Public reports pack

Argyll and Bute Council · 9 October 2025
Back to Policy and Resources Committee — 9 October 2025 and its agenda

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Argyll and Bute Council
Comhairle Earra-Ghàidheal Agus Bhòid 
Executive Director:  Douglas Hendry 
Kilmory, Lochgilphead, PA31 8RT
Tel:  01546 605522
DX 599700 LOCHGILPHEAD 
2 October 2025 
NOTICE OF MEETING 
A meeting of the POLICY AND RESOURCES COMMITTEE will be held IN THE COUNCIL
CHAMBER, KILMORY, LOCHGILPHEAD AND BY MICROSOFT TEAMS on THURSDAY, 9
OCTOBER 2025 at 10:30 AM, which you are requested to attend. 
Douglas Hendry
Executive Director 
BUSINESS 
1. APOLOGIES FOR ABSENCE 
2. DECLARATIONS OF INTEREST (IF ANY) 
3. MINUTES (Pages 3 - 10)  
Policy and Resources Committee held on 21 August 2025 
4. FINANCIAL MONITORING OVERVIEW - 31 AUGUST 2025 (Pages 11 - 90)  
Report by Section 95 Officer 
5. BUDGET OUTLOOK 2026-27 TO 2030-31 (Pages 91 - 112)  
Report by Section 95 Officer 
6. FUNDING EXTERNAL BODIES AND FOLLOWING THE PUBLIC POUND - CODE
OF PRACTICE (Pages 113 - 172)  
Report by Section 95 Officer 
7. EMPTY BUSINESS PROPERTY – UPDATE ON BUSINESS GRANT SCHEME
(Pages 173 - 180)  
Report by Executive Director with responsibility for Development and Economic
Growth 
8. LORN ARC TAX INCREMENTAL FINANCE (TIF) UPDATE (Pages 181 - 186)  
Report by Executive Director with responsibility for Development and Economic
Growth 
Public Document Pack

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9. UK SHARED PROSPERITY FUND UPDATE - TO FOLLOW 
Report by Executive Director with responsibility for Development and Economic
Growth 
REPORTS FOR NOTING 
10. POLICY AND RESOURCES COMMITTEE WORKPLAN (Pages 187 - 190) 
Policy and Resources Committee 
Councillor John Armour Councillor Gordon Blair
Councillor Math Campbell-Sturgess Councillor Audrey Forrest (Vice-Chair)
Councillor Kieron Green Councillor Amanda Hampsey
Councillor Mark Irvine Councillor Reeni Kennedy-Boyle
Councillor Jim Lynch (Chair) Councillor Luna Martin
Councillor Liz McCabe Councillor Dougie McFadzean
Councillor Yvonne McNeilly Councillor Ross Moreland
Councillor Gary Mulvaney Councillor Dougie Philand   
Contact: Hazel MacInnes, Senior Committee Officer  Tel:01546 604269

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MINUTES of MEETING of POLICY AND RESOURCES COMMITTEE held ON A HYBRID
BASIS IN THE COUNCIL CHAMBER, KILMORY, LOCHGILPHEAD AND BY MICROSOFT
TEAMS on THURSDAY, 21 AUGUST 2025 
Present: Councillor Jim Lynch (Chair) 
Councillor John Armour
Councillor Math Campbell-Sturgess
Councillor Audrey Forrest
Councillor Kieron Green
Councillor Mark Irvine 
Councillor Luna Martin
Councillor Dougie McFadzean
Councillor Ross Moreland
Councillor Gary Mulvaney 
Attending: Pippa Milne, Chief Executive
Douglas Hendry, Executive Director
Kirsty Flanagan, Executive Director
Carolyn Earl, Interim Head of Financial Services
Fergus Murray, Head of Development and Economic Growth
Ross McLaughlin, Head of Commercial Services
Shona Barton, Governance Manager 
1. APOLOGIES FOR ABSENCE 
Apologies for absence were received from Councillors Amanda Hampsey, Reeni
Kennedy-Boyle, Liz McCabe, Yvonne McNeilly and Dougie Philand. 
2. DECLARATIONS OF INTEREST 
There were no declarations of interest intimated. 
The Chair ruled and the Committee agreed in order to facilitate smooth running of the
agenda, to vary the order of business and to take item 15 as the last item of the meeting. 
This would  allow the Committee to deal with all of the business which could be taken in
public before moving into private session. 
3. MINUTES 
The Minutes of the meeting of the Policy and Resources Committee held on 8 May 2025
were approved as a correct record. 
4. FINANCIAL MONITORING OVERVIEW - 30 JUNE 2025 
The Committee gave consideration to a report providing a summary of the overall financial
position of the Council for 2025-26 as at 30 June 2025. 
Decision 
The Policy and Resources Committee – 
1. noted the revenue budget monitoring report as at 30 June 2025; 
2. noted the capital plan monitoring report as at Quarter 1 and approved the proposed
budget changes to the Capital Plan outlined in paragraphs 4.3 to 4.6 of that report; 
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3. noted the 2025-26 financial risks report; and 
4. noted the reserves and balances report as at 30 June 2025. 
(Reference: Report by Section 95 Officer dated 30 July 2025, submitted) 
5. BUDGET OUTLOOK 2026-27 TO 2030-31 
The Committee gave consideration to a report summarising the Budget Outlook for the 5
year period 2026-27 to 2030-31 and providing an update to the position previously
reported to the Policy and Resources Committee in May 2025. 
Decision 
The Policy and Resources Committee noted the current Budget Outlook position for the
period 2026-27 to 2030-31. 
(Reference: Report by Section 95 Officer dated 31 July 2025, submitted) 
6. PROPOSAL TO REVIEW THE SCHEME FOR THE ESTABLISHMENT OF
COMMUNITY COUNCILS IN ARGYLL AND BUTE: PHASE ONE
FEEDBACK 
The Committee gave consideration to a report providing an update on feedback received
following an 8 week public consultation on the proposals to amend the local Scheme for
the Establishment of Community Councils and suggesting further amendments based on
the feedback received. 
Decision 
The Policy and Resources Committee – 
1. noted the feedback received following the stage one consultation outlined in Appendix
1 to the submitted report; 
2. agreed to carry out a second phase 8-week consultation with the public and
community councils, based on the draft revised Scheme for the Establishment of
Community Councils at Appendix 2 to the submitted report and Best Practice
Agreement at Appendix 3 to the submitted report; and 
3. noted that in terms of the agreed timetable for the review, a further report on the
second stage consultation, including consideration of grant funding, and any final
proposals would be submitted to a specially convened Council meeting on 26
November 2025.   
(Reference: Report by Executive Director with responsibility for Legal and Regulatory
Support dated 11 July 2025, submitted) 
7. CROWN ESTATES FUNDING ALLOCATIONS 2025/26 AND REDIRECTION
OF PREVIOUSLY ALLOCATED PROJECT FUNDING 
The Committee gave consideration to a report bringing forward proposals for the 2025-26
allocation of Crown Estates Funding, recommending a change to funding previously
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agreed for a Building Aires style campervan site in Dunoon (Glen Morag car park) and
recommending a change to the funds allocated for Kintyre Sea Sports (KSS). 
Decision 
The Policy and Resources Committee – 
1. agreed to the allocation of the Crown Estate funding for 2025/26 to the projects
outlined in Table 1, paragraph 4.2.1 of the submitted report; 
2. agreed to varying the use of previously allocated Crown Estate funding assigned to a
now confirmed unviable project Building Aires style campervan site in Dunoon
(Glenmorag Car Park) for a simpler, smarter and more sustainable Aires Project in
Cowal; and 
3. noted the update provided in relation to the planning application for the new Kintyre
Sea Sports facility and approved the revised scope of project activities to be funded
from the £200k of Crown Estates Funding previously approved by the Policy and
Resources Committee in February 2025. 
(Reference: Report by Executive Director with responsibility for Development and
Economic Growth dated 1 July 2025, submitted) 
8. ISLANDS COST CRISIS EMERGENCY FUND 2025/26 
The Committee gave consideration to a report providing an overview of the proposed
arrangements for the Islands Cost Crisis Emergency Fund in 2025/26. 
Decision 
The Policy and Resources Committee – 
1. noted the funding announced by the Scottish Government for the 2025/26 financial year
for Local Authorities with responsibility for islands; and 
2. agreed to the allocation of the Islands Cost Crisis Emergency Fund for 2025/26 to
support the projects set out below:- 
ICCEF 2025/26 Distribution 
Targeting Fuel Poverty with ALI
energy’s Affordable Warmth Service
£120,000
Food Bank Grants  £25,000
TOTAL ICCEF 25/26 £145,000 
(Reference: Report by Executive Director with responsibility for Development and
Economic Growth dated 2 July 2025, submitted) 
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9. PLACE BASED INVESTMENT PROGRAMME FUNDING ALLOCATIONS
2025/26 
The Committee gave consideration to a report advising that the Place Based Investment
Programme Offer of Grant from Scottish Government had been received on 25 June 2025
and had confirmed partial release of funding resulting in a reduction from £496,000 to
£388,368, with the remaining £107,632 subject to the Scottish budget position later in the
year. 
Decision 
The Policy and Resources Committee agreed to the reprioritisation of projects set out in
Table 1, paragraph 3.2 of the submitted report following Scottish Government notification
that this funding would now be received in two tranches. 
(Reference: Report by Executive Director with responsibility for Development and
Economic Growth dated 1 July 2025, submitted) 
10. RURAL GROWTH DEAL - PROJECT DEVELOPMENT COSTS UPDATE 
The Committee gave consideration to a report providing an update on the Rural Growth
Deal (RGD) and specifically costs associated with project development and followed on
from the report presented to the Policy and Resources Committee on 5 December 2024. 
Decision 
The Policy and Resources Committee – 
1. agreed that the Council increase the amount set aside from the Priorities Investment
Fund from £0.700m to £0.850m to cash flow the development costs for the Council,
noting that the cash flow support would be fully paid back by the end of Year 10; and 
2. delegated to the Internal Programme Board (Chief Executive and Executive Directors),
in consultation with the Leader and Depute Leaders to approve pre-development
funding requests relating to Council led projects up to a maximum threshold of 15% of
each project, subject to there being sufficient cash flow available, noting that this was
an increase to the £0.250m threshold agreed in December 2024. 
(Reference: Report by Executive Director with responsibility for Development and
Economic Growth dated 22 July 2025, submitted) 
11. NATURE RESTORATION FUND - PROGRESS TO DATE AND 25/26
SPEND OPTIONS 
The Committee gave consideration to a report providing an update on the Nature
Restoration Fund, the projects previously agreed to be taken forward and proposing
several projects to be delivered in 2025-26. 
Decision 
The Policy and Resources Committee – 
1. noted the progress made regarding the previously agreed allocation of Nature
Restoration Funding in Appendix 1 of the submitted report;
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2. approved the proposed projects in Appendix 2 of the submitted report noting that there
was still a balance of funds to be allocated; and
3. agreed delegated authority to the Executive Directors with responsibility for
Development and Economic Growth and Commercial Services in consultation with the
Policy Leads with responsibility for Planning and Regulatory Services and Climate
Change, Renewables and Net Zero to amend the distribution of this funding in relation
to approved projects in Appendix 2 to the submitted report if considered necessary.
(Reference: Report by Executive Director with responsibility for Development and
Economic Growth and Executive Director with responsibility for Commercial Services
dated 11 July 2025, submitted)
12. CLIMATE CHANGE BOARD - PERFORMANCE REPORT & PUBLIC
SECTOR DUTIES RETURN
The Committee gave consideration to a report providing the Committee with an analysis of
the Council's 2023/24 climate performance, in line with its statutory duties under the
Climate Change (Scotland) Act 2009. The report presented an analysis of the Council’s
most recent emissions data for the 2023/24 period, contextualised with findings from the
analysis of national Public Bodies Climate Change Duties Report prepared by the
Sustainable Scotland Network (SSN). The report provided the committee with an
assessment of the Council’s current performance, enabling informed strategic decisions to
be made to accelerate the Council’s progress towards meeting climate change
commitments.
Decision
The Policy and Resources Committee –
1. noted progress towards net zero and the challenges identified in the Council’s 2023/24
Public Sector Duties Submission which included a 3.8% rise in previous financial year
but 31% reduction overall; and
2. endorsed the strategic priorities outlined to accelerate climate action and ensure
progress towards the Council’s net zero targets.
(Reference: Report by Executive Director with responsibility for Commercial Services
dated 21 August 2025)
13. CLIMATE CHANGE BOARD UPDATE & DECARBONISATION TRACKER
The Committee gave consideration to a report providing an overview and update of recent
activity completed or underway by the Climate Change Board.
Decision
The Policy and Resources Committee –
1. noted the contents of the submitted report and the key implications for the Council
arising from the Scottish Government’s consultation on new statutory guidance for
Public Bodies' Climate Change Duties; and
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2. noted the updates from the Climate Change Board including Drax LED installations,
SG Consultation on draft Statutory Guidance for public bodies, Burnett Building
Climate Adaptation, the Nature Restoration Fund Initiative, the climate change
focussed work of the CPP, and the developments in the Kilmory grounds with ACT. 
(Reference: Report by Executive Director with responsibility for Commercial Services
dated 21 August 2025, submitted) 
14. COMMUNITY EMPOWERMENT (SCOTLAND) ACT 2015 - UPDATE -
EXPRESSIONS OF INTEREST / ASSET TRANSFER REQUESTS /
PARTICIPATION REQUESTS / REPORTING REQUIREMENTS 
The Committee gave consideration to a report advising on the operation of the processes
in regard to formal Asset Transfer Requests (ATR) and Participation Requests in terms of
the Community Empowerment (Scotland) Act 2015; current live informal Expressions of
Interest (EOI’s) which may become subject to a formal asset transfer request or be dealt
with out with the formal asset transfer request process; current live ongoing or agreed
Participation Requests received by the Council; and the annual reporting requirements in
respect of Asset Transfer Requests and Participation Requests set out in Section 95 and
32 of the Community Empowerment (Scotland) Act 2015 respectively. 
Decision 
The Policy and Resources Committee noted the content of the submitted report. 
(Reference: Report by Executive Director with responsibility for Commercial Services
dated 30 June 2025, submitted) 
15. POLICY AND RESOURCES COMMITTEE WORKPLAN 
The Policy and Resources Committee Workplan was before the Committee for noting. 
Decision 
The Policy and Resources Committee noted the content of the Workplan. 
(Reference: Policy and Resources Committee Workplan dated August 2025, submitted) 
The Committee resolved in terms of Section 50(A)(4) of the Local Government (Scotland)
Act 1973 to exclude the press and public for the following item of business on the grounds
that it was likely to involve the disclosure of exempt information as defined in Paragraph 6
of Part 1 of Schedule 7A to the Local Government (Scotland) Act 1973. 
16. KILMORY BUSINESS PARK - COMMERCIAL ESTATE & PORTFOLIO 
The Committee gave consideration to a report advising of an economic development
opportunity in relation to Kilmory Business Park. 
Decision 
The Policy and Resources Committee agreed the recommendations as detailed within the
submitted report. 
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(Reference: Report by Section 95 Officer and Executive Director with responsibility for
Commercial Services dated 29 July 2025, submitted) 
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 09 OCTOBER 2025
FINANCIAL MONITORING OVERVIEW – 31 AUGUST 2025
1. INTRODUCTION
1.1 This report provides a summary of the overall financial position of the council for
2025-26 as at 31 August 2025. It outlines the key highlights from the detailed
financial monitoring reports in respect of the following:
• Revenue Budget;
• Financial Risks; and
• Reserves and Balances.
As previously reported, the Capital Plan Monitoring will now be reported on a
quarterly basis with the Quarter 2 report to 30 September 2025 submitted to the
next Policy and Resources Committee.
2. DETAIL
2.1 Revenue Budget Monitoring Report
2.1.1
2.1.2
2.1.3
This report provides a summary of the actual and forecast outturn expenditure and
income of the council in comparison to the approved 2025-26 revenue budget.
The approved 2025-26 revenue net expenditure budget totals £326.941m. Since
last reporting, the net expenditure budget has been increased by £1.784m to reflect
two Scottish Government General Revenue Grant redeterminations (£0.077m) and
amounts drawn down from earmarked reserve balances (£1.707m). The revised
2025-26 revenue net expenditure budget now totals £328.725m. There are no
budget virements over £200k, requiring committee approval, at this stage.
The recently approved pay award for SJC and Chief Officers is not yet reflected
within the budget monitoring position, however, it is currently anticipated that this
will be funded in full through additional Scottish Government funding, with no
impact on the financial position of the council in 2025-26.
2.1.4 As at 31 August 2025, there is an overall forecast underspend of £0.301m on the
approved revenue budget for the year. This underspend is in respect of a forecast
over-recovery of Council Tax income of £0.500m, offset by a net overspend of
£0.199m across council services.
2.1.5 It is anticipated that savings in debt interest costs will be achieved during the year,
providing an opportunity to redirect resources to future council priorities. At this
stage, it is deemed prudent to assume no variance in the 2025-26 forecast outturn
position.
There is an overspend of £2.230m on the profiled budget to date. However, these
variances mainly relate to the actual timing of income and expenditure, and the
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2.1.6 recharging of costs to capital, in comparison to assumed budget profiles. The main
focus of budget monitoring is the forecast outturn position.
2.1.7 The 2025-26 approved budget savings options, to be achieved in 2025-26, total
£2.762m. There are 15 savings options impacting 2025-26, of which 8 have been
delivered (£1.375m), with the remaining 7 on track to be delivered (£1.387m).
Progress on the delivery of approved savings options will continue to be monitored
throughout the year.
2.1.8 The 2025-26 HSCP forecast outturn position in respect of Social Work services as
at 31 August 2025 is an overspend of £0.668m. However, the HSCP expect this to
be managed from within available HSCP reserves, with no impact on the council’s
forecast financial position. This represents a significant financial risk to the council.
2.2 Financial Risks
2.2.1 This report provides an update on the current known financial risks facing the council
in 2025-26.
2.2.2 There are 7 quantifiable council wide risks identified for 2025-26, with a potential
annual value totalling £5.1m, and with varying degrees of likelihood. In addition,
there are 32 departmental risks, with a potential annual value totalling £4.156m, of
which 5 are categorised as ‘Likely’.
2.2.3 Financial risks are monitored and reviewed on an ongoing basis, with action taken
to mitigate or manage these risks.
2.3 Reserves and Balances
2.3.1 This report summarises the overall level of reserves and balances held by the council
and monitors the use of the earmarked reserves held within the General Fund.
2.3.2 The council has a total of £406.347m unusable reserves that are not backed with
resources. These are required purely for accounting purposes.
2.3.3 As at 31 March 2025, the council held usable reserves, totalling £121.235m,
comprising the following:
• £3.608m Repairs and Renewals Fund;
• £3.358m Capital Funds;
• £1.564m Capital Grants Unapplied; and
• £112.705m General Fund, with £105.161m of this balance earmarked for specific
purposes.
2.3.4 The council’s General Fund contingency is set at 2% of estimated net revenue
expenditure for 2025-26, which amounts to £6.539m. At the beginning of the
financial year, there was an unallocated General Fund Balance of £1.004m over and
above the general contingency.
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2.3.5 The table below summarises the current position on the unallocated General Fund
balance.  
Heading Detail £000
Unallocated General Fund
as at 31 March 2025
This is the balance that is unallocated
over and above the 2% contingency,
which amounts to £6.539m 
1,004
Current Forecast Outturn
for 2025-26 as at 31
August 2025 
Per Revenue Budget Monitoring report 301
Forecast Unallocated General Fund as at 31 March 2026 1,305 
3.  RECOMMENDATIONS 
3.1 It is recommended that the Policy and Resources Committee: 
a) Approve the budget changes set out in Section 3 of the 2025-26 Revenue
Budget Monitoring report; and 
b) Note the content of the 2025-26 Revenue Budget Monitoring, Financial
Risks, and Reserves and Balances reports as at 31 August 2025. 
4. IMPLICATIONS 
4.1 Policy –                                                        None.
4.2 Financial -  Outlines the 2025-26 financial position
of the council as at 31 August 2025.
4.3 Legal -  None.
4.4
4.5
4.6
4.7
HR – 
Customer Service - 
Risk –
Climate Change -
None.
None.
Outlines 2025-26 Financial Risks
None
4.8 Fairer Scotland Duty - None
4.9 Equalities – protected characteristics -  None.
4.10 Consumer Duty - None.
4.11 Island Communities - None.
4.12 Children’s Rights and Wellbeing - None.   
Kirsty Flanagan
Executive Director /Section 95 Officer
09 September 2025 
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services 
For further information contact Carolyn Earl, Interim Head of Financial Services
Carolyn.Earl@argyll-bute.gov.uk
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ARGYLL AND BUTE COUNCIL
FINANCIAL SERVICES
POLICY AND RESOURCES COMMITTEE
09 OCTOBER 2025
2025-26 REVENUE BUDGET MONITORING – 31 AUGUST 2025
1 EXECUTIVE SUMMARY
1.1 The main purpose of this report is to provide a summary of the financial
performance of the council against the approved 2025-26 revenue budget as at
31 August 2025.  It reports on the monitoring of forecast net expenditure across
services, in comparison to the approved annual budget, and provides an
explanation of significant variances.  Details of actual expenditure incurred during
2025-26 to date are also provided.  The report reflects proper accounting practice,
and is based on information contained within the council’s financial systems,
estimation techniques and the professional judgement of council officers.
1.2
1.3
The approved 2025-26 revenue net expenditure budget totals £326.941m. Since
last reporting, the net expenditure budget has been increased by £1.784m to
reflect two Scottish Government General Revenue Grant redeterminations
(£0.077m) and amounts drawn down from earmarked reserve balances
(£1.707m).  The revised 2025-26 revenue net expenditure budget now totals
£328.725m.  There are no budget virements over £200k, requiring committee
approval, at this stage.
The recently approved pay award for SJC and Chief Officers is not yet reflected
within the budget monitoring position, however, it is currently anticipated that this
will be funded in full through additional Scottish Government funding, with no
impact on the financial position of the council in 2025-26.
1.4
1.5
1.6
Overall, there is a forecast underspend of £0.301m for the year on the council’s
approved 2025-26 revenue budget.  This is due to a forecast over-recovery of
Council Tax income, currently estimated at £0.500m; offset by a net overspend
across services, totalling £0.199m. 
There are forecast net overspends totalling £0.183m across the Executive
Directorate (Douglas Hendry) and £0.016m across the Executive Directorate
(Kirsty Flanagan).  This position will be monitored and reviewed on an ongoing
basis, with regular updates reported to committee throughout the year.  
The 2025-26 revenue budget includes approved savings totalling £2.762m.  At
this stage, all approved savings have either been delivered or are on track to be
delivered.  Progress on delivery will continue to be monitored throughout the year.
1.7
1.8
The HSCP is currently forecasting an overspend of £0.668m in respect of Social
Work services.  However, the HSCP expect this to be managed from within
existing HSCP reserves, with no impact on the council’s forecast position for the
year.  This represents a significant financial risk to the council.
There are a number of financial risks, which may impact the financial position of
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the council during 2025-26.  These are outlined in a separate financial risks
report. 
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ARGYLL AND BUTE COUNCIL
FINANCIAL SERVICES
POLICY AND RESOURCES COMMITTEE
09 OCTOBER 2025
2025-26 REVENUE BUDGET MONITORING – 31 AUGUST 2025  
2. INTRODUCTION 
2.1 
2.2
The main purpose of this report is to provide a summary of the financial
performance of the council against the approved 2025-26 revenue budget as at
31 August 2025.  It reports on the monitoring of forecast net expenditure across
services, in comparison to the approved annual budget, and provides an
explanation of significant variances.  Details of actual expenditure incurred during
2025-26 to date are also provided.   
The report has been prepared in accordance with proper accounting practice. 
Financial forecasts are based on information contained within the council’s
financial systems, estimation techniques and the professional judgement of
council officers. 
3. BUDGET CHANGES 
3.1 
3.2 
3.3
The original approved 2025-26 revenue net expenditure budget totalled
£326.941m.  Since last reporting, the net expenditure budget has been increased
by £1.784m to reflect two Scottish Government General Revenue Grant
redeterminations, totalling £0.077m (Child Poverty Co-Ordinator Funding of
£0.063m and Funding for Holiday Playschemes and Activities for Disabled
Children of £0.014m); and amounts drawn down from earmarked reserve
balances, totalling £1.707m. The revised 2025-26 revenue net expenditure budget
now totals £328.725m. 
Virement is the process of transferring budget between cost centres, services or
departments or between capital projects.  The Council’s constitution requires
member approval of budget virements over £200k. There are no budget virements
over £200k, requiring committee approval, at this stage. 
The 2025-26 budget included a 3% pay award assumption across all workforce
categories, at all grades, based on the Public Sector Pay Policy of 9% over the 3
years 2025-26 to 2027-28.  The pay award for SJC and Chief Officers has now
been agreed at 4% for 2025-26 and 3.5% for 2026-27.  Negotiations in respect of
the pay award for teachers have not yet concluded, however, at this stage, the
expectation is that the increased cost of the 2025-26 pay award for all council and
HSCP Social Work services employees will be fully funded from additional
Scottish Government grant funding, with no impact on the financial position of the
council in 2025-26.  This has not yet been reflected within the budget monitoring
position and will remain subject to financial risk until conclusion of the Teachers
pay negotiations and confirmation of additional funding. 
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4. 
4.1 
4.1.1 
4.2 
4.2.1 
4.2.2 
4.3 
4.3.1 
4.3.2 
SUMMARY FINANCIAL POSITION 
2025-26 Overall Council Financial Position 
There is currently an overall forecast underspend of £0.301m or 0.1% for the year
on the council’s approved 2025-26 revenue budget.  This is due to a forecast
over-recovery in respect of Council Tax income (£0.500m), partially offset by a net
overspend across council services (£0.199m).  A summary of the forecast net
expenditure for the year, in comparison to the approved budget, both on a
departmental and subjective basis, is outlined within Appendix 1.  This also
provides information in respect of council-wide operational challenges and
proposed mitigating actions. 
Council Services Net Expenditure 
At this stage, departments are forecasting a net overspend compared to approved
budgets.  Executive Director (Douglas Hendry) is forecasting an overspend of
£0.183m and Executive Director (Kirsty Flanagan) is forecasting a net overspend
of £0.016m.  This position will be monitored and reviewed on an ongoing basis,
with regular updates reported to committee throughout the year. 
A more detailed analysis of the financial position at service level is given within
Appendix 2.  This also provides information in respect of service specific
operational challenges and proposed mitigating actions. 
Loans Fund 
The council’s treasury position is actively managed in line with the approved
2025-26 Treasury Management Strategy and Annual Investment Strategy, in
order to minimise debt interest costs.  In addition, as at 31 March 2025, the
council’s external borrowing was below the level required to finance capital
investment.  It had been possible to defer new external borrowing due to the
significant level of internal reserve balances held by the council.  This position will
be impacted by the planned use of earmarked reserves in 2025-26, however, it is
expected to continue to some extent throughout 2025-26.  Furthermore, there has
been slippage experienced in the delivery of the approved capital programme. 
These factors will impact the net financing costs incurred during the year. 
A review of the current Loans Fund and projected debt position of the council is
recommended, to highlight potential opportunities within the existing budget for
recurring or one-off savings, or the capacity to meet future capital investment
priorities, such as the LEIP school.  This will be progressed under the wider
review of capital arrangements, approved as part of the 2025-26 revenue budget,
to be undertaken during 2025-26.  A report on this review will be submitted to
members later in the year.  At this stage, it is deemed prudent to assume that any
potential budget underspend will be redirected to future council priorities, which
may include a contribution to the 2026-27 forecast budget gap, with no impact on
the revenue budget position in 2025-26.   
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4.4
4.4.1
4.4.2
4.4.3
4.5
4.5.1
4.5.2
Council Funding
Council Tax
A more sophisticated financial modelling tool has been developed to assist with
Council Tax income projections for 2025-26 and future years.  The forecast level
of Council Tax income is based on current and forecast Band D equivalents, and
reflects actual collection levels to date; and projected levels for the remainder of
the year, based on historical payment profile and collection rate data. 
There is a forecast over-recovery of Council Tax income for the year, in
comparison to the approved annual budget of £70.204m.  This is currently
estimated at £0.500m or 0.7% but will be subject to ongoing review and
refinement, as the year progresses.   
The 2024-25 final outturn included additional Council Tax income of £1.234m in
respect of 2024-25 and prior years, an element of which was expected to be
recurring in 2025-26 and future years.  A significant element of this additional
income (some £0.5m) related to the reclassification of self-catering units as
domestic dwellings by the Assessor, following completion of both the 2022-23 and
2023-24 canvasses during the year, which saw the transfer of properties from the
Non-domestic Rates to Council Tax registers.  There is a significant level of
uncertainty in respect of the regulatory environment in this respect, with a risk of
appeals being granted and properties returning to Non-domestic Rates.  This
uncertainty in respect of both timing and financial value, presents an added
element of complexity in respect of Council Tax income projections.  The financial
risk in this respect will be subject to ongoing review throughout the year with
regular updates provided as part of the separate financial risks report.
HSCP Financial Position
In respect of the Health and Social Care Partnership (HSCP), 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, Argyll and Bute Council and NHS Highland. 
Where recovery plans are unsuccessful and an overspend occurs at the financial
year end, and the HSCP has insufficient reserves to meet the overspend, then the
partners will be required to make additional payments to the HSCP.  The council’s
contribution would reflect the element of the overspend related to Social Work. 
Whilst any additional payments by the council and NHS Highland will be deducted
from future years funding, there is a risk that the council may require to make an
additional unbudgeted contribution to the HSCP during the year.  
As at 31 August 2025, the HSCP is forecasting an overspend of £0.668m for the
year in respect of Social Work services, due to demand for residential placements
within both Children and Families and Older People Services.  However, the
HSCP expect this to be managed from within available HSCP reserves, with no
impact on the council’s forecast financial position.  This represents a significant
financial risk to the council.  The financial position of the HSCP in respect of
Social Work services will continue to be monitored on an ongoing basis
throughout the year.
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4.6 
4.6.1 
4.7 
4.7.1
2025-26 Year to Date Financial Position 
Actual services net expenditure incurred during the year to date totals £113.855m. 
This indicates an overspend of £2.230m in comparison to the current profiled
budget to 31 August 2025.  However, the year to date variances within services
largely relate to the timing of income and expenditure, and outstanding recharges
to capital projects.  Further detailed information in respect of the year to date
position is included at summary level within Appendix 1 and at service level within
Appendix 2. 
Approved Revenue Budget Savings 
The 2025-26 revenue budget includes approved Operational/Management and
Policy savings totalling £2.762m.  The delivery of these savings will be monitored
throughout the year, with progress updates regularly reported to committee.  A
summary of the position as at 31 August 2025 is provided within Appendix 3.  At
this stage all approved savings are either delivered (£1.375m) or on track to be
delivered (£1.387m).  
5. 
5.1 
FINANCIAL RISKS 
Financial risks are monitored and reviewed on an ongoing basis, with actions put
in place to continue to mitigate or manage these risks.  There are a number of
both council-wide and service specific financial risks, which may impact the
financial position of the council during 2025-26.  These are outlined in a separate
financial risks report.   
6. CONCLUSION 
6.1 This report summarises the financial performance of the council in respect of the
approved 2025-26 revenue budget as at 31 August 2025. 
7. IMPLICATIONS 
7.1 Policy - None.
7.2 Financial -  Outlines the financial position of the council in respect of
the approved 2025-26 revenue budget. 
7.3 Legal -  None.
7.4 HR -  None.
7.5 Customer Service - None.
7.6 Risk -  Details of Financial Risks are Separately Reported.
7.7 Climate Change -  None.
7.8 Fairer Scotland Duty - None.
7.9 Equalities – Protected
Characteristics - 
None.
7.10 Consumer Duty-  None. 
7.11 Island Communities - None.
7.12 Children’s Rights and
Wellbeing -  None. 
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Kirsty Flanagan
Executive Director/Section 95 Officer
09 September 2025 
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services 
APPENDICES
Appendix 1 – Summary Financial Position as at 31 August 2025
Appendix 2 – Services Financial Position as at 31 August 2025
Appendix 3 – Approved 2025-26 Revenue Budget Savings 
For further information contact Carolyn Earl, Interim Head of Financial Services
Carolyn.Earl@argyll-bute.gov.uk 
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FINANCIAL POSITION AS AT 31 AUGUST 2025 Appendix 1 
OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2025  
YEAR TO DATE (YTD) POSITION CURRENT PROJECTED FINAL OUTTURN
YTD
Actual
YTD
Budget
YTD
Variance
Variance Annual
Budget
Forecast
Outturn
Forecast
Variance
Variance
£'000 £'000 £'000 % £'000 £'000 £'000 %
Departmental Budgets                
Chief Executive's Unit 394 378 (16) (4.2%) 1,241 1,241 0 0.0%
Executive Director (Douglas Hendry) 63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%)
Executive Director (Kirsty Flanagan) 25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%)
Social Work 21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0%
Total Departmental Budgets 110,848 105,793 (5,055) (4.8%) 304,543 304,742 (199) (0.1%)
Central Budgets  
Other Operating Income and
Expenditure (3,857) 803 4,660 580.3% 3,670 3,670 0 0.0%
Joint Boards 698 636 (62) (9.8%) 1,525 1,525 0 0.0%
Non-Controllable Costs 6,166 4,393 (1,773) (40.4%) 18,987 18,987 0 0.0%
Total Central Budgets 3,007 5,832 2,825 48.4% 24,182 24,182 0 0.0%
TOTAL NET EXPENDITURE 113,855 111,625 (2,230) (2.0%) 328,725 328,924 (199) (0.1%)
Financed By  
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Scottish Government Grant Funding (111,655) (111,655) 0 0.0% (264,288) (264,288) 0 0.0%
Local Tax Requirement (35,475) (35,475) 0 0.0% (70,204) (70,704) 500 (0.7%)
Contributions to General Fund 0 0 0 0.0% 5,306 5,306 0 0.0%
Earmarked Reserves 0 0 0 0.0% 461 461 0 0.0%
Total Funding (147,130) (147,130) 0 0.0% (328,725) (329,225) 500 (0.2%)
(Deficit)/Surplus for Period (33,275) (35,505) (2,230)   0 (301) 301 0.1%         
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2025 
YEAR TO DATE (YTD) POSITION CURRENT PROJECTED FINAL OUTTURN  
YTD
Actual
YTD
Budget
YTD
Variance
Variance Annual
Budget
Forecast
Outturn
Forecast
Variance
Variance  
£'000 £'000 £'000 % £'000 £'000 £'000 %
Subjective Category                
Employee Expenses 77,284 78,165 882 1.1% 206,518 206,116 402 0.2%
Premises Related Expenditure 10,222 9,893 (329) (3.3%) 23,394 23,394 0 0.0%
Supplies and Services 12,795 11,803 (992) (8.4%) 28,216 28,236 (20) (0.1%)
Transport Related Expenditure 6,603 5,455 (1,148) (21.0%) 19,068 19,068 0 0.0%
Third Party Payments 74,046 77,148 3,101 4.0% 194,241 194,977 (736) (0.4%)
Capital Financing 801 (2,025) (2,826)   11,356 11,356 0 0.0%
TOTAL EXPENDITURE 181,751 180,439 (1,312) (0.7%) 482,793 483,147 (354) (0.1%)
Income (215,026) (215,944) (918) 0.4% (482,793) (483,448) 655 (0.1%)
(Deficit)/Surplus for Period (33,275) (35,505) (2,230)   0 (301) 301   
Notes
YTD represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
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Key Financial Challenges Proposed Actions to address Financial Challenges
Addressing service demand/expectation and the increasing challenges
facing departments across the council in relation to the recruitment and
retention of suitably qualified and experienced staff.
Engagement and monitoring of both issues with departments to
assess how these challenges are affecting service capacity and
capability, staff attendance, utilisation of agency staff and costs.
Collaboration with services and other back-office teams to consider
and develop mitigating actions.
Achieving a favourable year-end position and achieving savings targets
in light of council wide risks to expenditure. 
Robust monitoring of the financial position and delivery of savings to
ensure budget issues inform the budget monitoring process.
Identifying further savings and delivering services more efficiently with
less resources, as whilst a balanced 2025-26 budget was agreed in
February 2025 there are still significant budget gaps in future years.
The council will continue to progress savings options identified, refine
options that require further development and seek to identify further
savings through themed reviews and business process reviews. A
longer-term approach is being explored with the intention to develop
a pipeline of savings that can be delivered over a number of years.
Maintaining or improving the level of service income recovered, for
example planning, building standards and car parking. 
Actively monitor income recovery and ensure council fees and
charges policies are regularly reviewed. 
Managing spend in service areas which are demand led and, to some
extent, outwith service control, for example Winter Maintenance. 
Use a risk-based approach to budget monitoring to focus additional
attention on these areas.
Ongoing requirement to fund unavoidable inflationary increases in areas
like utility costs, fuel, food etc. 
Ensure emerging issues are highlighted as soon as possible so that
the financial impact can be evaluated and reported through the
budget monitoring and preparation processes. 
Future ongoing impact on revenue budgets as a result of the delivery of
substantial capital projects such as Rothesay Pavilion and a new school
on Mull.
Ensure costs are identified and reported on early in the process so
Members are aware of the ongoing financial impact to budgets.
Monitor and report on these regularly as part of the routine budget
monitoring once the projects are complete.
Delivery of climate change measures which can be costly and result in
overspends.
The council will look at financially sustainable options and closely
monitor the impact of these on the budget position. 
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CHIEF EXECUTIVE’S UNIT – AS AT 31 AUGUST 2025 
The department is currently forecasting spend in line with budget. 
The department has a year to date underspend of £0.016m (4.2%) which can be attributed to budget profiling issues. 
Forecast Outturn Position 
Service Annual
Budget
£000
Forecast
Outturn
£000
Current
Forecast
Variance
(Aug)
£000
Previous
Forecast
Variance
Reported
to P&R
(Jun)
£000
Change
£000
Chief Executive 1,241 1,241 0 0 0
Totals 1,241 1,241 0 0 0
Year to Date Position 
Key Financial Successes: 
• All savings options have been delivered. 
• The department’s 2024-25 outturn position was an underspend of £0.020m. This resulted from an overall underspend of £0.055m offset
by earmarking of £0.035m due to an auto-carry forward for unspent grants. 
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CHIEF EXECUTIVE’S UNIT – AS AT 31 AUGUST 2025 
Key Financial Challenges: Proposed Actions to address Financial Challenges:
To continue to deliver a high-quality service to support community
engagement and participation.
Regular monitoring, reflection and improvement cycle on service
provision to ensure most efficient use of staffing and financial
resources to meet national and local policy requirements for quality
engagement.
To continue to deliver a high quality support service function to community
organisations and community planning partners during a time of challenge
arising from continuing reductions in funding.
Within the partnership working of the CPP we seek to establish
working groups and collate resources within this to deliver high
quality solutions to identified needs.
Demands for funding from community applications to the Supporting
Communities Fund higher than available annual funds by about 40%.
Continue to monitor fund criteria adapting this to align with priority
outcomes for Argyll & Bute and continue to support groups to seek
alternative sources of funding from our database of funding
providers. 
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Service Area YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Chief Executive 194 186 (8) (4.3%) 511 511 0 0.0% Outwith reporting criteria.
Community Planning
& Development 200 192 (8) (4.2%) 730 730 0 0.0% Outwith reporting criteria.  
394 378 (16) (4.2%) 1,241 1,241 0 0.0%   
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%. 
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CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Subjective
Category
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Employee 436 412 (24) (5.8%) 1,096 1,096 0 0.0% The variance is profile related and will be refined
later in the year.
Supplies and
Services 18 15 (3) (20.0%) 22 22 0 0.0% The variance is profile related and will be refined
later in the year.
Transport 5 6 1 16.7% 15 15 0 0.0% The variance is profile related and will be refined
later in the year.
Third Party 26 29 3 10.3% 200 200 0 0.0% The variance is profile related and will be refined
later in the year.
Income (91) (84) 7 (8.3%) (91) (91) 0 0.0% Outwith reporting criteria.
Totals 394 378 (16) (4.2%) 1,242 1,242 0 0.0%
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year.
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025  
The department is currently forecasting an overspend position of £0.183m (0.1%) due to the Schools Residential Budget having a higher
demand for placements than budget allows, partially offset by slippage in the Education 100 day promise budget due to delays in recruitment.  
The department has a year to date (YTD) underspend of £0.554m (0.9%).  This is mainly due to slippage in 100 day promise funding, due to
delays in recruitment and the current budget profile, which will be refined through September.  This is partially offset due to the above noted
pressure on the Schools Residential Budget.                          
Forecast Outturn Position 
Service Annual
Budget 
£000
Forecast
Outturn 
£000
Current
Forecast
Variance
(Aug) 
£000
Previous
Forecast
Variance
Reported
to P&R
(Jul) 
£000
Change 
£000
Executive Director
(Douglas Hendry) 195 195 0 0 0
Head of
Commercial
Services
10,595 10,595 0 0 0
Head of Education 126,931 127,114 (183) 0 (183)
Head of Legal and
Regulatory
Support
21,471 21,471 0 0 0
Totals 159,192 159,375 (183) 0 (183) 
Year to Date Position 
0%
25%
50%
75%
100%
Executive Director
(Douglas Hendry)
Head of Commercial
Services
Head of Education Head of Legal and
Regulatory Support
Expenditure to date against the remaining budget for each
Service
YTD
Actual
£000
Remaining Budget
£000
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025
Key Financial Successes:
The 2024-25 year-end consolidated outturn position was an under spend of £0.767m after adjusting for automatic earmarking. Contributing
factors included:
• Continuation of NDEEF and expansion of CEEF projects resulting in recurring annual saving in utilities and a significant contribution to
meeting net zero targets.
• Received funding from DRAX for energy saving lighting in 7 schools, located in the area surrounding Cruachan Power Station, to the
value of £148.8k, with potential for further funding.
• Further rationalisation of office space through Our Modern Workspace Programme has reduced utility costs, printer costs and cleaning
costs as well as receiving Non-Domestic Rates relief for closed buildings.
• Income generation within Early Years, including expansion at Rothesay Joint Campus to accommodate care for children under the age
of 2.
• Successful grant applications to Bord na Gaidlig and Armed Forces Covenant Grant for Early Years.
• Effective contract management of NPDO and Hub School contracts, including a lower-than-expected insurance premium due to the
annual renegotiation of insurance costs.
• Successful funding awards have enabled the Welfare Rights Team to expand its service. In 2024-25 the whole team have helped
residents of Argyll and Bute claim £4.45m in additional benefits that they were entitled to. The support is targeted at some of the most
vulnerable in our communities and makes a significant difference to families and individuals both financially and to their overall health
and wellbeing.
Key Financial Challenges: Proposed Actions to address Financial Challenges:
The legacy impact of COVID-19 on our young learners has led to an
increased demand on the additional support need functions of the
Education Service in response to the growing health and wellbeing
needs of our young people and their families. This annual increase in
assessed need is consistent across Scotland.
Continuous analysis and review of delivery models, robust costings
of agreed changes to the current delivery model being
implemented in August 2025 and continual monitoring of
associated budgets. Maximise use of Additional Support for
Learning Funding and Mental Health and Wellbeing Funding whilst
working collaboratively across Children’s Services.
Impact of the current cost of living crisis on the cost of the school day for
learners and their families.
Collaborate with schools to ensure effective use of Strategic Equity
Funding, Pupil Equity Funding and SG Core Curriculum funding to
close the poverty related attainment gap and identify other multi
agency funding sources to ensure equity of experience for all
children.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025
Impact of the current cost of living crisis on uptake in demand led service
areas like catering, design services and licensing.
Continually refine/develop systems to accurately forecast service
usage, budget outturn and future budget requirements. Strategies
in place to redesign services in line with demand.
Reductions to Capital Funding and rising cost of statutory and regulatory
work along with rising material and labour costs across departments may
result in a reduction in activity or overspends within the Central Repairs
Budgets.
Costs are monitored regularly and contained as much as possible
with any unavoidable overspends highlighted as soon as known,
regular meetings with Property Services.
Ensure that the School Catering Service remains efficient and effective
as the requirement to comply with the Statutory Guidance supporting
Nutritional Requirements for Food and Drink in Schools (Scotland)
Regulations 2020, has increased the cost of producing a school meal.
Continue working with finance to review the efficiency of the
service, through good procurement of supplies and the use of a
school meal pre order app that reduces food waste. Produce meals
that pupils want to eat through regular consultation and a range of
menu choices.
The Council has a requirement to deliver 1140 hours of Early Learning
and Childcare (ELC) to eligible 2-year-olds and all 3–5-year-old children.
Following several years of reduced funding and a requirement to set a
sustainable hourly rate for our valued partner providers, the service must
continually redesign to fit the resources available.
Robust service costings, financial monitoring and timely reporting
to ensure the service can be delivered within the available budget.
Medium to longer term forecasting on population to shape ongoing
service redesign. Analysis of potential to extend income generation
using “spare” capacity to expand paid care for under 2’s
Impact of high inflationary uplifts within the NPDO/HUB School contracts. Ensuring continued effective contract management of NPDO/HUB
Schools to minimise the impact of high inflationary uplifts.
The Scottish Government has increased the amount of ringfenced
Education funding. This funding is dependent on maintaining teacher
numbers to a set level. Additionally, Councils have been asked to make
progress towards reduced teacher class contact time.
Monitor teacher numbers and associated costs, highlighting any
budget pressures or potential penalties should staffing levels fall
below target. Collaboration with the Education Service to prepare
robust costings for the impact of any reduction in teacher class
contact time.
The demand for residential school placements for our children is growing
and the costs for this service have had higher than budgeted inflation
due to a reduction in Government financial assistance for Grant Aided
Special Schools (GASS), impact of changes to National Insurance and
commitment for providers to pay real living wage. These placements are
jointly funded by Education and Social Work.
Monitoring of placements and costs, collaborative working with
other services to ensure that decisions are taken jointly by all
services and all options have been considered and costed.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Service Service Area
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Executive
Director
(Douglas
Hendry)
Central/Management
Costs
282 181 (101) (55.8%) 195 195 0 0.0% The YTD overspend variance is
due to costs of the Education
Review and some Storm Eowyn
Costs for repairs to Council
Properties.  The variance will be
rectified through draw down from
an earmarked reserve.    
282 181 (101) (55.8%) 195 195 0 0.0%  
Head of
Commercial
Services
Catering (182) (164) 18 (11.0%) 564 564 0 0.0% The YTD underspend is profile
related and will be refined through
September.
Head of
Commercial
Services
Central/Management
Costs
505 516 11 2.1% 1,588 1,588 0 0.0% Outwith Reporting Criteria
Head of
Commercial
Services
CHORD 44 39 (5) (12.8%) 38 38 0 0.0% The YTD overspend is due to the
timing of recharges to Capital.
Head of
Commercial
Services
Cleaning (117) (27) 90 (333.3%) 189 189 0 0.0% The YTD underspend is mainly
due to lower use of bank staff and
also some profile related variances
which will be refined through
September.
Head of
Commercial
Services
Culture, Heritage,
Recreation & Sport
2,046 2,099 53 2.5% 5,735 5,735 0 0.0% The YTD underspend is profile
related and will be refined through
September.
Head of
Commercial
Services
Events & Commercial
Catering
52 (12) (64) 533.3% 8 8 0 0.0% This overspend is due to lower
than forecasted income in
commercial café's which is mainly
as a result of the temporary
closure of Pier Point Café.
Head of
Commercial
Services
Property Portfolio (118) (130) (12) 9.2% (187) (187) 0 0.0% Outwith Reporting Criteria
Head of
Commercial
Services
Property Services 540 661 121 18.3% 1,001 1,001 0 0.0% The YTD underspend is due to
delays in recruitment.  This will be
reduced through harvesting
vacancy savings.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Head of
Commercial
Services
Shared Offices 342 365 23 6.3% 1,659 1,659 0 0.0% Outwith Reporting Criteria    
3,112 3,347 235 7.0% 10,595 10,595 0 0.0%  
Head of
Education
Additional Support for
Learning
4,782 4,778 (4) (0.1%) 12,951 12,950 1 0.0% Outwith Reporting Criteria
Head of
Education
Central/Management
Costs
1,277 1,161 (116) (10.0%) 2,104 2,104 0 0.0% The YTD overspend is due to
payment of subscriptions, PVG's,
SRCO, Licensing, IT software;
budget will require to be identified
for these spends.
Head of
Education
Community Learning
& Development
2 1 (1) (100.0%) 15 15 0 0.0% This variance is profile related and
will be refined through September.
Head of
Education
COVID 0 0 0 0.0% 0 0 0 0.0% Outwith Reporting Criteria
Head of
Education
Early Learning &
Childcare
7,066 7,173 107 1.5% 18,709 18,709 0 0.0% The YTD underspend is profile
related and will be refined through
September.
Head of
Education
Primary Education 17,585 17,783 198 1.1% 43,737 43,737 0 0.0% The YTD underspend is mainly
due to delays in recruitment. 
Under the Scheme of Devolved
School Management schools  are
permitted flexibility at year end,
therefore no forecast variance will
be processed.
Head of
Education
Pupil Support 1,869 1,826 (43) (2.4%) 4,675 5,259 (584) (12.5%) Outwith Reporting Criteria
Head of
Education
Schools - Central
Services
1,225 1,415 190 13.4% 2,683 2,283 400 14.9% The YTD underspend is due to
delays in recruitment from 100 day
promise funding, which has been
reported as a forecast variance.
Head of
Education
Secondary Education 18,095 18,287 192 1.1% 42,057 42,057 0 0.0% The YTD underspend is mainly
due to delays in recruitment. 
Under the Scheme of Devolved
School Management schools  are
permitted flexibility at year end,
therefore no forecast variance will
be processed.    
51,901 52,424 523 1.0% 126,931 127,114 (183) (0.1%)  
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Head of Legal &
Regulatory
Support
Central/Management
Costs
98 100 2 2.0% 269 269 0 0.0% Outwith Reporting Criteria
Head of Legal &
Regulatory
Support
Community Safety 130 112 (18) (16.1%) 195 195 0 0.0% The YTD overspend is due to
removal of cost pressure funding
for annual system costs, budget
will need to be identified for this.
Head of Legal &
Regulatory
Support
Elections 17 13 (4) (30.8%) 16 16 0 0.0% The YTD over spend is profile
related and will be refined through
September.
Head of Legal &
Regulatory
Support
Governance 258 220 (38) (17.3%) 752 752 0 0.0% The YTD overspend is due to
redundancy payment that requires
drawdown from earmarked
reserve.
Head of Legal &
Regulatory
Support
Governance, Risk &
Safety
219 211 (8) (3.8%) 584 584 0 0.0% Outwith Reporting Criteria
Head of Legal &
Regulatory
Support
Legal Services 345 263 (82) (31.2%) 769 769 0 0.0% The YTD overspend is profile
related and will be refined through
September.
Head of Legal &
Regulatory
Support
NPDO and Hub
Schools
6,415 6,419 4 0.1% 16,959 16,959 0 0.0% Outwith Reporting Criteria
Head of Legal &
Regulatory
Support
Procurement,
Commercial and
Contract
Management
432 466 34 7.3% 1,265 1,265 0 0.0% Outwith Reporting Criteria
Head of Legal &
Regulatory
Support
Trading Standards &
Advice Services
245 252 7 2.8% 662 662 0 0.0% Outwith Reporting Criteria    
8,159 8,056 (103) (1.3%) 21,471 21,471 0 0.0%      
63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%)   
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Subjective
Category
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Employee 44,719 45,875 1,156 2.5% 117,152 116,751 401 0.3% The YTD underspend is mainly within staffing budgets in
Schools, Early Years and Learning Centres. Under the
Scheme of Devolved School Management (DSM) schools
are permitted flexibility at year end, therefore no forecast
variance will be processed in relation to school staffing.
There is slippage in recruitment in 100 day promise
funding which has been reported as a forecast variance.
SLGE and Chief Officer pay awards and backdated pay
are due to be paid out in September reducing this
underspend significantly.
Premises 3,150 2,814 (336) (11.9%) 9,719 9,719 0 0.0% The YTD overspend is mainly profile related with £86k
being Storm Eowyn property repair costs coded under
Exec Director DH.
Supplies and
Services
5,898 5,903 5 0.1% 14,559 14,559 0 0.0% Outwith Reporting Criteria
Transport 173 157 (16) (10.2%) 371 371 0 0.0% The YTD overspend is profile related and will be refined
through September.
Third Party 24,372 24,246 (126) (0.5%) 47,081 47,665 (584) (1.2%) The YTD overspend is due to the budget pressure within
School Residential Budget and a forecast variance has
been processed to reflect the higher than budget demand
for this service.
Income (14,858) (14,987) (129) 0.9% (29,690) (29,690) 0 0.0% The YTD under recovery of income is profile related and
will be refined through September.
Totals 63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%)
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year.
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES SUMMARY AS AT 31 AUGUST 2025 
Service Area
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Education - Pupil Support 4,675 5,259 (584) (12.5%) Higher than budgeted demand for placements within
Residential Schools Budget.
Education - School Support 2,683 2,283 400 14.9% Recruitment delays within 100 day Promise Budget. 
A red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025 
Currently there is a small forecast overspend of £16k in the department reported – finance officers will continue to work with their respective
services throughout September to provide updates. 
The department has a year to date overspend of £5.336m (25.9%). This is currently being driven by profiling of budget for 2025-26 not aligning
to actual spend/income, lag in capital works progressing through final measures, accruals/prepayments from the 2024-25 year end that are still
to come through, drawdowns from ear-markings which have not taken place yet and the allocation of grant funding for ferries that is currently
sitting within the central grant code. 
Forecast Outturn Position 
Service Annual
Budget 
£000
Forecast
Outturn 
£000
Current
Forecast
Variance
(Aug)
£000
Previous
Forecast
Variance
Reported
to P&R
(Jun) 
£000
Change 
£000
Executive Director
(Kirsty Flanagan) (241) (241) 0 0 0
Head of Customer
Support Services
9,630 9,653 (23) 0 (23)
Head of
Development and
Economic Growth 8,525 8,550 (25) 0 (25)
Head of Financial
Services 7,429 7,429 0 0 0
Head of Roads
and Infrastructure
Services 36,926 36,894 32 0 32
Totals 62,269 62,285 (16) 0 (16) 
Year to Date Position 
0%
25%
50%
75%
100%
Executive
Director (Kirsty
Flanagan)
Head of
Customer
Support
Services
Head of
Development
and Economic
Growth
Head of
Financial
Services
Head of Roads
and
Infrastructure
Services
Expenditure to date against the remaining budget for each
Service
YTD
Actual
£000
Remaining Budget
£000
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025
Key Financial Successes:
The department had a challenging 2024-25 financial year with a net overspend of £2.124 million reported after automatic earmarkings were
applied. This was primarily driven by increased costs in school and public transport contracts, heightened maintenance requirements across
piers, harbours and the Belnahua Ferry, escalated winter maintenance expenses, unachieved savings from the RIS review due to contractor
delays, offset partially by over-recovered vacancy savings and higher-than-anticipated Planning and Building Warrant income.
Key Financial Challenges: Proposed Actions to address Financial Challenges:
Ensuring that services spend to budget and do not overspend. Detailed monitoring in the key areas overspent in 2024-25 to flag up
concerns early and mitigate before becoming an overspend.
Department / Service ongoing ability to meet future savings / efficiency
requirements.
Monitoring of trends / expenditure levels / service configuration and
the Service Packages Policy Options savings process.
Rising cost of materials, software and consultancy services across the
service will result in a reduction in activity or overspends.
Costs are monitored regularly and contained as much as possible
with any unavoidable overspends highlighted as early as possible.
Financial Services to continue to deliver a high-quality support service
function during a time of substantial uncertainty and challenge arising from
continuing reductions in funding whilst costs are increasing due to
forecasted timelines for reductions in inflation having now been revised.
Ensure the team is operating as efficiently and effectively as
possible by building resilience across the team and working
collaboratively with other services of the Council to support
evidence-based decision making.
Winter Maintenance costs are difficult to estimate as they are very much
dependant on the weather.
Close monitoring of Winter Maintenance activity and reporting of the
financial implications through the budget monitoring process. The
Council agreed the winter policy, setting out the intervention level
and locations to be treated. The number of treatments is determined
by weather conditions. There is a sophisticated weather monitoring
system in place consisting of several weather stations, this is
supported by a forecasting and meteorological service which is
collaboratively procured by West of Scotland local authorities.
Climate Change Mitigation impacting on the department’s key
infrastructure will result in overspends as a result of increased inspection
and maintenance activity.
The Council will continue to tackle climate change, looking at
financially sustainable options and will closely monitor the financial
consequences.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025
Dangerous buildings costs as there is no budget for this expenditure and
the council has no control over the demand for the service.
Building Standards, Legal Services and Financial Services are
working closely to manage debt recovery and to consider other
options to minimise corporate risk exposure.
Due to the nature of the various components of Waste Management there
are ongoing challenges with:
• The delay of the Deposit Return Scheme.
• Uncertainty with recycling income/gate fee costs due to the
volatility of the market.
• Challenges in the legislative changes around the disposal of
Biodegradable Municipal Waste.
• The Circular Economy Bill that has recently been passed and the
implications that may bring.
To closely monitor all service components of Waste Management
and review the Waste Strategy in conjunction with our contractual
partner Biffa.
Berthing income from CalMac Ferries Larger CalMac ferries that normally berth at Craignure have been
removed due to ongoing issues in the wider fleet, replaced with
much smaller vessels (MV Isle of Mull having the biggest impact).
The recent release of the winter timetable and vessel deployment
means there is expected to be a significant drop in income. Finance
Contact will be working with the service through the month to
understand the full impact of this.
Overspends showing in Roads & Lighting due to a lag in completed capital
works progressing through final measures.
Roads Operatives to be prompted to complete measures as soon
as schemes are complete so that income will be recorded more
timeously.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Service
Service Area
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Executive
Director (Kirsty
Flanagan)
Central/Management
Costs
141 139 (2) (1.4%) (241) (241) 0 0.0% Outwith Reporting Criteria    
141 139 (2) (1.4%) (241) (241) 0 0.0%  
Head of
Customer
Support Services
Central/Management
Costs
58 59 1 1.7% 176 189 (13) (7.4%) Outwith Reporting Criteria
Head of
Customer
Support Services
Communications 138 140 2 1.4% 344 344 0 0.0% Outwith Reporting Criteria
Head of
Customer
Support Services
Customer Service
Centres
637 622 (15) (2.4%) 1,734 1,734 0 0.0% Outwith Reporting Criteria
Head of
Customer
Support Services
HR 1,214 1,002 (212) (21.2%) 2,667 2,677 (10) (0.4%) £197k variance in the Itrent Cost
centre - this has to come from
earmarkings.  £14k Redundancy
payment in training centre - no
budget.
Head of
Customer
Support Services
ICT 2,249 2,151 (98) (4.6%) 4,753 4,753 0 0.0% Overspend in Microsoft Enterprise
agreement of £156k - any overspend
for MS365 will be met from draw
down from earmarked reserve 071 at
end of year.  Underspend of £95k in
Internet/exchange software
maintenance.  This will be reprofiled
during September.
Head of
Customer
Support Services
Registrars (38) (37) 1 (2.7%) (44) (44) 0 0.0% Outwith Reporting Criteria    
4,258 3,937 (321) (8.2%) 9,630 9,653 (23) (0.2%)  
Head of
Development &
Economic
Growth
Airports 492 465 (27) (5.8%) 1,272 1,272 0 0.0% Outwith Reporting Criteria
Head of
Development &
Building Control (210) (66) 144 (218.2%) (60) (60) 0 0.0% YTD income higher than budget due
to fee restructure
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Economic
Growth
Head of
Development &
Economic
Growth
Central/Management
Costs
224 208 (16) (7.7%) 601 601 0 0.0% Outwith Reporting Criteria
Head of
Development &
Economic
Growth
Culture & Heritage 59 53 (6) (11.3%) 235 235 0 0.0% YTD Variance mainly due to accrual
for Rothesay Pavilion "AE1230
Rothesay Pavilion Charity Support for
2024-25 running costs" - costs not
through yet
Head of
Development &
Economic
Growth
Development
Management
(212) 8 220 2750.0% 301 301 0 0.0% YTD variance due to higher than
expected income
Head of
Development &
Economic
Growth
Development Policy 204 146 (58) (39.7%) 387 387 0 0.0% YTD Variance due to Strategic
Development Framework
Helensburgh spend  with no budget
and unallocated saving in Dev Policy
Head of
Development &
Economic
Growth
Economic
Development
213 606 393 64.9% 1,210 1,210 0 0.0% YTD Variance due to earmarkings not
drawn down until later in year and
grants with no expenditure
Head of
Development &
Economic
Growth
Environmental
Health
536 521 (15) (2.9%) 1,393 1,418 (25) (1.8%) Outwith Reporting Criteria
Head of
Development &
Economic
Growth
Environmental
Initiatives
43 43 0 0.0% 118 118 0 0.0% Outwith Reporting Criteria
Head of
Development &
Economic
Growth
Housing 2,184 1,695 (489) (28.9%) 2,755 2,755 0 0.0% YTD variance due to Strategic
Housing Fund funded from
earmarkings & HEEPS 12 grant
income not yet received
Head of
Development &
Private Landlords (273) (17) 256 (1505.9%) 0 0 0 0.0% Short Term LETS has no budgets
(ongoing discussions with budget
holder)
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Economic
Growth
Head of
Development &
Economic
Growth
Transportation
Policy
413 94 (319) (339.4%) 313 313 0 0.0% YTD variance due to Sustrans grants
still to be received although issues
with the Sustrans Grant portal have
been rectified    
3,673 3,756 83 2.2% 8,525 8,550 (25) (0.3%)  
Head of Financial
Services
Accounting &
Budgeting
1,025 1,018 (7) (0.7%) 2,775 2,775 0 0.0% Outwith Reporting Criteria
Head of Financial
Services
Internal Audit &
Fraud
128 140 12 8.6% 355 355 0 0.0% Outwith Reporting Criteria
Head of Financial
Services
Revenues & Benefits 116 269 153 56.9% 3,280 3,280 0 0.0% YTD underspend due to the timing of
cash flows in comparison to the
profiling of budget and will be rectified
over the financial year.
Head of Financial
Services
Scottish Welfare
Fund
476 502 26 5.2% 1,019 1,019 0 0.0% Outwith Reporting Criteria    
1,745 1,929 184 9.5% 7,429 7,429 0 0.0%  
Head of Roads &
Infrastructure
Services
Amenity 1,951 1,621 (330) (20.4%) 3,414 3,414 0 0.0% Largest variance across amenities
continues to relate to under-recovery
of interment income. Also during July
aged debt was written off relating to
the Pavilion café which went into
liquidation during 2024 - funding to
cover this to be discussed with the
budget holder.  Lastly street sweeper
external hire costs high given 2
Council sweeper vehicles written off
and external hire charges are high -
awaiting information from
Fleet/Service on leasing sweeper
vehicles going forward.
Head of Roads &
Infrastructure
Services
Car Parking (351) (388) (37) 9.5% (557) (557) 0 0.0% Outwith Reporting Criteria
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Head of Roads &
Infrastructure
Services
Central/Management
Costs
1,406 1,319 (87) (6.6%) 1,426 1,426 0 0.0% Stephen Hall was covering the Head
of Service post. Awaiting final
invoices and then will be drawndown
from earmarked reserves and any
differences will be included as a
forecast variance. Additional variance
made up of training costs, due to
profile not matching YTD spend.
Head of Roads &
Infrastructure
Services
Depots 146 121 (25) (20.7%) (292) (292) 0 0.0% NDR Spend is higher than profiled
position - to be investigated as profile
should be set at what the NDR
charge will be.
Internal Refuse Collection Recharge -
profile needs correcting
Head of Roads &
Infrastructure
Services
Fleet & Transport 4,378 4,537 159 3.5% 11,917 11,917 0 0.0% The YTD variance on Transport will
be adjusted once new contract
payments for school buses are
processed. Continuing overspend in
cost of internal fleet repairs.
Head of Roads &
Infrastructure
Services
Infrastructure 47 211 164 77.7% 765 765 0 0.0% Spend profile incorrect, works have
been delayed due to processing
small frame works contracts. Spend
will occur in 2025-26 just later than
profile suggests. Profile to be
updated to reflect this.
Head of Roads &
Infrastructure
Services
Marine (844) (2,291) (1,447) 63.2% (3,518) (3,518) 0 0.0% YTD variance due to additional
funding from Transport Scotland not
showing in Ferries budgets, work
ongoing to update this. It is
anticipated there will be a shortfall in
berthing income, this is to be
calculated following the publication of
Calmac's winter timetables.
Head of Roads &
Infrastructure
Services
Network & Traffic
Management
92 80 (12) (15.0%) 249 249 0 0.0% TRO income behind forecasted
position - £8k in but not processed to
ledger brings YTD variance down to
£4k (5%)
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Head of Roads &
Infrastructure
Services
Road Safety 46 31 (15) (48.4%) 159 159 0 0.0% Error in the budget resulted in saving
being profiled incorrectly. The actual
YTD Budget should be £56k which
would produce a YTD underspend of
£10k. The underspend is likely to be
harvested for vacancy savings.
Head of Roads &
Infrastructure
Services
Roads & Lighting 5,912 2,200 (3,712) (168.7%) 8,072 8,230 (158) (2.0%) Trading Account - £2.9m under
recovery as capital schemes are
progressing with the income still to
come upon the completion of the
schemes.
Bellwin - £360k of grant still due to
come in for Storm Eowyn Claim and
costs to be moved to new Capital
Cost Centres (£470k total)
Rechargeables - £270k lag on
income from rechargeable works -
profile to be updated to reflect this
Street Lighting - £70k overspend YTD
and £158k forecast as variance for
2025-26
Head of Roads &
Infrastructure
Services
Waste 3,360 3,422 62 1.8% 15,291 15,101 190 1.2% YTD Variance -  Accrual arranged at
year end for £590K relating to waste
PPP indexation back pay not yet
processed. This will be paid once the
Compost Like Output negotiations
are concluded.  Once paid this would
change the current YTD variance to
an adverse variance of (£528K).  The
adverse variance relates mainly to
commercial refuse, external hires
cost and profiling. Work is underway
by the service to recover additional
income from gap sites, unable to
confirm at this stage if the target
income of £700K will be achieved. 
Forecast Variance - Over-recovery
anticipated by year end in relation to
recyclates sale of glass.    
16,143 10,863 (5,280) (48.6%) 36,926 36,894 32 0.1%      
25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%)   
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Page 46

EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%.
Page 46

Page 47

EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Subjective
Category
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Employee 16,835 17,397 562 3.2% 46,791 46,791 0 0.0% YTD variance mainly due to vacancies within the Roads and
Lighting Holding Account which are being covered by
external contractors
Premises 1,147 1,206 59 4.9% 4,258 4,258 0 0.0% YTD variance mainly due to the profile of the Depot internal
recharges.
Supplies
and
Services
5,672 4,741 (931) (19.6%) 11,228 11,248 (20) (0.2%) YTD variance mainly due to purchase of materials within
Roads, which will be offset against additional income over the
coming months, alongside payments made against UK
Shared Prosperity Fund which will be offset with grant
income once received
Transport 6,084 4,966 (1,118) (22.5%) 17,532 17,532 0 0.0% Outstanding budget adjustment required against the Ferries
budget to reflect additional Scottish Government Funding,
part of the overall block grant this year
Third Party 24,346 26,496 2,150 8.1% 73,033 73,184 (151) (0.2%) YTD variance mainly due to underspends on private
contractors and transport operator payments, with profiling
being the main driver of this and will begin to smooth out over
the next few reporting periods.
Capital
Financing
0 0 0 0.0% 2,949 2,949 0 0.0% Outwith reporting criteria
Income (28,124) (34,182) (6,058) 17.7% (93,522) (93,677) 155 (0.2%) YTD variance due to profile of income recharges within the
Roads Operational Holding Account on account of capital
works still progressing through final measures, internal refuse
recharge being processed later than profiled and recharge to
education not yet done.
Totals 25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%)   
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
Page 47

Page 48

EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10% 
Page 48

Page 49

EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 31 AUGUST 2025 
Service Area Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Roads & Lighting 8,072 8,230 (158) (2.0%) An overspend of £158k is forecast mainly due to the reliance on
external contractors and related vehicle costs (£138k) in street lighting
as a result of internal staffing capacity being focused on delivering other
capital works and higher than expected public liability claims and rising
external software costs (£20k).
Waste 15,291 15,101 190 1.2% The forecast underspend reflects an expected over-recovery of income
from the sale of glass for recycling. 
Red Variance is a forecast variance which is greater than +/- £50k Page 49

Page 50

SOCIAL WORK – AS AT 31AUGUST 2025 
The department is currently forecasting an overspend of £0.668m (0.8%). This is due to demand for residential placements within Children and
Families and Older People Services. The Integration Joint Board will be expected to recover this position by the end of the financial year or
offset the overspend from its budget reserves. Consequently, there is a reported forecast variance of zero. 
The department has a year-to-date overspend of £0.257m (1.2%) which again is due to demand driven services within Children and Families
and Older People along with timing differences for reserves drawdowns and grant income. 
Forecast Outturn Position 
Service Annual
Budget 
£000
Forecast
Outturn 
£000
Current
Forecast
Variance
(Aug) 
£000
Previous
Forecast
Variance
Reported
(Jun) 
£000
Change 
£000
Chief Officer
Integration (1,965) (1,965) 0 0 0
Head of Strategic
Planning and
Performance 508 508 0 0 0
Head of Health and
Community Care 44,802 45,802 0 0 0
Head of Acute and
Complex Care 21,700 21,700 0 0 0
Head of Children and
Families 16,796 16,796 0 0 0
Totals 81,841 81,841 0 0 0 
Year to Date Position 
Key Financial Successes: 
Delivered a balanced budget at the end of 2024/25 after utilising £2.553m of pension reserves held in the council and £0.156m of IJB
reserves. 
-115%
-90%
-65%
-40%
-15%
10%
35%
60%
85%
110%
Chief Officer
Integration
Head of Adult
Services
Head of Children
and Families
Head of
Strategic
Planning and
Performance
Expenditure to date against the remaining budget
for each Service
YTD
Actual
£000
Remaining Budget
£000
Page 50

Page 51

SOCIAL WORK – AS AT 31AUGUST 2025
Key Financial Challenges: Proposed Actions to address Financial Challenges:
Deliver the savings total for 2025/26 of £2.047m. Maintain a close working relationship with the HSCP Service
Improvement Team to quickly and efficiently identify and assess
options for delivering the outstanding savings.
Development and delivery of future service redesigns which will be
necessary to contain service expenditure within the allocated resource,
noting that in year savings still need to be identified for 2025/26 to address
the 2025/26 budget gap, as well as budget gaps in future years.
Support from finance to assist strategic managers to develop and
identify further savings options and to look beyond the short term to
identify and plan the changes which will be needed to address the
expected ongoing budget challenges over the current, and future,
years.
Cost of the use of agency staff to support service delivery across Social
Work, but particularly in Older People services, due to recruitment and
retention challenges within the service. Year to date spend at August 2025
of £1.707m.
Close working relationship with the HSCP to support the costing of
a plan to stabilise the service and ensure it is operationally and
financially sustainable. This includes an exit plan from the reliance
on agency staff.
Cost of living crisis affecting pay inflation negotiations and financial
sustainability of service providers, which could affect affordability and
sustainability of service delivery.
Ensure emerging issues are highlighted as soon as possible so that
the financial impact can be evaluated and reported through the
budget monitoring and preparation processes.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 
Service Service Area
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Chief Officer
Integration
Integration
Headquarters
234 193 (41) (21.2%) 1,802 1,802 0 0.0% The year to date variance is due to timing
differences in third party payments and
income recharges.  The forecast variance is
due to unallocated budgets held to offset
likely overspends in other service areas
including care at home and care home
placements.
Chief Officer
Integration
Social Work
Central Support
(453) (468) (15) 3.2% (3,767) (3,767) 0 0.0% The YTD and forecast variances are outwith
reporting criteria    
(219) (275) (56) (18.0%) (1,965) (1,965) 0 0.0%  
Head of
Strategic
Planning &
Performance
Management &
Central Costs
167 168 1 0.6% 474 474 0 0.0% The YTD and forecast variances are outwith
reporting criteria
Head of
Strategic
Planning &
Performance
Service
Development
12 16 4 25.0% 34 34 0 0.0% The YTD and forecast variances are outwith
reporting criteria    
179 184 5 25.6% 508 508 0 0.0%  
Head of
Health and
Community
Care
Management &
Central Costs
163 243 80 32.9% 608 608 0 0.0% The YTD and forecast variance are both due
to staff vacancies.
Head of
Health and
Community
Care
Older People 11,341 11,306 (35) (0.3%) 44,194 44,194 0 0.0% The YTD variance is outwith reporting
criteria.  The forecast outturn variance
reflects the demand for care home
placements, home care packages and the
use of agency staff partially offset by
increased income from self funders in the
HSCP's care homes.    
11,504 11,549 45 0.4% 44,802 44,802 0 0.0%  
Head of
Acute and
Complex
Care
Learning
Disabilities
1,653 1,726 73 4.2% 14,934 14,934 0 0.0% The YTD variance is due to profiling of
payments to third parties and the forecast
variance is due to current commitments
within joint residential and supported living.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Head of
Acute and
Complex
Care
Management &
Central Costs
33 45 12 26.7% 116 116 0 0.0% The YTD variance is due to timing
differences in training costs and payments to
third parties. The forecast variance is
outwith reporting criteria.
Head of
Acute and
Complex
Care
Mental Health 719 787 68 8.6% 3,408 3,408 0 0.0% The YTD variance is due to staff vacancies
partially offset by spend on agency staff and
timing differences with payments to third
parties. The forecast overspend is due to
current commitments for residential
placements and the use of agency staff in
assessment and care management.
Head of
Acute and
Complex
Care
Physical Disability 842 925 83 9.0% 3,242 3,242 0 0.0% The YTD variance is due to timing
differences with payments to third parties.
The forecast variance is outwith reporting
criteria.
3,247 3,483 236 48.5% 21,700 21,700 0 0.0%
Head of
Children &
Families
Child Protection 1,266 1,299 33 2.5% 3,840 3,840 0 0.0% The YTD variance is outwith reporting
criteria. The forecast variance is due to use
of agency staff covering vacant posts and a
reduction in income from Police Scotland
and NHS due to CAMHS project ending
partially offset by demand for contact and
welfare services.
Head of
Children &
Families
Children with a
Disability
362 435 73 16.8% 1,083 1,083 0 0.0% The YTD variance is due to timing
differences in third party payments. The
forecast variance is outwith reporting criteria.
Head of
Children &
Families
Criminal Justice 27 (193) (220) 114.0% 272 272 0 0.0% The YTD variance is due to timing
differences on government grant income.
The forecast variance is outwith reporting
criteria.
Head of
Children &
Families
Looked After
Children
3,392 2,889 (503) (17.4%) 7,604 7,604 0 0.0% The YTD variance is due to timing
differences on third party payments and the
forecast variance is due to demand for
residential placements partially offset by
forecast underspends in adoption and
fostering.
Head of
Children &
Families
Management &
Central Costs
1,282 1,412 130 9.2% 3,997 3,997 0 0.0% The YTD variance is due to timing
differences on third party payments and
income from health boards and other bodies.
The forecast variance is due to vacant posts
in the integrated care area teams and
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025
forecast underspends in third party
payments.    
6,329 5,842 (487) (8.3%) 16,796 16,796 0 0.0%  
GRAND
TOTAL   21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0%   
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%. 
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025
Subjective
Category
YTD
Actual
£000
YTD
Budget
£000
YTD
Variance
£000
%
Variance
Annual
Budget
£000
Forecast
Outturn
£000
Forecast
Variance
£000
%
Variance Explanation
Employee 13,956 13,225 (731) (5.5%) 36,665 36,665 0 0.0% Both the YTD and forecast underspends are
due to staff vacancies partially offset by the
use of agency staff.
Premises 478 405 (73) (18.0%) 1,644 1,644 0 0.0% The YTD overspend is due to unbudgeted
property maintenance and refuse collection
costs within in the HSCP's Care Homes. The
forecast overspend is outwith reporting
criteria.
Supplies &
Services
701 385 (316) (82.1%) 468 468 0 0.0% The YTD and forecast overspends are
largely due to a re-profiling of savings
options that will no longer be achieved this
financial year.
Transport 327 299 (28) (9.4%) 684 684 0 0.0% The YTD and Forecast variances are outwith
reporting criteria.
Third Party 24,335 24,581 246 1.0% 69,608 69,608 0 0.0% The YTD and forecast variances are due to
demand for purchased care services across
both Children's and Adult Services.
Income (18,757) (18,112) 645 (3.6%) (27,228) (27,228) 0 0.0% The YTD variance is due to timing
differences in re-charges to health boards
and the forecast variance is due to the
profiling of reserves drawdowns.
Totals 21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0%
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025
YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far.
Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. 
The Variance is the difference between budget and actual or forecast outturn.
A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less
than budget.
An explanation is given for any variance which exceeds £50,000 or 10%.
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#
MONITORING OF BUDGET SAVINGS OPTIONS APPROVED FEBRUARY 2025 Appendix 3
POSITION AS AT 31 AUGUST 2025
2025-26 2025-26 2026-27 2026-27 Future
Years
Future
Years
£000 FTE £000 FTE £000 FTE
EDU 001
25/26
45689 Education Services Education Services Education Service are about to commence a review of the
service, in a similar way to Roads and Infrastructure.  The
savings figure represents a target level of savings for Year 1
only at this stage, as the review progresses, further savings
will be identified.
200 0.0 200 0.0 200 0.0 On Track to be Delivered
LRS 003
25/26
45689 Governance Governance Following a review of the Governance Team it is proposed to
take advantage of a retirement within the team to re-
structure. The revised team structure will allow for better use
of available resource and ensure that key priority areas
service levels are maintained.
33 2.0 44 2.0 44 2.0 Delivered
LA 001
25/26
45689 Live Argyll Live Argyll 10% cut to Live Argyll Management Fee - savings options to
deliver this level of saving will be determined by the Live
Argyll Board.
0 0.0 311 tbc 311 tbc Delivered
CS 001
25/26
45689 Community Sport Community Sport Removal of payments to Camanachd Association and Scottish
Rugby at £10,000 each. 
0 0.0 20 0.0 20 0.0 Delivered
CS 002
25/26
45689 Council Catering
Service
Council Catering
Service
Over the last year the department has been revising delivery
models to increase efficiency and effectiveness of the service
and are able to reduce the budget as a result of this.
50 0.0 50 0.0 50 0.0 Delivered
CS 003
25/26
45689 Property Services Property Services Condition Surveys - due to favourable market conditions and
the frequency to undertake the condition surveys a one-off
saving of £50k can be made in 2025/26.
50 0.0 0 0.0 0 0.0 Delivered
LRS 001
25/26
45689 Schools Contracts -
NPDO/DBFM
Schools Contracts -
NPDO/DBFM
As part of contract management measures there has been a
contractual review of the ongoing base budget requirements
and the base can be reduced on a recurring basis going
forward.
108 0.0 108 0.0 108 0.0 Delivered
LRS 002
25/26
45689 Elections Elections The annual budget for elections of £36,751 covers the running
costs of the election office £4,848 with the balance of £31,903
being available to fund by-elections for the Council and
Community Councils. Given that these are unpredictable and
as such outwith our control it is proposed that this is treated
as a centrally funded cost pressure going forward with the
budget of £31,903 being removed from the core budget.
32 0.0 32 0.0 32 0.0 Delivered
FS 001
25/26
45689 Financial Services Financial Services Increase in Agency Income from Scottish Water and a
reduction in supplies and services budgets following a review.
51 0.0 51 0.0 51 0.0 On Track to be Delivered
Template
Ref
Department Service Service Delivery Area Savings Option Status of Implementation
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DEG 001
25/26
45689 Development Policy Development Policy Re-organisation of the service and the posts therein that carry
out specific functions creating a better structure for the
future.
44 1.0 44 1.0 44 1.0 On Track to be Delivered
DEG 002
25/26
45689 Development Projects
(Planning)
Development Projects
(Planning)
Introduction of new charges for returned applications,
retrospective planning applications and discharge of planning
conditions/confirmation of compliance. For future years
assumed increase income as a result of SG review of statutory
planning fees.
45 0.0 45 0.0 145 0.0 On Track to be Delivered
RIS 001
25/26
45689 Roads and
Infrastructure Services
Roads and
Infrastructure Services
A review of Roads and Infrastructure is currently being carried
out. Stage 1 was reported to EDI in June 2024 and Stage 3-4
are progressing. Savings are expected to be identified and
Members will be asked to agree each saving option when it is
identified. The savings figure represents a target level of
savings.
300 tbc 800 tbc 800 tbc On Track to be Delivered
RIS 002
25/26
45689 Commercial Waste Commercial Waste A high level review of self-catering units has highlighted that
some do not have commercial waste contracts. A further
more detailed review will be carried out but it is anticipated
that there is additional income that can be budgeted for. This
saving will be monitored and reported during the year.
700 0.0 700 0.0 700 0.0 On Track to be Delivered
CW 001
25/26
45689 Council Wide Council Wide Following a review of some supplies and services budgets,
there are a number of small efficiencies that can be made
within various cost centres will limited impact.
47 0.0 49 0.0 88 0.0 On Track to be Delivered
CPD 001
25/26
45689 Community Planning
and Development
Community Planning
and Development
Staffing efficiencies through workforce planning and service
re-shaping to better meet needs from communities on assets
and funding.
38 1.0 63 1.0 63 1.0 Delivered
Loans FundFeb-25 Loans Fund Loans Fund A detailed review of the loans fund will be undertaken,
however, it is anticipated that a one-off saving of at least
£0.500m will be achievable within 2024-25 that could be
earmarked and used to balance the 2025-26 budget. The
saving is a result of slippage in the capital programme and a
better return on interest rate estimates.
500.00 0.0 0.00 0.0 0.00 0.0 Delivered
Funding Feb-25 Funding Funding After the Council set its 2024/25 budget, the SG allocated the
Island Cost Crisis Funding that was to be used to support
increasing service costs in islands. As our budget was
already set, this funding was set aside and can be carried
forward and used to help balance the 2025/26 budget on a
one-off basis.
564.00 0.0 0.00 0.0 0.00 0.0 Delivered
TOTAL 2,762 4.0 2,517 4.0 2,656 4.0
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ARGYLL AND BUTE COUNCIL
FINANCIAL SERVICES
POLICY AND RESOURCES COMMITTEE
09 OCTOBER 2025
FINANCIAL RISKS ANALYSIS 2025-26  
1 EXECUTIVE SUMMARY 
1.1 The main purpose of this report is to provide a summary of the known key
financial risks facing the council in 2025-26, as at 31 August 2025. 
1.2  A number of council wide financial risks, both revenue and capital, have been
identified, in addition to specific departmental or service risks.  For each
quantifiable risk, the potential annual financial impact has been estimated; and the
likelihood of the risk materialising assessed, based on a standard risk matrix. 
1.3 There are currently 7 council wide quantifiable risks identified for 2025-26, with a
potential annual value totalling £5.1m, and with varying degrees of likelihood. 
1.4 There are currently 32 departmental risks, with a potential annual value totalling
£4.156m, of which 5 are categorised as ‘Likely’.   
1.5 Financial risks are monitored and reviewed on an ongoing basis, with actions put
in place to continue to mitigate or manage these risks.     
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ARGYLL AND BUTE COUNCIL
FINANCIAL SERVICES
POLICY AND RESOURCES COMMITTEE
09 OCTOBER 2025
FINANCIAL RISKS ANALYSIS 2025-26  
2. INTRODUCTION 
2.1 This report outlines the process and approach to financial risk assessment, and
provides details of the known key financial risks facing the council in 2025-26, as
at 31 August 2025. 
3 DETAIL 
3.1 Process and Approach 
3.1.1 The council continues to experience significant financial challenges and
uncertainty.  In developing its budget to address both funding, and cost and
demand pressures, consideration is given to financial risk.  However, both existing
and new or emerging financial risks require to be monitored and reviewed on an
ongoing basis throughout the year, with actions put in place to mitigate or manage
these risks.  Risks that cannot be mitigated or managed may have a detrimental
impact on the financial position of the council. 
3.1.2 There are a number of risks that may impact income or expenditure across the
entire council.  These are identified as council wide risks.  In addition, specific
financial risks impacting each department or service of the council have been
considered.  These are identified as departmental/service risks.   
3.1.3 For each quantifiable risk, the potential annual financial impact has been
estimated; and the likelihood assessed, based on the following standard risk
matrix: 
1 – Remote
2 – Unlikely
3 – Possible
4 – Likely
5 – Almost Certain 
3.1.4 The Argyll and Bute Integrated Joint Board (IJB) with responsibility for Social
Work and a range of Health services was established and came into effect on 1
April 2016.  The IJB is responsible for financial management and strategic
oversight of these services.  It is the responsibility of the IJB to consider the
individual financial risks associated with Integration Services and these risks are
therefore not contained within this report.  A council wide risk has been included
in respect of the IJB being unable to deliver the social care service within the
budget allocated. 
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3.2 
3.2.1 
3.2.2
Council Wide Risks 
General 
There is a risk of further severe weather incidents, requiring both revenue and
capital expenditure to be incurred.  Whilst there may be additional funding
available through the Bellwin Scheme, this is limited to eligible revenue
expenditure and there is an assumption that local authorities will meet a
proportion of the costs of emergency incidents from within existing resources. 
The threshold, over which councils can claim for eligible expenditure is 0.2% of a
local authority's budgeted net revenue expenditure.  For Argyll and Bute Council,
this equates to £0.654m for 2025-26.  As part of the 2025-26 budget process,
£2.9m was provided for severe weather related costs (£2m from the Priorities
Investment Fund and £0.9m within the Capital Plan).  However, by their very
nature, it is difficult to estimate potential additional costs and there remains a risk
of costs being incurred above the level currently provided for within financial
plans.  It is therefore deemed prudent to recognise a financial risk in this respect. 
A risk value of £1m is deemed to be reasonable. 
The council is generally able to recover all input VAT incurred on its expenditure,
subject to certain conditions being met.  Some activities are VAT exempt, such
as, the lease of land or property, where the land or property has not been opted to
tax.  VAT incurred on expenditure attributable to exempt activities, such as, capital
investment in property development or refurbishment must be less than 5% of the
total VAT incurred in the year.  A breach of this 5% limit would result in VAT paid
on all expenditure attributable to exempt activities being irrecoverable.  As
opportunities to support economic development are explored, it is increasingly
likely that the council will enter into commercial arrangements, such as in respect
of Rothesay Pavilion.  The tax position in respect of these arrangements requires
to be given due consideration, with mitigations put in place, as appropriate, for
example, opting to tax land and property.  This position will be subject to ongoing
monitoring and review, to ensure that the council continues to remain within the
5% threshold and recover all VAT incurred. 
Revenue  
3.2.3 The 2025-26 budget included a 3% pay award assumption across all workforce
categories, at all grades, based on the Public Sector Pay Policy of 9% over the 3
years 2025-26 to 2027-28.  The pay award for SJC and Chief Officers has now
been agreed at 4% for 2025-26 and 3.5% for 2026-27.  Negotiations in respect of
the pay award for teachers have not yet concluded.  At this stage, the expectation
is that the increased cost of the 2025-26 pay award will be fully funded from
additional Scottish Government grant funding, however, this is subject to the
teachers pay award being agreed at the same level.  There is a risk that the
teachers agreed pay award will be above the level agreed for SJC and Chief
Officers, which may require additional costs to be funded by the council.  A
potential annual risk value equivalent to a further 1% of the annual pay budget for
teachers is deemed reasonable, which equates to £0.7m.  Since last reporting,
the initial offer in respect of the teachers pay award has been rejected by the
teachers’ negotiating side.  The likelihood of this risk materialising has therefore
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increased from ‘2 - Unlikely’ to ‘3 – Possible’. This position will be monitored and
updated following conclusion of the teacher’s pay negotiations and confirmation of
additional Scottish Government funding.
3.2.4 Whilst the 2025-26 approved budget provides for inflationary increases, there is a
risk of continued volatility in utilities pricing and demand can also be subject to
unpredictable weather extremes. At this stage, a potential annual risk value
equivalent to 10% of the annual utilities budget provision is deemed reasonable.
This equates to £0.9m. It is anticipated that this risk value may reduce as the
year progresses.
3.2.5 The estimated level of Council Tax income is based on current and forecast Band
D equivalents, and reflects our expected collection rates, based on historical data.
A potential annual risk value equivalent to 1% of the annual Council Tax income
budget is deemed reasonable in this respect. Furthermore, there is currently a
significant level of uncertainty in respect of the classification of self-catering units
as either non-domestic or domestic dwellings, which may impact Council Tax
income, presenting an additional risk to financial planning assumptions. These
factors equate to a combined estimated risk value of £1m.
3.2.6
3.2.7
3.2.8
In respect of the Health and Social Care Partnership (HSCP), 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, Argyll and Bute Council and NHS Highland.
Where recovery plans are unsuccessful and an overspend occurs at the financial
year end, and the HSCP has insufficient reserves to meet the overspend, then the
partners will be required to make additional payments to the HSCP. The council’s
contribution would reflect the element of the overspend related to Social Work.
Whilst any additional payments by the council and NHS Highland will be deducted
from future years funding, there is a risk that the council may require to make an
additional unbudgeted contribution to the HSCP during the year.
As at 31 August 2025, the forecast outturn for 2025-26 on Social Work services is
an overspend of £0.668m. This includes an assessment on the delivery of
approved savings, including the £0.500m of unidentified savings built into the
budget, as part of the recovery plan. At this stage, the HSCP expect the forecast
overspend to be managed within available HSCP reserves. However, the
financial situation facing Social Work is extremely challenging due to increases in
service demand; complexity of cases; increasing costs; and difficulty recruiting
permanent staff and, therefore, having to rely on agency staff, at an additional
cost. There is a risk that the level of overspend will increase beyond the level that
can be managed through available reserves as the year progresses. A potential
annual risk value equivalent to 1% of the approved budgeted contribution is
deemed reasonable. This equates to £0.9m. It is also recognised that any
potential unbudgeted use of reserves or additional funding, required for 2025-26,
will have implications for the HSCP 2026-27 and future years’ budget outlook.
The 2025-26 budget includes both Operational/Management and Policy savings
options, totalling £2.762m. Whilst the council has a good track record in
delivering savings, there is a risk that this target will not be fully delivered. A
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potential annual risk value equivalent to a 10% shortfall in the annual savings
target is deemed reasonable.  This equates to £0.3m. 
3.2.9 
3.2.10 
3.2.11 
3.2.12
There is an ongoing requirement to fund unavoidable inflationary cost increases
across a number of areas such as food and fuel. Inflation is currently exceeding
the latest Bank of England forecasts but is expected will fall back towards the 2%
government target later in the year.  This position will continue to be closely
monitored, with financial forecasts updated to reflect information available, on an
ongoing basis.  The annual budget is underpinned by inflationary assumptions,
however, there is a risk that inflationary impacts have been under-estimated. A
potential annual risk value equivalent to 10% of the inflationary assumptions in
respect of relevant non-pay budgets is deemed reasonable.  This equates to
£0.3m. 
Capital 
The funding framework for the approved Capital Plan includes capital receipts
from asset sales, estimated at £0.750m in 2025-26 and £1.750m over the 3 years
2025-28.  This is based on an assessment provided by the Estates Team in
January 2025, however, is subject to changing market conditions.  The level of
receipts that may reasonably be achieved will be kept under review, to reflect
changing market conditions and due diligence undertaken on asset condition. 
Any variation from this assumption will require to be managed within the overall
Capital Plan resources. It is generally the case that the capital programme
experiences slippage throughout the year and as such, this risk is expected to be
manageable.   
At the budget meeting in February 2024, £1.1m of funding was set aside as an
initial high level estimate of works anticipated to be required at the A816 Bealach
Mor to convert the temporary road into a permanent road.  An options study has
been carried out to explore a number of options for this stretch of road going
forward.  A report will be presented to EDI in September 2025 outlining 9 options,
which have been shortlisted to 4 at this stage.  The preferred option cost estimate
is significantly higher than the budget set aside in February 2024, estimated to be
between £7.25m and £8.5m.  Further work is required to develop a business case
options appraisal and we would look to get independent design and project
management consultants to take this forward.  Once we have firmer proposals,
this will be reported to Council and consideration will need to be given as to how
the shortfall will be funded. 
The capital programme is continuing to see significant price increases caused by
rising inflation and additional costs from suppliers, due to the challenges in
delivering capital projects within our geographical location.  Previous inflationary
contingencies set aside for the capital programme have now been fully allocated
but there could be other cost pressures in respect of projects within the current
capital programme, where contracts have yet to be entered into.  It will be
challenging to manage these impacts within available resources and target
completion timescales.  Mitigating actions will be taken to manage financial risk,
for example, re-profiling, project re-design, re-engineering or curtailment, and the
re-prioritisation of uncommitted resources across the programme.  However, there
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remains a risk that costs could increase for the projects that are included within
the capital plan. 
Council Wide Summary 
3.2.13  The council wide risks are summarised within the following table.   
Description Likelihood Assessed
Financial Impact
£m
Unbudgeted Severe Weather costs 3 1.0
Unfunded Pay Award 3 0.7
Utilities cost increases 3 0.9
Council Tax Income reduction 3 1.0
IJB refer to Council for additional
funding to deliver social work services
3 0.9
Shortfall in Savings delivery  2 0.3
Variation in non-pay inflation  3 0.3
Total  5.1 
3.3  Departmental/Service Risks 
3.3.1 Specific service financial risk are detailed within Appendix 1.  The following table
provides a summary of the number of risks within each department, across each
likelihood category, together with the potential annual financial impact value. 
Department 1 - Remote 2 - Unlikely 3 - Possible 4 - Likely 5 - Almost
Certain
Total
No £000 No £000 No £000 No £000 No £000 No £000
Chief
Executive's
Unit
0 0 0 0 0 0 0 0 0 0 0 0
Executive
Director
Douglas
Hendry
0 0 6 510 9 780 2 360 0 0 17 1,650
Executive
Director
Kirsty
Flanagan
4 375 1 100 7 1,181 3 850 0 0 15 2,506
Total 4 375 7 610 16 1,961 5 1,210 0 0 32 4,156 
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3.3.2 The current top 3 risks in terms of financial impact are noted in the table below.
Service Risk Title Risk Description Likelihood
Financial
Impact
£000
Roads and
Infrastructure
Services
Piers &
Harbours
Income
Changes to ferry services resulting in
reduced berthing and passenger
income.
4 600
Financial
Services
NDR
ALEO
Baseline
Scottish Government are going to
undertake a review of the current Arms
Length External Organisations (ALEO)
baseline for 2024-25 which could
increase the pressure on the balance of
costs vs relief.
3 316
Council Wide
- Commercial
Services
Council
Wide
Central
Repairs
Increased demands on central repair
budgets (CRA) due to a decrease in
Capital funding, increase in statutory
and emergency repairs and increases in
supplier /contractor charges. This
impacts on all departments of the
Council with a Central Repairs Budget.
4 300
3.3.3 The risks, which are considered likely total £1.210m and are detailed in the
following table:
Service Risk Title Description of Risk Likelihood
Financial
Impact
£000
Roads and
Infrastructure
Services
Piers &
Harbours
Income
Changes to ferry services resulting in
reduced berthing and passenger income.
4 600
Council Wide
- Commercial
Services
Council Wide
Central Repairs
Increased demands on central repair
budgets (CRA) due to a decrease in
Capital funding, increase in statutory and
emergency repairs and increases in
supplier/contractor charges. This
impacts on all departments of the
Council with a Central Repairs Budget.
4 300
Development
and
Economic
Growth
Homelessness
Temporary
Accommodation
Income
Unpredictable number of Homeless
applications. Inability to recover rent.
Increased costs of property maintenance
and tenancy change over.
4 150
Roads and
Infrastructure
Services
Fleet
Maintenance
Increased costs to maintain internal fleet
due to inflationary increases on vehicle
parts.
4 100
Legal and
Regulatory
Support
Elections Should a by-election be required this
would be an immediate cost pressure as
budget has been removed.
4 60
3.3.4 In addition to the specified service risks, there are 2 possible risks in respect of
waste (Compost Like Output, CLO, and Extended Producer Responsibility, EPR),
which at this point, are unquantifiable. The 2025-26 budget includes funding from
the Department of Environment, Food and Rural Affairs, DEFRA in respect of
EPR, however, there is uncertainty around the possibility of improvement actions
being imposed on local authorities. Details of any requirements, which may result
in additional costs being incurred by the authority, have not yet been confirmed,
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3.4
however, at this stage, the risk is deemed to be of minimal financial impact. In
respect of CLO, financial provision of £500k has been reflected within the annual
accounts for the year ending 31 March 2025. This cost estimate was calculated
on a basis agreed with Biffa, however, remains subject to approval by the Scottish
Environment Protection Agency, SEPA. There is a risk that SEPA may require
the disposal of CLO as landfill of contaminated waste, which would result in
significantly higher costs. At this stage, it is not clear to what extent the existing
waste earmarked reserve may mitigate this risk and any additional cost would
result in the unplanned depletion of the earmarked reserve.
Changes to Financial Risks
3.4.1 There have been 2 changes to the 2025-26 financial risk analysis since last
reporting. As outlined in paragraph 3.2.3, the likelihood of the 2025-26 Unfunded
Pay Award has increased from ‘2 – Unlikely’ to ‘3 – Possible’. In addition, the
potential annual risk value of the Piers & Harbours Income risk has increased
from £250k to £600k (+£350k), due to reduced service levels in respect of the
CalMac winter timetable for Mull, together with decreases in the tonnage of the
ferries that will cover this route. Further work is ongoing to fully assess this
impact.
3.5 Monitoring of Financial Risks
3.5.1 Financial risks are monitored and reviewed on an ongoing basis, with actions put
in place to continue to mitigate or manage these risks. The updated position on
financial risks will continue to be regularly reported to committee.
3.6 Future Years’ Risks
3.6.1 Financial risks impacting 2026-27 and future years will be reported as part of the
2026-27 Budget Pack.
4 CONCLUSION
4.1 This report summarises the known key financial risks facing the council in 2025-
26. There are 7 council wide and 32 service specific quantifiable risks identified,
with 5 categorised as ‘Likely’. These risks are monitored and reviewed on an
ongoing basis, with actions put in place to continue to manage or mitigate the
risks.
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5 IMPLICATIONS 
5.1 Policy - None.
5.2 Financial -  Outlines the potential annual value of financial risks 
5.3 Legal -  None.
5.4 HR -  None.
5.5 Customer Service- None.
5.6 Risk -  Provides details of financial risks.
5.7 Climate Change -  None.
5.8 Fairer Scotland Duty -  None.
5.9 Equalities - protected
characteristics -
None.
5.10 Consumer Duty -  None.
5.11 Island Communities -  None. 
5.12 Children’s Rights and
Wellbeing - 
None. 
Kirsty Flanagan
Executive Director/Section 95 Officer
09 September 2025 
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services 
APPENDICES
Appendix 1 – Departmental/Service Financial Risks 
For further information contact Carolyn Earl, Interim Head of Financial Services
Carolyn.Earl@argyll-bute.gov.uk
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APPENDIX 1
DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 AUGUST 2025
DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE
LIKELIHOOD
FINANCIAL
IMPACT
£000
Executive Director
Douglas Hendry
Commercial Services Catering Costs - Provision of
Meals to Early Years Children
The Children and Young People (Scotland) Act placed duties on Councils to
provide meals in an Early Years setting to entitled children where sessions span
over lunch time. The total quantum of grant funding is reducing and may not be
sufficient to fund the additional costs depending on uptake and the additional
costs to support the meal provision in partner provider settings.
Joint strategy with procurement colleagues to reduce potential impact
of supplier charges. Control food wastage/portion controls.
2 100
Executive Director
Douglas Hendry
Commercial Services Rental Income from Properties Due to current economic climate, there may be reduced ability to recover rental
income from leased properties or place suitable tenants in properties as leases
come to an end.
Management of leasehold properties by Estates team, any issues with
debt recovery being dealt with in line with Council debt recovery
policy.
2 60
Executive Director
Douglas Hendry
Commercial Services Surplus Properties Ongoing market difficulties lead to increased numbers of surplus properties, in
addition, as Our Modern Workspace Project gains traction more properties will
become surplus to operational requirements. There are residual running costs
associated with all surplus properties.
One Council property team in place who will monitor market
conditions and work with prospective tenants/ purchasers to let/sell
surplus properties.
3 50
Executive Director
Douglas Hendry
Commercial Services Leisure Service Level
Agreements
Increase in RPI and/or other running costs (eg utilities, payroll etc) resulting in
requests for additional funding.
Monitoring annual alteration to contract RPI rate, communication
with service providers and mitigation through financial forecasting and
review of existing budget.
3 100
Executive Director
Douglas Hendry
Commercial Services LiveArgyll Service Fee Inability to deliver required services within available budget resources (e,g. pay
award and ENICs budget pressures), resulting in increased service fee request.
Communication with service providers and mitigation through
monitoring and review of budget monitoring information and
forecasts.
3 100
Executive Director
Douglas Hendry
Council Wide -
Commercial Services
Council Wide Central Repairs Increased demands on central repair budgets (CRA) due to a decrease in Capital
funding, increase in statutory and emergency repairs and increases in
supplier/contractor charges. This impacts on all departments of the Council with
a Central Repairs Budget.
Joint strategy with procurement colleagues to reduce potential impact
of supplier/contractor charges. Close monitoring of central repairs
budgets and commitments and instructing only statutory
tests/inspections and essential repairs.
4 300
Executive Director
Douglas Hendry
Education ASN Support Demand for ASN support continues to increase. Scottish Government statistics
suggest a 3% year on year increase, resulting in an additional resource
requirement particularly where gaps in our enhanced provision exist. The
medium-term detriments on the development of young children which occurred
as a consequence of service closures during the COVID pandemic have increased
demands on the service as children require additional support to catch up. The
Additional Support for Learning National Implementation plan continues to
inform our strategic direction in line with the Angela Morgan Review.
Service is currently looking at alternative options for service delivery
to mitigate the inescapable pressures. Continuing to ensure robust
assessment of needs, monthly monitoring of budget, any delays in
recruitment factored into projections to enable informed decision
making on allocation of funding for new/amended /additional support
packages. Following a full ASN review, the service are currently
investing in the development of four new learning centres in order to
provide greater equity in meeting the more complex needs of some
learners as well as considering plans to develop enhanced wellbeing
resources across our learning estate in future. This aims to reduce the
frequency of children having to be educated in high cost out of area
placements.
2 50
Executive Director
Douglas Hendry
Education Pre-Five Units - retention of
partner providers
Failure in the commissioning or retention of pre-five partner provider units to
deliver 1140 hours would result in an increased pressure on the Council to
deliver the service.
Annual financial appraisal, uplift of sustainable rate to providers;
Support network; Short-term cash injections.
2 100
As at 31 August 2025
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Executive Director
Douglas Hendry
Education Children and Young People
(Scotland) Act - ELC 1140 hours
The Council has been required to deliver 1140 hours of Early Learning and
Childcare since August 2021. The Scottish Government has committed to funding
this and the Council has revised its service model to align it to the Scottish
Government's reduced funding profile. A risk remains that actual costs of
delivery exceed the Government Grant in any given year. For example, if child
numbers are higher than estimated, this may require additional staffing which
has not been included in the staffing model funded by Scottish Government.
Continuous monitoring and review of the service model, usage and
resources.
3 100
Executive Director
Douglas Hendry
Education Legislative Requirements -
Education (Scotland) Act
The Education (Scotland) Act 2000 requires Councils to undertake assessments of
the need for the provision of Gaelic Medium Primary Education (GMPE) and the
duty to support and promote Gaelic Education. This may lead to additional
staffing requirements depending upon the demand for Gaelic from parents.
Continuous monitoring and review of the service model and resources
available within budget.
3 50
Executive Director
Douglas Hendry
Legal and Regulatory
Support
Hub DBDA/DBFM Schools -
Litigation
Increased risk of the requirement to litigate due to latent defects in a number of
schools
Ongoing reporting of issues and monitoring of actions taken to repair. 2 150
Executive Director
Douglas Hendry
Legal and Regulatory
Support
Contract RPI for NPDO and Hub
Schools
Increase in RPI would result in higher costs. Monitoring annual alteration to contract RPI rate and mitigation
through financial forecasting and review of existing budget.
3 100
Executive Director
Douglas Hendry
Legal and Regulatory
Support
NPDO - Increase in insurance
costs within NPDO Schools
Increase in insurance costs as a result of the long-term effects of Covid-19 on the
insurance market and flood claims.
Monitoring annual alteration to contract insurance rate and mitigation
through financial forecasting and review of existing budget.
3 75
Executive Director
Douglas Hendry
Legal and Regulatory
Support
Elections Should a by-election be required this would be an immediate cost pressure as
budget has been removed.
Outwith direct management control. 4 60
Executive Director
Douglas Hendry
Legal and Regulatory
Support
Legal Services - Litigation Increased number of litigation cases. Ensure Legal Services are gateway to access all legal advice and that
advice is sought at earliest opportunity.
3 150
Executive Director
Douglas Hendry
Legal and Regulatory
Support
NPDO/Hub DBFM contract
management efficiencies
Reduction in ability to generate contract management efficiencies. Monitoring annual efficiencies generated and mitigation through
robust contract management and application of contract
specifications / requirements.
2 50
Executive Director
Douglas Hendry
Legal and Regulatory
Support
Licensing Reduced numbers of licensing applications leading to reduced income. Monitoring of trends and reporting the financial impact in the budget
monitoring.
3 55
Executive Director
Kirsty Flanagan
Customer Support
Services
Software Licences Potential risk of being under licensed for software which will be identified via
software audits which would incur additional costs.
ICT security and compliance officer in post and duties include review
of systems to ensure fully licenced.
2 100
Executive Director
Kirsty Flanagan
Development and
Economic Growth
Homelessness Temporary
Accommodation Income
Unpredictable number of Homeless applications. Inability to recover rent.
Increase costs of property maintenance and tenancy change over.
Provision of Housing Options information and advice service to
minimise number of applicants proceeding to full homeless
application. Implementation of Rapid Rehousing Plan.
4 150
Executive Director
Kirsty Flanagan
Development and
Economic Growth
Dangerous Buildings
Interventions
Building Standards having to deal with an increasing level of dangerous building
work which has significant financial implications for Council.
Monitor activity and seek to recover costs from the owner. 3 100
Executive Director
Kirsty Flanagan
Development and
Economic Growth
Planning Fee Penalties Potential that the Scottish Government may apply sanction penalties due to poor
performance by the Planning Authority. The Scottish Government has recently
appointed a national Planning Performance Champion however the detail of how
this role intends to incentivise improvement/penalise poor performance at a
local authority level remains unclear at this time.
Maintain high levels of performance as articulated by performance
markers detailed in Planning Performance Framework annual report.
1 100
Executive Director
Kirsty Flanagan
Development and
Economic Growth
Planning fee shortfalls Due to downturn in economic / building activity, in particular renewable energy
development and other major developments could lead to planning fee income
shortfalls leading to revenue budget pressures.
Current income levels are looking more positive, however, we are
dependent on some high value applications coming in which, if they
don't materialise, will impact the overall position. Will continue to
monitor Development Management income and expenditure tightly
and investigate further income generation streams.
1 100
Executive Director
Kirsty Flanagan
Development and
Economic Growth
Building Warrant fee shortfalls Due to loss of commercial income and downturn in economic / building activity,
building warrant fee income shortfalls leading to revenue budget pressures.
Continue to monitor Building Standards income and expenditure
tightly and investigate further income generation streams.
1 50
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Executive Director
Kirsty Flanagan
Financial Services NDR ALEO Baseline Scottish Government are going to undertake a review of the current Arms Length
External Organisations (ALEO) baseline for 2024-25 which could increase the
pressure on the balance of costs vs relief.
Outwith direct management control. 3 316
Executive Director
Kirsty Flanagan
Financial Services Housing Benefit Subsidy Loss of Housing Benefit Subsidy due to exceeding LA error threshold. Processes in place for handling of claims accurately and efficiently. 1 125
Executive Director
Kirsty Flanagan
Financial Services Sundry Debt Recovery Recovery of debt becomes more difficult to pursue in the current economic
climate.
Additional staff are being put in place in the Sundry Debt Team who
will work jointly with Legal Services to enhance the robustness of the
Council's debt recovery processes.
3 85
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Roads Maintenance - Roads
Network
Adverse weather conditions result in deterioration of the road network
necessitating greater spend on repair of defects.
Manage maintenance budgets to ensure that spend is prioritised to
deal with safety defects.
3 230
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Car Parking Income Reduced number of visitors to the area and use of council owned car parks
resulting in a reduction in income.
Closely monitor income levels throughout the year, especially in high
visitor seasons.
3 200
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Piers & Harbours Income Changes to ferry services resulting in reduced berthing and passenger income. Closely monitor passenger number information coming from CalMac
to identify any emerging trends with reducing passenger numbers.
4 600
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Winter Maintenance Adverse weather conditions which require greater than budgeted number of
gritting runs.
Monitor weather conditions and apply gritting policy to minimise
costs.
3 150
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Street Lighting Age of lighting stock requires greater maintenance as health and safety becomes
a consideration.
Manage maintenance budgets to ensure that spend is prioritised to
deal with safety defects.
3 100
Executive Director
Kirsty Flanagan
Roads and
Infrastructure Services
Fleet Maintenance Increased costs to maintain internal fleet due to inflationary increases on vehicle
parts.
Review of Fleet underway to determine where reductions could
possibly be made.
4 100
32 4,156
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 09 OCTOBER 2025
RESERVES AND BALANCES – UPDATE AS AT 31 AUGUST 2025 
1 EXECUTIVE SUMMARY 
1.1 The main purpose of this report is to advise Members of the nature and level of
reserves and balances currently held by the council.  It also provides details of the
earmarked reserve balances held within the General Fund and the unallocated
General Fund balance.   
1.2 The council had a total of £406.347m unusable reserves as at 31 March 2025 that
are not backed with resources. These are required purely for accounting purposes. 
1.3 As at 31 March 2025, the council had a total of £121.235m usable reserves,
comprising the following: 
• £3.608m Repairs and Renewals Fund;
• £3.358m Capital Funds; 
• £1.564m Capital Grants Unapplied; and
• £112.705m General Fund, with £105.162m of this balance earmarked for
specific purposes.
1.4  The council’s General Fund contingency is set at 2% of estimated net revenue
expenditure for 2025-26, which amounts to £6.539m.  At the beginning of the
financial year, there was an unallocated General Fund Balance of £1.004m over
and above the general contingency.  After taking into consideration the current
forecast outturn for 2025-26, this surplus is forecast to increase to £1.305m. 
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 09 OCTOBER 2025
RESERVES AND BALANCES – UPDATE AS AT 31 AUGUST 2025 
2 INTRODUCTION 
2.1 This report outlines the nature and level of reserves and balances, both usable
and unusable, currently held by the council.  It also provides details of the
earmarked reserve balances held within the General Fund and the unallocated
General Fund balance. 
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 Capital Grants
Unapplied and 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. These 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 are
examples of unusable reserves. 
3.2 Reserve Balances as at 31 March 2025 
3.2.1  The balances on each type of reserve as at 31 March 2025 are set out in the
tables below, per the Pre-audit Annual Accounts for 2024-25. 
Unusable Reserves £000
Revaluation Reserve 179,662
Capital Adjustment Account 256,344
Financial Instruments Adjustment Account (1,413)
Pensions Reserve (16,984)
Accumulated Absences Account (11,262)
Total Unusable Reserves 406,347 
Usable Reserves £000
Capital Grants Unapplied 1,564
Capital Fund and Usable Capital Receipts Reserve 3,358                                                                                                                
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Repairs and Renewals Fund 3,608
General Fund  112,705
Total Usable Reserves  121,235
Total Reserves  527,582 
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 as at 31
March 2025.
3.2.3 The Capital Grants Unapplied Fund holds capital grants and contributions that
have been received but not yet used to fund capital expenditure. 
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 the sale of council houses prior to the 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 Council in August 2012. 
3.2.6 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. 
3.3 General Fund 
3.3.1  The General Fund balance as at 31 March 2025 can be analysed as follows: 
Balance
£000
Balance on General Fund as at 31 March 2024 115,741
Movement in General Fund balance during 2024-25 (3,036)
Earmarked Balances (105,162)
Contingency allowance at 2% of net expenditure (6,539)
Unallocated balance as at 31 March 2025 1,004 
3.3.2  The General Fund includes reserve balances that Council has agreed to earmark
for specific purposes, as outlined within the 2024-25 year end report to Council. 
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The movement in the balance of earmarked reserves during 2024-25 is given in
the table below. 
£000
Earmarked Balance as at 31 March 2024 107,443
Funds used during 2024-25 (26,457)
New automatic earmarking at the end of 2024-25 (as per policy
on end of year flexibility)
8,278
Earmarking previously agreed and created during 2024-25 13,298
New earmarking proposals for approval 2,600
Earmarked Balance as at 31 March 2025 105,162 
3.3.3 The 2025-26 opening earmarked reserves balance of £105.162m includes a
significant level of reserves in respect of major infrastructure or projects of
strategic importance.  Similar to previous years, a review of earmarked reserves
will be undertaken during the year and reported to members, taking cognisance
of strategic priorities and the financial challenges currently facing the council. 
3.3.4 An element of the earmarked reserve balances will require to be drawn down in
2025-26, to meet expenditure incurred during the current financial year.  This
includes £2.953m to balance the 2025-26 budget, as previously approved by
Council in February 2025.  To assist with financial planning, a review of the
projected use of reserves across 2025-26 and future years, aligned to service
plans, has been undertaken by officers, with the projected use of resources
profiled across 2025-26 and future years.  The movement in the reserves balance
during 2025-26 and the profile of planned spend across 2025-26 and future years
will be monitored and reviewed on an ongoing basis throughout the year, with
regular update reports to committee. 
3.3.5 A summary of the earmarked reserves position by category is provided within
Appendix 1, while Appendix 2 provides a summary of the position across services
and departments, as at 31 August 2025.  A detailed analysis is given within
Appendix 3, outlining the purpose of each earmarked reserve, the opening
balance, amounts drawn down to date and the planned use of reserves across
2025-26 and future years.   
3.3.6 It should be noted that the council’s earmarked reserves include a historic balance
in relation to Social Work of £0.014m as at 31 August 2025.  As per CIPFA
LASAAC Guidance, any new earmarking relating to the HSCP since financial year
2020-21 must be held as a creditor on the Balance Sheet rather than an
earmarking within the council’s General Fund as this is money due to the HSCP. 
The balance held in this manner as at 31 March 2025 was £2.247m and does not
include the £0.500m of the Strathclyde Pension Fund saving in 2025-26 that
Council agreed to ring fence to support future HSCP transformation. 
3.4 Unallocated General Fund Balance 
3.4.1  The council’s General Fund contingency is set at 2% of estimated net revenue
expenditure for 2025-26, which amounts to £6.539m.   At the beginning of the
financial year, there was an unallocated General Fund Balance of £1.004m over
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and above the general contingency.   After taking into consideration the current
forecast outturn for 2025-26, this surplus is forecast to increase to £1.305m. 
3.4.2 The revenue budget monitoring position as at 31 August 2025 is a forecast
underspend of £0.301m. This is due to a forecast over-recovery of Council Tax
income, estimated at £0.500m; partially offset by net overspends across services,
totalling £0.199m. There is also a forecast overspend of £0.668m in respect of
Social Work services, however, the HSCP expect this to be managed from within
available HSCP reserves. 
3.4.3  The following table summarises the current position on the unallocated General
Fund balance, taking into consideration the points noted above. 
Description £000
Unallocated General Fund
as at 31 March 2025
This is the balance that is
unallocated over and above the 2%
general contingency, which amounts
to £6.539m
1,004
Current Forecast Outturn
for 2025-26 as at 31
August 2025
Per Revenue Budget Monitoring
report
301
Forecast Unallocated General Fund as at 31 March 2026 1,305 
4. CONCLUSION 
4.1 This report outlines the nature and level of reserves and balances held by the
council.  It also provides details of the earmarked reserve balances held within the
General Fund and the unallocated General Fund balance.   
4.2 After taking account of the current forecast outturn for 2025-26, the council’s
unallocated General Fund balance, over and above the general contingency
balance of £6.539m, is forecast to be £1.305m as at 31 March 2026. 
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 within the
council’s usable and unusable
reserves.    
5.3 Legal -  None.
5.4 HR -  None.
5.5 Customer Service None.
5.6 Risk -  A contingency of £6.539m (equivalent
to 2% of net expenditure) has been
set aside as part of the General Fund. 
This has been subject to a risk
assessment. 
5.7 Climate Change - None.
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5.8 Fairer Scotland Duty -  None.
5.9 Equalities - protected characteristics - None.
5.10 Consumer Duty -  None. 
5.11 Island Communities - None. 
5.12 Children’s Rights and Wellbeing - None. 
Kirsty Flanagan
Executive Director/Section 95 Officer 
09 September 2025 
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services 
APPENDICES
Appendix 1 – Earmarked Reserves Summary by Category as at 31 August 2025
Appendix 2 -  Earmarked Reserves Summary by Service as at 31 August 2025
Appendix 3 – Earmarked Reserves Detailed Analysis as at 31 August 2025 
For further information contact Carolyn Earl, Interim Head of Financial Services
Carolyn.Earl@argyll-bute.gov.uk 
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Classification: OFFICIAL #
Appendix 1
Earmarking
Category
Balance
31/03/2025 - per
year end
published report
New
Earmarkings in
year
Movement
between
categories
Invested or
committed for
major initiatives
/capital projects
Drawn-down to
2025-26 Budget
as at 31/08/25
Remaining
Balance as at 31
August
Released to
General
Fund
£ £ £ £ £ £ £
Strategic Housing
Fund 10,141,692 10,141,692 10,141,692
Investment in
Affordable Housing 3,024,000 3,024,000 3,024,000
Capital Projects 37,493,675 37,493,675 37,493,675
Lochgilphead and
Tarbert
Regeneration
288,579 288,579 288,579
Support for Rural
Growth Deal 441,690 441,690 441,690
Piers and Harbours
Investment Fund 5,303,977 5,303,977 5,303,977
Scottish
Government
Initiatives
1,156,530 333,118 823,412
CHORD 0 0
DMR Schools 1,205,590 15,622 1,189,968
Energy Efficiency
Fund 214,521 214,521
Unspent Grant 12,184,971 155,219 952,691 11,232,280
Unspent Third
Party Contribution 408,975 42,582 366,393
Previous Council
Decision - Other 4,274,925 720,486 19,800 4,255,125
Redundancy
Provision 2,659,358 2,659,358
Connect for
Success Fund 899,721 49,924 849,797
Fleet - Timing
Delay 483,661 483,661 483,661
Hermitage Park 56,383 56,383
Priorities
Investment Fund 1,426,800 1,426,800
Unspent Budget 14,294,911 228,130 14,066,781
SPF -
Transformation/spe
nd to save -
Council
2,004,764 64,797 1,939,967
Severe weather
related cost
reserve
4,244,000 4,244,000
To balance 25/26
Budget 2,952,661 2,952,661 0
Totals 105,161,384 0 0 58,052,979 4,659,325 100,502,059 0
Page 77

Page 78

Appendix 2
Service
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £
Community Planning 307,672                  121,949                  126,656                  181,016                  -                         
Chief Executive's Unit Total 307,672                 121,949                 126,656                 181,016                 -                         
Commercial Services 1,862,482              13,867                    56,546                    1,503,936              302,000                 
Education 9,775,650              1,042,505              3,834,956              5,653,268              287,426                 
Legal and Regulatory Support 663,875                  46,554                    319,911                  343,964                  -                         
Executive Director (Douglas Hendry) Total 12,302,007            1,102,926              4,211,413              7,501,168              589,426                
Customer Support Services 1,681,376              5,575                      613,387                  624,989                  443,000                 
Development and Economic Growth 6,296,428              23,093                    3,607,140              2,331,060              358,228                 
Financial Services 1,406,862              212,473                  726,638                  680,224                  -                         
Roads and Infrastructure Services 13,013,640            72,035                    4,468,424              1,664,018              6,881,199             
Executive Director (Kirsty Flanagan) Total 22,398,306            313,176                 9,415,589              5,300,291              7,682,427             
Council wide 5,252,661              2,952,661              3,852,661              900,000                  500,000                 
Non Departmental 64,833,188            114,721                  3,845,269              9,774,654              51,213,264           
Other Operating Income and Expenditure 53,892                    53,892                    53,892                    -                          -                         
Non Departmental Total 70,139,741            3,121,274              7,751,822              10,674,654            51,713,264           
Adult Services 13,658                    -                          13,658                    -                         
Social Work Total 13,658                    -                          -                          13,658                    -                         
Total 105,161,384         4,659,325              21,505,480            23,670,787            59,985,117           
Page 78

Page 79

Appendix 3
Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
2 NHS Highland and other CPP Partners Contribution Towards
the CPP Running and Project Costs Will be deployed as required in the day-to-day running of the Community Planning Partnership's operations. 83,368                   -                         83,368                   -                         83,368                   -                        
3
Community Planning - temp post to support communities
Post relating to the supporting communities fund, will be used in 2024-25 (£55k Unspent Grant Earmarking 003).  Merged September 24 per Council
decision with £9k Unspent Budget earmarking 006 for 'Communities and Partnership Team'  with these funds originating 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. 63,855                   17,850                   46,005                   20,000                   43,855                   -                        
5 Gaelic Development
To fund Gaelic specific work and project work of the Community Planning Partnership including the development of the new 10 year Outcome
Improvement Plan 15,984                   15,984                   -                         15,984                   -                         -                        
7 Recovered unspent third sector grant funding. To be distributed through the Supporting Communities Fund for communities based projects across Argyll and Bute. 672                        -                         672                        672                        -                         -                        
220 NHS Highland and other CPP Partners Contribution Towards
the CPP Running and Project Costs (blank) 35,000                   -                         35,000                   -                         35,000                   -                        
001 Service Concessions - Priorities Investment Fund (Area Plans)
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 108,793                 88,115                   20,678                   90,000                   18,793                   -                        
307,672                 121,949                 185,723                 126,656                 181,016                 -                        
307,672                 121,949                 185,723                 126,656                 181,016                 -                        
10
Rothesay Pavilion Charity
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.
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. 1,159,204             -                         1,159,204             -                         1,159,204             -                        
11
Climate Change Programme
At the Council Budget meeting on 24 February 2022, the Council committed to additional investments with £0.500m for Climate Change, building on
previous £1.1m investments, including projects within Argyll and Bute’s schools.  Expenditure in 23/24, draw down in 24/25. 302,000                 -                         302,000                 -                         -                         302,000                
13
Energy Efficiency Fund
The Central Energy Efficiency Fund (CEEF) was launched by SG in 2004 to support the delivery of energy efficiency and renewable energy measures.  The
original  allocation of funding was £286k and part of the stipulation of the funding was that any savings from energy efficiencies were reinvested into
the fund in energy efficiency measures.  The terms and conditions attached to the fund expired on 31 March 2016, however there is an expectation that
local authorities will maintain a revolving energy efficiency fund to support future carbon reducing projects. Projects expected to commence in 24-25
are Drainage Adaptations, Water Efficiency Works within PCs and Schools and Remote Energy Monitoring Systems. Additional funds from over recovery
of Renewable Energy Income. 214,521                 -                         214,521                 -                         214,521                 -                        
14 Commercial Investment Manager post and specialist
consultant technical resource (previously Asset Management
Fund)
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. 79,242                   -                         79,242                   -                         79,242                   -                        
15
Estates - NDR Revaluation Appeals
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. 59,938                   -                         59,938                   29,969                   29,969                   -                        
18
Site Investigation Works
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                   -                         33,710                   12,710                   21,000                   -                        
19
Free Sanitary Provision Scheme
To fund the continued implementation of the scheme through increased provision of reusable products, improved provision in rural communities by
working in partnership with Education and improving the storage of products in toilets so that they are more readily available. A dedicated officer was
appointed in November 2022 to develop the scheme and increase provision across Argyll and Bute including a postage facility. 13,867                   13,867                   -                         13,867                   -                         -                        
Commercial Services Total 1,862,482             13,867                   1,848,615             56,546                   1,503,936             302,000                
20
EDU - Early Learning & Childcare - 1140 Hours Expansion
The funds will be utilised to improve and expand the Argyll and Bute Early Years Delivery Plan for 1140 hours which will increase access to affordable
Early Learning and Childcare across the Council area. There is a detailed plan of spend which has been shared with S95 officer and Head of Finance.  The
Scottish Government were happy for us to move ahead with plan instead of losing funding.  For 2024-25 the ring fencing has been removed, however
the wording of the letter states funds must still be used for Early Years. 3,906,651             209,748                 3,696,903             811,370                 3,095,281             -                        
9 Digital Projects (Supply Staff Booking System)
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. 5,300                     -                         5,300                     5,300                     -                         -                        
Chief Executive's Unit Total
Chief Executive's Unit
Community Planning
Executive Director (Douglas Hendry)
Commercial Services
Education
Community Planning Total
Page 79

Page 80

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
21 ASN Review
Transferred from Education to fund ASN review upgrades in Islay High School, Castlehill Primary School, Tobermory High School and Hermitage
Academy 967,574                 -                         967,574                 -                         967,574                 -                        
23
Provision for Learning Estate Investment Programme
At the Council Budget meeting on 24 February 2022, the Council committed to additional investments - £1m to help safeguard and support future
learning for Argyll and Bute's Learning Estate Investment programme. Update: The LEIP funding bid was approved by SG late 2023. Council approval
granted at 25th April 2024 meeting to commence business case, undertake engagement exercises and site selection process. Permission was also
approved for spend up to £5m. 1,000,000             -                         1,000,000             -                         1,000,000             -                        
25 DSM - Devolved School Management Scheme To be spent in accordance with DSM regulations. 1,205,590             15,622                   1,189,968             1,205,590             -                         -                        
27 100 Day Promise - Increase Teacher and Pupil Support
Assistant Numbers
Scottish Government initiative to increase the number of teachers and support assistants in schools. Required to fund teachers to end of academic year
and beyond. 593,197                 -                         593,197                 93,197                   500,000                 -                        
29
Access to Counsellors in Schools
Government initiative to support delivery of the access to school counselling service, in line with the commitment set out in Programme for
Government. The delivery of the service will enable children and young people to be supported with issues affecting their mental health and wellbeing.
The service is currently seeking the views of head teachers around the need for increased counselling for under 10s.  Service is also engaged in multi-
agency discussions around the development of a single point of access and the School Counselling monies will help support the development of this in
collaboration with HSCP. 275,251                 275,251                 -                         275,251                 -                         -                        
31 Pupil Equity Fund Carry Forward To provide targeted support for children and young people affected by poverty to achieve their full potential.  Funding is used over the academic year. 274,549                 274,549                 -                         274,549                 -                         -                        
32 Additional Support Needs - Additional Support for Learning
Project
Government initiative to support the provision of support staff in schools as part of 'Support for Additional Support for Learning Implementation'. The
funding will be used to supplement the ASN Assistants budget 25-26 by funding additional support need hours required due to a lack of local specialist
provision in some areas, as well as for vital training for visual and hearing impairment specialists which a significant number of Argyll and Bute's children
require. 216,557                 -                         216,557                 216,557                 -                         -                        
35
Strategic Equity Fund
Strategic Equity Funding must provide targeted support for children and young people (and their families if appropriate) affected by poverty to achieve
their full potential, focusing on targeted improvement activity in literacy, numeracy and health and wellbeing. The Strategic Equity Fund Spending Plan
will enhance staffing, provide teacher cover and support to schools not in receipt of PEF funding, to be spent by the end of the 2024-25 academic year. 84,235                   84,235                   -                         84,235                   -                         -                        
36
MCR Pathways Pilot
Funding to support implementation of MCR Pathways mentoring programme within three secondary schools for 2025-26 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                   -                         80,000                   -                         80,000                   -                        
37
Scottish Milk and Healthy Snack Scheme (SMHSS)
The Scottish Milk and Healthy Snack Scheme funds a daily portion of plain fresh cow’s milk (or specified alternative) and a healthy snack (fruit or
vegetables) for pre-school children spending 2 hours or more in the care of a regulated day care provider and/or childminders that has registered for
the Scheme.  The unspent grant from 2024/25 will contribute towards the cost of the scheme in 2025/26. 71,846                   -                         71,846                   71,846                   -                         -                        
40 EDU - Music Instructors Scottish Government Initiative to support music tuition. Unspent amount designated for expansion of the service within the 2024/25 academic year. 44,000                   44,000                   -                         44,000                   -                         -                        
41 Youth Music Initiative To fund YMI projects across the remainder of the academic year 2024/25. 40,647                   40,647                   -                         40,647                   -                         -                        
42 Gaelic Specific Grant
Gaelic 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 25-26 academic year. 30,000                   30,000                   -                         30,000                   -                         -                        
43 (2023 Digital Projects) Cashless Catering
To support the ongoing implementation of the new cashless catering system during the testing and roll out phase.
£20k released back to General Fund September 24 per Council decision as no longer required. 5,004                     -                         5,004                     -                         5,004                     -                        
46 Scottish Attainment Challenge - Care Experienced CYP
Funding
To provide targeted support for care experienced children and young people to achieve their full potential. The balance funds a Virtual Head Teacher
and Health and Wellbeing Family Support Workers. Earmarked funding is allowing the Virtual HT to create impact both within Education but also to
drive forward work around The Promise across partners and other services. 8,007                     8,007                     -                         8,007                     -                         -                        
53 Play on Pedals
Unspent Play On Pedals grant to allow the procurement of a fleet of cycles and helmets to support delivery across up to 19 nurseries, as well as other
equipment and maintenance. 1,553                     1,553                     -                         1,553                     -                         -                        
54 Food for Thought
Ardrishaig Primary £872 and Gigha Primary & ELC £403 have orders pending and plans for the remaining balance of the Food for Thought Grant.  Will be
spent in 2025-26 1,275                     -                         1,275                     1,275                     -                         -                        
198 ASN Review Upgrades - Capital
Transferred from Education to fund ASN review upgrades in Islay High School, Castlehill Primary School, Tobermory High School and Hermitage
Academy 287,426                 -                         287,426                 -                         -                         287,426                
205 Foundation Apprenticeships Foundation Apprentice Income to cover employee and material costs for remainder of academic year 2024-25 42,582                   42,582                   -                         42,582                   -                         -                        
206 School Meal Debt Grant Scottish Government Grant funding - overpayment received from SG combined with debtors balances yet to be written off 9,774                     4,365                     5,409                     4,365                     5,409                     -                        
207 Gaelic Learners in Primary Schools 9GLPS)
The Gaelic Learners in Primary Schools grant funding is funding for Tutor costs and online training sessions.  The unspent grant will be utilised in 2025-
26 in accordance to current spending plans. 7,661                     7,661                     -                         7,661                     -                         -                        
208
Bord na Gaidhlig - Gaelic Plans Fund
The Education Service is in receipt of grant funding from Bord na Gaidhlig from the Gaelic Plans Fund.  Within Education the grant is part-funding the
Furan Gaelic Centre and Online Team Teaching.  The Grant Income Profile does not match the Expenditure Profile with the result that surplus funding
from 2024-25 requires to be carried forward to help offset a shortfall in the Grant Income Profile in 2025-26. 2,790                     2,790                     -                         2,790                     -                         -                        
209 Raise - Drax Funding
The Drax Community Fund provides small grants and donations of up to £2,000 to support local projects and programmes that deliver social and
economic benefit within the communities where Drax operates. £1,998 awarded, remaining funds, project to June 25 1,311                     1,311                     -                         1,311                     -                         -                        
210 Raise - RSC Funding Royal society of Chemistry for £500, The Inspiring Young Chemist Fund. 184                        184                        -                         184                        -                         -                        
Page 80

Page 81

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
197
Education Network Programme
Council agreed to merge 030/033/034/049 as they all related to the Education Network Programme:
EMR030 - Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund - Continuation of funding for additional staffing,
teachers, support staff, additional devices for pupils and additional family/home learning programmes. £351k at 31/03/24.
EMR033 - School WiFi Upgrades - 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. £167k at 31/03/24.
EMR 034 - Education Transformation Fund - 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.  £145k at 31/03/24.
EMR 049 - Skype for Business for Education - 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. £10k at 31/03/24. 612,686                 -                         612,686                 612,686                 -                         -                        
9,775,650             1,042,505             8,733,145             3,834,956             5,653,268             287,426                
211 MS365 Completion of Project Rollout Additional Funding required to complete the MS365 project 49,800                   -                         49,800                   49,800                   -                         -                        
57
Meridian BCMS (Business Continuity Management System)
Meridian BCMS (Business Continuity Management System)
For period covering: 19th February 2024 – 18th February 2027
Civil Contingencies System, this earmarking will be used over the next 6 years for maintenance costs for Meridian BCMS 37,376                   19,800                   17,576                   19,800                   17,576                   -                        
58 LRS - Housing Services - Welfare Rights
Grant agreement between the Improvement Service and Argyll and Bute Council for participation in the Welfare Advice and Health Partnerships- ‘Test
and Learn’ Programme 19,535                   19,535                   -                         19,535                   -                         -                        
59
Education Purchasing Officers
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. 210,000                 -                         210,000                 -                         210,000                 -                        
60
CCTV Maintenance
Maintenance of CCTV systems.  Funds transferred from external bodies (Police Scotland) to maintain systems for future years Council Decision of 20
Sept 2007.  Merged with funds from Community Safety Partnership to be used for Community Safety Partnership purposes.
98,426                   -                         98,426                   50,595                   47,831                   -                        
61
Information Management (Digitalisation of Title Deeds)
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: Digitalisation of Title Deeds £92k - document management. Staffing
now in place for this project to be completed. 92,000                   -                         92,000                   46,000                   46,000                   -                        
62
Welfare Rights Support
As agreed at the Council Meeting on 25 February 2021 - an allocation of £0.172m.  As part of our focus on Improving Opportunities for People and
Communities, agrees to provide additional resources to proactively support people experiencing poverty and hardship, by investing in two additional
Welfare Rights support staff for two years. 66,728                   -                         66,728                   66,728                   -                         -                        
63
(2023 Digital Projects) Replacement of Council Chambers
Online Meeting Equipment
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 44,718                   7,219                     37,499                   44,718                   -                         -                        
64 Councillor IT Equipment
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. 44,557                   -                         44,557                   22,000                   22,557                   -                        
66
Debt Counselling & Welfare Rights
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. 735                        -                         735                        735                        -                         -                        
663,875                 46,554                   617,321                 319,911                 343,964                 -                        
Executive Director (Douglas Hendry) Total 12,302,007           1,102,926             11,199,081           4,211,413             7,501,168             589,426                
68 Digital Projects (Increase in Schools Bandwidth)
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. 63,455                   -                         63,455                   -                         63,455                   -                        
69
Digital Projects (Replacement Learning Management System)
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                   -                         11,470                   11,470                   -                         -                        
71
Microsoft Licensing Costs
To meet  licensing and set-up costs for the Microsoft 365 rollout.  The spend is profiled and reported to MS365 board each month. Currently projecting
£74k 24/25, 272k 25/26, 454k 26/27  but all subject to change if licence upgrades are required for Power BI or Teams Telephony.  The above profile
would mean we will exhaust earmarkings in 26/27 but still expect to have a cost pressure in 26/27 of £27,309 and a much larger cost pressure from
27/28 onwards of at least £377k. 726,632                 -                         726,632                 257,266                 469,366                 -                        
72
ICT computer replacement
At the Council Budget meeting on 23 February 2023, the Council committed to supporting the council's digital resilience and overall efficiency with
investment in ICT assets.  £88k will be drawn down in 24-25 for expenditure incurred in 23-24, £323k drawn down in 25-26 for expenditure planned in
24-25 with the balance of £120k drawn down in 26-27. 443,000                 -                         443,000                 -                         -                         443,000                
Education Total
Legal and Regulatory Support
Legal and Regulatory Support  Total
Executive Director (Kirsty Flanagan)
Customer Support Services
Page 81

Page 82

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
74
Skills Development Scotland
ER074 24-25 - £151k - We receive the money from Skills Development Scotland (SDS) to enable us to deliver Foundation and Modern Apprenticeship
programmes. The money covers the salaries of the two Tutors we employ and also any materials we require to deliver the programmes. Update: This
is being spent on contract overlaps around the move from Resourcelink, Crown, Iken to ITrent. Delay in start of project due to resource in ITrent.
Reprofiled for 25-26.
Agreed by Council September 24 to merge with 085 Establishing HR Service Centre (£14k) - 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 following delays in itrent
project. 164,760 - 164,760 164,760 - -
75
Growing our Own and Modern Apprentices
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 will be in
25/26 once a suitable candidate is in post. Post interviewd for, awaiting references. Successful candidate unlikely to start before April 25.
Balance of £40k released back to General Fund per Council decision September 24 as only £69k is still required for the intended purpose. 69,150 - 69,150 69,150 - -
76 Security Operations Centre Subscription
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. 71,188 - 71,188 42,406 28,782 -
77
(2023 Digital Projects) Resilient Website Project
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. 46,000 - 46,000 23,000 23,000 -
78 (2023 Digital Projects) Digital Project Officer
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 - 34,121 34,121 - -
79
Implementation of Gaelic Language Plan
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. 30,000 - 30,000 - 30,000 -
80
Business Development Training
£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. 11,214 5,575 5,639 11,214 - -
81 Bord na Gaidhlig
Grant funding from Bord na Gaidhlig. Ongoing spend ad hoc to deliver on commitments in the Gaelic Language Plan. Grant income from GLAIF
continues to be added to this total and then paid out to projects. 10,386 - 10,386 - 10,386 -
1,681,376 5,575 1,675,801 613,387 624,989 443,000
204 Planning Services
Depending on the outcome of a number of S36 Windfarm planning applications, this earmarking will be used to cover consultation advice and a
potential public inquiry if applications are refused. 300,000 - 300,000 150,000 150,000 -
212 Community Led Local Development 2024-25 grant funding for Community Led Local Development 82,466 - 82,466 82,466 - -
213 Empty Business Property Officer To fund Empty Business Property Officer post into 26-27. 73,118 - 73,118 50,000 23,118 -
214 Addressing Depopulation Fund - Private Sector Resettlement
Officer To fund Addressing Depopulation post during 25-26. 56,309 - 56,309 56,309 - -
215 Levelling Up Partnership Funds 2024-25 grant funding for Levelling Up Fund 45,000 - 45,000 45,000 - -
221 Short Term Lets (blank) 126,109 - 126,109 - - 126,109
222 Rothesay Pavilion
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. 76,900 - 76,900 - - 76,900
70
Information Management (Document Management and
Workflow for Planning, Building Standards and
Environmental Health)
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 - 21,177 - 21,177 -
Customer Support Services Total
Development and Economic Growth
Page 82

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Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
86
Crown Estates
2024-25 Crown Estates Grant to be spent on a number of projects.
2023-24 grant funding for Coastal Communities Fund (Crown Estates) Original EMR086- £838k
2022-23 grant funding for Coastal Communities Fund (Crown Estates). Balance remaining at 23-24 year end £981 (EMR087). Projects ongoing -
Rockfield Centre (£60k), Campbeltown War Memorial (£17k) and Bowmore Hall (£53k). The remaining projects are underway with no confirmed spend -
Jura Passenger Ferry (£100k), Pier Feasibility Studies (£100k), Airport Resilience (£100k), Cemetery Maintenance (£300k), Kilmartin Car Park (£50k) and
Electric Charging Points (£200k).
2021/22 Crown Estate Funding (Coastal Communities Fund) - £857k remaining at 23-24 year end- EMR088). The remaining projects are underway -
Tarbert Public Realm (£196k - contract in place, spend during 24-25), Kilmory Industrial Estate (£150k - no indication of when will be needed), Rothesay
Kiddies Corner (£44k, no indication of when will be drawn down at present), Jura Community Gigsbit Programme (£50k, no indication of when will be
spent), Dunoon Cycle Bothy (£145k, work ongoing to progress this project, hopefully will be spent 24-25), Dunoon STEM hub (£150k, work ongoing to
progress this project, hopefully will be spent 24-25), Glenmorag Caravan Site (£100k, works are starting with spend expected during 24-25), £22k
contingency.
2020/21 Crown Estate Funding (Coastal Communities Fund) with balance at 31/03/24 of £419k 24-25 EMR089). Remaining balance for Campbeltown
Community Action Plan (£50k), Helensburgh Clyde Street (£350k), Bute Community Land Bike Transfer Station (£10k) Modular Hub Lochgilphead (£5k)
and Tarbert Public Realm (£4k) to be spent in 24-25. 2,776,190 - 2,776,190 1,000,000 1,776,190 -
90
UK Shared Prosperity Fund (UKSPF)
2022-23 grant funding for UK Shared Prosperity Fund (UKSPF). Funding can be spent up to end of March 2025 & 2023-24 grant funding for UK Shared
Prosperity Fund (UKSPF).
spend currently £742K grant of £2.5m received in April, all to be spent by March 2025.
Dec 24 Some projects are currently underspent and any underspent may have to be returned to the Govt. we have been advised a further allocation will
be made in 25/26.
Year end 24-25
The UK Government have extended the UKSPF for a final, transitional year (2025/26). MoU has been signed for the funding. However, the UK
Government has indicated that, rather than asking for money to be returned, they will reduce the amount they send us in FY25/26 by our underspend
from the 2022-2025 programme, so that it ‘works out’. i.e. we have been allocated c £1.4million for this FY so are expecting roughly the balance based
on the funds remaining in the reserve to be sent to us to fund this years programme. An amount will to remain which is administration funding used
within our team. So effectively we are expecting what you have there to be ‘topped up’ relatively soon and then spent by end of the FY.
2024-25 grant funding for UK Shared Prosperity Fund (UKSPF). 1,079,897 - 1,079,897 1,079,897 - -
91 Scottish Government Islands Programme 2023-24 grant funding for Scottish Govt Islands Programme. (Tobermory Housing RGD) 324,085 - 324,085 270,045 54,040 -
92 Place based investment programme
Projects approved at 12 August 2021 P&R Committee totalling £821k, Remaining funds committed. Includes 2023-24 grant funding for Place Based
Investment Programme. 232,779 - 232,779 232,779 - -
93
Short Term Lets
These monies are to fund the STL licensing scheme until the renewal period of 27/28 as the majority for the licences will have renewal dates of 2027.
There will also be ongoing staffing costs, maintenance fees for ICT systems and ongoing fees associated with short-term let licensing. Income from the
scheme is intended to be directed to delivering the licensing scheme 232,604 - 232,604 - 232,604 -
95
LHEES (Local Heat & Energy Strategy)
This is used to finance the delivery of the Local Heat and Energy Strategy, involving resourcing a full time member of staff and use of external
consultants. This is fulfilling a statutory requirement for the Council. Production of the LHEES will be instrumental in achieving funding for the
decarbonisation of heat and energy use in Argyll and Bute’s Buildings. 61,105 - 61,105 10,000 51,105 -
97 Islands Infrastructure Fund
2022-23 grant funding for Islands Infrastructure Fund.
Dec 24 Draw down will be in Q4 24/25 35 - 35 35 - -
98
Shelter Scotland Housing Funding
Contribution from Shelter Scotland to fund 50% of a 2 year temporary Empty Homes Officer. Post holder now in place with remainder of costs to be
incurred and earmarking drawn down in 25-26.
Dec 24 Costs partially frawndown remainder by Q4. Post funded by HSCP in future years 9,373 - 9,373 9,373 - -
101
Coastal Communities (Capital)
2020/21 Crown Estate Funding (Coastal Communities Fund) totalling £1.504m. Expenditure/allocation to projects delayed due to covid, now allocated
as per report to P&R on 18 Feb 2021. Projects include Dunoon STEM Hub 100k, Dunoon Cycle Bothy 249k, Ardrishaig North Project 50k and Arrochar
car park £90k. 155,219 - 155,219 - - 155,219
102
Staycation and Marketing Argyll and Bute
As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.800m. This will include provision of additional waste disposal
facilities and other facilities that will be informed by the Motorhome and Informal Camping Survey.
As agreed at Council on 24 February 2022, Staycation investment £0.100m. Augments the 2021/22 £0.5m staycation initiative with an additional
investment of £100k, including support for community groups and partners in the provision of facilities which can support increasing staycation visitor
numbers during the tourist periods. A further £155k committed for 24-25 across Clipper Race (£30k), Road Signs (£50k) and Marketing (£75k).
Balance of £62k released back to General Fund per Council decision September 24 leaving the balance of £155k which is required for the intended
purpose.
Dec 24 marketing £56250, & clipper both drawn down, roads 50 still in discussions 68,750 - 68,750 68,750 - -
104
Lochgilphead CARS
Conservation Area Regeneration Scheme for Lochgilphead Grants awarded to upgrade conservation areas in Lochgilphead such as shop fronts, town
centre accommodation and other priority buildings. No drawdown required in 23/24 .These are multi year projects with spend generally increasing
towards the end of the project life. Spend committed for 2024-25 and beyond. Project runs until March 2026. 200,000 - 200,000 200,000 - -
105 Service Concessions - Priorities Investment Fund (Project
Officer for Housing Emergency)
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 200,000 23,093 176,907 200,000 - -
106 Helensburgh CARS
Conservation Area Regeneration Scheme for Helensburgh. Grants awarded to upgrade conservation areas in Helensburgh such as shop fronts, town
centre accommodation and other priority buildings. 37,486 - 37,486 37,486 - -
Page 83

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Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
107
Strategic Events & Festivals
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 1,460                     -                         1,460                     1,460                     -                         -                        
108
Tackling Digital Exclusion Top-Up Fund
As agreed at the Council Meeting on 25 February 2021  to support communities and in some cases individuals that are missing out on national
programmes due to logistics and economies of scale.  
Earmarking was originally £217,600 but £177,600 has been released back to the general fund.  The  balance is committed  for Mobile Mapping (£25k)
with expenditure expected during 24-25 and the current Kerrera project (£15k) in 25-26. 14,000                   -                         14,000                   14,000                   -                         -                        
109
Economic Development - temp post to support economic
recovery
As agreed at Policy & Resources committee on 9 December 2021, allocation of £0.055m to a post to support the economic and social recovery together
with the building back stronger themes.  To be used to fund Settlement Project Support Officer during 23-24.  Post holder resigned Dec 23.
Dec 24 looking unlikely post will be filled though negotiations still taking place
Year End 24-25
Management decided to carry on with this post for a further year, position is now filled and employment commences  on 2nd June 2025.   We also just
had notification that the SG will contribute £22,500 tpwrds costs to be claimed at end of year 35,895                   -                         35,895                   35,895                   -                         -                        
111
Gypsy Traveller Grant/LACER Funding (Gypsy Travellers)
Local Authority COVID Economic Recovery Fund grant.  This funding would pay for MECOPP (Minority Ethnic Carers of People Project) to engage with
the Gypsy Travellers community on the important subject of the cost of living increases, fuel poverty and the impact of factors such as their remote rural
locations and the facilities available to them for everyday living  have on their livelihoods. This was originally LACER and additional funding routed
through SG for Gypsy Traveller sites received on behalf of ACHA (the sites have been transferred to ACHA). This therefore isn't all a Council budget. The
ACHA element of funding was for site improvements - hence the planned roadway improvements
Year end 24/25 awaiting invoice from ACHA for payment for roadway improvements expected q1 25/26 32,826                   -                         32,826                   10,000                   22,826                   -                        
112
Screen Machine
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 5,000                     -                         5,000                     5,000                     -                         -                        
115
LACER Funding (Sector Support Grant)
Local Authority COVID Economic Recovery Fund grant.  This will provide funding, either part of the small  business development grant or standalone, to
help micros and small business to implement projects that contribute to the sector as well as benefitting the business, for example: Tourism and
hospitality, food and drink or retail.  With option to provide additional business support to hard hit areas including Bute and Kintyre where
unemployment remains higher than average - support via specialist advice, locally tailored grants to meet local priorities and targeted marketing
activity. to be split £115,000 for Shop fronts and £35,000  Business support via Business Gateway. As at 31/03/2024 Shop fronts have £9860 remaining
and Bus support £9050. The Bus support element along with ER refs 122 & 124 (totalling 36130) are to be spent on Digital Reviews as agreed at P&R
committee on 09.05.2024. We expect to commit all the spend in this FY 24-25, but as suppliers are paid for work only after it has been completed, some
of the costs may not actually be defrayed until Q1 25-26
Shop fronts now all spent Business support ongoing 4,606                     -                         4,606                     4,606                     -                         -                        
116
EH Covid Posts
Funding initially for 2 posts for 2 years.  Posts were initially recruited to with one leaving and the other going on maternity leave resulting in delays in
expenditure.  Council agreed September 24 to allow a change of use as unable to recruit to the posts.  To be used to fund additional costs related to the
review and assessment of site investigation reports and provide support to consultants. 13,062                   -                         13,062                   13,062                   -                         -                        
117
LACER Funding (Shop Local)
Local Authority COVID Economic Recovery Fund grant.  This funding would provide funding to continue the Shop Local scheme into 2023/24 and
2024/25, buying additional cards and allow the cards to gather momentum and support local businesses.
Dec 24 spend should be through by Q4 24/25 5,997                     -                         5,997                     5,997                     -                         -                        
118
LACER Funding (Small Business Development Grant)
Local Authority COVID Economic Recovery Fund grant.  This funding will provide funding of between £500 and £5,000 to help existing micro and small
businesses to improve their resilience or growth via projects to implement green initiatives, implement digital development, implement marketing
improvements and improve efficiency/innovation. 
This along with ER 115 & 122  (totalling 36130) are to be spent on Digital Reviews as agreed at P&R committee on 09.05.2024 We expect to commit all
the spend in this FY 24-25, but as suppliers are paid for work only after it has been completed, some of the costs may not actually be defrayed until Q1
25-26
Year End 24-25 funds will not all be fully spent until q2 25/26 12,651                   -                         12,651                   12,651                   -                         -                        
119
LACER Funding (New Enterprise Support Grant)
Local Authority COVID Economic Recovery Fund grant.  This funding would provide £3,000 grants to help new businesses start up and establish. 
This along with ER 115 & 124  (totalling 36130) are to be spent on Digital Reviews as agreed at P&R committee on 09.05.2024 We expect to commit all
the spend in this FY 24-25, but as suppliers are paid for work only after it has been completed, some of the costs may not actually be defrayed until Q1
25-26
Year End 24-25 funds will not all be fully spent until q2 25/26 12,329                   -                         12,329                   12,329                   -                         -                        
Development and Economic Growth Total 6,296,428             23,093                   6,273,335             3,607,140             2,331,060             358,228                
201 Food banks
At the budget meeting in February 2025, it was agreed that general reserve would contribute £5k to each of the 12 foodbanks across Argyll and Bute
and its islands making a total investment of £60k to assisy local families in coping with the cost of living pressures 60,000                   -                         60,000                   60,000                   -                         -                        
216 LACER Funding Food banks - make payment to 12 local community food organisations 64,260                   60,000                   4,260                     64,260                   -                         -                        
217 Empty Property Relief (blank) 224,214                 -                         224,214                 224,214                 -                         -                        
218 FIS - Scottish Welfare Fund - Community Care Grants (blank) 400,054                 -                         400,054                 100,000                 300,054                 -                        
Financial Services
Page 84

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Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
121
Benefit Admin Grant
Grant monies which would have to be repaid if not utilised for intended purpose.  Benefit Administration activities in the build up to the migration of
Housing Benefit to Universal Credit.  These monies are committed to cover ongoing Benefit Administration activities in 22/23, 23/24 and 24/25 when it
is now expected that the full migration of working age Housing Benefit caseload to Universal Credit will be complete.  Monies will be used to implement
the recommended changes from the recent Revs and Bens BPR including ongoing improvements to the Council's debt recovery policies (£50,000), build
resilience including staff overtime, outsourcing of Housing Benefit processing during the transition and cover casual staff for the Universal Credit
migration (£20,500). Monies also set aside for additional works to the value of £40,000 with the software suppliers around enhancing the Revs and
Bens system, automating processes and transitioning customers to use digital gateways to contact the service. 155,166                 -                         155,166                 20,000                   135,166                 -                        
122
Housing Benefits Private
Specific funding allocation for Housing Benefit including DHP. Funds will be used to continue to support vulnerable people initially financially affected by
the COVID-19 outbreak but now facing the cost of living crisis to sustain their tenancies.  This earmarking will help offset potential overspends in the
DHP/ Scottish Welfare Fund budget going forward. 107,444                 -                         107,444                 50,000                   57,444                   -                        
123
Flexible Food Fund
Financial Insecurity funding from Scottish Government routed into the Argyll and Bute Flexible Food and Fuel Fund (ABFFFF) is aimed at tackling
financial insecurity for adults and families across Argyll and Bute.  Working in partnership with the Community Food Forum, Bute Advice Centre and
ALIenergy, households with low incomes and no access to cash savings can apply for immediate financial support.  The Fund helps support daily living
expenses.   Since inception in January 2021 until March 2023 client gain in extra benefits income for families was £3.8 million with 2,500 families had
been supported. The project has been extended to 31 March 2025 with funding coming from the UK Shared Prosperity Fund and this earmarking to
support it. The Council's Financial Inclusion and Advice Group have proposed that monies from the Flexible Funding for Supporting People at tier 4
COVID earmarking should be used to support this project to ensure it can continue to the contract end date of 31 March 2025. The Scottish Government
have provided this funding and have endorsed this award winning project promoting it as part of the solution to end the need for foodbanks nationally. 22,561                   22,561                   -                         22,561                   -                         -                        
124 Revenue and Benefits BPR  - extra staff to implement savings
targets
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.  86,955                   -                         86,955                   -                         86,955                   -                        
125
Cost of Living Payments - Admin funding
Administration funding associated with Scottish Government schemes to issue monies to Low income Households for the Cost of Living Payments. To
provide additional staffing to help with the backlog and to support the administration of the double charges on second homes in 2024/2025. We
continue to receive a large number of enquiries from this customer profile particularly given upcoming changes being made by the Assessor at DABVJB 72,550                   72,550                   -                         -                         72,550                   -                        
126
Flexible Funding for Supporting People while at Tier 4 COVID
Funding from SG to strengthen local authority responses to meet emerging needs and support people in their communities struggling with the
restrictions and guidance at all protection levels re COVID, particularly those at risk through health and social inequalities. This support could cover the
same types of support.  In June 2021 the Council agreed to support 20 projects led by a range of Council officers, officers from the HSCP and members
of the third sector to deliver wide ranging support across our region.  A report will be presented to members in due course. 58,981                   32,000                   26,981                   58,981                   -                         -                        
128
Pandemic Support Payments (CTR - Admin)
Administration funding associated with Scottish Government schemes to issue monies to CTR recipients. Provide additional staffing to support the
recovery from backlog of Council Tax administration caused by Pandemic Support Payment process, further administration duties related to LACER fund
and also to support any further Scottish Government funding initiatives that occur during 24/25 51,968                   23,269                   28,699                   51,968                   -                         -                        
129 Financial Systems The council is required to implement the IFRS16 Leases accounting standard  from the 1st April 2024. 33,748                   -                         33,748                   33,748                   -                         -                        
130 Accounting and Budgeting Team Resilience
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. 36,055                   2,093                     33,962                   8,000                     28,055                   -                        
131 FIS - BEIS Energy Grants
Grant monies which would have to be repaid if not utilised for intended purpose, Additional staff to cover pressures of administering double charge of
council tax in 2nd homes £28k 27,590                   -                         27,590                   27,590                   -                         -                        
132 Self Isolated Support Grant Unspent admin funding for processing Self isolation Support Grants. 5,316                     -                         5,316                     5,316                     -                         -                        
1,406,862             212,473                 1,194,389             726,638                 680,224                 -                        
199 Cardross Cremator - Capital £26,592 transferred from Waste Variation ER 134 to fund capital cost relating to the cremator at Cardross during 24-25. 26,592                   -                         26,592                   -                         -                         26,592                  
200 Gartbreck Cell - Capital £250k transferred from Waste Variation ER 134 to fund capital cost relating to Gartbreck Cell during 24-25. 250,000                 -                         250,000                 -                         -                         250,000                
133
Service Concessions - Biodegradable Municipal Waste (BMW)
Ban
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.  
Following a project review of the Helensburgh Waste Transfer Station this is no longer going ahead.  The earmarking continues to be required to assist
with the financial pressures in relation to BWW Ban compliance and the end of the PPP contract.  The proposal is to amalgamate this reserve with the
existing waste earmarking, reference 134. 3,500,000             -                         3,500,000             -                         -                         3,500,000            
134
Waste Variation Monies
Waste Variation Monies - £1.465M (£1.242m balance at 31/03/24 (Original EMR134) plus
Council agreed to merge with EMR149 £223K 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)
£465K 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, technology trial on blue bin recycling participation, consultancy costs relating to additional monitoring data for
SEPA and Consultancy update on waste options appraisal.
£990K in 2025-26  consisting of:- Island restoration/capping, waste PPP conversion of sites (including consultants for waste PPP MBT conversion
monitoring and sign off), consultancy costs relating to additional monitoring data for SEPA and Recycling Improve Fund design works.
£10K in 2026-27 consisting of:-  consultancy costs relating to additional monitoring data for SEPA. 1,000,043             -                         1,000,043             1,000,043             -                         -                        
135
Roads Reconstruction programme
At the Council Budget meeting on 23 February 2023, the Council committed to augmenting overall allocation for the roads repair and maintenance
programme with additional funds to bring up to £8m total investment for 2023/24 and 2024/25.  This will be drawn down to the capital plan during 24-
25 and 25-26. 1,042,000             -                         1,042,000             0                             -                         1,042,000            
136 Footpath improvements
At the Council Budget meeting on 23 February 2023, the Council committed to providing additional funding for footpath improvements across Argyll
and Bute. Spend forecast for 23/24, draw down in 24/25. 219,000                 -                         219,000                 0                             -                         219,000                
Financial Services Total
Roads and Infrastructure Services
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Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
137 Vehicle Replacement
Timing delay in fleet replacement causing one-off saving.   Vehicles purchased and received in 22/23 for £174k, draw down to capital will be processed
in 23/24.  remainder has been spent in 23-24 and will be drawn down in 24-25. 483,661                 -                         483,661                 0                             -                         483,661                
138 Service Concessions - Priorities Investment Fund (Strategic
Development Framework)
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. 433,804                 72,035                   361,769                 433,804                 -                         -                        
139
Active Travel
At the Council Budget meeting on 24 February 2022, the Council committed to additional investments.  For Active Travel £0.500m for further
improvements for footpaths and pavements and supporting safer routes to schools across Argyll and Bute. Some capital expenditure to be incurred in
22-23 and drawn down in 23-24, remainder planned to be spent in 23-24 and drawn down in 24-25. 181,000                 -                         181,000                 -                         -                         181,000                
141
3G pitches / Tarbert Sports Pitches
In November 2018, the Council agreed to a maintenance funding package to be progressed for a number of 3G pitches including Tarbert. This funding
was proposed to 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 1 employee that will need to be covered from the remaining balance. Paper on proposed extension to be prepared. 213,769                 -                         213,769                 150,000                 63,769                   -                        
143
Hermitage Park
The Hermitage Park regeneration project has a significant investment from the Heritage Lottery Fund (HLF) which has a requirement to have a 10 year
Management and Maintenance Plan.  This will be partly funded by existing Council revenue budgets but should also be supplemented by any additional
income which can be generated from park activities.  Part of the HLF conditions are that all income generated by the park should be retained to support
the Management and Maintenance Plan and a result of this requirement, any unspent income generated by the park is retained for future years
requirements. Notification at the start of August 2024 that the lessee of the Pavilion cafe in the park has gone into liquidation.  Awaiting a conclusion
from the liquidators to determine the potential extent of the aged debt that will be written off.  It is anticipated this earmarked reserves will assist with
any aged debt as well as continue to fund park maintenance to ensure green flag status is retained.  It should be noted that the park has stopped
generating income to top up the reserve, given the library and pop up kiosk are currently located in the Pavilion.  To date the Service have had no
update on the timescales on these temporary arrangements. 56,383                   -                         56,383                   30,796                   25,587                   -                        
144 Parking Grant
Grant from Scottish Transport for the assessment of footway parking required under the Transport (Scotland) Act 2019.  Assessment criteria from the
Scottish Gov which will take approx. 12 months to complete throughout 23/24 with work then to follow in 24/25. 50,013                   -                         50,013                   50,013                   -                         -                        
145
Mercury Abatement - Crematorium
Phase 1 and 2 of Cardross Crematorium work completed. Phase 3 of the Cardross Crematorium works commenced April 2024. Delayed by Property
Services in appointing a Contractor. As a consequence the work will not be concluded until 2025-26. These works will ensure DDA (Disability
Discrimination Act) compliance. 14,456                   -                         14,456                   14,456                   -                         -                        
146
Climate Change
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                   -                         40,942                   -                         40,942                   -                        
150
Piers and Harbours Investment Fund
Funding generated through increased harbour fees and charges in order to generate funds to meet the costs of the prudential borrowing required to
develop and maintain the Council's harbour assets and infrastructure. Under the Harbours Act 1964, section 42, as a statutory harbour undertaker, the
Council must prepare an annual statement of accounts relating to the harbour activities and any associated activities for each harbour for which it is the
statutory harbour authority. This requirement cannot be satisfied by the preparation of a statement of accounts which relates to other Council activities
in addition to harbour activities.  In essence, any surplus in the Piers and Harbours budget must be reinvested in the marine asset and reflected in
accounts.  Reserve will not be needed until circa 2026-27 when borrowing costs will exceed the additional income received in revenue and reserve will
then be used to pay borrowing costs.
Income from P&H to be used to pay of Prudential Borrowing costs for Harbour Investment Programme. 5,303,977             -                         5,303,977             2,789,311             1,335,720             1,178,946            
151
Weather Incident costs not covered by Bellwin claim.
£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                 -                         198,000                 -                         198,000                 -                        
13,013,640           72,035                   12,941,605           4,468,424             1,664,018             6,881,199            
Executive Director (Kirsty Flanagan) Total 22,398,306           313,176                 22,085,130           9,415,589             5,300,291             7,682,427            
202
Top up to Transformation/Spend-to-save fund
In order to support the longer term budget approach it is certain that there will be a requirement for some up-front expenditure which could range
from buying in expertise to challenge the status quo in some service areas, providing seed corn funding for the development of new ways to deliver
services, commissioning business case preparation for opportunities that could deliver savings/increased income in the future and staff time to manage
what is going to have to be a significant programme of transformation/service re-design.  1,000,000             -                         1,000,000             250,000                 250,000                 500,000                
203
Storm Eowyn
The estimated gap for Storm Eowyn was estimated at £0.712m in June 2025.  This gap does not include any costs for Helensburgh Leisure Centre.  On
the basis that the Council will require to undertake a technical assessment that will not be covered by the Insurers like for like cover and in the
knowledge that not all costs incurred by the Council will ultimately be recoverable, it would be prudent to set aside some funding to cover any
additional costs to ensure that the HLC is suitably reinstated for use at the earliest opportunity.  A total earmarking of £1.2m.  1,300,000             -                         1,300,000             650,000                 650,000                 -                        
219 GF - to be used to fund 2025-26 Budget (blank) 2,952,661             2,952,661             -                         2,952,661             -                         -                        
5,252,661             2,952,661             2,300,000             3,852,661             900,000                 500,000                
157 Service Concessions - Roads Investment to Capital
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. 1,246,000             -                         1,246,000             -                         -                         1,246,000            
158 Investment in Affordable Housing Agreed at Council Meeting 11 February 2016.  This balance reduces as the Loans to RSL balances are reducing. 3,024,000             -                         3,024,000             -                         -                         3,024,000            
159
Redundancy Costs
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. Future redundancies provision. Given the budget gap over the next 5 years and 61% of our costs being staff costs, redundancy costs are likely to
increase and there is a need to provide for possibillity of covering those costs. 2,659,358             -                         2,659,358             100,000                 100,000                 2,459,358            
Roads and Infrastructure Services Total
Council wide
Non Departmental
Council wide Total
Non Departmental
Page 86

Page 87

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
160
Further Capital pressures per budget pack February 22
As agreed at Council on 24 February 2022, a provision for Capital contract increases £3.900m.
£1.133m draw down in 24-25 for Campbeltown Flood plus a further £0.468 for other capital increases.
£0.322m draw down in 25-26 for ICT and £0.279 in 26-27.
£0.446m is unallocated 1,302,000             -                         1,302,000             -                         -                         1,302,000            
161 Capital Budget
At the Council Budget meeting on 22 February 2024, the Council committed to allocating released earmarkings amounting to £2.212m towards the
Capital budget. 2,212,000             -                         2,212,000             -                         -                         2,212,000            
162 Capital Budget (Previously Asset Management Fund)
At the Council meeting on 22 February 24, it was agreed that the balance in this reserve be allocated to the Capital budget.  Exact profile not known for
the capital projects this will be funding but likely draw down will be 25-26. 151,190                 -                         151,190                 -                         -                         151,190                
163
Service Concessions - Capital Projects Inflation Pressures
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 2,000,000             -                         2,000,000             -                         -                         2,000,000            
164 Pay Inflation Contingency
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 1,297,550             -                         1,297,550             700,000                 597,550                 -                        
166 Campbeltown Flood Prevention Funding agreed as part of the Loans Fund Review for Campbeltown Flood Prevention.  1,331,000             -                         1,331,000             -                         -                         1,331,000            
168 Regeneration and Economic sustainability in Lochgilphead
and Tarbert.
Agreed at Council Meeting 11 February 2016.  £761k will be drawn down in 24-25 to fund prior years expenditure for Lochgilphead Front Green and
Ardrishaig North.  £289k unallocated. 288,579                 -                         288,579                 -                         -                         288,579                
169 Service Concessions - Priorities Investment Fund (Capital
Programme) 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             -                         1,028,000             -                         -                         1,028,000            
171
Oban TIF (Tax Incremental Financing - Excess NDR)
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 875,651                 -                         875,651                 -                         875,651                 -                        
172 Oban TIF
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. 1,526,750             -                         1,526,750             -                         751,929                 774,821                
173 Service Concessions - New refuse collection vehicles As agreed at Council meeting 23 February 2023 - Enhancing waste and recycling uplift arrangements through placing orders for new refuse vehicles. 700,000                 -                         700,000                 -                         -                         700,000                
174
Connect for Success Fund (previously Supporting
Organisational Change) - amended February 24 per ELT)
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 - Provision to support organisational change (£0.500m)
It is proposed to supplement the existing 'Supporting Organisational Change' reserve first established in February 2020 with a further £1.2m to enable
the Council to deliver longer term, more fundamental, service redesign which will require funding to support the identification and delivery of  solutions
that take account of future requirements and community engagement and deliver longer term revenue and benefits to the Council
899,721                 49,924                   849,797                 100,000                 406,271                 393,450                
175
Service Concessions - Climate Change
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. 610,343                 -                         610,343                 -                         -                         610,343                
176
Inward investment Fund
Agreed at Council Meeting 11 February 2016.   Original balance of funding was £833k for Rural Growth Deal - P&R Committee have already approved
spend of £600k leaving a balance of £233k uncommitted. The approved spend consists of consultancy, project development and design and the
remaining £233k will be used for the same purpose to complete design work and get endorsed full business cases to allow RGD projects to commence. 441,690                 -                         441,690                 -                         -                         441,690                
179 Capital Inflation cost pressures Further allocation agreed Council meeting 22 February 24 - increase capital contract earmarking to protect current capital projects in plan £0.297m 297,000                 -                         297,000                 -                         -                         297,000                
181 Capital pressure
Pressure identified on the 20/21 COSLA COVID costs spreadsheets - requires to be earmarked to be drawn down when required against the Capital Plan. 
To be incurred during 23-24 and drawn down in 24-25. 257,000                 -                         257,000                 -                         -                         257,000                
182 Service Concessions - New Jet Patcher Vehicle
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                 -                         250,000                 -                         -                         250,000                
183 Service Concessions - New Road Marking Vehicle
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. 230,000                 -                         230,000                 -                         -                         230,000                
184
Information Management (Balance of Funding)
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                 -                         200,469                 200,469                 -                         -                        
185
Levelling up bid costs (Recovery and Renewal Fund)
As agreed at Council on 24 February 2022, Recovery and Renewal Fund £1.547m.  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.  Commitments have
been made against this fund as follows: Levelling up bid costs £0.150m, Scotland Loves Local overspend £0.037m and Rothesay Pavilion £1.360m. 150,000                 -                         150,000                 150,000                 -                         -                        
186 Engagement with Hub North re provision of services for older
adults and vulnerable people across Argyll and Bute
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 95,005                   -                         95,005                   -                         95,005                   -                        
187
Spend to Save Route Optimisation Software
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. 55,484                   -                         55,484                   -                         55,484                   -                        
188 CHARTS
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. 5,000                     -                         5,000                     -                         5,000                     -                        
Page 87

Page 88

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
189
Levelling up Fund bids per P&R February 22
£15k to be drawn down in 2024-25 for post that is currently in place. £55k to be utilised in 2024-25 for Student Summer post, contaminated land
consultants, ICT development, increased costs for current staff on a temp arrangement and to part fund 2 year temporary Regulatory Service Officer
post.
Not all spend has been agreed yet and business cases are pending. 70,000                   -                         70,000                   70,000                   -                         -                        
190 Scotland Loves Local Overspend (Recovery and Renewal
Fund)
As agreed at Council on 24 February 2022, Recovery and Renewal Fund £1.547m.  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.  Commitments have
been made against this fund as follows: Levelling up bid costs £0.150m, Scotland Loves Local overspend £0.037m and Rothesay Pavilion £1.360m. 37,000                   -                         37,000                   37,000                   -                         -                        
156B Service Concessions - Priorities Investment Fund (Storm Cost
Reserve)
Agreed at Council meeting February 27 2025 - Storm Costs, plus agreed amount in  P&R Paper - 15th August 2024 - Agenda Item 18 as not utilised in
24/25 2,944,000             -                         2,944,000             -                         2,944,000             -                        
156C
Service Concessions - Priorities Investment Fund (Creation of
Business Cases for Future Development of Leisure Facilities in
Dunoon)
Agreed at Council meeting February 27 2025 - Funding allocated towards creation of a business case for future development of leisure facilities in
Dunoon 200,000                 -                         200,000                 200,000                 -                         -                        
156F Service Concessions - Priorities Investment Fund (CHARTS) Agreed at Council meeting February 27 2025  to fund CHARTS - funding capped at 75k 75,000                   -                         75,000                   75,000                   -                         -                        
156G Service Concessions - Priorities Investment Fund (AITC) Agreed at Council meeting February 27 2025  to fund AITC 75,000                   -                         75,000                   75,000                   -                         -                        
156H Service Concessions - Priorities Investment Fund (Islay Pool) Agreed at Council meeting February 27 2025  to fund Islay Pool 30,000                   -                         30,000                   30,000                   -                         -                        
156I Service Concessions - Priorities Investment Fund (National
Patk) Agreed at Council meeting February 27 2025  to fund National Park 10,000                   -                         10,000                   10,000                   -                         -                        
156J Service Concessions - Priorities Investment Fund (Clipper
Race) Agreed at Council meeting February 27 2025  to fund clipper Race, plus remainder of agreed amount in P&R meeting on 9th May 2024 29,800                   -                         29,800                   29,800                   -                         -                        
194B Council Strathclyde Pension Fund Saving 24-25 (£3.75m
allocation to capital plan)
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. 3,361,742             -                         3,361,742             -                         -                         3,361,741            
194C Council Strathclyde Pension Fund Saving 24-25 (£2m to be
directed to transformation and projects that will save
revenue in the future)
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. 1,004,764             64,797                   939,967                 68,000                   936,764                 -                        
196 Capital Plan 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             -                         1,875,000             -                         -                         1,875,000            
152
Strategic Housing Fund
Accumulation of Council tax collected from the second homes discount on properties is earmarked as part of the Strategic Housing Fund balance.   Plans
in place to utilise £11.472m over the next 5 years to provide affordable housing as part of the Strategic Housing Improvement Plan which will utilise this
reserve as well as future income expected from Council Tax on second homes.
Strategic Housing Fund. Council tax collected during 2024-25 from the second homes discount on properties. Requires to be earmarked as part of the
Strategic Housing Fund balance. 10,141,692           -                         10,141,692           2,000,000             2,000,000             6,141,692            
153 Service Concessions - Learning Estate Investment Strategy
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. 8,000,000             -                         8,000,000             -                         -                         8,000,000            
154 Service Concessions - Replace previous loans fund principal
repayment holiday
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             -                         5,400,000             -                         -                         5,400,000            
155
Rothesay Pavilion - Capital Spends (previously service
concession)
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). 7,438,400             -                         7,438,400             -                         -                         7,438,400            
156
Service Concessions - Priorities Investment Fund
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. 1,007,000             -                         1,007,000             -                         1,007,000             -                        
64,833,188           114,721                 64,718,467           3,845,269             9,774,654             51,213,264          
191 Educational Support to Ukrainian Children and Young People
Balance of grant received in 2022-23 for provision of childcare and education support to Ukrainian children and young people. Spending plan includes
teaching and support staff within schools. 53,892                   53,892                   -                         53,892                   -                         -                        
Other Operating Income and Expenditure Total 53,892                   53,892                   -                         53,892                   -                         -                        
Non Departmental Total 70,139,741           3,121,274             67,018,467           7,751,822             10,674,654           51,713,264          
Adult Services
Social Work
Non Departmental Total
Other Operating Income and Expenditure
Page 88

Page 89

Ref Description Plans for Use
Opening Balance
1 April 2025
Drawndown 2025-
26 as at 31 August
Remaining
Balance as at 31
August
Planned Spend FY
2025-26
Planned Spend
2026-27
Planned Spend
2027/28 onwards
£ £ £ £ £ £
192
See Hear Funding
Funding has been received specifically from the Scottish Government to support activity around implementation of the See Hear recommendations and
the identified priorities of individual Sensory Partnerships. No plans for spend in current financial year, funds will be used in the next two years in
accordance with the See Hear plan and Argyll and Bute's BSL Local plan. 13,658                   -                         13,658                   -                         13,658                   -                        
Adult Services Total 13,658                   -                         13,658                   -                         13,658                   -                        
Social Work Total 13,658                   -                         13,658                   -                         13,658                   -                        
Grand Total 105,161,384         4,659,325             100,502,059         21,505,480           23,670,787           59,985,117          
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Page 91

ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 9 OCTOBER 2025
BUDGET OUTLOOK 2026-27 TO 2030-31  
1. EXECUTIVE SUMMARY 
1.1 This report summarises the Budget Outlook for the 5-year period 2026-27 to
2030-31 and provides an update to the position previously reported to the
Policy and Resources Committee in August 2025.  It is underpinned by
planning assumptions that will continue to be updated and refined, on an
ongoing basis, throughout the year. 
1.2 The Budget Outlook has been prepared using three different scenarios, best
case, worst case and mid-range.  The detailed information contained within the
report focusses primarily on the mid-range scenario, however, all three
scenarios are outlined within Appendix 1. 
1.3 
1.4 
1.5 
1.6 
There are no changes to suggested planning assumptions in respect of
Scottish Government funding, ranging between an increase of 0.25% (best
case) and a reduction of 0.75% (worst case), with a reduction of 0.25% in the
mid-range scenario.   
Additional recurring Scottish Government funding to fully meet the increased
cost of the 2025-26 pay award, in respect of both council and Social Work
services, continues to be assumed for planning purposes, with additional
funding in respect of the 2026-27 pay award assumed in the best case
scenario only.  Our current Budget Outlook also continues to assume that the
Teachers pay award for 2025-26 and 2026-27 will be agreed at the same level
as the agreed SJC and Chief Officers pay award, with additional match
Scottish Government funding.  However, this offer has initially been rejected by
Trade Unions, representing a financial risk to our current planning
assumptions. 
The Head of Local Government Finance recently confirmed the Scottish
Government’s intention to provide multi-year budgets.  This should provide a
greater level of certainty in respect of our longer-term planning assumptions. 
However, it is also worth noting that, at the time of writing, the proposed timing
of the Scottish Budget announcement is 15 January 2026.  Although still to be
confirmed, this prolongs the timescale for confirmation of the final budget gap. 
There are no changes to the previously reported updated planning
assumptions in respect of Department of Environment, Food and Rural Affairs
(DEFRA) funding available in respect of Packaging Extended Producer
Responsibility.  The funding allocation for 2025-26 has been confirmed at
£2.786m, providing a reduced carry forward of £1.438m into 2026-27.  It
remains uncertain as to whether this funding will be recurring in 2026-27 and
future years, without a reduction in Scottish Government grant.  At this stage,
Page 91 Agenda Item 5

Page 92

funding is assumed to continue into 2026-27 and future years at the 2025-26
level in the best case, at 50% of the 2025-26 level in the mid-range and £nil in
the worst case scenarios.  Funding conditions and future years budget
pressures remain unclear. 
1.7 
1.8
There are no changes to previous assumptions in respect of Council Tax
growth.  The Council Tax base is assumed to grow by 0.25% in the worst case,
0.5% in the mid-range and 0.75% in the best case scenarios.   
The 2024-25 final outturn included additional income of £1.234m in respect of
2024-25 and prior years, an element of which was expected to be recurring in
2025-26 and future years.  A more sophisticated financial modelling tool has
now been developed to assist with Council Tax income projections.  However,
there is currently a significant level of uncertainty in respect of the classification
of self-catering units as either non-domestic or domestic dwellings, and the
implications for council tax income, presenting a risk to financial planning
assumptions.  At this stage, a re-base of the current Council Tax budget,
estimated at £0.500m in the mid-range scenario (£0.250m in the worst case
and £0.750m in the best case scenarios) continues to be assumed within the
Budget Outlook.  This position will be subject to ongoing review and refinement
throughout the year.     
1.9 There has been no change to the following employee costs assumptions since
last reporting: 
• An increase of 4% for 2025-26 and 3.5% for 2026-27 across all scenarios,
3% for 2027-28 in both the best case and mid-range scenarios, with 5%
assumed in the worst case scenario.  For 2028-29 and 2029-30, the best
case scenario has been reduced to 2%, while the mid-range remains at 3%
and worst case remains at 5%.  
• The Teachers pay award now covers the period August to July and has
already been agreed up to 31 July 2025.  At this stage, an increase for
2025-26 and 2026-27 has been assumed in line with the SJC agreed pay
award.  However, this is still at a negotiating stage.  Any increase beyond
planning assumptions will have a further impact on the base budget and
Budget Outlook position.
• The cost of pay increments for 2025-26 is estimated at £0.599m.  For future
years, an equivalent cost has been assumed in the mid-range and worst
case scenarios, while half the estimated 2025-26 cost has been assumed in
the best case scenario. 
1.10 For non-pay inflation, only unavoidable inflation has been provided for within
each scenario, with the mid-range scenario based on current market forecast
data, where available.  A further general inflation contingency has been built
into the mid-range and worst case scenarios.  This position continues to be
monitored in light of market volatility.  However, at this stage, given prevalent
levels of uncertainty, there continues to be no change to the inflationary
assumptions included within the 2025-26 Budget Pack. 
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1.11 There are a number of cost and demand pressures for council services built
into each scenario, across all five years, comprising the following: 
• ASN Support
• School Clothing Grants
• Schools Residential
• Education ICT Network Infrastructure
• Election Costs
• Planning (Local Development Plan)
• Universal Credit – HB Admin grant 
• Civica Revenue and Benefits Management System 
• Microsoft 365 Licenses
• Compliance with BMW Ban 
• Bus Transport Contracts
• Valuation Joint Board
• Security Operations Centre Contract Renewal
• Wi-Fi Network Subscription 
1.12 In addition to the identified cost and demand pressures, a general allowance
for currently unforeseen or unquantifiable cost and demand pressures
continues to be included in each scenario (best case £0.250m, mid-range
£0.500m and worst case £1m per year). 
1.13 Political decisions will require to be made in respect of the allocation to the
Health and Social Care Partnership in future years, subject to Scottish
Government grant funding and the council’s overall financial position.  As part
of the 2025-26 budget process, indicative base allocations of £85.045m were
agreed for 2026-27 and 2027-28, subsequently updated in respect of the 2025-
27 pay award and funding assumptions.  The current and forecast financial
position of the HSCP represents a significant risk to the council.  
1.14 The updated budget gap in the mid-range scenario, prior to measures to
balance the budget, either from previous savings decisions or new potential
options, is estimated at £15.485m in 2026-27 and £58.346m over the five year
period 2026-27 to 2030-31. 
1.15 The measures to balance the budget over the next five years remain as
follows: 
• Proposed increases to fees and charges of between 3% and 9% each year
(6% mid-range).
• Proposed increases to Council Tax at 5% each year across all scenarios.
• Management/Operational and Policy savings already agreed by Council in
February 2025 and previous years. 
1.16 The updated budget gap in the mid-range scenario, after measures to balance
the budget, is estimated at £10.586m in 2026-27 and £33.858m over the five
year period 2026-27 to 2030-31.   
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1.17 The updated budget gap in the best case scenario is estimated at £4.543m in
2026-27 and £10.725m over five years, increasing to £15.706m in 2026-27 and
£65.565m over five years in the worst case scenario.  A summary of all three
scenarios is included within Appendix 1.  
1.18 It is recommended that the Policy and Resources Committee consider the
current Budget Outlook position for the period 2026-27 to 2030-31. 
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 9 OCTOBER 2025
BUDGET OUTLOOK 2026-27 TO 2030-31
2. INTRODUCTION
2.1 This report summarises the Budget Outlook for the 5-year period 2026-27 to 2030-31 and
provides an update to the position previously reported to the Policy and Resources
Committee in August 2025. It is underpinned by planning assumptions that will continue to
be updated and refined, on an ongoing basis, throughout the year. It should be noted that
relatively small variations in planning assumptions can lead to fairly significant changes to
the budget forecast outcome.
2.2 The Budget Outlook has been prepared using three different scenarios, best case, worst
case and mid-range. The detailed information contained within the report focusses
primarily on the mid-range scenario, however, all three scenarios are outlined within
Appendix 1.
3. RECOMMENDATIONS
3.1 It is recommended that the Policy and Resources Committee consider the current Budget
Outlook position for the period 2026-27 to 2030-31.
4. DETAIL
4.1 Funding
Scottish Government Finance Settlement
4.1.1
4.1.2
Estimated future Scottish Government funding levels is one of the key assumptions under-
pinning the Budget Outlook. Whilst council’s are recommended to prepare longer-term
financial plans, with a focus on financial sustainability, this is more challenging with one
year only finance settlements. Council’s have continued to lobby via COSLA for multi-year
settlements to assist with longer-term financial planning.
The Head of Local Government Finance recently confirmed the Scottish Government’s
intention to provide 3-year revenue and 5-year capital grant figures, albeit the level of
detail remains to be clarified. This is very welcome and should provide a greater level of
certainty in respect of our Budget Outlook planning assumptions. However, it is also worth
noting that, as a result of the delayed UK budget announcement (now confirmed as 26
November), at the time of writing, the proposed timing of the Scottish Budget
announcement is 15 January 2026. Although this timescale has still to be confirmed,
given that the level of government grant funding is a key assumption within our Budget
Outlook, this prolongs the period of funding uncertainty and confirmation of the budget
gap.
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4.1.3
4.1.4
There are no changes to Scottish Government grant funding assumptions since last
reporting. As part of the 2025-26 budget setting process, members were advised that
despite an unexpected effective increase of 1.47% in our 2025-26 settlement, it would be
imprudent to assume similar increases in future years, with increases over the previous 3
years being as low as 0.01%. Current suggested planning assumptions are for a Scottish
average increase in Scottish Government funding of 0.5% for the mid-range, with a
variation of 0.5% for the best and worst case scenarios. As this council relies on the floor
mechanism to protect its funding level, our settlement is lower than the Scottish average
change. The floor was set at 0.75% below the Scottish average in 2025-26 and is likely to
continue at this level. As such, funding assumptions for this council range between an
increase of 0.25% (best case) and a reduction of 0.75% (worst case), with a reduction of
0.25% in the mid-range scenario.
Additional recurring funding to fully meet the increased cost of the 2025-26 pay award, in
respect of both council and Social Work services, continues to be assumed for planning
purposes, with additional funding in respect of the increased cost of the 2026-27 pay
award assumed in the best case scenario only. Our current Budget Outlook also
continues to assume that the Teachers pay award for 2025-26 and 2026-27 will be agreed
at the same level as the agreed SJC and Chief Officers pay award, with additional match
Scottish Government funding. However, this offer has initially been rejected by Trade
Unions, representing a financial risk to our current planning assumptions.
4.1.5 The table below summarises the mid-range scenario estimates based on a 0.25%
settlement reduction year on year. This includes additional funding in respect of the
agreed 2025-26 pay award for SJC and Chief Officers, and assumed for Teachers, in
respect of both council and HSCP staff (Social Work services).
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
SG Funding - Base 261,058 260,406 259,755 259,106 258,459
2025-26 Pay Award 2,305 2,300 2,294 2,288 2,282
Total SG Funding 263,363 262,706 262,049 261,394 260,741
4.1.6 As part of the 2025-26 budget process, £2.499m of the estimated 2025-26 funding
available in respect of Packaging Extended Producer Responsibility from the Department
of Environment, Food and Rural Affairs (DEFRA) was carried forward into 2026-27. As
previously reported, the funding allocation for 2025-26 has been confirmed at £2.786m,
£1.061m less than the original estimate provided by DEFRA of £3.847m, reducing the
carry forward into 2026-27 to £1.438m. It remains uncertain as to whether this funding will
be recurring in 2026-27 and future years, without a reduction in Scottish Government
grant. At this stage, funding is assumed to continue into 2026-27 and future years at the
2025-26 level in the best case, at 50% of the 2025-26 level in the mid-range and £nil in the
worst case scenarios. Funding conditions and future years budget pressures remain
unclear.
Council Tax
4.1.7 The Council Tax base for 2025-26 is set at £70.204m, which reflects the 9.9% increase
agreed by the Council on 27 February 2025.
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4.1.8
4.1.9
4.1.10
There are no changes to previous assumptions around the growth in Council Tax. It has
been assumed that there will be 0.5% growth in the mid-range scenario for all years from
2026-27 (0.75% in the best and 0.25% in the worst case scenarios). Following the setting
of Council Tax in February, the future years estimates have been updated reflecting the
adjusted base Council Tax budget.
The 2024-25 final outturn included additional income of £1.234m in respect of 2024-25 and
prior years, an element of which was expected to be recurring in 2025-26 and future years.
A more sophisticated financial modelling tool has now been developed to assist with
Council Tax income projections. However, a significant element of the 2024-25 additional
income (some £0.5m) related to the reclassification of self-catering units as domestic
dwellings by the Assessor, following completion of both the 2022-23 and 2023-24
canvasses during the year, which saw the transfer of properties from the Non-domestic
Rates to Council Tax registers.
There is a significant level of uncertainty in respect of the regulatory environment in
relation to self-catering units, with a risk of appeals being granted and properties returning
to Non-domestic Rates. This uncertainty in respect of both timing and financial value,
presents a risk to financial planning assumptions. At this stage, a re-base of the current
Council Tax budget, estimated at £0.250m in the worst case, £0.500m in the mid-range
and £0.750m in the best case scenarios, continues to be assumed within the Budget
Outlook. This position will be subject to ongoing review and refinement throughout the
year.
4.1.11 In the first instance, this report presents the budget gap, prior to any measures to balance
the budget. For this purpose, Council Tax is assumed to remain at the same levels as
2025-26, with only growth in the Council Tax base reflected.
General Fund
4.1.12 As reported in prior years, reduced employer contribution rates payable to Strathclyde
Pension Fund will result in one-off savings in 2024-25 and 2025-26. It was agreed by
Council in February 2024 that £2m of the pension fund gain would be released each year
for a period of 3 years (2024-25 through to 2026-27), in order to help bridge the budget
gap.
Funding Summary
4.1.13 The following table summarises the estimated total funding in the mid-range scenario over
the 5 years 2026-27 to 2030-31, unchanged from the previously reported position.
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
SG Funding 263,363 262,706 262,049 261,394 260,741
EPR – DEFRA
Funding
1,393 1,393 1,393 1,393 1,393
EPR – 2025-26
Funding C/fwd
1,438 0 0 0 0
Released SPF Gain 2,000 0 0 0 0
Council Tax Base 70,204 70,204 70,204 70,204 70,204
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Council Tax Re-base 500 500 500 500 500
Council Tax Growth 354 709 1,066 1,425 1,786
Total Estimated
Funding
339,252 335,512 335,212 334,916 334,624
4.2 Base Budget
4.2.1 The 2025-26 budget approved by Council on 27 February 2025 was £328.289m. This
included the 2025-26 debt charge implications of approved borrowing for additional capital
investment. There was also a decision to defer a policy saving in respect of Community
Sports until 2026-27 onwards. As previously reported, the full year effect of these previous
budget decisions on 2026-27 and future years are incorporated as base budget
adjustments.
4.2.2 The revised base budget is unchanged from the previously reported position, as outlined in
the table below.
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Base Budget 2025-26 328,289 328,289 328,289 328,289 328,289
Debt Charges Increase 95 95 95 95 95
Approved Policy
Savings
(20) (20) (20) (20) (20)
Revised Base Budget 328,364 328,364 328,364 328,364 328,364
4.3 Employee Cost Changes
Pay Award
4.3.1
4.3.2
The Public Sector Pay Policy, published alongside the Scottish Budget, set out a multi-
year framework of a 9% pay envelope covering 2025-26, 2026-27 and 2027-28. This
underpinned our original planning assumption of 3% across each of these years.
However, following agreement of the SJC and Chief Officers pay award for 2025-26 and
2026-27 at 4% and 3.5% respectively, these assumptions were subsequently updated.
There have been no further changes to pay assumptions since last reporting. An increase
of 4% for 2025-26 and 3.5% for 2026-27 across all scenarios, 3% for 2027-28 in both the
best case and mid-range scenarios, with 5% in the worst case scenario has been
assumed (at this stage, at 2025-26 prices). For 2028-29 and 2029-30, the best case
scenario has been reduced to 2%, while the mid-range remains at 3% and worst case
remains at 5%.
4.3.3 The Teachers pay award now covers the period August to July and has already been
agreed up to 31 July 2025. At this stage, an increase for 2025-26 and 2026-27 has been
assumed in line with the SJC agreed pay award. However, this is still at a negotiating
stage and represents a financial risk to our planning assumptions. Any increase beyond
planning assumptions will have a further impact on the base budget and Budget Outlook
position.
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Increments 
4.3.4 
4.3.5
There remains a fairly regular turnover of staff within posts and when this happens, the
cost of increments can, in some cases, be absorbed within the existing budget provision,
as leavers who may be at the top their grade may be replaced by new starts at the grade
entry point. The cost of pay increments for 2025-26 continues to be estimated at £0.599m. 
For future years, an equivalent cost has been assumed in the mid-range and worst case
scenarios, while half the estimated 2025-26 cost has been assumed in the best case
scenario. 
4.3.6
Strathclyde Pension Fund 
As previously reported, the employer contribution rate paid to the Strathclyde Pension
Fund fell from 19.3% to 6.5% in 2024-25 and 2025-26, rising to a sustainable long-term
rate of 17.5% from 2026-27. The reduction in the first 2 years equates to reduced costs of
£6.875m per annum relating to council employees (excluding HSCP).  The increased cost
to 17.5% from 2026-27 has been built into projections for 2026-27 and future years. 
Employee Costs Summary 
4.3.7  The table below summarises the employee cost changes in the mid-range scenario, for
council services, over the five years 2026-27 to 2030-31, unchanged from the previously
reported position. Employee cost increases relating to Social Work within the Health and
Social Care Partnership are summarised within paragraph 4.6.6. 
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Pay Award 7,346 12,124 17,046 22,115 27,337
Full Year Effect 2025-26
Teachers Pay Award
661 661 661 661 661
Increments 599 1,198 1,797 2,396 2,995
Reinstatement of  SPF
contribution
6,875 6,875 6,875 6,875 6,875
Total Employee Cost
Changes
15,481 20,858 26,379 32,047 37,868 
4.4 Non-Pay Inflation 
4.4.1 
4.4.2 
Non-pay inflation is only provided for within budget plans, where it is deemed to be
unavoidable, for example in respect of contractual obligations.  As not all budget elements
are subject to inflationary increases, inflationary budget pressures may arise in some other
areas and in order to manage spend within available budget resources, service
rationalisation or efficiencies may require to be delivered. 
The Budget Outlook provides for unavoidable non-pay inflation within each budget
scenario.  Market forecast data, where available, is used to inform the mid-range scenario. 
Officers continue to review inflation assumptions on an ongoing basis, however, due to
prevalent market volatility and levels of uncertainty, at this stage, there continues to be no
change to the inflationary assumptions included within the 2025-26 Budget Pack. 
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4.4.3 
4.4.4 
4.4.5 
In addition, due to prevailing levels of economic uncertainty, it continues to be deemed
prudent to include a further general inflation contingency within the mid-range and worst
case scenarios at £250k and £500k each year respectively. This contingency will either be
required, reduced or removed to reflect changing circumstances before the 2026-27
budget is set.   
The estimated cumulative inflation over the five years 2026-27 to 2030-31 in the mid-range
scenario is outlined in the table below. 
Non-Pay Inflation
(Unavoidable)
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000 
2,745 5,632 8,676 11,890 15,140 
An analysis of the 2026-27 cost estimate in respect of the mid-range scenario across key
inflationary drivers is given in the table below.  The non-pay inflationary increases relating
to Social Work within the Health and Social Care Partnership are summarised within
paragraph 4.6.6. 
Inflation Category 2026-27
Estimate
£000
Premises and Utilities
(Rates, Electricity, Gas, Oil,
Water)
280
Waste/Landfill Tax 335
NPDO/HUB Schools 382
Other Contracted Services 883
Insurance 414
Other Supplies and Services 201
General Contingency 250
Total 2,745 
4.5  Cost and Demand Pressures 
4.5.1 
4.5.2 
For a number of years, services have been required to manage any cost and demand
pressures within current budgetary resources, as far as possible.  However, there are
several cost and demand pressures, already identified for future years, which cannot be
contained without a detrimental impact on service provision.  These continue to be
monitored on an ongoing basis and reported within the Budget Outlook.   
Since last reporting in August, the cost and demand pressures have been updated to
include emerging and increasing budget pressures identified in respect of Bus Transport
Contracts, Security Operations Centre Contracts and Wi-Fi Network Subscription License
Costs.  In addition, it has been possible to remove the previously reported budget pressure
in respect of Migration to Teams, confirmed as superseded by the existing Microsoft 365
Licenses budget pressure.   
4.5.3 When creating a longer-term budget outlook beyond the current year, there is a greater
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risk that currently unforeseen or unquantifiable cost and demand pressures will emerge
across future years.  It is, therefore, deemed prudent to continue to include a general
contingency, proposed at £0.250m, within the best case, £0.500m within the mid-range
and £1m within the worst case scenarios year on year.  This contingency will either be
required, reduced or removed to reflect changing circumstances before the 2026-27
budget is set.   
4.5.4 The cost and demand pressures within the mid-range scenario are detailed in Appendix 2
and summarised in the table below.  These will continue to be subject to ongoing review
throughout the financial year.   
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
ASN Support 208 422 422 422 422
School Clothing Grants 56 56 56 56 56
Schools Residential 800 800 800 800 800
Education ICT Network
Infrastructure
0 53 53 53 53
Election costs 0 350 0 0 0
Planning (Local
Development Plan)
50 0 0 0 0
Universal Credit – HB
Admin Grant
40 80 120 160 200
Civica Revenue and
Benefits System
0 63 63 63 63
Microsoft 365 Licenses 30 380 380 380 380
Compliance with BMW
Ban
2,479 3,051 3,051 3,051 3,051
Bus Transport Contracts 400 400 400 400 400
Valuation Joint Board
Requisition
255 301 301 301 301
Security Operations
Centre Contracts
43 43 43 43 43
Wi-Fi Network
Subscription License
15 58 58 58 58
Allowance for pressures
in future years
500 1,000 1,500 2,000 2,500
Total Cost and
Demand Pressures
4,876 7,057 7,247 7,787 8,327 
4.5.5 The cost and demand pressures relating to Social Work within the Health and Social Care
Partnership are summarised within paragraph 4.6.6. 
4.6 Health and Social Care Partnership 
4.6.1  As part of the 2025-26 budget process, indicative base allocations of £85.045m were
agreed for 2026-27 and 2027-28, with future years’ allocations being subject to Scottish
Government grant funding and the council’s overall financial position. The indicative base
allocation for 2026-27 represents an increase of £3.053m, reflecting the non-recurring
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4.6.2
saving in relation to the Strathclyde Pension Fund contribution.
As previously reported, the base allocations have been updated to reflect the impact of the
agreed pay award for 2025-26 in respect of Social Work services, on the planning
assumption that these additional costs, estimated at £0.411m, will be met by the council,
with additional Scottish Government grant funding assumed in this respect. An update to
the allocation in respect of the 2026-27 pay award (estimated at £0.206m), funded by
additional Scottish Government grant funding, continues to be reflected in the best case
scenario only.
4.6.3
4.6.4
4.6.5
4.6.6
Political decisions will require to be made in respect of the allocation to the Health and
Social Care Partnership (HSCP) in future years. For the purposes of the Budget Outlook,
flat cash allocations, adjusted for the Strathclyde Pension Fund saving and the 2025-27
pay award, continue to be assumed across all scenarios. These are only indicative
planning assumptions and it will be a matter for Council to consider any changes, as part
of the budget process.
The HSCPs approved 2025-26 budget in respect of Social Work services included
£0.500m of ‘unallocated savings’. In order to safeguard the financial position of the
council, the council’s Section 95 Officer sought a financial recovery plan from the IJB,
under the terms of the Integration Scheme, seeking assurance in respect of its current and
future financial position. This recovery plan was approved by the IJB and reported to
Council in June.
The HSCP is currently forecasting an overspend of £0.668m for 2025-26 in respect of
Social Work services. This includes assumptions on the delivery of savings totalling
around £3m, including £0.500m in respect of previously ‘unallocated savings’. At this
stage, the HSCP expect the forecast overspend to be maintained within available HSCP
reserves, however, there is little headroom in this respect. The potential use of reserves in
the current year will also have an impact on the forecast budget gap for 2026-27 and
future years, not currently reflected within the HSCPs financial planning assumptions.
In respect of the budget outlook for 2026-27 and future years, the HSCP is currently
forecasting a budget gap in respect of Social Work services of £6.210m in 2026-27, rising
to £11.248m by 2028-29. This reflects the required replacement of the £3.050m use of
reserves in 2025-26 in respect of the pension fund saving, non-recurring in 2026-27, but
does not yet reflect any further required use of remaining available reserves in 2025-26.
The HSCP budget outlook also takes account of cost and demand pressures identified in
respect of Social Work services and these are included as Appendix 3, with the mid-range
scenario summarised below. These are provided for information purposes and extend to
three years, rather than the five years of the council’s Budget Outlook. It is expected that
the HSCP will manage these budget pressures within the funding allocated.
2026-27
£000
2027-28
£000
2028-29
£000
Pay Inflation 1,450 2,737 4,063
Pay Increments 198 396 594
Non-Pay Inflation 818 1,616 2,446
Adult Care - Older People 464 935 1,414
Adult Care – Mental Health 73 148 224
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4.6.7 
Looked After Children 75 152 230
General Contingency 700 900 1,100
Total Social Work Cost and Demand
Pressures
3,778 6,884 10,071 
This financial outlook is extremely challenging, particularly given the significant depletion
of HSCP reserve balances as at 31 March 2026.  In engaging with the HSCP on the
current and forecast financial position, the HSCPs Chief Financial Officer has advised in
relation to the budget gap for 2026-27 and future years ‘Savings of the magnitude required
cannot be delivered without recourse to reductions in employment and the scope and
scale of services offered and supported by the HSCP. Savings proposals on this scale are
anticipated to be damaging to services, communities and care capacity at a time when we
know that demand is increasing and staffing shortages in some areas may also increase.
There is a significant risk that implementation of many of the savings proposals will have
impacts upon future statutory provision and could be counter productive in the medium
term.’
4.6.8 There is a significant risk to the council in respect of failure to manage the delivery of
Social Work services within available resources.  Under the terms of the Integration
Scheme, any overspend on Social Work services, which cannot be met from existing
reserve balances, may fall to be met by the council.  In order to safeguard the council’s
position, the financial position of the HSCP and related financial risk to the council will be
closely monitored throughout the year.  This will continue to form part of the regular
reporting to Policy and Resources Committee in respect of the current year revenue
budget monitoring and financial risks, as well as future iterations of this Budget Outlook
report.  
4.7 LiveArgyll 
4.7.1 Political decisions will require to be made in respect of the allocation to LiveArgyll in future
years.  For the purposes of the Budget Outlook, flat cash allocations continue to be
assumed across all scenarios, with the exception of previous budget decisions in respect
of the Strathclyde Pension Fund adjustment relating to the cessation of the one-off
employer contribution rate saving (£0.118m increase) and deferral of the 2025-26
proposed saving in the service fee to 2026-27 (£311k reduction). These are only indicative
planning assumptions and it will be a matter for Council to consider any changes, as part
of the budget process next year.   
4.8 Estimated Budget Gap PRIOR to Measures to Balance the Budget 
4.8.1 The updated budget gap in the mid-range scenario over the five years 2026-27 to 2030-
31, after allowing for the considerations outlined above and prior to measures to balance
the budget, is outlined in the table below.  This is the budget gap prior to factoring in any
previous savings decisions or potential options towards balancing the budget.     
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Base Budget 328,289 328,289 328,289 328,289 328,289
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Base Budget
Adjustments
75 75 75 75 75
Employee Cost
Changes
15,481 20,858 26,379 32,047 37,868
Non-Pay Inflation 2,745 5,632 8,676 11,890 15,140
Cost and Demand
Pressures
4,876 7,057 7,247 7,787 8,327
Adjustment to HSCP
Payment
3,464 3,464 3,464 3,464 3,464
Adjustment to
LiveArgyll Payment 
(193) (193) (193) (193) (193)
Total Estimated Net
Expenditure
354,737 365,182 373,937 383,359 392,970
Estimated Funding 339,252 335,512 335,212 334,916 334,624
Estimated Budget
Surplus / (Gap)
Cumulative 
(15,485)  (29,670)  (38,725)  (48,443)  (58,346) 
4.9  Measures to Balance the Budget 
4.9.1 In 2025-26, a general inflationary increase of 6% was applied to relevant fees and
charges.  For the Budget Outlook, a range of between 3% (worst case) and 9% (best
case), with a mid-range of 6% continues to be assumed each year over the five years
2026-27 to 2030-31.  Further, as a result of 2025-26 budget decisions taken by Council on
27 February 2025 to freeze fees on council-run ferries, as previously reported, the forecast
income from fees and charges in future years has been slightly reduced.  
4.9.2 As previously reported, some of the management/operational and policy savings options
agreed at the Council meeting on 27 February 2025 and in previous years will impact the
2026-27 and future years budgets.  These are reflected within the Budget Outlook over the
five years 2026-27 to 2030-31. 
4.9.3  In terms of Council Tax, a 5% increase continues to be assumed each year in all
scenarios.  The average increase in Council Tax across all Scottish councils in 2025-26
was 9.3%, with 13 increasing theirs by at least 10%.  With a focus on longer term financial
sustainability and in light of the significant forecast budget gap over the next five years, the
level of Council Tax increases in 2026-27 and in future years will require due consideration
by Members, as part of the budget setting for 2026-27 and future years.  
4.9.4  The table below summarises the proposed measures to balance the budget in the mid-
range scenario, unchanged from the previously reported position. 
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Fees and Charges
Increase
382 787 1,217 1,672 2,155
Council Tax Increase  3,553 7,319 11,292 15,480 19,897
Management/Operational
Savings 
(48) (9) (9) (9) (9)
Policy Savings  1,012 1,748 2,217 2,331 2,445
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Total Measures to
Balance the Budget
4,899 9,845 14,717 19,474 24,488 
4.10  Estimated Budget Gap AFTER Measures to Balance the Budget 
4.10.1 The table below summarises the updated estimated budget gap in the mid-range scenario. 
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Estimated Budget Gap
Prior to Measures to
Balance Budget 
(15,485)  (29,670)  (38,725)  (48,443)  (58,346)
Measures to Balance
Budget
4,899 9,845 14,717 19,474 24,488
Estimated Budget
Surplus / (Gap)
Cumulative 
(10,586)  (19,825)  (24,008)  (28,969)  (33,858)
Estimated Budget
Surplus / (Gap) 
In Year 
(10,586)  (9,239)  (4,183)  (4,961)  (4,889) 
4.10.2 In the mid-range scenario, the updated budget gap is estimated at £10.586m in 2026-27
and £33.858m over the five year period 2026-27 to 2030-31.   
4.10.3 The updated budget gap in the best case scenario is estimated at £4.543m in 2026-27 and
£10.725m over five years, increasing to £15.706m in 2026-27 and £65.565m over five
years in the worst case scenario.  A summary of all three scenarios is included within
Appendix 1. 
4.10.4 The changes from the previous Budget Outlook in the mid-range scenario, reported to the
Policy and Resources Committee in August 2025, are summarised in the table below. 
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Previously reported
Budget Surplus / (Gap) 
Cumulative 
(10,459)  (19,892)  (24,075)  (29,036)  (33,925)
Updates to Cost and
Demand Pressures
(127) 67 67 67 67
Revised Budget
Surplus / (Gap) 
Cumulative 
(10,586)  (19,825)  (24,008)  (28,969)  (33,858) 
5. CONCLUSION 
5.1 In the mid-range scenario, the budget gap is now estimated at £10.586m in 2026-27 and
£33.858m over the five year period 2026-27 to 2030-31.  Council officers are continuing to
explore budget savings options during 2025-26 and these will be presented to Members in
due course.
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5.2 This is a very challenging Budget Outlook position. Variations to the assumptions,
particularly in respect of future Scottish Government grant funding levels, would have a
significant impact on the Budget Outlook. All assumptions will be kept under review, with
the Budget Outlook updated, as and when further information becomes available.
6. IMPLICATIONS
6.1 Policy - Sets out the Budget Outlook that provides the financial
envelope for policy decisions.
6.2 Financial - Sets best, worst and mid-range scenarios in respect of the
Budget Outlook. The council are actively continuing to
pursue opportunities to mitigate against future budget gaps.
6.3 Legal - None directly from this report but the Council requires to set
a balanced budget.
6.4 HR - None directly from this report but there is a strong link
between employee numbers and budgets.
6.5
6.6
Customer Service –
Risk -
None directly from this report but any proposals to address
the estimated budget gap will require to consider customer
service.
None directly from this report but any proposals to address
the estimated budget gap will require to consider risk.
6.7
6.8
6.9
Climate Change -
Fairer Scotland Duty -
Equalities – protected
characteristics -
The Council is committed to addressing climate change and
reviews how Services are delivering this on an ongoing
basis, within the available budget resources.
None directly from this report but any proposals to address
the estimated budget gap will require to consider fairer
Scotland issues.
None directly from this report but any proposals to address
the estimated budget gap will require to consider equality
issues.
6.10 Consumer Duty - None directly from this report but any proposals to address
the estimated budget gap will require to consider any
consumer specific issues.
6.11
6.12
Island Communities -
Children’s Rights and
Wellbeing -
None directly from this report but any proposals to address
the estimated budget gap will require to consider any island
specific issues.
None directly from this report but any proposals to address
the estimated budget gap will require to consider any
children’s rights and wellbeing specific issues.
Kirsty Flanagan
Executive Director/Section 95 Officer
9 September 2025
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services
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APPENDICES: 
Appendix 1 – Budget Outlook - Best, Worst and Mid-range Scenarios
Appendix 2 – Cost and Demand Pressures (Council Services)
Appendix 3 – Cost and Demand Pressures (Social Work) 
For further information contact Carolyn Earl, Interim Head of Financial Services
Carolyn.earl@argyll-bute.gov.uk
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BUDGET OUTLOOK 2026-27 to 2030-31 APPENDIX 1
Policy and Resources Committee - October 2025
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Base Budget 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289
Base Budget Adjustments 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75
Revised Base Budget 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364 328,364
Pay Award 7,346 12,124 15,405 18,752 22,166 7,346 12,124 17,046 22,115 27,337 7,346 15,353 23,761 32,589 41,859
Full year effect of 2025-26 pay award for teachers in 2026-27 661 661 661 661 661 661 661 661 661 661 661 661 661 661 661
Pay Increments 300 599 899 1,198 1,498 599 1,198 1,797 2,396 2,995 599 1,198 1,797 2,396 2,995
Re-instate Employers Superannuation Rate 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875
Total Employee Cost Changes (Council Services) 15,182 20,259 23,840 27,486 31,200 15,481 20,858 26,379 32,047 37,868 15,481 24,087 33,094 42,521 52,390
Non-Pay Inflation - Council Services 1,771 4,011 6,381 8,893 11,871 2,745 5,632 8,676 11,890 15,140 3,692 7,259 11,012 14,968 18,968
ASN Support 208 422 422 422 422 208 422 422 422 422 208 422 422 422 422
School Clothing Grants 32 32 32 32 32 56 56 56 56 56 79 79 79 79 79
Schools Residential 800 800 800 800 800 800 800 800 800 800 800 800 800 800 800
Education ICT Network Infrastructure 0 53 53 53 53 0 53 53 53 53 0 53 53 53 53
Election Costs 0 327 0 0 0 0 350 0 0 0 0 370 0 0 0
Planning (Local Development Plan) 50 0 0 0 0 50 0 0 0 0 50 0 0 0 0
Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200
Civica Revenue and Benefits System 0 37 37 37 37 0 63 63 63 63 0 137 137 137 137
Microsoft 365 Licenses 30 380 380 380 380 30 380 380 380 380 50 400 400 400 400
Compliance with BMW Ban 2,231 2,746 2,746 2,746 2,746 2,479 3,051 3,051 3,051 3,051 2,727 3,356 3,356 3,356 3,356
Bus Transport Contracts 360 360 360 360 360 400 400 400 400 400 440 440 440 440 440
Valuation Joint Board 255 301 301 301 301 255 301 301 301 301 255 301 301 301 301
Security Operations Centre - Quorum Cyber Contract Renewal 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43
Wi-Fi Network Subscription License Costs 15 58 58 58 58 15 58 58 58 58 15 58 58 58 58
Allowance for Cost and Demand Pressures Future Years 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000
Total Cost and Demand Pressures 4,314 6,139 6,102 6,392 6,682 4,876 7,057 7,247 7,787 8,327 5,707 8,539 9,209 10,249 11,289
Adjustment to Health and Social Care Partnership Payment 3,670 3,670 3,670 3,670 3,670 3,464 3,464 3,464 3,464 3,464 3,464 3,464 3,464 3,464 3,464
Adjustment to Live Argyll Management Fee (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193)
Total Estimated Expenditure PRIOR to measures to balance the budget 353,108 362,250 368,164 374,612 381,594 354,737 365,182 373,937 383,359 392,970 356,515 371,520 384,950 399,373 414,282
Scottish Government Grant 265,742 266,406 267,072 267,740 268,409 263,363 262,706 262,049 261,394 260,741 262,054 260,089 258,139 256,203 254,281
Packing Extended Producer Responsibility Funding - DEFRA 2,786 2,786 2,786 2,786 2,786 1,393 1,393 1,393 1,393 1,393 0 0 0 0 0
Transfer from Reserves - EPR funding carried forward from 2025-26 1,438 0 0 0 0 1,438 0 0 0 0 1,438 0 0 0 0
Transfer from Reserves - SPF Gain agreed February 2024 2,000 0 0 0 0 2,000 0 0 0 0 2,000 0 0 0 0
Council Tax 71,486 72,022 72,562 73,106 73,654 71,058 71,413 71,770 72,129 72,490 70,630 70,807 70,984 71,161 71,339
Total Funding 343,452 341,214 342,420 343,632 344,849 339,252 335,512 335,212 334,916 334,624 336,122 330,896 329,123 327,364 325,620
Budget Surplus / (Gap) PRIOR to measures to balance the budget (9,655) (21,036) (25,744) (30,980) (36,745) (15,485) (29,670) (38,725) (48,443) (58,346) (20,393) (40,624) (55,827) (72,009) (88,662)
Measures to Balance the Budget:
Fees and Charges 574 1,199 1,880 2,623 3,433 382 787 1,217 1,672 2,155 191 388 591 800 1,015
Council Tax Increase 3,574 7,354 11,350 15,573 20,034 3,553 7,301 11,255 15,424 19,820 3,532 7,249 11,161 15,277 19,608
Council Tax Increase (Growth element) 0 27 55 85 117 0 18 37 56 77 0 9 18 28 38
Policy Savings Agreed Feb 2023 476 1,112 1,581 1,695 1,809 476 1,112 1,581 1,695 1,809 476 1,112 1,581 1,695 1,809
Management/Operational Options Agreed Feb 2025 (48) (9) (9) (9) (9) (48) (9) (9) (9) (9) (48) (9) (9) (9) (9)
Policy Options 2025 536 636 636 636 636 536 636 636 636 636 536 636 636 636 636
Total Measures to Balance the Budget 5,112 10,319 15,493 20,603 26,020 4,899 9,845 14,717 19,474 24,488 4,687 9,385 13,978 18,427 23,097
Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (4,543) (10,717) (10,251) (10,377) (10,725) (10,586) (19,825) (24,008) (28,969) (33,858) (15,706) (31,239) (41,849) (53,582) (65,565)
Budget Surplus / (Gap) In Year AFTER measures to balance the budget (4,543) (6,174) 467 (127) (348) (10,586) (9,239) (4,183) (4,961) (4,889) (15,706) (15,533) (10,610) (11,733) (11,983)
Mid-Range ScenarioBest Case Scenario Worst Case Scenario
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COUNCIL COST AND DEMAND PRESSURES 2026-27 to 2030-31
Department Service Cost/Demand Pressure 2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Executive Director -
Douglas Hendry
Education The demand for ASN support in Argyll and Bute has continued to grow with a significant increase in, and
early identification of children and young people presenting with complex additional support needs,
including mental health difficulties which manifests often in dysregulated behaviours. IScottish
Government statistics show that the number of pupils identified with ASN has increased markedly since
2010 and there continue to be year on year increases. These increases are likely due to continue as we see
the impact of the Covid 19 pandemic on children and young people who were born from 2020 onwards
and as we work with partners to streamline assessment processes which help us to understand need more
thoroughly. Scottish Government statistical datasets show that the percentage of school roll in
mainstream schools of pupils with ASN has increased by approximately 3% year on year. Within many
authorities, this means increased numbers of children accessing specialist provision. As Argyll and Bute do
not have equitable access to Specialist provision in all areas, the cost pressure associated with offering
appropriate support within our local schools continues to increase in line with need.
208 422 422 422 422 208 422 422 422 422 208 422 422 422 422
Executive Director -
Douglas Hendry
Education Rightsize of School Clothing Grant Budget - Argyll and Bute Council pay the national minimum rate for
School Clothing Grants. The payment is currently £120 for Primary School Children and £150 for
Secondary School children. Over the past two years the number of clothing grants issued has increased
and left Education with a demand pressure.
32 32 32 32 32 56 56 56 56 56 79 79 79 79 79
Executive Director -
Douglas Hendry
Education Rightsize the Schools Residential Budget - The Education Service contribute 38% towards the cost of
jointly funded out of area Residential Placements with Social Work contributing 62%. Education also have
a number of out of area day placements which they pay 100% of the cost. Over recent years the cost of
these placements has risen significantly due to a reduction in subsidy for Grant Aided Special Schools
(GASS) by the Govenment, along with the increase in demand for these type of placements. This has led
to a cost pressure of £800k.
800 800 800 800 800 800 800 800 800 800 800 800 800 800 800
Executive Director -
Douglas Hendry and
Kirsty Flanagan
Education and ICT The Education ICT Network required transformative technology upgrade, with improved security and
reconfiguration to support in-school and at home learning, was approved as part of the budget for 2025-
26. However, the recommended cost plan included additional revenue consequences from 2027-28,
estimated at £53k per annum, in respect of network equipment licencing costs.
0 53 53 53 53 0 53 53 53 53 0 53 53 53 53
Executive Director -
Douglas Hendry
Legal and Regulatory
Services
Estimated cost (to be borne by the Council) of carrying out local Government elections in May 2027 (and
in financial year 2027/28). Operating approx. 100 polling stations and carrying out poll and count for 11
Multi member wards – requiring 11 separate counts
0 327 0 0 0 0 350 0 0 0 0 370 0 0 0
Executive Director -
Kirsty Flanagan
Development &
Economic Growth
Local development plan will require to be done under the new Planning legislation which is a revised
process from the current one and will have a 10 year life. The new process has 2 stages where there is
likely to be a cost pressure - a gate check followed by an examination some time later.
50 0 0 0 0 50 0 0 0 0 50 0 0 0 0
Executive Director -
Kirsty Flanagan
Financial Services Universal Credit “Full” Service went live in Sept 2018, managed migration for working age claimants began
in August 2023 and will be completed by December 2025. Details of the migration of Pension age Housing
Benefit claimants have not yet been released initial indications was that the overall migration to Pension
Credit will be completed in 2028/2029 although that looks unlikely now. The DWP will reduce the Housing
Benefit Administration Subsidy they pay to the Council as some claimants come off of Housing Benefit
processed by Council staff and go onto Universal Credit processed by the DWP. The Council’s caseload has
reduced since implementation of Universal Credit but it is hard to predict just how quickly the rest of the
caseload will migrate from Housing Benefit to Universal Credit between now and 2028/2029. These
figures represent our best estimates at this time.
40 80 120 160 200 40 80 120 160 200 40 80 120 160 200
Executive Director -
Kirsty Flanagan
Financial Services The Council has been engaged in discussions with the supplier of the Revenues and Benefits Management
System and also the Electronic Document Management System. We expect cost increases in the future as
the supplier moves the systems to the Cloud. The cost presure is an estimate at this time and will be
refined as we get nearer to 2027-28.
0 37 37 37 37 0 63 63 63 63 0 137 137 137 137
Executive Director -
Kirsty Flanagan
ICT Migration from Skype for Business to Teams Telephony to ensure those staff who need to make and
receive external calls can do so. This was agreed at Policy & Resources Committee on 15 August.
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Executive Director -
Kirsty Flanagan
ICT Microsoft 365 License Costs. An earmarked reserve, set up to contribute towards the licensing and set-up
costs for the Microsoft 365 rollout, is projected to be fully depleted during 2026-27, with an estimated
budget pressure of £30k in 2026-27, increasing to £380k in 2027-28. These estimates are subject to
change, should licence upgrades be required for Power BI or Teams Telephony.
30 380 380 380 380 30 380 380 380 380 50 400 400 400 400
Best Case Mid-Range Worst Case
APPENDIX 2
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COUNCIL COST AND DEMAND PRESSURES 2026-27 to 2030-31
Department Service Cost/Demand Pressure 2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
2030-31
£000
Best Case Mid-Range Worst Case
APPENDIX 2
Executive Director -
Kirsty Flanagan
Roads & Infrastructure
Services
Achieving compliance with ban on biodegradable municipal waste (BMW) which comes into place on 1
January 2026.  The costs are the best estimates at this stage and consultants have assisted in producing
the estimates.  The best case and worst case scenarios are based on the mid-range with a +/- 10% change
2,231 2,746 2,746 2,746 2,746 2,479 3,051 3,051 3,051 3,051 2,727 3,356 3,356 3,356 3,356
Executive Director -
Kirsty Flanagan
Roads & Infrastructure
Services
Bus Transport contracts have seen a siginificant increase in new contract prices due to increased costs for
fuel, insurance, maintenance, regualtory compliance and driver wages.  New contracts have seen a
combined annual increase of £975k across Argyll and Bute during 2024-25 with further contract renewals
due in 2025-26 and 2026-27.   The cost pressure reflects the estimated increased costs of future renewals
beyond budgeted levels.  An options appraisal is currently being carried out to assess the best and most
cost effective solution for future delivery of the school and public transport service.  Increased certainty
around the value of the budget pressure is expected following the renewal of a number of significant
value contracts during October 2025.
360 360 360 360 360 400 400 400 400 400 440 440 440 440 440
Council Wide Council Wide A letter from the Dunbartonshire and Argyll and Bute Valuation Joint Board was received on 30 January
2025 advising of the financial challenges facing the Board and the estimated 2025-26 to 2027-28 budget
gaps along with a request to increase the level of contribution that we make to the Board.  Since 2012-13
the core constituent funding to the Board has either reduced or been flast cash for the past 7 years with
the Board heavily reliant on reserves.  As the reserves will be fully depleted by 2025-26 there is a required
for the requisitions to increase.
255 301 301 301 301 255 301 301 301 301 255 301 301 301 301
Executive Director -
Kirsty Flanagan
ICT The Security Operations Centre (SOC) contract with Quorum Cyber provides constant monitoring of the
council’s networks and 24/7/365 protection by proactively monitoring, detecting and analysing data, and
providing incident response and recovery. It works alongside the council’s internal security posture to
ensure we can operate securely, at all times. It is now an essential service for the Council and was funded
for the first three years from earmarkings but will require a cost pressure from 2026/27 of £43k per
annum.
43 43 43 43 43 43 43 43 43 43 43 43 43 43 43
Executive Director -
Kirsty Flanagan
ICT The Council’s Wi-fi network is based on a subscription licensing model from CISCO. Our current
subscription was paid from excess capital and revenue but expires in January 2027 and will need renewed
at a cost of £175k. This will cover a three year subscription.
15 58 58 58 58 15 58 58 58 58 15 58 58 58 58
Council Wide Council Wide General provision for unidentified Cost and Demand Pressures 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000
TOTAL 4,314 6,139 6,102 6,392 6,682 4,876 7,057 7,247 7,787 8,327 5,707 8,539 9,209 10,249 11,289
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Classification: OFFICIAL#
SOCIAL WORK COST AND DEMAND PRESSURES - 2026-27 to 2028-29
Service Cost/Demand Pressure 2026-27
£000
2027-28
£000
2028-29
£000
2026-27
£000
2027-28
£000
2028-29
£000
2026-27
£000
2027-28
£000
2028-29
£000
All Social Work Estimated Pay inflation reflecting a best case at 3% up to 2027/28
reflecting the Scottish Government Public Sector Pay Policy before
reducing to 2% in 2028/29, a mid-range of 3%  and a worst case of 5%.
Adjusted for the impact of the increase in the employer's pension
contribution rate from 6.5% to 17.5% in 2026/27.
1,450 2,737 3,621 1,450 2,737 4,063 1,450 3,595 5,847
All Social Work Estimated Pay increments, best case is that 50% of the incremental
changes based on 2025/26 are absorbed and in the mid-range and worst
case, the increase is in line with the increase in 2025/26.
99 198 297 198 396 594 198 396 594
All Social Work Inescapable non-pay inflation across a range of activities and activity
specific inflation rates with a 0.5% tolerance for the best and worst cases.
569 1,127 1,703 711 1,416 2,150 844 1,698 2,595
All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are
recharged to Social Work.
93 169 248 107 200 296 122 231 344
Adult Care Older People Demand Growth: The number of older people is increasing
and older people are living longer with significant health and support
needs and significant expectations of the support they are entitled to
receive. Best case assumes that this will be offset by efficiency
improvement and increasing unmet need / demand. The mid range allows
for a 1.5% increase each year. Worst case is 3% per year on the older
adult services budget.
0 0 0 464 935 1,414 928 1,885 2,872
Adult Care Mental Health Demand Growth - As above, services operating within
budget overall. The best case assumes a 0% increase in spending
reflecting the limited service capacity in the area, the mid-range reflects
2% growth in 26/27 and 27/28 and the worst case reflects 3% growth.
0 0 0 73 148 224 110 223 340
Children and
Families
Looked After Children Demand Growth - there is a continuing demand for
placements of children who are cared for by the HSCP. The best case
scenario is that the expected additional demand can be funded from
within existing resources as a result of planned improvements to the
service delivery model (eg shift away from high cost external residential
care to local foster and kinship care), the mid case reflects that additional
demand in 26/27 be funded from existing resource with £250k per annum
thereafter and the worst case reflects £250k per annum.
38 76 114 75 152 230 113 229 349
All Social Work Allowance for unknown cost and demand pressures which could arise. Per
James Gow this is to reduce to £200k pa
0 0 0 700 900 1,100 700 900 1,100
TOTAL UNFUNDED COST AND DEMAND PRESSURES 2,249 4,307 5,983 3,778 6,884 10,071 4,465 9,157 14,041
Worst CaseMid RangeBest Case
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Page 113

ARGYLL AND BUTE COUNCIL     POLICY AND RESOURCES COMMITTEE                                                               
FINANCIAL SERVICES                                         9 OCTOBER 2025 
FUNDING EXTERNAL BODIES AND FOLLOWING THE PUBLIC POUND 
– CODE OF PRACTICE 
1.0 EXECUTIVE SUMMARY  
1.1 The purpose of this report is to seek approval from the Policy and Resources
Committee for the adoption of a local Code of Practice on Funding External
Bodies and Following the Public Pound, providing a consistent and structured
framework for ensuring robust governance and accountability in the use of
public funds.
1.2 The concept of ‘following the public pound’ is to ensure that the principles of
openness, integrity and accountability, which apply to councils in their
decisions on spending public money, apply equally to funds to external
bodies.  Local authorities are required to comply with the Code of Guidance
on Funding External Bodies and Following the Public Pound (the Code),
published jointly by the Accounts Commission and the Convention of Scottish
Local Authorities. 
1.3 There is an opportunity to strengthen existing governance arrangements
through the development and implementation of a local council-wide Code of
Practice, reflecting the principles of the Code.  A local Code of Practice has
been developed for implementation across the council to provide a consistent
and more structured approach to the funding of external bodies and ‘following
the public pound’.
1.4 It is recommended that the Policy and Resources Committee: 
a) Approve the adoption of a local Code of Practice for Funding External
Bodies and Following the Public Pound;
b) Instruct officers to implement the Code of Practice across all relevant
funding arrangements; and
c) Request future reporting on compliance and effectiveness of the Code of
Practice.   
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ARGYLL AND BUTE COUNCIL     POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES                                         9 OCTOBER 2025 
FUNDING EXTERNAL BODIES AND FOLLOWING THE PUBLIC POUND 
– CODE OF PRACTICE 
2.0 DETAIL 
2.1 Purpose of Report
To seek approval from the Policy and Resources Committee for the adoption of
a local Code of Practice on Funding External Bodies and Following the Public
Pound, providing a consistent and structured framework for ensuring robust
governance and accountability in the use of public funds.  
2.2 Background
2.2.1 The concept of ‘following the public pound’ is to ensure that the principles of
openness, integrity and accountability, which apply to councils in their
decisions on spending public money, apply equally to funds or other
resources transferred by councils to arms-length or external bodies. 
Essentially, to ensure that public money is used properly and achieves value
for money, it must be possible to trace funds from the council to where they
are ultimately spent – to ‘follow the public pound’ across organisational
boundaries.
2.2.2 When agreeing to transfer funds or provide financial assistance or assistance
in kind to an external body, including an individual, the council should ensure
clear auditable decision making. The primary purpose of arrangements
entered into with external bodies or individuals should be the achievement of
the council’s strategic objectives in the most efficient, effective and economic
manner.
2.2.3 The Code of Guidance on Funding External Bodies and Following the Public
Pound (the Code) was published jointly by the Accounts Commission and the
Convention of Scottish Local Authorities in 1996.  In 2005, the Code was
given statutory backing in the form of a Ministerial Direction under the Local
Government (Scotland) Act 2003, which required every local authority to
comply with the Code when entering into any such arrangement. 
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2.2.4 The Code provides a framework for councils to manage funding relationships
with external bodies in a way that ensures:
• Clear public accountability
• Proper financial oversight
• Alignment with council objectives
• Risk management and performance monitoring.
Audit Scotland has endorsed this approach as a key component of Best Value
and financial stewardship.
2.3 Council Governance Arrangements
2.3.1 The concept of ‘following the public pound’ is not new and there are a range
of arrangements currently in place across the council that follow the principles
of the Code to varying degrees.  However, it is good practice to review and
continue to improve existing governance arrangements.  
2.3.2 There is an opportunity to strengthen existing governance arrangements
through the development and implementation of a local council-wide Code of
Practice, reflecting the principles of the Code.  As such, a local Code of
Practice has been developed for implementation across the council and this is
given as Appendix 1 to this report.  
2.3.3 The key benefits of the council’s Code of Practice include:
• A consistent and more structured approach to the funding of external
bodies and ‘following the public pound’, more closely aligned to the
principles of the Code; and
• The creation of a central repository for funding agreement documentation.
2.4 Scope of the Council’s Code of Practice
2.3.1 The council’s Code of Practice will apply to:
• All external bodies or individuals receiving funding from the council; and
• Any arrangement where council resources are used to support external
service delivery.
It will not apply to contracts for goods and services, governed by procurement
strategy and arrangements.          
2.4 Key Principles
2.4.1 The council’s Code of Practice sets out the following core principles:
• Transparency: Clear documentation of funding agreements and decision-
making;
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• Accountability: Defined roles and responsibilities for council officers and
funded bodies;
• Proportionality: Scrutiny levels based on funding amount and risk; 
• Performance: Monitoring of outcomes and financial reporting; and
• Termination and review: Clear exit strategies and periodic evaluations.  
2.5 IMPLEMENTATION 
2.5.1 The council’s Code of Practice will be incorporated into council funding
procedures and shared with all relevant departments and external partners.  
3.0 RECOMMENDATIONS 
3.1 It is recommended that the Policy and Resources Committee: 
a) Approve the adoption of a local council Code of Practice for Funding
External Bodies and Following the Public Pound;
b) Instruct officers to implement the Code of Practice across all relevant
funding arrangements; and
c) Request future reporting on compliance and effectiveness of the Code of
Practice.
4.0 IMPLICATIONS
4.1 Policy - None  
4.2 Financial - Guidance will support financial oversight and governance.  
4.3  Legal – Guidance will support the council in ensuring and evidencing Best
Value when awarding funding.
4.4  HR - None
4.5 Customer Service - None
4.6 Risk – Guidance outlines measures and controls to mitigate financial risks. 
4.7 Climate Change - None
4.8  Fairer Scotland Duty - None
4.9 Equalities - protected characteristics - None
4.10 Consumer Duty - None
4.11 Island Communities - None
4.12 Children’s Rights and Wellbeing - None 
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Kirsty Flanagan
Executive Director /Section 95 Officer with responsibility for Financial Services
20 August 2025 
Councillor Ross Moreland, Policy Lead for Finance and Commercial Services
For further information contact: Carolyn Earl, Interim Head of Financial Services
carolyn.earl@argyll-bute.gov.uk 
Appendix 1 – Funding External Bodies and Following the Public Pound 
- Code of Practice. 
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ARGYLL AND BUTE COUNCIL 
LOCAL CODE OF PRACTICE 
FUNDING EXTERNAL BODIES AND 
FOLLOWING THE PUBLIC POUND 
AUGUST 2025
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Contents
1. Scope and Background ....................................................................................................... 1
2. Application Process and Agreements .................................................................................. 2
3. TIER 1 (Cumulative Annual Funding is equal to or greater than £2 million) ......................... 4
4. TIER 2 (Cumulative Annual Funding is greater than £50,001 but less than £2 million) ....... 6
5. TIER 3 (Cumulative Annual Funding is between £1,000 and £50,000) ............................... 7
6. Funding Agreement ............................................................................................................. 9
7.     Payments………………………………………………………………………………………. 9
8. Termination ....................................................................................................................... 9
9. ‘Group Accounts’ Concept ............................................................................................. 10
10.  Possible Representation and Participation in External Bodies ................................. 11
11.    Financial and Operational Risk Assessment .............................................................. 13
12     Flowchart .......................................................................................................................... 16
13.    Central Grant Agreement Register ................................................................................... 17
14.    Glossary & Reference Document: .................................................................................... 19
Appendices  .............................................................................................................................. 23 
Appendix A  - Funding Checklist in Support of your Application  ………………….……..….23
Appendix B  - The Approval Process …………………………………………………………...24
Appendix C  - Funding Award – Monitoring Review Checklist ………………………….……25
Appendix D  - Financial Paperwork Check …………………………………………………..…26
Appendix E  - Operational Capacity Assessment ……………………………………….….….28
Appendix F  - Style Grant Agreement ……………………………………….…..…………..….30
Appendix G – Council Priorities…………………………………………………………………..41 
Version Control
Version Author Date Changes
1.0 SM, AMS, ML 27 Feb
2025 
1.1 SM, AMS, ML Aug 2025 
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1. Scope and Background 
1.1 ‘Following the Public Pound’ means ensuring that there is proper accountability
for public funds used in delivering services, irrespective of the means of service
delivery. 
1.2 When agreeing to transfer funds or provide financial assistance or assistance
in kind to an external body, including an individual, the Council must be clear
about its reasons for doing so and clear auditable decision making should
always apply. The prime purpose of involvement with an external body, or
individual should be the achievement of the Council’s strategic Objectives in
the most efficient, effective and economic manner, not the avoidance of
controls or legal restrictions, which are designed to secure probity and
regularity in the use of public funds. 
1.3 It is the responsibility of each Executive Director to ensure there is clear public
accountability for public funds that are provided from their budgets to external
bodies. An individual should be identified as Lead Officer for each body in
receipt of funding from the Council. 
1.4 The concept of ‘Following the Public Pound’ applies when a public body such
as the Council or the HSCP decides to provide financial assistance to external
organisations. In these arrangements, the Council agrees to provide financial
assistance and/or assistance in kind to external organisations for the delivery
of specified services or projects. 
1.5 This Code covers all funding for external bodies provided to specific
beneficiaries who receive a grant or financial assistance or assistance in kind
from the Council. 
1.6 For the avoidance of any doubt, this Code does not include payments made
under a commercial contract for works, goods and services. For payments
made under commercial contracts Services should refer to the Council’s
Procurement Manual which forms part of the Council’s Contract Standing
Orders. 
1.7 There are some circumstances where the Council may act as a “Pass Through”
Organisation whereby UK or Scottish Government acting as Grantor award a
grant to the Council as grantee and the funds are to be allocated to an external
organisation. In those circumstances Services should seek advice from the
Financial Services Team and the Procurement and  Commercial Contract
Management Team (PCCMT) – legalcontractsupport@argyll-bute.gov.uk to
put in place a  relevant agreement ensuring the obligations conferred on the
Council are passed through to the external organisation and provides the
Council with a mechanism to claw back funds in the event of a failure to deliver
or request by funders to return the fund. 
1.8 The glossary provides helpful definitions in relation to what, for example,
constitutes an external body and what constitutes financial assistance
/funding/subsidy /assistance in kind.
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1.9 Governance of public funds does not end when the payment is made, it
continues at a number of levels, including risks that may damage the Council’s
reputation, that statutory obligations are not met and that public funds are
misused, wasted or lost. The level of assurance that is therefore required about
the organisations ability to deliver the services the Council has funded must
reflect the risks that exist. 
1.10 This Code follows the principle that different levels of scrutiny are required
depending on the level of risk posed by each funding arrangement, the control
exercised over the organisation by the Council and/or the level of funding given
to each organisation. This approach is proportionate and will minimise the risks
posed by organisations to our reputation, finances and statutory obligations
and also ensure that the requirements on small organisations are not too
onerous. 
1.11 The risk assessment procedures will be based on the level of influence the
Council holds over the organisation, the funding band, and the organisation’s
performance arrangements. 
1.12 The Council may provide assistance in kind to external bodies. The true cost
of assistance in kind, net of contributions by the external body, will be taken
into account in the allocation of funding. In determining the true cost of
assistance in kind, note will be taken of the Council’s policy of charging for
Council services on a full cost recovery basis subject to policy exemptions and
in line with statutory requirements. 
2. Application Process and Agreements 
2.1 It is best practice for any decisions to fund an external organisation to follow an
application process which is open, fair and transparent. The decision to make
an award should have a clear set of eligibility criteria and decisions to fund
should be made after a clear evaluation process carried out on behalf of the
relevant budget holder. 
2.2 Once a decision is made to offer funding or assistance in kind the decision
should be committed to writing by way of a relevant agreement, depending on
the type of funding. These written agreements will define roles, responsibilities
and liabilities and will be used to define clear and unambiguous relationships
and set out the funding and monitoring arrangements throughout the funding
period. 
2.3 To determine the level of monitoring/checks required, the following will be used: 
Risk/Control 
• An organisation that is significant in size and over which the Council
exercises substantial control i.e. those whose annual results are included
in the Council’s Group Accounts – Refer to Tier 1 
• An organisation over which the Council exercises substantial control but is
smaller in operational scale to the above i.e. those defined as part of the
Council’s Group but whose annual results are not included in the Group
Accounts due to materiality – Refer to Tier 2
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• An organisation that the Council has an interest in but does not control –
Refer to Tier 3 
And/or 
Funding: 
• Cumulative Annual Funding is equal to or greater than £2 million – Refer
to Tier 1 
• Cumulative Annual Funding is greater than £50,001 but less than £2
million – Refer to Tier 2 
• Cumulative Annual Funding is between £1,000 and £50,000 – Refer to
Tier 3 
2.4 The level of assurance to be followed will be the highest identified in assessing
the above criteria. 
2.5 Where annual funding is less than £1,000, an officer may still choose to follow
the procedures laid down for Tier 3, as although the level of funding does not
fall within the following the public pound guidance, the level of risk may be such
that it would be prudent to follow these procedures. 
2.6 For the purposes of compliance with this Code and for cumulative annual
funding of £1,000 and above, officers should, as a minimum, obtain proof of
the existence of the organisation, governance arrangements, confirmation that
the organisation’s aims and objectives are aligned to the relevant project or
policy objective the Council or funding organisation is trying to achieve and a
breakdown of the funding. A letter of agreement setting out the purpose of the
funding, relevant conditions and monitoring arrangements or grant agreement
depending on the Tier should be prepared to set out the various responsibilities
on both the Council and the organisation. 
2.7  For all organisations who receive such funding, the Council will identify: 
• The budget holder within the service providing the funding together with
delegated authority to make the award/offer financial assistance; 
• The relevant accounting team contact; and 
• The location of the relevant budget (financial code) 
2.8 The Council will manage the risks posed through the delivery of services by
external bodies using established risk management processes and procedures
at an operational and strategic level.  Each service will be responsible for
managing their own grant process, including the management and ongoing
monitoring and review of any associated risks, at an appropriate frequency. 
The management of risk at the operational level will inform the assessment of
risk in the Strategic Risk Register, the highest level of the Council’s risk
management structure. 
2.9 The Procurement and Commercial Contract Manager has responsibility to
maintain a SharePoint Register of SLA’s, grants and agency workers in a
central SharePoint repository. All financial assistance granted by Services
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whether by way of direct financial assistance or assistance in kind  should be
uploaded to this Sharepoint site which is available here Link to SharePoint
Register 
2.10 It is the responsibility of relevant Head of Service for each of the Services
allocating any financial assistance to external organisations to maintain current
and relevant information of all funding arrangements on the central Sharepoint
site and to ensure that all funding arrangements have an appropriate level of
monitoring and reporting per the tier system referred to in section 3. It should
be noted the Sharepoint site is separate to the Council’s Contract Register
which is for the purposes of recording and managing commercial contracts via
the Procurement process and is governed by the Council’s Procurement
Manual. 
3.  TIER 1 (Cumulative Annual Funding is equal to or greater than £2 million) 
3.1 Information Required from the Funded Organisation 
3.1.1 The following list determines the minimum information requirements of the
Council for the whole organisation and the timescales in which these are
required: 
• Financial Plan - detailed one year plan and summary 3 year plan. This will
apply for each period for which funding is being granted; 
• Management Accounts - to be submitted quarterly and no later than
6 weeks after the period end to which they relate; and 
• Financial Statements - any registered company seeking funding for the
first time must provide annual accounts for the 3 preceding financial years
(unless a new body or less than 3 years old), audited or approved in line
with Companies Act requirements for a registered company or guidance
from the Office of the Scottish Charity Regulator (OSCR), in the case of a
charity. Thereafter, an organisation in receipt of Council funding must
present an annual set of accounts audited or approved (as required by the
Companies Act or OSCR) within nine months of the financial year end. 
It is recognised that some organisations will, due to their size be exempt
from the audit requirements of the Companies Act, in these circumstances
accounts approved by the board / trustees / directors of the organisation
and which include a statement setting out their responsibilities, including
that of keeping proper books and records will suffice. 
• Objectives - statement of organisational strategic objectives.
• Risk Register – corporate risk register to be supplied for each period
for which funding is being granted.
• Constitution/governance documentation should be held on file 
3.1.2 Failure to comply with the above may result in the withdrawal or suspension of
Council funding. 
3.1.3 In addition to the minimum requirements as set out above, the Council will have
the right to ask for or inspect: 
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• Details of the performance of the organisation against the
organisation’s financial plan; 
• Copies of (non-confidential) Minutes of the Board of Directors or Trustees
meetings; and 
• Details of the organisations financial and non-financial transactions,
policies and procedures 
• Any other information reasonably considered to be relevant to the
proposed funding 
3.2 Financial Checks to be completed by the Council 
3.2.1 The following list details the financial checks that must be carried out by the
Budget Holder, with support from their Finance Team contact, and the
timescales for completing these checks. 
3.2.2 Checks required every two years: 
• Ensure the organisation has adequate policies and procedures in place
to govern the way their finances are handled. See Appendix C for details. 
3.2.3 Annual checks: 
• Check that the projections in the financial plan are realistic and
achievable; 
• Check that sufficient cash exists to enable the organisation to meet its
financial obligations for the foreseeable future (at least 3 months); and 
• Check that any other material sources of external funding are secure
and assess any risks relevant to the ability of the organisation to
continue as a going concern. 
• Check the organisation has the capacity to deliver the objectives of the
funding agreement and has provided sufficient monitoring/management
information to meet reporting obligations 
3.2.4 Where the organisation does not meet the criteria required to demonstrate its
operational or financial capability, further discussions will take place to review
its financial plans. Funding will only be approved where an organisation can
demonstrate it has the ability to continue to meet the objectives for which
Council funding is to be provided as well as its own financial obligations. 
3.3 Approval, Monitoring and Reporting Process 
3.3.1 Approval for funding will be given by the relevant Service, through its budget
approval process and delegated authority arrangements or through the
Council’s committee structure as appropriate or Policy and Resources
Committee (in the event of the funding being beyond the budgeted contribution,
i.e. the budget set for the organisation). An application process should be  used
as part of the decision making 
3.3.2 An agreement committed to writing must be put in place covering the approval
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process and the Service are also required to update the SharePoint Link to
SharePoint Register with a copy of the signed agreement attached.   
Example of a grant agreement is detailed in Appendix F 
3.3.3 The Monitoring Body will be the relevant Service, where an annual report will
be presented to DMT in the first instance, by the Budget Holder, based on
reports received from the organisation. The report will cover financial
performance as well as the aims and objectives of the organisation and how
these are being met, whether the standards set by the Council have been met,
other performance measures and targets and where applicable future plans. 
3.3.4 If the monitoring report shows any areas of concern then a further report should
be submitted to the relevant DMT. 
4. TIER 2 (Cumulative Annual Funding is greater than £50,001 but less
than £2 million) 
4.1 Information Required from the Funded Organisation 
4.1.1 The following list determines the minimum information requirements of the
Council and the timescales in which these are required: 
• Financial Statements - any registered company seeking  funding for the
first time must provide annual accounts for the preceding  three financial
years (unless new body or less than one year old), audited or approved
in line with Companies Act requirements for a registered company or
guidance from the Office of the Scottish Charity Regulator (OSCR), in the
case of a charity. Thereafter, an organisation in receipt of Council funding
must present an annual set of accounts audited or approved (as required
by the Companies Act or OSCR) within nine months of the financial year
end. 
It is recognised that some organisations will, due to their size, be exempt
from the audit requirements of the Companies Act, in these
circumstances accounts approved by the board / trustees / directors of
the organisation and which include a statement setting out their
responsibilities, including that of keeping proper books and records will
suffice. 
• Objectives - statement of organisational strategic objectives.
• Risk Register – corporate risk register
• Constitution/governance documentation should be held on file 
4.1.2 Failure to comply with the above may result in the withdrawal or suspension of
Council funding 
4.1.3 In addition to the minimum requirements as set out above, the Council will have
the right to ask for or inspect: 
• Copies of (non-confidential) Minutes of the Board of Directors or Trustees
meetings; and 
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• Details of the organisation’s financial and non-financial transactions,
policies and procedures 
• Any other information reasonably considered to be relevant to the
proposed funding 
4.2 Financial Checks to be completed by the Council 
4.2.1 Financial checks must be carried out by the Budget Holder, with support from
their Finance Team contact, and the timescales for completing these checks.
See Appendix A for a checklist of financial checks to be completed.  
4.2.2 Annual checks should be completed to: 
• Check that sufficient cash exists to enable the organisation to meet its
financial obligations for the foreseeable future (at least 3 months); and 
• Check that any other material sources of external funding are secure
and assess any risks relevant to the ability of the organisation to
continue as a going concern. 
4.2.3 Where the organisation does not meet the criteria required to demonstrate its
operational or financial capability, further discussions will take place to review
its financial plans. Funding will only be approved where an organisation can
demonstrate it can continue to meet the objectives for which Council funding
is to be provided as well as its own financial obligations. 
4.3 Approval, Monitoring and Reporting Process 
4.3.1 Approval for funding will be given by the relevant Service, through its budget
approval process and delegated authority arrangements or through the
Council’s committee structure as appropriate or Policy and Resources
Committee (in the event of the funding being beyond the budgeted
contribution, i.e. the budget set for the organisation) (see Appendix B). An
application process should be used as part of the decision making. 
4.3.2 The Monitoring Body will be the relevant Council Service, to which an annual
report will be supplied by the organisation for the attention of the Budget
Holder. This should cover service and financial performance and any
significant changes. 
4.3.3 Good practice suggests that the Council Service management team should,
on an annual basis, consider the objectives that are achieved through funding
external bodies and reflect and/or take appropriate action on the annual reports
received from the various organisations. 
4.3.4 An agreement committed to in writing must be put in place covering the
approval process and the Service are also required to update the SharePoint
(Link) with a copy of the signed agreement attached. Example of a grant
agreement is detailed in Appendix F 
5. TIER 3 (Cumulative Annual Funding is between £1,000 and £50,000)
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5.1 Information Required from the Funded Organisation 
5.1.1 The following list determines the minimum information requirements of the
Council and the timescales in which these are required: 
• Financial Statements – The organisation must provide an annual income
and expenditure account and statement of cash balance which has been
approved by a person independent of the day-to-day operational running
of the organisation. Such a statement needs to be provided in support of
each funding claim and for each period for which Council funding is
provided. 
• Objectives - statement of organisational strategic objectives.
• Risk Register – corporate risk register
• Constitution/governance documentation should be held on file 
5.1.2 Failure to comply with the above may result in the withdrawal or suspension of
Council funding 
5.2 Approval, Monitoring and Reporting Process 
5.2.1 Approval for funding will be given by the relevant Service, through its budget
approval process and delegated authority arrangements or through the
Council’s committee structure as appropriate or Policy and Resources
Committee (in the event of the funding being beyond the budgeted
contribution, i.e. the budget set for the organisation). An application process is
recommended as part of the decision making. 
5.2.2 The Monitoring Body will be the relevant Council Service, to which an annual
statement will be supplied by the organisation for the attention of the Budget
Holder. This statement should set out how the organisation has met the
objectives for which Council funding has been provided. 
5.2.3 The annual statement must be reviewed and signed by the relevant Head of
Service. 
6.  Funding Agreement 
6.1   An agreement committed to writing must be put in place covering the approval
process and the Service are also required to update the SharePoint (Link to
SharePoint Register) with a copy of the signed agreement attached.. Example
of a grant agreement is detailed in Appendix F 
6.2 This agreement will include non-financial targets and information, but as a
minimum the following must be included: 
• The purpose of the funding and the expectation of use; 
• The Council policy/strategy the funding is linked to; 
• The value of funding approved by the Council, including payment date
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information; The period over which the funding applies; 
• Financial reporting requirements; 
• Activity monitoring and reporting requirements; 
• A statement on the consequences of failure to provide reporting
information to the Council, i.e. the discontinuation of further funding; 
• A statement on the ability of the Council to deduct any debts due to the
Council prior to making any further awards; 
• A statement on access to the accounting records of the organisation that
requires to be given to Council staff, including internal and external audit
staff. 
• Details of Council representation i.e. Councillors and Officers. 
• The need for the Council to be acknowledged for its support on all
publicity material relating to the project/service; and 
• Clarification of procedures for cancelling the Funding Agreement. 
7. Payments 
7.1 A schedule of payments will be agreed with the receiving organisation, where
appropriate, prior to the commencement of the financial year. Awards in
excess of £50,000 per annum should generally be paid by monthly instalments
but as a minimum, no fewer than four quarterly instalments, to minimise the
Council’s financial risk exposure, in the event of the organisation encountering
financial difficulties. In exceptional circumstances, alternative payment terms
may require to be made, for example, to meet cash flow requirements. 
Arrangements should be considered on a case-by-case basis and take due
cognisance of risk. 
7.2 Payments will not be made to the organisation until all required information is
submitted and checked and all financial checks have been satisfactorily
completed. This will include a check by the Budget Holder that a correctly
calculated payment schedule is in place. 
7.3 In order to confirm that the relevant information has been received and checks
completed the Budget Holder should retain, in the organisation’s file, a
completed copy of the checklist – see Appendix A. 
8. Termination 
8.1 The agreement to provide financial support may be terminated if the Grant
Recipient fails to meet the obligations set out on the relevant funding
agreement which includes: 
•    A failure to perform any substantial obligation on its part; or 
• Agreed performance indicators, or objectives or relevant conditions of the
funding or investment, including the provision of information requested are
not met; or 
• The monitoring/evaluation of the organisation and/or its performance are
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deemed unsatisfactory by the Budget holder. 
• Relevant termination provisions should be set out in the written agreement
between the parties 
• On early termination of the agreement all unspent funds should be returned
to the Council and a pro rata proportion of the annual funding will be repaid
by the Grant Recipient to the Council 
8.2 The agreement to provide financial support may be terminated with
immediate effect where the organisation: 
• Is unable, at any time, to satisfy the Council that sufficient cash exists to
ensure its cash flow projections can be financed; or 
• Passes a resolution for winding up other than for the purposes of solvent
amalgamation or reconstruction where the resulting entity assumes all of
the obligations of the defaulting organisation; or 
• Is deemed insolvent; or 
• Makes or proposes to make any arrangement with its creditors; or 
• Appoints a liquidator, receiver or administrator over any of the assets of
the organisation 
• Any termination of the agreement shall not affect any rights or liabilities
placed upon either party which have accrued prior to the date of
termination. 
9. ‘Group Accounts’ Concept 
9.1 Where the Council has entered into a financial arrangement with an external
organisation that results in the organisation being treated as a subsidiary in
terms of the ‘Group Accounts’ concept under the Code of Practice on Local
Authority Accounting then the following will apply: 
• Draft financial statements are required to be provided to the Council on a
timescale to be agreed with the Finance Manager, to enable the proper
and timely production of the Council’s unaudited annual accounts each
year. 
• Audited financial statements and a summary of any audit adjustments are
to be provided to the Council on a timescale to be agreed with the Finance
Manager, to enable the proper and timely production of the Council’s
audited annual accounts each year. 
• An annual assurance statement on the system of internal controls,
including financial controls, is to be sent to the Finance Manager –
Corporate Finance, for review and to inform the production of the Council’s
Annual Governance Statement for those companies included within our
group accounts. 
9.2 The Council recognises the importance of its relationships with those
organisations that form part of its group. In relation to the effectiveness of
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governance arrangements and systems of internal control for the council’s
group entities, the Council places reliance on the formal external audit opinion
contained in the financial statements of each individual body. 
10. Possible Representation and Participation in External Bodies 
10.1 In considering the question of representation it is important that the Council is
clear about why it wants representation and is transparent in its decision
making about which Councillors or officers will be involved and why.  
10.2 The Council will only seek representation on the board or committee of an
external body where: 
• the body clearly contributes to the achievement of the Council’s strategic
aims and objectives; 
• the body is considered to be a strategic partner; or 
• it is important for the Council’s commitment to be visible. 
10.3 Potential conflicts of interest that arise when Councillors or officers sit on the
boards or committees of external bodies funded by the Council will be removed
through the use of funding agreements. 
10.4 The Council maintains an up-to-date register of interests (representation on
external bodies) and periodically review the indemnity arrangements in place
for directors and officers, and trustees within external bodies. The master
register of appointments will be held by the Executive Director Douglas
Hendry. 
10.5 The Council will review its policies with other organisations upon the request
of the external organisation. 
10.6 Where the Council participates as a decision-maker, adviser or observer of an
external body the Council must provide advice and guidance to the Councillor
and/or Officer involved. This should cover: 
• their responsibilities to the Council and to the external body; 
• the potential for conflicts of interest and highlight the need to have regard
to the national Code of Conduct for Councillors on the matter – including
declarations of interest; 
• the need to recognise their duties towards the external body differ from
their duties to the Council; and 
• the limitations on what they may disclose to the Council where there is a
conflict of interest. 
10.7 Councillors’ responsibilities to the Council: Councillors usually represent a
political party but can also be independent. If they are a member of a political
party, their priorities while in office are influenced by the priorities of the party.
Councillors variously act as: 
Representatives of a particular ward area, decision makers for the whole
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council area, policy makers for future activities of the council, auditors of the
work of the council, regulators of planning, licensing and other matters required
by government and as community leaders.
10.8 Officers’ responsibilities to the Council: Officers engage in direct operational
management of the Council's services. It is also the responsibility of the Chief
Executive and senior officers to help ensure that the policies of the Council are
implemented.
10.9 Responsibilities to the external body: Councillors will be bound by the rules of
conduct of these organisations and their responsibility for any actions taken by
them as a member of such an organisation will be to the organisation in
question. Councillors must also continue to observe the rules of the Councillors
Code of Conduct in carrying out the duties of that body1.
10.10 If a Councillor becomes a director of a company as a nominee of the Council
they will assume personal responsibilities under the Companies Acts. It is
possible that a conflict of interest may arise between the company and the
Council. In such cases it is the Councillor’s responsibility to take advice on their
responsibilities to the Council and to the company. This will include questions
of declarations of interest.
10.11 Where a charity trustee is faced with a conflict of interest between the interests
of the charity and those of the Council the interests of the charity must come
first. The charity trustee must act in the interests of the charity to which they
have been appointed, rather than in the interests of the Council. If in relation
to a particular issue the conflict is irreconcilable, then the charity trustee in
question must make this known to the other charity trustees and not take part
in any further discussion or decision-making on the issue.
10.12 Conflicts of Interest: Interests which require to be declared (if known to the
Councillor) may be those where the Councillor has already registered an
interest and those matters where the Councillor considers there is a connection
as set out in para 5 of the Code of Conduct for Councillors and that the
objective test, as set out therein, is met. Most of the interests to be declared
will be personal interests but, on occasion, you will have to consider whether
the interests of other persons require you to make a declaration. In specific
relation to Following the Public Pound the following applies:
10.13 A Councillor may serve on other bodies as a result of express nomination or
appointment by the Council or otherwise by virtue of being a Councillor.
Membership of statutory Joint Boards or Joint Committees which are
composed exclusively of councillors does not raise any issue of declaration of
interest in regard to Council business.
10.14 In relation to service on the boards and management committees of limited
liability companies, public bodies, societies, charities, trusts and other
1 The Councillors Code of Conduct is available at: http://www.gov.scot/publications/code-coduct-
councillors/ published 5 April 2018
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organisations, the Councillor must decide, in the particular circumstances
surrounding any matter, whether there is a connection that requires an interest
to be declared. Only if they believe that, in the particular circumstances, the
nature of the interest is so remote or without significance, should it not be
declared. It is vital to always remember the public interest points towards
transparency and, in particular, a possible divergence of interest between the
Council and another body. 
10.15 The Councillor Code of Conduct includes specific exclusions in relation to the
declaration of interests. These apply to enable the Councillor to take part in
the consideration and discussion of, and to vote upon, any matter relating to
the body in question. The Councillor is required to declare his or her interest
at all meetings where matters relating to the body in question are to be
discussed. This is always provided the exclusion does not apply in respect of
any matter of a quasi-judicial or regulatory nature where the body in question
is applying to the local authority for a license, a consent or an approval, is
making an objection or representation or has a material interest concerning
such a license, consent or approval or is the subject of a statutory order of a
regulatory nature, made, or proposed to be made, by the local authority. 
10.16 Limitations on what can and cannot be disclosed: This cannot be easily defined
and Councillors and officers are advised to seek advice from, for example, the
Council’s Monitoring Officer should there be uncertainty about issues of conflict
of interest. 
10.17 It is not possible for the Council to ensure Councillors or Officers of the Council
in relation to their capacity as trustees, directors or officials, therefore it is for
each external organisation to consider their own risks and determine the level
of insurance / indemnity cover that’s required. There will be circumstances
where no indemnity insurance is required, and this is acknowledged by the
Council. 
10.18 The Council will periodically check the indemnity arrangements that exist
within external bodies where Councillors or Officers participate. 
10.19 The Head of Legal and Regulatory Support retains a register of representation
on external bodies in a format they deem suitable for the purpose.  Decisions
in relation to representation will be taken by the relevant Council Committee or
at the first meeting of the Council. 
11. Financial and Operational Risk Assessment 
11.1   Financial Assessment and Approval 
11.1.1 For funding awards there requires to be a financial assessment made and
documented by  the relevant qualified finance contact for the Service  , and
signed off by the relevant Finance Manager in relation to the financial stability
of the organisation and for those which have operated for more than 3 years,
3 years financial statements should be supplied to the Council in the first
instance. Where the funding is between £50,000 and £2 million this should be
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looked at on the basis of the preceding year’s approved or audited financial
statements, cash flow and business plan. 
11.1.2 Newly (or recently) formed organisations should be asked to submit detailed
financial plans together with cash flow forecasts, and/or business plans. 
11.1.3 Services are required to source the relevant documentation. 
11.1.4 Where specific issues exist or additional information may be helpful to the
assessment of the organisation a credit check may be appropriate and should
be discussed with your line manager prior to this being obtained. These can
be obtained from the Procurement Team contact. 
11.1.5 Once all satisfactory documents are in place this should be signed off by the
relevant Finance Manager. 
11.2 Operational Risk Assessment 
11.2.1 Matters which should be considered as part of the assessment of the
organisational capability for awards of funding in excess of £5,000. 
11.2.2 Does the organisation have a management board to oversee the direction,
service delivery and financial stability of the organisation 
11.2.3 Is the organisation a registered charity, and if so have they complied with
guidance from OSCR 
11.2.4 Is the organisation a registered company? And if so have they complied with
their requirements under Companies Act 
11.2.5 Does the organisation have a clear statement of purpose and organisational
objectives 
11.2.6 Is the organisation able to provide evidence or other support to demonstrate
achievement of its objectives and purpose 
11.2.7 Are there any known reasons that would result in a risk to the Council’s
reputation through association with an external body if financial or service
delivery problems emerge 
11.2.8 Has there been a determination that the offer of financial assistance/assistance
in kind meets the requirements of the Subsidy Control Act 2022 : see definition
of subsidy -  link for Guidance Subsidy Control rules: quick guide to key
requirements for public authorities - GOV.UK (www.gov.uk)Subsidy Control
rules: quick guide to key requirements for public authorities - GOV.UK
(www.gov.uk) 
If so, please document. 
The Budget Holder and/or other people undertaking the operational capability
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assessment should document their findings (Pro forma – Appendix E),
together with their recommendation as to whether the organisation is fit and
proper to be considered for funding. Where conditions need to be attached to
any Funding Agreement, these should be documented within the assessment
pro forma Appendix E should be signed by the budget holder and used as
authority to sign the relevant agreement. The Council’s authorised signatories
list can be found here: 
https://intranet.argyllbute.gov.uk/sites/default/files/carr_signatories_3.docx 
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12 Flowchart   
Argyll and Bute Council – Funding for External Bodies 
External Body 
Budget
Holder
Y                N  Y              Y 
N
Finance
Contact/
Finance
Manager 
Service
Department 
Procurement
Manager                                                        Credit Check if
required
Central Register
Check
Annual Reports/Statements
considered by monitoring
body
Assist Budget Holder to
undertake financial
checks
Group Account
impact
considered
The Subsidy Control Act
must be considered
alongside funding
application
Check financial
and non-financial
matters
Funding Agreement
prepared and service
entered onto Central
Database
Collate reports and
committee report if
necessary
Collates
Application
Provide relevant
documents
Notification of
funding received, and
agreement accepted
Annual
Monitoring
Report prepared
Service
Terminates 
Notification
received and
service not
delivered
Funding Agreed
(by Committee if
necessary)
Funding beyond
1 financial year?
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12.1 This can be described in the following way 
• Application for funding received / Identified need for external body to
deliver a service on behalf of the Council 
• Determine Level of Funding Required  Indicates information /
documentation / agreement type required 
• Budget Holder, with support from their Finance Team contact,
undertakes financial and non-financial scrutiny and Serious and
Organised Crime Checks where appropriate. 
• Checklists completed – see Appendix A, B, C & D 
• Decision taken under Service scheme of delegation, or if calls for it,
Committee approval 
• Funding Agreement put in place by Budget Holder using proforma
agreement 
• Budget Holder informs the relevant Head of Service to enable them to
agree the update to the SharePoint Register Link to SharePoint Register 
• Service Department liaises with Financial Services to consider the wider
aspects of the Council’s Group Accounts 
• Monitoring reporting undertaken by the external body 
• Annual Financial Statements submitted by external body for inclusion in
Group Accounts if required 
• Budget Holder provides annual information to Head of Service, Service
Management Team or Committee as appropriate 
• Budget Holder manages and maintains the organisational relationship
with the external body 
• Funding extending beyond a single financial year is subject to annual /
ongoing financial and non-financial checks 
13. Central Grant Agreement Register 
13.1 The Council’s Procurement, Commercial and Contract Management
Team Manager will maintain the Council’s Central Grant/Agreement
Register. This register contains all grants/agreements awarded as a result
of a grant exercise, including all agreements made under this Code of
Practice. The Council’s Procurement and Commercial Contract
Management Manager has the responsibility for maintaining the central
repository SharePoint site for: 
• All funding approved that meets the criteria set, which is covered by
this Local Code of Practice.
• Agency Workers ( not covered by this Guide) 
• Off payroll workers ( not covered by this guide) 
13.2 It should be noted that the responsibility for managing the agreements
within the central repository remains with the relevant Head of Service 
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who is responsible for adding and maintaining their services
grants/agreements on the Central Grant/Agreement Register on
SharePoint.   Link to SharePoint Register 
13.3 The Register is a key data source and as such the information and timing
of such being supplied is crucial to the robustness of the information that
is contained therein. The process described in this document and
accompanying flowchart and checklists show when the Register should
be updated. 
13.4 To record an entry in the Register the Funding Agreement should be sent
to the relevant Department’s Head of Service immediately after the award
has been made. The format of the register is shown in Appendix C. 
13.5 If Budget Holders wish to enquire about funding being provided to an
organisation from across the Council, then the Register will allow this to
be carried out. 
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14. Glossary & Reference Document: 
Assistance in Kind Includes all staff time and associated costs
involved in enabling the external body to carry out its
core activities which are essential to its continued
existence e.g. administrative support, professional
services, advice, accommodation, use of equipment,
training, preparation of material for reporting to
Council, etc 
It does NOT include staff time and associated costs
involved i) in supporting and developing groups as
part of the Councils duty to support community action;
ii) in providing advice on setting up the funding and
applications to the Council; and iii) incurred in the
formal monitoring and review of funding
arrangements by the Council. 
Budget Holder The Service representative designated to process the
applications from external bodies for funding, and
who is responsible for the contact with and
relationship between the Council and the external
body. 
Contract A formal written agreement for the provision of goods,
works and services between the Council as a
Contracting Authority and another organisation 
as a result of any procurement procedure carried out
by the Procurement and Commercial Contract
Management Team on behalf of the contracting
authority in relation to the award of a regulated
contract or unregulated contract in terms of the
Procurement Manual including, in particular (i) the
seeking of offers in relation to the contract, and(ii) the
selection of economic operators,(iii) the award of a
regulated contract by a contracting authority. 
Contracting Authority Has the meaning given in section 1. 
Economic Operator Means any person who offers the execution of works,
the supply of products or the provision of services on
the market. 
External Body Means any external organisations that are legally
constituted, trusts, registered charities, voluntary
organisations grant aided bodies and arm’s length
external organisations. 
Finance Team Contact The person who is the named finance contact
supporting the Service in these matters as nominated
by the Service Principal Accountant. 
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Financial Assistance a) a direct transfer of funds (such as grants or
loans);
b) a contingent transfer of funds (such as
guarantees);
c) the forgoing of revenue that is otherwise due;
d) the provision of goods or services;
e) the purchase of goods or services.
Includes monies, grants, capital grants, guarantees,
loans, common good fund contributions, shares,
assets and assistance in kind. 
Where assets, such as property are provided, the
value of the building will not be included in the value
of funding and a committee decision based on a
business case for the use of assets in this way will be
the overriding factor. This will normally exist where
the council wishes the external body to undertake the
delivery of existing council services on its behalf. 
Peppercorn (below market rate) rental / lease
agreements for property should be taken into
account, based on the difference between the
payment made and the market value. 
Grant Agreement A grant is a subsidy or payment of a fund (in cash or
in kind) disbursed by the Local Authority for specified
purposes to an eligible recipient, usually conditional
upon qualifications as to use or maintenance of a
certain standard. 
Monitoring report Will consist of a financial and non-financial
operational report from the external body that
includes confirmation of what has been achieved with
the funding that’s been provided and costs associated
with undertaking this work 
Participation Includes acting as a representative, adviser or
observer at meetings of external bodies. 
Public Contract Has the same meaning as regulation 2 of the Public
Contracts ( Scotland ) Regulations 2015 
Representation Means acting as a full member of the board or
management committee of an external body, having a
decision making capacity with full speaking and voting
rights 
SharePoint site A web site that provides a central storage and
collaboration space for documents, information, and
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21 
ideas. Their own ideas and content as well as
comment on or contribute to other people's.   
Link to SharePoint Register 
Substantial to the Council Funding arrangements that are substantial are
where the external body is receiving in excess of
£2 million per annum. This will include revenue or
capital, recurring or non-recurring funding. 
Subsidy  ‘Subsidy’ means financial assistance which:
a) is given, directly or indirectly, from public
resources by a public authority,
b) confers an economic advantage on one or
more enterprises,
c) is specific, that is, is such that it benefits one or
more enterprises over one or more other
enterprises with respect to the production of
goods or the provision of services, and
d) has, or can have, an effect on;
i. competition or investment within the
United Kingdom;
ii. trade between the United Kingdom and
a country or territory outside the United
Kingdom, or
iii. investment as between the United
Kingdom and a country or territory
outside the United Kingdom. 
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Reference Documents: 
➢ Arm’s-length external organisations (ALEOs): are you getting it right? Audit
Scotland, June 2011 
➢ Following the Public Pound: A follow-up report; Audit Scotland, December
2005 
➢ Code of Guidance on Funding External Bodies and Following the Public
Pound and Operational Guidance; 
o CoSLA & Accounts Commission for Scotland, May 1996 
➢ The Councillors’ Code of Conduct; 
o The Standards Commission for Scotland, July 2018 
➢ Roles and working relationships: are you getting it right? Audit Scotland,
August 2010 
➢ Argyll and Bute Council Procurement Manual 
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Funding Checklist in Support of your Application  (4.2)                                                                                          APPENDIX A 
Financial Year 
External Body 
Service 
Budget Holder 
Completed by 
Requirements for Funding Awards
Information Required: Description of issues and checklist Questions
(these represent minimum requirements) Tier 1 Tier 2 Tier 3
Information required in Support of Application      
Detailed 1-year financial plan and summary 3 year plan provided including
cash flow statement X X Optional
Copies of Annual Accounts including Income and Expenditure and latest
Bank Statement - Audited where there is a requirement under companies
Act or if charity - requirement through Office of the Scottish Charity
Regulator (OSCR) 3 Years 3 Year 1 Year
Statement of organisational Strategic Objectives X X X
Has the organisation adequate Financial Governance policies and
procedures in place  X X X
Is there adequate working capital to meet financial obligations  X X  X 
Assess ability of organisation to continue as a 'Going Concern' X X X
Funding Criteria      
Has the funding criteria been applied prior to the award X X X 
Note:   Where there is an X information must be provided 
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The Approval Process (4.3)                                    APPENDIX B 
Requirements for Funding Awards
Information Required: Description of issues and checklist
Questions (these represent minimum requirements) Tier 1 Tier 2 Tier 3
Approval Process      
Has Subsidy Control Act been considered X X X
Has approval for funding been given by Committee, if so, which one X X X
If not approved through Committee - Approved by X X X
Has Serious Organised Crime (SOC) check been carried out where
appropriate i.e over £50k  X X 
Funding Agreement      
Service Level Agreement required  X X X
Has the signed Service Legal Agreement been entered onto SharePoint
site by Head of Service/delegated officer X X X        
Payment Process      
Has schedule of payments been agreed in line with code of practice X X X
Have all appropriate financial checks been completed and approved X X X
All information held on file as required X X X
Group Account Concept      
Has the issue of Group Accounts been considered  X X   
Note:   Where there is an X information must be provided
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Funding Award - Monitoring Review Checklist (4.3)                                                                                                   APPENDIX C   
Monitoring Requirements for Funding Awards
Information Required: Description of issues and checklist
Questions (these represent minimum requirements) Tier 1 Tier 2 Tier 3        
Monitoring Body      
Who is the relevant Monitoring Service/Department/Committee             X               X               X
Every 2 Years      
Check the organisation has adequate governance policies and
procedures in place to protect public funds  X               X              X
Annually      
Objectives and Outcomes achieved as per Funding Agreement X X X
Outcome Observations X X X
Are any adjustments to funding required as a result of review of
delivery of objectives and outcomes? X X X
Annual report including financial plan for coming year and most
recent Annual Accounts received from external body X X X
Annual report prepared for Committee/Management Team/Head of
Service X X X
Review projections in financial plan to ensure that they are aligned to
agreed outcomes and are realistic and achievable X  X  X
Check there is adequate working capital to meet financial obligations X  X  X 
Assess ability of organisation to continue as a 'Going Concern' X X  X 
Note:   Where there is an X information must be provided
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Financial Paperwork Check                                                                                                                                         APPENDIX D 
Name of External Body 
Council Department 
Departmental Contact 
Budget Finance Contact 
Amount of Funding Request 
Funding Assessment Tier 
Supporting paperwork received with funding application for inspection.  (See funding Tier above to determine paperwork required
for application) 
Requirement Tier 1 Tier 2 Tier 3 Satisfactory
Yes/No
If no, please give explanation
Detailed 1 Year financial plan
and summary 3-year plan
Yes Yes Optional  
Cash Flow Statement Yes Yes Optional 
Annual Accounts, including
Income and Expenditure –
Audited where there is a
requirement under Companies
Act or if a Charity – requirement
through Office of the Scottish
Charity Regulator (OSCR)
3 Years 3 Years 1 Year  
Latest Bank Statement Yes Yes Yes 
Statement of Organisational
Strategic Objectives
Yes Yes Yes  
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27 
Organisations Financial
Governance Policies and
Procedures
Yes Yes Yes  
Adequate working capital to meet
financial obligations
Yes Yes Yes  
Assess ability of Organisation to
continue as a ‘Going Concern’
Yes Yes Yes   
Funding Criteria     
Has the funding criteria been met
and fully checked by finance
prior to award of funding.     
The supporting documentation/information submitted by the applicant/organisation is sufficient to allow Council funding to be
granted. 
Financial Assessment conducted and approved by: 
………………………………………Finance Manager   
Date…………………………… 
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Operational Capacity Assessment                                                                                                                              APPENDIX E 
Financial Year 
External Body 
Service 
Responsible Officer 
Accounting Contact 
Assessment: 
We have considered the following in respect of the above organisation and have summarised our observations and conclusions
below: 
Matters considered (examples – the questions should be tailored according to the nature and amount of funding being considered) 
• Does the organisation have a management board to oversee the direction, service delivery and financial stability of the
organisation 
• Is the organisation a registered charity, and if so have they complied with guidance from OSCR 
• Is the organisation a registered company, and if so have they complied with their requirements under the Companies Act. 
• Does the organisation have a clear statement of purpose and organisational objectives 
• Is the organisation able to provide evidence or other support to demonstrate achievement of its objectives and purpose 
• Are there any known reasons that would result in a risk to the Council’s reputation through association with an external body if
financial or service delivery problems emerge 
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Operational Capability Assessment 
Record any observations in relation to the above 
Recommendation 
The organisation has been assessed, and our overall recommendation is as follows: 
Date completed:
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Style Grant Agreement                                                                      Appendix F 
GRANT
AGREEMENT.doc 
GRANT AGREEMENT  
Between
Argyll and Bute Council 
(Council) 
And
[XXXXX] 
(Grant Recipient) 
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SUMMARY SHEET 
NAME OF GRANT RECIPIENT: 
CONTACT PERSON: 
GRANT RECIPIENT ADDRESS AND
POSTCODE: 
TELEPHONE NUMBER: 
EMAIL ADDRESS: 
AMOUNT OF AWARD: 
DATE AWARD MADE: 
COMMITTEE/PANEL GRANTING
AWARD: 
COUNCIL CONTACT OFFICER: 
COUNCIL OFFICER CARRYING OUT
MONITORING DUTIES: 
DEPARTMENT: 
ADDRESS:  
TELEPHONE NUMBER: 
EMAIL: 
DATE:         
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AGREEMENT 
BETWEEN 
Argyll and Bute Council a Local Authority constituted in terms of the Local Government etc.
(Scotland) Act 1994 including its statutory successors and having its principal office at Kilmory
Lochgilphead PA31 8RT (hereinafter referred to as “the Council”) 
and 
[FULL COMPANY NAME] incorporated and registered in [JURISDICTION] with company
number [NUMBER] whose registered office is at [REGISTERED OFFICE ADDRESS]
(hereinafter referred to as “the Grant Recipient”) 
each a “Party” and together “the Parties” 
Whereas 
(A) The Council has agreed to fund the Activities of the Grant Recipient and the Parties
have agreed to enter this Agreement to document the obligations of each party 
(B) The Grant Recipient acknowledges that the Activities associated with this Fund assist
the Council deliver the Council’s Corporate Plan 2023- 2027 
(C)  The Parties agree as follows: 
1. Definitions 
“Activities” means [ACTIVITIES] as more particularly described in Schedule 1
attached to this Agreement 
“Agreement” means this Agreement between the Parties; 
“Commencement Date” means the last date of the signing of this Agreement 
“Funds” means £[XXXXX] 
“Termination Date” means [DATE] 
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2. DURATION
2.1 The terms of this Agreement shall commence from on the Commencement Date and
continue until the Termination Date unless terminated by either Party on delivering no
less than [NUMBER] week’s written notice or as otherwise provided for by the terms of
this Agreement.
3. FUNDING
3.1 Payment of the Funds shall be made by the Council in respect of the Activities detailed
within this Agreement and shall be used solely for these purposes.
3.2 The Council shall pay the Funds to the Grant Recipient [DATE AND HOW PAID]
3.3 The Grant Recipient must notify the Council’s Contact Officer in writing immediately if
there are any difficulties in respect of fulfilling the terms of this Agreement.
3.4 All unspent Council funds should be returned to the Council at the conclusion of this
agreement.
3.5 On early termination of this contract, a pro rata proportion of the annual funding level
will be repaid to the Council by the Grant Recipient.
3.6 The Grant Recipient must notify the Council’s contact officer if the funding received
from the Council is in excess of 50% of the total funding costs for any project/activity
and arrange to reimburse the overpayment with immediate effect
3.7 All funds allocated must be spent in the current financial period and unspent funds
returned to the Council.
3.8 The Grant Recipient must notify the Council’s Contact Officer in writing immediately if
there are any difficulties in respect of fulfilling the terms of this contract.
4. STATUTORY REQUIREMENTS
4.1 The Parties shall comply with all relevant statutes, by-laws, regulations, Guidance and
Codes of Conduct for the duration of this Agreement. The Grant Recipient shall be
obligated to have in place policies and procedures relevant to ensure compliance of
the foregoing.
4.2 In particular, the Parties shall comply with the Code of Guidance on Funding External
Bodies and Following the Public Pound produced by the Accounts Commission and
the Operational Guidance produced by COSLA together with any revisions or updates.
5. OBLIGATIONS OF THE GRANT RECIPIENT
The Grant Recipient shall be obligated and agrees to:
5.1. Ensure compliance with Protection of Vulnerable Groups (Scotland) Act 2007, which
introduced the PVG Scheme in November 2010 and also ensure that the appropriate
disclosure checks are carried out on any employees working with vulnerable groups.
5.2 Undertake all necessary staff supervision, appraisal, training and development
including, if necessary recruitment of paid staff or volunteers with appropriate
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qualifications to deliver the Activities and comply with the terms of this agreement.
5.3 Ensure compliance with the constitution, rules or other governing instrument of the
Grant Recipient.
5.4 Not transfer, sell or discontinue the business, nor dispose of the assets, which form the
subject of this funding, nor use the buildings, equipment or other assets, which are the
subject of this agreement for any purpose other than the approved activity without prior
written agreement.
5.5 Comply with the monitoring requirements as set out at Section 6 to the Councils
satisfaction.
5.6 All relevant risks including employers’ liability, public liability, buildings and equipment,
and motor vehicles.
5.7 The Grant Recipient warrants to the Council that it has the power to enter this
Agreement and has taken the necessary action to authorise execution, completion and
performance.
5.8 The Grant Recipient agrees that this Agreement will constitute legally binding and
enforceable obligations on the Grant Recipient, and it has entered into this Agreement
in good faith and has made full disclosure to the Council of all material facts relating to
this Agreement.
5.9 The Grant Recipient must demonstrate (to the satisfaction of the Council) that it is
paying the Real Living Wage all directly employed staff of the Grant Recipient as well
as any workers who are not directly employed but are directly engaged in delivering
the grant-funded activity, whether they be sub-contractors or agency staff (including
Apprentices). It should be noted that the Council may (at its sole discretion) apply
limited exceptions to provide funding to organisations who cannot pay the Real Living
Wage in order that the measure remains proportionate.
5.10 The Grant Recipient must demonstrate that all workers employed by the Grant
Recipient have an effective voice at both collective and individual levels and must be
able to evidence same to the satisfaction of the Council. It should be noted that the
Council (at its sole discretion) may apply flexibility to recognise the different forms of
voice that are appropriate for different organisations.
5.11 The Grant Recipient agrees to comply with the criteria narrated in this agreement.
6. MONITORING OF THIS AGREEMENT
6.1 The Grant Recipient shall be obligated to comply with the monitoring requirements set
out in Schedule 2 of this Agreement.
7. LIASON ARRANGEMENTS
7.1 The Parties shall ensure that their nominated officers (or their representatives) meet
as required to discuss all aspects of the Grant Recipients Activities.
8. VARIATIONS
8.1 No variation of this Agreement shall be effective unless it is in writing, refers specifically
to this Agreement and is signed by or on behalf of each of the Parties to this Agreement.
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9. BREACH/TERMINATION
9.1 The Council may terminate this Agreement with immediate effect and demand
immediate repayment by the Grant Recipient of the whole grant or any part thereof
without further liability if the Grant Recipient fails to:
9.1.1. Comply with any of the terms set out in this Agreement and fails to rectify such
failure within thirty (30) days of receiving written notice detailing the failure;
9.1.2. Attend , as appropriate, consultation meetings with the Council;
9.1.3. Communicate in advance over proposed changes in this agreement;
9.1.4. Meet the targets contained in this agreement;
9.1.5. Make decisions or operate systems that do not meet the standards expected by
the Council in managing public funds;
9.1.6. Complete agreed performance indicators or such other agreed quality
indicators.
9.2 This Agreement will automatically terminate with immediate effect and without further
liability if:
9.2.1 There is any default on the part of the Grant Recipient;
9.2.2 The Grant Recipient fails to comply with any of the terms of this Agreement and
fails to rectify such failure within thirty (30) days or receiving written notice from
the Council detailing the failure;
9.2.3 In the event of the Grant Recipient becoming insolvent; going into receivership
or liquidation/sequestration or sign a trust deed for creditors or if it enters into
any arrangement or composition of for the benefit of its creditors, or is unable to
pay its debts as they falls due or;
9.2.4 If the Grant Recipient ceases to operate for any reason;
10. ASSIGNATION
10.1 The Grant Recipient shall not (either wholly or partially) assign or subcontract its
obligations under this Agreement without the express prior written agreement of the
Council.
11. INSURANCE
11.1 The Grant Recipient shall effect and maintain with a reputable insurance company a
policy or policies in respect of all risks which may be incurred by the Grant Recipient
arising out of the performance of this Agreement including but not limited to employers
liability, public liability buildings and equipment and motor vehicles and shall provide
written evidence of such insurance to the Council on demand.
12. THIRD PARTY RIGHTS
12.1 Nothing in this Agreement, express or implied, is intended to or shall confer upon any
party (other than the parties hereto) any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
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36
13. ENTIRE AGREEMENT
13.1 This Agreement supersedes and extinguishes any prior drafts, agreements, minutes of
Agreements, undertakings, discussions, correspondence, communications and
arrangements of any nature whatsoever, whether or not in writing between the Parties
in relation to the matters dealt with in this Agreement and represents the entire
understanding between the Parties in relation to them.
14. GOVERNING LAW
14.1 This Agreement shall be governed and construed in all respects in accordance with the
laws of Scotland and the Parties, insofar as not already subject thereto, hereby
prorogate the non-exclusive jurisdiction of the Scottish courts.
15. DISPUTE RESOLUTION
15.1 In the event of any dispute between the Parties relating to the terms and conditions of
this Agreement they will use best endeavours to reach an amicable and working
solution as soon as possible. Either Party should provide written details of the terms of
the dispute to the relevant Contact Officer/Person and shall propose a time and place
for a meeting between the Council and the Grant Recipient’s representatives where
the representatives shall attempt to resolve the dispute. The other Party shall respond
to such the written details within 5 working days of receipt. If the matter is not resolved
the matter may be referred by either Party to the appropriate Head of Service in the
Council and the appropriate senior officer in the Grant Recipient’s Grant Recipient for
resolution.
16. SIGNATURE OF AGREEMENT
16.1 It is a condition of Award that both parties agree this Agreement before two copies of
the Funding Agreement are signed by the authorised representative of both parties.
One copy should be retained by the Grant Recipient, and the other returned to the
Council’s contact officer.
17. COSTS AND EXPENSES
17.1 Each party shall be responsible for paying its own costs and expenses incurred in
connection with the negotiation, preparation and execution of this Agreement
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37 
This Agreement consisting of this and the preceding seven pages is subscribed as follows:
by Argyll and Bute Council: 
_________________________________________  Authorised Signatory 
_________________________________________  Full Name (Please Print) 
at Kilmory, Lochgilphead, 
on 
before 
_________________________________________  Witness 
_________________________________________  Full Name (Please Print) 
_________________________________________  Address 
_________________________________________ 
by, XXXX 
_________________________________________  Authorised Signatory 
_________________________________________  Full Name (Please Print) 
at 
on     
before 
_________________________________________  Witness 
_________________________________________  Full Name (Please Print) 
_________________________________________  Address 
_________________________________________ 
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38 
SCHEDULE 1 – ACTIVITIES 
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39 
SCHEDULE 2 – MONITORING REQUIREMENTS 
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40 
Version Control
Version Author Date Changes
1.0 ML/MN/ST 23/03/2021 Updated grant terms and conditions to include
requirements of Scottish Government a Fair Work
Action Plan and a Fairer Scotland and in particular, for
grant recipients to pay the real living wage (with limited
exceptions) and to demonstrate that workers have an
effective voice (with limited exceptions). New clauses
5.9-5.10 incorporated and tracked. 
2.0 MN  24/05/2023 New Clause 5.9 stating that Grant Recipient must
demonstrate its paying the real living wage (with
exceptions)  to the satisfaction of the Council 
New Clause 5.10 stating that the Grant Recipient must
demonstrate that all workers employed by the Grant
Recipient have an effective voice at both collective and
individual levels and must be able to evidence same to
the satisfaction of the Council
3.0 ML  8/5/24  Update ref to Objectives to align to 23- 27 Corporate
Plan, revised designation of Grant Funder to Council   
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41 
APPENDIX G 
ARGYLL AND BUTE COUNCIL PRIORITIES 2024 TO 2027
Our overarching aim is clear: Argyll and Bute’s economy and
population need to grow. Each of our Priorities contributes to that
overall goal, and all are interconnected. The need to consider these
in an integrated way will remain at the forefront as we progress
these Priorities.
The key themes and principles which influence and underpin all of
our Priorities are: 
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42 
COMMUNITIES
Why this is a priority:
Empowered and resilient communities
Our communities are as diverse as our geography and have varying needs,
challenges, and opportunities – all of which they are well placed to identify. We want
to harness that local knowledge with confidence and work together to develop shared
priorities. To strengthen our collaboration with and support for our communities, we
will: 
Priority Next Steps/Action
Build stronger connections and
collaborations with communities to increase
empowerment and make the best use of
local knowledge to help shape delivery of
local solutions. 
Meeting people where they live –
progressing an engagement programme
for senior leadership across and around
local communities.
Enhance and deepen our understanding of
local issues and improve opportunities for
collaboration – including launch of the
Aspiring Places: Community Projects
programme in Argyll and Bute 
Use online tools/digital platforms to find
ways to reach those not in established
groups and start ongoing conversations
about local issues.
Take forward a piece of work to support
Area Committees to reshape their
business, decision-making and overall
activities to align with existing/emerging
local plans and issues, following
agreement of priorities. 
Once Priorities agreed by Council – Area
Committee Chairs to have initial discussion
and feed back views to political leadership
as first action.
Reaffirm our commitment to refugee
resettlement, valuing the contribution that
new families and residents make to life in
Argyll and Bute.
Ensure that our approach to refugee
resettlement has regard to the availability
of housing, employment and skills locally
while being delivered through national
funding scheme.
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43 
CHILDREN AND YOUNG PEOPLE
Why this is a priority:
Making Argyll and Bute an attractive choice for families
Giving young people the best start in life, and ensuring we have the right skills for a
prosperous future, are key elements of making Argyll and Bute an ideal choice for
families to stay or to relocate. 
The Argyll and Bute lifestyle already has much to offer and, to play our part in making
that even more attractive, we will: 
Priority Next Steps/Action
Develop our school curriculums with the jobs
of the future in mind, to build up a strong
local skills base and help create more
opportunities for young people to stay and
grow in their own communities.
Look at data from across the Council to
identify skills, service delivery and
employment needs locally – to shape learning
opportunities for the short and medium term
which contribute to overall population and
economic growth. 
Enabling as many young people as possible
go from school to positive destinations of all
kinds.
Work with partners on local further and
higher education provision and
apprenticeship opportunities that meet
identified skills, service delivery and
employment needs. 
Explore ways to enhance Argyll and Bute’s
early learning and childcare offer to support
employment and business needs of local
families alongside its role in nurture and
contribution to access to better life chances
for young people. 
Identify measures to increase provision with
partners.
Enable learners to take full advantage of
emerging technology and to be ready for the
‘jobs of the future’ here in Argyll and Bute.
Pursue opportunities for investment in
schools digital network – 21st century digital
network for schools and wider education
infrastructure. 
United Nations Convention of the Rights of
the Child (UNCRC) – ensuring that views of
children and young people are considered in
decision-making. 
Developing our organisational culture to be
receptive to the views of children and young
people in our decision-making
Continue the programme of improvement in
our schools so that they are a compelling
choice for families, providing good
educational attainment and supporting the
wellbeing of young people. 
Explore options for Education Review.
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44
HOUSING, ECONOMIC GROWTH AND POPULATION
Why this is a priority:
Working to ensure that everyone who needs a home can find one that they can
afford, in the right place, and at the right time
Access to housing is a factor in almost every aspect of Argyll and Bute’s crucial growth
agenda. It contributes to the success of economic development, recruitment,
employment opportunities, service delivery and much more. Argyll and Bute was the
first Council in Scotland to declare a Housing Emergency. We must increase pace
and be agile, ready to innovate and prepared to do things differently in order to see
swift progress.
Shared prosperity and sustainable business growth in Argyll and Bute
We value the impact and return on investment that effective, targeted economic
development can have. We recognise that all kinds of resources are increasingly
limited and must be used to deliver shared prosperity, sustainable business growth
and the best possible outcomes for Argyll and Bute
People are Argyll and Bute’s most important asset in driving forward
opportunities for growth and vibrant local economies
Population growth is crucial to our economic success. Decline impacts on our ability
to sustain and deliver services in the future. There is a predicted drop of 14.8%
between 2018 and 2043, mainly in the 25 to 44 age group. We have a relatively tight
labour market, arising from consistently higher levels of participation and low
unemployment, with critical gaps in public services and key business sectors like
hospitality and construction. This has been exacerbated in recent years by a decline
in working-age population, migration limitations and higher levels of economic
inactivity particularly in the over-50s age group.
We will:
Priority Next Steps/Action
Sharpen focus on the Housing Emergency
Action Plan and other plans/delivery bodies
as appropriate in line with the pace required
in emergency.
Refresh and update our Local Housing
Strategy.
Use policy and fiscal levers at our disposal to
speed up delivery – lobby other agencies
where required.
Seek reform or flexibility on use of Resource
Planning Assumption (RPA).
Looking at overarching plans –
- Argyll and Bute Local Housing
Strategy
- Strategic Housing Investment Plan
- Local Development Plan
- Oban and Helensburgh
Development Masterplans
Using latest data to reframe and target
activities and resources to the right places at
the right times.
Revisit Strategic Housing Fund.
Examine scope to reduce time spent in
temporary accommodation.
Lobbying work
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45 
Drive forward in partnership across all sectors
to deliver on vital areas like key worker
accommodation, mid-market rentals, private
sector development in addition to activity on
affordable homes.
Engagement and partnership working across
all sectors. 
Local Housing Strategy review to open up
greater opportunities for partnership
working and securing additional resources
to support swifter delivery. 
Housing Emergency Action Plan. 
Explore scope for greater commercialisation
of Council assets and otherwise attract
external investment for the Council and
communities.
Build on the existing foundations to derive
further commercial income from Council
assets. 
Explore opportunities for Community
Partnerships to divest/operate Council
assets.
Further develop the approach to
community Benefits and the opportunities
from planning gain for communities to
augment Council funding. 
Take a clear ‘return on investment’ approach
to allocations of resources at all levels –
prioritise action that brings people, jobs and
business to Argyll and Bute through
Maximising community benefit opportunities
from local development and promote
community wealth building.
Agree refreshed Economic Strategies.
Development Masterplans.
Critical evaluation of activities, financial
allocations and requests and how those will
translate into employment or growth. 
Use policy and fiscal levers in our power to
stimulate, attract and incentivise growth – for
example exploring creation of enterprise
zones.
Where power to drive growth sits with other
agencies, lobby for support to complement
the actions we are taking and investments
we are making (e.g. fuel, transport costs in
rural areas) 
Engage with Argyll and Bute’s key sectors
and major employers in food and drink,
tourism, construction, energy and social care
to progress shared priorities and work in
partnership where possible. 
Continue to lead on bringing depopulation to
national government attention.
Bringing together group of depopulating local
authorities to act together as collective voice.
Engage with Scottish Ministers and
Ministerial Taskforce. 
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46
TRANSPORT, INFRASTRUCTURE AND DIGITAL CONNECTIVITY
Why this is a priority:
Keeping people, businesses, goods and services moving through Argyll and
Bute
Argyll and Bute’s geographic mix of rural and island communities mean that transport,
infrastructure and digital connectivity are crucial jigsaw pieces in the drive for growth.
At the most basic level, we need effective and reliable ways to bring people, goods and
services to Argyll and Bute – and to carry our own products. Like transport connectivity,
reliable, resilient digital links have a highly significant contribution to make to growing
the population and the economy. They can add considerable value to Argyll and Bute’s
position as an ideal choice to locate, offering an attractive lifestyle and opportunities to
learn, work and do business.
In the same context we need to consider the impact of climate change on that
essential infrastructure.
This particular area is complex given our geography and the range of agencies who
have responsibility for maintaining the resilience of lifeline connections of all kinds.
Our principles of return on investment, partnership working, and speaking up for Argyll
and Bute and its people will all come into play here. We will:
Priority Next Steps/Action
Lobbying for national infrastructure
investment and interventions where
responsibility lies with other agencies –
maintaining pressure for delivery at pace of
the permanent solution for the A83 Rest and
Be Thankful.
Political lobbying for urgent action on ferry
services which brings the capacity and
timetabling needed to support lifeline links
and routes to market.
Representing to industry and national
governments on disproportionate transport,
fuel and energy costs which contribute to
higher rural poverty/deprivation levels and
impact on growth.
Establish political lobbying group (which
will tackle a variety of issues), agree
membership and scope.
Agree themes/focus of political lobbying
activity – including A83, Rest and Be
Thankful, A82 upgrade, A85
improvements.
Constructive engagement with Scottish and
UK Government Ministers.
Find ways to join our voice with those of
communities who tell us this is a priority for
them too.
Seek full funding for delivery of internal ferry
services, given that responsibility for these
sits with Transport Scotland.
Pursue formal request for full funding, noting
previous shortfall.
Use strong data to develop a Transport
Strategy which recognises the significance of
connectivity to population and economic
growth.
Explore options for full transport study (which
can include looking at integration,
organisation options) following RIS Review.
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47 
ENVIRONMENT
Why this is a priority: 
The Council has already declared a climate emergency and must continue to
keep this issue as a primary consideration 
Recognising the importance of climate change is a key factor when we consider how
we do business as well as the impact of our geography. 
The Council has already committed to achieving 75% carbon reduction by 2030 and
net zero before 2045. 
We will: 
Priority Next Steps/Action
Reduce carbon emissions generated by the
Council.
Agree policies in relation to waste,
recycling and other environmental issues,
which will inform next steps.
Evaluate Council targets for deliverability and
improvement. 
After agreement of policies, agree and
implement SMART measures.
Harness opportunities from expansion of
renewable energy sector in the area
Explore potential community/Council benefits
from renewables projects.
Revisit exploration of renewables projects on
Council land. 
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48 
SUSTAINABLE SERVICE DELIVERY
Why this is a priority:
We want to provide the best services we can for the money and resources
available – and make clear the standards that our communities can expect. We
know that this is really important to local people. 
Over the remainder of this Council term, local government finances and resources of
all kinds will be under more pressure than they’ve ever been. Resource levels will
inevitably inform service standards and delivery. We need to be more vigilant than
ever before about alignment of investment and action to our priorities. Identifying clear
returns and outcomes for Argyll and Bute, from allocations of resources, must the
starting point of action or investment. 
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49 
Fiscal constraints have put pressure on services and limit what we can deliver. It is
important that our models of service delivery are more efficient and more effective,
with clear and achievable standards. We want to transform services efficiently and at
pace, and in ways that align with the resources we have – a Council fit for the future.
We will: 
Priority Next Steps/Action
Provide the best services we can with
the money available.
Expand the RIS Review approach to other
service areas to ensure we have the most
effective and efficient delivery models
possible.
Develop proposals to expand and make
the most of digital/technology, including
further exploration of AI. 
Make clear the service standards that
communities can expect with the resources
available.
Review, update, communicate clear quality
service standards that match with local
needs as well as available resources. 
Completion and implementation of the
Roads and Infrastructure Services (RIS)
Review, particularly creation of robust,
reliable data to inform decisions. 
Progress and implement RIS Review.
Play our part in calling for a fair deal for
councils – including asks for greater
flexibilities at local level which helps better
serve community needs. 
Part of work of political lobbying group.
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50
SPEAKING UP FOR ARGYLL AND BUTE, ITS PEOPLE AND ITS COMMUNITIES
Why this is a priority:
Collective, as well as collaborative, action is necessary to deliver growth on the
scale that Argyll and Bute needs
No single agency alone can deliver on Argyll and Bute’s overarching aim of significant,
vital population and economic growth.
We will work in partnership with communities, with all sectors, and at all levels as far as
possible to progress Argyll and Bute’s priorities.
This will include using our voice as the local authority to call for action where
responsibility lies outwith our control or influence.
We will:
Priority Next Steps/Action
Call for policy, investment, flexibility, action
- wherever there is a key issue impacting
on Argyll and Bute’s chances of growth
and success and where responsibility sits
outwith the control of the Council.
Establish political lobbying group, agree
membership, themes, areas for focus as set
out throughout the Priorities.
Add our voice as the local authority to those
of our communities when they are speaking
out on issues that are important to them and
where external action is needed.
Identify needs and opportunities through
engagement programme and planned
online/digital democracy activities.
Lobby for more investment in digital
connectivity to boost Argyll and Bute’s status
as an attractive place to live.
Lobby for digital connectivity improvements
to fill the gap in terms of other
opportunities which are available and
funded elsewhere in Scotland, but which
are not practical here due to geography
(e.g. active travel).
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ARGYLL AND BUTE COUNCIL  POLICY AND RESOURCES COMMITTEE                                                         
DEVELOPMENT AND ECONOMIC GROWTH                9 OCTOBER 2025 
EMPTY BUSINESS PROPERTY – UPDATE ON BUSINESS GRANT SCHEME 
1.0 EXECUTIVE SUMMARY 
1.1 The purpose of this paper is to update the Policy and Resources Committee on
the implementation of the Empty Business Property Grant Scheme. 
1.2 On 19 June 2025, the Environmental, Development and Infrastructure
Committee approved the approach and governance of the business grant
scheme for up to £786,000 in the financial year 2025/26. 
1.3 To date, twelve grant offers have been made for a cumulative value of
£203,429.19. The council’s Empty Business Property Officer is currently
engaged with a further eighteen applications and a pipeline of enquiries. 
1.4 Grant applications are accepted on a rolling basis; however, it is projected that
live applications could contain grant requests for around £355,000, with
ongoing enquires likely to advance this figure further. 
1.5 To help provide a baseline and ongoing monitoring, a new dashboard has
been added to Area Scorecards to report on Empty Business Property rates.
This will help explore the impact of policy changes, the grant scheme and
other factors. 
1.6 It is recommended that the Policy and Resources Committee:- 
i. Notes the early progress of the business grant scheme.
ii. Notes the implementation of a new data dashboard incorporated into
Area Scorecards. This will ensure quarterly updates are provided on
empty property rates by administration area.
iii. Agrees that future updates on the Empty Business Property Grant
scheme will be reported as part of the 6 monthly Transformational
Projects and Regeneration Team reports to the Environment,
Development and Infrastructure Committee.  
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iv. Notes that the Empty Business Grant Scheme will continue to be
administered in line with the approved governance procedures.  
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ARGYLL AND BUTE COUNCIL  POLICY AND RESOURCES COMMITTEE                                                         
DEVELOPMENT AND ECONOMIC GROWTH                9 OCTOBER 2025 
EMPTY BUSINESS PROPERTY – UPDATE ON BUSINESS GRANT SCHEME 
2.0 INTRODUCTION 
2.1 The purpose of this paper is to update the Policy and Resources Committee
on the early progress of the Empty Property Business Grant Scheme. 
2.2 This paper seeks to outline how the grant scheme is helping to incentivise and
support owners and tenants of empty business properties to return them to
productive use. 
2.3 The following table, provides a summary of the current empty property rate per
administration area, the number of grant approvals and a summary of live
applications that are at different stages in the development or assessment
process. 
Table 1: Empty Business Property Grant Scheme Sumamry
Area Empty
Property
Rate
No. of
Completed Grant
Approvals
Grant Value No. of Live
Applications
Projected Grant
Value
B&C 4.8% 5 £92,068.10 7 £163,000.00
H&L 2.5% 2 £28,150.00 1 £10,000.00
MAKI 4.1% 5 £83,211.09 7 £125,000.00
OLI 2.2% 0 £0 3 £57,000.00
A&B 3.4% 12 £203,429.19 18 £355,000 
2.4 In addition to the live applications detailed in Table 1, the Empty Business
Property Officer is supporting a number of owners and tenants across Argyll and
Bute to address barriers and develop projects to a stage where they are ready
to be considered for grant funding applications. 
2.5  It is considered that there will be considerable on-going demand via the Empty
Business Property Grant Scheme to support property owners and tenants
repurpose, refurbish and invest in vacant commercial properties which will in
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turn support wider place based regeneration and economic growth initiatives
being delivered by the Council and key partners.  
2.6  To help baseline, monitor progress and measure the impact of the policy
changes and grant scheme, a new data dashboard for Empty Business
Properties has been added to the quarterly Area Scorecards. This will support
the council to advance data-driven decision-making, and help to establish a
suite of place based analytics that will support future investment priorities.   
3.0 RECOMMENDATIONS 
It is recommended that the Policy and Resources Committee:- 
i. Notes the early progress of the business grant scheme.
ii. Notes the implementation of a new data dashboard incorporated into
Area Scorecards. This will ensure quarterly updates are provided on
empty property rates by administration area.
iii. Agrees that future updates on the Empty Business Property Grant
scheme will be reported as part of the 6 monthly Transformational
Projects and Regeneration Team reports to the Environment,
Development and Infrastructure Committee.  
iv. Notes that the Empty Business Grant Scheme will continue to be
administered in line with the approved governance procedures. 
4.0 DETAIL
4.1 Empty Property Relief was devolved to Scottish Local Authorities on 1 April
2023. At their meeting of 23 November 2023, Council subsequently agreed
that from 1 April 2024, 50% Non-Domestic Rates (NDR) relief could be
granted to business properties which are empty for a maximum of three
months. In cases where business properties remain empty beyond three
months, 10% relief can be awarded for up to an additional nine-month period.
Following this, should a business property remain empty beyond a twelve-
month period, no further NDR relief would be awarded, and 100% Non-
Domestic Rates would begin to be charged. 
4.2 On 23 November 2023, Council also agreed that the remaining Empty
Property Relief funding from Scottish Government be used towards an Empty
Property Business Grant Scheme (BGS), the aim of which would be to
incentivise owners to return properties to productive use. 
4.3 On 8 May 2025, the council’s Policy and Resources Committee approved
Extended Empty Property Relief, whereby non-domestic rates relief will be
extended for property owners who are actively working to bring their
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properties back into use. Owners may apply for 100% relief for up to 12
months at any time after the property becomes vacant, provided the
conditions are met. 
4.4 On 19 June 2025, the Environment, Development and Infrastructure
Committee approved the parameters and governance for the business grant
scheme and extended empty property relief.  It is anticipated that the
Business Grant Scheme could have a budget of up to £786,000 in the
financial year 2025/26. 
4.5 An Empty Business Property Officer has been appointed to support and
facilitate the distribution of funding for Extended Empty Property Relief and
Business Grant Scheme. 
4.6 The Business Grant Scheme operates region-wide and is promoted via
council websites, the local Business Gateway service and other Council
teams and partners. 
4.7  The grant scheme is open to business start-ups, established SME’s,
Development Trusts, social enterprises and charities. The scheme is also
open to potential inward investors from out with Argyll and Bute, who are
looking to establish a business in the region. 
4.8 Applications will be considered on a rolling basis until funding is allocated in
full. This means that whilst the fund is open there is no deadline for
applications, but successful projects must be completed and claimed before
31 March 2026.  
4.9 To date, twelve grant offers have been made for a cumulative value of
£203,429.19. The council’s Empty Business Property Officer is currently
engaged with a further eighteen applications and a pipeline of enquiries. It is
projected that live applications could contain grant requests totaling circa
£355,000, with ongoing enquires likely to advance this figure further. 
4.10  To help baseline, monitor progress and measure the impact of the grant
scheme and policy, a new data dashboard for Empty Business Properties has
been added to the quarterly Area Scorecards. This will support the council to
advance data driven decision-making and help establish a suite of place-
based analytics that can provide actionable insights for officers, stakeholders
and potential investors. 
5.0 CONCLUSION
5.1 The early stages of the Empty Business Property Grant Scheme has
immediately supported a number of projects and provided confirmation that
this funding supported by the development of data driven decision-making will
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help unlock investment and contribute positively towards interventions that
support the regeneration of our town centers. 
5.2 The Empty Business Property Grant Scheme will continue to support the
owners and prospective tenants of empty business properties to return these
to productive use with a view to enhancing the look, feel and vitality of our
places, helping to grow the local economy, create new job opportunities, and
attract inward investment. 
6.0 IMPLICATIONS
6.1 Policy – Empty Business Property Grant will support Argyll and Bute Council’s
Growth Areas, Areas for Action, Regeneration Areas and Fragile Economic
Areas, by prioritising applications for activity in these areas, and will be
cognisant of a range of LDP2 policies. The Scheme seeks to take a place-
based approach and to adopt a Town Centre First approach.
6.2 Financial – Funding of the grant scheme has previously been approved from
the grant allocation from Scottish Government. 
6.3  Legal – The new empty property policy will be prescribed under section 140 of
the Community Empowerment Act 2015 and each grant funded project will
have differing legal and procurement requirements depending on the
associated works undertaken and grant contract conditions. We will
continually monitor each application and ensure compliant delivery of funded
projects.
6.4  HR – None.
6.5 Customer service – None.
6.6  Risk – There are risks of damage to the economy and the attractiveness and
viability of town centres and other businesses if the number of empty
properties increases without intervention. 
6.7  Climate change – Addressing empty/vacant/derelict properties will help make
best use of existing stock and can support the delivery of energy efficiency
measures that contribute towards achieving climate change targets.
6.8  Fairer Scotland Duty – All applicants for grants will be tested for complying
with Fair Work First policy to actively consider how they can reduce
inequalities of outcome caused by socio-economic disadvantage.
6.9  Equalities: protected characteristics – None.
6.10  Consumer duty – The grant scheme aims to help bring empty properties back
into productive use and create new economic and employment opportunities.
6.11  Island communities – Whilst no specific allocation is made, grant funding will
be used to support the delivery of projects on islands.
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6.12 Children’s Rights and Wellbeing – None.    
Kirsty Flanagan: Executive Director with responsibility for Development and
Economic Growth 
Councillor Jim Lynch, Policy Lead for Economic Development, Islands, Rural
Communities and Housing 
13th August 2025                                                  
For further information contact:
Fergus Murray, Head of Development and Economic Growth 
fergus.murray@argyll-bute.gov.uk 
Daniel MacIntyre – Empty Business Property Officer  
daniel.macintyre@argyll-bute.gov.uk 
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ARGYLL AND BUTE COUNCIL  POLICY AND RESOURCES COMMITTEE
DEVELOPMENT AND ECONOMIC 
GROWTH    9th OCTOBER 2025  
LORN ARC TAX INCREMENTAL FINANCE (TIF) UPDATE 
1.0 EXECUTIVE SUMMARY 
1.1 This report provides an update on the Lorn Arc Programme and the current live
Lorn Arc projects at Dunbeg and Oban Airport Business Park. 
1.2 The report outlines the agreed changes to the Lorn Arc Tax Incremental Finance
(TIF) agreement which will extend its potential operation by ten years and
significantly reduce risk associated with the projects. The Lorn Arc TIF initiative is
currently holding a positive balance of £2.4m that is ring fenced for this project. 
1.3 LINK RSL has submitted four planning applications for Phase 4 development at
the Dunbeg Corridor, which has already delivered 375 affordable homes and
significant infrastructure upgrades.  Phase 4 will include circa 430 residential units
including social rent, mid-market rent, student housing, shared equity, private sale
and plots. In addition, a new trunk road roundabout will be constructed on the A85,
a new residential link road, and a commercial area which may include an hotel,
drive through restaurants, and small supermarket.  The Council is currently
processing these applications in tandem. 
1.4 Substantial progress is being made at Oban Airport Business Park and a detailed
report on this project will be presented to Council in November. It is estimated by
council officers that the majority of the Oban Airport Business Park works will be
completed in 2026. 
1.5 RECOMMENDATION 
1.6 It is recommended that Council consider the content of the report and note: 
• The significant ten-year extension to the TIF project; and
• The substantive progress that is being made both at Dunbeg Corridor
and Oban Airport Business Park. 
Page 181 Agenda Item 8

Page 182

ARGYLL AND BUTE COUNCIL  POLICY AND RESOURCES COMMITTEE
DEVELOPMENT AND ECONOMIC     9th OCTOBER 2025
GROWTH   
LORN ARC TAX INCREMENTAL FINANCE (TIF) UPDATE 
2.0 INTRODUCTION 
2.1 This report provides an update on the Lorn Arc (TIF) Programme and the
current live Lorn Arc projects at Dunbeg Corridor and Oban Airport Business
Park.  
3.0 RECOMMENDATIONS 
3.1 It is recommended that Council consider the content of the report and note: 
• The significant ten-year extension to the TIF project; and
• The substantive progress that is being made both at Dunbeg Corridor
and Oban Airport Business Park.   
4.0 DETAIL 
Lorn Arc TIF Programme 
4.1  In January 2025, following extensive negotiations facilitated by the Scottish
Futures Trust and council officers, the Scottish Government  agreed a formal
amendment to the TIF agreement.  The effect of this was to lengthen the
agreement period from the current end stop of 2040, to 2050.  This is a significant
extension as It gives a further ten years for the Council to continue retaining the
additional NDR revenue that has been created since the creation of the TIF
scheme.  The effect of this is to reduce significantly the risk involved in repaying
the investment, and to potentially allow a greater investment to be made in
infrastructure at both the Dunbeg Corridor and Oban Airport Business Park. 
4.2  The following table provides the general financial highlights for the TIF programme
and the projects at Dunbeg Corridor and Oban Airport.  It shows that the TIF
scheme is currently retaining a £2.4m surplus, although this is fully committed in
future years for works identified in this report. 
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Finance Highlights Total 
Current TIF Reserve (opening balance for 2025/26) £2.402m
TIF revenue (NDR retained) 2024-25 £0.815m
TIF spend – 2025-to date £0.280m 
Dunbeg Corridor
4.3 LINK Housing Association has submitted four planning applications within the
Dunbeg Corridor. These are for: -
• the commercial area development which includes an hotel, drive
through restaurants and small supermarket
• phase 4 of the housing development (circa 430 houses) including
social rent, mid-market rent, student housing, shared equity, private
sale and plots.
• A new Trunk Road roundabout.
• The associated road network leading to the commercial area and
housing site. 
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4.4 These planning applications are currently being considered by the Council and
responses from statutory consultees being awaited.  It is anticipated these
planning applications will be determined by 2025/6 FQ4.
4.5 In parallel with the assessment of these planning applications, preliminary
negotiations are taking place between LINK Housing Association, the Council and
Scottish Government More Homes Division, with the aim of formulating a
development agreement to take forward the construction programme. This work
is ongoing.
4.6 When the planning applications are determined, it will enable infrastructure and
design work to be commissioned to provide more detailed development costs to
be established. At that stage, a Full Business Case will be prepared for approval
of the P&R Committee.  It is anticipated that this will take place towards the end
of 2026.
4.6 The Dunbeg Corridor Working Group continues to meet and prove a valuable
forum for discussion between the Council, public agencies, and the public on
issues arising with this development. The next meeting of this group is arranged
for the 14th November 2025. 
Oban Business Park
4.7 A detailed report on the Oban Airport Business Park project will be presented
separately to Council in November.  In general, the project is progressing well with
initial site works now completed, planning consent have also been granted for the
two initial buildings to be developed, the design team and main contractor
appointed and the programme estimating commencement of the main contract 
prior to the end of 2025 with the majority of the works completed in 2026.
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5.0  CONCLUSION
5.1 The Lorn Arc (TIF) Initiative has had a long history of delivery.  This innovative
financial mechanism enables the council to retain additional NDR income to
facilitate further infrastructure works that enable new developments to take place.
Good progress continues to be made with the Lorn Arc TIF programme.  The
Scottish Government after extensive negotiations has agreed a significant
extension to the scheme and both live projects; Dunbeg Corridor and Oban
Business Park are progressing well with a reduced risk of delivery due to the
longer payback period having been agreed.  This funding with consequently assist
the delivery, subject to the regulatory process, of a further 430 new homes, a new
commercial area at Dunbeg, significant road improvements together with a built-
out business park at Oban Airport.   
6.0 IMPLICATIONS 
6.1 Policy - None
6.2 Financial - none directly arising from this report.  Business Case for the
investments confirm the financial positions and are presented to P&R at
appropriate stages for approval. 
6.3  Legal – None directly from this report.
6.4  HR – None.
6.5 Customer Service – None.  
6.6 Risk – The wider risk for the projects is unforeseen increases in development
costs, and the availability of the NDR to repay debt.  Both these can be
mitigated by careful project management.
6.7 Climate Change – The services proposed to be developed at Oban Airport are
mainly lifeline services rather than recreational or tourism related. Oban
provides a central location for search & rescue functions which could reduce
the flying time of operational activity. New housing in Dunbeg will be built to
the most recent environmental standards and is centrally located in Lorn thus
minimising travel demand. 
6.8  Fairer Scotland Duty – Socio-economic Duty – the delivery of business and
commercial opportunities and housing across Argyll and Bute facilitates socio-
economic opportunities for all.
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6.9 Equalities - protected characteristics - the activity outlined in the report is
consistent with the aims and objectives set out in LDP2 and the Local
Housing Strategy which were subject to EQIA. 
6.10 Consumer Duty – none.
6.11 Island Communities – none.
6.12 Children’s Rights and Wellbeing – the delivery of more housing will enable
more children to have a safe secure environment. 
Kirsty Flanagan
Executive Director with responsibility for Development and Economic Growth
Councillor Jim Lynch, Council Leader and Policy Lead for Economic
Development, Islands and Rural Communities and Housing
August 2025                                                  
For further information contact: 
Fergus Murray – Head of Development and Economic Growth
fergus.murray@argyll.bute.gov.uk 
Matt Mulderrig –   Development Policy and Housing Manager 
matt.mulderrig@argyll-bute.gov.uk 
Adrian Jackson-Stark Oban Lorn Arc Project Manager                       
Adrian.jackson-stark@argyll-bute.gov.uk
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Policy and Resources Committee Work Plan 2025-2026 
This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. 
Date 7. Report Title Dept/Section How Often? Date Due Comments 
Date Report Title Dept/Section How Often? Date Due Comments 
9 October 2025 Financial Monitoring Overview  Financial Services Every meeting
except May
9 September 2025 
Budget Outlook 2026-27 to 2030-31 Financial Services  9 September 2025 
Funding External Bodies and
Following the Public Pound – Code
of Practice
Financial Services  9 September 2025 
Empty Business Property – Update
on Business Grant Scheme
Development and
Economic Growth 
9 September 2025 
Lorn Arc Tax Incremental Finance
(TIF) Update
Development and
Economic Growth 
9 September 2025 
UK Shared Prosperity Fund Update Development and
Economic Growth 
9 September 2025 
Date Report Title Dept/Section How Often? Date Due Comments 
4 December
2025
Financial Monitoring Overview  Financial Services Every meeting
except May
4 November 2025 
Budget Outlook Financial Services 
Social Media Policy Customer Support
Services   
Evaluation of the Argyll and Bute Gift
Card Scheme
Development and
Economic Growth   
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Agenda Item
10

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Policy and Resources Committee Work Plan 2025-2026 
This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. 
Live Argyll - Scope Of Services   Commercial
Services   
Date Report Title Dept/Section How Often? Date Due Comments 
19 February
2026
Financial Monitoring Overview  Financial Services Every meeting
except May
20 January 2026 
Budget 2026-2027 Financial Services 
8. Treasury Management Strategy and
Annual Investment Strategy 
Financial Services 
Procurement Strategy and
Sustainable Procurement Policy
9. 
Annual  
Date 10. Report Title Dept/Section How Often? Date Due Comments 
21 May 2026 11. Budget Outlook
12. 
Financial Services  7 April 2026 
13. UK Shared Prosperity Fund Update Development and
Economic Growth   
Date 14. Report Title Dept/Section How Often? Date Due Comments 
August 2026 Financial Monitoring Overview
15. 
Financial Services   
Community Empowerment –
Expressions of Interest / Asset
Transfer Requests 
Commercial
Services   
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Policy and Resources Committee Work Plan 2025-2026 
This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. 
Future Items – Date to be determined. 
Key Performance Indicators FQ2 –
2022/2023 – changing to Corporate
Outcome Indicators
Customer Support
Services
Annual   
Historic Environment Scotland
Heritage and Place Programme –
Opportunity for Place Based
Heritage Funding
Development and
Economic Growth   
Rothesay Pavilion - Rural Growth
Deal 
Development and
Economic Growth 
Update to be provided following
approval of the Rural Growth
Deal Full Business Case by the
UK and Scottish Government. Page 189

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