250124Paper2Developmentof2025-26Budget

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 1 of 9 For dis­cus­sion Title: Devel­op­ment of ²⁰²⁵⁄₂₆ budget Pre­pared by: Louise Allen, Head of Fin­ance and Cor­por­ate Oper­a­tions Purpose

1. This paper sets out the cur­rent pos­i­tion of the Park Authority’s ²⁰²⁵⁄₂₆ fin­an­cial year budget development.

2. It provides the Com­mit­tee with the oppor­tun­ity to con­sider the over­all budget pos­i­tion togeth­er with the impact of any key assump­tions made in estab­lish­ing budget estim­ates at this point in the ²⁰²⁵⁄₂₆ budget devel­op­ment process.

Recom­mend­a­tions

1. The Resources Com­mit­tee is invited to review the pos­i­tion achieved in devel­op­ment of the ²⁰²⁵⁄₂₆ fin­an­cial year budget and provide any feed­back to officers pri­or to the present­a­tion of the budget pro­pos­als to the full board in March 2025.

Stra­tegic con­text and considerations

1. This paper builds on the inform­a­tion provided to the Board at its busi­ness ses­sion in Decem­ber 2024.

2. Scot­tish Gov­ern­ment released its budget inten­tions on Thursday 05 Decem­ber. Our pre­dicted set­tle­ment for ²⁰²⁵⁄₂₆ is: a) Resource fund­ing (Resource Depart­ment­al Expendit­ure Lim­its — RDEL) £7.916 mil­lion b) Cap­it­al fund­ing (Cap­it­al Depart­ment­al Expendit­ure Lim­its — CDEL) £1.75 mil­lion c) Peat­land res­tor­a­tion RDEL £0.650 mil­lion d) Peat­land res­tor­a­tion CDEL £3 million

3. Avail­able resources have been alloc­ated accord­ing to pri­or­it­ies estab­lished to meet the require­ments of the Nation­al Park Part­ner­ship Plan (NPPP) and the Cor­por­ate Plan. The budget has been con­struc­ted on a line-by-line basis against each aim of the Cor­por­ate Plan.

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 2 of 9

1. Officers’ approach to budget devel­op­ment for the com­ing year were dis­cussed by the Board at its inform­al ses­sion in Decem­ber. Mem­bers’ main con­sid­er­a­tions were: a) Wherever pos­sible, fin­an­cing ini­ti­at­ives, such as the pro­posed Cli­mate Adapt­a­tion Fund, should aim to com­ple­ment and not duplic­ate oth­er funds already avail­able or planned by oth­er pub­lic bod­ies / part­ner organ­isa­tions. b) Cli­mate Adapt­a­tion and Nature Res­tor­a­tion are seen as pri­or­it­ies. Giv­en uncer­tainty over the avail­ab­il­ity of spe­cif­ic funds to sup­port this work (Scot­tish Government’s Nature Res­tor­a­tion Fund) all budget alloc­a­tions should be tested to ensure alloc­a­tion of resources to pri­or­it­ies for delivery.

2. The pro­cess of budget devel­op­ment requires the con­sid­er­a­tion of risk. Detail on the risks con­sidered by man­age­ment and presen­ted to the Board are provided in the annex to this paper.

Over­view of draft ²⁰²⁵⁄₂₆ budget position

1. The over­view of the draft budget pos­i­tion for ²⁰²⁵⁄₂₆ is presen­ted in Table 1. The focus of our work to date has been on core resources provided by Scot­tish Gov­ern­ment through the Nation­al Parks budget and through oth­er Scot­tish Gov­ern­ment budgets for peat­land res­tor­a­tion and nature recov­ery. The sig­ni­fic­ant fin­ances provided for deliv­ery of the Cairngorms 2030 (C2030) pro­gramme, are not included in our budget ana­lys­is to date.

2. Deliv­ery against the C2030 pro­gramme in ²⁰²⁵⁄₂₆ is expec­ted to cost £8 mil­lion in total. Of this, £3 mil­lion is included in our cur­rent budget estim­ates for Peat­land Res­tor­a­tion. Sim­il­arly, staff costs asso­ci­ated with C2030 deliv­ery that will be met from core resources are provided for in our estim­ates. The Park Authority’s com­mit­ted fund­ing con­tri­bu­tion is also recog­nised in the cur­rent budget iteration.

3. The Author­ity has yet to receive a final grant award let­ter for ²⁰²⁵⁄₂₆ from Scot­tish Gov­ern­ment. Our spon­sor­ship team at Scot­tish Gov­ern­ment has made us aware that the fig­ures provided may be open to amend­ment before March because of fin­an­cial and wider uncer­tain­ties. How­ever, cur­rently they provide the best avail­able basis for budget plan­ning, des­pite uncer­tainty pending the final­isa­tion and receipt of grant award letters.

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 3 of 9 Table 1 – Draft budget position

1. Alloc­a­tion of the draft budget across resource and cap­it­al fund­ing, and com­par­is­on of the total budget against the ²⁰²⁴⁄₂₅ budget as approved by the Board in March 2024.

	2025⁄26 Budget Pro­pos­al £’000	2024⁄25 Approved Budget £’000	Move­ment increase/​(reduc­tion) £’000
INCOME
Nation­al Parks Grant in Aid — Resource	7,916	7,311	605
Nation­al Parks Grant in Aid — Capital	1,750	1,810	(60) Per Scot­tish Gov­ern­ment budget indications
Peat­land grant — capital	3,000	3,000	0
Peat­land grant — resource — staff	650	580	70
Nature Res­tor­a­tion Fund	0	300	(300) Assumed not available
CLLD	350	300	50 Largely cap­it­al fund­ing available
Oth­er income	200	250	(50) Scale back — exper­i­ence to date / fall­ing interest rates
Total income	13,866	13,551	315
EXPENDIT­URE
Oper­a­tion­al plan
Cli­mate adapt­a­tion fund	200	370	(170) Reduc­tion to sup­port Nature Res­tor­a­tion delivery
Peat­land programme	3,030	3,050	(20) £20k real­loc­ated to cov­er staff and cent­ral costs
Land man­age­ment	142	85	57 Addi­tion­al cost asso­ci­ated with com­mu­nic­a­tions re fire byelaws
Nature res­tor­a­tion	220	300	(80) Assumes no spe­cif­ic Nature Res­tor­a­tion fund­ing available
Nature & conservation	469	426	43
People	309	290	19
Place	816	860	(44) Loc­al devel­op­ment plan­ning costs £44k
Com­mu­nic­a­tions	198	226	(28) Reduc­tion of VIIP grants­cheme by £88k
Cor­por­ate	298	392	(95) Spe­cif­ic cap­it­al pro­jects for facil­it­ies and IT in 24⁄25
	5,681	5,999	(318)
Com­munity Led Loc­al Devel­op­ment (CLLD)	350	300	50 To match assumed funding
CLLD staff — run­ning costs	(61)	(57)	(4) Mod­elled pay award
Pro­gramme con­tri­bu­tion — committed	450	450	0 Com­mit­ted
Pro­gramme con­tri­bu­tion — additional	338	0	338 For­ward pay­ment to sup­port design of Act­ive Travel projects
	1,077	693	384
Run­ning costs
Board com­pens­a­tion	205	192	13 Mod­elled pay award
Staff com­pens­a­tion	5,998	5,697	301
Vacancy sav­ings	(200)	(71)	(129) Prudent estimate
Oth­er staff and board costs	270	263	7
Facil­it­ies	383	433	(50) Spe­cif­ic cap­it­al projects
IT and professional	447	346	102 Increase in cost of Idox plan­ning software
	7,103	6,860	244
Total expendit­ure	13,861	13,551	310
Sur­plus	5	0	5

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 4 of 9 Income

1. The budget assumes an over­all increase in grant-in-aid fund­ing for core activ­it­ies of £545,000 (5.9%). This is split between resource and cap­it­al fund­ing: a) RDEL — increase of £605,000 b) CDEL — decrease of £60,000

In addi­tion, fund­ing for peat­land res­tor­a­tion is assumed at: c) Peat­land res­tor­a­tion RDEL increase of £70,000 d) Peat­land res­tor­a­tion CDEL stand­still funding

1. The avail­ab­il­ity of fin­an­cial resource from the Scot­tish Government’s Nature Res­tor­a­tion Fund is uncer­tain at present. £300,000 of fund­ing was anti­cip­ated in the budget for ²⁰²⁴⁄₂₅, but sub­sequently became unavail­able. Because of this uncer­tainty, the budget assumes that no fund­ing will be received in ²⁰²⁵⁄₂₆. (Annex-Risk 1).

2. Com­munity Led Loc­al Devel­op­ment (CLLD) activ­ity is fun­ded through Scot­tish Gov­ern­ment. We under­stand that fund­ing will be avail­able in ²⁰²⁵⁄₂₆ but that the emphas­is will be on provid­ing sup­port to cap­it­al pro­jects. Poten­tial inter­ac­tions between Com­munity Led Loc­al Devel­op­ment (CLLD) pro­jects and cli­mate adapt­a­tion pro­jects will be explored, in order to max­im­ise the poten­tial com­munity bene­fits achieved through the two funds work­ing in tan­dem. Fund­ing awar­ded for CLLD in ²⁰²⁴⁄₂₅ has been £410,000, exceed­ing budget expect­a­tions by £110,000; indic­a­tions are that fund­ing avail­able for ²⁰²⁵⁄₂₆ will be in the order of 15% lower than has been dis­trib­uted this year. (Annex-Risk 2).

3. Oth­er sources of income (£200,000) included in the draft budget pos­i­tion are: a) Plan­ning fees, and b) Bank interest.

4. While both sources of income are uncer­tain, they have been rel­at­ively con­sist­ent in recent years. Anti­cip­ated income has been scaled back by 20% (£50,000) to provide a prudent estim­ate in a dif­fi­cult eco­nomy with fall­ing interest rates.

Expendit­ure

1. Staff costs have been a major uncer­tainty in set­ting the budgets over the past two years, because of the delay in agree­ing annu­al pay awards. How­ever, the three-year

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 5 of 9 pay award (2024÷25 to ²⁰²⁶⁄₂₇) agreed with Scot­tish Gov­ern­ment and with staff, provides cer­tainty over the rate of annu­al pay increase for ²⁰²⁵⁄₂₆. (Annex-Risk 3)

1. The budget includes a pay award impact of £255,000.

Break­down of payroll budget 2025 – 26	£m
Full year cost of exist­ing staff before the 2025 – 26 award	6.760
Increase in rate of employ­er nation­al insurance	0.088
Award 2025 – 26	0.255
Total budget estim­ate 2025 – 26	7.103

1. Estim­ates have been made of the levels of staff payroll recov­er­ies from extern­al fund­ing sources. Cur­rent estim­ates are for recov­er­ies through C2030 of £1.1 mil­lion in ²⁰²⁵⁄₂₆.

2. Con­sid­er­a­tion has been giv­en to the man­age­ment of vacan­cies, both in respect of wheth­er exist­ing vacan­cies should be filled, the impact of these vacan­cies on work­load and the value of any sav­ings that might be real­ised from delays in recruit­ment. Estim­ated sav­ings from vacan­cies and recruit­ment delays were sig­ni­fic­antly under­es­tim­ated when the ²⁰²⁴⁄₂₅ payroll budget was set, res­ult­ing in a sig­ni­fic­ant under­spend (out­turn is expec­ted to be £300,000 lower than budget). The avail­ab­il­ity of sav­ings depends on the cir­cum­stances in any par­tic­u­lar year and is there­fore inher­ently dif­fi­cult to estim­ate. In the past, a met­ric of 5% of the total budget has been applied. This met­ric would indic­ate likely sav­ings of around £300,000 once again (5% of budget estim­ate net of recov­er­able costs). How­ever, a prudent approach has been taken and £200,000 has been included in the ²⁰²⁵⁄₂₆ budget (3.33% of budget) (Annex-Risk 4). The payroll budget will be mon­itored closely through­out the year, with any avail­able under­spend being applied to oper­a­tion­al delivery.

3. Using this mod­el­ling, the net cost for staff salar­ies in ²⁰²⁵⁄₂₆ is there­fore £5.799 million.

Payroll budget net of recharges and sav­ings	£m
Total budget estim­ate 2025 – 26	7.103
Total recov­er­able	(1.105)
Vacancy sav­ings / recruit­ment delays	(0.200)
Total net cost	5.798

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 6 of 9 This is a total increase of £550,000 over the pro­jec­ted out­turn for ²⁰²⁴⁄₂₅ (£5.25 million).

Increase in staff costs 2025 – 26	£m
Award 2025 – 26	0.255
Increase in rate of employ­er nation­al insurance	0.088
Oth­er changes including:
* increase in pro­vi­sion for vacancy sav­ings and recruit­ment delays
* full year cost of posts recruited part way through 2024 – 25	0.207
Total net cost	0.550

Oper­a­tion­al plan investment

1. Total budget of £5.768 mil­lion has been alloc­ated across our oper­a­tion­al plan ser­vices: a) Cli­mate adapt­a­tion b) Peat­land res­tor­a­tion c) Land man­age­ment d) Nature and con­ser­va­tion e) People f) Place g) Com­mu­nic­a­tions h) Corporate

2. The most sig­ni­fic­ant changes to budget alloc­a­tions for ²⁰²⁵⁄₂₆ com­pared with those for ²⁰²⁴⁄₂₅ are set out below.

Ser­vice	2025 – 26 budget pro­pos­al £’000	2024 – 25 approved budget £’000	Increase/​(decrease) £’000	Com­ment
Cli­mate adapt­a­tion fund	200	370	(170)	Reduc­tion sup­ports nature res­tor­a­tion deliv­ery (Annex-Risk 5)
Nature res­tor­a­tion	220	300	(80)	2025⁄26 budget cov­ers pri­or­ity projects
Place	816	860	(44)	Loc­al devel­op­ment plan­ning costs (cyc­lic­al)
Cor­por­ate	298	392	(95)	Reduc­tion in VIIP grant scheme Spe­cif­ic cap­it­al pro­jects planned for facil­it­ies and IT in 2024⁄25

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 7 of 9

1. The organ­isa­tion is com­mit­ted to nature res­tor­a­tion deliv­ery. The budget assumes that no spe­cif­ic fund­ing will be avail­able to cov­er the cost of this work, and con­sequently, this ser­vice has been pri­or­it­ised for alloc­a­tion from grant-in-aid fund­ing. Were addi­tion­al fund­ing to be made avail­able then resources would be reallocated.

2. Planned nature res­tor­a­tion pro­jects include: a) Mont­ane, pond, aspen, ripari­an deliv­ery b) Fresh­wa­ter eco­lo­gic­al res­tor­a­tion c) Wood­land eco­sys­tem res­tor­a­tion d) Fresh­wa­ter pearl mus­sels e) Spe­cies recov­ery rare inver­teb­rates, rare plants, bees, wild­cats, Cairngorms Nature Index indic­at­or species

3. In addi­tion to these pro­jects that are form­ally des­ig­nated as ​‘nature res­tor­a­tion’ deliv­ery, many oth­er aspects of the planned Nature and Con­ser­va­tion deliv­ery con­trib­ute to the Authority’s nature res­tor­a­tion activ­ity includ­ing: nature friendly farm­ing, catch­ment man­age­ment, caper­cail­lie emer­gency plan, rap­tors pro­ject, beaver rein­tro­duc­tion; pro­vi­sion has been made for deliv­ery of these activ­it­ies in the oper­a­tion­al plan.

4. Addi­tion­al budget alloc­ated to the Place ser­vice cov­ers essen­tial peri­od­ic costs asso­ci­ated with loc­al devel­op­ment plan­ning activity.

Run­ning costs and infla­tion­ary impacts (Annex-Risk 6)

1. The budget for run­ning costs has been built on the out­turn fore­cast for ²⁰²⁴⁄₂₅. Infla­tion­ary increases of 2.6% have been applied, reflect­ing Office for Budget Respons­ib­il­ity pre­dic­tions. This adds £26,000 to run­ning costs.

2. Soft­ware licences are now an essen­tial part of the organisation’s infra­struc­ture, with our core pro­grammes avail­able only as Soft­ware As A Ser­vice (SAAS): a) Microsoft applic­a­tions b) Fin­ance soft­ware – Access Fin­an­cials c) Payroll and HR soft­ware — Access d) E‑planning sys­tem- Idox e) Geo­graph­ic Inform­a­tion Sys­tem (GIS)

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 8 of 9

1. Addi­tion­al budget (£85,000) has been provided to cov­er the costs of essen­tial upgrade of the e‑planning and GIS sys­tems, which we access as a shared ser­vice through Loch Lomond and the Trossachs Nation­al Park Author­ity. In addi­tion, £10,000 has been provided to upgrade the HR sys­tem to bring it up to date with the latest soft­ware ver­sion. It is an import­ant aspect of secur­ity that soft­ware does not fall too far behind latest versions.

Con­tri­bu­tion to C2030 (Annex-Risk 7)

1. The Park Author­ity is com­mit­ted to an annu­al con­tri­bu­tion of £450,000 to the C2030 pro­gramme — £2.25 mil­lion over the life of the pro­ject. To date, £900,000 has been paid, and the ²⁰²⁵⁄₂₆ budget includes alloc­a­tion of a fur­ther tranche of £450,000, leav­ing £900,000 as com­mit­ted fund­ing sched­uled for pay­ment in ²⁰²⁶⁄₂₇ and ²⁰²⁷⁄₂₈. In addi­tion to the planned annu­al con­tri­bu­tion of £450,000, it is pro­posed to increase the con­tri­bu­tion made in ²⁰²⁵⁄₂₆ by advan­cing fund­ing of £338,000 from future years. This advance, from the remain­ing £900,000 com­mit­ted, will provide con­tin­gency in sup­port of the devel­op­ment of Stage ³⁄₄ designs for two major act­ive travel projects.

2. These pro­jects are a sig­ni­fic­ant ele­ment of the C2030 pro­gramme, inten­ded to con­trib­ute a high level of third-party fin­an­cial sup­port to the pro­gramme, while deliv­er­ing val­ued and vis­ible dif­fer­ences as key ele­ments of the C2030 out­comes. There is cur­rently no secured fund­ing in place to sup­port com­mence­ment of the pro­jects, fol­low­ing a one-year hiatus in fund­ing from Sus­trans / Trans­port Scot­land, although there is optim­ism that pro­ject fund­ing will be awar­ded in due course.

3. How­ever, the pro­jects are time-sens­it­ive and have already been delayed for a year. This puts at risk their com­ple­tion dur­ing the timespan of the C2030 pro­gramme. It is neces­sary for us to pro­ceed with the pre­par­a­tion of designs if we are to mit­ig­ate risks arising from fur­ther delay.

4. Fund­ing provided from the ²⁰²⁵⁄₂₆ budget would ensure that fin­an­cial resources are avail­able to go ahead with pro­cur­ing design ser­vices, while at the same time apply­ing for grant fund­ing from Trans­port Scot­land. It is anti­cip­ated that an award of fund­ing will be made pri­or to com­ple­tion of the pro­cure­ment; how­ever, if it became neces­sary to let the con­tract before extern­al fund­ing were con­firmed, then it would

Cairngorms Nation­al Park Author­ity Paper 2 Resources Com­mit­tee 24 Janu­ary 2025

Page 9 of 9 be neces­sary to con­vert this advance into an addi­tion­al con­tri­bu­tion of fund­ing to the C2030 pro­gramme. Form­al gov­ernance pro­ced­ures would be required before mak­ing this con­ver­sion, and the decision would be brought back to the Resources Committee.

1. The cost of Stage ³⁄₄ design works is cur­rently estim­ated at £628,000. It is pro­posed that the Park Author­ity makes pro­vi­sion with­in the ²⁰²⁵⁄₂₆ budget to under­pin this cost. £290,000 can be made avail­able in fin­an­cial year ²⁰²⁴⁄₂₅:

Real­loc­a­tion from 2024⁄25 budget	£,000
Payroll budget – vacancy savings	200
Planned vis­it­or infra­struc­ture pro­jects unlikely to go ahead in 2024⁄25	90
Total real­loc­ated	290

1. The remain­ing £338,000 required has been built into the ²⁰²⁵⁄₂₆ budget alloc­a­tions. These pro­vi­sions can be repur­posed as for­ward pay­ments of our com­mit­ted pro­gramme con­tri­bu­tion, or real­loc­ated back to oth­er oper­a­tion­al plan pro­vi­sions, should third party fund­ing be secured from Trans­port Scot­land or oth­er fund­ing sources to sup­port these activities

Effi­ciency savings

1. In pre­vi­ous years grant award let­ters have included a require­ment to achieve effi­ciency sav­ings. There appears to be some accept­ance that effi­ciency sav­ings may not be pos­sible in the cur­rent eco­nom­ic cli­mate, but we await cla­ri­fic­a­tion on this requirement.

Next steps

1. The Committee’s views on the budget pos­i­tion, and par­tic­u­larly the key assump­tions and estim­ates made as set out in the above sec­tions, are invited at this time. Fol­low­ing the Com­mit­tee meet­ing, the budget devel­op­ment pro­cess will con­tin­ue, and the views of Com­mit­tee reflec­ted on pri­or to final­isa­tion of the budget paper to be presen­ted to the board at its meet­ing in March.

Louise Allen 09 Janu­ary 2025 louiseallen@​cairngorms.​co.​uk