Notice of Meeting and Agenda
Midlothian Council
Venue: Council Chambers, Midlothian House, Dalkeith, EH22 1DN
Date: Tuesday, 20 August 2019
Time: 11:00
Director, Resources
Contact: Clerk Name: Mike Broadway Clerk Telephone: 0131 271 3160 Clerk Email: [email protected]
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 164
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 None received
5 Minutes
Minute of Meeting of Midlothian Council of 25 June 2019 submitted for approval as a correct record.
Minutes of Meetings for noting, information and consideration of any recommendations contained therein - Minute Volume attached
Minute Volume Index 5 - 6
6 Questions to the Council Leader
None received.
7 Motions
7.1 Motion by Councillor Hardie, seconded by Councillor Smaill 7 - 8
7.2 Motion by Councillor Smaill, seconded by Councillor Munro 9 - 10
8 Public Reports
8.1 Best Value Assurance - Report by Chief Executive 11 - 74
8.2 Audit Committee Annual Report 2018-19 - Report by Chair of the 75 - 82 Audit Committee
8.3 Financial Monitoring 2019/20 – General Fund Revenue - Report 83 - 106 by Head of Finance and Integrated Service Support
Page 2 of 164 8.4 Housing Revenue Account - Revenue Budget and Capital Plan 107 - 112 2019-20 - Report by Head of Finance and Integrated Service Support
8.5 General Services Capital Plan 2019-20 - Report by Head of 113 - 122 Finance and Integrated Service Support
8.6 Low Emission Zones (LEZ) Consultation - Report by Director, 123 - 130 Resources
8.7 Learning Estate Strategy Update - Report by Director, Education, 131 - 138 Communities and Economy
8.8 Learning Estate Strategy Investment Programme and Funding 139 - 142 Model – Report by Director, Education, Communities and Economy
8.9 European Social Fund Programmes 2014 - 2020 - Report by 143 - 146 Director, Education, Communities and Economy
8.10 Lease/Purchase Electric Vehicles and Provide Electric Vehicle 147 - 150 Charging Infrastructure - Report by Director, Resources
8.11 Standards Commission Decisions - Report by Monitoring Officer 151 - 164
9 Private Reports
(A) TO CONSIDER RESOLVING TO DEAL WITH THE UNDERNOTED BUSINESS IN PRIVATE IN TERMS OF PARAGRAPH 1 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.
9.1 Senior Leadership Review - Report by Chief Executive
• 1. Information relating to a particular employee, former employee or applicant to become an employee of, or a particular office holder, former office-holder or applicant to become an office-holder under, the authority.
9.2 Appointment of Joint Director, Health and Social Care - Report by Chief Executive
• 1. Information relating to a particular employee, former employee or applicant to become an employee of, or a
Page 3 of 164 particular office holder, former office-holder or applicant to become an office-holder under, the authority.
10 Date of Next Meeting The next meeting will be held on 1 October 2019 at 11.00am.
Page 4 of 164 Midlothian Council Minute Volume
Presented to the Meeting of Midlothian Council on Tuesday, 20 August 2019
Page 5 of 164 1 Minutes of Meetings submitted for Approval
Midlothian Council 25 June 2019 3 - 26
2 Minutes of Meetings submitted for Consideration Approved Minutes for Noting, Information and Consideration of any recommendations contained therein
Performance, Review and Scrutiny Committee 19 March 2019 27 - 34
Community Asset Transfer Committee 30 April 2019 35 - 40
Planning Committee 14 May 2019 41 - 50
Business Transformation Steering Group 20 May 2019 51 - 56
Cabinet 21 May 2019 57 - 78
Audit Committee 28 May 2019 79 - 86
Business Transformation Steering Group 10 June 2019 87 - 92
Business Transformation Steering Group 17 June 2019 93 - 96
Business Transformation Steering Group 24 June 2019 97 - 100
Business Transformation Steering Group 25 June 2019 101 - 104
3 Minutes of Meetings submitted for Information Approved Minutes of Outside Organisations to which Council appoints representatives
No Minutes submitted for information
Short Life Working Group
Cross Cutting Service Review – Waste Services 6 June 2019 105 - 110
Page 6 of 164 Midlothian Council Tuesday 20 August 2019 Item No 7.1
Scottish�� Conservatives ?�
Midlothian Council Conservative Group
Midlothian Council recognises that Scotland has been identified as having the highest death rate from drug use in Europe. Furthermore that Midlothian was identifiedas being in the worst half of Local Authorities within Scotland fordrug deaths per thousand residents. Despite the tough financial pressure that the council faces it is clear that council needs to do more to take action on the devastating drug crisis, which is especially harmful on some of our most vulnerable communities.
Council resolves to:
1. Recognise that Midlothian has a significantdrug problem and is in the highest half of local authorities for drug deaths per thousand people. 2. To ensure that the Police Community Action Teams continue to take a particularfocus on tackling supply of drugs, and congratulates them on the reported£1m of seizures in the last 12 month reportingperiod 3. Investigate via a paper, to be presented at full Council on 12th of November 2019, the opportunitiesto fund a dedicated counter drugs team forvulnerable residents in social housing: to be funded by up to £500,000 per annum from the Housing Revenue account, subject to ScottishGovernment approval 4. To include an easily accessed, dedicated drugs advice section on the Midlothian Council Website. 5. To work with partnerorganisations to include additional anti-drugs advice in both primary and SecondarySchools
Proposed by: Seconded by:
Councillor Andrew Hardie Councillor Peter Smail!
Page 7 of 164
Page 8 of 164 Midlothian Council Tuesday 20 August 2019 Item No 7.2
Scottish�� Conservatives ��
Midlothian Council Conservative Group
Midlothian Council recognises the concerns of local residents due to litter, and in particular instances of fly tipping. The council furtherunderstands the limited resources and power it has in order to tackle these issues. Council should do more to tackle these issues.
Some residents have also raised concerns that they have been unexpectedly turned away from Penicuik Recyclingcentre due to the perceived size of their vehicles, including standard people carriers, conventional four wheel drives and private residents' own pick-up style vehicles. Turning residents away who have a legitimate expectation to use the recyclingfacilities increases the likelihood of fly tipping.
Council further notes the damage that fly-tipping causes to Midlothian's environment and wildlife and recognises the statement from Keep Britain Tidy imploring that "It's got to be easy for people to do the right thing otherwisewe will see an increase in fly-tipping."
Council resolves that:
1. Officers should investigate the opportunities to toughen the procedures in tackling littering and fly tipping. 2. We supportincreasing the fixed-penalty notice for littering from £80 to £100 and maximum fly tipping finesto be increased from £50,000 to £100,000. 3. We send a letter from the local authority to the Scottish Government to advise of Midlothian Council's support for increasing the default on-the-spot litter finefrom £80 to £100, fly-tipping fine from £50,000 to £100,000 and to request that Ministers implement this change as quickly as possible. 4. Our staffensure that local residents are able to have reasonable use of their private vehicles at the recycling centres for private waste, including residents who use larger vehicles. 5. We, and the police authorities, Investigate opportunities for naming and shaming offenders in relation fly tipping, including both commercial and private offenders.
Proposed by: Seconded by:
Councillor Peter Smaill Councillor Kieran Munro
Page 9 of 164
Page 10 of 164
Midlothian Council Tuesday 20 August 2019 Item No 8.1
Best Value Assurance Report
Report by: Dr Grace Vickers, Chief Executive
1. Purpose of Report
The purpose of this report is to advise council of the publication, by the Accounts Commission of the Best Value Assurance Report for Midlothian Council on 4 July 2019. The report was considered by the Accounts Commission at their meeting on 13 June 2019 and their findings added to the published report attached at Appendix 1. In response to the report a supporting action plan is included in Appendix 2.
2. Background
2.1 Audit Work to support the Best Value Assurance Report for Midlothian Council was carried out between January and March 2019. The audit focused on 5 key questions:
1. Does the council have clear strategic direction? 2. How well is the council performing? 3. Is the council using its resources effectively? 4. Is the council working well with its partners? 5. Is the council demonstrating continuous improvement?
2.2 The audit work was carried out by a team of auditors and best value auditors from Ernst & Young and Audit Scotland and involved an extensive review of documentation and interviews with elected members, council officers and partners.
2.3 The report concludes that the Council has delivered a number of ambitious projects since the Council’s last Best Value report, in particular in relation to schools, community campuses, housing and transport. Other key points in the report include:
• The council still needs to focus on some key requirements for Best Value, including financial sustainability, financial management and transformation. • There are risks around the council’s successful delivery of change due to its past track record and the scale of the challenge in both the medium and longer term. • Elected members need to work together to urgently agree the medium-term financial strategy and transformation programme. • Performance across services is mixed and the council is among middle performing councils using benchmarking indicators.
Page 11 of 164
• The council makes good use of data to understand and improve its performance. • Partnership working continues to be a strength at the council.
2.4 The report includes Accounts Commission Findings and a set of recommendations for the Council. The recommendations are detailed below and have informed the improvement action plan detailed in Appendix 2:
• As a matter of urgency, officers and elected members need to work together to develop and agree the medium-term financial strategy and progress the council’s transformation plans. • The council needs to develop and sustain more constructive relationships between members and between members and officers. It needs to implement effective cross-party governance arrangements to ensure that it delivers the medium-term financial strategy and transformation plans. • The council needs to ensure that workforce planning reflects the medium-term financial strategy. • The council should undertake a review of its capital programme, to ensure that the timeframes for delivery are achieved going forward and that monitoring and reporting mechanisms are enhanced to drive more accurate analysis and planning around capital work. • The council need to continue to implement financial planning arrangements to address budget gaps, underpinned by robust financial budgeting and monitoring arrangements. • The council should refine its vision in light of the outcome of consultation work through the Services with Communities transformation workstream and to ensure that it focuses its activity most effectively. • Elected members need to exercise appropriate scrutiny at all times, take ownership for personal development plans and take up relevant training opportunities. • The council should continue to build on positive elements of community empowerment. It should look to increase community ownership of local neighbourhood plans and work with communities to improve how they monitor progress.
2.5 Statutory provisions require the Council to consider the Commission’s findings within three months of receiving them and to publish a notice in a newspaper stating the time and place of the meeting in which the findings will be considered and describing the nature of those findings at least seven clear days before the meeting.
2.6 After the Council has met, the Commission must be notified of any decisions made and the Council must also publish in a newspaper a notice containing a summary, approved by the Commission, of the Council’s decision. The proposed Improvement Action Plan detailed in Appendix 2 responds to the Commission’s findings and the recommendations set out in the report. Further correspondence with the Commission to address the additional summary notice to be published in a newspaper will be undertaken by the Chief Executive
Page 12 of 164
3 Report Implications
3.1 Resource No additional resources are required as a result of this report, however future improvement planning actions will consider any future resource requirements.
3.2 Risk The Council has a statutory duty to respond to the published findings and this report and supporting improvement action plan responds to these duties in part. Further requirements following publication and presentation at Council will also be addressed.
3.3 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
3.4 Key Priorities within the Single Midlothian Plan Midlothian Council and its Community Planning Partners have made a commitment to treat the following areas as key priorities under the Single Midlothian Plan: • Reducing inequalities in learning outcomes • Reducing inequalities in health outcomes • Reducing inequalities in economic circumstance Best Value guidance identifies two cross-cutting themes which Best Value organisations should fully embrace across all activities by which they deliver their outcomes. The cross-cutting themes are Equality and Sustainability.
3.5 Impact on Performance and Outcomes The duty of Best Value in Public Services is as follows: • To make arrangements to secure continuous improvement in performance whilst maintaining an appropriate balance between quality and cost; and in making those arrangements and securing that balance, • To have regard to economy, efficiency, effectiveness, the equal opportunities requirements, and to contribute to the achievement of sustainable development. The above considerations inform the Medium Term financial Strategy.
Page 13 of 164
3.6 Adopting a Preventative Approach The Best Value duty supports the need to consider preventative approaches where appropriate and possible.
3.7 Involving Communities and Other Stakeholders The Best Value Assurance Report was produced following engagement with both officers and partners and following a significant review of documentation available, including documents from partners and communities.
3.8 Ensuring Equalities Whilst equalities is a key requirement for Best Value organisations, there are no direct equalities issues to be considered for this report.
3.9 Supporting Sustainable Development Sustainability is a key requirement for Best Value organisations and this will inform the improvement action plan presented to Council with this report.
3.10 IT Issues There are no IT issues arising from this report.
4 Summary The council recognises the need to deliver against the duty of Best Value and improvement action plan developed seeks to address the areas for change and improvement identified within the BVAR.
5 Recommendations
Council is asked to:
a) note the published Best Value Assurance Report b) support, as appropriate, the delivery of the improvement action plan c) note that the Chief Executive will progress the remaining statutory notice requirements with the Commission
Appendices: 1. Midlothian Council - Best Value Assurance Report 2. BVAR Action Plan
Date: 4 July 2019 Report Contact: Myra Forsyth Tel Number: 0131 271 3445 Email: [email protected]
Background Papers: None
Page 14 of 164 Best Value Assurance Report Midlothian Council
Prepared by Audit Scotland July 2019
Page 15 of 164 The Accounts Commission The Accounts Commission is the public spending watchdog for local government. We hold councils in Scotland to account and help them improve. We operate impartially and independently of councils and of the Scottish Government, and we meet and report in public.
We expect councils to achieve the highest standards of governance and financial stewardship, and value for money in how they use their resources and provide their services.
Our work includes: • securing and acting upon the external audit of Scotland’s councils and various joint boards and committees • assessing the performance of councils in relation to Best Value and community planning • carrying out national performance audits to help councils improve their services • requiring councils to publish information to help the public assess their performance.
You can find out more about the work of the Accounts Commission on our website: www.audit-scotland.gov.uk/about-us/accounts-commission
Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. We help the Auditor General for Scotland and the Accounts Commission check that organisations spending public money use it properly, efficiently and effectively. Page 16 of 164 Best Value Assurance Report: Midlothian Council | 3
Contents
Key facts 4
Commission findings 5
Audit approach 7
Key messages 9
Part 1. Does the council have clear strategic direction? 11
Part 2. How well is the council performing? 19
Part 3. Is the council using its resources effectively? 31
Part 4. Is the council working well with its partners? 38
Part 5. Is the council demonstrating continuous improvement? 43
Recommendations 50
Endnotes 51
Appendix. Best Value audit timeline 52
Links PDF download
Web link
Page 17 of 164 4 |
Key facts Midlothian
Dalkeith Loanhead
Bonnyrigg
Penicuik Gorebridge
136.6 square 91,340 3,764 18 miles
Area Population Workforce Elected members 7 Scottish National Party 6 Scottish Labour 5 Conservative and Unionist
£201 £28.4 £14.5 6,864 million million million
Council houses 2018/19 2018/19 Budget gap revenue budget1 capital budget2 2020/21–2022/23
1. Revenue budget covers day-to-day costs such as wages. 2. Capital budget covers the cost of major projects such asPage schools 18 and of housing. 164 Commission findings | 5
Commission findings
1 The Commission accepts the Controller of Audit’s report on Best Value in Midlothian Council. We endorse the recommendations set out by the Controller in his report and expect the council to act upon them. 2 Midlothian is an area experiencing rapid population growth, putting pressures on public services. This, combined with the council’s increasing funding gap, brings significant challenges in the medium to longer-term. 3 The council must make significantly better progress against its Best Value obligations. It has not made satisfactory progress since our previous Best Value report in 2012. Until progress is made, we cannot be confident that the council is well placed to deal with the significant cumulative funding gap of £14.5 million in the three years to 2022/23. 4 We emphasise the urgent need for the council to put in place a medium-term financial strategy to underpin better financial and service planning. It is encouraging that the new chief executive is making progress in implementing a recovery plan. This has led to a projected balanced budget for 2018/19 following overspends in the past two years. 5 We commend the council and its partners for delivering high-profile projects in schools, housing and transport. These are reshaping Midlothian’s public services and will help to meet population demands. However, we note underspend and slippage in the current capital plan. The council should assure itself that it has the capacity and skills to deliver on its ambitious and increasing capital programme. 6 Elected members need to show better leadership to deliver the necessary change and make difficult decisions about the future shape of services. The duty of Best Value is a responsibility of all elected members. We expect members to work together, and with officers, to fulfil their corporate responsibilities. We are pleased that elected members are developing their scrutiny responsibilities; we urge members to take up training and development opportunities, including personal development planning. 7 The council is improving services in priority areas such as education and services for children. While there is a mixed picture in the performance of services overall, it is encouraging that the council can identify where and how to improve.
Page 19 of 164 6 |
8 The council’s record of good joint working with its partners will be helpful in dealing with the challenges it faces, as will be continuing to develop its good working with communities. We encourage the council to continue working with its employees to help shape and deliver the transformation required in how it delivers services. 9 Our auditors will maintain a close interest in the council‘s progress and the Controller of Audit will keep us updated as appropriate.
Page 20 of 164 Audit approach | 7
Audit approach
1. The statutory duty of Best Value was introduced in the Local Government in Scotland Act 2003. The audit of Best Value is a continuous process that forms part of the annual audit of every council. Findings are reported each year through the Annual Audit Report. In addition, the Controller of Audit will present a Best Value Assurance Report to the Accounts Commission at least once during the five-year audit appointment for each council. This is the first assurance report on Midlothian Council. The findings from previous Best Value reports on the council are summarised in Exhibit 14 (page 44).
2. This report seeks to provide the Commission with assurance on the council’s statutory duty to deliver Best Value, focusing particularly on the Commission’s Strategic Audit Priorities. We are looking for councils to demonstrate Best Value by showing continuous improvement in how they deliver services. Depth of improvement refers to the extent to which services implement improvements across a council. The pace and depth of this improvement is key to how well councils meet their priorities in the future.
3. Our audit approach is proportionate and risk-based, and so reflects the context, risks and performance of the individual council. It also draws on the intelligence gathered from audit and scrutiny work carried out in previous years. In keeping with this approach, we did some initial work to identify risks and council initiatives to build into the scope of our audit. This included a review of previous audit and inspection reports and intelligence, review of key council documents, initial meetings with senior officers and reflecting on our wider public sector knowledge and experience. Key areas of focus for our audit are shown in Exhibit 1 (page 8).
4. The detailed audit work for this report was undertaken between January and March 2019. Our audit work included:
• interviews with elected members and senior officers
• observing a range of council and committee meetings
• reviewing relevant documents.
Page 21 of 164 8 |
Exhibit 1 Key areas of focus for our audit
Leadership and strategic direction How well the leadership of the council works together to deliver the priorities identified under the Single Midlothian Plan.
Performance and outcomes An overall assessment of outcomes and performance with a focus on key service areas, and the council’s reporting on these.
Change and improvement plans including: • delivery of significant initiatives • delivery of services to children and young people and adult social care • delivery of council transformation.
Process and results of self-evaluation How effectively the council implements methods of self-assessment to drive continuous improvement.
Financial management and financial planning How well it is planning its finances now and for the future.
Workforce planning How well it is planning the workforce that it needs to deliver services now and in the future.
Community and citizen engagement What is being done to make sure people have a say in the planning of services and how they are provided.
Transformational change and service redesign How new and more effective ways of providing local services are developed.
Source: Audit Scotland
5. The audit work was carried out by a joint team from Audit Scotland and Ernst & Young LLP, the appointed auditor. Audit work in future years, performed as part of annual audits, will include a follow-up on the findings from this report and additional audit work on other Best Value characteristics as appropriate.
6. We gratefully acknowledge the cooperation and assistance provided to the audit team by all elected members and officers contacted during the audit.
Page 22 of 164 Key messages | 9
Key messages
1 The council has delivered a number of ambitious projects since the last Best Value report, including schools, community campuses, housing and transport. Its overall pace of improvement is mixed. The council still needs to focus on some of the key requirements for Best Value, including financial sustainability, financial management and transformation. From 2016 onwards, the council has used its reserves rather than making some difficult decisions. 2 The council has made limited progress on its corporate transformation programme. This has contributed to its difficulties in reaching a sustainable financial position. The council has a lot to do to address the challenges that it faces and to deliver continuous improvement. It is focused on key priorities, but there are risks around the council’s successful delivery of change due to its past track record and the scale of the challenge. 3 Midlothian Council has the fastest growing population in Scotland. Along with an increasing funding gap, this means the council is facing significant challenges in the medium and longer-term. It has set out its plans for delivering education and housing to meet its increasing population, but it has still to agree and implement its medium-term financial strategy. Officers plan to present this to council in June. 4 There has been a lot of change in political leadership at the council in recent years. The council has had a minority administration since 2012 and elected members and officers have had to adapt and work in different ways. There are some tensions in relationships that can impact on the effectiveness of council business. Political leadership needs to improve through a shared responsibility to deliver Best Value. Elected members need to work together to urgently agree the medium- term financial strategy and transformation programme, required to address the council’s challenges. 5 Performance across services is mixed and the council is among the middle performing councils using benchmarking indicators. There is evidence of improvement in some of the council’s priority areas, including improving outcomes for children and young people. The council makes good use of data to understand and improve its performance.
Page 23 of 164 10 |
6 Partnership working continues to be a strength at the council. It works well with its partners on the Community Planning Partnership (CPP) and the Integration Joint Board (IJB). The council and its partners are working to a shared vision for the area through the Single Midlothian Plan. The council is working with its communities to deliver improvements and needs to build on this further with greater community involvement. It is taking action to further improve its relationships with the third sector.
Page 24 of 164 Part 1. Does the council have clear strategic direction? | 11
Part 1 Does the council have clear strategic direction?
Midlothian Council faces significant challenges from a fast- growing population. This impacts on housing, schools, transport and broader infrastructure. Since our last Best Value audit, the council has delivered several ambitious initiatives.
The council and CPP have one shared vision for Midlothian. The vision is broad with short-term priorities that reflect local needs. The council could refine its vision to ensure that it focuses its activity effectively.
The council has a lot to do to address its challenges and to deliver continuous improvement. It is focused on key priorities, but political leadership needs to improve through a shared responsibility to deliver Best Value.
All elected members need to work together to urgently agree the medium-term financial strategy and the changes to service delivery required to achieve financial sustainability and deliver the council’s priorities.
Midlothian council faces a number of challenges with the highest population growth and high rates of housing and transport development
7. Midlothian council is based around 16 communities with a mix of towns and rural areas. It is the fifth smallest Scottish mainland council by population and is the fastest growing by population according to 2026 estimates. Compared with the rest of Scotland, Midlothian has:
• a larger than average percentage of young people
• a smaller than average percentage of working-age people
• a pensionable age population in line with the average.
Page 25 of 164 12 |
8. Between 1998 and 2018 Midlothian’s population increased by 14 per cent, the fifth highest change in Scotland. Based on 2016 projections, the population of Midlothian is expected to increase to 100,410 by 2026, an increase of approximately 13.3 per cent.1 Midlothian Council is responding to this growth through its local development plans (LDPs). These designate areas for housing and economic development (Exhibit 2, page 13).
9. The LDPs identify two phases of growth: 2009–19 with 8,080 new homes, and 2019–20 with 4,410 new homes being built. The financial crash of 2008 meant that private developers held back from building homes, resulting in the current acceleration in house building. During the first phase of growth 5,590 new homes were built of the 8,080 target. Since 2008/09 Midlothian has ranked in the top four council areas for new homes built per 1,000 households across all sectors, including the private sector.2 Midlothian’s new housing brings with it a rise in the school-age population, with a projected 18 per cent rise in the under–16 population by 2026. This presents challenges for the council because of the costs of developing and staffing new schools and in delivering social care services.
10. Midlothian is part of the Edinburgh and South East Scotland City region. The Midlothian economy is rooted in the traditional and primary industries, but with a growing number of high–technology enterprises. Key business sectors include animal biosciences, life sciences, marine engineering and construction. Many such businesses are situated in the Midlothian Science Zone. The public sector is the largest employer.
11. Transport statistics show that 47.5 per cent of the Midlothian population in 2011 travelled to Edinburgh while 19.5 per cent of people working in Midlothian live in Edinburgh. More recent figures indicate a fairly static picture based on survey data.3 Unemployment in Midlothian in 2018 was 3.7 per cent, compared with a Scottish average of 4.3 per cent. Median weekly earnings for residents and employees in Midlothian in 2018 were £537.20 and £544.40 respectively. This is lower than the median weekly earnings of £562.70 across Scotland.4
12. The LDPs also set out areas of natural beauty such as the Pentland and Moorfoot hills and the Esk Valley. On the eastern slope of the Pentlands is the council’s snowsports centre, Hillend, which has Britain’s biggest artificial slope.5
13. The area has six wards – Bonnyrigg, Dalkeith, Midlothian East, Midlothian West, Midlothian South and Penicuik – each represented jointly by three councillors. There are 16 community councils across Midlothian.
Page 26 of 164 Part 1. Does the council have clear strategic direction? | 13
Exhibit 2 Map of Midlothian showing principal towns, roads, and areas identified for housing and economic use The Midlothian Science Zone is an established bioscience location for research and development. The Midlothian Gateway sits on the A701 corridor development area, and includes improvements to the current Straiton Commercial centre and creation of a mixed–use development.
Shawfair Danderhall
Lasswade Dalkeith Eskbank
LoanheadBonnyrigg Gorebridge
Penicuik
A7
A702 A701
Key: Road Midlothian Gateway Housing allocation
Railway line Midlothian Science zone Economic allocation Town centres
Source: Midlothian Council Local Development Plan 2017
14. Midlothian’s profile of deprivation suggests that relatively few households are at the extremes, that is, relatively few are in the most- or least-deprived areas (Exhibit 3, page 14). There are 13 datazones in the 20 per cent most-deprived areas, and 18 datazones in the 20 per cent least-deprived areas. The Midlothian CPP targets three areas of deprivation – Dalkeith Central/Woodburn, Mayfield/Easthouses and Gorebridge.
Page 27 of 164 14 |
Exhibit 3 The distribution of deprivation in Midlothian and the other council areas in the city region area In Midlothian overall, a higher proportion of households are in more-deprived than in less-deprived areas.
Least deprived
Most deprived City of Edinburgh Midlothian East Lothian West Lothian Scottish Borders
Note: The top of the shape shows the proportion of the population in the least deprived areas, working down to the proportion of the population in the most deprived areas. Source: Open Data Manchester using Scottish Index of Multiple Deprivation (SIMD), 2016. SIMD is the official tool for identifying the most deprived areas in Scotland. It looks at multiple aspects of deprivation such as resources and opportunities as well as low income.
Since our last Best Value audit, the council has delivered several ambitious initiatives.
15. The last Best Value report on Midlothian Council was published in 2012. Since then, the council has delivered several ambitious initiatives such as:
• The Learning Estate Strategy: the council completed a school catchment review in December 2015. This informed the council’s Learning Estate Strategy which was approved by council in 2017. Since 2015/16, it has invested £35 million in secondary schools and £37.2 million in primary, nursery and early years establishments. This includes building five new schools and additions to four schools (Case study 1, page 25 on the Newbattle Digital Centre of Excellence). As a growing council, Midlothian anticipates that its schools will reach their highest capacity in 2042 and its Learning Estate Strategy seeks to avoid over–provision.
• Improvements to transport links: in September 2015, four new railway stations in Midlothian, on the Edinburgh to Borders line, opened. The council had a key role in coordinating the work required to open these stations through the Borders Railway Blueprint Partnership. This group still meets to maximise the opportunities created by these railway links, including tourism growth and improved access to labour markets, education centres and new housing developments.
• Commencing work on Shawfair new town: the council has planned for a new community at Shawfair, merging with the community at Danderhall. This will consist of 4,000 new homes, businesses, schools, community facilities and a new town centre around the Shawfair Railway station, constructed as part of the Border’s rail project. Planning permission was granted in 2015/16. The first phase includes green space for residents and traditional housing. The council’s Learning Estate Strategy includes delivering school provision at all levels. An energy-from-waste plant has Page 28 of 164 Part 1. Does the council have clear strategic direction? | 15
been built at Millerhill, near the eastern boundary of Shawfair, and it began producing energy from its turbine in December 2018. Heat from waste will be generated via a district heating scheme in the new Shawfair settlement. Shawfair and Danderhall will have an estimated population of 12,000. This will make it one of the larger Midlothian towns, compared with Penicuik (16,300) and Dalkeith (13,700).
• Building social housing: the need for social housing in Midlothian is great, with over 4,000 applicants on the council’s housing waiting list. The council is responsible for 6,864 dwellings, and its stock has increased by 15 per cent over the past ten years. The council has improved the condition of its housing stock, increasing the percentage that meet Scottish Household Quality standard criteria from 40.2 per cent in 2009/10 to 96.4 per cent in 2017/18. The council’s Strategic Housing Investment Plan for 2019/20 to 2023/24 states that it is committed to building 1,000 new council houses by March 2022 and requires 25 per cent of any new private development to be affordable housing.
The council and its partners have a broad vision and a clear focus on short-term priorities
16. There is a single vision for the Midlothian area, the Single Midlothian Plan. This sets out the vision of the council and its partners in the CPP and directs the council’s work.6 The vision is structured around five broad objectives and three short-term priorities (Exhibit 4, page 16). The five themes are:
• Adult health and care
• Sustainable growth Midlothian
• Getting it right for every Midlothian child
• Community safety
• Improving opportunities Midlothian.
17. The vision is very broad but the three short-term priorities give it focus on reducing inequality in economic circumstances, learning outcomes and health outcomes. The council and the CPP use comprehensive performance indicators to evaluate performance in terms of progress towards achieving the five objectives and three priorities, as detailed in Part 2. There are clear links between the Single Midlothian Plan and the service plans that direct the work of individual services and departments.
18. The CPP, supported by the council, has adopted an inclusive approach to developing the vision. It holds annual away days and these have been very well attended by community groups and third sector bodies. These days are used to discuss the vision and update the Single Midlothian Plan on an annual basis. At the 2019 planning day, the CPP agreed that continuing to focus on reducing inequality was important.
Page 29 of 164 16 |
Exhibit 4 The vision set out in the Single Midlothian Plan 2018/19 The vision has five broad themes, three short-term priorities and three geographical target areas.
Adult health Sustainable growth and care Midlothian Health and social care services. Economy, housing, development/ land use and environment.
Area target Approaches 1. Mayfield/Easthouses Co-production/capacity building 2. Gorebridge /preventative interventions. 3. Dalkeith/Woodburn. Localising/channel shifting /access to services.
Priorities • Reduce the economic circumstances gap.
• Reduce the gap in learning. • Reduce the gap in health outcomes.
Getting it right for every Improving opportunities Midlothian child Midlothian Schools, children's additional support, Anti–poverty, lifelong learning, social work, protection and employment, equalities and health services. health inequality.
Community safety Police, fire and rescue, road safety, violence against women, anti social behaviour and drug and alcohol services.
Source: Single Midlothian Plan 2018/19
19. Current work at the council will impact on its future vision. In February 2018, the council established a programme ‘Services with Communities’ aimed at transforming services through working more closely with communities (paragraphs 125–126). At the beginning of 2019, a member of staff was seconded to lead this project. This will include consulting with communities to get their views on the area’s challenges and how communities could become more involved in planning and
Page 30 of 164 Part 1. Does the council have clear strategic direction? | 17
co-producing services. A co-production approach gives more power to community organisations, involving them in defining the issues, designing the response and delivering the actions that are identified. Once this work is complete, the council should refine its vision. The council needs to be realistic about what it can deliver, given the scale of its current challenges and the capacity of its workforce.
There has been a great deal of change in the political leadership of the council
20. The past two local government elections have brought a great deal of change in the political leadership of Midlothian Council:
• 2017 election – this resulted in close three-party representation in Midlothian for the first time, with seven Scottish Labour, six SNP and five Conservative and Unionist members. Labour formed a minority administration. A by-election in 2018, after the death of the Labour provost, saw the SNP win the seat. Two-thirds of elected members were newly elected.
• 2012 election – eight SNP, eight Labour, one independent and one Green. The SNP formed a minority administration for the first time in the council’s history, working with the independent member. The leader of the council changed four times over the course of the administration.
• 1996 to 2012 – 16 years of a majority Labour administration.
21. These changes have meant that officers and elected members have needed to find new ways of working together, particularly working with a minority administration, when they have been used to a Cabinet arrangement under a majority. Elected members have also needed to find new ways of working together and they need to continue to build on this.
The council needs to develop and sustain more constructive relationships between members and between members and officers
22. There are tensions in some of the relationships between members. Elected members have opted out of attending and participating in some important cross- party groups, such as the group overseeing the council’s business transformation programme, the Business Transformation Steering Group (BTSG). Elected members have felt that political point-scoring within the public chamber has prevented more of a consensus from being reached across parties. These tensions could impede elected members of all parties taking responsibility for addressing the council’s current and future financial challenges.
23. There are signs that relationships between members are improving, with some recent examples of elected members working together, constructively and across political parties, to good effect. The IJB has cross-party membership and has worked well, agreeing the three-year IJB strategic plan and scrutinising service performance. An education working group was established in October 2018 and again, this is a cross-party group. The group has become more proactive since it started, asking for further information and providing a forum for frank and open discussion before matters are debated and decided on at the full council. Elected members should build on these positive examples of effective cross-party working.
Page 31 of 164 18 |
24. The council also needs to develop and sustain more constructive relationships between elected members and officers. In the past, elected members have used the mechanism of presenting motions to alter the recommendations set out by officers within a report. There is a risk with this method of decision-making that officers will not have been able to work through the implications of amended recommendations in their entirety. There have been occasions when elected members of the Planning Committee have decided to waive developer contributions to local infrastructure, meaning that officers have to identify further sources of funding for the infrastructure needed to support the areas of growth. There is also a perception among some elected members that some officers are reluctant to discuss new ideas and how the council could do things differently.
25. It is a steep learning curve for newly elected members to develop the skills necessary for making decisions in a council. The Accounts Commission has produced guidance to support members in their roles, such as the How councils work reports Roles and Relationships: are you getting it right? and Safeguarding public money: are you getting it right? .7 Elected members should consider whether they need additional training to help them fulfil their role (paragraphs 59–62).
The chief executive is focused on a number of key areas for improvement. The senior management team will need to work together to address current challenges
26. The council is aware of where it needs to improve. Its focus is on putting in place a medium-term financial strategy that sets out the implications of available resources on current and future service delivery. This will be supported by improved financial planning to support its longer-term plans and improving financial management so that it can deliver those plans. It can demonstrate good examples of working across council services (Part 4) but recognises that it can do more. Therefore, it launched its one council initiative in June 2016, encouraging a culture where there is greater understanding by officers of responsibilities and pressures across service areas, to encourage better decision-making.
27. There have been a number of changes at senior officer level which, when combined with the changes in elected members, has added to a period of significant change since the last local government election. The current chief executive took up post in August 2018 and has focused on a number of key areas for improvement. The council is working towards transformation including working with communities to identify how they can plan and deliver services together in future, in the context of the council’s financial challenges (Part 5). The Strategic Leadership Group (SLG) needs to continue to work collectively, finding solutions to service pressures and capacity difficulties, to address the challenges facing the council.
Political leadership needs to improve through recognising a shared responsibility to deliver Best Value
28. It is essential that all members recognise that they share the responsibility for delivering Best Value. All members need to come together, demonstrate shared ownership and accountability and work together to agree the medium-term financial strategy and transformation programme. It is important that the council moves from investing significant staff energy into an annual budget process and instead takes a longer-term view in order to support its vision for Midlothian. This is another reason why it is so important that the council agrees the medium-term financial strategy.
Page 32 of 164 Part 2. How well is the council performing? | 19
Part 2 How well is the council performing?
Overall the council’s performance against the objectives and short-term priorities in the vision is mixed. Service performance is also mixed.
There are good examples of the council taking action to improve performance. Performance has improved in some priority areas, particularly in services for children and young people.
The council makes good use of data to understand and improve its performance.
The level of scrutiny by elected members is improving but remains inconsistent.
29. In this section we consider performance against the five broad themes and three short-term priorities in the council’s vision, and how performance compares with others using national data. We also comment in more detail on young people’s services, adult social care and customer care. The council has delegated services to the IJB, including adult health and social care and supported housing services. The Midlothian Health and Social Care Partnership is responsible for delivering those services.
Overall performance against the objectives and priorities in the council’s vision is mixed
30. As outlined in Part 1, the vision of the Single Midlothian Plan has five broad objectives and three short-term priorities. The CPP tracks performance against this vision and Exhibit 5 (page 20) shows performance against the five broad themes. There are different results because the Annual Performance Report presents information across indicators for all partners in the CPP. The Balanced Scorecard presents information on indicators for services for which the council is directly responsible.
Page 33 of 164 20 |
Exhibit 5 Performance against target for objectives in the Midlothian Vision, Annual Performance Report and Balanced Scorecard, 2017/18 Overall performance is mixed. The council is meeting more of its targets for ‘Improving opportunities in Midlothian’ and ‘Sustainable growth’.
Annual Balanced performance report scorecard (council-only Vision objective (CPP indicators) indicators)
with target on target with target on target
Adult health and care 14 71.4% 7 66.7%
Community safety 17 50.0% 7 33.3%
Getting it right for every Midlothian child 18 40.0% 20 72.2%
Improving opportunities in Midlothian 34 58.1% 8 83.3%
Sustainable growth 44 86.0% 14 80.0%
Note. Some percentages are based on lower numbers of targets than shown in the table, because we have excluded indicators that did not have up to date data. Source: Audit Scotland analysis of Midlothian Council Annual Performance Report 2017/18 and Balanced Scorecard 2017/18
31. Midlothian Council is meeting more of its targets for ‘Improving opportunities in Midlothian’ and ‘Sustainable growth’ than it is for its other objectives and priorities. Examples of what it is doing well include the number of environmental awards which were obtained, such as green flags, and completing all neighbourhood plans. Community safety is an area where the council is not performing as well, missing its targets for the number of antisocial behaviour orders breached and number of community payback orders completed.
32. Exhibit 6 (page 21) shows performance against the three short-term priorities in the Single Midlothian Plan. The council has met more of its targets for reducing the gap in economic circumstances. The council has not met as many of its targets in the area of reducing the gap in learning outcomes, although it has improved in this area (paragraphs 46–51).
Page 34 of 164 Part 2. How well is the council performing? | 21
Exhibit 6 Performance against the short-term priorities, 2017/18 The council is meeting more of its targets for reducing the gap in economic circumstances than for the other short-term priorities.
Indicators Short-term performance in Midlothian Council with target on target
Reducing the gap in economic circumstances 7 71.4%
Reducing the gap in health outcomes 5 66.7%
Reducing the gap in learning outcomes 8 50.0%
Note. Some percentages are based on lower numbers of targets than shown in the table, because we have excluded indicators that did not have up to date data. Source: Audit Scotland analysis of Midlothian Council Balanced Scorecard 2017/18
33. The council tracks its performance against a wide number of indicators for information. There are a total of 139 indicators shared across the CPP (92 without targets) and 92 indicators for the council (46 without targets). The CPP and the council also consider updates against actions. These track progress against the actions which sit alongside corresponding performance indicators. It is not appropriate for all indicators to have targets but the council should consider whether it could provide greater clarity on its use of targets. It could more clearly state which are its priority indicators against its five broad objectives. It could also state why some of its targets are only to maintain or reduce performance.
National indicators show that the council’s overall performance across services is mixed
34. The council presents annual reports analysing the Local Government Benchmarking Framework (LGBF) indicators to Cabinet and to the Performance Review and Scrutiny Committee (Exhibit 7, page 22). The LGBF brings together information about how all Scottish councils perform in delivering services. The framework lets the council compare its performance against the Scottish average and other councils. Indicators are divided into service areas and performance relative to other councils can be seen by the proportion of indicators in each quartile.
35. For Midlothian Council, the majority of housing, environmental and economic development indicators are in the top two quartiles, indicating comparatively better performance in these areas. However, Scottish Housing Regulator (SHR) indicators for housing services do not show as positive a picture of performance. These show poorer performance with service quality and for services to homeless people and gypsy/travellers. The SHR has indicated that it will work more closely with the council because of these concerns.
Page 35 of 164 22 |
Exhibit 7 Council’s own reporting on 2017/18 LGBF performance indicators, February 2019 There is a spread of performance across council services.
100 0% 90 34% 37% 37% 80 49% 60% 70 60 92% 80% 50 40 Percentage 30 20 10 0
Housing Corporate
Environmental Culture&Leisure Adult Social Care Corporate Assets Children's Services
Economic Development
1st quartile 2nd quartile 3rd quartile 4th quartile Notes: 1. Children’s services includes education. 2. Children’s services is missing 11 indicators which were not available at the time of publication. 3. Corporate includes indicators of sickness absence; council tax collection; spend on support services etc. Corporate Assets includes indicators on the suitability and condition of council buildings. Source: Midlothian Council’s analysis of 74 LGBF indicators based on 2017/18 data, February 2019
36. Exhibit 8 (page 23)shows our analysis of council performance since 2013/14, based on selected LGBF indicators which mostly relate to outcomes. This does not show an overall pattern of improvement, with the percentage of indicators in the top two quartiles fluctuating between 47 and 53 per cent. Midlothian has 51 per cent of the selected LGBF indicators in the top two quartiles, ranked 13 out of 32 councils in Scotland in 2017/18.
37. Comparative performance can also be measured using the Community Planning Outcomes Profile (CPOP) data set. These indicators are relevant to the CPP as a whole, including the IJB and its delegated service areas. This The Community shows a more positive picture, with improving performance in twelve indicators, Planning Outcomes decline in five and static performance in one indicator. Examples of improving and Profile is a tool that declining CPOP indicators are: can assess if the lives of people in • Percentage of primary 1 pupils with a healthy Body Mass Index improved a community are by 1.9 percentage points between 2007/08 to 2017/18. improving, using a set of core measures • Early mortality reduced by 5.7 per cent between 2007/08 and 2017/18. on important life outcomes. • There were 4,740 more unplanned hospital attendances in 2017/18 Source: compared to 2007/08. Improvement Service
• Emergency admissions increased by 1,098 between 2007/08 and 2017/18. Page 36 of 164 Part 2. How well is the council performing? | 23
Exhibit 8 Analysis of LGBF indicators, 2013/14 to 2017/18 Audit Scotland’s analysis shows that the number of indicators in the top two quartiles has fluctuated.
100 90 20 24 20 24 24 80 70 27 60 29 33 29 27 50 40 Percentage 18 29 16 24 30 31 20 29 27 22 22 10 14 0 2013/14 2014/15 2015/16 2016/17 2017/18
1st quartile 2nd quartile 3rd quartile 4th quartile
Note: Audit Scotland LGBF performance analysis is based upon 49 single-year, mainly outcomes-based, indicators which were reported on as part of the LGBF every year within the five-year period. Where a council did not supply data for one of the 49 indicators we have excluded this from our analysis and so reported totals may not equal 100 per cent Source: Audit Scotland
The Integration Joint Board (IJB) is taking action to address priority areas in adult health and social care services
38. Midlothian Council receives performance reports from the IJB for adult health and social care. The IJB has acknowledged that performance is mixed. A major programme of service change is outlined in the Midlothian Health and Social Care Partnership’s Adult Health and Social Care Strategy and Delivery Plan 2019-22. The changes are designed to promote prevention and recovery.
39. The IJB is taking action in the area of preventative services. It recently extended its Wellbeing Service to all 12 GP practices in Midlothian after a successful pilot. This service offers members of the public the opportunity of a ‘good conversation’ with a trained practitioner, exploring life issues that may be affecting health and wellbeing, such as family, relationships, money, housing and mental health. The aim is to support people to develop their own personal outcomes and methods of self-management and to be more able to live well.
40. An evaluation of the pilot demonstrated the positive impact the service was having on helping people to manage their wellbeing. This is the result of a partnership between the IJB and the Thistle Foundation, a charity supporting people living with long-term health conditions. In November 2018, partners were successful in securing funding until 2022 from a range of sources, including the Scottish Government.8
41. The IJB acknowledges that its biggest challenge is its capacity to provide care both at home and in care homes. One of the council’s external care-at- home providers is facing continuing difficulties in delivering the service it is Page 37 of 164 24 |
commissioned to deliver. The IJB is working with this provider to improve that service. It has also increased capacity through other external providers, by reorganising its in-house service and by working closely with the voluntary sector to see how it can provide alternatives to care at home. The IJB is monitoring the situation to determine whether it should consider further action.
42. The IJB is exploring options for providing extra care housing in Dalkeith and Bonnyrigg, following successful initiatives such as Cowan Court in Penicuik. This was opened in 2013 and provides 32 homes with extra-care housing support, designed for older people, with the option of cohabiting with their spouse/partner, sibling, parent or child. It received a positive inspection from the Care Inspectorate in March 2017. Teviot Court opened in 2017, providing specialist support services to people with autism, learning disabilities and complex support needs. It provides specialist 24-hour support, including overnight support staff provided by the Richmond Fellowship. As at March 2019, the IJB reported that no one with learning disabilities was being cared for in hospital, and all were being cared for within the community.
43. Work is also under way to develop models of support for homeless people with complex lives. Multi-agency meetings and a broader workshop have already taken place with the plan for homelessness support to be developed by June 2019.
44. Performance against national CPOP data, relevant performance measures for the IJB and other satisfaction-based indicators shows mixed performance. There has been a decline in some health indicators, for example in unplanned hospital attendances and emergency admissions (paragraph 37).
45. Performance against key waiting time and service user satisfaction targets could be improved. Waiting times for occupational therapy and social work services are above target. Performance is below target for the time taken to deal with complaints. Adult health and social care services rank very low for LGBF satisfaction indicators related to people receiving any care or support who rate it as good or excellent; and people who agree that their services or support had an impact on maintaining or improving their quality of life. Despite a reduction in satisfaction, these services are ranked fifth in Scotland for the percentage of people aged 65 or over with long-term care needs receiving personal care at home, increasing by four percentage points between 2011/12 and 2017/18.
The council has improved against most of its priorities for education and is aware of where further improvements are required
46. At the time of the last Best Value audit report, we reported that improvements were required in some areas of education. Since then the council has embarked on an ambitious Learning Estate Strategy, which we refer to in Part 1. One significant project totalling £38 million has been the Newbattle Community Campus, which opened in June 2018 (Case study 1, page 25).
47. The council has worked with partners to improve against its priority that more pupils achieve positive destinations after leaving school (Case study 2, page 25).
Page 38 of 164 Part 2. How well is the council performing? | 25
Case study 1 Newbattle Community Campus
The campus is the result of a partnership between Midlothian Council and Edinburgh University. The Campus has a secondary school of around 850 pupils, a public library, a gym, sports facilities, a swimming pool and community meeting spaces. It also provides workspaces for self-employed businesses and provides access to and training in the latest technology. The partnership has links to the Data Driven Innovation Programme and the City Deal. The aim is to provide high- quality, industry-led skills for learners, including digital skills. There are not yet performance measures to quantify the improvements that this facility has made to outcomes for pupils, and performance measures will likely be longer-term in nature by assessing school-leaver destinations. However, school attendance has already improved from 85.3 per cent to 86.6 per cent, and exclusions have reduced from 56 to nine. Staff believe this to be the result of the better facilities offered by the Digital Centre of Excellence, as well as increased pupil engagement in learning.
Source: Audit Scotland
Case study 2 Positive destinations
The CPP identified improving positive destinations for school leavers as a priority in 2013, to reverse the trend of five years of underperformance. Work began by establishing which council services School leavers who (schools, children and families social work and economic development) are engaged in and external partners (Skills Development Scotland, local colleges, higher education, universities) would be essential to a new approach. The council worked further education, with partners to achieve: training, voluntary work, employment or • more flexible and practical skills and training for young people to activity agreements help everyone achieve their potential are classified as having a 'positive • closer working between parents, employers and further education destination'. establishments to help young people manage the change from school to their next step Source: Scottish Government • investing in individual school leavers who were considered at risk of not achieving a positive destination by identifying lead staff members to work directly with the at-risk young people, to help them achieve a positive destination.
This collaborative approach has led to improved outcomes: the percentage of pupils entering a positive destination increased from 85.8 per cent in 2011/12 to 94.4 per cent in 2017/18. The percentage of 16 to 19 year olds participating in learning, training or work in 2017/18 was also 94.4 per cent, higher than the Scottish average
Source: Audit Scotland
Page 39 of 164 26 |
48. The council has improved significantly for performance in the educational attainment of pupils living in areas of higher deprivation. Midlothian’s rate of improvement for pupils living in the 20 per cent most-deprived areas is particularly good, with levels of attainment now above the Scottish average (Exhibit 9).
Exhibit 9 Improved performance in educational attainment for children living in deprived areas The rate of improvement for pupils gaining five or more awards at Level 5 and Level 6 for children living in deprived areas is better in Midlothian than across Scotland.
Attainment for pupils living in the 20% most Midlothian deprived areas Scotland
Five or more awards in 26 Level 5 2011-12 29
Five or more awards in 47 Level 5 2017-18 42
Five or more awards in 5 Level 6 2011-12 10
Five or more awards in 17 Level 6 2017-18 16
Percentage % 0 5 10 15 20 25 30 35 40 45 50
Source: Audit Scotland using LGBF data
49. For nine of the 11 LGBF attainment indicators, Midlothian’s rate of improvement is either in line with or exceeds the Scottish rate of improvement. Insight data: This includes improvements in terms of positive destinations for pupils. The Insight is an online council’s overall tariff scores have improved, as well as total tariff scores for pupils benchmarking tool across all levels of deprivation. Tariff scores are calculated by accounting for the which provides total number of tariff points for each award in education. schools with information about 50. While Midlothian’s rate of improvement for tariff score measures since attainment outcomes 2011/12 is consistent with the trend across Scotland, the council still performed in the senior phase. below the Scottish average for the total tariff score measures for most It uses a ‘Virtual deprivation groupings in 2017/18. Insight data also shows that it performs Comparator’ which less well than its virtual comparator for breadth and depth measures, which show contains a sample the performance of S4 – S6 pupils in the range of qualifications taken and the group of school level at which they are achieved. leavers from similar schools in other local authorities. Source: Education Scotland Page 40 of 164 Part 2. How well is the council performing? | 27
51. The council is aware of where further improvements are required, including increasing attendance and reducing exclusions of pupils, including looked-after and accommodated children. The council has appointed additional staff using its attainment fund for care-experienced young people to support improved outcomes.
Children’s services was an improving area at the time of the last Best Value audit and it has continued to improve
52. At the time of the last Best Value audit in 2012, we reported that there had been significant improvements to children’s services. In January 2014, Midlothian’s services for children and young people were inspected by the Care Inspectorate and Education Scotland. The report concluded that these services are having a largely positive impact on children and young people and their families. Particular strengths are the meaningful involvement of children and young people in shaping policies and services, and creative approaches to encouraging physical, social and emotional wellbeing. Planning and the leadership of improvement were identified as areas for further improvement.
53. In November 2017, the council introduced its Permanence and Care Excellence Programme with the aim that 75 per cent of children under the age of 12 would have a permanent care accommodation plan within 7.5 months of their first involvement with social services. Permanent care includes care with birth families, kinship care, foster care or adoption. Within the year, this target had been surpassed with 80 per cent of children receiving a decision on long-term care within that time-frame. By April 2019, that had risen to 95 per cent.
54. The council introduced the Mind of My Own app in April 2018 which has increased the level of feedback from young people with experience of living in care about the service they receive. Thirty-one young people are using this app to communicate with their workers in a way that better suits their needs. The council has also established a virtual headteacher, not attached to an educational establishment, but with responsibility for these young people, to focus on their educational outcomes.
The council has improved its overall approach to customer care but service user satisfaction is comparatively low
55. Customer care was an area that needed to improve at the time of the last Best Value audit. The council now has a much clearer focus on reporting feedback. Each service performance report has a section titled ‘Valuing customer feedback’, where complaints and waiting times are reported. The council’s website is well laid out, with good customer accessibility and functionality. The Society of IT Practitioners (SOCITM) rated the council website as among the best performing in the UK in 2018, based on a continuous assessment during 2017/18.9 Midlothian was one of only 40 of the 414 local authority websites to achieve the highest number of stars.
Page 41 of 164 28 |
56. The council has introduced a self-service approach in the libraries in four of Midlothian’s main towns. This allows libraries to remain open for longer periods but only staffed at allocated times. This approach has been adopted in the Loanhead Library facility, which operates as a multi-functional centre (Case study 3). Innovative developments such as this allow communities to become more involved in how services are delivered, helping to improve outcomes for local people.
57. National datasets have demonstrated a reduction in satisfaction across most services. Satisfaction in Midlothian is slightly higher for leisure facilities and street cleaning relative to the Scottish average. However, it is lower than average for parks and open spaces, and museums and galleries, where the decline has been at a faster rate than Scotland. The council uses its Citizens' Panel, made up of 1,000 residents, to collect community satisfaction information. We have compared Citizens' Panel results with LGBF results where there is some similarity between services (Exhibit 10, page 29). According to Citizens' Panel results, satisfaction with the standard of education and library services is much higher than according to the figures measured through the LGBF. The council should seek to understand these different results and work to improve user satisfaction.
Case study 3 The Loanhead hub offers frontline services and support to communities
The Loanhead Centre has been developed through work with local communities to deliver services while making effective use of local assets. A budget of £15.4 million was allocated to create a multi-purpose hub for people in Midlothian. The project delivered one integrated building which contains a new primary school, GP practice, a refurbished library, leisure centre, after-school facilities, nursery and early years family support centre. This has allowed a variety of local services to be delivered using an efficient and integrated approach, bringing people together in one community space. Library visits have increased to 88,634 since opening in August 2017 compared with 30,665 over the same length of time in the previous building. There has also been an increase in GP registrations and leisure centre memberships. Positive feedback has further demonstrated the project’s success, via the Loanhead and District Community Council forum.
Source: Midlothian Council / Audit Scotland
Page 42 of 164 Part 2. How well is the council performing? | 29
Exhibit 10 Comparison of satisfaction measures between the Citizens' Panel and the LGBF indicators Satisfaction with services is higher according to the Citizens' Panel indicators.
LGBF indicators Change from Citizens' Panel indicators Service area 2015 to 2018 results baseline 2017/18 results Schools/ 79% -3.3 90% education 72% -10
66% -14.6 Libraries 92% 73% -9.5
90% +10.3 Refuse 91% 79% -3.6
Midlothian Negative change Scotland Positive change
Notes: 1. Schools/education includes the LGBF indicator ‘percentage of adults satisfied with local schools’. The Citizens' Panel results include ‘Whether or not someone in your household attends a local school, how satisfied are you with the schools in your area?’. 2. Libraries includes the LGBF indicator ‘percentage of adults satisfied with libraries’. The Citizens' Panel results include ‘Overall, how satisfied are you with the service you received?’. 3. Refuse includes the LGBF indicator ‘percentage of adults satisfied with refuse collection’. The Citizens' Panel results include ‘Overall, how satisfied are you with Midlothian Council’s refuse collection service?’. 4. Baseline period is 2010-14 for the LGBF indicators. Source: Audit Scotland using the LGBF satisfaction measures from 2015-2018 and Midlothian Council Citizens' Panel Survey 2017/2018
The council is committed to using evidence and provides comprehensive performance information to elected members and the public
58. The council is committed to using evidence and provides comprehensive performance information to elected members and the public. The council performs well in relation to reporting performance to the public, with a good range of information in different formats. The council demonstrates a commitment to being open and transparent with a good balance between reporting areas of strength and areas for improvement.
Elected member scrutiny is improving but officers should do more to help elected members with this role
59. The level of scrutiny at the council has improved, as elected members have grown into their roles. With the major changes in political representation, it has taken time for members to understand all aspects of their role. Now members can be seen asking questions and seeking assurance around performance and council policy decisions. However, the level of scrutiny is not consistent and members need to ensure that they consistently exercise appropriate scrutiny.
Page 43 of 164 30 |
60. Officers should improve this further by ensuring that all reports are of high quality and that elected members are clear on what they are being asked to decide on. Some committee reports can be very long. Reports are also sometimes issued late, reducing the time for elected member to read and understand them. Some reports presented as part of previous budget-setting processes did not contain a sufficiently thorough assessment of the level of savings that were achievable.
61. Officers and members need to work together to ensure that ongoing training and development are appropriate to meet members’ needs, and members need to take up such opportunities. The attendance of elected members at training events is recorded via the council’s website, providing a training history for each individual councillor. This approach to monitoring the uptake of training is limited, as it does not provide an overview of training and development. Moreover, a third of elected members have not recorded their uptake of the induction programme.
62. The council also organises seminars and informal briefing sessions on various topics, which are well received. Elected members should ensure that they take up the offer of such seminars, briefing sessions and training. The reintroduction of personal development plans would allow elected members to state the areas in which they want to improve their skills or knowledge, giving them something to work towards.
Page 44 of 164 Part 3. Is the council using its resources effectively? | 31
Part 3 Is the council using its resources effectively?
The council faces significant challenges in achieving a sustainable financial position. It is facing a funding gap of £14.5 million between 2020/21 and 2022/23.
The council needs to end its reliance on reserves. Since 2016, it has used £16.1 million of reserves and they are now at a low level.
The new chief executive has made good progress with starting to address the council’s financial position. She implemented a recovery plan for 2018/19, and the council has reduced the projected overspend from £3 million to nil.
The council recognises it needs to develop its medium- and long-term financial planning processes. Progress has been slow but developing a medium-term financial strategy is now a priority.
The council has faced substantial financial pressures over the past three years and faces significant challenges in achieving a sustainable financial position
63. A funding gap is the difference between the council’s income and the amount it needs to spend. In its financial strategy paper to the council in February 2019, the council forecast a cumulative funding gap for 2020/21 to 2022/23 of £14.5 million. Since the council agreed its budget, officers have continued to update their projections of the funding gap and this will be shared regularly with members. The budget shortfall by 2022/23 equates to six per cent of the cost of providing services in the year (net cost of services). The council prepares its funding gap analysis with a range of scenarios: best case (£1.6 million) to worst case (£27.2 million).
64. For the past three years the council has not delivered on its approved budget. As part of the annual audit process, for the last two years the external auditor concluded that the council had failed to operate within established budgets and that this was predominantly through failing to achieve financial savings planned through its transformation programme (paragraphs 122–124).
Page 45 of 164 32 |
65. The council needs to make difficult decisions about its services and how they are provided to ensure it balances its finances. This is clear from the range of savings options approved and not approved by members as part of the 2019/20 budget process, where some difficult decisions about cutting services were deferred.
The new chief executive has made good progress in starting to address the council’s financial position
66. Prior to 2018/19, these financial pressures had not been addressed and budgetary pressures were likely to increase. However during 2018/19 the council implemented a recovery plan. This reduced the anticipated overspend for 2018/19 from £3 million to nil. There is a strong tone from the chief executive in her message that overspending is an unacceptable position. She has instructed directors and heads of service to deliver within their set directorate budgets.
The council needs to end its continued reliance on using reserves as part of the budget-setting process
67. Elected members have been unwilling to take potentially unpopular decisions which are necessary to balance the council's finances in times of extreme financial difficulty. Instead members and officers have been choosing to use reserves to balance its finances. In the last three years, members have approved the use of £11.1 million of general fund reserves. The council used £6.4 million to balance budgets, £1.4 million to fund additional expenditure, £1.2 million to support transformation and £3.1 million to fund voluntary severance costs, and used £1 million from other savings.
68. Exhibit 11 (page 33) shows use of general fund reserves of £16.1 million (projected to 31 March 2019), £5 million above approved usage. The external auditor noted in their 2017/18 audit report that the council could not continue to use the reserves to secure a balanced budget and the level of uncommitted general reserves pose a significant risk to the financial sustainability of the council.
69. The council has low uncommitted general fund reserves. Uncommited reserves have depleted over the years with the council projecting, in their reserves strategy, an uncommitted reserves balance of £3.7 million at 31 March 2019, with an improvement projected to £4.3 million as at May 2019.
70. A prudent level of uncommitted reserves is seen by the sector to be between two and four per cent of net expenditure. Excluding the resources delegated to the IJB, this equates to between approximately £3.3 million and £6.6 million. The uncommitted reserves of £4.3 million projected is therefore within this range and above the two per cent set out in the council’s reserves strategy.
71. There will be further risks around use of available reserves due to additional one-off costs associated with service transformation (in line with the new programme discussed in Part 5) and workforce reductions. The results of the 2019/20 budget setting process include a reduction in 136.84 full-time equivalent (FTE) posts at the council. The council has identified these costs and set out how they will be addressed in the reserves strategy.
Page 46 of 164 Part 3. Is the council using its resources effectively? | 33
Exhibit 11 Use of general fund reserves (committed and uncommitted), 2014/15 to 2018/19 General reserves have been depleted from 2016/17.
£'000 £'000 £'000 £'000 £'000 31/03/2015 31/03/2016 31/03/2017 31/03/2018 31/03/2019* General fund reserves 21,315 24,625 17,651 10,777 8,488 Use of reserves -804 -3,310 6,974 6,874 2,289
Note. * projected at May 2019, finalised figures unavailable. Source: Audited financial statements
72. In response to the audit recommendation, elected members approved a reserves strategy in February 2019. This notes the need to maintain an adequate level of general reserve to provide a contingency for unforeseen or unplanned costs and that in the current financial context two per cent of net expenditure should be considered a minimum. Members agreed that where projections indicate that the two per cent minimum balance will be breached, officers should implement an immediate plan to recover the position, failing which they would need to increase reserves by the next available budget.
The council is developing a medium-term financial strategy and will have approved it by the summer
73. The Accounts Commission’s Local government in Scotland: performance and challenges 2017 report highlights the importance of medium-to long-term financial planning given the continuing pressures that councils will face in the future.
74. The new chief executive acknowledges this and has stressed the importance of a medium-term financial strategy and the need for all members to work together to develop and agree the strategy. The council is developing the medium-term financial strategy and plans to present it to full council by June 2019, before summer recess.
The council needs to do more to improve its financial reporting arrangements to better support budget holders and elected members in their roles
75. Historically, not all budget holders have been able to identify variations against budget soon enough during the financial year. While budget holders, service managers and Strategic Leadership Group have access to online financial reports these do not always provide them with the financial management information they need or they have not used the available information to help them effectively manage their budget.
76. The usefulness of financial information was limited for a variety of reasons including information not being maintained accurately and delays in feeder systems data and other financial transactions being processed. This meant managers were over dependent on the finance team to interpret the available financial information and to explain the financial performance to them. Page 47 of 164 34 |
77. As a consequence, in some areas there was a lag in managers being able to take early action on projected overspends. This time lag, coupled with a complex financial framework with various savings and efficiency strands, makes it more difficult to assess the financial performance during the year. This in turn makes it more difficult for budget holders, officers and elected members to fulfil their duties with respect to financial management.
78. There have been signs of recent progress in this area with improvements in the completeness of financial information and plans to make it easier for both managers and elected members to have greater insight into the available financial data by introducing financial dashboards. There has been a clear message from the chief executive on the necessity of strict budget management. There is also a clear governance structure on the delivery of savings and in relation to the medium-term financial plan.
79. The council still needs to do more, however, specifically around simplifying reports, improving the completeness and accuracy of financial information so that it can be relied upon throughout the financial year and so in turn enabling managers to make a timely response to variations.
The council has a large capital budget reflecting the needs of its growing population, but it has experienced slippage on capital projects
80. The council continues to under-deliver against its capital plans, due to recurring slippage in delivering various capital projects such as Cuiken Primary School and Sacred Heart Primary School extensions. For a number of years slippage, or 'rephasing', has occurred beyond what the council has forecast. This is due to a variety of issues including, but not limited to, supply chain pressures, issues arising during the consultation process, and internal capacity issues. In February 2019, the 2018/19 capital plan budget of £32.4 million was rephased to £28.4 million (a decrease of £4 million). The capital plan is a significant part of transforming the council and ongoing slippage or unrealistic budgets have the potential to impede delivery of change.
81. The 2019/20 Housing Revenue Account revised budget shows an average number of houses of 6,962, increasing from 6,864 in the 2018/19 budget, showing the increasing housing demands being faced by the council. Seventeen per cent of all dwellings in Midlothian are council housing stock, compared to 12 per cent for Scotland overall.10 The number of houses is continuing to increase due to the growing population (paragraph 9).
82. The council has a total borrowing requirement of £239.7 million to support its capital strategy in the period to 2022/23, reflecting the pressures on services due to the growing population (Exhibit 12, page 35). The 2018/19–2022/23 general services capital plan shows budgeted expenditure totalling £97.3 million for Education, Community and Economy, again reflecting the needs of the growing population and the increasing pressures.
Page 48 of 164 Part 3. Is the council using its resources effectively? | 35
Exhibit 12 Borrowing requirements, 2018/19 to 2022/23 The treasury management strategy projects significant borrowing requirements over the next five years.
£'000 £'000 £'000 £'000 £'000 £'000 2018/19 2019/20 2020/21 2021/22 2022/23 Total Total capital 43,126 99,892 156,893 89,852 48,424 438,187 expenditure Available (38,410) (38,799) (59,851) (45,462) ( 37,947) (220,469) financing Loans 10,452 9,201 9,282 1,534 1,554 32,023 Borrowing (10,000) 0 0 0 0 (10,000) secured Borrowing 5,168 70,294 106,324 45,924 12,031 239,741 required
Source: Treasury management strategy, presented to council, February 2019
83. The council will benefit from funding as part of its involvement in the Edinburgh and South East Scotland City region deal (City region deal). Agreements were formally signed in August 2018. The UK and Scottish governments will each invest £300 million over the next 15 years, with Midlothian Council and other regional partners investing an additional £700 million. The University of Edinburgh has a programme of development where City deal funding will contribute to the World-Class Data Infrastructure hub at Easter Bush, providing a key strand of innovation in Midlothian. The deal will also facilitate the development of the A701 and A702 road schemes, improving transport links in Midlothian. Midlothian will also benefit from programmes within the City region deal, as it is within a ten-mile radius of other projects outwith the council area. The investment is expected to generate a £5 billion increase in Gross Value Added for the south east area’s economy.11
A number of weaknesses in the systems of internal control relating to payments made procuring roads services were identified by the council
84. The external auditor reported in the 2017/18 Annual Audit Report, that the council had an effective governance structure in place overall. However, they noted a number of aspects of the internal control framework that required improvement. They highlighted the results of the investigation into the council’s road division which identified a number of weaknesses in the systems of internal control at the council. Progress on the 14 internal control actions was reported to Audit Committee on 12 December 2018 and these matters have all been addressed accordingly. A police investigation into alleged fraud is currently being undertaken.
85. The council has a robust procurement strategy that is updated every three years. The strategy includes a review of progress from the previous strategy and sets out the council’s strategic goals to be taken forward through its procurement Page 49 of 164 36 |
activity over the next five years. In 2018, the council achieved F2 status on the new procurement improvement assessment which is carried out externally by Scotland Excel. Scoring can range from F1 (Highest) to F12 (Lowest).
The council recognises it needs to revise its workforce strategy to complement delivery of the medium-term financial strategy.
86. The council currently has individual workforce plans for each service (2017- 22). Its workforce strategy 2017–2022 was approved at Council Committee in December 2017. It is aware it will need to revise its workforce strategy and individual service workforce plans to complement the new medium-term financial strategy that it is developing.
87. The council is committed to finding alternative roles for staff at risk of being displaced as a result of the budget changes and it has a policy framework in place that supports redeployment. A key part of this has been upfront and regular communication with staff. The reduction of 136.84 FTE posts at the council as part of the 2019/20 budget will be achieved through a combination of vacancy management and voluntary redundancy. In 2017/18, the council spent £853,000 on voluntary severance.
88. Midlothian experiences challenges in workforce as a smaller council but has developed some shared services and shared roles to help address this. The joint chief internal officer appointment with Scottish Borders Council in 2018 is an example of where this has operated successfully. The council should look at how it can expand the use of shared services/roles across the council.
The council has an effective approach to managing sickness absence
89. The council has an attendance management policy to reduce sickness absence in the workplace and help managers deal with absence appropriately. It has also prepared guidance for managers on interventions to maximise attendance at work, to support them in difficult situations.
90. The council has a low sickness absence rate as a result of its effective approach to managing absence. As at quarter three of 2018/19, the council had lost 9,450 FTE days which equates to a sickness absence rate of 2.53 per cent. National data using the LGBF also measures sickness absence across councils. Midlothian performs well and is among the top five ranking councils for both measures of sickness absence (teachers and non-teachers). In 2017/18 sickness absence days for teachers in Midlothian were 4.59 days, compared to the Scottish average of 5.93 days. Sickness absence for non-teachers was also below the Scottish average, at 8.59 days compared to the Scottish average of 11.41 days.
Staff feedback on the council is generally positive and it has a commitment to fair working practices
91. The council’s most recent Employee Engagement Survey generated a 50 per cent response rate. The survey assessed a variety of key employee issues as well as views on the council. Out of 13 common questions between the 2016 and 2018 survey, the overall percentage of staff satisfied dropped in 11 questions.
Page 50 of 164 Part 3. Is the council using its resources effectively? | 37
92. Results show that there is a good appreciation for employee wellbeing, although this could be improved at senior management level. Generally, employees have a positive view of their roles, however only 44 per cent of respondents agree that they have enough time to carry out their work effectively. Employees’ perceptions of Midlothian as an organisation are largely positive, however responses suggest that many staff do not feel that the council is reactive to staff feedback. As a result of the survey, officers produced and shared a managers’ guide to action planning meetings in a bid to respond to the key issues and take timely action.
93. The council has been a living wage employer for three years and has achieved Living Wage employer accreditation through the Living Wage Foundation in addition to being nominated for a national award. This is part of the council’s commitment to fair working practices. It also promotes and encourages the payment of the Living Wage in all contracts. In addition to delivering on the Living Wage requirement, Midlothian developed a broader evaluation to ensure that a fit-for-purpose framework for the future was in place, for example by adapting terms and conditions. The positive approach taken by the council has been recognised by other local authorities, who have reached out to the council to share best practice.12
Page 51 of 164 38 |
Part 4 Is the council working well with its partners?
Partnership working was an area of strength in the 2012 Best Value audit and continues to be strong. The council and its partners are committed to a shared vision for the area.
The council works well across departments and with its partners to deliver improvements in services. It also works well with communities to deliver both large projects and local initiatives.
There is a good history of the council and the third sector working together. The council has taken steps to further improve how it works with the third sector so that it is more consistent.
The council and communities have developed neighbourhood plans for the three priority areas. It has struggled to build effective community oversight of progress across all neighbourhood areas.
Partnership working was an area of strength in the 2012 Best Value audit and continues to be strong
94. The council and its partners are committed to a shared vision for the area. Single Midlothian Plan priorities are agreed on at annual community planning development days, at which partner, third-sector and community views are represented. The event held in November 2018 was well attended, with 140 representatives from public and private sector agencies, the council, community councils, third sector organisations and approximately 50 young people discussing the plan’s priorities. These days are valued by all partners, particularly the third sector, for being inclusive and effective.
95. Other bodies responsible for scrutinising and auditing the council have also highlighted strengths in partnership working, including joint working with East Lothian Council on public protection.13
96. There continue to be positive signs around the operation of the IJB including:
• a strategic approach to planning from the previous Health and Social Care partnership’s (HSCP) three-year strategic plan (2016–19) to the current strategic plan (2019–22) Page 52 of 164 Part 4. Is the council working well with its partners? | 39
• the three-year financial strategy for 2019 to 2022
• the delivery of a £1m underspend for the IJB in 2017/18 and projected £1.5m underspend in 2018/19
• investment in workforce planning since the establishment of the IJB
• extensive public consultation during 2018 to inform the HSCP’s strategic plan 2019–2022. This used a wide range of methods including social media and community events. A total of 1,600 responses were received and fed into the strategic plan and related service plans. These have fed into strategies to support carers and on mental health, learning disabilities and autism.
97. In Part 2 we set out examples of how the IJB is improving outcomes for local people (paragraphs 38–45).
The council has worked well across departments, with its partners and service users to improve services for young people
98. There are good examples of some council services working effectively across departments and with partners. This had led to improved outcomes for service users, such as an increase in the number of young people moving on to positive destinations after they have left school (Case study 2, page 25).
99. Young people’s mental health is another area where partners have worked together. More than 16 organisations from across the CPP and the third sector are now working together on a project to redesign mental health and wellbeing support services. The starting point was a survey of 374 young people carried out by the Midlothian Youth Platform in February 2018 (Exhibit 13).
Exhibit 13 Key themes from survey on young people’s mental health, February 2018
Source: Midlothian CPP
Page 53 of 164 40 |
100. This survey helped the council and its partners secure £836,000 of funding from the Big Lottery Early Action Fund over five years. A focus will be on testing and learning from measures to prevent mental health issues. This could also help reduce pressure on Child and Adolescent Mental Health Services.
101. The outcome of Education Scotland’s Community Learning and Development (CLD) inspection of Midlothian Council in 2016 was very positive.14 CLD practice covers a range of activities such as youth work, adult learning, family learning and community development. The inspection findings highlight that both the council and its partners were taking an increasingly holistic approach to learning and this was having a positive effect on outcomes for young people, adults and communities in Midlothian. Across all four of the quality indicators, the council and its partners were assessed as ‘very good’.
Engagement and partnership working with the third sector is effective at a community planning level. The council has recently taken steps to ensure a more consistent approach across the council
102. Engagement and partnership working with the third sector is good at a community planning level. The Third Sector Interface (TSI) is the representative body for over 200 third sector organisations in Midlothian. It works with and supports a broad range of organisations and volunteers that deliver services to communities across Midlothian. The TSI reports that it feels a valued member of the CPP and shares the vision and priorities in the Single Midlothian Plan. The TSI also values the support the council gives in terms of attending meetings, sharing information and facilitating links with wider partners. Individual staff within the council have contributed to positive relationships, helping to answer queries and give advice.
103. There is a strong, historical and supportive link between the council and the third sector in Midlothian. However, there have been some challenges in terms of the relationships between some third sector organisations and the council such as inconsistencies in communication and working partnerships, and the transparency of some decisions made by the council.
104. The chief executive recently met with the TSI and proposed working together to refresh the existing agreement between the council and the voluntary sector, the Compact, which defines the principles for joint working between the council and third sector partners. The council is aware of the benefits of working well with community organisations and is keen to further develop relationships and working partnerships.
The council is making progress putting in place what is needed to deliver the Community Empowerment Act
105. Midlothian Council has made progress in taking forward actions to deliver the requirements of the Act. In 2017, the council launched a social media campaign to raise awareness about the Act. To date, the council has received and processed two participation requests – that is requests by community bodies to take part in making decisions about council services. Prior to the introduction of the Act, the council had completed community asset transfers – that is where communities have taken responsibility for land or buildings. At the time of this audit work, the council was supporting communities with six asset transfer requests, which were at various stages of development or submission. Page 54 of 164 Part 4. Is the council working well with its partners? | 41
106. Midlothian Council has been piloting a participatory budgeting approach. For example, the council and NHS Lothian have jointly allocated £48,000 for the ‘Food Glorious Food’ project in the three priority community areas. The council has still to set out plans for participatory budgeting.
107. The council has rolled out online training on the Community Empowerment Act across council staff, community councils, elected members and the third sector. The target was for 150 staff and volunteers to complete the training in 2018/19 and at May 2019, 108 staff had completed training. To demonstrate support for the voluntary sector, the council recently introduced a scheme where council staff can request two to four days per year to volunteer with community groups that are tackling a local social issue or providing an entrepreneurial partnership.
108. Closely aligned to the Community Empowerment Act is the Scottish Government’s intention that empowering communities will help reduce disadvantage and inequality and improve outcomes for communities. Since 2016/17 the council has had a strong focus on reducing inequalities and developing more preventative approaches through the Single Midlothian Plan (Part 1, paragraph 14 and Exhibit 4).
The council works with service users and community groups to improve services and build community capacity
109. Community empowerment is a gradual process that involves continual learning and the constant building of a community’s capacity to articulate and address its priorities. There are good examples of where the council has involved communities and service users in the design of services. These include designing and developing the Loanhead hub Case study 3 (page 28) and Newbattle Campus (Case study 1, page 25).
110. There are also good examples of where the council has worked with communities to build capacity. These include the Mayfield and Easthouses Community Empowerment Project, funded by community planning partners between 2015 and 2017 and led by third sector organisation Midlothian Voluntary Action. It involved working with the community to explore local solutions to issues identified within the neighbourhood plan. This led to a number of initiatives including the Recovery Cafe and a wellbeing group. Some of this work is ongoing and provided helpful insight on how to build community capacity. In paragraphs 39–40, we mentioned the roll-out of the wellbeing service.
111. Community empowerment also involves communities having greater influence on and input to decision-making. The council conducts or participates in a wide range of public engagement activities across Midlothian’s communities. The public consultation for the 2019/20 council budget was, for the first time, led by elected members from the administration. Various events were held over a ten-week period for staff, voluntary groups and the wider public to explore the spending options for 2019/20. The council got more than 2,000 responses. However, the events were poorly attended by the public and the number of responses was down by a third from the year before.
112. The council has found it difficult to get communities to participate in a proactive way, although communities have responded to specific services affected by cuts. The council is attempting to change this and is planning to engage directly with those who criticised previous cuts to get their input on how
Page 55 of 164 42 |
to transform services in light of the council’s financial position. It is important that elected members provide effective and consistent cross-party leadership when informing communities about the council’s financial position and considering their views.
The council is working with its communities to deliver improvements. The council should encourage community ownership of these plans and improve how the community monitors progress
113. Communities within Midlothian have identified themselves into 15 areas that have their own sense of community. The council and local community groups have developed neighbourhood plans for these areas. The neighbourhood plans for the three priority areas of Dalkeith/Woodburn, Mayfield/Easthouses and Gorebridge are the Locality Outcome Improvement Plans (LOIPs) required under the Community Empowerment Act 2015.
114. The absence of a formal mechanism for reporting performance against all 15 neighbourhood plans makes it difficult for us to assess what has been achieved overall. Community representatives can give examples of successes by community groups and local authority partners, including improving local spaces and services.
115. Community councils represent communities in the neighbourhood plans and coordinate and monitor actions alongside other partners. The council and communities acknowledge that progress has been slow for some actions as a result of small numbers of volunteers and limited resources. The council should encourage community ownership of these plans and work with communities to improve how they monitor progress. A wider approach to membership of community councils or formalising a wider network of community groups would be beneficial. The council has facilitated some very useful community networking events, which is a good platform on which to build.
116. Midlothian Council uses a Citizens' Panel (paragraph 57) to gather the views of communities, particularly on perceptions of community cohesion and influence. Results in 2018 show that 84 per cent of the 619 respondents agreed with the view that people help each other when there is a problem, compared with 70 per cent in 2016. However, the 2018 survey also highlighted that people in Midlothian feel less able to influence decisions (42 per cent) and feel less involved in their communities (48 per cent) than in 2016.
117. The council is clear on the benefit of involving communities further in designing and delivering services and is taking this forward through its transformation workstream, Services with Communities (paragraphs 125–126). However, recent budget reductions across council services that work directly with communities may affect the future capacity of the council to provide sufficient support and expertise in this area.
Page 56 of 164 Part 5. Is the council demonstrating continuous improvement? | 43
Part 5 Is the council demonstrating continuous improvement?
The council’s overall pace of improvement is mixed. It still needs to focus on some of the key requirements for Best Value, including financial sustainability, financial management and transformation.
The council has made limited progress on its corporate transformation programme. This has contributed to its difficulties in reaching a sustainable financial position. Given the acute financial position facing the council there is a need for a significant improvement in the pace of transformation.
The council is aware of what it needs to do and the new chief executive is focused on key areas for improvement. There needs to be agreement and effective governance across the political parties to address the challenges.
The council has a lot to do and there are risks around its successful delivery of change due to its past track record and the scale of the challenge.
The council has improved in a number of areas since the last Best Value audit and recognises that it urgently needs to make further progress given the scale of the challenges it faces
118. The council can demonstrate that it has improved in a number of areas such as children’s services, educational outcomes, and lifelong learning and employability. It has maintained strong and effective partnership working. However, there are other areas where progress has been slow. For example, progress has been slow in establishing a longer-term financial strategy and delivering the council’s corporate transformation programme. Exhibit 14 (page 44) shows what we reported in 2008 and 2012 and what we have found in this audit work. The council urgently needs to make further progress against the recommendations in this report, given the scale of the challenges it faces.
Page 57 of 164 44 |
Exhibit 14 A comparison of selected Best Value judgements The council has shown that it can deliver change and improvement when focused on initiatives and specific service areas. The rate of wider improvements has been slow.
2008 Controller of Audit 2012 Controller of Audit 2019 Controller of Audit 2008 2012 2019 judgement judgement judgement Leadership and strategic Leadership and strategic Leadership and strategic direction: The council has an direction: There have been direction: The council and its ambitious vision based on its significant improvement in partners have a shared and well- understanding of the local needs corporate management, officer and supported vision that reflects and issues. Improvements in elected member leadership and local needs. Political leadership scrutiny need to be sustained to leadership development. needs to improve through a shared ensure that elected members responsibility for delivering Best are well informed about service Value and building on effective weaknesses. cross-party working. The new chief executive is focused on a number of key areas for improvement. Service performance: The Service performance: Council Service performance: Overall council’s service performance is services are generally improving, service performance remains mixed. It is investing heavily to although half the Statutory mixed. However, the council has improve the quality of its school Performance Indicators still perform improved in its target service areas. estate and to build new affordable below the Scottish average. There The council tracks performance homes, but it still needs to improve have been some improvements against its vision and short-term below average educational in how the council provides its priorities effectively. attainment and weaknesses education service, particularly in in housing and homelessness pre-school and primary provision. services. It is responding positively However, there is room to increase to serious weaknesses identified the pace of improvement in some in its child protection services and aspects of secondary. The council social work services more generally. has been slow in developing Customer care is inconsistent in its approach to responding to delivering accessible services and customer requests and enquiries. requires significant improvement. Use of resources: The council’s Use of resources: The council Use of resources: The council arrangements are generally manages its budget well. Its needs to put in place a sustainable effective in managing finances Business Transformation Strategy and deliverable medium-term within budget and to support provides a clear focus and direction financial strategy. It needs to risk management, equalities for efficiency and improvement. improve its financial management and sustainability. Service There is a financial risk if its planned and financial planning. It faces improvements are needed in savings are not achieved. The significant challenges in terms people management, medium- council has improved its approach of achieving a sustainable term financial planning, asset to how it manages its workforce. financial position. management, procurement and in Although it is at an early stage, the demonstrating competitiveness. council is progressing its proposals The council generally knows where for a shared education and it needs to improve and has work children’s service with East Lothian under way in most of these areas. Council.
Cont
Page 58 of 164 Part 5. Is the council demonstrating continuous improvement? | 45
2008 Controller of Audit 2008 2012 Controller of Audit 2012 2019 Controller of Audit 2019 judgement judgement judgement Partnership working: The council Partnership working: Partnership Partnership working: Partnership needs to take a more strategic working is strong in Midlothian and working continues to be strong. approach to Community Planning. the council and its partners are There is solid evidence of involving Partnership working has contributed making progress in delivering their communities in the redesign to some positive outcomes for local outcomes. The council and and delivery of services. More communities but a more coordinated its partners are good at consulting remains to be done to ensure approach to working with partners and involving local communities wider community participation and is required. The council works and can demonstrate how this has ownership in local neighbourhood effectively with the voluntary sector contributed to service delivery. The planning. but this has not been the case with partnership is committed to further all partners across important areas of increasing community involvement service delivery. through its development of neighbourhood planning. Customer focus: The council Customer focus: The council Customer focus: The council’s revised its management structure in has been slow in developing approach to its customer focus has April 2007 with the aim of increasing its approach to responding to improved. Further developments customer focus, encouraging customer requests and enquiries, are planned through its workstream innovation, improving efficiency and but in the last year has put in on digitally-led transformation but productivity, and promoting joined-up place the building blocks to allow at this point these are not well and strong accountability. However it to improve the way it delivers progressed. it was not able to demonstrate customer services. It now needs to that the new structure represents increase the pace of change in the optimum arrangement for this area. Midlothian. Continuous Improvement: The Continuous improvement: Since Continuous improvement: The council has many processes in 2010, the council has developed a council has delivered a number of place to support performance prioritised business transformation significant projects but it has not management and continuous savings (BTS) approach to address yet made the progress needed improvement but needs to apply key improvement areas. Good on its transformation programme. these more rigorously if it is to deliver progress has been made through It launched a new programme its priorities and improve services. this strategy in a short period of in 2018. The council is aware of It faces a challenging improvement time eg People Workstream. There where it needs to improve and it is agenda with limited resources. Past remain a number of challenges focused key priorities. improvement plans have proved to take forward its improvement unrealistic and it now needs to set agenda. The council now needs clearer priorities linked to available to ensure that these plans are resources to meet its responsibilities implemented. to deliver Best Value.
Source: Audit Scotland
Page 59 of 164 46 |
The council has completed some successful service reviews but has lacked a corporate approach to self-evaluation
119. The Best Value report in 2012 noted the council’s approach to self-evaluation. It recognised its intention to develop a programme of self-assessments, based on the Public Services Improvement Framework. The council did not implement this programme immediately, but carried out a programme of self-evaluation during 2014/15. The council introduced its ‘Delivering Excellence Framework’ in June 2015 and this included a corporate self-evaluation. In addition to stand-alone reviews, the council’s service plans and service performance reports have a good focus on improvement activity. Performance is monitored on a quarterly basis by Cabinet and by the Performance Review and Scrutiny Committee.
120. Until recently, services took forward their own self-evaluation programmes. The chief executive has now introduced a more corporate approach. The SLG now has oversight of the self-evaluation programme and senior officers are challenging each other on their performance, another element in one council working.
121. The council has improved in a number of areas, and this can be seen from the outputs of some successful service reviews. The council completed a review of its Lifelong Learning and Employability service in November 2015. This clarified the scope of the service and the support it would deliver. As a result of the review, community development and capacity building have been moved to another team so that the Lifelong Learning and Employability service can focus on supporting people to build core skills for learning, life and work, including positive destinations (Case study 2, page 25). This refocusing contributed to a very positive inspection of Community Learning and Development (paragraph 101). Other examples of successful service reviews include the children’s service review in October 2016, which led to greater clarity in roles and responsibilities.
The council has made limited progress against its corporate transformation programme. This has contributed to its financial difficulties
122. The council has not fully delivered BTS, its previous corporate transformation programme. Some successes include: developing and launching a new responsive council website to improve customer accessibility and functionality; securing funding for the upgrade and extension of free public WiFi provision across libraries and hub buildings; and launching a new mobile library service into communities across Midlothian. However, the changes that the council has made have not transformed services, or how it delivers services, on the scale required.
123. The council spent £6.5 million on its transformation programme between 2011 and 2018 and delivered £14.9 million of the £16.1 million planned savings by March 2018. This shortfall has contributed to the council’s financial difficulties.
124. Given the acute financial position facing the council there is a need for a significant improvement in the pace of transformation, supported by clear reporting and effective cross-party scrutiny. The council’s budget report in February 2019 analysed the funding gap within the context of elements of the budget that are fixed or difficult to change. It estimates that this means the impact on other elements of the budget, such as less protected services, is significant. The council has estimated that the budget shortfall is 11 per cent
Page 60 of 164 Part 5. Is the council demonstrating continuous improvement? | 47
of these other elements of the budget for 2019/20 and could increase to 45 per cent by 2022/23. It therefore needs to urgently transform how services are delivered for the future.
The council adopted a clearer approach to transformation in February 2018. Progress against the workstreams is mixed
125. The council adopted a clearer approach to transformation in February 2018. At that point it had five transformation workstreams as the Integrated Health and Social Care Transformation Programme was within its overall programme. In February 2019, it updated its programme to focus on the following four workstreams:
• Services with Communities – changing the council’s relationship with communities from a paternalistic one focused on service provision to one based on partnership and co-production and working together.
• Entrepreneurial Council – covers property development, income generation, asset utilisation and energy. It focuses on the commercial opportunities associated with these. This includes the business plan for Destination Hillend, the council’s snow sports centre.
• Digitally Led Transformation/Customer Services – the council aspires to be at the forefront of digitally enabled change, which will support customer services transformation. This workstream builds on and refocuses the customer services strand of the previous transformation programme.
• Shared Services – focuses on service sharing and collaborative working as key considerations for sustaining services.
126. The council has made a good start with the Services with Communities workstream, evidenced through its clear commitment to engagement and co-production with communities. Across all the workstreams, it is at an early stage in making the cultural shift necessary to progress its transformation. There has been less progress against its digital transformation workstream. The current focus is on an online payment system and it is yet to propose more fundamental deliverables. The council should seek to learn from other authorities where it can and utilise support from the Improvement Service and other bodies where appropriate.
The council is aiming to make £21 million of savings through its new transformation activity and savings plans
127. In February 2018, as part of its budget-setting process, the council set out its Change Programme. This identified the savings it planned to achieve from five transformation programmes and additional saving streams. At that time the council identified it needed to make £32.4 million of savings by 2021/22 with £11.4 million of savings in 2018/19. The council updated these saving plans as part of the budget-setting process in February 2019 (Exhibit 15, page 48). These revised figures show the council is seeking to save £21 million, with £9.2 million coming from its transformation programme and £9.7 million coming from other council service savings. Officers are continuing to develop and update the savings projections.
Page 61 of 164 48 |
Exhibit 15 Savings from new transformation programme and additional savings streams, projected at February 2019, cumulative totals The council has set out savings plans to the end of 2022/23.
£ million Programme name 2019/20 2020/21 2021/22 2022/23 Reduced IJB allocation and 1.51 1.51 1.51 1.51 efficiency target Previous transformation programme 0.98 1.13 1.22 1.22 Transformation- Services 0.0 0.10 1.10 1.10 with Communities Transformation-Entrepreneurial Council 0.12 1.72 4.03 4.13 Transformation- Digitally Led 0.05 0.15 0.65 0.65 /Customer Services Transformation- Shared Services 0 1.06 2.06 2.06 Resource allocation changes 7.25 9.79 9.71 9.71 Income from fees and charges 0.15 0.30 0.45 0.6 Totals 10.06 15.76 20.73 20.98
Source: Appendices to Financial Strategy 2019/20 (including projections to 2022/23) Midlothian Council, February 2019
128. The council’s savings include what it terms resource allocation changes. These involve:
• reviewing the services currently delivered by the council and considering options for future delivery, including whether services could be outsourced or transferred
• savings from efficiency targets for services.
129. For 2019/20 the Education, Communities and Economy directorate needs to make £2.67 million of savings, Customer and Housing Services and non- delegated health and social care services £0.59 million and the Resources directorate £2.49 million. The council plans to deliver savings of £4.13 million by 2022/23 through its Entrepreneurial Council Programme, a combination of past and current transformation programmes. The council reports variations from budget each quarter. In order to help elected members scrutinise performance against the council’s transformation and savings plans, officers should provide a report summarising what has been achieved for 2018/19.
130. Officers should ensure that savings proposals are robustly forecasted. Recent monitoring has shown that this is still an issue, such as the delivery of savings from lifeguard reduction and reducing housing voids standards. These have been reported as unachievable. Forecasting savings obviously involves staff spending a great deal of time working through the implications of savings proposals. Moving to a three-year financial strategy should help ensure that staff time can be spent on strategic, rather than reactive, planning. Page 62 of 164 Part 5. Is the council demonstrating continuous improvement? | 49
There needs to be effective cross-party governance arrangements to agree and implement the medium-term financial strategy and streamlined transformation programme
131. The cross-party Business Transformation Steering Group (BTSG) has not worked effectively. Different political parties have been unwilling to participate in the group at various times. There is frustration among elected members across all political parties that the group does not have a clearer focus on transformation. The detail of papers is more concerned with progress against savings rather than how to generate the ideas and actions needed to transform. Although this is the reality for the council at the moment, it must continue to look forward. The BTSG has been a difficult forum. It has not allowed the frank and open exchange of views, needed to better equip the council for meeting its financial challenge – either through difficult savings decisions or by transforming so that the council does less or generates more income.
132. It is essential that effective cross-party governance arrangements are put in place to enable the council to agree and implement its medium-term financial strategy and have honest conversations regarding how to transform. All elected members have a responsibility to contribute constructively. It is for the council to determine the best governance arrangements to support this, but a greater role for elected member leads in a particular service or outcome area, within cross- party forums, as now happens for education, may help support this. The council may wish to refer to Audit Scotland’s guidance on openness and transparency to help work through its governance arrangements.15
The council is focused on key areas for improvement. However, there are risks around the council’s successful delivery of change due to its past track record and the scale of the challenge
133. The council is aware of the difficulties it will have in truly transforming what it currently delivers. It has identified the opportunities and risks for each of the transformation workstreams. These are regularly monitored by senior officers and by the cross-party BTSG, and reports are shared with the Audit Committee to note as deemed necessary.
134. The council is aware of the risks that it may not have the skills or capacity needed to transform how it operates. The council has assessed the savings it plans to achieve from the transformation of education, children’s services, and housing and customer care as lower risk than those within commercial operations, finance integrated service support and property and facilities management. It is essential that services respond to the challenges set out within their transformational workstreams.
135. The council recognises that it needs to take urgent attention given the scale of the challenge it faces, and the new chief executive is taking appropriate action. The SLG and elected members from across political parties will need to work together, collaboratively and constructively, to make the changes required. The council has successfully delivered a number of large projects, but it has not yet been able to make the transformation required. There are risks due to the council’s capacity to deliver the changes required at this time given the scale of these challenges.
Page 63 of 164 50 |
Recommendations
As a matter of urgency, officers and elected members need to work together to develop and agree the medium-term financial strategy and progress the council’s transformation plans (paragraphs 28, 64–65, 73–74, 130–132).
The council needs to develop and sustain more constructive relationships between members and between members and officers. It needs to implement effective cross-party governance arrangements to ensure that it delivers the medium-term financial strategy and transformation plans (paragraphs 22–25, 28, 74, 131–132).
The council needs to ensure that workforce planning reflects the medium-term financial strategy (paragraph 86).
The council should undertake a review of its capital programme, to ensure that the timeframes for delivery are achieved going forward and that monitoring and reporting mechanisms are enhanced to drive more accurate analysis and planning around capital work (paragraphs 80–82).
The council need to continue to implement financial planning arrangements to address budget gaps, underpinned by robust financial budgeting and monitoring arrangements (paragraphs 75–79)
The council should refine its vision in light of the outcome of consultation work through the Services with Communities transformation workstream and to ensure that it focuses its activity most effectively (paragraph 19).
Elected members need to exercise appropriate scrutiny at all times, take ownership for personal development plans and take up relevant training opportunities (paragraphs 25, 59–62).
The council should continue to build on positive elements of community empowerment. It should look to increase community ownership of local neighbourhood plans and work with communities to improve how they monitor progress (paragraphs 113–117).
Page 64 of 164 Endnotes | 51
Endnotes
1 National Records of Scotland. 2 Scottish Government Statistics, New house building completion rates 2018. 3 Transport and Travel in Scotland, Transport Scotland 2017. 4 NOMIS Official Labour Market Statistics. 5 Sport Scotland Website, 2013. 6 Partners include Midlothian Voluntary Action, Midlothian Council Community Safety, Midlothian Integration Joint Board, Scottish Fire & Rescue Service, Police Scotland, NHS Lothian, Federation of Community Councils, Scottish Enterprise, Skills Development Scotland, Chamber of Commerce, Armed forces and SEStran. 7 http://www.audit-scotland.gov.uk/our-work/how-councils-work. 8 Midlothian’s Health and Social Care Delivery Plan 2018/19. 9 Holyrood Report on Council Websites, June 2018. 10 Scottish Government Housing Statistics for Scotland and Scottish Housing Regulator Stock data. 11 SPICe City Regions Deal Summary Paper, November 2017. 12 Living Wage Foundation, May 2018. 13 Midlothian Council Local Scrutiny Plan 2018-19, Audit Scotland. 14 Inspection of Community Learning and Development in Midlothian Council, Education Scotland, December 2016. 15 Audit Scotland, 2017/18 Audits: Notes for guidance, Openness and Transparency.
Page 65 of 164 52 |
Appendix Best Value audit timeline
Council journey August 2018 Dr Grace Vickers appointed as Chief Executive
May 2018 By-election after death of Labour Provost: May 2017 SNP wins May 2007 September May 2012 Scottish local by-election. Scottish local Scottish local elections Labour minority 2009 Labour administration elections: Kenneth Lawrie elections: Labour SNP minority minority and Conservative appointed as Chief administration Provost administration Executive administration
2007 2008 2009 2012 2017 2018 2019
June 2008 June 2012 July 2019 The audit of Best Value The audit of Best Value Best Value and Community Planning and Community Planning Assurance Report
Page 66 of 164 Best Value Assurance Report Midlothian Council
This report is available in PDF and RTF formats, along with a podcast summary at: www.audit-scotland.gov.uk
If you require this publication in an alternative format and/or language, please contact us to discuss your needs: 0131 625 1500 or [email protected]
For the latest news, reports and updates, follow us on:
Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN T: 0131 625 1500 E: [email protected] www.audit-scotland.gov.uk
ISBN 978 1 913287 05 4
Page 67 of 164
Page 68 of 164 Best Value Assurance Report: Midlothian Council Action Plan
This Plan is based on recommendations identified in the Best Value Assurance Report (BVAR) published by the Accounts Commission on the 4 July 2019.
Recommendation 1: As a matter of urgency, officers and elected members need to work together to develop and agree the medium-term financial strategy and progress the council’s transformation plans. (see paragraphs 28, 64 – 65, 73 – 74, 130 – 132) No. Action Lead Target Comment Date 1.1 Medium Term Financial Strategy (MTFS) to be agreed by Chief June 2019 Introduction of the 3 year plan and Council. Executive, strategic approach to financial BTSG, management which will allow more Section 95 appropriate lead in times to deliver Officer required level of service change. 1.2 MTFS and Transformation Programme governance Chief June 2019 Ensuring ongoing cross-party working framework via BTSG to be agreed by Council. Executive, and decision making for the life of the BTSG, strategy. Section 95 Officer 1.3 MTFS and supporting Transformation Programme plans, BTB/ August Supporting Council to operate within reporting and monitoring arrangements to be put in place. BTSG 2019 established budgets and achieves financial savings planned through transformation. Early adoption of the strategy creates the opportunity for a more robust evaluation of proposals and appropriate engagement with communities.
Page 69 of 164 Best Value Assurance Report: Midlothian Council Action Plan
Recommendation 2: Recommendation 7: The council needs to develop and sustain more constructive Elected members need to exercise appropriate scrutiny at all times, relationships between members and between members and take ownership for personal development plans and take up relevant officers. It needs to implement effective cross-party governance training opportunities. (see paragraphs 25, 59 – 62) arrangements to ensure that it delivers the medium-term financial strategy and transformation plans. (see paragraphs 22 – 25, 28, 74, 131 - 132) No. Action (Also See Recommendation 1 Actions) Lead Target Comment Date 2.1 All Elected Member development day – Roles and Policy & Sept 2019 A greater role for elected member leads Responsibilities, Cross-party working group frameworks etc Scrutiny in a particular service or outcome area, Manager within cross-party forums, as now happens for education, may help support this. 2.2 Elected Member and Officer Protocol developed/agreed Policy & August Proposal to September Council Scrutiny 2019 Manager 2.3 Refreshed Scrutiny Training/Guidelines/Checklist: Policy & Q3/Q4 Develop Elected Member Development • How Councils Work – Roles and Relationships: are Scrutiny 2019/20 Programme and incorporate various you getting it right? Session Manager/ elements identified. • How Councils Work – Safeguarding Public Money: Chief Internal are you getting it right? Session Auditor • Delivering Best Value – joint Elected Member and Officer Session • Delivering a transformed Council/Midlothian – joint session 7.1 Develop an Elected Member Development Programme Policy and Q3/Q4 (including use of 360 Tool) Scrutiny 2019/20 Manager
Page 70 of 164 Best Value Assurance Report: Midlothian Council Action Plan
7.2 Introduce an Elected Member Learning and Development Policy and Q3/Q4 commitment and personal development plans? Scrutiny 2019/20 Manager 7.3 Re-establish a central Training Records system for Elected Policy and Q3 Members Scrutiny 2019/20 Manager 7.4 Improve the quality of reports to ensure they are readily Policy and Q3/Q4 understood and Elected Members are clear on what Scrutiny 2019/20 decisions they are being asked to make. Manager
Recommendation 3: The council needs to ensure that workforce planning reflects the medium-term financial strategy. (see paragraphs 76 - 88) No. Action Lead Target Comment Date 3.1 Review and update the Council’s Workforce Strategy and HR Manager Q3 associated Service Workforce Plans to fit with the revised 2019/20 priorities and finances as per MTFS. 3.2 Develop data analytics to support real time reporting for HR and Q3 People and Financial Dashboards managers in relation to people and financial data Finance 2019/20 Manager 3.3 Develop data analytics for a data set to support Elected Finance Q3 Financial Dashboards Member and Officer understanding and decision making Manager 2019/20 with regards to financial performance 3.4 Ensure workforce planning and profiles reflect the changing Heads of Ongoing pressures on services due to the growing population Service and HR Business Partners
Page 71 of 164 Best Value Assurance Report: Midlothian Council Action Plan
Recommendation 4: The council should undertake a review of its capital programme, to ensure that the timeframes for delivery are achieved going forward and that monitoring and reporting mechanisms are enhanced to drive more accurate analysis and planning around capital work. (see paragraphs 80 – 82) No. Action Lead Target Comment Date 4.2 Re-establish Capital Programme Board framework and Head of Q1 reporting responsibilities including Review of Capital Plan Finance and 2019/20 and programme t achieve more accurate forecasting and ISS/ Head of delivery Property and Facilities Management
Recommendation 5: The council need to continue to implement financial planning arrangements to address budget gaps, underpinned by robust financial budgeting and monitoring arrangements. (see paragraphs 75 – 79) No. Action Lead Target Comment Date 5.1 Develop data analytics to support real time reporting for Head of Q1 Financial Dashboards financial data and budget monitoring (see Actions 3.2/3.3) Finance and 2019/20 ISS 5.2 Refresh governance structure on the delivery of savings and BTB/ BTSG August in relation to MTFS following June Council. 2019
Page 72 of 164 Best Value Assurance Report: Midlothian Council Action Plan
Recommendation 6: The council should refine its vision in light of the outcome of consultation work through the Services with Communities transformation workstream and to ensure that it focuses its activity most effectively. (see paragraph 19) No. Action Lead Target Comment Date 6.1 MTFS informed by outcome of Our 2040 Vision exercise Strategic August Beyond categorisation of various and the following 4 key themes from various consultation Service 2019 proposals, is there additional activity to be activities: Redesign identified in an action plan to monitor • One Council: Working with you, for you Manager delivery? • Preventative and Sustainable (Service with Will vision be refined further? • Efficient and Modern Communities) • Innovative and Ambitious
Recommendation 8: The council should continue to build on positive elements of community empowerment. It should look to increase community ownership of local neighbourhood plans and work with communities to improve how they monitor progress. (see paragraphs 113 – 117) No. Action Lead Target Comment Date 8.1 Introduce a formal mechanism for reporting against all Communities June We will work with neighbourhood planning Neighbourhood Plans and 2020 groups/Democratic Services to design an Learning agreed process for reporting on Manager Neighbourhood Plans. 8.2 Review community engagement, capacity and ownership of Communities June Through the mechanism of Community Neighbourhood Plans and potential opportunities for wider and 2020 Empowerment Act we will work with local membership of community councils or formalising wider Learning communities/CPP/Community Councils to network of community groups Manager review Neighbourhood plans
Page 73 of 164 Best Value Assurance Report: Midlothian Council Action Plan
8.3 Review possible declining trend in Citizens Panel questions: Communities Winter • Ability to influence decisions and 2019 • Involvement in community Learning Manager / and identify areas for improvement Strategic Service Redesign Manager 8.4 Review future models (as a result of reduced internal Communities June Through the mechanism of Community capacity) for working with communities in designing and and 2020 Empowerment Act we will work with local delivering services Learning communities/CPP/Community Councils to Manager / review Neighbourhood plans and link this Strategic to the capacity of Communities and Service learning staff team. Redesign Manager
Page 74 of 164 Midlothian Council Tuesday 20 August 2019 . Item No 8.2 Audit Committee Annual Report 2018/19
Report by Chair of Audit Committee
1. Purpose of the Report
The purpose of this report is to provide all Members of Midlothian Council with the Audit Committee Annual Report 2018/19 that sets out how the Audit Committee has fulfilled its remit and provides assurances to the Council.
2. Background
It is important that the Council’s Audit Committee fully complies with best practice guidance on Audit Committees to ensure it can demonstrate its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council.
The Chartered Institute of Public Finance and Accountancy (CIPFA) issued an updated guidance note Audit Committees Practical Guidance for Local Authorities and Police 2018 Edition (hereinafter referred to as CIPFA Audit Committees Guidance). It incorporates CIPFA’s Position Statement: Audit Committees in Local Authorities and Police which sets out CIPFA’s view of the role and functions of an Audit Committee. The CIPFA Audit Committees Guidance includes the production of an annual report on the performance of the Audit Committee against its remit for submission to the Council.
3. Audit Committee Annual Report 2018/19 and Self-Assessments
The Audit Committee Annual Report 2018/19, which is appended to this report as Appendix 1 for consideration, is designed both to provide assurance to full Council and to identify areas of improvement which are intended to enhance the Audit Committee’s effectiveness as a scrutiny body. Midlothian Council continues to adopt this best practice.
The Audit Committee carried out self-assessments of Compliance with the Good Practice Principles Checklist and Evaluation of Effectiveness Toolkit from the CIPFA Audit Committees Guidance during an Informal Session on 28 May 2019 facilitated by the Chief Internal Auditor. The Audit Committee at its meeting on 24 June 2019 agreed these self-assessments and approved their Annual Report 2018/19 for presentation to Council.
The outcome of the self-assessments was a medium degree of performance against the good practice principles and a medium degree of effectiveness. Improvements were identified focussing on skills and knowledge competency to fulfil role.
Page 75 of 164 2 4. Report Implications
4.1 Resource
The Council has provided support and resources to the Audit Committee throughout the year including a Democratic Services Officer as the Minute secretary.
In terms of accountability and independence to ensure conformance with the Public Sector Internal Audit Standards (PSIAS), the Chief Internal Auditor reports functionally to the Audit Committee as outlined within the Internal Audit Charter.
4.2 Risk
The role of the Audit Committee includes the high level oversight of the effectiveness of the Council’s systems of internal financial control, internal control and governance, including risk management.
There is a risk that the Audit Committee does not fully comply with best practice guidance thus limiting its effectiveness as a scrutiny body as a foundation for sound corporate governance. The completion of the annual self-assessment and identification of improvement actions as evidenced through this Annual Report will mitigate this risk.
4.3 Single Midlothian Plan
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
4.4 Key Priorities within the Single Midlothian Plan
Midlothian Council and its Community Planning Partners include the following areas as key priorities under the Single Midlothian Plan:
• Reducing the gap in learning outcomes • Reducing the gap in health outcomes • Reducing the gap in economic circumstances
4.5 Impact on Performance and Outcomes
The members of the Audit Committee have reflected on the performance and outcomes against the remit of the Committee through the completion of annual self-assessments. The identification of improvement actions as evidenced through the Annual Report are designed to enhance its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council.
Page 76 of 164 3 The Audit Committee recommends to Council that the Terms of Reference for the Audit Committee be amended, as stated in the final section of the Audit Committee Annual Report 2018/19, to ensure they continue to be relevant to the local government operating environment and best practice and to explicitly address all the core areas identified in CIPFA’s Position Statement (2018).
4.6 Adopting a Preventative Approach
Assurances received by the Audit Committee from Management, Internal Audit and External Audit set out the assessment of prevention and detection internal controls and governance arrangements.
4.7 Involving Communities and Other Stakeholders
The Audit Committee in fulfilling its governance role acts as a bridge between the Council and other stakeholders.
4.8 Ensuring Equalities
There are no equalities issues with regard to this report.
4.9 Supporting Sustainable Development
There are no sustainability issues with regard to this report.
4.10 IT Issues
There are no IT issues with regard to this report.
5. Recommendations
The Council is therefore asked to: a) consider the performance of its Audit Committee and its assurances to the Council as set out in the Audit Committee Annual Report 2018/19 (Appendix 1); and b) approve the amendments to the Audit Committee’s terms of reference within the Council’s Scheme of Administration, as stated in the final section of the Audit Committee Annual Report 2018/19 (Appendix 1).
Date: 10 July 2019 Report Authors: Jill Stacey, Chief Internal Auditor E-Mail: [email protected]
Page 77 of 164
Page 78 of 164 APPENDIX 1 MIDLOTHIAN COUNCIL AUDIT COMMITTEE ANNUAL REPORT FROM THE CHAIRMAN – 2018/19
This annual report has been prepared to inform the Midlothian Council of the work carried out by the Council’s Audit Committee during the financial year. The content and presentation of this report meets the requirements of the CIPFA Audit Committees Practical Guidance for Local Authorities and Police 2018 Edition (hereinafter referred to as CIPFA Audit Committees Guidance) to report to full Council on a regular basis on the Committee’s performance in relation to the terms of reference and the effectiveness of the Committee in meeting its purpose. Meetings The Audit Committee has met 9 times during the financial year which included meetings on 1 and 15 May, 18 and 19 June, 28 August, 25 September, 11 December 2018, 29 January and 12 March 2019 to consider reports pertinent to the audit cycle and its terms of reference. The Audit Committee is a key component of Midlothian Council’s corporate governance. It provides an independent and high-level focus on the audit, assurance and reporting arrangements that underpin good governance and financial standards. The purpose of the audit committee is to provide independent assurance to elected members of the adequacy of the risk management framework and the internal control environment. It provides independent review of Midlothian Council’s governance, risk management and control frameworks, and oversees the financial reporting and annual governance processes. It oversees internal and external audit, helping to ensure efficient and effective assurance arrangements are in place. The Audit Committee scrutinised the Annual Report and Accounts of the Council at appropriate times in accordance with its terms of reference, which also includes the promotion of good governance, and financial and ethical standards. The Audit Committee also reviewed the Annual Governance Statement in order to assess whether it properly reflects the risk environment and whether the content is consistent with its evaluation of the internal controls and governance arrangements based on evidence received during the year. The Audit Committee approved the terms of reference for Internal Audit (Internal Audit Charter) and the Internal Audit Strategy and Annual Plan. It considered Internal Audit’s reports arising from each review setting out findings, audit opinions, good practice and recommendations. It monitored the implementation of agreed actions through receipt of two reports during the year from Internal Audit to ensure that audit recommendations had been fully implemented to its satisfaction. It monitored Internal Audit’s performance including progress against annual plan, conformance with Public Sector Internal Audit Standards (PSIAS), and quality assurance and improvement plan (QAIP) within Internal Audit mid-term performance and annual assurance reports, and considered the statutory annual audit opinion within the Internal Audit Annual Assurance Report. The Audit Committee has reviewed the External Audit Strategy and Plan Overview for Midlothian Council, considered External Audit reports including the annual report to Members and the Controller of Audit on the annual audit of the Council, reviewed the main issues arising from the External Audit of the Council’s statutory accounts, and monitored the implementation of agreed actions arising. The Audit Committee considered the effectiveness of the risk management process throughout the Council through the receipt of periodic reports from the Risk Manager during the year on corporate risks and mitigations and the appropriate challenge of Senior Management to ensure that the most significant risks are being identified, evaluated and managed. The Audit Committee considered the adequacy and effectiveness of the Council’s counter fraud arrangements by way of an annual report which set out the counter fraud activity and outcomes, and received assurances from Auditors on fraud risks and counter fraud controls. Page 79 of 164 1 The Audit Committee is the body responsible for scrutiny of the treasury management strategy, mid- term and annual performance reports prior to their presentation to Council for approval. An additional meeting was arranged to accommodate the reporting cycle and consideration by the Committee in advance of Council approval, in response to an Internal Audit recommendation, though the sequencing of reports presentation was inconsistently applied during the year and this scrutiny role was not effectively fulfilled. The minutes of Audit Committee meetings were presented for approval by the Council, and any exceptional items or recommendations were referred to the Council in accordance with the remit. Membership The Membership of the Audit Committee is part of the approved Midlothian Council’s Standing Orders (amended June 2017) namely being six Members of the Council and two non-voting members appointed from an external source. Two of the six Elected Members on the Audit Committee are in the Cabinet (Committee with executive decision-making powers). However, this is considered as difficult to avoid in a small Council and the Audit Committee operates with an independent Chair and independent member and there is therefore effective independence and challenge. The two non- voting external members were appointed from the community following a recruitment and selection process carried out during 2017. This enhances the robustness and independence of the Audit Committee’s role in the scrutiny process of internal controls and governance. The Committee membership during the year included Mr M Ramsay (Chair), Councillors K Baird, A Hardie, D Milligan, J Muirhead, K Parry and P Smaill, and Mr P De Vink. The attendance by each member at the Committee meetings throughout the year was as follows:
Member 1 May 15 May 18 Jun 19 Jun 28 Aug 25 Sep 11 Dec 29 Jan 12 Mar 2018 2018 2018 2018 2018 2018 2018 2019 2019 Mr M Ramsay √ √ √ √ √ √ √ (Chair) Cllr K Baird √ √ √ √ √ Cllr A Hardie √ √ √ √ √ √ √ √ Cllr D Milligan √ √ √ √ √ √ √ √ Cllr J Muirhead √ √ √ √ √ √ √ √ √ Cllr K Parry √ Cllr P Smaill √ √ √ √ √ √ √ √ √ Mr P De Vink √ √ √ √ √ √ √ √ √
Every meeting of the Audit Committee in 2018/19 was quorate (i.e. at least three elected members present). At the two meetings when Mr M Ramsay was unavailable, Cllr P Smaill was Chair of the meetings following approval by the Committee. Cllr Parry was on maternity leave during the year. All other individuals who attended the meetings are recognised as being “In Attendance” only. The Chief Executive, Directors, Head of Finance and Integrated Support Services (Section 95 Officer), External Audit (EY), and Internal Audit attend all Audit Committee meetings, and other senior officers also routinely attend Audit Committee meetings. The Council has provided support and resources to the Audit Committee throughout the year including a Democratic Services Officer as the Minute secretary.
Skills and Knowledge Given the wider corporate governance remit of Audit Committees within local government and the topics now covered by the external and internal audit functions, it is noteworthy that there is a range of skills, knowledge and experience that Audit Committee members bring to the committee, not limited to financial and business management. This enhances the quality of scrutiny and discussion of reports at the meetings. No one committee member would be expected to be expert in all areas.
Page 80 of 164 2 Self-Assessment of the Committee The annual self-assessment was carried out by members of the Audit Committee on 28 May 2019 during an Informal Session facilitated by the Chief Internal Auditor using the Good Practice Principles Checklist and Evaluation of Effectiveness Toolkit from the CIPFA Audit Committees Guidance. This was useful for Members to ensure the Committee can demonstrate its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council.
The outcome of the self-assessments was a medium degree of performance against the good practice principles and a medium degree of effectiveness. Improvements were identified focussing on skills and knowledge competency to fulfil role. In summary these are: Members Briefings / Seminars on Statutory Accounts and Treasury Management to help their understanding of these technical areas; utilise the CIPFA Skills and Knowledge toolkit; Informal Sessions to enable the members of the Committee to meet privately and separately to raise any matters with the External and Internal Auditors; obtain feedback on its performance from a range of Directors and others who interact with the Committee on a regular basis; and understand the effectiveness of other Committees fulfilling their remits on which the Audit Committee places reliance.
Assurance Statement to the Council The Audit Committee provides the following assurance to the Council: • The Council has received the Minutes of the Audit Committee throughout the year. • The Audit Committee has operated in accordance with its agreed terms of reference, covering the themes of Governance, Risk and Control, Internal Audit, External Audit, Financial Reporting, and Accountability Arrangements, and accordingly conforms to the Audit Committee principles within the CIPFA Position Statement for Audit Committees, with the exception of scrutiny of Treasury Management arrangements whereby the sequencing of reports presentation was inconsistently applied during the year and this scrutiny role was not effectively fulfilled. • It focused entirely on matters of risk management, internal control and governance, giving specialist advice to the Council on the value of the audit process, on the integrity of financial reporting and on governance arrangements, and acted as a bridge between the Council and other stakeholders. It did this through material it received from Internal Audit, External Audit, other Audit bodies, and assurances from Management relevant to audit cycle of reporting. • A theme that has repeated in a number of specific reports this year and was stated in the Internal Audit Annual Assurance Report 2018/19 presented to the Committee on 28 May 2019 refers to the inadequacy of Management monitoring the effectiveness of their internal controls and governance arrangements, and this will continue to be an area of focus for the Audit Committee. • In December 2018 the Audit Committee received an update report to enable them to monitor progress with the implementation of Internal Audit recommendations arising from May 2018 Report. Monitoring their implementation in full to enhance the effectiveness of internal controls and governance will continue to be an area of focus for the Audit Committee. • The Audit Committee will review the unaudited Annual Accounts 2018/19 of the Council at its meeting on 24 June 2019. Specifically, to consider whether appropriate accounting policies have been followed and whether there are concerns arising from the financial statements. It will review the draft Annual Governance Statement prior to approval and consider whether it properly reflects the risk environment and supporting assurances. It will review the final audited accounts at its meeting on 24 September 2019 alongside the External Audit report on their annual audit 2018/19 to consider whether there are concerns arising from the financial statements or from the audit that need to be brought to the attention of the Council, and in order to decide whether to recommend to the Council that they be adopted.
Page 81 of 164 3 • The Audit Committee has reflected on its performance during the year, and has agreed areas of improvements to enable it to fulfil its scrutiny and challenge role and to enhance its effectiveness.
Recommendation of the Terms of Reference for the Audit Committee for the coming year The Audit Committee recommends to Council that the Terms of Reference for the Audit Committee be amended as follows, to ensure they continue to be relevant to the local government operating environment and best practice and to explicitly address all the core areas identified in CIPFA’s Position Statement (2018): 3. To review the council’s corporate governance arrangements against the good governance framework and consider annual governance reports and assurances, relating to the council’s service delivery models including partnership and collaboration, to ensure that the highest standards of probity, public accountability and ethical standards are demonstrated. 6. To consider the council’s framework of assurance, relating to the council’s service delivery models including partnership and collaboration, and ensure that it adequately addresses the risk and priorities of the council. 7. To monitor the effective development and operation of risk management in the council relating to the council’s service delivery models including partnership and collaboration. 12. To monitor controls operating over Treasury Management, through the scrutiny of the treasury management strategy, mid-term and annual performance reports prior to their presentation to Council for approval, and the Council’s approach to establishing ethical standards. 19. To consider the Chief Internal Auditor’s annual report: a) The statement of the level of conformance with the Public Sector Internal Audit Standards and Local Government Application Note (including code of ethics) and the results of Assurance and Improvement Programme that supports the statement – these will indicate the reliability of the conclusions of internal audit.
Mike Ramsay Chairman of Audit Committee 14 June 2019
Page 82 of 164 4 Midlothian Council Tuesday 20th August 2019 Item No 8.3
Financial Monitoring 2019/20 – General Fund Revenue
Report by Gary Fairley, Head of Finance and Integrated Service Support
1 Purpose of Report
The purpose of this report is to provide Council with information on performance against revenue budget in 2019/20, details of the material variances and a projection of the General Fund Balance.
2 Background
2.1 Budget Performance
The projected budget performance figures shown in appendix 1 result in a small net overspend of £0.489 million for the year which is 0.23% of the revised budget.
Although a small net overspend is reported, the Chief Executive is clear in her message that service overspends resulting in an overall overspend is an unacceptable position. As a result, the Chief Executive has initiated a detailed review of the service areas that are most significantly overspent and has instructed relevant senior officers to deliver at pace recovery actions. Accordingly the projected overspend will be at least fully recovered as a consequence of mitigating actions that are already progressing thus will not have an adverse impact on the General Fund balance.
To supplement information Appendix 1a provides detail of year to date budgets and actuals which is part of regular information provision to budget holders.
Section 2.2 of the report covers the position with the Midlothian Integration Joint Board. The main areas of variance projected at quarter 1 for the remainder of Council services are outlined below:
Projected Overspends • a £2.337 million slippage in delivering the package of £7.988 million of transformational, operational and service cost reductions and income generation measures as evidenced in detail in Appendix 2; • Insurance settlements in excess of budget of £0.364 million as a consequence of the volume and some associated high values of claims on the Council received during quarter 1.
These are partly offset by favourable movements totalling £2.110 million.
Page 83 of 164 2
• Scottish Government funding for the teacher’s pay award and for additional employer’s superannuation costs for teachers exceeds the amount provided for in the budget by £0.607 million. Clarity in both areas emerged once the 2019/20 budget was set and in the case of teachers pensions this was only very recently; • The impact of vacant posts across the Council of £0.581 million. Strict vacancy control is in place and elements of the projected underspend mitigate some of the slippage in delivering savings proposals; • Re-phasing of three large projects in the General Services Capital Plan results in a reduced borrowing requirement in 2019/20 and consequently an underspend of £0.267 million in costs of servicing borrowing; • Developer contribution funding of £0.256 million which contributes to annual contractual payments for the Newbattle Digital Centre of Excellence; • Planning and Building Warrant fee income of £0.216 million; • Family placements for children of £0.183 million as a consequence of more cost effective solutions being implemented where possible.
Detailed information on material variances is contained in appendix 2 which identifies each variance, explains why it happened, outlines what action is being taken to control variances and details the impact of that action.
2.2 Delegation of resources to Midlothian Integration Joint Board
The approved budget provided for the allocation of £42.652 million to the Midlothian Integration Joint Board (MIJB) for the provision of delegated services.
The main areas of variance projected at quarter 1 for the MIJB are:
• The Community Care Resource Panel is projected to overspend by £1.022 million although this can be volatile given the fluidity of demand and potential high value of individual packages of care; • Plans to deliver £0.940 million of the savings target are still to be finalised; • Costs of £0.365 million in excess of budget for the Home Care service and Midlothian Enhanced Rapid Response and Intervention Team (MERRIT). A shortage of external supplier capacity continues to place pressure on internal resources; and • Additional running costs for Care Homes for Older people of £0.145 million.
These are partly offset by some favourable movements:
• Additional funding in 2019/20 of £0.850 million that is still to be aligned to service pressures and will mitigate some of the variance above; Page 84 of 164 3
• Vacant posts across areas of service of £0.344 million and • Income from service users that is £0.166 million in excess of budget.
The position will be reported to the MIJB on Thursday the 22nd August. In accordance with the Integration Scheme the MIJB is required to put in place a recovery plan to address the projected overspend. At this time the expectation is that action by the MIJB will address the projected overspend and no provision has been made for an additional budget allocation from the council.
2.3 Council Transformation Programme
In 2019/20 £0.271 million is projected to be applied to support the ongoing transformation programme. There are commitments of £0.478 million identified for future years.
The Reserves Strategy reported to Council on 12th February 2019 brought to Members attention the Capital Receipts Flexibility Scheme introduced by the Scottish Government in December 2018. Members approved recommendations to use scheme as the mechanism for funding applicable future severance and transformation costs. As a consequence uncommitted Council Transformation funding of is now included within the non-earmarked element of the General Fund.
2.4 Capital Receipts Flexibility Scheme
The Scottish Government introduced a Capital Receipts Flexibility Scheme which permit councils, subject to meeting some clearly defined criteria, to use in-year Capital Receipts to fund transformational costs. In 2019/20 £0.447 million of severance costs have been incurred and this is shown in General Fund Movement in section 2.5. Work is underway to assess the applicability of all of this spend against Capital Receipts Flexibility Scheme criteria. Capital Receipts for 2019/20 are currently projected to be £2.763 million.
At this stage it is expected that service review work in Lifelong Learning and Employability (LLE) will meet the scheme criteria. Severance costs of £0.224 million of 2019/20 relate to this review and are shown below in section 2.5 as funded in this way. The LLE review released 12 staff at an average payback of 0.50 years.
Page 85 of 164 4
2.5 General Fund Reserve
The projected balance on the General Fund as at 31 March 2020 is as follows: £ million £ million Reserve as at 1 April 2019 8.637 Less earmarked reserves utilised in 2019/20 (3.584) General Reserve at 1 April 2019 5.053
Planned movements in reserves Supplementary Estimates (0.490) Council Transformation Programme Costs (section 2.3) (0.272) Severance Costs (net of Capital Receipts Flexibility) (0.223)
(0.985) Overspend per appendix 1 (0.489) General Fund Balance at 31 March 2020 3.579 Mitigating actions to address the projected overspend 0.489 General Fund Balance at 31 March 2020 4.068
The General Fund Balance above is shown on the basis that, as a minimum, the projected net overspend will be fully recovered as a consequence of mitigating actions.
An element of the General Fund is earmarked for specific purposes and this is shown below:
£ million General Fund Balance at 31 March 2020 4.068 Earmarked for specific purposes Budgets earmarked for Council Transformation (0.478) Enhancement to Reserves earmarked for training (0.199) General Reserve at 31 March 2020 3.391
The Reserves Strategy approved by Council on 12 February 2019 needs the Council to maintain an adequate level of General Reserve to provide a contingency for unforeseen or unplanned costs and that in the current financial context approve the adoption of 2% of net expenditure (excluding resources delegated to the IJB) to be considered a minimum. This equates to £3.3 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 restatement of reserve position.
The General Reserve of £3.391 million is marginally above the minimum set in the Reserves Strategy but will only remain that way if there is no overall adverse performance against budget or any further draw on reserves.
Page 86 of 164 5
3 Report Implications
3.1 Resource
The projected performance against budget set out in this report presents the initial projections for the year. Work continues within the Directorates to reduce projected overspends and to progress the delivery of approved savings.
Whilst this report deals with financial issues there are no financial implications arising directly from it.
3.2 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 minimises 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 for the full year based on activity in the first quarter of the year. The material variances detailed in appendix 2 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.
3.3 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
3.4 Impact on Performance and Outcomes
The decisions taken to balance the budget will have fundamental implications for service performance and outcomes. The Council’s Transformation Programme aims to minimise the impact on priority services.
Page 87 of 164 6
3.5 Adopting a Preventative Approach
The proposals in this report do not directly impact on the adoption of a preventative approach.
3.6 Involving Communities and Other Stakeholders
No consultation was required.
3.7 Ensuring Equalities
There are no equality implications arising directly from this report.
3.8 Supporting Sustainable Development
There are no sustainability issues arising from this report.
3.9 IT Issues
There are no IT implications arising from this report.
4 Recommendations
It is recommended that Council:
a) Note that work is in place to secure improvement in the financial position and that the non-essential vacancy freeze and the moratorium on non-essential spend remain in place; b) Note that the Chief Executive has initiated a detailed review in areas of material overspend and there is a plan in place to mitigate the quarter 1 projected service overspends; and c) Otherwise note the contents of the report.
31st July 2019
Report Contact: David Gladwin Tel No 0131 271 3113 E mail [email protected]
Background Papers:
Page 88 of 164 MIDLOTHIAN COUNCIL Appendix 1
GENERAL FUND OVERVIEW 2019/20
Revised Budget Revised Budget Revised Budget (Underspend) Function Approved Budget Expenditure Income Net Outturn / Overspend £ £ £ Management and Members 1,664,177 1,822,494 (40,000) 1,782,494 1,807,494 25,000 Education Communities and Economy Children's Services 15,939,424 16,186,361 (82,999) 16,103,362 15,753,362 (350,000) Communties and Economy 3,021,699 5,783,009 (2,627,368) 3,155,641 2,908,641 (247,000) Education 94,319,873 111,273,742 (12,726,430) 98,547,312 98,412,312 (135,000) Health and Social Care Midlothian Integration Joint Board - Adult Social Care - Delegated 42,652,072 59,312,853 (16,661,154) 42,651,699 42,651,699 0 Midlothian Integration Joint Board - Adult Social Care - Non-delegated 686,227 701,585 0 701,585 617,585 (84,000) Customer and Housing Services 10,236,304 36,405,103 (25,597,529) 10,807,574 11,331,574 524,000 Resources Commercial Operations 12,905,451 16,732,614 (3,712,608) 13,020,006 13,563,006 543,000 Finance and Integrated Service Support 10,221,586 11,076,740 (397,915) 10,678,825 10,710,825 32,000 Properties and Facilities Management 14,021,429 21,887,570 (7,912,424) 13,975,146 14,530,146 555,000
Lothian Valuation Joint Board 534,441 534,441 0 534,441 534,441 0 Central Costs 310,315 645,576 0 645,576 878,576 233,000 Non Distributable Costs 1,338,436 1,338,436 0 1,338,436 1,338,436 0 GENERAL FUND SERVICES NET EXPENDITURE 207,851,434 283,700,524 (69,758,426) 213,942,098 215,038,098 1,096,000 Loan Charges 6,123,494 5,680,494 0 5,680,494 5,413,494 (267,000) NDR Discretionary Relief 70,300 70,300 0 70,300 70,300 0 Investment Income (406,420) 0 (406,420) (406,420) (406,420) 0 Savings Targets (223,000) (223,000) 0 (223,000) 0 223,000 Allocations to HRA, Capital Account etc. (5,015,808) (5,015,808) 0 (5,015,808) (5,015,808) 0 208,400,000 284,212,510 (70,164,846) 214,047,664 215,099,664 1,052,000 less Funding: Scottish Government Grant (157,413,000) 0 (158,875,982) 158,875,982 159,482,982 (607,000) Council Tax (50,987,000) 0 (50,987,000) 50,987,000 50,943,000 44,000 Utilisation of Reserves 0 284,212,510 (280,027,829) 4,184,681 4,673,681 489,000
Page 89 of 164
Page 90 of 164 MIDLOTHIAN COUNCIL
GENERAL FUND OVERVIEW 2019/20 Appendix 1a
Full Year Year to Date Year to Date Function Revised Budget Revised Budget Actuals
Management and Members 1,782,494 317,230 299,524 Education Communities and Economy Children's Services 16,103,362 3,490,867 2,618,227 Communties and Economy 3,155,641 688,308 616,169 Education 98,547,312 22,003,921 18,464,616 Health and Social Care Midlothian Integration Joint Board - Adult Social Care - Delegated 42,651,699 8,761,410 3,586,117 Midlothian Integration Joint Board - Adult Social Care - Non-delegated 701,585 160,426 20,669 Customer and Housing Services 10,807,574 2,305,411 5,958,075 Resources Commercial Operations 13,020,006 2,444,985 1,008,174 Finance and Integrated Service Support 10,678,825 2,119,008 2,625,675 Properties and Facilities Management 13,975,146 3,039,239 2,695,187
Lothian Valuation Joint Board 534,441 123,333 137,127 Central Costs 645,576 148,979 148,979 Non Distributable Costs 1,338,436 223,072 146,462 GENERAL FUND SERVICES NET EXPENDITURE 213,942,098 45,826,189 38,325,001
Page 91 of 164
Page 92 of 164 Appendix 2 Financial Monitoring 2019/20 – General Fund Revenue – Material Variances
Management and Members
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Employee Costs One-off costs. 29 Shared posts with East A reduced requirement from East Lothian Council results in a 12 Revised arrangements for shared services are part of the Lothian Council lower than budgeted recharge. Medium Term Financial Strategy reported to Council in June 2019. Gross Overspend 41 Offset by: Vacancies and (16) Vacancies and part vacancies held to partially offset pressures. performance factor Net Overspend 25
Education, Communities and Economy
Children’s Services
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Non-residential Demand led Taxi costs for children without disabilities 36 A review of all taxi spend across Childrens Services, Adult Service services commissioned and Education will commence during Q2. This will give a clearer and provided for picture of what is driving spend and what options exist to drive Children with and efficiencies. without disabilities Gross Overspend 36 Offset by: Family Placements Placements previously with external agencies have now moved (183) Whilst the number of children that are being accommodated has to Midlothian Carers resulting in a significant saving. increased during Q1 the vast majority of cases have been picked up by Kinship Carers. At this stage it is too early to say if this is a
Page 93 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Windfall income has been received for the provision of adoption (38) growing trend but one that will continue to be monitored. placements to another Local Authority.. Vacancies and There is a forecast underspend mainly resulting from vacant (119) In anticipation of further savings targets in 2020/21 strict performance factor posts in the Early Intervention and Prevention service and also vacancy control is applied across the service. vacant day-time posts in the residential houses. Other non-material Miscellaneous over and underspends covering the remaining (46) No impact on frontline services. variances areas of the service budget. Net Underspend (350)
Communities and Economy
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Pest Control and Legislative changes in Trading Standards over recent years have 18 Trading Standards made income targets harder to achieve and there is a shortfall in income targets achieving Pest Control income targets. Gross Overspend 18 Offset by: Planning and Building Income from Building Warrant and Planning applications is (154) Income levels are expected to be more in line with budget over Warrant Income higher than expected at this stage in 2019/20. the remainder of 2019/20. Vacancies and The number of vacancies across the service exceeds the (62) There are currently vacancies in Economic Development, Performance Factor performance factor. Planning and Trading Standards. Environmental Health Windfall income from a private water supply grant and licence (9) Income fees for Residential Caravan parks. Other non-material Miscellaneous over and underspends covering the remaining (40) variances areas of the service budget. Net Underspend (247)
Page 94 of 164 Education
Description of Reason for Variance Quarter 1 Variance £000 Additional information / Action taken Charging for Music A projected under recovery on SQA charging to schools for Music 185 More detailed projections will be available once the 2019/20 Tuition tuition. school year starts and an update will be provided at quarter 2, however initial assumptions are for a further reduction in uptake.
The new charging policy expected to generate additional income 62 A report will be presented to Cabinet in Autumn 2019 to discuss but is projected to fall short of target. this area in detail. Gross Overspend 247 Offset by: Efficiency Target An efficiency target of £1.279 million was budgeted for 915 Options are being progressed to deliver the remainder of the Education. To date £0.364 million has been secured. target including using underspends in schools as detailed below.
Schools Schools are projected to underspend by £0.967 million. In (967) Within the £0.967 million is: accordance with current DSM rules allowing a carry forward of 1) A 1% carry forward of £0.155 million; 1% totalling £0.155 million would be allowed. 2) An underspend of £0.088 million in schools in excess of the allowable 1% carry forward; and 3) Budget of £0.724 million not allocated to schools under the DSM scheme and available for consideration for contributing towards the Education Efficiency target.
Projections of spend against budget for schools are in advance of the commencement of the 2019/20 school session thus have potential for significant change in some areas.
An update on progress in delivering the efficiency target will be provided at Q2. Vacancies and There are a number of vacancies across the Education service. (273) Strict vacancy control is applied with management action in Performance Factor place to minimise any impact on frontline service provision. Other non-material Miscellaneous over and underspends covering the remaining (57) variances areas of the service budget. Net Underspend (135)
Page 95 of 164 Health and Social Care
In accordance with the Integration Scheme the Midlothian Integration Joint Board is required to put in place a recovery plan to address the projected overspend. At this time the expectation is that action by the MIJB will address the projected overspend so no provision has been made for an additional budget allocation for services delegated to MIJB in respect of Adult Social Care. The variances are noted below for information but are not taken into account in calculating the Council’s reserves position.
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Community Care There are significant demands for services across all 1,022 The budget amounts to around £33 million, is heavily influenced Resource Panel demographic profiles. Work on reviews of packages of care by demand and subject to demographic pressures. Individual continues. The number of young people coming through packages of care can be complex and can exceed £0.100 million transitions with complex needs means that managing spend per annum. As a consequence projections can be volatile. within budget remains challenging. Uplifts for providers in respect of the increase in the Living Wage are in the process of being applied. Whilst account of this is taken in the projection a more accurate position will be available at quarter 2 when it is expected that all uplifts will be reflected on the Mosaic system.
Processes are being implemented to ensure that reduced and ceased packages of care are properly reflected on Mosaic. This will lead to more accurate information on which to determine projected spend.
Within the overall position there is a projected underspend within Older People’s services which offsets the overspend within Home Care (as shown below).
An element of new monies provided in 2019/20 is being used to support respite availability.
New fieldwork service arrangements will ensure ongoing reviews and focus on the redesign of services.
Page 96 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Savings Target Robust plans to deliver the £0.940 million of the approved target 940 The delivery of the savings target forms part of the wider IJB are still being developed. commitment to deliver a balanced budget and is overseen by the Realistic Care Realistic Medicine Transformation Board. The key areas for improvement include transport, disabilities, mental health and care at home.
An update on the progress of the various workstreams will be provided at Quarter 2. Home Care / Additional employee costs due to the volume of care packages 365 This service supports the aspiration to shift the balance of care Midlothian Enhanced being provided. There remains a shortage of external supplier and support people to live in their own homes for as long as Rapid Response and capacity which results in continued pressure to address package possible. The pressures on the budget are a reflection of the Intervention Team of care requirements from internal resources. capacity issues within the external market, with additional (MERRIT) demand currently met by the internal Home Care service. There is also high absence over the whole service which is being managed in line with the maximising attendance policy. A focus on absence management has successfully reduced sickness absence levels, having a positive impact on the service. Plans in place include development of a locum bureau, running additional carer academies and fleet car use to reduce some travel costs.
The projected overspend is offset by an underspend in the Older Peoples resource panel budget. This position supports a shift in the balance of care, keeping older people safe in their homes and community for as long as possible.
A service review of MERRIT carers has commenced which, through a new model of care, will support a reduction in “on- call” costs. Care Homes for Older Projected overspend on staffing at Newbyres Care Home due to 145 A focus on absence management, and development of a Locum People the requirement to cover rotas. Bureau, should reduce this projected overspend as the financial year progresses.
This is offset by a strong income position which is included within service user income (as shown below).
Page 97 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Cowan Court Extra Projected overspend on care staff costs (£95k) and an agreed 52 A staffing review is underway. Care Housing investment of £15k in the catering service, offset by other underspends within the service of £58k. Gross Overspend 2,524 Offset by: Additional Social Care The impact of new commitments from the additional social care (850) Funding funding is still being quantified and will be aligned to service pressures during quarter 2. Service User Income Contributions from service users towards their care packages are (166) No impact on frontline service. higher than provided for in the budget. Cherry Road/CAT Savings from vacancies within the CAT Team and Shared Lives (152) Team/Shared Lives and an underspend on supplies and services. Fieldwork Staffing Savings from vacancies within the Fieldwork service following the (141) Recruitment to posts is ongoing. implementation of the Fieldwork service review. Public Protection Scottish Government Funding provided specifically for Adult (120) This underspend offsets care and support costs related to Support and Protection requirements. Some spend relevant to protection issues. this funding is in the form of care packages and is met from the Resource Panel budget. Joint Equipment Store Projected spend for 2019/20 for both areas of spend is less than (91) These are demand led budgets thus spend can be volatile. / Aids and Adaptations budgeted. Criminal Justice An element of Scottish Government Funding is used to fund the (67) No impact on frontline service. management and administration of this service. Planning Officers There is currently a vacant Older People’s Planning Officer post (51) Other non-material Miscellaneous over and underspends covering the remaining (68) variances areas of the Adult and Social Care budget. Net Overspend 818 MIJB Recovery Plan (818) Adjusted Net Position 0
Page 98 of 164 Adult Social Care – Not Delegated to IJB
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Community Safety Following the service review there are a number of roles not (84) The Community Safety retained team element has now filled. transitioned into the redesigned Community Safety and Justice Team.
Net Underspend (84)
Customer and Housing Services
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Homelessness – Proposals are proceeding to convert a property in Jarnac Court 240 Spend on Bed and Breakfast will be reduced through this Savings Target into temporary HMO accommodation and other initiatives are approach. In addition there is provision within the HRA Capital Unachieved being investigated to reduce the requirement for Bed and Plan for new build temporary accommodation. Breakfast accommodation. These will not be in place this financial year resulting in a projected overspend against budget. The Tenancy Support contract for prevention and support services is being reviewed for cost effective options. Revenues Service – The outstanding delivery target is £306k. Slippage of 172 A further review of the service has been proposed to see where Planned Savings achievement in 2019/20 can be partially offset by some one-off additional savings can be made. DWP monies and vacancies within the service. Shared service options are being considered. Service Management – A general efficiency target of £138k and the service management 157 A review of the service needs to be carried out to highlight Planned Savings and target of £71k have yet to be delivered. In 2019/20 this is where the savings can be made. Agreed efficiency partially offset by savings associated with the vacant Head of target Service post. Homelessness Demand for placements exceeds budget. 112 The budget provided for an average 36 B and B places per week. accommodation Average occupancy is currently 44 places. Out of area placements are no longer taking place. Housing Benefit In 2018/19 a higher number and value of outstanding invoices 75 The level of Housing Benefit overpayments reduced in 2018/19. Overpayments relating to Housing Benefit overpayments was experienced Provision giving rise to an increase bad debt provision. It is anticipated this will again be encountered in 2019/20 but to a lesser extent.
Page 99 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Housing – Savings Savings proposals are being developed but will not be fully 57 It is planned to drive more Housing services on-line and through Target unachieved implemented in 2018/19. a range of digital services and platforms. Further transformation is required to develop and promote digital services to adopt a mobile first approach for online customers. Homelessness Storage Storage facilities provided for homeless households’ furniture 33 This cost was previously recharged to homeless clients but the and goods. recovery was negligible from vulnerable households and is now mainstreamed into the Homeless budget. The increase in provision of temporary housing stock has also contributed to the increase in demand against budget . Work has been undertaken to award a new contract for storage and removal of goods in relation to temporary accommodation and this is expected to be in line with approved budget. Gross Overspend 846 Offset by: Homelessness Service Costs for service charge income for Pentland House Is now (202) This will be adjusted in the 2020/21 budget. Charge Income allocated to the Homeless service rather than the Housing Revenue Account. Customer Services There are still a number of posts to be filled following the recent (67) Management action is in place to minimise any impact on Vacancies review of the service. Proposals to deliver approved savings frontline service provision. targets are being considered in the context of ongoing vacancies. Other non-material Miscellaneous over and underspends covering the remaining (53) No impact on frontline service. variances areas of the Customer and Housing Services budget. Net Overspend 524
Page 100 of 164 Resources
Commercial Operations
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Land Services Approved service reductions for reducing grass cutting standards 100 and for reducing shrub bed maintenance have not yet been implemented.
Achievement of The income target from activities and events at 70 Additional activities and events are being held to increase Vogrie Estate has slipped. income from Vogrie Estate. It is anticipated that progress in achieving the income target will be made over the remainder of 2019/20. Review of travel A budget reduction of £150,000 in 2017/18 was approved but 115 arrangements limited savings have been secured. To date £35k has been associated with the achieved. grey fleet. Charges for Bins and Income targets from charging new housing developers of £110k 102 There will be a time lag between receipt of income and provision Boxes have been agreed. Income of £77k has been received from of service which will make achievement of targets in early years Developers to date but only £8k of this relates to bins and boxes more challenging. issues, or expected to be issued, in year. Efficiency Targets Slippage in fully achieving the approved efficiency target of 67 £165k. Charge for Commercial An income generation target of £35k was approved for 2018/19 48 Waste at Stobhill with a further £15k in 2019/20. Take-up of the new service has Community Recycling been minimal. Centre Commercial A savings target of £630k has been set. £275k has been delivered 36 Operations Service to date with reviews currently progressing. The shortfall in Review 2019/20 is partially offset by vacancies held whilst reviews evolve. Bulky Uplift Income Shortfall against approved income target. 19 The income budget is £96k of which £14k relates to an additional target in 2018/19.
Page 101 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Advertising on Council Achievement of the £15k target has slipped. 15 There are some interested parties following the Public Interest Vehicles Notice. Work continues to try and secure the outstanding target. Other non-material Miscellaneous over and underspends covering the remaining 72 Financial Discipline options will be considered to mitigate this. variances areas of the Service. Gross Overspend 644 Offset by: Parking Fines / Parking It is anticipated that income from parking fines and paid parking (101) It remains to be seen if this will continue or if there will be Charges will generate more than provided for in the budget. behavioural changes which could reduce penalty income.. Net Overspend 543
Finance and Integrated Service Support
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Integrated Service The ISS savings to be achieved in 2019/20 total £1.110 million, 145 The delivery plan is being reviewed to identify areas to mitigate Support Review £0.410 million from savings targets brought forward and a the projected shortfall at quarter 1. This includes the deletion of further £0.700 million from an increase in the savings targets some vacant posts from the establishment, securing service agreed as part of the 2019/20 budget. income, delivery of further business process efficiencies and a zero base review of non-staffing budgets to secure financial At this point savings of £0.393 million have been secured with discipline. Strict vacancy control remains in place and this current plans projected to achieve a further £0.572 million currently mitigates the projected shortfall as shown below. leaving a shortfall of £0.145 million.
Other non-material Miscellaneous over and underspends covering the remaining 9 No impact on frontline service. variances areas of the Finance and Integrated Service Support budget. Gross Overspend 154 Offset by: Employee Performance Strict control of vacancies continues and exceeds the (122) Strict vacancy control is applied to complement delivery of the Factor performance factor target by £0.122m ISS review. Net Overspend 32
Page 102 of 164 Properties and Facilities Management
Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken Sport and Leisure Proposals to deliver the approved savings target are still being 200 Service costs and structures have been reviewed in detail during Bottom up Review considered. the service review with viable proposals to deliver approved savings to be submitted to the cross-party working group. EWiM planned building Evolving plans for buildings that were earmarked for sale or 132 Unbudgeted costs, mainly for Rates, relate to Dundas Buildings, closures demolition as part of approved EWiM projects have resulted in Eskdaill Court, Jarnac Court and Penicuik Town Hall. anticipated revenue savings not materialising. £’000
Dundas Buildings 32
Offices - Eskdaill Court 36
Offices - Jarnac Court 37
Penicuik District Buildings 27
Total £132
The Council either continue to operate from these buildings or have plans to develop them. Accelerating plans to vacate Buccleuch House may mitigate these costs in the latter part of the year. Catering – functions, Based on costs and income to date it is projected that this area 82 Income generation potential was affected in Q1 by service cover Vending and office of the Catering Service may underachieve their net income required which prevented expansion of the external functions, service targets by £82k. events and vending offering. Non School Catering Based on costs and income to date it is projected that 71 More aggressive marketing took place prior to the summer community cafes may underachieve their net income targets by period and this may help generate an improved position. An £71k. update will be provided at Quarter 2. Holiday Clubs Income targets of £50k have not been achieved. Holiday camp 50 The offering is to be redeveloped to meet parent requirements
Page 103 of 164 Description of Quarter 1 Variance Reason for Variance £000 Additional information / Action taken uptake for the summer was minimal. for the October break. Property and Facilities A savings target of £240k.has been set. £84k has been delivered 39 Management Service to date or is in place for 2019/20 with reviews currently Review progressing. The shortfall in 2019/20 is partially offset by vacancies held whilst reviews evolve. Energy Costs Council approved a saving in energy costs in 2019/20 from 18 At this stage it is difficult to accurately assess what savings there closure of seven PPP primary schools during school holidays. This are in energy costs. An update will be provided at Quarter 2. has been partially implemented. Other non-material Miscellaneous over and underspends covering the remaining 40 Financial Discipline options will be considered to mitigate this. variances areas of the Service. Gross Overspend 632 Offset by: Hopefield Resource Slippage in the capital project will result in planned running costs (77) Centre in 2019/20 not being incurred. This is partially offset by savings for Bonnyrigg Garage that will not now be achieved. Net Overspend 555
Other
Description of Quarter 1 Variance Reason for Variance £000 Additional Information / Action taken Central Costs – During Q1 there was a higher than usual volume of new and re- 364 Claims are discussed at the Risk and Resilience Group to identify Insurance opened claims against the council. Some of these were high in trends and possible mitigating measures. value. The areas of increase are personal injury claims, property damage and vehicle damage associated with road conditions. As insurers and loss adjusters review the detail of each claim it is possible that the provisions made will either reduce or disappear. This may ease pressure on the budget.
Central Costs – Developer contribution funding to be applied annually to reduce (256) Clarity on the applicability of this funding occurred after the Developer the Unitary Charge payment for Newbattle. 2019/20 budget was set. This is now included in the Medium Contribution Funding Term Financial Strategy.
Staff Travel Savings relate to the cessation of the car leasing scheme and also 100 The slippage reflects the timing and profile of leasing contracts
Page 104 of 164 changes to terms and conditions for those staff designated that were in place in May 2018 and also the lead time for an retention users. The car lease scheme was closed to new offer to be made to affected employees to secure changes in entrants in May 2018 and an implementation plan is now in employee terms and conditions. The latter is now on target for place to deliver approved savings but has slipped from the conclusion on 1st October 2019. original target.
Central Costs – One- Services commissioned in accordance with Standing Order 19.2 25 off to support investigations and associated costs. Loan Charges Re-phasing of the General Services Capital Plan results in lower (267) Borrowing costs are delayed but not avoided. financing costs of borrowing than provided for in the budget. Scottish Government Distribution of funding to cover teacher’s pay inflation and also (607) The Teachers pay award was agreed after the 19/20 budget was Grant increased employers pension contributions exceeds the planning set and there is new information from the government on assumption when the budget was set. funding the council will receive for Teachers pension changes. Savings Targets An outstanding target from previous years of £0.177 million for 177 the Customer Services Transformation strand was carried forward into 2019/20. At this stage it is anticipated none of this will be achieved in 2019/20.
An income generation of £0.046 million was agreed in the 46 2018/19 budget. Delivery plans have still to be established.
Page 105 of 164
Page 106 of 164 Midlothian Council Tuesday 20 August 2019 Item No 8.4
Housing Revenue Account Revenue Budget and Capital Plan 2019/20
Report by Gary Fairley, Head of Finance and Integrated Service Support
1 Purpose of Report
The purpose of this report is to provide Council with a summary of expenditure and income to 5th July 2019 for the Capital Plan and a projected outturn for both the Housing Revenue Account (HRA) and Capital Plan for 2019/20.
2 Background
2.1 Capital Plan 2019/20
The Capital Plan Budget has been revised to reflect the current profile of spend as shown in appendix 1. There are no outstanding Mortgage to Rent Cases at this time resulting in an underspend of £0.224 million, offset by Government subsidy of £0.114 million.
2.2 Revenue Account 2019/20
For 2019/20 there is currently a projected underspend of £1.548 million against budget, as shown in appendix 2. This is due to:-
• Higher demand for reactive repairs relating to prior years SHQS works of £0.140 million; • Delays to temporary accommodation refurbishment at Jarnac Court resulting in a shortfall of rental and service charge income of £0.074 million and £0.041 million respectively;
Offset by:-
• Re-phasing of New Social Housing Programme and temporary accommodation provision at Jarnac Court which will result in lower debt charges of £1.208 million; • The level of Bad Debt provision required is projected to be £0.638 million lower than anticipated in line with last financial year. This is due to temporary accommodation, previously on Universal Credit now being restated to Housing Benefit, thus reducing the level of outstanding debt.
The HRA reserve balance is projected to be £39.864 million at 31st March 2020. The longer term financial projections demonstrate that the majority of this will be required to finance existing investment commitments to 2033/34. However a more comprehensive review of the model is underway and will be reported to Council later in the year. Page 107 of 164 2
3 Report Implications
3.1 Resource There are no direct resource implications arising from this report.
3.2 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.
Whilst the HRA reserve balance is projected to be £39.864 million at 31 March 2020, the longer term financial projections demonstrate that the majority of this will be required to finance existing investment commitments.
3.3 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
3.4 Impact on Performance and Outcomes This report links to the Corporate Priority 1a. “Provide quality, affordable housing including increasing homelessness accommodation”.
3.5 Adopting a Preventative Approach There are no issues arising directly from this report.
3.6 Involving Communities and Other Stakeholders No external consultation has taken place on this report.
3.7 Ensuring Equalities There are no equality issues arising directly from this report.
3.8 Supporting Sustainable Development There are no sustainability issues arising from this report.
3.9 IT Issues There are no IT issues arising directly from this report.
Page 108 of 164 3 4 Summary The summarised projected financial performance for 2019/20 is: • Capital Expenditure of £36.757 million; • A net underspend of £1.548 million on the Revenue Account; • The HRA reserve at 31st March 2020 is projected of £39.864 million.
5 Recommendations Council is recommended to note the contents of this report.
Date 30th July 2019
Report Contact: Name Lisa Young Tel No 0131-271-3111 [email protected]
Background Papers: HRA Capital Plan and Revenue Budget
Page 109 of 164
Page 110 of 164 MIDLOTHIAN COUNCIL Appendix 1
HOUSING REVENUE ACCOUNT CAPITAL PLAN 2019/20
Revised Actuals to Projected Variation Budget Date Outturn (Under)/Over
£'000 £'000 £'000 £'000
FUNDING Net Receipts from Sales 0 0 0 0 Grants -Incentivising New Build 4,500 50 4,500 0 -Mortgage to Rent 114 0 0 (114) -Buy Backs Funding 800 0 800 0 Council Tax on Second Homes 79 0 79 0 Developer Contributions 726 0 726 0 Borrowing Required 30,762 5,112 30,652 (110) TOTAL AVAILABLE FUNDING 36,981 5,162 36,757 (224)
L e a d O f f i c e APPROVED EXPENDITURE r £'000 £'000 £'000 £'000 New Build Houses Phase 1 Neil Davidson102 0 102 0 New Build Houses Phase 2 2,924 447 2,924 0 New Build Houses Phase 3 20,730 2,953 20,730 0 Buy Backs 2,900 512 2,900 0 Aids & Adaptations Murray 420Sinclair 71 420 0 Homelessness - Mortgage to Rent Lisa Young224 0 0 (224) Homelessness - Temporary Accommodation Provision 700 0 700 0 Bonnyrigg Distrct Heating Scheme Gas Meters 1,300 0 1,300 0 Scottish Housing Quality Standard -Upgrade Central Heating Systems Murray2,103 Sinclair 83 2,103 0 -SHQS Repairs Steven5,578 Crawford 1,096 5,578 0 Total Expenditure 36,981 5,162 36,757 (224)
Page 111 of 164 MIDLOTHIAN COUNCIL
HOUSING REVENUE ACCOUNT 2019/20 Appendix 2
Revised Projected Variation Budget Outturn (Under)/Over
Average No of Houses 6,962 6,955 (7)
£000's £000's £000's Repairs and Maintenance
General Repairs 5,993 6,133 140 Decant/Compensation 82 82 0 Grounds Maintenance 654 661 7 6,729 6,876 147
Administration and Management 4,998 4,998 0 Loan Charges 12,038 10,830 (1,208) Other Expenses 3,222 2,608 (614) TOTAL EXPENDITURE 26,987 25,312 (1,675)
Rents Houses 29,610 29,536 74 Garages 613 601 12 Others 1,218 1,177 41 TOTAL RENTS 31,441 31,314 127
NET EXPENDITURE/(INCOME) (4,454) (6,002) (1,548)
BALANCE BROUGHT FORWARD (33,862) (33,862) 0
BALANCE CARRIED FORWARD (38,316) (39,864) (1,548)
Page 112 of 164 Midlothian Council Tuesday 20 August 2019 Item No 8.5
General Services Capital Plan 2019/20 Report by Gary Fairley, Head of Finance and Integrated Service Support
1 Purpose of Report
The purpose of this report is to provide Council with:-
• An update of the General Services Capital Plan to incorporate new projects included in the Capital Plan (Section 2); • Information on current phasing of project expenditure & funding in 2019/20 (Section 3.1); and • Information on the projected performance against budget for 2019/20 (Section 3.2/3.3).
2 New Projects
Members will note that the General Services Capital Plan includes an expenditure budget of £0.910 million for Town Centre Regenerations which is fully funded by £0.910 million of Scottish Government Capital Grant Funding.
3 2019/20 Budget
The General Services Capital Plan presented to Council on 25 June 2019 allowed, after accounting for year-end adjustments and the projects included in Section 2 above, a 2019/20 expenditure budget to £52.624 million, a 2019/20 funding budget to £26.424 million and a 2019/20 borrowing requirement of £26.200 million.
3.1 Adjustments to 2019/20 Budget
Expenditure
Income and expenditure profiles have subsequently been rephased to reflect the most recent information available for the delivery of projects. This revises the 2019/20 expenditure budget to £44.934 million.
Material rephasing of project budgets are shown in Table 1 overleaf:-
Page 113 of 164 2 Table 1: Rephasing of project expenditure budgets
Project Description of amendment to budget Previous Revised Budget Budget Budget Movement £000’s £000’s £000’s Highbank Construction works cannot commence until 3,572 500 -3,072 Intermediate new Hopefield Primary School is open Care Home (projected opening January 2020) and pupils currently at St. Mary’s are off-site. In addition, the future use of the St. Mary’s Primary School site is under consideration as part of a master-planning exercise EWiM Phase III: Due to detailed engagement with planning as 3,728 1,709 -2,019 Depot a result of the consultation process, additional acoustic information has been requested from external consultants to allow environmental health to make an informed decision, prior to going to planning committee, with subsequent impact on programme Lasswade High Approved in principle in the Capital Plan. 378 189 -189 School – Core Delay to commencement of programme Facilities for 1,600 pupils Participatory Based on spend to date 270 100 -170 Budgets Recovery hub Rephasing planning assumption was that 250 483 +233 remaining spend would be split equally over 2019/20 and 2020/21; however, project remains on programme and all spend other than retention is expected to be incurred in 2019/20. Hopefield Cashflow forecast provided by contractor 9,018 9,309 +291 Primary School replacing original pre-tender forecast Other Minor variances 564 778 +214 Total 17,780 13,068 -4,712
In addition to the above, the current fleet asset management replacement programme has been reviewed and there is no requirement to replace all the vehicles scheduled for replacement in the current financial year. Equally, the Assistive Technology Asset Management Budget has been reviewed and the budget realigned to reflect the timing of the switch from analogue to digital technology.
Funding
In line with this, the budgeted level of funding available to finance the plan has also been adjusted from £26.424 million to £27.205 million (see Appendix 2).
Borrowing
Based on the expenditure and funding levels outlined above, the budgeted borrowing required has decreased from £26.200 million to £17.729 million. Page 114 of 164 3 3.2 Quarter 1 Projected Performance against Budget
Expenditure
Expenditure to 23 June 2019 is £1.693 million with a projected expenditure outturn for 2019/20 of £44.383 million, £0.551 million less than the budget. At this stage it is anticipated that budgets for the projects detailed in Appendix 1 will be fully spent in the current year other than:-
• Woodburn Primary 1 Class Extension: Original budget of £0.634 million based on SFT Metric costing for an extension at the school. Following detailed review, a revised budget of £0.100 million has been set based on internal configuration of non-teaching spaces to allow the formation of an additional classroom. Following detailed review it is proposed that this project, which is currently in the General Services Capital Plan as “approved in principle” is now fully adopted in the General Services Capital Plan; • Travelling People’s Site Upgrade: £0.017 million capital expenditure budget no longer required as the site is not the Council’s asset and the spend was of a revenue rather than capital nature.
Funding
Funding received to 23 June 2019 is £4.825 million with a projected total funding available to finance the capital plan in 2019/20 of £27.205 million, in line with budget.
Borrowing
The budgeted level of borrowing for 2019/20 was £17.729 million. Based on the revised expenditure and funding levels as outlined above, the projected estimate of the level of borrowing required to fund the investment identified in Appendix 1 is now £17.178 million. The impact of this on the Council’s borrowing costs is reflected in the Financial Monitoring 2019/20 – General Fund Revenue report elsewhere on today’s agenda.
3.3 Overall Position 2019/20
Based on the above, the projected performance against budget for 2019/20 is shown in the table below:-
Amended 2019/20 2019/20 Actual 2019/20 2019/20 2019/20 Item Original Budget To Projected Variance Carry Budget At Q1 23/06/19 Outturn Forward £000’s £000’s £000’s £000’s £000’s £000’s Expenditure 51,762 44,934 1,693 44,383 -551 8,244 Funding 25,514 27,205 4,921 27,205 0 0 Borrowing Required 26,248 17,729 -3,228 17,178 -551
Page 115 of 164 4 4. Capital Fund
The balance on the Capital Fund at 1 April 2019 was £20.168 million. Capital Receipts of £2.763 million are forecast to be received in 2019/20, with £2.437 million of the Capital Fund balance earmarked to fund the new Hopefield Primary School. In addition to the use of the remainder of the Capital Fund balance to support investment identified in the Capital Plan., consideration will also be given to the Capital Receipts Flexibility Scheme to use Capital Receipts to fund severance costs associated with service redesign and/or support
5. Report Implications 5.1 Resource
The borrowing required to finance the planned investment in 2019/20 is projected to be £17.178 million. The loan charges associated with this borrowing are reported to Council in the ‘Financial Monitoring 2019/20 – General Fund Revenue’ report presented elsewhere on today’s agenda.
5.2 Risk
There are several inherent risks in the Capital Plan:-
Project Slippage The initial project programme in which the phasing of expenditure in reflected in the Capital Plan has not adequately taken account of typical factors which can impact on project delivery including, but not limited to, consultation issues, planning issues, site related issues such as ground investigations and grouting, or project interdependencies such as the need for the St. Mary’s Primary School site to be vacant prior to construction works commencing on the adjacent Dundas Buildings site for the Highbank Intermediate Care project. The Capital Plan and Asset Management Board now reviews both the initial and ongoing phasing of projects to ensure that expenditure budgets are phased on a robust and reasonable basis, taking into account all of the above issues. The Board also now monitors delivery of projects against the project milestones to ensure projects are delivered on time and at pace.
Ring-fenced funding time constraints Grant funding for various projects is often time limited, requiring projects to be delivered or the expenditure for the projects legally committed prior to a specific date. For example, the requirement for the Early Years Childcare projects to be delivered/legally committed (contracts signed) by 31 March 2022 and for the Town Centre Regeneration projects to be delivered/legally committed (contracts signed) by 31 March 2020. In addition, Developer Contributions that have been paid and which the Council are holding for various infrastructure projects have expiry dates where, should the contribution not be applied to fund capital expenditure for the infrastructure to which it relates, the contribution is required to be repaid back to the developer. The Capital Plan and Asset Management Board remit includes reviewing the grants and developer contributions that the Council holds to mitigate the risk of the Council being in the position of having to hand back funds. Page 116 of 164 5 Project overspends Projects cost more than estimated thus resulting in additional borrowing. The monitoring procedures ensure that significant variations are reported at an early stage so that remedial action can be taken to mitigate this risk.
Prioritisation The wrong projects are prioritised. The Capital Plan and Asset Management Board remit includes reviewing the prioritisation of projects.
Revenue Budget Impact The revenue budget cannot afford the level of borrowing currently reflected. The Capital Plan and Asset Management Board remit includes reviewing the impact on the revenue budget of the capital investment of new projects.
5.3 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
5.4 Impact on Performance and Outcome
There are no issues arising directly from this report.
5.5 Adopting a Preventative Approach
There are no issues arising directly from this report
5.6 Involving Communities and Other Stakeholders
No external consultation has taken place on this report.
5.7 Ensuring Equalities
There are no equalities issues arising directly from this report.
5.8 Supporting Sustainable Development
There are no sustainability issues arising directly from this report.
Page 117 of 164 6
5.9 IT Issues
There are no IT implications arising from this report.
6 Recommendations
Council is asked to:
1. Approve the adoption in full of the “Woodburn Primary School – 1 Class Extension” project in the General Services Capital Plan, as outlined in Section 3.2;
2. Note the General Services Capital Plan Quarter 1 monitoring position for 2019/20.
Date 1 August 2019
Report Contact: Name Gary Thomson Tel No 0131 271 3230 [email protected]
Background Papers: Appendix 1 – Detailed General Services Capital Plan Expenditure 2019/20 Appendix 2 – Movement in Funding
Page 118 of 164 Appendix 1
Detailed General Services Capital Plan Expenditure 2019/20
Rephased 2019/20 2019/20 2019/20 2019/20 2019/20 2019/20 GENERAL SERVICES CAPITAL PLAN Budget Budget Actual Forecast Variance Carry 2019/20 Initial Q1 to P3 Outturn Q1 Q1 Forward Q1 Q1 MONITORING £'000 £000's £000's £000's £000's £000's RESOURCES Customer Services Newbattle Centre of Excelllence 479 479 - 479 - - Business Applications 72 72 83 72 - - DS Corporate Solutions 185 185 2 185 - - Front Office - Hardware, Software & Services 331 331 9 331 - - Back Office - Hardware, Software & Services 313 313 20 313 - - Network, Software & Services 252 252 162 252 - - Schools - Hardware, Software & Services 538 538 - 538 - - Commercial Operations Street Lighting Upgrades 1,464 1,464 55 1,464 - - Street Lighting and Traffic Signal Upgrades - New ------Footway & Footpath Network Upgrades 456 456 - 456 - - Footway & Footpath Asset Management Plan - New ------Road Upgrades 1,554 1,554 - 1,554 - - Roads Asset Management Plan - New ------Roads Asset Management Plan - Temple Ground Stabilisation 62 62 - 62 - - B6372 Arniston Embankment Stabilisation ------Zero Waste Capital Contribution ------Cycling, Walking & Safer Streets Projects 172 172 - 172 - - Ironmills Park Steps 3 3 - 3 - - PropertyNew recycling & Facilities facility - Penicuik 0 0 - 0 - - Vehicle & Plant Replacement Programme 2,859 2,334 28 2,334 - 525 Fleet Asset Management Plan - Movement 2,722 - - - - 2,722 Fleet Asset Management Plan - New Vehicle Replacement ------Fleet Asset Management Plan - New Plant Replacement ------Outdoor Play Equipment - Rosewell 23 23 - 23 - - Outdoor Play Equipment - Gorebridge 20 20 - 20 - - Arniston Park Synthetic Pitch 1 1 - - (1) - Mauricewood Bing Cycling and Walking Path 4 8 1 8 - (4) Mauricewood Road Bus Shelter 7 13 - 13 - (7) Riverside Park Paths & Woodland 15 15 - 15 - - Birkenside Grass Pitch Drainage ------Open Spaces - Midlothian Wide Play Areas ------Property & Facilities Stobhill Depot Upgrade 0 0 - 0 - - New Depot: EWiM Phase III 3,728 1,709 - 1,709 - 2,019 Property Upgrades 1,620 1,620 54 1,620 - - Property Asset Management Plan - Movement ------Property Asset Management Plan - New General ------Property Asset Management Plan - New Carbon Reduction ------Property - Poltonhall Astro & Training Area Resurfacing 93 93 - 93 - - Property - Penicuik Astro Resurfacing 62 62 - 62 - - Property - King's Park Tennis Courts Resurfacing 16 16 - 16 - - Property - Penicuik Centre Flooring, Cardio & Equipment 31 31 - 31 - - Property - Lasswade Centre Flooring 6 6 - 6 - - Property - Gorebridge Leisure Centre ------Property - Loanhead Centre ------Property - Shawfair Leisure/Library Provision ------OtherOther Property Property Development Development Projects Projects ------ContingencyContingency for for emerging emerging projects projects ------Purchase of 49 Abbey Road, Dalkeith 6 6 - 6 - - Hillend Preparatory Works 24 49 4 49 - (24) Destination Hillend 1,994 1,994 - 1,994 - - 32-38 Buccleuch Street Ground Floor Redevelopment 175 175 12 175 - - Leisure Management System (Legend) 70 70 1 70 - - Cashless Catering 68 68 - 68 - - Non-Domestic Energy Efficiency Projects 172 172 (1,196) 172 - - TOTAL RESOURCES 19,599 14,368 (765) 14,366 (1) 5,231 Those projects shaded are included in the Capital Plan "in principle" and require a report to Capital Plan & Asset Management Board and/or Council in order to achieve full adoption in the General Services Capital Plan
Page 119 of 164 8 Rephased GENERAL SERVICES CAPITAL PLAN 2019/20 2019/20 2019/20 2019/20 2019/20 2019/20 2019/20 Budget Budget Actual Forecast Variance Carry Q1 MONITORING Initial Q1 to P3 Outturn Q1 Q1 Forward Q1 EDUCATION, COMMUNITY AND ECONOMY £'000 £000's £000's £000's £000's £000's Early Years Hawthorn Centre 515 515 - 515 - - Rosewell Primary School Alteration 74 74 - 74 - - Mount Esk Nursery School 307 307 - 307 - - Dalkeith primary school 170 170 - 170 - - Rosewell Primary School New Build 127 127 - 127 - - Easthouses primary school (Newbattle HS) ------Gorebridge standalone (Beacon?) 274 274 - 274 - - Vogrie Park 40 40 - 40 - - Penicuik Estate 40 40 - 40 - - Catering kitchens 53 53 - 53 - - Settings' kitchens 9 9 - 9 - - Capital grants to partner providers 100 100 - 100 - - Remaining Balance ------Primary New Gorebridge North Primary 177 177 - 177 - - Paradykes Primary Replacement 821 821 6 821 - - Roslin Primary Replacement 100 100 - 100 - - New Hopefield Primary School 9,018 9,309 1,233 9,309 - (291) New Danderhall Primary hub 5,186 5,186 59 5,186 - - Cuiken Primary School Extension 856 856 235 856 - - Sacred Heart Primary School Extension 1,842 1,842 1 1,842 - - Lawfield Primary Extension 302 302 11 302 - - Easthouses Primary School 500 500 2 500 - - Learning Estate Strategy - Primary Woodburn Primary extension (1 class plus ) 127 634 - 100 (534) (507) Lasswade High - core facilities for 1600 pupils 378 189 - 189 - 189 Lawfield Primary 2 class extension ------Burnbrae PS - convert nursery to GP space ------Kings Park PS extension to 3 stream incl EY 489 489 - 489 - - St Davids Primary - 4 class & EY extension ------Area 23 Primary School (Dalkeith/Easthouses) 327 327 - 327 - - Mayfield School Campus replace & extend ------Gorebridge EY expansion ------Mount Esk Nursery School Refurbishment (EY) ------Rosewell EY expansion ------Newtongrange refurb & expansion to 2 stream ------St Andrews Primary - extension ------Strathesk Primary one class extension 31 31 - 31 - - Secondary Newbattle High School 331 331 6 331 - - General Saltersgate Alterations Phase III - Playground Improvements 126 126 - 126 - - Saltersgate Phase IV - Internal Alterations 31 31 - 31 - - Modular Units - Session 2017/18 329 329 135 329 - - Modular Units - Session 2018/19 553 553 69 553 - - Children and Families Communities & Economy Rosewell Development Trust 764 764 121 764 - - Planning & Development Members Environmental Improvements 73 73 - 73 - - Contaminated Land 100 100 - 100 - - Public Sector Housing Grants 198 198 - 198 - - Borders Rail - Economic Development Projects 63 63 - 63 - - East High Street Public Realm & Burns Monument 1 1 - 1 - - Shawfair Town Centre Land Purchase 2,653 2,653 - 2,653 - - Gorebridge Connected 563 563 (44) 563 - - Penicuik THI 108 108 262 108 - - Mayfield Town Centre Regeneration 40 40 - 40 - - Participatory Budgets 270 100 - 100 - 170 A701 & A702 Works 310 310 - 310 - - Town Centre Regeneration Fund 910 910 - 910 - - TOTAL EDUCATION, COMMUNITY AND ECONOMY 29,285 29,725 2,098 29,191 (534) (440) Those projects shaded are included in the Capital Plan "in principle" and require a report to Capital Plan & Asset Management Board and/or Council in order to achieve full adoption in the General Services Capital Plan
Page 120 of 164 9 GENERAL SERVICES CAPITAL PLAN Rephased 2019/20 2019/20 2019/20 2019/20 2019/20 2019/20 2019/20 Q1 MONITORING Budget Budget Actual Forecast Variance Carry HEALTH AND SOCIAL CARE Initial Q1 to P3 Outturn Q1 Q1 Forward Q1 Adult & Social Care £'000 £000's £000's £000's £000's £000's Assistive Technology 436 150 19 150 - 286 Travelling Peoples Site Upgrade 9 17 - - (17) (9) Homecare 28 28 - 28 - - Recovery Hub 250 483 315 483 - (233) Highbank Intermediate Care Reprovisioning 3,572 500 1 500 - 3,072 Customer & Housing Services Online Payments & Services 114 57 - 57 - 57 TOTAL HEALTH AND SOCIAL CARE 4,408 1,235 335 1,218 (17) 3,174
COUNCIL TRANSFORMATION Purchase to Pay 2 2 - 2 - - EWiM - Buccleuch House Ground Floor 17 17 - 17 - - City Deal ------CityCity Deal Deal - Centres of Excellence ------Entrepreneurial Council ------TOTAL COUNCIL TRANSFORMATION 18 18 - 18 - -
GENERAL SERVICES CAPITAL PLAN TOTAL 53,310 45,345 1,667 44,793 (552) 7,965
COST OF SALES Newbattle High School - - 16 - - - Danderhall 300 - - - 300 Hillend Land Sale Cost of Sales - - - - - Cost of Sales General - - - - - TOTAL COST OF SALES 300 - 26 - - 300
GENERAL SERVICES CAPITAL PLAN TOTAL INC COST OF SALES 53,610 45,345 1,693 44,793 (552) 8,265
Provision for Return of Contingencies (410) (410) (410) - -
GSCP + CIS TOTAL INC. RETURN OF CONTINGENCIES 53,200 44,935 1,693 44,383 (552) 8,265 Those projects shaded are included in the Capital Plan "in principle" and require a report to Capital Plan & Asset Management Board and/or Council in order to achieve full adoption in the General Services Capital Plan
Page 121 of 164 10 Appendix 2: Movement in Funding
Rephased 2019/20 2019/20 Actual 2019/20 2019/20 2019/20 Item Original Budget To Projected Variance Carry Budget At Q1 23/06/19 Outturn Forward £000’s £000’s £000’s £000’s £000’s £000’s Government Grants 10,721 10,748 2,548 10,748 0 0 – General Capital Grant Government Grants 3,500 3,440 482 3,440 0 -60 – Early Years Government Grants 1,186 2,096 -90 2,096 0 0 – Others Receipts from Sales 8,083 2,763 1,309 3,398 0 -4,685 Receipts from Sales -8,083 -2,763 -1,309 -3,398 0 4,685 transferred to Capital Fund Transfer from 1,454 2,437 562 2,437 0 0 Capital Fund to Capital Plan Developer 6,629 5,550 1,281 5,550 0 1,079 Contributions Other Contributions 2,934 2,934 138 2,934 0 0 Total Funding 26,424 27,205 4,921 27,205 0 1,019
Page 122 of 164 Midlothian Council Tuesday 20 August 2019 Item No 8.6
Low Emission Zone (LEZ) Consultation
Report by Kevin Anderson, Acting Director Resources
1 Purpose of Report
City of Edinburgh Council is proposing a Low Emission Zone (LEZ), in fact two LEZ’s with the city of Edinburgh boundary. They are part of the Scottish national LEZs programme to reduce road transport’s contribution to poor air quality by introducing LEZs in Edinburgh, Glasgow, Aberdeen and Dundee.
The purpose of this report is to approve a response to the consultation. Unfortunately the consultation response period clashed with summer recess, so the attached response has been submitted to City of Edinburgh Council with a caveat that it is ‘subject to Council approval’.
The consultation response outlines the predicted issues that the LEZ may cause in Midlothian and for Midlothian residents and discusses mitigation that largely would require additional funding. The consultation response is Appendix B.
2 Background
2.1 There are two cordons proposed where restrictions are different and time periods for implementation differ. Vehicles that cross these boundaries and are not compliant will be fined. Enforcement will be by number plate recognition cameras.
2.2 In the city centre cordon, shown in Appendix A, buses and commercial vehicles have until the end of 2021 and cars until the end of 2023 before enforcement starts. Residents in this zone have an additional year.
2.3 In the city wide cordon, Shown in Appendix A, buses and commercial vehicles have until the end of 2023 before enforcement starts. Private vehicles are not restricted.
2.4 The minimum emissions standards are Euro 4 standard for petrol vehicles (generally vehicles registered from 2005) and Euro 6/VI standard for diesel vehicles (generally vehicles registered from 2014).
2.5 A consultation response, outlining the issues that this may cause in Midlothian and for Midlothian residents, has been drafted and forwarded to City of Edinburgh Council. The response has been sent with a caveat ‘subject to Council approval’. The response is attached as Appendix B.
Page 123 of 164 2 3 Report Implications
3.1 Resource
The consultation response is seeking funding for mitigating measures.
3.2 Risk
As outlined above there is a risk that the LEZ could adversely affect air quality in Midlothian. There is also a risk that if mitigation measures are not funded out with the city, Midlothian Council may require to spend council funds on mitigation. There may be financial impacts on Council fleet to bring it up to standard.
3.3 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
3.4 Key Priorities within the Single Midlothian Plan The main aim of an LEZ are to improve air quality. Climate change may also be positively affected, however as mentioned localised issues in Midlothian may develop that cause a negative impact on air quality, local economy, businesses and individuals.
3.5 Impact on Performance and Outcomes
The Council is committed to reducing carbon emissions and this proposal supports that aim. See above.
3.6 Adopting a Preventative Approach
The project aims to reduce the environmental impacts of travel and promote healthy living.
3.7 Involving Communities and Other Stakeholders
This is a consultation response to a City of Edinburgh proposal. City of Edinburgh have carried out a consultation that is available online.
3.8 Ensuring Equalities
Equalities issue are discussed within the consultation response. These are largely issues of poverty.
Page 124 of 164 3
3.9 Supporting Sustainable Development
The project will aim to lower carbon emissions.
3.10 IT Issues
There are no IT issues associated with this report.
4 Recommendations
Council is asked to;
1) Approve the proposed consultation response
Xx August 2019
Report Contact: Lindsay Haddow Tel No 0131 271 3501 [email protected]
Background Papers:
Page 125 of 164 4
Page 126 of 164 5
Appendix A
Page 127 of 164 6 Appendix B - LEZ Consultation response
Midlothian Council welcomes the proposal to introduce a Low Emission Zone (LEZ) to improve the air quality in Edinburgh. We recognise the time residents of Midlothian as well as Edinburgh residents spend in the city who will benefit from cleaner air. We are however concerned about the negative impacts in Midlothian and for Midlothian residents and would expect that mitigation measures be addressed and funded in adjacent local authority areas. It is noted that funding has only been made available to the local authorities introducing the LEZ to date. It is essential that this funding is shared to adjacent local authorities and/or additional funding made available directly to these authorities.
Midlothian Council would like to have access to the Impact Assessment carried out in order to quantify some of the impact in our area.
Negative Impact It is fully expected that Midlothian will suffer from additional parking around the extremities of the zone and possibly in our town centres. This parking could cause road safety issues, cause existing P&R sites to become full and exacerbate issues with parking in residential areas, including road safety, access for emergency vehicles and access for refuse vehicles. Suggested Mitigation Funding for additional P&R facilities and extensions to existing P&R sites Funding for town centre interchange and/or long stay car parks. Increasing the number of people with compliant vehicles via incentive schemes that may be similar to scrappage scheme. This would need to be funded. Improving public transport and active travel routes into the city centre.
Negative Impact Air quality issues due to vehicles previously being used in city of Edinburgh, now being used in Midlothian. Non-compliant vehicles will become very cheap and may be purchased by people who would otherwise not be buying a vehicle to be used in outer lying areas. This may increase car ownership but will almost certainly increase air pollution in Midlothian, even if used by existing car owners. Suggested Mitigation Some form of scrappage scheme for members of the public in Midlothian is the only way to avoid the polluting vehicles removed from Edinburgh being used in outlying areas including Midlothian. Ecostars freight partnership targeted as a national basis, rather than local authority basis to target largest / oldest / most polluting fleet, fleet travelling through AQMAs and LEZs.
Page 128 of 164 7 Negative Impact Reassignment of buses, taxis, trades and delivery vehicles to outlying areas. Larger companies may organise fleet so that the non-complaint fleet is operating out with the zone and compliant vehicles within. Not only will this increase air pollution in Midlothian but could impact on direct public transport routing. For example commuters may have to change service outside the zone. Suggested Mitigation There must be an incentive scheme to encourage businesses to upgrade all vehicles and not re-assign vehicle routes. A scrappage scheme / grants for business vehicles would also reduce the impact.
Negative Impact People who are in poverty/deprivation could miss out on employment opportunities, have to change jobs or be excluded from working, attending appointments or going into Edinburgh city centre for leisure due to not being able to afford to upgrade to a compliant vehicle. Suggested Mitigation Scrappage scheme or other financial incentive to upgrade or discount when buying compliant vehicle (not necessarily brand new). Improved public transport provision and subsidy Improved active travel routes, including cycleways to help meet Scottish Government CAFS targets of 10 % of all journeys by bike by 2020. Cross boundary routes being prioritised.
Negative Impact Midlothian economy and small businesses could be adversely affected due to taxi, delivery and trades vehicles losing jobs within the boundary, losing business altogether because it includes jobs within the boundary, or only trading out with the zones. Given short timescale for taxis / commercial vehicles to comply, lack of consultation with businesses, at least in neighbouring local authority areas. Suggested Mitigation Financial incentives to upgrade fleet and or discounts on compliant vehicles or scrappage schemes. Regional Public Transport Improvements are essential to redress the balance of the LEZ on outer lying areas and must be advanced and prioritised. Trams to the Edinburgh Royal infirmary, Dalkeith and Penicuik must be accelerated at a regional if not national level. On a regional level work with Network rail and other partners to improve Borders rail service (more carriages, more frequent service), to remove vehicles from the road.
Page 129 of 164 8 Explore opening up Edinburgh’s suburban railway lines, where railway lines / routes have been protected. The orbital public transport route must also be accelerated. This was originally proposed for buses but it would make sense to make this a tram route or at the least, built so it can be changed to trams. Again this needs regional national funding to go ahead.
Midlothian Council accepts that City of Edinburgh Council may not be able to access funding for all of the mitigation but would expect that the local authority consultation responses are highlighted to Scottish Government supporting funding and mitigation schemes are implemented out with LEZ areas.
Finally we would like clarification that if diversions due to road works including emergency works, diverted traffic into the zone, that equipment and systems would be in place, so that non-compliant vehicles are not fined.
Page 130 of 164
Midlothian Council Tuesday 20 August 2019 Item No 8.7
Learning Estate Strategy Update
Report by Dr Mary Smith, Director, Education, Communities and Economy
1 Purpose of Report The purpose of this report is to provide Council with an update on the work undertaken to review and prioritise the Learning Estate Strategy (LES) projects in order to arrive at a more affordable position, as reported to Council on 7 May 2019.
2 Background
The May report identified the following funding position:
Estimated Early Developer SG Net Summary Capital Years Funding Funding Gap Cost Funding £'000£'000£'000£'000£'000 Danderhall/Shawfair82,924 66,047 16,877 Dalkeith40,381 13,165 3,367 23,849 Newbattle85,188 59,061 4,064 8,003 14,060 Lasswade48,539 35,936 1,618 10,985 A701 / Penicuik86,060 45,199 16,189 24,671 343,091219,407 9,050 24,192 90,442
The sources of the funding gap were summarised as follows:
Funding Gap due to: £'000 Lack of developer contributions39,527 Replacement of existing capacity24,657 Refurbishment of existing capacity22,666 Adding EY provision to primary school post 20213,592 90,442
A number of areas were identified for consideration in order to reduce the funding gap, including avoiding where possible projects for the provision of additional capacity which would require the replacement or refurbishment of existing capacity.
3 Updated assumptions for delivery of the Learning Estate Strategy
As well as considering alternative ways to provide additional school capacity for the growing population of Midlothian, we have also reviewed a number of other assumptions. Please see attached documents.
Page 131 of 164
The key alternative approaches are detailed below:
3.1 Dalkeith primary school capacity In the costings presented in May we allowed for the refurbishment and extension of Kings Park Primary School to bring it up to 3-stream, including early years provision, at an estimated cost of £13.3 million and a funding gap of £7.8 million.
We have looked instead at providing all the additional primary school capacity required for Dalkeith at the new school to be provided on the Kippielaw site, making it a 3-stream school. We have retained an allowance for early years’ expansion at Kings Park which should be delivered as soon as possible and a provision for refurbishment that can be addressed at a later stage.
3.2 Newtongrange primary school capacity In the costings presented in May we allowed for the extension of Newtongrange Primary School to bring it up to 3-stream. While this may be achievable by extending into the park it would be challenging and significantly impact on the park.
We have looked instead at providing a 3-stream school at the new primary school in Easthouses. We have retained an allowance for early years’ expansion at Newtongrange and a provision for expansion/refurbishment that will enable the school to operate at full 2-stream capacity.
3.3 Primary school capacity for Auchendinny In the costings presented in May we allowed for a new single stream primary school to replace Glencorse and to provide capacity for planned housing development in Auchendinny. The Council would fund the cost of replacing the existing capacity which was estimated at a capital cost of £2.4 million.
The alternatives to provide this capacity are to extend Mauricewood or Roslin Primary Schools, this will be explored further in preparation for the Glencorse Primary School consultation. For the purpose of these updated projections we have allowed for an extension to Mauricewood bringing it up to 3-stream.
3.4 Other assumptions 3.4.1 The number of pupils attending our RC schools has been capped in order to keep the numbers within existing or planned capacity. This increases the projection of pupil numbers attending non-denominational schools in Dalkeith, Mayfield and Gorebridge. This may be further affected by the review of denominational school provision and we will revisit the projections as we progress through that review.
3.4.2 In the May report the cost of primary school capacity was estimated on the basis of the Scottish Futures Trust (SFT) metric. Our estimate for the cost of new build primary schools is now based on 90% of the SFT metric based on cost levels achieved in recent Midlothian primary school projects.
3.4.3 The provision of secondary school capacity has been set at 90% of the peak projected pupil rolls in recognition of the flexibility which is designed into our secondary schools and in order to minimise the creation of excess capacity in the longer term.
2
Page 132 of 164
3.4.4 These projections assume Scottish Government funding for the replacement or refurbishment of existing capacity at Beeslack (A701) and Penicuik High Schools and the Mayfield School Campus.
3.5 Summary of the Learning Estate Capital Funding Position
Estimated Early Capital Developer Years SG Cost Funding Funding Funding Net Gap £'000 £'000 £'000 £'000 £'000 Danderhall/Shawfair 75,483 66,047 9,436 Dalkeith 32,238 13,165 3,367 15,706 Newbattle 80,160 57,910 4,064 7,202 10,984 Lasswade 43,876 32,401 637 10,838 A701 / Penicuik 80,786 29,105 603 23,606 27,472 312,543 198,628 8,671 30,808 74,437 These estimates are based on the assumptions outlined in sections 3.1 to 3.4 above.
The detailed timeline of the Learning Estate Strategy funding gap is shown in a table in Appendix 1.
The sources of the funding gap are summarised as follows:
Funding Gap due to: £'000 Lack of developer contributions 40,571 Replacement of existing capacity 20,758 Refurbishment of existing capacity 13,108 74,437
4 Report Implications
4.1 Resource The total indicative capital cost of providing all the additional primary and secondary school capacity identified in the learning estate strategy is estimated at £312 million. Developer contributions will be available to fund a significant proportion of this expenditure, this is currently estimated to be in the region of £199 million. Scottish Government funding as described in section 3.4.4 would contribute in the region of £31 million. The capital grant for Early Years Expansion can fund a further £9 million, further development of these plans is being completed and will be reported separately to Council.
The net of these figures gives a £74 million funding gap which would need to be funded by borrowing and/or by generating capital. The next step is to decide how best to reflect the funding requirements of the Learning Estate Strategy in the Council’s Capital Investment Strategy and General Service Capital Plan.
3
Page 133 of 164
4.2 Risk If the Council does not have a funding strategy for the delivery of the learning estate there is a risk that the Council will not have a place for every pupil at their catchment school.
There is a risk that without an agreed strategy Council will be in a weaker position to bid for and secure Scottish Government funding.
There is a risk that without having a Learning Estate Strategy in place the Council will not secure the appropriate level of S75 contributions required to deliver additional capacity arising from housing developments.
There is a risk that the funding required to deliver the strategy will require a level of prudential borrowing that will only be affordable if other capital projects are de prioritised and/or further savings are secured in the revenue budget to provide the capacity in the revenue budget to meet the costs of additional prudential borrowing.
4.3 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
4.4 Impact on Performance and Outcomes The aim of this paper supports the priority to reduce the inequalities in learning outcomes by improving the quality of learning and teaching, leading to raised levels of achievement and attainment, by providing every child with the opportunity to attend school in their local community.
4.5 Adopting a Preventative Approach The aim of this paper supports the priority to reduce the inequalities in learning outcomes by improving the quality of learning and teaching, leading to raised levels of achievement and attainment, by providing every child with the opportunity to attend school in their local community
4.6 Involving Communities and Other Stakeholders This report presents an update on the Learning Estate Strategy and identifies a number of proposals which would be subject to statutory consultation.
4.7 Ensuring Equalities This paper presents an update on the Learning Estate Strategy for which an Equality Impact Assessment was carried out and made available in the Members’ Library along with the Learning Estate Strategy in September 2017.
4
Page 134 of 164
4.8 Supporting Sustainable Development The Learning Estate Strategy supports sustainable development by outlining the short to long term requirements for the school estate. This paper takes into account the need to deliver fit for purpose schools across Midlothian which are sustainable while anticipating and acknowledging the needs and views of stakeholders.
4.9 IT Issues The IT requirements of the proposed strategy and cost implications will be developed as part of the specifications for each school project.
5 Summary
As specified in the report to Council in May 2019, we have undertaken further work to review and prioritise the LES projects and identify compromises that can be made in order to arrive at a more affordable position. If all of the revised assumptions identified in section 3 are adopted the estimated capital funding gap for the delivery of the LES reduces from £90 million to £74 million.
The next step is to decide how best to reflect the funding requirements of the Learning Estate Strategy in the Council’s Capital Investment Strategy and General Services Capital Plan.
5 Recommendations
It is recommended that Council notes
1. the content of the report and endorses the work that officers are undertaking to develop a strategic solution to funding the Learning Estate Strategy, and
2. updates to the Learning Estate Strategy are reflected in the Capital Strategy.
9 August 2019
Report Contact: Sandra Banks, Resource Manager, Education Tel No 0131 271 3727 [email protected]
Appendix 1 – Learning Estate Strategy Capital Funding Gap Appendix 2 – Pupil Census 2018
Background Papers Learning Estate Strategy Update, Council 7 May 2019 Learning Estate Strategy 2017-2047, September 2017
5
Page 135 of 164
Appendix 1 Learning Estate Strategy Estimated Capital Funding Gap
Cost Developer Early Years SG Funding Learning Estate Strategy Year Estimate Funding Funding Funding Gap Woodburn Primary extension (1 class plus ) 2019 1,477 1,477 Lasswade High - core facilities for 1600 pupils 2019 1,913 1,913 Lawfield Primary 2 class extension - 2019 2019 610 610 St Davids Primary - 1-stream + EY expansion 2020 1,485 149 352 983 Rosewell EY expansion 2020 637 637 Kings Park PS - EY expansion / refurbishment 2020 8,073 1,508 6,565 Gorebridge EY expansion 2020 1,371 1,371 Mauricewood refurbishment/EY expansion 2020 7,656 5,289 603 1,765 Burnbrae PS - convert nursery to GP space 2021 62 62 New Easthouses primary school on former NHS site 2021 14,875 10,602 1,563 2,710 Newtongrange Primary - expansion to 3 stream 2021 3,399 1,868 1,131 400 New Dalkeith primary school at Kippielaw 2022 14,505 7,478 1,508 5,520 56,063 27,909 8,672 19,483 Mayfield School Campus replacement 2022 14,404 7,202 7,202 A701 Secondary 2022 33,651 10,354 11,649 11,648 A701 special needs provision 2022 3,251 3,251 Penicuik High refurbishment & extension 2023 27,726 5,221 11,957 10,548 Strathesk Primary one class extension 2023 305 82 223 Hopefield Farm 2 Primary (HS12) 2023 13,446 13,446 0 Hawthornden Primary extend to 2 stream 2024 1,787 79 1,709 Gorebridge secondary school 2024 32,188 31,703 485 Redheugh new Primary 2024 12,692 12,692 Rosewell Primary extend to 2 stream 2024 6,387 5,659 728 145,838 79,236 30,808 35,794 Shawfair Secondary - 1800 places 2026 39,016 37,752 1,263 Shawfair special needs provision 2026 3,251 3,251 Bilston Primary School - extend to 2 stream plus 2026 5,359 5,359 0 Lasswade High extension to 1800 2027 5,419 5,419 Roslin Primary - expand to two stream 2027 2,837 2,801 37 Lasswade Primary - 3 stream replacement 2028 13,482 5,885 7,597 Shawfair Town Centre Primary - 3 stream 2028 14,236 14,236 Dalkeith High - extension 2029 5,690 5,537 153 St Andrews Primary - extension 2030 621 435 186 Shawfair Newton Village Primary - 3 stream 2034 14,236 14,236 Expansion to Shawfair Town Centre School 2042 4,745 -177 4,922 Pathhead ASN refurbishment 1,008 1,008 St Matthew's Primary refurbishment 743 743 110,642 91,482 19,159 Total 312,543 198,627 8,672 30,808 74,436
6
Page 136 of 164
Appendix 2 Pupil Census 2018
School P1 P2 P3 P4 P5 P6 P7 Total Bilston Primary School 11 16 14 12 5 10 9 77 Bonnyrigg Primary School 57 59 57 61 65 54 60 413 Burnbrae Primary School 80 70 66 58 65 55 45 439 Cornbank Primary School 33 41 37 35 25 32 43 246 Cuiken Primary School 36 35 37 29 28 36 32 233 Danderhall Primary School 44 52 41 39 40 42 25 283 Glencorse Primary School -- 2 2 3 3 2 3 15 Gore Glen Primary School 40 40 27 12 12 14 12 157 Gorebridge Primary School 38 32 40 57 52 37 40 296 Hawthornden Primary School 41 56 48 58 38 46 52 339 King's Park Primary School 68 69 69 71 68 62 58 465 Lasswade Primary School 53 56 51 62 52 57 49 380 Lawfield Primary School 49 54 54 56 47 22 46 328 Loanhead Primary School 29 22 28 24 32 29 32 196 Mauricewood Primary School 38 43 51 43 49 54 49 327 Mayfield Primary School 44 40 43 39 41 25 43 275 Moorfoot Primary School 8 10 13 15 9 12 14 81 Newtongrange Primary School 59 48 45 52 52 51 47 354 Paradykes Primary School 37 38 42 40 31 47 32 267 Rosewell Primary School 15 13 15 21 22 14 19 119 Roslin Primary School 40 26 27 25 25 26 21 190 Sacred Heart Primary School 16 22 22 20 19 15 13 127 St Andrew's Primary School 18 26 24 20 26 24 25 163 St David's Primary School 24 30 27 27 32 29 26 195 St Luke's Primary School 28 32 33 23 25 24 28 193 St Margaret's Primary School 10 4 9 8 8 6 10 55 St Mary's Primary School 20 14 13 26 24 15 27 139 St Matthew's Primary School 4 11 6 8 10 5 1 45 Stobhill Primary School 32 30 28 29 30 33 25 207 Strathesk Primary School 38 47 52 53 45 52 49 336 Tynewater Primary School 29 30 27 31 22 24 28 191 Woodburn Primary School 91 79 82 73 67 59 56 507 Total 1,130 1,147 1,130 1,130 1,069 1,013 1,019 7,638
School S1 S2 S3 S4 S5 S6 Total Beeslack High School 141 107 114 128 81 81 652 Dalkeith High School 164 187 158 116 132 74 831 Lasswade High School 277 281 284 296 253 141 1532 Newbattle High School 183 170 189 146 130 81 899 Penicuik High School 119 101 100 113 97 56 586 St David's RC High School 145 106 114 106 76 66 613 Total 1,029 952 959 905 769 499 5,113
Total
Saltersgate 103
7
Page 137 of 164
Page 138 of 164
Midlothian Council Tuesday 20 August 2019 Item No 8.8
Learning Estate Strategy Investment Programme and Funding Model
Report by Dr Mary Smith, Director of Education, Communities and Economy.
1 Purpose of Report
The purpose of this report is to advise Council that the Scottish Government is inviting local authorities to bring forward submissions for the Initial Phase of latest £1 Billion schools investment programme and an outline bid is submitted for Beeslack Community High School (A701 School) as our proposed project for funding during the initial phase.
2 Background
The Scottish Government is planning to invest £1bn, amounting to £40m year for 25 years in improving the school estate. This would be committed to projects over the rest of the life of the current Parliament and throughout the next Parliament. The investment is revenue funding and must not count against the Scottish Government’s capital allocation. The Scottish Government focused is on the schools in class C/D condition and suitability. There are 80k pupils in condition C/D schools and 94k pupils in suitability C/D schools. These two criteria do not necessarily overlap but there are 135 schools with some 33k pupils that are classed as C or D in both categories. The Scottish Government believes there is scope to improve the environment for some 50k pupils. The current scheme has seen schools in category B benefit where they were at risk of falling in to category C but the focus will inevitably be on bringing C/D schools up to condition A/B. It is proposed that the funding made available to each project will be equivalent to 50% of the capital cost and that it will be dependent on the council finding match funding and committing to maintaining the school over its lifetime in condition and suitability class A/B. As with the previous scheme the Scottish Government will only fund against standardised metrics in terms of school size and costs. If councils fund the other 50% then this will double the (revenue) investment to £2bn. It is considered that better value for money can be achieved through public sector funding (e.g. PWLB) rather than Private Finance and based on a PWLB 25 year annuity rate of 2.38% (as at 8 May 2019) this would finance a capital investment of £1.5bn.
Page 139 of 164 2 Since the Scottish Government cannot provide capital support then it would provide revenue funding made up of:
(a) a contribution equal to the Facilities Management and Lifecycle costs (inflated and annualised); and, if this is less than 50% of the capital cost, (b) the balance made up of funding that is dependent on achieving agreed outcomes (e.g. in relation to carbon reductions or sustainability). These outcomes would have to be met once, there would not be a continuous measurement of outcomes. Funding would be provided based on PWLB rates on the date of financial close and grant support would start once the school opened for part (a) and when the outcomes are delivered for part (b). Part (b) funding is based on the Growth Accelerator Model and might be achieved on opening or possibly after a year of operation. The total funding under this aspect would be spread across the period over which the outcomes were delivered so the council will receive sufficient funding.
3 Current Position
The Council’s learning estates strategy can evidence the significant investment in our learning estate and the benefits derived for the surrounding communities.
Midlothian Council is ideally placed to support this initial phase of projects as the Council has developed its own learning estate strategy which sets out the principles for our learning estate up to 2047.
As only one project per Council area is likely to be funded at this stage the application is specifically for a replacement for Beeslack Community High School (A701 School) as the Council would not be able to take the forward unless we have specific funding support from Government. The replacement of Beeslack Community High School (A701 School) would allow Midlothian Council to build a new Centre of Excellence in a STEM learning campus and build on our experience of delivery of Newbattle Digital Centre of Excellence. The site identified for the relocation of Beeslack Community High School, on the A701 Corridor adjacent to Roslin, will provide the best possible location for a learning campus which will draw together the growing communities of Loanhead, Bilston, Roslin and Auchendinny.
4 Report Implications
4.1 Resource
If successful Midlothian Council will be required to confirm our commitment to actively working with SFT / Scottish Government to take forward the development work relative to the shared investment approach.
Page 140 of 164 3
The collective experience from the Council’s previous projects puts us in a position to support the development of this approach in a constructive manner.
4.2 Risk The submission was made on 5 August, by the Chief Executive, in consultation with the Leader of the Council as the risk in not meeting that specified dateline would result in the loss of a funding opportunity. The submission was also raised at the cross party Business Transformation Group earlier of the 5th August to ensure cross party agreement for the submission.
5 Recommendations
It is recommended that Council notes the content of this report and endorses the funding bid application.
Date 5 August 2019
Report Contact: Mary Smith, Director, Education, Communities and Economy.
Page 141 of 164
Page 142 of 164 Midlothian Council Tuesday 20 August 2019 Item No 8.9
European Social Fund Programmes (2014 – 2020)
Report by Dr Mary Smith, Director of Education Communities and Economy
1 Purpose of Report
The purpose of this report is to provide an update the pre-suspension of European Structural Fund Payments and how this will potentially impact income related to Midlothian’s ESF pipeline delivery.
2 Background
Midlothian Council have been advised that Scottish Government (SG) have initiated a pre-suspension procedure for interim payments of the European Structural Funds Scotland programme. This decision has been taken by SG following two separate audits from the European Commission (December 2018 and April 2019).
2.1 Context of Pre-suspension Procedure Scottish Government (Managing Authority) have imposed a pre-suspension procedure on Lead Partners (Local Authorities) following two separate audits from the European Commission (EC). The EC will not pay any claims, either already submitted or due to be submitted from Scottish Government until the issues have been resolved. SG are imposing the same restrictions on all Lead Partners. The Early Preventative System Audit (EPSA) report highlights issues with the Managing Authority (SG), and serious concerns with the quality of information and information received from Lead Partners, relating to the ESF programmes. The report also highlights potential non-compliance with the regulations as a result of funding for some operations being treated as competitive grants, rather than as public procurements. The EC report states that there are ‘serious deficiencies in the management and control system’ which have ‘put at risk the Union contribution to the programme’. The EPSA draw the following conclusions in their draft report:
• Inadequate verification of public procurement procedures. • Lack of verification whether declared costs actually relate to delivered services / achievements. • Insufficient checks on correct implementation of flat rates on direct staff costs.
The Managing Authority have now begun to address the points in the report, seeking detailed evidence from all lead partners (including Midlothian Council which will require it to gather further evidence from sub-contractors). It is unlikely that any payments will be authorised until late 2019.
Page 143 of 164 SLAED have responded to SG on behalf of LA’s, the key points of the response are:
• SLAED are seeking clarification on the content of the EPSA report. • Four LA’s were audited by the EC which formed part of the audit – there has been no feedback from SG on the findings of these audits. • SLAED raised concern regarding the implications related to the delay in payments to LA’s – there is already a lengthy audit process for payments made by SG. LA’s pay deliver partners prior to making claims. • Lack of clarity on the programme rules and SG interpretation of EC rules. • The cumulative impact of uncertainty and increased risk for Lead Partners. • Confirmation that SLAED would like to work closely and constructively with SG to address the issues raised in the report.
Three relevant letters are attached to this report which will provide more detail:
• SG letter to LA’s (Lead Partners) informing of the decision to initiate a pre- suspension procedure. • SLAED response to SG. • Joint COSLA, SLAED and SOLACE update on EU Funding (June 2019).
2.2 Midlothian’s ESF Programmes Midlothian Employability Pipeline Midlothian Council went out to tender for the procurement of eight projects as part of the Employability strand, but only received applications for five along with an in- house project. The poor response was mainly due to partners having to provide a 60% match fund, which proved to be prohibitive.
External partners procured to deliver Employability projects within Midlothian are as follows:
• Access to Industry • Into Work • Lothian Veterans • RUTS
There is also a Aim High project delivered by LLE. This project ended on the 31st March 2019.
Midlothian Social Inclusion & Anti-Poverty Programme The original Strategic Intervention Application was submitted by Midlothian Council in April 2016. However there was a prolonged period of discussion with SG as regards total number of participants that would benefit from the programme. The original application had indicated a much larger number than was feasible for the project and circumstances had changed in Midlothian since this was submitted to SG. The project Poverty and Social Inclusion (PSI) was approved by SG in May 2017. PSI consisted of three separate projects and Midlothian Council went out to tender in August 2017 but there were no applications. In October 2017, Midlothian Council once again sought bids for the projects and this time received one approval. This project is delivered internally by the Welfare Rights Team, commenced in April 2018 and ended on the 30th June 2019.
Page 144 of 164 Management Costs The original contract allowed for a management fee which covered staff costs. This funded 40% of one member of staff for four months initially and related to one member of staff (Grade 7). Following discussions with SG in late 2017, it was agreed that they would provide additional funding to help with the management costs. SG would now cover the costs of two members of staff one at Grade 7 and the other at Grade 10. The management fee relates to both projects. Due to staff changes LLE members of staff have been seconded to work on ESF (Grade 9) for 2 days per week initially which was increased to four days as the Grade 7 member of staff was off ill for a prolonged period of time, there is no back fill to existing post as match funding is required.
2.3 Effect on Midlothian’s ESF Programmes As both of Midlothian’s ESF programmes are now completed, participants will not be prohibited from accessing the programmes. However there may be a financial risk if SG take a decision to withhold payment or carry out more comprehensive audits. Local Authorities have, in the lifecycle of the ESF 2014-2020 programme, expressed concern of SG’s interpretation of EC rules and regulations. In the main these concerns have expressed via the SLAED (ESF Sub- group)
3 Report Implications
3.1 Resource While the ESF projects have ended there is still a considerable amount of work required to close off the programmes and ensure compliance. The project can be closed off by one member of the Communities and Lifelong staff with input from other Midlothian Council departments. At this point in time it is unclear what resource will be required, this is dependent on the level of scrutiny SG will implement in order to address the concerns of the EC audits.
3.2 Risk As Lead Partner, Midlothian Council are responsible for the entire value of the contract. This includes procured contracts to external partners. In order to submit claims to SG, Midlothian must first pay any outstanding claims to partners. It is only then that Midlothian Council can request payment from SG. The current period for audit and payment of invoices is approximately three months. Any funds that are withheld by SG, will be borne by Midlothian Council. Overview of claims paid by SG and outstanding claims awaiting payment and still to be submitted, a more detailed spreadsheet is attached:
Totals
100% 40%
£26,350.72 £10,540.29 Midlothian Council - Claim 1
£334,445.06 £133,778.02 Midlothian Council - Claim 2
£230,906.76 £92,362.70 Midlothian Council - Claim 3
£47,623.13 £19,049.25 Midlothian Council - Claim 4
£309,713.31 £123,885.32 Midlothian Council - Claim 5 (Employability - Final total TBC)
Page 145 of 164 4
£23,812.00 £9,524.80 Midlothian Council - Claim 6 (PSI - Final total TBC)
£972,850.98 £389,140.39 Forecast Totals
Midlothian Council have now begun to make contact with sub-contracted partners to provide additional information.
3.3 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
3.4 Key Priorities within the Single Midlothian Plan Improving Opportunities Midlothian (Anti-poverty, Lifelong Learning, Employment, Equalities and Health Inequality).
3.5 Impact on Performance and Outcomes This work is core to addressing inequalities for Midlothian Community Planning Partnership.
3.6 Adopting a Preventative Approach The ESF 2014-2020 programmes have now been completed.
3.7 Involving Communities and Other Stakeholders Involving key partners to ensure local delivery to Midlothian participants.
3.8 Ensuring Equalities Supporting local people to gain employment actively support equality groups and addresses financial inclusion issues.
3.9 Supporting Sustainable Development Not applicable.
3.10 IT Issues None
4 Recommendations
Midlothian Council is recommended to:
• Note the possible impact of a pre-suspension procedure imposed by Scottish Government. • Recognise that there may be a need for additional resource if Scottish Government conduct supplementary audits.
24 July 2019 Report Contact: Dennis Dunne [email protected]
Page 146 of 164
Midlothian Council Tuesday 20 August 2019 Item No 8.10
Lease/Purchase Electric Vehicles and Provide Electric Vehicle Charging Infrastructure
Report by Kevin Anderson, Acting Director, Resources
1 Purpose of Report
The purpose of this report is to advise Council of the Corporate Management Team’s approval for the Lease or Purchase of Ultra Low Emission Vehicles (ULEVs) and provision of Electric Vehicle (EV) charging infrastructure at public locations and council facilities, and an external funded staff resource be sourced to develop a strategy for the introduction of ULEVs and necessary EV charging infrastructure
2 Background
The Scottish Government has already indicated that they are committed to phasing out the purchase of petrol and diesel vehicles by 2032. Midlothian has been using grant funding from the Scottish Government to lease or purchase Electric vehicles and also fund charging infrastructure since 2012. 3 Current Position
Grant funding from the Scottish Government to Midlothian Council since 2012 has allowed us to be in our current situation where we now operate 21 electric vehicles (3 owned and 18 leased) and15 public access charge points including 2 rapid chargers have been installed across Midlothian. In addition non-public access charges have been installed at Bonnyrigg Depot, Midlothian House and Stobhill Depot. At present there is also an intern reviewing the expansion and improved usage of the current fleet, primarily as a pool resource but also looking at overall fleet utilisation and requirements for infrastructure. 4. Future Provision To ensure that we have the necessary infrastructure and fleet planning to meet the 2032 deadline capital funding will be required for fleet replacement and infrastructure. There is a fleet capital replacement programme for the renewal of the existing council fleet however the current plan and forecast spend is based on existing vehicle technologies (diesel, petrol and gas oil). The capital cost for electric or alternative fuelled vehicles is currently around 20 – 40% higher than conventionally fuelled vehicles and the council needs to develop a strategy to meet the 2032 deadline. In preparing this report for CMT options were considered.
Page 147 of 164 2
Option1 - Status Quo Option 2 – Continue with the current fleet replacement programme with annual increase of 30% Option 3 – Use grant funding to increase the number of ULEVs and increase the infrastructure to meet the demand and employ a dedicated member of staff to research and implement a strategy to inform the council on future resource requirement
Option 1 - Status Quo – Not an option as we need to meet the 2032 deadline.
Option 2 – Increase the fleet capital replacement programme year on year till 2032 - This option would result in increased capital expenditure but would primarily focus on one for one replacement basis and would not allow for considered replacement based on experience of operating alternative vehicles.
Option 3 – Use grant funding to increase the number of ULEVs, increase necessary infrastructure and research to inform future policy. Would require full use of Scottish Government funding and the requirement to explore additional external funding sources.
5 Report Implications
5.1 Resource
Options one and two are based on current capital replacement forecast. Option 3 is met from Scottish Grant Offers as detailed below.
1. Procurement or 3 year lease of ULEVs - £45,600
2. Installation of infrastructure, up to value - £160,000
3. Staff resource included in grant 2, above - £40,000
5.2 Revenue
1. The EV infrastructure will be purchased with a 5 year maintenance within the grant above.
2. The grant for ULEVs does not include annual maintenance, revenue allowance of £300/vehicle/annum is budgeted for based on previous years procurement this would amount to £2,100 based/annum on 7 vehicles
3. Non-fair and wear and tear damage (NFWT) – cannot be quantified.
Page 148 of 164 3 5.3 Benefits
Council would have an increase in the percentage of ULEVs operated
Infrastructure requirements would be met.
A well-researched policy and capital requirements would be developed to inform future council fleet requirement and replacement programme opportunities towards 2032.
5.4 Risks If we fail to recognise the impact of the 2032 deadline within current policy we could reach 2032 without a structured plan and vehicles that may not meet future regulation requirements for low emission zones and possible tax penalties as a consequence.
5.5 Digital Services Issues No digital services issues are anticipated
6 Summary
It is proposed that the Council agree to accept the grant offers from the Scottish Government.
7. Recommendations
It is recommended that Council notes the content of this report and that option 3 is being progressed following CMT agreement.
Date 12 July 2019
Report Contact: Trevor Docherty, Travel and Fleet Services Manager Healthy Living Manager [email protected]
Page 149 of 164
Page 150 of 164 Midlothian Council Tuesday 20 August 2019 Item No 8.11
Standards Commission Decisions
Report by Monitoring Officer
1 Purpose of Report This report seeks to advise the Council of the decision of the Standards Commission regarding a complaint against Councillor Colin Cassidy and invites the Council to consider that finding as required by section 18 (3) of the Ethical Standards in Public Life etc. (Scotland) Act 2000.
2 Background
2.1 Following consideration of a complaint received against Councillor Cassidy, the Commissioner for Ethical Standards in Public Life in Scotland referred the complaints to the Standards Commission for Scotland to determine if the Councillor had contravened paragraphs 5.3, 5.12 and 7.12 of the Councillors’ Code of Conduct.
2.2 The relevant paragraphs of the Code of Conduct are as follows:
Declaration of Interests 5.3 You may feel able to state truthfully that an interest would not influence your role as a councillor in discussion or decision-making. You must, however, always comply with the objective test (“the objective test”) which is whether a member of the public, with knowledge of the relevant facts, would reasonably regard the interest as so significant that it is likely to prejudice your discussion or decision making in your role as a councillor.
The Non-Financial Interests of other persons 5.12 You must declare if it is known to you ANY NON-FINANCIAL INTEREST of: (i) a spouse, a civil partner or a co-habitee; (ii) a close relative, close friend or close associate; (iii) an employer or a partner in a firm; (iv) a body (or subsidiary or parent of a body) of which you are a remunerated member or director; (v) a person from whom you have received a registrable gift or registrable hospitality; or (vi) a person from whom you have received registrable election expenses. There is no need to declare the interest unless it is clear and substantial. There is only a need to withdraw from the meeting if the interest is clear and substantial.
Decisions on Planning Matters General 7.12 If you have an interest, whether financial or non-financial, in the outcome of a decision on a planning application, or a planning agreement, or on taking enforcement action, or in a Local Review Body, you must declare that interest and refrain from taking part in making the decision.
Page 151 of 164 2.3 After a hearing in the Council Chambers on 9 May 2019, the Standards Commission found that: a) Councillor Cassidy had breached paragraph 5.3 of the Code and b) Councillor Cassidy had not breached paragraphs 5.12 and 7.12 of the Code.
2.4 Following the finding, the Commission agreed to censure Councillor Cassidy. This sanction is mandatory and cannot be overturned or varied by the Council.
2.5 It should be noted that the Commission did not feel a more severe sanction was warranted as the incident had been a one-off and there was no personal gain to Councillor Cassidy. Furthermore the Commission also accepted that the Councillor had not made any attempt to conceal his relationship with either the applicants or the objectors.
2.6 The Decision letter in respect of Councillor Cassidy is attached as Appendix 1 to this report and members are invited to consider the terms in full.
3 Report Implications
3.1 Resource No additional resources are required as a result of this report.
3.2 Risk The Council has a statutory duty in terms of section 18 (2) of the Ethical Standards in Public Life etc.(Scotland) Act 200I to consider the terms of the Commission’s findings within three months. Failure to do so would not only be a breach of the Act but could also lead to an erosion of public confidence in the Council.
3.3 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 X None of the above
3.4 Key Priorities within the Single Midlothian Plan This report does not impact on the key priorities within the Single Midlothian Plan
3.5 Impact on Performance and Outcomes This report does not directly impact on Midlothian Council’s performance and outcomes.
3.6 Adopting a Preventative Approach This report does not directly impact on actions and plans in place to adopt a preventative approach Page 152 of 164
3.7 Involving Communities and Other Stakeholders This report does not directly relate to involving communities.
3.8 Ensuring Equalities This report does not recommend any change to policy or practice and therefore does not require an Equalities Impact Assessment.
3.9 Supporting Sustainable Development There are no sustainability issues arising from this report.
3.10 IT Issues There are no IT issues arising from this report
4 Recommendations The Council is recommended to consider the findings in the Commission’s decision letter of 15 July 2019 in respect of Councillor Colin Cassidy and to advise the Commission of any feedback;
Date 25 July 2019
Report Contact: Alan Turpie Tel No 0131 271 3667 [email protected]
Background Papers:
Appendix 1 Standards Commission Decision letter dated 15 July 2019
Page 153 of 164
Page 154 of 164 COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
Decision of the Hearing Panel of the Standards Commission for Scotland following the Hearing held at Midlothian House, 40-46 Buccleuch Street, Dalkeith, EH22 1DN on 10 July 2019.
Panel Members: Professor Kevin Dunion, Chair of the Hearing Panel Mrs Tricia Stewart Mr Paul Walker
The Hearing arose in respect of a Report by Mr Bill Thomson, the now former Commissioner for Ethical Standards in Public Life in Scotland (the ESC), further to complaint reference LA/Mi/2166 & 2169 (the complaint) concerning an alleged contravention of the Councillors’ Code of Conduct (the Code) by Councillor Colin Cassidy (the Respondent). The Hearing commenced on 9 May 2019 but was adjourned until 10 July 2019 due to a lack of time, after it became apparent the parties had different interpretations of a joint statement that purported to outline facts that had been agreed between them.
The current ESC was represented by her Senior Investigating Officer, Mr Martin Campbell. Councillor Cassidy was represented by Mr Scott Martin, solicitor.
Complaint
A complaint was received by the ESC about the alleged conduct of the Respondent. Following an investigation, the ESC referred the complaint to the Standards Commission for Scotland on 31 January 2019, in accordance with section 14(2) of the Ethical Standards in Public Life etc. (Scotland) Act 2000, as amended.
The substance of the referral was that the Respondent had failed to comply with the provisions of the Code and, in particular, that he had contravened paragraphs 5.3, 5.12 and 7.12.
The relevant provisions are as follows:
Declaration of Interests 5.3 You may feel able to state truthfully that an interest would not influence your role as a councillor in discussion or decision-making. You must, however, always comply with the objective test (“the objective test”) which is whether a member of the public, with knowledge of the relevant facts, would reasonably regard the interest as so significant that it is likely to prejudice your discussion or decision making in your role as a councillor.
The Non-Financial Interests of other persons 5.12 You must declare if it is known to you ANY NON-FINANCIAL INTEREST of: (i) a spouse, a civil partner or a co-habitee; (ii) a close relative, close friend or close associate; (iii) an employer or a partner in a firm; (iv) a body (or subsidiary or parent of a body) of which you are a remunerated member or director; (v) a person from whom you have received a registrable gift or registrable hospitality; or (vi) a person from whom you have received registrable election expenses. There is no need to declare the interest unless it is clear and substantial. PagePage 155 1 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
There is only a need to withdraw from the meeting if the interest is clear and substantial.
Decisions on Planning Matters General 7.12 If you have an interest, whether financial or non-financial, in the outcome of a decision on a planning application, or a planning agreement, or on taking enforcement action, or in a Local Review Body, you must declare that interest and refrain from taking part in making the decision.
Preliminary Matters
The ESC’s representative indicated that a revised joint statement of facts had been agreed between the parties. The ESC’s representative further advised that the ESC was no longer relying on a sentence in the report which referred to the Respondent having indicated at interview that he regarded his sympathy with the objectors’ concerns as sufficient to require a declaration of interest. The ESC asked the Panel to disregard this sentence.
Evidence Presented at the Hearing
Background
The complaints about the Respondent concerned his attendance at a meeting of Midlothian Council’s Planning Committee on 3 April 2018, at which a planning application by Dalkeith Lawn Tennis Club (the tennis club) for the erection of screen netting was considered. The Panel noted that while objections to the proposal had been submitted by the proprietors of a property adjacent to the tennis club, who were concerned about potential light depletion, the planners’ recommendation was that planning consent should nevertheless be granted. The Panel was advised that the application was approved by the Committee, subject to a condition requiring the use of a different type of netting.
Joint Statement of Facts
The Hearing Panel noted the terms of the revised joint statement of facts that had been agreed between the parties. In this, the parties confirmed that the Respondent’s position was that he had declared an interest in knowing both the objectors at the meeting on 3 April 2018, albeit it had been unnecessary for him to have done so as neither could be considered a ‘close friend’ under paragraph 5.12 of the Code.
The parties advised that the Respondent had undertaken work on the objectors’ property on a no- fee basis in his capacity as a plant hire contractor. The parties advised that the work to move blaize material deposited on the property was undertaken at the instigation of the tennis club, following a complaint made to it by the objectors.
The parties advised that the Respondent was a former member of the tennis club and had friends who were members.
Witness Evidence
The Respondent’s representative led the Respondent as a witness.
PagePage 156 2 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
The Respondent confirmed that he had been elected as a councillor in May 2017. The Respondent advised that he had always lived in Dalkeith and, as such, had many friends in the town. The Respondent noted that it was a small community where everyone knew each other and that, in particular, he had made many connections through his role as an owner, and formerly as the manager, of a local plant hire business. The Respondent advised that, in addition, he had been a member of various community organisations and local charity boards.
The Respondent advised that he had no antipathy towards the tennis club and, in fact, had previously been a member of it for years, which included serving on its committee. The Respondent indicated he had many friends who were still members of the club and, indeed, was close friends with an individual who had been the president of it for nearly 20 years.
The Respondent advised that he had undertaken work on behalf of the club, which included putting up the netting between the tennis club and the objectors’ property, working on fencing and renewing the blaize surface material. The Respondent advised that, approximately four years ago, he had undertaken work, for free, to level blaize material from the club that had been dumped on the objectors’ land. The Respondent confirmed that he had done so at the request of the tennis club, after the objectors had threatened to bill it for the cost of employing a contractor to do the work.
The Respondent confirmed that he had known the objectors for a long time as he had served on a community council with one, and on a local community committee with both. The Respondent admitted that he had referred to the objectors as “good friends” during an interview with the ESC’s staff, but stated that this was simply a loose description. The Respondent indicated he regretted using the term “good friends” as, in doing so, he had inadvertently given the impression that he was close friends with objectors, when they were simply acquaintances. The Respondent advised that his definition of a close friend was someone that you would have dinner or go on holiday with, or someone you would lend money to or ask for help. The Respondent confirmed that he had a circle of close friends who fell within such a definition, which did not include the objectors. The Respondent advised that he had been friends on Facebook with one of the objectors but that one or other of them had ‘unfriended’ the other as a result of comments made on the site during the run up to the 2014 Scottish independence referendum. The Respondent confirmed that he had dined at the objectors’ restaurant on three occasion, but only as a paying customer.
The Respondent advised that, at the Planning Committee meeting on 3 April 2018, a number of other councillors had stated that they knew the objectors and had made site visits to see the fence and netting in place between their property and the tennis club. The Respondent indicated that this had made him think that he should also advise that he knew them and declare an interest. When one of the objectors entered the Council chamber, he had stood up to do so, with the intention of leaving the room, but the Chair had signalled that he should just sit down. The Respondent advised that he had therefore proceeded to take part in the discussion and decision-making. The Respondent indicated that, in doing so, he had been trying to find a solution that was acceptable to both sides.
In response to questions from the Panel, the Respondent confirmed that he had visited the objectors’ property on three of four occasions to move the blaize material. The Respondent indicated that it was possible that he considered he could take part in the consideration of the
PagePage 157 3 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL planning application as his relationships with both the applicants and objectors balanced each other out, but that he could not recall his exact thought process. The Respondent confirmed that he had sent a letter to the Planning Committee in 2011 (well before he had been elected as a councillor) in support of the objectors, in respect of an application they had made for replacement structures on their land. The Respondent advised, however, that he had only done so to draw attention to the need for perspective in respect of objections to planning application that were being lodged routinely at the time.
Submissions made by the ESC’s Representative
The ESC’s representative noted that, at interview, the Respondent had admitted that he had described the objectors as being “good friends” of his, had accepted they had mutual friends and that he had seen them on social occasions. The ESC’s representative further noted that the Respondent was on first name terms with the objectors, had undertaken work on their land (albeit as a favour to the tennis club), had submitted a letter in 2011 in support of the planning application they had made, and had served on community groups with them. The ESC’s representative accepted, nonetheless, that in a small community such as Dalkeith, it was likely that the Respondent would know a lot of people and confirmed that there was no suggestion that the Respondent had dined at the objectors’ restaurant on any basis other than as a paying customer.
The ESC’s representative further accepted that it was a borderline case and noted that it was up to the Panel to determine what the Respondent had meant by “good friends” and whether it was satisfied, on the balance of probabilities, that his relationship with the objectors amounted to a close friendship or association. The ESC’s representative noted that there did not appear to be any dispute that the objectors’ interest in the planning application before the Committee was clear and substantial and argued that this meant that if the Panel determined that there had been a close friendship or association, it followed that the failure to declare the interest and withdraw from the meeting amounted to a breach of paragraph 5.12 of the Code.
The ESC’s representative contended, in any event, that the Respondent should have had regard to, and considered, the objective test, as outlined in paragraph 5.3 of the Code. The ESC’s representative noted it was not enough for the Respondent to have been satisfied that he was able to take part in the consideration and decision-making on the application objectively and on its merits alone. The ESC’s representative noted that the Respondent should also have considered whether it was likely that a member of the public, with knowledge of all the relevant facts, being the work the Respondent had undertaken on behalf of the club and his relationships with both it and the objectors, would reasonably have regarded his interest in the planning application as potentially being so significant that it would be likely to prejudice his discussion or decision-making. The ESC’s representative contended that, having done so, the Respondent should have formally declared an interest in the planning application and should have withdrawn from the meeting accordingly. The ESC’s representative argued that the Respondent’s apparent admission, when giving evidence, that he had been prompted to declare that he knew the objectors at the meeting as a result of other councillors doing so, demonstrated that he had not given the objective test sufficient consideration.
The ESC’s representative noted that the fact that the Respondent had stood up at the meeting and made an ill-founded declaration, did not in itself mean he was obliged to withdraw from consideration of the item. The ESC’s representative noted that the Respondent would only have had to withdraw if he had a clear and substantial interest that required to be declared. In this case, the
PagePage 158 4 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
ESC contended the Respondent had a declarable interest through his close friendship or association with the objectors and, as such, he should have stated it and withdrawn from the meeting while the planning application was being considered. The ESC’s representative argued that the failure to do so amounted to a breach of both paragraph 5.3 and paragraph 7.12 of the Code.
Submissions made by the Respondent’s Representative
The Respondent’s representative noted that the Respondent had made a declaration of interest at the meeting on 3 April 2018, in respect of knowing the objectors, albeit it was not in dispute that he proceeded to take part in the discussion on the item. The Respondent’s representative noted that it was not being suggested by the ESC that a councillor should be obliged to withdraw from a meeting by virtue of making an unnecessary declaration. The Respondent’s representative argued that as the Respondent had not been close friends or associates with the objectors at the time of the meeting, there was no need for him to have made a declaration of interest under paragraph 5.12 of the Code and to have withdrawn from the meeting while the planning application was being considered. The Respondent’s representative further argued that the Respondent had complied with the objective test under paragraph 5.3 of the Code by “weighing up” the different associations he had with both the applicants and objectors.
The Respondent’s representative contended that paragraph 7.12 did not apply as it only concerned a councillor’s own financial and non-financial interest in planning matters (as opposed to the financial or non-financial interests of others). The Respondent’s representative argued that the paragraph was not qualified by the objective test and noted that this had been found to be the case by the Standards Commission at a previous Hearing1. The Respondent’s representative noted that the Respondent did not have any financial or non-financial interest of his own in the planning matter and, as such, had not been required to declare an interest and to refrain from taking part in consideration of the application.
The Respondent’s representative advised that it was accepted that the objectors had a clear and substantial interest in the application under consideration and indicated, therefore, that the core issue at stake was whether the Respondent was ‘close friends’ with them. The Respondent’s representative noted that paragraph 5.2 of the Code emphasises that a councillor is in the best position to assess their own personal circumstances and to judge how they may affect their role. The Respondent’s representative argued that while it would not be sufficient for the Respondent to simply assert the objectors were not close friends, the evidence he had given about the nature and degree of his relationship with them could only lead the Panel to conclude that they were not. The Respondent’s representative contended that a ‘close friend’ was someone you might have dinner or share secrets with, and that the objectors did not even come close to reaching that threshold in terms of their relationship with the Respondent. The Respondent’s representative argued, therefore, that there had not been any breach of paragraph 5.12.
The Respondent’s representative noted that a finding of a breach of 5.3 of the Code would follow from a finding of a breach of paragraph 5.12, but accepted that the reverse was not necessarily true. There could be a breach of 5.3 of the Code even if paragraph 5.12 was not breached. The Respondent’s representative argued, however, that the objective test under paragraph 5.3 was analogous to the judicial test developed by the Courts for apparent bias, as outlined in Lord Hope’s judgement in the Supreme Court case of Magill v Porter [2001] UKHL 67. In this, Lord Hope had
1 LA/Fi/1501, 1516, 1518 & 1536 – decision made 14 July 2015 PagePage 159 5 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL stated that, in determining whether a decision should be set aside, the question was whether a fair- minded and informed observer would conclude in all the circumstances, that there was a real possibility, or a real danger, of a Tribunal being biased. In this case, the Respondent’s representative noted that the member of the public referred to in the objective test was not a member of the tennis club or one of the objectors, but rather was a fair-minded and reasonable individual who was considering the matter from an informed perspective. Such a fair-minded individual was not someone who was either unduly complacent or suspicious. The Respondent’s representative argued that such an individual would weigh up their knowledge of the Respondent’s relationship with the objectors (which he had been open and transparent about), with his connection to the tennis club, and would conclude that matters more or less balanced themselves out. As such, the individual would not reach the view that any interest the Respondent had in the matter was so significant as to be likely to prejudice his discussion or decision-making.
DECISION
The Hearing Panel considered the evidence led, and the submissions given orally at the Hearing and in writing, and found as follows:
1. The Councillors’ Code of Conduct applied to the Respondent, Councillor Cassidy.
2. The Panel was not satisfied, on the balance of probabilities, that the Respondent had contravened paragraphs 5.12 and 7.12 of the Code.
3. The Panel concluded, however, that the Respondent had breached paragraph 5.3 of the Code.
Reasons for Decision
The Panel accepted that the Respondent had purported to declare an interest in the item in question at the Planning Committee on 3 April 2018 by virtue of knowing the objectors. The Panel did not accept, however, that this statement amounted to a formal declaration under the Code as, if it had been such, the Respondent would be aware that he was required to leave the room and take no part in the discussion or decision-making on matter, or to explain why the interest was not sufficiently clear and substantial. In this instance the Respondent had not then withdrawn from the room and, instead, had taken part in the discussion and decision-making on the application. The Panel noted that the Respondent’s contribution had been to question how the impact of the netting had been assessed.
The Panel noted that paragraph 5.12 of the Code provides that councillors must declare any non- financial interests of close friends or associates and are obliged to withdraw from the meeting in question if the interest is clear and substantial. In making such an assessment, councillors must comply with the objective test under paragraph 5.3.
The Panel was satisfied that the objectors had a clear and substantial interest in the planning application and, as such, the question before it, in determining whether there had been a breach of paragraph 5.12, was whether the Respondent was a close friend or associate of them at the time of the meeting.
PagePage 160 6 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
The Panel noted that the terms ‘friend’ and ‘associate’ are not defined in the Code. The Panel accepted that Dalkeith was a small community, which meant that it was inevitable that the Respondent would know people and attend the same events.
The Panel noted that the Respondent had: • stated, at interview, that he was ‘good friends’ with the objectors, that he had mutual friends with them, and that he knew them from mutual membership of community groups; and • written a letter of support in 2011 in respect of a planning application the objectors had submitted.
The Panel nevertheless noted the Respondent’s evidence that the objectors were not close friends and that while he had eaten in their restaurant it was only as a paying customer, that he had not had them round to his house and that he did not socialise with them. The Panel accepted the Respondent’s evidence that he had used the term “good friends” loosely. The Panel further accepted that the letter of support had been written in 2011, some six years before the Respondent was elected and was satisfied that its contents only disclosed an interest in planning matters in general, as opposed to any evidence of close friendship.
Having taken account of all the circumstances and evidence led, the Panel was not satisfied, on the balance of probabilities, that the Respondent’s relationship with the objectors was sufficiently familiar or intimate for it to conclude that they were close friends or close associates. The Panel concluded, therefore that the Respondent had not breached paragraph 5.12 of the Code.
The Panel noted that paragraph 7.12 is not qualified by the objective test and that it refers to councillors having an interest, whether financial or non-financial, in the outcome of any planning application. The Panel was not satisfied that there was evidence that the Respondent had such an interest in the outcome of the particular planning application under consideration that would have required him to make a declaration and refrain from taking part in the decision-making under paragraph 7.12.
The Panel noted, nevertheless, that the Respondent had admitted, in evidence, that he: • had, in the past, been a member of the tennis club and had sat on its Committee; • had undertaken work for the club in terms of renewing the fencing; • had lent equipment to the club; • still had friend who were members of it; and • had been to the objectors’ property to move material at the request of the club.
The Panel further noted that the Respondent had previously put up and taken down the netting between the tennis club and the objectors’ property, and had also become familiar with the objectors while undertaking the work to move the blaize material and through their joint membership of community groups. The Panel, having taken the Respondent’s relationship with the tennis club and the objectors into account, considered that a member of the public, with knowledge of these relevant facts could reasonably have concluded that he had an interest in the matter before the Planning Committee that was sufficiently significant as to be likely to influence his discussion or decision-making. The Panel considered that the Respondent’s admission that he had been trying to find a solution that would be acceptable to both sides was evidence that he may have been so influenced.
PagePage 161 7 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
The Panel noted the Respondent’s admission that, at the meeting, he had been prompted, at least in part, to make his statement about knowing the objectors by the fact that other elected members present had announced that they had made site visits to the objectors’ property. The Panel was of the view that this demonstrated that it was more likely than not that the Respondent had made his statement as a result of the actions of other’s present, rather than because he had fully considered the objective test. In any event, as stated above, the Panel was of the view that the making of such a statement did not amount to a formal declaration of interest, given the Respondent had not then proceeded to withdraw from the room. The Panel was further of the view that it was a councillor’s personal responsibility to ensure that he or she complied with the Code and, as they were in the best position to assess their own personal circumstances and to judge how they may affect their role, it was not sufficient for them to rely on any guidance or gesture from a Committee Chair.
The Panel was not satisfied, therefore, that the Respondent had complied with the objective test under paragraph 5.3 of the Code and that he had given it sufficient consideration. As such, the Panel concluded that the Respondent had breached paragraphs 5.3 of the Code.
Evidence in Mitigation
The Respondent’s representative advised that the Respondent was a well-regarded member, who worked hard for his community. The Respondent’s representative provided letters of support which confirmed that the Respondent was a committed, approachable and diligent local representative.
The Respondent’s representative invited the Panel to conclude that the breach of the Code at a less serious end of any spectrum, given that no apparent prejudice had been caused by any omission on the part of the Respondent and also given it was evident he had not sought to conceal his relationship or association with either the tennis club or the objectors.
The Respondent’s representative further asked the Panel to note that the breach was a one-off incident and that there had been no benefit or personal gain to the Respondent, who had simply been trying to balance the interests of the tennis club with that of the objectors.
SANCTION
The decision of the Hearing Panel was to censure the Respondent, Councillor Cassidy.
The sanction was made under the terms of the section 19(1)(a) of the 2000 Act.
Reasons for Sanction
In reaching their decision, the Hearing Panel noted it was obliged under the 2000 Act to impose a sanction where a breach had been found.
The Panel considered the Standards Commission’s Policy on the Application of Sanction. In reaching its decision, the Hearing Panel noted, in mitigation, that the Respondent, Councillor Cassidy, had co- operated fully with the investigative and Hearing processes. The Panel further noted the letters of support lodged on behalf of the Respondent and accepted that they testified to him being a hard- working and diligent local councillor.
PagePage 162 8 of of 9 164
COUNCILLOR COLIN CASSIDY MIDLOTHIAN COUNCIL
The Panel considered, however, that the requirement to apply the objective test is an integral part of the Councillors’ Code as it ensures transparency in decision-making. This is because it ensures that councillors do not just consider whether their interests could affect their discussions and decision-making, but also requires them to think about how a member of the public, with knowledge of the relevant facts, could reasonably perceive any such an interest. The Panel emphasised that it was a councillor’s personal responsibility to be aware of the provisions in the Code, to ensure that he or she complied with them and, noted that, in this respect, the Respondent had been negligent.
The Panel was nevertheless of the view that the Respondent’s conduct did not warrant a more severe sanction. This was because it was satisfied that, in this case, that there was no personal gain to the Respondent and there was no evidence the breach was anything other than a one-off incident. The Panel further noted that there was no question of the Respondent having tried to conceal his relationship with either the tennis club or the objectors.
RIGHT OF APPEAL
The Respondent has a right of appeal in respect of this decision, as outlined in Section 22 of the Ethical Standards in Public Life etc. (Scotland) Act 2000, as amended.
Date: 15 July 2019
Professor Kevin Dunion Chair of the Hearing Panel
PagePage 163 9 of of 9 164
Page 164 of 164