210924ResourcesCtteePaper1

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Resources Com­mit­tee Paper | 29/10/21

CAIRNGORMS NATION­AL PARK AUTHOR­ITY RESOURCES COMMITTEE

FOR DIS­CUS­SION

Title: ²⁰²¹⁄₂₂ BUDGET MON­IT­OR­ING Pre­pared by: DAV­ID CAMER­ON, Dir­ect­or of Cor­por­ate Services

Pur­pose This paper presents an over­view of the Cairngorms NPA’s budget man­age­ment pos­i­tion at the half year point of the cur­rent ²⁰²¹⁄₂₂ fin­an­cial year, as at 30 Septem­ber 2021.

The paper seeks the Committee’s views on the budget man­age­ment pos­i­tion and any stra­tegic risks or implic­a­tions of the fin­an­cial position.

Recom­mend­a­tions The Resources Com­mit­tee is asked to: a) Con­sider the budget man­age­ment pos­i­tion for ²⁰²¹⁄₂₂ ; b) Identi­fy any stra­tegic risks or implic­a­tions posed for the Board’s deliv­ery of its stra­tegic object­ives which may require addi­tion­al man­age­ment action; c) Note the expec­ted reduc­tion in the Authority’s resource grant fund­ing of 2% and that man­age­ment have plans in place to accom­mod­ate this action with­in a con­tin­ued break-even fin­an­cial target.

Stra­tegic Background

1. Scot­tish Gov­ern­ment has indic­ated to the Authority’s man­age­ment that it will seek a 2% in year reduc­tion to resource grant made avail­able to the Cairngorms NPA: this equates to £125,000 includ­ing some recov­ery of expec­ted resource fund­ing for the Cairngorms Peat­land pro­gramme. This reduc­tion is being made across all budgets in the port­fo­lio with­in which the Cairngorms NPA’s resources are man­aged by Scot­tish Gov­ern­ment, and is not a reduc­tion focused only on the Author­ity. Cap­it­al fund­ing is not impacted.

2. Man­age­ment has developed an action plan to cov­er any resource reduc­tion with the min­im­um of impact on planned deliv­ery over the fin­an­cial year. We will look to defer pay­ments where we are able to min­im­ise impacts on deliv­ery of planned cor­por­ate object­ives, with the phas­ing of our fin­an­cial con­tri­bu­tions to the Her­it­age Hori­zons pro­gramme a key area of flex­ib­il­ity. There is also a poten­tial to place reli­ance on addi­tion­al income secured since the budget was adop­ted to fin­ance some of the reduc­tion in resource grant avail­able from Scot­tish Government.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Resources Com­mit­tee Paper | 29/10/21

1. Budget fig­ures presen­ted with this paper reflect the expec­ted reduc­tion of £125,000 on resource fund­ing levels advised when the Board approved the ori­gin­al budget for ²⁰²¹⁄₂₂ in March 2021.

Ana­lys­is of Budget Position

1. A sum­mary of the Authority’s budget man­age­ment pos­i­tion and man­age­ment accounts at the half year point is set out at Annex One to this paper.

Staff­ing and Run­ning Costs

1. Key budget area of staff­ing invest­ment is under­spend­ing at the half way stage of the year: our staff costs fall­ing against core resource fund­ing is some £225,000 below expec­ted budget levels. A sig­ni­fic­ant con­trib­ut­ory factor in this regard is the Authority’s recov­ery of a great­er than expec­ted level of staff costs from extern­ally fun­ded pro­jects. We have con­tin­ued recruit­ment into posts and there is some expect­a­tion that this pos­i­tion will sta­bil­ise rather than con­tin­ue to accu­mu­late at this level for the second half of the year. There is a reas­on­able expect­a­tion that some of this cur­rent under­spend pos­i­tion may be real­loc­ated to off­set oth­er expendit­ure pres­sures and / or sup­port deliv­ery of oper­a­tion­al plan and estab­lished cor­por­ate priorities.

2. There is some off­set to this budget sav­ing on staff­ing as a con­sequence of the Author­ity invest­ing in Inform­a­tion and Com­mu­nic­a­tions Tech­no­logy (ICT) infra­struc­ture improve­ments. Man­age­ment are begin­ning the pro­cess to imple­ment ICT revi­sions to facil­it­ate remote and ​“hybrid” work­ing on a more per­man­ent basis.

3. The mid-year point shows a small under­spend against most run­ning cost budget areas. We expect this pos­i­tion to erode over the second half of the year as activ­ity levels escal­ate with eas­ing of COVID19 lock­down meas­ures, and as cost pres­sures around energy and oth­er cost increases also mounts.

Oper­a­tion­al Plan Delivery

1. As is typ­ic­ally the case at the mid-year point, the great major­ity of oper­a­tion­al plan deliv­ery activ­it­ies have incurred less than 50% of budget alloc­a­tion. Expendit­ure typ­ic­ally lags in these areas toward the final third of the fin­an­cial year.

2. The level of lag of oper­a­tion­al plan com­mit­ments in fin­an­cial year for ²⁰²¹⁄₂₂ is exacer­bated by the Author­ity hav­ing to devel­op plans to bring the organ­isa­tion out of COV­ID related remote work­ing and resume office work­ing. The staff con­sulta­tion on approach to that new oper­a­tion­al mode of work­ing is now com­plete and final plan­ning and cost­ing of invest­ment require­ment may now be finalised.

3. Green Recov­ery Grant com­mit­ments over the first half of the year have con­trib­uted to the small over­spend against mid-year budget pos­i­tion shown against the Rur­al Devel­op­ment budget line.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Resources Com­mit­tee Paper | 29/10/21

1. Work is ongo­ing to final­ise the infra­struc­ture grant awards held in the Vis­it­or Ser­vices budget line. As some of these grant were not yet fully com­mit­ted at 30 Septem­ber, they con­trib­ute to the sig­ni­fic­ant level of under­spend against budget on this line.

2. Her­it­age Hori­zons pro­gramme start date has now been con­firmed as I Octo­ber and expendit­ure will begin to flow from Octo­ber onwards. The Authority’s dir­ect fin­an­cial con­tri­bu­tion to the pro­gramme remains at £150,000 which is cur­rently budgeted against the ​‘pro­ject man­age­ment’ line in the man­age­ment accounts sum­mary at Annex 1.

3. The Peat­land Pro­gramme has a reas­on­able level of com­mit­ment shown as at 30 Septem­ber des­pite some dif­fi­culties in pro­cur­ing con­tract­ors. There are also a good num­ber of pipeline pro­jects with grants due to be awar­ded over the course of Octo­ber. A degree of weath­er depend­ency remains to achieve tar­get deliv­ery by the end of the year.

4. The Seni­or Man­age­ment Team con­tin­ues to man­age budget alloc­a­tions toward a year end break even.

Cash Man­age­ment

1. From a cash flow per­spect­ive, the final pay­ment of the Tomin­toul and Glen­liv­et Land­scape Part­ner­ship pro­gramme has been approved and paid by the Nation­al Lot­tery Her­it­age Fund (NLHF). The Author­ity has also received the great major­ity of over £200,000 LEAD­ER grant pay­ments made on behalf of the Cairngorms Loc­al Action Group from Scot­tish Gov­ern­ment. There­fore, there are no cur­rent cash man­age­ment issues to high­light. A pre­lim­in­ary cash flow fore­cast for the Her­it­age Hori­zons Pro­gramme has been pre­pared and agreed with NLHF. This will be adap­ted as pro­gramme deliv­ery inten­tions evolve. For the mean­time, the cash flow fore­cast does not cause any con­cerns for the Authority’s cash man­age­ment levels.

Dav­id Camer­on 12 Octo­ber 2021 davidcameron@​cairngorms.​co.​uk