Agenda reports pack
Argyll and Bute Council · 20 February 2025
Back to Policy and Resources Committee — 20 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Argyll and Bute Council Comhairle Earra-Ghàidheal Agus Bhòid Executive Director: Douglas Hendry Kilmory, Lochgilphead, PA31 8RT Tel: 01546 602127 Fax: 01546 604435 DX 599700 LOCHGILPHEAD 13 February 2025 NOTICE OF MEETING A meeting of the POLICY AND RESOURCES COMMITTEE will be held ON A HYBRID BASIS IN THE COUNCIL CHAMBER, KILMORY, LOCHGILPHEAD AND BY MICROSOFT TEAMS on THURSDAY, 20 FEBRUARY 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 5 - 10) Policy and Resources Committee held on 5 December 2024 * 4. FINANCIAL REPORTS MONITORING PACK - 31 DECEMBER 2024 (Pages 11 - 124) Report by Section 95 Officer * 5. BUDGETING PACK 2025-26 Reports by Section 95 Officer Please note that the Budget Pack 2025-2026 relative to the consideration of the foregoing matters has been published separately under a meeting entitled “Budget Pack”. The budget pack will stand alone and will be published here separately from the Policy and Resources Committee and Council agendas. This will enable the same pack to be accessed at all meetings. Please ensure that you have downloaded this to your iPad before coming to the meeting. For assistance with accessing the Budget Pack from your iPad please contact committee.support@argyll-bute.gov.uk. Public Document Pack
Page 2
* 6. TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY 2025-26 (Pages 125 - 168) Report by Section 95 Officer 7. ARGYLL AND BUTE UK SHARED PROSPERITY FUND INVESTMENT PLAN, TRANSITION YEAR 2025/26 (Pages 169 - 176) Report by Executive Director with responsibility for Development and Economic Growth 8. FUTURE OF THE ARGYLL AND BUTE FLEXIBLE FOOD AND FUEL FUND (Pages 177 - 182) Report by Executive Director with responsibility for Financial Services 9. SUPPORTING COMMUNITIES FUND 2025-26 (Pages 183 - 188) Report by Chief Executive * 10. SUSTAINABLE PROCUREMENT STRATEGY 2025/2028 - DRAFT DOCUMENT AND CONSULTATION (Pages 189 - 304) Report by Executive Director with responsibility for Legal and Regulatory Support 11. EQUALITY OUTCOMES 2025-2029 (Pages 305 - 320) Report by Executive Director with responsibility for Customer Support Services 12. CONSERVATION AREA REGENERATION SCHEME (CARS) PROJECT 15-19 ARGYLL STREET, LOCHGILPHEAD (Pages 321 - 326) Report by Executive Director with responsibility for Development and Economic Growth 13. COMMUNITY REGENERATION PARTNERSHIP FUNDING (Pages 327 - 336) Report by Executive Director with responsibility for Development and Economic Growth 14. CROWN ESTATES FUNDING ALLOCATION 2025/26 (Pages 337 - 344) Report by Executive Director with responsibility for Development and Economic Growth * 15. STRATEGIC EVENTS AND FESTIVALS FUND - ROUND 7 2025-26 (Pages 345 - 352) Report by Executive Director with responsibility for Development and Economic Growth 16. ROYAL NATIONAL MOD 2028 (Pages 353 - 384) Report by Executive Director with responsibility for Development and Economic Growth REPORT FOR NOTING 17. POLICY AND RESOURCES COMMITTEE WORK PLAN (Pages 385 - 388) Items marked with an “asterisk” are items, on the basis of information available at the time this Agenda is published, on which the Committee may not have delegated powers to act, and which may therefore require to be referred to the Council or another Committee, and that referral may depend on the decision reached at the meeting.
Page 3
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: Katie McKenzie, Committee Services Officer Tel: 01546 604465
Page 4
This page is intentionally left blank
Page 5
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, 5 DECEMBER 2024 Present: Councillor Audrey Forrest (Chair) Councillor John Armour Councillor Gordon Blair Councillor Math Campbell-Sturgess Councillor Kieron Green Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Dougie McFadzean Councillor Yvonne McNeilly Councillor Ross Moreland Councillor Gary Mulvaney Also Present: Councillor Maurice Corry Councillor Tommy MacPherson Attending: Kirsty Flanagan, Executive Director Douglas Hendry, Executive Director Carolyn Earl, Interim Head of Financial Services Jane Fowler, Head of Customer and Support Services Jim Smith, Head of Roads and Infrastructure Services Fergus Murray, Head of Development and Economic Growth Shona Barton, Governance Manager Suzanne Mason, Engagement and Communities Lead 1. APOLOGIES FOR ABSENCE Apologies for absence were received from Councillors Amanda Hampsey, Jim Lynch, Liz McCabe and Dougie Philand. 2. DECLARATIONS OF INTEREST There were no declarations of interest intimated. 3. MINUTES The Minutes of the meeting of the Policy and Resources Committee held on 10 October 2024 were approved as a correct record. * 4. FINANCIAL REPORTS MONITORING PACK - 31 OCTOBER 2024 The Committee gave consideration to a report providing a summary of the financial monitoring reports as at the end of October 2024. Decision The Policy and Resources Committee agreed to – 1. note the revenue budget monitoring report as at 31 October 2024; 2. note the financial risks for 2024-25; Page 5 Agenda Item 3
Page 6
3. note the capital plan monitoring report as at 31 October 2024 and approve the proposed changes to the capital plan outlined in Appendix 4 of that report; 4. note the reserves and balances report as at 31 October 2024; and 5. recommend to Council that the revenue virements over £0.200m during September and October 2024 are approved. (Reference: Report by Section 95 Officer dated 12 November 2024, submitted) 5. BUDGET OUTLOOK 2025-26 TO 2029-30 The Committee considered a report providing an update to the budget outlook covering the period 2025-26 to 2029-30. Decision The Policy and Resources Committee noted – 1. the current estimated budget outlook position for the period 2025-26 to 2029-30; and 2. that the budget outlook now included new management/operational and policy options presented by officers for consideration as part of the budget in February 2025; and further noted that detailed templates would be provided to Council. (Reference: Report by Section 95 Officer dated 12 November 2024, submitted) 6. SUPPORTING COMMUNITIES FUND - REVIEW AND OUTLINE PROPOSALS The Committee considered a report setting out recommendations from an internal review of the Council’s annual Supporting Communities Fund (SCF) to support improvements for communities applying in 2025/26. Decision The Policy and Resources Committee – 1. noted the findings from the internal review and that further feedback was being gathered from community groups on their experiences to help improvements; 2. agreed the proposed next steps and timeframe for the 2025/26 round of Supporting Communities Fund (SCF); 3. agreed that a detailed paper would come to February 2025 Policy and Resources Committee to consider and agree an improved approach to SCF for 2025/26; and 4. approved that, within 2025/26, officers explore the scope of grants available to community groups in Argyll and Bute through the Council, CPP partners and other funding bodies and consider possibilities for collaboration and realignment. Further to this, to consider the potential format of local decision making for grants available through the council and/ or collaborations. (Reference: Report by Chief Executive dated 4 November 2024, submitted) Page 6
Page 7
7. ENGAGING COMMUNITIES FRAMEWORK - DRAFT The Committee considered a report presenting the Draft Engaging Communities Framework for approval. Decision The Policy and Resources Committee – 1. approved the content of the Engagement Framework; and 2. noted that the Framework would be produced in a user-friendly format, reviewed annually to support learning and development of best practice, and promotion of the Framework and training on its content for staff and elected members is in development. (Reference: Report by Chief Executive dated 5 November 2024, submitted) * 8. VOLUNTEER POLICY AND VOLUNTEER PROCEDURE The Committee gave consideration to a report introducing a new Council wide Volunteer Policy and Procedure. Decision The Policy and Resources Committee agreed – 1. the Volunteer Policy; 2. that PVG costs for volunteers would be covered by existing service budgets; and 3. to forward the Policy to Council for final approval. (Reference: Report by Executive Director with responsibility for Customer Support Services dated 30 October 2024, submitted) 9. OCTOBER 2023 WEATHER EVENT - NOVEMBER 2024 UPDATE The Committee considered a report following up on the report presented to the Policy and Resources Committee on 15 August 2024 in respect of the October 2023 weather event. Decision The Policy and Resources Committee – 1. noted the update on the current position of the projects; and 2. agreed that further updates on the October 2023 Weather Event would be made to the Environment, Development and Infrastructure Committee rather than to the Policy and Resources Committee. (Reference: Report by Executive Director with responsibility for Roads and Infrastructure Services dated 26 November 2024, submitted) Page 7
Page 8
10. RURAL GROWTH DEAL - PROJECT DEVELOPMENT COSTS The Committee considered a report providing an update on the Rural Growth Deal (RGD) and specifically costs associated with the Business Case and Project Development. Decision The Policy and Resources Committee – 1. noted that the total estimated essential development costs to inform Treasury Five compliant Full Business Cases for all projects amounted to £3.183m and these costs required to be incurred in advance of Central Government endorsement at risk to the Council and lead delivery partners; 2. agreed that the Council sets aside a fund from the Priorities Investment Fund to the value of £0.700m that can pay for the development costs for Council projects on the basis that all will be paid back by the end of Year 10; 3. agreed that any cash flow funding requests for projects led by external partners would be brought to the Policy and Resources Committee for approval as and when a request for funding was made and considered on a case by case basis; and 4. delegated to the Internal Programme Board (Chief Executive and Executive Directors) to approve pre-development funding requests relating to Council led projects up to a threshold of £250k per project from the new Fund. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated 20 November 2024, submitted) 11. CROWN ESTATE FUNDING The Committee gave consideration to a report requesting agreement on additional funding being allocated to Campbeltown War Memorial and permission for Argyll Countryside Trust (ACT) to sell their Eco-Hub which had been part funded through Crown Estates Funding. Decision The Policy and Resources Committee agreed to – 1. allocate additional funding of up to £11,000 to complete the upgrade works at Campbeltown War Memorial from Crown Estate contingency funding; and 2. grant permission to ACT to sell their Eco-Hub, which was part funded through Crown Estates funding in 2021; and agree in principal that the returned proceeds in addition to the remaining 5% retention (anticipated to be £28.5k) are reinvested in the new Kilmory site. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated 26 November 2024, submitted) Page 8
Page 9
12. CLIMATE CHANGE BOARD UPDATE & DECARBONISATION TRACKER The Committee gave consideration to a report providing an overview of key highlights from the Decarbonisation Plan Tracker, offering a strategic snapshot of recent progress. Decision The Policy and Resources Committee noted the updates contained at Section 5 of the submitted report and the full Decarbonisation Tracker update contained at Appendix A to the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services dated 7 November 2024, submitted) The Chair ruled and the Committee agreed to take item 14 of the agenda (Policy and Resources Committee Workplan) at this point, before the exclusion of the press and public for item 13 of the agenda (Oban Airport Business Park), to facilitate smooth running of the agenda. 13. 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 as at 5 December 2024. (Reference: Policy and Resources Committee Workplan dated 5 December 2024, 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. * 14. OBAN AIRPORT BUSINESS PARK The Committee gave consideration to a report providing an update on progress of the Oban Airport Business Park project and how it fitted within the wider Lorn Arc Tax Incremental Finance (TIF) Programme. Decision The Policy and Resources Committee agreed the recommendations as contained within the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services and Executive Director with responsibility for Development and Economic Growth dated 28 November 2024, submitted) Page 9
Page 10
This page is intentionally left blank
Page 11
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 FINANCIAL REPORTS MONITORING PACK – 31 DECEMBER 2024 1. INTRODUCTION 1.1 This report provides an Executive Summary of the overall financial position of the council for 2024-25 as at 31 December 2024. It summarises the detailed financial monitoring reports in respect of the following: • Revenue Budget; • Financial Risks; • Capital Plan; and • Reserves and Balances. 2. DETAIL 2.1 Revenue Budget Monitoring Report 2.1.1 This report provides a summary of the actual and forecast outturn expenditure and income of the council in comparison to the approved 2024-25 revenue budget. 2.1.2 As at 31 December 2024, there is a forecast overspend of £4.215m on the approved budget for the year. The variances from budget comprise the following: • Within Social Work, a forecast overspend of £2.179m, relating to demand for residential placements within Children and Families and Older Peoples Services. • Within Roads and Infrastructure Services, a forecast overspend of £1.610m, mainly due to increased bus contract renewal costs for Public and Pupil Transport across Argyll and Bute, additional costs relating to repairs to the Belnahua Ferry, the Transport of ASN pupils, Temporary Accommodation and two unrealised savings for additional income from Traffic Regulation Orders (TB13b) and Stadiums (TB12b); partially offset by additional income in Waste, a reduction in Landfill Tax costs due to reduced tonnage levels in Helensburgh Waste Disposal and vacancy savings across the department. • Within Education, a forecast overspend of £0.241m due to higher than budgeted demand for Schools Residential placements, partially offset by lower than anticipated spend on catering purchases, receipt of historic water refunds, slippage in Education 100 Day Promise spend due to delays in recruitment, lower than anticipated uptake of Universal Free School Meals and a lower spend on condition surveys due to favourable market conditions and good procurement practice. • Within Central Budgets, a forecast overspend of £0.513m overall, relating to the pay award and higher than budgeted inflation on insurance, partially offset by lower than anticipated contributions to Joint Boards. There is a forecast Page 11 Agenda Item 4
Page 12
overspend of £0.252m for 2024-25 pay awards, as the Scottish Government requires councils to fund 3.2%, while the budget only has 3% built in. This is recognised within Other Operating Income and Expenditure for current monitoring purposes. Implications of the pay award will be reflected across departments in future monitoring reports. • Within Funding, an over-recovery of Council Tax income on second homes of £0.328m. 2.1.3 2.1.4 It is anticipated that savings in interest costs will be achieved during the year, as a result of slippage in the capital programme; and the deferral of new long-term borrowing, due to the favourable cash position. This will provide capacity to either repay debt or contribute one-off additional resources towards meeting the forecast 2025/26 budget gap, through a contribution to General Fund reserves in 2024/25. As such, no variance has been assumed in the 2024/25 forecast outturn position. There is an overspend of £20.363m on the profiled budget to date. The year to date variances mainly relate to the actual timing of income and expenditure and recharging of costs to capital, in comparison to assumed budget profiles. The main focus of budget monitoring is the forecast outturn position. 2.1.5 Policy budget savings options, relating to 2024-25, total £6.467m. The table below outlines progress on the delivery of these savings as at 31 December 2024. Category No. of Options 2024- 25 £000 2024-25 FTE 2025-26 £000 2025- 26 FTE Future Years £000 Future Years FTE Delivered 7 5,556.0 10.9 5,723.0 10.9 5,723.0 10.9 On Track to be Delivered 6 790.0 4.0 671.0 4.0 671.0 4.0 Still to be Implemented 1 0.5 0.0 0.5 0.0 0.5 0.0 Being Developed 0 0.0 0.0 0.0 0.0 0.0 0.0 Will not be achieved 2 120.0 0.0 170.0 0.0 170.0 0.0 Potential Shortfall 0 0.0 0.0 0.0 0.0 0.0 0.0 Delayed 0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL 16 6,466.5 14.9 6,564.5 14.9 6,564.5 14.9 2.1.6 Two savings, totalling £120k are categorised as ‘Will not be achieved’ and a cost pressure will be considered as part of the 2025-26 budget process in this respect. 2.1.7 Health and Social Care Partnership (HSCP) – Financial Update The 2024-25 HSCP forecast outturn position as at 31 December 2024 is an overspend of £2.775m (£2.179m Social Work, £0.596m Health). The Chief Financial Officer of the IJB has now written to the Council to request access to the Strathclyde Pension Fund Gain that is held in reserves for the HSCP and, therefore, it is expected that Social Work will outturn within budget, after applying these reserves. Page 12
Page 13
2.2 Financial Risks 2.2.1 This report outlines the process and approach to financial risk assessment and provides an update on the current known financial risks facing the council in 2024- 25. 2.2.2 There are 4 council wide revenue risks identified for 2024-25, with a potential annual value totalling £2.583m, and with varying degrees of likelihood. 2.2.3 There are currently 42 departmental risks, with a potential annual value totalling £6.693m, of which 5 are categorised as ‘Likely’. These will continue to be monitored and reviewed on an ongoing basis, with action taken to mitigate or manage these risks. 2.2.4 The current top three risks in terms of the financial impact are noted in the table below. SERVICE RISK TITLE DESCRIPTION LIKELI- HOOD FINANCIAL IMPACT £000 Roads and Infrastructure Services Roads Maintenance - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence. 3 1,500 Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. 3 586 Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. This is in relation to historical debt that has accumulated over many years therefore any adverse collection rates will impact on the year end debt provision as opposed to the in-year financial position, hence no forecast variance has been reported within the current year. 3 345 2.2.5 The number of council wide risks has reduced from 7 to 4 since the previous reporting period, due to confirmation of the 2024-25 pay awards, and progress on the delivery of approved 2024-25 revenue budget savings options. There have been no changes to the departmental risks since last reporting. Page 13
Page 14
2.3 Capital Plan Monitoring Report 2.3.1 This report provides an update on financial performance and the delivery of capital projects against the approved capital plan budget resources and timescales as at 31 December 2024. 2.3.2 Forecast net expenditure for the full financial year is £28.774m, compared to a profiled annual budget of £37.056m, giving rise to a forecast underspend for the year of £8.282m (22.35%). Actual net expenditure of £23.679m has been incurred in the year to date, representing 82% of the net expenditure forecast for the year. 2.3.3 The forecast outturn net expenditure on the total Capital Plan is £203.116m, compared to a budget of £202.999m, giving rise to a forecast overspend for the overall capital plan of £0.117m (0.06%). 2.3.4 There are a total of 153 projects within the overall Capital Plan. Of this total, 139 or 91% are Complete or On Target, 8 or 5% are Off Target and Recoverable and 6 or 4% are Off Track and experiencing Problems. 2.3.5 There are a number of risks, which may impact the delivery of the plan within available resources and target timescales. The capital programme continues to see significant price increases, as well as disruptions to the supply chain and longer lead in times, which makes it challenging to manage delivery of projects within available resources and target timescales. In recent years, additional funding of £11.100m has been made available to manage these cost pressures. Whilst this has helped mitigate the impact to date, these additional resources have now been fully allocated. There remains a financial risk in respect of projects, where contracts have yet to be entered into. Therefore, it should be noted that there are likely to be other significant financial impacts, which are not quantifiable, at this stage. The monitoring and review of risks will continue to be undertaken on an ongoing basis and regularly reported to committee. 2.4 Reserves and Balances 2.4.1 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. 2.4.2 The council has a total of £400.319m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 2.4.3 As at 31 March 2024, the council held usable reserves, totalling £121.701m, comprising the following: • £2.763m Repairs and Renewals Fund; • £3.197m Capital Funds; and • £115.741m General Fund, with £107.443m of this balance earmarked for specific purposes. 2.4.4 At the budget setting meeting on 22 February 2024, as part of the revenue budget, Council agreed to the transfer Strathclyde Pension Fund contribution savings of £6.875m relating to council staff and £3.053m relating to Social Work staff to reserves. It was also agreed that £1.875m of revenue surplus within 2024-25 be transferred to the Capital Plan. As the commitments for these include expenditure within 2024-25 year, these have been immediately recognised within the earmarked reserves balances to allow them to be spent accordingly. In addition, Scottish Page 14
Page 15
Government funding in relation to the 23-24 pay award has been notified at a value of £0.371m and this has been reinstated to the Connect for Success earmarking as planned. Further, following a review of earmarked reserves, at its meeting of 26 September 2024, Council approved the release of reserves totalling £1.558m, previously earmarked for specific purposes, back to the unallocated General Fund. The element of the General Fund balance currently earmarked for specific purposes now totals £118.059m. 2.4.5 The current earmarked General Fund balance of £118.059m comprises the following: • £58.413m invested or committed for major initiatives/capital projects; • £10.784m already drawn down; • £15.808m still to be drawn down in 2024-25; and • £33.054m planned to be spent in future years. 2.4.6 The table below summarises the position of the unallocated General Fund balance. Further explanation of the figures can be found at Section 3.4 of the Reserves and Balances report. Heading Detail £000 Unallocated General Fund as at 31 March 2024 This is the balance that is unallocated over and above the 2% contingency, which amounts to £6.039m 2,259 Current Forecast Outturn for 2024-25 as at 31 December 2024 Per Revenue Budget Monitoring report (4,215) Social Work Forecast Outturn adjustment Social Work variance expected to be managed from within IJB reserves 2,179 LiveArgyll Funding Award Contribution in respect of RNM event, to be met from unallocated GF balance (25) Forecast Unallocated General Fund as at 31 March 2025 198 2.4.7 After taking account of the current forecast outturn for 2024-25, the council’s unallocated General Fund balance, over and above the general contingency, is forecast to reduce to £0.198m as at 31 March 2025. 2.4.8 As at 31 December 2024, the commitments against the Strathclyde Pensions fund gain Transformation/Spend to Save projects earmarking are as follows: Description Commitment £000 Data Platform Build Consultancy 44 RIS Service Review 150 Conversational AI 31 225 Further details can be found on the Reserves and Balances report at section 3.7.4. Page 15
Page 16
2.5 VIREMENTS OVER £0.200m (Revenue) 2.5.1 Virement is the process of transferring budget between cost centres, services or departments or between capital projects. The Council’s constitution notes that virements over £0.200m require approval by Council. This section of the report will be used to outline revenue virements in the period that require approval. Capital virements are included within the capital monitoring report. 2.5.2 There are no virements requiring approval since last reporting. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Note the revenue budget monitoring report as at 31 December 2024; b) Note the financial risks for 2024-25; c) Note the capital plan monitoring report as at 31 December 2024 and approve the proposed changes to the capital plan outlined in Appendix 4 of that report; and d) Note the reserves and balances report as at 31 December 2024. 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the 2024-25 financial position of the council as at 31 December 2024 4.3 Legal - None. 4.4 HR - None. 4.5 Fairer Scotland Duty - None. 4.5.1 Equalities – protected characteristics - None. 4.5.2 Socio-economic Duty - None. 4.5.3 Islands - None. 4.6 Climate Change - None. 4.7 Risk - Provides a financial risks summary 4.8 Customer Service - None. 4.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director /Section 95 Officer 17 January 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services For further information contact Carolyn Earl, covering Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk Page 16
Page 17
REVENUE BUDGET MONITORING REPORT AS AT 31 DECEMBER 2024 POLICY & RESOURCES COMMITTEE 20 FEBRUARY 2024 2024-25 Overall Position There is a forecast overspend of £4.215m as at 31 December 2024, comprising the following: • Within Social Work, a forecast overspend of £2.179m, which reflects demand for residential placements within Children and Families and Older Peoples Services; • Within the Executive Directorate of Kirsty Flanagan, a forecast net overspend of £1.610m. Overspends relate to increased bus contract renewal costs for Public and Pupil Transport across Argyll and Bute, additional costs relating to repairs to the Belnahua Ferry, the Transport of ASN pupils, Temporary Accommodation and two unrealised savings for additional income from Traffic Regulation Orders (TB13b) and Stadiums (TB12b). These overspends are partially offset by additional income in Waste, a reduction in Landfill Tax costs due to reduced tonnage levels in Helensburgh Waste Disposal and vacancy savings across the department; • Within the Executive Directorate of Douglas Hendry, a forecast net overspend of £0.241m due to higher than budgeted demand for school residential placements; partially offset by lower than anticipated spend on catering purchases, receipt of historic water refunds, slippage in Education 100 Day Promise spend due to delays in recruitment, lower than anticipated uptake of Universal Free School Meals and a lower spend on condition surveys due to favourable market conditions and good procurement practices; • Within Central Budgets, a forecast overspend of £0.513m overall, relating to the pay award and higher than budgeted inflation on insurance, partially offset by lower than anticipated contributions to Joint Boards. There is a forecast overspend of £0.252m for 2024- 25 pay awards, as the Scottish Government requires councils to fund 3.2%, while the budget only has 3% built in. This is recognised within Other Operating Income and Expenditure for current monitoring purposes, with implications of the pay award to be reflected across departments in future monitoring reports; and • Within funding, a projected over-recovery of income for Council Tax on 2nd Homes of £0.328m. There is a year to date overspend of £20.363m. The year to date variances within the departments tend to relate to the timing of income and expenditure and costs to capital not recharged yet. Key Highlights as at December 2024 Key highlights include the following: • Council services are projecting an overspend of £4.215m as at 31 December 2024. This includes £2.179m in respect of Social Work, which is expected to be funded from within the Health and Social Care Partnership’s reserves. The balance of the overspend is £2.036m. Page 17
Page 18
• Council’s require to fund 3.2% of the 2024-25 pay award, with only 3% provided for within the approved budget, creating a budget pressure £0.252m. This is currently included within Central Services, for current monitoring purposes, however, will be reflected across council services in future budget monitoring reports. Key Financial Successes Performance against budget for 2023-24 was an overall net favourable position of £1.728m underspend after adjusting for year-end earmarking. This breaks down as: • £1.037m net overspend in relation to council expenditure (excluding loans fund) • £0.033m over-recovery of Council Tax income • £5.932m underspend from the Loans Fund due to a higher return on investments than in the previous year, limiting new borrowing by utilising cash balances instead, slippage within the capital programme and a one-off treasury gain as a result of a discount on the early repayment of loans • £3.200m of new unspent budget earmarkings 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. Monitoring Social Work expenditure and more widely the IJB position as any overspend will transfer back to partner bodies in the first instance. Continue to work closely with the CFO of the IJB to ensure that early indication of any potential adverse financial outturn is identified and corrective action is agreed as appropriate to reduce the risk to the council. Identifying further savings and delivering services more efficiently with less resources, as whilst a balanced 2024-25 budget was agreed in February 2024 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. Page 18
Page 19
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. Cost of living crisis impacting on pay inflation negotiations which could result in pay awards above what is deemed affordable. 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. Forecast Outturn Position There is a forecast Overspend of £4.215m for 2024-25 as at 31 December 2024. Page 19
Page 20
Department Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Dec) £000 Previou s Forecas t Varianc e (Oct) £000 Change £000 Explanation Chief Executive's Unit 1,202 1,202 0 0 0 Executive Director (Douglas He 149,852 150,093 (241) (188) (53) The projected overspend is due to the Schools Residential Budget having a higher demand for placements than budget allows, partially offset by lower than anticipated spend in catering purchases, receipt of historic water refunds, slippage in Education 100 Day Promise budget due to delays in recruitment, lower than anticipated uptake of Universal Free School Meals and a lower spend on condition surveys due to favourable market conditions and good procurement. Executive Director (Kirsty Flana 58,181 59,791 (1,610) (1,610) 0 The projected overspend is due to increased bus contract renewal costs for Public and Pupil Transport across Argyll and Bute, additional costs relating to repairs to the Belnahua Ferry, the Transport of ASN pupils, Temporary Accommodation and two unrealised savings for additional income from Traffic Regulation Orders (TB13b) and Stadiums (TB12b). These overspends are partially offset by additional income in Waste, a reduction in Landfill Tax costs due to reduced tonnage levels in Helensburgh Waste Disposal and vacancy savings across the department. Weather Incident 2,787 2,787 0 (780) 780 A contribution from Crown Estates funding of £780k, as part of the funding framework for the unbudgeted revenue costs of the severe weather event has now been confirmed. There is no longer an adverse budget variance in this respect. Social Work 77,239 79,418 (2,179) (2,049) (130) The projected overspend is due to demand for residential placements within children and Families and Older People Services Central Budgets 22,358 22,871 (513) (261) (252) The projected overspend is due to a recognition that Scottish Government have asked Councils to fund a further 0.2% increase for the pay awards for 24-25 (£0.252m), pressure on the insurance budgets inflation being higher than estimated, partially offset by lower than anticipated contributions to Joint Boards. Financed By ####### (311,947) 328 328 0 There is a projected over-recovery of income for Council Tax on 2nd Homes of £0.328m. Total 0 4,215 (4,215) (4,560) 345 Note: Further information on the departmental forecast variances is included later on in the report. Page 20
Page 21
Year to Date Position Page 21
Page 22
The year to date position as at 31 December 2024 is an overspend of £20.363m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 881 864 (17) The year to date overspend can be attributed to profiling issues. Executive Director (Douglas Hendry) 111,006 108,955 (2,051) The year to date overspend is mainly due to the pressure on the Schools Residential Budget, combined with the impact of the pay award and the budget profile not being realigned to reflect this. There are also advance payments for software which will be adjusted at year end through a prepayment which are skewing the YTD position as well as the impact of timing of receipt of grant income to offset grant expenditure. Executive Director (Kirsty Flanagan) 48,465 43,300 (5,165) The year to date overspend, is mainly due to the profile of a number of budgets across the department, mainly with Roads & Lighting and Marine. Weather Incident 3,497 2,032 (1,465) The year to date overspend can be attributed to profiling issues. Social Work 50,031 49,332 (699) The year to date overspend is due to demand driven services within Children and Families and Older People Central Budgets 5,867 5,664 (203) The year to date overspend can be attributed to profiling issues. Funding (207,280) (218,043) (10,763) The year to date overspend can be attributed to profiling issues. Total Net Expenditure 12,467 (7,896) (20,363) Page 22
Page 23
Note: Further information on the departmental year to date variances is included later on in the report. OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 DECEMBER 2024 0% 25% 50% 75% 100% Chief Executive's Unit Executive Director (Kirsty Flanagan) Executive Director (Douglas Hendry) Social W ork Central Budgets TOTAL Expenditure to date against the remaining budget for each Department YTD Actual £000 Remaining Budget £000 Page 23
Page 24
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 881 864 (17) (2.0%) 1,202 1,202 0 0.0% Executive Director (Douglas Hendry) 111,006 108,955 (2,051) (1.9%) 149,852 150,093 (241) (0.2%) Executive Director (Kirsty Flanagan) 48,465 43,300 (5,165) (11.9%) 58,181 59,791 (1,610) (2.8%) Weather Incident 3,497 2,032 (1,465) 0.0% 2,787 2,787 0 0.0% Social Work 50,031 49,332 (699) (1.4%) 77,239 79,418 (2,179) (2.8%) Total Departmental Budgets 213,880 204,483 (9,397) (4.6%) 289,261 293,291 (4,030) (1.4%) Central Budgets Other Operating Income and Expenditure (2,932) 1,417 4,349 306.9% 3,541 3,593 (52) (1.5%) Joint Boards 1,026 1,093 67 6.1% 1,458 1,344 114 7.8% Non-Controllable Costs 7,773 3,154 (4,619) (146.5%) 17,359 17,934 (575) (3.3%) Total Central Budgets 5,867 5,664 (203) (3.6%) 22,358 22,871 (513) (2.3%) TOTAL NET EXPENDITURE 219,747 210,147 (9,600) (4.6%) 311,619 316,162 (4,543) (1.5%) Financed By Aggregate External Finance (149,581) (160,344) (10,763) 6.7% (249,731) (249,731) 0 0.0% Local Tax Requirement (57,699) (57,699) 0 0.0% (63,278) (63,606) 328 (0.5%) Contributions to General Fund 0 0 0 0.0% 12,174 12,174 0 0.0% Earmarked Reserves 0 0 0 0.0% (10,784) (10,784) 0 0.0% Total Funding (207,280) (218,043) (10,763) 4.9% (311,619) (311,947) 328 (0.1%) (Deficit)/Surplus for Period 12,467 (7,896) (20,363) 0 4,215 (4,215) (1.4%) CURRENT PROJECTED FINAL OUTTURNYEAR TO DATE (YTD) POSITION Page 24
Page 25
SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 DECEMBER 2024 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Subjective Category Employee Expenses 139,790 133,789 (6,001) (4.5%) 192,106 195,316 (3,210) (1.7%) Premises Related Expenditure 16,111 15,460 (651) (4.2%) 22,430 22,786 (356) (1.6%) Supplies and Services 22,081 21,490 (591) (2.8%) 28,930 29,099 (169) (0.6%) Transport Related Expenditure 11,609 9,676 (1,933) (20.0%) 18,292 18,782 (490) (2.7%) Third Party Payments 136,140 136,735 595 0.4% 190,005 192,894 (2,889) (1.5%) Capital Financing 2,738 (3,646) (6,384) 10,626 10,626 0 0.0% TOTAL EXPENDITURE 328,469 313,504 (14,965) (4.8%) 462,389 469,503 (7,114) (1.5%) Income (316,002) (321,400) (5,398) 1.7% (462,389) (465,288) 2,899 (0.6%) (Deficit)/Surplus for Period 12,467 (7,896) (20,363) 0 4,215 (4,215) YEAR TO DATE (YTD) POSITION CURRENT PROJECTED FINAL OUTTURN 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. Page 25
Page 26
CHIEF EXECUTIVE’S UNIT – AS AT 31 DECEMBER 2024 The department is currently forecasting spend in line with budget. The department has a year to date underspend of £0.017m (2%) which can be attributed to budget profiling issues. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Dec) £000 Previous Forecast Variance Reported to P&R (Oct) £000 Change £000 Chief Executive 1,202 1,202 0 0 0 Totals 1,202 1,202 0 0 0 Year to Date Position Key Financial Successes: • All savings options have been delivered. • The department’s 2023-24 outturn position was an underspend of £0.006m. This resulted from an overall underspend of £0.014m offset by earmarking of £0.008m due to an auto-carry forward for unspent grants. 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. 0% 25% 50% 75% 100% Chief Executive Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000 Page 26
Page 27
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. Page 27
Page 28
CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 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 308 296 (12) (4.1%) 417 417 0 0.0% Outwith reporting criteria. Community Planning & Development 573 568 (5) (0.9%) 785 785 0 0.0% Outwith reporting criteria. 881 864 (17) (2.0%) 1,202 1,202 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%. Page 28
Page 29
CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 732 719 (13) (1.8%) 1,019 1,019 0 0.0% Outwith reporting criteria. Supplies and Services 14 18 4 22.2% 21 21 0 0.0% Outwith reporting criteria. Transport 5 11 6 54.6% 14 14 0 0.0% Outwith reporting criteria. Third Party 165 168 3 1.8% 228 228 0 0.0% Outwith reporting criteria. Income (35) (52) (17) 32.7% (80) (80) 0 0.0% Outwith reporting criteria. Totals 881 864 (17) (2.0%) 1,202 1,202 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%. Page 29
Page 30
CHIEF EXECUTIVE’S UNIT – RED VARIANCES AS AT 31 DECEMBER 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation 0 0.0% A red variance is a forecast variance which is greater than +/- £50,000. Page 30
Page 31
EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 DECEMBER 2024 The department is currently forecasting an overspend of £0.241m (0.2%) due to the Schools Residential Budget having a higher demand for placements than budget allows, partially offset by lower than anticipated spend in catering purchases, receipt of historic water refunds, slippage in Education 100 Day Promise budget due to delays in recruitment, lower than anticipated uptake of Universal Free School Meals and a lower spend on condition surveys due to favourable market conditions and good procurement. The department has a year to date (YTD) overspend of £2.051m (1.9%). This is mainly due to the above noted pressure on the Schools Residential Budget, combined with the impact of the pay award and the budget profile not being realigned to reflect this. There are also advance payments for software which will be adjusted at year end through a prepayment which are skewing the YTD position as well as the impact of timing of receipt of grant income to offset grant expenditure. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Dec) £000 Previous Forecast Variance Reported to P&R (Oct) £000 Change £000 Executive Director (Douglas Hendry) 390 390 0 0 0 Head of Commercial Services 10,169 10,019 150 150 0 Head of Education 118,112 118,588 (476) (448) (28) Head of Legal and Regulatory Support 21,181 21,096 85 110 (25) Totals 149,852 150,093 (241) (188) (53) 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 Page 31
Page 32
Key Financial Successes: The 2023-24 year-end consolidated outturn position was an under spend of £0.690m after adjusting for automatic earmarking. Contributing factors included: • 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 negotiations with utility suppliers achieved further historic water charge refunds and ongoing reductions to water rates. • Implementation of NDEEF project resulting in recurring annual saving in utilities and a significant contribution to meeting Net Zero targets. • 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. 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 increase is consistent across Scotland. Analysis and review of delivery models has taken place, robust costings of any agreed changes to delivery model 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 and Pupil Equity Funding to close the poverty related attainment gap and identify other funding sources to ensure equity of experience for all children. 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. Rising cost of material and labour costs within the Central Repairs Budget across the department may result in a reduction in activity or overspends. Costs are monitored regularly and contained as much as possible with any unavoidable overspends highlighted as soon as known. Ensure that the School Catering Service remains efficient and effective as the impact of high inflation on produce and a requirement to adhere to the Statutory Guidance supporting Nutritional Requirements for Food and Drink in Schools (Scotland) Regulations 2020, has increased the cost of producing a school meal. Through good procurement of supplies and the introduction of a school meal pre order app that will reduce food waste. Produce meals that pupils want to eat through regular consultation and a range of menu choices. Page 32
Page 33
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 two years of reduced funding 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 term forecasting on population to shape ongoing service redesign. Analysis of potential to extend income generation using “spare” capacity to trial 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 Ringfenced some Education funding which is dependent on Maintaining Teacher Numbers (MTN) to a set level. The target has increased for 2024-25 with no increase in funding. Monitor teacher numbers and associated costs, highlighting any budget pressures immediately. If teacher numbers fall due to delays in recruitment, report the potential financial penalty to departmental management. Page 33
Page 34
EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 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 289 288 (1) (0.4%) 390 390 0 0.0% Outwith Reporting Criteria 289 288 (1) (0.4%) 390 390 0 0.0% Head of Commercial Services Catering 16 (62) (78) 125.8% 320 320 0 0.0% The YTD overspend is due to payment of backdated pay arrears and the budget not being realigned for this, combined with usage of bank staff. This is all partially offset by lower than anticipated spend on catering purchases and replacement of catering equipment. Head of Commercial Services Central/Management Costs 985 972 (13) (1.3%) 1,721 1,621 100 5.8% The YTD overspend is profile related and will be refined to reflect the reported underspend forecast variance through the ledger due to the lower than anticipated spend on catering purchases. Head of Commercial Services CHORD 112 87 (25) (28.7%) 49 49 0 0.0% The YTD overspend is due to the timing of recharges required from capital to offset expenditure. Head of Commercial Services Cleaning (19) (66) (47) 71.2% 77 77 0 0.0% The YTD overspend is due to payment of backdated pay arrears and the budget not being realigned for this, combined with usage of bank staff. Head of Commercial Services Culture, Heritage, Recreation & Sport 4,277 4,323 46 1.1% 5,729 5,729 0 0.0% Outwith Reporting Criteria Page 34
Page 35
Head of Commercial Services Events & Commercial Catering 123 (18) (141) 783.3% 7 7 0 0.0% The YTD overspend is due to under-recovery of income within Events and Commercial Cafes. Finance are working closely with Commercial Services to increase income generation. Head of Commercial Services Property Portfolio (214) (158) 56 (35.4%) (189) (189) 0 0.0% The YTD underspend is due to the timing of invoices for property costs within surplus properties as well as the profile of rental income budgets. Head of Commercial Services Property Services 586 695 109 15.7% 848 798 50 5.9% The YTD and forecast underspend is on condition surveys due to favourable market conditions and good procurement. The balance on the YTD underspend is within staffing due to delays in recruitment. Head of Commercial Services Shared Offices 842 898 56 6.2% 1,607 1,607 0 0.0% The YTD underspend is due to profiling of Central Repairs and timing of works undertaken combined with over-recovery of Rental Income. 6,708 6,671 (37) (0.6%) 10,169 10,019 150 1.5% Head of Education Additional Support for Learning 8,886 8,764 (122) (1.4%) 12,338 12,338 0 0.0% The YTD overspend is due to payment of backdated pay arrears and the budget not being realigned for this. Head of Education Central/Management Costs 2,103 1,829 (274) (15.0%) 2,722 2,722 0 0.0% The YTD overspend is due to overspends in staffing, partially as a result of the backdated pay arrears, combined with staff subsistence, conference fees and travel budgets. Head of Education Community Learning & Development 6 4 (2) (50.0%) 15 15 0 0.0% The YTD overspend is due to central repairs costs in CLD premises. This budget is managed across the service as a whole. Head of Education COVID 11 10 (1) (10.0%) 10 10 0 0.0% Outwith Reporting Criteria Page 35
Page 36
Head of Education Early Learning & Childcare 13,210 13,097 (113) (0.9%) 18,094 18,094 0 0.0% The YTD overspend is within Premises costs in 1140 Hours which will be remedied through budget reprofiling and drawdown of earmarkings. Head of Education Primary Education 30,455 29,743 (712) (2.4%) 41,055 40,975 80 0.2% The YTD overspend is due to payment of backdated pay arrears and the budget not being realigned for this. The forecast underspend is as a result of lower uptake of Universal Free School Meals than funding allows. Head of Education Pupil Support 3,221 2,982 (239) (8.0%) 4,113 4,914 (801) (19.5%) The YTD and forecast overspend as due to higher than budgeted demand for Schools Residential Placements. Head of Education Schools - Central Services 1,642 1,066 (576) (54.0%) 2,401 2,156 245 10.2% The YTD overspend is due to the current spend within Strategic Equity Funding (SEF) and Developing the Young Workforce (DYW). For SEF we are waiting receipt of funds following confirmation in December of funding awarded; for DYW funding is due following our submitted grant return. This is combined with a YTD overspend on licence costs which will be distributed to schools in due course. The forecast position reflects an underspend within the 100 Day Promise budget due to delays in staffing. Head of Education Secondary Education 29,296 29,502 206 0.7% 37,364 37,364 0 0.0% The YTD underspend is profile- related within staffing budgets in secondary schools. This has been impacted by outstanding Teacher Cover adjustments which should be processed in January. 88,830 86,997 (1,833) (2.1%) 118,112 118,588 (476) (0.4%) Head of Legal & Regulatory Support Central/Management Costs 186 177 (9) (5.1%) 262 262 0 0.0% Outwith Reporting Criteria Page 36
Page 37
Head of Legal & Regulatory Support Community Safety 166 119 (47) (39.5%) 187 187 0 0.0% The YTD overspend will be rectified through processing of prepayments at year end. Head of Legal & Regulatory Support Elections 67 33 (34) (103.0%) 37 61 (24) (64.9%) This overspend is due to the two bi-elections that have been carried out in 2024-25. A forecast variance has been processed through the ledger to recognise the position. The remainder of the YTD overspend is profile related. Head of Legal & Regulatory Support Governance 508 445 (63) (14.2%) 733 734 (1) (0.1%) The YTD overspend is due to payment of backdated pay arrears and the budget not being realigned for this as well as overspend on communications which will be rectified through processing of prepayments at year end. Head of Legal & Regulatory Support Governance, Risk & Safety 409 386 (23) (6.0%) 575 575 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 302 363 61 16.8% 667 667 0 0.0% The YTD underspend is an over- recovery of Licence fee income while will reduce through the processing of prepayments at year end. This is partially offset by overspends on Agency Staff and the payment of backdated pay arrears and the budget not being realigned for this. Head of Legal & Regulatory Support NPDO and Hub Schools 12,299 12,279 (20) (0.2%) 16,947 16,837 110 0.6% The YTD overspend is profile related and will be refined. The forecast underspend reflects receipt of non-recurring historic water refunds. Head of Legal & Regulatory Support Procurement, Commercial and Contract Management 776 755 (21) (2.8%) 1,116 1,116 0 0.0% Outwith Reporting Criteria Head of Legal & Trading Standards & Advice Services 466 442 (24) (5.4%) 657 657 0 0.0% Outwith Reporting Criteria Page 37
Page 38
Regulatory Support 15,179 14,999 (180) (1.2%) 21,181 21,096 85 0.4% 111,006 108,955 (2,051) (1.9%) 149,852 150,093 (241) (0.2%) 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 38
Page 39
EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 79,254 77,234 (2,020) (2.6%) 109,974 109,729 245 0.2% The YTD overspend is partially due to payment of backdated pay arrears and the budget not being realigned combined with overspends on employee costs against grants due to timing of offsetting income receipt and subsequent budget position. The forecast position reflects an underspend within the 100 Day Promise budget due to delays in staffing. Premises 7,053 6,690 (363) (5.4%) 9,637 9,587 50 0.5% The YTD overspend in minor adaptations budget will be rectified by a drawdown from the early years earmarked reserve. There is also a YTD overspend in Central Repairs which is profile related and will be refined. The forecast underspend is on condition surveys due to favourable market conditions and good procurement Supplies and Services 10,325 10,858 533 4.9% 15,178 15,103 75 0.5% The YTD underspend relates mainly to the current budget profile of Schools Prepared Meals and Educational Equipment budgets within the Education Service as well as underspends on catering purchases in Commercial Services. The forecast underspend due to lower than anticipated spend on catering purchases partially offset by overspends as a result of two bi-elections in the year. Transport 339 256 (83) (32.4%) 352 352 0 0.0% The YTD overspend is due to small overspends within staff travel budgets across all Services, this overspend will be closely monitored. Third Party 36,622 35,889 (733) (2.0%) 46,605 47,326 (721) (1.6%) The YTD overspend is mainly due to the timing of invoices within NPDO and Hub Schools and the reported budget pressure within the Schools Residential Budget. Income (22,587) (21,972) 615 (2.8%) (31,894) (32,004) 110 (0.3%) The YTD position is mainly due to over-recovery of income within Legal and Regulatory Services. The YTD over-recovery in NPDO Schools is mainly profile- related and will be refined and the remainder is due to receipt of historic water refunds. The YTD over- recovery of income for Licence Fees will remain and be adjusted for at year-end. Totals 111,006 108,955 (2,051) (1.9%) 149,852 150,093 (241) (0.2%) Page 39
Page 40
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 40
Page 41
EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES AS AT 31 DECEMBER 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Education - Pupil Support 4,113 4,914 (801) (19.5%) Higher than budgeted demand for placements within Residential Schools. Education - Schools - Central Services 2,401 2,156 245 10.2% Recruitment delays within 100 day Promise Budget Commercial Services - Central/Management Costs 1,721 1,621 100 5.8% Lower than anticipated spend in Catering Purchases Commercial Services - Property Services 848 798 50 5.9% Condition Surveys Budget - Market Conditions more favourable through effective procurement. Legal and Regulatory Support - NPDO 16,947 16,837 110 0.6% One off receipt of historic water refunds. Education - Primary Education 41,055 40,975 80 0.2% Lower than anticipated spend on Universal Free School Meals A red variance is a forecast variance which is greater than +/- £50,000. Page 41
Page 42
EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 DECEMBER 2024 The department has a forecast overspend of £1.610m (2.8%). This is due to increased bus contract renewal costs for Public and Pupil Transport across Argyll and Bute, additional costs relating to repairs to the Belnahua Ferry, the Transport of ASN pupils, Temporary Accommodation and two unrealised savings for additional income from Traffic Regulation Orders (TB13b) and Stadiums (TB12b). These overspends are partially offset by additional income in Waste, a reduction in Landfill Tax costs due to reduced tonnage levels in Helensburgh Waste Disposal and vacancy savings across the department. The department has a year to date overspend of £5.165m (12.4%). This is mainly due to the profile of a number of budgets across the department, mainly with Roads & Lighting and Marine. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Dec) £000 Previous Forecast Variance Reported to P&R (Oct) £000 Change £000 Executive Director (Kirsty Flanagan) 89 (11) 100 100 0 Head of Customer Support Services 8,825 8,809 16 16 0 Head of Development and Economic Growth 8,937 9,111 (174) (174) 0 Head of Financial Services 6,988 6,988 0 0 0 Head of Roads and Infrastructure Services 33,342 34,894 (1,552) (1,552) 0 Totals 58,181 59,791 (1,610) (1,610) 0 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 Page 42
Page 43
Key Financial Successes: The department had a challenging 2023-24 financial year with few financial successes largely due to the Weather Incident in October creating substantial pressures as well as reduced income due to numerous ferry cancellations at our Piers & Harbours. Key Financial Challenges: Proposed Actions to address Financial Challenges: Ensuring that services spend to budget and do not overspend after the department had an overspend of £1.3m after automatic earmarkings in 2023-24. Detailed monitoring in the key areas overspent in 2023-24 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 soon as known. 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 ongoing high levels of inflation and service demand caused by world events. 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. The current budget provision provides for 56 full equivalent runs. 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 departments key infrastructure due to increased inspection regimes will result in overspends. The Council will continue to tackle climate change, looking at financially sustainable options and will closely monitor the financial consequences. Page 43
Page 44
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. Ferry Grant from Transport Scotland has stayed the same for 2024-25 despite increased costs for employee inflation as well as other general inflationary increases. Costs are monitored regularly and contained as much as possible with any unavoidable overspends highlighted as soon as known. Due to the nature of the various components of Waste Management there are ongoing challenges with: • The introduction 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 Renewi (previously Shanks). Page 44
Page 45
EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 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 235 214 (21) (9.8%) 89 (11) 100 112.4% Forecast variance due to a projected over-recovery of vacancy savings. 235 214 (21) (9.8%) 89 (11) 100 112.4% Head of Customer Support Services Central/Management Costs 104 120 16 13.3% 167 167 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 Customer Support Services Communications 253 246 (7) (2.9%) 339 339 0 0.0% Outwith reporting criteria Head of Customer Support Services Customer Service Centres 1,191 1,128 (63) (5.6%) 1,590 1,590 0 0.0% YTD overspend due to the timing of cash flows in comparison to the profiling of budget and will be rectified over the financial year. Head of Customer Support Services HR 2,105 1,869 (236) (12.6%) 2,386 2,370 16 0.7% YTD overspend due to costs for the iTrent project that need to be drawn down from earmarked reserves. Forecast variance due to underspend in Organisational Development. Head of Customer Support Services ICT 3,301 3,295 (6) (0.2%) 4,368 4,368 0 0.0% Outwith reporting criteria Head of Customer Support Services Registrars (3) (41) (38) 92.7% (25) (25) 0 0.0% YTD overspend due to the timing of cash flows in comparison to the profiling of budget and will be rectified over the financial year. 6,951 6,617 (334) (5.1%) 8,825 8,809 16 0.2% Head of Development & Economic Growth Airports 1,005 948 (57) (6.0%) 1,186 1,186 0 0.0% YTD overspend due to the timing of cash flows in comparison to the profiling of Page 45
Page 46
budget and will be rectified over the financial year. Head of Development & Economic Growth Building Control (203) (170) 33 (19.4%) (140) (140) 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 Development & Economic Growth Central/Management Costs 396 391 (5) (1.3%) 570 570 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Culture & Heritage 151 179 28 15.6% 250 250 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 Development & Economic Growth Development Management 30 (24) (54) 225.0% 115 115 0 0.0% YTD overspend due to the timing of cash flows in comparison to the profiling of budget and will be rectified over the financial year. Head of Development & Economic Growth Development Policy 279 308 29 9.4% 451 451 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Economic Development 335 2,076 1,741 83.9% 2,178 2,178 0 0.0% YTD underspend due to grant income received that has not yet been spent and will be rectified over the financial year. Head of Development & Economic Growth Environmental Health 788 833 45 5.4% 1,230 1,230 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Environmental Initiatives 59 57 (2) (3.5%) 93 93 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Housing 3,644 2,978 (666) (22.4%) 2,714 2,888 (174) (6.4%) YTD overspend due to earmarked reserve draw down being needed to fund expenditure in the Strategic Housing Fund not being completed. Forecast overspend reported due to increased Temporary Page 46
Page 47
Accommodation and maintenance costs. Head of Development & Economic Growth Private Landlords (219) (11) 208 (1890.9%) 0 0 0 0.0% YTD underspend is due to timing of Short Term Let income which will be rectified over the coming months with any surplus being earmarked at the end of the year. Head of Development & Economic Growth Transportation Policy 131 218 87 39.9% 290 290 0 0.0% YTD underspend due to profile of income which will be rectified over the financial year. 6,396 7,783 1,387 17.8% 8,937 9,111 (174) (1.9%) Head of Financial Services Accounting & Budgeting 1,849 1,825 (24) (1.3%) 2,566 2,566 0 0.0% Outwith reporting criteria Head of Financial Services Internal Audit & Fraud 234 248 14 5.7% 332 332 0 0.0% Outwith reporting criteria Head of Financial Services Revenues & Benefits 4,856 4,913 57 1.2% 3,155 3,155 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 534 560 26 4.6% 935 935 0 0.0% Outwith reporting criteria 7,473 7,546 73 1.0% 6,988 6,988 0 0.0% Head of Roads & Infrastructure Services Amenity 3,114 2,939 (175) (6.0%) 3,215 3,240 (25) (0.8%) YTD overspend mainly due to Maintenance cost across Parks within Bute and Cowal which can hopefully be covered by underspends elsewhere, further information will be provided at next update. Forecast variance due to additional vehicle costs. Head of Roads & Infrastructure Services Car Parking (588) (464) 124 (26.7%) (601) (601) 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. Page 47
Page 48
Head of Roads & Infrastructure Services Central/Management Costs 2,393 2,206 (187) (8.5%) 2,698 2,662 36 1.3% YTD overspend due to the timing of cash flows in comparison to the profiling of budget and will be rectified over the financial year. Forecast underspend due to delay in Route Optimisation project, this is partially offset against additional vehicle costs. Head of Roads & Infrastructure Services Depots 386 384 (2) (0.5%) (313) (313) 0 0.0% Outwith reporting criteria Head of Roads & Infrastructure Services Fleet & Transport 8,014 6,358 (1,656) (26.1%) 8,668 10,255 (1,587) (18.3%) YTD overspend due to increased internal fleet maintenance costs and increased bus contracts costs for Public Transport and Pupil Transport. Forecast overspend reported due to increased contract costs for Public & Pupil Transport as well as increased costs for Internal Pupil Transport. Head of Roads & Infrastructure Services Infrastructure 407 489 82 16.8% 725 725 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 Roads & Infrastructure Services Marine (2,882) (4,124) (1,242) 30.1% (3,810) (3,560) (250) 6.6% YTD overspend due to additional costs for Ferry maintenance and timing of income. Forecast overspend for additional maintenance costs for Luing and Jura Ferries. Head of Roads & Infrastructure Services Network & Traffic Management 189 42 (147) (350.0%) 109 209 (100) (91.7%) YTD overspend due to shortfall in income for Traffic Regulation Orders. Forecast overspend for an unrealised saving for additional income from Traffic Regulation Orders. Page 48
Page 49
Head of Roads & Infrastructure Services Road Safety 81 143 62 43.4% 147 147 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 Roads & Infrastructure Services Roads & Lighting 7,507 4,158 (3,349) (80.5%) 7,699 7,703 (4) (0.1%) YTD overspend due to the profile of internal recharge budget within the Roads and Lighting Holding account, which will be rectified over the financial year. Forecast overspend due to increased employee recharges. Head of Roads & Infrastructure Services Waste 8,789 9,009 220 2.4% 14,805 14,427 378 2.6% Underspend due to reduction in Landfill Tax costs due to reduction in tonnage levels in Helensburgh resulting in underspends alongside additional recyclate and commercial refuse income. 27,410 21,140 (6,270) (29.7%) 33,342 34,894 (1,552) (4.7%) 48,465 43,300 (5,165) (11.9%) 58,181 59,791 (1,610) (2.8%) 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 49
Page 50
EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 30,912 30,142 (770) (2.6%) 43,367 43,651 (284) (0.7%) YTD overspend due to payment of backdated pay arrears and the budget not being realigned which will be rectified by the end of the financial year as well as agency staff that will be covered with the draw down of earmarked reserves. Premises 2,587 2,672 85 3.2% 4,075 4,115 (40) (1.0%) YTD underspend mainly due to the profile of the Depot recharge which will be rectified by end of the financial year. Forecast overspend due additional housing maintenance costs. Supplies and Services 9,324 7,963 (1,361) (17.1%) 10,979 10,961 18 0.2% YTD overspend mainly due to expenditure incurred in Economic Development which will be funded from grant income as well as the profile of budget across a number of services which should be rectified by end of the financial year. Forecast underspend due to delay in Route Optimisation project partially offset by additional housing maintenance costs. Transport 10,730 8,884 (1,846) (20.8%) 16,900 17,352 (452) (2.7%) YTD overspend due to additional costs for ferry and vehicle maintenance costs as well as additional Fleet and Roads Maintenance costs that will be offset with additional income from recharges to other services/capital. Forecast overspend for additional maintenance costs for Luing and Jura Ferries, increased Pupil Transport costs and vehicle maintenance costs across Amenity and Waste. Third Party 51,541 50,847 (694) (1.4%) 71,148 72,080 (932) (1.3%) YTD overspend mainly due to grant payments within Economic Development and Housing that either have or will be offset with grant income once received as well as external contractor costs within Roads that are covered by additional income, these are offset by Benefit Payment underspends which are offset with reduced income. Forecast overspend due to increased contract costs for Public Transport and additional Temporary Accommodation costs in Housing. Page 50
Page 51
Capital Financing 0 0 0 0.0% 2,677 2,677 0 0.0% Outwith reporting criteria Income (56,629) (57,208) (579) 1.0% (90,965) (91,045) 80 (0.1%) YTD overspend mainly due to a reduction in Benefit Income which will be offset with reduced Benefit Payments and the profile of recharges within the Roads Operational Holding Account which will be rectified over the financial year; these are partially offset with grant income received within Economic Development and Housing to cover expenditure incurred within Third party Payments. Forecast underspend reported as there is a reduction in Landfill Tax costs due to reduction in tonnage levels in Helensburgh alongside additional recylate and commercial refuse income which is partially offset against two unrealised savings for additional income from Traffic Regulation Orders (TB13b) and Stadiums (TB12b). Totals 48,465 43,300 (5,165) (11.9%) 58,181 59,791 (1,610) (2.8%) 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 51
Page 52
EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 31 DECEMBER 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Public Transport 5,266 6,353 (1,087) (20.6%) New bus contracts in place for Public and Pupil Transport. Pupil Transport - Internal 1,461 1,961 (500) (34.2%) Increased costs for transporting ASN pupils. Ferries 160 410 (250) (156.3%) Maintenance costs for Luing and Jura ferries. Traffic Regulation Orders (150) (50) (100) 66.7% Unrealised saving for additional income from Traffic Regulation Orders. Housing 742 846 (104) (14.0%) Increased costs for B&B usage for Temporary Accommodation. Vacancy Savings (428) (528) 100 (23.4%) Projected over-recovery of vacancy savings. Waste Income (2,324) (2,504) 180 (7.7%) Additional recyclate income. Waste Disposal 1,989 1,756 233 11.7% Reduction in Landfill Tax costs due to reduction in tonnage levels in Helensburgh A red variance is a forecast variance which is greater than +/- £50,000. Page 52
Page 53
SOCIAL WORK – AS AT 31 DECEMBER 2024 The department is currently forecasting an overspend of £2.179M (2.8%). This is due to demand for residential placements within Children and Families and Older People Services. The department has a year-to-date overspend of £0.699m (1.4%) which again is due to demand driven services within Children and Families and Older People. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Dec) £000 Previous Forecast Variance Reported to P&R (Oct) £000 Change £000 Chief Officer Integration (1,261) (1,011) (250) (254) 4 Head of Strategic Planning and Performance 453 456 (3) 0 (3) Head of Health and Community Care 41,607 43,452 (1,845) (1,890) 45 Head of Acute and Complex Care 21,216 21,116 100 314 (214) Head of Children and Families 15,224 15,405 (181) (219) 38 Totals 77,239 79,418 (2,179) (2,049) (130) Year to Date Position Key Financial Successes: Delivered a balanced budget at the end of 2023/24 after utilising £1.826m of reserves. An additional amount of £0.209m was transferred to IJB reserves and should allow for future investment and transformation across Social Work. -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 53
Page 54
Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the outstanding savings total for 2024/25 of £0.993m (as at September 2024). 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 24/25 to address the 24/25 budget gap, as well as budget gaps in future years. Support from finance to assist strategic managers to develop and identify further savings 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. 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 2024 of £1.9m. 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. Page 54
Page 55
SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 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 267 249 (18) (7.2%) 596 606 (10) (1.7%) Outwith reporting criteria. Chief Officer Integration Social Work Central Support (125) (512) (387) 75.6% (1,857) (1,617) (240) 12.9% The YTD variance is due to the under recovery of vacancy savings partially offset by spend on agency staff and charges from housing services and a termination payment due to a senior officer leaving their substantive post. The forecast variance reflects an under recovery in vacancy savings due to either posts being filled or cost centres not open for savings due to agency costs being incurred. This under recovery is partially offset by agency costs being incurred,charges from housing services and a termination payment due to a senior officer leaving their substantive post. 142 (263) (405) 68.4% (1,261) (1,011) (250) 11.2% Head of Strategic Planning & Performance Management & Central Costs 286 281 (5) (1.8%) 421 426 (5) (1.2%) Outwith reporting criteria. Head of Strategic Planning & Performance Service Development 21 21 0 0.0% 32 30 2 6.3% Outwith reporting criteria. 307 302 (5) (1.8%) 453 456 (3) 5.1% Head of Health and Community Care Management & Central Costs 358 333 (25) (7.5%) 582 589 (7) (1.2%) Outwith reporting criteria. Head of Health and Community Care Older People 26,269 25,909 (360) (1.4%) 41,025 42,863 (1,838) (4.5%) The YTD and forecast overspends are due to the current demand for care packages and the increasing reliance on agency staff to cover sickness and vacancies along with an increase in payments to third party providers. 26,627 26,242 (385) (1.5%) 41,607 43,452 (1,845) (4.4%) Page 55
Page 56
Head of Acute and Complex Care Learning Disabilities 8,166 8,690 524 6.0% 14,989 14,710 279 1.9% The YTD underspend is due to timing differences on charges to health boards and other income lines. The forecast underspend reflects the current demand for LD services. Head of Acute and Complex Care Management & Central Costs 55 83 28 33.7% 128 92 36 28.1% The YTD and forecast underspends are based on current projected requirement for training and supplies and services costs. Head of Acute and Complex Care Mental Health 2,004 1,699 (305) (18.0%) 3,001 3,362 (361) (12.0%) The YTD variance is due to unbudgeted agency costs, timing differences on charges to health boards and increased demand for residential placements. The forecast overspend is based on current demand for the service and re-assessments of care packages and unbudgeted agency costs. Head of Acute and Complex Care Physical Disability 1,901 2,112 211 10.0% 3,098 2,952 146 4.7% The YTD and forecast underspends are due to some care packages ending and others being re-assessed. 12,126 12,584 458 31.8% 21,216 21,116 100 22.7% Head of Children & Families Child Protection 2,247 2,379 132 5.6% 3,602 3,431 171 4.7% The YTD variance is based on known demands for the service coupled with deferred income received from previous years. The forecast underspend is as a result of demand for contact and welfare services and deferred income in the area teams budget lines. Head of Children & Families Children with a Disability 654 783 129 16.5% 1,036 833 203 19.6% The YTD variance is based on two third sectors grants ending. The forecast underspend reflects a reduction in third sector grants payable to external organisations, one of which may re-start before then end of the financial year. Head of Children & Families Criminal Justice 251 122 (129) (105.7%) 174 77 97 55.7% The YTD variance is due to additional grant funding. The forecast underspend reflects additional grant funding received along with vacant posts. Head of Children & Families Looked After Children 5,322 4,837 (485) (10.0%) 6,679 7,366 (687) (10.3%) The YTD variance is due to a retainer payment being required for 4 weeks for 2 children transitioning from secure to residential placements along with a rates increase agreed by Scotland Excel and a change in the split of the funding for one package. The forecast overspend reflects current known demand for Page 56
Page 57
the service. Currently have 18 children in residential placements with an average cost of £132k per annum and potentially more under consideration along with an overspend on staff costs due to a re-grading process partially offset by underspends in Adoption and Fostering. Head of Children & Families Management & Central Costs 2,355 2,346 (9) (0.4%) 3,733 3,698 35 0.9% Outwith reporting criteria. 10,829 10,467 (362) (3.5%) 15,224 15,405 (181) (1.2%) GRAND TOTAL 50,031 49,332 (699) (1.4%) 77,239 79,418 (2,179) (2.8%) 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 57
Page 58
SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 DECEMBER 2024 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 26,347 23,432 (2,915) (12.4%) 33,537 36,184 (2,647) (7.9%) Both the YTD and forecast overspend is due to the use of agency staff across the HSCP partially offset by payroll underspends due to vacancies. Premises 1,065 1,007 (58) (5.8%) 1,584 1,646 (62) (3.9%) The YTD overspend and forecast overspend are mainly due to overspends on utilities, central repairs and property maintenance. Supplies & Services 1,496 1,421 (75) (5.3%) 1,045 1,307 (262) (25.1%) The YTD and forecast overspend are largely due to the timing of payments relating to the purchase of computer software and the purchase of small tools and equipment. Transport 497 477 (20) (4.2%) 616 654 (38) (6.2%) The YTD and forecast variance are outwith the reporting criteria. Third Party 42,885 44,513 1,628 3.7% 64,814 66,014 (1,200) (1.9%) The YTD and forecast variance are due to demand for purchased care services across both Childrens and Adult Services. Income (22,259) (21,518) 741 (3.4%) (24,357) (26,387) 2,030 (8.3%) The YTD and forecast over recovery of income is mainly due to increased income from fees, charges and recharges. Totals 50,031 49,332 (699) (1.4%) 77,239 79,418 (2,179) (2.8%) YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Page 58
Page 59
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 59
Page 60
SOCIAL WORK – RED VARIANCES AS AT 31 DECEMBER 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Social Work Central Support (1,857) (1,617) (240) 12.9% The forecast variance reflects an under recovery in vacancy savings due to either posts being filled or cost centres not open for savings due to agency costs being incurred. This under recovery is partially offset by agency costs being incurred, charges from housing services and a termination payment due to a senior officer leaving their substantive post. Looked After Children 6,679 7,366 (687) (10.3%) The forecast overspend reflects current known demand for the service. Currently have 18 children in residential placements with an average cost of £132k per annum and potentially more under consideration along with an overspend on staff costs due to a re-grading process partially offset by underspends in Adoption and Fostering. Children with a Disability 1,036 833 203 19.6% The forecast underspend reflects a reduction in third sector grants payable to external organisations, one of which may re-start before then end of the financial year. Child Protection 3,602 3,431 171 4.7% The forecast underspend is as a result of demand for contact and welfare services and deferred income in the area teams budget lines. Criminal Justice 174 77 97 55.7% The forecast underspend reflects additional grant funding received and vacant posts. Older People 41,025 42,863 (1,838) (4.5%) The forecast variance reflects the current demand for care packages, the cost of agency staff and payments to third party providers. Physical Disability 3,098 2,952 146 4.7% The forecast underspend is due to a combination of re-assessed needs packages and some care packages ending. Learning Disability 14,989 14,710 279 1.9% The forecast underspend reflects the current demand for LD services. Mental Health 3,001 3,362 (361) (12.0%) The forecast overspend is based on current demand for the service and re-assessments of care packages and unbudgeted agency costs. A red variance is a forecast variance which is greater than +/- £50,000. Page 60
Page 61
MONITORING OF SAVINGS – AS AT 31 DECEMBER 2024 New policy savings were identified for the three year period 2024-25 to 2026-27 and these were agreed by Council in February 2024. Council agreed to policy savings of £0.665m on a recurring basis. The position of historical policy saving options is as follows: - 2023/24 – those not delivered or that have further increases in value in 2024-25 onwards total £5.387m - 2022/23 – those not delivered or that have further increases in value in 2024-25 onwards total £0.170m - 2021/22 – those not delivered total £0.041m - 2020/21 – all delivered - 2019/20 – all delivered - 2018/19 - those not delivered total £0.204m The 2024-25 savings have been removed from departmental budgets, however, it is important to monitor whether the saving has actually been delivered to ensure that costs are not continuing resulting in an overspend by the end of the year. It is also important to ensure that any preparatory work required to deliver savings in future years is on track. There is two savings where the department has indicated it will not be achieved in full as summarised below: Saving Saving Agreed Status Detail Shortfall/ Delayed Value TB13b Roads and Amenity Services charging (non-statutory services) Feb-18 Will not be achieved in full. The original proposal was to introduce charges for providing lighting design and increase charges by 20% for road construction consents, skips, scaffolds, hoarding, permits and licences. Whilst some additional income has been generated through third party works, opportunities are expected to be limited over the foreseeable future due to staff shortages and other competing demands. A cost pressure will be added to the 2025-26 budget for this shortfall and the service will look at other potential savings as part of the RIS Review. £100,000 Page 61
Page 62
TB12b Stadiums Feb-18 Will not be achieved in full. The potential partnership relating to Mossfield has not materialised. More clubs are now using the all weather facilities and this has had an impact on Council income, therefore it is unlikely the full saving will ever be achieved. A cost pressure will be added to the 2025-26 budget for this shortfall and the service will look at other potential savings as part of the RIS Review. £20,000 All policy saving options previously agreed are noted in the table below for information. Page 62
Page 63
2024-25 2024-25 £000 FTE Executive Director Douglas Hendry CS01 Feb-22 Commercial Services Property Services Climate Change & Resource Efficiency 63.0 0.00 On Track to be Delivered 202425 008 Feb-24 Commercial Services - Live Argyll Live Argyll 10% reduction 10% reduction to the Management Fee paid to Live Argyll Leisure Trust from the Council. 363.00 0.0 Delivered 202425 011 Feb-24 Education Positive Starts Referrals to the Positive Starts support scheme have been reducing year on year, furthermore the Early Years team no longer have capacity to quality assure and administer this budget to a level where they can ensure a positive impact for children and families or best value in relation to the service. Referrals come form Health and Social Work, not Education however the HSCP were not willing to manage this budget. 40.0 0.00 Delivered 202425 009 Feb-24 Governance, Risk and Safety Governance Restructure Reorganisation of Governance team and remove posts that are currently vacant. The proposed restructure will ensure current level of service will be maintained. 62.00 2.5 On Track to be Delivered Executive Director Kirsty Flanagan DEG01 Feb-22 Development and Economic Growth Economic Growth Crown Estate Administration Contribution to Project Delivery 107.00 0.0 Delivered FIS2324-001 Feb-23 Financial Services Treasury Management Service Concessions - Alteration to accounting treatment to align the repayment of borrowing relating to new schools over their asset life. Guidance from Scottish Government now permits this change of accounting treatment. Further detail will be provided to Council in due course. 4,861.0 0.00 Delivered FIS2324-002 Feb-23 Financial Services Revenues and Benefits The Service has identified savings through rightsizing of budgets, an organisational restructure with investment in modern apprenticeships and temporary staff designed to boost income from the billing of additional local taxes and the recovery of associated debt. In addition efficiency savings from increased productivity, increased levels of process automation and moving more customers to transact with the service over the internet will allow previously outsourced review works to be carried out internally. 466.00 3.0 On Track to be Delivered R&I15 Feb-21 Roads and Infrastructure Roads and Infrastructure Emergency services support and fuel provision from our fuel supplies 0.50 0.0 Still to be Implemented 202425 012 Feb-24 Roads and Infrastructure Roads and Infrastructure Services (RIS) Review A RIS Review was undertaken during 2023/24 and the implementation of the outcomes will begin in 2024-25. It is anticipated that further efficiency savings will be achievable in future years but the level of which are not known at this stage. 200.00 0.0 On Track to be Delivered R&I09 Feb-21 Roads and Infrastructure - Operations Roads and Infrastructure - Operations Road inspections find and fix - reduce reactive work by proactivity. Moving to AI technology as technology develops 40.00 1.0 On Track to be Delivered RIS2324-001 Feb-23 Roads and Infrastructure Services School Crossing Patrollers Support Communities to move to different approaches to delivering School Crossing Patrols through engagement with Parent Council and Communities. 60.00 8.4 Delivered TB13b Feb-18 Roads and Infrastructure Services Roads and Infrastructure Services Roads & Amenity Services charging (non- statutory services) 100.0 0.00 Will not be achieved TB13b Feb-18 Roads and Infrastructure Services Roads and Infrastructure Services Roads & Amenity Services charging (non- statutory services) 50.0 0.00 On Track to be Delivered TB12b Feb-18 Roads and Infrastructure Services Amenity Services Review charges for stadiums to enable improvement work 20.00 0.0 Will not be achieved TB12b Feb-18 Roads and Infrastructure Services Amenity Services Review charges for stadiums to enable improvement work 10.00 0.0 On Track to be Delivered TB09 Feb-18 Roads and Infrastructure Services Public Conveniences Public Conveniences - Progress sustainable models including turnstiles and franchising; establish simpler asset transfer process 24.00 0.0 On Track to be Delivered TOTAL 6,466.5 14.9 Template Ref Saving Agreed Service Service Delivery Area Savings Option Status of Implementation Page 63
Page 64
ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 20 FEBRUARY 2025 FINANCIAL RISKS ANALYSIS 2024-25 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 2024-25, as at 31 December 2024. 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 departmental risk, the potential annual financial impact has been quantified, and the likelihood of the risk materialising assessed based on a standard risk matrix. 1.3 There are 4 council wide revenue risks identified for 2024-25, with a potential annual value totalling £2.583m, and with varying degrees of likelihood. 1.4 There are currently 42 departmental risks, with a potential annual value totalling £6.693m, 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. Page 64
Page 65
ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 20 FEBRUARY 2025 FINANCIAL RISKS ANALYSIS 2024-25 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 2024-25, as at 31 December 2024. 3 DETAIL 3.1 Introduction 3.1.1 The council is currently in a period of significant financial challenge. 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 risk, the potential annual financial impact has been quantified 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 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. 3.2 Council Wide Risks Revenue Page 65
Page 66
3.2.1 There is continued volatility in utilities pricing and demand can also be subject to unpredictable weather extremes. A potential annual risk value equivalent to 10% of the annual utilities budget provision is deemed reasonable. This equates to £0.650m. 3.2.2 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. This equates to £0.633m. 3.2.3 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. 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 December 2024, the forecast outturn for 2024-25 on Social Work services was an overspend of £2.179m. The Chief Financial Officer of the IJB has now written to the Council to request access to the Strathclyde Pension Fund Gain that is held in reserves for the HSCP and, therefore, it is expected that Social Work will outturn within budget, after applying these reserves. However, there is a risk that the level of overspend will increase beyond the level that can be managed through available reserves. A potential annual risk value of £0.500m is deemed reasonable in this respect. 3.2.4 There is an ongoing requirement to fund unavoidable inflationary cost increases in across a number of areas such as, food and fuel. Inflation has been falling and the Bank of England forecasts that it will continue to fall throughout the year. This position will continue to be closely monitored, with financial forecasts updated to reflect information available on an ongoing basis. A potential annual risk value equivalent to 1% of relevant non-pay annual budgets is deemed reasonable. This equates to £0.800m. 3.2.5 The council wide risks are summarised within the following table. Description Likelihood Assessed Financial Impact £000 Energy costs increase by 10% greater than anticipated 3 650 1% variation in Council Tax Income 2 633 Page 66
Page 67
IJB refer to Council for additional funding to deliver social work services 3 500 1% variation in non-pay inflation 4 800 Total 2,583 Capital 3.2.6 The Local Government Finance Settlement announced on 19 December 2023 provided details of grant funding for 2024-25, proving certainty in respect of General Capital Grant and available specific capital grant funding. 3.2.7 The approved capital plan includes estimated capital receipts from asset sales of £0.750m in 2024-25. This is based on an assessment provided by the Special Projects Team in January 2024. A 10% variation from this estimate equates to £0.075m, which would require to be managed within available resources. 3.2.8 General feedback from Scotland Excel and council project managers indicates that price increases and uncertainty continue to be experienced, as well as disruptions to the supply chain and longer lead times, particularly in relation to the construction sector and material availability. The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all influence the overall contract price and make it extremely challenging to manage the delivery of capital investment projects within available budgets and target delivery timescales. 3.2.9 While it has been possible to estimate the impact of these pressures on some capital projects, and therefore either reflect those projections within the capital monitoring report or adjust the capital programme accordingly, for others it is more difficult, with no adverse forecast outturn projected at this stage. It is, therefore, deemed likely that there will be further significant financial impacts, not yet reported, which may be challenging to manage within existing resources. 3.3 Departmental/Service Risks 3.3.1 The detail of each departmental financial risk is included 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. 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 Page 67
Page 68
Executive Director Douglas Hendry 2 20 5 460 9 730 3 435 0 0 19 1,645 Executive Director Kirsty Flanagan 4 285 2 140 15 4,373 2 250 0 0 23 5,048 Total 6 305 7 600 24 5,103 5 685 0 0 42 6,693 3.3.2 The current top three risks in terms of the financial impact are noted in the table below. SERVICE RISK TITLE DESCRIPTION LIKELIHOOD FINANCIAL IMPACT £000 Roads and Infrastructure Services Roads Maintenance – Roads, Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of road access, bridges, culverts, road or sea defence. 3 1,500 Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. 3 586 Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. This is in relation to historical debt that has accumulated over many years therefore any adverse collection rates will impact on the year end debt provision as opposed to the in-year financial position, hence no forecast variance has been reported within the current year. 3 345 3.3.3 The risks which are likely, are noted below: SERVICE RISK TITLE DESCRIPTION LIKELIHOOD FINANCIAL IMPACT £000 Page 68
Page 69
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. Increase 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 vehicles parts. 4 100 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. 4 75 Legal and Regulatory Support Elections More than 1 by-election required outwith standard election cycle. 4 60 3.4 Changes to Financial Risks 3.4.1 The number of council wide risks has reduced from 7 to 4 since the previous reporting period, due to confirmation of the 2024-25 pay awards, and progress on the delivery of approved 2024-25 revenue budget savings options. There have been no changes to the departmental risks since last reporting. 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 Page 69
Page 70
3.6.1 Financial risks impacting 2025-26 and future years will be reported as part of the 2025-26 Budget Pack. 4 CONCLUSION 4.1 This report summarises the known key financial risks facing the council in 2024- 25. There are 5 council wide risks and 42 departmental 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. 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 Fairer Scotland Duty - None. 5.5.1 Equalities – protected characteristics - None. 5.5.2 Socio-economic Duty - None. 5.5.3 Islands - None. 5.6 Climate Change - None. 5.7 Risk - Provides details of financial risks 5.8 Customer Service - None. 5.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director/Section 95 Officer 17 January 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES Appendix 1 – Departmental/Service Financial Risks For further information contact Carolyn Earl, covering Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk Page 70
Page 71
APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 DECEMBER 2024 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 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 2 100 Executive Director Douglas Hendry Commercial Services Catering Purchases Increased supplier charges and higher than average inflation on food costs. In addition to this the Scottish Government reviewed the regulations that govern the food and drinks provided in schools and implemented revised regulations. The revised standards focus on reducing sugar, reducing red processed meat and increasing fibre. Thus far, there has been an increase in costs in produce and a reduction in demand for school meals. Joint strategy with procurement colleagues to reduce potential impact of supplier charges. Control food wastage/portion controls; introduction of online ordering to help manage food waste. Analysis and regular review of menu choices. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Catering - Implementation of Universal Free School Meals in Primary Schools for P6 and P7 pupils The Scottish Government may not give the local authority adequate funds to support the policy to expand free school meals in primary schools to include P6 and P7 pupils (the scheme has already been implemented for P1 to P5 pupils). Additionally, In 2023-24 Special Schools and Learning Centres received FSM to S6 Level. Although expansion paused for full implementation for P6&7, FSM will be expanded through entitlement to Scottish Child Payment and will be implemented in February 2025. Senior Manager connected into the ASSIST FM Committee and will continue to ensure the Council's viewpoint will be considered. 0 0 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 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 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 50 3 50 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 4 300 As at 31 October 2024 As at 31 December 2024 Page 71
Page 72
DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 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. 3 200 3 200 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; Support network; Short-term cash injections. 3 100 3 100 Executive Director Douglas Hendry Education Legislative Requirements - 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 built included in the staffing model funded by Scottish Government. Scottish Government has included within scope for this parliamentary session plans to further expand on eligibility for 1140 hours to all 2 year olds and some one year olds. As yet there has been no funding commitment. However this will place unknown cost pressures on both our capital and revenue budgets Continuous monitoring and review of the service model, usage and resources. 3 100 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 3 50 Executive Director Douglas Hendry Legal and Regulatory Support Hub DBDA/DBFM Schools - Litigation Increased risk of the requirement to litigate to conclude final capital contract payments due. Monitoring claims and mitigation through robust challenge of any additional claims. 2 150 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 3 100 Page 72
Page 73
DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 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. 4 75 4 75 Executive Director Douglas Hendry Legal and Regulatory Support Elections More than 1 by-election required outwith standard election cycle. Outwith direct management control. 4 60 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 50 3 50 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 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 30 3 30 Executive Director Douglas Hendry Legal and Regulatory Support Children's Panel Increased number of referrals increasing costs through increases in the running costs. Maximise the use of council facilities/resources for panel session in the first instance. 1 10 1 10 Executive Director Douglas Hendry Legal and Regulatory Support Legal Services Failure to minimise Council wide use of external legal advice. Ensure legal services are gateway to access all legal advice. 1 10 1 10 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 2 100 Executive Director Kirsty Flanagan Customer Support Services Additional Bandwidth for Education Additional costs required to be incurred in relation to additional bandwidth required to deliver the Education Digital Strategy due to a more digitalised learning curriculum. Work closely with Education on Digital Devices for All strategy to ensure necessary IT is in place. 3 50 3 50 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 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 3 100 Executive Director Kirsty Flanagan Development and Economic Growth Planning Fee Penalties Potential that the Scottish Government may 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 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. 3 100 3 100 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 1 50 Page 73
Page 74
DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Executive Director Kirsty Flanagan Development and Economic Growth Environmental Health- export certificates Downturn in requests for export certificates as a result of UK withdrawal from EU, changes to international trading agreements or business economy. Reduction in demand creates a budget pressure on environmental health budget. Monitor income and resources required for export health certificates / attestations required to support the export market. Continue with food safety regulation activities associated and support at 3rd country audits. Pursue debt rigorously with key customers through seeking regular payments. 2 40 2 40 Executive Director Kirsty Flanagan Development and Economic Growth Animal Health Carrying out livestock seizure to protect welfare of the animals Monitor activity and seek to recover costs from the disposal of the animals. 1 10 1 10 Executive Director Kirsty Flanagan Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. This is in relation to historical debt that has accumulated over many years therefore any adverse collection rates will impact on the year end debt provision as opposed to the in-year financial position, hence no forecast variance has been reported within the current year. Robust monitoring of arrangements with debt collection agency and performance against target collection rates. 3 345 3 345 Executive Director Kirsty Flanagan Financial Services NDR Aleo Baseline Scottish Government are going to undertake a review 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 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 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 3 85 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Maintenance - Roads, Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of road access, bridges, culverts, road or sea defence. Routine inspections to deal with potential weak areas - based on a stitch in time repair regime. 3 1,500 3 1,500 Executive Director Kirsty Flanagan Roads and Infrastructure Services Waste PPP - Indexation Historical payments made towards Waste PPP based on indexation rates have been challenged by Renewi resulting in a potential cost to the council. Conversations are in place between Council and Renewi with the aim of minimising the potential impact. 3 586 3 586 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 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 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. 3 200 3 200 Executive Director Kirsty Flanagan Roads and Infrastructure Services Waste - Compost Like Output (CLO) Compost Like Output is an element of waste that has been heat treated and can only be used for landfill site restoration. Renewi are currently producing more CLO than we need and it is building up in our landfill sites - this has been flagged up as a concern by SEPA and will need to be removed. Discussions ongoing with Renewi and the Council on steps forward and what element the council is responsible for. 3 311 3 311 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 3 150 Page 74
Page 75
DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 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 3 100 Executive Director Kirsty Flanagan Roads and Infrastructure Services Ferry Services Grant from Transport Scotland covers the cost of running the ferry services within Argyll and Bute which has not been increased for 2024-25 which could result in additional costs for the Council to fund the Ferry services. Closely monitoring financial position throughout the year to highlight any potential pressures. Discussions will continue to take place with Transport Scotland on an annual basis to request additional funding that is required for that year. 3 100 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 4 100 42 6,693 42 6,693 Page 75
Page 76
ARGYLL AND BUTE COUNCIL POLICY & RESOURCE COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 CAPITAL BUDGET MONITORING REPORT – 31 DECEMBER 2024 1.0 EXECUTIVE SUMMARY 1.1 1.2 This report provides an update on financial performance and the delivery of capital projects against the approved Capital Plan budget resources and timescales as at 31 December 2024. A number of budget changes are proposed to reflect additional funding, the re- profiling of expenditure and income across years, and to manage delivery of the Capital Plan within available resources. 1.3 Financial Position: • 2024-25 Forecast Outturn – Forecast net expenditure for the financial year is £29.333m, compared to a profiled annual budget of £37.615m, giving rise to a forecast underspend for the year of £8.282m (22.02%). Actual net expenditure of £23.679m has been incurred in the year to date, representing 81% of the net expenditure forecast for the year. • Total Capital Plan Forecast Outturn – Forecast outturn net expenditure on the total Capital Plan is £203.116m, compared to a budget of £202.999m, giving rise to a forecast overspend for the overall Capital Plan of £0.117m (0.06%). 1.4 Capital Plan Delivery: • Asset Sustainability – Of the 87 projects, there are currently 78 projects (90%) on track, 6 projects (7%) off track but recoverable and 3 projects (3%) off track. • Service Development - Of the 43 projects, there are currently 41 projects (95%) on track, 1 project (2%) off track but recoverable and 1 project (2%) off track. • Strategic Change – Of the 23 projects, there are currently 20 projects (87%) on track and 3 projects (13%) off track. 1.5 A number of known risks, specifically related to the delivery of the Capital Plan, are documented within this report. These risks may impact the delivery of the plan within available resources and target timescales. The monitoring and review of risks will continue to be undertaken on an ongoing basis. Page 76
Page 77
ARGYLL AND BUTE COUNCIL POLICY & RESOURCE COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 CAPITAL BUDGET MONITORING REPORT – 31 DECEMBER 2024 2.0 INTRODUCTION 2.1 2.2 This monitoring report provides an update on financial performance and the delivery of capital projects against the approved Capital Plan budget resources and timescales as at 31 December 2024. It compares the forecast outturn for both the current year and the total plan across all years, with the approved budget for each service and provides a profile of the probable outturn over the years. Details of actual expenditure incurred during 2024-25 to date are also provided. 3.0 RECOMMENDATIONS 3.1 4.0 4.1 4.2 4.3 It is recommended that the Policy and Resources Committee note the contents of this report and approve the proposed changes to the Capital Plan, as detailed within Appendix 1. BUDGET CHANGES Previously Approved Budget Changes Following the decision at Policy and Resources Committee on 9 December 2021, the Rothesay Pavilion project was put on pause, whilst potential funding options were being considered. At the budget meeting in February 2023, additional funding was allocated to this project, which will allow the project to progress towards successful delivery, by supporting completion of certain work stages. Further funding was allocated at the budget meeting in February 2024 for stages 2 and 3 to complete the project. The financial information included within this report now includes amounts relating to Phase 1, 2 and 3 of the Rothesay Pavilion project. Surveys have been completed in the council’s Learning Estates in relation to RAAC, with only 1 building confirmed as having it present, with steps underway for its removal. This will include a decant of the students for approximately 9 months, in addition to total removal and replacement of the roof during 2024. Funding of £3m was allocated as part of the 2024-25 budget setting process. Further, additional funding of £0.406m has been allocated via the Capital Contract Increase Fund to meet the now increased contract costs. These spending commitments are reflected within the Capital Plan. The council’s funding bid to the Scottish Government’s Learning Estate Investment Programme (LEIP) for a new school campus on Mull was successful. At its meeting in April 2024, Council agreed to commence the Business Case, undertake engagement, commence site selection processes and establish governance arrangements. The current Capital Plan does not provide for the potential delivery of a new school, beyond this early planning stage. Any future spending commitments and funding frameworks in this respect will be subject to Council approval and will be built into the Capital Plan at that point. Page 77
Page 78
4.4 4.5 4.6 Proposed Budget Changes The table below shows proposed changes to Capital Plan gross expenditure, at summary level, which include slippages, accelerations and virements. More detailed explanations at specific project level are provided within Appendix 1. Department Previously Agreed Changes 2024-25 2024-25 2025-26 2026-27 Future Years Total Capital Plan £’000 £’000 £’000 £’000 £’000 £’000 Asset Sustainability 587 (906) 774 132 0 0 Service Development 3,144 (60) 60 0 0 0 Strategic Change (1,119) (7,400) 3,156 4,244 0 0 Total 2,612 (8,366) 3,990 4,376 0 0 Service: ICT 0 (192) 60 132 0 0 Education 520 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 Health & Social Care Partnership (249) (363) 363 0 0 0 Shared Offices (815) (256) 256 0 0 0 Roads & Infrastructure 3,144 (6,811) 2,567 4,244 0 0 Development & Economic Growth 12 0 0 0 0 0 Major Projects 0 (744) 744 0 0 0 Total 2,612 (8,366) 3,990 4,376 0 0 The updated Capital Plan gross expenditure, incorporating these proposed changes, is given is given within Appendix 2. The Capital Plan has various sources of funding, as detailed in Appendix 3. Since last reporting, additional funding has been recognised in respect of Crown Estates Funding for East Clyde Street and the Harbour Investment Programme (debt financing costs to be funded from additional revenue income, over the life of the project - Prudential Borrowing) and allocation of Inward Investment funding to Rural Growth Deal projects. Various funding streams have also been added to the Rothesay Pavilion Project: Council Reserves, Heritage Lottery Fund, Historic Environment Scotland, Highlands and Islands Enterprises and Rural Growth Deal. Page 78
Page 79
5.0 SUMMARY FINANCIAL POSITION Forecast Outturn 2024-25 5.1 5.2 Forecast net expenditure for the full financial year is £29.3334m, compared to a profiled annual budget of £37.615m, giving rise to a forecast underspend for the year of £8.282m (22.02%). Actual net expenditure of £23.679m has been incurred in the year to date, representing 81% of the net expenditure forecast for the year. The table below provides details of the actual net expenditure incurred in the year to date, and provides a comparison of the forecast net expenditure with the profiled budget for the year, by project type and across services. There are a number of smaller variances, individually less than £50k, contributing to the total variance, while material variances are explained in Appendix 4. Project Type: Profiled Annual Budget £'000 Actual Year To Date £'000 Forecast Outturn £'000 Variance £'000 Asset Sustainability 26,937 17,916 26,078 859 Service Development 6,613 1,430 6,590 23 Strategic Change 4,065 4,333 (3,335) 7,400 Total 37,615 23,679 29,333 8,282 Service: ICT 1,611 954 1,419 192 Education 8,565 5,785 8,565 0 Live Argyll 1,125 931 1,125 0 Health & Social Care Partnership 2,086 2,216 1,723 363 Shared Offices 1,408 319 1,152 256 Roads & Infrastructure 20,168 9,795 13,441 6,727 Development & Economic Growth 2,892 607 2,892 0 CHORD (240) 3,072 (984) 744 Total 37,615 23,679 29,333 8,282 Page 79
Page 80
5.3 5.4 Forecast Outturn – Total Capital Plan The forecast outturn net expenditure on the total Capital Plan is £203.116m, compared to a budget of £202.999m, giving rise to a forecast overspend for the overall Capital Plan of £0.117m (0.06%). The table below shows the forecast net expenditure and budget for the Capital Plan by project type and service. The table below provides a comparison of the forecast net expenditure with the total Capital Plan budget, by project type and across services. The variance comprises a number of variances across specific projects, individually less than £50k. 5.5 5.6 Project Type: Capital Plan Budget £'000 Forecast Outturn £'000 Variance £'000 Asset Sustainability 52,814 52,928 (114) Service Development 28,816 28,793 23 Strategic Change 121,369 121,395 (26) Total 194,140 194,257 (117) Service: ICT 5,934 5,934 0 Education 44,166 44,166 0 Live Argyll 3,037 3,037 0 Health & Social Care Partnership 3,936 3,936 0 Shared Offices 18,393 18,393 0 Roads & Infrastructure 61,256 61,347 (91) Development & Economic Growth 7,449 7,449 0 CHORD 58,828 58,828 (26) Total 202,999 203,116 (117) Strategic Change Projects Detailed information in respect of the Strategic Change Projects within the Capital Plan is provided within Appendix 5. For each project, this gives details of the forecast cost against the approved budget; the start and anticipated completion date; and an assessment of risk, using a RAG status. Where the RAG status of a project is not Green, an explanation is provided. Summary Capital Plan Monitoring – Net Expenditure Details of the council’s financial performance in respect the approved Capital Plan net expenditure are outlined within Appendix 6. This provides information for each Executive Directorate and at a total council level. Page 80
Page 81
6.0 CAPITAL PLAN DELIVERY 6.1 There are a total of 153 projects within the overall Capital Plan. Of this total, 139 are Complete or On Target, 7 are Off Target and Recoverable and 7 are Off Track and experiencing Problems. 6.2 The table below provides a summary of the delivery status of the projects within the Capital Plan by project type and across services. Project Delivery Status Summary Table Project Type: Complete/ On Target Off Target/ Recoverable Off Track/ Problem Total Asset Sustainability 78 6 3 87 Service Development 41 1 1 43 Strategic Change 20 0 3 23 Total 139 7 7 153 Service: ICT 3 0 1 4 Education 27 0 0 27 Live Argyll 16 0 0 16 Health & Social Care Partnership 18 0 2 20 Shared Offices 19 0 1 20 Roads & Infrastructure 33 7 2 42 Development & Economic Growth 18 0 0 18 CHORD 5 0 1 6 Total 139 7 7 153 Page 81
Page 82
6.3 The above summary is also provided in graphical form, as presented below. Project Delivery Status Summary Graph 0 10 20 30 40 50 60 70 80 90 100 Asset Sustainability Service Development Strategic Change Off Target/ Problem Off Target/ Recoverable Complete/ On Target Page 82
Page 83
6.4 Details of the projects currently designated as ‘Off Track’ are summarised in the table below. Off Track Projects Summary Table Project Type Project Title What is Off Track? Explanation CustSupp - Service Development Applications Projects Current Year Expenditure Slippage from 2024-25 into 2025-26. Budget not required for current year projects. Slipped and vired to Block Allocation to contribute towards 2025-26 Red Risks. PropNonEdu - Asset Sust - HSCP Struan Lodge Current Year Expenditure Slippage into 2025-26. Project which was planned to commence and finish in 2024-25 is now forecast to start in March 2025. PropNonEdu - Asset Sust - HSCP Tigh An Rudha HFE Current Year Expenditure Accelerate into 2024-25 from 2025-26. Block allocation accelerated from 2025-26. RIS - Asset Sustainability Bute Sea Wall Repairs Current Year Expenditure Slippage into 2025-26. Portion of costs falling out of 2024-25 due to works forecast to start in Q4 of 2024-25. RIS - Strategic Change Harbour Investment Programme Current Year Expenditure Slippage from 2024-25 into 2025-26. Commencement of Iona Breakwater construction was delayed, less of the forecasted costs will fall within 2024-25 and has slipped into 2025-26. Shrd-Off - Strategic Change Net Zero Current Year Expenditure Slippage from 2024-25 into 2025-26. Projects now identified and expenditure will take place in 2025-26. CHORD Kilmory Business Park Phase 2AA Current Year Expenditure Slippage from 2024-25 into 2025-26. Cost plan now received from contractor with agreed monthly cashflow projection allowing for accurate budget forecasting which was not possible while awaiting this agreement. Page 83
Page 84
7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 CAPITAL PLAN RISKS The council’s funding bid to the Scottish Government’s Learning Estate Investment Programme (LEIP) for a new school campus on Mull was successful. While this is good news and will provide welcome investment in the school estate, it will not meet the full cost of the project. The funding gap requires to be met by the council and presents a financial pressure. The Scottish Government will fund up to 50% of eligible costs, with the balance of circa. £20m to be funded by the council. A £1m cost pressure was identified during 2021-22 in relation to repairs to the A884 Ardbeg Sea Wall, where severe storm damage resulted in failure of the sea wall on Bute. Emergency works were carried out and a permanent solution is currently being developed. Additional funding of £1m was allocated for this purpose at the Council meeting on 24 February 2022, however, there remains a risk that costs will exceed this. A feasibility study is currently underway to progress the permanent works and estimated costs and a further report on this will be presented in due course. The impact of the pandemic, the UK exit from the European Union, the Russian invasion of Ukraine and sanctions on Russian owned entities has seen significant price increases as well as disruptions to the supply chain and longer lead in times. The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all have an effect on the overall contract price and make it extremely challenging to manage expenditure and the availability of supply. As a result of this it should be noted that there are likely to be other significant financial impacts which are not quantifiable at this stage, as follows: • Harbour Investment Programme – likely to be contractual cost increases in future years (expected to be funded from increased fees and charges). • In general, capital contracts across the programme are seeing significant price increases. Although the direct impact of COVID on most local services has reduced, or even ceased altogether over the last 12 months, COVID-19 in conjunction with the UK exit from the European Union and the Russian invasion of Ukraine, continues to affect worldwide supply chains. In recent years additional funding of £11.100m has been allocated to the capital programme to deal with these cost pressures, which has mitigated the impact to date. However, as detailed in the table below, this has now been fully allocated or committed to projects facing inflationary pressures. There remains a financial risk in respect of projects, where contracts have yet to be entered into. Funding for Capital Inflationary Pressures £m COVID-19 Funding 0.257 February 2021 Budget Meeting - Capital Cost Pressures 4.646 February 2022 Budget Meeting - Capital Cost Pressures 3.900 February 2023 Budget Meeting – Capital Projects Inflation Pressures 2.000 February 2024 Budget Meeting - Capital Cost Project Protection 0.297 Total Additional Funding Allocated to Capital 11.100 Allocated to Projects within Capital Programme (5.779) Committed for future years (5.202) Balance Remaining 0.000 The approved Capital Plan includes an assumed level of capital receipts from asset sales. It is currently anticipated that the target of £0.750m for the current financial year will be achieved. However, this is subject to changing market conditions. The level of receipts that may Page 84
Page 85
reasonably be achieved will be kept under review, to reflect changing market conditions and due diligence undertaken on asset condition. 8.0 IMPLICATIONS 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 Policy – Monitors progress against the Capital Plan. Financial – Monitors financial performance on delivery of the Capital Plan. Legal – Highlights where available funding may not address all Statutory and Regulatory requirements in relation to Health and Safety. HR – Available funding may have an impact on the sustainability of the Property Design Team and Infrastructure Design Team. Fairer Scotland Duty – None. 8.5.1 Equalities – protected characteristics – None. 8.5.2 Socio-economic Duty – None. 8.5.3 Islands – None. Climate Change – The Council is committed to addressing climate change via delivery of projects within the Capital Plan. Risk – There are risks to the delivery of the Capital Plan within available resources and delivery timescales and these continue to be monitored and reviewed, as outlined in the report. Customer Service – None. The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director / Section 95 Officer 13 February 2025 Policy Lead for Finance and Commercial Services – Councillor Ross Moreland APPENDICES: Appendix 1 – Proposed Capital Plan Changes Appendix 2 – Updated/Revised Capital Plan Appendix 3 – Capital Funding Appendix 4 – Forecast Outturn budget variance explanations Appendix 5 – Strategic Change Projects Appendix 6 - Summary Net Expenditure Monitoring (Overall and at Executive Director level) For further information contact: Carolyn Earl, Acting Head of Financial Services carolyn.earl@argyll-bute.gov.uk Page 85
Page 86
APPENDIX 1 – Changes to Capital Plan and Financial Impact OVERALL COST CHANGES Project 2024-25 £’000 2025-26 £’000 2026-27 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation Total Cost Changes 0 0 0 0 0 SLIPPAGES AND ACCELERATIONS Project 2024- 25 £’000 2025- 26 £’000 2026- 27 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation ICT Block Allocations (132) 132 Slip budget from 2024-25 into 2026-27 Slippage into 2026-27. Correct block allocation forecasting in line with PIP. No changes in spending plan but correction to capital monitoring. Applications Projects (60) 60 0 Slip budget from 2024-25 into 2025-26 Slippage into 2025-26. Budget not required for delivery of 2024-25 Application Projects. Vired into ICT Block Allocation to contribute towards identified red risks for 2025-26. Struan Lodge (566) 566 Slip budget from 2024-25 into 2025-26 Slippage into 2025-26. Project which was planned to commence and finish in 2024-25 is now forecast to start in March 2025. Tigh An Rudha HFE 203 (203) Accelerate budget from 2025-26 into 2024-25. Accelerate into 2024-25 from 2025-26. Block allocation accelerated from 2025-26. Bute Sea Wall Repairs (359) 359 0 Slip budget from 2024-25 into 2025-26 Slippage into 2025-26. Portion of costs falling out of 2024-25 due to works forecast to start in Q4 of 2024-25. Local Bridge Maintenance Fund (17) 17 0 Slip budget from 2024-25 into 2025-26 Minor slippage after reviewing monthly profile split. Claonaig Slip (30) 30 0 Slip budget from 2024-25 into 2025-26 Minor slippage after reviewing monthly profile split. Harbour Investment Programme PB (6,400) 2,156 4,244 0 Slip Budget from 2024-25 into future years. Delays in Iona Breakwater commencing. Marine Licence was not received in Q1/Q2 as anticipated. Marine Licence now received though costs slipping out of 2024-25 due to these delays. Page 86
Page 87
Net Zero (256) 256 Slip budget from 2024-25 into 2025-26 Slippage from 2024-25 into 2025-26. Projects now identified and expenditure will take place in 2025-26. Kilmory Business Park Phase 2AA (744) 744 Slip budget from 2024-25 into 2025-26 Slippage from 2024-25 into 2025-26. Cost plan now received from contractor with agreed monthly cashflow projection allowing for accurate budget forecasting which was not possible while awaiting this agreement. Total Slippages and Accelerations (8,361) 3,985 4,376 0 0 Net Impact of Changes (8,361) 3,985 4,376 0 0 Page 87
Page 88
CAPITAL PLAN 2024-25 APPENDIX 2 Overall Summary Service Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Education 38,545 8,690 2,946 1,988 0 52,169 Shared Offices 13,242 1,529 3,681 667 0 19,119 ICT 2,851 1,419 1,281 820 0 6,371 RIS 38,918 40,516 48,474 39,110 30,000 212,813 DEG 19,251 7,057 941 0 0 27,249 HSCP 1,246 3,164 2,084 0 0 6,494 Live Argyll 1,275 1,125 169 468 0 3,037 CHORD 65,713 4,324 10,857 10,000 0 90,894 Overall Total 181,041 67,824 70,433 53,053 30,000 418,146 Page 88
Page 89
CAPITAL PLAN 2024-25 APPENDIX 2 Education Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Education Block Allocation - Education 0 278 0 1,988 0 2,266 Digital Inclusion 20-21 0 9 0 0 0 9 Free School Meals 0 0 434 0 0 434 Pre-5's/Nurseries 0 0 0 0 0 0 Preliminary RAAC Investigation 0 3,200 1,006 0 0 4,206 Primary Schools 0 3,013 1,280 0 0 4,293 Secondary Schools 0 1,086 226 0 0 1,312 Asset Sustainability Total 0 7,586 2,946 1,988 0 12,520 Service Development Education Bowmore Primary School - Gaelic Medium Grant 0 38 0 0 0 38 Bowmore Primary School - Pre Five Unit 149 0 0 0 0 149 Clyde Cottage - 600 hours provision 556 0 0 0 0 556 CO2 Monitoring - Covid Mitigation in Schools 79 113 0 0 0 192 Craignish Primary School - Pre Five Extension (600 hours funding) 400 0 0 0 0 400 Early Learning and Childcare 850 0 0 0 0 850 Early Learning and Childcare - 1140 Hours 7,774 243 0 0 0 8,017 Early Learning and Childcare - 1140 Hours - CFCR 1,379 0 0 0 0 1,379 Iona Primary School - Pre Five Unit (600 hours funding) 490 0 0 0 0 490 Islay High & Rosneath PS Pitches 719 0 0 0 0 719 Sandbank Gaelic Pre Five Unit 491 0 0 0 0 491 Service Development Total 12,887 394 0 0 0 13,281 Strategic Change Education Campbeltown Schools Redevelopment 2,092 38 0 0 0 2,130 Dunoon Primary School 10,637 232 0 0 0 10,869 Kirn Primary School 10,085 34 0 0 0 10,119 Replacement of Oban High School 2,844 406 0 0 0 3,250 Strategic Change Total 25,658 710 0 0 0 26,368 Overall Total 38,545 8,690 2,946 1,988 0 52,169 Page 89
Page 90
CAPITAL PLAN 2024-25 APPENDIX 2 Shared Office Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Shared Offices 52 Sinclair Street Flats - CFCR 0 0 0 0 0 0 Block Allocation 0 259 427 382 0 1,068 Burnett Building 0 107 0 0 0 107 Helensburgh and Lomond Civic Centre 0 178 0 0 0 178 Kilmory Castle 0 0 1,545 0 0 1,545 Legionella Control Works 0 12 0 0 0 12 Our Modern Workspace 0 542 0 0 0 542 Asset Sustainability Total 0 1,104 2,362 382 0 3,848 Strategic Change Shared Offices Campbeltown Office Rationalisation 595 1 0 0 0 596 Clean Energy - NDEEF1 1,109 124 208 0 0 1,441 Clean Energy - NDEEF2 0 0 855 285 0 1,140 Helensburgh Office Rationalisation (FPB,REC) 11,538 300 0 0 0 11,838 Net Zero 0 0 256 0 0 256 Strategic Change Total 13,242 425 1,319 285 0 15,271 Overall Total 13,242 1,529 3,681 667 0 19,119 Page 90
Page 91
CAPITAL PLAN 2024-25 APPENDIX 2 ICT Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability ICT Block Allocation - ICT 0 0 0 820 0 820 PC Replacement 0 561 669 0 0 1,230 Server Sustainability 0 488 400 0 0 888 Telecomms Network 0 88 152 0 0 240 Asset Sustainability Total 0 1,137 1,221 820 0 3,178 Service Development ICT Applications Projects 2,851 282 60 0 0 3,193 Service Development Total 2,851 282 60 0 0 3,193 Overall Total 2,851 1,419 1,281 820 0 6,371 Page 91
Page 92
CAPITAL PLAN 2024-25 APPENDIX 2 Roads and Infrastructure Services Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability RIS Block Allocation 0 0 -222 3,823 0 3,601 Bridge Strengthening 0 136 1,498 0 0 1,634 Bute Sea Wall Repairs 0 274 359 0 0 633 Claonaig Landslip 0 1,570 30 0 0 1,600 Coastal Change Adaptation 0 255 299 0 0 554 Coastal Protection 0 196 500 0 0 696 Environmental Projects 0 721 100 0 0 821 EV Quick Chargers 0 52 0 0 0 52 Flood Prevention 0 1,197 500 0 0 1,697 Footway Improvements 0 219 0 0 0 219 Gartbreck - Capping 0 194 0 0 0 194 Glengorm - Cell and Transfer Station (PB) 0 249 0 0 0 249 Helensburgh CHORD - Signage etc 0 10 0 0 0 10 Helensburgh Flood Mitigation 0 0 427 0 0 427 Investment in Active Travel 0 200 0 0 0 200 Lighting 0 325 369 0 0 694 Local Bridge Maintenance Fund 0 213 4,777 0 0 4,990 Play Park Renewal 0 547 391 0 0 938 POPs Waste 0 86 0 0 0 86 Public Convenience Upgrades 0 118 109 0 0 227 Roads Reconstruction 0 8,043 2,000 0 0 10,043 Roads Reconstruction - Helensburgh CHORD 0 47 0 0 0 47 Roads Reconstruction - Oban CHORD 0 3 0 0 0 3 Tobermory Car Park 0 96 0 0 0 96 Asset Sustainability Total 0 14,751 11,137 3,823 0 29,711 Service Development RIS Campbeltown Old Quay 1,381 0 0 0 0 1,381 Fleet Management 4,502 258 0 0 0 4,760 Fleet Management - Prudential Borrowing 2,674 2,152 500 0 0 5,326 Jackson's Quarry Refurbishment 285 0 0 0 0 285 Lismore Ferry Replacement 637 35 0 0 0 672 Lochgilphead Depot Rationalisation 154 115 0 0 0 269 Oban Bus Congestion - Bus Partnership Fund 50 0 0 0 0 50 Oban Depot Development 2,224 -35 0 0 0 2,189 Preliminary design for Regional Transport projects (tif) 205 16 0 0 0 221 Public Transport Operation Vehicles 0 233 0 0 0 233 Weather Incident 326 3,208 1,100 0 0 4,634 Witchburn Road Demolition 158 0 0 0 0 158 Service Development Total 12,596 5,992 1,600 0 0 20,188 Strategic Change RIS Campbeltown Flood Scheme 13,748 1,780 10 387 0 15,925 Harbour Investment Programme Non PB 0 43 0 0 0 43 Page 92
Page 93
Strategic Change RIS Harbour Investment Programme PB 9,295 17,650 35,406 34,900 30,000 143,046 Street Lighting LED Replacement 3,279 300 321 0 0 3,900 Strategic Change Total 26,322 19,773 35,737 35,287 30,000 162,914 Overall Total 38,918 40,516 48,474 39,110 30,000 212,813 Page 93
Page 94
CAPITAL PLAN 2024-25 APPENDIX 2 Development and Economic Growth Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Service Development DEG Albert Pier Demolition - Crown Estate Funding 0 0 0 0 0 0 Ardrishaig North Active Travel 831 49 0 0 0 880 Arinagour, Coll - Site Investigation and Preliminary development Consultancy Services0 90 0 0 0 90 Cycleways - H&L (FSPT) 2,905 497 0 0 0 3,402 Dunoon Cycle Bothy 483 179 0 0 0 662 Dunoon STEM Hub 131 2,427 0 0 0 2,558 Gibraltar Street Public Realm Improvements 153 97 0 0 0 250 Glenmorag Car Park PC 0 4 0 0 0 4 Helensburgh Public Realm - Arts Strategy Fund 3 25 25 0 0 53 Hermitage Park 3,362 26 0 0 0 3,388 Nature Restoration Fund 0 835 234 0 0 1,069 Rural Growth Deal 239 1,080 0 0 0 1,319 Safe Streets, Walking and Cycling (CWSS) 3,143 619 395 0 0 4,157 SPT - bus infrastructure 1,405 25 0 0 0 1,430 Town Centre Funds 3,856 334 0 0 0 4,190 West Coast UAV Innovation Logistics and Training Hub 0 0 0 0 0 0 Service Development Total 16,511 6,287 654 0 0 23,452 Strategic Change DEG 01 TIF - Lorn/Kirk Road 2,169 1 0 0 0 2,170 09 TIF - Oban Airport Business Park 505 482 0 0 0 987 TIF - Halfway House Roundabout 66 287 287 0 0 640 Strategic Change Total 2,740 770 287 0 0 3,797 Overall Total 19,251 7,057 941 0 0 27,249 Page 94
Page 95
CAPITAL PLAN 2024-25 APPENDIX 2 Health & Social Care Partnership Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability HSCP Ardfenaig 0 15 0 0 0 15 Capital Property Works 0 203 9 0 0 212 Eadar Glinn 0 34 25 0 0 59 Glencruitten Hostel 0 301 0 0 0 301 Greenwood/Woodlands 0 16 0 0 0 16 HSCP - 102 East King Street "Jean's Bothy" - Rewire - 23-240 4 0 0 0 4 Kintyre Care Home 0 47 673 0 0 720 Lorn Resource Centre 0 33 0 0 0 33 Shellach View 0 22 0 0 0 22 Struan Lodge Boiler 0 134 566 0 0 700 Thomson Home Rothesay 0 21 776 0 0 797 Tigh An Rudha HFE 0 2,280 35 0 0 2,315 Asset Sustainability Total 0 3,110 2,084 0 0 5,194 Service Development HSCP Dunclutha Childrens Home 1,246 54 0 0 0 1,300 Service Development Total 1,246 54 0 0 0 1,300 Overall Total 1,246 3,164 2,084 0 0 6,494 Page 95
Page 96
CAPITAL PLAN 2024-25 APPENDIX 2 Live Argyll Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Asset Sustainability Live Argyll Aqualibrium 0 63 104 0 0 167 Capital Property Works 0 12 0 382 0 394 Corran Halls Gaelic Centre 0 19 0 86 0 105 Kintyre Community Education Centre 0 7 0 0 0 7 Lochgilphead Community Ed Centre 0 411 0 0 0 411 Riverside Leisure Centre - Health Suite Upgrade 0 140 0 0 0 140 Rothesay Swimming Pool 0 24 65 0 0 89 The Moat Centre 0 393 0 0 0 393 Victoria Halls, Helensburgh 0 31 0 0 0 31 Asset Sustainability Total 0 1,104 169 468 0 1,741 Service Development Live Argyll Riverside Leisure Centre Refurbishment 1,246 0 0 0 0 1,246 Service Development Total 1,246 0 0 0 0 1,246 Strategic Change Live Argyll Carbon Management 29 21 0 0 0 50 Strategic Change Total 29 21 0 0 0 50 Overall Total 1,275 1,125 169 468 0 3,037 Page 96
Page 97
CAPITAL PLAN 2024-25 APPENDIX 2 Major Projects Category Service Project Previous Years £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s 2027-28 £000s Total £000s Strategic Change CHORD CHORD - Dunoon 12,499 23 0 0 0 12,522 CHORD - Helensburgh -Public Realm Imprv 0 25 0 0 0 25 CHORD - Oban 7,326 500 79 0 0 7,905 CHORD - Rothesay 21,401 3,170 10,000 10,000 0 44,571 Helensburgh Waterfront Development 24,111 281 0 0 0 24,392 HWD - FFE 316 34 0 0 0 350 Kilmory Business Park Phase 2AA 60 291 778 0 0 1,129 Strategic Change Total 65,713 4,324 10,857 10,000 0 90,894 Overall Total 65,713 4,324 10,857 10,000 0 90,894 Page 97
Page 98
CAPITAL PROGRAMME FUNDING Appendix 3 Estimated Capital Funding Carry Forwards from 23-24 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 23- 24 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 23-24 Slippage / Acceleration Additional Funding Updated Capital Funding Available General Capital Grant 9,042 0 0 234 9,276 9,069 0 0 395 9,464 8,834 0 0 0 8,834 Capital Grant - Area Control Accounts 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Transfer to Revenue for Private Sector Housing Grant (PSHG) -1,033 0 0 0 -1,033 -1,033 0 0 0 -1,033 -1,033 0 0 0 -1,033 Capital Receipts 750 -138 0 0 612 750 0 0 0 750 400 0 0 0 400 Flooding Allocation 156 0 0 0 156 156 0 0 0 156 0 0 0 0 0 Ring Fenced Capital Grant 379 0 0 0 379 618 0 0 0 618 0 0 0 0 0 Restricted Funding 2,553 5,140 80 1,381 9,154 84 7,223 -80 3,389 10,616 0 0 0 0 0 Restricted Funding - Rural Growth Deal 0 0 0 0 0 0 0 0 4,000 4,000 0 0 0 5,000 5,000 Funded by Reserves 10,061 3,898 -1,598 1,956 14,317 1,412 -92 35 3,734 5,089 300 -324 132 5,000 5,108 Additional Funding from Revenue 0 0 0 4 4 0 0 0 260 260 0 0 0 0 0 Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Harbour Investment Programme 24,110 -60 -6,400 0 17,650 39,000 -5,750 2,156 0 35,406 17,585 7,112 4,244 5,959 34,900 Prudential Borrowing 17,567 -2,890 -831 3,085 16,931 166 1,600 2,007 1,334 5,107 38 -479 285 0 -156 Loans Fund Review 431 0 0 0 431 0 0 0 0 0 0 0 0 0 0 COVID Funding 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 64,016 5,950 -8,749 6,660 67,877 50,222 2,981 4,118 13,112 70,433 26,124 6,309 4,661 15,959 53,053 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2024-25 2025-26 2026-27 2027-28 2028-29 Reported Source Capital Contract Increase Fund 706 28 June - 2024-25 Restricted Funds Transport Scotland Active Travel 395 June - 2024-25 Scottish Government Nature Restoration Fund 234 June - 2024-25 Scottish Government Strategic Housing Fund Contribution 250 June - 2024-25 Restricted Funds Inward Investment Fund allocation to RGD Projects 16 June - 2024-25 Restricted Funds Revenue Contribution 4 June - 2024-25 Revenue Weather Event - reserves funded 2,922 1,100 July - 2024-25 Earmarked Reserves Islands Fund, PBI, Crown Estates allocation to RGD Projects 800 July - 2024-25 Restricted Funds RAAC Investigation 406 July - 2024-25 Earmarked Reserves Strategic Housing Fund Contribution 74 Aug - 2024-25 Restricted Funds Priority Investment Fund 186 Aug - 2024-25 Reserves Reserves - Gartbreck 250 Aug - 2024-25 Reserves Waitrose S75 funding - RGD Projects 4 Sept - 2024-25 Restricted Funds Strategic Housing Fund Contribution 16 Sept - 2024-25 Restricted Funds Capital Contract Increase Fund 255 Sept - 2024-25 Earmarked Reserves TIF - Borrowing paid from NDR 397 Oct - 2024-25 TIF CWSR - Dunoon Cycle Bothy 99 Oct - 2024-25 Restricted Funds Islands Fund 157 Oct - 2024-25 Restricted Funds HSCP Revenue contribution 260 Oct - 2024-25 Revenue Coastal Change Adaptation 108 142 Nov - 2024-25 Scottish Government 5-7 East Clyde Street - Crown Estate 6 390 Nov - 2024-25 Restricted Funds Harbour Investment Programme 5,959 30,000 15,795 Nov-2024-25 Prudential Borrowings Rothesay Marine Gateway - Inward Investment Fund 8 Dec- 2024-25 Restricted Funds Rothesay Pavilion 559 3,300 5,000 Dec- 2024-25 Earmarked Reserves Rothesay Pavilion - Heritage Lottery Fund 1,200 Dec- 2024-25 Restricted Funds Rothesay Pavilion - Historic Environment Scotland 500 Dec- 2024-25 Restricted Funds Rothesay Pavilion - Highlands and Islands Enterprise 1,000 Dec- 2024-25 Restricted Funds Rothesay Pavilion - Rural Growth Deal 4,000 5,000 Dec- 2024-25 Restricted Funds 6,660 13,112 15,959 30,000 15,795 2025-26 2026-272024-25 Page 98
Page 99
APPENDIX 4 – Outturn Variance Explanations Listed below are the projects where the current year variance is +/- £50k. Project Annual Budget £’000 Outturn £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Applications Projects 342 282 60 Slippage from 2024-25 into 2025-26. Budget not required for current year projects. Slipped and vired to Block Allocation to contribute towards 2025-26 Red Risks. Struan Lodge 700 134 566 Slippage into 2025-26. Project which was planned to commence and finish in 2024-25 is now forecast to start in March 2025. Tigh An Rudha HFE 2280 2483 (203) Accelerate into 2024-25 from 2025-26. Block allocation accelerated from 2025-26. Bute Sea Wall Repairs 633 274 359 Slippage into 2025-26. Portion of costs falling out of 2024-25 due to works forecast to start in Q4 of 2024-25. Harbour Investment Programme 24,050 17,650 6,400 Slippage from 2024-25 into 2025-26. Commencement of Iona Breakwater construction was delayed, less of the forecasted costs will fall within 2024-25 and has slipped into 2025-26. Net Zero 256 0 256 Slippage from 2024-25 into 2025-26. Projects now identified and expenditure will take place in 2025-26. Kilmory Business Park Phase 2AA 1035 291 744 Slippage from 2024-25 into 2025-26. Cost plan now received from contractor with agreed monthly cashflow projection allowing for accurate budget forecasting which was not possible while awaiting this agreement. Other variances under £50k (100) Total value of non-material variances less than +/-£50k. Total 8,282 Page 99
Page 100
Strategic Change Projects - Cumulative Spend, Start/Finish Dates and Project Risks APPENDIX 5 Strategic Change Projects Prior Years Spend £'000 Current Year Forecast £'000 Total Project Forecast £'000 Total Project Budget £'000 Project Start Date Estimated Completion Date Project Risks Identified Explanation Campbeltown Flood Scheme 13,748 1,780 15,925 15,925 01/08/2016 31/03/2025 Green CHORD Oban 7,326 500 7,905 7,905 27/10/2016 31/03/2026 Green Issues with contract close out impacting on timescales. CHORD Rothesay 21,401 3,170 44,571 44,571 01/05/2024 31/03/2025 Green Project recommenced and awaiting Rural Growth Deal acceptance. Harbour Investment Programme 9,295 17,693 143,089 143,089 01/04/2017 31/03/2028 Green Dunoon Primary 10,637 232 10,869 10,869 18/12/2014 30/04/2020 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Replacement of Oban High 2,844 406 3,250 3,250 24/04/2014 31/01/2019 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Clean Energy - NDEEF1 1,109 124 1,441 1,441 01/04/2021 31/03/2025 Green Slippage into 25-26 anticipated (and reported) with retentions likely to be payable in future financial years. Clean Energy - NDEEF2 0 0 1,140 1,140 01/04/2024 31/03/2027 Green Street Lighting LED Replacement 3,279 300 3,900 3,900 01/08/2016 31/12/2025 Green Tender for final package of works still to be awarded. Helensburgh Waterfront Development 24,111 281 24,392 24,392 01/04/2017 31/03/2025 Green Physically complete, retentions outstanding TIF - Halfway House Roundabout 66 287 640 640 tbc tbc Green Scope of project still to be determined - budget to be reprofiled. Kirn Primary School 10,085 34 10,119 10,119 24/04/2014 31/10/2017 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Helensburgh Office Rationalisation 11,538 300 11,838 11,838 25/04/2013 31/12/2022 Green Physically complete - project subject to legal dispute. CHORD Dunoon 12,499 23 12,522 12,522 03/02/2012 09/03/2018 Green Physically complete - negotiations with contractor regarding potential construction defect. Kilmory Business Park Phase 2AA 60 291 1,155 1,129 01/02/2022 01/09/2025 Green Development Agreement still to be concluded. Carbon Management - Non Education 29 21 50 50 01/04/2015 31/12/2025 Green Projects being determined. Campbeltown Office Rationalisation 595 1 596 596 01/02/2015 31/03/2019 Green Project complete in full - no further expenditure expected. TIF - Oban Airport Business Park 505 482 987 987 22/01/2015 31/12/2025 Green Campbeltown Schools Redevelopment 2,092 38 2,130 2,130 16/02/2012 30/11/2018 Green Physically complete - negotiations with contractor delaying payment of financial sums outstanding. CHORD - Helensburgh - Comet Works 0 25 25 25 01/04/2023 31/03/2025 Green Art project proposed for 24-25. TIF - Lorn/Kirk Road 2,169 1 2,170 2,170 22/01/2015 31/03/2021 Green Project complete in full - no further expenditure expected. Net Zero 0 0 256 256 01/04/2025 31/03/2026 Green Strategic Change Total 133,388 25,989 298,970 298,944 Project Risk Classifications: Green - Risks can be managed and are viewed as stable or reducing. Amber - Risks are increasing but are still manageable. Red - Risks are increasing or have increased to such an extent they may affect delivery of the project. Capital Expenditure Dates Risks Page 100
Page 101
ARGYLL AND BUTE COUNCIL - CAPITAL PLAN MONITORING REPORT - OVERALL COUNCIL Appendix 6 FINANCIAL SUMMARY - NET EXPENDITURE Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Forecast (Over)/Under Variance Budget 2025-26 (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Executive Director Douglas Hendry 9,165 9,164 1 13,290 12,927 363 23,326 23,326 0 Executive Director Kirsty Flanagan 8,876 8,918 (42) 16,431 15,935 496 32,889 33,003 (114) Asset Sustainability Total 18,041 18,082 (41) 29,721 28,862 859 56,215 56,329 (114) Service Development Projects Executive Director Douglas Hendry 87 87 0 448 448 0 15,827 15,827 0 Executive Director Kirsty Flanagan 3,124 3,119 5 12,621 12,598 23 46,833 46,810 23 Service Development Total 3,211 3,206 5 13,069 13,046 23 62,660 62,637 23 Strategic Change Projects Campbeltown Schools Redevelopment 0 0 0 38 38 0 2,130 2,130 0 Dunoon Primary 0 0 0 232 232 0 10,869 10,869 0 Replacement of Oban High 0 0 0 406 406 0 3,250 3,250 0 Kirn Primary School 0 0 0 34 34 0 10,119 10,119 0 Mull Joint Campus 0 0 0 0 0 0 0 0 0 Carbon Management - Non Education 0 0 0 21 21 0 50 50 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 300 300 0 11,838 11,838 0 Clean Energy - NDEEF1 0 0 0 124 124 0 1,441 1,441 0 Clean Energy - NDEEF2 0 0 0 0 0 0 1,140 1,140 0 Net Zero 0 0 0 256 0 256 256 256 0 Campbeltown Flood Scheme 1,217 1,217 0 1,780 1,780 0 15,925 15,925 0 Street Lighting LED Replacement 44 44 0 300 300 0 3,900 3,900 0 Harbour Investment Programme 5,669 5,669 0 24,050 17,650 6,400 143,046 143,046 0 Harbour Investment Programme Non - PB 0 0 0 43 43 0 43 43 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - Oban Airport Business Park 317 317 0 482 482 0 987 987 0 TIF - Halfway House Roundabout 0 0 0 287 287 0 640 640 0 CHORD - Helensburgh - Comet Works 0 0 0 25 25 0 25 25 0 CHORD Dunoon 0 0 0 23 23 0 12,522 12,522 0 CHORD Oban 0 0 0 500 500 0 7,905 7,905 0 CHORD Rothesay 2,749 2,749 0 3,170 3,170 0 44,571 44,571 0 Helensburgh Waterfront Development 121 127 (6) 281 281 0 24,392 24,392 0 HWD - FFE (Funded by LA) 0 0 0 34 34 0 350 350 0 Kilmory Business Park Phase 2AA 196 196 0 1,035 291 744 1,129 1,155 (26) Strategic Change Total 10,313 10,319 (6) 33,423 26,023 7,400 299,294 299,320 (26) Total Expenditure 31,565 31,607 (42) 76,213 67,931 8,282 418,169 418,286 (117) INCOME Asset Sustainability Executive Director Douglas Hendry 0 0 0 (1,966) (1,966) 0 (3,083) (3,083) 0 Executive Director Kirsty Flanagan (166) (166) 0 (818) (818) 0 (818) (818) 0 Asset Sustainability Total (166) (166) 0 (2,784) (2,784) 0 (3,901) (3,901) 0 Service Development Projects Executive Director Douglas Hendry 0 0 0 0 0 0 (7,741) (7,741) 0 Executive Director Kirsty Flanagan (1,776) (1,776) 0 (6,456) (6,456) 0 (25,603) (25,603) 0 Service Development Total (1,776) (1,776) 0 (6,456) (6,456) 0 (33,344) (33,344) 0 Strategic Change Projects Helensburgh Office Rationalisation 0 0 0 0 0 0 (349) (349) 0 Dunoon Primary 0 0 0 0 0 0 (137) (137) 0 Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (5,669) (5,669) 0 (24,050) (24,050) 0 (143,046) (143,046) 0 01 TIF - Lorn/Kirk Road (317) (317) 0 0 0 0 (2,057) (2,057) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (2,320) (2,320) 0 (7,979) (7,979) 0 HWD - FFE (Funded by LA) 0 0 0 0 0 0 (350) (350) 0 Rothesay CHORD 0 0 0 (2,009) (2,009) 0 (20,554) (20,554) 0 Kilmory Business Park Phase 2AA 0 0 0 (829) (829) 0 (829) (829) 0 Kilmory Business Park Phase 2AA - HIE 0 0 0 (150) (150) 0 (150) (150) 0 CHORD - Dunoon Waterfront 0 0 0 0 0 0 (10) (10) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Strategic Change Total (5,986) (5,986) 0 (29,358) (29,358) 0 (177,925) (177,925) 0 Total Income (7,928) (7,928) 0 (38,598) (38,598) 0 (215,170) (215,170) 0 Net Total 23,637 23,679 (42) 37,615 29,333 8,282 202,999 203,116 (117) Full Year This Financial Year Total Project Costs 31 December 2024 Page 101
Page 102
MONITORING REPORT Budget Actual Variance Budget Forecast Variance Budget Forecast Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Education 5,723 5,723 0 7,586 7,586 0 12,520 12,520 0 Live Argyll 931 931 0 1,104 1,104 0 1,741 1,741 0 Health and Social Care Partnership 2,192 2,191 1 3,473 3,110 363 5,194 5,194 0 Shared Offices 319 319 0 1,127 1,127 0 3,871 3,871 0 Asset Sustainability Total 9,165 9,164 1 13,290 12,927 363 23,326 23,326 0 Service Development Projects Bowmore Primary School - Pre 5 Unit 0 0 0 0 0 0 149 149 0 Clyde Cottage - 600 hour provision 0 0 0 0 0 0 556 556 0 Craignish Primary School - Pre 5 Extension 0 0 0 0 0 0 400 400 0 Iona Primary School - Pre 5 Unit 0 0 0 0 0 0 490 490 0 Islay High and Rosneath Primary School Pitches 0 0 0 0 0 0 719 719 0 Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 491 491 0 Early Learning and Childcare 0 0 0 0 0 0 850 850 0 Early Learning and Childcare - 1140 Hours 46 46 0 243 243 0 8,017 8,017 0 CO2 Monitoring - Covid Mitigation in Schools 0 0 0 113 113 0 192 192 0 Early Learning and Childcare - 1140 Hours - CFCR 0 0 0 0 0 0 1,379 1,379 0 Bowmore Primary School - Gaelic Medium Grant 16 16 0 38 38 0 38 38 0 Riverside Leisure Centre Refurbishment 0 0 0 0 0 0 1,246 1,246 0 Dunclutha Childrens Home 25 25 0 54 54 0 1,300 1,300 0 Service Development Total 87 87 0 448 448 0 15,827 15,827 0 Strategic Change Projects Campbeltown Schools Redevelopment 0 0 0 38 38 0 2,130 2,130 0 Dunoon Primary 0 0 0 232 232 0 10,869 10,869 0 Replacement of Oban High 0 0 0 406 406 0 3,250 3,250 0 Kirn Primary School 0 0 0 34 34 0 10,119 10,119 0 Mull Joint Campus 0 0 0 0 0 0 0 0 0 Carbon Management - Non Education 0 0 0 21 21 0 50 50 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 300 300 0 11,838 11,838 0 Clean Energy - NDEEF1 0 0 0 124 124 0 1,441 1,441 0 Clean Energy - NDEEF2 0 0 0 0 0 0 1,140 1,140 0 Net Zero 0 0 0 256 0 256 256 256 0 CHORD Oban 0 0 0 500 500 0 7,905 7,905 0 CHORD Rothesay 2,749 2,749 0 3,170 3,170 0 44,571 44,571 0 CHORD - Helensburgh - Comet Works 0 0 0 25 25 0 25 25 0 CHORD Dunoon 0 0 0 23 23 0 12,522 12,522 0 Helensburgh Waterfront Deveopment 121 127 (6) 281 281 0 24,392 24,392 0 HWD - FFE (Funded by LA) 0 0 0 34 34 0 350 350 0 Kilmory Business Park Phase 2AA 196 196 0 1,035 291 744 1,129 1,155 (26) Strategic Change Total 3,066 3,072 (6) 6,480 5,480 1,000 132,583 132,609 (26) Total Expenditure 12,318 12,323 (5) 20,218 18,855 1,363 171,736 171,762 (26) INCOME Asset Sustainability Education 0 0 0 (125) (125) 0 (125) (125) 0 Health and Social Care Partnership 0 0 0 (1,441) (1,441) 0 (2,558) (2,558) 0 Shared Offices 0 0 0 (400) (400) 0 (400) (400) 0 Asset Sustainability Total 0 0 0 (1,966) (1,966) 0 (3,083) (3,083) 0 Service Development Projects Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 (485) (485) 0 Early Learning and Childcare 0 0 0 0 0 0 (918) (918) 0 Early Years 1140 Hours 0 0 0 0 0 0 (6,300) (6,300) 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 0 0 0 (38) (38) 0 Service Development Total 0 0 0 0 0 0 (7,741) (7,741) 0 Strategic Change Helensburgh Office Rationalisation 0 0 0 0 0 0 (349) (349) 0 Dunoon Primary School 0 0 0 0 0 0 (137) (137) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (2,320) (2,320) 0 (7,979) (7,979) 0 HWD - FFE (Funded by LA) 0 0 0 0 0 0 (350) (350) 0 Rothesay CHORD 0 0 0 (2,009) (2,009) 0 (20,554) (20,554) 0 CHORD - Dunoon Waterfront 0 0 0 0 0 0 (10) (10) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Kilmory Business Park Phase 2AA 0 0 0 (829) (829) 0 (829) (829) 0 Kilmory Business Park Phase 2AA - HIE 0 0 0 (150) (150) 0 (150) (150) 0 Strategic Change Total 0 0 0 (5,308) (5,308) 0 (32,552) (32,552) 0 Total Income 0 0 0 (7,274) (7,274) 0 (43,376) (43,376) 0 Net Departmental Total 12,318 12,323 (5) 12,944 11,581 1,363 128,360 128,386 (26) 31 December 2024 Total Project CostsFull Year This Financial YearCurrent Financial Year To Date Appendix 6 FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR DOUGLAS HENDRY Page 102
Page 103
MONITORING REPORT Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Year End Forecast (Over)/Under Variance Budget Forecast (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Roads & Infrastructure Services 8,193 8,235 (42) 15,162 14,798 364 29,711 29,765 (54) Customer Support Services 683 683 0 1,269 1,137 132 3,178 3,238 (60) Asset Sustainability Total 8,876 8,918 (42) 16,431 15,935 496 32,889 33,003 (114) Service Development Projects Preliminary design for Regional Transport projects 0 0 0 16 16 0 221 221 0 Campbeltown Old Quay 0 0 0 0 0 0 1,381 1,381 0 Fleet Management - Prudential Borrowing 1,690 1,690 0 2,152 2,152 0 5,326 5,326 0 Fleet Management 0 0 0 258 258 0 4,760 4,760 0 Public Transport Operation Vehicles 233 233 0 233 233 0 233 233 0 Oban Bus Congestion - Bus Partnership Fund 0 0 0 0 0 0 50 50 0 Lismore Ferry 0 0 0 35 35 0 672 672 0 HITRANS Ferry Fund 0 0 0 0 0 0 0 0 0 Oban Depot Development Project 0 2 (2) (35) 2 (37) 2,189 2,226 (37) Lochgilphead Depot Rationalisation 115 163 (48) 115 115 0 269 269 0 Jackson's Quarry Refurbishment 0 0 0 0 0 0 285 285 0 Depot Rationalisation 0 0 0 10 10 0 10 10 0 Witchburn Road Demolition 0 0 0 0 0 0 158 158 0 Weather Incident October 2023 138 138 0 3,208 3,208 0 4,634 4,634 0 Safe Streets, Walking and Cycling (CWSS) 0 0 0 619 619 0 4,157 4,157 0 SPT - bus infrastructure 0 0 0 25 25 0 1,430 1,430 0 Cycleways - H&L (FSPT) 0 0 0 497 497 0 3,402 3,402 0 Helensburgh Public Realm - Arts Strategy Fund 0 0 0 25 25 0 53 53 0 Town Centre Funds 69 69 0 334 334 0 4,190 4,190 0 Rural Growth Deal 332 332 0 1,080 1,080 0 1,319 1,319 0 Dunoon Cycle Bothy 92 48 44 179 179 0 662 662 0 Dunoon STEM Hub 19 19 0 2,427 2,427 0 2,558 2,558 0 Ardrishaig North Active Travel 3 3 0 49 49 0 880 880 0 Nature Restoration Fund 0 0 0 835 835 0 1,069 1,069 0 Gibraltar Street Public Realm Improvements 57 57 0 97 97 0 250 250 0 Hermitage Park 0 0 0 26 26 0 3,388 3,388 0 Glenmorag Car Park 4 4 0 4 4 0 4 4 0 Applications Projects 282 271 11 342 282 60 3,193 3,133 60 Arinagour, Coll - Site Investigation and Preliminary development Consultancy Services90 90 0 90 90 0 90 90 0 Service Development Total 3,124 3,119 5 12,621 12,598 23 46,833 46,810 23 Strategic Change Projects Campbeltown Flood Scheme 1,217 1,217 0 1,780 1,780 0 15,925 15,925 0 Street Lighting LED Replacement 44 44 0 300 300 0 3,900 3,900 0 Harbour Investment Programme 5,669 5,669 0 24,050 17,650 6,400 143,046 143,046 0 Harbour Investment Programme - Non PB 0 0 0 43 43 0 43 43 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - Oban Airport Business Park 317 317 0 482 482 0 987 987 0 TIF - Halfway House Roundabout 0 0 0 287 287 0 640 640 0 Strategic Change Total 7,247 7,247 0 26,943 20,543 6,400 166,711 166,711 0 Total Expenditure 19,247 19,284 (37) 55,995 49,076 6,919 246,433 246,524 (91) INCOME Asset Sustainability Roads & Infrastructure Services (166) (166) 0 (818) (818) 0 (818) (818) 0 Asset Sustainability Total (166) (166) 0 (818) (818) 0 (818) (818) 0 Service Development Projects Applications Projects 0 0 0 0 0 0 (437) (437) 0 Safe Streets, Walking and Cycling 0 0 0 (376) (376) 0 (2,988) (2,988) 0 SPfT 0 0 0 (25) (25) 0 (1,268) (1,268) 0 Cycleways - H&L (FSPT) 0 0 0 (500) (500) 0 (3,502) (3,502) 0 Town Centre Funds 0 0 0 (512) (512) 0 (2,730) (2,730) 0 Rural Growth Deal (15) (15) 0 (400) (400) 0 (511) (511) 0 Dunoon STEM Hub 0 0 0 (2,050) (2,050) 0 (2,558) (2,558) 0 Ardrishaig North Active Travel 0 0 0 0 0 0 (50) (50) 0 Dunoon Cycle Bothy 0 0 0 (298) (298) 0 (563) (563) 0 Gibraltar Street Public Realm Improvements 0 0 0 0 0 0 (250) (250) 0 Hermitage Park 0 0 0 0 0 0 (3,319) (3,319) 0 Glenmorag Car Park 0 0 0 (4) (4) 0 (4) (4) 0 Fleet Management - PB (1,690) (1,690) 0 (2,152) (2,152) 0 (4,826) (4,826) 0 Fleet Management (40) (40) 0 (40) (40) 0 (89) (89) 0 Millpark Depot Demolition Insurance 0 0 0 0 0 0 (53) (53) 0 Oban Depot - Mill Park Insurance Claim 0 0 0 0 0 0 (1,681) (1,681) 0 Oban Depot - Revenue Contribution 0 0 0 (67) (67) 0 (67) (67) 0 Lismore Ferry 0 0 0 0 0 0 (500) (500) 0 Witchburn Road Demolition 0 0 0 0 0 0 (157) (157) 0 Oban Bus Congestion - Bus Partnership Fund (31) (31) 0 (32) (32) 0 (50) (50) 0 Service Development Total (1,776) (1,776) 0 (6,456) (6,456) 0 (25,603) (25,603) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (5,669) (5,669) 0 (24,050) (24,050) 0 (143,046) (143,046) 0 01 TIF - Lorn/Kirk Road (317) (317) 0 0 0 0 (2,057) (2,057) 0 Strategic Change Total (5,986) (5,986) 0 (24,050) (24,050) 0 (145,373) (145,373) 0 Total Income (7,928) (7,928) 0 (31,324) (31,324) 0 (171,794) (171,794) 0 Net Departmental Total 11,319 11,356 (37) 24,671 17,752 6,919 74,639 74,730 (91) 31 December 2024 Full Year This Financial Year Total Project Costs FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR KIRSTY FLANAGAN Appendix 6 Page 103
Page 104
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 RESERVES AND BALANCES – UPDATE AS AT 31 DECEMBER 2024 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to advise Members of the overall level of reserves held by the council, as well as providing detail on the monitoring of the earmarked balances held within the General Fund. 1.2 The council had a total of £400.319m unusable reserves as at 31 March 2024 that are not backed with resources. They are required purely for accounting purposes. 1.3 As at 31 March 2024, the council had a total of £121.701m usable reserves, comprising the following: • £2.763m Repairs and Renewals Fund; • £3.197m Capital Funds; and • £115.741m General Fund, with £107.443m of this balance earmarked for specific purposes. 1.4 At the budget setting meeting on 22 February 2024, as part of the revenue budget, Council agreed to the transfer Strathclyde Pension Fund contribution savings of £6.875m relating to council staff and £3.053m relating to Social Work staff to reserves. It was also agreed that £1.875m of revenue surplus within 2024-25 be transferred to the Capital Plan. As the commitments for these include expenditure within 2024-25 year, these have been immediately recognised within the earmarked reserves balances to allow them to be spent accordingly. In addition, Scottish Government funding in relation to the 23-24 pay award has been notified at a value of £0.371m and this has been reinstated to the Connect for Success earmarking as planned. Further, following a review of earmarked reserves, at its meeting of 26 September 2024, Council approved the release of reserves totalling £1.558m, previously earmarked for specific purposes, back to the unallocated General Fund. The element of the General Fund balance currently earmarked for specific purposes now totals £118.059m. 1.5 The current earmarked General Fund balance of £118.059m comprises the following: • £58.413m invested or committed for major initiatives/capital projects; • £10.784m already drawn down; • £15.808m still to be drawn down in 2024-25; and • £33.054m planned to be spent in future years. 1.6 The council’s General Fund contingency is set at 2% of estimated net revenue expenditure for 2024-25, which amounts to £6.039m. At the beginning of the Page 104
Page 105
financial year, there was an unallocated General Fund Balance of £8.298m, representing a surplus of £2.259m over and above the general contingency. After taking into consideration the current forecast outturn overspend for 2024-25, this surplus has reduced to £0.198m. Page 105
Page 106
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 RESERVES AND BALANCES - UPDATE AS AT 31 DECEMBER 2024 2. INTRODUCTION 2.1 This report outlines current balances on the council’s reserves, both usable and unusable. It also provides detail on the monitoring of the earmarked balances within the General Fund. 3. DETAIL 3.1 Types of Reserves 3.1.1 Usable Reserves - Councils have powers to establish certain resource backed reserves which can be used to fund expenditure. The powers of councils to establish reserves are laid out in Schedule 3 of the Local Government (Scotland) Act 1975. These allow councils to establish a Renewal and Repairs Fund, Insurance Fund and Capital Fund. Councils can also establish a Useable Capital Receipts Reserve. The council must also maintain a General Fund and can earmark balances for specific purposes within the General Fund. 3.1.2 Unusable Reserves – Councils are also required to establish certain reserves that are not backed by resources. They are required purely for accounting purposes and do not represent resources available for councils to utilise. The Pensions Reserve, Revaluation Reserve, Capital Adjustment Account, Financial Instruments Adjustment Account and Accumulated Absences Account are examples of unusable reserves. 3.2 Reserve Balances as at 31 March 2024 3.2.1 The balances on each type of reserve at 31 March 2024 are set out in the two tables below, per the Audited Annual Accounts for 2023-24. Unusable Reserves £000 Revaluation Reserve 180,661 Capital Adjustment Account 249,093 Financial Instruments Adjustment Account (1,585) Pensions Reserve (19,578) Accumulated Absences Account (8,272) Total Unusable Reserves 400,319 Usable Reserves £000 Repairs and Renewals Fund 2,763 Capital Fund and Usable Capital Receipts Reserve 3,197 General Fund 115,741 Total Usable Reserves 121,701 Total Reserves 522,020 Page 106
Page 107
3.2.2 The Revaluation Reserve represents the unrealised gains in the valuation of fixed assets. The Capital Adjustment Account represents the difference between depreciation based on proper accounting practice and statutory charges for financing capital expenditure. The Financial Instruments Adjustment Account represents the difference between gains and losses on borrowing and statutory capital financing charges. The Pensions Reserve represents the difference between pension costs based on proper accounting practice and payments made for pension costs. The Accumulated Absences Account represents the costed difference between holiday pay entitlement and actual holidays taken at 31 March. 3.2.3 The Repairs and Renewals Fund was established to support funding of renewal and replacement of school equipment. Schools can only draw on the Repairs and Renewals Fund to the extent they have previously paid into the Fund and contributions must be contained within schools devolved budgets. 3.2.4 The Capital Fund was established to receive all capital receipts generated by the council and can be used to support the capital plan or meet the principal repayments on loan charges. The council decides as part of the budget process each year how it wishes to draw funding from the Capital Fund. 3.2.5 The Usable Capital Receipts Reserve relates to the accumulated unspent capital receipts from sale of council houses prior to transfer of the housing stock. The reserve forms part of the council’s Strategic Housing Fund and can only be used for investment in social housing. The reserve will be used in accordance with the approach to investing in housing, agreed by Council in August 2012. 3.3 General Fund 3.3.1 The General Fund balance as at 31 March 2024 can be analysed as follows: Balance 31/03/24 £000 Balance on General Fund as at 31 March 2023 86,356 Increase to General Fund balance at end of 2023-24 29,385 Earmarked Balances* (107,443) Contingency allowance at 2% of net expenditure (6,039) Unallocated balance as at 31 March 2024 2,259 * Note that the earmarked balance of £107.443m includes £35.658m of new earmarked reserves relating to the Service Concessions gain as detailed at paragraph 3.6. 3.3.2 The General Fund includes balances that Council has agreed to earmark for specific purposes. Some of these earmarked balances will be spent during the current financial year and some of them will be held over and spent in later years. The table below shows the balance at 31 March 2024, the new amounts earmarked from the Strathclyde Pension Fund savings (see section 3.7), the Page 107
Page 108
3.3.3 amount from the revenue budget for Capital agreed at Council in February 2024, the amount returned to earmarking from Scottish Government funding for the 2023-24 pay award, the amounts that are currently invested or set aside for major initiatives, the amount already spent and planned to be spent in the current year, the amount to be spent in future years and any sums no longer required to be earmarked. Appendix 1 provides further details on the breakdown of unspent budget earmarkings. Officers have reviewed and updated the spending profiles. At its meeting of 26 September 2024, Council agreed to release a total of £1.558m, previously earmarked for specific purposes, back to the unallocated General Fund as outlined below. It is anticipated that these resources will contribute towards the forecast 2025-26 budget gap and, therefore, will not contribute to the forecast surplus over and above the general contingency balance outlined at section 3.4. Page 108
Page 109
3.3.4 EMR Released to General Fund £000 Expansion of Universal Free School Meals 833 Scottish Government Initiatives: Developing the Young Workforce GIRFEC Languages 1+2 38 (2023 Digital Projects) Cashless Catering 20 Education Learning Estate Condition Surveys 2 Transport for 'Smoke Free Me' Drama Production 1 Growing our Own and Modern Apprentices 40 Scottish Govt Islands Programme 1 Staycation and Marketing Argyll and Bute 62 Amenity Services introduction of management information system 28 Bin Replacement Programme 2 COVID Funding 418 Digital Projects: Hybrid Council meetings 31 Debt Counselling & Welfare Rights 15 Community Resilience Fund 70 total 1,558 It was also agreed to make non-financial amendments, to merge specific earmarked reserves, as outlined below. This is the cause of the large movement between categories in the previous reporting periods. Reference Description 003 Community Planning 006 Communities & Partnership Team 010 Rothesay Pavilion Charity 094 Rothesay Pavilion (Revenue) 012 Rothesay Pavilion Essential Repairs 155 Rothesay Pavilion (Service Concessions) 167 Rothesay Pavilion (Recovery & Renewal Fund) 170 Underwriting development of Rothesay Pavilion 008 Information Management (Estates Survey Work) 018 Site Investigation Works 042 Gaelic Specific Grant 044 Languages 1+2 074 Skills Development Scotland 085 Establishing HR Service Centre 080 Business Development Training 082 Learning and Development 086 Crown Estates (23-24) Page 109
Page 110
087 Crown Estates (22-23) 088 Crown Estates (21-22) 089 Crown Estates (20-21) 116 EH COVID Posts 134 Waste Variation Monies 149 Waste PPP (2023 Contract Inflation Adjustments) 030 Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund 033 School WIFI Upgrades 034 Education Transformation Fund 049 Skype for Business for Education/Digital Projects 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 2024-25, which amounts to £6.039m. At the beginning of the financial year, there was an unallocated General Fund Balance of £8.298m, representing a surplus of £2.259m over and above the general contingency. After taking into consideration the current forecast outturn overspend for 2024- 25, this surplus has reduced to £0.198m. 3.4.2 The revenue budget monitoring position as at 31 December 2024 is a forecast overspend of £4.215m, of which £2.179m relates to Social Work. The Chief Financial Officer of the IJB has now written to the Council to request access to the Strathclyde Pension Fund Gain that is held in reserves for the HSCP and, therefore, it is expected that Social Work will outturn within budget, after applying these reserves. 3.4.3 In relation to the adverse weather event of October 2023, it was agreed at the Policy and Resources meeting on 15 August 2024 to continue the roads reconstruction schemes and the overspend be funded as follows: £000 Utilise some of the unallocated capital funding for street lighting and cable and column replacements 100 Use Priorities Investment Fund 944 Use Crown Estate Funding 780 Borrowing for additional expenditure and use £50k in the loans fund for street lighting improvements toward the cost of borrowing 2,029 Total 3,853 3.4.4 A contribution of £25k to LiveArgyll, to be funded from the unallocated General Fund balance, was approved by Council on 23 November. This award will meet staff costs associated with the use of the Corran Halls for the duration of the Royal National MOD. Page 110
Page 111
3.4.5 The following table summarises the position of the unallocated General Fund balance, taking into consideration the points noted above. Heading Detail £000 Unallocated General Fund as at 31 March 2024 This is the balance that is unallocated over and above the 2% contingency, which amounts to £6.039m 2,259 Current Forecast Outturn for 2024-25 as at 31 December 2024 Per Revenue Budget Monitoring report (4,215) Social Work Forecast Outturn adjustment Per paragraph 3.4.2 - Social Work variance expected to be managed from within IJB reserves 2,179 LiveArgyll Funding Award Per paragraph 3.4.4 – Contribution in respect of RNM event, to be met from unallocated GF balance (25) Forecast Unallocated General Fund as at 31 March 2025 198 3.5 Loans Fund Review 3.5.1 At the Council meeting of 27 February 2020, it was agreed that the one-off re- profiling gain of £20.561m generated by the loans fund review should be used partly to create a provision for the increasing principal repayments over the next 10 years (£7.649m) with the remainder of the gain (£12.912m) used to fund known liabilities/cost pressures. The £12.912m has now been transferred to Earmarked Reserves in full. 3.6 Service Concessions 3.6.1 3.6.2 At the Council meeting of 23 February 2023, it was agreed that the council adopt the financial flexibility introduced by the Scottish Government relating to Service Concession contracts. This resulted in a one-off retrospective gain of £36.038m. The commitments associated with this were further refined at the Council meeting of 22 February 2024 and it was agreed that £0.380m be transferred into the General Fund balance, leaving a one-off gain of £35.658m which is now being held in earmarked reserves. Further, existing earmarkings totalling £2.666m in respect of Rothesay Pavilion have been consolidated with the Service Concessions earmarked resources, for monitoring purposes. Appendix 2 provides information on these commitments, totalling £38.324m. At the budget meeting on 23 February 2023, the Council established a £7m Priorities Investment Fund from the Service Concession gain; to lever in, secure and support key strategic investments in this year and future years. By the budget meeting on 22 February 2024, £0.850m has been committed towards the Housing Emergency, Area Plans and Strategic Development Frameworks, leaving £6.150m. A further £1.028m was then committed towards the capital plan and £0.380m to supplement the Unallocated General Fund Balance, as outlined at paragraph 3.6.1, with a remaining balance of £4.742m. Commitments made during 2024-25 were £0.050m for the Clipper Race and Page 111
Page 112
£0.944m towards the weather incident costs, leaving a balance of £3.748m remaining in the Fund. 3.7 Strathclyde Pension Fund Reserves 3.7.1 The Strathclyde Pension Fund reported an exceptionally strong set of results with a surplus of almost £9bn which has allowed a reduction in the employer contribution rate. Argyll and Bute Council is seeing a reduction in employer contributions from 19.3% to 6.5% over 2024-25 and 2025-26, before reverting to a sustainable long-term rate in the third year of 17.5%. For the council, the one-off saving in the first two years associated with a reduction to 6.5% is £6.875m per year. On 22 February 2024, Council agreed to allocate the cumulative gain in the first two years of £13.750m as follows: Description 2024-25 £000 2025-26 £000 Total £000 Realised saving 6,875 6,875 13,750 £2m in 24-25 to balance revenue budget (2,000) (2,000) £3.750m allocation to capital plan (3,750) (3,750) £2m to be directed towards Transformation/ Spend to save projects (1,125) (875) (2,000) £2m in 25-26 to balance revenue budget (2,000) (2,000) £2m in 26-27 to balance revenue budget (2,000) (2,000) £2m allocation to capital plan (2,000) (2,000) 0 0 0 3.7.2 The £6.875m from the 2024-25 revenue budget saving has been logged within the earmarkings with the commitments noted above to allow expenditure to be made against them. 3.7.3 For Social Work, the SPF saving is £3.053m per annum and is being ring fenced within the Council reserves for utilisation by the HSCP in the future. This amount is also being logged with the earmarkings in 2024-25 to allow expenditure to be made, if required. 3.7.4 As at 31 December 2024, the commitments against the Strathclyde Pension Fund gain for Transformation/Spend to Save projects are as follows: Description Commitment £000 Data Platform Build Consultancy – to build a data platform which will provide a new approach to how ABC organised and accesses its data to support strategic decision making. 44 RIS Service Review – a report was presented to EDI on 20 June 2024 regarding the need for external support to assist in delivering recommendations from Stage 1 of the RIS Review. 150 Conversational AI – towards an investment in a one-year proof of concept contract to implement Conversational AI across the web, voice and social media channels for the council. 31 Total Committed 225 Page 112
Page 113
Kirsty Flanagan Executive Director/Section 95 Officer 17 January 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES Appendix 1 – Earmarked Reserves breakdown of unspent budget Appendix 2 – Earmarked Reserves breakdown of Service Concessions earmarkings For further information contact Carolyn Earl, covering Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk 4. CONCLUSION 4.1 The report outlines the overall reserves and balances for the council covering the purpose and level of each reserve. It also provides detail as to expenditure against earmarked balances held within the General Fund. 4.2 After taking account of the current forecast outturn for 2024-25, the council’s unallocated General Fund balance, over and above the general contingency, is forecast to be £0.198m as at 31 March 2025. 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 Fairer Scotland Duty- None. 5.5.1 Equalities – protected characteristics - None. 5.5.2 Socio-economic Duty - None. 5.5.3 Islands - None. 5.6 Climate Change - None. 5.7 Risk - A contingency of £6.039m (equivalent to 2% of net expenditure) has been set aside as part of the General Fund. This has been subject to a risk assessment. 5.8 Customer Service - None. 5.9 The Rights of the Child (UNCRC) - None. Page 113
Page 114
Page 114
Page 115
APPENDIX 1 Earmarked Reserves - Unspent Budget As at 31 December 2024 Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 001 Chief Executive's Unit Community Planning Service Concessions - Priorities Investment Fund (Area Plans) 200,000 86,838 113,162 13,162 100,000 As agreed by Policy and Resources Committee on 23 October 23 - drawdown of £200,000 from the Priorities Investment Fund to fund two temporary posts and associated costs to produce meaningful area plans 100,000 100,000 0 006 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 0 0 0 0 The funds have originated from externally sourced income due to an employee being seconded to the Scottish Community Development Centre (SCDC). The funds will be used to support the team in relation to meeting its priorities of Building Back Better (Communities), Climate Change and the review of the Argyll and Bute Outcome Improvement Plan. This earmarking merged September 24 (per Council Decision) with 003 Community Planning - temp post to support communities. 0 0 0 008 Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 0 0 0 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k, document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k. This balance relates to Estates Survey Work. Having a procured supplier to provide floor plans at short notice is required to be able to react quickly to requests. If this isn't available Estates would need to go through the procurement process again which would delay any projects by several months. There isn’t a detailed plan to use this resource it is more about being able to react quickly and not delay projects. Council agreed September 24 to merge this with 018 Site Investigation works. 0 0 0 009 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 15,200 9,900 5,300 0 5,300 To deliver a number of Digital Service Transformation Projects with a commitment of £0.035m towards a Supply Staff Booking system. Phase 1 of the project is nearing completion. 9,900 5,300 0 010 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 0 1,159,204 0 1,159,204 Agreed at Council meeting February 2020,Unspent Budget Earmarking 010 of £750k additional revenue support subject to conditions which seek to minimise the risk to the Council as far as is reasonably practicable including requirement for adequate business and financial management and regular reporting by RPC. This funding is to support Rothesay Pavilion Charity in the first 2 years of the building being operational. Merged September 24 per Council decision with CHORD earmarking 094 £409k which was about building up a provision towards future Council commitment to provide up to £150,000 per annum running costs for Rothesay Pavilion. 0 1,038,608 120,596 012 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 0 0 0 0 Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. 0 0 0 014 Executive Director (Douglas Hendry) Commercial Services Commercial Investment Manager post and specialist consultant technical resource (previously Asset Management Fund) 104,000 24,758 79,242 79,242 0 The Asset Management Fund has been redirected to Capital going forward but the interest for 2023-24 is to be used towards a Commercial Investment Manager Post. This is because funding of £200k from the Asset Management Fund was agreed at ELT in June 22 for the post, along with specialist consultancy and technical resources that will be required to support early projects. Note, the £104k represents the balance of the £200k commitment. 104,000 0 0 Page 115
Page 116
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 015 Executive Director (Douglas Hendry) Commercial Services Estates - NDR Revaluation Appeals 59,938 0 59,938 29,969 29,969 The Council agreed to make provision to meet the cost of appealing Non Domestic Rates (NDR) revaluations which were imposed from April 2017. The remaining funds were carried forward to the 2023/24 revaluation cycle however a recent change in position by the Scottish Government may restrict the appeals which can be made. This is still under discussion and Gerald Eve Surveyors have been appointed as specialist advisers on this matter, who are progressing 2023-26 appeals. In the event that appeals are limited there may be an opportunity to utilise Gerald Eve for more general valuation advice subject to Procurement approval. 29,969 29,969 0 016 Executive Director (Douglas Hendry) Commercial Services Mid Argyll Community Pool 30,000 30,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.030m to Mid Argyll Community Pool in response to an external funding request. 30,000 0 0 017 Executive Director (Douglas Hendry) Commercial Services MacTaggart Leisure Islay 30,000 30,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.030m to MacTaggart Leisure, Islay in response to an external funding request. 30,000 0 0 018 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 0 33,710 33,710 0 ER018 24-25 £21k - For Site Investigation works in relation to Tweeddale Street Car Park and Oban Airport Business Park, exploring commercial opportunities to develop the sites and raise revenue income for Argyll and Bute Council. HUB North were instructed to procure contractors to undertake the site investigations these are now complete. The remainder of the budget is intended to be utilised for other site investigation and pre-development works to further develop commercial opportunities across the council area. Agreed by Council September 24 to combine 24-25 ER008 Information Management (Estates Survey Work) - Having a procured supplier to provide floor plans at short notice is required to be able to react quickly to requests. If this isn't available Estates would need to go through the procurement process again which would delay any projects by several months. There isn’t a detailed plan to use this resource it is more about being able to react quickly and not delay projects. 33,710 0 0 021 Executive Director (Douglas Hendry) Education ASN Review 1,255,000 0 1,255,000 565,000 690,000 To fund capital costs of ASN adaptations as part of ASN Review to increase equity of provision across Argyll and Bute. This will be subject to a business case as part of the wider ASN review. Update: Business case now approved and working group set up with quotes for works being carried out. 565,000 690,000 0 024 Executive Director (Douglas Hendry) Education Reduced Teacher Staffing Costs - Strike Action 800,000 800,000 0 0 0 To fund one off savings in 2024-25 from the underspend in staffing from strike action. 800,000 0 0 033 Executive Director (Douglas Hendry) Education (2023 Digital Projects) School WiFi Upgrades 166,924 0 0 0 0 To extend WiFi coverage within school settings through the purchase of additional hardware such as access points, switches and other networking hardware. This will result in more flexible learning spaces and support the growing number of devices within schools. Project now underway and if budget not fully utilised it is hoped that the balance could be diverted to assist with Capital costs of Education Network Paper. 0 0 0 034 Executive Director (Douglas Hendry) Education Education Transformation Fund 144,637 0 0 0 0 At the Council meeting on 27 February 2020, it was agreed to input £400k into Education Digital Learning. The additional funds have been spent in 20/21, 21/22 and 22/23 as part of the ongoing transformation work in the Education service, focussing on digital and virtual learning technology and the development of learning clusters. 0 0 0 036 Executive Director (Douglas Hendry) Education MCR Pathways Pilot 80,000 0 80,000 80,000 0 Funding to support implementation of MCR Pathways mentoring programme within three secondary schools for 2023-24 academic year. Funding will allow the employment of a dedicated Co-ordinator within each setting to develop and implement the programme which is designed to benefit care experienced and other disadvantaged pupils through targeted mentoring support. 80,000 0 0 042 Executive Director (Douglas Hendry) Education Gaelic Specific Grant 30,000 0 30,000 0 30,000 Gaellic Specific Grant £30k - This earmarking refers to the Council contribution towards the Gaelic grant for 22-23 and will fund the costs of Gaelic Language Principal Teacher in 24-25 academic year. 0 30,000 0 043 Executive Director (Douglas Hendry) Education (2023 Digital Projects) Cashless Catering 30,000 4,996 5,004 5,004 0 To support the ongoing implementation of the new cashless catering system during the testing and roll out phase. £20k released back to General Fund Septmber 24 per Council decision as no longer required. 10,000 0 0 Page 116
Page 117
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 049 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 0 0 0 0 To fund the initial capital costs for the implementation of Skype for Business for Education. This will bring the Education service in line with other council departments and will improve staff collaboration and modernise school telephony to deliver the service more efficiently and cost effectively. 0 0 0 052 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 1,815 0 0 0 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. Balance of £2k released back to General Fund per Council decision September 24 due to the small amount remaining which can be covered by the service. 0 0 0 059 Executive Director (Douglas Hendry) Legal and Regulatory Support Education Purchasing Officers 210,000 0 210,000 0 210,000 The earmarked funds will be used to fund an education purchasing team within the Procurement Service for two years. The team will embed good procurement practice, train headteachers on current procurement process requirements, develop spend plans that evidence best value. 0 210,000 0 061 Executive Director (Douglas Hendry) Legal and Regulatory Support Information Management (Digitalisation of Title Deeds) 92,000 0 92,000 20,500 71,500 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. The planned initiatives include: Estates Survey work £122k, Digitalisation of Title Deeds £92k (delay on spending due to COVID-19), document management and workflow system for Planning, Building Standards and Environmental Health £77k and a balance of funding to explore information management solutions in a strategic and coherent way £209k 20,500 51,000 20,500 063 Executive Director (Douglas Hendry) Legal and Regulatory Support (2023 Digital Projects) Replacement of Council Chambers Online Meeting Equipment 50,071 5,353 44,718 0 44,718 Current online meeting system is less than resilient and has failed on a number of occasions, leading to issues at strategic committees. A condition assessment by the incumbent maintenance contractor has highlighted that the current equipment is now at end of life and unsupportable due to the obsolescence of the system. Discussions with ICT have taken place to identify a simpler more robust solution to be procured. NUWAY system and maintenance, system installed, ongoing maintenance contract to 2030 5,353 44,718 0 064 Executive Director (Douglas Hendry) Legal and Regulatory Support Councillor IT Equipment 44,557 0 44,557 22,000 22,557 There is currently no budget for the provision and renewal of IT equipment for members. The earmarking identifies a resource to utilise spend for that purpose to ensure that members have continued support in maintaining and replacing vital IT equipment. 22,000 22,557 0 065 Executive Director (Douglas Hendry) Legal and Regulatory Support Digital Projects: Hybrid Council meetings 43,302 12,000 0 0 0 The funding will be used to maintain the ICT equipment used to support the provision of on-line and hybrid Council meetings. Will be used to fund Public-I licence over 3 years - for livestreaming Council meetings. Balance of £31k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 12,000 0 0 066 Executive Director (Douglas Hendry) Legal and Regulatory Support Debt Counselling & Welfare Rights 21,452 5,265 735 735 0 To meet the cost of a Debt Counselling and Welfare Rights Management System. Balance of £15k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 6,000 0 0 067 Executive Director (Douglas Hendry) Non Departmental / Legal and Regulatory Services Community Resilience Fund 71,999 0 5,000 5,000 0 Fund established in 2012/13 to be spent over more than one year. Fund reduced at the Council meeting on 11 February 2016. Used to cover the costs of emergency phone lines and a contract with Aggreko for generators if required in an Emergency Planning/Civil contingencies incident. These costs amount to approximately £5k per year. Balance of £67k released back to General Fund per Council decision September 24 and an associated cost pressure built in to 2025-26 budget cover the routine annual costs. 5,000 0 0 Page 117
Page 118
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 068 Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Increase in Schools Bandwidth) 63,455 0 63,455 0 63,455 To complete one of a number of Digital Service Transformation projects with a commitment of £0.064m to increase Schools Bandwidth. Committed for MS 365 project - D Logan/I Jackson. Paper went to ELT in Dec 24. 0 0 63,455 069 Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Replacement Learning Management System) 11,470 0 11,470 11,470 0 To deliver a number of Digital Service Transformation Projects with an original commitment of £0.030m towards a replacement Learning Management System £0.030m. This money will be used to pay for consultancy for an interface between itrent and totara. Profiled for 24/25 based on decision to do a phased implementation of itrent. 11,470 0 0 070 Executive Director (Kirsty Flanagan) Across Services / Development and Economic Growth Information Management (Document Management and Workflow for Planning, Building Standards and Environmental Health) 21,177 0 21,177 21,177 0 Hoping to implement the replacement for IDOX in March 2024 but there have been severe issues/delays with the new programme . Dec 24 Project has been scrapped as it was not working. Awaiting procurement to write termination of contract legal documents, until this is completed we will not know if any further cost are due. 21,177 0 0 073 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) iTrent Project 320,555 0 320,555 320,555 0 Combination of parallel running of the new iTrent system alongside the legacy systems for up to 18 months whilst iTrent is implemented and additional staffing resource to implement iTrent in late June 2024 and support staff for the first 3 months of operation through summer 2024. Total includes £73k from Financial services for funding additional staffing resource to implement the payroll components of the iTrent HR and Payroll System by the end of June 2024 and support staff for the first 3 months of operation during summer 2024. 320,555 0 0 075 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 0 69,150 44,000 25,150 Funding earmarked to support trainee development and modern apprenticeship opportunities based on priority workforce risk areas. A Trainee Regulatory Services post has been proposed by the manager who was unable to secure a suitable candidate for the original advert. The spend would be spread over 24/25 and 25/26 once a suitable candidate is in post. Balance of £40k released back to General Fund per Council decision September 24 as only £69k is still required for the intended purpose. 44,000 25,150 0 076 Executive Director (Kirsty Flanagan) Customer Support Services Security Operations Centre Subscription 71,188 0 71,188 0 71,188 There is a requirement to pay for a 3-year subscription at £60,000 per annum with a cost pressure being added to the ICT revenue budget to cover the costs from 2026-27 onwards. 0 71,188 0 077 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Resilient Website Project 60,000 14,000 46,000 0 46,000 Cybersecurity action to move to a cloud based website platform that would improve resilience and enable service continuity in the event of a cyber attack. Procurement in progress for resilient website solution and Scotgov Cloud Services Project providing input. Contract Award expected by end 2023. Procurement in progress for resilient website solution. Contract Award expected FQ1 2024-5. 3 year contract has been awarded to BigBlueDoor. 14k spend 24/25, 23k in 25/26 and 23k in 26/27. 14,000 23,000 23,000 078 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Project Officer 34,121 0 34,121 34,121 0 Employ a temporary Digital Project Officer as part of OD changes - additional member of staff required to action changes, unable to recruit so existing staff increasing hours. 34,121 0 0 079 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 0 30,000 2,000 28,000 Agreed at Council Meeting February 2021. Provision of funding for delivery and implementation of the council’s Gaelic Language Plan in recognition of the contribution that Gaelic makes to economic growth and to the tourism sector, and to enable delivery of key activities within the plan which currently receive no revenue funding. In discussion with Bord na Gaidhlig about a 3-year Gaelic Plan funding programme as opposed to individual grant applications for specific projects. This earmarking would be used to provide match funding for that 3 year programme of projects. 3 year match funding approved December 2024. 2,000 28,000 0 Page 118
Page 119
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 080 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,025 20,397 26,064 -397 26,461 £27k budget from original Business Development Training earmarking 080 remaining at 31/03/24. This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. Agreed by Council September 24 to merge with 24-25 EMR 082 - In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. This money is to support the additional digital learning capacity required to build online elements of AB365 and other key digital learning as we increase our digital learning offering linked to the digital skills survey and review of corporate training. Delays in recruitment meant this has been reprofiled for spend in 24/25. 20,000 26,461 0 082 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 19,436 0 0 0 0 In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. This money is to support the additional digital learning capacity required to build online elements of AB365 and other key digital learning as we increase our digital learning offering linked to the digital skills survey and review of corporate training. Delays in recruitment meant this has been reprofiled for spend in 24/25. Agreed by Council September 24 to merge with 24-25 080 Business Development Training. 0 0 0 083 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Engagement Services Developer 15,677 13,504 2,173 2,173 0 To fund 50% of a new temporary LGE10 post. The post is a Digital Engagement Services Developer that will be provide capacity to deliver service efficiencies through the use of the new CREATE/RPA software. The other 50% of the post can be funded from a current vacancy. 15,677 0 0 085 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 13,824 0 0 0 0 To facilitate the implementation of technical efficiency improvements and new processes. This money will be used to support phase two of the itrent project. Spend reprofiled for 2024/25 following delays in itrent project. Agreed by Council September 24 to merge this with earmarking 074 Skills Development Scotland. 0 0 0 096 Executive Director (Kirsty Flanagan) Development & Economic Growth Planning Income 60,000 0 60,000 60,000 0 To fund additional resources to support and develop the Council's planning service. Whilst recruitment issues within Argyll and Bute were largely been resolved during 2022/23, the requirement for the operation of the DM Service with reduced staffing levels over an extended period of time, coupled with the increasing demand for development post-Covid, and uncertainty caused by the introduction of National Planning Framework 4 has given rise to a substantial backlog of case work and has had a significant adverse impact on processing times for planning applications. Plans to utilise this on additional staff costs in 24-25 in order to reduce the backlog. Dec 24 draw down likely March 25 60,000 0 0 103 Executive Director (Kirsty Flanagan) Development and Economic Growth Oban TIF (Tax Incremental Financing) 214,158 0 214,158 214,158 0 Will be used to fund the TIF Programme office for a further 3 years as well as the programme office for Rural Growth Deal beyond the funding that was agreed at Council for this in February 2021. 214,158 0 0 105 Executive Director (Kirsty Flanagan) Development and Economic Growth Service Concessions - Priorities Investment Fund (Project Officer for Housing Emergency) 200,000 0 200,000 70,000 130,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £200,000 from the Priorities Investment Fund to fund a Project Officer to assist in accelerating the work of the Housing Emergency. Dec 24 post holder now in place awaiting further instruction from Budget holder 70,000 130,000 0 107 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 41,260 15,100 26,160 26,160 0 At the Council meeting on 25 February 21, a decision was taken to agree £90k funding for Events and Festivals for 22/23, in order that the application process can commence during 21/22 and that this agreed figure be augmented by any underspend remaining from the 20/21 financial year. At 24 February 22, decision made to agree £90k for 23/24, in order that the application process can commence during 22/23 and that this agreed figure be augmented by any underspend remaining from the 21/22 financial year. Applications have been received and payments will be made in 23-24. Final balance (£41,260) to be spent in 24/25 Dec 24 cost to date drwn down 41,260 0 0 112 Executive Director (Kirsty Flanagan) Development and Economic Growth Screen Machine 28,000 0 28,000 28,000 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.028m to Screen Machine in response to an external funding request. Dec 24 Grant offer has now been sent out but payment now not due until Q1 25/26 28,000 0 0 Page 119
Page 120
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 120 Executive Director (Kirsty Flanagan) Development and Economic Growth International Eight Metre Association World Cup 10,000 10,000 0 0 0 At the Council Budget meeting on 22 February 2024, the Council committed to a one- off investment of £0.010m to the International Eight Metre World Cup in response to an external funding request. 10,000 0 0 124 Executive Director (Kirsty Flanagan) Financial Services Revenue and Benefits BPR - extra staff to implement savings targets 86,955 0 86,955 0 86,955 On 23 February 2023, the Council agreed to the implementation of savings option FIS2324-002 in relation to the Revenue and Benefits - Income Generation and Business Process Review. This included an extra 4 FTE of staff. Delays in recruitment have caused slippage in the allocated budget for these posts. 0 86,955 0 127 Executive Director (Kirsty Flanagan) Financial Services Scotland Loves Local 57,453 57,453 0 0 0 As agreed by Council 22 February 24, a £57,453 underspend from the Scotland Loves Local scheme to be allocated to support measures to help with the costs of living by funding member organisations of the Community Food Forum, ALI Energy, Argyll and Bute Citizens Advice Bureau and Bute Advice Centre, with detailed proposals to be agreed by the Executive Director with responsibility for Finance, in consultation with the Leader, Depute Leader and Leader of the Largest Opposition Group. Details of the agreed spend are to be reported to elected members. 57,453 0 0 129 Executive Director (Kirsty Flanagan) Financial Services Financial Systems 33,748 0 33,748 33,748 0 The council is required to implement the IFRS16 Leases accounting standard from the 1st April 2024. 33,748 0 0 130 Executive Director (Kirsty Flanagan) Financial Services Accounting and Budgeting Team Resilience 47,883 7,066 40,817 934 39,883 Training and examination fees for 6 staff who are currently undertaking their professional CIPFA/ACCA training. In addition funding the further training of 1 of our auditors and providing finance business partner training to a group of our existing professional staff. 8,000 8,000 31,883 134 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,241,752 108,524 1,356,489 353,855 1,002,634 Waste Variation Monies - £1.242m balance at 31/03/24 (Original EMR134): This will be used to fund/part-fund various waste infrastructure projects that will support the council’s compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste. £462K in 2024-25 consisting of :- Island restoration/capping (£250K Gartbreck completed will be tsf to capital), Helensburgh transfer station, recycling improve. fund (island sites) design costs, recycling campaign publicity, technology trial on blue bin recycling participation, consultancy costs relating to additional monitoring data for SEPA and Consultancy follow on waste options appraisal and recycling campaign material. £993K in 2025-26 consisting of:- Island restoration/capping, Helensburgh transfer station design costs pending outcome of business case, consultancy costs relating to additional monitoring data for SEPA, recycling improve. fund (island sites) design costs and waste PPP site conversion. £10K in 2026-27 consisting of:- consultancy costs relating to additional monitoring data for SEPA. Council agreed to merge with EMR149 September 24 - to be used to assist with the Council's compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste and supporting the overall Waste Strategy. 462,379 992,634 10,000 138 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Priorities Investment Fund (Strategic Development Framework) 450,000 0 450,000 225,000 225,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £450,000 to procure consultancy support to assist in driving forward the Strategic Development Frameworks. 225,000 225,000 0 141 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 287,835 81,158 206,677 7,149 199,528 In November 2018, the Council agreed to a maintenance funding package to be progressed for a number of 3G pitches including Tarbert. This funding will provide an estimated 6.5 years’ worth of ongoing maintenance up to 2025-26. There is the potential to extend the continued upkeep of the pitches until 2026-27 given the earmarking available will not be fully utilised by the end of 2025-26. However, there will be potential redundancy costs for 2 employees that will need to be covered from the remaining balance. Paper on proposed extension to be prepared. 88,307 199,528 0 142 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 140,000 0 140,000 140,000 0 At the Council meeting on 27 February 2020, it was agreed to input £400k in Green transport, investment in footway and cycle path maintenance supporting the healthy wellbeing and green agenda. Spend has been delayed due to COVID and this will be taken forward in 23/24. £260k Footways Reconstruction programme now spent and will be drawn down against capital programme during 23/24. £140k Ardrishaig North Project spent in 22/23 and drawn down in 24/25 (capital expenditure). 140,000 0 0 Page 120
Page 121
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 146 Executive Director (Kirsty Flanagan) Roads & Infrastructure Climate Change 40,942 0 40,942 40,942 0 At the Council meeting on 27 February 2020, it was agreed to input £500k budget to mitigate the impacts of weather related damage and climate change with specific emphasis on gully cleaning and drainage improvements. Spend has been delayed due to COVID and the intention is to spend the funds on 2 Gully Motors plus staff over next 2 years. Vehicles have been received and budget will be drawn down to cover their cost. The remaining budget will be used towards running the vehicles. 40,942 0 0 147 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 0 0 0 0 Delay with introduction of amenity time recording system due to increased costs. Discussions ongoing to find alternative cheaper solution. The software/system being introduced by HR/Payroll during 2023-24 offers a time-recording facility. Although not included in the current HR/Payroll spec, once the new system is up and running, the proposal would be to investigate the time-recording system to see if viable for amenity time recording purposes. Balance released back to General Fund per Council decision September 24 as there is no plan to take this forward and this will be re-assessed following the introduction of the HR/Payroll system. 0 0 0 149 Executive Director (Kirsty Flanagan) Roads & Infrastructure Services (2023 Contract Inflation Adjustments) Waste PPP 223,261 0 0 0 0 Proposal to merge with ref 134, to be used to assist with the Council's compliance with the 2026 ban on the Landfill of Biodegradable Municipal Waste and supporting the overall Waste Strategy. Council agreed to merge 134 and 149 September 24. 0 0 0 151 Executive Director (Kirsty Flanagan) Roads and Infrastructure Services Weather Incident costs not covered by Bellwin claim. 198,000 0 198,000 198,000 0 £839k was set aside at budget meeting in February 2024 as part of the unallocated general fund balance workings to cover the weather incident costs not covered by the Bellwin Claim. As £641k was utilised during 23-24, the balance of £0.198m is being earmarked for costs expected in 24-25. 198,000 0 0 154 Non Departmental Non Departmental Service Concessions - Replace previous loans fund principal repayment holiday 5,400,000 0 5,400,000 5,400,000 0 As agreed at Council meeting 23 February 2023 - The one-off retrospective benefit will be used to replace exercising the principal repayment holiday that was previously agreed by Council. 5,400,000 0 0 164 Non Departmental Non Departmental Pay Inflation Contingency 1,700,000 0 1,700,000 1,700,000 0 Negotiations for the 2024/25 pay award are ongoing but initial discussions suggest it will be beyond the 3% increase currently built into the budget outlook. £1.7m equates to approximately a 1% pay rise therefore providing a contingency at this level is prudent 1,700,000 0 0 170 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 0 0 0 0 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion (£1m). At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. 0 0 0 171 Non Departmental Non Departmental Oban TIF (Tax Incremental Financing - Excess NDR) 875,651 0 875,651 0 875,651 This is the surplus NDR after paying all Loans Charges in respect of TIF infrastructure projects. This fund will be used in the future as TIF projects are delivered. Discussions in place on future ff the next TIF project (Oban Airport) which will utilise this reserve. If the project does not go ahead, we will need to return NDR to Scottish Government 0 875,651 0 180 Non Departmental Non Departmental Treasury Gain 294,000 294,000 0 0 0 To fund one off operational saving 202425 003 as agreed by Council when setting 2024/25 budget in February 2024. 294,000 0 0 184 Non Departmental Non Departmental Information Management (Balance of Funding) 200,469 0 200,469 200,469 0 To support a number of initiatives in respect of improving the Council's information management in line with the transformation agenda and increasing the pace of change as outlined in the BV Review. This was the balance of funding to explore information management solutions in a strategic and coherent way £209k. Committed for MS 365 project - D Logan/I Jackson. Paper went to DMT in Dec. 200,469 0 0 186 Non Departmental Non Departmental Engagement with Hub North re provision of services for older adults and vulnerable people across Argyll and Bute 100,000 0 100,000 30,000 70,000 At the Council budget meeting February 23, an allocation of £0.1m from the Unallocated General Fund balance for the Health and Social Care Partnership to engage, in partnership with the Council, with Hub North to develop a strategic business case in relation to the provision of services for older adults and other vulnerable people across Argyll and Bute. It is intended that this will be spent on an on-going business case and options appraisal work with Hub and that a sizable proportion will be spent during 24/25 30,000 70,000 0 Page 121
Page 122
Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 187 Non Departmental Non Departmental Spend to Save Route Optimisation Software 82,775 0 82,775 4,800 77,975 One-off re-profiling gain as a result of the loans fund review to fund known liabilities/cost pressures as agreed at budget setting meeting in February 2020. The route optimisation project has been delayed due to staff turnover and absences, recent meetings involving the Council and Routewear have set out future objectives and the project has been extended to 2025-26. 4,800 77,975 0 188 Non Departmental Non Departmental CHARTS 80,000 55,000 25,000 25,000 0 At the Council Budget meeting on 22 February 2024, the Council committed to £0.075m one-off investment in CHARTS in response to an external funding request will be spent in 24-25. There remains £0.005m from a COVID earmarking for CHARTS as well. 80,000 0 0 194a Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£2m to balance 24-25 budget) 2,000,000 0 0 0 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 2,000,000 194b Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£3.75m allocation to capital plan) 0 3,750,000 0 3,750,000 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 0 3,750,000 194c Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£2m to be directed to transformation and projects that will save revenue in the future) 0 1,125,000 0 1,125,000 This is part of the revenue budget for 24-25 and is the saving on pension budgets resulting from the drop in employers pension rate. The total of £6.875m is split as follows: £2m to balance the budget, £3.75m allocation to capital plan, per budget meeting 22 February 24 and the balance of £1.125m going towards what will be total of £2m over the two years pot to be directed to transformation and projects that will save revenue in the future. 1,125,000 195 Non Departmental / Social Work Non Departmental Social Work Strathclyde Pension Fund Saving 24-25 0 3,053,000 0 3,053,000 This is part of the revenue budget for 24-25 and is the saving on Social Work pension budgets resulting from the drop in employers pension rate - to be held in Council reserves for utilisation by the HSCP in future. 3,053,000 196 Non Departmental Non Departmental Capital Plan 0 1,875,000 0 1,875,000 At the budget meeting on 22 February 2024, Council agreed to transfer £1.875m from the revenue budget over to the capital plan. 1,875,000 18,509,179 3,685,312 25,181,764 10,047,636 15,134,128 13,732,948 5,061,694 10,072,434 Page 122
Page 123
Classification: OFFICIAL# APPENDIX 2 Earmarked Reserves - Service Concessions As at 31 December 2024 Ref Department Service Description Opening Balance Budget Drawdown Remaining Balance Still to be drawndown in 24-25 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2024-25 Amount Planned to be Spent in 2025-26 Amount Planned to be Spent from 2026/27 onwards 001 Chief Executive's Unit Community Planning Service Concessions - Priorities Investment Fund (Area Plans) 200,000 86,838 113,162 13,162 100,000 As agreed by Policy and Resources Committee on 23 October 23 - drawdown of £200,000 from the Priorities Investment Fund to fund two temporary posts and associated costs to produce meaningful area plans 100,000 100,000 0 105 Executive Director (Kirsty Flanagan) Development and Economic Growth Service Concessions - Priorities Investment Fund (Project Officer for Housing Emergency) 200,000 0 200,000 70,000 130,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £200,000 from the Priorities Investment Fund to fund a Project Officer to assist in accelerating the work of the Housing Emergency. Dec 24 post holder now in place awaiting further instruction from Budget holder 70,000 130,000 0 133 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Biodegradable Municipal Waste (BMW) Ban 3,500,000 0 3,500,000 0 3,500,000 As agreed at Council meeting 23 February 2023 - Ensuring Argyll and Bute is able to better address the challenges faced by a remote/rural/ island region in complying with the forthcoming national BMW ban. £1.5m earmarked for revenue pressures with £2m for capital projects, mainly a Waste Transfer Station in Helensburgh. 0 3,500,000 0 138 Executive Director (Kirsty Flanagan) Roads & Infrastructure Service Concessions - Priorities Investment Fund (Strategic Development Framework) 450,000 0 450,000 225,000 225,000 As agreed by Policy and Resources Committee on 15 February 2024 - drawdown of £450,000 to procure consultancy support to assist in driving forward the Strategic Development Frameworks. 225,000 225,000 0 153 Non Departmental Non Departmental Service Concessions - Learning Estate Investment Strategy 8,000,000 0 8,000,000 0 8,000,000 As agreed at Council meeting 23 February 2023 - Signalling council’s commitment to working in partnership to secure new schools for Argyll and Bute, through substantial investment to support future-proofing of Argyll and Bute’s schools estate. 0 8,000,000 0 154 Non Departmental Non Departmental Service Concessions - Replace previous loans fund principal repayment holiday 5,400,000 0 5,400,000 5,400,000 0 As agreed at Council meeting 23 February 2023 - The one-off retrospective benefit will be used to replace exercising the principal repayment holiday that was previously agreed by Council. 5,400,000 0 0 155 Non Departmental Non Departmental Rothesay Pavilion - Capital Spends (previously service concession) 7,438,400 0 7,438,400 1,000,000 6,438,400 Original earmarking 155 was called Service Concessions - Rothesay Pavilion but renamed to Rothesay Pavilion - Capital spends. At Council Meeting September 24, it was agreed to merge the 4 capital earmarkings for Rothesay Pavilion into one line with the narrative indicating the sources. Earmarkings 012, 155, 167 and 170 combined under reference 155. ER155 - Service Concessions - Rothesay Pavilion £4.772m - As agreed at Council meeting 23 February 2023 - Building on previous commitments to securing a future for this building of international, national and local significance with additional contribution to the overall funding target which requires collective action; helping project to progress towards success with funding that supports completion of certain work stages and securing wind/watertight status. ER012 - Rothesay Pavilion Essential Repairs £306k - Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. ER167 - Rothesay Pavilion (Recovery and Renewal Fund) - £1.360m- As agreed at Council on 24 February 2022, this is provision for future recovery, regeneration and renewal, as well as any future pressures which may arise following the Covid-19 pandemic through a dedicated Recovery and Renewal Fund. ER170 - Underwriting development of Rothesay Pavilion - Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion (£1m). 1,000,000 6,438,400 0 156 Non Departmental Non Departmental Service Concessions - Priorities Investment Fund 4,742,000 758,000 3,984,000 0 3,984,000 As agreed at Council meeting 23 February 2023 - Safeguarding future investment in Priorities for Argyll and Bute by making long-term use of service concession gain to establish dedicated fund to lever in, secure and support key strategic investments in this year and future years. 758,000 3,984,000 0 157 Non Departmental Non Departmental Service Concessions - Roads Investment to Capital 3,546,000 0 3,546,000 0 3,546,000 As agreed at Council meeting 23 February 2023 - Augmenting overall allocation for roads repair and maintenance programme with additional funds to bring up to £8m total investment for 2024/25. 0 3,546,000 0 Page 123
Page 124
Classification: OFFICIAL# 163 Non Departmental Non Departmental Service Concessions - Capital Projects Inflation Pressures 2,000,000 0 2,000,000 0 2,000,000 As agreed at Council meeting 23 February 2023 -Boosting resilience of Capital Programme and providing added support as required for key capital/infrastructure projects - £2m. Further allocation agreed Council meeting 22 February 24 - increase capital contract earmarking to protect current capital projects in plan £0.297m 0 2,000,000 0 169 Non Departmental Non Departmental Service Concessions - Priorities Investment Fund (Capital Programme) 1,028,000 0 1,028,000 0 1,028,000 As agreed by Council on 22 February 2024- transfer of £1,028,000 from the Priorities Investment Fund to the Capital plan 1,028,000 0 173 Non Departmental Non Departmental Service Concessions - New refuse collection vehicles 700,000 0 700,000 700,000 0 As agreed at Council meeting 23 February 2023 - Enhancing waste and recycling uplift arrangements through placing orders for new refuse vehicles. 700,000 0 0 175 Non Departmental Non Departmental Service Concessions - Climate Change 640,000 27,185 612,815 0 612,815 As agreed at Council meeting 23 February 2023 - Continuing our track record of investing in climate change with funding to further enhance school estate climate change measures, with allocations for primary and secondary schools across the area in Campbeltown, Dunoon, Helensburgh, Lochgilphead, Oban and Rothesay. 27,185 612,815 0 182 Non Departmental Non Departmental Service Concessions - New Jet Patcher Vehicle 250,000 0 250,000 250,000 0 As agreed at Council meeting 23 February 2023 - Complementing multi- million pound capital investment in roads repair and maintenance with new jet patcher order to support delivery of programme. 250,000 0 0 183 Non Departmental Non Departmental Service Concessions - New Road Marking Vehicle 230,000 0 230,000 0 230,000 As agreed at Council meeting 23 February 2023 - Completing suite of investments in new fleet procurement, to support delivery of roads repair and maintenance programme, with order for additional road marking vehicle. 0 230,000 0 38,324,400 872,023 37,452,377 7,658,162 29,794,215 8,530,185 29,794,215 0 Page 124
Page 125
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY 2025-26 1.0 EXECUTIVE SUMMARY 1.1 The Local Government in Scotland Act 2003 requires the council to have regard to the CIPFA Code of Practice on Treasury Management (revised 2021), the Code. The Treasury Management Strategy, including prudential and treasury Indicators, and the Annual Investment Strategy is a key reporting requirement, providing a comprehensive statement of treasury management policies and planned activity for the financial year ahead. 1.2 This report, prepared in compliance with the Code, covers the following: • Capital Expenditure and Financing; • An economic and interest rate update; • Borrowing Strategy; • Investment Strategy; and • Prudential and Treasury Indicators 2025-28. 1.3 The report concludes that: a) The Treasury Management Strategy provides a comprehensive statement of treasury management policies and planned activities, covering the relevant treasury and prudential indicators, the current and projected debt positions, and the Annual Investment Strategy for 2025- 26. b) A key driver of treasury management activity is the council’s capital investment plans. Prudential indicators reflect the output from these plans and are designed to ensure that the council’s capital investment plans are affordable, prudent and sustainable. Within the range of prudential indicators, there are several key indicators to ensure that the authority operates its activities within well defined limits. c) Whilst the Capital Financing Requirement represents an underlying need to borrow, the council is currently maintaining an under-borrowed position. This strategy is prudent while medium and longer dated borrowing rates are expected to fall from their current levels, albeit that considerable uncertainty remains around interest rate forecasts. d) The council’s revenue budget includes appropriate provision for financing costs of capital expenditure. The key principles of the Page 125 Agenda Item 6
Page 126
1.4 borrowing strategy will be to minimise debt interest costs over the medium term and to achieve a more even spread in the debt maturity profile. e) The council’s investment priorities will be security, liquidity and yield (return). A prudent approach to managing investment risk has been adopted. Exposure to credit risk will be limited by ensuring that all investments are placed with the higher rated bodies. A balanced view of risk against return will be taken in respect of all investments. It is anticipated that return on investments will be limited in 2025-26, as a result of Bank Rate forecasts and the over-riding principle of risk aversion. The Policy and Resources Committee is requested to: a) Note the Treasury Management Strategy and Annual Investment Strategy for 2025-26, and the Prudential and Treasury Indicators for 2025-26 to 2027-28; and b) Refer the report to full Council for approval. Page 126
Page 127
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY 2025-26 2. INTRODUCTION 2.1 Background 2.1.1 The Chartered Institute of Public Finance and Accountancy (CIPFA) defines treasury management as ‘The management of the local authority’s borrowing, investments and cash flows, including its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.’ 2.1.2 The authority is required to operate a balanced revenue budget, which broadly means that cash raised during the year will meet cash expenditure. In addition, the authority’s capital plans indicate the borrowing and longer term cash flow planning, required to meet its capital spending obligations. The treasury management operation ensures that cash flow is adequately planned, with cash being available when it is needed. 2.1.3 Surplus monies are invested in low risk counterparties or instruments commensurate with the council’s low risk appetite, providing adequate liquidity initially before considering investment return. The management of longer term cash flow may involve arranging long or short term loans or using longer term cash flow surpluses. On occasion, when it is prudent and economic, any debt previously drawn may be restructured to meet risk or cost objectives. 2.1.4 The contribution the treasury management function makes to the authority is critical, as the balance of debt and investment operations ensure liquidity or the ability to meet spending commitments as they fall due, either on day to day revenue or for larger capital projects. The treasury operations will see a balance of the interest costs of debt and the investment income arising from cash deposits, impacting available resources. Since cash balances generally result from reserves and balances, it is paramount to ensure adequate security of the sums invested, as a loss of principal will in effect result in a loss to the General Fund balance. 2.2 Reporting Requirements 2.2.1 The authority is required to receive and approve, as a minimum, three main treasury reports each year: Page 127
Page 128
1) The Treasury Management Strategy, including prudential and treasury Indicators, and the Annual Investment Strategy (this report) – A forward looking report for the financial year ahead. 2) A Mid-year Treasury Management report – To update members on the capital and treasury position, amending prudential and treasury indicators, as necessary; and any required policy revisions. 3) An Annual Treasury Management report – A backward looking review, providing details of actual treasury activity, and prudential and treasury indicators, compared to the approved estimates. 2.2.2 The above reports require to be adequately scrutinised before being recommended to full Council for approval. This role will be undertaken by the Policy and Resources and Audit and Scrutiny Committees. In addition to the three major reports detailed above, quarterly reporting (end of June/end of December) is also required. These additional reports do not have to be reported to full Council but do require to be adequately scrutinised. This role will be undertaken by the Audit and Scrutiny Committee. 3. RECOMMENDATIONS 3.1 The Policy and Resources Committee is requested to: a) Note the Treasury Management Strategy and Annual Investment Strategy for 2025-26, and the Prudential and Treasury Indicators for 2025-26 to 2027-28; and b) Refer the report to full Council for approval. 4. TREASURY MANAGEMENT STRATEGY 2025-26 4.1 Capital Expenditure and Financing 4.1.1 The authority’s capital expenditure plans are the key driver of treasury management activity. The output of the capital expenditure plans is reflected in the prudential indicators, which are designed to assist members’ overview and confirm capital expenditure plans are prudent, affordable and sustainable. 4.1.2 The Capital Expenditure prudential indicator is a summary of the authority’s capital expenditure plans, both those agreed previously, and those forming part of this budget cycle. The following table summarises the capital expenditure plans, as outlined within the proposed capital plan 2025-28. Page 128
Page 129
2025-26 Estimate £m 2026-27 Estimate £m 2027-28 Estimate £m Executive Directorate (Douglas Hendry) Education 2.946 1.988 1.988 Facility Services - Shared Offices 3.681 0.667 0.382 Major Projects/CHORD 10.865 10.018 0.000 Executive Directorate (Kirsty Flanagan) ICT 1.352 0.820 0.688 Roads and Infrastructure 48.500 39.110 33.979 Development and Economic Growth 1.104 0.000 0.000 Health and Social Care Partnership 2.084 0.000 0.382 Live Argyll 0.474 0.468 0.382 Total 71.006 53.071 37.801 Note: The above financing need excludes other long-term liabilities, such as PFI and leasing arrangements that already include borrowing instruments. 4.1.3 The table below summarises the above capital expenditure plans and how these plans are being financed by capital or revenue resources. Any shortfall of resources results in a funding borrowing need. 2025-26 £m 2026-27 £m 2027-28 £m Gross Capital Expenditure 71.006 53.071 37.801 Financing: Specific Project Income 8.302 5.000 0.000 General Capital Grant 11.178 8.633 8.633 Asset Sales 0.750 0.500 0.500 Earmarked Reserves/Revenue 5.577 5.030 0.000 Total 25.807 19.163 9.133 Net Financing Need 45.199 33.908 28.668 Page 129
Page 130
4.2 The Authority’s Borrowing Need (the Capital Financing Requirement) 4.2.1 The second prudential indicator is the authority’s Capital Financing Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not yet been paid for from either revenue or capital resources. It is essentially a measure of the authority’s indebtedness and so its underlying borrowing need. Any capital expenditure, which has not immediately been paid for through a revenue or capital resource, will increase the CFR. 4.2.2 The CFR does not increase indefinitely, as prudent annual repayments from revenue need to be made, which reflect the useful life of capital assets financed by borrowing. This authority has chosen to make debt repayments through scheduled debt amortisation (loans fund charges). 4.2.3 The CFR includes any other long term liabilities (e.g., PPP schemes, finance leases). Whilst these increase the CFR, and therefore the authority’s borrowing requirement, these types of schemes include a borrowing facility by the PPP or lease provider and so the authority is not required to separately borrow for these schemes. The council hold long term liabilities within its CFR in this respect totalling an estimated £106.346m as at 31 March 2025. 4.2.4 Council is asked to approve the CFR projections outlined in the table below. 2025/26 Estimate £m 2026/27 Estimate £m 2027/28 Estimate £m Opening CFR 360 394 415 Movement in CFR 34 21 16 Closing CFR 394 415 431 Net financing need for the year (above) 45 34 29 Less Loans Fund principal repayments and other financing movements including new PPP/ finance lease arrangements and principal repayments 11 13 13 Movement in CFR 34 21 16 4.2.5 In addition to the CFR, there will be a refinancing requirement in respect of the repayment of PWLB loan principal of £1.680m each year. These repayments of principal relate to a 10 year PWLB loan (original principal £21m), which was taken on a fixed Equal Instalments of Principal (EIP) basis. All other PWLB loans will be repayable on maturity, with no maturity loans due to mature in the period to 31 March 2028. 4.2.6 There is also a potential for market loans to be recalled. The council has one outstanding market or LOBO loan for £5.255m, maturing 2048, with call dates every 6 months. This loan could potentially be recalled at the 22 June or 22 December call dates in any year. Page 130
Page 131
4.2.7 Any PWLB or LOBO loans maturing during the year will ultimately require replacement borrowing to maintain the council’s cashflow position. In addition, the council will continue to actively monitor potential restructuring opportunities, in order to generate cash savings, at a minimum risk, and improve the balance of the loan debt maturity profile. 4.3 Liability Benchmark 4.3.1 The authority is required to estimate and measure the Liability Benchmark for the forthcoming financial year and the following two financial years, as a minimum. There are four components to the Liability Benchmark, also reflected in the graph below: 1. Existing loan debt outstanding: the authority’s existing loans that are still outstanding in future years. 2. Loans CFR: this is calculated in accordance with the loans CFR definition in the Prudential Code and projected into the future based on approved prudential borrowing and planned Loans Fund advances/Loans Fund principal repayments. 3. Net loans requirement: this will show the authority’s gross loan debt less treasury management investments at the last financial year-end, projected into the future and based on its approved prudential borrowing, planned Loans Fund principal repayments and any other major cash flows forecast. 4. Liability benchmark (or gross loans requirement): this equals net loans requirement plus short-term liquidity allowance. Any years where actual loans are less than the benchmark indicate a future borrowing requirement. Any years where actual loans outstanding exceed the benchmark represent an overborrowed position, which will result in excess cash requiring investment. Page 131
Page 132
4.4 Core Funds and Expected Investment Balances 4.4.1 The application of resources to either finance capital expenditure or to support the revenue budget will have an ongoing impact on cash balances available for investment. It is anticipated that treasury investments will be held to manage day to day cashflow requirements, with balances expected to fluctuate throughout the year. Whilst the council holds significant usable reserve balances, due to the strategy of internal borrowing, as outlined within the Borrowing Strategy section, investment balances are expected to be low throughout the year. 4.5 Statutory Repayment of Loans Fund Advances 4.5.1 The authority is required to set out its policy for the statutory repayment of loans fund advances prior to the start of the financial year. The repayment of loans fund advances ensures that the council makes a prudent provision each year to pay off an element of the accumulated loans fund advances made in previous financial years 4.5.2 A variety of options are provided to councils, so long as a prudent provision is made each year. A review of the council’s loan fund advances was undertaken during 2019-20 to ensure the council continues to make a prudent provision each year for the repayment of loans fund advances. 4.5.3 For all new loans fund advances the policy for repayment will be in accordance with the following methodology, as appropriate: 1. Asset life method – loans fund advances will be repaid with reference to the life of an asset using a 5.1% annuity rate; 2. Funding / Income profile method – loans fund advances will be repaid by reference to an associated income stream. 4.5.4 Using the asset life method, the council is required to ensure that the debt is repaid over a period that is reasonably commensurate with that over which the capital expenditure provides benefits. The following table details the repayment period applicable to each asset type. Page 132
Page 133
4.6 Current Treasury Portfolio Position 4.6.1 The overall treasury management portfolio as at 31.3.24 and for the position as at 31 December 2024 are shown below for both borrowing and investments. TREASURY PORTFOLIO Actual 31 March 2024 Actual 31 December 2024 Treasury investments £m % £m % Banks 18.133 55% 10.016 30% Local Authorities 10.000 30% 0.000 0% Money Market Funds 1.400 4% 20.000 60% Third Party Loans (RSLs) 3.543 11% 3.408 10% Total treasury investments 33.076 100% 33.424 100% Treasury external borrowing PWLB 108.877 92% 107.197 95% Market Loans (LOBO) 5.255 4% 5.255 5% Temporary Borrowing* 5.256 4% 0.297 0% Local Bonds 0.018 0% 0.018 0% Total external borrowing 119.406 100% 112.767 100% *Note: This represents short term borrowing from various institutions. 4.6.2 The council’s forward projections for borrowing are summarised in the following table. This table shows the actual external debt, against the underlying capital borrowing need, (the Capital Financing Requirement), highlighting any over or under borrowing. Asset Type Repayment Period (Years) Land (including cemeteries) 100 Road Structures - Bridges, Retaining Walls, Sea Walls, Flood Defences 60 Piers and Harbours - Major Structural Work 60 Piers and Harbours - Medium Term Works e.g painting/cathodic protection 20 Piers and Harbours - Limited Lifespan Improvements 10 Roads and Footways 20 Street Lighting 30 Vehicles & Plant 7 IT Equipment 5 Major Regeneration Works (Public Realm etc) 60 New Builds including Schools 60 Buildings - Electrical 40 Buildings - Plant 20 Buildings - Roofing 35 Buildings - Windows & External Doors 20 Buildings - Structural 25 Page 133
Page 134
2025/26 Estimate £m 2026/27 Estimate £m 2027/28 Estimate £m Debt at 1 April 153 220 275 Expected change in Debt 67 55 37 Other long-term liabilities (OLTL) 106 101 95 Expected change in OLTL (5) (6) (6) Actual Gross Debt at 31 March 321 370 401 The Capital Financing Requirement 394 415 431 Under / (over) borrowing 73 45 30 4.6.3 Within the range of prudential indicators there are several key indicators to ensure that the authority operates its activities within well defined limits. One of these is that the authority needs to ensure that its gross debt does not, except in the short- term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2025/26 and the following two financial years. This allows some flexibility for limited early borrowing for future years but ensures that borrowing is not undertaken for revenue or speculative purposes. 4.6.4 The council’s Section 95 Officer reports that the council has complied with this prudential indicator in the current year and does not envisage difficulties for the future. This view takes account of current commitments, existing plans and the proposals in the 2025-26 Budget Pack in respect of the Capital Plan 2025-28. 4.7 Treasury Indicators: Limits to Borrowing Activity 4.7.1 The Operational Boundary. This is the limit beyond which external debt is not normally expected to exceed. In most cases, this would be a similar figure to the CFR but may be lower or higher depending on the levels of actual debt and the ability to fund under-borrowing by other cash resources. Operational Boundary 2025/26 Estimate £m 2026/27 Estimate £m 2027/28 Estimate £m Debt 293 320 341 Other long-term liabilities 101 95 90 Total 394 415 431 4.7.2 The Authorised Limit for external debt. This is a key prudential indicator and represents a control on the maximum level of borrowing. This represents a legal limit beyond which external debt is prohibited, and this limit needs to be set or revised by full Council. It reflects the level of external debt which, while not desired, could be afforded in the short term to manage day to day cashflow requirements but is not sustainable in the longer term. • This is the statutory limit determined under section 3 (1) of the Local Government Act 2003. The Government retains an option to control either the total of all local authority plans, or those of a specific authority, although this power has not yet been exercised. Page 134
Page 135
• Council is asked to approve the following Authorised Limit: Authorised Limit 2025/26 Estimate £m 2026/27 Estimate £m 2027/28 Estimate £m Debt 298 325 346 Other long-term liabilities 104 98 93 Total 402 423 439 4.8 Prospects for Interest Rates 4.8.1 The council’s treasury advisor has provided an update on the current economic position, given within Appendix 1. Part of this advisory service is also to assist the authority to formulate a view on interest rates. The following forecasts have been provided for short term (Bank Rate) and long term (PWLB certainty rates) borrowing. (a) Long term PWLB rates: PWLB rates Dec 2024 % March 2025 % March 2026 % March 2027 % Dec 2027 % 5 year 5.0 4.9 4.5 4.1 3.9 10 year 5.3 5.1 4.7 4.3 4.1 25 year 5.6 5.5 5.1 4.7 4.5 50 year 5.4 5.3 4.9 4.5 4.3 The current and expected interest rates for long term borrowing from the PWLB highlight a gradual decrease from the current position. The PWLB rates quoted (gilt yields plus 80 bps) take account of the application of a 0.2% certainty rate reduction, introduced by the government in return for council’s providing their borrowing forecast information. Argyll and Bute Council is able to access the certainty rate reduction. (b) Short term borrowing rates: Bank Rate Dec 2024 % March 2025 % March 2026 % March 2027 % Dec 2027 % 4.75 4.50 3.75 3.50 3.50 The ‘Bank Rate’ is the official Bank of England rate paid on commercial bank reserves. The current and Bank Rate forecasts also highlight an expected gradual decrease from the current position. Short term borrowing rates will generally fall in line with Bank Rate cuts. 4.8.2 Considerable uncertainty remains around interest rate forecasts. As all PWLB certainty rates are currently significantly above the longer term Bank Rate forecast (10 years 3.25%), borrowing strategies will need to be reviewed in Page 135
Page 136
that context. Overall, better value can be obtained at the shorter end. MUFG will continue to monitor economic and market developments as they unfold and advise the authority accordingly. Typically, forecasts are reviewed following the quarterly release of the Bank of England’s Monetary Policy Report but will be considered on an ad hoc basis, as required. 4.9 Borrowing Strategy 4.9.1 The council is currently maintaining an under borrowed position. This means that the capital borrowing need, (the Capital Financing Requirement), has not been fully funded with loan debt as cash supporting the authority’s reserve balances and cash flow has been used as a temporary measure (internal borrowing). This strategy is prudent while medium and longer dated borrowing rates are expected to fall from their current levels, albeit only once prevailing inflation concerns are addressed by restrictive near term monetary policy. 4.9.2 Short term borrowing from money markets or other local authorities is currently expected to be cheaper than long term borrowing and will therefore be attractive throughout the financial year. However, as with internal borrowing, short term savings by delaying new long term external borrowing requires to be balanced with potential additional long term costs. 4.9.3 Current PWLB rates are forecast to gradually decrease over the next couple of years. As a result, consideration will be given to the timing of any new fixed rate long term borrowing. Although more expensive in the short term, this may be more cost effective over the longer term and also provides an element of budget certainty in respect of future years. 4.9.4 The council’s annual revenue estimates include appropriate provision for financing costs of capital expenditure. The key principles of the strategy will be to minimise debt interest costs over the medium term and to achieve a more even spread in the debt maturity profile. It is anticipated that a range of solutions will be employed in order to mitigate against interest rate risk, and to provide longer term cost certainty, as outlined above. 4.9.5 Against the economic background and the risks within interest rate forecasts, caution will be adopted with the 2025-26 treasury operations. The Section 95 Officer, in conjunction with the treasury advisors, will monitor interest rate forecasts and adopt a pragmatic approach to changing circumstances, with any new borrowing reported to committee at the next available opportunity. 4.10 Policy on Borrowing in Advance of Need 4.10.1 The authority will not borrow more than or in advance of its needs purely in order to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates and will be considered carefully to ensure that value for money can be demonstrated and that the authority can ensure the security of such funds. Risks associated with any borrowing in advance activity will be subject to prior appraisal and subsequent reporting through the mid-year or annual reporting mechanism. Page 136
Page 137
4.11 Rescheduling 4.11.1 The principle reasons for debt rescheduling include: • The generation of cash savings; and • To enhance the balance of the debt maturity profile, mitigating the risk of refinancing at a higher rate of interest in any year in the future. 4.11.2 Opportunities for debt rescheduling within the current debt portfolio will be monitored on an ongoing basis throughout the year. There may be potential opportunities to generate savings and enhance the balance of the debt maturity profile by switching from long term debt to short term debt. However, these options would need careful consideration in light of the short term nature of potential savings and the likely cost of re-financing those short term loans on maturity, if required, together with any debt repayment premiums that may be incurred. Whilst premature redemption rates remain elevated, rescheduling opportunities to generate savings are not expected to be available. This would only expect to be undertaken, where a rebalancing of the portfolio, to provide more certainty, is considered appropriate. Any rescheduling undertaken will be reported to Council, at the earliest opportunity. 4.12 New Financial Institutions as a Source of Borrowing 4.12.1 Currently the PWLB Certainty Rate is set at gilts + 80 basis points. However, consideration may still need to be given to sourcing funding from the following sources: • Local authorities (primarily shorter dated maturities out to 3 years or so – generally still cheaper than the Certainty Rate). • Financial institutions (primarily insurance companies and pension funds but also some banks, out of forward dates where the objective is to avoid a “cost of carry” or to achieve refinancing certainty over the next few years). Our advisors will keep us informed as to the relative merits of each of these alternative funding sources. 4.13 Approved Sources of Long and Short Term Borrowing 4.13.1 A summary of the council’s approved sources and types of borrowing are set out within Appendix 2. 4.14 Treasury and Prudential Indicators 2025-28 4.14.1 A key driver of treasury management activity is the council’s capital investment plans. The treasury management function ensures that sufficient cash is available to meet capital spending commitments. Prudential indicators reflect the output from these plans and are designed to ensure that the council’s capital investment plans are affordable, prudent and sustainable. Required updates to the prudential and treasury indicators for 2024-25 were Page 137
Page 138
outlined within the Treasury Management Strategy Mid-year Review Report, approved by Council on 20 December 2024. The prudential and treasury indicators for 2025-26 to 2027-28 are outlined in Appendix 3 and reflect the proposed Capital Plan 2025-28. These indicators are relevant for the purpose of setting an integrated treasury management strategy. 5. ANNUAL INVESTMENT STRATEGY 5.1 Investment Policy 5.1.1 The council’s investment policy implements the requirements of the following: • Local Government Investments (Scotland) Regulations 2010, (and accompanying Finance Circular 5/2010), • CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes 2021 (“the Code”) 5.1.2 The council’s investment priorities, in order of importance, will be security, minimising the risk of any loss on the principal sum invested; portfolio liquidity, ensuring that cash is available when required; and yield (return), the rate of interest earned from the investment. The authority will aim to achieve the optimum return on its investments, commensurate with proper levels of security and liquidity, and with regard to the authority’s risk appetite. The risk appetite of the council will be low, with security of investments the key priority. 5.1.3 In the current economic climate, it is considered appropriate to maintain a degree of liquidity to cover cash flow needs but to also consider opportunities for ‘laddering’ investments for periods up to 12 months with high credit rated financial institutions, whilst investment rates remain elevated. 5.1.4 The borrowing of monies purely to invest or on-lend and make a return is not permitted and the council will not engage in such activity. The limit of investments will reflect the level of available council reserve fund balances and borrowing in advance to meet capital financing requirements, in line with the borrowing strategy, together with provision for managing the council’s day to day cash flow requirements. 5.1.5 The guidance from the Scottish Government and CIPFA places a high priority on the management of risk. This authority has adopted a prudent approach to managing risk and defines its risk appetite by the following means: 1. Minimum acceptable credit criteria are applied in order to generate a list of highly creditworthy counterparties. This also enables diversification and thus avoidance of concentration risk. The key ratings used to monitor counterparties are the short term and long term ratings. 2. Other information: ratings will not be the sole determinant of the quality of an institution; it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To achieve this consideration the council will engage with its Page 138
Page 139
advisors to maintain a monitor on market pricing such as ‘credit default swaps’ (CDS) and overlay that information on top of the credit ratings. 3. Other information sources used will include the financial press, share price and other such information pertaining to the financial sector, in order to establish the most robust scrutiny process on the suitability of potential investment counterparties. 4. This council has defined the list of types of investment instruments that the treasury management team are authorised to use and lending limits (amounts and maturity). A limit for the amount of its investments which are invested for longer than 365 days has also been set. 5. Investments will only be placed with counterparties from countries with a specified minimum sovereign rating and all investments will be denominated in sterling. However, the council will also pursue value for money in treasury management and will monitor the yield from investment income against appropriate benchmarks for investment performance throughout the year. 5.1.6 5.1.7 Investment instruments identified for potential use during the year, together with associated treasury risk mitigations and monetary limits, are outlined in Appendix 4. Information on Environmental, Social and Governance (ESG) considerations is also provided. Within the constraints of the policy, due consideration will be given to the diversification of investments, in order to limit a concentration of investments with too few counterparties or countries, and to ESG factors. There has been considerable change in the types of investment instrument brought to the market in recent years. Given the fluidity of this area, members will be kept informed and requested to approve the use of any new instruments, as appropriate, in order to allow maximum flexibility. 5.2 Creditworthiness Policy 5.2.1 The council applies the creditworthiness service provided by MUFG (formerly Link Group). This service employs a sophisticated modelling approach utilising credit ratings from the three main credit rating agencies - Fitch, Moody’s and Standard & Poor’s. The credit ratings of counterparties are supplemented with the following overlays: - 1. “watches” and “outlooks” from credit rating agencies; 2. CDS spreads that may give early warning of changes in credit ratings; 3. sovereign ratings to select counterparties from only the most creditworthy countries. 5.2.2 This modelling approach combines credit ratings, and any assigned Watches and Outlooks, in a weighted scoring system, which is then combined with an overlay of CDS spreads. The end product of this is a series of colour coded bands, which indicate the relative creditworthiness of counterparties. These colour codes are used by the authority to determine the suggested duration for investments. Page 139
Page 140
5.2.3 All credit ratings will be monitored on an ongoing basis throughout the year. Through its use of the MUFG creditworthiness service, the council is alerted to changes to ratings of all three agencies and will also be advised of information in movements in Credit Default Swap spreads and other market data on a daily basis. If a downgrade results in the counterparty / investment scheme no longer meeting the authority’s minimum criteria, its further use as a new investment will be withdrawn immediately. Sole reliance will not be placed on the use of this external service. All available information will be considered when making investment decisions. 5.2.4 5.2.5 The council will continue to limit exposure to credit risk by ensuring that all investments are placed with the higher rated bodies from a weekly credit list of worldwide potential counterparties. For illustration purposes, a snapshot of this counterparty list as at 7 February 2025 is provided in Appendix 5. The council essentially adopts a hybrid approach in formulating its creditworthiness policy. In addition to the MUFG creditworthiness service, which provides details of the most highly credit rated institutions (counterparties) and suggested investment durations, the council also places a monetary limit on each type of investment or counterparty, as outlined within Appendix 4. These investment criteria will be kept under review throughout the year and amended, if required, to ensure that they continue to be fit for purpose. 5.3 Investment Strategy 5.3.1 Investments will be made with reference to the core balance and cash flow requirements and the outlook for short term interest rates (i.e., rates for investments up to 12 months). Greater returns are usually obtainable by investing for longer periods. Accordingly, while most cash balances are required in order to manage the ups and downs of cash flow, where cash sums can be identified that could be invested for longer periods, the value to be obtained from longer term investments will be carefully assessed. 5.3.2 The current forecast shown in paragraph 4.8.1 includes a forecast for Bank Rate to fall to a low of 3.5%. However, as there are so many variables at this time, caution must be exercised in respect of all interest rate forecasts. The suggested budgeted investment earnings rates for returns on investments placed for periods up to about three months during each financial year are as follows: Average earnings in each year % 2025/26 4.10% 2026/27 3.70% 2027/28 3.50% Page 140
Page 141
5.3.3 For its cash flow generated balances, the authority will seek to utilise its business reserve instant access accounts, Money Market Funds and short- dated deposits, (overnight to 100 days), in order to benefit from the compounding of interest. 5.3.4 An investment treasury indicator and limit requires to be set in respect of total principal funds invested for greater than 365 days. These limits are set with regard to the authority’s liquidity requirements and to reduce the need for early sale of an investment and are based on the availability of funds after each year end. The council is asked to approve the following Treasury Indicator and limit: Upper limit for principal sums invested for longer than 365 days 2025/26 £m 2026/27 £m 2027/28 £m Principal sums invested for longer than 365 days 20 20 20 Current investments in excess of 1 year maturing in each year 0 0 0 5.4 Investment Performance / Risk Benchmarking 5.4.1 The Section 95 Officer will continue to monitor the economic environment and adopt a pragmatic approach to changing circumstances. A balanced view of risk against return will be taken in respect of all investments. The authority may use an investment benchmark to assess the investment performance of its investment portfolio of overnight, 7 day, 1, 3, 6 or 12 month compounded SONIA (Sterling Overnight Index Average), as appropriate. However, it is anticipated that return on investments will be limited in 2025-26, as a result of Bank Rate forecasts and the over-riding principal of risk aversion. Investment activity will be reported at the end of the financial year, as part of the Annual Treasury Report. 5.5 Non-treasury investments 5.5.1 Non-treasury investments are defined as the following categories: • All shareholding, unit holding and bond holding, including those in a local authority owned company; • Loans to a local authority company or other entity formed by a local authority to deliver services; • Loans made to third parties; and • Investment property. 5.5.2 Any such finance arrangements or loans would be subject to specific committee approval. The authority may make loans to third parties, where this is consistent with meeting the service objectives of the council and for which, specific statutory provision exists. For service reasons, loans to third parties may be offered at an interest rate below the market rate. Where the loan is advanced at less than a market interest rate, there is an associated loss of investment return, which would Page 141
Page 142
otherwise have been earned on these resources. Any cost to the council in this respect will be reflected in the authority’s annual accounts. All loans to third parties will be recognised as investments and detailed within the Annual Investment Report. 6. Capital Strategy 6.1 The CIPFA 2021 Prudential and Treasury Management Codes places a requirement on local authorities to prepare a Capital Strategy. The Capital Strategy demonstrates how capital expenditure, capital financing and treasury management activity contribute to the provision of services and longer term policy objectives of the council. It also provides an overview of how associated risk is managed and the implications for future financial sustainability. An updated Capital Investment Strategy was approved by Policy and Resources Committee in August 2023. This will be reviewed and updated, as appropriate, as part of a planned review of capital arrangements, to be undertaken during the 2025-26. 7. Training 7.1 The CIPFA Code requires the proper officer to ensure that members with responsibility for treasury management receive adequate training. This especially applies to Members responsible for scrutiny. Members of the Audit and Scutiny Committee received training from the council’s treasury advisors, Link Group in October 2024, to assist with this scrutiny role. Members are advised to notify Financial Services as/when they feel further training sessions would be beneficial. Furthermore, the training needs of treasury management officers are periodically reviewed to ensure appropriate treasury management knowledge and skills for those responsible for management, delivery, governance and decision making. 8. Policy on Use of External Service Providers 8.1 The authority uses MUFG (formerly Link Group), as its external treasury management advisors, to acquire access to specialist skills and resources. However, it is recognised that responsibility for treasury management decisions remains with the council. All decisions will be undertaken with due regard to all available information, including from our treasury advisers. For short term market borrowing and investments, the council utilises a number of brokers to access sterling cash markets. This ensures that the council ensures best value in daily cash flow management. 9. Scheme of Delegation and Role of the Section 95 Officer 9.1 The treasury management scheme of delegation, together with the treasury management role of the Section 95 officer and nominated Member, are outlined in Appendix 6. 10. CONCLUSION 10.1 The Treasury Management Strategy provides a comprehensive statement of treasury management policies and planned activities, covering the relevant treasury and prudential indicators, the current and projected debt positions, and the Annual Investment Strategy for 2025-26. Page 142
Page 143
10.2 10.3 10.4 10.5 A key driver of treasury management activity is the council’s capital investment plans. Prudential indicators reflect the output from these plans and are designed to ensure that the council’s capital investment plans are affordable, prudent and sustainable. Within the range of prudential indicators, there are several key indicators to ensure that the authority operates its activities within well defined limits. Whilst the Capital Financing Requirement represents an underlying need to borrow, the council is currently maintaining an under-borrowed position. This strategy is prudent while medium and longer dated borrowing rates are expected to fall from their current levels, albeit that considerable uncertainty remains around interest rate forecasts. The council’s revenue budget includes appropriate provision for financing costs of capital expenditure. The key principles of the borrowing strategy will be to minimise debt interest costs over the medium term and to achieve a more even spread in the debt maturity profile. The council’s investment priorities will be security, liquidity and yield (return). A prudent approach to managing investment risk has been adopted. Exposure to credit risk will be limited by ensuring that all investments are placed with the higher rated bodies. A balanced view of risk against return will be taken in respect of all investments. It is anticipated that return on investments will be limited in 2025-26, as a result of Bank Rate forecasts and the over-riding principal of risk aversion. 11. IMPLICATIONS 11.1 Policy Sets the policy for borrowing and investment decisions. 11.2 Financial Provides the Treasury Management Strategy for 2025-26, including the Annual Investment Strategy. 11.3 Legal None 11.4 HR None 11.5 Fairer Duty Scotland: 10.5.1 Equalities – protected characteristics None 10.5.2 Socio-economic Duty None 10.5.3 Islands None 11.6 Climate Change None 11.7 Risk Provides an overview of treasury management and investment risk, and how these risks are managed. 11.8 Customer Service - None None 11.9 The Rights of the Child (UNCRC) None Page 143
Page 144
Kirsty Flanagan Executive Director/S95 Officer 10 February 2025 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES: Appendix 1 – Economic Background Appendix 2 - Approved Sources and Types of Borrowing Appendix 3 – Treasury and Prudential Indicators 2025-28 Appendix 4 – Permitted Investments Appendix 5 – Example Weekly Counterparty List Appendix 6 – Scheme of Delegation; Section 95 Officer and Nominated Member Roles For further information contact: Carolyn Earl, Acting Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk Page 144
Page 145
APPENDIX 1 ECONOMIC BACKGROUND (to 12th December 2024) The third quarter of 2024 (July to September) saw: • GDP growth stagnating in July following downwardly revised Q2 figures (0.5% q/q) • A further easing in wage growth as the headline 3myy rate (including bonuses) fell from 4.6% in June to 4.0% in July; • CPI inflation hitting its target in June before edging above it to 2.2% in July and August; • Core CPI inflation increasing from 3.3% in July to 3.6% in August; • The Bank of England initiating its easing cycle by lowering interest rates from 5.25% to 5.0% in August and holding them steady in its September meeting; • 10-year gilt yields falling to 4.0% in September. Over the aforementioned period, the economy’s stagnation in June and July pointed more to a mild slowdown in UK GDP growth than a sudden drop back into a recession. However, in the interim period, to 12 December, arguably the biggest impact on the economy’s performance has been the negative market sentiment in respect of the fallout from the Chancellor’s Budget on 30 October. If we reflect on the 30 October Budget, our central case is that those policy announcements will prove to be inflationary, at least in the near-term. The Office for Budgetary Responsibility and the Bank of England concur with that view. The latter have the CPI measure of inflation hitting 2.5% y/y by the end of 2024 and staying sticky until at least 2026. The Bank forecasts CPI to be elevated at 2.7% y/y (Q4 2025) before dropping back to sub-2% in 2027. Nonetheless, since the Budget, the October inflation print has shown the CPI measure of inflation bouncing up to 2.3% y/y with the prospect that it will be close to 3% by the end of the year before falling back slowly through 2025. The RPI measure has also increased significantly to 3.4% y/y. How high inflation goes will primarily be determined by several key factors. First amongst those is that the major investment in the public sector, according to the Bank of England, will lift UK real GDP to 1.7% in 2025 before growth moderates in 2026 and 2027. The debate around whether the Government’s policies lead to a material uptick in growth primarily focus on the logistics of fast-tracking planning permissions, identifying sufficient skilled labour to undertake a resurgence in building, and an increase in the employee participation rate within the economy. There are inherent risks to all the above. The worst-case scenario would see systemic blockages of planning permissions and the inability to identify and resource the additional workforce required to deliver large-scale IT, housing and infrastructure projects. This would lead to upside risks to inflation, an increased prospect of further Government borrowing & tax rises in the June Page 145
Page 146
2025 Spending Review (pushed back from the end of March), and a tepid GDP performance. Regarding having a sufficiently large pool of flexible and healthy workers, the initial outlook does not look bright. Research from Capital Economics has alluded to an increase of some 500,000 construction workers being needed to provide any chance of the Government hitting its target of 300,000 new homes being built in each of the next five years (234,000 net additional dwellings in England in 2022/23). But the last time such an increase was needed, and construction employment is currently at a nine-year low, it took 12 years to get there (1996 to 2008). Also note, as of October 2024, job vacancies in the construction sector were still higher than at any time in the 20 years preceding the pandemic. Currently, it also seems likely that net inward migration is set to fall, so there is likely to be a smaller pool of migrant workers available who, in the past, have filled the requirement for construction worker demand. The Government plans to heavily promote training schemes, particularly to the one million 16- to 24- year-olds who are neither in education nor work. But it is arguable as to whether the employee shortfall can be made up from this source in the requisite time, even if more do enter the workforce. Against, this backdrop, there may be a near-term boost to inflation caused by a wave of public sector cash chasing the same construction providers over the course of the next year or so, whilst wages remain higher than the Bank currently forecasts because of general labour shortages, including in social care where Government accepts there is a 150,000 shortfall at present. Unemployment stands at a low 4.3% (September), whilst wages are rising at 4.3% y/y (including bonuses) and 4.8% (excluding bonuses). The Bank would ideally like to see further wage moderation to underpin any further gradual relaxing of monetary policy. Indeed, over the next six months, the market is currently only pricing in Bank Rate reductions in February and May – which would see Bank Rate fall to 4.25% - but further cuts, thereafter, are highly likely to be even more data-dependent. If we focus on borrowing, a term we are likely to hear throughout 2025 is “bond vigilante”. Essentially, this represents a generic term for when the market is ill at ease with the level of government borrowing and demands a higher return for holding debt issuance. In the UK, we do not need to go back too far to recall the negative market reaction to the Truss/Kwarteng budget of 2022. But long- term borrowing rates have already gradually moved back to those levels since their recent low point in the middle of September 2024. Of course, the UK is not alone in this respect. Concerns prevail as to what the size of the budget deficit will be in the US, following the election of Donald Trump as President, and in France there are on-going struggles to form a government to address a large budget deficit problem too. Throw into the mix the uncertain outcome to German elections, and there is plenty of bond investor concern to be seen. Staying with the US, Donald Trump’s victory paves the way for the introduction/extension of tariffs that could prove inflationary whilst the same Page 146
Page 147
could be said of further tax cuts. Invariably the direction of US Treasury yields in reaction to his core policies will, in all probability, impact UK gilt yields. So, there are domestic and international factors that could impact PWLB rates whilst, as a general comment, geo-political risks continue to abound in Europe, the Middle East and Asia. In the past month, the US Core CPI measure of inflation has indicated that inflation is still a concern (3.3% y/y, 0.3% m/m), as has the November Producer Prices Data (up 3.0 y/y v a market estimate of 2.6% y/y, 0.4% m/m v an estimate of 0.2% m/m) albeit probably insufficient to deter the FOMC from cutting US rates a further 0.25% at its December meeting. However, with Trump’s inauguration as President being held on 20 January, further rate reductions and their timing will very much be determined by his policy announcements and their implications for both inflation and Treasury issuance. Looking at gilt movements in the first half of 2024/25, and you will note the 10- year gilt yield declined from 4.32% in May to 4.02% in August as the Bank’s August rate cut signalled the start of its loosening cycle. More recently, however, 10 year gilt yields have spiked back up to 4.35%. The FTSE 100 reached a peak of 8,380 in the third quarter of 2024 (currently 8.304), but its performance is firmly in the shade of the US S&P500, which has breached the 6,000 threshold on several occasions recently, delivering returns upwards of 25% y/y. The catalyst for any further rally (or not) is likely to be the breadth of AI’s impact on business growth and performance. MPC meetings: 9 May, 20 June, 1 August, 19 September, 7 November 2024 • On 9 May, the Bank of England’s Monetary Policy Committee (MPC) voted 7-2 to keep Bank Rate at 5.25%. This outcome was repeated on 20th June. • However, by the time of the August meeting, there was a 5-4 vote in place for rates to be cut by 25bps to 5%. However, subsequent speeches from MPC members have supported Governor Bailey’s tone with its emphasis on “gradual” reductions over time. • Markets thought there may be an outside chance of a further Bank Rate reduction in September, following the 50bps cut by the FOMC, but this came to nothing. • On 7 November, Bank Rate was cut by 0.25% to 4.75%. The vote was 8-1 in favour of the cut but the language used by the MPC emphasised “gradual” reductions would be the way ahead with an emphasis on the inflation and employment data releases, as well as geo-political events. In the following chart, despite a considerable gilt market rally in mid-September, rates started and finished the six-month period under review in broadly the same position. Page 147
Page 148
PWLB RATES 02.04.24 - 30.09.24 HIGH/LOW/AVERAGE PWLB RATES FOR 02.04.24 – 30.09.24 3.00 3.40 3.80 4.20 4.60 5.00 5.40 5.80 6.20 6.60 7.00 PWLB Certainty Rate Variations 2.4.24 to 30.9.24 2-Apr-24 30-Sep-24 Average 1 Year 5 Year 10 Year 25 Year 50 Year 02/04/2024 5.39% 4.72% 4.80% 5.28% 5.07% 30/09/2024 4.95% 4.55% 4.79% 5.33% 5.13% Low 4.78% 4.31% 4.52% 5.08% 4.88% Low date 17/09/2024 17/09/2024 17/09/2024 17/09/2024 17/09/2024 High 5.61% 5.14% 5.18% 5.61% 5.40% High date 29/05/2024 01/05/2024 01/05/2024 01/05/2024 01/05/2024 Average 5.21% 4.76% 4.88% 5.35% 5.14% Spread 0.83% 0.83% 0.66% 0.53% 0.52% Page 148
Page 149
APPENDIX 2 Approved Sources of Long and Short-term Borrowing On Balance Sheet Fixed Variable PWLB • • UK Municipal Bond Agency • • Local Authorities • • Banks • • Pension Funds • • Insurance Companies • • UK National Wealth Fund • • Market (long-term) • • Market (temporary) • • Market (LOBOs) • • Stock Issues • • Local Temporary • • Local Bonds • Local Authority Bills • • Overdraft • Negotiable Bonds • • Internal (capital receipts & revenue balances) • • Commercial Paper • Medium Term Notes • Finance Leases • • Page 149
Page 150
This page is intentionally left blank
Page 151
Prudential and Treasury Indicators - 2025-28 Estimates Prudential indicators for prudence 1) Capital expenditure Gross capital expenditure Less Financing Net financing need (in year borrowing requirement) 2) Capital financing requirement (CFR) Total CFR at 1 April Total CFR 31 March Movement in CFR Represented by: Net in year borrowing requirement (above) Less Principal repayments and other financing movements Total 3) Authorised limit for borrowing Authorised limit for long-term liabilities Authorised limit for external debt 4) Operational boundary for borrowing Operational boundary for long-term liabilities Operational boundary for external debt 5) Gross debt and the CFR Gross debt at 31 March Total CFR at 31 March Gross debt less the CFR at 31 March Prudential indicators for affordability 6) Ratio of financing costs to net revenue stream Treasury indicators - borrowing limits 7) Maturity structure of fixed rate borrowing Upper Lower Upper Lower Upper Lower a) Under 12 months 30% 0% 30% 0% 30% 0% b) 12 months and within 24 months 30% 0% 30% 0% 30% 0% c) 24 months and within 5 years 30% 0% 30% 0% 30% 0% d) 5 years and within 10 years 40% 0% 40% 0% 40% 0% e) 10 years and above 100% 0% 100% 0% 100% 0% 8) Limits on fixed and variable rate borrowing Upper Lower Upper Lower Upper Lower a) Fixed rate 100% 0% 100% 0% 100% 0% b) Variable rate 60% 0% 60% 0% 60% 0% Treasury indicator - investment 9) Upper limit on principal sums invested for over 365 days £m £m £m 71 53 38 26 19 9 45 34 29 APPENDIX 3 2025-26 2026-27 2027-28 Estimate Estimate Estimate 21 £m £m £m 360 394 415 34 16 394 415 431 101 95 90 394 415 431 £m £m £m 293 320 341 104 98 93 402 423 439 £m £m £m 298 325 346 20 £m £m £m 321 370 401 394 415 431 -73 -45 -30 1634 21 % % % 4.9% 5.2% 5.6% £m £m £m 20 20 45 34 29 11 13 13 Page 151
Page 152
APPENDIX 3 Notes to Prudential and Treasury Indicators Prudential Indicators - Prudence Affordability Prudential Indicators Ratio of Financing Costs to Net Revenue Stream Maturity Structure of Borrowing This indicator identifies the trend in the cost of capital (borrowing and other long term obligation costs), against the net revenue stream. The estimates of financing costs include current commitments and the proposals in the 2025-26 Budget Pack. These gross limits are set to reduce the authority’s exposure to large, fixed rate sums falling due for refinancing, and are required for upper and lower limits. Indicators 1 - 5 above cover the overall capital and control of borrowing prudential indicators. The authority’s capital expenditure plans are the key driver of treasury management activity. The output of the capital expenditure plans is reflected in the prudential indicators, which are designed to assist members’ overview and confirm capital expenditure plans. Within the overall framework, prudential indicators are required to assess the affordability of the capital investment plans. These provide an indication of the impact of the capital investment plans on the authority’s overall finances. Page 152
Page 153
: APPENDIX 4 Permitted Treasury Investments Note: Limits are given as a monetary value in £ or as a percentage of the overall investment portfolio. Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits Cash type instruments a. Deposits with the Debt Management Account Facility (UK Government) (Very low risk) This is a deposit with the UK Government and as such counterparty and liquidity risk is very low, and there is no risk to value. Deposits can be between overnight and 6 months. Little mitigating controls required. As this is a UK Government investment the monetary limit is unlimited to allow for a safe haven for investments. £unlimited, maximum 6 months. £unlimited, maximum 6 months. b. Deposits with other local authorities or public bodies (Very low risk) These are considered quasi UK Government debt and as such counterparty risk is very low, and there is no risk to value. Liquidity may present a problem as deposits can only be broken with the agreement of the counterparty, and penalties can apply. Little mitigating controls required for local authority deposits, as this is a quasi UK Government investment. Non-local authority deposits will follow the approved credit rating criteria. £unlimited, maximum 2 year. Limit of £10m per local Authority or public body £unlimited, maximum 2 years. Page 153
Page 154
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits Deposits with other non-local authority bodies will be restricted to the overall credit rating criteria. c. Money Market Funds (MMFs) – CNAV/LVNAV/VNAV(Low to very low risk) Pooled cash investment vehicle which provides very low counterparty, liquidity and market risk. These will primarily be used as liquidity instruments. Funds will only be used where the MMFs has a “AAA” rated status from either Fitch, Moody’s or Standard and Poor’s. £15m per fund 100% d. Ultra short dated bond funds (low risk) Pooled cash investment vehicle which provides very low counterparty, liquidity and market risk. These will primarily be used as liquidity instruments. Funds will only be used where the have a “AAA” rated status from either Fitch, Moody’s or Standard and Poor’s. £15m per fund 100% e. Call account deposit accounts with financial institutions (banks and building societies) (Low risk depending on credit rating) These tend to be low risk investments, but will exhibit higher risks than categories (a), (b) and (c) above. Whilst there is no risk to value with these types of investments, liquidity is high and investments can be returned at short notice. The counterparty selection criteria restricts lending only to high quality counterparties, utilising MUFG creditworthiness service. £20m per UK banking group; £15m per non-UK banking group 100% f. Term deposits with financial institutions (banks and building societies) (Low to These tend to be low risk investments, but will exhibit higher risks than categories (a), (b) and (c) above. Whilst there is The counterparty selection criteria restricts lending only to high quality counterparties, utilising MUFG creditworthiness service. £20m per UK banking group; 100% Page 154
Page 155
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits medium risk depending on period & credit rating) no risk to value with these types of investments, liquidity is low and term deposits can only be broken with the agreement of the counterparty, and penalties may apply. £15m per non-UK banking group g. Government Gilts and Treasury Bills (Very low risk) These are marketable securities issued by the UK Government and as such counterparty and liquidity risk is very low, although there is potential risk to value arising from an adverse movement in interest rates (no loss if these are held to maturity. Little counterparty mitigating controls are required, as this is a UK Government investment. The potential for capital loss will be reduced by limiting the maximum monetary and time exposures. £10m maximum 1 year. 100% maximum 1 year. h. Certificates of deposits with financial institutions (Low risk) These are short dated marketable securities issued by financial institutions and as such counterparty risk is low, but will exhibit higher risks than categories (a), (b) and (c) above. There is risk to value of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates (no loss if these are held to The counterparty selection criteria restricts lending only to high quality counterparties, utilising MUFG creditworthiness service. £10m per counterparty maximum 1 year. 20% maximum 1 year. Page 155
Page 156
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits maturity). Liquidity risk will normally be low. i. Structured deposit facilities with banks and building societies (escalating rates, de- escalating rates etc.) (Low to medium risk depending on period & credit rating) These tend to be medium to low risk investments, but will exhibit higher risks than categories (a), (b) and (c) above. Whilst there is no risk to value with these types of investments, liquidity is very low and investments can only be broken with the agreement of the counterparty (penalties may apply). The counterparty selection criteria restricts lending only to high quality counterparties, utilising MUFG creditworthiness service. £20m per UK banking group; £15m per non-UK banking group 50% j. Corporate bonds (Medium to high risk depending on period & credit rating) These are marketable securities issued by financial and corporate institutions. Counterparty risk will vary and there is risk to value of capital loss arising from selling ahead of maturity if combined with an adverse movement in interest rates. Liquidity risk will be low. The counterparty selection criteria restricts lending only to high quality counterparties, utilising MUFG creditworthiness service. £5m and maximum 1 year. 20% and maximum 1 year. Other types of investments a. Investment properties These are non-service properties which are being held pending disposal or for a longer term In larger investment portfolios some small allocation of property based investment may £10m 20%. Page 156
Page 157
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits rental income stream. These are highly illiquid assets with high risk to value (the potential for property prices to fall or for rental voids). counterbalance/compliment the wider cash portfolio. Property holding will be re-valued regularly and reported annually with gross and net rental streams. b. Loans to third parties, including soft loans These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each third party loan requires Member approval and each application is supported by the service rational behind the loan and the likelihood of partial or full default. £10m and maximum 5 years. 10% and maximum 5 years. c. Shareholdings in a local authority company These are service investments which may exhibit market risk and are likely to be highly illiquid. Each equity investment in a local authority company requires Member approval and each application will be supported by the service rational behind the investment and the likelihood of loss. 50% 20% d. Non-local authority shareholdings These are non-service investments which may exhibit market risk, be only considered for longer term investments and will be likely to be liquid. Any non-service equity investment will require separate Member approval and each application will be supported by the service rational behind the investment and the likelihood of loss. 5% 100% Page 157
Page 158
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits e. Loans to third parties as part of the Council’s Empty Homes Strategy These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each third party loan requires Section 95 Officer approval and each application is supported by the service rational behind the loan and the likelihood of partial or full default. Each funding request will be accompanied by financial projections and be subject to an assessment of the project and borrower. £1.5m and a maximum of 10 years. N/A f. Loans to third parties as part of the Council’s SHF Front Funding Facility These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each third party loan requires Section 95 Officer approval and each application is supported by the service rational behind the loan and the likelihood of partial or full default. Each funding request will be accompanied by financial projections and be subject to an assessment of the project and borrower. £5m and a maximum of 3 years. N/A g. Loans to third parties as part of the Council’s Long Term Loan Funding to RSL’s These are service investments either at market rates of interest or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each third party loan requires Section 95 Officer approval and each application is supported by the service rational behind the loan and the likelihood of partial or full default. Each funding request will be accompanied by financial projections £5m and a maximum of 30 years. N/A Page 158
Page 159
: Type of Investment Treasury Risks Mitigating Controls Council Limits Common Good Limits and be subject to an assessment of the project and borrower. h. Hub Co sub debt These are non-service investments which may exhibit market risk, be only considered for longer term investments and will be likely to be highly illiquid. Any non-service equity investment will require separate Member approval and each application will be supported by the service rational behind the investment and the likelihood of loss. £10m N/A i. Investment in a project run by a Local Authority or Local Authority Joint Committee These are investments which may exhibit market risks and will only be considered for medium to longer term investments Each investment requires approval by the Section 95 Officer up to £250,000, and, above this level, member approval. Each application will be supported by the service rationale behind the investment and the likelihood of loss. £10m N/A Page 159
Page 160
: Treasury Risks All of the specific investment instruments outlined above are subject to the following risks: 1. Credit and counterparty risk This is the risk of failure by a counterparty (bank or building society) to meet its contractual obligations to the organisation particularly as a result of the counterparty’s diminished creditworthiness, and the resulting detrimental effect on the organisation’s finances. There are no counterparties where this risk is zero although AAA rated organisations have a very high level of creditworthiness. 2. Liquidity risk This is the risk that instant access to cash will not be available when it is needed. Investments can range from being instant access to term, that is, money is locked in until an agreed maturity date. However, some forms of investment, for example, gilts can usually be sold immediately if the need arises. 3. Market risk This is the risk that, through adverse market fluctuations in the value of the principal sums an organisation borrows and invests, its stated treasury management policies and objectives are compromised, against which effects it has failed to protect itself adequately. However, in certain circumstances, exposure to market risk may be sought, with a view to obtaining a long term increase in value. 4. Interest rate risk This is the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the organisation’s finances, against which the organisation has failed to protect itself adequately. This authority has set limits for its fixed and variable rate exposure in the Prudential Indicators within this report. 5. Legal and regulatory risk This is the risk that the organisation itself, or an organisation with which it is dealing in its treasury management activities, fails to act in accordance with its legal powers or regulatory requirements, and that the organisation suffers losses accordingly. The level of both risk exposure and liquidity influences the rate of return on investments. Generally, the lower the risk or the higher the liquidity, the lower the rate of return. Controls on Treasury Risks 1. Credit and counterparty risk The council utilises the creditworthiness service provided by its treasury advisors to determine which counterparties and countries are of high creditworthiness to enable investments to be made safely. 2. Liquidity risk The council has a cash flow forecasting model to enable it to determine how long investments can be made for and how much can be invested. 3. Market risk The council generally does not purchase investment instruments which are subject to market risk in terms of fluctuation in their value. The authority may purchase treasury bills as their value does not vary much during their short life. 4. Interest rate risk The council manages this risk by having a view of the future course of interest rates and formulates a treasury management strategy accordingly. The strategy aims to minimise net interest costs, consistent with control of risk. Page 160
Page 161
: 5. Legal and regulatory risk The council will not undertake any form of investing until it has ensured that it has necessary powers and also complied with all regulations. Unlimited investments Regulation 24 states that an investment can be shown in tables 1 & 2 as being ‘unlimited’ in terms of the maximum amount or percentage of the total portfolio that can be put into that type of investment. However, it also requires that an explanation must be given for using that category. The authority has given the following types of investments an unlimited category: 1. Debt Management Agency Deposit Facility. This is considered to be the lowest risk form of investment available to local authorities as it is operated by the Debt Management Office which is part of H.M. Treasury i.e., the UK Government’s sovereign rating stands behind the DMADF. It is also a deposit account and avoids the complications of buying and holding Government issued treasury bills or gilts. 2. High creditworthiness banks and building societies. While an unlimited amount of the investment portfolio may be put into banks and building societies with high creditworthiness, the council will ensure diversification of its portfolio by ensuring that no more than £20m of the total portfolio can be placed with any one institution or group at any one time. Environmental, Social and Governance (ESG) Considerations The Treasury Management Code states that “The organisation's credit and counterparty policies should set out its policy and practices relating to environmental, social and governance (ESG) investment considerations. This is a developing area, and it is not implied that the organisation’s ESG policy will currently include ESG scoring or other real- time ESG criteria at individual investment level.” ESG investment considerations are about understanding the ESG risks that an entity is exposed to and evaluating how well it manages these risks. It is not the same as Socially Responsible Investing, (typically where you apply negative screens), and equally, it is not the same as Sustainable Investing, (investing in products / companies based on expected sustainable and beneficial societal impact, alongside a financial return). The council is supportive of the Principles for Responsible Investment (www.unpri.org) and will seek to bring ESG factors into the decision making process for investments. Within this, the council is also appreciative of the Statement on ESG in Credit Risk and Ratings, which commits signatories to incorporating ESG into credit ratings and analysis in a systemic and transparent way. Each of the mainstream credit rating agencies are signatories to this statement. All the main rating agencies now incorporate ESG risks, alongside more traditional financial risk metrics, when assessing counterparty ratings. As such, their incorporation is already being done, to an extent, by the council’s use of the creditworthiness service provided by the council’s treasury advisors. In addition, our treasury advisors continue to Page 161
Page 162
: look at ways in which these factors can be incorporated into their creditworthiness assessment service. Whilst the council is supportive of responsible investment, it should be noted that ESG information will still be secondary to the requirement for the council to adhere to the Code priorities of Security, Liquidity and Yield. Ethical principles must play a subordinate role to these priorities. Furthermore, limiting the potential counterparty options could reduce diversification and increase risk, therefore, these considerations need to be carefully balanced. Page 162
Page 163
APPENDIX 5 MUFG Weekly Credit List 07/02/2026 Long Term Short Term Long Term Short Term Long Term Short Term Suggested Duration Suggested Duration (Watch/Outloo k Adjusted) Suggested Duration (CDS Adjusted with manual override) Australia AAA Aaa AAA Not Applicable Not Applicable Not Applicable Australia and New Zealand Banking Group Ltd. AA- F1+ Aa2 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Commonwealth Bank of Australia AA- F1+ Aa2 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Macquarie Bank Ltd. A+ F1 Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths National Australia Bank Ltd. AA- F1+ Aa2 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Westpac Banking Corp. AA- F1+ Aa2 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Belgium AA- Aa3 AA Not Applicable Not Applicable Not Applicable BNP Paribas Fortis A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths KBC Bank N.V. A+ F1 Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Canada AA+ Aaa AAA Not Applicable Not Applicable Not Applicable Bank of Montreal AA- F1+ Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Bank of Nova Scotia AA- F1+ Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Canadian Imperial Bank of Commerce AA- F1+ Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths National Bank of Canada A+ F1 Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Royal Bank of Canada AA- F1+ Aa1 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Toronto-Dominion Bank AA- F1+ Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Denmark AAA Aaa AAA Not Applicable Not Applicable Not Applicable Danske A/S A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Finland AA+ Aa1 AA+ Not Applicable Not Applicable Not Applicable Nordea Bank Abp AA- F1+ Aa3 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths OP Corporate Bank plc WD WD Aa3 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths France AA- Aa3 AA- Not Applicable Not Applicable Not Applicable BNP Paribas A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Credit Agricole Corporate and Investment Bank A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Credit Agricole S.A. A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Credit Industriel et Commercial A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Societe Generale A- F1 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths Germany AAA Aaa AAA Not Applicable Not Applicable Not Applicable Bayerische Landesbank A+ F1+ Aa2 P-1 NR NR O - 12 mths O - 12 mths O - 12 mths Commerzbank AG WD WD A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths Deutsche Bank AG A- F2 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths DZ BANK AG Deutsche Zentral- Genossenschaftsbank AA- F1+ Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Landesbank Baden-Wuerttemberg A+ F1+ Aa2 P-1 NR NR O - 12 mths O - 12 mths O - 12 mths Landesbank Berlin AG Aa3 P-1 O - 12 mths O - 12 mths O - 12 mths Landesbank Hessen-Thueringen Girozentrale A+ F1+ Aa2 P-1 NR NR O - 12 mths O - 12 mths O - 12 mths Landwirtschaftliche Rentenbank AAA F1+ Aaa P-1 AAA A-1+ P - 24 mths P - 24 mths P - 24 mths Norddeutsche Landesbank Girozentrale A+ F1+ Aa2 P-1 NR NR O - 12 mths O - 12 mths O - 12 mths NRW.BANK AAA F1+ Aa1 P-1 AA A-1+ P - 24 mths P - 24 mths P - 24 mths Netherlands AAA Aaa AAA Not Applicable Not Applicable Not Applicable ABN AMRO Bank N.V. A F1 Aa3 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths BNG Bank N.V. AAA F1+ Aaa P-1 AAA A-1+ P - 24 mths P - 24 mths P - 24 mths Cooperatieve Rabobank U.A. A+ F1 Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths ING Bank N.V. AA- F1+ Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Nederlandse Waterschapsbank N.V. Aaa P-1 AAA A-1+ P - 24 mths P - 24 mths P - 24 mths Norway AAA Aaa AAA Not Applicable Not Applicable Not Applicable DNB Bank ASA Aa1 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Qatar AA Aa2 AA Not Applicable Not Applicable Not Applicable Qatar National Bank A+ F1 Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Singapore AAA Aaa AAA Not Applicable Not Applicable Not Applicable Fitch Rating Moody's Ratings S&P Ratings Page 163
Page 164
DBS Bank Ltd. AA- F1+ Aa1 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Oversea-Chinese Banking Corp. Ltd. AA- F1+ Aa1 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths United Overseas Bank Ltd. AA- F1+ Aa1 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Sweden AAA Aaa AAA Not Applicable Not Applicable Not Applicable Skandinaviska Enskilda Banken AB AA- F1+ Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Svenska Handelsbanken AB AA F1+ Aa2 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths Swedbank AB AA- F1+ Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Switzerland AAA Aaa AAA Not Applicable Not Applicable Not Applicable UBS AG A+ F1 Aa2 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths United Arab Emirates AA Aa2 AA Not Applicable Not Applicable Not Applicable First Abu Dhabi Bank PJSC AA- F1+ Aa3 P-1 AA- A-1+ O - 12 mths O - 12 mths O - 12 mths United Kingdom AA- Aa3 AA Not Applicable Not Applicable Not Applicable Collateralised LA Deposit* Y - 60 mths Y - 60 mths Y - 60 mths Debt Management Office Y - 60 mths Y - 60 mths Y - 60 mths Multilateral Development Banks Y - 60 mths Y - 60 mths Y - 60 mths Supranationals Y - 60 mths Y - 60 mths Y - 60 mths UK Gilts Y - 60 mths Y - 60 mths Y - 60 mths Al Rayan Bank Plc A2 P-1 R - 6 mths R - 6 mths R - 6 mths Bank of Scotland PLC (RFB) AA- F1+ A1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Barclays Bank PLC (NRFB) A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Barclays Bank UK PLC (RFB) A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Clydesdale Bank PLC A- F1 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths Co-operative Bank PLC (The) BBB+ F1 A3 P-2 G - 100 days G - 100 days G - 100 days Goldman Sachs International Bank A+ F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Handelsbanken Plc AA F1+ AA- A-1+ O - 12 mths O - 12 mths O - 12 mths HSBC Bank PLC (NRFB) AA- F1+ A1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths HSBC UK Bank Plc (RFB) AA- F1+ A1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Lloyds Bank Corporate Markets Plc (NRFB) AA- F1+ A1 P-1 A A-1 O - 12 mths O - 12 mths O - 12 mths Lloyds Bank Plc (RFB) AA- F1+ A1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths National Bank Of Kuwait (International) PLC A+ F1 A A-1 R - 6 mths R - 6 mths R - 6 mths National Westminster Bank PLC (RFB) A+ F1 A1 P-1 A+ A-1 R - 6 mths O - 12 mths O - 12 mths NatWest Markets Plc (NRFB) A+ F1 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths Santander Financial Services plc (NRFB) A+ F1 A1 P-1 A- A-2 R - 6 mths R - 6 mths R - 6 mths Santander UK PLC A+ F1 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths SMBC Bank International Plc A- F1 A1 P-1 A A-1 R - 6 mths R - 6 mths R - 6 mths Standard Chartered Bank A+ F1 A1 P-1 A+ A-1 R - 6 mths O - 12 mths O - 12 mths The Royal Bank of Scotland Plc (RFB) A+ F1 A1 P-1 A+ A-1 R - 6 mths O - 12 mths O - 12 mths Coventry Building Society A- F1 A3 P-2 G - 100 days G - 100 days G - 100 days Leeds Building Society A- F1 A3 P-2 G - 100 days G - 100 days G - 100 days Nationwide Building Society A F1 A1 P-1 A+ A-1 R - 6 mths R - 6 mths R - 6 mths Principality Building Society BBB+ F2 Baa1 P-2 N/C - 0 mths N/C - 0 mths N/C - 0 mths Skipton Building Society A- F1 A2 P-1 R - 6 mths R - 6 mths R - 6 mths Yorkshire Building Society A- F1 A2 P-1 R - 6 mths R - 6 mths R - 6 mths United States AA+ Aaa AA+ Not Applicable Not Applicable Not Applicable Bank of America N.A. AA F1+ Aa1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Bank of New York Mellon, The AA F1+ Aa1 P-1 AA- A-1+ P - 24 mths P - 24 mths P - 24 mths Citibank N.A. A+ F1 Aa3 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths JPMorgan Chase Bank N.A. AA F1+ Aa1 P-1 AA- A-1+ P - 24 mths P - 24 mths P - 24 mths Wells Fargo Bank, NA AA- F1+ Aa1 P-1 A+ A-1 O - 12 mths O - 12 mths O - 12 mths Page 164
Page 165
APPENDIX 6 TREASURY MANAGEMENT SCHEME OF DELEGATION SECTION 95 OFFICER AND NOMINATED MEMBER ROLES Council • Overall responsibility for Treasury Management Strategy. • Adoption of Treasury Policy Statements. • Receive an Annual Report and other reports on the Treasury Management Operation and on the exercise of delegated treasury management powers. Policy and Resources Committee • Responsibility for the overall investment of money under the control of the Council. • Keeping under review the level of borrowing. • Approval of Annual Strategy Statement. • Receiving and reviewing reports on treasury management policies, practices and activities. • Approval of Treasury Policy Statements. • Implementation and monitoring of Treasury Management Policies and Practices. Audit and Scrutiny Committee • Review the overall internal and management control framework related to the treasury function. • Review internal and external audit reports related to treasury management. • Review provision in the internal and external audit plans to ensure there is adequate audit coverage of treasury management. • Monitor progress with implementing recommendations in internal and external audit reports. • Reviewing the treasury management policy and procedures and making recommendations to the responsible body. Role of the nominated Elected Member (Policy Lead for Finance and Commercial Services): • Acting as spokesperson for treasury management. • Taking a lead for elected Members in overseeing the operation of the treasury function. • Review the treasury management policy, strategy and reports. • Support and challenge the development of treasury management. Role of the Section 95 Officer: • Recommending clauses, treasury management policy/practices for approval, reviewing the same regularly, and monitoring compliance. Page 165
Page 166
• Submitting regular treasury management policy reports. • Suubmitting budgets and budget variations. • Receiving and reviewing management information reports. • Reviewing the performance of the treasury management function. • Ensuring the adequacy of treasury management resources and skills, and the effective division of responsibilities within the treasury management function. • Ensuring the adequacy of internal audit, and liaising with external audit. • Recommending the appointment of external service providers. • Reviewing and considering risk management in terms of treasury activities. • preparation of a capital strategy to include capital expenditure, capital financing, non- financial investments and treasury management, with a long term timeframe • ensuring that the capital strategy is prudent, sustainable, affordable and prudent in the long term and provides value for money • ensuring that due diligence has been carried out on all treasury and non-financial investments and is in accordance with the risk appetite of the authority • ensure that the authority has appropriate legal powers to undertake expenditure on non-financial assets and their financing • ensuring the proportionality of all investments so that the authority does not undertake a level of investing which exposes the authority to an excessive level of risk compared to its financial resources • ensuring that an adequate governance process is in place for the approval, monitoring and ongoing risk management of all non-financial investments and long term liabilities • provision to members of a schedule of all non-treasury investments including material investments in subsidiaries, joint ventures, loans and financial guarantees ensuring that members are adequately informed and understand the risk exposures taken on by an authority • ensuring that the authority has adequate expertise, either in house or externally provided, to carry out the above • creation of Treasury Management Practices which specifically deal with how non- treasury investments will be carried out and managed, to include the following: - o Risk management (TMP1 and schedules), including investment and risk management criteria for any material non-treasury investment portfolios; o Performance measurement and management (TMP2 and schedules), including methodology and criteria for assessing the performance and success of non-treasury investments; o Decision making, governance and organisation (TMP5 and schedules), including a statement of the governance requirements for decision making in relation to non-treasury investments; and arrangements to ensure that appropriate professional due diligence is carried out to support decision making; Page 166
Page 167
o Reporting and management information (TMP6 and schedules), including where and how often monitoring reports are taken; o Training and qualifications (TMP10 and schedules), including how the relevant knowledge and skills in relation to non-treasury investments will be arranged. The nominated Elected Member (Policy Lead for Finance and Commercial Services) • Acting as spokesperson for treasury management. • Taking a lead for elected Members in overseeing the operation of the treasury function. • Review the treasury management policy, strategy and reports. • Support and challenge the development of treasury management. Page 167
Page 168
This page is intentionally left blank
Page 169
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20th FEBRUARY 2025 ARGYLL AND BUTE UK SHARED PROSPERITY FUND INVESTMENT PLAN, TRANSITION YEAR 2025/26 1.0 HEADLINES 1.1 The purpose of this paper is for members of the Policy and Resources Committee to approve the Argyll and Bute UK Shared Prosperity Fund (UKSPF) Transitional Year Investment Plan for 2025/26 (see Appendix A) to deliver the council’s allocation of just over £1.4 million. 1.2 The UKSPF is a successor to the previous EU structural funds. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. The UK Government has announced there will be a final, transitional, year of UKSPF funding in financial year 2025/26 at a 40% reduction from previous years (Table 1). A replacement scheme is likely to run from 2026/27 onwards with more information to follow through 2025. 1.3 The original Argyll and Bute Council UKSPF allocations were to support delivery over three financial years, specifically the final four months of 2022-23, all of 2023-24 and 2024-25. 1.4 The interventions outlined in the Argyll and Bute UKSPF Investment Plan are all aligned to three key investment priorities: communities and place; supporting local business; and people and skills, where each priority has predefined interventions, outputs and outcomes. UKSPF interventions are delivered by a mixture of council teams and third sector external delivery partners. The overall portfolio, administration, and compliance of the UKSPF as well as reporting to the UK Government is managed by the UK and External Policy Team, Economic Growth. 1.5 Local authorities were responsible for the development and preparation of the original UKSPF investment plans in conjunction with local partners/stakeholders. The investment plan was approved by the Policy and Resources Committee in August 2022. 1.6 Economic Growth is proposing to use the allocation in the transitional year of the UKSPF (2025/26) to fund additional activity in interventions from the first phase of the UKSPF. These interventions were subject to a competitive scoring process in 2022 and were approved as part of the original investment plan. 1.7 An indicative investment plan is proposed (see Appendix A). As with the original phase of the UKSPF, it is likely that council officers, working with delivery partners and the UK Page 169 Agenda Item 7
Page 170
Government, will be able to make amendments and re-allocations as needed to ensure the best use of the funds throughout the year. 1.8 An approved investment plan will allow both council departments and external delivery partners to plan and budget for the next financial year, ensuring efficient spending of the funds and helping organisational resilience. 2.0 RECOMMENDATIONS 2.1 Members are asked to: • Note the content of this report. • Approve Argyll and Bute UKSPF Transitional Year Investment Plan for 2025/26 appended to this report (Appendix A), subject to addressing any amendments/comments from Policy and Resources Committee members. • Endorse that a progress report on the investment plan for 2025/26 will be presented at the Policy and Resources Committee in October 2025. 3.0 DETAIL 3.1 In 2022 the UK Government published the full prospectus of the UKSPF, a successor to the previous EU structural funds. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. The Investment Priorities were: • Communities and place; • Supporting local business; and • People and skills. 3.2 The UK Government published individual council allocations of both core UKSPF funding and Multiply (ring-fenced funding for adult numeracy and literacy programmes which is not being continued in the next financial year). The UKSPF is primarily revenue spend but with a minimum capital spend. For the next financial year 2025/26 capital spending makes up a significantly higher proportion than previous years. A summary of the Argyll and Bute allocations are outlined in Table 1 below. 3.3 Annual allocations are received in advance, with underspend to be returned. Funds from this first phase cannot be carried forward into the next financial year 2025/26, meaning that in this financial year there remains significant pressure to deliver as much activity as possible by March 31st 2025. 3.4 The initial investment plan interventions were subject to a robust competitive process, with proposals being scored according to an agreed matrix. Full political approval was granted for the 2022-25 Investment Plan in the summer 2022, and delivery proceeded following approval of the investment plan by the UK Government. Page 170
Page 171
Table 1: Argyll and Bute UKSPF Allocation 2022/23 2023/24 2024/25 2025/2026 Extension Total allocation In-year allocations (%) Core UKSPF 12.1% 24.3% 63.6% - Core UKSPF £451,343 £902,686 £2,365,038 £1,474,117 £5,193,184 In-year allocations (%) Multiply 30.2% 34.9% 34.9% - *Multiply £234,698 £270,806 £270,806 - £776,310 Total £686,041 £1,173,492 £2,365,844 £1,474,117 £5,969,494 4% of total: admin fee - fund delivery £27,442 £46,940 £105,434 £58,965 £238,781 In-year allocations (%) capital 10.4% 12.5% 17.9% 28.3% - Capital: minimum spend of total Core UKSPF only, not Multiply £46,940 £112,836 £423,342 £417,980 £1,001,097 Available allocation (exc. admin) 2022/23 2023/24 2024/25 2025/2026 Total allocation Core UKSPF £433,289 £866,579 £2,270,436 £1,415,152 £4,985,456 Multiply £225,310 £259,974 £259,974 £745,258 * Multiply is an adult numeracy programme, which will support people with no or low-level maths skills get back into work The scheme will offer free personal tutoring, digital training, and flexible courses to improve adults’ confidence and numeracy skills. Full details on Multiply can be found here N.B. Figures subject to rounding 3.5 On the 13th of December 2024, the UK Government communicated to Local Authorities that there would be a further year of UKSPF funding, with allocations published online alongside technical guidance. Whilst the UK Government does not require an updated investment plan for next financial year, Economic Growth is proposing a delivery plan to allow for proper financial planning and effective allocation of resources. 3.6 The funding available for 2025/26 is 60% of the funding allocated for 2024/25 (the year which had the largest allocation). Given this significant reduction and the single- year award we are not proposing to create new interventions within the UKSPF. This would require a lengthy open and competitive process and the re-assessment of any new activity against subsidy control legislation. This would create a disproportionate administrative burden on both the council and its external partners, many of whom are third sector organisations who are already under significant pressure. This could also create the potential for delays, with knock-on effects for both projects and partners. 3.7 Economic Growth hopes to deliver a further transition year of activity to interventions funded through the initial investment plan. These have a track record of success and have built momentum and capacity across the main phase of the UKSPF. They have the potential to deliver strong outcomes with few risks to delivery. Economic Growth Officers have worked closely with internal and external delivery partners to allocate Page 171
Page 172
UKSPF funds to ensure effective and efficient delivery of interventions outlined in the investment plan for the transition year 2025/26. 3.8 In early January 2025, Economic Growth contacted all delivery partners of the UKSPF asking for proposals for additional activity in the 2025/26 financial year. By liaising with partners and encouraging them to present a minimum viable project, the proposed 2025/26 investment plan (Appendix A) has been created. This plan will utilise the full allocation and based on experience from the initial phase of the UKSPF and should also have enough flexibility to re-allocation of funds if required as activity progresses. 3.9 It has been advised by the UK Government that an updated Memorandum of Understanding, Payment Schedule, and Grant Offer letter will be issued to the council at the beginning of the financial year. It is hoped, subject to advice by Finance, that preparatory work can commence immediately upon approval of the Transition Year Investment Plan by the Policy and Resources committee. This will allow internal and external delivery partners to start delivery of activity as soon as possible in the new financial year. It is proposed to undertake an interim evaluation of the Argyll and Bute UKSPF Investment Plan 2022-25 to inform the council’s approach to any replacement scheme from 2026/27 onwards. A final evaluation of the UKSPF as a whole to include the outcomes and impacts for the interventions outlined in the Argyll and Bute Transition Year Investment Plan for 2025/26 will be presented to Policy and Resources Committee in late 2026. 4.0 CONCLUSION 4.1 The purpose of this paper is for members of the Policy and Resources Committee to approve the Argyll and Bute UK Shared Prosperity Fund (UKSPF) Transition Year Investment Plan 2025/26 (Appendix A). 4.2 The Investment Plan been developed and prepared in conjunction with internal council colleagues and external partners. It is intended to deliver additional activity through interventions from the original investment plan. It has been designed to allow for the delivery of as much additional activity as possible, and support the on-going resilience of the delivery partners, including council teams. 4.3 Approval, subject to any changes or recommendations, will allow relevant council teams and partners to plan for the next financial year and commence preparatory work, subject to advice from Finance and final confirmation of funding by the UK Government. 5.0 IMPLICATIONS 5.1 Policy - This project aligns with the proposals set in the UKSPF full prospectus 5.2 Financial - Argyll and Bute Council has been given an allocation of just over £1.4 million from the UKSPF to be spent by the end of March 2026. This is accompanied by the ability to use up to 4% of the allocation to fund administration support for the Page 172
Page 173
delivery of the Argyll and Bute UKSPF Transitional Investment Plan. 5.3 Legal - All appropriate legal implications will be taken into consideration. 5.4 HR - Given the revenue element of the funding, staffing requirements can be built in under activity to deliver the predefined interventions, outputs and outcomes. Staffing resources put in place to administer, monitor and evaluate the overall delivery of the Argyll and Bute UKSPF Investment Plan will continue for a further year. 5.5 Fairer Scotland Duty - The Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on particular public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio- economic disadvantage, when making strategic decisions and how this has been implemented. 5.5.1 Equalities - All activities will comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations. 5.5.2 Socio-economic Duty - All intervention activities will comply with the council’s socio- economic duty. 5.5.3 Islands - Interventions under the UKSPF will be delivered across the Argyll and Bute area, including island communities. 5.6 Climate Change – There are a number of net zero and climate resilience interventions across the proposed investment plan extension. 5.7 Risk – If the Argyll and Bute UKSPF Transitional Investment Plan is not approved for submission in the associated tight timescale, this could make it significantly more difficult for both council departments and external deliver partners to deliver activity in the 2025/26 financial year. 5.8 Customer Service – None. 5.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Councillor Math Campbell-Sturgess: Policy Lead for Business Development 6th February 2025 For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk Page 173
Page 174
Ishabel Bremner, Economic Growth Manager ishabel.bremner@argyll-bute.gov.uk Kevin Grant, Senior Development Officer, UK and External Policy Team, Economic Growth kevin.grant@argyll-bute.gov.uk APPENDICES Appendix A: Argyll and Bute UKSPF Transitional Year Investment Plan (draft) Page 174
Page 175
Appendix A: Argyll and Bute UKSPF Transitional Year Investment Plan (draft) Note: Rules within the UKSPF require us to meet a minimum capitalisation threshold of £417,980. We will be permitted to transfer funds from revenue to capital but not vice versa. As a result, we have over- allocated the capital allocation and under-allocated revenue accordingly to ensure that minimum capitalisation thresholds are met and there is sufficient flexibility in the event of a capital underspend. The overall allocation is not over-committed. Intervention Priority Deliverer Total Capital Total Revenue Combined Total Vibrant & Living Places Communities & Place ABC Projects & Regen 100,000 - 100,000 Business Support Local Business ABC Bus Gateway 150,000 50,000 200,000 Work Placement People & Skills ABC Employability - 250,000 250,000 Training People & Skills ABC Employability - 50,000 50,000 Flexible Food Fund Communities & Place ABC Rev & Ben - 122,400 122,400 Community Hubs Communities & Place ABC Com Dev 80,000 80,000 Marketing Posts Communities & Place AICT - 42,000 42,000 Digital Infrastructure Local Business AICT - 12,000 12,000 Robotics Academy Local Business SAMS 116,022 87,000 203,022 Graduate Placement Local Business HIE - 22,000 22,000 Adult Literacy People & Skills LiveArgyll - 102,124 102,124 Wider Achievement People & Skills ABC Education 37,500 37,500 Graduate Aprenticeships Local Business InspirAlba 21,193 21,193 Supported Employment People & Skills InspirAlba - 112,283 112,283 Positive Destinations People & Skills TSI - 60.630 60,630 Total 446,022 969,130 1,415,152.32 Allocation 417,980 997,172.32 1,415,152.32 Page 175
Page 176
This page is intentionally left blank
Page 177
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 20 FEBRUARY 2025 FUTURE OF THE ARGYLL AND BUTE FLEXIBLE FOOD AND FUEL FUND 1.0 EXECUTIVE SUMMARY 1.1 The Argyll and Bute Flexible Food and Fuel Fund (FFFF) continues to be a vital resource in addressing food and fuel insecurity, with significant achievements since its inception. 1.2 From January 2021 to October 2024, the FFFF delivered £4.354 million in client gains, supporting approximately 2,000 households and 800 children. The Fund is a key part of the Council’s response to the cost of living crisis, as recognised in the Council’s Strategic Risk Register. 1.3 A contingency plan for funding the FFFF for 2025/26 is outlined, leveraging a combination of the UK Shared Prosperity Fund (SPF) and earmarked reserves for Revenues and Benefits administration works. RECOMMENDATIONS Policy and Resources Committee is requested to approve the plan to extend the Flexible Food and Fuel Fund to 31 March 2026, supported by the following funding sources: • UK Shared Prosperity Fund (60% of £204,000): £122,400 • Earmarked reserves: £189,600 • Total cost for 2025/26: £312,000 Page 177 Agenda Item 8
Page 178
2.0 INTRODUCTION 2.1 The FFFF was established to combat food and fuel poverty exacerbated by economic pressures and rising living costs. The Fund has become an essential service for vulnerable residents of Argyll and Bute, providing direct financial assistance, income maximisation, and debt advice in response to the cost of living crisis. 2.2 However, the Fund faces uncertainty due to the potential depletion of Covid related food and fuel insecurity reserves and unknown future funding from the UK SPF. 3.0 RECOMMENDATIONS 3.1 Policy and Resources Committee is requested to approve the plan to extend the Flexible Food and Fuel Fund to 31 March 2026, supported by the following funding sources: • UK Shared Prosperity Fund (60% of £204,000): £122,400 • Earmarked reserves: £189,600 • Total cost for 2025/26: £312,000 4.0 DETAIL Achievements 4.1 Since its inception, the FFFF has: • Client Gains: Delivered £4.354 million in financial benefits, averaging a return of £4 for every £1 spent. • Households Supported: Assisted 1,982 households, including 800 children. o 1,405 households received direct grant support. o 821 households were supported with income maximisation and financial advice. o A total of 3,258 individuals benefited. • Community Impact: Reduced financial stress, improved well-being, and provided stability to vulnerable households. • National Recognition: Received awards for its innovative approach to tackling food and fuel poverty. Financial Overview 4.2 The projected costs for 2025/26 are as follows: • Contract Costs with Bute Advice Centre: £168,000 (£42,000 per quarter, used to employ 2FTE Welfare Rights Officers and 2 FTE Energy Advice Assistants to support referrals to the FFFF made by from Community Foodbanks or from the Council’s Scottish Welfare Fund team). • Grant Costs, the value of grants paid by the Council’s benefits team to households to cover immediate food and fuel cost hardship and Page 178
Page 179
incentivise them to engage with advice agencies for wider support (£12,000/month): £144,000 • Total Cost: £312,000 Funding Sources 4.3 The UK Government has confirmed the funding available to the Council through the UK SPF in 2025/2026 and colleagues in Economic Development have confirmed that £122,400 can be made available for FFFF in the year. 4.4 Revenues and Benefits management has identified £189,600 of earmarked reserves. These funds were initially allocated by both the UK and Scottish Government for works carried out by staff delivering various temporary grant schemes related to Covid recovery and the cost of living crisis on their behalf, these schemes are listed in paragraph 4.6. These grant schemes have now closed and the work complete. As these earmarked funds were received after the work had been completed these are now surplus funds and can be reallocated. 4.5 Reallocating them to support the Flexible Food and Fuel Fund is both pragmatic and aligned with Council priorities, given the fund’s links to the original purpose of these monies and its role as the primary cost-of-living mitigation support scheme as outlined on the Council’s Strategic Risk Register. 4.6 The proposed funding plan includes: • UK Shared Prosperity Fund: Funding for 2025/26 Estimated at circa 60% of £204,000 (£122,400). • Earmarked reserves for monies received by the Council for the delivery of Covid and Cost of Living Fund supports to the public after the pandemic: o Cost of Living Payments for Council Tax: £72,600 o COVID Tier 4 funding for vulnerable people: £32,000 o Pandemic Support payments: £52,000 o Admin funding for the UK government department for Business, Energy and Industrial Strategy (BEIS) energy grants: £33,000 o Total reserves: £189,600 • Total funding; o UK SPF £122,400 o Reserves £189,600 o Total - £312,000 Beyond March 2026: Future Funding Opportunities 4.7 The Council, in collaboration with its partners Bute Advice Centre and ALIenergy, is actively exploring longer-term funding options to sustain the FFFF. A promising opportunity is the newly launched Fairer Life Chances programme by the Big Lottery Fund. This programme supports projects aimed at improving outcomes for children, young people, and families, or enhancing Page 179
Page 180
health and access to support for individuals experiencing poverty, disadvantage, or discrimination. 4.8 The fund offers grants of up to £500,000 for projects spanning up to five years. While most awards are expected to be smaller than the maximum amount, the programme encourages match funding from applicants, which aligns well with the Council’s ability to use earmarked reserves outlined in 4.6 above, as a match funding source. 4.9 There is no specific deadline for this programme, allowing applications to be submitted at any time. If the Council supports this funding proposal, preparations will begin to develop and submit an application, leveraging existing reserves to maximise the chances of success. Should any application made to the programme be successful we will return to the Council with plans to extend the FFFF beyond 31 March 2026. Next Steps 4.10 The next steps include; 1. Extend the existing contract for the delivery of FFFF with Bute Advice Centre for a further year to 31 March 2026. 2. Engage Funding Bodies: Continue discussions with the Big Lottery Fund and other organisations about funding to support the service beyond March 2026 as necessary. 3. Prepare Contingency Plan: Finalise plans to address any shortfall in funding beyond March 2026 however if no additional funding is identified for beyond March 2026 the Fund will come to an end at that point. 5.0 CONCLUSION 5.1 The Flexible Food and Fuel Fund (FFFF) has delivered exceptional value to the community, supporting nearly 2,000 households and achieving significant financial gains. It plays a central role in the Council's response to the cost of living crisis, as reflected in the Strategic Risk Register, and is integral to addressing food and fuel insecurity in Argyll and Bute. 5.2 Despite its successes, the Fund faces funding uncertainty, with a critical gap projected for 2025/26. The proposed contingency plan ensures the continuation of this essential service for one additional year, leveraging existing reserves and anticipated UK SPF allocations. Sustaining the FFFF reinforces the Council’s commitment to mitigating the impacts of economic pressures on its residents while aligning with its strategic objectives. 5.3 Looking ahead, the Council remains dedicated to securing sustainable funding solutions to ensure the FFFF continues to support vulnerable households in the face of ongoing economic challenges. Page 180
Page 181
6.0 IMPLICATIONS 6.1 Policy - The continuation of the Flexible Food and Fuel Fund aligns with the Council’s strategic objectives to mitigate food and fuel insecurity and address the cost-of-living crisis. This proposal reinforces the Council’s commitment to supporting vulnerable households and is in line with the priorities identified in the Strategic Risk Register. 6.2 Financial - The proposed funding model for 2025/26 utilises £189,600 in earmarked reserves and £122,400 from the UK Shared Prosperity Fund. This approach ensures no additional burden on the Council’s general fund while sustaining an essential service. 6.3 Legal - Extending the contract with the Bute Advice Centre for an additional year requires compliance with procurement regulations and Council governance procedures. Legal services will ensure all agreements are executed appropriately. 6.4 HR - No direct HR implications arise from this proposal. However, the continuation of the FFFF ensures that partner organisations, such as Bute Advice Centre, can maintain staffing levels to deliver the service effectively. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - The FFFF promotes equality by directly supporting households with diverse needs, including those with protected characteristics. The service’s accessibility ensures broad reach and impact. 6.5.2 Socio-economic Duty - The Fund addresses socio-economic inequalities by targeting food and fuel poverty among vulnerable households, directly improving quality of life and reducing hardship. 6.5.3 Islands - The FFFF’s support extends to island communities within Argyll and Bute, ensuring that these geographically isolated areas are not disproportionately impacted by food and fuel insecurity. 6.6 Climate Change - While the FFFF does not directly address climate change, its focus on fuel poverty indirectly contributes to sustainable energy use by promoting income maximization and efficient energy utilization among households. 6.7 Risk - Failure to sustain the FFFF poses significant reputational and operational risks to the Council, particularly given its designation as a key mitigation strategy within the Strategic Risk Register. The contingency plan reduces these risks by securing funding for 2025/26. 6.8 Customer Service - The continuation of the FFFF ensures uninterrupted support for residents, enhancing the Council’s responsiveness to community needs during the ongoing cost-of-living crisis. Page 181
Page 182
6.9 The Rights of the Child (UNCRC) - By supporting over 800 children through the FFFF, the Council demonstrates its commitment to upholding children’s rights, including the right to adequate food, health, and well-being, as outlined in the UNCRC. Kirsty Flanagan, Executive Director with responsibility for Finance Councillor Ross Moreland, Policy Lead for Finance and Commercial Services 13 January 2025 For further details or discussion, please contact Fergus Walker, Revenues and Benefits Manager, Financial Services; 01586 555237 Fergus.walker@argyll-bute.gov.uk Page 182
Page 183
ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CHIEF EXECUTIVE UNIT 20 February 2025 Supporting Communities Fund 2025/26 1.0 EXECUTIVE SUMMARY This report provides more detailed proposals for an improved process for the Supporting Communities Fund in 2025/26, adding to the outlined proposals in the report approved by Policy & Resource Committee in December 2024. Recommendations incorporate findings from: a survey with community members and an internal review by officers. The aim is to provide an improved process for community groups applying and to maximise the number of groups that can receive funding available to support the needs of communities across Argyll and Bute. There are no financial implications. Recommendations, as set out in section 4.3 of the report are: • A focus on digital first with promotion of online application. • Non-digital application available if needed to ensure fairness and equality • A shorter application – one of the key asks from the community survey. • Maximum funding which can be applied reduced from £2,500 to £1,500 - allowing more community groups to be awarded funding. • Groups eligible to apply continue to be all third sector organisations in Argyll and Bute, with additional criteria of: ‘who have a turnover of £150,000 or less’. • Funding is to remain available for projects that come under one or more of the following criteria: Fairer, Resilient, Greener and Creative. Page 183 Agenda Item 9
Page 184
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CHIEF EXECUTIVE UNIT 20 FEBRUARY 2025 Supporting Communities Fund 2025/26 2.0 INTRODUCTION 2.1 This provides more detailed proposals for improving the delivery of the Supporting Communities Fund (SCF) from 2025/26, taking account of feedback from community groups. 3.0 RECOMMENDATIONS Committee are asked to approve: a) A focus on digital first with promotion of online application. b) Non-digital application available if needed to ensure fairness and equality. c) A shorter application – one of the key asks from the community survey. d) Maximum funding which can be applied reduced from £2,500 to £1,500 - allowing more community groups to be awarded funding. e) Groups eligible to apply continue to be all third sector organisations in Argyll and Bute, with additional criteria of: ‘who have a turnover of £150,000 or less’. f) Funding is to remain available for projects that come under one or more of the following criteria: Fairer, Resilient, Greener and Creative. 4.0 DETAIL 4.1 The budget for this year’s Supporting Communities Fund will be set in after February 2025. The fund has been running for over 10 years and each year there are over 100 applications from community groups across Argyll and Bute. The process of applying to the fund is managed by the council’s Page 184
Page 185
Community Development Team with decisions made by elected members through Area Committees. Funding available from the council in the past 5 years has been £90,000; £22,500 for each area. The extent to which the fund is oversubscribed has increased each year. 4.2 To improve the fund from 2025/26, consideration has been given to: the level of funding award; the range of community organisations applying for the fund; ease of access to apply; and, potential implications of any changes proposed. 4.3 The key recommendations from a review, which included a survey with community groups, highlighted a need for the following: • A shorter application. • An online application form for applicants, with a non-digital alternative • A lower maximum funding per project to enable more groups to benefit from the fund in each administrative area. • Criteria that would enable groups with lower financial turnover, less than £150,000, to benefit from the fund. 4.4 The highlights from the review and survey were: • 48% of respondents preferred a digital form with a desire to include images, diagrams and other types of information, this will be possible as part of an online application process. • There was 72% support for limiting the fund to organisations with less than £150,000 turnover. • 89% supported the funding continuing to be available to all types of third sector organisations across Argyll & Bute as currently set out in SCF guidance. • From an administrative perspective for the team, having an online application form will result in increased efficiency and time with processing. • Funds are limited, the fund is always over-subscribed. Having a maximum of £1,500 rather than £2,500 allows approximately 6 more groups to be funded per area; 24 more groups across Argyll and Bute. 4.5 The recommendations are: • A focus on digital first with promotion of online application. • Non-digital application available if needed to ensure fairness and equality. • A shorter application Page 185
Page 186
• Maximum funding per application of £1,500 • Groups eligible to apply continue to be all third sector organisations in Argyll and Bute, with additional criteria of: ‘who have a turnover of £150,000 or less’. • Criteria for funding to remain: Fairer, Resilient, Greener and Creative. 4.6 The launch of 2025/26 Supporting Communities Fund is 31st March 2025 with decisions made at Area Committee after recess. This is a revised timescale from previous years, as agreed at P&R Committee in December, to enable work to improve the fund to take place. Information on the agreed new timescale has been issued to all previous applicants to SCF and to all community groups via the Community Development Team. Any matters arising from this change will be supported by the team. 4.7 Should the recommendations, outlined in 4.5, be approved we will ensure clear messaging to community groups including those who participated in the survey to inform them of application routes and criteria for 2025/26. We will provide support to encourage digital applications, and seek to make this as simple a route as possible for groups. For example, this may include linking a community group’s information on projects submitted through Aspiring Places to the SCF application process, should this be an option. 5.0 CONCLUSION 5.1 The recommendations have arisen from a survey with community groups and a review of internal processes to seek options that will improve SCF for groups applying in 2025/26. They have the potential to enable an improved, more efficient and streamlined process, improving the customer journey and reach of the fund to community organisations across Argyll & Bute. 6.0 IMPLICATIONS 6.1 Policy This has linkages that support the council’s policy on increasing Digital options for customers. 6.2 Financial None. 6.3 Legal There are no legal implications. Page 186
Page 187
6.4 HR There are no personnel implications. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics 6.5.2 Socio-economic Duty 6.5.3 Islands. 6.6 Climate Change The current Greener criteria encourages projects to improve the environment. 6.7 Risk There is a risk that the digital application process uptake is not as expected. This will be monitored during the application stage and support to encourage uptake or provide alternatives (e.g. downloadable application forms) 6.8 Customer Service Community Development Officers are in close contact with customers of the SCF process to provide guidance and support. 6.9 The Rights of the Child (UNCRC) Groups with projects supporting young people, or who may have young people on their community group were contacted to take part in the survey. Chief Executive – Pippa Milne Policy Lead – Mark Irvine 29 January 2025 For further information contact: Suzanne Mason, Engagement and Communities Lead, suzanne.mason@argyll-bute.gov.uk or Rona Gold, Communities and Partnership Manager, rona.gold@argyll-bute.gov.uk, 01436 658 862. APPENDICES None Page 187
Page 188
This page is intentionally left blank
Page 189
Page 1 of 7 ARGYLL AND BUTE COUNCIL Policy & Resources Committee LEGAL & REGULATORY SUPPORT 13th February 2025 Sustainable Procurement Strategy 2025/2028 Draft Document and Consultation 1.0 EXECUTIVE SUMMARY 1.1 The purpose of this paper is to seek approval for the draft revised Sustainable Procurement Strategy 2025/2028. 1.2 This report outlines the requirement for the annual updates and the key changes that have been made to the Sustainable Procurement Strategy. 1.3 The first draft of this document was approved by the Procurement Board to go to consultation with key stakeholders and the public via a web-based survey. The consultation closed on 28th November 2024. 1.4 This report recommends that Policy and Resources Committee note the key changes to the document and the outcome of the consultation. 1.5 The consultation outcome report and the final version of the strategy will be available on the council’s website in April 2025. Page 189 Agenda Item 10
Page 190
Page 2 of 7 ARGYLL AND BUTE COUNCIL Policy & Resources Committee LEGAL & REGULATORY SUPPORT 13th February 2025 Sustainable Procurement Strategy 2025/2028 Draft Document and Consultation 2.0 INTRODUCTION 2.1 The purpose of this paper is to seek approval for the final revised Sustainable Procurement Strategy 2025/2028. 3.0 RECOMMENDATIONS 3.1 That the Policy and Resources Committee note the key changes as detailed in Section 4.3 below to the Sustainable Procurement Strategy 2025/2028, and the changes made to the strategy following the consultation period in Section 4.4. 3.2 That the Policy and Resources Committee recommend to the Council agreement of the revised final Sustainable Procurement Strategy 2025/2028, and the publication on the council’s website in April 2025. 4.0 DETAIL 4.1 All public bodies with an annual regulated procurement spend of £5 million and above must produce a Procurement Strategy under Section 15 of the 2014 Act. In terms of the Act, a public body which expects to have procurement expenditure of £5 million or more in the next financial year must, before the start of that year, either publish a Strategy, where one does not exist or review an existing strategy making such revisions to it as the body considers appropriate and publish its revised strategy. On publishing a revised Procurement Strategy, a public body must then notify Scottish Ministers by sending an e-mail to ProcurementStrategies@gov.scot with a link to where the revised strategy can be accessed. The council published its 3 year Procurement Strategy 2022/2025, and this paper sets out the revised Sustainable Procurement Strategy 2025/2028. This ensures that we meet the various obligations set out in the strategy in a timeously manner. Page 190
Page 191
Page 3 of 7 4.2 The updated Procurement Strategy continues to set out a framework which enables the council to continue on its journey of change and innovation through: o To ensure all procurement staff and council officers involved in the procurement process are fully aware of all aspects and impacts of the procurement rules and any other relevant regulations. o Increase opportunities for commercial savings. o Reduce the value of non-contract spend. o To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. o Increased opportunities for local suppliers to help grow the local economy. o Increased engagement and collaboration with suppliers and SDP. o To develop resilient local supply chains, providing clear advice and consistent approaches to procurement and community benefits, ensuring businesses are aware of, and are able to take advantage of, procurement opportunities supported by a programme of active and innovative supplier engagement and development support. o To increase the knowledge and understanding of the benefits of sustainable procurement of all council staff who participate in the procurement process and make better use of the expertise within the council to ensure wider sustainable outcomes are achieved. o Continue to deliver best value contracts. o More streamlined and leaner processes. o Procurement continues to be a key strand in the delivery of council strategies and policies. o Build capacity and skills within the council to improve procurement, commissioning and contract management activity and support procurement people of tomorrow. o Cross-service collaboration. Page 191
Page 192
Page 4 of 7 4.3 Summary of the key changes to the draft Sustainable Procurement Strategy 2025/2028 The PCCMT has drafted this strategy to ensure it continues to meet all of the council’s procurement requirements and objectives for the period 2025/2028, and the following changes have been made: • The Procurement Strategy and Sustainable Procurement Policy 2022/25 has been replaced and incorporated into one new document and renamed the Sustainable Procurement Strategy 2025/2028. • Section 1 – Page 1: Overview Section 2 – Page 3: Introduction Section 3 – Page 5: Procurement Vision & Mission Statement Section 4 – Page 8: Strategy Rationale & Context All above sections updated to reflect the current context for this strategy. • Section 5 – Page 11: Strategy Aims, Key Priorities & Action Plan Updated to include five key strategic procurement objectives: o Good governance o Value for money to support council’s financial challenges o Empowering local suppliers, supporting community wealth building and local economic growth o Provide effective and efficient procurement for our stakeholders o Procurement to be a strategic partner for all our council services Aims and Action Plan updated accordingly. • Section 6 - Page 29: The Corporate & Education Category’s Analysis of the existing spend profile updated with 2023/2024 spend data. • Section 6 - Page 32: The Construction & Environment Category updated. • Section 6 - Page 34: The Care, Early Years & Housing Category updated. • Section 7 - Page 39: The Financial Analysis section has been updated with 2023/2024 spend data. Page 192
Page 193
Page 5 of 7 4.4 Following the consultation process, changes to the draft Sustainable Procurement Strategy 2025/2028 are detailed below: • Section 2: Introduction Page 3: added new Item 2.4 Sustainable procurement means making purchasing decisions that balance environmental protection, social progress, and economic development, both for present and future generations. For the council, this means: o Environmental Sustainability: Making procurement decisions that minimise negative environmental impacts, support climate resilience, and contribute to our net-zero targets through reduced carbon emissions, protection of biodiversity, and responsible resource use. o Social Sustainability: Delivering positive outcomes for our communities through fair work practices, skills development, and enhanced community wellbeing and resilience. o Economic Sustainability: Creating lasting economic benefits through support for local businesses, innovation, and long-term value for money. • Section 4: Strategy Rationale and Context Page 10: Item 4.4, included: There is an ever-increasing focus from the Scottish Government on measuring and managing Scope 1, 2 and 3 emissions across our supply chain, including specific supplier reporting requirements for Scope 3 emissions from purchased supplies, services and works. • Section 5: Strategic Aims, Key Priorities & Action Plan Page 11 – Page 28 Title changed to Strategic Aims, Strategic Objectives, Key Priorities & Action Plan. Page 14: Item 5.2.3 - How we will do it - added the following: o Provide support to wider council teams with their sustainability and net-zero targets as required; including updating templates to meet the changing needs of the council and the Scottish Government, and adapting procurement processes to support these targets whilst still complying with Procurement Regulations. As a result of the above, this also affected change to the Action Plan – Page 20 – Actions. Page 193
Page 194
Page 6 of 7 Page 26: Procurement Strategy Action Plan 5.5.1 Good Governance - Item 7: Comply with the sustainable procurement duty – the following was added: Item F - The Procurement, Commercial and Contract Management Team will provide support to the wider council in relation to emissions management within council contracts. Procurement activities directly influence the council’s Scope 3 emissions through our supply chains, which will be monitored and measured in line with Scottish Government requirements. 4.5 The council has a statutory requirement to update and publish its Procurement Strategy on an annual basis following the key changes introduced by the Procurement Reform (Scotland) Act 2014 and the Procurement (Scotland) Regulations 2016. 4.6 The council also has a requirement to consult with key stakeholder groups for this document. This also gives the council the opportunity to raise awareness, attain buy-in, inform the contents of the documents and further develop engagement with key stakeholder groups. 4.7 The draft Sustainable Procurement Strategy 2025/2028 is attached as Appendix 1. 4.8 The Stakeholder Consultation Report (Appendix 2) details the outcome of the consultation. This will be published on the council’s website, in order to provide feedback to the consultees. 5.0 CONCLUSION 5.1 The Sustainable Procurement Strategy has been reviewed in keeping with the strategy requirements (Section 8.2) to ensure that it continues to meet the council’s procurement objectives and outcomes, as well as ensuring that the council meet its statutory requirement to do so on an annual basis following the key changes introduced by the Procurement Reform (Scotland) Act 2014 and the Procurement (Scotland) Regulations 2016. 5.2 This proposed consultation has been designed to be relevant and proportionate to the document being consulted on, focusing on key stakeholder groups whilst ensuring that the survey is also open to any other interested organisations/ individuals. Page 194
Page 195
Page 7 of 7 6.0 IMPLICATIONS 6.1 Policy: None, the Strategy supports the Council’s objectives and corporate priorities as detailed in our council’s Argyll and Bute Outcome Improvement Plan. 6.2 Financial: None 6.3 Legal: The Strategy ensures the Council meets the statutory requirement to publish its Procurement Strategy and review it on an annual basis thereafter. 6.4 HR: None 6.5 Fairer Scotland Duty: None, an Equality and Socio-Economic Impact Assessment (EqSEIA) has been completed as part of the development of the Strategy. 6.5.1 Equalities protected characteristics 6.5.2 Socio-economic Duty 6.5.3 Islands 6.6 Climate Change: The Strategy supports the Council’s Climate Change agenda and requires our contractors to meet our statutory requirements. 6.7 Risk: None 6.8 Customer Service: None 6.9 The Rights of the Child (UNCRC): None Douglas Hendry Executive Director with responsibility for Legal and Regulatory Support Policy Lead: Councillor Mark Irvine 17th December 2024 For further information contact: Anne MacColl-Smith 01546 604194 Anne.maccoll-smith@argyll-bute.gov.uk APPENDICES Appendix 1: Sustainable Procurement Strategy 2025/2028 Appendix 2: Stakeholder Consultation Report 2024 Appendix 3: EqSEIA (Equality and Socio-Economic Impact Assessment) Form Page 195
Page 196
This page is intentionally left blank
Page 197
Appendix 1 DRAFT Sustainable Procurement Strategy 2025/2028 Page 197
Page 198
Section 1 - Overview ........................................................................................... 1 Section 2 - Introduction ....................................................................................... 3 Section 3 - Procurement Vision & Mission Statement ........................................ 5 Section 4 - Strategy Rationale & Context ........................................................... 8 Section 5 - Aims, Objectives, Key Priorities & Action Plan ...............................11 Section 6 - Procurement Strategy by Category ................................................29 Section 7 - Financial Analysis & Key Performance Indicators (KPIs) ...............39 Section 8 - Implementation, Reviewing & Reporting ........................................43 Section 9 - Policies, Tools & Procedures ..........................................................45 Section 10 - Glossary..........................................................................................48 Section 11 - Strategy Ownership & Contact Details ...........................................53 Contents Page 198
Page 199
Section 1: Overview Page 1 of 53 Back to Contents Procurement plays a pivotal role in supporting the council’s Corporate Plan for 2023 to 2027 and will continue as a key enabling strand within the ongoing reform and continuous improvement of the council. This Sustainable Procurement Strategy sets out the vision, objectives, key priorities and actions which will direct and govern procurement activities across the council for 2025-2028. These reflect the key challenges and commitments of the council’s Corporate Plan, in addition to supporting a variety of council strategies and national and local policies The strategy relates to our overall spending approach, with specific focus on regulated procurements. Regulated procurements are defined as works contracts over £2million in value, and supplies and services contracts over £50,000 in value. It shows our continued commitment to focus and promote robust and fair working practices within our supply chain and contracts, our aim to shape and influence innovative solutions and to ensure the council delivers ethically sourced goods, services and works across its commercial spend profile, whilst striving to support and create contract opportunities for more Argyll and Bute based suppliers, Social Enterprises, Co- operatives, Supported Businesses and Third Sector Organisations Local businesses and the third sector play a valuable role in supporting the work of the local authority. The strategy aims to help remove the barriers often faced by smaller organisations with limited resources in bidding for work tendered by the council. The Procurement, Commercial and Contract Management Team (PCCMT) has provided, and will continue to provide, support to local organisations by structuring tender opportunities, wherever possible, to enable local organisations to bid for council contracts and by building their capacity to respond to formal procurements through local Meet the Buyer and other training events, and through promotion of the Supplier Development Programme (SDP). For this strategy to support the Corporate Plan and significant financial pressures faced by the council, we will explore digital and automation opportunities, strengthen existing strategic internal and external partnerships and further develop relationships between procurement, service areas, and collaborate further with our key suppliers. We will continue to generate process efficiencies and further cash savings opportunities through rigorous challenge of all our purchasing decisions, continue to work more cohesively and collaboratively with our internal clients and external stakeholders to identify better ways of working and ensure best value is achieved for all commercial spend through improved contract management activity. Section 1 - Overview Page 199
Page 200
Section 1: Overview Page 2 of 53 Back to Contents For this strategy, the council has five key strategic procurement objectives: ❖ Good governance. ❖ Value for money to support council’s financial challenges. ❖ Empowering local suppliers, supporting community wealth building and local economic growth. ❖ Provide effective and efficient procurement for our stakeholders. ❖ Procurement to be a strategic partner for all our council services. Page 200
Page 201
Section 2: Introduction Page 3 of 53 Back to Contents 2.1 This Sustainable Procurement Strategy sets out the vision, objectives, key priorities and actions which will direct and govern procurement activities for Argyll and Bute Council during 2025 to 2028. 2.2 In the face of significant challenges, including economic pressures, climate change, and evolving community needs, we recognise the power of procurement as a strategic tool. It is not just about buying goods and services; it is using our buying power to create more positive impacts on the economy, society, and the environment. Our strategy shifts from a transactional approach to a strategic, data-driven, and value-based one. 2.3 We aim to maximise the impact of public funds, ensuring that every pound spent contributes to sustainable solutions that address community needs. Sustainability is at the core of our public procurement efforts. We not only want to deliver efficient and cost-effective services but also, actively address poverty, promote social wellbeing, boost the local economy, and mitigate climate change. 2.4 Sustainable procurement means making purchasing decisions that balance environmental protection, social progress, and economic development, both for present and future generations. For the council, this means: • Environmental Sustainability: Making procurement decisions that minimise negative environmental impacts, support climate resilience, and contribute to our net-zero targets through reduced carbon emissions, protection of biodiversity, and responsible resource use. • Social Sustainability: Delivering positive outcomes for our communities through fair work practices, skills development, and enhanced community wellbeing and resilience. • Economic Sustainability: Creating lasting economic benefits through support for local businesses, innovation, and long-term value for money. 2.5 The success of our Sustainable Procurement Strategy will be dependent upon having the right people, processes, and technology in place to support its implementation. It requires a shift in mind-set and behaviour, a commitment to professional development commitment and a focus on collaboration. Above all, we must adhere to our core principles of accountability, equity, legal compliance, strategic importance, sustainability, and value delivery. 2.6 These reflect both national and local policies and priorities, and includes our approach to, Suppliers’ Fair Working Practices and Ethicality, Sustainability, Climate Change, Corporate Social Responsibility, Small and Medium-sized Enterprises (SMEs), Supported Businesses, and Third Sector organisations. Section 2 - Introduction Page 201
Page 202
Section 2: Introduction Page 4 of 53 Back to Contents 2.7 They recognise the current budget constraints and an increasing demand for goods, services and works. 2.8 Procurement is a key strategic driver to enable the business community and the communities we serve to adapt, diversify and flourish despite economic pressures. The present economic landscape has created unique but not insurmountable challenges for the area. 2.9 Procurement plays a pivotal role in supporting the council’s Corporate Plan and will continue as a key enabling strand within the ongoing reform and continuous improvement of the council. 2.10 The Argyll and Bute Council Sustainable Procurement Strategy 2025/2028 relates to our overall procurement approach, with specific focus on regulated procurements. Regulated procurements are defined as works contracts over £2million in value, and supplies and services contracts over £50,000 in value. 2.11 This Sustainable Procurement Strategy has been prepared in response to the changing procurement agenda and the current financial climate. This strategy sets out the procurement aims and goals of the council for 2025/2028 and will be updated on an annual basis. These aims and goals reflect both national and local policies and priorities. Through adhering to the Sustainable Procurement Strategy, the council will manage and mitigate the potential risks associated with public sector procurement. Such risks include the potential for challenge from unsuccessful tenderers, the risk of not achieving best value for council services, and failing to support the council’s strategic aims. Page 202
Page 203
Section 3: Procurement Vision and Mission Statement Page 5 of 53 Back to Contents The council’s vision “We are working together to attract people to live and work in the area, and to build a prosperous future for Argyll and Bute”. The following procurement vision and mission statements have been established to support the council’s vision and to ensure the delivery of sustainable, effective and efficient procurement. Our vision To be recognised as a strategic partner to all council services, optimising a collaborative and innovative approach to support the economic, social and environmental needs of the residents of Argyll and Bute whilst delivering best value. Mission Statement To deliver procurement for our stakeholders to support the delivery of high quality, sustainable public services that empowers our communities, and supports economic growth. We are committed to sustainable procurement, ensuring best value is achieved whilst delivering sustainable outcomes to meet the needs of our communities in Argyll and Bute. How Procurement Will Support Council Objectives The Procurement Reform (Scotland) Act 2014, places a sustainability duty on the council, which requires us when we are carrying out a regulated procurement, to consider how our procurement process could: • improve the economic, social environmental wellbeing within our area; • facilitate the involvement of small and medium enterprises, third sector bodies and supported businesses in the process; and • promote innovation. This approach fits well with the council’s own corporate priorities as detailed in our council’s Argyll and Bute Outcome Improvement Plan. Argyll and Bute Council is working with our partner organisations to deliver this vision for our area: our economy is built on a growing population. In other words, we are working together to attract people to live and work in the area, and to build a prosperous future for Argyll and Bute. The Outcome Improvement Plan sets out three outcomes that help us achieve our vision: Section 3 - Procurement Vision & Mission Statement Page 203
Page 204
Section 3: Procurement Vision and Mission Statement Page 6 of 53 Back to Contents • Outcome 1: Transport Infrastructure • Outcome 2: Housing • Outcome 3: Community Wellbeing The council’s priorities support the council in serving the interests of Argyll and Bute. We are focused on creating and making the most of opportunities while continuing to deliver quality services. In addition, the strategy aligns with the wider public sector policy objectives set out in the Public Procurement Strategy for Scotland. This strategy, therefore, looks to put sustainability at the heart of our public procurement; using it to help deliver on our wider strategic vision and ambitions for Argyll and Bute, both in terms of our people and place. By doing so, we hope to send out a clear message to the people of Argyll and Bute, our public partners and the business community, including SMEs and third sector organisations; that we are committed to using our procurement power, not only to deliver efficient and cost-effective services, but also to: • continue working to address the impact of poverty • promote and enhance social wellbeing and build resilience within our communities • help grow our local economy, to create jobs for future generations • help mitigate the impact of climate change and reduce our own carbon footprint This approach will require a shift in mind-set and behaviour to move our public procurement from the transactional and reactive to a proactive, data driven strategic function. The strategy also acknowledges the need to ensure that we have the necessary professional procurement capacity and capability in place, together with the processes, and tools to ensure the best possible procurement service for Argyll and Bute. As a Procurement Team, supported by our Scottish Public Procurement community, we have a key aim to ensure that the collective spending power of the public sector is used to deliver world class, value-adding collaborative procurement services, while enabling sustainable and inclusive economic growth. As such, this strategy is aligned to the Scottish Government’s published Public Procurement Strategy for Scotland. Its vision is to put public procurement at the heart of a sustainable economy to maximise value for the people of Scotland. Page 204
Page 205
Section 3: Procurement Vision and Mission Statement Page 7 of 53 Back to Contents Within procurement we have outcomes outlined by the Sustainable Procurement Duty, which requires us to buy in a way which is: These outcomes, which are supported by Scottish Government policies and guidance as well as sectorial and organisational policies and guidance, underpin and enable our work. Page 205
Page 206
Section 4: Strategy Rationale and Context Page 8 of 53 Back to Contents 4.1 Our principal aim is to ensure the principles of public procurement - transparency, integrity, openness, fairness, non-discrimination, equal treatment, competition and accountability - underpin our procurement activity. 4.2 This strategy aims to build on the achievements and benefits derived from the council’s previous Procurement Strategy 2021–2024, with a view to: • All procurement opportunities are advertised, tendered and awarded electronically. • All complex procurement exercises are supported by detailed sourcing strategy documents. • Community benefits are considered for all procurement exercises above £100,000 for goods and services; and £2,000,000 for works. • Sustainability considerations are included for all regulated procurements. • If the market allows for it, for goods/services under £50,000 and works under £2million, SMEs and local suppliers are invited to bid for these contracts. • Development of a robust, segmented contract management process. • Using the power of procurement to deliver beneficial outcomes for the residents of Argyll and Bute, local businesses and the local area. • Support the council’s key strategies, climate plan and net zero targets. • Make sure we comply with the new procurement regulations. • Integrate Community Benefits Wish-list’s within our community benefits process. • Continue to promote the benefits of early procurement engagement and innovation. • Build capacity and skills within the council to improve procurement, contract management and commissioning activity. • Support procurement people of tomorrow. The previous procurement strategy was closely aligned with the overall council plan and delivered many benefits and improvements over the period that it covered (2023 to 2024). These benefits and improvements included: Section 4 – Strategy Rationale & Context Page 206
Page 207
Section 4: Strategy Rationale and Context Page 9 of 53 Back to Contents • More commercially focused and category management further embedded within the council. • Improved demand management with significant savings achieved. • Supported the council’s economic and financial challenges by achieving 74 procurement benefits over the period 2023/24. • No legal procurement challenges – complied with all relevant and statutory requirements. • More streamlined processes and procedures. • More robust sourcing strategies and better value contracts. • Improved strategic partnership working and early engagement with service areas. • The creation of a community benefit wish list on the council’s website. • Fulfilment of our procurement work plans, including the delivery of tenders supporting special projects such as Lochgilphead Front Green Regeneration and Campbeltown Flood Prevention Scheme. The council’s Sustainable Procurement Strategy for 2025/2028 takes account of the Annual Procurement Report 2023/2024, which detailed the progress that the council has made since the previous strategy was published. This allows us to reflect on the progress made as well as highlighting the opportunities and challenges now facing the council, and how procurement can support the organisations overall objectives. We will continue to generate process efficiencies and real cash savings through rigorous challenge of all our purchasing decisions, continue to work more cohesively and collaboratively with our internal clients and external stakeholders to identify better ways of working. This enhances our focus and considers innovative procurement methodologies to achieve best value outcomes in service areas such as social care. 4.3 The council is mindful that the impact of procurement is far greater than this definition of a ‘process’ and our vision, objectives and principles as set out in this strategy illustrate the contribution that effective procurement arrangements can make to wide ranging socio-economic agendas. These include equality and diversity, a successful local economy, a thriving voluntary and third sector, environmental issues and value for money for Argyll and Bute residents. Page 207
Page 208
Section 4: Strategy Rationale and Context Page 10 of 53 Back to Contents 4.4 Current external impacts are demographic changes within Argyll and Bute, managing expectations of stakeholders within reduced budgets, environmental challenges including upcoming changes in relation to waste management and carbon reduction to meet climate change targets, and the need to ensure our processes are in line with current best practice. There is an ever-increasing focus from the Scottish Government on measuring and managing Scope 1, 2 and 3 emissions across our supply chain, including specific supplier reporting requirements for Scope 3 emissions from purchased supplies, services and works. 4.5 Internal impacts on this strategy and the council’s PCCMT include the need to take account of the requirements of the Constitution, Corporate Plan and Outcome Improvement Plan, the provision of support to the service departments to meet their budgetary requirements, as well as the support provided to them to deliver transformational change in how they provide their services to the residents of Argyll and Bute. 4.6 The council will continue to deliver its procurement activities and meet the above opportunities and challenges in line with the Scottish Model of Procurement and the Public Procurement Strategy of Scotland: Page 208
Page 209
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 11 of 53 Back to Contents 5.1 Our strategic aims The strategic aims of the Procurement, Commercial and Contract Management Team support the overall Argyll and Bute Council Corporate Plan 2023-2027, specifically to support the council in its mission to deliver our key priorities and make Argyll and Bute a place people choose to Live, Learn, Work and Do Business: • People and Places - our core business as a council. • Potential and Growth - turning opportunities into reality. • Partnership and Action - everyone has a part to play in Argyll and Bute’s success. The team recognises the strategic importance of maximising the economic benefits from directing council spend to local businesses, in terms of benefiting the local economy to ensure it is growing, diverse and thriving. To support delivery of these outcomes, the PCCMT will continue to facilitate participation from local contractors in the procurement process to increase opportunity for local spend, where possible, by: a. Considering lotting strategies for all contracts and, where appropriate, dynamic purchasing systems to enable local suppliers the opportunity to access council contracts. This will be documented in all contract strategies which will be prepared in advance of procuring all regulated contracts. b. If the market allows for it, for goods/services under £50k and works under £2million, SMEs and local suppliers will be invited to bid for these contracts. c. Simplifying tender documents to ensure the procurement process is proportionate and easy to navigate. d. Delivering an effective programme of supplier engagement and events across the region aligned to forthcoming contract opportunities, supporting our local small and medium sized businesses to meet their growth potential. e. Using community benefits clauses and approaches to help deliver additional benefits for the communities of Argyll and Bute. f. Promoting the living wage and wider fair work first practices. Whilst it would not be acceptable to give preference to local businesses during any particular procurement, efforts will continue to be made to ensure that local businesses are given the opportunity to bid for our contracts and to have the greatest chance of being successful in winning council and other public sector business. Section 5 - Aims, Objectives, Key Priorities & Action Plan Page 209
Page 210
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 12 of 53 Back to Contents 5.2 Our strategic objectives For this strategy, the council has five key strategic procurement objectives: • Good governance. • Value for money to support council’s financial challenges. • Empowering local suppliers, supporting community wealth building and local economic growth. • Provide effective and efficient procurement for our stakeholders. • Procurement to be a strategic partner for all our council services. 5.2.1 Good Governance Aims o To ensure all procurement staff and council officers involved in the procurement process are fully aware of all aspects and impacts of the procurement rules and any other relevant regulations. How we will do it ➢ Mandatory training for council officers involved in the procurement process (project leads, specification writers) including highlighting the requirement for project/ contract management, excellent communication skills, varying contracts, budget variances and social benefits that procurement must consider (for example, Equality and Fair Work First Practices). ➢ Ongoing training for procurement staff on changes to legislation and regulations. ➢ Adapt our internal procedures, processes and documentation, where required, to reflect any new legislative requirements. What will the outcome be? ▪ Mitigation of the opportunities for procurement challenge. ▪ Procurement activity will comply with all relevant statutory and regulatory requirements. ▪ Procurement staff are confident in their understanding of procurement regulations and other relevant regulations. Page 210
Page 211
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 13 of 53 Back to Contents 5.2.2 Value for Money to support council’s financial challenges Aims o Increase opportunities for commercial savings. o Reduce the value of non-contract spend. How we will do it ➢ Continue to target savings and procurement benefits from all aspects of the strategic procurement process (tender, contract and demand management, Purchase to Pay (P2P). ➢ We will continue to develop our contract management framework as we understand that successful contracts depend on good contract management and good contract management depends on good supplier relations. ➢ Further embed and improve demand management within the contract management process. ➢ Ensure that suppliers provide regular management information on our usage of their contracts and incorporate this information into the contract management process. ➢ To work closer with our client departments to understand their needs, identify opportunities to reduce expenditure, control demand and improve process efficiencies. ➢ Continue to look for opportunities to collaborate in procurement with our public sector partners and benchmark to ensure that collaborations provide best value. What will the outcome be? ▪ Assisting the council to meet budget savings targets. ▪ Increase contracted spend. ▪ Improved Contract and Demand Management. 5.2.3 Empowering local suppliers, supporting community wealth building and local economic growth Aims o To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. o Increased opportunities for local suppliers to help grow the local economy. Page 211
Page 212
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 14 of 53 Back to Contents o Increased engagement and collaboration with suppliers and the SDP. o To develop resilient local supply chains, providing clear advice and consistent approaches to procurement and community benefits, ensuring businesses are aware of, and are able to take advantage of, procurement opportunities supported by a programme of active and innovative supplier engagement and development support. o To increase the knowledge and understanding of the benefits of sustainable procurement of all council staff who participate in the procurement process and make better use of the expertise within the council to ensure wider sustainable outcomes are achieved. How we will do it ➢ We will analyse the supply chain in Argyll and Bute to identify specific areas of strength and opportunities to develop specific sectors, and work closely with the SDP to deliver effective supplier engagement to include online advice and guidance and targeted events relating to specific tenders to improve the capability of local businesses to bid for contracts. ➢ Optimisation of community benefits via contractual community benefits and the community wish-list - explore how procurement can support community wishes and priorities such as poverty reduction and improve equality. ➢ Continue to support the national meet the buyer event and to hold, at least annually, one council meet the buyer session and relevant tender talk session in conjunction with the SDP. ➢ Provide support to wider council teams with their sustainability and net-zero targets as required; including updating templates to meet the changing needs of the council and the Scottish Government, and adapting procurement processes to support these targets whilst still complying with Procurement Regulations. What will the outcome be? ▪ Increased opportunities for local businesses, co-operatives, Supported Businesses and Third Sector organisations. ▪ To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. ▪ We will have supported small local businesses to access existing supply chains and increased their capability to successfully bid for contracts. ▪ Greater outcomes achieved for local communities. ▪ Community wish-list being delivered by contracted suppliers. Page 212
Page 213
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 15 of 53 Back to Contents 5.2.4 Provide Effective and Efficient Procurement for our Stakeholders Aims o Continue to deliver best value contracts. o More streamlined and leaner processes. How will we do it ➢ Review P2P processes and roles in conjunction with service areas. ➢ Engage with suppliers and stakeholders to identify how we can improve and streamline our processes and inform mobilisation and exit plans. ➢ Form closer working relationships with Scotland Excel, other local authorities, and our local Community Wealth Building Partners to benchmark processes and procedures. ➢ Streamline and standardise processes and documentation. ➢ Undertake a wider legal review of the council’s terms and conditions to make the contract more flexible and appealing to suppliers/ contractors, reflecting volatile markets whilst mitigating the opportunity of risk for the council (e.g. insurance levels, price variations). What will the outcome be? ▪ Meet the council’s strategic needs. ▪ Seen as a Strategic Partner for council services. ▪ Increased opportunities for suppliers by streamlining the process. 5.2.5 Procurement to be a Strategic Partner for all our Council Services Aims o Procurement continues to be a key strand in the delivery of council strategies and policies. o Build capacity and skills within the council to improve procurement, commissioning and contract management activity and support procurement people of tomorrow. o Cross-service collaboration. Page 213
Page 214
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 16 of 53 Back to Contents How we will do it ➢ Promote and create a better understanding of the procurement process and procedures across the council. ➢ Look to develop interactive methods of sharing data such as the contract register, contract plans and category workload tracker with customer service teams. ➢ Engage with HR colleagues to consider how we can promote procurement/ commissioning and contract management at career events with a view to grow our own professionals and succession planning. ➢ Increase understanding on what can be delivered under partnerships/grant funding and what is governed by the procurement rules. ➢ Continue to support the delivery of council strategy and policies, service teams to engage with procurement to ensure procurement actions are achievable within the scope of their project/requirement. ➢ Identify opportunities for joint procurement. Actively engage all services, including Education, Health & Social Care Partnership (HSCP), in strategic procurement planning. What will the outcomes be? ▪ A better understanding and knowledge of procurement and contract management, including risk, throughout the council. ▪ Training and awareness sessions on sustainable procurement. ▪ Increased awareness of public sector procurement with young people at school career events. ▪ Procurement involved at strategic business case stage. ▪ Develop PCCMT operating model to implement “one council” approach to procurement spend. 5.3 Supplier Opportunities We are pleased to hear from new and existing suppliers who are interested in tendering for business. Any enquiries can be sent to the corporate procurement inbox procurement@argyll-bute.govuk. The PCCMT has developed a supplier page on the council’s website with useful tips and information as to how to bid for council contracts. In addition, the council’s current contract register is available on the council website and gives visibility of current contracts and the corresponding end dates. Page 214
Page 215
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 17 of 53 Back to Contents Any contracts requiring renewal, as well as any new requirements, will be advertised and tendered via the following e-tendering portals: o Public Contracts Scotland Tender (PCS-T) Regulated Procurement (Goods/Services >£50,000, Works >£2 million) o Public Contracts Scotland (PCS) Quick Quotes (Goods/Services <£50,000, Works <£2 million) All Quick Quotes undertaken by the council will include an invitation to at least one SME and, if the market allows, at least one local supplier. Any company interested in bidding for business with the council must be registered with Public Contracts Scotland (PCS) and be in a position to submit their responses using these portals. The strategy objectives and the targeted outcomes will be monitored via an action plan detailed as follows: Page 215
Page 216
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 18 of 53 Back to Contents Procurement Strategy Action Plan 5.4.1 Good Governance Objectives Aims & Outcomes Performance Indicators Actions Target Date Owner Aim: o To ensure all procurement staff and council officers involved in the procurement process are fully aware of all aspects and impacts of the procurement rules and any other relevant regulations. Outcome: ▪ Mitigation of the opportunities for procurement challenge. ▪ Procurement activity will comply with all relevant statutory and regulatory requirements. ▪ Procurement staff are confident in their understanding of procurement regulations and other relevant regulations. No legal challenge ➢ Mandatory training for council officers involved in the procurement process (project leads, specification writers) including highlighting the requirement for project/ contract management, excellent communication skills, varying contracts, budget variances and social benefits that procurement must consider (for example, Equality and Fair Work First Practices). ➢ Ongoing training for procurement staff on changes to legislation and regulations. ➢ Adapt our internal procedures, processes and documentation, where required, to reflect any new legislative requirements. Ongoing Ongoing Ongoing SMT PCCMT Manager PCCMT Manager Page 216
Page 217
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 19 of 53 Back to Contents Procurement Strategy Action Plan 5.4.2 Value for Money to Support Council’s Financial Challenges Objectives Aims & Outcomes Performance Indicators Actions Target Date Owner Aim: o Increase opportunities for commercial savings. o Reduce the value of non-contract spend. Outcome: ▪ Assisting the council to meet budget savings targets. ▪ Increase contracted spend. ▪ Improved Contract and Demand Management. Savings for budget holders. Reduced expenditure. ➢ Continue to target savings and procurement benefits from all aspects of the strategic procurement process (tender, contract and demand management, P2P). ➢ We will continue to develop our contract management framework as we understand that successful contracts depend on good contract management and good contract management depends on good supplier relations. ➢ Further embed and improve demand management within the contract management process. ➢ Ensure that suppliers provide regular management information on our usage of their contracts and incorporate this information into the contract management process. ➢ To work closer with our client departments to understand their needs, identify opportunities to reduce expenditure, control demand and improve process efficiencies. ➢ Continue to look for opportunities to collaborate in procurement with our public sector partners and benchmark to ensure that collaborations provide best value. Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing PCCMT PCCMT PCCMT PCCMT/ SMT PCCMT PCCMT Page 217
Page 218
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 20 of 53 Back to Contents Procurement Strategy Action Plan 5.4.3 Empowering Local Suppliers, Supporting Community Wealth Building and Local Economic Growth Objectives Aims & Outcomes Performance Indicators Actions Target Date Owner Aim: o To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. o Increased opportunities for local suppliers to help grow the local economy. o Increased engagement and collaboration with suppliers and SDP. o To develop resilient local supply chains, providing clear advice and consistent approaches to procurement and community benefits, ensuring businesses are aware of, and are able to take advantage of, procurement opportunities supported by a programme of active and innovative supplier engagement and development support. o To increase the knowledge and understanding of the benefits of sustainable procurement of all council staff who participate in the procurement process and make better use of the expertise within the council to ensure wider sustainable outcomes are achieved. Outcome: ▪ Increased opportunities for local businesses, co-operatives, Supported Businesses and Third Sector organisations. ▪ To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. ▪ We will have supported small local businesses to access existing supply chains and increased their capability to successfully bid for contracts. ▪ Greater outcomes achieved for local communities. ▪ Community wish-list being delivered by contracted suppliers. Procurement spend with contracted suppliers (%) Contract awarded to local suppliers (%) Contracts awarded to SMEs (% of contracts awarded) Local suppliers bidding for business with the council (% of bids received) Tenders won by a local supplier where a local supplier has placed a bid (%) Increase the number of community benefits that are delivered through contracts we award locally. ➢ We will analyse the supply chain in Argyll and Bute to identify specific areas of strength and opportunities to develop specific sectors, and work closely with the SDP to deliver effective supplier engagement and improve the capability of local businesses to bid for contracts. ➢ Optimisation of community benefits via contractual community benefits and the community wish-list - explore how procurement can support community wishes and priorities such as poverty reduction and improve equality. ➢ Continue to support the national meet the buyer event and to hold, at least annually, one council meet the buyer session and relevant tender talk session in conjunction with the SDP. ➢ Provide support to wider council teams with their sustainability and net-zero targets as required; including updating templates to meet the changing needs of the council and the Scottish Government, and adapting procurement processes to support these targets whilst still complying with Procurement Regulations. Ongoing Ongoing Ongoing Ongoing PCCMT PCCMT PCCMT PCCMT Page 218
Page 219
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 21 of 53 Back to Contents Procurement Strategy Action Plan 5.4.4 Provide Effective and Efficient Procurement for our Stakeholders Objectives Aims & Outcomes Performance Indicators Actions Target Date Owner Aim: o Continue to deliver best value contracts. o More streamlined and leaner processes. Outcome: ▪ Meet the council’s strategic needs. ▪ Seen as a Strategic Partner for council services. ▪ Increased opportunities for suppliers by streamlining the process. ➢ Review P2P processes and roles in conjunction with service areas. ➢ Engage with suppliers and stakeholders to identify how we can improve and streamline our processes and inform mobilisation and exit plans. ➢ Form closer working relationships with Scotland Excel, other local authorities, and our local Community Wealth Building Partners to benchmark processes and procedures. ➢ Streamline and standardise processes and documentation. ➢ Undertake a wider Legal review of the council’s terms and conditions to make the contract more flexible and appealing to suppliers/ contractors, reflecting volatile markets whilst mitigating the opportunity of risk for the council (e.g. insurance levels, price variations). Ongoing Ongoing Ongoing Ongoing Ongoing PCCMT PCCMT PCCMT PCCMT PCCMT Page 219
Page 220
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 22 of 53 Back to Contents Procurement Strategy Action Plan 5.4.5 Procurement to be a Strategic Partner for all our Council Services Objectives Aims & Outcomes Performance Indicators Actions Target Date Owner Aim: o Procurement continues to be a key strand in the delivery of council strategies and policies. o Build capacity and skills within the council to improve procurement, commissioning and contract management activity and support procurement people of tomorrow. o Cross-service collaboration. Outcome: ▪ A better understanding and knowledge of procurement and contract management, including risk, throughout the council. ▪ Training and awareness sessions on sustainable procurement. ▪ Increased awareness of public sector procurement with young people at school career events. ▪ Procurement involved at strategic business case stage. ▪ Develop PCCMT operating model to implement “one council” approach to procurement spend. ➢ Promote and create a better understanding of the procurement process and procedures across the council. ➢ Look to develop interactive methods of sharing data such as the contract register, contract plans and category workload tracker with customer service teams. ➢ Engage with HR colleagues to consider how we can promote procurement/commissioning and contract management at career events with a view to grow our own professionals and succession planning. ➢ Increase understanding on what can be delivered under partnerships/grant funding and what is governed by the procurement rules. ➢ Continue to support the delivery of council strategy and policies, service teams to engage with procurement to ensure procurement actions are achievable within the scope of their project/requirement. ➢ Identify opportunities for joint procurement. Actively engage all services, including Education, Health & Social Care Partnership (HSCP), in strategic procurement planning. Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing PCCMT PCCMT PCCMT PCCMT PCCMT PCCMT Page 220
Page 221
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 23 of 53 Back to Contents Procurement Strategy Action Plan 5.5 Mandatory Requirements of the Procurement Reform (Scotland) Act 2014 and Statutory Guidance Obligations. The Act lays out some mandatory requirements which the procurement strategy must include. In particular: 5.5.1 Good Governance Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 1 Be undertaken in compliance with its duty to act in a transparent and proportionate manner o A The council’s Standing Orders relating to contracts and procurements apply to all contracts made by or on behalf of the council for the delivery of works, the supply of goods and materials and the provision of services. o All procurement activity undertaken must comply with the above process and procedures which secures compliance with the Act and Statutory Guidance. In addition to the above, the council engages fully with the Supplier Development Programme (SDP), to understand their organisational needs and share the council’s procurement work plan. o B PINs will be published on Public Contracts Scotland (PCS) for all appropriate regulated procurements in 2025/28. o C Consideration will be given within the initial Commodity Sourcing Strategy (CSS) to lotting all regulated contracts in 2025/28. o D We will offer alternative language formats when requested. 2 o Payment of a living wage - to persons involved in producing, providing or constructing the subject matter of regulated procurements o A Consideration will be given at the initial stages of individual regulated procurements to whether it is relevant to address living wage and fair work practices. o B Payment of the living wage will be monitored by contract management activity in relevant regulated contracts. Page 221
Page 222
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 24 of 53 Back to Contents Procurement Strategy Action Plan 5.5.1 Good Governance Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 3 The use of community benefit requirements A Community Benefits Clauses will be included in regulated procurements as outlined in the Sustainable Procurement Strategy 2025/28. B Report on the methodology of delivering community benefits that have been requested by our local communities. 4 Promoting compliance with health and safety at work, including how a supplier/ sub-contractor demonstrates compliance. A Health and Safety considerations will be included at all stages of regulated procurement processes in 2025/28. B All regulated works procurements in 2025/28 will include reference to the current CDM (Construction (Design and Management)) Regulations. 5 Complying with the council’s Sustainable Procurement Strategy in relation to the procurement of fairly and ethically traded goods and services. A The procurement of fairly and ethically traded goods and services will be considered within the CSS of all regulated procurements in 2025/28. Page 222
Page 223
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 25 of 53 Back to Contents Procurement Strategy Action Plan 5.5.1 Good Governance Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 6 Food procurement o A Any regulated catering contracts carried out in 2025/28 will consider the following national guidance throughout the procurement process: ‘Better Eating, Better Learning’; ‘Beyond the School Gate’; ‘Soil Association Food for Life Catering Mark’; ‘Catering for Change: Buying Food Sustainably in the Public Sector’; and ‘Becoming a Good Food Nation’. The council will continue to look for opportunities to include local and sustainable food wherever possible in schools, facilities, venues and to meet social care requirements. o The council is committed to including health and wellbeing and animal welfare procurement requirements that promote the health, wellbeing and education of communities. Procurement requirements relating to food procurement focus on nutritional quality, health and wellbeing, minimising environmental impact such as packaging and sourcing, as well as the application of appropriate animal welfare standards in accordance with all relevant legislation. The council will ensure that procurement requirements relating to Fairly and Ethically Traded Goods and Services are applied in a relevant, proportionate and legally compliant manner. 7 Comply with the sustainable procurement duty. A Staff involved in the procurement process understand and positively contribute to achieving sustainable outcomes. The council is reassured that suppliers adhere to the principles of a Fair Work First Practice organisation. B Inclusion of a mandatory sub-contracting clause in regulated procurements where relevant and proportionate. C Promote sub-contracting opportunities to SMEs through promoting the use of PCS on the Council’s website. Page 223
Page 224
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 26 of 53 Back to Contents Procurement Strategy Action Plan 5.5.1 Good Governance Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 7/contd Comply with the sustainable procurement duty D Share knowledge and participate in events aimed specifically at local SMEs and third sector bodies, and Scottish suppliers, for example, by publicising Supplier Development Programme events and providing assistance with the tender process through Business Gateway. E Review existing method of engaging with local supply base and engage with Communications Team and Business Gateway to target a wider audience of potential new suppliers, with the aim of increasing the number of new suppliers on our quick quote distribution list. F The Procurement, Commercial and Contract Management Team will provide support to the wider council in relation to emissions management within council contracts. Procurement activities directly influence the council’s Scope 3 emissions through our supply chains, which will be monitored and measured in line with Scottish Government requirements. Page 224
Page 225
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 27 of 53 Back to Contents Procurement Strategy Action Plan 5.5.2 Value for Money to Support Council’s Financial Challenges Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 8 Deliver value for money A The successful delivery of this strategy. o The application of procurement best practice and undertaking key strategic procurement activities. o Early market engagement. o By including appropriate lots to promote SME/Third Sector and local supplier participation. o Maximising the impact of each pound spent by including Community Benefit Clauses. o Evaluating on the most economic and advantageous criteria. o Utilisation of output specifications. o Challenging the need and demand management. o Robust contract management. o Application of effective commercial evaluation models. 9 Contribute to the carrying out of its functions and the achievement of its purposes. A The delivery of this strategy will ensure procurement is delivered in a compliant, effective and efficient manner, provide a clear action plan for improvement and contribute to wider council objectives and priorities. By making sure there is early engagement and clear communication channels between the service departments and procurement will assist in achieving best value. This strategy will be monitored and reported as per the Monitoring, Reviewing and Reporting on the Strategy section of this strategy document, to make sure the key objectives are delivered and best value is secured. Page 225
Page 226
Section 5: Strategic Aims, Strategic Objectives, Key Priorities & Action Plan Page 28 of 53 Back to Contents Procurement Strategy Action Plan 5.5.3 Empowering Local Suppliers, Supporting Community Wealth Building and Local Economic Growth Key Priorities How the organisation intends to make sure that its regulated procurements will: Council Response/Strategy Content 10 The provision of prompt payment – no later than 30 days after invoice by the organisation to a supplier and/or sub-contractor, or by a sub-contractor to a sub-contractor. A We will aim to meet the target of 95.5% per quarter of invoices paid within 30 days during 2025/28. B Prompt payment clauses requiring a 30 day payment term are embedded within our contractual terms and conditions. Suppliers are required to apply the same terms and conditions with their sub-contractors who are delivering and supporting the council contract. 11 Consulting and engaging with those affected by its procurements. A Consultations with relevant stakeholder groups will be carried out at the CSS stage of regulated procurements in 2025/28, where relevant and proportionate. 5.6 Key Performance Indicators by which we will measure the success of the Action Plan are detailed in Section 7. 5.7 The council’s current Contract Plan can be found here. Page 226
Page 227
Section 6: Procurement Strategy by Category Page 29 of 53 Back to Contents CORPORATE & EDUCATION Scope/Key Spend Areas The Corporate & Education category consists of the following areas: ➢ Education ➢ Corporate ➢ Information and Communications Technology (ICT) ➢ HR/Training ➢ Transport (including Bus, Air, Boats & Fleet) ➢ Catering & Cleaning ➢ Economic Development ➢ Travel & Accommodation ➢ Leisure & Sports Within Corporate & Education, our overall strategy is to work with all relevant services to review existing contracts or identify new needs and schedule procurement exercises as needed. In doing this, we determine the most appropriate procurement route for the requirement and engage the market as early as possible dependant on the procurement route selected. 2025/28 Strategy Analysis of the existing spend profile (financial year 2023/24) across the Corporate & Education Category has identified the volume of uncontracted suppliers as a priority areas of focus. The analysis breaks down as follows: 2023/24 Spend Type Number of Transactions Total value (£) Number of suppliers Average transaction value (£) Total Percentage Contracted 24629 £48.4m 211 £1,965.51 91.13% Uncontracted 4414 £4.7m 386 £1,068.04 8.87% Where resources allow, a combination of the following actions will be in our strategy to address this: • To continue to support all services to source and purchase goods and services from national and CAT C contracts where possible. • To continue to increase the remit of the Transactional Purchasing Team (TPT) and grow the team’s procurement knowledge and skills to aid services in ensuring best value is achieved for all low value spend. Section 6 – Procurement Strategy by Category Page 227
Page 228
Section 6: Procurement Strategy by Category Page 30 of 53 Back to Contents • To continuously review the eProcurement System (PECOS) to ensure catalogues and suppliers are up to date and available for use by both the TPT and service end users. • Continue to review the system setup of PECOS, test new functionality as it becomes available/resource allows and implement to improve user experience where possible. • To continue to work with all services to implement the No PO No Payment; eventually resulting in the stopping of all relevant manual batched payments and providing the PCCMT access to line item detail of all supplier spend. • Continue to support Education Services with all procurement activity via the Education Purchasing Team to increase Education’s volume of spend under contract. Short/Medium Term Strategy The short-term strategy for the procurement of goods and services within Corporate & Education over the next 2-3 years is: o Transactional Purchasing Team (TPT): Continue to increase the volume of low value uncontacted spend directed to the TPT for sourcing. Increase volume of Invitation to Quotes (ITQs) processed and awarded via TPT to confirm best value is being achieved. o National Contracts: As new national contracts become available, assess suitability and carry out Best Value review. If deemed appropriate, roll out to relevant users and on PECOS. o PECOS: Promote the use of CAT C and collaborative contracts to achieve best value. o Contract Management: Continue to undertake contract and supplier management meetings with key suppliers. o Catering Contracts: Continue to assess the suitability of Scotland Excel frameworks in order to ensure best value is achieved, work proactively to identify and support local food and drink suppliers to bid for contracts, and explore opportunities to introduce dynamic procurement opportunities for food and drink where appropriate. o Cleaning Contracts: Continue to utilise Scotland Excel frameworks in order to achieve best value and process efficiently. o ICT: Continue to use available frameworks or tender as required. o Corporate: Continue to utilise Scotland Excel and Scottish Procurement frameworks in order to achieve best value and process efficiently. Continue to work with the services to implement CAT C contracts as appropriate. Corporate & Education Page 228
Page 229
Section 6: Procurement Strategy by Category Page 31 of 53 Back to Contents o HR Contracts and Training: Continue working with the service to consider ways of improving and streamlining the central delivery with maximum use of training contracts and frameworks. Work with HR to utilise available frameworks as far as possible. o Transport: Continue to provide procurement support to the School and Public Transport and Strategic Transport Teams. Where possible, encourage and support transport operators to explore more sustainable modes of transport including electric vehicles and the use of alternative fuels. o Live Argyll: Continue to provide procurement services as required. o Education: Increase spend under contract, ensure competitive processes are undertaken where needed, and direct appropriate spend to national or collaborative contracts where appropriate. o Fair Work First: Ensure the inclusion of Fair Work First questions covering the five criteria’s for all regulated tenders. o Sustainability: Ensure Sustainability and Community Wealth Building are considered at the sourcing strategy stage for all regulated tenders. Longer Term Strategy The longer term strategy for the procurement of goods and services within Corporate & Education over the next 3-5 years includes: o Collaboration: Greater engagement with potential partnerships with consideration to more collaborative procurement working, shared services and outsourcing opportunities. o Catering and Cleaning: Provide procurement support for Catering and Cleaning development projects. Ensure all procurement practices support the requirements laid out in the current Programme for Government, including forthcoming requirements expected as part of the Good Food Nation bill, the Community Wealth- building bill and the extension of universal free school meals. Explore opportunities for increasing the provision of organic or agro ecologically sourced food and drink across all food and drink contracts. o ICT: Explore all available national collaborative contract opportunities. o Corporate: Develop an overarching Corporate Category Strategy. o Transport: Annually review the Passenger Transport Category Strategy. Expand the contract and supplier management process. Corporate & Education Page 229
Page 230
Section 6: Procurement Strategy by Category Page 32 of 53 Back to Contents CONSTRUCTION & ENVIRONMENT Scope/Key Spend Areas The Construction & Environment category consists of the following areas: ➢ Construction Consultancy ➢ Construction Supplies ➢ Building Works & Services ➢ Infrastructure Works & Services ➢ Environment ➢ Marine Transport An analysis of the existing spend profile within the Construction & Environment Category has identified a number of priority areas of focus. These key areas include: • Major Projects – Procurement and contract management support will be provided to ongoing and upcoming projects, including the Rothesay Pavilion Regeneration project, Kilmory Business Park and Roads Depots Replacement (Lochgilphead, Islay and Dunoon). • Statutory Maintenance Contracts – Providing procurement support for upcoming term contract and framework requirements. • Rural Growth Deal (construction and infrastructure related themes) – Providing procurement support for both internal procurements and procurements undertaken on behalf of external organisations. Short/Medium Term Strategy The short term strategy for the procurement of works, goods and services within Construction & Environment over the next 2-3 years is: o Continue to provide support in the achievement of the council’s capital programmes. o Continue to put in place framework agreements to cover core areas of spend across the council. o Continue to provide procurement support as required for emergency responses i.e. due to extreme weather situations. This will include putting in place frameworks and processes to be followed in these circumstances to streamline appointments while complying with the procurement regulations. o Procurement support will be provided for a Residual Waste procurement to comply with the end of 2025 municipal waste landfill requirements; we anticipate working with West Dunbartonshire Council on a joint procurement exercise for this. Construction & Environment Page 230
Page 231
Section 6: Procurement Strategy by Category Page 33 of 53 Back to Contents o Continue to ensure adequate resource to support Major Projects and Rural Growth Deal programme procurements. o Provide procurement support to Property Services to introduce a new General Maintenance Term Contract. o Continuation of a pilot to increase the threshold for Property Services to carry out their own Quick Quotes via PCS (up to £5,000 for Consultancy Services and £10,000 for Works). o Introduce a Building Consultancy Services Dynamic Purchasing System to further support SMEs and local contractors in accessing opportunities. o Statutory Maintenance Term Contracts: The PCCMT will work with Property Services to introduce new Term Contracts to cover the council’s statutory requirements in relation to compliance inspection and testing of building services in council facilities. This will be an ongoing process with separate unique contracts and specialist suppliers involved. Collaborative frameworks will be utilised where possible. o Provide procurement support to Commercial Services in relation to the delivery of the new 2-18 campus on Mull. o Provide procurement and contract management support for Economic Growth outcomes. Longer Term Strategy The longer term strategy for the procurement of works, goods and services within Construction & Environment over the next 3-5 years includes: o With regards to Waste Management, changes in legislation will bring new requirements for the council (could also include requirements relating to Waste PPP (Public Private Partnership) contract handback in 2026) to be confirmed by the service. o Provide procurement support to assist the Property Services team with increasing levels of contracted statutory maintenance spend from the current levels. o Provide continuing procurement and contract management support to the Rural Growth Deal programme over the full 10 year period. Construction & Environment Page 231
Page 232
Section 6: Procurement Strategy by Category Page 34 of 53 Back to Contents CARE, EARLY YEARS & HOUSING Scope/Key Spend Areas The Care, Early Years & Housing category consists of the following areas: ➢ Adult Services ➢ Children’s Services ➢ Homelessness Services ➢ Early Years ➢ Aids and Adaptations An analysis of the existing spend profile within the Care, Early Years & Housing category has identified key areas of focus. The highest spend comes from the Health and Social Care Partnership (HSCP). The Integration Joint Board’s (IJBs) Joint Strategic Commissioning Strategy (JSCS) informs the procurement priorities for the HSCP and anticipates the priorities of a National Care Service. Following consultation, the IJB have agreed the following priorities: - Choice and control & innovation - Prevention, early intervention and enablement - Living well and active citizenship - Community co-production In addition to this, key market messages have been published as follows: • A shift to digital technology and increased use in telecare and telehealth. • A move to different models of care at home and support services. • Hospital avoidance and prevention. • Support to unpaid carers. • Promotion of health enabling and community co-production. • Sustainability of workforce skills within key sectors of Argyll and Bute. • Self-directed support. • Engagement with our communities. • Accessing transport. In addressing these priorities the function of procurement and commissioning may look different. We anticipate a greater focus on equal partnership, community involvement (including supported people) and use of models that support co-production. Care, Early Years & Housing Page 232
Page 233
Section 6: Procurement Strategy by Category Page 35 of 53 Back to Contents While we can’t predict what new services will look like, we can expect that the following will be key areas of focus: Argyll and Bute HSCP ➢ Care at Home and Supported Living Services A local contract for Care at Home Services to older people is in place to 3rd November 2026. During the term of this contract, the HSCP will continue to develop its strategic direction for Care at Home Services in line with local and national priorities. The HSCP is currently planning for the future of its Supported Living Contract for adults who have a learning disability and for those that require mental health support. A procurement process is expected to commence in 2025/26. ➢ Responder Services The current contract for Responder Services ends March 2025. The future procurement of this service will be informed by the JSCS and the individual service strategies that have a focus on Technology Enabled Care (TEC), Adults and Older People. ➢ Older People’s Care Homes Work continues by Scotland Excel at a national level on the development of a new National Care Home Contract and it is our intention to continue using this. However, we must be aware of the continuing risk that negotiations will fail. In that instance, Argyll and Bute HSCP would require locally negotiated contracts and/or collaborative arrangements with other partnerships. ➢ Adult and Children/Young People’s Residential Placements (outside Argyll and Bute) The HSCP is continuing to work towards keeping more young people in Argyll and Bute. This may result in some related procurement activity in the term of this Strategy. ➢ Children’s Support Services Contracts for support in some areas of Argyll and Bute will come to an end on 31st March 2025. Any future procurement of these services will be aligned with the vision and priorities of the Children and Young People’s Service Plan 2023-2026. ➢ Community Based Substance Use Recovery Contract The current contract ends on 31st March 2025. A new contract will be developed that takes account of updates to local and national priorities, including the Argyll & Bute Alcohol and Drug Partnership’s (ADP) Alcohol and Drug Strategy and Action Plan 2020–2023 and any future iterations. Care, Early Years & Housing Page 233
Page 234
Section 6: Procurement Strategy by Category Page 36 of 53 Back to Contents ➢ Early Learning and Childcare Services Contracts are in place to August 2025 for the Scottish Government’s policy of delivering 1140 hours of funded childcare to eligible children. In the term of this strategy, work will commence on the development of a new contract with a focus on maintaining sustainable provision and payment of a rate that reflects national policy priorities and enables payment of the real Living Wage to all workers delivering the funded requirement. ➢ Housing Support and Homelessness Contracts are in place for Tenancy Support Services and Serviced Accommodation for people that are homeless or identified as being at risk of homelessness to 2025. In the term of this strategy, work will commence on the development of new contracts. Short/Medium Term Strategy The short term strategy for the procurement of goods and services within the Care, Early Years & Housing Category over the next 2-3 years is: o PCCMT will be involved in the strategic planning work underway for Adult Services, in particular, for those areas that will influence the development of the Care at Home and Supported Living Service contracts. o As stated above, Responder Services contract will come to an end March 2025. Work will therefore commence shortly on the planning/development of a procurement process for future service provision. o The development of a new contract for a Community Based Substance Use Recovery Service is expected to take place to secure services from March 2025, when the current contract ends. o The development of a new contract for Supported Living Services is expected to be developed in the term of this strategy. o A sourcing strategy will be developed for future procurement of dementia services, including post diagnostic support. General Activity: • Continue involvement in the implementation of the JSCS and related work streams. This work will likely prompt reviews of specific service areas, and result in procurement process and/or redesign of contracted services. Care, Early Years & Housing Page 234
Page 235
Section 6: Procurement Strategy by Category Page 37 of 53 Back to Contents • To comply with the Guidance on the Procurement of Care and Support Services 2016 (Best Practice), making use of the provisions of the Light Touch Regime (LTR), where appropriate, under the Public Contract (Scotland) Regulations 2015. The LTR allows consideration of wider factors when sourcing Health, Social Care and Education services and legitimises their influence in decision making. These wider factors allow procurement activity to take account of the strategic vision of the HSCP, for example, in relation to sustainability; improved outcomes; continuity; choice and affordability. • To procure in a way that is in line with and sensitive to the expected national direction from the Scottish Government, the Feeley Review and the forthcoming National Care Service. • While we await more information on the implementation of the National Care Service, we will continue to support customers in making best use of the procurement options available, ensuring that sourcing strategies balance the desire for longer term contracts; partnership working and co-production with procurement related risks. • To ensure that Fair Work First criteria is implemented in all procurements and reflected in Contract Management activity in line with the guidance in SPPN 6/2021. • Sustainability: Ensure Sustainability and Community Wealth Building are considered at the sourcing strategy stage for all regulated tenders. • To continue to undertake contract and supplier management activity with key suppliers. • To improve communication with customers by developing and promoting guidance and reports in relation to procurement and contract management activity. • To continue to review the terms and conditions for care services. • To work with colleagues in the HSCP to ensure that contracts are in place to maximise the Self-Directed Support (SDS) options as far as possible and to support the HSCP in balancing the risks of choice and control against best value (including procurement regulations). • To ensure that suppliers providing services to vulnerable clients manage their health and safety risks appropriately. This will be achieved via proportionate and relevant checks pre-contract award and as part of contract management. • To continue to work with customers and involve and guide them in the Contract and Supplier Management process to ensure maximum benefits are realised from the contract. Care, Early Years & Housing Page 235
Page 236
Section 6: Procurement Strategy by Category Page 38 of 53 Back to Contents Longer Term Strategy The longer-term strategy for the procurement of goods and services within the Care, Early Years & Housing Category over the next 3-5 years includes: o Develop and continue to review commodity sourcing strategy coverage for all high value/high risk procurements, ensuring that these strategies compliment National Direction and the strategic vision of customers. o Continue active involvement in national activity lead by Scotland Excel and other relevant bodies. o Continue to seek innovative solutions for compliant procurement processes for Services to the Person, e.g. flexible frameworks. o Continue to provide procurement support advice and assistance to the relevant customers, in order to ensure that they are receiving best value quality services from its suppliers, delivered safely and without unacceptable risks to health. o Through appropriate and proportionate procurement and contract management activity, we will contribute to the achievement of our customers’ strategic vision. Care, Early Years & Housing Page 236
Page 237
Section 7: Financial Analysis & KPIs Page 39 of 53 Back to Contents 7.1 The council’s total procurement spend in 2023/24 on supplies, services and works was £181.5 million, this is broken down by Category in the table below. Table 1: Procurement Spend by Category for 2023/24 Category Total Spend 2023/24 Construction & Environment £68.75m Care, Early Years & Housing £59.60m Corporate & Education £53.12m Total £181.47m 7.2 The following table shows the council’s spend in more detail by vCode Business Sector, a classification system appended by the Scottish Procurement Information Hub. Table 2: Procurement Spend by vCode Business Sector for 2023/24 vCode Business Sector Total Spend 2023/24 Social Care & Services £52.42m Construction £45.70m Facilities Management £21.26m Waste & Environmental Services £12.95m Travel & Accommodation £7.08m Other Goods & Services* £5.62m Financial Services £5.52m ICT £5.44m Utilities & Energy £4.28m Human Resources £4.28m Vehicles £3.89m Transport £2.46m Healthcare £2.26m Food, Beverage & Catering £1.36m Education £1.33m Business Support Services £1.17m Professional Services £1.00m Arts, Sport & Leisure £0.56m Security Equipment & Services £0.55m Public Sector Bodies £0.49m Legal £0.41m Data Not Available £0.37m Animals & Farming £0.35m Section 7 – Financial Analysis & KPI’s Page 237
Page 238
Section 7: Financial Analysis & KPIs Page 40 of 53 Back to Contents Table 2: Procurement Spend by vCode Business Sector for 2023/24 /contd vCode Business Sector Total Spend 2023/24 Manufacturing & Machinery £0.22m Stationery & Office Products £0.14m Marketing & Media £0.11m Personal Care £0.10m Mobile Communications Service Providers £0.07m Clothing £0.03m Retail & Wholesale £0.02m Charitable & Religious Activity £0.02m Laboratory £0.01m Total £181.47m 7.3 The top 20 suppliers to the council account for 47.3% of the procurement spend. The following table shows the top suppliers and spend for the year 2023/24. Table 3: Spend with Top 20 Suppliers in 2023/24 Supplier Name Total Spend 2023/24 ABC Schools Ltd £17.45m Renewi Argyll & Bute Ltd £8.85m Dawson Wam Ltd £8.21m Carr-Gomm Society Ltd £7.19m Hub North Scotland Ltd £5.38m West Coast Motor Services Co. £4.87m Robertson Construction Eastern Ltd £4.79m Enable £4.60m Geo-Rope Ltd £3.34m Hillhouse Quarry Company Ltd £2.36m Kiely Bros Ltd £2.25m DCF Joiners & Building Services Ltd £2.23m MacLeod Construction Ltd £2.04m BCA Insulation £1.98m Key Housing Association Ltd £1.98m Mckenzie Care Homes Ltd £1.78m Barr Environmental Ltd £1.76m Zurich Insurance Company £1.72m Carers Direct Ltd £1.59m Affinity Trust £1.49m Total Spend with Top 20 Suppliers £85.86m Page 238
Page 239
Section 7: Financial Analysis & KPIs Page 41 of 53 Back to Contents 7.4 In 2023/24, spend with SMEs accounted for 57.7% of procurement spend (where supplier size could be determined). The chart below shows the breakdown of spend with Small, Medium and Large companies for 2023/24. 7.5 In 2023/24, spend with our local suppliers accounted for 35.8% of total spend. The table below details our total procurement spend with our local suppliers over the last four financial years. Table 4: Procurement Spend with our Local Suppliers Financial Year Total Procurement Spend Total Local Procurement Spend %s 2022/23 £163,144,959 £60,856,127 37.3% 2021/22 £158,791,996 £47,083,238 29.6% 2020/21 £140,330,641 £45,674,534 32.6% 2019/20 £143,778,777 £41,587,083 28.9% Large 38% Medium 38% Small 19% Unknown 5% 2023/24 - Supplier Size % of Spend Page 239
Page 240
Section 7: Financial Analysis & KPIs Page 42 of 53 Back to Contents 7.6 Key Performance Indicators: Key Performance Indicators Provisional 2025/28 Target Procurement spend with contracted suppliers (%) 90% Contracts awarded to local suppliers (%) 20% Contracts awarded to SMEs (% of contracts awarded) 76% Local suppliers bidding for business with the council (% of bids received) 20% Tenders won by a local supplier where a local supplier has placed a bid (%) N/A Increase the number of community benefits that are delivered through contracts we award locally N/A Invoices paid within 30 days (%) 95.5% Page 240
Page 241
Section 8: Implementation, Reviewing & Reporting Page 43 of 53 Back to Contents 8.1 IMPLEMENTATION 8.1.1 Consultation The council will undertake relevant and proportionate consultation and engagement as part of the preparation of this Sustainable Procurement Strategy. This will help to ensure that our approach and strategy takes account of stakeholders’ views and that stakeholders have the opportunity to engage and contribute to the development of the strategy. This will allow us to gain a better understanding of the needs of Argyll and Bute and to tailor our strategy to reflect those needs. The key stakeholder groups identified for inclusion in this consultation are: • Argyll and Bute Council Employees • Argyll and Bute Councillors • MP and Local MSPs • Key Suppliers • Community Planning Partners • Other interested parties • The general public The full details of our consultation are included within a report to the council’s Procurement Board; this covers what will be involved in the consultation, and the inclusion of feedback to the final strategy. 8.1.2 Approval of Strategy The Sustainable Procurement Strategy will be approved in line with the council’s standard process. After the consultation is complete, the draft strategy will be finalised and sent for approval by the Departmental Management Team, the Strategic Management Team, the Policy and Resources Committee, and Full Council. 8.1.3 Publication of Strategy The council will publish this Sustainable Procurement Strategy on our website, and will notify Scottish Ministers of the publication of our strategy. 8.2 REVIEWING The council will review this Sustainable Procurement Strategy annually. This will help to ensure that we maintain alignment of our procurement activity with our broader priorities and will allow us to revise our strategy where necessary. Section 8 – Implementation, Reviewing & Reporting Page 241
Page 242
Section 8: Implementation, Reviewing & Reporting Page 44 of 53 Back to Contents 8.3 REPORTING The council will, as soon as reasonably practicable following the end of the financial year, prepare an Annual Procurement Report which will include: • A summary of all regulated procurements completed in the year. • A review of whether these procurements complied with this Sustainable Procurement Strategy. • A statement detailing how it is intended that future compliance will be achieved where any procurements were found not to have been carried out in accordance with this Sustainable Procurement Strategy. • A summary of any community benefit requirements imposed as part of a regulated procurement that was completed during the year. • A summary of steps taken to facilitate the involvement of supported businesses in regulated procurements completed during the year. • A summary of anticipated regulated procurements expected to commence in the next two financial years. • Anticipated future procurements. • Any other information as specified by the Scottish Ministers. Page 242
Page 243
Section 9: Policies, Tools & Procedures Page 45 of 53 Back to Contents National Policies: • Equality Act 2010 • Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012 • Organisation for Economic Co-Operation and Development • Procurement and Commercial Improvement Programme (PCIP) – Overview • Procurement Journey • Procurement Reform Update (SPPN 1/2016) • Public Contracts Scotland • Public Contracts Scotland Tender • Scottish Model of Procurement • Scottish Procurement Information Hub • Scottish Sustainable Procurement Duty • Workforce Matters (SPPN 1/2015) Local Policies: • Community Benefits Clauses in Procurement Guide • Corporate Plan 2023-2027 • Outcomes Improvement Plan 2024-2034 • Decarbonisation Plan 2022-2025 • Council Constitution • Equality and Fairness • Health and Safety Policy Section 9 – Policies, Tools & Procedures Page 243
Page 244
Section 9: Policies, Tools & Procedures Page 46 of 53 Back to Contents Tools The council has embedded various tools within its Strategic Procurement Process to assist and ensure best value is achieved in its procurement activity. Utilisation of the tools also supports compliance with the Sustainable Procurement Duty. The key tools utilised by procurement are as follows: • Scottish Government Procurement Journey • Argyll and Bute Council’s Procurement Manual • Argyll and Bute Council’s Supplementary Procurement Guidance • Argyll and Bute Council’s procurement templates catalogue. • Procurement Team Contract work plan • Scottish Government Sustainable Procurement Tools o Prioritisation Tool o Sustainability Test o Flexible Framework Assessment Tool o Life Cycle Impact Mapping • Contract and Supplier Management Framework Tools o Contract Management Prioritisation Matrix o Community Benefits online page Procedures The council’s Standing Orders Relating to Contracts (Standing Orders), the Scottish Government Procurement Journey and the council’s Corporate Procurement Manual apply to all contracts made by or on behalf of the council for the execution of works, the supply of goods and the provision of services. The Standing Orders are subject to the overriding provisions of United Kingdom and Scottish legislation. They are also subject to any UK Government and Scottish Government guidance on public procurement that may be issued from time to time. The Standing Orders shall not apply to any contracts made on behalf of the council by Scottish Procurement, Scotland Excel or any other central purchasing body with whom the council has made arrangements for the award of works, supplies or services contracts on its behalf, save in respect of the reporting requirements prescribed in. Page 244
Page 245
Section 9: Policies, Tools & Procedures Page 47 of 53 Back to Contents The council operates its service delivery programme against a defined set of policies and strategies. As well as conforming to legislative aspects, the council maintains awareness of and an input into the broader aspects of policy making in public services and community development - often working in partnership with Government, other public bodies and the private sector. The majority of procurement activities will continue to support and promote relevant council strategies and policies of which the majority are embedded within existing procurement processes and procedures. Current key strategies, policies and procedures are set out in Plans and Policy | Argyll and Bute Council (argyll-bute.gov.uk). Page 245
Page 246
Section 10: Glossary Page 48 of 53 Back to Contents Term Description Annual Procurement Report The Procurement Reform (Scotland) Act 2014 requires all contracting authorities obliged to publish a Procurement Strategy, to publish an Annual Procurement Report on its regulated procurement activities as soon as reasonably practicable after the end of its financial year. Award A decision to accept a tenderer’s offer to supply/provide specified goods/services/works according to agreed terms and conditions, thereby creating a legally binding contract. Best Value The duty under the Local Government Act in Scotland 2003 to secure continuous improvement in the economy, efficiency and effectiveness with which they exercise their functions. BPIs Best Practice Indicators - A common, core set of National Procurement Best Practice Indicators (BPIs) were developed by the Scottish Government and designed to be applicable and useful to PCCMTs in all parts of the public sector in Scotland. CAT C At a national procurement level, Category C are local contracts for use by individual public bodies. Category A collection of commodities or services sourced from the same or similar supply base, which meet a similar consumer need, or which are inter-related or substitutable. Category Management Procurement approach used within Argyll and Bute Council to manage categories of spend to increase efficiencies and expertise. CDM Regulations Construction (Design and Management) Regulations 2015 Collaboration Cooperative joint working with another public sector organisation. Commodity Sourcing Strategy (CSS) A document that shows the preparatory thinking that is done about a procurement process, including sustainability considerations, stakeholders to be involved, risks etc. Community Benefits Clauses Community Benefits Clauses provide a means of achieving sustainability in public contracts. Contract Management The process of monitoring the performance of a supplier to contract. Contractor The provider of any supplies, services or works under contract. Or, in the context of works, at any stage of the process. Section 10 – Glossary Page 246
Page 247
Section 10: Glossary Page 49 of 53 Back to Contents Term Description Demand Management To take costs out of an organisation by addressing the drivers for spend, aligning spend to business need and eliminating unnecessary consumption. DMT Departmental Management Team within Argyll and Bute Council Dynamic Purchasing System Dynamic Purchasing System (DPS) - Electronic system that can be established to purchase goods and services, similar to a framework agreement, but where new suppliers can join at any time. Equality Duty Compliance with the terms of the Equality Act 2010 and any guidance provided by the Scottish Ministers for local authorities to comply with the Public Sector Equality Duties. Fair Work First Fair Work First is the Scottish Government's flagship policy for driving high quality and fair work across the labour market in Scotland by applying fair work criteria to grants, other funding and contracts being awarded by and across the public sector, where it is relevant to do so. Framework Agreements An agreement or other arrangement between one or more contracting authorities and one or more economic operators which establishes the terms (in particular, the terms as to price and, where appropriate, quantity) under which the economic operator will enter into one or more contracts with a contracting authority in the period during which the framework agreement applies. HSCP Health and Social Care Partnership, also referred to as the Argyll and Bute Integrated Joint Board being the Integration Joint Board established by Order under Section 9 of Public Bodies (Joint Working) (Scotland) Act 2014. ICT Information and Communications Technology IJB Integration Joint Board JSCS Joint Strategic Commissioning Strategy. Argyll and Bute HSCP has developed a Joint Strategic Commissioning Strategy. The purpose of the Commissioning Strategy is to set out how the Partnership will put in place a sustainable and diverse health and social care service which meets current and future needs for our communities. KPIs Key Performance Indicators. Measurable value that demonstrates how effectively the council is carrying out procurements. Page 247
Page 248
Section 10: Glossary Page 50 of 53 Back to Contents Term Description LTR Light Touch Regime - Reference to the process for the award of a public contract for social and other specific services. Net Zero No longer adding to the total amount of greenhouse gases in the atmosphere. Greenhouse gases include carbon dioxide (CO2) and methane. CO2 is released when oil, gas and coal are burned in homes, factories and to power transport. Methane is produced through farming and landfill. These gases increase global temperatures by trapping the sun's energy. Notice Advert PCCMT Procurement, Commercial and Contract Management Team within Argyll and Bute Council PCIP Procurement Commercial Improvement Programme Assessment Annual assessment of public sector organisations that focuses on the policies and procedures driving procurement performance and the results they deliver. PCS Public Contracts Scotland - The national advertising portal used to advertise all Scottish Government goods, services or works contract opportunities. PCS-T Public Contracts Scotland-Tender - The national eTendering system. PECOS Professional Electronic Commerce Online System – cloud based purchase to pay system used by Argyll and Bute Council. PIN Prior Information Notice - Early notices on PCS to advise of the intention to advertise later. PPP Public Private Partnership Is a partnership between local government and private companies to provide services to the community. Procurement Exercise Full end to end procurement exercise documentation from strategy development to contract and supplier management. Procurement Function The business management function that ensures identification, sourcing, access and management of the external resources that an organisation needs or may need to fulfil its strategic objectives. Page 248
Page 249
Section 10: Glossary Page 51 of 53 Back to Contents Term Description Procurement Journey Revised public procurement toolkit with guidance and templates on the procurement process or Construction manual when appropriate. The Procurement Journey will be enhanced on an ongoing basis with feedback from users and any other identified good practice guidance and tools, where appropriate, to ensure a standardised approach to the supply base. Procurement Manual Internal Argyll and Bute Council operational procurement guide. Procurement Strategy The Procurement Reform (Scotland) Act 2014 requires contracting authorities with significant procurement expenditure in the next financial year to publish a procurement strategy setting out how they intend to carry out regulated procurements, or review the current strategy and make appropriate revisions. P2P Purchase to Pay Process - Entire supply chain process, from goods receipt to payment process. Quick Quote Procurement method for lower value tenders, where the Invitation to Quote/Invitation to Tender is sent to a set distribution list of suppliers rather than being publically advertised. Scotland Excel Scotland Excel is the Centre of Procurement Expertise for Scotland's local government sector. Scottish Procurement Directorate within the Scottish Government, carrying out procurements on behalf of the Scottish public sector. SDS Self-Directed Support Services/ Supplies/ Works A public service contract is a contract having as its object the provision of services. A public supply contract is a contract having as its object the purchase, lease, rental or hire purchase with or without an option to buy, of products. A public works contract is a contract having as its object a building or civil engineering project or piece of work. Small Medium Enterprise (SME) The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding £36m and/or an annual balance sheet total not exceeding £18m. Companies House accounts guidance - GOV.UK (www.gov.uk) SMT Strategic Management Team within Argyll and Bute Council Page 249
Page 250
Section 10: Glossary Page 52 of 53 Back to Contents Term Description Social Enterprises Businesses whose primary objectives are social or “more than profit”. Specifications The part of the invitation to quote or invitation to tender which details the nature and quality of the goods, services or works. Stakeholder Any person or group who has a vested interest in the success of the procurement activity, i.e. either provides services to it, or receives services from it. Standing Orders The set of rules governing the procurement and financial regulations with which the council must comply, in terms of the Local Government Scotland Act 1973. Supplier An entity who supplies goods or services. Supplier Development Programme A business support initiative using training and information to improve the competitiveness of local businesses. Supply Chain All activities, resources, products etc. involved in creating and moving a product or service from the supplier to the procurer. Supported Business A supported business’ primary aim is the social and professional integration of disabled or disadvantaged persons. At least 30 per cent of the employees of those businesses should be disabled or disadvantaged. Sustainability In relation to procurement, sustainability involves understanding the potential environmental, social and economic impacts that are a result of purchasing decisions. Tender An offer, or bid, by a tenderer in response to an invitation to tender (ITT) or a mini-tender in a framework agreement. Third Sector The third sector includes charities, social enterprises and voluntary groups; delivers essential services, helps to improve people's wellbeing and contributes to economic growth. Value for Money An economic assessment by the public sector as to whether a project represents value for money; the optimum combination of cost and quality to provide the required service. Whole Life Costs The costs of acquiring goods or services (including consultancy, design and construction costs, and equipment), the costs of operating it and the costs of maintaining it over its whole life through to its disposal – that is, the total ownership costs. These costs include internal resources and overheads. Page 250
Page 251
Section 11: Strategy Ownership and Contact Details Page 53 of 53 Back to Contents 11.1 The Argyll and Bute Council Procurement, Commercial and Contract Management Team are part of the Legal and Regulatory Support Services team which sits within the Customer Services Directorate. 11.2 The Procurement, Commercial and Contract Management Team works with the council’s services and suppliers to develop contracts and procedures to deliver Best Value. 11.3 The team is responsible for the procurement of works, goods and services for all council departments; and for developing procurement processes, procedures, strategies and policies in line with national best practice. 11.4 If you have any queries in relation to this strategy, please contact: • Anne MacColl-Smith, Manager, Procurement, Commercial and Contract Management Team • Procurement@argyll-bute.gov.uk Section 11 – Strategy Ownership & Contact Details Page 251
Page 252
This page is intentionally left blank
Page 253
Appendix 2 Stakeholder Consultation Sustainable Procurement Strategy 2025/2028 Page 253
Page 254
Stakeholder Consultation Report 2024 CONTENTS 1.0 INTRODUCTION ................................................................................................. 1 2.0 BACKGROUND ................................................................................................... 1 2.1 Sustainable Procurement Strategy 1 3.0 CONSULTATION OUTCOMES ........................................................................... 3 4.0 CONCLUSION ..................................................................................................... 4 Appendix 1: Survey Questions .................................................................................... 5 Appendix 2: Survey Responses .................................................................................. 9 Appendix 3: SGN 2 Sustainable Procurement & Types of Community Benefits ....... 34 Appendix 4: SGN 3 Community Benefits Clauses .................................................... 37 Page 254
Page 255
Page 1 of 45 Back to Contents Stakeholder Consultation Report 2024 1.0 INTRODUCTION Argyll and Bute Council’s Procurement, Commercial and Contract Management Team (PCCMT) would like to begin this report by thanking all stakeholders who took the time to respond to our consultation in relation to the Sustainable Procurement Strategy 2025/28. It is important for us to ensure that our key document and the objectives it contains reflect the concerns of our key stakeholder groups, both internal and external. 2.0 BACKGROUND 2.1 Sustainable Procurement Strategy The Argyll and Bute Council Sustainable Procurement Strategy 2025/28 sets out a framework which is designed to enable the council to continue on its journey of change and innovation through: o To ensure all procurement staff and council officers involved in the procurement process are fully aware of all aspects and impacts of the procurement rules and any other relevant regulations. o Increase opportunities for commercial savings. o Reduce the value of non-contract spend. o To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. o Increased opportunities for local suppliers to help grow the local economy. o Increased engagement and collaboration with suppliers and SDP. o To develop resilient local supply chains, providing clear advice and consistent approaches to procurement and community benefits, ensuring businesses are aware of, and are able to take advantage of, procurement opportunities supported by a programme of active and innovative supplier engagement and development support. o To increase the knowledge and understanding of the benefits of sustainable procurement of all council staff who participate in the procurement process and make better use of the expertise within the council to ensure wider sustainable outcomes are achieved. o Continue to deliver best value contracts. o More streamlined and leaner processes. Page 255
Page 256
Page 2 of 45 Back to Contents Stakeholder Consultation Report 2024 o Procurement continues to be a key strand in the delivery of council strategies and policies. o Build capacity and skills within the council to improve procurement, commissioning and contract management activity and support procurement people of tomorrow. o Cross-service collaboration. 2.2 The Council has a statutory requirement to update and publish its Procurement Strategy on an annual basis following the key changes introduced by the Procurement Reform (Scotland) Act 2014 and the Procurement (Scotland) Regulations 2016. 2.3 The Council also has a requirement to consult with key stakeholder groups for this document. The aims of the consultation were: • To increase awareness of the Council’s Sustainable Procurement Strategy and engage meaningfully with key stakeholder groups; • To make sure the links between the strategy and other relevant strategies and plans are clear; and • To enable a diverse range of stakeholder groups to take part and thereby influence the strategy. 2.4 The consultation was completed in November 2024, via a web-based survey on the council’s website. The consultation was publicised via emails to key internal and external stakeholders, as well as being available to the general public through the “Keep me in the Loop” service. Appendix 1 details the consultation questions asked and Appendix 2 details the responses received. Page 256
Page 257
Page 3 of 45 Back to Contents Stakeholder Consultation Report 2024 3.0 CONSULTATION OUTCOMES 3.1 65 responses were received, 51% of which were from the general public, and 25% from Argyll and Bute Council employees as the two largest response groups. This was an increase from the 47 responses received for the similar consultation undertaken in 2021. Some valuable free format comments were provided, which are listed in Appendix 2 along with the council’s response to each. As a result of the consultation, we have amended the policy documents as noted in Item 3.4. 3.2 The majority of responses to the open-ended questions within the consultation provided feedback that included queries in relation to areas already covered in the document or in more operational documents, as well as some feedback on areas out with the scope of the current consultation and strategy document. Procurement comments on these responses have been provided, and the team will consider the application of improvements where relevant. 3.3 Overall, the responses to the consultation have been positive about the content of the new Sustainable Procurement Strategy. 3.4 Following the consultation process, the Strategy has been updated as follows: Section 2: Introduction Page 3: added new Item 2.4 2.4 Sustainable procurement means making purchasing decisions that balance environmental protection, social progress, and economic development, both for present and future generations. For the council, this means: • Environmental Sustainability: Making procurement decisions that minimise negative environmental impacts, support climate resilience, and contribute to our net-zero targets through reduced carbon emissions, protection of biodiversity, and responsible resource use. • Social Sustainability: Delivering positive outcomes for our communities through fair work practices, skills development, and enhanced community wellbeing and resilience. • Economic Sustainability: Creating lasting economic benefits through support for local businesses, innovation, and long-term value for money. Page 257
Page 258
Page 4 of 45 Back to Contents Stakeholder Consultation Report 2024 3.4/ Section 4: Strategy Rationale and Context Page 10: Item 4.4, included: There is an ever-increasing focus from the Scottish Government on measuring and managing Scope 1, 2 and 3 emissions across our supply chain, including specific supplier reporting requirements for Scope 3 emissions from purchased supplies, services and works. Section 5: Strategic Aims, Key Priorities & Action Plan Page 11 - Page 28 Title changed to Strategic Aims, Strategic Objectives, Key Priorities & Action Plan. Page 14: Item 5.2.3 - How we will do it Added the following: ➢ Provide support to wider council teams with their sustainability and net- zero targets as required; including updating templates to meet the changing needs of the council and the Scottish Government, and adapting procurement processes to support these targets whilst still complying with Procurement Regulations. As a result of the above, this also affected change to the Action Plan – Page 20 – Actions. Page 26: Procurement Strategy Action Plan 5.5.1 Good Governance Item 7: Comply with the sustainable procurement duty – the following was added: Item F - The Procurement, Commercial and Contract Management Team will provide support to the wider council in relation to emissions management within council contracts. Procurement activities directly influence the council’s Scope 3 emissions through our supply chains, which will be monitored and measured in line with Scottish Government requirements. 4.0 CONCLUSION The stakeholder responses received included well-considered comments which we have found very valuable. The strategy has been streamlined in response to the comments and we have ensured that all matters highlighted by stakeholders have been included. Furthermore, we will take into account the suggestion of a summary page setting out the key points when we draft the next strategy. Page 258
Page 259
Page 5 of 45 Back to Contents Stakeholder Consultation Report 2024 Appendix 1 SURVEY QUESTIONS 1. Please indicate which key stakeholder group(s) you belong to: • Argyll and Bute Council Employees • Argyll and Bute Councillors • Local MSPs and MP • Suppliers to Argyll and Bute Council • Community Planning Partners • Community Councils • Other interested parties (please state) • General public SUSTAINABLE PROCUREMENT STRATEGY 2025/2028 The key changes to the document this year is the Procurement Strategy and Sustainable Procurement Policy 2022/25 has been incorporated into one new document and renamed the Sustainable Procurement Strategy 2025/2028. All sections have been updated to reflect the current context for this strategy. The Procurement Strategy by Category has also been updated to reflect new plans within the categories and the financial analysis has been updated with current 2023/2024 data. GENERAL: 2. How informative or otherwise did you find the strategy? • Very informative • Informative • Neutral • Uninformative • Very uninformative 3. To what extent do you agree or disagree with the following statements? a. The strategy was easy to read • Strongly agree • Agree • Neither agree or disagree • Disagree • Strongly disagree Page 259
Page 260
Page 6 of 45 Back to Contents Stakeholder Consultation Report 2024 b. The format made it easy to follow • Strongly agree • Agree • Neither agree or Disagree • Disagree • Strongly disagree c. The strategy is comprehensive • Strongly agree • Agree • Neither agree or disagree • Disagree • Strongly disagree d. The key priorities are clear • Strongly agree • Agree • Neither agree or disagree • Disagree • Strongly disagree STRATEGIC CONTEXT: 4. Are there any strategic issues which the strategy has not considered? If yes, please identify them below and give details of how the Sustainable Procurement Strategy should address them. Page 260
Page 261
Page 7 of 45 Back to Contents Stakeholder Consultation Report 2024 KEY PRIORITIES: Key priorities for regulated procurements have been identified in the Strategy (Section 5.5) in line with Section 15(5) of the Procurement Reform (Scotland) Act 2014. 5. Do you consider the activities relating to these key priorities to be appropriate for the council? • Yes • No • Don’t know 6. Would you propose an additional or alternative key priority or activity in relation to regulated procurements? 7. Are there any additional priorities we should include in relation to Sustainable Procurement? Page 261
Page 262
Page 8 of 45 Back to Contents Stakeholder Consultation Report 2024 COMMENTS 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Page 262
Page 263
Page 9 of 45 Back to Contents Stakeholder Consultation Report 2024 Appendix 2 SURVEY RESPONSES 65 responses were received to the consultation survey. The previous consultation (November 2021) received 47 responses to the survey. 1. Please indicate which key stakeholder group(s) you belong to: Stakeholder Groups 2024 Respondents (%) 2021 Respondents (%) 2020 Respondents (%) Argyll & Bute Council Employees 25 21 25 Argyll & Bute Councillors 2 2 0 Local MSPs and MP 0 2 0 Suppliers to Argyll & Bute Council 6 6 7 Community Planning Partners 3 0 0 Community Councils 9 4 7 General public 51 64 58 Other interested parties 2 0 3 No response to question 3 0 1 Page 263
Page 264
Page 10 of 45 Back to Contents Stakeholder Consultation Report 2024 SUSTAINABLE PROCUREMENT STRATEGY 2025/2028 GENERAL: 2. How informative or otherwise did you find the strategy? 65% of respondents found the Sustainable Procurement Strategy to be either informative or very informative, and 16% of respondents stating that it was uninformative or very uninformative. 3. To what extent do you agree or disagree with the following statements? a. The strategy was easy to read 50% of respondents agreed or strongly agreed that the strategy was easy to read; while 25% disagreed or strongly disagreed. 20% 45% 18% 8% 8% 2% 0% 10% 20% 30% 40% 50% Very Informative Informative Neutral Uninformative Very uninformative No Response How informative or otherwise did you find the Strategy? Page 264
Page 265
Page 11 of 45 Back to Contents Stakeholder Consultation Report 2024 b. The format made it easy to follow 51% of respondents agreed or strongly agreed that the format of the strategy made it easy to follow; while 20% of respondents disagreed or strongly disagreed. 8% 42% 22% 11% 14% 5% 0% 10% 20% 30% 40% 50% Strongly agree Agree Neither agree or disagree Disagree Strongly disagree No Response The Strategy was easy to read 9% 42% 20% 11% 9% 9% 0% 10% 20% 30% 40% 50% Strongly agree Agree Neither agree or disagree Disagree Strongly disagree No Response The format made it easy to follow Page 265
Page 266
Page 12 of 45 Back to Contents Stakeholder Consultation Report 2024 c. The strategy is comprehensive 46% of respondents agreed or strongly agreed that the Procurement Strategy is comprehensive; while 21% of respondents disagreed or strongly disagreed. d. The key priorities are clear 49% of respondents agreed or strongly agreed that the key priorities within the Strategy are clear; while 28% of respondents disagreed or strongly disagreed. 12% 34% 25% 12% 9% 8% 0% 10% 20% 30% 40% Strongly agree Agree Neither agree or disagree Disagree Strongly disagree No response The Strategy is comprehensive 11% 38% 15% 14% 14% 8% 0% 10% 20% 30% 40% 50% Strongly agree Agree Neither agree or disagree Disagree Strongly disagree No response The key priorities are clear Page 266
Page 267
Page 13 of 45 Back to Contents Stakeholder Consultation Report 2024 STRATEGIC CONTEXT: 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Sustainable Procurement Strategy should address them. Consultation Feedback Procurement Comment Based on my detailed review of the draft strategy, there are several strategic issues that need to be addressed: Climate Emergency Response While the strategy mentions climate change briefly, it lacks a comprehensive framework for how procurement will support the Council's climate emergency declaration and net-zero commitments. The strategy should: - Detail how procurement decisions will be evaluated for climate impact - Outline specific carbon reduction requirements in supply chains - Include climate adaptation considerations in procurement decisions Emissions Management The strategy makes no reference to Scope 1, 2, or 3 emissions. Given that procurement activities significantly influence our - - - Scope 3 emissions, the strategy should: - Include a framework for measuring and monitoring supply chain emissions - Set specific targets for reducing procurement-related emissions - Establish supplier emissions reporting requirements Sustainability Definition and Framework The strategy lacks a clear definition of sustainability in procurement. It should include: - A clear definition aligning with the three pillars approach (environmental, social, economic) - Specific sustainability criteria for different procurement thresholds - Practical guidance for procurement officers on sustainability assessment Circular Economy The strategy does not address circular economy principles. It should include: - Requirements for product lifecycle considerations - Waste reduction and resource efficiency criteria - Reuse and recycling requirements in relevant contracts Implementation Framework While Section 8 is titled "Implementation, Reviewing & Reporting," the strategy needs more detail on: - Specific timelines for implementing sustainability measures - Resource requirements for delivery - Training needs for procurement officers - Monitoring and reporting frameworks for sustainability outcomes These additions would significantly strengthen the strategy's ability to deliver sustainable outcomes through procurement activities. Comments and suggestions are noted. A meeting was arranged with consultee and agreed various changes to the strategy and action plan. See Item 3.4 on Page 3 of the main report which details the changes made. Page 267
Page 268
Page 14 of 45 Back to Contents Stakeholder Consultation Report 2024 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Procurement Strategy should address them. /contd Consultation Feedback Procurement Comment Collaborative/Shared Procurement Opportunities. Noted, collaboration takes place with our public sector bodies when there is an opportunity to do so. We share our contract plans with each other, so we are aware of each other's spend profile to enable collaborative opportunities to take place. The redesign of homecare has been done with little to no consultation with the employees who work in this sector. Senior management have so far not introduced themselves to the employees who work in this sector. A very poor "redesign monthly update" has been sent to employees highlighting stage 2 which discusses redeployment and competitive interviews with no discussion. I would argue the no clear vision has been set for stage 1 so unclear how goals can be set for stage 2. This has caused anxiety with employees. Senior management do not appear to understand the role of employees in this sector and the amount of work and efficiencies that has been made to help sustain a quality homecare service for the future. A poor staff survey has been sent which asks questions not related to the redesign and again with no clear vision. As an employee I feel undervalued and unnecessary anxiety has been caused. Homecare is a very adaptable team who have faced many challenges with the ongoing homecare crisis. This has been handled very poorly and more work is needed to ensure staff are values and ideas are taken on board. Noted, PCCMT are not involved in the Care at Home Redesign Review, however, this comment will be shared with the Head of Adult Care who is responsible for it in order that this can be dealt with. Corrupt Noted. Fundamental decisions on provision of services - at what level might these be in danger of outsourcing? Noted. PCCMT is not involved in any outsourcing decisions, these are dealt with by full council on recommendation of council officers following a lengthy process. I thought the strategy was difficult to read - 50 pages of often jargon and govt- speak. Too much detail. You should have provided a summary of the key points Noted. In the future, PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Cannot see how the policy addresses poverty? The document is far too long for the general reader (ratepayer or not). Noted. In the future, PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Page 268
Page 269
Page 15 of 45 Back to Contents Stakeholder Consultation Report 2024 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Procurement Strategy should address them. /contd Consultation Feedback Procurement Comment Management of spend below £50k? Does the Council adopt 'preferred supplier' status for particular goods and services covering an extended period? Noted. We do not have "preferred providers" or "approved contractors". There is a clear process that council staff should follow for purchases under £50k, this is detailed on Page 7 of our Procurement Manual here. I was surprised that the proposed performance indicators were not reported alongside the information of current procurement to identify the extent of any gap in execution which the new strategy might need to address as a form of explicit organisation learning Noted. The existing performance indicators are reported on an annual basis to the Scottish Government. This is a legal requirement, please refer to Page 28 – Item 7.1.2 of our Annual Procurement Report. Insufficient information or focus on sustainability and how it should be interpreted in environmental or ethical terms. - [ ] Key objectives don’t mention sustainable environmental or ethical objectives - [ ] Mission statement mentions sustainable procurement, public services and outcomes, but doesn’t say what sustainable means in any understandable and measurable context - [ ] Sustainable procurement duty diagram has no clear mention of ethics or environmental impact Noted, please see comment above, the strategy has been updated to take cogniscience of these points. I am left wondering what exactly it is that is to be procured as there were no specific examples Noted. The Strategy details how we are going to procure, what we are going to buy is detailed in our Annual Procurement Report. Spend on housing seems low and focussed only on homelessness. Noted. The council does not have any housing stock hence why there is no spend relating to housing. I saw no contingency planning for unforeseen emergency procurement. In recent times, an obvious case has been the rapid emergence of Covid-19 and the need for action. Although much reaction to this kind of development will be at supra-county level, there will be local issues requiring expenditure at county level. Another example has been, and will be, weather-driven emergencies such as the debris flow blockage of transport routes and damage from flood inundation. Noted. This forms part of our Annual Procurement Report and Contract Plan for 2024/25 and 2025/26 to ensure we have sufficient contracts in place to enable us to have access to appropriate contractors should an emergency response be required. Page 269
Page 270
Page 16 of 45 Back to Contents Stakeholder Consultation Report 2024 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Procurement Strategy should address them. /contd Consultation Feedback Procurement Comment It needs a 1page bullet point summary. It's outrageous complex. I was a former Local Government Finance Officer Noted. In the future, PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Supporting non-residents and summer businesses by being more focused on Tourism and travel issues and the diverse communities that make A&B a place to live including non-residents and second home owners. Procurement that benefits all sectors and doesn’t leave all the other diverse groups behind. Invariably that’s what happens when too sharply focussed on residential and strict local formulas of growth that don’t meet the needs of all. Procurement narratives that leave out those that don’t fit the alternative and vilified demographic populations will only marginalise those sectors that are a major driver to the regions prosperity. Refocus on broadening out the scope of key populations that need including in this review. We live in a broad church. Support that church. Noted. You have totally failed to understand the way the strategy will have a very bad impact on disabled people. Noted. This will create yet another beurocratic department involving yet another "manager" at a huge salary. This on top of an already insane salary for top "executives" means yet again another council tax rise. The council structure has given rise to an uncontrollable monster running away with our cash, promoting many woke and political agendas. whereas it should focus on providing a value for money service, not promoting self inflation. Noted. Legal compliance, which is not the same as "Good governance". There could be more, but I gave up. Noted. Page 270
Page 271
Page 17 of 45 Back to Contents Stakeholder Consultation Report 2024 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Procurement Strategy should address them. /contd Consultation Feedback Procurement Comment No comment Noted. Communication. The doc is stupidly long and unstable. Unsustainable. Noted. In the future, PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. There is no reference to green and blue economies and how procurement plays a role, and how it will enable buying of innovative solutions which add value and benefit as we move towards net zero. Real Living Wage commitment is notably missing and should be addressed as part of community wealth building agenda, including ensuring that Argyll and Bute Council become accredited as a Real Living Wage Local Authority. Noted. As detailed above, the Strategy has been reviewed and amended to take into account consultees' feedback regarding sustainability. Fair Work First practice is an integral part of our procurement activity, a part of which incorporates the Real Living Wage requirement. We have an action plan to monitor our progress on all matters Fair Work First and report on this on an annual basis via the Annual Procurement Report to Scottish Government. Naively written by a recent MBA person with all the “strategic” buzz words of the day but in fact means absolutely nothing. What is value? Not considered nor answered. Noted. Best value is in every part of the procurement process and does not require to be explained in the Strategy. However, for your information it is more detailed within our Procurement Manual which forms part of the council's standing orders. Yes - the issue of modelling Value for Money is too narrowly defined. VfM in the context of sustainable procurement must consider a much wider short / long term set of impacts than currently provided. The way procurement is undertaken can affect (as you recognise) a large set of environmental, social and economic issues. Therefore, VfM should be a two stage process. One the narrow contract by contract comparison, but the second is the larger longer term VfM (Social Rate of Return) of the overall decision making process around procurement and its management. Noted, as detailed above, the Strategy has been reviewed and amended to take into account consultee's feedback regarding sustainability. New legislation for Scotland on Community Wealth Building is expected in 2025 which may have implications for procurement, particularly under the Finance pillar of CWB. Should the strategy make reference to this new legislation with the caveat that the detail is not yet known? Noted, Our Contract Standing Orders require us to adhere to all new legislative requirements, therefore, there is no requirement to include new legislation in the Strategy. However, as it currently stands, the council meets the various requirements for procurement activity under the Community Wealth Building procurement pillar and continues to work in partnership with our local public sector anchor organisations to deliver community wealth building principles for the residents of Argyll and Bute. Page 271
Page 272
Page 18 of 45 Back to Contents Stakeholder Consultation Report 2024 4. Are there any strategic issues which the Strategy has not considered? If yes, please identify them below and give details of how the Procurement Strategy should address them. /contd Consultation Feedback Procurement Comment No way of knowing this without spending a lot of time doing research that we simply do not have the capacity to do. Noted, in the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Please affirm your opposition to the ongoing genocide in Palestine. Additionally confirm that you will not use companies who are complicit in war crimes and divest from Israel. The council meet the Scottish Government’s procurement requirements when procuring from our contractors. There does not seem to be mention of the entrenched culture of ignoring conflict of interest/ obviously passing money via contracts to pals, etc that goes on. No mention of mitigating risk through assessing eg who sits on a board, before awarding multi million pound contracts. It's well known that there is a lot of corruption in Argyll & Bute, with the same names repeatedly mentioned. That would need dealt with first and would stop the embarrassment of the council nationally pleading poverty while everyone knows it’s about misused resources as opposed to lack of. Noted. PCCMT have a formal and clear conflict of interest policy whereby every council officer involved in a contract must formally notify us of any conflict which would require them to be removed from that piece of work, such as evaluating tenders etc. As PCCMT Manager, I am concerned about this feedback. Please can you message me on anne.maccoll-smith@argyll-bute.gov.uk to provide me with more information to allow me to investigate your concerns. A more well rounded and robust Sustainable Food Strategy that places more value on local food and prioritises it's integration into prominent supply chains. This could be addressed with a separate procurement strategy specifically focused on sustainable food. Noted. PCCMT and our catering colleagues work in partnership to ensure we can support local suppliers of food to bid for our council contracts. This has proven to be succcessful across a number of our food supply chains. Page 272
Page 273
Page 19 of 45 Back to Contents Stakeholder Consultation Report KEY PRIORITIES: Key priorities for regulated procurements have been identified in the strategy, in line with Section 15(5) of the Procurement Reform (Scotland) Act 2014. 5. Do you consider the activities relating to these key priorities to be appropriate for the council? 66% of respondents agreed that the key priority areas are appropriate for the Council; 15% of respondents disagreed. 66% 15% 17% 2% Do you consider these key priority areas to be appropriate for the Council? Yes No Don't Know No response Page 273
Page 274
Page 20 of 45 Back to Contents Stakeholder Consultation Report 6. Would you propose an additional or alternative key priority or activity in relation to regulated procurements? Consultation Feedback Procurement Comment Based on my review of Section 5.5 of the draft strategy and considering my role as Climate Change Officer, I would propose the following additional key priority for regulated procurements: "Climate Change and Environmental Sustainability in Regulated Procurement" This priority would include activities such as: - Carbon Assessment Framework - Establish mandatory carbon impact assessments for all regulated procurements to support the Council's net-zero commitments. Environmental Criteria Include specific environmental sustainability criteria in tender evaluations for regulated procurements, with appropriate weightings reflecting the contract's environmental impact. Supply Chain Emissions Require suppliers in regulated procurements to: - Report on their emissions reduction plans - Demonstrate environmental management systems - Provide carbon footprint data for goods and services Circular Economy Include circular economy principles in regulated procurement specifications where appropriate, focusing on: - Product lifecycle considerations - Waste reduction requirements - Resource efficiency criteria This additional priority would strengthen the strategy's alignment with: - The Council's climate commitments - Scottish Government's climate targets - Environmental protection duties - Sustainable procurement requirements Comments and suggestions are noted. A meeting was arranged with consultee and agreed various changes to the strategy and action plan. See Item 3.4 on Page 3 of the main report which details the changes made. The priorities and activities are comprehensively discussed and ones that I would fully support. The whole shift from purely transactional to socially and environmentally driven decisions is really heartening. The nitty- gritty is how to achieve this within a constrained budget. Noted. Page 274
Page 275
Page 21 of 45 Back to Contents Stakeholder Consultation Report 6. Would you propose an additional or alternative key priority or activity in relation to regulated procurements? /contd Consultation Feedback Procurement Comment School bus from Lochgilphead to Tarbert to cut down the large number of vehicles now taking pupils on that road on school days. Noted. Information shared with the council's transport manager to review. I think you have the key priorities covered. Noted. Cannot say as although section 5 is titled as Key Priorities and Action Plan it then just rattles on about Aims and Outcomes and the section 5.5 highlighted as the bit we need to look at in the Question above is all about Good Governance. It would be nice if the section on Key Priorities started by just saying very clearly Priority 1 is .....Priority 2 is..... I would ask you to do a keyword search on the word Priority in your document - i think you will be surprised by the result. Noted. Section 5 heading updated to ensure reader has understanding that section covers key aims, objectives, priorities and action plan. Section 5.5 specifically addresses our key priorities. Structure Noted. Some kind of assurance that the users of the services provided through procurement get something that is workable and holds suppliers to account. Noted. Through our contract management framework we have trained all staff involved in contracts to be able to manage their contracts effectively and efficiently to ensure best value is being delivered. Yes Noted. Much greater focus on environmental sustainability, alongside existing defined priorities. Prioritise, where possible to be clear how priority conflicts are agreed or settled. Noted. I am all for sustainable procurement as a principle but without actual examples of how and where it would be applied in real situations it's rather meaningless Noted. Please refer to Item 7.2 – 7.2.2 of our Procurement Report which we publish on an annual basis. This will provide you with examples. In order to encourage enterprise and entrepreneurship it is necessary to improve the general ambience, especially of a small seaside town like Rothesay. Noted. As detailed above, the Strategy has been reviewed to take into account consultees' feedback on sustainability. Awards to local suppliers in prior years 2022-23 was 37% yet same kpi for planned period is only 20% also SME kpi of 74% which I assume includes local supplier. The statistic of 37% you refer to relates to our annual procurement spend with our local suppliers, not contracts awarded during that period. The KPI for contracts awarded to local suppliers is set at 20%, and the KPI for contracts awarded to SMEs is set at 76%, which does include local and outside suppliers. Please note Section 7.1 of our Annual Procurement Report which provides more detail. Page 275
Page 276
Page 22 of 45 Back to Contents Stakeholder Consultation Report 6. Would you propose an additional or alternative key priority or activity in relation to regulated procurements? /contd Consultation Feedback Procurement Comment Provision for periodic review and assessment of spend and progress when viewed against schedules specified either by the contract or the tender document. This will be important where works extend over a significant period. Noted. Through our contract management framework we have trained all staff involved in contracts to be able to manage their contracts effectively and efficiently to ensure best value is being delivered. It's all about communication Local Suppliers are put off by red tape get to the point and principles. Pay promptly, offer staged payments. Hold 10% for quality and snags, over completion on time bonuses. Noted. Your procurement fails to ensure that the environment is protected. Here is an example. When you put out subsidised bus services to tender, you should insist on two things 1. That the bus must be able to accommodate wheelchairs, 2. The bus must be electric Noted. Changes have been made to the strategy as detailed in Item 3.4 of the main report. Issue list of requirements at appropriate times. Noted. We publish our contract plan every year following the council's budget setting to enable the market and supply base to see what we are looking to buy and when. What are your "Key Priorities"? Are they in Chapter 5, titled "Aims, Key Priorities and Action Plan", which seems to contain "Strategic Objectives" but no priorities as such (by which I mean a clear precedence of this priority X over priority Y). Noted. No Noted. In page 39, £0.37m is allocated to "Data not available". A key priority to regulated procurement should be finding out the specific purpose for such expenses. Noted. We are aware of the suppliers this spend was allocated to and for what purpose the spend was made. However, the Scottish Procurement Information Hub (Scottish Government) who cleanses and publishes our data, does not have a trade classification for these suppliers. For the purposes of categorising spend under “Business Sector” groups, unfortunately, businesses with no trade classification set are assigned as Data Not Available. However, we are working with our colleagues at the Hub to resolve this issue. Page 276
Page 277
Page 23 of 45 Back to Contents Stakeholder Consultation Report 6. Would you propose an additional or alternative key priority or activity in relation to regulated procurements? /contd Consultation Feedback Procurement Comment People who can deliver on time at a good price with ethical and green credentials. Noted. Through our contract management framework we have trained all staff involved in contracts to be able to manage their contracts effectively and efficiently to ensure best value is being delivered. P12 - 5.2 it would be good to see the strategic objective of “good governance” have narrower focus on delivering outcomes and on maximising value and benefit; contract management to ensure outcomes are delivered and performance matches expectations. Less focus on compliance with processes and procedures which should be a given. P15 - 5.2.2 it would be good to see more in this section about procurement innovation and seeking innovative solutions to support council’s financial challenges, this could strongly link with service redesign; community participation requests, participatory budgeting. Identifying areas where Procurement could lead on these rather than always seeing their role as Buyers. We are required to ensure legal compliance is consistently delivered in our procurement activity. However, maximising value and benefit are at the heart of our strategic objective of “Value for Money to support council’s financial challenges”. Innovation is an integral part of our procurement activity as detailed in Section 3 - Procurement Vision and Mission Statement, and Section 4 – Strategy Rationale and Context. Additional no. Rip it up and simplify your approach to supply chain management. Noted. No Noted. No Noted. N/A Noted. Employees accountability and pound of flesh. Noted. Can't think of any relevant to our community. Noted. Divest from Israel Noted. I think you have to focus on ENACTING them not just saying them Noted. Our action plan will detail how and when we deliver on the requirements of the strategy. No Noted. Page 277
Page 278
Page 24 of 45 Back to Contents Stakeholder Consultation Report 7. Are there any additional priorities we should include in relation to Sustainable Procurement? Consultation Feedback Procurement Comment As Climate Change Officer, I suggest including an additional strategic priority focused specifically on "Sustainable and Climate-Resilient Procurement". This priority would strengthen the strategy's approach to sustainability and climate action, areas which currently lack dedicated focus within the existing priorities. The new priority should encompass four key aims: Firstly, delivering procurement that actively supports our net-zero targets through establishing a comprehensive carbon assessment framework for all regulated procurements. This would enable us to measure and reduce procurement-related emissions systematically. Secondly, embedding circular economy principles by incorporating whole-life costing and resource efficiency requirements into our procurement processes. This approach would help reduce waste and improve resource use across our supply chains. Thirdly, supporting climate resilience by including specific adaptation requirements in relevant contracts. This would help build more resilient supply chains and ensure our procurement decisions consider long- term climate impacts. Finally, driving sustainable innovation by encouraging suppliers to propose sustainable solutions in their tender responses. This would foster increased adoption of sustainable practices throughout our supply chain. This additional priority would complement the existing five strategic objectives while providing specific focus on sustainability and climate action. It would strengthen the strategy's alignment with our climate commitments, provide clear guidance for procurement officers, and support suppliers in understanding our sustainability requirements. I would welcome the opportunity to discuss how this priority could be integrated into the strategy's existing framework. Comments and suggestions are noted. A meeting was arranged with consultee and agreed various changes to the strategy and action plan. See Item 3.4 on Page 3 of the main report which details the changes made. Based on what we are seeing from other sectors it would be worth including supply chain management, for example if a company is buying equipment it must come from a manufacturer that complies with anti slavery laws etc and has policies in place. Where appropriate think in terms of the circular economy. Noted. We have trained all staff involved in contracts contract management to ensure they have the necessary skills to manage the contracts during its term to ensure best value is being achieved. Page 278
Page 279
Page 25 of 45 Back to Contents Stakeholder Consultation Report 7. Are there any additional priorities we should include in relation to Sustainable Procurement? /contd Consultation Feedback Procurement Comment As a staff team we have many ideas on how to sustain homecare procurement ensuring quality services that are value for money. These range from good relationship/partnership working with providers, homecare monitoring visits for all who receive a service that ensures the service is a high standard, person-centered and outcome focused, this additionally highlights any efficiencies that can be made in a timely manner and prevents dependency on a service that may not be required, supporting providers with recruitment, managing mobile teams to ensure best value. It is my view the business of homecare should sit with the homecare team, the team should decide durations of visits alongside providers rather than this being decided as part of the assessment process. Assessments require to take a more holistic approach of the individual and family, in many cases the assessment has focused solely on a request for homecare services. Noted, as this comment relates to the ongoing homecare review I have shared it with the Head of Adult Care who is leading on this. Really? Noted. The Council should make more use of formally constituted community groups by delegating responsibility to them. Eg keeping signage clean could go to Trusts, some ground maintenance to community forests etc Noted. Yes Noted. Sustainable procurement would be to repair and clean pedestrian walk ways, thus encouraging the public to visit the businesses of the town. There is a general malaise about the town of Rothesay, where does this come from, Argyll and Bute Council, in my opinion. Noted. Comments shared with our amenity services team manager. Don't put all your eggs in one basket. Noted. Environmental considerations Noted. The Strategy has been revised and updated to take into account comments on sustainability. New buildings must not be given planning permission unless they have solar panels on the roof. Noted and passed to our planning team. No idea: I lost the will to respond before I got to the end. Noted. Page 279
Page 280
Page 26 of 45 Back to Contents Stakeholder Consultation Report 7. Are there any additional priorities we should include in relation to Sustainable Procurement? /contd Consultation Feedback Procurement Comment No Noted Consideration of best value beyond just pricing e.g. energy efficiency A/B rated appliances to help meet A&B climate smarter targets (twice recently we have ordered fridges via the PECOS team that have arrived and been energy rating E or F) Noted. The Strategy has been updated to take into account sustainability comments. Your comments have been shared with PECOS and transactional purchasing team to ensure they continue to offer service teams a variety of options to enable the service to choose what is more acceptable to them. £17.45m were spent with the top supplier "ABC schools Ltd" (page 40). Noticeably by a huge difference with the rest of suppliers. In page 39, Education accounts only for £1.33m of total £181.47m. I would welcome a break down of expenditure with top 5 major contractors (are they locally based? Purposes of this expenditure, etc). ABC Schools are our facilities management service provider who are responsible for our PPP (Public Private Partnership) school contracts, therefore, their spend sits under construction and not education as they are not delivering an education service but maintaining the school facilities. Rewrite the document to be about 3/4 pages long. Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Making better use of the talent within the Procurement team to think differently about how we engage with Community Wealth Building opportunities. In what ways- could they manage Council resources and ensure that everyone thinks and acts as the owners of those resources, and thereby reducing wasteful spend. Noted. PCCMT are implementing their contract management framework across council services to ensure all service staff are trained in managing contracts to ensure best value is being achieved. Working with suppliers to ensure that local companies (especially SMEs) are able to handle the often high level of paperwork etc for bidding processes. Ensuring companies are well prepared BEFORE a suitable bid (often with short time horizons) is published is vital. Noted. PCCMT support our local suppliers, please see link for useful information available to them - Selling to the Council | Argyll and Bute Council - to assist them in bidding for our contracts, In addition, we publish our contract plan on an annual basis to enable them to see what we are looking to spend in the upcoming 2 years. No Noted. No Noted. N/A Noted. Page 280
Page 281
Page 27 of 45 Back to Contents Stakeholder Consultation Report 7. Are there any additional priorities we should include in relation to Sustainable Procurement? /contd Consultation Feedback Procurement Comment Vehicle share cut out a big hybrid vehicle each Noted. As above Noted. Discuss from Israel Noted. Ethical processes Noted. no Noted. Page 281
Page 282
Page 28 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment I've produced a document here https://argyllbutegovuk- my.sharepoint.com/:w:/g/personal/will_currie_argyll-bute_gov_uk/EU8bk4FXT_ZLjhLzIbgGy0oB- hhiO8KQDeja9EsEOCqSBw?e=bW7iff Comments and suggestions are noted. A meeting was arranged with consultee and agreed various changes to the strategy and action plan. See Item 3.4 on Page 3 of the main report which details the changes made. Sorry I found it hugely confusing...a melange of Aims, Objectives, Outcomes, strategy that was pretty indigestible. Lost its way after Section 3 and I lost the will to live in Section 5. Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. More work requires to be done with reablement and TEC and this should be considered before requests are made for long term homecare packages. Hospitals are not the best place for assessments to take place and often it is found a service user is over assessed and discharge may be delayed whilst awaiting a large package of care that may not be required. More in reach is required. More training is required throughout the HSCP with regards to the use of TEC and for TEC to be a consideration of all assessments to ensure independence is promoted where applicable. SDS options require to be part of every assessment and clear information provided to ensure choice is given. Responder services are receiving high call outs for support not considered a P1/2, unclear if Hanover are contacting key holders or going straight to responder teams to attend, better messaging is required with regards to responder service as again dependencies appear to be being created. Noted. This comment will be shared with our head of adult care who is the lead for this service. Ludicrous, especially when ABC are in an emergency situation. Noted. As above. Make use of local resources, delegate more of the minor but costly council tasks Noted. I suppose this is the sort of woke document that the council is obliged to produce these days. What a waste of time and money. Noted. No Noted. Make it clear from the outset what exactly this is about other than a lot of lofty ideals, with examples of how these ideals would be applied in real situations. Otherwise it is totally meaningless! Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Simplify it for the general public. Gobbledegook otherwise. Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Page 282
Page 283
Page 29 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment Organise a general public meeting that is very well advertised and allow the residents of this town to have a fair and frank debate about the steady decline of a beautiful resort on the firth of Clyde. Noted. Care need to taken to check each low level kpi supports in the detailed plans link to the main KPIs for the strategy. Noted. KPIs are monitored on a monthly basis and progress reported to senior management. I think it would be useful to have target dates in the action plan rather than everything being “ongoing”. Also it would be useful to put the key performance indicators in context by showing current levels of performance in that table as a comparison to proposed indicators. The targets for awarding contracts to local businesses could be more ambitious especially as the strategy sets out plans to encourage SMEs to tender. Noted. Performance is reported in our Procurement Report which is published annually. Section 7.1 provides Procurement’s performance during 2023/24. Not everyone agrees with the climate science. Council’s and members of the public are bullied into accepting higher taxes and policies they don’t agree with Noted. You have presented a 55 page document for public consultation. This document lays out the rules governing all planned future public expenditure for A&B Council. I would like to ask the originators of this consultation document how they decided that a policy document of 55 pages, on a subject of this importance, only needs a consultation exercise covering two 'format' questions and three additional questions. I understand that the scope of this consultation exercise is limited to the 'key priorities' of this first draft of the procurement policy document, however, the full first draft of the document has been presented for review and if the scope of this review is to be limited to the 'key priorities' then only these key priorities should be presented at this stage, with a possible further review of the complete document to follow. It is not acceptable to present a full document of this size for public consultation where the consultation is limited to a specific section of that document, this is misleading to the readers. This consultation activity, as it stands, is not fit for purpose and will not provide effective public input to the proposed Sustainable Procurement Strategy for A&B Council. The actual scope of the consultation activity is not made clear to the target audience and is clouded by the presentation of 55 pages of documentation which are largely not connected to the specific 'key priorities' included within the document. I would appreciate feedback on my comments. Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. Page 283
Page 284
Page 30 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment The limits above which tendering is required seem both (1) high and (2) arbitrary. The limits should be set after assessing frequency distributions of historic contract costs. There might, for example, be obvious modes and intermodal lows, the latter schooling the setting of tendering limits. Noted. The limits are detailed in our council’s contract standing orders and are regularly reviewed to ensure they are appropriate for our council's needs. Unlike the SNP keep all records be open and honest, admit any mistakes (people will understand and forgive). Improve management inspection and control of your own work force. All things considered (funding inflation) I think your doing reasonable well. Noted. Make sure that there are lots of different ways to encourage local/community suppliers and widen value for money/financial criteria so that the “value” part is fully recognised and not just subservient to the lowest price. Noted. Its rubbish. It simply fails to deal with whats needed most. The entire strategy should be scrapped and given a radical rethink. Noted. The draft plan reads like a hybrid between management-speak and wishful-thinking, all stretched to 55 pages. Noted. In the future PCCMT will provide a summary sheet of the key points of the Strategy for the public to review. No Noted. We are all for providing work locally so anything that can help keep work local is a must. Noted. Again in page 39, more information regarding the breakdown of expenditure by sector of top 3 (Social Care & Services, Construction and FM), plus information for the £5.2m "Other goods and services*" tab. Noted. Please refer to Section 6 for more detail of the various categories. Pure self indulgent waste of money. The irony is killing me. Noted. Our Vision of the strategy could be strengthened by having less focus on thinking internally and more focus on what we will achieve for our communities in Argyll and Bute. Utilising our public spend to add value to growth of green economy and wellbeing of our citizens. Noted. More total nonsense from A&B - a Administration continually whining about lack of funding but wasting taxpayer money on this immature, naive, asinine nonsense. Noted. Page 284
Page 285
Page 31 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment Ensuring a wider VfM / Impact Assessment / Social Rate of Return is carried out on the Strategy itself in addition to the more simple 4Es type VfM for a contract and its delivery. Without that you won't know if you are meeting your priorities. Noted. An Impact Assessment is carried out as part of this process. This is a very comprehensive and clearly set out document. There is nothing within it that I disagree with. I particularly like references to using local suppliers/contractors whereever possible. Thank you for the opportunity to read it. Noted. No Noted. The strategy makes reference on pages 4-5 to the (2013-2023) Outcome Improvement Plan and its six priorities. That plan has been superseded by the 2024-2034 Outcomes Improvement Plan (linked to on page 45) which has the three priorities of Transport Infrastructure, Housing and Community Wellbeing. Noted. Link now updated on Page 4-5 to detail the 2024-2034 Outcomes Improvement Plan. We would like to see consideration given to the use of community benefits clauses to promote modern apprenticeship opportunities for residents of Argyll. Noted. These are used where appropriate, for example, if a contract is only for 3-12 months an apprenticeship would not be appropriate and another community benefit requirement would be asked for. However, if the contract was for 3-5 years then we would expect a suitable commitment from our contractor to provide community benefits in accordance with the contract terms. 5.2.3 Empowering local suppliers, supporting community wealth building and local economic growth. CC colleagues asked for the importance of the above to be emphasised in our reponse and to highlight the fact that island based contractors often do not have the resources to work through the procurement process so simplification of this process is important. Noted. Simplification of procurement processes is a part of our support to local businesses, we provide guidance and evidence on our webpage. In addition, we are members of the Supplier Development Programme which enables all our local suppliers to join free of charge to get free advice, support and assistance in all aspects of tendering for council contracts. They provide monthly events, which we publish on our website – here. Do not invest in Israel Noted. Page 285
Page 286
Page 32 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment We welcome the draft strategy's inclusion of a holistic approach to the priority of 'empowering local suppliers, supporting community wealth building and local economic growth'. This is a wide and ambitious priority, especially when compared with some of the other stated key priorities such as 'procurement being a strategic partner for all our council services'. However we are not clear that the current model of delivering community benefits will bring the 'optimisation' of community benefits under section 5.4.3 of the action plan. We are not clear how the strategy will deliver on the aim in s5.2.3 of 'ensuring community benefits are realised'. The current model of the non-evaluated CBCs 'wishlist' scheme requires communities to be proactive rather than suppliers. There is no measurement of wishes delivered against requests made or contract requirements/expectations. Meanwhile the focus of the evaluated CBCs scheme scoring matrix is on employment and training with limited scoring potential for 'community enhancement'. We do not think communities would generally expect 'community benefit' to mainly cover employment and training. To fully optimise community benefits requires fairness in the delivery of community benefits across Argyll and Bute - we are not clear whether suppliers are required to support communities in the geographical area in which they are working. We suggest the use of the language community 'wish-lists' should be changed to language more appropriate to the importance of this priority - if suppliers are required to deliver community benefit under the terms of their contract this is an entitlement for communities and should be seen as such and not simply that suppliers are granting them a 'wish'. The non-evaluated CBCs 'wishlist' promotes small-scale benefits and we would like to see more transparent and accountable mechanism for more ambitious community benefits to be realised. We are disappointed that there is no target for increasing the delivery of community benefits in the draft strategy. (completed by Helensburgh Community Hub on behalf of the Community Wealth Building subgroup of H&L Community Planning Group) Noted. The council has different methods of delivering community benefits, which are detailed in the attached Community Benefit Guidance documents SGN2 (Appendix 3) and SGN3 (Appendix 4). We are in the process of reviewing these guidance documents, including the Community Benefits points matrix and menu, and these should be ready for circulation by the middle of next year. The Community Benefits delivered by our suppliers are reported in our Annual Procurement Report. We encourage suppliers to support communities in the geographical area they’re working in by sharing the wishlist with them, which allows them to understand what the local communities would like and decide if they can support any of the ‘nearby’ requests. As part of our contract management activities, we monitor and record the delivery of Community Benefits throughout the contract duration, where many of our contracts include a Community Benefit KPI (Key Performance Indicator) that the supplier is expected to achieve, and we report the outcomes on a quarterly basis, which is uploaded to our Community Benefits webpage. We believe that naming the list of community requests a ‘wishlist’ to be appropriate, as we also share this list with suppliers who are not obliged to deliver a Community Benefit, as well as those who are required to in their contract. We consider use of the word ‘wish’ to demonstrate that we are sympathetic to the surrounding difficulties suppliers face with rising prices of goods and materials in our current economic climate and that we’re therefore extremely grateful when a supplier can manage to ‘give’ something to the community free of charge. Page 286
Page 287
Page 33 of 45 Back to Contents Stakeholder Consultation Report 8. Are there any other comments you would like to make about the draft Sustainable Procurement Strategy 2025/2028? Consultation Feedback Procurement Comment no Noted. A very interesting document which clearly a lot of time has been taken over, to ensure that Procurement exercises work for all the good of Argyll and Bute. Noted. We are encouraged by the council’s draft Sustainable Procurement Strategy and its alignment with the Good Food Nation agenda, supporting local food procurement and reducing the environmental impact of food. As a new Sustainable Food Partnership for Argyll and Bute, we see positive opportunities to enhance resilience and community through this strategy. Following a productive meeting with stakeholders (listed below), we all agreed on the importance of collaboration in this space. We aim to position ourselves as one of the key delivery partner for the Good Food Nation Act and believe our early involvement with this strategy could maximize impact and build lasting partnerships. Although we are operating only as a Steering Group at the moment, we felt it was important to put our group forward as having a vested interest in the future of food procurement in Argyll and Bute. Brenna Anderson - ABCAN Officer Angela Anderson - Time for Change Argyll and Bute Lindsey Young - ABCAN Officer Becky Hothersall - The Poverty Alliance Hannah Clinch - Dunoon Community Development Trust Noted. You will never attract people to the area while there is a chronic shortage of social housing. There are hundreds of unfilled job vacancies in Oban and zero unemployment. The jobs cannot be filled due to far too many holiday flats. The only solution is for Argyll & Bute Council to requision holiday apartments and to rent them to local people who want to work in Oban but cannot get any rented social accomodation. Noted. Your comments having been shared with our Housing colleagues. Page 287
Page 288
Page 34 of 45 Back to Contents Stakeholder Consultation Report Appendix 3 SUPPLEMENTARY GUIDANCE NOTE 2: Sustainable Procurement & Types of Community Benefits 1. Sustainable Procurement 1.1. The Public Reform (Scotland) Act 2014 introduces the Sustainable Procurement Duty which applies to all regulated procurements. Public Bodies are now required to consider before they carry out a regulated procurement (commencing on or after 1st June 2016) how they can conduct the procurement and act with a view to securing improvements in a way which will secure improvements to the social, economic and environmental wellbeing of the Authority’s area. 1.2. Public Bodies are required to consider before they carry out a regulated procurement how they can conduct the procurement in a way which will facilitate the involvement of SMEs, third sector bodies and supported businesses and promotes innovation. 1.3. As a matter of good practice sustainability needs to be built into the earliest stages of the Journey, when requirements are being identified and specified. 1.4. We can contribute towards improving the social wellbeing element of our Sustainable Procurement Duty under section 9 of the Procurement Reform (Scotland) Act 2014 (“the Act”) by adopting policies to promote fair work practices in relevant public contracts. Consideration must be given prior to undertaking a procurement exercise (at Commodity Sourcing Strategy stage) whether it is relevant and proportionate to include a question on fair work practices which would be evaluated along with other relevant criteria of a bidder’s approach to fair work practices. 1.5. A long-term view to the requirement should be taken, for example you should consider: • Flexibility for future purchases • Maintenance • Spares • Training now and in the future • Licensing • Upgrades • Take-back at disposal stage 1.6. You should use the Government Buying Standards best practice specifications where appropriate. 1.7. Please refer to the Argyll and Bute Council Sustainable Procurement Policy for further information. Page 288
Page 289
Page 35 of 45 Back to Contents Stakeholder Consultation Report 2. Community Benefits 2.1. The ability to incorporate social and environmental considerations which include community benefits in procurements is not new. The key principles remain that: 2.1.1. Social and environmental considerations must relate to the subject matter of the contract; 2.1.2. Their use must adhere to principles of procurement; and 2.1.3. If scoring social and environmental criteria must be capable of objective assessment. 2.2. The following are the main types of Community Benefits which can be obtained through procurement provided they are directly related to the subject matter of the contract and are proportionate: o Targeted recruitment and training e.g. jobs, training, work experience, job shadowing opportunities, apprenticeships for young persons and unemployed individuals o Supported employment for people with disabilities or other disadvantaged groups o Promotion of job opportunities through local agencies o Training for existing workforce o Mentoring – suppliers offering support and guidance to local organisations and individuals o Suppliers using community venues and other community services o Promotion of certain supply chain subcontractors (SMEs, social enterprises, supported businesses, Third Sector Organisations) o The staff of suppliers undertaking volunteering within communities o Community enhancement - resources provided for community facilities (e.g. playgrounds, habitat enhancements, environmental improvements) and initiatives (e.g. energy efficiency) o Outreach and education opportunities within the community to those associated with or impacted by the types of service provided e.g. promoting careers in construction and trades or care and support to local schools o Sponsorship of local organisations o Community consultation, engagement and strengthening community relations o Equal opportunities in terms of the supplier’s staffing and access to services o User involvement from the outset Page 289
Page 290
Page 36 of 45 Back to Contents Stakeholder Consultation Report 2.3. Please refer to Supplementary Guidance Note 3 - Argyll and Bute Council - Community Benefits Clauses in Procurement Guide for further information on the types of Community Benefits Clauses the Council uses, and methods of including them within tenders. Page 290
Page 291
Page 37 of 45 Back to Contents Stakeholder Consultation Report Appendix 4 SUPPLEMENTARY GUIDANCE NOTE 3: ARGYLL AND BUTE COUNCIL Community Benefits Clauses GUIDANCE FOR TENDERERS Page 291
Page 292
Page 38 of 45 Back to Contents Stakeholder Consultation Report 1.0 INTRODUCTION 1.1 Background Sustainable procurement is aimed at securing the maximum economic, social and environmental benefit for residents and businesses within Argyll and Bute from investment in the area. Argyll and Bute Council promotes sustainability within its contracts and seeks to introduce measures to secure opportunities for training and employment, work placements, school curriculum support, community enhancement and small and medium-sized enterprises (SMEs) supply chain development based on the evidence of need in the Argyll and Bute area. Legislation already exists in terms of The Local Government in Scotland Act 2003, and the Procurement Reform (Scotland) Act 2014, which enable public bodies to include Community Benefits in the procurement process, and include a requirement to consider the inclusion of Community Benefits. Community Benefits should improve the economic, social or environmental wellbeing of the area. Argyll and Bute Council recognises the potential of Community Benefits Clauses within procurement processes and what they can achieve in terms of employment and training and business development throughout the full period of the proposed contract and beyond. Argyll and Bute Council is committed to maximise Community Benefits from its procurement activities and, as standard, includes Community Benefits Clauses (CBCs) within contracts with an estimated value of: • Supplies and Services >£100,000 • Works >£2,000,000 The Council uses two different types of Community Benefits Clauses depending on the value and nature of the contract – either a Non-Evaluated CBC which mandates that the successful supplier is required to select a benefit from the Council’s request-list, or an Evaluated CBC which is scored as part of the tender evaluation process, and requires the successful supplier to deliver a range of benefits to achieve a set threshold of points. The Council will take a proactive approach with suppliers to provide early, strong and clear guidelines of social, economic and environmental opportunity expectations. The Sustainability Lead Officer can advise on thresholds and processes undertaken to assess the inclusion of Community Benefits, and monitoring and verification of key performance indicators. Suppliers can receive a wide range of support to facilitate their Community Benefits obligations, including support from the Argyll and Bute Council Employability Team. Page 292
Page 293
Page 39 of 45 Back to Contents Stakeholder Consultation Report 1.2 Expectations Successful suppliers will be expected to embrace Argyll and Bute Council’s requirements for delivering a range of Community Benefits including: • Targeted recruitment and training • Work placements • Curriculum support • Community enhancement • Small and Medium Enterprises and Social Enterprise Organisations’ supplier development Suppliers are encouraged to incorporate potential Community Benefits at all levels. The supplier must be able to demonstrate their intention to integrate trainees and new entrants into the labour market without distinction of sex, marital status, race, ethnic origin or political or religious beliefs. 1.3 Evaluated Community Benefits Clauses Please refer to Sections 2, 3 and 4 to understand the process further. If an Evaluated Community Benefits Clause has been used, the Contract will have been allocated a minimum value of Mandatory Community Benefits Points from the Community Benefits Points Matrix (Section 3) based on the value and timescales within the matrix. It is up to the supplier to decide what Community Benefits they wish to offer from the Community Benefits Points Menu (Section 4) which provides a selection of the types of Community Benefits that the Council would expect this Contract to deliver and allocates Community Benefits Points (CBPs) to each of these. As part of their tender return, suppliers will complete a Breakdown of the Community Benefits Points to be provided; a Community Benefits Method Statement; and a timetable for delivery of the Community Benefits. This will be an evaluated part of the tender submission. There is no limit on the Community Benefits that a supplier may offer as Supplementary Benefits and the total CBPs offered may exceed the Council’s stated expectation. 1.4 Non-Evaluated Contracts For non-evaluated contracts (those of a value lower than £100,000) there is a new scheme in place to supplement the points matrix system noted in sections 3 and 4 of this guidance. Community groups will apply through a dedicated online application process on the Council’s website for requests of support from contractors. Contractors who are bidding for contracts of a value below £100,000 should visit the website, Community Benefits | Argyll and Bute Council and select a benefit from the “request list” which should be treated and completed in the same way as Evaluated Contracts as detailed within this document. It should be noted that the “request list” is also available to Evaluated Contracts to select an option as part of the “Community Enhancement” section of the Community Benefits Points Menu listed in Section 4. Page 293
Page 294
Page 40 of 45 Back to Contents Stakeholder Consultation Report 1.5 Compliance and Sanctions for Non Compliance For both evaluated and non-evaluated benefits – the offer and any relevant methodology for delivery will be included in the final contract between the Council and Supplier. The Council will proactively contract manage Community Benefits as outlined at para 2.2 below to ensure compliance. In the event of the supplier being unable to deliver the Community Benefit offered, the parties will work together in the spirit of cooperation and partnership to identify alternative equivalent benefits. In the event of non-compliance, the Council may seek to recover the cost equivalent to the value of the Community Benefits that should have been delivered. This shall be invoiced to the successful supplier quarterly from the date of commencement and then every quarter until the end of the contract duration. 1.6 Remuneration Trainees and recruits must, as a minimum, be paid in accordance with National Minimum Wage rates and industry norms and must have terms and conditions of employment that are at least equivalent to those provided to workers that have equivalent skills and experience. Employers are encouraged to increase the remuneration of trainees in line with their experience and productivity. 1.7 Supplier and Sub-contractor Compliance It is the supplier’s responsibility to develop a working method that will deliver the targeted recruitment and training requirements and related monitoring and verification data, and obtain the full co-operation of suppliers and sub-contractors in delivering these requirements for the full duration of the contract. 1.8 Equal Opportunities The successful supplier will be required to ensure that it complies with equal opportunities and non-discrimination legislation in relation both to the delivery of the service and to employment and demonstrate the policies and practices which it will put in place to achieve this. 1.9 Insurances The successful supplier must ensure that relevant indemnities are in place and insurance cover includes people aged 16 and over and staff from employment and training organisations when on site. 1.10 Frameworks with Evaluated Community Benefits Clause Spend with framework supplier(s) will be established by the Procurement Officer on a quarterly basis. Once trigger levels of spend are achieved as per the Community Benefits Points Matrix in Section 3, the supplier will be advised that a Community Benefits requirement has been activated. This will be done via quarterly contract management meetings or via email as appropriate. Page 294
Page 295
Page 41 of 45 Back to Contents Stakeholder Consultation Report The Community Benefits requirement is to be actioned during the following quarter, in line with the supplier’s Community Benefits response within their tender submission for the framework. Please note that no timetable for delivery is to be submitted for frameworks, as delivery will be dependent on spend on the framework. 1.11 Definitions A New Entrant is defined as a person who is employed to do a specific job and is leaving an educational establishment or a training provider, or a person that has been non- employed who has been unemployed and/or is registered with worker or job Centre Plus and is seeking employment. An Apprentice is a person defined as a New Entrant to the industry who is undertaking a recognised skill qualification or an equivalent apprenticeship scheme for construction or non-construction apprenticeships. Work Placement is defined as a person undertaking a short term overview of the industry and/or a related training programme with on-site instruction and supervision provided. Direct indicates that the New Entrant will be employed or trained by the main contractor Indirect indicates that the New Entrant will be employed or trained through a specialist contractor or subcontractor as a result of work procured through the main contractor Priority Group is defined as unemployed people or young people not in employment, education or training; for the purposes of delivering Community Benefits within Argyll and Bute Council contracts 1.12 Disclaimer The inclusion of targeted recruitment and training requirements does not comprise or imply any promise on the part of Argyll and Bute Council or their partners or agents to provide suitable trainees or labour. All recruitment, supervision and discipline responsibilities rest with the supplier and sub-contractors. Within this context Argyll and Bute Council will work with local agencies to help facilitate the achievement of the recruitment and training requirements. Any action taken by Argyll and Bute Council to facilitate relationships between the successful supplier and individuals/ firms/ agencies does not imply and should not be deemed to imply that they or its agents consider the individual/ firm/ agency as suitable for engagement by the successful supplier. Within this context, Argyll and Bute Council will work with local employability partners to help facilitate the achievement of the employment and training requirements. Page 295
Page 296
Page 42 of 45 Back to Contents Stakeholder Consultation Report 1.13 Questions or Concerns During the tender process if the supplier has any concerns regarding the type of Community Benefit being requested and/ or the proportionality and fairness of the level of Community Benefit being requested they should contact the Sustainability Lead Officer. 2.0 PROCESS FOR SUPPLIERS 2.1 Tender Stage: • Procurement Officer will use the Community Benefits Points Matrix (Section 3) to outline the minimum Community Benefits Points required in the contract; • Tenderers will receive this Community Benefits: Guidance for Tenderers Document containing Sections 1-4 with the Invitation to Tender documents, they are expected to read and understand what Community Benefits would be expected should their tender be successful; • Tenderers are required to answer the Community Benefits question within the Invitation to Tender document, providing a breakdown of the Community Benefits Points, a Community Benefits Method Statement and a delivery timetable*. * Delivery timetable N/A for frameworks. 2.2 Contract Management: • The Procurement Officer and Contract Administrator will make arrangements with the supplier to monitor Community Benefits delivery (a penalty may be set for non- compliance that is equivalent to the value of the Community Benefits that should have been delivered). • Monitoring: o Responses to the Community Benefits question within Invitations to Tender will become part of the contract’s Key Performance Indicators (KPIs). o KPIs will be monitored as part of the ongoing contract management process for the contract, and progress will be reported back to the Sustainability Lead Officer on a regular basis. o Evidence of Community Benefits achievements will be required from suppliers – i.e. apprenticeship/qualification certificates, photographs of community engagement activities/school visits, names and job titles for employment. This information should be provided with the regular updates on progress. o Information on outcomes of Community Benefits Clauses in Argyll and Bute Council contracts are widely reported both within the Council and externally. Page 296
Page 297
Page 43 of 45 Back to Contents Stakeholder Consultation Report 3.0 COMMUNITY BENEFITS POINTS MATRIX Estimated Contract Duration Estimated Contract Value 0-6 months 6-12 months 12-24 months 24-36 months £1 - £99,000 Non-Evaluated CBC - Supplier selection from the “Request list” updated on the Council’s website Non-Evaluated CBC - Supplier selection from the “Request list” updated on the Council’s website Non-Evaluated CBC - Supplier selection from the “Request list” updated on the Council’s website Non-Evaluated CBC - Supplier selection from the “Request list” updated on the Council’s website £100,000- £500,000* 5 10 20 40 £500,000- £1,000,000* 10 20 30 50 £1,000,000- £3,000,000 20 30 40 60 £3,000,000- £5,000,000* 30 40 50 70 £5,000,000- £10,000,000 40 50 60 80 £10,000,000- £20,000,000 50 60 70 90 £20,000,000- £30,000,000 60 70 80 100 * Services and Supply contracts only. The minimum contract value for works contracts which require inclusion of a Community Benefits Clause is £2,000,000. 4.0 COMMUNITY BENEFITS POINTS MENU Community Benefit Outcomes Description Community Benefits Points Modern Apprenticeships Create a new Apprenticeship Position registered with sector skills body 20 Graduate Internship New graduate intern position created for university graduate 20 Job (Unemployed) Offer employment to a new entrant who is seeking employment (employment offered for a minimum of 6 months) 20 [Points awarded in proportion to the number of hours worked – FTE = 20 CBPs; part-time roles = variable CBPs] Trainee Position Offer structured training places to new entrant leading to industry recognised qualifications. 10 Page 297
Page 298
Page 44 of 45 Back to Contents Stakeholder Consultation Report Community Benefit Outcomes Description Community Benefits Points Community Enhancement (maximum of 15 points available for this section*) • Physical/environmental project • Organisation business development • Sponsorship A list of Community Groups and Projects requiring support has been added to the Council’s website at https://www.argyll- bute.gov.uk/community-benefits-list 5 Work Experience Placement (maximum of 10 points available for this section*) Provide a structured period of work experience for a pupil, student or trainee (a minimum of 4 weeks is required to achieve 5 points i.e. (1 x student for 4 weeks or 4 x students for 1 week) 5 Education Support Initiative (maximum of 10 points available for this section*) • Industry awareness days or workshops for school pupils or college students. • Structured career events for school pupils or college students. • Workplace visits for school pupils or college students (min 10 students to qualify) • School mentoring or enterprise/vocational programme 5 S/NVQ Training (maximum of 10 points available for this section*) • S/NVQ’s or equivalent for Existing Employees • S/NVQ’s or equivalent for New Entrants • S/NVQ’s or equivalent for Subcontract staff 5 Supply Chain Development Activity (maximum of 10 points available for this section*) • Supply Chain Briefings with SME’s • Business Mentoring with SME’s • Business Support for Social Enterprises, Supported Businesses, Third Sector Organisations • Mentoring Third Sector Organisations 5 * Aside from exceptional circumstances, i.e. where a tenderer can justify why they are unable to offer new positions within their organisation as a result of being awarded the contract. In these circumstances, tenderers can offer to provide community benefits outcomes which exceed the maximum number of points stated above. Tenderers should still meet the minimum number of Community Points required for the tender, as identified in Section 3 above. Page 298
Page 299
Page 45 of 45 Back to Contents Stakeholder Consultation Report 5.0 CONTACTS Contact Service/ Organisation Community Benefit Remit Email Contact No. Elaine Appleby Procurement, Commercial and Contract Management Team, Argyll and Bute Council Sustainability Lead Officer Elaine.appleby@argyll-bute.gov.uk 01369 708594 Sharon Renton Development and Infrastructure Services – Economic Development, Argyll and Bute Council Targeted Recruitment and Training Sharon.renton@argyll-bute.gov.uk Sharon: 01586 559018 Office: 01586 555990 David Rennie, Social Enterprise Officer Communities and Partnership Team, Argyll and Bute Council Community Benefits – Supply Chain Initiatives (Third Sector) david.rennie@argyll-bute.gov.uk 01700 501371 Kate Fraser Business Gateway Community Benefits – Supply Chain Initiatives (SMEs) Kate.fraser@argyll-bute.gov.uk 01546 60 4550 Roddy Stewart Ready For Business Public Sector Support for Community Benefits roddy.stewart@ceis.org.uk 0141 425 2914 Third Sector Team Argyll and Bute Third Sector Interface Support to third sector organisations info@argylltsi.org.uk 01369 700 100 If you would like further information on this document please contact Elaine Appleby, Sustainability Lead Officer, contact details above. Page 299
Page 300
This page is intentionally left blank
Page 301
Argyll and Bute Council: Equality and Socio-Economic Impact Assessment Section 1: About the proposal Title of Proposal Sustainable Procurement Strategy 2025/2028 Intended outcome of proposal The Council has a statutory requirement to update and publish its Sustainable Procurement Strategy on an annual basis following the key changes introduced by the Procurement Reform (Scotland) Art 2014 and the Procurement (Scotland) Regulations 2016. The Council also has a requirement to consult with key stakeholder groups for this document. This gives the Council the opportunity to raise awareness, attain buy-in, inform the contents of the document and further develop engagement with key stakeholder groups. Description of proposal The Argyll and Bute Council Sustainable Procurement Strategy 2025/28 sets out a framework which is designed to enable the Council to continue on its journey of change and innovation through: o To ensure all procurement staff and council officers involved in the procurement process are fully aware of all aspects and impacts of the procurement rules and any other relevant regulations. o Increase opportunities for commercial savings. o Reduce the value of non-contract spend. o To secure wider social, economic and environmental benefits for the local area and ensure those benefits are realised. o Increased opportunities for local suppliers to help grow the local economy. o Increased engagement and collaboration with suppliers and SDP. o To develop resilient local supply chains, providing clear advice and consistent approaches to procurement and community benefits, ensuring businesses are aware of, and are able to take advantage of, procurement opportunities supported by a programme of active and innovative supplier engagement and development support. o To increase the knowledge and understanding of the benefits of sustainable procurement of all council staff who participate in the procurement process and make better use of the expertise within the council to ensure wider sustainable outcomes are achieved. o Continue to deliver best value contracts. o More streamlined and leaner processes. o Procurement continues to be a key strand in the delivery of council strategies and policies. o Build capacity and skills within the council to improve procurement, commissioning and contract management activity and support procurement people of tomorrow. o Cross-service collaboration. Business Outcome(s) / Corporate Outcome(s) to which the proposal contributes BO110 We support businesses, employment and development opportunities Page 301
Page 302
Lead officer details: Name of lead officer Anne MacColl-Smith Job title Procurement and Contract Management Manager Department Legal & Regulatory Support Appropriate officer details: Name of appropriate officer David Logan Job title Head of Legal & Regulatory Support Department Legal & Regulatory Support Sign off of EqSEIA Date of sign off 31/10/2024 Who will deliver the proposal? Anne MacColl-Smith Section 2: Evidence used in the course of carrying out EqSEIA Consultation / engagement To date public consultation has taken place, the strategy and consultation questions were placed on the Council’s website and social media pages. The results of the consultation are contained in the Stakeholder Consultation Report 2024 - see Appendix A. Data N/A Other information N/A Gaps in evidence N/A Page 302
Page 303
Classification: OFFICIAL Section 3: Impact of proposal Impact on service users: Negative No impact Positive Don’t know Protected characteristics: Age * Disability * Ethnicity * Gender * Gender reassignment * Marriage and Civil Partnership * Pregnancy and Maternity * Religion * Sexual Orientation * Fairer Scotland Duty: Mainland rural population * Island populations * Low income * Low wealth * Material deprivation * Area deprivation * Socio-economic background * Communities of place? * Communities of interest? * Impact on service deliverers (including employees, volunteers etc): Negative No impact Positive Don’t know Protected characteristics: Age * Disability * Ethnicity * Gender * Gender reassignment * Marriage and Civil Partnership * Pregnancy and Maternity * Religion * Sexual Orientation * Fairer Scotland Duty: Mainland rural population * Island populations * Low income * Low wealth * Material deprivation * Area deprivation * Socio-economic background * Communities of place? * Communities of interest? * Page 303
Page 304
Classification: OFFICIAL If any ‘don’t know’s have been identified, at what point will impacts on these groups become identifiable? N/A How has ‘due regard’ been given to any negative impacts that have been identified? N/A Section 4: Interdependencies Is this proposal likely to have any knock-on effects for any other activities carried out by or on behalf of the Council? No Details of knock-on effects identified N/A Section 5: Monitoring and review How will you monitor and evaluate the equality impacts of your proposal? By continuous performance monitoring thus ensuring best value and practice is maintained via our Annual Procurement Report that is published on our Council website. Page 304
Page 305
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 20 FEBRUARY 2025 EQUALITY OUTCOMES 2025-2029 1.0 EXECUTIVE SUMMARY 1.1 This report describes work which has been undertaken to develop a new set of Equality Outcomes which will cover the period May 2025 to April 2029 as required to comply with the Public Sector Equality Duty. 1.2 We recommend that the Policy and Resources Committee approve the following outcomes. 1. We make access to information and services easier for people with protected characteristics. 2. Our communities are safe for, and welcoming to, people with protected characteristics. 3. We raise awareness of issues and challenges faced by people with protected characteristics along with ways to accommodate and support them. 4. Argyll and Bute welcomes New Scots and supports them. 5. We ensure people with protected characteristics are enabled to progress. 6. Our work relating to equalities and people with protected characteristics is coordinated across the organisation and its partners and is strategically aligned. 1.3 There are no financial implications arising directly from this report. Page 305 Agenda Item 11
Page 306
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 20 FEBRUARY 2025 EQUALITY OUTCOMES 2025-2029 2.0 INTRODUCTION 2.1 This report describes work carried out to develop a new set of Equality Outcomes. These will ensure we meet our obligations under the Public Sector Equality Duty. 2.2 Work carried out has included internal and external consultation and engagement activity. The report outlines the preparatory work carried out to draft the outcomes and discusses the findings of the public consultation which followed, along with changes made in light of the consultation results. 3.0 RECOMMENDATIONS 3.1 It is recommended that Policy and Resources Committee agree the following set of Equality Outcomes for the period 2025-2029:- 1. We make access to information and services easier for people with protected characteristics. 2. Our communities are safe for, and welcoming to, people with protected characteristics. 3. We raise awareness of issues and challenges faced by people with protected characteristics along with ways to accommodate and support them. 4. Argyll and Bute welcomes New Scots and supports them. 5. We ensure people with protected characteristics are enabled to progress. 6. Our work relating to equalities and people with protected characteristics is coordinated across the organisation and its partners and is strategically aligned. Page 306
Page 307
4.0 DETAIL 4.1 The Council, the Education Authority, and the Argyll and Bute Licensing Board, as ‘listed authorities’ identified in the Public Sector Equality Duty (PSED), are required to publish equality outcomes at least every four years. Additionally, progress in achieving the outcomes must be reported in a ‘mainstreaming report’ every two years. 4.2 While the Council, the Education Authority, and the Licensing Board are separate authorities under the Act, it is acceptable to report on progress towards achieving outcomes in a single report. To enable this, we propose a shared set of outcomes. 4.3 The PSED specifically deals with equality as it relates to the nine protected characteristics set out in the Equality Act (2010). This is worth noting as it narrows the focus of what should be included in the equality outcomes and influences how they should be worded, with explicit reference usually being made to protected characteristics. 4.4 The protected characteristics identified in the Equality Act (2010) are: • Race • Disability • Sex • Age • Sexual orientation • Religion and belief • Gender reassignment • Marriage and civil partnership • Pregnancy and maternity. 4.5 Each equality outcome must specify a result which will advance one or more of the needs mentioned in the general equality duty. These are: • the need to eliminate discrimination and other conduct prohibited under that Act • the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not, and • the need to foster good relations between persons who share a relevant protected characteristic and persons who do not. 4.6 We are expected to monitor and evidence progress towards achieving outcomes. To this end, after the equality outcomes are approved, we will develop an action plan to support their delivery. 4.7 While individual outcomes need not relate to every protected characteristic, where they do not, we are required to publish reasons explaining why not. 4.8 In preparing equality outcomes, we are required to take reasonable steps to involve people who share relevant protected characteristics and people who Page 307
Page 308
represent the interests of people with protected characteristics, and to consider relevant evidence. The implication is that we must carry out consultation/engagement work as we develop the outcomes. 4.9 Equality outcomes must be published in our Equality Mainstreaming Report, which we produce every two years. 4.10 Although our equality outcomes were reviewed in 2023, we did not make changes to them at that time because: • the current ones were still seen as being fit for purpose; • Scottish Government was undertaking a review of the Public Sector Equality Duty and was considering the introduction of national outcomes in 2025 which would have given any new outcomes formulated at that stage only two years of life, and; • extending our outcomes by a further two years gave us the opportunity to realign our outcome setting timetable to other listed authorities. (We were out of sync with other local authorities following a review of outcomes a number of years ago.) 4.11 In drafting proposed outcomes prior to public consultation, we: • Looked at the council’s priorities. • Considered existing areas of activity with which links can be made. • Horizon scanned changes happening outwith the organisation. • Consulted internally with officers in relation to Education, Violence Against Women, Refugees, and workforce-related activities. We have also presented papers with the proposed outcomes to the council’s Departmental Management Teams. • Discussed the development of equality outcomes at the UNCRC Incorporation Working Group and the Equality Forum. • Made a presentation to the CPP Management Committee about our proposed equality outcomes. 4.12 The public consultation was published on the council’s website and publicised through the council’s weekly ‘Argyll and Bute News Round Up’ email. In addition, organisations known to the Community Development team were emailed to promote the consultation with the intent to reach community groups working with individuals who have one or more of the nine protected characteristics. 4.13 We proposed outcomes focus on the following themes: • Accessibility • Safer Communities Page 308
Page 309
• Awareness raising • Strengthening strategic links • Refugees • Equality of opportunity. The rationale behind each of these, and the draft wording for each outcome is explained in more detail below. 4.14 The public consultation ran from 23 November 2024 to 10 January 2025. In total, 24 responses were received in response to the public consultation, twenty from individuals and four from organisations. Broadly speaking, responses were supportive of the proposed outcomes. See table 1. Table 1: Numbers of respondents agreeing or disagreeing to proposed equality outcomes Proposed outcome Agree Disagree No response 1. We make access to information and services for people with protected characteristics 21 3 0 2. Our communities are safe for, and welcoming to, people with protected characteristics 22 2 0 3. We raise awareness of issues and challenges faced with people with protected characteristics along with ways to overcome them. 20 3 1 4. Argyll and Bute is a welcoming place for New Scots to come and settle in. 19 3 2 5. We ensure people with protected characteristics are enabled to progress. 22 2 0 6. Our work relating to equalities and people with protected characteristics is coordinated across the organisation and strategically aligned. 22 2 0 4.15 We received some suggestions for wording of the outcomes. These are discussed in more detail below and some limited changes to wording have been made as a result. 4.16 Several responses to the public consultation raised concerns that reference to protected characteristics in the outcomes was too limiting and that actions should extend to groups who experience serious deprivation and poverty. However, the wording of the equality outcomes, and specific reference to Page 309
Page 310
protected characteristics has been retained because this reflects the requirements of the PSED. Equality outcomes are not delivered as an alternative to work the council already does to address issues relating to deprivation and poverty. 4.17 Responses reflecting both sides of the trans debate were received in the course of this consultation. 4.18 Two responses disagreed with all the equality outcomes. One of these was on the basis that making things ‘easier’ for people with protected characteristics will build resentment between them and other groups because this was not seen as equality. The other was on the basis that the outcomes rely too heavily on third sector organisations for their delivery and these are not council led. We disagree on both counts. 4.19 Each of the proposed equality outcomes is considered in more detail below. 4.20 Accessibility. Proposed outcome: We make access to information and services easier for people with protected characteristics. Rationale: • Scottish Government has talked for several years about wanting to introduce a Duty of Inclusive Communications. Although it appears Scottish Government has now dropped this as a proposed Duty, this is a theme Scottish Government will continue to promote, as indicated in its current consultation regarding its Equality and Human Rights Mainstreaming Strategy. • UNCRC incorporation includes a requirement to produce child-friendly documents. Work around the UNCRC is referenced in the council’s priorities. • Accessibility links with other activities including the Council’s BSL plan and website accessibility. • Accessibility links with wider good practice (including the production of easy read documents). The majority of consultation responses were in favour of this outcome. Other than the objection to the inclusion of ‘protected characteristics’, as described above, no suggestions were made with regard to its rewording. As a result, we have retained the wording of the outcome as used in the consultation. 4.21 Safer communities. Proposed outcome: Our communities are safe for, and welcoming to, people with protected characteristics. Rationale: Page 310
Page 311
• This outcome can be an umbrella for a range of activities being carried out by the council and the Education authority. • Enables people to have access to safer spaces. • Ties into work being carried out by the Violence Against Women Partnership around Violence Against Women and the Equally Safe Plan. • Ties into work Education does around bullying. The majority of consultation responses were in favour of this outcome. Other than the objection to the inclusion of ‘protected characteristics’, as described above, no suggestions were made with regard to its rewording. As a result, we have retained the wording of the outcome as used in the consultation. Some comments were received in response to the rationale behind the outcome. These related to the need to maintain single sex spaces, domestic violence against men, and types of bullying to be addressed. As these relate to specifics around work being carried out, these responses will be considered in more detail as we develop an action plan to support the delivery of these outcomes. 4.22 Awareness raising. Proposed outcome: We raise awareness of issues and challenges faced by people with protected characteristics along with ways to overcome them. Rationale: • Keeps equalities and issues arising around protected characteristics on people’s radar. • Ties in with ‘fosters good relations’. • Links can be made with the Third Sector. • Reduces organisational risk where equalities-related issues are better understood. The majority of consultation responses were in favour of this outcome. In addition to the objection to the inclusion of ‘protected characteristics’, as described above, suggestions were made around the wording of this outcome. Specifically, the suggestion was made to replace ‘overcome’ with ‘accommodate and support’. In addition, one respondent suggested that the outcome did not go far enough; the outcome should focus on enabling people to advocate for change in situations where issues and challenges exist. While we have not recommended the wording of the outcome itself be changed to reflect this, this can be added to the narrative explaining the rationale for the outcome. Page 311
Page 312
We therefore suggest the wording of this outcome be amended to: We raise awareness of issues and challenges faced by people with protected characteristics along with ways to accommodate and support them. 4.23 Refugees. Proposed outcome: Argyll and Bute is a welcoming place for New Scots to come to and settle in. Rationale: • This has been picked up by the new administration as one of its priorities • Ties in with Scottish Government’s New Scots Refugee Integration Strategy One respondent, while agreeing with the outcome, took issue with its wording, suggesting describing refugees and asylum seekers as ‘New Scots’ fails to reflect the need to balance assimilating into a new country with maintaining the sense of identity and nationality. We recognise the importance of valuing the culture of our settlers, along with the need for them to maintain their sense of identity. We made the choice to use the words ‘New Scots’ because it aligns with the language used by Scottish Government. We do not recommend changing the word of the outcome on these grounds. Another respondent suggested rewording this outcome to: Argyll and Bute welcomes New Scots and will ensure they are supported here. As a compromise, we suggest the wording be amended to: Argyll and Bute welcomes New Scots and supports them. 4.24 Equality of opportunity. Proposed outcome: We ensure people with protected characteristics are enabled to progress. Rationale: • Closing gaps between different groups, for example around educational attainment. • Could create closer links with workforce planning activities. • Increased opportunities to their fulfil potential for those with protected characteristics. The majority of consultation responses were in favour of this outcome. Other than the objection to the inclusion of ‘protected characteristics’, as described above, no suggestions were made with regard to its rewording. Page 312
Page 313
This was an area where the focus on protected characteristics was seen as being too limiting, as other groups, particularly those experiencing deprivation and poverty should also be supported. Again, the reference of people with protected characteristics does not mean other groups are not supported. Indeed, as there is likely to be overlap between some people with protected characteristics and groups experiencing socio-economic need, this simply ensures that people with protected characteristics are considered when taking appropriate actions. A couple of respondents suggested that we need to set out more clearly how this will be enabled in practice. This will be reflected more fully in the action plan which will be developed to underpin the delivery of these outcomes. 4.25 Strengthening strategic links / ‘getting it right’ Proposed outcome: Our work relating to equalities and people with protected characteristics is coordinated across the organisation and strategically aligned. Rationale: • We do a lot of good work around equalities and disadvantaged groups, but these are not always linked together. • Would ensure more consistent practice within the organisation. • Would ensure joined up practice, tying into the idea of ‘themes not teams’. • Can tie into Community Engagement work. • Can tie into evidence/data work. The majority of consultation responses were in favour of this outcome. Other than the objection to the inclusion of ‘protected characteristics’, as described above, no suggestions were made with regard to its rewording. One respondent noted that ‘Education and other agencies need to recognise the number of third sectors who engage with many people within our community and may have very important input into a successful outcome for all who live in Argyll & Bute’. To reflect this, we suggest the wording of the outcome be amended to: Our work relating to equalities and people with protected characteristics is coordinated across the organisation and its partners and is strategically aligned. 4.26 Upon the approval of the Equality Outcomes, we will develop an action plan to ensure we can monitor progress towards their delivery. The outcomes will be published in the next Equality Mainstreaming Report (due April 2025). This is a joint report which covers the Council, Education Authority, and the Licensing Board. Page 313
Page 314
5.0 CONCLUSION 5.1 The Council, Education Authority, and Licensing Board are three listed authorities under the PSED. As such, they/we are required to set equality outcomes every four years. 5.2 We propose the equality outcomes adopted for the period 2025-2029 are as follows: 1. We make access to information and services easier for people with protected characteristics. 2. Our communities are safe for, and welcoming to, people with protected characteristics. 3. We raise awareness of issues and challenges faced by people with protected characteristics along with ways to accommodate and support them. 4. Argyll and Bute welcomes New Scots and supports them. 5. We ensure people with protected characteristics are enabled to progress. 6. Our work relating to equalities and people with protected characteristics is coordinated across the organisation and its partners and is strategically aligned. 5.3 We ask the Policy and Resources Committee to approve these outcomes. 6.0 IMPLICATIONS 6.1 Policy: This paper relates to the setting of Equality Outcomes. 6.2 Financial: There are no financial implications arising directly from this report. 6.3 Legal: The setting of new equality outcomes is part of our Equality Mainstreaming Duty and a requirement of the Public Sector Equality Duty. 6.4 HR: Some of the suggested actions identified to sit under the proposed outcomes relate to existing workstreams, notably around workforce diversity and working planning. This will ensure we consider existing pieces of work through a more explicit equality lens. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics: Protected Characteristics: Equalities outcomes setting and mainstreaming reporting are required to fulfil our obligations under the PSED. An equality and socio- economic impact assessment (EqSEIA) has been completed in relation to the equality outcome setting process. 6.5.2 Socio-economic Duty: an EqSEIA has been completed in relation to the equality outcome setting process. 6.5.3 Islands: an EqSEIA has been completed in relation to the equality outcome setting process. Page 314
Page 315
6.6 Climate Change: No implications arising from this report. 6.7 Risk: The completion of this work reduces the risk of non-compliance with legislation. 6.8 Customer Service: None arising directly from this report. 6.9 The Rights of the Child (UNCRC): None arising directly from this report. However, we have identified links between proposed outcomes and work relating to the incorporation of the UNCRC. Kirsty Flanagan, Executive Director with responsibility for Customer Support Services Policy Lead: Councillor Mark Irvine 14 January 2025 For further information contact: Jane Fowler, Head of Customer Support Services jane.fowler@argyll-bute.gov.uk Chris Carr, OD Project Officer chris.carr@argyll-bute.gov.uk APPENDICES Appendix 1 - Argyll and Bute Council: Equality and Socio-Economic Impact Assessment Page 315
Page 316
APPENDIX 1 Argyll and Bute Council: Equality and Socio-Economic Impact Assessment Section 1: About the proposal Title of Proposal Equality Outcomes 2025-2029 Intended outcome of proposal Setting of a new set of Equality Outcomes for the period 2025-2029. Description of proposal The Council, the Education Authority, and the Argyll and Bute Licensing Board, as ‘listed authorities’ identified in the Public Sector Equality Duty (PSED), are required to publish equality outcomes at least every four years. We propose the adoption of the following outcomes: 1. We make access to information and services easier for people with protected characteristics. 2. Our communities are safe for, and welcoming to, people with protected characteristics. 3. We raise awareness of issues and challenges faced by people with protected characteristics along with ways to accommodate and support them. 4. Argyll and Bute welcomes New Scots and supports them. 5. We ensure people with protected characteristics are enabled to progress. 6. Our work relating to equalities and people with protected characteristics is coordinated across the organisation and its partners and is strategically aligned. Business Outcome(s) / Corporate Outcome(s) to which the proposal contributes Equality outcomes are crosscutting across the organisation. Links have been made with between the proposed outcomes and council priorities. There is also crossover with the councils Connect for Success themes, notably (but not exclusively) relating to ‘Employee Empowerment’ and ‘Data and Evidence Driven’. Lead officer details: Name of lead officer Chris Carr Job title OD Project Officer Department Customer Support Services Appropriate officer details: Page 316
Page 317
Name of appropriate officer Jane Fowler Job title Head of Customer Support Services Department Sign off of EqSEIA Date of sign off 20.01.2025 Who will deliver the proposal? Officers from across the Council will deliver actions to deliver the proposed outcomes. In addition, we anticipate that members of the Licensing Board will be responsible for contributing actions to support the delivery of outcomes. We will liaise with partners (including from the Third Sector) as appropriate. Section 2: Evidence used in the course of carrying out EqSEIA Consultation / engagement In drafting the outcomes, we consulted internally with officers in relation to Education, Violence Against Women, Refugees, and workforce-related activities. We have also presented papers with the proposed outcomes to the council’s Departmental Management Teams. We discussed the development of equality outcomes at the UNCRC Incorporation Working Group and the Council’s Equality Forum. We made a presentation to the CPP Management Committee about the proposed equality outcomes. We carried out a public consultation which ran from 23 November 2024 to 10 January 2024. The public consultation was published on the council’s website and publicised through the council’s weekly ‘Argyll and Bute News Round Up’ email. In addition, organisations known to the Community Development team were emailed to promote the consultation with the intent to reach community groups working with individuals who have one or more of the nine protected characteristics. We received 24 responses to the public consultation, twenty from individuals and four on behalf of organisations. The organisations between them worked with people from all protected characteristics. Age and disability were particularly well represented. Data We are aware that data relating to equality groups is limited in part due to challenges relating to reaching hard to reach groups. As part of ongoing work around community engagement and data, we wish to include actions under outcome 6 which will be designed to improve collection and understanding of data ensuring it can be segmented by different equality groups. Other information Page 317
Page 318
In addition to the internal engagement outlined above, when drafting proposed outcomes prior to public consultation, we: • Looked at the council’s priorities. • Considered existing areas of activity with which links can be made. • Horizon scanned changes happening outwith the organisation. Gaps in evidence No comment. Section 3: Impact of proposal Impact on service users: Negative No impact Positive Don’t know Protected characteristics: Age x Disability x Ethnicity x Sex x Gender reassignment x Marriage and Civil Partnership x Pregnancy and Maternity x Religion x Sexual Orientation x Fairer Scotland Duty: Mainland rural population x Island populations x Low income x Low wealth x Material deprivation x Area deprivation x Socio-economic background x Communities of place x Communities of interest x If you have identified any impacts on service users, explain what these will be. Page 318
Page 319
Each equality outcome must specify a result which will advance one or more of the needs mentioned in the general equality duty. These are: • the need to eliminate discrimination and other conduct prohibited under that Act • the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not, and • the need to foster good relations between persons who share a relevant protected characteristic and persons who do not. Given that the purpose of the Equality Outcomes is to advance these needs, we anticipate positive impacts for all of the equality groups. In addition, because there are overlaps between protected characteristics and the If any ‘don’t know’s have been identified, at what point will impacts on these groups become identifiable? Not applicable. Impact on service deliverers (including employees, volunteers etc): Negative No impact Positive Don’t know Protected characteristics: Age x Disability x Ethnicity x Sex x Gender reassignment x Marriage and Civil Partnership x Pregnancy and Maternity x Religion x Sexual Orientation x Fairer Scotland Duty: Mainland rural population x Island populations x Low income x Low wealth x Material deprivation x Area deprivation x Socio-economic background x Communities of place x Communities of interest x If you have identified any impacts on service deliverers, explain what these will be. As some actions which will underpin the delivery of the equality outcomes will be directed at our workforce / service deliverers, we anticipate positive outcomes for all protected characteristics. However, concrete benefits related to marriage and civil partnership and pregnancy and maternity are difficult to anticipate. For this reason, we have suggested we do not know that the impact on these groups will be. Page 319
Page 320
We have suggested there will be no impact on the groups listed under the Fairer Scotland Duty although in practice there is likely to be overlap between these and the equality groups; any incidental impacts are likely to be positive. If any ‘don’t know’s have been identified, at what point will impacts on these groups become identifiable? As the action plan which will underpin the delivery of the outcomes is developed, particular actions which might affect these groups will become clearer. How has ‘due regard’ been given to any negative impacts that have been identified? No negative impacts have been identified. Section 4: Interdependencies Is this proposal likely to have any knock-on effects for any other activities carried out by or on behalf of the council? Yes Details of knock-on effects identified Equality Outcomes apply across the organisation so all Services will be expected to deliver as required. The contributions each Service will be expected to make will become clearer as the action plan is developed. Section 5: Monitoring and review How will you monitor and evaluate the equality impacts of your proposal? As part of the equality mainstreaming requirements set out in the Public Sector Equality Duty, we are expected to monitor and evidence progress towards achieving outcomes. To this end, after the equality outcomes are approved, we will develop an action plan to support their delivery. This action plan will include targets and will be monitored. Page 320
Page 321
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 CONSERVATION AREA REGENERATION SCHEME (CARS) PROJECT 15-19 ARGYLL STREET, LOCHGILPHEAD 1.0 EXECUTIVE SUMMARY 1.1 The Lochgilphead Conservation Area Regeneration Scheme (CARS) is a grant programme focussing on the regeneration of historical buildings as well as traditional skills training and community engagement. Lochgilphead CARS is jointly funded by Historic Environment Scotland and Argyll and Bute Council together with contributions from building owners. 1.2 Following a robust assessment, 15-19 Argyll Street has been selected as the final priority building for Lochgilphead CARS and was awarded CARS Grant by Area Committee on the 4th December 2024. The external fabric of the building requires attention to address water penetration issues. The proposed communal repair works and maintenance plan will safeguard the building for the next sixty years. 1.3 Following a competitive tender process, the total project costs exceeded the identified project budget. However, by removing non-essential items from the works, the budget shortfall has been reduced to £21,220. 1.4 Accordingly, this report seeks approval to award an additional PSHG grant of £21,220, to help bridge the budget shortfall. This award would fully utilise the remaining balance from the original £186,220 PSHG allocated to Lochgilphead CARS, by the Policy and Resources Committee on 13th December 2018, and approved by Full Council on 21st February 2019. 1.5 RECOMMENDATIONS Members approve utilisation of the £21,220 balance of Private Sector Housing Grant (PSHG) allocated to the Lochgilphead CARS projects by Full Council on 21st February 2019 to bridge the funding shortfall at the 15-19 Argyll Street Lochgilphead CARS project. Page 321 Agenda Item 12
Page 322
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 CONSERVATION AREA REGENERATION SCHEME (CARS) PROJECT - 15-19 ARGYLL STREET, LOCHGILPHEAD 2.0 INTRODUCTION 2.1 This report seeks approval to award an additional £21,220 Private Sector Housing Grant (PSHG) to help meet the funding shortfall at 15-19 Argyll Street, Lochgilphead which is the final priority building in the CARS project. 3.0 RECOMMENDATIONS 3.1 Members approve utilisation of the £21, 220 balance of Private Sector Housing Grant (PSHG) allocated to the Lochgilphead CARS projects by Full Council on 21st February 2019 to bridge the funding shortfall at the 15-19 Argyll Street Lochgilphead CARS project. 4.0 DETAIL 4.1 15-19 Argyll Street, Lochgilphead is comprised of a single storey and attic of residential accommodation providing two flats over a fully commercial ground floor that contains a Butcher / Greengrocer business. The business supports seven jobs and provides a valuable contribution to the community. 4.2 The general fabric of the building is in very poor condition and is suffering from water penetration issues. Photographs are included at Appendix 1. There is damp ingress in the top floor flat. This is having a negative impact on the occupiers quality of life and the building is detracting from the townscape and character of the Lochgilphead conservation area. 4.3 The scope of works for the project includes slated roof works, leadwork, chimney repairs, stonework and cast-iron goods restoration. 4.4 Lochgilphead CARS and Housing Services staff have been working with the owners of this property since early 2022. The owners formed an Owners Page 322
Page 323
Association and commissioned a Design Team to carry out a Tenement Condition Survey and to produce a Tenement Condition Report. 4.5 In June 2024 the Association appointed a Design Team to progress with the full design and development of the repair project. A tender costs for the works was established, however these were in excess of the already identified funds of which were: • PSHG Grant in accordance with the Scheme of Assistance £22.2k • CARS Grant of £166.46k • Owners contribution £20k. Subsequently cost savings have been identified to remove all non-essential elements, and that has reduced the funding gap to £21,220. 4.6 To bridge the shortfall and to ensure that the necessary repairs to 15-19 Argyll Street are carried out, it is proposed that an additional PSHG grant of £21,220 is allocated towards the project. This additional funding represents the remaining balance of the original PSHG allocation to Lochgilphead CARS, as referred by the Policy and Resources Committee on the 13th December 2018 and approved by Full Council on 21st February 2019. 4.7 If approved, it is proposed that work can start at 15-19 Argyll Street in March 2025. 5.0 CONCLUSION 5.1 The additional funds proposed would safeguard the fabric of one historic building, ensuring the continued use of 1 commercial and 2 residential units. As such they represent an appropriate and important use of the remaining PSHG allocation to Lochgilphead. 6.0 IMPLICATIONS 6.1 Policy – The Outcome Improvement Plan, Economic Strategy and Local Development Plan support town centre regeneration and a diverse and thriving economy. 6.2 Financial – The proposed use of PSHG grant funding falls within the criteria for use of PSHG and will appropriately utilise capital budget which will otherwise remain unspent in this financial year. 6.3 Legal – Third party grant contracts will be issued to the private building owners. 6.4 HR - A dedicated project officer is in post for the duration of the Lochgilphead CARS project. Staff salaries are included in the project budget. 6.5 Fairer Scotland Duty - 6.5.1 Equalities - protected characteristics – None. Page 323
Page 324
6.5.2 Socio-economic Duty – None. 6.5.3 Islands – None. 6.6 Climate Change - Extremes of weather caused by climate change will continue to put buildings under pressure. These projects help property owners undertake large scale building repair projects under the supervision of conservation accredited architects which ensures they are future proofed against climate change, using traditional building materials. 6.7 Risk – That grant schemes are oversubscribed or that projects run over time or budget. These risks will be carefully monitored and mitigation measures introduced on a case-by-case basis. 6.8 Customer Service – The council is responsible for administering the CARS grants on behalf of HES and for ensuring due diligence in the performance of its duties. 6.9 The Rights of the Child (UNCRC) – none. Kirsty Flanagan Executive Director with responsibility for Development and Economic Growth Fergus Murray, Head of Development and Economic Growth Councillor Jim Lynch, Policy Lead for Economic Development, Islands and Rural Communities, Housing 6th January 2025 For further information contact: James Lafferty: Lochgilphead CARS Project Officer james.lafferty@argyll-bute.gov.uk Flora Lamont: Team Lead – Housing Operations flora.lamont@argyll-bute.gov.uk APPENDICES Appendix 1: Photographs of 15-19 Argyll Street Page 324
Page 325
Appendix 1: Photographs of 15-19 Argyll Street Page 325
Page 326
This page is intentionally left blank
Page 327
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 COMMUNITY REGENERATION PARTNERSHIP FUNDING 1.0 INTRODUCTION 1.1 In the 2024 Autumn Statement the UK Government committed to delivering a package of support to Argyll and Bute Council in order to improve outcomes across the region in line with the Government’s core missions and priorities. Community Regeneration Partnership Funding (CRP) will build upon previous work and engagement undertaken by the Ministry of Housing, Communities and Local Government (MHCLG) under the banner of Levelling Up. This report provides members with an update on the financial package, how funding will be delivered, and important considerations for the development of priority projects. 1.2 As part of the core funding package, there is up to £20m capital funding and £250k revenue available for the CRP. Funding is profiled for payment in financial year 2026-27 and is subject to business case approvals. A further capacity payment of £45k will be provided to support dedicated resources to the process. This will be paid in FY25-26 and follows a separate capacity payment which was transferred at the beginning of FY24-25. A funding summary is included in Table 1 below:- Table 1: CRP Funding Summary £m 24-25 (Funding already delivered under LUP banner) 25-26 26-27 Total Capital Funding - - 20 20 Revenue Funding 0.045 0.045 0.25 0.34 Totals 0.045 0.045 20.25 20.34 1.3 Capacity funding totalling £90k will be used to support staff resources delivering administration and financial support to this programme. This resource will be managed by the Transformation Projects and Regeneration Team within Development and Economic Growth. Page 327 Agenda Item 13
Page 328
1.4 The principal partnership of the CRP in Argyll and Bute is between the local authority and MHCLG. The Scottish Government’s Regeneration Unit will also be working in collaboration with key stakeholders to shape the CRP in line with UKG, SG and Council policy priorities. It should however be noted that MHCLG ministers will make the final decisions on all funding proposals. 1.5 A summary of the key CRP milestones and anticipated deadlines is set out below:- • Draft MoU to be shared with Council January 25; • UKG to commence desk based research w/c 6th January; • Weekly calls with Council to be arranged from w/c 6th January; • Fieldwork / visits – w/c 10th February; • Report back on initial findings – w/c 3rd March; • Announcement on projects – w/c 14th April. 1.6 The Council previously agreed a list of priority projects to put forward for Levelling Up Partnership Funding prior to the UK General Election in June. The Council have now been asked by MHCLG to identify 5 priority projects to put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 1.7 It should be noted that these projects can only be regarded as suggestions by the council as MHCLG Ministers will make the final decisions on all projects to be awarded funding. 2.0 RECOMMENDATIONS 2.1 Members are asked to: a) Approve the updated list of priority projects included in Appendix 1, which will form the basis of further negotiations with the UK and Scottish Governments. b) Note that all funding requires to be committed by FY 26/27 and will be subject to business case approvals by MHCLG Ministers. 3.0 DETAIL 3.1 In the 2024 Autumn Statement the UK Government committed to delivering a package of support to Argyll and Bute Council in order to improve outcomes across the region in line with the Government’s core missions and priorities. Community Regeneration Partnership Funding (CRP) will build upon previous work and engagement undertaken by the Ministry of Housing, Communities and Local Government (MHCLG) under the banner of Levelling Up. This report provides members with an update on the financial package, how Page 328
Page 329
funding will be delivered, and important considerations for the development of priority projects. 3.2 The scope of the CRP funding is primarily driven by the UK Government’s 5 stated missions:- • Kick-starting economic growth • Making Britain a clean energy superpower • Take back our streets • Break down barriers to opportunity • Build an NHS fit for the future 3.3 The UKG will also work in collaboration with the Scottish Government’s Regeneration Unit to shape the CRP in line with SG missions. Final decision- making will ultimately lie with MHCLG ministerial team. The UKG have advised that they will consider all opportunities on their merits and that ministers will prioritise investments that deliver tangible, specific outputs from the CRP funding rather than topping up larger projects delivered through other streams. 3.4 As part of the core funding package, there is up to £20m capital funding and £250k revenue available for the CRP. Funding is profiled for payment in financial year 2026-27 and is subject to business case approvals. A further capacity payment of £45k will be provided to support dedicated resources to the process. This will be paid in FY25-26 and follows a separate capacity payment which was transferred at the beginning of FY24-25. 3.5 Capacity funding totalling £90k will be used to support staff resources delivering administration and financial support to this programme. The Transformation Projects and Regeneration Team within Development and Economic Growth will manage this resource. 3.6 The principal partnership of the CRP in Argyll and Bute is between the local authority and MHCLG. The Scottish Government’s Regeneration Unit will be working in collaboration with MHCLG and the LA to shape the CRP in line with UKG, SG missions and the local context. Issues, opportunities and interventions will be identified / agreed collaboratively. MHCLG ministers will make the final decisions on all funding proposals. 3.7 Once particular projects and support has been agreed in principle, MHCLG will require Argyll and Bute Council to provide details of our internal governance processes and project specific detail on delivery, value for money, key measurable benefits, risks and mitigations, compliance with the subsidy control regime and equalities implications. The Council will require to complete template forms for each project listing relevant information. These will then help inform MHCLG's internal business case – a single business case developed by the CRPs team which when cleared within MHCLG structures will unlock payment to Argyll and Bute Council. Page 329
Page 330
3.8 Subject to business case approval, grants will be given as a direct award to Partnerships on an allocative basis. General grants will be directly awarded to each partnership. Grant recipients will primarily be local authorities. Funding will be delivered through non-ringfenced Section 50 grants via the UK Internal Market Act. These grants will be administered by Argyll and Bute Council in line with the terms of its existing procurement, delivery and governance structures and constitutional arrangements. 3.9 A Memoranda of Understanding (MoU) will require to be signed by both parties. The MoU will set out how MHCLG expect local authorities to spend the funding provided and how to monitor delivery. A Grant Determination Letter will be issued once funding has been released. Change Control 3.10 MHCLG will take a pragmatic approach to project adjustment, where changes to agreed interventions need to be made. Local authorities must outline the change, explain the reasoning, and provide formal Section 95 officer approval. Changes to the agreed package will be permitted under the following circumstances: A. If the local authority can demonstrate to the CRPs team that the funding would achieve the same aim as another project agreed as part of the package i.e. if an aim of the original package was aimed at boosting housing numbers, a new project could be funded from the CRP package if it also aims to boost housing numbers; and/or, B. If the project is an alternative option from the menu of interventions developed through the partnership and agreed with Ministers; and, C. Any new project would meet the three criteria, which each policy needed to in order to be included in the package originally. These are: i. Feasibility/deliverability. ii. Value for money. iii. Local Strategic Fit. 3.11 Changes in line with the above must be notified in advance to MHCLG officials, who in turn will notify Ministers through a streamlined approval process. Funding an intervention that does not meet the above scenarios would require a full business case and MHCLG Ministerial approval, MHCLG officials will again take a streamlined approach to securing Ministerial approval. Scottish Government priorities and input will also be taken into consideration Delivery and monitoring arrangements 3.12 Argyll and Bute Council will be responsible for implementation and will be expected to complete a fraud risk assessment as well as maintain and monitor a risk register. Where interventions are being delivered by local authorities, MHCLG will work with them to agree what milestones should be set on the package as a means of monitoring progress and to ensure projects Page 330
Page 331
are being delivered to schedule. There will be a minimum expectation of a quarterly check point between MHCLG and Argyll and Bute Council on progress and learning for the first year and then move to six monthly reviews. 3.13 Further detail of delivery and monitoring arrangements will be set out in the MoU between MHCLG and Argyll and Bute Council. 3.14 MHCLG will prioritise projects that can spend funds within the financial year in which payments are received. In order for the MHCLG Accounting Officer to be able to sign-off on grant funding to local authorities, they will need assurance from the Section 95 officer at the local authority that if they were to receive funds they would be spent by the end of each relevant financial year. 4.0 Next Steps 4.1 MHCLG We are currently finalising plans internally, however they have advised that they anticipate their work to broadly follow the key stages set out below:- • Scoping phase (December-January TBC): MHCLG will be gathering evidence through desk based research – as well as reviewing information from their analytical team and input from the Scottish Government. This, along with local conversations will provide an initial view of the opportunities and challenges in Argyll and Bute in line with the priorities of all parties. • Fieldwork phase (January-February TBC) – A series of in person conversations with stakeholders on the opportunities and challenges in Argyll and Bute and (in some cases) potential suggestions for solutions. Where necessary, supplemented with further remote meetings. • Policy development phase (February-March TBC) During this phase MHCLG will develop policy recommendations on an iterative basis with Local Authorities. They will take the scoping research and fieldwork findings and give their own suggestions as well as considering suggestions for projects from the Council and local stakeholders. At this stage Ministers will also be asked to take a view on developing priorities. • Final package agreed (April 2025): The final package will be finalised by early April. MHCLG will continue to work with the Council to refine it, through March and early April before Ministers make a final decision. • Business case development phase: (timings TBC): MHCLG will seek input to develop internal business case, which will cover all agreed projects. Once the business case is completed and signed off through internal MHCLG structures arrangements will be made for funding to be released as per the agreed financial profile. 4.2 The Council previously agreed a list of priority projects to put forward for Levelling Up Partnership Funding prior to the UK General Election in June. The Council have now been asked by MHCLG to identify 5 priority projects to Page 331
Page 332
put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 4.3 It should be noted that the projects identified in Appendix 1 are considered to be deliverable within a relatively short timetable and have clear demonstrable outcomes which is also a key requirement of this process. 4.4 Projects funded by CRP monies require to be approved by UKG Ministers and as such, there is no guarantee that any project ideas submitted by the council will be selected. All projects will be subject to detailed business case development by the UK Government with council inputs as appropriate. Other projects may also emerge at the discretion of the UK Government following consultation with local stakeholders. 4.5 It should be further noted that removing barriers to economic growth is still an aim of the UK Government working in collaboration with the Scottish Government. Consequently, this will be explored further during discussions with the civil servants in the coming weeks. 5.0 CONCLUSION 5.1 The UK Government have committed to delivering a package of support to Argyll and Bute Council totalling £20.34m via the Community Regeneration Partnership. 5.2 The Council have now been asked by MHCLG to identify 5 priority projects to put forward for potential funding via the CRP. A draft list of priority projects and estimated funding values is set out in Appendix 1 and it is proposed that this list will form the basis of negotiations with UKG for CRP funding. 5.3 It is currently anticipated that the final package will be confirmed in early April 2025 and MHCLG Ministers will make the final decision. 5.4 It should be noted that any project ideas submitted by the council to the UK Government have no guarantee of being selected and are all subject to detailed business case development by the UK Government with council inputs as appropriate. Other projects may also emerge at the discretion of the UK Government following consultation with local stakeholders. 5.0 IMPLICATIONS 5.1 Policy – The Community Regeneration Partnership funding has the potential to support a number of council priorities included in the Single Outcome Agreement (SOA) and Economic Development Strategy and Action Plan support the sustainable growth of our economy. Page 332
Page 333
5.2 Financial – The Council have identified 5 priority projects which will form the basis of negotiations with the UKG around the allocation of £20.34m of grant funding via the Community Regeneration Partnership. 5.3 Legal – Legal will require early sight of draft MoU and funding conditions. 5.4 HR – None arising from this report. 5.5 Fairer Scotland Duty: 5.5.1 Equalities - the report explains a process that can help support the economy of our areas generating employment opportunities. 5.5.2 Socio- Economic Duty – the projects identified will enhance outcomes for those experiencing socio-economic disadvantages. 5.5.3 Islands – projects have been identified on our islands for member’s consideration. 5.6 Climate Change – Each project will require to have regard to climate change implications. 5.7 Risk – Our rural economy is fragile and failing to deliver this external investment would be a considerable concern. 5.8 Customer Service – No specific implications, but all projects identified will impact positively on our customers / communities. 5.9 Rights of the Child (UNCRC) – No implications arising from this report. Councillor Jim Lynch, Policy Lead for Economic Development, Islands and Rural Communities, Housing For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk January 2025 Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Page 333
Page 334
Appendix 1: CRP Priority Projects Project Title What is it? Likely Ask? Status Link to Labour Manifesto Oban Airport Aviation Business Park To contribute to the construction of 2 key buildings that form part of phase 2 of the Oban Airport Business Park. Two private sector businesses have signed Heads of Terms to occupy the buildings and the project also complements the proposed UAV hub funded through RGD. £7.4m matching TIF funding; prudential borrowing and RGD UAV Hub £4m. Costs based on verified Contractor estimates and tendered costs due in March 2025. Land in control; business case work partly completed and detailed planning consent for two buildings including UAV Hub. Supporting Scotland’s Economic Growth through innovation Former Royal Hotel Rothesay, Bute To remove dereliction and restore a valuable heritage building in a prominent position in Rothesay town centre on the island of Bute; To create through a public/private sector partnership new list accessible homes including key worker housing; tourist accommodation and commercial space. £3.5m matched by potential private finance/ £1m from Strategic Housing Fund, HIE possible and Historic Environment Scotland. New Non Profit Trust created; Condition and Cost Estimate report completed; layout drawings commissioned Supporting Scotland’s Economic Growth; Housing delivery and supporting communities through removing dereliction European Marine Science Site Phase 2 This is a key strategic priority project for HIE. The strategic vision for the development is here: 240117-emsp-the-vision.pdf (europeanmarinesciencepark.co.uk) The development of Camas House, the second business office/laboratory development on the site specifically developed to support business growth in the marine economy. This will directly support boosting productivity, local pay, jobs and living standards by growing the private sector. This project complements SAMs with the £1.6m to fit out floor of EMSP matched by £8m from HIE Full Planning consent granted with building on site at this time; proposal relates to fitting out of one floor which has not been included in tender. HIE have already invested in excess of £8m into this project. Supporting Scotland’s Economic Growth through innovation Page 334
Page 335
building acting as an incubator for blue economy businesses. Affordable Housing For Key Workers Adding scale to our work associated with the Housing Emergency to build affordable housing for key workers on a number of sites across Argyll and Bute. Argyll and Bute was the first council in Scotland to declare a housing emergency with a lack of key worker housing a critical issue for the future of our area. £5m adds to £3.7m RGD/Island Infrastructure fund and other works we are taking forward on our islands including Islay and Mull. Scaling up impact of RGD Key Worker Housing Initiative Supporting Scotland’s Economic Growth through provision of key worker housing SME Business Units Work in partnership with HIE and Scottish Enterprise to establish a number of business units targeted at local SMEs. Units will be constructed within local business park sites and/or in locations where a shortage of commercial space has been identified across Argyll and Bute. This project will support new and existing SMEs to establish and grow across Argyll and Bute and will potentially result in increased NDR/lease revenues for the Council, which can be re- invested to support initiatives targeted at business growth. £2.5m Synergies with existing investments being delivered via RGD, and projects such as Oban Airport Business Park and Kilmory Phase 2, EMSP and Colgrain. Opportunity to work with key partners to add value to existing investments at strategic business sites across Argyll and Bute. Kick starting local economic growth by addressing lack of capacity in rural commercial accommodation. Breaking down barriers to employment by providing opportunities for rural businesses to grow and flourish. Page 335
Page 336
This page is intentionally left blank
Page 337
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 CROWN ESTATES FUNDING ALLOCATION 2025/26 1.0 EXECUTIVE SUMMARY 1.1 The Scottish Government has written each year to Councils advising of the distribution of the net revenue generated from the Scottish Crown Estate’s marine asset out to 12 nautical miles for their respective council area. These annual revenue allocations are distributed in arrears following the finalisation of the annual accounts for the Scottish Crown Estate. 1.2 The expectation is that Local Authorities would use the funding for additional expenditure that specifically benefits coastal communities, with individual authorities making decisions on funding of projects to benefit coastal communities and being transparent and accountable to their communities and others for expenditure. 1.3 The council’s allocation for this financial year (2024/25) is £1,818,714.93. The formal notification of the allocation was not received until 11 December 2024. The allocation is the Council’s share of the total net revenue generated in 2022- 23 but which is distributed in 2024-25. 1.4 The Council have previously agreed to allocate £780,000 to mitigate weather related costs, £500,000 to balance the 2024-25 budget and a further £107,000 to fund posts within Economic Development. Taking existing funding commitments into account, the remaining budget for 2024/25 currently stands at £431,714.93. 1.5 Members are asked to consider proposals set out in Table 1 and approve the priority projects for the remaining Crown Estates budget allocated in the 2024/25 financial year. 1.6 The recommendations are: • Members are asked to consider and approve time sensitive proposals set out in Table 1 for the remaining Crown Estates budget allocated in the 2024/25 financial year. Page 337 Agenda Item 14
Page 338
• Members are asked to note that a further report will be brought back to the Policy and Resources Committee identifying priority projects for the 2025/26 Crown Estates funding allocation. Page 338
Page 339
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 CROWN ESTATES FUNDING ALLOCATION 2025/26 2.0 INTRODUCTION 2.1 The Scottish Government has written each year to Councils advising of the distribution of the net revenue generated from the Scottish Crown Estate’s marine asset out to 12 nautical miles for their respective council area. These annual revenue allocations are distributed in arrears following the finalisation of the annual accounts for the Scottish Crown Estate. 2.2 The council’s allocation for this financial year (2024/25) is £1,818,714.93. The formal notification of the allocation was not received until 11 December 2024. The allocation is the Council’s share of the total net revenue generated in 2022- 23 from marine licences but which is distributed in 2024-25. 2.3 The Council have previously agreed to allocate £780,000 to mitigate weather related costs, £500,000 to balance the 2024-25 budget and a further £107,000 to fund posts within Economic Development. Taking existing funding commitments into account, the remaining budget for 2024/25 currently stands at £431,714.93. 2.4 Agreement is sought from members to approve a number of time sensitive projects to utilise the remaining 24/25 funds. Further detail is included in Table 1 of this report. 2.5 A further report will be brought back to the Policy and Resources Committee identifying priority projects for the 2025/26 Crown Estates funding allocation. 3.0 RECOMMENDATIONS 3.1 Members are asked to consider and approve time sensitive proposals set out in Table 1 for the remaining Crown Estates budget allocated in the 2024/25 financial year. 3.2 Members are asked to note that a further report will be brought back to the Policy and Resources Committee identifying priority projects for the 2025/26 Crown Estates funding allocation. Page 339
Page 340
4.0 DETAIL 4.1 The Scottish Government has written each year to Councils advising of the distribution of the net revenue generated from the Scottish Crown Estate’s marine asset out to 12 nautical miles for their respective council area. These annual revenue allocations are distributed in arrears following the finalisation of the annual accounts for the Scottish Crown Estate. 4.2 The annual payment made to each relevant local authority is based on the distribution method agreed by the Settlement and Distribution Group (SDG). It remains Scottish Governments preference that the allocations should be used to deliver coastal community benefit. 4.3 The Crown Estate fund is targeted at the sustainability of coastal communities within the categories noted below and the Council has to advise how the funding is spent as part of the annual reporting requirements. Categories of expenditure are:- • Environment • Community • Climate Change. • Economic Development 4.4 The funding can be used by the council to deliver council projects or can be provided as a grant to third sector organisations to assist in the delivery of a community project. 4.5 Where the funding is being provided as a grant a contract needs to be drawn up and issued and the grant and associated drawdown managed by officers of the council. 4.6 The Council’s allocation for this financial year (2024/25) is £1,818,714.93. The formal notification of the allocation was not received until 11 December 2024. The allocation is the Council’s share of the total net revenue generated in 2022-23 but which is distributed in 2024-25. 4.7 The Council have previously agreed to allocate £780,000 to mitigate weather related costs, £500,000 to balance the 2024-25 budget and a further £107,000 to fund posts within Economic Development. Taking existing funding commitments into account, the remaining budget for 2024/25 currently stands at £431,714.93. 4.8 Members are asked to consider proposals set out in Table 1 which identifies priority time sensitive projects for the remaining Crown Estates budget allocated in the 2024/25 financial year. Members are asked to note that all of these projects are considered to be deliverable in the 2024/25 Financial Year. 4.9 A summary of projects considered deliverable in 2024/25 is set out in Table 1 Page 340
Page 341
below:- Table 1: Priority Projects – 2024/25 Crown Estates Fund Projects Lead Partner Crown Estate request Other funding Supporting Information Kintyre Seasports ABC / KSS £200K RGD Funding to support the demolition of existing pavilion building and temporary accommodation to enable material start to be made in advance of RGD approvals. This project has a strong focus on marine training and community wealth building. Port Ellen Playing Fields - Community Hub & motorhome site SID / HIE £100k RCGF, PBI, HIE, RTIF On site now - to cover shortfall up to £300,000 - critical for completion. HIE also providing further match funding to meet this shortfall. Argyll Kayak Trail ABC £15k Will fund on-going operation and maintenance of this important tourist asset. Tarbert Heritage and Place Programme ABC £115K 2024/25 (£650k over 5 years) NHLF / HES Assists with bid to HES for a substantial investment in Tarbert heritage. Match funding for 5 year project. If an allocation was agreed from 2024/25 then this could sit within earmarked reserves until ready to draw down. Page 341
Page 342
4.10 The challenge in respect of the funding has always been to identify projects that meet the criteria, and are able to be delivered within short timeframes with our limited staff resources especially given the sheer number of projects that we are already involved in delivering. 4.11 Although the funding for 2025-26 hasn’t been advised yet, Members could consider allocating some of the anticipated funding in advance of the known grant level. As the level of grant for 2024-25 was £1.819m, it would be prudent to assume that we would receive at least £1.4m and allocate up to this level in advance of knowing the exact funding. Members are reminded that Council have already allocated £0.500m towards balancing the 2025-26 budget and also £0.107m towards post in economic development, which would leave circa £0.800m that could be allocated. A report will be brought back to the Policy and Resources Committee identifying priority projects for the 2025/26. 5.0 CONCLUSION 5.1 The need to ensure delivery and spend combined with the large number of existing projects being delivered by the council, make for a challenging environment. However there is no doubt that the Crown Estate funding has enabled more projects to be delivered that support our coastal communities, build on investment already in place as well as supporting new infrastructure investment supporting community wealth building and wider economic development of the area. 5.2 A number of priority, time sensitive projects have been identified for the remaining Crown Estates budget allocated in the 2024/25 financial year. 6.0 IMPLICATIONS 6.1 Policy – There is a need to comply with the Scottish Government guidance as outlined in the report. The expectation is that Local Authorities would use the funding for additional expenditure that specifically benefits coastal communities, with individual authorities making decisions on funding of projects to benefit coastal communities and being transparent and accountable to their communities and other for expenditure. 6.2 Financial –The Scottish Government expect that any funds will be committed and spent as quickly as possible. The Council will manage finances on projects identified for Crown Estates funding. 6.3 Legal – None. 6.4 HR – Resourced from existing staff and funding used to cover associated costs. 6.5 Fairer Scotland Duty: Page 342
Page 343
6.5.1 Equalities - protected characteristics – Funding can support projects that enhance equalities. 6.5.2 Socio-economic Duty – The fund supports coastal communities. 6.5.3 Islands - The Fund supports coastal communities and has the potential to align with, and add value to other funding programmes such as the Islands Programme, RGD and RCGF. 6.6 Climate Change – Projects can support enhanced sustainability. 6.7 Risk – The projects are continually monitored to ensure that funds can be spent and that the projects meet the criteria as set out by Scottish Government. 6.8 Customer Service – None. 6.9 The Rights of the Child (UNCRC) – None. Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Councillor Jim Lynch, Policy Lead for Economic Development, Islands and Rural Communities, Housing 16th January 2025 For further information contact: Fergus Murray, Head of Development and Economic Growth or Jonathan Welch, Transformational Projects and Regeneration Manager, Tel: 0154 604329, jonathan.welch@argyll-bute.gov.uk Page 343
Page 344
This page is intentionally left blank
Page 345
1.0 EXECUTIVE SUMMARY 1.1 The purpose of this report is to update Members on Round 7 (2025/26) of the Council’s Strategic Events and Festivals Fund (SEF). The report provides details of the applications submitted and the applications recommended to receive funding. The report seeks Members’ agreement to allocate a minimum of £90,000 funding to allow for a SEF Round 8 in 2026/27. 1.2 At the 22nd February 2024 Council budget meeting, the Council agreed funding of £90,000 for SEF Round 7, to be augmented by any underspend in Round 5 (2023-2024). This has taken the total budget available for SEF Round 7 to £106,560. 1.3 SEF Round 7 opened on 7th October 2024 and closed on 18th November 2024. A total of 22 applications were received and amounted to a total eligible request of £162,736. Following assessment and scoring against agreed criteria, 12 applications are recommended for approval and are listed in Table 1 at Appendix 1. Two applicants withdrew their applications as they were ineligible, and eight applications are not being recommended to receive funding. 1.4 It is recognised that all events and festivals are important, however as the SEF fund is oversubscribed, only applicants that represent viable events, best meet all the criteria, and have a clear need for SEF funding have been recommended for an award. All events and festivals not in receipt of an award will be signposted to information and resources to help them to identify alternative funding. 1.5 The fund aims to support event organisers to enhance and grow their events with the result that more visitors are attracted to Argyll and Bute, providing substantial economic benefit. The economic impact of the applications received in SEF Round 7 is approximately £15 million. 1.6 RECOMMENDATIONS It is recommended that Members of the Policy and Resources Committee: ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 STRATEGIC EVENTS AND FESTIVALS FUND – ROUND 7 2025/2026 Page 345 Agenda Item 15
Page 346
I. Agree to the award of eligible SEF Round 7 grants amounting to £106,036 as detailed in Table 1. II. Agree that any SEF Round 7 grant offer be formally issued upon confirmation from the event organisation that the event is confirmed as going ahead, match funding is in place and the event still meets the SEF Round 7 criteria. III. Agree to continue delegation of powers to the Executive Director with responsibility for Development and Economic Growth to allow any subsequent amendment to existing grant requests due to changes to the event/event budget. Any amendment to a current grant request/offer would only be considered if the amendment related to either the same level or a reduction in the request and constitute up to 75% of legitimate and eligible expenditure. Similarly, if there was a reduction in the final event costs that would result in delivery of a profit more than £10,000 (all of which must be reinvested to future events) to the organisation and that this was sustained over a 3-year period, the final retention (10%) would not be paid out on the third year of the grant. IV. Agree to recommend to Council that as part of the budget in February 2025, that they agree a minimum of £90,000 base funding for Strategic Events and Festivals in order that the application process can commence for Round 8 (2026/27). V. Agree and recommend to Council that any underspend from SEF Round 6 (2024/25) is earmarked and used to augment a future SEF round. Page 346
Page 347
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 STRATEGIC EVENTS AND FESTIVALS FUND – ROUND 7 - 2025/26 FUND 2.0 INTRODUCTION 2.1 The purpose of this report is to update Members on Round 7 of the Council’s Strategic Events and Festivals Fund (SEF). The report provides details of the applications submitted, and the applications recommended to receive grant funding. 2.2 In recognition of the importance of the events sector to the economy of Argyll and Bute, the SEF Fund was agreed by Council and first taken forward as a competitive fund in 2019/20. A critical element of the application requirement is that the event or festival be held in Argyll and Bute and be of a strategic nature, i.e. having the capacity to attract people from out with the area, with a focus on national and international visitors, and generate significant economic benefits for the local community. To illustrate this, the economic impact in the area from the funded events and festivals in SEF Rounds 5 and 5.2 (2023/24) was approximately £13 million. 2.3 The total value of grant funding requested from the applications received significantly exceeds the budget available. The budget available for SEF Round 7 (2025/26) is £106,560 and a total of 22 applications were received amounting to a total request of £162,736. Out of these 22 applications, two were withdrawn by the applicants as ineligible and 12 are recommended for funding and can be viewed in Table 1. 3.0 RECOMMENDATIONS 3.1 It is recommended that Members of the Policy and Resources Committee: I. Agree to the award of eligible SEF Round 7 grants amounting to £106,036 as detailed in Table 1. II. Agree that any SEF Round 7 grant offer be formally issued upon confirmation from the event organisation that the event is confirmed as going ahead, match funding is in place and the event still meets the SEF Round 7 criteria. III. Agree to continue delegation of powers to the Executive Director with Page 347
Page 348
responsibility for Development and Economic Growth to allow any subsequent amendment to existing grant requests due to changes to the event/event budget. Any amendment to a current grant request/offer would only be considered if the amendment related to either the same level or a reduction in the request and constitute up to 75% of legitimate and eligible expenditure. Similarly, if there was a reduction in the final event costs that would result in delivery of a profit more than £10,000 (all of which must be reinvested to future events) to the organisation and that this was sustained over a 3-year period, the final retention (10%) would not be paid out on the third year of the grant. IV. Agree to recommend to Council that as part of the budget in February 2025, that they agree a minimum of £90,000 base funding for Strategic Events and Festivals in order that the application process can commence for Round 8 (2026/27). VI. Agree and recommend to Council that any underspend from SEF Round 6 (2024/25) is earmarked and used to augment a future SEF round. 4.0 DETAIL 4.1 The overarching aim of the Strategic Events and Festivals Fund is to support event organisers to enhance and grow their events with the result that more visitors are attracted to Argyll and Bute, providing substantial economic benefit. It is recognised that the strategic events and festivals sector is still facing challenging circumstances brought about as a result of changes in individuals’ habits and the cost-of-living crisis. This has put a strain on the financial stability of many of the organisations, however the outlook is improving, and the Council’s SEF fund continues to be of strategic importance to the events industry in Argyll and Bute. The fund provides critical support in the economic recovery of the area and will hopefully allow events to continue to grow and may prevent organisations and events from ceasing to operate. 4.2 SEF Round 7 opened on 7th October 2024 and closed on 18th November 2024. A total of 22 applications were received, however two withdrew as they did not meet the criteria of SEF, leaving a total eligible request of £162,736. The SEF budget available for Round 7 is £106,560 and therefore the fund is oversubscribed by £56,176. From the 20 eligible applications, 12 applications are recommended and can be viewed at Appendix 1. These demonstrate a variety of events and festivals from across the area that deliver a wide range of event types, from sport to music and dance which have a forecast economic impact of approximately £15 million. 4.3 The importance of all the events to the applicants and communities is recognised, however the fund has been oversubscribed and not all applications can be supported. Officers performed a detailed assessment based on the information submitted and assessed eligibility, the viability of the event, how well the events fit the SEF criteria and could demonstrate a clear need for SEF funding, as well as the necessary financial and due diligence Page 348
Page 349
checks. Given the number of applications and the pressure on the fund, a reduction in the funding requested has been applied to: I. Mull Rally of £7K, bringing their recommended award to £18K which is the same as their previous Round 6 award and II. Argyllshire Gathering of £7K, bringing their recommended award to £5K in line with their Round 4.2 grant request. 4.4 This has enabled an increased number of the highest scoring events and festivals to be awarded a grant. It should be noted that many of the applications are good quality, however several applications would benefit from more thought and time being taken to ensure that they are as robust as possible, especially given how competitive the fund now is. 4.5 The loss of any event to the area is likely to have a significant impact on the local economy, especially those events which are long standing. The impact of SEF Round 7 funding and future SEF round funding is recognised in assisting the sustainability of the events and the event organisations, many of whom are third sector organisations. The Council previously agreed to earmark underspend to augment future rounds up to Round 7 (2025/26) however the Council still requires to agree to allocate a baseline budget to allow a SEF Round 8 (2026/27). Members are therefore asked to consider and agree to a minimum of £90,000 for Round 8, allowing there to be certainty for the events industry that there will be future funding beyond 2025/2026. 4.7 Event Scotland continue to support events through industry support funds and fully recognises the fragility of the sector. Council officers are in regular discussion with Event Scotland to ensure that funding awarded is complimentary and does not duplicate Council funding. 4.8 In addition, officers continue to liaise with event organisers who have applied to previous rounds to provide information and support where appropriate. 5.0 CONCLUSION 5.1 The Round 7 SEF application and assessment process has been completed as per the guidance. A budget of £106,560 is available under Round 7, and a total of 22 applications were received with a total request of £162,736. The Strategic Events and Festivals Fund aims to support events and festivals which are of strategic importance to Argyll and Bute, which will provide a meaningful economic impact of approximately £15 million and attract a wide range of visitors from outside the area. As such, there are 12 applications (see Table 1) recommended to receive funding. The total grant request in Table 1 is £106,036. 5.2 It is requested that the Policy and Resources Committee recommend to Council that as part of the February 2025 budget, a minimum baseline budget of £90,000 be allocated to allow a SEF Round 8 (2026/27) to be held. Page 349
Page 350
5.3 Whilst the events sector is fragile due to rising costs and challenges associated with the cost-of-living crisis, it is hoped that it will continue to build resilience and sustainability. There is no doubt that the continued support to the sector via future SEF funding will play a key part. 6.0 IMPLICATIONS 6.1 Policy - The Council’s Economic Strategy supports the value of events and festivals for their positive impact on the economy and supporting the hospitality and tourism sectors. 6.2 Financial - SEF Round 7 2025/26 budget is £106,036. Applications totaling £162,736 were received. 6.3 Legal - Award letters and grant contracts will be issued as and when a decision is made, and confirmation has been received that the event will go ahead. 6.4 HR - Resourced from existing staff. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics – None. 6.5.2 Socio-economic Duty - The Fund seeks to support the economic growth of areas including a positive contribution to areas of disadvantage. 6.5.3 Islands - The Fund seeks to support island economies by supporting increased levels of visitors. 6.6 Climate Change - As part of the application process events must submit an Environmental Management Policy and this is part of the scoring process. 6.7 Risk – Events not supported may be at risk of not continuing. All events not recommended for funding will be signposted to information and resources to help identify other funding opportunities. 6.8 Customer Service – None. 6.9 The Rights of the Child (UNCRC) – None. Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Councillor Math Campbell-Sturgess, Policy Lead for Business Development Page 350
Page 351
6 December 2024 For further information contact: Fergus Murray, Head of Service for Development and Economic Growth Tel: 01546 604293 Kirsty Durrant, Economic Regeneration Officer, Transformational Projects and Regeneration, Tel: 01436 657635 APPENDICES Appendix 1 - SEF Round 7 Recommended Grant Applications Page 351
Page 352
APPENDIX 1 - SEF ROUND 7 RECOMMENDED GRANT APPLICATIONS Table 1 – SEF Round 7 Recommended Grant Applications Event Funding Request Recommended Funding Award £2,500 - £5,000 Fund Argyllshire Gathering 12,000 5,000 Highlands and Islands Music and Dance Festival 5,000 5,000 Helensburgh Christmas Lights Switch On and Festival of Light 5,000 5,000 Helensburgh Winter Festival 5,000 5,000 Islay Jazz Festival 4,536 4,536 Jura Music Festival 5,000 5,000 Oban Winter Festival 5,000 5,000 Tarbert Seafood Festival 2,500 2,500 Subtotal 44,036 37,036 £5,001 - £15,000 Fund Mull of Kintyre Music and Arts Festival 11,000 11,000 Tiree Wave Classic - 2025 - Year 41 10,000 10,000 Subtotal 21,000 21,000 £15,001 and Over Fund Cowal Highland Gathering 30,000 30,000 Mull Rally 2025 25,000 18,000 Subtotal 55,000 48,000 Total SEF Round 7 120,036 106,036 Page 352
Page 353
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 ROYAL NATIONAL MOD 2028 1.0 EXECUTIVE SUMMARY 1.1 The purpose of this report is to seek approval in principle on An Comunn’s offer for Argyll and Bute to host the Royal National Mòd (RNM) in 2028. 1.2 To secure this would require funding of up to £200K from the Council to be allocated across financial years 2025-2026 to 2028-2029. It would also require funding of circa £25k for Live Argyll staffing during the RNM delivery. An Comunn are keen to highlight that they are happy to work with the Council around this figure to see what might be possible and recognise the cost to the Council of the in-kind support which is provided through Live Argyll. 1.3 An Comunn successfully delivered the RNM in Oban on 11th-19th October 2024 with almost 9,000 attendees and an economic impact of just over £3.6m. 1.4 The preferred location is Oban due to the key criteria for the event being a strong local organising committee, infrastructure, accommodation and venues, however the decision on location is a joint decision between Council and An Comunn Board and is subject to risk regarding the key criteria. RECOMMENDATIONS It is recommended that Members of the Policy and Resources Committee: i. Provide an in principle agreement on hosting the RNM in Dunoon or Oban in 2028 and for the requirement to enter into an agreement with An Comunn to provide a maximum of £200K financial support over a four year period with the final payment in financial year 2028-2029. ii. Agree to the Council working with Live Argyll to secure the use of the venues for the duration of the RNM at no cost to the RNM. iii. Note that the An Comunn Board meet in March 2025 and have requested that the Council provide an in principle decision by this date. Page 353 Agenda Item 16
Page 354
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 20 FEBRUARY 2025 ROYAL NATIONAL MOD 2028 2.0 INTRODUCTION 2.1 The Council recognises the cultural and educational significance of supporting the development of the Gaelic language and the provision of local and national Mòd events. The RNM holds a very special place in the history of Argyll and Scottish culture. The value of holding a national Mòd in Argyll has long been recognised by Argyll and Bute Council through its previous support. This support reflects the significance of the RNM event in providing opportunities to celebrate, support and develop our national language and culture as well as demonstrating the area’s ability to host national events, the boost it gives to the local tourism industry by providing ‘authentic experiences’ for visitors that underpins the industry’s wider growth ambitions. 3.0 RECOMMENDATIONS 3.1 It is recommended that Members of the Policy and Resources Committee: i. Provide an in principle agreement on hosting the RNM in Dunoon or Oban in 2028 and for the requirement to enter into an agreement with An Comunn to provide a maximum of £200K financial support over a four year period with the final payment in financial year 2028-2029. ii. Agree to the Council working with Live Argyll to secure the use of the venues for the duration of the RNM at no cost to the RNM. iii. Note that the An Comunn Board meet in March 2025 and have requested that the Council provide an in principle decision by this date. 4.0 DETAIL 4.1 The Council has had an SLA with An Comunn for hosting the RNM in Argyll and Bute over a number of years, with a previous commitment to host an RNM in the area every three years. Most recently, the RNM was held in Oban in 2015, Dunoon in October 2018 and last year in Oban, the home of the RNM. 4.2 The SLA is supported by a post event analysis to ensure the anticipated benefits are realised – this includes an understanding of the impact of the Page 354
Page 355
events on the local economy. It is clear from monitoring and evaluation of previous events that the RNM brings significant economic benefit to the local economy. This is as a consequence of increased visitor numbers and spend in the area from those attending and taking part in the event. 4.3 The key economic impact and other findings from the 2024 Oban RNM evaluation report are summarised below and a copy of this is included at Appendix 1: • Numbers attending including competitors - 8,933. • Event rating – very good/good atmosphere 94%, organisation 90%, fringe events 90%, competition 85%, and information 82% • Economic Impact - £3,618,308. • Return on investment - £1:26. • Visitors - A total of 74% of visitors were from outside Argyll & Bute and 80% stayed overnight. • Views on Oban - Almost all (98%) visited local restaurants/cafes/pubs, 90% local shops and 78% local visitor attractions/places of interest. Oban is highly thought of with 96% rating it very good/good as a host destination. • Return Visits - A total of 86% said they are very likely/likely to return to Oban for a future leisure visit. • Gaelic - The Mòd has led 78% to believe more strongly in the importance of Gaelic. For 64% it has increased their awareness and 60% their understanding of Gaelic arts. It has encouraged 67% to improve their Gaelic language skills and 65% to use Gaelic more often. For 53% it has enhanced their Gaelic skills. 4.4 In addition to these findings, the RNM attracts significant publicity. The RNM in Oban in 2025 was broadcast live by BBC Alba over the week, and media coverage across 2024 included national and local press, tv, radio and social media. 4.5 There are strong reasons for the Council supporting a future RNM in Argyll and Bute. These are as follows to: • Ensure the sustainability of the Gaelic language through support for the showpiece event; • Promote high level media coverage of the only significant national cultural event held in Argyll and Bute; • Ensure that the event can be held in Argyll and Bute and thus generate significant economic benefit to the towns where it is held; • Support the wide range of cultural activities which take place during Mòd week; • Promote the provision of high quality competitions in Gaelic music, drama and arts; • Promote the development of the Gaelic language through the wide range of school choirs participating in the National Mòd events; • To maintain a long-standing Scottish tradition. 4.6 The current SLA expires in March 2025. In the absence of any further agreements being in place with the RNM for Argyll and Bute to host a future Page 355
Page 356
RNM as part of the systematic national circuit, An Comunn have asked if Argyll and Bute would wish to host the RNM 2028. Lochaber are due to host the RNM in 2025, Glasgow in 2026 and Western Isles in 2027. 4.7 Following initial discussions with An Comunn in regard to the possibility of Argyll and Bute hosting a future RNM, An Comunn have asked if Argyll and Bute Council would consider Oban as a venue for the 2028 event based on the success of last year’s RNM in the town. This success was due to the strength of the local organising committee, the infrastructure, accommodation and venues. There are other towns which could be considered such as Dunoon where it has been held previously however the successes of any RNM relies on the factors described, including transport infrastructure. 4.8 If the Council is minded to host the RNM in 2028, funding support will be required to secure this. An Comunn’s request is for up to £200k however this amount is open to discussion alongside the in-kind support which has previously been provided as described the paragraph below. A new agreement will require to be drafted between both parties in regard to the hosting in 2028 RNM, and also to confirm the provision of the necessary funding support. 4.9 The An Comunn Board meet in March 2025 and have requested that the Council provide an in principle decision by this date. This is to enable An Comunn to programme in the location of RNMs going forward, with other towns having expressed a preference for the years 2029 and 2030. 4.10 In the previous SLA, an in-kind payment was included to provide Corran Halls and staff costs free of change to An Comunn, and this would also need to be considered going forward. Based on last years event, the estimated cost of venue provision is considered to be in the region of £25K. 4.11 An Comunn has advised that the use of Live Argyll venues for the RNM in 2028 would be critical to the success of the event. Without this being provided at no cost to the RNM it would be unlikely that the RNM would be able to cover the venue and associated staff support costs from within their own budget. The Council will therefore require to work with Live Argyll to secure this and to include this within an agreement with Live Argyll and in the agreement with An Comunn. 5.0 CONCLUSION 5.1 Over the last ten years the Council has hosted three very successful RNMs, the first being in Oban in 2015, then Dunoon in 2018 and recently Oban in 2024. These events provided a successful economic stimulus within the area and greatly contributed to supporting our Gaelic language and culture. 5.2 Council budget is required to support the RNM in 2028. It is therefore recommended that P&R provide an in principle decision to accept An Comunn’s offer and the associated funding for both An Comunn and Live Argyll. This will enable officers to proceed with further discussions with these parties to bring Page 356
Page 357
forward any conclusions and reports required to secure the offer from An Comunn. 6.0 IMPLICATIONS 6.1 Policy - The provision of support to the RNM fits with the Council’s Gaelic Plan and specifically the Council recognises the cultural and educational significance of supporting the development of the Gaelic language and the provision of local and national Mòd event. The economic impact and promotion of the area fit with the Argyll and Bute Economic Strategy. 6.2 Financial – Up to 200k + £25K. 6.3 Legal – A new agreement/SLA will require to be drafted. 6.4 HR – Resource will be required to manage this process however this is currently managed from existing staff. 6.5 Fairer Scotland Duty - None 6.5.1 Equalities – An Comunn will comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations as part of any Agreement. 6.5.2 Socio-economic Duty – The RNM will support economic growth of the area including a positive contribution to areas of disadvantage. 6.5.3 Islands – None. 6.6 Climate Change – Consideration of this will be a condition of any Agreement with An Comunn. 6.7 Risk – Risk is that if Argyll and Bute does not host a RNM then the benefits of the RNM outlined are not accrued to Argyll and Bute. 6.8 Customer Service – None. 6.9 The Rights of the Child (UNCRC) – None. Kirsty Flanagan, Executive Director with overall responsibility for Development and Economic Growth 5th February 2025 Councillor Math Campbell-Sturgess, Policy Lead for Business Development For further information contact: Fergus Murray, Head of Development and Economic Growth fergus.murray@argyll-bute.gov.uk Page 357
Page 358
APPENDICES 1. Royal National Mòd 2024 Evaluation Report 2. Appendix 1 RNM Oban 2024 Photos Page 358
Page 359
Page 359
Page 360
TOURISM RESOURCES COMPANY Management Consultancy and Research Services 20 FINTRY CRESCENT, BISHOPBRIGGS, GLASGOW G4 1SH Tel: 0141-353 1143 Email: info@tourism-resources.co.uk www.tourism-resources.co.uk Royal National Mòd 2024 Evaluation November 2024 Page 360
Page 361
TABLE OF CONTENTS Page 1 introduction 1 1.1 Background 1 1.2 Objectives 1 1.3 Funding 1 1.4 Report Structure 1 2 Survey Results 2 2.1 Introduction 2 2.2 Visitor Profile 2 2.3 Awareness of Event 2 2.4 Competitors 3 2.5 Accommodation 3 2.6 Rating of Event 4 2.7 Visitor Attendance at the Event 5 2.8 Oban Aspects Engaged With 7 2.9 Rating of Oban 7 2.10 Online Participation 8 2.11 Gaelic Skills and Social Impacts 9 2.12 Other Comments 12 3 Economic Impact Assessment 13 3.1 Introduction 13 3.2 Economic Impact Assessment Method 13 3.3 Visitors 13 3.4 Expenditure 14 3.5 Gross to Net 15 3.6 Before/After The Mòd 16 Page 361
Page 362
3.7 Guests, Officials, Volunteers, Media and Traders 16 3.8 Organiser’s Expenditure 16 3.9 Total Net Additional Direct Expenditure 17 3.10 Output, GVA and Employment 17 3.11 Return on Investment 17 4 Conclusions 18 4.1 Introduction 18 4.2 Visitor Profile 18 4.3 Views on the Event 18 4.4 Views on Oban 19 4.5 Online Participation 19 4.6 Gaelic Skills and Social Impacts 19 4.7 Other Comments 20 4.8 Economic Impacts 20 Page 362
Page 363
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -1- 1 INTRODUCTION This report provides an evaluation of the Royal National Mòd 2024. 1.1 Background The Royal National Mòd is organised by An Comunn Gàidhealach (The Highland Association) which was founded in Oban in 1891. Famous for celebrating Gaelic linguistic and cultural heritage, Scotland’s premier Gaelic festival provides opportunities for people of all ages to perform across a range of competitive disciplines including Gaelic music and song, highland dancing, instrumental, drama, sport and literature. This year’s Festival took place from 11th to 19th October 2024 in Oban. 1.2 Objectives The objectives of the evaluation are to allow the Client to report back to funders, assess the economic impact of the Festival and to gather feedback to inform future delivery. 1.3 Funding Total public sector funding was £429,520 comprising: Argyll & Bute Council (£140,000); Bòrd na Gàidhlig (£133,250); Scottish Government (£132,000); EventScotland (£20,000); and Creative Scotland (£4,000). 1.4 Report Structure The remainder of this report is structured as follows: Chapter 2: Survey Results; Chapter 3: Economic Impact Assessment; and Chapter 4: Conclusions. Page 363
Page 364
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -2- 2 SURVEY RESULTS 2.1 Introduction This Chapter provides analysis of the visitor survey, which was conducted online after the event. A total of 464 surveys were completed, giving a standard error of +/-4.5% (robust for economic impact purposes). 2.2 Visitor Profile A total of 74% of adult visitors were female, 24% male and 1% identify in another way. The table below outlines the age range of adult visitors with the most common age groups being 45-54 (26%) and 65-74 (20%). Age Range of Adult Visitors Age Bands % 16-25 5% 26-34 5% 35-44 17% 45-54 26% 55-64 17% 65-74 20% 75+ 9% Total 100% 2.3 Awareness of Event How people found out about the Mòd 2024 is given in the table below. How They Found Out About The Mòd 2024 Sources % Have always known about the Mòd 61% Have attended the Mòd previously 50% Word of mouth 31% An Comunn Website 27% Social media 20% Mòd competition online programme 15% Mòd competition printed programme 11% Mòd fringe printed programme 8% Mòd fringe online programme 7% Social media advertising 7% Radio/television 7% Newspaper/magazine 6% Other 3% Other website 1% School 1% I was passing by <1% Page 364
Page 365
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -3- The most common ways of finding out were having always known about the Mòd (61%), attended previously (50%), word of mouth (31%), An Comunn website (27%) and social media (20%). The most common ways to buy tickets were online (59%) and at venues during the event (35%). Those stating ‘other’ were where someone else had bought the tickets. Main Method for Buying Tickets Method % Online 59% At venue(s) during the event 35% At venue(s) in advance of event 6% Other <1% Total 100% 2.4 Competitors A total of 30% of respondents had competed at the Mòd 2024. Just over three- quarters (76%) were part of a choir and 19% were a solo performer. 2.5 Accommodation Of those who required an overnight stay, the most common types of accommodation were hotel (42%), self-catering (26%) and guest house/B&B (15%). Page 365
Page 366
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -4- 2.6 Rating of Event Ratings for different aspects of the event are given in the table below. Rating of the Event Very Good Good Average Poor Very Poor Organisation 59% 31% 8% 1% 1% Competition venues 48% 37% 12% 3% - Information 41% 40% 15% 3% 1% Mòd Fringe events 56% 34% 9% <1% <1% Buzz / overall atmosphere 71% 23% 6% 1% - The event is highly thought of with ratings of very good/good for buzz/overall atmosphere (94%), organisation (90%), fringe events (90%), competition (85%) and information (82%). The most commonly suggested improvements to the event in the future were: Corran Halls need improvements (2%); Some more translations to English (2%); and Online booking needs improvements (2%). A total of 92% stated that they were very likely/likely to recommend the Mòd to friends/family. 42% 26% 15% 10% 3% 3% 1% Type of Accommodation Page 366
Page 367
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -5- 2.7 Visitor Attendance at the Event Larger proportions attended later in the week. Four-fifths had attended at least one previous Mòd in the last 10 years. 61% 31% 5% 2% 1% Very Likely Likely Neither Likely nor Unlikely Unlikely Very Unlikely Recommend the Mòd to Friends/Relatives 25% 29% 20% 38% 50% 56% 63% 58% 42% Fri 11th Sat 12th Sun 13th Mon 14th Tue 15th Wed 16th Thu 17th Fri 18th Sat 19th Days Attended Page 367
Page 368
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -6- Of returning visitors, just under two-thirds (66%) considered this year’s event as much better/better, with 31% reporting it was of the same quality as in previous years. A total of 90% stated that they are very likely/likely to attend the Mòd 2025 in Fort William. 58% 50% 33% 31% 49% 44% 47% 38% 46% 38% 20% Attendance at Previous Mòds 32% 34% 31% 3% 0% Much better Better On a par with Poorer Much poorer Mòd 2024 Compared to Previous Years Page 368
Page 369
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -7- 2.8 Oban Aspects Engaged With Almost all (98%) visited local restaurants/cafes/pubs, 90% local shops and 78% local visitor attractions/places of interest. 2.9 Rating of Oban Ratings for different aspects of Oban are given in the table, over. 70% 20% 5% 3% 2% Very Likely Likely Neither Likely nor Unlikely Unlikely Very Unlikely Attend Next Year’s Mòd in Fort William 98% 90% 78% Local restaurants / cafes /pubs Local shopping Local visitor attractions / places of interest Oban Aspects Engaged With Page 369
Page 370
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -8- Rating of Oban Very Good Good Average Poor Very Poor Oban as host destination 80% 16% 4% 1% - Local shopping 42% 42% 14% 2% 1% Local restaurants/cafes/pubs 57% 34% 8% <1% - Accommodation 48% 35% 13% 2% 1% Local visitor attractions/ places of interest 49% 42% 9% 1% - Oban is highly thought of with 96% rating it very good/good as a host destination. Different aspects are also highly rated as very good/good for local restaurants/cafes/pubs (92%), local visitor attractions/places of interest (91%), accommodation (84%) and local shopping (83%). A total of 86% said they were very likely/likely to return to Oban for a future leisure visit. 2.10 Online Participation For those engaging online, 14% competed online, 69% watched live streaming and 17% did both. 56% 30% 10% 3% 0.5% Very Likely Likely Neither Likely nor Unlikely Unlikely Very Unlikely Return to Oban for a Future Leisure Visit Page 370
Page 371
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -9- A total of 69% would have taken part in the Mòd anyway, even if it hadn’t been available online. Engaging Online % Made me want to go to the Mòd in 2025 75% Made we want to get more involved in Gaelic culture in the future 42% Raised my awareness of Gaelic culture 25% Allowed me to participate even though I could not travel to Oban 8% Allowed our local group / choir to take part even though we could not travel to Oban 8% Engaging online made three-quarters want to go to the Mòd in 2025 and 42% to get more involved in Gaelic culture in the future. For a quarter it raised their awareness of Gaelic culture. For a small proportion 8% it allowed them to participate and for 8% their local choir to participate. 2.11 Gaelic Skills and Social Impacts All respondents were asked about their Gaelic language skills. A total of 35% of respondents considered themselves to be a fluent Gaelic speaker, with 29% stating that they had some/limited knowledge Page 371
Page 372
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -10- A further 17% described themselves as a learner and 5% as an enthusiast/novice. Only 13% said that they did not speak any Gaelic. Mòd Impacts on Gaelic Strongly agree Agree Neither Agree/ Disagree Disagree Strongly disagree Encouraged me to improve my Gaelic language skills 37% 30% 28% 4% 2% Increased my awareness of Gaelic arts 30% 34% 33% 3% 1% Increased my understanding of Gaelic arts 27% 32% 36% 3% 1% Encouraged me to use Gaelic more often 33% 33% 27% 6% 2% Enhanced my Gaelic skills 24% 30% 36% 8% 3% Led me to believe more strongly that Gaelic is important in Scotland 50% 28% 19% 2% 1% The Mòd has led 78% to believe more strongly in the importance of Gaelic. For 64% it has increased their awareness and 60% their understanding of Gaelic arts. It has encouraged 67% to improve their Gaelic language skills and 65% to use Gaelic more often. For 53% it has enhanced their Gaelic skills. How often respondents participate in Gaelic cultural events/activities is given in the figure, over. Page 372
Page 373
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -11- Just over two-thirds (67%) participate at least once every three months. The Mòd has inspired 72% of respondents to attend Gaelic events/activities more frequently. The Mod is beneficial to the mental health of 71%, encourages 75% to engage socially and for 80% is a great way to meet friends. 30% 42% 24% 3% 1% Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree Inspired to Attend Gaelic Events / Activities More Frequently Page 373
Page 374
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -12- Health and Social Impacts Strongly agree Agree Neither Agree/ Disagree Disagree Strongly disagree Been beneficial to my mental health 35% 36% 26% 3% 1% Encouraged me to engage socially 37% 38% 23% 2% 1% Been a great way to meet friends 48% 32% 17% 2% 1% 2.12 Other Comments Respondents were asked if there were any other comments they would like to make about the event. The most common were: Fantastic/great/enjoyable event (15%); Oban a great location for the Mòd (9%); Great organisation (5%); Friendly/helpful staff/volunteers (5%); Great buzz/atmosphere (5%); and Oban great as everything in walking distance/close together (4%). Page 374
Page 375
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -13- 3 ECONOMIC IMPACT ASSESSMENT 3.1 Introduction This Chapter provides an assessment of the economic impact of The Mòd. 3.2 Economic Impact Assessment Method The approach to the economic impact assessment is given in the figure below. Economic Impact Assessment Method 3.3 Visitors 3.3.1 Visitor Numbers The event organisers have provided us with the total number of competitors at the event which was 2,718. From the survey we can then calculate a ratio of competitors to spectators. This was 2.29, which equates to 6,215 spectators. This gives a total of 8,933 visitors. Page 375
Page 376
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -14- Number of Visitors Number % Day 1,787 20% Overnight 7,146 80% Total 8,933 100% The pattern of spectator behaviour varies by day and overnight visitor, and by origin, therefore these have been analysed separately in order to derive the economic impact. Visitors by Type and Origin Day Overnight Argyll & Bute 16.0% 10.5% Elsewhere in Scotland 4.0% 63.0% Elsewhere in UK - 1.8% Overseas - 4.8% Total 20.0% 80.0% The most common origin for visitors was from Elsewhere in Scotland (67%). The most common local authority areas were Argyll & Bute (27%), Highland (17%), Comhairle nan Eilean Siar (17%), Glasgow (7%) and Edinburgh (5%). 3.4 Expenditure The average daily expenditure for visitors is shown in the table below. Average Daily Expenditure Day Overnight Argyll & Bute £19.34 £107.55 Elsewhere in Scotland £19.07 £114.55 Elsewhere in UK - £108.50 Overseas - £99.92 The average length of stay for overnight visitors is given in the table below. Average Length of Stay Argyll & Bute Argyll & Bute 2.9 Elsewhere in Scotland 3.6 Elsewhere in UK 3.7 Overseas 4.1 Page 376
Page 377
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -15- Gross expenditure is calculated as follows: Ge = ndv.edv + nov.eov.al Where Ge gross expenditure ndv number of day visitors edv average daily expenditure of day visitors nov number of overnight visitors eov average daily expenditure of overnight visitors al average length of stay Applying the formula gives gross expenditure of £2,918,100. 3.5 Gross to Net Calculating the net impact of the event, which is the true measure of the economic benefit to Argyll & Bute, requires taking account of: Deadweight; Leakage; Displacement; and Multiplier effects. Deadweight The event required public sector funding for it to take place so the level of deadweight is zero. Leakage Expenditure that takes place outside the geographic area at which the economic impact is being assessed is leakage. The level of leakage has been considered throughout the calculation process, based on where the expenditure of visitors and the event organisers has taken place. Displacement Displacement is a measure of the extent to which the event has simply moved expenditure from one part of the economy to another (i.e. removal of casual visitors). The following information has been used from the survey to calculate the displacement levels: Page 377
Page 378
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -16- Visitor origin; Importance of the event in the decision to visit the area; and Counterfactual i.e. what visitors would have done in the absence of the event. Displacement (%) Day Argyll & Bute 94 Elsewhere in Scotland 0 Overnight Argyll & Bute 93 Elsewhere in Scotland 4 Elsewhere in UK 14 Overseas 16 Taking account of leakage and displacement gives net direct additional expenditure of £2,405,466. 3.6 Before/After The Mòd Some visitors stayed in Argyll & Bute before and/or after the Mod. Following the processes above gives net direct additional expenditure of £115,169. 3.7 Guests, Officials, Volunteers, Media and Traders There is also expenditure from guests, officials, volunteers, media and traders1 visiting the local area. Following the same processes as set out above gives net additional expenditure of £40,812. 3.8 Organiser’s Expenditure The event organiser’s expenditure has been assessed on the basis of: The total income generated by the event and where it came from; Where the money was spent geographically; and The net effect of that expenditure on the economy. The total organiser’s expenditure was £549,442, based on data provided by the event organisers2. 1 Temporary onsite traders. 2 Includes staff and overheads. Page 378
Page 379
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -17- The income for the event sourced from Argyll & Bute was £158,342, whilst the expenditure in Argyll & Bute was £145,000. The net organiser’s spend in Argyll and Bute was -£13,342. 3.9 Total Net Additional Direct Expenditure The total net direct additional expenditure is £2,548,104. Net Additional Direct Expenditure Visitors £2,405,466 Stay Before/After £115,169 Guests, Officials, Volunteers, Media & Traders £40,812 Event Organisers -£13,342 Total £2,548,104 3.10 Output, GVA and Employment The following factors were used to translate this expenditure into output, GVA and employment. Conversion Factors Factors Output 1.42 GVA:Ouput 0.53 Employment £57,000 This gives net additional impacts as set out in the table below. Net Additional Impacts Impacts Output £3,618,308 Gross Value Added £1,910,935 FTEs 63 3.11 Return on Investment The return on investment for the funders is given in the table below. Return on Investment Argyll and Bute Council £1:£26 Bòrd na Gàidhlig £1:£27 Scottish Government £1:£27 EventScotland £1:£181 Creative Scotland £1:£905 Page 379
Page 380
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -18- 4 CONCLUSIONS 4.1 Introduction This Chapter provides the conclusions for the study. 4.2 Visitor Profile A total of 74% of visitors were female, 24% male and 1% identify in another way. The most common age groups for adult visitors were 45-54 (26%) and 65-74 (20%). The most common local authority areas were Argyll & Bute (27%), Highland (17%), Comhairle nan Eilean Siar (17%), Glasgow (7%) and Edinburgh (5%). The most common ways in which visitors found out about the event were having always known about the Mòd (61%), attended previously (50%), word of mouth (31%), An Comunn website (27%) and social media (20%). The most common ways to buy tickets were online (59%) and at venues during the event (35%). The most common forms of accommodation were hotel (42%), self-catering (26%) and guest house/B&B (15%). 4.3 Views on the Event The event was highly thought of with ratings of very good/good for buzz/overall atmosphere (94%), organisation (90%), fringe events (90%), competition (85%) and information (82%). A total of 92% are very likely/likely to recommend the Mòd to friends/family. The most commonly suggested improvements were that the Corran Halls need improvements, some more translations to English and online booking needs improvements (all 2%). Four-fifths had attended at least one Mòd in the last 10 years. Of returning visitors, just under two-thirds (66%) considered this year’s event as much better/better, with 31% reporting it was of the same quality as in previous years. A total of 90% stated that they are very likely/likely to attend The Mòd 2025 in Fort William. Page 380
Page 381
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -19- 4.4 Views on Oban Almost all (98%) visited local restaurants/cafes/pubs, 90% local shops and 78% local visitor attractions/places of interest. Oban is highly thought of with 96% rating it very good/good as a host destination. Different aspects are also highly rated as very good/good for local restaurants/cafes/pubs (92%), local visitor attractions/places of interest (91%), accommodation (84%) and local shopping (83%). A total of 86% said they are very likely/likely to return to Oban for a future leisure visit. 4.5 Online Participation A total of 69% watched live streaming and 14% competed online, with the remaining 17% doing both. A total of 69% would have taken part in the Mòd anyway, even if it hadn’t been available online. Engaging online made three-quarters want to go to the Mòd in 2025 and 42% to get more involved in Gaelic culture in the future. For a quarter it raised their awareness of Gaelic culture. For a small proportion of 8% it allowed them to participate and for 8% their local choir to participate. 4.6 Gaelic Skills and Social Impacts A total of 35% of respondents considered themselves to be a fluent Gaelic speaker, with 29% stating that they had some/limited knowledge. A further 17% described themselves as a learner and 5% as an enthusiast/novice. Only 13% said that they did not speak any Gaelic. The Mòd has led 78% to believe more strongly in the importance of Gaelic. For 64% it has increased their awareness and 60% their understanding of Gaelic arts. It has encouraged 67% to improve their Gaelic language skills and 65% to use Gaelic more often. For 53% it has enhanced their Gaelic skills. Just over two-thirds (67%) participate at least once every three months in Gaelic cultural events/activities. The Mòd has inspired 72% to attend Gaelic events/activities more frequently. The Mod is beneficial to the mental health of 71%, encourages 75% to engage socially and for 80% is a great way to meet friends. Page 381
Page 382
Royal National Mòd 2024 Tourism Resources Company Evaluation November 2024 -20- 4.7 Other Comments Respondents were asked if there were any other comments they would like to make about the event. The most common were fantastic/great/enjoyable event (15%), Oban a great location for the Mòd (9%), great organisation (5%), friendly/helpful staff/volunteers (5%), great buzz/atmosphere (5%); and Oban great as everything in walking distance/close together (4%). 4.8 Economic Impacts Total visitor attendees was 8,933. A total of 74% of visitors were from outside Argyll & Bute and 80% stayed overnight. The economic impacts are summarised in the table below. Net Additional Impacts Argyll & Bute Net Direct Expenditure £2,548,104 Output £3,618,308 GVA £1,910,935 Employment (FTEs) 63 The ROIs are given in the table below. Return on Investment Argyll and Bute Council £1:£26 Bòrd na Gàidhlig £1:£27 Scottish Government £1:£27 EventScotland £1:£181 Creative Scotland £1:£905 Page 382
Page 383
Royal National Mòd Oban 2024 Massed Choirs and Flag Ceremony, Station Square Fringe Event - Highland Art Prize Exhibition, Rockfield Centre BBC Alba, Corran Halls Page 383
Page 384
This page is intentionally left blank
Page 385
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 13 February 2025 Financial Report Monitoring Pack 8. Financial Services Every meeting except May 14 January 2025 9. Budget 2025-2026 Financial Services 10. Treasury Management Strategy and Annual Investment Strategy Financial Services 11. UK Shared Prosperity Fund 2025-26 Development and Economic Growth 12. Argyll and Bute Flexible Food and Fuel Fund Financial Services 13. Supporting Communities Fund Chief Executive 14. Sustainable Procurement Strategy 2025-2028 Legal and Regulatory Support Equality Outcomes 2025/26 Customer Support Services 15. Lochgilphead CARS Development and Economic Growth 16. Community Regeneration Partnership Funding Development and Economic Growth 17. Crown Estates Funding Allocation Development and Economic Growth 18. Strategic Events And Festivals Fund – Round 7 2025/2026 Development and Economic Growth 19. Royal National MOD 2028 20. Page 385 Agenda Item 17
Page 386
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 21. Report Title Dept/Section How Often? Date Due Comments 8 May 2025 22. Budget Outlook 23. Financial Services 8 April 2025 Date 24. Report Title Dept/Section How Often? Date Due Comments August 2025 Financial Report Monitoring Pack 25. Financial Services Every meeting except May 26. Budget Outlook Financial Services Community Empowerment (Scotland) Act 2015 – Update on Expressions of Interest / Asset Transfer Requests 27. Commercial Services Date Report Title Dept/Section How Often? Date Due Comments October 2025 Financial Report Monitoring Pack Financial Services Every meeting except May Budget Outlook Financial Services Argyll And Bute Uk Shared Prosperity Fund Investment Plan Development and Economic Growth Date Report Title Dept/Section How Often? Date Due Comments December 2025 Financial Report Monitoring Pack Financial Services Every meeting except May Budget Outlook Financial Services Page 386
Page 387
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 UK Shared Prosperity Fund – Argyll and Bute Investment Plan Development and Economic Growth Regular updates to be provided. Agreed 11.08.2022 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. Crown Estate Allocation Development and Economic Growth Report to come with 2025/26 allocation. Page 387
Page 388
This page is intentionally left blank