Paper 2 Budget and operational plan 25-26

Cairngorms Nation­al Park Authority

Form­al Board Paper 2

28 March 2025

Page 1 of 8

For decision

Title: ²⁰²⁵⁄₂₆ budget and oper­a­tion­al plan

Pre­pared by: Louise Allen, Head of Fin­ance and Cor­por­ate Operations

Pur­pose

This paper sets out the Park Authority’s pro­posed budget for the ²⁰²⁵⁄₂₆ fin­an­cial year.

It provides the Board with the oppor­tun­ity to con­sider the over­all budget pos­i­tion, togeth­er with the impact of any key assump­tions made in estab­lish­ing budget estimates.

The paper also presents the pro­posed oper­a­tion­al plan for ²⁰²⁵⁄₂₆ (Annex 4) to allow mem­bers to scru­tin­ise, and take assur­ance on, the alloc­a­tion of avail­able resources, both fin­an­cial and staff resources. The budget alloc­a­tions seek to provide a bal­anced approach to deliv­ery of the Park Authority’s agreed stra­tegic object­ives, as set out in the approved Nation­al Park Part­ner­ship Plan and Cor­por­ate Plan.

Annex 3 to the paper sets out the risks iden­ti­fied dur­ing budget devel­op­ment and ref­er­ences these to the Stra­tegic Risk Register, which is also provided for ref­er­ence (Annex 5).

Recom­mend­a­tions

The Board is invited to:

a) Approve the Cairngorms Nation­al Park Authority’s budget and oper­a­tion­al plan for ²⁰²⁵⁄₂₆ as set out in this paper. b) Con­sider the impact of the budget and oper­a­tion­al plan on the stra­tegic risk register and any amend­ments arising.

Stra­tegic context

1. This paper builds on the inform­a­tion provided to the Board at its busi­ness ses­sion in Decem­ber 2024, and sub­sequent dis­cus­sions with the Resources Com­mit­tee at its meet­ing in Janu­ary 2025.

Cairngorms Nation­al Park Authority

Form­al Board Paper 2

28 March 2025

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1. The Authority’s pre­dicted set­tle­ment from Scot­tish Gov­ern­ment for ²⁰²⁵⁄₂₆ is:

		£m
Grant in Aid	Resource fund­ing — RDEL	7.916
Grant in Aid	Cap­it­al fund­ing — CDEL	1.750
Peat­land restoration	RDEL	0.650
Peat­land restoration	CDEL	3.000

1. 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.

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 Annex 3 to this paper.

Over­view of draft ²⁰²⁵⁄₂₆ budget position

1. The over­view of the pro­posed budget for ²⁰²⁵⁄₂₆ is presen­ted in Annex 1, while Annex 2 provides a com­par­is­on of the pro­posed ²⁰²⁵⁄₂₆ budget with the approved budget for ²⁰²⁴⁄₂₅.

2. The budget sets out the Park Authority’s pro­pos­al for the applic­a­tion of core resources provided by Scot­tish Gov­ern­ment through the Nation­al Parks budget, and through oth­er Scot­tish Gov­ern­ment budgets: for peat­land res­tor­a­tion, com­munity led loc­al devel­op­ment (CLLD) and nature recov­ery. In addi­tion, the budget includes the applic­a­tion of the sig­ni­fic­ant fin­ances provided for the second full year of deliv­ery of the Cairngorms 2030 (C2030) programme.

3. The Author­ity has yet to receive a final grant award let­ter for ²⁰²⁵⁄₂₆ from Scot­tish Gov­ern­ment. How­ever, cur­rent inform­a­tion on alloc­a­tions provides the best avail­able basis for budget plan­ning, des­pite uncer­tainty pending the final­isa­tion and receipt of grant award let­ters. We also await final noti­fic­a­tion of the alloc­a­tion for grants in sup­port of our peat­land res­tor­a­tion work, and for CLLD.

Cairngorms Nation­al Park Authority

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28 March 2025

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1. The avail­ab­il­ity of fin­an­cial sup­port through the Nature Res­tor­a­tion Fund (NRF) remains uncer­tain at present. How­ever, approv­al of Scot­tish Gov­ern­ment budgets provides the Author­ity with increased con­fid­ence that an alloc­a­tion of NRF fund­ing will be received for ²⁰²⁵⁄₂₆. Pro­jects that would be eli­gible for sup­port from the fund have been included in the budget alloc­a­tion, in sup­port the Park Authority’s pri­or­ity to deliv­er nature res­tor­a­tion out­comes (£220,000), and the equi­val­ent NRF fund­ing is assumed to be avail­able to the Park Author­ity. Receipt of this fund­ing would leave the cap­it­al (CDEL) budget in sur­plus. This sur­plus will not be alloc­ated to deliv­ery until con­firm­a­tion of NRF fund­ing is received. (Annex 3‑Risk1)

2. Fund­ing for CLLD is still to be final­ised, and the fig­ure of £350,000 included in the budget rep­res­ents our best estim­ate; we await decisions from Scot­tish Gov­ern­ment on both the total fund­ing avail­able for CLLD, and how it will be alloc­ated across part­ner bod­ies. This presents very lim­ited risk to the over­all budget pos­i­tion presen­ted. Any vari­ation in assumed income will be equally off­set by vary­ing the fund­ing awar­ded, while resource cov­er for staff costs has been confirmed.

3. This pos­i­tion is rel­at­ively com­mon at this point in set­ting the Park Authority’s budget for the year ahead. As part of our ongo­ing budget mon­it­or­ing activ­ity through the year, we will con­sider the suf­fi­ciency of income along­side the man­age­ment of expenditure.

4. Deliv­ery against the C2030 pro­gramme in ²⁰²⁵⁄₂₆ is expec­ted to cost £7 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. The bal­ance of C2030 pro­gramme fund­ing of £4.078 mil­lion to be met dir­ectly from pro­gramme fin­ances man­aged by the Park Author­ity out­side of our core Scot­tish Gov­ern­ment fund­ing is shown in Annex 1 as income along­side matched expenditure.

5. Inform­a­tion on the pro­posed budget for staff salar­ies is provided in para­graphs 22 to 26 below. Staff­ing costs for ²⁰²⁵⁄₂₆ (exclud­ing any poten­tial vacancy sav­ings) account for 43% of the total oper­a­tion­al plan income shown of £14,144 mil­lion. In the budget for ²⁰²⁴⁄₂₅ the like-for-like costs were 41% of total oper­a­tion­al plan

Cairngorms Nation­al Park Authority

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28 March 2025

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income (£13.701 mil­lion). Con­trib­ut­ors to the increase in staff­ing costs year on year include: α) ²⁰²⁵⁄₂₆ pay award £263,000 b) Increase in employ­er nation­al insur­ance con­tri­bu­tions £93,000.

1. Invest­ment in the ​‘People’ actions of the Cor­por­ate and Oper­a­tion­al Plans stems from fund­ing through both the core Nation­al Parks grant and ear­marked CLLD grants, on which the Park Author­ity part­ners with the Cairngorms Trust as Account­able Body. For budget con­trol pur­poses, these two strands of activ­ity have been developed sep­ar­ately in the budget fig­ures. Total invest­ment in the People ele­ments of the Park Authority’s plans total £0.699 mil­lion for ²⁰²⁵⁄₂₆, com­pared with £0.590 mil­lion in the pri­or year.

2. The fol­low­ing sec­tions present some spe­cif­ic points of estim­ate and judge­ment in the devel­op­ment of these budget estim­ates for con­sid­er­a­tion by the Board.

Income

1. Grant-in-aid for ²⁰²⁵⁄₂₆ is set to increase by £0.545 mil­lion, from £9.121 mil­lion to £9.666 mil­lion, a 6% increase in cash fund­ing from Scot­tish Gov­ern­ment for the com­ing fin­an­cial year. This is split between resource and cap­it­al fund­ing: α) Resource Depart­ment­al Expendit­ure Lim­its (RDEL) — increase of £605,000 b) Cap­it­al Depart­ment­al Expendit­ure Lim­its (CDEL) — decrease of £60,000

In addi­tion, fund­ing for peat­land res­tor­a­tion is assumed at: c) Peat­land res­tor­a­tion RDEL — increase of £70,000 to £650,000 (staff and non-staff costs) d) Peat­land res­tor­a­tion CDEL — stand­still fund­ing of £3 million

1. 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 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

Cairngorms Nation­al Park Authority

Form­al Board Paper 2

28 March 2025

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than has been dis­trib­uted in ²⁰²⁴⁄₂₅, and this is reflec­ted in the budget alloc­a­tion of £350,000. (Annex 3‑Risk 2)

1. Oth­er sources of income (£250,000) included in the draft budget pos­i­tion are: α) Oth­er grant fund­ing b) Plan­ning fees, and c) Bank interest.

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

2. The budget includes a pay award impact of £263,000.

Break­down of payroll budget 2025 – 26	£m
Full year cost of staff cohort before the 2025 – 26 award	6.952
Increase in rate of employ­er nation­al insurance	0.093
Award 2025 – 26	0.263
Total budget estim­ate 2025 – 26	7.308

1. Estim­ates have been made of the levels of staff payroll recov­er­ies from extern­al fund­ing sources. Cur­rent estim­ates are for recov­er­ies through C2030 of £1.105 mil­lion and through CLLD of £62,000 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 final payroll expendit­ure in the year sig­ni­fic­antly below ori­gin­al budget estim­ates, in the order of £300,000. This pos­i­tion has been man­aged over the year as part of wider budget man­age­ment, which con­tin­ues to deliv­er a fore­cast bal­anced out­turn pos­i­tion for ²⁰²⁴⁄₂₅ fin­an­cial year. The avail­ab­il­ity of vacancy sav­ings depends on the cir­cum­stances of staff turnover and recruit­ment in any par­tic­u­lar year and is there­fore inher­ently dif­fi­cult to estim­ate. In the past, a met­ric of 5% of the total

Cairngorms Nation­al Park Authority

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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 £150,000 has been included in the ²⁰²⁵⁄₂₆ budget (2.4% of budget). The payroll budget will be mon­itored closely through­out the year, with any avail­able addi­tion­al sav­ings being applied to oper­a­tion­al deliv­ery. (Annex 3‑Risks 3 & 4).

1. Using this mod­el­ling, the net cost for staff salar­ies in ²⁰²⁵⁄₂₆ is there­fore £5.991 million.

Payroll budget net of recharges and sav­ings	£m
Total budget estim­ate 2025 – 26	7.308
Total recov­er­able	(1.167)
	6.141
Vacancy sav­ings / recruit­ment delays	(0.150)
Total net cost	5.991

Oper­a­tion­al plan investment

1. The full oper­a­tion­al plan, flow­ing from the core object­ives of the Cor­por­ate Plan, is set out at Annex 4 to this paper. Total budget of £5.796 mil­lion has been alloc­ated across our oper­a­tion­al plan delivery.

	£m
Cli­mate adapt­a­tion fund	200
Peat­land res­tor­a­tion programme	3,020
Nature and climate	645
People	349
Place	821
Pro­gramme con­tri­bu­tion Cairngorms 2030	450
Com­mu­nic­a­tions	198
Cor­por­ate support	293
Total Oper­a­tion­al Plan investment	5,976

1. In line with recent years, the oper­a­tion­al plan has been budgeted without ​“over- pro­gram­ming”. The total value of the budget alloc­ated to the oper­a­tion­al plan is based on expect­a­tion of the total income likely to be avail­able at the begin­ning of the fin­an­cial year. No addi­tion­al pro­vi­sion has been made for slip­page over the course of the year, for example, by budget­ing for a great­er value of oper­a­tion­al plan invest­ments than are cap­able of being covered by fund­ing levels. This is a prudent approach, giv­en the vari­ous uncer­tain­ties in income levels and expenditure

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pres­sures in the com­ing year. If slip­page or under­spend arises in any pro­jects or budget areas, man­age­ment action can be taken to real­loc­ate avail­able resources to pri­or­ity areas of invest­ment or to cov­er oth­er emer­ging budget pressures.

1. 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	2024 – 25 approved budget	Increase/​(decrease)	Com­ment
	£’000	£’000	£’000
Cli­mate adapt­a­tion fund	200	370	(170)	Reduc­tion sup­ports nature res­tor­a­tion deliv­ery (Annex 3‑Risk 5)
Nature res­tor­a­tion	220	300	(80)	2025⁄26 budget cov­ers pri­or­ity projects
Cor­por­ate	293	393	(100)	Spe­cif­ic cap­it­al pro­jects planned for facil­it­ies and IT in 2024⁄25

Run­ning costs and infla­tion­ary impacts (Annex 3‑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 £25,000 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): α) Microsoft applic­a­tions b) Fin­ance soft­ware – Access Fin­an­cials c) Payroll and HR soft­ware — Access d) E‑planning sys­tem- Idox e) Geo­graph­ic Inform­a­tion Sys­tem (GIS)

3. Addi­tion­al budget 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. Total costs for this ser­vice are anti­cip­ated to be in the region of £100,000.

Cairngorms Nation­al Park Authority

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28 March 2025

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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. Man­age­ment will in any case con­tin­ue to seek effi­cien­cies in our oper­a­tions, with for example sig­ni­fic­ant invest­ment in digit­al solu­tions to office pro­cesses, vacancy and oth­er sav­ings in staff­ing where pos­sible and through pro­cure­ment and man­age­ment of contracts.

Next steps

1. Fol­low­ing board con­sid­er­a­tion and approv­al of a budget for ²⁰²⁵⁄₂₆, alloc­a­tions will be con­firmed to budget hold­ers to allow plans for deliv­ery over the com­ing fin­an­cial year to commence.

2. We will con­tin­ue to provide budget mon­it­or­ing reports to the Board’s Resources Com­mit­tee over the course of the year ahead, identi­fy­ing any sig­ni­fic­ant budget vari­ations and action in man­aging those variations.

3. The estab­lished pro­cess of review and devel­op­ment of the Stra­tegic Risk Register will con­tin­ue through the year.

Louise Allen 13 March 2025 louiseallen@​cairngorms.​co.​uk