CAIRNGORMS NATION­AL PARK AUTHORITY

Form­al Board Paper 2 — 29^th March 2019

1. CAIRNGORMS NATION­AL PARK AUTHORITY

FOR DECISION

Title: ²⁰¹⁹⁄₂₀ BUDGET AND OPER­A­TION­AL PLAN

Pre­pared by: DAV­ID CAMER­ON, DIR­ECT­OR OF COR­POR­ATE SERVICES

Pur­pose

This paper sets out the Authority’s fin­an­cial pos­i­tion for the ²⁰¹⁹⁄₂₀ fin­an­cial year. The paper presents the pro­posed fin­an­cial alloc­a­tions for ²⁰¹⁹⁄₂₀ for core income and expendit­ure, togeth­er with inten­ded oper­a­tion­al plan invest­ment. The paper seeks Board endorse­ment of the budget and Oper­a­tion­al Plan for ²⁰¹⁹⁄₂₀ as an appro­pri­ate deploy­ment of resources to work towards deliv­ery of the Authority’s adop­ted Cor­por­ate Plan objectives.

Recom­mend­a­tions

The Board is reques­ted to:

a) Review the pro­posed budget and resource alloc­a­tions for ²⁰¹⁹⁄₂₀; b) Con­sider wheth­er the pro­posed deploy­ment of resources poses any per­ceived risks to the achieve­ment of the Cor­por­ate Plan object­ives by 2022 and agree any risks posed for sub­sequent action by the Chief Exec­ut­ive and Man­age­ment Team; c) Sub­ject to actions that may be required to address any iden­ti­fied risks, endorse the budget and oper­a­tion­al plan pro­pos­als for ²⁰¹⁹⁄₂₀.

2. ²⁰¹⁹⁄₂₀ BUDGET AND OPER­A­TION­AL PLAN – FOR DECISION

Stra­tegic Context

1. The Author­ity, as a Non-Depart­ment­al Pub­lic Body (NDPB) oper­ates with­in the con­text of a Man­age­ment State­ment estab­lished by Scot­tish Gov­ern­ment. The Man­age­ment State­ment sets out the respect­ive respons­ib­il­it­ies of Scot­tish Min­is­ters, the Scot­tish Gov­ern­ment Port­fo­lio Account­able Officer, the Scot­tish Gov­ern­ment Spon­sor Team, the Con­vener and Depute Con­vener of the Board, the Board as a whole and the Chief Exec­ut­ive as Account­able Officer as they relate to the stra­tegic dir­ec­tion, oper­a­tion and fin­an­cial account­ab­il­ity of the Authority.

2. The Board is respons­ible with­in the terms of the Man­age­ment State­ment for estab­lish­ing the over­all stra­tegic dir­ec­tion of the NDPB with­in the policy, plan­ning and resources frame­work determ­ined by the Scot­tish Min­is­ters. The Board achieves this aim through determ­in­ing the dir­ec­tion and con­tent of the Nation­al Park Part­ner­ship Plan (NPPP) and there­after the Authority’s own Cor­por­ate Plan which sets out the CNPA’s dir­ect con­tri­bu­tions to deliv­ery of NPPP object­ives. The Authority’s cur­rent Cor­por­ate Plan was approved by the Board and Scot­tish Min­is­ters in March 2018: https://​cairngorms​.co​.uk/​a​u​t​h​o​r​i​t​y​/​c​o​r​p​o​r​a​t​e​-​p​l​a​n​s​/​c​o​r​p​o​r​a​t​e​-​plan/

3. Deliv­ery against the Cor­por­ate Plan object­ives is repor­ted on twice each year, high­light­ing achieve­ments and excep­tions, per­form­ance against tar­gets and key per­form­ance indic­at­ors and wider stra­tegic risk man­age­ment. The first such deliv­ery report on the cur­rent 2018 to 2022 Cor­por­ate Plan was presen­ted to the Board at its meet­ing in Decem­ber 2018: https://​cairngorms​.co​.uk/​m​e​e​t​i​n​g​/​b​o​a​r​d​-2018 – 12-07/

4. In terms of annu­al budget­ing, the Man­age­ment State­ment sets out the role for the Board as hav­ing cor­por­ate respons­ib­il­ity for pro­mot­ing the effi­cient and effect­ive use of staff and oth­er resources by the NDPB, and ensur­ing that any stat­utory or admin­is­trat­ive require­ments for the funds fall­ing with­in the stew­ard­ship of the NDPB are com­plied with.

5. The Chief Exec­ut­ive, as Account­able Officer, is per­son­ally respons­ible for estab­lish­ing the Authority’s Cor­por­ate and Oper­a­tion­al Plans in the light of Scot­tish Minister’s wider stra­tegic aims. The Chief Exec­ut­ive is also respons­ible under the terms of the Man­age­ment State­ment for estab­lish­ing a robust per­form­ance man­age­ment frame­work which sup­ports the achieve­ment of the NDPB’s aims and object­ives as set out in the cor­por­ate and oper­a­tion­al plans; and which enables full per­form­ance report­ing to the Board, the spon­sor Dir­ect­or­ate and the wider pub­lic. This lat­ter respons­ib­il­ity is giv­en effect by the twice yearly Cor­por­ate Per­form­ance report referred to above, com­ple­men­ted by reports on NPPP deliv­ery and reg­u­lar updates on deliv­ery mat­ters to the Board.

6. Over­all, the budget developed must of course be cap­able of hav­ing pro­posed expendit­ure fin­anced by avail­able income in the year with a bal­anced year-end out­turn targeted.

7. As such, the exer­cise of annu­al budget and oper­a­tion­al plan estab­lish­ment in the Author­ity as an NDPB is one of:

   a) The Chief Exec­ut­ive, sup­por­ted by the Man­age­ment Team and wider staff group, estab­lish­ing a deploy­ment of resources most appro­pri­ate to deliv­ery over the course of the year toward achiev­ing the stra­tegic object­ives set by the Board in the Cor­por­ate Plan; b) Review by the Board to ensure that the pro­posed deploy­ment of resources appears appro­pri­ate as a means of achiev­ing stra­tegic objectives.

Stra­tegic Policy Considerations

1. The ²⁰¹⁹⁄₂₀ budget is set with­in wider pub­lic sec­tor fin­an­cial policy in Scot­land, which con­tin­ues to estab­lish a fin­an­cial envir­on­ment in which pub­lic fin­ances are rel­at­ively restric­ted. As such, there are clear dir­ec­tions to the Author­ity to main­tain expendit­ure with­in avail­able resource levels and deliv­er a bal­anced out-turn position.

2. The Author­ity also con­tin­ues to adopt the Scot­tish Government’s ​“No Com­puls­ory Redund­ancy Policy” which is an ele­ment of the wider Pubic Sec­tor Pay Policy for NDPBs. While the Author­ity would not wish to use redund­an­cies as a budget man­age­ment tool, and has pos­it­ively taken for­ward the No Com­puls­ory Redund­ancy (NCR) Policy, this does mean that a long term view must be taken around staff employ­ment levels and the poten­tial impact of recruit­ment not only in the year of recruit­ment but also over sub­sequent years’ fin­an­cial com­mit­ment levels and budget and staff deploy­ment flexibilities.

3. Staff are of course a key ele­ment in our resource mix. Almost all staff and pro­jects oper­ate across the three areas of our Cor­por­ate Plan, Con­ser­va­tion, Vis­it­or Exper­i­ence and Rur­al Devel­op­ment, and in turn the Park aims. This also goes for all cor­por­ate and com­mu­nic­a­tions staff who sup­port across all three.

4. Sig­ni­fic­ant increases to the rates of employ­ers’ con­tri­bu­tions to the Civil Ser­vice Pen­sion Scheme for ²⁰¹⁹⁄₂₀ have also exacer­bated the fin­an­cial impact of recruit­ment of staff as opposed to oth­er means of deliv­er­ing stra­tegic objectives.

5. The Author­ity has sought over recent years to max­im­ise the impact of our avail­able resources through invest­ing funds to secure lever­age of extern­al fund­ing into the Cairngorms Nation­al Park. Par­tic­u­larly suc­cesses have been secured with EU LEAD­ER fin­ance and Nation­al Lot­tery Her­it­age Funds for The Moun­tains and The People Pro­ject, the Tomin­toul and Glen­liv­et Land­scape Part­ner­ship, Badenoch Great Place Scheme and more recently the Car­rbridge Caper­cail­lie Pro­ject. Our ana­lys­is in July 2018 indic­ated that invest­ment of just over £1 mil­lion in Cairngorms NPA fund­ing had secured almost £12 mil­lion of inward invest­ment to the Cairngorms Nation­al Park. The pri­or­ity to ensure ongo­ing flex­ib­il­ity in resource deploy­ment to allow fin­an­cial invest­ment to lever­age sig­ni­fic­ant addi­tion­al inward invest­ment remains a key ele­ment of the Man­age­ment Team’s budget and resource plan­ning strategy.

Stra­tegic Risk Management

1. The Board con­sidered the most recently pub­lished ver­sion of the stra­tegic risk register at its meet­ing in Decem­ber 2018. https://​cairngorms​.co​.uk/​r​e​s​o​u​r​c​e​/​d​o​c​s​/​b​o​a​r​d​p​a​p​e​r​s​/​0​7​1​2​2​0​1​8​/​1​8​1​2​0​7​C​N​P​A​B​d​P​a​p​e​r​9​A​n​n​e​x​3​S​t​r​a​t​e​g​i​c​R​i​s​k​R​e​g​i​s​t​e​r​V​1​.​0.pdf

2. Risk A1 — Resources: pub­lic sec­tor fin­ances con­strain capa­city to alloc­ate suf­fi­cient resources to deliv­er cor­por­ate plan is seen to be mit­ig­ated over ²⁰¹⁹⁄₂₀ on the basis of the pro­pos­als set out in this paper.

3. A new risk that ​“fail­ure to effect­ively man­age staff­ing num­bers in the long term will reduce the capa­city for the Author­ity to deploy adequate fin­an­cial invest­ment toward pri­or­ity pro­jects in the Nation­al Park” has been added to the stra­tegic risk register fol­low­ing con­sid­er­a­tion of the risks around Work­force Man­age­ment by the Staff­ing and Recruit­ment Com­mit­tee in Feb­ru­ary 2019 and the Audit and Risk Com­mit­tee in March 2019. The paper today high­lights aware­ness, man­age­ment and mit­ig­a­tion of this risk through management’s approach to defer­ral of two planned recruit­ments while stra­tegic fin­an­cial man­age­ment issues and man­age­ment of longer term con­trac­tu­al pos­i­tions is resolved.

4. It is also appro­pri­ate to recog­nise the stra­tegic risk ​“A3 — Gov­ernance: changes to Board mem­ber­ship cause mis­sion drift away from agreed pri­or­it­ies”, in the con­text of this paper, giv­en that budgets and Oper­a­tion­al Plans are to deliv­er against exist­ing, agreed Cor­por­ate Plan pri­or­it­ies. Board con­sid­er­a­tion of mat­ters set out in this paper should lead to mit­ig­a­tion of this stra­tegic risk, which has been set at an escal­ated or high rat­ing giv­en changes to Board com­pos­i­tion over the course of the last 6 months.

Implic­a­tions

1. The core budget and Oper­a­tion­al Plan pro­pos­als set out in this paper present a broadly bal­anced budget deliv­er­ing across all three areas of the Cor­por­ate Plan, and address­ing all stra­tegic pri­or­it­ies. The budget does present a rel­at­ively small excess of expendit­ure over income at the out­set of the year. This is a fairly stand­ard open­ing pos­i­tion for the Authority’s budget as exper­i­ence indic­ates that there is typ­ic­ally a small amount of slip­page in deliv­ery plans.

2. There are no excep­tions to high­light – there are no risks anti­cip­ated by Man­age­ment Team that the resource deploy­ment pro­posed will give rise to short­com­ings in achieve­ment of Cor­por­ate Plan targets.

3. The budget pos­i­tion is in line with the anti­cip­ated resource deploy­ment set out in the Authority’s Cor­por­ate Plan 2018 ‑2022 (page 12).

Deliv­ery of Outcomes

1. The Author­ity for cor­por­ate plan­ning and oper­a­tion­al plan­ning reas­ons divides its work into Con­ser­va­tion, Vis­it­or Exper­i­ence and Rur­al Devel­op­ment. This allows us to have a sys­tem to man­age both staff and resources and give people a clear indic­a­tion of what the organ­isa­tion does.

2. How­ever, it is also clear that people some­times mis­in­ter­pret this to fur­ther cer­tain points of view. Almost all staff and pro­jects oper­ate across these three areas and in turn the Park aims. This also goes for all cor­por­ate and com­mu­nic­a­tions staff who sup­port across all three.

3. To illus­trate this there are 4 examples below linked to lines in the oper­a­tion­al plan that show the com­plex­ity and deliv­ery across all the out­comes by the work of the CNPA.

   a) Tomin­toul and Glen­liv­et Land­scape Part­ner­ship – The staff and the fund­ing for this is under Con­ser­va­tion. How­ever, this includes fund­ing and staff time on the upgrade of the Spey­side Way exten­sion. That is a vis­it­or exper­i­ence area of work that also trans­lates into tour­ism and eco­nom­ic devel­op­ment. The dark skies work is con­ser­va­tion (redu­cing light pol­lu­tion), vis­it­or exper­i­ence (being done mainly by volun­teers) and rur­al devel­op­ment (attract­ing more people to spend more time in the area with loc­al busi­nesses). b) Forestry Man­age­ment – Forest expan­sion is a pri­or­ity for the CNPA and we have a tar­get of 5000ha over 5 years. This is obvi­ously a big con­ser­va­tion area of work for CNPA staff being flagged up in Cairngorms Nature. How­ever, a 200ha nat­ive wood­land in our tar­get area would mean the landown­er would receive £720,000 in grant pay­ments and oth­er grants are avail­able for deer fen­cing etc. That wood­land as well as deliv­er­ing our con­ser­va­tion out­comes, is also deliv­er­ing vis­it­or exper­i­ence (amen­ity and recre­ation) and rur­al devel­op­ment (wood products, tim­ber etc.). c) Loc­al Devel­op­ment Plan — The LDP is our main tool for rur­al devel­op­ment in the Nation­al Park. This guides where devel­op­ment goes and sets our hous­ing land sup­ply tar­gets etc. It is also a tool to pro­tect and enhance nat­ur­al and cul­tur­al her­it­age with polices cov­er­ing all these areas. The pre­sump­tion against hill­tracks in open moor­land is a way to pro­tect land­scapes and wild land which are both con­ser­va­tion pri­or­it­ies. d) Volun­teer Rangers – The Volun­teer Rangers pro­gramme is part of the vis­it­or exper­i­ence team. Volun­teer rangers deliv­er con­ser­va­tion pro­jects, access pro­jects, provide great oppor­tun­it­ies for people to upskill and help deliv­er across com­munit­ies in the Park.

4. The above examples could be done for all the lines in the oper­a­tion­al plan. Some pro­jects we lead, some we sup­port and some are part­ner­ships but look­ing baldly at the fig­ures and com­par­ing spend and staff alloc­a­tion between Con­ser­va­tion, Vis­it­or Exper­i­ence & Rur­al Devel­op­ment does not give the full pic­ture of what is being delivered for con­ser­va­tion, vis­it­or exper­i­ence and rur­al devel­op­ment by Park staff and fund­ing. The breadth and depth of what we do can be found in our cor­por­ate plan report­ing, the CEO Report and the annu­al NPPP review.

Suc­cess Measures

1. The suc­cess of ²⁰¹⁹⁄₂₀ budget and Oper­a­tion­al Plan pro­pos­als in deliv­er­ing against stra­tegic Cor­por­ate Plan object­ives will con­tin­ue to be repor­ted through the twice-yearly Cor­por­ate Per­form­ance reports to the Board, which include ana­lyses of achieve­ment against Key Per­form­ance Indicators.

2. Mon­it­or­ing against the deliv­ery of the ²⁰¹⁹⁄₂₀ budget itself will be under­taken on a reg­u­lar basis by the Board’s Fin­ance and Deliv­ery Com­mit­tee and also on an ongo­ing basis by the Man­age­ment Team.

Sup­port­ing Information

Back­ground

1. The forth­com­ing year, ²⁰¹⁹⁄₂₀ rep­res­ents the second year of the Authority’s Cor­por­ate Plan for 2018 to 2022. Con­sequently, there is a degree of con­tinu­ation of resource alloc­a­tion and invest­ment across activ­it­ies in the Oper­a­tion­al Plan as we con­tin­ue to pro­gress exist­ing stra­tegic object­ives estab­lished by the Cor­por­ate Plan.

2. We also con­tin­ue to work with oth­er organ­isa­tions to estab­lish align­ment of our resource invest­ment against the Scot­tish Government’s wider port­fo­lio outcomes.

3. At the time of writ­ing this paper, we are yet to receive con­firmed fig­ures on grant-in-aid alloc­a­tion for the com­ing year from our Spon­sor Team at Scot­tish Gov­ern­ment. All grant fig­ures are there­fore based on fig­ures included in the budget sub­mit­ted to Scot­tish Parliament.

4. The fol­low­ing sec­tions of the paper go on to dis­cuss the spe­cif­ic issues around income, ​“core” run­ning costs and Oper­a­tion­al Plan invest­ment alloc­a­tions. The budget estim­ates have pre­vi­ously been con­sidered by the Fin­ance and Deliv­ery Com­mit­tee at its meet­ing in Feb­ru­ary 2019 and also dur­ing devel­op­ment stages by the Board in Feb­ru­ary 2019. Aspects of the budget pro­vi­sions as they relate to staff pay and poten­tial awards with­in the Scot­tish Gov­ern­ment Pub­lic Sec­tor Pay Policy for ²⁰¹⁹⁄₂₀ have been con­sidered by the Staff­ing and Recruit­ment Com­mit­tee meet­ing in Feb­ru­ary 2019. Under­pin­ning strands of deliv­ery work being under­taken by the Author­ity and con­tinu­ing into the com­ing fin­an­cial year have been set out in both the Chief Executive’s updates to each Board meet­ing and also in the Cor­por­ate and Nation­al Park Plan Update reports presen­ted to Board.

²⁰¹⁹⁄₂₀ Budget: Income

1. The Authority’s expec­ted cash-based income for ²⁰¹⁹⁄₂₀ com­prises primar­ily a rev­en­ue grant of £4.565m (pri­or year £4.564m) and cap­it­al grant of £0.240m (pri­or year £0.200m), giv­ing a total resource alloc­a­tion totalling £4.805m from Scot­tish Government.

2. We are also budget­ing for a fur­ther £0.175 mil­lion income from oth­er sources includ­ing plan­ning fees, pro­ject con­tri­bu­tions and oth­er gen­er­ated income.

3. Total budgeted, cash-based income for the com­ing year, ²⁰¹⁸⁄₁₉, is there­fore £4.980m. This rep­res­ents fund­ing avail­able to the Author­ity to sup­port its on-going activ­it­ies and Oper­a­tion­al Plan spend­ing plans.

4. Many of the activ­it­ies led by the Author­ity gen­er­ate fin­an­cial con­tri­bu­tions from a wide range of part­ners. There­fore, the Authority’s total income and turnover by the end of the com­ing year is likely to be high­er than this estim­ate. As these fin­an­cial con­tri­bu­tions are typ­ic­ally tied to spe­cif­ic pro­jects, the Park Authority’s dis­cre­tion­ary income for budget alloc­a­tion to core and oper­a­tion­al plan activ­it­ies in ²⁰¹⁹⁄₂₀, remains as £4.980m.

Wider Fund­ing Con­text with­in Cairngorms Nation­al Park

1. As we repor­ted to Board in present­ing pre­vi­ous years’ budget pro­pos­als, the work of staff and organ­isa­tion­al sup­port from the Author­ity over the course of the last years has res­ul­ted in some sig­ni­fic­ant suc­cesses for the Author­ity and its part­ners in secur­ing size­able levels of third party invest­ment into the Nation­al Park.

2. The com­ing year will involve the Author­ity in the con­tin­ued sup­port for deliv­ery of the Tomin­toul and Glen­liv­et Land­scape Part­ner­ship Pro­ject. The Moun­tains and the People Pro­ject (Out­door Access Trust for Scot­land (OATS) as lead deliv­ery organ­isa­tion) is now near the com­ple­tion of its fourth year of full deliv­ery with a num­ber of moun­tain path routes com­pleted in both Cairngorms and Loch Lomond and the com­ple­tion of two cohorts of train­ing deliv­ery in the Cairngorms, togeth­er with deliv­ery of the volun­teer­ing pro­gramme. Cairngorms LEAD­ER (Cairngorms Trust as lead deliv­ery organ­isa­tion) has had its third year of fund­ing decisions, issu­ing grant awards and with the early pro­jects now hav­ing com­pleted. Col­lect­ively, across key pro­jects, we have estim­ated that these part­ner­ship ini­ti­at­ives will secure total invest­ment in the Cairngorms Nation­al Park from these pro­grammes of activ­ity of £12 mil­lion over the 5 years from ²⁰¹⁵⁄₁₆ from an invest­ment of £1 mil­lion of the Authority’s resources. The range of lever­age into the Cairngorms Nation­al Park is illus­trated in Annex 2 to this paper.

3. The Man­age­ment Team also remains focused on deliv­ery of effi­ciency sav­ings on expendit­ure, in line with Scot­tish Government’s budget tar­gets of 3% annu­al sav­ings. We repor­ted to the Fin­ance and Deliv­ery Com­mit­tee high­light­ing our achieve­ment of this tar­get most recently in Octo­ber 2018. This report can be accessed at: https://​cairngorms​.co​.uk/​r​e​s​o​u​r​c​e​/​d​o​c​s​/​b​o​a​r​d​p​a​p​e​r​s​/​1​2​1​0​2​0​1​8​/​1​8​1​0​1​2​F​i​n​a​n​c​e​C​t​t​e​e​P​a​p​e​r​3​E​f​f​i​c​i​e​n​c​i​e​s​T​a​r​g​e​t​s​V​0​.​1.pdf

²⁰¹⁹⁄₂₀ Expendit­ure Budget: Core Budget Summary

1. A sum­mary of core budget estim­ates for the ²⁰¹⁹⁄₂₀ fin­an­cial year is set out in Table One. This table also presents the pro­por­tion of income avail­able to sup­port activ­it­ies accoun­ted for by each aspect of our core expenditure.

(Table One: ²⁰¹⁹⁄₂₀ Core Budget Summary)

	2019⁄20 Budget Pro­pos­als £000	%	2018⁄19 Budget Pro­pos­als £000	%	Change £000
Board Fees	158	3.2%	155	3.3%	3
Staff Salar­ies	2,965	59.5%	2,817	59.1%	148
Oth­er Board and Staff Costs	175	3.5%	200	4.2%	-25
Office Run­ning Costs	354	7.1%	386	8.1%	-32
IT and Pro­fes­sion­al Support	153	3.1%	178	3.7%	-25
Total ​“cash” based expenditure	3,805	76.4%	3,736	78.4%	69
Depre­ci­ation of fixed assets	110		90		20
Total expendit­ure	3,915		3,826		89

²⁰¹⁹⁄₂₀ Budget and Oper­a­tion­al Plan — Staffing

1. The Authority’s staff­ing levels rep­res­ent one of the key fin­an­cial man­age­ment tasks in bal­an­cing fin­an­cial invest­ment between core areas of expendit­ure, and pro­ject invest­ment through the Oper­a­tion­al Plan.

2. Man­age­ment Team has con­tin­ued to main­tain scru­tiny of staff­ing levels over the course of the last year, and par­tic­u­larly over vacancy man­age­ment and any pro­posed recruit­ment. Our cur­rent fin­an­cial mon­it­or­ing pos­i­tion presen­ted to Fin­ance Com­mit­tee in Feb­ru­ary 2019 indic­ates that the final out­turn pos­i­tion for ²⁰¹⁸⁄₁₉ will be around £120,000 lower on staff­ing than budgeted as a res­ult of vacancy man­age­ment in the year, rep­res­ent­ing a third year on year reduc­tion in core staff­ing pay bill against budget over the course of the year. The staff budget fig­ure included in Table One includes an estim­ate of vacancy sav­ings to be achieved again in ²⁰¹⁹⁄₂₀. Two vacant posts are cur­rently being held, with recruit­ment deferred, in order to bal­ance the budget for ²⁰¹⁹⁄₂₀ and also as a means of address­ing wider long-term work­force man­age­ment risks. Organ­isa­tion­al struc­tures also con­tin­ue to be reviewed whenev­er vacan­cies arise to determ­ine wheth­er there are oppor­tun­it­ies to recruit to lower graded posts than previously.

3. The budget estim­ates provide for the impact of poten­tial pay awards under the para­met­ers of the Scot­tish Government’s Pub­lic Sec­tor Pay Policy ²⁰¹⁹⁄₂₀. The Board’s Staff­ing and Recruit­ment Com­mit­tee con­sidered the Man­age­ment Team’s pro­posed pay pro­pos­als for the com­ing year at its meet­ing in Feb­ru­ary 2019. Pay pro­pos­als seek to imple­ment Scot­tish Government’s pub­lic sec­tor pay policy in full, of a 3% increase for all staff earn­ing up to £36,500 and a 2% increase for all oth­er staff. Addi­tion­ally, a 3% pro­gres­sion for the two-thirds of staff still pro­gress­ing through their pay bands and a 1% non-con­sol­id­ated award for those at the top of their pay bands seeks to ensure that all pub­lic sec­tor staff achieve an at or above infla­tion pay award in ²⁰¹⁹⁄₂₀. The pro­gres­sion value for staff mov­ing through pay bands also seeks to respond to the Authority’s com­mit­ment to achieve tar­get jour­ney times to the top of pay bands for staff, after a num­ber of years of pay awards where pro­gres­sion rates have been restric­ted and achieve­ment of jour­ney times put at some risk.

4. The Author­ity also plans to extend its No Com­puls­ory Redund­ancy (NCR) policy for a fur­ther year through ²⁰¹⁹⁄₂₀, again in line with Scot­tish Gov­ern­ment guid­ance. Man­age­ment team also con­tin­ues to con­sider policy devel­op­ment sup­port­ing effect­ive organ­isa­tion­al oper­a­tions while afford­ing enhanced work / life bal­ance oppor­tun­it­ies for our staff group. The Author­ity being selec­ted as a final­ist in the ​“Scot­land Fam­ily Friendly Work­ing” evid­ences our suc­cess in devel­op­ing the non-pay ele­ments of our staff employ­ment terms and con­di­tions. Our man­age­ment of the staff resource, in the con­text of the NCR Policy, does cre­ate a com­plex struc­ture of per­man­ent and fixed term con­tracts, with some per­man­ent staff seconded into oth­er roles and tem­por­ary staff back-filling their per­man­ent roles.

5. The sig­ni­fic­ant increase in employ­ers’ con­tri­bu­tions to the Civil Ser­vice Pen­sion Scheme for the ²⁰¹⁹⁄₂₀ fin­an­cial year has been a sig­ni­fic­ant impact on the budget pos­i­tion for the com­ing year. Aver­age employ­ers’ con­tri­bu­tions have ris­en from 21% of salary in ²⁰¹⁸⁄₁₉ to 27% of salary for ²⁰¹⁹⁄₂₀, with a con­sequent estim­ated increased cost of £0.155 mil­lion for ²⁰¹⁹⁄₂₀. While noti­fic­a­tion of an increase was received from UK Treas­ury in Autumn 2018, the actu­al scale of the increase was only con­firmed in Feb­ru­ary 2019.

6. Our staff group con­tin­ues to provide a sig­ni­fic­ant resource invest­ment into deliv­ery of both Cor­por­ate and Nation­al Park Part­ner­ship Plan (NPPP) pri­or­it­ies. The Oper­a­tion­al Plan set out in Annex 1 to this paper and con­sidered in more detail in a sub­sequent sec­tion of this paper high­lights the amount of staff resource inves­ted in each aspect of our planned activ­it­ies for ²⁰¹⁹⁄₂₀.

7. The Author­ity also con­tin­ues to deliv­er a key sup­port and facil­it­a­tion role in major pro­jects, through its will­ing­ness to take on the role of lead employ­er for staff deliv­er­ing major pro­jects. Hence we act as the employ­er and Account­able Body for LEAD­ER staff under­tak­ing sup­port to the Cairngorms LAG; we have employed an extern­ally fun­ded Peat­lands Pro­ject Officer post; and act as the employ­er for a num­ber of posts engaged in the deliv­ery of the Tomin­toul and Glen­liv­et Land­scape Part­ner­ship Pro­ject. The breadth of our sup­port for NPPP deliv­ery and range of our inter­ac­tions through dir­ect staff employ­ment, host­ing staff on behalf of pro­ject part­ner­ships and sup­port­ing deploy­ment of resource through third parties is illus­trated in Table Two.

(Table Two: Range of Deliv­ery Sup­port at March 2019)

CNPA Cor­por­ate Plan area	No of core CNPA staff	No of CNPA pro­ject staff	Posts sup­por­ted by Op Plan
Con­ser­va­tion	12.9	TG&LP — 2.8 FTE Caper­cail­lie — 2 FTE Peat­land — 1.9 FTE ECMP — 0.6 FTE	Catch­ment Part­ner­ships Cairngorms Nature Projects
Vis­it­or Experience	9.6	LDR Officer = 1 FTE	Rangers
Rur­al Development	14	LEAD­ER — 3.4 FTE	Com­munity Devel­op­ment Officers
Com­mu­nic­a­tions	5.2		LEAD­ER Programme
Cor­por­ate Services	17		Roles Estab­lished

1. It should be noted with regard to work­force man­age­ment that the oper­a­tion of the Authority’s (and Scot­tish Government’s) no com­puls­ory redund­ancy policy cre­ates lim­it­a­tions on man­age­ment of staff num­bers, and a depend­ency on nat­ur­al turnover to cre­ate oppor­tun­it­ies to review staff invest­ment. The pos­it­ive aspects of this policy are of course around enhance­ments to staff mor­ale through job secur­ity over a peri­od of dif­fi­cult eco­nom­ic circumstances.

Oth­er Core Costs

1. The final­isa­tion of the office exten­sion pro­ject rep­res­ents a fur­ther increase in rev­en­ue budgets for ²⁰¹⁹⁄₂₀, as anti­cip­ated in our stra­tegic fin­an­cial planning.

2. The rev­en­ue cost impact has been alle­vi­ated to some extend through the capa­city to alloc­ate some facil­it­ies expendit­ure against the increase in the Authority’s cap­it­al alloc­a­tion for the year ahead. We are also seek­ing to achieve sav­ings in some oth­er areas of facil­it­ies expendit­ure in deliv­er­ing effi­ciency tar­gets and man­aging budget commitment.

3. Sim­il­arly, the alloc­a­tion of £40,000 of cap­it­al alloc­a­tion to sup­port IT renew­al and replace­ment has allowed the over­all rev­en­ue call for IT and Pro­fes­sion­al sup­port to reduce com­pared with last year’s ini­tial budget value.

²⁰¹⁹⁄₂₀ Expendit­ure Budget: Oper­a­tion­al Plan

1. The Oper­a­tion­al Plan for ²⁰¹⁹⁄₂₀ sets out the Authority’s anti­cip­ated con­tri­bu­tions to a range of activ­it­ies over the course of the year. Total fin­an­cial invest­ment in Oper­a­tion­al Plan activ­it­ies cur­rently cov­ers £1.213m in invest­ment pro­pos­als. This value of invest­ment is slightly above the planned level of invest­ment set out in the Cor­por­ate Plan. The Oper­a­tion­al Plan also details the major lines of activ­ity that are planned for the year which will require invest­ment of staff resources alone. Pro­posed areas of invest­ment of both fin­an­cial and staff resources are set out in Annex I to this paper.

2. Updates on deliv­ery inten­tions and on the res­ults of activ­it­ies will con­tin­ue to be presen­ted to the Board in vari­ous policy papers and updates.

3. A sum­mary of the Oper­a­tion­al Plan total invest­ment pro­pos­als across ser­vice areas is set out in Table Three.

(Table Three: Oper­a­tion­al Plan Alloc­a­tions ²⁰¹⁶⁄₁₇ to ²⁰¹⁹⁄₂₀ against Cor­por­ate Plan)

Oper­a­tion­al Plan	19⁄20 £000	18⁄19 £000	17⁄18 £000
Con­ser­va­tion	203	210	160
Vis­it­or Experience	549	548	400
Rur­al Development	298	314	301
Cor­por­ate Services	102	105	70
Com­mu­nic­a­tions	61	66	63
Total Oper­a­tion­al Plan Provisions	1,213	1,243	994
(Over) under Pro­gramme Level	(32)	(15)	(4)

Oper­a­tion­al Plan Commitments

1. As set out in the intro­duc­tion to this paper, the budget and oper­a­tion­al plan fol­lows on from many strands of activ­ity ini­ti­ated over the last years.

2. Con­sequently, the level of Oper­a­tion­al Plan com­mit­ments cur­rently stands at a rel­at­ively high pro­por­tion of the total planned invest­ment, at £0.604 mil­lion (49.8%) of total. This pos­i­tion does rep­res­ent a reduc­tion in com­mit­ment from the ²⁰¹⁸⁄₁₉ level of 58%. The corol­lary of this level of com­mit­ment is the high value of fund­ing levered into the Cairngorms through extern­al fund­ing secured through our com­mit­ments. The lines of activ­ity as asso­ci­ated invest­ment com­mit­ted through pre­vi­ous Board and man­age­ment action are high­lighted in Annex 1.

²⁰¹⁹⁄₂₀ Budget Summary

1. The sum­mary budget pos­i­tion for ²⁰¹⁹⁄₂₀ is set out in Table Four.

(Table Four: ²⁰¹⁹⁄₂₀ Budget Summary)

	2019⁄20 Budget Fore­cast (£m)	2018⁄19 Budget Fore­cast (£m)
Total Income	4.980	4.964
Less cap­it­al alloc­a­tions for facil­it­ies and IT	0.060	-
Net Income	4.920	4.964
Expendit­ure
Core Budgets	3.805	3.736
Oper­a­tion­al Plan	1.213	1.243
Total Expendit­ure	5.018	4.979
Less for­ward phasing	0.065	-
Expendit­ure fall­ing against income in year	4.953	4.979
Net Expendit­ure (neg­at­ive) / Income (pos­it­ive)	-0.033	-0.015

Note: Sens­it­iv­ity Ana­lys­is — Move­ment by 1% in: | | £000 | £000 | | — — — — — — — — — — — — | — — — -| — — — -| | Pay awards | 35 | 30 | | Infla­tion­ary price increases | 20 | 18 | | Grant in aid move­ments | 47 | 47 |

1. As Oper­a­tion­al Plan invest­ment pro­pos­als become increas­ingly cer­tain and require less lead time in reach­ing agree­ment with part­ners, there is less slip­page in pro­pos­als and fin­an­cial com­mit­ment. There is, how­ever, a slight increase in over-pro­gram­ming at the out­set of the ²⁰¹⁹⁄₂₀ budget than in pre­vi­ous years. Oper­a­tion­al Plans provide budgeted sums for some invest­ment pro­pos­als in the com­ing year where there is a degree of uncer­tainty on require­ments. The small level of over-pro­gram­ming accom­mod­ates some anti­cip­ated fluc­tu­ation in these require­ments in the year. These budget require­ments in par­tic­u­lar will be mon­itored closely over the first half of the com­ing year to ensure we again reach a bal­anced budget position.

2. Our fin­an­cial tar­get remains as agreed in pre­vi­ous years to work toward max­im­ising use of resources avail­able in the year and to deliv­er a break-even out­turn. We have estab­lished a tar­get range of the out­turn pos­i­tion fall­ing with­in the range of +1% to 2% of total income (i.e. 1% over-spend to 2% under-spend) as being a reas­on­able tar­get range for annu­al out­turn results.

Next Steps

1. The Fin­ance Com­mit­tee will con­tin­ue to be presen­ted with reg­u­lar budget mon­it­or­ing updates over the course of ²⁰¹⁹⁄₂₀ to high­light any move­ments in budget pos­i­tion and to agree any sig­ni­fic­ant in-year revi­sions to budget targets.

2. The Authority’s role as lead or account­able body for the Cairngorms LEAD­ER pro­gramme and Tomin­toul and Glen­liv­et Land­scape Part­ner­ship will con­tin­ue to pose sig­ni­fic­ant pres­sures on our cash flow man­age­ment, with both pro­grammes of work requir­ing the Author­ity to lead in mak­ing pay­ments on behalf of the col­lect­ive part­ner­ships and sub­sequently reclaim­ing these funds. Our treas­ury man­age­ment activ­ity over the course of the year will there­fore have added focus.

3. The Fin­ance Man­ager has also worked with col­leagues to estab­lish budget pro­files for the year and determ­ine a mon­it­or­ing and review pro­cess in order that we are able to detect any slip­page or alter­a­tions in expendit­ure inten­tions at an early a point in the pro­cess as pos­sible. These pro­files will be adap­ted for any changes made in the cur­rent budget pro­pos­als fol­low­ing on from con­sid­er­a­tion of the pos­i­tion by the Com­mit­tee, man­age­ment and Board. Budget pro­files developed for final approved budget alloc­a­tions will be used to present future mon­it­or­ing reports to Fin­ance and Deliv­ery Com­mit­tee and to mon­it­or pat­terns of fin­an­cial com­mit­ment by the Authority.

Dav­id Cameron 19 March 2019 davidcameron@​cairngorms.​co.​uk