Agenda reports pack
Argyll and Bute Council · 10 October 2024
Back to Policy and Resources Committee — 10 October 2024 and its agenda
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Argyll and Bute Council Comhairle Earra-Ghàidheal Agus Bhòid Executive Director: Douglas Hendry Kilmory, Lochgilphead, PA31 8RT Tel: 01546 602127 Fax: 01546 604435 DX 599700 LOCHGILPHEAD 3 October 2024 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, 10 OCTOBER 2024 at 10:30 AM, which you are requested to attend. Douglas Hendry Executive Director BUSINESS 1. APOLOGIES FOR ABSENCE 2. DECLARATIONS OF INTEREST (IF ANY) 3. MINUTES (Pages 3 - 12) Policy and Resources Committee held on 15 August 2024 * 4. FINANCIAL REPORTS MONITORING PACK - 31 AUGUST 2024 (Pages 13 - 144) Report by Section 95 Officer 5. BUDGET OUTLOOK 2025-26 TO 2029-30 (Pages 145 - 168) Report by Section 95 Officer 6. SINGLE AUTHORITY MODEL - UPDATE (Pages 169 - 176) Report by Chief Executive 7. ANNUAL COUNCIL BUSINESS PLAN 2023-24 OUTCOMES (Pages 177 - 202) Report by Chief Executive 8. COUNCIL COMMUNICATION STRATEGY 2024 - 2027 (Pages 203 - 220) Report by Executive Director with responsibility for Customer Support Services 9. ARGYLL AND BUTE COUNCIL BRITISH SIGN LANGUAGE PLAN 2024 - 2030 (Pages 221 - 234) Report by Executive Director with responsibility for Customer Support Services Public Document Pack
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10. LORN ARC TAX INCREMENTAL FINANCE PROGRAMME - OBAN AIRPORT BUSINESS PARK - UPDATE (Pages 235 - 244) Report by Executive Director with responsibility for Commercial Services and Executive Director with responsibility for Development and Economic Growth REPORT FOR NOTING 11. POLICY AND RESOURCES COMMITTEE WORKPLAN (Pages 245 - 248) 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. Policy and Resources Committee Councillor John Armour Councillor Gordon Blair Councillor Math Campbell-Sturgess Councillor Audrey Forrest (Vice-Chair) Councillor Kieron Green Councillor Amanda Hampsey Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Jim Lynch (Chair) Councillor Luna Martin Councillor Liz McCabe Councillor Dougie McFadzean Councillor Yvonne McNeilly Councillor Ross Moreland Councillor Gary Mulvaney Councillor Dougie Philand Contact: Hazel MacInnes, Senior Committee Officer Tel:01546 604269
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MINUTES of MEETING of POLICY AND RESOURCES COMMITTEE held ON A HYBRID BASIS IN THE COUNCIL CHAMBER, KILMORY, LOCHGILPHEAD AND BY MICROSOFT TEAMS on THURSDAY, 15 AUGUST 2024 Present: Councillor Jim Lynch (Chair) Councillor John Armour Councillor Gordon Blair Councillor Math Campbell-Sturgess Councillor Audrey Forrest Councillor Kieron Green Councillor Amanda Hampsey Councillor Mark Irvine Councillor Reeni Kennedy-Boyle Councillor Luna Martin Councillor Dougie McFadzean Councillor Yvonne McNeilly Councillor Ross Moreland Councillor Gary Mulvaney Councillor Dougie Philand Also Present: Councillor Jan Brown Councillor Maurice Corry Councillor Anne Horn Councillor Fiona Howard Councillor Tommy MacPherson Councillor Gemma Penfold Councillor Andrew Vennard Councillor Peter Wallace Attending: Pippa Milne, Chief Executive Douglas Hendry, Executive Director Kirsty Flanagan, Executive Director Anne Blue, Head of Financial Services Fergus Murray, Head of Development and Economic Growth Jim Smith, Head of Roads and Infrastructure Services Ross McLaughlin, Head of Commercial Services Jane Fowler, Head of Customer and Support Services Fergus Walker, Revenues and Benefits Manager Shona Barton, Governance Manager 1. APOLOGIES FOR ABSENCE Apologies for absence were received from Councillor Liz McCabe. The Chair referred to a request received from Councillor Andrew Vennard under Standing Order 22.1 to speak and vote in relation to item 12 (Rural Growth Deal – Update on Detailed Design Costs) and item 18 (October 2023 Weather Event – Update) of the agenda. The Chair advised that as the matters dealt with at these items related to issues of a strategic nature across the wider Council area and did not relate to a particular issue affecting Councillor Vennard’s ward, he was unable to grant this request but advised that he could participate in any general discussion on those items. 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 Thursday 9 May 2024 were approved as a correct record. Page 3 Agenda Item 3
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* 4. FINANCIAL REPORTS MONITORING PACK - 30 JUNE 2024 The Committee gave consideration to a report providing a summary of the financial monitoring reports as at the end of June 2024. Decision The Policy and Resources Committee – 1. noted the revenue budget monitoring report as at 30 June 2024; 2. noted the financial risks for 2024-25; 3. noted the capital plan monitoring report as at 30 June 2024 and approved the proposed changes to the capital plan as outlined in Appendix 4 of that report; 4. noted the treasury monitoring report as at 30 June 2024; 5. noted the reserves and balances report as at 30 June 2024; 6. noted that there were no revenue virements over £0.200m between April and June 2024; and 7. agreed to recommend to Council that the revenue budget virement over £0.200m outstanding from 2023-24 be approved, per paragraph 2.6.3 of the submitted report. (Reference: Report by Section 95 Officer dated 6 August 2024, submitted) 5. BUDGET OUTLOOK (a) BUDGET OUTLOOK 2025/26 TO 2029-30 The Committee gave consideration to a report providing an update to the budget outlook covering the period 2025-26 to 2029-30 as reported to the Policy and Resources Committee on 9 May 2024. Decision The Policy and Resources Committee noted the current estimated budget outlook position for the period 2025-26 to 2029-30. (Reference: Report by Section 95 Officer dated 23 July 2024, submitted) (b) EDUCATION NETWORK TRANSFORMATION PROGRAMME The Committee gave consideration to a report detailing the technical and security challenges and investment required to transform and modernise the education network to improve service delivery and implement the local and national education strategies for digital learning whilst mitigating increased cyber threats. Decision The Policy and Resources Committee – Page 4
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1. noted the need for the Education Service to deliver service improvements in Argyll and Bute and broaden available curriculum offerings across schools through digital learning provision; and noted that Option 2 would transform and modernise the education network to deliver the same level of security, equity and flexibility to education users as corporate network users; 2. noted the increased security threats and business continuity risks to the education and corporate networks by retaining the education network in its present state; 3. noted the optimum approach was a combined use of technologies which could not be considered in isolation, with associated ICT resources to deploy and maintain this more complex environment; and noted there was no scope to only implement certain aspects highlighted in the paper as all were interlinked; 4. noted that a total of £81,500 had already been secured from the ICT capital programme for investment in the education network in 2024/25 and 2025/26, and that a further capital investment of £245,550 and annual revenue investment of £295,000 was required to fund option 2 in 2025-26 and 2026-27 rising to £348,000 from 2027-28 onwards; and noted this represented an overall saving in year 1 of £1,692,900 against option 1; 5. agreed the allocation of identified education earmarked reserves of £460,000 in addition to reallocation of an estimated £60,000 underspend from the school wifi improvement project fund, reducing the year 1 capital and revenue requirement to £20,550; 6. agreed the annual revenue requirement for specialist software licensing of £180,000 in 2025-26 and 2026-27, rising to £233,000 from 2027-28 onwards, as a future cost pressure to the education service; and 7. agreed the annual revenue requirement for additional engineering resource of £115,000 as a future cost and demand pressure for ICT; noting that any pay uplifts associated with the new posts would be included as part of the routine salary budget setting process. (Reference: Report by Executive Director with responsibility for Education and Executive Director with responsibility for Customer Support Services dated July 2024, submitted) 6. CORPORATE DEBT RECOVERY POLICY 2024 The Committee gave consideration to a report introducing an update to the Council’s Corporate Debt Recovery Policy. Decision The Policy and Resources Committee approved – 1. the updated Corporate Debt Recovery Policy detailed at Appendix 1; and 2. the Vulnerability and Hardship Protocol detailed at Appendix 2. Page 5
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(Reference: Report by Executive Director with responsibility for Financial Services dated 9 July 2024, submitted) 7. NATIONAL CARE SERVICE: STAGE 2 SCRUTINY: CALL FOR VIEWS The Committee gave consideration to a report outlining a proposed response to the Scottish Parliament’s Health, Social Care and Sport Committee Call for Views as part of its Stage 2 Scrutiny of the National Care Service (Scotland) Bill. Decision The Policy and Resources Committee agreed – 1. the draft response detailed at Appendix 1; and 2. that officers arrange for the approved response to be submitted by the 30 August 2024 deadline. (Reference: Report by Executive Director with responsibility for Legal and Regulatory Support dated 24 July 2024, submitted) 8. REDIRECTION OF CROWN ESTATES FUNDING The Committee gave consideration to a report seeking approval to redirect Crown Estates Funding previously approved for solar powered CCTV on the island airports of Coll and Colonsay, towards the purchase of a new fire appliance vehicle. Decision The Policy and Resources Committee agreed to redirect the Crown Estates Funding previously awarded for the provision of solar powered CCTV at the island airports of Coll and Colonsay, towards the provision of a backup fire appliance vehicle, to meet Civil Aviation Regulations in the provision of fire cover at island licensed airports. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated July 2024, submitted) 9. UPDATE: ARGYLL AND BUTE UK SHARED PROSPERITY FUND INVESTMENT PLAN INTERVENTIONS The Committee gave consideration to a report providing an update on the progress of the Argyll and Bute UK Shared Prosperity Fund Investment Plan project / programme interventions that were being delivered across Argyll and Bute. Decision The Policy and Resources Committee – 1. noted the content of the submitted report and the progress made; and 2. agreed that officers engage with the UK Government on the requirement for some clarity on future funding streams, such as the UK Shared Prosperity Fund, in light of the recent change of the UK Government. Page 6
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(Reference: Report by Executive Director with responsibility for Development and Economic Growth dated 1 August 2024, submitted) 10. SCOTTISH GOVERNMENT ISLANDS PROGRAMME AND CARBON NEUTRAL ISLANDS CAPITAL FUNDING The Committee gave consideration to a report providing a background to the Scottish Government Islands Programme funding and advising of the proposed projects which would form the basis of applications to the Scottish Government. Decision The Policy and Resources Committee – 1. noted the process for applying to the Islands Programme and Carbon Neutral Islands Capital Fund and the 30 August 2024 deadline for applications; 2. approved the recommended projects which would be submitted to the call for applications as detailed at paragraph 4.7 and 4.10 of the submitted report; and 3. agreed to delegate authority to the Executive Director with responsibility for Development and Economic Growth in consultation with the Leader, Depute Leaders and the Leader of the largest Opposition Group, to approve the funding bids prior to submission to the Scottish Government and to manage the funding should the applications be successful. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated 15 July 2024, submitted) 11. ISLANDS COST CRISIS EMERGENCY FUND 2024/25 The Committee gave consideration to a report providing an overview of the proposed arrangements for the Islands Cost Crisis Emergency Fund in 2024/25. Decision The Policy and Resources Committee – 1. noted the funding announced by the Scottish Government for 2024/25 financial year for Local Authorities with responsibilities for islands; and 2. agreed that arrangements for the fund are the same as those initiatives agreed for 2023/24 and detailed in Table 1 of the submitted report to ensure that the support reaches communities as quickly and effectively as possible. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated August 2024, submitted) 12. RURAL GROWTH DEAL - UPDATE AND DETAILED DESIGN COSTS The Committee gave consideration to a report providing an update on the Rural Growth Deal which would deliver £50M of investment from the Scottish and UK Governments for projects that would be a driver for inclusive and transformational growth across the area. Page 7
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Decision The Policy and Resources Committee – 1. noted that a revised date for Full Deal Signing would be arranged once a new UK Government was formed; 2. approved a further drawdown of funding from the Inward Investment Fund (up to £150k), noting that similar to previous arrangements, funds would only be drawn down subject to the Chief Executive and two Executive Directors of the Council being satisfied that the monies were for the purpose of delivering the Rural Growth Deal; noting that any further funding required in excess of the approved value would require further approval from the Policy and Resources Committee; and 3. approved spend of up to £250k to support the next stage of project development for Kintyre Seasports, including Detailed Design works. (Reference: Report by Executive Director with responsibility for Development and Economic Growth dated June 2024, submitted) 13. DATA STRATEGY AND ACTION PLAN 2024 - 2028 The Committee gave consideration to a report presenting a new Data Strategy and Action Plan for 2024-2028 which would sit alongside the Council’s existing ICT and Digital Strategy for 2021-2024 and its forthcoming update for 2025-2028. Decision The Policy and Resources Committee – 1. endorsed the new Data Strategy and Action Plan for 2024-28, attached at Appendix 1 to the submitted report; and 2. recognised the value and importance of data for decision making. (Reference: Report by Executive Director with responsibility for Customer Support Services dated 15 August 2024, submitted) 14. COMMUNITY EMPOWERMENT (SCOTLAND) ACT 2015 - UPDATE - EXPRESSIONS OF INTEREST / ASSET TRANSFER REQUESTS / PARTICIPATION REQUESTS / REPORTING REQUIREMENTS The Committee gave consideration to a report advising on the operation of the processes in regard to Asset Transfer Requests and Participation Requests in terms of the Community Empowerment Act 2015 and updates on Asset Transfer Requests, Expressions of Interest and Participation Requests to date. Decision The Policy and Resources Committee noted the content of the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services dated 5 July 2024, submitted) Page 8
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15. COUNCIL CARBON EMISSIONS 2022/2023 The Committee gave consideration to a report highlighting the Council annual carbon emissions for the period 2022/23. Decision The Policy and Resources Committee noted – 1. the publication of the Council’s 2022/23 Public Bodies Climate Change Duties report, confirming a 6% decrease in emissions reported for the year, noting that the Council’s carbon footprint reduced by 1,705 tCO2e, from 28,217 tCO2e in 2021/22 to 26,512 tCO2e in 2022/23; and 2. the Full Decarbonisation Tracker update attached at Appendix A to the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services dated 15 August 2024, submitted) 16. CLIMATE CHANGE BOARD UPDATE The Committee gave consideration to a report providing various updates in respect of the Council’s activities in relation to climate change. Decision The Policy and Resources Committee – 1. agreed the proposal to vary / redistribute existing funding amounts allocated to three funding activities via the Scottish Government’s Nature Restoration Fund based on subscription and feedback from our schools; 2. noted the Council’s Officer-led response submitted to the Scottish Government’s draft Scottish National Adaptation Plan 3 public consultation; and 3. agreed to implement the Sustainable Scotland Network’s Leaders’ Climate Emergency Checklist to support the Council’s assessment and development of climate change capabilities, in line with SSN Guidance. (Reference: Report by Executive Director with responsibility for Commercial Services dated 15 August 2024, submitted) 17. SIMPLIFIED PLANNING ZONES: PROPOSED CLOSURE OF PROJECT The Committee gave consideration to a recommendation from the meeting of the Planning, Protective Services and Licensing Committee of 22 May 2024 in relation to the proposed closure of the Scottish Government Simplified Planning Zones Pilot Project. Decision The Policy and Resources Committee agreed to the closure of the Scottish Government Simplified Planning Zones Pilot Project and to the return of unspent monies to the Scottish Government. Page 9
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(Reference: Recommendation from Planning, Protective Services and Licensing Committee of 22 May 2024; and report by Executive Director with responsibility for Development and Economic Growth dated 7 February 2024, submitted) The Chair advised that in terms of Section 50(A)(4) of the Local Government (Scotland) Act 1973, Appendix A relating to the following item of business would require the exclusion of the press and public should any Member wish to discuss the content of those appendices on the grounds that it was likely to involve the disclosure of exempt information as defined in Paragraph 6 and 9 of Part 1 of Schedule 7A to the Local Government (Scotland) Act 1973. 18. OCTOBER 2023 WEATHER EVENT - UPDATE The Committee gave consideration to a report providing an update on the works that had been undertaken and completed and those that were ongoing in relation to the extreme weather event which occurred on the weekend of 7 October 2023. Decision The Policy and Resources Committee – 1. acknowledged the sheer scale and severity of the impact on local infrastructure during the storms of October 2023 and recognised the complexity and speed of the response delivered by the Council at pace to restore vital routes and reinstate access to cut-off communities; 2. noted the updates on works undertaken, completed and ongoing; 3. noted the revised forecast overspend of £3.853m that was currently unfunded; 4. agreed that the roads reconstruction schemes should continue and the overspend be funded as follows: £m Utilise some of the unallocated capital funding for street lighting and cable and column replacements 0.100 Use Priorities Investment Fund 0.944 Use Crown Estate Funding * 0.780 Borrowing for additional expenditure and use £50k in the loans fund for street lighting improvements towards the cost of borrowing** 2.029 Total 3.853 *It being noted that the Crown Estate Funding for 2024-25 had not been confirmed as yet and therefore requested the Section 95 Officer to advise Members by the end of the calendar year if funding had not been confirmed by that time or if funding confirmed was insufficient (further noting that £0.500m had already been confirmed as part of the 2024-25 budget). **It being noted that much of the overspend was revenue in nature and that the Council could not borrow for revenue expenditure. Further noting that the funding created from the additional borrowing would be substituted towards capital Page 10
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programme expenditure that was originally being funded by earmarked reserves and those earmarked reserves used for the weather related revenue expenditure. The cost to borrow was estimated to be £130k and £50k could be used from the loans fund revenue set aside for street lighting, leaving a net cost pressure of £80k that should be built into future years budget estimates. 5. recognised that local authorities require additional support to cope with increasingly challenging and unforeseen impacts of severe weather and climate change, especially for Argyll and Bute whose rural and island communities absolutely depend upon reliable lifeline routes and infrastructure, and therefore agreed to lobby for both the funding that was needed now, and effective forward/longer term planning which addresses the need to maintain and safeguard infrastructure resilience as a key contributor to growing, thriving local and national economies. (Reference: Report by Executive Director with responsibility for Roads and Infrastructure dated 5 August 2024, submitted; and Motion By Councillor Jim Lynch and seconded by Councillor Gary Mulvaney, tabled) 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. 19. HELENSBURGH WATERFRONT DEVELOPMENT (COMMERCIAL AREA) - UPDATE & SELECTION OF PREFERRED DEVELOPER The Committee gave consideration to a report providing an update on the Helensburgh Waterfront Development Commercial Area and the selection of a preferred developer. Decision The Policy and Resources Committee agreed the recommendations as per the submitted report. (Reference: Report by Executive Director with responsibility for Commercial Services dated 23 July 2024, submitted) 20. 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 15 August 2024. (Reference: Policy and Resources Committee Workplan dated 15 August 2024, submitted) Page 11
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 FINANCIAL REPORTS MONITORING PACK – 31 AUGUST 2024 1. INTRODUCTION 1.1 This report provides a summary of the financial monitoring reports as at the end of August 2024. There are five detailed reports, setting out the position as at 31 August 2024, which are summarised in this Executive Summary: Revenue Budget Monitoring Report Monitoring of Financial Risks Capital Plan Monitoring Report Treasury Monitoring Report Reserves and Balances 2. DETAIL 2.1 Revenue Budget Monitoring Report 2.1.1 This report provides a summary of the current revenue budget monitoring position to ensure net expenditure is contained within budget. It provides corporate and departmental information with comparisons on a forecast outturn and a year to date basis. 2.1.2 There is a forecast overspend of £4.096m as at the end of August 2024. The variances are: - Within Social Work, a forecast overspend of £1.470m relating to demand for residential placements within Children and Families and Older Peoples Services. - Within Roads and Infrastructure Services, a forecast overspend of £0.970m due to increased bus contract renewals for Public and Pupil Transport across Argyll and Bute, additional costs relating to repairs to the Belnahua Ferry, the Transport of ASN pupils and two unrealized savings for additional income from Traffic Regular Orders (TB13b) and Stadiums (TB12b). These overspends are partially offset with additional income in Waste and reduction in Landfill Tax costs due to reduced tonnage within Helensburgh Waste Disposal. - An overspend of £0.780m is being reported in relation to the Weather Incident of October 2023, this relates to the proportion of the total estimated cost which Policy and Resources Committee on 15 August 2024 agreed to be funded from Crown Estate funding and shows as an overspend at this time pending confirmation of the funding for 2024-25. - Within Education, a projected overspend of £0.693m due to the Schools Residential Budget having a higher demand for placements than the budget allows. - Within Central Budgets, a forecast overspend of £0.271m is reported in relation to the inflation on insurance being higher than estimated. - Within Central Budgets, a forecast overspend of £0.252m for 2024-25 pay Page 13 Agenda Item 4
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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 August monitoring with the intention that it will be aligned to departments once the pay award is finalised. - Within Development and Economic Growth, a forecast overspend of £0.104m due to increased temporary accommodation costs. - Within Funding, an over-recovery of Council Tax income on second homes of £0.328m. - Within Executive Director Kirsty Flanagan, a projected over-recovery of vacancy savings of £0.100m. - Within Customer Support Services, a projected underspend of £0.016m from Organisational Development. 2.1.3 There is a year to date overspend of £3.622m. More focus is on the forecast outturn position, hence why sometimes the year to date position is not updated. The year to date variances mainly relate to the timing of income and expenditure and recharging of costs to capital. 2.1.4 Total policy savings relevant to 2024-25 financial year amount to £6.467m. The table below outlines their progress as at 31 August 2024. Category No. of Options 2024-25 £000 2024- 25 FTE 2025-26 £000 2025- 26 FTE Future Years £000 Future Years FTE Delivered 5 5,431.0 8.4 5,598.0 8.4 5,598.0 8.4 On Track to be Delivered 8 915.0 6.5 796.0 6.5 796.0 6.5 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 2.1.5 Two savings are categorised as will not be achieved and a cost pressure will be added to the 2025-26 budget for the shortfall (£0.120m). Health and Social Care Partnership (HSCP) – Financial Update 2.1.6 The forecast outturn position at the end of August is an estimated overspend of £2.070m for 2024-25 (£1.470m overspend for Social Work and £0.600m for Health). The HSCP’s financial position will continue to be monitored and Financial Services staff will engage with the HSCP Chief Financial Officer to ensure that mitigation actions are in place to address the deficit and ensure that no additional funding is required from the Council. Page 14
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2.2 Monitoring of Financial Risks 2.2.1 This report outlines the process and approach developed in carrying out a financial risks analysis and provides an update on the current assessment of financial risks. 2.2.2 There are 7 Council wide revenue risks identified for 2024-25 currently amounting to £3.592m. 2.2.3 There are currently 43 departmental risks totalling £6.793m. Of the 43 departmental risks, 5 are categorised as likely. These will continue to be monitored and 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 TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD 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 Page 15
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2.2.5 2.2.6 There have been 3 changes to the departmental risks since the report as presented to the Council on 15 August 2024. These are outlined in paragraph 3.4.1 of the Financial Risks Report. Three other potential risks relating to funded childcare for 1 and 2 year olds, the proposed new school campus on Mull and digital access for learners are covered in section 3.6 of the Financial Risks report. 2.3 Capital Plan Monitoring Report 2.3.1 This report provides a summary of the current capital plan monitoring position. Information is provided in terms of monitoring year to date budget, current full year budget, future years total budget and funding and non-financial in terms of project performance. 2.3.2 In recent years, the Council has agreed additional funding for the capital programme totalling £11.100m to address specific costs related to dealing with COVID, inflationary pressures arising as a consequence of the factors detailed in paragraph 2.3.3 below and other cost pressures on the capital plan. To date, £9.240m has been allocated to projects leaving a balance of £1.860m available for allocation as required. 2.3.3 The capital programme continues to see 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. 2.3.4 Actual net expenditure to date is £10.648m compared to a budget for the year to date of £10.659m giving rise to an overspend for the year to date of £0.011m (0.10%). 2.3.5 The forecast outturn for 2024-25 is a forecast net expenditure of £36.248m compared to an annual budget of £37.007m giving rise to a forecast overspend for the year of £0.759m (2.05%). 2.3.6 The forecast total net projects costs on the capital plan are £192.882m compared to a total budget for all projects of £192.791m giving rise to a forecast overspend for the overall capital plan of £0.091m (0.05%). 2.3.7 In respect of total project performance, there are 150 projects within the capital plan, 140 are complete or on target, 4 are off target and recoverable and 6 projects are off track. 2.4 Treasury Monitoring Report 2.4.1 This report provides information on the current levels and recent transactions in relation to the capital financing limit, total borrowing, temporary borrowing and long term borrowing and investments. Page 16
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2.4.2 There was no material movement in external borrowing for the period 1 July 2024 to 31 August 2024. 2.4.3 Borrowing is below the Capital Financing Requirement for the period to 31 August 2024, at this stage in the financial year capital expenditure is below target. 2.4.4 The levels of investments were £61.702m at 31 August 2024. The average rate of return achieved was 5.110 % which is above the target SONIA (Sterling Overnight Index Average) rate for the same period of 4.950%. 2.5 Reserves and Balances 2.5.1 This report summarises the overall level of reserves and balances and monitors the spending of the earmarked reserves, providing detailed information on the unspent budget earmarked balances. 2.5.2 The Council has a total of £689.113m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 2.5.3 At 31 March 2024, the Council had a total of £121.701m of usable reserves. Of this: £2.763m relates to the Repairs and Renewals Fund £3.197m relates to Capital Funds £115.741m was held in the General Fund, with £107.443m of this balance earmarked for specific purposes. 2.5.4 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. This results in a total in- year earmarked balance of £119.617m. 2.5.5 Of the earmarked balance of £119.617m: £58.040m is invested or committed for major initiatives/capital projects £10.124m has already been drawn down £20.998m is still to be drawn down in 2024-25 £30.445m is planned to be spent in future years 2.5.6 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. Page 17
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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 30 June 2024 Per paragraph 3.4.2. (4,096) Social Work outturn adjustment Per paragraph 3.4.3 - Social Work would expect to transfer any surplus to internal IJB reserves 1,470 Weather Incident Per P&R 15 Aug 24 – Likely use of crown estate funding to offset weather incident remaining costs 780 Estimated Unallocated balance as at 31 March 2025 413 2.5.6 It can be seen that, after taking into consideration the current forecast outturn for 2024- 25 and the likely input of Crown Estate Funding to the remaining Weather Event overspend, the Council is estimated to have a £0.413m surplus over contingency. 2.5.7 As at 31 August 2024, the commitments against the Strathclyde Pensions fund gain Transformation/Spend to Save projects earmarking are as follows: Description Commitment £000 Drawn Down at 31/08/24 £000 Data Platform Build Consultancy 40 0 Data Platform Build Consultancy (Contingency) 4 0 RIS Service Review 150 0 Conversational AI 31 0 225 0 Further details can be found on the Reserves and Balances report at section 3.7.4 2.6 VIREMENTS OVER £0.200m (Revenue) 2.6.1 Virement is the process of transferring budget between cost centres, services or departments or between capital projects. The Council’s constitution notes that Page 18
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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. 2.6.2 For the period July to August, there are 2 virements requiring authorisation: - £0.246m moved between cost centres within Social Work to offset savings targets. - £0.420m transferred from central utilities budget to: street lighting electricity costs to offset the overspend (£0.220m) and Other Operating Income and Expenditure (£0.200m). This is to reverse part of the original contingency allocated to utilities for 2024-25 that is not required, noting that the £0.200m allocated to Other Operating Income and Expenditure will be released back to the general fund in 2025-26. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Consider the revenue budget monitoring report as at 31 August 2024. b) Note the financial risks for 2024-25. c) Note the capital plan monitoring report as at 31 August 2024 and approve the proposed changes to the capital plan outlined in Appendix 4 of that report. d) Note the treasury monitoring report as at 31 August 2024. e) Consider the reserves and balances report as at 31 August 2024. f) Recommend to Council that the revenue virements over £0.200m during July and August 2024 are approved. g) Note the commitments/drawdowns from the Strathclyde Pension Fund gain Transformation/Spend to Save projects earmarking. 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the revenue and capital monitoring for 2024-25 as at 31 August 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 - Risks are included in financial risks report. 4.8 Customer Service - None. 4.9 The Rights of the Child (UNCRC) - None. Page 19
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Kirsty Flanagan Executive Director /Section 95 Officer 6 September 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 20
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REVENUE BUDGET MONITORING REPORT AS AT 31 AUGUST 2024 POLICY AND RESOURCES COMMITTEE 10 OCTOBER 2024 2024-25 Overall Position: There is a forecast overspend of £4.096m as at the end of August 2024. Within Social Work, there is a forecast overspend of £1.470m relating to demand for residential placements within Children and Families and Older Peoples Services. Within Executive Director Kirsty Flanagan, there is a forecast overspend of £0.958m due to increased bus contract renewals 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 with additional income in Waste, reduction in Landfill Tax costs due to reduced tonnage levels in Helensburgh Waste Disposal and vacancy savings across the department. The Weather incident of October 2023 has resulted in a pressure from a revenue perspective of £3.567m as reported to Policy and Resources Committee on 15 August 2024. Members agreed to how to fund this overspend in its entirety including £0.780m from Crown Estates funding, however as the 2024-25 funding has not yet been confirmed there remains a variance reported at this stage of £0.780m. Within Executive Director Douglas Hendry, there is a forecast overspend of £0.693m relating to school residential budget having a higher demand for placements than budget allows. Within Central Budgets, an overspend of £0.271m is reported in relation to the inflation on insurance being higher than estimated. There is also an overspend of £0.252m recognised in respect of the pay awards for 24-25 currently in negotiation as the Scottish Government requires Councils to fund 3.2% while the budget only has 3% built in. Within funding, there is a projected over-recovery of income for Council Tax on 2nd Homes of £0.328m There is a year to date overspend of £3.622m. 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 August 2024: Council services are projecting an overspend of £4.096m as at 31 August 2024. This includes £1.470m from Social Work which would be expected to be covered from reserves and £0.780m from the October 23 Weather Incident, which should be covered from Crown Estate Funding. The remaining overspend is £1.846m. The latest offer in relation to the 2024-25 pay award requires Councils to fund a 3.2% increase with Scottish Government funding between 3.2% and the current pay offers. This is for all bargaining groups. As this is more than is currently in the 2024-25 budget, this creates a net pressure on the budget of £0.252m, which is recognised in Other Operating Income and Expenditure for August monitoring with the intention that it will be aligned to departments once the pay award is finalised. At the time of writing, the teachers pay award has been agreed but SJC and Chief Officers are still in negotiations. 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: Page 21
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£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. 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. Page 22
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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. Page 23
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Forecast Outturn Position There is a forecast underspend of £4.096m for 2024-25 as at 31 August 2024. Department Annual Budget £'000 Forecast Outturn £'000 Current Forecast Variance £'000 Previous Forecast Variance £000 Change £000 Explanation Chief Executive's Unit 1,191 1,191 0 0 0 Executive Director (Douglas Hendry) 148,302 148,995 (693) (693) 0 The proejcted overspend is due to the Schools Residential Budget having a higher demand for placements than budget allows. Executive Director (Kirsty Flanagan) 57,686 58,644 (958) (1,060) 102 The projected overspend is due to increased bus contract renewals 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 TRO Income which was a previously agreed saving to secure additional income that has been unachievable. These overspends are partially offset with additional income in Waste, reduction in Landfill Tax within Helensburgh Waste Disposal and vacancy savings across the department. Weather Incident 2,787 3,567 (780) (3,567) 2,787 The total pressure in relation to the Weather Incident of October 2023 from a revenue perspective was quantifed at £3.567m. The meeting of Policy and Resources on 15 August 2024 agreed on how to fund the total overspend (£3.853m including capital) with £0.780m due to come from Crown Estate Funding. As the amount of funding in relation to 2024-25 is not yet confirmed, the variance reported at August is £0.780m. Other options would be explored if funding is not confirmed or is insufficient. Social Work 78,646 80,116 (1,470) (1,483) 13 The projected overspend is due to demand for residential placements within Children and Families and Older People Services. Central Budgets 22,347 22,870 (523) (523) 0 The projected overspend is due to pressure on the insurances budgets due to inflation being higher than estimated (£0.271m) and a recognition that Scottish Government have asked Councils to fund a further 0.2% increase for the pay awards being negotiated for 24-25 (£0.252m). Financed By (310,959) (311,287) 328 328 0 There is a projected over recovery of income for Council tax on second homes. Total 0 4,096 (4,096) (6,998) 2,902 Page 24
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Forecast outturn position for each Department from the start of the financial year Underspend 400 (100) (600) (1,100) (1,600) Overspend Chief Executive's Unit Executive Director (Douglas Hendry) Executive Director (Kirsty Flanagan) Social Work Central Budgets Financed By Further information on the departmental forecast variances is included later on in the report. £ 000 April May June July August September October November December January February Page 25
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Year to Date Position The year to date position as at 31 August 2024 is an overspend of £3.622m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 499 497 (2) The year to date overspend can be attributed to profiling issues. Executive Director (Douglas Hendry) 59,517 60,143 626 The year to date underspend is mainly due to the current budget profile which will be refined through September and is partially offset by the pressure on the Schools Residential Budget. Executive Director (Kirsty Flanagan) 23,782 20,678 (3,104) The year to date overspend is mainly due to the profile of a number of budgets across the department. Weather Incident 1,899 0 (1,899) The year to date overspend can be attributed to profiling issues. Social Work 18,877 18,234 (643) The year to date overspend is due to demand driven services within Children and Families and Older People. Central Budgets 3,625 5,025 1,400 The year to date underspend can be attributed to profiling issues. Funding (131,366) (131,366) 0 Total Net Expenditure (23,167) (26,789) (3,622) Page 26
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Expenditure to date against the remaining budget for each Department 100% 75% 50% 25% 0% YTD Actual £000 Remaining Budget £000 Further information on the departmental year to date variances is included later on in the report. Chief Executive's Unit Executive Director (Kirsty Flanagan) Executive Director (Douglas Hendry) Social W ork Central Budgets TOTAL Page 27
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OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2024 YEAR TO DATE POSITION CURRENT PROJECTED FINAL OUTTURN YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Variance % Annual Budget £'000 Forecast Outturn £'000 Forecast Variance £'000 Variance % Departmental Budgets Chief Executive's Unit 499 497 (2) (0.4%) 1,191 1,191 0 0.0% Executive Director (Douglas Hendry) 59,517 60,143 626 1.0% 148,302 148,995 (693) (0.5%) Executive Director (Kirsty Flanagan) 23,782 20,678 (3,104) (15.0%) 57,686 58,644 (958) (1.7%) Weather Incident 1,899 0 (1,899) 0.0% 2,787 3,567 (780) (28.0%) Social Work 18,877 18,234 (643) (3.5%) 78,646 80,116 (1,470) (1.9%) Total Departmental Budgets 104,574 99,552 (5,022) (5.0%) 288,612 292,513 (3,901) (1.4%) Central Budgets Other Operating Income and Expenditure (3,321) 415 3,736 900.2% 3,531 3,783 (252) (7.1%) Joint Boards 634 607 (27) (4.5%) 1,458 1,458 0 0.0% Non-Controllable Costs 6,312 4,003 (2,309) (57.7%) 17,358 17,629 (271) (1.6%) Total Central Budgets 3,625 5,025 1,400 27.9% 22,347 22,870 (523) (2.3%) TOTAL NET EXPENDITURE 108,199 104,577 (3,622) (3.5%) 310,959 315,383 (4,424) (1.4%) Financed By Aggregate External Finance (98,717) (98,717) 0 0.0% (249,731) (249,731) 0 0.0% Local Tax Requirement (32,649) (32,649) 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% (10,124) (10,124) 0 0.0% Total Funding (131,366) (131,366) 0 0.0% (310,959) (311,287) 328 (0.1%) (Deficit)/Surplus for Period (23,167) (26,789) (3,622) 0 4,096 (4,096) Page 28
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2024 YEAR TO DATE POSITION CURRENT PROJECTED FINAL OUTTURN YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Variance % Annual Budget £'000 Forecast Outturn £'000 Forecast Variance £'000 Variance % Subjective Category Employee Expenses 72,558 72,247 (311) (0.4%) 191,498 194,062 (2,564) (1.3%) Premises Related Expenditure 10,793 10,065 (728) (7.2%) 21,748 21,752 (4) (0.0%) Supplies and Services 12,165 12,073 (92) (0.8%) 27,187 27,305 (118) (0.4%) Transport Related Expenditure 6,482 5,358 (1,124) (21.0%) 18,288 18,692 (404) (2.2%) Third Party Payments 77,383 74,771 (2,612) (3.5%) 191,488 192,000 (512) (0.3%) Capital Financing 705 (2,026) (2,731) 10,626 10,626 0 0.0% TOTAL EXPENDITURE 180,086 172,488 (7,598) (4.4%) 460,835 464,437 (3,602) (0.8%) Income (203,253) (199,277) 3,976 (2.0%) (460,835) (460,341) (494) 0.1% (Deficit)/Surplus for Period (23,167) (26,789) (3,622) 0 4,096 (4,096) 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. Page 29
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CHIEF EXECUTIVE’S UNIT – AS AT 31 AUGUST 2024 The department is currently forecasting spend in line with budget. The department has a year to date overspend of £0.002m (0.4%) which can be attributed to budget profiling issues. Forecast Outturn Position Year to Date Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Executive 1,191 1,191 0 0 0 Totals 1,191 1,191 0 0 0 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 Page 30
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resources to meet national and local policy requirements for quality engagement. To continue to deliver a high quality support service function to community organisations and community planning partners during a time of challenge arising from continuing reductions in funding. Within the partnership working of the CPP we seek to establish working groups and collate resources within this to deliver high quality solutions to identified needs. Demands for funding from community applications to the Supporting Communities Fund higher than available annual funds by about 40%. Continue to monitor fund criteria adapting this to align with priority outcomes for Argyll & Bute and continue to support groups to seek alternative sources of funding from our database of funding providers. Page 31
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 AUGUST 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 158 157 (1) (0.6%) 414 414 0 0.0% Outwith reporting criteria. Community Planning & Development 341 340 (1) (0.3%) 777 777 0 0.0% Outwith reporting criteria. 499 497 (2) (0.4%) 1,191 1,191 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 32
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CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 31 AUGUST 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 389 377 (12) (3.2%) 1,012 1,012 0 0.0% Outwith reporting criteria. Supplies and Services 12 14 2 14.3% 21 21 0 0.0% Numerous small accumulating variances. Transport 1 6 5 83.3% 14 14 0 0.0% Underspend on staff travel budgets. Third Party 124 152 28 18.4% 224 224 0 0.0% Year to date variance relates to the timing of income / expenditure in relation to the Prosperity fund. Income (27) (52) (25) 48.1% (80) (80) 0 0.0% Year to date variance relates to the timing of income / expenditure in relation to the Prosperity fund. Totals 499 497 (2) (0.4%) 1,191 1,191 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 33
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CHIEF EXECUTIVE’S UNIT – RED VARIANCES AS AT 31 AUGUST 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 34
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2024 The department is currently forecasting an overspend of £0.693m (0.5%) due to the Schools Residential Budget having a higher demand for placements than budget allows. The department has a year to date (YTD) underspend of £0.626m (1.0%). This underspend is mainly due to the current budget profile, which will be refined through September, and is partially offset by the above pressure on the Schools Residential Budget. Forecast Outturn Position Service Annual Forecast Current Previous Change Budget Outturn Forecast Forecast Variance Variance £000 £000 £000 £000 £000 Executive Director 156 156 0 0 0 (Douglas Hendry) Head of Commercial 10,347 10,347 0 0 0 Services Head of Education 116,530 117,223 (693) (693) 0 Head of Legal and Regulatory 21,269 21,269 0 0 0 Support Totals 148,302 148,995 (693) (693) 0 Year to Date Position Page 35
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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. Work 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 36
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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 37
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 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 142 153 11 7.2% 156 156 0 0.0% Outwith Reporting Criteria 142 153 11 7.2% 156 156 0 0.0% Head of Commercial Services Catering (144) (119) 25 (21.0%) 320 320 0 0.0% The YTD underspend is due to the profile of the repair/replacement of tools and equipment budget which will be refined through September. Head of Commercial Services Central/Management Costs 485 523 38 7.3% 1,726 1,726 0 0.0% Outwith Reporting Criteria Head of Commercial Services CHORD 68 50 (18) (36.0%) 49 49 0 0.0% The YTD over spend is due to the timing of recharges required from capital Head of Commercial Services Cleaning (82) (14) 68 (485.7%) 203 203 0 0.0% The YTD underspend is largely due to the reduced use of bank staff. Head of Commercial Services Culture, Heritage, Recreation & Sport 2,329 2,249 (80) (3.6%) 5,729 5,729 0 0.0% The YTD overspend is due to budget profile of utilities and the central repairs budget which will be refined through September Head of Commercial Services Events & Commercial Catering 60 (16) (76) 475.0% 7 7 0 0.0% The YTD overspend is due to under- recovery of income budgets within Events and Commercial Cafes. Finance are working closely with Commercial Services to increase income generation. Head of Commercial Services Property Portfolio (160) (141) 19 (13.5%) (189) (189) 0 0.0% The YTD underspend is due to the current budget profile within Surplus Properties, this will be refined through September. Head of Commercial Services Property Services 549 607 58 9.6% 858 858 0 0.0% The YTD underspend is due to delays in staff recruitment. This variance will be removed when vacancy savings are harvested. Page 38
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Head of Commercial Services Shared Offices 426 558 132 23.7% 1,644 1,644 0 0.0% The YTD underspend is due to profiling of the Central Repairs Budget and Rental Income budgets these will be refined through September. 3,531 3,697 166 4.5% 10,347 10,347 0 0.0% Head of Education Additional Support for Learning 4,580 4,622 42 0.9% 12,148 12,148 0 0.0% Outwith Reporting Criteria Head of Education Central/Management Costs 1,139 1,029 (110) (10.7%) 2,697 2,697 0 0.0% The YTD overspend is mainly due to the budget profile, which will be refined through September. The remainder is due to overspends in licences, staff subsistence, conference fees and travel budgets. Head of Education Community Learning & Development 4 2 (2) (100.0%) 15 15 0 0.0% The YTD overspend is due to utilities costs within CLD premises for which budgets will be rightsized throughout the year. Head of Education COVID 18 10 (8) (80.0%) 10 10 0 0.0% The YTD overspend will be rectified through drawdown of earmarkings. Head of Education Early Learning & Childcare 6,808 6,819 11 0.2% 17,730 17,730 0 0.0% Outwith Reporting Criteria Head of Education Primary Education 16,646 16,988 342 2.0% 41,278 41,277 1 0.0% The YTD underspend is mainly due to the current budget profile which requires to be refined through September by AFA's. Head of Education Pupil Support 1,154 993 (161) (16.2%) 2,677 3,370 (693) (25.9%) The YTD overspend is due to higher than budgeted demand for Schools Residential Placements. There has been a forecast variance reported through the ledger for this pressure. Head of Education Schools - Central Services 875 957 82 8.6% 2,507 2,507 0 0.0% The YTD underspend is due to the budget profile of the 100 day promise budget and curriculum for excellence, this will be refined through September. Head of Education Secondary Education 16,887 17,103 216 1.3% 37,468 37,469 (1) (0.0%) The YTD underspend is profile related within staffing budgets which will be rectified through September. 48,111 48,523 412 0.9% 116,530 117,223 (693) (0.6%) Page 39
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Head of Legal & Regulatory Support Central/Management Costs 95 95 0 0.0% 263 263 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Community Safety 135 95 (40) (42.1%) 187 187 0 0.0% The YTD overspend will be partially rectified through drawdown of earmarkings and processing of prepayments at year end. Head of Legal & Regulatory Support Elections 75 32 (43) (134.4%) 37 37 0 0.0% The YTD overspend is due to the costs of postages and computer software for running both the UK and local elections, funding will be reprofiled to cover this expenditure. Head of Legal & Regulatory Support Governance 212 209 (3) (1.4%) 749 749 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Governance, Risk & Safety 212 197 (15) (7.6%) 552 552 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 126 237 111 46.8% 687 687 0 0.0% The YTD underspend is due to timing of licensing income. The budget profile requires refinement.. Head of Legal & Regulatory Support NPDO and Hub Schools 6,227 6,258 31 0.5% 16,972 16,972 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Procurement, Commercial and Contract Management 397 399 2 0.5% 1,140 1,140 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Trading Standards & Advice Services 254 248 (6) (2.4%) 682 682 0 0.0% Outwith Reporting Criteria 7,733 7,770 37 0.5% 21,269 21,269 0 0.0% 59,517 60,143 626 1.0% 148,302 148,995 (693) (0.5%) 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
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 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 41,447 41,887 440 1.1% 108,331 108,331 0 0.0% The YTD underspend is mainly due to the current budget profile of School Staffing and Property Services staffing budgets which will be refined through September. Premises 3,350 3,141 (209) (6.7%) 8,904 8,904 0 0.0% The YTD overspend will be rectified by a drawdown from the early years earmarked reserve and reprofiling of utility costs in Primary and Secondary Schools. Supplies and Services 5,400 6,079 679 11.2% 14,862 14,862 0 0.0% 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 the budget profile of Catering Purchases and Replacement of Tools and Equipment budget within Commercial Services. Transport 186 137 (49) (35.8%) 341 341 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 24,689 24,103 (586) (2.4%) 47,310 48,003 (693) (1.5%) 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 (15,555) (15,204) 351 (2.3%) (31,446) (31,446) 0 0.0% The YTD underspend is mainly due to the current budget profile for receipt of grant income, donations and income from other local authorities within the Education Service. The current budget profile of Licensing Fees and NPDO Schools requires to be refined within Legal and Regulatory Services and will be rectified through September. Totals 59,517 60,143 626 1.0% 148,302 148,995 (693) (0.5%) Page 41
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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 42
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES AS AT 31 AUGUST 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Education - Pupil Support 2,677 3,370 693 15.1% Higher than budgeted demand for placements within Residential Schools. A red variance is a forecast variance which is greater than +/- £50,000. Page 43
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2024 The department has a forecast overspend of £0.958m (1.7%). This is due to increased bus contract renewals 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 with additional income in Waste, 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 £3.104m (15.0%). This is mainly due to the profile of a number of budgets across the department. Forecast Outturn Position Service Annual Forecast Current Previous Change Budget Outturn Forecast Forecast Variance Variance £000 £000 £000 £000 £000 Executive Director (Kirsty Flanagan) (119) (219) 100 0 100 Head of Customer Support Services 8,780 8,764 16 0 16 Head of Development and Economic Growth 8,793 8,897 (104) 0 (104) Head of Financial Services 6,909 6,909 0 0 0 Head of Roads and Infrastructure Services 33,323 34,293 (970) (1,060) 90 Totals 57,686 58,644 (958) (1,060) 102 Year to Date Position Key Financial Successes: Page 44
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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. 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. Page 45
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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 46
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 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 113 113 0 0.0% (119) (219) 100 (84.0%) Forecast variance due to a projected over-recovery of vacancy savings. 113 113 0 0.0% (119) (219) 100 (84.0%) Head of Customer Support Services Central/Management Costs 53 55 2 3.6% 167 167 0 0.0% Outwith reporting criteria Head of Customer Support Services Communications 130 125 (5) (4.0%) 322 322 0 0.0% Outwith reporting criteria Head of Customer Support Services Customer Service Centres 494 516 22 4.3% 1,597 1,597 0 0.0% Outwith reporting criteria Head of Customer Support Services HR 1,085 1,032 (53) (5.1%) 2,370 2,354 16 0.7% YTD overspend due to costs for the iTrent project that require to be drawn down from earmarked reserves. Forecast variance due to underspend in Organisational Development Head of Customer Support Services ICT 1,968 1,902 (66) (3.5%) 4,342 4,342 0 0.0% YTD overspend due to the timing of expenditure in comparison to the profiling of budget and will be rectified over the financial year. Head of Customer Support Services Registrars (45) (25) 20 (80.0%) (18) (18) 0 0.0% YTD underspend due to the timing of income in comparison to the profiling of budget and will be rectified over the financial year. 3,685 3,605 (80) (2.2%) 8,780 8,764 16 0.2% Head of Development & Economic Growth Airports 719 454 (265) (58.4%) 1,186 1,186 0 0.0% YTD variance due to profile of budget for Private Contactors which will be rectified over the financial year. Head of Development & Economic Growth Building Control (102) (112) (10) 8.9% (125) (125) 0 0.0% Outwith reporting criteria Page 47
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Head of Development & Economic Growth Central/Management Costs 196 217 21 9.7% 572 572 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Culture & Heritage 96 90 (6) (6.7%) 235 235 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Development Management (114) (43) 71 (165.1%) 115 115 0 0.0% YTD variance due to over- recovery of Planning Fee income received which will be rectified over the financial year. Head of Development & Economic Growth Development Policy 133 166 33 19.9% 465 465 0 0.0% YTD overspend due to the timing of expenditure in comparison to the profiling of budget and will be rectified over the financial year. Head of Development & Economic Growth Economic Development (1,651) 1,238 2,889 233.4% 2,043 2,043 0 0.0% YTD variance 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 389 471 82 17.4% 1,241 1,241 0 0.0% YTD variance is due to timing of Private Landlord Registration income which will be rectified over the coming months as well as underspends in employee costs. Head of Development & Economic Growth Environmental Initiatives 22 22 0 0.0% 95 95 0 0.0% Outwith reporting criteria Head of Development & Economic Growth Housing 1,972 1,608 (364) (22.6%) 2,676 2,780 (104) (3.9%) YTD variance due to earmarked reserve draw down being required to fund expenditure in the Strategic Housing Fund. Forecast overspend reported due to increased Temporary Accommodation costs. Head of Development & Economic Growth Private Landlords (307) (10) 297 (2970.0%) 0 0 0 0.0% YTD variance 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 85 148 63 42.6% 290 290 0 0.0% YTD variance due to profile of income which will be rectified over the financial year. Page 48
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1,438 4,249 2,811 66.2% 8,793 8,897 (104) (1.2%) Head of Financial Services Accounting & Budgeting 921 966 45 4.7% 2,559 2,559 0 0.0% Outwith reporting criteria Head of Financial Services Internal Audit & Fraud 120 132 12 9.1% 332 332 0 0.0% Outwith reporting criteria Head of Financial Services Revenues & Benefits 1,072 1,178 106 9.0% 3,083 3,083 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 322 405 83 20.5% 935 935 0 0.0% YTD variance due to Flexible Food Fund - Income from Contribution from The UK Shared Prosperity Fund - UKSPF/010 - PR6 Payment received in August, income/expenditure virement to be processed in September period. 2,435 2,681 246 9.2% 6,909 6,909 0 0.0% Head of Roads & Infrastructure Services Amenity 1,839 1,752 (87) (5.0%) 3,218 3,238 (20) (0.6%) YTD variance mainly due to delay in Interment Fees in Cemeteries and timing of cash flows in comparison to the profiling of budget within Parks which will be rectified over the financial year. Forecast variance due to under- recovery of income which is linked to a previously agreed saving from 2018-19 for Stadiums (TB12b). Head of Roads & Infrastructure Services Car Parking (323) (177) 146 (82.5%) (595) (595) 0 0.0% YTD variance due to the timing of income in comparison to the profiling of budget and will be rectified over the financial year. Head of Roads & Infrastructure Services Central/Management Costs 1,205 1,134 (71) (6.3%) 2,735 2,687 48 1.8% YTD variance due to profile of internal recharge budget which will be rectified for future monitoring. Forecast variance due to delay in Route Optimisation project resulting in a projected underspend. Page 49
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Head of Roads & Infrastructure Services Depots 198 201 3 1.5% (313) (313) 0 0.0% Outwith reporting criteria Head of Roads & Infrastructure Services Fleet & Transport 4,119 3,295 (824) (25.0%) 8,668 10,045 (1,377) (15.9%) YTD variance due to internal fleet maintenance costs and increased bus contracts for Public Transport and Pupil Transport. Forecast overspend reported due to increased contract costs for Public & Pupil Transport as well as projected increased costs for Internal Pupil Transport. Head of Roads & Infrastructure Services Infrastructure 187 254 67 26.4% 725 725 0 0.0% YTD variance due to the timing of income in comparison to the profiling of budget and will be rectified over the financial year. Head of Roads & Infrastructure Services Marine (1,213) (2,029) (816) 40.2% (3,810) (3,560) (250) 6.6% YTD variance 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 87 16 (71) (443.8%) 138 238 (100) (72.5%) YTD variance due to shortfall in income for Traffic Regulation Orders. Forecast overspend for an unrealised saving for additional income from Traffic Regulation Orders. Head of Roads & Infrastructure Services Road Safety 42 76 34 44.7% 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 6,227 1,869 (4,358) (233.2%) 7,699 7,699 0 0.0% YTD variance due to the profile of internal recharge budget within the Roads and Lighting Holding account, which will be rectified over the financial year. Page 50
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Head of Roads & Infrastructure Services Waste 3,743 3,639 (104) (2.9%) 14,711 13,982 729 5.0% YTD variance due to the timing of income in comparison to the profiling of budget and will be rectified over the financial year. Forecast underspend reported as there is a reduction in Landfill Tax costs due to reduction in tonnage levels in Helensburgh alongside additional recyclate and commercial refuse income. 16,111 10,030 (6,081) (60.6%) 33,323 34,293 (970) (2.9%) 23,782 20,678 (3,104) (15.0%) 57,686 58,644 (958) (1.7%) 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
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 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 15,564 15,851 287 1.8% 43,235 43,519 (284) (0.7%) YTD variance mainly due to vacancies within the Roads and Lighting Holding Account which are being covered by external contractors. Forecast overspend reported for additional Pupil Transport costs which is partially offset with additional vacancy savings projected and underspend in Training. Premises 1,374 1,532 158 10.3% 4,020 4,020 0 0.0% YTD variance mainly due to the profile of the Street Lighting electricity which will be profiled to rectify for next monitoring period. Supplies and Services 5,564 4,565 (999) (21.9%) 10,949 10,901 48 0.4% YTD variance 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 variance reported due to the delay in the Route Optimisation project. Transport 5,998 4,934 (1,064) (21.6%) 16,906 17,256 (350) (2.1%) YTD variance due to additional costs for Ferry maintenance and vehicle maintenance costs. Forecast overspend for additional maintenance costs for Luing and Jura Ferries. Third Party 28,326 27,007 (1,319) (4.9%) 70,399 71,181 (782) (1.1%) YTD variance 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. Forecast overspend due to increased contract costs for Public Transport and additional Temporary Accommodation costs in Housing. Capital Financing 0 0 0 0.0% 2,677 2,677 0 0.0% Outwith Reporting Criteria Income (33,044) (33,211) (167) 0.5% (90,500) (90,910) 410 (0.5%) YTD variance mainly due to grant income received within Economic Development and Housing to cover expenditure incurred within Third party Payments, this is partially offset with an overspend due to the profile of recharges within the Roads Operational Holding Account which will be rectified over the financial year. Forecast underspend reported as there is a reduction in Page 52
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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 23,782 20,678 (3,104) (15.0%) 57,686 58,644 (958) (1.7%) 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 53
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 31 AUGUST 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Public Transport 5,266 6,143 (877) (16.7%) 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) (2,854) 530 (22.8%) Additional commercial refuse and 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 54
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SOCIAL WORK – AS AT 31 AUGUST 2024 The department is currently forecasting an overspend of £1.470m (1.9%). 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 £0.643m (3.5%) which again is due to demand driven services within Children and Families and Older People. Forecast Outturn Position Year to Date Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Officer Integration (3,069) (3,134) 65 18 47 Head of Strategic Planning and Performance 470 464 6 1 5 Head of Health and Community Care 43,187 44,287 (1,100) (1,077) (23) Head of Acute and Complex Care 21,375 21,143 232 194 38 Head of Children and Families 16,683 17,356 (673) (619) (54) Totals 78,646 80,116 (1,470) (1,483) 13 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. Key Financial Challenges: Proposed Actions to address Financial Challenges: Page 55
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Deliver the outstanding savings total for 2024/25 of £1.008m (as at July 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 July 2024 of £1.5m. 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 56
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 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 158 154 (4) (2.6%) 596 597 (1) (0.2%) Outwith reporting criteria. Chief Officer Integration Social Work Central Support (455) (429) 26 (6.1%) (3,665) (3,731) 66 (1.8%) The YTD variance is outwith reporting criteria. The forecast variance is due to underspends in centrally held funds. (297) (275) 22 (8.7%) (3,069) (3,134) 65 (2.0%) Head of Strategic Planning & Performance Management & Central Costs 149 150 1 0.7% 438 437 1 0.2% Outwith reporting criteria. Head of Strategic Planning & Performance Service Development 11 15 4 26.7% 32 27 5 15.6% The YTD variance is due to timing differences on charges to health boards. The forecast variance is due to underspends on staff costs as a result of vacant hours. 160 165 5 27.3% 470 464 6 15.9% Head of Health and Community Care Management & Central Costs 181 189 8 4.2% 582 598 (16) (2.7%) Outwith reporting criteria. Head of Health and Community Care Older People 10,243 9,651 (592) (6.1%) 42,605 43,689 (1,084) (2.5%) The YTD and forecast variance are due to the latest known demands for care packages and the cost of agency staff and payments to third party providers. 10,424 9,840 (584) (5.9%) 43,187 44,287 (1,100) (2.5%) Head of Acute and Complex Care Learning Disabilities 1,148 1,330 182 13.7% 15,087 14,497 590 3.9% The YTD variance is due to timing differences on charges to health boards and other income lines. The forecast underspend reflects known demands for LD services. Head of Acute and Complex Care Management & Central Costs 26 50 24 48.0% 128 115 13 10.2% The YTD and forecast underspend are based on current projected training costs and supplies and services costs which could improve as spend trend becomes clearer. Page 57
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Head of Acute and Complex Care Mental Health 555 323 (232) (71.8%) 3,056 3,630 (574) (18.8%) The YTD variance and forecast overspend is based on current known demands for the service and re-assessments of care packages. Head of Acute and Complex Care Physical Disability 848 982 134 13.7% 3,104 2,901 203 6.5% The YTD variance is due to re-assessed care packages. The forecast underspend is due to a combination of re-assessed needs packages and attritions. 2,577 2,685 108 3.5% 21,375 21,143 232 1.8% Head of Children & Families Child Protection 1,148 1,251 103 8.2% 3,613 3,511 102 2.8% The YTD variance is based on known demands for the service coupled with deferred income received from previous years. The forecast underspend is due to demand for contact and welfare services and deferred income in the area teams budget lines. Head of Children & Families Children with a Disability 422 417 (5) (1.2%) 1,038 1,047 (9) (0.9%) Outwith reporting criteria. Head of Children & Families Criminal Justice 130 23 (107) (465.2%) 174 152 22 12.6% The YTD variance is due to timing of grant income. The forecast underspend reflects additional grant funding received along with vacant posts. Head of Children & Families Looked After Children 3,203 2,905 (298) (10.3%) 7,923 8,725 (802) (10.1%) The YTD variance is due to an increase in the demand in the number of residential placements. The forecast overspend reflects current known demand for the service. Currently have 17 children in residential placements with 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 1,110 1,223 113 9.2% 3,935 3,921 14 0.4% The YTD variance is due to increased s12 payments. The forecast variance is outwith reporting criteria. 6,013 5,819 (194) (3.3%) 16,683 17,356 (673) (4.0%) GRAND TOTAL 18,877 18,234 (643) (3.5%) 78,646 80,116 (1,470) (1.9%) Page 58
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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 59
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 AUGUST 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 13,803 12,898 (905) (7.0%) 34,711 36,468 (1,757) (5.1%) 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 726 720 (6) (0.8%) 1,701 1,704 (3) (0.2%) The YTD and forecast variance are outwith the reporting criteria. Supplies & Services 830 756 (74) (9.8%) (354) (187) (167) 47.2% The YTD overspend is largely due to the timing of payments relating to the purchase of computer software and the forecast outturn variances are due to the profiling of savings options not yet achieved. Transport 279 258 (21) (8.1%) 617 671 (54) (8.8%) The YTD variance is outwith reporting criteria and the forecast overspend is due mainly to an increase in transport charges for Helensburgh Day Care Third Party 22,065 21,597 (468) (2.2%) 66,345 67,389 (1,044) (1.6%) The YTD and forecast variance are due to demand for purchased care services across both Childrens and Adult Services. Income (18,826) (17,995) 831 (4.6%) (24,374) (25,929) 1,555 (6.4%) The YTD and forecast over recovery of income is mainly due to increased income from fees, charges and recharges. Totals 18,877 18,234 (643) (3.5%) 78,646 80,116 (1,470) (1.9%) Page 60
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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 61
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SOCIAL WORK – RED VARIANCES AS AT 31 AUGUST 2024 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Social Work Central Support (3,665) (3,731) 66 (1.8%) The YTD variance is outwith reporting criteria. The forecast variance is due to underspends in centrally held funds. Looked After Children 7,923 8,725 (802) (10.1%) The YTD variance is due to an increase in the demand in the number of residential placements. The forecast overspend reflects current known demand for the service. Currently have 17 children in residential placements with 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. Child Protection 3,613 3,511 102 2.8% The YTD variance is based on known demands for the service coupled with deferred income received from previous years. The forecast underspend is due to demand for contact and welfare services and deferred income in the area teams budget lines. Older People 42,605 43,689 (1,084) (2.5%) The YTD and forecast variance are due to the latest known demands for care packages and the cost of agency staff and payments to third party providers. Physical Disability 3,104 2,901 203 6.5% The YTD variance is due to re-assessed care packages. The forecast underspend is due to a combination of re-assessed needs packages and attritions. Learning Disability 15,087 14,497 590 3.9% The YTD variance is due to timing differences on charges to health boards and other income lines. The forecast underspend reflects known demands for LD services. Mental Health 3,056 3,630 (574) (18.8%) The YTD variance and forecast overspend is based on current known demands for the service and re-assessments of care packages. A red variance is a forecast variance which is greater than +/- £50,000. Page 62
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MONITORING OF SAVINGS – AS AT 31 AUGUST 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 one saving where the department has indicated it will not be achieved in full and one saving categorised as having a potential shortfall, 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 63
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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 64
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Template Ref Saving Agreed Service Service Delivery Area Savings Option 2024-25 2024-25 Status of Implementation £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 Page 65
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 10 OCTOBER 2024 FINANCIAL RISKS ANALYSIS 2024-25 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to provide a summary of the key financial risks facing the Council. 1.2 A number of Council wide risks, both revenue and capital, have been identified along with risks for each department and service of the Council. For each departmental risk the financial impact has been quantified and the likelihood assessed based on the standard risk matrix. 1.3 There are 7 Council wide revenue risks identified for 2024-25 currently amounting to £3.592m. 1.4 There are currently 43 departmental risks totalling £6.793m. Of the 43 departmental risks, 5 are categorised as likely. 1.5 The financial risks are monitored routinely and actions put in place to continue to mitigate the risks. Page 66
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 10 OCTOBER 2024 FINANCIAL RISKS ANALYSIS 2024-25 2. INTRODUCTION 2.1 This report outlines the process and approach developed in carrying out a financial risks analysis and provides a note of the current assessment of financial risks for 2024-25. 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 restricted resources and cost and demand pressures there are a number of financial risks the Council needs to consider and manage. 3.1.2 There are a number of risks that affect the income or expenditure across the whole council and these have been identified. Financial risks have been considered by each department and service of the Council. 3.1.3 For each risk, the financial impact has been quantified and the likelihood assessed based on the standard risk matrix as follows: 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 they 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 3.2.1 The 2024-25 budget includes a 3% pay award assumption for all staff groups. Negotiations on the 2024-25 award are in progress and it is likely that the Trade Unions will looking to negotiate a deal at more than 3%. However, the Page 67
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affordability for Local Government has to be considered and based on future estimates, anything above a 3% pay award is deemed to be unaffordable, hence why the budget outlook has been based on 3%. This is a situation that will be kept under close review as the pay negotiations advance during the year and the assumption will be adjusted as required. For each 1% more than the 3% built in, there would be an additional cost of around £1.264m. The financial risk is recognised at £1.264m at this stage. Note that this is for SJC, Chief Officer and Teaching Staff. A risk in relation to Councillor pay is noted at section 3.2.4. 3.2.2 Utility costs remain a volatile area and it is difficult to accurately predict how the prices could vary. With the volatility of utilities pricing it is very difficult to predict the impact going forward but a financial risk based on a 10% variation on the 2023-24 actual spend plus 2024-25 non-pay inflation is £0.650m. 3.2.3 The estimated level of council tax income is based on current and forecast Band D equivalents and non-payment rates. This reflects our most recent experience in terms of the council tax base and likely collection rates. A 1% variation in council tax income amounts to approximately £0.633m. 3.2.4 The Scottish Local Authorities Remuneration Committee (SLARC) have been working on proposals in relation to Councillor Remuneration which would result in increases to Councillor pay and a budget pressure of £0.178m for Argyll and Bute if backdated to 1 April 2024. The Scottish Government have indicated that they would be open to agreeing the changes with an implementation date of 1 April 2025 but a recent COSLA Leaders update advised that a regulatory pathway remains open for an uplift to be backdated to April 2024 subject to local government funding. COSLA will continue to work with the Scottish Government over the summer and a full paper will be taken to the COSLA Leadership Sounding Board in August. 3.2.5 At the budget meeting on 22 February 2024, the Council agreed 4 new policy savings options that would deliver savings over the period 2024-25 to 2026-27. The savings to be delivered in 2024-25 amount to £0.665m. Whilst the Council have a good track record in delivering savings, a 10% shortfall on this savings target would amount to £0.067m. 3.2.6 In respect of the Health and Social Care Partnership, it is the responsibility of the Chief Officer and Chief Financial Officer to manage the HSCP financial position. If an overspend is forecast, a budget recovery plan will be prepared and submitted to the IJB, the Council and NHS Highland. Where recovery plans are unsuccessful and an overspend occurs at the financial year end, and 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 still a financial risk that the Council may have to pay out additional monies in year. As at 31 August 2024, the net HSCP outturn in 2024-25 is estimated to be a £2.070m overspend (Social Work forecasting an overspend of £1.470m and an overspend of £0.600m from Health). As the IJB holds significant financial reserves, there is a nil value on the risk. Page 68
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3.2.7 There is an ongoing requirement to fund unavoidable inflationary cost increases in areas like fuel, food etc. Inflation has been falling and the Bank of England estimates that it should continue to fall this year. We will continue to closely monitor the situation and update our financial forecasts using the best information available to us. A 1% general inflation increase has been included with a financial impact of £0.800m. 3.2.8 The Council wide risks are noted within the table below. Description Likelihood Assessed Financial Impact £000 Pay Award Exceeding 3% 3 1,264 Energy costs increase by 20% greater than anticipated 3 650 1% variation in Council Tax Income 2 633 Councillor Pay Changes 3 178 10% shortfall on Savings Options 2 67 IJB refer to Council for additional funding to deliver social work services 1 0 1% variation of General Inflation Risk 4 800 Total 3,592 Capital 3.2.9 The finance settlement announcement on 19 December 2023 provided details of the Local Government funding for 2024-25 and there is therefore certainty as to what our funding is in respect of the General Capital Grant and the specific capital grants already distributed. 3.2.10 The capital plan for 2024-25 includes an estimate of £0.750m in respect of capital receipts. This is based on an assessment provided by the Special Projects Team in January 2024. A 10% variation equates to £0.075m and this would require to be managed across the capital programme. 3.2.11 General feedback from Scotland Excel and the 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. 3.2.12 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 expenditure and the availability of supply. 3.2.13 While it has been possible to estimate the impact of these pressures on some projects, and therefore either include those projections within the capital monitoring report or adjust the capital programme accordingly, for others it is more difficult, and no forecast has been projected at this stage but there are likely to be further significant financial impacts not yet reported. Page 69
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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 and likelihood category with the financial impact. Department 1 - Remote 2 - Unlikely 3 - Possible 4 - Likely 5 - Almost Certain Total No £000 No £000 No £000 No £000 No £000 No £000 Chief Executive's Unit 0 0 0 0 0 0 0 0 0 0 0 0 Executive Director Douglas Hendry 2 20 6 560 9 730 3 435 0 0 20 1,745 Executive Director Kirsty Flanagan 4 285 2 140 15 4,373 2 250 0 0 23 5,048 Total 6 305 8 700 24 5,103 5 685 0 0 43 6,793 3.3.2 The current top three risks in terms of the financial impact are noted in the table below. SERVICE TITLE OF RISK DESCRIPTION OF RISK 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 3 345 Page 70
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variance has been reported within the current year. 3.3.3 The risks which are likely, are noted below: SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 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 since last report 3.4.1 There have been 3 changes to the departmental risks since the financial risks report was presented to the Policy and Resources Committee on 15 August 2024: Page 71
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- A new ‘possible’ risk of £0.316m relating to charitable relief for Arms Length External Organisations (ALEO) to recognise that a review being undertaken by the Scottish Government may impact the charitable relief for ALEO’s. - The risk in relation to Waste - Compost Like Output (CLO) has increased from £0.164m to £0.311m as per information received on stockpiles. There is still ongoing legal negotiations, levels could fluctuate and will be monitored over the financial year, hence why no variance has been reported at this time. - The risk in relation to Roads Maintenance – Roads, Bridges, Culverts & Sea Defences has increased from £0.750m to £1.500m to include the increased risk of landslides as well as other weather related incidents. 3.5 Monitoring of Financial Risks 3.5.1 Financial risks will be reviewed and monitored on a two monthly basis and will be included in the pack of financial reports submitted to Policy and Resources Committee. 3.6 Potential Future Risks 3.6.1 Scottish Government are, over the next 2 years, proposing to extend funded childcare to all 1 and 2 year olds across Scotland. This brings significant financial and qualitative risks to the service. The needs and legislative requirements for this age range would mean significant capital work across our estate and in many settings there is not the space so extensions would be required. Having this age range in the same play space as 3/4 year olds seriously impacts on the ability of practitioners to effectively support age appropriate learning and play. It is uncertain when this risk will arise. 3.6.2 The Council’s bid to the Scottish Governments Learning Estate Investment Programme (LEIP) for funding for a new school campus on Mull was successful and a report was considered by Council on 24 April 2024. Approval was granted to utilise £5m of £9m previously earmarked funds to develop the Business Case. The Scottish Government will fund up to 50% of eligible costs and the estimated cost is £43m, with £41m deemed eligible, however these are just estimates at this stage. Potential future risks could arise in relation to site selection, design, construction and associated borrowing costs. 3.6.3 In its present configuration, Argyll and Bute Council’s digital network does not have the capacity to accommodate the requirements of the Education Services vision nor the Scottish Government’s vision for digital access over the next four years, including a device for every learner, which would entail a large increase in the number of devices accessing the network. The network requires to be redesigned to allow digital access on the scale proposed by the Scottish Government. In addition to investment in bandwidth, device management and protection, there is a requirement to replace existing network hardware in all schools. Following an independent consultation on the network by Insight, IT and Page 72
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Education have co-authored a paper “Resourcing Educations Digital Aspirations” that identifies the work required to meet the Scottish Governments expectations. COSLA have raised this issue with the Scottish Government and there is an expectation that this will be fully funded as it is a Scottish Government commitment but there remains a risk associated with this. 4 CONCLUSION 4.1 This report summarises the key financial risks facing the Council. There are 7 Council wide risks and 43 departmental risks identified with 5 categorised as likely. The financial risks are monitored routinely and actions put in place to continue to mitigate the risks. 5 IMPLICATIONS 5.1 Policy - None. 5.2 Financial - The financial value of each risk is included within the appendix. 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 - Financial risks are detailed within the appendix. 5.8 Customer Service - None. 5.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director/Section 95 Officer 6 September 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES Appendix 1 – Detail of Department/Service financial risks For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 73
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 31 AUGUST 2024 As at 30 June 2024 As at 31 August 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. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Rental Income from Properties Due to current economic climate, there may be reduced ability to recover rental income from leased properties or place suitable tenants in properties as leases come to an end. Management of leasehold properties by Estates team, any issues with debt recovery being dealt with in line with Council debt recovery policy. 2 60 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 Page 74
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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 75
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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 76
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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 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. 3 750 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. 3 164 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 77
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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 5,580 43 6,793 Page 78
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 CAPITAL BUDGET MONITORING REPORT – 31 AUGUST 2024 1.0 EXECUTIVE SUMMARY 1.1 This report provides an update on the position of the capital budget as at 31 August 2024. The report provides information on the financial position in respect of the capital plan and the performance in terms of delivery of capital plan projects. 1.2 Financial Position: • Current Year to Date – actual net expenditure to date is £10,648k compared to a budget for the year to date of £10,659k resulting in an underspend for the year to date of £11k (0.10%). • Forecast Outturn for 2024-25 – forecast net expenditure for the full financial year is £36,248k compared to an annual budget of £37,007k giving rise to a forecast underspend for the year of £759k (2.05%). • Total Capital Plan – forecast total net project costs on the total capital plan are £192,882k compared to a total budget for all projects of £192,791k giving rise to a forecast overspend for the overall capital plan of £91k (0.05%). 1.3 Project Delivery: • Asset Sustainability – Out of 85 projects there are 81 projects (95%) on track, 1 project (1%) off track but recoverable and 3 projects (4%) off track. • Service Development - Out of 43 projects there are 41 projects (95%) on track, 2 projects (5%) off track but recoverable and no projects are off track. • Strategic Change – Out of 22 projects there are 18 projects (82%) on track, 1 project (5%) off track but recoverable and 3 projects (14%) off track. 1.4 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding has been added: Strategic Housing Fund Contribution, Priority Investment Fund and contributions from reserves. 1.5 The Council is projecting £750k of capital receipts this financial year. The estimated level of receipts will be kept under review as market conditions change, as will values following due diligence undertaken by prospective purchasers on the condition of asset. Page 79
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 CAPITAL BUDGET MONITORING REPORT – 31 AUGUST 2024 2.0 INTRODUCTION 2.1 This report provides an update on the position of the capital budget as at 31 August 2024. The report provides information on the financial position in respect of the capital plan and the performance in terms of delivery of capital plan projects. 2.2 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 success by supporting completion of certain work stages. The financial information included within this report now includes amounts relating to Phase 1 of the Rothesay Pavilion project. 2.3 Surveys have been completed in the Councils 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 plus total removal and replacement of the roof during 2024. Funding of £3m was allocated as part of the 2024-25 budget setting process. Additional funding of £406k has been allocated via the Capital Contract Increase Fund to meet the now increased contract costs. 2.4 The Councils bid to the Scottish Governments Learning Estate Investment Programme (LEIP) for funding for a new school campus on Mull was successful. While this is good news and will provide welcome investment in the school estate it does come with a financial pressure that is required to be funded if the project is to proceed. The Scottish Government will fund up to 50% of eligible costs therefore the Council will be required to fund circa £20m. At April Council it was agreed to commence the Business Case, undertake engagement, commence site selection processes and establish governance arrangements. Any future capital budget provision will be built into future budget estimates and approved as part of the budget setting process. 2.5 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. Feasibility report underway to progress the permanent works and estimated costs. 2.6 The impact of the pandemic along with 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. 2.7 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: • Rothesay Pavilion – despite additional funding being awarded there remains a funding gap to allow full completion of the original intended works. • Harbour Investment Programme – likely to be contractual cost increases in future years (expected to be funded from increased fees and charges). Page 80
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• 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. 2.8 In recent years additional funding of £11.100m has been allocated to the capital programme for this purpose which has mitigated the impact to date however, as detailed in the table below. With £9.240m already allocated or committed this results in £1.860m of the fund remaining unallocated to projects facing inflationary pressures. 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 (3.461) Balance Remaining 1.860 3.0 RECOMMENDATIONS 3.1 Note the contents of this report and the financial summaries as detailed in Appendix 8 and approve the proposed changes to the capital plan detailed in Appendix 4. Page 81
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4.0 CURRENT YEAR TO DATE FINANCIAL POSITION 4.1 Overall Position Actual net expenditure to date is £10,648k compared to a budget for the year to date of £10,659k resulting in an underspend for the year to date of £11k (0.10%). 4.2 Project/Department Position The table below shows the year to date net expenditure against the year to date budget by project type and service: Project Type: Year to Date Budget £'000 Year to Date Actual £'000 Variance £'000 Asset Sustainability 6,924 6,837 87 Service Development 857 933 (76) Strategic Change 2,878 2,878 0 Total 10,659 10,648 11 Service: ICT 250 250 0 Education 2,721 2,754 (33) Live Argyll 800 801 (1) Health & Social Care Partnership 1,129 1,144 (15) Shared Offices 159 159 0 Roads & Infrastructure 3,414 3,369 45 Development & Economic Growth 525 510 15 CHORD 1,661 1,661 0 Total 10,659 10,648 11 Material variances are explained in Appendix 1 and there are a number of small variances contributing to the year to date underspend. Page 82
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5.0 FORECAST OUTTURN 2024-25 5.1 Overall Position Forecast net expenditure for the full financial year is £36,248k compared to an annual budget of £37,007k giving rise to a forecast underspend for the year of £759k (2.05%). 5.2 Project/Department Position The table below shows the forecast expenditure and budget for the year by project type and service. Project Type: Annual Budget £'000 Forecast Outturn £'000 Forecast Variance £'000 Asset Sustainability 26,623 26,809 (186) Service Development 6,156 6,345 (189) Strategic Change 4,228 3,104 1,124 Total 37,007 36,258 749 Service: ICT 1,611 1,611 0 Education 7,790 7,835 (45) Live Argyll 1,125 1,125 0 Health & Social Care Partnership 2,335 2,351 (16) Shared Offices 2,596 1,798 798 Roads & Infrastructure 19,977 19,970 7 Development & Economic Growth 2,372 2,372 0 CHORD (799) (804) 5 Total 37,007 36,258 749 Material variances are explained in Appendix 2 and there are a number of smaller variances contributing to the forecast underspend. Page 83
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6.0 TOTAL PROJECT COSTS 6.1 Overall Position Forecast total net project costs on the total capital plan are £192,882k compared to a total budget for all projects of £192,791k giving rise to a forecast overspend for the overall capital plan of £91k (0.05%). 6.2 Project/Department Position The table below shows the forecast expenditure and budget for the total capital plan by project type and service. Project Type: Capital Plan Budget £'000 Forecast Project Costs £'000 Total Capital Plan Variance £'000 Asset Sustainability 52,674 52,581 93 Service Development 28,359 28,548 (189) Strategic Change 111,758 111,753 5 Total 192,791 192,882 (91) Service: ICT 5,934 5,934 0 Education 43,911 43,956 (45) Live Argyll 3,037 3,037 0 Health & Social Care Partnership 3,936 3,952 (16) Shared Offices 18,393 18,393 0 Roads & Infrastructure 61,037 61,072 (35) Development & Economic Growth 6,929 6,929 0 CHORD 49,614 49,609 5 Total 192,791 192,882 (91) Material variances are explained in Appendix 3 and there are a number of smaller variances leading to the forecast overspend. Page 84
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7.0 TOTAL PROJECT PERFORMANCE 7.1 Overall Position There are 150 projects within the Capital Plan, 140 are Complete or On Target, 4 are Off Target and Recoverable and 6 projects are Off Track. 7.2 Project Position The table below shows the Performance Status of the Projects in the Capital Plan. Project Type: Complete/ On Target Off Target/ Recoverable Off Target/ Problem Total Asset Sustainability 81 1 3 85 Service Development 41 2 0 43 Strategic Change 18 1 3 22 Total 140 4 6 150 Service: ICT 4 0 0 4 Education 25 1 0 26 Live Argyll 16 0 0 16 Health & Social Care Partnership 20 0 0 20 Shared Offices 16 0 2 18 Roads & Infrastructure 36 2 4 42 Development & Economic Growth 18 0 0 18 CHORD 5 1 0 6 Total 140 4 6 150 Page 85
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50 Problem 70 80 90 20 30 On Target 40 0 60 10 7.3 Chart of Performance Status The graph provides a view of the Performance Status of the Projects included in the Capital Plan: Page 86
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8.0 OFF TRACK PROJECTS 8.1 The Off-Track projects are noted in the table below and a variance report is included in Appendix 6. Project Type Project What is Off Track? Explanation Shared Offices – Strategic Change Clean Energy – NDEEF1 Current Year Expenditure Slippage into 2025-26. Reprofile to forecast when final retentions are due to be released. Shared Offices – Strategic Change Clean Energy – NDEEF2 Current Year Expenditure Slippage into 2025-26 and 2026-27. Delays in Scottish Government issuing framework meaning the project is unlikely to start until 2025-26. RIS – Asset Sustainability Coast Change Adaptation Current Year Expenditure Acceleration from 2025-26. Original 2024-25 spend profile omitted grant monies due to external partner from Scottish Government. This is a correction of the spending profile. RIS – Asset Sustainability Claonaig Slip Current Year Expenditure Acceleration from 2025-26 of future block allocation RIS – Asset Sustainability Lighting Current Year Expenditure Slippage into 2025-26. 3 Schemes are not going to progress until 2025-26. Profile corrected to reflect updated scheduling of works. RIS – Strategic Change LED Scheme Current Year Expenditure Slippage into 2025-26. Further saving generating upgrades are still to be investigated so full spend will not occur within 2024-25. 9.0 STRATEGIC CHANGE PROJECTS 9.1 Appendix 7 gives detailed information in respect of the Strategic Change Projects within the Capital Plan. The appendix gives details of the forecast cost of each project against the approved budget, the start and anticipated completion date of the project and an assessment of the risks of the project and, if these are not green, gives an explanation of the problem. Page 87
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10.0 CHANGES TO CAPITAL PLAN 10.1 The table below shows proposed changes to the Capital Plan at summary level which include slippages, accelerations and virements. Explanations relating to the specific projects involved can be seen in Appendix 4. The updated gross expenditure capital plan incorporating these proposed changes can be found in Appendix 9. Department Prev. Agreed Changes 2024-25 £’000 2024-25 £’000 2025-26 £’000 2026-27 £’000 Future Years £’000 Total Capital Plan £’000 Asset Sustainability 0 279 (279) 0 0 0 Service Development 0 0 0 0 0 0 Strategic Change 0 (1,119) 834 285 0 0 Total 0 (840) 555 285 0 0 Service: ICT 0 0 0 0 0 0 Education 0 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 Health & Social Care Partnership 0 0 0 0 0 0 Shared Offices 0 (798) 513 285 0 0 Roads & Infrastructure 0 (42) 42 0 0 0 Development & Economic Growth 0 0 0 0 0 0 Major Projects 0 0 0 0 0 0 Total 0 (840) 555 285 0 0 11.0 FUNDING 11.1 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding has been added: Strategic Housing Fund Contribution, Priority Investment Fund and contributions from reserves. Page 88
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12.0 IMPLICATIONS 12.1 Policy – Monitors progress against the capital plan. 12.2 Financial – Monitors funding and commitments of the capital plan. 12.3 Legal – Available funding may not address all Statutory and Regulatory requirements in relation to Health and Safety. 12.4 HR – Available funding may have an impact on the sustainability of the Property Design Team and Infrastructure Design Team. 12.5 Fairer Scotland Duty – None. 12.5.1 Equalities – protected characteristics – None. 12.5.2 Socio-economic Duty – None. 12.5.3 Islands – None. 12.6 Climate Change – The Council is committed to addressing climate change via projects within the capital plan. 12.7 Risk – There are risks around increasing capital contract costs and the level and timing of capital receipts. 12.8 Customer Service – None. 12.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director / Section 95 Officer 26 September 2024 Policy Lead for Finance and Commercial Services – Councillor Ross Moreland APPENDICES - Appendix 1 – Year To Date finance variance explanations - Appendix 2 – Forecast Outturn variance explanations - Appendix 3 – Total Project finance variance explanations - Appendix 4 – Changes to Capital Plan and Financial Impact - Appendix 5 – Capital Funding - Appendix 6 - Off Track project variance reports - Appendix 7 - Cumulative spend, completion dates and risks relating to significant capital projects. - Appendix 8 - Financial Summary – Overall - Financial Summary – Executive Director Douglas Hendry - Financial Summary – Executive Director Kirsty Flanagan - Appendix 9 - Updated/Revised Capital Plan For further information contact: Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 89
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APPENDIX 1 – Year to Date Financial Variance Explanations Listed below are the projects where the variance is +/- £50k. Project YTD Budget £’000 YTD Actual £’000 (Over)/ Under Variance £’000 Explanation Other variances under £50k 11 Total value of non-material variances less than +/-£50k Total 11 Page 90
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APPENDIX 2 – 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 Clean Energy – NDEEF 1 222 124 98 Slippage into 2025-26. This is a correction of the spending profile in line with anticipated payment of retentions. Clean Energy – NDEEF 2 590 0 590 Slippage into 2025-26 and 2026-27. Delays in Scottish Government issuing framework meaning unable to start project until 2025-26. Coastal Change Adaptation 67 147 (80) Acceleration from 2025-26. Original 2024-25 spend profile omitted grant monies due to external partner from Scottish Government. This is a correction of the spending profile. Claonaig Slip 1,142 1,600 (458) Acceleration into 2024-25. Acceleration of future year’s block allocation to fund Claonaig Slip. Lighting 694 325 369 Slippage into 2025-26. 3 Schemes are not going to progress until 2025-26. Profile corrected to reflect updated scheduling of works. Street Lighting LED Replacement 621 300 321 Slippage into 2025-26. Further saving generating upgrades are still to be investigated so full spend will not occur within 2024-25. Net Zero 366 256 110 Slippage into 2025-26 and vired to NDEEF1. See NDEEF1 variance report for details. Lochgilphead Depot Rationalisation 15 115 (100) Acceleration from 2025-26 RIS Block allocation to fund the feasibility studies. Other variances under £50k (91) Total value of non-material variances less than +/-£50k. Total 759 Page 91
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APPENDIX 3 – Total Project Finance Variances Listed below are the projects where the total project variance is +/- £50k. Project Capital Plan Budget £’000 Forecast Project Costs £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Other variances under £50k (91) Total value of non-material variances less than +/-£50k. Project Managers are working to reduce these small individual overspends by identifying underspends elsewhere within the capital plan. Total (91) Page 92
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APPENDIX 4 – 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 Net Zero (110) Vire and slip budget into NDEEF The additional works carried out in NDEEF1 contributes to lowering the Council’s carbon footprint and as such could have been part of the Net Zero project. Request for budget to be vired to NDEEF1 Clean Energy - NDEEF1 110 Additional budget rec’d from Net Zero Budget from Net Zero to cover the additions scope of NDEEF1. See NDEEF1 Variance Report Total Cost Changes (110) 110 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 Clean Energy – NDEEF1 (98) 98 0 Slip budget from 2024-25 Slippage into 2025-26. This is a correction of the spending profile in line with anticipated payment of retentions. Clean Energy – NDEEF2 (590) 305 285 0 Slip budget from 2024-25 Slippage into 2025-26 and 2026-27. Delays in Scottish Government issuing framework meaning unable to start project until 2025- 26. Coastal Change Adaptation 80 (80) 0 Accelerate 2025-26 budget into 2024-25 Acceleration into 2024-25. Original 2024-25 spend profile omitted grant monies due to external partner from Scottish Government. This is a correction of the spending profile. Claonaig Slip / Block Allocation 458 (458) Accelerate 2025-26 budget into 2024-25 Acceleration into 2024-25. Acceleration of future year’s block allocation to fund Claonaig Slip. Lighting (369) 369 0 Slip budget from 2024-25 Slippage into 2025-26. 3 Schemes are not going to progress until 2025-26. Profile corrected to reflect updated scheduling of works. LED Scheme (321) 321 0 Slip budget from 2024-25 Slippage into 2025-26. Further saving generating upgrades are still to be investigated so full spend will not occur within 2024-25. Page 93
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Lochgilphead Depot Rationalisation / Block Allocation 100 (100) Accelerate 2025-26 budget into 2024-25 Acceleration from 2025-26’s RIS Block Allocation to fund feasibility studies. Depot Rationalisation / Block Allocation 10 (10) Accelerate 2025-26 budget into 2024-25 Acceleration from 2025-26’s RIS Block Allocation to fund feasibility studies. Total Slippages and Accelerations (730) 445 285 0 0 Net Impact of Changes (840) 555 285 0 0 Page 94
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CAPITAL PROGRAMME FUNDING Appendix 5 2024-25 2025-26 2026-27 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 0 9,042 9,069 0 0 629 9,698 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 0 379 618 650 0 0 1,268 0 0 0 0 0 Restricted Funding 2,553 5,140 0 1,846 9,539 84 6,573 0 28 6,685 0 0 0 0 0 Funded by Reserves 10,061 2,342 -18 3,358 15,743 1,412 -92 -80 1,506 2,746 -38 0 0 0 -38 Additional Funding from Revenue 0 0 0 4 4 0 0 0 0 0 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 0 0 24,050 39,000 -5,750 0 0 33,250 17,585 7,112 0 0 24,697 Prudential Borrowing 17,567 -1,334 -782 0 15,451 166 1,600 635 0 2,401 376 -803 285 0 -142 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 -800 5,208 74,374 50,222 2,981 555 2,163 55,921 26,124 6,309 285 0 32,718 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2024-25 2025-26 2026-27 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 5,208 2,163 0 Page 95
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OFF TRACK PROJECT Appendix 6 Project Name: Clean Energy - NDEEF1 Project Manager: Craig Houston Risk: Med Initial Start Date: Proposed End Date: How was this project initially funded? Council Reserves Please detail any additional funding. Council reserves Virements from other Capital Budgets Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Clean Energy - NDEEF1 profile has been updated to reflect the additional scope of works and retentions. What has caused the issue outlined above? The scope of the project increased, with additional works added to install LED lights at Tarbert School. NDEEF1 contributes to lowering the Council’s carbon footprint and achieving Net Zero, so to cover the additional costs, funds will be vired from the Net Zero budget line that is already within the Capital Plan. As such the budget from Net Zero and existing NDEEF1 budget is slipped out of 2024-25 into 2025-26. What action will be taken to rectify this issue? Virement of budget from Net Zero to NDEEF1 is requested and profile updated to reflect when retentions are due to be paid. What are the implications of the action proposed? Overspend funded and project back on track. Page 96
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OFF TRACK PROJECT Appendix 6 Project Name: Clean Energy - “NDEEF2” Project Manager: Craig Houston Risk:Low Initial Start Date: TBC Proposed End Date: TBC How was this project initially funded? Earmarked reserves Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Slippage from 2024-25 into 2025-26 and 2026-27 What has caused the issue outlined above? What is provisionally called “NDEEF2” is a new Scottish Government Framework that will replace that which was followed for the delivery of NDEEF1. There has been a delay in the new framework being made available to the Council and as such it has not been possible to progress the project. If framework becomes available in November as is currently expected, consultancy will take place over the following 6 months with project expenditure expected in 2025-26 and 2026-27. What action will be taken to rectify this issue? Budgets slipped into 2025-26 and 2026-27 to reflect delays in framework being issued. What are the implications of the action proposed? Delays in progressing “NDEEF2” while framework is developed and timeline extension required for climate change earmarked reserve. Page 97
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OFF TRACK PROJECT Appendix 6 Project Name: Coastal Change Adaptation Project Manager: Elsa Simoes Risk: Low Initial Start Date: 2021-22 Proposed End Date: Ongoing How was this project initially funded? Specific General Capital Grant Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Acceleration of budget from 2025-26 into 2024-25. What has caused the issue outlined above? When setting spend profile for 2024-25, the payment of grant monies to Luing Community for their approved Coastal Change Adaptation case study was omitted. As such, the budget for Luing was sitting within 2025-26 and acceleration required to correct this as payment has been made to Luing. What action will be taken to rectify this issue? Accelerate budget from 2025-26 into 2024-25. What are the implications of the action proposed? Profile correction only. Page 98
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OFF TRACK PROJECT Appendix 6 Project Name: Claonaig Landslip Project Manager: Elsa Simoes Risk:Low Initial Start Date: 2020-21 Proposed End Date: To be confirmed How was this project initially funded? General Capital Grant Capital Contract Increase Fund Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Acceleration of future years budget into 2024-25. What has caused the issue outlined above? Project was to be part funded from within the RIS Capital Programme. Budget accelerated from 2025-26 Block Allocation to allow works to progress in 2024-25. What action will be taken to rectify this issue? Bugdet accelerated from 2025-26 Block Allocation. What are the implications of the action proposed? No implications, funding had already been agreed and as such is solely a profiling update. Page 99
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OFF TRACK PROJECT Appendix 6 Project Name: Lighting Project Manager: Kevin McIntosh Risk: Med Initial Start Date: N/A Proposed End Date: N/A How was this project initially funded? General Capital Grant Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Slippage of current year forecasted expenditure. What has caused the issue outlined above? Innellan Road Scheme - Materials purchased though installation costs slipped out of 2024-25 into 2025-26. Kilnahew Drive Scheme - Materials purchased though installation costs slipped out of 2024-25 into 2025-26. St Moderns Way Scheme - Materials purchased though installation costs slipped out of 2024-25 into 2025-26. Slippage also includes budget which is still to be allocated to a scheme. This has been slipped out of 2024-25 into 2025-26. These schemes are yet to be identified & developed. What action will be taken to rectify this issue? Budget will be slipped and delivery will take place within the newly projected timeframe. What are the implications of the action proposed? Completion of schemes delayed. Page 100
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OFF TRACK PROJECT Appendix 6 Project Name: LED Scheme Project Manager: Kevin McIntosh Risk: Low Initial Start Date: 01/08/2016 Proposed End Date: To be confirmed How was this project initially funded? Prudential Borrowing Please detail any additional funding. Previously Reported Committee and Date: Next Reported Committee and Date: Why is the project classified as off target? Forecasted expenditure slipping from 2024-25 into 2025-26 What has caused the issue outlined above? The amount being slipped is outstanding budget after the identified column and lamp replacements are installed. Further saving generating upgrades to the LED Street Lights are to be investigated and as such the spend will not occur within 2024-25. What action will be taken to rectify this issue? Budget slipped into 2025-26. What are the implications of the action proposed? Additional revenue savings once further improvements are identified and implemented. Page 101
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Strategic Change Projects - Cumulative Spend, Start/Finish Dates and Project Risks APPENDIX 7 Capital Expenditure Dates Risks 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 21,046 2,606 23,652 23,657 01/05/2024 31/03/2025 Green Project recommenced and awaiting Rural Growth Deal acceptance. Harbour Investment Programme 9,295 24,093 91,335 91,335 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 1,331 01/04/2021 31/03/2025 Green 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 1,035 1,129 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 85 590 590 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 0 256 256 366 tbc tbc Green Strategic Change Total 133,033 32,428 225,874 225,879 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. Page 102
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ARGYLL AND BUTE COUNCIL - CAPITAL PLAN MONITORING REPORT - OVERALL COUNCIL Appendix 8 FINANCIAL SUMMARY - NET EXPENDITURE 31 August 2024 Current Financial Year To Date (Over)/Under Budget Actual Variance £000s £000s £000s Full Year This Financial Year (Over)/Under Budget Forecast Variance £000s £000s £000s Total Project Costs (Over)/Under Budget 2025-26 Variance £000s £000s £000s EXPENDITURE Asset Sustainability Projects Executive Director Douglas Hendry Executive Director Kirsty Flanagan 4,784 2,161 4,801 2,202 (17) (41) 13,013 15,998 13,030 16,167 (17) (169) 22,513 33,249 22,530 33,139 (17) 110 Asset Sustainability Total 6,945 7,003 (58) 29,011 29,197 (186) 55,762 55,669 93 Service Development Projects Executive Director Douglas Hendry Executive Director Kirsty Flanagan 25 2,437 57 2,496 (32) (59) 193 12,384 237 12,529 (44) (145) 15,572 46,096 15,616 46,241 (44) (145) Service Development Total 2,462 2,553 (91) 12,577 12,766 (189) 61,668 61,857 (189) Strategic Change Projects Campbeltown Schools Redevelopment Dunoon Primary Replacement of Oban High Kirn Primary School Carbon Management - Non Education Campbeltown Office Rationalisation Helensburgh Office Rationalisation Clean Energy - NDEEF1 Clean Energy - NDEEF2 Net Zero Campbeltown Flood Scheme Street Lighting LED Replacement Harbour Investment Programme Harbour Investment Programme Non - PB TIF - Lorn/Kirk Road TIF - Oban Airport Business Park TIF - Halfway House Roundabout CHORD - Helensburgh - Comet Works CHORD Dunoon CHORD Oban CHORD Rothesay Helensburgh Waterfront Development HWD - FFE (Funded by LA) Kilmory Business Park Phase 2AA 0 0 0 0 0 0 0 0 0 0 1,211 6 1,945 0 0 0 0 0 0 0 1,623 34 0 4 0 0 0 0 0 0 0 0 0 0 1,211 6 1,945 0 0 0 0 0 0 0 1,623 34 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 38 232 406 34 21 1 300 222 590 366 1,780 621 24,050 43 1 85 287 25 23 500 2,611 281 34 1,035 38 232 406 34 21 1 300 124 0 256 1,780 300 24,050 43 1 85 287 25 23 500 2,606 281 34 1,035 0 0 0 0 0 0 0 98 590 110 0 321 0 0 0 0 0 0 0 0 5 0 0 0 2,130 10,869 3,250 10,119 50 596 11,838 1,331 1,140 366 15,925 3,900 91,292 43 2,170 590 640 25 12,522 7,905 23,657 24,392 350 1,129 2,130 10,869 3,250 10,119 50 596 11,838 1,441 1,140 256 15,925 3,900 91,292 43 2,170 590 640 25 12,522 7,905 23,652 24,392 350 1,129 0 0 0 0 0 0 0 (110) 0 110 0 0 0 0 0 0 0 0 0 0 5 0 0 0 Strategic Change Total 4,823 4,823 0 33,586 32,462 1,124 226,229 226,224 5 Total Expenditure 14,230 14,379 (149) 75,174 74,425 749 343,659 343,750 (91) INCOME Asset Sustainability Executive Director Douglas Hendry Executive Director Kirsty Flanagan 0 (21) 0 (166) 0 145 (1,570) (818) (1,570) (818) 0 0 (2,270) (818) (2,270) (818) 0 0 Asset Sustainability Total (21) (166) 145 (2,388) (2,388) 0 (3,088) (3,088) 0 Service Development Projects Executive Director Douglas Hendry Executive Director Kirsty Flanagan 0 (1,605) 0 (1,620) 0 15 0 (6,421) 0 (6,421) 0 0 (7,741) (25,568) (7,741) (25,568) 0 0 Service Development Total (1,605) (1,620) 15 (6,421) (6,421) 0 (33,309) (33,309) 0 Strategic Change Projects Helensburgh Office Rationalisation Dunoon Primary Campbeltown Flood Harbour PB 01 TIF - Lorn/Kirk Road H'burgh CHORD Public Realm Imprv Helensburgh Waterfront Development HWD - FFE (Funded by LA) Rothesay CHORD Kilmory Business Park Phase 2AA Kilmory Business Park Phase 2AA - HIE CHORD - Dunoon Waterfront CHORD - Oban 0 0 0 (1,945) 0 0 0 0 0 0 0 0 0 0 0 0 (1,945) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (24,050) 0 0 (2,320) 0 (2,009) (829) (150) 0 0 0 0 0 (24,050) 0 0 (2,320) 0 (2,009) (829) (150) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (349) (137) (270) (91,292) (2,057) (570) (7,979) (350) (8,854) (829) (150) (10) (1,624) (349) (137) (270) (91,292) (2,057) (570) (7,979) (350) (8,854) (829) (150) (10) (1,624) 0 0 0 0 0 0 0 0 0 0 0 0 0 Strategic Change Total (1,945) (1,945) 0 (29,358) (29,358) 0 (114,471) (114,471) 0 Total Income (3,571) (3,731) 160 (38,167) (38,167) 0 (150,868) (150,868) 0 Net Total 10,659 10,648 11 37,007 36,258 749 192,791 192,882 (91) Page 103
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MONITORING REPORT FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR DOUGLAS HENDRY Appendix 8 31 August 2024 Current Financial Year To Date Full Year This Financial Year Total Project Costs Budget Actual Variance Budget Forecast Variance Budget Forecast Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Education 2,721 2,722 (1) 7,066 7,067 (1) 12,520 12,521 (1) Live Argyll 800 801 (1) 1,104 1,104 0 1,741 1,741 0 Health and Social Care Partnership 1,104 1,119 (15) 3,722 3,738 (16) 4,777 4,793 (16) Shared Offices 159 159 0 1,121 1,121 0 3,475 3,475 0 Asset Sustainability Total 4,784 4,801 (17) 13,013 13,030 (17) 22,513 22,530 (17) 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 0 32 (32) (12) 32 (44) 7,762 7,806 (44) 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 0 0 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 25 57 (32) 193 237 (44) 15,572 15,616 (44) 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 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 0 222 124 98 1,331 1,441 (110) Clean Energy - NDEEF2 0 0 0 590 0 590 1,140 1,140 0 Net Zero 0 0 0 366 256 110 366 256 110 CHORD Oban 0 0 0 500 500 0 7,905 7,905 0 CHORD Rothesay 1,623 1,623 0 2,611 2,606 5 23,657 23,652 5 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 34 34 0 281 281 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 4 4 0 1,035 1,035 0 1,129 1,129 0 Strategic Change Total 1,661 1,661 0 6,719 5,916 803 111,669 111,664 5 Total Expenditure 6,470 6,519 (49) 19,925 19,183 742 149,754 149,810 (56) 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 (2,141) (2,141) 0 Shared Offices 0 0 0 (4) (4) 0 (4) (4) 0 Asset Sustainability Total 0 0 0 (1,570) (1,570) 0 (2,270) (2,270) 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 (8,854) (8,854) 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 (20,852) (20,852) 0 Total Income 0 0 0 (6,878) (6,878) 0 (30,863) (30,863) 0 Net Departmental Total 6,470 6,519 (49) 13,047 12,305 742 118,891 118,947 (56) Page 104
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MONITORING REPORT Appendix 8 FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR KIRSTY FLANAGAN 31 August 2024 Current Financial Year To Date (Over)/Under Budget Actual Variance £000s £000s £000s Full Year This Financial Year Year End (Over)/Under Budget Forecast Variance £000s £000s £000s Total Project Costs (Over)/Under Budget Forecast Variance £000s £000s £000s EXPENDITURE Asset Sustainability Projects Roads & Infrastructure Services 1,927 1,968 (41) 14,729 14,898 (169) 30,071 29,961 110 Customer Support Services 234 234 0 1,269 1,269 0 3,178 3,178 0 Asset Sustainability Total 2,161 2,202 (41) 15,998 16,167 (169) 33,249 33,139 110 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 1,565 1,565 0 2,152 2,152 0 4,826 4,826 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 0 0 (35) 0 (35) 2,189 2,224 (35) Lochgilphead Depot Rationalisation 15 74 (59) 15 115 (100) 169 269 (100) Jackson's Quarry Refurbishment 0 0 0 0 0 0 285 285 0 Depot Rationalisation 0 0 0 0 10 (10) 0 10 (10) Witchburn Road Demolition 0 0 0 0 0 0 158 158 0 Weather Incident October 2023 83 83 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 65 65 0 334 334 0 4,190 4,190 0 Rural Growth Deal 272 272 0 1,068 1,068 0 1,307 1,307 0 Dunoon Cycle Bothy 43 43 0 80 80 0 563 563 0 Dunoon STEM Hub 7 7 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 16 16 0 342 342 0 3,193 3,193 0 Arinagour, Coll - Site Investigation and Preliminary dev 74 74 0 74 74 0 74 74 0 Service Development Total 2,437 2,496 (59) 12,384 12,529 (145) 46,096 46,241 (145) Strategic Change Projects Campbeltown Flood Scheme 1,211 1,211 0 1,780 1,780 0 15,925 15,925 0 Street Lighting LED Replacement 6 6 0 621 300 321 3,900 3,900 0 Harbour Investment Programme 1,945 1,945 0 24,050 24,050 0 91,292 91,292 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 TIF - Halfway House Roundabout 0 0 0 0 0 0 85 287 85 287 0 0 590 640 590 640 0 0 Strategic Change Total 3,162 3,162 0 26,867 26,546 321 114,560 114,560 0 Total Expenditure 7,760 7,860 (100) 55,249 55,242 7 193,905 193,940 (35) INCOME Asset Sustainability Roads & Infrastructure Services (21) (166) 145 (818) (818) 0 (818) (818) 0 Asset Sustainability Total (21) (166) 145 (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 0 (15) 15 (396) (396) 0 (507) (507) 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 (1,565) (1,565) 0 (2,152) (2,152) 0 (4,826) (4,826) 0 Fleet Management (9) (9) 0 (9) (9) 0 (58) (58) 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 (1,605) (1,620) 15 (6,421) (6,421) 0 (25,568) (25,568) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (1,945) (1,945) 0 (24,050) (24,050) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 0 0 0 (2,057) (2,057) 0 Strategic Change Total (1,945) (1,945) 0 (24,050) (24,050) 0 (93,619) (93,619) 0 Total Income (3,571) (3,731) 160 (31,289) (31,289) 0 (120,005) (120,005) 0 Net Departmental Total 4,189 4,129 60 23,960 23,953 7 73,900 73,935 (35) Page 105
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CAPITAL PLAN 2024-25 Overall Summary APPENDIX 9 Previous Years 2024-25 2025-26 2026-27 2027-28 Total Service £000s £000s £000s £000s £000s £000s Education 38,545 7,915 3,466 1,988 0 51,914 Shared Offices 13,242 1,802 3,035 667 0 18,746 ICT 2,851 1,611 1,221 688 0 6,371 RIS 38,918 47,063 45,921 28,907 0 160,809 DEG 19,251 6,533 941 0 0 26,725 HSCP 1,246 3,776 1,055 0 0 6,077 Live Argyll 1,275 1,125 169 468 0 3,037 CHORD 65,358 4,509 113 0 0 69,980 Overall Total 180,686 74,334 55,921 32,718 0 343,659 Page 106
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CAPITAL PLAN 2024-25 APPENDIX 9 Education Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability Education Block Allocation - Education 0 568 520 1,988 0 3,076 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 2,390 1,006 0 0 3,396 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 7,066 3,466 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 -12 0 0 0 7,762 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 12,887 139 0 0 0 13,026 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 7,915 3,466 1,988 0 51,914 Page 107
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CAPITAL PLAN 2024-25 APPENDIX 9 Shared Office Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability Shared Offices 52 Sinclair Street Flats - CFCR 0 0 0 0 0 0 Block Allocation 0 320 427 382 0 1,129 Burnett Building 0 107 0 0 0 107 Helensburgh and Lomond Civic Centre 0 140 0 0 0 140 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 1,121 1,972 382 0 3,475 Strategic Change Shared Offices Campbeltown Office Rationalisation 595 1 0 0 0 596 Clean Energy - NDEEF1 1,109 124 98 0 0 1,331 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 0 256 110 0 0 366 Strategic Change Total 13,242 681 1,063 285 0 15,271 Overall Total 13,242 1,802 3,035 667 0 18,746 Page 108
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CAPITAL PLAN 2024-25 ICT APPENDIX 9 Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability ICT Block Allocation - ICT 0 132 0 688 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 1,269 1,221 688 0 3,178 Service Development ICT Applications Projects 2,851 342 0 0 0 3,193 Service Development Total 2,851 342 0 0 0 3,193 Overall Total 2,851 1,611 1,221 688 0 6,371 Page 109
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CAPITAL PLAN 2024-25 APPENDIX 9 Roads and Infrastructure Services Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability RIS Block Allocation 0 110 3,628 3,823 0 7,561 Bridge Strengthening 0 141 1,243 0 0 1,384 Bute Sea Wall Repairs 0 633 0 0 0 633 Claonaig Landslip 0 1,600 0 0 0 1,600 Coastal Change Adaptation 0 147 157 0 0 304 Coastal Protection 0 196 0 0 0 196 Environmental Projects 0 721 0 0 0 721 EV Quick Chargers 0 52 0 0 0 52 Flood Prevention 0 1,041 156 0 0 1,197 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 0 230 4,760 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 0 0 0 8,043 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 15,008 11,240 3,823 0 30,071 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 0 0 0 4,826 Jackson's Quarry Refurbishment 285 0 0 0 0 285 Lismore Ferry Replacement 637 35 0 0 0 672 Lochgilphead Depot Rationalisation 154 15 0 0 0 169 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 5,882 1,100 0 0 19,578 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 110
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Strategic Change RIS Harbour Investment Programme PB 9,295 24,050 33,250 24,697 0 91,292 Street Lighting LED Replacement 3,279 300 321 0 0 3,900 Strategic Change Total 26,322 26,173 33,581 25,084 0 111,160 Overall Total 38,918 47,063 45,921 28,907 0 160,809 Page 111
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CAPITAL PLAN 2024-25 APPENDIX 9 Development and Economic Growth Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Service Development DEG Ardrishaig North Active Travel 831 49 0 0 0 880 Arinagour, Coll - Site Investigation and Preliminary 0 74 0 0 0 74 Cycleways - H&L (FSPT) 2,905 497 0 0 0 3,402 Dunoon Cycle Bothy 483 80 0 0 0 563 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 1,068 0 0 0 1,307 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 Trainin 0 0 0 0 0 0 Service Development Total 16,511 6,160 654 0 0 23,325 Strategic Change DEG 01 TIF - Lorn/Kirk Road 2,169 1 0 0 0 2,170 09 TIF - Oban Airport Business Park 505 85 0 0 0 590 TIF - Halfway House Roundabout 66 287 287 0 0 640 Strategic Change Total 2,740 373 287 0 0 3,400 Overall Total 19,251 6,533 941 0 0 26,725 Page 112
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CAPITAL PLAN 2024-25 APPENDIX 9 Health & Social Care Partnership Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability HSCP Ardfenaig 0 12 0 0 0 12 Capital Property Works 0 55 0 0 0 55 Eadar Glinn 0 34 0 0 0 34 Glencruitten Hostel 0 301 0 0 0 301 Greenwood/Woodlands 0 1 0 0 0 1 HSCP - 102 East King Street "Jean's Both 0 4 0 0 0 4 Kintyre Care Home 0 150 650 0 0 800 Lorn Resource Centre 0 15 0 0 0 15 Shellach View 0 2 0 0 0 2 Struan Lodge Boiler 0 700 0 0 0 700 Thomson Home Rothesay 0 270 370 0 0 640 Tigh An Rudha HFE 0 2,178 35 0 0 2,213 Asset Sustainability Total 0 3,722 1,055 0 0 4,777 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 3,776 1,055 0 0 6,077 Page 113
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CAPITAL PLAN 2024-25 APPENDIX 9 Live Argyll Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £000s Asset Sustainability Live Argyll Aqualibrium 0 63 104 0 0 167 Capital Property Works 0 24 0 382 0 406 Corran Halls Gaelic Centre 0 19 0 86 0 105 Kintyre Community Education Centre 0 6 0 0 0 6 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 24 0 0 0 24 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 114
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CAPITAL PLAN 2024-25 APPENDIX 9 Major Projects Previous Years 2024-25 2025-26 2026-27 2027-28 Total Category Service Project £000s £000s £000s £000s £000s £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 21,046 2,611 0 0 0 23,657 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 1,035 34 0 0 1,129 Strategic Change Total 65,358 4,509 113 0 0 69,980 Overall Total 65,358 4,509 113 0 0 69,980 Page 115
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 TREASURY MANAGEMENT MONITORING REPORT – 31 AUGUST 2024 1.0. EXECUTIVE SUMMARY 1.1. This report sets out the Council’s treasury management position for the period 1 July 2024 to 31 August 2024 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 1.2. Estimated borrowing is below the Capital Financing Requirement for the period to 31 August 2024, at this stage in the financial year capital expenditure is below target. 1.3. There was no material net movement in external borrowing in the period 1 July 2024 to 31 August 2024. 1.4. The levels of investments were £61.702m at 31 August 2024. The rate of return achieved was 5.110% compared to the target SONIA rate which was 4.950%. 1.5. The Council has significant cash balances which are invested in accordance with its Annual Treasury Management Strategy on the basis of security first, liquidity second and then return. Page 116
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 TREASURY MANAGEMENT MONITORING REPORT – 31 AUGUST 2024 2.0. INTRODUCTION 2.1. This report sets out the Council’s treasury management position for the period 1 July 2024 to 31 August 2024 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 3.0. DETAIL Overall Borrowing Position 3.1. The table below details the estimated capital financing requirement (CFR) and compares this with the estimated level of external debt at 31 March 2024. The CFR represents the underlying need for the Council to borrow to fund its fixed assets and accumulated capital expenditure. Forecast Forecast Forecast 2024/25 2025/26 2026/27 £000 £000 £000 CFR at 1 April 332,394 359,657 382,492 Net Capital Expenditure 39,455 35,761 24,555 Less Loans Fund Principal Repayments -6,254 -6,691 -6,962 Less: NPDO Repayment -5,938 -6,235 -6,844 Estimated CFR 31 March 359,657 382,492 393,241 Less Funded by NPDO -105,846 -100,611 -94,767 Estimated Net CFR 31 March 253,811 281,881 298,474 Estimated External Borrowing at 31 March 190,835 209,152 227,472 Gap 62,976 72,729 71,002 3.2. Borrowing is below the Capital Financing Requirement for the period to 31 August 2024. The Council has delayed taking out any new long term borrowing, as rates are expected to drop towards the end of 2024 plus the Council has significant cash balances which reduces the need to borrow in the short term. 3.3. The Council’s Treasury Management Strategy states that any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates. 3.4. The Council’s estimated net capital financing requirement at 31 August 2024 is £253.811m. The table below shows how this has been financed. £113.604m is funded by loans and there are substantial internal balances of £201.909m of which £61.702m are currently invested, as detailed in section 3.7, leaving a net internal Page 117
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balance of £140.207m. Position at 30/06/24 Position at 31/08/24 £000 £000 Loans 114 114 Net Internal Balances 141 140 Total CFR 255 254 3.5. During the period from 1 July 2024 to 31 August 2024, there was no material net movement on external borrowing. The analysis of the movement in borrowing is shown in the table below: Actual £m External Loans Repaid 1st July 2024 to 31st August 2024 (0) Borrowing undertaken 1st July 2024 to 31st August 2024 0 Net Movement in External Borrowing (0) 3.6. The table below summarises the movement in the rate of temporary borrowing at the start and end of the period. % Rate Temp borrowing at 1st July 2024 4.75% Temp borrowing at 31st August 2024 4.75% Page 118
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Investment Activity 3.7. The average rate of return achieved in the Council’s investments to 31 August 2024 was 5.110% compared to the SONIA (Sterling Overnight Index Average) rate for the same period of 4.950%. At 31 August 2024 the Council had £61.702m of short term investments at an average rate of 5.110%. The table below details the counterparties that the investments were placed with, the maturity date, the interest rate and the credit rating applicable for each counterparty. Counterparty Maturity Amount £000 Interest Rate Rating S&P Clydesdale Bank Instant Access 302 4.90% Short Term A-2, Long Term A- London Borough of Croydon 10/10/2024 5,000 4.10% AA Goldman Sachs 25/10/2024 5,000 5.34% Short Term A-1, Long Term A+ Al Rayan 07/11/2024 5,000 5.35% Short Term P-1, Long Term A2 (Moody's) Al Rayan 08/11/2024 5,000 5.35% Short Term P-1, Long Term A2 (Moody's) ANZ 05/09/2024 5,000 5.24% Short Term A-1+, Long Term AA- DBS 18/09/2024 5,000 5.31% Short Term A-1+, Long Term AA- ANZ 25/10/2024 5,000 5.25% Short Term A-1+, Long Term AA- MMF- Federated Call 14,700 5.08% AAA Money Market Fund - Aberdeen Standard Call 8,500 5.04% AAA MMF - Aviva Call 3,200 5.04% AAA Total 61,702 3.8. All investments and deposits are in accordance with the Council’s approved list of counterparties and within the limits and parameters defined in the Treasury Management Practices. The counterparty list is constructed based on assessments by leading credit reference agencies adjusted for additional market information available in respect of counterparties. 3.9. The Council has significant cash balances which are invested in accordance with its Annual Treasury Management Strategy. Page 119
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Economic and Interest Rate Forecasts 3.10. The latest economic background is shown in Appendix 1 with the interest rate forecast in Appendix 2. Prudential Indicators 3.11. The prudential indicators for 2024-25 are attached in Appendix 3. 4.0. CONCLUSION 4.1 During the period from 1 July 2024 to 31 August 2024 there was no overall net material movement of external borrowing and it is currently below the Capital Financing Requirement. There are substantial internal balances, of which £61.702m is currently invested. The average rate of investment returns during the period was 5.110%. 5.0. IMPLICATIONS 5.1. Policy None 5.2. Financial Complies with Annual Treasury Strategy 5.3. Legal None 5.4. HR None 5.5. Fairer Duty Scotland: 5.5.1 Equalities – protected characteristics None 5.5.2 Socio-economic Duty None 5.5.3 Islands None 5.6. Climate Change None 5.7. Risk None 5.8. Customer Service None 5.9 The Rights of the Child (UNCRC) None. Kirsty Flanagan Executive Director/Section 95 Officer 16 September 2024 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services Appendix 1 – Economic Background Appendix 2 – Interest Rate Forecast Appendix 3 – Prudential Indicators For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 120
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Appendix 1 – Economics Update (Note that this appendix remains unchanged from what was reported to Policy and Resources Committee on 15 August 2024 as the next update is not due to be published until after the end of September) The first quarter of 2024/25 saw: - GDP growth flatlining in April following positive Q4 2023/24 growth figures of 0.7% q/q. - A stalling in the downward trend in wage growth, with the headline 3myy rate staying at 5.9% in April. - CPI inflation falling from 2.3% in April to 2.0% in May. - Core CPI inflation decreasing from 3.9% in April to 3.5% in May. - The Bank of England holding rates at 5.25% in May and June. - 10-year gilt yields climbing to 4.35% in April, before closing out at 4.32% in May. The news that the economy grew by 0.7% q/q in Q4 2023/24 confirmed that it moved out of its very mild technical recession that prevailed at the back end of 2023. However, data released for April and May so far shows a slight stalling in the recovery, with GDP data for April coming out at 0.0% m/m, as inclement weather weighed on activity. Moreover, the fall in the composite Purchasing Manager Index output balance from 53.0 in May to 51.7 in June confirms tepid growth. On a more positive note, the 2.9% m/m increase in retail sales volumes in May more than reversed the 1.8% m/m drop in April as rainfall returned to seasonal norms. The strength was broad-based across the retail sector, including online, (+5.9% m/m) suggesting an underlying strengthening in sales beyond weather effects. With inflation falling back to target, Bank Rate likely to be reduced soon and with consumer confidence improving, retail sales may well continue to strengthen. Stronger consumer spending, as low inflation allows households’ real incomes to strengthen and the drag from higher interest costs fades, suggests that real consumption will strengthen substantially over the next two years. However, investment will only make a modest contribution to GDP growth. With the industrial sector still 12% smaller than in 2019, excess capacity will continue to cap the need for industrial firms to invest. But improving business sentiment should raise investment by services’ firms. Further, a fall in mortgage rates should trigger a recovery in residential investment. Overall, strong consumer spending is likely to be the backbone of GDP growth, along with government consumption. Our colleagues at Capital Economics forecast that following GDP growth of 1.0% in 2024, activity will continue to surprise to the upside with GDP growth of 1.5% for both 2025 and 2026 (consensus forecasts are 1.2% and 1.4% respectively). Nonetheless, the on-going stickiness of wage growth in April will be a lingering concern for the Bank of England. The 3myy rate of average earnings growth stayed at 5.9% in April (consensus 5.7%), whilst the more timely 3m annualised rate rebounded from 5.9% to 9.3%. This stickiness partly reflected April’s 9.8% increase in the minimum wage. This leaves the Bank of England’s forecast for a fall back in regular private sector pay growth from 5.8% in April to 5.1% in June looking a challenge. Despite the stickiness of wage growth in April, sharp falls in employment and a move up in unemployment suggests that wage growth will soon be back on a downward path. The 139,000 fall in employment in the three months to April was accompanied by a rise in the unemployment rate from 4.3% to 4.4%. This was the fourth increase in a row and took it to its highest level since September 2021. The rise would have been larger were it not for the 132,000 increase in inactivity in the three months to April as the UK’s disappointing labour market participation performance since the pandemic continued. The vacancies data also paint a picture of a slowly cooling labour market. The number of job vacancies fell from an upwardly revised 908,000 to 904,000, leaving vacancies 31% below the peak in May 2022, but 11% above the pre-pandemic level. Page 121
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The fall in CPI inflation in May back to the Bank’s 2% target for the first time since July 2021 will have come as welcome news to the Bank. Furthermore, with CPI inflation of 3.3% in the US and 2.6% in the Euro-zone in May, the UK appears to have won the race to get CPI inflation back to 2.0%. A further easing in food inflation from 2.8% in April to 1.6% in May played a part in the fall in overall CPI inflation and with food producer price inflation at just 0.2% in May, food price inflation will probably soon fall to zero. The core rate also fell back from 3.9% to 3.5%. Within that, core goods CPI inflation slipped below zero for the first time since October 2016. As expected, clothing/footwear, recreation/culture and restaurants/hotels categories inflation declined, reflecting base effects from big increases last May. While services inflation fell from 5.9% to 5.7%, this decline was smaller than the Bank of England expected (forecast 5.3%). And the timelier three-month annualised rate of services prices has rebounded from 8.5% to 9.2%. This suggests that the persistence in domestic inflation that the Bank is worried about is fading more slowly than it thought. Even so, there is scope for inflation to fall further. There was little chance that the Bank would cut rates at its June meeting, given upside surprises on services CPI inflation and wage growth. But several developments implied a rate cut is getting closer (August?). First, two members of the MPC, Ramsden and Dhingra voted again to reduce rates immediately to 5.00%. Second, despite the recent run of stronger inflation and activity, the minutes noted “indicators of inflation persistence had continued to moderate” and that a range of indicators suggest pay growth had continued to ease. And there was new wording that members of the MPC will consider all the information available and how this affects the assessment that the risks from inflation persistence are receding “as part of the August forecast round”. Throughout the quarter there was a degree of volatility in the gilt market and, by way of example, the 10-year gilt yield rose from 4.05% on 2nd April to finish at 4.15% on 28th June but it has exceeded 4.30% on several occasions. Overall, investors judged that interest rates will need to remain high for longer to keep inflation around the 2.0% target. Meanwhile, the FTSE 100 broke through the 8,000 mark in April for the first time since its brief three- day flutter in February last year and reached a record closing high of 8,446 on 15th May. However, by the end of the quarter, despite AI-fuelled rises in the US S&P500, it finished rather tamely and had fallen back to 8,164. Arguably, significant interest rate cuts and an on-going UK economic recovery will be required for a further resurgence to take hold. PWLB maturity Certainty Rates 1st April to 30th June 2024 Gilt yields and PWLB rates remained relatively stable between 1st April and 30th June. Having said that, the spread between the low and high points during the quarter was between 0.3% and 0.45% across the curve. The 50-year PWLB Certainty Rate target for new long-term borrowing (the low point of our forecast on a two-year timeline) started 2024/25 at 4.00% and increased to 4.20% on 28th May. As can be seen, with rates remaining elevated across the whole of the curve, it is advised to not borrow long- term unless the Authority wants certainty of rate and judges the cost to be affordable. Page 122
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MPC meetings 9th May and 20th June 2024 On 9th 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. Nonetheless, with UK CPI inflation now back at 2% and set to fall further over the coming months, Ramsden and Dhingra – who voted again to reduce rates immediately to 5.00% in June – may shortly be joined by some members in the no-change camp, for whom the June decision was “finely balanced” as the upside news on services price inflation was more likely to be a reflection of one- off effects and volatile components rather than factors that would push up “medium-term inflation”. Page 123
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Appendix 2 – Interest Rate Forecast (Note that this appendix remains unchanged from what was reported to Policy and Resources Committee on 15 August 2024 as the next update is not due to be published until after the end of September) The Council has appointed Link Group as its treasury advisors and part of their service is to assist the Council to formulate a view on interest rates. The PWLB rate forecasts below are based on the Certainty Rate (the standard rate minus 20 bps) which has been accessible to most authorities since 1st November 2012. For Housing Revenue Account authorities, the lower Housing Revenue Account (HRA) PWLB rate has also been available since 15 June 2023 (standard rate minus 60 bps) but is available for HRA borrowing only. The latest forecast, updated on 28th May, sets out a view that both short and long-dated interest rates will start to fall once it is evident that the Bank of England has been successful in squeezing excess inflation out of the economy, despite a backdrop of a stubbornly robust economy and a tight labour market. Moreover, whatever the shape of domestic data, recent gilt market movements have been heavily influenced by the sentiment pertaining to US monetary policy. Again, inflation and labour data has proven sticky and the market’s expectation for rate cuts has gradually reduced throughout the course of the year, so that possibly rates may not be cut more than once, or possibly twice, before the end of 2024. In any event, even if the Bank of England starts to cut rates first, it may mean that the medium and longer parts of the curve take longer to fully reflect any such action until the US yield curve shifts lower too. Given the potential inflationary upside risk to US treasuries if Trump wins the presidential election in November (increased tariffs on imports from China for example), therein lies a further risk to yields remaining elevated for longer. Closer to home, the General Election is not expected to have a significant impact on UK monetary policy. There is minimal leeway for further tax cuts or added spending without negatively impacting market sentiment. It may even be the case that the Bank of England will steer clear of an August rate cut – should that be supported by the inflation data – in favour of weighing up fiscal policy implications and market sentiment in the aftermath of the election. Accordingly, Link’s central case is still for a rate cut before the end of September, but we are not committed to whether it will be in August or September. Thereafter, the path and speed of rate cuts is similar to that which we previously forecast, with Bank Rate eventually falling to a low of 3% by H2 2026. However, given the increased uncertainty surrounding Link’s central gilt market forecasts, and the significant issuance that will be on-going from several of the major central banks, it has marginally increased its PWLB forecasts by c20 to 30 basis points across the whole curve since the previous quarter. In summary, regarding PWLB rates, movement in the short-end of the curve is expected to reflect Link’s Bank Rate expectations to a large degree, whilst medium to longer-dated PWLB rates will remain influenced not only by the outlook for inflation, domestically and globally, but also by the market’s appetite for significant gilt issuance (£200bn+ for each of the next few years). As noted at the Link March Strategic Issues webinars, there is upside risk to that part of our forecast despite the Debt Management Office skewing its issuance to the shorter part of the curve. Page 124
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Money market yield forecasts are based on expected average earnings by local authorities for 3 to 12 months. The Link forecast for average earnings are averages i.e., rates offered by individual banks may differ significantly from these averages, reflecting their different needs for borrowing short-term cash at any one point in time. Page 125
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Appendix 3 – Prudential Indicators PRUDENTIAL INDICATOR 2024-25 2024-25 2025-26 2026-27 (1). EXTRACT FROM BUDGET Forecast Outturn Original Estimate Forecast Outturn Forecast Outturn Capital Expenditure £'000 £'000 £'000 £'000 Non - HRA 39,455 43,320 35,761 24,555 TOTAL 39,455 43,320 35,761 24,555 Ratio of financing costs to net revenue stream Non - HRA 4.54% 4.36% 4.44% 4.49% Net borrowing requirement brought forward 1 April * 332,394 320,025 359,657 382,492 carried forward 31 March * 359,657 351,041 382,492 393,241 in year borrowing requirement 27,263 31,016 22,835 10,749 In year Capital Financing Requirement Non - HRA 27,263 31,016 22,835 10,749 TOTAL 27,263 31,016 22,835 10,749 Capital Financing Requirement as at 31 March Non - HRA 359,657 351,041 382,492 393,241 TOTAL 359,657 351,041 382,492 393,241 Page 126
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PRUDENTIAL INDICATOR 2024-25 2025-26 2026-27 (2). TREASURY MANAGEMENT PRUDENTIAL INDICATORS £'M £'M £'M Authorised limit for external debt - borrowing 251 280 288 other long term liabilities 109 109 104 TOTAL 360 389 392 Operational boundary for external debt - borrowing 246 275 283 other long term liabilities 106 106 101 TOTAL 352 381 384 Upper limit for fixed interest rate exposure Principal re fixed rate borrowing 190% 190% 190% Upper limit for variable rate exposure Principal re variable rate borrowing 60% 60% 60% Upper limit for total principal sums invested for over 364 days £20m £20m £20m (per maturity date) Maturity structure of new fixed rate borrowing during 2024/25 upper limit lower limit under 12 months 30% 0% 12 months and within 24 months 30% 0% 24 months and within 5 years 30% 0% 5 years and within 10 years 40% 0% 10 years and above 100% 0% Page 127
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 RESERVES AND BALANCES – UPDATE AS AT 31 AUGUST 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 has a total of £689.113m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 1.3 At 31 March 2024 the Council had a total of £121.701m of usable reserves. Of this: £2.763m relates to the Repairs and Renewals Fund £3.197m relates to Capital Funds £115.741m was held in the 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. This results in a total in-year earmarked balance of £119.617m. 1.5 Of the earmarked balance of £119.617m: £58.040m is invested or committed for major initiatives/capital projects £10.124m has already been drawn down £20.998m is still to be drawn down in 2024-25 £30.455m is planned to be spent in future years 1.6 There is an upcoming review of Earmarked reserves being presented to Council on 26th September 2024, the impact of which is not included within the figures contained in this report. Any adjustments required will be included within the next reporting period. 1.7 The Council’s General Fund contingency is set at 2% of net expenditure for 2024- 25 and amounts to £6.039m. At the beginning of the financial year there was £2.259m of unallocated General Fund Balance (over and above contingency). After taking into consideration the current forecast outturn for 2024-25 and the Page 128
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likely input of Crown Estate Funding to the remaining Weather Event overspend, the Council is estimated to have a £0.413m surplus over contingency. Page 129
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 RESERVES AND BALANCES - UPDATE AS AT 31 AUGUST 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 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 Unaudited Accounts for 2023-24. Unusable Reserves £000 Revaluation Reserve 180,661 Capital Adjustment Account 249,093 Financial Instruments Adjustment Account (1,585) Pensions Reserve 269,216 Accumulated Absences Account (8,272) Total Unusable Reserves 689,113 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 810,814 Page 130
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3.2.2 The Revaluation Reserve represents the unrealised gains in the valuation of fixed assets. The Capital Adjustment Account represents the difference between depreciation based on proper accounting practice and statutory charges for financing capital expenditure. The Financial Instruments Adjustment Account represents the difference between gains and losses on borrowing and statutory capital financing charges. The Pensions Reserve represents the difference between pension costs based on proper accounting practice and payments made for pension costs. The Accumulated Absences Account represents the costed difference between holiday pay entitlement and actual holidays taken at 31 March. 3.2.3 The Repairs and Renewals Fund was established to support funding of renewal and replacement of school equipment. Schools can only draw on the Repairs and Renewals Fund to the extent they have previously paid into the Fund and contributions must be contained within schools devolved budgets. 3.2.4 The Capital Fund was established to receive all capital receipts generated by the Council and can be used to support the capital plan or meet the principal repayments on loan charges. The Council decides as part of the budget process each year how it wishes to draw funding from the Capital Fund. 3.2.5 The Usable Capital Receipts Reserve relates to the accumulated unspent capital receipts from sale of council houses prior to transfer of the housing stock. The reserve forms part of the Council’s Strategic Housing Fund and can only be used for investment in social housing. The reserve will be used in accordance with the approach to investing in housing agreed by the Council in August 2012. 3.3 General Fund 3.3.1 The General Fund balance at 31 March 2024 can be analysed as follows: Balance 31/03/24 £000 Balance on General Fund as at 31 March 2023 86,356 Increase to General Fund balance at end of 2023-24 29,385 Earmarked Balances* (107,443) Contingency allowance at 2% of net expenditure (6,039) Unallocated balance as at 31 March 2024 2,259 * Note that the earmarked balance of £107.443m includes £35.658m of new earmarked reserves relating to the Service Concessions gain as detailed at paragraph 3.6. 3.3.2 The General Fund includes balances that the Council has agreed to earmark for specific purposes. Some of these earmarked balances will be spent during the current financial year and some of them will be held over and spent in later years. The table below shows the balance at 31 March 2024, the new amounts earmarked from the Strathclyde Pension Fund savings (see section 3.7), the Page 131
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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. 3.4 Unallocated General Fund Balance 3.4.1 The Council’s General Fund contingency is set at 2% of net expenditure for 2024-25 and amounts to £6.039m. At the beginning of the financial year there was £2.259m of unallocated General Fund Balance (over and above contingency). After taking into consideration the current forecast outturn for Page 132
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2024-25 and the likely input of Crown Estate Funding to the remaining Weather Event overspend, the Council is estimated to have a £0.413m surplus over contingency. 3.4.2 The revenue budget position as at 31 August 2024 was estimated to be a £4.096m overspend, of which £1.470m relates to Social Work. 3.4.3 Social Work, as a part of the Integrated Joint Board (IJB), are able to hold any surplus within reserves therefore it is expected that any under or overspend that materialises would be transferred to/from the IJB reserves and the General Fund of the Council would not be impacted. 3.4.4 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 * Adjustments for the above, excluding Crown Estate Funding, have been processed in the ledger as at August. As the Crown Estate Funding for 2024- 25 has not been confirmed yet, the Section 95 Officer will advise Members before the end of the calendar year if funding has still not been confirmed at that time or if funding confirmed is insufficient. 3.4.5 The table below 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 30 June 2024 Per paragraph 3.4.2. (4,096) Social Work outturn adjustment Per paragraph 3.4.3 - Social Work would expect to transfer any surplus to internal IJB reserves 1,470 Weather Incident Per P&R Committee 15 Aug 24 – Likely use of crown estate funding to offset weather incident remaining costs. 780 Page 133
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Estimated Unallocated balance as at 31 March 2025 413 3.5 Loans Fund Review 3.5.1 At the Council meeting on 27 February 2020, it was agreed that the one-off re- profiling gain of £20.561m generated by the loans fund review should be used partly to create a provision for the increasing principal repayments over the next 10 years (£7.649m) with the remainder of the gain (£12.912m) used to fund known liabilities/cost pressures. The £12.912m has now been transferred to Earmarked Reserves in full. 3.6 Service Concessions 3.6.1 At the Council meeting on 23 February 2023 it was agreed that the Council adopt the financial flexibility introduced by the Scottish Government relating to Service Concession contracts. This resulted in a one-off retrospective gain of £36.038m. The commitments associated with this were further refined at the Council meeting on 22 February 2024 and it was agreed that £0.380m be transferred into the general fund balance, leaving a one-off gain of £35.658m which is now being held in earmarked reserves. Appendix 2 provides information on these commitments. 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. Page 134
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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 31st August 2024, the commitments against the Strathclyde Pensions fund for Transformation/Spend to Save projects are as follows: Description Commitment £000 Drawn Down at 31/08/24 £000 Data Platform Build Consultancy 40 0 Data Platform Build Consultancy (Contingency) 4 0 RIS Service Review 150 0 Conversational AI 31 0 225 0 - £0.040m for Data Platform Build Consultancy – to fund external consultants to help build a data platform which will provide a new approach to how Argyll and Bute organises and accesses its data to support strategic decision making. Note that a further £0.004m is being allowed as a contingency to cover any unexpected costs arising from the purchase of additional technical components for the solution - £0.150m towards the RIS Service review. A report was presented to the Environment, Development and Infrastructure (EDI) Committee on 20 June 2024 regarding the need for external support to assist in the delivery of stages 2 to 4 of the review to allow RIS to continue to deliver its current day- to-day services. The EDI committee approved the report, recommending to Council that the £0.150m required was funded from the Strathclyde Pension fund gain transformational pot and this was subsequently agreed by Council on 27 June 2024. - £0.031m 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 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 As at 31 August 2024 the estimated unallocated General Fund, after taking into consideration the current forecast outturn for 2024-25 is estimated to have a £0.413m surplus over contingency. Page 135
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5. IMPLICATIONS 5.1 Policy - Earmarked funds and funds set aside for delivery of Single Outcome Agreement are available to support Council Policy. 5.2 Financial - Outlines the balances held with the Council’s usable and unusable reserves. 5.3 Legal - None. 5.4 HR - None. 5.5 Fairer Scotland Duty- 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. Kirsty Flanagan Executive Director/Section 95 Officer 6 September 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 Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 136
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APPENDIX 1 Earmarked Reserves - Unspent Budget As at 31 August 2024 Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 0 002 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 0 8,855 8,855 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. 8,855 0 0 003 Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 0 12,697 12,697 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. 12,697 0 0 004 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 15,200 0 15,200 9,900 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 0 005 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 0 750,000 0 750,000 Agreed at Council meeting February 2020, £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. 0 750,000 0 006 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 0 306,400 0 306,400 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. 0 306,400 0 007 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 0 008 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 0 009 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 0 010 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 Page 137
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 011 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 0 21,013 21,013 0 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. 21,013 0 0 012 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 Jan 2024. 565,000 690,000 0 013 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 0 014 Executive Director (Douglas Hendry) Education (2023 Digital Projects) School WiFi Upgrades 166,924 0 166,924 166,924 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. 166,924 0 0 015 Executive Director (Douglas Hendry) Education Education Transformation Fund 144,637 0 144,637 0 144,637 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. 0 144,637 0 016 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 0 017 Executive Director (Douglas Hendry) Education Gaelic Specific Grant 30,000 30,000 0 0 0 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. 30,000 0 0 018 Executive Director (Douglas Hendry) Education (2023 Digital Projects) Cashless Catering 30,000 4,996 25,004 5,004 0 To support the ongoing implementation of the new cashless catering system during the testing and roll out phase. 10,000 0 0 019 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 0 10,000 0 10,000 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 10,000 0 020 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 1,815 0 1,815 0 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. 0 0 0 021 Executive Director (Douglas Hendry) Legal and Regulatory Support Education Purchasing Officers 210,000 0 210,000 168,000 42,000 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. 168,000 42,000 0 022 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 20,500 023 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 0 024 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 Page 138
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 025 Executive Director (Douglas Hendry) Legal and Regulatory Support Digital Projects: Hybrid Council meetings 43,302 12,000 31,302 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. 12,000 0 0 026 Executive Director (Douglas Hendry) Legal and Regulatory Support Debt Counselling & Welfare Rights 21,452 5,265 16,187 735 0 To meet the cost of a Debt Counselling and Welfare Rights Management System. 6,000 0 0 027 Executive Director (Douglas Hendry) Non Departmental / Legal and Regulatory Services Community Resilience Fund 71,999 0 71,999 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. 5,000 0 0 028 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. 0 0 63,455 029 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 0 030 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 21,177 0 0 031 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 0 032 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 0 109,150 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 44,000 25,150 0 033 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 0 034 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Resilient Website Project 60,000 0 60,000 60,000 0 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 and full £60k spend in that year. Payment milestones in CARR will be 25% on Contract Award, 25% on Cloud Site Provisioning, 25% on Site migration and 25% on full go live cutover. 60,000 0 0 035 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 0 036 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 0 30,000 10,000 20,000 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. 10,000 20,000 0 Page 139
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 037 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,025 0 27,025 10,000 17,025 £27k budget from original Business Development Training earmarking remaining at 31/03/24. This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. 10,000 17,025 0 038 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 19,436 0 19,436 10,000 9,436 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 10,000 9,436 0 039 Executive Director (Kirsty Flanagan) Customer Support Services (2023 Digital Projects) Digital Engagement Services Developer 15,677 0 15,677 15,677 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 0 040 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 13,824 0 13,824 13,824 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. 13,824 0 0 041 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. 60,000 0 0 042 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 0 043 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. 70,000 130,000 0 044 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 41,260 0 41,260 41,260 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 41,260 0 0 045 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. 28,000 0 0 046 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 0 047 Executive Director (Kirsty Flanagan) Financial Services Revenue and Benefits BPR - extra staff to implement savings targets 86,955 0 86,955 86,955 0 On 23 February 2023, the Council agreed to the implementation of savings option FIS2324-002 in relation to the Revenue and Benefits - Income Generation and Business Process Review. This included an extra 4 FTE of staff. Delays in recruitment have caused slippage in the allocated budget for these posts. 86,955 0 0 048 Executive Director (Kirsty Flanagan) Financial Services Scotland Loves Local 57,453 0 57,453 57,453 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 Page 140
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 (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 0 050 Executive Director (Kirsty Flanagan) Financial Services Accounting and Budgeting Team Resilience 47,883 0 47,883 8,000 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 31,883 051 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,241,752 30,929 1,210,823 550,823 660,000 Waste Variation Monies - £1.242m balance at 31/03/24: 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. £582K in 2024-25 consisting of :- Island restoration/capping, 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 waste PPP site conversion. £660K in 2025-26 consisting of:- Island restoration/capping, Helensburgh transfer station design costs during construction, consultancy costs relating to additional monitoring data for SEPA and waste PPP site conversion. 581,752 660,000 0 052 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 0 053 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 0 054 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 0 055 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 0 056 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 0 28,099 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. 0 0 0 057 Executive Director (Kirsty Flanagan) Roads & Infrastructure Services (2023 Contract Inflation Adjustments) Waste PPP 223,261 0 223,261 223,261 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. 223,261 0 0 058 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 0 059 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 0 060 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 Page 141
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Ref Department Service Description Opening Balance Budget Drawdown New earmarkings in year 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 061 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 0 1,000,000 1,000,000 0 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion (£1m). 1,000,000 0 0 062 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 0 063 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 0 064 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 0 065 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 70,000 30,000 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 70,000 30,000 0 066 Non Departmental Non Departmental Spend to Save Route Optimisation Software 82,775 0 82,775 0 82,775 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. 0 82,775 0 067 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 0 068 Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£2m to balance 24-25 budget) 2,000,000 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. 2,000,000 069 Non Departmental Non Departmental Council Strathclyde Pension Fund Saving 24- 25 (£3.75m allocation to capital plan) 0 3,750,000 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 3,750,000 070 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 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. 1,125,000 071 Non Departmental / Social Work Non Departmental Social Work Strathclyde Pension Fund Saving 24-25 0 3,053,000 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. 3,053,000 072 Non Departmental Non Departmental Capital Plan 0 1,875,000 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 3,500,297 11,803,000 26,811,882 12,139,043 14,469,172 15,639,340 4,550,334 9,918,838 Page 142
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APPENDIX 2 Earmarked Reserves - Service Concessions As at 31 August 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 0 002 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. 70,000 130,000 0 003 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 0 004 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 0 005 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 0 006 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 0 007 Non Departmental Non Departmental Service Concessions - Rothesay Pavilion 4,772,000 0 4,772,000 0 4,772,000 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. 0 4,772,000 0 008 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 0 009 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 0 010 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 0 011 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 0 012 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 0 013 Non Departmental Non Departmental Service Concessions - Climate Change 640,000 9,331 630,669 -9,331 640,000 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. 0 640,000 0 014 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 0 015 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 35,658,000 854,169 34,803,831 6,648,831 28,155,000 7,503,000 28,155,000 0 Page 143
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 BUDGET OUTLOOK 2025-26 TO 2029-30 1. EXECUTIVE SUMMARY 1.1 This report provides an update to the budget outlook covering the period 2025- 26 to 2029-30, reported to the Policy and Resources Committee on 15 August 2024. 1.2 The estimates within the report are based on the mid-range scenario with best and worst case scenarios noted in Appendix 1. 1.3 The assumptions in respect of future years Scottish Government funding remain unchanged from those reported on 9 May 2024 and range between flat cash (best case) and 1% reduction (worst case) with a mid-range of 0.5% reduction. This assumption is based on the settlement over the last few years and with the most recent year 2024-25 being a 0.5% reduction. It is, however, well publicised the significant financial pressures facing both UK and this will be kept under close review. 1.4 There have been two changes to my previous assumptions around Council Tax: In terms of Council Tax growth previously the Council tax base had been assumed to grow by 0.25% in the worst case scenario, 0.5% in the mid- range scenario and 0.75% in the best case. As a result of a review undertaken by the Assessor at Dunbartonshire and Argyll and Bute Valuation Joint Board a number of self-catering properties have been added to the Council Tax register therefore in 2025-26 only the growth has been increased by 0.25% in all scenarios resulting in additional income of £0.165m in the mid-range. In future years growth falls back to the original estimates. The second adjustment relates to a review Financial Services concluded in relation to Council Tax income received on Second Homes where projections indicate receipts will be £0.328m in excess of budgeted income. This is a positive position and is very close to the original budget agreed it February, however, Members will be aware that the budget was amended in April in response to the level of representations that had been received. 1.5 There have been three changes to the base budget since reported to Policy and Resources Committee on 15 August 2024: The Teachers pay award was originally agreed up to 31 July 2024 as Page 145 Agenda Item 5
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part of a previous 28 month deal and any increase beyond that date had still to be confirmed, however a 3% increase was assumed at that time. The base budget for 2025-26 needs to reflect the full year effect of the 3% increase which amounts to £0.656m. The latest offer in relation to the 2024-25 pay award requires Councils to fund a 3.2% increase with Scottish Government funding between 3.2% and the current pay offers. This is for all pay bargaining groups. As this is more than is currently in the 2024-25, this creates a further net pressure on the base budget of £0.296m. At the time of writing, the teachers pay award has been agreed but SJC and Chief Officers is still in negotiations. In 2023-24 a £1.4m contingency was set aside for inflationary pressures, £0.936m of which was allocated to cover increased utility costs for 2024- 25 based on projections at that time. However based on actual costs at the end of 2023-24 it is estimated that £0.200m of this can be returned to the General Fund in 2024-25 resulting in a reduction to the base budget. 1.6 Assumptions in respect of employee costs for Council services are as follows: The SJC and Chief Officers pay awards for 2024-25 have still to be agreed and may have a further impact on the base budget if the pay award is higher than the updated net pressure of 3.2% now allowed for in the budget. The latest offer has again been rejected by the Trade Unions and it is still unclear at what level the pay award will be agreed for 2024-25 and subsequently the financial impact this will have on future years but this will be kept under review as further information becomes available. The Teachers pay award has been agreed up to 31 July 2024 as part of a previous 28 month deal and a net pressure of 3.2% for the remainder of 2024-25 has now been accounted for within the base budget. At the time of writing this report, the teachers pay award for 2024-25 has been agreed with the Council cost within the figure that is now in the base budget. For future years, the mid-range scenario remains at 2% but a risk remains that it could be higher and this will be closely monitored. Increments are estimated between £0.329m and £0.605m with a mid-range of £0.605m. 1.7 For non-pay inflation, only unavoidable/inescapable inflation has been built in for the best case and mid-range scenarios with a contingency of £0.250m built into the mid-range. A further general inflationary increase has been built into the worst case scenario. 1.8 There are a number of cost and demand pressures for Council services built into each scenario. Changes to these pressures since the report on 15 August 2024 are: Amended – Bus Transport Contracts – a further contract renewal has been Page 146
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received which has increased the cost pressure by £0.167m. New – Stadiums Income Saving – the saving is no longer fully achievable due to lower than anticipated income generation as more clubs are now using the all weather facilities. This will now be considered as part of the Roads and Infrastructure Review (£0.020m). New – Loans Charges – as agreed at Policy and Resources Committee on 15th August borrowing would be taken out to fund some of the costs associated with the weather incident which creates a recurring revenue pressure (£0.080m). New – Migration from Skype for Business to Teams Telephony to ensure those staff who need to make external calls can do so as agreed at Policy and Resources Committee on 15 August 2024. This pressure does not start until 2026-27. New – ICT Equipment for Hybrid Council meetings – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.012m). New – System for Debt Counselling and Welfare Rights Management – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.006m). New – Community Resilience Fund – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.005m). 1.9 In addition to the identified cost and demand pressures an allowance for unidentified cost and demand pressures has been included in mid-range of £0.500m per year (best case scenario £0.250m per year and worst case scenario £1m per year). 1.10 There will be a political decision to be made as to the future allocation to the Health and Social Care Partnership. As part of the budget in February 2024 an indicative flat cash allocation for 2025-26 was agreed which has now increased by £0.180m, as detailed in paragraph 4.1.2, in relation to the HSCP’s share of the Children’s Social Care Pay Uplift. The indicative allocation for 2026-27 increases further by £3.053m to account for the cessation of the one-off saving in relation to the Strathclyde Pension Fund. 1.11 The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustments, non-pay inflation, cost and demand pressures and not factoring in any previous savings decisions or future potential options is an estimated gap over the five year period of £50.223m with a gap of £14.543m in 2025-26. 1.12 The measures to balance the budget over the next five years are as follows: Proposed increase to fees and charges of between 3% and 9% (6% mid- range). Proposed increase to Council Tax (5% increase in 2025-26 in the mid and worst case scenarios rising to 7% in the best case scenario, with a 5% increase in all scenarios in future years). Policy savings already agreed by Council in February 2024. Page 147
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Management/Operational savings already agreed by Council February 2024. Release of Earmarked Reserves as agreed by Council in September 2024. 1.13 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £28.565m with a gap of £9.147m in 2025-26. 1.14 The budget gap in the best case scenario over the five years is £15.644m with a gap of £5.075m in 2025-26 and in the worst case scenario, the budget gap over the five years is £93.220m with a gap of £23.017m in 2025-26. A summary of all three scenarios is included within Appendix 1. 1.15 It is recommended that the Policy and Resources Committee consider the current estimated budget outlook position for the period 2025-26 to 2029-30. Page 148
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 10 OCTOBER 2024 BUDGET OUTLOOK 2025-26 TO 2029-30 2. INTRODUCTION 2.1 This report provides an update to the budget outlook covering the period 2025- 26 to 2029-30, reported to the Policy and Resources Committee on 15 August 2024. 2.2 The budget outlook has been prepared using three different scenarios, best case, worst case and mid-range. Relatively small variations in assumptions can lead to fairly significant changes in the outcome. In the paragraphs that follow, the mid-range outlook is shown, however, all three scenarios are detailed within Appendix 1. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee consider the current estimated budget outlook position for the period 2025-26 to 2029-30. 4. DETAIL 4.1 Funding Scottish Government Finance Settlement 4.1.1 There are no changes to my previous assumptions around the level of future Scottish Government funding at this stage. It is, however, well publicised the significant financial pressures facing both UK and Scottish Government and this may well have an impact for future settlements. The Cabinet Secretary for Finance and Local Government recently reported that the financial situation is not sustainable. This position will be kept under close review and Members updated should any of the assumptions change. The funding assumptions at this stage continue to be set between a 1% reduction (worst case) and flat cash (best case) with a mid-range reduction of 0.5%. 4.1.2 As reported previously to Policy and Resources Committee, in respect of the Children’s Social Care pay uplift, the Scottish Government notified us in June 2024 of Argyll and Bute Council’s share of the £19.861m funding provided which totalled £0.243m. £0.180m of this funding is a straight pass through to the HSCP, therefore the payment made to them will be adjusted accordingly, and £0.063m is for the Education Service. The base budget for Education will be increased accordingly to pay for the uplift therefore this additional funding has no overall impact on the budget gap. 4.1.3 The table below summarises the mid-range scenario estimates based on a Page 149
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0.5% settlement reduction each year. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated SG Funding 244,657 243,434 242,217 241,006 239,801 Children’s Social Care Pay Uplift 243 243 243 243 243 Total Estimated SG Funding 244,900 243,677 242,460 241,249 240,044 Council Tax 4.1.4 The Council Tax base for 2024-25 was set at £63.278m which reflected no inflationary increase as agreed by the Council on 15 April 2024. 4.1.5 Financial Services have concluded a review of Council Tax income received on second homes and projections indicate receipts will be £0.328m over budget. This is a positive position and is very close to the original budget agreed it February, however, Members will be aware that the budget was amended in April in response to the level of representations that had been received. It is assumed that a similar level of income will be received in future years and the budget outlook can be updated to reflect this. 4.1.6 There has been one change to my previous assumptions around the growth in Council Tax. Previously the Council tax base had been assumed to grow by 0.25% in the worst case scenario, 0.5% in the mid-range scenario and 0.75% in the best case. As a result of a review undertaken by the Assessor at Dunbartonshire and Argyll and Bute Valuation Joint Board, a number of self- catering properties have been added to the Council Tax register therefore in 2025-26 only the growth has been increased by 0.25% in all scenarios resulting in additional income of £0.165m in the mid-range. In future years growth falls back to the original estimates. 4.1.7 4.1.8 As reported previously, as part of the 2023-24 budget setting process a business process review was undertaken of the Revenues and Benefits Service where one of the outcomes was anticipated increased Council Tax recoveries equating to £0.200m in 2025-26 which have been built into the budget outlook. This is a reduction of £0.149m from 2024-25 as recoveries are expected to be higher in the first two years of inception dropping down to an almost steady state from 2025-26 onwards. Within this report, I will present the budget gap, prior to any Member based decisions and therefore at this stage in the report, the Council tax base is assumed to remain at the same level as 2024-25. General Fund 4.1.9 As reported in the budget pack in February 2024, reduced employer contribution rates payable to Strathclyde Pension Fund will result in one-off savings in 2024-25 and 2025-26. It was agreed that the saving in each of Page 150
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these years be transferred to the General Fund, with some being used to fund capital expenditure. £9.928m of savings will be transferred to reserves in 2025- 26 in relation to this, this amount relates to the saving for the Council and the HSCP. 4.1.10 It was also agreed at the budget meeting in February 2024 that £2m of the pension fund gain would be released each year for a period of 3 years (2024- 25 through to 2026-27) in order to help bridge the budget gap. 4.1.11 The table below summarises the estimated total funding in the mid-range scenario. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated SG Funding 244,900 243,677 242,460 241,249 240,044 Council Tax Base 63,278 63,278 63,278 63,278 63,278 Council Tax Growth 472 789 1,108 1,428 1,750 Council Tax income on Second Homes in excess of budget 328 328 328 328 328 Adjustment to additional Council Tax recoveries (para 4.1.7) (149) (147) (145) (143) (143) Transfer to Reserves in relation to Strathclyde Pension Fund (9,928) 0 0 0 0 Released Strathclyde Pension Fund Gain 2,000 2,000 0 0 0 Total Estimated Funding 300,901 309,925 307,029 306,140 305,257 4.2 Base Budget 4.2.1 The 2024-25 budget approved by Council on 22 February was £301.885m. An amendment in respect of re-running the Council Tax annual billing amounting to £0.080m was agreed on 15 April 2024 resulting in a revised base budget of £301.965m. 4.2.2 There have been three changes to the base budget since reported to Policy and Resources Committee on 15 August 2024: The Teachers pay award was originally agreed up to 31 July 2024 as part of a previous 28 month deal and any increase beyond that date had still to be confirmed, however a 3% increase was assumed at that time. The base budget for 2025-26 needs to reflect the full year effect of the 3% increase which amounts to £0.656m. The latest offer in relation to the 2024-25 pay award requires Councils to fund a 3.2% increase with Scottish Government funding between 3.2% and the current pay offers. This is for all pay bargaining groups. As this is more than is currently in the 2024-25, this creates a further net Page 151
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pressure on the base budget of £0.296m. At the time of writing, the teachers pay award has been agreed but SJC and Chief Officers is still in negotiations. In 2023-24 a £1.4m contingency was set aside for inflationary pressures, £0.936m of which was allocated to cover increased utility costs for 2024-25 based on projections at that time. However based on actual costs at the end of 2023-24 it is estimated that £0.200m of this can be returned to the General Fund in 2024-25 resulting in a reduction to the base budget. 4.2.3 For future years, there are adjustments required to the base budget from decisions by Council on 22 February 2024 and other adjustments as noted in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 2024-25 301,965 301,965 301,965 301,965 301,965 Adjust for one-off 2024- 25 cost pressures (130) (130) (130) (130) (130) Adjust for one-off 2024- 25 Management/ Operational savings 1,694 1,694 1,694 1,694 1,694 Children’s Social Care Pay Uplift 63 63 63 63 63 Teachers – full year impact of 3% in 2024-25 656 656 656 656 656 0.2% increase in 2024- 25 for all employees excluding Social Work 296 296 296 296 296 Release of contingency back to the general fund (200) (200) (200) (200) (200) Revised Base Budget 304,344 304,344 304,344 304,344 304,344 4.3 Employee Cost Changes Pay Award 4.3.1 The SJC and Chief Officers pay awards for 2024-25 have still to be agreed and may have a further impact on the base budget if the pay award is higher than the updated net pressure of 3.2% now allowed for in the base budget. The latest offer has again been rejected by the Trade Unions and it is still unclear at what level the pay award will be agreed for 2024-25 and subsequently the financial impact this will have on future years but this will be kept under review as further information becomes available. The Teachers pay award has been agreed up to 31 July 2024 as part of a previous 28 month deal and a net pressure of 3.2% for the remainder of 2024- 25 has now been accounted for within the base budget. At the time of writing this report, the teachers pay award for 2024-25 has been agreed with the Council cost within the figure that is now in the base budget. Page 152
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4.3.2 For future years, the previous assumption of a 2% increase remains unchanged. The best case scenario also remains at a 2% increase (on the basis that the increase is not likely to be less than this) and the worst case scenario assumes a 5% increase. The pay assumption is very difficult to predict but there is an expectation as general inflation reduces that pay inflation will also reduce, however, there remains a risk that the pay award could be higher and this will be monitored and updated as necessary. Every 1% over and above what is budgeted would add an additional pressure of circa £1.7m. 4.3.3 On 4 April 2024 a Scottish Statutory Instrument was passed regarding increasing councillors pay with effect from 1 April 2024, the detail of which was presented to Council on 25 April. The financial impact of this is an increase of £0.033m which has been adjusted for within the budget outlook. Discussions continue between the Scottish Government and the Scottish Local Authority Remuneration Committee (SLARC) regarding Councillors remuneration which may have a further impact on the budget outlook position and will be included within the budget estimates at a later date if required. Increments 4.3.4 There are no changes to my previous assumption around the cost of employee increments. It has been assumed that for future years, the best case is assumed to be half of the previous year cost, for mid-range and worst case, assumes equal to the cost in 2024-25 (£0.605m). 4.3.5 Strathclyde Pension Fund As detailed in the budget pack presented to Council in February 2024, the employer contribution rate paid to the Strathclyde Pension Fund will fall from 19.3% to 6.5% in 2024-25 and 2025-26 and rise to a sustainable long-term rate of 17.5% in the 2026-27. The reduction in the first 2 years equates to reduced costs of £6.875m per annum relating to Council employees (excluding HSCP). From 2026-27 the costs will rise again to 17.5% therefore this increase is required to be built into projections from 2026-27 onwards. Teacher Numbers 4.3.6 As part of the 2023-24 Local Government Finance Settlement the Scottish Government held back £45.5m on the condition that Council’s maintained teacher numbers at the 2022 census level. The December 2023 census showed a reduction in teacher numbers of 160. Ultimately, Scottish Government released the £45.5m to all local authorities, regardless of whether they maintained teacher numbers. Scottish Government has, for 2024-25, removed £145.5m from the General Revenue Grant and has instead issued this as a specific grant, conditional on maintaining teacher numbers at the level set out in each Council’s grant letter. For Argyll and Bute Council this is £2.1m and there is an expectation that we will maintain 848 teachers, this was the figure returned in the 2023 census and 13 teachers more than in the base Page 153
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budget. To maintain a figure of 848 teachers would result in a cost pressure of £0.880m. Discussions are continuing between COSLA and the Scottish Government and at this stage the additional cost has not been added into the budget outlook but there remains a risk that if we do not maintain the teacher numbers in our grant letter then some or all of the specific grant could be withheld. 4.3.7 The table below summarises the employee cost movements in the mid-range scenario for Council services. The employee cost increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.4. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Pay Award 3,448 6,651 9,918 13,250 16,649 Pay Award – Elected Members 33 33 33 33 33 Increments 605 1,210 1,815 2,420 3,025 Increase in costs after one-off reduction in Strathclyde Pension Fund rate ceases 0 6,875 6,875 6,875 6,875 Total Employee Cost Changes 4,086 14,769 18,641 22,578 26,582 4.4 Non-Pay Inflation 4.4.1 The Council only include non-pay inflation within the budget where it is deemed to be unavoidable or inescapable. In terms of the budget outlook, unavoidable/inescapable non-pay inflation is built into the best case and mid- range scenarios with a general inflation allowance over and above this built into the worst case. 4.4.2 Officers continue to review areas of non-pay inflation on an ongoing basis. The principle of only budgeting for unavoidable/inescapable remains, however, it has to be noted that in this current financial climate, some budgets with no inflation allowed for are now stretched beyond the point of containing the cost within budget and therefore the budget will now buy less than what it used to be able to buy (so in effect, we will see some cuts as a result). 4.4.3 When creating a budget outlook for future years, there is a risk that inflation assumptions could change during the year. Due to the current inflation uncertainty, it would be prudent to include a contingency for other inflation increases not included in the calculations. A contingency allowance of £0.500m is included within the worst case scenario and a £0.250m allowance included within the mid-range scenario each year. No contingency is included within the best case scenario. This contingency will either be required, reduced or removed to reflect changing circumstances before the 2025-26 budget is set. Page 154
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4.4.4 The table below summarises the non-pay inflation in the mid-range scenario for Council services with more detail available in Appendix 2. The non-pay inflation increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.4. Inflation Category 2025-26 Previous estimates (Aug 2024) £000 2025-26 Updated estimates £000 Increase/ (Decrease) £000 Utilities - Electricity, Gas, Oil, Water 179 173 (6) Street Lighting Electricity 23 30 7 Vehicle Fuel 32 34 2 Vehicle Charging Point Electricity 5 5 0 Central Repairs-Outside Contractors 76 89 13 Waste/Landfill Tax 206 803 597 NPDO/HUB Schools 391 452 61 Community Pool Subsidies 31 37 6 Residential Schools 33 36 3 Pre-Primary Partner Providers 227 197 (30) ICT 210 215 5 Catering Purchases and Milk 64 64 0 Insurance 459 459 0 Bitumen – Roads 15 16 1 Contribution to Joint Boards 38 39 1 Annual External Audit Fee 9 10 1 Public Transport 220 231 11 School Transport 153 153 0 SEPA – Waste Disposal 7 7 0 Contingency for unidentified/ insufficient inflation estimate 250 250 0 Total 2,628 3,300 672 4.4.5 The most significant movement in non-pay inflation since last reported in August 2024 relates to Landfill Tax due to an anticipated increase in rates from 1st April 2025 to bring Scottish Landfill Tax in line with the rest of the UK. This decision is not final yet and will be considered as part of the Scottish Budget however historically Scotland has followed on from the rest of the UK therefore it would be prudent to include this increase at this stage. This would see an increase in the standard rate from £103.70 per tonne to £126.15 per tonne. The estimated financial impact of this is circa £0.700m however due to reduced tonnage volumes in Helensburgh this has a net impact of £0.597m. Note that this is a one-off increase in 2025-26 due to the review currently being undertaken in relation to the landfill tax ban. 4.4.6 The cumulative inflation for years 2026-27 to 2029-30 is noted in the table below and is based on future years estimates of inflation at this point it time, however, due to the volatility of inflation recently it is very difficult to predict and Page 155
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the estimates will be kept under close review. 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Unavoidable/Inescapable 5,444 8,193 11,107 14,203 Total Non-Pay Inflation 5,444 8,193 11,107 14,203 4.5 Cost and Demand Pressures 4.5.1 For a number of years, services have worked on the basis of having to contain any cost and demand pressures within current resources where possible, however, there are a number of cost and demand pressures already identified for Council services which were reported as part of the budget in February 2024. Since the Policy and Resources Committee on 15 August 2024 the following changes have been made to the cost and demand pressures: Amended – Bus Transport Contracts – a further contract renewal has been received which has increased the cost pressure by £0.167m. New – Stadiums Income Saving – the saving is no longer fully achievable due to lower than anticipated income generation as more clubs are now using the all weather facilities. This will now be considered as part of the Roads and Infrastructure Review (£0.020m). New – Loans Charges – as agreed at Policy and Resources Committee on 15th August borrowing would be taken out to fund some of the costs associated with the weather incident which creates a recurring revenue pressure (£0.080m). New – Migration from Skype for Business to Teams Telephony to ensure those staff who need to make external calls can do so as agreed at Policy and Resources Committee on 15 August 2024. This pressure does not start until 2026-27. New – ICT Equipment for Hybrid Council meetings – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.012m). New – System for Debt Counselling and Welfare Rights Management – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.006m). New – Community Resilience Fund – Release of Earmarked Reserve to the General Fund as agreed by Council in September results in a recurring cost pressure (£0.005m). 4.5.2 As with inflation, when creating a budget outlook beyond one year, there is a risk that unknown cost and demand pressures will emerge that have not been included within the outlook. It is suggested that a £0.250m general allowance for this is included within the best case scenario, £0.500m within the mid-range scenario and a £1m allowance included within the worst case scenario each year. 4.5.3 The cost pressures are detailed in appendix 3 and summarised in the table below and will be subject to review during the financial year. 2025-26 2026- 2027-28 2028- 2029-30 Page 156
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£000 27 £000 £000 29 £000 £000 Universal Credit – HB Admin Grant 40 80 120 160 200 ASN Support 202 410 624 624 624 SEEMiS Membership Fees 0 7 7 7 7 Maintenance/Repair of School Estate 360 360 360 360 360 Election costs 0 0 350 0 0 ICT Equipment for Hybrid Council Meetings 12 12 12 12 12 System costs for Debt Counselling and Welfare Rights Management 6 6 6 6 6 Community Resilience Fund 5 5 5 5 5 Education ICT Network Infrastructure 295 295 348 348 348 Compliance with BMW Ban 462 925 925 925 925 Local Development Plan 0 50 0 0 0 Increase to borrowing costs as a result of investment agreed at February 2024. 282 282 282 282 282 Civica Revenue and Benefits System 0 0 63 63 63 Bus Transport Contracts 877 877 877 877 877 Roads & Amenity Services Income - Saving no longer achievable 100 100 100 100 100 Stadiums Income – Saving no longer fully achievable 20 20 20 20 20 Loans Charges for Weather Incident as agreed at P&R Committee 80 80 80 80 80 Migration from Skype for Business to Teams Telephony 0 63 300 300 300 Insurance premium increases 309 309 309 309 309 Allowance for pressures in future years 500 1,000 1,500 2,000 2,500 Total Cost and Demand Pressures 3,550 4,881 6,288 6,478 7,018 4.5.4 The cost and demand pressures relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.4. 4.6 Health and Social Care Partnership 4.6.1 The Council, at the budget meeting on 24 February 2024, agreed a base allocation to the HSCP of £78.611m for 2024-25 as well as an indicative flat cash allocation for 2025-26. The indicative allocation for 2026-27 onwards increases by £3.053m to account for the cessation of the one-off employer Page 157
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contribution rate saving relating to the Strathclyde Pension Fund. 4.6.2 As previously reported and detailed in paragraph 4.1.2, funding has been received in respect of the Children’s Social Care pay uplift of which £0.180m is a straight pass through to the HSCP therefore the payment made to them will increase by this amount each year. 4.6.3 In the budget outlook, I have assumed flat cash allocations across all scenarios, with the exception of the Strathclyde Pension Fund adjustment. These are only assumptions and it will be a matter for Council to consider as part of the budget process next year. 4.6.4 Social Work services have already identified a number of cost and demand pressures and these are summarised below and included within Appendix 4 for information purposes. It is expected that the HSCP absorb their cost and demand pressures from their funding allocation. Note that these only extend to three years rather than the five years within this Council budget outlook. 2025-26 £000 2026-27 £000 2027-28 £000 Pay Inflation 1,049 2,301 3,590 Pay Increments 172 344 516 Non-Pay Inflation 950 1,997 3,106 Care Services for Older People 447 901 1,362 Care Services for Younger Adults 60 121 184 Adult Services - Supported Living 112 223 335 Adult Services – Mental Health 65 131 199 Continuing Care for Looked After Children 939 993 1,048 Unknown Cost and Demand Pressures 500 1,000 1,500 Total Cost Increase estimates for Social Work 4,294 8,011 11,840 4.7 Live Argyll 4.7.1 In the budget outlook, I have assumed allocations to Live Argyll on the same basis as the Scottish Government funding assumptions which range from a 1% reduction (best case) and flat cash (worst case) with a mid-range reduction of 0.5%. This is only an assumption and it will be a matter for Council to consider as part of the budget process next year. The indicative allocation for 2026-27 onwards also increases by £0.118m to account for the cessation of the one-off employer contribution rate saving relating to the Strathclyde Pension Fund. 4.8 Estimated Budget Gap PRIOR to Measures to Balance the Budget 4.8.1 The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustment, non-pay inflation and cost and demand pressures is summarised in the table below. This is the budget gap prior to factoring in any previous savings decisions or potential options towards Page 158
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balancing the budget. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 304,344 304,344 304,344 304,344 304,344 Employee Cost Changes 4,086 14,769 18,641 22,578 26,582 Non-Pay Inflation 3,300 5,444 8,193 11,107 14,203 Cost and Demand Pressures 3,550 4,881 6,288 6,478 7,018 Adjustment to HSCP Payment re SPF gain 180 3,233 3,233 3,233 3,233 Adjustment to Live Argyll Payment (16) 102 101 101 100 Total Estimated Expenditure 315,444 332,773 340,800 347,841 355,480 Estimated Funding 300,901 309,925 307,029 306,140 305,257 Estimated Budget Surplus / (Gap) Cumulative (14,543) (22,848) (33,771) (41,701) (50,223) 4.9 Measures to Balance the Budget 4.9.1 In 2024-25 a general inflationary increase of 6% was applied to fees and charges. For the budget outlook a range of between 3% (worst case) and 9% (best case) with a mid-range of 6% has been included. There is no general inflationary increase of 6% applied to Piers and Harbours to ensure that any income generated is not in excess of expenditure. 4.9.2 Some of the policy options were agreed at the Council meeting on 22 February 2024 that impacted on 2025-26 and beyond. These are now factored into the budget outlook, reducing the budget gap. 4.9.3 In terms of Council Tax, a 5% increase had been assumed in the mid and worst case scenarios and a 7% increase in the best case scenario for 2025-26 on the basis that the majority of Councils increased their Council Tax by at least 5% in 2023-24 prior to the freeze in 2024-25. From 2026-27 a 5% increase has been assumed in all scenarios. In light of the significant budget gap, this is an area that Members will require to give due consideration to as part of the budget setting for 2025-26 and beyond. 4.9.4 During 2024-25 a review was undertaken of all earmarked reserves to establish whether they were still required for the originally intended purpose. The results of the review were presented to Council on 26 September 2024 where Members agreed to release £1.558m of existing earmarked reserves back to the General Fund to help bridge the budget gap in 2025-26. This is one-off in nature and therefore reduces the gap in 2025-26 only. Recurring cost pressures totalling £0.023m were also identified in relation to this which have been incorporated at Section 4.5 above. 4.9.5 The table below summarises the proposed measures to balance the budget in the mid-range scenario. Page 159
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2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Fees and Charges Increase 385 771 1,156 1,541 1,927 Council Tax Increase 3,170 6,530 10,075 13,812 17,753 Previously agreed Policy Savings 248 724 1,360 1,829 1,943 Previously agreed Management/Operational Savings 35 35 35 35 35 Earmarked Reserves released to the General Fund 1,558 0 0 0 0 Total Measures to Balance the Budget 5,396 8,060 12,626 17,217 21,658 4.10 Estimated Budget Gap AFTER Measures to Balance the Budget 4.10.1 The table below summarises the estimated budget gap in the mid-range scenario. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated Budget Gap Prior to Measures to Balance Budget (14,543) (22,848) (33,771) (41,701) (50,223) Savings Measures 5,396 8,060 12,626 17,217 21,658 Estimated Budget Surplus / (Gap) Cumulative (9,147) (14,788) (21,145) (24,484) (28,565) Estimated Budget Surplus / (Gap) In Year (9,147) (5,641) (6,357) (3,338) (4,081) 4.10.2 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £28.565m with a gap of £9.147m in 2025-26. 4.10.3 The budget gap in the best case scenario over the five years is £15.644m with a gap of £5.075m in 2025-26 and in the worst case scenario, the budget gap over the five years is £93.220m with a gap of £23.017m in 2024-25. A summary of all three scenarios is included within Appendix 1. 4.10.4 The changes from the previous anticipated outlook reported to the Council on 15 August 2024 are summarised in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Previously reported budget surplus / (gap) Cumulative (9,484) (13,730) (19,610) (22,693) (26,504) Increase in Council Tax Growth by 0.25% in 165 174 185 194 205 Page 160
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2025-26 Teachers Pay Award 2024-25 – full year impact of 3% increase (656) (656) (656) (656) (656) 0.2% increase in 2024- 25 Pay Award for all employees (Excl. SW) (296) (296) (296) (296) (296) Release of inflationary contingency in 2024-25 to General Fund 200 200 200 200 200 Council Tax Income on Second Homes in excess of budget 328 328 328 328 328 Adjustment to Non-Pay Inflation (672) (455) (706) (971) (1,252) Amendment to Cost Pressure – Bus Contracts (167) (167) (167) (167) (167) New Cost Pressure - Stadiums Income – Saving no longer fully achievable (20) (20) (20) (20) (20) New Cost Pressure - Loans Charges for Weather Incident as agreed at P&R Committee (80) (80) (80) (80) (80) New Cost Pressure - Migration from Skype for Business to Teams Telephony 0 (63) (300) (300) (300) New Cost Pressure – Hybrid Council Meetings Equipment Maintenance (12) (12) (12) (12) (12) New Cost Pressure – Maintenance of Debt Counselling and Welfare Rights System (6) (6) (6) (6) (6) New Cost Pressure – Community Resilience Fund (5) (5) (5) (5) (5) Earmarked Reserves released to the General Fund 1,558 0 0 0 0 Revised Budget Surplus / (Gap) Cumulative (9,147) (14,788) (21,145) (24,484) (28,565) 5. CONCLUSION 5.1 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £28.565m with a gap of £9.147m in 2025-26. Council Page 161
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officers are continuing to explore savings options during 2024-25 and these will be presented to Members at a future date. 5.2 This is a very challenging budget outlook position and the level of Scottish Government grant and the pay award are two assumptions that could alter the figures significantly. These will be kept under close review and the budget outlook updated as and when further information becomes available. 6. IMPLICATIONS 6.1 Policy - Sets out the budget outlook that provides the financial envelope for policy decisions. 6.2 Financial - Sets best, worst and mid-range scenarios in respect of the budget outlook. The medium to longer term financial strategy is being updated and the Council are actively continuing to pursue opportunities to mitigate against future budget gaps. 6.3 Legal - None directly from this report but Council will need to balance the budget. 6.4 HR - None directly from this report but there is a strong link between HR and budgets. 6.5 Fairer Scotland Duty - See below 6.5.1 Equalities None directly from this report but any proposals to address the estimated budget gap will need to consider equality issues. 6.5.2 Socio Economic Duty None directly from this report but any proposals to address the estimated budget gap will need to consider socio economic issues. 6.5.3 Islands Duty None directly from this report but any proposals to address the estimated budget gap will need to consider any island specific issues. 6.6 Climate Change The Council is committed to addressing climate change and reviews how Services are delivering this on an ongoing basis within the available budget resources. 6.7 Risk - None directly from this report but any proposals to address the estimated budget gap will need to consider risk. 6.8 6.9 Customer Service – The Rights of the Child (UNCRC) - None directly from this report but any proposals to address the estimated budget gap will need to consider customer service. None Kirsty Flanagan Executive Director/Section 95 Officer 27 September 2024 Policy Lead for Finance and Commercial Services: Councillor Ross Moreland APPENDICES: Page 162
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Appendix 1 – Budget Outlook, Best, Worst and Mid-Range Scenarios Appendix 2 – Non Pay Inflation Appendix 3 – Cost and Demand Pressures (Council Services) Appendix 4 – Cost and Demand Pressures (Social Work) For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 163
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BUDGET OUTLOOK 2025-26 to 2029-30 APPENDIX 1 POLICY AND RESOURCES COMMITTEE - 10 OCTOBER 2024 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 Base Budget Adjustments 2,269 2,269 2,269 2,269 2,269 2,379 2,379 2,379 2,379 2,379 2,371 2,371 2,371 2,371 2,371 Revised Base Budget 304,234 304,234 304,234 304,234 304,234 304,344 304,344 304,344 304,344 304,344 304,336 304,336 304,336 304,336 304,336 Pay Award 3,448 6,651 9,918 13,250 16,649 3,448 6,651 9,918 13,250 16,649 11,414 22,873 34,905 47,539 60,805 Pay Award - Elected Members 33 33 33 33 33 33 33 33 33 33 33 33 33 33 33 Pay Increments 329 658 986 1,315 1,643 605 1,210 1,815 2,420 3,025 605 1,210 1,815 2,420 3,025 Adjustment to Employee Base 0 6,875 6,875 6,875 6,875 0 6,875 6,875 6,875 6,875 0 6,875 6,875 6,875 6,875 Total Employee Cost Changes (Council Services) 3,810 14,217 17,812 21,473 25,200 4,086 14,769 18,641 22,578 26,582 12,052 30,991 43,628 56,867 70,738 Non-Pay Inflation - Council Services 2,739 4,537 6,920 9,442 12,116 3,300 5,444 8,193 11,107 14,203 5,461 9,555 14,275 19,193 24,325 Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 ASN Support 202 410 624 624 624 202 410 624 624 624 202 410 624 624 624 SEEMIS Membership Fees 0 7 7 7 7 0 7 7 7 7 0 7 7 7 7 Maintenance/Repair of School Estate 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 Election Costs 0 0 327 0 0 0 0 350 0 0 0 0 370 0 0 Equipment Maintenance associated with Hybrid Council Meetings 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 Maintenance of Debt Counselling and Welfare Rights System 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Community Resilience Fund 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Education ICT Network Infrastructure 295 295 348 348 348 295 295 348 348 348 295 295 348 348 348 Compliance with BMW Ban 462 925 925 925 925 462 925 925 925 925 2,116 925 925 925 925 Planning (Local Development Plan) 0 50 0 0 0 0 50 0 0 0 0 50 0 0 0 Borrowing to pay for weather incident costs 282 282 282 282 282 282 282 282 282 282 282 282 282 282 282 Civica Revenue and Benefits System 0 0 37 37 37 0 0 63 63 63 0 0 137 137 137 Bus Transport Contracts 877 877 877 877 877 877 877 877 877 877 877 877 877 877 877 Roads and Amenity Services saving no longer achievable in full 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Stadiums Income saving no longer achievable in full 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Loans Charges relating to Weather Incident 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Migration from Skype for Busines to Teams Telephony 0 19 282 282 282 0 63 300 300 300 0 108 318 318 318 Increase in insurance premiums 309 309 309 309 309 309 309 309 309 309 309 309 309 309 309 Allowance for Cost and Demand Pressures Future Years 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000 Total Cost and Demand Pressures 3,300 4,337 5,471 5,434 5,724 3,550 4,881 6,288 6,478 7,018 5,704 5,926 7,900 8,570 9,610 Adjustment to Health and Social Care Partnership Payment 180 3,233 3,233 3,233 3,233 180 3,233 3,233 3,233 3,233 180 3,233 3,233 3,233 3,233 Adjustment to Live Argyll Management Fee (33) 86 85 84 83 (16) 102 101 101 100 0 118 118 118 118 Total Estimated Expenditure PRIOR to measures to balance the budget 314,230 330,643 337,755 343,899 350,590 315,444 332,773 340,800 347,841 355,480 327,733 354,159 373,490 392,317 412,360 Scottish Government Grant 246,129 246,129 246,129 246,129 246,129 244,900 243,677 242,460 241,249 240,044 243,670 241,236 238,826 236,440 234,078 Transfers to/from Reserves - Strathclyde Pension Fund (7,928) 2,000 0 0 0 (7,928) 2,000 0 0 0 (7,928) 2,000 0 0 0 Council Tax 64,086 64,565 65,047 65,533 66,020 63,929 64,248 64,569 64,891 65,213 63,778 63,940 64,104 64,268 64,427 Total Funding 302,287 312,694 311,176 311,662 312,149 300,901 309,925 307,029 306,140 305,257 299,520 307,176 302,930 300,708 298,505 Budget Surplus / (Gap) PRIOR to measures to balance the budget (11,943) (17,949) (26,579) (32,237) (38,441) (14,543) (22,848) (33,771) (41,701) (50,223) (28,213) (46,983) (70,560) (91,609) (113,855) Measures to Balance the Budget: Fees and Charges 578 578 578 1,156 1,156 385 771 1,156 1,541 1,927 193 385 578 771 963 Council Tax Increase above SG Funding 4,449 7,873 11,492 15,317 19,357 3,170 6,514 10,042 13,762 17,684 3,162 6,490 9,993 13,679 17,557 Council Tax Increase (Growth element) 0 89 157 230 306 0 16 33 50 69 0 32 65 100 137 Management/Operational Savings agreed Feb 2023 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 Policy Savings Agreed Feb 2023 248 724 1,360 1,829 1,943 248 724 1,360 1,829 1,943 248 724 1,360 1,829 1,943 Earmarked Reserves Released to the General Fund 1,558 0 0 0 0 1,558 0 0 0 0 1,558 0 0 0 0 Total Measures to Balance the Budget 6,868 9,299 13,622 18,567 22,797 5,396 8,060 12,626 17,217 21,658 5,196 7,666 12,031 16,414 20,635 Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (5,075) (8,650) (12,957) (13,671) (15,644) (9,147) (14,788) (21,145) (24,484) (28,565) (23,017) (39,317) (58,529) (75,195) (93,220) Budget Surplus / (Gap) In Year AFTER measures to balance the budget (5,075) (3,575) (4,307) (714) (1,974) (9,147) (5,641) (6,357) (3,338) (4,081) (23,017) (16,299) (19,212) (16,666) (18,024) Mid-Range Scenario Worst Case ScenarioBest Case Scenario Page 164
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# NON-PAY INFLATION (COUNCIL) Appendix 2 Service Category Basis of Inflation Inflation Percentage Mid Range 2025/26 Council Wide Electricity Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 115,736 Council Wide Gas Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 23,290 Council Wide Heating Oils Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 11,279 Council Wide Solid Fuel Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 8,116 Council Wide Water Charges Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 15,967 Council Wide Vehicle Fuel Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 33,783 Council Wide Central Repairs - Outside Contractors Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 89,119 Council Wide Insurances Mid-point set at 20% for 2025/26 per uplifts in 2024/25. Reduced to 15% in subsequent years, with 0.5% tolerance for best and worst case. 20.00% 459,473 Council Wide Contribution to Joint Boards Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 39,361 Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 250,000 1,046,124 Education Pre-Primary Partner Provider Uplift Estimate for the increase in the Real Living Wage, with a tolerance of 0.5% for best and worst case.To be updated when new RLW figure is announced in November 2024. 5.00% 197,070 Education External School Placements Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 36,106 Commercial Services Catering Purchases Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 63,784 Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 8,407 Legal & Regulatory Support Leisure SLA-Atlantis Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 28,529 Legal & Regulatory Support NPDO-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 366,569 Legal & Regulatory Support NPDO-Utilities Rebate Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% (13,867) Legal & Regulatory Support NPDO-Electricity Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 18,308 Legal & Regulatory Support NPDO-Gas Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 7,420 Legal & Regulatory Support NPDO-Heating Oil Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 2,909 Legal & Regulatory Support NPDO-LPG Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 2,532 Legal & Regulatory Support NPDO-Water Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 10,881 Legal & Regulatory Support HUB-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 57,372 786,020 Customer and Support Services ICT Estimate added at 10% to reflect input from ICT on increasing costs. 10.00% 214,650 Financial Services Annual External Audit Fee Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 9,529 Roads and Infrastructure Public Transport Reflects a 3% uplift for annual inflation set within the terms of the contracts between the Council and the service providers. 3.00% 231,131 Roads and Infrastructure School Transport Reflects a 3% uplift for annual inflation set within the terms of the contracts between the Council and the service providers. 3.00% 152,562 Roads and Infrastructure Waste PPP-Private Contractor Inflation Based on 85% of an estimate for RPIX Rate at 2025 Q1 tracking the Bank of England CPI forecast for CPI at February 2024, with a 0.5% tolerance for best and worst case. 3.00% 224,792 Roads and Infrastructure Waste PPP-Central Government Inflation Based on Landfill Tax increase between 23/24 and proposed 24/25 rate with a 0.5% tolerance for best and worst case. 21.65% 508,770 Roads and Infrastructure Helensburgh Waste Disposal Costs Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 4.20% 68,875 Roads and Infrastructure Scottish Environmental Protection Agency Reflects the annual inflation trend in the 2023/24 and 2024/25 financial years with a 0.5% tolerance for best and worst case. 8.00% 7,211 Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 15,639 Roads and Infrastructure Electricity - Street Lighting Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 29,915 Roads and Infrastructure Electricity - Vehicle Charging Points Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 4,781 1,467,855 3,299,999 Council Wide Total Executive Director Douglas Hendry - Total Executive Director Kirsty Flanagan - Total Total Non-Pay Inflation in the Mid Range Page 165
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COUNCIL COST AND DEMAND PRESSURES 2025-26 to 2029-30 Department Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Executive Director - Kirsty Flanagan Financial Services Universal Credit “Full” Service went live in Sept 2018, managed migration for working age claimants began in August 2023 and will be completed by December 2025. Details of the migration of Pension age Housing Benefit claimants have not yet been released initial indications was that the overall migration to Pension Credit will be completed in 2028/2029 although that looks unlikely now. The DWP will reduce the Housing Benefit Administration Subsidy they pay to the Council as some claimants come off of Housing Benefit processed by Council staff and go onto Universal Credit processed by the DWP. The Council’s caseload has reduced since implementation of Universal Credit but it is hard to predict just how quickly the rest of the caseload will migrate from Housing Benefit to Universal Credit between now and 2028/2029. These figures represent our best estimates at this time. 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 Executive Director - Douglas Hendry Education The demand for ASN support in Argyll and Bute has continued to grow with a significant increase in, and early identification of children and young people presenting with complex additional support needs, including mental health difficulties which manifests often in dysregulated behaviours. It is anticipated that growth continues over the next 5 years however the extent of this growth is difficult to determine. Scottish Government statistics show that the number of pupils identified with ASN has increased markedly since 2010 and there continue to be year on year increases. These increases are likely due to continue as we see the impact of the Covid 19 pandemic on children and young people who were born from 2020 onwards and as we work with partners to streamline assessment processes which help us to understand need more thoroughly. Scottish Government statistical datasets show that the percentage of school roll in mainstream schools of pupils with ASN has increased by approximately 3% year on year. Within many authorities, this means increased numbers of children accessing specialist provision. As Argyll and Bute do not have equitable access to Specialist provision in all areas, the cost pressure associated with offering appropriate support within our local schools continues to increase in line with need. 202 410 624 624 624 202 410 624 624 624 202 410 624 624 624 Executive Director - Douglas Hendry Education The SEEMiS group, provider of the Council's Education Management Information System, recently reviewed their long term financial plan and it is anticipated there may be a small pressure from 2026-27 onwards. 0 7 7 7 7 0 7 7 7 7 0 7 7 7 7 Executive Director - Douglas Hendry Education There is an ongoing need for the Council to manage the maintenance/repair of Schools estate through the education central repairs budget. The demand on this budget has continued to increase due to the amount of statutory maintenance work and emergency repairs which no longer allows for any planned maintenance to be carried out. The cost of planned maintenance has fallen on the service which cannot be sustained. Failure to carry out planned maintenance will impact significantly on the cost of emergency repairs in the future. The Council has over 75 school buildings to maintain and more reactive maintenance work is required from Education Central Repairs due to reduced capital funding. 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 Executive Director - Douglas Hendry Legal and Regulatory Services Estimated cost (to be borne by the Council) of carrying out local Government elections in May 2027 (and in financial year 2027/28). Operating approx. 100 polling stations and carrying out poll and count for 11 Multi member wards – requiring 11 separate counts 0 0 327 0 0 0 0 350 0 0 0 0 370 0 0 Executive Director - Douglas Hendry Legal and Regulatory Services As a result of the Earmarked Reserve associated with Hybrid Council meetings being released back to the General Fund, as presented to Council on 26th September 2024, recurring funding is required to maintain the ICT Equipment. 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 Executive Director - Douglas Hendry Legal and Regulatory Services As a result of the Earmarked Reserve associated with the Debt Counselling and Welfare Right Management System being released back to the General Fund, as presented to Council on 26th September 2024, recurring funding is required to maintain the system. 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Non Departmental Non Departmental/Legal & Regulatory Support As a result of the Earmarked Reserve associated with the Community Resilience Fund being released back to the General Fund, as presented to Council on 26th September 2024, recurring funding is required based on historic spend. 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Executive Director - Douglas Hendry and Kirsty Flanagan Education and ICT The Education ICT Network infrastructure in its current design is no longer suitable to support the future delivery of the education digital learning vision and strategy. It requires a transformative technology upgrade, improved security, and reconfiguration to support in-school and at home learning. There are increased security threats and risks to the corporate and education networks by retaining the education network in its present state. ICT does not have the resource or capacity to undertake a strategic transformation of this scale and complexity without significant investment in hardware and software solutions, and additional engineering resources. It is anticipated a programme of works could take up to two years to fully deliver, and due to the rising security threats, commencement by Summer 2024 is recommended. Capital Costs and revenue costs for 2024-25 have been identified through repurpose of earmarkings. The cost pressure for Education from 2025-26 is £180k for specialist software licensing and an annual revenue requirement for additional engineering resource of £115k as a future cost pressure for ICT. 295 295 348 348 348 295 295 348 348 348 295 295 348 348 348 Best Case Mid Range Scenario Worst Case APPENDIX 3 Page 166
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COUNCIL COST AND DEMAND PRESSURES 2025-26 to 2029-30 Department Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Best Case Mid Range Scenario Worst Case APPENDIX 3 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Achieving compliance with ban on biodegradable municipal waste (BMW) in 2025. This is the estimated revenue costs from potential scenarios, remaining in or coming out of the current waste PPP contract. Coming out of the Waste PPP contract would create an additional one-off cost (reflected in the worst case senario in financial year 2025-26). Due to the complexity of the model, estimates are subject to change and Caledonian Economic Consultants are currently updated the figures in the original options appraisal. The best case scenario reflects option 4 detailed in the report to the Environment, Development and Infrastructure Committee on 01/12/2022. The worst case scenario reflects option 3 included in the same report and takes into account the risk that the SG will not agree a derogation. The mid-range scenario assumes that the positive discussions with the Scottish Government will result in the Scottish Government contributing towards the pressure facing the Council. 462 925 925 925 925 462 925 925 925 925 2,116 925 925 925 925 Executive Director - Kirsty Flanagan Development & Economic Growth Local development plan will require to be done under the new Planning legislation which is a revised process from the current one and will have a 10 year life. The new process has 2 stages where there is likely to be a cost pressure - a gate check followed by an examination some time later. 0 50 0 0 0 0 50 0 0 0 0 50 0 0 0 Executive Director - Kirsty Flanagan Financial Services/Roads and Infrastructure Services At the budget setting meeting in February 2024 it was agreed to borrow to pay for the £4.348m of costs relating to the weather incident that were not claimable through the Bellwin scheme. Whilst the Council secured additional funding in relation to the weather related costs, this allowed the Council to freeze the Council Tax, therefore the borrowing is still required, some in relation to the weather cost and some in relation to other capital investments. 282 282 282 282 282 282 282 282 282 282 282 282 282 282 282 Executive Director - Kirsty Flanagan Financial Services The Council’s contract with Civica for the Revenue and Benefits Management System ends in August 2024, this is the system that allows us to bill and collect Council Tax and administer Housing Benefit on behalf of the UK government under statute. In addition the contract for the corporate Electronic Document Management system currently used by Revenue and Benefits services, Social Care, Human Resources and Creditors will end in September 2024. The Council has been engaged in discussions with the supplier of both systems, Civica for around a year to negotiate a reasonable way forward before Civica press ahead with plans to migrate their systems to the Cloud and remove its support and development of its existing on premise solutions. The outcome of these discussions is an extension to the contracts for current on premise solutions for three further years to August/September 2027 with full support, however with increases in annual recurring support and maintenance charges and licensing costs. Beyond that three year period we expect significant increases in charges as the supplier moves the systems to the Cloud. The cost pressure for 2027-28 onwards will be added when more information becomes available. 0 0 37 37 37 0 0 63 63 63 0 0 137 137 137 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Bus Transport contracts have seen a siginificant increase in new contract prices due to increased costs for fuel, insurance, maintenance, regualtory compliance and driver wages. New contracts have seen a combined annual increase of £710k across Argyll and Bute Work ongoing on whether savings could be made by reducing services or providing services in a different manner. 877 877 877 877 877 877 877 877 877 877 877 877 877 877 877 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Previously agreed saving from 2018-19 for Roads and Amenity Services Charging (TB13b) is now not fully achievable with a shortfall of £100k. Limited resources within Roads and Infrastructure Services has hampered the ability to procure external work and therefore the income generation expected as part of this saving. Further possible methods to secure external income will be looked at as part of the RIS Review. 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Previously agreed saving from 2018-19 for Stadiums (TB12b) is now not fully achievable with a shortfall of £20k. More clubs are now using the all weather facilities and this has had an impact on Council income that we are unlikley to see improve. Further possible methods to secure external income will be looked at as part of the RIS Review. 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Loans charge for borrowing agreed at P&R on 15 August 2024 to cover £2.029m of the Weather Incident costs. £50k of the loans charges has been funded from elsewhere within the current budget. 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Executive Director - Kirsty Flanagan ICT Migration from Skype for Business to Teams Telephony to ensure those staff who need to make and receive external calls can do so. This was agreed at Policy & Resources Committee on 15 August. 0 19 282 282 282 0 63 300 300 300 0 108 318 318 318 Council Wide Council Wide Rightsize Council Insurance Budget - Insurance premiums have risen higher than previous inflationary forecasts due to changes in law, Increase in building values, higher contractor costs for building works, repairs and higher component parts for cars - Inflation 22% 309 309 309 309 309 309 309 309 309 309 309 309 309 309 309 Council Wide Council Wide General provision for unidentified Cost and Demand Pressures 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000 TOTAL 3,300 4,337 5,471 5,434 5,724 3,550 4,881 6,288 6,478 7,018 5,704 5,926 7,900 8,570 9,610 Page 167
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# SOCIAL WORK COST AND DEMAND PRESSURES - 2025-26 to 2027-28 APPENDIX 4 Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 All Social Work Estimated Pay inflation reflecting a best case 2%, a mid-range of 3% for 2024/25 then 2% for 2025/26 and 2026/27 and a worst case of 5%. Adjusted for the impact of the reduction in the employer's pension contribution rate to 6.5% in 2024/25 and 2025/26 and to 17.5% in 2026/27. 699 1,526 2,369 1,049 2,301 3,590 1,748 3,583 5,802 All Social Work Estimated Pay increments, best case is that 50% of the incremental changes based on 2023/24 are absorbed and in the mid-range and worst case, the increase is in line with the increase in 2023/24. 86 172 258 172 344 516 172 344 516 All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable inflation and worst case. 775 1,583 2,452 869 1,824 2,838 981 2,067 3,231 All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are recharged to Social Work. 66 142 221 81 173 268 96 204 316 Adult Care Older People Demand Growth: The number of older people is increasing and older people are living longer with significant health and support needs and significant expectations of the support they are entitled to receive. Demand pressure estimates 3% growth in homecare and care home placements, this increase is supported by the growth in clients and care requirements over a number of years although in some areas the service capacity is being fully utilised and service expansion is proving difficult. The best case assumes a 0% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 1.5% growth and the worst case reflects 3% growth. 0 0 0 447 901 1,362 893 1,816 2,769 Adult Care Younger Adults Demand Growth - Physical Disability: There has been continuing increase in demand for care and support services for profoundly disabled younger adults (ie under 65) whose parents have historically provided care but are no longer able to. The best case assumes a 1% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 2% growth and the worst case reflects 3% growth. 30 60 91 60 121 184 90 183 279 Adult Care Mental Health Demand Growth - There has been a continuing increase in demand for residential placements and supported living for mental health services. The best case assumes a 1% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 2% growth and the worst case reflects 3% growth. 32 65 98 65 131 199 97 198 302 Children and Families Looked After Children Demand Growth - there is a continuing demand for placements of children who are cared for by the HSCP. The best case scenario is that the expected additional demand can be funded from within existing resources as a result of planned improvements to the service delivery model (eg shift away from high cost external residential care to local foster and kinship care), the mid case reflects that additional demand in 24/25 be funded from existing resource with £250k per annum thereafter and the worst case reflects £250k per annum. 26 53 80 53 107 162 79 161 245 Children and Families Looked After Children Budget Adjustment - to reflect significant increase in demand for placements in external residential care facilities. 886 886 886 886 886 886 886 886 886 Adult Care Mental Health Budget Adjustment - The Mental Health Supported Living and Residential budgets are carrying a recurring unbudgeted commitment. To address this situation, it is proposed to continue to realign the budget over 2025-26, 2026-27 and 2027-28 whilst also reviewing cases and redesigning services. The adjustment will be reviewed annually to reflect spending reductions delivered as well as any changes to funding and practice resulting from the implementation of the Independent Review of Adult Social Care. 112 223 335 112 223 335 112 223 335 All Social Work Allowance for unknown cost and demand pressures which could arise. The best case assumes unknown pressures totalling £250k per annum, the mid range £500k per annum and the worst case £750k per annum. 250 500 750 500 1,000 1,500 750 1,500 2,250 TOTAL UNFUNDED COST AND DEMAND PRESSURES 2,962 5,210 7,540 4,294 8,011 11,840 5,904 11,165 16,931 Worst CaseMid RangeBest Case Page 168
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CHIEF EXECUTIVE 10 OCTOBER 2024 SINGLE AUTHORITY MODEL - UPDATE 1.0 EXECUTIVE SUMMARY 1.1 A report was tabled at the Policy and Resources (P&R) Committee held on 7th December 2023 to advise Members that Scottish Ministers had formally welcomed the Council’s involvement in discussions regarding the development of alternative governance models, such as a Single Authority Model (SAM). 1.2 This paper provides Members with an update on the key activities that have been undertaken in the interim period. 1.3 It is recommended that Members:- • Consider the updates regarding the ongoing work in respect of a SAM, as set out at 4.3 and 4.4; and • Note that further progress reports will be prepared for future meetings of the P&R Committee. Page 169 Agenda Item 6
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CHIEF EXECUTIVE 10 OCTOBER 2024 SINGLE AUTHORITY MODEL - UPDATE 2.0 INTRODUCTION 2.1 A report was tabled at the P&R Committee held on 7th December 2023 to advise Members that Scottish Ministers had formally welcomed the Council’s involvement in discussions regarding the development of alternative governance models, such as a SAM. 2.2 This paper provides Members with an update on the key activities that have been undertaken in the interim period. 3.0 RECOMMENDATIONS 3.1 It is recommended that Members:- • Consider the updates regarding the ongoing work in respect of a SAM, as set out at 4.3 and 4.4; and • Note that further progress reports will be prepared for future meetings of the P&R Committee. 4.0 DETAIL 4.1 Argyll and Bute is made up of a rich mix of remote, rural and island communities, which present a number of challenges in terms of service delivery. In recognition of the unique demographics and geography, and the numerous strands of public sector reform that the Scottish Government has committed to, we are making a shift in public sector structures through increased collaboration and joint working. However, there is a need to build on this in order to address the challenges we face and to realise the full potential of the area, via a whole system approach such as a SAM. 4.2 Public sector service sustainability in Argyll and Bute requires a multi-agency integrated model, a variety of hyper local delivery models, robust infrastructure, and the coordination of planning and commissioning for the longer term, which supports public sector organisations to meet their legislative and public duties. Page 170
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4.3 Since the previous update provided to members at the P&R Committee in December 2023 the Council have been continuing to work with the Scottish Government and key partners on developing the concept of a SAM for Argyll and Bute. A summary of the key activities undertaken are provided below:- 4.3.1 Engagement with NHS/HSCP colleagues A workshop was held on 12 December 2023 with a range of colleagues from across the Argyll and Bute HSCP and NHS Highland to consider the key drivers and benefits of looking at alternative governance arrangements for Argyll and Bute, for example:- improved outcomes for communities; build on current levels of integration; development of partnership working/joint planning at a strategic level; bespoke/place based approach to service delivery; local decision making/democratic control; and transformational opportunities. Consideration was also given to what other public sector bodies could potentially form part of a single authority model. Regular updates are also provided to the HSCP Leadership Group, which has representation at a senior level from across the Council, HSCP and NHS Highland. The latest of these updates were provided at their meetings held in April and August this year. 4.3.2 Engagement with Scottish Government Officers are in regular contact with senior civil servants in the Scottish Government (SG) with regard to the development of proposals for a SAM in Argyll and Bute. Detailed below is a sample of some of the key engagements we have had so far, and which are planned:- i. 12 June 2024 – formal start up meeting held with senior SG and COSLA Officers to provide a briefing on the local drivers for reform and to discuss the current range of options being explored, including the potential scope of a SAM in Argyll and Bute. Arising from this meeting, Officers were asked to provide the SG with details of any specific support required to enable us to develop our thinking around a SAM and progress matters. On this basis, we have prepared two key documents for the consideration of the Director’s Working Group (see iii below) being set up – a) a request for expert assistance to enable us to fully understand the NHS Governance Frameworks that currently operate in Scotland, which will allow us to examine some of the proposed models for a SAM in further detail; and b) consideration of our initial thoughts in terms of what the totemic issues/barriers to acceptance could be in relation to any SAM proposals (e.g. NHS brand identity, protection of professional status, professional/clinical and care governance, stability of workforce, including terms and conditions etc.). The development of these key guiding principles will help to ensure that when engaging with stakeholders, all parties are clear from Page 171
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the outset regarding what is on or off the table in relation to the development of possible SAM proposals for Argyll and Bute. ii. 29th July 2024 – Ivan McKee MSP, Minister for Public Finance, who has public sector reform as part of his remit, visited Lochgilphead on 29th July to discuss our vision for a SAM and undertook a site visit to Mid Argyll Hospital to understand the current levels of integration and partnership working. This was a very positive introductory meeting with the Minister, who noted his intention to follow up on this initial discussion by holding a joint meeting between Argyll and Bute and Western Isles Council, who are at a similar stage in terms of developing SAM proposals. A date for this session has been set for 26th November 2024. iii. Directors Working Group – a Directors Group has been established by the SG, consisting of 7 key Directors with local authority and NHS interests, to act as a sounding board in respect of the SAM work and to be a source of expertise for the relevant policy development areas. An initial meeting of the Group was scheduled for 29th July but coincided with the Ministerial Visit and is therefore being re-arranged by SG. A date has still to be determined. iv. Roundtable discussions – the SG have undertaken two round table discussions, involving academics and former public sector leaders, to further develop the evidence base for alternative governance models, by drawing on independent and objective perspectives. To date, local authorities have not been involved in these events, however a further session is being arranged in the Autumn to explore the combined findings and outcomes. 4.3.3 Engagement with Western Isles and Orkney Councils The Council has been engaging with the Island authorities, who have been considering SAM/Single Island Authority models for an extended period of time, to learn from their experiences and to work in partnership, where possible. Western Isles are at a similar stage in the process to Argyll and Bute and we have collaborated positively with them on a number of fronts, including the co-development of the documents referred to at (i) above, and will continue to work with them on a joint basis moving forward. 4.3.4 Engagement with other public sector partners The options that have been identified to date (as per section 4.4. below) have focused on possible models involving primarily the Council, HSCP, and NHS Highland. However, there is scope to widen out a SAM to involve other public sector bodies within the area, and Officers have begun engaging with key local partners to share our initial thoughts and to obtain their feedback. Meetings with UHI Argyll and ACHA have been scheduled for late September and October, Page 172
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respectively. Members will be kept appraised of the outcome of these meetings. 4.3.5 Elected Member engagement Councillors have been provided with regular updates in respect of the SAM proposals, and wider public sector reform, since we received formal notification of our involvement in discussions in September 2023. For example, via Members Seminars, regular reports to P&R Committee, and briefings/presentations. The latest update was provided to all members at a seminar held on 24th September. 4.4 Options currently being explored 4.4.1 A summary of the options which have been identified to date are detailed below:- (i) Status Quo This option would be a continuation of the current structures with the retaining of the Health and Social Care Partnership with governance through the Integrated Joint Board. (ii) Community Planning Plus This model would be based on the current Community Planning Model (building on the provisions of the Community Empowerment (Scotland) Act 2015) and would maintain separate organisations. It would give the opportunity to pool budgets, but employees and structures would remain separate. (iii) Integrated Authority This model would establish an elected single legal entity which would have fully integrated service budgets and would be empowered by elected status to give clear and accountable leadership. The Authority would create specific Boards or Committees which would provide the governance and decision-making structures required to ensure that resources and services are managed effectively. A new scheme of public sector legislation would be required in order to implement a model such as this. (iv) A Fully Empowered Local Board This model would strengthen the current IJB structure with fully integrated services and retain local accountability linked to the partner organisations governance arrangements. As this model would proceed under the context of the Public Bodies (Joint Working) (Scotland) Act 2014, it could use this existing legislative scheme to Page 173
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build on the existing synergies between the Council and NHS in the first phase of implementing this model. (v) Single Authority Partnership This model could be consider a variant of the Lead Agency arrangement under the banner of a “Single Authority Partnership”. This could take effect by conducting a review of the current Integration Scheme (Under Section 45 of the 2014 Act), preparing a new Integration Scheme (under Section 47 of the 2014 Act, and subsequently through the use of Directions (issued under the 2014 Act). Under such a Strategic Lead Agency arrangement, there would be no transfer of staff – only functions and resources. 4.4.2 These options will be examined further once Officers have had the opportunity to develop their understanding of the NHS Governance frameworks which currently operate in Scotland, and have a fuller appreciation and insight into the key barriers/opposition that may arise in respect of a SAM. Expert advice and support in respect of these matters has been sought from the SG/Directors Group, as set out at section 4.3.2 (i) above. 4.4.3 Officers will also have regard to the ongoing development of the National Care Service (Scotland) Bill, which has the potential to influence what is possible in terms of a SAM. For example, the recent call for views on the Stage 2 Amendments to the Bill seemed to propose the removal of the Lead Agency Model, which will impact on our further consideration of options. 4.5 Further update reports will be prepared for future P&R Committee meetings to keep members informed of developments. 5.0 CONCLUSION 5.1 Officers have been engaged in ongoing discussions with the SG and have participated in a number of information and development sessions with key partners such as HSCP and NHS Highland to develop our thinking around what a SAM could look like for Argyll and Bute. A summary of the key activity undertaken since the last update is set out at 4.3 and 4.4 above. 6.0 IMPLICATIONS 6.1 Policy; currently none but with the potential for significant implications due to emerging national policies. 6.2 Financial; none at present - exploration of a SAM will consider any financial implications arising. 6.3 Legal; a review of all relevant legislation will be undertaken as part of the development of any options for a SAM. Depending on the preferred model identified, new legislation may be required. Page 174
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6.4 HR; none at present – as the proposals develop there may be a requirement for additional resource to support this work. 6.5 Fairer Scotland Duty: none 6.5.1 Equalities - protected characteristics; none arising from this report 6.5.2 Socio-economic Duty; none arising from this report 6.5.3 Islands; none arising from this report 6.6. Climate Change; none. 6.7 Risk; failure to explore options for the best model for our communities and influence the national development of reforms. 6.8 Customer Service; none arising from this report 6.9 The Rights of the Child (UNCRC); none arising from this report Pippa Milne - Chief Executive Councillor Jim Lynch – Leader of the Council September 2024 Page 175
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CHIEF EXECUTIVE’S UNIT 10 OCTOBER 2024 ANNUAL COUNCIL BUSINESS PLAN 2023-24 OUTCOMES 1.0 EXECUTIVE SUMMARY In June 2023 the Council agreed a Corporate Plan covering the years 2023 – 2027 and a supporting Annual Business Plan covering the financial year 2023 – 2024. It was intended that there would be annual updates on the progress against outcomes in the form of Annual Business Plans and a new Business Plan created for each year of the life of the Corporate Plan. As the Administration has changed, the priorities are being reviewed and a new Corporate Plan will be developed to align with these, coupled with a new suite of Annual Business Plans. This report provides an update on progress for the Annual Business Plan 2023 – 2024. The report recommends that the Committee • Acknowledges the progress made against the outcomes specified in the 2023 – 2024 Annual Business Plan and • Notes that a revised Corporate Plan and associated Annual Business Plan will be created following decisions by the Council in regard to priorities Page 177 Agenda Item 7
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CHIEF EXECUTIVE’S UNIT 10 OCTOBER 2024 ANNUAL COUNCIL BUSINESS PLAN 2023-24 OUTCOMES 2.0 INTRODUCTION 2.1 In June 2023 the Council agreed a Corporate Plan covering the years 2023 – 2027 and a supporting Annual Business Plan covering the financial year 2023 – 2024. It was intended that there would be annual updates on the progress against outcomes in the form of Annual Business Plans and a new Business Plan created for each year of the life of the Corporate Plan. As the Administration has changed, the priorities are being reviewed and a new Corporate Plan will be developed to align with these, coupled with a new suite of Annual Business Plans. This report provides an update on progress for the Annual Business Plan 2023 – 2024. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Committee 3.1.1 Acknowledges the progress made against the outcomes specified in the 2023 – 2024 Annual Business Plan. 3.1.2 Notes that a revised Corporate Plan and associated Annual Business Plan will be created following decisions by the Council in regard to priorities. Page 178
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4.0 DETAIL 4.1 Members agreed the Council priorities at its meeting in November 2022. Those priorities are captured within the Corporate Plan for the period 2023 – 2027. Details on activity for the financial year 2023 - 2024 against those priorities are set out in the Council’s Annual Business Plan which brings more focus and scrutiny on the delivery and performance of the organisation against its priorities. 4.2 An assessment against the performance contained within the Business Plan for 2023 – 2024 is appended. Where available, the updates cover the period to June 2024 although the key reporting period covered by the Annual Business Plan is the financial year 2023 – 2024. This is submitted to Policy and Resources Committee and for subsequent noting by the Council as part of an annual cycle of review, correction and implementation. The report and update will also be submitted to Audit and Scrutiny Committee. 5.0 CONCLUSION 5.1 Members are asked to review the update on progress for the first year of the Council’s Corporate Plan, 2023 – 2024 and note progress against outcomes identified, in consideration of the Council’s current priorities. 6.0 IMPLICATIONS 6.1 Policy - None arising directly from this report. 6.2 Financial - None arising directly from this report. 6.3 Legal - None arising directly from this report. 6.4 HR - None arising directly from this report. 6.5 Fairer Scotland Duty: An EqSEIA for the Corporate Plan 2023 2027 is available on the Council website. 6.5.1 Equalities - protected characteristics 6.5.2 Socio-economic - Duty None arising directly from this report however outcomes in the Business Plan may impact. These have been addressed in EqSEIAs for relevant activities. Page 179
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6.5.3 Islands - None arising directly from this report however outcomes in the Business Plan may impact. These have been addressed in EqSEIAs for relevant activities. 6.6 Climate Change - None arising directly from this report however outcomes in the Business Plan may impact. These have been addressed in EqSEIAs for relevant activities. 6.7 Risk – None arising directly from this report. 6.8 Customer Service - None arising directly from this report however outcomes in the Business Plan may impact. These have been addressed in EqSEIAs for relevant activities. 6.9 The Rights of the Child (UNCRC) - None arising directly from this report however outcomes in the Business Plan may impact. These have been addressed in EqSEIAs for relevant activities. Pippa Milne - Chief Executive Policy Lead Councillor Mark Irvine 03 September 2024 For further information contact: Pippa Milne, Chief Executive 01546 604263 Jennifer Coyle, Senior HR Business Partner 01546 604010 APPENDICES Appendix 1 Annual Business Plan 2023 to 2024 Annual Update June 2024 Page 180
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Appendix 1 1 Argyll and Bute Council Annual Business Plan 2023 – 2024 Update Report Page 181
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Appendix 1 2 Council Priorities Action Plan 2023 - 2024 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update People and places, our core business as a council. Attaining and achieving at all stages; we will improve outcomes for our children and young people. Improve educational attainment, achievement and outcomes for our young people within Argyll and Bute to Scotland’s upper quartile. Continue to work in close partnership with Developing the Young Workforce (DYW) to ensure young people successfully develop the skills for life and work required to attain sustained positive destinations post- school. Track young people’s pathways within school and in the period after leaving school, to ensure appropriate support, guidance and opportunities are in place to gain and sustain positive destinations. 95% of 16-19 year olds are in Education, Training or Employment The Annual Participation Measure for 2022-23 was published as of the end of August 2023 and we have exceeded our target with 95.6% of 16-19 year olds in Education, Training or Employment. The 2023-24 Annual Participation Measure will be published at the end of August 2024. The February 2024 Scottish Government Insight update shows that 95.3% of young people in Argyll and Bute who left school in 2023 entered a positive destination. DYW and schools continue to increase the number of school-employer partnerships, enabling young people to undertake work placements which match their interests and aspirations, develop skills for life and work and lead to formal accreditation. The number of work placements undertaken has increased each year since Covid-19 restrictions were lifted. Full data on 2023- 24 work placements will be available in June. Page 182
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Appendix 1 3 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update All schools fulfil a robust calendar of 16+ meetings with DYW and Skills Development Scotland (SDS) to identify those most at risk of negative destinations, and work with young people, families, employers and other agencies to ensure sustainable post-school destinations are achieved. Educational Attainment and Wider Achievement – Developing the use of all the available data and intelligence on each of our educational establishments to focus on and drive improvement, achieving our stretch aims (goals to improve opportunities and outcomes for young people) as agreed with the Scottish Government. Build staff capacity in the interrogation and use of data for improvement. Deliver targeted and universal literacy and numeracy support for establishments in order to raise attainment with specific focus on pupils residing in Quintile 1. Support schools to rigorously track and monitor pupil progress and plan measurable interventions and initiatives to raise attainment for all whilst closing the poverty related attainment gap. Stretch aims are achieved: Literacy 68.4%, Numeracy 75% School Leavers with 1 or more pass at SCQF Level 5 88.81%., School Leavers with 1 or more pass at SCQF Level 6 68.5% A number of Career Long Professional Learning (CLPL) sessions have been delivered in order to support data literacy. Through quality improvement visits, it is evident that there is increasing confidence amongst many senior leaders in terms of rigorous systems for tracking, monitoring and using data. Our Education Officer for Scottish Attainment Challenge has been supporting and challenging schools to ensure that Pupil Equity Funding (PEF) is well planned for using clear measures of success from the outset. This has resulted in a significant reduction in underspends at financial year end. It has also ensured that schools are robustly tracking the impact that PEF interventions are having to close the poverty related attainment gap. Our Literacy Education Support Officer and Numeracy Lead continue to support and challenge targeted schools in order to raise attainment of children who are economically disadvantaged. Page 183
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Appendix 1 4 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update In June 2023 (data published Dec 23) we achieved or exceeded almost all of our stretch aims. Of particular note is the reduction of the gap between those residing in Q1 and Q5 in literacy and numeracy at P1/4/7 combined. Developing a broader curriculum offer to augment current opportunities with a range of wider achievement awards and accreditations. This will have a positive impact on leaver destinations through inclusive, skills - based programmes in each secondary school. Support secondary schools via UK Shared Prosperity Funding to ensure accredited wider achievement opportunities exist for every pupil at each stage of their secondary education. Develop partnerships with Community Learning, UHI Argyll and Third Sector agencies to increase wider achievement opportunities for young people at each stage of their secondary education. Young People in every secondary school have the opportunity to engage in 1 accredited wider achievement programme at each stage of their secondary education. Development of this programme of Wider Achievement is ongoing, with Community Learning and Development increasing its support in and across our secondary schools. Through Community Learning engagement, 362 young people have engaged across 13 accredited courses, while 449 young people have accessed eight non-accredited courses. Secondary schools are successfully sourcing UKSPF funding to ensure wider achievement opportunities exist for every pupil at each stage of their secondary education. Personalised Flexible Learning Plans (FLPs) are broadening the curriculum for disengaged and vulnerable young people, developing their skills for life and work, and increasing the number of post-school positive destinations. 36 FLPs are in place across secondary schools. Continuing to promote the teaching and use of Gaelic as set out in the council’s emerging Gaelic Plan for 2023. The Education Officer and Principal Teacher will support establishments build Achieve the number of schools offering Gaelic as L2 and L3 to 60% (dependent on Scottish Government). The Principal Teacher has continued to provide a high level of support for schools through lesson modelling/live lessons, CLPL for staff, resources and support Page 184
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Appendix 1 5 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update staff capacity and help to establish Gaelic as an L2 or L3. Continue to signpost schools to ESgoil support and support and materials from other agencies such as Education Scotland and Storlann. Principal Teacher will continue to deliver online language lessons with colleagues from Highland and North Ayrshire Councils. visits. At present, we have 7 primary schools that provide Gaelic medium education, 17 primary schools that deliver Gaelic as L2 and 4 secondary schools that deliver Gaelic following the fluent path and as L2 or L3. We have 31 primary schools providing Gaelic as L3. Therefore, the majority of our schools are delivering Gaelic as either L1, L2 or L3 and we have surpassed our L2/L3 target by approximately 16%. We also have Gaelic as L3 being supported by external partners Feisgoil and e-sgoil. 5 primary schools have had online Gaelic lessons from Feisgoil this session and 1 primary school from E-sgoil. Learning estate now and in the future; we will ensure our schools are effective, sustainable learning environments. Progress a bid to the Scottish Government to establish a new campus on Mull. Await response on bid to Scottish Government Successful award from Scottish Government. Council agreed to commence the business case, undertake engagement exercises, commence site selection process and establish governance arrangements with updates to be brought back to members at appropriate gateway points. Page 185
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Appendix 1 6 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Develop the next generation of capital investment plan and priorities for our school estate. Service Asset Management Plan (SAMP) for Education and delivery of Programme by Feb 2024. All programmed work completed by the specified date and in line with the allocated capital budget. Service Asset Management Plan (SAMP) for Education and delivery of Programme by Feb 2025. Supporting children and young people with additional needs. Reducing the number of children and young people who have to travel out-with the area to access services by enhancing provision where gaps currently exist. Develop plans and funding arrangements for four Learning Centres in areas as identified in the ASN review of 2021/22. Increase the number of staff within educational settings being CALM trained. Increase the number of children accessing enhanced provision within Argyll and Bute. The ASN Project Board has developed a timeline for the implementation of 4 new learning centres. Two will be operational by August 2024, one by August 2025 and the further island resource timeline will be established in concurrence with the decision to develop a new campus on Mull. Working to improve and secure equity of specialist provision across Argyll and Bute by addressing gaps where they exist across the education estate. Clarify funding and develop plans accordingly. Increase the number of children accessing specialist provision within Argyll and Bute. The numbers of children accessing Learning Centres and Parklands school have increased for session 2024 -25 across the local authority and the staffing levels have been adjusted accordingly to allow this provision to take place. Maintaining the current staffing complement who support ASN in line with our nurture stretch aim agreed with Scottish Government. Current complement of central staff- 1 Principal Teacher and 2 Teachers will be maintained through Stretch aims are achieved: Literacy 68.4%, Numeracy 75% School Leavers with 1 or more pass at SCQF Level 5 88.81%., School Leavers with Targeted nurture: Completed: 18 schools, 22 pupils Ongoing: 7 schools, 7 pupils Whole-school accreditation: Page 186
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Appendix 1 7 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update maintaining teacher numbers. The number of schools engaging with Our Children Their Nurture Education will increase to 35. 1 or more pass at SCQF Level 6 68.5% 46 schools now on board, including new cohort Bronze – 22 schools Silver – 6 schools Gold – 1 school Breakdown of schools: 46 schools in total across 4 cohorts 33 primary schools 6 secondary schools 7 ELC/nurseries We are in the process of gathering data in order to measure progress against our nurture ‘plus’ stretch aim. This will be confirmed by end of June 2024. Roads and pathways; connections to, from and within Argyll will be supported. Reviewing our approach to road repair prioritisation to make the most effective use of resources in the context of budget pressures and to achieve the best possible balance in terms of strategic, operational and member input. Roll out programme of member engagement. Increase member satisfaction with programme approach. Seminar/member workshop delivered in January 2023 followed up by Business Day meetings in October/November 2023 followed by Area Committee meetings in March 2024. This process has provided well-received refresher training and in the case of new members, provided a good foundation on which to build knowledge and understanding of the asset management approach to road maintenance. Feedback from Members has been largely positive. Page 187
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Appendix 1 8 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Initiating plans for a 20mph speed limit by working in partnership, and in line with national legislation, on the rollout and delivery of a 20mph limit where that will work best for our communities. Undertake surveys and assessments of settlements on 20mph zones to return to Transport Scotland. Complete assessments and return to Transport Scotland. Completed assessments have been returned to Transport Scotland for the roll out of the 20mph zones. There are mixed views as to whether this should be universally rolled out – further discussions to take place with Elected Members while we await the outcome of the assessments. Completing a review of parking and traffic management/enforcement to reshape arrangements that reflect community needs and ambitions. Commission review and submit findings and recommendations to members. Review the opportunity to better manage traffic management/enforcement and prepare a clear set of proposals Members’ consideration. This forms part of the RIS Review which will be reported to the June EDI Committee with further changes progressing. Piers and harbours Upgrading the council’s harbour infrastructure to ensure it is capable of receiving existing and planned new ferries (including at Craignure, Fionnphort/Ruahaich, Port Askaig, Dunoon, Kilcreggan and Campbeltown, Tayinloan - Gigha). Design for Iona/Fionnphort. Business case for Craignure, ground investigation. Consultation returns for Dunoon/Kilcreggan. Completion of design for Iona/Fionnphort. Completion of business case for Craignure, ground investigation. Consultation data returns prepared by consultants to present a proposed preferred option, which will be report to Members and the public. Iona/Fionnphort: Design for Iona complete and works have been tendered. Design substantially complete for Fionnphort. Craignure: Delays to Ground Investigation works due to additional requirements from Nature Scotland regarding marine mammals. Ground Investigation delayed from Autumn 2023 to Spring 2024. Kilcreggan: Consultation exercise for Dunoon - Kilcreggan carried out. Vessel replacement programme postponed by Scottish Government which prevents any further design and development of the Page 188
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Appendix 1 9 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Development of business case for extension of Oban North Pier. Complete development of business case for extension of Oban North Pier. marine infrastructure (vessel type and size needs to be confirmed prior to designing the infrastructure to ensure compatibility). Oban North Pier: Extension of North Pier business case on hold pending the completion of the HRO for Oban Bay. There was complete agreement with Harbour Board Members, officers and legal team that the business case should logically follow on from the HRO. In the meantime we have proceeded with the survey and assessment of the existing pier, which is required for the Business Case and as we are building on an existing appraisal report the business case can be expedited rapidly. Creating a new municipal harbour authority in Oban, ensuring that proposals are submitted to Scottish ministers as soon as possible following consideration by the Harbour Board in December 2022, and putting preparations in place to commence operations upon approval by ministers. Establish a Municipal Harbour Authority with an up to date and modern Harbour Revision Order. Finalisation of Harbour Revision Order. Formal consultation for the HRO carried out. Circa 100 representations received with the majority of these responded and at the time of writing there are a couple of legal matters to be confirmed. Following this all the representations will be returned to Transport Scotland for their consideration before being put in front of the Cabinet Secretary who will determine the Order. Seeking funding for the procurement of new council- operated vessels including Islay/Jura, Luing and Easdale. Carry out assessment, specification and costing of new vessels. Secure funding for new vessels based on priority requirement. Discussions ongoing with Transport Scotland on the age of the vessels and the risks faced by Argyll & Bute Council. To date no funding secured for vessel Page 189
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Appendix 1 10 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Request funding from Scottish Government and/or explore other funding opportunities. replacements. Consideration for other sources of funding being explored. Finalising the demand, economic impact and business case assessment for the Helensburgh Pier strategy in 2023. Commission consultants to undertake feasibility study into future users of the pier. Consider study from consultants. Clear recommendation(s) submitted for Members’ approval. Report presented to the EDI Committee in November 2023, where the committee accepted the consultant’s findings and agreed that officers would no longer devote resources to pursuing a Council funded berthing facility. The Committee also agreed that the Head of Development and Economic Growth would engage with Helensburgh Community Council and any other appropriate community group(s) who may express a wish to pursue options, including a potential asset transfer of Helensburgh Wooden Pier. Waste and recycling services; reduce our carbon emissions. Delivering a solution that enables the council to divert its biodegradable waste from landfill, within 2026, while seeking a short term derogation to allow the PPP contract to expire. Engagement with Scottish Government to secure derogation for new waste transfer model on islands. Negotiate new contract to replace the existing Helensburgh and Secure derogation from Scottish Government to enable the PPP contract to run to its natural end in September 2026, this being nine months beyond the introduction of the BMW landfill ban. New contract to replace the existing Helensburgh and Lomond area contract with a Ongoing discussions with Scottish Government Ministers and officials since December 2022. With the passage of time, the derogation has become less attractive and our ask to SG is for a financial contribution of circa £1.5M. The previous waste contractor, Barr Environmental Ltd (BEL), gave notice that they were to cease trading on 31 March Page 190
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Appendix 1 11 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Lomond area contract with a BMW compliant contracted solution. Commence an EfW procurement by the end of the year for current waste PPP areas. BMW compliant contracted solution. Procurement commenced for EfW. 2024. The team have put in place new arrangements to cover the services previously provided by BEL. Positive discussions progressing with Renewi with an update report due at the June EDI Committee seeking approval to progress a contract variation with the PPP contract on the basis that we are not expecting a derogation to be put in place. This includes provision for EfW. Encouraging households to increase use of recycling services to reach at least the Scottish average (with service exploring options to stretch targets where possible). Carry out marketing and publicity campaign – e.g. Food Waste Awareness campaign, Green July (which will also include waste). Officers review the recycling rate to see if the campaign has had an impact. Resource from Zero Waste Scotland has been secured – ZWS have undertaken a composition analysis which will assist in producing a Recycling Strategy (first draft has been produced with further work required). The composition analysis will help inform any future marketing to ensure that the appropriate audience and marketing message can be achieved. The Council worked with Zero Waste Scotland to refresh the recycling section of our website to streamline our messaging and reflect best practice. The new pages were completed in early March. We have had some emails from the public commenting on the information being “excellent”. Page 191
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Appendix 1 12 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update A two-week social media campaign to promote the new pages on the website ran from 18 – 29 March and covered messages around reduce, reuse and recycle, and included a post about businesses having a legal duty towards recycling. A second social media campaign will take place in June and focus on behaviour changes which would help reduce the amount of waste going to landfill and pointed customers to supporting information, either on the council website or third-party sites. Marketing will continue with regular posts, and campaigns, throughout the year. Housing Supporting the provision of over 1,000 affordable homes by 2027 (247 in 2022/23 plus at least 750 additional homes over the life of the Strategic Housing Investment Plan). Submit business case for housing to government through the Rural Growth Deal. Successfully submit Business Case. OBC has been submitted for Tobermory element of Rural growth Deal. Contract let and due on site May 2024 to install road and infrastructure. Housing Emergency Action Plan being finalised following Housing Summit, will be Page 192
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Appendix 1 13 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Look at number of properties required to be completed in 2023/24 - target agreed in Local Housing Strategy is 215 units. Submit the Annual SHIP for approval to Council in September. Review number of completions against target set. Annual SHIP approved by Members and submitted to the Scottish Government. presented to the EDI Committee and ultimately incorporated in Councils LHS Action Programme. 70 new build units were completed in 2023/24. We are working with Housing Association partners to enable 'buy back' acquisitions which will boost the delivery of affordable housing units. In addition, the Council has approved Strategic Housing Fund grants to enable NHS properties to be brought back into use. Work has also started on the Council's Housing Rural Growth Deal project which will deliver up to 12 properties for workers on Mull. SHIP has been submitted to SG and approved in Oct 2023. Exploring additional options to increase the availability of all tenures of housing - mid market rents, shared equity, affordable by design and other developments - in the area. Housing delivery group will identify alternative opportunities to deliver all tenures of housing. Review Local Housing Strategy in light of declared Housing Emergency. Update Housing Strategy Approved by Members. Ref previous row: Housing Emergency Action Plan being developed and leading to revised LHS Action Programme in Autumn 2024. Considering the implementation of short term lets control zones Undertake an evidenced based assessment of the Completion of assessment. Short Term let licensing still underway. Mapping license applications underway. Page 193
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Appendix 1 14 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update to open up more housing availability. appropriateness of STL Planning Control Zones. Outline options presented to Senior Policy Leads in June 2024 and officers will then map out detailed statutory process and complete compilation evidence base. Continuing to support households to improve energy efficiency and tackle rising living costs through annual investment through and implementation of the Home Energy Efficiency Programme in Argyll and Bute. Liaise with Scottish Government and stakeholders to maximise funding. Target for 2023/24 is to support 280 private sector properties/households with energy efficiency improvements, as agreed in the Local Housing Strategy. Officers will work with ACHA to develop special projects which may secure additional funding. Secure HEEPS funding for Council led schemes. Review the offer in principle of £1.9m from the Scottish Government, which the Council then submit an application for. 2023/24 HEEPS ABSS completed on schedule. Application submitted and awaiting formal award from SG anticipated June 2024. The Home Energy Efficiency Programme: Area Based Scheme is delivered across Argyll and Bute with particular emphasis on remoter rural and island communities. During 2023/24 a total of 307 private sector households received energy efficiency measures through the programme. The Council worked in partnership with ACHA to help insulate privately owned or privately rented properties in multi-tenure blocks which included ACHA owned properties. Page 194
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Appendix 1 15 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update During 2023/24, the Scottish Government awarded funding of £633,600 to complete works in Bute and Tarbert. Developing the opportunity for the council to become a Rural Housing Body - where it would be more directly involved in the delivery of housing or land for housing. Submit to Scottish Government evidence and request for Argyll and Bute council to become a Rural Housing Body Secure permission to become a Rural Housing Body. Housing Body has been awarded. Will develop policy for Rural implementation. Communities; we will build and strengthen our communities as attractive, vibrant places to live, work and do business. Creating area plans for all our communities, reflecting investment opportunities and local service prioritisation. Agree approach, method and resources to commence development of area plans. Commence co- production of area plans. Agreed process and engagement commenced. Seeking ways of securing more community wealth building opportunities across Argyll and Bute and supporting communities to gain maximum benefit from developments in their area. Map current community wealth activity through the work of Argyll and Bute Third Sector Interface. Completion of mapping of current activity. Page 195
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Appendix 1 16 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Seeking to maximise scope for community involvement and participation, including exploring the role that community transfers can play. Develop a proactive approach to support greater community participation in asset transfers. Six monthly reporting on expressions of interest received from community groups Information, advice and guidance for community bodies who are interested in making formal requests has been developed and is on the Council’s website Quarterly reports were provided to Members rather than six monthly. Potential and growth; turning opportunities into reality. Economic Development Achieving sign-off of the Rural Growth Deal business and cases and begin delivering priority projects like The Marine Industry Training Centre, UAV Drone Hub and Seaweed Academy. Complete outline business cases (OBCs) and key documents required for approval of Scottish and UK Governments in order to sign the Full Deal Agreement and commence draw down of RGD funding. Full deal sign off. Full deal signing scheduled for 7th June 2024. Full Deal signing was planned for 7 June however due to General election this will be delayed. All projects now at Outline Business Case (OBC)Stage with a number of OBC’s nearing endorsement by Government. Rothesay Pavilion at full Business Case stage. Securing of Levelling Up funding for projects, including Argyll and Bute Western Seaboard Marine Gateways Initiative, Whisky Islands and Lorn Economic Growth Zone. Bid in 2022 was not successful – consider and scope out proposals for next round in alignment with the UK Government’s guidance. Submission of a bid to Levelling Up Fund, as per guidance set by the UK Government. £20m allocated via UKG Levelling Up Partnership funding. Long list of project options currently being considered. UKG will decide which projects will be funded. Implement £4.5m Argyll and Bute UK Shared Prosperity Fund Investment Plan. Commence implementation of Argyll and Bute UK Successfully complete first year implementation plan of UKSPF. This Plan remains on track with all individual elements being taken forward and submitted to the UK Government in Page 196
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Appendix 1 17 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Shared Prosperity Fund (UKSPF) Investment Plan. line with Audit requirements. This includes the approval of 9 community projects at the April Council meeting. Complete site development of Helensburgh Waterfront project securing long-term economic benefit. Marketing of site and select preferred bidder Successful appointment of a preferred bidder to progress the development. Two stage marketing process completed. Community engagement and retail study completed. Interviews with 2 remaining preferred developers completed and final selected developer will be reported to P&R Committee in August 2024. Deliver the £15m Campbeltown Flood Prevention Scheme. Implement Campbeltown Flood Prevention Scheme Complete the implementation of Campbeltown Flood Prevention Scheme. Campbeltown Food Prevention Scheme is on track to be completed by June 2024. Regenerate the waterfront of Ardrishaig Implement public realm improvements to Ardrishaig waterfront. Complete implementation of improvements to water front public realm in Ardrishaig Public Realm upgrades complete. Scottish Canals progressing negotiations with a potential commercial operator on the former Gleaner Oils site. Driving forward additional strategic economic development projects including progression of the Dunbeg housing, commercial and infrastructure projects and the North Lorn Economic Growth Zone through the Lorn Arc Tax Incremental Finance (TIF) scheme. Agree amendments to Scottish Government TIF scheme to allow flexibility for longer term larger development. Apply for planning consent for phase 4 housing and associated works. Secure TIF amendment. Planning consents progressed for phase 4 housing and associated works. Detailed case for amendment and time extension of TIF agreement, submitted to SG. Expecting decision in summer of 2024. More Homes Division have funded planning application for LINK Phase 4 housing development. Further SI and Cost Planning carried out. Anticipate planning application summer / autumn. Full Business Case being progressed for Oban Airport site as agreed at P&R Committee in May 2024. Implement Conservation Area Regeneration Scheme (CARS) Projects in Dunoon, Apply for CARs scheme for Tarbert Dunoon and Rothesay CARs scheme for Tarbert approved. Dunoon/ Rothesay CARs - Tarbert – Final funding applications due to be submitted to HES and NLF in November 2024. Page 197
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Appendix 1 18 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Lochgilphead, Tarbert and Helensburgh. CARs - complete last priority buildings. Helensburgh CARs project on track Lochgilphead - commence first priority building on site. complete last priority building. Helensburgh CARs project on track Lochgilphead - commence first priority building on site. Dunoon and Rothesay – last priority buildings have been completed. Helensburgh – First priority building in final development stage. Lochgilphead – all four priority buildings on site with two 95% complete. Maximising community economic and employment opportunities from the Islay Scotwind offshore wind project. Explore development of supply chain opportunities for local businesses. Complete assessment and report on supply chain for local businesses. Regular meetings have been held with 2 off-shore wind developers to discuss possible use of local ports and supply chain opportunities. The project continues to make progress as the development undertakes necessary environmental works, community engagement and financial appraisals. Preparing an options appraisal for implementation of a transient visitor levy. Consider Bill and develop a two-stage consultation process, consulting with the tourism industry, local communities, visitors and a wider range of businesses. Complete engagement process, review findings and report to Members once the Bill has been released detailing its provisions. The Bill is still progressing through Parliament with a target of August 24. Officers continue to monitor progress and are awaiting expert guidance on levy implementation in June 24 before preparing a public engagement plan on how to introduce the tourism levy in line with Government timelines. ABC is currently leading this work through the Highlands and Islands Economic Partnership in an effort to coordinate implementation of the levy to provide a level of consistency. Commercial services; making assets work now. Increasing commercial development of business and retail space, including the Develop businesses cases for: - Kilmory Industrial Park Complete businesses cases and to take forward as appropriate: Kilmory Business Park – enabling works are progressing on site. Legal Agreements are approaching completion, the Monitoring Page 198
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Appendix 1 19 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update Kilmory Industrial Park, and identifying other opportunities wherever possible. - Oban Airport - Killarow House, Bowmore - Lorn House, Oban - Kilmory Industrial Park - Oban Airport - Killarow House, Bowmore - Lorn House, Oban Surveyor has been appointed, and the final funding application has been submitted. Oban Airport – Outline Business Case completed and reported to P&R Committee on 9/5/24. Planning consent granted for TSL unit and UAV Hub Kilarrow House / Lorn House – HUB North appointed to complete options appraisal due for completion May 2024. Site investigations commissioned. Exploring additional commercial opportunities at Oban Airport. Develop business case apply for planning consent for business units. Complete business case and secure planning consent for business units. Outline Business Case completed and reported to P&R Committee on 9/5/24. Planning consent granted for TSL unit and UAV Hub. Delivering the Our Modern Workspace project (OMW), rationalising the council estate and facilitating hybrid working solutions. Progress delivery of OMW projects in Lochgilphead, Oban and Rothesay Lochgilphead – agree implementation plan. Oban – complete office rationalisation. Rothesay – Complete phase 1 capital works. Oban and Rothesay Complete and operational. Initial information gathering underway for Lochgilphead and Visioning workshops for Kilmory Redesign scheduled for May 2024. Leading the development and creation of Craigendoran Business Park as a business, engineering and innovation hub. Prepare business case as part of Rural Growth Deal (RGD). Completed business case to allow RGD sign off. Site investigations completed and infrastructure costings due for completion in May 2024. Outline Business Case has been completed and is out for external consultation. Exploring opportunities for sharing services where possible - both to help grow our income Implementation of new shared management structure with HSCP in New shared management structure with HSCP in relation to Hostels and Care Homes Management of the catering and domestic teams within Care Homes and Hostels commenced in July 2023. Service Page 199
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Appendix 1 20 Priority Activity 2023 – 2024 Success Measure 2023 - 2024 Annual Update through providing our expertise, and enhancing service delivery in communities where we need to source options from elsewhere. relation to Hostels and Care Homes for catering and cleaning for catering and cleaning operating and delivering efficiencies. improvements have been implemented and income generation opportunities are being explored. On-going savings options are being reviewed. Driving down further our own carbon emissions, achieving net zero by 2045 and exceeding our target of a 75% reduction by 2030, building on our good track record in relation to combatting climate change, through the delivery of our Decarbonisation Plan. Progress Argyll and Bute Decarbonisation Plan for 2022 – 2025. Deliver against agreed performance for Argyll and Bute Decarbonisation Plan for 2022 – 2025 including the tender and appointment of supporting consultancy to assist Officers with development of new Decarbonisation Plan by December 2025. Public Bodies Climate Change Duties Report 2022/23 confirms annual Council emissions of 26,512 tCO2e, representing a reduction of 1,705 tCO2e compared to 2021/22, and longer-term reduction of 12,952 tCO2e compared to 2015/2016 figure. Continued engagement with HubNorth to progress tender and appointment of consultancy support to support development of new Council Net Zero Routemap, which will supplant current Decarbonisation Plan. Securing Carbon Literate Organisation status by the end of 2023, including completion of the rollout of carbon literacy training to all councillors. Securing Carbon Literate Organisation status by the end of 2023 Deliver more training - application for Carbon Literate Organisation submitted and await outcome. Achieve bronze status and working towards silver status. Bronze Climate Literate Organisation Status achieved in 2023. Developing plans to progress towards Silver status, initially on a departmental basis. Page 200
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Appendix 1 21 Partnership and Action - everyone has a part to play in Argyll and Bute’s success In our Priorities for the Council Term 2022 to 2027, we have set out our areas for action to deliver our vision for Argyll and Bute. There are elements of that vision which require action from other agencies at all levels - from our communities right up to national government. We will commit to working in partnership wherever we need to as well as calling on others, with responsibility, to take the action that is required to safeguard Argyll and Bute’s success. This will include: 1. Continuing to build up our strong track record in partnership working and seeking new ways of working with communities, other organisations, and the third and private sectors. 2. Continuing to work in partnership with further education and higher education providers in Argyll and Bute to ensure young people have access to high quality innovative educational opportunities that support local employers and the Argyll economy. 3. Lobbying for support for the higher-than-average energy costs faced by Argyll and Bute communities. 4. Pressing the case for retaining delivery of care services locally, where community knowledge, relationships and experience are best placed to identify and meet local needs and local accountability. 5. Calling for funding support to tackle challenges in local social care delivery - including recruitment, retention and development of care staff in communities - rather than centralisation of services. 6. Continuing to call for planning, construction and opening of the replacement route at the Rest and Be Thankful within the life of the this Scottish Parliament 7. Working in partnership with the Rothesay Pavilion Charity Trust to lobby for funding to complete the refurbishment of the Pavilion. 8. Seeking additional funding support to address the unprecedented severe weather damage to the sea defences supporting Bute’s main island roadway at Ardbeg. 9. Working with the Community Planning Partnership to develop a Climate Change Strategy for the region as a whole. 10. Adding our voice to those of our local government colleagues across Scotland to call on national government for fair funding settlements which enable councils to deliver the services that matter to communities, and reinforcing the need for recognition of the vital contribution that local government makes to national priorities and Scotland’s overall success. Page 201
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 10 OCTOBER 2024 COUNCIL COMMUNICATION STRATEGY 2024 – 2027 1.0 EXECUTIVE SUMMARY 1.1 Effective communication services support the council in achieving its objectives for the area, and communities in getting the council help and support they need. This report seeks approval for the draft Council Communication Strategy 2024 – 2027. RECOMMENDATIONS It is recommended that the Policy and Resources Committee approve the draft Council Communication Strategy. Page 203 Agenda Item 8
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 10 OCTOBER 2024 COUNCIL COMMUNICATION STRATEGY 2024 - 2027 2.0 INTRODUCTION 2.1 The Council’s Communication Strategy outlines communication priorities and aims for the organisation, supports council services, employees and communities, and guides how the council wants to use its small Communication Team resource. The draft Communication Strategy is provided here for consideration. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee approve the draft Council Communication Strategy. 4.0 DETAIL 4.1 Communicating effectively has organisational and community benefits that are particularly significant given the challenging and changing times councils are working in. For example: - Explaining the challenges and limitations affecting councils - Making people aware of council support and services available to them - Informing to involve – providing information needed for people to get involved in making change happen where needed - Helping to attract the skills and investment the area needs 4.2 The council’s communication strategy delivers key guidance supporting effective communication and engagement, and gives a general outline of the positions our communities and employees need to be aware of in order to support success. 4.3 To develop the attached strategy we have listened to communities and employees in different ways, and considered the day-to-day and longer term challenges facing the council. 4.4 For example, we have looked at recurring topics raised or comments made by communities through their enquiries and use of communication channels; drawn on comments and views from employees, and researched views of the area as a place to attract people to live and work. Page 204
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Overall position for communicating 4.5 The council will continue to deliver services that support day-to-day life and the longer term future of Argyll and Bute. However national funding limitations limit local council services, and mean that we cannot unfortunately do everything our communities want us to do. We will achieve most when council and communities work together for Argyll and Bute. Why this position? 4.6 Councils continue to provide wide ranging services that touch every aspect of people’s lives, and that are of much greater value than people’s council tax. Budget cuts though reduce what we can do, and unrealistic expectations cause issues for both communities and the council. However Argyll and Bute benefits from council and communities who are both committed to making good things happen for the area. 4.7 In addition, the need for councils and communities to work increasingly together is reflected in national public sector reform measures in place or being developed such as: - Cosla’s Plan 2022- 2027 - Single Authority Models 5.0 CONCLUSION 5.1 The council’s communication strategy supports the council, its employees and services in different ways. The outline strategy for the next three years is attached for comment. 6.0 IMPLICATIONS 6.1 Policy: The strategy includes the social media policy; the updated policy will come to the Policy and Resources Committee separately for consideration. 6.2 Financial: None. 6.3 Legal: None. 6.4 HR: None. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics: The strategy supports accessible communication. 6.5.2 Socio-economic Duty: None. 6.5.3 Islands: None. Page 205
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6.6 Climate Change: The strategy supports digital first communication and promotion of climate friendly activity. 6.7 Risk: None. 6.8 Customer Service: Effective communication is an important part of good customer service. 6.9 The Rights of the Child (UNCRC): None. Kirsty Flanagan Executive Director with responsibility for Customer Support Services Policy Lead: Councillor Mark Irvine September 2024 For further information contact: Jane Fowler, Head of Customer Support Services jane.fowler@argyll-bute.gov.uk Jane Jarvie, Communications Manager jane.jarvie@argyll-bute.gov.uk APPENDICES Appendix 1: Council Communication Strategy 2024 – 2027 Page 206
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Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Council Communication Strategy 2024 - 2027 Together for Argyll and Bute Page 207
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2 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Argyll and Bute Council, and the area as a whole, face challenges and opportunities in building the prosperous future that the council and our communities want. The nature and scope of what has to be achieved highlight the need for everyone who cares about Argyll and Bute to work together for its benefit. As an illustration, challenges and opportunities include: attracting people, skills and investment to the area; addressing the impact of climate change; and public sector reform that envisages increased collaboration across agencies and with communities. Effective communication is key to achieving success – to contribute to success, people must know why and how to play their part. This strategy sets direction for how the council will communicate to support employees, communities and the area as a whole in achieving our goals. Context The strategy focuses on informing to involve – enabling anyone with a contribution to make, to work with us and support the success of the area. Page 208
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3 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b 1. Strategic alignment .................................................................................................................. 4 2. Delivering impact – communication principles and practices ............................................ 5 3. Corporate guidance, policies, and legislation ...................................................................... 8 4. Campaign priorities 2024/25 .................................................................................................... 9 5. Key position statements and hashtags 2024/25 .................................................................. 10 Contents Page 209
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4 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Strategic alignment 1 This strategy is developed to support: The council’s vision for a successful, vibrant Argyll and Bute with a growing population and a thriving economy; a place where people want to come to live, to work and to do business. Connect for Success – the council’s drive to develop culture that enables business success. Local ambition – employees’ commitment to doing a good job in difficult circumstances, and communities’ aspiration for success for Argyll and Bute. The increasing importance, in day-to-day practices and in national reform proposals, of agencies, councils and communities working together. Page 210
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5 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Delivering impact2 Trusted voice o Our communication will be open, accurate and accessible, to provide information that can be trusted amidst the risk of mis/ disinformation elsewhere. Inform to involve o We will provide information and opportunities for those with a contribution to make to, to work with us for Argyll and Bute’s success. Evidence and insight o Communication activity is based on audience insight, and evaluated so that we do what works. Proactive and reactive o We will adapt communication practices to resources and opportunities. Principles Enabling o We will make support available in communicating effectively o We will deliver communication services that support communities affected by, and council services responding to, area emergencies Digital First o In support of customer preferences, and delivering best value, we will take opportunities from digital innovations to develop and improve communication practices. Council and area o Our communication services will support the objectives of the council and also the aims shared with partners for the area. Page 211
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6 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b There is local, national and global competition for people’s time and attention, from the considerable scale of information sources available. We will use a range of channels to match communication activity to the right communication channel to reach our audiences. These will include but not necessarily be limited to: Communication practices Digital communication o We will develop channels for making information accessible for all employees o We will identify and take opportunities to grow the relevance and therefore use of our channels by our communities. Social media o We will match content strategy for each channel to its audience o We will use corporate hashtags for sharing across council sites and reaching more people Visual communication o We will use corporate branding to show communities how the council delivers value from its public sector funding, and the role we play in community life. o We will use high quality design material to develop the effectiveness of our digital communication channels. Word of mouth / interaction with the council o Communication skills development – many people communicate on behalf of the council; we will provide guidance in delivering informed, constructive communication. Page 212
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7 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Cyber attacks have the potential to stop access to the digital systems that organisations depend upon to communicate with each other and their communities. Councils have a duty to warn and inform their communities in area emergencies. To be able to comply with this duty, and support employees and communities in the event of a cyber attack, the council will maintain corporate communication channels that sit outside the council’s systems as well as within it. Resilience – council and community We will develop an annual communication plan to set out priority communication initiatives. These will support area, council and service priorities. Communication campaigns and initiatives Our audiences are our employees, our communities, our partners, and everyone with a contribution to make to life in Argyll and Bute. Page 213
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8 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b 1. Key corporate guidance and policies delivered or updated through this strategy: a. Corporate council media protocol b. Social media policy c. Council corporate brand guidelines d. Communication skills development Corporate guidance, policies, and legislation3 2. Legislation/guidance relevant to this strategy: a. National code of publicity b. Councillors’ code of conduct c. Civil Contingencies Act 2004 (Contingency Planning) (Scotland) Regulations 2005 d. Inclusive/accessible communication guidance e. Other relevant council service strategies e. Consultation and engagement skills development i. Involving communities guide ii. Measuring success and learning lessons of on-line consultations Page 214
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9 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Priority campaigns/initiatives for 2024/25 Supports the council’s vision Council/community support Responds to community voice Employee support Campaign Purpose Comms Team + Service Benefits Better journeys / Active Travel campaign Public interest and action in taking small steps to reduce car use Active Travel Roads and Pathways Recycling – do more Why, what and how to recycle, to increase recycling rates Waste Services Waste and recycling services We’re listening – You said, we did – web information produced and process developed – to benefit communities and evidence-based decision making. Public is aware of the difference their views make Web Team + consulting services Communities Area-wide recruitment/resettlement– develop use of abplace2b.scot / #abplace2b Budget-free promotion of Argyll and Bute as a place to live and work Partner agencies Econ Dev – investing in the future Climate-friendly Argyll and Bute How to reduce your carbon footprint Climate Change Board Commercial services – making assets work now Recruitment – develop and put to effect council employer brand Candidates see and are interested in council vacancies Comms Team Skills to deliver council services for communities Realistic expectations of the council Develop informed expectations of the council to support council/communities working together – we can do this, we cannot do this, communities could do this… RIS to start Council/community understanding Have a great time, be a great visitor Responsible tourism support Econ Dev Community priorities Develop employee communication channels and sounding board Equality of employee access to information and employee views known and heard in making change happen well. Employee volunteers Increase employee involvement in communication that works National reform/local position Employees and communities informed about change and how it affects them CEX Council’s trusted voice in changing affecting all Campaign and initiative priorities for 2024/254 Page 215
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10 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Key position statements and hashtags 2024/25 What we communicate will obviously depend on what is useful in different circumstances. Below are overall position statements required (at the time of writing this strategy), by the circumstances in which the council is working, to be shared with our communities. “ Argyll and Bute Council must adapt to national reform across our services while also working to address challenges particular to the area. We would love to do all our communities want us to, and will continue to do more than we have a duty to, but decisions outside our control will affect or limit what we do. We will continue to campaign to bring the funding and support Argyll and Bute needs and welcome everyone with a contribution to make, working together for the good of the area.” Councils’ position 5 Page 216
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11 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b Public – to help communities access support they need, and know what they can expect from the council as we progress through multi-million pound budget cuts, we need to explain that: o We’d love to do everything our communities want us to do; lack of finance unfortunately means we can’t o We still do more than we have a duty to do, and deliver countless services every day that support all aspects of life in Argyll and Bute o We can do [this]. We cannot do [this]. You could do [this] to support your community and area o You could help us save services by… Employees – Connect for success – employees’ role is key in modernising the council’s working practices to match business need; we need to illustrate how: o Connect for Success will make it easier for you to get your work done; and that it’s about o Developing working practices that work for you Argyll and Bute Council’s role Page 217
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12 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b ‘good career choice first, vacancy second’ – raise understanding of the area as a desirable location to choose for work, and the council as a good employer, to increase interest in vacancies when they arise encourage communities to help attract the skills they need by promoting vacancies use data analysis to do more of what works in attracting candidates develop use of these hashtags to promote reasons to choose Argyll and Bute, and the council: o #abplace2b o #closerthanyouthink o #awardwinning Attracting the skills council services need to deliver council services: Page 218
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13 Communication Strategy 2023 - 2026 Together for Argyll and Bute Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b To encourage people to work with the council, we must show that: the council listens to and acts on your contributions to consultation and engagement exercises. We produce better results by working together o #workingtogether o #thankyou Working together Page 219
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Bute • Helensburgh • Islay • Oban • Mull • Campbeltown • Iona • Dunoon • Tiree • Lochgilphead • Seil … #abplace2b FURTHER INFORMATION For further information please contact: Communications Team on 01546 604171 or jane.jarvie@argyll-bute.gov.uk Page 220
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 10 OCTOBER 2024 ARGYLL AND BUTE COUNCIL BRITISH SIGN LANGUAGE PLAN 2024-2030 1.0 INTRODUCTION 1.1 Argyll and Bute Council is required to create a new British Sign Language Plan. This will replace the Joint British Sign Language Plan 2018-2024, which was approved in 2018. 1.2 This report sets out the steps which have been taken to develop the new plan and presents the plan for approval. 2.0 RECOMMENDATIONS 2.1 It is recommended that the Policy and Resources Committee approves the Argyll and Bute Council British Sign Language Plan 2024-2030. 3.0 DETAIL 3.1 The Scottish Government published its second National British Sign Language plan in November 2023. According to legislation, following its approval, listed authorities, of which Argyll and Bute Council is one, were required to produce local plans. 3.2 Work on preparing the plan got underway in January 2024. To meet the requirements of the legislation, two distinct strands of work were carried out. One was to ascertain progress made with regard to the previous plan (Argyll and Bute Council Joint British Sign Language Plan 2018-2024). The second strand was to develop the new plan. These two strands have been combined to create a single document (Appendix 1). 3.3 Learning from the previous plan, we have attempted to keep the new one as realistic as possible. We decided not to develop a multi-agency plan as was the case previously, when the plan was produced jointly with Live Argyll and NHS Highland. In practice, only two actions in the previous plan were delivered by Live Argyll, and there is nothing deliverable by Live Argyll in the new plan. With Page 221 Agenda Item 9
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regard to NHS Highland (and the HSCP), we have agreed to coordinate our activities and reporting while keeping the plans separate. 3.5 Discussions took place with officers from Live Argyll, NHS, HSCP, Education, Employability, Governance and Law, and Community Justice during the development of the draft plan. Actions have been agreed by the officers who will be responsible for their delivery. 3.6 In preparing the plan, we encountered a number of barriers, not least is the identification of our Deaf community within Argyll and Bute, which appears to be small and dispersed. Unlike other areas, we do not have a Deaf Club or other organisation which can be used as a focus for consultation activity. 3.7 The 2011 Census reported that there were 152 people aged 3 and over in the area who used BSL at home (0.2% of the total). While the 2022 Census indicates that there are 2,137 individuals aged 3 and over who can use British Sign Language in the area (2.5%), the questions are not directly comparable and the 2,137 figure is highly unlikely to reflect everyday use of the language. 3.8 We are required by the legislation to consult about our plan with BSL users and tactile BSL users. To meet this requirement, we carried out a short, online consultation on the draft plan. The plan and consultation questions were made available to respondents as a downloadable Word document and in a BSL translation video uploaded to YouTube, with links to the video provided from the consultation page set up on the council’s website. The consultation itself was promoted through the council’s Keep in the Loop emails, social media, and the consultation section of the council’s website. 3.9 The consultation ran for six weeks from early May. We received two responses, one from a BSL user, one not. The only comment made with regard to the content of the plan was that we should provide funding to enable Education staff to increase their proficiency in BSL, moving from BSL Level 1 to BSL Level 2. However, as this is captured by action 12 in the plan: ‘Offer opportunities to teachers to build on their BSL learning’, we do not propose the plan be revised in light of this. 3.10 Upon approval of the BSL plan, next steps will be to publish the final version of the plan and to develop a more detailed implementation plan for the actions. We will produce an interim report on the plan’s progress half-way through the plan’s life, in 2027. We will also include the BSL plan as a standing agenda item at the council’s Equality Forum meetings to enable progress to be monitored throughout the lifetime of the plan. 3.11 The Argyll and Bute British Sign Language Plan 2024-2030 and completed Equality and Socio-Economic Impact Assessment are appended to this report as appendices 1 and 2 respectively. Page 222
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4.0 CONCLUSION 4.1 This report has set out the actions taken to develop Argyll and Bute Council’s British Sign Language Plan 2024-2030. The plan is appended to the report for approval. 5.0 IMPLICATIONS 5.1 Policy None arising directly from this report. 5.2 Financial None arising directly from this report. 5.3 Legal The creation of the British Sign Language Plan is required to meet legislation. 5.4 HR None arising directly from this report. 5.5 Fairer Scotland Duty: 5.5.1 Equalities - protected characteristics: We are required to produce a BSL plan. This relates to the protected characteristic of disability. An equalities and socio-economic impact assessment has been completed in respect of the plan and the link is appended to this report. 5.5.2 Socio-Economic Duty: The proposals in the BSL plan relate to a specific community of interest: the Deaf community. An equalities and socio- economic impact assessment has been completed in respect of the plan and the link is appended to this report. 5.5.3 Islands: no islands impacts arise from the proposed approach or plan. 5.6 Climate Change None arising specifically from the proposals in this report. 5.7 Risk Failure to comply with legislation may put the council at legal and reputational risk. 5.8 Customer Service some actions in the plan may result in better customer service for BSL users. 5.9 The Rights of the Child (UNCRC): some actions in the plan relate to the provision of Education services for children. Kirsty Flanagan, Executive Director with responsibility for Customer Support Services Policy Lead: Councillor Mark Irvine Page 223
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For further information contact: Chris Carr OD Project Officer chris.carr@argyll-bute.gov.uk APPENDICES Appendix 1: Argyll and Bute Council British Sign Language Plan 2024-2030 Appendix 2: Equality and Socio-Economic Impact Assessment for Argyll and Bute Council British Sign Language Plan 2024-2030 Page 224
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. ARGYLL AND BUTE COUNCIL’S BRITISH SIGN LANGUAGE PLAN 2024-2030 Page 225
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2 Introduction Following the Scottish Government’s publication of its National British Sign Language Plan in November 2023, Argyll and Bute Council is producing its own, local British Sign Language plan. This plan differs from the previous plan for Argyll and Bute in that the previous plan was produced jointly with NHS Highland and Live Argyll. While we will continue to coordinate our activities, the council’s 2024-2030 plan has been produced as a single-agency plan. In keeping with this approach, NHS Highland is reporting separately on progress made with its actions from the previous plan; they are not reported here. Because this plan focuses on the council, the number of actions is reduced compared to the previous plan. We have also worked to keep this realistic within the resources available. This plan is indicative. One of the actions within it is to produce a more detailed implementation plan within the first 12 months of this plan’s life. The document is comprised of two parts. The first reports on progress made during the lifetime of our previous plan. The second outlines our goals and objectives for the second plan. Page 226
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3 Progress made over the life of the previous plan (2018-2024) We Said, We Did 1. In the previous plan, we said we would add a link to the Contact Scotland BSL service on each school’s website. This action was completed by October 2020. As a number of websites have been updated or replaced since 2020, we will carry out a review to ensure the links have remained in place. 2. We said we would provide early years staff with information about BSL and Deaf culture, and about resources that are available in BSL, so that they can meet the needs of families with a D/deaf or Deafblind child. A deaf educational resource has been created, and a training course was developed in November 2018; however, subsequent changes in personnel and job descriptions have resulted in changes to the level and focus of ongoing support available. In line with the actions in the previous plan, Bookbug resources are distributed. More information about Bookbug, including resources for children with additional support needs, is available on the Scottish Book Trust website: Bookbug - Scottish Book Trust 3. We said we would continue to give staff and children at nurseries basic BSL training in preparation for deaf children attending these establishments. Early Years staff have access to the Deaf Resources which have been developed by the council’s Teacher of Deaf. 4. We said we would contribute to the Scottish Government’s investigation of the level of BSL held by teachers and support staff working with D/deaf and Deafblind pupils in schools and take account of any new guidance for teachers or support staff working with pupils who use BSL. We carried out a survey in 2019. At that time, seven schools had staff who held the Level 1 qualification with 4 of these schools also having employees who were qualified to Level 2 with additional staff undergoing training. This survey has not been repeated. Page 227
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4 5. We said we would take forward advice developed by Education Scotland to a) improve the way that teachers engage effectively with parents who use BSL and b) ensure that parents who use BSL know how they can get further involved in their child’s education. Our Education records system does not hold any information about parents; it only holds information about the child. The needs of each child are identified on a case-by-case basis. 6. We said we would contribute to the Scotland’s National Centre for Languages (SCILT) programme of work to support the learning of BSL in schools for hearing pupils as part of the 1+2 programme, including sharing best practice and guidance. In the early years of the plan, a pilot project was undertaken at one of our schools; seven pupils passed an introduction to British Sign Language course. While the school continued the project in 2019/2020, the project has not been rolled out more widely. From 2021 every child has been entitled to learn a first additional language from primary one and a second from primary five. This entitlement continues until the end of S3. Although BSL has been promoted as a language which can be learned as part of the 1+2 Languages policy, with schools across Argyll and Bute being invited to use resources developed by Highland Council, there is limited demand and take up has been low. 7. We said we would work with partners who deliver employment services, and with employer groups already supporting employability to help signpost them to specific advice on the needs of BSL users and raise awareness locally of the UK Government’s ‘Access to Work’ scheme with employers and with BSL users (including those on Modern Apprenticeships) so that they can benefit from the support it provides. We encourage employers in contact with Developing the Young Workforce to sign up to the Young Person’s Guarantee. The Young Person’s Guarantee asks employers to show their commitment to the Fair Work agenda, including the Disability Confident schene; this helps employers recruit and retain great people, and to: • challenge attitudes and increase understanding of disability; • draw from the widest possible pool of talent; • secure high-quality staff who are skilled, loyal and hard working; • improve employee morale and commitment by demonstrating fair treatment Page 228
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5 This also helps identify those employers who are committed to inclusion and diversity in the workplace. We can also include Access to Work scheme when promoting Disability Confident. 8. We said we would continue to make sure interpreter support is available to young people to access work placements, and deaf awareness training is provided before the placement starts. Support for people on placements is considered on a case-by-case basis. 9. We said we would signpost pupils and students to a wide range of information, advice and guidance in BSL about their career and learning choices and the transition process. Skills Development Scotland has produced a Careers Information Advice and Guidance offer video available on the My World of Work site, with BSL interpretation added. Customers can use Contact Scotland service to make phone calls with BSL to Skills Development Scotland. Skills Development Scotland has also produced a webinar playlist for parents and carers. The playlist outlines Careers Information Advice and Guidance and Apprenticeship offers and includes BSL interpretation. 10. We said we would take steps to improve access to information about sport, and to local sports facilities and sporting opportunities. Our partner agency, Live Argyll, posted information and the Contact Scotland BSL link on its website. Posters were displayed at Live Argyll facilities to raise awareness of the Contact Scotland BSL service. 11. We said we would develop and provide training for transport providers which includes strategies for communicating with BSL users. We will signpost drivers of school transport to the council’s Deaf Awareness training course. 12. We said we would enable BSL users to take part in culture and the arts as participants, audience members and professionals. Awareness raising activities about the plan were carried out with Area Managers at Live Argyll, and reception staff were given background information and posters. Accompanying information was shared throughout Live Argyll, and the Live Argyll website was updated. Page 229
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6 13. We said we would take opportunities to promote the Access to Elected Office Fund locally, which can meet the additional costs of BSL users wishing to stand for selection or election in local or Scottish Parliament elections. We provided a link to Access to Elected Office Fund on the Council’s elections page on the website and also within guidance document designed to encourage people to stand as a local councillor. This information is also featured during periods of election activity. Information about Contact Scotland BSL is provided in the Elected Member's section of our intranet. We will carry over training of electoral staff on accessibility and signposted materials to the new plan. Lessons learned from the previous plan: The Joint BSL plan 2018-2024 for Argyll and Bute was approved in 2018. Since then, the environment in which we operate has changed considerably. The upheavals associated with the covid pandemic brought BSL into our living rooms with every First Minister’s briefing, raising awareness around the language while also causing some areas of work to be put on hold. More lastingly, Covid has accelerated changes to the way we work and deliver services, with a move towards remote and hybrid working and the adoption of more digital working. • A key lesson, then, is the need for any plan to be flexible. Other lessons include: • A need to put mechanisms in place to make sure activities are delivered and maintained throughout the life of the plan. • A need to make sure actions are handed over when there are changes to staff or when there are changes to management arrangements. • To be realistic about what we can deliver with the resources available. To ensure effective monitoring and flexibility, the plan will be monitored through regular reporting to the council’s Equality Forum, which also has membership from partner agencies including NHS Highland and the Health and Social Care Partnership. This will enable ongoing coordination of activities. We have also included an action to produce a progress report half-way through the lifetime of the new plan. Page 230
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7 Argyll and Bute Council’s British Sign Language Plan 2024-2030 About the new plan The goals and actions in the Argyll and Bute Council Sign Language Plan 2024-2030 align with the Scottish Government’s BSL National Plan 2023-2029. The Argyll and Bute Council British Sign Language Plan 2024-2030 contains both actions carried over from the previous plan and new actions. Delivering Argyll and Bute’s BSL Local Plan 2024-2030 Long-term goal: To improve outcomes for BSL users by developing solutions to the barriers faced by BSL users in their daily lives. Actions: 1. Monitor the implementation of actions from the National BSL plan to ensure we follow good practice where practicable. 2. Keep a watching brief on the development of the National BSL plan over its life to ensure we contribute appropriately, as required. 3. Network and participate in order to be aware of best practice. 4. Comply with the inclusion communication regulation. 5. Publish a progress report in 2027, halfway through the life of the plan, being mindful of its relation to the national plan. These actions align with the national Plan goal: To improve outcomes for BSL users by embedding BSL in relevant Scottish Government policies, plans and strategies in order to develop solutions to the barriers faced by BSL users in their daily lives. BSL Accessibility Long-term goal: Raise awareness around the culture of BSL and enable people to access services using their own language. Actions: 6. Ensure our website is accessible for BSL users and an agreed range of content is provided in BSL format. Page 231
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8 7. Continue to have Contact Scotland BSL on website. 8. Carry out awareness raising activity, so all council officers and elected members are aware of what this is and how the use the service. 9. Continue to ensure information about Contact Scotland BSL is provided on the elected members’ section of the intranet or successor websites. These actions align with the national Plan goal: To remove accessibility as a barrier for BSL users in all aspects of life, recognising the importance of having accessible information in the right format at the right time, utilising technology and increasing people's awareness of communication tools. Children, Young People and their Families Long-term goal: Ensure the needs of deaf or deafblind children and their families are supported. Actions: 10. Continue to support children to learn in environments that best suit their needs. 11. Offer opportunities to teachers to build on their BSL learning. These actions align with the national plan goal: The Getting it Right for Every Child (GIRFEC) approach will be fully embedded, with a deaf or deafblind child and their family offered the right information and support at the right time to engage with BSL. We will strengthen partnerships between relevant organisations to overcome barriers for BSL users and deaf/deafblind children to ensure they have the support they need at all stages of their learning, so that they can reach their full potential. Access to Employment Long-term goal: Support BSL users to access the labour market. Actions: 12. Ensure BSL users are signposted to the employability programme which best meets their individual needs. This action aligns with the national plan goal: BSL users will receive person-centred support to develop their skills, consider what route to employment is right for them and enter into the Page 232
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9 workforce so that they can fulfil their potential, and improve Scotland’s economic performance. They will be provided with support to enable them to progress in their chosen career. Democratic Participation Long-term goal: To enable BSL users to participate in our democratic processes. Actions: 13. We will continue to provide the Electoral Commission's training information to all relevant electoral staff, and we will signpost staff to materials about accessibility. This action aligns with the national Plan goal: BSL users will be fully involved in democratic and public life in Scotland, as active and informed citizens, as voters, as elected politicians and as board members of our public bodies. Page 233
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1.0 EXECUTIVE SUMMARY 1.1 At May 2024 Policy and Resources Committee it was agreed to allocate £8.05m from TIF to deliver the construction of roads, infrastructure, servicing and site works. This included an immediate draw down of £1.6m to deliver the Full Business Case for the overall project. 1.2 Ongoing work is also progressing in relation to identifying and securing other funded investment in the business park including and the development of commercial buildings for lease. This Full Business Case is now well underway and this paper provides an update on progress. RECOMMENDATION That the Policy and Resources Committee: i. Consider this project update relating to Oban Airport Business Park; and ii. Note another update report including the Full Business Case will be reported back to Members for consideration in December 2024. ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE COMMERCIAL SERVICES DEVELOPMENT AND ECONOMIC GROWTH 10th OCTOBER 2024 LORN ARC TAX INCREMENTAL FINANCE PROGRAMME – OBAN AIRPORT BUSINESS PARK – UPDATE Page 235 Agenda Item 10
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2.0 INTRODUCTION 2.1 At May 2024 Policy and Resources Committee it was agreed to allocate £8.05m from TIF to deliver the construction of roads, infrastructure, servicing and site works. This included an immediate draw down of £1.6m to deliver the Full Business Case for the overall project. 2.2 Ongoing work is also progressing in relation to identifying and securing other funded investment in the business park including and the development of commercial buildings for lease. This Full Business Case is now well underway and this paper provides an update on progress. 3.0 RECOMMENDATION That the Policy and Resources Committee: i. Consider this project update relating to Oban Airport Business Park; and ii. Note another update report including the Full Business Case will be reported back to Members for consideration in December 2024. ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE COMMERCIAL SERVICES DEVELOPMENT AND ECONOMIC GROWTH 10th OCTOBER 2024 LORN ARC TAX INCREMENTAL FINANCE PROGRAMME – OBAN AIRPORT BUSINESS PARK – UPDATE Page 236
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4.0 DETAIL Background 4.1 The initial phase of investment at Oban Airport was for the installation of a road link and services to enable the development of a new business park adjacent to the airport – this was completed several years ago. Despite this investment there was nervousness of businesses to move into the site without additional infrastructure being provided. Following this market feedback, Estates have instructed site investigations, service assessments and costings and generated business interests in the site from aviation related businesses. The existing site and newly proposed service site layout is shown below: EXISTING SITE PROPOSED DEVELOPMENT LAYOUT Page 237
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4.2 Officers have been working with Stantec and other specialist consultants to deliver a serviced site proposition for the private sector at Oban Airport. The Council has not created a new business park for several decades but now is in a progressed stage at this location and at Kilmory Business Park in Lochgilphead. Creating business park space can create spaces for local and incoming business to growth and trade plus it has the additional benefit of creating commercial income as part of the Council’s rental portfolio. 4.3 At Oban Airport an Outline Business Case (OBC) has been produced and has secured funding from the TIF Executive (subject to Scottish Government approval) for the development of roads, infrastructure, servicing and site works and the OBC. This was detailed in full, including financial draw down and commitments, at the May P&R Committee. At that time the 2 initial lynchpin tenants of Bristow Search and Rescue and TSL were also identified as interested occupants of Plots 1 and 2. 4.4 Policy and Resources Committee agreed in May (subject to TIF Executive approval, which was subsequently obtained) that the team would proceed with a Full Business Case (FBC) and updates would be brought back to this committee. Work is well underway with the FBC and Members and public will start to see both planning applications and on site activity as part of that process. Statutory Consents Update 4.5 Obtaining planning permission for Plot 2A (Bristow SAR) is seen as a priority and this is programmed for submission early November 2024 at the latest. The team have had early engagement with Argyll and Bute Council planning team to make them aware of the upcoming submission. It’s then hoped that planning approval can be achieved by mid January 2025. Full Business Case (FBC) 4.6 Early engagement has taken place with Stantec and the team have set out in principle our approach to FBC. The majority of information will be pulled together by the end of October 2024 for submission with the exception of a fully market tested tender cost. This will allow for early submission/engagement on a price which has been verified by a Tier 1 Contractor as a cost envelope. The current target is to have a Stage 2 Pricing Report prepared by end of February 2025 for inclusion in to a final FBC. The report to Policy & Resources Committee in December 2024 will provide an update on this process and likely seek approval to proceed with the information available. The current programme (Appendix A) indicates site commencement will be in April 2025, however we’re considering if there are any opportunities for early site clearance to give a head start on programme and mitigate against nesting bird risks etc. The completion and handover of site 2A (Bristow SAR) would be January 2026. Tenant Engagement 4.7 The team have now held two meetings with TSL on Plot 1 and two meetings with Bristow SAR on Plot 2A. Both have been sent a list requirements for buildings and how they will use spaces. We are starting to receive feedback on this to allow team to agree the design of both buildings and general layouts by the end of September 2024 and get a cost verification as part of our hub Stage 1 Report. Page 238
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Funding Tax Incremental Funding 4.8 The principal source of funding currently being pursued to deliver this project is Tax Incremental Funding (TIF). Engagement has been ongoing with Scottish Government about extending the period of the TIF and the TIF Executive has been kept informed of updates. It was emphasised to the SG that the success of the extension has implication on the wider ability to deliver other TIF projects such as the Dunbeg housing development. Engagement with SG about the delivery of TIF will continue and future updates will be provided to P&R. Levelling Up Partnership Fund 4.9 Another source of funding for this project has been the Levelling Up Partnership (LUP). At this stage, there is no definitive update whether LUP will be a viable source due to the current national political circumstances stimulated by the change in Government at Westminster. Engagement has taken place with senior Civil Servants however it remains unclear about the delivery of both existing or new projects that had previously been earmarked. Updates will be provided when the position becomes clearer, however the narrative surrounding LUP at a national level is making it increasingly unlikely it will be available for this project. 4.10 Due to the unclear funding position that currently exists the Full Business Case is being progressed on a twin track basis. A contingency option (Plan B) is under development with Bristow’s in the event that the Council does not receive LUP (or other) funding to deliver the buildings. Bristow’s proposed they submit a concurrent planning application for a reduced facility on the same site as a backup plan (this is contingent on the Council delivering the site infrastructure). Whilst this would give a better chance of the development proceeding however the net position would be a substantially reduced commercial income to the Council on a ground lease only basis. This would also rely upon Bristow’s being able to raise their own capital which is at this point not certain. It would increase the risk profile of the project overall. 4.11 Beyond the above mentioned funding sources (TIF and LUP) there may be other options to financially support this project. However, these would potentially come at additional cost and make the financial case more challenging. Further investigation and exploration of funding options will be progressed and updates provided to this Committee at a future date. 5.0 CONCLUSIONS 5.1 The development of Oban Airport Business Park is an ambitious project. The Outline Business Case outlines, that while there is demand from businesses to be located at the site, there is a market failure due to the high costs of development. Following approval of OBC in May 2024 the team are now well progressed with the development of the Full Business Case (FBC) and both works on site and statutory consents are being applied for. Page 239
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5.2 The Tax Incremental Finance (TIF) programme offers an opportunity to address this by providing the funding to develop the infrastructure to allow the site to be developed. 5.3 Alongside this investment in infrastructure officers will also progress the business case for further investment in the site to provide accommodation for the businesses outlined within the report alongside the UAV (Drone) Hub proposed to be funded through the Rural Growth Deal. 6.0 IMPLICATIONS 6.1 Policy – None. 6.2 Financial – There has been £8.05m of funding approved from the TIF programme. Further funding requires to be identified from other sources and income will be received once sites are completed and leased out. Further funding from additional sources for other elements of the project will also require to be clarified in future reports once there is more clarity on external funding opportunities. 6.3 Legal - The terms and conditions of transactions arising from this project are intended to be delegated to the Executive Director of Customer Services. 6.4 HR – There will be additional resource requirements as the project moves into the delivery phase as outlined in the report. 6.5 Fairer Scotland Duty 6.5.1 Equalities – None. 6.5.2 Socio economic Duty – None. 6.5.3 Islands – Oban Airport provides lifeline services to the islands and supporting the development of a Mull based business and services including emergency search and rescue response will enhance this. The development of UAV technology also has the opportunity to improve connections to the islands. 6.6 Climate Change – Aviation in general is increasingly viewed as a climate change risk. However the services proposed to be developed at Oban Airport are mainly lifeline services rather than recreational or tourism related and some of the new UAV technology under consideration could reduce the need for traditional aviation thereby reducing the carbon footprint of the airport. In addition Oban provides a central location for search & rescue functions which could reduce the flying time of operational activity. 6.7 Risk – There are risks from undertaking the development such as cost overruns, unforeseen abnormal costs, statutory approvals and timescale pressure. However there are also risks from not undertaking the development such as stagnating growth, the decline of the airport and the loss of grant funding. 6.8 Customer Service – None. Page 240
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6.9 The Rights of the Child (UNCRC) – None. Douglas Hendry, Executive Director with responsibility for Commercial Services Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Councillor Ross Moreland – Policy Lead, Finance and Commercial Services Council Leader Jim Lynch – Policy Lead, Rural Growth Deal & Strategic / Major Regeneration 11th September 2024 For further information contact: David Allan Estates & Property Development Manager The Helensburgh and Lomond Civic Centre david.allan@argyll-bute.gov.uk 01436 657620 APPENDICES Appendix 1 – Full Business Case Programme Page 241
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Client Confidential 20252024 2026 Jun Jul AugMar May Sept Oct Nov Dec FebJanJun AugJulMay Oct Feb AprJanDecNovSep Construction Stage Construction duration TBC Mar MayApr hub Stage 1 hub Stage 2 Forecasted Activities in next Period Project Description Activities in Previous Period Issues requiring immediate attention and/or escalation Delivery of key infrastructure along with the first two plots to support the development of a Business Park beside Oban Airport. • Project Launch took place 16th August and site visit with development team 22nd August 2024. • Development programme produced and circulated, highlighting key gateways for hub Stages and FBC approval. • Tier 1 Contractor procurement process commenced, confirmed three Contractors looking to price. • Engagement sessions took place with TSL Contractors and Bristow SAR on their existing designs and requirements. RFI trackers produced to clarify requirements. • Early engagement with planners to agree statutory consent requirements. • A gap analysis has been carried out on existing information. • Tier 1 Contractor returns expected 20th September 2024, with evaluation and recommendation to be completed early October 2024. • hub Stage 1 design freeze targeted for the end of September to allow a cost verification to take place and proceed through a gateway. An affordability cap will be confirmed in tandem which will look to sit within agreed funding limit. • Appointments for the following services to be carried out; Embodied Carbon Assesor / Whole Life Costing / ACR Drafting / Acoustics / Fire / BIM / PD. • Gap analysis of survey information – Topographical survey, Ecological survey. • Flood Risk Assessment to be carried out. • ACR Drafting to commence with a draft version to be included in the hub Stage 1 Report. No current areas of concern Issues requiring attention Programme Cost and Funding • Funding is not received – Business case to be developed outlining key benefits and how the project achieves funding criteria. • Statutory Consents – Early contact to be made with statutory authorities to understand requirements. • Project Costs increase significantly – Cost assessment completed with contingency included. Contractor verification awaited. • Project Programme – Development team appointed to drive towards an FBC approval in Q1 2025. • Project Governance missing – Project board established. • Airport Operations impacted – Early engagement with CAA undertaken to understand requirements. • Land Ownership – Legal team engaged, • Utility Capacity – Early engagement with providers has been made. • SSPS approved - awaiting a PO and point of contact to allow invoicing to commence. Indicative cashflow issued for approval. Strategy on tracking and splitting reporting of costs to be agreed as funding coming from TIF Fund (Infrastructure) and UK Government Levelling Up Partnership Fund (Buildings) Top Key Risks & Mitigations Community Benefits/Social Value (SV) • A Social Impact Strategy has been produced as part of the Tier 1 Contractor procurement. • Further dialogue to take place on supporting Social Value initiatives with Argyll and Bute Council. A development programme has been produced outlining the following key dates; • Hub Stage 1 Approval – Nov 2024 • Planning Applications Plot 2A and Infrastructure – Nov 2024 - Jan 2025 • ABC FBC, Hub Stage 2 Approval – March 2025 • Contract Execution – April 2025 • Plot 2A (Bristow) Handover – January 2026. Items to be confirmed by the Authority G A R G G G Oban Airport Business Park Flash Report 3rd September 2024 Period: Week 4 Current Status: hub Stage 1 Project Director: Scott Adams Contract Type: DBDA NPR Value: TBC Project Manager: Martin O’Neil Tier 1 Contractor: TBC G • Quality Audit Report – To be completed as part of September reporting. • Overall Status (out of 15) – N/A Quality G A&BC FBC Approval Plot 2A (Bristow) HandoverFinancial Close Planning Submission (Plot 2A & Infrastructure) hub Stage 2 Approval hub Stage 1 Approval Page 243
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Policy and Resources Committee Work Plan 2024-2025 This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. Date Report Title Dept/Section How Often? Date Due Comments 10 October 2024 Financial Report Monitoring Pack Financial Services Every meeting except May 10 September 2024 7. Budget Outlook 8. Financial Services 10 September 2024 9. Single Authority Model Update Chief Executive 10 September 2024 07.12.23 Agreed further report to be provided following the completion of work to articulate the benefits and key objectives associated with each option. 10. Annual Council Business Plan 2023- 24 Outcomes Chief Executive 10 September 2024 11. Council Communication Strategy 2024 - 27 Customer Support Services 10 September 2024 12. British Sign Language Plan 2024-30 Customer Support Services 10 September 2024 13. Oban Airport Business Plan Update Commercial Services and Development and Economic Growth 10 September 2024 09.05.24 Agreed further report to be provided with Business Case. Date Report Title Dept/Section How Often? Date Due Comments 5 December 2024 Financial Report Monitoring Pack Financial Services 5 November 2024 14. Budget Outlook 15. Financial Services 16. Budget Update 2025/26 17. Financial Services Page 245 Agenda Item 11
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Policy and Resources Committee Work Plan 2024-2025 This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. 18. Annual Review of Procurement Strategy and Sustainable Procurement Policy 19. Legal and Regulatory Support 20. Volunteer Policy Customer Support Services Moved from October 21. Oban Airport Business Plan Update Commercial Services and Development and Economic Growth Date 22. Report Title Dept/Section How Often? Date Due Comments 13 February 2025 Financial Report Monitoring Pack 23. Financial Services Every meeting except May 14 January 2025 24. Budget 2024-2025 Financial Services 25. Treasury Management Strategy and Investment Strategy Financial Services Date 26. Report Title Dept/Section How Often? Date Due Comments 8 May 2025 27. Budget Outlook 28. Financial Services 8 April 2025 Date 29. Report Title Dept/Section How Often? Date Due Comments 15 August 2024 Financial Report Monitoring Pack 30. Financial Services Every meeting except May 16 July 2024 31. Budget Outlook Financial Services Page 246
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Policy and Resources Committee Work Plan 2024-2025 This is an outline plan to facilitate forward planning of reports to the Policy and Resources Committee. Community Empowerment (Scotland) Act 2015 – Update on Expressions of Interest / Asset Transfer Requests 32. Commercial Services 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. Page 247
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