Agenda reports pack
Argyll and Bute Council · 11 August 2022
Back to Policy and Resources Committee — 11 August 2022 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 4 August 2022 NOTICE OF MEETING A meeting of the POLICY AND RESOURCES COMMITTEE will be held ON A HYBRID BASIS BY ATTENDANCE IN THE COUNCIL CHAMBER, KILMORY, LOCHGILPHEAD OR REMOTELY BY MICROSOFT TEAMS on THURSDAY, 11 AUGUST 2022 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 - 6) Policy and Resources Committee held on 16 June 2022 4. FINANCIAL REPORTS MONITORING PACK - 30 JUNE 2022 (Pages 7 - 118) Report by Section 95 Officer 5. BUDGET OUTLOOK 2023-24 TO 2027-28 (Pages 119 - 138) Report by Section 95 Officer 6. SERVICE ANNUAL PERFORMANCE REVIEWS 21/22 (Pages 139 - 188) Report by Executive Director with responsibility for Customer Support Services 7. AMENDMENT TO PENSIONS DISCRETIONS POLICY - SHARED COST AVCS (Pages 189 - 194) Report by Executive Director with responsibility for Customer Support Services 8. UK SHARED PROSPERITY FUND - ARGYLL AND BUTE INVESTMENT PLAN (Pages 195 - 238) Report by Executive Director with responsibility for Development and Economic Growth Public Document Pack
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9. PLACE BASED INVESTMENT AND CROWN ESTATE FUND 2022/23 – REMAINING FUNDING ALLOCATIONS AND POSSIBLE PROJECTS (Pages 239 - 246) Report by Executive Director with responsibility for Development and Economic Growth 10. CLIMATE CHANGE UPDATE (a) Council Carbon Emissions & Climate Investment 2022 (Pages 247 - 258) Report by Executive Director with responsibility for Commercial Services (b) Decarbonisation Plan - Action Tracker & Case Studies (Pages 259 - 300) Report by Executive Director with responsibility for Commercial Services REPORTS FOR NOTING 11. COMMUNITY EMPOWERMENT (SCOTLAND) ACT 2015 - UPDATE - EXPRESSIONS OF INTEREST / ASSET TRANSFER REQUESTS / REPORTING REQUIREMENTS (Pages 301 - 308) Report by Executive Director with responsibility for Commercial Services 12. POLICY AND RESOURCES WORKPLAN (Pages 309 - 310) Policy and Resources Committee Councillor Robin Currie (Chair) Councillor Kieron Green Councillor Audrey Forrest Councillor Jim Lynch Councillor Yvonne McNeilly Councillor Gary Mulvaney (Vice-Chair) Councillor Douglas Philand Councillor Ross Moreland Councillor Amanda Hampsey Councillor Fiona Howard Councillor Willie Hume Councillor Andrew Kain Councillor Reeni Kennedy-Boyle Councillor Liz McCabe Councillor Gordon Blair Contact: Hazel MacInnes Tel: 01546 604269
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MINUTES of MEETING of POLICY AND RESOURCES COMMITTEE held BY MS TEAMS on THURSDAY, 16 JUNE 2022 Present: Councillor Robin Currie (Chair) Councillor Gordon Blair Councillor Audrey Forrest Councillor Kieron Green Councillor Amanda Hampsey Councillor Fiona Howard Councillor Willie Hume Councillor Andrew Kain Councillor Reeni Kennedy-Boyle Councillor John McAlpine Councillor Liz McCabe Councillor Yvonne McNeilly Councillor Gary Mulvaney Councillor Douglas Philand Attending: Pippa Milne, Chief Executive Douglas Hendry, Executive Director Kirsty Flanagan, Executive Director Patricia O’Neill, Governance Manager Fergus Murray, Head of Development and Economic Growth The Chair of the Policy and Resources Committee started and adjourned the meeting until 11.30am to address technical issues with the Hybrid meeting. 1. APOLOGIES FOR ABSENCE An apology for absence was intimated from Councillor Lynch. 2. DECLARATIONS OF INTEREST Councillor Fiona Howard declared a financial interest in item 8 of the agenda (Strategic Events and Festivals) by virtue of her appointment as a trustee of the Helensburgh Winter Festival. She advised that she would leave the meeting during consideration of this item of business. Councillor Reeni Kennedy-Boyle declared a financial interest in item 6 of the agenda (Place Based Investment and Crown Estate Fund) by virtue of her appointment as General Manager of Fyne Futures. She advised that she would leave the meeting during consideration of this item of business. 3. MINUTES The Minutes of the Policy and Resources Committee held on 17 February 2022 were approved as a correct record. 4. BUDGET OUTLOOK 2023-24 TO 2027-28 The Committee considered a report which summarised the budget outlook covering the period 2023-24 to 2027-28 taking into consideration the budget decisions taken at the Council Budget Meeting held on 24 February 2022. Decision The Committee agreed to - Page 3 Agenda Item 3
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a) The current estimated budget outlook position for the period 2023-24 to 2027-28. b) To the establishment of a cross party Budget Working Group with a composition of six administration Members being Councillors Currie, Mulvaney, McNeilly, McCabe, Green and Kain, three opposition Members being Councillors Lynch, Philand and Irvine and two Trade Union representatives. (Ref: Report by Section 95 Officer, dated 2 June 2022, submitted) Councillor Reeni Kennedy-Boyle joined the meeting at this point. 5. KEY PERFORMANCE INDICATORS FQ4 2021/22 The Committee considered a report which outlined the FQ4 2021/22 Key Performance Indicators (KPIs) for Community Planning and Development, Financial Services, Commercial Services, Legal and Regulatory Support and Customer Support Services. Decision The Committee reviewed and scrutinised the FQ4 2021/22 KPI Report as presented. (Ref: Report by the Executive Director with responsibility for Development and Economic Growth dated 20 May 2022, submitted) 6. PLACE BASED INVESTMENT AND CROWN ESTATE FUND 2022/23 - PROJECTS AND ALLOCATION The Committee considered a report which advised that the Council had been allocated £712,000 for financial year 2022/23 from Scottish Government, via its Place Based Investment (PBI). Decision The Committee agreed to - a) The allocation of the Place Based Investment funding for 2022/23 to the projects in Table 1, paragraph 4.7. b) The allocation of the Crown Estate funding for 2022/23 to the projects in Table 1, paragraph 4.7. c) The amendment to the proposals relating to the award of £50,000 of CES funding as detailed under paragraph 2.5, and note the amendment of the detail at paragraph 2.5 which removes funding to ACT, following ACT advising officers that they are no longer able to deliver the proposal and therefore do not require the grant, and that the Council will take the lead on the project. d) Note that a further report on the allocation of the remaining unallocated £322,486 Place Based Investment and £397,453 Crown Estate Funding for 2022/23 will be brought forward to the August meeting of the Policy and Resources Committee. (Ref: Report by the Executive Director with responsibility for Development and Economic Growth dated 25 April 2022, submitted) Page 4
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7. HISTORIC ENVIRONMENT SCOTLAND HERITAGE AND PLACE PROGRAMME - OPPORTUNITY FOR PLACE BASED HERITAGE FUNDING The Committee considered a report which highlighted the new Historic Environment Scotland (HES) and sought the endorsement for the submission of an expression of interest (EDI). Decision The Committee agreed - 1. That an expression of interest be made to Historic Environment Scotland for the Heritage and Place Programme, and potentially also to National Lottery Heritage Fund for the Grants for Heritage Programme if applicable for the conservation town that is considered to best fit with the new criteria and to stand the best chance of success bearing in mind that this will be a highly competitive process. 2. That delegated authority be given to the Executive Director of Development and Infrastructure in consultation with the Leader, Depute Leader and Leader of the largest Opposition Group to submit subsequent applications to the heritage funders, should the Council be invited to do so. 3. To the principle of funding from the Council to support the delivery of the Development Phase should an EOI be successful and a development grant from HES be offered, normally of up to 50% of eligible costs. It is estimated that Council funding would be £60,000 for the development phase works. 4. To the principle of match funding from the Council for the delivery phase were a stage one development bid to go forward and be successful. Note that a future report will be brought back to Members for their consideration were this to be the case. (Ref: Report by Executive Director with responsibility for Development and Economic Growth dated 3 May 2022, submitted) 8. STRATEGIC EVENTS AND FESTIVALS - ROUND 4.2 - 2022/2023 The Committee considered a report which updated Members on the further call for applications in respect of Round 4 2022/23 of the Council’s Strategic Events and Festivals (SED) and provided details of the bids submitted and recommendations regarding all the eligible bids being put forward to receive grant funding. Decision The Committee agreed - a) To the aware of eligible SEF Round 4.2 grants amounting to £29,800 to a total of 7 events as detailed at Appendix 1, Table 1 of the submitted report. b) That any SEF grant offer only be formally issued upon confirmation from the individual event organisation that the event is formally confirmed and is definitely going ahead and still meets the SEF Round 4. Criteria. These grants are detailed in Appendix 1, Table 1. Page 5
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c) Not to award ineligible SEF Round 4.2 grant as detailed in Appendix 1, Table 2. d) To continue delegation powers to the Executive Director with responsibility for Development and Economic Growth to allow any subsequent amendment to existing grant requests to be made brought about as a consequence of future Covid restrictions regarding holding of events/mass gathering in 2022/23. Any amendment to a current grant request/offer would only be considered if the amendment related to either the same level or a reduction in the request from the constitute up to 75% of legitimate and eligible expenditure. e) To note that £25,064 would be left to be earmarked towards a future SEF round as previously agreed by Committee in February 2022. (Ref: Report by Executive Director with responsibility for Development and Economic Growth dated 28 April 2022, submitted) 9. SCOTLAND LOVES LOCAL GIFT CARD UPDATE The Committee considered a report which updated Members on the Scotland Loves Local Argyll and Bute Gift Card Scheme. Decision The Committee considered the contents of the report and the progress of the Scotland Loves Local Gift Card scheme within Argyll and Bute. (Ref: Report by Executive Director with responsibility for Development and Economic Growth dated 6 May 2022, submitted) 10. POLICY AND RESOURCES 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 June 2022. (Ref: Policy and Resources Committee Workplan dated June 2022, submitted) Page 6
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 FINANCIAL REPORTS MONITORING PACK – 30 JUNE 2022 1. INTRODUCTION 1.1 This report provides a summary of the financial monitoring reports as at the end of June 2022. There are five detailed reports, setting out the position as at 30 June 2022, 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 no reported overall under or overspend position for the Council at June 2022. As this is early in the financial year it is common for there to be no forecast variances processed at this time. 2.1.3 There is a year to date underspend of £1.087m. The year to date variances tend to relate to the timing of income and expenditure and recharging of costs to capital. The financial ledger system replacement and downtime has meant that budget profiles were unable to be refined in the first quarter of the financial year so profiling issues are a common theme throughout the detailed departmental budget monitoring reports. 2.1.4 With regard to the ongoing financial impact of COVID-19, there are £9.510m of reserves committed to manage the impact of the pandemic. The detail behind these commitments is contained within Appendix 2 of the Reserves and Balances report. 2.1.5 Total policy savings relevant to 2022-23 financial year amount to £1.560m. The table below outlines their progress as at 30 June 2022. Page 7 Agenda Item 4
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Category No. of Options 2022-23 £000 2022- 23 FTE 2023-24 £000 2023- 24 FTE Future Years £000 Future Years FTE Delivered 5 235.0 1.4 243.0 1.4 243.0 1.4 On Track to be Delivered 12 603.5 0.5 606.5 0.5 609.5 0.5 Still to be Implemented 2 294.7 0.0 414.3 0.0 414.3 0.0 Being Developed 0 0.0 0.0 0.0 0.0 0.0 0.0 Potential Shortfall 4 402.5 0.0 402.5 0.0 402.5 0.0 Delayed 1 24.0 0.0 24.0 0.0 24.0 0.0 TOTAL 24 1,559.7 1.9 1,690.3 1.9 1,693.3 1.9 2.1.6 For those savings approved prior to February 2022, there are four savings categorised as having a shortfall and one currently delayed. Health and Social Care Partnership (HSCP) – Financial Update 2.1.7 The forecast outturn position at the end of June is an estimated overspend of £0.346m for 2022-23 (£0 for Social Work and £0.346m for Health). The Chief Financial Officer of the IJB is confident that the spend will be brought in line with budget by the end of the financial year. 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 6 Council wide revenue risks identified for 2022-23 currently amounting to £3.537m. 2.2.3 There are currently 42 departmental risks totalling £5.795m. Of the 42 departmental risks, one is categorised as almost certain and 5 are categorised as likely. These will continue to be monitored and action taken to mitigate or manage these risks. 2.2.4 The 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 3 750 Roads and Infrastructure Services Residual Waste H&L and Tiree There is a potential increase to tipping fees and haulage costs for H&L residual waste. The Council’s supplier Barr Environmental 4 655 Page 8
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(contract to end of 2023) lost a tribunal relating to the underpayment of landfill tax, which may have led to the Council having to source alternatives at a higher cost. Barr appealed the decision which was heard in the Spring and they won the case which should have reduced or eliminated this financial risk. However, the Scottish Government laid an Amendment Order on Friday 1 July 2022 which came into force at 1700 on 1 July which indicates that Landfill tax will be due on materials previously not chargeable and we have now received notification of an increase in the cost which officers are currently assessing. Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. 5 500 2.2.5 There have been four changes to the departmental risks since the report as presented to the Policy and Resources Committee on 24 February 2022. These are outlined in paragraph 3.4.1 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 2.3.3 At the budget setting meeting on 25 February 2021, the Council agreed to provide a £2.5m provision for the increase in capital contract costs as a result of COVID-19 and following agreement at the Policy and Resources Committee on 14 October 2021, this, plus a further £0.146m, was added to the capital programme. At the budget meeting in February 2022 an additional £3.9m was set aside for further capital contract increases including up to £1.2m for Campbeltown Flood Scheme. There are likely to be further financial pressures facing the capital programme that are not able to be quantified at this stage largely relating to inflationary increases in the construction industry and supply chain issues. 2.3.4 Actual net expenditure to date is £3.777m compared to a budget for the year to date of £3.765m giving rise to an overspend for the year to date of £0.012m (0.3%). The variance results from an accumulation of non-material variances across projects. Page 9
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2.3.5 The forecast outturn for 2022-23 is a forecast net expenditure of £29.319m compared to an annual budget of £48.555m giving rise to a forecast underspend for the year of £19.236m (39.6%). 2.3.6 The forecast total net projects costs on the capital plan are £177.521m compared to a total budget for all projects of £176.387m giving rise to a forecast overspend for the overall capital plan of £0.134m (0.08%). 2.3.7 In respect of total project performance, there are 159 projects within the capital plan, 145 are complete or on target, 14 are off target and recoverable and no 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. 2.4.2 The net movement in external borrowing for the period 1 April 2022 to 30 June 2022 was a decrease of £10.861m. 2.4.3 Borrowing is below the Capital Financing Requirement for the period to 30 June 2022. At this stage in the financial year capital expenditure continues to be below target. Due to delays as a result of the COVID-19 pandemic, capital expenditure has been relatively low over the last twelve months. 2.4.4 The levels of investments were £117.9m at 30 June 2022. The average rate of return achieved was 1.351% which compares favourably with the SONIA (Sterling Overnight Index Average) for the same period of 1.064%. 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 £364.558m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 2.5.3 At 31 March 2022, the Council had a total of £103.626m of usable reserves. Of this: • £2.682m relates to the Repairs and Renewals Fund • £4.414m relates to Capital Funds • £96.530m was held in the General Fund, with £89.433m of this balance earmarked for specific purposes. 2.5.4 Of the earmarked balance of £89.433m: • £46.923m is invested or committed for major initiatives/capital projects • £37.089m is still to be drawn down in 2022-23 • £5.421m is planned to be spent in future years Page 10
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2.5.5 The table below summarises the estimated Unallocated General Fund Balance as at the end of the financial year: Heading Detail £000 Unallocated General Fund as at 31 March 2022 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.256m 1,841 Budgeted allocation to General Fund for 2022-23 Budget Per the Budget Motion at Council on 24 February 22 2,482 Current Forecast Outturn for 2022-23 as at 30 June 2022 0 Estimated Unallocated balance as at 31 March 2023 4,323 2.5.6 It can be seen that, after taking into consideration the Budget Motion and the current forecast outturn for 2022-23, the Council is forecast to have a £4.323m surplus over contingency. 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 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 periods April to June 2022, there are no virements requiring authorisation. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Consider the revenue budget monitoring report as at 30 June 2022 b) Note the financial risks for 2022-23 c) Note the capital plan monitoring report as at 30 June 2022 and approve the proposed changes to the capital plan outlined in Appendix 4 of that report. d) Note the treasury monitoring report as at 30 June 2022 Page 11
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e) Consider the reserves and balances report as at 30 June 2022 f) Note there are no revenue virements over £0.200m between April and June 2022 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the revenue and capital monitoring for 2022-23 as at 30 June 2022. 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. Kirsty Flanagan Section 95 Officer 8 July 2022 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 12
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REVENUE BUDGET MONITORING REPORT AS AT 30 JUNE 2022 POLICY & RESOURCES COMMITTEE 12 AUGUST 2022 2022-23 Overall Position: There is no reported forecast under or overspend position for the Council at this time. It is common for there to be no forecast variances reported this early in the financial year. There is a year to date underspend of £1.087m. The year to date variances within the departments tend to relate to the timing of income and expenditure and recharging of costs to capital. The system replacement and downtime has meant that budget profiles were unable to be refined in the first quarter of the financial year so profiling issues are a common theme through the detailed reports which follow. Key Highlights as at June 2022: • The Oracle Fusion system implementation has impacted the year to date position noted for June 2022 as budget profiles were unable to be refined in the first quarter of the financial year. The implementation is progressing well and the issues with profiling will be resolved by the next reporting period. Key Financial Successes: Performance against budget for 2021-22 was an overall net favourable position of £1.630m underspend after adjusting for year-end earmarking. This breaks down as: • £0.815m net underspend in relation to Council service departmental expenditure • £0.432m net overspend in relation to other central costs • £1.247m over-recovery of Council Tax income. Key Financial Challenges: Proposed Actions to address Financial Challenges: Ongoing consideration of the financial impact of COVID on the Council’s revenue position. Continue to identify additional costs as a consequence of COVID to ensure earmarked COVID funds are applied appropriately. Achieving a favourable year-end balanced 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 known 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 2022-23 budget was agreed in February 2022 there are still budget gaps in future years The Council will continue to progress savings options identified in 2021-22 that require further development and seek to identify further savings through themed reviews and business process reviews. Page 13
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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 reviewed. Managing spend in service areas which are demand led and, to some extent, outwith service control, for example Winter Maintenance. Use 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. This is impacted further by the availability of supply as a result of the COVID-19 pandemic, UK exit from the European Union, invasion of Ukraine and sanctions on Russian owned entities to name a few influencing factors. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be 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 reported through the budget monitoring and preparation processes. Forecast Outturn Position There is no forecast projection for 2022-23 as at the end of June 2022. Department Annual Budget £'000 Forecast Outturn £'000 Current Forecast Variance £'000 Previous Forecast Variance £000 Change £000 Explanation Chief Executive's Unit 5,925 5,925 0 0 0 Executive Director (Douglas Hendry) 122,282 122,282 0 0 0 Executive Director (Kirsty Flanagan) 44,121 44,121 0 0 0 Social Work 72,911 72,911 0 0 0 Central Budgets 23,887 23,887 0 0 0 Financed By (269,126) (269,126) 0 0 0 Total 0 0 0 0 0 Current Forecast Outturn Variance with change from previous month No forecast variances reported for any department as at June 2022 Page 14
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(2,000) (500) 1,000 April May June July August September October November December January February £ 000 Movement in the forecast outturn position for each Department from the start of the financial year Chief Executive's Unit Executive Director (Kirsty Flanagan) Social Work Central Budgets Executive Director (Douglas Hendry) Underspend Overspend Page 15
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Year to Date Position The year to date position as at the end of June 2022 is an underspend of £1.087m and the main variances are noted below. Department YTD Actual £'000 YTD Budget £'000 YTD Variance £'000 Explanation Chief Executive's Unit 1,423 1,290 (133) Executive Director (Douglas Hendry) 30,853 31,835 982 Executive Director (Kirsty Flanagan) 10,313 8,602 (1,711) Social Work 14,629 17,447 2,818 Central Budgets 276 2,406 2,130 Funding (64,811) (67,810) (2,999) Total Net Expenditure (7,317) (6,230) 1,087 The year to date variance is largely due to profiling of budgets as opposed to genuine under or over spends. This will be rectified in the coming weeks once the new financial ledger system is fully implemented Page 16
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0% 25% 50% 75% 100% Chief Executive's Unit Executive Director (Kirsty Flanagan) Executive Director (Douglas Hendry) Social W ork Central Budgets TOTAL Expenditure to date against the remaining budget for each Department YTD Actual Remaining Budget Further information on the departmental year to date variances is included later on in the report. Page 17
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OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 30 JUNE 2022 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Departmental Budgets Chief Executive's Unit 1,423 1,290 (133) (10.3%) 5,925 5,925 0 0.0% Executive Director (Kirsty Flanagan) 10,313 8,602 (1,711) (19.9%) 44,121 44,121 0 0.0% Executive Director (Douglas Hendry) 30,853 31,835 982 3.1% 122,282 122,282 0 0.0% Social Work 14,629 17,447 2,818 16.2% 72,911 72,911 0 0.0% Total Departmental Budgets 57,218 59,174 1,956 3.3% 245,239 245,239 0 0.0% Central Budgets Other Operating Income and Expenditure (562) 431 993 230.4% 1,988 1,988 0 0.0% Joint Boards 313 374 61 16.3% 1,496 1,496 0 0.0% Non-Controllable Costs 525 1,601 1,076 67.2% 20,403 20,403 0 0.0% Total Central Budgets 276 2,406 2,130 88.5% 23,887 23,887 0 0.0% TOTAL NET EXPENDITURE 57,494 61,580 4,086 6.6% 269,126 269,126 0 0.0% Financed By Aggregate External Finance (53,856) (53,994) (138) 0.3% (216,346) (216,346) 0 0.0% Local Tax Requirement (10,955) (13,816) (2,861) 20.7% (55,262) (55,262) 0 0.0% Contributions to General Fund 0 0 0 0.0% 2,482 2,482 0 0.0% Earmarked Reserves 0 0 0 0.0% 0 0 0 0.0% Total Funding (64,811) (67,810) (2,999) 4.4% (269,126) (269,126) 0 0.0% (Deficit)/Surplus for Period (7,317) (6,230) 1,087 0 0 0 CURRENT PROJECTED FINAL OUTTURNYEAR TO DATE POSITION Page 18
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 30 JUNE 2022 YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Subjective Category Employee Expenses 35,945 37,580 1,635 4.4% 167,294 167,294 0 0.0% Premises Related Expenditure 2,234 3,886 1,652 42.5% 16,491 16,491 0 0.0% Supplies and Services 4,836 5,762 926 16.1% 20,950 20,950 0 0.0% Transport Related Expenditure 2,881 2,916 35 1.2% 17,004 17,004 0 0.0% Third Party Payments 29,753 40,835 11,082 27.1% 163,668 163,668 0 0.0% Capital Financing (157) 0 157 14,289 14,289 0 0.0% TOTAL EXPENDITURE 75,492 90,979 15,487 17.0% 399,696 399,696 0 0.0% Income (82,810) (97,210) (14,400) 14.8% (399,696) (399,696) 0 0.0% (Deficit)/Surplus for Period (7,317) (6,230) 1,087 0 0 0 YEAR TO DATE POSITION CURRENT PROJECTED FINAL OUTTURN 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 19
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CHIEF EXECUTIVE’S UNIT – AS AT 30 JUNE 2022 The department is currently forecasting spend in line with budget. The department has a year to date overspend of £0.133m (10.3%) which can be attributed to profiling issues. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Executive 894 894 0 0 0 Head of Financial Services 5,031 5,031 0 0 0 Totals 5,925 5,925 0 0 0 Year to Date Position 0% 25% 50% 75% 100% Chief Executive Head of Financial Services Expenditure to date against the remaining budget for each Service YTD… Remaining Budget… Key Financial Successes: • The department is currently forecasting that spend will be in line with budget for 2022-23. • All savings options have been delivered. • The department’s 2021-22 outturn position was an underspend of £0.018m. This resulted from an overall underspend of £2.013m offset by earmarking of £1.769m due to auto-carry forwards including unspent grants and COVID-19 funding and £0.226m of unspent budget earmarkings. Key Financial Challenges: Proposed Actions to address Financial Challenges: 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 high inflation and service Ensure the team is operating as efficiently and effectively as possible to enable continued support to departments with reduced resources by building resilience through knowledge sharing across Page 20
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demand caused by world events including the COVID-19 pandemic and the conflict in Ukraine. the team and maximising the benefits to the service from the implementation of the Oracle Fusion Financial Ledger System. Carry out a business process review of the Revenues and Benefits function to determine if there is scope to deliver the service in a more cost effective manner. Work collaboratively with other services of the Council to identify opportunities to improve the operational and financial efficiency of services and to support evidence based decision making. Page 21
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 30 JUNE 2022 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 65 68 3 4.4% 327 327 0 0.0% Outwith reporting criteria Community Planning & Development 158 124 (34) (27.4%) 567 567 0 0.0% Profile related overspend on third party payments partially offset by unbudgeted income. 223 192 (31) (16.2%) 894 894 0 0.0% Accounting & Budgeting 580 468 (112) (23.9%) 2,138 2,138 0 0.0% Overspend caused by profiling issues on income budgets (will be rectified July) and spend for which earmarkings require to be drawn down Internal Audit & Fraud 54 49 (5) (10.2%) 252 252 0 0.0% Overspend caused by profiling issues on income budgets (will be rectified July) partially offset by underspend in staffing due to vacancy Revenues & Benefits (17) 447 464 103.8% 2,093 2,093 0 0.0% Underspend from Housing Benefits Private which is normally reprofiled to avoid large variances due to the nature of the cost centre - this was not possible in June due to the new financial system implementation Scottish Welfare Fund 583 134 (449) (335.1%) 548 548 0 0.0% Profile related overspend on third party payments and income accrued but not yet received in 1,200 1,098 (102) (9.3%) 5,031 5,031 0 0.0% 1,423 1,290 (133) (10.3%) 5,925 5,925 0 0.0% Page 22
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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 23
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CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 30 JUNE 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 1,057 1,071 14 1.3% 5,031 5,031 0 0.0% Outwith reporting criteria Premises 0 0 0 0.0% 0 0 0 0.0% Outwith reporting criteria Supplies and Services 145 140 (5) (3.6%) 579 579 0 0.0% Outwith reporting criteria Transport 2 8 6 75.0% 32 32 0 0.0% Underspends on staff travel budgets Third Party 4,637 6,241 1,604 25.7% 24,962 24,962 0 0.0% Profiling issues on Housing Benefits Private budget Income (4,418) (6,170) (1,752) 28.4% (24,679) (24,679) 0 0.0% Profiling issues on Housing Benefits Private budget Totals 1,423 1,290 (133) (10.3%) 5,925 5,925 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 24
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CHIEF EXECUTIVE’S UNIT – RED VARIANCES AS AT 30 JUNE 2022 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 25
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 30 JUNE 2022 The department is currently forecasting spend in line with budget. It is common for there to be no forecast variances reported this early in the financial year. The department has a year to date (YTD) underspend of £0.982m (3.1%). The year to date underspend position is mainly due to budget profiling which will be refined through July 2022 once the new financial ledger system is fully functional. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Douglas Hendry) (61) (61) 0 0 0 Head of Commercial Services 9,645 9,645 0 0 0 Head of Education 93,648 93,648 0 0 0 Head of Legal and Regulatory Support 19,050 19,050 0 0 0 Totals 122,282 122,282 0 0 0 Year to Date Position Key Financial Successes: The 2021-22 year-end consolidated outturn position was an under spend of £0.223m after adjusting for earmarkings. This was due to the effective contract management of NPDO and Hub Schools contracts, including a lower than expected insurance premium as a result of the annual renegotiation of insurance costs. Also the costs of COVID were contained and minimised where possible across departments with staff from all areas of the service assisting in planning, implementing and delivering a wide range of additional services in schools and communities and helping businesses through the return from lockdown. 0% 25% 50% 75% 100% Executive Director (Douglas Hendry) Head of Commercial Services Head of Education Head of Legal and Regulatory Support Expenditure to date against the remaining budget for each Service YTD… Remaining Budget… Page 26
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Key Financial Challenges: Proposed Actions to address Financial Challenges: The ongoing impact of COVID-19 Costs are being contained where possible. Impact of numbers/uptake in demand led service areas like catering, design services and licensing. Continually refine/develop systems to accurately calculate forecast outturns and the impact on the future financial outlook. Manage the impact of the Statutory Guidance supporting Nutritional Requirements for Food and Drink in Schools (Scotland) Regulations 2020, on the cost of producing school meals and also the uptake. Monitor and report on the impact on costs and on income as the year progresses. Support longer term service re-design project for Catering and Cleaning services to ensure efficiencies and financial savings are secured for the Council as well as delivery of free school meals for 1140 hours of Early Learning and Childcare and the phased universal free school meals expansion in Primary Schools. Effective working with partners and support with implementation of service delivery method. Continual monitoring and review of budgets. Legislative/policy requirements not fully funded by Scottish Government which may put additional burdens on the Council. For example, the introduction of free school meal payments for holidays. Analysis of new obligations and whether they incur additional costs not met through increased grant. The Council has a requirement to deliver 1140 hours of Early Learning and Childcare. The initial funding from Scottish Government was based on individual implementation plans with funding confirmed up to March 2022. The ring fenced grant has been reduced in 2022-23 and an exercise is required to ensure that the service can be delivered efficiently and effectively within this reduced funding allocation. Robust service costings, financial monitoring and timely reporting to ensure the service can continue to deliver the service within the financial resources available. 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. Page 27
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 30 JUNE 2022 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 70 69 (1) (1.5%) (61) (61) 0 0.0% Outwith Reporting Criteria 70 69 (1) (1.5%) (61) (61) 0 0.0% Head of Commercial Services Catering (58) 125 183 146.4% 1,110 1,110 0 0.0% The YTD underspend of £183k is due to the profiling of the catering purchases budget, this will be refined through July. Head of Commercial Services Central/Management Costs 230 207 (23) (11.1%) 950 950 0 0.0% The YTD overspend of £23k is due to profiling of Our Modern Workspace budget which will be refined through July. Head of Commercial Services CHORD 47 (5) (52) 1040.0% 20 20 0 0.0% The YTD overspend of £52k is due to the profiling of Income which will be refined through July. Head of Commercial Services Cleaning (43) 31 74 238.7% 417 417 0 0.0% The YTD underspend of £74k is due to the profiling of staffing budgets which will be rectified in July. Head of Commercial Services Culture, Heritage, Recreation & Sport 1,420 1,459 39 2.7% 5,812 5,812 0 0.0% Outwith Reporting Criteria Page 28
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Head of Commercial Services Events & Commercial Catering 41 (15) (56) 373.3% (22) (22) 0 0.0% The YTD overspend of £56k is partially due to an under recovery of income from events and profiling which will be refined through July. Head of Commercial Services Property Portfolio (93) (49) 44 (89.8%) (194) (194) 0 0.0% The YTD underspend of £44k is due to the profiling of rental income and surplus property budgets. These will be refined through July. Head of Commercial Services Property Services 495 61 (434) (711.5%) 500 500 0 0.0% The YTD overspend of £434k is due to the profiling of internal property fees, this profile will be rectified in July. Head of Commercial Services Shared Offices 204 325 121 37.2% 1,052 1,052 0 0.0% The YTD underspend is due to the timing of the central repairs invoicing and utilities profiling, both of which will be rectified through July. 2,243 2,139 (104) (4.9%) 9,645 9,645 0 0.0% Head of Education Additional Support for Learning 2,099 2,342 243 10.4% 9,874 9,874 0 0.0% The YTD underspend of £243k is due to profiling of staffing budgets and third party payment budgets. All will be refined through July. Head of Education Central/Management Costs 434 437 3 0.7% 1,476 1,476 0 0.0% Outwith Reporting Criteria Head of Education Community Learning & Development (7) 2 9 450.0% 10 10 0 0.0% The YTD underspend of £9k is profile related and will be rectified in July. Page 29
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Head of Education COVID 242 0 (242) 0.0% 414 414 0 0.0% The YTD overspend of £242k is mainly due to the profiling of Covid Hardship Funding payments which will be rectified in July. Head of Education Early Learning & Childcare 3,182 4,606 1,424 30.9% 8,324 8,324 0 0.0% The YTD underspend of £1.424m is due to profiling of Employee, Third Party Payments and Income Budgets. Some alignment of staffing budgets is also required. Head of Education Primary Education 8,458 8,261 (197) (2.4%) 34,433 34,433 0 0.0% The YTD overspend of £197k is due to profiling issues with Employee Budgets and Catering Income budgets. All will be refined through July. There are also a number of budget adjustments required to align covid funding to current spend that will be processed in July. Head of Education Pupil Support 448 536 88 16.4% 2,169 2,169 0 0.0% The YTD underspend is due to profiling issues with Employee budgets, Third Party Payment Budgets and Government Grants. All will be refined through July. Head of Education Schools - Central Services 544 625 81 13.0% 2,665 2,665 0 0.0% The YTD underspend of £81k is mainly due to profiling of Employee, Supplies and Services and Income Budgets which will be refined through July. There is an overspend of £15k in Education Licenses and budget will require to be identified from within the service to fund this overspend. Page 30
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Head of Education Secondary Education 6,910 7,944 1,034 13.0% 34,283 34,283 0 0.0% The YTD underspend of £1.034m is mainly due to profiling issues with Employee Expenses and Income budgets which will be refined through July. £439k of this underspend is accrued expenditure for SQA Exam Fees that will be eliminated when the invoice is received and paid. There are also a number of budget adjustments required to align Covid funding to current spend that will be processed in July. 22,310 24,753 2,443 9.9% 93,648 93,648 0 0.0% Head of Legal & Regulatory Support Central/Management Costs 49 55 6 10.9% 258 258 0 0.0% The YTD underspend of £6k is due to profiling issues that will be refined through July. Head of Legal & Regulatory Support Community Safety 39 35 (4) (11.4%) 161 161 0 0.0% The YTD overspend of £4k is due to profiling issues that will be rectified through July. Head of Legal & Regulatory Support Elections 65 95 30 31.6% 386 386 0 0.0% The YTD underspend of £30k is due to profiling issues that will be rectified through July. Head of Legal & Regulatory Support Governance 163 169 6 3.6% 784 784 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Governance, Risk & Safety 109 115 6 5.2% 542 542 0 0.0% Outwith Reporting Criteria Page 31
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Head of Legal & Regulatory Support Legal Services 150 131 (19) (14.5%) 677 677 0 0.0% The YTD overspend of £19k is due to profiling of Employee and Income Budgets which will be rectified through July. Head of Legal & Regulatory Support NPDO and Hub Schools 5,171 3,910 (1,261) (32.3%) 14,512 14,512 0 0.0% The YTD overspend of £1.261m is due to the profiling of Income Budgets and will be rectified through July. Head of Legal & Regulatory Support Procurement, Commisioning and Contracts 212 238 26 10.9% 1,132 1,132 0 0.0% The YTD underspend of £26k is partly due to staff vacancies and also profiling of Employee Budgets which will be refined through July. Head of Legal & Regulatory Support Trading Standards & Advice Services 272 126 (146) (115.9%) 598 598 0 0.0% The YTD overspend is mainly due to payments being made to advice services that will be rectified by drawing down funds held in earmarked reserves. 6,230 4,874 (1,356) (27.8%) 19,050 19,050 0 0.0% 30,853 31,835 982 3.1% 122,282 122,282 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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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 30 JUNE 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 20,877 21,793 916 4.2% 93,452 93,452 0 0.0% Non-Education: YTD underspend of £137k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Education: YTD underspend of £779k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Premises 1,487 1,683 196 11.7% 7,207 7,207 0 0.0% Non-Education: YTD underspend of £146k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Education: YTD underspend of £50k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Supplies and Services 2,396 2,919 523 17.9% 10,276 10,276 0 0.0% Non-Education: YTD underspend of £299k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Education: YTD underspend of £223k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Transport 73 64 (9) (14.1%) 256 256 0 0.0% Non-Education: YTD underspend of £6k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Education: YTD overspend of £15k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Third Party 7,904 10,154 2,250 22.2% 39,250 39,250 0 0.0% Non-Education: YTD underspend of £120k due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Education: YTD underspend of £2.129m due to profiling, budget required to be profiled across department in line with anticipated spend and will be rectified in July. Also £439k accrued expenditure for SQA Exams which will be eliminated when invoice received from SQA. Income (1,884) (4,778) (2,894) 60.6% (28,159) (28,159) 0 0.0% Non-Education: YTD overspend of £2.171m due to profiling, budget required to be profiled across department in line with anticipated receipt of income and will be rectified in July. Education: YTD underspend of £0.722m due to profiling, budget required to be profiled across department in line with anticipated receipt of income and will be rectified in July. Totals 30,853 31,835 982 3.1% 122,282 122,282 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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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES AS AT 30 JUNE 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation A Red variance is a forecast variance which is greater than +/- £50,000. Page 34
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 30 JUNE 2022 The department is currently forecasting spend in line with budget. It is common for there to be no forecast variances reported this early in the financial year. The department has a year to date overspend of £1.711m (19.9%). This is mainly due to profiling adjustments which will be refined through July 2022 once the new financial ledger system is fully functional. These profiling adjustments largely relate to income budgets within Roads and Marine services. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Executive Director (Kirsty Flanagan) (270) (270) 0 0 0 Head of Customer Support Services 8,152 8,152 0 0 0 Head of Development and Economic Growth 7,710 7,710 0 0 0 Head of Roads and Infrastructure Services 28,529 28,529 0 0 0 Totals 44,121 44,121 0 0 0 Year to Date Position Key Financial Successes: At the end of financial year 2021-22 the department showed an overall underspend of £0.574m after taking into account all earmarkings. The main underspends were due to the over-recovery of vacancy savings, additional income in Environmental Health from Private Water Supply Appraisals and additional Planning Fee income which was partially offset by the under-recovery of Building Warrant income. Overall there was a favourable net position. -95% -70% -45% -20% 5% 30% 55% 80% 105% Executive Director (Kirsty Flanagan) Head of Customer Support Services Head of Development and Economic Growth Head of Roads and Infrastructure Services Expenditure to date against the remaining budget for each Service YTD… Remaining Budget… Page 35
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Key Financial Challenges: Proposed Actions to address Financial Challenges: The impact of COVID-19 Costs are being contained where possible. 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. Dangerous buildings as there is no budget for this expenditure and the council has no control over the demand for the service. Building Standards, Legal Services and Financial Services are working closely to manage debt recovery and to consider other options to minimise corporate risk exposure. Due to the nature of the various components of Waste Management there are ongoing challenges with: • The 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 To closely monitor all service components of Waste Management and review the Waste Strategy in conjunction with our contractual partner Renewi (previously Shanks). Winter Maintenance costs are difficult to estimate as they are very much dependant on the weather. Close monitoring of Winter Maintenance 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 58 full equivalent runs. There is a sophisticated weather monitoring system in place consisting of several weather stations, this is supported by a forecasting and metrological service which is collaboratively procured by West of Scotland local authorities. Rising cost of materials across the service will result in a reduction in activity or overspends. Specifically there have been significant increases in the price of salt and bitumen in recent months. Costs are monitored regularly and contained as much as possible, with any unavoidable overspends highlighted as soon as known. Page 36
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 30 JUNE 2022 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 52 53 1 1.9% (270) (270) 0 0.0% Outwith Reporting Criteria 52 53 1 1.9% (270) (270) 0 0.0% Head of Customer Support Services Central/Management Costs 29 36 7 19.4% 166 166 0 0.0% Profile of budget in payments to other bodies needs to be profiled in line with planned expenditure timings. Head of Customer Support Services Communications 18 65 47 72.3% 306 306 0 0.0% Bord na Gaidhlig income received in advance of expenditure. Head of Customer Support Services Customer Service Centres 268 294 26 8.8% 1,321 1,321 0 0.0% Outwith Reporting Criteria Head of Customer Support Services HR 418 485 67 13.8% 2,287 2,287 0 0.0% Vacancies in Performance Management - vacancy savings not yet processed. Head of Customer Support Services ICT 584 882 298 33.8% 3,994 3,994 0 0.0% Profile of budgets in supplies and services needs to be profiled in line with planned expenditure timings. Head of Customer Support Services Registrars (37) 3 40 1333.3% 78 78 0 0.0% Vacancy savings have not yet been taken and income profile needs to be adjusted. 1,280 1,765 485 27.5% 8,152 8,152 0 0.0% Head of Development & Economic Growth Airports 330 268 (62) (23.1%) 1,163 1,163 0 0.0% Private contractor budget needs to be profiled in line with anticipated expenditure. Head of Development & Economic Growth Building Control (103) 1 104 10400.0% (108) (108) 0 0.0% Income currently ahead of budget profile which will be closely monitored over the coming months. Head of Development & Central/Management Costs 96 122 26 21.3% 574 574 0 0.0% Budget profile needs to be amended. Page 37
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Economic Growth Head of Development & Economic Growth Culture & Heritage 17 49 32 65.3% 216 216 0 0.0% Budget for Rothesay Pavilion not currently needed - will be profiled for future monitoring. Head of Development & Economic Growth Development Management (137) 3 140 4666.7% 238 238 0 0.0% Planning Fee income currently ahead of profile. Head of Development & Economic Growth Development Policy 72 80 8 10.0% 379 379 0 0.0% Subscription budgets need to be profiled in line with anticipated expenditure. Head of Development & Economic Growth Economic Development (209) 272 481 176.8% 1,038 1,038 0 0.0% Income for Islands Infrastructure Fund received in advance of payments. Head of Development & Economic Growth Environmental Health 187 233 46 19.7% 1,284 1,284 0 0.0% Income for Private Water Supply Appraisal currently ahead of budget profile which will be closely monitored over the coming months. Head of Development & Economic Growth Environmental Initiatives 44 24 (20) (83.3%) 114 114 0 0.0% Profile of third party payment. Head of Development & Economic Growth Housing 1,397 951 (446) (46.9%) 2,593 2,593 0 0.0% Expenditure payments for HEEPS incurred prior to grant income being received. Head of Development & Economic Growth Transportation Policy 13 49 36 73.5% 219 219 0 0.0% CWSS income received in advance of expenditure. 1,707 2,052 345 16.8% 7,710 7,710 0 0.0% Head of Roads & Infrastructure Services Amenity 802 684 (118) (17.3%) 2,792 2,792 0 0.0% Income budget requires to be profiled in line with anticipated income timings. Head of Roads & Infrastructure Services Car Parking (98) (166) (68) 41.0% (619) (619) 0 0.0% Income budget requires to be profiled in line with anticipated income timings. Page 38
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Head of Roads & Infrastructure Services Central/Management Costs 652 635 (17) (2.7%) 2,896 2,896 0 0.0% Outwith Reporting Criteria Head of Roads & Infrastructure Services Depots 94 (91) (185) 203.3% (469) (469) 0 0.0% Income budget requires to be profiled in line with anticipated income timings. Head of Roads & Infrastructure Services Fleet & Transport 2,191 727 (1,464) (201.4%) 8,260 8,260 0 0.0% Income budget requires to be profiled in line with anticipated income timings. Head of Roads & Infrastructure Services Infrastructure 85 142 57 40.1% 720 720 0 0.0% Coastal and Flood budget requires to be profiled in line with anticipated expenditure. Head of Roads & Infrastructure Services Marine (293) (1,515) (1,222) 80.7% (4,371) (4,371) 0 0.0% Income behind budget profile - profile will be amended and income levels closely monitored. Head of Roads & Infrastructure Services Network & Traffic Management 55 25 (30) (120.0%) 166 166 0 0.0% Income behind budget profile - profile will be amended and income levels closely monitored. Head of Roads & Infrastructure Services Road Safety 20 38 18 47.4% 178 178 0 0.0% Vacancy savings not yet been taken. Head of Roads & Infrastructure Services Roads & Lighting 2,702 1,282 (1,420) (110.8%) 6,143 6,143 0 0.0% Income budget requires to be profiled in line with anticipated income timings. Head of Roads & Infrastructure Services Waste 1,064 2,971 1,907 64.2% 12,833 12,833 0 0.0% Income ahead of budget profile - profile will be looked and income levels monitored closely. 7,274 4,732 (2,542) (53.7%) 28,529 28,529 0 0.0% 10,313 8,602 (1,711) (19.9%) 44,121 44,121 0 0.00% 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 39
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 30 JUNE 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 7,084 7,560 476 6.3% 35,352 35,352 0 0.0% Vacancy savings have not yet been taken for vacant posts throughout the department. Budget for overtime needs to be profiled in line with anticipated expenditure i.e. winter months. Premises 575 746 171 22.9% 2,990 2,990 0 0.0% Depot recharge budget needs profiled in line with anticipated expenditure and current underspend in CRA budgets across the department. Supplies and Services 1,772 1,990 218 11.0% 8,061 8,061 0 0.0% Profile of budgets in ICT needs to be profiled in line with planned expenditure timings. Transport 2,679 2,676 (3) (0.1%) 15,837 15,837 0 0.0% Outwith Reporting Criteria. Third Party 6,817 8,533 1,716 20.1% 35,828 35,828 0 0.0% Budget requires to be profiled in Waste and Roads and Lighting Holding Account, and across the department, in line with anticipated expenditure timings. Capital Financing 0 0 0 0.0% 1,591 1,591 0 0.0% Outwith Reporting Criteria. Income (8,614) (12,903) (4,289) 33.2% (55,538) (55,538) 0 0.0% Budget for Roads Operational Holding Accounts needs profiled in line with anticipated income timings (£2,239k). Accruals for HEEPS income still outstanding (£705k). Public transport income needs profiled in line with anticipated income timings (£1,285k) Totals 10,313 8,602 (1,711) (19.9%) 44,121 44,121 0 0.0% Page 40
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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 41
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 30 JUNE 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation A red variance is a forecast variance which is greater than +/- £50,000. Page 42
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SOCIAL WORK – AS AT 30 JUNE 2022 The department is currently forecasting spend in line with budget. The department has a year to date underspend of £2.818m (16.2%). This is mainly due to a large number of budget profile adjustments across Social Work that will be refined through July 2022 once the new financial ledger system is fully functional. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance £000 Previous Forecast Variance £000 Change £000 Chief Officer Integration 1,982 1,982 0 0 0 Head of Adult Services 55,089 55,089 0 0 0 Head of Children and Families 15,387 15,387 0 0 0 Head of Strategic Planning and Performance 453 453 0 0 0 Totals 72,911 72,911 0 0 0 Year to Date Position 0% 25% 50% 75% 100% Chief Officer Integration Head of Adult Services Head of Children and Families Head of Strategic Planning and Performance Expenditure to date against the remaining budget for each Service YTD… Remaining Budget… Key Financial Successes: Delivered an underspend at the end of 2021/22 after automatic earmarkings and full repayment of £2.759m of debt owed to the Council for prior year deficits. This should allow for future investment and transformation across Social Work with prior year deficits now fully repaid. Page 43
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Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the outstanding savings total for 2022/23 of £966k (as at June 2022). Maintain a close working relationship with the HSCP Service Improvement Team in order 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 in the medium to long term. Support from finance to assist strategic managers to look beyond the short term to identify and plan the changes which will be needed to address the expected ongoing budget challenge over the next 3 to 5 years. Support the HSCP through recovery from the COVID-19 pandemic. There have been additional costs and pressures across the HSCP as a direct result of the partnership’s response to COVID-19. These costs are captured and reported to the Scottish Government via Mobilisation Plans. Support from finance to assist the service in capturing details of all additional costs associated with the response to COVID-19 to ensure these are included in Scottish Government funding returns. Page 44
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 30 JUNE 2022 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 53 98 45 45.9% 446 446 0 0.0% The YTD variance is as a result of budget profiling for payments to other bodies and audit fees. This needs to be adjusted in line with planned expenditure. Chief Officer Integration Social Work Central Support (208) 682 890 130.5% 1,536 1,536 0 0.0% The YTD variance is as a result of budget profiling for payments to other bodies. This needs to be adjusted in line with planned expenditure. (155) 780 935 2 1,982 1,982 0 0 Head of Strategic Planning & Performance Management & Central Costs 206 88 (118) (134.1%) 421 421 0 0.0% The YTD variance is as a result of an invoice being miscoded. This will be adjusted in July. Head of Strategic Planning & Performance Service Development 12 5 (7) (140.0%) 32 32 0 0.0% The YTD variance is as a result of budget profiling for income receipt. This needs to be adjusted in line with anticipated receipt. 218 93 (125) (3) 453 453 0 0 Head of Adult Care - Older Adults & Community Hospitals Management & Central Costs 133 103 (30) (29.1%) 257 257 0 0.0% The YTD variance is as a result of budget profiling for income receipt. This needs to be adjusted in line with anticipated receipt. Page 45
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Head of Adult Care - Older Adults & Community Hospitals Older People 6,904 8,708 1,804 20.7% 37,163 37,163 0 0.0% The YTD variance is as a result of budget profiling for payments to third parties, which includes additional funding received from Scottish Government this financial year. This needs to be profiled in line with planned expenditure. 7,037 8,811 1,774 20.1% 37,420 37,420 0 0.0% Head of Adult Care - LD, Mh & Life Long Conditions Learning Disabilities 3,275 3,072 (203) (6.6%) 12,302 12,302 0 0.0% The YTD variance is as a result of budget profiling for payments to third parties and income. This needs to be adjusted in line with planned expenditure and anticipated income receipt. Head of Adult Care - LD, Mh & Life Long Conditions Management & Central Costs 23 29 6 20.7% 128 128 0 0.0% The YTD variance is as a result of underspends on staffing costs (not yet taken towards vacancy savings target) combined with small underspends across supplies and services as a result of budget profiling. This needs adjusted in line with planned expenditure. Head of Adult Care - LD, Mh & Life Long Conditions Mental Health 573 562 (11) (2.0%) 2,499 2,499 0 0.0% The YTD variance is as a result of budget profiling for payments to third parties and income. This needs to be adjusted in line with planned expenditure and anticipated income receipt. Head of Adult Care - LD, Mh & Life Long Conditions Physical Disability 854 676 (178) (26.3%) 2,740 2,740 0 0.0% The YTD variance is as a result of budget profiling for income receipt. This needs to be adjusted in line with anticipated receipt. 4,725 4,339 (386) (0) 17,669 17,669 0 0 Page 46
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Head of Children & Families Child Protection 561 728 167 22.9% 3,401 3,401 0 0.0% The YTD variance is as a result of budget profiling for payments to other bodies. This needs to be adjusted in line with planned expenditure. This is combined with underspends as a result of staffing vacancies which have not yet been transferred to vacancy savings. Head of Children & Families Children with a Disability 142 221 79 35.8% 911 911 0 0.0% The YTD variance is as a result of budget profiling for payments to other bodies. This needs to be adjusted in line with planned expenditure. Head of Children & Families Criminal Justice 48 (28) (76) 271.4% 85 85 0 0.0% The YTD variance is as a result of budget profiling for income receipt. Scottish Government grant income has been received slower than anticipated. Head of Children & Families Looked After Children 1,490 1,802 312 17.3% 7,713 7,713 0 0.0% The YTD variance is as a result of budget profiling for payments to other bodies. This needs to be adjusted in line with planned expenditure. Head of Children & Families Management & Central Costs 563 701 138 19.7% 3,277 3,277 0 0.0% The YTD variance is as a result of budget profiling for payments to third parties and rental costs. This needs to be adjusted in line with planned expenditure. This is combined with underspends as a result of staffing vacancies which have not yet been transferred to vacancy savings. 2,804 3,424 620 18.1% 15,387 15,387 0 0.0% GRAND TOTAL 14,629 17,447 2,818 16.2% 72,911 72,911 0 0.0% Page 47
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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 48
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 30 JUNE 2022 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 6,258 6,553 295 4.5% 30,295 30,295 0 0.0% The YTD underspend is mainly due to LD Resource/Day Centres (as posts have been kept vacant to declare linked budget saving) combined with Children & Families Area Teams and Adult Services Assessment & Care Management Teams. These underspends will be used to declare budget savings or be taken towards the vacancy savings target in the forthcoming months. This is partially offset by YTD overspends in Homecare due to the use of agency staff. Premises 208 286 78 27.3% 1,149 1,149 0 0.0% The YTD underspend is due to profiling. This needs to be adjusted in line with planned expenditure. Supplies & Services 457 440 (17) (3.9%) 803 803 0 0.0% The YTD underspend is due to profiling. This needs to be adjusted in line with planned expenditure. Transport 122 159 37 23.3% 628 628 0 0.0% The YTD underspend is due to profiling combined with on-going reduction in travel costs as a consequence of Covid-19. Third Party 9,934 15,387 5,453 35.4% 61,548 61,548 0 0.0% The YTD underspend is due to profiling. This needs to be adjusted in line with planned expenditure. Income (2,350) (5,378) (3,028) 56.3% (21,512) (21,512) 0 0.0% The YTD underspend is due to profiling. This needs to be adjusted in line with anticipated income receipt. Totals 14,629 17,447 2,818 16.2% 72,911 72,911 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 49
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SOCIAL WORK – RED VARIANCES AS AT 30 JUNE 2022 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation A red variance is a forecast variance which is greater than +/- £50,000. Page 50
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MONITORING OF SAVINGS – AS AT 30 JUNE 2022 New policy savings were identified for the three year period 2022-23 to 2024-25 and these were agreed by Council in February 2022. Council agreed to policy savings of £0.280m in 2022-23 rising to £0.286m by 2024-25. The position of historical policy saving options is as follows: - 2021/22 – those not delivered or that have further increase in value in 2022-23 onwards total £0.732m - 2020/21 – those not delivered total £0.050m - 2019/20 – all delivered - 2018/19 - those not delivered total £0.498m The 2022-23 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 are four savings categorised as having a potential shortfall and one currently delayed as summarised below: Saving Saving Agreed Status Detail Shortfall/ Delayed Value TB07 – Depots Feb-18 Potential Shortfall - there is a risk that the original saving will not be achieved in full. Create one main depot in key areas to reduce costs – it has become apparent that the operating costs of the single redeveloped site in each town will increase, reducing the anticipated saving. COVID-19 has also had a detrimental effect on this savings option as construction works were halted at the site in Oban. The Oban site has now all but completed and a saving will be realised against the operating budget of the vacated depot site, which will partially cover some of the required saving. £107,500 TB13b Roads and Amenity Services charging (non- statutory services) Feb-18 Potential Shortfall - there is a risk that the original saving 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, there have been limited opportunities over the last 2 years and opportunities are expected to be limited over the foreseeable future. £100,000 Page 51
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TB12b Stadiums Feb-18 Potential Shortfall - there is a risk that the original saving will not be achieved in full. Due to COVID, discussions have stalled with partners in the Oban and Lorn area with regard to Mossfield stadium, to create a sports Hub, attract external funding to improve facilities and therefore attract additional events to the arena. Once restrictions are eased, the users group will reconvene and report to the steering group. £20,000 DEG05 – Building Standards Feb-20 Potential Shortfall - there is a risk that the original saving will not be achieved in full. Delay in achieving target due to the impact of COVID-19 on the building industry and the number of warrants being granted. This is now exacerbated by the building market which has slowed due to the increase in cost and availability of some materials. £50,000 TB09 – Public Conveniences Feb-18 Delayed - The full saving will not be achieved in line with the original estimated timescale. Installation of door entry systems have seen delays due to COVID and a lack of available suppliers operating at the time. Tender returns have been received significantly over the available budget and work is underway to profile different options to take this scheme forward in whole or in part. £24,000 All policy saving options previously agreed are noted in the table below for information. Page 52
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2022-23 2022-23 £000 FTE Chief Executive's Unit FS02 Feb-22 Financial Services Reduction of vacant 0.4FTE Local Tax Assistant role 10.0 0.40 Delivered Executive Director Douglas Hendry PROP01 Feb-21 Commercial Services Rationalisation of the Council's property estate over a three year programme to identify properties which can either be disposed of or used to generate commercial income 294.20 4.0 Still to be Implemented TB17 Feb-18 Commercial Services Identify opportunities for office rationalisation and raising income 121.50 0.0 On Track to be Delivered CS01 Feb-22 Commercial Services Climate Change & Resource Efficiency 63.0 0.00 On Track to be Delivered CS03 Feb-22 Commercial Services Stretch Targets for One Council Income & Events 20.0 0.00 On Track to be Delivered ED5 Feb-21 Education Review and reduce Clerical Support Entitlement using updated school rolls. 121.00 5.7 Delivered ED01 Feb-22 Education Removal of Community Learning Development Manager Post 66.5 1.00 Delivered Executive Director Kirsty Flanagan CSS03 Feb-22 Customer Support Services Restructure of CSP/Registration Team at Helensburgh Civic Centre 19.0 0.50 On Track to be Delivered DEG01 Feb-22 Development and Economic Growth Crown Estate Administration Contribution to Project Delivery 101.0 0.00 On Track to be Delivered DEG05(a) Feb-20 Development and Economic Growth Raise additional fees by adopting the current Building Cost Information Service (BCIS) guide for the cost of building work. Regular service users have been informed of this change. 50.00 0.0 Potential Shortfall DEG02 Feb-21 Development and Economic Growth Reduction to overtime budget in the provision of fire cover at the airports for weather delayed flights. Arrangements are in place that staff no longer remain at the airport and there is a cut-off period. 22.00 0.0 On Track to be Delivered DEG07 Feb-21 Development and Economic Growth Additional income through fees and charges for s64 Non-Material Amendment Submissions, non e-planning application submissions and property history searches 20.00 0.0 Delivered DEG10 Feb-21 Development and Economic Growth Maximise income through additional private water supplies income from risk assessments of supplies and introducing a new charge for the provision of shellfish movement documents 17.50 0.0 Delivered TB07 Feb-18 Roads and Infrastructure Services Create one main depot in key areas to reduce costs 172.50 0.0 Potential Shortfall TB13b Feb-18 Roads and Infrastructure Services Roads & Amenity Services charging (non- statutory services) 150.00 0.00 Potential Shortfall R&I17 Feb-21 Roads and Infrastructure Services Public transport fare scale increase 76.00 0.0 On Track to be Delivered R&I03 Feb-21 Roads and Infrastructure Services Administrative support - rationalise across service 50.00 2.0 On Track to be Delivered R&I05 Feb-21 Roads and Infrastructure Services Design service fees - bringing in line with industry standards and reduce cost of consultancy. Two posts created as a 50.00 -2.0 On Track to be Delivered R&I09 Feb-21 Roads and Infrastructure Services 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 TB12b Feb-18 Roads and Infrastructure Services Review charges for stadiums to enable improvement work 30.00 0.0 Potential Shortfall R&I04 Feb-21 Roads and Infrastructure Services Fees and charges - commercial waste, TTROs, permits/licenses. Access to debt recovery systems will assist. One post 25.00 -1.0 On Track to be Delivered TB09 Feb-18 Roads and Infrastructure Services Public Conveniences - Progress sustainable models including turnstiles and franchising; establish simpler asset transfer process 24.00 0.0 Delayed R&I16 Feb-21 Roads and Infrastructure Services Introduce new fees for electric vehicle charging 16.00 0.0 On Track to be Delivered R&I15 Feb-21 Roads and Infrastructure Services Emergency services support and fuel provision from our fuel supplies 0.50 0.0 Still to be Implemented TOTAL 1,559.7 11.6 Status of Implementation Template Ref Saving Agreed Service Savings Option Page 53
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 11 AUGUST 2022 FINANCIAL RISKS ANALYSIS 2022-23 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 6 Council wide revenue risks identified for 2022-23 currently amounting to £3.537m. 1.4 There are currently 42 departmental risks totalling £5.795m. Of the 42 departmental risks, one is categorised as almost certain and 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 54
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 11 AUGUST 2022 FINANCIAL RISKS ANALYSIS 2022-23 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 2022-23. 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 2022-23 budget has a 2% pay award assumption across all categories of worker and all grades. Negotiations on the 2022-23 award are in progress and due to the high level of inflation, it is becoming increasingly likely that the Trade Page 55
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Unions will be negotiating a deal at more than 2%. However the affordability for Local Government has to be considered and based on future estimates, anymore more than a 2% pay award is deemed to be unaffordable hence why the budget outlook has been based on 2%. 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% extra in excess of the 2% built in, there would be an additional cost of around £1.5m. The financial risk is recognised at £1.5m at this stage. 3.2.2 Utility costs remain a volatile area and it is difficult to accurately predict how the prices could vary. The outturn in respect of utilities for 2021-22 was an underspend of £0.310m which was partly due to fixed price contracts that had been secured which have now expired. With the volatility of utilities pricing it is very difficult to predict the impact going forward but a financial risk based on a 20% variation in utility costs amounts to £0.706m. 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 £0.553m. 3.2.4 At the budget meeting on 24 February 2022, the Council agreed 6 new policy savings options that would deliver savings over the period 2022-23 to 2024-25. The savings to be delivered in 2022-23 amount to £0.280m. Whilst the Council have a good track record in delivering savings, a 10% shortfall on this savings target would amount to £0.028m. 3.2.5 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 30 June 2022, the net HSCP outturn in 2022-23 is estimated to be a £0.346m overspend (£0m from Social Work and £0.346m from Health). 3.2.6 There is an ongoing requirement to fund unavoidable inflationary cost increases in areas like fuel, food etc. This has been predominantly caused by the lack of availability of supply of labour and materials as a result of the COVID-19 pandemic, the UK exit from the European Union, Russia’s invasion of Ukraine and sanctions on Russian owned entities. The Bank of England are currently forecasting that inflation will continue to rise until around Quarter 1 of 2023 where after they forecast that it will start to fall. We will continue to closely monitor the situation and update our financial forecasts using the best information available to us. Page 56
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3.2.7 The Council wide risks are noted within the table below. Description Likelihood Assessed Financial Impact £000 Pay award exceeding 2% 3 1,500 Energy costs increase by 20% greater than anticipated 3 706 1% variation in Council Tax Income 2 553 10% shortfall on Savings Options 2 28 IJB refer to Council for additional funding to deliver social work services 3 0 1% variation of General Inflation Risk 4 750 Total 3,537 Capital 3.2.8 The finance settlement announcement on 20 December 2021 provided details of the Local Government funding for 2022-23 and there is therefore certainty as to what our funding is in respect of General Capital Grant and the specific capital grants already distributed. 3.2.9 The capital plan for 2022-23 includes an estimate of £1.387m in respect of capital receipts. This is based on an assessment provided by the Special Projects Team in January 2022. A 10% variation equates to £0.139m and this would require to be managed across the capital programme. 3.2.10 3.2.11 3.2.12 General feedback from Scotland Excel and the Project Managers indicates that price increases and uncertainty are being experienced as well as disruptions to the supply chain and longer lead times, particularly in relation to the construction sector and material availability. This can be attributed to a number of factors such as the COVID-19 pandemic, UK exit from the European Union, invasion of Ukraine and sanctions on Russian owned entities to name a few. 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. While it has been possible to estimate the impact of these pressures on some projects, and therefore include those projections within the capital monitoring report, for others it has been more difficult and an overspend has not been forecast at this stage but there are likely to be further significant financial impacts not yet reported within the following projects: - Rothesay Pavilion - Harbour Investment Programme - Helensburgh Waterfront Development - Universal Free School Meals Page 57
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3.2.13 For those liabilities/risks to the capital programme that were known at the start of 2022-23 it was agreed at the budget meeting in February 2022 to use amounts from the Unallocated General Fund, the 2021-22 Revenue Surplus, COVID-19 specific funding and additional borrowing to mitigate these risks. 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 1 125 0 0 2 115 0 0 1 500 4 740 Executive Director Douglas Hendry 2 20 10 765 8 780 2 250 0 0 22 1,815 Executive Director Kirsty Flanagan 2 110 3 240 8 1,735 3 1,155 0 0 16 3,240 Total 5 255 13 1,005 18 2,630 5 1,405 1 500 42 5,795 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 - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence 3 750 Roads and Infrastructure Services Residual Waste H&L and Tiree There is a potential increase to tipping fees and haulage costs for H&L residual waste. The Council’s supplier Barr Environmental (contract to end of 2023) lost a tribunal relating to the underpayment of landfill tax, which may have led to the Council having to source alternatives at a higher cost. Barr appealed the decision which was heard in the Spring and they won the case which should have reduced or eliminated this financial risk. However, the Scottish Government laid an Amendment Order on Friday 1 July 2022 which came into force at 1700 on 1 July which indicates that Landfill tax will be due on materials previously not chargeable and we have now received notification of an increase in 4 655 Page 58
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the cost which officers are currently assessing Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. 5 500 3.3.3 The other risks classified as likely are: SERVICE TITLE OF RISK DESCRIPTION OF RISK LIKELIHOOD FINANCIAL IMPACT £000 Roads and Infrastructure Services Roads Materials - Bitumen Increased cost of asphalt material due to price of crude oil rising. Discussions emerging from the industry about possible rationing of bitumen which, if applied, will affect our programmes due to availability 4 400 Commercial Services Catering Costs – Changes to Food and Drink in Schools Standards The Scottish Government reviewed the regulations that govern the food and drinks currently provided in schools. The proposed changes were published in June 2019 and were implemented from Easter 2021. The revised standards focus on reducing sugar, reducing red and red processed meat and increasing fibre. Thus far, there has been an increase in costs and a reduction in demand for school meals. 4 150 Commercial Services Catering Purchases Increased supplier charges. This estimate does not include the additional risk to food costs and uptake from the changes to food and drink standards in schools. 4 100 Roads and Infrastructure Services Street Lighting Age of lighting stock requires greater maintenance as health and safety becomes a consideration. 4 100 3.4 Changes to Financial Risks since Budget Pack 3.4.1 There have been four changes to the departmental risks since the financial risks report as presented to the Policy and Resources Committee on 24 February 2022, as follows: - The risk in relation to Council Tax Debt Collection recovery has been upgraded from Possible to Almost Certain and the value amended from £0.100m to £0.500m due to poor collection rates at Week 11 2022-23 compared to the same stage last year. Page 59
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- A new risk has been recognised for Road Materials- Bitumen due to the price of crude oil rising. A Likely risk of £0.400m has been recognised. - The risk in relation to Winter Maintenance has increased in value from £0.200m to £0.365m in recognition that the price of salt has increased. - The risk in relation to Environmental Health export certificates has increased from Remote to Unlikely and the value amended from £0.030m to £0.130m to reflect the actual value of outstanding debt and likelihood that this might not be recovered. 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. 4 CONCLUSION 4.1 This report summarises the key financial risks facing the Council. There are a number of Council wide risks and 42 departmental risks identified; one is categorised as almost certain and 5 are 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. Kirsty Flanagan Section 95 Officer 8 July 2022 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney 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 60
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 30 JUNE 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 Chief Executive's Unit Financial Services Council Tax Debt Collection Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. Robust monitoring of arrangements with debt collection agency and performance against target collection rates. 3 100 5 500 Chief Executive's Unit 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 Chief Executive's Unit Financial Services Sundry Debt Recovery Recovery of debt becomes more difficult to pursue in the current economic climate. Robust monitoring of arrangements with debt collection agency. Joint working with Legal Services to assist services with the recovery of aged debt. 3 85 3 85 Chief Executive's Unit Financial Services Non-Domestic Rates Relief Risk of demand changing due to legislative changes outwith our control or new charitable businesses. Outwith direct management control. 3 30 3 30 Executive Director Douglas Hendry Commercial Services Property - Central Repairs Increased demands on central repairs as a result of the decrease in capital funding available and increases in supplier/contractor charges. Joint strategy with procurement colleagues to reduce potential impact of supplier/contractor charges. Close monitoring of central repairs budgets and commitments and instructing only essential repairs. 3 300 3 300 Executive Director Douglas Hendry Commercial Services Catering Costs – Changes to Food and Drink in Schools Standards The Scottish Government reviewed the regulations that govern the food and drinks currently provided in schools. The proposed changes were published in June 2019 and were implemented from Easter 2021. The revised standards focus on reducing sugar, reducing red and red processed meat and increasing fibre. Thus far, there has been an increase in costs and a reduction in demand for school meals. There is a need to work with Education colleagues to ensure the maximum uptake of school meals in secondary schools is achieved. This is very challenging given the reduction in secondary school meal uptake due to COVID. 4 150 4 150 Executive Director Douglas Hendry Commercial Services Catering Costs - Provision of Meals to Early Years Children The Children and Young People (Scotland) Act places duties on Councils to provide meals in an Early Years setting to entitled children where sessions span over lunch time. The total quantum of funding of £1.2m 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 Education colleagues to implement requirements and closely monitor financial implications. Costs likely to be contained within overall early years funding allocation. 2 100 2 100 Executive Director Douglas Hendry Commercial Services Catering Purchases Increased supplier charges. This estimate does not include the additional risk to food cost and uptake from the changes to food and drink standards in schools. Joint strategy with procurement colleagues to reduce potential impact. Control food wastage/portion controls. 4 100 4 100 Executive Director Douglas Hendry Commercial Services Catering - Implementation of Universal Free School Meals in Primary Schools The Scottish Government may not give the local authority adequate funds to support the policy Catering Manager sits on National Operational Delivery Group 2 100 2 100 Executive Director Douglas Hendry Commercial Services Surplus Properties Ongoing market difficulties lead to increased numbers of surplus properties, there are residual running costs associated with surplus properties. One Council property team now in place. 3 50 3 50 As at February 2022 (Budget Setting) As at 30 June 2022 Page 61
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 30 JUNE 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at February 2022 (Budget Setting) As at 30 June 2022 Executive Director Douglas Hendry Commercial Services Leisure Service Level Agreements Increase in RPI resulting in requests for additional funding. Monitoring annual alteration to contract RPI rate and mitigation through financial forecasting and review of existing budget. 2 25 2 25 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 20 2 20 Executive Director Douglas Hendry Education Central Repairs Increased demands on budget as a result of increase in statutory and emergency repairs and increases in supplier/contractor charges. Regular liaison with Property Services re prioritisation and commitment of in-year spend. 2 100 2 100 Executive Director Douglas Hendry Education ASN Support Demand for ASN support continues to increase, resulting in an additional resource requirement. The effect of COVID-19 has further increased demand on this service. Scottish Government has given additional funding for "additional support needs priority for learning" and this has been built into the budget, this will help reduce the demand risk 3 100 3 100 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 altered the implementation plan to align it to the Scottish Government 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 into the staffing model funded by Scottish Government. Continuous monitoring and review of the implementation plan, usage and resources. 3 100 3 100 Executive Director Douglas Hendry Education Legislative Requirements - Education (Scotland) Act Education (Scotland) Act 2000 was enacted March 2016. This places additional requirements on Councils to carry out assessments of the need for the provision of Gaelic Medium Primary Education (GMPE) and the duty to support and promote Gaelic Education. May lead to additional staffing requirements. Monitoring developments of the implementation of the Act and statutory guidance produced and adhered too. 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. 2 100 2 100 Page 62
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 30 JUNE 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at February 2022 (Budget Setting) As at 30 June 2022 Executive Director Douglas Hendry Legal and Regulatory Support NPDO - Reduction in insurance savings within NPDO Schools Increase in insurance costs as a result of Covid-19 and flood claims. Monitoring annual alteration to contract insurance rate and mitigation through financial forecasting and review of existing budget. 2 75 2 75 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 Elections More than 1 by-election required outwith standard election cycle. Outwith direct management control. 2 45 2 45 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 underlicensed 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 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. 1 30 2 130 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 fees reduced by Scottish Government Scottish Government reducing planning fees due to poor performance by the Planning Authority. Details of national Planning Performance Co- ordinator and Fee Reform still awaited. 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. Continue to monitor Development Management income and expenditure tightly and investigate further income generation streams. Lobby Scottish Ministers through professional organisations to increase planning fees to a sustainable level. 3 100 3 100 Page 63
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 30 JUNE 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at February 2022 (Budget Setting) As at 30 June 2022 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. 3 100 3 100 Executive Director Kirsty Flanagan Development and Economic Growth Homelessness Temporary Accommodation Income Unpredictable number of Homeless applications. Inability to recover rent. Increase costs of property maintenance and tenancy change over. Provision of Housing Options information and advice service to minimise number of applicants proceeding to full homeless application. Implementation of Rapid Rehousing Plan. 3 50 3 50 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 Development and Economic Growth Airfields and Air Services - usage The PSO for the existing air service to Coll and Colonsay operating from Connel Airport is due in 2022. It is likely that this will create a budget pressure for a new contract to be established to serve the needs of the island communities. Need to start early in raising awareness of the contract possibility with external contractors. This renewal of the contract has to also be raised with the Scottish Government as there may need to additional Government support to retain this life line service. 2 10 2 10 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Maintenance - Bridges, Culverts & Sea Defences Extreme localised weather may result in loss of bridge, culvert, road or sea defence. The recent storm damage to Bute Sea Wall is likely to cost in excess of £1m to repair so the value on this risk has been updated for 22-23 in recognition of the potential costs associated with this risk Routine inspections to deal with potential weak areas - based on a stitch in time repair regime. 3 750 3 750 Executive Director Kirsty Flanagan Roads and Infrastructure Services Residual Waste H&L and Tiree There is a potential increase to tipping fees and haulage costs for H&L residual waste. The Council’s supplier Barr Environmental (contract to end of 2023) lost a tribunal relating to the underpayment of landfill tax, which may have led to the Council having to source alternatives at a higher cost. Barr appealed the decision which was heard in the Spring and they won the case which should have reduced or eliminated this financial risk. However, the Scottish Government laid an Amendment Order on Friday 1 July 2022 which came into force at 1700 on 1 July which indicates that Landfill tax will be due on materials previously not chargeable and we have now received notification of an increase in the cost which officers are currently assessing Officers currently assessing the potential impact on the Council. 4 655 4 655 Page 64
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APPENDIX 1 DEPARTMENT/SERVICE FINANCIAL RISKS AS AT 30 JUNE 2022 DEPARTMENT SERVICE TITLE OF RISK DESCRIPTION OF RISK MITIGATING ACTIONS IN PLACE LIKELIHOOD FINANCIAL IMPACT £000 LIKELIHOOD FINANCIAL IMPACT £000 As at February 2022 (Budget Setting) As at 30 June 2022 Executive Director Kirsty Flanagan Roads and Infrastructure Services Roads Materials - Bitumen Increased cost of asphalt material due to price of crude oil rising. Discussions emerging from the industry about possible rationing of bitumen which, if applied, will affect our programmes due to availability Increased costs are currently being managed but with further increases likley, this is being closely monitored by managers to evaluate the impact. 4 400 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. 3 200 3 365 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 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 4 100 Executive Director Kirsty Flanagan Roads and Infrastructure Services Ferry Services - income Changes to ferry services resulting in reduced passenger income. Ensure that ferry operators are charged for the correct number of passengers 3 40 3 40 41 4,730 42 5,795 Page 65
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 CAPITAL BUDGET MONITORING REPORT – 30 JUNE 2022 1.0 EXECUTIVE SUMMARY 1.1 This provides an update on the position of the capital budget as at 30 June 2022. The report provides information on the financial position in respect of the capital plan and also the performance in terms of delivery of capital plan projects. 1.2 Financial Position: Current Year to Date – actual net expenditure to date is £3,777k compared to a budget for the year to date of £3,765k giving rise to an overspend for the year to date of £12k (0.3%). Forecast Outturn for 2022-23 – forecast net expenditure for the full financial year is £29,319k compared to an annual budget of £48,555k giving rise to a forecast underspend for the year of £19,236k (39.6%). Total Capital Plan – forecast total net project costs on the total capital plan are £177,521k compared to a total budget for all projects of £177,387k giving rise to a forecast overspend for the overall capital plan of £134k (0.08%). 1.3 Project Delivery: Asset Sustainability – Out of 91 projects there are 85 projects (93%) on track, 6 projects (7%) off track but recoverable and 0 projects off track (0%). Service Development - Out of 41 projects there are 36 projects (88%) on track, 5 projects (12%) off track but recoverable and 0 projects (0%) off track. Strategic Change – Out of 27 projects there are 24 projects (89%) on track, 3 projects (11%) off track but recoverable and 0 projects (0%) off track. 1.4 1.5 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding allocated since the last report has come from SPT, Crown Estate, Scottish Government, income from Lismore Ferry sale and HITRANS. The Council is projecting £1,387k of capital receipts this financial year. At this early stage in the year no receipts have been received but this will be closely monitored throughout the year and any issues highlighted. Page 66
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 CAPITAL BUDGET MONITORING REPORT – 30 JUNE 2022 2.0 INTRODUCTION 2.1 2.2 2.3 2.4 2.5 This report provides an update on the position of the capital budget as at 30 June 2022. The report provides information on the financial position in respect of the capital plan and also the performance in terms of delivery of capital plan projects. Following the decision at Policy and Resources Committee on 9 December 2021, the Rothesay Pavilion project is on pause whilst potential funding options are being considered. The financial information included within this report therefore now excludes amounts relating to Rothesay Pavilion. 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. It was agreed at Environment, Development and Infrastructure Committee on 2 June 2022 that the Chair would approach the Scottish Government with a view to securing additional resources to support the scheme. Project Managers were asked to identify specific Covid-19 impacts on the capital programme. At the budget meeting on 25 February 2021, the Council agreed to provide £2.5m of funding and following agreement at the Policy and Resources Committee on 14 October 2021, this, plus a further £0.146m, was added to the capital programme. Furthermore, at the budget meeting on 24 February 2022, an additional £3.9m was set aside for future capital contract increases. This includes up to £1.2m for Campbeltown Flood Scheme, the final costs of which are estimated to be £15.215m. The Scottish Government will fund 80% of scheme costs with the Council expected to contribute an estimated £3.043m. The impact of the pandemic along with the UK exit from the European Union, invasion of Ukraine and sanctions on Russian owned entities has seen significant price increases as well as disruptions to the supply chain and longer lead in times. The increased rate of inflation impacts costs such as energy prices, labour, packaging and transport. These all have an effect on the overall contract price and make it extremely challenging to manage expenditure and the availability of supply. As a result of this it should be noted that there are likely to be other significant financial impacts which are not quantifiable at this stage, as follows: Rothesay Pavilion – project currently paused due to increased costs as a result of the main contractor being placed into administration in March 2020. Page 67
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4.0 CURRENT YEAR TO DATE FINANCIAL POSITION 4.1 4.2 Overall Position Actual net expenditure to date is £3,777k compared to a budget for the year to date of £3,765k giving rise to an overspend for the year to date of £12k (0.3%). 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 969 1,016 (47) Service Development 619 584 35 Strategic Change 2,177 2,177 0 Total 3,765 3,777 (12) Service: ICT 545 545 0 Education 1,093 1,055 38 Live Argyll 21 68 (47) Health & Social Care Partnership 0 0 0 Shared Offices 11 11 0 Roads & Infrastructure 139 141 (2) Development & Economic Growth 258 259 (1) CHORD 1,698 1,698 0 Total 3,765 3,777 (12) Material variances are explained in Appendix 1 and there are a number of small variances contributing to the year to date overspend. Harbour Investment Programme – likely to be contractual cost increases in future years (expected to be funded from increased fees and charges). Helensburgh Waterfront Development – commercial negotiations are ongoing with the main contractor to determine financial impact. Universal Free School Meals – delayed roll out to P6 and P7 and uncertain capital funding levels available from Scottish Government (delay not mentioned as part of Resource Spending Review). Other general construction inflationary increases. 3.0 RECOMMENDATIONS 3.1 Note the contents of this report and the financial summaries as detailed in Appendix 7 and approve the proposed changes to the capital plan detailed in Appendix 4. Page 68
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5.0 FORECAST OUTTURN 2022-23 5.1 Overall Position Forecast net expenditure for the full financial year is 29,319k compared to an annual budget of £48,555k giving rise to a forecast overspend for the year of £19,236k (39.6%). This is largely due to £19,370k of re-profiling budgets at the start of the financial year and does not reflect genuine underspends within the programme. 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 COVID- 19 Related £'000 Forecast Variance Non COVID- 19 Related £'000 Forecast Variance £'000 Asset Sustainability 26,627 26,685 0 (58) (58) Service Development 4,500 4,560 0 (60) (60) Strategic Change 17,428 (1,926) 0 19,354 19,354 Total 48,555 29,319 0 19,236 19,236 Service: ICT 1,518 1,518 0 0 0 Education 6,097 6,109 0 (12) (12) Live Argyll 1,235 1,304 0 (69) (69) Health & Social Care Partnership 2,107 2,109 0 (2) (2) Shared Offices 4,197 4,213 0 (16) (16) Roads & Infrastructure 26,712 7,376 0 19,336 19,336 Development & Economic Growth 2,770 2,771 0 (1) (1) CHORD 3,919 3,919 0 0 0 Total 48,555 29,319 0 19,236 19,236 Material variances are explained in Appendix 2 and there are a number of smaller variances contributing to the forecast overspend. Page 69
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6.0 TOTAL PROJECT COSTS 6.1 Overall Position Forecast total net project costs on the total capital plan are £177,521k compared to a total budget for all projects of £177,387k giving rise to a forecast overspend for the overall capital plan of £134k (0.08%). 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 Capital Plan Variance COVID-19 Related £'000 Capital Plan Variance Non COVID- 19 Related £'000 Total Capital Plan Variance £'000 Asset Sustainability 50,444 50,502 0 (58) (58) Service Development 18,838 18,898 0 (60) (60) Strategic Change 108,105 108,121 0 (16) (16) Total 177,387 177,521 0 (134) (134) Service: ICT 5,007 5,007 0 0 0 Education 41,833 41,845 0 (12) (12) Live Argyll 3,368 3,437 0 (69) (69) Health & Social Care Partnership 4,222 4,224 0 (2) (2) Shared Offices 21,507 21,523 0 (16) (16) Roads & Infrastructure 52,878 52,912 0 (34) (34) Development & Economic Growth 4,734 4,735 0 (1) (1) CHORD 43,838 43,838 0 0 0 Total 177,387 177,521 0 (134) (134) Material variances are explained in Appendix 3 and there are a number of smaller variances leading to the forecast overspend. Page 70
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7.0 TOTAL PROJECT PERFORMANCE 7.1 Overall Position There are 159 projects within the Capital Plan, 145 are Complete or On Target, 14 are Off Target and Recoverable and none 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 COVID -19 Related Non- COVID -19 Related COVID -19 Related Non- COVID -19 Related Asset Sustainability 85 0 6 0 0 91 Service Development 36 0 5 0 0 41 Strategic Change 24 0 3 0 0 27 Total 145 0 14 0 0 159 Service: ICT 7 0 0 0 0 7 Education 29 0 1 0 0 30 Live Argyll 22 0 6 0 0 28 Health & Social Care Partnership 16 0 1 0 0 17 Shared Offices 21 0 0 0 0 21 Roads & Infrastructure 30 0 5 0 0 35 Development & Economic Growth 16 0 0 0 0 16 CHORD 4 0 1 0 0 5 Total 145 0 14 0 0 159 Page 71
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7.3 Chart of Performance Status The graph provides a view of the Performance Status of the Projects included in the Capital Plan: Page 72
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8.0 OFF TRACK PROJECTS 8.1 9.0 9.1 10.0 There are no Off Track projects currently being reported. STRATEGIC CHANGE PROJECTS Appendix 6 gives detailed information in respect of the Strategic Change Projects within the Capital Plan. The appendix gives details of the forecast cost of the 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. 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 capital plan incorporating these proposed changes can be found in Appendix 8. Department Prev. Agreed Changes 2022-23 £'000 22-23 £'000 COVID- 19 Related 22-23 £'000 Non COVID- 19 Related 23-24 £'000 24-25 £'000 Future Years £'000 Total £'000 Asset Sustainability 0 0 0 0 0 0 0 Service Development 0 0 0 0 0 0 0 Strategic Change 0 0 (19,370) 6,140 4,731 15,389 6,890 Total 0 0 (19,370) 6,140 4,731 15,389 6,890 Service: ICT 0 0 0 0 0 0 0 Education 0 0 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 0 Health & Social Care Partnership 0 0 0 0 0 0 0 Shared Offices 0 0 0 0 0 0 0 Roads & Infrastructure 0 0 (19,370) 6,140 4,731 15,389 6,890 Development & Economic Growth 0 0 0 0 0 0 0 Major Projects 0 0 0 0 0 0 0 Total 0 0 (19,370) 6,140 4,731 15,389 6,890 Page 73
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11.0 FUNDING 11.1 11.2 12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 The Capital Programme is funded by various income streams as detailed in Appendix 5. Additional funding allocated since the last report has come from SPT, Crown Estate, Scottish Government, income from Lismore Ferry sale and HITRANS. The Council is projecting £1,387k of capital receipts this financial year. At this early stage in the year no receipts have been received but this will be closely monitored throughout the year and any issues highlighted. IMPLICATIONS Policy – Monitors progress against the capital plan. Financial – Monitors funding and commitments of the capital plan. Legal – Available funding may not address all Statutory and Regulatory requirements in relation to Health and Safety. HR – Available funding may have an impact on the sustainability of the Property Design Team and Infrastructure Design Team. Fairer Scotland Duty – None. 12.5.1 Equalities – protected characteristics – None. 12.5.2 Socio-economic Duty – None. 12.5.3 Islands – None. Climate Change – The Council is committed to addressing climate change via projects within the capital plan. Risk – There are risks around increasing capital contract costs and the level and timing of capital receipts. Customer Service – None. Kirsty Flanagan Executive Director / Section 95 Officer 8 July 2022 Policy Lead for Finance and Commercial Services – Councillor Gary Mulvaney For further information contact: Anne Blue, Head of Financial Services 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 - Cumulative spend, completion dates and risks relating to significant capital projects. - Appendix 7 - Financial Summary – Overall - Financial Summary – Executive Director Kirsty Flanagan - Financial Summary – Executive Director Douglas Hendry - Appendix 8 - Updated/Revised Capital Plan Page 74
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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 No variances +/-£50k for this report. Other variances under £50k (12) Total value of non-material variances less than +/-£50k Total (12) Page 75
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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 (Over)/ Under Forecast Variance COVID-19 Related £’000 (Over)/ Under Forecast Variance Non COVID- 19 Related £’000 Total (Over)/ Under Forecast Variance £’000 Explanation Campbeltown Flood Scheme 10,354 9,098 0 1,256 1,256 Slippage in line with contractor cashflow Harbour Investment Programme 33,664 15,550 0 18,114 18,114 Slippage in line with Asset Management Plan Other variances under £50k 0 (134) (134) Total value of non-material variances less than +/- £50k. Total 0 19,236 19,236 Page 76
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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 (Over)/ Under Forecast Variance COVID-19 Related £’000 (Over)/ Under Forecast Variance Non COVID- 19 Related £’000 Total (Over)/ Under Forecast Variance £’000 Explanation No variances +/-£50k for this report. Other variances under £50k (134) (134) 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 (134) (134) Page 77
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APPENDIX 4 – Changes to Capital Plan and Financial Impact OVERALL COST CHANGES Project 2022- 23 £’000 2023- 24 £’000 2024- 25 £’000 Future Years £’000 Total Capital Plan £’000 Recommendation Explanation No overall cost changes this reporting period. Total Cost Changes 0 0 0 0 0 SLIPPAGES AND ACCELERATIONS Project 2022-23 £’000 2023- 24 £’000 2024- 25 £’000 Future Years £’000 2022-23 Slippage Related to COVID- 19 £’000 2022-23 Slippage Related to Non COVID-19 £’000 Total 2022-23 £’000 Recommendation Explanation Campbeltown Flood Scheme (1,256) (75) 1,331 0 0 (1,256) (1,256) Slip budget into future years. Budget profile in line with anticipated spend. Harbour Investment Programme (18,114) 6,215 3,400 15,389 0 (18,114) (18,114) Slip budget into future years Budget profile in line with anticipated spend based on Asset Management Plan. Total Slippages and Accelerations (19,370) 6,140 4,731 15,389 0 (19,370) (19,370) Net Impact of Changes (19,370) 6,140 4,731 15,389 0 (19,370) (19,370) Page 78
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CAPITAL PROGRAMME FUNDING Appendix 5 Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available Estimated Capital Funding Carry Forwards from 21-22 Slippage / Acceleration Additional Funding Updated Capital Funding Available General Capital Grant 9,569 0 0 0 9,569 9,569 0 0 0 9,569 9,569 0 0 0 9,569 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 1,387 0 0 0 1,387 1,095 0 0 0 1,095 0 0 0 0 0 Flooding Allocation 155 0 0 0 155 155 0 0 0 155 155 0 0 0 155 Ring Fenced Capital Grant 4,656 2,722 0 268 7,646 0 5,728 0 0 5,728 0 0 0 0 0 Restricted Funding 1,486 609 0 756 2,851 1,150 0 0 0 1,150 0 0 0 0 0 Funded by Reserves 3,145 4,388 -1,256 7 6,284 36 172 -75 0 133 0 0 1,331 0 1,331 Additional Funding from Revenue 0 0 0 0 0 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 31,180 2,484 -18,114 0 15,550 16,900 0 6,125 0 23,025 31,600 0 -3,400 0 28,200 Prudential Borrowing 15,528 3,352 100 0 18,980 5,006 -1,429 -100 0 3,477 27 0 0 0 27 Loans Fund Review 0 4,025 0 0 4,025 0 0 0 0 0 0 0 0 0 0 COVID Funding 1,640 2,167 0 0 3,807 0 0 0 0 0 0 0 0 0 0 67,713 19,747 -19,270 1,031 69,221 32,878 4,471 5,950 0 43,299 40,318 0 -2,069 0 38,249 BREAKDOWN OF ADDITIONAL FUNDING Additional Funding 2022-23 2023-24 Reported C'town Museum LA income 40 Live Argyll Jun-22 H&L/Rosneath Cycleways 140 Jun-22 Nature Restoration Fund 238 Jun-22 Rothesay Pontoons 315 Grant Funding Jun-22 Ardrishaig North 280 Grant Funding Jun-22 Lismore Ferry 7 External Income Jun-22 Lochgilphead PS Demolition 11 Reserves Jun-22 Total 1,031 0 2024-252023-24 Source 2022-23 SPT Scottish Government Page 79
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Strategic Change Projects - Cumulative Spend, Start/Finish Dates and Project Risks APPENDIX 6 Strategic Change Projects Prior Years Spend £'000 Current Year Forecast £'000 Total Project Forecast £'000 Total Project Budget £'000 Project Start Date Original Estimated Completion Date Project Risks Identified Explanation CHORD Oban 7,129 651 7,905 7,905 27/10/2016 31/03/2022 Amber Issues with contract close out impacting on timescales. Harbour Investment Programme 1,802 15,550 91,292 91,292 01/04/2017 31/03/2028 Amber Project expenditure profile updated to reflect Asset Management Plan. Campbeltown Flood Scheme 181 9,098 15,215 15,215 01/08/2016 31/03/2023 Amber Work expected to start over summer months. Dunoon Primary 7,170 304 10,869 10,869 18/12/2014 30/04/2020 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Kirn Primary School 9,878 99 10,119 10,119 24/04/2014 31/10/2017 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Replacement of Oban High 2,496 136 3,250 3,250 24/04/2014 31/01/2019 Green Physically complete - negotiations with contractor delaying payment of final sums outstanding. Street Lighting LED Replacement 2,700 791 3,900 3,900 01/08/2016 30/03/2022 Green Tender for final package of works still to be awarded - budget to be reprofiled. Helensburgh Office Rationalisation 11,500 310 11,838 11,838 25/04/2013 31/03/2022 Green Project subject to legal dispute. CHORD Dunoon 12,238 55 12,522 12,522 03/02/2012 09/03/2018 Green Main contract complete and retentions paid. Landscaping and remediation works ongoing but issues with water ingress may require works in 22-23. Helensburgh Waterfront Development 1,387 2,895 22,557 22,557 01/04/2017 31/03/2024 Green Additional funding awarded resulting in increased budget. Budget to be reprofiled. Kilmory Business Park Phase 2AA 0 141 150 150 01/02/2022 01/09/2023 Green Development Agreement still to be concluded. Carbon Management Business Cases 201 60 261 261 01/02/2014 31/03/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management - Group Heating Conversion Project 1,938 10 1,948 1,948 01/02/2016 31/03/2022 Green Complete. Carbon Management - Non Education 14 21 50 50 01/04/2015 31/03/2022 Green Projects being determined. NPDO Schools Solar PV Panel Installations 761 183 944 944 26/06/2014 31/03/2022 Green Budget to be reprofiled pending development of new projects. Non NPDO Schools Solar PV Panel Installations 400 88 488 488 20/03/2014 31/03/2022 Green Budget to be reprofiled pending development of new projects. Carbon Management Capital Property Works 2016/17 19 20 39 39 01/02/2016 31/03/2022 Green Budget to be reprofiled pending development of new projects. Oil to Gas Heating Conversions 182 5 187 187 01/02/2012 31/03/2022 Green Budget to be reprofiled pending development of new projects. TIF - Halfway House Roundabout 0 597 640 640 tbc tbc Green Scope of project still to be determined - budget to be reprofiled. Dunoon Pier OBC 2,844 0 2,844 2,844 03/02/2012 26/02/2016 Green Project complete. Campbeltown Office Rationalisation 595 1 596 596 01/02/2015 31/03/2019 Green Complete. TIF - Oban Airport Business Park 447 101 590 590 22/01/2015 31/03/2022 Green Campbeltown Schools Redevelopment 1,649 76 2,130 2,130 16/02/2012 30/11/2018 Green Physically complete - negotiations with contractor delaying payment of financial sums outstanding. CHORD - Helensburgh 6,483 28 6,557 6,557 29/09/2011 30/04/2015 Green Main contract complete. Art project originally proposed for 21-22 now slipped into 22-23. TIF - North Pier Extension 214 0 214 214 06/12/2017 06/12/2021 Green Complete. TIF - Lorn/Kirk Road 1,959 1 2,170 2,170 22/01/2015 31/03/2021 Green Complete. Carbon Management Fuel Conversions 107 0 107 107 01/02/2014 31/03/2019 Green Complete. Kilmory Biomass Carbon Management 956 0 956 956 20/09/2012 31/03/2019 Green Complete. Strategic Change Total 75,250 31,221 210,338 210,338 Project Risk Classifications: Green - Risks can be managed and are viewed as stable or reducing. Amber - Risks are increasing but are still manageable. Red - Risks are increasing or have increased to such an extent they may affect delivery of the project. Capital Expenditure Dates Risks Page 80
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ARGYLL AND BUTE COUNCIL - CAPITAL PLAN MONITORING REPORT - OVERALL COUNCIL FINANCIAL SUMMARY - NET EXPENDITURE Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Forecast (Over)/Under Variance Budget Forecast (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Executive Director Douglas Hendry 415 462 (47) 10,030 10,088 (58) 19,032 19,090 (58) Executive Director Kirsty Flanagan 554 554 0 18,029 18,029 0 32,844 32,844 0 Asset Sustainability Total 969 1,016 (47) 28,059 28,117 (58) 51,876 51,934 (58) Service Development Projects Executive Director Douglas Hendry 254 254 0 1,242 1,267 (25) 15,144 15,169 (25) Executive Director Kirsty Flanagan 415 437 (22) 7,304 7,339 (35) 32,600 32,635 (35) Service Development Total 669 691 (22) 8,546 8,606 (60) 47,744 47,804 (60) Strategic Change Projects Campbeltown Schools Redevelopment 38 38 0 76 76 0 2,130 2,130 0 Dunoon Primary 257 257 0 304 304 0 10,869 10,869 0 Replacement of Oban High 96 96 0 136 136 0 3,250 3,250 0 Kirn Primary School 65 65 0 99 99 0 10,119 10,119 0 Carbon Management - Non Education 0 0 0 21 21 0 50 50 0 Carbon Management Business Cases 0 0 0 60 60 0 261 261 0 NPDO Schools Solar PV Panel Installations 0 0 0 183 183 0 944 944 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 88 88 0 488 488 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 20 20 0 39 39 0 Carbon Management - Group Heating Conversion Project 0 0 0 10 10 0 1,948 1,948 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 5 5 0 187 187 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 310 310 0 11,838 11,838 0 Clean Energy 0 0 0 551 567 (16) 729 745 (16) Clean Energy 2022-23 0 0 0 500 500 0 500 500 0 Campbeltown Flood Scheme 23 23 0 10,354 9,098 1,256 15,215 15,215 0 Street Lighting LED Replacement 0 0 0 791 791 0 3,900 3,900 0 Harbour Investment Programme 138 138 0 33,664 15,550 18,114 91,292 91,292 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - North Pier Extension 0 0 0 0 0 0 214 214 0 TIF - Oban Airport Business Park 0 0 0 101 101 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 597 597 0 640 640 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 2 2 0 55 55 0 12,522 12,522 0 CHORD Oban 0 0 0 651 651 0 7,905 7,905 0 Helensburgh Waterfront Development 1,696 1,696 0 2,895 2,895 0 22,557 22,557 0 HWD - FFE (Funded by LA) 0 0 0 344 344 0 350 350 0 Kilmory Business Park Phase 2AA 0 0 0 141 141 0 150 150 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 2,315 2,315 0 51,986 32,632 19,354 211,917 211,933 (16) Total Expenditure 3,953 4,022 (69) 88,591 69,355 19,236 311,537 311,671 (134) INCOME Asset Sustainability Executive Director Douglas Hendry 0 0 0 0 0 0 0 0 0 Executive Director Kirsty Flanagan 0 0 0 (1,432) (1,432) 0 (1,432) (1,432) 0 Asset Sustainability Total 0 0 0 (1,432) (1,432) 0 (1,432) (1,432) 0 Service Development Projects Executive Director Douglas Hendry 0 (38) 38 0 0 0 (7,771) (7,771) 0 Executive Director Kirsty Flanagan (61) (69) 8 (4,046) (4,046) 0 (21,135) (21,135) 0 Service Development Total (61) (107) 46 (4,046) (4,046) 0 (28,906) (28,906) 0 Strategic Change Projects Helensburgh Office Rationalisation 0 0 0 0 0 0 (349) (349) 0 Dunoon Primary 0 0 0 0 0 0 (137) (137) 0 Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (138) (138) 0 (33,664) (33,664) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (699) (699) 0 (2,717) (2,717) 0 H'burgh CHORD Public Realm Imprv 0 0 0 0 0 0 (570) (570) 0 Helensburgh Waterfront Development 0 0 0 (195) (195) 0 (6,493) (6,493) 0 HWD - FFE (Funded by LA) 0 0 0 0 0 0 (350) (350) 0 CHORD - Dunoon Waterfront 0 0 0 0 0 0 (10) (10) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Strategic Change Total (138) (138) 0 (34,558) (34,558) 0 (103,812) (103,812) 0 Total Income (199) (245) 46 (40,036) (40,036) 0 (134,150) (134,150) 0 Net Total 3,754 3,777 (23) 48,555 29,319 19,236 177,387 177,521 (134) Appendix 7 Full Year This Financial Year Total Project Costs 30 June 2022 Page 81
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MONITORING REPORT Current Financial Year To Date Budget Actual (Over)/Under Variance Budget Year End Forecast (Over)/Under Variance Budget Forecast (Over)/Under Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Projects Flood Prevention 2 2 0 474 474 0 1,084 1,084 0 Coastal Protection 0 0 0 20 20 0 200 200 0 Coastal Change Adaptation 0 0 0 159 159 0 159 159 0 Bute Sea Wall Repairs 0 0 0 750 750 0 750 750 0 Helensburgh Flood Mitigation 0 0 0 432 432 0 432 432 0 Bridge Strengthening 29 29 0 1,349 1,349 0 2,049 2,049 0 Local Bridge Maintenance Fund 2 2 0 1,237 1,237 0 5,447 5,447 0 Roads Reconstruction 0 0 0 8,475 8,475 0 15,336 15,336 0 Roads Reconstruction - Helensburgh CHORD 0 0 0 47 47 0 47 47 0 Roads Reconstruction - Oban CHORD 0 0 0 3 3 0 3 3 0 Helensburgh CHORD - Signage etc 0 0 0 10 10 0 10 10 0 Lighting 0 0 0 740 740 0 1,040 1,040 0 Environmental Projects 0 0 0 734 734 0 934 934 0 Play Park Refurbishment 0 0 0 155 155 0 155 155 0 Public Convenience Upgrades 0 0 0 82 82 0 82 82 0 Footway Improvements 0 0 0 269 269 0 269 269 0 Glengorm - Capping 0 0 0 82 82 0 82 82 0 Glengorm - Cell and Transfer Station (PB) 18 18 0 560 560 0 560 560 0 EV Quick Chargers 0 0 0 93 93 0 93 93 0 Tobermory Car Park 52 52 0 951 951 0 951 951 0 Active Travel 0 0 0 500 500 0 500 500 0 Bin Replacement Programme 0 0 0 100 100 0 100 100 0 Server Sustainability 4 4 0 187 187 0 251 251 0 PC Replacement 445 445 0 522 522 0 522 522 0 Telecomms Network 2 2 0 98 98 0 98 98 0 Block Allocation - ICT 0 0 0 0 0 0 1,690 1,690 0 Asset Sustainability Total 554 554 0 18,029 18,029 0 32,844 32,844 0 Service Development Projects Preliminary design for Regional Transport projects 0 0 0 16 16 0 221 221 0 Campbeltown Old Quay 0 0 0 43 43 0 1,424 1,424 0 Fleet Management - Prudential Borrowing 0 0 0 2,187 2,187 0 4,861 4,861 0 Fleet Management 0 0 0 0 0 0 2,859 2,859 0 Lismore Ferry 13 19 (6) 13 19 (6) 666 672 (6) Millpark Depot Demolition 0 0 0 0 0 0 126 126 0 Oban Depot Development Project 0 15 (15) 0 15 (15) 2,100 2,115 (15) Lochgilphead Depot Rationalisation 0 0 0 (10) 0 (10) 19 29 (10) Jackson's Quarry Refurbishment 0 0 0 (2) 0 (2) 283 285 (2) Witchburn Road Demolition 0 0 0 (1) 0 (1) 157 158 (1) Safe Streets, Walking and Cycling (CWSS) 0 0 0 544 544 0 2,878 2,878 0 SPT - bus infrastructure 0 0 0 0 0 0 1,405 1,405 0 Cycleways - H&L (FSPT) 0 0 0 240 240 0 3,112 3,112 0 Helensburgh Public Realm - Arts Strategy Fund 0 0 0 51 51 0 53 53 0 Town Centre Funds 286 287 (1) 1,054 1,055 (1) 3,876 3,877 (1) Dunoon Cycle Bothy 7 7 0 266 266 0 279 279 0 Dunoon STEM Hub 10 10 0 603 603 0 608 608 0 Ardrishaig North Active Travel 0 0 0 880 880 0 880 880 0 Nature Restoration Fund 0 0 0 346 346 0 346 346 0 Gibraltar Street Public Realm Improvements 5 5 0 248 248 0 250 250 0 Hermitage Park 0 0 0 69 69 0 3,314 3,314 0 Applications Projects 94 94 0 757 757 0 2,883 2,883 0 Service Development Total 415 437 (22) 7,304 7,339 (35) 32,600 32,635 (35) Strategic Change Projects Campbeltown Flood Scheme 23 23 0 10,354 9,098 1,256 15,215 15,215 0 Street Lighting LED Replacement 0 0 0 791 791 0 3,900 3,900 0 Harbour Investment Programme 138 138 0 33,664 15,550 18,114 91,292 91,292 0 TIF - Lorn/Kirk Road 0 0 0 1 1 0 2,170 2,170 0 TIF - North Pier Extension 0 0 0 0 0 0 214 214 0 TIF - Oban Airport Business Park 0 0 0 101 101 0 590 590 0 TIF - Halfway House Roundabout 0 0 0 597 597 0 640 640 0 Strategic Change Total 161 161 0 45,508 26,138 19,370 114,021 114,021 0 Total Expenditure 1,130 1,152 (22) 70,841 51,506 19,335 179,465 179,500 (35) INCOME Asset Sustainability EV Quick Chargers 0 0 0 (97) (97) 0 (97) (97) 0 Glengorm Capping/New Cell - Prudential Borrowing 0 0 0 (560) (560) 0 (560) (560) 0 Tobermory Car Park 0 0 0 (775) (775) 0 (775) (775) 0 Asset Sustainability Total 0 0 0 (1,432) (1,432) 0 (1,432) (1,432) 0 Service Development Projects Applications Projects 0 0 0 (46) (46) 0 (437) (437) 0 Safe Streets, Walking and Cycling 0 0 0 (550) (550) 0 (2,483) (2,483) 0 SPfT 0 0 0 0 0 0 (1,243) (1,243) 0 Cycleways - H&L (FSPT) 0 0 0 (240) (240) 0 (3,212) (3,212) 0 Town Centre Funds 0 0 0 (382) (382) 0 (1,794) (1,794) 0 Dunoon STEM Hub 0 0 0 (100) (100) 0 (608) (608) 0 Ardrishaig North Active Travel (50) (50) 0 (50) (50) 0 (50) (50) 0 Dunoon Cycle Bothy 0 0 0 (209) (209) 0 (279) (279) 0 Gibraltar Street Public Realm Improvements 0 0 0 0 0 0 (250) (250) 0 Hermitage Park 0 0 0 0 0 0 (3,245) (3,245) 0 Fleet Management - PB 0 0 0 (2,187) (2,187) 0 (4,861) (4,861) 0 Fleet Management 0 (8) 8 0 0 0 0 0 0 Lochgilphead Depot Rationalisation 0 0 0 (1) (1) 0 (1) (1) 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 - Appin Depot Sale 0 0 0 (150) (150) 0 (150) (150) 0 Lismore Ferry (11) (11) 0 (131) (131) 0 (631) (631) 0 Witchburn Road Demolition 0 0 0 0 0 0 (157) (157) 0 Service Development Total (61) (69) 8 (4,046) (4,046) 0 (21,135) (21,135) 0 Strategic Change Projects Campbeltown Flood 0 0 0 0 0 0 (270) (270) 0 Harbour PB (138) (138) 0 (33,664) (33,664) 0 (91,292) (91,292) 0 01 TIF - Lorn/Kirk Road 0 0 0 (699) (699) 0 (2,717) (2,717) 0 Strategic Change Total (138) (138) 0 (34,363) (34,363) 0 (94,279) (94,279) 0 Total Income (199) (207) 8 (39,841) (39,841) 0 (116,846) (116,846) 0 Net Departmental Total 931 945 (14) 31,000 11,665 19,335 62,619 62,654 (35) 30 June 2022 Full Year This Financial Year Total Project Costs FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR KIRSTY FLANAGAN Appendix 7 Page 82
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MONITORING REPORT Budget Actual Variance Budget Forecast Variance Budget Forecast Variance £000s £000s £000s £000s £000s £000s £000s £000s £000s EXPENDITURE Asset Sustainability Education 383 383 0 4,281 4,281 0 10,761 10,761 0 Live Argyll 21 68 (47) 1,227 1,283 (56) 2,086 2,142 (56) Health and Social Care Partnership 0 0 0 2,053 2,055 (2) 2,922 2,924 (2) Shared Offices 11 11 0 2,469 2,469 0 3,263 3,263 0 Asset Sustainability Total 415 462 (47) 10,030 10,088 (58) 19,032 19,090 (58) Service Development Projects Ardrishaig Primary Pre 5 Unit 0 0 0 0 0 0 2 2 0 Bowmore Primary School - Pre 5 Unit 0 0 0 0 0 0 149 149 0 Clyde Cottage - 600 hour provision 0 0 0 23 23 0 579 579 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 (12) 0 (12) 707 719 (12) Lochgoilhead Primary School - Pre 5 Unit 0 0 0 0 0 0 391 391 0 Park Primary Extension/Pre Fives Unit 0 0 0 0 0 0 341 341 0 Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 491 491 0 Bunessan Primary School - Gaelic Medium Improvements 0 0 0 0 0 0 120 120 0 Early Learning and Childcare 0 0 0 0 0 0 850 850 0 Early Learning and Childcare - 1140 Hours 254 254 0 1,036 1,036 0 7,751 7,751 0 CO2 Monitoring - Covid Mitigation in Schools 0 0 0 116 116 0 192 192 0 Early Learning and Childcare - 1140 Hours - CFCR 0 0 0 0 0 0 111 111 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 38 38 0 38 38 0 Riverside Leisure Centre Refurbishment 0 0 0 (13) 0 (13) 1,232 1,245 (13) Dunclutha Childrens Home 0 0 0 54 54 0 1,300 1,300 0 Service Development Total 254 254 0 1,242 1,267 (25) 15,144 15,169 (25) Strategic Change Projects Campbeltown Schools Redevelopment 38 38 0 76 76 0 2,130 2,130 0 Dunoon Primary 257 257 0 304 304 0 10,869 10,869 0 Replacement of Oban High 96 96 0 136 136 0 3,250 3,250 0 Kirn Primary School 65 65 0 99 99 0 10,119 10,119 0 Carbon Management - Non Education 0 0 0 21 21 0 50 50 0 Carbon Management Business Cases 0 0 0 60 60 0 261 261 0 NPDO Schools Solar PV Panel Installations 0 0 0 183 183 0 944 944 0 Non NPDO Schools Solar PV Panel Installations 0 0 0 88 88 0 488 488 0 Carbon Management Fuel Conversions 0 0 0 0 0 0 107 107 0 Carbon Management Capital Property Works 2016/17 0 0 0 20 20 0 39 39 0 Carbon Management - Group Heating Conversion Project 0 0 0 10 10 0 1,948 1,948 0 Kilmory Biomass Carbon Management 0 0 0 0 0 0 956 956 0 Oil to Gas Heating Conversions 0 0 0 5 5 0 187 187 0 Campbeltown Office Rationalisation 0 0 0 1 1 0 596 596 0 Helensburgh Office Rationalisation 0 0 0 310 310 0 11,838 11,838 0 Clean Energy 0 0 0 551 567 (16) 729 745 (16) Clean Energy 2022-23 0 0 0 500 500 0 500 500 0 CHORD Oban 0 0 0 651 651 0 7,905 7,905 0 CHORD - Helensburgh 0 0 0 28 28 0 6,557 6,557 0 CHORD Dunoon 2 2 0 55 55 0 12,522 12,522 0 Helensburgh Waterfront Deveopment 1,696 1,696 0 2,895 2,895 0 22,557 22,557 0 HWD - FFE (Funded by LA) 0 0 0 344 344 0 350 350 0 Kilmory Business Park Phase 2AA 0 0 0 141 141 0 150 150 0 Dunoon Pier OBC 0 0 0 0 0 0 2,844 2,844 0 Strategic Change Total 2,154 2,154 0 6,478 6,494 (16) 97,896 97,912 (16) Total Expenditure 2,823 2,870 (47) 17,750 17,849 (99) 132,072 132,171 (99) INCOME Asset Sustainability Education 0 0 0 0 0 0 0 0 0 Live Argyll 0 0 0 0 0 0 0 0 0 Asset Sustainability Total 0 0 0 0 0 0 0 0 0 Service Development Projects Sandbank Gaelic Pre Five Unit 0 0 0 0 0 0 (485) (485) 0 Bunessan Primary School - Gaelic Medium Improvements 0 0 0 0 0 0 (30) (30) 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 CO2 Monitoring - Covid Mitigation in Schools 0 (38) 38 0 0 0 0 0 0 Bowmore Primary School - Gaelic Medium Grant 0 0 0 0 0 0 (38) (38) 0 Service Development Total 0 (38) 38 0 0 0 (7,771) (7,771) 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 (195) (195) 0 (6,493) (6,493) 0 HWD - FFE (Funded by LA) 0 0 0 0 0 0 (350) (350) 0 CHORD - Dunoon Waterfront 0 0 0 0 0 0 (10) (10) 0 CHORD - Oban 0 0 0 0 0 0 (1,624) (1,624) 0 Strategic Change Total 0 0 0 (195) (195) 0 (9,533) (9,533) 0 Total Income 0 (38) 38 (195) (195) 0 (17,304) (17,304) 0 Net Departmental Total 2,823 2,832 (9) 17,555 17,654 (99) 114,768 114,867 (99) 30 June 2022 Total Project CostsFull Year This Financial YearCurrent Financial Year To Date Appendix 7 FINANCIAL SUMMARY NET EXPENDITURE - EXECUTIVE DIRECTOR DOUGLAS HENDRY Page 83
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CAPITAL PLAN 2022-23 APPENDIX 8 Overall Summary Service Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Education 36,575 6,097 4,843 2,226 0 0 49,741 Shared Offices 16,687 4,197 544 428 0 0 21,856 ICT 2,126 1,564 983 771 0 0 5,444 RIS 21,128 44,907 35,682 40,768 17,811 0 160,296 DEG 15,435 5,000 180 0 0 0 20,615 HSCP 1,246 2,107 441 428 0 0 4,222 Live Argyll 1,274 1,235 431 428 0 0 3,368 CHORD 48,486 4,114 285 0 0 0 52,885 Overall Total 142,957 69,221 43,389 45,049 17,811 0 318,427 Page 84
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CAPITAL PLAN 2022-23 APPENDIX 8 Education Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Education Asbestos Control/Removal Works 0 7 0 0 0 0 7 Block Allocation - Education 0 3,216 4,231 2,226 0 0 9,673 Digital Inclusion 20-21 0 9 0 0 0 0 9 Free School Meals 0 14 0 0 0 0 14 Homeless Houses - Housing Quality Standard 0 1 0 0 0 0 1 Internal Refurbishment Budget 0 7 0 0 0 0 7 Lochgilphead Primary School Demolition 0 7 0 0 0 0 7 Pre-5's/Nurseries 0 1 0 0 0 0 1 Primary Schools 0 530 23 0 0 0 553 School Houses - Housing Quality Standard 0 26 0 0 0 0 26 Secondary Schools 0 463 0 0 0 0 463 Asset Sustainability Total 0 4,281 4,254 2,226 0 0 10,761 Service Development Education Ardrishaig Primar School - Pre Five Extension 2 0 0 0 0 0 2 Bowmore Primary School - Gaelic Medium Grant 0 38 0 0 0 0 38 Bowmore Primary School - Pre Five Unit 149 0 0 0 0 0 149 Bunessan Primary School - Gaelic Medium Improvements 120 0 0 0 0 0 120 Clyde Cottage - 600 hours provision 556 23 0 0 0 0 579 CO2 Monitoring - Covid Mitigation in Schools 76 116 0 0 0 0 192 Craignish Primary School - Pre Five Extension (600 hours funding) 400 0 0 0 0 0 400 Early Learning and Childcare 850 0 0 0 0 0 850 Early Learning and Childcare - 1140 Hours 6,696 1,036 19 0 0 0 7,751 Early Learning and Childcare - 1140 Hours - CFCR 111 0 0 0 0 0 111 Iona Primary School - Pre Five Unit (600 hours funding) 490 0 0 0 0 0 490 Islay High & Rosneath PS Pitches 719 -12 0 0 0 0 707 Lochgoilhead Primary School - Pre Five Unit (600 hours funding) 391 0 0 0 0 0 391 Park Primary Extension and Pre Fives Unit 341 0 0 0 0 0 341 Sandbank Gaelic Pre Five Unit 491 0 0 0 0 0 491 Service Development Total 11,392 1,201 19 0 0 0 12,612 Strategic Change Education Campbeltown Schools Redevelopment 2,054 76 0 0 0 0 2,130 Dunoon Primary School 10,365 304 200 0 0 0 10,869 Kirn Primary School 10,020 99 0 0 0 0 10,119 Replacement of Oban High School 2,744 136 370 0 0 0 3,250 Strategic Change Total 25,183 615 570 0 0 0 26,368 Overall Total 36,575 6,097 4,843 2,226 0 0 49,741 Page 85
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CAPITAL PLAN 2022-23 APPENDIX 8 Shared Office Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Shared Offices Argyll House, Dunoon 0 12 0 0 0 0 12 Asbestos Capital Property Works 0 51 0 0 0 0 51 Block Allocation 0 0 236 398 0 0 634 Bowmore Area Office 0 76 0 0 0 0 76 Burnett Building 0 110 0 0 0 0 110 Capital Property Works 0 38 0 0 0 0 38 Fire Risk Assessment Works 0 14 0 0 0 0 14 Hill Street Dunoon Rewire 0 33 0 0 0 0 33 Kilmory Castle 0 1,368 43 0 0 0 1,411 Legionella Control Works 0 215 0 0 0 0 215 Manse Brae District Office 0 1 0 0 0 0 1 Manse Brae Roads Office 0 2 0 0 0 0 2 Our Modern Workspace 0 549 87 30 0 0 666 Asset Sustainability Total 0 2,469 366 428 0 0 3,263 Strategic Change Shared Offices Campbeltown Office Rationalisation 595 1 0 0 0 0 596 Carbon Management - Group Heating Conversion Project (Prudential Borrowing)1,938 10 0 0 0 0 1,948 Carbon Management Business Cases (FPB) 201 60 0 0 0 0 261 Carbon Management Capital Property Works 16/17 19 20 0 0 0 0 39 Carbon Management Fuel Conversions (FPB) 107 0 0 0 0 0 107 Cleaner Energy 0 551 178 0 0 0 729 Cleaner Energy 2022-23 0 500 0 0 0 0 500 Helensburgh Office Rationalisation (FPB,REC) 11,528 310 0 0 0 0 11,838 Kilmory Biomass Project OBC (FPB,REV) 956 0 0 0 0 0 956 Non-NPDO Schools PV Panel Installations 400 88 0 0 0 0 488 NPDO Schools Solar PV Panel Installations 761 183 0 0 0 0 944 Oil to Gas Heating Conversions (FPB) 182 5 0 0 0 0 187 Strategic Change Total 16,687 1,728 178 0 0 0 18,593 Overall Total 16,687 4,197 544 428 0 0 21,856 Page 86
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CAPITAL PLAN 2022-23 APPENDIX 8 Major Projects Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Strategic Change CHORD CHORD - Dunoon 12,467 55 0 0 0 0 12,522 CHORD - Helensburgh -Public Realm Imprv 6,529 28 0 0 0 0 6,557 CHORD - Oban 7,254 651 0 0 0 0 7,905 Helensburgh Waterfront Development 19,377 2,895 285 0 0 0 22,557 HWD - FFE 6 344 0 0 0 0 350 Kilmory Business Park Phase 2AA 9 141 0 0 0 0 150 OBC for Dunoon Pier 2,844 0 0 0 0 0 2,844 Strategic Change Total 48,486 4,114 285 0 0 0 52,885 Overall Total 48,486 4,114 285 0 0 0 52,885 Page 87
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CAPITAL PLAN 2022-23 APPENDIX 8 ICT Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability ICT Block Allocation - ICT 0 0 919 771 0 0 1,690 PC Replacement 0 522 0 0 0 0 522 Server Sustainability 0 187 64 0 0 0 251 Telecomms Network 0 98 0 0 0 0 98 Asset Sustainability Total 0 807 983 771 0 0 2,561 Service Development ICT Applications Projects 2,126 757 0 0 0 0 2,883 Service Development Total 2,126 757 0 0 0 0 2,883 Overall Total 2,126 1,564 983 771 0 0 5,444 Page 88
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CAPITAL PLAN 2022-23 APPENDIX 8 Roads and Infrastructure Services Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability RIS Bin Replacement Programme 0 100 0 0 0 0 100 Bridge Strengthening 0 1,349 350 350 0 0 2,049 Bute Sea Wall Repairs 0 750 0 0 0 0 750 Coastal Change Adaptation 0 159 0 0 0 0 159 Coastal Protection 0 20 80 100 0 0 200 Environmental Projects 0 734 100 100 0 0 934 EV Quick Chargers 0 93 0 0 0 0 93 Flood Prevention 0 474 305 305 0 0 1,084 Footway Improvements 0 269 0 0 0 0 269 Glengorm - Capping 0 82 0 0 0 0 82 Glengorm - Cell and Transfer Station (PB) 0 560 0 0 0 0 560 Helensburgh CHORD - Signage etc 0 10 0 0 0 0 10 Helensburgh Flood Mitigation 0 432 0 0 0 0 432 Investment in Active Travel 0 500 0 0 0 0 500 Lighting 0 740 150 150 0 0 1,040 Local Bridge Maintenance Fund 0 1,237 4,210 0 0 0 5,447 Play Park Renewal 0 155 0 0 0 0 155 Public Convenience Upgrades 0 82 0 0 0 0 82 Roads Reconstruction 0 8,475 3,449 3,412 0 0 15,336 Roads Reconstruction - Helensburgh CHORD 0 47 0 0 0 0 47 Roads Reconstruction - Oban CHORD 0 3 0 0 0 0 3 Tobermory Car Park 0 951 0 0 0 0 951 Asset Sustainability Total 0 17,222 8,644 4,417 0 0 30,283 Service Development RIS Campbeltown Old Quay 1,381 43 0 0 0 0 1,424 Fleet Management 2,859 0 0 0 0 0 2,859 Fleet Management - Prudential Borrowing 2,674 2,187 0 0 0 0 4,861 Jackson's Quarry Refurbishment 285 -2 0 0 0 0 283 Lismore Ferry Replacement 618 13 15 20 0 0 666 Lochgilphead Depot Rationalisation 29 -10 0 0 0 0 19 Mill Park Depot Demolition 126 0 0 0 0 0 126 Oban Depot Development 2,100 0 0 0 0 0 2,100 Preliminary design for Regional Transport projects (tif) 205 16 0 0 0 0 221 Witchburn Road Demolition 158 -1 0 0 0 0 157 Service Development Total 10,435 2,246 15 20 0 0 12,716 Strategic Change RIS Campbeltown Flood Scheme 878 9,098 3,908 1,331 0 0 15,215 Harbour Investment Programme PB 6,706 15,550 23,115 35,000 17,811 0 98,182 Street Lighting LED Replacement 3,109 791 0 0 0 0 3,900 Strategic Change Total 10,693 25,439 27,023 36,331 17,811 0 117,297 Overall Total 21,128 44,907 35,682 40,768 17,811 0 160,296 Page 89
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CAPITAL PLAN 2022-23 APPENDIX 8 Development and Economic Growth Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Service Development DEG Ardrishaig North Active Travel 0 880 0 0 0 0 880 Cycleways - H&L (FSPT) 2,722 240 150 0 0 0 3,112 Dunoon Cycle Bothy 13 266 0 0 0 0 279 Dunoon STEM Hub 5 603 0 0 0 0 608 Gibraltar Street Public Realm Improvements 2 248 0 0 0 0 250 Helensburgh Public Realm - Arts Strategy Fund 2 51 0 0 0 0 53 Hermitage Park 3,245 69 0 0 0 0 3,314 Nature Restoration Fund 0 346 0 0 0 0 346 Safe Streets, Walking and Cycling (CWSS) 2,334 544 0 0 0 0 2,878 SPT - bus infrastructure 1,405 0 0 0 0 0 1,405 Town Centre Funds 2,792 1,054 30 0 0 0 3,876 Service Development Total 12,520 4,301 180 0 0 0 17,001 Strategic Change DEG 01 TIF - Lorn/Kirk Road 2,169 1 0 0 0 0 2,170 05 TIF - North Pier Extension 214 0 0 0 0 0 214 09 TIF - Oban Airport Business Park 489 101 0 0 0 0 590 TIF - Halfway House Roundabout 43 597 0 0 0 0 640 Strategic Change Total 2,915 699 0 0 0 0 3,614 Overall Total 15,435 5,000 180 0 0 0 20,615 Page 90
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CAPITAL PLAN 2022-23 APPENDIX 8 Health & Social Care Partnership Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability HSCP Ardfenaig 0 125 0 0 0 0 125 Block Allocation 0 390 431 428 0 0 1,249 Capital Property Works 0 139 0 0 0 0 139 Digitalising telecare 0 100 0 0 0 0 100 Eadar Glinn 0 196 0 0 0 0 196 Glencruitten Hostel 0 36 0 0 0 0 36 Gortonvogie 0 80 0 0 0 0 80 Greenwood/Woodlands 0 224 0 0 0 0 224 Kilmory Castle Top Floor Toilet Refurb 0 -2 0 0 0 0 -2 Lochgilphead Resource Centre 0 16 0 0 0 0 16 Struan Lodge Boiler 0 252 0 0 0 0 252 Thomson Home Rothesay 0 125 0 0 0 0 125 Tigh An Rudha HFE 0 372 10 0 0 0 382 Asset Sustainability Total 0 2,053 441 428 0 0 2,922 Service Development HSCP Dunclutha Childrens Home 1,246 54 0 0 0 0 1,300 Service Development Total 1,246 54 0 0 0 0 1,300 Overall Total 1,246 2,107 441 428 0 0 4,222 Page 91
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CAPITAL PLAN 2022-23 APPENDIX 8 Live Argyll Category Service Project Previous Years £000's 2022-23 £000s 2023-24 £000s 2024-25 £000s 2025-26 £000s 2026-27 £000s Total £000s Asset Sustainability Live Argyll Aqualibrium 0 28 0 0 0 0 28 Campbeltown Museum - Burnet Bldg 0 38 0 0 0 0 38 Capital Property Works 0 1,031 431 428 0 0 1,890 Inveraray CARS 0 21 0 0 0 0 21 Kintyre Community Education Centre - Lift Shaft Refurbishment 0 -12 0 0 0 0 -12 Lochgilphead Library Relocation 0 20 0 0 0 0 20 Riverside Leisure Centre - Cladding Upgrade 0 46 0 0 0 0 46 Riverside Leisure Centre - Spa Pool Upgrade 0 20 0 0 0 0 20 Rothesay Swimming Pool 0 27 0 0 0 0 27 The Moat Centre - Gym Store 0 -2 0 0 0 0 -2 Victoria Halls, Helensburgh 0 10 0 0 0 0 10 Asset Sustainability Total 0 1,227 431 428 0 0 2,086 Service Development Live Argyll Riverside Leisure Centre Refurbishment 1,245 -13 0 0 0 0 1,232 Service Development Total 1,245 -13 0 0 0 0 1,232 Strategic Change Live Argyll Carbon Management 29 21 0 0 0 0 50 Strategic Change Total 29 21 0 0 0 0 50 Overall Total 1,274 1,235 431 428 0 0 3,368 Page 92
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 TREASURY MANAGEMENT MONITORING REPORT – 30 JUNE 2022 1. EXECUTIVE SUMMARY 1.1. This report sets out the Council’s treasury management position for the period 1 April 2022 to 30 June 2022 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 30 June 2022, at this stage in the financial year capital expenditure is below target. Due to delays caused by the COVID-19 pandemic capital expenditure has been relatively low over the last twelve months however there is an expectation this will increase back up again over 2022-23 which will continue to be monitored closely. 1.3. The net movement in external borrowing in the period 1 April 2022 to 30 June 2022 was a decrease of £10.861m. 1.4. The levels of investments were £117.9m at 30 June 2022. The rate of return achieved was 1.351% which compares favourably with the target SONIA rate which was 1.064%. 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. The high cash levels are largely due to significant COVID-19 funding received from the Scottish Government at the end of 2020-21 and in to 2021-22 which the Council has committed for specific COVID-19 purposes in addition to slippage within the capital programme resulting in a slower rate of spend. Page 93
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 TREASURY MANAGEMENT MONITORING REPORT – 30 JUNE 2022 2. INTRODUCTION 2.1. This report sets out the Council’s treasury management position for the period 1 April 2022 to 30 June 2022 and includes information on: Overall borrowing position Borrowing activity Investment activity Economic background Interest rate forecast Prudential Indicators 3. 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 2022. The CFR represents the underlying need for the Council to borrow to fund its fixed assets and accumulated capital expenditure. Forecast Forecast Forecast 2022/23 2023/24 2024/25 £000 £000 £000 CFR at 1 April 309,092 333,454 348,569 Net Capital Expenditure 34,530 26,502 28,227 Less Loans Fund Principal Repayments (5,353) (5,507) (5,788) Less: NPDO Repayment (4,815) (5,880) (6,038) Estimated CFR 31 March 333,454 348,569 364,970 Less Funded by NPDO (116,681) (117,064) (112,184) Estimated Net CFR 31 March 216,773 231,505 252,786 Estimated External Borrowing at 31 March 212,431 236,654 256,650 Gap 4,342 (5,149) (3,864) Page 94
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3.2. Borrowing is below the Capital Financing Requirement for the period to 30 June 2022. Whilst borrowing rates are still comparatively low 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 30 June 2022 is £216.8m. The table below shows how this has been financed. £167.1m is funded by loans and there are substantial internal balances of £167.6m of which £117.9m are currently invested, as detailed in section 3.7, leaving a net internal balance of £49.7m. Position at 31/03/22 Position at 30/06/22 £000 £000 Loans 177,934 167,072 Net Internal Balances -5,505 49,701 Total CFR 172,429 216,773 3.5. During the period from 1 April to 30 June 2022, £10.892m of loans were repaid and 0.031m of new borrowing was taken. £10m of temporary borrowing had been taken out prior to the year- end to fund short term cash flow pressures therefore this accounts for the majority of the loan repayment figure. The analysis of the movement in borrowing is shown in the table below: Actual £000 External Loans Repaid 1st April 2022 to 30th June 2022 (10,892) Borrowing undertaken 1st April 2022 to 30th June 2022 31 Net Movement in External Borrowing (10,861) 3.6. The table below summarises the movement in the level and rate of temporary borrowing at the start and end of the period. £000 % Rate Temp borrowing at 31st March 2022 10,500 0.22% Temp borrowing at 30th June 2022 518 0.55% Page 95
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Investment Activity 3.8 The average rate of return achieved in the Council’s investments to 30 June 2022 was 1.351% compared to the SONIA (Sterling Overnight Index Average) rate for the same period of 1.064% which demonstrates that the Council continues to achieve a reasonable rate of return on its cash investments. At 30 June 2022 the Council had £117.9m of short term investments at an average rate of 1.351%. 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 5,384 1.15% Short Term A-2, Long Santander 180 Day 5,000 0.67% Short Term A-1, Long Clydesdale Bank 20/09/2022 5,000 1.60% Short Term A-2, Long AL Ryan Bank 02/08/2022 5,000 0.59% Short Term A-1, Long Toronto Dominion Bank 13/10/2022 5,000 0.50% Short Term A-1+, Close Bros 29/07/2022 2,500 0.55% Short Term A-1, Long National Bank of Kuwait 11/04/2023 7,500 2.08% Short Term A-1, Long National Bank of Kuwait 17/11/2022 5,000 1.70% Short Term A-1, Long Qatar National Bank 21/10/2022 5,000 1.49% Short Term A-1, Long Qatar National Bank 13/12/2022 5,000 1.94% Short Term A-1, Long Qatar National Bank 10/11/2022 5,000 1.67% Short Term A-1, Long AL Ryan Bank 07/12/2022 5,000 1.70% Short Term A-1, Long FADB 10/08/2022 5,000 0.24% Short Term A-1+, FADB 20/01/2023 5,000 1.00% Short Term A-1+, FADB 10/05/2023 5,000 2.11% Short Term A-1+, London Borough of Croydon 22/07/2022 5,000 1.65% AA London Borough of Croydon 22/08/2022 2,500 1.65% AA Rotherham Metropolitan Borough Council 10/10/2022 7,500 0.90% AA Slough Borough Council 26/05/2023 5,000 2.10% AA Cheshire West & Chester Council 12/01/2023 2,500 0.90% AA Slough Borough Council 29/06/2023 5,000 2.10% AA MMF - BNP Paribas Call 9,000 1.24% AAA MMF - Legal and General Call 6,000 1.10% AAA Total 117,884 Page 96
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3.9 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. 3.10 The Council has significant cash balances which are invested in accordance with its Annual Treasury Management Strategy. This is largely due to significant COVID-19 funding received from the Scottish Government at the end of 2020-21and in to 2021- 22 which the Council has committed for specific COVID-19 purposes. These cash balances are in excess of what is required for normal operating purposes but the economic environment for investments has improved over the last few months with an increase in interest rates, making investing these monies easier than in previous years. Economic and Interest Rate Forecasts 3.11 The latest economic background is shown in Appendix 1 with the interest rate forecast in Appendix 2. Prudential Indicators 3.12 The prudential indicators for 2022-23 are attached in Appendix 3. 4. CONCLUSION 4.1 In the period from 1 April 2022 to 30 June 2022, the Council’s borrowing decreased by £10.861m, it is currently below the Capital Financing Requirement. There are substantial internal balances, of which £117.9m is currently invested. The investment returns were 1.351% which is above the SONIA target of 1.064%. 5. 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 – 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 – None. 5.8 Customer Service – None. Kirsty Flanagan Section 95 Officer 8 July 2022 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney Page 97
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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 98
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Appendix 1 – Economics Update (at 06-07-22) This section has been provided by Link Asset Services and therefore includes their views and opinions of future trends and events. The second quarter of 2022 saw: GDP fall by 0.1% m/m in March and by 0.3% m/m in April; An easing rather than a collapse in the composite Purchasing Managers Index (PMI); A further rise in Consumer Price Index (CPI) inflation to a new 40-year high of 9.1% in May; The first signs that the weakening in economic activity is filtering into a slightly looser labour market; Bank Rate rise to 1.25%, taking it to its highest level since the Global Financial Crisis; Gilt yields caught up in the global surge in bond yields triggered by May’s strong rise in US inflation; Rising global bond yields and concerns over growth drive a global sell-off in equity markets. Following the 0.1% m/m fall in GDP in March and the 0.3% m/m contraction in April, the economy is now moving towards a recession (two quarters of falling output in a row). Indeed, GDP would need to rise by 0.4-0.5% m/m in both May and June to prevent the economy from contracting in Q2 as a whole. That said, without the joint wind down of the COVID-19 Test and Trace and vaccination programme, GDP would have risen by 0.2% m/m and 0.1% m/m in March and April respectively. That’s hardly strong, but it suggests the underlying momentum is not quite as weak as the headline figures imply. There is not much evidence that higher inflation and higher interest rates have yet become a big drag on activity. Services output did fall by 0.3% m/m in April. But output in consumer- facing services, conversely, rose by a solid 2.3% m/m in April. And although the Office for National Statistics (ONS) said that some of the 1.0% m/m fall in manufacturing output was linked to the drag on activity from higher prices, it also said that some of the 0.4% m/m drop in construction output in April was a drop back after the boost in the wake of February’s Storm Eunice. The fact that the composite PMI didn’t fall in June also suggests that in Q2 (Apr – June) real GDP has softened rather than collapsed. The S&P Global/CIPS all-sector PMI for June was unchanged from its level of 53.1 in May, signalling tepid but positive growth. According to the Lloyd’s barometer, business confidence in May also remained remarkably resilient. Despite the fall in the GfK composite measure of consumer confidence to a new record low of - 41 in June, April’s £1.4bn rise in consumer credit suggests households appear to have turned to credit to support their spending as the cost-of-living squeeze has intensified. Meanwhile, the household saving rate held steady at 6.8% in Q1 in line with its long-term average and we expect households to lower their saving rate further when the bigger falls in real incomes come in Q2 and Q3 to cushion the blow to spending. The Chancellor’s latest fiscal support of £10.3bn (0.5% of GDP), which comprised £15.3bn of handouts to households, partly funded by a £5bn tax on the profits of oil and gas producers, will help support GDP in the second half of the year. And with the Prime Minister and the Chancellor desperately needing to boost their popularity, some tax cuts may be announced in the Autumn Budget. Page 99
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There has been early signs that the recent weakening in economic activity is filtering through into a slightly looser labour market. The unemployment rate edged up from 3.7% in the three months to March to 3.8%. The single-month data showed that employment fell by 254,000 in April and the unemployment rate rose from 3.5% to 4.2%. And the upward march in the number of job vacancies slowed, with the three-month average only rising from 1.296m in April to 1.300m in May. A seasonal adjustment of the single-month data implies that vacancies fell in May for the first time since COVID-19 was rife in December. At the same time, a 1.8% m/m fall back in average earnings in April meant that the 3myy rate of earnings eased from 7.0% in March to 6.8% in April. And a lot of the 0.5% m/m rise in earnings excluding bonuses was probably due to the 6.6% rise in the National Living Wage on 1st April. The 3myy rate of earnings excluding bonuses stayed at 4.2%. That said, conditions in the labour market remain exceptionally tight. The unemployment rate is still close to its recent 47-year low, and there is the same number of unemployed people as job vacancies and at 6.8% in April, the 3myy rate of average earnings is at a 10-year high (although it is still falling in real terms) and is well above the 3.0-3.5% that is broadly consistent with the 2.0% inflation target (assuming that productivity growth is 1.0-1.5%). CPI inflation rose from 9.0% in April to a new 40-year high of 9.1% in May and it is not yet close to its peak. The increase in CPI inflation in May was mainly due to a further leap in food price inflation from 6.7% to a 13-year high of 8.5%. With the influence of increases in agricultural commodity prices yet to fully feed into prices on the supermarket shelves, we think that food price inflation will rise above 10% in September. And with two-thirds of the observation period for the Ofgem price cap having now passed, something like a 40% rise in utility prices is pretty much baked in the cake for October. The further rise in core producer price inflation, from 13.9% to 14.8%, suggests that core goods CPI inflation will probably rise to 14% before long. We think that will take CPI inflation to a peak of around 10.5% in October. The rise in services CPI inflation from 4.7% in April to 4.9% in May suggests that domestic price pressures are still strengthening. There now seems to be an even greater likelihood that second-round effects, whereby high inflation feeds back into higher price and wage expectations, keep inflation higher for longer. For some time, the Monetary Policy Committee (MPC) has placed a lot of weight on the results of the Bank of England’s monthly Decision Maker Panel which asks businesses how they expect to change their prices and wages over the next year. May’s survey revealed that businesses still expect to raise their selling prices by 6.0% and their wages by 4.8% over the next year. Meanwhile, XpertHR said that pay settlements across the economy stayed at a 30- year high of 4.0% in May. The government appears to be contemplating raising public sector pay by up to 5%. And the 7.1% pay rise granted to some railway workers sets a high bar for the negotiations that led to train strikes across large parts of the country in mid-June. The MPC has now increased interest rates five times in as many meetings and raised rates to their highest level since the Global Financial Crisis. Even so, coming after the Fed raised rates by 75 basis points (bps) in June and a handful of other central banks have recently raised rates by 50bps, the Bank of England’s action is relatively dovish. The MPC’s decision not to follow the Fed and raise rates by more makes some sense. The UK’s status as a larger importer of commodities, which have jumped in price, means that households in the UK are now facing a much larger squeeze on their real incomes. But the MPC’s new guidance is that if there are signs of “more persistent inflationary pressures” it will, “if necessary act forcefully in response”. We expect the MPC to continue to Page 100
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raise rates in steps of 25bps rather than 50bps. We think the MPC will raise rates from 1.25% now to a peak of 2.75% next year. That’s higher than the peak of 2.00% forecast by economists, but lower than the peak priced into the financial markets. Gilt yields have been caught up in the global surge in bond yields triggered by the surprisingly strong rise in CPI inflation in the US in May. The rises in two-year gilt yields (to a peak of 2.37% on 21st June) and 10-year yields (to a peak of 2.62%) took them to their highest level since 2008 and 2014 respectively. And in response to signs that central banks (particularly the US Fed) are going to raise interest rates faster to get on top of inflation, we now think that 10- year gilt yields will reach a peak of 2.70% (up from 2.39% currently) this year and into 2023. While the S&P 500 is 8.4% below its level a month ago, the FTSE 100 is 5.7% below it. Part of the sell-off has been driven by the rapid rise in global bond yields and the resulting downward pressure on equity valuations as well as concerns over economic growth. Finally, the pound has already weakened from $1.37 and €1.21 earlier this year to $1.21 and €1.16. A lot of these moves have been driven by concerns over the outlook for the global economy and the resulting poor performance of risky assets, which has increased the demand for the dollar relative to sterling. If interest rates rise faster and further in the US than in the UK, rate differentials and a worsening in risk appetite will push the pound even lower, from $1.21 now to $1.18 by the end of 2022. We don’t expect the pound to fall by as much against the euro (from €1.16 to €1.14 next year). But once global inflation and global interest rates peak, the pound will probably benefit from the return of risk appetite. It may rise to $1.25 by the end of 2023 and to $1.30 by the end of 2024. MPC meetings 5th May and 16th June 2022 After the Bank of England became the first major western central bank to put interest rates up in this upswing in December, it has quickly followed up its first 0.15% rise by a further four 0.25% rises to 1.25%, in what is very likely to be a series of increases repeated throughout the rest of 2022 and into 2023. In May, the MPC voted 6-3 vote in favour of a 0.25% increase, but not only was this the first time in its 25-year history that the MPC had raised rates at four meetings in a row but also three members (Haskel, Mann and Saunders) wanted a 0.5% hike (up from none in March). However, GDP growth was forecast to drop to -0.25% in 2023 (+1.25% previously) and only +0.25% in 2024 (+1.00% previously). Anyone for a recession? Nonetheless, over Q2, it is clear central banks in the developed economies have placed the dampening down of inflation pressures front and centre of their primary objectives, even if it comes at the cost of sluggish growth or, indeed, recession (mild ideally but it is very difficult to micro-manage economic performance). The Monetary Policy Committee (MPC) is in step with this approach although, arguably, the UK economy is dragging its feet to a greater extent than that seen in the US. What are the key factors for consideration? First, the CPI measure of inflation is already at 9.1%, and the Bank of England anticipates it will peak near to 11% just before Christmas. With the cost-of- living squeeze in full swing by that juncture, and unemployment likely to be ticking upwards, we judge that the Bank will pause following its March 2023 meeting and judge it has done enough so long as inflation starts to fall, albeit at a slow pace. To that extent, we can envisage the MPC waiting a full year before loosening the reins and starting to cut Bank Rate in spring 2024. However, given the number of geopolitical factors that could push this forecast off track, we would caution against taking a strong view on how interest rate Page 101
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movements evolve and instead focus on optimising balance sheet management and the risk management of investment and debt portfolios. Regarding gilt yields, all developed economies have seen a considerable uplift in government bond yields across the whole curve since the start of 2022 and, in many ways, gilts have simply played catch-up of late. To that end, we have revised our PWLB forecasts upward and you will even see we have a 3.7% PWLB rate projected for the 25-year part of the curve in both 2022 and 2023. However, as headline inflation falls back, we project a slow reduction in gilt yields as investors acknowledge that price pressures are gradually coming under control. At the 16th June MPC meeting, part of the reason for the Committee only seeing a 0.25% hike as necessary is the prevailing weak economic data. The vote was again 6-3 (the same as in May) but the words were more hawkish with the Bank strengthening its forward guidance. It deleted the previous phrase that “some degree of further tightening…may still be appropriate” and replaced it with “the scale, pace and timing of any further increases in Bank Rate will reflect the Committee’s assessment of the economic outlook and inflationary pressures” and that “the Committee will be particularly alert to indications of more persistent inflationary pressures, and will, if necessary, act forcefully in response.” Whereas in May two members objected to the guidance that rates will rise further, it appears that all members are behind this new, stronger guidance. However, the growing evidence that firms’ price and wage expectations have become dislodged from the 2.0% target suggest that the Bank is between a rock and a hard place in navigating the appropriate monetary policy response. As always, the economic data will be key to anticipating whether our assumptions remain sound. Page 102
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Appendix 2 – Interest Rate Forecast 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. The latest forecast on 21st June is compared below to the previous forecast (10th May). A comparison of these forecasts shows that PWLB rates have increased generally and show a speed up in the rate of increase in Bank Rate as inflation is now posing a greater risk. The increase in PWLB rates reflects a broad sell-off in sovereign bonds internationally as inflation concerns abound. To that end, the MPC has tightened short-term interest rates with a view to trying to slow the economy sufficiently to keep the secondary effects of inflation – as measured by wage rises – under control, but without pushing the economy into recession. Our current and previous 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. LIBOR and LIBID rates ceased for new contracts at the end of 2021. In a continuation of our previous forecasts, our money market yield forecasts are based on expected average earnings by local authorities for 3 to 12 months. Our forecasts 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. A SUMMARY OVERVIEW OF THE FUTURE PATH OF BANK RATE Our central forecast for interest rates was last updated on 21st June and reflected a view that the MPC will be keen to further demonstrate its anti-inflation credentials by delivering a 0.25% increase in Bank Rate in August, September, November, December, February and March i.e., the next six MPC meetings. Link Group Interest Rate View 21.06.22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 BANK RATE 1.75 2.25 2.75 2.75 2.75 2.75 2.50 2.50 2.25 2.25 2.25 2.25 3 month ave earnings 2.00 2.50 2.80 2.80 2.80 2.80 2.60 2.50 2.30 2.30 2.20 2.20 6 month ave earnings 2.50 2.80 3.00 3.00 2.90 2.90 2.80 2.70 2.60 2.50 2.40 2.30 12 month ave earnings 3.10 3.20 3.20 3.20 3.00 2.90 2.80 2.60 2.50 2.40 2.40 2.40 5 yr PWLB 3.20 3.30 3.30 3.30 3.30 3.20 3.10 3.00 3.00 3.00 2.90 2.90 10 yr PWLB 3.40 3.50 3.50 3.50 3.50 3.40 3.30 3.20 3.20 3.20 3.10 3.10 25 yr PWLB 3.70 3.70 3.70 3.70 3.70 3.70 3.60 3.50 3.50 3.40 3.40 3.30 50 yr PWLB 3.40 3.40 3.50 3.50 3.40 3.40 3.30 3.20 3.20 3.10 3.10 3.00 Link Group Interest Rate View 10.5.22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 BANK RATE 1.25 1.50 1.75 2.00 2.00 2.00 2.00 2.00 1.75 1.75 1.75 1.75 1.75 3 month ave earnings 1.20 1.50 1.70 2.00 2.00 2.00 2.00 2.00 1.70 1.70 1.70 1.70 1.70 6 month ave earnings 1.60 1.90 2.10 2.20 2.20 2.20 2.20 2.10 2.00 1.90 1.90 1.90 1.90 12 month ave earnings 2.00 2.20 2.30 2.40 2.40 2.30 2.30 2.20 2.20 2.10 2.10 2.10 2.10 5 yr PWLB 2.50 2.50 2.60 2.60 2.60 2.60 2.60 2.60 2.50 2.50 2.50 2.50 2.50 10 yr PWLB 2.80 2.80 2.90 2.90 2.90 2.90 2.90 2.90 2.80 2.80 2.80 2.80 2.80 25 yr PWLB 3.00 3.10 3.10 3.20 3.20 3.20 3.10 3.10 3.00 3.00 3.00 3.00 3.00 50 yr PWLB 2.70 2.80 2.80 2.90 2.90 2.90 2.80 2.80 2.70 2.70 2.70 2.70 2.70 Page 103
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The CPI measure of inflation is now forecast to rise to close to 11% in Q4 2022 and the MPC will be keen to stifle the prospect of average earnings data (6.8% y/y currently including bonuses) providing further upside risk to inflationary factors that are primarily being driven by supply-side shortages. When Bank Rate reached 1% in May, the MPC indicated (no earlier than August) that it will also consider the extent to which it implements Quantitative Tightening (QT), primarily the selling of its gilt holdings. However, they are likely to take any such decision cautiously as they are already not refinancing maturing debt. Notwithstanding the MPC’s clear desire to increase Bank Rate throughout 2022, negative real earnings, the 54% hike in the Ofgem energy price cap from April (to be followed by a potential 40%+ further increase from October), at the same time as employees (and employers) have incurred a 1.25% Health & Social Care Levy, growing commodity and food inflation plus council tax rises - all these factors will hit households’ finances hard. However, lower income families will be hit disproportionately hard despite some limited assistance from the Chancellor to postpone the full impact of rising energy costs. Given the above outlook, it poses a question as to whether the MPC may shift into protecting economic growth if it flatlines or contracts through 2022. Accordingly, we remain tentative about whether the MPC will increase Bank Rate as far as the market is currently pricing in (3.25% in April 2023). In the upcoming months, our forecasts will be guided not only by economic data releases and clarifications from the MPC over its monetary policies, but the on-going conflict between Russia and Ukraine, including the manner in which the West and NATO respond through sanctions and/or military intervention. Currently, oil, gas, wheat and other mainstream commodities have risen significantly in price and central banks will have to balance whether they prioritise economic growth or try to counter supply-side shock induced inflation. On the positive side, consumers are estimated to be sitting on over £160bn of excess savings left over from the pandemic so that will cushion some of the impact of the above increases. However, most of those are held by more affluent people whereas lower income families already spend nearly all their income before these increases hit and have few financial reserves. PWLB RATES The yield curve has steepened considerably through the quarter and PWLB 5 to 50 years Certainty Rates are, generally, in the range of 2.75% to 3.75%. We view the markets as having built in, already, nearly all the effects on gilt yields of the likely increases in Bank Rate and the poor inflation outlook (although we thought that in May and markets went much further than expected in respect of the gilt market sell-off). It is difficult to say currently what effect the Bank of England starting to sell gilts will have on gilt yields now that Bank Rate has gone to above 1%. Nothing will be decided before August, however, but the Bank is likely to act cautiously as it has already started on not refinancing maturing debt. A pure roll-off of the peak £875bn gilt portfolio by not refinancing bonds as they mature, would see holdings fall to about £415bn by 2031, which would be about equal to the Bank’s pre-pandemic holding. Increases in US treasury yields over the next few months could add further upside pressure on gilt yields as they have done since the turn of the year. Page 104
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Appendix 3 – Prudential Indicators PRUDENTIAL INDICATOR 2022-23 2022-23 2023-24 2024-25 (1). EXTRACT FROM BUDGET Forecast Outturn Original Estimate Forecast Outturn Forecast Outturn Capital Expenditure £'000 £'000 £'000 £'000 Non - HRA 34,530 51,699 26,502 28,227 TOTAL 34,530 51,699 26,502 28,227 Ratio of financing costs to net revenue stream Non - HRA 2.70% 2.70% 4.56% 4.57% Net borrowing requirement brought forward 1 April * 309,092 292,303 333,145 348,569 carried forward 31 March * 333,454 333,145 348,569 364,970 in year borrowing requirement 24,362 40,842 15,424 16,401 In year Capital Financing Requirement Non - HRA 24,362 40,842 15,424 16,401 TOTAL 24,362 40,842 15,424 16,401 Capital Financing Requirement as at 31 March Non - HRA 333,454 333,145 348,569 364,970 TOTAL 333,454 333,145 348,569 364,970 Page 105
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PRUDENTIAL INDICATOR 2022-23 2023-24 2024-25 (2). TREASURY MANAGEMENT PRUDENTIAL INDICATORS £'M £'M £'M Authorised limit for external debt - borrowing 228 252 272 other long term liabilities 120 121 116 TOTAL 348 373 388 Operational boundary for external debt - borrowing 223 247 267 other long term liabilities 117 118 113 TOTAL 340 365 380 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 2022/23 under 12 months 12 months and within 24 months 24 months and within 5 years 5 years and within 10 years 10 years and above upper limit lower limit 30% 0% 30% 0% 30% 0% 40% 0% 100% 0% Page 106
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 RESERVES AND BALANCES – UPDATE AS AT 30 JUNE 2022 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 £364.558m unusable reserves that are not backed with resources. They are required purely for accounting purposes. 1.3 At 31 March 2022 the Council had a total of £103.626m of usable reserves. Of this: • £2.682m relates to the Repairs and Renewals Fund • £4.414m relates to Capital Funds • £96.530m was held in the General Fund, with £89.433m of this balance earmarked for specific purposes. 1.4 Of the earmarked balance of £89.433m: • £46.923m is invested or committed for major initiatives/capital projects • £37.089m is still to be drawn down in 2022-23 • £5.421m is planned to be spent in future years Appendix 1 provides further information on the unspent budget earmarkings and Appendix 2 provides further information on the COVID earmarkings. 1.5 The Council’s General Fund contingency level is set at 2% of net expenditure for 2022-23 which equates to £5.256m. At the beginning of the financial year there was £1.841m of unallocated General Fund Balance (over and above contingency). At the Council meeting on 24 February 2022 it was agreed that the budgeted revenue surplus of £2.482m would be transferred into the general fund. After taking this into consideration and the current forecast outturn for 2022-23, the Council is estimated to have a £4.323m surplus over contingency. Page 107
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 RESERVES AND BALANCES - UPDATE AS AT 30 JUNE 2022 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 2022 3.2.1 The balances on each type of reserve at 31 March 2022 are set out in the two tables below, per the Unaudited Accounts for 2021-22. Unusable Reserves £000 Revaluation Reserve 145,903 Capital Adjustment Account 223,147 Financial Instruments Adjustment Account (2,198) Pensions Reserve 4,634 Accumulated Absences Account (6,928) Total Unusable Reserves 364,558 Usable Reserves £000 Repairs and Renewals Fund 2,682 Capital Fund and Usable Capital Receipts Reserve 4,414 General Fund 96,530 Total Usable Reserves 103,626 Total Reserves 468,184 Page 108
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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 2022 can be analysed as follows: Balance 31/03/22 £000 Balance on General Fund as at 31 March 2021 78,245 Increase to General Fund balance at end of 2021-22 18,285 Earmarked Balances (89,433) Contingency allowance at 2% of net expenditure (5,256) Unallocated balance as at 31 March 2022 1,841 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 2022, 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. Page 109
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Officers have reviewed and updated the spending profiles. Appendix 2 provides further details on the breakdown of COVID reserves. 3.4 Unallocated General Fund Balance 3.4.1 The Council’s General Fund contingency is set at 2% of net expenditure for 2022-23 and amounts to £5.256m. At the beginning of the financial year there was £1.841m of unallocated General Fund Balance (over and above contingency). After taking into consideration the budgeted allocation to the General Fund agreed by Council on 24 February 22 and the balanced forecast Earmarking Category Balance 31/03/2022 - per year end published report Transfers between categories Invested or committed for major initiatives /capital projects Drawn- down to 2022-23 Budget as at 30/06/22 Still to be drawn- down in 2022-23 Planned Spend Future Years Balance no Longer Required £000 £000 £000 £000 £000 £000 £000 Strategic Housing Fund 6,590 6,590 Investment in Affordable Housing 3,300 3,300 Capital Projects 24,722 24,722 Lochgilphead and Tarbert Regeneration 2,271 2,271 Support for Rural Growth Deal 1,058 1,058 Asset Management Investment 2,607 2,607 Piers and Harbours Investment Fund 1,643 1,643 Scottish Government Initiatives 3,141 2,774 367 CHORD 349 150 199 DMR Schools 1,982 1,982 Energy Efficiency Fund 218 218 Existing Legal Commitments 475 475 Unspent Grant 12,834 950 11,432 452 Unspent Third Party Contribution 166 166 Previous Council Decision - Other 4,343 -55 2,125 2,163 Redundancy Provision 1,732 500 1,232 Supporting Organisational Change 1,588 500 1,088 Spend to Save Route Optimisation 100 100 Timing Delay 499 499 Hermitage Park 4 4 COVID-19 9,407 257 9,150 Unspent Budget 10,404 55 1,400 6,976 2,083 Totals 89,433 0 46,923 0 37,089 5,421 0 Page 110
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outturn position at June, the Council is forecast to have a £4.323m surplus over contingency. Heading Detail £000 Unallocated General Fund as at 31 March 2022 This is the balance that is unallocated over and above the 2% contingency, which amounts to £5.256m 1,841 Budgeted allocation to General Fund for 2022-23 Budget Per the Budget Motion at Council on 24 February 2022 2,482 Current Forecast Outturn for 2022-23 as at 30 June 2022 0 Estimated Unallocated balance as at 31 March 2023 4,323 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 the known liabilities/cost pressures. The table below shows what has been drawn down against the one-off gain and the remaining balance. Agreed Allocation Transferred to Earmarked Reserves / 20-21 / 21-22 Budget Transferred to Earmarked Reserves / 22-23 Budget Balance Remaining £000 £000 £000 £000 Provision for the increasing principal repayments 7,649 7,649 Provision to Support Organisational Change 500 (500) 0 Estimated Cost of 2020-21 redundancies that are part of budget savings proposals 600 (600) 0 Future Redundancies Provision 1,500 (1,500) 0 Spend to Save Route Optimisation 100 (100) 0 Funding Gap in Capital Programme 2,619 2,619 Capital Programme Intolerable Red Risks 574 (574) 0 Campbeltown Flood Prevention Scheme 1,406 1,406 Significant Strategic Change Projects 5,013 (2,856) 2,157 2020-21 Revenue Budget Contribution 600 (600) 0 20,561 (6,730) 13,831 Page 111
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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 30 June 2022 the estimated unallocated General Fund, after taking into consideration the budget motion and forecast outturn for 2022-23 is £4.323m. 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 £5.256m (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. Kirsty Flanagan Section 95 Officer 8 July 2022 Policy Lead for Finance and Commercial Services - Councillor Gary Mulvaney APPENDICES Appendix 1 – Earmarked Reserves breakdown of unspent budget Appendix 2 – Earmarked Reserves breakdown of COVID earmarkings For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk Page 112
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APPENDIX 1 Earmarked Reserves - Unspent Budget As at 30 June 2022 Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 001 Chief Executive's Unit Community Planning Communities and Partnership Team 8,855 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 0 002 Chief Executive's Unit Community Planning Gaelic Development 8,235 8,235 8,235 0 To fund Gaelic specific work and project work of the Community Planning Partnership including the development of the new 10 year Outcome Improvement Plan 8,235 0 0 003 Chief Executive's Unit Financial Services Financial Systems 114,000 114,000 114,000 0 To fund the completion of the implementation of the Oracle Fusion Financial Management System, a software update for cash receipting to ensure card payments can still be taken and the procurement and implementation of a new system to manage the requirements of the IFRS16 Leases accounting standard. 114,000 0 0 004 Chief Executive's Unit Financial Services Accounting and Budgeting Team Resilience 95,000 95,000 76,000 19,000 To fund the implementation of a new staffing structure in 2022/23 as agreed at ELT on 12 April 2022. This will provide funding to cover the additional staffing costs in 2022/23 and the training costs over the period 2022/23 to 2026/27 76,000 5,000 14,000 005 Chief Executive's Unit Financial Services CIPFA 32,530 32,530 32,530 0 CIPFA Training - To fund the professional training costs for staff undertaking the CIPFA professional accountancy qualification. 32,530 0 0 006 Chief Executive's Unit Financial Services Scottish Government Funding - Welfare Reform/Discretionary Housing Payments (agreed at Council February 2014) 18,595 18,595 0 18,595 The Council was allocated additional funding of £550k from the Scottish Government late in 2013-14. This money was allocated to support the Community Learning and Development Team to provide courses to support Universal Credit claimants 2019/2020 to support the recruitment of casual tutors and the purchase and upgrade of laptops. The monies were not utilised however it will now be required to top up the Scottish Welfare Fund and DHP monies for 2022/23 as it is likely that given the current cost of living crisis that more people will be in need of support through these funds 0 18,595 0 007 Executive Director (Douglas Hendry) Across Services / Education Digital Projects (Supply Staff Booking System) 35,000 35,000 35,000 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 35,000 0 0 008 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Charity 750,000 750,000 375,000 375,000 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. 375,000 375,000 0 009 Executive Director (Douglas Hendry) Commercial Services Demolition of former Lochgilphead Primary and Rothesay Secondary School 320,000 320,000 320,000 0 To fund the demolition of the former Lochgilphead Primary School and former Rothesay Academy (subject to the removal of the listing). 320,000 0 0 010 Executive Director (Douglas Hendry) Commercial Services Rothesay Pavilion Essential repairs 306,400 306,400 306,400 0 Essential repairs to deal with potential health and safety risks and to avoid further deterioration. Budget provision was approved by the Policy and Resources Committee on 21 August 2014. 306,400 0 0 011 Executive Director (Douglas Hendry) Commercial Services Estates - NDR Revaluation Appeals 84,688 84,688 84,688 0 The Council agreed to make provision to meet the cost of appealing Non Domestic Rates (NDR) revaluations which will be imposed from 1st April 2017. It was agreed that £150,000 be earmarked from the favourable 2016-17 outturn position to fund these appeals. The balance of £84,688 is still required as NDR valuation appeals have been lodged but have not been heard yet. We will not know the level of savings, and in turn the corresponding charge to us, until the appeals are concluded which should be later on this year. Ryden are awaiting outcome of further citations which will incur fees. 84,688 0 0 012 Executive Director (Douglas Hendry) Commercial Services Site Investigation Works 21,013 21,013 21,013 0 For Site Investigation works in relation to Tweeddale Street Car Park, Oban and Oban Airport Business Park to explore commercial opportunities to develop the sites and gain revenue income for Argyll and Bute Council. HUB North were instructed to procure contractors to undertake the site investigations and work commenced in March 2020. This is still ongoing. 21,013 0 0 013 Executive Director (Douglas Hendry) Commercial Services Catering and Cleaning Restructure Costs 17,000 17,000 17,000 0 To support the catering and cleaning team restructure 17,000 0 0 014 Executive Director (Douglas Hendry) Education Education Transformation Fund 187,526 187,526 187,526 0 At the Council meeting on 27 February 2020, it was agreed to input £400k into Education Digital Learning. The additional funds have been spent in 20/21 and 21/22, as part of the ongoing transformation work in the Education service, focussing on digital and virtual learning technology and the development of learning clusters. This will continue into 2022/23. 187,526 0 015 Executive Director (Douglas Hendry) Education Education Learning Estate Condition Surveys 77,440 77,440 77,440 0 To fund the delivery of School Core Facts (SCF) compliant Condition Surveys for prioritised School Buildings. 77,440 0 0 016 Executive Director (Douglas Hendry) Education Skype for Business for Education / Digital Projects (Skype for Business) 10,000 10,000 10,000 0 To fund the initial capital costs for the implementation of Skype for Business for Education. This will bring the Education service in line with other council departments and will improve staff collaboration and modernise school telephony to deliver the service more efficiently and cost effectively. A balance has been released back to the general fund because the rollout project is almost complete with only £0.01m expected spend in 22/23. 10,000 0 0 017 Executive Director (Douglas Hendry) Legal and Regulatory Services Education Purchasing Officers 210,000 210,000 90,000 120,000 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. 90,000 120,000 0 018 Executive Director (Douglas Hendry) Legal and Regulatory Services NDR - One off contribution to 22/23 Budget 200,000 200,000 200,000 0 To fund one off operational saving CS04 agreed for the 2022/23 budget. 200,000 0 0 019 Executive Director (Douglas Hendry) Legal and Regulatory Services NPDO Schools Contract 166,000 166,000 166,000 0 To fund one off operational saving LRS01 agreed for the 2022/23 budget 166,000 0 0 Page 113
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Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 020 Executive Director (Douglas Hendry) Legal and Regulatory Services Transformation Agenda QIO 100,259 100,259 70,259 30,000 Ongoing funding for the QIO post to lead the implementation of the service transformation programme. The QIO will assist the Executive Director to deliver the Council’s transformation agenda by developing, analysing and monitoring initiatives and projects which deliver the vision, values and strategic objectives of the Council. 70,259 30,000 0 021 Executive Director (Douglas Hendry) Legal and Regulatory Services Digital Projects: Hybrid Council meetings 55,000 55,000 30,000 25,000 Per paper agreed at SMT October 2021 - allocation from Digital Projects (General Provision to be allocated). To fund the costs of livestreaming of Council meetings. 30,000 25,000 0 022 Executive Director (Douglas Hendry) Legal and Regulatory Support Councillor IT Equipment 65,000 65,000 65,000 0 To meet the cost of provision of IT equipment for all new Elected Members as a result of the Local Government Election in May 2022. 65,000 0 0 023 Executive Director (Douglas Hendry) Legal and Regulatory Support Debt Counselling & Welfare Rights 27,025 27,025 27,025 0 To meet the cost of a Debt Counselling and Welfare Rights Management System. 27,025 0 0 024 Executive Director (Douglas Hendry) Legal and Regulatory Support Community Safety Partnership 16,000 16,000 16,000 0 To earmark the Community Safety Partnership funding received for 2021/22 to be used for Community Safety Partnership purposes. 16,000 0 0 025 Executive Director (Kirsty Flanagan) Customer Support Services Microsoft 365 300,000 300,000 166,930 133,070 To be added to existing earmarked reserves to meet increasing MS365 licensing costs from 2022/23 onwards 166,930 133,070 0 026 Executive Director (Kirsty Flanagan) Customer Support Services Growing our Own and Modern Apprentices 109,150 109,150 109,150 0 Funding earmarked to support trainee development and modern apprenticeship opportunities based on priority workforce risk areas. These areas have been identified and proposals developed. £95,790 to be spent in 22/23 and £13,360 to be spent in 23/24 to fund a graduate trainee and 3 apprentices to deliver trainee development and modern apprenticeship opportunities 109,150 0 0 027 Executive Director (Kirsty Flanagan) Customer Support Services Security Operations Centre Subscription 76,455 76,455 0 76,455 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 year 4 onwards. There is unallocated funding of £103,545 from the earmarking created at 2020/21 year end for 'Digital Projects', so the earmarking request for 2021/22 year end is the balance of £76,455 16,455 60,000 028 Executive Director (Kirsty Flanagan) Customer Support Services Learning and Development 36,508 36,508 36,508 0 In order to maximise the opportunities and efficiencies of digital learning, this funding will be used to support the extension of digital learning in order to deliver the Digital Learning Strategy, which was approved in FQ4 20/21. 36,508 0 0 029 Executive Director (Kirsty Flanagan) Customer Support Services Implementation of Gaelic Language Plan 30,000 30,000 30,000 0 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. 30,000 0 0 030 Executive Director (Kirsty Flanagan) Customer Support Services Establishing HR Service Centre 30,000 30,000 18,000 12,000 To facilitate the implementation of technical efficiency improvements and new processes 18,000 12,000 0 031 Executive Director (Kirsty Flanagan) Customer Support Services Business Development Training 27,601 27,601 27,601 0 This budget is funding ongoing leadership development, coaching, action learning sets and commissioned training including Priority Management. 27,601 0 0 032 Executive Director (Kirsty Flanagan) Development and Economic Growth Oban TIF (Tax Incremental Financing) 709,700 709,700 709,700 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. 709,700 0 0 033 Executive Director (Kirsty Flanagan) Development and Economic Growth Strategic Events & Festivals 115,764 115,764 115,764 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 115,764 0 034 Executive Director (Kirsty Flanagan) Development and Economic Growth Island Post 50,461 50,461 50,461 0 To fund a temporary post at LGE11 to assist with the National Islands Plan Implementation Route Map 2020-2025 50,461 0 0 035 Executive Director (Kirsty Flanagan) Development and Economic Growth Royal National Mod 40,000 40,000 20,000 20,000 One off funding allocation for the Royal National Mod agreed as part of the budget setting process for 2019-20. Grant contract issued. Proposed payment of £20k per annum starting 2020/21 (2023/24 final payment of £20k) 20,000 20,000 0 036 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Variation Monies 1,492,997 1,492,997 746,499 746,498 This would be used to fund/part-fund various waste infrastructure projects that will support the council’s compliance with the 2025 ban on the Landfill of Biodegradable Municipal Waste, including the development of landfill cell construction works at Gartbreck. 746,499 746,498 0 037 Executive Director (Kirsty Flanagan) Roads & Infrastructure Climate Change 500,000 500,000 500,000 0 At the Council meeting on 27 February 20, 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 2 500,000 0 038 Executive Director (Kirsty Flanagan) Roads & Infrastructure 3G pitches / Tarbert Sports Pitches 427,286 427,286 89,373 337,913 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. 89,373 337,913 0 039 Executive Director (Kirsty Flanagan) Roads & Infrastructure Green Transport Initiatives 400,000 400,000 400,000 0 At the Council meeting on 27 February 20, 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 21-22. £260k Footways Reconstruction programme now agreed across the four areas, £140k Ardrishaig North Project. 400,000 0 040 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Strategy 363,000 363,000 225,000 138,000 To fund/part-fund various waste infrastructure projects that will support the council's compliance with the 2025 ban on the Landfill of Biodegradable Municipal Waste. 225,000 138,000 0 041 Executive Director (Kirsty Flanagan) Roads & Infrastructure Waste Management 256,753 256,753 256,753 0 Will be used towards long term waste management strategy/model, including but not limited to scoping work for the creating of a waste transfer station . 256,753 0 0 042 Executive Director (Kirsty Flanagan) Roads & Infrastructure Replacement Signage and Bins 135,366 135,366 135,366 0 To replace street litter bins and key road signage. This would help to reduce future budget pressures for replacements of bins and signs and would also help to enhance the streetscape and general appearance of the area by refreshing the street furniture 135,366 0 0 043 Executive Director (Kirsty Flanagan) Roads & Infrastructure Kintyre Recycling Redundancy Costs 36,000 36,000 36,000 0 To fund redundancy costs associated with Kintyre Recycling 36,000 0 0 044 Executive Director (Kirsty Flanagan) Roads & Infrastructure Amenity Services introduction of management information system 28,099 28,099 28,099 0 Delay with introduction of amenity time recording system, spend unlikely to be incurred until 2022-23 for handheld devices and software. 28,099 0 0 045 Non Departmental Non Departmental Underwriting development of Rothesay Pavilion 1,000,000 1,000,000 1,000,000 0 Funding to meet additional costs identified as necessary for the refurbishment of Rothesay Pavilion. 1,000,000 0 0 046 Non Departmental Non Departmental Loans Fund 385,279 385,279 385,279 0 At the Council Budget meeting on 24 February 2022, Saving FS01, a Loans Fund Management/Operational saving for 22/23 budget of £0.500m was agreed with at least £0.200m to come from underspends in 21/22. The underspend position for 21/22 is £0.385m and this has to be earmarked to help offset the saving. 385,279 0 0 047 Non Departmental Non Departmental Utilities 283,000 283,000 283,000 0 To contribute towards the expected adverse impact on the 2022/23 budget of utility costs inflation as per Budget Pack 283,000 0 0 Page 114
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Ref Department Service Description Opening Balance Budget Drawdown New earmarking during 22-23 Remaining Balance Still to be drawn down in 22-23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 048 Non Departmental Non Departmental Digital Projects (General Provision to be allocated) 103,545 103,545 103,545 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063mand a general provision still to be allocated £0.189m. Further allocation to Hybrid Council Meetings agreed October 2021 (£0.085m). There is a proposal for 2021-22 year end to use the balance of this earmarking towards the Security Operations Centre Subscription unspent budget request - per Appendix 2.1l 103,545 0 0 049 Non Departmental Non Departmental Community Resilience Fund 76,447 76,447 76,447 0 Fund established in 2012/13 to be spent over more than one year. Fund reduced at the Council meeting on 11 February 2016 76,447 0 0 050 Non Departmental / Chief Executive's Unit Across Services / Chief Executive's Unit Information Management (Balance of Funding) 209,844 209,844 209,844 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 209,844 0 0 051 Non Departmental / Executive Director (Douglas Hendry) Across Services / Commercial Services Information Management (Estates Survey Work) 12,697 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 12,697 0 0 052 Non Departmental / Executive Director (Douglas Hendry) Across Services / Legal and Regulatory Services Information Management (Digitalisation of Title Deeds) 92,000 92,000 61,000 31,000 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 61,000 31,000 0 053 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Digital Customer Engagement Projects) 73,000 73,000 73,000 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 73,000 0 0 054 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Increase in Schools Bandwidth) 63,455 63,455 63,455 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 63,455 0 0 055 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Customer Support Services Digital Projects (Replacement Learning Management System) 11,470 11,470 11,470 0 To deliver a number of Digital Service Transformation Projects, specifically in Education and Customer Support Services, but also to reserve a further amount to support priority digital transformation projects identified in Departmental ICT programmes, that have not yet started due to resource constraints. The specific projects include: Supply Staff Booking System £0.035m, Skype for Business (for Education) £0.030m, Enhancing Curriculum Choice and Equity of Provision £0.080m, Digital Customer Engagement Developments £0.073m, Replacement of Learning Management System £0.030m, Increase in Schools Bandwidth £0.063m and a general provision still to be allocated £0.189m 11,470 0 0 056 Non Departmental / Executive Director (Kirsty Flanagan) Across Services / Development and Economic Growth Information Management (Document Management and Workflow for Planning, Building Standards and Environmental Health) 57,491 57,491 57,491 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 57,491 0 0 10,458,934 0 0 10,458,934 8,376,403 2,082,531 8,376,403 2,008,531 74,000 Page 115
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APPENDIX 2 COVID Earmarkings As at 30 June 2022 Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarking during 22-23 Remaining Balance Still to be drawndown in 22- 23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 001 Chief Executive's Unit Community Planning Community Planning - temp post to support communities 55,000 55,000 55,000 0 As agreed at Policy & Resources committee on 9 December 2021, allocation of £0.055m to a post to support the economic and social recovery together with the building back stronger themes. 55,000 0 0 002 Chief Executive's Unit Community Planning COVID-19 - Test and Protect Support 44,047 44,047 44,047 0 Funding provided in relation to the Local Self-Isolation Assistance Service. The Community Planning and Development Team will work with community groups to support their community response and resiliency to Test and Protect and COVID-19 impacts 44,047 0 0 003 Chief Executive's Unit Financial Services LACER Fund 797,720 797,720 797,720 0 The Council meeting on 28 April 2022, it was agreed that Local Authority Covid Economic Recovery (LACER) Funding is to be used to distribute Scotland Loves Local cards to CTR recipients. This will take place in June 2022 giving Economic Development time to encourage the Co-op to sign up to accept the cards. 797,720 0 0 004 Chief Executive's Unit Financial Services Housing Benefits Private 673,867 673,867 673,867 0 Specific funding allocation for DHP to support tenants financially affected by the COVID-19 outbreak to sustain their tenancies. It is expected there will continue to be pressure on this budget going into 22- 23 673,867 0 0 005 Chief Executive's Unit Financial Services Flexible Food Fund 510,573 510,573 510,573 0 Financial Insecurity funding from Scottish Government routed into the Argyll and Bute Flexible Food Fund (ABFFF) is aimed at tackling financial insecurity for adults and families across Argyll and Bute. ABFFF offers financial support and wider confidential professional help to anyone suffering hardship. Working in partnership with the Community Food Forum, Bute Advice Centre and ALIenergy, households with low incomes and no access to cash savings can apply for immediate financial support. The Fund will help support daily living expenses. If the claimant engages with these services, a second payment will be made to contribute to a further months daily living expenses. In the period from 10 January 2021 to 30 April 2022 client gain in extra benefits income for families was £1.45 million with 1,090 families had been supported. The project has been extended to 31 March 2023 and this money will be used to support it. 510,573 0 0 006 Chief Executive's Unit Financial Services Flexible Funding for Supporting People while at Tier 4 COVID 167,983 167,983 167,983 0 Funding to strengthen local authority responses to meet emerging needs and support people in their communities struggling with the restrictions and guidance at all protection levels, particularly those at risk through health and social inequalities; this support could cover the same types of support currently delivered including information and advice, access to food and medicines, and practical and emotional support; and, administration costs to support delivery (e.g. strengthening the National Assistance Helpline) and liaison and co-ordination with 3rd sector. It will be for Local Government to use this funding flexibly for this purpose. 167,983 0 0 007 Chief Executive's Unit Financial Services Self Isolated Support Grant 16,000 16,000 16,000 0 Unspent admin funding for processing Self isolation Support Grants. Monies will be fully utilised in 2022/2023 to support the further administration of the grant until 31 March 2023. 16,000 0 0 008 Chief Executive's Unit Financial Services Test and Protect Extension 9,929 9,929 9,929 0 Funding provided in relation to the Local Self-Isolation Assistance Service. This will be used to support the recruitment of 0.5FTE LGE6 temp post to assist with call volumes in the Scottish Welfare Fund team in 2022/23 9,929 0 0 009 Executive Director (Douglas Hendry) Education Logistics Funding - Safe Opening of Schools 940,605 940,605 940,605 0 SG Funding to ensure the safe opening and operation of schools. Includes transport, PPE, Cleaning and expansion of estate. 940,605 0 0 010 Executive Director (Douglas Hendry) Education Additional Teaching/Support in Schools/Digital Devices/Family Home Learning Support Fund - £45m Grant - £45m 488,310 488,310 488,310 0 Continuation of funding for additional staffing, teachers, support staff, additional devices for pupils and additional family /home learning programmes. 488,310 0 0 011 Executive Director (Douglas Hendry) Education COVID 19 - Education Recovery - Additional Staff in School and ELC settings 373,346 373,346 373,346 0 To employ a variety of school staff to meet the needs of children and young people in their local areas and ensure that levels of teaching and support staff in schools can be maintained in the 2021-22 academic year. Funding will also be used to support the transition from ELC to primary school. 373,346 0 0 012 Executive Director (Douglas Hendry) Education Education to Support Young People 321,816 321,816 321,816 0 As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.600m. Agrees to fund a package of measures to boost the wellbeing and build back the resilience of young people, in particular those most vulnerable, following the Covid-19 pandemic, including counselling and increased provision of childcare for children under three. Notes that the Scottish Government is yet to confirm details of funding for similar initiatives and, should our investment in children’s wellbeing qualify for this funding, the balance will be re-allocated to the Recovery and Renewal Fund. 321,816 0 0 013 Executive Director (Douglas Hendry) Education Recruitment of Additional Teachers and Support Staff in Schools 136,715 136,715 136,715 0 Fund additional teachers and support staff. 136,715 0 0 014 Executive Director (Douglas Hendry) Education EDU - Community Mental Health and Wellbeing Support to Children and Young People - Pandemic Funding 49,756 49,756 49,756 0 Scottish Government/COSLA Initiative to support the work under the Children and Young People's Mental Health and Wellbeing Programme grant split in 2020-21 with £183,750 of the fund utilised by local collaborative partnerships for supporting children, families and carers through the pandemic. The Scottish Government has agreed for the balance to be spent in 2022/23. 49,756 0 0 015 Executive Director (Douglas Hendry) Legal and Regulatory Services Welfare Rights Support 172,000 172,000 172,000 0 As agreed at the Council Meeting on 25 February 2021 - an allocation of £0.172m. As part of our focus on Improving Opportunities for People and Communities, agrees to provide additional resources to proactively support people experiencing poverty and hardship, by investing in two additional Welfare Rights support staff for two years. 172,000 0 0 016 Executive Director (Douglas Hendry) Legal and Regulatory Services LACER Funding - Advice Services 130,000 130,000 130,000 0 Local Authority COVID Economic Recovery (LACER) Funding for Welfare Rights - ALI Energy, Bute Advice, Citizens Advice 130,000 0 0 017 Executive Director (Kirsty Flanagan) Customer Support Services Self Isolated Support / Self Isolated Support Grant (HR) 115,000 115,000 115,000 0 These were monies that were provided by Scotgov to fund additional overtime and resources for Shielding/Caring for People and Test and Protect activities, however low infection rates and therefore demand in A&B meant that this was not required in 2020/21 or 2021-22. The 2021-22 funding of £43,000 will be be used for Recovery related activities including the recruitment of a Temporary Additional Web Developer to implement the improvements identified by customers in the Customer Engagement Consultation and to mainstream the Coronavirus page content back in to Business as usual. Another portion will be used to fund the Digital Receptionist solution as part of safe re-opening of offices. The 2021-22 funding of £72,000 will be used to fund consultancy and development of RPA (robotic process automation) software which will build automation within HR workflows and processes. This will improve efficiency and accuracy. 115,000 0 0 018 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation and Marketing Argyll and Bute 592,013 592,013 592,013 0 As agreed at the Council Meeting on 25 February 2021 with an original allocation of £0.800m. This will include provision of additional waste disposal facilities and other facilities that will be informed by the Motorhome and Informal Camping Survey. 592,013 0 0 Page 116
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Ref Department Service Description Opening Balance Budget Drawdown Released back to General Fund New earmarking during 22-23 Remaining Balance Still to be drawndown in 22- 23 Planned to spend in future years Plans for Use Amount Planned to be Spent in 2022- 23 Amount Planned to be Spent in 2023- 24 Amount Planned to be Spent from 2023-24 onwards 019 Executive Director (Kirsty Flanagan) Development and Economic Growth Tackling Digital Exclusion Top-Up Fund 250,000 250,000 250,000 0 As agreed at the Council Meeting on 25 February 2021. Establishes the Tackling Digital Exclusion Top Up Fund to support communities and in some cases individuals that are missing out on national programmes due to logistics and economies of scale. While vouchers are available from the UK and Scottish Governments in some cases these do not cover the full cost of infrastructure builds. 250,000 0 0 020 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Small Business Development Grant) 200,000 200,000 200,000 0 Local Authority COVID Economic Recovery Fund grant. This funding will provide funding of between £500 and £5,000 to help existing micro and small businesses to improve their resilience or growth via projects to implement green initiatives, implement digital development, implement marketing improvements and improve efficiency/innovation. 200,000 0 0 021 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Sector Support Grant) 150,000 150,000 150,000 0 Local Authority COVID Economic Recovery Fund grant. This will provide funding, either part of the small business development grant or standalone, to help micros and small business to implement projects that contribute to the sector as well as benefitting the business, for example: Tourism and hospitality, food and drink or retail. With option to provide additional business support to hard hit areas including Bute and Kintyre where unemployment remains higher than average - support via specialist advice, locally tailored grants to meet local priorities and targeted marketing activity. 150,000 0 0 022 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (New Enterprise Support Grant) 120,000 120,000 120,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide £3,000 grants to help new businesses start up and establish. 120,000 0 0 023 Executive Director (Kirsty Flanagan) Development and Economic Growth Staycation Investment per budget pack February 22 100,000 100,000 100,000 0 As agreed at Council on 24 February 2022, Staycation investment £0.100m. Augments the 2021/22 £0.5m staycation initiative with an additional investment of £100k, including support for community groups and partners in the provision of facilities which can support increasing staycation visitor numbers during the 2022/23 season. 100,000 0 0 024 Executive Director (Kirsty Flanagan) Development and Economic Growth Economic Development - temp post to support economic recovery 55,000 55,000 55,000 0 As agreed at Policy & Resources committee on 9 December 2021, allocation of £0.055m to a post to support the economic and social recovery together with the building back stronger themes. 55,000 0 0 025 Executive Director (Kirsty Flanagan) Development and Economic Growth EH Covid Posts 41,145 41,145 41,145 0 Funding for 2 posts for 2 years and not recruited until late 20-21 41,145 0 0 026 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Shop Local) 40,000 40,000 40,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would provide funding to continue the Shop Local scheme into 2022-23 and 2023-14, buying additional cards and allow the cards to gather momentum and support local businesses. 40,000 0 0 027 Executive Director (Kirsty Flanagan) Development and Economic Growth Tenant Hardship Fund 30,000 30,000 30,000 0 Grant received from Scottish Government to support tenants suffering hardship due to COVID-19. Claims have been made and Housing are in the process of paying these out and all claims will be settled during 2022-23. 30,000 0 0 028 Executive Director (Kirsty Flanagan) Development and Economic Growth LACER Funding (Gypsy Travellers) 10,000 10,000 10,000 0 Local Authority COVID Economic Recovery Fund grant. This funding would pay for MECOPP (Minority Ethnic Carers of People Project) to engage with the Gypsy Travellers community on the important subject of the cost of living increases, fuel poverty and the impact of factors such as their remote rural locations and the facilities available to them for everyday living have on their livelihoods 10,000 0 0 029 Non Departmental Across Departments COVID Cost Pressures Beyond 2021/22 370,000 370,000 370,000 0 As agreed at the Council Meeting on 25 February 2021 (£2.5m) with the value reduced to £0.370m based on more up to date projections at year end 2021-22. Allocation of COVID funding to projected 22/23 Revenue Cost Pressures 370,000 0 0 030 Non Departmental Non Departmental Recovery and Renewal Fund 1,547,000 1,547,000 1,547,000 0 As agreed at Council on 24 February 2022, Recovery and Renewal Fund £1.547m. This is provision for future recovery, regeneration and renewal, as well as any future pressures which may arise following the Covid-19 pandemic through a dedicated Recovery and Renewal Fund. Proposals for use of this fund to be brought forward by officers to the Policy and Resources Committee. To include in the first instance options for maximising Argyll and Bute’s potential as a green, connected staycation destination of choice, requesting that officers bring to the Environment, Development and Infrastructure Committee a report on use of external funding sources and other opportunities for improving the electric vehicle charging network. 1,547,000 0 0 031 Non Departmental Non Departmental Unallocated Admin Support Grant 411,285 411,285 411,285 0 Funding to support the delivery of the Business Grants to local businesses, partially used during 20/21 and 21/22 but a balance remains to be carried forward and used in future years 411,285 0 0 032 Non Departmental Non Departmental Capital pressure 257,000 257,000 257,000 0 Pressure identified on the 20-21 COSLA COVID costs spreadsheets - requires to be earmarked to be drawn down when required against the Capital Plan 257,000 0 0 033 Non Departmental Non Departmental Levelling up Fund bids per P&R February 22 150,000 150,000 150,000 0 As agreed at Policy & Resources committee on 17 February 2022, an allocation of up to £0.150m to support Levelling Up Fund bids 150,000 0 0 034 Non Departmental Non Departmental CHARTS per budget pack February 22 75,000 75,000 75,000 0 As agreed at Council on 24 February 2022, investment in CHARTS £0.075m. To support the organisation in delivering targeted support, in communities, to the culture, arts and heritage sector as part of its plans to contribute to overall economic recovery. 75,000 0 0 035 Non Departmental Non Departmental CHARTS 7,000 7,000 7,000 0 As agreed at the Council Meeting on 25 February 2021. Allocation of COVID funding to CHARTS £0.067m, with the balance of £0.007m being carried to 2022/23. The allocation is to ensure that Argyll and Bute’s culture, heritage and arts sector can make a contribution to our overall recovery and renewal. 7,000 0 0 9,408,110 0 0 0 9,408,110 9,408,110 0 9,408,110 0 0 Page 117
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 BUDGET OUTLOOK 2023-24 TO 2027-28 1. EXECUTIVE SUMMARY 1.1 This report provides an update to the budget outlook 2023-24 to 2027-28, reported to the Policy and Resources Committee on 16 June 2022. 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 16 June 2022 and ranges between 0.5% reduction (best case) and 1.5% reduction (worst case) with a mid-range reduction of 1.0%. 1.4 There are no changes to my previous assumptions around the growth in Council Tax. For 2023-24 the Council tax base has been assumed to grow by 1% in the worst case scenario, 1.5% in the mid-range scenario and 2% in the best case. In future years this then drops down to 0.25% in the worst case scenario, 0.5% in the mid-range scenario and 0.75% in the best case. 1.5 There are no changes to the base budget since the report on 16 June 2022. 1.6 Similarly there are no changes to the assumptions in respect of employee costs for Council services which were previously noted as follows: Pay award for 2023-24 to 2027-28 of between 2% in the best and mid- range scenarios and 5% within the worst case scenario. It is acknowledged that as the pay award has not yet been agreed it could differ from this estimate and at this stage we are recognising that possibility as a financial risk. Increments between £0.345m and £0.690m with mid-range £0.690m. 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. The estimates for non-pay inflation have increased by £0.434m with the main increases being insurance and bitumen prices. 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 16 June 2022 are: New - Increased cost of salt for Winter Maintenance New - Cease use of red diesel New - Insurance payments Page 119 Agenda Item 5
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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 and worst case scenarios of between £0.250m and £0.500m 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 agreed in February 2022, indicative allocations for 2023-24 to 2024-25 were agreed on the basis of a flat cash allocation. In the budget outlook I have assumed flat cash allocations across all three scenarios. 1.11 At this stage a 3% reduction to the Live Argyll Management fee has been included within the estimates. At the 2022-23 budget setting meeting in February 2022 it was agreed to defer the proposed 3% reduction to the Live Argyll management fee until 2023-24 subject to any future budget decisions. It was agreed that management would engage in early discussions with Live Argyll in relation to future approach to support effective longer term financial planning. 1.12 The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustments, non-pay inflation and 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 £47.784m with a gap of £10.292m in 2023-24. 1.13 The measures to balance the budget over the next five years are as follows: Proposed increase to fees and charges of between 2% and 4% (3% mid- range). 3% reduction to the Live Argyll Management Fee. Management/operational savings agreed by Council in February 2022. Policy savings already agreed by Council in February 2022. Proposed increase to Council Tax (3% in all scenarios). 1.14 In the mid-range scenario, the revised budget gap estimated over the five year period 2023-24 to 2027-28 is £36.493m with a gap of £7.980m in 2023-24. 1.15 The budget gap in the best case scenario over the five years is £25.060m with a gap of £5.367m in 2023-24 and in the worst case scenario, the budget gap over the five years is £79.798m with a gap of £16.231m in 2023-24. A summary of all three scenarios is included within Appendix 1. 1.16 It is recommended that the Policy and Resources Committee consider the current estimated budget outlook position for the period 2023-24 to 2027-28. Page 120
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 11 AUGUST 2022 BUDGET OUTLOOK 2023-24 TO 2027-28 2. INTRODUCTION 2.1 This report provides an update to the budget outlook 2023-24 to 2027-28, reported to the Policy and Resources Committee on 16 June 2022. 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 2023-24 to 2027-28. 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. In my report in June, I advised that the Resource Spending review indicated that Local Government is expected to receive a flat cash settlement up to 2026-27. The flat cash position is at portfolio level and does not include any transfers to Local Government from other portfolios in-year. These transfers are likely not be confirmed until December 2022 and that, along with the fact that due to our declining population our settlement is usually worse that the average, lead me to the funding assumptions built into the outlook. The funding assumptions range between a 0.5% reduction (best case) and 1.5% (worst case) with a mid-range reduction of 1.0%. 4.1.2 The table below summarises the mid-range scenario estimates expressed in percentage terms and monetary value. 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 % Change to Funding -1.0% -1.0% -1.0% -1.0% -1.0% Estimated SG Funding Reduction (2,016) (2,143) (2,122) (2,101) (2,080) Estimated SG Funding 214,330 212,187 210,065 207,964 205,884 Page 121
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Council Tax 4.1.3 The Council Tax budget for 2022-23 was set at £55.262m which reflected a 3% inflation increase and 1.5% growth in the Council Tax base as agreed by the Council on 24 February 2022. 4.1.4 There are no changes to my previous assumptions around the growth in Council Tax. It has been assumed that a 1.5% growth in the mid-range (1% in worst case and 2% in best case) should be maintained for 2023-24 with the drop down to 0.5% in the mid-range in 2024-25. 4.1.5 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 2022-23. 4.1.6 The table below summarises the estimated total funding in the mid-range scenario. 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Estimated SG Funding 214,330 212,187 210,065 207,964 205,884 Council Tax Base 55,262 55,262 55,262 55,262 55,262 Council Tax Growth 829 1,109 1,391 1,674 1,959 Total Estimated Funding 270,421 268,558 266,718 264,900 263,105 4.2 Base Budget 4.2.1 The 2022-23 budget approved by Council on 24 February 2022 was £262.812m. 4.2.2 For future years, there are adjustments required to the base budget from decisions by Council on 24 February 2022 and other adjustments as noted in the table below: 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Base Budget 2022-23 262,812 262,812 262,812 262,812 262,812 Additional Funding in Finance Order (see paragraph 4.1.4) 6,315 6,315 6,315 6,315 6,315 Additional budget required in relation to the Teachers Pay Settlement 2021-22 (see paragraph 4.1.5) 121 121 121 121 121 Adjust for repayment of Loans Fund Principal Repayment Holiday 162 170 179 188 197 Remove one off 2022-23 Election costs (350) (350) (350) (350) (350) Remove one off 2022-23 Management/Operational savings 2,174 2,182 2,182 2,182 2,182 Revised Base Budget 271,234 271,250 271,259 271,268 271,277 Page 122
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4.3 Employee Cost Changes Pay Award 4.3.1 The pay award for 2022-23 has still to be agreed and this may have an impact on the base budget if the pay award is greater than the estimate built into the current year’s budget, which was 2%. 4.3.2 In March 2022, COSLA Leaders agreed to make an undifferentiated offer of a 2% uplift to all bargaining groups on the basis of parity for all which has been both a key concern and agreed position for the past number of years. All Unions rejected this initial offer. On 17 June 2022, COSLA Leaders agreed to “mandate the Resources spokesperson to make a revised pay offer of 5% contingent on additional funding being provided by the Scottish Government, matching that offered to Agenda for Change staff, and, recognising the significant affordability impact this will have for Councils, to continue discussions to make clear to Scottish Ministers that they must urgently identify and provide additional financial resource for Local Government to protect local services and current staffing levels.” Negotiations are ongoing. 4.3.3 The COSLA remuneration advisory group, made up of advisors from the Society of Local Authority Chief Executives (SOLACE), The Directors of Finance and the Society of Personnel and Development Scotland (SPDS) has noted the constraints on Local Government funding, with two thirds of Councils having budgeted for a pay increase of 2% or less. The 2% increase is deemed to be affordable, hence why that is the assumption that has been built into the mid- range scenario. On speaking with Director of Finance colleagues in early July, there is still a shared view that no more than 2% is affordable for Local Government. 4.3.4 For future years, the pay assumption remains at 2% in both the mid-range and the best case, reflecting that 2% is deemed to be affordable but it is not likely that the pay award will be less than this. For scenario purposes, 5% has been built into the worst case. There remains a significant risk that the pay award agreed for 2022-23 and beyond could be higher. Every 1% over and above what is budgeted would add an additional pressure of circa £1.5m. Increments 4.3.5 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 half of the previous year cost, for mid-range and worst case, it will be equal to the cost in 2022-23 (£0.690m). 4.3.6 The table below summarises the employee cost increases 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 4.6.3. Page 123
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2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Pay Award 3,000 6,061 9,182 12,366 15,613 Increments 690 1,380 2,070 2,760 3,450 Total Employee Cost Changes 3,690 7,441 11,252 15,126 19,063 4.4 Non-Pay Inflation 4.4.1 Over the last few years, the Council have only included non-pay inflation within the budget where it was deemed to be unavoidable or inescapable. In terms of the budget outlook, only 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 Given the current instability around inflation rates officers continue to review areas of non-pay inflation of significant value and volatility 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 2023-24 budget process. 4.4.4 The table below summarises the non-pay inflation increases in the mid-range scenario for Council services since last reported on 16 June 2022 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 4.6.3. Inflation Category 2023-24 Previous estimates £000 2023-24 Updated estimates £000 Increase £000 Utilities - Electricity, Gas, Oil, Water 1,177 1,190 13 Street Lighting Electricity 116 116 0 Vehicle Fuel 62 60 (2) Central Repairs - Outside Contractors 57 66 9 Waste PPP/Landfill Tax 502 502 0 NPDO/HUB Schools 1,024 1,034 10 Community Pool Subsidies 60 65 5 Residential Schools 91 91 0 Page 124
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Pre-Primary Partner Providers 86 181 95 ICT 123 123 0 Catering Purchases and Milk 309 309 0 Insurance 0 146 146 Bitumen – Roads 0 158 158 Contingency for unidentified/insufficient inflation estimate 250 250 0 Total 3,857 4,291 434 4.4.6 The inflation for years 2024-25 to 2027-28 is noted in the table below and is based on future years estimates of inflation at this point it time. It may be that the inflation could rise to a peak over the next couple of years and then fall again and this would alter the estimates in the table below, however, this is very difficult to predict and the estimates will be kept under review. 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Unavoidable/Inescapable 7,271 10,476 13,926 17,641 Total Non-Pay Inflation 7,271 10,476 13,926 17,641 4.5 Cost and Demand Pressures 4.5.1 Over the last few years, services have worked on the basis of having to contain any cost and demand pressures within current resources, 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 2022. Since the Policy and Resources Committee on 16 June 2022 the following changes have been made to the cost and demand pressures: New - Increased cost of salt for Winter Maintenance New - Cease use of red diesel New - Insurance payments. Officers are currently assessing the budget required in respect of the provision for 1140 hours. The Scottish Government reduced the funding for this area of spend in 2022-23 and it is likely that this may create a cost pressure for future years. The level of the cost pressure has not been quantified as yet and will be updated within a future budget outlook. 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 no allowance for this is included within the best case scenario, a £0.500m general allowance is included within the worst case and a £0.250m allowance included within the mid-range scenario each year. 4.5.3 The cost pressures are detailed in appendix 3 and are summarised in the table below and will be subject to review during the financial year. Page 125
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4.5.4 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Universal Credit – HB Admin Grant 40 80 120 160 200 Oracle Fusion 35 35 35 35 35 ASN Support 0 75 206 206 206 SEEMiS Membership Fees 9 11 13 16 16 Sustainable rate for partner providers 342 327 327 327 327 Election costs 0 0 0 0 300 HR System 100 (50) (50) (50) (50) Waste 7 25 78 (91) (91) Compliance with BMW Ban 0 400 1,600 1,150 0 Local Development Plan 0 50 0 50 0 House Loans 19 19 19 19 19 Parking 15 15 15 15 15 IT – Increased bandwidth in schools 26 26 26 26 26 Salt for Winter Maintenance 163 163 163 163 163 Cessation of red diesel 78 78 78 78 78 Insurance 414 414 414 414 414 Allowance for pressures in future years 250 500 750 1,000 1,250 Total Cost and Demand Pressures 1,498 2,168 3,794 3,518 2,908 4.5.5 The cost and demand pressures relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.3. 4.6 Health and Social Care Partnership 4.6.1 The Council, at the budget meeting on 24 February 2022, agreed a base allocation to the HSCP of £69.005m for 2022-23 as well as indicative flat cash allocations for 2023-24 to 2026-27. On 2 March 2022 the Local Government Finance Circular 1/2022 was published which distributed additional funding of which £4.037m was required to be passed to the HSCP, therefore their allocation increased from £69.005m to £73.042m. 4.6.2 In the budget outlook, I have assumed flat cash allocations across all scenarios. These are only assumptions and it will be a matter for Council to consider as part of the budget process next year. 4.6.3 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. 2023-24 £000 2024-25 £000 2025-26 £000 Pay Inflation 1,335 2,671 4,033 Page 126
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Pay Increments 103 206 309 Non-Pay Inflation 3,490 6,981 10,680 Care Services for Younger Adults 412 832 1,261 Adult Services - Supported Living 344 686 1,029 Continuing Care for Looked After Children 250 500 750 Kintyre Care Centre 750 750 750 Unknown Cost and Demand Pressures 500 1,000 1,500 Total Cost Increase estimates for Social Work 7,184 13,626 20,312 4.7 Estimated Budget Gap PRIOR to Measures to Balance the Budget 4.7.1 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 balancing the budget. 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Base Budget 271,234 271,250 271,259 271,268 271,277 Employee Cost Changes 3,690 7,441 11,252 15,126 19,063 Non-Pay Inflation 4,291 7,271 10,476 13,926 17,641 Cost and Demand Pressures 1,498 2,168 3,794 3,518 2,908 Total Estimated Expenditure 280,713 288,130 296,781 303,838 310,889 Estimated Funding 270,421 268,558 266,718 264,900 263,105 Estimated Budget Surplus / (Gap) Cumulative (10,292) (19,572) (30,063) (38,938) (47,784) 4.8 Measures to Balance the Budget 4.8.1 In previous years, a general inflationary increase of 3% has been applied to fees and charges. For the budget outlook a range of between 2% (worst case) and 4% (best case) with a mid-range of 3%. The Council may consider, that in light of the increasing inflation we are experiencing on many cost areas, that it would be appropriate to increase the fees and charges inflation to a higher level. 4.8.2 A number of policy options were agreed at the Council meeting on 24 February 2022 that impacted on 2023-24 and beyond. These are now factored into the budget outlook, reducing the budget gap. 4.8.3 In terms of Council Tax, a 3% increase has been assumed across all scenarios, this being the increase applied in 2022-23. It will be a matter for Council to decide the level of Council Tax increase. Page 127
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4.8.4 In respect of Live Argyll, at the budget meeting on 24 February 2022, Council agreed to defer the proposed 3% reduction in the management fee for 2022/23 and noted that this will be applied in 2023-24 and will be subject to any future budget decisions. 3% of the 2022-23 management fee equates to £0.122m and this reduction has been built into the budget outlook from 2023-24 onwards. No further reduction has been built in, this would be a matter for Council to consider. 4.8.5 The table below summarises the proposed measures to balance the budget in the mid-range scenario. 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Fees and Charges Increase 356 722 1,099 1,488 1,888 Management/Operational Savings February 2021 20 20 20 20 20 Policy Savings February 2021 128 128 128 128 128 Policy Savings agreed February 2022 3 6 6 6 6 Council Tax Increase 1,683 3,450 5,278 7,170 9,127 Reduction to Live Argyll Management Fee 122 122 122 122 122 Total Measures to Balance the Budget 2,312 4,448 6,653 8,934 11,291 4.9 Estimated Budget Gap AFTER Measures to Balance the Budget 4.9.1 The table below summarises the estimated budget gap in the mid-range scenario. 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Estimated Budget Gap Prior to Measures to Balance Budget (10,292) (19,572) (30,063) (38,938) (47,784) Savings Measures 2,312 4,448 6,653 8,934 11,291 Estimated Budget Surplus / (Gap) Cumulative (7,980) (15,124) (23,410) (30,004) (36,493) Estimated Budget Surplus / (Gap) In Year (7,980) (7,144) (8,286) (6,594) (6,489) 4.9.2 In the mid-range scenario, the budget gap estimated over the five year period 2023-24 to 2027-28 is £36.493m with a gap of £7.980m in 2023-24. 4.9.3 The budget gap in the best case scenario over the five years is £25.060m with a gap of £5.367m in 2023-24 and in the worst case scenario, the budget gap over the five years is £79.798m with a gap of £15.443m in 2023-24. A summary of all three scenarios is included within Appendix 1. Page 128
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4.9.4 The changes from the previous anticipated outlook reported to the Policy and Resources Committee on 16 June 2022 are summarised in the table below: 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Previously reported budget surplus / (gap) Cumulative (6,891) (13,385) (20,940) (26,710) (32,275) Increase to cost pressures (655) (655) (655) (655) (655) Increase to Non Pay Inflation (434) (1,084) (1,815) (2,639) (3,563) Revised Budget Surplus / (Gap) Cumulative (7,980) (15,124) (23,410) (30,004) (36,493) 4.10 Budget Working Group 4.10.1 As part of the 2021-22 and 2022-23 budgets, a cross party Budget Working Group (BWG) was established comprising of six Members from the administration, three Members from the opposition and two Trade Union representatives. The BWG did not have any decision making authority but could report to and make recommendations to either the Council or the Policy and Resources Committee. Its primary purpose was to engage with officers and provide scrutiny on the identification of savings options as they are developed. 4.10.2 Given the significant budget gap over the next five years it was agreed at Policy and Resources Committee on 16 June 2022 that a similar group will be established to support the 2023-24 budget approach and for the group to begin discussions in August 2022 to allow sufficient time to address the financial challenges ahead. Officers are making arrangements for the first meeting to take place in August. 5. CONCLUSION 5.1 In the mid-range scenario, the budget gap estimated over the five year period 2023-24 to 2027-28 is £36.493m with a gap of £7.980m in 2023-24. Council officers are continuing to further develop savings options during 2022-23 and these will be presented to members at a future date to help balance the budget in future years. 5.2 5.3 This is a very challenging budget outlook position and the level of Scottish Government grant and the pay award are the two assumptions that could alter the figures significantly. Both will be kept under close review and the budget outlook updated as and when further information becomes available. It should be noted that service concession flexibility has now been agreed by the Cabinet Secretary for Finance and the Economy and a draft consultation draft of the statutory guidance was issued on 18 July with responses due back by 12 Page 129
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August. The flexibility, should the Council approve to use, will provide a one-off gain in addition to a recurring saving. Officers will work through the draft guidance and after approval of the guidance be able to report what this may mean for Argyll and Bute Council. 5.4 A cross party budget working group will be established to provide scrutiny on the identification of savings options with early engagement with services users and stakeholders to help inform and develop savings options within the financial envelope. 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 Customer Service - None directly from this report but any proposals to address the estimated budget gap will need to consider customer service. Kirsty Flanagan Executive Director/Section 95 Officer 20 July 2022 Policy Lead for Finance and Commercial Services: Councillor Gary Mulvaney Page 130
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APPENDICES: 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 131
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BUDGET OUTLOOK 2023-24 to 2027-28 APPENDIX 1 POLICY AND RESOURCES COMMITTEE - 11 AUGUST 2022 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 2023-24 £000 2024-25 £000 2025-26 £000 2026-27 £000 2027-28 £000 Base Budget 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 Base Budget Adjustments 2,107 2,123 2,132 2,141 2,150 2,107 2,123 2,132 2,141 2,150 2,107 2,123 2,132 2,141 2,150 Revised Base Budget 271,234 271,250 271,259 271,268 271,277 271,234 271,250 271,259 271,268 271,277 271,234 271,250 271,259 271,268 271,277 Pay Award 2,978 6,016 9,114 12,274 15,497 2,978 6,016 9,114 12,274 15,497 7,445 15,262 23,470 32,089 41,138 Pay Increments 345 690 1,035 1,380 1,725 690 1,380 2,070 2,760 3,450 690 1,380 2,070 2,760 3,450 Additional Teacher Costs (23) 23 23 24 24 22 45 68 92 116 (23) 23 23 24 24 Total Employee Cost Changes (Council Services) 3,300 6,729 10,172 13,678 17,246 3,690 7,441 11,252 15,126 19,063 8,112 16,665 25,563 34,873 44,612 Non-Pay Inflation - Council Services 3,867 6,639 9,610 12,794 16,207 4,291 7,271 10,476 13,926 17,641 6,316 11,103 16,147 21,470 27,097 Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 Oracle Fusion running costs 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 ASN Support 0 0 198 198 198 0 75 206 206 206 0 145 444 444 444 SEEMIS Membership Fees 9 11 13 16 16 9 11 13 16 16 9 11 13 16 16 Sustainable Rate for Partner Providers 342 327 327 327 327 342 327 327 327 327 342 327 327 327 327 Election Costs 0 0 0 0 250 0 0 0 0 300 0 0 0 0 350 Software support for a new HR system & Backfill for project team. 50 (50) (50) (50) (50) 100 (50) (50) (50) (50) 150 (50) (50) (50) (50) Waste 7 25 78 (91) (91) 7 25 78 (91) (91) 7 25 78 (91) (91) Compliance with BMW Ban 0 200 800 800 0 0 400 1,600 1,150 0 0 875 3,500 1,500 0 Planning (Local Development Plan) 0 50 0 50 0 0 50 0 50 0 0 50 0 50 0 House Loans 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 Parking 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 IT - increased bandwidth in schools 26 26 26 26 26 26 26 26 26 26 26 26 26 26 26 Increase in cost of Salt for Winter Maintenance 147 147 147 147 147 163 163 163 163 163 179 179 179 179 179 Cessation of Red Diesel usage 78 78 78 78 78 78 78 78 78 78 78 78 78 78 78 Rightsize Council insurance budgets 414 414 414 414 414 414 414 414 414 414 414 414 414 414 414 Allowance for Cost and Demand Pressures Future Years 0 0 0 0 0 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 Total Cost and Demand Pressures 1,182 1,377 2,220 2,144 1,584 1,498 2,168 3,794 3,518 2,908 1,814 3,229 6,698 5,122 4,462 Total Estimated Expenditure PRIOR to measures to balance the budget 279,583 285,995 293,261 299,884 306,314 280,713 288,130 296,781 303,838 310,889 287,476 302,247 319,667 332,733 347,448 Scottish Government Grant 214,895 213,821 212,752 211,688 210,629 213,817 211,679 209,562 207,466 205,391 212,736 209,545 206,402 203,305 200,256 Specific Funding for Additional Teachers 515 512 509 506 503 513 508 503 498 493 510 502 494 487 480 Council Tax 56,367 56,790 57,216 57,645 58,077 56,091 56,371 56,653 56,936 57,221 55,815 55,955 56,095 56,235 56,376 Total Funding 271,777 271,123 270,477 269,839 269,209 270,421 268,558 266,718 264,900 263,105 269,061 266,002 262,991 260,027 257,112 Budget Surplus / (Gap) PRIOR to measures to balance the budget (7,806) (14,872) (22,784) (30,045) (37,105) (10,292) (19,572) (30,063) (38,938) (47,784) (18,415) (36,245) (56,676) (72,706) (90,336) Measures to Balance the Budget: Fees and Charges 475 963 1,465 1,984 2,517 356 722 1,099 1,488 1,888 237 481 733 992 1,259 Live Argyll - 3% decrease to management fee 122 122 122 122 122 122 122 122 122 122 122 122 122 122 122 Management/Operational Savings agreed February 2021 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Policy savings agreed February 2021 128 128 128 128 128 128 128 128 128 128 128 128 128 128 128 Policy savings reported Agreed February 2022 3 6 6 6 6 3 6 6 6 6 3 6 6 6 6 Council Tax Increase 1,691 3,445 5,265 7,152 9,109 1,683 3,425 5,227 7,092 9,021 1,674 3,403 5,188 7,031 8,933 Council Tax Increase (Growth element) 0 34 69 105 143 0 25 51 78 106 0 17 34 52 70 Total Measures to Balance the Budget 2,439 4,718 7,075 9,517 12,045 2,312 4,448 6,653 8,934 11,291 2,184 4,177 6,231 8,351 10,538 Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (5,367) (10,154) (15,709) (20,528) (25,060) (7,980) (15,124) (23,410) (30,004) (36,493) (16,231) (32,068) (50,445) (64,355) (79,798) Budget Surplus / (Gap) In Year AFTER measures to balance the budget (5,367) (4,787) (5,554) (4,819) (4,532) (7,980) (7,144) (8,286) (6,594) (6,489) (16,231) (15,837) (18,378) (13,910) (15,443) Best Case Scenario Worst Case ScenarioMid-Range Scenario Page 132
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NON-PAY INFLATION (COUNCIL) Appendix 2 Service Category Basis of Inflation Inflation Percentage Mid Range 2023/24 Council Wide Electricity Due to current market condition for electricity 20% increase mid range, with a 0.5% tolerance for best and worst case. 20.00% 481,154 Council Wide Gas Due to current market condition for gas 75% increase mid range, with a 0.5% tolerance for best and worst case. 75.00% 371,037 Council Wide Heating Oils Due to current market condition for heating oils 100% increase mid range, with a 0.5% tolerance for best and worst case. 100.00% 266,842 Council Wide Solid Fuel Based on estimates provided by facility services with a 0.5% tolerance for best and worst case. 8.00% 18,430 Council Wide Water Charges Current rate of inflation with a 0.5% tolerance for best and worst case. 9.10% 53,241 Council Wide Vehicle Fuel Historic rate carried forward from last year - will be reviewed during 2022-23 4.97% 60,377 Council Wide Central Repairs - Outside Contractors Based on labour and materials costs survey data from the Royal Institute of Chartered Surveyors (RICS) and information from the property team on the typical allocation of their costs between labour and materials. 3.40% 66,006 Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 250,000 Council Wide Insurances Current rate of inflation with a 0.5% tolerance for best and worst case. 9.10% 146,114 1,713,201 Education Pre-Primary Partner Provider Uplift Brought into line with the estimate within Social Work for the impact of the Real Living Wage on service costs. 5.00% 180,699 Education External School Placements Based on prior year uplifts 8.00% 90,590 Commercial Services Catering Purchases Figure used by facility services based on national estimates for year 1 with a 0.5% tolerance for best and worst case. 15.00% 308,543 Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools Based on RPI at February 2022 with a 0.5% tolerance in the best and worst case scenarios. 8.18% 13,757 Legal & Regulatory Support Leisure SLA-Atlantis Based on RPI at May 2022 with a 0.5% tolerance in the best and worst case scenarios. 9.24% 51,161 Legal & Regulatory Support NPDO-Variable Element Based on year on year RPI uplift with a 0.5% tolerance for best and worst case. 8.18% 599,843 Legal & Regulatory Support NPDO-Utilities Rebate RPI at February 2022 with a 0.5% tolerance for best and worst case. 8.20% -23,945 Legal & Regulatory Support NPDO-Electricity Due to current market condition for electricity 20% increase mid range, with a 0.5% tolerance for best and worst case. 20.00% 89,930 Legal & Regulatory Support NPDO-Gas Due to current market condition for gas 75% increase mid range, with a 0.5% tolerance for best and worst case. 75.00% 119,481 Legal & Regulatory Support NPDO-Heating Oil Due to current market condition for heating oils 100% increase mid range, with a 0.5% tolerance for best and worst case. 100.00% 68,801 Legal & Regulatory Support NPDO-LPG Due to current market condition for gas 75% increase mid range, with a 0.5% tolerance for best and worst case. 75.00% 53,900 Legal & Regulatory Support NPDO-Water Current rate of inflation with a 0.5% tolerance for best and worst case. 9.10% 31,906 Legal & Regulatory Support HUB-Variable Element Based on year on year RPI uplift with a 0.5% tolerance for best and worst case. 8.18% 93,883 1,678,549 Customer and Support Services ICT Historic rate carried forward from last year - will be reviewed during 2022-23 15.00% 123,000 Roads and Infrastructure Waste PPP-Private Contractor Inflation Based on RPIX at February 2022 with a 0.5% tolerance for best and worst case. 7.09% 465,049 Roads and Infrastructure Waste PPP-Central Government Inflation Based on Landfill Tax increase between 21/22 and 22/23 with a 0.5% tolerance for best and worst case. 1.96% 36,765 Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on price increases in 2022/23 with a 0.5% tolerance for best and worst case. 40.00% 158,512 Roads and Infrastructure Electricity - Street Lighting Due to current market condition for electricity 20% increase mid range, with a 0.5% tolerance for best and worst case. 20.00% 116,305 899,631 4,291,381 Council Wide Total Executive Director Douglas Hendry - Total Executive Director Kirsty Flanagan - Total Total Non-Pay Inflation in the Mid Range Page 133
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COUNCIL COST AND DEMAND PRESSURES 2023-24 to 2027-28 Department Service Cost/Demand Pressure 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 Chief Executive's Unit Financial Services Universal Credit “Full” Service went live in Sept 2018, but managed migration has been deferred to 2021 and will not be completed until 2024. 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 marginally since implementation of Universal Credit but it is hard to predict just how quickly the rest of the working age caseload will migrate from Housing Benefit to Universal Credit between now and 2024. These figures represent our best estimates at this time. 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 Chief Executive's Unit Financial Services Implementation of new financial ledger system - Oracle Fusion Project 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 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. 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 continued improvements in recording and the introduction of the additional need types 'Child plans' and ‘Other’ in 2011. 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. 0 0 198 198 198 0 75 206 206 206 0 145 444 444 444 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 refreshed it to cover the period 2021/22 to 2025/26. As a result of this exercise there were implications on Membership fees with a cost pressure on the Education service arising from financial year 2023/24. Indicative membership fees were provided for financial years 2021/22 to 2022/23 and these have been factored in accordingly. 9 11 13 16 16 9 11 13 16 16 9 11 13 16 16 Executive Director - Douglas Hendry Education The Council has had a requirement to deliver 1140 hours of Early Learning and Childcare from August 2021. The Council has been notified that the ring fenced funding will be reduced by £1.124m from 2022-23. Also, as part of the 1140 expansion programme, the Scottish Government 'Funding Follows the Child' guidance, requires local authorities to set a rate locally that is paid to funded providers in the private and third sectors, including childminders, to deliver the funded entitlement that allows them to deliver a high quality ELC experience for all children. This rate should be sustainable and reflect national policy priorities, including funding to enable payment of the real Living Wage to all childcare workers delivering the funded entitlement and have a margin for re-investment built in. The service has worked hard to mitigate the effects of this and has reduced expenditure as far as possible. However there remains a funding gap, the service are able to cover the over spend for 2022-23 from carry forwards so the cost pressure is requested from 2023-24 onwards. The service will continually review their plans looking for efficiencies where possible. 342 327 327 327 327 342 327 327 327 327 342 327 327 327 327 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 0 0 250 0 0 0 0 300 0 0 0 0 350 Executive Director - Kirsty Flanagan HR Costs for a project team for a new HR system & Backfill . This is a total new system build. 50 -50 -50 -50 -50 100 -50 -50 -50 -50 150 -50 -50 -50 -50 Best Case Mid Range Scenario Worst Case APPENDIX 3 Page 134
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COUNCIL COST AND DEMAND PRESSURES 2023-24 to 2027-28 Department Service Cost/Demand Pressure 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 2023-24 £,000 2024-25 £,000 2025-26 £,000 2026-27 £,000 2027-28 £,000 Best Case Mid Range Scenario Worst Case APPENDIX 3 Executive Director - Kirsty Flanagan Waste Additional costs derived from the current waste model. Note that the treatment of waste going forward has not been fully costed due to uncertainty as to how the council will deal with the Bio Municipal Waste ban and the Deposit Return Scheme. Pressure has increased due to an updated waste model. 7 25 78 (91) (91) 7 25 78 (91) (91) 7 25 78 (91) (91) Executive Director - Kirsty Flanagan Waste Achieving compliance with ban on biodegradable municipal waste 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. There are also capital cost implications that are not included within these estimates. Due to the complexity of the model, estimates are subject to change. 0 200 800 800 0 0 400 1,600 1,150 0 0 875 3,500 1,500 0 Executive Director - Kirsty Flanagan Planning 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 50 0 0 50 0 50 0 0 50 0 50 0 Executive Director - Kirsty Flanagan Housing Rightsize budget for House Loans which is a historic budget which has simply been rolled forward year on year 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 Executive Director - Kirsty Flanagan Parking Loss in income at Glen Loin Car park, Arrochar due to end of lease and responsibility for car park returning to owners, Luss Estates 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Executive Director - Kirsty Flanagan IT Increased bandwidth for schools to allow digital transformation to support the move to online learning 26 26 26 26 26 26 26 26 26 26 26 26 26 26 26 Executive Director - Kirsty Flanagan Roads Increased cost of Salt for Winter Maintenance, average useage of 15,000 tonnes of salt over the winter period would equate to £163k of additional costs. 147 147 147 147 147 163 163 163 163 163 179 179 179 179 179 Executive Director - Kirsty Flanagan Roads Change at 1 April 2022 to stop the use of Red Diesel in certain vehicles has resulted in an unavoidable increas in fuel costs in Roads and Infrastructure. 78 78 78 78 78 78 78 78 78 78 78 78 78 78 78 Council Wide Council Wide Rightsize budget for Council insurances which is a historic budget that requires to be increased in line with the current insurance costs. 414 414 414 414 414 414 414 414 414 414 414 414 414 414 414 Council Wide Council Wide General provision for unidentified Cost and Demand Pressures 0 0 0 0 0 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 TOTAL 1,182 1,377 2,220 2,144 1,584 1,498 2,168 3,794 3,518 2,908 1,814 3,229 6,698 5,122 4,462 Page 135
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SOCIAL WORK COST AND DEMAND PRESSURES - 2023-24 to 2025-26 APPENDIX 4 Service Cost/Demand Pressure 2023-24 £000 2024-25 £000 2025-26 £000 2023-24 £000 2024-25 £000 2025-26 £000 2023-24 £000 2024-25 £000 2025-26 £000 All Social Work Estimated Pay inflation reflecting a best case of 1%, mid range of 2% and worst case of 3%. 668 1,336 2,011 1,335 2,671 4,033 1,342 2,685 4,068 All Social Work Estimated Pay increments, best case is that 50% of the incremental changes based on 2022/23 are absorbed and in the mid-range and worst case, the increase is in line with the increase in 2022/23. 52 103 155 103 206 309 103 206 309 All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable inflation and worst case. 3,014 5,982 9,110 3,385 6,764 10,346 3,756 7,524 11,541 All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are recharged to Social Work. 96 196 302 105 217 334 105 217 334 Adult Care Younger Adults Demand Growth (Excluding 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. 170 342 516 341 689 1,044 511 1,038 1,582 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. 35 71 107 71 143 217 106 215 328 Adult Services Learning Disability Budget Adjustment - The Learning Disability Supported Living budget is carrying a recurring unbudgeted commitment of circa £743k which is contributing to the recurring overspend on the Social Work budget. To address this situation, it is proposed to realign the budget over the three year period from 2023/24 to 2025/26 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. 248 495 743 248 495 743 248 495 743 Adult Services Physical Disability Budget Adjustment - The Physical Disability budget is carrying a recurring unbudgeted commitment of circa £89k which is contributing to the recurring overspend on the Social Work budget. To address this situation, it is proposed to realign the budget over the three year period from 2023/24 to 2025/26 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. 30 60 89 30 60 89 30 60 89 Best Case Mid Range Worst Case Page 136
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Service Cost/Demand Pressure 2023-24 £000 2024-25 £000 2025-26 £000 2023-24 £000 2024-25 £000 2025-26 £000 2023-24 £000 2024-25 £000 2025-26 £000 Best Case Mid Range Worst Case Adult Services Mental Health Budget Adjustment - The Mental Health budget is carrying a recurring unbudgeted commitment of circa £197k which is contributing to the recurring overspend on the Social Work budget. To address this situation, it is proposed to realign the budget over the three year period from 2023/24 to 2025/26 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 and any additional funding provided to address mental health issues as a consequence of the COVID pandemic. 66 131 197 66 131 197 66 131 197 Children and Families Continuing Care demand for Looked After young people 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 form high cost external residential care to local foster and kinship care), the mid case reflects £250k per annum and the worst case reflects £500k per annum. 0 0 0 250 500 750 500 1,000 1,500 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 Adult Services Kintyre Care Centre - Potential cost pressure as a result of potential transfer of KCC facility to HSCP Management. 750 750 750 750 750 750 900 900 900 TOTAL COST AND DEMAND PRESSURES 5,378 9,966 14,730 7,184 13,626 20,312 8,417 15,971 23,841 Page 137
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 11 AUGUST 2022 SERVICE ANNUAL PERFORMANCE REVIEWS 2021/22 – FINANCIAL SERVICES COMMUNITY PLANNING & DEVELOPMENT LEGAL & REGULATORY SERVICES COMMERCIAL SERVICES CUSTOMER SUPPORT SERVICES 1.0 EXECUTIVE SUMMARY 1.1 The Council’s Performance and Improvement Framework (PIF) sets out the presentation process for regular performance reporting. This paper presents the Policy and Resources Committee (P&R) with the Service Annual Performance Reviews and Scorecard 2021/22 for the above Services. 1.2 It is recommended that the P&R reviews and approves the Service Annual Performance Reviews (Service APRs) and Scorecards 2021/22 as presented prior to publishing on the Council Website. Page 139 Agenda Item 6
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE CUSTOMER SUPPORT SERVICES 11 AUGUST 2022 SERVICE ANNUAL PERFORMANCE REVIEWS 2021/22– FINANCIAL SERVICES COMMUNITY PLANNING & DEVELOPMENT LEGAL & REGULATORY SERVICES COMMERCIAL SERVICES CUSTOMER SUPPORT SERVICES 2.0 INTRODUCTION 2.1 The Council’s Performance and Improvement Framework (PIF) sets out the presentation process for regular performance reporting. This paper presents the Policy and Resources Committee (P&R) with the Service Annual Performance Reviews 2021/22 and Scorecards for the above Services. 3.0 RECOMMENDATIONS 3.1 It is recommended that the P&R Committee reviews and approves the Service Annual Performance Reviews (Service APRs) and Scorecards 2021/22 as presented prior to publishing on the Council Website. 4.0 DETAIL 4.1 At the end of the financial year each Service presents a review that illustrates the positive contribution to our communities, the significant challenges and any consultations that the Service has carried out. 4.2 Case Studies contained within the review have been identified by Senior Officers and provide a broad range of imaginative and exceptional examples of service delivery throughout Argyll and Bute. 4.3 Each Service APR is supported by the Services’ year-end Scorecard and as expected due to the nature of service delivery the Service APRs differ in style and content. 4.4 Following approval of the Service APRs a selection of outstanding and informative examples will be collated for inclusion in the Council Annual Report 2021/22 in due course. 4.5 The Service Annual Performance Reviews and Scorecards 2021/22 are presented in the following order:- Page 140
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Chief Executive’s Unit Financial Services Community Planning and Development Legal and Regulatory Support Commercial Services Customer Support Services 5.0 IMPLICATIONS 5.1 Policy None 5.2 Financial None 5.3 Legal The Council has a duty to deliver best value under the Local Government in Scotland Act 2003. Publication forms part of our statutory Public Performance Reporting duty 5.4 HR None 5.5 Fairer Scotland Duty: 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 Ensures that all our performance information is reported in a balanced manner 5.8 Customer Service None Kirsty Flanagan, Executive Director with responsibility for Customer Support Services 13 July 2022 Policy Leads: Councillors Gary Mulvaney For further information contact: Jane Fowler, Head of Customer Support Services 01546 604466 Appendix 1 Service Annual Performance Reviews and Scorecards 2021/22 Page 141
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SERVICE ANNUAL PERFORMANCE REVIEW 1 NAME OF SERVICE: FINANCIAL SERVICES PERIOD: FINANCIAL YEAR 2021/22 1. DELIVERING OUR OUTCOMES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - People Live Active Healthier And Independent Lives Business Outcome BO102: We Provide Support, Prevention And Opportunities To Help People Make Better Lifestyle Choices a) £521,815 in Scottish Welfare Fund grants were paid to support vulnerable people. b) The average processing time for New Housing Benefit claims was 25.19 days and 4.41 days for changes in circumstances against targets of 21 days and 6 days respectively. c) £906,187 of Discretionary Housing Payments was distributed to households in need. d) We have paid out £269,950 in grants to cover food and fuel for people in poverty and successfully referred them for support to advice agencies. As at the year-end 1,007 families have been supported to maximise benefit income and reduced fuel costs to the value of £1.324m. e) Our Social Work Team successfully delivered two rates changes during the year in line with Scottish Government Policy to increase the basic pay of carers and personal assistants who look after adults in our communities. Corporate Outcome - Our Economy Is Diverse And Thriving Business Outcome BO110: We Support Businesses, Employment and Development Opportunities Success Measure: FIS110_01-Increase the total value of Non-Domestic Rates (NDR) relief awarded a) We worked alongside other Council colleagues to support the payment of £2.7 million to support local businesses, protect the local economy and jobs, prevent business closure and promote economic recovery as lockdown restrictions eased and businesses started to re-open. b) We awarded nearly £24.5 million of Non-Domestic Rates reliefs to support local businesses. Page 143
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SERVICE ANNUAL PERFORMANCE REVIEW 2 Corporate Outcome - Getting it right Business Outcome BO115: We Are Efficient And Cost Effective a) We have implemented a new Counter Fraud Team on a two-year pilot basis to enhance the Council’s zero tolerance to fraud and protect the public purse. During 2021-22 the team rebilled £659k as a direct consequence of their work and have recovered £572k of that total to date. b) We collected 96.28% of Council Tax exceeding the target of 96.00%. c) The External Audit of the 2020/21 Annual Accounts was completed by the statutory deadline and an unqualified Audit Certificate received. d) Positive External Audit Annual Audit Report received and reported to Policy and Resources Committee in December 2021. e) Financial monitoring packs were submitted to each Policy & Resources Committee. f) The average investment rate for 2021-22 was 0.418% compared to the average 7-day LIBID (London Interbank Bid Rate) rate of -0.74%. The investments generated £0.485m of interest in 2021-22. g) The Creditors Team processed 96.6% of invoices due within 30 days, exceeding the target of 95.5%. h) The Payroll Team processed the 2021/22 Teacher’s pay rise within 1 month of being notified of the pay settlement, one of the few Councils to do so by April 2022. i) The 2021/22 internal audit plan was fully completed and reported by the target date of the June Audit and Scrutiny Committee. j) The service closely monitored the financial impact of Covid on the Council throughout the year, regularly updating assumptions and projections, to ensure that the Convention of Scottish Local Authorities (COSLA) returns were robust, and the Council would receive the appropriate levels of Covid specific Scottish Government funding. Page 144
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SERVICE ANNUAL PERFORMANCE REVIEW 3 2. SIGNIFICANT CHALLENGES The significant challenges faced by the Service during 2021/22. These challenges either created specific pressures on the Success Measures or impacted on delivery. Specific additional activity or mitigating actions were carried out to reduce the negative impact on service delivery. Corporate Outcome - People Live Active Healthier And Independent Lives Business Outcome BO102: We Provide Support, Prevention And Opportunities To Help People Make Better Lifestyle Choices a) Due to financial impact of Covid on social care providers the Income Max team were under increased pressure to get contracts and payments to providers for delivering care home services. The Social Work Finance Team continued to deliver a financial sustainability scheme on behalf of the Scottish Government to provide financial support to local care providers to help them deal with the cost pressures placed upon them by the pandemic which is an ongoing piece of work. b) The 300% weekly increase in the volume of Self Isolation Support Grants (SISG) received from December 2021 through to April 2022 due to Omicron caused a significant challenge for the service. Benefit Assessor staff had to be redeployed to help with the administration of SISG and this introduced delays in processing Housing Benefit. The service therefore failed to process new claims for Housing Benefit in 21 days. We were unable to recruit additional Benefit Assessors locally to assist the service. Corporate Outcome - Our Economy Is Diverse And Thriving Business Outcome BO110: We support businesses, employment and development opportunities a) Significant resource requirement to administer a range of Covid related Business Support Grants which required redeployment of staff in Revenues and Benefits and Internal Audit and created increased pressure on Creditors and Treasury Management officers to manage the volume of payments and movement in funds. Corporate Outcome - Getting it right Business Outcome BO115: We Are Efficient And Cost Effective a) The service has continued to deliver business as usual whilst undertaking additional work to manage and report on the wide range of additional Covid funding provided by the Scottish Government to our front-line services. Page 145
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SERVICE ANNUAL PERFORMANCE REVIEW 4 b) During the year, the service started a project to implement a new financial management system to replace Oracle system which had been in place for several years and was reaching the end of its supported life. This is a substantial project which has been undertaken at pace to ensure that the new Oracle Fusion system is in place before the existing system must be decommissioned at the end of July 2022. c) The service has been actively involved with ICT in exploring the benefits which could arise from the analysis of the data which the Council holds to help identify vulnerable people who could benefit from support from the Council and/or our partners. We are also exploring how the data could be used to support evidence-based decision making and service provision. d) The Revenues and Benefits Teams administered the Argyll and Bute Flexible Food Fund with partners Bute Advice and ALIenergy. During the year, the Fund supported 1,000 to achieve a client gain of £1.325m and were highly commended by the Institute of Revenues Rating and Valuation at their annual performance awards in the category Excellence and Innovation (Service Delivery). e) The Revenues and Benefits Team worked in partnership with the Social Work Finance Team and colleagues in Adult Social Care to implement an improved process to support people entering care homes and their families through the assessment of their entitlement to funding towards their care home placement. 3. CONSULTATION AND ENGAGEMENT - WE ASKED, YOU SAID, WE DID…. The following are all the consultations and resulting actions that the Service has carried out during this period. a) We asked what could be done to reduce the numbers of people relying on foodbanks for support during the pandemic. Foodbank providers advised us through the Argyll and Bute Community Food Forum that more welfare rights and fuel poverty related support and advice for people with food insecurity attending the foodbanks would be beneficial. b) We continued to deliver the Argyll and Bute Flexible Food Fund which incentivises people in hardship to get this professional advice by making two monthly payments to families, the first one before the referral is made for professional support and the second one after the support has been delivered. This maximised engagement and helped find significantly more benefits for families in hardship. c) In response to increasing energy costs, we have built on the success of the Flexible Food Fund to introduce an additional support called Heat Your Home, Manage Rising Costs to work in partnership with advice agencies in the area to provide a joined-up support service for families living in fuel poverty. Page 146
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SERVICE ANNUAL PERFORMANCE REVIEW 5 d) We are engaging with the Scottish Government across several work streams aimed at supporting the sustainability of social care and reducing social care charges for service users. These are related to the proposed introduction of the National Care Service and a review focussed on a proposal to remove charging for non-residential care, both of which came out of the Review of Adult Social Care. Page 147
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SERVICE ANNUAL PERFORMANCE REVIEW 1 NAME OF SERVICE: COMMUNITIES PLANNING AND DEVELOPMENT PERIOD: FINANCIAL YEAR 2021/22 1. DELIVERING OUR OUTCOMES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - Getting it Right Business Outcome: BO116 We Engage and Work with Our Customers, Staff and Partners Success Measure: CPD 116_01 The information provided to our community groups, individuals and partners is easy to understand The Communities and Partnership Team send out regular information bulletins. A 2021/22 survey returned 272 respondents, of which 96% rated the information easy to understand. a) Information for Communities Bulletin: this bulletin developed from needs of community groups in 2020 to access information about Covid and volunteering safely, since then, it has expanded to include consultations, training opportunities, events and signposting to funding opportunities. It is sent fortnightly to over 300 community groups across Argyll and Bute and is well received. b) Funding Alert: The Funding Alert is issued monthly. The funders are organised into categories of funding streams, with details of eligibility criteria with hyperlinks to the funders webpages. Deadlines are helpfully highlighted. Over 1,500 people access funding alert each month either through direct e- mail receipt or via the webpage. We are currently working with our partners to support their engagement with our Funding Alert and funding search function on our webpage, as funding is a significant need arising for our community groups and third sector. Corporate Outcome - Getting it Right Business Outcome: BO116 We Engage and Work with Our Customers, Staff and Partners Success Measure: CPD 116_02 All issues raised at Area Community Planning Groups are considered and responded to by the Management Committee a) Issues raised at Area Community Planning Groups are put before the Management Committee as a matter of course. The target and benchmark of 100% of issues raised has been met. Page 150
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SERVICE ANNUAL PERFORMANCE REVIEW 2 This year issues raised were in relation to response to Covid and also to the climate emergency. A Climate Change working group was established, chaired by NatureScot on behalf of the CPP. The Community Planning and Development Team supported the group’s membership to develop and produced a webpage with information on climate actions undertaken by partners and community organisations across Argyll and Bute: Community Planning Partnership - Climate Change (argyll-bute.gov.uk) Corporate Outcome - People Will Live in Safer and Stronger communities Business Outcome: BO104 Our Communities are Supported and Protected Success Measure: CPD 104_01 Number of capacity building sessions held with community groups a) The number of capacity building sessions for 2021/22 was 217, not including a further 65 support sessions undertaken as part of the Supporting Communities Fund support to groups and organisations. There is a slight reduction on previous years due to unforeseen sickness absence impacting Community Development staffing. Capacity sessions, consist of support and advice based on needs arising for groups such as Community Led Action Plans, help to form links with partner organisations, matters arising from Covid response work in communities. Organisations supported included Crossroads Caring for Carers (B&C) Tiree Community Council, Dochas Centre and Kirkmichael Community Development Group. Corporate Outcome - People Will Live in Safer and Stronger Communities Business Outcome: BO104 Our Communities are Supported and Protected Success Measure: CPD104_02-Percentage of groups who say their effectiveness has increased as a result of capacity building the team a) 100% Groups responding to this annual review positively highlighted successful interaction with the Community Development Team. The community groups had a focus in 2021/22 of delivering Covid impact support to their communities and engaged with the Council’s Community Development Team for support and advice. Support included regular meetings, access to the Council’s wellbeing service through Health Assured to support resiliency of volunteers and funding advice. Our work to create the right conditions for community groups to be supported, and to empower community groups within their communities and in particular in response to Covid was recognised as an example of Best Practice within Audit Scotland’s Community Empowerment: Covid report: Support for local networking: Garelochhead Station Trust's experience during Covid — Communities Channel Scotland (communityscot.org.uk) Page 151
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SERVICE ANNUAL PERFORMANCE REVIEW 3 b) Training for Community Organisations The Community Development Team have sourced and delivered a range of training courses in response to identified needs within communities across Argyll and Bute: • The Community Development Team worked in partnership with the Third Sector Interface in May 2021 to deliver an ‘Introduction to Evaluation’ online training course to give community organisations tools and techniques to help explain the difference their work makes which is essential for reporting on and applying for funding. • In August 2021, the Community Development Team facilitated an online training session run in partnership with the Council’s Procurement Service to help community and third sector organisations learn about how to bid for public sector contracts. This interactive session offered hints and tips on the tender process, outlined the regulations and gave details of where to look for Council contracts. • A face to face ‘Equality and Diversity’ training course was successfully delivered for Trustees of Garelochhead Station Trust in March 2022. In addition we provided access to online ‘Equality and Diversity’ training module on the Council’s website. • The Community Development Team delivered training on ‘Community Asset Transfer’ in partnership with COSS (Community Ownership Support Service) in October 2021 covering the full transfer of ownership, the leasing of licensing and other uses of publicly-owned assets including assets owned by local authorities and public bodies. Corporate Outcome - People Will Live in Safer and Stronger Communities Business Outcome: BO104 Our Communities are Supported and Protected Success Measure: CPD104_03-Percentage of groups whose users say they have an increase in confidence or wellbeing a) 100% Responses from groups positively highlighted successful interaction with the Community Development Team. These groups had a focus in 2021/22 of delivering Covid impact support to their communities and engaged with the Council’s Community Development Team for support and advice. b) Case Studies: the positive contribution made to our communities and good service delivery in the form of Case Studies. Scotland’s Census 2022 The Community Development Team has supported staff from National Records for Scotland (NRS) to reach key population groups who have been identified as requiring additional support to complete the Census. This has included those on low incomes, people with disabilities, Gaelic speakers and veterans. Page 152
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SERVICE ANNUAL PERFORMANCE REVIEW 4 The team worked in partnership with Live Argyll and Argyll and Bute Third Sector Interface (TSI) to organise and host an Argyll and Bute specific session for community organisations interested in finding out how to support their service users and wider communities. During the final weeks of the extended census data collection period, NRS identified low return rates on Coll and Tiree. Community Development Officer for OLI, worked with the NRS Community Engagement and Enumerator teams and community leaders on the islands to identify occupied properties and holiday rentals or second homes, and to identify the best ways to reach these groups. Community groups rallied to raise local awareness of the census and ensure the needs of the island populations are represented as fully as possible. Ongoing engagement with Covid response groups During 2021/22, the Community Development Team continued to co-ordinate monthly meetings of the Covid Community Response Groups. These meetings brought together groups who supported the emergency response to the Covid pandemic in their communities, and who have been active in recovery. Members swapped experiences (whether of tough times or heartening successes), networked and shared practice, and the Community Development Team were able to provide support and updates, and respond to requests for information from the Council and Community Planning Partnership. For example, the team was able to offer group members’ staff or volunteers access to the Council’s ‘My Healthy Advantage’ app, which offers access to counselling and wellbeing services. An evaluation of the group showed that members had found it very valuable, reporting that support from the Community Development Team had increased the effectiveness of their organisations and that they in turn had seen an increase in confidence and wellbeing of their service users. During the emergence of the Omicron variant, groups reported difficulty in finding accurate information on the dates and locations of vaccination clinics. The team rapidly checked and circulated the up to date data, meaning that group members could help more vulnerable members of the community to attend clinics. On response to concerns about how to re-start community activities safely, Community Development officers also collated and shared information on free training opportunities on a range of relevant topics. Our work to create the right conditions for community groups to be supported, and to empower community groups within their communities and in particular in response to Covid was recognised as an example of Best Practice within Audit Scotland’s Community Empowerment: Covid report: Support for local networking: Garelochhead Station Trust's experience during Covid — Communities Channel Scotland (communityscot.org.uk) Micro-Grants to aid Post-Covid Recovery The Community Planning and Development Team, on behalf of the council, developed and ran a micro-grant fund to meet needs arising post in the summer of 2021. 63 Village Halls and community organisations were awarded up to £500 to aid recovery of their facilities or organisations activities after the Covid pandemic. Applications underwent a robust assessment to confirm eligibility and fit with Covid recovery criteria. Applicants offered an award demonstrated how their project will help communities to recover from the impacts of Covid. Page 153
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SERVICE ANNUAL PERFORMANCE REVIEW 5 Support for community engagement with Community Planning Partnership Climate Change group The Community Development Team supported increased engagement with the CPP’s Climate Change working group from community groups and Development Trusts. These participants are helping to shape the group’s engagement plans and sharing good practice from community-led climate action across the region. The team also helped identify regional leads for the four Area Community Planning Groups (ACPG) and encouraged community organisations to share their projects and progress at the ACPGs and through the Climate Change signposting page. 2. SIGNIFICANT CHALLENGES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - People Will Live in Safer and Stronger Communities Business Outcome: BO104 Our Communities are Supported and Protected Success Measure: CPD 104_01 Number of capacity building sessions held with community groups a) There was limited staff resource available due to significant long term absences with 50% of the Community Development Team and the induction of new members of staff within the overall team took time to embed. Support to community organisations has continued during this time, with resources being dedicated to support the Covid response and the delivery of targeted projects including the Micro Grants Fund for village halls and community organisations. Elements of this targeted support have not been reflected within this quantitative measure. The delivery of capacity building support to develop the skills and confidence of communities across Argyll and Bute, continues to be a priority for the team. • In conjunction with Community Learning and Development Partners, the Community Development Team are undertaking a training needs analysis with community groups. Working in partnership enables the service to meet any fluctuations in staffing due to unforeseen absence and associated impacts on community organisations. 3. CONSULTATION AND ENGAGEMENT - WE ASKED, YOU SAID, WE DID…. Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. a) In 2021, we ran a Community Gaelic Research Survey to understand Scottish Gaelic needs and requirements across Argyll and Bute from people with no knowledge of Gaelic as well as for fluent speakers. Under the National Gaelic Plan, there should be more opportunities for communities and networks of Gaelic speakers of all kinds to use Gaelic and increased use of the language in community activities and services and the survey, together with the Argyll Gaelic Gathering, held in 2022 supported that aspiration. Page 154
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SERVICE ANNUAL PERFORMANCE REVIEW 6 The Community Gaelic Research Survey had 1,300 respondents. The responses helped frame the priorities for a programme of work to be led by the Gaelic Development Officer working in partnership with communities and partners. This includes: • Support for the development of community hubs where Gaelic can be shared • Need for the provision of information and raising awareness of resources available to help learners Full details of the survey response can be found on the council ‘You said, We Did’ page. b) The Argyll Gaelic Gathering consisted of three events and also an art project. Adults and young people across Argyll and Bute and Scotland were involved. The Argyll Gaelic Gathering was supported with funding from Bòrd na Gàidhlig. The Gathering is a commitment by Argyll and Bute Council as part of their Gaelic Language Plan and aims to be delivered every two years. The organisation of the Gathering was led by the Council’s Gaelic Development Worker (a post jointly funded by the Council and Bòrd na Gàidhlig) and was the product of a collaborative working group which included Argyll and Bute Council, Comunn na Gàidhlig, CHARTS, Fèisean nan Gàidheal, Furan Gaelic Centre, Helensburgh Gaelic Group and Ionad Chaluim Chille Ìle. Page 155
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SERVICE ANNUAL PERFORMANCE REVIEW 7 c) Community Planning and Development Information Survey - Our team supports community organisations and community planning partners. In doing this we send information through regular e-bulletins (Community Development, Funding, Community Planning, Gaelic) and we provide information on queries about Community Empowerment and Community Development (Assets, Participation Requests). We also provide information on general funding and training opportunities, and on how to take things forward in community and partnership projects such as developing action plans and engaging to develop these. We surveyed the recipients of our various bulletins to ensure that the information we provide is easily understandable we and received 272 responses. 96% of respondents agreed that the information provided by the team is easily understandable. d) The Community Development Team, Live Argyll and Argyll Third Sector Interface created a training needs survey for community organisations. The survey will help us to understand what training groups need to deliver the best possible support and services to communities across Argyll and Bute. Additional insights on the needs of Gaelic language speakers and of social enterprises were provided by colleagues within the Communities and Partnerships team. The survey is due to go live on the 10th June 2022 and the results will be used to shape our training programme. Page 156
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SERVICE ANNUAL PERFORMANCE REVIEW 1 NAME OF SERVICE: LEGAL & REGULATORY SUPPORT PERIOD: FINANCIAL YEAR 2021/22 1. DELIVERING OUR OUTCOMES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - People Live Active Healthier And Independent Lives Business Outcome BO102: We Provide Support, Prevention And Opportunities To Help People Make Better Lifestyle Choices Success Measure: LRS102_01-Advice and assistance from Welfare Rights is provided to Clients to ensure they maximise their income. a) We worked with service partners to deliver the redesigned advice service to cope with demand from vulnerable and non-vulnerable clients. Advice and assistance from Welfare Rights is provided to Clients to ensure they maximise their income. We achieved 99.2% of targets despite difficult delivery. Corporate Outcome - People Will Live In Safer And Stronger Communities Business Outcome BO104: Our Communities Are Protected And Supported a) The Trading Standards Team initially maintained a reactive presence, which, as restrictions allowed moved to a proactive planned approach. This despite Covid impacts allowed the Team to deal with a high proportion of all premises identified as high risk. b) Developed the Community Safety Partnership Strategy 2021-2023 which underpins the Argyll and Bute Outcome Improvement Plan and sets out strategic priorities in relation to: • We live in a safe and positive community • We encourage safer road and water use • Our natural and built environment is protected • Our communities are supported and included It also identifies how key partners including the Council, Police Scotland, Scottish Fire and Rescue Service, HM Coastguard, Health & Social Care Partnership (HSCP), Third Sector Interface (TSI) and local groups will bring together resources to ensure that Argyll and Bute is a safer place to live, work and visit. Page 159
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SERVICE ANNUAL PERFORMANCE REVIEW 2 Corporate Outcome - Our Economy Is Diverse And Thriving Business Outcome BO110: We support businesses, employment and development opportunities a) The Procurement, Commercial and Contract Management Team provided a strong lead to ensure we continued the percentage of Council spend that is under a contract or service level agreement while also maintaining the percentage of all Small Medium Enterprises that win council contracts. We also worked to improve the delivery of contract management on all high risk contracts. We effectively planned and coordinated the release of tenders to avoid overwhelming the market, in particular the local market – by issuing invitations to tender where the regulations allowed. For 2021/22, we awarded 151 contracts and of these 119 were Quick Quotes (ITQ’s). Our procurement processes were simplified and streamlined, ensuring that documentation was as straightforward as possible and engaged with local Economic Development colleagues and other collaborative stakeholders, to support emerging priorities that will support the economic recovery within Argyll and Bute. The percentage of total bids by and contracts awarded to local and SME suppliers is monitored monthly, however, not all requirements can be fulfilled by the local supply market. To gain a better understanding of performance, the number of tenders bid for and subsequently won by local suppliers is also monitored and detailed below. 2021/22 - Total No. of Tenders 2021/22 - Total receiving local bids 2021/22 - Total won by local bidders 2021/22 % Success Rate 151 51 40 78.4% The level of local spend was monitored in 2021/22, and the overall percentage with our local suppliers was 29.9%. The team recognises the strategic importance of maximising the economic benefits from directing Council spend to local businesses in terms of benefiting the local economy. Whilst it would not be acceptable to give preference to local businesses during any particular procurement, efforts are made to ensure that local businesses are upskilled so as to have the greatest chance of being successful in winning Council and other public sector business. Argyll and Bute Council took part in the Meet the Buyer: Live Virtual Event on 8th June 2021. Page 160
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SERVICE ANNUAL PERFORMANCE REVIEW 3 b) Civic & Liquor Licensing- we put in place arrangements for continuing to deliver the civic and liquor licensing functions including the holding of virtual Board meetings and a system for the fast tracking of occasional applications for the licensing of outdoor areas. The tri-annual review and renewal of Civic licensing fees took place during 2021/22 and revised arrangements were put in place to facilitate this. c) As part of the continuing easing of lockdown measures, agreements were put in place to enable businesses to utilise public spaces identified by the Council Corporate Outcome - Getting it right Business Outcome BO115: We Are Efficient And Cost Effective a) Delivered 1 local by-election during 2021/22 , a Scottish Parliamentary Election and worked to delivering the Local Government Election in May 2022 all while continuing to meet the electoral performance standards as set by the Electoral Commission. New processes, risk assessments and procedures were devised and implemented to meet Covid-19 responsibilities while delivering a successful outcome. b) Increased Elected Member Transactions through paperless processes e.g. improved iPad functionality, arrangements for on-line surgeries and on-line expenses. These arrangements and technological developments facilitated the move to virtual ways of working throughout the year and supported the continued functioning of committees and Elected Member decision making and operating processes throughout the year which placed a heavy reliance on harnessing technology and new ways of working. c) Development and Delivery of on-line/ virtual programme of seminars and training events to support Elected Member Development, Elected Member Induction and Election Administration and Delivery. d) Supported key Council services to improve process and response times to Elected Members' enquiries through Casebook, the electronic case management system used by Elected Members to record and manage constituent enquiries. e) Review of the Charitable Trusts and Bequests and Trust Funds to simplify and update processes where possible and ensure ongoing compliance with charity regulations and the original terms of the bequests. The review took cognisance of the fact that a large number of the charitable funds managed in trust by Area Committees were established many years ago, and as a consequence of changes in society over time the intended beneficiaries of the bequests are no longer easily identified. f) Provided a strong Governance presence which allows the Council to continue to meet target response times where possible for Freedom of information requests, subject Access Requests and complaints resolved at Stage 1. All of which have been impacted by Covid and high volumes of requests. Page 161
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SERVICE ANNUAL PERFORMANCE REVIEW 4 g) The review and improvement programme of Pecos, which aids the user experience, increase PECOS usage, improves control arrangement, governance and contracted spend. Corporate Outcome - Getting it right Business Outcome BO116: We Engage And Work With Our Customers, Staff And Partners a) Continue to lead the Council’s Tactical Group and provided a co-ordinated response across Legal & Regulatory Support Teams who lead on Health & Safety and the implementation of Council Wide suite of emergency and resilience plans throughout 2021/22 presence which allows the Council to continue to meet its ongoing obligations. b) Extended the Customer Service Excellence Award to include all aspects of the Legal and Regulatory Support service. Accreditation was achieved with a number of additional criteria being upgraded to compliance plus. Achievement of this nationally recognised external accreditation demonstrates our commitment to positive and constructive relations ships with customers and partner and how we use this to drive continuous improvement in our services. c) The Governance Team extended the provision of governance and committee support to the Integrated Joint Board and the meeting reports and minutes for key strategic committees are all hosted on ModGov. In addition arrangements were put in place to support virtual meetings and undertake recorded sessions which are also posted on ModGov. 2. SIGNIFICANT CHALLENGES The significant challenges faced by the Service during 2021/22. These challenges either created specific pressures on the Success Measures or impacted on delivery. Specific additional activity or mitigating actions were carried out to reduce the negative impact on service delivery. Corporate Outcome - Our Economy Is Diverse And Thriving Business Outcome BO110: We support businesses, employment and development opportunities a) Additional requirement at short notice to administer 3 separate Taxi Support Fund tranches in addition to business as usual. Required new forms, procedures and appeals process with around 250 plus applications dealt with. All processed and paid within the deadline. Page 162
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SERVICE ANNUAL PERFORMANCE REVIEW 5 Corporate Outcome - Getting it right Business Outcome BO115: We Are Efficient And Cost Effective a) Delivered 1 local by-election during 2021/22 and Scottish Parliamentary election while continuing to meet the electoral performance standards as set by the Electoral Commission. New processes and procedures were devised and implemented to meet Covid-19 responsibilities while delivering a successful outcome. This was completed while the Election Team were also putting arrangements in place for the Local Government Election in 5th May 2022. A significant volume of works was undertaken in relation to the planning arrangements. Business Outcome BO116: We Engage And Work With Our Customers, Staff And Partners b) Review and redevelop the Elected Member Induction Programme ahead of the 2022 local government elections. The Elected Member induction programme underwent a review based on feedback arising from the previous local government elections and this provided the basis for the development of a virtual programme to support election of three new Councillors during 2021/22. 3. CONSULTATION AND ENGAGEMENT - WE ASKED, YOU SAID, WE DID…. The following are all the consultations and resulting actions that the Service has carried out during this period. a) A review of Taxi Fares was conducted during 2021/22. In terms of Section 17 of the Civic Government (Scotland) Act 1982, the Local Authority requires to fix maximum fares and other charges in connection with the hire of taxis operating in their area and to review the scales for taxi fares and other charges on a regular basis. The review process commenced in summer 2021 and as a result it was proposed that there would be increases to the existing scales. This was advertised with responses invited within a month. Adverts were placed in local newspapers with a deadline given for any responses. After review of the responses the Head of Legal & Regulatory Supports and the Chair of the Planning, Protective Services and Licensing Committee (PPSL) agreed subsequent increases to the current fares. b) Procurement, Commercial and Contract Management Team conduct regular Customer and Supplier Surveys. The feedback from our Customers on previous surveys was very positive in areas such as obtaining advice and assistance, awareness of contracts available and goods or services accurately corresponded to requirements. The feedback from our Suppliers was also positive with an increase in supplier satisfaction in knowing where to find contract opportunities, clearly defined performance measures, attending regular meetings to ensure effective contract delivery and happy with the way the Council engages with their business over the term of the contract. c) Procurement, Commercial and Contract Management Team carried out wide consultation on the Council’s Procurement Strategy – received wide ranging responses and addressed each one in reporting to Council on refreshed Strategy. Page 163
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SERVICE ANNUAL PERFORMANCE REVIEW 1 NAME OF SERVICE: COMMERCIAL SERVICES PERIOD: FINANCIAL YEAR 2021/22 1. DELIVERING OUR OUTCOMES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - Children and Young People have the Best Possible Start Business Outcome 107 The Support And Lifestyle Needs Of Our Children, Young People And Their Families Are Met CATERING AND CLEANING a) The Council continues to offer fresh, healthy and sustainable school lunches, and hold the Soil Association Scotland’s Bronze Food for Life Served Here award. This award is a widely respected and independently assessed scheme, supported by the Scottish Government, which helps local authorities to source food from the local area for school meals so that children benefit from freshly prepared, sustainable meals. It recognises Councils that serve food made from fresh ingredients, free from genetically modified ingredients and undesirable additives, using free-range eggs and high-welfare meat. The catering service serves 4,300 Food for Life accredited meals a day. b) The Catering Department has implemented a new menu compliant with the requirements of the Food and Drink in Schools (Scotland) Regulations 2020. This means our pupils are receiving a nutritious meal, lower in sugar, a decrease in red meat and an increase in fruit and vegetables. There are also changes to the permitted products in secondary schools and a change to how the secondary meals are analysed. c) The Catering department had a surveillance audit for continued accreditation for ISO 9001:2015. d) The Catering and Cleaning Innovations projection was successfully completed, which led to a redesign of the service that will be fit for future purpose and will assist in the services continuing to provide a service for our children and young people. e) In January 2022, P4 and P5 children were included in the provision of Universal Free School Meals. This has been successfully implemented throughout Argyll and Bute. f) Successful implementation of the new allergen legislation resulting in full compliance by the implementation date in all our secondary schools. g) The Beach Café in Oban has opened and is being run by Argyll and Bute Council Catering Department. This has been a hugely successful operation, and has proved popular with visitors and locals, and is used extensively by users of the centre as well as special catering provision. Page 166
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SERVICE ANNUAL PERFORMANCE REVIEW 2 h) Positive recovery of events as we begin to emerge from the pandemic. i) Argyll and Bute Council were awarded the Footprint Foodservice award for the Community Food Project. Corporate Outcome - We Have An Infrastructure That Supports Sustainable Growth Business Outcome BO113:Our infrastructure is safe and fit for the future ESTATES a) During 2021/22 the Estates Section met its targets for marketing properties identified as ‘held for sale’ and delivered significant capital receipts disposing of properties to meet the longer term capital targets. This not only generates income to be reinvested in the wider priorities of the Council but also reduces ongoing running costs, maintenance and insurance risk in addition to providing accommodation for new enterprises to develop. A good example of this was the disposal of Blairvadach House and grounds which generated a capital receipt and also transferred a listed building to a developer which reduced the Council’s risk exposure and will bring the property back into beneficial use. MAJOR PROJECTS Success Measure: COM113_03-The Council's Capital Plan is delivered within the approved budget tolerances as at the investment decision stage In the Reporting Year, 5 projects, from the Council’s Capital Plan, were being delivered by the Programme and Project Management Services Team within Commercial Services i.e. b) Oban Transit Berthing Facility (OTBF) – Practical Completion Achieved and Facility Operational. Closing out remaining defect, following appointment of specialist marine engineering consultant to review, assess and report on root cause and mitigation. c) Rothesay Pavilion Adaptive Restoration (RPN) – Original Contractor entered into Administration. Services of replacement Tier 1 Contractor secured, Robertson Construction Central West, for the delivery of Phase 1 Pre-Construction Activities, and Phase 2 Construction Works to Completion. Due to emerging cost/budget issues, the Phase 2 Construction Works are currently on hold whilst additional capital funding support is sought. d) Helensburgh Waterfront Development (HWD) – Main Contract Awarded to Heron Bros Ltd on 14 July 2020 with works commencing on site in August 2020. Section 1 works i.e. the construction of coastal flood defences, car parking and public realm, and new Leisure Building are well advanced, and on programme to be handed over to the Council on 29 July 2022. e) Kilmory Business Park – a joint public (Argyll and Bute Council) and private sector (M&K MacLeod Ltd) development to provide the area with a new facility is being progressed, supported by funding contributions from the Scottish Government Regeneration Capital Grant Fund; Argyll and Bute Council; Highlands and Islands Enterprise; and M&K MacLeod Ltd. The Planning application has been submitted and validated, the funding from the Page 167
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SERVICE ANNUAL PERFORMANCE REVIEW 3 Scottish Government has been secured, and we are in the process of finalising the various legal agreements (funding, construction, land/property/access rights etc.) to facilitate the delivery of the works later in FY22/23. f) Lochgilphead Front Green – providing project management support and mentoring to the Projects and Renewables team within Development and Economic Growth for the delivery of significant public realm improvements in Lochgilphead, with the project programmed to achieve Practical Completion in FQ1 FY22/23. Success Measure: COM113_04-The Council's Capital Plan is delivered on time. In the reporting year, 4 projects from the Council’s Capital Plan were being delivered by the Programme and Project Management Services Team within Commercial Services a) Oban Transit Berthing Facility (OTBF) – Closing out remaining defects: b) Oban Maritime Visitor Facility (OMVF) – Project being formally closed out, following on from which some additional works will be implemented. c) Rothesay Pavilion Adaptive Restoration (RPN): Main Contractor in Administration, with works 70% Complete. Replacement Contractor to be procured for works required to achieve Practical Completion. • Original Forecast Completion – FQ2 FY19/20 • Revised Forecast Completion – TBC subject to positive resolution of funding shortfall d) Helensburgh Waterfront Development (HWD) – Main Contract Awarded on 14 July 2020 to Heron Bros Ltd, construction works have commenced on site. • Original Forecast Completion – FQ4 FY22/23 • SECTION 1 Practical Completion – 29 July 2022 • SECTION 2 Practical Completion – FQ4 FY22/23 PROPERTY SERVICES a) The Property Maintenance Team’s continued partnership approach to term maintenance contracts has resulted in locally based contractors being awarded contracts resulting in significant benefit to the Argyll and Bute economy. In addition, training and employment opportunities are being provided to Argyll and Bute residents through the community benefit requirements of these contracts. b) Working in conjunction with colleagues in the Education Service, the Council’s Property Design Team substantially delivered projects in Early Years settings to allow the provision of 1140 hours of pre-school education. Page 168
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SERVICE ANNUAL PERFORMANCE REVIEW 4 c) Combinations of the Energy & Building Services Team and the Property Maintenance Team have again successfully delivered the emergency, planned and statutory maintenance programmes associated with the £2Million+ annual/revenue Central Repairs Account. For 2021/22, additional challenges have included the additional costs associated with COVID and earlier processing dates to meet the end of financial year deadlines resulting from the proposed upgrading of Council financial systems. Business Outcome BO114 Our Communities are Cleaner and Greener PROPERTY SERVICES a) The Energy & Building Services Team utilised the Non-Domestic Energy Efficiency Framework (NDEEF) to invest £1.2m in carbon friendly energy solutions (LED Lighting, Air Source Heat Pumps, Solar PV panels) which will provide the Council with a simple payback on the investment of 10 years. As a result the Council’s carbon footprint will reduce by circa 460 Tonnes/annum. Most ‘mini-projects’ have been delivered with a modest balance scheduled to be implemented at the start of the 22/23 delivery year. b) The Energy & Building Services Team accessed £60K grant funding to support internal Fleet colleagues with the installation of Electric Vehicle charging points – 14 no. individual charging points across 5 properties. c) The property Maintenance Team continued to take opportunities to improve insulation and replace single glazing with double glazing while carrying out normal building maintenance to our properties. Corporate Outcome - Getting It Right Business Outcome BO115 We are Efficient and Cost Effective PROPERTY SERVICES a) Agreement was reached to review the staffing and team structure within Property Services. This had a particular focus on the reorganisation of the Major Projects Team and Property Services given the opportunities for synergies and enhanced programme management whilst refocusing towards contract management, client management and climate change priorities. These structural changes will be implemented/delivered during 2022/23. b) The Energy & Building Services Team commenced a large-scale project to review water, waste water and drainage charges for the whole Council. While at an early stage, a Council target to save £25K-£50K per annum was achieved during 2021/22 and further savings opportunities are being explored for delivery in 2022/23. Page 169
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SERVICE ANNUAL PERFORMANCE REVIEW 5 Business Outcome BO116: We engage and work with our customers, staff and partners ESTATES a) An innovative project which was completed in 2021/22 was the lease of a derelict site at Lochside Street, Oban. The ground had been vacant for some time and there were title concerns but after extended marketing a lease was agreed for a garden centre with a rooftop bar based on a temporary building structure. This generated a good income, redeveloped a derelict but central site and also generated new employment opportunities. b) Marketing a former schoolhouse on Islay during the pandemic was always going to be a challenge. However using a combination of marketing on Rightmove, video tours and staff visiting the island the school house was sold in 2022 with a local family acquiring it which also supports the challenges of housing in our island communities. c) Part of the team’s role under the One Council approach was to take on more valuation work internally which makes savings for the council and also builds the knowledge and experience of the team. During 2021/22 the team completed the annual update of the asset valuation programme which is regulated by the terms and conditions of engagement with Finance as the client department. Team members were able to attend CIPFA and RICS courses as part of this learning experience and also utilise an online training facility (asset valuation circle) to develop wider knowledge which will benefit the individuals involved. d) Working with partners is a key component of an estates management service but it can also be challenging as the Council has a number of interactions with partners and not all are to deliver good news. However over the last 12 months the team have worked well with large landowners such as Argyll Estates and Luss Estates along with developing key relationships with ACHA and Fyne Homes who deliver social housing in the area. This has led to long running issues around car park leases and civic amenity sites being resolved along with progressing development schemes with the housing associations. Page 170
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SERVICE ANNUAL PERFORMANCE REVIEW 6 2. SIGNIFICANT CHALLENGES The significant challenges faced by the Service during 2021/22. These challenges either created specific pressures on the Success Measures or impacted on delivery. Specific additional activity or mitigating actions were carried out to reduce the negative impact on service delivery. Corporate Outcome - Children and Young People have the Best Possible Start Business Outcome 107 The Support And Lifestyle Needs Of Our Children, Young People And Their Families Are Met CATERING AND CLEANING a) Delivering an enhanced cleaning service has been challenging as prior to the pandemic the cleaning standards in schools and offices was already at the lower end of acceptable. Limited logistics funding has enabled some enhanced cleaning to be delivered in schools however this is not sustainable in the long term without committed funding and permanently increased hours. b) The Soil Association have implemented a new inspection portal which has meant the reaccreditation process is extremely challenging. c) The service has continued to prepare for the roll out of UFSMs for P6 and P7s, breakfast and holiday provision. This has been challenging due to lack of clarity on budgets, information and resources to continue with the implementation. d) In addition to price increases there have been on-going supply issues in the food industry. e) Continued recovery of commercial catering and events income. The increase in events is promising but will need continued support and nurturing to continue and increase. Corporate Outcome - We Have An Infrastructure That Supports Sustainable Growth Business Outcome BO113: Our infrastructure is safe and fit for the future ESTATES a) During the last 12 months the wider economy has suffered and this has in turn put pressure on local and national businesses. It is anticipated that this will remain a challenge for some time and this will have an ongoing impact on the ability of businesses to meet ongoing commitments such as rental payments. In addition the pressure on finances has led to less investment and developers looking to progress with projects which has impacted on capital receipts and the progress of development schemes. There is also pressure on the supply of building materials which is causing construction cost price inflation which may make development schemes unaffordable. Finally there has been a noticeable increase in the workload of the team in Page 171
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SERVICE ANNUAL PERFORMANCE REVIEW 7 the last 2 years which can be challenging for a small team to meet and lead to a firefighting approach which increases the risk of incorrect decision making. b) The Council’s insurers identified in 2021 that a revaluation of the full property portfolio is required. This is a significant task and relies on property data which has been highlighted as being of variable quality across the asset base. It will be a challenge for the team to complete this along with other tasks. c) A number of large property projects have been moving forward at the same time and while this is positive from the wider council viewpoint it will be increasingly challenging for a small team to progress this in addition to the day to day workload. Additional external support has been procured but the time taken to complete the procurement and management of the consultants also requires to be factored into the demand on the team. MAJOR PROJECTS Success Measure: COM113_03-The Council's Capital Plan is delivered within the approved budget tolerances as at the investment decision stage. Success Measure: COM113_04-The Council's Capital Plan is delivered on time. a) Rothesay Pavilion Adaptive Restoration - Following the insolvency of the Main Contractor (CBC) in Mar-20 the Council procured the services of Robertson Construction Central West, through the SCAPE Procure National Construction Framework, to deliver: (1) Pre-Construction Activities i.e. develop a Schedule of Activities and Tendered Price to take the project through to Practical Completion. b) In December 2021 the Council was advised that the cost of completing the works would significantly exceed the available and approved budget, by some £12million. At that point the Council took the decision to ‘pause’ the works at the end of the Pre-Construction Activities, and to lobby for additional capital funding support from external organisations, including the Scottish and United Kingdom Governments. c) The Project Team, including the Design Team, Cost Consultants and the Contractor, are developing proposals for interim works, which might be delivered within the remaining available budget, and which would help protect the significant investment already made in the building. d) Project Affordability – given the unprecedented impact of recent global events e.g. COVID-19 Pandemic, the UK withdrawal from the EU, and most recently the Russian invasion of Ukraine, national and global economies have been adversely affected, and the cost of construction materials, equipment, plant, and resources has risen significantly. This raises significant issues for the on-going delivery of capital works projects at a time when not only is the Council’s capital budget being reduced, but also its ability to finance the cost of borrowing, using revenue funding, is also being reduced. Page 172
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SERVICE ANNUAL PERFORMANCE REVIEW 8 PROPERTY SERVICES a) Irrespective of whether works/contracts are funded from revenue or capital, we continue to have access to only a limited number of contractors. This creates difficulty in delivery of programmes of work especially where availability of sites is restricted such as school holiday periods. Additionally, our contractors are suffering from the nationwide skills shortage and again this causes difficulty in being able to deliver a service within the desired timescales. b) The annual revenue Central Repairs Account continues to be under pressure across all services to conduct essential maintenance. There are however particular ‘hotspots’ ( Depots, HSCP, Airfields) where funding allocations are below that required to limit H&S risks and maintain business continuity. Business Outcome BO114 Our Communities are Cleaner and Greener PROPERTY SERVICES a) The significant progress that has been made in reducing the Council’s property-related carbon footprint has primarily been as a result of dealing with the more straightforward and cost effective solutions. The journey to net-zero requires the delivery of more complicated solutions which are more costly and there is challenge in balancing the need for carbon reduction at a time when budgets/resources are reducing. b) Many areas within Argyll and Bute are off gas grid and the electrical grid has limitations in terms of capacity/constraints. These issues continue to impact on the Council (and the wider community) in terms of resilience and delivering renewables solutions, EV charging etc. Corporate Outcome - Getting it Right Business Outcome BO115 We are Efficient and Cost Effective PROPERTY SERVICES a) Elements of the Property Team had longer-term staffing shortages during the year. This made service delivery particularly challenging but it is anticipated that this will be resolved during 2022/23. 3. CONSULTATION AND ENGAGEMENT - WE ASKED, YOU SAID, WE DID…. Please list all consultations and resulting actions that the Service has carried out during this period. NO CONSULTATIONS TOOK PLACE. Page 173
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SERVICE ANNUAL PERFORMANCE REVIEW 1 NAME OF SERVICE: CUSTOMER SUPPORT SERVICES PERIOD: FINANCIAL YEAR 2021/22 1. DELIVERING OUR OUTCOMES Our case studies help illustrate the positive contribution the Service has made to our communities and provides examples of good service delivery. Corporate Outcome - People Live Active, Healthier and Independent Lives Business Outcome BO101 We Ensure Information and Support is Available for Everyone a). Success Measure: CSS101_01-Improve the accuracy rate for registration for our births, deaths and marriages by the council’s Registration Service. The National Records of Scotland independently audit all council registration services for accuracy of registration and look back on the previous full year, hence in 21/22 they examined the registrations for 20/21. Our target was to have to have no more than 2.1% error rate, but the actual audited rate was 3.5%. However it must be remembered that the target was set before the Covid pandemic struck. That pandemic resulted in massive operational changes for registrars; including the remote recording of Death Registrations, a torrent of new Covid related registration regulations to absorb and excess death workloads that put the service under tremendous strain; including at times the introduction of 7 day working and post lockdown surges in pent up wedding demand. Hence a total of only 80 errors across 2,315 registration events was regarded by the independent Examiner as an excellent performance. The Registrars speedily adopted both remote digital Death Registration service and virtual Citizenship Ceremonies (Brexit led to a spike in demand for them too). They also adapted the Tell Us Once death notification service for 1,124 customers, put in place a new appointment based face to face service for Birth Registrations, used the Marriage Website, social media and a digital Wedding Diary to inform and accommodate those seeking weddings and civil partnerships. In the most recent customer Satisfaction Survey in FQ3/4 of 2021/22 97% of 127 respondents were Very Satisfied with the registration service provided. In addition many of the Registrars (who also staff our Customer Service Points) were also deployed to undertake the pro-active support calls to those customers required to self-isolate by Covid regulations. Between October 2020 and end of April 2022 6,128 self-isolating customers were contacted and offered domestic or financial support. Of these 2,925 submitted claims for the £500 Self Isolation Support Grant. A number were referred to Community Groups for domestic or transport assistance. In November and December 2021 the Customer Service Points/Registration resource also provided emergency assistance to NHS Highland to help them cope with customer contacts regarding the Vaccine Booster Programme. In a four week period they handled 2,738 enquiries for the Vaccination Hub and helped NHS Highland meet its target of having over 80% of over 18 year olds offered a vaccination by the end of December. Page 176
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SERVICE ANNUAL PERFORMANCE REVIEW 2 b). Success Measure: CSS101_02-Increase public use of corporate social media sites on three categories of information: council news, community success and general use. Our success measure was to increase the percentage of corporate social media sites. During the period we responded to 700+ media enquiries, issued 220+ media releases, 50 weekly new round up subscription emails, 50+ staff Newsflash emails, posted up to three times a day across various social media channels. We increased our social media following to: Facebook = 17,000+; Twitter = 15,000+; Instagram = 7,000+; Linkedin = 3,600+ c). Success Measure: CSS101_03 Increase the percentage of telephony enquiries received by Customer Service Centre that are dealt with at first point of contact. The Contact Centre agents handled over 152,000 enquiries from customers in 2021/22 and 112,000 were by telephone. The aim of the CSC is to resolve as many of these calls there and then either by fully providing the information or service requested, or by logging a request for service for action by the relevant council team. This allows operational staff to focus on service delivery without being distracted by constant phone calls. The target was to resolve 82% of phone enquires without transfer to the back offices, but it actually achieved 94.4%. In addition to this the council’s ongoing investment in 24/7 voice automated services continued to deliver excellent results, with 8919 customers making automated payments (worth £1.63m) and 41,605 uses of the automated directory. The Coronavirus Helpline was also used 1501 times in 2021/22. Contact Centre technology has been deployed to the HR Team and Scottish Welfare Fund Team to help them manage call demands effectively and in 2021/22 a new rolling program of call quality evaluation was introduced called Agent Evaluation so that qualitative as well as quantitative management was tracked and used for continual improvement. The whole CSC system was upgraded to the latest “Liberty Converse” version with greatly enhanced real time monitoring dashboards. Corporate Outcome - Our economy is Diverse and Thriving Business Outcome BO112 Argyll & Bute Is Promoted To Everyone. a).#abplace2b campaign Purpose - promote the lifestyle and career opportunities on offer, to attract new residents and skills How? - develop and encourage public/partner use of #abplace2b on social media, develop www.abplace2b.scot to showcase the area, jobs on offer, local businesses, lifestyle etc.. Progress - Partners and public are using #abplace2b. Our #abplace2b Instagram account is the most followed of all of Scotland’s councils. Partner use of #abplace2b continues to grow Page 177
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SERVICE ANNUAL PERFORMANCE REVIEW 3 Continued to increase use of #abplace2b as a budget-free way of promoting Argyll and Bute as a great place to live and work; this is based on promoting the great lifestyle the geography of Argyll and Bute allows for, and which sets the area apart from other locations. Members of the public and partner agencies are increasingly using it. This will be complemented and developed by www.abplace2b.scot, which we are updating for relaunch in 2022. b). Community life - responsible staycation tourism In response to community concerns as tourism opened up after Covid restrictions, we developed and promoted our ‘Have a great time. Be a great visitor’ message and campaign, bringing together information from different organisations. The campaign received a positive public response. c). Connecting with Employees Launched www.mycouncilworks.co.uk to connect the council and its employees more easily. Page 178
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SERVICE ANNUAL PERFORMANCE REVIEW 4 d) Connecting with our Communities - Health and wellbeing We issued free weekly news email subscription: by adapting its content to include more Covid-health, and other topical non-council news, we supported our communities’ wellbeing e.g. “Thank you for such regular, clear newsletters. So comforting to know we in isolation are included in outside life!....and I trust it!” e) Great place to live and work – Promoting Argyll and Bute f) Oban bid for city status The Communications Team developed the strapline for the council’s city status bid, and evidenced public backing for city status. Both elements formed key parts of the council’s bid. g) Rural Growth Deal The Communications Team developed the story of the deal: Connecting: our high value business sectors with national and international business markets; our local economic successes with national strategic priorities. Attracting: additional skills, training and learning opportunities; new residents, visitors and businesses. Growing: doing more of what works; making more of our natural and built resources. h) A healthy workforce and a healthy working environment A healthy workforce and a healthy working environment are essential to achieving higher levels of attendance and providing high quality services. The Wellbeing Team reviewed, updated and relaunched two key procedures, The Reducing Stress in the Workplace procedure and the Supporting Attendance procedure. In order to ensure that employees and managers were fully aware of the changes and the support that is available to them in managing their health, wellbeing and attendance at work the following were delivered: • Promotion via newsflash and Wellbeing Wednesday • Availability of updated procedures and supporting documents on both The Hub and My Council Works • A programme of drop in supporting attendance webinars for employees and line managers to attend to learn more about changes to the new procedure and ask questions. • A programme of drop in webinars for line managers to learn about the updated reducing stress procedure and the importance of preventative action Page 179
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SERVICE ANNUAL PERFORMANCE REVIEW 5 • A reducing stress workshop delivered by EAP provider Health Assured • A webinar guide for managers on accessing EAP support for themselves and those they manage • Having a conversation about stress guidance document • Reducing stress in the workplace eLearning currently awaiting launch • Access to wellness action plans to support line managers and employees to discuss appropriate support for mental health conditions Corporate Outcome - We Have An Infrastructure That Supports Sustainable Growth Business Outcome BO113: Our Infrastructure Is Safe And Fit For The Future a). Success Measure: CSS113_02-Deliver the ICT and Digital Strategy Action Plan ICT and Digital Team - Our aims • Our networks and systems are secure, accessible and current • ICT provides value, and enables and empowers both customers and staff to make tasks easier • Our people have the knowledge and capabilities to use ICT effectively We continue to network and engage with Scottish Local Government Digital Office, Society For Innovation Technology and Modernisation (SOCITM) and Scottish Government Digital Team to ensure that we achieve best practice, share our experience and expertise, maximise public sector joint working on ICT and digital and achieve the highest levels of value for money we can through active procurement and contract management. b). With approximately 100 actions associated with the 2021-24 ICT and Digital Strategy Action Plan, the following are highlights but the majority of actions are progressing satisfactorily and to target: • We have been accredited Public Services Network (PSN) and CE+ for 2022/23 as planned. • We have implemented MS 365, migrating all 2000 corporate mailboxes to Exchange online and migrating all H: drive content to OneDrive. • We have implemented MS Teams and established appropriate guidance and governance for both MS Teams and a selection of MS365 Apps. • We continue to refresh our hardware assets and keep them up to date through the capital Asset Sustainability programme as planned. • We have demonstrated engagement more widely with our customers through the completion of the 2021 Customer Service Questionnaire. • We continue to improve the accessibility of our corporate network through the completion of upgrades of bandwidth capacity at both Kilmory and GWITC (Graham Whitefield IT Centre). All existing circuit speeds increased in bandwidth (doubled at Kilmory). Page 180
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SERVICE ANNUAL PERFORMANCE REVIEW 6 • We continue to increase the provision of services on a digital platform wherever possible. This is exemplified by the extension of the Parent Evening Booking System to additional schools and facilitate remote parent evening via video call. Parents/ carers can select and amend an appointment to suit their needs. • We continue to support delivery of digital learning through the deployment of additional devices provided under the digital poverty initiative funded by the Scottish Government. • An illustration of joining up our systems through more integration using available technologies is the implementation of live streaming from the council chambers for selected committee meetings with integration to Modern.Gov and MS teams. • We have reviewed and continue to improve our disaster recovery and business continuity plans and technologies. • We have worked with the Customer Engagement Team to achieve Customer Service Excellence accreditation. • We directed the upgrade IKEN case management system to the latest version and have upgraded the technology platform for improved performance and compatibility. • We have developed a replacement system to ensure the continued recording of pastoral notes records for Education following the withdrawal of the functionality in SEEMiS (education management information system). c). Success Measure: CSS113_06-Maintain the average time to resolve ICT incidents We have operated well within our service level targets with service levels at or above previous levels and our response times were as good as previous years. Corporate Outcome - Getting It Right Business Outcome BO115 We are Efficient and Cost Effective a). Success Measure: CSS115_01-Increasing percentage of self service and automated contacts through the Customer Service Centre and Website. The target was 62% however the percentage achieved was 73%, or 410,000 out of 563,000 customer interactions through the Contact Centre’s various channels: This maintained the significant shift to digital prompted by Covid lockdown the previous year and the ongoing provision of high quality online and automated services that customers prefer to use for 24/7 convenience. Despite there being a large reduction in coronavirus related enquiries and support requests compared to 2020/21, the value of efficiencies attributable to use of online services was maintained at £912k. Page 181
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SERVICE ANNUAL PERFORMANCE REVIEW 7 Significant new online developments in 2021/22 included: • The launch of the council’s Alexa smart speaker service with its “when’s my bin day?” service, which now has 1216 subscribers who used the service 7,257 times last year. • Roll out of a number of new satellite websites including the Staycation Site, Invest in Argyll site, over a dozen new school sites recreated using Wordpress, Period Product access and sites for partners such as the Helensburgh Museum site. • Implementation of a new marketing and notification system called Eloqua to refresh the Keep in the Loop service, which now has 10,489 subscribers and the addition of new Ferry disruption alerts to that service, which issued 17,000 alerts to subscribers over the winter. • Implementation of a next generation web chat bot called Abbot to the council website. • In addition, the online services retained an exemplary record for accessibility of content, which is crucial not only from an equality point of view, but also to ensure the website is as usable as possible for customers with a range of abilities. Hence in March 2022 we scored a 99% standard and ranked as 13th best in the UK out of over 400 council websites on the independent Silktide standard. b). Scottish Local Government Living Wage Consolidation Following delivery of an options appraisal for reconfiguration of the pay and grading model to accommodate the Scottish Local Government Living Wage (SLGLW), the agreed model was delivered. This included a review of the pay and grading structure to accommodate the SLGLW and modernisation of terms and conditions. A review, rationalisation and streamlining was carried out into allowances and expenses and a consultative ballot by the Joint Trade Unions on the proposed method of consolidating the (SLG) Living Wage into the council’s Local Government Employee (LGE) pay scale as well as the proposed changes to the conditions of service document Page 182
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SERVICE ANNUAL PERFORMANCE REVIEW 8 Business Outcome: BO117 We encourage creativity and innovation to ensure our workforce is fit for the future a) Quality Conversations Changes were made to the PRD (Performance Review & Development) process to put quality conversations at the heart of how we do our business. Our updated approach moved away from the prescribed PRD template and is focused on an ongoing dialogue that captures conversations between the line manager and their staff about objectives, behaviours, skills and development and career/development aspirations. The change was communicated via newsflash and a guidance document was launched to help managers in finding an approach to these conversations that works for them and their team. A series of drop in webinars were delivered for employees to gain further insight into the new approach, ask questions and discuss with their peers. This approach also encouraged managers to consider how quality conversations can support wider communication at team level on agreeing objectives and key activities and monitoring progress. 2. SIGNIFICANT CHALLENGES The significant challenges faced by the Service during 2021/22. These challenges either created specific pressures on the Success Measures or impacted on delivery. Specific additional activity or mitigating actions were carried out to reduce the negative impact on service delivery. Corporate Outcome - We Have An Infrastructure That Supports Sustainable Growth Business Outcome BO113: Our infrastructure is safe and fit for the future a) Cyber-attacks 2021/22 saw an unprecedented increase in the level of risk associated with cyber-attacks. The public sector has repeatedly experienced significant cyber-attacks which disrupted services and cost millions of pounds to remediate. This has been a global phenomenon, and with heightened geo- political tensions there is an increasing risk that an attack targeted at a specific sector or organisation will escape into the wider world and have serious worldwide consequences. The need for our ICT teams to be ever more vigilant and responsive has never been greater. Our ICT teams have responded admirably to each and every emerging threat but the additional day to day challenges inevitably impact their workload in order to maintain the very high levels of service being delivered. Page 183
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SERVICE ANNUAL PERFORMANCE REVIEW 9 b) MicroSoft365 The accelerated implementation of MS365 to enable Teams as part of the Pandemic response resulted in the need to reallocate team resource from other priorities. This enabled a fast and effective transition with minimum disruption to the business and the creation of a secure operational environment in the Cloud. Corporate Outcome - Getting it Right Business Outcome BO115 We are Efficient and Cost Effective a) Recruitment • Our Communication Team is a small team and has been reduced by as much as 40% for a prolonged period due to difficulties in recruiting to two different vacant posts. We redesigned the role and hours of one post, which is now filled; and we are in the process of redesigning the second post. • Our HROD Team has experienced recruitment challenges in terms of being able to attract suitable candidates. Sickness absence in some areas of the team as well as increased demand due to Covid have led to issues in the team’s ability to meet service delivery expectations in some areas such as learning and development, departmental support and Systems development. Some projects experienced delayed in implementation. Actions taken to address the situation include a review of job descriptions, improved wording of adverts and increased profile on social media as well as support for team members on sickness absence. 3. CONSULTATION AND ENGAGEMENT - WE ASKED, YOU SAID, WE DID…. Please list all consultations and resulting actions that the Service has carried out during this period. a) Whilst there has been no formal customer consultation from during this period, the Communication Team has received positive feedback from the campaigns we have run and communications that we have sent out. b). Customer Satisfaction and Insight Surveys The Customer Engagement Team operates a number of automated customer satisfaction and customer insight surveys that allow customers to provide input on the quality of customer service and elements that could be improved or enhanced. Surveys include: • A pop up satisfaction/feedback survey on the website • An automated quality survey put on acknowledgements after online forms have been completed • A “what else would you like to see on the website” survey after website interactions • An automated customer satisfaction survey offered to callers on certain lines in to the Customer Service Centre • A quality of service survey offered to every person who registered a birth, death or marriage with our Registration Service • A complaints handling procedure satisfaction survey. Page 184
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SERVICE ANNUAL PERFORMANCE REVIEW 10 The feedback on these are used as part of continual improvements and are reported e.g. in the Quarterly Web Report c) SOCITM customer satisfaction The SOCITM (Society For Innovation Technology and Modernisation) customer satisfaction survey takes place 2 yearly and is due to be reported on in 2022. Recent comments from customers received by the team include: • The excellent preparedness by the team ensured that we were able to make a full and rapid transition to remote working from the beginning of Covid. • I have found ICT to be helpful, responsive and flexible even when being asked for support outside their area of responsibility • I have been incredibly impressed by our ICT team's ability to react and implement a first class service during very trying times. • ICT service has improved immensely over the past few years. One example is that you can get through immediately to an engineer, thus the problem can be rectified immediately. Page 185
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SERVICE ANNUAL PERFORMANCE REVIEW 11 d) Wellbeing Survey A survey was issued to all employees to understand their views on current wellbeing provision and how they viewed their own current health and wellbeing. From this the following actions were identified: • We will be including suggested topics in forthcoming Wellbeing Wednesday issues • We will be encouraging you to share with us your experiences • We will be developing tools for line managers to assist them to support you. • We will be considering corporate initiatives in relation to commitment for wellbeing d) Corporate Training Needs A survey was issued to establish the types of training that employees felt would be most beneficial to them and how they would prefer to receive training in the future. The results were used to establish a corporate training offering for 2022 and beyond that is suited to the new ways of working and future service delivery and meets the needs of employees. e) Hybrid Working Survey The feedback from this survey was used by the Hybrid Working Short Life Working Group alongside benchmarking information gathered from other councils and approaches taken by other employers in their development of a hybrid working policy. It was determined that one prescriptive approach to hybrid working is unlikely to suit everyone as individual circumstances are important to consider and that these can change over time. The policy provides detail and a set of principles which will support a change in the way we work, while not being prescriptive about what that approach will look like. Page 186
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE 11 AUGUST 2022 AMENDMENT TO PENSION DISCRETIONS POLICY - SHARED COST AVCs 1.0 EXECUTIVE SUMMARY 1.1 On 11 April the Strategic Management Team (SMT) approved the implementation of Shared Cost Additional Voluntary Contributions (AVCs) via AVC Wise. This will enhance our financial wellbeing offering to eligible employees further developing the employee benefit scheme which was successfully launched in 2021. 1.2 The Council already offers Additional Voluntary Contributions (AVCs) via Prudential. AVCs are a way to save for retirement. They provide an opportunity to supplement your Local Government Pension Scheme (LGPS) and build up an additional retirement fund. Employees can take this as a tax free lump sum or it can be helped to use them to retire early by increasing their monthly pension income. 1.3 The LGPS and HMRC regulations provide the necessary authority for employers to introduce a Shared Cost AVC scheme. The advantages of implementing this new Shared Cost AVC arrangement over the current standard AVC scheme is that in addition to the Income Tax relief that staff currently receive, they and the employer will also receive National Insurance contribution relief. 1.4 The Shared Cost Additional Voluntary Contributions are paid to the Council’s current AVC provider – Prudential, so for employees who already pay AVCs that will not change. 1.5 As part of the implementation of Shared Cost Additional Voluntary Contributions, SMT approved the proposal to include a new discretion in the Council's LGPS Discretionary Pension Policy Statement to permit Local Government Pension Scheme (LGPS) members to participate in a Shared Cost AVC scheme. 1.6 Regulation 17(1) & Definition of SCAVC in RSch 1 of the Council’s existing Pension Discretion Policy requires to be updated. 1.7 It is recommended that the Policy and Resources Committee approve the amendment to the Council’s Pensions Discretion Policy to allow employees to Page 189 Agenda Item 7
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access this financial benefit if they so choose. Page 190
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE 11 AUGUST 2022 AMENDMENT TO PENSION DISCRETIONS POLICY - SHARED COST AVCs 2.0 INTRODUCTION 2.1 On 11 April SMT approved the implementation of Shared Cost Additional Voluntary Contributions (AVCs) via AVC Wise. This will enhance our financial wellbeing offering to eligible employees further developing the employee benefit scheme which was successfully launched in 2021. 2.2 As part of the implementation of Shared Cost Additional Voluntary Contributions SMT approved the proposal to include a new discretion in the Council's LGPS Discretionary Pension Policy Statement to permit Local Government Pension Scheme (LGPS) members to participate in a Shared Cost AVC scheme. 2.3 To enable the SCAVC’s to be implemented Regulation 17(1) & Definition of SCAVC in RSch 1 of the Council’s existing Pension Discretion Policy requires to be updated. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee approve the amendment to the Council’s Pensions Discretion Policy to allow employees to access this financial benefit if they so choose. 4.0 DETAIL 4.1 The Council already offers Additional Voluntary Contributions (AVCs) via Prudential. AVCs are a way to save for retirement. They provide an opportunity to supplement your Local Government Pension Scheme (LGPS) and build up an additional retirement fund. Employee can take this as a tax free lump sum or it can be helped to use them to retire early by increasing their monthly pension income. 4.2 The advantages of implementing this new Shared Cost AVC arrangement over the current standard AVC scheme is that in addition to the Income Tax relief that staff currently receive, they and their employer will also receive National Insurance contribution relief. Employees who contribute to a Shared Cost AVC scheme will pay lower National Insurance contributions (NICs) and this saving Page 191
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will automatically be passed into the AVC. For most staff this will result in a saving of 13.25%. 4.3 The employees currently paying AVCs will be asked if they wish to transfer to the new scheme via a number of presentations which explain the benefits of a Salary Sacrifice scheme. 4.4 If 90% those employees who currently have AVCs transfer to the salary sacrifice Shared Cost AVC arrangement the Council can expect to achieve immediate annual savings of around £24,538 immediately. It is expected (based on previous business experience) that the expected take up could be increased to an estimated 7.5% of LGPS members utilising the scheme saving £300 per month then the Council will make projected gross NI savings of £129,206 - the Council’s net savings would be £88,547. The AVC Wise fee would amount to £40,659 on that basis. Argyll & Bute Council can also claim back the VAT. 4.5 How the scheme works in practice is that the employee accepts a contractual reduction in remuneration (a salary sacrifice), equivalent to the amount they would like to pay into the scheme, and the employer pays this amount into the Shared Cost AVC plan on their behalf. To meet the 'shared cost' arrangement the employee is then required to pay a nominal £1 each month into the Shared Cost AVC through a payslip deduction. 4.6 Any contractual earnings such as overtime, pay increases, contractual allowances, occupational maternity pay, occupational sickness pay, and redundancy will continue to be calculated on the notional salary before the salary sacrifice is applied. 4.7 The LGPS and HMRC regulations provide the necessary authority for employers to introduce a Shared Cost AVC scheme. As part of the implementation of Shared Cost Additional Voluntary Contributions, SMT approved the proposal to include a new discretion in the Council's LGPS Discretionary Pension Policy Statement to permit Local Government Pension Scheme (LGPS) members to participate in a Shared Cost AVC scheme. 4.8 The existing discretion reads as follows: Regulation Discretion Argyll & Bute Council policy on the exercise of this discretion R17 (1) and R15 (1) (d) Whether, and in what circumstances to contribute to a shared cost AVC scheme Argyll & Bute Council will not exercise this discretion but will keep under review Page 192
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4.9 The discretion would be amended to: Regulation Discretion Argyll & Bute Council policy on the exercise of this discretion R17 (1) and R15 (1) (d) Whether, how much and what circumstances to contribute to a Shared Cost AVC scheme Argyll & Bute Council will pay shared cost AVCs where an employee has elected to pay AVCs by salary sacrifice. The amount of these employer Shared Cost AVCs will not exceed the amount of salary sacrificed by the employee. This discretion is subject to the employee meeting the conditions for acceptance into the salary sacrifice Shared Cost AVC scheme and may be withdrawn or changed at any time. 5.0 CONCLUSION 5.1 Shared cost AVCs have benefits for both employees and employers. This improves the financial wellbeing benefits available to the employee in a way that allows them to save for the future and allows the Council to make savings. 5.2 In order to implement the scheme a change is needed to the Council’s Pensions Discretion Policy. 6.0 IMPLICATIONS 6.1 Policy – The council’s discretionary pensions policy will need to be amended and published to provide the authority to enable staff to pay into Shared Cost AVCs as one of our discretions. The scheme documentation will need to state that the Shared Cost AVCs are to be treated as a pensionable emolument in accordance with the LGPS regulations (Regulation 20(1)(b) of the 2013 Regulations), to ensure that a member’s main scheme benefits are not reduced. 6.2 Financial – This will lead to employer NIC savings. Payroll assistance will be required and support around implementation. 6.3 Legal – There are a number of legal issues that require action prior to the implementation of a Shared Cost AVC scheme. The Shared Cost AVC scheme information pack and frequently asked questions must explain the scheme in sufficient depth to enable staff to understand the implications of becoming a Shared Cost AVC member. The employee will be required to sign a salary sacrifice agreement to vary the contract of employment to accept the contractual reduction in remuneration. The Shared Cost AVC scheme will need to be approved by HMRC. 6.4 HR – Will lead on implementation and maintain the ongoing relationship with the suppliers involved. 6.5.1 Fairer Scotland Duty – These benefits will provide an opportunity to address inequalities of outcome caused by socio-economic disadvantage. Page 193
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6.5.2 Equalities – Protected Characteristics – benefits will be made available to all permanent employees who meet the appropriate qualifying conditions. 6.5.3 Socio Economic Duty – Strategic decision making in relation to enhancing and modernising employee benefits has taken into account how these changes and additions will benefit those who experience socio-economic disadvantage. 6.5.4 Islands – The provision of financial products and educational tools to employees on Islands will seek to ensure that they have access to a wide range of benefits via online provision. 6.6 Climate Change – The utilisation of online mediums for employee benefits has assisted in the reduction of postage and travel to access products and services. 6.7 Risk – Risks SS AVC’s are manageable and the key will be to ensure employees are aware of their responsibilities through clear, effective and ongoing communication. To safeguard any future compliance issues, the Shared Cost AVC scheme will require HMRC approval prior to launch. Other councils have achieved this requirement and this work is included in the specification to be delivered by the successful external provider. In addition, the council will be required to carry out some routine checks to ensure that any applications comply with the National Living Wage/National Minimum Wage rules and again this has been included in the requirements to ensure that the checks can be made within the external provider platform. 6.8 Customer Service – This will serve our internal customers, our employees across all services and grades well. They will have the opportunity to access a wide range of financial benefits at preferential rates or in the case of those able to purchase AVC’s with a saving in national insurance. Kirsty Flanagan Executive Director with responsibility for Customer Support Services 19 July 2022 For further information contact: Jane Fowler, Head of Customer Support Services Jane.Fowler@argyll-bute.gov.uk Seona Laird, HR Team Leader Seona.Laird@argyll-bute.gov.uk Page 194
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 11th AUGUST 2022 ARGYLL AND BUTE UK SHARED PROSPERITY FUND INVESTMENT PLAN 1.0 HEADLINES 1.1 The purpose of this paper is for members of the committee to approve the Argyll and Bute UK Shared Prosperity Fund (UKSPF) Investment Plan (see Appendix A), to deliver the council’s allocation of just under £4.5m (see Table 1) to be delivered over 3 years. 1.2 As the UKSPF is a successor to the previous EU structural funds, it is viewed as a central pillar of the UK Government’s Levelling Up agenda. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. 1.3 The project / programme activities outlined in the Argyll and Bute UKSPF Investment Plan are all aligned to three key investment priorities communities and place; supporting local business; and people and skills, where each priority has predefined interventions, outputs and outcomes. In addition to core UKSPF monies, the investment plan includes a focus on ring-fenced ‘Multiply’ funding to support the delivery of an area-based adult numeracy programme. 1.4 The Argyll and Bute Council UKSPF allocations to support delivery over three financial years, specifically the final five months of 2022-23 and the next two financial years, 2023-24 and 2024-25, until the end of March 2025 are outlined in Table 1. In particular, it should be noted that all allocations are required to be spent in-year. 1.5 At present the UK Government is looking for a fairly light touch indicative investment plan. Subject to a clear rationale, there will be scope to amend investment plans if other local / regional opportunities arise during this funding period; although the process to do this has not been identified. 1.6 A key requirement for the UKSPF investment plan is to take account of the wider funding landscape, existing programmes, other new funding opportunities and complementary interventions from other national or local schemes. Local authorities are responsible for the development and preparation of UKSPF investment plans, in conjunction with local partners/stakeholders. The investment plan needs to be approved by the local authority (Council Leader, CEO and Section 95 Officer), with endorsement of support from local the MP, prior to its submission. The UK Government will provide the final approval to unlock the funding allocations. Page 195 Agenda Item 8
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1.7 At the Argyll and Bute Council meeting on 30th June 2022, it was agreed that the Argyll and Bute UKSPF Investment Plan should be given final approval at the Policy and Resources Committee on 11th August 2022. Furthermore, members agreed that senior officers will seek the required endorsement from the local MP to support the Argyll and Bute UKSPF Investment Plan. 1.8 The timescale for submission of these investment plans is extremely tight; the submission window is from 30th June to 1st August 2022, and the work required to complete investment plans during the Scottish Local Government July recess period. 1.9 Further to the political approval process agreed by the full council on 30th June, Argyll and Bute Council has been granted an extension by the UK Government until the 1st September 2022 to submit our investment plan. It is recognised that given that our investment plan may be signed off later, allocations may arrive later than planned and therefore may have an impact on our delivery timescales for 2022/23. On that basis, subject to addressing any comments/amendments made by the Policy and Resource Committee, it is hoped that the Argyll and Bute UKSPF Investment Plan will be submitted online as soon as possible after the 11th August 2022. 1.10 Further to a partner/stakeholder consultation event on 10th June 2022, due to an extension being required to enable the necessary political approval, consultees were advised to submit proposals for the entire period, but with a particular focus on those that could practically and realistically deliver the UKSPF allocation, including that for Multiply, for the remaining part of 2022-23. 1.11 The initial suggested proposals from partners/stakeholders and internal colleagues for inclusion in the investment plan was 220% over the allocation limit. In the first instance everyone who submitted a proposal was asked to confirm the minimum viable project cost, where costs could be scaled back and identify any interventions that could be dropped. As costs were still higher than the allocation, officers developed eligibility criteria with an associated scoring RAG (red, amber & green) scoring system (see Appendix B), along with further consultation discussions/e-mail correspondence with partners/stakeholders and internal colleagues, to populate a final plan to directly match the in-year allocations. 2.0 RECOMMENDATIONS 2.1 Members are asked to: Agree Argyll and Bute UKSPF Investment Plan appended to this report (Appendix A) for submission to the UK Government, subject to addressing any amendments/ comments from the committee members. Provide regular updates to the Policy and Resources Committee on the progress of the delivery of the Argyll and Bute UKSPF Investment Plan aligned to the predefined outputs and outcomes. Page 196
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3.0 DETAIL 3.1 On 13th April 2022 the UK Government published the full prospectus of the UKSPF, a successor to the previous EU structural funds. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. This encompasses four levelling up objectives and three investment priorities. The levelling up objectives are: Boost productivity, pay, jobs and living standards by growing the private sector, especially in those places where they are lagging; Spread opportunities and improve public services, especially in those places where they are weakest; Restore a sense of community, local pride and belonging, especially in those places where they have been lost; and Empower local leaders and communities, especially in those places lacking local agency. The Investment Priorities are: Communities and place; Supporting local business; and People and skills. The interventions list can be found here and the objectives, outcomes and outputs can be found here. 3.2 The UK Government has published individual council allocations of both core UKSPF funding and Multiply. While this is a predominantly revenue fund, there is a minimum amount of capital that must be spent for each year. It is up to the local authority to advise what is deemed as capital funding. 3.3 A detailed summary of the Argyll and Bute allocation is outlined in Table 1 overleaf, complete with the proposed 4% administration fee for overall fund delivery, minimum capital spend per year and the percentages of the allocation by year with the largest allocation for core UKSPF in 2024-25. It is a concern that the allocation for Multiply is 30.2% for 2022-23 which does not take into account the shorter timescale for delivery. 3.4 Each lead local authority will receive its annual allocation in advance, complete with £20k of initial capacity funding. In 2022-23, funding will be paid once the local investment plan has been signed off by the UK Government (October 2022 onwards). For 2023-24 and 2024-25 payment will be at the start of the financial year. 3.5 Match funding is not a prerequisite and will not form part of the investment plan assessment criteria. However, lead local authorities are strongly encouraged to consider match funding from the private, public and third sectors and leverage options when selecting communities and place and supporting local business interventions to fund in order to maximise the value for money and impact of the UKSPF. Page 197
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Table 1: Argyll and Bute UKSPF Allocation 2022/23 2023/24 2024/25 Total allocation In-year allocations (%) Core UKSPF 12.1% 24.3% 63.6% Core UKSPF £451,343 £902,686 £2,365,038 £3,719,067 In-year allocations (%) Multiply 30.2% 34.9% 34.9% *Multiply £234,698 £270,806 £270,806 £776,310 Total £686,041 £1,173,492 £2,365,844 £4,495,377 4% of total: admin fee - fund delivery £27,442 £46,940 £105,434 £179,815 In-year allocations (%) capital 10.4% 12.5% 17.9% Capital: minimum spend of total Core UKSPF only, not Multiply £46,940 £112,836 £423,342 £583,117 Available allocation (exc. admin) 2022/23 2023/24 2024/25 Total allocation Core UKSPF £433,289 £866,579 £2,270,436 £3,570,304 Multiply £225,310 £259,974 £259,974 £745,258 * Multiply is an adult numeracy programme, which will support people with no or low-level maths skills get back into work The scheme will offer free personal tutoring, digital training, and flexible courses to improve adults’ confidence and numeracy skills. Full details on Multiply can be found here N.B. Figures subject to rounding 3.6 As the initial proposals for inclusion in the Argyll and Bute UKSPF Investment Plan were 220% greater than the allocation, everyone who submitted a proposal was asked to confirm the minimum viable project cost, where costs could be scaled back and identify any interventions that could be dropped. As costs were still higher than the allocation further to this exercise, officers developed eligibility criteria and an associated RAG scoring system (see Appendix B). For instance, consideration was given to the wider policy and funding landscape, existing activities and programmes, other new funding opportunities and other complementary interventions from other national or local schemes. This was followed up by discussions / e-mail correspondence with all internal colleagues, partners and stakeholders to enable the preparation of the final plan for approval, where proposals directly match the in-year allocations, see Appendix C, UKSPF Expenditure Profile spreadsheet. The expenditure spreadsheet and the UKSPF Indicative Deliverables spreadsheet, summarised in Tables D1 and D2 in Appendix D, must be submitted, along with the Argyll and Bute Investment Plan (Appendix A) using the UK Government’s online portal. 3.7 The indicative investment plan assessment period for the UK Government is July to September 2022, with anticipated investment plan approvals and first payments to local authorities from October 2022. Further details on the UKSPF and the associated process to develop and prepare investment plans are outlined in the full prospectus. Page 198
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4.0 CONCLUSION 4.1 The purpose of this paper is for members of the committee to approve the Argyll and Bute UK Shared Prosperity Fund (UKSPF) Investment Plan, Appendix A. 4.2 The Argyll and Bute UKSPF Investment Plan has been developed and prepared in conjunction with internal council colleagues, local partners/stakeholders, with endorsement of support sought from our MP (to be confirmed verbally at the meeting on the 11th August). 4.3 Due to the tight timescales associated with the submission of the investment plan (even with the granted one month extension), agreement and support is sought on the recommendations in this paper. 5.0 IMPLICATIONS 5.1 Policy - This project aligns with the proposals set the UKSPF full prospectus 5.2 Financial - Argyll and Bute Council has been given an allocation of just under £4.5m from the UKSPF to be spent by the end of March 2025. This is accompanied by £20k of capacity funding to assist in the development and preparation of the investment plan and the ability to use up to 4% of the allocation per annum to fund administration support for the overall delivery of the Argyll and Bute UKSPF Investment Plan. 5.3 Legal - All appropriate legal implications will be taken into consideration. 5.4 HR - Given the revenue nature of this fund, staffing requirements can be built in under activity to deliver the predefined interventions, outputs and outcomes. A staff resource will also be required to administer, monitor and evaluate the overall delivery of the Argyll and Bute UKSPF Investment Plan. 5.5 Fairer Scotland Duty - The Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on particular public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio- economic disadvantage, when making strategic decisions and how this has been implemented. 5.5.1 Equalities - All activities will comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations. 5.5.2 Socio-economic Duty - All project activities will comply with the council’s socio- economic duty. 5.5.3 Islands - Interventions under the UKSPF will be delivered across the Argyll and Bute area, including island communities. 5.6 Climate Change – There are a number of net zero and climate resilience interventions across all the UKSPF investment priorities. Page 199
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5.7 Risk – If Argyll and Bute UKSPF Investment Plan is not approved for submission in the associated tight timescale, this could jeopardise the ability to submit a compliant investment plan to unlock the area’s UKSPF allocation. 5.8 Customer Service – None. Kirsty Flanagan, Executive Director with responsibility for Economic Growth Councillor Robin Currie: Policy Lead for Economy and Rural Growth 11th August 2022 For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk Ishabel Bremner, Economic Growth Manager Ishabel.Bremner@argyll-bute.gov.uk Appendixes:- Appendix A: Argyll and Bute UKSPF Investment Plan and a summary of projects and programmes Appendix B: Project Scoring Assessment Framework Appendix C: Expenditure Spreadsheet Appendix D: Indicative Outputs and Impacts – as of 2nd August 2022 Page 200
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UK Shared Prosperity Fund Argyll and Bute Investment Plan, August 2022 Your location To be eligible for funding, you will need to be applying on behalf of a lead authority in one of the delivery geographies. Select the lead authority For Scotland and Wales only: Who else is this investment plan being submitted on behalf of? Select all that apply Page 201
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Your details Name: Kirsty Flanagan Email address: kirsty.flanagan@argyll-bute.gov.uk Phone number: 01546 604268 Organisation name: Argyll and Bute Council Local challenges and opportunities In this section, we will ask you: If you've identified any challenges or opportunities, you intend to support Which of the UKSPF investment priorities these fall under ARE THERE ANY LOCAL CHALLENGES YOU FACE WHICH FALL UNDER THE COMMUNITIES AND PLACE INVESTMENT PRIORITY? (If yes) Describe these challenges, give evidence where possible Tourism Due to the pandemic and enforced business closure, the Argyll and Bute Council area saw significant decreases in the tourism and hospitality sector: • -57.6% Visitor days • -65.4% Visitor numbers • -54.8% Direct Expenditure • -34% Direct employment (Source: Argyll and Bute Scottish Tourism Economic Activity Monitor (STEAM) data 2019, comparison with Q1&Q2 2021). Recovery has faced obstacles and delays with changing restrictions and regulations over 2020 and 2021. There have been inevitable business casualties. Targeted and sustained marketing efforts will be necessary to raise the profile of the destination’s offers effectively; and attract visitors who will respect as well as enjoy Argyll and Bute. Childcare In specific areas of Argyll and Bute, it is a challenge to deliver childcare pre-school, post school and during holidays to allow parents/carers the opportunity to work or offer greater flexibility in working hours. Community Development Our communities, and partners, through the Community Planning Partnership, have identified the challenge of addressing the Climate Emergency in Argyll and Bute. They have been working together to seek ways to address this. Community organisations have expressed a desire to come together to share best practice, ideas and increase capacity and resilience through learning from one another. These needs have been raised through thematic focused discussions (i.e. climate change, COVID recovery and resilience) and also in communities with protected characteristics such as Gaelic speaking communities. This is a challenge within Argyll and Bute due to the large land mass and remote rural and island communities, which impacts travel and ability to meet. There is a need to support a digital solution and there is complexity with this due to the capacity building needs around skills / lack of digital infrastructure within community facilities. Fuel Poverty and the Cost of Living Crises The current challenges with regard to fuel poverty and the cost of living are particularly prevalent in the large and sparsely populated rural area of Argyll and Bute. In the area there is a predominance of low paid, temporary and seasonal contracts, in industries of agriculture, forestry and tourism. During the pandemic tourism was particularly hard hit. The Scottish Government’s income Page 202
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distribution statistics 2018 show that Argyll and Bute is in the bottom third of local authority areas with the lowest gross weekly incomes, whilst the cost of transport and distribution of food means that the cost of living is also much higher in rural areas of Scotland like Argyll and Bute. A Scottish Government (2021) report estimates that the minimum cost of living in remote rural Scotland is between 15% and 30% higher than urban parts of the UK. In addition being remote and rural, fuel poverty is a significant issue facing Argyll and Bute, the most recent Scottish House Condition Survey 2020 suggesting that 43% of residents are living in fuel poverty, 4% more than the national average. The Atlantic Islands House Condition Survey suggests that in some areas 63% of local residents are in fuel poverty. Fuel Poverty is defined as “if (a person), to heat their home to a satisfactory standard, needs to spend more than 10% of their household income on fuel then they are in fuel poverty”. The Scottish Index of Multiple Deprivation (SIMD) is a relative measure of deprivation across 6,976 small areas (called data zones). The SIMD ranks all data zones in Scotland according to levels of deprivation relative to one another. 13 of Argyll and Bute’s 125 data zones fall within the 15% most deprived data zones in Scotland. These data zones are all located in our biggest towns of Rothesay, Dunoon, Campbeltown, Helensburgh and Oban. Patterns of deprivation vary by domain, there are seven domains in total including income, employment and geographic access to services. A particular contrast can be seen between levels of access deprivation, which affects most of rural Argyll and Bute and levels of deprivation across other SIMD domains, wherein the towns are seen to exhibit higher levels of multiple deprivation relating to income and employment. Although Argyll and Bute has few areas with high levels of multiple deprivation, other instances of deprivation will occur outside these areas, especially in rural areas where populations are more heterogeneous, meaning small pockets of poverty sit outwith the main towns very close to areas of affluence. This all forms part of a major challenge for Argyll and Bute to minimise poverty by maximising incomes providing well paid jobs and cheap affordable housing amongst other key targets. Places The majority of our population live in towns or smaller settlements and therefore our places and any resulting improvement to them is critical to the quality of life and health and wellbeing of our communities who live and work in them as well as providing more attractive places for those visiting or looking to invest. There is a real need in many of our towns and settlements for funding to support ‘small-scale projects’: projects enacted on the local level of a town, settlement or a neighbourhood and aimed at enhancing the quality of the place and quality of life, the health and wellbeing of our communities including the social and cultural life of local residents as well as improving the place for those living, working, visiting and investing. ARE THERE ANY LOCAL OPPORTUNITIES UNDER THE COMMUNITIES AND PLACE INVESTMENT PRIORITY THAT YOU INTEND TO SUPPORT? (If yes) Describe these opportunities, give evidence where possible Tourism The tourism industry is resilient and there is an appetite to build back better in terms of both the visitor economy and quality of visitor offering; and to focus on an improved tourism product increasingly responsive to communities and sensitive to the outstanding environment. Not all tourism and hospitality businesses have suffered. Some have made innovative and long- lasting changes to their business model. Some have seen an increase in visitors by ensuring their visitor offer is aligned to market needs; safety assurance, flexibility of booking conditions, improvements enabled through pandemic grants. Scottish Tourism Economic Activity Monitor (STEAM) data for Argyll and Bute in the first half of 2021 suggests significant build-back with economic impact more than doubling from £41.95m in 2020 to £94.83m in 2021 - a remarkable recovery rate of 126.1%. (Source: ABC STEAM DATA 2019 comparison to Q1&2 2021). Page 203
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Predictions at the time of the 2022 Visitor Economy Recovery and Growth Strategy development suggest a 3-6 year worldwide full tourism recovery period. Sustained marketing and product development is necessary to underpin confidence in travel and position Argyll and Bute as a safe, sustainable and enjoyable destination. There is both appetite and need to take the pent-up travel demand and encourage locals and visitors to enjoy Argyll and Bute and improve direct spend in the area. There are opportunities to support businesses to create new visitor facing products and to use marketing activity to encourage visitors to come to the destination, stay longer and spend money in the local economies. Community Development To build on the momentum of time and dedication given by community groups and partner organisations to come together and address concerns with the climate emergency. To date, and over a period of more than a year, the group has worked together and produced a business case for feasibility study on climate change. They have also produced a webpage (Community Planning Partnership - Climate Change (argyll-bute.gov.uk)) with the work to date in the area; which enabled the identification of gaps and need for a study. There is then opportunity to support community organisations to deliver via funding to community groups to help bring community cohesion, and increase volunteering on climate change matters through community projects and activity. The council has trialled innovative ways in bringing groups together online during the pandemic and there is opportunity to expand this to develop ‘hubs’; both online to provide opportunity to mitigate the remote rural challenges, and within communities by developing community assets fit for purpose. Further to this the Community Learning and Development Partnership (CLD) has ‘digital’ as a priority in its plan to improve digital skills and access across Argyll and Bute; partners are actively looking at how best they can approach this jointly – this includes the Third Sector. The Shaping Places for Wellbeing project in Dunoon is one of six projects in Scotland seeking to address health inequalities. There is an opportunity for funding to support the needs being identified in this project; including the development of built assets to improve community cohesion, volunteering and place. If we were able to support the Food Bank in Dunoon to undertake the feasibility studies and carbon reduction works required for a community asset then it would make a significant difference to the community work and volunteers of those associated with the group. The group is developing projects on energy reduction advice, clothing re-use and other support that has multiple societal and environmental impacts. There is opportunity to support them to flourish within a local asset. Fuel Poverty and the Cost of Living Crises We have the opportunity to provide grant funding to deal with the immediate fuel and food crisis. We can encourage vulnerable householders to engage with the professional advice services provided by local third sector organisations to ensure a better long term outcome for them. This includes the provision of financial inclusion skills and education services and a knowledge of where to go for help and assistance in the future, including support to ensure that claimant income from work and/or benefits is maximised, they are also to be given money and debt advice if required and budgeting skills training at the same time. Referrals can be made for Fuel Debt Relief and Advice, Behavioural Change designed to minimise future fuel bills, the provision of energy efficient white goods and fuel vouchers and top-up payments can also be provided to claimants all in ensure a much better longer term outlook for vulnerable householders helping them to self-serve in future should they be faced with similar challenges again. Creating a school uniform bank can support families with school uniform costs whilst at the same time increasing recycling. Doing this via a social enterprise can help educate schools and pupils in social enterprise and entrepreneurship, building jobs and retaining skills of young people in our area. Places Small-scale projects have the potential to play a role in renewing and reviving our towns and smaller settlements making them more attractive, vibrant and living places. Page 204
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ARE THERE ANY LOCAL CHALLENGES YOU FACE WHICH FALL UNDER THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY? (If yes) Describe these challenges, give evidence where possible Argyll and Bute was ranked most vulnerable in the Vulnerability Index 2020 in terms of economic shock resulting from the COVID pandemic. Rural areas are less resilient than urban areas. Evidence The following points have been taken in the main from evidence collected for the Highlands and Islands area, which includes Argyll and Bute. There is an increase in Highlands and Islands businesses reporting that they are operating below pre-COVID levels. A recent survey reports that in the last six months only 34% have increased turnover, 16% increased employment and 11% increased exports. 43% are striving for growth, 57% are focusing on resilience and 55% on enhancing productivity. The most important factors in helping to achieve these plans were given as adapting products/services 50%, upskilling staff 46%, investing in technology 43%, collaborating 43% and external advice and support 42%. Evidence Productivity in the Highlands and Islands area is lower, at £46,500 compared to £50,200 for Scotland. Mid-term and longer-term forecast average annual growth in Gross Value Added (GVA) is below Scotland and the UK. Evidence The biggest barrier to innovation for businesses in the Highlands and Islands was it not being a priority (39%) but 38% report costs as the barrier. Evidence Cost pressures on small businesses have hit a 7 year high. Credit availability and affordability indices have worsened and will further worsen as interest rates rise. Evidence Almost half of businesses in Scotland report having experienced difficulties recruiting employees. Evidence Skills assessments for the Highlands and Islands area suggest that many of the key sectors for Argyll and Bute are reporting skills gaps – Tourism 16%, Health and social care 17%, Construction 13%, Food & Drink 13%, Agriculture Forestry & Fishing 13% Evidence Tourism and Hospitality businesses owners face unprecedented challenges during the recovery of the sector from the pandemic. In addition to attracting back visitors, most businesses are facing staffing challenges, rising costs and increasing regulation. Inflation is running at a high of 11%, interest rates are climbing, and energy bills are expected to at least double in the coming 12 months. Practical interventions which can either reduce costs and / or support innovation will be welcomed at a time when business owners have less time to operate strategically UK tourism and hospitality vacant roles are running at an all-time high of 1.3m (Source: Scottish Tourism Alliance). Any intervention designed to support attraction and retention will be well received by employers across Argyll and Bute. Social economy delivers a range of essential services to communities with limited capacity argyll_and_bute_se2017_census_report.pdf (argyll-bute.gov.uk) Majority of social enterprises and micro businesses with limited capacity for growth argyll_and_bute_se2017_census_report.pdf (argyll-bute.gov.uk) ARE THERE ANY LOCAL OPPORTUNITIES UNDER THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY THAT YOU INTEND TO SUPPORT? (If yes) Describe these opportunities, give evidence where possible Business support We have the opportunity to enhance the business support available from the council from the point of start-up through to growth. Scaling up existing support and introducing new activities, will provide more support to a greater number of SMEs to assist growth and sustainability. This includes: A package of start-up support to help new start SMEs to establish and build sustainability A package of business development support to help local SMEs to grow sustainably or recover from the pandemic and build resilience A package of employer support to help local SMEs recruit, train and manage staff A package of feasibility study support to help local SMEs develop and innovate Page 205
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Grants and specialist advice support has been provided by the council utilising European Structural Funds for a business growth programme which concludes in 2023. Recent follow-up of 104 supported businesses shows 74% have delivered growth since receiving support, with a combined £8.2m increase in turnover and 109 additional FTE jobs created. There is a clear opportunity to build on and continue this type of support for local businesses. Tourism support Pre pandemic, Argyll and Bute enjoyed hundreds of large and small events across the destination bringing not just visitor enjoyment but employment, economic improvement and served to showcase the best of our local artists, musicians, dancers and crafters. Post pandemic, there is visitor and participant appetite to gather again and celebrate those skills and important cultural and heritage events. At the time of application, and the height of summer, there are circa 200 events scheduled – a fraction of those held previously. With support, local community groups and professional event organisers can once again schedule an events line up for 2023/24 as a key component of the visitor growth strategy. Social Enterprise support We have the opportunity to build on the longevity and proven track record of social enterprises across our rural communities delivering vital services and building social, environmental and economic capital for communities. Well established social economy sector with opportunities to address local challenges and opportunities, including community led renewables, tourism, sustainable forestry, food production, rural housing and land ownership. The last Social Enterprise Census in 2019 provided compelling evidence of the significant contribution of social enterprises to employability and job creation. 55% employ someone with a disability or long-term health condition, 42% employ previously unemployed young people and 69% provide training and support to improve employability. Social enterprises are a key solution to the employment challenge ARE THERE ANY LOCAL CHALLENGES YOU FACE WHICH FALL UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY? (In Scotland, Wales, and Northern Ireland this should also include challenges relating to Multiply) (If yes) Describe these challenges, give evidence where possible Population Demographic Future population projections suggest a reduction in total population of 7.2% from 2010 to 2035. The decline in population experienced to date and that projected in the future presents a significant challenge to the overall viability of the area. Projections up to 2035 suggest that the population is ageing, with the percentage of the population over 65s expected to increase from 15% to 39.7%. More people living longer is a real success, however the demographic changes do create a number of challenges, including the availability of people to join the overall workforce in Argyll and Bute. Service Delivery & Resources The workforce is shrinking, so we must do everything we can to support those within working age, into employment or further education. Currently there is a gap in the provision of adult literacy and numeracy support in Argyll and Bute, which is a challenge as this is a limiting factor in supporting adults into work and further education. Due to our resources, we are currently unable to deliver one-to-one support, which is so vital in this area of work. Physical Geography Delivery of one-to-one support sessions is a challenge due to the large, dispersed geography of Argyll and Bute, the second largest local authority area in Scotland and has the largest number of inhabited Islands (23 Islands). Around 17% of our population live on an island (Census 2011). The size of the area and population dispersion require multiple facilities for service delivery to ensure services are delivered close to users and communities. The distance between main settlements and use of ferry services create challenges in terms of reliability, time and cost of travel. Infrastructure and transport issues Rural, remote rural and island communities – thus limited access to range of employment opportunities or training. Additional barriers relating to reputational issues with lack of anonymity in Page 206
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a rural setting. Rural Employment - Policy | Employability in Scotland Youth unemployment in rural areas | JRF Skills Shortages The mismatch between unemployed people with limited skills, confidence and a range of barriers, including increasing mental health issues to access skills opportunities available. – evaluation information from SYP phase 1 ARE THERE ANY LOCAL OPPORTUNITIES UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY THAT YOU INTEND TO SUPPORT? (In Scotland, Wales, and Northern Ireland this should also include challenges relating to Multiply) (If yes) Describe these opportunities, give evidence where possible There are a number of local opportunities that could be capitalised on by the dissemination of UK Shared Prosperity Fund monies across the proposed project interventions: Strong Partnerships & Referrals of Learners Regionally and locally there are strong partnerships, with Adult Learners supported as part of Live Argyll's Community Learning and Development partnership. Through our partners, we receive referrals for literacy and numeracy support for adult learners – many of which we are currently unable to engage with due to lack of resources. Progression for Learners With a small workforce across Argyll and Bute, any learners who are supported with literacy and numeracy would have a pathway into further support in our Community Learning and Employability Hubs which are run in partnership with Skills Development Scotland and the Department of Work and Pensions. We also have a strong symbiotic relationship with Argyll College (UHI Argyll). We support their learners who require some additional literacy and numeracy support, and they provide a pathway into further education for those who wish to progress. Vulnerable School Leavers There is an opportunity to work closely with the Developing Young Workforce Leads to ensure that vulnerable school leavers are effectively supported into employment by expanding the Wider Achievement Programme for all secondary schools, delivered in partnership. Young People We have the opportunity to deliver a coherent programme of wider achievement qualifications and skill-focused volunteering opportunities for all secondary pupils, delivered in partnership with agencies and organisations in the wider community. Examples could include qualifications relating to food hygiene, first aid, heart start, Duke of Edinburgh and voluntary work, could encompass areas such as food banks and environmental improvement and conservation. The programme will allow curricula in schools to reflect the four contexts for learning within Building the Curriculum 3, and in particular the three related to ethos and community, inter-disciplinary learning and personal achievement. The Wider Achievement Programme is designed to allow skills progression for all young people within the school as they progress through the curriculum, and the development of their resilience, confidence and aspiration. The programme will increase engagement with school-based education for the most disengaged and vulnerable children and young people, increasing attendance and further reducing exclusion rates. Finally, the programme would also lead to a significant rise in the number of qualifications gained outside of the narrow band of National Qualifications. The proposals in this Investment Plan are thus coherent with the direction of travel nationally, where vocational and skills-based education is being developed and promoted in terms of its accessibility to young people and parity of esteem beside national qualifications. Social Economy Delivers a range of essential services to communities with limited capacity and skills. Working with partners across the third sector with experience in supporting and nurturing those facing barriers to work, alongside training providers and those with specialist expertise in skills shortage areas to enable effective access and progression routes within Page 207
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skills shortage areas (construction, tourism and hospitality, care and social economy as well as evolving economy including blue and green economy opportunities). Expertise within organisations to assist those facing barriers to build skills enabling people to progress in to longer term employment which in turn addresses skills shortages. Interventions In this section, we will ask you about: Interventions you’ve chosen for each year of funding Outcomes you want to deliver Any interventions that are not listed here How these interventions fall under the UKSPF investment priorities, and your rationale for them Interventions not included in our list will be assessed before being approved, where you will need to show a clear rationale, how the intervention is value for money, what outcomes it will deliver and how you will monitor and evaluate the intervention. This may include a theory of change or logic chain. WHAT ARE THE OUTCOMES YOU WANT TO DELIVER UNDER THE COMMUNITIES AND PLACE INVESTMENT PRIORITY? SELECT ALL THAT APPLY. Outcome Tick if applicable Jobs created Jobs safeguarded Increased footfall √ Increased visitor numbers √ Reduced vacancy rates Greenhouse gas reductions Improved perceived/experienced accessibility Improved perception of facilities/amenities √ Increased number of properties better protected from flooding and coastal erosion Increased users of facilities / amenities √ Improved perception of facility/infrastructure project √ Increased use of cycleways or paths Increase in Biodiversity Increased affordability of events/entry Improved perception of safety Reduction in neighbourhood crime Improved engagement numbers √ Improved perception of events Increased number of web searches for a place √ Volunteering numbers as a result of support √ Number of community-led arts, cultural, heritage and creative programmes as a result of support Increased take up of energy efficiency measures √ Increased number of projects arising from funded feasibility studies Number of premises with improved digital connectivity √ None of the above SELECT THE INTERVENTIONS YOU INTEND TO USE WHICH MEET THE COMMUNITIES AND PLACE INVESTMENT PRIORITY. YOU CAN SELECT AS MANY AS YOU LIKE. Intervention A full list of nation-specific interventions is available in the relevant annex to the Prospectus. Page 208
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S7: Funding for the development and promotion of wider campaigns which encourage people to visit and explore local areas.. S8: Funding for impactful volunteering and/or social action projects to develop social and human capital in local places. S9: Investment in capacity building, resilience (including climate change resilience) and infrastructure support for local civil society and community groups. S10: Community measures to reduce the cost of living, including through measures to improve energy efficiency, and combat fuel poverty and climate change. S12: Investment and support for digital infrastructure for local community facilities. S13: Support for linking communities together and with employment opportunities with a focus on decarbonisation. DO YOU PLAN TO USE ANY INTERVENTIONS NOT INCLUDED IN THE COMMUNITIES AND PLACE LIST? State the name of each of these additional interventions and a brief description of each of these No Explain how each intervention meets the Communities and Place investment priority. Give evidence where possible, including why it is value money and the outcomes you want to deliver. N/A Do you consider that any of these interventions may provide a subsidy to potential recipients of the funding under the intervention’s planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Detail the assessment you undertook to consider whether the intervention is a subsidy and any specific measures you will take to make sure the subsidy is permitted. HAVE YOU ALREADY IDENTIFIED ANY PROJECTS WHICH FALL UNDER THE COMMUNITIES AND PLACE INVESTMENT PRIORITY? Describe these projects, including how they fall under the Communities and Place investment priority and the location of the proposed project. 1. Tourism Marketing Support - design and execution of marketing campaigns and events strategy to deliver increased visitor numbers, improved visitor economy and benefit local businesses. Argyll and Bute wide. (S7) 2. Community Planning Partnership Climate Change Working Group building capacity in communities, including peer support for community organisations and funding to support community projects with a focus on climate change. Bring communities together to share best practice in community action for climate change, raise volunteer numbers and support wider influence of actions locally and across Argyll and Bute. Argyll and Bute wide. (S8) 3. Extension of Shaping Places for Wellbeing support, to take forward needs identified and improve community cohesion, place and wellbeing. Shaping Places for Wellbeing is an innovative partnership project to inform systems change to address better health and wellbeing. There is a project worker in place that, with the funds provided through this, could add value by being able to deliver community based changes to improve community and place such as: improved perception of the area; community notice boards, active travel promotion. Argyll and Bute wide. (S9) 4. Vibrant and Living Places to support a small scale place based investment and town centre fund (possibly including shop front improvements & development of digital apps), pocket parks and green spaces including stalled spaces, and restoring historic features, heritage, arts and cultural small scale projects (including public art). Argyll and Bute wide. (S9) Page 209
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5. Extension of Flexible Food Fund providing short term grants to people struggling with the cost of living crisis, advice and skills support and referral to partners. Argyll and Bute Council is working with third sector organisations, Bute Advice Centre and the Argyll, Lomond and the Islands energy advice group (ALIenergy) to provide short-term grant funding to people who are struggling due to the cost of living crisis and increased fuel costs based on the minimum income standard with a rural uplift. Customers are offered a second grant payment if they engage with the advice services available such as benefits maximisation, budgeting skills, money and debt advice. In addition a referral is made to ALIEnergy and fuel debt relief, fuel poverty advice, behavioural change, the purchase of white goods and the provision of fuel vouchers can all be arranged. Argyll and Bute wide. (S10) 6. Community Hubs to increase digital capacity and skills in communities, alongside community asset improvements. Development of hubs which support community organisations and volunteers to come together to share best practice, ideas and increase capacity and resilience. Argyll and Bute wide. (S12) 7. Pre-loved School Uniform project, supporting an eco-friendly re-used school uniform bank. Argyll and Bute wide. (S13) Do you consider these projects may provide a subsidy to potential recipients of the funding under the proposed planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Detail the assessment you undertook to consider whether the proposed projects constitute a subsidy and any specific measures you will take to make sure the subsidy is permitted. Argyll and Bute Council must ensure that any subsidies (includes grants, loans at below market rate, loan guarantees at below market rate, tax breaks/relief or allowing a company to use publicly owned office space rent free) awarded to economic actors (anyone who puts goods or services on a market and could include a public body or a charity if they are acting commercially) comply with the UK’s international obligations. These include World Trade Organisation (WTO) rules and trade agreements such as the EU-UK Trade and Co-operation Agreement (EU-UK TCA). A Subsidy Risk Assessment was undertaken for interventions included in the Argyll and Bute UKSPF Investment Plan when support from the council might potentially be subject to these international agreements on controlling public subsidies. With regard to the relevant projects outlined in the Argyll and Bute UKSPF Investment Plan, the following questions have been posed: 1) Is the support given by a public authority? 2) Is the recipient of support an economic actor (i.e. placing goods or services on the market)? 3) Does the support provide a financial or in-kind benefit to the recipient which is not otherwise available on commercial/market terms? 4) Could the support affect international trade? If the answer to all of the above questions was ‘Yes’, then the support is a subsidy. If the answer to any of the above was ‘No’, then the support is not a subsidy. No further action is required and the recipient will be advised that this award is not a subsidy as per the UK’s international obligations. WHAT ARE THE OUTCOMES YOU WANT TO DELIVER UNDER THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY? SELECT ALL THAT APPLY. Outcome Tick if applicable Jobs created √ Jobs safeguarded Increased footfall Increased visitor numbers Reduced vacancy rates Greenhouse gas reductions Page 210
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Number of new businesses created √ Improved perception of markets Increased business sustainability Increased number of businesses supported √ Increased amount of investment Improved perception of attractions Number of businesses introducing new products to the firm Number of organisations engaged in new knowledge transfer activity √ Number of premises with improved digital connectivity Number of businesses adopting new to the firm technologies or processes √ Number of new to market products √ Number of R&D active businesses √ Increased number of innovation active SMEs √ Number of businesses adopting new or improved products or services Increased number of innovation plans developed Number of early stage firms which increase their revenue following support Number of businesses engaged in new markets Number of businesses engaged in new markets Number of businesses increasing their export capability Increased amount of low or zero carbon energy infrastructure installed Number of businesses with improved productivity √ Increased number of projects arising from funded feasibility studies √ Increased number of properties better protected from flooding and coastal erosion None of the above SELECT THE INTERVENTIONS YOU INTEND TO USE WHICH MEET THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY. YOU CAN SELECT AS MANY AS YOU LIKE. Intervention A full list of nation-specific interventions is available in the relevant annex to the Prospectus. S14: Funding for the development and promotion (both trade and consumer) of the visitor economy, such as local attractions, trails, tours and tourism products more generally. S15: SME development grants and support, aligned with local and regional sectoral priorities and growth potential. This could include, providing tailored expert advice, matched grants and leadership training to enable manufacturing SMEs to adopt industrial digital technology solutions including AI artificial intelligence; robotics and autonomous systems; additive manufacturing; industrial internet of things; virtual reality; data analytics. The support is proven to leverage high levels of private investment into technologies that drive growth, productivity, efficiency and resilience in manufacturing. S16: Research and development grants supporting the development of innovative products and services, with a particular focus on low carbon goods and environmental services, and climate resilience. This could include investment to support the diffusion of innovation knowledge and activities. Support the commercialisation of ideas, encouraging collaboration and accelerating the path to market so that more ideas translate into industrial and commercial practices. S22: Support for growing the local social economy, including community businesses, cooperatives and social enterprises. S26: Business support measures to drive employment growth, particularly in areas of higher unemployment. S29: Support for new and existing businesses and start-ups aligned with local, regional and Scottish policy. Page 211
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DO YOU PLAN TO USE ANY INTERVENTIONS NOT INCLUDED IN THE SUPPORTING LOCAL BUSINESS LIST? State the name of each of these additional interventions and a brief description of each of these No Explain how each intervention meets the Supporting Local Business investment priority. Give evidence where possible, including why it is value money and the outcomes you want to deliver. N/A Do you consider that any of these interventions may provide a subsidy to potential recipients of the funding under the intervention’s planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes Detail the assessment you undertook to consider whether the intervention is a subsidy and any specific measures you will take to make sure the subsidy is permitted. HAVE YOU ALREADY IDENTIFIED ANY PROJECTS WHICH FALL UNDER THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY? Describe these projects, including how they fall under the Supporting Local Business investment priority and the location of the proposed project. 1. Tourism Sector Support. Improved digital infrastructure for data monitoring, evaluation & visitor bookability. Argyll and Bute wide. (S14) 2. Scientific Robotics Academy SME development grants and support, aligned with local and regional sectoral priorities and growth potential. This could include, providing tailored expert advice, matched grants and leadership training to enable manufacturing SMEs to adopt industrial digital technology solutions including AI artificial intelligence; robotics and autonomous systems; additive manufacturing; industrial internet of things; virtual reality; data analytics. The support is proven to leverage high levels of private investment into technologies that drive growth, productivity, efficiency and resilience in manufacturing. Argyll and Bute wide, nationally and internationally. (S15) 3. Innovation Support Service providing expert advice and capability reviews to help SMEs create innovation plans. Argyll and Bute wide. (S16) 4. Graduate Apprenticeship Opportunities in the Third Sector. Pilot subsidised employment costs for social enterprises for one year (S22) 5. Graduate Placement Programme providing graduate placement grants covering staff, training and travel costs. Argyll and Bute wide. (S26) 6. Business Development Package for local SMEs, providing enhanced start-up, recovery and growth support comprising grants, specialist advice and intensive support programmes. Grants to include costs for trade fair, accreditation, training, digital development, carbon reduction, innovation, R&D, exporting, wage subsidy for new employee and graduate placements. Specialist advice topics to include HR, Marketing, Digital, Finance, Tax, PR, Procurement/supply chain development, Business strategy, Exporting/Importing, Innovation, Intellectual Property, Net Zero. Argyll and Bute wide. (S29) Do you consider these projects may provide a subsidy to potential recipients of the funding under the proposed planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Detail the assessment you undertook to consider whether the proposed projects constitute a subsidy and any specific measures you will take to make sure the subsidy is permitted. Page 212
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Argyll and Bute Council must ensure that any subsidies (includes grants, loans at below market rate, loan guarantees at below market rate, tax breaks/relief or allowing a company to use publicly owned office space rent free) awarded to economic actors (anyone who puts goods or services on a market and could include a public body or a charity if they are acting commercially) comply with the UK’s international obligations. These include World Trade Organisation (WTO) rules and trade agreements such as the EU-UK Trade and Co-operation Agreement (EU-UK TCA). A Subsidy Risk Assessment was undertaken for interventions included in the Argyll and Bute UKSPF Investment Plan when support from the council might potentially be subject to these international agreements on controlling public subsidies. With regard to the relevant projects outlined in the Argyll and Bute UKSPF Investment Plan, the following questions have been posed: 1) Is the support given by a public authority? 2) Is the recipient of support an economic actor (i.e. placing goods or services on the market)? 3) Does the support provide a financial or in-kind benefit to the recipient which is not otherwise available on commercial/market terms? 4) Could the support affect international trade? If the answer to all of the above questions was ‘Yes’, then the support is a subsidy. If the answer to any of the above was ‘No’, then the support is not a subsidy. No further action is required and the recipient will be advised that this award is not a subsidy as per the UK’s international obligations. WHAT ARE THE OUTCOMES YOU WANT TO DELIVER UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY? SELECT ALL THAT APPLY. Outcome Tick if applicable Number of economically inactive individuals in receipt of benefits they are entitled to following support √ Increased active or sustained participants of UKSPF beneficiaries in community groups [and/or] increased employability through development of interpersonal skills √ Increased proportion of participants with basic skills (English, maths, digital and ESOL) Number of people in supported employment [and] number of people engaging with mainstream healthcare services √ Number of people sustaining engagement with keyworker support and additional services √ Number of people engaged in job-searching following support Number of people in employment, including self-employment, following support √ Number of people sustaining employment for 6 months Increased employment, skills and/or UKSPF objectives incorporated into local area corporate governance Number of people in education/training √ Increased number of people with basic skills (English, maths, digital and ESOL) √ Fewer people facing structural barriers into employment and into skills provision Increased number of people familiarised with employers’ expectations, including, standards of behaviour in the workplace √ Fewer people facing structural barriers into employment and into skills provision √ Page 213
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Number of people gaining a qualification or completing a course following support √ Number of people gaining qualifications, licences, and skills Number of economically active individuals engaged in mainstream skills education, and training. Number of people engaged in life skills support following interventions Number of people with proficiency in pre-employment and interpersonal skills (relationship, organisational and anger-management, interviewing, CV and job application writing) Multiply only - Increased number of adults achieving maths qualifications up to, and including, Level 2. √ Multiply only - Increased number of adults participating in maths qualifications and courses up to, and including, Level 2. √ None of the above SELECT THE INTERVENTIONS YOU INTEND TO USE WHICH MEET THE PEOPLE AND SKILLS INVESTMENT PRIORITY. YOU CAN SELECT AS MANY AS YOU LIKE. Intervention A full list of nation-specific interventions is available in the relevant annex to the Prospectus. S31: Employment support for economically inactive people: intensive and wrap-around one-to-one support to move people closer towards mainstream provision and employment., supplemented by additional and/or specialist life and basic skills (digital, English, maths (Multiply) and ESOL) support where there are local provision gaps. S33: Activities such as enrichment and volunteering to improve opportunities and promote wellbeing. S35: Support for employability programmes and advice including alignment with the No One Left Behind agenda, Fair Start Scotland and Scottish employability pipeline. This could include tailored support to help people in employment, who are not supported by mainstream provision to address barriers to accessing education and training courses. DO YOU PLAN TO USE ANY INTERVENTIONS NOT INCLUDED IN THE PEOPLE AND SKILLS LIST? State the name of each of these additional interventions and a brief description of each of these No Explain how each intervention meets the People and Skills investment priority. Give evidence where possible, including why it is value money and the outcomes you want to deliver. N/A Do you consider that any of these interventions may provide a subsidy to potential recipients of the funding under the intervention’s planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Page 214
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Detail the assessment you undertook to consider whether the intervention is a subsidy and any specific measures you will take to make sure the subsidy is permitted. ENGLAND ONLY: People and Skills interventions can only be used in 2022-2023 and 2023-2024 if you have identified a local voluntary and community provision, previously supported by the European Social Fund, at risk of closure. If you have not identified a suitable provision, you will not be able to select interventions for 2022-2023 and 2023- 2024 and your investment plan will not be approved. HAVE YOU ALREADY IDENTIFIED ANY PROJECTS for 2024-2025 WHICH FALL UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY? Yes Describe the projects for 2024-25, including how they fall under the People and Skills investment priority and the location of the proposed project. Do you consider these projects may provide a subsidy to potential recipients of the funding under the proposed planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes Detail the assessment you undertook to consider whether the proposed projects constitute a subsidy and any specific measures you will take to make sure the subsidy is permitted. HAVE YOU IDENTIFIED A LOCAL VOLUNTARY PROVISION AT RISK AS PART OF YOUR PEOPLE AND SKILLS INVESTMENT PRIORITIES? Yes No (If Yes) Describe the local voluntary provision at risk and your rationale for supporting it. Provide the European Social Fund Project Names and Project References for this voluntary and community provision at risk. What year do you intend to fund these projects? Select all that apply. 2022-2023 2023-2024 2024-2025 Describe the projects for 2022-2023 and 2023-2024, including how they fall under the People and Skills investment priority and the location of the proposed project. Do you consider these projects may provide a subsidy to potential recipients of the funding under the proposed planned activity? Page 215
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All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Detail the assessment you undertook to consider whether the proposed projects constitute a subsidy and any specific measures you will take to make sure the subsidy is permitted. SCOTLAND, WALES & NORTHERN IRELAND ONLY HAVE YOU ALREADY IDENTIFIED ANY PROJECTS WHICH FALL UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY? Yes No Describe the projects, including how they fall under the People and Skills investment priority and the location of the proposed project. 1. Pre-Employability Support Programme. Initial assessment, action planning and support, with individually tailored keyworker support for those furthest from the labour market. Argyll and Bute wide. (S31) 2. Adult Literacy and Numeracy Programme. Cohesive locally tailored support for those furthest from the labour market providing access to literacy and numeracy skills, with pathways into employability support and mentoring. Argyll and Bute wide. (S31) 3. Expansion of the Wider Achievement Programme for all secondary schools, providing support to assist vulnerable school leavers into employment via skills-based volunteering as part of an enhanced curriculum. Argyll and Bute wide. (S33) 4. Pre-Employability Support Programme Work Placements, providing individually tailored paid work placements. Argyll and Bute wide. (S33) 5. Positive Destinations Programme, providing support for young people leaving care with no positive destination, those with a learning disability, those leaving the criminal justice system, support to boost confidence for those who have been economically inactive and support for those who require assistance in determining suitable employment or training pathways. Argyll and Bute wide. (S33) 6. Pre-Employability Support Programme Training, providing access to funded training courses. Argyll and Bute wide. (S35) 7. Supported Employment Experience in the Third Sector. Intermediate Labour Market support for those not in employment, offering a waged employment experience, training, and support to participant and third sector employer. Argyll and Bute wide. (S35) Do you consider these projects may provide a subsidy to potential recipients of the funding under the proposed planned activity? All bids must also consider how they will deliver in line with subsidy control as set out in the guidance. Yes No Detail the assessment you undertook to consider whether the proposed projects constitute a subsidy and any specific measures you will take to make sure the subsidy is permitted. Argyll and Bute Council must ensure that any subsidies (includes grants, loans at below market rate, loan guarantees at below market rate, tax breaks/relief or allowing a company to use publicly owned office space rent free) awarded to economic actors (anyone who puts goods or services on a market and could include a public body or a charity if they are acting commercially) comply with the UK’s international obligations. These include World Trade Organisation (WTO) rules and trade agreements such as the EU-UK Trade and Co-operation Agreement (EU-UK TCA). A Subsidy Risk Assessment was undertaken for interventions included in the Argyll and Bute UKSPF Investment Plan when support from the council might potentially be subject to these international agreements on controlling public subsidies. With regard to the relevant projects outlined in the Argyll and Bute UKSPF Investment Plan, the following questions have been posed: 1) Is the support given by a public authority? Page 216
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2) Is the recipient of support an economic actor (i.e. placing goods or services on the market)? 3) Does the support provide a financial or in-kind benefit to the recipient which is not otherwise available on commercial/market terms? 4) Could the support affect international trade? If the answer to all of the above questions was ‘Yes’, then the support is a subsidy. If the answer to any of the above was ‘No’, then the support is not a subsidy. No further action is required and the recipient will be advised that this award is not a subsidy as per the UK’s international obligations. Approach to delivery and governance In this section, we will ask you about: Structures you have in place to support delivery Support you have from stakeholders and the local community How you’ve engaged with MPs as part of your investment plan Opportunities you have identified to work with other places Places need to show how MPs that cover the lead local authority have been engaged on the investment plan and whether they support it. More detail on the role of MPs can be found here. STAKEHOLDER ENGAGEMENT AND SUPPORT Have you engaged with any of the following as part of your investment plan? Select all that apply. Public sector organisations Private sector organisations Civil society organisations Describe how you have engaged with any of these organisations. Give examples where possible. A Partnership Group was established that was made up of members of the current Argyll and Bute Community Planning Partnership and expanded to include other stakeholders. Information on the allocation also communicated to the Argyll Economic Resilience Forum (private sector organisations). Summarise the governance structures you have in place, including how any advisory panels or associated partnership groups are made up The Final Argyll and Bute UKSPF Investment Plan was considered at the Argyll and Bute Council Policy and Resources Committee on 11th August 2022. Many of the projects are from members of discrete partnerships which report to the Argyll and Bute Community Planning Partnership Management Committee, such as: Community Planning Partnership; Community Planning Partnership Climate Change working group – Communities and Place project governance. Community Learning and Development (CLD) Partnership – Communities and Place project governance Argyll and Bute Employability Partnership (ABEP). Confirm all MPs covering your lead local authority have been invited to join the local partnership group. Yes: Brendan O’Hara – separate discussion No Are there MPs who are not supportive of your investment plan? tbc Yes No (If Yes) Who are the MPs that are not supportive and outline their reasons why. Page 217
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PROJECT SELECTION Are you intending to select projects in any way other than by competition for funding? Yes No (If Yes) Describe your approach to selecting projects, and why you intend to do it this way. As the initial proposals for inclusion in the Argyll and Bute UKSPF Investment Plan were 220% greater than the allocation, everyone who submitted a proposal was asked to confirm the minimum viable project cost, where costs could be scaled back and identify any interventions that could be dropped. As costs were still higher than the allocation further to this exercise, officers developed eligibility criteria and an associated RAG scoring system For instance, consideration was given to the wider policy and funding landscape, existing activities and programmes, other new funding opportunities and other complementary interventions from other national or local schemes. This was then followed up by discussions with all internal colleagues, partners and stakeholders to enable the preparation of the final plan for approval at the Argyll and Bute Council Policy and Resources Committee meeting on 11th August 2022. Delivery of some projects will be subject to a grant offer and/or competitive procured approach with support and advice from Argyll and Bute Council’s Procurement Team. These processes will be put in place during the late summer/early autumn, so that we will be ready to start on the ground delivery as soon as the Argyll and Bute UK Shared Prosperity Fund Investment Plan is approved by the UK Government (late October onwards). DO YOU INTEND TO WORK WITH OTHER PLACES ON ANY OF THE INTERVENTIONS WHICH FALL UNDER THE COMMUNITIES AND PLACE INVESTMENT PRIORITY? Which interventions do you intend to collaborate on? Select all that apply. Intervention Tick if applicable A full list of nation-specific interventions is available in the relevant annex to the Prospectus. S9: Investment in capacity building, resilience (including climate change resilience) and infrastructure support for local civil society and community groups. Describe any interventions not included in this list? Who are the places you intend to collaborate with? Shaping Places for Wellbeing – working with West Dunbartonshire, and five other local authorities in Scotland. Page 218
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DO YOU INTEND TO WORK WITH OTHER PLACES ON ANY OF THE INTERVENTIONS WHICH FALL UNDER THE SUPPORTING LOCAL BUSINESS INVESTMENT PRIORITY? Which interventions do you intend to collaborate on? Select all that apply. Intervention Tick if applicable A full list of nation-specific interventions is available in the relevant annex to the Prospectus. S15: SME development grants and support, aligned with local and regional sectoral priorities and growth potential. This could include, providing tailored expert advice, matched grants and leadership training to enable manufacturing SMEs to adopt industrial digital technology solutions including AI artificial intelligence; robotics and autonomous systems; additive manufacturing; industrial internet of things; virtual reality; data analytics. The support is proven to leverage high levels of private investment into technologies that drive growth, productivity, efficiency and resilience in manufacturing. √ Describe any interventions not included in this list? Who are the places you intend to collaborate with? A range of individuals, institutes and organisations throughout the UK and further afield. DO YOU INTEND TO WORK WITH OTHER PLACES ON ANY OF THE INTERVENTIONS WHICH FALL UNDER THE PEOPLE AND SKILLS INVESTMENT PRIORITY? Which interventions do you intend to collaborate on? Select all that apply. Intervention Tick if applicable A full list of nation-specific interventions is available in the relevant annex to the Prospectus. S35: Support for employability programmes and advice including alignment with the No One Left Behind agenda, Fair Start Scotland and Scottish employability pipeline. This could include tailored support to help people in employment, who are not supported by mainstream provision to address barriers to accessing education and training courses. √ Describe any interventions not included in this list? Page 219
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Who are the places you intend to collaborate with? All other local authorities across Scotland in terms of standard approaches and governance issues with regard to the Scottish Government’s No One Left Behind employability agenda and how this complements and aligns the UKSPF Investment Plan interventions, in particular S35. PUBLIC SECTOR EQUALITY DUTY How have you considered your public sector equality duty in the design of your investment plan? Yes. Fairer Scotland Duty - The Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on particular public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio-economic disadvantage, when making strategic decisions and how this has been implemented. Equalities - all activities will comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations. Socio-economic Duty - all project activities will comply with the council’s socio-economic duty. Islands - interventions under the UKSPF will be delivered across the Argyll and Bute area, including island communities. How will you consider your public sector equality duty when implementing your investment plan, including in the selection of projects? All activities and interventions will comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations. This will be an essential criteria for all projects delivered through the Argyll and Bute UK Shared Prosperity Fund Investment Plan. RISKS Have you identified any key risks that could affect delivery, for example lack of staff or expertise? Yes No (If Yes) Describe these risks or issues, including the contingency measures you have in place to mitigate them. A staff resource will need to be employed to oversee the delivery, in particular the outputs and outcomes, of all the projects included in the Argyll and Bute UK Shared Prosperity Fund Investment Plan, 2022-25. Have you identified any key fraud risks that could affect UKSPF delivery? Yes No (If Yes) Describe these risks or issues, including the contingency measures you have in place to mitigate them. Page 220
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Capacity and capability In this section, we will ask you about: The capacity and capability of your team to manage funding The resources you have in place for work related to UKSPF Your answers here will help us know how to support you with delivery. They will not affect the amount of funding you will get. Answer as honestly as possible. TEAM RESOURCE How many people (FTE) will be put in place to work with UKSPF funding? 1.5 new full-time equivalent jobs (FTEs) plus 2 FTEs of existing staff. Describe what role these people will have, including any seniority and experience. Economic Growth Manager, Argyll and Bute Council (existing staff) Senior Development Officer, Argyll and Bute Council, (existing post, currently vacant – will recruit). New UKSPF Officer, Argyll and Bute Council (full-time: 100% funding) New Administration Support, Argyll and Bute Council (part-time: 50% funding). Strong capability: Has extensive experience and/or a proven track record of delivery in this area. Strong capacity: High degree of confidence that there is enough staffing/resource to manage funding in this area. Some capability: Has previous experience of delivery in this area. Some capacity: Confident that there is enough staffing/resource to manage funding in this area. Limited capability: Does not have previous experience and/or no track record of delivery in this area. Limited capacity: Limited confidence that there is enough staffing/resource to manage funding in this area. Additional resource may be needed to support delivery. CAPACITY AND CAPABILITY How would you describe your team’s current experience of delivering funding and managing growth funds? Very experienced Some experience No previous experience How would you describe your team’s current capability to manage funding for procurement? Strong capability Some capability Limited capability How would you describe your team’s current capability to manage funding for procurement? Strong capability Some capability Limited capability How would you describe your team’s current capacity to manage funding for procurement? Strong capacity Some capacity Limited capacity How would you describe your team’s current capability to manage funding for subsidies? Strong capability Some capability Limited capability How would you describe your team’s current capacity to manage funding for subsidies? Strong capacity Some capacity Limited capacity Page 221
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COMMUNITIES AND PLACE CAPACITY AND CAPABILITY Does your local authority have any previous experience of delivering the Communities and Place interventions you have select? Yes No How would you describe your team’s current capability to manage funding for Communities and Place interventions? Strong capability Some capability Limited capability Describe the key capability challenges (if you have any) for delivering Communities and Place interventions. This may include challenges within your local authority and/or your local/regional delivery system. Climate Change work – we are working with an established Climate Change working group of the Community Planning Partnership. There is commitment from partners, including the third sector, to undertake the associated project work on climate change activity. Describe what further support would help address these challenges. How would you describe your team’s current capacity to manage funding for Communities and Place interventions? Strong capability Some capability Limited capability Describe the key capacity challenges (if you have any) for delivering Communities and Place interventions. This may include challenges within your local authority and/or your local/regional delivery system. Describe what further support would help address these challenges. SUPPORTING LOCAL BUSINESS CAPACITY AND CAPABILITY Does your local authority have any previous experience of delivering the Supporting Local Business interventions you have select? Yes No How would you describe your team’s current capability to manage funding for Supporting Local Business interventions? Strong capability Some capability Limited capability Describe the key capability challenges (if you have any) for delivering Supporting Local Business interventions. This may include challenges within your local authority and/or your local/regional delivery system. Describe what further support would help address these challenges. Page 222
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How would you describe your team’s current capacity to manage funding for Supporting Local Business interventions? Strong capacity Some capacity Limited capacity Describe the key capacity challenges (if you have any) for delivering Supporting Local Business interventions. This may include challenges within your local authority and/or your local/regional delivery system. Staff resource. Describe what further support would help address these challenges. PEOPLE AND SKILLS CAPACITY AND CAPABILITY Does your local authority have any previous experience of delivering the People and Skills interventions you have select? Yes No How would you describe your team’s current capability to manage funding for People and Skills interventions? Strong capability Some capability Limited capability Describe the key capability challenges (if you have any) for delivering People and Skills interventions. This may include challenges within your local authority and/or your local/regional delivery system. Describe what further support would help address these challenges. How would you describe your team’s current capacity to manage funding for People and Skills interventions? Strong capacity Some capacity Limited capacity Describe the key capacity challenges (if you have any) for delivering People and Skills interventions. This may include challenges within your local authority and/or your local/regional delivery system. Staff resource. Page 223
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Describe what further support would help address these challenges. SUPPORT TO DELIVERY UKSPF All lead authorities can use up to 4% of their UKSPF allocation to support the delivery of their chosen interventions but by exception, lead authorities will be able to use more than 4%. Are you planning to use more than 4%? Yes No (If Yes) Explain why you wish to use more than 4%. Approvals (to be finalised, subject to P&R approval) Before submitting your investment plan, you should have approval from your: Chief Executive Officer Section 151 Officer Leader of your lead authority Do you have approval from your Chief Executive Officer for this investment plan? o Yes o No Do you have approval from your Section 151 Officer for this investment plan? o Yes o No Do you have approval from the leader of your lead authority for this investment plan? o Yes o No If you do not have approval from any of these people, please explain why this is: Additional documents You will have received an email giving you access to a folder where you will need to upload supporting evidence to your investment plan. All applicants must complete and upload the following spreadsheet to the folder prior to submitting their investment plan: Page 224
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- UKSPF Expenditure Profile spreadsheet - UKSPF Indicative Deliverables spreadsheet Your investment plan submission will be considered incomplete without the required documents. Have you completed and uploaded the two spreadsheets to the SharePoint folder as requested? o Yes o No Page 225
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SUMMARY OF PROJECTS AND PROGRAMMES For easy reference, Table A1 presents a summary of the projects and programmes for inclusion in the Argyll and Bute UKSPF Investment Plan. Table A1: Summary of Argyll and Bute UKSPF Investment Plan Projects / Programmes Communities and Place Predefined Intervention Project Allocation (exc. admin) S7: Funding for the development and promotion of wider campaigns which encourage people to visit and explore local areas. Tourism Marketing Support £155,000 S8: Funding for impactful volunteering and/or social action projects to develop social and human capital in local places. Community Planning Partnership Climate Change Working Group – community capacity building £60,000 S9: Investment in capacity building, resilience (including climate change resilience) and infrastructure support for local civil society and community groups. Extension of Shaping Places for Wellbeing Support £6,000 Vibrant and Living Spaces £304,262 S10: Community measures to reduce the cost of living, including through measures to improve energy efficiency, and combat fuel poverty and climate change. Extension of Flexible Food Fund - grants, advice and skills support for people struggling with cost of living £408,000 S12: Investment and support for digital infrastructure for local community facilities. Community Hubs £81,750 S13: Support for linking communities together and with employment opportunities with a focus on decarbonisation. Pre-loved School Uniform Project £140,000 Sub-total allocation for Communities and Place £1,155,012 Supporting Local Businesses Predefined Intervention Project Allocation (exc. admin) S14: Funding for the development and promotion (both trade and consumer) of Tourism Sector Support – £45,000 Page 226
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the visitor economy, such as local attractions, trails, tours and tourism products more generally. improved digital infrastructure for data monitoring, evaluation & visitor book ability Supporting Local Businesses (continued) Predefined Intervention Project Allocation (exc. admin) S15: SME development grants and support, aligned with local and regional sectoral priorities and growth potential. This could include, providing tailored expert advice, matched grants and leadership training to enable manufacturing SMEs to adopt industrial digital technology solutions including AI artificial intelligence; robotics and autonomous systems; additive manufacturing; industrial internet of things; virtual reality; data analytics. The support is proven to leverage high levels of private investment into technologies that drive growth, productivity, efficiency and resilience in manufacturing. Scientific Robotics Academy £299,900 S16: Research and development grants supporting the development of innovative products and services, with a particular focus on low carbon goods and environmental services, and climate resilience. This could include investment to support the diffusion of innovation knowledge and activities. Support the commercialisation of ideas, encouraging collaboration and accelerating the path to market so that more ideas translate into industrial and commercial practices. Innovation Support Service providing expert advice and capability reviews to help SMEs create innovation plans £100,000 S22: Support for growing the local social economy, including community businesses, cooperatives and social enterprises. Graduate Apprenticeship Opportunities in the Third Sector £71,154 S26: Business support measures to drive employment growth, particularly in areas of higher unemployment. Graduate Placement Programme providing graduate placement grants covering staff, £180,000 Page 227
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training and travel costs S29: Support for new and existing businesses and start-ups aligned with local, regional and Scottish policy. Business Development Package for local SMEs, providing enhanced start- up, recovery and growth support comprising grants, specialist advice and intensive support programmes £454,000 Sub-total allocation for Supporting Local Businesses £1,150,054 People and Skills Predefined Intervention Project Allocation (exc. admin) S31: Employment support for economically inactive people: intensive and wrap-around one-to-one support to move people closer towards mainstream provision and employment., supplemented by additional and/or specialist life and basic skills (digital, English, maths (Multiply) and ESOL) support where there are local provision gaps. Pre-Employability Support Programme £71,179 Adult Literacy and Numeracy Programme £165,559 People and Skills Predefined Intervention Project Allocation (exc. admin) S33: Activities such as enrichment and volunteering to improve opportunities and promote wellbeing Expansion of the Wider Achievement Programme for all secondary schools £125,000 Pre-Employability Support Programme Work Placements £331,410 Positive Destinations Programme, providing support for young people £137,475 Page 228
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S35: Support for employability programmes and advice including alignment with the No One Left Behind agenda, Fair Start Scotland and Scottish employability pipeline. This could include tailored support to help people in employment, who are not supported by mainstream provision to address barriers to accessing education and training courses. Pre-Employability Support Programme Training £97,765 Supported Employment Experience in the Third Sector £336,850 Sub-total allocation for People and Skills £1,265,238 Overall Allocation (exc. admin) £3,570,304 The above projects/programmes in Table A1 will involve a mixture of delivery models (again predefined by the UK Government) as follows: In-house provision; Procurement of service provision; Grants to public or private organisations; or Commissioning third party organisations. At present the majority of the Multiply budget will be subject to a procurement process. Page 229
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Appendix B: Project Scoring Assessment Framework Key to scoring: Pan Argyll delivery Replacement of Structural Fund activity Fit with local priorities Building/ extending proven project Additionality No alternative funds available Delivery infrastructure in place • Project delivers across all of Argyll and Bute Replacement of current Structural Funds project Aligns to Argyll and Bute priorities Track record of successful previous project in evidence Project would not go ahead without UKSPF No other options Can be delivered with existing resources (staff, processes) • Geographically limited currently but project will roll out Links to previous Structural Funds projects Aligns to regional or national priorities New project to Argyll but successful elsewhere UKSPF will increase scale, quality or duration of project Other funds could be utilised for some of the project Uses existing resources but requires additional resources • Project is localised and will remain so Project has no previous Structural Funds support No alignment New activity Project would go ahead anyway Other funds could be utilised for all of the project No resources currently in place to deliver Page 231
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Version 2 Funding Profile: Funding Sources 2022-23 2023-24 2024-25 Total UKSPF Allocation excluding Multiply £451,343 £902,686 £2,365,038 £3,719,067 Multiply Allocation £234,698 £270,806 £270,806 £776,310 Total UKSPF Allocation £686,041 £1,173,492 £2,635,844 £4,495,377 Please complete the funding profile for the three years. The funding profile total should correspond with your expenditure profile (Table B) totals. Appendix C - UKSPF Expenditure SpreadsheetTable A - Funding Profile Page 233
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Expenditure Profile Investment Priority Intervention UKSPF Allocation % of Total UKSPF Allocation 2022-23 2023-24 2024-25 Annual Expenditure Totals Capital 22/23 Revenue 22/23 Capital 23/24 Revenue 23/24 Capital 24/25 Revenue 24/25 Capital/Revenue Totals Supporting comments relating to expenditure Communities & Place S1: Place based investments, regen & town centre improvements 0% £0 £0 Communities & Place S2: Support/improve community assets & infrastructure projects 0% £0 £0 Communities & Place S3: Improvements to the natural environment, green & open space 0% £0 £0 Communities & Place S4: Design & management of the built & landscaped environment 0% £0 £0 Communities & Place S5: Support sport, arts, cultural, heritage & creative activities 0% £0 £0 Communities & Place S6: Active travel enhancements & small scale transport projects 0% £0 £0 Communities & Place S7: Campaigns to encourage visiting & exploring the local area £163,991 4% £55,000 £50,000 £50,000 £155,000 £0 £55,000 £0 £50,000 £0 £50,000 £155,000 Communities & Place S8: Impactful volunteering and/or social action projects £68,991 2% £20,000 £20,000 £20,000 £60,000 £20,000 £0 £15,000 £5,000 £15,000 £5,000 £60,000 Communities & Place S9: Investment in capacity building & resilience for local groups £328,244 9% £2,000 £57,359 £250,903 £310,262 £0 £0 £57,359 £0 £250,903 £0 £308,262 Communities & Place S10: Community measures to reduce the cost of living £416,991 11% £0 £0 £480,000 £480,000 £0 £0 £0 £0 £0 £408,000 £408,000 Communities & Place S11: Relevant feasibility studies 0% £0 £0 Communities & Place S12: Digital infrastructire for local community facilities £90,741 2% £20,000 £30,875 £30,875 £81,750 £0 £20,000 £0 £30,875 £0 £30,875 £81,750 Communities & Place S13: Linking communities with employment opportunities - decarbonisation £148,991 4% £0 £70,000 £70,000 £140,000 £0 £0 £0 £70,000 £0 £70,000 £140,000 Communities & Place Total for 'On-menu' Interventions £1,217,949 32% £97,000 £228,234 £901,778 £1,227,012 £20,000 £75,000 £72,359 £155,875 £265,903 £563,875 £1,153,012 Communities & Place Insert Bespoke Intervention 0% £0 £0 Communities & Place Insert Bespoke Intervention 0% £0 £0 Communities & Place Insert Bespoke Intervention 0% £0 £0 Communities & Place Insert Bespoke Intervention 0% £0 £0 Communities & Place Insert Bespoke Intervention 0% £0 £0 Communities & Place C&P Bespoke Interventions Total £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 Communities & Place Communities & Place Interventions Total £1,217,949 32% £97,000 £228,234 £901,778 £1,227,012 £20,000 £75,000 £72,359 £155,875 £265,903 £563,875 £1,153,012 Local Business S14: Development & promotion of the visitor economy £53,991 1% £10,000 £15,000 £20,000 £45,000 £0 £10,000 £0 £15,000 £0 £20,000 £45,000 Local Business S15: SME development grants & support. £308,891 8% £35,800 £100,000 £164,100 £299,900 £10,000 £25,800 £0 £100,000 £0 £164,100 £299,900 Local Business S16: R&D grants supporting innovative product & services £108,991 3% £20,000 £40,000 £40,000 £100,000 £0 £20,000 £0 £40,000 £0 £40,000 £100,000 Local Business S17: Development & support of appropriate innovation infrastructure 0% £0 £0 Local Business S18: Investing in enterprise infrastructure, site development projects 0% £0 £0 Local Business S19: Strengthening local entrepreneurial ecosystems 0% £0 £0 Local Business S20: Expert business advice & support programmes, local & regional 0% £0 £0 Local Business S21: Bid for & host international business events 0% £0 £0 Local Business S22: Growing the local social economy. £80,145 2% £0 £35,577 £35,577 £71,154 £0 £0 £0 £35,577 £0 £35,577 £71,154 Local Business S23: Develop angel investor networks nationwide 0% £0 £0 Local Business S24: Export grants to support businesses to grow overseas trading 0% £0 £0 Local Business S25: Developing existing or emerging local strengths - low carbon & climate 0% £0 £0 Local Business S26: Business support measures to drive employment growth £188,991 5% £30,000 £75,000 £75,000 £180,000 £0 £30,000 £0 £75,000 £0 £75,000 £180,000 Local Business S27: Support relevant feasibility studies 0% £0 £0 Local Business S28: Business resilience & Covid-19 recovery 0% £0 £0 Local Business S29: Business support aligned with local, regional & Scottish policy £462,991 12% £0 £95,897 £358,103 £454,000 £0 £0 £28,769 £67,128 £142,431 £215,672 £454,000 Local Business S30: Investment to protect from natural hazards, flooding & coastal erosion 0% £0 £0 Local Business Total for 'On-menu' Interventions £1,204,000 32% £95,800 £361,474 £692,780 £1,150,054 £10,000 £85,800 £28,769 £332,705 £142,431 £550,349 £1,150,054 Local Business Insert Bespoke Intervention 0% £0 £0 Local Business Insert Bespoke Intervention 0% £0 £0 Local Business Insert Bespoke Intervention 0% £0 £0 Local Business Insert Bespoke Intervention 0% £0 £0 Local Business Insert Bespoke Intervention 0% £0 £0 Local Business LB Bespoke Interventions Total £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 Local Business Local Business Interventions Total £1,204,000 32% £95,800 £361,474 £692,780 £1,150,054 £10,000 £85,800 £28,769 £332,705 £142,431 £550,349 £1,150,054 People & Skills S31: Employment support for economically inactive people £254,720 7% £36,630 £76,818 £123,291 £236,739 £0 £36,630 £0 £76,818 £0 £123,291 £236,739 People & Skills S32: Courses including basic skills for those not economically inactive 0% £0 £0 People & Skills S33: Enrichment & volunteering activities £620,858 17% £132,167 £115,116 £346,602 £593,885 £15,940 £116,227 £12,708 £102,408 £12,808 £333,794 £593,885 People & Skills S34: Increase levels of digital inclusion, essential digital skills 0% £0 £0 People & Skills S35: Employability programmes & advice - No One Left Behind agenda etc £452,597 12% £71,692 £84,938 £277,985 £434,615 £0 £71,692 £0 £84,938 £0 £277,985 £434,615 People & Skills S36: Local areas to fund local skills needs 0% £0 £0 People & Skills S37: Green skills courses 0% £0 £0 People & Skills S38: Support local digital skills 0% £0 £0 People & Skills S39: Education & skills targeting the vulnerable leaving school 0% £0 £0 People & Skills S40: Support for community learning & development 0% £0 £0 People & Skills S41: New partnership & project-based entrepreneurial learning 0% £0 £0 People & Skills Total for 'On-menu' Interventions £1,328,175 35% £240,489 £276,872 £747,878 £1,265,239 £15,940 £224,549 £12,708 £264,164 £12,808 £735,070 £1,265,239 People & Skills Insert Bespoke Intervention 0% £0 £0 People & Skills Insert Bespoke Intervention 0% £0 £0 People & Skills Insert Bespoke Intervention 0% £0 £0 People & Skills Insert Bespoke Intervention 0% £0 £0 People & Skills Insert Bespoke Intervention 0% £0 £0 People & Skills P&S Bespoke Interventions Total £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 People & Skills People & Skills Intervention Total £1,328,175 35% £240,489 £276,872 £747,878 £1,265,239 £15,940 £224,549 £12,708 £264,164 £12,808 £735,070 £1,265,239 Multiply S42: Courses designed to increase confidence with numbers 0% £0 £0 Multiply S43: Courses for parents wanting to increase numeracy skills 0% £0 £0 Multiply S44: Courses for prisoners, those recently released or on temporary licence 0% £0 £0 Multiply S45: Courses aimed at encouraging people to upskill to access jobs/careers 0% £0 £0 Multiply S46: Additional relevant maths modules in vocational courses 0% £0 £0 Multiply S47: Innovative programmes delivered with employers 0% £0 £0 Multiply S48: Intensive& flexible courses targetted at those without Level 5 maths 0% £0 £0 Multiply S49: Courses designed to help people use numeracy to manage money 0% £0 £0 Multiply S50: Courses for 19s or over leaving or just left the care system 0% £0 £0 Multiply S51: Provision developed in partnership with community organisations 0% £0 £0 Multiply Total for 'On-menu' Interventions £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 Multiply Insert Bespoke Intervention 0% £0 £0 Multiply Insert Bespoke Intervention 0% £0 £0 Multiply Insert Bespoke Intervention 0% £0 £0 Multiply Insert Bespoke Intervention 0% £0 £0 Multiply Insert Bespoke Intervention 0% £0 £0 Multiply Multiply Bespoke Interventions Total £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 Multiply Multiply Interventions Total £0 0% £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £3,750,124 100% £433,289 £866,580 £2,342,436 £3,642,305 £45,940 £385,349 £113,836 £752,744 £421,142 £1,849,294 £3,568,305Allocation Totals UKSPF Allocation Annual Expenditure UKSPF Allocation Capital/Revenue Split (£) The table below should be completed by intervention. Enter the amount of the UKSPF allocation you are assigning to each intervention in column C then provide an annual expenditure profile within columns E to G for each Financial Year. Capital and revenue amounts (£) should be entered for each intervention by financial year in columns I to N (please see minimum capital % for each financial year in the guidance to support your calculations). Interventions must be completed by March 2025 as detailed in Section 7 of the Prospectus. Table B - Expenditure Profile Page 234
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Communities & Place C&P Bespoke C&P Totals Local Businesses LB Bespoke LB Totals People & Skills P&S Bespoke P&S Totals Multiply Multiply Bespoke Multiply Totals £ Fund Total % Fund Total Cap% Rev% Cap% Rev% Cap% Rev% Cap% Rev% 1 £97,000 £0 £97,000 £95,800 £0 £95,800 £240,489 £0 £240,489 £0 £0 £0 £433,289 12% 20.62% 77.32% 10.44% 89.56% 6.63% 93.37% 10.60% 88.94% 2 £228,234 £0 £228,234 £361,474 £0 £361,474 £276,872 £0 £276,872 £0 £0 £0 £866,580 24% 31.70% 68.30% 7.96% 92.04% 4.59% 95.41% 13.14% 86.86% 3 £901,778 £0 £901,778 £692,780 £0 £692,780 £747,878 £0 £747,878 £0 £0 £0 £2,342,436 64% 29.49% 62.53% 20.56% 79.44% 1.71% 98.29% 17.98% 78.95% £3,642,305 100% For Internal Use Only LB Revenue/Capital P&S Revenue/Capital Total Revenue/Capital £1,265,239 £0 Excluding Multiply 2023/24 2024/25 IP Totals £1,227,012 £1,150,054 Funding Period: 2022/23 Allocation Summary UKSPF Allocation Total Expenditure by Investment Priority C&P Revenue/Capital Table C - Allocation Summary Page 235
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Appendix D: Indicative Outputs and Impacts – as of 2nd August 2022 Table D1: Indicative Outputs (subject to revision) Intervention number and measure Number S7 Number of organisations receiving financial support other than grants 1 S7 Number of organisations receiving grants 1 S7 Number of organisations receiving non-financial support 3000 S7 Number of people reached 1,200,000 S8 Number of local events or activities supported 40 S8 Number of organisations receiving grants 30 S8 Number of projects successfully completed 35 S8 Number of volunteering opportunities supported 50 S9 Amount of green or blue space created or improved 150 S9 Number of amenities/facilities created or improved 4 S9 Number of organisations receiving financial support other than grants 6 S9 Number of organisations receiving grants 6 S9 Number of organisations receiving non-financial support 4 S9 Number of people attending training sessions 40 S9 Number of Tourism, Culture or Heritage assets created or improved 9 S10 Number of households receiving support 750 S10 Number of households supported to take up energy efficiency measures 500 S10 Number of organisations receiving financial support other than grants 1 S10 Number of people reached 1,500 S12 Number of facilities supported/created 2 S12 Number of organisations receiving non-financial support 10 S13 Number of organisations receiving financial support other than grants 7 S13 Number of organisations receiving non-financial support 7 S13 Number of people supported to gain employment 10 S14 Number of organisations receiving financial support other than grants 1 S15 Number of enterprises receiving non - financial support 85 S15 Number of people attending training sessions 960 S16 Number of enterprises receiving non-financial support 15 S22 Number of enterprises receiving non-financial support 4 S26 Number of enterprises receiving grants 21 S29 Number of enterprises receiving grants 58 S29 Number of enterprises receiving non-financial support 60 S29 Number of potential entrepreneurs assisted to be business ready 20 S31 Number of economically inactive people engaging with keyworker support services 150 S31 Number of effective engagements between keyworkers and additional services 1248 S31 Number of people receiving support to gain employment 127 S31 Number of people receiving support to sustain employment 40 S31 Number of people supported to access basic skills courses 108 S31 Number of people supported to engage in job searching 187 S31 Number of socially excluded people accessing support 54 Page 237
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S33 Number of people supported to participate in education 4,030 S33 Number of people taking part in work experience programmes 70 S33 Number of volunteering opportunities supported 550 S35 Number of people in employment engaging with the skills system 70 S35 Number of people retraining 75 S35 Number of people supported to gain a qualification or complete a course 170 Table D2: Indicative outcomes (subject to revision) Intervention number and measure Number S8 Number of volunteering opportunities created as a result of support 70 S9 Improved engagement numbers (% increase) 5 S10 Increased take-up of energy efficiency measures (% increase) 2 S12 Improved perception of facility/infrastructure (% increase) 2 S12 Number of premises with improved digital connectivity 2 S13 Number of people in employment, including self-employment, following support 10 S15 Number of enterprises adopting new to the firm technologies or processes 60 S15 Number of organisations engaged in new knowledge transfer activity 60 S22 Jobs created as a result of support 4 S26 Jobs created as a result of support 21 S29 Number of new enterprises created as a result of support 20 S31 Number of economically inactive people accessing benefits they are entitled to following support 130 S31 Number of people engaging with mainstream healthcare services 111 S31 Number of people in employment, including self-employment following support 127 S31 Number of people in supported employment 40 S31 Number of people reporting increased employability through development of interpersonal skills funded by UKSPF 122 S31 Number of people sustaining engagement with keyworker support and additional services 130 S31 Number of people with basic skills following support 25 S33 Number of people experiencing reduced structural barriers into employment and into skills provision 4,060 S33 Number of people familiarised with employers’ expectations, including, standards of behaviour in the workplace 130 S33 Number of people in education/training following support 20 S33 Number of people in employment, including self-employment following support 60 S35 Number of people in education/training following support 85 S35 Number of people in employment, including self-employment following support 130 S35 People gaining a qualification or completing a course following support 100 Subject to revision. Officer verbal update to be provided, as appropriate, at the Policy & Resources Committee meeting. Page 238
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 11 AUGUST 2022 PLACE BASED INVESTMENT AND CROWN ESTATE FUND 2022/23 – REMAINING FUNDING ALLOCATIONS AND POSSIBLE PROJECTS 1.0 EXECUTIVE SUMMARY 1.1 As members will recall Argyll and Bute Council has been allocated £712,000 for financial year 2022/23 from Scottish Government, via its Place Based Investment (PBI) Programme. At the meeting of the Policy and Resources Committee on 16 May members agreed to allocate £322,486 of the PBI funding to some initial projects. The purpose of this report is to seek members’ consideration of the reminder of the £322,486 unallocated PBI funding for 2022/23. 1.2 The report also asks members to give consideration to the unallocated Crown Estate (CE) funding for 2022/23. As with the PBI funding allocation the Policy and Resources Committee on 16 May also agreed to allocate CE to a number of initial projects. This means that, based on the prudent estimate of £1.0m of anticipated funding in 2022/23, and taking into account the allocation also agreed at February Council, there remains £397,453 available to be allocated by members. 1.3 This report provides the basic criteria that needs to be considered and adhered to when determining which potential projects could be supported via the PBI and CE allocation for 2022/23. In addition to the criteria itself the PBI funding for 2022/23 must be committed by 31st March 2023 and be evidenced by, at minimum, a fully let contract or commencement of works in order to avoid having to return any unspent funds to Scottish Government. 1.4 In order to advance this process it is proposed that the Executive Director with responsibility for Development and Economic Growth seeks suggestions for potential projects which would fit within the funds criteria and timeline from all Elected Members. It is also proposed that a delegation is given to the Executive Director with responsibility for Development and Economic Growth, in consultation with the Leader, Depute Leader, and Leader of the largest Opposition Group to agree the expenditure on projects that fit best for the 2022/23 allocation. Page 239 Agenda Item 9
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1.5 The suggestion is that the focus of the projects for 2022/23 should be in respect of those existing projects that are well advanced, relate to Council assets or to third party projects we are currently working closely with and there is a time constraint associated with them and they can be readily taken forward to meet the PBI and CE timelines, and for the added value that they can offer to our communities. 1.6 It is worth noting that in addition to this year’s allocation for PBI, the Scottish Government has committed to continuing to provide local authorities with funding from its PBI Programme on an annual basis for the next 3 financial years. Although the annual share for Argyll and Bute in subsequent years is yet to be fully determined, it is likely to be of a level that could deliver a number of key projects, and which could meaningfully support the economic recovery of the area. In addition the CE funding is also likely to be available in subsequent years. 1.7 Depending on the response and suggestions from members the fact that there will be funding available in subsequent years for both PBI and CE, could allow any projects that meet with the criteria but cannot be delivered within this year’s allocation timeframe or were not an immediate priority, to be put forward for consideration as part of future year’s allocations. Although it should be borne in mind that if LUF bid were to be successful that some PBI and CE funding has been put forward as match and would need to be set aside. RECOMMENDATIONS It is recommended that Policy and Resources Committee agree: a) That the Executive Director with responsibility for Development and Economic Growth seeks suggestions for potential projects that would fit with the funds criteria and timeline from all Elected Members. b) That delegated authority be given to the Executive Director with responsibility for Development and Economic Growth, in consultation with the Leader and Depute Leader of the Council, and Leader of the largest Opposition Group to agree expenditure on the projects that fit best for the 2022/23 allocation, following receipt of any suggestions. Page 240
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 11 AUGUST 2022 PLACE BASED INVESTMENT AND CROWN ESTATE FUND 2022/23 – REMAINING FUNDING ALLOCATION AND POSSIBLE PROJECTS 2.0 INTRODUCTION 2.1 The council has been allocated £712,000 from Scottish Government for financial year 2022/23 for capital ‘place’ regeneration projects. At the meeting of the Policy and Resources Committee on 16 May members agree to allocate £322,486 of the PBI funding to some initial projects. The purpose of this report is to seek member’s consideration of the reminder of the £322,486 unallocated PBI funding for 2022/23 taking into account the PBI criteria as set by Scottish Government and the associated timeline for spend and resource implication. As part of the annual reporting requirements for this fund, the Council has to advise how the funding has been spent across the categories. 2.2 The report also asks members to give consideration to the unallocated Crown Estate (CE) funding for 2022/23. As with the PBI funding allocation, the May Policy and Resources Committee also agreed to allocate CE to a number of initial projects. This means that, based on the prudent estimate of £1.0m of anticipated funding in 2022/23, and taking into account the allocation also agreed at February Council, there remains £397,453 available to be allocated by members. As with the PBI funding, as part of the annual reporting requirements for this fund, the Council has to advise how the funding has been spent across the categories. 2.3 Any projects proposed would need to be considered to fit strongly with the PBI and CE criteria, deliver on the Council’s Economic Recovery Strategy, are time critical, add value to investment that has already been made by the Council, deliver on our regeneration outcomes for our places, take account of available officer resources and take account of the relatively tight timeline that we need to meet to align with the funding. 3.0 RECOMMENDATIONS 3.1 It is recommended that Policy and Resources Committee agree: Page 241
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a) That the Executive Director with responsibility for Development and Economic Growth seeks suggestions for potential projects that would fit with the funds criteria and timeline from all Elected Members. b) That delegated authority be given to the Executive Director with responsibility for Development and Economic Growth, in consultation with the Leader and Depute Leader of the Council, and Leader of the largest Opposition Group to agree expenditure on the projects that fit best for the 2022/23 allocation, following receipt of any suggestions. 4.0 DETAIL 4.1 The 2020 Programme for Government committed to establishing a Place Based Investment Programme (PBIP), linking and aligning place-based funding initiatives. Scottish Government confirmed that Local Government would be receiving a share of the PBIP funding over a 5 year period, including the initial year 2021/22, to support and advance place-based investment and build on the strong partnership currently existing through the Regeneration Capital Grant Fund. As has been the case this year, Argyll and Bute Council will receive a share of this capital funding over the subsequent 3 years. 4.2 Information has been provided below to assist members when considering which project suggestions would best fit with the PBI programme in regard to allocating the reminder of the £322,486 PBI funding for 2022/23. It may also be helpful at this stage for members to be aware of a number of projects that officers are currently working on that may require additional funding this financial year. These include Gibraltar Street public realm projects in Oban, tender process to commence in the next two months, Dunoon Burgh Hall project, this is currently being tendered by the Trust, Rockfield Outdoor space Community Wellbeing Hub and outdoor public green space and also worth noting that we are still awaiting the decision regarding the Islands Programme submissions. 4.3 The main objectives of the PBIP are: to link and align place-based initiatives, and establish a coherent local framework to implement the Place Principle; to support place policy ambitions such as town centre revitalisation, community led regeneration, 20 minute neighbourhoods and Community Wealth Building; to ensure that all place-based investments are shaped by the needs and aspirations of local communities; and, to accelerate our ambitions for net zero, wellbeing and inclusive economic development, tackling inequality and disadvantage, community involvement and ownership. 4.4 In regard to PBI funding can only be used for capital regeneration projects, Page 242
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and projects must aim to: link and align to place-based initiatives, and establish a coherent local framework to implement the Place Principle; support place policy ambitions, such as town centre revitalisation, community- led regeneration, 20 minute neighbourhoods and Community Wealth Building; ensure that all place-based investments are shaped by the needs and aspirations of local communities; and, accelerate net zero ambitions, wellbeing and inclusive economic development, tackling inequality and disadvantage, community involvement and ownership. 4.5 The funding for 2022/23 must be committed by 31st March 2023 and be evidenced by at minimum a fully let contract or commencement of works in order to avoid having to return any unspent funds to Scottish Government. This means that there is not much time to ensure that we meet with this timeframe are projects not only have to have the ability to meet the aims of the fund, but add value to existing pieces of work and are time critical. 4.6 The fund links closely to the ongoing reprioritisation focus of the Economic Growth service, and associated Economic Strategy and Economic Recovery Plan. With its ‘place’ focus, the fund also builds on and adds value to the previous year’s PBI funding as well as previous Town Centre Fund investment, as well as previous regeneration initiatives taken forward by the council. 4.7 The Crown Estate funding is targeted at the sustainability of coastal communities within the following categories: Environment Community Climate Change Economic Development. As part of the annual reporting requirements for this fund, the Council has to advise how the funding has been spent across the categories. 4.8 The challenge in respect of the fund is to identify projects that meet the PBI and CE criteria, and are able to be delivered within short timeframes with our limited staff resources. Projects to be delivered under the 2022/23 allocation need to be delivered in a 7 month period and therefore need to be sufficiently well advanced in terms of their development, straightforward to deliver and/or be ready to start on site, or be able to be delivered by a third party. 4.9 Under the PBI allocation for 2021/22 the council supported a total of 8 projects and prior to the commencement of PBI funding the council supported a total of 28 projects under the previous SG Town Centre Funding stream. As a number of those projects being supported through the previous year’s allocation are ongoing, the key issue has and continues to be the availability of internal resources to develop and deliver new projects. Page 243
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4.10 As with last year’s PBI funding the focus for this year’s PBI fund has to be on projects that are at delivery stage, and can definitely be delivered within the tight timeframe. The projects need to fit with the PBI criteria, have the ability to build on previous investments, and require the resources to be in place to ensure delivery within the timescales required by the Scottish Government. Ideally for this year’s funding the focus should be on existing projects that are well advanced, relate to council assets or to third party projects we are currently working closely with and there is a time constraint associated with them and they can be readily taken forward to meet the PBI and CE timelines, and for the added value that they can offer to our communities. 5.0 CONCLUSION 5.1 The relatively tight timescales associated with both of these funds, but more specifically the PBI fund, combined with the large number of existing projects being delivered by the council, make for a challenging place based investment programme. Any suggested projects should be focused on those that are time critical and fit well with the net zero ambitions of the Council and Government together with the 20 minute neighbourhood/wellbeing context and build on investment already in place, or projects identified through existing Place based work. 5.2 In addition to this year’s allocation, the Scottish Government has committed to continuing to provide local authorities with funding from its Place Based Investment Programme on an annual basis for the next 3 financial years. Although the annual share for Argyll and Bute in subsequent years is yet to be fully determined, it is likely to be of a level that could support the delivery of a number of key projects, and which could meaningfully support the economic recovery of the area. 5.3 In addition to the PBI funding the CE funding is also likely to be available in subsequent years. Depending on the response and suggestions from members the fact that there will be funding available in subsequent years for both PBI and CE, could allow any project suggestions that meet with the criteria but cannot be delivered within this year’s allocation timeframe or were not an immediate priority, to be put forward for consideration as part of future year’s allocations. Although it should be borne in mind that if the Regeneration Levelling Up Fund bid were to be successful that some PBI and CE future year funding has been put forward as match and would need to be set aside in subsequent years. 6.0 IMPLICATIONS 6.1 Policy – There is a need to comply with the Scottish Government ‘place’ policies as outlined in paragraph 4.3 and associated guidance for the Fund as well as the Crown Estate fund guidance outlines in paragraph 1.7 6.2 Financial – The Scottish Government expect that any uncommitted PBI funds by 1st April 2023 will be returned to Scottish Government. Page 244
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6.3 Legal – None 6.4 HR – Resourced from existing staff 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics - None 6.5.2 Socio-economic Duty – The Fund will support local economies through place- based centre regeneration activity. 6.5.3 Islands – The Fund will support island economies through place-based regeneration activity and has the potential to align with, and add value to, the Islands Infrastructure Investment Fund. 6.6. Risk – In order for each PBI project to progress to delivery stage, a fully let contract must be in place by 31st March 2023. The projects will be continually monitored to ensure that funds can be reallocated to another Place Based Investment Fund project to avoid having to return any uncommitted funds to Scottish Government at this time. 6.7 Climate Change – the projects deliver towards net zero and address Argyll and Bute’s carbon footprint. 6.8 Customer Service - None Executive Director with responsibility for Development and Economic Growth: Kirsty Flanagan Policy Lead for Economy and Rural Growth: Councillor Robin Currie 21 July 2022 For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk Audrey Martin Transformational Projects and Regeneration Manager Audrey.Martin@argyll-bute.gov.uk Page 245
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CLIMATE CHANGE BOARD 11th August 2022 ____________________________________________________________________________ COUNCIL CARBON EMISSIONS & CLIMATE INVESTMENT 2022 1.0 EXECUTIVE SUMMARY 1.1 Scotland has some of the most ambitious targets and progressive legislation in terms of climate change in the world and the public sector is being promoted as playing a leading role towards achieving net zero by 2045. As with other public bodies it has been a requirement for Argyll & Bute Council to monitor, record and publish contributing factors towards climate change for the past 6 years. The most recent results from the national ‘Reporting Requirements’ has recently been published in April 2022 and covers the previous financial year for 2020/21. 1.2 Around 160 public bodies (Councils, Health Boards, Government) published data in the past year and across Scotland there was a general downward trend in carbon emissions across the board – some of it will be attributable to impact of COVID19 pandemic where certain sectors like travel and construction were less active for part of the year but other factors include the general de-carbonisation of the national grid as we transition away from fossil fuels for generation of electricity. 1.3 Argyll & Bute Council saw our carbon emissions generated by our business activities drop for the fourth year in a row. Our carbon footprint has reduced from 28,643 tCO2e (tonnes of carbon dioxide equivalent) in 2019/20 to 26,619 tCO2e in 2020/21. This means around a 33% (third) reduction in emissions since recording commenced in 2015/16. There are a number of factors that have contributed to this reduction such as direct interventions to make buildings more energy & heat efficient, replacing traditional lightbulbs with LED, moving to electric or hybrid vehicles and treating municipal waste in different ways. The overall national grid becoming more reliant upon renewable energy sources (over fossil fuel) has also had a material impact. This reduction over this period is in line with the national average. 1.4 Our Climate Change Board have overall responsibility for the ‘reporting requirements’ submission and continue to develop new ways to reduce the Council’s Carbon Footprint. Our Council also adopted its second De-Carbonisation Plan in December 2021 to recognise the importance of setting out a plan to achieve net zero by 2045. There are also ambitious interim targets of reaching a 75% reduction by 2030 which is only 8 years away. It is recognised that whilst there may be some rapid progression to reduce emissions in early years some of the more stubborn and difficult sectors like waste, travel or heating will require whole systems changes and change in cultural behaviour to achieve them. 1.5 The Council in its February 2022 Budget also allocated additional funding of £500,000, building on previous £1.1m investments, for climate change, including projects within Argyll and Bute’s schools. This report outlines some of the projects Page 247 Agenda Item 10a
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this funding will be allocated to. 2.0 RECOMMENDATIONS 2.1 That the Policy & Resources Committee consider and agree the following: 2.1.1 Note the publication of the Council’s 2020/21 carbon emissions report and its continued positive trend highlighting that carbon dioxide equivalent emissions have reduced by 33% in past 6 years; and, 2.1.2 Note the climate change projects that will be developed in 2022 onwards that are aligned to the additional £500,000 commitment that was allocated at the February 2022 Council Budget. 2.1.3 Agree to the inclusion of the Policy Lead with responsibility for Climate Change as a member of the Climate Change Board. Page 248
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CLIMATE CHANGE BOARD 11th August 2022 COUNCIL CARBON EMISSIONS & CLIMATE INVESTMENT 2022 3.0 INTRODUCTION 3.1 The Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Order 2015 requires the 180 public bodies classified as major players to prepare an annual “Report on Compliance with Climate Change Duties” (Schedule 2). Argyll and Bute Council is one of these organisations required to publish annual emissions since 2015. The most recent publication has been released in April 2022 for the reporting period 2020/21. 3.2 The Climate Change Board report progress to the Policy and Resources Committee on a regular basis. This is the first report outlining activities of the Climate Change Board to the new Council and is useful to provide a baseline snapshot of what are the key contributors to Council emissions plus also successes and areas for improvement. The carbon footprint of the Council also aligns to De-Carbonisation Plan which was adopted by the Council in 2021 which starts to provide a routemap towards net zero by 2045. It should be noted that the reporting requirements solely record the emissions of the Council as a business and do not reflect overall or regional emissions like local industry, private sector, personal travel etc. As reported elsewhere, as a region, Argyll and Bute has one of the most favourable regional carbon footprints due to large land mass, high forest cover, low number of industrial polluters and low population. 3.3 All members of the Climate Change Board are asked at monthly meetings if reports are to be escalated to Policy & Resources Committee so content should be varied across various departments. Certain reports such as the De-carbonisation Tracker and annual carbon emissions report (this report) will be consistent features. It is also recommended that the Policy Lead with responsibility for Climate Change is invited to be a member of the Climate Change Board to ensure a seamless link with regards to strategic leadership and operational delivery. 4.0 RECOMMENDATIONS That the Policy & Resources Committee consider and agree the following: 4.1.1 Note the publication of the Council’s 2020/21 carbon emissions report and its continued positive trend highlighting that carbon dioxide equivalent emissions have reduced by 33% in past 6 years; and, 4.1.2 Note the climate change projects that will be developed in 2022 onwards that are aligned to the additional £500,000 commitment that was allocated at the February 2022 Council Budget; and, 4.1.3 Agree to the inclusion of the Policy Lead with responsibility for Climate Change as a Page 249
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member of the Climate Change Board. 5.0 BACKGROUND 5.1 Since 2015/16 Argyll & Bute Council has published data on its Carbon Emissions annually based on a nationally agreed framework of indicators. There has been an evolution of indicators over the years but most have stayed consistent so a general trend has been able to be formed as outlined in the table below. It should be noted that not all activities produce direct greenhouse gas emissions, however for the purposes of reporting activities are given a ‘tons of carbon dioxide equivalent’ rating so they can be more easily compared. This is industry standard approach. Table 1- Annual Emissions with Baseline Reference Year Year Scope1 Scope2 Scope3 Total Units Comments Baseline carbon footprint 2015/16 10767.7 11701.3 16995 39464 tCO2e Year 1 carbon footprint 2016/17 9146.4 9790.3 16593.8 35531 tCO2e Year 2 carbon footprint 2017/18 9437.6 7797.8 19569.4 36805 tCO2e Municipal waste to landfill is the Council's largest contributor to its carbon footprint; despite a reduction in municipal waste to landfill, the significant increase in the relevant carbon emissions factor has caused an upturn in scope 3 emissions. Year 3 carbon footprint 2018/19 8937.4 5862.49 19938.13 34,738 tCO2e This represents a 12% reduction in 3 years Year 4 Carbon Footprint 2019/20 8849 4687 15107 28643 tCO2e Year 5 Carbon Footprint 2020/21 8611 4178 13830 26619 tCO2e Page 250
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5.2 There is a positive (downward) trend across the Council as highlighted below. Graph 1 – Annual Carbon Emissions 5.3 All activity of the Council is monitored so it is important to understand the breakdown of emission sources. All departments have a responsibility and role to play in monitoring and reducing carbon emissions. Table 2 - Breakdown of emission sources Emission Source Emissions (tCO2e) Comments Refuse Municipal to Landfill 12,798 ~48% of total carbon footprint Grid Electricity 3,655 ~14% of total carbon footprint Natural Gas 4,042 ~15% of total carbon footprint – mainly used as heating source in buildings Fleet – all Diesel Vehicles 2,554 ~10% of total carbon footprint – bin lorries, cars, vans Gas Oil & LPG 2016 ~8% of total carbon footprint – mainly for building heating Business Miles (unspecified fuel) 274 ~1% of total carbon footprint Streetlighting 882 ~3% of total carbon footprint 39464 35531 36805 34738 28643 26619 20000 22000 24000 26000 28000 30000 32000 34000 36000 38000 40000 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 tCO2e Year Council Carbon Footprint Page 251
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All other activities 399 ~1 % of total carbon footprint includes collections for recycling, water treatment, tyre processing, glass / WEE recycling Graph 2 – Breakdown of emission sources 5.4 The relative sources of emissions by activity have remained fairly consistent for several years with processing municipal waste being responsible for around half of the entire emissions. Whilst overall all emission sources have reduced the proportions have remained relatively consistent. Future projects like Biodegradable Municipal Waste (BMW) Landfill Ban, switching to greener ways heat and power buildings and fleet replacement with low emissions vehicles will obviously have a significant impact on overall carbon footprint. 5.5 The Council have also invested in generating own sources of renewable heat and energy as outlined this year below:- Table 3 - Generation, consumption and export of renewable energy Renewable Electricity Renewable Heat TECHNOLOGY Total consumed by the organisation (kWh) Total exported (kWh) Total consumed by the organisation (kWh) Total exported (kWh) 48% 14% 15% 10% 8% 1% 3% 1% Argyll & Bute Breakdown of Emissions 2020/2021 Refuse Municipal to Landfill - 48% Grid Electricity - 14% Natural Gas -15% Fleet - all Diesel Vehicles -10% Gas Oil & LPG - 8% Business Miles (unspecified fuel) -1% Streetlighting -3% All other activities - 1% Page 252
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Solar PV 882843 0 Wind 15000 135000 Biomass 4678800 0 Air Source Heat Pump 130000 0 Graph 3 – Benchmarking of Council Carbon Emissions 5.6 The graph above highlights Argyll and Bute Council’s carbon emissions in relation to other local authorities who have published their 2020/21 data at this point. It is very difficult to make a direct comparison as population, physical size, internal processes (particularly waste treatment) and geographic factors all have a material impact on overall emissions. 6.0 Climate Change Projects 2022 6.1 The Council Budget which was approved in February 2022 included a provision for:- Additional funding of £0.5m, building on previous £1.1m investments, for climate change, including projects within Argyll and Bute’s schools. 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 Aberdeenshire Council Aberdeen City Council Angus Council Argyll and Bute Council City of Edinburgh Clackmannanshire Council Comhairle nan Eileen Siar Dumfries and Galloway Council Dundee City Council East Ayrshire Council East Dunbartonshire Council East Lothian Council East Renfrewshire Council Falkirk Council Fife Council Glasgow City Council Highland Council Inverclyde Council Midlothian Council Moray Council North Ayrshire Council North Lanarkshire Council Orkney Islands Council Perth and Kinross Council Renfrewshire Council Scottish Borders Council Shetland Islands Council South Ayrshire Council South Lanarkshire Council Stirling Council W est Dunbartonshire Council W est Lothian Council tCO2e Climate Change Reporting Year 2020 -21 tCO2e Reporting Year 2020 2021 Scottish Average Page 253
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6.2 In light of this additional investment and following discussions with the Climate Change Board it is proposed the following projects are pursued to further enhance our position:- 1. Non Domestic Energy Efficiency Framework (NDEEF)2. - £350,000 This is the funding framework that has been used in previous years to invest £1.5m of new greener more efficient property projects through energy transition and sustainable practices. Currently 18 unfunded projects at initial case selection. Projects will be developed and investment business cases taken to point of commitment in 2022/23. Due to most sites being on Education estate most will await school holidays for actual installation (some of them in 2023/24) to deliver. Contracts would be signed / committed in 2022/23 year. A list of projects that will be considered for Business Case will be:- PLEASE NOTE NOT ALL OF THESE PROJECTS WILL BE ABLE TO PROCEED WITH THIS BUDGET & ALL WILL BE SUBJECT TO BUSINESS CASE. THIS IS SCOPING LIST THAT WILL BE REFINED DEPENDING ON THE BUSINESS CASE ANALYSIS SITE CLIMATE CHANGE / ENERGY EFFICIENT TECHNOLOGY Carradale Primary School LED Lighting, Solar PV, BMS Optimisation, Heating Optimisation Hermitage Academy LED Lighting, BMS Optimisation, Heating Optimisation Lochgilphead Joint Campus LED Lighting, BMS Optimisation, Heating Optimisation Oban High School LED Lighting, Solar PV, BMS Optimisation, Heating Optimisation Dunoon Grammar School LED Lighting, BMS Optimisation, Heating Optimisation Rothesay Joint Campus LED Lighting, BMS Optimisation, Heating Optimisation Cardross Primary School LED Lighting, Solar PV, New Boiler System, BMS Optimisation Lismore Primary School LED Lighting, ASHP, BMS Optimisation Kirn Primary School LED Lighting, Solar PV, BMS Optimisation, Heating Optimisation Oban Joint Primary Campus LED Lighting, BMS Optimisation, Heating Optimisation Campbeltown Grammar School LED Lighting, Solar PV, BMS Optimisation, Heating Optimisation Tighnabruaich Primary School LED Lighting, ASHP, BMS Optimisation Port Ellen Primary School LED Lighting, ASHP, BMS Optimisation Lorn Resource Centre ASHP, BMS Optimisation Easdale Primary School ASHP, BMS Optimisation Keills Primary School LED Lighting, ASHP, BMS Optimisation Dalmally Primary School LED Lighting, ASHP, BMS Optimisation Page 254
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Blackhill Depot Solar PV LED- light emitting diode (energy efficient lighting) ASHP - Air Source Heat Pump (low carbon heating) BMS - Building management system 2. Evidence based routemap to net zero - £50,000 consultancy support Requirement to comply with the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020 New legislation that comes into effect in late 2022 which requires specific and scientific routemapping towards reaching net zero targets and model emissions based on activity. This will be for waste, roads, commercial services, airports etc Routemaps to Netzero require alignment to Council spending plans and need to be submitted in Nov 2022 £50,000 for consultancy support to deliver this (will be a cost pressure otherwise). Output will be compliant and evidence based routemap to net zero for the Council. To be taken forward in partnership with HIE, Western Isles Council & Hub North. 3. Local Heat and Energy Efficiency Strategy (LHEES) - £50,000 consultancy support The Local Heat and Energy Efficiency Strategies (Scotland) Order was developed in partnership with COSLA and laid in the Scottish Parliament on 11 March 2022. It places a duty on local authorities to produce Strategies and Delivery Plans on a 5 year cycle, with the first iteration due to be published by the end of 2023. In support of this duty, the Scottish Government is providing £2.4m of annual revenue funding, ABC share £75,000, confirmed at the end of May 2022. This is to allow each local authority to recruit 1 FTE post to focus of coordination of LHEES, with a further £25,000 per council per annum to procure or internally resource technically support. Officers will bring an update on progress in due course. If it is considered after analysis this funding is not required then the £50,000 will be retained for other activities outlined in this paper. 4. Regional support of Climate Action Project Manager within Community Planning Partnership (CPP) - £50,000 of part funded post The Argyll and Bute Community Planning Partnership (CPP) and the Adaptation Scotland programme has identified a clear need for an initiative for Argyll and Bute to make a thorough and strategic approach for action to combat Climate Change. This is a regional approach to address climate issues – not solely on Council related business. This requires a high degree of partnership and joint working from variety of stakeholders across the public, private and third sector to succeed as 1 grouping in isolation cannot address the cause and effect of climate change. The CPP Management Committee has appointed a sub group to review and set actions in partnership relating to climate change and one of their principle Page 255
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recommendations is to appoint a jointly funded Climate Action Project Manager post that will act in the interest of all CPP partners. Some partners such as NHS Highland have already committed funding to the creation of this new post which initially will be temporary for 3 years. The main activities of this new post will be to set up and a new regional Argyll and Bute Climate Action plan, a collaborative stakeholder approach to mitigating against and adapting to climate change with a strong focus on community involvement. The proposal is allocate £50,000 of funding from this budget to act as the Council’s contribution to this new CPP post. 7.0 Conclusions 7.1 It is a requirement to publish annual carbon emissions for the Scottish Government. This report highlights our overall emissions for most recent period 2020/21 and outlines that changes to this process will be forthcoming in future months due to change in The Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020. It also seeks to invite the Policy Lead with responsibility for Climate Change to be a member of the Climate Change Board to ensure a seamless link with regards to strategic leadership and operational delivery. 8. IMPLICATIONS 8.1 Policy – underpins commitment to addressing Climate Change. 8.2 Financial – Paper reports on downward trend of emissions and can be linked to greater efficiency of ongoing utility costs. Proposed expenditure of allocated climate change funding from 2022 Budget. 8.3 Legal – Meeting requirements of climate change Scotland act. 8.4 HR – None 8.5 Fairer Scotland Duty 8.5.1 Equalities – Protected characteristics – None 8.5.2 Socio economic Duty – None 8.5.3 Islands – None 8.6 Climate change – Direct link confirming downward trend in emissions and proposed future projects that will address climate change. 8.7 Risk – Not addressing impacts or causes of climate change can lead to increased cost or censure if targets are not met. 8.8 Customer Service – None. Douglas Hendry, Executive Director with responsibility for Commercial Services Page 256
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Councillor Ross Moreland – Policy Lead Climate Change & Environment 14th July 2022 For further information contact: Ross McLaughlin Head of Commercial Services The Helensburgh and Lomond Civic Centre ross.mclaughlin@argyll-bute.gov.uk Page 257
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ARGYLL AND BUTE COUNCIL POLICY & RESOURCES COMMITTEE CLIMATE CHANGE BOARD 11th August 2022 DE-CARBONISATION PLAN – ACTION TRACKER & CASE STUDIES 1.0 EXECUTIVE SUMMARY 1.1 Addressing Climate Change is a global issue that is hugely reliant on partnership, collaboration and the actions of us all. No single organisation can tackle it in isolation and as a Council we need to show clear leadership and lead by example in all that we do. Our first Decarbonisation Plan was published in 2020 to support and align to our ‘green recovery’ from the pandemic and much progress has been made to delivering climate commitments outlined in our associated de-carbonisation action plan from last year. This year greenhouse gas emissions from the Council have reduced for the 5th year in a row and we are now emitting 33% less CO2 equivalent than we did 6 years ago. Our region continues to be one of the lowest carbon emitting local authority areas in the UK due to our natural assets (including foresty and peat), renewable energy developments and low number of polluting industries. 1.2 The De-carbonisation Plan sets a 3 year framework to continue our climate journey and routmap to net zero. Many of the actions continue from previous versions of the Plan but importantly this year – and as specified that would be achieved – our Council has made a clear commitment to be a net zero organization by 2045 and has also declared a climate emergency befitting the importance and critical nature of the topic. Whilst the main decarbonisation plan will be fixed for 3 years the associated Action Plan (which forms an Appendix of the document) will be continuously updated and reported to both the Climate Change Board and Policy & Resources Committee. 1.3 In support of the Action Plan a number of supplementary case studies have been provided by departments to provide the new Council additional information on the positive climate related work the Council is undertaking. 2.0 RECOMMENDATIONS 2.1 That the Policy & Resources Committee consider and endorse: 1. The progress of specific actions from the Decarbonisation Action Plan; and 2. The supplementary case studies that provide information on positive climate change projects being undertaken by different departments of the Council. APPENDIX A – DECARBONISATION ACTION PLAN TRACKER APPENDIX B – CLIMATE CHANGE CASE STUDIES Page 259 Agenda Item 10b
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APPENDIX A – Climate Change Action Plan TRACKER ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS W1 –Develop and Implement Waste Strategy (L) Roads and Amenity Services, Community, commercial customers Implementation of the Waste Strategy transitioning to Landfill ban compliant Residual Waste Recovery solutions by 2025. External funding and support being sought from the Scottish Government Negotiations with the Scottish Government (SG) continues. Officers have procured a consultant to conduct an options appraisal relating to the Waste PPP contract, this work is underway and will be completed by September and reported through the EDI committee. The SG have recently completed an Energy from Waste review, the outcomes will be considered as part of the options appraisal. Furthermore, a Food Waste review issued by the SG by the end of 2022 will feature within the circular economy proposals. The SG circular economy proposals include 31 current and future proposals up to and beyond 2025 which will have an impact on the councils waste management, e.g. Food Waste review, Scottish Deposit Return scheme, Garden Waste Page 260
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS collections and future statutory recycling targets being applied to councils. Pre-treatment derogation works are ongoing. Officers are engaging with the west area waste group every quarter which includes, Inverclyde, West Dunbartonshire, East and South Ayrshire Councils, Argyll and Bute Council and Zero Waste Scotland. Discussion is ongoing regarding post landfill ban solutions. W2 – Promote the Waste Hierarchy through community Education (L) Roads and Amenity Services Evidence of community Education Not secured New Web content and Education materials for Primary and Secondary Schools were developed and delivered to online Education Environment Summit October 21 and the COP 26 Event on the 6th November 21. W3 – Reduce Council use of disposable and single use plastics across all departments and settings (L) Procurement and Commercial Services, all Council Services Adoption of new working practices and procurement No specific funding in place, research required to impact on operation costs A report on Single Use Plastic went to the Policy and Resources Committee on 9 December 2021, and the following recommendations were approved: Page 261
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS Note and consider that the various Services that currently purchase SUP products consider whether these products are essential or if there is a potential alternative that would meet the Service requirements, prior to orders being placed via PECOS or contacting the Procurement, Commercial and Contract Management Team (PCCMT) for a procurement process to be carried out. Note and consider that the Sustainable Procurement Policy will be updated to reflect the Climate Change Board desire to limit SUP where possible – proposed wording has been included in the current draft version for 2022/23, and will be Page 262
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS updated as follows in the final version: “To provide procurement support to any strategic decisions taken by the Council in relation to the usage of Single Use Plastic products and their recyclability.” Note and consider that the Commodity Sourcing Strategy templates used for Regulated Procurements be updated to include a question regarding SUP Changes in legislation were brought into force by the Scottish Government on the 1st June 2022 restricting single-use plastic cutlery, plates, straws, drink stirrers and balloon sticks, expanded polystyrene food containers and expanded polystyrene cups and other beverage containers, as well as all Page 263
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS products made of oxo- degradable plastic. Some products already changed and others under review. W4 – Extend and explore pre- ordering for school food to reduce food waste (L) Commercial Services and Education Evidence of extension of pre-ordering & food waste reduction No specific funding in place, research required to impact on operation costs National solution also being looked at with Scotland Excel and following universal roll out of Free School Meals for primary school children. Project Team currently implementing this, with full project end date estimated as March 2023. E1 – Deliver Renewable Sourcing Strategy 2 (L) Commercial Services Adoption of Strategy RSS2 consultancy work funding to be confirmed; expectation is that project implementation will be through combinations of prudential borrowing (subject to business case approvals) and/or external funding. RSS2 next stage development work includes specification development and preparation of invitation to tender for specialist consultancy support. Current work in progress; tender issue in FQ2- 3 2022/2023 expected. Whilst this larger procurement exercise is conducted, a Quick Quote was developed in conjunction with Procurement colleagues to secure consultancy Page 264
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS support to assist with immediate renewable consultancy requirements (including development of items E2 and E3). This interim contract has now expired but existing commissioned work- streams will be concluded. E2 – Delivery of Non-domestic Energy Efficiency Framework (NDEEF) Projects (L) Commercial Services Evidence of delivery of projects Project development work is funded by combinations of the Scottish Government and the procured provider (costs absorbed within the tender process). Funding for project implementation will come from Council approved capital allocations: Climate Change 20/21 - £500K Climate Change 21/22 - £600K Asset Sustainability – circa £100K NDEEF Energy Performance Contract was signed on 16 July 2021. The original NDEEF mini project list has either been installed or deleted by variation. Outstanding works are now effectively those mini projects introduced to the overall project to replace deletions. Main items outstanding are a couple of pv installations (including Kilmory Castle ground array which requires planning approval) and a full site solution for Cardross PS (including heating as a mandated item, solar pv, LED lighting). Balance of works are expected to conclude circa October 2022. The following renewable solutions are Page 265
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS being/have been deliveredwithin the NDEEF package: Solar PV: Kilmory Gardens, Cardross PS, Blackhill Depot, Rothesay Pool, GWIT Centre, Lochgilphead RC, Kintyre House. Air Source Heat Pump: Manse Brae Roads Office, Lochgilphead CEC, Strachur Primary School, Lochgilphead RC, Arrochar Primary School. In addition to the above, the procurement sourcing strategy for the next batch of sites, using designation NDEEF2, is under way. E3 – Delivery of additional solar installations at Council assets (L) Commercial Services Evidence of delivery of projects Consultancy work funding to be confirmed; expectation is that project implementation will be through combinations of prudential borrowing (subject to business case approvals) and/or external funding. Solar pv Options (initial feasibility work completed for circa 9 sites) – some opportunities absorbed within NDEEF (Ref item E2) as project replacements due to accommodation reviews. A ‘mop up’ of remaining project prospects intended to be market tested as a component within an upcoming solar pv Page 266
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS maintenance contract (FQ2-3 2022/2023). E4 – Delivery of Water Efficiency Audits across our Estate (L) Commercial Services Evidence of delivery of projects Feasibility work being absorbed within existing approved budgets. Individual works items are generally small scale and it is proposed to utilise existing approved budgets where possible. Significant Council wide asset verification exercise and ensuring water use minimised. This project will continue throughout calendar year 2022 when a case study will be prepared to demonstrate the range of tasks being undertaken and to convey the reduction in water consumption (with carbon emissions reduction) and costs arising from this already successful project. E5– Delivery of Energy Efficiency Scotland Programme (L) Housing Services, Registered Social Landlords Evidence of delivery of projects Funding amounts are determined by localised factors and is paid as a proportion of the Scottish Governments’ Heat In Buildings Strategy Works which required Contractors to enter housholds were delayed by continued Covid-19 restrictions but were able to be replaced by external measures ensuring the programme continued.The Scottish Government have confirmed an award of £2,011,323for the 2022/23Area Based Scheme. Page 267
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS E6 – Complete LED streetlight replacement programme (L) Roads and Infrastructure Services Evidence of delivery of projects Fully funded through prudential borrowing We are in the process of appointing contractors to upgrade Street Lighting in the Lorn Area where we are still to replace approx. 1100 no. Luminaires. The Council has 14442 streetlights in total so carbon emissions have already been greatly reduced by the LED Upgrade Project. 2020/21 figures were CO2 Totals 889 tonnes, this has been reducing year on year, back in 2015/16 figures were CO2 Totals 3140 tonnes. The last of the projects installation / upgrade phases will be completed in August/September 2022. E7 – Continue support of ABRA and review Renewable Energy Strategy annually (L) Economic Development Evidence of delivery of projects Officer resource to support currently funded Work to support ABRA ongoing. ABRA exhibited at All Energy in May 2022. Current ongoing project by SSE Networks for renewal of powerlines between Inveraray and Crossaig. Possible extension being discussed. Work commenced on outline business case for progressing Page 268
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS Islay Energy System work through the Rural Growth Deal. Islay announced as one of the Carbon Neutral Islands being progressed by the Scottish Government which is expected to complement this work. E8 – Continue support for offshore development of renewables (L) Economic Development Evidence of delivery of projects (expected late 2020s/early 2030s) Officer resource to support currently funded Offshore wind allocation off Islay is confirmed in Marine Plan. Scottish Power Renewables have secured an option on the site through the Scotwind Leasing Process. The Crown Estate Scotland is expected to launch Innovation and Targeted Oil and Gas (INTOG) leasing in August 2022 which could allow seabed rights for small scale (less than 100MW) innovation projects. T1 – Develop a Fleet Replacement Strategy supportive of fuel efficient, electric and hybrid vehicles (L) Roads and Infrastructure Services Adoption of Strategy Part for current financial year The Strategy is complete, final review will take place to ensure the 2025 legislative changes are included. The council have introduced hybrid and electric vehicles to the Fleet. The Page 269
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS council operates 14% of its Fleet with the new technology. T2 – Develop a vehicle routing system that will reduce road miles for operations (L) Roads and Infrastructure Services Evidence of delivery of projects Part for current financial year The Council went to tender earlier this year for route optimisation and had a number of bidders. Officers have gone through the selection process and a preferred bidder has been chosen and their bid is within the budget available. Arrangements are being made for a demo from the preferred bidder and subject to that being successful should be moving towards a contract award in early course T3 – Develop an electric vehicle infrastructure strategy (L) Roads and Infrastructure Services Evidence of delivery of projects Part for current financial year The development of the EV network is funded by external grant monies from Transport Scotland, and the costs of developing the strategy in terms of staff time are covered via existing budgets Ultimately the cost recovery model Good progress has been made with the Council’s EVC strategy. Charging has been in place for over a year now and the fees appear to be covering the council’s costs although there have been some problems with cash flow from the new national back office supplier – this is an issue being experienced by all local authorities and something we are picking up as a group. In Page 270
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS terms of public use, this continues to increase and while there have naturally been some queries and complaints about the introduction and operation of charging, these have been minimal. The future installation/expansion plan – specific sites and high level criteria – has been to public consultation (this was pushed back slightly in the programme due to the local government election and pre-election restrictions). The main headline from the consultation is that 75% of those responding support the expansion strategy. With the draft expansion plan in place we are working with Scottish Futures Trust/Transport Scotland and with the aid of grant monies going through a procurement process to appoint a consultant who will financially model/estimate site works costs so we then have a clear Page 271
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS picture on a site by site basis of likely costs which will then inform any future funding applications and should ultimately streamline that process. The Scottish Government has published a draft vision for EVC development which, among other things, includes a number of options for local authorities to consider in their own expansion plans, from a concession model to public private partnership to local authority-only plans. We are currently analysing these different models and how they would or could apply in our context. When the above workstreams are completed we will be in a strong position to deliver on the 55 sites outlined in our expansion plan and to apply for the new Scottish Government fund when it comes online. Officers are also working with HiTRANS on their FASTER programme which had Page 272
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS identified eight sites in Argyll and Bute for installations. With the rising costs of construction etc, the original scope across the region was considered to be unaffordable and we are working with HiTRANS, Western Isles and Highland to revise that scope to take advantage of the funding available T4 – Support Digital by Default theme Service Review & Recovery Plan to reduce need to travel All Council Departments Evidence of delivery of projects Part for current financial year Council is adopting ‘Our Modern Workspace’ programme and Digital First approach as services change and evolve post pandemic. T5 – Develop new active travel plans for Council buildings and our towns (L) Economic Development Evidence of delivery of projects Part for current financial year No active travel funding is provided by Council. External competitive challenge funds are time consuming to secure and work has to be shaped to fit with external funders aspirations and requirements. However, at present these are the only available source(s) of potential funding to deliver active travel improvements. The purpose of active travel plans, for buildings or towns, is to help direct and implement change to encourage and make it as easy as possible for individuals, businesses and visitors to choose to walk, cycle or take public transport for journeys. Increasing activity and reducing sedentary behaviour has significant health benefits and can increase accessibility to Page 273
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS essential services, education, employment, retail and leisure. Walking and cycling are lower cost travel modes and, if they are a viable option, can help households reduce their reliance on private cars, particularly multiple car households. No Council funding is currently expended on genuine Active Travel work, with all costs, including internal staff costs (1.3FTE), having to be funded via successfully securing external challenge funds. As all active travel work is currently reliant on securing external funding, therefore the projects which are progressed are those which can successfully secure external challenge funding. Council Staff Travel Plan: The Staff Travel Plan will focus on measures to make it easier and preferable for staff to choose to walk, cycle, use public transport or car share to commute to work or for work journeys, or use economical Page 274
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS Council vehicles for work journeys. The travel plan should encourage staff to choose the most economical and least environmentally damaging travel mode. Engagement of services which manage staff in building and/or council buildings is essential to creating deliverable and effective travel plans for Council staff. This includes Estates, HR, SMT and building users. It is recommended that work on the Council Staff Travel Plan is commenced after a decision has been made on future staff working patterns and office rationalisation as these will have a significant impact on the Council Staff and their travel. There is currently no funding secured to enable this work to be progressed. Active Travel Plans for Towns: There are Active Travel Plans in place for the main towns in Argyll and Bute, albeit some Page 275
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS are now quite historic. The town Active Travel Plans focus on identifying potential active travel route networks for key towns. These provide a framework for the development of new active travel routes, which will enable and encourage residents, businesses and visitors to choose to travel more actively. No funding is currently secured to enable the Active Travel Plans for towns to be updated. Argyll and Bute Active Travel Strategy: It is recommended the Committee instruct Officers to develop an Argyll and Bute Active Travel Strategy and present it to full Council for approval within 18 months of Committee instruction. The Active Travel Strategy would provide the overarching context for the Council to support and promote active travel across the Council area. Page 276
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS No funding is currently secured to enable the Active Travel Strategy to be developed. PA1 – Review Council Flooding & Coastal Protection Policy (L) Roads and Infrastructure Services Review of policy No specific funding in place, research required to impact on operation costs Reviews are in process. PA2 – Review Council Sustainable Procurement Policy (L) Procurement Review of policy No specific funding in place, research required to impact on operation costs This policy is reviewed on an annual basis. OFF1 – Develop opportunities for Carbon Offsetting with ACT and partners (L) Climate Change Board, ACT and partners Delivery of projects Limited funding via ACT for existing projects ACT have completed Phase 1 of native woodland planting on Argyll and Bute Council land around Kilmory, under compensatory planting agreement with SSEN. 22 hectares now completed, with deer management and follow up programme in place. Phase 2 planting scheduled for winter 22/23. ACT have also cleared Invasive Rhododendron ponticum from 18 hectares of native woodland around Kilmory with support from the Nature Restoration Fund 21/22. ACT and SSEN are discussing futher non- Page 277
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS compensatory planting, with potential for Carbon Credits. Argyll and Bute Council Policy and Resources Committee have supported this proposal. ACT’s peatland restoration project CANN concludes in September ’22 with over 500 hectares of peatland improved, two Conservation Action Plans and 4 -years of endangered species monitoring and surveys being completed. ACT have secured support for a follow on project, restoring peatland and building on community resilience and capacity. ACT will be supported by Esmee Fairbairn Foundation, Peatland Action (NatureScot) and are in discussion with Islay distilleries to design a sustained programme of investment. All of ACT staff are now Carbon Literacy Trained, and ACT is registered as a Carbon Literate Organisation, and is now accredited as a Carbon Literacy Training provider. 68 Page 278
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS community members have been trained via the ACTNow project. 92 tonnes of CO2 have been saved through ACTNow’s bike refurbishment project, and 23 good as new bikes have been gifted to community members in Mid- Argyll. 3700 kg of food has been saved from landfill and redistributed to Mid-Argyll residents, and 264 volunteer hours have been recorded over 40 events run by ACT with a climate focus. A legacy of the ACTNow project is the ACT Hub at Blarbuie offering tools and equipment to help community members to reuse, repair and recycle. A follow on project is now in place, funded by Smarter Choices, Smarter Places via Argyll and Bute Council, including cycle and ebike training and workshops. ACT partnered with Cove Park artists residency to become one of 7 Climate Beacons for COP26, which used Argyll’s Rainforest as its inspiration for Page 279
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS work with film-makers, school children from Lochgilphead and Helensburgh, and artists. The project was supported by Creative Carbon Scotland. COMM1- Develop and deliver Communications Plan to support Decarbonisation Plan (L) Climate Change Board and Communicatio ns Team Delivery of Communications Plan Part of Communications Support External communications We continue to promote actions the council is taking, and actions that others can take, to develop climate- friendly Argyll and Bute. For example: Promotion of EV charging points consultation on social media, press release, website and weekly news round-up. Infrastructure plans, including £170k investment in low emission council vehicles Green flag awards in schools Promotion of outdoor nurseries Page 280
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS Reinforcement of climate-friendly Argyll and Bute brand eg with Waste Strategy Manager vacancy, and reduce your food waste promotion Delivery of school meals using drone Promotion of Community Development climate proof training Islay plans to become carbon neutral by 2040 Pippa’s podcast on social media about how to save the planet and your purse Home Energy Efficiency Programme Carr Gomm staff using bikes instead of cars Lochdonhead won Woodland Trust Green Trees Award Page 281
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS COMM2 - Engage with community and partners and deliver Climate Change Directory for our region (L) Community Planning and Development Team Delivery of engagement map In place until end of financial year Web page is active and live https://www.argyll- bute.gov.uk/cpp-climate- change Community Groups and initiatives mapped and promoted on website. Input to and reporting back from the Community Planning Partnership Climate Change Group. Regular update of webpage directory. Ongoing dialogue with Community Planning Partnership. 2 x Meetings have taken place with Argyll and Bute Branch of National Farmers Union (NFU) and workshop currently being scoped out to explore Climate Change opportunists across the Agricultural and Land Use Sector. Headline topics likely to include :- Sustainable Upland Farming, Planting for Carbon Sequestration, Dairy Industry and Suckling Beef. Page 282
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ACTION LEAD (L) AND PARTNERS TARGET or MILESTONE FUNDING COMMENTS COMM3 - Monitor the delivery of actions in the Climate Change Action Plan and review in 2024 (L) Climate Change Board Review of this plan by December 2024 Monitored through Tracker to be submitted quarterly to Policy & Resources Committee. Completed – next review Dec 2024 Page 283
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APPENDIX B – Climate Change Case Studies CASE STUDY 1 – ISLAY CARBON NEUTRAL ISLAND Green light for Islay’s carbon neutral future (argyll-bute.gov.uk) – 19 May 2022 A reduction in fossil fuels and increased use of renewable energy sources – these are just some of the ambitions for Islay’s carbon neutral future. Islay is one of six Scottish islands, announced by the Scottish Government to become fully carbon neutral by 2040. The initiative is part of the Carbon Neutral Islands project, aimed at supporting islands to achieve their carbon neutral ambitions. Argyll and Bute Council recommended Islay as an ideal candidate for inclusion due to the mix of potential energy sources on the island including offshore wind proposals and potential tidal schemes. In addition, there are opportunities to capture carbon through peatland restoration on the island. CASE STUDY 2- PROMOTION OF DE-CARBONISATION PLAN Council takes steps to achieve net zero target (argyll-bute.gov.uk) – 9 Dec 2021 Argyll and Bute Council re-affirmed its long-term commitment to tackling the climate emergency and achieving its ambitious net zero emissions targets. The latest version of the council’s Decarbonisation Plan was approved in December 2021. This sets out the council’s three-year strategy for tackling climate change and achieving net zero emissions across Argyll and Bute. Argyll and Bute is a leader in wind and hydro power production and its sparse population, high forest, peatland cover and a low number of polluting sources means it is already one of the lowest net producers of carbon in the UK and almost carbon neutral, far ahead of most other regions. CASE STUDY 3 – MAKING OUR FLEET GREENER Installation of Electric Vehicle (EV) Chargers for Council Fleet Vehicles - Case Study (June 2022) Introduction Argyll and Bute Council has been offered grant funding, through the Energy Savings Trust Switched on Fleets programme to procure a number of electric/hybrid vehicles and charging points for use by Council fleet vehicles. This case study provides a high level of information in respect of the process involved from securing grant funding through to eventual installation of the funded EV charging points. Description Joint working arrangements were agreed between the Council’s Fleet Management and Property Services personnel late in 2020 to make a 20/21 funding application for a number of charging points up to a value of £50K. Due to deadlines, a quick turnaround was required to undertake the main tasks: Establish spare electric capacity in buildings (timelines precluded new connections). Match buildings with spare electric capacity to demand for EV vehicle usage; spread across area. Arrive at list of locations with EV sizes/quantities dictated by available electrical capacities. Specification drawn up considering SwitchedonFleets requirements also. Page 284
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Procurement exercise undertaken using local term contractors, with them engaging specialist sub-contract. Application for funding request made to SwitchedonFleets with later request for additional funding; all approved. Works orders placed with local term contractors. Specialist sub-contractor surveys identified need to vary original intent with additional costs. Works completed and paid for 2021; grant funding received. EV registered with ChargePlaceScotland and made available for use. Final list of sites with newly installed EV detailed in table below. Site Town No. Connection Points Helensburgh and Lomond Civic Centre Helensburgh 4 @22kW each (dual free standing units) Corran Halls Oban 4 @22kW each (dual free standing units) Baliscate Depot Tobermory 1 @ 7kW (single wall mounted unit) High Street Depot Rothesay 1 @ 7kW (single wall mounted unit) Blackhill Depot Helensburgh 4 @22kW each (dual free standing units) Note: charging times vary depending on vehicle and connection point. Images of free standing dual EV charging units, with marked parking bays, installed at Helensburgh and Lomond Civic Centre CASE STUDY 4 - NON-DOMESTIC ENERGY EFFICIENCY FRAMEWORK (NDEEF) PROJECT - (June 2022) Introduction Carbon emissions associated with the Council’s estate and buildings accounts for over 20% of the Council’s overall carbon footprint. These emissions arise from use of electricity, gas, heating oil and water in premises. Switching to more efficient technologies not only benefits both energy consumption and energy cost but also improves ‘green credentials’. Against this background, Argyll and Bute Council have utilised the Scottish Government Non-Domestic Energy Efficiency Framework (NDEEF) to deliver a range of Energy Conservation Measures (ECM’s) at 11 No. Council properties. The delivery of these ECM’s not only reduces energy costs but also contributes to the Council meeting Climate Change targets. This case study Page 285
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provides a high level of information in respect of the process involved from project inception through to eventual installation of the ECM’s. Description In late 2020 approximately £1.2Million of viable project work was identified across 11 No. assorted council premises delivering anticipated annual savings of £123k which represents a payback of 10.2 years. A Commodity Sourcing Strategy for Energy Efficient Solutions was conducted and the use of the NDEEF was selected as the preferred delivery mechanism. A DMT Paper to utilise the NDEEF was approved in mid 2021 and a tender exercise was subsequently carried out. ECM installation works commenced in late 2021 and will be complete by July 2022. The following properties were selected for the NDEEF on the basis of perceived opportunities for energy efficiency savings and because previously identified capital works to replace the oil fired heating systems were required to be delivered at some of the locations: Site Town Manse Brae Roads Office Lochgilphead Lochgilphead Community Education Centre Lochgilphead Kilmory Castle Lochgilphead Riverside Leisure Centre Dunoon Lochgilphead Learning Resource Centre Lochgilphead Rothesay Leisure Pool Rothesay The Moat Centre Rothesay Kintyre House Campbeltown Graham Williamson IT Centre Helensburgh Arrochar Primary School Arrochar Strachur Primary School Strachur Works content included the introduction of energy efficient LED lighting, improved heating and ventilating controls, installation of air source heat pumps and solar PV. A full list of the ECM’s selected is included below: Annual Saving ECM kWh CO2 (tonnes) £ LED Lighting Upgrade 225,968 62.7 27,521 Solar PV 192,140 53.3 22,241 High Efficiency Air Handling Unit 226,000 41.6 4,475 Building Management System (BMS) Optimisation 237,343 69.1 17,865 Air Source Heat Pump (ASHP) 420,842 105 17,704 Boiler Optimiser 233,588 42.9 4,625 Refrigeration Optimiser 7,980 2.2 862 IT Server Room Cooling Upgrade 111,813 31 13,698 Swimming Pool Pump Control 70,300 19.5 9,139 Electronic Thermostatic Radiator Valves 5,800 1.8 201 Pipework Insulation 23,292 1.7 1,413 Air Conditioning System (A/C) Optimiser 29,674 8.2 3,858 Page 286
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Images of ASHP at Arrochar PS and Strachur PS Image of Solar PV at Kintyre House, Campbeltown. Next Steps A second NDEEF project is planned for commencement in 2023. It is anticipated that it will be of a similar size and scale to the current NDEEF project. Preliminary steps are underway to develop and refine a list of buildings for inclusion in the project. Page 287
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Useful Links Non-domestic energy efficiency framework over £1m projects 2020-2024 - gov.scot (www.gov.scot) Image of free standing dual EV charging unit installed at Helensburgh and Lomond Civic Centre with instructions for use; Image of single wall mounted EV charging unit installed at High Street Depot, Rothesay. Next Steps Similar joint working arrangements were agreed to make a 21/22 funding application for a number of charging points (value £33.4K). Local term contractors have again been appointed to undertake works which are scheduled for implementation in 2022. Planned additional EV chargers are detailed in table below: Site Town No. Connection Points Helensburgh and Lomond Civic Centre Helensburgh 2 @22kW each (dual free standing units) Jacksons Quarry Depot Oban 2 @22kW each (dual free standing units) A financial/budgetary reconciliation is required as the use of buildings electricity for vehicle charging replaces previous vehicle fossil fuel use. Useful Links Switched On Scotland Phase Two: An Action Plan For Growth (transport.gov.scot) j457836-06 | Transport Scotland CASE STUDY 5 - RENEWABLE SOURCING STRATEGY - (June 2022) Introduction Scotland has achieved many milestones in renewable energy, particularly in wind energy generation. Renewable energy is essential to the future of our planet and Scotland has already carved a place in the forefront of the power revolution. It is now a global leader in sourcing electricity from its substantial natural resources. This case study provides a high level of information in respect of some of the work undertaken by Argyll and Bute Council in assessing the optimal opportunities for installation of renewable technologies through to eventual installation of same. Renewable energy will continue to play a Page 288
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central role in meeting both Scotland’s and Argyll and Bute Council’s target of net-zero greenhouse gas emissions by 2045. Description Argyll and Bute Council, in conjunction with a specialist consultant, has assessed the bulk of its estate (over 1,100no. land/property assets) as part of the Council’s Renewables Sourcing Strategy (RSS1). This strategic assessment included evaluation of mature renewable technologies in conjunction with a screening of the Council’s land/property asset information to identify and rank (using key benefits criteria) the most appropriate renewable energy installations. This strategic assessment and ranking has ensured that projects are prioritised, avoiding a potential ‘scattergun’ approach. All of the most viable projects (summarised herein) have now been delivered. Projects have been funded on a ‘spend to save’ basis and have accessed supportive UK Government funding such as Feed-in-Tariff (FIT) and Renewable Heat Incentive (RHI). Consequently, Argyll and Bute Council now has 13no. biomass installations, with installed capacity of circa 3.2MW, using combinations of wood pellet and locally sourced wood chip for fuel. A further 140kW biomass boiler was integrated into the recently constructed Mull Progressive Care facility, a joint project between West Highland Housing Association, National Health Service and Argyll and Bute Council. Image of off-site manufactured biomass boiler-house installed at Ardrishaig Primary School and some of the roof mounted solar pv panels installed at Hermitage Primary School in Helensburgh. To provide a sense of scale, Argyll and Bute Council has steadily reduced its heating oil consumption over the last 15 years by approximately 70% (from circa 23 Million kWh of oil per annum to circa 7 Million kWh per annum) largely through fuel conversions to biomass/gas fuel sources with lower cost and carbon emissions. Despite electrical grid constraints, Argyll and Bute Council has also installed around 1.1MW of solar photovoltaic panels across 19no. sites, mainly on school buildings. A particular Page 289
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challenge that was overcome included the need to make contractual provision for renewable installations on PFI/NPDO schools. Fortunately, all parties cooperated to ensure successful project delivery alongside existing school contract arrangements. A single 60kW wind turbine has also been installed on a landfill site on the Isle of Mull, named ‘Miss Hoolie’ by local school children. Images of 60kW wind turbine at Glengorm landfill site on the Isle of Mull taken at the time of the ‘Miss Hoolie’ naming ceremony. Next Steps Given the deemed success of the RSS1 and subsequent technological advancement, political landscape change, alternative funding stream availability etc, Argyll and Bute Council is currently working towards a second phase of whole portfolio renewables assessment (RSS2). This is identified as a target in the Climate Change Action Plan which is an integral component of the Argyll and Bute Council Decarbonisation Plan. CASE STUDY 6 - CIRRICULUM FOR EXCELLENCE Curriculum for Excellence sets expectations for the teaching and learning climate change and climate action within the experiences and outcomes and under the umbrella of Learning for Sustainability. There is a wide variety of climate action activities and projects throughout education establishments in Argyll and Bute. In a recent survey (May 2022) of schools in Argyll and Bute, we received 22 responses. Most schools have studied Climate Change within the past 3 years, use outdoor learning regularly, grow their own vegetables and have a litter campaign. Almost half of them have achieved the Green Flag, from Eco-schools, in the past 3 years, with at least 2 reporting their 7th Green flag achievement. Other projects include: The Big Wheel and Walk (national competition organised by SUSTRANS which is a fortnight of walking or cycling to school), The Queen’s Green Canopy: national tree planting, RSPB Big Birdwatch, John Muir Award, RHET Royal Highland Educational Trust (food and farming projects). Page 290
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The following 7 case studies are some examples of good practice in Argyll and Bute schools. CASE STUDY 7: SCHOOLS CLEAN AIR DAY Rhunahaorine Primary School On Thursday 16th June the children from Rhunahaorine Primary participated in Clean Air Day, the UK’s largest campaign on air pollution run by the charity Environmental Protection Scotland (EPS). This is the third year the children have taken part. All of the children did a traffic survey. The school is on the A83 which is the main road on the Kintyre Peninsula leading to Campbeltown. As well as helping the children think about air pollution infants were introduced to tally marking and the older children produced more complex graphs with their results. The pupils are continuing to embrace the anti-pollution theme with activity colouring books sent from EPS. These promote walking, cycling, electric cars and caring for nature. CASE STUDY 8: YOUNG STEM LEADERS AND AMBASSADORS Kilcreggan Primary School Young STEM Leader Programme As part of earning their Young STEM Leader 2 award, pupils decided to hold their own climate conference in school, presenting to all other classes. As part of this, they created working models of various renewable energies and also used models and demonstrations to demonstrate the impacts of climate change and global warming. They also did comprehensive research to create impactful, informative PowerPoints to accompany their demonstrations. We used the STEM Ambassador programme to host visitors virtually to all classes across the school. We had renewable energy engineers, civil engineers and climate scientists and also Polar explorer Craig Mathieson who does a lot of climate action work. Kilcreggan STEM Google Site Pupils have recorded and shared much of their learning on our STEM Google site, visible to all staff and pupils. CASE STUDY 9: ECO-HOUSING PROJECT Kilcreggan Primary School The final project this year was a design challenge based on ECO housing. Pupils were researching the makeup of the Scottish landscape and how certain natural resources are used. To take this idea further they were presented with a brief to design an ECO friendly museum, which would celebrate the local surrounding environment while having as small a carbon footprint and energy consumption as possible. This was a great project where the Page 291
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pupils really outdid themselves. Again this referred to the central themes of sustainability, the global goals and also climate change. CASE STUDY 10: TREEMAZON Barcaldine Primary School In response to COP26, learning about Climate Change and taking part in the Argyll and Bute Education Climate Summit, pupils from Barcaldine Primary School decided to take action. Their proposal was to set up a tree nursery using locally sourced seed. After researching how to collect, store and sow seeds, pupils and families gathered seeds over a few weeks in autumn. Species included oak, rowan, hazel and birch. Growing beds and pots were prepared by the children and protective boxes, to keep unwanted mice out, were built by parents. Seeds were sown and labels made for each garden plot. Over winter and spring, we waited, and watered, and waited, and weeded… and waited. The children took responsibility to care for the nursery and created a rota of jobs. They suggested and voted for a name for our nursery and designed logo. The chosen name was ‘Treemazon’, which makes a lovely connection to our own local Atlantic Rainforest. Finally, in late spring, growth was spotted. We now have a very fine crop of oak seedlings, a few hazels and the birch are just appearing. Once the seedlings are more established we plan to share them with the community. We also have a contact regenerating a woodland croft and plan to get involved with that next year. Then of course, in autumn, we will start collecting seeds again, and expand our business further. CASE STUDY 11: CLIMATE ACTION AND THE WORLD OF WORK Bowmore Primary School COP26 in 2021 provided the perfect hook for an introduction to teaching climate change and linked appropriately to our action plan for our next Eco School’s Scotland Green Flag award. By teaching the children about the goals selected at COP26 the upper primary children were introduced to the impact and benefits of transport on our environment, food miles, shopping Page 292
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locally and how to reduce our carbon footprint. The IDL was social studies, topical science and literacy focused. We took part in Google Meets on offer from our local authority to learn on peat restoration projects and why this is relevant to our local community and environment. Our world of work and distilling topic in term 4 April 2022 then retrieved all of the knowledge learned in the previous IDL as the pupils understood the use of peat in many local distilleries used to make whisky which our island is famous for. The final presentation and assessment was a talking and listening focused based round designing and creating a sustainable distillery cooperatively in terms of the resources water, peat usage, electricity and using locally sources items to reduce impact on the environment. The pupils presented their work and applied their knowledge of the learning which took place on their visit to Bowmore distillery and in class to explain roles, responsibilities, skills and scientific processes for each job in the areas of the distillery. CASE STUDY 12: PORT ELLEN DENIM Port Ellen Primary School This year the whole school did an in-depth piece of interdisciplinary learning on the topic of Climate Change linked to the COP26 conference. Part of this was looking at the impact we were having on the Earth in terms of it’s resources and how the way we lived was detrimental to the environment. Children did their own carbon footprints and looked at the Earth Overshoot Day…we were all horrified! Part of our learning was about waste linked to fashion. We had a contact at Arkdefo, a company that reuse denim, and this inspired us in designing with fabrics/denim, learning practical craft skills and developing an understanding of how we can live more sustainably. CASE STUDY 13: FOOD SHARE WITH THE COOP Inveraray Primary School We have been an Eco School for many years and interested in environmental projects. The Food share project has been a positive addition to the work that we are currently doing. The food Waste work has involved combining a number of elements in our school:- 1. We have introduced the Sustainable Development Goals as part of our every day school work, linking what we do in class to the Sustainable Development Goals. 2. Our Eco topics are “Food and the Environment” and “Zero Hunger”. We have been learning about food labelling, the importance of local produce, how to reduce packaging and where our food comes. We have raised awareness of these elements through a One Planet Picnic where all pupils and staff in our school brought in a packed lunch with minimal packaging, where possible locally sourced and enough food so we did not have to bin any. Page 293
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3. We have had support from the ACT Now project to set up a system with the Co-op where any ambient food waste is collected from the Co op and distributed on a Monday, Tuesday and Wednesday. As children have been learning about food waste and the need to reduce this we have used this food in a number of ways:- Early Level Class – learning about food by using items in their play, mud kitchen and tough trays. Helping to prepare snack and incorporating the fruit and vegetables supplied. Primary 1 – 7 – Food is distributed to all classes. Some is used as part of a class snack and some is taken home to be used at home. All children have access to the food. We have kept a tally chart of number of items we have received from the Coop and the Eco Committee have helped to count and distribute the food to the classes. In the next school year we will start weighing the amount of food we receive. Act Now have also funded workshops for us with Highland Herbal to show the children how to preserve foods. Our children are more aware of where their food comes from. They can talk about labelling, packaging and food preservation. The younger children have been exposed to a wide variety of food in their play and can talk about colour, textures and names of different fruit and vegetables. They have also tasted a wide variety of fruit and vegetables. Our older children understand the issues in using single use plastics and the importance of reducing waste around the planet. The Co op Food share Scheme is a great venture, it genuinely prevents good food going to waste and offers it back to the local community. We are very grateful to Inveraray Coop for Page 294
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their support and look forward to continuing this work in the future. We are in the processing of building a Community Garden and we hope to continue developing children’s knowledge and experience of where our food comes from, how to grow food and how to prepare and preserve food. CASE STUDY 14: TREE PLANTING PARTNERSHIP WITH SSEN TRANSMISSION ACT-ing in partnership to support Scotland’s rainforest SSEN Transmission and leading community and conservation organisation, Argyll and the Isles Coast and Countryside Trust (ACT), and Argyll and Bute Council have joined forces to help deliver SSEN Transmission’s compensatory tree planting commitments and in doing so, help support and enhance Scotland’s rainforest in Argyll. Argyll's rainforest, also known as Atlantic woodland, temperate rainforest or Celtic rainforest, is a unique and rare habitat of ancient and native woodland, open glades, boulders, rocky cliffs and river gorges. Scotland is now the last stronghold for this habitat that was once widespread along the Atlantic coast of Europe. The mild, wet climate of the west coast of Scotland provides perfect growing conditions for this diverse habitat that supports a variety of plants and animals. The ground-breaking partnership will see ACT help deliver SSEN Transmission’s compensatory tree planting relating to its Inveraray-Crossaig transmission project, with the initial phase of planting underway on Argyll and Bute Council’s sites near Lochgilphead in Argyll. By planting native species, the planting will support local flora and fauna, creating natural habitats for native species to thrive, supporting SSEN Transmission’s commitments to deliver biodiversity net gain and compensatory planting on all its major projects. The planting will also create a natural asset for the local community to enjoy for generations to come, leaving a positive lasting legacy beyond SSEN Transmission’s primary objective of delivering a network for net zero emissions across the north of Scotland. The partnership was formally announced this week in Lochgilphead, with members of SSEN Transmission, ACT, and Argyll and Bute Council coming together to undertake some of the initial native species planting. Richard Baldwin, Head of Consenting and the Environment for SSEN Transmission, said: Page 295
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“I’m really excited about our partnership with ACT to deliver our compensatory planting for our Inveraray-Crossaig project. By working in partnership with local experts we can ensure our compensatory planting focusses on the right species, in the right locations, to deliver the right outcomes for the local communities in which we operate. “Argyll’s rainforests are a truly stunning and precious resource and we’re delighted to be playing a small part in helping ensure the long term sustainability of this nationally significant natural asset. You can’t help but be mesmerised when you first discover Argyll’s rainforest and ACT’s dedication and passion to protect and enhance this wonderful natural asset is great to be part of. “As we continue to deliver a network for net zero emissions across the north of Scotland, we are committed to doing so in a responsible and sustainable way, helping sustain and enhance the local habitats in which we operate. We look forward to building on this initial planting project with ACT and other community organisations across the north of Scotland, leaving a positive legacy for generations to come.” Ross Lilley, ACT Chairman, said: “This partnership with SSEN Transmission and Argyll and Bute Council has been a very significant one for ACT as we’ve been able to create new native woodland sites which is an important part of Argyll’s Rainforest Strategy. “By improving existing woodland, as we have recently done at Kilmory and Glenan woods with extensive Rhododendron ponticum removal, and gradually linking up the clusters of Rainforest with new planting, we can create corridors for the rare species that are unique to our Rainforest habitat to thrive. “Argyll is incredibly fortunate to be home to more than half of Scotland’s rainforest and to ensure that it is safeguarded, we will need a partnership approach from businesses, communities and agencies. This agreement between SSEN Transmission, ACT and Argyll and Bute Council is a great example of what can be achieved.” Ross Mclaughlin, Head of Commercial Services at Argyll and Bute Council said: “It’s important that we take all steps we can to make day-to-day life in Argyll and Bute climate- friendly. We are pleased therefore to support this woodland conservation initiative. Becoming climate-friendly is about developing sustainable ways of living and working, to protect the planet on which we all depend for our future generations.” ENDS Notes to editors: Photographs will be available from 12 noon on Wednesday and will be circulated. Page 296
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ACT is a community-led organisation and registered charity, established in 2014. Their mission is to sustainably maintain, enhance and promote the coast and countryside of Argyll and the Isles. https://www.act-now.org.uk/ About SSEN Transmission SSEN Transmission, operating as Scottish Hydro Electric (SHE) Transmission plc, owns, operates and develops the high voltage electricity transmission system in the north of Scotland and remote islands. SSEN Transmission is part of SSE Group – the UK and Ireland’s clean energy champion. SSEN’s strategic priority is to enable the transition to a low carbon economy through building the transmission infrastructure necessary to connect and transport renewable energy. https://www.ssen-transmission.co.uk/ Ross McLaughlin ABC; Ross Lilley ACT; Richard Baldwin SSEN Transmission CASE STUDY 15: SCHOOL CLOTHING BANK The Council has been working with community groups and voluntary organisations across Argyll and Bute Council to launch phase 1 of the school clothing bank. The aim is that no child should feel like they are going to school in the wrong clothes. By the end of phase 2 in December 2022 we will be able to provide a good quality reused school uniform for every Early Learning Centre, Primary and Secondary school across Argyll and Bute. We are working with Helensburgh Parish Church, Kintyre Recycling Limited, Inspiralba, Dunoon Youth Centre Hub and Fyne Futures in the areas of Helensburgh, Dunoon and Page 297
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Rothesay to make the Clothing Bank happen. We have also had great engagement from schools and parent councils across these areas. The Clothing Bank will eventually cover urban and rural schools in those areas too. In Dunoon, Rothesay and Campbeltown the secondary schools are looking to use the project to create Social Enterprise opportunities for pupils in their schools. The Social Enterprise Academy will provide support to Rothesay Academy in looking at opportunities in this area to create a social enterprise. Over the summer and into August we will speak to schools in Mid Argyll, Oban, Lorn and all of the Islands as phase 2 of this roll out in order to ensure there is provision across the area for these services. We are currently developing our web content, e-form and a communication strategy to link the provision together. Finally we are looking for a brand name linking the uniform to climate change and saving the planet to really pull the project away from the stigma that surrounds clothing bank and anti-poverty. CASE STUDY 16: HOUSING SERVICES AND FUEL POVERTY Between 2018 and 2022, 909 households have received insulation measures through the Energy Efficient Scotland: Area Based Scheme (ABS). Insulation measures make homes warmer, reduce energy bills and in turn fuel poverty, and decrease carbon emissions. As a result of installing insulation measures to 105 households in 2021/22, it is estimated that just short of 100 tonnes of carbon emissions were saved in that period alone. The Energy Efficient Scotland programme is an area based scheme, funded by the Scottish Government and delivered by Argyll and Bute Councils’ Home Energy Efficiency Project Team and will continue to run until at least 2024. The scheme offers insulation measures to private households and privately rented properties throughout Argyll and Bute. The scheme contributes to reducing carbon emissions and improving energy efficiency of homes, as well as being part of the Scottish Government’s route map to an energy efficient Scotland. In 2021/22, Argyll and Bute Council continued to support Argyll Community Housing Association (ACHA) with their Warm Homes Project. In addition to previous years funding an additional £747,600 of funding was secured jointly by Argyll and Bute Council and the Scottish Government to install external wall insulation to eligible private homes in mixed tenure blocks. An additional 89 private owners were supported by receiving insulation. ACHA have also been administering a wider programme of the installation over 1000 air source heat pumps across Argyll and Bute throughout 2021/22. Through the Energy Efficiency Forum, Argyll and Bute Council will continue to support key partners on projects which will contribute to reducing carbon emissions. Through the Strategic Housing Investment Fund, Housing Association Partners are required to build properties to increasingly greener standards. Page 298
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1 ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE COMMERCIAL SERVICES 11th AUGUST 2022 COMMUNITY EMPOWERMENT (SCOTLAND) ACT 2015 – UPDATE – EXPRESSIONS OF INTEREST / ASSET TRANSFER REQUESTS / REPORTING REQUIREMENTS 1. EXECUTIVE SUMMARY 1.1 The purpose of this report is to advise the Policy and Resources Committee on: The operation of the processes in regard to formal Asset Transfer Requests (ATR) and Participation Requests in terms of the Community Empowerment (Scotland) Act 2015; Current live informal Expressions of Interest (EOI’s) which may become subject to a formal asset transfer request or be dealt with outwith the formal asset transfer request process; Current live ongoing or agreed Participation Requests received by the Council; and The annual reporting requirements in respect of Asset Transfer Requests and Participation Requests set out in Section 95 and 32 of the Community Empowerment (Scotland) Act 2015 respectively. RECOMMENDATIONS 1.2 It is recommended that: The Policy and Resources Committee note the report. Page 301 Agenda Item 11
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2 ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE COMMERCIAL SERVICES 11th AUGUST 2022 COMMUNITY EMPOWERMENT (SCOTLAND) ACT 2015 – UPDATE – EXPRESSIONS OF INTEREST / ASSET TRANSFER REQUESTS/ REPORTING REQUIREMENTS 2. INTRODUCTION 2.1 The purpose of this report is to advise the Policy and Resources Committee on: The operation of the processes in regard to formal Asset Transfer Requests and Participation Requests in terms of the Community Empowerment (Scotland) Act 2015; Current live informal Expressions of Interest (EOI’s) which may become subject to a formal asset transfer request or be dealt with outwith the formal asset transfer request process; Current live ongoing or agreed Participation Requests received by the Council; and The annual reporting requirements in respect of Asset Transfer Requests and Participation Requests set out in Section 95 and 32 of the Community Empowerment (Scotland) Act 2015 respectively. 3. RECOMMENDATIONS It is recommended that: 3.1 The Policy and Resources Committee note the report. 4. DETAIL 4.1 The Council operates processes in compliance with parts 3 and 5 of the Community Empowerment (Scotland) Act 2015 in regard to: Asset Transfer Requests (ATR’s) (part 5 of the Act) which came into force on 23 January 2017. ATR’s enable community bodies to make requests to all local authorities, Scottish Ministers and a range of public bodies for any land or buildings they feel they could make better use of. They can request ownership, lease or other rights as they wish. Participation Requests (Part 3 of the Act) which came in to force on 1 April 2017. These are requests to public bodies which, if granted, enable communities to participate in decisions and processes which are aimed at improving outcomes. Page 302
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3 EXPRESSIONS OF INTEREST (EOIs) 4.2 There were thirteen (13) active Expressions of Interest (EOIs) (as at 31st May 2022) and all active EOI’s are listed in Appendix 1. In the current year 7 EOI’s have been received 1 of which was subsequently withdrawn. To date, since January 2017, 74 EOIs have been received of which 61 have been resolved or withdrawn. It should be noted that the Council has continued to engage with community groups who have had EOI’s active for a significant period of time and while they remain active the requesters have not yet moved them on. There are currently no significant actions outstanding for the Council in relation to these. 4.3 Further, most EOIs would not progress or develop into a formal asset transfer request. EOIs are dealt with in a way that seeks to deliver the outcome required by the community group allowing the request to progress outwith the formal asset transfer process. Some EOIs are also withdrawn for a variety of reasons such as the group changing focus of what was needed, a better option becoming available or a lack of time and resources to progress their plans. ASSET TRANSFER REQUESTS 4.4 The Council has put in place information, advice and guidance to community bodies who are interested in making a formal ATR and further information on this can be found on the Council’s website at https://www.argyll-bute.gov.uk/asset-transfer. There have been 3 ATRs submitted following the implementation of the Act and as at 31st May 2022 there were no active ATRs. 4.5 In May 2020 the Best Value Assurance Report prepared by Audit Scotland noted that the Council had made good progress with the Community Empowerment Act but that it needed to make the process easier to follow and accessible to all communities. The Asset Transfer Request process is statutory and therefore has limited options to make changes however the Asset Transfer Group have considered the Best Value Improvement Plan and have worked to further develop the informal EOI process simplifying the approach for communities. This has also led to the development of a section of the website to promote assets suitable for groups to work in partnership with council services which will be trialled during 2022 as part of the improvement plan actions. 4.6 Following on from the Best Value Assurance Report the Audit & Scrutiny Committee undertook a scrutiny review of the Council’s Community Asset Transfer process. The Panel concluded that: The Community Asset Transfer process is compliant with statutory requirements. The process enables opportunity for engagement with community transfer bodies. The process is supportive to community transfer bodies and communities. The review also identified a number of recommendations which have been implemented or have been built into the processes moving forward. Page 303
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4 PARTICIPATION REQUESTS 4.7 Part 3 of the Community Empowerment (Scotland) Act 2015 provides a framework for the use of participation requests by community bodies, with the intention of enabling communities to have more influence over services and decisions which affect them. Part 3 of the Act came into force on the 1st April 2017. 4.8 In line with the requirements of the Act, the Council has put in place a procedure which allows consideration of any requests made by community bodies. The procedure and further information can be found on the Council’s website at https://www.argyll-bute.gov.uk/find-out-more-about-participation-requests 4.9 During the period 1 April 2021 to 31 March 2022, the Council received two participation request, of which one was rejected. The Council was unable to progress the request from Isle of Kerrera Development Trust as the outcome improvement was not within the capacity of the Council to deliver as the ground was not in council ownership. The request that was accepted from Garelochhead Community Council was developed in conjunction with Police Scotland and the actions agreed were in respect of road safety matters. ASSET TRANSFER AND PARTICIPATION REQUESTS - ANNUAL REPORTING REQUIREMENTS 4.10 Section 95 of the Community Empowerment (Scotland) Act 2015 requires the Council to publish an annual report setting out the numbers of asset transfer requests received and their outcomes. 4.11 The report also requires to set out what the Council has done to 1: promote the use of asset transfer requests and 2: support community bodies to make requests and can be found on the Council’s asset transfer webpages here: https://www.argyll- bute.gov.uk/asset-transfer 4.12 Annual reports cover each year from 1 April to 31 March and must be published by 30 June. 4.13 Section 32 of the Act also requires the Council to publish an annual report in respect of Participation Requests setting out: The number of requests received; The number of requests agreed and refused; The number of requests which resulted in changes to a public service provided by, or on behalf of, the public service authority; and Any action taken by the public service authority to promote and support the use of participation requests. 4.14 Annual reports Participation Requests cover each year from 1 April to 31 March and must be published by 30 June. The relevant report has been published on the Council’s Participation webpages. 5. CONCLUSION 5.1 This report advises the Policy and Resources Committee on the operation, of the Page 304
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5 processes in regard to Asset Transfer Requests and Participation Requests in terms of the Community Empowerment Act 2015 and updates on ATR’s, EOI’s and Participation Requests to date. 5.2 It is recommended that the Policy and Resources Committee note the contents of the report. 6. IMPLICATIONS 6.1 Policy – In line with council policy relating to Asset Transfer and Participation Request processes. 6.2 Financial – None from annual reporting. 6.3 Legal – In line with statutory requirements of the Community Empowerment (Scotland) Act 2015 and related Regulations. 6.4 HR – None. 6.5 Fairer Scotland Duty 6.5.1 Equalities – Protected characteristics – None. 6.5.2 Socio economic Duty – None. 6.5.3 Islands – None 6.6 Climate change – None from annual reporting. 6.7 Risk – Failure to meet statutory requirements could have reputational implications for the council. 6.8 Customer Service – None. Douglas Hendry - Executive Director with responsibility for Commercial Services Councillor Gary Mulvaney – Policy Lead, Finance and Commercial Services Date: 27th June 2022 For further information contact: Ross McLaughlin, Head of Commercial Services, 01436 658 914 David Allan, Estates and Property Development Manager, 01436 657 620 David Rennie, Partnerships Development Officer, 01700 501 371 Michael Nicol, Solicitor, Legal and Regulatory Services, 01546 604 468 Page 305
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6 Appendix 1 Current Active Expressions of Interest (as at 31st May 2022) It should be noted that the Council has continued to engage with community groups who have had EOI’s active for a significant period of time and while they remain active the requesters have not yet moved them on. There are currently no significant actions outstanding for the Council in relation to these. No Organisation Asset Summary of Expression of Interest Current Status 1 Mid Argyll Rugby Club (MARC) Kilmory Pony Park show ground Request to lease the ground for development of rugby facilities. Terms agreed with MARC and to be reported for internal approval to proceed. 2 Islay Development Initiative Kilarrow Stables, Islay Request to acquire the building to convert to flats for service workers and community uses. Main building is currently operational and part of wider assessment of office space. 3 Kirkmichael Community Development Group Kirkmichael Park Changing Room Request to lease pavilion and grounds for use as an office and to deliver wider services. Group are being supported to develop their business plan for the proposal. 4 Barbara's Wildlife Rescue Ground at Hafton, Dunoon Request to lease / acquire ground for an animal rescue centre Group have been seeking a suitable site and are assessing the feasibility of this site. 5 Scenic Sandbank Former Teacher Centre Sandbank Request to purchase the site and develop a community garden. Group assisted to secure an independent valuation and are applying to the Land Fund to support the acquisition of the ground. 6 South Islay Development Ramsay Hall Request to purchase the building to redevelop the facility and operate the services. Detailed plans provided by the group require to be assessed in conjunction with Education and the Care Commission as the proposal involves a nursery use. 7 Rhu and Shandon Community Centre Rhu Community Centre Request for lease to assist in applying for development funding for the building Terms are under discussion but the approach requires to be consistent with other halls / community facilities. Page 306
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7 8 Kilfinan Community Forest Company (KCFC) Tighnabruaich Primary School Grazings access Request to acquire ground to formalise access. Group assisted to secure an independent valuation and are applying to the Land Fund to support the acquisition of the ground. 9 Dunoon Foodbank Former Dunoon Youth Centre, Dunoon Request for a lease of the property to continue and expand their services. Temporary Licence to occupy granted and upgrade works costed. Lease to be concluded when group established as a SCIO. 10 Isle of Jura Development Trust Picnic area at Craighouse Pier, Isle of Jura Request for a lease of the site to improve the facilities and install a container for use as a bakery to support local business. Initial stages of background checks being undertaken. 11 The Dunoon Project Ltd Morag’s Fairy Glen & Bishop’s Glen, Dunoon Request to acquire the sites to support the delivery of the wider project and improve the public access and facilities. Initial stages of background checks being undertaken. Legal Services involved as proposal involves former reservoir. 12 Ardrishaig Community Food Growing Project King George V Park, Ardrishaig Request to lease part of park as a community food growing area. Initial stages of background checks being undertaken. 13 Dunoon Youth Football League Black Park, Dunoon Request to take over management of the Black Park area to improve facilities Initial stages of background checks being undertaken. Page 307
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Policy and Resources Committee Work Plan 2022-23 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 11 August 2022 Financial Report Monitoring Pack Financial Services Every meeting except May Budget Outlook 23-24 to 27-28 Financial Services Service Annual Performance Reviews Customer Support Services Annual Amendment to Pensions Discretions Customer Support Services UK Shared Prosperity Fund – Argyll and Bute Investment Plan Development and Economic Growth Referred from Council 30 June 2022. Crown Estate and Place Based Investment Development and Economic Growth Climate Change Board Update Papers Council Carbon Emissions & Climate Investment 2022 Decarbonisation Plan Tracker & Case Studies Commercial Services Community Empowerment (Scotland) Act 2015 – Update – Expressions of Interest / Asset Transfer Requests / Reporting Requirements Commercial Services Date Report Title Dept/Section How Often? Date Due Comments 13 October 2022 Financial Report Monitoring Pack Financial Services Every meeting except May Budget Outlook 23-24 to 27-28 Financial Services Page 309 Agenda Item 12
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Policy and Resources Committee Work Plan 2022-23 Procurement Strategy and Sustainable Procurement Policy Legal & Regulatory Support Approach to Budget 2023-24 Financial Services Working Group Update Date Report Title Dept/Section How Often? Date Due Comments 8 December 2022 Financial Report Monitoring Pack Financial Services Every meeting except May Budget Outlook 23-24 to 27-28 Financial Services Future Items – Date to be determined. Key Performance Indictors 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 Page 310