Agenda Document Pack - Midlothian Council - 16/12/2025
Midlothian Council · 16 December 2025
Back to Midlothian Council — 16 December 2025 and its agenda
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Notice of Meeting and Agenda Midlothian Council Venue: Normandy Court/ Hybrid, Normandy Court, 20 Normandy Dr, Dalkeith, EH22 1JG Date: Tuesday, 16 December 2025 Time: 11:00 Executive Director : Place Contact: Clerk Name: Democratic Services Clerk Telephone: Clerk Email: democratic.services@midlothian.gov.uk Further Information: This is a meeting which is open to members of the public. Privacy notice: Please note that this meeting may be recorded. The recording may be publicly available following the meeting. If you would like to know how Midlothian Council collects, uses and shares your personal information, please visit our website: www.Midlothian.gov.uk Page 1 of 216
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1 Welcome, Introductions and Apologies 2 Order of Business Including notice of new business submitted as urgent for consideration at the end of the meeting. 3 Declaration of Interest Members should declare any financial and non-financial interests they have in the items of business for consideration, identifying the relevant agenda item and the nature of their interest. 4 Deputations No items for discussion 5 Minutes 5.1 Minute of the Midlothian Council meeting of 21 October 2025 - submitted for approval 5 - 20 Private Minute Addendum of the Midlothian Council meeting of 21 October 2025 - submitted for approval 5.2 Minute Volume Index - submitted for consideration 21 - 22 5.3 Public Action Log 23 - 28 Private Action Log 6 Questions to the Council Leader No items for discussion 7 Motions 7.1 World Cup 2026 29 - 30 7.2 Congratulating Penicuik Community First Responders on their 20th Anniversary 31 - 32 8 Public Reports 8.1 Treasury Management Mid-Year Review Report 2025/26, report by Chief Financial Officer and Section 95 Officer 33 - 60 Page 2 of 216
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8.2 Financial Monitoring 2025/26 - General Fund Revenue, report by Chief Financial Officer and Section 95 Officer 61 - 74 8.3 General Services Capital Plan 2025/26 Quarter 2 Monitoring, report by Chief Financial Officer and Section 95 Officer 75 - 90 8.4 Housing Revenue Account - Revenue Budget and Capital Plan 2025/26, report by Chief Financial Officer and Section 95 Officer 91 - 96 8.5 Medium Term Financial Strategy - 2026/27 to 2028/29, report by Chief Financial Officer and Section 95 Officer 97 - 106 8.6 Midlothian School Admission Policy, report by Executive Director Children Young People and Partnerships (Acting) 107 - 112 8.7 Attainment Update for Midlothian in Primary and Secondary Schools, report by Chief Education Officer 113 - 132 8.8 Pre-Election Publicity Guidance, report by Chief Executive 133 - 158 8.9 Standing Orders Working Group - Deputations Process, report by Chief Officer Corporate Solutions 159 - 166 8.10 Local Review Body - Nomination of Member, report by Chief Officer Corporate Solutions 167 - 170 8.11 Midlothian Armed Forces Covenant Plan 2025 to 2030, report by Executive Director Children, Young People and Partnerships (Acting) 171 - 204 8.12 Penicuik High School Refurbishment and Expansion – Update Report, report by Executive Director Children, Young People and Partnerships (Acting) 205 - 216 Exclusion of Members of the Public (A) TO CONSIDER RESOLVING TO DEAL WITH THE UNDERNOTED BUSINESS IN PRIVATE IN TERMS OF PARAGRAPHS 1, 8 AND 9 OF PART 1 OF SCHEDULE 7A TO THE LOCAL GOVERNMENT (SCOTLAND) ACT 1973 - THE RELEVANT REPORTS ARE THEREFORE NOT FOR PUBLICATION; AND (B) TO NOTE THAT NOTWITHSTANDING ANY SUCH RESOLUTION, INFORMATION MAY STILL REQUIRE TO BE RELEASED UNDER THE FREEDOM OF INFORMATION (SCOTLAND) ACT 2002 OR THE ENVIRONMENTAL INFORMATION REGULATIONS 2004. 9 Private Reports 9.1 Midlothian Energy Limited – Business Plan 2026-30, report by Executive Director Place 9.2 Lothian Buses - Transport ALEO Reform, report by Executive Director Place 9.3 Chief Official and Chief Officer Terms and Conditions, report by Head of Paid Service and Acting HR Strategic Lead Page 3 of 216
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10 Date of Next Meeting The next meeting will be held on Tuesday 24 February 2026. Page 4 of 216
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INTERNAL USE ONLY DRAFT BY/DATE: REVIEW BY/DATE: 1-993 Minute of Meeting Midlothian Council Tuesday 16 December 2025 Item No 5.1 Midlothian Council Date Time Venue Tuesday 21 October 2025 11.00am Council Chambers, Normandy Court and Hybrid Present: Provost McCall (Chair) Deputy Provost Bowen (Deputy Chair) Councillor Parry (Council Leader) Councillor Cassidy (Deputy Council Leader) Councillor Alexander (virtual) Councillor Curran Councillor Imrie (virtual) Councillor McEwan Councillor McKenzie Councillor McManus Councillor Milligan Councillor Russell Councillor Scott Councillor Smaill Councillor Pottinger (virtual) Councillor Virgo Councillor Winchester Religious Representatives In attendance: Dr Grace Vickers, Chief Executive Kevin Anderson, Executive Director Place Fiona Robertson, Executive Director Children, Young People and Partnerships Morag Barrow, Director of Health and Social Care: Midlothian Health and Social Care Partnership, Chief Officer to Midlothian Integrated Joint Board Fiona Clandillon, Head of Development Nick Clater, Head of Adult Services & Chief Social Work Officer David Gladwin, Chief Financial Officer & Section 95 Officer Saty Kaur, Chief Officer Corporate Solutions Derek Oliver, Chief Officer Place William Venters, Principal Solicitor Lynn Cochrane, Communications Officer (virtual) Claire Gardiner, Audit Director, Audit Scotland Louise Bell, Acting HR Strategic Lead Lesley Aitken, Senior Finance Business Partner Gary Thomson, Senior Finance Business Partner Nicola Thorburn, Democratic Services Team Leader Hannah Forbes, Democratic Services Officer Louise Middleton, Democratic Services Officer Page 5 of 216
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Maria Perez, Democratic Services Officer 1. Welcome and Apologies The Chair welcomed everyone to this meeting of Midlothian Council and advised that the meeting will be broadcast live and saved to the Council’s archive. Items heard in private will not be made available to the public. Apologies were submitted from Councillor Drummond & the Religious Representative, Anne-Theresa Lawrie. 2. Order of Business The Order of Business is as per the agenda. 3. Declarations of Interest Elected Members were invited to declare their financial or non-financial interest in items of the agenda. No declarations of interest were intimated at this stage of the proceedings. Elected Members were reminded that they could make further declarations of interest at relevant items of the agenda. 4. Deputations No items for discussion. 5. Minutes Report No. Report Title Presented by: 5.1 Minute of Midlothian Council Meeting of 09 September 2025 Executive Director Place The Minute of the meeting of Midlothian Council held on the 09 September 2025 was submitted for approval. Councillor Scott moved to update the Minute with some of the comments they had made during the meeting to capture the importance of Midlothian Council supporting Catholic education. The Principal Solicitor advised Councillor Scott that Standing Order 7.9 states that the Minute of a Meeting will not be verbatim and that it is for Council to approve the document as a correct record. Council unanimously agreed to suspend Standing Order 7.9 and update the Minute of the Meeting of 09 September 2025 in line with the comments from Councillor Scott and to reference that the motion was a result of a cross-party agreement. Page 6 of 216
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Councillor Virgo added that while they had no objection to the Minute being updated Council should be cautious not to set a precedent for changing small parts of the Minute going forward. Councillor Parry moved to approve the Minute of the Meeting of Midlothian Council of 09 September 2025, including the update discussed, seconded by Councillor Cassidy. Councillor Parry moved to approve the Private Minute Addendum of Midlothian Council meeting of 09 September 2025 as a correct record, seconded by Councillor Cassidy. Decision The amended Minute of the Midlothian Council Meeting of 09 September 2025, including the update discussed, and the Private Addendum of the Midlothian Council Meeting of 09 September 2025 were approved as the correct record. Report No. Report Title Presented by: 5.2 Minute Volume Index Executive Director Place The Minute Volume Index was submitted for approval. The Minute Volume Index was moved by Councillor McEwan and seconded by Councillor Virgo. Decision Council approved the Minute Volume Index. Report No. Report Title Presented by: 5.3 Action Logs Executive Director Place Council agreed that items flagged as recommended for closure could be removed from the Action Logs with the exception of items 6 and 8 as more information is required on each. Decision Council noted the Action Logs and agreed that items flagged as recommended for closure could be removed, with the exception of items 6 and 8. 6. Questions to the Leader of the Council No items for discussion. Page 7 of 216
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7. Motions No items for discussion. 8. Public Reports Report No. Report Title Presented by: 8.1 Midlothian Council 2024/25 Annual Audit Report Audit Director, Audit Scotland The Audit Director, Audit Scotland presented the Midlothian Council Annual Audit Report for information, which concludes the 2024/25 audit and was subject to scrutiny by the Audit Committee on 30 September 2025. The audit of Midlothian Council’s 2024/25 Annual Accounts resulted in an unqualified opinion confirming that the financial statements are free from material misstatement. However, the audit did identify some valuation and classification issues in relation to non-current assets. These included the misclassification under International Financial Reporting Standards (IFRS) 16, errors in land and school valuations, and the use of outdated conditions surveys. Adjustments were made to the financial statements to correct these issues and, while none were material individually, Audit Scotland has highlighted areas for improvement with regards to asset management and valuation methodology which are set out as recommendations in Appendix 1. The Audit Director, Audit Scotland advised that the report also covers the work on wider scope and best value. Audit Scotland are satisfied that there are appropriate arrangements in place, but they have recognised the challenges in financial sustainability including the ongoing use of reserves and the need for savings measures to balance budgets in the medium term. This is the first year of the Audit Director, Audit Scotland’s appointment where the statutory deadline has been met and they passed on their thanks to Midlothian Council’s Finance Team for their work in supporting the audit. The Chair thanked the Audit Director, Audit Scotland for their report and invited questions. Council thanked Audit Scotland, Audit Committee, the Chief Financial Officer and Section 95 Officer and their team for all the work they have done in scrutinising the accounts. Council stressed the importance of Elected Members being sighted on, and understanding, the criticality of the key messages in the report, in particular the unsustainability of using reserves to bridge funding gaps. Decision Council noted the contents of the report. The Audit Director, Audit Scotland left the meeting at 11:15am. Page 8 of 216
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Report No. Report Title Presented by: 8.2 Housing Revenue Account – Rent Setting Strategy 2026/27- 2028/29 Executive Director Place The Executive Director Place presented the report for decision, advising that the current rent strategy for council house tenants for the period 2023/24 – 2025/26 is in its final year. This report presents the rent setting strategy options for future rental charges for council housing from April 2026, which in turn will support the continuing investment in the Council’s existing housing stock and will determine the level of new build investment beyond the Council’s current social housing programme commitment. Following approval, the options will be subject to consultation with all Midlothian Council tenants and waiting list applicants during Winter 2025. The consultation outcomes and a recommended option will be reported back to Council in February 2026. Council is recommended to approve the Rent Setting Strategy options for 2026/27 – 2028/29 in a consultation exercise with all Midlothian Council tenants and waiting list applicants. The Chair thanked the Executive Director Place for their report and invited questions. Council asked for clarity on the percentages in section 5.1 of the report and whether those are phased over 3 years, or if it is 5.84% now and then no change for a further 3 years. Council also queried whether 5.84% was an appropriate for 3 years’ worth of increase and why there is not a strategy that allows rent increases with inflation at the very least. The Executive Director Place advised that the table in 5.1 represents recurring annual increases over that period, and depending on the outcome of the consultation, this will be presented to Council in February 2026. Council noted that the Scottish Housing Regulator recommends that Midlothian Council consult tenants about rent increases, but this is asking people who have a specific interest in what the outcome would be. The Executive Director Place advised part of the consultation process is to make the case for rent increases and show tenants what they are paying for and what the Council is delivering in terms of investment in the housing stock. Based on previous consultations, the Executive Director Place advised that tenants do understand the need for increases and that the target audience is current tenants and prospective tenants that are on waiting lists only. The Local Housing Strategy is running in tandem with the Rent Setting Strategy now and this allows a wider group of interested parties and service users to provide their input. Councillor Alexander joined the meeting at 11.29am. Councillor Curran advised Council that they had circulated an amendment to the recommendations in this paper and read it out in the Chamber. Councillor Curran requested that the following question be included in the forthcoming consultation: ‘If a rent increase is implemented to fund new Council housing developments, should all subsequent Council house allocations (new builds Page 9 of 216
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and existing) be restricted only to applicants who reside in or have strong links with Midlothian?’ Following a question from the Provost, the Principal Solicitor advised that the request was competent as it was a matter arising from consideration of the report and if a consensual approach was taken by Council, then Councillor Curran’s question could be included as part of the consultation. The Executive Director, Place confirmed that Councillor Curran’s question could be included in the consultation paper. Following further discussion Elected Members unanimously agreed to accept the recommendations in the report and to include the following question in the consultation: If a rent increase is implemented to fund new Council housing developments, should all subsequent Council house allocations (new builds and existing) be restricted only to applicants who reside in or have strong links with Midlothian? Council highlighted that there was no reference to mortgage to rent in the report and asked if any applications had been received. The Executive Director Place advised that there is one case ongoing and whether this comes to conclusion is dependent on the process which is managed by Citizens Advice Bureau (CAB). There have not been any other applications received in the current year prior to that case. Council noted that monies from rent into the Housing Revenue Account (HRA) is also spent on maintenance, repairs, administration and voids. The HRA is looking unhealthy due to reasons not to do with the tenants and therefore they will object that they are being made to pay higher rents to fill in these gaps which should be within the control of the Council. The Executive Director Place advised that the rent modelling is outlined within the paper under agenda item 8.3 and does indicate that without a rent increase the reserve will be eroded if nothing changes. In terms of the distribution, the Audit Scotland report references the overspend in terms of repairs and maintenance this year which is a result of the work ongoing to prevent dampness in the housing stock and this, along with the results, has been reported to Council previously. The Housing Team is light on resource and following a comparison to neighbouring authorities a restructure of the Housing Team will be completed. Council asked if the unbudgeted increase in maintenance costs is connected to the way the service has been managed and whether there was a paper on this subject due for presentation to Council. The Executive Director Place advised that the closure report in terms of Building Maintenance Service (BMS) Review has been provided to Officers and is going through the relevant forums. This will be presented to the Cross-Party Working Group, then onto the Business Transformation Steering Group (BTSG) and then to Council. Council asked for further information on voids and whether progress is being made to reduce the number. The Executive Director Place advised there were additional voids this year because of the delivery of the new build housing, but they are not counted until they are let. The Executive Director Place advised that they can review and provide more detail. Page 10 of 216
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Council queried how such a small rent increase will allow Midlothian Council to build 500 units. The Executive Director Place advised that for phases 3 and 4 of the Social Housing Programme some of the programme was forward funded and this is indicated in the narrative. The Chief Finance Officer and Section 95 Officer suggested that when the outcome of the rent consultation is in, and before it comes back to Council for decision, that an Elected Members Briefing is arranged to outline the model and answer questions. Council also highlighted those people that are considered as in-work poverty, where they are just over the limit to qualify for benefits and under the scale to have affordability and asked if there was anything the Council can put in place to give them some assistance. The Executive Director Place advised that there are a range of schemes run by Midlothian Council and the Scottish Government in terms of tenant grants and homeless preventions. The Council Leader added that there are many people in Midlothian considered as being in in-work poverty and the Cost of Living Task Force reviewed this in conjunction with Housing. The Council Leader reminded Council that the Poverty-Lived Researcher has compiled a report and most of the levers linked with in-work poverty lie with the national governments and not with the local authorities. The Council Leader suggested using the researcher’s information to make a cross-party approach and lobby government to show exactly how people are, or are not, surviving in Midlothian. The Council Leader added that there was recent government funding where many local authorities benefited but Midlothian did not. Councillor McKenzie moved the report, seconded by Councillor Curran that the recommendations in the report be approved and include the following question in the consultation: If a rent increase is implemented to fund new Council housing developments, should all subsequent Council house allocations (new builds and existing) be restricted only to applicants who reside in or have strong links with Midlothian and with no members being otherwise minded the motion became the decision of Council. Decision Council approved the recommendations in the report and agreed to include the following question in the consultation: If a rent increase is implemented to fund new Council housing developments, should all subsequent Council house allocations (new builds and existing) be restricted only to applicants who reside in or have strong links with Midlothian. Action Provide an update on the progress being made to reduce the number of voids – Executive Director Place. Schedule an Elected Members Briefing in relation to the Rent Setting ahead of February 2026 meeting of Midlothian Council - Executive Director Place. Prepare a cross-party approach to lobby government to make life better for the people of Midlothian – Council Leader. Page 11 of 216
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Report No. Report Title Presented by: 8.3 Housing Programme Update 2024 - 2025 Head of Development The Head of Development presented the report for noting, updating Council on the status of Midlothian Council’s affordable housing programme in 2024/2025 on approved sites and proposed new sites for the Council new build affordable housing programme and other initiatives. Council is recommended to note the contents of the report. The Chair thanked the Head of Development for their report and invited questions. Councillor McKenzie welcomed the report for noting and recognised the good work that that is ongoing in relation housing insulation. Councillor McKenzie advised that they had received positive feedback from those tenants that have received this and thanked the Head of Development and the teams involved for their efforts. Council acknowledged the continued demand for housing as Midlothian continues to grow. Council discussed housing build costs per unit and noted that Midlothian Council build to a higher specification than some private developers. Council asked what impact it would have on the house-build programme if Councils were to build to the same lower cost as developers. The Head of Development advised that the affordable housing supply programme is made up of homes delivered by Midlothian Council as the main developer, and under the Section 75 agreement which are homes built by developers. New homes from developers do represent value for money and are cheaper than what the Council builds themselves, largely due to the different standards, such as zero emissions heating systems. The programme is balanced to allow both build types. Decision Council noted the report and its recommendations. Report No. Report Title Presented by: 8.4 Midlothian Strategic Housing Investment Plan 2026/27 - 2030/31 Head of Development The Head of Development presented the report for decision, this report summarises the key points set out in Midlothian’s Strategic Housing Investment Plan (SHIP) 2026/27 – 2030/31, which details the priorities for investment in new affordable housing in Midlothian. Council is recommended to approve the Strategic Housing Investment Plan (SHIP) 2026/27 – 2030/31, which will be submitted to the Scottish Government on 31st October 2025 to meet the required dateline, subject to approval by Council. The Chair thanked the Head of Development for their report and invited questions. Page 12 of 216
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Councillor McKenzie acknowledged that Midlothian Council’s commitment to building houses, in comparison to the rest of Scotland, to reduce poverty, has been second to none. Council noted the progress made in offsite building as part of the City Region Deal where Councillor Imrie represents Midlothian Council. Council asked for details in relation to table 1 of the report which states that Registered Social Landlords (RSL) are building more houses that Midlothian Council. The Head of Development advised that in some instances the figures are inflated following the acquisition of significant sites and this lifts the proportion of homes delivered by RSLs. As a Council the housing supply is governed by what sites are owned, what can be delivered, what is affordable in the Council’s business plan and what Section 75 sites Midlothian Council choose to build on. There are many homes coming through the private sector, and this gives a healthy indication that they want to build and be part of the Affordable Housing Supply Programme. Council asked what happens when neither Midlothian Council nor an RSL build on the affordable housing allocation on a particular site. The Head of Development advised that typically where there is no take-up within the timescales a developer is seeking to complete in, they have to find another way to deliver the affordable housing, and there are several ways to do that which is governed through the planning policy e.g. a lesser subsidy could be applied and then delivered at mid- market rent or low cost ownership. Council acknowledged the fluid nature of the housing stock and asked if it was an option to offer a higher cash incentive to downsize as the current payment would barely cover removal costs. The Executive Director Place advised that this was discussed at the recent Elected Members Housing Briefing, and an Officer has been appointed to look more creatively at any issues people are facing in downsizing. Part of this work was to analyse the reasons why people are not moving, and it is not always related to the financial incentive, it is about the practical support which would be beneficial to facilitate a move. The outcome of this work will be brought back to Council in due course. Council discussed the importance of maintaining a balance in this area as there are already significant waiting lists for 1- and 2-bedroom properties, and increasing the incentive for people to downsize will make the problem bigger as the housing stock is not there, so this should be considered in the next allocation policy review. Councillor Scott asked for information on some of the older planning agreements to get clarity on what percentage of affordable housing is expected on each site. The Head of Development advised that they would provide a list of housing developments and the percentage of social housing that can be expected in each. The report was moved by Councillor McKenzie and seconded by Councillor Curran. Decision Council approved the recommendations in the report. Action Provide Elected Members with a list of housing developments and the percentage of affordable housing that can be expected in each – Head of Development. Page 13 of 216
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Report No. Report Title Presented by: 8.5 Rapid Rehousing Transition Plan 2025/26 Executive Director Place The Executive Director Place presented the report for information. Council is recommended to note the updated Rapid Rehousing Transition Plan 2025/26, which is due to be submitted to the Scottish Government in October 2025. The Chair thanked the Executive Director Place for their report and invited questions. Council acknowledged that the Rapid Rehousing Programme is a fantastic contribution to Midlothian and thanked the Executive Director Place. Midlothian is not unique, and the homeless pressures are being seen across the nation. Council added that the delivery of the Rapid Rehousing Transition Plan can help reduce additional pressure on other services, particularly for the most vulnerable in the society. Council praised the Housing Department for taking a pragmatic approach to turning some temporary accommodation into permanent homes for families that have already suffered trauma and upheaval. Council asked for an overview of the 6 breaches of the Unsuitable Accommodation Order (UAO) and acknowledged that this is likely due to the extreme housing pressures. The Executive Director Place advised that this is a significant number for Midlothian Council and is indicative of the pressures. The breach statistics can also be impacted by things such as displacement or missing a deadline by one day. Council referenced Table 4 of the appendix and, given the large increase, asked for more information in relation to the terminations linked default on payments/mortgages and whether Midlothian Council is content that the right support is in place where appropriate. The Executive Director Place advised that with the new Housing Bill there are additional duties to local authorities and other public agencies in terms of prevention of homelessness being extended. There has always been a requirement for mortgage providers to notify local authorities where they are taking action. The Executive Director Place agreed to do further analysis and provide Elected Members with more detail on the increase in the homeless application statistics in relation to the termination of tenancies due to mortgage arears and default on payment. Decision Council noted the report and its recommendations. Action Provide Elected Members with more detail on the increase in the homeless application statistics in relation to the termination of tenancies due to mortgage Page 14 of 216
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arears and default on payment. Confirm that the right support is in place for those impacted – Executive Director Place. Report No. Report Title Presented by: 8.6 Midlothian Council’s Housing Services Assurance Statement 2025 Executive Director Place The Executive Director Place presented the report for decision, advising that to comply with the Scottish Housing Regulator’s (SHR) Regulatory Framework, the Council must approve and submit an Annual Assurance Statement (AAS) each year providing assurance that it is meeting legislative and regulatory standards for social housing in Scotland. This report explains the Regulatory Framework and appends an Assurance Statement for approval by Council. The AAS confirms the Council fully meets the SHR required standard and outcomes. Following Council approval, the AAS will be published on the SHR and Midlothian Council’s websites. Council is recommended to approve the AAS attached at Appendix 1 for submission to the Scottish Housing Regulator by 31 October 2025 and authorise the signing of the AAS the Cabinet Member for Housing. The Chair thanked the Executive Director Place for their report and invited questions. No questions were submitted. The report was moved by Councillor Curran and seconded by Councillor Parry. Decision Council approved the recommendations in the report. Report No. Report Title Presented by: 8.7 Edinburgh and South East Scotland City Region Deal (ESESCRD) Annual Report 2024 – 2025 Executive Director Place The Executive Director Place presented the report for noting, summarising the key findings on the appended City Region Deal Annual Report as approved by the City Region Deal Joint Committee on 5 September 2025. The City Region Deal Programme Management Office produces an annual report each year to assess how effectively the City Region Deal is progressing towards its overall vision and inclusive growth outcomes for the city region. This Edinburgh and South East Scotland City Region Deal Annual Report covers the seventh year of the 15-year programme (August 2024 to July 2025). The report provides a comprehensive overview of the City Region Deal, including: a Financial Statement for 2024-25; progress summaries for each project and programme; and expected milestones for the coming year. Seven case study Page 15 of 216
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videos demonstrate the tangible benefits the Deal's projects and programmes are delivering for people across the region. Council is recommended to note the Edinburgh and South East Scotland City Region Deal (ESESCRD) Annual Report 2024-2025. The Chair thanked the Executive Director Place for their report and invited questions. Councillor Imrie highlighted the two areas where poverty is being addressed, 6.2 Housing Investment Programme and 6.3 Integrated Regional Employability Skills Programme. Page 207 of the meeting papers detail the benefits of having a regional programme to get people into jobs, to advance learning and career prospects. There has been real pace and progress in regional working. Councillor Imrie added that they have been lobbying in relation to the Sheriffhall grade separation and have now received a response from Alison Irvine, Head of Transport Scotland, regarding a meeting on 09 December 2025 where a regional case can be made. Decision Council noted the report and its recommendation. Report No. Report Title Presented by: 8.8 Midlothian Chief Social Work Officer Draft Annual Report 2024- 25 Head of Adult Services & Chief Social Work Officer The Head of Adult Services & Chief Social Work Officer presented the draft report for information. The draft report advises of the social work activities undertaken in Midlothian on behalf of the Chief Social Work Officer in 2024-25. This is a statutory report that is provided to the Scottish Government by 31st October 2025. The Head of Adult Services & Chief Social Work Officer noted that they became the Chief Social Work Officer in October 2024 upon Joan Tranent’s retiral. Joan was Chief Social Work Officer for the 3 years prior, and the Head of Adult Services & Chief Social Work Officer thanked Joan for their leadership and support. The Head of Adult Services & Chief Social Work Officer advised that the report provides an overview of the work undertaken in all aspects of public protection, statutory mental health and justice work. The report provides information and assurance in areas of governance, particularly in relation to statutory work. The challenges are also included, which largely relate to resourcing and workforce and are not unique to Midlothian, and work continues to transform the services. The Head of Adult Services & Chief Social Work Officer acknowledged that our workforce is our biggest asset and noted their thanks to them all. From the Cook at Newbyres Care Home, to the Care at Home Worker in the community, the Extra Care Housing Working in Cowan Court, to the unpaid supervisor at No 11, the Page 16 of 216
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Children’s Practitioner in Eskdale, to the Substance Misuse working in No 11, and to all Social Workers and managers. The Head of Adult Services & Chief Social Work Officer added that social work remains a misunderstood and maligned profession but all our staff play a vital part in ensuring people are kept safe ensuring their lives are enhanced and improved everyday so people can reach their full potential. The Head of Adult Services & Chief Social Work Officer expressed that it was an honour to be the Chief Social Work Officer for Midlothian. Council is requested to note the information in the Midlothian Chief Social Work Officer Draft Annual Report 2024-25. The Chair thanked the Head of Adult Services & Chief Social Work Officer for their report and invited questions. Council thanked the Head of Adult Services & Chief Social Work Officer for the great report and acknowledged the challengers this service face. Council gave credit and thanks to the Head of Adult Services & Chief Social Work Officer and their team for everything they do in this complex field. Decision Council noted the report and its recommendations. 12:27pm – The Acting HR Strategic Lead joined the meeting. Report No. Report Title Presented by: 8.9 Midlothian Council’s Employee Wellbeing Charter Acting HR Strategic Lead The Acting HR Strategic Lead presented the report for information. The report sets out the background relating to how our approach to wellbeing has grown within the Council and our ongoing commitment with links to “nurture” – one of the 5 pillars of the workforce journey contained in the Council’s Workforce Strategy 2024-2034. Council is asked to: • Note that October is designated as the Council’s Employee Wellbeing Month • Note the new Employee Wellbeing Charter The Chair thanked the Acting HR Strategic Lead for their report and invited questions. Council acknowledged that they are blessed with a fantastic workforce and that they are pleased to see that staff are being listened too. The Acting HR Strategic Lead added that the Council’s agency staff are also encouraged to embrace the Wellbeing Charter. Page 17 of 216
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In their role as Sponsor of the 21 Century Workforce Transformation Theme, Councillor Virgo thanked the Acting HR Strategic Lead for highlighting the power of work that is being done to make Midlothian Council a great place to work. The Wellbeing Charter underpins the critical work in relation to organisational wellbeing and management within Midlothian Council. Councillor Virgo added that a resilient workforce is an effective workforce and that they are pleased to see Midlothian Council leading by example to ensure the Wellbeing Charter is proactive, and not reactive. Decision Council noted the report and its recommendations. The Provost advised everyone that today’s meeting of Midlothian Council was the final meeting for Fiona Robertson, Executive Director Children, Young People and Partnerships before their retirement. The Provost passed on their personal thanks and added that it had been a great pleasure to work together. The Chief Executive, as Head of Paid Service, thanked the Executive Director Children, Young People and Partnerships for both their personal commitment and service to Midlothian. Fiona Robertson first joined Midlothian Council just prior to the pandemic in 2020, bringing with her a wealth of skills and experience as a former Her Majesty's Inspectorate of Education (HMIe), Head of Education and Children’s Services and a recognised national maths expert. The Chief Executive believes that Ms Robertson has left a legacy to be truly proud of. Ms Robertson has worked tirelessly to improve outcomes for the children, young people and families in Midlothian at the same time as supporting staff to be the very best they can be. Over the last 5 years Ms Robertson has also led improvements which have delivered award winning results, from the Equipped for Learning programme, The Promise and her visionary work on the Midlothian Aligned Curriculum Offer (MACO), and most recently the Digitally Aligned Curriculum Offer (DACO). Ms Robertson’s work is not only recognised locally and regionally but has also been celebrated nationally across the UK and internationally. The Chief Executive advised that it has been an honour and a privilege to have had Ms Robertson on their Corporate Management Team, and on behalf of the whole team, wished Ms Robertson a very long and happy retirement. The Council Leader agreed with the Chief Executive’s sentiments, and they are very proud to celebrate the incredible service, dedication, and leadership of Fiona Robertson. From the moment Ms Robertson joined Midlothian Council they brought an unwavering focus to the table and ensured every policy or decision was centred on the needs of the child. Ms Robertson has been the driving force behind many of the service’s greatest successes such as Communities, Lifelong Learning and Employability Service which is the cornerstone of local communities and received outstanding praise from Education Scotland. Ms Robertson has also overseen tremendous progress in terms of the Council’s positive post-school destinations. The Council Leader highlighted Ms Robertson’s work beyond their statutory duties in the areas that require genuine heart and vision - this was shown in their profound commitment to The Promise and ensuring care-experienced children grow up loved, safe and respected. This was never just a policy for Ms Robertson, it was a personal commitment, and they pushed every part of their Directorate to fully embed the spirit of The Promise and how our most vulnerable young people are cared for, making Midlothian a leader in this critical national movement. On a personal note, the Page 18 of 216
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Council Leader added that, when you work side by side with someone though major crises and complex issues you learn very quickly who you can rely on – and in those intense moments the Council Leader knew they could trust Ms Robertson’s clear- headed judgement, deep expertise and absolute commitment to doing what was right. The Council Leader is grateful for Ms Robertson’s counsel, support, and partnership. Ms Robertson dedicated their professional life to public service and to Education and has left an endurant positive legacy in Midlothian and now is the time for them to focus on their own wellbeing. On behalf of Midlothian Council and the communities we serve, thank you for your leadership, passion, professional service and hope your happy retirement is filled with joy. Councillor Scott said that Fiona Robertson is one of the most talented, smart, and kindest people they have ever worked with. Ms Robertson commitment to the children, passion to get it right for each child and their willingness to roll their sleeves up and help where needed has been great. Ms Robertson and her team moved a whole school over the Christmas holiday period to ensure the children had a place to settle when they returned to school. Councillor Scott wished Ms Robertson a very happy and prosperous retirement. Councillor Virgo expressed their gratitude to Fiona Robertson for being an inspirational leader, acting with integrity and unwavering dedication, and for truly making a difference. The experience Ms Robertson has brought to their role and the support given to Councillor Virgo, Councillor Smaill and Councillor Winchester has been invaluable. Ms Robertson’s leadership has guided them through many challenges and empowered the Conservative Group, and the community, to strive for excellence. Not just with words, but with actions, compassion, and courage. Ms Robertson has shown us what it means to stand tall even when the path is tricky. Councillor Virgo thanked Ms Robertson for being the kind of leader that lifts others up, who listens with empathy and who never loses sight of the bigger picture. Ms Robertson’s impact has been felt far beyond the walls of the Council Chamber and will live in the hearts and minds of everyone. Fiona Robertson thanked the Provost and the Councillors for their kind words and said that it had been a privilege to serve the children and their families in Midlothian. Ms Robertson thanked the staff across Education, Children’s Services, Communities, Lifelong Learning and Employability (CLLE) and the central teams for their commitment and dedication to our communities. Ms Robertson wished Midlothian Council well for the future and advised that it has been an honour to serve them. Ms Robertson expressed their particular thanks to the two Cabinet Members for Children and Education that they have served under for the past 5 years - firstly former Councillor Jim Muirhead who ensured all deliberations and discussions with political groups on how best to deliver our services and support our staff, children and families were conducted professionally and with respect. In more recent times, Ms Robertson added that they had been fortunate to work with the current Cabinet Member, Councillor Ellen Scott. Ms Robertson recognised Councillor Scott as an incredible ambassador for children and families and demonstrates this every day in their commitment to the communities they serve. Ms Robertson has enjoyed their honest and frank discussions and Councillor Scott’s determination to deliver to the best of our ability so that Midlothian truly does become the best place to live, grow and learn. Ms Robertson also thanked Councillor David Virgo and Councillor Kelly Drummond, as members for the Education and Children’s Services Cross Party Working Group, for their support, their challenge and the cross political party Page 19 of 216
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collaboration that ensures a focussed commitment towards our vision for children and families in Midlothian. On behalf of herself and the Directorate staff, Ms Robertson thanked everyone and hopes they continue to enjoy the positive and productive working relationships that have been formed with Chief Officers and colleagues in the coming years. 9. Private Reports Exclusion of Members of the Public (A) TO CONSIDER RESOLVING TO DEAL WITH THE UNDERNOTED BUSINESS IN PRIVATE IN TERMS OF PARAGRAPH 1, 8 and 9 OF PART 1 OF SCHEDULE 7A TO THE LOCAL GOVERNMENT (SCOTLAND) ACT 1973 - THE RELEVANT REPORTS ARE THEREFORE NOT FOR PUBLICATION; AND (B) TO NOTE THAT NOTWITHSTANDING ANY SUCH RESOLUTION, INFORMATION MAY STILL REQUIRE TO BE RELEASED UNDER THE FREEDOM OF INFORMATION (SCOTLAND) ACT 2002 OR THE ENVIRONMENTAL INFORMATION REGULATIONS 2004. 10. Date of next meeting The next Council meeting is scheduled for Tuesday 16 December 2025. The public section of the meeting concluded at 12:45pm Page 20 of 216
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Midlothian Council Minute Volume Presented to the Meeting of Midlothian Council on Tuesday, 16 December 2025 Midlothian Council Tuesday 16 December 2025 Item No 5.2 Page 21 of 216
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1 Minutes of Meetings submitted for Approval No items for discussion 2 Minutes of Meetings submitted for Consideration Minute of the Meeting of the Performance Review and Scrutiny Committee Meeting on 10 June 2025 Minute of the Meeting of the Licensing Board on 19 June 2025 Minute of the Meeting of Local Review Body on 23 June 2025 Minute of the Meeting of Cabinet on 26 August 2025 Private Addendum to the Minute of the Meeting of Cabinet on 26 August 2025 Minute of the Meeting of the Planning Committee on 26 August 2025 Minute of the Meeting of the General Purposes Committee on 23 September 2025 Private Addendum to the Minute of the Meeting of the General Purposes Committee on 23 September 2025 Minute of the Meeting of the Audit Committee on 30 September 2025 Minute of the Meeting of the Planning Committee on 6 October 2025 Minute of the Meeting of Cabinet on 7 October 2025 Minute of the Meeting of the Local Review Body on 27 October 2025 Minutes of Meetings submitted for Information Minute of the Meeting of the Midlothian Integration Joint Board on 21 August 2025 3 Page 22 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 5.3 Midlothian Council - Action Log No Date of meeting Item No and Title Action Action Owner Expected completion date Comments 1 25/06/2024 8.14 Whitecraig Traveller Site A full cost report to come back to Council for final approval to include early termination cost and reinstatement cost unless the cost for this is nil. Executive Director Place When termination costs are known Align any action jointly with ELC. Vacant site assessment taking place when termination costs are known. 2 27/08/2024 8.1 Financial Monitoring 2024/25 General Fund Revenue Report on the better utilisation of expensive machinery, such a used for potholes. Chief Officer Place ASAP Review report drafted with the additional MTFS road repairs allocation. 3 17/12/2024 8.13 Animal Boarding Establishment Licence Conditions Conduct a review on commercial dog walkers, including a review of any existing policy. Chief Officer Place November 2025 Policy paper drafted for DMT agenda and then progress onto next Cabinet or GP committee. 4 25/02/2025 Proposed Disposal of Property Asset The Chief Officer Place to provide the exact number of single units in a block of four. Chief Officer Place October 2025 Property disposal completed. Under occupation of properties analysis in progress. Page 23 of 216
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No Date of meeting Item No and Title Action Action Owner Expected completion date Comments 5 25/02/2025 Capital Plan Prioritisation The Executive Director, Place would provide the respective timescales for the extension and refurbishment of Mauricewood Primary School. Executive Director Place Design & costs option being finalised. Extension & Refurbishment assessment scoped into Capital Investment Strategy (Estate & Asset Management Plan) exercise. Learning Estates Team task. 6 13/05/2025 8.5 Borders Railway 10 Year Anniversary Working group to monitor the use of the service and consider whether service frequency and train capacity should be upgraded to improve service. Chief Officer Place Complete Recommended for closure. Information from Scotrail in relation to service frequency and the number of carriages in operation during standard and peak times circulated to Elected Members on 22nd October 2025. 7 24/06/2025 8.1 Financial Monitoring 2024/25 – General Fund Revenue Provide an update on Café Closures and whether this has been successful. Chief Financial Officer / Chief Officer Place September 2025 Recommended for closure. Report presented to BTSG on 29th September 2025. 8 24/06/2025 8.1 Financial Monitoring 2024/25 – General Fund Revenue Arrange a meeting with the Chair of Audit Committee, the Executive Director Place and the Chief Internal Auditor to have a closer look at all figures but in particular those for Pupil Transport. Chief Financial Officer & Section 95 Officer TBC Recommended for closure Subsequent discussion with Chair completed on Client Transport Audit report. Page 24 of 216
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No Date of meeting Item No and Title Action Action Owner Expected completion date Comments 9 09/09/2025 8.1 Financial Monitoring 2025/26 – General Fund Revenue Prepare a business case in relation to costs of external residential placements for young people Chief Officer Children’s Services, Partnerships and Communities. Deputy Chief Social Work Officer Complete Recommended for closure. Report presented and funding granted. 10 09/09/2025 8.11 Police Scotland- Midlothian Community Action Team (MCAT) and Midlothian Council Funding 2025-2026 Meet with Police Scotland representatives to consider alternatives to the MCAT and discuss ways of tackling antisocial behaviour in the community. Group Leaders Complete Recommended for closure Executive Director Place submitted meeting request for Group Leaders to meet with Police Scotland. Police Scotland briefing with Elected Members on 26 November. 11 21/10/2025 5.1 Minute of Midlothian Council meeting of 09 September 2025 Update the minute with the agreed commentary in relation to item 8.5 School Admission Policy Consultation. Democratic Services Complete Recommended for closure. Minute updated as agreed. 12 21/10/2025 8.2 Housing Revenue Account – Rent Setting Strategy 2026/27- 2028/29 Schedule an Elected Members Briefing in relation to the Rent Setting ahead of February 2026 meeting of Midlothian Council. Executive Director Place / Democratic Services TBC Rent Strategy consultation exercise in progress Page 25 of 216
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No Date of meeting Item No and Title Action Action Owner Expected completion date Comments 13 21/10/2025 8.2 Housing Revenue Account – Rent Setting Strategy 2026/27- 2028/29 Prepare a cross-party approach to lobby government to make life better for the people of Midlothian following the recent government funding where Midlothian Council did not benefit. Council Leader TBC 14 21/10/2025 8.2 Housing Revenue Account – Rent Setting Strategy 2026/27- 2028/29 Provide an update on the progress being made to reduce the number of Voids. Executive Director Place TBC Re-let times to permanent accommodation properties has reduced to 42 days to re-let in quarter 2 compared to 54 at the end of quarter 1. Relet figures have been higher over the last few quarters due to a change in policy with the Scottish Housing Regulator where flip tenancies are now excluded. In Q2 there were 113 void properties turned around as ready for let by our Building Maintenance Service. Our void turnaround times show that 44% (50) of properties required minor work and were turned around quickly, within 20 days, averaging 11.24 days to bring to a letting standard. 42% (47) of properties required major works involving house Page 26 of 216
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No Date of meeting Item No and Title Action Action Owner Expected completion date Comments clearances, full decoration and excessive repairs and therefore take longer to bring to standard, those properties averaged 64.51 days. 14% (16) of properties required moderate work including a moderate clearance and repairs and took an average of 23.5 days to bring to a letting standard, 15 21/10/2025 8.4 Midlothian Strategic Housing Investment Plan 2026/27 - 2030/31 Provide Elected Members with a list of housing developments and the percentage of affordable housing that can be expected in each. Head of Development TBC In progress. MLDP2 will have to address demands for affordable, specialist and wheelchair accessible housing through site allocations and policy in MLDP2. Midlothian Council may consider a number of approaches in MLDP2 to meet the affordable demand, including consideration of a higher affordable housing requirement (currently 25% in the MLDP), 16 21/10/2025 8.5 Rapid Rehousing Transition Plan 2025/26 Provide Elected Members with more detail on the increase in the homeless application statistics in relation to the termination of tenancies due to Executive Director Place Complete Tenancy Terminations due to rent or mortgage arrears in 2024/25 were 38. Further analysis indicates 15 owners. Page 27 of 216
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No Date of meeting Item No and Title Action Action Owner Expected completion date Comments mortgage arears and default on payment. Page 28 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 7.1 MOTION TO MIDLOTHIAN COUNCIL TUESDAY 16 DECEMBER 2025 World Cup 2026 Council Notes the historic and dramatic success of the Scotland Men’s National Football Team in qualifying for the 2026 FIFA World Cup, marking the first appearance in the tournament since 1998, and recognising the immense sense of national pride and unity this achievement generates across Midlothian and the entire country. Council also notes the inspiring role models presented by the team, management, and players, demonstrating the rewards of dedication, teamwork, and resilience to the young people of Midlothian. And further notes the significant potential this event presents to boost local participation in sport, enhance community cohesion, and generate economic activity within the Council area. Council Resolves to: Formally Congratulate the Scotland Men’s National Football Team, Head Coach Steve Clarke, and all support staff on this outstanding achievement, and extend best wishes for the tournament in Canada, Mexico, and the United States. Instruct the Chief Executive and relevant officers (including those in Communities and Lifelong Learning, Education, and Commercial Services) to take every practical opportunity to ensure residents across Midlothian can participate in the excitement of the tournament. Officers are instructed to prepare and implement a plan that includes: Educational Opportunities: Working with schools and Active Schools programmes to utilise the World Cup as a teaching resource, promoting geography, culture, fitness, and teamwork, and creating curricular links that highlight the physical and mental health benefits of sport. Sport and Leisure Facilities: Developing specific community events and accessible programmes at local sport and leisure facilities (including community halls and pitches) to encourage residents, particularly young people, to get involved in local football and other physical activities, inspired by the national team’s success. Page 29 of 216
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Income Generation: Exploring commercial opportunities, including securing necessary licenses and partnerships, to host large-scale, family-friendly live stream viewing events at suitable Council venues or public spaces, aimed at maximising income generation for reinvestment into local services and community projects. Establish a Lasting Legacy: Further instruct Officers to ensure the resulting activities and programmes are designed to create a lasting legacy of increased sports participation, improved community well-being, and sustained educational interest that extends far beyond the 2026 tournament, benefiting the people of Midlothian and contributing to a healthier, more active Scotland. Agree to receive a future report on the proposed programme of activity, expected costs, and potential income streams arising from this motion at a future meeting of an appropriate Committee. Moved: Seconded: Councillor Kelly Parry Councillor David Virgo Councillor Derek Milligan Page 30 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 7.2 MOTION TO MIDLOTHIAN COUNCIL TUESDAY 16 DECEMBER 2025 Congratulating Penicuik Community First Responders on their 20th Anniversary Council Congratulates Penicuik Community First Responders on reaching their 20- year milestone since formation in 2005; recognises their outstanding contribution to local emergency care, including: responding to over 3,000 life-threatening calls across the Penicuik area, covering cardiac arrests, heart attacks, seizures, strokes, breathing difficulties, and collapses; maintaining eight publicly accessible AED units throughout the area, boosting community defibrillator access; delivering life-support training to 1,128 residents, including CPR and AED use, empowering individuals since 2005; achieving average attendance times of around five minutes, significantly faster than ambulance arrival in rural areas; volunteering thousands of hours, building upon earlier figures of 2,643 call-outs and 65,000+ volunteer hours by their 10th anniversary in 2016; commends their all-volunteer, self-funded model—sustained without external grants—relying on local fundraising and community generosity; notes strong, ongoing collaboration with the Scottish Ambulance Service, and echoes SAS praise: "a vital role … every second counts."; expresses gratitude for their dedication, professionalism, and compassion —providing critical support and reassurance through high-stress emergencies and wishes them well for the future. Moved: Seconded: Councillor Debbi McCall Councillor Connor McManus Page 31 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.1 Treasury Management Mid-Year Review Report 2025/26 Report by David Gladwin, Chief Financial Officer & Section 95 Officer Report for Noting 1 Recommendations Council is recommended to:- a) Note the report and the treasury activity undertaken in the period to 20 November 2025, as outlined in Section 4 and Section 5.2; b) Note the current economic position and forecast for interest rates, and the actual and forecast Treasury Management activity during the second-half of the year as outlined in Section 5.2 and 5.3; and note the continuation of a Treasury Management strategy of minimising cash (fixed term deposit) balances to allow the Council to continue to defer costs associated with locking into longer-term borrowing at rates that remain elevated, noting that this strategy is similar to the majority of other Scottish Councils; c) Note the technical revisions to the Prudential Indicators in Section 6 of this report; d) Note the loans fund rate performance relative to other Scottish Local authorities, as outlined in Section 7, and the cash saving (compared to the Scottish Average) that the Treasury Management function brings to support the Council’s in-year revenue budget. 2 Purpose of Report/Executive Summary The purpose of this report is to inform Council of the Treasury Management activity undertaken during the first half of 2025/26 and the forecast activity for the second half of 2025/26 in accordance with the Treasury Management and Annual Investment Strategy approved in February 2025. It also provides an update to the Treasury and Prudential Indicators for 2025/26. Council should note that in accordance with the Prudential Code, a draft of the report was considered by Audit Committee on 2 December 2025, with the report approved by Audit Committee as presented. Date: 2 December 2025 Report Contact: Gary Thomson, Senior Finance Business Partner gary.thomson@midlothian.gov.uk Page 33 of 216
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3 Background Audit Committee Role The Prudential Code recommends that the main Treasury Management reports are presented for scrutiny by Audit Committee in advance of consideration by Council. This report was presented to Audit Committee on 2 December 2025, with the report approved as presented. Treasury management Treasury management is defined in the Prudential Code as: “The management of the local authority’s borrowing, investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.” The main function of the treasury management service is the funding of the Council’s capital investment plans. These capital plans provide a guide to the borrowing need of the Council, essentially the longer-term cash flow planning to ensure the Council can meet its capital spending operations. The management of this long-term borrowing requirement involves arranging long or short-term loans or using cash balances; and on occasion any debt previously drawn may be restructured to meet Council risk or cost objectives. As the Council operates a balanced budget, this broadly means cash raised during the year will meet its cash expenditure. As part of the treasury management operations, officers ensure this cash flow is adequately planned, with available cash balances being deposited in low-risk counterparties, providing adequate liquidity initially before considering optimising return on deposits. This mid-year report has been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covers the following: • An economic update for the first half of the 2025/26 financial year; • A review of the Treasury Management Strategy Statement and Annual Investment Strategy 2025/26 (TM&AIS 2025/26) approved by Council on 25 February 2025; • The Council’s capital expenditure, as set out in the General Services and HRA Capital Plan reports, and prudential indicators; • A review of the Council’s borrowing strategy for 2025/26; • A review of the Council’s deposit portfolio for 2025/26; • A review of debt rescheduling undertaken during 2025/26; • A review of compliance with Treasury and Prudential Limits for 2025/26. Page 34 of 216
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4 Treasury Activity during first half of 2025/26 The main points arising from treasury activity in the 6 months to 30 September 2025 were:- • Long term borrowing of £40.000 million was secured in April 2025, this being:- o Two £10 million PWLB Maturity loans with tenors of 3 and 4 years respectively and at interest rates of 4.16% and 4.18% respectively. o Two £10 million PWLB Equal Instalment of Principle (EIP) loans with tenors of 6 and 8 years respectively and at interest rates of 4.18% and 4.20% respectively. • Long term borrowing of £0.870 million matured, this being £0.500m of PWLB EIP loans, £0.340 million of Market Loans and £0.031 million PWLB Annuities; • A fixed term deposit of £10.000 million was placed with Lloyds Banking Group in April 2025, with a tenor of 1 year and earning an interest rate of 4.18%; • The average interest rate earned on external funds on deposit in the first half of the year was 4.24%. Loan Portfolio The Council’s loan portfolio as at 30 September 2025 is shown in table 1 below (position at 31 March 2025 also shown for comparison):- Table 1: Council’s Loan Portfolio at 31 March 2025 and 30 September 2025. Loan Type 31 March 2025 30 September 2025 Principal Outstanding £000’s Weighted Average Rate Principal Outstanding £000’s Weighted Average Rate % PWLB Annuity 395 8.92% 365 8.92% PWLB Maturity 333,502 3.11% 353,502 3.17% PWLB EIP 10,000 4.49% 29,500 4.29% LOBO 15,000 4.63% 15,000 4.63% Market Loans 20,548 3.04% 20,208 3.04% Total Loans 379,445 3.21% 418,575 3.30% Underlying Borrowing Requirement* 469,866 427,696 Over/(Under) Borrowing -90,421 -67,884 * The Underlying Borrowing Requirement is the Capital Financing Requirement excluding the “Public Private Finance” (PPP) Contract Liabilities Page 35 of 216
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The balance of external and internal borrowing is generally driven by market conditions. At 30 September 2025 the Council was under borrowed by £67.884 million – this is the extent to which the Council has yet to finance its current borrowing requirement from long term loans. This position reflects the Council’s use of working capital and balance sheet useable reserves to fund part of the prior year and current in-year borrowing requirement. This strategy of using internal borrowing (working capital) to fund the in- year CFR is prudent given the current plateau in medium to longer-term PWLB borrowing rates of c. 5.50%+ together with the expected gradual drop in these medium to longer-term PWLB borrowing rates over the remainder of the current and forthcoming financial years as outlined in Appendix 4. Debt Rescheduling No Debt Rescheduling took place in the first half of the financial year. Funds on Deposit The Council’s funds on deposit portfolio as at 30 September 2025 is shown in table 2 below (position at 31 March 2025 also shown for comparison):- Table 2: Council’s Funds on Deposit Portfolio at 31 March 2025 and 30 September 2025 Type 31 March 2025 30 September 2025 Principal Outstanding £000’s Weighted Average Rate Principal Outstanding £000’s Weighted Average Rate % Money Market Funds 25,946 4.54% 29,667 4.09% Bank Call Accounts 538 4.34% 243 3.77% Bank Fixed Term Deposits 0 n/a 10,000 4.18% Total Deposits 26,484 4.54% 39,910 4.11% The Chief Financial Officer & Section 95 Officer confirms that the approved limits within the Annual Investment Strategy were not breached during the first 6 months of 2025/26. Page 36 of 216
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5 Actual/Expected Treasury Activity during second half of 2025/26 5.1 Economic Update The Council has appointed MUFG Corporate Markets (formerly Link Treasury Solutions Limited) as its treasury advisors and part of their service is to assist the Council to formulate a view on interest rates. These are outlined in Table 3 below. Table 3: MUFG Corporate Markets Central Forecast for Interest Rates In summary, interest rates for borrowing across the entire Gilt Yield curve have shifted higher and are expected to remain elevated for longer, particularly at the medium-longer end of the curve. This reflects ongoing concerns around the stickiness of inflation, elevated wages and the difficult funding choices facing the Chancellor in the upcoming Budget on 26 November 2025; although international factors emanating from the Trump administration’s fiscal, tariff and geo-political policies continue to play a significant role in market expectations. The Bank of England announced in September that it would be favouring the short and medium part of the curve for the foreseeable future when issuing gilts, but market reaction to the November Budget is likely to be the decisive factor in future gilt market attractiveness to investors and their willingness to buy UK sovereign debt. The Bank of England Base Rate remains at 4.00%, with (a) inflation not anticipated to drop below 2% until early 2027 and (b) wages still rising by just below 5%, resulting in a 7-2 vote to keep rates at 4.00% at the September Monetary Policy Committee (MPC) meeting, which narrowed to 5-4 in favour of holding rates at 4.00% at the November MPC meeting. Markets are now factoring in a rate cut to 3.75% at the next MPC meeting (18 December 2025), although fiscal policy arising from the UK Budget on 26 November 2025 may well yet change this path. At this juncture, MUFG Corporate Markets still forecast longer term borrowing rates to gradually fall back over the next two to three years as inflation dampens, and for bank rate to gradually drop from 4.00% to 3.25% with one base rate cut per financial year; although there remains upside risk to all forecasts at present. More detail is provided in Appendices 1, 2 and 3. NOW Dec-25 Mar-26 Jun-26 Sep-26 Dec-26 Mar-27 Jun-27 Sep-27 Dec-27 Mar-28 Jun-28 Sep-28 BANK RATE 4.00% 4.00% 3.75% 3.75% 3.50% 3.50% 3.50% 3.50% 3.25% 3.25% 3.25% 3.25% 3.25% 3 month average earnings 4.06% 4.00% 3.80% 3.80% 3.50% 3.50% 3.50% 3.50% 3.30% 3.30% 3.30% 3.30% 3.30% 6 month average earnings 3.97% 3.90% 3.70% 3.70% 3.50% 3.50% 3.50% 3.50% 3.30% 3.30% 3.40% 3.40% 3.40% 12 month average earnings 3.84% 3.90% 3.70% 3.70% 3.50% 3.50% 3.50% 3.50% 3.30% 3.40% 3.50% 3.60% 3.60% 5 Year PWLB 4.77% 4.70% 4.50% 4.40% 4.30% 4.30% 4.30% 4.20% 4.20% 4.20% 4.20% 4.10% 4.10% 10 Year PWLB 5.36% 5.20% 5.00% 4.90% 4.80% 4.80% 4.80% 4.70% 4.70% 4.70% 4.70% 4.60% 4.60% 25 Year PWLB 6.04% 5.90% 5.70% 5.70% 5.50% 5.50% 5.50% 5.40% 5.40% 5.30% 5.30% 5.30% 5.20% 50 Year PWLB 5.84% 5.60% 5.40% 5.40% 5.30% 5.30% 5.30% 5.20% 5.20% 5.10% 5.10% 5.00% 5.00% MUFG Corporate Markets Interest Rate View November 2025 Page 37 of 216
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5.2 Actual & Expected Treasury Activity in Second Half of 2025/26 Actual Activity in Second Half of 2025/26 Borrowing New long-term borrowing of £40.000 million was secured in early November 2025, this being one £40.000 million PWLB EIP loan with a tenor of 8 years and at an interest rate of 4.21%, with borrowing secured in order to de-risk the Council’s in-year capital financing requirement in advance of the UK budget on 26 November, and taking advantage of a dip in Gilt Yields which returned yields at the shorter end of the Gilt Yield curve back to levels last seen in early 2025/26. Debt Rescheduling With the whole of the gilt yield curve shifting upwards and remaining higher, the Council has continued to review opportunities to reschedule part of its external debt portfolio. This involves the Council repaying loans prematurely (both market and PWLB) whilst high discount rates on premature repayment prevail (i.e. where the spread between the refinancing rate and the redemption rate is highest). In November 2025, the Council elected to reschedule (prematurely repay) PWLB debt as follows:- • £12.700 million PWLB Maturity loan, original drawn date of 2 August 2027 and existing maturity date of 15 May 2053, at a fixed interest rate of 4.55% The premature repayment of this PWLB loan to the UK Debt Management Office has generated a one-off discount (credit) of £1.079 million to the Council and is expected to generate further cash savings (in interest costs on external debt) to the Council of £1.064m, and so a total expected cash saving of £2.187 million, over the next 27 years. This equates to a positive NPV of £1.787 million (at the Treasury Green Book discount rate of 3.50%). This debt rescheduling has therefore allowed the Council to generate an initial cash saving whilst also ensuring that the expected refinancing of the debt remains prudent and affordable across both the short and medium/long term. Page 38 of 216
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Total External Debt Portfolio at 18 November 2025 The Council’s total external debt portfolio as at 18 November 2025 is therefore as follows:- Table 4: Council’s Loan Portfolio at 18 November 2025 Loan Type 18 November 2025 Principal Outstanding £000’s Weighted Average Rate % PWLB Annuity 332 8.92% PWLB Maturity 340,802 3.12% PWLB EIP 68,875 4.24% LOBO 15,000 4.63% Market Loans 20,208 3.04% Total Loans 445,217 3.34% Expected Activity in the remainder of the Second Half of 2025/26 The expected activity in the second half of 2025/26, as outlined below, updates the treasury management position in light of the economic position as outlined in Section 5.1 above, and the General Services and HRA Capital Plans as will be presented to Council at Quarter 2 Monitoring (16 December 2025). Borrowing Long term borrowing of £2.828 million matures in the second half of 2025/26, this being £0.519 million of PWLB Maturities, £1.933 million of PWLB EIPs, £0.344 million of Market Loans and £0.032 million PWLB Annuities. Proactive Treasury Management by the Council in the last decade has placed the Council in a strong refinancing position for its existing external debt portfolio; however the prevailing interest rate environment, with the continued plateau in long-term (PWLB) borrowing rates, has driven an approved Treasury Management strategy to go relatively short dated with new borrowing undertaken in the most recent financial years, with the expectation that this new borrowing will be refinanced at maturity with longer dated borrowing, given all interest rate forecasts show a gradual easing in medium to long term borrowing rates throughout the forecast period as outlined in Table 3. This relatively short-dated new borrowing that has been undertaken increases the short-medium term borrowing requirement for the Council, with a larger slice of the Council’s existing debt portfolio maturing in the remainder of the current and forthcoming 4 financial years (total of £111.599 million or 25.07% of the total existing debt portfolio). This is in Page 39 of 216
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addition to already approved borrowing per the Council’s approved General Services and HRA Capital Plans. Table 5: Maturity Profile of Existing External Loan Portfolio Financial Year 2025/26 Remaining £000’s 2026/27 £000’s 2027/28- 2029/30 £000’s 2030/31- 2034/35 £000’s 2035/36- 2044/45 £000’s 2045/46+ £000’s Debt Maturing 2,828 19,675 89,096 85,512 22,220 225,886 % of total portfolio 0.64% 4.42% 20.01% 19.21% 4.99% 50.74% The approved Treasury Management Strategy for borrowing is to continue to fund the in-year Capital Financing Requirements from PWLB for a relatively shorter-term duration (3-5 year debt tenors), to navigate past the current interest rate hump, with gilt yields expected to gradually ease throughout the course of the next 12-36 months. However, as part of this strategy, cognisance will continue to be taken of the overall level of financing required in the period out to 2029/30, to ensure that the Council can retain a relatively smooth debt maturity profile over this period and beyond. The Council continues to operate in a position whereby borrowing takes advantage of any dips in longer-term borrowing rates from PWLB and other sources, in order to maintain a low weighted average coupon rate on external debt. As noted in Section 5.1 (Table 3), the current PWLB yield curve remains elevated and is bell shaped with a peak in rates around the 20-30 year tenor (6.04%), with 5-10 year rates at c. 4.70-5.35% and 50 year rates are c. 5.84%. The yield curve is expected to remain bell shaped over the short-medium term forecast period, with:- • a gradual shift downwards of the entire curve by c. 30-40bps over the next 12 months and • a further 10-20bps drop over the subsequent 12 months. This is a shallower drop than previously expected, meaning long-term borrowing rates are likely to remain higher and stickier for longer. In addition, the differential between shorter dated gilts (5 year, currently at 4.70%) and longer dated gilts (25 year, currently at 5.60%) is particularly marked, with a spread of around 90bps remaining throughout the period of the forecast. To put this into context, for every £10 million borrowed, sourcing this from longer-dated borrowing would equate to an additional £90,000 per annum in external debt interest costs. To refinance the existing debt Page 40 of 216
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maturities of £111.599 million in the forthcoming 4 financial years solely from longer dated borrowing, this would equate to an additional £1.004 million per annum in external debt interest costs. Therefore, whilst the funding of the Council’s in-year and forward CFR is typically for infrastructure with long asset lives (50-60 years) – and the tenor of PWLB and market loans are typically drawn with this in mind – consideration for any new borrowing in the remainder of the 2025/26 financial year, to fund the Council’s in-year CFR, will seek to balance:- a) the security/certainty of current relatively high and expensive longer-term borrowing rates of upwards of 5.60% in the 30-50 year duration (which are forecast to drop by 30-40bps within one year and 50-60bps within 24 months) and the potential additional budgetary pressure that this brings in both the short/medium and longer term; with b) the option to borrow initially for a shorter-term duration from PWLB or other markets, for 2 to 5 years, to allow the Council to fund the immediate in-year borrowing requirement. Based on current interest rate forecasts (see Table 3), this would then allow the Council the option to either (i) refinance this borrowing at initial maturity with less expensive, longer term borrowing, e.g. a 45 to 48 year tenor in, say, 36 months, or (ii) refinance this borrowing at initial maturity with further shorter-dated borrowing; to allow the Council to navigate past the current elevated and sticky interest rate environment on longer-dated gilts. It is expected that any further long-term borrowing that is undertaken in 2025/26 to finance the current & future year capital plans will be sourced by drawing new PWLB loans at the Certainty Rate (which has been available to the Council since 2012 and is priced at Gilts+80bps), and/or the HRA rate. The HRA rate is available to all Councils (the availability of which was extended out in the UK Government Budget to the 31 March 2026) to fund HRA capital expenditure, at a rate that is 40bps lower than the current certainty rate available from the PWLB (so priced at Gilts + 40bps). Both the General Services and HRA capital programmes are being kept under regular review due to the effects of inflationary pressures, shortages of materials and labour, and the ratios of financing costs to the net revenue streams and impact on the Council’s Medium Term Financial Strategy. The Council’s borrowing strategy will, therefore, also be regularly reviewed and then revised, if necessary, to achieve optimum value and risk exposure in the long-term. The impact particularly of the finalisation of the General Services Capital Plan Prioritisation and full Asset Management Plans will have a significant bearing on this. Council officers, in conjunction with MUFG, will continue to monitor daily long-term borrowing rates in order to take advantage of any dips in the market or to de-risk any change in the medium-longer term forecast for gilt yields. Page 41 of 216
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Debt Rescheduling Council officers will continue to explore debt rescheduling opportunities with MUFG Corporate Markets; with only prudent and affordable debt rescheduling that considers both the short and medium-longer term impact being considered. Funds on Deposit In accordance with the Prudential and Treasury Management Codes, it is the Council’s priority for funds on deposit to ensure:- • security of capital first • liquidity second, and • finally to obtain an appropriate level of return which is consistent with the Council’s risk appetite. In the current economic climate, it is considered appropriate to keep any deposits short term to cover cash flow needs, but also to seek out value available in periods up to 12 months with high credit quality financial institutions, using the MUFG suggested creditworthiness approach, which includes a minimum sovereign credit rating and Credit Default Swap (CDS) overlay information. Based on the interest rate forecasts as outlined in Section 5.1 above, there continues to be a clear differential between any borrowing costs taken for new PWLB loans (whether 5 year, 25 year or 50 year), and interest earned on Fixed Term Deposits (FTD’s) of up to 12 months. Specifically:- • the cost of borrowing is now currently 4.70%-5.90% (PWLB certainty rates as per Table 3); whereas maximum interest earnable on FTD’s is 3.90% (so a differential of 0.80% to 2.00%). • The forecast position in 12 months is similar – borrowing rates of 4.30%-5.50% (certainty rates) compared to interest earnable on FTD’s of max 3.50% (so again a differential of 0.80% to 2.00%) • In 24 months, borrowing rates of 4.20%-5.30% (certainty rates) compared to interest earnable on FTD’s of 3.40% (so a differential of 0.80%-1.90%) This would suggest that the optimum Treasury strategy would be, as per the strategy approved by Council in February 2025, to continue to run down cash balances to allow borrowing to (continue to) be deferred for as long as possible i.e. minimise the cash backing of reserves. Clearly this position results in an elevated refinancing risk, as the internal-borrowing / under-borrowed position for the Council remains high (c. £84m at 31/03/2026, slightly down from an under borrowed Page 42 of 216
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position of £90m at 31/03/2025); however the flipside of this is that there is (a) an offsetting reduction in counterparty risk on deposits (less FTD’s placed) – thereby replacing one additional risk with an offsetting mitigation in risk elsewhere; and (b) furthermore that all the market led and economic forecast intelligence still points to the medium term forecast of a path of long-term borrowing rates gradually easing off over the next 24-36 months and beyond. Day to day liquidity to meet cashflow requirements is sourced from the Council’s three Money Market Funds, which all operate on an instant access basis. Interest rates receivable from these are currently between 4.03%-4.06%, reflective of the current Bank of England Base Rate, and will meander towards 4.00% in the coming month. The Council will keep enough liquidity in its MMF’s on a month-to-month basis to ensure we can manage our daily cashflow needs (£15m-£20m). An updated list of Countries for Deposits as at 18 November 2025 is included as Appendix 4. 5.3 Expected Loan & Fund on Deposit Portfolio at 31 March 2026 Taking all of the above into account, the expected loan and funds on deposit portfolios at 31 March 2026 is shown in Tables 6 and 7 below:- Table 6: Council’s forecast Loan Portfolio at 31 March 2026 Loan Type 31 March 2026 Principal Outstanding £000’s Weighted Average Rate PWLB Annuity 332 8.91% PWLB Maturity 367,983 3.23% PWLB EIP 67,542 4.24% LOBO 15,000 4.63% Market Loans 19,864 3.04% Total Loans 470,722 3.42% Underlying Borrowing Requirement 555,028 Over/(Under) Borrowing -84,306 Table 7: Council’s forecast Funds on Deposit Portfolio at 31 March 2026 Type 31 March 2026 Principal Outstanding £000’s Weighted Average Rate Money Market Funds 10,000 3.75% Bank Call Accounts 369 3.25% Bank Fixed Term Deposits 10,000 4.18% Total Deposits 20,369 3.95% Page 43 of 216
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The forecast Under-Borrowed position of £84.306 million at 31 March 2026 as outlined in Table 5 above equates to 15% of the Council’s projected Total Underlying Borrowing Requirement of £555.028 million. The equivalent position at 31 March 2025 was 19% (£90.421 million under-borrowed of a £469.866 million Total Underlying Borrowing Requirement). Graph 1 below outlines the Under-Borrowed position of Scottish Councils as at the most recent balance sheet date (31 March 2025). A negative borrowing % indicates that the Council is Internally Borrowed, with this ratio calculated as the % of Under-Borrowing against the Council’s total Underlying Borrowing Requirement. Graph 1: Under-borrowed (Internal Borrowing) % of Scottish Councils at 31 March 2025 * Midlothian As can be noted, the majority of Scottish Councils are under-borrowed, with an average around the 17.5% mark. The proposed Borrowing & Deposit strategy approach outlined above keeps the Council well within this Scotland-wide position. Page 44 of 216
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6 Prudential & Treasury Management Indicators 2025/26 It is a statutory duty for the Council to determine and keep under review the affordable capital expenditure and borrowing limits as outlined in the prudential and treasury management indicators reported as part of the Council’s suite of treasury management reports. The following prudential indicators have therefore been refreshed from those reported to Council on 25 February 2025 in the original Treasury Management and Annual Investment Strategy Statement 2025/26. These are technical revisions to the Prudential Indicators as a consequence of the revisions to the Council’s General Services and HRA Capital Plans and are based on the actual capital plan outturns for 2024/25, and revisions to the capital expenditure and income budgets for 2025/26. The Authorised Limit has been retained at the value set in the Treasury Management & Investment Strategy for 2025/26 as approved by Audit Committee and Council in February 2025. Table 8: Prudential Indicators 2025/26 – Mid Year Update Indicator 2025/26 Original Estimate £000’s 2025/26 Current Position £000’s 2025/26 Revised Estimate £000’s 2025/26 Capital Expenditure 171,922 38,670 128,987 2025/26 Required Borrowing 125,170 20,884 95,956 2025/26 Underlying Borrowing Requirement* 604,957 484,938 555,028 2025/26 Gross External Borrowing 528,600 418,575 470,722 2025/26 Over/(Under) Borrowing -76,357 -66,363 -84,306 Operational Boundary – Borrowing 604,957 555,028 555,028 2025/26 Capital Financing Requirement** 685,618 567,516 635,689 2025/26 Authorised Limit*** 604,957 604,957 604,957 Net Income from Service Investments as % of Net Revenue Stream 0.01% 0.01% Ratio of Financing Costs to Net Revenue Stream – General Services 2.85% 1.86% Ratio of Financing Costs to Net Revenue Stream – HRA 44.42% 44.22% Ratio of HRA Debt to Net Revenue Stream 836% 842% Ratio of HRA Debt per Dwelling 44 43 * Excludes “On balance sheet” PPP schemes. ** Includes “On balance sheet” PPP schemes. *** Equates to the original estimate of the 2025/26 Underlying Borrowing Requirement Page 45 of 216
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The Capital Financing Requirement (CFR) denotes the Council’s underlying need to borrow for capital purposes. The CFR includes borrowing arising as a result of the Council’s Capital Plans, plus the long-term liability arising from the Council’s PPP and DBFM contracts. The Underlying Borrowing Requirement strips out the latter of these (long-term liability arising from the two PPP contracts) from the CFR. The Authorised Limit represents the statutory limit determined under section 3 (1) of the Local Government Act 2003, and is the limit beyond which borrowing is prohibited. This limit needs to be set and revised by Members. For 2025/26 this was calculated to equate to the forecast value of the 2025/26 Underlying Borrowing Requirement. During the year to date, the Council has operated within the treasury and prudential indicators set out in the Council’s Treasury Management Strategy Statement for 2025/26. All treasury management operations have also been conducted in full compliance with the Council's Treasury Management Practices. 7 Performance Indicators 2024/25 – Comparison with Other Scottish Local Authorities The CIPFA Scottish Treasury Management Forum collates performance indicators for all Scottish Local Authorities. The indicators relating to financial year 2024/25 have been published and once again demonstrate the continuing effectiveness of the Council’s Treasury function in maximising efficiency in Treasury Management activity, with the Council having the lowest weighted average borrowing & investment (loans fund) rate across all Scottish mainland authorities in 2024/25 (2.73%). The Council has consistently maintained its loans fund rate as either the lowest, one of the lowest, across all Scottish mainland authorities for the last decade and more. Appendix 5 outlines the loans fund rate for each Scottish Local Authority in 2024/25. Were the internal loans fund rate for 2024/25 to have equated to the Scottish weighted average for 2024/25 of 4.12%, this would have generated loan charges for Midlothian Council in 2024/25 of £28.4 million. The Council’s actual 2024/25 loan charges for General Services and HRA were £22.3 million, representing a cash saving (compared to the Scottish average) of £6.1 million in 2024/25. The forecast loans fund rate of 2.64% for 2025/26 is expected to once again be one of the lowest for all Scottish Local Authorities. Page 46 of 216
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8 Summary Treasury Management activity during the year to 18 November 2025 has been effective within the parameters set by the strategy for the year. Any further long-term borrowing for the remainder of 2025/26 will be in line with the approved strategy, and reflective of the borrowing requirement arising from the General Services and HRA capital plans that will be reported to Council on 16 December 2025, and existing debt maturity profile. Debt rescheduling opportunities will continue to be assessed. Officers will continue to review the opportunities available to the Council for deposit of funds as governed by the approved strategy. The Prudential and Treasury Management Indicators have been updated to reflect current capital expenditure and income projections. 9 Report Implications 9.1 Resource Expenditure from Treasury Management activity i.e. loan charges, is reported in the quarterly financial positions to Council, with Quarter 2 monitoring reflected in the Financial Monitoring 2025/26 – General Fund Revenue report that will be presented to Council on 16 December 2025. 9.2 Digital None. 9.3 Risk As the Council follows the requirements of the CIPFA Code of Practice for Treasury Management, and the Prudential Code, there is a reduced level of risks involved in Treasury Management activities. Those risks that do exist are further controlled through written Treasury Management Practices which define the responsibilities of all staff involved, which were reviewed and approved by Audit Committee as part of the presentation of the 2023/24 Mid-Year Review Report on 6 December 2022. 9.4 Ensuring Equalities There are no equalities issues arising directly from this report. 9.5 Additional Report Implications See Appendix A. Page 47 of 216
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Appendix A: Report Implications A.1 Key Priorities within the Single Midlothian Plan Not applicable. A.2 Key Drivers for Change A.3 Key Delivery Streams Themes addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on Delivering Best Value. A.5 Involving Communities and Other Stakeholders Although no external consultation has taken place, cognisance has been taken of professional advice obtained from Link Treasury Solutions Limited, the Council’s appointed Treasury Consultants. A.6 Impact on Performance and Outcome The strategies adopted are an integral part of the corporate aim to achieve Best Value as they seek to minimise the cost of borrowing by exercising prudent debt management and investment. This in turn helps to ensure that the Council’s capital expenditure is sustainable in revenue terms. A.7 Adopting a Preventative Approach Not applicable. A.8 Supporting Sustainable Development Not applicable. Page 48 of 216
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Background Papers: Appendix 1: Economic Update for first part of 2025/26 financial year Appendix 2: PWLB Borrowing Rates 1 April 2025 to 30 September 2025 Appendix 3: Bank Rate and SONIA Rates 1 April 2025 to 30 September 2025 Appendix 4: Approved Countries for Deposits as at 18 November 2025 Appendix 5: Loans Fund Rate Comparison Scottish Local Authorities 2024/25 Page 49 of 216
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Appendix 1: Economic Update for first part of 2025/26 financial year The first half of 2025/26 saw: • A 0.3% pick up in Gross Domestic Product (GDP) for the period April to June 2025. More recently, the economy flatlined in July, with higher taxes for businesses restraining growth. • The rate of average earnings growth excluding bonuses has fallen from 5.5% to 4.8% in July. • Consumer Price Inflation (CPI) has ebbed and flowed but finished September at 3.8%, whilst core inflation eased to 3.6%. • The Bank of England cut interest rates from 4.50% to 4.25% in May, and then to 4% in August. • The 10-year gilt yield fluctuated between 4.4% and 4.8%, ending the half year at 4.70%. From a GDP perspective, the financial year got off to a bumpy start with the 0.3% m/m fall in real GDP in April as front-running of US tariffs in Quarter 1 (when GDP grew 0.7% on the quarter) weighed on activity. Despite the underlying reasons for the drop, it was still the first fall since October 2024 and the largest fall since October 2023. However, the economy surprised to the upside in May and June so that quarterly growth ended up 0.3% quarter on quarter (q/q). Nonetheless, the 0.0% month on month (m/m) change in real GDP in July will have caused some concern, with the hikes in taxes for businesses that took place in April this year undoubtedly playing a part in restraining growth. The weak overseas environment is also likely to have contributed to the 1.3% m/m fall in manufacturing output in July. That was the second large fall in three months and left the 3 months to 3 months rate at a 20- month low of -1.1%. The 0.1% m/m rise in services output kept its 3 months to 3 months rate at 0.4%, supported by stronger output in the health and arts/entertainment sectors. Looking ahead, ongoing speculation about further tax rises in the Autumn Budget on 26 November will remain a drag on GDP growth for a while yet. GDP growth for 2025 is forecast by Capital Economics to be 1.3%. Sticking with future economic sentiment, the composite Purchasing Manager Index (PMI) for the UK fell from 53.5 in August to 51.0 in September. The decline was mostly driven by a fall in the services PMI, which declined from 54.2 to 51.9. The manufacturing PMI output balance also fell, from 49.3 to 45.4. That was due to both weak overseas demand (the new exports orders balance fell for the fourth month in a row) and the cyber-attack-induced shutdown at Jaguar Land Rover since 1 September reducing car production across the automotive supply chain. The PMIs suggest tepid growth is the best that can be expected when the Quarter 3 GDP numbers are released. Turning to retail sales, and the 0.5% m/m rise in volumes in August was the third such rise in a row and was driven by gains in all the major categories except fuel sales, which fell by 2.0% m/m. Sales may have been supported by the warmer-than- usual weather. If sales were just flat in September, then in Quarter 3 sales volumes would be up 0.7% q/q compared to the 0.2% q/q gain in Quarter 2. With the November Budget edging nearer, the public finances position looks weak. Public net sector borrowing of £18.0bn in August means that after five months of the financial year, borrowing is already £11.4bn higher than the Office for Budget Responsibility (OBR) forecast at the Spring Statement in March. The overshoot in the Chancellor’s chosen fiscal mandate of the current budget is even greater with a cumulative deficit of £15.3bn. All this was due to both current receipts in August Page 50 of 216
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being lower than the OBR forecast (by £1.8bn) and current expenditure being higher (by £1.0bn). Over the first five months of the financial year, current receipts have fallen short by a total of £6.1bn (partly due to lower-than-expected self-assessment income tax) and current expenditure has overshot by a total of £3.7bn (partly due to social benefits and departmental spending). Furthermore, what very much matters now is the OBR forecasts and their impact on the current budget in 2029/30, which is when the Chancellor’s fiscal mandate bites. As a general guide, Capital Economics forecasts a deficit of about £18bn, meaning the Chancellor will have to raise £28bn, mostly through higher taxes, if she wants to keep her buffer against her rule of £10bn. The weakening in the jobs market looked clear in the spring. May’s 109,000 m/m fall in the Pay-As-You-Earn (PAYE) measure of employment was the largest decline (barring the pandemic) since the data began and the seventh in as many months. The monthly change was revised lower in five of the previous seven months too, with April’s 33,000 fall revised down to a 55,000 drop. More recently, however, the monthly change was revised higher in seven of the previous nine months by a total of 22,000. So instead of falling by 165,000 in total since October, payroll employment is now thought to have declined by a smaller 153,000. Even so, payroll employment has still fallen in nine of the ten months since the Chancellor announced the rises in National Insurance Contributions (NICs) for employers and the minimum wage in the October Budget. The number of job vacancies in the three months to August stood at 728,000. Vacancies have now fallen by approximately 47% since its peak in April 2022. All this suggests the labour market continues to loosen, albeit at a declining pace. A looser labour market is driving softer wage pressures. The rate of average earnings growth excluding bonuses has fallen from 5.5% in April to 4.8% in July. The rate for the private sector slipped from 5.5% to 4.7%, putting it on track to be in line with the Bank of England’s Quarter 3 forecast (4.6% for September). CPI inflation fell slightly from 3.5% in April to 3.4% in May, and services inflation dropped from 5.4% to 4.7%, whilst core inflation also softened from 3.8% to 3.5%. More recently, though, inflation pressures have resurfaced, although the recent upward march in CPI inflation did pause for breath in August, with CPI inflation staying at 3.8%. Core inflation eased once more too, from 3.8% to 3.6%, and services inflation dipped from 5.0% to 4.7%. So, we finish the half year in a similar position to where we started, although with food inflation rising to an 18-month high of 5.1% and households’ expectations for inflation standing at a six year high, a further loosening in the labour market and weaker wage growth may be a requisite to UK inflation coming in below 2.0% by 2027. An ever-present issue throughout the past six months has been the pressure being exerted on medium and longer dated gilt yields. The yield on the 10-year gilt moved sideways in the second quarter of 2025, rising from 4.4% in early April to 4.8% in mid-April following wider global bond market volatility stemming from the “Liberation Day” tariff announcement, and then easing back as trade tensions began to de- escalate. By the end of April, the 10-year gilt yield had returned to 4.4%. In May, concerns about stickier inflation and shifting expectations about the path for interest rates led to another rise, with the 10-year gilt yield fluctuating between 4.6% and 4.75% for most of May. Thereafter, as trade tensions continued to ease and markets increasingly began to price in looser monetary policy, the 10-year yield edged lower, and ended Quarter 2 at 4.50%. Page 51 of 216
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More recently, the yield on the 10-year gilts (which drives PWLB borrowing rates) rose from 4.46% to 4.60% in early July as rolled-back spending cuts and uncertainty over Chancellor Reeves’ future raised fiscal concerns. Although the spike proved short lived, it highlighted the UK’s fragile fiscal position. In an era of high debt, high interest rates and low GDP growth, the markets are now more sensitive to fiscal risks than before the pandemic. During August, long-dated gilts underwent a particularly pronounced sell-off, climbing 22 basis points and reaching a 27-year high of 5.6% by the end of the month, pushing PWLB borrowing rates in the same direction. While yields (and PWLB borrowing rates) have since eased back, the market sell-off was driven by investor concerns over growing supply-demand imbalances, stemming from unease over the lack of fiscal consolidation and reduced demand from traditional long-dated bond purchasers like pension funds. For 10-year gilts, by late September, sticky inflation, resilient activity data and a hawkish Bank of England have kept yields elevated over 4.70% (with a corresponding elevation in PWLB borrowing rates). The Financial Times Stock Exchange (FTSE) 100 fell sharply following the “Liberation Day” tariff announcement, dropping by more than 10% in the first week of April - from 8,634 on 1 April to 7,702 on 7 April. However, the de-escalation of the trade war coupled with strong corporate earnings led to a rapid rebound starting in late April. As a result, the FTSE 100 closed Quarter 2 at 8,761, around 2% higher than its value at the end of Quarter 1 and more than 7% above its level at the start of 2025. Since then, the FTSE 100 has enjoyed a further 4% rise in July, its strongest monthly gain since January and outperforming the S&P 500. Strong corporate earnings and progress in trade talks (US-EU, UK-India) lifted share prices and the index hit a record 9,321 in mid-August, driven by hopes of peace in Ukraine and dovish signals from Fed Chair Powell. September proved more volatile and the FTSE 100 closed Quarter 3 at 9,350, 7% higher than at the end of Quarter 1 and 14% higher since the start of 2025. Future performance will likely be impacted by the extent to which investors’ global risk appetite remains intact, Fed rate cuts, resilience in the US economy, and Artificial Intelligence optimism. A weaker pound will also boost the index as it inflates overseas earnings. MPC meetings: 8 May, 19 June, 7 August, 18 September, 6 November 2025 There were five Monetary Policy Committee (MPC) meetings in the year to 18 November. In May, the Committee cut Bank Rate from 4.50% to 4.25%, while in June policy was left unchanged. In June’s vote, three MPC members (Dhingra, Ramsden and Taylor) voted for an immediate cut to 4.00%, citing loosening labour market conditions. The other six members were more cautious, as they highlighted the need to monitor for “signs of weak demand”, “supply-side constraints” and higher “inflation expectations”, mainly from rising food prices. By repeating the well-used phrase “gradual and careful”, the MPC continued to suggest that rates would be reduced further. In August, a further rate cut was implemented. However, a 5-4 split vote for a rate cut to 4.00% laid bare the different views within the Monetary Policy Committee, with the accompanying commentary noting the decision was “finely balanced” and reiterating that future rate cuts would be undertaken “gradually and carefully”. Ultimately, Governor Bailey was the casting vote for a rate cut but with the CPI measure of inflation expected to reach at least 4.00% later this year, the MPC will be wary of making any further rate cuts until inflation begins its slow downwards trajectory back towards 2.00%. Page 52 of 216
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The Bank of England does not anticipate CPI getting to 2.00% until early 2027, and with wages still rising by just below 5.00%, it was no surprise that the September meeting saw the MPC vote 7-2 for keeping rates at 4.00% (Dhingra and Taylor voted for a further 25bps reduction). This positioned narrowed at the November meeting to 5-4 in favour of holding rates at 4.00%, with markets now factoring in a rate cut to 3.75% at the next MPC meeting on 18 December, although fiscal policy arising from the UK Budget on 26 November 2025 may well yet change this path. The Bank also took the opportunity to announce that they would only shrink its balance sheet by £70bn over the next 12 months, rather than £100bn. The repetition of the phrase that “a gradual and careful” approach to rate cuts is appropriate suggests the Bank still thinks interest rates will fall further but possibly not until February, which aligns with both our own view and that of the prevailing market sentiment. Page 53 of 216
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Appendix 2: PWLB Borrowing Rates 1 April 2025 to 30 September 2025 The graphs and table below show the movement in PWLB certainty rates for the first six months of the year to date: PWLB certainty rates 1 April 2025 to 30 September 2025 1 Year 5 Year 10 Year 25 Year 50 Year 01/04/2025 4.82% 4.94% 5.38% 5.95% 5.63% 30/09/2025 4.58% 4.95% 5.53% 6.23% 5.98% Low 4.36% 4.62% 5.17% 5.78% 5.46% Low date 04/08/2025 02/05/2025 02/05/2025 04/04/2025 04/04/2025 High 4.84% 4.99% 5.62% 6.41% 6.14% High date 02/04/2025 21/05/2025 03/09/2025 03/09/2025 03/09/2025 Average 4.55% 4.82% 5.40% 6.11% 5.83% Spread 0.48% 0.37% 0.45% 0.63% 0.68% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% PWLB Rates 01.04.25 - 30.09.25 1 Year 5 Year 10 Year 25 Year 50 Year 50 year target % Page 54 of 216
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The current PWLB rates are set as margins over gilt yields as follows:- • PWLB Standard Rate is gilt plus 100 basis points (G+100bps) • PWLB Certainty Rate (GF) is gilt plus 80 basis points (G+80bps) • PWLB Local Infrastructure Rate is gilt plus 60 basis points (G+60bps) • PWLB Certainty Rate (HRA) is gilt plus 40bps (G+40bps) PWLB maturity certainty rates (gilts plus 80bps) year to date to 30 September 2025 Gilt yields and PWLB certainty rates have remained relatively volatile throughout the six months under review, but the general trend has been for medium and longer dated parts of the curve to shift higher whilst the 5-year part of the curve finished September close to where it begun in April. Concerns around the stickiness of inflation, elevated wages, households’ inflation expectations reaching a six-year high, and the difficult funding choices facing the Chancellor in the upcoming Budget on 26 November dominated market thinking, although international factors emanating from the Trump administration’s fiscal, tariff and geo-political policies also played a role. At the beginning of April, the 1-year certainty rate was the cheapest part of the curve at 4.82% whilst the 25-year rate was relatively expensive at 5.92%. Early September saw the high point for medium and longer-dated rates, although there was a small reduction in rates, comparatively speaking, by the end of the month. The spread in the 5-year part of the curve (the difference between the lowest and highest rates for the duration) was the smallest at 37 basis points whilst, conversely, the 50-years’ part of the curve saw a spread of 68 basis points. At this juncture, MUFG Corporate Markets still forecast rates to fall back over the next two to three years as inflation dampens, although there is upside risk to all 3.00 3.40 3.80 4.20 4.60 5.00 5.40 5.80 6.20 6.60 7.00 PWLB Certainty Rate Variations 01.04.25 to 30.09.25 1-Apr-25 30-Sep-25 Average Page 55 of 216
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forecasts at present. The CPI measure of inflation is expected to fall below 2% in early 2027 but hit a peak of 4% or higher later in 2025. The Bank of England announced in September that it would be favouring the short and medium part of the curve for the foreseeable future when issuing gilts, but market reaction to the November Budget is likely to be the decisive factor in future gilt market attractiveness to investors and their willingness to buy UK sovereign debt. Page 56 of 216
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Appendix 3: Bank Rate and Sterling Overnight Index Average (SONIA) Rates 1 April 2025 to 30 September 2025 The graphs and table below show the movement in Bank and SONIA rates for the first six months of the year to date: Creditworthiness: The UK’s sovereign rating has proven robust through the first half of 2025/26. The Government is expected to outline in detail its future fiscal proposals in the Budget scheduled for 26 November 2025. Deposit Counterparty criteria: The current deposit counterparty criteria selection approved in the TMSS is meeting the requirement of the treasury management function. CDS prices: It is noted that sentiment in the current economic climate can easily shift, so it remains important to undertake continual monitoring of all aspects of risk and return in the current circumstances. 3.50 3.75 4.00 4.25 4.50 4.75 5.00 Bank Rate vs term SONIA rates % 01.04.25 - 30.09.25 Bank Rate SONIA 1 mth 3 mth 6 mth 12 mth Bank Rate SONIA 1 mth 3 mth 6 mth 12 mth High 4.50 4.46 4.47 4.36 4.28 4.17 High Date 01/04/2025 07/05/2025 03/04/2025 01/04/2025 02/04/2025 02/04/2025 Low 4.00 3.97 3.97 3.96 3.89 3.75 Low Date 07/08/2025 29/08/2025 16/09/2025 08/09/2025 07/08/2025 04/08/2025 Average 4.23 4.19 4.16 4.10 4.01 3.88 Spread 0.50 0.49 0.50 0.39 0.39 0.42 Page 57 of 216
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Appendix 4: Approved Countries for Deposit as at 18 November 2025 AAA • Australia • Denmark • Germany • Netherlands • Norway • Singapore • Sweden • Switzerland AA+ • Canada • U.S.A. AA • Abu Dhabi (UAE) • Finland • Qatar AA- • Belgium • France • U.K. A+ • Belgium • France Page 58 of 216
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Appendix 5: Loans Fund Rate Comparison Scottish Local Authorities 2024/25 Council Loans Fund Rate 2024/25 Midlothian 2.73% East Lothian 2.83% Renfrewshire 2.88% Perth & Kinross 3.28% Aberdeenshire 3.29% North Ayrshire 3.36% Angus 3.37% Shetland 3.45% East Ayrshire 3.46% Fife 3.68% Dumfries & Galloway 3.80% East Renfrewshire 3.87% Edinburgh City 4.14% West Lothian 4.17% Aberdeen City 4.20% South Ayrshire 4.23% Scottish Borders 4.25% Highland 4.32% East Dunbartonshire 4.41% Dundee City 4.50% Inverclyde 4.61% West Dunbartonshire 4.64% Argyll & Bute 4.71% Glasgow City 4.77% Falkirk 4.78% North Lanarkshire 4.87% Stirling 5.35% Orkney 5.72% Moray 6.21% Comhairle Nan Eilean Siar 6.40% Page 59 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.2 Financial Monitoring 2025/26 – General Fund Revenue Report by David Gladwin, Chief Financial Officer and Section 95 Officer Report for Information 1 Recommendations Council is recommended to: a) Note specifically the recommendation in the General Services Capital Plan report on today’s agenda to capitalise £0.737 million of costs relating to Gym Refurbishment previously funded from earmarked revenue budgets for Public Realm repairs and the impact of this on the General Fund Balance (Section 5.3); and otherwise b) Note the remaining contents of this report. 2 Purpose of Report / Executive Summary 2.1 The purpose of this report is to provide Council with information on projections of performance against service revenue budgets in 2025/26 and to provide commentary on areas of material variance against budget. The budget performance figures as shown in appendix 1 result in a projected net overspend of £2.616 million which represents 0.8% of the revised budget. 2.2 Some areas of projected overspend relate to recurring areas of financial pressure or slower than planned delivery of savings measures. The Corporate Management Team have discussed these in depth and, where possible, put in place recovery actions. 2.3 The projection of the General Fund balance at 31st March 2026 is £12.884 million, of which £9.124 million is earmarked for specific use leaving a non-earmarked General Fund balance of £3.760 million in advance of incorporating outcomes from the review of earmarked reserves. 2.4 Council approval to capitalise costs of £0.737 million relating to gym refurbishment increases the non-earmarked element of the General Fund to £4.497 million. The review of earmarked reserves carried out during quarter 2 (section 5.3) identified a further £0.770 million of earmarked reserves that can now be reclassified as non-earmarked thus increasing the non-earmarked element of the General Fund to £5.267 million and making it compliant with Reserves Strategy. As a consequence the total projected General Fund Balance increases to £14.391 million. Date: 25 November 2025 Report Contact: David Gladwin, Chief Financial Officer and Section 95 Officer David.Gladwin@midlothian.gov.uk 0131 271 3113 Page 61 of 216
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3 Background 3.1 This report encompasses all performance against revenue budget for General Fund services. 3.2 During 2024/25, in response to fiscal pressures, the Chief Executive instructed a moratorium on any spend that was not business critical and in addition, the Chief Executive has extended this directive into 2025/26 including robust and formal scrutiny arrangements to oversee Directors progress in monitoring the urgent recovery actions required. Performance against budget 3.3 The material areas of projected adverse variance against budget at quarter 2 are outlined in table 1 below which also describes mitigating measures and next steps. Projections part-way through a financial year are difficult in some areas and come with a degree of uncertainty. Narrative relating to Midlothian Integration Joint Board (MIJB) is provided in section 4 below. Table 1: Material cost variances against budget Budget Overspend Reason Action Plan / Mitigating Measures Next Steps External Residential Placements for Children £1,442,000 A significant increase in placements during recent months. All placements are continually reviewed to ensure the most appropriate arrangements are in place and where possible within Midlothian. Consideration of options to build capacity in Midlothian. Pupil Transport £937,000 Volume and value of school pupil transport invoices higher than budgeted. Council approval to proceed with the client transport review was granted on 25th June 2024. This includes a root and branch review of practices, processes, policies and costs. A procurement exercise for contracts is now complete and these are now in operation. Basline costs have been identified and financial projections in 2025/26 are based on these. Where possible, early implementation of identified efficiencies. Work to finalise a baseline cost of service provision is complete and this will form the basis of more rigorous financial management. The newly established Member / Officer Working Group on passenger transport will be briefed on progress. Page 62 of 216
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Staff Costs £617,000 Maternity cover in schools (£381,000) and higher costs from temporary resources to cover service areas with permanent recruitment challenges (£624,000). Partially offset by vacancies across the Council. Strategic Workforce Plan is in place Continuation of enhanced level of vacancy control. Continual review of service costs. Consideration of any changes that may be required in setting future year budgets. Insurance £491,000 Several new claims with potential for higher value settlements have been received in 2025/26. The volume of insurance claims settled remains higher than budgeted. Insurance Premiums have increased by £106,000 based on the insurance market, the Council’s claims experience and implementation of advised risk control measures. Internal processes to consider each claim are being reviewed with potential to increase repudiation rates and consequently reduce projected costs in 2025/26. Officer review meeting linking in with professional insurer advice. Waste Disposal £580,000 Continuing trend of reduced third party income from Millerhill Residual Waste Plant from sale of energy. Mitigated partly by reduced bulky waste tonnage and lower expected costs later in 2025/26 with the introduction of twin streaming. Engagement with the waste plant operator and the contract monitoring team to explore options to generate additional income and to also reduce disposal costs. Sport and Leisure £83,000 Staffing overspend of £532,000 due to use of casual and specialist instructors to cover vacant posts. Membership income continues to exceed budget and is now £405,000 in excess. Efficiencies in running costs to partly mitigate service overspends (£72,000). Review of implementation of staffing review. Next phase of Sport and Leisure staffing review. Commercial Properties £163,000 Shortfall in rental income at Hardengreen Business Park and for Buccleuch Street. Reduce void properties and strive to ensure all available properties are let. Fleet £265,000 Ageing vehicles and higher volumes of external contracting than planned. Areas of service have been re- provisioned. Fleet replacement for ageing and costly maintenance has Page 63 of 216
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External vehicle hire to support service continuity. Cost containment measures in place. Fleet Maintenance Review underway. Multi-year Fleet Asset Management Plan being developed. been accelerated as approved by Council on Tuesday 21st November 2024. As new items of fleet become operational repairs costs should reduce. Midlothian House Scaffolding £96,000 Scaffolding in place at Midlothian House in advance of commencement of the project to refurbish Midlothian House. There also remains £1.984 million of Medium Term Financial Strategy (MTFS) cost reductions either to be finalised or to be fully implemented. A number of these are taking longer than planned to implement with an adverse impact on the 25/26 financial position. These are detailed at appendix 2 and reported to the Business Transformation Steering Group (BTSG) on a half-yearly basis. Work continues to implement these as quickly as possible. Underspends • Loan Charges are projected to underspend by £2.944 million in 2025/26. There are three main factors: o Deferral of borrowing to later in 2025/26 than budgeted for and also to later years to match timing of capital expenditure; o A reduction of £31.5 million in the borrowing requirement for 2025/26; o Higher than forecast surplus cash related directly to timing of capital expenditure thus providing opportunity to generate some deposit income. • Costs across the spectrum of learning settings for children and young people are lower than provided for in the budget mainly due to lower than budgeted pupil numbers thus giving rise to a positive variance of £1.494 million. • In recognition of potential inflationary pressures across the Council Budget due to fluctuating prices a provision of £1m was set aside. At this stage it is anticipated that £0.315 million of this provision will be utilised. • Income projections from the Alpine Coaster exceed those budgeted which were based on the approved business case. These are partly offset by additional staffing and security costs. Overall there is a positive variance of £0.717 million. • Electricity prices are lower than budgeted slightly offset by higher gas prices thus giving rise to a combined positive variance of £0.236 million. Consumption appears in line with budget. Page 64 of 216
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• Income from Burials exceeds budget by £0.091 million mainly attributable to an increased level of income from lairs. 3.4 The Corporate Management Team met on Wednesday 19th November and considered the financial position reiterating, alongside the continued financial discipline measures referenced in section 3.2, the requirement for services to live within available budget and the continuations of some areas of enhanced monitoring. Pay and funding 3.5 Employees whose pay negotiations are covered by the Scottish Joint Council (SJC) trade unions have accepted a pay offer for 2025/26 at 4% and for 2026/27 at 3.5%. Staff covered by the Scottish Negotiation Committee for Teachers (SNCT), whose current agreement ended on 31st July 2025, have accepted an increase of 4% from 1st August 2025, a further 0.25% on 1st April 2026 and 3.25% on 1st August 2026. 3.6 The 2025/26 budget and the MTFS assumptions contain a pay uplift of 3%. Funding for the 2025/26 and 2026/27 offer involves an assumption of 3% in council budgets with the remainder funded by the Scottish Government through a mix of re-directed revenue funding and additional capital funding flexibilities. At this stage there remains a risk that unbudgeted costs exceed funding in 2025/26 and that Scottish Government funding does not fully materialise in 2026/27. Details will become available during quarter 3 and will be reported to Council in February. 4 Delegation of resources to Midlothian Integration Joint Board 4.1 The approved budget provided for the allocation of £71.087 million to the MIJB for the provision of delegated services. 4.2 In accordance with the Integration Scheme the MIJB is required to deliver delegated services within budget allocations from the Council and NHS Lothian and, where any overspend is projected, to put in place a recovery plan to address that. As a last resort the integration scheme allows for the MIJB to seek additional financial support from its partners, either by way of an additional budget allocation or by “brokerage” (provision of additional resources in a year which are repaid in the following year). 4.3 Financial Monitoring reports covering all of the MIJB activities are formally presented to the Integration Joint Board and are available on the committee management section of the Council website:- Midlothian Integration Joint Board (cmis.uk.com) 4.4 MIJB meet on Thursday 11th December and will discuss projections for 2025/26 which show a significant overspend of £3.258 million albeit with mitigating actions underway. £2.176 million of this relates to Adult Social Care services. The most significant Adult Social care pressure is spend driven by the Community Care Resource Panels alongside some smaller projected overspends in Newbyres Village Care Home and Highbank Intermediate Care Facility. Delivery of agreed financial Page 65 of 216
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recovery actions has mitigated budget pressure to some extent, but not fully. 4.5 At this stage there is a significantly heightened risk of MIJB requiring additional resource from Midlothian Council to be able to fund costs in 2025/26 and this is reflected in appendix 1 and section 5 below. Financial Recovery work continues as MIJB strive to reach a break- even position. 5 General Fund Reserve 5.1 The projected balance on the General Fund as at 31 March 2026 is as follows: £ million £ million General Fund Reserve at 1 April 2025 32.029 Planned movements in reserves Application of Budgets carried forward from 2024/25 for use in 2025/26 (11.195) Utilisation of reserve to balance 2025/26 budget (0.163) Utilisation of retrospective service concessions to fund costs in 2025/26 (4.093) Transformation funding applied to date during 2025/26 (0.304) Transformation funding projected for use during 2025/26 (1.743) Supplementary Estimate for Gorebridge High School Land Identification (0.050) Enhancement to Business Transformation Fund 1.000 Other 0.019 (16.529) Overspend per appendix 1 (2.616) General Fund Balance at 31 March 2026 12.884 Capitalisation of Gym Equipment (section 5.3) 0.737 Re-provisioning of earmarked reserves (section 5.3) 0.770 Revised General Fund Balance at 31 March 2026 14.391 An element of the General Fund is earmarked for specific purposes and this is shown below: £ million General Fund Balance at 31 March 2026 14.391 Earmarked for specific purposes To support Council Transformation Blueprint (0.297) Planned use of Service Concession Retrospection (6.674) Planned use of Loans Fund Review Savings (2.153) General Reserve at 31 March 2026 5.267 5.2 The Reserves Strategy approved by Council on 12th February 2019 requires Council to maintain an adequate level of General Reserve to provide a contingency for unforeseen or unplanned costs. In the financial context at that time Council approved the adoption of 2% of the approved budgeted net expenditure (excluding resources Page 66 of 216
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delegated to the IJB) to be considered a minimum. This now equates to £5.263 million. Council also agreed that where projections indicate that should the 2% minimum General Reserve balance be breached an immediate recovery plan be implemented to recover the position, failing which, the next available budget would need to provide for the reinstatement of reserve position. 5.3 A detailed review of earmarked reserves took place during quarter 2. Firstly, costs of gym refurbishment are capital in nature, and it is recommended in the General Service Capital Plan monitoring report on today’s agenda that costs of £0.737 million are added to the General Services Capital plan and subsequently released from the earmarked element of the General Fund. Secondly, a further £0.770 million of earmarked reserves was identified that can now be reclassified as non- earmarked reserves. These are budgets no longer required to fund policy delivery in line with their original intention. This increases the non-earmarked element of the General Fund to £5.267 million as illustrated in the table below and makes it compliant with the Reserves Strategy. £ million General Reserve at 31 March 2026 (per Section 5.1) 3.760 Capitalisation of Gym Refurbishment 0.737 Reclassification of other earmarked reserves 0.770 Updated General Fund Reserve at 31 March 2026 5.267 5.4 The General Fund Reserve must continue to be viewed both in the context of £5.742 million of underlying service pressures in 2025/26 (Appendix 1 - General Fund Services Net Expenditure) and the latest MTFS projected gap of approximately £10.1 million through to 2028/29. 5.5 Until there is significant progress towards a balanced MTFS it remains sound financial practice to maintain a substantial buffer in the General Reserve to offset any further adverse performance against budget or delays in delivering savings measures. This will be a key part of 2026/27 budget setting deliberations. 6 Report Implications (Resource, Digital and Risk) 6.1 Resource The projected performance against budget set out in this report presents the initial projections for the year. Work continues across the council to reduce overspends and to progress at pace delivery of approved savings. 6.2 Digital Increased reliance and investment in digital solutions and digital first solutions will be a key element of future plans. Page 67 of 216
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6.3 Risk Section 95 of the Local Government (Scotland) Act 1973 requires all Local Authorities in Scotland to have adequate systems and controls in place to ensure the proper administration of their financial affairs. The assessment of performance against budgets by services is underpinned by comprehensive financial management and budgetary control arrangements. These arrangements are central to the mitigation of financial risk. Ensuring that adequate systems and controls are in place reduces the risk of significant variances arising, and where they do arise they help to ensure that they are identified and reported on and that appropriate and robust remedial action is taken. The primary purpose of this report is to provide an assessment of performance against budget for the full year. The material variances detailed in the report highlight that the financial management and budgetary control arrangements require continual review and enhancement if financial risk is to be effectively mitigated during the year. There are some areas where effective forecasting of spend against budget is hindered due to incomplete service information which in previous years has resulted in previously unreported or significantly adjusted variances at the financial year end. CMT continues to consider these areas and supports actions to address the underlying issues and mitigate the risk associated with them. At quarter 2 building maintenance recharges remain under review. The Council recognises the potential for compensation claims deriving from Scottish Government’s Limitation (Childhood Abuse) (Scotland) Act 2017 which removes the three year time limit on claims of child abuse. Some claims will be historic and relate to Lothian Regional Council, Midlothian District Council or their predecessors and some will date post reorganisation and relate to Midlothian Council, and so presents a risk that would further reduce reserves from those currently projected. Further financial obligations may also arise as the implications associate with the The United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill, which has yet to secure Royal Assent, are more fully understood. 6.4 Ensuring Equalities As changes to existing plans are developed the assessment of the impact of these proposals in relation to their impact on equalities and human rights will be carried out. This will help to ensure wherever possible that there are no negative impacts on equality groups or potential for infringement of individuals’ human rights from the any of the proposals. 6.5 Additional Report Implications See Appendix A Page 68 of 216
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Appendices APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan The existing financial plans support the delivery of the key priorities in the Single Midlothian Plan. As the impact on the Council of the pandemic and recovery continues to unfold over the financial year any changes in the availability and allocation of resources will need to be considered in parallel to the actions proposed to continue to delivery key priorities. A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on Delivering Best Value. A.5 Involving Communities and Other Stakeholders The development of the Medium Term Financial Strategy reflects community consultation exercises carried out in 2019 and again in 2022 to help shape the drafting of the “Midlothian Promise” and the development of the Council’s Longer Term Financial Strategy. In addition, there is continued engagement with the recognised Trade Unions on the financial position. Page 69 of 216
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A.6 Impact on Performance and Outcomes The Financial Strategy facilitates decisions on how Council allocates and uses its available resources and as such has fundamental implications for service performance and outcomes. The lasting financial consequences of the pandemic will impact on the availability and allocation of resources in pursuit of key outcomes as set out in the Single Midlothian Plan for both the immediate and longer term and therefore the ability of the Council to continue to deliver services in a financial sustainable manner. A.7 Adopting a Preventative Approach Maintaining the effectiveness of the Financial Strategy will support the prioritisation of resources to support prevention. A.8 Supporting Sustainable Development There are no direct sustainability issues arising from this report and we will work to mitigate as far as feasible any sustainability issues which arise as a consequence of any of the changes to existing plans. Appendix 1 Projected Outturn Appendix 2 Approved Savings Delivery Page 70 of 216
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MIDLOTHIAN COUNCIL Appendix 1 GENERAL FUND 2025/26 Performance against budget Revised Budget Revised Budget Revised Budget (Underspend) Function Approved Budget Expenditure Income Net Outturn / Overspend £ £ £ Management and Members 4,856,493 4,804,229 0 4,804,229 4,902,229 98,000 Place Corporate Solutions 23,746,618 44,881,855 (20,065,011) 24,816,844 26,059,844 1,243,000 Place 42,018,333 67,521,193 (21,244,094) 46,277,099 46,653,099 376,000 Central Costs 2,368,921 1,211,824 0 1,211,824 1,314,824 103,000 People and Partnerships Midlothian Integration Joint Board 71,086,709 80,550,039 (9,033,002) 71,517,037 73,693,037 2,176,000 Non-Delegated Services - Community Safety and Welfare Rights 714,131 897,609 (98,757) 798,852 802,852 4,000 Childrens Services, Partnerships and Communities 21,005,822 24,398,310 (1,008,565) 23,389,745 24,704,745 1,315,000 Education 153,756,358 163,405,302 (6,054,980) 157,350,322 157,715,322 365,000 Lothian Valuation Joint Board 581,659 581,659 0 581,659 643,659 62,000 Non Distributable Costs 898,936 898,936 0 898,936 898,936 0 GENERAL FUND SERVICES NET EXPENDITURE 321,033,980 389,150,956 (57,504,409) 331,646,547 337,388,547 5,742,000 Loan Charges 8,872,000 8,842,000 0 8,842,000 5,898,000 (2,944,000) NDR Discretionary Relief 70,300 70,300 0 70,300 70,300 0 Investment Income (110,736) 0 (110,736) (110,736) (110,736) 0 Allocations to HRA, Capital Account etc. (5,800,545) (5,800,545) 0 (5,800,545) (5,800,545) 0 324,064,999 392,262,712 (57,615,145) 334,647,567 337,445,567 2,798,000 less Funding: Scottish Government Grant (244,974,000) 0 (245,027,000) 245,027,000 245,140,000 (113,000) Council Tax (71,830,000) 0 (71,830,000) 71,830,000 71,899,000 (69,000) Service Concessions - in-year 0 3,005,000 0 3,005,000 3,005,000 0 Utilisation of Reserves 7,260,999 395,267,712 (374,472,145) 14,785,567 17,401,567 2,616,000 Page 71 of 216
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MIDLOTHIAN COUNCIL Appendix 2 GENERAL FUND 2025/26 Delivery of Approved Savings 25/26 25/26 Savings Outturn Variance Target Q1 Q1 Narrative Place Management Review 1,256 1,256 0 Digital Transformation 257 0 257 Efficiencies from rollout of Digital Tools remain in service budgets Online Customer Engagement 235 0 235 Automation of services will generate saving. Work programme under development and savings will follow Leadership Review - Corporate Solutions 45 45 0 Reduce Net cost of Benefits by 6% 238 0 238 Open Revenues Project commenced and successful completion of actions will lead to staffing efficiencies Rationalisation of the office Estate 250 250 0 Shared on-call Service 10 10 0 Review of Temporary Accommodation 200 200 0 HRA Void Clearances 15 15 0 School and ASN Transport Review 30 30 0 School Admin Support 20 20 0 Non-delegated HSC efficiencies 45 45 0 Reduction of Specialist Instructors 35 35 0 Further review of S&L 44 44 0 Reduce Shrub Bed maintenance 36 36 0 PPP school closures during holidays 40 40 0 Public Toilets closure 81 63 18 Remaining facilities offered for sale or Community Asset Transfer Trading Standards Regional collaboration 90 90 0 Cease Night Security at Stobhill Depot 150 150 0 Safety Advisory Group 25 25 0 Remove 5 FTE Grade 1 Cleaners 125 76 49 Incremental workforce reductions are being realised Location and Vehicle Advertising 25 25 0 Wrap Around Care 75 0 75 Plan to deliver this to be developed. Land Services Review 75 75 0 Education Third Party Contracts Review 500 500 0 Admin Review 34 34 0 1% DSM Budget 400 400 0 Transformation of the School Week 2,000 2,000 0 Continuous Improvement Team 28 28 0 Internal Audit 55 55 0 Reduction in offer to MIJB 1,133 1,133 0 Communities and Lifelong Learning Review 250 250 0 Parking Fines 100 32 68 Fine income offset by running costs. Link to development of parking strategy Roads Maintenance - replace maintenance costs with £2.5m capital 267 267 0 Reduction of Dry-Side facilities at the weekend in Leisure Centres 65 0 65 New staffing rotas being developed but not yet implemented Reduction of Wet-Side facilities at the weekend in Leisure Centres 112 0 112 New staffing rotas being developed but not yet implemented Reduction in Cleaning Frequency in some Council Buildings 132 62 70 Incremental workforce reductions are being realised Review of Service Contracts in CYPP Directorate 500 0 500 Review of contracts underway. Majority of saving will be delivered in 26/27 CLLE Efficiency 75 75 0 Review of CYPP Central Teams 200 200 0 Lets and Charges for After School Clubs 40 40 0 Delivery of Business Critical Spend 717 420 297 May be further Community Action Teams savings. Income Generation worksteams to be worked through Total 10,010 8,026 1,984 Page 73 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.3 General Services Capital Plan 2025/26 Quarter 2 Monitoring Report by David Gladwin, Chief Financial Officer & Section 95 Officer Report for Decision 1 Recommendations It is recommended that Council:- 1. Note the inclusion of the Property and Estates Asset Management Plan as outlined in Section 3.1; 2. Approve the inclusion of the projects in Section 3.2 in the General Services Capital Plan (GSCP); 3. Note the forecast outturn for expenditure (after reflecting rephased project budgets), funding and borrowing, as outlined in Section 4. 2. Purpose of Report The purpose of this report is to provide Council with:- • An update of the GSCP incorporating information on a further addition to the Plan for approval (Section 3); • Information on the projected performance against budget for 2025/26 (Section 4); • Update on the Capital Fund (Section 5). Date 01 December 2025 Report Contact: Gary Thomson, Senior Finance Business Partner gary.thomson@midlothian.gov.uk Page 75 of 216
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3 Update of GSCP 3.1 Projects endorsed by Council and to be added into the Plan The plan now incorporates the Property and Estates Asset Management Plan approved by Council on 21 October 2025 as follows:- 21 October 2025 • Property and Estates Asset Management Plan: Asset management plan for the Council’s property & estates assets. Replacement of existing budgets totalling £9.125 million over the period 2026/27 to 2029/30 with total of £23.066 million of budgets covering both backlog upgrades and condition survey requirements, with expected budgets over a wider 10 year forward looking period. 3.2 Projects presented for endorsement in the Plan The following projects are presented for endorsement to be fully adopted within the GSCP:- • Active Travel Infrastructure Fund Tier 2: Delivery of the following active travel projects: 1. A701 to Easter Bush: Upgrading of the existing pedestrian crossing on the A701 at the junction with the A703 to a Toucan Crossing, a shared use path on the eastern side of the A701 between the Moat Cottage Path and the upgraded crossing, and the widening of the existing footway on the A703 to a 3m shared-use path connecting to the Easter Bush Campus; 2. A7/Carrington Road Signalised Junction & Toucan Crossing: Installation of fully signalised junction at the A7/Carrington Road, widening of the footway to 3m along the A7 towards Newtongrange and 2.5m towards Hardengreen to create shared use paths, and widening of the footway along Carrington Road to 2.5m to also facilitate shared use and access to Carrington View housing development. 3. Loanhead & Straiton Active Travel Network Gaps & Connections: Surface & Lighting improvements to the existing Straiton Pond Path, enhancing the connection between Straiton Retail Park and the off-road Shawfair to Roslin multi-user path, ramped access from Edgefield Relief Road to replace the existing stepped access, and the widening of the existing footway along Loanhead Road (B702) from the Straiton Pond entrance/exit to the A701 to create a shared-use path. £1.220 million capital expenditure budget, to be fully phased in 2025/26, and fully funded by £1.220 million of Transport Scotland Scottish Government ATIF Tier 2 capital grant funding. Approved by Capital Plan & Asset Management Board (CPAMB) on 27 November 2025. Page 76 of 216
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• Bus Infrastructure Fund Tier 1: Upgrade of 23 bus stops across the County with various other infrastructure upgrade works. £0.192 million capital expenditure budget, to be fully phased in 2025/26, and to be fully funded by Transport Scotland Scottish Government Bus Infrastructure Fund Tier 1 Capital Grant funding of £0.192 million. Approved by CPAMB in November 2025; • Bus Infrastructure Fund Tier 2 (Part 1): Hillend Bus Terminus: New Bus Terminus at Destination Hillend. £0.044 million capital expenditure budget, to be fully phased in 2025/26, and to be fully funded by Transport Scotland Scottish Government Bus Infrastructure Fund Tier 2 Capital Grant funding of £0.044 million. Approved by CPAMB on 27 November 2025; • Bus Infrastructure Fund Tier 2 (Part 2): Urban Traffic Control: Delivery of Urban Traffic Control (UTC) and Microprocessor Optimised Vehicle Actuation (MOVA) traffic signal controls designed to deliver priority for buses at 15 key junctions in Midlothian. Capital expenditure budget of £0.735 million, to be fully phased in 2025/26 and to be fully funded by Transport Scotland Scottish Government Bus Infrastructure Fund Tier 2 Capital Grant funding of £0.735 million. Approved in principle CPAMB on 24 April 2025 with fully approval of grant acceptance by CMT on 12 August 2025 and by CPAMB on 27 August 2025. • UK Shared Prosperity Fund Projects: Upgrade to External Fabric of Birkenside Pavilion and Pathhead Pavilion. £0.330 million capital expenditure budget, to be fully phased in 2025/26 and fully funded by £0.330 million of UKSPF Capital Grant Funding. Approved by CPAMB on 27 November 2025; • Callander Play Park Equipment: Upgrade of Play Equipment in Callander Park, Pathhead. £0.019 million capital expenditure budget, to be fully phased in 2026/27 and fully funded by £0.019 million of developer contributions. Approved by CPAMB on 27 November 2025; • Gym Refurbishment & Transformation: Purchase of new gym equipment, including full replacement of equipment at Penicuik, Lasswade & Newtongrange Gym. Upgrade to gym lighting, flooring, aesthetics, CCTV, WiFi and air conditioning. £0.737 million capital expenditure budget, to be fully phased in 2025/26 and fully funded by prudential borrowing. Approved by Business Transformation Board on 23 April 2025, Business Transformation Steering Group on 1 May 2025 and CPAMB on 27 November 2025. Page 77 of 216
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4 2025/26 Projection against budget 4.1 2025/26 Budget After accounting for the following:- • Rephasing of budgets from 2025/26 to 2026/27 and variance against budget as reported to Council at Quarter 1 on 9 September 2025; • Including the new projects as outlined in Section 3; The capital plan expenditure budget for 2025/26 is £81.630 million, funding budget is £32.690 million and in-year borrowing of £48.940 million. 4.2 Rephasing Project expenditure budgets have been rephased based on the latest information available from Project managers and Service Leads as noted in Table 1 overleaf. Page 78 of 216
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Table 1: Rephasing of project expenditure budgets Project Description of rephasing of budget Previous 2025/26 Budget £000’s Revised 2025/26 Budget £000’s 2025/26 Budget Rephasing £000’s CHILDREN, YOUNG PEOPLE & ESTATES PROGRAMME BOARD Mayfield Community Campus Works are progressing well and remain broadly on programme with marginal (5%) reduction in projected outturn expenditure by year end 13,067 12,223 -844 Beeslack CHS Replacement Project has required value engineering and re-design to bring costs back within budget, which has extended the pre- contract period 7,000 1,699 -5,301 Shawfair All Through Campus Rephasing of spend due to procurement of multi disciplinary team taking longer than anticipated. Invitation to Tender has been issued this month to appoint a main contractor under a Pre- Construction Services Agreement from January 2026 2,945 470 -2,475 Mount Esk Nursery School Replacement at Hawthornden Reprofiling reflects a shift in programme timelines into next financial year. This is primarily due to the consultation on renaming the facility, along with the ongoing analysis of roll projections which is required to ensure the long-term viability and appropriate scale of this planned investment. 2,593 0 -2,593 Page 79 of 216
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ASSET MANAGEMENT PROGRAMME BOARD Digital Asset Management Plan Rephasing relates primarily to requirement to align telephony works to the Midlothian House project 1,660 1,370 -290 Road Upgrades – Asset Management Plan & Residential Streets The Residential Streets project commenced in 2021/22 but a late start to the project meant that a reducing balance has been carried forward each year since. The final £0.3m of this will be spent in early 2026/27. 4,960 4,660 -300 Fleet Replacement Programme Rephasing in relation to vehicles with a delivery date of early 2026/27 (May 2026) 6,218 4,989 -1,229 Play Park Renewal 2024/25 and 2025/26 Rephasing due to the increased lead time from suppliers providing equipment, as a result of the recent significant Scottish Government Play funding allocations to Local Authorities across Scotland 1,042 315 -727 TRANSPORT, ENERGY & INFRASTRUCTURE PROGRAMME BOARD FCC Zero Waste – Heat Offtake Facility Finalisation of negotiations between FCC and Partner Councils expected early 2026 with Midlothian share of payment due thereafter under the Inter-Authority Agreement. See also ‘Midlothian Energy Limited – Business Plan 2026- 30’ report elsewhere on today’s agenda 1,040 0 -1,040 REGENERATION & DEVELOPMENT PROGRAMME BOARD Destination Hillend Rephasing due to slippage on the Scottish Power Energy Networks infrastructure works, purchase of Portakabin toilets and the pumphouse 1,341 1,120 -221 OTHER Assistive Technology Rephasing in Assistive Technology spend due to focus on completion of the Analogue to Digital project, with Assistive Technology budget still required in future years for new telecare packages and ongoing replacements 300 58 -242 Others Rephasing of other projects 3,238 3,147 -91 Total 46,901 31,297 -15,604 Page 80 of 216
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This results in a rephased capital expenditure budget for 2025/26 of £66.027 million as shown in detail in Appendix 1. In line with this, the expected level of funding available to finance the plan has also been rephased and now totals £24.068 million. This results in an in-year borrowing requirement of £41.959 million. The projected performance against budget for 2025/26 is shown in table 2 below:- Table 2: General Services Capital Plan Projected Performance against Budget 2025/26 – as at Quarter 2 Item 2025/26 2025/26 Actual 2025/26 2025/26 2025/26 Q2 Rephased To Projected Variance Carry Budget £000s Budget £000’s 12.10.25 £000’s Outturn £000’s £000’s Forward £000’s Expenditure 81,630 66,027 17,137 65,808 -219 -15,604 Funding 32,690 24,068 7,545 24,009 -59 -8,622 Borrowing Required 48,940 41,959 9,592 41,799 -160 -6,981 4.3 Expenditure Expenditure to 12 October 2025 was £17.137 million and at that point project managers and service leads are indicating a forecast expenditure outturn of £65.808 million, £0.219 million less than the rephased budget as outlined below:- • Vehicle & Plant Replacement Programme: Underspend of £0.298 million against rephased £4.989 million 2025/26 budget, reflecting greenspace plant no longer required by the service and adjustments to the approved fleet schedule following updated verification of replacement requirements; • Property Upgrades: Underspend of £0.013 million against £1.613 million 2025/26 budget, reflecting reduced spend on the New doors and Alarm Systems project at Lasswade Campus due to change in project specification; • Place Based Investment Programme (PBIP) 2021/22: Underspend of £0.059 million against remaining £0.276 million budget, reflecting an underspend against the cost of the Penicuik Public Realm works element of the project. • Hawthornden Primary: ASN Unit: Overspend of £0.017 million against original £1.676 million budget as a result of final retention and fees charged to close out the project. • Paradykes Primary Replacement: Overspend of £0.134 million against original £14.878 million budget as a result of final retention and fees charged to close out the project. Expenditure incurred to 12 October 2025 across all projects in the General Services Capital Plan (£17.137m) equates to 26% of the projected total expenditure budget for 2025/26. This means that £48.671m (or 74% of expenditure) is projected to be incurred by the end of the financial year, with only 46% of the financial year remaining. Page 81 of 216
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The expenditure forecasts are based on the latest assessment of project expenditure by service leads and project managers. The risk in these forecasts is that expenditure is materially less than forecast, with overly optimistic forecasts from service leads and project managers resulting in underspends within the current financial year and/or rephasing from 2025/26 into 2026/27. Given the substantial expenditure currently estimated to be committed in the second half of the year combined with material supply and inflationary pressures, all Project Managers and Service Leads are carrying out a full review of project plans and expenditure profiles and the outcome of this will be reflected in the Q3 GSCP report to Council in February 2025. 4.4 Funding The funding available to finance the Capital Plan in 2025/26 is expected to total £24.009 million, a net underspend of £0.059 million against the rephased budget of £24.068 million and reflecting the return of PBIP 2021/22 grant funding to the Scottish Government as reported in Section 4.3 above. Funding of £7.545 million has been received to 12 October 2025. 4.5 Borrowing Based on the forecast expenditure and funding levels as noted above, the revised estimate of the level of borrowing required for 2025/26 is forecast to be £41.799 million. The impact on the Council’s borrowing costs is reflected in the Financial Monitoring 2025/26 General Fund Revenue report elsewhere on today’s agenda. 5 Capital Fund The Capital Fund at the start of the 2025/26 financial year was £17.600 million. £7.694 million of this is committed to fund the City Deal, with a further £7.061 million committed to support capital investment. The forecast non-committed capital fund balance at 31 March 2026 is £2.708 million, as shown in the table below. Item Amount £000’s Balance at 01 April 2025 17,600 Forecast Capital Receipts 2025/26 467 Forecast Balance at 31 March 2026 18,067 Committed to fund City Deal Project -7,694 Committed to support Capital Investment -7,061 Developer Contributions earmarked for specific purposes -604 Forecast non-committed balance at 31 March 2026 2,708 Page 82 of 216
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6. Report Implications 6.1 Resource The borrowing required to finance the planned investment in 2025/26 is currently £41.799 million and the loan charges associated with this is reflected in the Financial Monitoring 2025/26 General Fund Revenue report elsewhere on today’s agenda. 6.2 Digital There are no Digital Services implications arising from this report. 6.3 Risk The construction materials supply chain has already been subject to unprecedented disruption through a combination of the Coronavirus (COVID-19) Pandemic, the UK leaving the European Union, the conflict in Ukraine and the global inflationary picture. The Construction Leadership Council (CLC) continues to report shortages of construction materials and forecasts this disruption to continue for the foreseeable future. Ongoing engagement with suppliers confirms that materials shortages, longer lead times and steep price increases are highly likely to continue to impact the supply chain. This potentially exacerbates the inherent risk in the Capital Plan that projects will cost more than estimated thus resulting in additional borrowing, or will be subject to significant delay. Strengthened financial monitoring & governance procedures have been approved by CP&AMB, which will ensure that significant variations can be captured and reported to Programme Boards and CP&AMB so that remedial action can be taken to mitigate the risks. In developing the strategy and taking cognisance of the longer term affordability gap it is clear that a number of potential projects which are currently included will only be able to be progressed if they can be delivered on a spend to save basis (i.e. where income or cost savings more than offset the cost of funding the investment) or where they can be delivered on a cost neutral basis or through alternative funding mechanisms. The Capital Plan includes a provision for the return of contingencies of £10.785 million over the period 2025/26 to 2028/29, equating to 2.5% of all project expenditure. The Capital Plan includes a provision for the return of contingencies of £1.214 million in 2025/26, equating to 2.5% of project expenditure. The risk is that projects throughout the plan are unable to deliver this which could be in part due to factors outwith the Council’s control. Contingencies of £0.530 million have been returned to date in the first two quarters of the year, representing 44% of the target of £1.214 million. Capital Plan & Asset Management Board will monitor the level of return of contingencies against the £1.214 million provision on an ongoing basis to ensure that projects can, where possible, deliver against this provision and that the provision continues to be appropriate. 6.4 Ensuring Equalities Page 83 of 216
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There are no equalities issues arising directly from this report. 6.5 Additional Report Implications See Appendix A. Page 84 of 216
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Appendix A: Report Implications A.1 Key Priorities within the Single Midlothian Plan Not applicable. A.2 Key Drivers for Change A.3 Key Delivery Streams Themes addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on Delivering Best Value. A.5 Involving Communities and Other Stakeholders No external consultation has taken place on this report. A.6 Impact on Performance and Outcome There are no issues arising directly from this report. A.7 Adopting a Preventative Approach Not applicable. A.8 Supporting Sustainable Development Not applicable. Background Papers: Appendix 1 –General Services Capital Plan 2025/26 Quarter 2 Monitoring Appendix 2 – Projects in Development Page 85 of 216
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Appendix 1: General Services Capital Plan 2025/26 Quarter 2 Monitoring Rephased 2025/26 2025/26 2025/26 2025/26 2025/26 2025/26 Note/Explanation GENERAL SERVICES CAPITAL PLAN Budget Budget Actual Forecast Variance Carry for Variance/Carry Forward Q2 Monitoring Q1 + New Q2 to P7 Outturn Q2 Q2 Forward Q2 £000's £000's £000's £000's £000's £000's CHILDREN, YOUNG PEOPLE & ESTATES PROGRAMME BOARD Education - Primary Woodburn Primary 9 class & activity hall extension 511 511 8 511 - - Easthouses Primary School 300 300 0 300 - - Mayfield & St. Luke's School Campus 13,067 12,223 3,815 12,223 - 844 Works are progressing well and remain broadly on programme with marginal (5%) reduction in projected outturn expenditure by year end Burnbrae Primary - Conversion of ASN to GP Space 26 26 - 26 - - Modular Units 2023/24 8 8 5 8 - - Bilston Primary School Extension 1,378 1,378 190 1,378 - - Roslin Primary School Modular Units 815 538 478 538 - - Education - Secondary Lasswade High - Enhancement of Faciltiies to Support School Capacity 452 452 - 452 - - Beeslack CHS Replacement 7,000 1,699 75 1,699 - 5,301 Project has required value engineering and re- design to bring costs back within budget, which has extended the pre-contract period Penicuik High School 7,702 7,702 1,642 7,702 - - Shawfair All-through Campus 2,945 470 85 470 - 2,475 Rephasing of spend due to procurement of multi disciplinary team taking longer than anticipated. Invitation to Tender has been issued this month to appoint a main contractor under a Pre- Construction Services Agreement from January 2026 Education - ASN Hawthornden Primary - ASN Unit 4 4 21 21 17 - Overspend of £0.020 million against original £1.676 million budget as a result of final retention and fees charged to close out the project ASN Provision - Social Complex Needs 212 212 71 212 - - Education - Early Years Mount Esk Nursery School Replacement at Hawthornden 2,593 - - - - 2,593 Reprofiling reflects a shift in programme timelines into next financial year. This is primarily due to the consultation on renaming the facility, along with the ongoing analysis of roll projections which is required to ensure the long-term viability and appropriate scale of this planned investment. Vogrie Outdoor Early Learning Centre 108 108 0 108 - - Other Outdoor Spaces 8 8 8 - - Education - Primary - Projects near completion Paradykes Primary Replacement 5 5 139 139 134 - Overspend of £0.139 million against original £14.878 million budget as a result of final retention and fees charged to close out the project. New Danderhall Primary hub 64 64 (53) 64 - - Acoustic Upgrades 91 91 - 91 - - Education - General Learning Estate Strategy: Development Budget 200 200 23 200 - - TOTAL - CHILDREN, YOUNG PEOPLE & ESTATES PROGRAMME BOARD 37,481 25,999 6,508 26,151 152 11,213 Page 86 of 216
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Rephased 2025/26 2025/26 2025/26 2025/26 2025/26 2025/26 GENERAL SERVICES CAPITAL PLAN Budget Budget Actual Forecast Variance Carry Q2 Monitoring Q1 + New Q2 to P7 Outturn Q2 Q2 Forward Q2 £000's £000's £000's £000's £000's £000's ASSET MANAGEMENT PROGRAMME BOARD Digital Business Applications 137 137 7 137 - - Front Office - Hardware, Software & Services 479 625 158 625 - (146) Back Office - Hardware, Software & Services 90 35 - 35 - 55 Network, Software & Services 678 185 - 185 - 493 Schools - Hardware, Software & Services 213 400 38 400 - (187) Recharge of Staffing 200 125 - 125 - 76 Digital: Equipped for Learning 2,489 2,489 808 2,489 - - Roads & Street Lighting Street Lighting and Traffic Signal Upgrades - New 969 969 247 969 - - Footway & Footpath Asset Management Plan - New 518 518 - 518 - - Road Upgrades - Asset Management Plan 1,536 1,986 365 1,986 - (450) Roads: Resurface Residential Schemes 3,424 2,674 742 2,674 - 750 Fleet Vehicle & Plant Replacement Programme 6,218 4,989 1,427 4,691 (298) 1,229 Rephasing in relation to vehicles with a delivery date of early 2026/27 (May 2026). Underspend of £0.298 million against rephased £4.989 million 2025/26 budget, reflecting greenspace plant no longer required by the service and adjustments to the approved fleet schedule following updated verification of replacement requirements Property Property Upgrades 1,693 1,613 676 1,600 (13) 80 Underspend of £0.013 million against £1.613 million 2025/26 budget, reflecting reduced spend on the New doors and Alarm Systems project at Lasswade Campus due to change in project specification Property Upgrades - LES 843 843 62 843 - - Open Spaces / Play Areas Outdoor Play Equipment - Rosewell 44 43 43 43 - - Roslin Wheeled Sports Facility 59 59 59 59 - - Mauricewood Road Bus Shelter 4 - - - - 4 Millerhill Park Asphalt Path 38 5 5 5 - 33 Welfare Park, Newtongrange 39 39 - 39 - - Play Park Renewal 2023/24+ 80 80 70 80 - - Play Park Renewal 2024/25 547 315 - 315 - 232 Play Park Renewal 2025/26 495 - - - - 495 Nature Restoration Fund 2023/24 24 24 18 24 - - Contaminated Land 70 70 41 70 - - Public Sector Housing Grants 291 291 88 291 - - Sport & Lesiure Tennis Court Upgrades 42 42 31 42 - - Gym Refurbishment & Transformation 737 737 - 737 - - Bonnyrigg Rose Football Club: Engineering & Ground Works 101 101 88 101 - - Flotterstone Car Park Infrastructure & Charging 16 16 - 16 - - TOTAL - ASSET MANAGEMENT PROGRAMME BOARD 22,074 19,410 4,973 19,099 (311) 2,663 Rephasing relates primarily to requirement to align telephony works to the Midlothian House project The Residential Streets project commenced in 2021/22 but a late start to the project meant that a reducing balance has been carried forward each year since. The final £0.3m of this will be spent in early 2026/27. Rephasing due to the increased lead time from suppliers providing equipment, as a result of the recent significant Scottish Government Play funding allocations to Local Authorities across Scotland Page 87 of 216
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Rephased 2025/26 2025/26 2025/26 2025/26 2025/26 2025/26 GENERAL SERVICES CAPITAL PLAN Budget Budget Actual Forecast Variance Carry Q2 Monitoring Q1 + New Q2 to P7 Outturn Q2 Q2 Forward Q2 £000's £000's £000's £000's £000's £000's TRANSPORT, ENERGY & INFRASTRUCTURE PROGRAMME BOARD Transport A701 Relief Road: Bush Loan Junction 326 431 264 431 - (105) A701 Relief Road: A701 Active Travel Corridor 327 238 143 238 - 89 A701 Relief Road: Phases 4-8 520 556 157 556 - (36) Sustainable Transport A7 Urbanisation 1,496 1,246 589 1,246 - 250 Active Travel Infrastructure: Tier 1 1,045 1,045 (88) 1,045 - - Active Travel Infrastructure: Tier 2 1,220 1,220 - 1,220 - - Bus Infrastructure Fund: Tier 1 192 192 - 192 - - Bus Infrastructure Fund: Tier 2 (Part 1): Destination Hillend Bus Stop 44 44 - 44 - - Bus Infrastructure Fund: Tier 2 (Part 2): Urban Traffic Control 735 735 - 735 - Sustrans - People & Places Equipment Purchases 197 197 17 197 - - Community Bus Fund 4 4 - 4 - - Others UKSPF: Infrastructure Improvements 2025/26 330 330 8 330 - - FCC Zero Waste - Heat Offtake Facility 1,040 - - - - 1,040 Finalisation of negotiations between FCC and Partner Councils expected early 2026 with Midlothian share of payment due thereafter under the Inter-Authority Agreement. See also report elsewhere on today's agenda TOTAL - TRANSPORT, ENERGY & INFRASTRUCTURE PROGRAMME BOARD7,477 6,239 1,090 6,239 - 1,239 REGENERATION & DEVELOPMENT PROGRAMME BOARD Regeneration Place Based Investment Fund 2021/22 276 276 - 217 (59) - Underspend of £0.059 million against remaining £0.276 million budget, reflecting an underspend against the cost of the Penicuik Public Realm works element of the project Place Based Investment Fund 2022/23 85 85 4 85 - - Place Based Investment Fund 2023/24 118 118 - 118 - - Rosewell Development Trust - The Steading Infrastructure Upgrades 55 55 - 55 - - Development - Destination Hillend 1,341 1,120 677 1,120 - 221 Rephasing due to slippage on the Scottish Power Energy Networks infrastructure works, purchase of Portakabin toilets and the pumphouse Midlothian House RetroFit 4,936 4,936 373 4,936 - - Highbank Intermediate Care Reprovisioning 4,626 4,626 2,968 4,626 - - Day Care Centre 494 494 148 494 - - General Fund Share of Extra Care Housing 107 107 67 107 - - Recycling Improvement Fund (Stobhill Recycling Depot) 2,530 2,530 49 2,530 - - TOTAL - REGENERATION & DEVELOPMENT PROGRAMME BOARD 14,568 14,347 4,286 14,288 (59) 221 OTHER (PROGRAMME BOARD NOT YET DEFINED) PLACE Digital Council Hybrid Meetings 16 16 - 16 - - Property/Development - Midlothian & Fairfield House Shower Upgrades 5 5 3 5 - - Penicuik THI: Public Realm Scheme 171 171 - 171 - - Millerhill Pavilion 7 7 - 7 - - PEOPLE & PARTNERSHIPS - Education - Free School Meal Provision 186 186 - 186 - - Communities & Partnerships Members Environmental Improvements 367 300 98 300 - 67 Adult Social Care Assistive Technology 300 58 32 58 - 242 Rephasing in Assistive Technology spend due to focus on completion of the Analogue to Digital project, with Assistive Technology budget still required in future years for new telecare packages and ongoing replacements Analogue to Digital Transition 501 501 147 501 - - TOTAL NOT ALLOCATED TO PROGRAMME BOARDS 1,554 1,245 279 1,245 - 309 COST OF SALES Cost of Sales - - 2 - - - TOTAL COST OF SALES - - 2 - - - SUBTOTAL - PRE RETURN OF CONTINGENCIES 82,844 67,241 17,137 67,022 (219) 15,604 Provision for Return of Contingencies (1,214) (1,214) - (1,214) - - GENERAL SERVICES CAPITAL PLAN TOTAL 81,630 66,027 17,137 65,808 (219) 15,604 Page 88 of 216
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Appendix 2 – Projects in Development The General Services Capital Plan (GSCP) includes all projects that are currently fully approved. In addition, the following projects are at the development stage and will be brought forward to Council for full approval and adoption in the GSCP if the projects meet the Council’s statutory & policy drivers and an affordable business case has been developed. The following list is not an exhaustive list of projects but represents a wider suite of projects to those already fully approved. Projects in Development Children, Young People and Partnerships Programme Board Gorebridge High School Mauricewood Primary School Extension Conversion of Mount Esk Nursery School to ASN provision (for Lasswade High School) St. David’s Primary Extension Asset Management Board Temple Ground Stabilisation B6372 Arniston Embankment Stabilisation Regeneration & Development Programme Board Stobhill Depot Masterplan Hopefield Industrial Estate Woodburn Community Hub Vogrie Renewal Strategy Masterplan Gorebridge Library Relocation Bereavement Campus Transport, Energy & Infrastructure Programme Board A701 Relief Road – Phases 4-8 Page 89 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.4 Housing Revenue Account Revenue Budget and Capital Plan 2025/26 Report by David Gladwin, Chief Financial Officer and Section 95 Officer Report for Information 1 Recommendations Council is recommended to note the contents of this report. 2 Purpose of Report / Executive Summary The purpose of this report is to provide Council with a summary of expenditure and income to 24th October 2025 for the Capital Plan and a projected outturn for both the Housing Revenue Account (HRA) and Capital Plan for 2025/26. The summarised financial performance for 2025/26 is: • Projected capital investment in the year totalling £63.864 million; • A projected net overspend in the revenue account of £1.067 million; • A projected HRA general reserve at 31st March 2025 of £30.351 million. Date: 17th November 2025 Report Contact: Name: Lisa Young Email: lisa.young@midlothian.gov.uk Page 91 of 216
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3 Background 3.1 Capital Plan 2025/26 The 2025/26 Capital Plan budget has been revised to reflect the current profile of spend as shown in appendix B. Capital investment in the year is projected to be £63.864 million. As previously reported to Council 9th September 2025, the sale of Loanhead Police Station and 3 Crichton Avenue has resulted in additional capital receipt of £0.420 million and these receipts will subsequently reduce the overall borrowing requirement for 2025/26. There are currently no other material variances to be reported. 3.2 Revenue Account 2025/26 The projected underspend for 2025/26 reported to Council 9th September 2025 was £0.261 million against budget. This has deteriorated by £1.328 million and is now showing a projected overspend of £1.067 million, as shown in appendix C. This change from quarter 1 is mainly due to increased pressure on the responsive repairs budget caused by: • An increase in the required number of roof repairs, further exacerbated by some of these repairs incurring scaffolding costs; • The impact of pay inflation on the internal recharge rate charged by building maintenance services thus making it higher than budgeted and resulting in a higher value of internal repairs; • Capital investment in existing stock as part of historic upgrade programmes is needing refreshed as these upgrade programmes began over fifteen years ago. As a result, this is putting more pressure on the revenue repairs budget. Stock condition surveys are currently underway to inform a future Scottish Housing Quality Standard Capital Programme, which will alleviate this pressure in future years. The HRA general reserve balance is projected to be £30.351 million at 31st March 2026, which is committed to finance existing investment commitments to 2040/41. 4 Report Implications 4.1 Resource There are no direct resource implications arising from this report. 4.2 Digital There are no direct digital implications arising from this report. Page 92 of 216
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4.3 Risk The principal risks are around the issue of affordability, ensuring that the investment in new build and the existing stock can be made without having to impose unacceptable increases on weekly rents. This is mitigated by the adoption of a long-term financial strategy and modelling which demonstrates that existing investment commitments are sustainable. There is also the risk of capital spend being lower than projected due to delays on projects, particularly in the current climate, this could result in lower debt charges causing the Housing Revenue Account Reserve balance to increase by more than projected. 4.4 Ensuring Equalities There are no equality issues arising directly from this report. 4.5 Additional Resource Implications See Appendix A. Appendices Appendix A – Additional Resource Implications Appendix B - Capital Plan 2025/26 Appendix C – Revenue Account 2025/26 Page 93 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan Not applicable A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on Delivering Best Value. A.5 Involving Communities and Other Stakeholders The report does not directly relate to involving communities. A.6 Impact on Performance and Outcomes The report does not directly impact on Midlothian Council’s performance and outcomes. A.7 Adopting a Preventative Approach The report does not directly relate to adopting a preventative approach. A.8 Supporting Sustainable Development The report does not directly relate to supporting sustainable development. Page 94 of 216
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MIDLOTHIAN COUNCIL Appendix B HOUSING REVENUE ACCOUNT CAPITAL PLAN 2025/26 Revised Budget Actuals To Date Projected Outturn (Under)/Over Spend CAPITAL GRANTS AND RECEIPTS £'000 £'000 £'000 £'000 Scottish Government Grants -Affordable housing supply programme 6,654 3,011 6,654 0 -Off market purchases 590 0 590 0 -Social housing net-zero 1,046 0 1,046 0 Council tax on second homes 59 0 59 0 Other capital receipts 0 420 420 420 Borrowing requirement 55,515 19,512 55,095 (420) Total Capital Grants and Receipts 63,864 22,943 63,864 0 APPROVED CAPITAL EXPENDITURE £'000 £'000 £'000 £'000 Investment in Additional Housing Stock -New social housing phase 3-5 44,959 18,534 44,959 0 -Dalkeith town centre regeneration - social housing 50 9 50 0 -Off market purchases 1,700 190 1,700 0 Capital Repairs and Enhancement of Existing Stock -Scottish Housing Quality Standards (SHQS) Repairs 4,077 2,004 4,077 0 -Energy Efficiency Standard for Social Housing (EESSH) 5,918 275 5,918 0 -Upgrade Central Heating Systems 2,831 951 2,831 0 -Damp remediation works 1,500 796 1,500 0 Other Capital Expenditure -Aids and adaptations 529 184 529 0 -Backdated developer contributions 1,000 0 1,000 0 -Bonnyrigg District Heating Scheme (BDHS) meters 1,300 0 1,300 0 Total Capital Expenditure 63,864 22,943 63,864 0 Page 95 of 216
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MIDLOTHIAN COUNCIL Appendix C HOUSING REVENUE ACCOUNT 2025/26 Revised Budget Projected Outturn (Under)/Over Spend Average Number of Houses 7,747 7684 (63) £'000 £'000 £'000 EXPENDITURE Repairs and Maintenance -Responsive 5,513 6,639 1,126 -Planned 930 900 (30) -Void 2,678 2,800 122 -Decant/Compensation 78 78 0 Total Repairs 9,199 10,417 1,218 Supervision and Management -Allocations to General Fund 5,801 5,801 0 -Landscaping 616 714 98 -Insurance 324 471 147 -Other Supervision and Management 275 291 16 Total Supervision and Management 7,016 7,277 261 Capital Financing Costs 18,554 17,922 (632) Void Rent and Council Tax 1,247 1,344 97 Other Expenditure 2,296 2,549 253 Total Expenditure 38,312 39,509 1,197 INCOME Dwelling Rents (36,767) (36,866) (99) Garage Rents (710) (710) 0 Service Charge Income (273) (304) (31) Other Income (70) (70) 0 Total Income (37,820) (37,950) (130) Net (Income)/Expenditure for HRA Services 492 1,559 1,067 Movement in Housing Revenue Account Reserve Housing Revenue Account Reserve Opening Balance (31,910) (Enhancement)/impairment during the year as above 1,559 Reserve earmarked to fund capital investment plans (30,351) Page 96 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.5 Medium Term Financial Strategy – 2026/27 to 2028/29 Report by David Gladwin Chief Financial Officer and Section 95 Officer Report for Information 1 Recommendations a) Note that the Business Transformation Steering Group (BTSG) will continue to consider measures necessary to support delivery of a balanced Medium Term Financial Strategy (MTFS) before any policy measures are presented to Council. b) Note the recommendation from the best value audit report on transformation that the Council recognises that it is operating in a fiscally challenging environment and now needs to find a way to accelerate progress on the remaining projects within the Transformation Blueprint with the resources it has available. c) Note that the budget gap for 2026/27, incorporating the planned use of service concession retrospection and an indicative 9% annual Council Tax increase is projected to be £2.452 million, rising to a projected £10.131 million by 2028/29 (section 3.4). d) Note the MTFS planning assumptions set out in the report (section 3.5). e) Note the position relating to the UK Government Budget (section 3.6 to 3.10) and the Scottish Government Budget (sections 3.11 to 3.14). f) Note that a final budget gap, reflecting base budget work and Scottish Government funding will be presented to BTSG on Wednesday 21st January 2026. and g) Otherwise note the remainder of the report. Date: 28th November 2025 Report Contact: David Gladwin Chief Financial Officer and Section 95 Officer David.gladwin@midlothian.gov.uk Page 97 of 216
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2 Purpose of Report / Executive Summary 2.1 The report provides Council with an update on development of the 2026/27 revenue budget, building on the report presented to Council on 24th June 2025 and looking ahead to further member engagement early in 2026 culminating in Council setting a balanced budget on Tuesday 24th February 2026. 2.2 Pressure on budgets across the public sector is severe and as the fastest growing Local Authority in Scotland the impact is intensified in Midlothian. Population projections show a continued high level of growth in Midlothian through to 2043. 2.3 There is a significant underlying funding gap of 6.545 million (2% of expenditure) in 2026/27 rising to £10.131 million by 2028/29 (2.9% of expenditure) that will impact on what services the Council can continue to deliver and how they are delivered. Reprioritisation and redesign are crucial to balancing the MTFS and immediate action is needed. 2.4 Key messages from the recent UK Government budget are considered along with the impact these may have on Midlothian Council. 2.5 An updated budget position will be presented to BTSG after the Scottish Government budget in January, subsequent publication of the Local Government Finance Settlement, and base budget work is complete. 3 Medium Term Financial Strategy 2026/27 to 2028/29 - Background 3.1 The aim of the MTFS is to provide a multiyear financial strategy aligned to the Council’s Strategic Plans. It seeks to support the Council in fulfilling its statutory duty to set a balanced budget and determine Council Tax levels annually with a key aspect being ongoing financial sustainability for the Council where recurring costs are matched by recurring income. 3.2 Council last considered the MTFS on 24th June 2025 where updated projections for 2026/27 to 2028/29 were provided along with the main assumptions underlying those projections. The projected budget gap for 2026/27 was £2.452 million rising to £10.131 million by 2028/29 as shown in section 3.4. 3.3 Officers continue to progress work embedded in the Transformation Blueprint approved by Council in June 2023. Updates are provided to BTSG on a routine basis. Page 98 of 216
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3.4 MTFS Budget projections presented to Council in June 2025, for ease, are provided again in table 1 below. Table 1: MTFS Projected Gap to 2028/29 2026/27 £m 2027/28 £m 2028/29 £m Opening Budget Gap 0.000 2.452 6.466 Use of Reserves to balance the 2025/26 budget 0.163 Retrospective Service concessions 4.093 4.093 2.581 Revised Opening Budget Gap 4.256 6.545 9.047 Pay Inflation 6.531 6.727 6.929 Utilities and other Contractual inflation 2.055 1.887 1.932 Provision for School Roll Increases 1.000 1.000 1.000 Loan Charges 3.317 4.511 0.640 Reinstatement of MIJB one-off funding (1.100) Council Tax Reduction Scheme 0.549 0.532 0.359 Council Tax Band D number increase (1.120) (1.221) (1.319) Scottish Government Grant – increased share (1.065) (1.160) (1.160) Scottish Government Grant – LEIP Funding (2.404) (2.025) Other (0.588) (0.433) (0.456) Gross Gap 13.835 15.984 14.947 Full year impact of 23/24 approved savings measures (0.212) 0.000 0.000 Transformation Blueprint Savings (0.134) (0.093) Fees and Charges increase (0.350) (0.350) (0.350) Gap after savings 13.139 15.541 14.597 Council Tax Rate increase (9%, 8%, 5%) (6.594) (6.494) (4.466) Gap after Council Tax increase 6.545 9.047 10.131 Utilisation of Reserves Retrospective Service Concessions (4.093) (2.581) Budget Gap to be addressed 2.452 6.466 10.131 3.5 Projections are based on some key planning assumptions which will undoubtedly change due to economic factors, Scottish Government funding decisions, pay awards and local cost pressures. The main assumptions included in the figures above are: • Council Tax increases of 9% in 2026/27, 8% in 2027/28 and 5% in 2028/29 with corresponding increases in Council Tax Reduction Scheme payments. • Household growth in Midlothian generating additional Council Tax income. • A flat cash overall Scottish Government Grant settlement to support existing services and an assumption that any new or enhanced Scottish Government policy requirement will be fully funded. • An increasing share of Scottish Government Grant funding for Midlothian as population-based indicators continue to grow relative to other Councils with an assumption that funding floor remains at the 2025/26 level. • Pay Inflation of 3% in all years which is in line with Scottish Government public sector pay policy. This is based on the working assumption that any pay award more than this will be funded by the Scottish Government. Every 1% increase equates to a cost change of approximately £2.2 million. • A continuation of the Employers Superannuation contribution rate (excluding Teachers) at 17.6%. The next triennial revaluation is due Page 99 of 216
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in 2026 and may provide opportunity to further reduce contribution rates. • Inflation provision of 3% for contracts where inflation uplifts are an integral part. • A general provision for demographic growth in learning settings. • Borrowing costs in-line with the most up to date approved version of the General Services Capital Plan with Learning Estate Infrastructure Program (LEIP) revenue funding aligned to expected delivery timescales of supported projects. Any further approvals of capital projects, unless fully funded by grant or other external funding, will result in an increase in loan charges and possibly also infrastructure running costs from those figures shown in table 1. • Full delivery of savings measures previously approved by Council. • An increase in funding provided to Midlothian Integration Joint Board (MIJB) to cover pay increases and inflationary costs. UK Government Autumn Budget 2025 3.6 The UK Government presented their Autumn budget 2025 on Wednesday 26th November 2025. Budget policies increased borrowing in earlier years and increased a variety of taxes in later years both of which allowed the funding of some new spending commitments. 3.7 It is estimated that the budget will generate an additional £820 million of funding for Scotland. Of this, £510 million is revenue and £310 million is capital. The bulk of revenue funding is split between 2026/27 and 2027/28. The largest chunk of capital funding will be in 2027/28. 3.8 The life of the UK Shared Prosperity Fund (UKSPF) ends on 31st March 2026. It will be replaced by a Pride in Place Fund and a Local Growth Fund. To date, no funding from the Pride in Place Fund has been made available to support Midlothian projects. Whilst UK Government assurance exists that Local Growth Funding will be at the same cash level as the UKSPF there have been no specific announcements in Scotland to confirm this at the date of writing this report. The UKSPF currently supports a wide range of projects in Midlothian in keeping with the Fund’s policy objectives and criteria 3.9 The UK wide abolition of the two-child limit to universal credit may bring a net upside of around £120 million to existing Scottish Government planning assumptions to mitigate the impact of this. This would free up this funding to support other areas in the Scottish Government budget. 3.10 The phasing out of the temporary fuel duty cut of 5p has been pushed back to September 2026 and will slightly soften fuel cost projections in the MTFS. From April 2028 there will be an additional Vehicle Excise Duty of 3p a mile for electric vehicles. This will increase fleet running costs and will be reflected in MTFS projections. Page 100 of 216
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Scottish Government Budget 2026/27 3.11 The Scottish Government Budget for 2026/27 is due to be presented to the Scottish Parliament on Tuesday 13th January 2026 with the draft Local Government Finance Circular published shortly thereafter. 3.12 The draft Local Government Finance Circular will contain detail to support a clearer understanding of the impact of the Scottish Government budget on Midlothian Council. A detailed update will be provided to the Business Transformation Steering Group on Wednesday 21st January 2026. 3.13 At this stage, there remains an expectation that the Scottish Government will release indicative budget figures for financial years 2027/28 and 2028/29 which would give clearer sight on Scottish Government funding for Midlothian thus aiding Council financial planning. 3.14 Dates for the Budget Bill are still to be agreed by parliament. Provisional dates are as follows: • Stage 1 Debate – Thursday 12th February 2026 • Stage 2 Debate – Tuesday 17th February 2026 • Stage 3 Debate – Wednesday 25th February 2026. Base Budget Development 3.15 The Finance Team, supported by colleagues across the Council, have almost completed detailed work on the 2026/27 base budget. Final review work is underway. This includes a discussion at the Corporate Management Team on Wednesday 10th December to consider known financial pressures, prioritise areas of essential growth to the 2026/27 budget and review deliverability of existing savings programmes. 3.16 Loan Charges projections are being revised in line with phasing projections on existing capital projects but will need to be revised further to incorporate capital investment decisions Council make before or during the setting of the 2026/27 budget. 3.17 In recent years pay inflation has been an area of uncertainty and risk. Financial planning for 2026/27 is much more certain with existing pay agreements for all negotiating groups extending to the 31st March 2027. Expectation is that funding will flow from the Scottish Government in 2026/27 to part support ongoing costs. This will be confirmed when detailed information is made available during January 2026. 3.18 Once detailed work on the draft Finance Circular and the Base Budget is complete a draft budget position for 2026/27 will be presented to BTSG on Wednesday 21st January 2026. Page 101 of 216
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4 Reserves 4.1 The latest reserves projections are presented to Council today in the Financial Monitoring 2025/26 – General Fund Revenue report (section 5). The General Fund Reserve at 31st March 2026 is projected to be £14.391 million with £5.267 million of this non-earmarked. 4.2 The Council also hold useable reserves in the Housing Revenue Account (HRA), the Capital Account and the Repairs and Renewals Fund. All of these are fully earmarked to support planned expenditure. 5 Next Steps 5.1 Outline Timetable for the 2026/27 Budget and Setting Council Tax Council – Tuesday 16th December • Update on Base Budget work. • Update on UK Government Budget. • Update in advance of Scottish Government Budget. BTSG – Wednesday 21st January • Final Base Budget. • Scottish Government Budget. • Details of the Local Government Finance Settlement. • Transformation Blueprint reports to be considered as part of 26/27 budget setting. BTSG – Monday 9th February • Quarter 3 Financial Monitoring for 2025/26. • Fees and Charges proposals. • Consideration of final budget position for 2026/27. • Consideration of Council Tax position. • Final Local Government Finance Settlement. Council – Tuesday 24th February • Fees and Charges proposals. • BTSG recommendations on budget setting. • BTSG recommendation on Council Tax. 5.2 The scheduled meetings of BTSG and Council will support the approval of the MTFS, and decisions required to finalise the 2026/27 budget at Council on 24th February 2026. 5.3 As Council Tax funds the gap between expected income and expenditure, it is necessary to first identify the proposed expenditure to determine the resulting gap that Council Tax needs to fund. If no other action is taken to redress any shortfall, then the Council Tax has to be set at a rate that will do so, otherwise the budget will not balance. Accordingly, Council Tax decisions should not normally be taken in advance of other budget decisions. Page 102 of 216
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Midlothian Integration Joint Board 5.4 The Chief Officer and Chief Financial Officer of the MIJB will continue to be kept updated on the Council’s budget position and are engaged in the development of the MTFS. 5.5 The planning assumptions for the indicative budget to be delegated to MIJB for 2026/27 together with future years indicative allocations have been prepared based on a funding increase for pay and contractual inflation but with no demographic cost increases at this stage. However, it will only be possible to formulate a formal offer for the IJB once the annual grant settlement is available and the quantum of any additional monies for delegated activities and any conditions attached to the settlement are known. 5.6 MIJB overspent in 2024/25, are projected to overspend again in 2025/26 and are working through a financial recovery plan to bring costs back within budget. Failure to do so brings further risk to partner budgets and specifically to the Council’s reserve position. 5.7 BTSG will be asked to consider the formal offer to MIJB arising from the settlement when it meets in January 2026 and this will inform part of the final budget recommendations to Council. 6 Report Implications (Resource, Digital and Risk) 6.1 Resource Whilst this report deals with financial issues there are no financial implications arising directly from it. 6.2 Digital The adoption of digital solutions is a central strand of the Medium Term Financial Strategy. 6.3 Risk Within any financial projections there are inherent risks in making assumptions to arrive at figures and also a risk of costs changing significantly or new pressures emerging. The following key risks and issues are highlighted in the context of this report: • Uncertainly over the Scottish Government’s and Council’s financial position. • The economic outlook and decision by Scottish Government on future years grant settlements and grant distribution. • Impact of UK Government budget announcements and any associated policy revision. • The risk to service provision and service users associated with a continued decline in available resources to fund services. • Future years Public Sector pay policy and future year pay award settlements. • Actual school rolls varying from those provided for in the budget. Page 103 of 216
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• The impact of the wider economic climate on range of factors including inflation, interest rates, employment, tax and income levels and service demands. • Cost pressures, particularly those that stem directly from demographic demand, exceeding budget estimates. • The reform of public services. • The impact of any changes to benefits. • The cost of implementing national policies varying from resources provided by Government. • Potential liabilities arising from historic child abuse. • The financial sustainability of MIJB. • The affordability of borrowing to support capital investment; and • Ability to continue to meet the expectations of communities within a period of fiscal constraint. Developing and updating a MTFS is key to supporting the mitigation of a number of these risks by setting out the key assumptions on which forward plans are based. The risk of not having a balanced MTFS is the potential elimination of available reserves, which in turn would severely limit the Council’s ability to deal with unforeseen or unplanned events and also the imposition of significant cuts at short notice with limited opportunity for consultation. Early agreement of the measures required to balance the 2026/27 budget is crucial. 6.4 Ensuring Equalities The MTFS together with the resource allocation measures which will support financial sustainability will, as far as the constraint on resources allow, be developed within the context of the Council’s priorities, ensuring as far as possible that resources are directed towards the key priorities of reducing inequalities in learning, health and economic circumstance outcomes. The MTFS will continue, as far as is possible, to reflect Midlothian Council’s commitment to the ethos of the Equality Act 2010 with careful consideration of the interests of the most vulnerable in our communities through the preparation of equality impact assessments. Individual EQIA’s will be published in respect of future policy savings measures and an overarching EQIA will be published alongside the MTFS report presented to the Council meeting in February 2025. 6.5 Additional Report Implications See Appendix A Appendices APPENDIX A – Report Implications Page 104 of 216
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Appendix A A.1 Key Priorities within the Single Midlothian Plan The MTFS facilitates decisions on how Council allocates and uses its available resources and as such has fundamental implications for delivery of the key priorities in the Single Midlothian Plan. It helps ensure that resources are available to continue to delivery key priorities. A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on delivering Best Value. A.5 Involving Communities and Other Stakeholders The development of the MTFS provides for public engagement. In addition, there has been and will continue to be, engagement with the recognised Trade Unions on the Council’s financial position and the development of the MTFS. A.6 Impact on Performance and Outcomes The MTFS facilitates decisions on how the Council allocates and uses its available resources and as such has fundamental implications for service performance and outcomes. The financial consequences of the pandemic have impacted on the availability and allocation of resources in pursuit of key outcomes as set out in the Single Midlothian Plan for both the immediate and longer term and therefore the ability of the Council to continue to deliver services in a financial sustainable manner. Page 105 of 216
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A.7 Adopting a Preventative Approach An effective Strategic plan supported by a MTFS will support the prioritisation of resources to support prevention activities. A.8 Supporting Sustainable Development There are no direct sustainability issues arising from this report and work will take place to mitigate any sustainability issues which arise as a consequence of the MTFS. Page 106 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.6 Midlothian School Admission Policy Report by Derek Oliver, Executive Director Children, Young People and Partnerships (Acting) Report for Decision 1 Recommendations Council is recommended to approve the following: • Agree to the revised admission to primary and secondary schools priority groups for denominational schools as set out in paragraph 3.3 of this report; • Agree to carry out a statutory consultation on Midlothian Council’s Admission Policy for Primary and Secondary Schools based on the above priority groups to commence early 2026; and • Agree that all of the above recommendations are subject to the outcome of engagement with East Lothian Council with regard to the additional and quantifiable education costs associated with Loretto RC PS pupils accessing St David’s RC HS for secondary denominational education. 2 Purpose of Report At full Council 9th September, elected members agreed to remit to Midlothian Council’s Education and Children’s Services Cross Party Group to develop the detail of further statutory consultation on the admissions policy and bring back to the next Council for approval. The Council’s Religious Representative was also to be co-opted onto the Cross Party Group on this matter. This report sets out the agreement reached by the Education and Children’s Services Cross Party Group, in conjunction with the Council’s Religious Representative and Headteacher, St David’s RC HS and as directed is being brought back to Council for approval. Date 20TH November 2025 Report Contact: Education Chief Operating Officer Name Michelle Strong Tel No michelle strong@midlothian.gov.uk Page 107 of 216
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3 Background 3.1 At full Council 9th September 2025, elected members considered a report on the outcome of the statutory consultation to vary admissions to Midlothian primary and secondary schools. Midlothian Council considered fully the extent of views expressed by respondents to the consultation and the recommendations set out in the Council report (School Admission Policy Consultation report to September 2025 Council). Elected members approved the following recommendations: i. Agree that the revised School Admissions Policy will take effect from September 2025. ii. Agree to maintain the current arrangements as set out in paragraph 11 for the admission of pupils attending Loretto Roman Catholic (RC) Primary School which entitles them to attend St David's RC High School as their catchment denominational high school. Subject to recommendation iii being agreed with East Lothian Council and subject to consultation. iii. Instruct the Executive Director Children, Young People and Partnerships to take steps to recover the costs of school education and any ancillary costs on an ongoing basis from East Lothian Council for former Loretto RC Primary School pupils attending St David’s RC High School from August 2025. iv. Instruct the Executive Director Children, Young People and Partnerships to take forward a) as set out below and any legally required steps, including carrying out any necessary statutory consultation (Ensuring that any statutory consultation provides clarity i) as to the catchment area of St David’s RC High School and ii) the basis of admission to St David’s RC High School): a) set aside any existing agreements or arrangements, and enter into a new agreement with East Lothian Council setting out the basis of admission, including any priority given within the admission policy for pupils of Loretto RC Primary School who wish to attend St David's RC High School; with the instruction that any arrangement/agreement does not disadvantage Midlothian Catholic children and promotes the Roman Catholic ethos of St David’s RC High School v. Remit to Midlothian Council’s Education and Children’s Services Cross Party Group and co-opt the Council’s Religious Representative to the Cross Party Working Group to develop the detail of the consultation and bring back to the next Council for approval. 3.2 The Education and Children’s Services Cross Party Group members consulted their respective political group members on the proposed priority groups for admission to Midlothian’s denominational schools. The priority group list was agreed at a special Cross Party Group meeting held 18th November 2025 at which the Council’s Religious Representative and Headteacher, St David’s RC HS were present. As set out in the Schools Consultation Act (2010) a further statutory consultation will be required on the revised proposed priority groups and a report on the outcome of the consultation brought back to council for consideration. The statutory consultation will also include clarification on St David’s RC HS catchment area. Page 108 of 216
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3.3 The proposed priority groups for admission to Midlothian’s denominational schools are as follows: • Midlothian children complex needs provision class allocated by the Education Resources Group • St David’s RC HS catchment exceptional circumstances • St David’s RC HS catchment Roman Catholic with sibling • St David’s RC HS catchment Roman Catholic no sibling • Loretto RC PS catchment Roman Catholic with sibling • Loretto RC PS catchment Roman Catholic no sibling • St David’s RC HS catchment not Roman Catholic with sibling • Loretto RC PS catchment not Roman Catholic with sibling • All remaining St David’s RC HS catchment children • All remaining Loretto RC PS catchment children • Non- St David’s RC HS catchment children 3.4 Midlothian Council instructed the Executive Director Children, Young People and Partnerships to take steps to recover the costs of school education and any ancillary costs on an ongoing basis from East Lothian Council for former Loretto RC Primary School pupils attending St David’s RC High School from August 2025. The Executive Director has written to East Lothian Council to progress discussions on known additional and quantifiable costs attributed to Loretto RC PS pupils accessing St David’s RC HS for secondary denominational education. 3.5 Midlothian Council agreed on 9th September to maintain the current arrangements for the admission of pupils attending Loretto RC Primary School which entitles them to attend St David's RC High School subject to East Lothian Council reimbursing Midlothian Council for associated additional education and ancillary costs. Therefore, it is anticipated that East Lothian Council’s decision on funding additional costs will be presented to Midlothian Council for consideration February 2026. 4 Report Implications (Resource, Digital and Risk) 4.1 Resource If all of the recommendations are approved there will be no additional resources required and education recovery costs will mitigate additional costs arising directly from Loretto RC PS pupils accessing St David’s RC HS for denominational secondary education. 4.2 Digital None 4.3 Risk The education authority has to comply with duties set out in Scottish legislation including the Education (Scotland) Act 1980 and The Education (School Placing Information) Regulations 2012 which set out the statutory duty on an education authority to publish its arrangements for the placing of all children in its schools, whether the child lives within Midlothian or outwith, and formulate guidelines to be followed with regard to placing in schools or if necessary in any particular school in the event of there being more placing Page 109 of 216
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requests made than there are places available. The proposed variation to priority groups for admission, subject to the outcome of statutory consultation will mitigate any risk to the local authority of not fulfilling its statutory duties. 4.4 Ensuring Equalities An Integrated Impact Assessment will be carried out and published if the recommendations set out in this report are approved and a statutory consultation is carried out. Appendices Appendix A – Additional Report Implications Appendix B – Background information/Links Page 110 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan Midlothian will get it right for every child. Services are designed to ensure the rights of every child and young person in Midlothian will be upheld, as UNCRC is fully embedded into daily practice and processes. A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based x Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable x Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The implementation of the recommendations set out in this report will enhance best value in the delivery of Council services. A.5 Involving Communities and Other Stakeholders Communities and stakeholders will be invited to respond to any statutory consultation to be carried out subject to approval of recommendations set out in the report. A.6 Impact on Performance and Outcomes The report does not impact directly on Midlothian Council’s performance and outcomes. A.7 Adopting a Preventative Approach Not applicable A.8 Supporting Sustainable Development Not applicable Page 111 of 216
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APPENDIX B Background Papers/Resource Links School Admission Policy Consultation report to September 2025 Council Page 112 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.7 Attainment Update for Midlothian in Primary and Secondary Schools Report by Michelle Strong, Chief Education Officer Report for Information 1 Recommendations • To note the significant progress, strengths and improvements in our children and young people's attainment in both primary and secondary schools as outlined in this report. • To note and acknowledge the strategies adopted to address areas for continuous improvement outlined in this report. • To congratulate all pupils, parents/carers and staff on the improvements in attainment during session 2024/5. 2 Purpose of Report/Executive Summary The purpose of this report is to present the annual update on attainment for Midlothian’s children and young people on two key datasets: Achievement of Curriculum for Excellence Levels (ACEL) and Senior Phase Insight update. These two dataset updates provide important indications of the attainment of our children and young people at various stages from P1 to S6. This report highlights the successes and challenges at various points, along with plans to address these and ultimately improve the outcomes for all our children and young people. The stretch aims for Midlothian Council for the period to 2026/27 are also presented here as part of the Scottish Governments programme for raising attainment. 18 November 2025 Report Contact: Michelle Strong, Education Chief Operating Officer Michelle.Strong@midlothian.gov.uk Page 113 of 216
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3 Background 3.1 The purpose of this report is to present the current position, trend outlook and comparison to national and comparator performance for our children and young people’s attainment in Midlothian. The report will examine two core sets of data to highlight areas of strength and improvement in our primary and secondary schools. Including both sets of data allows analysis of the whole school journey which will be important to monitor, track and analyse going forward to have a robust understanding of how children and young people are performing and how we can support improvements to enable them to reach their full potential. 3.2 The first set of data to be examined is the Achievement of Curriculum for Excellence Levels (ACEL) update for 2024/5. This data set compares our current performance versus the national and comparator levels for 2023/4, as the statistical summary for Scotland and other local authorities will be published mid, December 2025. The statistical summary provides information on the proportion of school pupils who have achieved the expected Curriculum for Excellence (CfE) Levels in literacy and numeracy relevant to their stage. The data is based on teachers' professional judgements for the percentage of pupils who have achieved the expected CfE levels in reading; writing; listening and talking; and numeracy in all Primary 1 (P1 - Early Level), Primary 4 (P4 - First Level), Primary 7 (P7 - Second Level) and Secondary 3 (S3 - Third Level) pupils in mainstream schools. Further information on the Broad General Education and Curriculum for Excellence can be found here. 3.3 The second set of data is extracted from the Insight Senior Phase Benchmarking Tool which was updated in September 2025. Insight is the professional benchmarking tool for analysing attainment data in the senior phase, accessible by secondary schools and local authorities. It is designed to support improvement within schools and for young people in S4 to S6. There are two releases of Insight per year, the first of which is in September and provides year group-based attainment data for previous sessions. The second February update adds initial leaver destinations data for those who left school in the previous academic year, which allows for analysis of data on cohorts of young people at the point of exit from the Senior Phase. This report will cover the annual cohort level update for session 2024/5. 3.4 As part of the Scottish Attainment Challenge, local authorities set ambitious, achievable stretch aims for progress in overall attainment and towards closing the poverty-related attainment gap in each academic year. Stretch aims are targets we are aiming for in relation to learner attainment in literacy and numeracy, positive destinations, attendance and participation. These are embedded within the Education Service plan and school improvement plans and are shared annually with Scottish Government as part of the statutory plan and reporting process. Progress throughout the session is monitored by the central Quality Improvement Team working with their link schools. Schools receive support if needed to work towards their stretch aims. Detail on our stretch aims can be found in Appendix B. 4 Attainment Summary 4.1 Appendix B presents a more detailed summary of the attainment from the ACEL update. The following key messages provide some detail on children and young people’s attainment: Page 114 of 216
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4.1.1 ACEL – Literacy & Numeracy There have been significant improvements across the board in both primary and secondary settings, for pupils achieving expected CfE levels in P1, P4, P7 and S3. In almost all cases, the figures for 2024/5 are the best on record, since the resumption of the collection of ACEL data in 2021-22. The most noticeable improvements have been in Literacy for P4, P7 and S3. Improvements have also been made in terms of closing the poverty-related attainment gap, with all literacy and numeracy measures closing and exceeding the stretch aim for 24/25. 4.1.2 Insight a. Literacy & Numeracy There have been significant improvements in S4, with Level 5 figures the highest over the five-year period. Almost all measures are significantly much greater than the Virtual Comparator (VC). In S5 there have been year-on-year improvements since 2022 for Numeracy at Levels 5 and 6. Most other figures are in line with the VC. In S6, the figures for Numeracy Level 5 and 6 are the highest over the five-year period. Figures are all in line with the VC. b. Improving Attainment for All For almost all measures, figures are in line with the VC. c. Breadth & Depth Overall, S4 shows an improving picture, with figures comparing well to the VC. In S5, the figures are broadly in line with the VC. The significant improvements since 2023 have been consolidated. The figures for S6 are the highest over the five-year period. d. Gap Measures There is evidence of closing the poverty-related attainment gap for most measures, compared to 2024. In S4 of pupils in receipt of free school meals was the highest it has been in in 5 years. In S6 there was a significant reduction in the gap compared to the previous year. 4.2 In summary there have been considerable improvements in performance across most measures. The most significant improvements are in Literacy/Writing in P4, P7 and S3, and also in the performance of S4 pupils in most areas. There are however some areas to address in the coming session: addressing the slight decrease in Listening & Talking in P1; consolidating the improvements in S4 as pupils progress into S5; and supporting the highest-attaining 20% in S6 to achieve better quality passes. These are being addressed as set out in the education service plan. 4.3 Education priorities and developments to support raising attainment Throughout 2025/26 education services, schools and settings are focused on a single priority to address improvements to attainment across our schools. This priority is “We will raise attainment and achievement to ensure that all children and young people in Midlothian achieve outcomes which lead to positive and sustained destinations.” Page 115 of 216
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The Service Improvement Plan has two main workstreams. This gives clear direction to all activity around raising attainment. The workstreams are; 1 Inclusive Learning, teaching, assessment & curriculum (iLTAC) 2 Wellbeing, Support and Partnerships (WSPs) The Excellence and Equity Board, chaired by the Education Chief Operating Officer, holds workstream leads and data and performance lead to account at termly meetings. Raising Attainment Strategy • In 2025-2026 we will continue to engage schools with the Raising Attainment strategy. The impact of the strategy will be closely monitored by the Excellence & Equity Board. There has been a continued focus on the use of data for raising attainment and an attainment data timeline ensures regular, robust data focused action at system level. • Associated School Groups (ASGs) have focussed on joined up approaches to monitoring and promoting good attendance in school. There are refreshed approaches to reporting poor attendance to parents and explaining why attendance is linked directly to attainment and achievement. Inclusive Learning, Teaching, Assessment and Curriculum • The Learning, Teaching and Assessment (LTA) and Curriculum Strategies were co-constructed by a subgroup of school leaders and central officers and combined to form the draft Learning, Teaching, Assessment & Curriculum Strategy Paper. All senior leadership teams across our schools have engaged with the strategy paper which is now in use in our schools. • Midlothian Inclusive Learning, Teaching and Assessment Framework has been launched this session. It has also been informed by research and extensive consultation with stakeholders. The Framework outlines the key features of highly effective and inclusive, learning, teaching and assessment. The Framework will be used by schools to improve inclusive learning, teaching and assessment where this is required. The Framework will also support our work to raise attainment, through effective and inclusive, learning, teaching and assessment. Professional Learning has been designed to support the use of the framework. Moderation to support teacher judgements • Every Midlothian primary school is being supported to effectively moderate teacher professional judgements. This activity is focussed on ensuring increasing confidence in learners’ achievement of curriculum for excellence levels of attainment that are submitted annually to Scottish Government. This support is being provided by Local Authority officers building capacity through upskilling key staff in each school. • There is greater confidence that schools' attainment data is more accurate. Data clinics in primary schools have supported this work. Strengthen Leadership of inclusive Learning, Teaching and Assessment • Working with our national partner Education Scotland, secondary middle leaders have been offered “Self-evaluation for Continuous improvement” professional learning and ongoing support. All secondary schools have participated. • The secondary middle leaders’ network will focus on what very good Learning Teaching & Assessment looks like and on how to quality assure from the middle in a secondary school. • The primary middle leaders’ network will continue to focus on school improvement from the middle, including how to raise attainment. Page 116 of 216
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Development of curriculum • Key staff have been identified and are attending national groups to support implementation of national refreshed literacy and numeracy guidance 3-18. • Pilot 3-18 curriculum pathway projects within ASGs are underway (e.g. Construction & Engineering Pathway, Creative Industries Pathway) for all learners. • Pilot ASG BGE projects are established and progress being reviewed with ASG leads, including introduction to industry partners to support co-creation of curriculum pathways. • Work is continuing with NHS Education and NHS Lothian colleagues around NHS careers pathway. • Lead Teachers are in place and have reviewed and intervened where necessary to ensure appropriate coursing and completion of weekly reviews of trackers. Learner & Parental Engagement • Pupil Leadership Conferences took place for primary and secondary learners in September to launch the new pupil voice structure with plans set out for engagement across the year. In November, pupil representatives met to confirm the improvement priorities they wish to see taken forward. A Youth Cabinet meeting with political leaders is planned for November and December to progress pupils’ priorities. Pupils are asked to consider how we can support them to achieve their best. • Parent Council Chairs meetings have been relaunched in September using a new format suggested by the Chairs. There are meetings scheduled across the year to listen to the views of parent councils. This will strengthen the partnership with our families and enable us to hear all views about how best to support young people to achieve their best. • The design of a website for families with information relating to Neuro-diversity has begun. Support from the Raising Attainment Team • The raising attainment team prioritise work in primary schools with the lowest attainment and/or schools who are in the improvement QI category. Numeracy attainment in P7 improved by 15% (average) in RA schools since June 24. • A “Core Numeracy” programme has been established with support of the Raising Attainment team, which is a universal offer open to all teachers in Midlothian centred around the development of Midlothian core Numeracy principles. • The raising attainment team continues to work alongside teachers and school leaders to improve inclusive learning, teaching and assessment in our Improvement category schools. The team’s work was highlighted positively in recent school inspections. Data Development • Primary Schools have 4 tracking periods per year where they report each child’s achievement levels. The analysis of this data provides each school’s attainment levels. Using this data, the link officer for each school provides support and, where required, challenge for each school. This data helps determine which category each school falls into (Core, Enhanced or Improvement). • The Data and Performance group have monitored progress and ensured systematic gathering, recording, analysis and sharing of data. • Primary data dashboards and robust tracking and monitoring process is in place in all primary schools allows all primary HTs to make data informed decisions relating to attainment and interventions. Page 117 of 216
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• Work is underway to scope secondary data dashboards that meet the data needs of secondary schools. • Attainment meetings have been held with all secondary Headteachers (in trios) with elected Councillors and senior officers present and a summary of next steps shared to support improvement. Professional Learning & Staff Support • There is a comprehensive professional learning offer available to all staff that includes, for example, “Let’s Talk About…” sessions focussed on improving inclusive learning, teaching and assessment. Almost all schools are engaging with the extensive professional learning offer. • Our Professional Learning website has been redesigned and relaunched to make it easier to access training by specific job role as well as by topic. A major focus is further development of leadership in our schools. • Almost all schools have engaged with Inclusive Learning, Teaching & Assessment self-evaluation resources and identified next steps for improvement. • Most schools shared training material on the in-service day with a focus on our newly launched Inclusive LTA Framework, which will strengthen universal approaches to inclusive learning, teaching & assessment across our schools. Remaining schools will carry out this training prior by the October break. • Teachers have access to Midlothian Literacy & Numeracy Frameworks that support the improvement of learning, teaching, assessment and raising attainment. A comprehensive learning plan is in place for the Literacy and Numeracy Champions who represent every school in Midlothian. • A deep dive into QI 3.1 Ensuring Wellbeing, Equity & Inclusion will take place across the Midlothian school system in Autumn 2025. The findings from these quality improvement visits will further inform how we support and challenge schools. • A Play Pedagogy network has been set and all schools involved have audit materials to support development of play pedagogy in their school. • Dyslexia guidance shared with a Professional Learning offer to support school staff being rolled out. • The new Relationships for Learning policy launched across Midlothian settings in August 2025. A self-delivery in-service has enabled all schools to highlight the key principles and practices set out in the policy in a consistent way. New resources have arrived in all schools and ELCs to support relational practice. Almost all schools participated in Relationships for Learning Community of Practice along with partners, to support implementation of the policy, and build skills and capacity in more targeted relational practice. Feedback on the usefulness of the Community of Practice has been 100% positive. • Safe, Connected and Ready to Learn professional learning programme was created to strengthen the trauma-informed relationships that promote learning and wellbeing across educational settings. • Midlothian guidance has been drafted based on the national guidance with engagement with school staff and Trade Union representatives. Work is ongoing to finalise the guidance and identify the professional learning and support to support implementation. • Practice guidance is in draft for post incident support with plans to review and further develop with school leads. • Strengthened professional learning for schools to support inclusion and attainment through the launch of My Predictable Day and plans for use of SCERTS as framework for assessment and intervention. Page 118 of 216
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Quality Improvement • The Quality Improvement Framework has been updated in consultation with school leaders and trade unions. There is proportionate support and challenge provided for schools, depending on which improvement category they have been placed in (Core, Enhanced or Improvement). • QI visit activity focuses on identified improvement and enhanced schools with detailed evaluative reports shared to support improvement. • When schools require more support or challenge, this is provided by the Quality Improvement Team. • QI 3.1 (Ensuring Wellbeing, Equity and Inclusion) visits started in September for all Enhanced and Improvement schools. Core school Headteachers will use our QI 3.1 self-evaluation materials to carry out quality assurance of this QI. These visits will measure the quality of this QI in our schools. The findings of these visits will inform our next steps in support and challenge for schools. • Middle leaders’ quality improvement and quality assurance approaches are this year’s focus for our leadership networks and professional learning. • Midlothian Council and three of our national partners (Scottish Borders Council, Highland Council/ Comhairle na Gàidhealtachd and Stirling Council) form one of the new National Improvement Framework “Quads”. The Quads support and challenge each other to improve. Midlohitan key staff have already visited Stirling Council and attended Quad meetings to share learning, agree an action plan and areas for collaborative improvement activity. This work continues throughout 2025- 2026. Developing a Digitally Skilled Workforce • As of 30 August, 350 teachers are now engaging in a generative AI tool in education pilot, negotiated through the Equipped for Learning project. This is an increase of 79 teachers since June 2025. • Six secondary schools are engaging with an AI research product to explore how this technology can reduce workload for leadership teams and streamline school improvement work. • In August 2025, 107 staff engaged with annual digital safeguarding training, representing 100% of Midlothian’s schools. • Consultation with ASN teams and multiagency partners in September 2025 resulted in agreement that provision classes will be allocated five shared devices to best support communication work for young people. • Onboarding meetings were held in September 2025 with four Midlothian schools engaging with a research project to understand the impact of digital tools on learning, teaching and assessment. • 1,018 Primary 3 pupils have undertaken a three-week package of in-class digital support, designed to support them to use Chromebooks safely and with purpose. 5 Report Implications 5.1 Resource There are no resource implications for this report. Page 119 of 216
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5.2 Digital Not applicable. 5.3 Risk Not applicable. 5.4 Ensuring Equalities (if required a separate IIA must be completed) Not applicable. 5.5 Additional Report Implications See Appendix A Appendices Appendix A – Additional Report Implications Appendix B – Attainment Summary Page 120 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan This will work towards the key priority of reducing the gap in learning outcomes. A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The delivery of this plan with assist the council in meeting its best value duties. Most notably in the following Best Value themes: Governance and Accountability; Effective use of resources and partnerships and collaborative working. A.5 Involving Communities and Other Stakeholders Not applicable. A.6 Impact on Performance and Outcomes The content in this report and the continuous improvement to support improvement in attainment for all young people will assist in improving performance and outcomes for the council. A.7 Adopting a Preventative Approach Not applicable. A.8 Supporting Sustainable Development Not applicable. Page 121 of 216
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APPENDIX B Attainment Summary Broad General Education: Achievement of Curriculum for Excellence Levels The tables in this section show the percentage of pupils achieving the appropriate CfE level (or better) for their stage. The change in Midlothian’s figures from 2024 to 2025 are shown, with colour added to show the level of change, from dark green for improvements of 5 percentage points and above, to dark red for decreases of more than 5pp. For context, national figures are given, as well as the average figures for Midlothian’s Local Government Benchmarking Framework (LGBF) “family group”. Note that 2025 figures have yet to be published. More detail on the this can be found here. Literacy is a combined measure of all literacy components, i.e. pupils must achieve all three components: Reading; Writing; and Listening & Talking (L&T) in order to achieve the overall Literacy level. Table 1: Percentage of primary school pupils (P1/P4/P7 combined) achieving expected CfE levels in Literacy and Numeracy There is a clear improving trend for Literacy and Numeracy, with the 2025 figures the best over the five-year period. The increases for both measures in 2025 compared to 2024 are also the most significant improvements over one single year for the period. We would anticipate that the 2025 figures will be above the LGBF and national averages, when they are published (assuming that current trajectories have been maintained within LGBF and nationally). Page 122 of 216
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Table 2: Percentage of primary school pupils in P1 achieving expected Early Level in Literacy and Numeracy, including components of Literacy The figures for P1 in 2025 are the best on record, with the exception of the slight decrease for Listening & Talking. The biggest improvements overall are for Literacy overall and Numeracy. We would anticipate having closed the gap somewhat between Midlothian and both the LGBF average and national figures, once these are published Table 3: Percentage of primary school pupils in P4 achieving First Level in Literacy and Numeracy, including components of Literacy The improvements in P4 are the most significant across all primary year groups. The largest increases are for Literacy overall, followed by Writing. Ther 2024 figures were roughly in line with LGBF/national so we would expect to be comfortably above both in 2025, given the scale of these improvements. There is a clear improving picture over time for all measures. In session 2024-25 there was a focus on Literacy – in particular, Writing – as an area for improvement in P4 and P7, which was supported by professional learning sessions. It is therefore very encouraging to see the impact that these sessions had on pupil attainment in this area. Page 123 of 216
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Table 4: Percentage of primary school pupils in P7 achieving Second Level in Literacy and Numeracy, including components of Literacy Once again, there are clear and noticeable improvements in P7 and the 2025 figures are the best they have been over the five-year period. As with P4, the biggest improvements are for Literacy overall and Writing. The rate of improvement is the best we have seen since 2022. If we can sustain this rate of improvement, we would expect to be in line with LGBF/national in due course. As with P4, it is encouraging to see the impact which targeted training has had on pupil achievement in Literacy/Writing in particular. Page 124 of 216
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Table 5: Percentage of secondary school pupils in S3 achieving expected CfE levels in Literacy and Numeracy, including components of Literacy (Note: CfE levels in S3 were not reported on in 2021.) Once again, all measures are the highest they have been over the five-year period and we are able to celebrate significant improvements for all measures, with the biggest improvements evident in the Literacy components. Third Level Numeracy has consistently been above LGBF and national figures and we are confident that this will remain the case for 2025. The Literacy figures for 2025 are above LGBF/national for 2024 so we are hopeful that we will be in line with them for 2025. Should our rate of improvement continue, we would expect to be above both in due course. Page 125 of 216
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Gap measures using FSM The attainment gap in the table below is shown as a differential of the percentage of pupils attaining their expected level in receipt of free school meals versus those not in receipt of free school meals (FSM). Note that FSM is used as the measure of deprivation to give a more representative spread across Midlothian and the fact that SIMD is not an effective measure in all areas of the authority. Note also that there is no comparable data currently available nationally and for other authorities to allow us to look at how Midlothian compares. The gap has closed for all measures, with the biggest improvements in Primary Literacy and Numeracy. The gap has closed year-on-year for S3 measures. Note that the gaps are lower for Numeracy than Literacy. Page 126 of 216
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Senior Phase Insight The Insight analytical tool allows schools and Local Authorities to compare their performance using a Virtual Comparator (VC). The VC for Midlothian is made up of pupils from schools in other Local Authorities who have similar characteristics to the pupils in Midlothian. For most measures, Insight applies statistical significance testing to identify areas where performance is noticeably greater than or lower than the VC. Note that in all tables in this section, S5 data is calculated on the basis of the S5 roll, and similarly S6 is based on S6. Literacy & Numeracy Colour added if above/below VC according to Insight: Commentary: In S4, the figures for Level 5 Literacy and Numeracy are the highest they have been over the five-year period. All measures have increased compared to 2024 and five out of the six measures are significantly much greater than the Virtual Comparator. In S5 there have been year-on-year improvements since 2022 for Numeracy at Levels 5 and 6. There have been slight drops in some other measures but these are in line with the corresponding figures for the same cohort in S4 in 2024. Most figures are in line with the VC. In S6, the figures for Numeracy Level 5 and 6 are the highest they have been over the five- year period. Figures are all in line with the VC. Page 127 of 216
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Improving Attainment for All Improving Attainment for All is a benchmarking measure which calculates an average “complementary tariff score” for the lowest 20%, middle 60% and highest 20% in each cohort. The complementary tariff score measures a student's attainment by calculating the points from (in most cases) their top five "best" qualifications, regardless of the number of subjects or qualifications taken. It is designed to provide a more consistent comparison of pupil performance across different schools and local authorities, irrespective of their specific curricula. More information on the scores assigned to each qualification can be found here. Colour added if above/below VC according to Insight Commentary: In S4, figures have been in line with the VC for the last three sessions. The average complementary tariff score for the middle-attaining 60% is the highest it has been over the five-year period. The figure for the lowest 20% has increased from the drop in 2024 and the highest 20% remains strong. In S5, figures have been in line with the VC for the last four sessions. The figure for the middle 60% is the highest since 2021, and the highest 20% increased after the drop in 2024. In S6, figures for the lowest-attaining 20% and middle 60% remain in line with the VC and show improvement on 2024. However, the score for the highest 20% is significantly lower than the VC for the first time. Internal analysis suggests that the difference is due to the quality of passes which young people in S6 are achieving. Page 128 of 216
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Breadth & Depth Colour added if above/below VC by more than 5% or 10% Commentary: Overall, S4 shows an improving picture, with the percentage of young people achieving 2, 3, 4 and 5 or more awards being the highest they have been over the five-year period. The biggest increases are for 4 and 5 or more awards. In 2021, just under 50% of S4 pupils achieved 5 or more awards at SCQF Level5, and this has now increased to just over 60%. Figures compare well to the VC. In S5, the figures are broadly in line with the VC. The significant improvements since 2023 have been consolidated. The figures for S6 are the highest they have been over the five-year period, in line with the gains made in S5 in 2024. There is an improving trend over time for most measures. The figures have been above the VC, sometimes significantly so, for the past two sessions. Page 129 of 216
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Gap Measures using FSM Commentary: In S4, the percentage of pupils in receipt of Free School Meals who achieve 3 or more awards at SCQF Level 5 or better, was the highest it has been over the five-year period (43%). The gap between the figures for FSM and non-FSM decreased for both measures, compared to 2024. The gap in S5 reduced by roughly 3 percentage points for 1 or more awards at Level 6, but increased by roughly 3 percentage points for 3 or more awards. In S6, the gap for 1 or more awards at Level 6 was the smallest it has been over the five-year period (roughly 15 percentage points), a significant reduction compared to the gap in 2024. There was also a slight reduction of the gap for 3 or more awards at Level 6. Page 130 of 216
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Stretch Aims 2025 with trajectory to 2026/27 Attainment for all Poverty Gap (PRAG) Broad general Education On track to meet SA On track to meet SA P1/P4/P7 literacy combined Oct 25: 76.6% 26/27 SA: 75% June 26: 22.6% 26/27 SA: 19% • The overall stretch aim for 26/27 (75%) has been exceeded by 1.6% (76.6%) • The quintile 1 stretch aim for 26/27 (61.5%) is not on track by 2.4% (59.1%) • The quintile 5 stretch aim for 26/27 (80.5%) has been exceeded by 2.7 % P1/4/7 numeracy combined Oct 25: 80.2% 26/27 SA: 82% June 26: 16.48% 26/27 SA:15% • The overall stretch aim for 26/27 (82%) and is not on track by 0.8% (80.2%) • The quintile 1 stretch aim for 26/27 (69%) and is not on track by 2.6% (66.4%) • The quintile 5 stretch aim for 26/27 (84%) and has been exceeded by 2.1% (86.1%) Senior Phase (All SCQF awards) 1 or more award at SCQF Level 5 Feb 25: 86.18% 24/25 SA: 89% Feb 25: 21.38% 24/25 SA: 23.5% • The 2023/24 overall figures published in Feb 2025 indicate the 2023/24 stretch aim of 87% has not been met by 0.82% • The quintile 1 (numbers are low) stretch aim for 24/25 (70%) has been met and exceeded by 5.51% (75.51% in 2023/24) • The quintile 5 stretch aim for 24/25 (93.5%) has been met and exceeded by 3.39% (96.89% in 2023/2 • The stretch aim of 23.5% for the PRAG has been met and exceeded by 2.12% based on 23/24 figures. • The stretch aim of 23.5% for the PRAG has been met and exceeded by 2.12% based on 23/24 figures. 1 or more award at SCQF Level 6 Feb 25: 62.61% 25/26 SA: 66% Feb 25: 40.19% 25/26 SA: 41% • The 2023/24 overall figures published in Feb 2025 indicate the 2023/24 stretch aim of 64% has not been met by 1.39% (62.61%) • The quintile 1 (numbers are low) stretch aim for 24/25 (42%) has been met and exceeded by 2.90% (44.90% in 2023/24) • The quintile 5 stretch aim for 24/25 (84%) has been met and exceeded by 1.09% (85.09% in 2023/24). • The stretch aim of 41% for the PRAG has been met and exceeded by 0.81% based on 23/24 figures. Attendance (All) Attendance (Primary) Q2 Sept: 94.76% 26/27 SA: 95% Attendance (Secondary) Q2 Sept: 88.90% 26/27 SA: 90% ACEL S3 ACEL S3 literacy June 25: 89.7% 25/26 SA: 91% June 25: 16.5% 26/27 SA 24.5: % ACEL S3 numeracy June 25: 93.9% 25/26 SA:93% June 25: 8% 26/27 SA:17.5 % ACEL S3 literacy • The overall stretch aim for 25/26 (91%) is not on track by 1.3% ACEL S3 numeracy • The overall stretch aim for 25/26 (93%) is on track by 3.9% Page 131 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.8 Pre-Election Publicity Guidance Report by Dr Grace Vickers, Chief Executive Report for Information 1 Recommendations The Council is asked to note the terms of the Council’s Pre-Election Publicity Guidance in advance of the forthcoming Scottish Parliament Election. 2 Purpose of Report/Executive Summary The purpose of this report is to update Members of the terms of the Council’s Pre-Election Publicity Guidance which has previously been approved to ensure that Council facilities are not used to support any particular political party in any election, by-election or referendum. The report also asks Members to note the transitional arrangements for Meetings of the Council and Committees during the pre-election period. Date 17 November 2025 Report Contact: Alan Turpie, Legal and Governance Manager alan.turpie@midlothian.gov.uk Page 133 of 216
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3 Background/Main Body of Report 3.1 Local authorities are prohibited by section 2 of the Local Government Act 1986 from publishing any material which appears to be designed to affect public support for a political party. Publicity is defined very widely. It includes ‘any communication, in whatever form, addressed to the public at large or to a section of the public.' The Council also has duties under common law to taxpayers which prohibit the use of public funds and the activities of Council officers where the Council is not fulfilling its statutory functions. With some limited exceptions specified in the Guidance, any support given to political parties or election candidates is very likely to breach this obligation. For the avoidance of doubt, it should be noted that these duties apply at all times but the implementation is particularly sensitive during the pre-election period. 3.2 The date of the next Scottish Parliament Election must be no later than 07 May 2026 and the Scottish Parliament will be dissolved on 09 April 2026. 3.3 The Council has some discretion when the pre-election period starts but it cannot be later than the publication of the Notice of Election. The Convener of the Electoral Management Board has directed that all Notices of Election be published on Monday 16 March 2026. Given the sensitivity of actions prior to an election, it is intended that the Council enter the pre-election period shortly before that date on Friday 13 March 2026. The pre-election period will then run to close of poll. 3.4 The Guidance is as attached as Appendix B to this report and members are referred to that Appendix for its terms. 3.5 The Guidance should not prevent Councillors from carrying out their Council duties during that time nor in using Council facilities to do so; rather it Is the use of Council facilities to effect support for any party or candidate that is to be prevented. 3.6 The Midlothian Council area will be split between the Midlothian North constituency and the Midlothian South, Tweeddale and Lauderdale constituency which will be administered by Scottish Borders Council. The Guidance however covers the use of all Midlothian Council facilities and will therefore apply regardless of Constituency. 3.7 Members will be aware that the election team have relocated to Normandy Court as part of the Midlothian House decant and that the Council Chamber will be required for electoral purposes prior to the election. Whilst efforts have been made to minimise the length of time the Chamber will be required, nevertheless the Chamber will not be available for meetings from 13 April 2026 to the close of poll. Accordingly, the following meetings will require to be held remotely during that period: Page 134 of 216
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• Cabinet - 21/04/2026 • Business Transformation Steering Group – 23/04/2026 • General Purposes Committee – 28/04/2026 • Planning Committee – 28/04/2026 • Performance Review and Scrutiny Committee – 05/05/2026 • Midlothian Integrated Joint Board Development Session - 07.05.2026 It is proposed that meetings will return to Normandy Court following the conclusion of the Election, commencing with the Local Review Body on 11th May 2026. 4 Report Implications (Resource, Digital and Risk) 4.1 Resource There are no resource implications arising from this report. 4.2 Digital There are no digital implications arising from this report. 4.3 Risk There is risk in relation to the Council’s reputation if the Guidance is not fully adhered to during the pre-election period. 4.4 Ensuring Equalities (if required a separate IIA must be completed) This report does not recommend any change to policy or practice and therefore does not require an Equalities Impact Assessment. 4.5 Additional Report Implications See Appendix A Appendices Appendix A – Additional Report Implications Appendix B – Pre-Election Period Guidance Page 135 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan Not applicable A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The report does not directly impact on Delivering Best Value A.5 Involving Communities and Other Stakeholders The report does not directly relate to involving communities A.6 Impact on Performance and Outcomes The report does not directly impact on Midlothian Council’s performance and outcomes A.7 Adopting a Preventative Approach Not applicable A.8 Supporting Sustainable Development Not applicable APPENDIX B Pre-Election Period Guidance Page 136 of 216
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Page 1 of 21 Pre-election period guidance – Midlothian Council Use ctrl+click to browse this document using the links. Contents 1. Applicability • Elections / referendums • Timescales • Independent organisations 2. Key points 3. Background and timing • What is the pre-election period? • Timing of the pre-election period • Legal and other obligations 4. Premises • Definition • Use as offices and for public meetings • Visits to Council premises by candidates • Use of Council premises for publicity • Candidate’s posters and other advertising • Surgery Notices 5. Publicity • General • Specific points on local government elections • Opening ceremonies or other events • Media requests • By-elections • Referendums • Social Media 6. Other issues • Staff candidature • Staff - other political activity • Working relationships between staff and councillors • Use of Council facilities and resources by councillors • Freedom of Information requests Page 137 of 216
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Page 2 of 21 7. Questions and answers 8. Contacts and further information Page 138 of 216
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Page 3 of 21 1. Applicability (Back to contents) Elections / referendums These guidance notes apply to all elections: local government, Scottish parliament and UK parliament . Some provisions also apply to by-elections (discussed in section 5). The guidance will also apply to Referendums. In the case of Referendums, references in this guidance to political parties and candidates should be interpreted as referring to Designated Organisations, Permitted Participants and campaigners as appropriate. Where there may be specific issues relating to particular elections these are covered in the notes. Timescales Although the formal pre-election period begins with the issuing of the notice of election, care should be taken in the few days immediately before this to avoid any potential perception of political partiality. ‘Independent’ organisations Care should be taken to ensure that projects, initiatives or organisations funded by an authority do not create the potential for allegations that public money is being used in support of a party or candidate. This is likely to be less of an issue where funding is general, as opposed to funding for, say, communications activity by an organisation. Page 139 of 216
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Page 4 of 21 2. Key points (Back to contents) While there are some specific areas that required detailed advice, the essence of this guidance is: • Council staff must discharge their duties in a politically neutral way at all times. • There is particular sensitivity around this political neutrality in the run-up to an election. • Particular care needs to be taken to ensure that any events, publicity or other communications are politically neutral. • Council facilities and resources must not be used in support of a political party or election candidate. • Councillors, if standing as a candidate in any election, are still entitled to use Council facilities and resources whilst acting on constituency or Council business. • Unless otherwise stated, it should be assumed that normal Council business will continue. • Unless otherwise covered by this guidance, staff should respond positively to requests for information or advice from parties or candidates. Page 140 of 216
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Page 5 of 21 3. Background and timing (Back to contents) What is the pre-election period? It is the period between the announcement of an election and the date of the election. It is generally taken to be from the publication of the notice of election until polling day, inclusive of both days. This is the definition referred to in the Code of Recommended Practice on Local Government Publicity, which guides local authorities on fulfilling the requirements of section 2 of the Local Government Act 1986. In respect of a Referendum, the period will run from the announcement of the date of the Referendum with specific, more onerous rules operating in the period from 28 days before the day of poll. The main significance of the pre-election period is in the need for heightened sensitivity, to ensure that public resources are not used in any way that might influence the result of an election. The pre-election period has commonly been known as ‘purdah’. However, this is felt by some to be an inappropriate term because of its cultural and religious origins in referring to the separation of women from men. Timing of the pre-election period Local authorities have some discretion on the exact timing of the publication of the notice of election, although it needs to be within a timeframe which is set out in legislation according to individual elections. It is worth noting that the civil service tends to use the date of dissolution of parliament as the beginning of its pre-election period, as opposed to the notice of election. This can lead to the UK and Scottish governments, and their agencies, using different pre-election period dates however. The section of a local authority responsible for elections management should communicate to its elected members and staff the date of the pre-election period. It is usually helpful if this is done several months in advance to help with event and other planning. In some authorities, convention – although not law – means that the pre-election period is effectively observed a few days before it officially begins. Legal and other obligations Local authorities are prohibited by section 2 of the Local Government Act 1986 from publishing any material which appears to be designed to affect public support for a political Page 141 of 216
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Page 6 of 21 party. Publicity is defined very widely. It includes ‘any communication, in whatever form, addressed to the public at large or to a section of the public.' The Council also has duties under common law to taxpayers which prohibit the use of public funds and the activities of Council officers where the Council is not fulfilling its statutory functions. Unless otherwise specified in this guidance, any support given to political parties or election candidates is very likely to breach this obligation. For the avoidance of doubt, it should be noted that these duties apply at all times but the implementation is particularly sensitive during the pre-election period. Staff and elected members also have obligations under their respective codes of conduct. Between the time of publication of a notice of an election and polling day, publicity should not be issued which deals with controversial issues, or which reports views or policies in a way that identifies them with individual members and groups of members. The following publicity activities should therefore not take place during the formal election campaign period - • Any proactive media releases/ media activity, including photocalls, involving cabinet portfolio holders, election candidates or elected members or mentioning any political party. • The publication of any Council material (with the exception of election-related materials) that identifies, in any way, an election candidate or a political party. Reactive media inquiries are business as usual and, in some circumstances, may involve the relevant cabinet portfolio holder (see section 5 for further details). Any other activities will require to be considered in terms of the legislation and the relevant Code of Conduct. Page 142 of 216
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Page 7 of 21 4. Premises (Back to contents) Definition Council premises can include schools, offices, depots, stores and care homes where access is generally controlled or limited. It can also include other spaces which might generally be open to the public but where there is an element of control, e.g. leisure centres and parks. In this context, it is not taken to include public roads and pavements. Use as offices and for public meetings (Back to contents) The Local Government Act 1986 prevents local authorities from allowing Council premises to be used to promote support for a political party. However, there are some exceptions. An authority may allow political parties to rent Council owned premises for use as offices, where such facilities are provided on a first-come, first-served basis on normal commercial terms. Under the Representation of the People Act 1983 parties or candidates are entitled to use a school room for a public meeting in a Council run school within the candidate’s constituency. The let will be free of charge, but the Council is entitled to be reimbursed for heating, lighting and other utilities, as well for any damage caused to the room by the let. Candidates or their agents are required to give reasonable notice and any booking should not interfere with existing arrangements such as prior bookings or school hours. In terms of the Representation of the People Act 1983, the Council must also prepare and keep for each constituency which is wholly or partly in its area, a list of rooms in school premises and a list of “meeting rooms” which candidates are entitled to use. Candidates are also entitled to inspect a list of these rooms. The list of such premises within Midlothian is attached as an appendix to this guidance. During a referendum, “Designated Organisations” may also use these rooms on the same basis as above during the 28 day period prior to the Referendum in terms of schedule 12 of the Political Parties, Elections and Referendums Act 2000 Visits to Council premises by candidates (Back to contents) As the election approaches, candidates may wish to visit Council premises to meet residents, e.g. in residential homes, or to be seen within the area, or to become more Page 143 of 216
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Page 8 of 21 familiar with Council facilities. The Council has previously allowed such visits subject to management rules but it has now been decided that, subject to the exceptions listed below, no candidate shall be allowed to visit Council premises from the date of nomination until the close of poll. This moratorium will not apply however in the following circumstances: • Premises rented by the Council to third parties on a commercial basis where entry shall be at the discretion of the tenant • School rooms and other meeting rooms made available to candidates in terms of the Representation of the People Act 1983 • Visits at the invitation of a resident to their room in a Council residential home or hostel • Visits to Council premises for business and Council meetings; • Any activity in a Council managed public open space which has been approved by the Chief Executive (or her nominee); and • Visits to Council premises by an elected member whilst acting in that capacity Use of Council premises for publicity (Back to contents) Visits by candidates The media may request the use of a council establishment to highlight a general aspect of the election. This may or may not involve election candidates or parties. The decision on whether to agree or not to such media requests will be taken by the relevant Executive Director in consultation with Communications. In reaching their decision, the Executive Director should consider if such use by the media will favour one particular candidate or party, any sensitivities around the particular venue and its users, and the possible staff resource implications. Whatever decision is reached, it should be equally applied to all parties and candidates. If the media is involved in a visit, employees must not be photographed, recorded or televised with prospective candidates. The consent of clients or service users must be sought and not assumed. The Council has media relations consent forms in place for situations where the people involved are under 16 or deemed to be vulnerable adults, and consent in these situations must be recorded and retained as per normal practice for media consents. The Executive Director(s) will be advised on this aspect by Communications. An individual who lives in a Council residential home or hostel has a right, as an elector, to invite candidates and the media into their own room. Page 144 of 216
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Page 9 of 21 Visits by politicians other than candidates It is likely to be permissable for a sitting politician, who is not affected by a forthcoming election, to visit Council premises and seek publicity for this. Such visits are to be discouraged during the pre-election period but may be approved if there are exceptional circumstances. However, any candidates should not have a formal role at such events and Council staff should not facilitate any publicity involving election candidates, e.g. interview requests or photo opportunities. Please note that a visit by an elected member of the Council, even if a candidate in the election, on constituency business should always be permitted. Visits to Schools The franchise for the Scottish Parliament and Local Government Elections have been extended to 16 and 17 year olds. Accordingly, unless otherwise approved by the Executive Director, Children, Young People and Partnerships, no visits by politicians, candidates or campaigners will be permitted to secondary schools during teaching time in the pre- election period for those elections. Party political broadcasts Council premises should not be used for the filming of party political broadcasts. Candidate’s posters and other advertising (Back to contents) Political posters are not permitted on streetlights, other street furniture (e.g. traffic lights, railings and benches) and roads (including verges, central reservations and roundabouts). Any posters on Council property will be removed. The Council does not however have any power to remove posters from other properties. The Council will not object to A Boards being placed on the pavement outside polling stations on the day of poll provided these boards do not obstruct the public right of passage. The question of whether an obstruction is being caused will be a matter for Police Scotland. Party political or campaigning material should not be placed on notice boards or displayed in Council buildings. This will include, for the avoidance of doubt, the display of materials visible in the windows of all offices in Council buildings, including those made available for use by elected members. Surgery notices Sitting MPs, MSPs and councillors may have surgery notices displayed in Council premises. These can continue to be displayed during the pre-election period providing it is the usual notice which is being displayed. Page 145 of 216
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Page 10 of 21 There is one exception to this rule: sitting politicians for a particular election who no longer hold office once the notice of election is published whose posters must be removed. For example, an MP ceases to be an MP in the pre-election period for the UK Parliament elections and should have their posters removed. Other sitting politicians may continue to publicise their surgeries and, in particular as Councillors remain in post until the day of poll for a local government election, any such posters should not be removed. Page 146 of 216
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Page 11 of 21 5. Publicity (Back to contents) General As the definition of publicity is very broad, and any content subject to interpretation, it is not possible to be prescriptive about what publicity is permissible or otherwise and each situation has to be discussed on its own merits. Publicity can cover news releases, publications, events, photos and videos. It also includes online and social media communications as well as ‘traditional’ publicity. In determining whether publicity should be allowed, the main factors to take into account are: • The content and style of the material. • The time and circumstances of the publication. • The likely effect of the material on those to whom it is directed. • Whether the material promotes or opposes a point of view on a question of political controversy which is specifically identifiable as the view of one political party but not of another. • Whether to not the material contains references to any political party or to person identified with a political party. • Where the material is part of a campaign, the effect that the campaign appears to be designed to achieve. • The extent to which any activity is ‘business as usual’ or where the timing might be beyond the reasonable control of the authority. The key test is whether a particular act can be perceived as seeking to influence public opinion or to promote the public image of a particular candidate, or group of candidates (whether or not they are existing members). Specific points on local government elections Public statements (reactive and proactive) may need to quote the relevant councillor responsible for a particular portfolio. Great care should be taken to ensure that any content is clearly and directly relevant to the service or issue being discussed and reflects an agreed Council decision or policy. It must not be a general comment on the position or achievements of the sitting administration. Any Council newspapers or newsletters should not be published during the pre-election period. Routine publications advising on council services, such as Tonezones or the Midlothian Snowsports Centre at Hillend, may be published during the pre-election period. It is worth noting that councillors remain as councillors until the day of poll for a local government election. Page 147 of 216
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Page 12 of 21 Opening ceremonies or other events Official openings or events, whether or not specifically designed to attract publicity, should not take place during the pre-election period before a local government election. Any variation on this must be agreed by the relevant Executive Director and be justified on the grounds of exceptional unavoidable and/or unforeseen circumstances. Media requests In general, media requests for general filming or photo opportunities around elections should be treated as they would be normally. The only issue that would arise is if there is any question of the media outlet taking a particular stance that may be, or may perceived to be, in favour of one party or candidate. Requests to organise or cover hustings events would normally be permissible on the basis that they are open to all relevant candidates. In the case of broadcasters, there are strict rules that apply to maintain political neutrality and an authority should assume that the broadcaster concerned will meet its own obligations in this regard. By-elections Particular care should be taken to avoid any publicity in the ward or constituency affected by a by-election during the period after the notice of election has been issued. Depending on the circumstances, it may also be appropriate to stop normal Council publicity on the day before and the day of polling. Referendums The Council may not publish any promotional material relating to a referendum within a period of 28 days prior to the referendum polling date in terms of section 125 of the Political Parties, Elections and Referendums Act 2000. This restriction is on all material regardless of political content or neutrality. In terms of that Act, publish is defined as “make available to the public at large, or any section of the public, in whatever form and by whatever means.” “Promotional Material” is also widely defined as material which: • Provides general information about the referendum • Deals with any of the issues on which the referendum is being held • Puts any argument for or against any issue on the referendum or • Is designed to encourage voting at the referendum. Schools and other educational establishments may wish to teach pupils about the terms of the Referendum and this should not be affected by the prohibition. Head Teachers and heads of other educational establishments should however seek clearance and guidance Page 148 of 216
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Page 13 of 21 from the Executive Director, Children, Young People and Partnerships if they receive requests for Referendum related activities from outside bodies before agreeing to them. Social Media The Council hosts a number of social media profiles. Nothing will be permitted on any of these pages to promote political messages, support for a particular candidate(s) or any other political content. Any such messages, whether posted by or on behalf of the Council or by third parties, will be removed. Councillors will be entitled at all times, including during the pre-election period, to post any political content or viewpoint on their own social media accounts even if the account refers to the Councillor as an elected member. It is only the use of the Council’s social media for electioneering purposes that is prohibited by this guidance. Page 149 of 216
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Page 14 of 21 6. Other issues (Back to contents) Staff candidature If a Council employee in a political restricted post wishes to stand for election (whether to the Council, Scottish parliament or UK parliament) they must resign their post. A Council employee not in a politically restricted post may stand for election to the Council without resigning their post but must resign within one day of the declaration of the result should they be elected otherwise they cease to be an elected member and will cause a by election. Staff - other political activity Staff in politically restricted posts should not undertake any political activity at any time. Staff in posts that are not politically restricted may carry out political activity. However, if they are a witness for any election-related documents or otherwise personally involved in support for a particular party or candidate, they must not be involved with polling or counting. Working relationships between staff and councillors Some employees may have a close working relationship with councillors. It is important that this close working relationship is not compromised in any way. If an employee is asked by a councillor to provide assistance with a matter which is clearly party political or which does not have a clear link with the work of the Council, they should politely refuse and inform the councillor that they are referring the matter to their line manager for guidance. This rule also applies if a councillor seeks assistance of behalf of a candidate in the elections. This rule applies at any time and not just during the pre-election period Use of Council facilities and resources by councillors Facilities and resources provided by the Council for councillors to help them carry out their duties must never be used for party political or campaigning activities. This includes computer equipment, telephones, stationery and secretarial support. This is not an exhaustive list and councillors should check if they are not sure what is appropriate. Communications by councillors to their constituents come within the definition of publicity detailed above, except where they are in response to particular issues initiated by their own constituents. Use of Council facilities for unsolicited mailings during this period should be made with extreme caution. To avoid any suggestion that actions may be motivated by the forthcoming elections, councillors should not issue communications to constituents in a form or style which they have not used before. Page 150 of 216
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Page 15 of 21 Freedom of Information requests There are no implications for FOI or other information requests covered by legislation. These should be handled as normal. Page 151 of 216
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Page 16 of 21 7. Questions and answers (Back to contents) The following are examples of issues which have arisen previously. It must be remembered that the final advice will turn on the exact circumstances and these FAQs are only given to provide an indication of the type of issues you should be considering. They are not a substitute for specific, detailed advice. 1. A controversial item is on the agenda for a meeting of the Council or a Committee which will be held during the pre-election period. Should consideration of the item be postponed until after the election? No. The work of the Council should continue and the item should be considered. 2. A school has been approached by a candidate in the forthcoming election who wishes to meet pupils and have a general discussion with them about topics of concern to them. Is it okay to allow the visit? No, this does not constitute “business as usual” and as such the visit will come under the moratorium in terms of section 4 3. Officers have been asked to attend an event to give advice on Council services. Is this okay? Whether or not it would be appropriate for officers to attend would depend on the nature of the event, who was running it and when it is being held. If the event is associated with a particular political party and is being held during (or a day or two before the beginning of) the pre-election period then officers should not attend. If it is being held outwith this period, then you would have to decide whether the event was designed to affect support for one political party. If so, then again officers should not attend. 4. Is it okay for an election candidate to take photographs outside a Council office or facility? This should not be encouraged but cannot be prevented. Candidates and officials should be aware that photography in and around schools is controlled, as any existing parental consent, whether express or implied, in relation to photographs taken for school purposes cannot be regarded as extending to the use of photographs in connection with any political campaigning. 5. What do I do if a candidate/political party refuses to accept my decision? Contact your Executive Director, who can discuss the issues raised with the Chief Executive and let you and the candidate/party know the outcome of these discussions. 6. A candidate turns up at Council premises for a pre-arranged business meeting but there are media following them. Should the media be allowed in? No. This is allowing a council facility to be used for a party political activity. Page 152 of 216
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Page 17 of 21 7. A public consultation meeting is scheduled during the pre-election period as part of the formal planning process for a new school. Can it go ahead? Yes. This is both normal business and there are significant costs attached to any delay. 8. A party wants to use a council-managed public space for their campaign launch. Should it be allowed? There is a convention that certain public spaces are used for campaign activity. It is generally acceptable for these to take place so long as the events are limited, e.g. around 1 hour and that there is equal opportunity for all parties or candidates to use them. The council resource/effort in facilitating these should also be minimal, e.g. enabling access to a space. 9. The council was intending to facilitate a debate on an important issue to our area. Should it be cancelled? The debate must be open to participation by all parties and candidates, and it may be advisable to limit the media participation (e.g. reactive rather than proactive). With those caveats, it could go ahead, but thought would still need to be given to whether or not the issue at hand was likely to be particularly divisive along party lines. 10. A councillor wants to give their view on a matter debated at committee to the media. Is this allowed? Any councillor at any time is at liberty to do this. The tests are whether they are using council resources to do so and, if so, whether the view is (or could be perceived to be) political in nature. 11. A charity which receives funding from the council has taken an advert in a political party's newsletter. Is this allowed? There are two relevant issues here: what is the council's funding for (e.g. a general grant or for a specific purpose such as communications) and what is the advert for (e.g. notice of an event or self-promotion)? Generally, this is a low-risk activity so long as there is nothing overtly political about the organisation's activity or its advert. 12. There is an event scheduled for the launch of a new service. Can local councillors be invited? And what about other politicians? Such events are generally very inadvisable before a local government election and should also be avoided before other elections. If the latter, local councillors can be invited, although this should be avoided if one of the councillors is a candidate. If the Director has agreed the event can go ahead, then all candidates for that ward should be invited. 13. We want to highlight a new initiative. Can the relevant cabinet member be involved? No. Proactive publicity of this kind can go ahead without elected member involvement. We will use a service user or manager in these circumstances. Page 153 of 216
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Page 18 of 21 14 A partner organisation has asked to use a council venue for the launch of an initiative. A minister will be attending and significant media presence is expected. Can we facilitate this? Yes. Hiring of council venues is business as usual. Page 154 of 216
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Page 19 of 21 8. Contacts and further information (Back to contents) General advice on pre-election period guidance Alan Turpie, Legal and Governance Manager, alan.turpie@midlothian.gov.uk, 0131 271 3667 Page 155 of 216
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Page 20 of 21 APPENDIX (A) List of Rooms in School Premises (i) Primary Schools Bilston Park Avenue, Bilston, Roslin *Bonnyrigg Cockpen Road, Bonnyrigg Burnbrae 144 Burnbrae Road, Bonnyrigg. Cornbank St James 34 Marchburn Drive, Penicuik Cuiken 150 Cuiken Terrace, Penicuik Danderhall 59 Edmonstone Road, Danderhall Glencorse Graham’s Road, Milton Bridge, Penicuik Gorebridge 2C Barleyknowe Lane, Gorebridge Gore Glen Whitehouse Way, Gorebridge Hawthornden Polton Avenue Road, Bonnyrigg King’s Park 20 Croft Street, Dalkeith Lasswade 7A Pendreich Drive, Bonnyrigg *Lawfield 26 Lawfield Road, Mayfield Loanhead 34 Edgefield Road, Loanhead Mauricewood 11 Muirhead Place, Greenlaw Mains, Penicuik Mayfield Stone Avenue, Mayfield Moorfoot 41 Borthwick Castle Road, North Middleton Newtongrange Sixth Street, Newtongrange Paradykes Mayburn Avenue, Loanhead Rosewell 85 Carnethie Street, Rosewell Roslin 8 Pentland View Place, Roslin Sacred Heart Crockett Gardens, Penicuik St Andrew’s Gowkshill, Gorebridge St David’s RC Kippielaw, Lauder Road, Dalkeith St Luke’s RC Stone Avenue, Mayfield *St Margaret’s RC 36 Edgefield Road, Loanhead St Mary’s RC 62A Polton Street, Bonnyrigg St Matthew’s RC 32 Carnethie Street, Rosewell *Stobhill 1 Bonnybank Road,, Gorebridge *Strathesk 4 Eastfield Farm Road, Penicuik *Tynewater 32 Crichton Road, Pathhead Woodburn 5 Cousland Road, Dalkeith (ii)/ Page 156 of 216
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Page 21 of 21 (ii) Secondary Schools Beeslack Community High School Edinburgh Road, Penicuik 01968 678060 Dalkeith Schools Community Campus Cousland Road, Dalkeith 0131 660 0268 The Lasswade Centre (Lasswade High School) Eskdale Drive, Bonnyrigg 0131 271 4530 Newbattle Community Campus Easthouses Way, Dalkeith 0131 561 6740 Penicuik High School 39A Carlops Road, Penicuik 01968 674165 In respect of primary schools marked ‘*’, all enquiries regarding their availability and bookings should be made with CLLBookingandLets@midlothian.gov.uk. In respect of all other primary schools, enquiries and bookings should be made to Business Services using their email address at Business.Services.Support@midlothian.gov.uk. In respect of Dalkeith Schools Community Campus, all enquiries and bookings should be made with the BAM FM Office, 4 Cousland Road, Dalkeith EH22 2PS - Telephone 0131 660 0268. In respect of other secondary schools, all enquiries regarding their availability and bookings should be made direct to the relevant school office. (B) List of Meeting Rooms The following premises are available for meetings. The relevant booking telephone number is shown. Poltonhall Recreation Ground 0131 663 7702 (Bonnyrigg Rose FC) Rosewell Pavilion 0131 448 0103 (Rosewell After School Club) Waverley Park Pavilion 0131 271 4533 (Lasswade Centre) King George V Park Pavilion, Bonnyrigg 0131 271 4533 (Lasswade Centre) Penicuik Town Hall 01968 664 066 (Penicuik Leisure Centre) Roslin Community Hall 0131 444 9033 (Loanhead Leisure Centre) Loanhead Leisure Centre 0131 444 9033 Danderhall Community Hub 0131 444 9100 Danderhall Pavilion 0131 663 9280 King’s Park Pavilion, Dalkeith 0131 561 6740 (Newbattle Community Campus) Pathhead Pavilion 0131 561 6740 (Newbattle Community Campus) Newtongrange Leisure Centre 0131 561 5325 Gorebridge Leisure Centre 01875 821739 Birkenside Pavilion 01875 821739 (Gorebridge Leisure Centre) Dalkeith Arts Centre 0131 663 6986 Page 157 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.9 Standing Orders Working Group – Deputations Process Report by Saty Kaur, Chief Officer Corporate Solutions Report for Decision 1 Recommendations Council is recommended to: - Approve the revised Deputations Process (Appendix B) - Consider a change to Council Committee start times from 11am to 10am with the exception of Council which remains at 11am 2 Purpose of Report/Executive Summary This report requests Council to consider changes to the Deputations Process; as recommended by the Standing Orders Working Group, and a change of start time of Committee meetings. Date Thursday 20 November 2025 Report Contact: Saty Kaur, Chief Officer Corporate Solutions Saty.Kaur@midlothian.gov.uk Page 159 of 216
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3 Background/Main Body of Report 3.1 At its meeting of 11 November 2025; Standing Orders Working Group (SOWG) considered and approved changes to the Council's Deputation Process (Appendix B) and agreed to refer this to Council for consideration and approval. 3.2 The main change to the process is a section providing clarity on the validity of a deputation and a section on how the deputation will be considered. 3.3 In addition, SOWG discussed moving the start time of Council meetings from 11am to 10am. The Council’s Committee schedule has been approved until June 2027. Officers propose a change to that schedule where all Committee meetings scheduled at 11am move forward to 10am, with the exception of Council meetings which remains at 11am. Council is asked to consider this change and advise on its preference. 4 Report Implications (Resource, Digital and Risk) 4.1 Resource No implications 4.2 Digital No implications 4.3 Risk Deputations play an important role in democratic processes because they give citizens and community groups a direct voice in decision- making. It is imperative that the Council has a clear process to facilitate transparency, accountability and public participation in democracy. 4.4 Ensuring Equalities (if required a separate IIA must be completed) No implications 4.5 Additional Report Implications (See Appendix A) See Appendix A Appendices Appendix A – Additional Report Implications Appendix B – Deputations Process (draft for approval) Page 160 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan N/A A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value N/A A.5 Involving Communities and Other Stakeholders Deputations play an important role in democratic processes because they give citizens and community groups a direct voice in decision- making. It is imperative that the Council has a clear process to facilitate transparency, accountability and public participation in democracy. A.6 Impact on Performance and Outcomes N/A A.7 Adopting a Preventative Approach N/A A.8 Supporting Sustainable Development N/A Page 161 of 216
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Appendix B Making a deputation to Midlothian Council. Thank you for your request to make a deputation to Council. A deputation is a group of persons acting on behalf of a group or organisation to make representations to the Council. What can a deputation be about? A request for deputation is valid and will be deemed admissible (subject to the conditions below) if its subject matter relates to a substantive item listed for consideration on the agenda of a scheduled meeting of the Council or one of the Council’s committees. A request for deputation is not valid and will be deemed inadmissible if it: • fails to comply with the submission deadline and criteria outlined above; • contains recommendations beyond the powers of the Council or committee; • contains defamatory, offensive, or inappropriate language; • relates entirely to the functions of another organisation; In addition to the above, a deputation may be deemed to be invalid if it concerns any of the following: • petitions, complaints or grievances; • planning, licensing matters or other regulatory matters; • decisions on contract awards and property transactions; • matters governed by statutory or formal procedures; • reports containing confidential information, for example where the matter is to be dealt with to the exclusion of the public; • matters involving personal data of identifiable individuals, including elected members or employees; • employment terms and conditions of staff; Page 163 of 216
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• information protected by an interdict or court order; • allegations of unlawful conduct. How to submit a deputation The deputation request must be submitted by email or in writing, setting out the subject of the deputation and must relate to an item of business on the agenda for that meeting and be on an issue included in the Council’s powers or duties. If the request is received after the agenda has been issued and more than three working days prior to the council meeting; then the Executive Director, in conjunction with the Chief Executive and the Council Leader, will determine if the deputation will be added to the agenda. How the deputation will be considered If the deputation is on the agenda then the following process will apply; The Council meeting will be asked whether they wish to hear the deputation, and If the Council agree to hear the deputation then the following will apply: • Only two members of the delegation can address the Council • They can only address the meeting for a maximum of ten minutes in total • Following the deputation, the relevant Council officer may be invited to respond to the points raised before the committee proceeds to consider the item, for a maximum of ten minutes. This ensures that elected members receive balanced information, including both public input and professional advice, before making decisions • There would then follow a maximum period of ten minutes for questions and answers. • The deputation can only inform the Council and may not request the Council to do anything – that would require a petition which is a separate process. Page 164 of 216
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The Provost, or chair of the meeting, can stop a member of the delegation from speaking if they talk about something which is inappropriate or not relevant or if they behave in an inappropriate way when presenting the statement. Page 165 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.10 Local Review Body – Nomination of Member Report by Saty Kaur, Chief Officer Corporate Solutions Report for Decision 1 Recommendations Council is recommended to nominate an Elected Member to the Local Review Body. 2 Purpose of Report/Executive Summary To update Council on a resignation from Local Review Body and seek nominations for a replacement. Date Monday 17 November 2025 Report Contact: Saty Kaur, Chief Officer Corporate Solutions Saty.Kaur@midlothian.gov.uk Page 167 of 216
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3 Background/Main Body of Report 3.1 The Local Review Body (LRB) comprises 10 Elected Members on the following basis: • 4 SNP • 4 Labour • 2 Conservative 3.2 The current membership is: • Councillor Russell Imrie (Chair) • Councillor Dianne Alexander • Councillor Douglas Bowen • Councillor Colin Cassidy • Councillor Kelly Drummond • Councillor Willie McEwan • Councillor Connor McManus • Councillor Derek Milligan • Councillor Peter Smaill • Councillor David Virgo 3.3 The LRB remit is as follows: The LRB will conduct reviews in accordance with Section 43A(8) of the Planning etc (Scotland) Act 2006, where the appointed person:- a) Refuses an application for planning permission or for consent., agreement or approval; b) Grants it subject to conditions; or c) Has not determined it within such period as may be prescribed by regulations or a development order. 3.4 Following the resignation of Councillor David Virgo from the LRB, Council is asked to nominate a replacement member. 4 Report Implications (Resource, Digital and Risk) 4.1 Resource No implications 4.2 Digital No implications 4.3 Risk Failure to nominate a member means the Council is not following its Standing Orders and Scheme of Administration. 4.4 Ensuring Equalities (if required a separate IIA must be completed) No implications 4.5 Additional Report Implications (See Appendix A) See Appendix A Page 168 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan N/A A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value N/A A.5 Involving Communities and Other Stakeholders N/A A.6 Impact on Performance and Outcomes N/A A.7 Adopting a Preventative Approach N/A A.8 Supporting Sustainable Development N/A Page 169 of 216
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Midlothian Council Tuesday 16 December 2025 Item No 8.11 Midlothian Armed Forces Covenant Plan 2025 to 2030 Report by Derek Oliver, Executive Director Children, Young People and Partnerships (Acting) Report for Decision 1 Recommendations Midlothian Council is recommended to endorse and approve the Midlothian Armed Forces Covenant Plan 2025–2030 and to note the future requirement to respond to the extension of the Armed Forces Duty, once enacted. 2 Purpose of Report/Executive Summary The purpose of this report is to outline the Council’s statutory responsibilities under the Armed Forces Covenant legislation and associated guidance. It also presents the updated Midlothian Armed Forces Covenant Plan 2025–2030, which sets out a shared vision which is: “To improve outcomes for serving personnel, veterans, reservists and their families by understanding their needs through data, lived experience and strong collaborative partnerships.” 20th November 2025 Report Contact: Annette Lang Annette.lang@midlothian.gov.uk Page 171 of 216
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3 Background/Main Body of Report 3.1 Midlothian Council’s Corporate Management Team has approved the establishment of a cross-council and multi-agency forum to support delivery of the Midlothian Armed Forces Covenant. The forum has been tasked with reviewing and updating the existing Covenant Plan in consultation with partners. The revised Midlothian Armed Forces Covenant Plan 2025–2030 sets out a strategic framework to ensure that individuals who have served in the Armed Forces — including their families and the bereaved — do not face disadvantage in accessing public services. Our legal obligations are set out in this graphic below: . The current covenant legal duty will be extending in the future; the exact date is to be confirmed. The current legal obligation to give due regard applies to local authorities, governing bodies of state-funded schools and various NHS bodies in some specific policy areas within housing, education and healthcare. The Covenant Legal Duty will remain as a duty of due regard to Covenant principles but will increase the scope of those obliged to follow the duty and cover more policy areas. Each policy area covered will also be much broader. The extension of the Legal Duty will encompass all UK Government Departments, Devolved Governments and the following policy areas: • Housing • Education • Healthcare • Social care • Childcare • Employment and service in the armed forces Page 172 of 216
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• Personal taxation • Welfare benefits • Criminal justice • Immigration • Citizenship • Pensions • Service-related compensation • Transport 3.2 Midlothian’s Armed Forces Covenant Strategic Vision and Action Plan The updated Midlothian Armed Forces Covenant Plan 2025–2030 articulates a clear vision: To improve outcomes for serving personnel, veterans, reservists and their families by understanding their needs through data, lived experience and strong collaborative partnerships. The accompanying action plan is structured around the following key components: • Introduction and Background • Overview of the Midlothian Armed Forces Covenant Plan • Relevant Data and Insights • Partner Contributions • Funding Arrangements • Detailed Actions • Mechanisms for Reporting and Evaluation In addition, the plan outlines a series of overarching and specific commitments aimed at delivering meaningful change. These include: • Enhancing promotion and awareness of the Armed Forces Covenant and associated statutory duty • Strengthening understanding of the needs of our Armed Forces communities through improved data and engagement • Reducing barriers to support by enabling access to targeted funding opportunities • Ensuring representation at both local and national Armed Forces Covenant forums Page 173 of 216
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• Securing representation of the Armed Forces community within the Midlothian Community Planning Board • Committing to an annual review of the plan to identify areas for continuous improvement. 4 Report Implications (Resource, Digital and Risk) 4.1 Resource The Midlothian Armed Forces Covenant Action Plan does not require any additional financial resources from the Council at this time. However, successful implementation is contingent upon the active engagement of key staff and elected members from both the Council and partner organisations, in line with the responsibilities outlined in the plan. This collective effort is essential to ensure compliance with the Council’s statutory obligations under the Armed Forces Covenant Duty. The working group has successfully secured external funding totalling £133,000 over two years through the Armed Forces Covenant Fund. This funding will support children and young people from serving Armed Forces families and enable the implementation of the new MIPSA (Midlothian Informed Personal Support Approaches) project within the local authority area. 4.2 Digital None 4.3 Risk The main risk is contained in not having a plan and therefore being at risk of not fulfilling our legal obligations. 4.4 Ensuring Equalities (if required a separate IIA must be completed) The plan is directly ensuring that armed forces individuals, reservists, veterans and families do not experience disadvantage due to their service and associated experiences. Below is the link to the completed IIA. https://www.midlothian.gov.uk/download/downloads/id/5587/midlo thian_covenant_signed_iia_form.pdf Page 174 of 216
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APPENDIX A – Report Implications A.1 Key Priorities within the Single Midlothian Plan The Single Midlothian Plan aims to reduce poverty, inequality and mitigate against the cost-of-living crisis. A.2 Key Drivers for Change Key drivers addressed in this report: Holistic Working Hub and Spoke Modern Sustainable Transformational Preventative Asset-based Continuous Improvement One size fits one None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The Midlothian Armed Forces Covenant adds best value by creating a structured, collaborative approach with partners to supporting serving personnel, veterans, reservists, and their families. It delivers best value by: • Reducing disadvantage • Sharing information on local supports • Supporting funding applications A.5 Involving Communities and Other Stakeholders An armed forces partnership group has been established and through this forum partners have been involved in reviewing the plan and or contributing to the actions and priorities. Twelve partners are listed as formal partners in the updated Midlothian Armed Forces Covenant Plan 2025 to 2030. Page 175 of 216
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A.6 Impact on Performance and Outcomes The Midlothian Armed Forces Covenant will have an impact on improved outcomes for those who have served or are serving and their families in relation to a variety of areas including housing, education, health and social care and support from the third sector. A.7 Adopting a Preventative Approach The Midlothian Armed Forces Covenant supports prevention by focusing on early intervention and reducing risks before they escalate into crises for serving personnel, veterans, and their families. The Covenant’s preventative approach is about early intervention, holistic support, and community integration, reducing risks of homelessness, poor mental health, educational disadvantage, and social isolation and maximising opportunities. A.8 Supporting Sustainable Development Partnership working through the covenant supports sustainable development primarily on three aspects these are reducing inequalities and strengthening local economies and employability. Partnership working on these areas enables us to draw on the skills and expertise of reservists, service personnel and veterans. 4.4 Additional Report Implications (See Appendix A) Appendices Midlothian Armed Forces Covenant Plan 2025 to 2030 Page 176 of 216
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Midlothian Armed Forces Covenant Plan 2025 to 2030 Vision Statement “To improve outcomes for serving personnel, veterans, reservists and their families by understanding their needs through data, lived experience and strong collaborative partnerships." Updated November 2025 Page 177 of 216
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Foreword from the Armed Forces Champion Midlothian Council As Midlothian’s Armed Forces Champion, I am proud to reaffirm our commitment to the Armed Forces Covenant. This Covenant is more than a pledge—it is a promise that those who serve, have served, and their families will be treated with fairness, respect, and gratitude for the sacrifices they make on behalf of our nation. Midlothian has a long and proud association with the Armed Forces, from the historic presence of Glencorse Barracks to the many veterans, reservists, and service families who enrich our communities. We recognise the unique challenges faced by the Armed Forces community and are determined to ensure they do not experience disadvantage when accessing public services, housing, education, or employment. The Covenant is now enshrined in law which strengths this position further. This Covenant reflects a shared responsibility across local government, health services, businesses, third sector, and the wider community. Together, we will continue to build strong partnerships, promote understanding, and deliver practical support that makes a real difference to the lives of service personnel, veterans, and their families. On behalf of Midlothian Council, I thank all who serve and have served. Through this Covenant, we recognise your commitment and in return offer support by working in partnership. Cllr Pauline Winchester Armed Forces and Veterans Champion, Midlothian Council Page 178 of 216
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Index 1. Executive Summary pg. 4 2. Introduction and Background pg. 6 3. The Midlothian Armed Forces Covenant Plan pg. 10 4. Midlothian Armed Forces Data including Schools pg. 11 5. Valuing Armed Forces Contributions to our Communities p.g.18 6. Armed Forces Covenant Partners pg. 18 7. Armed Forces Covenant Trust Fund pg. 23 8. Midlothian Armed Forces Covenant Action Plan pg. 23 Page 179 of 216
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Executive Summary The Midlothian Armed Forces Covenant Plan (2025–2030) outlines a strategic commitment to improving outcomes for serving personnel, veterans, reservists, and their families. The plan is guided by data, lived experience, and strong collaborative partnerships, ensuring fair access to public services across healthcare, education, and housing. With the Armed Forces Covenant Legal Duty now enshrined in law, public bodies must consider the unique circumstances of the Armed Forces community when delivering key services. This legal obligation promotes greater awareness of the challenges faced due to Service life—such as frequent relocations, separation from support networks, and transitions to civilian life—and encourages more equitable service provision. The Armed Forces Population in Midlothian Midlothian has over 3500 armed forces veterans and children, this does not include serving personnel. This is more than you would expect for the size of the local authority. Armed Forces Covenant Partners The Covenant is supported by a wide network of committed partners, including: • Armed Forces (HQ Edinburgh Garrison & 2 SCOTS) • Midlothian Council and Elected Member Champion (Cllr Pauline Winchester) • Veterans Scotland and Lothians Veterans Centre (LVC) • Business and Commercial Sector • Department of Work and Pensions (DWP) • Midlothian Federation of Community Councils • Midlothian Community Action (MCA) • NHS Lothian • Community Planning Partnership Partners Page 180 of 216
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Armed Forces Action Plan (2025–2030) The Action Plan is structured around six overarching outcomes: 1. Raise awareness of the Armed Forces Covenant and Duty 2. Build an increased knowledge of Armed Forces communities and needs 3. Reduce barriers through bespoke funding 4. Ensure representation at local and national meetings of armed forces needs 6. Review the plan annually and identify improvement areas Key Thematic Areas and Actions: • Education: Awareness training, enrolment support, tracking attainment and wellbeing, celebrating Armed Forces children month. • Children’s Services: Timely assessments for ASN children, minimising gaps in support during transitions. • Housing: Staff training, tracking applications, appointing Armed Forces Housing Champion, promoting adaptations and equipment. • Health and Social Care: Increasing awareness of veteran support services across older people services. • Council Staff: Promoting LearnPro training, internal communications, and exploring mandatory modules. • Employability: Guaranteed interview schemes for veterans and cadets, support for service spouses, tracking NOLB- funded participants. • Recognition: Cadet awards and community celebration initiatives. Performance indicators, key partners, timescales, and lead contacts support each action to ensure accountability and progress Page 181 of 216
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Introduction to the Armed Forces Covenant The new Armed Forces Covenant Legal Duty is outlined below: What is the new Armed Forces Covenant Legal Duty? The new Covenant Legal Duty is a legal obligation on certain public bodies to ‘have due regard’ to the principles of the Covenant, and requires decisions about the development and delivery of certain services to be made with conscious consideration of the needs of the Armed Forces community. Who does the new Duty affect? The new legal obligation impacts organisations that are responsible for delivering principally statutory functions in healthcare, education, and housing services. The Armed Forces community will be affected as beneficiaries of the new Duty. What will the new Armed Forces Covenant Duty do? The new Covenant Duty will raise awareness amongst organisations that provide services in healthcare, education, and housing of how Service life can impact on the Armed Forces community, and how disadvantages can arise due to Service when members of that community seek to access key local services. The Duty will require organisations delivering local services to have due regard to the Covenant principles when exercising functions in the areas of housing, healthcare, and education. “Due regard” means that organisations in scope of the Duty will need to consciously consider the unique obligations and sacrifices made by the Armed Forces; that it is desirable to remove disadvantages faced by the Armed Forces community; and that special provision may be justified in some circumstances. Why has this new Duty been introduced? There has been good progress under the Covenant to date, but more work is needed to improve consistency of delivery. The increased awareness that is inherent in the new Duty will help to improve delivery as understanding grows. There is no desire to add an administrative burden unduly on organisations. The legislation has been designed around a Duty to have due regard, as this is the best way to minimise any burden placed on service providers while maximising the wider impact of Covenant delivery into the future. Page 182 of 216
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How will this affect the Armed Forces community? Service life affects serving personnel, veterans, and their families in many ways. Whether it is through frequent house moves, separation from loved ones and support networks, or unfamiliarity with civilian life, for example, they can find themselves on the back foot when accessing public goods and services. The Covenant Duty will raise awareness amongst providers of public services, like schools and hospitals, about how Service life can impact the Armed Forces community. In turn, this will lead to more informed policymaking as these organisations will better understand the uniqueness of Service and how this can cause disadvantage when accessing these services compared to civilians. This will not mean that the Armed Forces community will be placed at the front of the queue. But it will mean their circumstances will receive a fairer assessment when their cases are considered. In this way we can help to ensure that the Armed Forces community are treated fairly now and in the future. Key functions covered by the new Duty include issues such as the allocation of social housing; healthcare waiting list policies; and schools’ admissions. What does this mean for those organisations who need to fulfil their obligations under the new Duty? The new Duty applies to organisations responsible for delivering education, healthcare, and housing services. A range of organisations are covered by the scope of the Duty, such as local authorities, NHS trusts, and schools and academies, for example. The Duty will raise awareness of the how Service life can impact on members of the Armed Forces community. This will help ensure that providers of public services consider the Armed Forces community when developing or delivering policies that affect them. The Covenant Duty does not mandate what organisations must do – only that they must consider the Armed Forces community alongside other legal requirements. This allows affected organisations the flexibility to balance local needs within the local context. What support is available for organisations to help them apply the new law? The Covenant Legal Duty toolkit contains a range of resources that provide information about the Legal Duty, which can be used to inform yourself or to engage with your wider networks. This includes the Statutory Guidance , which MOD has produced to help affected organisations to understand and comply with the Covenant Duty. This explains the Covenant, and includes examples of where disadvantage can arise, of good practice, and other useful information. Some other existing useful resources, such as the Local Authority Guide to the Covenant, best practice websites and links to relevant organisations can be found here. Page 183 of 216
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Where does it apply? The Covenant Duty applies to England and Wales, Scotland and Northern Ireland. Organisations who need to comply with the new law: Scotland: • Local authorities and local authority landlords • Integration authorities, Health Boards, Special Health Boards, and the Common Services Agency for the Scottish Health Service • Persons or bodies whose help is requested under section 23 of the Education (Additional Support for Learning) (Scotland) Act 2004 Public services provided by organisations affected by the new law: Healthcare: • Provision of healthcare services • Planning and funding • Co-operation between bodies and professionals These three healthcare functions are within scope of the Duty in the following settings: • NHS Primary Care services, including general practice, community pharmacies, NHS dental, NHS optometry services and public health screening services. • NHS Secondary Care services, including urgent and emergency care, hospital and community services, specialist care, mental health services, and additional needs services (as applicable). • Local authority-delivered healthcare services, including sexual health services and drug and alcohol misuse services. Page 184 of 216
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Education: • Admissions • Educational attainment and curriculum • Child wellbeing • Transport • Attendance • Additional needs support. These education functions are within scope of the Duty in compulsory education settings, that is, primary, secondary, and, for England only, compulsory further education. The Duty does not cover nursery (early years education), higher education, or other voluntary adult education settings. Housing: • Allocations policy for social housing • Homelessness • Disabled Facilities Grants Page 185 of 216
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Please see graphic below which summaries the Covenant Duty: The Midlothian Armed Forces Covenant Plan The Midlothian Armed Forces Covenant was first established in January 2012. This Armed Forces Covenant Plan builds on existing relationships and supports the Armed Forces Covenant. The action plan for 2025 to 2030 sets out developmental areas to support the covenant which is now enshrined in law as set out above. Page 186 of 216
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What the Data Tells Us The latest data for Midlothian indicates there are 3131 local people living in Midlothian who are veterans this is 4.0% of the over 16 population. This is above the Scottish average which is 3.87%. Of the total veteran population of 3131, 402 are female reflecting 12.8% of the veteran population (Scottish Average 11.7%), and 2735 are male, reflecting 87.3% of the veteran population (Scottish Average 88.3%). Of the County's population aged between 16 and 64, 1601 were veteran, this reflects 2.67% of this age group (Scottish Average 2.5%). Of the County's population aged 65 or over, 1530 were veterans this reflects 8.35% of this age group (Scottish Average 8.15%). Working Age Population: Of the 1601 veterans in the 16 to 64 age group 402 were female, reflecting 1.0% of the counties working age female population (Scottish Average 0.67%) whilst 2735 were male, reflecting 7.3% of the working age male population (4.46% Scottish Average). Of the working age population of veterans, 14.4% of were female and 85.8% male. Older Population: Of the 1530 veterans in the over 65 age group,172 were female reflecting 1.71% (Scottish Average 1.48%) whilst 1360 were male, reflecting 16.4% (16.15% Scottish Average). Of the older population of veterans, 11.2% were female and 88.8% male. Types of Service: Of the 3131 veterans in this County, 774 (24.7%) had served in the Reserves (Scottish Average: 21.9%), 2133 (68.1%) in the Regular Forces (Scottish Average 72.2%) and 224 (7.2%) had served in both (Scottish Average 5.9%). Of the 402 veterans that are female, 151 (37.6%) had served in the Reserves (Scottish Average 31.1%), 237 (59.0%) in the Regular Forces (Scottish Average 66.2%) and 14 (3.5%) in both (Scottish Average 2.8%). Of the 2735 veterans that are male, 622 (22.7%) had served in the Reserves (Scottish Average 20.7%), 1898 (69.4%) in the Regular Forces (Scottish Average 73.0%) and 215 (7.9%) had served in both (Scottish Average 6.4%). Page 187 of 216
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Additional information can be found through the Census Interactive Map Tool. https://www.scotlandscensus.gov.uk/atlas/choropleth/population/uk-armed-forces-veterans/ex-service-ind-p/uk-armed- forces-veteran?msoa=S13003018 Extract as an example Page 188 of 216
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School Data Comparison Overall, between 2024 to 2025 there has been an increase of 44 Armed Forces Pupils in Midlothian this increase includes veteran’s children and regular serving personnel. Schools Data 2024 School Total Armed Forces Pupils Regular Regular and Reserve Regular and Veteran Reserve Reserve and Vet Veteran Beeslack Community High School 38 27 1 10 Bilston Primary School 2 1 1 1 1 Bonnyrigg Primary School 16 5 1 10 Burnbrae Primary School 8 1 7 Cornbank St James Primary School 12 3 3 1 7 Cuiken Primary School 7 1 1 5 Dalkeith High School 7 1 6 Danderhall Primary School 4 3 1 Gore Glen Primary School 6 2 4 Gorebridge Primary School 10 2 1 9 Hawthornden Primary School 4 1 3 King's Park Primary School 7 7 Lasswade High School 12 1 3 8 Lasswade Primary School 13 2 1 10 Lawfield Primary School 1 1 Loanhead Primary School 4 1 3 Mauricewood Primary School 54 46 2 6 Mayfield Primary School 1 1 Page 189 of 216
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Moorfoot Primary School 2 1 1 Newbattle High School 10 1 1 2 1 9 Newtongrange Primary School 9 1 8 Paradykes Primary School 8 1 3 4 Penicuik High School 21 4 1 1 3 16 Rosewell Primary School 8 2 6 Roslin Primary School 8 5 1 3 1 Sacred Heart Primary School 13 6 1 4 3 Saltersgate 2 2 Scots Corner Early Learning and Childcare Centre 10 10 St Andrew's Primary School 1 1 St David's Primary School 1 1 1 1 St David's RC High School 10 4 2 4 St Luke's Primary School 1 1 St Mary's Primary School 6 6 St Matthew's Primary School 2 2 Stobhill Primary School 9 2 1 6 Strathesk Primary School 9 2 3 4 Tynewater Primary School 3 3 Woodburn Primary School 3 1 1 1 2 Total 342 132 3 4 45 4 175 Page 190 of 216
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School Data 2025 School Total Armed Forces Pupils Regular Reserve Veteran Undisclo sed Regular and Reserve Regular and Veteran Reserve and Veteran Beeslack Community High School 48 33 1 15 Bilston Primary School 9 3 6 Bonnyrigg Primary School 18 7 11 Burnbrae Primary School 8 8 Cornbank St James Primary School 11 3 3 6 Cuiken Primary School 6 3 1 3 1 Dalkeith High School 5 5 Danderhall Primary School 4 3 1 Gore Glen Primary School 9 3 2 5 1 Gorebridge Primary School 11 3 10 2 Hawthornden Primary School 4 1 1 2 King's Park Primary School 8 1 7 Lasswade High School 16 2 4 10 1 1 Lasswade Primary School 15 2 1 12 Page 191 of 216
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Lawfield Primary School 1 1 Loanhead Primary School 5 5 Mauricewood Primary School 52 44 3 6 1 Mayfield Nursery School 1 1 Mayfield Primary School 2 2 Moorfoot Primary School 1 1 Newbattle High School 14 1 3 12 1 1 Newtongrange Primary School 13 8 5 Paradykes Primary School 8 1 3 4 Penicuik High School 22 3 2 19 1 1 Rosewell Primary School 11 1 2 8 Roslin Primary School 6 5 1 1 1 Sacred Heart Primary School 14 6 5 5 2 Saltersgate 3 1 2 Scots Corner Early Learning and Childcare Centre 13 13 St Andrew's Primary School 3 1 1 1 St David's Primary School 1 1 1 1 St David's RC High School 8 3 2 3 St Luke's Primary School 1 1 Page 192 of 216
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St Mary's Primary School 3 3 St Matthew's Primary School 2 2 Stobhill Primary School 7 1 1 5 Strathesk Primary School 12 2 4 7 1 Tynewater Primary School 5 5 Woodburn Primary School 6 1 1 5 1 Grand Total 386 146 45 207 6 4 8 4 Valuing Armed Forces Contributions to our Communities Armed Forces personnel, veterans and their families are assets within our communities. They and their families bring a range of skills, experiences and unique expertise to the local community and share these through a variety of roles such involvement in local communities, employment, training, volunteering, music and learning. For example, the new Midlothian Pipes and Drum Project for children and young people. We also wish to ensure armed forces children and young people are aware of the promise and our work through the covenant builds and encompasses work on United Nations Children’s Rights (UNCRC) and trauma informed approaches. The Promise is a commitment to provide all wee ones, children and young people with experience of the care system in Scotland the opportunity to grow up loved, safe, and respected, so that they can reach their full potential. In Midlothian, the work of the Promise is very progressive and reaches out to gather the voices of our care experienced population. Please view how we are upholding the Promise in Midlothian - Our progress | The Promise | Midlothian Council Armed Forces Covenant Partners – Partners have told us that they will use the Armed Forces Covenant Partnership to forge collaborative working, promote the needs of individuals, families and staff and share best practice. Page 193 of 216
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Armed Forces (HQ Edinburgh Garrison and 2 SCOTS) The Garrison HQ is based in Edinburgh Castle. Representatives from 2 SCOTS are based at Glencorse Barracks who are engaged at a local level with both Midlothian Council and the Community Planning Partnership. There are strong links with the local armed forces community development worker for the area. Midlothian Council The Local Authority promotes the Armed Forces Covenant within Midlothian. They work closely with partners to make it easier for serving personnel, reservists, veterans and their families to integrate seamlessly into their local communities, and to help them access any help or support they might need. In addition, as part of our work through ADES (Association of Directors of Education in Scotland), an armed forces family lead officer is identified that is currently a service manager from Children Services. This work builds on the previous relationships and now supports meeting the Armed Forces Covenant Duty which is now enshrined in law. For housing, the Housing Services Manager is the key contact. If you require assistance related to any matters linked to the armed forces covenant or are looking for direct support please contact: AFCC@midlothian.gov.uk Midlothian Council Elected Member Armed Forces Champion The Local Authority appoints an elected member to be the armed forces champion after every local government election. The current champion is Cllr Pauline Winchester and can be contacted via AFCC@midlothian.gov.uk Armed Forces Charities Sector Armed Forces Charities are well represented across Midlothian and there is a lot of support available to members of the Armed Forces Community. Information, advice and guidance are all available, whether for young Service leavers with a family looking for a job and a house, or older veterans, who might need help, support or friendship. Veterans Scotland provides a strategic overview in addressing veterans concerns and Lothians Veterans Centre provide a local input to address matters particular to Page 194 of 216
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Midlothian. The Scottish Veterans Fund provides single and multi-year funding grants to assist groups and organisations that provide support to Scotland’s Ex-Service personnel and their families. gensec@veteransscotland.org.uk Lothians Veterans Centre (LVC) LVC is a Dalkeith drop-in Centre which provides a wide range of support services to Veterans and their families. Support includes social inclusion, employability, housing, benefits, health and wellbeing. LVC enjoys strong links with Midlothian Council, the local serving community and many other support agencies. contact@lvc.scot Shared Parenting Scotland supports families across Scotland where parents live apart, and we have a particular commitment to improving outcomes for veteran and serving families. In Midlothian, we have an established relationship with the Lothians Veterans Centre, through which we provide outreach, guidance and mediation support to families adjusting to civilian life or managing the pressures of service-related separation. Vector24 provides free, reliable trauma informed transport support for veterans, serving personnel, and their families. Our outreach support officers who are staff and Volunteers support individuals reach vital healthcare, mental health, and community services, reducing isolation and supporting recovery. Sight Scotland and Sight Scotland Veterans Tackling vision loss together Sight Scotland supports people affected by sight loss at every stage of life. Our education services support blind and partially sighted pupils. We provide a transition residential care service for young adults with visual impairment and complex needs. The Scottish Braille Press provides accessible publications and supported employment for visually impaired people. Our helpline and community services not only help people affected by sight loss in later life but also provide support for family members Page 195 of 216
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Sight Scotland Veterans provides support to veterans in Scotland who are experiencing sight loss, regardless of the cause or at which point in their sight loss journey they are at. We support veterans of all ages with any sight loss diagnosis. We support veterans who are not registered with their sight loss and are currently struggling in everyday life. We can also support those who are caring for a veteran with sight loss, whether they are a family member or friend sightscotland.org.uk sightscotlandveterans.org.uk VOCAL (Voice of Carers Across Lothian) supports and empowers unpaid carers in Edinburgh and Midlothian through individual support, information, training and access to services. The Midlothian & East Lothian Chamber of Commerce is a membership organisation helping businesses achieve sustainable development and growth. Support is provided through educational opportunities, providing interns, mentoring, networking, training and skills seminars and B2B introductions. . Department of Work and Pensions (DWP) Jobcentre Plus works with Partners and Employers in Midlothian to maximise training and employment opportunities for reservists, veterans and their families. Veterans are signposted to organisations that offer specialised employability support. Employability support is coordinated through the Midlothian Local Employability Plus Partnership. Page 196 of 216
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Midlothian Federation of Community Councils The objective of the Federation is to further the aims and interests of the Midlothian Community by discussion and debate between representatives of member Community Councils. Community Councils are the most local tier of statutory representation in Scotland. They bridge the gap between local authorities and communities and help to make public bodies aware of the opinions and needs of the communities they represent. Midlothian Community Action (MCA) MCA has been a partner in Midlothian’s Armed Forces Covenant from its inception and has participated in highlighting grant opportunities. They have strong productive links with many voluntary and community groups across Midlothian. MCA also provides support to Midlothian residents looking to volunteer. NHS Lothian One of NHS Lothian's objectives is to improve the health of the population it serves. The NHS is continuing to explore with partnership organisations how best to serve veterans, and their specific needs, and also to support families while regulars, and reservists are away on operations in order to meet their Armed Forces Covenant Duty. The NHS Lothian key contact for armed force families is the Executive Medical Director, Medical Director’s Office, Main point, 102 West Port, Edinburgh, EH3 9DN. Single Midlothian Plan – Community Planning Partnership There is a space for representation of the Armed Forces Covenant at the Community Planning Board level, currently the elected member champion attends the Board and links directly with the Armed Forces on relevant issues. An annual report will also be presented to the Community Planning Partnership Board on progress implementation of the Midlothian Armed Forces Action Plan. Page 197 of 216
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Partnership Working The Midlothian AFC Partnership meets to discuss the operational delivery of actions within the action plan. The entire Covenant structure continues to be underpinned further by strong working relationships between Council Officers, the Armed Forces Staff and the wider stakeholder community. Armed Forces Covenant Trust Fund The Armed Forces Covenant Fund Trust makes grants to support members of the Armed Forces community. Currently there are a number of programmes open: Full details at: Programmes - Armed Forces Covenant Fund Trust Midlothian Armed Forces Covenant Partnership Lothian Armed Forces and Veterans Group Lothian Armed Forces and Veterans Project Page 198 of 216
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Midlothian Armed Forces Covenant Action Plan (2025–2030) We are committed to the following six overarching actions: 1. Raise awareness of the armed force covenant and duty 2. Increasing knowledge of our armed forces communities and needs 3. Reducing barriers through accessing bespoke funding 4. Ensure representation at local and national armed forces covenant meetings 5. Ensure presentation of armed forces community at Midlothian Community Planning Board. 6. Reviewing the plan annually and identify further improvement areas. Midlothian Armed Forces Covenant – Action Plan (2025–2030) 1. Awareness & Promotion Goal: Raise awareness of the Armed Forces Covenant, legal duties, and available support. Actions: • Publish annual report with data, funding, and success stories. • Promote the LearnPro module and host annual twilight sessions. • Include Armed Forces info on ASN/Inclusion staff website. • Host annual funding surgery (September). • Celebrate Armed Forces Child Month (April). • Increase Armed Forces data in the Midlothian Profile. Indicators: Module completions, session attendance, funding applications. Leads: Annette Lang, Hazel Moar, Magnus Inglis, Michelle Strong, Rebekah Sullivan. Page 199 of 216
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2. Supportive Enrolment & Transitions Goal: Ensure smooth school transitions for Armed Forces children. Actions: • Reframe enrolment letters. • Attend enrolment planning meetings. • Provide transition supports • Assess learning gaps and provide support. Indicator: 100% enrolment within 3 weeks of arrival. Leads: Hazel Moar, Michelle Strong. 3. Educational Monitoring & Equity Goal: Track and support educational outcomes for Armed Forces children. Actions: • Monitor attainment, attendance, wellbeing, exclusions. • Support transitions and subject choices. • Implement MIPSA Covenant Project. Indicators: Monthly tracking, quarterly reporting to Excellence & Equity Board. Leads: Hazel Moar, Michelle Strong, Lydia Kerr. Page 200 of 216
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4. Children’s Services & Additional Support Needs (ASN) Support Goal: Minimise gaps in support for children with ASN. Actions: • Accept referrals pre-relocation. • Complete S23 assessments within 2 weeks. • Ensure continuity of support for children with POCs. • Discuss eligible cases at first TATC post-relocation. Indicators: Timely assessments and reduced support gaps. Leads: Emma Clater, Amy Evans. 5. Housing Support Goal: Improve housing support for Armed Forces personnel and veterans. Actions: • Promote LearnPro module to housing staff. • Monitor housing applications. • Appoint Housing Champion. • Promote equipment/adaptations via Council webpage. Indicators: Module completions, baseline data, champion support cases. Leads: Claire Douglas, Angela Harris, Derek Oliver, Ashley Atkins. Page 201 of 216
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6. Health & Social Care Goal: Improve access and identification for Armed Forces families. Actions: • Support self-identification. • Increase staff awareness and training. Indicators: Baseline data, trained staff numbers. Lead: Nick Clater, Ruth Flynn 7. Staff Training & Recruitment Goal: Embed Covenant awareness in Council operations and other organisations Actions: • Explore mandatory LearnPro training for council staff • Create a Midlothian Council internal communications campaign. • Midlothian Council to explore a guaranteed interview scheme for veterans/cadets and potentially extend to spouses. • Vocal deliver Think Carer training for those who could act as referrers for armed forces personnel and veterans Indicators: Training completions, scheme uptake. Leads: Ashley Aitkens, Derek Oliver, Louise Bell and Vocal Carla Bennett Page 202 of 216
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8. Recognition, Employability and Community Learning Goal: Celebrate contributions and improve access to services. Actions: • Create uniformed awards including cadets. • Monitor NOLB support for veterans/spouses. • Track Community Lifelong Learning and Employability (CLLE) engagement with Armed Forces families. • CLLE courses will be offered specifically for Veterans and their families Indicators: Awards created and participant numbers. Leads: Julia Ellison, Lesley Kelly, Annette Lang and Police Scotland 9. Data & Communications Goal: Improve data collection and public awareness. Actions: • Encourage declaration of Armed Forces links in school forms. • Extract and promote School Census data. Leads: Hazel Moar, Michelle Strong, Ashley Atkins, Graham Andrew. Page 203 of 216
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10. Joint Events & Third Sector Engagement Goal: Promote services and build partnerships. Actions: • Create Armed Forces support bulletins for example in Armed Forces Week annually. • Host two joint events annually. • East and Midlothian Chamber to host an event to support businesses to sign up to the armed forces covenant. • VOCAL to provide support to family members, partners, relatives or friends who are unpaid carers for armed forces personal and veterans. Hold one peer event each year. Leads: Lesley Kelly, Midlothian Community Action, Lothian Veterans Centre, Veterans Scotland, Sight Scotland and Vocal. 11. Reporting and Evaluation The Midlothian Armed Forces Covenant Working Group will produce an annual tracking report of progress and this will be presented to Midlothian Council Corporate Management Team for scrutiny and evaluation. Page 204 of 216
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Penicuik High School Refurbishment and Expansion – Update Report. Report by Derek Oliver, Acting Executive Director – Children Young People & Partnerships Report for Decision 1 Recommendations It is recommended that the Council: 1. Approves the provision of a revised capital expenditure budget in the General Services Capital Plan (GSCP) of £55.378m, an increase of £10.668m from the existing £44.710m (the previous estimated capital cost of the refurbishment and extension of Penicuik High School) and notes the net notional capital cost of £33.395m once Scottish Government LEIP funding is taken into account. 2. Notes the progress made with the Refurbishment and Expansion of Penicuik High School and that the current design proposal differs from the original proposal. 2 Purpose of Report/Executive Summary The purpose of this paper is to update Council on the progress of the Penicuik High School refurbishment and expansion project. It outlines key developments since the initial approval in June 2023, including changes to the design strategy, financial implications, contractor appointment and site surveys. The paper seeks Council approval for an additional £10.668 million in capital funding to support the delivery of the revised scheme, bringing the total approved budget to £55.378 million. Since the Council approved the initial proposal in June 2023, the Penicuik High School project has undergone a strategic review to ensure the budget is closely monitored while meeting educational requirements. The original decant strategy, which involved modular accommodation at Montgomery Park, proved financially unviable. As a result, the existing 1960s building was adapted to accommodate pupils during construction, providing a practical and cost-effective alternative. Midlothian Council Tuesday 16 December 2025 Item No 8.12 Page 205 of 216
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Date: 01 December 2025 Report Contact: Marc Bedwell, Programme Manager – Learning Estate Children, Young People & Partnerships marc.bedwell@midlothian.gov.uk Page 206 of 216
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3 Background/Main Body of Report 3.1 Programme The Penicuik project was originally scheduled for completion in August 2026, as set out in the approved Council paper from June 2023. Since then, several factors have impacted the programme, resulting in a revised completion date. Following Council approval, additional time was required to review decant options and appoint an architect. The programme originally planned for RIBA Stage 1 to run from January to March 2024. However, this stage extended until May 2024 due to prolonged stakeholder engagement and additional design development. These activities were necessary to ensure that the brief fully reflected user requirements and project objectives but added extra time to the schedule. Stage 2 was originally expected to conclude by mid-June 2024 but extended into early August 2024 following the extended Stage 1 and further design refinement to address feedback from stakeholders. Overall, the delays in Stages 1 and 2 were driven by the need for thorough engagement and design development to achieve a robust and agreed brief. While these steps were essential for project quality and stakeholder alignment, they resulted in a later start for subsequent stages and significantly delayed contractor procurement, contributing to overall programme slippage. Primary issues of the programme slippage which has shifted the midpoint of construction further are market volatility and inflation. These have driven up the cost of materials, labour, and services beyond what was originally forecast. This has been brought about due to the budgetary challenges which extended the pre-construction period to carry out significant a value engineering exercise. Following the contractor appointment, a series of design sprints and a value engineering exercise were undertaken to optimise the design and align with budget requirements. This process also reduced the building footprint, requiring further design adjustments and coordination to allow the revised design to be considered under the original planning application. Following the completion of the design sprint sessions the project identified potential savings of £4.665m. This saving required further validation through the market testing process. Following these activities, the projected Phase 1 (School) completion was January 2028. The planned ‘Decant Works’ to facilitate the move for all pupils and staff from the 1930’s building to the 1960’s building were completed on programme in August 2025, and ‘Advance Works’ were able to proceed within the now unoccupied 1930’s building. These works comprised intrusive ‘Refurbishment and Demolition’ Asbestos Surveys, Structural Surveys, sample rooms and a series of diversions of services to facilitate commencement of demolition to the Page 207 of 216
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1930’s block. As a result of these cumulative delays, financial close and the start of main construction moved from mid-2025 to spring 2026. The delays have been driven by extended planning and design reviews, value engineering changes, and slower-than-expected approvals. While these steps were necessary to ensure safety, cost control, and quality, they have pushed the programme back. Following the receipt of the final agreed tender figure, the next major milestone will be the contract award in April 2026. This marks the transition from project planning into delivery. Ahead of this, early works mobilisation will begin in March 2026. Mobilisation will run for four weeks leading to the start on site April 2026. Phase 1 mobilisation will follow immediately after the contract award starting in April 2026 continuing until May 2026. This ensures all resources and logistics are in place for the main works. The site will then be ready for Phase 1 works to begin in May 2026. Early works, focused on demolition and groundworks, will run from April to July 2026. These activities will prepare the site for the new school building and refurbishment. Advanced works, such as asbestos removal and utility diversions, will have been completed by March 2026. The main construction programme will start on July 2026 and continue through to 2028. Phase 1, which involves building the new school, is scheduled for completion and occupation by March 2028, although this remains a risk. Phase 2 will then address the demolition of the 1960s block and landscaping, with practical completion expected by November 2028. This timeline below shows the critical path for the project. It commences with asbestos work instructions on 05 December 2025. Asbestos removal occurs in the West Wing by 12 February 2026, then in the East Wing by 12 March 2026. Following these removals, temporary works in the 1930’s building require to be completed by 16 March 2026, followed by demolition on 26 June 2026. The courtyards and new extension construction completed 28 January 2028. Commissioning and handover are forecast to be 3rd March 2028. The decant date is still to be confirmed. Finally, Phase 2 landscaping completes the project on 30 October 2028. Page 208 of 216
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2025 Task Critical Path Dates December January February March April May June July August September October November December January February March April May June July August September October November December January February March April May June July August September October November December Instruct Asbestos Works 05 Dec. 2025 Asbestos Works (to West Wing) 12 Feb. 2026 Asbestos Works (to East Wing) 12 Mar. 2026 Temporary Works within the 1930's Building 16 Mar. 2026 Demolition Works to the 1930's Building 26 Jun. 2026 Courtyards and New Extension 28 Jan. 2028 Commissioning and Handover 03 Mar. 2028 Decant Date TBC Phase 2 Landscaping 30 Oct. 2028 2026 2027 2028 Appendix B illustrates full details of the critical path. 3.2 Project spend to date The total spend to date on the Penicuik High Project amounts to £4.215 million. The total expenditure on the Penicuik High Project to date covers several key cost categories. These include legal costs associated with initial and ongoing requirements, as well as professional fees, which represent the largest share of spending and reflect significant investment in design, consultancy, and project management services. Contractor costs highlight progress made on construction activities and also include survey-related expenses. Separate survey costs have been incurred to ensure accurate site assessments and compliance with project specifications. Utilities have been covered to maintain essential services during the development phase, and internal costs have supported project administration and coordination. Additionally, a study related to EnerPhit standards was commissioned, although this option did not proceed further. Further surveys will be required as the project progresses, including intrusive investigations into the stonework of the building and rot surveys within the roof void, to inform design and ensure structural integrity. 3.3 Main works Central to the Main Works is the construction of a new three-storey extension, which will infill the existing courtyard spaces and replace the existing 1960’s block. This new build element will provide modern, Page 209 of 216
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flexible teaching and support spaces, designed to meet current educational standards and improve connectivity across the site. Alongside the new extension, the 1930s building will undergo extensive refurbishment, both internally and externally. Works will include upgrades to mechanical, electrical, and plumbing systems, improvements to insulation and airtightness, and restoration of key architectural features. The refurbishment will ensure the building meets modern performance and accessibility standards while respecting its listed status. Once pupils have been successfully decanted back into the completed 1930s building and new extension, the 1960s block will be demolished. This will free up space for the final phase of the project, which includes the delivery of new hard and soft landscaping across the site. These external works will enhance the school’s outdoor environment, improve access and circulation, and support outdoor learning and recreation. Together, these works will deliver a high-quality, future-ready learning environment for the Penicuik community. 3.4 Asbestos Management The asbestos surveys carried out at Penicuik High School and the earlier demolition survey identified a range of asbestos-containing materials (ACMs) across multiple areas of the site. The planned remediation works aligns with these findings and breaks down the removal and decontamination works into phases. Compliance with statutory notifications and safety protocols is essential to ensure the project is delivered safely and in accordance with regulations. The building where all pupils and staff currently occupy is fully safe to use, with relevant documentation maintained Regular inspections and updates to the asbestos register ensure that the building remains safe for daily use. The health and safety of pupils and staff is our highest priority, and the current management approach eliminates risk from asbestos when left undisturbed and properly controlled and managed. To provide reassurance, staff, pupils, and the wider community were provided with a set of FAQs which detailed all issues relating to asbestos and assured these stakeholders that the school was safe to use. The FAQ were communicated through the school’s website and Group Call to ensure that all parents received the information. Page 210 of 216
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4 Report Implications (Resource, Digital and Risk) 4.1 Resource Capital Expenditure The total expected development costs are now forecast to be £54.617m, phased as per the table below. This represents an increase of £9.907m from the existing capital expenditure budget in the General Services Capital Plan. Table 1: General Services Capital Plan Budget Requirement Financial Year To 31/03/2024 £000’s 2025/26 £000’s 2026/27 £000’s 2027/28 £000’s 2028/29 £000’s Total £000’s Existing Budget 1,869 7,702 16,207 17,612 1,320 44,710 Revised Budget 1,869 7,702 20,992 23,107 1,708 55,378 Variance 0 0 +4,785 +5,495 +388 +10,668 Funding of Capital Expenditure The forecast Penicuik School total capital costs of £55.378 million are expected to be funded through a mixture of funding sources as follows:- • The Council will need to prudentially borrow £55.378 million of capital costs; • The project is included in Phase 2 of the Learning Estate Investment Programme, where the Scottish Government will provide a revenue support grant payable over 25 years following the completion of the building, to support operational/revenue costs of the school, based on the Council meeting the delivery of strategic outcomes (energy, condition, digital and economic).Whilst this is payable as a cash revenue grant over 25 years (and therefore does not impact/reduce the requirement for the Council to borrow during the construction phase), it equates to a theoretical capital cost support of £21.983 million The capital cost of £55.378 million will be partly offset by the Scottish Government revenue support grant available (payable over 25 years and theoretically supporting £21.983 million of capital costs) subject to the successful achievement of outcomes over that 25 year period, thereby reducing the notional capital account impact to the Council to £33.395 million. Page 211 of 216
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Penicuik Refurbishment & Extension – Impact on Revenue Budget The ‘direct consequences of capital’ impact on the Council’s revenue budget (Loan Charges net of Scottish Government LEIP Revenue Grant Funding) is as set out in Table 2 below:- Table 2: Direct Consequences of Capital Impact on Revenue Budget Financial Year 2025/26 £000’s 2026/27 £000’s 2027/28 £000’s 2028/29 £000’s 2029/30 £000’s 2030/31 £000’s Loan Charges 269 868 1,769 2,620 2,622 2,622 SG LEIP Revenue Grant 0 0 0 -1,815 -1,815 -1,446 Net Revenue Budget Impact 269 868 1,769 805 807 1,176 4.2 Digital There are no digital implications of this report. 4.3 Risk See Risk Assessment below. These Risks have been closely monitored throughout the pre-construction period, and their mitigation measures ensure that cost impacts are being minimised. Risk Description and Mitigation Budget The budget reconciliation advises a significant gap between the advised budget and the current projected costs. Whilst attempts have been made to mitigate through focused VE, reviewing Abnormals and Maintenance budget, the risk of the budget being insufficient remains ongoing. Ongoing monthly reporting on budget position is in place on the lead up to this committee. Utilities – Drainage Solution There is a risk that the existing foul and/or surface water drainage or combined drainage does not have sufficient capacity to deal with the new load from foul and surface water for the alterations to the 1930s building. Etive have been engaging with Scottish Water for approval following the CCTV survey and are continuing to chase for updates Programme Slippage Contractor / Design Team / MLC are refining programme options that take into account early / advanced works to mitigate the effects of programme slippage, while also protecting MLC’s financial position. Page 212 of 216
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Substructure Etive have advised piling is required due to the poorer than expected ground conditions. This will be mitigated through early engagement with a specialist gas subcontractor. Obtaining advice quickly, coordinating with Morrison Construction and building in time to the programme to review and incorporate advise will further mitigate this risk Existing Building Condition Elements of the existing 1930s building are found to be significantly lacking in regard to energy efficiency, meaning the requirement for substantial upgrades to meet LEIP standards. Mitigations include in-depth building surveys to determine which elements can remain in situ and which elements require replacement, and which elements can still be repaired. 4.4 Ensuring Equalities (if required a separate IIA must be completed) This report does not have equalities implications. 4.5 Additional Report Implications (See Appendix A) See Appendix A Page 213 of 216
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Appendices APPENDIX A – Report Implications APPENDIX B – Critical Path Programme A.1 Key Priorities within the Single Midlothian Plan A.2 Single Midlothian Plan and Business Transformation Themes addressed in this report: Community safety Adult health, care and housing Getting it right for every Midlothian child Improving opportunities in Midlothian Sustainable growth Business transformation and Best Value None of the above A.3 Key Delivery Streams Key delivery streams addressed in this report: One Council Working with you, for you Preventative and Sustainable Efficient and Modern Innovative and Ambitious None of the above A.4 Delivering Best Value The Stage 1 process of appointing a contractor is designed to ensure the delivery of a project that represents best value for money as the design is tested and priced to ensure it can be delivered within budget. A.5 Involving Communities and Other Stakeholders Consultation with a wide range of stakeholders including neighbours, Community Councils and residents has been undertaken through the statutory catchment review, design development process and the planning application process. A.6 Impact on Performance and Outcomes These proposals respond to key outcomes in the Single Midlothian Plan. Page 214 of 216
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A.7 Adopting a Preventative Approach This has been considered as part of process of developing visions and objectives for the Penicuik Refurbishment and Expansion Project. A.8 Supporting Sustainable Development Page 215 of 216
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Appendix B – Critical Path Programme Page 216 of 216