210216_Paper 2 Budget 2122

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

CAIRNGORMS NATION­AL PARK AUTHOR­ITY FIN­ANCE & DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: ²⁰²¹⁄₂₂ BUDGET DEVEL­OP­MENT Pre­pared by: DAV­ID CAMER­ON, DIR­ECT­OR OF CORPORATE

	SERVICES

Pur­pose This paper presents the cur­rent pos­i­tion on the devel­op­ment of the Authority’s budget for the ²⁰²¹⁄₂₂ fin­an­cial year, com­men­cing I April 2021, pri­or to con­sid­er­a­tion of final budget pro­pos­als by the full Board at its meet­ing sched­uled for 12 March 2021.

Stra­tegic Considerations

The paper cov­ers the fol­low­ing aspects of devel­op­ment of Board strategy, scru­tiny of plan­ning and assurance:

1. Stra­tegic risk man­age­ment and risk appet­ite: do the budget plans, fin­an­cial object­ives set and any risks and judge­ments taken on estim­ates and pro­vi­sions estab­lish an appro­pri­ate plat­form for the Authority’s budget set­ting and fin­an­cial man­age­ment pro­cesses for the com­ing fin­an­cial year?
2. Deliv­er­ing stra­tegic object­ives: do the fin­an­cial plans, at this stage in their evol­u­tion, estab­lish an appro­pri­ate resource alloc­a­tion base from which to deliv­er approved stra­tegic objectives?
3. Assur­ance: are there any aspects of budget devel­op­ment that mer­it spe­cif­ic atten­tion in refin­ing and fur­ther devel­op­ing budget pro­pos­als for the full Board meeting?

Recom­mend­a­tions

The Fin­ance & Deliv­ery Com­mit­tee is reques­ted to: a) Con­sider the pos­i­tion of the ²⁰²¹⁄₂₂ budget as presen­ted in light of the stra­tegic con­sid­er­a­tions for the Com­mit­tee; b) Agree any pro­posed fur­ther actions on budget devel­op­ment pri­or to the sub­mis­sion of budget pro­pos­als to the Board in March.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

Income

1. There is a sig­ni­fic­ant step-change in the fund­ing alloc­a­tions made avail­able to the Author­ity by Scot­tish Gov­ern­ment for the ²⁰²¹⁄₂₂ fin­an­cial year, as sum­mar­ised in Table One.

Table One: Scot­tish Gov­ern­ment Fund­ing Allocations

	2020⁄21	2021⁄22	Vari­ance
	£000	£000	£000
Resource main allocation	4,779	5,830	+1,051
Resource COV­ID	-	500	+500
Response
Cap­it­al	240	600	+360
**Total grant in aid	5,019	6,930	+1,911
alloc­a­tions**
Spe­cif­ic Programmes
Peat­land Restoration	246	2,285	+2,039
SG Biod­iversity Funding	To be confirmed	To be confirmed	To be confirmed
Oth­er gen­er­ated income	125	174	+49
Total Income	5,390	9,389	3,999

1. The Author­ity will dir­ectly receive and man­age fund­ing in the com­ing year to sup­port the Cairngorms Peat­land Res­tor­a­tion Pro­gramme. These funds will sup­port our pro­gramme team and grants made avail­able to landown­ers under­tak­ing approved peat­land res­tor­a­tion pro­jects. The Author­ity also hopes to secure biod­iversity fund­ing from Scot­tish Gov­ern­ment, with that inform­a­tion still to be con­firmed at this stage of the budget devel­op­ment process.

2. As in ²⁰²⁰⁄₂₁, we will con­tin­ue to budget for addi­tion­al gen­er­ated income from sources such as plan­ning fees, shared ser­vice deliv­ery to part­ners and oth­er mis­cel­laneous receipts. The budgeted income fig­ure for ²⁰²¹⁄₂₂ is £174,000, and increase of £49,000 in anti­cip­ated of receipt of ​“Kick­start” grant cov­er for the employ­ment of Kick­start Rangers as part of the ranger ser­vice development.

3. In total, there­fore, there is cur­rently an increase of almost £4 mil­lion in fund­ing put dir­ectly under the man­age­ment of the Author­ity for ²⁰²¹⁄₂₂ fin­an­cial year.

4. In addi­tion to the spe­cified fund­ing set out in Table One above, the Author­ity over the course of the year will remain lead applic­ant and account­able body for the Cairngorms Caper­cail­lie Pro­gramme, the Cairngorms LEAD­ER Pro­gramme (ends 31 Decem­ber 2021) and the Tomin­toul and Glen­liv­et Land­scape Part­ner­ship (pro­gramme ends 31 May 2021 with resid­ual respons­ib­il­ity for over­sight of a small man­age­ment and main­ten­ance budget).

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

Step Changes in Oper­a­tion­al Deliv­ery ²⁰²¹⁄₂₂

1. The Author­ity has worked with Scot­tish Gov­ern­ment through­out 2020 to identi­fy a num­ber of evol­u­tions of our oper­a­tion­al bases which could deliv­er sig­ni­fic­ant con­tri­bu­tions to Government’s Nation­al Out­comes as set out in the Nation­al Per­form­ance Frame­work, while deliv­er­ing against the Authority’s exist­ing stra­tegic goals. These dis­cus­sions and bids have secured the step change increases in fund­ing con­sidered above. The key changes are sum­mar­ised in Table Two togeth­er with estim­ated fin­an­cial val­ues asso­ci­ated with each aspect of deliv­ery and its link­age with exist­ing stra­tegic outcomes.

Table Two: Sig­ni­fic­ant Changes in Oper­a­tion­al Deliv­ery for ²⁰²¹⁄₂₂

Activ­ity	Value £000	Stra­tegic Fit
Peat­land Restoration	2,285	Cor­por­ate Plan con­ser­va­tion and land man­age­ment pri­or­ity 1: sup­port land­scape scale restoration
Sup­port Her­it­age Hori­zons Pro­gramme Bid	150	Vari­ous Cor­por­ate Plan object­ives / approved by Board 12 Feb 2021
Cairngorms NPA Ranger Ser­vice: Sea­son­al Rangers (includ­ing Kick­start rangers)	296	Cor­por­ate Plan vis­it­or exper­i­ence pri­or­ity 2: Increase phys­ic­al activ­ity in both res­id­ents and vis­it­ors and sup­port deliv­ery of
Cairngorms NPA Ranger Ser­vice: per­man­ent ranger ser­vice provision	286	Scotland’s Nat­ur­al Health Ser­vice / Green Recov­ery Plan approved Board June 2020
Green Recov­ery Grants	250	Green Recov­ery Plan approved Board June 2020, link­ing to Eco­nom­ic Action Plan approved in 2019, togeth­er with Rur­al Devel­op­ment object­ive 2: sup­port com­munit­ies, spe­cific­ally focus­sing on the most fra­gile, to deliv­er their agen­das for change
Vis­it­or Man­age­ment: cap­it­al fin­an­cing to sup­port enhance­ments to vis­it­or facil­it­ies and improved vis­it­or experience	324	Vis­it­or Exper­i­ence Pri­or­ity I — Con­tin­ue to ensure vis­it­or infra­struc­ture meets the expect­a­tions of vis­it­ors to the Nation­al Park and help deliv­er a sus­tain­able tour­ism eco­nomy. Green Recov­ery Plan approved by Board June 2020 link­ing to Eco­nom­ic Action Plan approved in 2019.
Organ­isa­tion­al and Cairngorms NP responses to COVID	220	As Vis­it­or Exper­i­ence Pri­or­ity I in above line / Rur­al Devel­op­ment Object­ive 2 (see Green Recov­ery Grants above) plus Cor­por­ate Plan Pri­or­ity 3 on Cor­por­ate Ser­vices – deliv­er­ing ongo­ing ser­vice improve­ments which in this case will sup­port organ­isa­tion­al adapt­a­tion to work after COVID19 response.
Total ser­vice increases	3,811

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

1. The ser­vice changes out­lined in Table Two there­fore account for around 95% of the step changes in fund­ing received for the ²⁰²¹⁄₂₂ fin­an­cial year.

2. Fur­ther sig­ni­fic­ant adjust­ments to the Authority’s budget base between the cur­rent fin­an­cial year, ²⁰²⁰⁄₂₁, and the forth­com­ing fin­an­cial and oper­a­tion­al year, ²⁰²¹⁄₂₂, sup­port pro­vi­sion across all ele­ments of the agreed Cor­por­ate Strategy. Table Three sets out the more sig­ni­fic­ant of the cross-organ­isa­tion­al move­ments in the pro­jec­ted cost base for the Author­ity for ²⁰²⁰⁄₂₁.

Table Three: Changes in Cost Base Sup­port­ing All Cor­por­ate Outcomes

Activ­ity	Value £000	Stra­tegic Fit
Revis­ing organ­isa­tion­al struc­ture to fit future pri­or­it­ies and step change in operations	140	Deliv­er­ing all exist­ing cor­por­ate plan out­comes and agreed Board stra­tegic objectives.
Move­ment in pay	164	Deliv­er­ing Scot­tish Gov­ern­ment Pub­lic Sec­tor Pay Policy; observing CNPA pay policies.
Enhan­cing shared ser­vices to estab­lish a fully sup­por­ted GIS service.	48	Cor­por­ate Plan, Cor­por­ate Ser­vices Pri­or­ity 2 — Ensure that the office exten­sion, exist­ing accom­mod­a­tion and ICT facil­it­ies are ​‘fit for pur­pose’ and help to deliv­er the Organ­isa­tion­al Devel­op­ment Strategy — imple­ment GIS strategy
Total ser­vice increases	352

1. The sig­ni­fic­ant cross-organ­isa­tion­al ser­vice changes rep­res­ent a fur­ther 9% of the fund­ing increases secured for ²⁰²¹⁄₂₂. These changes, plus those in table two dir­ec­ted toward more spe­cif­ic cor­por­ate plan out­comes, thus account for 104% of the total increase in fund­ing alloc­ated to the Author­ity for the year ahead. This is off­set by some reduc­tions in oper­a­tion­al plan expendit­ure require­ments where invest­ments have come to a con­clu­sion, togeth­er with oth­er budget man­age­ment assess­ments. Some of the more sig­ni­fic­ant budget assump­tions are covered in a fol­low­ing sec­tion of this paper.

2. The Author­ity has under­taken a Vol­un­tary Exit exer­cise with staff between Octo­ber 20 and Janu­ary 21. This has res­ul­ted in four mem­bers of staff who will take vol­un­tary exist from the organ­isa­tion at the end of April 21. The costs of the VE com­pens­a­tion pay­ments are fully covered by the pro­vi­sion for the equi­val­ent salary over the ²¹⁄₂₂ fin­an­cial year. This action by man­age­ment will release around £160,000 from the authority’s staff payroll costs at the end of the ²¹⁄₂₂ fin­an­cial year.

3. The ana­lys­is of budget changes presen­ted in these sec­tions allow the Com­mit­tee to con­sider the planned alloc­a­tion of sig­ni­fic­ant increases in fund­ing over cur­rent year fund­ing levels and, through doing so, take assur­ance that the fund­ing secured will con­tin­ue to deliv­er against the Authority’s exist­ing, approved stra­tegic object­ives and

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

out­comes. Over­all, 91% of the move­ment in the Authority’s fund­ing and oper­a­tion­al base is accoun­ted for with­in the activ­ity changes iden­ti­fied in tables two and three.

Key Assump­tions

1. At this stage of budget devel­op­ment, the Exec­ut­ive Man­age­ment Team is con­sid­er­ing two key ele­ments of the budget estab­lish­ment pro­cess which are con­sidered here. The Committee’s view of these assump­tions in light of the stra­tegic con­sid­er­a­tions set out at the start of this paper is invited to inform fur­ther devel­op­ment of the budget estim­ates pri­or to the Board meeting.

Vacancy Sav­ings

1. In set­ting the ²⁰²⁰⁄₂₁ budget, the Board approved a pos­i­tion includ­ing an estim­ated £78,000 in vacancy sav­ings from hold­ing vacant posts for a peri­od of time before recruit­ment. This rep­res­en­ted 2.6% of the total staff budget for the year of £2,978,000. Staff­ing in the cur­rent year rep­res­en­ted 58.9% of avail­able income at the time of estab­lish­ing the budget for the year.

2. Our budget devel­op­ment pro­cess for ²¹⁄₂₂ recog­nises the increase in staff levels to deliv­er these new pro­grammes of activ­ity sum­mar­ised in this paper. We anti­cip­ate that there will be some delays in recruit­ment and increased levels of turnover impact­ing on budgets. As such, we have increased the vacancy sav­ings assump­tion to £171,600, or 3.9% of the revised staff budget of £4,455,600. Staff­ing for ²⁰²¹⁄₂₂ rep­res­ents 47.5% of avail­able resources for the year, the sig­ni­fic­ant reduc­tion as a per­cent­age of income reflect­ing the increase in peat­land pro­gramme and cap­it­al alloc­a­tions to the Author­ity for ²⁰²¹⁄₂₂.

Over-pro­gram­ming

1. Over the last two to three years, the Author­ity has gradu­ally elim­in­ated the prac­tice of ​“over-pro­gram­ming” as an ele­ment of its budget set­ting. Over-pro­gram­ming allowed for some expect­a­tion of slip­page in expendit­ure plans over the course of the year by budget­ing for a great­er level of expendit­ure than could be sup­por­ted be the funds avail­able in the year. Man­age­ment of slip­page through over-pro­gram­ming helped ensure that the Author­ity could max­im­ise use of resources and come as close to a tar­get break-even out­turn pos­i­tion at the end of the year as pos­sible. The rationale for the remov­al of an over-pro­gram­ming allow­ance linked to the increas­ing cer­tainty of pro­ject man­agers on their spend­ing plans as our part­ner­ships and oper­a­tion­al agree­ments matured, and con­sequently reduced expect­a­tion of sig­ni­fic­ant slip­page in plans.

2. As is set out in this paper, there is a sig­ni­fic­ant step change in resource avail­ab­il­ity for ²⁰²¹⁄₂₂. It may be appro­pri­ate to budget on the basis of some increase in over- pro­gram­ming to ensure the Author­ity is able to max­im­ise deploy­ment of resources avail­able in the year. Over-pro­gram­ming may also be a worth­while approach to man­aging poten­tial uncer­tain­ties in pro­ject deliv­ery arising from COVID19 restric­tions which are likely to remain at least over the first quarter of ²⁰²¹⁄₂₂.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 26/02/2021

Cap­it­al Programme

1. Work remains to com­plete the cap­it­al pro­gramme of planned cap­it­al invest­ments for ²⁰²¹⁄₂₂. We have inform­a­tion on the approved Green Recov­ery Plan to work from at the out­set. Fur­ther work is required on this aspect of our plans over the course of the next months.

2. To date, an alloc­a­tion of £170,000 has been used to sup­port cap­it­al ele­ments of the Oper­a­tion­al Plan and a fur­ther £100,000 to sup­port invest­ment in cor­por­ate sys­tems and equipment.

3. The Man­age­ment Teams are devel­op­ing a pro­gramme of cap­it­al works with part­ners to help sup­port vis­it­or man­age­ment across the Nation­al Park look­ing at key sites for improve­ment, camper­van facil­it­ies etc. This pro­vi­sion has been included at Table Three of this paper.

²⁰²¹⁄₂₂ Budget Summary

1. Incor­por­at­ing these pro­posed sig­ni­fic­ant changes in oper­a­tions into the over­all budget res­ults in the total budget pos­i­tion as estab­lished in Annex I to this paper.

2. The budget fig­ures will con­tin­ue to be developed in con­sulta­tion with the exec­ut­ive man­age­ment team. We will also devel­op the budget in light of dis­cus­sions at the Com­mit­tee meet­ing pri­or to sub­mis­sion of pro­pos­als to the Board at its meet­ing on 12 March.

Dav­id Camer­on 16 Feb­ru­ary 2021 davidcameron@​cairngorms.​co.​uk

Annex I CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 2 Annex I 26/02/2021

	2020⁄21	2021⁄22	Change (£)
	Base (£)	Estim­ates (£)
Staff salar­ies	3,415,800	4,563,627	1,147,827
Board fees	172,844	182,279	9,435
Staff costs recovered	-320,000	-234,513	85,847
Total Salar­ies against budget	3,268,644	4,511,393	1,242,749
LEAD­ER Salary recoveries	-53,648	-55,794	-2,146
Vacancy Sav­ings	-78,000	-171,626	-93,626
Net salar­ies against budget	3,136,996	4,283,973	1,146,977
Oth­er Board and staff costs	175,000	177,000	2,000
Facil­it­ies costs	361,080	377,318	16,238
IT & Professional	156,060	156,060	0
Her­it­age Horizons	0	150,000	150,000
Con­ser­va­tion & Land Management	303,000	2,377,500	2,074,500
Vis­it­or Services	456,500	835,500	379,000
Rur­al Devel­op­ment & planning	290,000	560,000	270,000
COV­ID Responses: com­munity and organisational	0	220,000	220,000
Cor­por­ate services	102,000	159,520	57,520
Com­mu­nic­a­tions	61,000	101,000	40,000
Total expendit­ure	5,041,636	9,397,871	4,356,235
Fin­anced By:
Resource Grant	4,779,000	6,330,000	1,551,000
Cap­it­al Grant	150,0001	600,000	450,000
Oth­er Income	125,000	2,459,000	2,334,000
Total Fin­an­cing	5,054,000	9,389,000	4,335,000
Sur­plus of fin­ance (+ve) / net expendit­ure (-ve)	12,364	-8,871

1 £90,000 cap­it­al in ²⁰²⁰⁄₂₁ budgeted sep­ar­ately for IT and cap­it­al invest­ment and there­fore not reflec­ted in the ²⁰²⁰⁄₂₁ baseline fig­ures. Fig­ure in table for cap­it­al there­fore at £90k vari­ance from Table One in main paper.