CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

CAIRNGORMS NATION­AL PARK AUTHORITY

FIN­ANCE & DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: FIN­ANCE MON­IT­OR­ING: 7 MONTHS TO 31 OCTO­BER, 2020

Pre­pared by: DANIEL RAL­PH, FIN­ANCE MAN­AGER DAV­ID CAMER­ON, DIR­ECT­OR OF COR­POR­ATE SERVICES

Pur­pose

This paper presents a sum­mary review of income and expendit­ure for the 7 months to 31 Octo­ber, 2020.

The paper also reviews the budget pos­i­tion with a view to con­sid­er­ing wheth­er fur­ther budget real­loc­a­tions are appro­pri­ate at this time.

Recom­mend­a­tions

The Fin­ance & Deliv­ery Com­mit­tee is reques­ted to:

a) Note the out­turn for the 7 months to 31 Octo­ber, 2020; b) Con­sider the ana­lys­is of the fin­an­cial pos­i­tion and cost pres­sures and poten­tial for resource real­loc­a­tions fur­ther to those agreed by the Board in June 2020.

Exec­ut­ive Summary

1. The ana­lys­is of fin­an­cial pos­i­tion over the 7 months to 31 August is con­tained in Annex I. This is a sim­pli­fied man­age­ment account­ing report and cov­ers the 5 main com­pon­ents of the Authority’s oper­a­tions — Core activ­it­ies and Oper­a­tion­al Plan and the 4 extern­ally fun­ded pro­jects: LEAD­ER, the Tomin­toul & Glen­liv­et Land­scape Part­ner­ship (T&GLP), Great Place Badenoch (GPB) and the Caper Frame­work (CF). These extern­ally fun­ded pro­jects are aggreg­ated and included as Pro­jects Costs Recovered (income) and Pro­ject Costs (expendit­ure). Annex I shows the actu­al out­turn pos­i­tion as at 31 Octo­ber 2020, com­pared to a pro­jec­ted pos­i­tion based on a straight line alloc­a­tion of the revised budget for the year over the 7 months.

2. Actu­al and expec­ted income received from pro­jects off­sets the pro­ject costs incurred to date. As such there are no excep­tions to report to Com­mit­tee in terms of poten­tial addi­tion­al fin­an­cial con­sequences arising from the Authority’s fin­an­cial stew­ard­ship of extern­ally fun­ded pro­jects at this time.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

1. Salar­ies and Board fees are broadly on budget, with a small over­spend of £8k against the budget for the 7 months peri­od of £2,056k (actu­al expendit­ure at +0.4% of budget).

2. Core and Oper­a­tion­al Plan expendit­ure remains behind budget, though not unex­pec­ted due to the con­tin­ued impact of cov­id on day to day oper­a­tions impact­ing core expendit­ure, and that Oper­a­tion­al Expendit­ure is tra­di­tion­ally skewed to the last quarter of the fin­an­cial year. Ini­tial adjust­ments to budget to real­loc­ate funds were approved by the Board in June 2020 and these adjust­ments are reflec­ted in Annex 1.

3. Annex I also sets out the spe­cif­ic addi­tion­al and unbudgeted costs of COVID19 related actions taken by the Author­ity, which total £36k at the end of October.

4. Annex I does not include a pro­jec­ted out­turn for the year as it is too early in the fin­an­cial year for such pro­jec­tions. As with pre­vi­ous years, the work­ing assump­tion is that we will man­age the fin­an­cial pos­i­tion as close to a break even pos­i­tion as pos­sible while recog­nising the addi­tion­al work­ing chal­lenges posed in the cur­rent fin­an­cial year by the cov­id-19 pandemic.

Fin­ance Team Operations

1. Des­pite the con­tin­ued cov­id out­break the fin­ance depart­ment has con­tin­ued to oper­ate largely unaf­fected and mostly remotely from Grant­own on Spey.

2. The accounts for the year to 31 March 2020 have now been signed off by the aud­it­or and will be laid before Scot­tish Par­lia­ment in Novem­ber. No changes to the out­turn presen­ted for audit were made.

Fin­ance Mon­it­or­ing for 7 Months to 31 October

Oth­er Resource Income

1. The move­ments from 31 August are:

	31 August	31 Octo­ber	move­ment
	£	£	£
Oth­er income (a)	15,703	28,470	+12,767
Oper­a­tion­al plan* (b)	39,265	43,034	+3,769
Pro­ject activ­ity costs recovered ©	115,515	468,556	+353,041
Staff costs recovered	115,294	190,089	+74,795
	285,777	730,149	+444,372

*In the July mon­it­or­ing report included a recov­ery of costs, £19,256, between the close of the devel­op­ment phase and open­ing of the deliv­ery phase of the NLHF fun­ded Caper­cail­lie Frame­work. These costs and recov­er­ies are now recor­ded as part of pro­ject costs and the ana­lys­is changed to reflect this at 31 October.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

1. Move­ment on Oper­a­tion­al Plan income:

	31 August	31 Octo­ber	move­ment
	£	£	£
LEAD­ER	32,565	66,617	+34,052
T&G LP	73,724	320,788	+247,064
Caper­cail­lie (Devel­op­ment phase)	-	19,256	+19,256
Caper­cail­lie (Deliv­ery phase)	-	36,707	+36,707
Great Place Badenoch	9,226	25,188	+15,962
	115,515	468,556	+353,041

There remains sub­stan­tial expendit­ure due over the next 5 months as T&G LP an LEAD­ER move towards com­ple­tion by 31 March 2021.

1. Staff costs recovered includes monthly recov­er­ies on pro­ject staff and pur­chase of addi­tion­al hol­i­days from staff. As noted in the July mon­it­or­ing paper if fund­ing is made avail­able on the same basis as ¹⁹⁄₂₀ for Peat­land Recov­ery officers addi­tion­al recov­er­ies will be made. At the time of writ­ing this paper we are yet to receive final con­firm­a­tion on levels of Peat­land Pro­gramme recov­er­ies for the cur­rent fin­an­cial year. Con­sequently, Annex I high­lights that staff recov­er­ies are £27k below budget estim­ates at this point in the year. Recent cor­res­pond­ence does indic­ate that Peat­land staff recov­er­ies are likely to be con­firmed with­in the next month or so and there­fore we expect this budget vari­ance to be resolved pri­or to the next report­ing cycle to the Committee.

Board and Staff Costs

1. With the excep­tion of the Peat­land action posts noted in 11, all pro­ject staff costs, have either been recovered or will be recovered for the 7 months. As was repor­ted in the last mon­it­or­ing paper to 31 August staff costs relat­ing to sea­son­al rangers are not repor­ted in the staff costs line but as a sea­son­al ranger cost with­in the oper­a­tion­al plan line for Vis­it­or Ser­vices for man­age­ment account­ing pur­poses and covered by that budget. These staff costs will be reclas­si­fied in the fin­an­cial accounts pur­poses at the year-end.

2. Move­ment on run­ning costs

	31 August	31 Octo­ber	move­ment
	£	£	£
Oth­er board and staff costs	17,760	57,936	+40,176
Facil­it­ies costs	117,384	204,957	+87,573
Cov­id costs	12,325	35,631	+23,306
IT & professional	30,440	60,622	+30,182
	177,909	359,146	+181,237

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

Oth­er Board and Staff Costs

1. Costs related to Board and staff costs con­tin­ue to be lower than budget due to con­tin­ued home work­ing. Costs con­tin­ue to be incurred on the leased car fleet, and motor vehicle insur­ance, and ongo­ing HR and training.

Facil­it­ies Costs / IT and Pro­fes­sion­al Costs

1. Many of the facil­it­ies costs are con­sidered ​“fixed”: rent, rates, and util­it­ies costs. Redec­or­a­tion and wider facil­it­ies work required under con­di­tions of lease is now planned to be car­ried out before the end of the fin­an­cial year.

2. Cov­id related costs con­tin­ue to increase. Costs alloc­ated to this code are those which would not have oth­er­wise been incurred but for cov­id, such as addi­tion­al IT kit to sup­port dis­persed work­ing — tele­phony head­sets, cord­less key­boards and mice sets, port rep­lic­at­ors for des­ig­nated hot desk (all to min­im­ise the risks of cross con­tam­in­a­tion); PPE (masks and san­it­iser) and also move­able sol­ar powered signs for use round the park which account for £21,240 of the costs incurred.

3. At some point, before the year end, the cod­ing of all expendit­ure incurred will be reviewed and if appro­pri­ate recoded to con­sol­id­ate all cov­id related costs in one heading.

4. As noted in the over­view we are explor­ing new ways of work­ing and using digit­al solu­tions more appro­pri­ately and effect­ively. We have estab­lished col­lab­or­a­tion plat­forms and soft­ware to allow access to cent­ral records fil­ing and stor­age sys­tems to con­tin­ue to sup­port remote work­ing. We will con­tin­ue to review evol­u­tion of sys­tems, and are devel­op­ing a revised IT Strategy to dir­ect long term devel­op­ment of IT infra­struc­ture to sup­port wider organ­isa­tion­al development.

Oper­a­tion­al Plan

1. Oper­a­tion­al plan spend con­tin­ues lower than a straight-line pro­file would sug­gest. This is a usu­al pat­tern and exacer­bated by delays in many pro­ject deliv­ery and invest­ment plans as a con­sequence of COV­ID over the first 4 months or so of this year. Heads of Ser­vice are review­ing budgeted spend for the year to reas­sess stress points to the year end to ensure that resources spend is dir­ec­ted to achiev­able out­comes. The typ­ic­al Oper­a­tion­al Plan spend pro­file which is biased towards the last three to four months of the fin­an­cial year will there­fore be more pro­nounced this year, and remain depend­ent on cur­rent and future COV­ID restric­tions until the end of March 2021.

2. Vis­it­or Ser­vices Oper­a­tion­al Plan budgets includes real­loc­a­tion of funds for the sea­son­al rangers, now includ­ing pro­vi­sion for two posts which will con­tin­ue ser­vice deliv­ery and devel­op­ment until the end of the fin­an­cial year.

3. The Board agreed a real­loc­a­tion of resources of £40,000 in June 2020 to offer sup­port to the Tomin­toul and Glen­liv­et Dark Skies Obser­vat­ory pro­ject. The Author­ity has

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

recently learned that this pro­ject will not now pro­gress and this £40,000 alloc­a­tion is there­fore no longer required. The poten­tial real­loc­a­tion of this sum in con­text of oth­er exist­ing cost pres­sures is con­sidered in the final sec­tion of this paper.

Non-Cash

1. Non-cash budget pro­vi­sion from Scot­tish Gov­ern­ment provides for depre­ci­ation of assets and oth­er account­ing pro­vi­sions made neces­sary by the Authority’s oper­a­tions. The budget alloc­ated for ²⁰²⁰⁄₂₁ by Scot­tish Gov­ern­ment is £320,000. This includes the ​“depre­ci­ation” of leased assets covered by IFRS 16, the adop­tion of which has been post­poned for anoth­er fin­an­cial year, until ²⁰²¹⁄₂₂. This alloc­a­tion will be reduced before the end of the fin­an­cial year.

2. Cur­rent pro­jec­tions for ²⁰²⁰⁄₂₁, based on assets in use at the begin­ning of the fin­an­cial year, pro­posed cap­it­al spend, with no abnor­mal charges or write downs for diminu­tion in value, are for a full year depre­ci­ation charge of £140,000.

Grant-in-Aid

1. Grant-in-aid has been drawn down as ori­gin­ally pro­filed and £2,905,000 has been drawn down to 31 Octo­ber. £2,845,000 has been alloc­ated as ​“Resource” fund­ing with the remain­ing £60,000 as ​“Cap­it­al” fund­ing to be alloc­ated to spend on assets and oth­er pro­jects deliv­er­ing bene­fits over the longer term.

Pro­jects

Tomin­toul & Glen­liv­et Land­scape Partnership

1. Amounts received/​due from the Nation­al Lot­tery Her­it­age Fund (NLHF) in the cur­rent year are:

Quarter ended	£	Received
30 June (claim 14)	158,220	16 Octo­ber *
30 Septem­ber (claim 15)	79,276	o/​s

• Pre­vi­ously repor­ted as £63,051. The final claim sub­mit­ted included the first match fund­ing claims for EACS projects.

1. Costs will con­tin­ue to be incurred for at least anoth­er 6 weeks as the remain­ing final pro­jects complete,

LEAD­ER

1. Claims have been few in this report­ing peri­od as the LEAD­ER Pro­gramme draws increas­ingly closer to a close in deliv­ery, and only I pro­ject advance has still to be claimed (paid out on 28 Octo­ber). Claims made and due at 31 Octo­ber total £19,278. All admin­is­tra­tion costs for the & months have been treated as claimed in the fig­ures repor­ted with the form­al claim for recov­ery of funds from Scot­tish Gov­ern­ment yet to be made.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

Great Place Badenoch

1. Activ­ity in the 7 months remain at a low level.

2. Amounts due from the NLHF since last mon­it­or­ing paper are:

Quarter ended	£	Received
30 Septem­ber (claim 10)	10,475	o/​s

Caper­cail­lie Framework

1. The first claim for the Deliv­ery phase has been made for the 2 months to 30 Septem­ber and amounts to £33,771.

Out­turn Pos­i­tion ²⁰²⁰⁄₂₁ and Poten­tial Fin­an­cial Reallocations

1. At the point of writ­ing this paper, it is slightly too early to con­firm wheth­er there are fur­ther oppor­tun­it­ies to real­loc­ate budgeted funds to oth­er spend­ing pri­or­it­ies. Annex I does high­light some small ongo­ing budget sav­ings in staff and board related expendit­ure (travel, accom­mod­a­tion and train­ing for example) and in facil­it­ies costs. Oth­er than those areas, budgets are either on tar­get or, in the case of the Oper­a­tion­al Plan invest­ments, still require to be final­ised in terms of likely out­turn position.

2. There are a num­ber of cost pres­sures of which we are also aware:

a) COV­ID related costs are likely to con­tin­ue to rise. We are ask­ing staff now to plan for ongo­ing home work­ing until well into 2021 and there is con­sequently an expect­a­tion of a fur­ther peak in equip­ping staff to do so. Wider organ­isa­tion­al COV­ID costs are also likely to be incurred.

b) Vis­it­or Man­age­ment Costs in par­tic­u­lar are likely to be incurred as the Author­ity works with part­ners in pre­par­a­tion for the 2021 vis­it­or sea­son which will start around, or before, a rel­at­ively early East­er week­end. We have recruited two posts to sus­tain the Ranger Ser­vices impacts achieved over the sum­mer and to sup­port devel­op­ment of our vis­it­or man­age­ment approaches for 2021. There are a vari­ety of cost pres­sures such as those around traffic man­age­ment, car park­ing capa­cit­ies, inform­a­tion pro­vi­sion and sup­port to busi­nesses and land own­ers that may have to be con­sidered over the com­ing months.

c) GIS, Data Man­age­ment and ICT Net­work invest­ment: while the Author­ity has respon­ded well to a rap­id evol­u­tion of remote work­ing arrange­ments, there are a num­ber of areas that may require fur­ther and pri­or­ity invest­ment in the remain­ing part of the cur­rent fin­an­cial year. As men­tioned pre­vi­ously in this paper, this will be driv­en by a refreshed IT Strategy and will cov­er a wider review of our ICT Infra­struc­ture plat­forms, includ­ing a test­ing of altern­ate / addi­tion­al video­con­fer­ence plat­forms to aug­ment the exist­ing con­tract with Lifesize.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 13/11/2020

1. As such, no spe­cif­ic recom­mend­a­tions are made for con­sid­er­a­tion of budget real­loc­a­tions are put for­ward at this time.

2. All budget lines con­tin­ue to be mon­itored on a reg­u­lar basis, while work­ing closely with Heads of Ser­vice to repro­file spend for the remainder of the year and to identi­fy pres­sure points, or slack, as early as pos­sible. It remains the inten­tion to return an out­turn as close as is pos­sible to break even in what has been, and will con­tin­ue to be, a chal­len­ging year. The oppor­tun­ity of the Board meet­ing on 27 Novem­ber will be taken to con­sider fur­ther any poten­tial budget real­loc­a­tions with improved vis­ib­il­ity over Oper­a­tion­al Plan out­turn expectations.

Daniel Ral­ph Dav­id Camer­on 2 Novem­ber, 2020

danielralph@​cairngorms.​co.​uk davidcameron@​cairngorms.​co.​uk