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CAIRNGORMS NATIONAL PARK AUTHORITY 
Finance Committee Paper 1 18/01/08 

CAIRNGORMS NATIONAL PARK AUTHORITY 
FINANCE COMMITTEE 


FOR DISCUSSION 


Title: 2008/11 Budget Development 

Prepared by: David Cameron, Head of Corporate Services 


Purpose 

To consider a number of key issues in development of financial and staffing plans for the 
coming three-year period, in order to inform development of the Corporate Plan and 
associated budgets for 2008 to 2011. 


Recommendations 

The Committee is invited to consider the following points for discussion: 

a) Does there continue to be a need to set a ceiling on staff numbers or a guideline 
limit on total Core costs? If so, what are the perceived merits of doing so? 

b) What are the financial advantages and disadvantages of maintaining a level of 
flexibility in the staffing structure? 

c) In anticipation of the proposed 2% efficiency saving target being implemented by 
the Scottish Government, where would the Committee wish the Management 
Team to focus their attention in seeking to realise these savings? 


Executive Summary 

The balance of expenditure between staff and other “Core” costs and the amount of resource 
available to invest in Operational Plan activities has been a regular point for discussion by 
Committee members. This paper is intended to facilitate that discussion in the lead up to 
concluding the Corporate Plan and associated budget for the coming three year period. 

The outcome of these discussions will be used to inform the budget for the coming three 
year Corporate Plan period, which are due to be brought to the next meeting of the 
Committee. 



PAGE 2

2008/11 BUDGET DEVELOPMENT 
FOR DISCUSSION 

Background 

1. The Committee considered a model of forecast income and expenditure over the 
forthcoming corporate plan period, 2008 to 2011, at its meeting in September 2007. 
This model was updated, on the basis of draft resource allocations made available as 
part of the Scottish Government’s draft budget announcement, in a subsequent paper 
to the Committee on 30 November 2007. 

2. The purpose of this paper is to provide an update on the current staffing position of 
the Authority, and in particular on the potential flexibility within the staffing 
structure were it deemed essential by the Board to reduce expenditure on in-house 
staff. 

3. The Committee meeting on 30 November also agreed the need to discuss how the 
Authority can incorporate expenditure on projects which may have long term 
financial commitments into the Authority’s financial model and Operational Plan. 
This paper is also intended to help support that discussion. 


Focus of Discussion 

4. The balance of expenditure between staff and other “Core” costs and the amount of 
resource available to invest in Operational Plan activities has been a regular point for 
discussion by Committee members. This paper is intended to facilitate that 
discussion in the lead up to concluding the Corporate Plan and associated budget for 
the coming three year period. Key points for discussion appear to be: 

a) Does there continue to be a need to set a ceiling on staff numbers or a 
guideline limit on total Core costs? If so, what are the perceived merits of 
doing so? 

b) What are the financial advantages and disadvantages of maintaining a level 
of flexibility in the staffing structure? 

c) In anticipation of the proposed 2% efficiency saving target being 
implemented by the Scottish Government, where would the Committee wish 
the Management Team to focus their attention in seeking to realise these 
savings? 

Budget Structure 

5. The Committee will by now be familiar with the split of the Authority’s budget 
between “Core” and “Operational Plan” aspects of its activities. Core budgets cover 
recurring annual costs such as Board members’ fees, staff salaries, training and 
development activities and other annual costs such as office rent and audit fees. 
Operational Plan budgets cover more one-off or time limited activities and projects. 


PAGE 3

6. While split for accounting and budgeting purposes, these aspects of the Authority’s 
activities are nevertheless closely linked in operational terms. Core staff involvement 
is essential to management, development and delivery of the Operational Plan 
activities, whether those activities ultimately result in some form of collaborative 
project, research, or grant. Often delivery of an Operational Plan activity may be the 
result of the investment of core staff time (along with associated infrastructure 
support) in engaging with partners in order to deliver outputs through others. Some 
staff may also have part or all of their salary costs directly attributed to an 
Operational Plan activity. 

7. Draft forward budget forecasts presented to the Committee to date have broadly 
aimed at maintaining the current balance between the provision for core and 
operational plan expenditure, of 65% and 35% of resource respectively. Current 
forecast of provision for each of these budget areas, as presented to the Committee 
on 30 November, is summarised again in Table One below. 

Table One: Summary of Forecast Core and Operational Plan Expenditure 2008/11

2007/08 (for comparison) 

Core activities (£000) 
2,974
Staff costs included in Core (£000) 
2,043
Operational Plan provision (£000) 
1,682
Total Cash Expenditure (£000) 
4,656


2008/09 

Core activities (£000) 
3,065 
Staff costs included in Core (£000) 
2,115 
Operational Plan provision (£000) 
1,716 
Total Cash Expenditure (£000) 
4,781 


2009/10

Core activities (£000) 

 3,158 
Staff costs included in Core (£000) 
2,189 
Operational Plan provision (£000) 
1,750 
Total Cash Expenditure (£000) 
4,908 


2010/11

Core activities (£000) 
 3,254
Staff costs included in Core (£000) 
 2,266
Operational Plan provision (£000) 
 1,785
Total Cash Expenditure (£000) 
5,039 


8. The Authority has continued to operate to date within a ceiling of 50 FTE Core staff, 
and forward budget projections set out in Table Two (and in previous papers on 
future budget development to the Committee) remain at this overall establishment 
level. While Core staffing projections for the coming year are currently estimated at 
£2.115m, the Authority’s forecast total paybill for 2008/09 is some £2.26m. This figure 
includes some 6.1 FTE project staff engaged in Operational Plan activities who are 
managed by the organisation and on the payroll. 

Staffing Structure 

9. In developing the Authority’s staff structure over the last few years, the Management 
Team has sought to ensure that contractual arrangements are used which are 
appropriate to the requirements of the organisation and commensurate with the 
anticipated duration of the activities concerned. Hence a number of project and core 
posts have been established on the basis of fixed-term contracts. The use of fixed-
term secondments from partner organisations as a recruitment method has 
complemented these contractual arrangements, overcoming difficulties frequently 


PAGE 4

encountered by organisations when seeking to appoint staff into relatively short term 
(2 years or less) fixed term posts. 

10. Through using these fixed-term contractual arrangements where appropriate, the 
Management Team has sought to preserve ongoing flexibility in deployment of 
financial and staff resources. This recognises and provides for the potential changes 
in priorities which may arise for the organisation over time, and / or changing skill-
sets which may be required by the Board to achieve objectives. 

11. The result of this in-built flexibility in staffing contracts is set out in Table Two. The 
table sets out the total full-time equivalent (FTE) staff posts falling for review at the 
end of current contract terms over the next three year period, together with 
associated expenditure in terms of total paybill (salary plus employer’s pension and 
National Insurance Contributions). For completeness, where length of service is such 
that a redundancy payment would be due were the contract not extended, the 
statutory redundancy costs are also shown. For each year, figures are presented for 
both the potential flexibility in the year in question (i.e. taking into account the point 
in the year that contracts are due to complete) and the full year effect. For example, 
were a contract with a paybill effect of £50,000 due to expire on 30 September (half 
way through a year) the potential flexibility available to the organisation in either 
varying the role or concluding the activity and diverting the financial resource 
elsewhere would be £25,000 (0.5 FTE). The full year effect – the flexibility available 
for the next full financial year – would be the full £50,000 (1 FTE). 

Table Two: Staff Contracts Due For Revision 2008/11

 2008/09   /  2009/10   /  2010/11 

Potential Flexibility in Year: 

Paybill 
297,776 
2,754 
60,643 

FTE 
8.48 
0.09 
1.50 

Redundancy 
9,145 
930
 5,425 


Full Year Effect: 

Paybill 
361,079 
16,523 
84,733 

FTE 
9.11 
0.53 
2.00 

Redundancy 
9,145 
930 
5,425 

12. Of course it is not possible to simply take out all posts from the Authority’s staffing 
establishments whenever these contracts expire without having a significant, adverse 
effect on the Authority operational performance and effectiveness. The expenditure 
figures highlighted should not, therefore, be looked at as presenting opportunities to 
make cost reductions of equivalent amounts in all cases. However, the contract end 
dates do provide points of flexibility where it is appropriate to evaluate activity, 
consider whether it is appropriate to alter focus, or, indeed, to cease an activity. 


PAGE 5

Efficiency Savings 

13. The Authority has yet to receive any further information on the operation of the 2% 
efficiency savings built into the Scottish Government’s draft budget for 2008 to 2011. 
Given the normal focus for efficiency saving measures, it is likely that the application 
of these savings over the course of the coming 3 year period will be on areas of core 
operations. Consequently, it is likely that Operational Plan provision will begin to 
account for an increasing proportion of total cash expenditure as efficiency measures 
are applied. 

Long-term Financial Commitments: Budgetary Control Measures 

14. In order to ensure that sufficient flexibility remains in determining priority 
investments in each year’s Operational Plan, the Management Team has 
implemented a restriction that future years’ financial commitments arising from 
multi-year projects should not exceed 30% of current budget. This seeks to ensure 
that even in years where there is some uncertainty over future funding levels, there 
should be sufficient scope to incorporate new priority investments for the coming 
year. 

Focus of Discussion 

15. In light of the information set out in the preceding sections, the Committee is invited 
to consider the key points for discussion highlighted at the outset of the paper: 

a) Does there continue to be a need to set a ceiling on staff numbers or a 
guideline limit on total Core costs? If so, what are the perceived merits of 
doing so? 

b) What are the financial advantages and disadvantages of maintaining a level 
of flexibility in the staffing structure? 

c) In anticipation of the proposed 2% efficiency saving target being 
implemented by the Scottish Government, where would the Committee wish 
the Management Team to focus their attention in seeking to realise these 
savings? 

Next Steps 

16. The outcome of these discussions will be used to inform the budget for the coming 
three year Corporate Plan period, which are due to be brought to the next meeting of 
the Committee. 


DAVID CAMERON 
9 January 2008 

davidcameron@cairngorms.co.uk