Accounts Commission June 2025 meeting – transcript

Jo Armstrong  0:00
So welcome everyone to today’s Accounts Commission meeting, which is in Edinburgh today, and we're trialling a slight different format, so we're using the laptops as the video facility. So hopefully it will work well.
It is being recorded. This recording will be made available via the Accounts Commission's website as soon as, as possible and is available... on request in the interim.
Can I ask everybody to turn off their mics on their laptops.
Members of the public are also welcome to observe the public session of the Commission's meeting. Those who are watching, thank you for taking the time to join us. You're here to observe and not to participate. And therefore your camera and microphone are already off.
I also want to particularly welcome representatives from East Lothian Council here in the room this morning, so thank you for, for joining us.
Anyone participating in the meeting who's joining us online, please keep your camera off and your microphone mute, except when it's your item to discuss.
Can I also ask those who are speaking during the meeting, whether here in person or online, to speak clearly and loudly, for the benefit of the recording, and for colleagues or observers who have reduced hearing.
So on that basis we now start at item 1.  Sarah, apologies for absence.

Sarah Watters
No apologies submitted today. Thank you.

Jo Armstrong  1:27
Thank you.
Item 2 is declarations of connections and we've got a few of them here this morning. So I can ask members with a connection or interest regarding any items on today's agenda to please state the connection or interest and whether they consider it material enough to need to recuse themselves from… meeting.
Carol. Helena. Jennifer. Angela.

Carol Evans
I've got a declaration on the future of public audit model because I’m a board member of one of the audited bodies.

Jo Armstrong
Thank you. Jennifer.

Jennifer Henderson
Two items. I live in East Lothian Council area, don't consider that material enough to recuse myself from the best value discussion. And I'm the chief executive of a public body that's audited by Audit Scotland, and I've checked with the ethics partner who’s happy for me to participate in the discussion on FPAM this afternoon. 

Jo Armstrong
OK. Helena.

Helena Gray 
Thank you. As noted on my register of interests, I am a resident of East Lothian Council.
Both the auditors and the ethics partner are aware of my connection and were aware in advance of me preparing the controller of audit reports, and were content that I can…

Jo Armstrong
OK. Angela.

Angela Leitch
I’ve got two declarations of interest. One on the best value in East Lothian Council. Just to say that I was chief executive there up until 2019. Having checked with the ethics partner, though, there's nothing to say that I can't participate in the discussion.
And the item number 15, future of public audit, I’m a member of audited bodies but again, able to participate in the discussion.

Carol Evans
And likewise, I missed that bit, I checked with the…

Jo Armstrong
Malcolm.

Malcolm Bell
Yeah, item 15, chair. Just a declaration of connection. Like the others I'm a member of an audited body. So it's just by way of transparency and I don't believe it's material enough to recuse.

Jo Armstrong
OK. So item 3 then takes us to order of business. As normal I'd like to seek the Commission’s approval for the order of business today. I propose that we consider items 9 to 16 in private for the reasons set out on the agenda. Are members agreed?
Takes us to item 4, minutes and matters arising from the previous meeting. Sarah?

Sarah Watters  3:50
Yes, chair. There was one outstanding action in relation to establishing what work is being done in relation to Council Tax reform and an update on that is provided in the local government policy update today.
Just two other points. Item 12, the budget briefing, which was published on the 22nd of May. Really good range of media coverage and thank you to Derek for his work as sponsor and media lead on that.
And item 15, the quality of public audit in Scotland report was published yesterday with an amended key message 1 to reflect the Commission discussions at the last meeting. Very happy to take any comments or questions on the minutes.

Jo Armstrong  4:36
We have already approved the minute by correspondence, but again we tend to approve… Thank you.
OK so that brings us to the first substantive item on today’s agenda which is the Best Value for East Lothian Council.
This is a statutory report by the Controller of Audit on Best Value in East Lothian Council. The report draws attention to the findings from the council’s 2023-2024 annual audit report on how effectively the Council demonstrates best value.
The Commission is invited to consider and endorse the Controller's report in this session. We will then consider in private later today how we wish to proceed.
The Controller and the audit team are here to provide any clarifications or answers to questions that members may have on both the Controller’s report, and the annual audit report as it relates to best value. And we have in the room Helena, John Boyd and Mark Ferris, the audit team and the Controller of Audit.
I'm going to hand over to Helena, for outlining how she wants us to consider the issues that have been raised in her report. 

Helena Gray  5:47
Thank you, chair, and I welcome the opportunity to present my Best Value report on East Lothian Council to the Commission today, and I'm delighted to be joined by John and Mark who are sat here beside me from the audit team.
As my report sets out, the Council are committed to the principles of best value and have made good progress in implementing the improvement actions arising from the best value assurance report in 2018. The Council has a focus on continuous improvement and recognise that there is still more to be done to support the delivery of services in a financially sustainable way, and that further work is required to address internal control inconsistencies highlighted by the external auditor. 
Auditors concluded that the Council's leadership have been effective in setting out a clear vision and priorities, and took steps to reprioritise in February 2024 to take account of the changing context.
The Council has clear outcome targets for priority areas and appropriate arrangements for reporting performance, although auditors have highlighted that it could enhance public performance reporting and it should look to articulate what its level of tolerance is for performance areas that have been deprioritised.
Of the Council's top 10 indicators, five were reported as maintained or improving, and two showing as declining, with data unavailable for three indicators at the time of the accounts. Looking at the local government benchmarking framework indicators, there is a broadly positive picture across all themes.
45% have improved since last year and 56% have improved since the base year.
Auditors have concluded that the Council has appropriate budget-setting and monitoring arrangements in place, but, as I've already mentioned, have highlighted internal control inconsistencies which need to be addressed before the Council migrates to a new financial system. 
As with many councils, East Lothian Council faces significant financial challenges and I'd like to draw out a couple of key points from my report today.
Firstly, the Council has a forecast cumulative budget gap of 45.9 million for the period 2026/27 to 29/30, but as yet to set out how it will close this gap.
Secondly, in 2023/24 the Council struggled to deliver against its savings plans and reported an overspend of 12.3 million, which was met by both IJB and Council reserves.
Thirdly, the Council's total usable reserves at 31st of March 2024 was 17.1% of its budget, which is below the national average of 23.9%, and this may fall further when the outturn is reported.
And finally, the Council's financial strategy recognises that it must minimise the use of one-off resources to balance the budget, but it is clear that effective management of the Council reserves will be a necessary part of maintaining financial sustainability.
The Council needs to set out how it will address its future budget gaps and, given its challenging reserves position, how it will keep a close eye on its financial resilience.
And of course, very happy to take further questions. Thank you.

Jo Armstrong
Thank you, thank you Helena.
As is, has become the approach we take on these to help those who are watching and to help us collate our ideas and thoughts, we have a series of themes we will be asking questions around. Those themes are under finance, transformation, leadership, workforce, community engagement and, depending on where we cover performance itself, performance will be also picked up.
We have a lot of questions and everybody's got a chance to ask their questions, but if we start off then with finance, if I can ask Derek to lead off.

Derek Yule  9:25
Thanks very much, chair, and thanks for the report. I thought it probably at first reading it read quite well and a lot of building blocks there, but I guess when you started to drill down, there was a few queries that I had and I hope, hopefully I can maybe try and tease them out. 
I mean, obviously a big concern for the Commission with any Council is around about financial sustainability.
I think probably it's fair to say from reading the report and what the way, East Lothian perhaps faces greater challenges than some, I think, particularly with the growth in population. But I wanted, if I could break questions down into two areas, I'll come onto financial sustainability in a minute. 
But I wanted to touch on the financial systems and controls because one of the concerns reading your report and associated annual audit report, and I'm conscious that's about a year out of date, date now.
Round about finance, I suppose one of the things that was coming out to me was a concern about the capacity and the competency of the finance team. Now I know they have a very experienced section 95 officer been there for a number of years, but the wider team.
There was 4 separate issues within the report that sort of started ringing a few alarm bells for me.
One was the bit you highlighted, Helena, about ongoing internal control inconsistencies and inefficiencies. So the word, the use of the word ongoing suggested obviously it's more than one year, so it'd be interesting to know because obviously the Council's ability to deal with the future budget challenges will, will depend critically on the, the strength of its internal controls, so I'd be interested to know a bit more about that.
There seemed to be quite a number of adjustments to the 23/24 accounts, apart from the usual suspects that crop up in every Council’s report about pensions and assets, but… so again, sort of linking back to the, the strength of the team, is there something there that we should be concerned about?
I note there's a number of sort of, systems that seem to be sort of coming to the end of life. You mentioned particularly the financial system. I’m conscious later on the agenda we'll be looking at audits that are delayed and one Council in particular has an audit delayed because of the introduction of a new financial system.
So I’d be… I'm not sure what stage, whether they've started that work or it’s still to start, but that's a link into previous concerns about the capacity within the team.
How assured can we be that the team has the strength to be able to implement a financial system and addressing internal control issues at the same time?
And maybe just finally, I thought some of the responses to the audit report were a bit… woolly’s probably not… I can't think of a really good… but they didn't seem terribly, I wasn't getting the feeling that there was a real purpose to actually address some of the issues within a reasonable timescale, so again, it'd be useful to get an update on that, so…
Hopefully you can resolve some of the concerns I have.

Helena Gray 
Thank you very much. And there's a lot within that and I'll bring in the audit team to go into some of the more detail and I think specifically to talk about their observations on the capacity and strength of the finance team as well.
Just to pull out a couple of things to begin with, though. I think in terms of the new financial system, that's expected to go live later this year, I think October is the target date for that. And again, the team can talk about how those risks are being managed. I think as you've highlighted, we know that any major change in financial system does carry risk, but I think in this case as well, there are opportunities in terms of the, addressing, using the implementation of that system to address some of the control weaknesses that auditors have, that have highlighted.
Just to touch on those, so those were identified in the 22/23 audit and were summarised in a separate management report to the Council, followed up by auditors in the 23/24 audit. 
And again John and Mark will come on to explain their findings on that in a bit more detail, and the further testing that they did as well to, to assure themselves as part of the audit to support their audit opinion. 
And again, John, do you want to say something else about the audit adjustments as well?

John Boyd
Thanks, Helena. I'll just touch initially on the,  and actually some of the points are clearly linked. I'll just touch firstly on the inefficiencies and control, control gaps that we identified as part of our audit procedures.
Essentially, there's a number of legacy systems within the Council's infrastructure that feed into the Council's main finance system.
As part of our audit procedures, we're required to have an end-to-end understanding of that process, and in undertaking those procedures we identified that there are a number of manual interventions required, quite resource intensive, where systems essentially don’t directly speak to each other, and it requires manual intervention both to upload as well as rec… perform reconciliations. And we've identified those across a number of, a number of systems and as a result, there are clearly opportunities there for, not only efficiencies, but also an increased risk of control gaps because of the level of manual intervention.
In response to that  we have undertaken, essentially, additional audit procedures. So we undertook greater levels of substantive testing, essentially more, increased sampling, if you like, over, over transactions and balances.
Part of that would manifest itself in increased levels of, identified, all the issues, essentially where you're identifying, you're auditing to a lower, a lower threshold and you're identifying an increased level of adjustments.
So I don't think the, the audit adjustments that we identified were indicate, indicative of capacity or capability issues within the, within the finance team themselves, and in actual fact, when I compare East Lothian Council's core finance team 
against other councils that I audit, I think they are relatively well, well- resourced with skills and experience across the finance team.
In terms of the new finance system, obviously any roll-out of a new IT project creates significant levels of risk. And as part of our audit work, we have been looking at the arrangements in place at the Council to give us assurance over those and how effectively they are managed. The Council has established a separate, a separate digital transformation board and they have oversight of the project delivery and the monitoring of the implementation of that. 
They also have a separate transformation team and they are set independently of the core Finance team who will oversee the implementation of that project. Obviously, there'll be, there'll be inter, inter, interdependencies with finance to feed into that programme, but we're comfortable in terms of the resourcing that they have for, for oversight … transformation.
That was really the, the key, I think, the, in terms of implement, implementing our audit observations, our audit recommendations. We should provide some context around the annual audit. 
Substantially our annual audit was actually complete around November, December time. There were obviously issues with the valuation work, which led to delays, further delays in finalising the accounts, and as a result, a number of the recommendations that we had made within our annual audit report and communicated to management, there were actions in flight, and as part of our ongoing audit procedures, we can see those, those actions being implemented. So for example, budget monitoring arrangements have been enhanced and refreshed. There's greater grip and control over expenditure in the year as the Council looks to tighten its financial management arrangements. 
And as part of the budget setting process, the Council's also looked at its financial strategy and revised that. So actually a number of the recommendations that we've got in our annual audit report, we can see, are already being implemented, but I appreciate some of the responses, as you said are, could be interpreted as quite woolly, in terms of how they’re being implemented, but it's part of our ongoing work we can see the steps that the Council's taken to address those.

Derek Yule 
Thanks John, I think that’s really reassuring, and I think it's interesting you've got the comparison with other councils that you audit as well. I think that, that's quite, quite helpful. 
I wonder if we could maybe move on then to financial sustainability because obviously that's a big concern. I think Helena, in your opening remarks, you've probably highlighted some of the concerns, that has probably removed some of the questions I was planning to ask, but there's, there’s maybe just one in particular. 
You talk about the budget gap of 45.9 million through to 29/30, and it does sound as if the Council's got the financial building blocks in place to monitor. I suppose, at a very simple and basic question around that.
You say that's predicated by 5% Council Tax increases and flat cash grant settlement. Has the Council done some modelling around those scenarios because it doesn't come through in the report so I was looking for some reassurance that there is modelling around that so we shouldn't get maybe carried away with the fact there's a single budget target because the reality is it won’t, whatever it will be, it won't, won’t be that.

Helena Gray 
So again, the team might want to say a bit more in detail about the scenarios that were modelled, if that'd be helpful, but the financial strategy ‘23 to ‘28 does consider a range of scenarios and that identified a funding gap of 41 to 63 million over the five year period, inclusive of delivering existing approved savings, so the 45.9 million cumulative budget gap quoted in the report, as you've said, assumes a flat cash settlement and a 5% increase in Council Tax for the rest of the period, but the financial strategy more generally includes a range of scenarios. John, I don't know if you want to say a bit more about those.

John Boyd
Yes, and the Council is obviously, one of, I would say, relatively unique as a council in terms of the additional challenges and uncertainties with a growing population and the impact that has in terms of service demand, and as a result, cost pressures. So actually the scenario planning and budget monitoring are a key aspect for the Council around continuously revising and reviewing what their core assumptions are. So while, while the Council sets its financial strategy, it does acknowledge that there's significant uncertainty around that and has to remain agile  in response to it.

Derek Yule
OK, no, that, that's helpful. Thank you.

Jo Armstrong 
Mike, did you want to ask a supplementary question?

Mike Neilson
OK, that, that’s all very helpful. I suppose on the financial sustainability on the revenue side, just to check where things stand on delivering the savings in the current year, and then...
One is the IJB where I see there was a point on reserves from previous years and reserve levels seem to be quite low there. Could you  update us on the IJB’s financial position, particularly reserves, and how that's been taken into account in the context of the medium-term financial strategy? I know others have been talking about budget gaps.
And on the actual side, how far has the financial strategy revised the profile of the capital investment programme given the big shift out of 23/24.
And then on a substantive point, a lot of that shift was in relation to schools - what's the, what is the impact of that in the in the real world, as it were?

Helena Gray 
Thank you. I'll bring in John and, and Mark as well because there's a lot within this. But in terms of savings in current, in the current year, I'm not sure if we've got the latest position on that, but I’ll bring in the team to confirm and perhaps also talk a little bit about the Council's history of delivering savings as well.
In relation to the IJB, the IJB is forecasting that it will have exhausted its unearmarked reserves by the end of 2025, and like, and we know that the IJB isn't alone in that, that other IJBs across the country face similar challenges.
And like many, that relationship with the IJB is obviously an area of financial risk for the Council, but I believe that there is a, there's been a change in leadership at the IJB, a change in leadership at the Council and I think there is a commitment there to, to working together on a, on a refreshed approach.
And as part of that, I think the IJB is currently developing its financial strategy. So obviously 
there is an element of interdependency as to the development of that financial strategy, and then how that feeds into the medium-term financial strategy as well. So they will need to, to be, that linkage will need to be made, I don't know if it has at this point, but I'm sure there's something, that as a medium-term financial strategy continues to be revisited and updated, will need to, need to happen.
I'll probably pause there actually and bring in John and Mark just on savings and the IJB and then we can go on to capital.

John Boyd
Yes, as Helena mentioned we don't have the latest position, the outturn position will be reported as at, as at June. However, I did allude to earlier, the Council has implemented a number of cost control measures and budgetary control measures in the year.
Really a reinvigoration, if you like, of some of the procedures. This is for budget managers out with the core finance team around, essentially a bit of grip and control over the financial costs and, and delivery. And from monitoring throughout the year we can see those 
being implemented. But I couldn't give an exact figure for the outturn position, at this, at this stage.
What I can assure the committee is, is the Council does have a track record of delivering efficiency savings. So over the last 10 years it's delivered over £54 million worth of savings, including approximately 29 million in services alone, so essentially initiatives and savings measures that individual service areas have, have achieved. So really just to reassure Commission members that it, the Council does have a track record of implementing those.
In relation to the IJB, as Helena mentioned, the uncommitted reserve balance has been utilised in year. That isn't inconsistent with other IJBs that we observe, where the reserve balances are generally committed to either health or local government, local government spend.
This was essentially an unearmarked, uncommitted reserve that the IJB had held, had held. The IJB in the process of revisiting its financial strategy, including a reserve strategy, and as part of that work, there’ll obviously be engagement with the Council throughout, 
and that's an ongoing… as part of that process.

Helena Gray 
Thanks, John. Do you want to say a little bit more about the approach that the Council is taking to manage its capital spend as well? Then, I think particularly, Mike, you asked about the impact of delays on, on education and again, 
recognising that a number of the projects that have been reprofiled have been around education, but I'm not sure I have anything specific about the impact of that on service provision. But we know that outcomes in the education space are in, in line with national and family group averages, which is obviously a key area. 
But John, do you want to say something more around the approach to managing capital?

John Boyd
Yes, so as mentioned in the annual audit report, the Council, the Council during the course of the year, revisited its capital, capital programme. It's an ambitious capital spending programme, but has revisited the delivery of that, both in terms of affordability and from a capital perspective, but also from a revenue implications of that, of that spend.
And that's an ongoing … an ongoing process where they continue to, continue to monitor those.
The last two years have been significant areas of capital spend for the Council, so the level of spend are, been higher than, or planned spend have been higher than in previous years, and therefore that it's not unexpected you would see some carry-forward to, to future years, essentially because of the scale of the, of the planned level of expenditure.
In terms of the impact of the plan, the key areas of, of the programme are in relation to education and schools.
And there are a number of the schools mentioned in our report that were deferred and those have been actively taken forward as part of the capital programme this year and are underway. Although I wouldn’t have the information about the key stages of, of completion at this, at this point, but my understanding was the expectation would be they would be completed in the current financial year.

Jo Armstrong
Malcolm.

Malcolm Bell
Yeah, thanks, chair. I think my question has probably largely been answered by Mike's opening one. But what I was, you know, going to ask about was the reliance on reserves to meet budget gaps and the fact that the level of uncommitted reserves is lower than 
the Scottish average and I was struck by a line in the 23/24 AAR report, which said, significant change would be required over the next three years, which is actually quite a short timescale with a focus on statutory services.
And I think we probably all know that identifying what's statutory and what's not is sometimes harder than it might at first seem. So I just wondered on that particular point, what progress the council has, has made between, you know, the report, or between the audit being done and between now.

Helena Gray 
So I think, I suppose just a couple of things to flag in relation to that. So I think in terms of that reliance on reserves, I think it's, it’s worth noting that the Council has adopted a set of budget development principles as part of its current financial strategy, and a, and a clear principle within that is to, I'm just looking, to minimise the use of one-off resources to balance the budget and ensuring that the use of reserves is limited to investment that will deliver ongoing cost reduction. So I think there is a clear recognition, I think, of the importance to use reserves to invest in the future rather than, than balancing the budget. 
I think in terms of that sort of focus on, on statutory and, and I, and I think prevention and that prioritisation aspect, I think, you know, it's probably a much longer conversation I think around how you would prioritise services and how you prioritise preventative spend. But I think, you know, the Council has been clear about the, setting the outcomes that it wants to focus on, and how it will be monitoring performance against those, and I think it's worth, as I've mentioned before, reminding ourselves that performance of the Council across all of the local government benchmarking framework priority areas is generally positive. I think the area that the audit team have highlighted that where the Council could do more is to articulate, in the areas that it has deprioritised, what is that acceptable level of tolerance on performance on those areas? I think perhaps articulating that would go some way to, to addressing the points that you're, you’re raising.

Jo Armstrong
Thank you. Are there any other finance related questions that anybody wants to ask before I move on to the next topic?
OK so that takes us then to transformation and Mike…

Mike Neilson  31:42
Thank you very much. Clearly, given the tight financial context, it's going to take more than tighter controls to… financial sustainability.
There is a transformation plan, but experience suggests a transformation plan can mean many things in different councils, so very interesting to get a feeling for how concrete the programme is in terms of where the savings are going to be, how robust that feels.
And I think specifically in relation to the link to the reserve, the earmarked reserves of something around 20 million, if I can remember, for transformation.
And … footnote, to check whether you’ve completed the transformation thematic work, and if so, anything coming out of that.

Helena Gray 
Yeah, thanks. I’ll bring in the team to talk because I think the transformation thematic work is very near completion so I'm sure there'll be some insights that they might want to, want to draw from that. So actually I’ll pass, John, to see if there's something hot off the press that you want to share.

John Boyd
Yeah, thanks. Our transformation was actually due to be presented to the Council's committee in, just this month, so we have, we've substantially completed, completed that, that work.
In terms of key messages, the current transformation activity, the Council has a transformation programme in place, there’s a, a team and governance arrangements in place over that programme of work, and we found that that is well resourced and has robust oversight and scrutiny arrangements. We have made a number of recommendations, predominantly about the reporting and oversight of some of the transformation activity, because while there's a core transformation programme, there are other activities, which essentially are transformation that don't fit or don't sit currently in, under the programme of work, and some of these are around budget, will address some of the efficiency saving measures. So we're, we've encouraged the Council to have a clear focus on the transformation activity, transformation programme to consolidate, consolidate that work so there’s consistent reporting.
A lot of the current transformation programme is focused on essentially getting some of the core basics within the Council right and basically building the building blocks in the Council. So we touched on earlier around some of the legacy systems and infrastructure and that is a core area of the transformation activity that's ongoing in the current year. That doesn't directly, necessarily, deliver efficiency savings in itself but should then allow the Council, with the framework then, to implement significant service-level transformation and allow them to focus the activity on the, on delivering savings.
I don't know, Mark, who has led on some of our transformation work, have you got something to add?

Mark Ferris 
Yeah. Just to say, so the current transformation, it’s got 15 projects, initially. Eight of those are well, being well progressed. Some of the figures, just in terms of helping to reduce the funding gap going forward, it's estimated that the current portfolio of transformation projects as they start to crystallise could generate up to £6 million recurring savings as they start to… so while the Council isn't using the transformation programme purely to address the financial sustainability, it is one of the many levers they're using.

Mike Neilson
Just one supplementary - can you, can you just touch on the digital and IT, the issues in relation to resourcing and the human resourcing and legacy, and how far the transformation programme is reliant on getting that in a satisfactory position?

Helena Gray 
Yes, so I think as John's already mentioned, the auditors have recommended that the Council prioritise its digital strategy to improve service delivery and generate some of those savings and efficiencies over the medium to long term, and I think that's something that the Council recognises. John's already mentioned it has a digital, I'm going to get the, the title wrong, but I think digital transformation board and that that reports and feeds into the E… to the transformation executive team, who have oversight… across the breadth of the transformation.
So I think it’s an area where the Council has recognised the need to make, make progress and John might want to come in and offer some more thoughts on, on the progress that has been made. But I think I'd recognise as well that, as we've discussed in previous reports, that digital capability and capacity is an area that East Lothian isn't alone, I think, in, in facing challenges in its digital, in implementing and having the capacity and capability to drive forward its digital strategy. I think that's something that the sector more generally, has struggled with as well, but John do you want to say any more about the council’s particular…

John Boyd
Yes, so the, the digital support and resourcing is obviously a key, key challenge for the Council. The Council's recognised that it can't stand still and, and, as Helena mentioned, they're not alone in terms of that resourcing gap, and has initiatives in place working with Solace and the Improvement Service around some of that support to help the capacity with, within the Council in implementing some of these, or addressing some of the, the IT challenges it faces.

Jo Armstong
Christine.

Christine Lester
Thanks, Jo. By the way, could you see my hand? Because I can't actually see it!
I had questions related to the workforce and digital as well. So why is the Council not prioritising the use of digital technology and transformation where it could have an impact on workforce? Is it going back to what you said about availability of resource? Is that resource people or money or both?

Helena Gray 
So I'm not sure I, quite on why they're not prioritising, other than to observe that councils obviously have a number of priorities that, you know, management are juggling a number of competing, competing challenges.
I think, I’d point as well to the, the recognition, you know, that they have a digital transformation board and a focus on that, but I think there are challenges, sector-wide in relation to digital skills and capacity, so I think, John, unless you've got anything more to add in terms of the resources, I think, for me it probably is around those wider challenges.

John Boyd 
Yeah, I would add, around the investment, as I mentioned, the investment in some of the digital infrastructure essentially should address some of, from a workforce perspective, some of the, the inefficiencies that are in place in terms of, particularly around the key finance systems, but the legacy systems. So that should address some of the, the workforce challenges. And as I mentioned that then forms almost the building blocks and the basis then for the Council to transform further.

Helena Gray 
I think that, yes, the finance system going live in October is probably an example of them making that investment in digital, to tackle some of those…

Christine Lester
Yeah. Can I follow up?
Again around the transformation and workforce. So, again with workforce planning, the, one of the transformation strategies across the piece is shared services, so what's, what’s the barrier there? And I mean, they're not alone in this. We, we've looked at other councils, but they are, you know, fairly central in terms of location/geography. So I would just like to understand better what's the issue in finding shared service opportunities.

Helena Gray
Yes. So I think as the thematic has, work has outlined, the council has looked and explored and continues to look for opportunities in sharing services. And for instance we know that they share a post of chief internal auditor with Midlothian, Midlothian Council. 
I think they also share some services around insurance and the team might want to say a bit more around that.
I think, as you flagged, some of these barriers are not unique, though, to East Lothian Council, and I think we've discussed them in, in other areas and they relate things around, you know, terms, differences in terms of staffing or contractual arrangements, different IT systems, different local priorities, political differences. So I think, you know, we know and have seen in other areas that those are cited as barriers to, to shared services, but I think there are examples where East Lothian Council has explored or does have arrangements in place.
I don't know, John, Mark, if you've got more opportune… more examples that you might want to highlight or more to add?

John Boyd
So, so Helena really touched on the key work, the key in terms of shared services specifically. There are some, and it's probably worth highlighting some initiatives that the Council has invested in and it’s, it's joint working arrangements. So they currently have a joint working arrangement, a joint venture with Queen Margaret University in relation, in an innovation hub and it's an example with working with partners, delivered positive outcomes for the Council. Now that is in its infancy, so we've, we’re not in a position to comment around the success of that, but it was really just to highlight the measures the Councils are taking that they're not, they're not looking insular, they are looking to work with other partners, and that's just one example.

Jo Armstrong 
Derek, did you want to pick up anything. 

Derek Yule
No, it's fine. That's picked up.

Jo Armstrong
Any other questions on transformation?
OK, takes us then to leadership. 
Malcolm?

Malcolm Bell  43:15
OK, thank you, chair. I wish to concentrate on political leadership. And again, I noted in the 2023/24 AAR report, reference to things like inquorate meetings, lengthy agendas, the capacity of members to review supporting documentation, and there also, there was a line saying that there was evidence of “some” effective collaborating working between members and between members and officers.
And I also noted reference to some members not being engaged. So it's just, if you could maybe just flesh out some of those, I'd be grateful.
If you could tell me a bit more about that, and why these comments were there, what caused them?
And also, maybe to, on the more positive side, what's being done in terms of member development beyond just the induction and the statutory training. Because I do note reference elsewhere in the report to leadership development for officers, which is actually highly positive, and I just wondered if that's replicated for, for members.

Helena Gray 
Thank you. And I'll bring in the team because I think it's particularly powerful to hear about what they've observed at Council meetings, so to hear their perspectives. But just to pull out a couple of things. 
So I think we've highlighted in the report that there is evidence of collaborative working and there are examples of that cited including the budget working group.
I think you specifically mentioned the, the issue that we've highlighted that the audit and governance meeting and the policy and performance review meetings were not quorate, and they weren't held. I think those appear to have been specific to the circumstances at the time, including elections, and we haven’t observed those issues since. So just to provide some reassurance on that, I think it is important to highlight.
And I think in terms of training and development, I think that is available to all elected members. I think I'd also highlight that officers are responsive to elected members’ requests for information, recognising that meetings might be constrained but offering those greetings… briefings outside where that might be helpful to enhance understanding of an issue. But perhaps, John, if you want to share some of your observations from attending meetings.

John Boyd
Yeah so from, attending, from attending the meetings, the Council has acknowledged that the meetings in the, in the previous year where they weren't quorate is not, is not, is not examples of good governance at all, but since those, they do appear to be exceptional circumstances.
It was around the election period and since that was highlighted, we've not seen any reoccurrence and no concerns around attendance or participation. And actually in presenting the annual report, we had the opportunity to present that to the full Council, and it was good engagement, good discussion with members.
I would also highlight alongside, alongside the training that the Council have implemented, and, and I don't think Mark would be able to kind of, but we’ve not identified any concerns around attendance at, at training from looking, is, there’s obviously a range of different training activities and, but we've not identified any particular concerns around that.
The Council's also working with the Improvement Service and Solace around training for scrutiny, and developing members’ scrutiny, and the importance of the role of, of scrutiny from elected members, and as an auditor, we welcome that.
In terms of the, enhancing the role for elected members.

Jo Armstrong
Andrew.

Andrew Burns
Thanks Jo. Thanks Helena, John and Mark for the suite of reports before us this morning. I wonder if I could just link to leadership, just press a little bit around the strategic Council plan that Helena you mentioned in your opening comments that obviously tracks in terms of its chronology, the period of the electoral cycle ‘22 to ‘27, but it was refreshed and I think, the language in the covering report, I think it’s 11-13, paragraphs, it was reprioritised in February 2024. And I'm just really looking for a little bit of reassurance, particularly around the clarity of some of the goals that have been set for the targets, because I think in the covering report and in the discussion we've had so far, 
I'm reassured that the priority areas do have targets that are clear when any area is considered a priority. But when it's considered a non-priority, it specifically mentions a little bit of a lack of clarity about that. And February ‘24 is over a year, a year and a half ago now, so I'm just seeking any views on whether that's moved on at all. And also just any reassurance around the number of actions and priorities. There seems to be 68 actions overall, which to me seems quite a high number for the size of Council that East Lothian is, so I hope that's clear. Just a bit of reassurance around those two areas would really be welcome.

Helena Gray 
Yeah, thank you, and I’ll bring in John as well. I think the first thing to say, I think, is that the action to reprioritise the Council plan in light of the context around the cost of living, for instance, as it was happening, I think is an example of leadership trying to focus in on, on a clear set of priorities. I think, as already mentioned, as highlighted in the report, I think what would be helpful is clarity on what an acceptable level of tolerance is for those areas that have been deprioritised and John might want to say a bit more about how or whether the Council is, is taking that forward.
I think in terms of the Council action plan, which contains 68 actions, I think that is an attempt to reconcile the, the variety of different action plans and strategies that, that, that we know that organisations have into one accessible place to try and show how they, how they all hang together, noting that the detail may well be in, in other areas, and monitored and tracked through their own governance processes. 
But John, I don't know if you’ve got more to, to say on the, on the Council plan.

John Boyd 
Yeah. So just add to Helena, this is an ongoing, an ongoing activity for the Council. I can't put to give an update exactly where they are with it. It's something we are following up as part of our external audit this year, but I am aware work is underway with that. We haven't yet seen what that looks like, so it's essentially an ongoing action, but the Council is fully, but I do know the Council are focused on it.

Andrew Burns
I mean the key point from my perspective is the Council are self-aware, they need to work further. That's good. That's reassuring, thanks very much. Thanks Jo.

Jo Armstrong 
Angela.

Angela Leitch 
Thank you. Thanks, Helena. 
Can I just ask again about political leadership so, very much welcome the introduction of the cross-party budget group that is highlighted in the various reports.
Could you say a bit more about the activity that’s going on in that group and the willingness of that cross-party group to take the tough decisions on service redesign, service reductions and the like, and income maximisation, because I know there has been plans in place for a wee while on some key areas of income maximisation for East Lothian.

Helena Gray 
Yeah of course. I mean I think, I think the tough decisions is obviously something that we're going to need to see more and more of as well as I alluded to in, in my introduction. And I think, yeah, it's going to be really interesting to see that appetite for that going forward. I think what we can point to though and as I’ve already talked about is, is obviously the deprioritise… the action of prioritising the corporate plan I think is an area of, of working together in that leadership to set out a clear set of priorities.
Again, it'll be interesting to see whether, where they've got to on the areas that they've deprioritised, and whether they’ve agreed an acceptable level of tolerance around that.
I think John's already alluded to the savings that have been delivered to date as well and might want to talk a bit more around some of the decisions that were taken as, as part of, as part of those, and a bit more about the working group in more detail.

John Boyd 
So as I, as I, as an auditor, a key area of focus is obviously around that process of setting and establishing the budget. And I think a key measure of success of the working group is the ability to agree and essentially establish a budget.
I think the Council would highlight, actually within the budget itself, there are some really challenging decisions which all Councils have faced, particularly around Council Tax increases and the level of service activity.
Helena is right, it’s an area where we can, we require focus over the coming years around ongoing difficult decisions that the Council makes and will face, and that will be something that we'll have a, you know, a focus on. But right now, I think the success of that working group is reflected on the,  the focus of the budget and the financial strategy would be the two measures around the recognition that they can’t, the Council can’t continue in a financially sustainable environment to utilise, continue to look to utilise unearmarked reserves and that isn’t, that isn’t sustainable in the, the short to medium term.

Angela Leitch 
Did that really support the budget setting process for this year, then?

Carol Evans
Yeah I’ll leave mine till later, it was relevant, but I’ll leave it.

Jo Armstrong
Any other questions under leadership?
That takes us to workforce.
Jennifer.

Jennifer Henderson  54:07
I'm in para’s 36 to 38, Helena, of your report. I just want to probe a little bit more around, I guess, progress on following up on some of the workforce planning actions. So I've got 3 areas to probe, I suppose.
Auditors made a number of recommendations around improving the approach to workforce planning and I noticed quite a number of those actions were due for completion this month, and I just wondered if there's an update on, do we know that they've been followed through and done and, you know, do we, do we, does it give us more confidence, I suppose, that the workforce planning approach is being gripped.
The second part is then about the translation into the service-level workforce planning. I got the sense from your reporting there's a kind of overarching Council workforce plan, but then there's not clarity about how in, at service level, they should be using that to develop service-level plans, so again, I'm just wondering if there’s anything more you can say about that. 
And then the final thing is about measures of success. I took from your report that the workforce plan has an action plan with a lot of actions, but it's not clear that all of those actions have clear targets. And so how will the Council know that it's succeeding? So again, if you could expand on whether you’ve unearthed anything else that would help with that.
I guess I'm, overall I'm just looking to get a sense about whether the Council is gripping the feedback on its workforce planning approach, because I think we've alluded to workforce a couple of times already in this conversation and reforming how the workforce works, who they have, what skills they have, is going to be absolutely critical to meeting needs going forward, and if the planning process isn't quite working, be a key area to get on top of.

Helena Gray 
Yeah, I think, as you've mentioned, a number of the audit recommendations were due for completion this year. I think, unless the team tell me otherwise, that we'll be following up on those in the 24/25 audit, so at the moment, I don't think we have an update on progress in implementing those actions and that'll be something that we'll be following up in our current audit.
I think what I would highlight though is that, as you can see from the management response and the detailed thematic work, that management have committed to review the workforce plan to ensure that it captures clear performance management information and to develop further smart actions, and they have also committed to develop that service plan guidance to provide that clearer link between the corporate plan and the service-level plans so, I think the commitments are there in the management response to the recommendations that auditors have made and obviously we'll be following up on those in our current audit, audit work.

Jennifer Henderson
That’s helpful. Sounds like we've got to wait and see, kind of, how that, the response to the actions translates into something that we think is going to move the dial on this.

Helena Gray 
Yeah, I think, the commitment’s there.

Jennifer Henderson
Thank you.
Can I follow up on a couple of other points then I suppose?
Flexible working, obviously a topic that the Council, like many other Councils is looking at. There was something in the report about having designed a framework to understand how that is working for employees, but then not implemented the framework or not followed through on it, and again I'm just wondering again if we got a sense about, is the Council getting on top of that sort of stuff. There was, there was a bit of a sense for me about getting good stuff in place and then not kind of taking it to its logical conclusion of really using it and this was an example.

Helena Gray 
Again, and Mark might want to come in and say a bit more about the framework, but again, I think this is an area that auditors have highlighted that it should, the Council should build on that work to review the effectiveness of the work smart policy to ensure that it is capturing the benefits for staff, including the wellbeing, as well as those savings aspects. But I don't know, Mark, if you've got anything further to add?

Mark Boyd 
Just, just a little bit. I mean the, as Helena said, the workforce plan, you know, a lot of the action plans are actually due for completion this month. I think the timing when we actually did the workforce thematic, the team had already run a number of …. So they’d built up some
 areas of good practice. I think the report was picking up on those, so the Council does have a workforce plan, clear objectives, action plans, it had service-level plans as well. We're using the information we have from other councils, areas of good practice. So we were trying to share that, that good practices, so the, and the and the Council's very receptive to learning from others, even looking where they can start to make improvements. So some of the recommendations within the report were to take what the Council's already done in terms of the workforce and start to make those improvements by learning from others.

Jennifer Henderson
That's really reassuring. Thank you.

Jo Armstrong
I’ve got three more people wanting to speak, so Ruth, then Andy, then Nichola.

Ruth Macleod 
Thanks. I just wanted to ask a bit about workforce capacity and resilience. You've very helpfully explained a bit earlier about the cancelled and delayed meetings and what was happening there and that looks like it was a bit of a one-off issue, but it did give me some kind of concerns about, was it a capacity question. And then I noticed in the employee feedback that high workload and stress was something that also came up. And it's good to see that the Council is obviously working to tackle that issue, but I just wondered if you had any sense of how much a problem that was, and how under pressure staff were, and is that something that we expect we’ll get more feedback on when we get these reports in, in June that we're expecting?

Helena Gray 
Thank you. I think the first thing I'd probably like to highlight is the response rate to the staff survey, because I've talked before about very low levels of response rates in council staff surveys and East Lothian Council have a comparatively high response rate of 45, of 46% to its staff engagement survey. I think Council’s recognised though, that there were certain groups of staff that may not have been fully representative in that including a high proportion of frontline staff, and so it's considering how to engage those in future surveys. But I think as you've, as you've flagged, of those respondents, 50% did report work-related stress and concerns around workload. Again, I'd flag that that's not unusual across the sector. I think this is something that we have seen more generally in other reports. I think the Council has set out an approach, a plan to address those, And I think crucially, is also intending to revisit the staff survey, which will give an important opportunity to see whether it has actually managed to move the dial on those areas. 
And I think in terms of that employee wellbeing, there are a number of examples in the best value thematic that set, in terms of actions that the Council is taking to support and improve employee well-being 
I suppose I also just wanted to pick up, I think, one of the other areas that you might have flagged on that capacity and capability point is, within the report I highlight that the state of the Council report has been delayed due to a movement in the member of staff. I suppose just to provide some reassurance on that. Reporting is, on performance is still happening internally. I think what the movement in staff here is presented is an opportunity perhaps to rethink and reconsider the approach so the delay is perhaps more around that rather than just a capacity issue, which I wouldn’t want to infer from, that the two are necessarily linked, at this point, because I'm not, I'm not sure that they are.
Yeah, I don't know whether there's anything…

Ruth MacLeod
That's helpful. Thank you. 

Jo Armstrong
Andy.

Andrew Cowie
Thank you, chair. And thanks, Helena and guys for your, for your reports, very well written as ever and we're conscious that as a Commission we're always commenting and digging around in the hard work of things.
So I'm glad you're celebrating 46%, as a, as a good response rate because that is pretty good, around that. So it's encouraging to hear that from paragraph 41 of your report, Helena.
Can I look at succession planning, which is recommendation six of the audit team’s report? I'm interested in the response, particularly by the Council, suggesting that much of the challenge is around a national approach to this.
I'm contrasting that because I was privileged to go to East Lothian on the last best value report which I think it was in 2018 or ‘19, it's lost in the mists of my synapses, but around about then. And one of the issues that came out there, I recall, was around housing supply, locally, housing costs, competition in a free labour market, around poaching of staff, staff's career aspirations, moving on, as a relatively small local authority, can't provide the same career progression, generally. And also the, the real threat around a smaller authority, if you lose a few key posts, it's very difficult to replace, and the disproportionate effect of that. You then have the gapping strategies that we might have as, as local authorities to try and save money and tide over time. So could you maybe just give us a flavour, or more of a flavour, around how confident you are that the risk that's been identified there about future succession planning challenges is being addressed locally, not just nationally.
Does that makes sense?

Helena Gray 
Yes, it does. And again I'll bring the team in.
I think with any of this there are a range of factors at play, I suppose, and you've alluded to the labour market more generally, and, you know, some of the wider challenges around housing, etcetera. And I think within the Council, and the team will want to come in and talk a bit more about the specific initiatives that the Council is doing to ensure that it's an attractive and supportive place to work. 
I think I'd also point though to the digital transformation and we've already talked a bit about that already today and the opportunities that digital can present in terms of reducing inefficiencies, and John already talked about some of the manual interventions that are required in some of the systems at present. And I think when we think about succession planning, I think we have to think about it in that, with all of those different aspects of, you know, what will be the impact of digital transformation on workforce and what is the impact then on succession planning as well. So I think all of these things are, are interrelated, but I'll bring in the team to look at some of the specific actions that the Council might be taking as well.

John Boyd
Yes, thanks. So, so Helena mentioned and I think touched on earlier just some of the current, so the work smart policy and the current arrangements around remote and hybrid working options. And the Council implements a number of those. We have highlighted in the report the importance of putting in place clear plans around succession planning and it was an identified gap as part of our, as part of our audit work, where we’ve recommended the Council look to, look to clearly articulate that. That's not to say they don't have any current processes and measures in place to help address specific gaps or risks, but we think that needs to be clearly articulated and documented. That's only, we’ll be following that up as part of our annual audit this year, it’ll only due to be complete in April, so we've not, we've not revisited that. But essentially what you're articulating there is what the audit risk highlighted.

Nichola Brown
Thank you. And thanks very much for the suite of reports, really comprehensive.
My question around workforce, colleagues have picked up on some of, some of my areas of interest, so really there's just one remaining, and it was about, whilst the response rate to the staff survey was particularly encouraging, it was obviously noted, as Helena has mentioned, that the response rate was lowest in those service areas with the highest proportion of frontline staff, particularly in health and social care and in housing.
I guess we might surmise that stress levels would be similarly patterned, if not more exacerbated, in those areas. But my question really is about the report states that the Council intends to put in place a different approach to trying to improve the response rates amongst those frontline services in future. So I just wondered whether there's any more information about the different approach that it might be thought, thinking about.
And also I guess linked to that, just some clarity around, for interest, who drives forward the, the workforce planning strategy and who has the sort of, I guess, the leadership around making sure that the workforce strategy aligns with the overall Council plan. 
Thanks.

Helena Gray 
I'll bring in Mark and John to talk about the specific governance approach of the, of the work they plan on the workforce strategy. I'm not sure that we'll have the detail on the additional, different approaches that, that the Council will be taking to encourage those staff 
response rates to improve. I guess just noting that, that they've recognised that and that they've committed to, to taking that forward, but I'm not sure we have the details on that. 
But Mark, John, do you want to say something about the governance of the workforce strategy and workforce plan?

Mark Ferris
I suppose the workforce strategy is developed by the executive team, you know, and the leadership team are very involved in developing that, and they've got like a, a team working, at the moment to take that, to take that forward. I think the point that you've made is that obviously the engagement has varied and again it will be something that we’ll be picking up as part of the 24/25 audit to see the improvements they've made to target those individuals that the response rate’s been lower.

Helena Gray 
I think I'd also just flag that I understand that the update on progress on the workforce plan and the actions also went to the joint consultative committee, so there is that wider engagement and oversight as well. 

Nichola Brown
Thank you.

Jo Armstrong
Any other questions on workforce?
So that moves us then to community engagement.
Ruth.

Ruth Macleod  1:10:21
I wanted to ask a bit more on community engagement and I noted the consultation that happened on the 2023/24 budget. I just wondered if you had some feedback about the engagement that occurred around that in terms of having these conversations with the public about pressures and challenges that the council are facing and the fact that, you know, in future years that's going to become more difficult, with more difficult conversations around how services are being delivered. Did you get a sense around things that the Council might have learned from that process to take forward into future years and potentially much harder conversations that might have to happen?

Helena Gray 
Yes. So I’ll bring in the team to talk a bit more about, I think it would be helpful to share some of the reflections from the 24/25 budget consultation. So as you've mentioned the Council consulted on the 23/24 consultation and I think in response - budget - and in response to that got 472 responses, which is about 1.5%, I think of the, of the population of over-16s.
I think they then took a different approach to the consultation budget in 2024, which involved a residents survey in April and May, which was sent to a much larger number of residents.
Mark, John, I don’t know if you want to come in with a bit more of the detail as to the, the response rate to that and how those residents were chosen to get a representative sample as well.

John Boyd
Just before Mark comes in I would, I would highlight that the Council recognises, so as part of the budget process, it recognises that the consultation is obviously a key aspect of that and then Mark will provide some of the information in terms of the uptake. It does acknowledge, however, that for key decisions, it actually finds, on key, on key decisions, actually consultation on those, as you would expect, generates a lot more interest. So where’s there key aspects, whether or not it relates to imposing parking fees or other like Council Tax increases, the consultation on those matters, did generate clear engagement, and recognise the importance of providing a rationale for what the options are and being able to, to members, so we have observed, observed that. 
But Mark might want to…

Mark Ferris
Yeah, I mean just to add, I think the, the feedback from the 2023/24 and taking forward into 24/25. is that if you go to the public and ask about the budget, you know, it's very broad. So the fact that they put different scenarios and asked for instance to say, you know, to help support the services you receive, would you be willing for, and instead of using percentages, 3 pounds per week for your Council Tax, 4 pounds per week. And they used that to engage, 
and that allowed much more interaction and valuable evidence to help support, which allowed then members to understand the views of the public, so that when it came to the decision-making process, and the 10% Council Tax. So they used that intelligence, I think in a very clever way, to get that engagement and to gauge what was acceptable to residents and then that, that played back into the decision-making process.

Ruth Macleod
Good. That sounds very positive actually.

Jo Armstrong
Angela.

Angela Leitch 
Thank you. Just building on that, Helena. And that's great to hear, that work in terms of budget-setting.
The Council has had really good community engagement structures in place for a long period of time, mainly through the community partnerships, community planning partnerships. Can you say a wee bit about how the Council is using those? And they're obviously still investing, as far as participatory budgeting is concerned.
How are the Council using that, that mechanism to engage on, at least awareness of some of the challenges that it faces, if not some feedback on decisions that they might or might not take?

Helena Gray 
Thanks. So I think you're referencing the Council has a number of established community groups, it’s got community, connected communities and then it's got six local area partnerships which are supported by connected communities managers, and that those enable that and support that engagement and communication between local communities and the Council. And I think there's some detail on that in the, in the thematic.
I understand that it's proposed to use those channels and engage them on a on a regular basis around the priorities, and the options that are being considered as part of the budget savings to allow that ongoing dialogue to shape budget decisions. So I think those, those partnerships and those channels exist to support that engagement. I don't know if we have the detail of how often that engagement happens and how that looks in practice. I think that might be a bit too detailed for us. But certainly I understand that that's, that's the intention for how those partnerships are used. 

Angela Leitch
Thank you.

Jo Armstrong
Nichola?

Nichola Brown
Yeah. So just one other query on community engagement. I think what comes across is that, as Angela has said, the establishments around community engagement through the local area partnerships are, are working well. I've struggled to see anything overarching in terms of a strategy for community engagement within the Council, and I just wondered if there's any more information on that.

Helena Gray 
So I believe there is a participation and engagement strategy being drafted at the moment that would, that brings, I think that the intention is that it would bring all of that together. I don't know that we have more, more detail about that. 

John Boyd
I don’t have an update on where that currently is, but it was under, it was underway.

Nichola Brown
OK, so it’s a kind of watching brief, then, around an overall approach to community engagement. OK, thank you.

Jo Armstrong
Now we turn to performance. Carol, do you want to start off? 

Carol Evans  1:17:08
Thank you. And it kind of follows on from the conversation you had there that you’ve got good community engagement and I'd like to commend the Council for it actually … a lot of the LGF benchmark indicators.
Which actually leads me to my question. So it's performing above average in that sense, but all 11 of the satisfaction indicators have declined. So that seems odd to me with a Council that's doing really well to then have all the satisfaction ones, considering you've just talked about this good engagement as well. So that's my first question.
And my second question is, it's great to see that they’ve prioritised their top 10 indicators, that's excellent. But these were from 23/24 and there's no data available for three of them. So are they really high priority if they don't have data? So that again was at odds to me. And kind of follows on from some of the queries we’ve heard today.

Helena Gray 
Thank you. So I'll bring in the team to talk about the, the data availability of the, of the top 10 indicators. 
I think just on the, on the satisfaction indicators, I haven't got the data in front of me, but I would be pretty confident to say this is a picture that we see nationally in terms of the decline in satisfaction indicators. And we've obviously talked before about the overall local government benchmarking framework, so. I’d need to double check but I, but I think it is part of a broader picture.
But the team, do you want to come in on the indicators, on the actions that don't have indicators at that point?

John Boyd 
Just in terms of the indicators the, themselves, I don't, I don't have updated figures available, available for those. What, what the Council’s articulated is key priority areas, underpinning that will be its service-level performance monitoring, so there'll be a number, a range of measures underpinning that. What are these are the high-level key monitoring arrangements for the Council. So although the indicator is not available at the date, at the date of publication, the underlying measures to support that and lower-level actions are reported at service, so it’s, it’s really the key areas of focus for the Council.
It's just the timing of the availability of the information.

Carol Evans
Right, so they are focusing on the, they are actively focusing on the top 10even though they don't have the data, because it just seemed strange that they’re top 10, and no data.

John Boyd 
Yes.

Jo Armstrong
Any other questions on performance?
Any other questions that have been triggered as a consequence of this conversation this morning, to cover off in the public session?

OK, thank the team… here this morning and also for the report. So thank you for that. We will, as is normally the case will consider our response to the findings later on

Jo Armstrong  1:20:25
OK. So we're on item 6 now. The local government policy update and we have Joe in the chair.
Over to you, Joe.

Joe Chapman
Thanks, Jo . Just very quickly, on top of the content of the report, obviously we had the UK government spending review yesterday. It will lead to some more funding for Scotland through the Barnett formula, particularly as a result of the additional spending on health at UK level. There's some different political viewpoints on how substantial that funding is. There's also been some independent commentary from the likes of Spice and Fraser of Allander.
But I think from the Scottish point of view, the key development will be when the Scottish Government publishes its medium term financial strategy. Also a fiscal sustainability delivery plan. They're also due to publish a public service reform strategy as well, and all of that is meant to happen over the course of the rest of this month.
I'll provide updates to Members on this and any other kind of significant developments over the summer period via the, the sort of e-mail update roundups that go out and obviously then capture it all in the, in the policy update report at the next meeting. So not a huge amount to say on that at this point in terms of Scottish local government.
That's all I wanted to add. Happy to go straight into questions otherwise.

Jo Armstrong
Questions for Joe.
Derek.

Derek Yule 
Maybe just a, as much an observation as anything, I know it's not our role to comment on government policy, but in terms of the relationship to the work that we have just published, I'm just looking, there was a few sort of alarm bells ringing for me in this report. …
I think one is around the sort of lack of progress or different views on the fiscal framework from your report, Joe. It did seem to be getting into a territory where COSLA and Scottish Government don't seem to be in agreement. I'm not sure you’ve got any, any further update. I know it's something we, we keep asking about, but a lack of progress on that worried me as well.
Delay in providing guidance on teacher numbers, another area which is kind of critical to councils for their forward planning.
The NHS pay award is going to, I think the budget document that we just produced, sort of highlight what councils were budgeting for pay for this year. But in terms of public sector pay policy, and the NHS proposed deal seems to breach that, so again, that's going to cause financial challenges to councils, I'm sure. And I'm also minded of the comments of Professor Roy at the, at the last meeting that we had and well the programme for government, which has identified, a number of areas where I don't see any kind of funding implications associated with that at all. I suppose just to, I thought it was worth making the comment that I saw a number of things in here to concern us in terms of that financial sustainability and budget piece for the future. 
Also and it’s maybe be more for you, Helena. The Glasgow equal pay, the reference, I mean the reference is made to 23/24.I was kind of staggered with the scale of what the council are paying in terms of sort of rent and leaseback of properties to fund the equal pay settlement. Is that something we should be interested in or is it just going to come, will it get picked up in the best value audit report on Glasgow in due course? But I was kind of stunned, I know it's a large council, largest council, but I was slightly staggered by the arrangements that they've done, whether that represents best value.

Helena Gray 
Shall I come in on that one first? So Derek will be aware I've done two reports on, two section 102 reports on Glasgow equal pay already and the, and I think whilst the numbers are significant, the arrangements are in line with what was discussed with the, with the Commission.
You'll recall I provided an update, I think it was in the December meeting, highlighting the delays the Council continues to face in terms of making progress on its equal pay and grading structure, I think those are still persisting.
The auditors have highlighted that the Council still needs to set out its time scales going forwards. That's a fact that's highlighted in the last annual audit report as well.
I think, as I've flagged before, the Council still has a bit of time in the agreement that it has adopted with the unions before it has to, before it is really running out of time and has to renegotiate. But this is an area that I and the auditors continue to pay close attention to. I think everything that we've seen as in the updates that I have already provided, I'm sure it will feature in my best value report in year 4.

Derek Yule
That's fine, thanks.

Jo Armstrong 
Jennifer.

Jennifer Henderson
I was just interested, Joe, in para 12 in your report and they, possibly it’s my lack of understanding about the business cases through which councils brought low emission zones in because I thought the entire point was to stop polluting cars coming into the Council area rather than to be a source of income, so I was just interested in whether councils have assumed a level of income from this that they're now not getting because the policy's been too successful, and whether that's something at some point we might want to just lift the lid up on a little bit more.

Joe Chapman 
Absolutely. I thought it was an interesting juxtaposition if you like, between the revenue raising side of it and the policy intent side of it. And I don't know for sure, but I would imagine that there were forecasts done by each Council that has introduced the LEZ of how much it would raise with anticipation that realistically it would raise some money because there would be non-compliant vehicles in the zones, at least initially, and that that might tail off over time as their use phased out. So it was really just an update on that progress whereby yes, it's a, it's a policy that is achieving its policy intent, but there is a revenue raising implication in the other direction if you like.

Jennifer Henderson 
I guess there's just a wider point there that as we go forward and more opportunities for councils to have other revenue raising, through things like the visitor levy and stuff, it would just be interesting to know what did they assume and what did they get, and are their forecasts accurate, and how much of a gap does that make, leave in their finances? I mean I know in real, you know, generally these are small amounts of money, but you know, lots of small amounts of money could add up if their forecasting's wrong in the wrong direction. Thank you.
Thanks.
Mike and then Malcolm?

Mike Neilson 
Yes. Paragraph … 
On the funding model for integration joint boards.

Jo Armstrong
Can I ask? Maybe raise your voice a little bit because it's quite low and I think a challenge down there, so maybe the mic’s not been able to pick it up. If we can all raise our voices a little bit.

Mike Neilson 
Paragraph 35, the funding model for integration joint boards. the, it's all, it all seems to come, to hinge on the method set out in the agreed integration schemes.
I would find it very helpful to have a sort of,  some sort of sense of what, what the range of methods used are, as we go forward in this, in this context.
Given that, I think we are seeing, quite regular issues where there is some degree of tension across the partners on this.

Joe Chapman
So that was a response, obviously, to the query at the last meeting as to how is it set out in the legislation, and the legislation then provides for the integration scheme, which is agreed between the individual Council and NHS boards, rather than dictating the model as such in, in the primary legislation.
The integration scheme for each IJB would set out, obviously, which functions are delegated to the IJB and where the responsibility for that sits between the Council and the health board, so each case will be slightly different. We know some IJBs have some services and functions that other IJBs in the country don't, and the integration scheme will set out how, given the individual local circumstances and logistics, the cost of providing those services is to, is to be determined and calculated. So that's how it was relevant to put into the report, just to clarify that point around the statement the Minister made about the funding model being set out in legislation and how it was quite, would be quite a process to go through to amend that as opposed to something that the government could just make a policy decision to, to change how the funding works. And as we know, of course, we have the lead agency model in, in the Highland case as well.

Jo Armstrong
Is, is that something that's going to get picked up in the report…? 

Alison Cumming
We can pick that up through the, through the IJB overview work, Mike, and see if we can, we can provide some… we might hold some of it already.

Christine Lester
Make sure you do.

Mike Neilson 
Getting to the… That question of how you, how you do when the, when there are shortfalls?

Christine Lester
Yeah. 

Mike Neilson 
How the mechanism actually, fits there.

Joe Chapman
And it could be possible, for example, for either myself or the audit team to look at, say, a handful of examples in different types of areas, to see how that's set up and what provisions there are, for example for reviewing the calculation of that as well, is there a process for each IJ… for a particular IJB to say we're going to review this every three years, five years, whatever it might be.

Jo Armstrong
Something more to look at, but I think, in the first place, Alison, your team can…
Malcolm.

Malcolm Bell 
Sorry, chair, I ought to take my hand down, but having been a, a sponsor for the reducing car kilometres report, I was going to make exactly the same point as Jennifer.

Jo Armstrong  1:30:29
OK, that’s fine. Thank you.
Any other questions for Joe, again a very helpful … that we use as …
Thank you.
Takes us then to Chair’s update, i.e. me.
I just want to say this morning, I had a clear signal, we got a clear sign of what we're doing is making a difference elsewhere. We were asked, along with the Auditor General, to a meeting with the Cabinet Secretary on the additional support for learning report.
I think signals that they're being read and they are interested in and didn't demur from anything we'd suggested, so that, that's a good sign that we're hitting some of the targets we… the conversation was an interesting one around the definition of additional needs, as she now, realises that actually there's issues around that definition potentially having a skewed effect on approach to how it’s dealt with, and the, the, the need for more effective baseline data.
Both have been taken on board and suspect that we’ll be asked to have further input to some of that in future and Alison’s team will certainly be …So that was an interesting kind of signal that what we're doing is hitting the right, hitting the mark in a big way.
We went to the Argyll and Bute washup meeting, I call it, last month, in the last month.
Again, a Council that was very pleased with the report. It has been using it to help them reinforce their views on monitoring… of monetisation and understanding how best to work out what their, the budget, balancing their budget issues might look like, so very helpful to report as far as they were concerned. They sent it round all of the council and council members.
And they like the key facts piece, which again helps put it into context the challenges they have, on delivery of a, I wouldn’t say a uniform set… delivery of an expect… effective, and acceptable service …
We’ve got Lee coming out with some requests for dates for the Commission in 2026. We’ve been liaising with Audit Scotland. I hope you will respond quick because that helps tie down the date as opposed to looking at our diaries and not having dates tied down.
And Andrew and I are attending the COSLA leaders session at the end of the month. And although it's the first time we've met the leaders, we've clearly been engaging with COSLA officials and members since I've gone and Andrew been clearly longer than, longer than me. And we've signalled that the work programme we're putting out the consultation for them to have as much of an input to help us steer our work beyond the elections to help them.
So we'll be using that as a way of encouraging them to make a response, a formal response. I think we're meeting them on the day that we’re hoping to have launched the report, is that right, Sarah?

Sarah Watters
Hopefully that week. Yeah, yeah.

Jo Armstrong
So, plenty ongoing, if there's any other areas or thoughts given what I've been doing that people want to pick up on, feel free to ask.
Derek.

Derek Yule 
Yeah, it was just a, a sort of follow up, the Argyll and Bute visit. There was, I thought there was actually an interesting comment was made by the Council round about community engagement challenges that they've been, been having and it's maybe something for us to reflect upon. I'm not sure I'll reflect well, well on it now, but I think it was this they were getting frustrated. They were doing a lot of consultation, but were getting frustrated by a few individuals who were following them around the countryside and providing what they would see as obstacles to change it, if that's right.
To me it kind of stuck a message that while we’re obviously encouraging that engagement, we do need to recognise that engagement comes with its challenges and I'm not sure how you resolve that. But they were seeing that as quite some challenge. There was some people very vocal, I suppose which you inevitably find, but is, are these people representative of the wider community? And I think that's…

Jo Armstrong 
Yeah, you’re absolutely right, I did miss that point.
They are clearly having to deal with vocal communities and I suppose if there's, if there's a consultation goes out, the result’s not what you want, and you’re vocal, you're going to push, say it wasn’t a proper consultation, and you want it reopened. And they've got another challenge on their hands to actually try and close that loop. I think there's clearly a desire for a judicial review of the process, so conscious of not wanting to feed any more on that There is an issue that I think as we write in our reports, increasing clarity around how they’re consulting on how they're spending the funds or how they're prioritising. Whilst we ask that we need to make sure that we've got effective community engagement, at least that they're not challengeable through a judicial review which is I think, you have to think about it.

Angela Leitch 
So I think that this is something that isn't uncommon, but may be more prevalent in smaller communities, but some… 

Andrew Burns
That’s good coming from an Edinburgher!

Angela Leitch
Yeah. And I do think it's right that there are certain individuals who can articulate their argument really effectively and then can engender support through various mechanisms, including social media. 
COSLA and the government have recently launched a big exercise on civility in public life. 
And there's quite a few really key partners in, in that. So I think it's maybe something that we want to keep an eye on in terms of their work, because it could be quite fundamental to what we're, you know, our recommendations in terms of best value reports.

Jo Armstrong
Because our recommendations do keep talking about community engagement.
And then, if you do engage and you don’t do it well, you end up with a different outcome.

Angela Leitch
And I think some of the behaviours particularly towards elected members, because of some of the decisions that have been made, have, you know, been quite shocking, quite frankly. So it is something that we need to be, you know, mindful of.

Jo Armstrong 
OK, so if no more questions on that, I assume we're at the end of the session, is that correct?
Unless there’s any other business anybody wants to talk about it in public?
If I can ask Lee to turn off the recording now. Thank you.