Reserves and Balances - Updated for Budget Pack 2025-26
Argyll and Bute Council · 20 February 2025
Back to Budget Pack — 20 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 27 FEBRUARY 2025 RESERVES AND BALANCES – UPDATED FOR BUDGET PACK 2025-26 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to advise Members of the overall level of reserves held by the Council as well as providing detail on the monitoring of the earmarked balances held within the General Fund. 1.2 The Council has a total of £400.319m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 1.3 At 31 March 2024 the Council had a total of £121.701m usable reserves. Of this: • £2.763m related to the Repairs and Renewals Fund • £3.197m related to Capital Funds • £115.741m was held in the General Fund with £107.443m of this balance earmarked for specific purposes. 1.4 The Council’s General Fund contingency remains at 2% of net expenditure. This monetary level has been adjusted to take account of the revised net revenue expenditure proposed for 2025-26. The revised contingency of 2% of net expenditure amounts to £6.520m. 1.5 The estimated unallocated General Fund at the end of the financial year is a deficit of £0.283m. It may be that this position is improved if the forecast outturn is better than estimate, however, if the position remains then the Council will be using the General Fund contingency and a recovery plan will need to be put in place in order to bring the continency level back to the 2% agreed policy. 1.6 Assessing the adequacy of reserves should take account of the strategic, operational and financial risks facing the Council and should consider both internal and external factors. There are 20 categories included in the risk analysis and 3 have been assessed as low, 4 low/medium, 6 medium and 7 medium/high. The medium/high risks are in respect of council wide cost risks, funding risks, inflation rates, world events, general financial climate, Health and Social care partnership, and the impact of climate change.
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 27 FEBRUARY 2025 RESERVES AND BALANCES – UPDATED FOR BUDGET PACK 2025-26 2. INTRODUCTION 2.1 This report outlines current balances on all of the Council’s reserves, both usable and unusable. It also provides detail on the monitoring of the earmarked balances within the General Fund. 3. DETAIL 3.1 Types of Reserves 3.1.1 Usable Reserves - Councils have powers to establish certain resource backed reserves which can be used to fund expenditure. The powers of councils to establish reserves are laid out in Schedule 3 of the Local Government (Scotland) Act 1975. These allow councils to establish a Renewal and Repairs Fund, Insurance Fund and Capital Fund. Councils can also establish a Useable Capital Receipts Reserve. The Council must also maintain a General Fund and can earmark balances for specific purposes within the General Fund. 3.1.2 Unusable Reserves – Councils are also required to establish certain reserves that are not backed by resources. They are required purely for accounting purposes and do not represent resources available for councils to utilise. The Pensions Reserve, Revaluation Reserve, Capital Adjustment Account, Financial Instruments Adjustment Account and Accumulated Absences Account fall into this latter category of accounting reserves. 3.2 Reserve Balances at 31 March 2024 3.2.1 The balances on each type of reserve at 31 March 2024 are set out in the two tables below, updated as per the Audited Accounts for 2023-24. Unusable Reserves £000 Revaluation Reserve 180,661 Capital Adjustment Account 249,093 Financial Instruments Adjustment Account (1,585) Pensions Reserve (19,578) Accumulated Absences Account (8,272) Total Unusable Reserves 400,319 Usable Reserves £000 Repairs and Renewals Fund 2,763 Capital Fund and Usable Capital Receipts Reserve 3,197 General Fund 115,741 Total Usable Reserves 121,701 Total Reserves 522,020
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3.2.2 The Revaluation Reserve represents the unrealised gains in the valuation of fixed assets. The Capital Adjustment Account represents the difference between depreciation based on proper accounting practice and statutory charges for financing capital expenditure. The Financial Instruments Adjustment Account represents the difference between gains and losses on borrowing and statutory capital financing charges. The Pensions Reserve represents the difference between pension costs based on proper accounting practice and payments made for pension costs. The Accumulated Absences Account represents the costed difference between holiday pay entitlement and actual holidays taken at 31 March. 3.2.3 The Repairs and Renewals Fund was established to support funding of renewal and replacement of school equipment. Schools can only draw on the Repairs and Renewals Fund to the extent they have previously paid into the Fund and contributions must be contained within schools devolved budgets. 3.2.4 The Capital Fund was established to receive all capital receipts generated by the Council and can be used to support the capital plan or meet the principal repayments on loan charges. The Council decides as part of the budget process each year how it wishes to draw funding from the Capital Fund 3.2.5 The Usable Capital Receipts Reserve relates to the accumulated unspent capital receipts from sale of council houses prior to transfer of the housing stock. The reserve forms part of the Council’s Strategic Housing Fund and can only be used for investment in social housing. The reserve will be used in accordance with the approach to investing in housing agreed by the Council in August 2012. 3.3 General Fund 3.3.1 The General Fund balance at 31 March 2024 can be analysed as follows: Balance 31/03/24 £000 Balance on General Fund as at 31 March 2023 86,356 Increase to General Fund balance at end of 2023-24 29,385 Earmarked Balances (107,443) Contingency allowance at 2% of net expenditure (6,039) Unallocated balance as at 31 March 2024 2,259 * Note that the earmarked balance of £107.443m includes £35.658m of new earmarked reserves relating to the Service Concessions gain as detailed at paragraph 3.6. 3.3.2 The General Fund includes balances that the Council has agreed to earmark for specific purposes. Some of these earmarked balances will be spent during the current financial year and some of them will be held over and spent in later years. The table below shows the balance at 31 March 2024, the new amounts earmarked from the Strathclyde Pension Fund savings (see section 3.7), the
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amount from the revenue budget for Capital agreed at Council in February 2024, the amounts that are currently invested or set aside for major initiatives, the amount already spent and planned to be spent in the current year, the amount to be spent in future years and any sums no longer required to be earmarked. Appendix 1 provides further details on the breakdown of unspent budget earmarkings. Officers have reviewed and updated the spending profiles. 3.3.3 At the council meeting on 26 September 2024, the council agreed to release a total of £1.558m back to the General Fund, to assist with balancing the 2025-26 budget. 3.4 Unallocated General Fund Balance 3.4.1 The Council’s General Fund contingency is set at 2% of net expenditure for 2024-25 and amounts to £6.039m. This contingency is held to provide a working balance to help cushion the impact of uneven cash flows and cushion the impact of unexpected events. It is up to authorities to make their own
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judgement on the level of reserves taking local circumstances into account, for example, previous call on contingency and amount of unallocated reserves held. The contingency needs to be updated to reflect the updated budget for 2025-26. The budgeted net expenditure based on the proposed budget contained within the revenue budget overview report is £325.976m. 2% of this balance amounts to £6.520m. There is currently a contingency of £6.039m, therefore £0.481m will require to be moved from the unallocated General Fund balance to supplement the current contingency. 3.4.2 The revenue budget position as at 31 December 2024 was estimated to be a £4.215m overspend, of which £2.179m relates to Social Work. The Chief Financial Officer of the IJB has now written to the Council to request access to the Strathclyde Pension Fund gain that is held in reserves for the HSCP and therefore it is expected that the Social Work will outturn within budget after applying these reserves. 3.4.3 It was agreed by the Council on 23 November 2024 that a financial resource of £0.025m be transferred to Live Argyll for the provision of staffing at the Corran Halls for the duration of the Royal National Mod. It was agreed that this was to be funded from the unallocated General Fund. 3.4.4 On 24 January 2025 the Council area was impacted by Storm Eowyn and there was damage to some infrastructure as well as trees down incurring damage to roads and footways. At this time it is not known how much the recovery work will cost and we have been in touch with Scottish Government to activate the Bellwin Scheme and the Council’s insurers have been informed in relation to property damage. Even if we are able to access the Bellwin Scheme, the current threshold over and above what it is expected we cover ourselves is £558,200. It will be a number of weeks before we are able to get a cost of the recovery but this could impact the outturn and therefore the estimated unallocated General Fund position. 3.4.5 The table below summarises the position of the unallocated General Fund balance taking into consideration the points noted above. The estimated unallocated General Fund at the end of the financial year is a deficit of £0.283m. It may be that this position is improved if the forecast outturn is better than estimate, however, if the position remains then the Council will be using the General Fund contingency and a recovery plan will need to be put in place in order to bring the continency level back to the 2% agreed policy. Heading Detail £000 Unallocated General Fund as at 31 March 2024 This is the balance that is unallocated over and above the 2% contingency, which amounts to £6.039m 2,259 Current Forecast Outturn for 2024-25 as at 31 December 2024 Per paragraph 3.4.2. (4,215) Social Work outturn adjustment Per paragraph 3.4.2 - Social Work overspend reduced to zero. 2,179
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Earmarked Balances no longer required Per paragraph 3.3.3 – earmarked reserves released to General Fund 1,558 Earmarked Reserves set aside for 2025-26 budget Per paragraph 3.3.3 – will be set aside to use for 2025-26 budget (1,558) Live Argyll for Royal National Mod Per paragraph 3.4.3 (25) Transfer of contingency to maintain 2% level Per paragraph 3.4.1 (481) Estimated Unallocated balance as at 31 March 2025 (283) 3.5 Loans Fund Review 3.5.1 At the Council meeting on 27 February 2020, it was agreed that the one-off re- profiling gain of £20.561m generated by the loans fund review should be used partly to create a provision for the increasing principal repayments over the next 10 years (£7.649m) with the remainder of the gain (£12.912m) used to fund known liabilities/cost pressures. The £12.912m has now been transferred to Earmarked Reserves in full. 3.6 Service Concessions 3.6.1 At the Council meeting on 23 February 2023 it was agreed that the Council adopt the financial flexibility introduced by the Scottish Government relating to Service Concession contracts. This resulted in a one-off retrospective gain of £36.038m. The commitments associated with this were further refined at the Council meeting on 22 February 2024 and it was agreed that £0.380m be transferred into the general fund balance, leaving a one-off gain of £35.658m which is now being held in earmarked reserves. Further, existing earmarkings totalling £2.666m in respect of Rothesay Pavilion have been consolidated with the Service Concessions earmarked resources, for monitoring purposes. Appendix 2 provides information on these commitments, totalling £38.324m. 3.6.2 At the budget meeting on 23 February 2023, the Council established a £7m Priorities Investment Fund to lever in, secure and support key strategic investments in this year and future years. By the budget meeting on 22 February 2024, £0.850m has been committed towards the Housing Emergency, Area Plans and Strategic Development Frameworks, leaving £6.150m. A further £1.028m was then committed towards the capital plan and £0.380m to supplement the Unallocated General Fund Balance leaving £4.742m. Commitments made during 2024-25 were £0.050m for the Clipper Race and £0.944m towards the weather incident costs, leaving a balance of £3.748m remaining in the Fund. 3.7 Spend to Save/Transformation Reserves (SPF Gain) 3.7.1 The Strathclyde Pension Fund (SPF) reported an exceptionally strong set of results with a surplus of almost £9bn which has allowed a reduction in the employer contribution rate. Argyll and Bute Council is seeing a reduction in employer contributions from 19.3% to 6.5% over 2024-25 and 2025-26, before
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reverting to a sustainable long-term rate in the third year of 17.5%. For the Council, the one-off saving in the first two years associated with a reduction to 6.5% is £6.875m per year. On 22 February 2024, the Council agreed to allocate the cumulative gain in the first two years of £13.750m as follows: Description 2024-25 £000 2025-26 £000 Total £000 Realised saving 6,875 6,875 13,750 £2m in 24-25 to balance revenue budget (2,000) (2,000) £3.750m allocation to capital plan (3,750) (3,750) £2m to be directed towards Transformation/ Spend to save projects (1,125) (875) (2,000) £2m in 25-26 to balance revenue budget (2,000) (2,000) £2m in 26-27 to balance revenue budget (2,000) (2,000) £2m allocation to capital plan (2,000) (2,000) 0 0 0 3.7.2 The £6.875m from the 2024-25 revenue budget saving has been logged within the earmarkings with the commitments noted above to allow expenditure to be made against them. 3.7.3 For Social Work, the SPF saving is £3.053m per annum and is being ring fenced within the Council reserves for utilisation by the HSCP in the future. This amount has also being logged within the earmarkings in 2024-25 to allow expenditure to be made against this balance. 3.7.4 As at 31st December 2024, the commitments against the Strathclyde Pensions fund for Transformation/Spend to Save projects are as follows: Description Commitment £000 Data Platform Build Consultancy – to build a data platform which will provide a new approach to how ABC organised and accesses its data to support strategic decision making. 44 RIS Service Review – a report was presented to EDI on 20 June 2024 regarding the need for external support to assist in delivering recommendations from Stage 1 of the RIS Review. 150 Conversational AI – towards an investment in a one-year proof of concept contract to implement Conversational AI across the web, voice and social media channels for the Council. 31 Total Committed 225 3.8 Review and risk Assessments 3.8.1 Assessing the adequacy of reserves should take account of the strategic, operational and financial risks facing the Council and should consider both internal and external factors. Appendix 2 to this report identifies the range of issues in terms of budget assumptions and financial standing and management
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that should be considered in assessing the level of reserves. It relates only to consideration of the contingency to be held in the General Fund balance. A separate financial risk analysis report has been prepared looking at the overall financial risks relating mainly to the revenue budget but notes a couple of risks in respect of the capital budget also. 3.8.2 There are 20 categories included in the risk analysis and 3 have been assessed as low, 4 low/medium, 6 medium and 7 medium/high. The medium/high risks are in respect of council wide cost risks, funding risks, inflation rates, world events, general financial climate, Health and Social care partnership, and the impact of climate change. 3.8.3 Based on the above and taking cognisance of the level of unallocated general fund balance that remains, it is recommended that the contingency for the General Fund balance should be retained at 2%. 4. CONCLUSION 4.1 The report outlines the overall reserves and balances for the Council covering the purpose and level of each reserve. It also provides detail as to expenditure against earmarked balances held within the General Fund. There is currently an estimated use of £0.283m of the contingency balance by the end of 2024-25 financial year which will need to be monitored with a potential recovery plan put in place. Following a review of risk factors, it is recommended that the contingency for the General Fund balance should be retained at 2%. 5. IMPLICATIONS 5.1 Policy Earmarked funds and funds set aside for delivery of Single Outcome Agreement are available to support Council Policy. 5.2 Financial Outlines the balances held with the Council’s usable and unusable reserves. 5.3 Legal None. 5.4 HR None. 5.5 Fairer Scotland Duty See Below 5.5.1 Equalities None 5.5.2 Socio-Economic Duty None 5.5.3 Islands Duty None 5.6 Climate Change None 5.7 Risk A contingency of £6.520m (equivalent to 2% of net expenditure) has been set aside as part of the general fund. This has been subject to a risk assessment. 5.8 Customer Service None. 5.9 The Rights of the Child (UNCRC) None
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Kirsty Flanagan Executive Director/Section 95 Officer 13 February 2025 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES Appendix 1 – Earmarked Reserves breakdown of unspent budget as at 31 December 2024 Appendix 2 – Earmarked Reserves breakdown of Service Concessions earmarking Appendix 3 – Risk Assessment for Review of Reserves For further information contact Carolyn Earl, Head of Financial Services carolyn.earl@argyll-bute.gov.uk
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APPENDIX 1 Earmarked Reserves - Unspent Budget As at 31 December 2024 Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 001 Chief Executive's Unit Community Planning Service Concessions - Priorities Investment Fund (Area Plans) 200,000 86,838 113,162 13,162 100,000 As agreed by Policy and Resources Committee on 23 October 23 - drawdown of £200,000 from the Priorities Investment Fund to fund two temporary posts and associated costs to produce meaningful area plans 100,000 100,000 0 006 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 0 0 0 0 The funds have originated from externally sourced income due to an employee being seconded to the Scottish Community Development Centre (SCDC). The funds will be used to support the team in relation to meeting its priorities of Building Back Better (Communities), Climate Change and the review of the Argyll and Bute Outcome Improvement Plan. This earmarking merged September 24 (per Council Decision) with 003 Community Planning - temp post to support communities. 0 0 0 008 Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 0 0 0 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k, document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k. This balance relates to Estates Survey Work. Having a procured supplier to provide floor plans at short notice is required to be able to react quickly to requests. If this isn't available Estates would need to go through the procurement process again which would delay any projects by several months. There isn’t a detailed plan to use this resource it is more about being able to react quickly and not delay projects. Council agreed September 24 to merge this with 018 Site Investigation works. 0 0 0 009 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 15,200 9,900 5,300 0 5,300 To deliver a number of Digital Service Transformation Projects with a commitment of £0.035m towards a Supply Staff Booking system. Phase 1 of the project is nearing completion. 9,900 5,300 0 010 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 0 1,159,204 0 1,159,204 Agreed at Council meeting February 2020,Unspent Budget Earmarking 010 of £750k additional revenue support subject to conditions which seek to minimise the risk to the Council as far as is reasonably practicable including requirement for adequate business and financial management and regular reporting by RPC. This funding is to support Rothesay Pavilion Charity in the first 2 years of the building being operational. Merged September 24 per Council decision with CHORD earmarking 094 £409k which was about building up a provision towards future Council commitment to provide up to £150,000 per annum running costs for Rothesay Pavilion. 0 1,038,608 120,596 012 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 0 0 0 0 Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. 0 0 0 014 Executive Director (Douglas Hendry) Commercial Services Commercial Investment Manager post and specialist consultant technical resource (previously Asset Management Fund) 104,000 24,758 79,242 79,242 0 The Asset Management Fund has been redirected to Capital going forward but the interest for 2023-24 is to be used towards a Commercial Investment Manager Post. This is because funding of £200k from the Asset Management Fund was agreed at ELT in June 22 for the post, along with specialist consultancy and technical resources that will be required to support early projects. Note, the £104k represents the balance of the £200k commitment. 104,000 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 015 Executive Director (Douglas Hendry) Commercial Services Estates - NDR Revaluation Appeals 59,938 0 59,938 29,969 29,969 The Council agreed to make provision to meet the cost of appealing Non Domestic Rates (NDR) revaluations which were imposed from April 2017. The remaining funds were carried forward to the 2023/24 revaluation cycle however a recent change in position by the Scottish Government may restrict the appeals which can be made. This is still under discussion and Gerald Eve Surveyors have been appointed as specialist advisers on this matter, who are progressing 2023-26 appeals. In the event that appeals are limited there may be an opportunity to utilise Gerald Eve for more general valuation advice subject to Procurement approval. 29,969 29,969 0 016 Executive Director (Douglas Hendry) Commercial Services Mid Argyll Community Pool 30,000 30,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.030m to Mid Argyll Community Pool in response to an external funding request. 30,000 0 0 017 Executive Director (Douglas Hendry) Commercial Services MacTaggart Leisure Islay 30,000 30,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.030m to MacTaggart Leisure, Islay in response to an external funding request. 30,000 0 0 018 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 0 33,710 33,710 0 ER018 24-25 £21k - For Site Investigation works in relation to Tweeddale Street Car Park and Oban Airport Business Park, exploring commercial opportunities to develop the sites and raise revenue income for Argyll and Bute Council. HUB North were instructed to procure contractors to undertake the site investigations these are now complete. The remainder of the budget is intended to be utilised for other site investigation and pre-development works to further develop commercial opportunities across the council area. Agreed by Council September 24 to combine 24-25 ER008 Information Management (Estates Survey Work) - Having a procured supplier to provide floor plans at short notice is required to be able to react quickly to requests. If this isn't available Estates would need to go through the procurement process again which would delay any projects by several months. There isn’t a detailed plan to use this resource it is more about being able to react quickly and not delay projects. 33,710 0 0 021 Executive Director (Douglas Hendry) Education ASN Review 1,255,000 0 1,255,000 565,000 690,000 To fund capital costs of ASN adaptations as part of ASN Review to increase equity of provision across Argyll and Bute. This will be subject to a business case as part of the wider ASN review. Update: Business case now approved and working group set up with quotes for works being carried out. 565,000 690,000 0 024 Executive Director (Douglas Hendry) Education Reduced Teacher Staffing Costs - Strike Action 800,000 800,000 0 0 0 To fund one off savings in 2024-25 from the underspend in staffing from strike action. 800,000 0 0 033 Executive Director (Douglas Hendry) Education (2023 Digital Projects) School WiFi Upgrades 166,924 0 0 0 0 To extend WiFi coverage within school settings through the purchase of additional hardware such as access points, switches and other networking hardware. This will result in more flexible learning spaces and support the growing number of devices within schools. Project now underway and if budget not fully utilised it is hoped that the balance could be diverted to assist with Capital costs of Education Network Paper. 0 0 0 034 Executive Director (Douglas Hendry) Education Education Transformation Fund 144,637 0 0 0 0 At the Council meeting on 27 February 2020, it was agreed to input £400k into Education Digital Learning. The additional funds have been spent in 20/21, 21/22 and 22/23 as part of the ongoing transformation work in the Education service, focussing on digital and virtual learning technology and the development of learning clusters. 0 0 0 036 Executive Director (Douglas Hendry) Education MCR Pathways Pilot 80,000 0 80,000 80,000 0 Funding to support implementation of MCR Pathways mentoring programme within three secondary schools for 2023-24 academic year. Funding will allow the employment of a dedicated Co-ordinator within each setting to develop and implement the programme which is designed to benefit care experienced and other disadvantaged pupils through targeted mentoring support. 80,000 0 0 042 Executive Director (Douglas Hendry) Education Gaelic Specific Grant 30,000 0 30,000 0 30,000 Gaellic Specific Grant £30k - This earmarking refers to the Council contribution towards the Gaelic grant for 22-23 and will fund the costs of Gaelic Language Principal Teacher in 24-25 academic year. 0 30,000 0 043 Executive Director (Douglas Hendry) Education (2023 Digital Projects) Cashless Catering 30,000 4,996 5,004 5,004 0 To support the ongoing implementation of the new cashless catering system during the testing and roll out phase. £20k released back to General Fund Septmber 24 per Council decision as no longer required. 10,000 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 049 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 0 0 0 0 To fund the initial capital costs for the implementation of Skype for Business for Education. This will bring the Education service in line with other council departments and will improve staff collaboration and modernise school telephony to deliver the service more efficiently and cost effectively. 0 0 0 052 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 1,815 0 0 0 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. Balance of £2k released back to General Fund per Council decision September 24 due to the small amount remaining which can be covered by the service. 0 0 0 059 Executive Director (Douglas Hendry) Legal and Regulatory Support Education Purchasing Officers 210,000 0 210,000 0 210,000 The earmarked funds will be used to fund an education purchasing team within the Procurement Service for two years. The team will embed good procurement practice, train headteachers on current procurement process requirements, develop spend plans that evidence best value. 0 210,000 0 061 Executive Director (Douglas Hendry) Legal and Regulatory Support Information Management (Digitalisation of Title Deeds) 92,000 0 92,000 20,500 71,500 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k (delay on spending due to COVID-19), document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 20,500 51,000 20,500 063 Executive Director (Douglas Hendry) Legal and Regulatory Support (2023 Digital Projects) Replacement of Council Chambers Online Meeting Equipment 50,071 5,353 44,718 0 44,718 Current online meeting system is less than resilient and has failed on a number of occasions, leading to issues at strategic committees. A condition assessment by the incumbent maintenance contractor has highlighted that the current equipment is now at end of life and unsupportable due to the obsolescence of the system. Discussions with ICT have taken place to identify a simpler more robust solution to be procured. NUWAY system and maintenance, system installed, ongoing maintenance contract to 2030 5,353 44,718 0 064 Executive Director (Douglas Hendry) Legal and Regulatory Support Councillor IT Equipment 44,557 0 44,557 22,000 22,557 There is currently no budget for the provision and renewal of IT equipment for members. The earmarking identifies a resource to utilise spend for that purpose to ensure that members have continued support in maintaining and replacing vital IT equipment. 22,000 22,557 0 065 Executive Director (Douglas Hendry) Legal and Regulatory Support Digital Projects: Hybrid Council meetings 43,302 12,000 0 0 0 The funding will be used to maintain the ICT equipment used to support the provision of on-line and hybrid Council meetings. Will be used to fund Public-I licence over 3 years - for livestreaming Council meetings. Balance of £31k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 12,000 0 0 066 Executive Director (Douglas Hendry) Legal and Regulatory Support Debt Counselling & Welfare Rights 21,452 5,265 735 735 0 To meet the cost of a Debt Counselling and Welfare Rights Management System. Balance of £15k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 6,000 0 0 067 Executive Director (Douglas Hendry) Non Departmental / Legal and Regulatory Services Community Resilience Fund 71,999 0 5,000 5,000 0 Fund established in 2012/13 to be spent over more than one year. Fund reduced at the Council meeting on 11 February 2016. Used to cover the costs of emergency phone lines and a contract with Aggreko for generators if required in an Emergency Planning/Civil contingencies incident. These costs amount to approximately £5k per year. Balance of £67k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 5,000 0 0 068 Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Increase in Schools Bandwidth) 63,455 0 63,455 0 63,455 To complete one of a number of Digital Service Transformation projects with a commitment of £0.064m to increase Schools Bandwidth. Committed for MS 365 project - D Logan/I Jackson. Paper went to ELT in Dec 24. 0 0 63,455 069 Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Replacement Learning Management System) 11,470 0 11,470 11,470 0 To deliver a number of Digital Service Transformation Projects with an original commitment of £0.030m towards a replacement Learning Management System £0.030m. This money will be used to pay for consultancy for an interface between itrent and totara. Profiled for 24/25 based on decision to do a phased implementation of itrent. 11,470 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 070 Executive Director (Kirsty Flanagan) Across Services / Development and Economic Growth Information Management (Document Management and Workflow for Planning, Building Standards and Environmental Health) 21,177 0 21,177 21,177 0 Hoping to implement the replacement for IDOX in March 2024 but there have been severe issues/delays with the new programme . Dec 24 Project has been scrapped as it was not working. Awaiting procurement to write termination of contract legal documents, until this is completed we will not know if any further cost are due. 21,177 0 0 073 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) iTrent Project 320,555 0 320,555 320,555 0 Combination of parallel running of the new iTrent system alongside the legacy systems for up to 18 months whilst iTrent is implemented and additional staffing resource to implement iTrent in late June 2024 and support staff for the first 3 months of operation through summer 2024. Total includes £73k from Financial services for funding additional staffing resource to implement the payroll components of the iTrent HR and Payroll System by the end of June 2024 and support staff for the first 3 months of operation during summer 2024. 320,555 0 0 075 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 0 69,150 44,000 25,150 Funding earmarked to support trainee development and modern apprenticeship opportunities based on priority workforce risk areas. A Trainee Regulatory Services post has been proposed by the manager who was unable to secure a suitable candidate for the original advert. The spend would be spread over 24/25 and 25/26 once a suitable candidate is in post. Balance of £40k released back to General Fund per Council decision September 24 as only £69k is still required for the intended purpose. 44,000 25,150 0 076 Executive Director (Kirsty Flanagan) Customer Support Services Security Operations Centre Subscription 71,188 0 71,188 0 71,188 There is a requirement to pay for a 3-year subscription at £60,000 per annum with a cost pressure being added to the ICT revenue budget to cover the costs from 2026-27 onwards. 0 71,188 0 077 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Resilient Website Project 60,000 14,000 46,000 0 46,000 Cybersecurity action to move to a cloud based website platform that would improve resilience and enable service continuity in the event of a cyber attack. Procurement in progress for resilient website solution and Scotgov Cloud Services Project providing input. Contract Award expected by end 2023. Procurement in progress for resilient website solution. Contract Award expected FQ1 2024-5. 3 year contract has been awarded to BigBlueDoor. 14k spend 24/25, 23k in 25/26 and 23k in 26/27. 14,000 23,000 23,000 078 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Project Officer 34,121 0 34,121 34,121 0 Employ a temporary Digital Project Officer as part of OD changes - additional member of staff required to action changes, unable to recruit so existing staff increasing hours. 34,121 0 0 079 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 0 30,000 2,000 28,000 Agreed at Council Meeting February 2021. Provision of funding for delivery and implementation of the council’s Gaelic Language Plan in recognition of the contribution that Gaelic makes to economic growth and to the tourism sector, and to enable delivery of key activities within the plan which currently receive no revenue funding. In discussion with Bord na Gaidhlig about a 3-year Gaelic Plan funding programme as opposed to individual grant applications for specific projects. This earmarking would be used to provide match funding for that 3 year programme of projects. 3 year match funding approved December 2024. 2,000 28,000 0 080 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,025 20,397 26,064 -397 26,461 £27k budget from original Business Development Training earmarking 080 remaining at 31/03/24. This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. Agreed by Council September 24 to merge with 24-25 EMR 082 - In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. This money is to support the additional digital learning capacity required to build online elements of AB365 and other key digital learning as we increase our digital learning offering linked to the digital skills survey and review of corporate training. Delays in recruitment meant this has been reprofiled for spend in 24/25. 20,000 26,461 0 082 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 19,436 0 0 0 0 In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. This money is to support the additional digital learning capacity required to build online elements of AB365 and other key digital learning as we increase our digital learning offering linked to the digital skills survey and review of corporate training. Delays in recruitment meant this has been reprofiled for spend in 24/25. Agreed by Council September 24 to merge with 24-25 080 Business Development Training. 0 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 083 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Engagement Services Developer 15,677 13,504 2,173 2,173 0 To fund 50% of a new temporary LGE10 post. The post is a Digital Engagement Services Developer that will be provide capacity to deliver service efficiencies through the use of the new CREATE/RPA software. The other 50% of the post can be funded from a current vacancy. 15,677 0 0 085 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 13,824 0 0 0 0 To facilitate the implementation of technical efficiency improvements and new processes. This money will be used to support phase two of the itrent project. Spend reprofiled for 2024/25 following delays in itrent project. Agreed by Council September 24 to merge this with earmarking 074 Skills Development Scotland. 0 0 0 096 Executive Director (Kirsty Flanagan) Development & Economic Growth Planning Income 60,000 0 60,000 60,000 0 To fund additional resources to support and develop the Council's planning service. Whilst recruitment issues within Argyll and Bute were largely been resolved during 2022/23, the requirement for the operation of the DM Service with reduced staffing levels over an extended period of time, coupled with the increasing demand for development post-Covid, and uncertainty caused by the introduction of National Planning Framework 4 has given rise to a substantial backlog of case work and has had a significant adverse impact on processing times for planning applications. Plans to utilise this on additional staff costs in 24-25 in order to reduce the backlog. Dec 24 draw down likely March 25 60,000 0 0 103 Executive Director (Kirsty Flanagan) Development and Economic Growth Oban TIF (Tax Incremental Financing) 214,158 0 214,158 214,158 0 Will be used to fund the TIF Programme office for a further 3 years as well as the programme office for Rural Growth Deal beyond the funding that was agreed at Council for this in February 2021. 214,158 0 0 105 Executive Director (Kirsty Flanagan) Development and Economic Growth Service Concessions - Priorities Investment Fund (Project Officer for Housing Emergency) 200,000 0 200,000 70,000 130,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £200,000 from the Priorities Investment Fund to fund a Project Officer to assist in accelerating the work of the Housing Emergency. Dec 24 post holder now in place awaiting further instruction from Budget holder 70,000 130,000 0 107 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 41,260 15,100 26,160 26,160 0 At the Council meeting on 25 February 21, a decision was taken to agree £90k funding for Events and Festivals for 22/23, in order that the application process can commence during 21/22 and that this agreed figure be augmented by any underspend remaining from the 20/21 financial year. At 24 February 22, decision made to agree £90k for 23/24, in order that the application process can commence during 22/23 and that this agreed figure be augmented by any underspend remaining from the 21/22 financial year. Applications have been received and payments will be made in 23-24. Final balance (£41,260) to be spent in 24/25 Dec 24 cost to date drwn down 41,260 0 0 112 Executive Director (Kirsty Flanagan) Development and Economic Growth Screen Machine 28,000 0 28,000 28,000 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.028m to Screen Machine in response to an external funding request. Dec 24 Grant offer has now been sent out but payment now not due until Q1 25/26 28,000 0 0 120 Executive Director (Kirsty Flanagan) Development and Economic Growth International Eight Metre Association World Cup 10,000 10,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.010m to the International Eight Metre World Cup in response to an external funding request. 10,000 0 0 124 Executive Director (Kirsty Flanagan) Financial Services Revenue and Benefits BPR - extra staff to implement savings targets 86,955 0 86,955 0 86,955 On 23 February 2023, the Council agreed to the implementation of savings option FIS2324-002 in relation to the Revenue and Benefits - Income Generation and Business Process Review. This included an extra 4 FTE of staff. Delays in recruitment have caused slippage in the allocated budget for these posts. 0 86,955 0 127 Executive Director (Kirsty Flanagan) Financial Services Scotland Loves Local 57,453 57,453 0 0 0 As agreed by Council 22 February 24, a £57,453 underspend from the Scotland Loves Local scheme to be allocated to support measures to help with the costs of living by funding member organisations of the Community Food Forum, ALI Energy, Argyll and Bute Citizens Advice Bureau and Bute Advice Centre, with detailed proposals to be agreed by the Executive Director with responsibility for Finance, in consultation with the Leader, Depute Leader and Leader of the Largest Opposition Group. Details of the agreed spend are to be reported to elected members. 57,453 0 0 129 Executive Director (Kirsty Flanagan) Financial Services Financial Systems 33,748 0 33,748 33,748 0 The council is required to implement the IFRS16 Leases accounting standard from the 1st April 2024. 33,748 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 130 Executive Director (Kirsty Flanagan) Financial Services Accounting and Budgeting Team Resilience 47,883 7,066 40,817 934 39,883 Training and examination fees for 6 staff who are currently undertaking their professional CIPFA/ACCA training. In addition funding the further training of 1 of our auditors and providing finance business partner training to a group of our existing professional staff. 8,000 8,000 31,883 134 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,241,752 108,524 1,356,489 353,855 1,002,634 Waste Variation Monies - £1.242m balance at 31/03/24 (Original EMR134): This will be used to fund/part-fund various waste infrastructure projects that will support the council’s compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste. £462K in 2024-25 consisting of :- Island restoration/capping (£250K Gartbreck completed will be tsf to capital), Helensburgh transfer station, recycling improve. fund (island sites) design costs, recycling campaign publicity, technology trial on blue bin recycling participation, consultancy costs relating to additional monitoring data for SEPA and Consultancy follow on waste options appraisal and recycling campaign material. £993K in 2025-26 consisting of:- Island restoration/capping, Helensburgh transfer station design costs pending outcome of business case, consultancy costs relating to additional monitoring data for SEPA, recycling improve. fund (island sites) design costs and waste PPP site conversion. £10K in 2026-27 consisting of:- consultancy costs relating to additional monitoring data for SEPA. Council agreed to merge with EMR149 September 24 - to be used to assist with the Council's compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste and supporting the overall Waste Strategy. 462,379 992,634 10,000 138 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Priorities Investment Fund (Strategic Development Framework) 450,000 0 450,000 225,000 225,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £450,000 to procure consultancy support to assist in driving forward the Strategic Development Frameworks. 225,000 225,000 0 141 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 287,835 81,158 206,677 7,149 199,528 In November 2018, the Council agreed to a maintenance funding package to be progressed for a number of 3G pitches including Tarbert. This funding will provide an estimated 6.5 years’ worth of ongoing maintenance up to 2025-26. There is the potential to extend the continued upkeep of the pitches until 2026-27 given the earmarking available will not be fully utilised by the end of 2025-26. However, there will be potential redundancy costs for 2 employees that will need to be covered from the remaining balance. Paper on proposed extension to be prepared. 88,307 199,528 0 142 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 140,000 0 140,000 140,000 0 At the Council meeting on 27 February 2020, it was agreed to input £400k in Green transport, investment in footway and cycle path maintenance supporting the healthy wellbeing and green agenda. Spend has been delayed due to COVID and this will be taken forward in 23/24. £260k Footways Reconstruction programme now spent and will be drawn down against capital programme during 23/24. £140k Ardrishaig North Project spent in 22/23 and drawn down in 24/25 (capital expenditure). 140,000 0 0 146 Executive Director (Kirsty Flanagan) Roads & Infrastructure Climate Change 40,942 0 40,942 40,942 0 At the Council meeting on 27 February 2020, it was agreed to input £500k budget to mitigate the impacts of weather related damage and climate change with specific emphasis on gully cleaning and drainage improvements. Spend has been delayed due to COVID and the intention is to spend the funds on 2 Gully Motors plus staff over next 2 years. Vehicles have been received and budget will be drawn down to cover their cost. The remaining budget will be used towards running the vehicles. 40,942 0 0 147 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 0 0 0 0 Delay with introduction of amenity time recording system due to increased costs. Discussions ongoing to find alternative cheaper solution. The software/system being introduced by HR/Payroll during 2023-24 offers a time-recording facility. Although not included in the current HR/Payroll spec, once the new system is up and running, the proposal would be to investigate the time-recording system to see if viable for amenity time recording purposes. Balance released back to General Fund per Council decision September 24 as there is no plan to take this forward and this will be re-assessed following the introduction of the HR/Payroll system. 0 0 0 149 Executive Director (Kirsty Flanagan) Roads & Infrastructure Services (2023 Contract Inflation Adjustments) Waste PPP 223,261 0 0 0 0 Proposal to merge with ref 134, to be used to assist with the Council's compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste and supporting the overall Waste Strategy. Council agreed to merge 134 and 149 September 24. 0 0 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 151 Executive Director (Kirsty Flanagan) Roads and Infrastructure Services Weather Incident costs not covered by Bellwin claim. 198,000 0 198,000 198,000 0 £839k was set aside at budget meeting in February 2024 as part of the unallocated general fund balance workings to cover the weather incident costs not covered by the Bellwin Claim. As £641k was utilised during 23-24, the balance of £0.198m is being earmarked for costs expected in 24-25. 198,000 0 0 154 Non Departmental Non Departmental Service Concessions - Replace previous loans fund principal repayment holiday 5,400,000 0 5,400,000 5,400,000 0 As agreed at Council meeting 23 February 2023 - The one-off retrospective benefit will be used to replace exercising the principal repayment holiday that was previously agreed by Council. 5,400,000 0 0 164 Non Departmental Non Departmental Pay Inflation Contingency 1,700,000 0 1,700,000 1,700,000 0 Negotiations for the 2024/25 pay award are ongoing but initial discussions suggest it will be beyond the 3% increase currently built into the budget outlook. £1.7m equates to approximately a 1% pay rise therefore providing a contingency at this level is prudent 1,700,000 0 0 170 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 0 0 0 0 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion (£1m). At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. 0 0 0 171 Non Departmental Non Departmental Oban TIF (Tax Incremental Financing - Excess NDR) 875,651 0 875,651 0 875,651 This is the surplus NDR after paying all Loans Charges in respect of TIF infrastructure projects. This fund will be used in the future as TIF projects are delivered. Discussions in place on future ff the next TIF project (Oban Airport) which will utilise this reserve. If the project does not go ahead, we will need to return NDR to Scottish Government 0 875,651 0 180 Non Departmental Non Departmental Treasury Gain 294,000 294,000 0 0 0 To fund one off operational saving 202425 003 as agreed by Council when setting 2024/25 budget in February 2024. 294,000 0 0 184 Non Departmental Non Departmental Information Management (Balance of Funding) 200,469 0 200,469 200,469 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. This was the balance of funding to explore information management solutions in a strategic and coherent way £209k. Committed for MS 365 project - D Logan/I Jackson. Paper went to DMT in Dec. 200,469 0 0 186 Non Departmental Non Departmental Engagement with Hub North re provision of services for older adults and vulnerable people across Argyll and Bute 100,000 0 100,000 30,000 70,000 At the Council budget meeting February 23, an allocation of £0.1m from the Unallocated General Fund balance for the Health and Social Care Partnership to engage, in partnership with the Council, with Hub North to develop a strategic business case in relation to the provision of services for older adults and other vulnerable people across Argyll and Bute. It is intended that this will be spent on an on-going business case and options appraisal work with Hub and that a sizable proportion will be spent during 24/25 30,000 70,000 0 187 Non Departmental Non Departmental Spend to Save Route Optimisation Software 82,775 0 82,775 4,800 77,975 One-off re-profiling gain as a result of the loans fund review to fund known liabilities/cost pressures as agreed at budget setting meeting in February 2020. The route optimisation project has been delayed due to staff turnover and absences, recent meetings involving the Council and Routewear have set out future objectives and the project has been extended to 2025-26. 4,800 77,975 0 188 Non Departmental Non Departmental CHARTS 80,000 55,000 25,000 25,000 0 At the Council Budget meeting on 22 February 2024, the Council committed to £0.075m one-off investment in CHARTS in response to an external funding request will be spent in 24-25. There remains £0.005m from a COVID earmarking for CHARTS as well. 80,000 0 0 194a Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£2m to balance 24-25 budget) 2,000,000 0 0 0 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 2,000,000 194b Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£3.75m allocation to capital plan) 0 3,750,000 0 3,750,000 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 0 3,750,000
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 194c Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£2m to be directed to transformation and projects that will save revenue in the future) 0 1,125,000 0 1,125,000 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 1,125,000 195 Non Departmental / Social Work Non Departmental Social Work Strathclyde Pension Fund Saving 24-25 0 3,053,000 0 3,053,000 This is part of the revenue budget for 24-25 and is the saving on Social Work pension budgets resulting from the drop in employers pension rate - to be held in Council reserves for utilisation by the HSCP in future. 3,053,000 196 Non Departmental Non Departmental Capital Plan 0 1,875,000 0 1,875,000 At the budget meeting on 22 February 2024, Council agreed to transfer £1.875m from the revenue budget over to the capital plan. 1,875,000 18,509,179 3,685,312 25,181,764 10,047,636 15,134,128 13,732,948 5,061,694 10,072,434
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APPENDIX 2 Earmarked Reserves - Service Concessions As at 31 December 2024 Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 001 Chief Executive's Unit Community Planning Service Concessions - Priorities Investment Fund (Area Plans) 200,000 86,838 113,162 13,162 100,000 As agreed by Policy and Resources Committee on 23 October 23 - drawdown of £200,000 from the Priorities Investment Fund to fund two temporary posts and associated costs to produce meaningful area plans 100,000 100,000 0 105 Executive Director (Kirsty Flanagan) Development and Economic Growth Service Concessions - Priorities Investment Fund (Project Officer for Housing Emergency) 200,000 0 200,000 70,000 130,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £200,000 from the Priorities Investment Fund to fund a Project Officer to assist in accelerating the work of the Housing Emergency. Dec 24 post holder now in place awaiting further instruction from Budget holder 70,000 130,000 0 133 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Biodegradable Municipal Waste (BMW) Ban 3,500,000 0 3,500,000 0 3,500,000 As agreed at Council meeting 23 February 2023 - Ensuring Argyll and Bute is able to better address the challenges faced by a remote/rural/ island region in complying with the forthcoming national BMW ban. £1.5m earmarked for revenue pressures with £2m for capital projects, mainly a Waste Transfer Station in Helensburgh. 0 3,500,000 0 138 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Priorities Investment Fund (Strategic Development Framework) 450,000 0 450,000 225,000 225,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £450,000 to procure consultancy support to assist in driving forward the Strategic Development Frameworks. 225,000 225,000 0 153 Non Departmental Non Departmental Service Concessions - Learning Estate Investment Strategy 8,000,000 0 8,000,000 0 8,000,000 As agreed at Council meeting 23 February 2023 - Signalling council’s commitment to working in partnership to secure new schools for Argyll and Bute, through substantial investment to support future-proofing of Argyll and Bute’s schools estate. 0 8,000,000 0 154 Non Departmental Non Departmental Service Concessions - Replace previous loans fund principal repayment holiday 5,400,000 0 5,400,000 5,400,000 0 As agreed at Council meeting 23 February 2023 - The one-off retrospective benefit will be used to replace exercising the principal repayment holiday that was previously agreed by Council. 5,400,000 0 0 155 Non Departmental Non Departmental Rothesay Pavilion - Capital Spends (previously service concession) 7,438,400 0 7,438,400 1,000,000 6,438,400 Original earmarking 155 was called Service Concessions - Rothesay Pavilion but renamed to Rothesay Pavilion - Capital spends. At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. ER155 - Service Concessions - Rothesay Pavilion £4.772m - As agreed at Council meeting 23 February 2023 - Building on previous commitments to securing a future for this building of international, national and local significance with additional contribution to the overall funding target which requires collective action; helping project to progress towards success with funding that supports completion of certain work stages and securing wind/watertight status. ER012 - Rothesay Pavilion Essential Repairs £306k - Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. ER167 - Rothesay Pavilion (Recovery and Renewal Fund) - £1.360m- As agreed at Council on 24 February 2022, this is provision for future recovery, regeneration and renewal, as well as any future pressures which may arise following the Covid-19 pandemic through a dedicated Recovery and Renewal Fund. ER170 - Underwriting development of Rothesay Pavilion - Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion (£1m). 1,000,000 6,438,400 0
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Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 156 Non Departmental Non Departmental Service Concessions - Priorities Investment Fund 4,742,000 758,000 3,984,000 0 3,984,000 As agreed at Council meeting 23 February 2023 - Safeguarding future investment in Priorities for Argyll and Bute by making long-term use of service concession gain to establish dedicated fund to lever in, secure and support key strategic investments in this year and future years. The opening balance is £4.742m and commitments made during 2024-25 (not fully drawn down yet) are £0.050m for the Clipper Race and £0.944m towards the weather incident, leaving a balance available that is not already committed of £3.748m. 758,000 3,984,000 0 157 Non Departmental Non Departmental Service Concessions - Roads Investment to Capital 3,546,000 0 3,546,000 0 3,546,000 As agreed at Council meeting 23 February 2023 - Augmenting overall allocation for roads repair and maintenance programme with additional funds to bring up to £8m total investment for 2024/25. 0 3,546,000 0 163 Non Departmental Non Departmental Service Concessions - Capital Projects Inflation Pressures 2,000,000 0 2,000,000 0 2,000,000 As agreed at Council meeting 23 February 2023 -Boosting resilience of Capital Programme and providing added support as required for key capital/infrastructure projects - £2m. Further allocation agreed Council meeting 22 February 24 - increase capital contract earmarking to protect current capital projects in plan £0.297m 0 2,000,000 0 169 Non Departmental Non Departmental Service Concessions - Priorities Investment Fund (Capital Programme) 1,028,000 0 1,028,000 0 1,028,000 As agreed by Council on 22 February 2024- transfer of £1,028,000 from the Priorities Investment Fund to the Capital plan 1,028,000 0 173 Non Departmental Non Departmental Service Concessions - New refuse collection vehicles 700,000 0 700,000 700,000 0 As agreed at Council meeting 23 February 2023 - Enhancing waste and recycling uplift arrangements through placing orders for new refuse vehicles. 700,000 0 0 175 Non Departmental Non Departmental Service Concessions - Climate Change 640,000 27,185 612,815 0 612,815 As agreed at Council meeting 23 February 2023 - Continuing our track record of investing in climate change with funding to further enhance school estate climate change measures, with allocations for primary and secondary schools across the area in Campbeltown, Dunoon, Helensburgh, Lochgilphead, Oban and Rothesay. 27,185 612,815 0 182 Non Departmental Non Departmental Service Concessions - New Jet Patcher Vehicle 250,000 0 250,000 250,000 0 As agreed at Council meeting 23 February 2023 - Complementing multi- million pound capital investment in roads repair and maintenance with new jet patcher order to support delivery of programme. 250,000 0 0 183 Non Departmental Non Departmental Service Concessions - New Road Marking Vehicle 230,000 0 230,000 0 230,000 As agreed at Council meeting 23 February 2023 - Completing suite of investments in new fleet procurement, to support delivery of roads repair and maintenance programme, with order for additional road marking vehicle. 0 230,000 0 38,324,400 872,023 37,452,377 7,658,162 29,794,215 8,530,185 29,794,215 0
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APPENDIX 3 Risk Assessment for Review of Reserves Risk Category Comment Assessment Cost and Demand Pressures As part of maintaining the medium term budgetary outlook, cost and demand pressures for 2025-26 and beyond have been kept under review. The cost and demand pressures for 2025-26 amount to £4.771m for Council services. A general allowance for unidentified cost and demand pressures has been built into the budget outlook for 2026-27 and future years: £0.250m in the best case scenario, £0.500m per annum in the mid- range, and £1m per annum in the worst case scenario. Medium (2024-25 Medium) Service Income Service income levels have been reviewed as part of constructing the budget. In addition fees and charges have been reviewed. Medium (2024-25 Medium) Council Wide Cost Risks The financial risk analysis identified 7 council wide cost risks currently amounting to £8.1m as follows: Description Likelihood Assessed Financial Impact £m Unbudgeted Severe Weather costs 3 2.0 Pay Award exceeding 3% 3 1.8 Energy costs increase by 5% greater than budgeted 3 0.4 IJB refer to Council for additional funding to deliver social work services 3 2.6 1% variation in Council Tax Income 2 0.7 10% shortfall on Savings delivery 2 0.3 Medium/High (2024-25 Medium)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment 10% variation on General Inflation 3 0.3 Total 8.1 Funding Risks The Scottish Budget was announced on 4 December 2024 and the finance circular with the local authority allocations issued on 12 December 2024. After settlement commitments there is an increase to General Revenue Grant of £3.685m for Argyll and Bute Council. The level of increase for 2025-26 was unexpected and it was significant in comparison to previous years, however, it is difficult to suggest that we should assume increases like this in future years. The mid-range scenario has been adjusted to a 0.25% decrease in funding for future years, reflecting the fact that we rely on the floor mechanism which is currently set at 0.75% below the average change in funding. The Cabinet Secretary for Finance and Local Government announced on Tuesday 4 February 2025 that Scottish Government has now agreed to provide an additional £144m to Local Government in respect of Employer’s National Insurance increase (representing funding of 60% of the cost). On 29 November 2024 the Council received a letter from the Department of Environment Food and Rural Affairs (DEFRA) providing our authority’s estimated payment amount of £3.847m. The estimated payment amount is provisional and subject to further review and adjustment with the final allocation confirmed in Autumn 2025. As part of the revenue budget outlook, it is recommended that part of this indicative funding is not committed and is carried forward to 2026-27 until the requirements attached to the funding are clear. Medium/High (2024-25 Medium/High)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment There is a proposed increase to Council Tax of 8.9% to balance the budget. Collection rates remain good at circa 96%. As a result of all issues noted above, this risk has been kept as Medium/High. Savings Risks The 2025-26 budget includes both Operational/Management and Policy savings options, totalling £3.093m. Whilst the council has a good track record in delivering savings, there is a risk that this target will not be fully delivered. Risk remains at medium. Medium (2024-25 Medium) Inflation Rates CPI Inflation was 2.5% in December 2024, a reduction which was largely unexpected by economists. In its Monetary Policy Committee report published in November 2024, the Bank of England reported that it expects CPI inflation to increase slightly during 2025/26 and will hover in the range 2.6% to 2.8% over the year. Given the ongoing challenges facing the UK economy it would be prudent to consider the risk that inflation will be higher than forecast and a Council wide risk has been identified of £0.300m. For 2025-26, despite the overall rate of inflation being forecast to be relatively stable over the year, officers expect that inflationary pressures will continue to be a point of financial pressure throughout the year and Finance staff will work in conjunction with Services to monitor the situation very closely. Medium/High (2024-25 Medium/High) Interest Rates The council’s debt portfolio is largely long term borrowing for capital purposes at fixed interest rates, with a mixed maturity profile, minimising exposure to interest rate risk in terms of interest rate volatility, over future Low (2024-25 Low)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment years. The council holds both short term or temporary borrowing and investment balances to manage day to day cashflow requirements. The treasury position is actively managed to reduce debt interest costs and maximise the return on investments, commensurate with the council’s risk appetite and within the limits of the approved Treasury Management and Annual Investment Strategies. Further, the council continues to hold significant reserve balances, which has allowed the deferral of new external borrowing, in favour of internal borrowing. This is a prudent strategy, where interest rates are forecast to fall across future years, which both provides an opportunity for longer term interest cost savings and minimises investment risk. The council continues to monitor interest rate markets and forecasts and undertakes borrowing and investment decisions based on advice from its treasury advisors, MUFG (formerly Link). Investment risks The authority will aim to achieve the optimum return (yield) on its investments, commensurate with proper levels of security and liquidity. The risk appetite of the council is low, prioritising security and liquidity. In the current economic climate, it is considered appropriate to keep investments short term to cover cash flow needs. Investments are placed with high credit quality financial institutions, using the MUFG suggested creditworthiness approach, including a minimum sovereign credit rating and Credit Default Swap (CDS) overlay information. As outlined above, the level of internal reserve fund balances has provided an opportunity to defer new external borrowing, whilst also minimising exposure to investment risk. Low (2024-25 Low)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment Strategic risks The strategic risk register is subject to a formal review by SMT bi-annually, and these reviews have already taken place in April and October of 2024. SMT have agreed the current actions to address the risks. Medium (2024-25 Medium) Operational risks Operational risks are reviewed formally each quarter by Departmental Management Teams. Any operational risks that are identified as high are reported to the Strategic Management Team as part of the bi-annual review of the Strategic Risk Register. Medium (2024-25 Medium) World Events World events are likely to continue to affect the global economy (Covid pandemic, UK exit from EU, Russian invasion of Ukraine) causing market and price instability through, for example, disruptions to supply chains which lead to delays and reducing the availability of goods and services which increases prices. New Risk Medium/High General financial climate The finance settlement only covers 2025-26 and the Scottish Government is still to meet its commitment to provide a three-year settlement. A prudent approach to estimating income from council tax has been taken. Risks arising from inflation, interest rates, cost pressures and demand led pressures have been outlined above. Due to ongoing uncertainties regarding the level of funding from Scottish Government, the risks to the UK economy and the sensitivity of interest rates to world events, it would be prudent to retain this risk at medium/high. Medium/High (2024-25 Medium/High) Availability of contingency funds The Council had sufficient contingency funds to meet its target. Based on the current forecast outturn and the proposed budget for 2025-26, the Council may enter into contingency. There are significant earmarked reserves and if required, these will be assessed to see if there are any Low/Medium (2024-25 Low)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment further reserves that can be released back to the General Fund. This risk has been updated to low/medium due to the low level of unallocated General Fund. Overall financial standing The Council has managed to achieve its contingency target in previous years. Actual costs are normally contained within budget. Borrowing costs are largely fixed at the moment, as the Council’s need to borrow is currently low due to the high levels of funds it is holding. In addition to the contingency there are significant earmarked funds. Cost and demand pressures are identified and provided for if necessary and the impacts of inflationary changes are continually monitored and adjusted for in the Council’s financial forecasts. Low/Medium (2024-25 Low/Medium) Track record in budget management The Council had a good track record of containing expenditure within budget, however, this year as at the end of December 2024 the Council is forecasting an overspend due to some unforeseen costs. This is subject to change as there are still 3 months of the financial year left and it is expected there will be unbudgeted costs incurred as a result of Storm Eowyn on 24 January 2025. As a result this risk has been increased to Medium. Medium (2024-25 Low) Financial information and reporting arrangements Revenue and capital budgets are monitored on a monthly basis with budget allocated to responsible managers. A risk-based approach is taken to budget monitoring and the budget monitoring process is continually being reviewed to identify ongoing improvements. Low/Medium (2024-25 Low/Medium) Insurance cover The Council has adequate insurance cover. Low (2024-25 Low)
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Risk Assessment for Review of Reserves Risk Category Comment Assessment Internal controls The statement of internal controls identifies a generally adequate control framework although there are areas for improvement. An audit plan is approved and delivered each year to monitor internal controls. The Council’s Audit and Scrutiny Committee continues to actively develop and adopt good practice. Low/Medium (2024-25 Low/Medium) Health and Social Care Partnership Financial Position It is prudent to have a factor in terms of the Health and Social Care Partnership financial position. It is the responsibility of the Chief Officer and Chief Financial Officer to manage the HSCP financial position. If an overspend is forecast, a budget recovery plan will be prepared and submitted to the IJB, the Council and NHS Highland. Where recovery plans are unsuccessful and an overspend occurs at the financial year end, and there are insufficient reserves to meet the overspend, then the partners will be required to make additional payments to the HSCP. The Council would have to contribute towards any overspend related to Social Work. Whilst any additional payments by the Council and NHS Highland will be deducted from future years funding, there is still a financial risk that the Council may have to pay out additional monies in year. The financial situation facing Social Work is extremely challenging due to increases in demand, complexity of cases, increasing costs and difficulty recruiting permanent staff and therefore having to rely on agency staff. At the time of writing this report, the forecast budget for 2025-26 has a £1.3m gap, after accounting for additional contributions from the Council in respect of ENICs and pay award. There also is a risk in respect of commissioned providers ENICs costs which equates to around £1.3m. As a result of these risks, the risk assessment has been increased to Medium/High for 2025-26. Medium/High (2024-25 Medium) Impact of Climate Change Climate change is expected to have an increasingly significant and damaging impact on coastal communities in the West of Scotland with New Risk Medium/High
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Risk Assessment for Review of Reserves Risk Category Comment Assessment changes in sea level and weather patterns, through a combination of more frequent and intense storms, increasing the risk of flooding and damage to homes and infrastructure. With its unique geography, with numerous islands and exposed coastline, Argyll and Bute is especially vulnerable with severe storms in October 2023 and January 2025 causing substantial damage to infrastructure and property and jeopardising the safety of residents. The Councils plays a crucial role in reducing the impact of climate change by implementing sustainable policies, enhancing infrastructure resilience and promoting community awareness.