Finance & Delivery Cttee Paper 4 Budget 19/ 20

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance and Deliv­ery Com­mit­tee Paper 4 22/02/19

CAIRNGORMS NATION­AL PARK AUTHOR­ITY FIN­ANCE AND DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: ²⁰¹⁹⁄₂₀ BUDGET DEVELOPMENT

Pre­pared by: Dav­id Camer­on, Dir­ect­or of Cor­por­ate Services

Pur­pose This paper presents the cur­rent pos­i­tion on devel­op­ment of the Authority’s budget for the ²⁰¹⁹⁄₂₀ fin­an­cial year.

Recom­mend­a­tions The Fin­ance and Deliv­ery Com­mit­tee is asked to: a) Con­sider the update on the estim­ated budget pos­i­tion for ²⁰¹⁹⁄₂₀; b) Con­sider wheth­er any aspects of the budget mer­it fur­ther con­sid­er­a­tion in the devel­op­ment of final pro­pos­als to be presen­ted to the Board in March.

Back­ground

1. The Board reviewed the Authority’s budget estim­ates as at end of Janu­ary 2019 as part of its busi­ness ses­sion on I Feb­ru­ary 2019. As advised at that meet­ing, devel­op­ment work was ongo­ing on budget estim­ates with a fur­ther update to be brought to this Com­mit­tee meet­ing for con­sid­er­a­tion. This paper presents the cur­rent pos­i­tion on the Authority’s budget devel­op­ment and high­lights a few key impacts on resources since the meet­ing of I February.
2. The Board’s Staff­ing and Recruit­ment Com­mit­tee has also con­sidered the detail of the Authority’s planned approach to staff pay awards at its meet­ing of I Feb­ru­ary 2019. The Com­mit­tee endorsed management’s pro­posed approach to pay for ²⁰¹⁹⁄₂₀ with­in the wider para­met­ers of the Scot­tish Government’s Pub­lic Sec­tor Pay Policy for ²⁰¹⁹⁄₂₀. The fin­an­cial con­sequences of the Authority’s pro­posed approach to pay are incor­por­ated into the budget estim­ates for ²⁰¹⁹⁄₂₀.

Over­view of Budget Pos­i­tion for ²⁰¹⁹⁄₂₀

1. A sum­mary of the present budget pos­i­tion for ²⁰¹⁹⁄₂₀ is presen­ted in Annex 1. Over­all, the budget pos­i­tion has been brought closer to the break-even tar­get for the year, with a net expendit­ure pos­i­tion of £32,000 com­pared with the pre­vi­ous £47,000 net expendit­ure pos­i­tion. This change is the res­ult of a num­ber of spe­cif­ic actions.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance and Deliv­ery Com­mit­tee Paper 4 22/02/19 Key budget move­ments since the fig­ures were presen­ted to the Board busi­ness ses­sion on I Feb­ru­ary are: a) Employ­ers’ pen­sion con­tri­bu­tions: we received noti­fic­a­tion on 8 Feb­ru­ary of a sig­ni­fic­ant increase in employ­ers’ pen­sion con­tri­bu­tions, with an increase in aver­age con­tri­bu­tions from 21% to 27% of salary. We had anti­cip­ated a small increase in these con­tri­bu­tions, how­ever the scale of the increase was not expec­ted and hence not allowed for in pre­vi­ous fig­ures. The total cost of the increase is estim­ated at £155,000 with some £66,000 covered by fund­ing expec­ted in sup­port of pro­ject posts. There is, there­fore, a net impact of £89,000 on the Authority’s own resources. b) To man­age pen­sion increases, we have instig­ated a hold on two vacant posts in the estab­lish­ment. Unless there are oth­er improve­ments in the budget pos­i­tion these posts will not be recruited in ²⁰¹⁹⁄₂₀. This saves an estim­ated £86,000 over the year. Mem­bers should note that the vacant posts held are not in plan­ning and will not there­fore cause any impact on that ser­vice over the year. There are a num­ber of multi-year pro­jects com­ing to an end in 2020 and the Authority’s fund­ing for those posts will there­fore fall out of our budget pro­vi­sions. There may there­fore be oppor­tun­ity to com­mence recruit­ment to these posts toward the end of ²⁰¹⁹⁄₂₀ for com­mence­ment in ²⁰²⁰⁄₂₁. c) Recog­nising that these two posts have been effect­ively removed from budget, we have reduced the estim­ated resid­ual vacancy sav­ings that can be achieved by £49,000 to avoid double-count­ing sav­ings impacts. These posts were ori­gin­ally expec­ted to remain vacant until sum­mer 2019. d) A reduc­tion has been made in staff and board train­ing and travel pro­vi­sions of £15,000. e) Rel­at­ively small reduc­tions in Oper­a­tion­al Plan invest­ment pro­pos­als have been imple­men­ted to bring the over­all budget at com­mence­ment of the year to a reduced and more accept­able net expendit­ure position.

1. The Authority’s cur­rent Oper­a­tion­al Plan pro­vi­sions retain a planned invest­ment of £1.213 mil­lion into pro­ject work in the Nation­al Park and toward deliv­ery of Nation­al Park Part­ner­ship Plan pri­or­it­ies. This level of planned invest­ment at the com­mence­ment of the year com­pares well with pre­vi­ous years. The pos­i­tion also com­pares favour­ably with the Cor­por­ate Plan pro­jec­tions of Oper­a­tion­al Plan invest­ment of £1.115m for ²⁰¹⁹⁄₂₀. A sum­mary of cur­rent Oper­a­tion­al Plan estim­ates is presen­ted in Annex 2 to this paper.
2. The res­ult­ant pos­i­tion now presen­ted con­tin­ues to show an excess of expendit­ure over expec­ted income of £32,000. A small net expendit­ure pos­i­tion is the nor­mal start point for the Author­ity and allows for a degree of slip­page in invest­ment plans over the course of the year. As such, the over­all pos­i­tion now presen­ted is in line with the budget set­ting pos­i­tion for pre­vi­ous fin­an­cial years.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance and Deliv­ery Com­mit­tee Paper 4 22/02/19 Next Steps

1. The Man­age­ment Team and Oper­a­tion­al Man­age­ment Group will con­tin­ue to review and devel­op budget estim­ates as neces­sary for sub­mis­sion of final budget estim­ates to the Board at its meet­ing on 29 March. This devel­op­ment work will also include estim­a­tions of staff and oth­er resource costs to be alloc­ated against the Oper­a­tion­al Plan activ­ity lines in order to give sight of the total resource invest­ment into each activity.
2. The Dir­ect­or of Cor­por­ate Ser­vices and Fin­ance Team will also con­tin­ue to closely mon­it­or the budget pos­i­tion for ²⁰¹⁸⁄₁₉ and explore any oppor­tun­it­ies arising to accel­er­ate planned invest­ment from ²⁰¹⁹⁄₂₀ into the cur­rent year should resources and invest­ment plans allow. This will alle­vi­ate the excess of expendit­ure over income budgeted for the com­ing year, while also provid­ing for poten­tial rein­state­ment of some of the budget alter­a­tions required over the pre­vi­ous weeks.

Dav­id Camer­on 13 Feb­ru­ary 2019 davidcameron@​cairngorms.​co.​uk