 38 Lump Sum 40 For the year to 31 March 2024 Live Argyll General Manager (Subsidiary of Argyll & Bute Council) - Kevin Anderson For the year to 31 March 2023 Page 141
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The Remuneration Report www.argyll-bute.gov.uk _______________________________________________ Page 50 EMPLOYEE EXIT PACKAGES The numbers of exit packages with cost per band for compulsory and other redundancies are set out in the table below: Exit Package Cost Band No £ No £ No £ No £ No £ No £ 1 4,038 2 30,305 3 34,343 £0 - £20,000 2 13,896 - - 2 13,896 1 38,924 2 55,403 3 94,327 £20,001 - £40,000 - - - - - - - - £40,001 - £60,000 - - - - - - 1 88,038 1 88,038 £60,001 - £80,000 - - - - - - - - £80,001 - £100,000 - - - - - - 1 137,037 1 106,165 2 243,202 £100,001 - £150,000 1 134,437 1 127,350 2 261,787 1 161,869 1 161,869 £150,001 - £200,000 - - - - - - 4 341,868 6 279,911 10 621,779 3 148,333 1 127,350 4 275,683 2022-23 2023-24 Compulsory Redundancies Other Departures Total Compulsory Redundancies Other Departures Total For the purposes of this note, Exit Packages include: • Redundancy payment; • Strain on the fund cost (the amount which the Council is required to pay to the pension fund because the employee has retired before the assumed retirement age); • Added Years Lump Sum (the amount which the Council pays to the individual in a one-off lump sum, according to the compensatory added years awarded – maximum three years); and • A capitalised value of the recurring Compensatory Added Years payment. This represents the amount which the Council has to pay to the pension fund because the employee has retired with enhanced service (maximum three years). This amount is paid on an annual basis once a person has left employment with the Council and is therefore a notional cost at 31 March 2024. Termination costs for all Council employees who have accepted redundancy by 31 March 2024 are recognised in the Exit Packages note in 2023-24, or in previous financial years. The total cost recognised in the Exit Packages note in 2023-24 is £0.276m for 4 employees and in 2022- 23 was £0.622m for 10 employees. The supplementary Termination Benefits Note 35 provides more information. FACILITY TIME STATEMENT Under the Trade Union (Facility Time Publication Requirements) Regulations 2017, the Council is required to collect and publish data in relation to its usage and spend of trade union facility time in respect of employees who are trade union representatives. Full details for the period 1 April 2023 to 31 March 2024 are attached at Appendix A. Page 142
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Statement of Comprehensive Income and Expenditure www.argyll-bute.gov.uk _______________________________________________________________________________________ Page 51 Gross Expenditure Gross Income Net Expenditure Gross Expenditure Gross Income Net Expenditure £'000 £'000 £'000 Service Note £'000 £'000 £'000 26,810 18,209 8,601 Chief Executive and Financial Services 1,281 95 1,186 Executive Director Douglas Hendry 436 - 436 Executive Director 427 - 427 33,399 4,250 29,149 Commercial Services 23,010 3,857 19,153 106,026 13,620 92,406 Education 114,124 13,202 100,922 15,942 4,371 11,571 Legal and Regulatory Support 17,520 4,241 13,279 Executive Director Kirsty Flanagan 418 - 418 Executive Director 242 - 242 Financial Services 25,613 18,639 6,974 11,859 674 11,185 Customer Support Services 12,165 534 11,631 25,256 14,380 10,876 Development and Economic Growth 23,138 13,849 9,289 71,971 24,491 47,480 Roads and Infrastructure 75,990 29,300 46,690 - - 174,434 94,948 79,486 Social Work 181,285 103,209 78,076 9,897 2,303 7,594 Other Non-Departmental Costs 10,075 678 9,397 476,448 177,246 299,202 Net Cost of Services 484,870 187,604 297,266 2022-23 2023-24 Page 143
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Statement of Comprehensive Income and Expenditure www.argyll-bute.gov.uk _______________________________________________________________________________________ Page 52 Other Operating Income and Expenditure: (437) Net (Gain)/loss on Disposal of Long Term Assets (262) 1,643 Other Operating Income and Expenditure 8 1,670 1,206 Total Other Operating Income and Expenditure 1,408 Financing and Investment Income and Expenditure: 10,514 Interest Payable and Similar charges 14,037 (2,966) Interest and Investment Income (4,779) 141 Net Pension Interest Expense (6,596) 7,689 Total Financing and Investment Income and Expenditure 2,662 Taxation and Non-Specific Grant Income: (191,775) General Government Grants (187,193) (22,549) Government Capital Grants and Other Capital Contributions 13 (23,550) (33,179) Non-domestic Rates Redistribution (37,645) (647) Non-domestic Rates TIF (804) (53,900) Council Tax Income (61,909) (302,050) Total Taxation and Non-Specific Grant Income (311,101) 6,047 (Surplus)/Deficit on Provision of Services 7.1 (9,765) (21,104) (Surplus)/Deficit on revaluation of Long Term Assets (10,097) (154,350) Other Post Employment Benefits (Pensions) 31.2 164,914 (175,454) Other Comprehensive Income and Expenditure 154,817 (169,407) Total Comprehensive Income and Expenditure 145,052 This statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. Councils raise taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Statement of Movement in Reserves. Page 144
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Balance Sheet www.argyll-bute.gov.uk _________________________________________________ Page 53 £'000 £'000 Note £'000 £'000 Long Term Assets Property Plant & Equipment 15 451,018 - Other Land and Buildings 457,369 10,872 - Vehicles, Plant, Furniture and Equipment 11,012 235,076 - Infrastructure Assets 239,372 8,892 - Community Assets 9,110 3,286 - Surplus Assets 4,620 21,440 - Assets Under Construction 35,724 730,584 Total Property Plant & Equipment 757,207 2,345 Heritage Assets 16 2,569 733 Intangible Assets 17 888 2,553 Investment Property 18 2,514 5,492 Long Term Investments 27 492 5,880 Long-Term Debtors 22 5,816 139,014 Other Long Term Debtors (Pensions) 31 - 886,601 Total Long Term Assets 769,486 Current Assets 1,130 Inventories 1,043 27,186 Short Term Debtors (Net of Impairment) 23 38,368 1,554 Assets Held for Sale 24 1,619 60,000 Short Term Investments 27,500 823 Cash and Cash Equivalents 25 (9,991) 90,693 Total Current Assets 58,539 Current Liabilities (11,818) Short-term Borrowing 27 (13,478) (50,044) Short-term Creditors 26 (52,374) (1,450) Provisions 29 (1,665) (5,280) Other Short Term Liabilities 28 (5,336) (68,592) Total Current Liabilities (72,853) Long-term Liabilities (132,155) Borrowing Repayable within a Period in Excess of 12 Months 27 (107,458) (107,033) Other Long-term liabilities 28 (101,697) - Other Long-term liabilities (Pensions) 31 (19,578) (2,444) Provisions 29 (2,855) - Capital Grant Receipts in Advance 30 (1,564) (241,632) Total Long-term Liabilities (233,152) 667,070 Total Assets less Liabilities 522,020 31 March 202431 March 2023 Page 145
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Balance Sheet www.argyll-bute.gov.uk _________________________________________________ Page 54 The Balance Sheet is a snapshot of the value as at the 31 March 2024 of the assets and liabilities recognised by the Council. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. Reserves are reported as follows: • Unusable Reserves: are reserves that the Council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the revaluation reserve), where amounts would only become available to provide services if the assets are sold and reserves that hold timing differences shown in the Movement in Reserves Statement line “Adjustments between accounting basis and funding basis under regulations”. • Usable Reserves: are reserves that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and statutory limitations on their use (for example the capital receipts reserve that may only be used to fund capital expenditure or repay debt). The Unaudited Annual Accounts were issued on 27 June 2024 and the Audited Annual Accounts were authorised for issue on 20 December 2024. Kirsty Flanagan Section 95 Officer 20 December 2024 £'000 £'000 Note £'000 £'000 Unusable Reserves 32 174,952 - Revaluation Reserve 180,661 268,788 - Capital Adjustment Account 249,093 (1,871) - Financial Instruments Adjustment Account (1,585) 139,014 - Pensions Reserve (19,578) (7,588) - Accumulated Absences Account (8,272) 573,295 400,319 Usable Reserves 33 4,503 - Capital Funds 3,197 2,916 - Repairs and Renewals Funds 2,763 86,356 - General Fund Balance 115,741 93,775 121,701 667,070 Total Reserves 522,020 31 March 202431 March 2023 Page 146
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Statement of Movement in Reserves www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 55 Unusable Reserves (Note 32) Movements in 2023-24 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Revaluation Reserve Capital Adjustment Account Pensions Reserve Financial Instrument Adjustment Account Accumu- lated Absences Account Total Unusable Reserves Total Reserves £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 2023 (86,356) (2,916) (4,503) (93,775) (174,952) (268,788) (139,014) 1,871 7,588 (573,295) (667,070) (Surplus)/Deficit on Provision of Services (9,765) (9,765) - (9,765) Other Comprehensive Income and Expenditure - (10,097) 164,914 154,817 154,817 Retrospective adjustment to the statutory repayment of debt for service concession arrangements - permitted flexibility (36,038) (36,038) 36,038 36,038 - Total Comprehensive Income and Expenditure (45,803) - - (45,803) (10,097) 36,038 164,914 - - 190,855 145,052 Adjustments between accounting basis and funding basis under regulations: Disposal of Assets 99 (99) Amortisation of Intangible Assets - - - - Depreciation of Non-current Assets (21,443) (21,443) 21,443 21,443 - Impairment of Non-current Assets 2,576 2,576 (2,576) (2,576) - Capital Grants and Contributions credited to the Comprehensive Income and Expenditure Statement 23,550 23,550 (23,550) (23,550) - Capital Expenditure Charged to the General Fund 1,616 1,616 (1,616) (1,616) - Net Gain or Loss on Sale of Non-current Assets 262 (671) (409) 409 409 - Amount by which finance costs calculated in accordance with the Code are different from the amount of finance costs calculated in accordance with statutory requirements 286 286 (286) (286) - Employee Benefits (684) (684) 684 684 - Amount by which pension costs calculated in accordance with the Code are different from the contributions due under pension scheme regulations 6,322 6,322 (6,322) (6,322) - Usable Reserves (Note 33) Page 147
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Statement of Movement in Reserves www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 56 Unusable Reserves (Note 32) Movements in 2023-24 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Revaluation Reserve Capital Adjustment Account Pensions Reserve Financial Instrument Adjustment Account Accumu- lated Absences Account Total Unusable Reserves Total Reserves £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Statutory Repayment of Debt - Loans Fund Advances 7,696 7,696 (7,696) (7,696) - Statutory Repayment of Debt - Finance Leases 48 48 (48) (48) - Statutory Repayment of Debt - NPDO Finance Lease Liability 5,232 5,232 (5,232) (5,232) - In year adjustment to the statutory repayment of debt for service concession arrangements - permitted flexibility (4,831) (4,831) 4,831 4,831 - Total Statutory Adjustments 20,630 - (671) 19,959 99 (14,134) (6,322) (286) 684 (19,959) - Net (Increase)/Decrease before Transfers to Other Statutory Reserves (25,173) - (671) (25,844) (9,998) 21,904 158,592 (286) 684 170,896 145,052 Transfer to/from Other Statutory Reserves 77 153 1,977 2,207 (2,207) (2,207) - Adjustments permitted by Accounting Standards for depreciation that is related to the revaluation balance rather than historic cost (4,289) (4,289) 4,289 4,289 - (Increase)/Decrease in Year (29,385) 153 1,306 (27,926) (5,709) 19,697 158,592 (286) 684 172,976 145,052 Balance at 31 March 2024 Carried Forward (115,741) (2,763) (3,197) (121,701) (180,661) (249,093) 19,578 1,585 8,272 (400,319) (522,020) Other Transfers required by Statute Usable Reserves (Note 33) Other Transfers This Statement shows the movement in the 2023-24 financial year on the different reserves held by the Council, analysed into ‘Usable Reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and “Unusable Reserves”. The ‘(Surplus)/Deficit on the Provision of Services’ line shows the true economic cost of providing the Council’s services, more details of which are shown in Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance for Council Tax setting purposes. The ‘Net (Increase)/Decrease before Transfers to Other Statutory Reserves’ line shows the Statutory General Fund Balance before any discretionary transfers to or from earmarked reserves undertaken by the Council. Page 148
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Statement of Movement in Reserves www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 57 Unusable Reserves (Note 32) Comparative Movements in 2022-23 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Revaluation Reserve Capital Adjustment Account Pensions Reserve Financial Instrument Adjustment Account Accumu- lated Absences Account Total Unusable Reserves Total Reserves £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 2022 (96,081) (2,682) (4,414) (103,177) (157,644) (241,331) (4,634) 2,198 6,928 (394,483) (497,660) (Surplus)/Deficit on Provision of Services 6,047 6,047 - 6,047 Other Comprehensive Expenditure and Income (21,104) (154,350) (175,454) (175,454) Total Comprehensive Expenditure and Income 6,047 - - 6,047 (21,104) - (154,350) - - (175,454) (169,407) Adjustments between accounting basis and funding basis under regulations: Disposal of Assets 173 (173) Amortisation of Intangible Assets - - - Depreciation and of Non-current Assets (20,947) (20,947) 20,947 20,947 - Impairment of Non-current Assets (3,128) (3,128) 3,128 3,128 - Capital Grants and Contributions credited to the Comprehensive Income and Expenditure Statement 22,549 22,549 (22,549) (22,549) - Capital Expenditure Charged to the General Fund 2,938 2,938 (2,938) (2,938) - Net Gain or Loss on Sale of Non-current Assets 437 (568) (131) 131 131 - Amount by which finance costs calculated in accordance with the Code are different from the amount of finance costs calculated in accordance with statutory requirements 327 327 (327) (327) - Employee Benefits (660) (660) 660 660 - Amount by which pension costs calculated in accordance with the Code are different from the contributions due under pension scheme regulations (19,970) (19,970) 19,970 19,970 - Usable Reserves (Note 33) Page 149
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Statement of Movement in Reserves www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 58 Unusable Reserves (Note 32) Comparative Movements in 2022-23 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Revaluation Reserve Capital Adjustment Account Pensions Reserve Financial Instrument Adjustment Account Accumu- lated Absences Account Total Unusable Reserves Total Reserves £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Statutory Repayment of Debt - Loans Fund Advances 20,317 20,317 (20,317) (20,317) - Statutory Repayment of Debt - Finance Leases 46 46 (46) (46) - Statutory Repayment of Debt - NPDO Finance Lease Liability 5,070 5,070 (5,070) (5,070) - Total Statutory Adjustments 6,979 - (568) 6,411 173 (26,887) 19,970 (327) 660 (6,411) - Net (Increase)/Decrease before Transfers to Other Statutory Reserves 13,026 - (568) 12,458 (20,931) (26,887) (134,380) (327) 660 (181,865) (169,407) Transfer to/from Other Statutory Reserves 322 (234) 480 568 (568) (568) - Adjustments permitted by Accounting Standards for depreciation that is related to the revaluation balance rather than historic cost (3,623) (3,623) 3,623 3,623 - (Increase)/Decrease in Year 9,725 (234) (88) 9,403 (17,308) (27,455) (134,380) (327) 660 (178,810) (169,407) Balance at 31 March 2023 Carried Forward (86,356) (2,916) (4,503) (93,775) (174,952) (268,788) (139,014) 1,871 7,588 (573,295) (667,070) Other Transfers required by Statute Usable Reserves (Note 33) Other Transfers This Statement shows the movement in the 2022-23 financial year on the different reserves held by the Council, analysed into ‘Usable Reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and “Unusable Reserves”. The ‘(Surplus)/Deficit on the Provision of Services’ line shows the true economic cost of providing the Council’s services, more details of which are shown in Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance for Council Tax setting purposes. The ‘Net (Increase)/Decrease before Transfers to Other Statutory Reserves’ line shows the Statutory General Fund Balance before any discretionary transfers to or from earmarked reserves undertaken by the Council. Page 150
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Cash Flow Statement www.argyll-bute.gov.uk ______________________________________________ Page 59 The Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amounts of net cash flow arising from operating activities is a key indicator of the extent to which the operations of the Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the Council. 2022-23 2023-24 £'000 Note £'000 6,047 Net (Surplus)/Deficit on the Provision of Services (9,765) (21,310) Adjustments to net surplus or deficit on the provision of services for non-cash movements 21,585 5,955 Adjustments for items included in the net surplus or deficit on the provision of services that are investing and financing activities 10,294 (9,308) Net Cash Flows from Operating Activities 39 22,114 (14,323) Net Cash Flows from Investing Activities 40 (38,637) 42,536 Net Cash Flows from Financing Activities 41 27,337 18,905 Net (Increase)/Decrease in Cash and Cash Equivalents 10,814 (19,728) Cash and Cash Equivalents at the beginning of the Reporting Period (823) (823) Cash and Cash Equivalents at the end of the Reporting Period 25 9,991 Page 151
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 60 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.1 General Principles The Annual Accounts summarise the Council’s transactions for the 2023-24 financial year and its position at the year-end of 31 March 2024. The Council must ensure that its Annual Accounts are prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014, which section 12 of the Local Government in Scotland Act 2003 require to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2023-24, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2003 Act. The accounts have been prepared under the historic cost convention, other than changes resulting from the revaluation of certain categories of non-current assets and financial instruments, and on a going concern basis. The accounting policies adopted are set out below and have been applied consistently throughout the year in dealing with any items that are considered material to the accounts. 1.2 Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular: • Revenue from contracts with service recipients, whether for services or the provision of goods, is recognised when (or as) the goods or services are transferred to the service recipient in accordance with the performance obligations in the contract. • Supplies are recorded as expenditure when they are consumed – where there is a gap between the date supplies are received and their consumption; they are carried as inventories on the Balance Sheet. • Expenses in relation to services received (including services provided by employees) are recorded as expenditure when the services are received rather than when payments are made. • Interest receivable on investments and payable on borrowings is accounted for respectively as income and expenditure on the basis of the effective interest rate for the relevant financial instrument rather than the cash flows fixed or determined by the contract. • Where revenue and expenditure have been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where debts may not be settled, the balance of debtors is written down and a charge made to revenue for the income that might not be collected. 1.3 Cash and Cash Equivalents Cash is represented by cash in hand and deposits with financial institutions repayable without penalty of notice of not more than 24 hours. Cash equivalents are investments that mature in three months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Balance Sheet and Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Council’s cash management. 1.4 Prior Period Adjustments, Changes in Accounting Policies, Estimates and Errors Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Changes in accounting estimates are accounted for prospectively, i.e. in the current and future years affected by the change and do not give rise to a prior period adjustment. Changes in accounting policies are only made when required by proper accounting practices or the Page 152
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 61 change provides more reliable or relevant information about the effect of transactions, other events and conditions on the Council’s financial position or financial performance. Where a change is made, it is applied retrospectively by adjusting opening balances and comparative amounts for the prior period as if the new policy had always been applied.Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period. 1.5 Charges to Revenue for Non-Current Assets Services, support services and trading accounts are debited with the following amounts to record the cost of holding non-current assets during the year: • Depreciation attributable to the assets used by the relevant service. • Revaluation and impairment losses on assets used by the service where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off. • Amortisation of intangible fixed assets attributable to the service. The council is not required to raise Council Tax to fund depreciation, revaluation and impairment losses or amortisation. However, it is required to make an annual contribution from revenue towards the reduction in its overall borrowing requirement equal to an amount calculated on a prudent basis determined by the Council in accordance with the Statutory Repayment of Loans Fund Advances. Depreciation, revaluation and impairment losses and amortisation are therefore replaced by Loans Fund principal repayments in the General Fund Balance by way of an adjusting transaction within the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two. 1.6 Employee Benefits 1.6.1 Benefits Payable during Employment Short-term employee benefits are those due to be settled wholly within 12 months of the year-end. They include such benefits as wages and salaries, paid annual leave, paid sick leave and non-monetary benefits (e.g. cars) for current employees. These benefits are recognised as an expense for services in the year in which employees render service to the Council. An accrual is made for the cost of holiday entitlements earned by employees but not taken before the year-end which employees can carry forward into the next financial year. The accrual is made at the wage and salary rates applicable in the following accounting year, being the period in which the employee takes the benefit. The accrual is charged to the Surplus or Deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement so that holiday entitlements are charged to revenue in the financial year in which the holiday absence occurs. 1.6.2 Termination Benefits Termination benefits are amounts payable as a result of a decision by the Council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy. They are charged on an accruals basis to the appropriate service segment in the Comprehensive Income and Expenditure Statement at the earlier of when the Council can no longer withdraw the offer of those benefits or when the Council recognised costs for a restructuring. Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund Balance to be charged with the amount payable by the Council to the pension fund or pensioner in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for pension enhancement termination benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year-end. Page 153
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 62 1.6.3 Post-Employment Benefits The Council participates in two separate pension schemes: • The Scottish Teachers’ Pension Scheme administered by the Scottish Government. • The Local Government (Scotland) Pensions Scheme administered by the Strathclyde Pension Fund. Both schemes provide defined benefits to members (retirement lump sums and pensions), earned while employees work for the Council. However, the arrangements for the teachers’ scheme mean that liabilities for these benefits cannot ordinarily be identified specifically to the Council. The scheme is therefore accounted for as if it were a defined contribution scheme. No liability for future payments of benefits is recognised in the Balance Sheet and the Education Services line in the Comprehensive Income and Expenditure Statement is charged with the employer’s contributions payable to the Teachers’ Pension Scheme in the year. Local Government Pension Scheme The Local Government Pension Scheme is accounted for as a defined benefits scheme: • The liabilities of the Strathclyde Pension Fund attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method – i.e. an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees, based on assumptions about mortality rates, employee turnover rates and projected earnings for current employees. • Liabilities are discounted to their value at current prices, using a discount rate of 4.8% (based on the indicative rate of return on a “high quality corporate bond of equivalent term and currency to the liability” (as measured by the yield on iBoxx Sterling Corporates Index, AA over 15 years)). • The assets of the Strathclyde Pension Fund attributable to the Council are included in the Balance Sheet at their fair value: ▪ quoted securities – current bid price ▪ unquoted securities – professional estimate ▪ unitised securities – current bid price ▪ property – market value The change in the net pension’s liability is analysed into the following components: • Service cost comprising: ▪ Current service cost – the increase in liabilities as a result of years of service earned this year - allocated in the Comprehensive Income and Expenditure Statement to the services for which the employees worked. ▪ Past service cost – the increase in liabilities as a result of a scheme amendment or curtailment whose effect relates to years of service earned in earlier years, debited to the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. ▪ Net interest on the net defined benefit liability (asset), i.e. net interest expense for the Council – the change during the period in the net defined benefit liability (asset) that arises from the passage of time charged to the Financing and Investment Income and Expenditure line of the Comprehensive Income and Expenditure Statement. This is calculated by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the net defined benefit liability (asset) at Page 154
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 63 the beginning of the period, taking into account any changes in the net defined liability (asset) during the period as a result of contribution and benefit payments. • Re-measurements comprising: ▪ The return on plan assets – excluding amounts included in the net interest on the net defined benefit liability (asset), charged to the Pension Reserve as Other Comprehensive Income and Expenditure. ▪ Actuarial gains and losses – changes in the net pensions liability that arise because events have not coincided with assumptions made at the last actuarial valuation or because the actuaries have updated their assumptions, charged to the Pensions Reserve. ▪ Contributions paid to the Strathclyde Pension Fund – cash paid as employer’s contributions to the pension fund in settlement of liabilities; not accounted for as an expense. In relation to retirement benefits, statutory provisions require the General Fund Balance to be charged with the amount payable by the Council to the pension fund or directly to pensioners in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are transfers to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable to the fund but unpaid at the year-end. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits earned by employees. 1.6.4 Post Employment Discretionary Benefits The Council also has restricted powers to make discretionary awards of retirements benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any member of staff (including teachers) are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme. 1.7 Events after the Reporting Period Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Annual Accounts are authorised for issue. Two types of events can be identified: • Those that provide evidence of conditions that existed at the end of the reporting period – the Annual Accounts are adjusted to reflect such events. • Those that are indicative of conditions that arose after the reporting period – the Annual Accounts are not adjusted to reflect such events, but where a category of events would have a material impact, disclosure is made in the notes of the nature of the events and their estimated financial effect. Events taking place after the date of authorisation for issue are not reflected in the Annual Accounts. 1.8 Financial Liabilities Financial liabilities are recognised on the Balance Sheet when the Council becomes party to the contractual provisions of a financial instrument and initially measured at fair value and carried at their amortised cost. Annual charges to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest payable are based on the carrying value of the liability, multiplied by the effective rate of interest for the instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments over the life of the instrument to the amount at which it was originally recognised. Page 155
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 64 For most of the borrowings that the Council has, this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest) and interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement. Gains and losses on the repurchase or early settlement of borrowing are credited and debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement in the year of repurchase/settlement. However, where repurchase has taken place as part of the restructuring of the loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is respectively deducted from or added to the amortised cost of the new or modified loan and the write-down to the Comprehensive Income and Expenditure Statement is spread over the life of the loan by an adjustment to the effective interest rate. Where premiums and discounts have been charged to the Comprehensive Income and Expenditure Statement, regulations allow the impact on the General Fund Balance to be spread over future years. The Council has a policy of spreading the gain/loss over the term that was remaining on the loan against which the premium was payable or discount receivable when it was repaid. The reconciliation of amounts charged to the Comprehensive Income and Expenditure Statement to the net charge required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. 1.9 Financial Assets Financial assets are classified based on a classification and measurement approach that reflects the business model for holding the financial assets and their cashflow characteristics. There are three main classes of financial assets measured at: • Amortised cost • Fair value through profit or loss, and • Fair value through other comprehensive income The Council’s business model is to hold investments to collect contractual cash flows. Financial assets are therefore classified as amortised cost, except for those whose contractual payments are not solely payment of principal and interest (i.e. where the cash flows do not take the form of a basic debt instrument). Financial Assets Measured at Amortised Cost Financial assets measured at amortised cost are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value. They are subsequently measured at their amortised cost. Annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the carrying amount of the asset multiplied by the effective rate of interest for the instrument. For most of the financial assets held by the Council, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement. Financial Assets Measured at Fair Value through Profit or Loss Financial assets that are measured at fair value through profit or loss are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Fair value gains and losses are recognised as they arrive in the Surplus or Deficit on the Provision of Services. The fair value measurements of the financial assets are based on the following techniques: • Instruments with quoted market prices – the market price Page 156
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 65 • Other instruments with fixed and determinable payments – discounted cash flow analysis The inputs to the measurement techniques are categorised in accordance with the following three levels: • Level 1 inputs – quoted prices (unadjusted) in active markets for the identical assets that the Council can access at the measurement date. • Level 2 inputs – inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. • Level 3 inputs – unobservable inputs for the asset. Any gains and losses that arise on the derecognition of the asset are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. Expected Credit Loss Model The Council recognises expected credit losses on all of its financial assets held at amortised cost, either on a 12-month or lifetime basis. The expected credit loss model also applies to lease receivables and contract assets. Only lifetime losses are recognised for trade receivables (debtors) held by the Council. 1.10 Government Grants and Contributions Whether paid on account, by instalments or in arrears, government grants and third-party contributions and donations are recognised as due to the Council when there is reasonable assurance that: • The Council will comply with the conditions attached to the payments; and • The grants or contributions will be received. Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Statement until conditions attached to the grant or contribution have been satisfied. Conditions are stipulations that specify that the future economic benefits or service potential embodied in the asset in the form of the grant or contribution are required to be consumed by the recipient as specified, or future economic benefits or service potential must be returned to the transferor. Monies advanced as grants and contributions for which conditions have been satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution is credited to the relevant service line (attributable revenue grants and contributions) or Taxation and Non-Specific Grant Income and Expenditure (non-ringfenced revenue grants and all capital grants) in the Comprehensive Income and Expenditure Statement. Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants Unapplied Account. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied Account are transferred to the Capital Adjustment Account once they have been applied to fund capital expenditure. 1.11 Heritage Assets The main heritage assets held by the Council are two art collections, an archaeology collection and a historic jail and courthouse which is operated as a “living” museum. The “Argyll Collection” is an art collection which was set up to provide the young people of Argyll and Bute with direct access to a wide range of quality art recognising that they had limited access to museums and galleries. In addition, the Council holds other works of art which are held at various libraries and the Campbeltown Museum. Heritage Assets are recognised and measured (including the treatment of revaluation gains and losses) in accordance with the Council’s accounting policies on property, plant and equipment. However, some of the measurement rules are relaxed in relation to heritage assets as detailed below. The Council’s main heritage assets are accounted for as follows: Page 157
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 66 The Art Collections The collections cover a range of media including acrylic, charcoal, embroidery, engraving, etching, gouache, lithography, oil, pastel, pencil, procion dye, screenprint, monoprint, watercolour, woodcut, ceramic, bronze and woodcarving. These items are reported in the Balance Sheet at insurance valuation which is based on market values. These valuations are updated periodically. The assets within the art collections are deemed to have indeterminate lives and a high residual value; hence the Council does not consider it appropriate to charge depreciation. Acquisitions are made by purchase or donation. Acquisitions are initially recognised at cost and donations are recognised at valuation with valuations provided by external valuers and with reference to appropriate commercial markets using the most relevant and recent information from sales at auctions. Inveraray Jail and Courthouse and “Other” Historic Buildings The building is owned by Argyll and Bute Council and leased out to an organisation which runs it as a “living museum”. The building is valued in accordance with the Council’s property, plant and equipment policy. Other buildings included in this category are McCaig’s Folly in Oban, the Argyll Mausoleum and Castle Lodge in Dunoon. Archaeology and “Other” Museum Exhibits The Council has obtained specialist valuations for the archaeology collection held within Campbeltown Museum which covers a range of objects including swords, bones, pottery, stone and leather remains. Similar to the Art Collections, these items are reported in the Balance Sheet at insurance valuation which is based on market values. These valuations will be updated periodically. The assets within the collection are deemed to have indeterminate lives and a high residual value; hence the Council does not consider it appropriate to charge depreciation. Heritage Assets – General The carrying amounts of heritage assets are reviewed where there is evidence of impairment for heritage assets, e.g. where an item has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any impairment is recognised and measured in accordance with the Council’s general policies on impairment (see note 1.19.3 in this summary of significant accounting policies). The proceeds of any disposals are accounted for in accordance with the Council’s general provisions relating to the disposal of property, plant and equipment. Disposal proceeds are disclosed separately in the notes to the financial statements and are accounted for in accordance with statutory accounting requirements relating to capital expenditure and receipts (see note 1.19.4 in this summary of significant accounting policies). 1.12 Intangible Assets Expenditure on non-monetary assets that do not have physical substance but are controlled by the Council as a result of past events (e.g. software licences) is capitalised when it is expected that future economic benefits or service potential will flow from the intangible asset to the Council. Expenditure on the development of websites is not capitalised if the website is solely or primarily intended to promote or advertise the Council’s goods or services. Intangible assets are measured initially at cost. Amounts are not revalued, as the fair value of the assets held by the Council cannot be determined by reference to an active market. The depreciable amount of an intangible asset is amortised over its useful life to the relevant service lines in the Comprehensive Income and Expenditure Statement. An asset is tested for impairment whenever there is an indication that the asset might be impaired – any losses recognised are posted to the relevant service lines in the Comprehensive Income and Expenditure Statement. Any gain or loss arising on the disposal or abandonment of an intangible asset is posted to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Page 158
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 67 Where expenditure on intangible assets qualifies as capital expenditure for statutory purposes, amortisation, impairment losses and disposal gains and losses are not permitted to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account. 1.13 Interests in Companies and Other Entities The Council has material interests in companies and other entities that have the nature of subsidiaries, associates or joint ventures and requires to prepare Group Accounts. In the Council’s own single entity accounts, the interests in companies and other entities are recorded as financial assets at cost, less any provision for losses. 1.14 Inventories Inventories are included in the Balance Sheet at the lower of cost and net realisable value. The cost of inventories is assigned using the weighted average costing formula. 1.15 Investment Properties Investment properties are those that are used solely to earn rentals and/or for capital appreciation. The definition is not met if the property is used in any way to facilitate the delivery of services or production of goods or is held for sale. Investment properties are measured initially at cost and subsequently at fair value, being the price that would be received to sell such an asset in an orderly transaction between market participants at the measurement date. As a non-financial asset, investment properties are measured at highest and best use. Properties are not depreciated but are revalued annually according to market conditions at the year-end. Gains and losses on revaluation are posted to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The same treatment is applied to gains and losses on disposal. Rentals received in relation to investment properties are credited to the Financing and Investment Income line and result in a gain for the General Fund Balance. However, revaluation and disposal gains and losses are not permitted by statutory arrangements to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account. 1.16 Leases Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases. Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification. Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accounted for under this policy where fulfilment of the arrangement is dependent on the use of specific assets. 1.16.1 The Council as Lessee a) Finance Leases Property, plant and equipment held under finance leases is recognised on the Balance Sheet at the commencement of the lease at its fair value measured at the lease’s inception (or the present value of the minimum lease payments, if lower). The asset recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs of the Council are added to the carrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Page 159
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 68 Lease payments are apportioned between: • A charge for the acquisition of the interest in the property, plant or equipment – applied to write down the lease liability, and • A finance charge (debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement). Property, plant and equipment recognised under finance leases is accounted for using the policies applied generally to such assets, subject to depreciation being charged over the lease term if this is shorter than the asset’s estimated useful life. The Council is not required to raise Council Tax to cover depreciation or revaluation and impairment losses arising on leased assets. Instead, a prudent annual contribution is made from revenue funds towards the deemed capital investment in accordance with statutory requirements. Depreciation and revaluation and impairment losses are therefore substituted by a revenue contribution in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two. b) Operating Leases Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense of the services benefiting from use of the leased property, plant or equipment. Charges are made on a straight-line basis over the life of the lease, even if this does not match the pattern of payments (e.g. there is a rent-free period at the commencement of the lease). 1.16.2 The Council as Lessor a) Finance Leases Where the Council grants a finance lease over a property or an item of plant and equipment, the relevant asset is written out of the Balance Sheet as a disposal. At the commencement of the lease, the carrying amount of the asset in the Balance Sheet (whether property, plant and equipment or assets held for sale) is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. A gain, representing the Council’s net investment in the lease, is credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal), matched by a lease (long-term debtor) asset in the Balance Sheet. Lease rentals receivable are apportioned between: • A charge for the acquisition of the interest in the property – applied to write down the lease debtor (together with any premiums received); and • Finance income (credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement). The gain credited to the Comprehensive Income and Expenditure Statement on disposal is not permitted by statute to increase the General Fund Balance and is required to be treated as a capital receipt. Where a premium has been received, this is posted out of the General Fund Balance to the Capital Receipts Reserve in the Movement in Reserves Statement. When the future rentals are received, the element for the capital receipt on disposal of the asset is used to write down the debtor. At this point, the deferred capital receipts are transferred to the Capital Receipts Reserve. The written-off value of disposals is not a charge against Council Tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement. Page 160
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 69 b) Operating Leases Where the Council grants an operating lease over a property or an item of plant or equipment, the asset is retained in the Balance Sheet. Rental income is credited to the relevant Service lines in the Comprehensive Income and Expenditure Statement, with the exception of rental income from investment property which is credited to Interest and Investment Income. Credits are made on a straight line basis over the life of the lease, even if this does not match the pattern of payments (e.g. there is a premium paid at the commencement of the lease). Initial direct costs incurred in negotiating and arranging the lease are added to the carrying amount of the relevant asset and charged as an expense over the lease term on the same basis as rental income. 1.17 Overheads and Support Services The costs of overheads and support services are not charged to service segments in accordance with the Council’s arrangements for accountability and financial performance. 1.18 Assets Held for Sale Property, plant and equipment are classified as Assets Held for Sale when the following criteria are met: • The property is available for immediate sale in its present condition. • The sale must be highly probable; and an active programme to locate a buyer and complete the plan must have been initiated. • The asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value. • The sale should be expected to qualify for recognition as a completed sale within one year (although events or circumstances may extend the period to complete the sale beyond one year). When these criteria are met, assets within the category of Property, Plant and Equipment will be reclassified as Assets Held for Sale. 1.19 Property, Plant and Equipment Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes that are expected to be used during more than one financial year are classified as Property, Plant and Equipment. 1.19.1 Recognition Expenditure on the acquisition, creation, or enhancement of Property, Plant and Equipment is capitalised on an accruals basis, provided that it is probable that the future economic benefits or service potential associated with the item will flow to the Council and the cost of the item can be measured reliably. Expenditure that maintains but does not add to an asset’s potential to deliver future economic benefits or service potential (i.e. repairs and maintenance) is charged as an expense when it is incurred. 1.19.2 Measurement Assets are initially measured at cost, comprising: • The purchase price. • Any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. • The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. The Council does not capitalise borrowing costs incurred while assets are under construction. Page 161
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 70 The cost of assets acquired other than by purchase is deemed to be its fair value, unless the acquisition will not increase the cash flows of the Council. In the latter case, the cost of the acquisition is the carrying amount of the asset given up by the Council. Donated assets are measured initially at fair value. The difference between fair value and any consideration paid is credited to the Taxation and Non-Specific Grant Income line of the Comprehensive Income and Expenditure Statement, unless the donation has been made conditionally. Until conditions are satisfied, the gain is held in the Donated Assets Accounts. Where gains are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance to the Capital Adjustment Account in the Movement in Reserves Statement. Assets are then carried in the Balance Sheet using the following measurement bases: • Infrastructure, community assets and assets under construction – depreciated historical cost. • Council offices – current value, determined as the amount that would be paid for the asset in its existing use (existing use value – EUV). • School buildings – current value, but because of their specialist nature, are measured at depreciated replacement cost which is used as an estimate of current value. • Surplus assets – the current value measurement base is fair value, estimated at highest and best use from a market participant’s perspective. • All other assets – current value, determined as the amount that would be paid for the asset in its existing use (existing use value – EUV). Where there is no market-based evidence of current value because of the specialist nature of an asset, depreciated replacement cost (DRC) is used as an estimate of current value. Where non-property assets have short useful lives or low values (or both), depreciated historical cost is used as a proxy for current value. Assets included in the Balance Sheet at current value are revalued sufficiently regularly to ensure that their carrying amount is not materially different from their current value at the year-end, but as a minimum every five years. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Surplus or Deficit on the Provision of Services where they arise from the reversal of an impairment loss previously charged to a service. Where decreases in value are identified, they are accounted for by: • Where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains). • Where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement. The Revaluation Reserve contains revaluation gains recognised since 1 April 2007, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. 1.19.3 Impairment Assets are assessed at each year-end as to whether there is any indication that an asset may be impaired. Where indications exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall. Where impairment losses are identified, they are accounted for by: Page 162
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 71 • Where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains) • Where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service lines in the Comprehensive Income and Expenditure Statement. Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service lines in the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. 1.19.4 Disposals and Non-current Assets Held for Sale When it becomes probable that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset is re-valued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previous losses recognised in the Surplus or Deficit on the Provision of Services. Depreciation is not charged on Assets Held for Sale. Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale. When an asset is disposed of or decommissioned, the carrying amount of the asset in the Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital Adjustment Account. Disposal receipts are categorised as capital receipts. All capital receipts are credited to the Capital Receipts Reserve, and can then only be used for new capital investment. Receipts are appropriated to the Reserve from the General Fund Balance in the Movement in Reserves Statement. The written-off value of disposals is not a charge against Council Tax, as the cost of non-current assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement. 1.19.5 Depreciation Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. An exception is made for assets without a determinable finite useful life (i.e. land and certain community assets) and assets that are not yet available for use (i.e. assets under construction). Where an asset has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately. Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account. 1.20 Private Finance Initiative (PFI) and Similar Contracts PFI contracts are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passes to the PFI contractor. As the Council is deemed to control the services that are provided under its PFI schemes and as ownership of Page 163
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 72 the property, plant and equipment will pass to the Council at the end of the contracts for no additional charge, the Council carries the assets used under the contracts on the Balance Sheet. The original recognition of these assets at fair value was balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment. Non-current assets recognised on the Balance Sheet are revalued and depreciated in the same way as Property, Plant and Equipment owned by the Council. The amounts payable to the PFI operators each year are analysed into five elements: • Fair value of the services received during the year - debited to the relevant service in the Comprehensive Income and Expenditure Statement. • Finance Cost – this is calculated by applying the implicit interest rate in the lease to the opening lease liability for the period, this is debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. • Contingent rent – increases in the amount to be paid for the property arising during the contract, debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. • Payment towards liability – applied to write down the Balance Sheet liability towards the PFI operator (the profile of write-downs is calculated using the same principles as for a finance lease). • Lifecycle replacement costs – proportion of the amounts payable is posted to the Balance Sheet as a prepayment and then recognised as additions to Property, Plant and Equipment when the relevant works are eventually carried out. 1.21 Provisions and Contingent Liabilities 1.21.1 Provisions Provisions are made where an event has taken place that gives the Council a legal or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential, and a reliable estimate can be made of the amount of the obligation. For instance, the Council may be involved in a court case that could eventually result in a settlement or the payment of compensation. Provisions are charged as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year that the Council becomes aware of the obligation, and measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision set up in the Balance Sheet. Estimated settlements are reviewed at the end of each financial year and where it becomes more likely than not that a transfer of economic benefits will not now be required (or a lower settlement than anticipated is made), the provision is reversed and credited back to the relevant service. Where some or all of the payment required to settle a provision is expected to be recovered from another party (e.g. from an insurance claim), this is only recognised as income for the relevant service if it is virtually certain that reimbursement will be received if the obligation is settled. 1.21.2 Contingent Liabilities A contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the accounts. Page 164
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 73 1.22 Reserves Reserves are created by appropriating amounts out of the General Fund Balance in the Movement in Reserves Statement. When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service in that year to score against the Surplus/Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against Council Tax for the expenditure. Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments and retirement benefits and do not represent usable resources for the Council – these reserves are explained in the relevant policies above and Note 32 to the accounts. 1.23 VAT Income and expenditure excludes any amounts related to VAT, as all VAT collected is payable to HM Revenue and Customs and VAT paid is recoverable. 2. ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED The standards introduced by the 2024-25 Code where disclosures are required in the 2023-24 financial statements in accordance with the requirements of paragraph 3.3.4.3 of the code are: • IFRS 16 Leases which is applicable from 1st April 2024. This also includes amendments in respect of Lease Liability in a Sale and Leaseback transaction. • IAS 1 – Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants. • IAS 12 – International Tax Reform • IAS 7 and IFRS 7 – Supplier Finance Arrangements It is anticipated that only IFRS16 will have a material impact in future years on the Financial Statements as the standard will require the Council to recognise the majority of its current operational leases on the balance sheet, eliminating the distinction between operating and finance leases. This will lead to the capitalisation of right-of-use assets and corresponding lease liabilities increasing the value of assets and liabilities on the balance sheet. On the Comprehensive Income and Expenditure Statement, operational lease expenses will be replaced by depreciation charges for the right-of-use assets and interest on the lease liability. This change will enhance transparency and comparability of financial statements, providing a clearer picture of the Council’s obligations and resources. To implement the IFRS16, the Council will review and evaluate the operational leases it has in place, update its accounting policies to accommodate the requirements of IFRS16 and will redesign its internal processes and procedures for starting and ending leases. There will be no material impact in future years from the adoption of these amendments in relation to IAS 1, IAS 12 and IAS 7. CIPFA/LASAAC has agreed to defer the implementation of IFRS 16 Leases until 1 April 2024. 3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES In applying the accounting policies set out in Note 1, the Council has had to make certain judgements about complex transactions or those involving uncertainty about future events. Where a critical judgement has been made this is referred to in the relevant note to the core financial statements; however a summary of those with the most significant effect is detailed below: • There is a high degree of uncertainty about future levels of funding for local government. However, the Council has determined that this uncertainty is not yet sufficient to provide an indication that the assets of the Council might be impaired as a result of a need to close facilities and reduce levels of service provision. Page 165
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 74 • The Council currently operates three Private Finance Initiative (PFI), or similar, contracts which are accounted for as Service Concession arrangements under IFRIC12 – Service Concession Arrangements. The Council has determined that in the case of the Schools NPDO contract and the new Schools DBFM contract, the Council has control over the services provided through use of the schools and that a qualifying asset has been created. The appropriate accounting treatment is to bring the assets “on Balance Sheet” along with a finance lease liability. • The Council also operates a Waste Management Public Private Partnership (PPP) contract. In this case the Council determined that a “qualifying asset” had not been created and that the Council did not have significant control over the services being provided. The appropriate accounting treatment was therefore determined to be “off Balance Sheet” and that payments to the contractor are charged to the appropriate service line within the Comprehensive Income and Expenditure Account. • The Council has considered its exposure to possible losses and made adequate provision where it is probable that an outflow of resources will be required and the amount of the obligation can be measured reliably. Where it has not been possible to measure the obligation, material contingent liabilities have been disclosed in Note 34. • Unused holiday entitlement earned at 31 March 2024 but not taken at that date has been quantified on the basis of a 5% sample of all non-term time Council employees. The calculation in respect of unused holidays for term time staff in schools is based on actual leave entitlement as at 31 March and no estimation is required for these staff. The liability shown in the 2023-24 financial statements in respect of the holiday pay accrual is £8.272m. 4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION UNCERTAINTY The financial statements contain estimated figures that are based on assumptions made by the Council about which there is a degree of uncertainty. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Council’s Balance Sheet at 31 March 2024 for which there is a significant risk of material adjustment in the forthcoming financial year are outlined in the table that follows: Page 166
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 75 Item Uncertainties Effect if Actual Results Differ from Assumptions Property, Plant and Equipment Assets are depreciated over useful lives that are dependent on assumptions about the level of repairs and maintenance that will be incurred in relation to individual assets. The current economic climate makes it uncertain that the Council will be able to sustain its current spending on repairs and maintenance, bringing into doubt the useful lives. If the useful life of assets is reduced, depreciation increases and the carrying amount of the assets falls. It is estimated that the annual depreciation charge for buildings would increase by £1.142m for every year that useful lives had to be reduced. Rolling Programme Valuation The Council employs professional valuers who are registered with the Royal Institution of Chartered Surveyors. These valuers carry out regular reviews of the assets reported in the Balance Sheet and any significant changes in value are processed as an asset revaluation or impairment. These valuations are based on their professional opinion using available market information at the time of assessment. Due to the high number of assets, a rolling programme of asset valuations has been established for many years, with the aim of revaluing one fifth of the portfolio each financial year which is made up of various asset types. This is in addition to those assets which are valued annually; Surplus Assets, Investment Properties, Held for Sale assets and those where capital spend has exceeded £0.1m in the current year. This carries inherent risk that assets not revalued in-year have been subject to material changes in value particularly if affected by external factors such as inflation. The highest risk in this respect relates to assets valued using the depreciated Replacement Cost (DRC) method, which for Argyll & Bute Council includes schools. To mitigate this risk, a desktop assessment was undertaken for 2023-24 to estimate the potential increase in value of our assets valued using depreciated replacement cost using BCIS indices. As the BCIS indices have not increased materially, the impact on these assets was not deemed to be material so no adjustment was made. Consideration will be given on an annual basis to those assets which may have material impairment. Page 167
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 76 Pensions Asset Estimation of the net asset to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. A firm of consulting actuaries is engaged to provide the Council with expert advice about the assumptions to be applied. The effects on the net pension’s liability of changes in individual assumptions can be measured. The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out as follows: Sensitivities at 31 March 2024 Approximate % Increase to Employer Liability Approximate monetary amount £’000 0.1% decrease in real discount rate 2% 10,827 1 Year increase in the member life expectancy 4% 26,766 0.1% increase in salary increase rate 0% 1,409 0.1% increase in pension increase rate 2% 9,594 Page 168
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 77 5.1 EXPENDITURE AND FUNDING ANALYSIS Net Expenditure Chargeable to the General Fund Adjustments between the Funding and Accounting Basis (Note 5.2) Net Expenditure in the Comprehensive Income and Expenditure Statement Net Expenditure Chargeable to the General Fund Adjustments between the Funding and Accounting Basis (Note 5.2) Net Expenditure in the Comprehensive Income and Expenditure Statement £'000 £'000 £'000 Service £'000 £'000 £'000 7,538 1,063 8,601 Chief Executive and Financial Services 1,161 25 1,186 Executive Director Douglas Hendry 366 70 436 Executive Director 421 6 427 10,616 18,533 29,149 Commercial Services 12,232 6,921 19,153 95,943 (3,537) 92,406 Education 104,697 (3,775) 100,922 9,860 1,711 11,571 Legal and Regulatory Support 12,259 1,020 13,279 Executive Director Kirsty Flanagan 369 49 418 Executive Director 237 5 242 - - - Financial Services 6,885 89 6,974 8,139 3,046 11,185 Customer Support 9,403 2,228 11,631 9,070 1,806 10,876 Development and Economic Growth 8,904 385 9,289 31,855 15,628 47,480 Roads and Infrastructure 33,981 12,709 46,690 73,976 5,510 79,486 Social Work 77,137 939 78,076 8,226 (632) 7,594 Other Non-Departmental Costs 11,109 (1,712) 9,397 255,958 43,247 299,202 Net Cost of Services 278,426 18,840 297,266 2022-23 2023-24 Page 169
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 78 (246,231) (46,924) (293,155) Other Income and Expenditure (307,811) 780 (307,031) 9,727 (3,677) 6,047 (Surplus) / Deficit (29,385) 19,620 (9,765) (96,081) Opening General fund Balance (86,356) 9,727 Plus (Surplus) or Deficit on General Fund Balance (29,385) (86,356) Closing General Fund Balance (115,741) The Expenditure and Funding Analysis shows how annual expenditure is used and funded from resources (government grants, council tax and business rates) by local authorities in comparison with those resources consumed or earned by authorities in accordance with generally accepted accounting practices. It also shows how this expenditure is allocated for decision making purposes between the council’s services. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement. Page 170
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 79 5.2 EXPENDITURE AND FUNDING ANALYSIS RECONCILIATION This note provides a reconciliation of the main adjustments to Net Expenditure Chargeable to the General Fund to arrive at the amounts in the Comprehensive Income and Expenditure Statement. Adjustments for Capital Purposes Note (i) Net change for Pension Adjustments Note (ii) Capital element of Schools NPDO payment Note (iii) Other Adjustments Note (iv) Total Adjustments £'000 £'000 £'000 £'000 £'000 Chief Executive and Financial Services - 16 - 9 25 Executive Director (Douglas Hendry) Executive Director (Douglas Hendry) - 7 - (1) 6 Commercial Services 1,960 163 - 4,798 6,921 Education 3,888 443 - (8,106) (3,775) Legal and Regulatory Support 3,387 74 (5,232) 2,791 1,020 Executive Director (Kirsty Flanagan) Executive Director (Kirsty Flanagan) - 5 - - 5 Financial Services 89 89 Head of Customer Support 1,752 129 - 347 2,228 Head of Development and Economic Growth 344 149 - (108) 385 Roads and Infrastructure 10,977 341 - 1,391 12,709 Social Work 806 545 - (412) 939 Other Non-Departmental Costs - (1,687) - (25) (1,712) 23,114 274 (5,232) 684 18,840 Other Income and Expenditure 2,956 (6,596) 4,831 (411) 780 26,070 (6,322) (401) 273 19,620 Net Cost of Services Difference between General Fund Surplus and Comprehensive Income and Expenditure Statement (Surplus)/Deficit Adjustments from General Fund to arrive at the Comprehensive Income and Expenditure Statement amounts Adjustments between Funding and Accounting Basis 2023-24 Page 171
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 80 (i) Adjustments for Capital Purposes This column adds in depreciation and impairment and revaluation gains and losses in the services line, and for: • Other operating expenditure – adjusts for capital disposals with a transfer of income on disposal of assets and the amounts written off for those assets. • Taxation and non-specific grant income and expenditure – capital grants are adjusted for income not chargeable under generally accepted accounting practices. Revenue grants are adjusted from those receivable in the year to those receivable without conditions or for which conditions were satisfied throughout the year. The Taxation and Non Specific Grant Income and Expenditure line is credited with capital grants receivable in the year without conditions or for which conditions were satisfied in the year. • Financing and investment income and expenditure – the statutory charges for capital financing (loans fund advances) and other revenue contributions are deducted from other income and expenditure as these are not chargeable under generally accepted accounting practices. (ii) Net change for the Pensions Adjustments Net change for the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related expenditure and income: • For services this represents the removal of the employer pension contributions made by the Council as allowed by statute and the replacement with current service costs and past service costs. • For Financing and investment income and expenditure – the net interest on the defined benefit liability is charged to the Comprehensive Income and Expenditure Statement. (iii) Capital element of schools NPDO payment • This is the capital cost of the annual payment to the schools NPDO operator and represents repayment of the Balance Sheet liability rather than a charge to Comprehensive Income and Expenditure Statement. (iv) Other Adjustments • For Financing and investment income and expenditure the other differences column recognises adjustments to the General Fund for the timing differences for premiums and discounts. • For services an adjustment is made for the accrual of holiday pay and other similar entitlements, this is required under generally accepted accounting principles but the impact on the General Fund is mitigated by statute which allows the impact to be reversed out through the Movement in Reserves Statement. Page 172
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 81 6.1 GENERAL FUND RESERVES The Council has ring-fenced £107.443m of the balance on the General Fund. Ring-fenced Balances Balance 1 April 2023 Funds Used Contributions to/from Funds New Earmarking agreed 2023-24 New Earmarking at end of 2023-24 Balance 31 March 2024 £'000 £'000 £'000 £'000 £'000 £'000 Strategic Housing Fund (Revenue from Additional Council Tax on Second Homes) 7,247 (1,057) 2,575 8,765 Investment in Affordable Housing 3,163 (139) 3,024 Capital Projects 16,059 (12,379) 2,327 2,509 29,442 37,958 Lochgilphead and Tarbert Regeneration 1,460 (410) 1,050 Support for Rural Growth Deal 756 (215) 541 Asset Management 2,098 (28) (2,070) - Piers and Harbours Investment Fund 2,789 1,336 4,125 Scottish Government Initiatives 2,834 (1,274) 1,219 2,779 CHORD 378 (89) 120 409 Devolved School Management Scheme (DSM) 1,394 (1,300) 645 739 Energy Efficiency Fund 218 20 238 Unspent Budget Required for Existing Legal Commitments 476 (476) - Unspent Third Party Contributions 13,179 (5,937) 5,016 3,528 15,786 Contributions Carried Forward 265 (44) 233 454 Other Previous Council Decisions 3,808 (513) 845 4,140 Redundancy Reserve 1,578 (115) 1,500 2,963 Connect for Success Fund 1,426 (745) 681 One Council Property 566 (566) - Fleet - Timing Delay 658 (174) 484 Hermitage Park 19 37 56 Electric Vehicle Chargers 17 (17) - Priorities Investment Fund - 4,742 4,742 COVID-19 5,512 - (5,512) - Unspent Budget Carried Forward 13,566 (2,989) (931) 173 8,690 18,509 Total Ring-fenced 79,466 (27,286) (2,351) 2,682 54,932 107,443 Contingency 5,691 - 348 - - 6,039 Unallocated 1,199 - 1,530 (470) - 2,259 Total General Fund Balance 86,356 (27,286) (473) 2,212 54,932 115,741 Page 173
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 82 The contingency balance of £6.039m is 2% of the Council’s budgeted net expenditure for 2023-24. 6.2 Service Concessions During 2022/23 the Scottish Government announced revised regulations in relation to the treatment of service concessions: Local government finance circular 10/2022 - finance leases and service concession arrangements. The council currently operates two service concessions in relation to its Public Private Partnerships (PPP) and Design, Build, Finance, Maintain (DBFM) arrangements both within Education. The revised regulations allow for the debt costs associated with these schemes to be written off over the expected lives of the respective assets rather than over the contract period of each arrangement. This ensures repayments are aligned to the period over which benefit flows from the asset and provides scope to realign debt costs to reflect the asset lives. The cumulative value of the liability charged to the General Fund prior to applying the permitted flexibility was £43.376m up to and including the financial year 2023-24. After applying the permitted flexibility, there is a one-off historical debt cost saving of £36.038m and in year savings of £4.831m resulting in an overall benefit in 2023-24 of £40.869m. This saving has been earmarked for specific council priorities and has been included in Note 6.1 with balances allocated as detailed below: Reserve Description Amount Allocated £'000 Capital Projects 24,666 Priorties Investment Fund 4,742 Unspent Budget Carryied Forward 6,630 Total Allocation 36,038 Page 174
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Notes to the Financial Statements www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 83 7 SUPPLEMENTARY NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE 7.1 Expenditure and Income Analysed by Nature Council’s expenditure and income is analysed as follows: 2022-23 Expenditure/Income 2023-24 £'000 £'000 Expenditure 196,213 Employee benefits expenses 195,129 178,016 Other services expenses 189,024 74,391 Contribution to Argyll and Bute Integration Joint Board 77,604 27,828 Depreciation, amortisation, impairment 23,113 10,655 Interest payments 7,441 1,253 Precepts and levies 1,254 390 Other operating expenditure 416 (437) Net Loss/(Gain) on the disposal of assets (262) 488,309 Total Expenditure 493,719 Income (102,855) Fees, charges and other service income (110,000) (74,391) Income to fund social care services (Argyll and Bute Integration Joint Board) (77,604) (2,966) Interest and investment income (4,779) (87,726) Income from council tax and non-domestic rates (100,358) (214,324) Government grants and contributions (210,743) (482,262) Total Income (503,484) 6,047 (Surplus)Deficit on the Provision of Services (9,765) Page 175
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Notes to the Financial Statements www.argyll-bute.gov.uk _________________________________________________ Page 84 7.2 Revenue from Contracts with Service Recipients 2022-23 Actual 2023-24 Actual £'000 £'000 32,900 34,201 32,900 34,201 Revenue from contracts with service recipients Total Included in Comprehensive Income and Expenditure Statement 8 OTHER OPERATING INCOME AND EXPENDITURE The expenditure of £1.670m shown in the Other Operating Income and Expenditure line on the Statement of Comprehensive Income and Expenditure can be analysed as follows: 2022-23 2023-24 Actual Other Operating Income and Expenditure Actual £'000 £'000 1,253 Dunbartonshire and Argyll & Bute Valuation Joint Board Requisition 1,254 (20) Equal Pay Settlements and Legal Costs - 410 Other Operating Income and Expenditure not attributable to Services 416 1,643 Total 1,670 9 AGENCY SERVICES The Council bills and collects non-domestic rates on behalf of the Scottish Government from ratepayers situated within Argyll and Bute. The Council also bills and collects, along with its own council tax, domestic water and sewerage charges on behalf of Scottish Water. In addition, the Council received funding from the UK Government to help people who met the Government’s eligibility criteria to pay their home energy bills. The Council had no discretion over the terms of the funding and could not use it for service delivery. This means the Council acted as agent only and the grant funding received and paid out are not included in the Council's reserves, CIES or Balance Sheet. In some cases, an administration grant was awarded to the Council to facilitate these payments. This is accounted for as operational income and expenditure and not disclosed here. 2022-23 2023-24 Actual Actual £'000 £'000 33,179 Scottish Government - Contributions (to)/from the non-domestic rates pool 37,645 15,106 Domestic water and sewarage charges collected 15,830 (15,106) Domestic water and sewarage charges paid over to Scottish Water (15,830) 265 Service income from Scottish Water for collection of domestic water and sewerage 367 7 Service income BID levy - Dunoon 8 7 Service income BID levy - Oban 7 7 Service income BID levy - Bute 7 (714) Scottish Child Payment - amount paid out - 714 Scottish Child Payment - amount received from the Scottish Government - (73) BIES Energy Grant - amount paid out (373) 73 BIES Energy Grant - amount received from the Scottish Government 373 (167) COVID - Financial Hardship and Self-Isolation grants paid out - 167 COVID - Financial Hardship and Self-Isolation funding received from Scottish Government - 33,465 Total 38,034 Agency Income Page 176
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Notes to the Financial Statements www.argyll-bute.gov.uk _________________________________________________ Page 85 10 COMMUNITY CARE AND HEALTH (SCOTLAND) ACT 2002 From 1 April 2016 health and social care services were fully integrated as part of the new Health and Social Care Partnership. During 2023-24 the Partnership included provision of services to older people, supporting people with a learning disability and provision of support to adults who have a mental health difficulty. Budgets are currently aligned which means that each Partner organisation holds their own element of the budget and records the income and expenditure that relates to the part of the service for which they are responsible. During 2023-24 income received by the Council from this source amounted to £7.811m and the related expenditure was £10.953m. This can be analysed as follows: Income Expenditure Income Expenditure £'000 £'000 Purpose of Services £'000 £'000 3,300 5,402 Care of the Elderly 3,464 5,658 2,914 3,615 Provision of Services for People with Learning Disabilities 2,945 3,787 1,380 1,527 Provision of Services for People with Mental Health Needs 1,402 1,508 7,594 10,544 7,811 10,953 833 833 8,427 11,377 TOTAL 7,811 10,953 Additional Covid Response Funding received via NHS for 2022-23 2022-23 2023-24 11 FEES PAYABLE TO EXTERNAL AUDITORS In 2023-24 the following fees relating to external audit and inspection were incurred alongside comparative figures for 2022-23: 2022-23 2023-24 £'000 £'000 310 Fees payable to External Auditors with regard to external audit services carried 325 out by the appointed Auditor 310 Total Remuneration 325 Auditor's Remuneration The figure above excludes fees for the audit of the Council’s charitable trusts. Forvis Mazars LLP did not undertake any non-audit work in 2022-23 or 2023-24. Page 177
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Notes to the Financial Statements www.argyll-bute.gov.uk _________________________________________________ Page 86 12 WASTE MANAGEMENT PUBLIC PRIVATE PARTNERSHIP The Council has entered into a Public Private Partnership for the provision of its waste disposal service. This agreement requires the provider to upgrade or replace three waste disposal sites, two transfer stations and five civic amenity sites. In addition, the provider will also provide composting facilities to meet waste diversion targets. When the agreement ends in September 2026, during financial year 2026- 27, the provider will hand back to the Council the waste disposal facilities with a remaining life of 5 years. The Council has paid a service charge of £7.268m which represents the value of the service provided from 1 April 2023 to 31 March 2024 (£6.514m for 2022-23). Under the agreement the Council is committed to paying the following sums: Future Repayment Periods £'000 2024-2025 6,956 2025-2026 7,108 2026-2027 2,336 Total 16,400 The average service charge equates to £5.180m per annum over the life of the contract. 13 GRANT INCOME The Council credited the following grants to the Comprehensive Income and Expenditure Statement: 2022-23 Grant Income 2023-24 £'000 £'000 Credited to Taxation and Non Specific Grant Income 191,265 Revenue Support Grant 187,193 33,179 Non Domestic Rates 37,645 344 Specific Capital Grant 96 19,187 General Capital Grant 22,347 44 Heritage Lottery Fund - 728 Scottish Timber Transport Strategy 791 1,353 Scottish Government - 90 Strathclyde Partnership for Transport (SPT) 90 55 Revenue Contribution to Capital Projects 100 748 Other Grants 126 246,993 Total 248,388 Credited to Services 12,869 Scottish Government Specific Grants 12,555 809 General Capital Grant - Private Sector Housing Improvement Grants 855 16,581 Housing Benefit Subsidy 16,443 14,787 Other Revenue Government Grants 21,243 45,046 Total 51,096 Page 178
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Notes to the Financial Statements www.argyll-bute.gov.uk _________________________________________________ Page 87 14 RELATED PARTIES The Council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the Council. Disclosure of these transactions allows readers to assess the extent to which the Council might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the Council. The aim of the Financial Reporting Standard dealing with Related Parties is to highlight instances where influence and control has been exercised over an external organisation by the Council, and where an elected member, their close family or someone in their household, has the ability to exercise the influence or control. Elected members and Senior Officers have completed a signed declaration on Related Party Interests and these have been used to compile this disclosure. 14.1 Scottish Government The Scottish Government has effective control over the general operations of the Council – it is responsible for providing the statutory framework, within which the Council operates, provides the majority of its funding in the form of grants and prescribes the terms of many of the transactions that the Council has with other parties (e.g. council tax bills, housing benefits). Grants received from government departments are set out in Note 13 – Grant Income. 14.2 Members Members of the council have direct control over the Council’s financial and operating policies. The total of members’ allowances paid in 2023-24 is shown in the Remuneration Report. During the year there were two organisations in which members had a significant interest and where the total of transactions exceeded £10,000. 2022-23 Expenditure 2023-24 Expenditure £'000 Transactions in which Members have a significant interest £'000 21 Argyll and Bute Rape Crisis 0 81 S & C Crawford Building Contractors Ltd 337 69 Bookfan Ltd Trading as South Peak Services 81 171 Total 418 Page 179
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Notes to the Financial Statements www.argyll-bute.gov.uk _________________________________________________ Page 88 14.3 Other Related Bodies This category relates to transactions with entities which are controlled or significantly influenced by the Council. During the year transactions with other related bodies were as follows: 2022-23 Expenditure 2023-24 Expenditure £'000 Related Bodies £'000 4,197 Transactions with related bodies during the year totalled 4,418 Of these, transactions with the following exceeded £10,000: 210 ACHA 48 579 Dunbritton Housing Association Limited 590 34 LINK Group Ltd 30 96 West Highland Housing Association Ltd 312 14 Fyne Homes 26 548 Oban and Lorn Community Enterprise - Atlantis Leisure 606 100 Islay and Jura Community Enterprise 141 70 Mid Argyll Community Enterprise 110 73 Scotland Excel 65 97 Argyll and Bute Citizens Advice Bureaux 55 227 Bute Advice 182 - Kintyre Recycling 10 92 SEEMIS 104 178 Argyll and the Isles Coast & Countryside Trust 200 411 Carr Gomm 429 127 Argyll & Bute Women's Aid 132 241 Argyll & Bute Care & Repair 252 161 HELP 168 97 COSLA 71 411 Strathclyde Passenger Transport 416 204 Strathclyde Concessionary Travel Scheme 209 60 Glengorm Partnership - - Group Recycling in Argyll & Bute (GRAB) 73 91 North West Mull Community Woodland Company - 41 Mull & Iona Community Trust (MICT) 148 4,162 Total 4,377 Given the relationships the Council has with other organisations and partners it is possible that some related party transactions may exist. However, the purpose of the requirement to complete the disclosure is to provide additional information to the users of the Annual Accounts and, by declaring possible instances, there is no suggestion that any inappropriate transactions have taken place. Please refer to Group Accounts on pages 128 to 139. Page 180
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Notes to the Financial Statements www.argyll-bute.gov.uk ___________________________________________________________________________________ Page 89 15 PROPERTY, PLANT AND EQUIPMENT 15.1 Movement in Property, Plant and Equipment Other Land & Buildings Vehicles Plant & Equipment Community Assets Surplus Assets Assets Under Construction Total 2023-24 Infrastructure Assets £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost or Valuation At 1 April 2023 453,644 46,440 8,901 3,283 21,440 533,708 Additions 8,483 3,177 218 (18) 15,117 26,977 12,309 Additions financed under a new leasing arrangement - 5,217 653 5,870 813 69 882 Derecognition - Disposals (1,552) (1,552) Assets reclassified (to)/from Held for Sale (539) 630 91 Other movements in cost or valuation (833) (833) 833 At 31 March 2024 467,618 48,065 9,119 4,617 35,724 565,143 Depreciation and Impairments At 1 April 2023 (2,626) (35,568) (9) 3 - (38,200) (13,802) (3,037) (16,839) (8,846) 4,125 16 4,141 2,037 2,037 - - 1,552 1,552 Derecognition - Other 17 (16) 1 - At 31 March 2024 (10,249) (37,053) (9) 3 - (47,308) Balance Sheet amount at 31 March 2024 457,369 11,012 9,110 4,620 35,724 517,835 239,372 Balance Sheet amount at 31 March 2023 451,018 10,872 8,892 3,286 21,440 495,508 235,076 Movements in 2023-24 Revaluation increases/(decreases) recognised in the Revaluation Reserve Revaluation increases/(decreases) recognised in the Surplus/Deficit on the Provision of Services Depreciation Charge for 2023-24 Depreciation written out to the Revaluation Reserve Depreciation written out to the Surplus/Deficit on the Provision of Services Impairment losses/(reversals) recognised in the Revaluation Reserve Impairment losses/(reversals) recognised in the Surplus/Deficit on the Provision of Services Derecognition - Disposals Other movements in depreciation and impairment Page 181
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Notes to the Financial Statements www.argyll-bute.gov.uk ___________________________________________________________________________________ Page 90 Other Land & Buildings Vehicles Plant & Equipment Community Assets Surplus Assets Assets Under Construction Total 2022-23 Infrastructure Assets £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost or Valuation At 1 April 2022 428,437 44,428 7,463 1,405 35,344 517,077 Additions 8,671 2,024 1,438 283 10,212 22,628 13,110 Additions financed under a new leasing agreement - - - - - - 2,499 1,237 3,736 (8,252) (18) - (8,270) Derecognition - Disposals (1,451) (12) - (1,463) Derecognition - Other - Assets reclassified (to)/from Held for Sale (376) 376 - Other movements in cost or valuation 24,116 - - (24,116) - At 31 March 2023 453,644 46,440 8,901 3,283 21,440 533,708 Depreciation and Impairments At 1 April 2022 (13,585) (32,630) (9) 3 - (46,221) (13,068) (2,944) (16,012) (8,512) 17,284 17,284 5,300 5,300 1,443 6 1,449 - - At 31 March 2023 (2,626) (35,568) (9) 3 - (38,200) Balance Sheet amount at 31 March 2023 451,018 10,872 8,892 3,286 21,440 495,508 235,076 Balance Sheet amount at 31 March 2022 414,852 11,798 7,454 1,408 35,344 470,856 230,478 Comparative Movements in 2022-23 Revaluation increases/(decreases) recognised in the Revaluation Reserve Revaluation increases/(decreases) recognised in the Surplus/Deficit on the Provision of Services Depreciation Charge for 2022-23 Depreciation written out to the Revaluation Reserve Other movements in depreciation and impairment Impairment losses/(reversals) recognised in the Surplus/Deficit on the Provision of Services Derecognition - Disposals Page 182
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Notes to the Financial Statements www.argyll-bute.gov.uk ___________________________________________________________________________________ Page 91 As permitted by Finance Circular 09-2022 the council has adopted both Statutory Override 1 & 2 relating to infrastructure assets which allow for the following; Statutory Override 1: For accounting periods commencing from 1 April 2021 until 31 March 2024 a local authority is not required to report the gross cost and accumulated depreciation for infrastructure assets. Statutory Override 2: For accounting periods commencing 1 April 2010 until 31 March 2024 the carrying amount to be derecognised in respect of a replaced part of an infrastructure asset is to be taken and accounted for as a nil amount. No subsequent adjustment shall be made to the carrying amount of the asset with respect to that part. Page 183
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 92 15.2 Valuation of Property, Plant and Equipment IAS 16 – Property, Plant and Equipment has been adapted for the public sector by IPSAS 17 – Property, Plant and Equipment. Under IPSAS 17 each category of Property, Plant and Equipment is valued as follows: • Infrastructure, community assets and assets under construction are valued at historical cost. • Vehicles, plant and equipment are valued at depreciated historical cost as a proxy for current value. • All other classes of assets are valued at current value. Where there is no market based evidence of current value because of the specialist nature of the asset and the asset is rarely sold then an estimate of current value is made using a depreciated replacement cost approach. The Council carries out a rolling programme that ensures that all Property, Plant and Equipment required to be measured is re-valued at least every five years. Assets identified as Corporate Surplus Assets are valued in accordance with IFRS 13 - Fair Value Measurement. The Balance Sheet value of Corporate Surplus assets at 31 March 2024 was £4.620m. Corporate Surplus assets are valued at their fair value on 31 March each year. Level 2 or 3 inputs were used for most Corporate Surplus asset valuations. Revaluations of Council owned land and property were carried out at 31 March 2024 in accordance with the Council’s rolling programme of revaluations. The revaluations have been carried out in house by the Council’s Estates Service. Valuations of land and buildings were carried out in accordance with the methodologies and basis for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. For assets not valued in-year a desktop assessment was undertaken for 2023-24 to estimate the potential increase in value of those assets valued using depreciated replacement cost using BCIS indices. As the BCIS indices have not increased materially, the impact on these assets was not deemed to be material so no adjustment was made. The following table shows the progress of the Council’s rolling programme for the revaluation of Other Land and Buildings: Estates Valuation Desktop Valuation Current Valuation £'000 £'000 £'000 31 March 2024 135,773 135,773 31 March 2023 179,234 5,007 184,241 31 March 2022 38,954 3,335 42,289 31 March 2021 50,140 3,164 53,304 31 March 2020 39,207 2,555 41,762 Total Cost or Valuation 443,308 14,061 457,369 Other Land & BuildingsValued at Current Value as at: Page 184
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 93 15.3 Depreciation The following useful lives and depreciation rates have been used in the calculation of depreciation: • Buildings – straight-line allocation over the useful life of the property as estimated by the valuer (20 to 60 years) • Infrastructure – straight-line allocation over 40 – 60 years • Vessels – straight line allocation over 25 years • Vehicles, Plant and Equipment - straight-line allocation over the useful life of the asset as determined by a suitably qualified officer (5 to 20 years) 15.4 Summary of Capital Expenditure and Financing Capital expenditure involves the creation of assets, the benefit of which will be available to future rates and Council taxpayers. It is financed from borrowing, capital receipts and capital grants. The cost of the asset is effectively borne over a period of years. In 2023-24 total spending on capital projects was £40.094m. 2022-23 2023-24 £'000 £'000 307,100 Opening Capital Financing Requirement 291,782 Capital Investment: 8,543 Property Plant and Equipment: Other Land and Buildings 8,483 2,024 Vehicles, Plant, Furniture and Equipment 3,177 13,110 Infrastructure Assets 12,309 1,438 Community Assets 218 283 Surplus Assets (18) 10,212 Assets Under Construction 15,117 128 Property Plant and Equipment acquired under Finance Leases: Other Land and Buildings - DBFM Schools - 246 Heritage Assets 224 174 Intangible Assets 202 12 Investment Assets 382 Assets Held for Sale 36,170 Total Capital Investment 40,094 Sources of Finance: - Capital Receipts - (22,549) Government Grants (23,550) (2,938) Capital Financed from Current Revenue (1,616) (4,276) Net Borrowing (6,111) (16,041) Earmarked Reserves (1,532) (5,116) Assets Aquired under Finance Leases/Schools NPDO (5,280) (568) Capital Receipts transferred to/(from) Capital Fund (2,207) - Service Concessions 40,869 - Other (55) (51,488) Total Funding 518 291,782 Closing Capital Financing Requirement 332,394 Page 185
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 94 15.5 Commitments under Capital Contracts At 31 March 2024, the Council had commitments on capital contracts of £6.236m. This expenditure will be funded from a combination of Government Grants, borrowing and income from selling assets and contributions from Revenue Accounts. Similar commitments at 31 March 2023 were £13.745m. The major commitments are: Commitments Under Capital Contracts 2023-24 £'000 Tigh-A-Rudha Care Home - Internal Upgrade 1,859 Kilmory Business Park 979 Lochgilphead Community Education Centre 513 The Moat Centre - Electrical Upgrade 473 St Andrews Primary School - Window Upgrade 358 Port Charlotte Primary School - Electrical Works 306 Riverside Leisure Centre - Health Suite Upgrade 280 Helensburgh and Lomond Civic Centre - Occupation Certificate Work 267 Dalmally Primary School - Internal Upgrade 193 North Bute Primary School - Staff Toilet Alterations 150 Other projects each less than £0.150m in value 858 Total Capital Commitments 6,236 16 HERITAGE ASSETS The main heritage assets held by the Council are two art collections, an archaeology collection and Inveraray Jail and Courthouse. The Council holds other heritage assets which are not valued and shown on the Balance Sheet. Further details on the council’s heritage assets policy can be found in note 1.11. Reconciliation of the carrying value of heritage assets held by the Council: Art Collections Heritage Property Total £'000 £'000 £'000 Cost or Valuation Net Book Value at 1 April 2023 1,600 745 2,345 Additions - 224 224 Disposals - - - Revaluations - - - Impairment Losses/(Reversals) recognised in the Revaluation Reserve - - - - - - At 31 March 2024 1,600 969 2,569 Movements in 2023-24 Transfer from Assets Under Construction Page 186
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 95 17 INTANGIBLE ASSETS Intangible assets comprise software licences and carbon reduction commitment allowances purchased in advance. Purchased software licences are shown at cost and this cost is charged to the relevant service lines within the Comprehensive Income and Expenditure Statement over the economic life of the licences, assessed as five years. The movement in intangible assets during the year was: £'000 £'000 Cost or Valuation At 1 April 2023 2,449 2,449 Additions 202 202 Disposals - - Revaluations - - Reclassifications - - At 31 March 2024 2,651 2,651 Amortisation and Impairments At 1 April 2023 (1,716) (1,716) Charge for 2023-24 (47) (47) Disposals - - At 31 March 2024 (1,763) (1,763) Balance Sheet amount at 31 March 2024 888 888 Balance Sheet amount at 31 March 2023 733 733 Movements in 2023-24 Purchased Software Licences Total Intangible Assets Total Intangible Assets Comparative Movements in 2022-23 £'000 £'000 Cost or Valuation At 1 April 2022 2,275 2,275 Additions 174 174 Disposals - - Revaluations - - Reclassifications - At 31 March 2023 2,449 2,449 Amortisation and Impairments At 1 April 2022 (1,671) (1,671) Charge for 2022-23 (45) (45) Disposals - - At 31 March 2023 (1,716) (1,716) Balance Sheet amount at 31 March 2023 733 733 Balance Sheet amount at 31 March 2022 604 604 Purchased Software Licences Page 187
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 96 18 INVESTMENT PROPERTY Investment property has been accounted for in accordance with IAS 4 - Investment Property, except where interpretations or adaptations to fit the public sector are detailed in the Code. The definition of an investment property in the context of the public sector is one that is used solely to earn rentals or for capital appreciation or both. The value of investment property is initially measured at cost and thereafter measured at fair value. The fair value of investment property reflects market conditions at 31 March 2024. Revaluations of investment properties were carried out at 31 March 2024 in house by the Estates Service. 18.1 Movement in Investment Property The movement in investment property during 2023-24 was: Investment Properties £'000 Cost or Valuation At 1 April 2023 2,553 Acquisitions 382 Disposals - Net Gains/Losses from fair value adjustments (42) Transfers (379) At 31 March 2024 2,514 Movements in 2023-24 18.2 Investment Property Income and Expenditure The following items of income and expenditure have been accounted for in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement: 2022-23 2023-24 £'000 £'000 141 Rental income from investment property 144 (4) Direct operating expenses arising from investment property - 137 144 19 SCHOOLS BUILT UNDER PUBLIC PRIVATE PARTNERSHIP CONTRACTS (PPP) Argyll and Bute Council have two schemes: Schools Non-Profit Distributing Organisation (NPDO) During 2007-08 two secondary schools, two joint campuses and one primary campus, developed as part of the Non-Profit Distributing Organisation (NPDO) variant of a Public Private Partnership (PPP), became operational. When the agreement ends in 2035 the provider will hand the five school complexes back to the Council. Schools Hub Design, Build, Finance and Maintain Contract (DBFM) Campbeltown and Oban High Schools have been built under this type of arrangement which reached Financial Close in March 2016. Page 188
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 97 Campbeltown Grammar School Construction Phase 1 was completed on 19 February 2018 and provided a new secondary school for pupils aged between 12 and 18. The new school has capacity for 500 pupils and replaces the existing Campbeltown Grammar School on the current school site at Hutcheon Road, Campbeltown. Phase 2 which included the demolition of the existing school buildings, provision of a car park, landscaping and 3G artificial turf pitch was completed during 2018-19. Oban High School Construction Phase 1 was completed on 5 April 2018 and provided a new secondary school for pupils between 12 and 18. The new school has capacity for 1300 pupils and replaces the existing Oban High School, on the current school site at Soroba Road, Oban. Phase 2 included the demolition of the existing school buildings, provision of a car park, landscaping and a pedestrian footway with lighting from the new school facilities to the grass pitches owned by the Council at Glencruitten, Oban was completed during 2018-19. 19.1 Assets Held under Schools NPDO and DBFM Contracts Five schools were constructed under the Schools NPDO Contract; Hermitage Academy, Dunoon Grammar, Lochgilphead Joint Campus, Rothesay Joint Campus and Oban Primary Campus. The construction costs of the buildings, adjusted for revaluations on 31 March 2024 and depreciation to date are included as part of Operational Land and Buildings. As noted above, two schools were completed under the Schools DBFM Contract. Oban High School and Campbeltown Grammar have been included within Operational Land & Buildings. Schools DBFM - Other Land & Buildings Schools NPDO - Other Land & Buildings Total Schools Built under PFI Contracts £'000 £'000 £'000 Cost or Valuation At 1 April 2023 71,539 134,178 205,717 Additions at Cost - - - Transfers - - - Revaluations 5,066 - 5,066 At 31 March 2024 76,605 134,178 210,783 Depreciation and Impairments At 1 April 2023 - - - Charge for 2023-24 (2,457) (3,355) (5,812) Transfers - - - Revaluations 2,457 - 2,457 At 31 March 2024 - (3,355) (3,355) Balance Sheet amount at 31 March 2024 76,605 130,823 207,428 Balance Sheet amount at 31 March 2023 71,539 134,178 205,717 Movements in 2023-24 Page 189
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 98 Schools DBFM - Other Land & Buildings Schools NPDO - Other Land & Buildings Total Schools Built under PFI Contracts £'000 £'000 £'000 Cost or Valuation At 1 April 2022 66,018 136,962 202,980 Additions at Cost 128 - 128 Transfers - - - Revaluations 5,393 (2,784) 2,609 At 31 March 2023 71,539 134,178 205,717 Depreciation and Impairments At 1 April 2022 - - - Charge for 2022-23 (2,186) (3,162) (5,348) Transfers - - - Revaluations 2,186 3,162 5,348 At 31 March 2023 - - - Balance Sheet amount at 31 March 2023 71,539 134,178 205,717 Balance Sheet amount at 31 March 2022 66,018 136,962 202,980 Comparative Movements in 2022-23 19.2 Schools NPDO and DBFM Finance Lease Liability The finance lease liability arising from the Schools NPDO and DBFM contracts are as follows: Schools DBFM Schools NPDO Total Schools Finance Lease Liability £'000 £'000 £'000 Balance at 1 April 2023 (51,876) (59,338) (111,214) Additions - - - Repayments 1,970 3,262 5,232 Prior year repayment adjustment - - - Schools Finance Lease Liability at 31 March 2024 (49,906) (56,076) (105,982) Split: Obligations payable within 1 year (1,990) (3,298) (5,288) Obligations payable after 1 year (47,916) (52,778) (100,694) Schools Finance Lease Liability at 31 March 2024 (49,906) (56,076) (105,982) Movements in 2023-24 Page 190
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 99 Schools DBFM Schools NPDO Total Schools Finance Lease Liability £'000 £'000 £'000 Balance at 1 April 2022 (53,876) (62,408) (116,284) Additions - - - Repayments 2,000 3,070 5,070 Prior year repayment adjustment - - Schools Finance Lease Liability at 31 March 2023 (51,876) (59,338) (111,214) Split: Obligations payable within 1 year (1,970) (3,262) (5,232) Obligations payable after 1 year (49,906) (56,076) (105,982) Schools Finance Lease Liability at 31 March 2023 (51,876) (59,338) (111,214) Comparative Movements in 2022-23 19.3 Payments due to Operator under Schools NPDO Contract The Council is committed to paying the following sums under the Schools NPDO contract: Future Repayment Periods Lifecycle Costs Payment of Interest Service Charges Total Payments £'000 £'000 £'000 £'000 2024 - 2025 631 5,796 7,032 16,757 2025 - 2029 2,593 20,035 29,716 69,220 2029 - 2034 4,072 13,592 42,567 91,891 2034 - 2035 318 717 4,301 9,577 Total 7,614 40,140 83,616 187,445 Repayment of Liability £'000 16,876 31,660 4,241 56,075 3,298 19.4 Payments due to Operator under Schools DBFM Contract The Council is committed to paying the following sums under the Schools DBFM contract: Future Repayment Periods Payment of Interest Service Charges Total Payments £'000 £'000 £'000 2024 - 2025 2,168 1,211 5,369 2025 - 2029 7,888 4,641 20,947 2029 - 2034 8,066 7,789 26,911 2034 - 2039 2,471 11,773 27,817 2039 - 2043 1,716 5,601 22,186 Total 22,309 31,015 103,230 49,906 Repayment of Liability £'000 8,418 11,056 1,990 13,573 14,869 Page 191
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 100 20 OPERATING LEASES 20.1 Operating Leases – Amounts Paid to Lessors The Council uses land, buildings, vehicles, plant and equipment financed under the terms of an operating lease. The amounts paid under these arrangements were as follows: 2022-23 2023-24 £'000 £'000 552 Land and Buildings 1,223 1,407 Vehicles 1,577 180 Plant and Equipment 181 2,139 Total 2,981 20.2 Assets Held Under Operating Leases The Council was committed at 31 March 2024 to making payments of £2.061m under operating leases comprising the following elements: Other Land and Buildings Vehicles, Plant and Equipment Other Land and Buildings Vehicles, Plant and Equipment £'000 £'000 £'000 £'000 213 184 Due within 1 year 485 222 691 162 Due between 1 and 5 years 481 114 1,479 5 Due after 5 years 759 - 2,383 351 Value at 31 March 1,725 336 31st March 2023 31st March 2024 21 FINANCE LEASES 21.1 Finance Leases – Amounts Paid to Lessors During 2017-18 the Council purchased a new cremator for Cardross Crematorium under a finance lease arrangement. The amount paid under this arrangement in 2023-24 was as follows: 2022-23 2023-24 £'000 £'000 63 Plant and Equipment 63 63 Total 63 21.2 Assets Held Under Finance Leases Assets purchased under a finance lease are included within the assets of the Council and depreciated over the life of the asset as follows: 2022-23 2023-24 £'000 Vehicles, Plant and Equipment £'000 376 Value at 1 April 325 - Additions - (51) Depreciation (51) 325 Value at 31 March 274 Page 192
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 101 21.3 Finance Lease Liability The Council was committed at 31 March 2024 to making payments of £0.301m under finance leases comprising the following elements: Movements in 2023-24 £'000 Balance at 1 April 2023 (349) Additions - Repayments 48 Finance Lease Liability at 31 March 2024 (301) Split: Obligations payable within 1 year (63) Obligations payable between 1 and 5 years (251) Obligations payable after 5 years (29) Finance Lease Obligations at 31 March 2024 (343) Less Interest element of lease 42 Finance Lease Liability at 31 March 2024 (301) Comparative Movements in 2022-23 £'000 Balance at 1 April 2022 (396) Additions - Repayments 47 Finance Lease Liability at 31 March 2023 (349) Split: Obligations payable within 1 year (63) Obligations payable between 1 and 5 years (251) Obligations payable after 5 years (92) Finance Lease Obligations at 31 March 2023 (406) Less Interest element of lease 57 Finance Lease Liability at 31 March 2023 (349) Page 193
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 102 22 LONG TERM DEBTORS 31st March 2023 31st March 2024 £'000 £'000 12 House Loans 11 750 Waste PPP Historic Contamination Fund 750 1,801 Charging Orders - Care Home Fees 2,099 3,024 Strategic Housing Fund Loans to Registered Social Landlords 2,879 293 Other Long Term Debtors 77 5,880 Total Long Term Debtors 5,816 23 DEBTORS £'000 £'000 £'000 £'000 18,990 Arrears of Local Taxation 20,310 (16,844) Less: Impairment of Bad Debts (17,776) 2,146 2,534 435 Housing Benefits Overpayments 375 (299) Less: Impairment of Bad Debts (277) 136 98 3,382 Debtor Accounts 4,586 (1,172) Less: Expected Credit Loss (1,121) 2,210 3,465 2,742 Net Debtor to Scottish Government for Non Domestic Rates 1,670 4,316 VAT Recoverable from HMRC 2,807 139 Strategic Housing Fund Loans due within 1 Year 145 7,456 Accrued Income 14,576 8,041 Other Debtors 13,073 27,186 Total Debtors 38,368 31 March 202431 March 2023 Page 194
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 103 24 ASSETS HELD FOR SALE The movement in assets held for sale was: 2022-23 2023-24 £'000 £'000 1,509 1,554 17 286 - Additions - 84 Revaluation losses - 60 Revaluation gains 189 - Impairment losses - - Assets declassified as "Held for Sale" (Property, Plant and Equipment) - (116) Assets Sold (410) 1,554 Balance Sheet amount at 31st March 2024 1,619 Balance Sheet amount at 1st April 2023 Assets newly classified as "Held for Sale" (Property, Plant and Equipment) Movements 25 CASH AND CASH EQUIVALENTS The balance of Cash and Cash Equivalents is made up of the following elements: 31 March 2023 31 March 2024 £'000 £'000 4 3 (218) Cash in transit 794 1,976 Short term deposits with banks 633 6,850 Short term deposits in Money Market Funds 1,400 (7,789) Bank Current Accounts (12,821) 823 Total Cash and Cash Equivalents (9,991) Cash held by the Authority Page 195
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 104 26 CREDITORS 31 March 2023 31 March 2024 £'000 £'000 11,707 Accrued Payrolls and Superannuation 9,174 3,092 Accrued Employer's National Insurance Contributions and PAYE 3,495 7,588 Accrual for Short Term Accumulating Absences 8,272 96 Creditors System Liability (19) 9,095 Accrued Expenditure 10,774 5,006 Health and Social Care Partnership Creditor 3,389 1,022 RCGF Grant Income 2,060 854 Trust Funds 901 - Net Creditor to Scottish Government for Non Domestic Rates 1,408 11,584 Other Creditors 12,920 50,044 Total Creditors 52,374 27 FINANCIAL INSTRUMENTS DISCLOSURES 27.1 Types of Financial Instruments Accounting regulations require the “Financial Instruments” (investment, lending and borrowing of the Council) shown on the balance sheet to be further analysed into various defined categories. The investments, lending and borrowing disclosed in the Balance Sheet are made up of the following categories of “Financial Instruments”: Long Term Current Long Term Current £'000 £'000 £'000 £'000 Investments and Lending 11,372 78,669 Financial Assets at Amortised Cost 6,308 48,810 Borrowing 239,187 58,190 209,151 63,406 31 March 202431 March 2023 Financial Liabilities at amortised cost 27.2 Fair Value of Assets and Liabilities Carried at Amortised Cost Financial assets (represented by lending and receivables) and financial liabilities (represented by borrowings) are carried in the Balance Sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining period of the instrument, using the following assumptions: • Estimated interest rates at 31 March 2024 for loans from the PWLB were taken from the appropriate interest rate notice and for other loans receivable and payable from market rates obtained by our treasury advisors. • No early repayment or impairment is recognised. • Where an instrument will mature in the next 12 months, the carrying amount is assumed to approximate to fair value. • The fair value of trade and other receivables is taken to be the invoiced or billed amount. The fair values are calculated as follows: Page 196
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 105 Carrying Amount Fair Value Carrying Amount Fair Value £'000 £'000 £'000 £'000 Lending 90,041 90,041 Financial Assets at Amortised Cost 55,118 55,118 Borrowing 297,377 315,566 Financial Liabilities 272,557 272,797 31 March 2023 31 March 2024 The fair value is greater than the carrying amount because the Council’s lending figure includes a number of loans where the interest rate receivable is higher than the rates available for similar loans at the Balance Sheet date. The commitment to receive interest above the current market rates increases the amount the Council would receive if it agreed the early repayment of loans. 27.3 Gains and Losses on Financial Instruments There are no gains and losses recognised in the Comprehensive Income and Expenditure Statement in relation to Financial Instruments. 27.4 Nature and Extent of Risks arising from Financial Instruments The Council’s management of treasury risks actively works to minimise the Council’s exposure to the unpredictability of financial markets and to protect the financial resources available to fund services. The Council has fully adopted CIPFA’s Code of Treasury Management Practices and has written principles for overall risk management as well as written policies and procedures covering specific areas such as credit risk, liquidity risk and market risk. 27.5 Credit Risk Credit risk arises from the short-term lending of surplus funds to banks, money market funds, building societies and other local authorities as well as credit exposures to the Council’s customers. It is the policy of the Council to place deposits only with a limited number of high quality banks and money market funds whose credit rating is independently assessed as sufficiently secure by the Council’s treasury advisers and to restrict lending to a prudent maximum amount for each institution. The following analysis summarises the Council’s potential maximum exposure to credit risk, based on past experience and current market conditions. No credit limits were exceeded during the financial year and the Council expects full repayment on the due date of deposits placed with its counterparties. Amount at 31 March 2024 Historical Experience of Non-payment adjusted for Market Conditions at 31 March 2024 Estimated Maximum Exposure to Default and Uncollectability £'000 % £'000 2,033 - - Deposits with Banks and Money Market Funds The information in respect of the Council’s debtors can be found in Notes 22 and 23. The Debtor Accounts represents the amounts owed by the Council’s customers; Other Debtors include prepaid expenditure, accrued income and money owed to the Council in respect of projects being carried out under partnerships where the Council is the lead partner. The bad debt provision shown in Note 23 represents the Council’s assessment of the likely recoverability of the debt outstanding. The credit risk around unprovided for debt is considered to be low. Debtors relate to the normal business Page 197
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 106 of the Council and credit is issued on the Council’s standard credit terms. There are no significant amounts past due but not impaired where recoverability is considered to be an issue. 27.6 Liquidity Risk The Council’s main source of borrowing is the Treasury’s Public Works Loans Board (PWLB). There is no significant risk that the Council will be unable to raise finance to meet its commitments under Financial Instruments. The Council has safeguards in place to ensure that a significant proportion of its borrowings does not mature for repayment at any one time in the future to reduce the financial impact of re- borrowing at a time of unfavourable interest rates. The Council’s policy is to ensure that not more than 30% of the loans are due to mature within any financial year through a combination of prudent planning of new loans taken out and, where it is economic to do so, making early repayments. The maturity analysis of financial liabilities is as follows: 31 March 2023 31 March 2024 £'000 £'000 63,958 Less than one year 63,404 5,357 Between one and two years 7,219 19,048 Between two and five years 25,773 209,014 More than five years 176,161 297,377 272,557 Maturity analysis of financial liabilities All other amounts due to the Council for council tax, non-domestic rates and other income are due to be paid in less than one year. 27.7 Market Risk Changes in market interest rates influence the interest payable on borrowings and on interest receivable on surplus funds invested. For example, a rise in interest rates would mean an increase in the interest charged on borrowing at variable rates and an increased cost to the taxpayer. An increase in interest rates would also mean an increase in the income received on lending at variable rates and a reduction in cost for the taxpayer. Changes in market rates also affect the notional “fair value” of lending and borrowing. For example, a rise in interest rates would reduce the “fair value” of both lending and borrowing at fixed rates. Changes in “fair value” of lending and borrowing do not impact upon the taxpayer and are confined to prescribed presentational aspects in the Accounts. The Council has a variety of strategies for managing the uncertainty of future interest rates and the financial impact on the Council. It is the policy of the Council to limit its exposure to variable rate borrowing to a maximum of 30% of what it borrows. During periods of falling rates and where it is economically advantageous to do so, the Council will consider the repayment and restructuring of fixed interest rate debt. The Council takes daily advice from its specialist treasury advisers and actively monitors changes in interest rates to inform decisions on the lending of surplus funds, new borrowings and restructuring of existing borrowings. Any potential for a financial impact on the Council is also significantly limited by the Scottish Government’s grant distribution mechanism that automatically adjusts for changes in interest rates in the Government Grant support the Council receives for “loan charges”. To illustrate the impact of changes in interest rates upon the Council, the following table shows the financial effect if rates had been 1% higher at 31 March 2024, with all other variables held constant: Page 198
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 107 31 March 2024 Impact on tax-payer £'000 Increase on interest payable on variable rate borrowings 53 Increase in interest receivable on variable rate lending - Increases in government grant receivable for “loan charges” - Net effect on Statement of Comprehensive Income & Expenditure 53 31 March 2024 Other accounting presentational changes £'000 13,965 A decrease in the “fair value” of fixed rate borrowing (disclosure confined to the notes to the financial statements) The impact of a 1% fall in the interest rates would be as above but with the changes being reversed. 27.8 Price Risk The Council has no investment classified as “available-for-sale”. 27.9 Foreign Exchange Risk The Council does not lend or borrow in foreign currencies and has no exposure to gains or losses arising from movements in exchange rates. 27.10 Short-Term Deposits The short-term deposits arise as a result of the timing of expenditure and associated income and movements in fund and revenue balances. The Council adopts a proactive but prudent approach to its Treasury Management operations, which are governed by the fully revised edition of CIPFA’s Code of Practice on Treasury Management. 31 March 2023 31 March 2024 £'000 £'000 8,826 Banks and Money Market Funds 2,033 27.11 Soft Loans The Council has no material soft loans at 31 March 2024, on which no interest was being charged. 27.12 Short-Term Borrowing The Common Good and the various Trust Funds administered by the Council had monies temporarily invested with the Council’s loans fund during the year. The amounts at 31 March 2024 are shown in the table below. Further details of the nature and amounts of the funds of the Common Good and Trust Funds are shown in Notes 36 and 37. 31 March 2023 31 March 2024 £'000 £'000 144 Common Good 157 854 Trust Funds 901 Page 199
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 108 28 OTHER LIABILITIES Other liabilities consist of liabilities which by arrangement are payable at some point in the future or paid off by an annual sum over a period of time. Other liabilities total £107.033m as at 31 March 2024 and comprise the following: Opening Balance 1 April 2024 Movement in Year Closing Balance 31 March 2024 £'000 £'000 £'000 (349) 48 (301) (111,214) 5,232 (105,982) (750) - (750) Total Other Liabilities (112,313) 5,280 (107,033) Split: Short Term Liabilities (due within 1 year) (5,336) Long Term Liabilities (due after 1 year) (101,697) Total Other Liabilities (107,033) Movements in 2023-24 Finance Lease Liability (See note 21.3) Schools Finance Lease Liability (See note 19.2) Land Contamination 29 PROVISIONS Opening Balance 1 April 2023 Additional Provision Amounts Used Unused Amounts Reversed Closing Balance at 31 March 2024 £'000 £'000 £'000 £'000 £'000 (13) (13) Employee Settlement Provision (51) 51 - SRC Intromissions (19) 19 - SW - Mull Homecare Backdated Pay (13) (13) (108) (7) (115) (53) 16 (37) Service Choices Redundancy Costs (16) (137) 14 2 (137) (2,336) (404) (2,740) (237) (44) 37 (244) Litigation Claims (196) (196) Insurance Excess Provision - - (865) (487) 195 132 (1,025) Total Provisions (3,894) (1,092) 279 187 (4,520) Split: Short Term Provisions (due within 1 year) (1,665) Long Term Provisions (due after 1 year) (2,855) Total Other Liabilities (4,520) NPDO and Hub DBFM Payments Equal Pay Claims Commercial Rent Balances Income due to Registered Social Landlords Landfill Sites - Restoration and Aftercare Costs Utilities Provision A provision was created at the end of 2005-06 in relation to employees in catering, cleaning and home care services who had not accepted the Council’s equal pay settlement. There may be further outstanding claims where the settlement amount cannot be estimated reliably enough to provide for the costs. Page 200
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 109 The Council reduced the discount on Council Tax from second homes to 10% during 2005-06. The additional Council Tax income invoiced during 2023-24 amounted to £2.575m; this amount is to be paid to registered social landlords to invest in social housing. A provision for cash not yet collected has been created amounting to £0.115m. There is a provision for Commercial Rents where arrangements have been put in place for repayment over a number of years. The provision reflects the uncertainty of collection of the debt. Liabilities have arisen in respect of employees who will be made redundant as a result of savings options agreed. The cost for any employee, whose contract has been terminated on or before 31 March 2024 has been incurred in year. For the employees who have confirmed acceptance of redundancy but have left or are leaving after 31 March 2024, a provision of £0.137m has been created. A provision for landfill sites was created in 2014-15 reflecting the Council’s liability for restoration and ongoing maintenance in respect of landfill sites operated by the Council, at Glengorm, Gartbreck and Gott Bay. The landfills sites were revalued at 31 March 2024 and the provision for restoration and aftercare increased to £2.740m. These have been provided for based on the net present value of estimated future costs. The utilities provision was created during 2011-12 to cover a potential liability in relation to discrepancies in charges for utility costs, £0.044m has been reversed during 2023-24 and a further £0.037m additional provision has been added resulting in a total provision of £0.244m. A legal litigation provision was created in 2020-21 as the Council is currently involved in several ongoing cases that will incur costs into future years. The provision is based on sums invoiced and anticipated future costs. The NPDO provision for withheld sums from the Unitary Charge paid to ABC Schools relates to unbilled utility costs, Authority related damage and contract variations. The HUB DBFM provision for withheld sums from the Monthly Service Payment paid to Hub North Scotland (O&C) Ltd relates to unbilled Authority related damage and contract variations. 30 CAPITAL GRANTS RECEIVED IN ADVANCE A Capital Grant of £1.564m was received in advance for 2023-24 in respect of the Cuan Sound/Jura Ferry Programme. Opening Balance 1 April 2023 Capital Grants Received Amounts Used Closing Balance 31 March 2024 £'000 £'000 £'000 £'000 - 1,564 1,564 - - - Total Other Liabilities - 1,564 - 1,564 Split: Capital Grant Receipts in Advance (due within 1 year) - Capital Grant Receipts in Advance (due after 1 year) 1,564 Total Other Liabilities 1,564 HITRANS Page 201
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 110 31 DEFINED BENEFIT PENSION SCHEMES Participation in Pension Schemes As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments (for those benefits) and to disclose them at the time that employees earn their future entitlement. The Council participates in two separate pension schemes which meet the needs of employees in particular services. Both schemes provide members with defined benefits related to pay and service. The schemes are as follows: Teachers The Scottish Teachers’ Superannuation Scheme is an unfunded scheme administered by the Scottish Government. This means that liabilities for the benefits provided cannot be identified by the Council. The scheme is therefore accounted for as if it were a defined contribution scheme where no liability for future payments of benefits is recognised in the balance sheet and revenue accounts are charged with the employer’s contributions payable to the Scottish Government in the year. Local Government Pension Scheme This is administered by Strathclyde Pension Fund – this is a funded defined benefit final salary scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pension’s liabilities with investment assets. The contributions are based on rates determined by the Fund’s professionally qualified actuary and based on triennial valuations of the Fund. The principal risks to the Council of the scheme are the longevity assumptions, statutory changes to the scheme, changes to inflation, bond yields and the performance of the equity investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge to the General Fund the amounts due by statute as described in the accounting policies note. Legal and Regulatory Uncertainty – Virgin Media vs NTL Pension Trustees II Limited In June 2023, the High Court (Virgin Media Limited v NTL Pension Trustees II Limited) ruled that amendments to certain defined benefit pension schemes were void if they were not accompanied by section 37 actuarial certificates. The Court of Appeal rejected an appeal of this decision in July 2024. The Local Government Pension Scheme is affected by this ruling. The Government Actuary’s Department is the actuary for the Local Government Pension Scheme and has so far failed to evidence that section 37 certificates are in place for all amendments. Work is ongoing to discover whether the evidence exists. Until this work is complete, it is not possible to conclude whether there is any impact on the value of retirement benefits under IAS26 or if it can be reliably estimated. Although this is the current position in law, the Government is being lobbied to make a change to the regulations which would retrospectively validate amendments which would otherwise be void because of a failure to have obtained section 37 certificates. The Government has an existing power to make the necessary regulations but not yet said whether it will do anything. There is also the possibility that Virgin Media could seek permission to appeal to the Supreme Court. Developments are being monitored. In the current circumstances, it is not considered necessary to make any allowance for the potential impact of the Virgin Media case in the disclosure of the value of retirement benefits in the financial statements. 31.1 Accrued Pensions Contribution Due to the timing of salary processing, not all employee and employer contributions have been paid to the pension schemes by the 31 March 2024. These payments have been accrued and are included within the creditors figure on the Balance Sheet. These have been paid during April 2024. The amounts are as follows: • Local Government Pension Scheme – £2.040m Page 202
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 111 • Teachers’ Scheme – £1.304m 31.2 Transactions in Respect of the Local Government Pensions Scheme The latest formal valuation of the Strathclyde Pension Fund for funding purposes was at 31 March 2020. The independent actuaries appointed by the Council are Hymans Robertson and they have assumed that employees have continued to earn new benefits on the same basis as the latest formal valuation and that the employer’s pensionable payroll over the year to 31 March 2024 remains substantially stable with new entrants replacing any leavers. We recognise the cost of retirement benefits in the Net Cost of Services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge we are required to make against Council Tax is based on the cash payable in the year, so the real cost of retirement benefits is reversed out of the General Fund via the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund via the Movement in Reserves Statement during the year: 2022-23 2023-24 £'000 £'000 36,689 Current Service Cost 19,119 637 Past Service Cost (Including Curtailments) - 37,326 Net Cost of Services 19,119 141 Net Interest Expense (11,307) - Interest on the Effect of IAS 19 Asset Ceiling 4,711 37,467 12,523 37,377 Return on Assets (excluding amounts included in net interest) (43,972) 46,257 Other Experience (see note (i) below) 56,060 (337,163) Change in Financial and Demographic Assumptions (32,078) - Reversal of 2022-23 IAS 19 Asset Ceiling and Interest Adjustment (103,890) 99,179 IAS 19 Asset Ceiling Adjustment 288,794 (116,883) 177,437 Statement of Movement in Reserves: (19,970) 6,322 17,497 Employer's Contributions Payable to the Scheme 18,845 Comprehensive Income and Expenditure Statement: Cost of Services: Total Post Employment Benefit Charged to the Surplus or Deficit on the Provision of Services Other Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement Total Post Employment Benefits Charged to the Comprehensive Income and Expenditure Statement Reversal of net charges made to the Surplus or Deficit for the Provision of Services for post employment benefits in accordance with the Code Actual Amount charged against the General Fund Balance for pensions in the year: Service cost comprising: Page 203
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 112 (i) A measure of the difference between actual experience and that expected based upon a set of actuarial assumptions, during the period between two actuarial valuation dates, as determined in accordance with a particular cost method. (ASOP No. 4) 31.3 Assets and Liabilities in Relation to Post-Employment Benefits Reconciliation of present value of the scheme liabilities (defined benefit obligation): Reconciliation of fair value of the scheme (plan) assets: 2022-23 2023-24 £'000 £'000 875,876 861,065 Re-measurement (Gains) and Losses: (37,377) Expected Rate of Return on Pension Fund Assets 43,972 - Actuarial (Gains) and Losses (1,455) 23,634 Interest Income on Plan Assets 40,760 17,497 Employers Contributions 18,845 4,833 Contributions by Scheme Participants 5,280 (23,398) Estimated Benefits Paid (30,102) 861,065 Fair Value of Employer Assets at 31 March 24 938,365 Fair Value of Employer Assets at 1 April 23 The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance Sheet date. Expected returns on equity investments reflect long-term real rates of return experienced in the respective markets. An asset ceiling adjustment was included in 2022-23 and 2023-24 to ensure compliance with IAS 19 which limits the measurement of a net defined benefit asset to the lower of the surplus in the defined benefit plan and the asset ceiling. The asset ceiling is defined as the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. 2022-23 2023-24 £'000 £'000 871,242 622,872 36,689 19,119 637 - 23,775 29,453 4,833 5,280 (311,081) 2,949 (23,398) (30,102) 602,697 649,571 20,175 19,578 622,872 669,149 Defined Benefit Obligation at 1 April 23 Defined Benefit Obligation at 31 March 24 Present Value of Unfunded Liabilities Defined Benefit Obligation at 31 March 24 Re-measurement (Gains) and Losses Contributions by Scheme Participants Interest Cost Past Service Costs including Curtailments Current Service Cost Estimated Benefits Paid Page 204
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 113 31.4 Pensions Assets and Liabilities Recognised in the Balance Sheet 2022-23 2023-24 £'000 Local Government Pension Scheme £'000 (602,697) Present Value of Funded Liabilities (649,571) 861,065 Fair Value of Employer Assets 938,365 (99,179) IAS19 Asset Ceiling Adjustment (288,794) 159,189 Surplus/(Deficit) in the Scheme - (20,175) Present Value of Unfunded Liabilities (19,578) 139,014 Net Surplus/(Deficit) in the Scheme (19,578) The liabilities show the underlying commitments that the Council has in the long run to pay post- employment (retirement) benefits. Page 205
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 114 31.5 Analysis of Pension Fund’s Assets Argyll and Bute Council’s share of the Pension Fund’s assets at 31 March 2024 comprised: 2022-23 2023-24 £'000 £'000 16,312 Cash and Cash Equivalents 17,395 Equity Instruments (by industry type) 38,629 Consumer 43,350 48,013 Manufacturing 54,078 4,310 Energy and Utilities 8,511 18,331 Financial Institutions 26,936 30,629 Health and Care 25,047 29,776 Information Technology 31,804 - Other - 169,688 Sub-total Equity Instruments 189,726 Bonds (by sector) - Corporate - - Government - - Sub-total Bonds - Real Estate 70,994 UK Property 73,783 - Overseas Property - 70,994 Sub-total Real Estate 73,783 211,640 Private Equity (All) 224,026 Investment Funds and Unit Trusts 285,352 Equities 323,600 99,304 Bonds 109,461 336 Commodities 374 5,529 Infrastructure - 1,911 Other - 392,432 Sub-total Investment Funds and Unit Trusts 433,435 Derivatives (1) Forward Foreign Exchange Contracts - - Other - (1) Sub-total Derivatives - 861,065 Total Assets 938,365 Page 206
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 115 2022-23 2023-24 £'000 Fair Value of Pension Fund Assets £'000 Equity Securities 168,144 Quoted in an Active Market 189,520 1,544 Not Quoted in an Active Market 206 169,688 Sub-total Equity Securities 189,726 31.6 Basis for Estimating Assets and Liabilities The Council’s share of the liabilities of Strathclyde Pension Fund have been assessed on an actuarial basis using the projected unit method, an estimate of the pensions that will be payable in future years dependent on the assumptions about mortality rates, salary levels, etc. The principal assumptions used by the actuary have been: 2022-23 2023-24 Years Mortality assumptions Years 19.3 Longevity at 65 for current pensioners: Men 20.0 22.2 Women 22.7 20.5 Longevity at 65 for future pensioners: Men 20.9 24.2 Women 24.7 2022-23 2023-24 % Financial Assumptions % 3.0% Rate of Inflation (CPI) 2.8% 3.7% Rate of Increase in Salaries 3.5% 3.0% Rate of Increase in Pensions (CPI) 2.8% 4.8% Rate for discounting scheme liabilities 4.8% 2022-23 2023-24 % Long-term Expected Rate of Return on Assets in the Fund % 4.8% Equity Investments 4.8% 4.8% Bonds 4.8% 4.8% Property 4.8% 4.8% Cash 4.8% An allowance is included for future retirements to elect to take 50% of the maximum additional tax- free cash up to HMRC limits for pre-April 2009 service and 75% of the maximum tax-free cash for post- April 2009 service. For sensitivity analysis on the net pension asset please see Note 4 on page 76. Page 207
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 116 31.7 Asset and Liability Matching (ALM) Strategy The main fund (Fund 1) of Strathclyde Pension fund does not have an asset and liability matching strategy (ALM) as this is used mainly by mature funds. The Fund does match, to the extent possible, the types of assets invested to the liabilities in the defined benefit obligation. As is required by the pensions and investment regulations, the suitability of various types of investment has been considered, as has the need to diversify investments to reduce the risk of being invested into too narrow a range. 31.8 Impact on the Council’s Cash Flow The objectives of the Fund are to keep employers’ contributions at as constant a rate as possible. The Fund has agreed a strategy to achieve a funding rate of 100% in the longer term. The Scheme is a multi-employer defined benefit plan and employers’ contributions have been determined so that employee and employer rates are standard across all participating Local Authorities. Employer’s contributions have been set at 6.5% for 2024-2025. The total contributions expected to be made to the Local Government Pension Scheme by the Council in the year to 31 March 2025 is £5.780m. This is based on an assumed pensionable payroll of £88.926m. The assumed weighted average duration of the defined benefit obligation for the Council falls into the “Medium” duration category which is between 17 and 23 years (this is different from the mortality assumptions quoted in the table above in “Basis for Estimating Assets and Liabilities”). 31.9 Teachers Pensions – Administered By Scottish Public Pensions Agency Teachers employed by the Council are members of the Scottish Teachers’ Superannuation Scheme, administered by the Scottish Public Pensions Agency. The Scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The Scheme is financed by payments from employers and from those current employees who are members of the Scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified by the regulations. Employers currently pay a contribution rate of 23% - about two thirds of the cost of an individual's pension. This took effect from 1 September 2019. The Council has no liability for other employers’ obligations to the multi-employer scheme. As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the Scheme or withdrawal from the Scheme. The scheme is an unfunded multi-employer defined benefit scheme. It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where the Authority is unable to identify its share of the underlying assets and liabilities of the scheme. At the last valuation a shortfall of £1.3 billion was identified in the notional fund which will be repaid by a supplementary rate of 4.5% of employers’ pension contributions for fifteen years from 1 April 2015. This contribution is included in the 23% employers’ contribution rate. As a proportion of the total contributions into the Teachers’ Pension Scheme during the year ended 31 March 2024, the council’s own contributions equate to 1.53%. Page 208
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 117 9,853 Amount Paid Over (£'000) 10,779 23.00% Rate of Contribution (%) 23.00% 508 Amount of Added Years Awarded by the Council (£'000) 507 2023-242022-23 The contributions due to be paid to the Teacher’s Scheme by the Council in the next financial year are estimated to be £12.707m. 32 UNUSABLE RESERVES Movements in the Council’s unusable reserves are detailed in the Statement of Movement in Reserves. 32.1 Revaluation Reserve The Revaluation Reserve contains the gains made by the Council arising from increases in the value of its Property, Plant and Equipment. The balance is reduced when assets with accumulated gains are: • Revalued downwards or impaired and the gains are lost • Used in the provision of services and the gains are consumed through depreciation, or • Disposed of and the gains are realised. The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the Reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account. 32.2 Capital Adjustment Account The Capital Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or additions to those assets under statutory provisions. The Account is debited with the cost of acquisition, construction or subsequent costs as depreciation, impairment losses and amortisations which are charged to the Comprehensive Income and Expenditure Statement (with reconciling postings from the Revaluation Reserve to convert current and fair value figures to a historical cost basis). The Account is credited with the amounts set aside by the Council as finance for the costs of acquisition, construction and subsequent costs. The Account contains accumulated gains and losses on Investment Properties. The Account also contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date the Revaluation Reserve was created to hold such gains. 32.3 Financial Instruments Adjustment Account The Financial Instruments Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for income and expenses relating to certain financial instruments and for bearing losses or benefiting from gains per statutory provisions. The Council uses the Account to manage premiums paid on the early redemption of loans. Premiums are debited to the Comprehensive Income and Expenditure Statement when they are incurred, but reversed out of the General Fund Balance to the Account in the Movement in Reserves Statement. Over time, the expense is posted back to the General Fund Balance in accordance with statutory arrangements for spreading the burden on Council Tax. Page 209
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 118 32.4 Pensions Reserve The Pensions Reserve absorbs the timing differences arising from the different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory provisions. The Council accounts for post-employment benefits in the Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However, statutory arrangements require benefits earned to be financed as the Council makes employer’s contributions to pension funds. The Pensions Reserve shows a negative position at the end of 2023-24 due to the impact of the inclusion of the asset ceiling to meet the requirements of IAS 19. 32.5 Accumulated Absences Account The Accumulated Absences Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the Account. 33 USABLE RESERVES Movements in the Council’s usable reserves are detailed in the Statement of Movement in Reserves. 33.1 Capital Funds The Council holds two funds which make up the Capital Funds total in the Statement of Movement in Reserves, these are: Usable Capital Receipts Reserve During the 2006-07 financial year, and prior to the transfer of the Council’s housing stock during November 2006, the receipts from the sale of council houses were transferred to the Usable Capital Receipts Reserve. The amounts held in this reserve can only be used for social housing capital expenditure. Capital Fund During the 2007-08 financial year the Council established a Capital Fund under Section 22 of Schedule 3 of the Local Government (Scotland) Act 1975. All receipts from capital disposals are to be paid into this fund with effect from 14 February 2008. The movement in the Usable Capital Receipts Reserve and Capital Fund are as follows: Usable Capital Receipts Reserve Capital Fund Total Capital Funds £'000 £'000 £'000 Balance at 1 April 2023 2,935 1,568 4,503 Proceeds of Disposals - 671 671 Transfer to Capital Adjustment Account - (2,207) (2,207) Contribution to Capital Fund From Revenue - - - Interest Earned 145 85 230 Balance at 31 March 2024 3,080 117 3,197 Movements in 2023-24 Page 210
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 119 33.2 Repairs and Renewals Fund The movement in the Education Repairs and Renewals Fund is as follows: Balance at 1 April 2023 Contribution from Revenue Interest Earned Contribution to Revenue Balance at 31 March 2024 £'000 £'000 £'000 £'000 £'000 Education 2,916 (860) 135 572 2,763 Total 2,916 (860) 135 572 2,763 Movements in 2023-24 34 CONTINGENT LIABILITIES 34.1 Equal Pay Claims The Council settled a number of equal pay claims during 2017-18, however there are a small number remaining where the outcome of the applications are unknown and there is insufficient information to allow the potential cost of these claims to be provided for. There is also the potential for other equal pay claims whose costs may be met by the Council. 34.2 Goodwin Judgement The Social Security Act 1986 introduced changes to survivor pensions which resulted in most public service pension schemes providing survivor benefits to widowers (male survivors in opposite-sex marriages) based on the female spouse’s service from 6 April 1988 onwards. Since the introduction of civil partnerships and same sex marriages, public service pension schemes have provided survivor benefits in respect of both which have been in line with those paid to widowers. An employment tribunal (the Goodwin case) concluded on 30 June 2020 that a female member in an opposite sex marriage is treated less favorably than a female in a same sex marriage or civil partnership, and that treatment amounts to direct discrimination on grounds of sexual orientation. Where schemes contain provisions deemed discriminatory, those provisions must be dis-applied as being contrary to the non-discrimination rule set out in section 61 of the Equality Act 2010. In light of this ruling the Chief Secretary to the Treasury has confirmed that amendments would be made to the Teachers’ Pension Scheme and other public service pension schemes so that “surviving male same-sex and female same-sex spouses and civil partners will, in certain cases, receive benefits equivalent to those received by widows of opposite sex marriages” There is still uncertainty surrounding the potential remedy to the Goodwin judgement however the Council’s actuaries have estimated the potential impact of implementing a solution to correct the past underpayment of spouses’ benefits to be circa 0.1% of gross obligations. This would amount to £0.669m at 0.1% for the Council. As there is still uncertainty over the remedy and the potential impact no provision has been made in the accounts at the current time. 34.3 SRC Intromissions The Local Government (Transitional Financial Provisions) (Scotland) Order 1996, ‘the Order’ provided for the appointment of Glasgow City Council (GCC), as the relevant Accounting Authority for residual matters relating to the former Strathclyde Regional Council (SRC), on behalf of the successor authorities. This places a duty on GCC to account to successor authorities in respect of all expenditure and income attributable to its duties as Accounting Authority, to be shared across successor authorities on a Council Tax Band D Equivalent basis. Actual claims to date have already been accounted for within the financial statements however an Page 211
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 120 exercise has now been completed by GCC to collate known information in relation to any outstanding ex- SRC cases. This information and information already known to GCC was identified within the claims management system giving a total of 256 outstanding claims at this time. All outstanding claims has been assigned an estimated cost, however they have not yet been subject to any due diligence by the council’s claim team and must therefore be considered notional. The actual settlement value remains uncertain until the legal/settlement process has been completed. 34.4 Other Legal Challenges There may be other legal challenges on-going which could result in future liabilities. 35 TERMINATION BENEFITS A number of savings options have been agreed at Council budget meetings to balance the Council budget. A number of these savings options were reliant on a reduction in the Councils staffing levels. The Council had forewarning of the level of savings required to balance the budget and had previously asked all Council employees to express an interest in voluntary redundancy. As a result of the budget savings options approved by the Council a number of employees have had their redundancy application accepted. Redundancy costs have been incurred by the Council since the 2010-11 financial year in relation to the budget savings agreed. In each year, provision was made within the financial year for the costs of all employees who had accepted redundancy or where redundancy was probable as at 31 March ending that year, including accounting for costs for employees who confirmed redundancy by 31 March but left or were leaving after this date. Termination costs for all Council employees who have accepted redundancy by 31 March 2024 are recognised in the Exit Packages note in 2023-24, or in previous financial years. The total cost recognised in the Exit Packages note in 2023-24 is £0.276m for 4 employees and in 2022-23 was £0.622m for 10 employees. These costs are detailed further in the Remuneration Report on page 50. The reduction in the staffing establishment includes posts from all services across the Council and reductions were in line with the savings agreed by the Council. There will be further redundancy costs incurred as the Council is required to make further savings to balance the budget in future years and the council have earmarked monies from the loans fund one-off reprofiling gain. Page 212
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 121 36 TRUST FUNDS AND OTHER THIRD PARTY FUNDS The Council acts as sole or custodian trustee for 57 trust funds. The funds do not represent assets of the Council, and as such have not been included in the Balance Sheet. Funds for which the Council act as sole trustee: Income Expenditure Net Assets Reserves £'000 £'000 £'000 £'000 23 17 707 707 3 3 67 67 35 - 1,208 1,208 22 16 470 470 Total Trust Funds 83 36 2,452 2,452 Argyll Education Trust GM Duncan Trust MacDougall Trust Various Other Trust Funds Argyll Education Trust: this is made up of a number of small trusts to award prizes, bursaries, etc. to pupils and ex-pupils of schools within the former Argyll County Council area. GM Duncan Trust: for the provision of fuel, clothing and foodstuffs for the needy of Campbeltown. MacDougall Trust: for the provision of sheltered housing on the Ross of Mull. Further information on the Trust Funds, administered by the Council, can be obtained from Financial Services within the Chief Executive’s Unit. A number of the trust funds administered by the Council are charitable trusts and as such are required to comply with current Office of the Scottish Charities Regulator (OSCR) financial reporting requirements. Arrangements have been put in place to ensure that all charities administered by the Council comply and will continue to comply with these requirements. 37 COMMON GOOD FUNDS The Council administers the Common Good Accounts for the former Burghs of Oban, Campbeltown, Rothesay, Dunoon, Lochgilphead, Inveraray, Cove and Kilcreggan. The figures below summarise the aggregate income and expenditure for the year as well as providing a snapshot picture of the assets and liabilities at 31 March 2024. The Common Good Funds are for the benefit of the geographical areas of the former burghs. Further information on the Common Good Funds can be obtained from Financial Services. 37.1 Common Good Income and Expenditure Account for the year ended 31 March 2024 Oban Common Good Other Common Goods Total Common Good Oban Common Good Other Common Goods Total Common Good £'000 £'000 £'000 £'000 £'000 £'000 258 74 332 Expenditure 129 54 183 (57) (42) (99) Income (232) (150) (382) 201 32 233 (Surplus)/Deficit for the Year (103) (96) (199) 2022-23 2023-24 Page 213
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 122 37.2 Common Good Balance Sheet at 31 March 2024 Oban Common Good Other Common Goods Total Common Good Oban Common Good Other Common Goods Total Common Good £'000 £'000 £'000 £'000 £'000 £'000 5,711 319 6,030 Tangible Fixed Assets 5,622 319 5,941 1,939 1,148 3,087 Investments 2,113 1,252 3,365 147 183 330 Current Assets 171 176 347 (15) - (15) Current Liabilities (21) (1) (22) 7,782 1,650 9,432 Total Assets less Liabilities 7,885 1,746 9,631 5,711 323 6,034 Revaluation Reserve 5,620 323 5,943 2,071 1,327 3,398 Common Good Fund 2,263 1,423 3,686 7,782 1,650 9,432 Total Net Worth 7,883 1,746 9,629 2022-23 2023-24 38 TAX INCREMENTAL FINANCING (TIF) PROJECTS The Council entered into an agreement with the Scottish Government in May 2014 in respect of the Lorn Arc Tax Incremental Finance (TIF) scheme. This agreement essentially allows for the repayment of debt arising from infrastructure investment from incremental Non-Domestic Rates (NDR) revenue. The assets to be funded by the TIF project largely comprise public realm and infrastructure improvements within the Lorn Arc area of Oban. The project is for 25 years, with the first material capital investment incurred during the financial year ended 31 March 2015. During the TIF project period, the Council is entitled to retain the TIF revenue from its NDR revenue, a pro-rata amount of NDR equal to the amount (if any) by which the collected amount exceeds the collectable amount. The Council is required to apply 100% of the TIF revenue towards repayment of the TIF debt. If all projects are delivered and debt is fully paid, the Council can retain 50% of the TIF revenue for further infrastructure investment until the end of the TIF period. Net capital expenditure incurred in the year to 31 March 2024, to be funded from borrowing, in respect of TIF assets totalled £0.016m (2022-23 £0.023m). This is reflected in the “Summary of Capital Expenditure and Financing” outlined within Note 15.4. The total TIF debt to be repaid over the project period, in respect of investment to 31 March 2024, has been calculated in accordance with finance circular No. 4/2014 at £1.027m (2022-23 £1.011m). There is a retention of £0.804m of TIF income during 2023-24 (2022-23 £0.623m) to repay the notional borrowing for TIF. Principal sums accumulated by 2023-24 amount to £0.139m (2022-23 £0.137m) and cumulative interest £0.118m (2022-23 £0.117m) resulting in a net cumulative surplus of £2.551m (2022- 23 £1.749m) which will be used to pay down TIF debt per the TIF agreement and the balance of £1.663m will be placed in earmarked reserves to be used in future years to repay debt costs. Page 214
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 123 39 CASH FLOW STATEMENT – OPERATING ACTIVITIES The Net Cash Flows for Operating Activities can be reconciled to the Net (Surplus)/Deficit on the Provision of Services as follows: 2022-23 2023-24 £'000 £'000 6,047 Net (Surplus)/Deficit on Provision of Services (9,765) 3,356 Statutory Adjustments through Statement of Movement in Reserves 16,341 322 Transfer to/from Other Statutory Reserves 77 288 Increase/(Decrease) in Inventories (87) 6,355 Increase/(Decrease) in Debtors 12,763 (6,503) (Increase)/Decrease in Creditors and Provisions (3,246) (16,041) Earmarked Reserves (1,532) (2,938) Capital Financed from Current Revenue (1,616) (4,277) Loans Fund Repayments (6,111) (1,872) Other Revenue Adjustments 4,996 (21,310) 21,585 11,071 Non Cash Capital 10,743 (5,116) Capital Element of Finance Lease Payments (449) 5,955 10,294 (9,308) Net Cash Flows from Operating Activities 22,114 6,742 Interest Paid on Borrowings 5,097 8,887 Interest Paid on Finance Leases 8,599 (748) Interest Received on Bank Deposits (3,469) 14,881 Net Cash Outflow from Servicing of Finance 10,227 Adjustments to Net (Surplus)/Deficit on the Provision of Service for Non Cash Movements: Adjustments for items included in the Net (Surplus)/Deficit on the Provision of Services that are Investing and Financing Activities: The cash flows for Operating Activities include the following items: 40 CASH FLOW STATEMENT – INVESTING ACTIVITIES The cash flows for Investing Activities include the following items: 2022-23 2023-24 £'000 £'000 25,659 25,221 (17,500) (37,500) (568) (671) (21,914) (25,687) (14,323) Net Cash Outflow from Investing Activities (38,637) Purchase of Property, Plant and Equipment, Investment Property and Intangible and Heritage Assets Proceeds from the Sale of Property, Plant and Equipment and Investment Property Other Receipts from Investing Activities Investments made/(disposed of) during year Page 215
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Notes to the Financial Statements www.argyll-bute.gov.uk ______________________________________________ Page 124 41 CASH FLOW STATEMENT – FINANCING ACTIVITIES The cash flows for Financing Activities include the following items: 2022-23 2023-24 £'000 £'000 (35,228) (31,128) 2,021 (1,072) 5,116 5,280 70,627 54,257 42,536 Net Cash (Inflow)/Outflow from Financing Activities 27,337 Cash Payments for the Reduction of the Outstanding Liabilities relating to Finance Leases and on Balance Sheet PFI Contracts Other Receipts from Financing Activities Repayments of Short and Long Term Borrowing Cash Receipts of Short and Long Term Borrowing Page 216
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Council Tax Income Account www.argyll-bute.gov.uk ______________________________________________ Page 125 The Council Tax Income Account shows the gross income raised from council tax levied and deductions made under the Local Government Finance Act 1992. The resultant net income is transferred to the Comprehensive Income and Expenditure Statement of the Council. 2022-23 2023-24 Actual Actual £'000 £'000 72,340 Gross Council Tax Levied and Contributions in Lieu excluding RSL Second Home Additional Income 76,511 Less: (13,269) Other Discounts and Reductions (14,008) (4,300) Cost of living contribution (grant funded) - (1,411) Provision for Bad and Doubtful Debts (1,490) 53,360 Total 61,013 540 Adjustment to Previous Years' Community Charge and Council Tax 896 53,900 Transfers to General Fund 61,909 Page 217
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Notes to the Council Tax Income Account www.argyll-bute.gov.uk ______________________________________________ Page 126 1. CALCULATION OF THE COUNCIL TAX Dwellings are valued by the Assessor and placed within a valuation band ranging from the lowest “A” to the highest “H”. The Council Tax charge is calculated using the Council Tax Base, Band D equivalent as below. This value is then decreased or increased dependent upon the band of the dwelling. The charge for each band for 2023-24 was as follows: Band Valuation Band £ per year A Up to £27,000 986.13 B £27,001 - £35,000 1,150.49 C £35,001 - £45,000 1,314.84 D £45,001 - £58,000 1,479.20 E £58,001 - £80,000 1,943.50 F £80,001 - £106,000 2,403.70 G £106,001 - £212,000 2,896.77 H Over £212,000 3,624.04 6/9 7/9 8/9 9/9 473/360 585/360 705/360 882/360 Ratio Band D 2. CALCULATION OF THE COUNCIL TAX BASE 2023-24 Council Tax Base A B C D E F G H Total Total Number of Properties 7,447 10,136 9,564 6,415 7,769 4,520 3,035 258 49,144 Less - 1,036 792 1,003 534 637 271 167 52 4,491 - 932 1,145 821 494 471 229 123 6 4,220 Effective Number of Properties 5,479 8,199 7,740 5,388 6,661 4,021 2,746 201 40,434 Band D Equivalent Factor (ratio) 67% 78% 89% 100% 131% 163% 196% 245% 3,653 6,377 6,880 5,388 8,752 6,533 5,378 491 43,452 Add Contribution in lieu in respect of Class 18 dwellings (Band D Equivalent) 518 Nominal Tax Yield 43,970 Less Provision for Council Tax Reduction Scheme 9.08% 3,994 Council Tax Base 2023-24 - Number of Band D equivalents 39,976 Exemptions / Deductions Adjustment for Single Chargepayers Band D Equivalent Number of Properties Page 218
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Non Domestic Rate Income Account www.argyll-bute.gov.uk ______________________________________________ Page 127 The Non-Domestic Rate Income Account is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Non-Domestic Rate Account. The statement shows the gross income from the rates and deductions made under the Local Government (Scotland) Act 1975 as amended by the Local Government Finance Act 1992 on non-domestic property. The net income is paid to the Scottish Government as a contribution to the national non-domestic rate pool. 2022-23 2023-24 Actual Actual £'000 £'000 56,489 Gross rates levied and Contributions in Lieu 68,224 Less: (17,430) Reliefs and other deductions (21,766) - Payment of Interest - (391) Write-off of Uncollectable Debts and Allowance for Impairment (464) 38,668 Total Net Non-Domestic Rate Income 45,994 (3,487) Adjustments for prior years (858) - Business Rate Incentivisation Scheme (BRIS) NDR Income Retained - (647) Tax Incremental Finance (TIF) Scheme NDR Income Retained (804) 34,534 Contribution to National Non-Domestic Rate Pool 44,332 (1,355) Difference between Distributable and Contributable NDR Income amounts (6,687) 33,179 Distribution from Non-Domestic Rate Pool credited to Comprehensive Income and Expenditure Statement 37,645 Page 219
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Notes to the Non Domestic Rate Income Account www.argyll-bute.gov.uk ______________________________________________ Page 128 1. ANALYSIS OF RATEABLE VALUES 2022-23 2023-24 £ £ 9,490,265 Industrial and freight transport subjects 11,125,355 74,472,465 Miscellaneous including Telecomms, Rail, Gas and Electricity Companies 87,231,569 Commercial subjects: 13,921,035 Shops 16,202,980 5,773,370 Offices 6,187,070 8,818,450 Hotels, Boarding Houses etc. 13,919,931 1,916,145 Others 2,395,685 114,391,730 Total Rateable Value 137,062,590 2. NON-DOMESTIC RATE CHARGE 2022-23 2023-24 Pence Pence 49.8p Rate Per Pound 49.8p 1.3p Supplementary Rate Per Pound for Properties between £51,000 and £95,000 1.3p 2.6p Supplementary Rate Per Pound for Properties over £95,000 2.6p 3. CALCULATION OF RATE CHARGE FOR EACH PROPERTY The rates charge for each subject is determined by the rateable value placed upon it by the Assessor multiplied by the Rate per £ announced each year by the Government. Page 220
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Group Accounts - Introduction www.argyll-bute.gov.uk ______________________________________________ Page 129 INTRODUCTION The Code of Practice on Local Authority Accounting in the United Kingdom 2023-24: Based on International Financial Reporting Standards, places a requirement on Councils to consider all their interests in external organisations including limited companies and other statutory bodies. Where the interest is considered to be material, the Council is required to prepare a full set of group accounts in addition to those prepared for Argyll and Bute Council. The Group Accounts are designed to show “a true and fair view” of the financial performance and position of the Council’s Group. THE GROUP ACCOUNTS The Group Accounts comprise the following financial statements: • Group Statement of Comprehensive Income and Expenditure: this statement shows the accounting cost in the year of providing the Council’s services and its share of the results of its associates in accordance with International Financial Reporting Standards, rather than the amount to be funded from taxation. Local authorities raise taxation to cover expenditure in accordance with regulations, and this is different from the accounting cost. The taxation position is shown in the Statement of Movement in Reserves. • Group Balance Sheet: The Balance Sheet is a snapshot of the value at the 31 March 2024 of the assets and liabilities recognised by the Council and its share of the net assets or liabilities of its associates and Common Good funds. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. The net investment or liability in its associates is matched by its share of the reserves of the associates (i.e. its group reserves). • Group Statement of Movement in Reserves: this statement shows the movement in the year on the reserves held by the Council plus its share of the reserves of its associates. The Common Good reserves are also fully consolidated into the Group Accounts. The Council’s reserves are analysed into those which are “Usable Reserves” (i.e. those that can be applied to fund expenditure or reduce local taxation) and other reserves. The Council’s share of the reserves of Associates is an unusable reserve (i.e. it cannot be used to fund expenditure or reduce taxation). The Council’s Statement of Movement in Reserves gives a more detailed analysis of the movement in the Council’s usable and unusable reserves during 2023-24. • Group Cash Flow Statement: The Cash Flow Statement shows the changes in cash and cash equivalents of the Council and its associates Common Good Funds. The statement shows how the Group generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amounts of net cash flow arising from operating activities is a key indicator of the extent to which the operations of the Group are funded by way of taxation and grant income or from the recipients of services provided by the Group. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Group’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the Group. Page 221
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www.argyll-bute.gov.uk ____________________________________________________________________________________ Page 130 Group Statement of Comprehensive Income and Expenditure Gross Expenditure Gross Income Net Expenditure Gross Expenditure Gross Income Net Expenditure £'000 £'000 £'000 Service £'000 £'000 £'000 26,810 18,209 8,601 Chief Executive and Financial Services 1,281 95 1,186 160,700 25,514 135,186 Executive Director - Douglas Hendry 159,449 25,620 133,829 109,504 39,545 69,959 Executive Director - Kirsty Flanagan 137,148 62,322 74,826 174,434 94,948 79,486 Health and Social Care Integration 181,285 103,209 78,076 10,228 2,303 7,925 Other Non-Departmental Costs 9,979 678 9,301 1,577 (837) 2,414 Associates and Joint Ventures Accounted for on an Equity Basis 1,364 2,716 (1,352) 483,253 179,682 303,571 Net Cost of Services 490,506 194,640 295,866 Other Operating Income and Expenditure: (437) Net (Gain)/loss on Disposal of Fixed Assets (262) 1,643 Other Operating Income and Expenditure 1,670 1,206 Total Other Operating Income and Expenditure 1,408 Financing and Investment Income and Expenditure: 10,416 Interest Payable and Similar charges 14,037 (2,966) Interest and Investment Income (4,881) 141 Net Pension Interest Expense (6,596) 7,591 Total Financing and Investment Income and Expenditure 2,560 Taxation and Non-Specific Grant Income: (191,775) General Government Grants (187,193) (22,549) Government Capital Grants and Other Capital Contributions (23,550) (33,826) Non-domestic Rates Redistribution and Retained Non-domestic Rates (TIF & BRIS) (38,449) (53,900) Council Tax Income (61,909) (302,050) Total Taxation and Non-Specific Grant Income (311,101) 10,318 (Surplus)/Deficit on Provision of Services (11,267) (21,104) (Surplus)/Deficit on revaluation of Fixed Assets (10,097) (159,031) Other Post Employment Benefits (Pensions) 165,164 0 Share of Other Comprehensive Income and Expenditure of Associates and Common Good Funds 2 (180,135) Other Comprehensive Income and Expenditure 155,069 (169,817) Total Comprehensive Income and Expenditure 143,802 2022-23 2023-24 Page 222
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Group Balance Sheet www.argyll-bute.gov.uk ________________________________________________ Page 131 £'000 £'000 £'000 £'000 Long Term Assets Property Plant & Equipment 451,018 - Other Land and Buildings 457,369 10,872 - Vehicles, Plant, Furniture and Equipment 11,012 235,076 - Infrastructure Assets 239,372 14,922 - Community Assets 15,051 3,286 - Surplus Assets 4,620 21,440 - Assets Under Construction 35,724 736,614 Total Property Plant & Equipment 763,148 2,345 Heritage Assets 2,569 733 Intangible Assets 888 2,553 Investment Property 2,514 5,880 Long-Term Debtors 5,816 8,579 Long-Term Investments 3,857 139,014 Other Long-Term Debtors (Pensions) - 296 Investment in Associates and Joint Ventures 299 896,014 Total Long Term Assets 779,091 Current Assets 1,145 Inventories 1,059 27,256 Short Term Debtors (Net of Impairment) 38,544 1,554 Assets Held for Sale 1,619 60,000 Short Term Investments 27,500 3,279 Cash and Cash Equivalents (7,923) 8,927 Investment in Associates and Joint Ventures 10,238 102,161 Total Current Assets 71,037 Current Liabilities (11,676) Short-term Borrowing (13,323) (50,725) Short-term Creditors (53,076) (1,450) Provisions (1,665) (5,280) Other Short Term Liabilities (5,336) (45) Liabilities in Associates and Joint Ventures (6) (69,176) Total Current Liabilities (73,406) Long-term Liabilities (132,155) Borrowing Repayable within a Period in Excess of 12 Months (107,458) (107,033) Other Long-term liabilities (101,697) (75) Other Long-term liabilities (Pensions) (19,578) (2,444) Provisions (2,855) - Capital Grant Receipts in Advance (1,564) - Liabilities in Associates and Joint Ventures (78) (241,707) Total Long-term Liabilities (233,230) 687,292 Total Assets less Liabilities 543,492 31 March 202431 March 2023 Page 223
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Group Balance Sheet www.argyll-bute.gov.uk ________________________________________________ Page 132 £'000 £'000 £'000 £'000 Unusable Reserves 174,952 - Revaluation Reserve 180,661 268,788 - Capital Adjustment Account 249,093 (1,871) - Financial Instruments Adjustment Account (1,585) 139,014 - Pensions Reserve (19,578) (7,588) - Accumulated Absences Account (8,272) 573,295 400,319 Usable Reserves 4,503 - Capital Funds 3,197 2,916 - Repairs and Renewals Funds 2,763 86,356 - General Fund Balance 115,741 93,775 121,701 10,791 Group Reserves 11,846 9,431 Common Good Reserves 9,626 687,292 Total Reserves 543,492 31 March 202431 March 2023 The Unaudited Annual Accounts were issued on 27 June 2024 and the Audited Annual Accounts were authorised for issue on 20 December 2024. Kirsty Flanagan Section 95 Officer 20 December 2024 Page 224
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Group Statement of Movement in Reserves www.argyll-bute.gov.uk __________________________________________________________________________________ Page 133 Movements in 2023-24 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Total Unusable Reserves Total Reserves of the Council Total Live Argyll Reserves Usable Total Live Argyll Reserves Unusable £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 2023 (86,356) (2,916) (4,503) (93,775) (573,295) (667,070) (9,103) (1,689) - (9,431) (687,293) (Surplus)/Deficit on Provision of Services (9,765) - - (9,765) - (9,765) (1,352) 49 - (198) (11,266) Other Comprehensive Income and Expenditure (36,038) - - (36,038) 190,855 154,817 2 250 - - 155,069 Total Comprehensive Income and Expenditure (45,803) - - (45,803) 190,855 145,051 (1,350) 299 - (198) 143,802 Total Statutory Adjustments (See Page 55 to 56) 20,630 - (671) 19,959 (19,959) - - - - - Net (Increase)/Decrease before Transfers to Other Statutory Reserves (25,173) - (671) (25,844) 170,896 145,051 (1,350) 299 - (198) 143,802 Transfer to/from Other Statutory Reserves 77 153 1,977 2,207 (2,207) - - - - - - Adjustments permitted by Accounting Standards (4,289) - - (4,289) 4,289 - - (Increase)/Decrease in Year (29,385) 153 1,306 (27,926) 172,976 145,051 (1,350) 299 - (198) 143,802 Balance at 31 March 2024 Carried Forward (115,741) (2,763) (3,198) (121,702) (400,319) (522,020) (10,453) (1,390) - (9,629) (543,492) Council's Share of Reserves of Associates Total Common Good Reserves Total Reserves Other Transfers required by Statute Argyll and Bute Council Usable Reserves Page 225
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Group Statement of Movement in Reserves www.argyll-bute.gov.uk __________________________________________________________________________________ Page 134 Comparative Movements in 2022-23 General Fund Balance Repairs and Renewals Fund Capital Funds Total Usable Reserves Total Unusable Reserves Total Reserves of the Council £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 2022 (96,081) (2,682) (4,414) (103,177) (394,483) (497,660) (11,647) (2,055) 3,550 (9,664) (517,476) Surplus/(Deficit) on Provision of Services 6,047 - - 6,047 - 6,047 2,416 1,625 - 233 10,321 Other Comprehensive Expenditure and Income - - - - (175,454) (175,454) 128 (4,809) - - (180,136) Total Comprehensive Expenditure and Income 6,047 - - 6,047 (175,454) (169,407) 2,544 (3,184) - 233 (169,815) Total Statutory Adjustments (See Page 57 to 58) 6,979 - (568) 6,411 (6,411) - - 3,550 (3,550) - - Net (Increase)/Decrease before Transfers to Other Statutory Reserves 13,026 - (568) 12,458 (181,865) (169,407) 2,544 366 (3,550) 233 (169,815) Transfer to/from Other Statutory Reserves 322 (234) 480 568 (568) - - - - - - Adjustments permitted by Accounting Standards (3,623) (3,623) 3,623 (Increase)/Decrease in Year 9,725 (234) (88) 9,403 (178,810) (169,407) 2,544 366 (3,550) 233 (169,815) Balance at 31 March 2023 Carried Forward (86,356) (2,916) (4,503) (93,775) (573,295) (667,070) (9,103) (1,689) 0 (9,431) (687,292) Other Transfers Total Common Good Reserves Total Reserves Other Transfers required by Statute Argyll and Bute Council Usable Reserves Council's Share of Reserves of Associates Total Live Argyll Reserves Usable Total Live Argyll Reserves Unusable Page 226
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Group Cash Flow Statement www.argyll-bute.gov.uk _____________________________________ Page 135 2022-23 2023-24 £'000 Group Note £'000 10,318 Net Deficit on the Provision of Services (11,267) (26,155) Adjustments to net surplus or deficit on the provision of services for non-cash movements 26,740 5,809 Adjustments for items included in the net surplus or deficit on the provision of services that are investing and financing activities 5,741 (10,028) Net Cash OutFlow from Operating Activities 8 21,214 (13,252) Investing Activities 9 (37,362) 42,536 Financing Activities 10 27,350 19,256 Net (Increase)/Decrease in Cash and Cash Equivalents 11,202 (22,535) Cash and Cash Equivalents at the beginning of the Reporting Period (3,279) (3,279) Cash and Cash Equivalents at the end of the Reporting Period 7,923 Page 227
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Notes to the Group Financial Statements www.argyll-bute.gov.uk _____________________________________ Page 136 1. GROUP ACCOUNTING POLICIES The group accounts are prepared in accordance with the policies set out in Note 1 to the Financial Statements. 2. COMBINING ENTITIES The Council has an interest in a number of Associate Entities. For the purposes of consolidation and incorporation within the Group Accounts recognition has been made of the Council’s significant influence over Joint Boards and other entities. The Associates which have been incorporated are: • Dunbartonshire and Argyll & Bute Valuation Joint Board Under accounting standards, the Council is required to include the results of the above organisations as “associates” because it has “significant influence” over their financial and operating policies. The Council has no shares in or ownership of any of these organisations which are entirely independent of the Council under law and for taxation. Live Argyll is a wholly owned subsidiary of Argyll and Bute Council and is consolidated within the group accounts on a line by line basis. The accounting period for all entities is 31 March 2024. 3. NON MATERIAL INTEREST IN OTHER ENTITIES The Council has an interest in Scotland Excel. Scotland Excel took up the activities of the Authorities Buying Consortium and similar bodies across the Scottish Local Authority sector on 1 April 2008. Renfrewshire Council prepare the financial statements for Scotland Excel in its role as lead authority. Scotland Excel is a not-for-profit organisation funded mainly by the 32 participating Scottish Local Authorities. The Council contributed £0.065m towards Scotland Excel in the 2023-24 financial year. The Council also has an interest in the Highlands and Islands Transport Partnership (HITRANS). The Partnership was established as one of the seven Scottish Regional Transport Partnerships. The Transport (Scotland) Act 2005 requires these Partnerships to prepare Transport Strategies for their regions which will enhance economic well-being; promote safety; social inclusion and equal opportunity; plan for a sustainable transport system; and integrate across boundaries with other partnerships. The Council has an interest in 57 Trust Funds where it acts as sole or custodian trustee. The funds do not represent assets of the Council. These entities are part of the Council’s group for the purposes of Group Accounts. As such it is recognised that the nature of the relationship with these bodies should be included within these notes. However, it has been decided that the Council’s share of the net worth of these entities is not material to a fair understanding of the financial position of the Council, and so they have not been consolidated into the Group Accounts. The Council inherited its interest in these entities following the reorganisation of local government in 1996. 4. ARGYLL AND BUTE INTEGRATION JOINT BOARD The Argyll and Bute Integration Joint Board was established as a body corporate by order of Scottish Ministers on 27 June 2015. The partnership between the Council and NHS Highland has been established in accordance with the provisions of the Public Bodies (Joint Working)(Scotland) Act 2014 and associated Regulations. The Integration Joint Board has responsibility for all health and social care functions relating to adults and children and will oversee the Strategic Planning and budgeting of these, together with corresponding service delivery for the residents of Argyll and Bute. The Council contributed Page 228
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Notes to the Group Financial Statements www.argyll-bute.gov.uk _____________________________________ Page 137 £77.604m towards the Argyll and Bute Integration Joint Board in the 2023-24 financial year. The Council and NHS Highland are required to treat the IJB as a Joint Venture in their annual accounts and recognise a share of the overall surplus or deficit of the IJB for the year. 5. FINANCIAL IMPACT OF CONSOLIDATION The effect of inclusion of the Associates, Joint Ventures, Subsidiaries and Common Good Funds on the Group Balance Sheet is to increase both reserves and net worth by £21.472m. This gives an overall net asset position for the Group of £543.492m. All associates and subsidiaries have prepared their accounts on a ‘going concern’ basis. For the Joint Valuation Board funding arrangements between the Scottish Government and constituent authorities remains assured. In common with these public bodies, the Council’s Group Accounts have been prepared on a ‘going concern’ basis as there is no reason to suggest that future funding will not continue. 6. FURTHER DETAILS ON CONSOLIDATION Live Argyll Live Argyll was established by Argyll and Bute Council and is limited by guarantee and was fully incorporated and commenced trading on 2 October 2017. The Trust is a charitable company registered in Scotland and provides a wide range of services within the Argyll and Bute area including libraries, leisure facilities, halls, sports development and community centres the assets of which are owned by the Council. During 2023-24 Argyll and Bute Council paid £3.835m in the form of a Management Fee to Live Argyll and increased the overall net worth of the Group Balance Sheet by £1.389m. The board is made up of 3 independent board members, 3 Councillors and a Trade Union representative. Dunbartonshire and Argyll and Bute Valuation Joint Board This body was formed in October 1995 at Local Government reorganisation by a Statutory Instrument and is responsible for the maintenance of the electoral, council tax and non-domestic rates registers for Argyll and Bute, West Dunbartonshire and East Dunbartonshire Councils. The Board’s running costs are met by the three Councils. During 2023-24 Argyll and Bute Council contributed £1.254m towards estimated running costs and accounted for £0.084m of Balance Sheet Liabilities within the Group Balance Sheet. The accounts of the Board are subject to independent audit and will be available from the Valuation Joint Board’s website www.saa.gov.uk /dab-vjb/ and West Dunbartonshire Council’s website https://www.west-dunbarton.gov.uk/council/performance-and-spending/service- performance/financial-performance/ from 1 July 2023. The following disclosures are also required for Dunbartonshire and Argyll and Bute Valuation Joint Board because the Council’s interest exceeds the 25% threshold for accounting purposes:- 2022-23 2023-24 £'m £'m Argyll and Bute Council has a 44.41% share of: 2.851 Gross Income 2.861 0.453 Net (Surplus)/Deficit 0.209 0.668 Long Term Assets 0.675 0.972 Current Assets 0.670 (0.101) Liabilities due within one year (0.014) Liabilities due over one year (0.170) Pension Asset/(Liability) (0.175) 1.369 Capital and Revenue Reserves 1.156 Page 229
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Notes to the Group Financial Statements www.argyll-bute.gov.uk _____________________________________ Page 138 7. REPORTING AUTHORITY ADJUSTMENTS A number of adjustments are required to the Council’s Statement of Comprehensive Income and Expenditure (pages 51 to 52) for group accounting purposes. These can be summarised as follows: • All intra-group transactions have been removed from the Group Accounts as part of the subsidiary consolidation process. • The Common Good Funds described in Note 37 of the Notes to the Financial Statements on pages 120 to 121 have been fully consolidated into the Group Accounts. This adjustment increases the net assets and reserves of Argyll and Bute Council’s Group by £9.629m. 8. PRIOR PERIOD ADJUSTMENTS Prior period errors are omissions from, and misstatements in, the authorities financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that a) Was available when the financial statements for those periods were authorized for issue; and b) Could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. In the 2022-23 Group Financial Statements the final audited accounts were not available for either the Valuation Joint Board or Live Argyll at the time of publishing the Councils Annual Accounts. These are now available therefore the 2022-23 Group Accounts have been restated to reflect any changes. The amendments mainly relate to changes in the Pension Asset/Liability. Page 230
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Notes to the Group Financial Statements www.argyll-bute.gov.uk _____________________________________ Page 139 9. GROUP CASH FLOW STATEMENT – OPERATING ACTIVITIES 2022-23 2023-24 £'000 £'000 10,318 Net (Surplus)/Deficit on Provision of Services (11,267) 11,819 Statutory Adjustments through Statement of Movement in Reserves 16,341 322 Transfer to/from Other Statutory Reserves 77 (13,230) Transfer Group Other Comprehensive Income and Expenditure 282 Increase/(Decrease) in Inventories (86) 6,306 Increase/(Decrease) in Debtors 12,869 (6,433) (Increase)/Decrease in Creditors and Provisions (916) (16,041) Earmarked Reserves (1,532) (2,938) Capital Financed from Current Revenue (1,616) (2,477) Loans Fund Repayments (6,111) (3,765) Other Revenue Adjustments 7,714 (26,155) 26,740 10,925 Non Cash Capital 11,021 (5,116) Capital Element of Finance Lease Payments (5,280) 5,809 5,741 (10,028) Net Cash Flows from Operating Activities 21,214 6,742 Interest Paid on Borrowings 5,097 8,887 Interest Paid on Finance Leases 8,599 (748) Interest Received on Bank Deposits (3,469) 14,881 Net Cash Outflow from Servicing of Finance 10,227 Adjustments to Net (Surplus)/Deficit on the Provision of Service for Non Cash Movements: Adjustments for items included in the Net (Surplus)/Deficit on the Provision of Services that are Investing and Financing Activities: The cash flows for Operating Activities include the following items: 10. GROUP CASH FLOW STATEMENT – INVESTING ACTIVITIES 2022-23 2023-24 £'000 £'000 25,637 25,221 (17,500) (37,500) (568) (671) 1,093 1,275 (21,914) (25,687) (13,252) Net Cash Outflow from Investing Activities (37,362) Investments made/(disposed of) during year Purchase of Property, Plant and Equipment, Investment Property and Intangible and Heritage Assets Net Receipts from Investment in Associates and Joint Ventures Proceeds from the Sale of Property, Plant and Equipment and Investment Property Other Receipts from Investing Activities Page 231
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Notes to the Group Financial Statements www.argyll-bute.gov.uk _____________________________________ Page 140 11. GROUP CASH FLOW STATEMENT – FINANCING ACTIVITIES 2022-23 2023-24 £'000 £'000 (35,228) (31,128) 2,021 (1,072) 5,116 5,280 70,627 54,257 - 13 42,536 Net Cash (Inflow)/Outflow from Financing Activities 27,350 Other Payments from Financing Activities Cash Receipts of Short and Long Term Borrowing Other Receipts from Financing Activities Cash Payments for the Reduction of the Outstanding Liabilities relating to Finance Leases and on Balance Sheet PFI Contracts Repayments of Short and Long Term Borrowing Page 232
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Independent Auditors Report www.argyll-bute.gov.uk _____________________________________ Page 141 Independent auditor’s report to the members of Argyll and Bute Council and the Accounts Commission Report on the audit of the financial statements Opinion on the financial statements We certify that we have audited the financial statements in the annual accounts of Argyll and Bute Council and its group for the year ended 31 March 2024 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Statement of Comprehensive Income and Expenditure, the Balance Sheet, the Statement of Movement in Reserves, the Cash Flow Statement, the Council Tax Income Account, and the Non- domestic Rate Account, the Group Statement of Comprehensive Income and Expenditure, the Group Balance Sheet, the Group Statement of Movement in Reserves, the Group Cash Flow Statement and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Council and its group as at 31 March 2024 and of its income and expenditure of the Council and its group for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2023/24 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 18 May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the Council and its group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Council and its group. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Council and its group’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Council and its group’s current or future financial sustainability. However, we report on the Council’s Page 233
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Independent Auditors Report www.argyll-bute.gov.uk _____________________________________ Page 142 arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement We report in our Annual Audit Report the most significant assessed risks of material misstatement that we identified and our judgements thereon. Responsibilities of the Section 95 Officer and the Audit and Scrutiny Committee for the financial statements As explained more fully in the Statement of Responsibilities, the Section 95 Officer is responsible for the preparation of financial statements, that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Section 95 Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Section 95 Officer is responsible for assessing each year the Council and its group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the operations of the Council and its group. The Audit and Scrutiny Committee is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Council and its group; • inquiring of the Section 95 Officer as to other laws or regulations that may be expected to have a fundamental effect on the Council and its group; • inquiring of the Section 95 Officer concerning the Council’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Council and its group’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect Page 234
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Independent Auditors Report www.argyll-bute.gov.uk _____________________________________ Page 143 fraud and other irregularities depends on factors such as the skillfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report We have audited the parts of the Remuneration Report described as audited. In our opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Section 95 Officer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In our opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which we are required to report by exception We are required by the Accounts Commission to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in our Annual Audit Report. Page 235
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Independent Auditors Report www.argyll-bute.gov.uk _____________________________________ Page 144 Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Mark Outterside, Director For and on behalf of Forvis Mazars LLP Bank Chambers 26 Mosley Street Newcastle upon Tyne NE1 1DF 20 December 2024 Page 236
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Glossary of Terms www.argyll-bute.gov.uk _____________________________________ Page 145 Existing Use Value. The market value of a particular Council property, less the difference between the average rental income between public and private sector properties. Expected Rate of Return on Pension Assets. The average rate of return, including both income and changes in fair value but net of scheme expenses, expected over the remaining life of the related obligation on the actual assets held by the Scheme. Fair Value. This is the price at which an asset could be exchanged in an arm’s length transaction less any grants receivable towards the purchase or use of the asset. Financial Asset. A right to future economic benefits controlled by the Council that is represented by cash, an equity instrument of another entity, a contractual right to receive cash from another entity or a financial right to exchange financial instruments under conditions that are potentially favourable to the Council. Financial Instrument. Any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another. Financial Instruments Adjustment Account. This holds the accumulated difference between the financing costs included in the Income and Expenditure Account and the accumulated financing costs required in accordance with regulations to be charged to the General Fund Balance. Financial Liability. An obligation to transfer economic benefits controlled by the Council that is represented by a contractual obligation to deliver cash or another financial asset to another entity or a contractual obligation to exchange financial instruments under conditions which are potentially unfavourable to the Council. Financial Reporting Standard (FRS). Financial Reporting Standards are issued by the Accounting Standard Board and define proper accounting practice for a given transaction or event. Fixed Assets. Tangible assets that yield benefits to the Council and the services it provides for a period of more than one year. Gains/losses on settlements and curtailments. The result of actions to relieve the Council of liabilities or events that reduce the expected future service or accrual of benefits of employees. This is charged or credited to Non Distributed costs in the Comprehensive Income and Expenditure Statement. General Fund Balance. This contains the net surplus on the provision of Council services combined with any balances from previous years and any contributions to other funds or reserves made during the year. Group Accounts. The purpose of group accounts is to show the Council’s interest in organisations and companies within the Financial Statements. The Council’s shares of the assets and liabilities of these other entities are shown in the Group Movement in Reserves Statement, Comprehensive Income and Expenditure Statement and Group Balance Sheet. Government Grants. Assistance by government and inter- government agencies and similar bodies, whether local, national or international, in the form of cash or transfers of assets to an authority in return for past, or future, compliance with certain conditions relating to the activities of the Council. Heritage Assets. Assets which are intended to be preserved in trust for future generations because of their cultural, environmental and historical associations and are held by the Council of the maintenance of heritage. International Accounting Standards (IAS). International Accounting Standards are issued by the International Accounting Standards Board and define proper accounting practice for a given transaction or event. IAS’s take precedence over other accounting standards in the hierarchy of technical accounting standards. International Public Sector Accounting Standards (IPSAS), a set of accounting standards issued by the IPSAS Board for use by public sector entities around the world in the preparation of financial statements. Impairment. A reduction in the value of fixed or financial asset below the valuation held on the balance sheet. Infrastructure Assets. Fixed assets that are inalienable, expenditure on which is recoverable only by continued use of the asset created. Examples of infrastructure assets are highways and footpaths. Intangible Assets. Non-financial assets which do not have physical substance but are identifiable and are controlled by the Council. Interest Cost (Pensions). The expected increase during the period in the present value of the scheme liabilities because the benefits are one period closer to settlement. Inventories. Inventories may comprise the following: goods or other assets purchased for re-sale; consumable stores; raw materials and components purchased for incorporation into products for sale; products and services in intermediate stages of completion; long term contract balances; and finished goods. Liquid Resources. Current asset investments that are readily disposable by the Council without disrupting its business and are either readily convertible to known amounts of cash at or close to the carrying amount, or traded on the active market. Page 237
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Glossary of Terms www.argyll-bute.gov.uk _____________________________________ Page 146 Materiality. Information is included where the information is of such significance as to justify its inclusion, and omission or misstatement could, individually or collectively, influence the decisions or assessments of users made on the basis of the financial statements. National Non-Domestic Rates Pool. All non-domestic rates collected by Council’s are remitted to the national pool and, thereafter, distributed to Councils by the Scottish Government. Net Book Value. The amount at which fixed assets are included in the Balance Sheet, i.e. their historical cost or current value less cumulative amounts provided for depreciation. Net Realisable Value. The open market value of the asset in its existing use, or open market value in the case of non- operational assets, less the expenses to be incurred in realising the asset. Non-Current Assets. Non-current assets are not expected to be realised within 12 months and are held to provide future economic benefits to the Council. Non-operational assets. Are assets held by the Council but not directly occupied, used or consumed in the delivery of services. Examples of non-operational assets are investment properties and assets that are surplus to requirements, pending sale or redevelopment. Officers’ Remuneration. All sums paid to or receivable by an employee and sums due by way of expenses allowances (as far as those sums are subject to UK Income Tax). Operating Leases. A lease other than a finance lease, i.e. a lease which does not transfer the risks and rewards of ownership to the lessee. Operating Assets. All items which derive from events or transactions that fall within the ordinary activities of the Council and which need to be disclosed separately by virtue of their size or incidence to give fair presentation of the accounts. Past Service Costs (Pensions). The increase in the present value of the scheme liabilities related to employee service in prior periods arising in the current period as a result of the introduction of, or improvement to, retirement benefits. Pensions Reserve. The Pensions Reserve absorbs the timing differences arising from different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory provisions. Prior Period Adjustments. Those material adjustments applicable to prior years arising from changes in accounting policies or from the correction of fundamental errors. They do not include normal recurring corrections or adjustments of accounting estimates made in prior years. Public Private Partnerships (PPP). Those partnerships enable the Council to purchase services from the private sector and pay a fee based on pre-defined output criteria. The private sector uses this fee to repay loans taken out to finance the building or refurbishment of the assets. Residual Value. The net realisable value of an asset at the end of its useful life. Related Party Transactions. A related party transaction is the transfer of assets or liabilities, or the performance of services by, to or for a related party irrespective of whether a charge is made. Renewal and Repairs fund. This contains funds credited at the Council’s discretion from the General Fund and is available for use on capital or revenue expenditure on Council assets. Revaluation Reserve. Records unrealised gains arising since 1 April 2007 from holding fixed assets not yet realised through sales. Service Expenditure Analysis (SEA). An analysis which groups together expenditure on services within headings or divisions as defined in the Service Reporting Code of Practice (SeRCOP). Specific Government Grants. These are grants received from Central Government in respect of a specific purpose or service. Unusable Reserves. Those reserves which hold unrealised gains and losses where amounts would only become available to provide services if the assets are sold and reserves that hold timing differences. Usable Reserve. Those reserves which the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use. Useful Life. The period over which the Council will derive benefits from the use of a fixed asset. Page 238
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www.argyll-bute.gov.uk _____________________________________ Page 147 Appendix A Trade Union Facility Time Statement 2023-24 This information is published under the Trade Union (Facility Time Publication Requirements) Regulations 2017 Schedule 2 (Regulation 8) 1. Relevant union officials Total number of employees who were relevant union officials during the relevant period. Number of employees who were relevant union officials during the relevant period Full time equivalent employee number Central Function 21 20.8 Education Function 7 7 Note: The headcount figure for relevant union officials includes all stewards and school-based reps who are elected by their peers to provide first line support for members. 2. Percentage of time spent on facility time Number of employees who were relevant union officials employed during the relevant period spent who spent 0%, 1%- 50%, 51% - 99% or 100% of their working hours on facility time. Percentage of time Number of employees Central Function Education Function 0% 0 3 1% - 50% 19 2 51% - 99% 2 2 100% 0 0 Page 239
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www.argyll-bute.gov.uk _____________________________________ Page 148 3. Percentage of pay bill spent on facility time The percentage of the total pay bill spent on paying employees who were relevant union officials for facility time during the relevant period. Central Function Education Function The total cost of facility time £171,701 £71,016 The total pay bill (Finance figures) £123,318,713 £64,175,618 The percentage of the total pay bill spent on facility time 0.14% 0.11% 4. Paid Trade Union activities Percentage of total paid facility time hours spent by employees who were relevant union officials during the relevant period on paid trade union activities. Central Function Education Function Time spent on paid trade union activities as percentage of total paid facility time hours calculated as: (total hours spent on paid trade union activities by relevant union officials during the relevant period ÷ total paid facility time hours) x 100 0% 0% Page 240
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Argyll and Bute Council Comhairle Earra Gháidheal agus Bhóid Executive Director (Section 95 Officer): Kirsty Flanagan Argyll and Bute Council Kilmory, Lochgilphead, Argyll PA31 8RT Tel: 01546 604268 E-mail: Kirsty.Flanagan@argyll-bute.gov.uk Website: www.argyll-bute.gov.uk Ask For: Kirsty Flanagan Our Ref: KF/CE/SS Mark Outterside Forvis Mazars The Corner Bank Chambers 26 Mosley Street Newcastle upon Tyne NE1 1DF December 2024 Dear Mark Argyll and Bute Council - Audit for the Year Ended 31 March 2024 This representation letter is provided in connection with your audit of the financial statements of Argyll and Bute Council (the Council) and its group for the year ended 31 March 2024 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). I confirm that the following representations are made on the basis of enquiries of management and staff with relevant knowledge and experience (and, where appropriate, inspection of supporting documentation) sufficient to satisfy myself that I can properly make each of the following representations to you. My responsibility for the financial statements and accounting information I believe that I have fulfilled my responsibilities for the true and fair presentation and preparation of the financial statements in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). My responsibility to provide and disclose relevant information I have provided you with: • access to all information of which I am aware that is relevant to the preparation of the financial statements such as records, documentation and other material; Appendix 4Page 241
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• additional information that you have requested from us for the purpose of the audit; and • unrestricted access to individuals within the Council you determined it was necessary to contact in order to obtain audit evidence. I confirm as Section 95 Officer that I have taken all the necessary steps to make me aware of any relevant audit information and to establish that you, as auditors, are aware of this information. As far as I am aware there is no relevant audit information of which you, as auditors, are unaware. Accounting records I confirm that all transactions undertaken by the Council have been properly recorded in the accounting records and are reflected in the financial statements. All other records and related information, including minutes of all management and Board meetings, have been made available to you. Accounting policies I confirm that I have reviewed the accounting policies applied during the year in accordance with International Accounting Standard 8 and consider these policies to faithfully represent the effects of transactions, other events or conditions on the Council’s financial position, financial performance and cash flows. Accounting estimates, including those measured at fair value I confirm that the methods, significant assumptions and the data used by the Council in making the accounting estimates, including those measured at fair value are appropriate to achieve recognition, measurement or disclosure that is in accordance with the applicable financial reporting framework. Contingencies There are no material contingent losses including pending or potential litigation that should be accrued where: • information presently available indicates that it is probable that an asset has been impaired, or a liability had been incurred at the balance sheet date; and • the amount of the loss can be reasonably estimated. There are no material contingent losses that should be disclosed where, although either or both the conditions specified above are not met, there is a reasonable possibility that a loss, or a loss greater than that accrued, may have been incurred at the balance sheet date. There are no contingent gains which should be disclosed. All material matters, including unasserted claims, that may result in litigation against the Council have been brought to your attention. All known actual or possible litigation and claims whose effects should be considered when preparing the financial statements have been disclosed to you and accounted for and disclosed in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). Page 242
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Laws and regulations I confirm that I have disclosed to you all those events of which I are aware which involve known or suspected non-compliance with laws and regulations, together with the actual or contingent consequences which may arise therefrom. We have complied with all aspects of contractual agreements that would have a material effect on the accounts in the event of non-compliance. Fraud and error I acknowledge my responsibility as Section 95 Officer for the design, implementation and maintenance of internal control to prevent and detect fraud and error. I have disclosed to you: • all the results of my assessment of the risk that the financial statements may be materially misstated as a result of fraud; • all knowledge of fraud or suspected fraud affecting the Council involving: ▪ management and those charged with governance; ▪ employees who have significant roles in internal control; and ▪ others where fraud could have a material effect on the financial statements. I have disclosed to you all information in relation to any allegations of fraud, or suspected fraud, affecting the Council's financial statements communicated by employees, former employees, analysts, regulators or others. Related party transactions I confirm that all related party relationships, transactions and balances, have been appropriately accounted for and disclosed in accordance with the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). I have disclosed to you the identity of the Council’s related parties and all related party relationships and transactions of which I are aware. Future commitments I am not aware of any plans, intentions or commitments that may materially affect the carrying value or classification of assets and liabilities or give rise to additional liabilities. Ultimate parent company I confirm that the ultimate parent company for Argyll and Bute Council and its Group is the Scottish Government. Other Matters I confirm in relation to the following matters that: • COVID-19 – I have assessed the continued impact of the COVID-19 Virus pandemic on the Council and the financial statements and those of the Group, including the impact of mitigation measures and uncertainties, and am satisfied that the financial statements and supporting notes fairly reflect that assessment. Page 243
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• Ukraine – I confirm that I have carried out an assessment of the potential impact of the continued conflict in Ukraine on the Council and its Group and there is no significant impact on the Council’s operations from restrictions or sanctions in place. • RAAC - I confirm the Council has assessed the potential impact of Reinforced Autoclaved Aerated Concrete on the Council, and whether there are indications of a need for an impairment of the Council’s property, plant and equipment balances. I confirm there are no such indications of impairment in those assets. Going concern To the best of my knowledge there is nothing to indicate that the Council and its Group will not continue as a going concern in the foreseeable future. The period to which I have paid particular attention in assessing the appropriateness of the going concern basis is not less than twelve months from the date of approval of the accounts. Performance related allocations I confirm that I am not aware of any reason why the Council’s funding allocation limits would be changed. Subsequent events I confirm all events subsequent to the date of the financial statements and for which the Part VII of the Local Government (Scotland) Act 1973 and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code), require adjustment or disclosure have been adjusted or disclosed. Should further material events occur after the date of this letter which may necessitate revision of the figures included in the financial statements or inclusion of a note thereto, I will advise you accordingly. Annual Governance Statement I am satisfied that the Annual Governance Statement fairly reflects the Council and its Group's risk assurance and governance framework and I confirm that I am not aware of any significant risks that are not disclosed within the Annual Governance Statement. Annual Report The disclosures within the Annual Report and the Remuneration Report fairly reflect my understanding of the Council and its Group’s financial and operating performance over the period covered by the financial statements. Unadjusted misstatements I confirm that the effects of the unadjusted misstatements are immaterial, both individually and in aggregate, to the financial statements as a whole. Yours sincerely, Kirsty Flanagan Section 95 Officer Page 244
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ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE FINANCIAL SERVICES 17 DECEMBER 2024 TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY MID-YEAR REVIEW 2024/25 1.0 EXECUTIVE SUMMARY 1.1 The Local Government in Scotland Act 2003 requires the council to have regard to the CIPFA Code of Practice on Treasury Management (revised 2021), the Code. Key reporting requirements in this respect include a Treasury Management Strategy and Annual Investment Strategy Mid-year Review Report. 1.2 This mid-year report, prepared in compliance with the Code, covers the following: • An economic and interest rate update; • A review of the approved Treasury Management and Annual Investment Strategies; • An update on the capital position and Prudential Indicators; • An update on borrowing and investment activities; and • Compliance with Treasury and Prudential Limits 1.3 1.4 The report concludes that • All borrowing and investment activity during the period 1 April to 30 September 2024 has been undertaken in accordance with the approved 2024/25 Treasury Management Strategy and Annual Investment Strategy and the authority has operated within the treasury and prudential indicators set out therein; • The level of internal reserve fund balances has provided an opportunity to defer new external borrowing, whilst also minimising exposure to investment risk. This borrowing strategy will require to be regularly reviewed to achieve optimum value and minimise risk exposure in the longer term; and • The capital planning assumptions underpinning the approved 2024/25 Treasury Management Strategy have been updated. As such, the Prudential Indicators set out within the approved strategy require to be revised. The Audit and Scrutiny Committee is asked to recommend to Council: • Note the report, and the treasury activity during the period 1 April to 30 September 2024; and • Approve changes to the prudential indicators as set out in paragraph 5.2 of the report. Page 245 Agenda Item 4b
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ARGYLL AND BUTE COUNCIL AUDIT AND SCRUTINY COMMITTEE FINANCIAL SERVICES 17 DECEMBER 2024 TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY MID-YEAR REVIEW 2024/25 2.0 BACKGROUND 2.1 The authority operates a balanced budget, which broadly means cash raised during the year will meet its cash expenditure. Part of the treasury management operations ensure this cash flow is adequately planned, with surplus monies being invested in low-risk counterparties, providing adequate liquidity initially before considering optimising investment return. 2.2 The second main function of the treasury management service is the funding of the authority’s capital investment plans. These capital plans provide a guide to the borrowing need of the authority, essentially the longer-term cash flow planning to ensure the authority can meet its capital spending obligations. This management of longer-term cash may involve arranging long or short-term loans, or using longer term cash flow surpluses, and on occasion existing debt may be restructured to meet authority risk or savings objectives. 3.0 INTRODUCTION 3.1 The Local Government in Scotland Act 2003, and supporting regulations, requires the authority to have regard to the CIPFA Code of Practice on Treasury Management (revised 2021), the Code. The Code requires full Council to receive an annual Treasury Management Strategy Statement, including the Annual Investment Strategy, for the year ahead; a Mid-year Review Report; and an Annual Report following the year end. 3.2 The regulatory environment requires the authority to delegate responsibility for the monitoring and scrutiny of treasury management activities, strategy and policies to a specific named body. For this authority, the appropriate delegation body is the Audit and Scrutiny Committee. Treasury management training was delivered to members of the committee during October 2024, to support its scrutiny role 3.3 Prudential and Treasury Indicators are designed to ensure capital investment plans are affordable, prudent and sustainable. There are clear linkages between the council’s capital planning and treasury management strategy, with the financing costs arising from capital investment plans considered as part of the overall revenue budget outlook. Page 246
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3.4 4.0 This mid-year report, prepared in compliance with the Code, covers the following: • An economic and interest rate update; • A review of the approved Treasury Management and Annual Investment Strategies; • An update on the capital position and Prudential Indicators; • An update on borrowing and investment activities; and • Compliance with Treasury and Prudential Limits RECOMMENDATIONS The Audit and Scrutiny Committee is asked to recommend the following to Council: • Note the report, and the treasury activity during the period 1 April to 30 September 2024; and • Approve changes to the prudential indicators as set out in paragraph 5.2 of the report. 5.0 DETAIL 5.1 5.1.1 Economic and Interest Rate Update The authority’s appointed treasury advisors, Link Group provide updates on the economic position. The third quarter of 2024 (July to September) saw: • GDP growth stagnating in July, however, this points more to a mild slowdown in GDP growth than a sudden drop back into a recession; • Further easing in wage growth, which will be welcomed by the Bank of England as a sign that labour market conditions are continuing to cool. On an annualised basis, average earnings growth eased from 3.0% to 1.8%, its lowest rate since December 2023; • CPI inflation hit its target 2.0% in June before edging above it to 2.2% in July and August; and • Bank rate was lowered from 5.25% to 5.00% in August 2024. 5.1.2 The 2024/25 strategy included market assumptions for long term 5, 10, 25 and 50 year PWLB interest rates decreasing to 4.2%, 4.2%, 4.5% and 4.3% respectively during 2024/25, with short term interest rates (Bank Rate of 5.25%) forecast to decrease to 4.00% during 2024/25. 5.1.3 The latest long term PWLB and short term rate forecasts, provided by Link Group, are outlined below. This sets out a view that medium and long-dated interest rates will fall back over the next year or two. Bank Rate is expected to continue to fall steadily throughout 2025, before levelling at around 3.0% towards the end of 2026. Page 247
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(a) Long term PWLB rates: 2024/25 2025/26 2026/27 PWLB rates Current % Low % High % Low % High % 5 year 5.0 3.9 4.3 3.8 3.9 10 year 5.2 4.1 4.4 3.9 4.1 25 year 5.6 4.4 4.8 4.3 4.4 50 year 5.4 4.2 4.6 4.1 4.2 (Based on the Certainty Rate, the standard rate minus 20 bps) (b) Short term borrowing 2024/25 2025/26 2026/27 Current % Low % High % Low % High % Bank Rate 5.00 3.25 4.00 3.00 3.25 5.2 Treasury Management Strategy Review The Treasury Management Strategy for 2024/25 was approved by Council on 22 February 2024. In light of movements in capital planning assumptions from those underpinning the previously approved strategy, the Prudential Indicators previously agreed require revision. The proposed changes are set out below: Prudential Indicator 2024/25 Original £m Revised Prudential Indicator £m Capital Expenditure 64 82 Capital Financing Requirement 351 366 Operational Boundary for External Debt 352 367 Authorised Limit 360 375 Page 248
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5.3 5.3.1 Capital Position Update This part of the report is structured to update: • The authority’s capital expenditure plans; • How these plans are being financed; • The impact of the changes in the capital expenditure plans on the prudential indicators and the underlying need to borrow; and • Compliance with the limits in place for borrowing activity. 5.3.2 Prudential Indicator for Capital Expenditure The 2024/25 strategy estimated gross capital expenditure of £64.417m for the year. This estimate has now been updated to reflect revised assumptions within the council’s current capital plan. The 2024/25 probable outturn gross capital expenditure has been revised to £81.532m. The increase mainly relates to slippage from 2023/24 into 2024/25; and the requirement to recognise leasing arrangements as finance leases, through adoption of IFRS16 from 1 April 2024. This position is monitored on an ongoing basis, as part of the Capital Plan Monitoring, regularly reported to Policy and Resources Committee. The followings table shows the current revised estimates for gross capital expenditure incurred during 2024/25. Capital Expenditure by Service 2024/25 Original Estimate £000 2024/25 Revised Estimate £000 Education 5,006 8,690 Facility Services - Shared Offices 3,343 1,802 Major Projects/CHORD 2,461 4,509 ICT 1,593 1,611 Roads and Infrastructure 46,640 47,219 Development and Economic Growth 2,653 7,049 Live Argyll 636 1,125 Health and Social Care Partnership 2,085 3,527 Finance Lease Recognition (IFRS16) 0 6,000 Total Capital Expenditure 64,417 81,532 5.3.3 Financing of the Capital Plan The 2024/25 strategy estimated gross capital expenditure of £64.417m for the year, as outlined above, with £43.270m to be financed from new borrowing. As a result of the revised assumptions within the council’s current capital plan, including an increase the level of funding available from earmarked reserves/revenue, the new net borrowing requirement has been revised to £40.347m. It is worth noting that assets acquired through finance leases result in corresponding lease Page 249
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liabilities, repayable over the term of the lease, rather than being financed through direct borrowing. 5.3.4 The table below outlines the expected financing arrangements of the above capital expenditure plans. The borrowing element increases the council’s underlying indebtedness (Capital Financing Requirement), although this will be reduced in part by revenue charges for the repayment of debt (principal repayment). This direct borrowing need may also be supplemented by the replacement of maturing debt and to meet other treasury cashflow requirements. Capital Expenditure 2024/25 Original Estimate £000 2024/25 Revised Estimate £000 Gross Capital Expenditure 64,417 81,532 Financed by: Capital Receipts 1,689 612 Capital Grants 8,415 8,544 Revenue/Reserves 11,043 26,091 Total Financing 21,147 35,247 Borrowing Requirement 43,270 46,285 5.3.5 Changes to the Prudential Indicators for the Capital Financing Requirement (CFR), and the Operational Boundary for External Debt The level of capital activity also impacts the Capital Financing Requirement (CFR), the underlying need to borrow for capital purposes. In approving its strategy for 2024/25, Council noted an estimated CFR of £320m as at 31 March 2024 and £351m as at 31 March 2025 (£31m movement). The actual CFR as at 31 March 2024, reported in the 2023/24 annual accounts, was £332m, while the current projected CFR as at 31 March 2025 has been revised to £366m (£34m movement). The estimated increased movement of £3m in the CFR during the year reflects the increase in estimated borrowing outlined in the table above. The table below shows the CFR, together with the expected debt position over the period, which is termed the Operational Boundary. Page 250
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*Note: On balance sheet PFI schemes and finance leases etc. 2024/25 Original Estimate £m 2024/25 Revised Estimate £m Prudential Indicator - Capital Financing Requirement Closing CFR 351 366 Net Movement in CFR 31 34 Prudential Indicator – the Operational Boundary for external debt Borrowing 246 261 Other Long Term Liabilities* 106 106 Total Debt (year end position) 352 367 5.3.6 5.3.7 Limits to Borrowing Activity The first key control over the treasury activity is a prudential indicator to ensure that over the medium term, net borrowing (borrowings less investments) will only be for a capital purpose. Gross external borrowing should not, except in the short term, exceed the total of CFR in the preceding year plus the estimates of any additional CFR for 2024/25 and next two financial years. *Note: Includes on balance sheet PFI schemes and finance leases etc. The level of ‘under borrowing’ outlined in the table above reflects the level of internal borrowing, as described in paragraph 5.4.4. 2024/25 Original Estimate £m 2024/25 Revised Estimate £m Borrowing 191 130 Other Long Term Liabilities* 106 106 Total Debt 297 236 CFR* (year end position) 351 366 Under / (Over) Borrowing 54 130 5.3.8 A further prudential indicator controls the overall level of borrowing. This is the Authorised Limit which represents the limit beyond which borrowing is prohibited and needs to be set and revised by Members. It is the expected maximum borrowing need with some headroom for unexpected movements. This is the statutory limit determined under section 3 (1) of the Local Government Act 2003. Page 251
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*Note: Includes on balance sheet PFI schemes and finance leases etc. Authorised limit for external debt 2024/25 Original Indicator £m 2024/25 Revised Indicator £m Borrowing 251 266 Other Long Term Liabilities* 109 109 Total 360 375 5.3.9 The increase of £15m in the Authorised Limit reflects the increase in the estimated CFR as at 31 March 2025, as a result of increases in the actual 2023/24 and estimated 2024/25 capital position, from that estimated within the approved 2024/25 Strategy, as outlined in paragraph 5.3.5. 5.4 5.4.1 Borrowing activity PWLB loan principal of £0.840m has been repaid in the 6 month period to 30 September 2024, with a further £0.840m due to be repaid by 31 March 2025. These repayments of principal relate to a 10 year PWLB loan (original principal £21m), which was taken on a fixed Equal Instalments of Principal (EIP) basis. All other PWLB loans will be repayable on maturity. 5.4.2 The authority has one outstanding market or LOBO loan for £5.255m, with an interest rate of 4.75%, maturing 2048, with call dates every 6 months. This loan was not recalled at the 22 June 2024 call date. There is potential for this loan to be recalled before the end of the financial year, at the next call date of 22 December 2024. 5.4.3 Any PWLB or LOBO loans maturing during the year will ultimately require replacement borrowing to maintain the council’s cashflow position. In addition, the council will continue to actively monitor potential restructuring opportunities, in order to generate cash savings, at a minimum risk, and improve the balance of the loan debt maturity profile. 5.4.4 While there is an underlying need to borrow in respect of the Capital Financing Requirement and the replacement of maturing debt, this may involve arranging short or long term loans from external PWLB or market sources, or borrowing from internal reserve fund balances on a temporary basis, dependent on fund balance forecasts. The level of internal reserve fund balances has provided an opportunity to defer new external borrowing. The table at paragraph 5.3.6 shows the extent to which the council has utilised internal funds in lieu of borrowing. This is a prudent and cost effective approach in the current economic climate but will require ongoing monitoring. 5.4.5 As at 30 September 2024, the council’s debt totalled £113.562m, as summarised in the table below. Page 252
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Debt Amount £000 Annual Average Interest Rate Share of Total Debt Public Works Loans Board 108,037 4.42% 95.13% Market Loans (LOBO) 5,255 4.75% 4.63% Temporary Loans* 270 4.41% 0.24% Total Debt 113,562 4.44% 100.00% *Note: This represents short term borrowing from various institutions. 5.4.6 During the period 1 April to 30 September 2024, no new long term borrowing has been undertaken, due to the levels of internal balances held and the current interest rate market. Long term borrowing rates have been relatively high but forecast to steadily fall throughout next year and 2026/27, as outlined at paragraph 5.1.3. As such, any new borrowing required will be taken on a short term basis, to limit the exposure to the current high long term interest rates and also minimise investment risk. Further, as outlined in paragraph 5.3.2, the capital plan is being kept under regular review, and as such, our borrowing strategy will also be regularly reviewed to achieve optimum value and minimise risk exposure in the long term. 5.5 Debt Rescheduling Debt repayment and rescheduling opportunities have increased over the course of the past six months and will be considered if giving rise to long term savings. However, no debt repayments or rescheduling have been undertaken to date in the current financial year. 5.6 Compliance with Treasury and Prudential Limits It is a statutory duty for the authority to determine and keep under review the affordable capital expenditure limits. In the current financial year to 30 September 2024, the authority has operated within the treasury and prudential indicators set out in the approved Treasury Management Strategy for 2024/25. The Section 95 Officer confirms that no difficulties are envisaged for the current or future years, in complying with these indicators. All treasury management operations have also been conducted in full compliance with the authority's Treasury Management Practices. 5.7 5.7.1 Annual Investment Strategy Review In accordance with the CIPFA Treasury Management Code of Practice, the council’s approved Annual Investment Strategy sets out the council’s investment priorities as being: • Security of capital • Liquidity • Yield 5.7.2 The authority will aim to achieve the optimum return (yield) on its investments, commensurate with proper levels of security and liquidity and with the authority’s risk appetite. The risk appetite of the council is low, prioritising security and Page 253
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liquidity. In the current economic climate, it is considered appropriate to keep investments short term to cover cash flow needs, but also to seek out value available in longer periods with high credit quality financial institutions, using the Link suggested creditworthiness approach, including a minimum sovereign credit rating and Credit Default Swap (CDS) overlay information. 5.8 5.8.1 Investment Activity The council’s Section 95 Officer confirms that the principles of the investment strategy have been adhered to. During the period ended 30 September 2024, investments have only been made in line with the approved limits for specific investment instruments, and in accordance with the creditworthiness approach. 5.8.2 The limit of investments has reflected the level of available council reserve balances, together with provision for managing the council’s day to day cash flow requirements. As at 30 September 2024, the council’s investments totalled £63.932m, as summarised in the table below. Institution Type Amount £000 Return Clydesdale Bank Instant Access 632 4.90% Various Institutions Fixed Deposits 25,000 5.08% Money Market Funds (Various) Call Accounts 38,300 5.01% Total Investments 63,932 5.04% 5.8.3 The average rate of return on the above is 5.04%, with an average investment duration of 108 days. This compares to the benchmark SONIA rate of between 4.96% (3 month duration) and 5.06% (6 month duration) over the last 6 months. The Bank Rate started the year at 5.25% before being lowered to 5.00% in August. 6.0 CONCLUSION 6.1 6.2 All borrowing and investment activity during the period 1 April to 30 September 2024 has been undertaken in accordance with the approved 2024/25 Treasury Management Strategy and Annual Investment Strategy and the authority has operated within the treasury and prudential indicators set out therein. The level of internal reserve fund balances has provided an opportunity to defer new external borrowing, whilst also minimising exposure to investment risk. This borrowing strategy will require to be regularly reviewed to achieve optimum value and minimise risk exposure in the longer term. 6.3 The capital planning assumptions underpinning the approved 2024/25 Treasury Management Strategy have been updated. As such, the Prudential Indicators set out within the approved strategy require to be revised. Page 254
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7.0 IMPLICATIONS 7.1 Policy - None 7.2 Financial – Provides an update on 2024/25 treasury management activity and the approved strategy 7.3 Legal - None 7.4 HR - None 7.5 Fairer Duty Scotland: 7.5.1 Equalities – protected characteristics - None 7.5.2 Socio-economic Duty - None 7.5.3 Islands - None 7.6 Climate Change - None 7.7 Risk – Provides an overview of treasury management and investment risk 7.8 Customer Service - None 7.9 The Rights of the Child (UNCRC) - None Kirsty Flanagan Executive Director/S95 Officer 29 November 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services For further information contact: Carolyn Earl, Acting Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk Page 255
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 20 DECEMBER 2024 AUDIT AND SCRUTINY COMMITTEE ANNUAL REPORT 2023/24 1. SUMMARY 1.1 The purpose of this report is to provide the Chair of the Audit and Scrutiny Committee’s (the Committee) annual overview of the Committee’s activity during the financial year 2023/24 and a summary of key developments since the commencement of 2024/25. It sets out how the Committee has fulfilled its remit and provides assurances to the Council. 2. RECOMMENDATIONS 2.1 Review and endorse the Chair’s Annual Report. 3. DETAILS 3.1 It is important that the Committee fully complies with best practice guidance on Audit Committees to ensure it can demonstrate its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council. The Chartered Institute of Public Finance and Accountancy (CIPFA) issued an updated guidance note Audit Committees Practical Guidance for Local Authorities and Police 2022 Edition which incorporates CIPFA’s Position Statement: Audit Committees in Local Authorities and Police. This sets out CIPFA’s view of the role and functions of an Audit Committee. The CIPFA Audit Committees Guidance includes the production of an annual report on the performance of the Audit Committee against its remit for submission to the Council. 4. CONCLUSION 4.1 The Audit and Scrutiny Committee Annual Report 2023/24, which is appended to this report as Appendix 1, provides assurance to full Council over the activity of the Committee. 5. IMPLICATIONS 5.1 Policy: None 5.2 Financial: None 5.3 Legal: None 5.4 HR: None 5.5 Fairer Scotland Duty: None 5.5.1 Equalities: protected characteristics: None 5.5.2 Socio-Economic Duty: None 5.5.3 Islands Duty: None Page 257 Agenda Item 5
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5.6 5.7 Climate Change: Risk: None None 5.8 5.9 Customer Service: The Rights of the Child (NCRC) None None For further information please contact Internal Audit (01546 604108) Paul Macaskill Chief Internal Auditor 3 December 2024 Appendices: 1. Audit and Scrutiny Committee Chair Annual Report 2023/24 Page 258
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1 Appendix 1 - Audit and Scrutiny Committee Chair Annual Report 2023/24 Introduction by the Chair of Audit and Scrutiny Committee This report provides an overview of the Audit and Scrutiny Committee’s (the Committee) activity during the financial year 2023/24 and a summary of key developments since the commencement of 2024/25. In 2023/24 the Committee met quarterly on a hybrid approach with the following as appointed members: Martin Caldwell (Chair) Daniel Hampsey Reeni Kennedy-Boyle Graham Hardie Andrew Vennard Jim Lynch (Vice Chair) Dougie McFadzean Committee meetings were also attended by appropriate representatives of the Council including the Chief Internal Auditor (CIA) and our appointed External Auditors, Mazars. Other Council Officers attend as and when appropriate including the Chief Executive and the Head of Customer Support Services who attends regularly to advise the Committee on issues relating to performance management. Concerns have been expressed about the service experienced by the Council from Mazars, as part of their External Audit appointment, and these have been escalated in order that lessons can be learned for future audit years. It is understood that some of the reasons associated with the service provided to the Council included difficulties in recruiting professional audit staff due to sector shortages, and delays in new staff starting when appointed. Whilst these issues have caused significant inconvenience to officers, particularly within Finance, it is important that appropriate service standards are achieved going forward in order to prevent a repeat of such experiences in 2024/25. In early April of 2024, the Council voted for a change of leadership and subsequently appointed a new Leader and Provost. This also has resulted in previous Committee membership established by the Council to be reset and new appointments to Committees of the Council, including that to the Audit and Scrutiny Committee. This has resulted in only two changes in membership and both individuals received formal training in their respective roles on the Committee. The Council’s Internal Audit section is subject to an independent External Quality Assurance Assessment which is mandatory under the Public Sector Internal Audit standards (PSIAS) every five years. I was pleased to note that the service was deemed compliant in all 14 areas of assessment. This assessment is augmented with annual reviews which are reported to the Committee, and I am again reassured that full compliance has been maintained in 2023/24. It is important that the service provided by Internal Audit maintains the highest standards which helps the Committee in receiving high quality reports for its assurance purposes. Furthermore, this supports the wider governance operating within the Council. I continued to work closely with the CIA and have built up a good and productive relationship which I have no doubt will continue under the Committee’s new Chair. In looking forward to 2024/25 and beyond, significant pressures continue as a result of financial settlements and this has been particularly compounded as a result of Page 259
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2 inflationary pressures, together with the risk of unfunded or partly funded pay settlements and the lack of opportunities to focus funding received to areas where resources may be best used due to ring fencing of specific allocated resources which continues to present a complex backdrop within local government. These pressures are likely to remain and will continue to add an element of uncertainty in relation to the overall financial picture affecting the Council. The Council continues to undertake appropriate medium to long term financial planning using a scenario modelling approach which helps to provide Members with a thorough overview of the implications of funding and cost pressures. I am however satisfied that the Council continues to embrace these challenges in a strategic, capable, and productive manner. Janice Wason Hall – Chairperson Martin Caldwell – Former Chairperson Page 260
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3 1. Audit and Scrutiny Committee’s Effectiveness and Impact 1.1 The Committee’s role is to ensure that the Council’s internal control framework and governance arrangements are operating effectively. In order to fulfil this role a range of reports are provided to the Committee during the year. I am satisfied that the frequency, content and detail of reports provided to the Committee, allow myself and fellow members to adequately fulfil this role. 1.2 In March 2023 Internal Audit presented their annual audit plan, setting out their approach to the 2023/24 audit of the Council and in June 2023 Mazars outlined their planned approach to their work reflecting their statutory duties and risk-based approach. The respective audit plan and approach were considered by the Committee and accepted. 1.3 During 2023/24 the CIA has continued to develop our approach to audit and scrutiny. Particular developments which have furthered the effectiveness of both Internal Audit and the Committee are: • The continued and successful work of the Counter Fraud Team. • The approach to Scrutiny continues to develop and work to complete the ‘Fly Tipping’ review in 2023/24 was concluded. • The CIA engaged with Members of the Committee as part of the planning process for the 2023/24 audit plan. • An external assessment has been undertaken during 2022/23 in terms of compliance with the Public Sector Internal Audit Standards (PSIAS) after a portfolio of evidence has been prepared and submitted. This independent assessment identified that the Internal Audit service was in full compliance with all 14 areas of criteria. This was supplemented by the annual self- review in 2023/24 which confirmed that standards have been maintained to these levels. 2. Assurances Internal Audit Assurance 2.1 Internal Audit is a key source of assurance for both Members and management on the effectiveness of the control environment. The Committee has a responsibility for ensuring that Internal Audit is effective in the provision of this assurance. I am content that the minor amendments made to the 2023/24 audit plan as a result of unavailability of staff and unscheduled work within the Council will be further risk assessed and considered as part of the future audit planning process. I am content with the assurance provided by the CIA that sufficient work has been undertaken to allow him to provide an opinion on the Council’s systems of governance and internal control. Throughout the year, in my opinion, clear assurance judgements are provided, underpinned by an appropriate evidence base and, where appropriate, include sound management advice and guidance. 2.2 The Committee has received regular reports and information from the CIA including: • risk based internal audit annual plan • regular progress reports • annual report, in line with PSIAS, which provided the CIA’s independent annual opinion on the effectiveness of the Council’s risk management, Page 261
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4 internal control and governance processes. 2.3 Exhibit 1 shows an analysis of assurance opinions provided by internal audit in the three-year period 2020/21 – 2023/24. Whilst there have been minor fluctuations year to year, the important trend identified is a fall in audits issued that have been providing limited assurance. In addition, there has been an increase in the number of audits classified as providing a substantial level of assurance in 2023/24, there were none classified as being limited. For these, and all other audit reports, management have accepted 100% of audit recommendations and action plans have been agreed with a robust follow-up system in place with progress presented to the SMT on a quarterly basis and to the Committee as a standard agenda item. Exhibit 1 – Audit Assurances (2021/22-2023/24) 2.4 The Committee has a clear role in relation to oversight of the internal audit function; specifically in relation to overseeing its independence, objectivity, performance and professionalism. I am pleased to advise, as Chair of the Committee, that I am satisfied that Internal Audit is effective and activity is undertaken in accordance with relevant standards. External Audit Assurance 2.5 External Audit is an essential part of the process of accountability and assurance for public funds, providing an independent opinion on the financial statements, and reviewing aspects of governance and financial management. Working closely with Internal Audit, the external audit programme ensures that statutory responsibilities are delivered, without the duplication of audit work. The Council’s appointed external auditors are Mazars. 2.6 The audit of the Council’s financial statements has been substantially concluded and an ‘unqualified’ opinion has been provided. Consequently, this should be a basis of assurance which the Committee can take as part of its duty as those charged with governance. Whilst at the time of writing this report the 2022/23 Trust Funds were still not signed off which is disappointing, we expect these to be presented by Mazars to the Committee in due course. 7 6 3 2 0 8 7 4 1 0 5 8 4 0 0 0 1 2 3 4 5 6 7 8 9 High Substantial Reasonable Limited No Assurance 2021/22 2022/23 2023/24 Page 262
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5 2.7 The Council was subject to a Best Value review in 2019/20 which highlighted that good progress was made by the Council since the last inspection in 2015, specifically the significantly improved relationships amongst elected members and between members and officers and the Council’s sound approach to financial planning. All of these points and actions have now been addressed and a final report was prepared and presented to the Audit and Scrutiny Committee in March 2023. This should provide further assurance that these key issues have been addressed by the Council. Further development in performance and reporting has been introduced and a seminar for the Committee has been arranged in order that the latest position has been conveyed to the Committee which has oversight. 3. Risk Management 3.1 The CIA performs an annual strategic risk register assurance mapping exercise which enables the Committee to assess the levels of assurance it can take over the activity undertaken by the Council to manage its strategic risks. This is complemented by the Chief Executive presenting the Strategic Risk Register to the Committee on an annual basis, to allow the Committee to further scrutinise the approaches being taken to manage risk. 3.2 In 2023/24 a review of Risk Management was undertaken and this provided an audit opinion that a high level of assurance can be taken. This is the highest level of audit opinion and should further provide additional assurance on the Risk Management arrangements within the Council. 4. Independence 4.1 To assist in preserving the Committee’s independence, measures are in place including: • the appointment of an independent chair • observation of the Internal Audit Charter which specifies the independence of the CIA and the wider audit team • the non-political approach of the committee • the active involvement of the external auditors • clear terms of reference aligned to CIPFA’s Role of the Audit Committee Guidance 5. Scrutiny 5.1 During 2023/24 the Committee undertook work on completing the Fly-Tipping scrutiny review as part of our scrutiny plan. This report was presented to the Audit and Scrutiny Committee in March 2024. These and previous reports were well received by the Committee and widened the understanding of the complexities and challenges faced by both staff and the community in specific areas and where these reports will help allow continuous improvement as a Council. 5.2 The benefits of scrutiny are twofold; helping to understand, what can often be multifaceted and procedurally complex issues due to legislation but also to help consider ways to improve and develop to make any processes more understandable and/or streamlined where that is at all possible. Page 263
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6 5.3 Scrutiny work will continue in 2024/25, it is anticipated that work will focus on the Councils Complaints processes. This review will commence in late autumn of 2024, allowing the new Committee to settle into its role and build up experience in this area of undertaking scrutiny reviews. Going forward Members may wish to start considering potential areas for scrutiny for 2025/26, it is anticipated that potential areas will be collated towards the end of autumn as part of this process. 6. Counter Fraud Team (CFT) 6.1 The Council has an effective CFT having been made permanent after a trial period with both officers having completed the CIPFA (Chartered Institute of Public Finance and Accountancy) Accredited Counter Fraud Specialist Course meaning they are fully accredited counter fraud investigators. This further strengthens the Council’s commitment to protecting the public purse. 6.2 Since the inception of the CFT, regular reporting to the Audit and Scrutiny Committee takes place, and latterly in June 2024, the CFT reported that proactive and targeted work in this area has resulted in a cumulated £1.12M (ending April 2024) being rebilled and that to date £797K (ending April 2024) has been recovered. The ongoing work of the CFT in both recovery and also in its deterrent effect, sends a strong message that the Council will take all reasonable steps it can to identify error and fraud and also take appropriate action to recover monies that are due. Regular reports are presented to the Committee each quarter in relation to the work of both Internal Audit and the Counter Fraud function. 6.3 Local visits throughout Argyll and Bute were undertaken in the year and this will form part of a rolling programme of visits going forward, focusing on maximising the income due to the Council. In addition, the CFT are raising awareness of the Council’s zero tolerance to fraud and this will help act as a deterrent to fraud being perpetrated in the first place. I expect further visits to be equally successful and so far in 2024/25 this has proved to be the case. It is pleasing to note that the ongoing work in relation to counter fraud clearly demonstrates the Council both in its commitment to recovering sums of revenue due through error or fraud but also in the wider context of good governance. 7. External Quality Assurance Assessment – Internal Audit 7.1 The mandatory Public Sector Internal Audit Standards (PSIAS), published in April 2013 and updated in March 2017, apply to all internal audit service providers in the UK public sector. To supplement the PSIAS, and provide specific guidance surrounding its application within a local government setting, the Chartered Institute of Public Finance and Accountancy (CIPFA) compiled a Local Government Application Note, (LGAN) which was updated in 2019. This requires all internal audit providers to have an independent external assessment of these standards in application within their service provision. New Global Standards have been developed which come into effect in 2025 and on the publication of the updated PSIAS, a gap analysis will be undertaken to identify any necessary changes that may be required to be implemented. 7.2 An independent report on the Council’s Internal Audit Service was prepared Page 264
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7 and presented to the Audit and Scrutiny Committee in March 2023. It is pleasing and reassuring to note that the assessor found that in all 14 areas of assessment the Council’s Internal Audit Service fully conforms to the standards. The assessor also identified that the team are highly qualified with a training plan in place to address any skills gaps and that they deliver a high- quality service for the Council which is evident by the questionnaires returned after the completion of each review. 7.3 This was the first time the Council’s Internal Audit Service obtained a fully conforms opinion in all 14 areas of assessment. The independent report demonstrates the importance of having a fully resourced and functioning service which provides assurance to senior management and to those charged with governance responsibilities, specifically, the Audit and Scrutiny Committee. This position should provide substantial assurance to the Council and Members of the Audit and Scrutiny Committee. Annual internal assessments will continue until the next scheduled external assessment in 2028. 8. Looking Forward 8.1 I intimated my intention to stand down as Chair after having held this independent position for over a decade and continued to provide cover until a suitable replacement was found. I was pleased to note that the Council has subsequently identified a new independent Chair to lead the Committee, Janice Wason-Hall, who will take over the role commencing financial year 2024/25 and I wish her every success and enjoyment as I have had in the role. I will be pleased to support that transition and assist the new Chair to settle into her new role. It has also been a pleasure to have worked with our Vice Chair, Councillor Jim Lynch and acknowledge the support he has provided to me in this role. I now wish Jim Lynch every success as he leaves the Committee and takes up the role of Leader of the Council. 8.2 In 2024/25 and onwards the Committee will consider potential options/topics for scrutiny reviews and as a Committee we will continue to implement and further develop our scrutiny approach. 8.3 This focus on continuous improvement is equally applicable to the audit element of the Committee and we will continue to work with the CIA and, where appropriate, our newly appointed External Auditors Mazars, to identify opportunities to further develop the skillset and expertise of both the Committee and the internal audit department to facilitate effective challenge and scrutiny. 8.4 The Counter Fraud Team will continue to focus their resources on specific concerns across the local authority area seeking to recover monies owed and due to the Council in accordance with its policies. 8.5 The Council continue to provide the audit services to the HSCP and were awarded the contract for a period of three years commencing 1 April 2024. A formal service level agreement is in place to reflect the new contract. In 2023/24, a plan of audit coverage was agreed and presented to their Audit and Risk Committee. 8.6 The Internal Audit team are focused, professional and work continues to promote better resilience within the team through the opportunities of Page 265
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8 professional training schemes and other forms of staff development. This approach fits in well with the Council’s programme of ‘Growing our Own’ in order that the Council has skilled workforce for the future and these are retained locally where possible. 8.7 We will continue to provide updates on progress of the CFT and reports will be presented to the Committee as part of the quarterly and annual reporting of the Internal Audit service. 9. Conclusion 9.1 Based on the reports received and reviewed by the Committee, I am in agreement with the CIA’s annual audit report which confirms that reasonable assurance can be placed upon the adequacy and effectiveness of the Council’s internal control system in 2023/24. I am satisfied that active monitoring and follow up of recommendations are in place in respect of agreed management actions. This follow up process is further enhanced by the continuous monitoring programme carried out by internal audit which provides ongoing assurance over the Council’s core transactional based systems. 9.2 The pressures on the Council continue both in the need to balance delivering the services required by our communities but also in the backdrop of challenging financial settlements, economic and socio-demographic changes which are likely to remain for the foreseeable future. The need for a continued strong, independent, resourced and resilient Internal Audit team has never been so important and will be critical going forward in helping the Council to meet these challenges and provide the assurances that are required by the Audit and Scrutiny Committee, senior management and the Council. Page 266
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ARGYLL AND BUTE COUNCIL COUNCIL DEVELOPMENT & ECONOMIC GROWTH 20th DECEMBER 2024 ARGYLL AND BUTE COUNCIL DRAFT VISITOR LEVY SCHEME 1.0 INTRODUCTION 1.1 The purpose of this paper is to provide members of Argyll and Bute Council with a draft Visitor Levy Scheme and all associated paperwork for discussion and to seek approval for the draft Visitor Levy Scheme to go out to a 12-week public consultation in early January 2025. 1.2 The Visitor Levy (Scotland) Act 2024 came into effect in May 2024. This was followed by formal Visitor Levy Guidance for local authorities published in the public domain on 4th October 2024, which was prepared by an Expert Group led by VisitScotland. The Act enables local authorities to apply a visitor levy on overnight stays, on the accommodation element only. With reference to the guidance document, detail statutory and non-statutory activity already undertaken by elected members, council officers and members of the Shadow Visitor Levy Forum, complete with a revised timescale of ongoing preparatory and engagement work, is outlined in Table 1 in the report. 1.4 The draft Visitor Levy Scheme, impact assessments and formal consultation questions presented in Appendices 1, 2 and 3 respectively have paid due cognisance to over 1,200 responses to the pre-consultation survey and the report from the six stakeholder workshops delivered by Argyll and the Isles Tourism Co-operative, where the CEO is a member of the Argyll and Bute Shadow Visitor Levy Forum. 1.5 It is also important to capture the views from visitors and residents. Tourism is a key industry for Argyll and Bute, which relies on services that are used also by our communities, from roads to waste to leisure and other services. To support a sustainable visitor economy in Argyll and Bute, the council needs to consider all possible opportunities for investment to raise funds to benefit visitors and residents. 1.6 Visitors to Argyll and Bute expect to have access to services that local people also use but there are 20 times more visitors to Argyll and Bute than there are in the total population of the area, and this has an impact on the wear and tear of local infrastructure and services. Many of these services rely on our shrinking public sector budgets and are not a duty of a council to fund. Page 267 Agenda Item 6
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2.0 RECOMMENDATIONS 2.1 Members are asked to: • Note and consider the content of this paper. • Consider the draft Argyll and Bute Council Visitor Levy Scheme, impact assessments and formal consultation documents outlined in Appendices 1, 2 and 3. • Endorse that the draft Argyll and Bute Council Visitor Levy Scheme formal consultation document (Appendix 3), with reference to all appropriate content (Appendices 1 and 2) will be go out to a formal 12-week public consultation in early January 2025. 3.0 DETAIL 3.1 The main focus of this report is to seek approval for the draft Argyll and Bute Council Visitor Levy Scheme to go out to a 12-week public consultation in early January 2025. 3.2 The Visitor Levy (Scotland) Act 2024 came into effect in May 2024. It should be noted that elements of the Visitor Levy are set in law and councils cannot change them. These include the: • types of accommodation covered; • the application of the Visitor Levy as a percentage of accommodation charges per person, per night (other charges, including catering and parking, are not subject to a levy); • that councils are legally required to consult extensively with local communities, businesses, and stakeholders before implementing the levy; and • while councils can decide to introduce the Visitor Levy and on the percentage rate levied, local authorities must reinvest funds raised to help manage the impact of tourism and enhance visitor experiences. It is a statutory requirement for all councils to report annually on how this has been done. 3.3 The Visitor Levy (Scotland) Act was followed by the publication of formal Visitor Levy Guidance for local authorities in the public domain on 4th October 2024, which was prepared by an Expert Group led by VisitScotland. 3.4 The draft Argyll and Bute Council Visitor Levy Scheme, impact assessments and formal consultation questions presented in Appendices 1, 2 and 3 respectively have paid due cognisance to over 1,200 responses to the pre- consultation survey and the report from the six stakeholder workshops delivered by Argyll and the Isles Tourism Co-operative, where the CEO is a member of the Argyll and Bute Shadow Visitor Levy Forum. 3.5 Stakeholder engagement is ongoing. Subject to approval of the formal 12-week consultation, a communication and engagement programme from early January 2025, to include online and face-to-face engagement, will be published on the Argyll and Bute Council Visitor Levy web page, accompanied by regular press releases and social media posts. A dedicated mailbox has already been Page 268
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established, abvl@argyll-bute.gov.uk and the Visitor Levy web page includes a link to FAQs: Argyll and Bute Visitor Levy - FAQs | Argyll and Bute Council 3.6 With reference to the proposed draft Visitor Levy Scheme presented in Appendix 1 the current position is as follows: • The Visitor Levy Scheme will operate, with net proceeds re-invested, across the whole of the Argyll and Bute Council area. • It reflects the strategic priorities set out in the Argyll and Isles Strategic Tourism Partnership strategy developed in partnership by Argyll and Bute Council, Argyll and Isles Tourism Co-operative, Highlands and Islands Enterprise and VisitScotland. • At present, no local exemptions are being considered (to aid operational simplicity) except for those at a national level outlined in the Visitor Levy (Scotland) Act 2024. • A levy rate of 5% has been considered on the accommodation charge at a level that aims to work with within the price sensitivity of the accommodation sector whilst generating sufficient levy income to have a positive impact when re-invested. In addition, the 5% rate aligns to the rate that has been included in the City of Edinburgh Council and The Highland Council draft Visitor Levy Schemes which are already out for consultation. • The proposed income to be generated from the implementation of a 5% rate has been modelled independently by professors from the University of Edinburgh Business School (in-kind support). Similar work was undertaken to assess the forecasts for the City of Edinburgh Council. • The impact of increased costs to accommodation providers in collecting the levy could be mitigated through a financial contribution being made to each business remitting the levy. This will require financial modelling and Subsidy Control consideration. Council officers are considering a Visitor Levy retention scheme to propose to the council. This scheme could provide accommodation providers with funds to help offset the administrative costs they are expected to incur in complying with any Visitor Levy scheme, should it be implemented. 3.7 It is important to note that feedback from the 12-week public consultation (subject to approval) will need further consideration at a Special Council meeting in May / June 2025. If the approval is granted to take forward a Visitor Levy Scheme in late spring / early summer 2025, this will trigger the statutory requirement to enter an 18-month implementation period. The earliest a Visitor Levy Scheme could be operational across Argyll and Bute would be January 2027. 3.8 The exact mechanism for billing and collecting the levy is still under discussion, including the development of a national platform through discussions with the Improvement Service. If the draft Argyll and Bute Visitor Levy is approved late spring / early summer 2025 more details will be provided during the 18-month implementation period. Argyll and Bute Council will ensure compliance, with penalties and debt recovery processes in place for non-compliance. Establishing a robust internal team for project management, enforcement, and data analysis will be necessary to support the implementation of the Visitor Levy and any supporting systems. Page 269
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3.9 Table 1 below outlines an indicative timeline of activities for the establishing and implementing of a Visitor Levy including key council meetings, if the 12-week public consultation is approved. The text in italics mirrors that in the Visitor Levy Guidance document and statutory requirements are highlighted in light blue. Table 1: Indicative Timeline of Activities to Establish a Visitor Levy (subject to approval) aligned to the final Visitor Levy Guidance Document Indicative Timeline Activity Statutory Requirement Pre-consultation work Ongoing Local authorities undertake work to understand their local visitor accommodation sector and set up necessary cross working between local authority departments. Visitor Levy Officers’ Working Group (OWG) established on 2nd July 2024 and meets fortnightly. Members of the Visitor Levy OWG are from key council functions, such as Economic Growth, Revenue and Benefits, Communication and Customer Services. Argyll and Bute Council officers are working with professors from the University of Edinburgh Business School to look at forecasting the potential level of Visitor Levy income using a working levy rate of 5%. Ongoing Local authorities engage with stakeholders to develop Visitor Levy proposal. Shadow Visitor Levy Forum is established: inaugural meeting on 7th October, a workshop session on 24th October and two subsequent meetings on 14th and 27th November 2024. Members of the Shadow Visitor Levy Forum (AITC and VS) delivered six Visitor Levy stakeholder consultation sessions on 23rd and 30th (x2) October and 6th. 7th and 14th (a.m.) November 2024. Pre-consultation survey issued on 11th October and closed on 28th October 2024, with 1,278 responses. Ongoing Discussion and debate at relevant local authority committees. Intention to develop a draft Visitor Levy Scheme approved at a Special Council meeting on 15th August 2024. Visitor Levy SLWG (public meeting) established and chaired by the Council Leader. Visitor Levy SLWG comprises of four members of the Administration and two members from the Opposition. First meeting, 1st October with a subsequent meeting on 30th October 2024. Elected Members Seminar on the Visitor Levy, attended by industry reps/Shadow Forum members from AITC and VS on 16th October. Ongoing Local authorities to prepare for consultation. Argyll and Bute Council web page went live on 9th October, https://www.argyll-bute.gov.uk/my-community/recreation- and-leisure/argyll-and-bute-visitor-levy complete with an inbox abVisitor Levy@argyll-bute.gov.uk for questions and a link to FAQs. An internal ChatBot has been developed to assist in fielding FAQs. Oct 2024 Objectives of Visitor Levy Scheme to be developed. Aligned with the four strategic objectives/priorities within the Argyll and the Isles Strategic Tourism Partnership Strategy. The objectives have been tweaked slightly at the Shadow Visitor Levy Forum meeting on 24th October to mirror the work already underway by the AISTP (five of which are Shadow Visitor Levy Forum members) to prepare a revised strategy, spring 2025. √ Page 270
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Table 1: Indicative Timeline of Visitor Levy Implementation Requirements (continued) Indicative Timeline Activity Statutory Requirement Pre-consultation work Oct/Nov 2024 Impact studies to be carried out as required. Initial draft impact studies were considered at the Visitor Levy SLWG meeting on 30th October 2024. Feedback from the pre-consultation work has been incorporated as appropriate. Impact assessments are included the paper pack for the Special Council meeting on Friday, 20th December 2024. √ Nov/Dec 2024 Develop draft Visitor Levy Scheme to be proposed. Preparation of the draft Argyll and Bute Council Visitor Levy Scheme, with key input from the Visitor Levy SLWG, informed by the results from the pre-consultation survey and Visitor Levy stakeholder session discussions. A final draft Visitor Levy Scheme is included in the paper pack for the Special Argyll and Bute Council meeting in December 2024. Nov/Dec 2024 Plans for use of net proceeds of the draft Visitor Levy Scheme to be developed. Feedback from pre-consultation survey and from the workshop sessions with the Shadow Visitor Levy Forum incorporated to the draft Visitor Levy Scheme as appropriate. Input and discussions at the Visitor Levy SLWG for what is included in the draft Argyll and Bute Council Visitor Levy Scheme. Dec 2024 Agreement of draft Visitor Levy Scheme by the local authority. Draft Argyll and Bute Council Visitor Levy Scheme, and all supporting documentation, to be considered to go out to public consultation at a Special Argyll and Bute Council on 20th December 2024 Formal Consultation (subject to approval) January to March 2025 Public consultation on entire draft Argyll and Bute Council Visitor Levy Scheme proposal (standard practice is 12 weeks) Timescale aligned to approval of a draft Argyll and Bute Council Visitor Levy Scheme and associated documents to go out to public consultation at a Special Argyll and Bute Council meeting on 20th December 2024. √ April 2025 Analyse and report findings on the local authority committee, including potential changes to the Argyll and Bute Council draft Visitor Levy Scheme in light of the consultation. Visitor Levy OWG to analyse findings working with the Visitor Levy SLWG and input from the Shadow Visitor Levy Forum, as appropriate. Governance Requirements May/June 2025 Formal public announcement of decision to introduce a Visitor Levy or not (start date in early 2027). Report to a Special Council meeting in May/June 2025 (dependent on response from the formal consultation to prepare a final Argyll and Bute Council Visitor Levy Scheme for approval). √ June/July 2025 Minimum 18-month implementation period begins. Official start date for 18-month period to be confirmed nearer the time. √ June/July 2025 Scottish Ministers to be notified of decision to introduce a Visitor Levy across Argyll and Bute. √ Page 271
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Table 1: Indicative Timeline of Visitor Levy Implementation Requirements (continued) Indicative Timeline Activity Statutory Requirement Governance Requirements June/July 2025 Establish a Visitor Levy Forum within six months of formal public announcement of a decision to introduce a Visitor Levy Scheme. Augment current Shadow Visitor Levy Forum to establish the main Visitor Levy Forum (advisory function) to be maintained for the duration of the scheme (meet at least two times per calendar year). √ Mid-July 2025 Argyll and Bute Council to advise businesses of their liability and prepared administration of Argyll and Bute Council Visitor Levy Scheme. Training and support for businesses to prepare for implementation will commence. Dec/Jan 2027 Implementation period expires. Early 2027 The Argyll and Bute Council Visitor Levy Scheme comes into force, and the Visitor Levy is collected and remitted to Argyll and Bute Council. √ Early 2028 Annual report on the Argyll and Bute Council Visitor Levy Scheme An annual report will go to a full Argyll and Bute Council meeting, where the paper will be in the public domain. √ Source: Visitor Levy Guidance and Officer Commentary Page 272
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4.0 CONCLUSION 4.1 The purpose of this paper is to provide members of Argyll and Bute Council with a draft Visitor Levy Scheme and all associated paperwork for discussion and to seek approval for the draft Visitor Levy Scheme to go out to a 12-week public consultation in early January 2025. 5.0 IMPLICATIONS 5.1 Policy: the Visitor Levy has become law following Royal Assent of the Visitor Levy (Scotland) Bill and the Visitor Levy Guidance has been published. 5.2 Financial: as an early adopter, the council may be required to make an initial contribution to the build costs for the proposed national digital platform (if this is the preferred approach) which will be recouped. The implementation of the levy could generate a substantial yearly income for Argyll and Bute Council to invest in services relevant to the visitor sector, for the benefit of visitors and local communities and subject to scrutiny from the Visitor Levy Forum. Professors at the University of Edinburgh are undertaking detailed forecasting work (in-kind) on the income to be accrued based on a 5% levy (working figure) using the following data source which have been purchased by Argyll and Bute Council: Scottish Tourism Economic Activity Monitor (STEAM), CoStar and Key Data. 5.3 Legal: all appropriate legal implications will be taken into consideration. 5.4 HR: the Visitor Levy SLWG is supported by officers from the Visitor Levy OWG and members of the Shadow Visitor Levy Forum. 5.5 Fairer Scotland Duty: the Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on particular public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio-economic disadvantage, when making strategic decisions and how this has been implemented. 5.5.1 Equalities: none. 5.5.2 Socio-economic Duty: none. 5.5.3 Islands: if approved, the same Visitor Levy scheme, with the same percentage rate charged for overnight accommodation, will cover the whole of Argyll and Bute, including accommodation providers on the islands. It is anticipated that this nominal rate will not disproportionately impact island accommodation providers any more than those based on the mainland throughout the region. 5.6 Climate Change: none. 5.7 Risk: if Argyll and Bute Council does not introduce a levy, in the medium to longer term the area could miss out on the investment opportunity and associated benefits for local people, visitors and businesses. 5.8 Customer Service: there is a need to implement an efficient Visitor Levy process that is transparent and easy to use by our customers. Page 273
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5.9 The Rights of the Child (UNCRC): none. Kirsty Flanagan, Executive Director responsible for Economic Growth Councillor Jim Lynch, Leader of Argyll and Bute Council 4th December 2024 For further information contact: Fergus Murray, Head of Development and Economic Growth fergus.murray@argyll-bute.gov.uk Ishabel Bremner, Economic Growth Manager ishabel.bremner@argyll-bute.gov.uk APPENDICES Appendix 1: Draft Argyll and Bute Visitor Levy Scheme Appendix 2: Draft Impact Assessment: Argyll and Bute Council Visitor Levy Scheme Appendix 3: Draft Formal Consultation document Page 274
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Appendix 1: Draft Argyll and Bute Council Visitor Levy Scheme 1.0 Power to Introduce a Visitor Levy 1.1 The Visitor Levy (Scotland) Act 2024 came into effect in May 2024. This was followed by formal Visitor Levy Guidance for local authorities published in the public domain on 4th October 2024, which was prepared by an Expert Group led by VisitScotland. The Act enables local authorities to apply a Visitor Levy on overnight stays, on the accommodation element only. 1.2 Argyll and Bute Council is giving due consideration to utilising the powers granted by the Visitor Levy (Scotland) Act 2024 to introduce a Visitor Levy Scheme in respect of persons staying in certain types of accommodation overnight in its local authority area. 2.0 Types of Accommodation to which the Visitor Levy Applies 2.1 Under the Act, overnight accommodation is considered a room or area that is used by a visitor for residential purposes but is not their only or usual place of residence. Therefore, a Visitor Levy does not apply to accommodation that is being used as someone’s only or usual place of residence. 2.2 The levy will apply to all chargeable overnight accommodation within Argyll and Bute Council boundary. This includes: • Hotels; • Hostels; • Guest houses; • Bed and breakfast accommodation; • Self-catering accommodation, including short-term lets; • Camping sites; • Caravan parks; • Accommodation in a vehicle, or on board a vessel, which is permanently or predominantly situated in one place; and • Any other place at which a room or area is offered by the occupier for residential purposes otherwise than as a visitor’s only or usual place of residence. 2.3 A Visitor Levy cannot be charged for accommodation on local authority gypsy and traveller sites, and registered social landlord gypsy and traveller sites. It also cannot be charged for accommodation in a vehicle, or on board a vessel that is undertaking a journey involving one or more overnight stops. 2.4 The cost of separate charged add-ons are not part of a levy, such as: • meals or drinks • parking for a vehicle • laundry facilities or services for guests • entertainment • leisure facilities • transportation to and from the accommodation. Page 275
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3.0 Visitor Levy Scheme Strategic Objectives/Priorities and the Use of Funds 3.1 The overarching aim of the Argyll and Bute Council draft Visitor Levy Scheme is: To sustain Argyll and Bute's status as an area of outstanding natural beauty, culture and heritage and to ensure that the impacts of a successful visitor economy are managed effectively and in support of the Argyll and Bute Council’s priorities and those highlighted in the Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy). 3.2 The Visitor Levy Scheme objectives/priorities are aligned to the strategic priorities for the refreshed AISTP Tourism Strategy from 2025 onwards as follows: 1. Extending the season and spreading visitors across the destination. 2. Reaching new audiences: marine, coastal, cultural and outdoor tourism. 3. Sustaining and improving the visitor offer. 4. The journey towards net zero. 3.3 The Visitor Levy (Scotland) Act requires a local authority operating a Visitor Levy Scheme to use the net proceeds of a scheme for certain specific purposes. Those purposes are that the funds must facilitate the achievement of the schemes objectives and that they should develop, support and sustain facilities and services for or used by visitors to a local authority area for leisure or business purposes. Page 276
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3.4 Investment opportunities that could be enabled by the net levy proceeds are detailed in the Table A1 below. Table A1: Proposed Investment Opportunities – Short to Longer Term Strategic priorities Extending the Season and spreading visitors across the destination Reaching new audiences: marine, coastal, cultural and outdoor tourism Sustaining and improving the visitor offer The journey towards net zero Overarching focus Flexible regional marketing activity to promote hero products where there is ambition and capacity. Flexible sector-led marketing and product development to attract key international and cultural visitors. Continuous investment in the development and sustainability of destinations, places, people and visitor experiences. Investing in and encouraging businesses and visitors to enjoy the destination in more sustainable ways. Related activity Sustaining existing and creating new infrastructure, amenities, event spaces and programmes. Improving step ashore facilities for people arriving by sea. Inter-island and destination connectivity. Making it easier to travel between islands and destinations. Realistic transport options. Improving public toilets and sanitation. Support for individual tourism businesses to help them improve their own and develop new products and services (grants, training and skills (employer and employee), advice, digital capability, toolkits). Supporting businesses with adopting net zero practices to drive efficiencies. Deliver transport infrastructure (including roads, pathways and active travel) and services that support transition to low carbon journeys for visitors, business staff and residents. 3.5 Table A1 includes reference to the top three responses received from the pre-consultation survey which can be summarised as follows: 1. Public Toilets and Sanitation (251 responses) • "Ferries, roads, lay-bys, public transport, public toilets." • "Maintaining public toilets and for them to have 24-hour access." • "Invest in more public toilets with regular cleaning and sanitation services, especially in high-traffic tourist areas." Page 277
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2. Roads and Pathways (241 responses) • "Improved road signage—passing places should be clearly marked to help visitors unfamiliar with single-track roads." • "Investment in improving roads and pathways, especially in areas that tourists frequent." • "Repair and upkeep of pathways and roads to reduce visitor complaints about accessibility." 3. Infrastructure and Amenities (196 responses) • "Spent on local area improvements in Argyll and Bute like recreational halls and sports facilities for locals and tourists." • "Minor infrastructure repairs—cleaning blocked road drains and mending pedestrian pavements." • "Funds should go towards infrastructure enhancements that benefit tourism, like improved facilities in parks and beaches. Page 278
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4.0 Visitor Levy Start Date and Duration 4.1 Subject to approval by Argyll and Bute Council and formal notification to Scottish Ministers, a final Visitor Levy Scheme would become operational after an 18-month implementation period. The implementation period will allow for the development and testing of the online portal, training and support on using the portal for businesses and a roadmap developed for investment opportunities. At present an indicative Visitor Levy Scheme start date is early January 2027. 4.2 The Visitor Levy will apply indefinitely. As note in the Act Argyll and Bute Council is required to review its Visitor Levy Scheme every three years’ see Section 10 below. 5.0 The Visitor Levy Rate and Income Generation 5.1 As present a 5% levy (working figure) is proposed and will apply all year-round, raising an estimated £9m in gross revenue (this figure is an indicative range and does not take into account the effect of statutory exemptions or a proposed caps). The Visitor Levy rate will be the same across the entire local authority area. 5.2 Table A2 below outlines some examples of what a 5% levy will mean for visitors staying in varying levels of accommodation. Table A2: Some examples of a 5% levy charges 1. Island based VAT registered campsite – night: Accommodation charge £30 Miscellaneous item £15 Visitor Levy £1.50 (5% of £30) Total £46.50 VAT £9.30 Total visitor charge = £55.80 (increase of £1.80 due to Visitor Levy) For a 7 night stay the Visitor Levy would add £12.60 to the total cost. 2. VAT registered mid-range hotel – per double occupancy room per night Accommodation charge £100 Food £60 Total £160 Visitor Levy £5 (5% of £100) VAT £33 Total £198 (increase of £6 due to Visitor Levy) For a 7 night stay the Visitor Levy would add £42 to the total cost for a couple. 3. VAT registered high end hotel – per double occupancy room per night Accommodation charge £250 Food £100 Total £350 Visitor Levy £12.50 (5% of £250) VAT £72.50 Total £435 (increase of £21.06 due to Visitor Levy) For a 7 night stay the Visitor Levy would add £105 to the total cost for a couple Page 279
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5.3 Professors from the University of Edinburgh Business School (in-kind support) undertook detailed forecasting work on the income to be accrued based on a 5% levy (working figure) using the following data sources which have been purchased by Argyll and Bute Council: Scottish Tourism Economic Activity Monitor (STEAM), CoStar and Key Data. The forecasting work to date has provided three different income scenarios ranging from £6.5m (low) to £8.5m (high). Further analysis on this work will be published in due course. 6.0 Administration Costs 6.1 Estimating the administration costs for Argyll and Bute Council to implement and manage the Visitor Levy, as well as the associated costs for accommodation providers, involves several key considerations. The Financial Memorandum accompanying the Visitor Levy (Scotland) Act 2024 provides valuable insights into potential expenses see here Scottish Parliament. 6.2 While some of the administration costs still need to be confirmed, detailed work is being undertaken by council officers. 6.3 Initial setup costs are related to stakeholder engagement, system development, and staff recruitment and training for administration, enforcement and support roles for the levy. Ongoing operational costs include the day-to-day administration, compliance monitoring, and public engagement including public information campaigns. 6.4 At present it estimated that the set-up costs for the council will be circa £215,000 with ongoing annual administration costs of circa £460,000. 6.5 The costs to accommodation providers will vary widely depending on the size and nature of their business, as well as their use of property management systems. Therefore, a range of potential costs must be considered. These costs could include: • modifications to booking and billing systems to incorporate the levy; • training and educating staff on levy procedures and customer communication; and • administrative tasks, such as record-keeping, reporting, remitting levy payments, and increased transaction fees from banks for card payments. 6.6 The draft scheme for supporting accommodation providers in Edinburgh with the costs of administering the Visitor Levy has been considered by the City of Edinburgh Council. 6.7 The scheme allows accommodation providers who remit Visitor Levy monies directly to the council to retain a percentage of what they collect: 2% for large businesses and 2.5% for small businesses. 6.8 For the purpose of this scheme: • a large business is defined as one operating accommodation property or properties with a combined rateable value (RV) of £30,000 or more. • a small business is defined as one operating accommodation property or Page 280
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properties with a combined RV of less than £30,000. • any business with properties assessed under Council Tax will be deemed a small business for calculating retention under the Visitor Levy Scheme. 6.9 In the context of Argyll and Bute: • there are 2,462 properties classified as accommodation on the Non- Domestic Rates (NDR) roll as of October 2024, which would attract a Visitor Levy. • these properties have RVs ranging from £220 to £463,000, with a mean average of £9,325. • using a £30,000 RV threshold: o 124 large businesses (RV ≥ £30,000). o 2,338 small businesses (RV < £30,000). • using a lower threshold of £15,000 RV results in: o 417 large businesses (RV ≥ £15,000). o 2,225 small businesses (RV < £15,000). • the number of Bed and Breakfast properties on Council Tax is harder to determine, but in 2021 there were 121 known Council Tax properties offering B&B accommodation. 6.10 Table A3 below outlines examples of how a 2% and 2.5% retention scheme would impact accommodation providers' retained amounts to offset administrative costs: Table A3: Examples of 2% and 2.5% Retention for Admin Costs Example Visitor levy collected in quarter Retention rate applied (%) Retained amount Amount remitted to the council in quarter Small Business (RV £15k) £238.87 2.5% £5.97 £232.90 Large Business of 10 small units (Combined RV £35k) £3,155.43 2.0% £63.11 £3,092.32 Luxury Hotel (RV £411,000) £10,500.00 2.0% £210.00 £10,290.00 6.11 Based on these examples, the council should consider: • the threshold for defining small and large businesses: £15,000 RV, £30,000 RV, or another value. • the potential introduction of a minimum retention amount per quarterly return for micro-businesses. • the possibility of a maximum retention amount for high-end luxury hotels. 6.12 The council must also carefully assess whether allowing retention of the Visitor Levy constitutes a subsidy under the Subsidy Control Act 2022. If so, the scheme must comply with the principles outlined in the Act to address any subsidy control considerations. 6.13 Should the council approve moving forward with a statutory consultation on a Page 281
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draft Visitor Levy Scheme in Argyll and Bute the council will work with industry on a potential scheme of retention of Visitor Levy receipts as a payment towards administration costs. 7.0 Exemptions and Caps 7.1 The key focus for the administration of the Argyll and Bute Council Visitor Levy Scheme is to keep it simple to understand, accommodation providers to collect and the council to administer. No additional discretionary exemptions have been proposed, due to the operational complexity this would bring. However, further to current feedback on this proposal a consultation question will be included on this issue. 7.2 A number of groups do not fall within the scope of the Act and are therefore not liable to pay a Visitor Levy charge. These groups are as follows: 1. Those who are using overnight accommodation and their only or primary residence, which could be due to: • being homeless or at risk of homelessness; • very poor housing conditions, such as overcrowding, serious damp, or disrepair; • experiencing domestic abuse or other forms of violence; • someone’s residence being unfit for habitation; and • someone being an asylum seekers or refugee. 2. Someone staying on a dedicated gypsy/traveller site run by a local authority or a registered social landlord. 3. Those in receipt of the following specified disability benefits, payments or allowances: • Disability Living Allowance • Disability Assistance • Attendance Allowance • Pension Age Disability Benefit • Personal Independence Payment. 4. Other people not subject to the Visitor Levy include those who are residing overnight in vehicles or on-board vessels that are undertaking a journey involving one or more overnight stops. As a result, the following forms of overnight accommodation are outwith the scope of the Act: • the provision of a cabin on a ferry or cruise ship, unless the vessel is permanently moored; • the provision of a cabin on an overnight sleeper train; and • use of a hired or privately-owned campervan or motorhome where they are not staying overnight in campsites. 7.3 As noted in paragraph 2.4 above, the cost of separate charged add-ons are not part of a levy, such as: • meals or drinks Page 282
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• parking for a vehicle • laundry facilities or services for guests • entertainment • leisure facilities • transportation to and from the accommodation. 7.4 Individuals in the exemption categories will need to pay the levy and request reimbursement from Argyll and Bute Council. Reimbursement can be applied for online, submitting receipts for their overnight stay, relevant evidence (as will be detailed on the council’s website) of their exemption/exclusion and bank details. 7.5 For those in receipt of the UK disability benefits, payments or allowances detailed above, evidence will be required to be submitted online and should include: • the name of person in receipt of relevant eligible benefit; • alignment to the agreed Argyll and Bute Council Visitor Levy Scheme; • a copy (scan/photo) of relevant benefit award letter; • the name of the person in receipt of the relevant benefit should be included on the receipt or booking; • proof of payment for overnight accommodation; and • bank details (to enable payment via BACS). 7.6 The council will assess the evidence received and pay the reimbursement via bank transfer if the applicant is found to be eligible. It should be noted that Argyll and Bute Council officers will develop the full detail of this administration process for political approval if the draft Visitor Levy Scheme progresses. 7.7 A question on the potential to cap the levy to a certain number of nights has been included in the consultation document questions which will be routed to those for visitors, communities/residents and businesses. From the pre- consultation survey, 45% of respondents would like to see a cap applied, but 30% did not want a cap. 8.0 Collecting the Levy; Systems and Software Requirements 8.1 Officers from Argyll and Bute Council have been working with officers from City of Edinburgh and The Highland Councils and developers from the Improvement Service to look at developing a single national platform to deliver the Visitor Levy in Scotland. The project has produced the service blueprint and has just moved into its formal development phase. 8.2 A national platform for the Visitor Levy in Scotland would offer a more sustainable solution to support the scheme in the long term. It would allow accommodation providers with properties across Scotland the opportunity to set up a single account covering multiple properties in multiple local authority areas for example Premier Inn, Crerar Hotels, Best Western Hotels etc. Page 283
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8.3 Development works have commenced and over the next 10 months the first design of the full end to end product will be available for User Acceptance Testing and Testing within the wider business communities in July 2025. The system should be ready for full deployment from March 2026. 8.4 Accommodation providers within the local authority area will be liable for the levy. They will be required to submit quarterly reports detailing the total accommodation charges and the total levy collected to the national online Visitor Levy platform. 8.5 The levy will be payable at the same time as submitting returns. (There is the potential to mirror the submitting timelines under current scheme such as VAT returns or short term lets). 9.0 Enforcing the Levy 9.1 Argyll and Bute Council officers would support businesses with training and advice to help them meet the Visitor Levy requirements for record keeping and collection. Accommodation providers are required to keep accurate records of all transactions that are subject to the levy. The council would conduct inspections, as required, to ensure compliance with the scheme and remittance requirements (more information to be provided). 9.2 Further to due process (to be advised), the Visitor Levy Act requires accommodation providers who fail to comply to be subject to penalties. The aim would be to provide the support required to enable businesses to comply. 9.3 Appeals relating to decisions made by the council on the operation and/or enforcement of the scheme can be registered via an online portal or email address. The council will aim to review and process these appeals within 28 days. 10.0 Annual Reporting, Reviewing and Changing the Visitor Levy Scheme 10.1 Within the first 18 months from when an Argyll and Bute Council Visitor Levy Scheme may come into force, and for each 12-month period following this, Argyll and Bute Council must prepare an annual report setting out: • the amount of money collected • how the net proceeds have been used; and • the performance of the Visitor Levy Scheme in relation to its objectives. 10.2 The first review must be carried out within three years of a Visitor Levy Scheme coming into force. Second and subsequent reviews must be carried out within three years of the previous reviews. These reviews will assess whether the scheme is successfully achieving its objectives and measure the impact of the scheme on businesses and communities. The review will be reported, along with detail on how the income has been spent and the benefits which the Visitor Levy-funded projects have brought. Page 284
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10.3 If the council wants to make changes to the scheme following the review, it will publicly consult on the change and publish a report detailing the decision and its justification. Significant changes to the Argyll and Bute Council Visitor Levy Scheme will require an 18-month implementation period. Significant changes to the scheme include: • increasing the Visitor Levy percentage rate; and/or • removing any exemptions. 11.0 Visitor Levy Forum 11.1 Further to the establishment of the initial Visitor Levy Shadow Forum, a small advisory group at the pre-consultation stage, a Visitor Levy Forum will be set up by the council within six months of the Argyll and Bute Council formal announcement that a Visitor Levy will be introduced (post the 12-week consultation period). The Visitor Levy Forum will act as an advisory board to discuss and advise on the Visitor Levy scheme, including any proposed modifications. The Visitor Levy Forum will also be consulted on how the Visitor Levy funds will be spent. 11.2 The Visitor Levy Forum will be made up of representatives from the community and from businesses in the visitor economy. 11.3 It should be noted that the Visitor Levy Forum has no capacity to make any decisions. All decisions can only be made by Argyll and Bute Council elected members. Page 285
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Appendix 2: Draft Impact Assessments: Argyll and Bute Council Visitor Levy Scheme Tourism Overview With over 21,000 bed spaces (serviced and unserviced), tourism in Argyll and Bute is one of our largest sectors in terms of economic impact and employment. The Scottish Tourism Economic Assessment Monitor (STEAM) data shows a 24.7% increase in visitor numbers from 2013 to 2023. The visitor economy is a major employer in Argyll and Bute, bringing much needed employment to our remote and island communities. Current Situation By late October 2024, 35% of Scots had taken a domestic home holiday this year and with a further 8% claiming they are likely to do so, we predict that up to 43% of Scots residents will take a staycation of some description. Argyll and Bute is one of four destinations that are especially popular for staycationers. There are encouraging signs however that 2025 may see some domestic tourism recovery post COVID. The trend towards self-catering accommodation since the pandemic has continued in 2024 with a four-percentage point increase over 2022 experienced last year and maintained in 2024. However, Key Data for the quarter three of 2024 shows a 12% decline for self-catering across Argyll and Bute. There has been a slight ‘bounce back’ in some serviced accommodation compared to 2023: a 2% increase in the use of large hotels, and 1% increases in B&Bs and guesthouses after larger decreases in 2023 (56 degree Scottish Tourism Index). Opportunities and Benefits The type of tourism infrastructure currently provided by Argyll and Bute Council, through income from Council Tax and the Scottish Government’s grant, helps to maintain roads and car parks, electric vehicle charge points, harbours, piers, slipways, public toilets, walking paths, motorhomes waste disposal points and recycling centres. However, with ever-decreasing budgets and increasing visitor numbers the council will struggle to support visitors without another source of income. New investment is needed so that Argyll and Bute can compete as a destination and appeal to new markets. This is where the levy has significant potential to provide a new source of income to allow the council to maintain and develop its obligations to residents and visitors. An audit of the current council provision to the visitor economy (direct and indirect) will help to identify gaps and suggest potential provisions to be supported by a Visitor Levy Scheme. This will be undertaken in early 2025 alongside the consultation period, so that the audit results can be considered prior to elected members taking a decision on the Visitor Levy Scheme. For instance, Argyll and Bute doesn’t have a strong ‘green’ image. A Visitor Levy could provide new investment in reducing carbon, helping businesses adopt greener practices and marketing the destination as a place for eco conscious travellers. Page 286
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Responses from our pre-consultation survey gathered a significant amount of feedback from businesses and returned 1,278 responses. 313 respondents said they were business owners and 81 (26%) of those were very opposed to a Visitor Levy. Responses on how the Visitor Levy should be spent give the top three as public toilets, roads and infrastructure. Impact Assessments The impact assessments evaluate the potential consequences and benefits to the tourism sector and communities, of Argyll and Bute Council’s draft Visitor Levy Scheme as outlined in the Visitor Levy (Scotland) Act 2024. The levy will apply to overnight accommodation across various categories in the region and is designed to generate revenue for sustainable tourism development while addressing community needs. The impact assessments cover the impacts on key stakeholders, including businesses collecting and remitting the levy, visitors paying the levy, local communities, including island communities, the local authority administering the scheme and an overarching equalities impact assessment. A. Impact on Businesses Collecting and Remitting the Levy Work is ongoing to quantify the businesses that could be required to collect the levy, with a current estimate of approximately 4,000 accommodation providers in Argyll and Bute. This is based on; 2,462 properties listed on the Non-Domestic Rates valuation roll as providing accommodation; 3,500 licence applications having been received for short-term lets; and an estimated 120 B&Bs/serviced accommodation providers treated as domestic properties for Council Tax. The specific uses of the Visitor Levy, aligned to the Tourism Strategy, will be informed by consultation. One of the uses put forward in the draft Visitor Levy proposed scheme is Improving the Offer. This could include support direct to tourism businesses to help them improve their own products and services through; development grants towards investment in premises, equipment, training or marketing; provision of marketing and digital toolkits and specialist advice; or the delivery of quality training or accreditation initiatives. 1. Administrative Burden: • An additional administrative burden would be introduced for accommodation providers in collecting a levy and submitting quarterly returns via an online portal (to be confirmed). This could particularly impact small businesses with limited resources or digital skills to handle such tasks efficiently. • Operational complexity may increase in terms of record-keeping requirements and potential inspections. This impact could be greater on accommodation providers less familiar with other regulatory obligations, such as VAT. • This could be mitigated by providing effective training and support for businesses and ensuring the online portal is straightforward to use. Page 287
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2. Financial Impacts: • Some businesses may need to invest in modifying their booking, billing or accounting software or processes to handle reporting and compliance. Others use online booking platforms that can implement a modification for them, but there is potential for costs to increase as a result of any changes. • Businesses will need to train staff and manage customer communication regarding a levy. Provision of a toolkit for businesses to use would assist with this. • Increased administrative time, either in-house or outsourced, to meet the administrative obligations. This could be minimised through providing training and support. • An increase in transaction fees for card payments. Typically, a business may pay between 1.5% and 3.5% per transaction, so a levy of 5% would increase transaction fees by 0.075% to 0.0175%. On £100k of card payments rising to £105k with a levy, the increase in transaction fees would be £75 to £175. • Where an Online Travel Agent (OTA) is used to manage bookings, the OTA fee can range from 2% to 20%. If an OTA applies the levy at the point of booking, it could increase their fee. • The HMRC requirement to include the levy collected as income for VAT purposes may bring those currently close to the VAT threshold over the limit, triggering mandatory VAT registration. This will create associated administrative and financial burdens and could create price increases impacting competitiveness in price-sensitive sectors. The lack of specific reliefs or exemptions for businesses affected in this way may exacerbate these challenges, underscoring the need for careful policy consideration to mitigate unintended impacts on small enterprises. Businesses in this position may reduce the number of nights offered in order to stay below the VAT threshold, reducing capacity across Argyll and Bute. It is proposed by industry representatives on the Shadow Visitor Levy Forum that industry liaises with the Scottish Tourism Alliance to lobby the HMRC on their behalf on this issue. • A Financial Memorandum published by the Scottish Government Financial Memorandum accessible includes research carried out on the cost of administration of a Visitor Levy in Scotland. This suggests that a small to medium size business with a turnover of between £1million and £5million per year could incur one-off setup costs of between £1,000 to £7,000, with the ongoing cost of submitting quarterly returns estimated at £300 to £400 per annum. • For micro businesses with a turnover below the VAT threshold, the estimated setup costs are between £150 and £1,100, with the ongoing Page 288
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cost of submitting quarterly returns estimated at £100 to £500 per annum. • The impact of these increased costs could be mitigated through a financial contribution being made to each business remitting the levy. This will require financial modelling and Subsidy Control consideration. • It is proposed that, in tandem with any consultation, case studies are developed with a representative sample of businesses to substantiate likely costs. The Visitor Levy Shadow Forum has agreed to assist with this. • Accommodation providers with low profit margins may experience challenges incorporating the levy collection process without passing costs onto consumers. • Non-compliance penalties could pose a financial risk to smaller providers. • Depending on the agreed uses of the levy, tourism businesses may be able to access direct business support such as grant funding, helping them to invest in their own product. 3. Economic Effect: • The sole purpose of the Visitor Levy is to develop, support or sustain facilities or services used by local residents and those visiting the area for leisure and for work purposes. The levy as proposed for Argyll and Bute aims to generate positive impacts for the sector by extending the season and spreading visitors across the region, reaching new audiences for marine, coastal, cultural and outdoor tourism, improving the tourism offer and supporting the journey towards net zero. • The specific impacts will be dependent on the agreed uses of the levy but could help improve competitiveness overall and encourage visitors to less-visited parts of the region, promote marine, coastal, cultural and outdoor tourism products to new and wider markets, improve visitor infrastructure and support sustainable tourism. • An important factor to consider is the overall current health of the tourism sector in Argyll and Bute and to forecast how it may change in the future. • The levy may lead to higher accommodation prices, which could undermine Argyll and Bute’s competitiveness compared to other destinations who do not implement a levy. This could affect demand, particularly among cost-sensitive customers and reduce occupancy rates. • The World Economic Forum (WEF) regularly publishes international travel and tourism index reports which measure factors and policies that Page 289
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enable the sustainable and resilient travel sector. In terms of the price competitiveness measure alone, the UK has regularly been ranked near the bottom of all countries assessed. Previous versions of the index (which applied a different methodology) showed the United Kingdom at the very bottom of the index in terms of price competitiveness. In the 2024 index report, the UK position improved, albeit still below average (with a score of 2.74), similar to Ireland (2.78), Netherlands (2.87) and Denmark (2.88), and significantly higher than others such as Iceland (1.44) Switzerland (1.68). Possibly the most important ranking is the overall index, which takes account of all measures. In this, the UK has consistently performed well and is identified as 7th best overall in the world in 2024. • The Scottish Government BRIA Visitor Levy Bill: business and regulatory impact assessment - gov.scot found that “Evidence from cities that have introduced these types of taxes recently show that generally growth in visitor numbers has continued after the introduction of these taxes. The relative change in overnight visitors for selected cities in Europe that have either introduced or increased existing taxes on visitors in the past 10 years including Barcelona, Lisbon, Berlin, Hamburg and Paris. In most cases there continued to be strong growth in overnight visitor numbers and no area saw a fall in visitor numbers prior to 2020.” • Insights can be gained from examining other visitor levies, but each country has its own distinct set of political arrangements and tax structures. The UK has a relatively high VAT rate for accommodation when compared to the rest of Europe at the standard 20% but the VAT threshold is one of the highest at £90,000. However, the international examples given indicate that visitor levies do not have a significant adverse economic impact where the rate is proportionate. • Set against a wider context of increases in employer National Insurance contributions, minimum wage, and Non-Domestic Rates, businesses may be less resilient. A number of tourism businesses may decide to close their operation prior to the introduction of the levy, reducing capacity across Argyll and Bute. • Pre-consultation engagement via Argyll and the Isles Tourism Co- operative and via the pre-consultation survey has raised strong concerns from the industry that the introduction of a levy will damage the sector and deter visitors from choosing Argyll and Bute as a destination. Specific concerns voiced include that domestic visitors in particular will not tolerate a price increase; that the levy will need to be absorbed by accommodation providers and decrease profitability; that non-VAT registered operators may need to reduce the number of nights offered in order to stay below the VAT threshold; that costs have already been rising steadily to cope with increased business costs; that 2024 has seen visitor numbers drop and the proposed timing of the levy is poor. Page 290
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B. Impact on Visitors Paying the Levy 1. Visitor Perception: • Visitors may view the levy as an additional cost, potentially influencing their decision to stay in Argyll and Bute compared to other regions or Local Authorities that choose not to develop such levies. This could especially deter budget-conscious travellers or those staying for longer periods. • Transparency together with clear communication concerning the levy’s purpose and the tangible benefits it will bring to the visitor experience, such as improved infrastructure and environmental initiatives, will be crucial in mitigating any negative perception. • The results obtained from a pre-consultation survey noted that most respondents were of the opinion that the levy could be a useful income to help maintain public toilets and sanitation. Infrastructure, amenities and roads and pathways were also ranked highly in the responses. 2. Visitor Demographics: • High-end and eco-conscious tourists may be more accepting of the levy, as it aligns with responsible and sustainable tourism goals. Conversely, visitors relying on budget accommodation (e.g. campers, hostels) may feel a disproportionate impact, as the percentage-based levy could result in additional costs over longer stays and could push value-based stays out of official campsites. 3. Visitor Experience: • The revenue generated would be intended to fund services and offerings that would sustain and enhance the visitor experience and would keep visitors coming to the area. Revenue would be dedicated to enhancing the visitor experience through improved infrastructure (e.g. public toilets, signage) culture and heritage including events. • Direct responses from our pre-consultation survey indicate that the visitor experience will be improved by enhancing and developing well- maintained visitor facilities and attractions. In addition, funds could be made available from the levy to provide simple amenities that focus on scenery, wildlife, and culture, which are the main draws for our visitors. Improving visitor centres and tourist information to better inform and support tourists has also been noted. • Funds raised from the levy could be invested in eco-friendly initiatives, such as, sustainable camping and waste management options, supporting environmental sustainability through projects like green spaces and eco-friendly transportation. • Other suggestions raised through the pre-consultation period were to provide improved road signage, especially on single-track roads, to Page 291
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reduce confusion for tourists and to invest in wayfinding signs and information boards to guide visitors to key locations. C. Impact on Communities who may Benefit from the Levy 1. Economic and Social Benefits: • Local communities are likely to see benefits from the levy, including funding for infrastructure improvements, public realm upgrades, and enhanced cultural and recreational facilities (see section 7 of the draft Visitor Levy Scheme for more details). These investments will support both the visitor economy and residents' quality of life and could contribute to local job creation and enhanced services. • Extending the tourism season and promoting less-visited areas can spread economic benefits more evenly across the region, reducing pressure on popular spots and allowing smaller communities to tap into the tourism economy. 2. Environmental and Cultural Preservation: • The focus on environmental sustainability and supporting initiatives like net-zero projects and responsible tourism will help protect Argyll and Bute’s natural and cultural heritage. Local communities, particularly in rural and coastal areas, will benefit from initiatives to manage visitor impacts, such as improved waste management and protection of fragile ecosystems. 3. Community Involvement: • The establishment of the Shadow and then main Visitor Levy Forum, which includes (and will include) representatives from local businesses and communities, provides an avenue for stakeholders to voice their concerns and influence how funds are allocated. This participatory approach can foster community buy-in and help ensure that projects funded by the levy address both visitor and local resident needs. D. Impact on Island Communities 1. Economic Sustainability and Visitor Distribution: • Island communities within Argyll and Bute may experience unique economic challenges and benefits from the levy. While the additional revenue has the potential to enhance local infrastructure, support services, and sustainable tourism initiatives, there is also a risk that the levy may impact visitor numbers to these areas, particularly for cost- sensitive travellers. If visitor demand decreases, smaller island businesses could face a disproportionate economic impact compared to mainland operators. Strategic reinvestment of levy funds to support island-specific tourism will be essential to ensuring that these communities benefit from increased visitation rather than reduced demand. Page 292
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2. Increased Costs and Infrastructure Strain: • Due to their limited resources and higher operational costs, island businesses may face greater challenges in meeting levy collection requirements. Transporting supplies and addressing waste management are often costlier for island communities, so visitor levies should ideally support these unique needs, addressing infrastructure and services that directly impact both residents and visitors. This could include enhanced ferry services, improved access to emergency services, waste management solutions, and upgrades to basic visitor facilities, which are critical to sustaining both the tourism industry and local quality of life. • As detailed in Section 6 of the draft Visitor Levy Scheme, should the council approve moving forward with a statutory consultation on a draft Visitor Levy Scheme in Argyll and Bute the council will work with industry on a potential scheme of retention of Visitor Levy receipts as a payment towards administration costs. 3. Cultural and Environmental Preservation: • Island communities are home to sensitive ecosystems and cultural heritage sites that are highly vulnerable to the pressures of tourism. The levy offers an opportunity to direct resources towards the preservation of these assets, such as coastal ecosystems, local wildlife, historic sites, and island-specific cultural practices. Prioritising projects that protect the environmental integrity and cultural heritage of these communities will foster sustainable tourism while safeguarding local traditions and the natural landscape for future generations. 4. Community Engagement and Fair Distribution of Fund: • Engaging island residents for consideration as members of the Visitor Levy Forum and ensuring equitable fund allocation to island projects are essential for maintaining community support and maximising the levy’s positive impact on these areas. Establishing specific channels for island representatives to influence decision-making will help align the levy’s revenue usage with the unique needs and priorities of these communities, fostering greater community buy-in and promoting projects that reflect both visitor and resident interest. E. Impact on Local Authorities Administering the Levy 1. Administrative Burden: • Argyll and Bute Council will face new responsibilities in terms of managing the levy, including processing returns, conducting compliance inspections, managing appeals, and distributing funds. These tasks will require dedicated resources and staff training. • The council will also need to ensure that the national online portal (if this option is taken forward) operates smoothly and provide clear instructions and training workshops/webinars for accommodation providers. Any Page 293
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technical issues or miscommunications could result in compliance problems and reduce the effectiveness of the scheme. 2. Revenue Generation: • The council expects to raise circa £9 million in gross revenue annually, which will be used to fund a wide range of local projects related to tourism infrastructure, culture and heritage, environmental sustainability, and community support. This new revenue stream will reduce the financial strain on existing council budgets and enable longer-term investments in the region’s tourism sector. • Argyll and Bute Council will need to carefully manage the costs of administering the scheme to ensure that net revenue is maximised. Monitoring compliance, managing appeals, and processing reimbursements for exempt individuals will add to the overall complexity and cost of administering the scheme. 3. Policy Review and Adaptation: • The council will review the scheme every three years, assessing its success in meeting objectives and making adjustments as necessary. This ensures that the levy remains responsive to changing conditions in the tourism sector and local visitor economy. However, regular reviews may require additional administrative resources and consultation processes. F. Equalities Impact Assessment Title of Proposal Visitor Levy – Argyll and Bute Intended outcome of proposal With over 21,000 bed spaces (serviced and unserviced), tourism in Argyll and Bute is one of our largest sectors in terms of economic impact and employment. The Scottish Tourism Economic Assessment Monitor (STEAM) data shows an 24.7% increase in visitor numbers from 2013 to 2023. In 2023, visitor numbers had almost bounced back to pre- pandemic numbers (2.885 million visitors). STEAM also shows a similar trend with the overall economic impact of the tourism sector in Argyll and Bute. Pre-pandemic in 2019, the direct economic impact was £463.9m in Argyll and bute. By 2023, and when taking account of price inflation, the direct economic impact was assessed at £461.5m, with a further £179m indirect impact. The visitor economy is a major employer in Argyll and bute, bringing much needed employment to our remote and island communities. In 2023 there were 7,177 direct FTEs, with a further 2,000 indirect employees (delivery drivers, laundries etc). Over 70% of jobs in the visitor economy are in accommodation and food and drink. Funds received from the Visitor Levy will help to sustain Argyll and Bute's status as a popular holiday destination and as an area of outstanding natural beauty, built and cultural heritage. To ensure that the impacts of a successful visitor economy are managed effectively in support of the Council’s priorities and outcomes highlighted in the Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy). Page 294
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Description of proposal Argyll and Bute Council intends to utilise the powers granted by the Visitor Levy (Scotland) Act 2024 to impose a levy in respect of persons staying in certain types of accommodation overnight in its local authority area. The scheme will come into force a minimum of 18 months after the final approval date in which Argyll and Bute Council publishes its final scheme. Details of the Levy are here Argyll and Bute Visitor Levy | Argyll and Bute Council (argyll- bute.gov.uk) Business Outcome(s) / Corporate Outcome(s) to which the proposal contributes 1. Economic Strategy 2024-2034 and Action Plan 2024-2027 2. Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy). Lead officer details: Name of lead officer Fergus Murray Job title Head of Development and Economic Growth (DEG) Department DEG Appropriate officer details: Name of appropriate officer Kirsty Flanagan Job title Executive Director Department Executive Director responsible for DEG Sign off of EqSEIA Date of sign off Page 295
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Who will deliver the proposal? Economic Growth and Revenues and Benefits Team with the possibility of a national system underpinning this. Section 2: Evidence used in the course of carrying out EqSEIA Consultation / engagement A Visitor Levy pre-consultation survey has now closed with 1254 responses. Argyll and the Isles Tourism Co-operative and VisitScotland, members of the Shadow Visitor Levy Forum, have delivered six consultation sessions on the following dates, 23rd Oct, 30th Oct (x2), 6th Nov, 7th Nov and14th Nov 2024 . A timeline and further information on the activity can be found in paragraph 3.9, Table 1 in the Special Council paper, 20th December 2024. Officers will engage with the NHS on any potential impacts for patients and how this can be mitigated. Data The Scottish Tourism Economic Activity Monitor (STEAM) has been the main data source used. ARGBU Final STEAM FINAL 01-Jul-24 CC.pdf The council is also purchasing CoStar (hotels) and Key Data (self-catering) which includes information such as occupancy rates. *Note a copy of the PDF is available on request Other information A timeline and further information on the activity can be found in paragraph 3.9, Table 1 in the Special Council paper, 20th December 2024. Gaps in evidence There is a need to consider the impact on patients within the area who require accommodation for their onward treatment. There is uncertainty as to the number of businesses that will be affected and how the effects of the legislation will work in detail. In addition, there are large gaps in the data surrounding occupancy rates, which may bring further uncertainties. As yet the income from the levy is an initial estimate and with limited evidence at present to assess any impacts on key groups if a Visitor Levy Is implemented. To be reviewed further to completion of the analysis undertaken by University of Edinburgh where additional data sources such as CoStar and Key Data have been provided. Page 296
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Section 3: Impact of proposal Impact on service users: Negative No impact Positive Don’t know Protected characteristics: Age x Disability x Ethnicity x Sex x Gender reassignment x Marriage and Civil Partnership x Pregnancy and Maternity x Religion x Sexual Orientation x Fairer Scotland Duty: Mainland rural population x Island populations x Low income x Low wealth x Material deprivation x Area deprivation x Socio-economic background x Communities of place x Communities of interest x If you have identified any impacts on service users, explain what these will be. The key impacts that the Act requires the Council to consider are as follows: 1. Equalities 2. Business 3. Visitors 4. Communities 5. Council The attached document details impacts on numbers 2-5 whilst this EQSIA details Equalities impacts. Communities of place may be enhanced by income from the Visitor Levy on local services, leisure, culture and heritage related to the tourism industry. Communities of interest may also benefit from income from the Visitor Levy, particularly through business support and support for culture and heritage. The Visitor Levy Bil has been drafted to protect those who are experiencing socio- economic disadvantage from being liable to pay the levy. Because the bill only applies on overnight accommodation where the person has an ordinary place of residence, the following groups are excluded from the scope of a Visitor Levy: • People who are homeless or at risk of homelessness • People whose main residence is unfit for habitation • Asylum seekers and refugees • Individuals who have arrived in the UK through other Home Office schemes. The Bill explicitly excludes members of the Gypsy/Traveller community staying on dedicated sites from being liable to pay the Visitor Levy. Page 297
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The method of reimbursement or exemption will be defined before the Visitor Levy is implemented. If any ‘don’t knows have been identified, at what point will impacts on these groups become identifiable? The proposal may have an impact on those seeking treatment for medical conditions where they require an overnight stay however this may be subject to reimbursement by NHS. Further evidence is required on how this would work in practice. Impact on service deliverers (including employees, volunteers etc): Negative No impact Positive Don’t know Protected characteristics: Age X Disability X Ethnicity X Sex X Gender reassignment X Marriage and Civil Partnership X Pregnancy and Maternity X Religion X Sexual Orientation X Fairer Scotland Duty: Mainland rural population X Island populations X Low income X Low wealth X Material deprivation X Area deprivation X Socio-economic background X Communities of place X Communities of interest X If you have identified any impacts on service deliverers, explain what these will be. There may be impacts due to the collection system and the process of exemptions e.g. some businesses may not have sufficient IT skills to enable them to collect the levy efficiently. Currently, HMRC is considering the Levy as part of the turnover of businesses. This will have an impact on VAT registration. It is proposed by industry representatives on the Shadow Visitor Levy Forum that industry liaises with the Scottish Tourism Alliance to lobby the HMRC on their behalf on this issue. Written representation will also be made on this issue from the Highlands and Islands Economic Partnership as agreed at the HIREP meeting on Thursday, 28th November 2024. If any ‘don’t knows have been identified, at what point will impacts on these groups become identifiable? These will be addressed on an ongoing basis throughout the full consultation and during the implementation period. Argyll and Bute Council has set up a dedicated web page, including an FAQ section here. How has ‘due regard’ been given to any negative impacts that have been identified? n/a Page 298
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Section 4: Interdependencies Is this proposal likely to have any knock-on effects for any other activities carried out by or on behalf of the council? yes Details of knock-on effects identified 1. Additional resource for administration of the scheme, including staff and systems costs. 2. Income from the Visitor Levy will bring benefits to delivery of tourism and infrastructure related services. This may include services such as public toilets. 3. Income from the Visitor Levy will assist the delivery of Argyll and Bute Council’s Economic Strategy and Action Plan, particularly in relation to tourism, leisure and creative industries. 4. Contractors and local residents staying within the area using applicable holiday accommodation will be subject to the Visitor Levy. Section 5: Monitoring and review How will you monitor and evaluate the equality impacts of your proposal? Officers will consult with NHS to understand any implications of the Visitor Levy on patients in the area. Officers will annually monitor the impact of the Visitor Levy on how people with disabilities are impacted by the Visitor Levy as required and report this to the Council’s Policy and Resources Committee and subsequently to the appropriate department within the Scottish Government. The council will review the Argyll and Bute Visitor Levy Scheme every three years to assess whether the scheme is successfully achieving its objectives and measure the impact of the scheme on businesses and communities. The review will be reported, along with detail, through the appropriate channels, on how the income has been spent and the benefits which the Visitor Levy-funded projects have brought. Page 299
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Conclusion – Impact Assessments The Visitor Levy Scheme for Argyll and Bute has the potential to generate significant benefits for the local economy, community aspirations, culture and heritage, and tourism infrastructure while promoting sustainable tourism practices. However, the Visitor Levy Scheme introduces new administrative burdens for both businesses and the council, with particular challenges for island communities that face unique economic and infrastructure constraints. Support for businesses, effective communication, transparent, user-friendly systems, and a clear demonstration of how the levy benefits both visitors and residents will be crucial in ensuring the scheme’s success. Ensuring the fair allocation of funds to address the distinct needs of island communities, alongside proactive monitoring and adjustments to the Visitor Levy Scheme, will be essential to mitigate any negative impacts on tourism businesses, communities, and visitor experiences throughout the region. Page 300
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Appendix 3: Consultation Document - Draft Argyll and Bute Visitor Levy Scheme Foreword by the Council Leader, Jim Lynch Argyll and Bute provides so many reasons for visitors to choose to be here, and the visitor economy is a key local industry. We have to be ambitious for the future of our visitor economy. We also have to be realistic about funding its future. Visitors expect and rely on public services that are used also by our communities. With less and less public funding for many of these shared services, we have to consider all possible opportunities for vital investment. The national Visitor Levy legislation is about that – raising funds to benefit visitors and residents. Could investment from a levy be used to sustain and improve visitors’ experience, and so keep people coming to Argyll and Bute? With less money to spend on public services, if Argyll and Bute doesn’t have a levy, does it make the area less competitive as a visitor destination? If the area has a levy, what would local people and businesses want it to be spent on to benefit them, and how could we make that happen? To help us consider these and other points we are running a consultation exercise and encouraging as many people as possible to take part from businesses, communities, tourism organisations and visitors to the area. The national legislation provides an opportunity for significant investment, to protect visitor economies from shrinking public budgets, and deliver benefits for both visitors and residents. The earliest a Visitor Levy could be introduced in Argyll and Bute is 2027. Thank you to everyone who will take the time to complete this consultation – the feedback you give us will be an important step in helping us assess a levy for Argyll and Bute, with the focus being as mentioned, on benefiting our local visitor economy and communities. Page 301
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Overview Our visitor economy is a is a key industry for Argyll and Bute. Visitors expect and rely on services that are used also by our communities. The national Visitor Levy (Scotland) Act 2024 gives the opportunity to raise investment to sustain these shared services, support the future of the visitor economy and deliver benefit both visitors and residents. Argyll and Bute Council has developed a draft Visitor Levy Scheme to support tourism as a sustainable beneficial part of Argyll and Bute community life and economy. With growing tourism pressures and shrinking public sector budgets we need to investigate options that could help raise income locally, to sustain public services needed and affected by the tourism industry and make improvements to the future delivery of tourism across Argyll and Bute. Many other Scottish councils are also considering implementing a Visitor Levy. If Argyll and Bute Council introduces such a levy, which at the earliest will be early 2027, the money raised must be used specifically for the benefit of the visitor economy, such as towards making local facilities and services better. Local culture, events and festivals could also benefit. What is a Visitor Levy and how much would it cost? A Visitor Levy is a payment based on the cost of most types of paid, overnight accommodation. Most people paying to stay for an overnight visit to Argyll and Bute would have to pay the levy (exemptions are noted in the Act). There are questions in this consultation about how much a levy should be, if we had one; and what you would like to see the million pound investment spent on. There is also the opportunity to tell us if you disagree with a levy, and if so, how would you rather see the future of the visitor economy funded. For FAQs see: Visitor Levy Guidance I VisitScotland.org and Argyll and Bute Visitor Levy | Argyll and Bute Council (argyll-bute.gov.uk) What’s next? Our focus is on developing a scheme that would benefit visitors, residents and the visitor economy. We would therefore welcome your views on key aspects of the scheme, by answering these consultation questions. The results of this consultation will be drafted into the required consultation report that will be discussed by councillors in the spring of 2025 and will help to decide whether the proposed Argyll and Bute Council Visitor Levy Scheme is changed, accepted or rejected. Page 302
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In addition, an ongoing programme of communication and engagement with businesses and communities will be arranged over the formal 12- week consultation period, January to March 2025. Further information will be provided in due course on the council’s Visitor Levy web page, see: Argyll and Bute Visitor Levy | Argyll and Bute Council. This survey should take around 20 minutes to complete. Word text below will be transferred onto a MS Form survey with appropriate routing to various question sets for businesses, residents and visitors. Q1. Your details Postcode: : Q2. What is your connection with Argyll and Bute? o I Live or Work within Argyll and Bute (Residents) o I am or have been a tourist or social visitor to Argyll and Bute, but do not live in the area. (Visitors) o I have business, commercial or property ties to Argyll and Bute (Businesses). (Elected members should note that some questions are repeated in the residents, visitors and businesses sections). Page 303
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QUESTIONS FOR RESIDENTS Argyll and Bute Draft Visitor Levy Scheme Strategic Objectives The aim of the draft Visitor Levy Scheme is to sustain Argyll and Bute's status as an area of outstanding natural beauty, culture and heritage and to ensure that the impacts of a successful visitor economy are managed effectively for the area. The draft scheme is based on turning levy investment into benefit for visitors and residents, through the tourism priorities set out in the Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy): ➢ Extending the season and spreading visitors across the destination. ➢ Reaching new audiences: marine, coastal, cultural and outdoor tourism. ➢ Sustaining and improving the visitor offer. ➢ The journey towards net zero. Q3. To what extent do you agree or disagree with the Visitor Levy Scheme objectives? Objective Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don’t know Extending the season and spreading visitors across the destination e.g. infrastructure, amenities, events and marketing Reaching new audiences: marine, coastal, cultural and outdoors tourism e.g. visitor product development, inter-island connectivity, step ashore facilities, showcasing producers, culture & heritage. Sustaining and improving the visitor offer e.g. transport options, destination investment (inc. toilets), support for individual tourism businesses to help them improve their products and services (e.g. grants, training, advice, toolkits). Page 304
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The journey towards net zero e.g. investment in sustainable tourism, business advice and support, low-carbon transport networks If there are other things you would like to see a Visitor Levy spent on please tell us here (1,000 characters). Page 305
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To ensure the administration requirements of the Visitor Levy Scheme are kept to a minimum, and to maximise the revenues generated to sustain, support and develop the visitor economy, no local exemptions are proposed beyond those set out nationally as outlined in the Section 7, paragraph 7.2 of draft Visitor Levy Scheme or Section 17 of the Visitor Levy Guidance. For example, those with a disability would be exempt, those accompanying them would not be. Q4. To what extent do you agree or disagree with this position on local exemptions? o Strongly agree o Agree o Neither agree nor disagree o Disagree o Strongly disagree o Don’t know Please provide commentary to support your response. Q5. To what extent do you agree with the Argyll and Bute Council proposal to set the levy rate at 5%? o Strongly agree – go to Q8 o Agree - go to Q8 o Neither agree nor disagree - go to Q8 o Disagree – go to Q6 o Strongly disagree - go to Q6 o Don’t know - go to Q8 o I don’t support a levy being introduced across Argyll and Bute - go to Q7 Please provide commentary to support your response. Q6. If you do not agree with a levy being 5%, what rate would you consider is appropriate. o The levy rate should be less than 5% - go to Q8 o The levy rate should be greater than 5% - go to Q8 o Don’t know – go to Q8 Please provide commentary to support your response. Q7. If you do not support a levy, how would you suggest that investment in our tourism infrastructure and services is paid for? Comments welcome. Page 306
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Q8. Do you think there should be a cap on the number of nights of accommodation that a visitor should pay a levy? o Yes o No o Don't Know Please provide commentary to support your response. Thank you for taking the time to complete this survey. Your thoughts and views are gratefully received. Page 307
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QUESTIONS FOR VISITORS Argyll and Bute Draft Visitor Levy Scheme Strategic Objectives The aim of the draft Visitor Levy Scheme is to sustain Argyll and Bute's status as an area of outstanding natural beauty, culture and heritage and to ensure that the impacts of a successful visitor economy are managed effectively for the area. The draft scheme is based on turning levy investment into benefit for visitors and residents, through the tourism priorities set out in the Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy): ➢ Extending the season and spreading visitors across the destination. ➢ Reaching new audiences: marine, coastal, cultural and outdoor tourism. ➢ Sustaining and improving the visitor offer. ➢ The journey towards net zero. Q3. To what extent do you agree or disagree with the Visitor Levy Scheme objectives? Objective Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don’t know Extending the season and spreading visitors across the destination e.g. infrastructure, amenities, events and marketing Reaching new audiences: marine, coastal, cultural and outdoors tourism e.g. visitor product development, inter-island connectivity, step ashore facilities, showcasing producers, culture & heritage Sustaining and improving the visitor offer e.g. transport options, destination investment (inc. toilets), support for individual tourism businesses to help them improve their products and services (e.g. grants, training, advice, toolkits) Page 308
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The journey towards net zero e.g. investment in sustainable tourism, business advice and support, low-carbon transport networks If there are other things you would like to see a Visitor Levy spent on please tell us here (1,000 characters). Page 309
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The Visitor Levy gives the opportunity to raise income from visitors that would be invested in projects or services that would sustain and improve a visitors’ experience in our area. Q4. What attracts you to Argyll and Bute? (please select top 3 reasons) o Argyll and Bute’s reputation o The scenery and landscape o The history and culture o To visit a film location o Personal event / celebration (anniversary, wedding etc.) o To visit family and friends who live in Argyll and Bute o To explore Argyll and Bute and its surrounding regions / rest of Scotland o To visit a particular attraction o The friendly local people o The climate and weather o Value for money o Other special event (music concert, sports match etc.) o Holidayed before and wanted to return o Other (please specify) Q5. As a visitor to Argyll and Bute, what type of accommodation are you staying in? o Hotel o B&B or guest house o Self-catering o Homestay, e.g., Airbnb o Student accommodation o Caravan / campervan o Campsite o Staying with friends and families o Other (please specify) Q6. As a visitor to Argyll and Bute, do you have any suggestions for how the visitor offer could be improved in our area? Comments welcome. Page 310
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To ensure the administration requirements of the Visitor Levy Scheme are kept to a minimum, and to maximise the revenues generated to sustain, support and develop the visitor economy, no local exemptions are proposed beyond those set out nationally as outlined in the Section 7, paragraph 7.2 of draft Visitor Levy Scheme or Section 17 of the Visitor Levy Guidance. For example, those with a disability would be exempt, those accompanying them would not be. Q7. To what extent do you agree or disagree with this position on local exemptions? o Strongly agree o Agree o Neither agree nor disagree o Disagree o Strongly disagree o Don’t know Please provide commentary to support your response. Q8. To what extent do you agree with the Argyll and Bute Council proposal to set the levy rate at 5%? o Strongly agree – go to Q11 o Agree - go to Q11 o Neither agree nor disagree - go to Q11 o Disagree – go to Q9 o Strongly disagree - go to Q9 o Don’t know - go to Q11 o I don’t support a levy being introduced across Argyll and Bute - go to Q10 Please provide commentary to support your response. In particular, would a Visitor Levy make you less likely to book accommodation across Argyll and Bute? Q9. If you do not agree with a levy being 5%, what rate would you consider is appropriate. o The levy rate should be less than 5% - go to Q11 o The levy rate should be greater than 5% - go to Q11 o Don’t know – go to Q11 Please provide commentary to support your response. Page 311
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Q10. If you do not support a levy, how would you suggest that investment in our tourism infrastructure and services is paid for? Comments welcome. Q11. Do you think there should be a cap on the number of nights of accommodation that a visitor should pay a levy? o Yes o No o Don't Know Please provide commentary to support your response. Thank you for taking the time to complete this survey. Your thoughts and views are gratefully received. Page 312
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QUESTIONS FOR BUSINESSES Argyll and Bute Draft Visitor Levy Scheme Strategic Objectives The aim of the draft Visitor Levy Scheme is to sustain Argyll and Bute's status as an area of outstanding natural beauty, culture and heritage and to ensure that the impacts of a successful visitor economy are managed effectively for the area. The draft scheme is based on turning levy investment into benefit for visitors and residents, through the tourism priorities set out in the Argyll and the Isles Strategic Tourism Partnership’s Tourism Strategy 2022-2025 (Argyll and Isles Strategic Tourism Partnership strategy): ➢ Extending the season and spreading visitors across the destination. ➢ Reaching new audiences: marine, coastal, cultural and outdoor tourism. ➢ Sustaining and improving the visitor offer. ➢ The journey towards net zero. Q3. To what extent do you agree or disagree with the Visitor Levy Scheme objectives? Objective Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don’t know Extending the season and spreading visitors across the destination e.g. infrastructure, amenities, events and marketing Reaching new audiences: marine, coastal, cultural and outdoors tourism e.g. visitor product development, inter-island connectivity, step ashore facilities, showcasing producers, culture & heritage Sustaining and improving the visitor offer e.g. transport options, destination investment (inc. toilets), support for individual tourism businesses to help them improve their products and services (eg grants, training, advice, toolkits) Page 313
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The journey towards net zero e.g. investment in sustainable tourism, business advice and support, low-carbon transport networks If there are other things you would like to see a Visitor Levy spent on please tell us here (1,000 characters). Page 314
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Q4. Please advise on the size of your business o Employ 1 member of staff (including yourself) o Employ 2-9 staff o Employ 10-49 staff o Employ 50-250 staff o Employ more than 250 staff Q5. What sector does your business operate in? o Hospitality o Retail o Self-catering accommodation o Tourism including visitor attractions o Food and drink o Leisure o Event management o Culture, heritage and creative industries o Trades / construction / engineering o Professional services o Agriculture and forestry o Vehicle and motor trade o Domestic services o Marine services o Beauty / personal services o Transport / distribution o Education o Manufacturing o Public sector o Charity o Third sector o Other (please specify) Q6. What is your approximate turnover? o Up to £85,000 o £85,000 to £90,000 o £90,001 to £250,000 o £250,001 to £1 million o Over £1 million To ensure the administration requirements of the Visitor Levy Scheme are kept to a minimum, and to maximise the revenues generated to sustain, support and develop the visitor economy, no local exemptions are proposed beyond those set out nationally as outlined in the Section 7, paragraph 7.2 of draft Visitor Levy Scheme or Section 17 of the Visitor Levy Guidance. For example, those with a disability would be exempt, those accompanying them would not be. Page 315
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Q7. To what extent do you agree or disagree with this position on local exemptions? o Strongly agree o Agree o Neither agree nor disagree o Disagree o Strongly disagree o Don’t know Please provide commentary to support your response. Q8. To what extent do you agree with the Argyll and Bute Council proposal to set the levy rate at 5%? o Strongly agree – go to Q11 o Agree - go to Q11 o Neither agree nor disagree - go to Q11 o Disagree – go to Q9 o Strongly disagree - go to Q9 o Don’t know - go to Q11 o I don’t support a levy being introduced across Argyll and Bute - go to Q10 Please provide commentary to support your response.. Q9. If you do not agree with a levy being 5%, what rate would you consider is appropriate. o The levy rate should be less than 5% - go to Q11 o The levy rate should be greater than 5% - go to Q11 o Don’t know – go to Q11 Please provide commentary to support your response; Q10. If you do not support a levy, how would you suggest that investment in our tourism infrastructure and services is paid for? - then go to Q12. Comments welcome. Page 316
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Q11. Do you think there should be a cap on the number of nights of accommodation that a visitor should pay a levy? o Yes o No o Don't Know Please provide commentary to support your response. Q12. What set-up and/or operational support for your business would you welcome, if a Visitor Levy Scheme is agreed? Please provide commentary to support your response. Thank you for taking the time to complete this survey. Your thoughts and views are gratefully received. Page 317
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ARGYLL AND BUTE COUNCIL COUNCIL COMMERCIAL SERVICES, EDUCATION 20 DECEMBER 2024 AND FINANCIAL SERVICES LEARNING ESTATE INVESTMENT PROGRAMME (LEIP) MULL CAMPUS UPDATE 1.0 EXECUTIVE SUMMARY The purpose of this report is to provide an update on the Learning Estate Investment Programme (LEIP) Mull 2-18 Campus project, which is now at site selection stage. The Council agreed to proceed with engagement, site selection and business case development at its meeting on 25th April 2024. Community engagement took place from 17th September to 4th October 2024 with a total of 352 responses received. Communities were asked what they thought were important factors to be considered when assessing potential sites. Key themes of the feedback were location, travel, ease of access, family unity, equity, access to facilities, community stability and curriculum range. The feedback received has been incorporated into the site selection criteria and relative weightings. There is a desire from some on Mull for a central High School but very little support to relocate the Early Learning and Primary School provision from Tobermory, and community members have asked to consider a split site solution. The additional costs of a split school have been researched and are likely to be in the region of £11-12.5m capital and £0.6-1m per annum revenue when compared to a campus model. Aside from cost, a 2-18 campus model is considered by the Council’s education service to deliver significant educational benefits compared to separate facilities, particularly in a rural island setting. The Iona community are unanimous that they wish to remain within the catchment area of Oban High School and have asked to be removed from the scope of the project. A call for sites ran from 27th August to 25th September 2024 and this identified a number of possible sites. This has been narrowed down to those that are potentially viable, which include sites in Tobermory and central locations on Mull, and a detailed technical assessment of the shortlisted sites is underway. The site selection criteria have been widened to incorporate feedback received during the engagement exercise and reflect the unique island factors and geography of Mull Page 319 Agenda Item 7
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and the islands, and a transport assessment has been undertaken. More detailed impact assessments on equality, island, economic, children’s rights and wellbeing and Fairer Scotland Duty are being carried out. These are expected to conclude in January to allow a recommendation report to be finalised for consideration at the next meeting of the full council scheduled for February 2025. Members are asked to consider the contents of this report and note the updated timescale for the site recommendation report which has extended to allow for these impact assessments to be undertaken. Page 320
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ARGYLL AND BUTE COUNCIL COUNCIL COMMERCIAL SERVICES, EDUCATION 20 DECEMBER 2024 AND FINANCIAL SERVICES LEARNING ESTATE INVESTMENT PROGRAMME (LEIP) MULL CAMPUS UPDATE 2.0 INTRODUCTION 2.1 This report provides an update on the Learning Estate Investment Programme (LEIP) Mull Campus project, which is now at site selection stage. A previous report was provided to the Council on 25th April 2024 where it was decided that the Council:- “noted the capital and revenue implications of the LEIP / Mull Campus project which were of a strategic financial nature” and “considered the project to be affordable at this time, and agreed that up to £5m from the previously earmarked LEIP funding be used to commence the Business Case, undertake engagement exercises, commence the site selection process and establish governance arrangements, with updates to be brought back to Members at appropriate gateway points.” 3.0 RECOMMENDATIONS 3.1 It is recommended that Members consider the contents of the report and note the updated timescale for a site recommendation to be made to full Council. Page 321
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4.0 DETAIL 4.1 Background 4.1.1 The Council submitted a bid for Scottish Government LEIP funding in October 2022 for a 2-18 campus on Mull and this was accepted in October 2023. The bid met the LEIP eligibility criteria on condition, with funding provided on a “like for like” basis to replace the existing Tobermory campus. 4.1.2 The potential cost implications of LEIP funding, which requires the Council to pay the full capital cost up front with up to 50% of eligible costs funded by Scottish Government over 25 years, were considered by the Council on 25th April 2024. The Council deemed the project to be affordable at that time and agreed to commence with business case development, engagement exercises and the site selection process. 4.1.3 The Mull Campus project is being delivered as part of the North Schools Programme, which is a partnership between hub North Scotland ltd and five local authorities to deliver eight schools. Three of these projects, including Mull Campus, are island schools. 4.2 Governance 4.2.1 Following Executive Leadership Team agreement to the proposed governance structure a project manager was appointed and core delivery team established in June 2024. The first Project Team was held in July 2024, and Strategic Board in August 2024, and these meet monthly. The Board will report to Council committees/ full Council as required at appropriate gateway and decision points. A copy of the reporting structure is attached in Appendix 1. 4.2.2 This is the first update report that has been provided to full Council since the establishment of the project governance structure. Regular updates are provided to the informal Political Sounding Board which comprises of the Council Leader and Policy Leads for Education and Commercial and Finance. 4.3 Community Engagement 4.3.1 A Community Sounding Board has been set up for the project which is formed of representatives of parent councils, community councils, community development trusts and other constituted community groups representing Mull, Iona and the islands, as well as staff and pupil voices. The purpose of the group is to advise the Mull Campus Project Team on how best to engage with the community in relation to the project, share project updates and information and for representatives to feedback to and on behalf of the groups they represent. 4.3.2 An intense period of community engagement was carried out between 17th September and 4th October 2024, where the Mull Campus team attended drop- in sessions at 10 different venues across Mull and Iona. Individuals could feedback online and the link and QR code to the online form was circulated widely over the 3-week period. A dedicated staff session was carried out in Page 322
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Tobermory, and pupil focus groups were held in all primary schools on Mull and Iona, the existing Tobermory campus and at the Oban School Hostel. 4.3.3 A total of 352 people contributed comments to the engagement. Over 200 attended in person during the 32 hours of drop-in session time, with 115 contributing online and 32 email or paper responses received. 4.3.4 The purpose of the engagement was to find out what communities affected by the site selection decision thought were important factors that should be considered when assessing potential sites. The feedback received was summarised in a community engagement analysis report (Appendix 2), published on 15th November 2024. The feedback has directly influenced and shaped the criteria and relative weightings that will be used by the technical team to assess potentially suitable sites. 4.3.5 The key themes and issues raised most frequently are summarised below: • Location: most people felt that the primary and/ or ELC provision must be kept in Tobermory. A split site with ELC and primary provision in Tobermory and a more centrally located high school was commonly requested. • Travel: wellbeing impact on children spending long portions of their day travelling, especially younger children. Poor transport infrastructure and environmental impact were also raised. • Ease of access: a campus easily accessible from good transport networks, with plenty of parking and safe pick up and drop off. Active travel was important to some, with a desire for children to be able to safely walk and cycle to school. • Family unity: avoiding children having to leave home through the week to board, families having the right to choose whether to board or stay at home and the rights of the child to education and a home life. The Iona community strongly requested to retain access to funded places at Oban High School, regardless of where the campus is located. • Equity: a desire for fairness and equity and creation of social cohesion between communities in the north and south. • Access to facilities: access to good facilities on campus and close by. This includes sports facilities and outdoor space, community facilities, shops and other activities. Equitable access to after school clubs whereby children do not have to rush away to catch ferries or buses home. • Community stability: the power of a campus to create community stability and sustainability, by either attracting and retaining people to live and work, or by supporting nearby businesses. Concern about depopulation was a common theme across all communities, with people worried about the impact on their local community if the campus was located elsewhere. • Expanded curriculum: there was a desire for an increased range of subjects including vocational subjects and easier access for teachers to travel to the campus from Oban to provide specialist teaching. Page 323
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4.3.6 Following the community engagement period, the level of public interest in the project remains high and there is a desire from some to know more about the sites that are currently being evaluated and to understand how the evaluation will take place and whether they will have further input to the process. Community members have asked for the assessment to take account of the area’s unique island and socio-economic factors and the United Nations Convention of the rights of the child. In addition, two specific requests have been made, which are outlined in sections 4.4 and 4.5. 4.4 Split Site Request 4.4.1 Following the community engagement exercise, Mull Community Council have asked the Council to consider a split site solution, with Early Learning and Primary School provision in Tobermory, and a more central High School. They issued a media release on 19th November expressing their concern at the current campus proposal. 4.4.2 Indicative capital and revenue costs of a split site solution have been developed to understand the potential cost impact, noting that these are estimates due to the early stage of the project. The anticipated additional costs compared to a joint campus solution are in the region of £11-12.5m capital and £0.6-1m per annum revenue. 4.4.3 Discussion has taken place with the Scottish Government LEIP team, including a joint meeting held at the request of community representatives. This confirmed that the funding metrics for LEIP are set and are on a “like for like” basis, and no additional funding can be provided for duplicate facilities such as dining halls, gym halls and sports facilities. Furthermore, the Scottish Government have also committed to additional ‘locational’ uplift factors for island locations and have forecast that a 40-50% award is a fair reflection of the project funding at this stage for a campus. Any additionality would need to be fully funded by the Council. The potential increase equates to a one third increase over a campus solution and is unlikely to be affordable. 4.4.4 Aside from the cost impact, the Council’s education service considers that there are significant educational benefits of a 2-18 campus model compared to separate primary and high school facilities, particularly in a rural island setting. These are outlined in more detail in Appendix 3 and include transitional benefits with a consistent approach to the child’s education for the entire length of their time in education, access to specialist teaching for primary age children, sharing of resources and promotion of intergenerational learning. 4.5 Iona Community 4.5.1 Iona Community Council and Iona Parent Council have asked for Iona to be removed from the project proposal, with the community unanimous that they wish to remain within the catchment area of Oban High School regardless of where the new campus is located on Mull. They have been advised that no recommendations will be made at this point, and their views will be included in the recommendation report presented to full Council in the new year. Page 324
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4.6 Site Selection 4.6.1 A call for sites was launched from 27th August to 25th September 2024 to seek suggestions of sites that may be suitable for the new Mull 2-18 Campus. This was shared widely with the community and issued to partner organisations. Eleven possible sites were identified through this process, and scoping visits were carried out in early October. The initial long list has been narrowed down to those that are potentially capable of accommodating the campus requirements, and a detailed assessment of the short list is underway. This includes sites in the Tobermory area and central locations on Mull. 4.6.2 Standard criteria are being used to assess each site’s ability to meet the educational requirements of the brief, technical deliverability (e.g. utilities, ground conditions, topography, flood risk and drainage), cost and risk. 4.6.3 These criteria were then widened to reflect the unique island factors and geography relevant to the project location on Mull. This includes what local communities said were important to them when selecting the sites, as detailed on page 13-14 of the engagement report (Appendix 2), transport and accessibility and socio-economic factors. Due to the large geographical area and heavy reliance on transport a detailed transport analysis of the impact of the different sites has also been carried out. 4.6.4 To ensure the Council complies with its legal obligations we are now in the process of carrying out more detailed impact assessments on equality, island, economic, children’s rights and wellbeing and Fairer Scotland Duty. These are due to conclude in January and once complete a recommendation report will be finalised for consideration at the next meeting of the full Council scheduled for February 2025. 5.0 CONCLUSION 5.1 The community engagement exercise for site selection for Mull Campus is complete and the feedback received has been incorporated into the criteria and relative weightings for the site selection process. 5.2 There is little support to relocate Early Learning and Primary School provision from Tobermory, however some members of the community would like to see a central High School. A request has been made to consider a split site solution, which would cost an additional £11-12.5m capital and £0.6-1m revenue, which is unlikely to be affordable to the Council. 5.3 The Iona community have asked to be removed from the scope of the project. 5.4 A detailed assessment of shortlisted sites is underway, and the timescale for this has been extended to allow further detailed impact assessments. 5.5 A recommendation report is expected to be provided to the next meeting of the full Council, scheduled for February 2025. Page 325
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6.0 IMPLICATIONS 6.1 Policy – The Council’s Learning Estate Strategy 2021 sets out an ambition to have Schools in category A or B in terms of suitability and condition. Delivering a new Campus on Mull is the no.1 priority in that strategy to address the suitability and condition of the current campus in Tobermory and is also a Corporate Policy. 6.2 Financial – On 25th April 2024 the Council deemed the project to be affordable at that time. A split site solution, requested by some members of the community, would cost in the region of an additional £11-12.5m capital and £0.6-1m revenue. 6.3 Legal – The UNCRC Rights of the Child achieved royal assent earlier this year, strengthening the legal rights of children and their families. This will be considered carefully as part of the site selection process. 6.4 HR – None at this stage. To be considered once the site for the campus is known. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics – An equality impact assessment is underway as part of the site selection process. 6.5.2 Socio-economic Duty – An economic impact assessment and Fairer Scotland Duty assessment is underway as part of the site selection process. 6.5.3 Islands Duty - An island communities impact assessment is underway as part of the site selection process. 6.6 Climate Change – The carbon impact of travel is being considered as part of the transport assessment for the site selection process. To be eligible for full LEIP we will require to meet certain criteria in respect of embodied carbon and operational energy use. 6.7 Risk – A risk register has been developed with risks and mitigation reviewed regularly by the Project Team and reported monthly to the Strategic Board. 6.8 Customer Service – A community engagement exercise has been undertaken to understand what was important to the communities when considering possible sites. Engagement with community members and groups is ongoing and a dedicated Community Sounding Board has been established. 6.9 The Rights of the Child (UNCRC) – A children’s rights and wellbeing impact assessment is underway as part of the site selection process. Douglas Hendry Executive Director with responsibility for Commercial Services and Education Policy Lead for Education Audrey Forrest 6th December 2024 Page 326
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For further information contact: Head of Commercial Services – Ross McLaughlin Head of Education and Lifelong Learning and Chief Education Officer – Jen Crocket Head of Education – Learning and Teaching – Wendy Brownlie APPENDICES Appendix 1 - Mull Campus Project Reporting Structure Appendix 2 - Mull Campus Community Engagement Report Appendix 3 - Educational Benefits of 2-18 Campus Model on Mull Page 327
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Appendix 1 - Mull Campus Project Reporting Structure Argyll and Bute Council Relevant Council Committee (as deemed appropriate) Strategic Board Project Team Political Sounding Board Community Sounding Board Governance and reporting Information and advice Page 328
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Mull Campus Community Engagement Report Appendix 2Page 329
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Ryder Architecture Limited Newcastle London Glasgow Liverpool Manchester Bristol Hong Kong Vancouver www.ryderarchitecture.com Page 330
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Contents 4 5 7 9 13 15 16 29 35 38 44 Project number 10742 Document reference 10742-RYD-00-XX-TFN-A-0000-S2-P12 Revision P12 Date 11 November 2024 Author Soo Darcy Checked by Lexy Fletcher This document has been designed to be viewed / printed A4 double sided. Methodology Respondents Key Themes Spotlight on Location Site Selection Wider Impact of the Project Themes by Location School Engagement – Staff and Pupils Appendix 1 – Data Tables Appendix 2 – Boards Appendix 3 – Comments Page 331
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4 Methodology Image captionImage caption As part of ongoing engagement with communities of Mull and Iona, a series of drop in public engagement sessions was held between 17 and 25 September 2024. Sessions were held in the following locations: • Craignure Hall • Tobermory Scout Hall • Tobermory High School • Salen Church Hall • Salen Primary School • Ulva Primary School • Dervaig Village Hall • Lochdonhead Primary School • Iona Village Hall • Bunessan Community Hall Every session was attended by representatives from the Council project team, as well as an engagement consultant from Ryder Architecture. Attendees were given the opportunity to review information on boards, talk to the project team, and feed back their comments anonymously. Comments could also be returned via email or an online survey, which remained open until midnight on 4 October. The purpose of this engagement was to understand what communities and individuals think are the important factors that should be considered when assessing the potential sites for the campus. Feedback will be taken into consideration when finalising the site assessment criteria and the relative weightings of each. The information boards can be found in the Appendix to this report. The engagement sessions generated a large volume of feedback in the form of post it notes, letters, emails and responses via the online feedback form. We have taken each of those responses and coded them into their constituent themes, building up a comprehensive set of themes based on the content of all comments. By assigning each comment into its constituent themes, we have been able to understand the nuance of every comment as well as creating a large data set that can be analysed overall or broken down into individual locations. This analysis process inevitably has an element of subjectivity to it. However, every care has been taken to analyse the feedback in as consistent, transparent and fair a manner as possible by a research consultant independent of the council who was present at the engagement sessions, and who therefore has a good understanding of the issues raised in each location. It should also be noted that, as the online survey was anonymous, it is possible that people commented more than once (or attended in person as well as commenting online). This was not prevented outright as it would have removed anonymity and potentially limited accessibility. However, as will be seen throughout this report, we have reported numbers for completeness but focused on the qualitative feedback and themes, not least because some locations have significantly fewer respondents than others. In addition, the online survey software allows us to check for large numbers of duplicate submissions to ensure we mitigate the risk of people overtly skewing the results. Page 332
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5 Methodology Respondents Image captionImage caption A total of 352 people contributed comments to the engagement, via several channels: Location (where stated) is shown below. Please note, location of ‘in person’ attendees is based on the session they attended rather than a stated home address, therefore numbers are approximate. Otherwise, those filling out the online survey chose the location closest to their home, and those emailing were asked to provide an approximate location. Where necessary, these have been assigned to a closest location from the list below for the purposes of analysis. Page 333
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6 Image captionImage caption Attendees and those who completed the online survey were asked to provide their age bracket. This was optional, and was provided by 288 people as follows: Page 334
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7 Key Themes Image captionImage caption The full set of themes broken down into their detailed drivers are included later in this report, as are spotlights on site selection criteria, location preferences and other issues raised that may Comments about the location of the whole campus, primary provision, and / or high school. Many people felt that primary and / or ELC provision must be kept in Tobermory, meaning that a split site with a more centralised high school was the most commonly requested solution to providing an equitable and accessible campus. Some queried whether a hostel on Mull was a possibility. Concerns about the increase in travel if children are to be transported to a location outside of Tobermory. The key issues raised were: • Poor infrastructure such as road conditions, winter weather, lack of buses, access for families without cars • Wellbeing impact on children spending long portions of their day travelling, especially younger children. Emphasis on length of journey, not distance, due to the nature of roads on Mull • Environmental impact of increased travel • Impact on children who are neurodiverse, or have other reasons to avoid long travel such as experiencing travel sickness or bullying Keeping families together and avoiding children having to leave home through the week to board. There were additional themes around families having the right to choose whether to board or stay at home, and comments about the rights of children to education and a home life. However, those on Iona strongly requested the right to retain access to funded places at Oban High School, regardless of where the campus is located on Mull. The importance of an equitable solution that provides access for as many children as possible. These comments tended to be rooted in a desire for fairness and equity, and were often combined with comments about keeping families together and creating more social cohesion between the communities in the north and south. The campus should be easily accessible from good transport networks, with plenty of parking and safe pick up and drop off areas. Active travel is also important to some, with a desire for children to be able to safely walk and cycle to school. affect communities more broadly. Here we outline some of the key themes and issues that were raised most frequently across the majority of locations: Page 335
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8 Image captionImage caption The power of a campus to create community stability and sustainability, whether by attracting and retaining people to live and work in a location, or by supporting the shops and cafes nearby. For some, this was about a specific location – for example, supporting the stability of the Ross of Mull or avoiding depopulation of the north. For others, it was about the sustainability of Mull and islands as a whole. Access to good facilities both on campus and close by. This includes space for sports facilities and other outdoor activities such as learning and socialising, space for community facilities such as a library, shops and other activities somewhere near the school so children can socialise. This includes equitable access to after school clubs whereby children do not have to rush away to catch ferries or travel long bus journeys. The campus should be able to provide a range of subject areas including vocational subjects, either by space provision and / or by making use of teachers who have easy access from Oban. Page 336
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9 Spotlight on Location Overview Image captionImage caption Looking only at comments related to location, almost 40 percent of people said primary and / or ELC provision (typically both) should be retained in Tobermory. These comments include both people favouring a split campus, and those who may have favoured a full campus elsewhere but want to retain primary provision in Tobermory as well. A further 24 percent generally favoured Tobermory as the campus location. Comments relating to primary and ELC provision in Tobermory “Lack of a primary school will kill Tobermory as a community – it will become a retirement and Airbnb town without a primary school.” – Tobermory “It’s ridiculous to consider losing a school in Tobermory when a third of the population lives here. We need a school!” – Tobermory “From the island’s point of view, central site would be much more sensible and equitable. But it does not do good for Tobermory to be left without early learning and childcare and primary.” – Ulva “Is there any possibility the campus could be split? I don’t think people realised we were talking about more than just a high school. It’s put a different spin on things – I’d love a more central high school but I’d hate for Tobermory to be left without primary.” – Lochdonhead 34 percent are in favour of either the high school (16 percent) or a general campus (18 percent) being somewhere central but did not specify a location. A further 15 percent specified Craignure as a suitable location (seven percent for the high school, eight percent as a general campus location). Page 337
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10 Overview Image captionImage caption Comments relating to a general preference for a campus in Tobermory “Stay in Tobermory to prevent loss of children from here to Oban – people will send their children there if it moves. We don’t want to lose our children.” – Tobermory “Choose Tobermory, it’s more accessible. I don’t think community facilities will be as well used in centre.” – Tobermory “Logistics and number of kids, it’s better in Tobermory. Don’t want to bus large number of kids.” – Tobermory “Tobermory is the largest community on the island. Teachers and families would have to relocate.” – Tobermory Comments relating to a centralised campus or high school “I feel this is a great opportunity to build a school for the whole island. A more central location would make this possible.” – Salen “Central site, community growth, all children growing up together.” – Craignure “There is no question of where it should be. Fair is a central location for all children on the island.” – Bunessan and Ross of Mull “Getting kids together in central location (primary and secondary) is optimum position.” – Tobermory Page 338
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11 Site Preferences by Location Image captionImage caption The table below shows the percentage of people in each location who commented on the geographical location of the site. How to read this table Each column shows a different location. The number of people who engaged in each location is shown in brackets next to the place name. Percentages in each column are calculated separately based on those figures. The overall percentage (average) is shown on the right. As Overview with all data shown in this report, some locations had far fewer people than others so caution should be taken when interpreting numbers. Percentages should be interpreted as indicative of general trends only, rather than representative of the full community in each location. Red boxes mean a very low percentage of people gave a particular response (less than five percent) whereas bright green boxes show responses that were mentioned by more than 30 percent of people in any given location. Page 339
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12 Site Preferences by Location An interesting dynamic for the location of the campus is the extent to which people stated their preference is not necessarily where they themselves live, highlighting an appetite for an equitable location – although this was typically for high school provision rather than the full campus: Primary and ELC provision should not leave Tobermory. This was a clear finding from our responses. Residents from most locations do not think that primary teaching or ELC should leave Tobermory due to the amount of travelling that would be required of younger children. This was the most popular response for people in Tobermory, but also in Bunessan, Lochdonhead, Dervaig and Ulva. A central location is a popular option for its overall accessibility. Residents in Craignure and Salen were the most vocal in stating their support for a centrally located campus. This is likely reflective of the need for the school to be located near the ferry port and in a position that is most accessible for people from both the north and southern parts of the island. Image captionImage caption Page 340
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Site Preferences by Location 13 Site Selection Key Criteria Image captionImage caption The remaining themes can be approximately divided into two types: factors that can be applied to the site selection process directly, and factors that people believe the wider process itself should be taking into account. The top criteria for site selection can be summarised as: 1. Keeping travel times to a minimum. This is particularly for younger children, but generally applies overall – and is important due to the length of journeys (not necessarily the distance travelled), concerns about road and transport infrastructure, and environmental impact. 2. Keeping families together / avoiding children going off island (unless it is their choice to do so) 3. Providing an equitable solution that offers the best access for as many people as possible, and uniting the north and south populations 4. Being able to sustain local populations and economies, as well as attracting people to Mull and Iona in general. This includes the ability for businesses to flourish close to the campus site due to pupils eating lunch and families spending more time in the local area or choosing to live there. (Please note, people were concerned about the impact of depopulation on both Tobermory / the north and the Ross of Mull – the percentages shown below will be affected by the relative numbers of people from each location, as there were more attendees from Tobermory, but this issue was important across both locations) 5. Plenty of outside space for good sports facilities and outdoor activities such as learning and socialising 6. Equitable access to after school clubs – this includes having the space and staff to provide them, but mainly relates to children not having to rush off to ferries and buses, and factoring in long travel times, thereby losing the opportunity to attend extracurricular activities 7. Close to existing services such as shops and sports facilities so that children get the benefit of socialising and mixing with local communities 8. Good transport links and plenty of space for parking and safe, accessible drop off 9. Providing access to good community facilities such as a library, gym and adult learning on the campus 10. The ability to provide more subjects, including vocational subjects, and easier access for teachers to travel to the campus from Oban to provide specialist teaching 11. The opportunity to develop, or make use of existing, active travel routes so children can walk and cycle to school 12. The ability to retain existing staff and attract new staff, including proximity to affordable housing. (Note that these points are conflicting, as most people who commented on existing staff thought they would not want to travel far out of Tobermory if they already live there, whereas the attraction and retention of new staff tended to be based on having the campus in a more central location.) Page 341
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14 Image captionImage caption 13. Limiting the impact on the existing school and / or surrounding residents during construction (for example, by limiting decant or loss of sports facilities) 14. Provision of good technology that can support online / distance learning and potential links with other educational establishments 15. Space for future expansion – although we have included this point within general comments about the design of the school below, it is worth noting that several people mentioned the importance of a site large enough to account for future expansion and / or a potential hostel, should funding become available in future Page 342
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15 Comments About the Wider Impact of the Project Image captionImage caption A further set of issues, concerns and requests tended to relate more to the impact of the project itself and, whilst they may not constitute site selection criteria per se, they should be considered as part of the wider project. In particular, they do have some conflicting implications for the criteria above, particularly “You’re going through a very quick process to find sites. At what point are you going to do a thorough review of the impact on island communities, travel times, etc?” – Iona “Why were we not asked about whether a 2-18 campus would work for us, before the funding was discussed?” – Lochdonhead “Sustainable campus design and function, ie highly insulated fabric first approach, with more passive services (eg natural vent and light etc).” – Ulva “Moving a school from the mostly populated area of Mull is ridiculous. If you’re a business which was successful and people came from far and wide, would you move it? No? So why move a school that upsets the masses, to please the few? Unfortunately people decided to live out in the sticks and should understand that that’s the life they have chosen to have, to make some sacrifices. People live in Tobermory to make it easier on the whole family and school life. People who decide to live far away, that’s their choice.” – Tobermory Comments relating to the wider impact of the project in relation to families who live on Iona, who requested that their children retain the right to funded places at Oban High School. If this is granted, then the implications of criteria one to four above are significantly different than if Iona is factored into travel logistics and a desire to keep children on island. Page 343
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16 Themes by Location Overview Image captionImage caption The following section summarises the top issues and criteria mentioned by attendees and survey respondents in each location. The map summarises high level themes, followed by a more detailed breakdown of each location. Please note, due to the relatively low numbers of people in some locations, the charts in this section of the report show raw counts (ie number of people) rather than percentages – the latter being shown elsewhere in this document when reporting on overall data. It should also be noted that not all comments are represented in the graphs in this section – again, due to relatively low numbers of comments falling within themes towards the lower end of the lists, we have only shown the upper selection of themes in each location. The full selection of comments and a summary of all themes can be found in the appendix of this report. Page 344
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17 Craignure Image captionImage caption Craignure respondents (36 people) are keen to see a campus or high school in a central location, although this does not necessarily need to be in Craignure itself, to help keep families together and provide an equitable location for as many “Good access to public transport and existing amenities / facilities.” – Craignure “First and foremost, I believe the campus has to serve the island as a whole, therefore must be accessible for travel from all parts of Mull and has to be located in the Craignure area. Near the ferry allowing staff to travel at times to teach subjects that may not be covered by full time members. It seems really sensible to cater for all young on Mull.” – Craignure “Rugby club, swimming pool, ferry terminal in Craignure so this should be where the school is.” – Craignure “Safe and organised drop off and collection.” – Craignure Quotes from Craignure people as possible. They would like the site selection criteria to consider space for outdoor activities such as sports and learning, and good access for public transport, parking, and safe drop off and pick up. Page 345
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18 Tobermory Image captionImage caption Tobermory respondents (134 people) are primarily concerned about the impact of the potential loss of primary education and ELC from the town, and feel it is essential that this is retained. For some, a high school could be somewhere more central provided there is no loss of provision for younger children. Many of the suggested site selection criteria relate to reducing the impact of the campus on travel and transportation. People highlighted concerns about the prospect of an increased level of traffic across Mull if children had to be transported elsewhere, and lack of sufficient or reliable public transport and road infrastructure. There is a desire that the selected campus site should keep travel times to a minimum, especially for younger children. There was also a concern from some that a school elsewhere would cause a decline in people moving to, or staying in, Tobermory – creating depopulation problems similar to those the Ross of Mull currently experiences. Page 346
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19 Tobermory (Cont) Image captionImage caption “Bussing 70 to 80 kids out of Tobermory… and for ELC parents who don’t drive, how does that work? Our youngest gets migraines and doesn’t travel well. Going on a bus every day would be awful for him.” – Tobermory “The transportation of children to another part of the island opens to its own problems. How are the pupils age two years to 18 to be transported elsewhere in the island? Not only would this add pressure on the roads (which are busy at the best of times), there is also the cost involved – buses, fuel, drivers and escorts for young and vulnerable children. […] I think to remove the high school from Tobermory would be a disaster to the health and wellbeing of pupils as well as the financial strain on already depleting budgets. It would be like building Oban High School in Taynuilt and transporting the majority of pupils who live in Oban out of town.” – Tobermory “Pre-school and primary children in Tobermory must be able to attend school in the village in which they live, so that they can walk to school, parents can drop them off and collect them without travelling long distances. Unfortunately this has to trump all the potential benefits of locating a new school more centrally (which would likely benefit secondary pupils). […] Young families are our lifeblood, and if Tobermory primary school is closed, the community will become a hollowed-out retirement village, full of Airbnbs and nothing else. This is not a positive result for promoting island communities.” – Tobermory Quotes from Tobermory Page 347
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20 Salen Image captionImage caption Among the 34 people who attended Salen engagement or responded to the survey, 15 comments were generally supporting a central location for the campus. This group also made suggestions about the general design of the school. When thinking about criteria for site selection, the most commonly mentioned themes were the ability to keep families together / avoid children having to board at Oban, providing an equitable solution for as many people as possible, and finding a site that is both close to existing facilities (such as shops and sports) and has sufficient outdoor space for sports and outdoor learning or play. Page 348
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21 Salen (Cont) Image captionImage caption Quotes from Salen “I feel this is a great opportunity to build a school for the whole island. A more central location would make this possible.” – Salen “If this school is not built centrally to enable all island children the chance to attend it, it will be catastrophic for the south end of the island, sending kids aged 11 to a hostel in the mainland is not ‘getting it right for every child’. The school roll of Salen Primary often exceeds the roll of Tobermory Primary due to children travelling to Salen for Gaelic. Children of primary age travel from all over the centre and north of the island to Salen so there is no reason whatsoever that a bus could not transport secondary age children from Tobermory to a different school. It would make far more sense to me than transporting half empty buses from the rest of the far out catchment areas to Tobermory.” – Salen “Central school that has access to existing sports facilities (eg Rugby at Garmony, pool at Craignure) would be beneficial.” – Salen Page 349
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22 Ulva Image captionImage caption Eight people attended the Ulva engagement session or responded to the online survey. From those, five comments were in support of keeping primary and / or ELC provision in Tobermory. Quotes from Ulva “Impact study? Cumulative travel time study? Back of envelope calc[ulation] gives Salen as most efficient location in terms of minimum total student travel time (inc. new Craignure development).” – Ulva “We live here knowing they will have to travel for high school, so Tobermory or Craignure would be roughly equal distance. But for the island wide context, you couldn’t leave Tobermory without a primary and early learning and childcare. If it has to be 2-18, Tobermory is the only real option. But the ideal solution would be primary / early learning and childcare in Tobermory and high somewhere central.” – Ulva “The 2-18 and like for like campus is the biggest flaw – you need to split it so the primary remains in Tobermory. It doesn’t suit the communities, it suits your affordability. You cannot only base it on that.” – Ulva Other comments related to finding an equitable location, keeping families together and reducing travel times. Page 350
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23 Dervaig Image captionImage caption In and around Dervaig, 19 people attended the engagement session or responded online. From those people, there were eight comments about the need to retain primary / ELC provision in Tobermory, and five about the campus being best placed in a central location. This group noted Quotes from Dervaig “You state that all other primary schools on the island will be unaffected. Would Salen primary school remain functioning if the new campus were in Salen? Similarly with Lochdon and Craignure.” – Dervaig “If a like for like campus is located outwith the Tobermory location, pre school and primary school children from Tobermory will be unfairly discriminated against as they will have no alternative site school to attend. This assumes that smaller primary schools on the island will be unaffected, is this the case?” – Dervaig“Most people on the mainland do not realise Mull is the fourth largest island in Britain. The travel time from one end to the other is equivalent to travelling from Glasgow to Dundee via Stirling and Perth. This has implications for being ‘local’!” – Dervaig some concerns about the potential closure of other primary schools if primary provision were to be moved from Tobermory. This group would like the site selection criteria to consider an equitable solution for as many people as possible, and to keep families together. Page 351
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24 Lochdonhead Image captionImage caption Among the 13 Lochdonhead respondents, the most commonly mentioned issue was the need to retain primary / ELC provision in Tobermory, followed by a preference for a generally centralised high school. These comments also reflected a concern among some that other Quotes from Lochdonhead “Primary schools are the heart of every community here, they are so special. How will this affect the other primaries? Concern that they may be closed.” – Lochdonhead “The main issue is making sure every child on the island is able to attend a high school on the island. No child should have to go off island and be away from home at such a young age all week, every week to be able to get an education. A more central location would benefit everyone.” – Lochdonhead “Can Salen cope with the extra children? We have one primary in Lochdon and one in Salen, and most of those kids live there. So even if the Tobermory kids came to Salen, and the catchment lines were revised, how on earth could you send Salen kids out of their home area to another primary, while they watch kids come from Tobermory to go into their local school? It just doesn’t make any sense.” – Lochdonhead primary schools would be affected or closed if primary provision moved from Tobermory. In relation to site selection criteria, albeit with low numbers of mentions, these respondents would like to see as equitable solution as possible and a location that keeps travelling times to a minimum. Page 352
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25 Iona Image captionImage caption Feedback from Iona residents relates almost exclusively to a request for children to retain funded places at Oban High School, as is currently the arrangement. From the 26 people who attended or fed back online, there were 22 comments related to this topic. Key drivers behind this request were the perception that children get a better quality of education and life experience by being exposed to life in Oban, including having access to after school and extra curricular activities that they may not have on Mull, and / or that they would struggle to access because of having to factor in travel times to and from school. Aside from these benefits, respondents pointed out that there is simply no way to reliably get children to and from Mull from Iona on a day to day basis, especially in winter when ferries are often disrupted, so there is no practical alternative in any case. Multiple comments from this location were made in relation to how the project and engagement have been conducted so far. In particular, respondents wanted more thorough and detailed information to be provided before such engagement sessions, and a guarantee that their position will not change in relation to Oban. Some also said they would collectively like to be removed from any further consultation about the location of the school, this being something for Mull residents to decide as it should not affect Iona. Page 353
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26 Iona (Cont) Image captionImage caption “I have concerns about Iona being included in this consultation. I would prefer an assurance that we remain in the Oban high catchment – and that hostel and travel will still be funded. Regardless of the site chosen on Mull, Iona based pupils would still face a lengthy daily commute therefore missing out on after school activities and spending up to three hours a day on a bus (if say Craignure was as chosen site). The Iona ferry is often subject to cancellation which would negatively impact on attendance. When you choose to raise a child on Iona it isn’t an easy option to send them off to board at 12 – however they get so much out of the experience, to replace this with a lengthy daily commute isn’t in anyone’s best interests.” – Iona “Important to have single option of Oban High for Iona pupils to maintain equality. More opportunities available – educational and social – less travel impact.” – Iona “No engagement from Iona without a guarantee that Oban option is available and funded, whatever comes of Mull decision.” – Iona Quotes from Iona Page 354
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27 Bunessan and the Ross of Mull Image captionImage caption Respondents from the Bunessan engagement (65 in total, including those who specified they were from the Ross of Mull, including Fionnphort, Pennyghael and Kintra) primarily wanted the site selection to keep families together as far as possible, avoiding children having to leave the island during the week, and provide the most equitable solution that would provide access for as many children as possible. They were concerned about keeping traveling times to a minimum due to both the road and transport conditions / infrastructure and the impact on children’s wellbeing. A small number of people who attended various engagement sessions talked about negative experiences with bullying and antisocial behaviour in Oban, and worried that children now might experience the same things. Beyond comments about location, this group also pointed out that children should have equitable access to after school clubs and extra curricular activities, which can be difficult when they have to travel long distances to and from school. There is also a keenness for children from the Ross to have a choice as to whether or not they leave the island to board at Oban. It should be noted that some parents would like their children to continue to attend Oban High School, even if a more centralised high school were available on Mull. A small number of people commented during the engagement that they would like their children to continue to attend Oban High School, but they are feeling pressured or intimidated by others in the community if they express this opinion. Iona (Cont) Page 355
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28 Bunessan and the Ross of Mull (Cont) Image captionImage caption Quotes from Bunessan and the Ross of Mull “A central location is key for more children and families to experience family life daily, especially in arguably their most challenging time in life. With the need for a new campus, this feels obvious: to allow more support daily for more kids.” – Bunessan / Ross of Mull “People from Tobermory don’t want to travel, but all of children on the island are as important as each other!” – Bunessan / Ross of Mull “Vital to have a centralised high school for all of the island. Not feasible for children from the Ross to travel to Tobermory daily. Need to have same opportunities for kids from the Ross as those in Tobermory. – Bunessan / Ross of Mull “Central location, ideally Craignure. Strong transport links. Staff could travel from Oban. Equality for all children on the island. Ross of Mull children would feel secure coming home.” – Bunessan / Ross of Mull Page 356
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29 School Engagement – Staff and Pupils Overview Image captionImage caption Between 17 and 30 September, pupils and staff in schools across Mull and Iona were visited by Argyll & Bute Council’s Education Officer (Education and Community Engagement – LEIP). They comprised: • Tobermory High School • Tobermory Primary School • Tobermory ELC • Tobermory staff • Salen Primary School • Ulva Primary School • Lochdonhead Primary School • Dervaig Primary School • Bunessan Primary School • Iona Primary School • Oban High School Hostel Sessions took the form of informal workshops, during which attendees were encouraged to talk about what they think is important for a new campus, and record their ideas on post it notes. This section contains a summary of those sessions – where common themes emerged, some of this analysis has been combined across schools and shown in a word cloud format. However key points have been highlighted where this is possible to do without identifying individuals. Page 357
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30 ELC and Primary Image captionImage caption ELC Ten children from Tobermory ELC shared their ideas. Primary Schools Children from Bunessan (25 pupils), Dervaig (10 pupils), Lochdonhead, Ulva (10 pupils), Tobermory (10 pupils) and Salen (22 pupils) Primary Schools also provided feedback about what is important to them in a new campus. The most common themes are shown below. These children were particularly keen on making the most of outside space, with a football pitch being the most mentioned request (20 mentions) The priority for four children is to have an obstacle course, and three would like to have space for a planting box. and 12 others requesting basketball. A further 18 wanted good play space outside. 16 would like access to a swimming pool. Inside the school, pupils were interested in facilities for art (16 mentions), generally good or large classrooms for various subjects (12 mentions), a nice cafeteria (12 mentions), and access to a library space, calm areas and lockers (11 mentions each). Page 358
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31 Image captionImage caption Iona Primary School is reported separately here, as the children tended to focus more on the location of the school and the prospect of going to Oban High School, therefore their comments have not been included in the word cloud above. Nine children took part in the feedback exercise, and comments were in favour of attending Oban High School. There were a small number of neutral comments that indicated a potential flexibility in this view – two stated that pupils should go to whatever high school their older siblings attend, and one stated that they would like to go to Oban, but wondered whether other children would go to high school in Craignure. “If it was on Mull we would spend half the day on a bus and we wouldn’t be able to come back if the ferry was off.” – Iona Primary School pupil “I would like to go to Oban school because it trains me not to get homesick.” – Iona Primary School pupil “I am looking forward to playing sport in Oban” – Iona Primary School pupil “I would still like to go to Oban High School, because we will not be able to do any after school clubs or anything.” – Iona Primary School pupil “If I went to Tobermory, I would go home every night , it make me feel less independent.” – Iona Primary School pupil Quotes from Iona Primary School pupils “We would be worrying about the ferries 24/7.” – Iona Primary School pupil Reasons for wanting to attend Oban High School generally echoed those noted by adults during the public engagement: • Independence and learning to cope away from home • Avoiding long or disruptive travel every day • Ability to attend after school clubs Children therefore did not express any strong preferences for where the campus might be located, as they did not feel it would affect them. Aside from comments about attending school in Oban, individuals from this group thought that any new campus should have plenty of space, offer a good education, have a football pitch, sandbox, stepping stones, a theatre, and play diggers outside. Page 359
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32 Tobermory High School Image captionImage caption 14 pupils from Tobermory High School talked about the things they would like to see from a new campus. A bigger gym hall was the most mentioned feature, by eight pupils, followed by the provision or social seating (or common rooms / breakout spaces, including for seniors only). This group was also asked about their general perceptions or thoughts about location of the campus. Several pupils shared their perceptions of Oban High School, the importance of family life, and a desire to see a central campus. The general consensus of these participants was that they do not think boarding at Oban is a positive experience. “I have friends from Mull that stay in Oban who were bullied and were smoking and vaping (this has been reported) I have not experienced this in Tobermory High School.” – Tobermory High School pupil “It is important for me to come home each night to spend time with my family. Teenagers that go to Oban for school have less connections with the community and they are less likely to stay on Mull when they finish school.” – Tobermory High School pupil “When kids are in Oban hostel their parents are not there to teach them how to behave in the evenings. Being with their family would be less stressful.” – Tobermory High School pupil “[The campus] needs to be in the middle so it is a medium time trip and fair for everyone.” – Tobermory High School pupil Quotes from Tobermory High School pupils Other suggestions receiving the highest number of mentions were: sheltered spaces to eat lunch outside (four pupils), assembly hall, more or bigger classrooms, music practice rooms and better sports equipment (three mentions each). Tobermory Staff Three members of staff from Tobermory provided feedback on what is important in a new campus. All three cited their main concern as being the impact of travel, both on the wellbeing of young children and on the roads infrastructure, if the campus were to be located outside of Tobermory. Two members of staff thought the entire campus should remain in Tobermory, while the third would be happy for a more central high school provided primary provision remained. Page 360
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33 Oban High School Hostel Pupils Image caption “We would be worrying about the ferries 24/7.” – Iona Primary School pupil 17 pupils who board at Oban High School hostel were asked to share their thoughts about a new campus, including what the campus should feature. Several talked about their own experiences and perceptions of staying at Oban, with mixed opinions on whether the campus could be an alternative option to boarding at Oban. Nine commented that there is little point in having a central high school for their own purposes, as it will make no difference to their travelling times – either requiring long daily travel or requiring “If the new school was in Tobermory, none of the Ross children would want to go as it is far. It’s only fair for it to be half way, not all about Tobermory. It’s hard to go to the hostel in Oban at age eleven. Kids that age should have a choice to go to high school on Mull or Oban.” – Oban Hostel boarder “Same distance as Oban, so it is pointless.” – Oban Hostel boarder “Probably won’t be as educating as Oban High School.” – Oban Hostel boarder “I would not want to go to Tobermory – sounds bad.” – Oban Hostel boarder Quotes from Oban High School Hostel pupils another hostel. Six said they would rather stay at Oban High School regardless, while three said they would consider attending high school on Mull if it were easier to travel to. Others agreed with both points, saying that families should have a choice and there should therefore be an option that is fairer for all families. Where pupils did comment on the facilities they would like to see in a campus, two thought that sports facilities are important and two mentioned access to college courses. Page 361
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34 Image captionImage caption Appendix Page 362
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35 Appendix Appendix One – Data Tables Image caption The following table shows the full breakdown of themes covered, the number of times each was mentioned, and the percentage breakdown compared to the total number of contributors. Any comments that could not reliably be coded without the potential for misinterpretation (for example, due to vague wording), or which covered themes that received only one or two mentions, are included in other. Please note, this data is not weighted by location due to the relatively small number of residents in some locations and the subsequent differences in attendee numbers to the various sessions. The engagement was intended to be a qualitative listening exercise, not a quantitative survey. The data is presented here for full transparency in relation to the analysis process, demonstrating Count Percentage Retain primary and / or ELC in Tobermory 138 39.2 General support for Tobermory (either full campus or age groups not specified) 86 24.4 Concerns about increased travel and volume (eg poor roads, lack of buses, access for those who do not drive) 80 22.7 Keeping families together / avoid children going off island 77 21.9 Travel times should be kept to a minimum, particularly for young children 74 21.0 The importance of an equitable solution / access for as many children as possible 70 19.9 General support for a central location (either full campus or age groups not specified) 65 18.5 Community sustainability / ability to support local economy 58 16.5 High school generally centralised / other location mentioned 56 15.9 Space for sports facilities and / or outdoor activities 54 15.3 Comments about the way the engagement or wider process is being undertaken 50 14.2 Equitable access to after school clubs (eg later buses, not having to rush away for ferries) 40 11.4 that all responses were analysed individually, in full. The percentages help us to understand the range of ideas and concerns heard across the engagement sessions, but they are in no way to be interpreted as statistically representative of the population or indicative that feelings were stronger in one location or another. For this reason, we are not interpreting the findings of this engagement as ‘X location was more strongly favoured than Y location’ – rather, understanding the drivers and perceptions behind this feedback is the key goal of our analysis, being inclusive of lesser populated communities and minority voices. Page 363
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36 Appendix One – Data Tables Image captionImage caption Count Percentage Close to existing facilities such as shops, swimming pool, sports for socialising and life experiences 38 10.8 Bridge the divide between north and south residents / let children mix 35 9.9 Safely accessible location / good parking / transport network / drop off 35 9.9 Comments about general school design / performance, including space for future expansion 33 9.4 General support for Craignure (either full campus or age groups not specified) 29 8.2 People choose to live in certain locations based on the schools / system already in place (including comments about leaving the island) 29 8.2 Potential for hostel on Mull 27 7.7 Children and families should have a choice to board or stay home 27 7.7 High school in Craignure 25 7.1 Avoid depopulation / support sustainability of Tobermory / north 25 7.1 Oban offers far better educational / social facilities and grown up experience / rite of passage 24 6.8 Current Oban catchment children should be guaranteed the option to retain funded places at Oban, regardless of new campus location 23 6.5 Access to community facilities such as gym, library, adult education 22 6.3 The opportunity to provide more subject areas or vocational teaching 21 6.0 Provide easier access for teachers to travel from Oban 20 5.7 Logistics of day to day travel are simply not feasible (ferry, poor weather) 19 5.4 Concerns that relocation will affect / close other primary schools 16 4.5 Inclusive (including provision for children with additional support needs) 15 4.3 Avoid depopulation / support sustainability of Ross / south 15 4.3 Environmental impact of increased travel 14 4.0 Opportunity to improve or retain active travel routes nearby 12 3.4 Page 364
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37 Appendix One – Data Tables Image captionImage caption Count Percentage Close to ferry 10 2.8 Ability to attract new staff 10 2.8 Impact of travel costs, time and childcare if ELC moved from Tobermory 9 2.6 Reduce the impact on existing site during construction (eg avoid decant) 9 2.6 Digital / online learning links 7 2.0 Availability of staff accommodation nearby 7 2.0 Avoid loss of existing teaching staff (particularly due to increased travel) 7 2.0 More travel will improve bus routes / availability for everyone 5 1.4 General support for Garmony (either full campus or age groups not specified) 4 1.1 Travelling long distances difficult for some children (neurodivergent, bullying, travel sick) 4 1.1 Avoid depopulation / support sustainability of Iona 3 0.9 General support for Salen (either full campus or age groups not specified) 2 0.6 High school in Garmony 1 0.3 Other 113 32.1 Appendix One – Data Tables Page 365
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38 Appendix Two – Boards Image captionImage caption At each engagement session, information boards were placed around the room so attendees could learn more about the project itself, current progress, and what we were asking them to do in this engagement. The content of the boards was also available in the online survey for those unable to attend. Page 366
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39 Appendix Two – Boards Image captionImage caption Appendix Two – Boards Page 367
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44 Appendix Three – Comments Image captionImage caption The following pages contain all publishable comments from attendees at the public engagement events and online, ordered by location. Comments captured publicly on Post-it notes during the sessions have been included here. Likewise, comments that were submitted via the online survey or email have been included, where respondents indicated they were happy for their comments to be published. Attendees at the public events were also provided with a confidential space to submit comments that would not be published, if preferred. These comments, along with those submitted confidentially online without permission to publish, have been omitted from this report but were included in all analysis. Please note: Written comments have been transcribed as accurately as possible. We have made changes to a very small number of comments only to improve clarity or preserve anonymity, in the following ways: • Where words were written in shorthand, we have written them out in full in this report (common examples were ‘Tob’, which has been reported here as ‘Tobermory’, and HS or PS which have been reported here as ‘high school’ or ‘primary school’). Likewise, minor spelling or formatting errors have been corrected where this would aid clarity and not adversely affect understanding of the text • Comments occasionally have short phrases with [square brackets] around them. The text within these brackets has been added by the report author, only where it was felt necessary to make a point clearer for analysis purposes, and only where we could be sure we understood the correct interpretation of the comment (having spoken directly to the attendee during the engagement session) • Some comments have had small sections redacted, indicated by three dots in square brackets [...]. This has been done where publishable comments contained information that could inadvertently identify the individual, for example by referencing their job or very specific family situations Page 372
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Appendix Three – Comments 45 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull In 10 years time people might look at a central school and think why is it here, no facilities and lots of travel. Bunessan and Ross of Mull No need to think about 10 years time, this will just be the norm. Bunessan and Ross of Mull Removing a primary from Tobermory is crazy. Bunessan and Ross of Mull People feel bullied by others in the community. Bunessan and Ross of Mull I believe that Iona and Ross children are privileged in going away to Oban. Bunessan and Ross of Mull How many adults see a commute of over an hour / two hours a day as ok? Bunessan and Ross of Mull Travelling to a central school everyday isn't reasonable. Bunessan and Ross of Mull People feel intimidated in the community to speak up for pupils going to Oban. Bunessan and Ross of Mull My children went to Oban, I wouldn't have had it any other way. Bunessan and Ross of Mull Could we not do more with distance learning? Lochdon or Craignure would be the ideal location. People from Tobermory don't want to travel, but all of our children on the island are as important as eachother! Bunessan and Ross of Mull Argyll and Bute Council rely on children from Iona and Ross to make the Oban hostel financially viable. If that stops, we are essentially being blackmailed with this as a result of the new campus. Bunessan and Ross of Mull We need to use our imagination here. If Oban is maintained, we could extend the Bunessan primary provision to cover the first two years of secondary school so those children are not sent away so early. Bunessan and Ross of Mull Vital to have a centralised high school for all of the island. Not feasible for children from the Ross to travel to Tobermory daily. Need to have same opportunities for kids from the Ross as those in Tobermory. Bunessan and Ross of Mull If it is possible to have the primary school and the high school in two different locations, I would consider doing this and putting the primary school in Tobermory and the high school in Craignure. Bunessan and Ross of Mull United Nations Convention on the Rights of the Child (Scotland) Act: Articles 1, 12 and 28! Bunessan and Ross of Mull Rooting for Craignure base. Want it for true community campus. Need music on island. Bunessan and Ross of Mull I take my kids to Salen for music. Don't get funding for transport. Not equitable. Page 373
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46 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull Tiree has a secondary school. Economically active young people there STAY there. Children who leave here for Oban often don't come back – social and ecomonic impact. Bunessan and Ross of Mull Concerns about antisocial behaviour in Oban and children as young as 11 allowed out from school – it's dangerous. Bunessan and Ross of Mull The children come back tired on a Friday and Sundays are ruined because they have to get up so early on Monday. They are 'not here' at the weekends as they are too tired to participate in normal life. Bunessan and Ross of Mull Community hub that is central for all of island to make use of, for out of school activities and clubs. Bunessan and Ross of Mull Early morning bus for children benefits the whole of the island with a service that gets everyone to the early ferry. Bunessan and Ross of Mull Transport links and roads need to be improved. Bunessan and Ross of Mull Central school opens Ross of Mull to all families regardless of background / needs. Equality and support provided throughout school and systems. Bunessan and Ross of Mull I think the high school should be more central and the primary school should remain in Tobermory. Bunessan and Ross of Mull Location of the school is primary concern, for the Ross of Mull kids to benefit from the campus it would need to be central. Bunessan and Ross of Mull Right of child to family life. Living away disconnects child from family and opportunites in local communities. Bunessan and Ross of Mull Central school allows for staff and learning shared with Oban. Specifically in part time positions, furthering arts etc. Bunessan and Ross of Mull The decision will affect the whole island, but it will impact us hugely here in terms of jobs and families. Bunessan and Ross of Mull It would be good to include other services in the building, such as nursing home, dentist, indoor sports facilities, social services etc. Bunessan and Ross of Mull Whenever the school is situated the road network will need to be improved for it to be viable for the whole island. Bunessan and Ross of Mull Miss skillset of doctors, dentist. Leave to be with family. Bunessan and Ross of Mull The children need education equality. Bunessan and Ross of Mull I feel Tobermory should be allowed to keep a primary and early learning childcare within their town but central high school. Bunessan and Ross of Mull Central location, ideally Craignure. Strong transport links. Staff could travel from Oban. Equality for all children on the island. Ross of Mull children would feel secure coming home. Page 374
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Appendix Three – Comments 47 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull Outdoor space and in a sympathetic location would be great. A central school would allow an island ownership rather than a specalist location. Bunessan and Ross of Mull Will Mull children still have the option to go to Oban High School and stay at the hostel fully funded if they wish to? Bunessan and Ross of Mull There are currently more kids bussed into Tobermory than would need to be bussed out to a central school. Bunessan and Ross of Mull Travel from Fionnphort to a central school is less than currently Lochbuie to Tobermory, so should not be a factor. Bunessan and Ross of Mull Can't access gymnastics as located in Tobermory. Need a central location. Bunessan and Ross of Mull Craignure is already a transport hub. Could get a 7am bus. Improves public transport. Bunessan and Ross of Mull College is important to community > adult education is important. Bunessan and Ross of Mull Economic wellbeing of whole island. Growth in Craignure. Central school would [be a] catalyst for growth. Bunessan and Ross of Mull Families want to be together. Bunessan and Ross of Mull I don’t want to hear that the Tobermory high school children call Ross of Mull minks. Bunessan and Ross of Mull If the new campus will be in Tobermory, meaning pupils from the Ross of Mull need to travel and board at Oban, the project will have failed. Bunessan and Ross of Mull Missing the teenagers. Go off island mid week. Nothing for kids to do at weekend – miserable. Bunessan and Ross of Mull If people have to travel from here to eg Craignure, that's actually a benefit because we will get access to 7am busses that everyone can use, not just school children. Bunessan and Ross of Mull Teachers could come over from mainland. Better options for teaching. Bunessan and Ross of Mull Mental health of families. Children crying on phone every night when in hostel. Bunessan and Ross of Mull Small hostel in Cragnure. Hostel in Tobermory worse scenario. Bunessan and Ross of Mull Swimming pool, rugby club in centre. Bunessan and Ross of Mull An island community impact assessment is critical. Bunessan and Ross of Mull Transport needs to allow for after school clubs. Timings are crucial, to allow equal access. Page 375
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48 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull Available space and resources to enable extra curricicular activities on site. Bunessan and Ross of Mull If it's a like for like, but there's an opportunity for the entire island to have a school that serves us all, we'll miss that once in a lifetime opportunity to get the best for all of us. Bunessan and Ross of Mull Can we have an island wide referendum on 1) suitability of early learning childcare / primary, high school single site. 2) Location of high school site. Bunessan and Ross of Mull Infrastruture for school: energy production and waste management, growing facilities for vegetables, further island wide services. Bunessan and Ross of Mull Vital to encompass not only educational but social and welfare facilities. Perfect opportunity to create an island hub that works for all communities, with the potential for interdisciplinary working. Bunessan and Ross of Mull A central location is key to enable more children and families to experience family life daily, especially in arguably their most challenging time in life. With the need for a new campus, this feels obvious: to allow more support daily for more kids. Bunessan and Ross of Mull People moving to Tobermory because kids go off island. Bunessan and Ross of Mull At present people move to Ross of Mull and decimate family structure. Bunessan and Ross of Mull It doesn't make sense to build a new high school in Tobermory in place of the old one. Instead, it should be built in Craignure where it is central, everyone can access it and it is supporting all children of Mull and Iona. Bunessan and Ross of Mull Growing population would boost population in Ross of Mull. Bunessan and Ross of Mull School based by transport hub to ensure children from any location / background can take part in after school clubs and grab the 5pm bus home. Bunessan and Ross of Mull Funding should be split, primary and early learning childcare in Tobermory, central high school. Bunessan and Ross of Mull I think there should be a high school built in Craignure and primary in Tobermory. That's fair on everyone. Bunessan and Ross of Mull Central location could improve hostel. Hostel is substandard. Bunessan and Ross of Mull If there is going to be a high school on Mull, it needs to be central (in Craignure). This way, everyone on the island can access is easily enough. Bunessan and Ross of Mull Bunessan people feel a school in Craignure would be best for young people on the island (Ross of Mull) . Bunessan and Ross of Mull If the secondary school is in Tobermory then that takes away choice from children in Bunessan. Bunessan and Ross of Mull If central location kids could go off island to do more curriculum. Page 376
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Appendix Three – Comments 49 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull Children from Ross of Mull shouldn’t have to go to Oban for high school as this cuts them off from their families and communities. They should have the option of continuing their schooling on the island. Bunessan and Ross of Mull Good for older kids to go to Oban – 15 and up. Bunessan and Ross of Mull 11 is too young to go off island. School in Craignure up to 15. Then Oban for high school. Bunessan and Ross of Mull Another consultation between 12-9 in Bunessan to provide a true representation of opinions. Bunessan and Ross of Mull There is no question of where it should be. Fair is a central location for all children on the island. Bunessan and Ross of Mull Would unite communities in the North and South. School big driver in those. Bunessan and Ross of Mull Like for like does not feel tenable. Bunessan and Ross of Mull Democratic opportunity to site in central location. Untenable not to have it central for families. Growth of Bunessan. Bunessan and Ross of Mull Can't support community if Tobermory site. Opportunity once in 60 years. Can't get social care. Bunessan and Ross of Mull Case study of family of this part island would be good to hear stories. Bunessan and Ross of Mull Current set up does not support young families. Affects doctors and dentists because don't want kids going off. Bunessan and Ross of Mull Bus transport, non compliant with UNCRC. Too long anywhere north of Salen. Bunessan and Ross of Mull Perception is Bunessan is an afterthought. Better education in Craignure. Bunessan and Ross of Mull Sympathetic staff in Tobermory. Understand family circumstances and emotion on families of going off island. Page 377
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50 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull As a [20-something] year old from the Ross of Mull I believe a high school in the middle of the island (Craignure) would be the fairest decision. It would encourage myself and other locals to stay on the island when we have our own children. Being from the south of Mull it is the norm we go to Oban High School, however if we had the opportunity to go to a high school in Craignure I am positive the majority would. There would still be the option for children from the north or south to go to Oban as well. Hopefully there would be enough teachers and subjects to encourage our children to stay if the high school was in the middle of the island. Most children travel to get to school if they’re on the mainland, so travelling to get to school on Mull should not be an issue. Travelling morning and afternoon is what every child does to get to school, just because it would be a few extra miles it would still be better than being away from your family all week in Oban. A central high school would allow children from the whole island to get to know one another. It would be nice to prioritise the whole island for a change not just the north. I strongly believe it should only be a high school and all nurseries and primaries should stay put. Bunessan and Ross of Mull The campus should be built so it’s accessible to all the island, Garmony, Craignure, children’s wellbeing should be taken into consideration, I was one of the unfortunate child that had to go to Oban, the impact of that is with me all my life, homesickness, loneliness, scared, basically you are in a hostel for five years at the age of 11 and a half to look after yourself, bullying is the worst, mental physical, [...] we should have a choice. I think with a central school education would be better more variety better sports facilities, with nearly 100 houses being built in Craignure a lot of people would move to the island if a school was central, the roads shouldn’t be an issue as there is enough tourist buses travelling. Another point I’d like to make, the borders have reduced there week by shutting the school early on a Friday, breaks are all reduced so children still have the same education time, it saves on power, I have been told that this has been a great success, something to think about, I feel schools should be for education and what’s best for the children, being at home in your own bed, [...] mentioned in a meeting he can sleep in his own bed, well it’s time he thought of children not being in their own bed for up to six years. Page 378
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Appendix Three – Comments 51 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull [I wanted] to get my thoughts down on paper to show why I feel it is important that there is a single secondary campus for Mull. The building of a campus for secondary learning for all of the children would be the single biggest opportunity in not only education, but social, cultural and business benefits for generations. There also needs to be clear understanding of the benefit in having extra space planned in to allow co-location of other services and functions in the future, and not just shoehorn what is needed now into a tight space. The Ross of Mull is currently a very different place to most of the UK during school week days in that there are no (unless home schooled) teenagers present at all. This means their connections at so many levels are with Oban and the mainland from age 11 or 12. It also means the reverse – they have little if any connection with their peers that live to the North of Mull. That continues through their adult life – if they choose to remain on Mull. However, it is clear that the demographics show that the majority do not stay because they already have strong mainland links. I also feel that primary education has to take place close to where families live and the clear need to maintain primary and pre-school in Tobermory is very clear as well. We need to see this in the longer term and not just the next 10 years – we need to be looking 25 and even 50 years into the future. There would be massive benefit in terms of more well paid jobs, better community integration, better links for all between North and South Mull – and so much more. It would really help with the efforts to encourage families to remain on the Ross and not just be a place where folk from away come to retire. I do understand that the current financial climate and indeed the terms of the funding makes it challenging but I'm also sure that there are other ways to approach this. Bunessan and Ross of Mull [...] I would of love to live back in Bunessan on Mull but the main reason is I don't want to send my children off to Oban High School and into the hostel! [...] The school needs to be central!! I don't know anyone from the other end of the island! My friends have now moved back to Mull and still don't have a close knit of friends because they went to Oban High School! Businesses aren't being passed down to families because they don't want to live in the Ross because there is no high school! it is not sustainable to send children to Oban and the Ross is going to become a place for people to retire with lots more second homes and the rest of the island overcrowded!!!!!!!! A Mull campus should be fit the whole island!!!!! Page 379
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52 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull I think the site needs to be able to accommodate all the school age children of Mull and Iona. There’s no point in building a new campus is kids on the Ross of Mull and Iona are still not able to attend. The cost of buses, ferries and hostel accommodation for kids transported to Oban must be taken into account. The kids from the Ross and Iona being separated from your family at such a young age is detrimental to families with other kids at primary school. Children living in Oban Mon-Fri are separated from their siblings, extended family and their local community. Tobermory may have the highest population but that shouldn’t dictate where the school should be. Instead it should include all children. There may well be more buses on the roads but this can benefit the wider community who should be able to use these buses too. It must be cheaper to run buses on a daily basis than it is to pay for buses, ferries and the hostel for kids. Ideally, it would be better to have a primary school in Tobermory – but in the end the campus needs to benefit the whole of Mull and not just the majority. Families in the Ross and Iona often leave the area because they just don’t want their children being away from home five days a week. Bunessan and Ross of Mull There is not enough space in this box for anyone to share their thoughts! Check out The United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Act 2024 and also consider need for an Island Community Impact Assessment. Formal responses to both of these requirements should be published for all to see the Council's position. It seems clear to many that the campus must necessarily span two sites if plans are to comply with childrens rights in law. Bunessan and Ross of Mull The new campus should be accessible to all islanders and therefore central to island in the Craignure area. Bunessan and Ross of Mull Available to children island wide, so central to allow Ross of Mull children to go. Bunessan and Ross of Mull Ability to access after school clubs. Bunessan and Ross of Mull The site should be located to allow secondary education on a daily commute basis to every child on Mull Bunessan and Ross of Mull There are two main reasons why the campus should be accessible to ALL resident areas on Mull and Iona. Firstly, the children's education and social life should not be unduly affected by where they live on Mull or Iona – the choice must be non-discriminatory. Secondly, it is VITAL for these islands to attract people for employment at all levels, without which the demographic will just simply get older and older and become unsustainable. It is self-evident that the majority of the candidates for the vast majority of opportunities, and particularly professionals and health/social care workers, will have children of school age and the lack of schools on the islands for all ages is a MAJOR reason for them not to come. Page 380
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Appendix Three – Comments 53 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull As the campus is intended to serve the whole of Mull and also Iona, it is vital that it is built in a spot which is accessible to all – this would be the Craignure area. The travelling time between Fionnphort and Tobermory is roughly two hours each way, making it unfeasible for adult education, let alone children. A central location such as Craignure would mean that the secondary school children from the Ross of Mull and Iona would no longer need to board in Oban during the week. This is a once in several generations opportunity to redress the balance and unite the whole of the islands. The current system destroys family life, plus it removes children from the support of their home environment at far too early an age. I wonder if the mental health aspect has been considered? I understand that new legislation recently came in which confirms children's rights to live with their parents – see article 9 of the United Nations Convention on the rights of the Child (Scotland) Act 2024. We know many families who have moved away rather than subject their children to this situation. We also hear stories of children phoning home in tears for months if not years. I realise that the Iona parents are worried about their children missing schooling if they attend a high school on Mull – but there are ways round this. For example, a 'buddying' system with a pupil living in Mull, whereby the Iona child would stay with the family if the ferry wasn't running would be ideal as it would strengthen links between Mull and Iona families. I am appalled that you are stating categorically that you will not build a primary/Early learning school in Tobermory. My understanding of the LEIP funding is that this would still be possible if the will was there on the part of Argyll & Bute Council. Despite claims made to me at one of the drop-ins, it is simply a fact that if you build the campus in Tobermory you are not fulfilling the promises you made in the LEIP bid. Please reconsider the idea of splitting the campus into a High School in Craignure, with a separate school for primary and ELC in Tobermory. The siting of the High School in Criagnure also has the advantage that teachers could easily come over from Oban for the day. Likewise pupils could more easily attend classes at Oban High in specific subjects. Don’t forget also that a large housing scheme is due to be built in Craignure soon, which will surely increase the number of pupils resident in that area. One final word about the community of the Ross of Mull where I have lived for [several decades] – the fact that our youngsters have to go away to Oban to school impacts on the entire community. Not only do we effectively lose our young people from the age of about 11, we also find that it is impossible to attract for example a GP who wants to live here. Anyone with the choice wants their children to live within the family! For that reason our demographic leans heavily towards older folk who are already retired. A new high school campus in Craignure would breathe new life into the Ross of Mull. Page 381
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54 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull A new High School Campus is clearly needed on the island as well we know that the is failing our young people in many ways. I see there are several sites to be considered but also note that, any site chosen other than Tobermory, will mean that there will be NO funding for an ELC or Primary School. This would suggest that it is a done deal then and, yet again, those living on the southern part of the island will lose out potentially. A solution to perhaps consider would be to sell the High School site and finance a new ELC and Primary School from this pot? We are led to believe that "under the current LEIP funding conditions" it would not be possible to split the Primary and ELC site from the new High School site, as is currently the case. All other areas on the island have primary schools. Bunessan and Ross of Mull As outlined in my written submission, it seems that the legal Rights of Children have been effectively neglected in assumptions about criteria for suitable sites, which would exclude Tobermory from consideration except for pre and primary school age children. Failure to factor in potential for significant costly delays pending judicial review of key issues would reflect very badly on Argyll and Bute Council, so please seek legal advice and publish it before finalising decisions about any sites which are not daily accessible to all secondary students on Mull. Likewise there is certain to be some keen local interest in the Council's Island Communities Impact Assessment, ahead of any decisions being finalised re. siting the new campus. I do not feel that either of these important considerations have been acknowledged or addressed in any Campus Team communications to the communities it purports to serve, to the best of my knowledge. The Council should surely be obliged to present the most authoritative advice it receives concerning Children’s Rights and Island Community Impact Assessments for early review by the ‘Sounding Board’, to allow for possible appeals by local parties potentially disadvantaged by exclusion from decision making. I would add that this approach to inviting communities to express our views falls far short of best practise, entailing a much more collaborative co-productive approach to gathering views on the online feedback form than a small text box allowing just a small portion of a single line of text to be reviewed by each respondent. Page 382
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Appendix Three – Comments 55 Appendix Three – Comments Image captionImage caption Bunessan and Ross of Mull The current high school in Tobermory is in very poor condition, and cannot meet island wide needs due to its position in the far north of the island. I would like to share with you my concerns about the current proposals. Following the Argyll and Bute community engagement event at Bunessan Hall on 25 September regarding the Island wide campus my thoughts are 1 There is one reason why Tobermory School site is not fit for purpose – the neglect and lack of investment of Argyll and Bute Council. 2 ABC are suggesting that the LEIP funding is ‘like for like’ ie 2-18 yrs educational provision on one single site as currently exists in Tobermory. 3 The needs of our islands communities is not for a like for like substitute, however this may suit its current users. 4 LEIP funders say that there could be adjustments to the proposals, which it appears ABC are reluctant to pursue because of impacts on timescales. 5 ABC are reluctant to pursue dual sites for the ELC/primary and high school functions because of the cost of providing two catering and gym facilities. 6 Should an island wide campus (ie ELC/primary/high school) be based outside of Tobermory this would be detrimental to: 1 the community of Tobermory – because all of its children will have to travel out of the town to attend any educational provision; 2 the other existing primary schools who would have their catchment areas changed 7 It appears that ABC are latching onto this LEIP funding to meet their own property portfolio failings rather than to meet the needs of our Island wide community. 8 Why can’t ABC start at the concept of what it aims to achieve and then work from there? Rather than forcing through their proposal over the community’s needs. 9 Central to the core concept of an Island wide campus is the concept of it being accessible to all users, which are different for ELC, primary and high school pupils. If the site is based in Tobermory it will by default be inaccessible to a wider body of students – but the council would get a building that the council can wear as a feather in its cap – perpetuating the situation where families move away from already underpopulated areas in order to live with their children as they access high school. 10 The offer effectively pitches the community of Tobermory against the rest of the island due to its need for a local primary school. Page 383
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56 Appendix Three – Comments Image captionImage caption (Cont’d) 11 Like for like cannot meet island wide needs. Would it not be better for Argyll and Bute Council to initiate a community consultation for education need on the island, plan what is appropriate and then seek funding to enable the plan. The current offer seems to see a pot of money, and think about how it can spend it. This is not helpful to the island, its pupils or its future. Whilst I fully support the development of fuller education availability on the island this process is in the wrong order and being poorly executed and does not have my support. I think an island impact assessment should be completed as part of this process. Bunessan and Ross of Mull I think it is important we focus on a central location to give all the children who live on Mull and Iona to have the same privilege as children in the north of the Island. I can not think of any other Scottish island with a high school that is not designated for all the children. I think we need to stop discussing a 2 to 18 school as it seems obvious that it would need to be in Tobermory. I think Tobermory should have a primary school and early learning centre. The high school would need to be in the Craignure area, so that all island children can attend. This could also help with shared teachers from Oban High. Craignure Community facilities – sports, indoor / outdoor, swings, and for the elderly too. Craignure Staggered project – High School is most important. Craignure Travel costs for ELC children paying for petrol from Tobermory to central location is not sensible. Need more ELC across island. Craignure Environmental impact of travel is a consideration. Nursery kids going from Lochdon to Salen. Craignure Central location. Community school – college, primary (possible). Not ELC. Craignure Would like sports facility – no need for swimming pool. Arrangements with Craignure village hall. Craignure Prefer to keep primary and nursery at Tobermory. Craignure Site large enough that there is enough of interest to keep pupils on site at lunch time. Craignure Central on island. Families being together during the week. Kids missing family. Craignure Big island – why should it be anywhere else than the centre? Don't move current primary school. Craignure Garmony would be ideal. Sports facilities harnessed and easy access for everybody. Craignure If off island, not seeing friends at the weekend. In 1970s, consideration of high school in the centre. Craignure Reduce the impact / decant disruption on the existing pupils (which would happen if it's built on the existing site) Craignure Easier acces for teachers and other staff to come across from Oban each day. Craignure Community facilities in campus – gym, college, nursery. Page 384
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Appendix Three – Comments 57 Appendix Three – Comments Image captionImage caption Craignure That it happens! Craignure Site big enough to generate own electricity. Craignure Leave primary and nursery in Tobermory if buildings can be improved. Craignure Central island high school, primary in Tobermory. Craignure Access to historic sites, nature etc in a variety of locations for young learners. This would need more ferries so people don't have to travel too far, eg in school buses. Craignure Middle of the island so ALL children from Mull can go to a Mull school. Craignure Rugby club, swimming pool, ferry terminal in Craignure so this should be where the school is. Craignure Want retail (Co-op and Morrisons central too). Craignure Salen would be central location. Craignure Share rugby pitches – facilities for sports. Craignure Online for college. Craignure Family unit – don't want children leaving island. Craignure Location – very accessible. Green field site. Ross children leaving island. Craignure Ideal location at Garmony. North of rugby club. FLS. Craignure First and foremost, I believe the campus has to serve the island as a whole, therefore must be accessible for travel from all parts of Mull and has to be located in the Craignure area. Near the ferry allowing staff to travel at times to teach subjects that may not be covered by full time members. It seems really sensible to cater for all young on Mull. [...] Many other benefits are obvious: near the swimming pool, near the rugby pitches which are excellent, the flattest and biggest playing fields on the island. It would foster a togetherness across the whole island. Craignure Divided community – Tobermory don't think rest of island exists. Craignure Central site, community growth, all children growing up together. Craignure Perhaps a suitable site in and around Craignure. Ferry connections. Craignure Good access to public transport and existing amenities / facilities. Craignure ELC - Tobermory. Infants and P1-P4 – Salen (move Gaelic medium). P4-7, High and college – Craignure / Garmony. Craignure Not acceptable to bus nursery kids 20 miles. Craignure Central location. Two centre – ELC and primary, separate secondary. Craignure Ideal location next to house (TSL) development in Craignure. Geographically a good site. Craignure If part of the wider socio-economic view, a high school centrally located would help re-population in Ross of Mull. Craignure Concern if this is done in education silo. One site, and that site will inevitably be in Tobermory. Craignure Council tax receipts. Community cohesion. Avoid depopulation. Craignure A centrally located high school would have a bigger roll than Tobermory High School and would be able to offer more subject areas. Page 385
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58 Appendix Three – Comments Image captionImage caption Craignure Important spaces: adult education (evening), gym. Get info from community swimming pool to compare with gym use. Craignure Gym already in Columba in Fionnphort (market research). People at Aros Hall previously had a gym. Craignure Market research for Rugby players – Garmony. Craignure Access to after school facilities. Craignure Travel is very important – much more tiring and has more impact for ELC and early primary years. Craignure Enough parking for staff and parents. Craignure Facilities in a modern school – accessibility, security, water tight. Craignure PE facilities for primary and secondary. Athletic facilities. Secure from public. Craignure Improving social cohesion between the north and south / reducing the sense of a divide between communities. Craignure Centralisation of a campus that can support the whole community. Craignure Central island = development. Potential for central hub housing, facilities. Craignure Easy transport links for pupils and staff. Craignure Plan B: ELC stays in Tobermory. 4-7 in central location. Catchment area review. Salen used for Tobermory infants. Craignure Balance what's more impactful – day to day travel of pupils north to south, or off island? Craignure Health and safety issue – wake at 5.30am to go to school in Iona. Don’t be away for five days. Craignure Existing facilities – rugby, hospital. Craignure Central school would bring community together – less division. Craignure Central location – stop kids going off island (tired). Craignure If in Tobermory it’s not a 'Mull Campus' – not accessible for Mull. Craignure Tobermory High not in right location. Craignure Aim to [upset] the least people! Craignure What’s right? Affordable; moral; for best of communities. Craignure Central location will repopulate island – development company housing. Craignure Learn from decisions of 60s and 70s – pier in Craignure, pool in Craignure, Hospital. Need central hub. Craignure Central location could attract teaching staff. Craignure Outdoor facilities. Craignure Transport links – bus, parking, drop-off zone. Craignure Keep primary and ELC in Tobermory (new site out of town acceptable). Craignure VR / Tech links. Craignure Community use not to dimish school facilities, ie current library. Craignure Community facilities, library, conference space, accessible building. Page 386
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Appendix Three – Comments 59 Appendix Three – Comments Image captionImage caption Craignure A site accessible to most amount of people (within 30-40 minutes), not necessarily where the majority of the population live (ie central). Craignure Perception of north vs south divide. Craignure Accessible to the most amount of children. Craignure No change to catchment areas. Stay put, but be a better school. Craignure Can't be right that kids in the south can't stay on the island. Craignure Plenty of outdoor space. Craignure Closer to Craignure would allow teachers to travel. Craignure A community school for the entire community. Good facilities will entice more staff options. Craignure Suitable spaces for sports, after school clubs, and all weather sports field + natural if possible. Craignure Enhance links with local residents for eg intergenerational activities and learning. Craignure Higher quality outdoor space for play and sport. Craignure A site where housing can also be built with a condition of staff accommodation. Craignure Safe provision – roads and drop-off – for public transport. Craignure Don't want child travelling on a bus 15-20 minutes. If bus is supervised, then could be longer. Craignure What are the timescales realistically for actually building a new campus, and can the Council afford it? If not, then better not to waste time on this and look at other options. Craignure It would be lovely to incorporate facilities for families such as use of gym, we don't have one on Mull. Also use of school for adult education. Craignure Centrally located much more beneficial for all communities. Ross of Mull becomes included by more people wishing to live there, increases population, encourages more businesses etc. They become more included on the island. Craignure Centrally located allows access to other teachers from mainland. Offers better range of subjects available to all children instead of having to go to Oban for additional subjects. Craignure Communities south of Craignure will continue to become an aging community and suffer depopulation. Craignure Safe and organised drop off and collection. Craignure Central school would allow teachers from the mainland giving more diverse subject options. Craignure Central school would hopefully encourage improvement in infrastructure for the whole island. Craignure Children have a right to a family home life. Excessive commutes or boarding away denies them of this right. Craignure Suggest if central location such as Craignure then review of primary catchment areas would be required. Substantial new housing development in Craignure. Page 387
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60 Appendix Three – Comments Image captionImage caption Craignure Consistent with other Argyll and Bute schools. Craignure Feel strongly that central location in Craignure would bring significant economic, social and infrastructural benefits to the whole island. Craignure Location of primary is less important than quality of education and staff. Craignure Central location for economic growth especially on the Ross of Mull. Craignure Good play equipment, chairs to sit out, smart panels. Craignure Online college facilities, community education hub. Craignure Central closer to ferry. Utilise transport to expand opportunities on the mainland. Craignure No one wants to take a primary out of Tobermory. Craignure Impact of travel on secondary children from Ross of Mull and Iona also significant. Craignure Consider location to suit whole of Mull including Ross and Iona. Realise this will mean travel for pupils from Tobermory but would be great to allow all children to learn on the island. Craignure Opportunity for after school clubs, ie sports. Craignure Central Craignure location could allow for access to / from Oban for teachers and students for educational and recreation purposes. Commutable ferry could also help facilitating potential recruitment challenges. Craignure If central location then could bring in teachers from mainland. Craignure Impact on south of island – central will enable communities to continue and possibly thrive. North of island may mean these communities die out. Craignure Ross of Mull vacant [of young people] Monday to Friday. Don’t want to lose the children off island. Craignure Make commute work for pupils – electric buses and purposeful (tables so they can work). Craignure Tobermory to a central location is only 40 minutes on the bus – that's not too far. More kids on the bus. Craignure Primary and nursery in Tobermory. Don't want to move it. Craignure Ask the rugby club and Isle of Mull Hotel where people travel from to access their central community facilities. Craignure I believe this could be an opportunity for children all across Mull and Iona to be educated closer to home and an opportunity also for children from the Ross of Mull to avoid travelling to the mainland for their secondary education. Craignure Believe consideration should be taken to split the campus between high school and primary and preschool. Multiple socio economic benefits to the high school being in a more central location however the assessment of this is impacted by the lack of primary and preschool remaining in Tobermory. I appreciate there are shared facilities such as dining hall but surely these are minimal in the overall budget. Page 388
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Appendix Three – Comments 61 Appendix Three – Comments Image captionImage caption Craignure The Craignure area as its most central to the island and if staff are required from Oban its close to the ferry so no car will be required. Why can't it just be a secondary school as children of that age are capable of travelling on public transport. Craignure The campus should be in Tobermory where the majority of the population lives. Dervaig A Tobermory capus with halls of residence for kids from the south. Dervaig Point 4 – Dervaig and Salen Primary may not be able to take the Tobermory primary kids, so would also need enlargement. Dervaig Public bus route to Tobermory 80% funded by council as it is a school route – would that route continue to be viable if school relocates? Impact on community. Dervaig I don't think a 2-18 campus works well – Tobermory [current school] is not a good layout for young children. Dervaig I would like to see the new school uniting the north and south of the island. Dervaig Tobermory – Dervaig – Calgary bus route potential to be impacted if school moved. Dervaig School staff live locally – significant impact on them, potential to lose staff. Dervaig You state that all other primary schools on the island will be unaffected. Would Salen primary school remain functioning if the new campus were in Salen? Similarly with Loch Don and Craignure. Dervaig Potential to use school for adult learning / income generation outside school hours. Dervaig Most people on the mainland do not realise Mull is the 4th largest island in Britain. The travel time from one end to the other is equivalent to travelling from Glasgow to Dundee via Stirling and Perth. This has implications for being 'LOCAL' !!!!! Dervaig Would central location negativity affect the majority of young population with increased requirements to bus children to central school. Dervaig If a like for like campus is located outwith the Tobermory location, pre-school and primary school children from Tobermory will be unfairly discriminated against as they will have no alternative site school to attend. This assumes that smaller primary schools on the island will be unaffected, is this the case? Dervaig Our priorities for our children are firstly a purpose built school with disabled access and space for learning in a safe and spacious environment. Purpose built PE facilities including outside sport space. anything which encourages the pupils to mix more, and if possible increase the pupil numbers, so we would not be against the school being in Craignure. Especially if this meant that visiting teachers could commute over, and the same for pupils wishing to compete with sports, or inviting other schools over to compete with us in sports – having the site within walking distance of the main ferry would encourage this/access to swimming pool and other facilities. Page 389
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62 Appendix Three – Comments Image captionImage caption Dervaig I’m keen to make sure that the views I shared at the Craignure Village Hall Meeting are included in the consultation. 1. I am in strong support for a new campus for Mull 2. I am certain that the best solution for the sustainability of the island population is for a 2 site campus NOT a single site campus. The decision taken at the outset of the bid for a single site option effectively ruled out selection of a site anywhere but in Tobermory and rendered the current call for sites redundant and even a sham in the eyes of some residents. 3. As the largest single settlement on the island, Tobermory must retain an ELC and Primary. That said, Tobermory only has around a third of the islands population. Hence my strong view that the High School should be in the vicinity of Craignure and that all the existing primary schools should remain operational. 4. The decision for the bid to be based on a single site 2-18 campus does not serve the best interests of the island population and is not in my view a sound decision. It is not ‘islands proof’ when considered against the content of the Islands Act. The decision to pre-select a single site 2-18 campus was taken without consideration of an Islands Community Impact Assessment which requires consultation with the affected community. The community was not consulted about the decision to pre-select the option of a single site 2-18 campus. So it is my view that the process being run by the Mull Campus Team is flawed from the very outset. 5. Here are some of my reasonings for favouring a High School in the Craignure area: a. To encourage families with children to live in the Ross of Mull, safe in the knowledge that their children will not be sent to the mainland during the week for their High School Education. I am certain that incoming families and returning families are put off living on the Ross of Mull by this single issue. I am aware of families who have left the Ross of Mull because they do not wish their children to go to the mainland for their High School Education. I strongly suspect that no families with children have moved to the Ross of Mull because they want to be separated from their children whilst they attend High School on the mainland. A&BC and the Scottish Government both have policy outcomes for reversing depopulation. The decision to pursue a single site 2-18 campus bakes in the certainty that the Ross of Mull will continue to face depopulation issues (because the only location for a single site 2-18 campus must be in Tobermory). Page 390
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Appendix Three – Comments 63 Appendix Three – Comments Image captionImage caption (Cont’d) b. By enrolling existing children from the Ross of Mull and attracting new families with children to the Ross of Mull, the number of children in a Craignure based High School will increase. In turn, this will increase the number of subjects on offer at a Craignure based High School compared to a Tobermory based High School, thereby improving educational outcomes for children from central and north Mull who would otherwise attend High school in Tobermory. c. Retaining High School age children from the Ross of Mull on the island, five days each week, 38 weeks a year will change the dynamics of the Ross of Mull Community which is currently devoid of high school age children during the school week. 6. The selection of a site should also take account of the current plans for 97 houses to be built in Craignure which will make a significant change to the demographics of the island and to the equation for considering carbon emissions from transporting children to High School from around the island. 7. In any case, it is my view that sooner or later, the buses on the island will be electrified and we have plenty of scope for integrating the charging of those electric buses with local renewable energy generation and battery storage schemes. 8. Ignoring the 97-house development in Craignure would be folly, both in terms of site selection and in terms of capacity of the school. I urge the Mull Campus team to consult [the Housing Strategy Manager] to ensure that housing developments planned by the Registered Social Landlords, Mull and Iona Community Trust, South West Mull and Iona Development and North West Mull Community Woodland Company are reflected in the design and capacity of the campus and the High School in particular – wherever the site eventually is selected. Dervaig The impact of closing all school provision in Tobermory is a backwards step. ELC and primary should remain, as it is in many of the other villages in the island. Wee children should not have to travel 35 miles for ELC or primary. The grant rules can easily be amended if the funding provider us minded to do so! Dervaig Continued accessibility for all children, so location is very important. But also the ability for the site to provide as many facilities for students as possible, eg sports, arts etc. The higher quality facilities will over time attract more families where variety and opportunities for teenagers in particular is so important and lacking on the islands. Dervaig I’m in support of a high school based centrally giving pupils from Iona and Ross of Mull the chance to remain in the island. Page 391
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64 Appendix Three – Comments Image captionImage caption Dervaig Mull desperately needs a new high school, it is long overdue, and I believe that high school should be in a central location providing high school education for the whole island. This will give families in the south of the island more family time and go some way to decreasing the north-south divide that has always been present. However, to impose a condition that this must replace the Tobermory campus like- for-like is preposterous. The idea that provision of primary and preschool education in Tobermory be removed is very worrying as I believe this is just a means to try and centralise all the primary schools into one campus as well. This might have worked in Tiree and North Uist but the travel distances involved in Mull are far too long for young children. I say this as a parent whose child travelled from Dervaig to Salen Primary GMU. Even if a central primary campus is not an aim, the removal of the Tobermory campus will create all sorts of problems with catchment to neighbouring schools and increased travel times for very young pupils. What will also happen to public service buses that are currently subsidised to take high school children to Tobermory? Will Dervaig lose its bus service? I can’t see how a new campus can be built on the existing site in Tobermory, it shouldn’t happen, but neither should the removal of 2-11 education in Tobermory should a new school be built elsewhere. It would be criminal if this condition of building like-for-like and abandoning Tobermory Primary School ends up scuppering the whole project. Mull needs a new, centralised HIGH school, and Tobermory needs an independent primary school. Dervaig The new Campus for Mull and its surrounding islands is perhaps the most important development for the sustainability of island life to happen for decades. It is critical for all our communities that we get it right. Consideration of proximity to existing facilities and services such as sports, swimming and the ferry service are important. Accessibility to the whole island, and potentially Iona pupils should they wish, ought to be considered a high priority. The potential for adding new and improved sport facilities such as a running track and other fitness and training spaces should be considered important. Application/ options for additional 'bolt on' funding should be explored at an early stage. Community organisations, clubs and individuals would work with the Campus Team to look at what could be added on. If the Campus really is to be a 'Community' campus then adding other facilities for all the community makes sense and the team need to look creatively at maximising the options for creation of other useful services/ spaces – based on community feedback now and over the coming period. Finally – for any future request for feedback it would be helpful to have a more user friendly interface than a single bar input such as this current set up. Thanks for considering my thoughts. Page 392
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Appendix Three – Comments 65 Appendix Three – Comments Image captionImage caption Dervaig In order to make an informed decision on site selection we need data. We have none, we are told we don't need to get bogged down in the detail at this stage, I totally disagree. There is a feeling that the only safe choice is to opt for a Tobermory location so that the ELC and Primary isn't lost/closed. This defeats the purpose of the engagement. Data could therefore be being collected that does not reflect the true feelings of the community. There is a feeling in the community our views don't count and they won't be conscientiously taken into consideration when determining the location of the campus. We also not heard the youth voice for instance they may not want to stay in hostels and may want to go home every night. There are various documents on education from the past that demonstrate a more transparent relationship between Council and community. Documents from the education team in the 80's for instance state the consequences of extending Tobermory and the rights of children to still attend Oban High School. The uproar about the recent Gaelic Consultation and how the questions were drafted and the ongoing Helensburgh planning fiasco are just two worrying examples of recent poor Council process. Community members have been highlighting how their views were sought re Dunaros and how badly let down they were. There is a sense this is all being rushed and why couldn't we have considered sites sooner and also if an extension has been requested from Scottish Government for the project. So many things will affect a decision about location the socio-economic impact for both Mull & Iona, travel times, the possible review of catchment areas, future population projections etc etc. All needs this to be considered. While this is early days and is ‘engagement’ not ‘consultation’ I think we are being asked to make one of the biggest decisions of our lifetime on scant information and I believe that is unacceptable. What is heartening is the dialogue our communities are having shows they see the need for compromise some are already asking how do we save Tobermory ELC and Primary but we are happy for the Ross of Mull parents/carers to have a central school for their children. Ross of Mull parents don’t want Tobermory to lose their ELC & Primary. It is clear that the Council has a remit, a 2-18 single campus, the cheapest option but that is not necessarily what the community wants or what is best for the long-term sustainability of our islands. Given the impact previous decisions about location have had on our communities they including on their well- being of one would have expected Council Officers to have been briefed on this or to have undertaken some preliminary research about this. It is not evident this has happened or if there have been any socio-economic studies etc. Page 393
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66 Appendix Three – Comments Image captionImage caption (Cont’d) There is a great deal on paper about the needs of Mull & Iona over the decades which when studied seems to suggest we have the same problems today that we had decades ago including an issue with Government funding. It is like deja vu. Is this coincidence or is it that that suffcient commitment hasn’t been made to resolve the issues our islands face, that there needs to be better listening to the communities affected by Council decisions. I expected much more from the process it is important to be fully informed as early as possible, we aren’t. Personally in determining a site I think we need honesty (what is really possible), openess (what are the impacts), listening I believe is KEY. It was recently indicated to me that community members feel the Mull Campus Team were planting seeds in community members heads about moving certain year groups out of Salen etc. I hope this was not the case. There is a real concern that this equals rationalisation of schools and if a central campus does happen as it seems many want that it will be at the cost of our primaries and rural communities. These feelings are generated by previous poor process and to get past that the communities involved/most affected need more transparency. Included as they should be they are fantastic and can find ways to save money and raise it to but this isn’t currently being promoted. I am afraid its to early for this makes people think you have something up your sleeve I am not saying that is the case. The community wants to help but there is a feeling we are being held at arms length and a fear about what is possibly be going to be imposed on them and sold as their choice. Dervaig It depends whether you are just looking to replace the existing school, or if you're taking this opportunity to reform the education system for Mull families. Just replacing the school will mean building it in upper Tobermory. Otherwise, re-siting a high school more centrally, to include children from Ross of Mull and Iona, would make [sense]. Obviously this would mean running a network of buses to and from the school, and building a replacement primary school in Tobermory. Iona Educational opportunities. Would they have more on Mull. Iona Need guarantee from A&BC that Iona high school pupils continue to receive FUNDED travel and accommodation to Oban regardless of new Mull campus location. Iona No engagement from Iona without a GUARANTEE that Oban option is available and FUNDED, whatever comes of Mull decision. Iona Make sure the way things are for Iona children doesn't get lost in the wider conversation. Iona You need to make it ABSOLUTELY CLEAR to everyone that if the HIGH school moves from Tobermory, they will have NO educational facility left there – no primary or ELC. People don't understand, and they might not read the website or the letters, and they really need to know this as clearly as possible. Page 394
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Appendix Three – Comments 67 Appendix Three – Comments Image captionImage caption Iona These are the circumstances in which I would CONSIDER sending our children to a HIGH school on Mull: Campus located at Craignure or further south; a range of facilities equal or better to those in Oban; Ferry running 5am-10pm RELIABLY all year; double track road between Fionnphort and campus location. Is all that likely to happen? I think not. Iona Essential to retain existing catchment area for Oban, with existing funding. Iona We know our children can access after-school clubs in Oban. We want that, and we don't think they will be able to access such clubs if they go to school on Mull. Iona What educational benefits would we get even if it were somewhere like Fionnphort – it wouldn't benefit us. Iona Travel would not be funded if we have to travel / choose to make a placement request…? How would that work? Iona Can't guarantee after-schools [clubs]. P7 big fish in small pond. Iona Regardless of where the campus goes, if it is on Mull, we are not interested in anything other than a guarantee our children can continue to go to Oban. Iona Important to have single option of Oban High for Iona pupils to maintain equality. More opportunities available – educational and social – less travel impact. Iona We feel it's not really worth offering any sites around Ross, as we know full well nobody from Tobermory would travel down here. Iona Oban places MUST be fully funded – travel etc. Iona Travel times – too long every day. Iona CalMac ferry must run later to help with after-school clubs. Iona After-school activities not beneficial unless additional / later ferry availability. Iona How would a central school provide travel (out of hours) for Iona children? Additional bus and ferry services would be required. Iona Travelling long distances for any children with additional needs / neurodivergence is very difficult. Iona Are there no rules about how far – or how LONG – children can travel to school? Iona It's so important for their development to experience life in a town, get to socialise, see the world, make friends. We know they get to do that in Oban. Iona If the school were in Bunessan, that would be commutable for us. But not really anwhere else. Iona It's priceless to get my son home every day for a hug, but it would be selfish of me to demand he stays on Mull when he gains so much by going to Oban. Iona We need GUARANTEES. We need to KNOW that Oban stays on the table. There is NO conversation until we know where we stand. Iona A hostel on Mull would be an even WORSE option. It needs to be Oban – otherwise we get the worst of both worlds. Iona If you can come back to us with a guarantee that Oban remains the catchment for Iona, there's no need to come back and talk to us again – that's what we want. Page 395
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68 Appendix Three – Comments Image captionImage caption Iona Even if it were closer, we would not benefit from after-school clubs, sports etc because the ferry would leave too early for our kids to participate. Iona We want to know, first and foremost, about what will happen to the catchments and where our children will go to school. Iona The Gaelic unit has a different catchment / way of funding – it doesn't seem fair things are funded differently. Iona It is absolutely vital that, regardless of where the school is situated, Iona kids have an assurance that funded places in Oban are still available. Iona In tiny island community, the benefit of after-school organised activities is paramount for development in secondary school. This happens in Oban and wouldn't happen if children are spending hours on travel. Iona Further than Fionnphort or Bunessan not feasible for Iona. Iona We need a guarantee that Oban High and hostel will not be taken away. This includes the funding! Iona Regardless of where the campus is on Mull, I would like a guarantee that Oban High School would be fully funded HOSTEL AND TRAVEL for kids on Iona. I don't believe a Mull campus, regardless of whether it is in Tobermory or Bunessan, would be able to offer our kids equal or better opportunities than those available in Oban. Currently: education, subject choices, extra-curricular activities, exposure to the wider world, larger peer group, less daily travel time. I believe the funding would be better spent updating the hostel facilities in Oban. On a small island, Oban is an essential stepping stone to the rest of the world. A Mull campus cannot deliver this. Iona If there is a review of catchment areas, is it possible for Iona to be in two (ie Mull and Oban)? Iona Regardless of site, we need a guarantee that Iona children will still be able to attend Oban High in the same fully funded way as at present. Iona Vital as parents on Iona, we are assured that despite plans for a Mull campus, we will continue to be in the Oban catchment area with funded travel and hostel. Iona Believe that sending a child from Iona to a Mull campus set up is a life with difficulties logistically, financially and would limit my childs access to host of opportunities. Iona By the time the kids get to 17 they are ready to experience bigger places / meet different and more people and have more opportunities. Iona The challenge of the short ferry journey to and from Iona on a daily basis, especially in winter, is not feasable. It’s bad enough worrying about it twice a week. Iona [...] the support on offer in a bigger school is a major factor in where I would send [my child]. Iona No matter where the new campus will be, there needs to be a fully funded place in Oban for all Iona pupils!! Page 396
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Appendix Three – Comments 69 Appendix Three – Comments Image captionImage caption Iona After school clubs – would they be available to the children? Bus – ferry Iona What happens if the ferry is off by the time they get to Iona? Iona Vital to retain option of children wanting to attend Oban – more opportunities and less distruption using Oban ferry weekly than Iona ferry daily. Iona Iona is at the edge of all provisions. They benefit more from mainland provision with all the opportunities that brings. Travelling long distances to Mull schools everyday and being unable to access after school opportunities is of no benefit whatsover. Iona Unique small communities must be listened to individually and not lumped together. Its worrying how little understanding there is about detrimental travelling to Mull school would be a for Iona pupils at this stage in the process. Iona Roads are fragile. Busy on bus. Escort on busses. Iona To keep unique rural populations healthy – design of provisions needs to consider their unique challenges – geographical infastructure, not assume an easy answer. Oban though further away offers more benefits to Iona young people and a more solid educational provision. Ferry distruption would be a daily reality rather than twice a week consideration. Iona It is wholly irrelevant where the Mull campus is sited – what is relevant to Iona is that the choice to go to Oban is financially safeguarded in catchment for Oban. Iona It is imperative that Iona young people are considered according to their unique need and context, which are significanly different to the Mull population. Need a team 'champion' who is fully informed. Iona If forced to send to a Mull campus – then this is not a choice. For Iona children a school on Mull excludes them from sports and clubs. Iona When ferry is off on a Monday why do the Iona children at Oban High School not video link into the actual lessons rather than Google classroom? Iona It's a rite of passage to go to Oban, this is what our children want to continue. Iona Risk of losing families from Iona if children are expected to travel 2-3 hours per day. Iona The community of Iona want to be removed from the process. Iona Hostel on Mull would offer less social and other opportunities outside of school hours. Iona No advantage to Iona having school on Mull over Oban. More travel time, more affected by ferry cancellations. Iona Iona kids right of passage is to go to hostel. Want to go to the after school (clubs), don't want to replace with being on bus. Iona Is the environmental impact of so many children and staff travelling daily being considered? Iona What is a reasonable daily travel for the early years? Primary? High school? Iona Exhuasting every week going to Craignure. Experience is important. Iona Only interested in can kids still go to Oban? Iona Travelling on single track roads – not twice a day. Page 397
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70 Appendix Three – Comments Image captionImage caption Iona Also expressed was the view that an essential benefit of attending Oban High for Iona based pupils is the interaction that town living brings and Hostel life is a very useful schooling in its own right. The more 'cosmopolitan' mix of pupils foster key life lessons and skills. Iona While outwith the scope of this exercise, a rebuild of the Oban hostel would be a very worth while project. Iona I would agree with views expressed verbally today that key points for parents on Iona are that a fully funded travel hostel option in Oban remains, ie Iona remains in Oban's catchment area, with current economic arrangements. Iona Could a campus on Mull offer the same educational and social advntage of going to Oban? Iona Oban High and Oban as a whole is a far better option in all regards! Iona Anything that might discourage people from wanting to remain, settle or return to the isle of Iona (and Mull) must be avoided. To remove Oban as the High School option for Iona primary school leavers would precipitate a culture of less assistance of a vital school life for Iona pupils and therefore their parents – this might lead to depopulation of a key element of our demographic. Iona I worry for the mental and physical wellfare of the children, what with travel, lack of activities and social situations which are vital at that age. Iona The right for Iona children to access Oban High School and hostel must be preserved. Iona Very worried that Oban places won't be funded. Please confirm that Iona pupils WILL be in Oban catchment with funded places. Iona A placement request isn't funded, so it's just NOT an option for most of us. We will LOSE families and children from Iona if Oban is no longer a funded option. Iona We feel we've had a stonewall. We have been asking for guarantees that Oban will remain the funded option for us, for over two years. We have NOT been given the information we need to respond to any engagement, because we have no idea that is happening. If we know we can stay at Oban, then this becomes a decision for Mull, as it should be. Iona It's not acceptable to make young children travel long distances. Who is carrying out the travel impact assessment? It needs to take into account time, wellbeing, social impact – much more than just about distances. Iona Effect on enviornment / carbon of increased travel needs a full impact assesment. Iona You're going through a very quick process to find sites. At what point are you going to do a thorough review of the impact on island communities, travel times, etc? Iona Want a guarantee that can access Oban. Iona I would love to give my child a hug but want to give my child experiences. Page 398
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Appendix Three – Comments 71 Appendix Three – Comments Image captionImage caption Iona We weren't asked by the sounding board for our opinions so were not able to feed into this process. We feel the timing of this engagement is not accessible and inclusive, and we HAVE NOT been given enough information to make informed decisions, despite asking for assurances from the council for years about the position re: funded places for our children at Oban. The process is flawed if we do not have suitable information. Not in line with national standards for engagement. Iona 28 days would have been mission by ferry, bad weather. Iona Teenage life spent on a bus. Out grow here (Iona). Iona Busses from Iona is too far. Iona Iona has to remain in the Oban catchment area. Iona For Iona parents and grandparents are probably less concerned about the siting of a new Mull 2-18 campus because it could not offer all that Oban does (not just facilities but town life as an education / life skills) and travel would be unhealthy due to distance, duration and reliant on weather disruptions. The Mull campus should be decided about by Mull residents. Iona As an Iona parent of both an Oban High and an Iona primary school pupil I have concerns about Iona being included in this consultation. I would prefer an assurance that we remain in the Oban high catchment – and that hostel and travel will still be funded. Regardless of the site chosen on Mull, Iona-based pupils would still face a lengthy daily commute therefore missing out on after school activities and spending up to three hours a day on a bus (if say Craignure was as chosen site). The Iona ferry is often subject to cancellation which would negatively impact on attendance. When you choose to raise a child on Iona it isn’t an easy option to send them off to board at 12 – however they get so much out of the experience, to replace this with a lengthy daily commute isn’t in anyone’s best interests. Iona Iona residents MUST have a fully funded option to continue the status quo. Iona Travel time to get to school for Iona children. Lochdonhead It feels better having it in a more central location between Craignure and Salen. Lochdonhead Primary schools are the heart of every community here, they are so special. How will this affect the other primaries? Concern that they may be closed. Lochdonhead Why were we not asked about whether a 2-18 campus would work for us, before the funding was discussed? Lochdonhead Can Salen cope with the extra children? We have one primary in Lochdon and one in Salen, and most of those kids live there. So even if the Tobermory kids came to Salen, and the catchment lines were revised, how on earth could you send Salen kids out of their home area to another primary, while they watch kids come from Tobermory to go into their local school? It just doesn't make any sense. Page 399
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72 Appendix Three – Comments Image captionImage caption Lochdonhead A more central location would be much more convinient for us, for high school. But I'm concerned you're adding a lot of travelling for Tobermory primary and ELC If the 2-18 campus is moved somewhere else. Lochdonhead Could you not split the funding for a primary in Tobermory and high school somewhere else? A primary would not have to have a load of sports pitches etc… The other primaries here don't have that. Reduce the spec of the primary and spend the money on a better high school, if you can't afford to build both with full facilities. Lochdonhead It will be amazing to have a secondary campus, even if it stays in Tobermory. But it makes no sense to move both. Tobermory needs primary provision. Lochdonhead Is there any possibility the campus could be split? I don't think people realised we were talking about more than just a high school. It's put a different spin on things – I'd love a more central high school but I'd hate for Tobermory to be left without primary. Lochdonhead I'm worried that this will result in other primary schools being closed, if they are near the new campus. Lochdonhead Worry is when new campus is built you will close other primary schools. Lochdonhead What's important is outdoor space, gym hall, more curriculum options, football / netball pitches. Lochdonhead A central location would be great, but I also worry that Tobermory loses pre-5 and primary. Lochdonhead The new site needs suitable parking – for teachers and visitors. Lochdonhead It would be ideal having breakfast and after school clubs available. Lochdonhead Sufficient space to deliver PROPER sports facilities outside – both kids and adults need these facilities. Lochdonhead Children south of Craignure should have the option to be educated on the island. Lochdonhead How will we guarantee enough teachers? Will accomodation be provided? Lochdonhead I really think it's about time the kids south on the island are thought of. [My child] is so worried about traveling to high school, she will get picked up at 7.20am taken to the main road for the bus to then travel to Tobermory she will then not get home until after 17.00 how is that fair? I really think If the high school goes in Tobermory again we will have to move off the island we will hardly see her otherwise, getting home so late and up so early when will she find the time to revise in what will be the most important years of her life and setting her up for the world outside of school. Our roads from where we live are not gritted, they are single track and dangerous every year cars go off with the ice or/and snow, this will mean they will have to leave even earlier to make sure they get the bus on time. Please please think of the kids that have to travel or stay in Oban, they deserve to have their kids at home for these important years. Page 400
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Appendix Three – Comments 73 Appendix Three – Comments Image captionImage caption Lochdonhead The main issue is making sure every child on the island is able to attend a high school on the island. No child should have to go off island and be away from home at such a young age all week, every week to be able to get an education. A more central location would benefit everyone. Lochdonhead Adjacent to ferry port and central to all of the island residents. Lochdonhead Travel times – currently Lochbuie are travelling four hours a day to attend Tobermory High School. Lochdonhead It is critical for the sustainability of the Island that a central school is built. A way needs to be found to split the campus and keep all primary in Tobermory. If Tobermory primary closes, everyone will assume all the Islands other schools will follow as the years go by. Salen As a child going to Salen GMU there were lots of cars doing the commute for few kids attending. But now the numbers of kids increased there's one large bus doing the journey so higher number actually benefits congestion and pollution. Salen Central school really important, bringing island and families together. Salen If going to a club later on at least there are shops or somewhere for a coffee if in Tobermory. Salen Want more virtual and physically shared learning with Oban. Salen I feel this is a great opportunity to build a school for the whole island. A more central location would make this possible. Salen Neutral on location, but more central school may help to bring the island together. Salen Central location could act as repopulator – Ross of Mull. Airbnbs – central. Tobermory at capacity. Salen The kids in Salen Gaelic do a lot together but will be split for high school. Salen Construction impact on existing school and students if build on existing site – a concern. Salen A site big enough to allow for future expansion if needed. Salen Transport is key – road infrastructure. Salen Could boarding facilities be provided for Mull campus? Site of sufficient size to allow this in future. Salen Proximity to other facilities, eg shops / lunch to give pupils choice. Salen If central we would stay on Mull. If not, wouldn't want kids to board. Salen Smaller villages would be more appealing for families to move to if nearer a centralised high school. And therefore over time population numbers would disperse island-wide, easing pressure on roads and northwest Mull. Salen 91 kids in Tobermory. 145 in other location. Bussing kids not a big issue. Salen Salen school already works as a centralised campus for sgail araich and GMU in terms of joining communities, transport, clubs etc. High school needs to be central. Salen New campus (in new location) could allow businesses to thrive and improve the economy in the local area. Page 401
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74 Appendix Three – Comments Image captionImage caption Salen Site big enough to allow for parking. Salen Under 5s can't travel from Tobermory to central site. Important to keep kids on island – don't send away to mainland. Salen Centralised site is best for island. Available in centre is a must. Salen Campus need to be a hub for the community. Salen ELC could stay at Tobermory. Quality of building is ok. Salen Family unit is important. All family need a choice. Salen Consider additional support needs – provide sensory spaces, quieter areas for lunch, etc. Enough 'break out' rooms for 1-1 support / group learning. Salen Want to bring island together. If Craignure, could recruit staff. Salen Location near local amenities important to help children with neurodiversity feel part of the community and develop life skills outside school. Salen Proper outdoor facilities. Sheltered areas to enable outdoor learning even when weather is bad – especially for younger classes and ELC. Salen A central school would recognise the south of the island – it is neglected. Salen Central school would allow chlidren from south and north to mix. Salen If able to access high school on the island, fosters a stronger connection to the island. Salen Access to wider resources and community outreach. Closer to ferry would help this. Salen Effect on school friendships between children. Opportunities (island-wide). Logistics (travel). Salen Central school that has access to existing sports facilities (eg Rugby at Garmony, pool at Craignure) would be beneficial. Salen It is VERY important that the community know what is on offer. It is CLEAR they want to know if the site CAN be split and the LEIP team seems to be indicating it can. Salen High school CENTRAL LOCATION. Mull campus should be central. Salen If roads were better could locate campus anywhere. Salen Need post-school activities to make it a hub. Salen Effect on childrens' ability to take part in extra-curricular / after-school clubs VERY important. Salen A building that is accessible for all children (physical and sensory issues). Salen There are comments on Facebook that suggest the community are getting mixed messages. It is important this doesn't happen as it leads to mistrust. We want the consultation to go well. Salen If it has to be in Tobermory purely because of retaining the primary school there, it would be a missed opportunity and a real shame. Salen A 2-18 campus is a long time to go to the same place – a split campus is preferable. Page 402
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Appendix Three – Comments 75 Appendix Three – Comments Image captionImage caption Salen Travel distance for younger kids is a concern. Salen Location – listen to all communities to choose the best site for the majority. Big enough to be spacious and not feel cramped with space to grow in the future. Make the most of local environment and strengths of the island – access to outdoors. For me, a central location is preferred for our family. Salen Facilities – such a great opportunity to build in amazing facilities, especially for STEAM subjects. A swimming pool would be amazing as access to Craignure is awful. Sports facilities that the community could access too. Outdoor education / classrooms. Better facilities for children with additional needs and different learning styles. Salen ELC – better design, purpose-built setting, allowing free-flow and outdoor learning, and better equipped for two-year-olds, babies etc. Creche facilities for working parents / staff. Salen I'm a personal trainer, very keen the campus has space for accessible fitness and wellbeing equipment – both for medical rehab and recreational fitness. We have a large elderly population and nowhere else with suitable facilities. Proximity to public transport and other amenities (shops, cafes etc) nearby would be ideal. Salen Potential for linked campus with Oban, improving range of subjects and activities if more centrally based. Salen So important for kids in the south end to go to school on Mull – more people / families may choose to live in the south end if school was closer. Salen Enough space – not cramming things into a space too small just because it's more 'convenient'! Salen Will the money allocated for an ASN hub on the island be spent before the new school is built or will it go into the pot for the new build? Salen This new facility should be available for all pupils on the island. Salen The new sites should take into consideration space, parking availability, proximity to current sports facilities such as the rugby club and swimming pool. Salen The new campus would be an amazing new asset to the island. The new campus should have facilities such as a big enough school hall, large enough playground, outside learning spaces taking advantage of our rural location. Walk in / out spaces. Salen The new facility should take into account ASN unit / facilities accessible to all children across the island. Salen Enough room for facilities – pitch, running track. Salen Can we explore more innovative solutions? Eg combining existing primary schools (central) and the high school to improve revenue affordability? Or eg P1-4 in Salen, P5+ travel elsewhere. Page 403
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76 Appendix Three – Comments Image captionImage caption Salen Craignure is growing, need more community infrastructure already – pool, rugby centre. Salen Travelling long journeys for primary kids is unfair. Need to do something in Craignure. Salen Ross of Mull need a choice. Salen A building that attracts and retains staff. Salen Impact on a 'place' of having / losing a school. Ie how will the wider 'place' (Tobermory / the Ross / Craignure) change as a consequence of the decision? Salen How many children, of what ages, are having to travel for how long / how far? What does this add up to / mean per week for these children? Salen It's been proven that natural light is important for health and well-being, so I think big windows would be very important. Also should we be lucky enough to get a site overlooking a nice view, it would be great to have windows that maximise the view I feel this would be inspiring and make the school a nicer place to come to every day. Black out blinds would also need to be installed for the use of projectors/science experiments or games that require low light levels. Lighting is also important, research shows which types cause headaches, something I suffered with in Tobermory school. I would want all areas to be open for ease of monitoring (no access behind sheds, or more intimate areas that would require extra playground monitors). A heated ventilated drying room for wet coats and wellies to hang at the entrance so their clothes can dry out. A covered area out the rain and wind for children and parents to stand at school pick up time. Lots of wide parking spaces, with big spaces beetween the cars to easily get children in and out safely. Ideally with a shelter overhead. Salen The majority of the islands population live in Tobermory therefore the campus should be in or near Tobermory. It doesn't make sense to put all children on buses just to have a central point to make it closer for a few students who may still choose to travel to Oban. A calculation of the number of students in each area should be made to show how impractical it would be for the current Tobermory school pupils to get buses outside of Tobermory. I don't belive there would be enough buses and drivers available without considerable extra daily expenditure. Salen If moving out of Tob, no other villages will be able to cope with additional influx of people ie shops and cafes. Parking needs to be plentiful. If moving from Tob after dinner clubs will be difficult to attend (at the moment I factor my shopping into this). Salen The new campus must move forward to be inclusive for all islanders. If it is just going to be a new Tobermory school at Tobermory, it will not benefit all islanders. In this day and age young students at the age of 11 should not have to leave home continue their education. The new campus should have inclusitivity at its core. Page 404
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Appendix Three – Comments 77 Appendix Three – Comments Image captionImage caption Salen If this school is not built centrally to enable ALL island children the chance to attend it, it will be catastrophic for the south end of the island, sending kids aged 11 to a hostel in the mainland is NOT ‘getting it right for every child’. The school roll of Salen Primary often exceeds the roll of Tobermory Primary due to children travelling to Salen for Gaelic. Children of primary age travel from all over the centre and north of the island to Salen for Gaelic so there is absolutely no reason whatsoever thag a bus could not transport secondary age Children from Tobermory to a different school. It would make far more sense to me than transporting half empty buses from the rest of the far out catchment areas to Tobermory. The cost of housing and feeding children in a hostel would be saved in the long run if children could be kept on the island, a central location would give so much opportunity for green space and good safe parking, which is needed. Not to mention the ferry links to Oban, the closeby swimming pool, Garmony playing fields and the hospital, this is all essential to ensure we have a prosperous island in the futures, helping to sustain local communities all over the island. We are comparable on Mull to islands such as Islay, Skye and Lewis and Harris – why do we still not have one amazing school all children on this island can access without a ferry? And what’s more, modern campuses in Scotland seem to offer college facilities, library facilities and more – this should also be central to enable all islanders the opportunity to access these services. Thank you. Salen While a secondary school in a more central setting would be desirable to allow many more young people to stay on the island it has not been stated where staff for the school may be offered accomodation as this has a huge impact on recruitment and retention of staff. The additional concern is there is no mention of how the pre school and primary school in Tobermory will be rebuilt in Tobermory if this campus is to be moved elsewhere. It is untenable to move these youngsters to bus travel from our capital town when so many walk to school at present as is recommended for health and well being. As such the campus in its present presentation must remain in Tobermory. Salen Thinking practically, I think access to mains water and electricity are important considerations for site selection as this can add significant costs to any capital budget. Space for the campus to grow and expand in the future, as Mull generally has an increasing population. Page 405
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78 Appendix Three – Comments Image captionImage caption Salen The building of this campus is an opportunity to unite the school populations of Mull and Iona. A centralised high school will enable all children on Mull and Iona to attend the same high school. Families previously put off living on the Ross of Mull due to high school students lodging in Oban for the week will be able to return it move there. Creating a much more sustainable community – something Argyll and Bute council has highlighted in their own vision included in the corporate plan. However, I do not believe that this should be at the detriment of having primary and pre school options in Tobermory. That would be improving the sustainably of one community while reducing it at the opposite end of the island. Tobermory Economic loss to Tobermory if school move is considerable. Tobermory No active travel routes in Tobermory – opportunity. Tobermory Children travelling from A to B causes traffic, congestion and breakdowns – with more buses needed. And we don't have enough buses on island to cope! Tobermory Should stay in Tobermory or close vicinity. Craignure too far away for young children. Transport not enough buses to transport children each day. Tobermory Site appraisal process must be broad enough to consider all implications of primary school – potential further bid for funding for Tobermory OR potential further bid for hostel for Ross children. Tobermory Negative impact on economic development / opportunities if campus relocated from Tobermory – many families choose to live there because of proximity to school. Tobermory 100% for Tobermory campus. If it were just a high school, then it could be in a central location. Tobermory If best site isn't Tobermory can we still look for funding for a primary in Tobermory? Tobermory Have changed my mind – no one was aware it was not just a high school. Don't want kids transported down the road [away from Tobermory]. Tobermory Places nearby where children can eat lunch locally, integrate and socialise with people, and get part time jobs. Tobermory Needs to be Tobermory. Loss of primary and nursery too drastic a change – biggest town. Tobermory Stay in Tobermory to prevent loss of children from here to Oban – people will send their children there if it moves. We don't want to lose our children. Tobermory Moving it from Tobermory will cause a ripple effect where you lose good teachers, families etc who will move away from here. Tobermory [...] [I don't want] to send a child so young a long way! Tobermory If site isn't commutable from Ross, can it be big enough to expand in future for a hostel? Tobermory How many people using hospital (central and from south)? Tobermory is centre – support it! Tobermory Ability to have after school clubs / breakfast clubs. Page 406
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Appendix Three – Comments 79 Appendix Three – Comments Image captionImage caption Tobermory More detailed info needed in order to give informed feelings back to Council for how to make decisions, eg percentages of kids travelling. Tobermory Identity of education in Tobermory is important. This is the main town, biggest population needs. Tobermory Majority of children are in Tobermory – transport reliability – are we bussing all those kids? Tobermory 2-18 campus may mean NO primary education in Tobermory, depending on location. Tobermory Tobermory NEEDS primary education. But secondary school does not need to be in Tobermory. Tobermory Lack of a primary school will kill Tobermory as a community – it will become a retirement and Airbnb town without a primary school. Tobermory Consult children on both the location and the design. Tobermory If it's in Craignure I would send my children to Oban – it's too far / too much travel for young children. Tobermory Tobermory reduces the impact on wellbeing of young children (and parents / carers) having to travel long distances. They get tired, it's not ethical. Tobermory Are you going to provide staff to 'man' transport and ensure safe delivery of children if the campus moves from Tobermory? Tobermory How do you propose to deal with ill children to parents who do not drive? Tobermory The position of the site affects socialising. Tobermory Think it's crazy to bus significant numbers of children elsewhere (outwith Tobermory). Tobermory We need detailed information about the number of children who travel to Tobermory for school. Currently 56% of secondary kids come to Tobermory by bus. Tobermory The school MUST be kept in Tobermory. Tobermory Are there going to be qualifying factors for transportation? If not, and the campus is moved out of Tobermory, how do you propose travel arrangements? Tobermory Tobermory is a community. This is an opportunity to enhance. Taking the campus away will rip heart out. Tobermory Choose Tobermory it's more accessible. I don’t think community facilities will be as well used in centre. Tobermory No school – no curriculum support on a daily basis to enhance education. Tobermory Most of your teachers live in this area. Will you pay them to travel? Tobermory What are the legal limits on travel time to school for 5-11 year olds? Tobermory Grandparent childcare – they don't always drive. Tobermory Very worried that moving it from Tobermory will lose primary education and nursery from Tobermory. It would kill the place. Tobermory Nice to have the young 2-3 year olds not far from home. I wouldn't have wanted mine a half hour drive away in case they're upset / unwell. Page 407
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80 Appendix Three – Comments Image captionImage caption Tobermory If children from Tobermory (the majority) can walk to and from school for after- school clubs a lot more will attend. Kids need to do lots of sports for mental and physical health. Tobermory Not eco to bus all the kids of Tobermory out of town. That would be a lot of buses! Tobermory If new campus includes ELC and primary for Tobermory kids, surely it needs to be in Tobermory! Great to keep all other island primary and ELC schools. Tobermory With [...] boys who live on the football pitch after school and in the holidays, would this remain? A big outdoor all-weather pitch / area that's accessible with lights in winter is essential. It's very well used by kids. Tobermory Very keen to have the school stay in Tobermory. My children walk to school and I want them to continue to be able to walk! Tobermory It's ridiculous to consider losing a school in Tobermory when a third of the population lives here. We need a school! Tobermory It makes most sense to have the primary here, even if not the high school – you CANNOT have young children travelling too far. Tobermory People on Iona will not be able to travel daily to Mull anyway, so moving the campus would not help them – it doesn't solve the issue for them. Tobermory People chose to move here because they knew what facilities were here – don't change it. Tobermory Not really aware of what 'catchment area' changes means. Tobermory Safe walking routes to school. Tobermory Transport time for primary pupils needs to be considered. Tobermory We moved to Tobermory because the school is here. Tobermory 100% I want the campus to be in Tobermory. Tobermory Safe and easy walking to the school but maintaining the link to town. Tobermory Transporting younger kids is more of an issue. Tobermory Large enough flat space for good facilities. Tobermory Walkable but supervised – important. Bussing kids more than 20 minutes is unsatisfactory. Tobermory Realistically the school has to be in Tobermory for many reasons. Tobermory Inadequate road infrastructure for increased bus transport. Increased wear and tear with impact on roads budget. Tobermory Wouldn't object to high school not being in Tobermory. Would object to no primary or ELC. Tobermory The closer to home the better, for ELC and primary. Tobermory Concern if ELC and primary education not provided in Tobermory. Too young for long bus journeys. Tobermory Pre-school at Tobermory recently built – can that stay? Tobermory Businesses benefit from proximity of high school – accessible on foot from school. Tobermory If the site is outwith Tobermory catchment areas being reviewed. Page 408
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Appendix Three – Comments 81 Appendix Three – Comments Image captionImage caption Tobermory Tobermory must keep a primary school. Tobermory Got to be in Tobermory, no real option. Tobermory Transport impact more significant for neurodivergent children – high proportion in Tobermory. Tobermory Don't bus kids away from Tobermory – it costs money. Fewer kids in Bunessan / Iona, and they already travel. Tobermory Infrastructure is in Tobermory – least disruption in Tobermory. Tobermory Where is the data we need to make an informed contribution to this discussion, eg percentage of children already travel daily to Tobermory secondary? Tobermory Logistics and number of kids, it's better in Tobermory. Don’t want to bus large number of kids. Tobermory Not realistic to move all the children to a central area. Tobermory Taking the school away from Tobermory will have a massive impact on local businesses. Tobermory More outdoor play space for primary. Tobermory Every town / village should have a school and it needs to be in Tobermory with 2-18. Tobermory Seems crazy to transport that number of children anywhere else. Tobermory Tobermory is a main town on the island and for it not to have a primary and ELC here is just not a realistic option. Travel times are logistically a nightmare, not to mention young kids falling ill and needing collection. Tobermory Secure building that public can't just access. Tobermory Moving the school would change the culture of the island. Tobermory Sheltered outside area for primary and parents. Tobermory Work pick-up easier in Tobermory. Childcare works better in Tobermory. Tobermory If school is not in Tobermory we would leave island. Tobermory Parents can't afford to transport their child to the ELC. Tobermory Would be so sad for the Tiny Tots and primary to travel from Tobermory to Craignure. Child care rely on grandparents so much now, not all can drive if there was a poorly child. I went to Tobermory school when I was young, would be so sad to see it being moved. Tobermory I moved jobs to be closer to my [ASN] child in Tobermory – if school is moved and I receive a phone call, that's an hour travel and associated expense to collect [them]. Shutting Tobermory should NOT be an option. Tobermory Access for pupils to be involved in the community during the school day. Intergenerational links. Tobermory If primary left Tobermory it would destroy it as a place to live. Tobermory Impact on local businesses – kids spend at lunch time. Giving kids choice – school lunch or local shops. Tobermory Working parents use the Tobermory ELC to enable them to work. Page 409
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82 Appendix Three – Comments Image captionImage caption Tobermory Moving the ELC will affect the communities and will need to consider transport. Tobermory Residents in Tobermory have chosen to live here influenced by facilities – school is a key one. If school elsewhere, will impact residents and will likely damage community. Tobermory Storm addresses ['buddy' houses where children can stay if ferries are affected by storms] happened historically. Tobermory Leave pre-school and primary here, and focus on the high school. A central / Craignure location would improve depopulation around the Ross of Mull. Then look for a suitable site for primary and ELC in Tobermory. Tobermory Road system isn't fit – what would health and safety say? Tobermory Importance of a community to develop pupil life skills. Tobermory 2-18 should stay in Tobermory, it's the heart of the place. Tobermory Tobermory is the largest community on the island. Teachers and families would have to relocate. Tobermory May affect some business / trade at lunch time if it is moved. Tobermory Community facilities eg gym have potential to make money. No opportunities in existing build. Community use in Tobermory. Tobermory We have to have a primary school in Tobermory, otherwise it will have a massive effect on the future of the local community. People choose to live here because they know what is here. Tobermory If children have to bus to a high school, they will miss out on after-school activities if they have to travel home on our transport infrastructure. Tobermory People might stop using the ELC if it's inconvenient, meaning children are missing out on socialisation. Tobermory I am in a professional role on island. When childcare is impacted for people who are the only one doing a key role, then services on island are impacted. Tobermory It's going to tip the family community on its head, because people have chosen to live in Tobermory because the school is here. Tobermory Space for good sports facilities. Tobermory Space and facilities for more practical and vocational subjects. Tobermory Gym and changing designed to allow community / out of hours use. Tobermory Existing site – impact on education provision during the build. Tobermory If you take the school away that will be the end of Tobermory – the heart and soul of it. Tobermory The 2-18 campus must stay in Tobermory if it's to include the primary school. The road is not fit for purpose to transport all children currently attending either Salen or Dervaig. The heart of the community in Tobermory is the school. Tobermory Safety of travel in winter and tourist season. Tobermory Re-use of existing building – for community use? Tobermory Badly need proper space for practical subjects. Page 410
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Appendix Three – Comments 83 Appendix Three – Comments Image captionImage caption Tobermory Outskirts of Tobermory may be better to facilitate delivery of supplies / materials to site – transport infrastructure impact on locals, day to day. Tobermory If the new campus was at Craignure, please keep in mind the large sports facility being built at Garmony. Tobermory Space to allow plenty of car parking spaces and good playground facilities. Tobermory Supportive of a central high school for whole island to access. Concerned about losing ELC and primary, especially transport for ELC. Existing island facilities must be considered when selecting site. Tobermory Would be equitable in centre of island. Tobermory Tobermory – some people don't drive – can't be remote from Tobermory. Tobermory Island roads take so much longer to take transport. It's a safety issue, not just a 'miles game'. Needs to be environmentally friendly. Tobermory Houses at Craignure – most won't be island family homes. Tobermory Central location wouldn't recruit more teachers as ferry too unreliable. Tobermory Staff won't travel to a central location – not affordable, too much impact on time. Tobermory If build community facilities in central location then community won't move there. Won't drive 20 miles for after school clubs. Tobermory There is no community in Craignure or Garmony. The high street in Tobermory is vibrant for kids. Tobermory Huge shortage of accommodation – if build hostel could build for revenue in summer. Tobermory Craignure / Central location not attractive place to stay. Tobermory Roads not fit for purpose to bus the numbers. Tobermory Community wants a split site. Younger generation want a central high school. Oldies want the status quo. Tobermory Good to have somewhere that is accessible to everyone. Tobermory Centralised high school is a good idea. ELC could be stand alone. Tobermory Access to vocational training facilities is important like in Oban – marine services is big on Mull. Tobermory Less keen for young kids to travel from Tobermory going south. Tobermory Three buses – Craignure, Dervaig and Ulva – bussing 73 secondary pupils now. If it's out of Tobermory, need to bus 150. Tobermory Community access to sports facilities / activities, designed to allow easier access out of hours without needing janitor to attend, and preserving security of rest of school. Tobermory Tennis, badminton courts, pickle ball. Indoor gym sized to enable wide use of sports, including tennis – bigger than current one. All year round sports. Tobermory Consider student accommodation in Tobermory. Tobermory Makes sense to locate school and community facilities where most of population live – supports active travel (walking, cycling). Page 411
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84 Appendix Three – Comments Image captionImage caption Tobermory Central location for the high school is my overwhelming preference, as it would bring the island together. However we would need ELC / primary provision in Tobermory too! Tobermory Outdoor pitches big enough for football. Tobermory Having the HIGH SCHOOL more centrally would be a good thing. Enables teachers to travel from the mainland (passenger day returns). Sports (rugby, swimming) nearby. Tobermory Community access to existing facilities (eg football on a Saturday) if the school moves will the pitches (common good land) remain? Tobermory Love the thought of a high school being central. Would not like for the Tobermory ELC and primary to move. Every town needs a primary and Tobermory is our largest town. And small children should not have to travel so far. Tobermory The sites on way into Tobermory would be perfect. Tobermory It would be so great to have a centralised secondary school to bring the island together. However, an ELC and primary school in Tobermory is important for the town. Split campus? Tobermory Would bus more pupils from Tobermory to central location rather than current. Tobermory Roads are fragile – need two-lane traffic. Tobermory is capital – highest population. Tobermory Would prefer ELC and primary to remain in Tobermory. A central school for high school, for access for all, is fine. Tobermory Preference for Tobermory location but no strong feelings. Doesn't make sense for primary / ELC relocating outwith Tobermory. Tobermory Need to keep WHOLE school – ELC, primary and secondary – in Tobermory. Tobermory Would like primary and ELC to stay in Tobermory. Ideal is high school central and primary in Tobermory. To make all those children travel seems a bit silly. Tobermory I didn't know that the primary school and ELC would be taken away from Tobermory as well. I'm all for the high school moving, because it's better for the Ross of Mull kids and more central for the island. But in terms of primary and ELC, that should stay. Because it's the biggest town on the island, it's ludicrous to think they would take the primary out of Tobermory. Tobermory There is a major impact on traffic here with buses and cars dropping off, both for primary and secondary. It's an accident waiting to happen. There has to be a primary and ELC in Tobermory, but a different site would help ease congestion. Tobermory Sufficient space on site for good sports facilities, good facilities for learning inside the school, and parking. All of these would also help to attract and retain good teachers. Tobermory Somewhere close to key worker accommodation to help attract teachers. Page 412
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Appendix Three – Comments 85 Appendix Three – Comments Image captionImage caption Tobermory Bussing 70-80 kids out of Tobermory… and for ELC parents who don't drive, how does that work? Our youngest gets migraines and doesn't travel well. Going on a bus every day would be awful for him. Tobermory If children get bullied, sending them on long bus journeys makes their days much longer and means they are exposed to potential bullying. Tobermory If the school is taken out of Tobermory, it would affect the service buses as demand would change. This would have an impact on people (not just school children) who want to use these subsidised bus services. Tobermory Salen – road link to Dervaig and Tobermory and the south – may be a good location. Located to suit the whole island. Tobermory Welcome a new school designed for neurodivergent pupils. Tobermory Want a play and sports area. And future growth area to build for a growing population – bigger than existing school. Tobermory Wrong way round – should have asked for community priorities before LEIP bid submitted. Tobermory Offset an inconvenient location to get a quality school. Tobermory Comparison to Lewis with kids (primary) can travel long distances but road structure is much better on Lewis. Tobermory Craignure would be good location. Getting staff from mainland good at Craignure. Tobermory Keen to have central location. Island equity – all kids mixing is important. Tobermory Accessibility – access road, congestion in mornings. Sloping site. Tobermory In or close to Tobermory – travel, especially for younger children. Travel for teachers. Roads single track, increased volume of traffic. Tobermory Losing ELC and primary from the capital and largest town on Mull is insane!! Tobermory Loss of primary and ELC in Tobermory is a huge, if not the main, issue. I'm supportive of a centralised high school only. Tobermory Parking. Tobermory I'm in support of a centralised HIGH school to benefit the whole island and bring together small communities. Tobermory should not lose its ELC and primary. Makes no sense to do so! Tobermory The sensible option is to build the new campus in Tobermory as this is the highest population of children. Outdoor and after school activities need to be upheld here. Tobermory Tobermory is the social hub therefore I feel they would miss out on opportunities. Tobermory It should remain where it is – in Tobermory. There are plenty of people who can offer 'storm addresses'. There are businesses that benefit from the school children at lunch time. If the school is lost, Tobermory will feel the impact. How many more pupils need the bus? Tobermory As a location, a high school should be placed in a spot where the largest amount of children will have access to it. Tobermory Space for a running track. Page 413
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86 Appendix Three – Comments Image captionImage caption Tobermory I think it's important for the site to be able to have good outside grounds for sports and social areas for the children, and safe and easy access for walking to. Tobermory Is it true that if the 2-18 campus is moved from Tobermory, our ELC children will not be transported by bus to the new campus? If so, that is dreadful. Tobermory I think it should be Tobermory based because travel time would / could be hard going on the youngsters. And Tobermory is the capital of Mull. Tobermory Tobermory – the bulk of population is in the north part of the island. Tobermory Keep it in Tobermory, please. Tobermory Should be in Tobermory. Would be obvious. Tobermory Somewhere we can drop off and pick up that is safe. Tobermory We simply cannot NOT have a primary / ELC in Tobermory, with the population. That is a non-starter. Can we use the current site and build into the pitches? Tobermory I feel it should be sited in Tobermory as it is the biggest place on the island. The town and school at present both benefit – socially, economically, and by community involvement. Tobermory Safer parking with more space for volume of cars. Tobermory I feel splitting high school from primary and ELC would make more sense, small children commuting on buses and extra cars on roads would not be sustainable. Tobermory I am aware there is funding for ASN department now – will this campus work delay this? Should be spent now? Tobermory Location – travel options for the youngest children in the school. Worried about not splitting! Tobermory Has Education Scotland approved this joint ELC / primary, learning outcomes? Tobermory Tobermory is the highest population point. If it isn't here, there will be no school at all in Tobermory. Particularly affected will be pre-school children – no transport will be provided if it is moved. Tobermory [...] Should we have to introduce two journeys to and from Craignure to drop our son off to an ELC in Craignure or further, this will be detrimental [...] and introduce a host of other childcare problems for us, and many others. Tobermory Not an environmentally friendly option to have all that traffic up and down every day. Tobermory Huge kick-back if move ELC. Don't move nursery. Tobermory Getting kids together in central location (primary and secondary) is optimum position. Tobermory [If central], sports can get a critical mass to perform and close to ferry. If you get a central site, could then get 25% more critical mass. Anywhere in Tobermory, won't get big enough site for playing pitches. Tobermory If you move the school, shops will lose trade. Tobermory Magic wand solution = central high school (improved road network) and primary and ELC to stay here. Tobermory Having no education provision in Tobermory is not acceptable – all need to travel. Page 414
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Appendix Three – Comments 87 Appendix Three – Comments Image captionImage caption Tobermory Potential for hostel in Tobermory – to give choice for Ross of Mull / Oban. Tobermory Increase in buses and cars to transport children and staff to new location – green impact. Tobermory Bulk of population is in Tobermory – makes sense for it to be here. Tobermory Ample parking for safe pick up and drop off. Lollypop person. Tobermory The building should be an investment. Quality building in Tobermory. Tobermory Site selection should include the economics of the site. Tobermory Travel options must be provided and available for 2-18 years. Safe and easy parking for drop off and pick up. PRIORITY TO ELC. Tobermory Better quality pitches and sports facilities. Tobermory If ELC and primary have to be part of it, then it have to be in or very near to Tobermory. Ideally with boarding facilities to enable Bunessan / Iona to have a choice. Tobermory Tobermory needs ELC and primary to be in the town. Tobermory Important to give the whole island(s) including Iona, Ulva, the option to go to high school without ferry and staying away from home. Neurodivergence a significant factor – access to home support not available when boarding. Tobermory Concern if outside Tobermory. Primary school would eventually close / amalgamate. Tobermory I agree that a central high school would be good for all the island, but not about the Tobermory primary kids being moved. Tobermory Won't be able to please everyone – can't be done. Tobermory Pipe band – parents and kids less likely to travel further afield. Access to wider out of school activities better in Tobermory. Tobermory We need a solution that suits the communities affected. If the current site is used for building there must be new playing fields / pitch provided before any building starts. Tobermory Too long a commute for ELC. Would impact on family life. Tobermory All for a central high school if Ross would use it. Tobermory Site of sufficient size to accommodate full size pitch with proper lines (hockey, football, tennis, etc). Tobermory ELC / school MUST be in Tobermory as majority live here! If not a CENTRAL location on Mull. Tobermory What happens to after school clubs. Need improved school hall and outdoor facilities. Tobermory Want the Ross of Mull to have the same opportunities as the larger towns and villages – equity of provision. Tobermory Consider a hostel in Tobermory – parents could collect children if unwell / not reliant on ferries. Tobermory Hostel in Tobermory for kids from Ross would be good. Page 415
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88 Appendix Three – Comments Image captionImage caption Tobermory Has to be in Tobermory. Services and hospital in centre. Tobermory Don't think moving the school elsewhere is a good idea. The school is the heart of the community. Impact on local shops if kids don't go out for lunch. Tobermory Bus kids around not an issue. Tobermory parents freaking out unnecessarily. Tobermory Would seem very strange not to have a school in major centre of population. Tobermory If you had to choose not to build the new school in Tobermory, what will be the effect on the town (largest settlement on the island) if all children are based away everyday, and do not get to spend the majority of their time where they live – how will they ever integrate in their community? The school and children are the heart of Tobermory. Tobermory Businesses will be impacted in Tobermory if the school and children are removed. Many of the high school children go down the street at lunch times and spend money in shops such as the Coop, bakery, Sarah's, Hook'd and the chip van, Pete's sweet shop. During the winter when there are no tourists, the school children provide regular revenue. This would no longer be the case if the school was moved to Tobermory. Tobermory If the school is moved to Garmony / Craignure and ALL pupils are bussed to school, what will happen if it snows or there is a gale and it is not safe for pupils to travel home? At the moment, in Tobermory pupils who do not live in Tobermory have a pre-arranged 'storm buddy'. This is someone they stay with if they are unable to get home. This could not happen in Craignure as there are less than 10 pupils who live there. What would happen? Tobermory If the school is built in the middle of the island for pupils (no more than 39) to attend, in reality this would allow for the provision of possibly two more teachers in the new school, than there are at the high school at the moment. In reality are pupils from the south of the island who are used to the huge variety of subjects (including practice areas) at Oban High school, going to be happy to stay on Mull with a much reduced subject choice? – This would not improve as number of teachers depends on number of pupils. Tobermory Will there be a guarantee that pupils from the south of the island will go to the school on Mull? As if not, it is a massive upheaval for the majority of pupils and staff in the north of the island, which would be for no reason if the pupils from the South decide to still go to Oban. Tobermory Saying that if the school is built in Craignure would mean that staff could stay on the mainland and travel each day is absolute nonsense. The reliancy of the ferries is non existent and could not be depended on. Tobermory Could a hostel be built in Tobermory, if the high school was kept here. Pupils from the south of the island could then choose to stay, but still be able to get home. This could be rented out in the holidays to make an income. Page 416
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Appendix Three – Comments 89 Appendix Three – Comments Image captionImage caption Tobermory After school clubs would be difficult to get home from if the school was in Craignure as parents would need to travel to pick children up – this might not be possible as parents work. Parents evenings, concerts, ceilidhs etc would also be likely to be poorly attended. Tobermory At the moment, 84 pupils attending this stay in Tobermory, and 73 are based here and home. If the school is sited outwith Tobermory, that would mean that Argyll and Bute Council are committing to bus 157 pupils to and from school everyday. (If adding primary + early learning childcare = 90 pupils to bus). How on earth will the money be found for this? What happens in the winter when the roads are icy? No pupils will get to school? How as a council can you justify bussing every pupil to a school rather than half the pupils? The roads are not fit for this number of busses on them twice a day. It would be an accident waiting to happen. Tobermory Is the Mull campus going to include all primary school if it is resited to Craignure? If not, but the high school is relocated to Craignure, where will Tobermory primary and early learning childcare be sited? Tobermory Firstly, I would like to say that I do not envy you with your position. Covering this topic will bring many passionate reasons on why people feel the new campus will need to be in their preferred location. I wish you all luck. I will start by saying that I feel 100 percent that this new campus MUST remain in Tobermory. I will list my following reasons and concerns of the campus was to be built in any other location on the island. These are in no order. To state the obvious Tobermory is the biggest town in the island. The new hospital recently built in Glasgow wasn’t built in Stirling because it was most central. The same when the high school in Oban was rebuilt a few years ago – it wasn’t erected in Connel. I would imagine the same common sense would need to be applied here. If the high school was removed from Tobermory what would be the economic and social impact on removing such an integral part of the community? Would I be correct to assume that an impact assessment would need to be carried out before an alternative site was committed to? As someone with two children currently attending the school, my wife and I would, more than likely leave the island, as this wasn’t why we decided to life on Mull. Have the council considered the de-population effect moving the campus out of Tobermory could have? Especially when the majority of pupils in the school have parents who work in and around the school catchment. If the campus was removed from Tobermory, the high school students would lose all independence that this allows. No other proposed site will allow them access to local shops, job opportunities or benefits of being in the biggest town on the island. Page 417
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90 Appendix Three – Comments Image captionImage caption (Cont’d) Surely, we are removing any sort of experience the children would get before heading off to further education off island ? The cost of busing children to and from Tobermory will do nothing but dwarf any other costs that would come with travel. Also, Mull is predominantly a tourist island – are we saying we are happy for our children's time away from school to be dedicated to sitting in buses due to the single track roads on the island? Also, with the majority of children needing to attend school by bus, this will only add to any CO2 emissions we are desperately trying to reduce. Is this something that the Scottish government are happy to be associated with, whilst at the same time desperately trying to reduce our harmful emissions? This is not even taking into account the additional travel you would need to take the primary/elc children to Salen if the catchment area was moved. The campus in Tobermory has recently struggled to attract the best teachers to the area. Moving the school to a more remote part of the island will only add to these struggles. Would this then lead to more teachers from Oban having to take on the strain of more pupils with online learning, or would they have to split their time between the two sites? What would happen in the winter if teachers couldn't get over to the island- would this create more cost as well as inconvenience to our children's learning. What consideration will be given to the school teachers who commute over from Kilchoan on a daily basis? Also, I'm led to believe that several families are exploring the option of sending their children over to the Tobermory high school from Ardnamurchan. This would need to be factored into any new campus outside of Tobermory. Currently all children out with Tobermory have to have a ‘buddy’ they can stay with if any unfortunate events were to occur – road closures, school building issues. I would hate to think how we would have to cover for all the children who would be attending from Tobermory. The biggest population group. I believe many parents in the south of Mull are insisting that children from the Ross be allowed an option of Garmony/Loch Don or continuing to be allowed to commute over to Oban. I feel this is a real slap in the face to the people of Tobermory – especially as this would mean we would of had to have moved our ELC and primary departments to new catchment areas to facilitate this. If Tobermory wasn’t the preferred site, then surely major investment would be needed in Salen and Dervaig to accommodate the additional pupils who would be attending from the Tobermory catchment area. This would only add more financial pressure on the council to undertake these upgrades, which defeats the point in building a new campus. Page 418
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Appendix Three – Comments 91 Appendix Three – Comments Image captionImage caption (Cont’d) The high school in Tobermory is a huge part of the fabric to the community within the town. If you were to remove this, you will be challenging any future successes – not just short to medium term, but long term also. Would the other proposed sites take so much benefit for this sacrifice, especially when no one of the other sites has a fraction of the infrastructure that helps to support the high school currently? I don’t see Garmony or Loch Don with planning applications to bring new infrastructure to their respected areas in the near future. If the campus was moved elsewhere would the council accommodate all the extra outlays that would be incurred to allow all pupils fair access to after school activities? Would extra buses/taxis be put on, an increase to timetables to allow pupils from out with the area to partake in these programmes. Or are we saying that we are happy for our rural school children to go without such things? One of the proposed sites in Tobermory is about to open an all year round out door weather training facility. The council could use this asset as possible sources of funding from the Scottish government. As far as I’m aware none of the other proposed sites offers an opportunity for our door learning as exciting as this. Not to mention the benefits that come from being part of such a prosperous town like Tobermory. Are the current staff happy to move campus, and with Tobermory offering the only real housing to staff, are they happy to take on the extra charges their potential new commute will bring( not including extra C02 emissions)? I know the Scottish government are currently promoting ‘20 minute neighbour hoods’. If the site was removed from Tobermory, you would be removing 90 percent of your pupils from being part of this programme. Would this then have a negative effect on any potential funding? I could keep listing for days reasons why I feel that the new campus needs to be in Tobermory. I’m having to stop myself getting excited by it, as I feel the benefits it could bring to the whole island could surpass anything our children have ever had in their learning journey. If you would like to discuss anything any further please do not hesitate to contact me. Good luck with the process. Page 419
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92 Appendix Three – Comments Image captionImage caption Tobermory Replacing the school on its current location would have the least environmental impact as it would require no new land take. It would also maintain the current social draw of Tobermory as a township and allow local residents to have easy access to facilities. Additionally school pupils would retain easy access to the main street and the associated amenities. Moving the school elsewhere would be change to the status quo and would result in negative impacts which I am not convinced can be balanced by any benefits given that the plans are for a like for like replacement rather than expansion. Tobermory Pre-school and primary children in Tobermory must be able to attend school in the village in which they live, so that they can walk to school, parents can drop them off and collect them without travelling long distances. Unfortunately this has to trump all the potential benefits of locating a new school more centrally (which would likely benefit secondary pupils). It is really unfortunate that a consultation about location wasn't made *before* the bid was submitted as maybe it would have then been possible to unpick the needs of primary and secondary age students. What consideration has been paid to the impact of redrawing catchment areas from the point of view of the physical capacity of existing schools – presumably this would mean Dervaig or Salen? Transport times need to be taken into consideration: although young children do travel to Gaelic medium, this is a decision their parents have made. Other parents have decided that they *don't* want to send their children to a school which will require them to travel by bus. Decisions about education have a critical impact on the whole community. Young families are our lifeblood, and if Tobermory primary school is closed, the community will become a hollowed-out retirement village, full of AirBnBs and nothing else. This is not a positive result for promoting island communities. Tobermory Primary school in Tobermory must stay in Tobermory! Tobermory I believe it is necessary to provide an ELC and primary school in Tobermory no matter where the new campus for the high school is located. The number of cars on the (inadequate) roads between Tobermory and anywhere else would cause problems, particularly as children who are not old enough to be on a bus would need to be driven by a parent. It does seem ridiculous that an ELC and primary would be removed completely from the largest settlement on Mull. Tobermory There absolutely must be a long term plan for a primary school and ELC in Tobermory. The high school should be central on the island to allow children from all areas to access it but there must be a primary and ELC in Tobermory. It is quite ridiculous to consider a high school anywhere other than Craignure – it sounds like you have already decided it will be in Tobermory but this is not viable for the rest of the island's children.. Page 420
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Appendix Three – Comments 93 Appendix Three – Comments Image captionImage caption Tobermory The demographics of Mull are what they are, and Tobermory has always had the largest population of people, and children. My concerns are that there would be a huge move for the majority of kids if the campus is not built in Tobermory. Similarly the infrastructure around the campus in Tobermory is vast, shops, local businesses, so many more opportunities for our children to engage with the wider community and forge partnerships ready for leaving school. We already struggle as an island with the road conditions especially in winter, and to have the largest of the islands population going up and down the roads to drop children off is going to be difficult. I would be so supportive of the high school being somewhere else, but not the Primary or ELC. Tobermory I’m not supporting a new campus to cover the 3-18 of Tobermory high school. I feel very strongly about this as the upheaval doesn’t make sense. To shut down the whole school in Tobermory would be a disaster in my eyes. Tobermory As with other schools, the facilities are used by the community, the only sensible site would be in Tobermory for the catchment area being the most densely populated. As for transporting young children that distance from the Ross and Tobermory is not viable. Tobermory A new campus if built outside of Tobermory will take the heart out of the local community. The majority of pupils live in the north of the island and especially around Tobermory the largest town in Mull. The transportation of children to another part of the island opens to its own problems. How are the pupils age two years to 18 to be transported elsewhere in the island? Not only would this add pressure on the roads (which are busy at the best of times) there is also the cost involved – buses, fuel, drivers and escorts for young and vulnerable children. [...] I think to remove the high school from Tobermory would be a disaster to the health and well being of pupils as well as the financial strain on already depleting budgets. It would be like building Oban High School in Taynuilt and transporting the majority of pupils who live in Oban out of town. People who live in the south of the island, if they have done their homework, know that pupils from there go to Oban High. Pupils I’ve have spoken to are happy to go there. Maybe, as was suggested years ago, a hostel in Tobermory to support pupils that want to stay on the island. Tobermory Moving a school from the mostly populated area of Mull is ridiculous. If you were a business which was successful and people came from far and wide, would you move it? No? So why move a school that upsets the masses, to please the few? Unfortunately people decided to move out in the sticks and should understand that that's the life they have chosen to have to make some sacrifices, people live in Tobermory to make it easier on the whole family and school life. People who decide to live far away, that's their choice. Page 421
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94 Appendix Three – Comments Image captionImage caption Tobermory An island central high school would be a benefit to the community as a whole but the potential loss of an ELC and Primary School in Tobermory would force people out of the community and away. Tobermory The proposal to have the new school based in Craignure and keep the primary schools open across the island apart from Tobermory, appears to be a strategy scupper the option of a new school campus on Mull. How is it practical or economically and environmentally justifiable to expect the Tobermory pre school and primary aged children to commute these distances every day? If the plan is to keep other primary schools across Mull and Iona open then there is little logic or reason to not keep the primary and pre-school in Tobermory. Tobermory I think it would be crazy to move away from Tobermory, which is by far the largest village on the island and say for instance Craignure was chosen then 95% of the population of children would have to travel each day and those in villages like Salen and Dervaig would still have the same distance to travel as they currently do, so the only ones to benefit would be a small amount in Craignure and the Ross of Mull, which may still wish to put their children to Oban rather than do a 60 mile round trip every day on roads unfit for purpose, especially during the winter months where this could end up in missed days of education for the vast majority of the island. Tobermory Having a campus built in or close to Tobermory is the only sensible option with scope of a hostel further down the line? Losing ELC and primary schools in Tobermory seems ridiculous when Tobermory is the most populated. Tobermory losing ELC and Primary will have a huge negative impact on family life for most families in Tobermory. If the school was further south than Salen the children would be passing a school closer to home to travel to another? Ideally a centralised high school would be the best option but Tobermory to keep ELC and Primary but if that means losing the funding I don’t think it’s a risk that should be taken. We need to put first the children who currently attend Tobermory High School and are proud to be pupils here. We don’t want our school to close and have to wait longer for our new one. Tobermory I have two small children attending Tobermory ELC and Primary School and I think the funding should go on building a better school on the original school site and set up a temporary school during the building work. I strongly disagree with the school being moved out of Tobermory. I think this will have a negative impact many families. Tobermory Surely the pre school and primary kids have the right to go to school in Tobermory and then have a high school more central on the island so kids from the Ross of Mull and outlying areas aren't forced to go to Oban and stay away from home? The site in Tobermory could be used for adult education and sports facilities such as a much needed gym as well we pre and primary school. Page 422
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Appendix Three – Comments 95 Appendix Three – Comments Image captionImage caption Tobermory The ideal scenario would be a centralised Mull high school campus, but with early years (ELC) and Primary provision provided in Tobermory. It seems incredulous that the most populated settlement on the island would lose primary and early years provision if the new campus was sited elsewhere. If early years and primary provision cannot be provided in Tobermory, then I would support the new campus being sited in Tobermory, to allow younger children access to education without a lengthy bus journey. I would hope that consideration also be given to those who live in Kilchoan and commute to high school, siting the high school in Craignure would restrict their access to high school education. If the new campus was to be built in Tobermory, I don't think development on the current site is practical. Access is terrible and I would question the feasibility of a large scale building project given the road infrastructure around the current site. Also, if the new site replaces the old, how would the pupils access their education? The numbers surely couldn't be sustained by other schools on the island. Tobermory Hello, me my wife and two kids [...] live in Tobermory. [...] It is a great set up and no hassle for getting them to and from school. To send them one hour each way every day seems crazy. Also will have a impact on [us due to work, as we] would not always be available to collect them if needed. I understand the need for a new central school but I think to close primary and ELC is not a good option. If anything could they not invest money in the Tobermory campus to make it better. I hope they come up with a fair solution for everyone. Tobermory I think a secondary school should be more central in the island so that the kids from the Ross don't have to go to Oban every week. However losing a primary school in Tobermory would come at a huge cost to the community. The secondary school needs to be central. Tobermory Tobermory children should not have to travel out of the village for their primary education. Tobermory I would like I see a high school that is accessible for all children who live on the island from the both the North and the Ross of Mull. Not only will help the decision for families to move and stay in the Ross of Mull but it will also help create a better relationship with the people of the island as at present there is a clear divide. It would make sense to have the school in a central location, like Craignure where it is closer to the ferry for school trips, the hospital for any emergencies as well as facilities such as the the pool and the sports facilities at Garmony. Page 423
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96 Appendix Three – Comments Image captionImage caption Tobermory A Craignure or more centrally based SECONDARY school would make perfect sense. It would mean families in the south and south West of the island are not split up, with children boarding in Oban all week. For all children to attend secondary school on the island would be a fundamental step forwards and is essential for communities on the Ross of Mull to thrive, and not suffer local depopulation, in my opinion. However, it does not seem to make sense to move Tobermory primary to Craignure or a more central location too. While funding was granted for one 2-18 school, I understand it has been established TWO schools, one primary in Tobermory, and one secondary at a location to be agreed, is possible if funds can be raised. This has to be the answer in my opinion. Another secondary in Tobermory achieves no progress for the island as a whole. But making primary children travel from Tobermory to Salen, Dervaig or further daily seems ridiculous too. A more joined up approach is to replace the primary only in Tobermory, and build a centrally located secondary to benefit the island as a whole more centrally. Tobermory ALL primary schools on Mull should be closed and housed in one 2-18 facility in Craignure. The waste of money having building housing small number of children is ridiculous. There should be one head of the school [...]. The school needs to offer many more vocational courses. We need to educate for jobs we need in the future. There are so many more options other than Highers. Not every child wants/ needs to go to University. The school needs to be more inclusive. Tobermory High School has serious issues when it comes to diversity and inclusion. The children of Mull deserve a much better, cohesive education. The range of standards across the primary schools is shocking. We need a much higher standard of teacher, better SEND/SENCO. All schools are severely lacking in opportunities. We MUST keep our Gaelic education. This is crucial to the culture of the island. Tobermory Please keep a primary school in Tobermory. Tobermory It's ok the idea of a central location but when 75% of population live in the north of the island predominantly in and around Tobermory it should be in Tobermory 100% even if this means upgrading the existing campus rather than a new one. Bussing 75% of the children down to craignure is ridiculous and the roads aren't upto it. If you want one more accessible to the Ross build a smaller one in Craignure or further South and move teachers around. Just remember new shiny schools aren't always the best schools it's the teachers inside them that do. Personally I'd rather nothing change to the existing campus than have a new one down at Craignure. Small schools will close regardless of what they/you say, how can you have Lochdon when you've got a brand new school a couple of miles up the road and the same for others. Page 424
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Appendix Three – Comments 97 Appendix Three – Comments Image captionImage caption Tobermory Although I think a more central high school would be a great benefit to the island I am totally against the whole 2-18 campus being situated outside of Tobermory. I have several concerns. Number one, the huge financial and environmental impact of transport. Number two, having an ELC and Primary unit out with the catchment area of Tobermory… what if something happens and I need to collect my child? Number three, does a like for like just mean 2-18? Or does it mean as basic as the current campus is? Will the new campus be an 'upgraded' version with better facilities? Number four, I am hugely concerned that if a new campus is built on a brand new site then what will happen to the old buildings? If they aren’t fit for purpose will they be knocked down and the land repurposed or will they just be left to become dangerous and decrepit. Number five, I’m concerned that there is too much of a 'battle' going on and as a result of that decisions will be delayed and ultimately we may lose the money? Number six, the 2-18 campus is such a unique and wonderful setting that it would be a real shame to lose that but I feel strongly that there needs to be a primary and ELC unit in Tobermory. Number seven, if the campus was to be built on the current site where would kids get decanted to? Tobermory I am a parent of [young children] in Tobermory. They both attend preschool and primary school and I want the school to stay in Tobermory. Sending young children from Tobermory to Craignure is really unfair to them. Such a long commute for little people to have to endure five days a week on top of an already long school day. Also for parents to drive everyday to leave them to school and have to get back to Tobermory for work at 9am. I think moving the school away from Tobermory, the most populated town on the island will have a negative impact on our kids, the parents and the town of Tobermory. Making such a decision to accommodate a minority of teenagers on the south of the island isn't really fair. People who live in rural areas of Mull made that choice knowing that there was no high school facilities nearby for them. I moved to Tobermory for the school and how easy it is for my kids to access. Another issue with moving it away from Tobermory is the main road. It is already below average and insufficient for the traffic at the minute. Can it handle more buses and cars during peak travel times? I heard Salen and Dervaig schools will stay open. So if the school is moved to Craignure my kids will have to travel another 15 minutes past Salen primary school to get to Craignure. That doesn't really seem fair. Have we taken into consideration the teachers. Do they want yo have to commute away from Tobermory each day? Will we lose teachers because of this? Page 425
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98 Appendix Three – Comments Image captionImage caption Tobermory As my child is currently at Tobermory High School we are concerned about the impact any upheaval will make in them and others. If the current school is 'made good' or the new school is built on school grounds and students are moved into mobiles the current students education and mental wellbeing and health will largely be affected which isn't acceptable or fair to them. Tobermory has the largest population of children on the island which doesn't make sense to remove a school from Tobermory altogether. The roads will be impacted if there are school buses transporting children out of Tobermory more so than now. A new school has to allow for population growth. With all the new houses being built don't make a new school be too small in a few years time, build for the future not just the now. Tobermory As the main centre of population the school should be sited in or near Tobermory. This is important for sport and other after school activities. Tobermory How is the land to be procured? Will Argyll and Bute have authority for compulsory purchasing? There must be space for sporting activities and parking for staff and buses. If the council agrees to split the finance for a primary school and early learning centre to be built in Tobermory, this therefore will reduce the square metres for a 'like for like' campus size. It is inconceivable for children as young as two to be transported for a potential 42 mile round trip five days a week if the campus is not in Tobermory. If the campus is removed from Tobermory, the condition of the roads will pose a real hazard as the increased number of heavy buses needed to transport 100 + children on their already crumbling condition. On the whole increased transport will impact heavily on the environment, not just from buses but parents driving children. Tobermory, the largest most densely populated area on the island will lose its heart if all these children are transported out of the town everyday. The facilities the community gain by the schools presence in town will be lost to the communities of the far north of the island. This is the same argument that small Argyll primary schools have used to remain open when Argyll and Bute council attempted to close them. Tobermory not having at least a primary department creates a dangerous precedent for every primary school in Argyll which is in a place with a population of under 1,500 people. Communication has to be improved, as currently unless you use Facebook people know nothing about what is happening. It would also be useful to see all evidence that is being used for decision making. Page 426
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Appendix Three – Comments 99 Appendix Three – Comments Image captionImage caption Tobermory We strongly support the development of a new campus for Mull and the improvement of facilities to future proof the campus.The main consideration should be the impact that a commute to school would have on the children and how many children would be affected by a change in campus location. With the main school already in tobermory, many families have choosen to live and work here so that our children can easily get to school without having to have a commute everyday. Placing the campus location outside of Tobermory would require better infrastructure between Tobermory and any new location to account for extra traffic leaving from Tobermory at the start/end of school. Given many have chosen to be within walking distance of the school for financial and environmental reasons, and the number of children that would need to commute from Tobermory to any other campus location on the island, funding and environmental transport options would need to be made available. We would support a new campus within or just outside of Tobermory. Ulva The 2-18 and like for like campus is the biggest flaw – you need to split it so the primary remains in Tobermory. It doesn't suit the communities, it suits your affordability. You cannot only base it on that. Ulva The 2-18 issue really makes it difficult to decide, and my opinion would probably change. The implications of moving it ALL from Tobermory mean it should probably stay there. But that's not the ideal outcome overall. Ulva We understand that you'll never keep everyone happy. Ulva "One site" effectively predicates it HAVING to stay in Tobermory. Which means you're not addressing the issues of Iona / Ross children having choice about their education. Ulva It's got to provide the best for the most people. Ulva The new houses at Craignure will shift the population / demographics which need to be factored in. Ulva What are the minimum age limits for bussing children, and what are the maximum distances? Travel times need to be a serious consideration Ulva We're talking about sites but we need to go back a step. We understood the driver for this was to bring children and communities together, which is being conflated with the driver of a poor condition school. Ulva Shouldn't have very young children travelling a long way out of Tobermory for primary school. Ulva The repercussions and fallout of moving 2-18 from Tobermory would be massive. It will be hugely divisive and damaging. Ulva Are there any other sources of funding available? Page 427
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100 Appendix Three – Comments Image captionImage caption Ulva From the island's point of view, central site would be much more sensible and equitable. But it does not do good for Tobermory to be left without early learning and childcare and primary. Ulva Removing it from Tobermory would have an economic impact on the local shops / café's at lunch time. Ulva It's not really a community if there's no school. It should be the heart of the community. As many people as possible should be able to access a school. Ulva Children should have the freedom to CHOOSE to board or stay at home. Being away does not suit every personality but now they have very little opinion. Ulva Sending children away to school really inhibits the developments of communities and social cohesion. Ulva Kids in Tobermory use the local businesses – they may lose out if the high school moves, but businesses somewhere else would gain. Ulva People on Mull choose where to live based on where the schools are. This is important to them. Ulva If you split the campus it will cost more, but putting it somewhere else like Craignure would increase the social and economic opportunities there. The impact on the location and the wider island will be felt for generations to come. Ulva The funding mechanism is so restrictive! We should be questioning / complaining at Government level. Like for like will NOT work for Mull. Ulva Plenty of space for sports, library etc. Ulva High school children are perfectly able / used to travelling a fair way to school. Ulva Somewhere nearby shops and cafés so the children can eat at lunch – the cafeteria isn't really big enough to feed everyone. Ulva Could you have a facility for boarding in Tobermory for Ross children who want to at least stay on the island? Flexibility to come home occasionally if they want. Ulva Is there any possibility of rebuilding on site – is that one of the locations being considered? Ulva We live here knowing they will have to travel for high school, so Tobermory or Craignure would be roughly equal distance. But for the island wide context, you couldn't leave Tobermory without a primary and early learning and childcare. If it HAS to be 2-18, Tobermory is the only real option. But the ideal solution would be primary / early learning and childcare in Tobermory and high somewhere central. Ulva Split campus? Ulva Impact study? Cumulative travel time study? Back of envelope calc gives Salen as most efficient location in terms of minimum total student travel time (inc. new Craignure development). Ulva Curriculum development, a campus and curriculum that supports both academic and vocational learning like environmental sciences, agriculture, trades etc. Page 428
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Appendix Three – Comments 101 Appendix Three – Comments Image captionImage caption Ulva Ensuring measures to ensure small class sizes, and supporting personalised learning. Ulva Teacher support, i.e. onsite accommodation? Ulva Supporting extracurricular opportunities, arts, sports, community services. Ulva Opportunities for outdoor education. Ulva Access to modern learning resources. Ulva Sustainable campus design and function, ie highly insulated fabric-first approach, with more passive services (eg natural vent and light etc). Ulva Partnerships with local businesses and organisations, providing work experience or apprenticeships. Ulva Key points: a campus that supports Mull-oriented skills, flexible learning, good access / transport for all, personalised learning support / inclusivity, cultural heritage of Mull and Gaelic. Not stated Sorry I did not manage to attend the recent consultations. [...] I think it would be much fairer for children of the Islands involved if the Campus were centrally located. Craignure has increased in status in recent years and many new houses are planned for the area. It would be great to see the children from the Ross of Mull etc able to attend school on Mull if that is indeed what they and their parents want. I would have been very unhappy to send my children away for a week to school. I also think it’s so unfair that the terms of the funding include a joint campus. Surely it’s not impossible to create the new preschool and primary locations in Tobermory on (part of) the existing site ? This would allow for less travelling by primary children. It would be good to see facts and figures on the total amount of miles travelling involved if the secondary school was placed in say Craignure or Salen. Perhaps an Island based hostel could be provided for those travelling furthest, to offset the cost of this in Oban. Parents could then more easily see their children midweek. I wanted to send these thoughts as my children travelled daily around 1 hr 45 mins each way on transport which was indirect [...] and extra curricular activities were not always easy for them, or me. Not stated A primary school should remain in Tobermory, the main centre of population. Page 429
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102 Appendix Three – Comments Image captionImage caption Not stated I attended the Mull Campus consultation event in Tobermory yesterday and said I would email in my feedback (too much for a post it note!). My thoughts are: - The easiest and most feasible option is to replace the whole campus, like for like, on a new site in Tobermory, however this discounts the potential opportunity to bring the island together with a more central location - The option to split the campus, with a pre-school and primary in Tobermory, and a secondary with the option to be elsewhere, MUST be considered; the feedback from Council staff yesterday was ambiguous: it is not possible under the current funding to split the sites, however if Councillors agreed and more funding were available then it would be possible – that needs to be clarified and communicated - For me, the benefits of a central high school would outweigh the negatives: the opportunities for Ross of Mull pupils to come home every night, for children from across the island to mix and socialise, to attract more resources with more pupils, potentially offering more subjects and more class teachers; with 90 houses to be built in Craignure there would be more pupils living locally and more housing options for new teachers; overall I think a central high school would significantly improve the sustainability of our island in the long-term - I don't see how removing the pre-school and primary from Tobermory would work and I imagine the lobbying against such a proposal would be very significant and high profile; there would be justifiable concerns regarding the upheaval of moving the school, and long travel times for young children - My suggestion was that the primary and pre-school should remain in situ until a new facility is built in Tobermory, meanwhile the high school is moved to a more central location. The current site should then be sold to contribute to the funding costs, i.e. a phased development - I would not be in favour of an on-site rebuild as the disruption to school life would be significant; my son has already had to live through such a disruption and decant through pre-school and primary at Salen and it would not be fair for him and his contemporaries to live through that again My questions are: - What weighting does the community consultation feedback have in the site selection? eg if the top three most suitable sites are in Craignure but the community feedback is overwhelmingly in favour of a 2-18 campus in Tobermory – what takes precedence? - Can you please clarify – publicly – whether it is possible to split the campus or not? I have heard conflicting answers and people need to make informed decisions. Page 430
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Appendix Three – Comments 103 Appendix Three – Comments Image captionImage caption (Cont’d) - If the school needs to be replaced ‘like for like’ does that allow for an increased population, a bigger gym hall, number of classrooms etc? - The opportunity for partner organisations to secure funding for aspects of the project was discussed last night - is that currently being explored? Are such organisations (e.g. MICT) being actively approached via the stakeholder meetings, or separately? I appreciate the amount of working being put into this project and the opportunity for community feedback. It is essential we have a new, fit for purpose school on Mull, as part of an integrated approach to attract and retain working age people and ensure the future sustainability of our island. My greatest concern is how the Council will afford to ensure this happens, and deliver a school that is supported by the majority, against a very difficult financial background of spiralling build costs - and issues such as island uplift costs, SSE connection charges etc need to be taken back to the Scottish Government. Not stated Removing all education facilities from Tobermory will destroy what is left of the town. The road infrastructure to transport at least every child over 12 to school is not there. Road between Tobermory and Salen is still not fit for purpose. If site chosen outwith Tobermory, how do you transport a two year old for half day sessions to nursery? What is the cost of transportation? Misguided comments on range of subjects taught when the total number of pupils will not be enough to hire more teachers than are currently employed. If Tobermory loses its primary, Argyll and Bute will close all the rest, you cannot have every child from the largest conurbation being made to go elsewhere for their education and justify maintaining schools with single digit numbers. That is not cost effective for such an extremely cash strapped council who currently cannot even afford to fix the death trap pier in Craignure. The funders saying the money can be split for two campuses and Tobermory getting a brand new primary school, which does not currently exist, is not the same as Argyll and Bute council committing to this before a decision is made on any sites. Iona children will never be in school in the wintertime as the ferry often does not sail due to weather and tidal conditions. Rumours are that they will not be part of this. This feeds into the lack of clear and definite information that is being passed on. Unless you use Facebook there is no information, meaning rumours are all anyone is privy to. What is needed is a mail shot to every household with pertinent information on exactly what is happening with no ifs or maybes and actual decision making strategies. There are no figures anywhere that I can find of numbers of children at all the schools across Mull and Iona which would help everyone understand what having a Mull Campus would actually entail. There has to be honesty that if the Iona kids aren't going to be included, the only change is that the kids who go to Bunessan School are the only ones who are going to be affected. Page 431
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104 Appendix Three – Comments Image captionImage caption Other [Our journey] is already a significant travel time so we are keen to see the site is as close as possible to Tobermory. Other Surely there is rural funding and rural impact assessments that can be used to (in my view) achieve the most beneficial outcome for the whole of Mull, ie keep a Primary School and ELC in Tobermory and build a new High School more central so all of Mull’s (and Iona’s) children can access it. [I have moved off the island as family time was very limited due to school and work commitments.] The sad likelihood now is that probably none of my children will settle and subsequently have families in the Ross of Mull (or anywhere on Mull for that matter) and therefore unlikely that we will move back because of this. There are also numerous other families that have done the same because of the High School situation, or make the decision not to return to the Ross for the same reasons. That does not bode well for Mull’s population (especially the Ross) as a whole to lose young families. It won’t affect me now, sadly, but think long and hard before you lose the opportunity for an island wide High School and all the benefits that that would bring to the whole island. I personally think it is a great opportunity for the island to have an all island inclusive 'Isle of Mull High School'. It is long overdue, in my opinion, from when I went to stay in the Hostel/Oban High School in the early 80s. Also at this time [other family members] left the Ross of Mull because of this issue – subsequently none of them returned to live on Mull with their families. I also think the positives would far outweigh the negatives for communities throughout Mull and possibly be a catalyst for progress and pressure in much needed road infrastructure improvements/ upgrades Island wide (I’m acknowledging comments on travel times etc). It would be easier/more inclusive, I would think, for more Mull Sports clubs, School Pipe band (personal interest) music groups, all sorts of educational activities to engage and attend things in Oban and further afield but equally so for all those things mentioned to come over on the ferry to Mull. I 100% agree that Tobermory should not be without a Primary School and ELC (and I hope that this is not effectively being used as a tool in order to achieve an already pre desired outcome) I also completely understand residents who would prefer the High School to remain in Tobermory but I think it would be short sighted for Mull as a whole island not to have a more accessible facility for all the children of Mull to have an 'Isle of Mull High School'. Other I think it should allow all children to attend whether they live Iona, Bunessan or Tobermory. Page 432
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Appendix 3 ARGYLL AND BUTE COUNCIL EDUCATION SERVICE BRIEFING NOTE Educational Benefits of 2-18 Campus Model on Mull Introduction A key purpose of the joint campus 2-18 is to promote the development in children and young people in Argyll and Bute of the attributes, skills and knowledge they require to be successful learners, confident individuals, responsible citizens and effective contributors. This integrated approach facilitates continuity, community and collaboration bringing a range of educational benefits. The Education Service considers that the provision of a new joint school campus will make the most modern of standards and resources available to pupils to support the delivery of Curriculum for Excellence. It believes that the new building will be a significant, more efficient improvement on the current establishment, these improvements include: better-quality accommodation, more attractive learning environment, access to modern technology and improved disability access. The Education Service also believes that the new building will provide excellent facilities for use outwith school hours that could be used to help meet the learning, leisure and social needs of the children and young people and the community. The key principles underpinning the delivering of the learning continuum 2-18 concept include: ▪ Providing a Curriculum for Excellence where all children and young people are happy, safe and achieving their potential. ▪ Continuing to raise standards of attainment for all learners. ▪ Promoting, facilitating, recognising and accrediting broader achievement ▪ Ensuring that learning is planned effectively and that children and young people progress seamlessly from age 2 to 18. ▪ Maximising the achievement of our most vulnerable learners ensuring that issues of equality and diversity are addressed. ▪ Commitment to the protection, care and welfare of children and young people, nurturing their emotional and social development. ▪ Establishing a culture of enterprise and developing citizenship and the young workforce. ▪ Engaging, planning and consulting at all levels within the learning community including children, young people and parents. ▪ Developing a strong sense of community. ▪ Integrating the planning and resourcing of services. ▪ Securing effective partnership working across children’s services. ▪ Promoting shared professional development to achieve shared priorities. ▪ Building capacity for leadership at all levels. ▪ Promoting effective leadership which is creative, aspirational and unstinting in the pursuit of quality. Academic Benefits Argyll and Bute Council Comhairle Earra Ghàidheal agus Bhòid Executive Director: Douglas Hendry Page 435
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2 Some of the academic benefits of a 2-18 campus model include a consistent approach to children’s education for the entire length of their time within education, an environment where pastoral support and processes are embedded and maintained. Following a pupil’s learning journey from 2 years old to 18 allows the school to positively support a child with staff knowing them well as learners and as individuals. Early intervention and tracking are enhanced by the all-through establishment and transition to all sectors within the campus model of the school is an established progressive experience. In addition to this teachers can create a unified curriculum that progresses smoothly across all stages of development, avoiding duplication of content and reinforcing key skills year after year. There are many benefits to 2-18 education for primary children. One of the main advantages is that because some teachers work across both the primary and secondary elements, younger children get access to the sort of specialist teaching that they don’t usually get in primary schools. A campus model allows primary classes to have a class teacher who delivers their core subjects, while subjects like PE, Music, Art, Science and Languages can be taught by teachers who specialise in those areas. The primary aged children also benefit from using secondary school facilities which primary schools rarely have, such as Sports Centres, Music rooms, Science Laboratories, Craft and Design workshops and Dance / Drama studios. There is also a huge potential for the 2-18 campus to facilitate the sharing of staffing and resources for specific subject areas to enhance the delivery of the curriculum. Equally, there are benefits for secondary aged young people. Among these are curriculum advantages where a young person can complete a Foundation Apprenticeship within the campus site, as they could access practical experience required for their course onsite within the nursery sector of the establishment. In addition to this the campus model allows opportunities for aspiring teachers to gain invaluable experience within the primary classrooms with teaching staff that they know well and have existing relationships with. Further benefits include the promotion and facilitation of intergenerational learning and greater opportunities for interdisciplinary projects that encourage younger and older students to work together. This collaboration enriches learning by providing pupils with different perspectives and builds a deeper understanding of the curriculum. From the perspective of sharing resources there is benefit for the campus structure which allows children with mild to moderate additional support needs from the primary and the secondary to access specialist facilities like life skills rooms and high and low sensory rooms when required whilst still integrating with the mainstream curriculum where appropriate. In addition to this, the specialist Learning Support teachers and Additional Support Needs Assistants can share their expertise with all staff across the campus more easily which supports all children across the campus with additional support needs. The Leadership and Mentoring Benefits There are a number of strong examples of the leadership and mentoring benefits provided by the campus model, which are already evident in our 2-18 campuses throughout Argyll and Bute. These include Secondary pupils given opportunities to read with children, provide peer mentoring and run clubs and activities, and the younger children love being nurtured by them and learning from them. Secondary pupils benefit from being involved with the younger children as well. They are able to use and enhance their skills when they are given these opportunities to support the primary children and help with their clubs. This gives them time to develop real life leadership skills, allows them to develop communication, empathy and responsibility. By taking on mentoring or leadership roles, older pupils develop essential soft Page 436
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3 skills such as teamwork, conflict resolution and problem solving. These experiences can increase their self-confidence and give them experiences to incorporate into their applications for work, college and universities. The structured inclusive community encourages pupils to develop a sense of belonging and pride in their campus. This often leads to younger pupils aspiring to become mentors, reinforcing the culture of leadership and contribution that benefits the entire school community. Transition benefits Within the campus model there are improved transitions for children and young people at key points in their learning journey. There are a number of key transitions that each child makes throughout the course of their school journey. The school journey is made up of a series of important transitions: from Nursery to P1 class; from P7 to S1; and then from S3 into S4, to the senior phase, when they complete qualifications. From the age of 2-3 years old when our learners start to attend nursery right through to S6, each step and new phase is really significant for each child. It is important to ensure transitions are managed carefully, so that they can be made as smoothly as possible. These transitions mark out significant social and intellectual landmarks in a child’s education and are made much easier if they are negotiated within the same school, on the same familiar site. One of the advantages for secondary pupils is that they don’t have to go through such a challenging period of physical transition at P7, they go into secondary school with an established group of friends, and are familiar with the environment and many of the teachers. They’re also accustomed to being taught by a number of different teachers, so there’s less of a jump from having one primary school teacher to having a different person for every subject. From the educator’s perspective, academic tracking and monitoring, departmental curriculum and syllabus planning and pastoral care all bridge the gap from nursery to primary and primary to secondary, ensuring in this model that each child receives close, well-informed care and consideration. Pastoral care is a priority for all schools, particularly for children with special educational needs. One of the advantages of a campus model for pastoral support is that when a child is identified at an early age with a specific educational need, by the time they progress to the secondary sector they and their needs are well known and understood as an individual, and that knowledge can be passed on easily to their new teachers. Parents benefit from engaging with a single campus throughout their child’s entire school experience, as it allows for closer relationships with staff and better understanding of their child’s progression. This consistency supports a stronger partnership between parents and schools staff, strengthening the pupils’ support networks. Sharing Good Practice benefits For staff, there are opportunities to share best practice, participate in cross sector lesson observations and to create opportunities to collaborate and learn from one another. This presents openings for curricula to be discussed and reviewed with skills-based learning considered, in addition to knowledge and content. The implementation of a unified assessment process across all learning stages throughout primary and secondary would enhance the quality of data collected, offering improved tracking and monitoring for all children and young Page 437
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4 people. This creates a shared educational ethos that supports children from age 2 to 18 and provides consistently high expectations for all. With teachers from all stages working closely together, there is a unified approach to classroom climate and educational expectations. Consistency in standards and boundaries helps pupils understand what is expected of them at all times, which reinforces a positive learning environment. The 2-18 campus model of education also provides greater opportunities for staff development, encouraging different sectors to work together through collaboration to raise standards, allowing easier and wider continuing professional development opportunities such as cooperative teaching and job shadowing. If there was a separate site for the primary as a stand-alone site this would mean the management structure would be different than for the joint campus. For the stand alone primary the Head Teacher post would have a teaching commitment and the Principal teacher would also have a teaching commitment, which would impact on the time they would have available for nurturing leadership within the staff in the school. Conclusion The development of a single site new campus on Mull will see children and young people benefit from a well-resourced single site which retains capacity to meet any future needs as they arise. The single site offers more effective use of resources and reduces duplication. Opportunities for senior young people to take on leadership and mentoring roles across the whole campus will be improved. The model also gives the opportunity for a culture of shared practice and collaboration which enriches both teaching quality and pupil outcomes, creating a supportive learning environment across all age groups. The advantages of this model, for pupils and parents, are clear. Children can make secure and long-lasting friendships, enjoy a familiar environment and facilities, and feel well known and supported by their teachers, as well as benefiting from a continuity of approach, ethos and community. By reducing the number of physical transitions, a 2-18 campus provides an emotionally supportive environment that allows pupils to focus on learning rather than adjusting to new systems. By providing a cohesive, consistent learning environment, a 2-18 campus helps pupils to reach their academic potential, develop social skills and maintain a strong support network. On a practical level, the morning school-run is simpler if siblings can be dropped off at the same place; there is a single school calendar to deal with rather than several sets of dates and events; and one set of teaching staff to get to know, over a longer period of time. The 2-18 campus model thus represents an educational approach that not only supports academic achievement but also prioritises the holistic development of every child. Written by Jen Crocket Job title Lifelong Learning and Support; and Chief Education Officer Date October 2024 Page 438
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ARGYLL AND BUTE COUNCIL COUNCIL LEGAL AND REGULATORY SUPPORT 20 DECEMBER 2024 APPOINTMENT OF A RECRUITMENT PANEL FOR THE HEAD OF ROADS AND INFRASTRUCTURE SERVICES 1.0 INTRODUCTION 1.1 The purpose of this report is to invite the Council to establish an Appointments Panel to appoint to the post of Head of Roads and Infrastructure Services. 2.0 RECOMMENDATIONS It is recommended that Council: 2.1 Agrees to establish an Appointments Panel for the recruitment to the post of Head of Roads and Infrastructure Services; and 2.2 Nominates 3 elected members and substitutes to the Appointments Panel: two from the Administration and one from the opposition. 3.0 DETAIL 3.1 The Head of Roads and Infrastructure post will be vacant as of early January 2025. 3.2 In terms of the Council’s constitution Heads of Service are appointed by a panel of 5. Three elected members (2 from the Administration and 1 from the Opposition) plus Executive Director and Chief Executive as voting members. 3.3 The Council is requested to nominate 3 members to approve the short leeting, interview the short-listed candidates and make an appointment. 3.4 The appointments process will, as per agreed practice for appointing Chief Officers, include an assessment centre run by SOLACE Enterprises. This will inform the final appointment. 4.0 CONCLUSION 4.1 The Council is asked to agree an appointment panel for recruitment to the post of Head of Roads and Infrastructure Services. Page 439 Agenda Item 8
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5.0 IMPLICATIONS 5.1 Policy – This paper gives effect to the Council’s Constitution and Recruitment and Selection Procedure for Chief Officers. 5.2 Financial – None – this post is budgeted for. 5.3 Legal – as 5.1 above. 5.4 HR – as 5.1 above. 5.5 Fairer Scotland Duty: 5.5.1 Equalities - protected characteristics – Due regard should be given to the make-up of the appointments panel to ensure balance as far as possible, 5.5.2 Socio-economic Duty - none 5.5.3 Islands – none 5.6 Climate Change – none 5.7 Risk– Failure to recruit to the post would affect the operational management and strategic leadership of the organisation. 5.8 Customer Service – none 5.9 The Rights of the Child (UNCRC) - none Douglas Hendry, Executive Director with responsibility for Legal and Regulatory Support For further information contact: Shona Barton, Governance Manager, 01436 657605 Page 440
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ARGYLL AND BUTE COUNCIL PLANNING, PROTECTIVE SERVICES AND LICENSING DEVELOPMENT AND ECONOMIC GROWTH 18 DECEMBER 2024 REVISION OF ARGYLL AND BUTE COUNCIL’S SHORT-TERM LET LICENSING POLICY 1.0 EXECUTIVE SUMMARY 1.1 This report proposes amendments to the Council’s Short-Term Let Licensing Policy to reflect legislative changes introduced by the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2024, experience and discussions with other local authorities, Scottish Government, the SLT Licensing team, customers and the Association of Scottish Self Caterers (ASSC). 1.2 The aim of the licensing scheme is to ensure short-term lets are safe, address issues faced by neighbours, to facilitate local authorities knowing and understanding what is happening in their area, and handling complaints effectively. It also aims to balance the economic and tourism benefits from short-term lets with the needs and concerns of local communities to ensure the people providing short-term lets are suitable. 1.3 The Councils Short-Term Let Policy was last amended by Council on the 28 September 2023. 1.4 The licensing scheme is self-financing from fee income. 1.5 Members of the Planning, Protective Services and Licensing Committee are invited to:- 1. Consider this report and the revised Short-Term Let Licensing Policy detailed in Appendix 1; and 2. Recommend to Council approval of the revised Short-Term Let Licensing Policy. Page 441 Agenda Item 9b
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ARGYLL AND BUTE COUNCIL PLANNING, PROTECTIVE SERVICES AND LICENSING COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 18 DECEMBER 2024 REVISION OF ARGYLL AND BUTE COUNCIL’S SHORT-TERM LET LICENSING POLICY 2.0 INTRODUCTION 2.1 The licensing scheme was brought in by the Scottish Government under the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022, with the aim to ensure short-term lets are safe, address issues faced by neighbours, to facilitate local authorities knowing and understanding what is happening in their area, and handling complaints effectively. It also aims to balance the economic and tourism benefits from short-term lets with the needs and concerns of local communities to ensure the people providing short- term lets are suitable. 2.2 This report recommends changes to the Council’s Short-Term Let Licensing Policy. These are necessary to implement the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2024, to address issues identified through operational work and feedback from the sector. 3.0 RECOMMENDATIONS 3.1 Members of the Planning, Protective Services and Licensing Committee are invited to: i. Consider this report and the revised Short-Term Let Licensing Policy detailed in Appendix 1; and ii. Recommend to Council approval of the revised Short Term-Let Licensing Policy. Page 442
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4.0 DETAIL 4.1 The Scottish Governments Short-Term Let Licensing scheme was implemented by local authorities on the 1 October 2022 and Argyll and Bute Council’s scheme was approved by Council on the 29 September 2022. Critical to the scheme is the Council’s Short-term Let Policy and this was previously amended by Council on the 10 July 2023 and 28 September 2023. A further revision is necessary to reflect changes in legislation, experiences gleaned over the last year and discussions with the Scottish Government, local authorities and sector bodies, including the Association of Scottish Self Caterers (ASSC). 4.2 The revised Short-Term Let Licensing Policy (see Appendix 1) is provided for members’ consideration and the key changes are as follows: i. Implements the changes introduced by the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2024 and removes references to the transitional arrangements which ended on the 1 October 2023. ii. Amends the definition of “excluded tenancy” to provide that a person’s foster child is treated as the person’s child, and therefore classed as an “immediate family member” under the licensing scheme. iii. Amends the list of excluded accommodation to include residential accommodation where personal care is provided to residents; hospitals or nursing homes, including guest rooms which are for the purposes of visiting residents. Guest rooms within sheltered housing provided for the purposes of guests visiting residents are also included. iv. Introduces new arrangements for provisional short-term let licences for properties which are proposed, or are in construction for use, as a short-term let. This provides some assurance for applicants and supports development (section 11) v. Introduces a new provision to allow a licence holder to apply to the Council to transfer their short term let licence (including a provisional short term let licence) to another individual, termed a “transferee”. (Section 13). This is relevant to, and intended to support, the sale of short-term let accommodation. vi. Proposes new fees for transfer of licences and provisional licences. vii. Amends the mandatory licence conditions (Appendix 3 of the Policy) to include the new conditions detailed in the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2024, including advice on mobile gas cabinet heaters viii. Proposes minor amendments to the Councils additional licence conditions (Appendix 4 of the Policy) to provide greater clarity on the requirements for noise control in flatted properties, the license responsibilities for waste disposal arrangements; and introduce a new condition to cover the safe use of solid fuel, multi-fuel or wood burning stoves or open fires. Page 443
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5.0 SHORT-TERM LET UPDATE 5.1 Argyll and Bute has a significant short-term let sector and the Council have received 3370 applications and continue to receive in the region of 10-20 new applications each month. A total of 1558 licences have been issued, with 53 being invalidated and no refusals (as of 3 December 2024). The team are working hard to assess and determine all remaining applications. 6.0 CONCLUSION 6.1 Revisions to the Council’s Short-Term Let Policy are necessary to ensure the Council has sufficient arrangements in place to deliver the licensing scheme and reduce the risk of legal challenge. Members are encouraged to approve the revised STL Policy as detailed in Appendix 1. 7.0 IMPLICATIONS 7.1 Policy: Consistent with the Council’s Corporate Plan and statutory duty. 7.2 Financial: Licensing scheme is to be self-financing from income levels. 7.3 Legal: Meets Council’s mandatory duty under Civic Government (Scotland) Act 1982 (Licensing of Short-Term Lets) Order 2022 7.4 HR: Additional temporary posts are being recruited funded by income. 7.5 Fairer Scotland Duty: 7.5.1 Equalities - protected characteristics: No adverse impact on protected characteristics 7.5.2 Socio-economic Duty: Ensures that let accommodation is safe, applies consistent standards across all sectors and protects communities 7.5.3 Islands: Licensing scheme will be consistently applied across the whole of Argyll and Bute 7.6 Climate Change: Supports climate change and environment standards 7.7 Risk: Council’s legal duty will be met through revision of the Policy. 7.8 Customer Service: Consistent with the Councils Customer Charter 7.9 The Rights of the Child (UNCRC): Provides for safe accommodation Page 444
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Kirsty Flanagan Executive Director with responsibility for Regulatory Services and Environmental Health Policy Lead; Councillor Kieron Green 2 DECEMBER 2024 For further information contact: Alan Morrison, Senior Manager - Regulatory Services and Building Standards: alan.morrison@argyll-bute.gov.uk/01546604292 APPENDICES Appendix 1 Revised Argyll and Bute Councils Short-term Let Licensing Policy Page 445
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Appendix 1 Short-term Lets Licensing Approved Policy Statement Page 447
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Contents Foreword 1. Background 2. Timescales For Applying 3. Definitions 4. Applications And Notification 5. Objections And Representations 6. Determination Of Application 7. Right Of Appeal 8. Licence Duration And Renewal 9. Licence Conditions 10. Temporary Exemptions And Licences 11. Provisional Licences 12. Variation Of A Licence 13. Transfer Of A Licence 14. Enforcement And Compliance 15. Suspension And Revocation Of A Licence 16. Planning Permission 17. Equality 18. Fees Appendix 1 Contact Details Appendix 2 Hearing Procedure Appendix 3 Mandatory Conditions Appendix 4 Additional Conditions Page 448
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Foreword This policy statement is a revision of the document approved by Argyll and Bute Council on the 28 September 2023. . A copy of the report is available online at (Public Pack)Agenda Document for Argyll and Bute Council, 28/09/2023 10:00 The revised Policy Statement provides guidance for applicants, licence holders, members of the public and Council officers on the licensing system for short-term lets. This policy statement will be reviewed and revised when necessary. Document Management Revision Date Approved Reason STL Policy Statement v1 29 September 2022 Approved by Council To implement scheme STL Policy Statement 1.1 10 July 2023 Regulatory Services and Building Standards Manager Clarification to STL hearing procedure Appendix 2 STL Policy Statement v2 28 September 2023 Approved by Council Review of policy to reflect legislative and guidance changes, and learning from year 1 of scheme. STL Policy Statement v3 December 2024 Page 449
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1. BACKGROUND 1.1 On 19th January 2022, The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 (“the 2022 Order”) was approved by the Scottish Parliament. The 2022 order came into force on 1st March 2022 and inserts new legislative provisions into the Civic Government (Scotland) Act 1982 (“the Act”). The 2022 Order was amended by The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2023 (“2023 Order”) which came into force on 31 March 2023.The 2022 Order was further amended by The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2024 (“2024 Order”) which came into force on 31st August 2024 1.2 The Orders introduce a new mandatory licensing system for short-term lets which local authorities were required to establish by 1st October 2022. 1.3 Prior to the introduction of the legislation, there was no requirement to licence short-term lets and, therefore, local authorities did not have the ability to regulate these types of premises. 1.4 The licensing scheme was enacted by the Scottish Government with the aim to ensure short-term lets are safe, address issues faced by neighbours, to facilitate local authorities in knowing and understanding what is happening in their area, and handling complaints effectively. It also enabled local authorities to ensure the people providing short-term lets are suitable. The legislation aims to make sure that the economic and tourism benefits from short-term lets are balanced with the needs and concerns of local communities. 2. TIMESCALES FOR APPLYING 2.1 Since 1 October 2023, existing hosts and operators (those using accommodation to provide short term lets before 1 October 2022 and who applied for a licence prior to 1 October 2023) can only continue to operate if they either held a licence, or their application was yet to be determined. 2.2 New hosts or operators cannot lawfully operate (i.e. take bookings or receive guests) until their licence has been determined and they have been granted a licence. 3. DEFINITIONS 3.1 A short-term let is defined in the 2022 Order as the use of residential accommodation provided by a host in the course of business to a guest, where all the following criteria are met – Page 450
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(a) the guest does not use the accommodation as their only or principal home (b) the short-term let is entered into for commercial consideration (c) the guest is not - (i) an immediate family member of the host (ii) sharing the accommodation with the host for the principal purpose of advancing the guest’s education as part of an arrangement made or approved by a school, college, or further or higher educational institution, or (iii) an owner or part owner of the accommodation (d) the accommodation is not provided for the principal purpose of facilitating the provision of work or services by the guest to the host or to another member of the host’s household (e) the accommodation is not excluded accommodation (f) the short-term let does not constitute an excluded tenancy. Commercial consideration - this includes money and a benefit in kind (such as a provision of a service or reciprocal use of accommodation). Guest – this means a person who occupies accommodation under a short- term let Host – this means a person who is the owner, tenant or person otherwise in control over occupation and use of the accommodation Immediate family member – a guest is deemed to be an immediate family member of the host if they are – (a) your partner (spouse, civil partner or someone you live with as if you were married to them), (b) you or your partner’s parent, grandparent, child, grandchild or sibling, (c) the partner of one of your parents, grandparents, children, grandchildren or sibling. Excluded accommodation – this means accommodation which is, or is part of- (a) an aparthotel Page 451
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(b) premises in respect of which a premises licence within the meaning of section 17 of the Licensing (Scotland) Act 2005 has effect and where the provision of accommodation is an activity listed in the operating plan as defined in section 20(4) of the 2005 Act (c) a hotel which has planning permission granted for use as a hotel (d) a hostel (e) residential accommodation where personal care is provided to residents, including guest rooms provided at that accommodation for the purposes of visiting residents (f) a hospital or nursing home, including guest rooms provided at the hospital or nursing home for the purposes of visiting residents of the hospital or nursing home (g) a residential school, college or training centre (h) secure residential accommodation (including a prison, young offenders institution, detention centre, secure training centre, custody centre, short-term holding centre, secure hospital, secure local authority accommodation, or accommodation used as military barracks) (i) a refuge (j) student accommodation (k) accommodation which otherwise requires a licence for use for hire for overnight stays (l) accommodation which is provided by the guest (m) accommodation which is capable, without modification, of transporting guests to another location (n) a bothy (o) accommodation owned by an employer and provided to an employee in terms of a contract of employment or for the better performance of the employee’s duties or (p) guest rooms in sheltered housing which are provided for the purposes of visiting residents at that housing 3.2 Please note that if you have an HMO licence for your property, you still need a short-term let licence if it is also to be used for short- term lets. This is the case whether or not you live at the premises covered by your HMO licence. Page 452
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3.3 Self-catering property in the grounds of a licensed hotel is excluded. It is recommended that short-term let hosts take their own independent legal advice on whether or not their accommodation would require a short-term let licence. The Licensing Authority cannot provide legal advice on whether or not a premises is excluded from requiring a short-term let licence. Excluded tenancy – an excluded tenancy means a tenancy which falls within any of the following definitions: (a) protected tenancy (within the meaning of section 1 of the Rent (Scotland) Act 1984, (b) an assured tenancy (within the meaning of section 12 of the Housing (Scotland) 1988 Act), (c) a short assured tenancy (within the meaning of section 32 of the Housing (Scotland) Act 1988), (d) a tenancy of a croft (within the meaning of section 3 the Crofters (Scotland Act 1993), (e) a tenancy of a holding situated outwith the crofting counties (within the meaning of section 61 of the Crofters (Scotland Act 1993) to which any provisions of the Small Landholders (Scotland) Acts 1886 to 1931(8)) applies, (f) a Scottish secure tenancy (within the meaning of section 11 of the Housing (Scotland) Act 2001), (g) a short Scottish secure tenancy (within the meaning of section 34 of the Housing (Scotland) Act 2001), (h) a 1991 Act tenancy (within the meaning of section 1(4) of the Agricultural Holdings (Scotland) Act 2003), (i) a limited duration tenancy (within the meaning of section 93 of the Agricultural Holdings (Scotland) Act 2003), (j) a modern limited duration tenancy (within the meaning of section 5A of Agricultural Holdings (Scotland) Act 2003), (k) a short limited duration tenancy (within the meaning of section 4 of the Agricultural Holdings (Scotland) Act 2003), (l) a tenancy under a lease under which agricultural land is let for the purpose of its being used only for grazing or mowing during some specified period of the year (as described in section 3 of the Agricultural Holdings (Scotland) Act 2003), Page 453
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(m) a private residential tenancy (within the meaning of section 1 of the Private Housing (Tenancies) (Scotland) Act 2016), (n) a student residential tenancy 3.4 There are four types of licences for short-term let accommodation. Any licence granted must be for either- (a) Secondary letting (b) Home letting (c) Home sharing, or (d) Home letting and home sharing 3.5 The different types of licences are defined as follows - (a) Secondary letting – this means a short-term let involving the letting of property where you do not normally live (b) Home letting - this means using all or part of your home for short- term lets whilst you are absent (c) Home sharing – this means using all or part of your own home for short-term lets whilst you are there. This includes guest houses or bed-and-breakfast accommodation within the host’s principal residence. 3.6 A separate licence is required for each of your premises. However, a single licence may be issued in respect of unconventional accommodation where there is more than one separately bookable property on the site. Dwellinghouse means for these purposes, an independent dwelling (with its own front door, kitchen and bathroom) such as a house, flat, cottage etc. You do not need a separate licence for short-term lets within the same dwellinghouse. For example, if you are letting out two rooms in your home, that would be covered by one licence. Unconventional accommodation – this means residential accommodation that is not defined as a dwelling house and would include residential accommodation such as glamping pods and yurts. 4. APPLICATION AND NOTIFICATION 4.1 All applicants must complete an online short-term let licence application form. The application should be submitted online at Short term lets licence | Argyll and Bute Council (argyll-bute.gov.uk) Page 454
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Paper applications will be made available upon request to short- termlets@argyll-bute.gov.uk or Tel: 01546 605519. 4.2 Applicants require to pay in full the application fee as part of the online application process or if submitting a paper application form by making a payment to Argyll and Bute Council by contacting Short- Term Lets on 01546 605519. 4.3 The Council provides a pre-application checklist on its website to assist applicants in ensuring that their application includes appropriate details and documentation. This documentation includes gas and electrical safety certificates, layout drawings of the property as required by Scottish Fire and Rescue. 4.4 Under the terms of the Act, all applicants who apply for a short-term let licence must display a notice for a period of 21 days beginning with the date on which the application was submitted to the licensing authority, at or near the property to which the application relates, so that it can be conveniently read by the public. 4.5 The notice shall state that an application has been made for a licence, the main facts of the application, that objections and representations in relation to the application may be made to the licensing authority and how to make objections or representations. A template will be provided to the applicant once an application is submitted. 4.6 Applicants are required to certify compliance that they have displayed the site notice as soon as possible after the 21 days has expired. A template will be provided to the applicant once an application is submitted. 4.7 A copy of the application may, on request, be provided to Police Scotland and the Scottish Fire and Rescue Service by the local authority. A copy may also be made available to: - Argyll and Bute Council’s Planning Department - Argyll and Bute Council’s Building Standards service - Argyll and Bute Council’s Environmental Health service - Loch Lomond and the Trossachs Parks Authority (where the property is within the National Park) 4.8 All personal data will be processed in line with the following privacy notices: https://www.argyll-bute.gov.uk/privacy/civic-government-licensing 4.9 Licensing authorities have 9 months to process applications from new hosts Page 455
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4.10 The licensing authority will take into consideration the following when assessing occupancy – size and type of property, number of bedrooms, maximum number that can be accommodated safely and potential for noise and nuisance to neighbours. 5. OBJECTIONS AND REPRESENTATIONS 5.1 The 1982 Act permits any member of the public to submit an objection or representation in relation to an application for a short-term let licence. 5.2 To enable Argyll and Bute Council, as licensing authority (“the Council”) to entertain an objection or representation, it must be: (a) in writing (email is sufficient), (b) specify the grounds of the objection or the nature of the representation, (c) specify the name and address of the person making it, (d) be signed off by them or on their behalf (e) be received by the Council within 28 days from when the notice of application is displayed. 5.3 Anonymous objections or representations will not be considered. “Anonymous” includes objections or representations where the person making the objection or representation cannot be contacted using the contact information provided. 5.4 Late objections or representations may be considered, entirely at the Council’s discretion, if the Council is satisfied that there is sufficient reason as to why it was not made in the time required. 5.5 The objection should be relevant to the statutory grounds that can be taken into consideration when refusing an application. These are set out in the 1982 Act - (a) the applicant or anyone else detailed in the application form is not a fit and proper person to be the holder of a licence, (b) the activity would be carried out by a person other than the applicant who, if he had made the application himself, would have been refused, (c) the premises is not suitable for the conduct of the activity, having regard to - Page 456
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(i) the location, character or condition of the premises, (ii) the nature and extent of the proposed activity, (iii) the kind of persons likely to be in the premises, (iv) the possibility of undue public nuisance, public order; or public safety, (v) where there is other good reason 5.6 It should detail clearly the reasons for the objection/representation and why the applicant and/or the premises are not suitable. 5.7 A copy of the objection or representation will be provided to the applicant and will include your name and address. All personal data will be processed in line with the following privacy notice: https://www.argyll-bute.gov.uk/privacy/civic-government-licensing 6. DETERMINATION OF APPLICATION 6.1 Everybody named on the application form will be subject to the fit and proper test. Every application form will require consultation with Police Scotland who will carry out background checks. 6.2 Licensing authorities are responsible for determining whether you are a fit and proper person to be the holder of a licence for short- term lets. Consideration will be given to a wide range of information including relevant criminal convictions, other relevant information provided by Police Scotland, any previous disqualifications from being a private landlord, previous revocations of a HMO licence and providing false or misleading information in your application form. 6.3 If there are no objections or adverse representations to a short-term let licence application, the application will be determined under delegated powers by the Executive Director with responsibility for Regulatory Services. 6.4 If an objection or adverse representation is submitted in relation to the short-term let licence application and, this cannot otherwise be resolved, the application will be subject to a hearing at a meeting of the Council’s Planning, Protective Services and Licensing Committee. 6.5 The person submitting the objection or representation will be invited to attend the meeting of the Planning, Protective Services and Licensing Committee and speak to their objection/representation. You will be given at least 14 days’ notice of the hearing date. Page 457
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6.6 The applicant or their representative will be invited to attend the meeting and given the opportunity to state why the application should be granted. 6.7 The Committee will be able to ask questions of both parties and, thereafter, decide whether to grant or refuse the application. The grounds for refusing an application are set out at paragraph 5.5. 6.8 Applications will be heard in public unless required to be taken privately on the grounds of disclosure of exempt information as defined in Part 1, Schedule 7A of the Local Government (Scotland) Act 1973. 6.9 A copy of the Council’s hearing procedure can be found at Appendix 2. 6.10 Both the applicant and the person(s) making an objection/representation can request a statement of reasons for the decision within 21 days of the date of the decision. The statement of reasons will be provided within 10 days of that request. 6.11 If your application for a licence is refused, you cannot reapply for a licence within 1 year of that decision, unless there has been a material change in your circumstances since then. 7. RIGHT OF APPEAL 7.1 The applicant and the person(s) making an objection/ representation have a right of appeal to the Sheriff Court. 7.2 However, they only have this right if they have taken every opportunity to state their case to the Committee as has been made available. 7.3 The Sheriff can uphold an appeal only if the sheriff considers that the licensing authority erred in law, based their determination on any incorrect material fact, acted contrary to natural justice or exercised their discretion in an unreasonable manner. 7.4 Any appeal must be lodged by way of a summary application with the relevant Sheriff Clerk’s office within 28 days of the date of the decision appealed against. 7.5 Parties should seek their own independent legal advice in relation to an appeal. Page 458
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8. LICENCE DURATION AND RENEWAL 8.1 The duration of the licence applies from the date on which the licence comes into force. This will be specified on the licence together with the expiry date of the licence. 8.2 When an application is made to renew a licence timeously, the existing licence will continue in effect until such time as a decision is made on the renewal application. 8.3 A licence shall have effect - - for a maximum period of 3 years from the date when it comes into force; or - for such shorter period as the licensing authority may decide at that time when they grant; or - for such longer period as the licensing authority may decide at the time when they renew a short-term let licence 8.4 The Scottish Government’s guidance for licensing authorities on short-term lets has made it clear that licensing authorities are encouraged to renew licences for a period of 3 years, unless they have good reasons to do otherwise. 8.5 Whilst each application will be decided on its own merits, it is not anticipated that licences will be renewed for a period of longer than 3 years. 9. LICENCE CONDITIONS 9.1 The Act sets out a number of mandatory licence conditions which apply to all short-term let across Scotland. A list of these conditions can be found at Appendix 3. 9.2 In addition to the mandatory licence conditions which apply to all short-term lets, licensing authorities may impose additional conditions. These enable the licensing authority to respond to local challenges and concerns relative to specific types of short-term letting. 9.3 There are a number of additional conditions which will apply to all short-term let properties. There also some specific additional conditions which may only apply to certain types of short-term let properties or to properties following investigation of concerns. A list of the additional licence conditions which may apply to your short- term let licence can be found at Appendix 4. Page 459
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10. TEMPORARY EXEMPTIONS AND TEMPORARY LICENCES 10.1 The Council will not consider applications for temporary exemptions or temporary licences under any circumstances. This position will be kept under review. 11. PROVISIONAL LICENCES 11.1 The 2024 Order introduced provisional short term let licences. A provisional short term let licence can be applied for in relation to any premises that are yet to be or are in the course of being built for the use as a short term let. The type of letting that can be applied for with such provisional short term let licence is Secondary Letting, Home Sharing, Home Letting and Home Sharing and Home Letting. 11.2 All applicants who wish to apply for a provisional short term let licence must complete an application. The application should be submitted online at Short term lets licence | Argyll and Bute Council (argyll- bute.gov.uk) Paper applications will be made available upon request to short-termlets@argyll-bute.gov.uk or Tel: 01546 605519. 11.3 Applicants require to pay in full the application fee as part of the online application process or if submitting a paper application form, by making a payment to Argyll and Bute Council by contacting Short-Term Lets on 01546 605519. 11.4 This application must also be accompanied by a provisional planning certificate. This is a certificate which is signed on behalf of the planning authority which states that: (a) planning permission approved, (b) planning permission in principle or outline planning permission under the Town and Country Planning (Scotland) Act 1997 has been obtained in respect of the construction of the premises, or (c) no such planning permission is required. 11.5 A copy of the application for a provisional short term let licence will be sent to Police Scotland, Scottish Fire & Rescue Service and the Council’s Environmental Health service for consultation. In addition, a site notice will be issued to the applicant, as detailed in section 4.3-4.5 of this Policy. If an objection/ representation is received from a service/agency or a member of the public, which cannot otherwise be resolved, the application will be referred to the Argyll and Bute Licensing Committee for determination, as detailed further in sections 5 and 6 of this Policy. 11.6 If a provisional short term let licence is granted, no mandatory conditions or additional licence conditions will apply to the provisional short term let licence. The licence holder is not permitted to operate the premises as a short term let i.e. accept bookings or guests, until the provisional short term let licence is confirmed, as detailed in sections 11.13 and 11.14 of this Policy. Page 460
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11.7 When the construction of the short term let premises is complete, the provisional licence holder may then apply to the Council to confirm the provisional licence. As laid down in the 2024 Order, a provisional short term let licence must be confirmed before the premises can operate as a short term let. All applicants who wish to apply for the confirmation of a provisional short term let licence must contact the Council via Short-termlets@argyll-bute.gov.uk), together with the appropriate documentation and information and full payment of the application fee. This application for confirmation must also be accompanied by: (a) the provisional short term let licence; (b) if the provisional planning certificate which accompanied the provisional short term let licence application in respect of the premises consisted of outline planning permission or planning permission in principle, a planning certificate (as detailed further in section 16 below); (c) a building standards completion certificate and (d) such other information as the Council, as the licensing authority, may reasonably require. 11.8 An application for confirmation of a provisional short term let licence will be sent to Police Scotland, and where appropriate, Scottish Fire & Rescue Service and the Council’s Environmental Health service. 11.9 If an objection or adverse representation is submitted in relation to the short-term let licence application, cannot otherwise be resolved, the application will be subject to a hearing at a meeting of the Council’s Planning, Protective Services and Licensing Committee. 11.10 At confirmation stage, the Council provides a pre-application checklist on its website to assist applicants, in providing supporting documentation, includes appropriate details and documentation. This documentation includes gas and electrical safety certificates, layout drawings of the property as required by Scottish Fire and Rescue 11.11 There is no requirement for the applicant to display a site notice under section 4.4- 4.6 of this Policy and there is no opportunity for members of the public to lodge objections/representations to an application for confirmation of a short term let licence 11.12 Where the Council receive an application and fee for the confirmation of the provisional short term let licence application, if it is satisfied that following construction of the premises, the applicant would be able to secure compliance with the mandatory conditions and additional conditions, must confirm the licence 11.13 Following determination of an application for the confirmation of the provisional short term let licence application, a short term let licence will be issued to the applicant for the premises to which the provisional short term let licence related to. Upon confirmation being issued by the Council, the short term let licence will be for the Page 461
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duration of the period of the provisional licence or any extension granted by the Council. 11.14 A provisional short-term let licence is treated as revoked if it is not confirmed within 3 years after the date on which it was issued unless this period is extended by the Council. A provisional licence holder must submit a formal request in writing to the Council (Short- termlets@argyll-bute.gov.uk) for an extension to the Council, a minimum of 2 months from the date of expiry. An extension will be considered where the Council is satisfied that completion of the construction has been delayed by factors outwith the provisional short term let licence holder’s control 12. VARIATION OF A LICENCE 12.1 A licensing authority may, at any time, whether or not upon an application made to them by the holder of the licence, vary the terms on any grounds they think fit. 12.2 A variation application cannot, however, be used to substitute a new holder of the licence for the existing one (i.e. effectively to transfer a licence) but would apply where the short-term let host is a corporate entity, and the incoming purchaser is added as a director to that body corporate. 13. TRANSFER OF A LICENCE 13.1 The 2024 Order introduced a provision which will permit a licence holder to apply to the council to transfer their short term let licence (including a provisional short term let licence) to another individual, termed a “transferee” 13.2 All applicants who wish to apply for the transfer of a short term let licence must complete an online application or circumstances agreed with the Council, on the prescribed hard copy. The application must also be accompanied by: (a) the short term let licence to which it relates or, if that is not possible, a statement of reasons for the failure to produce the licence; (b) where the applicant is not the owner of the short term let premises or the land on which it is located: i. the name and address of the owner (or, as the case may be, each owner), and ii. ii. a declaration from the owner (or, as the case may be, each owner), or a person authorised to act on their behalf, that they consent to the application; Page 462
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(c) where the applicant shares ownership of the premises or the land on which the premises are located: (i) the name and address of each owner, and (ii) a declaration from each owner, or a person authorised to act on their behalf, that they consent to the application. (d) where the short term let licence is held in joint names: (i) the name and address of each licence holder, and (ii) a declaration from each licence holder, or a person authorised to act on their behalf, that they consent to the application. (e) such other information as the Council, as the licensing authority may reasonably require. 13.3 A copy of the application for the transfer of a short term let licence will be sent to Police Scotland for consultation. If an objection/representation is received from Police Scotland in relation to the transfer of the short-term let licence application which cannot otherwise be resolved, the application will be subject to a hearing at a meeting of the Council’s Planning, Protective Services and Licensing Committee. 13.4 If there is no objection/representation, the transfer application will be granted. 13.5 There is no requirement for the applicant to display a site notice and there is no opportunity for members of the public to lodge objections/representations to the transfer application 13.6 If a transfer application is granted, there will be no change to the expiry date of the short term let licence to which the application relates to. 14. COMPLIANCE AND ENFORCEMENT 14.1 Unlicenced short-term lets 14.1.1 It is a criminal offence to carry on an activity for which a licence is required without having a licence and without reasonable excuse. 14.1.2 The Scottish Government has set out the following timescales for hosts and operators. Please note the rules are different depending on whether you are a new host/operator or an existing host/operator - New hosts/operators - From 1 October 2022 you cannot accept bookings until you have obtained a short term let licence Page 463
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- From 1 October 2022, you cannot operate while your short term let application is being determined Existing hosts/operators - Applications submitted by existing hosts/operators (i.e. trading on or before 30th September 2022) which are yet to be determined, can continue to operate pending a final decision by the Council, under a deemed granted classification. 14.1.3 The Council will maintain a public register of short-term let licence applications and licences granted. This will allow members of the public to check the licensing status of a premises being used as a short-term let. 14.1.4 Complaints about suspected unlicensed hosts/operators should be directed to Police Scotland. 14.2 Licenced short-term lets 14.2.1 Hosts and operators must ensure that any advert or listing placed on or after they are granted a licence number includes their licence number. 14.2.2 Hosts and operators must ensure that they comply with all the mandatory and any additional conditions on their licence. It is a criminal offence to fail to comply with a licence condition if a licence holder has not used all due diligence to prevent the offence. 14.2.3 It is also a criminal offence for a licence holder, without reasonable cause, to fail to notify the licensing authority of a material change of circumstances. 14.2.4 The Council may undertake premises site visits as part of the application process and throughout the duration of the licence to ensure compliance with licence conditions. 14.3 Complaints about licenced short-term lets 14.3.1 In the first instance, guests should raise any concerns about their short-term let with their host/operator or letting agent/platform. If the issue is sufficiently severe, then the Council may become involved. 14.3.2 A complaint must be relevant to the matters that the Council can take into consideration. Frivolous or vexatious complaints will not be considered. 14.3.3 The Council can consider matters relating to the suitability of the licence holder, threats to public safety or public order or whether a condition of the licence has been contravened Page 464
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14.3.4 These issues would include a host/operator exceeding the number of people staying at the premises, serious disturbance or antisocial behaviour or concerns about the maintenance and safety of the premises. These complaints can be directed to short-termlets@argyll-bute.gov.uk 14.3.5 Please note that the Council cannot consider complaints in relation to the quality of a guest’s stay or specific contractual matters between the guest and the host/operator as this is outside the scope of the licensing scheme. 14.3.6 Complaints will aim to be acknowledged within 5 working days. A full response advising you of the outcome may take some time if the complaint requires further investigation. The complaint may also need to be directed to other departments within the Council other services such as Police Scotland or Scottish Fire and Rescue Service for input. Complainants will be kept up to date with progress if there is a delay in a full response being provided. 14.3.7 Premises site visits may be undertaken by the Council as part of an investigation into a complaint. 14.4. Enforcement 14.4.1 It is possible that some complaints may require enforcement action from the Council. 14.4.2 The Act provides for several options for enforcement action if justified. This includes additional licence conditions being attached, enforcement notices or variation, suspension or revocation of the licence or in more serious circumstance pursuing a prosecution. 14.4.3 The Council recognises the importance of having compliance issues monitored in order to ensure licensed Short-term lets are complying with licence standards and not causing an unnecessary nuisance to the community, nearby residents or neighbours. As such it will carry out a risk-based approach to enforcement, using a range of escalating informal measures, prior to an Enforcement Notice being issued and subsequently a complaint being made to the Committee in relation to the STL licence. 14.4.4 An enforcement notice will set out the matters constituting a breach or likely breach, the action required to rectify or prevent the breach and the date by which the action must be taken. 14.4.5 If the matter is not addressed satisfactorily by the licence holder, the Council may then consider a variation, suspension or revocation of the licence. Page 465
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14.4.6 Routine enforcement visits are funded from the application fee. However, an inspection charge will be applied for any follow up visit (s) necessary because of non-compliance with licence conditions. 15. SUSPENSION OR REVOCATION OF A LICENCE 15.1 A licensing authority may, whether upon a complaint made to them or not, suspend or revoke a licence. 15.2 A licensing authority may order the suspension or revocation of a licence if in their opinion – - the holder of the licence is no longer a fit and proper person to hold the licence - the licence holder is managing the property on behalf of someone who would have been refused the grant or renewal of the licence - a condition of the licence has been contravened 15.3 The period of suspension can be the unexpired portion of the duration of the licence, or such shorter period as the licensing authority may fix. The effect of the suspension shall be that the licence shall cease to have effect during the period of suspension. 16. PLANNING PERMISSION 16.1 The requirement for planning permission is a separate matter from licencing of short-term lets. Whether or not planning permission is required for the use of a dwelling for short- term let purposes will firstly depend on whether it is located within a Short-Term Letting Control Area. Outwith control areas, the requirement for planning permission would be a matter for the planning authority to determine on a case by case basis, depending on the nature and circumstances of the property and the manner in which it is operated. Hosts and operators must comply with both planning and licensing law. 16.2 The Council is the relevant planning authority for the Argyll and Bute area located outwith the Loch Lomond and the Trossachs National Park. The National Park Authority is the planning authority for the full extent of the Loch Lomond and the Trossachs National Park designation. Short-Term Letting Control Areas: 16.3 There is a separate legislative process from licensing which allows the Council and the National Park Authorities, as planning Page 466
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authorities, to establish short-term let control areas. The purpose of control areas is to help planning authorities manage high concentrations of secondary letting (where it affects the availability of residential housing or the character of a neighbourhood) and to restrict or prevent short-term lets in places or types of buildings where it is not appropriate. 16.4 Within a control area designated by a planning authority, use of a property for short-term letting will always require express planning permission. The host or operator must make an application for planning permission or already have planning permission before they apply for a licence. 16.5 There are currently NO Control Areas within Argyll and Bute although it is noted that consideration and determination of a STL Planning Control Areas is a matter for both the Council and Loch Lomond and the Trossachs National Park. Information generated from the STL licensing scheme, including number, location and type of licence, may inform this work. 16.6 Please note that planning authorities could designate control areas after a premises has already obtained a short-term let licence. Licence holders would be given a reasonable opportunity to comply with the mandatory condition by submitting a planning application or application for a Certificate of Lawful Use or Development (CLUD) as soon as possible after the control area is designated. If a CLUD or planning permission is refused, this may result in the licence being refused, varied or revoked as appropriate Outwith Control Areas: 16.7 Outside of a control area, it is for the planning authority to consider whether any change of use of a dwelling house is material and, therefore, requires planning permission, although you may also require permission where a premises has resulted in the subdivision of a residential plot where it is an annex or garage that has been converted. This is determined on a case by case basis and will depend very much on the nature of the dwelling to be let, its relationship to neighbouring land uses, its servicing arrangements, and the manner in which the property will be operated. 16.8 Hosts and operators are, therefore, encouraged to engage with the relevant planning authority prior to submitting a licence application to confirm whether they require planning permission or a certificate of lawful use of development. Detailed enquiries can be submitted for review and assessment through the Council’s chargeable pre-application advice service: Pre-Application Guidance (argyll-bute.gov.uk) Page 467
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Contact details for Loch Lomond and the Trossachs National Park planning service: Planning - #LetsDoNetZero -Loch Lomond & The Trossachs National Park (lochlomond-trossachs.org) 17. EQUALITY 17.1 The Equality Act 2010 Act introduced a new public sector equality duty which requires public authorities, including the Committee, to try and eliminate discrimination, promote equality and good relations across a range of protected characteristics. 17.2 Prior to the Committee implementing this policy an equality impact assessment was undertaken. This can be viewed using the following link Equality and Socio-Economic Impact Assessments (argyll- bute.gov.uk) 18. FEES 18.1 Licensing authorities are required to charge fees in respect of processing and determining, the consideration of applications, the issue of duplicate licences and other matters. They must ensure that the fees are sufficient to cover their administrative expenses and are reviewed periodically. 18.2 Licensing fees are non-refundable. Whether or not a licensing application is granted, the Council incurs significant costs in processing the application. 18.3 The Council has considered the following criteria in the process of determining the fees: - The size of the premises - The number of rooms at the premises The number of guests who can reside at the premises The type of short-term let 18.4 Licence fees are set by the Council annually as part of the budget process. Fees and charges is available via this link to the Councils website. (Council fees and charges | Argyll and Bute Council (argyll-bute.gov.uk) 18.5 For indicative purposes the application and renewal fees for short term let licensing for 2023/24 are shown below: Page 468
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Application and renewal – full licence Guest capacity applied for (including children under the age of 10) Home sharing or home letting licence Secondary letting licence Up to 4 £239.90 £355.05 5 to 8 £335.05 £507.85 9 to 12 £558.40 £761.80 13 to 20 £711.25 £1015.75 21 and over £914.60 £1269.65 Provisional licence Guest capacity applied for (including children under the age of 10) Home sharing or home letting licence Secondary letting licence Up to 4 £39.90 £155.05 5 to 8 £135.05 £307.85 9 to 12 £358.40 £561.80 13 to 20 £511.25 £815.75 21 and over £714.60 £1069.65 Other types of application Fee Variation of licence / change in circumstances £86.50 Confirmation of a provisional STL licence application £200.00 Duplicate licence £46.05 Transfer of a licence £86.50 Application to extend provisional short-term let licence £86.50 Enforcement costs Officer hourly cost in 15 minute intervals (e.g. inspection of a premises in response to complaints/intelligence or where concerns are flagged at the application process by a consultee) * £105.95/hour *Where a fee is charged for such a visit, a report must be provided to the host or operator within 28 days of the inspection, unless otherwise agreed. Otherwise, the 50% of the fee will be refunded to the licence holder 18.6 Routine enforcement visits are funded from the application fee. However, an inspection charge will be applied for any follow up visit (s) necessary because of non-compliance with licence conditions. 18.7 The fee charged is weighted according to guest numbers with the unit fee being the cost of dealing with an application for 5-8 person secondary let licence. Applications for premises with larger numbers of guests are likely to require more enquiries, or attract more representations, or objections, which require to be dealt with as part of the application. Page 469
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Guest capacity (People) Home sharing and home letting licence Secondary let licence Up to 4 0.5 0.7 5 to 8 0.7 1.0 9 to 12 1.1 1.5 13 to 20 1.4 2.0 21 and over 1.8 2.5 APPENDIX 1 – CONTACT DETAILS Telephone – 01546 605519 Email – Short-termlets@argyll-bute.gov.uk Postal Address – Short-Term Lets Licensing, Argyll and Bute Council, Kilmory, Lochgilphead, Argyll, PA31 8RT Page 470
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APPENDIX 2 – HEARING PROCEDURE SHORT TERM LET LICENSING PROCEDURE FOR HEARINGS Applications will be heard in public unless required to be taken privately on the grounds of disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 7A of the Local Government (Scotland) Act 1973. 1. Chair will welcome, introduce everyone, outline the procedure and receive confirmation that both the Applicant and objector(s) accept the hearing procedure. If the representations/objection(s) were submitted timeously and there are no spent convictions to be considered, then proceed directly to number 4. 2. If the representation/objection (from the Police or any other party) has been received late the Committee must hear details as to why the representation / objection was late and be satisfied that there is sufficient reason why it was not made in the time required. If they agree that, then the representation/ objection can be heard, otherwise it should be disregarded. The process to be followed should be that the objector is invited to provide reasons as to why the submission was late. Members may ask any follow up questions of the objector. The applicant must then be asked if they have any objections to the late submission being accepted. The Committee must take all comments into account when deciding whether to accept the late submission. 3. If spent convictions are to be referred to then the guidance notes for spent convictions should be followed for each conviction. 4. The hearing procedure below should now be followed: (a) The Licensing Officer will present the report to the Committee. (b) The applicant or Agent, will be given the opportunity to speak in support of their application. (c) Any objector, or Agents, will have the opportunity to question the Applicant or Agent on matters related only to their presentation. (d) Objectors, or their Agents, will have the opportunity to speak in support of their objection. (e) The Applicant, or Agent, will have the opportunity to question any Objector, or Agent, on matters related only to their presentation. Page 471
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(f) The Committee Members, through the Chair may ask questions of the Applicant or Objector or their Agents for clarification. (g) The Chair will invite the Objector, or Agent to briefly summarise their points if they wish. (h) The Chair will invite the Applicant, or Agent to briefly summarise their points if they wish. (i) The Chair will confirm that everyone has had a fair hearing. (j) The Committee will debate and determine the application in the presence of Applicant/Objector. DECISION 1. A determination of the case will be made at the conclusion of the hearing and all parties will be notified of the decision in writing within 7 days of the hearing and shall be advised of his/her right to seek written reasons and appeal to the Sheriff Court. 2. If the decision of the Committee is to suspend, refuse or refuse to suspend a licence, a relevant person has a right to request within 28 days of the meeting, the Committee’s reasons for arriving at their decision. Unless the circumstances of the case justify immediate suspension, the suspension shall not take effect for 28 days from the date of the decision. 3. Appeals against the decision of the Committee must be lodged with the Sheriff Clerk within 28 days of the date of the decision. Page 472
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APPENDIX 3 - MANDATORY LICENCE CONDITIONS Agents 1. Only those named as a holder of the licence can carry out the day to day management of the short-term let of the premises. Type of Licence 2. The holder of the licence may only offer the type of short-term let for which the licence has been granted. Fire Safety *3. The holder of the licence must ensure the premises has satisfactory equipment installed for detecting, and for giving warning of — (a) fire or suspected fire, and (b) the presence of carbon monoxide in a concentration that is hazardous to health. 4. The holder of the licence must keep records showing that all upholstered furnishings and mattresses within the parts of the premises which are for guest use, or to which the guests are otherwise permitted to have access, comply with the Furniture and Furnishings (Fire Safety) Regulations 1988. Gas Safety 5. Where the premises has a gas supply – (a) the holder of the licence must arrange for an annual gas safety inspection of all gas pipes, flues and appliances in the premises (b) If, after an annual inspection, any appliance does not meet the required safety standard, the holder of the licence must not allow a short-term let of the premises until the works necessary to bring the appliance to the required safety standard have been carried out. Electrical Safety 6. Where there are electrical fittings or items within the parts of the premises which are for guest use, or to which the guests are permitted to have access, the holder of the licence must – (a) ensure that any electrical fittings and items are in (i) a reasonable state of repair, and Page 473
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(ii) proper and safe working order (b) arrange for an electrical safety inspection to be carried out by a competent person at least every five years or more frequently if directed by the competent person, (c) ensure that, following an electrical safety inspection, the competent person produces an Electrical Installation Condition Report on any fixed installations, (d) arrange for a competent person to (i) produce a Portable Appliance Testing Report on moveable appliances to which a guest has access, and (ii) date label and sign all moveable appliances which have been inspected. 7. In determining who is competent, the holder of the licence must have regard to guidance issued by the Scottish Ministers under section 19B(4) of the Housing (Scotland) Act 2006(2). Water Safety: Private Water Supplies 8. Where the Where the premises are served by a private water supply, the licence holder must comply with the requirements on the owners of private dwellings set out in the Water Intended for Human Consumption (Private Supplies) (Scotland) Regulations 2017. Water Safety: Legionella 9. The holder of the licence must assess the risk from exposure to legionella within the premises, whether or not the premises are served by a private water supply. Safety and Repair Standards 10. (1) The holder of the licence must take all reasonable steps to ensure the premises are safe for residential use. (2) Where the premises are subject to the requirements of Chapter 4 of Part 1 of the Housing (Scotland) Act 2006, the holder of the licence must ensure that the premises meet the repairing standard. Page 474
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Maximum Occupancy 11. The licence holder must ensure that the number of guests residing on the premises does not exceed the number specified in the licence. Information to be displayed 12. The holder of the licence must make the following information available within the premises in a place where it is accessible to all guests – (a) a certified copy of the licence and the licence conditions (b) fire, gas and electrical safety information (c) details of how to summon the assistance of emergency services (d) a copy of the gas safety report (e) a copy of the Electrical Installation Condition Report, and (f) a copy of the Portable Appliance Testing Report. (g) instructions as to what guests should do in the event that the carbon monoxide alarm sounds, (h) if there is a mobile gas cabinet heater in the premises, safety instructions as to the operation and movement of that mobile heater Information to be displayed 13. Where the premises is in a short-term let control area for the purposes of section 26B of the Town and Country Planning (Scotland) Act 1997 (“the 1997 Act”), the holder of the licence must, where the use of the premises for a short-term let requires planning permission under the 1997 Act, ensure that either - (a) an application has been made for planning permission under the 1997 Act and has not yet been determined, or (b) planning permission under the 1997 Act is in force. Page 475
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Listings 14. (1) The holder of the licence must ensure that any listing or advert (whether electronic or otherwise) for the short-term let of the premises includes – (a) The licence number, and (b) a valid Energy Performance Certificate rating if an Energy Performance Certificate is required for the premises, in accordance with the Energy Performance of Buildings (Scotland) Regulations 2008 (2) The holder of the licence must ensure that any listing or advert (whether electronic or otherwise) for the short-term let of the premises is consistent with the terms of the short-term let licence. Insurance 15. The holder of the licence must ensure that there is in place for the premises - (a) valid buildings insurance for the duration of the licence, and (b) valid public liability insurance for the duration of each short- term let agreement. Payment of fees 16. The holder of the licence must pay any fees due to the licensing authority in respect of the licence on demand. False or misleading information 17. The holder of the licence must not provide any false or misleading information to the licensing authority. Interpretation 18. In this schedule — “Electrical Installation Condition Report” means a report containing the following information — (a) the date on which the inspection was carried out (b) the address of the premises inspected, Page 476
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(c) the name, address and relevant qualifications of the person who carried out the inspection, (d) a description, and the location, of each installation, fixture, fitting and appliance inspected, (e) any defect identified, (f) any action taken to remedy a defect, “Energy Performance Certificate” means a certificate which complies with regulation 6 of the Energy Performance of Buildings (Scotland) Regulations 2008, “Gas safety report” means a report containing the following information — (a) the date on which the appliance or flue was checked, (b) the address of the premises at which the appliance or flue is installed, (c) a description of and the location of each appliance or flue checked (d) any safety defect identified, (e) any remedial action taken, (f) confirmation that the check undertaken complies with the requirements of an examination of— (i) the effectiveness of any flue, (ii) the supply of combustion air, (iii) subject to heat (iv) its operating pressure or heat input or, where necessary, both, (v) if it is not reasonably practicable to examine its operating pressure or heat input (or, where necessary, both), its combustion performance (vi) its operation so as to ensure its safe functioning (g) the name and signature of the individual carrying out the check, and Page 477
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(h) the registration number with which that individual, or that individual’s employer, is registered with a body approved by the Health and Safety Executive for the purposes of regulation 3(3) of the Gas Safety (Installation and Use) Regulations 1998 Page 478
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APPENDIX 4 - ADDITIONAL LICENCE CONDITIONS SHORT-TERM LETS: PROPOSED ADDITIONAL CONDITIONS Introduction Argyll and Bute Council consider that additional conditions should be applied to short-term let licences in its area. These derive from (a) the Part 2 Guidance for licensing authorities and (b) issues relating to guest safety which the Council has identified in its area and for which it considers additional licence conditions are necessary and appropriate. The “Part 2” additional conditions, are based closely upon the examples provided by the Scottish Government. These conditions would be generally- applicable to all licences, although some, for instance those relating to impact noise are not necessary for detached premises with no party structures. The guest safety conditions are intended for specific premises where certain facilities and amenities are provided for the use of guests (this would require a declaration on the application form). Alternatively, the conditions could be generally-applied with a conditional clause; the draft guest safety conditions are in the latter form. Antisocial Behaviour 1. The licence holder must take reasonable steps to manage the premises in such a way as to seek to prevent and deal effectively with any antisocial behaviour by guests to anyone else in the short-term let and in the locality of the short-term let. 2. The licence holder must take reasonable steps to: - Ensure that no disturbance or nuisance arises within or from the premises, for example by explaining the house rules to the guests; - Deal effectively with any disturbance or nuisance arising within or from the premises, as soon as reasonably practicable after the licence holder is made aware of it; and - Ensure that any vehicles belonging to guests are parked lawfully, for example explaining where any designated parking spaces are to be found and highlighting any local rules. 3. The licence holder must take reasonable step to ensure that guests do not play amplified music within the garden or external areas where or at times it would impact neighbouring residents. Page 479
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Privacy and Security 1. The licence holder must manage the premises in such a way as to respect and protect the privacy and security of neighbours. 2. The licence holder must ensure: - Guests know and understand any particular rules applying to shared areas and entrances; - Guests understand that shared doors should be properly and securely closed after use; and - The provision of access codes or keys to guests cannot be used by guests to gain access to shared areas after they have finally departed. Noise Control in Flatted Premises 1. Where the premises are a flat above another dwellinghouse, the licence holder must: - Fit and maintain carpets (with appropriate underlay) or other suitable noise suppressing floor covering to the floors of bedrooms, living room and any hallway. - Take reasonable steps to ensure that guests do not first arrive or finally depart from the property between the hours of 2300 and 0700. The licence holder must advise guests of this condition as part of their booking terms and conditions. Littering and Waste Disposal 1. The licence holder must provide adequate information on, and the facilities for, the storage, recycling and disposal of waste. 2. The licence holder shall be responsible for advising residents of the refuse collection day and for making arrangements for the presentation of bins for collection at the appropriate time and day. 3. The licence holder must advice guests of: - Their responsibilities; - The use of the bins etc. provided for the premises; and - The location of the nearest recycling area or recycling point. Page 480
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4. The licence holder must: - Clearly label bins as belonging to the premises; - Maintain the bins storage area and the exterior of the premises in a clean and tidy condition. Damage to Property The licence holder shall not affix a key box, or any other device to facilitate guest entry to the premises, to any public or jointly-owned private structure or infrastructure without the prior written permission of the relevant authority or owner(s). The licence holder must be able to produce the written permission to the licensing authority on demand. ADDITIONAL CONDITIONS FOR GUEST SAFETY Legionella risk assessment – spa pools/hot tubs 1. Where a spa pool, including any electric hot tub or wood-fired hot tub, is provided for the use of guests, the licence holder must install, maintain and operate it so it can be safely operated and used by guests. 2. The licence holder shall ensure, so far as is reasonably practicable: - That any such spa pool is installed and maintained in accordance with the guidance in HSE publication HSG282 Control of legionella and other infectious agents in spa-pool systems. - That there is a risk assessment and written scheme of control for Legionella in respect of any such spa pool. - That the risk assessment and written scheme of control are lodged with any application for a licence and are to the satisfaction of the licensing authority. - That, prior to any spa pool being brought into use for the first time during the period of the licence, at least 28 days’ notice shall be given to the licensing authority and the risk assessment and written scheme of control shall be submitted at the time of such notice. 3. The licence holder shall provide guests with information on the safe use of the spa pool in accordance with the written scheme of control. 4. The licence holder shall not provide or install any inflatable hot tub for the use of guests without the prior written approval of the licensing Page 481
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authority. Note that the licensing authority will not give approval in respect of inflatable hot tubs not intended for commercial use and which cannot conform to the requirements of HSG282. Guest safety – swimming pools and ponds 1. Where a swimming pool or swimming pond is installed and provided for the use of guests, the licence holder must take reasonable measures to ensure water quality and bather safety. 2. The licence holder shall ensure: - In the case of swimming pools, and swimming ponds, that a pool safety operating plan is prepared and lodged with any application for a licence and is to the satisfaction of the licensing authority. The licence holder shall have regard to the guidance in HSE publication HSG179 Health and safety in swimming pools. - In the case of swimming pools and swimming ponds, that a bather safety plan is prepared and lodged with any application for a licence and is to the satisfaction of the licensing authority. The bather safety plan shall include measures to minimise the risk of bathers getting into difficulty, to facilitate the rescue of bathers in difficulty and to call for the assistance of emergency services where necessary. - That, prior to any swimming pool or pond being brought into use for the first time during the period of the licence, at least 28 days’ notice shall be given to the licensing authority and the pool safety operating plan and bather safety plan shall be submitted at the time of such notice. 3. In this condition, “swimming pond” means an outdoor body of untreated water in natural ground which has been excavated or modified to provide a facility for swimming. It does not include natural watercourses, fresh-water lochs or coastal waters. 4. This condition does not apply to swimming pools which are staffed and operated with continuous poolside supervision by trained lifeguards. Risk of Carbon Monoxide – Barbecue Huts 1. Where a barbecue hut is installed and provided for the use of guests, the licence holder must take reasonable steps to ensure that the risk from Carbon monoxide is minimised. Page 482
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2. The licence holder shall, so far as is reasonably practicable: - Install, maintain and operate the barbecue hut only in accordance with the manufacturer’s instructions. - Install and maintain in proper working condition a Carbon monoxide monitor and alarm within the barbecue hut. - Provide guests with instructions on the safe use of the barbecue hut, the symptoms of Carbon monoxide poisoning and the actions to be taken in an emergency. - Not permit the use of the barbecue hut by persons under the age of 18 except in the presence of a person over the age of 18. - Not permit the use of a barbecue hut as sleeping accommodation. 3. For the purposes of this condition, a barbecue hut is a purpose-built, structure including a fixed hearth, and fixed ventilation supplying both fresh air to the hearth and extracting the products of combustion from the occupied space. Wood Burning Stoves/open fires 1. The Licence holder must declare to the Council the use of any solid fuel, multi-fuel or wood burning stoves/ open fires) for both indoor and outdoor use for guest use. 2. The Licence holder must ensure that any solid fuel, multi-fuel or wood burning stoves/ open fires are included within the properties fire risk assessment; and provide information to guests on their safe operation. Page 483
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SPECIAL ARGYLL & BUTE COUNCIL COUNCIL CUSTOMER SERVICES 20 DECEMBER 2024 EXTRACT OF MINUTE OF POLICY AND RESOURCES COMMITTEE HELD ON 5 DECEMBER 2024 * 14 OBAN AIRPORT BUSINESS PARK The Committee gave consideration to a report providing an update on progress of the Oban Airport Business Park project and how it fitted within the wider Lorn Arc Tax Incremental Finance (TIF) Programme. Decision The Policy and Resources Committee agreed the recommendations as contained within the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services and Executive Director with responsibility for Development and Economic Growth dated 28 November 2024, submitted) Page 485 Agenda Item 10a
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Document is Restricted Page 487 Agenda Item 10bNOT FOR PUBLICATION by virtue of paragraph(s) 6 of Schedule 7A of the Local Government(Scotland) Act 1973
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