Item 17 Statement of Governance and Internal Control APPENDIX
Argyll and Bute Council · 12 June 2025
Back to Audit and Scrutiny Committee — 12 June 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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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. Each Members interests can be found in their respective profiles at Members Interests is publically 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
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Scottish Public Services Ombudsman’s (SPSO’s) Model Complaints Handling Procedure. 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: Constitution, Governance, Risk Management and Accountability
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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 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
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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 14,000 customers currently subscribe to receive notifications across 22 different subscription services. In 2024/25 386,303 email notifications, newsletters and alerts were issued via the Keep in the Loop Service to its subscribers. 'Myaccount' This 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 services. Currently 19,231 customers have linked their national Myaccount to the Argyll and Bute Council instance and use it to access and personalise their interaction with the Council on a range of services e.g. it gives authenticated access to our Council Tax and Benefits Portal. Public Performance Reporting The Council’s website makes all relevant 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. It also includes all copies of the Council’s financial accounts and papers for all Council and Committee Meetings, supplemented by webcasts of meetings. Accessibility In 2024/5 77% of 528,606 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 is independently assessed against the international WCAG2.2 standard and in April 2025 it scored 99% and was the second highest ranked website in Scotland. The website had 4,501,450 page views in 2,868,330 separate sessions in 2024/25, an increase of 5.4% on the previous year. A new online service for all council employees called MyCouncilWorks was completed and it had 512,000 page views. In addition our 24/7 voice automated telephone service had 41,309 calls and collected £2.2m in automated phone payments. The council also fully reviewed and updated it Customer Service Strategy with a focus on inclusivity and accessibility. Community Engagement To support strengthening communities, community empowerment and engagement, the Council has in place: • An officer Community Engagement Strategy Group which has supported the development and implementation of the Council’s Engagement Framework; advising on best practice in engagement tools and techniques, and supporting skills development and capacity within the Council to effectively engage with communities which has included training for officers, elected members and communities. On this group sit those officers with expertise in engagement from a range of services across the Council, including those from Corporate Communications and the Communities &
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Partnership Team. The Council’s 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, 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 by delivering 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 organisations and development trusts, including publishing webinars on key topics of relevance to community organisations. • 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), hosting GrantNet for self-service funding searches, supporting funding applications through the Community Funding Toolkit, and undertaking tailored funding searches on request. • The annual delivery of a Supporting Communities Fund grant award scheme which community groups can apply for (up to £1500 each), including offering advice and support on applications and other funding routes. • Resourcing community council liaison activities, including training and support activity, helping to build the capacity of community councils. Delivering capacity building to communities to increase the use of the Gaelic language and to make it more accessible and visible. • Resourcing and supporting delivery of the statutory requirements under Part 3 (Participation requests) and Part 5 (Asset transfer requests) of the Community Empowerment (Scotland) Act 2015. Council departments are also provided with support in relation to Part 9 of the Act (Allotments). The Council also has a statutory lead role to ensure 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 collaboration with its Arms-length External Organisation (ALEO) partner, Live Argyll, and the Argyll and Bute Third Sector Interface (TSI). 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 the community, to deliver the statutory requirements under Part 2 (Community Planning) of the Community Empowerment (Scotland) Act 2015, including a Local Outcomes Improvement Plan. Support is also provided to the four Area Community Planning Groups The Community Planning Partnership seeks to ensure that young people are engaged in community planning and has implemented the following:
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• The 3 local Members of the Scottish Youth Parliament (MSYPs) are invited to attend the Community Planning Partnership Management Committee meetings on a rotational basis. • The Area Community Planning Groups (ACPGs) invite members of local youth forums to attend meetings when they are held in their local areas, with information 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. The Council also provides opportunities for community organisations to engage with Community Planning and Community Development through the following resources: Community Development Bulletin, Community Planning Bulletin, Gaelic Newsletter, Community Planning Podcast. 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. 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 acknowledged the effects of the ‘Cost of Living’ within Argyll and Bute and during 2024/2025 client gain achieved by the Flexible food and Fuel fund project reached £5.2 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
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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. Throughout 2024/25, Argyll & Bute Council actively drove forward its commitment to reducing carbon emissions, guided by our Decarbonisation Plan. We continued to deliver a range of projects aimed at lowering our environmental impact. This included tangible progress in enhancing energy efficiency within our buildings, advancing renewable technology installations such as the solar PV system at Cardross Primary School, and progressing the transition towards a lower-emission fleet. Efforts to minimise waste sent to landfill also remained a key operational focus. A significant development in 2024/25 was commencing the adoption of the Scottish Government's ClimateOS platform. This strategic tool is set to enhance our climate action planning capabilities, a positive step being embraced by local authorities across Scotland. These dedicated actions and project deliveries during the year reinforce our steadfast commitment to achieving Scotland's net zero targets and ensuring a greener Argyll & Bute. 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. 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
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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 has frameworks in place to support officer development. These underpinned by our corporate behaviours and delivered through the corporate training programme and leadership development programmes. In 2024/25 these frameworks are being redesigned to better reflect the principles of Connect for Success. During 2024/25 Executive Coaching for Chief Officers was introduced. While the corporate behaviours and Argyll and Bute Manager programme are being redesigned all content from the previous courses are available on LEON (the Councils eLearning platform). A new coaching conversations training programme has also been added to the corporate training programme to support managers with empowering team members and having coaching conversations. 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 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
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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. 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.
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Review of the Adequacy of Effectiveness of the Council’s Governance Framework 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. FINANCIAL SUSTAINABILITY It is anticipated that 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 current one year only financial settlements provide very little medium term budget certainty. Furthermore, the continued ring-fencing of monies and additional policy commitments, which are not always fully funded, limit financial flexibility and create additional budget pressures. In addition to uncertainty around future funding levels, there are also prevailing levels of economic uncertainty, with continued volatility in financial markets. Against a backdrop of historic real terms standstill/reducing Local Government Finance Settlements and the global economic climate, the management of budget pressures in respect of pay and other inflationary cost increases, together with increasing demands for key services, will continue to be challenging. The Council undertakes financial planning to provide a longer term view of its financial position over future years. Financial estimates are provided within its medium term financial outlook over a five year period, to provide a longer term view of the Council’s estimated budget gap. The financial outlook is underpinned by planning assumptions in respect of available funding, cost and demand pressures, pay and non-pay inflation, together with potential measures to balance the budget. These assumptions are reviewed and updated on an ongoing basis, with the outlook prepared to reflect best case, worst case and mid-range scenarios. The Council has a strong track record in effective financial management, as recognised by previous years’ annual external audit reports, and is well placed to manage future financial challenges. The annual audit report for the year ended 31 March 2024 also recognises that the Council has effective financial planning arrangements in place to support financial sustainability. In addition to its revenue budget outlook, the Council provides regular update
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reports on capital plans, reserves and balances, financial risks and treasury management activity, in accordance with its approved strategies. The Council is taking a longer term approach to budget planning and recognises that opportunities for budget savings will require to be delivered, whilst maintaining services, in line with its key strategic objectives and within available budget resources. Service transformation, underpinned by robust financial planning, will continue to be a key focus, in order to safeguard the financial sustainability of the council. 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. 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 2024/25 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 reasonable level of assurance on the adequacy of internal controls and governance arrangements within the IJB. During 2024-25 the IJB has progressed A number of areas for development in respect of governance have been progressed and this has resulted in a marked improvement in the way in which the IJB operates and is governed. The action plan is now fully implemented, highlights included the development of the Workforce plan, the roll out of the Integrated Performance Management System, the development of the engagement strategy and training and development for IJB members. The IPMF is now subject to review. The operating environment going forward is very challenging as funding allocations have not kept pace with cost and demand increases. The increase in the employer national insurance rate and threshold is having a material impact on commissioned service providers is increasing cost and service risk further. 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 Health and Care Staffing act is still in the early stages of its implementation and this will continue to impact upon staffing models through 2025/26 along with reduction in the working week (NHS) and other
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implications from pay awards. The financial constraints are so severe that the HSCP will be implementing its financial recovery plan and making reductions to its service offer. 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 HSCP will seek to balance the financial pressures it, and its partners, are currently experiencing with the care needs of the communities it serves. The IJB approved a budget for 2025/26 which indicates that financial recovery actions are required to identify further savings in year and that additional funding from NHS Highland may be required. The budget is also dependent upon the allocation of non-recurring pension fund savings and use of remaining reserves, this approach means that the scale of the challenge in 2026/27 is expected to be even more severe. 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 2025/26. The delivery of the short term savings and recovery 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 2023/24 Annual Governance Statement identified a number of areas for further development. A summary update for each area is provided in the table below. Area 2024/25 Update 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) The Council has completed its public consultation on the visitor levy and is now analysing the 3300 responses received prior to reporting back to the council for a potential decision in August 2025 on whether to proceed or not. Work also continues on creating a digital platform for the billing and collection of the levy taking into account issues raised through each councils’ respective consultations with the public. A decision on whether or not to proceed using this platform will be taken following decision at Committee in August on the Visitor Levy. 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) New IRD guidance has been developed and was launched on 28th April 2025. Following this event on going monitoring and auditing will be carried out to judge the effectiveness of this new guidance. . 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 A multi stakeholder action plan has been prepared and approved by the council. This action planned has informed a new housing strategy that has also been approved by the council and forwarded to the Scottish Government. A new housing delivery group has also been established to focus on delivering the actions identified in the action plan. Regular updates on progress are presented to the Councils EDI Committee.
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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 During 2024/25 Estates completed the revaluation of general properties within MAKI and H&L areas and it is intended to complete OLI and B&C areas in 2025/26. Reports were also submitted to DMT in relation to vacant property inspections and it was agreed on 24/3/25 that a working group of officers would be set up to progress this matter in conjunction with the council’s insurers 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) Complete – https://www.argyll- bute.gov.uk/sites/default/files/2024- 08/Annual%20Procurement%20Report%202023-24.pdf 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) A review of the Licensing Policy is ongoing at the moment with the intention of submitting a report to the meeting of the Licensing Board in September on the outcome of the review. Continued to March 26 – see below 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) The Audit of Cloud Computing Services was completed in May 2024 with a substantial level of assurance. All actions have been completed Further enhance school engagement with national programmes and community partnership approaches supporting young people to build their confidence, increase mental health awareness and promote diversity. (Head of Education, Performance & Improvement – March 2025) Education have engaged in a number of programmes and approaches, e.g., Time for Inclusive Education (TIE), the LGBT Youth Project Charter, the CORRA Foundation to further develop an inclusive curriculum that celebrates diversity, the Rights Respecting Schools programme which raises the profile of rights across our schools, the Mentors in Violence Prevention Programme (MVP) which is a peer mentoring programme that uses and active bystander approach to addressing gender based violence and the ADP School Support Service to provide evidence based, up to date Alcohol and Drugs education to pupils and parents/carers. ISSUES FOR FURTHER DEVELOPMENT The review of governance and internal control has identified the following areas for consideration during 2025/26, particularly in the context of continuous improvement within the Council: • An Internal Audit in Non-Domestic Rates (NDR) has identified that the current appeal process needs to be improved to enhance independent decision making and checking. A new independent panel of managers, separate from Finance, will be
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established to adjudicate on NDR appeals, improving impartiality and robustness of decisions. (Head of Financial Services – March 2026) • The Internal audit of IR35-Off Payroll Working compliance reported assurance as limited. A comprehensive Policy and Procedures drafted for approval. To be implemented 2025-26 in order to minimise any risk to the council. (Head of Financial Services – March 2026) • Further embedding good governance and information management in the MS365 project and the roll out of Teams - Once the business case has been approved for the next stage of the MS365 project and the roll out of teams the service will ensure appropriate governance and information management arrangements are in place. (Head of Legal and Regulatory Support – March 2026) • Financial Recovery – pressures deriving from increasing demand, workforce shortages and reduced real terms funding in Health and Social Care. Plans under development to reduce expenditure and service provision. (Chief Officer – March 2026) • Reduce risk in long term housing supply by identifying long term strategic expansion sites at scale which will create better economies of scale in terms of servicing infrastructure and site de-risking. Produce Strategic Development Frameworks for the two main population and commerce centres, Helensburgh and Oban. (Head of Development and Economic Growth – March 2026) • The Licensing Board will undertake a review of its Licensing Policy Statement as required in terms of the Licensing (Scotland) Act 2005. This will ensure that the Policy Statement continues to reflect the Board’s current practice and policy and is updated as necessary to ensure compliance with the statutory licensing objectives. The review will include an extensive consultation exercise with internal and external partners, agencies and the public. (Head of Legal and Regulatory Support – March 2026) • Ensure continuing improvement in the quality of LTA and pupil learning experiences across all schools. Expanded programme of observation, feedback and support relating to Learning, Teaching and Assessment by the central team for targeted schools. (Head of Education, Performance & Improvement – March 2026). • Strengthen professional learning opportunities for Head Teachers and the Education Central Team in line with the new Leadership Progression Framework. Plan and create a suite of Professional Learning sessions for Head Teachers and system leaders, focusing on key local priorities and involving external partners where possible. Continue to develop the Newly Appointed Head Teacher programme. (Head of Education, Performance & Improvement – March 2026). • Single Authority Model - Continue exploring the potential for a single authority model including elements such health and social care. (Chief Executive March 2026) • Budget Planning - Develop a longer term savings plan enabling a more strategic approach to transformation and service redesign. (Chief Executive March 2026) • Agree option for continuity of waste service following the end of the PPP Contract (Head of Roads and Infrastructure - September 2026). • External residential placements for children - Strengthening the governance arrangements of external placements even further. Monitoring commissioning visits, goals of placements and discharge planning. (Head of Children, Families and Justice - March 2026). • Stabilisation of staffing - Addressing absences and vacancies. (Head of Children, Families and Justice - March 2026). • The council’s Insurers identified an issue around the revaluation of properties for building insurance purposes. A phased approach of revaluations was implemented with General properties for the OLI and B&C areas to be completed in 2025/26 - Estates will complete a revaluation programme for the General portfolio. (Head of Commercial Services - March 2026)
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• Succession Planning - 28% of Property Service staff are 55 or over Succession planning essential to ensure continuity of service provision. (Head of Commercial Services - March 2026) 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.