Accounts Commission September 2025 meeting transcript  
11 September 2025  

Jo Armstrong  0:00
OK, welcome to today's meeting of the Accounts Commission, which is today held in Glasgow. The public session of the meeting is being recorded and the recording will be made available via the Accounts Commission website as soon as possible, and is available on request in the interim. 
Members of the public are also welcome to observe the session. Those who are watching us this morning, thanks for joining. You’re here to observe and not participate, therefore your camera and microphone are already off.
I also would like to put on the record thanks for the representatives of North Ayrshire Council here this morning, thanks for joining us. And for anybody participating in the meeting, joining us online, please keep your camera off and your microphone on mute except when it's your item. And may I ask all those who are speaking during the meeting to speak clearly and loudly for the benefit of the recording…
That takes us to item 1. Apologies for absence. Sarah.

Sarah Watters
One Commission member, Carol Evans, has submitted apologies.

Jo Armstrong 1:09
Takes us to item 2, which is declarations of connections. Can I ask members who have connections or interests 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?
Jennifer then Malcolm.

Jennifer Henderson
It's the usual one in relation to the future of public audit model items as a chief executive of another public body I obviously do have an interest in the future of the public audit model but I've taken advice via Sarah from the ethics partner…

Malcolm Bell
Yeah, thank you chair. In terms of items 5 and 10 I declare a connection as a member of the Standards Commission. I took part in a hearing into the conduct of an individual member of North Ayrshire Council recently. Having applied the objective test, I do not consider this connection amounts to an interest, so I will stay in the meeting and take part. So it's just by way of transparency statement. 
And also if I may, chair, items 13 and 14 very similar to Jennifer as a member of an audited body.

Jo Armstrong  2:15
Content?...
…As normal. I'd like to seek the Commission's approval for the order of business today. I propose that we consider the items 9-16 in private for the reasons set out on the agenda. Are members agreed?
…minutes of the last meeting…

Sarah Watters  2:42
Two matters arising on the minutes. The first was in relation to the Controller of Audit’s update and capital projects. Helena is working with the team who prepared the audit planning guidance and supplementary guidance on best value in relation to capital projects and asset management.
There was also a discussion about the use of expectations and recommendations so in Commission reports, we sometimes see expectations, sometimes recommendations, so we'll be working with PABV to bring a paper back to Commission in either December or January on the kind of clear rationale for why one is used and not another.

Jo Armstrong  3:24
Any other questions or comments on the minute?
So we approve the minute?
…Item 5, which is the key item on today’s agenda which is the best value report on North Ayrshire Council.
This is a statutory report by the Controller of Audit on best value in North Ayrshire Council.
The report draws attention to the findings… annual audit report and 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.
I’ll hand over to Helena. 

Helena Gray  4:25
Thank you and good morning, everybody. And I'm delighted to have the opportunity to discuss my report on best value at North Ayrshire Council with you this morning. My thanks to the team and in particular Fiona and Dave sat alongside me for all their hard work completing the 24/25 audit, which is the basis for my report today. 
As my report concludes, North Ayrshire has continued to demonstrate a strong culture of continuous improvement and has robust arrangements in place to secure best value. The Council has made good progress on previously identified improvement actions and systematically measures and reports its performance across its strategic priorities.
The leadership of the Council has been effective in setting clear priorities, which are articulated in the Council plan published in June 2023, following extensive consultation with its partners and communities. 
The Council exceeds its 1% participatory budgeting target with 1.85% subject to participatory budgeting in 24/25. 
The Council has a well-developed performance management framework and good progress has been made … actions for years one and two of the Council plan. In September, the Council reported that, of its 26 Council plan indicators, 50% are currently on target. Of the Council's 33 LGBF priority indicators, 17 were within the top 2 quartiles. Looking at all LGBF indicators shows an improving position year on year, but overall performance relative to other councils remains broadly constant.
The Council has effective financial management processes in place to manage budgets and undertook extensive engagement and consultation with communities to help shape the 25/26 budget.
However, like all councils, the Council is forecasting budget gaps in the future. The latest estimate suggests a general fund cumulative budget gap for 26/27 and 27/28 of 11 million after the planned use of reserves. And while the Council is in a strong position with its reserves, it's not sustainable to use these to address budget gaps, and further recurring savings need to be made. 
The Council's transformation programme sets out how it intends to transform its services in line with its priorities. It's supported by a well-resourced transformation team, robust officer-led governance and elected members receive regular updates.
Between 2021/22 and 24/25, the Council achieved financial efficiencies from its change programme of 3.1 million and forecast a further 8.5 million savings to 27/28. 
But it's clear, therefore, that current transformation programme will not be sufficient to address the budget gaps forecast. The Council must be more ambitious and discussions are currently ongoing on how greater efficiencies could be realised through delivering Council services differently in partnership with others, and I note a Council report on collaborative working across the Ayrshire region was considered by elected members in North Ayrshire last month. This work is at an early stage but suggests a recognition that transformation at a local level may not be ambitious enough to tackle the financial challenges faced.
I’ll pause there, but there's a lot that we can get into in discussion on today’s report.

Jo Armstrong  7:39
Our standard… discussing this report is by organising our lines of questioning into themes. Today we have four themes, finances, transformation, performance and community engagement. If I start with the...

Derek Yule  7:55
Yeah, happy to do. Thank you, chair, and thanks, Helena, for the report. I mean, I think recognising that we're in early October, I would just support the comments you made about getting the reports to us in time, that must have been a challenge. And I think at the same time, you should recognise the Council as well, because completing the audit, also at times when in regular meetings we have expressed concern about delays in audit, I think the fact we have the audit report for 24/25 in front of us today is a big, and that’ll be down to the Council as well as the audit team. 
I'd have to say this is one of the best reports we've seen so, I think, again, congratulate the Council for that.
I've probably got 4 areas I wanted to focus on in the finances section and I think it's probably more clarification as much as anything. I probably, I think, in the timescale, the focus on the annual audit report as opposed to your report, Helena, and I wouldn't go as far as say there are contradictions, but there's maybe one or two things that didn't maybe sit us as well as they might, so I wanted to try and tease out to make sure I've got my own understanding. 
Is it OK chair just to go through all four of them? 
The first one, they're not really in any particular order, around about financial reserves. I think at face value they seem quite high. But I was drawn to the annual audit report and paragraphs 80 and 81. I would like to understand a bit more. I think you have commented that the Council repeatedly using reserves to balance the budget, but the audit report seems to me to suggest there's a positive strategy and a purpose to the use of reserves, so I would like to tease that out a bit more.
Second point was round about capital investment, and I thought the covering report was maybe slightly critical of the Council in terms of reducing planned expenditure and the service implications of that. However in the annual audit report, again, it suggests a detailed planning review and a financial reappraisal, which I think we would support in the context of capital plans that are affordable and sustainable.
So again I wanted to tease out what the audit perspective of the capital investment strategy is.
Third point was round about the medium term financial strategy itself.
Recognising the Council’s reporting an underspend in 24/25, it seemed to me that that came from sort-of non-service areas, so I would again just wanted to, the medium term financial strategy, is it realistic? What are the assumptions and modelling that have gone into that? Just confirmation that there is modelling rather than focusing on the absolute figures that are quoted in the report. 
And finally from myself. I guess like all councils, the largest risk seems to be around about integrated joint boards which come, will not come as surprise to any anyone. I would like to understand the relationship between the Council and the Health Board and what actions have been taken to address that. Thank you.

Helena Gray  11:13
Thank you. So there's a lot within that and I'm actually I'm going to slightly reverse the order a little bit, if that's OK, and I think I'll start with just the medium term financial strategy and then the risks that you mentioned around IJBs and then maybe get in to the specifics around capital and reserves as well, which are starting with that big picture.
And I'll kick off and bring in the team and we'll try and chunk it in as straightforward a way as possible. But I suppose just to kick off on the medium term financial strategy and perhaps just to explain some of the numbers in the report and I'll bring Dave in to go through those in a bit more detail.
I think I just clarify the size of the gap and I'll firstly point towards exhibit 9 in the annual audit report, which is on page 50, which I think is a really helpful exhibit.
And what this does is set out the size of the funding gap, but then also the specific pressures associated with the health and social care partnership as well.
Just to pull out a factor around the timing of the reports, I think Derek, which you’d alluded to. So the figures within the annual audit report are drawn from the medium term financial outlook which the Council prepares in October.
The 11 million budget gap figure that's quoted in my Controller of Audit report is drawn from an update to the medium term financial plan which the Council prepares as part of its development of the budget papers. So it's a slightly different figure.
But I think the headline for me would be not to get too drawn into what is actually a fairly marginal difference. I think the bit that is really interesting and important to draw out here as you have done already is the health and social care pressures which are pulled out in the medium term financial outlook.
But Dave, I don't know if there's anything more that you want to come in and just talk about the medium term financial outlook. And then also perhaps some of the assumptions that are used as part of that and Derek’s question around those. 

David Jamieson  13:26
Thanks Helena. The medium term financial outlook which we quote in the annual audit report, as Helena said, they did in October, and is really the precursor to the start of the budget negotiations for the following February.
The MTFO draws on similar data and projections in the Council’s long term financial outlook, which is a 10 year plan.
The current ten-year plan was submitted back in 2023, due for an update in 2026.
But really draws on the LTFO and provides more recent cost analysis, funding metrics and short term, short and medium term impacts, key global, UK, national events, inflation, public sector pay, interest rates, along with Scottish Government priorities, which has growing economy, tackling climate change, and so on.
The medium term financial plan builds on the medium term financial outlook, and of course by this time the Council have a, have a clearer picture of whether the budget gap has changed, and how that, how that can be plugged in effect. 
And in the plan, which was submitted to the Council in February, it provides a range of savings proposals to deliver a balanced budget, and also provides an indicative budget for the following two years.
That’s really just a summary of why, why there's a difference between the outlook and the plan.
As Helena said, you know, the outlook also includes HSCP projections which are, which are quite substantial over the three-year period.
As I said, it brings, the outlook brings in a whole lot of factors, the plan then builds on that and comes up basically with a range of savings proposals to produce a balanced budget.
The plan also included previously agreed use of reserves. These are, these are built into the outlook and the plan, and based on projections there may be a further draw on reserves at the budget stage.

Helena Gray  16:14
Shall we just, I mean if we just come on to the assumptions specifically within the medium term financial outlook and you asked particularly around the health and social care partnership. And I think obviously the assumption set out here is that the health and social care partnership would manage its own budget pressures and obviously those are, as you can see from exhibit 9 in the table quite substantial. 
I think, and again the team might want to come in to say a bit more, relationships with the IJB are productive and there is a finance working group which includes the Council's head of finance. And that meets monthly to facilitate the increased oversight of the finance and transformation programme within the IJB, but I think there is a recognition, I think it's really important to see it built into that sort of projections and that medium term financial planning, of the challenges that the health and social care partnership is facing and the risk that that then places on the Council's own financial strategy.
We move on, conscious, on to, I suppose, on to reserves, first of all. And again, Derek, as you've highlighted the Council is in a, I think a good position with its reserves. It has an unearmarked balance of 2% of expenditure budget which management consider is suitable contingency and is in line with many other councils.
And then it also holds 85.1 million earmarked reserves. 38 million of these relate to the loan spend and then the remainder are earmarked for specific purposes such as supporting the Council's recovery and renewable strategy and the medium term financial planning. And I think as we, as we've already alluded to, the Council have approved the use of reserves to balance its budgets in 24/25 and 23/24, as well as in 25/26.
But I think as we've discussed before, the use of reserves to balance a budget is not a sustainable approach and the Council recognises that balancing budgets will require a range of approaches, such as service redesign, income generation, and Council tax as well.
But I think it has been part of its, part of its approach in the past. Again, I don't know if the team wants to say any more about the reserves before we move on to capital.

David Jamieson  18:53
If I could maybe just touch on the IJB, Helena. At 31st March 25, the IJB has just over 3 million of earmarked reserves and no uncommitted reserves.
And … uncommitted reserves obviously presents a significant financial risk to both the IJB and its partners. It's probably worth highlighting that financial sustainability of the HSCP is one of five very high risks the council has on its strategic risk register. 
For 25/26, sorry I’m going… for 25/26, the IJB budget includes proposed savings of just over 4 million. In addition, the IJB’s own medium term financial outlook has identified required savings of between 8.1 and 21.4 million in 26/27 as best case and worst case scenarios.
Our 24/25 annual audit report for the IJB reported that it needs to support more radical reform and cost reductions if it is to demonstrate financial sustainability, and I think that that's why we were keen to include in the Council’s annual audit report, just a reflection on the HSCP position and the potential impact on the Council.

Fiona Mitchell-Knight 20:36
OK. Just like to add to what Helena and Dave have said there and just to draw your attention to that, that we do conclude that financial management is effective and conversations we're having here demonstrate that the Council has a strong understanding of the risks and the challenges for the future and has prepared itself well, as well as it could have done, in doing so, and is taking decisions in an informed way recognising the challenges and risks, which is important…

Helena Gray 21:09
Which probably leads then on to, quickly on to capital.
And I suppose just to hopefully reassure Derek that that sort of difference that you may have picked up wasn't deliberate. So maybe reading between the lines a bit, a bit too much within that, I think. What we do recognise is that the Council has rephased around 19% of its planned expenditure in 24/25 and 26, 25/26 for delivery. And as we've discussed before, challenges in delivering a capital programme is a common theme of the discussions that we've had, North Ayrshire are not unique in having faced issues in relation to cost pressures and supply chain challenges.
The capital programme is a part of a rolling programme of capital work and I think the rephasing has been part of a planned consideration of delivery. And as such there isn't, I understand, an impact on outcomes, as it's part of a planned programme of property refurbishment and vehicle replacement, but it obviously does have an impact on the pace of improvement.
But again, I don't know if the team want to come in.

Fiona Mitchell-Knight  22:29
I suppose I should say, to the point I made earlier, that it's all done in a planned and informed way and the Council recognises the pressures in the construction market and the increasing financial pressures and in turn meant it needed to refocus and re-prioritise...

Derek Yule  22:48
No, that's, that's helpful. I mean, I think the only comment, I think there's probably 
a link between capital and revenue costs. I was quite interested, reading the annual audit report, the Council put the service concession gain into a revenue reserve. And I think it's something I know we've looked at, Commission, at what other councils, and I know some councils have just used the money to plug budget gaps. Again, I thought that was very positive in terms of how the Council had used the funding.
It's really useful.

Mike Neilson  23:26
…really useful explanation. Just, so where I've got to in trying to get a sense of where they're, where they're likely to be in 27/28 is that it's the 11 million plus the pressure. But I wasn't clear whether the savings that have been identified, 8 and a half million, are already taken account of in the, in the 11 million. and secondly just to check what will be the reliance on saving… on reserves by 27/28? What, in other words, what's the structural gap being filled by reserves? Because I mean it feels as if the challenge of transformation is somewhere between sort of 3 and 5% of the budget over the next 3 or 4 years, but that's really what I was trying to get at.

Helena Gray  24:24
Yeah, I think we've got the, so the figures for 25/26 obviously, exhibit 2 in the Controller of Audit report setting out the, the budget gap and then how much was planned to be met by savings and shows the historical plans for the meeting savings.
And the use of reserves and I think we also flag in the report in paragraph, sorry, excuse me, 51, the overall outlook for the Council and the forecast, which includes the use of reserves of 1.8 million in 27/28 and 3.5 million in 2026/27. As to the detail as to whether, within those planning assumptions, the 8.5 million from the transformation programme have been captured, I'm not sure.
[It is included.]
It is included, so this is the additional…

Mike Neilson  25:30
…share the positive comments about the, both the reports and the performance.

Malcolm Bell  25:40
Yeah, just a quick question for me on the HSCP, which Derek has already touched on, and you’ve perhaps said all you can on that. It's clear that this does present a significant financial risk to the Council, and they’re not alone in that.
Can we hear a bit more or can you say any more about the proposed savings and the recovery actions that are talked about in the AAR and what is the team's assessment of the likelihood of those being achieved?

Helena Gray  26:13
The IJB, the HSCP’s savings?
I'm not sure if we have the detail of that in front of us.

David Jamieson  26:25
Yeah, I can, I can just add some, add some detail to it.
I think I mentioned earlier the 25/26 IJB budget had planned savings of just over 4 million. Of those 4 million, three million were rated amber and 1 million green.
Amber rated savings include 1 million earmarked for improved outcomes for care-experienced young people and another 0.5 million committed to continued review of the care at home service.
We reported on our IJB annual audit report that there’s considerable uncertainty around these savings, mainly because at month 3, both of these areas are projected to overspend significantly and both areas were significantly overspent in 24/25.
So it's not a … picture of … being achieved.

Jo Armstrong  27:41
Thank you. I think we've given finances a good run-through. We’ll move now on to transformation. Jennifer.

Jennifer Henderson  27:49
Thank you. Thank you for the report, Helena. I think start by reflecting actually an encouraging picture around how the Council is doing transformation. I think it was heartening to see there's a plan, they're delivering on the plan, there's good governance and I think, yeah, that's a lot, there's a lot that other councils could learn from that. 
I suppose my reflection then was given how well the Council has set itself up to deliver transformation, it's obviously quite worrying that they don't think that the scale of what they're doing is going to be enough to fill the gap, the budget gap. 
And I suppose I'm interested to explore, do we think the Council is doing enough to be really ambitious in what it can do, given it’s set up to do things well in that regard, or is it really at the limit of what it can do? I noticed in the report it obviously talks about the fact that there's an opportunity to explore working more collaboratively with other partners in the other Ayrshire councils.
I'm just interested to tease out whether we've got a kind of sense of, I don't know, just those actions in the transformation BV thematic about being more ambitious and just interested to tease that out a little bit more. Or is this the limit of what the Council can do for itself?

Helena Gray  29:07
Thank you. And I'll pull out a couple of things and then bring the team in to expand into this a little bit more as well. I suppose the first thing I'd say and we have quite a lot of debate and discussion around this, I think is around transformation as well as savings. So what I would highlight is exhibit 2 within my report. 
The Council has been making savings and I think as we've already talked about in recognition of, as part of its medium term financial outlook, you know, it's continuing to think about how it is making those savings through things like reducing its workforce, etcetera.
I think when we come on to the, on to the transformation element and as you’ve already alluded to, the Council has a well-structured, well-governed transformation programme, but I think as the best value thematic has noted, much of that programme has been internally focused. And I think the Council are aware of the need to think about that ambition and being more outward looking.
But whilst the scale of savings that the transformation programme may have made aren't huge, I think they are important to recognise nonetheless. So 3.136 million between 2021/22 and 24/25, and then a further 8.5 million over the next three years. 
And I also think it's important to remember that transformation isn't always just about the savings. It's also about doing things differently, trying new things, and I'd highlight that the solar PV farms project is the first of its kind to be owned and operated by a local authority in Scotland. Whilst the financial savings from that may be limited, it will help the Council meet its net zero targets as well. So I think it is important, to remember that, that it's not always just about the financial savings, but also about the outcomes that they’re looking to achieve through those.
Then I think I would point, as you have already, to the work that the Council are exploring with the other Ayrshires, which does feel ambitious. I think it does demonstrate a willingness to think bigger about what is required in the current context.
As the BV thematic acknowledges, though, this work is at an important stage. But I think it is an important step forward to note that elected Members have indicated that they're content for this work to proceed as well. But Fiona, Dave, I don’t know if there’s anything…

Fiona Mitchell-Knight  31:52
Just to reiterate that the sustainable change programme is only part of the story.
And that the Council is very self-aware and constantly challenging itself. And so, for instance, it's reviewed local government benchmarking framework indicators, it's identifying improvement actions there, all of the partnership working, these innovative projects. So I think it's important that we look at it as a whole in talking about transformation and it's not just the sustainable change programme. 
The council is not sitting back and saying, oh no, we can't do more. They're looking for opportunities…

Jennifer Henderson  32:32
I suppose my follow up question then is, given North Ayrshire has such a good way of running its transformation, that would give me hope that when they do partner up with the other Ayrshires, if that methodology can be applied across everything. 
So it's not really a North Ayrshire question, but I suppose when we look at the other Ayrshires, I'll be interested to see how well do they run their transformation programmes and if everybody joins forces, are we going to get some greater than, the whole greater than the sum of the parts, or actually different councils at different levels in terms of their effectiveness in delivering transformation, which would make me worry that if you're trying to deliver something much bigger and much more ambitious, that might be problematic. 
But that's, clearly North Ayrshire bring something to the table that could add a lot of value there. So thank you. I think, I mean, I think there are a couple of other points that other colleagues… but I'm happy that that's something that I'm looking for in terms of the ambition around taking things forward.

Mike Neilson  33:34
I mean, I very much share the comments about the sort of the solidity of the, the overall approach that's coming through.
It's, it’s striking that the opportunities for transformation appear to be across the three authorities and the big risk is in relation to the IJB where the partner is after the three, covers, the Health Board covers three Ayrshires. So, I’d be quite interested to know something about, it's at early stages, collaboration. How, what is the thinking about what is a realistic timescale for progress and how far the Health Board is involved in it all?

Helena Gray  34:25
I think what the discussion so far has demonstrated is just the complexity, I think, of the challenge that, that the Council and councils will be exploring, I think, as they develop their thinking around this. I think as I've said it, it is at an early stage.
The three Ayrshires have different structures. They have different political makeups.
All of this has to be worked through I think so I'm not sure I've got much to add at this point, but just that I think when we're talking about that level of ambition, as the Commission was interested in, I think it does articulate that ambition around not just looking at national… local solutions, but also thinking bigger and wider.
I understand the senior officers of the other two Ayrshires are also similarly supportive of the discussions and are progressing discussions with their elected members on how services will be delivered in the future. But I think as we've talked about, you know, all of this just articulates the complexity that needs to be worked through to take this forward.

Fiona Mitchell-Knight 35:42
There are some more short term measures that are being discussed though in the meantime, on whether an economic development service could be shared and discussions around, there's a roads alliance with East Ayrshire and South Ayrshire, and there’s a best value review of that, and part of that is consideration whether North Ayrshire can join. So, so whilst that's a longer term wider aspiration for all three Ayrshires, and we're, I’m the auditor for all 3 Ayrshires, and it is an aspiration by all the senior officers.
But in the short term, they're looking at what they can do.
…
So yes, we're also the auditors of the Health Board and the Health Board is in a difficult position financially. But you know, relationships between all the organisations are positive, but that's really all I can say is the Health Board…
Which makes its ability to be able to, you know…
…
Yeah, yeah, yeah. I mean, the partnerships work effectively but the Health Board, like all health boards across Scotland, is struggling. Ayrshire and Arran particularly.

Mike Neilson  37:10
Perhaps the financial problem actually should be a driver for engagement in, in more… 

Helena Gray  37:17
Takes us into public service reform, which… [laughter].

Ruth MacLeod  37:25
I just, I just wanted to say, I thought the work around the solar PV farms in particular, in terms of engagement with the English councils and I think Welsh councils as well, potentially was just a really innovative, impressive way of progressing something that wasn't happening elsewhere in Scotland. So I was just hoping that some of that energy of getting across silos and different ways of working in different ways of financing projects can actually be transferred with a bit of pace through the way that the Ayrshires could work together particularly as there is a sort of identification that service sort of sustainability is potentially at risk, you know without having something quite significant changing in terms of how they’re delivered.
So it was really just to say, is there a sense that… there's a willingness, obviously, for the Ayrshires to work together, but is there enough in terms of that impetus to try and get beyond some of the political challenges, financial challenges, silos around…?

Helena Gray  38:32
I think yes, would be, would be the impression. But Fiona I don’t know if you…

Fiona Mitchell-Knight  38:36
Yes, there’s absolutely a willingness and to say that they're not stopping progress in the meantime while trying to progress more radical reform. But there's a realism about where we are in terms of political cycles.
It's, you know, this is not an easy thing to do, but that doesn't stop the aspirations.
Because North Ayrshire has committed some funds to go on with that development to drive it through. So it's not just sat back, passive, they're looking at how to overcome some of those challenges, and they’re recognising that…

Andrew Cowie   39:28
Thanks, chair, and thanks for the report, team. Makes good reading. Could I look at the best value report with you? Paragraph five and six. I'm noting here that there's a very well-established and well-resourced transformation team, whhich I think is to be celebrated. It's not something that we've seen in every smaller council across Scotland. 
I'm wondering, have you got any visibility as to the make-up of that team? Is it upskilling local staff or are they drafted in from elsewhere and going to disappear? I'm just thinking about the continuity of skill, because the transformation skills will be required for a long time. 
That's my first question. The second question that's related to that is paragraph 5. And I noticed again with, with happiness that it says there's robust officer-led governance arrangements in place to monitor the sustainable change programme.
I'm just reflective that quite often transformation proposals fall at one of the first hurdles when community concerns are raised around some of the proposals. Could you give us some kind of insight into member involvement? Not officer, but member involvement in the governance of these transformation proposals, because it's quite often the councillors that are pressurised by members of the public and then the transformation programme, finds it difficult to be implemented. 
So question around the establishment of the team, and the other one around is there office, sorry, member involvement in the governance of the transformation programme. Thank you.

Helena Gray  41:10
Thanks, Andy. And I'll bring in Fiona to talk a bit more about the, the programme management and engagement related numbers. Thanks.

Fiona Mitchell-Knight  41:22
So I don't know the detail about who makes up the team, but we do comment that it's a well-resourced team with 11 members of staff and in our best value report on transformation we talk about the training they've had in terms of project management and business analysis, so a well-trained and supported team. Internal audit have carried out a review of the transformation and change management and found good governance and management of the projects. So in terms of the good governance, that will ensure continuity of the programme. And I suppose the scale of the team provides some assurance about movement within the team.
Executive leadership are all members of the Transformation Board, so there's strong senior officer leadership and they're all well sighted on the project, and…
Yeah, there’s also detail about officers, engage with elected members as part of the transformation projects and provide updates on the programme. 
So yeah, while we don't, we haven't commented specifically on the make-up of the team, it's clear that there's good governance, there's good capacity there. And visibility at the senior leadership team and with elected members.

David Jamieson 42:52
It is an inhouse team. Not sourced from, they’re not sourced externally. It's an inhouse team.

Andrew Cowie   43:02
Can I push on the, are Members involved in the governance of the transformation proposals?

Helena Gray  43:16
Yeah. So just to come back in on that, on page 16 of the detailed thematic work, I highlight that officers engage with elected members from September to work towards agreeing the budget for the next year, which includes a detailed session on the transformation programme, which was held with the administration last year as part of elected member development process. And then elected members are engaged in specific transformation projects, for example, there was a report to cabinet on early learning and childcare. And then there is, there was in January, a report to the Audit and Scrutiny Committee, which was an assessment against the Accounts Commission's 2024 Transformation in Councils report. 
So I think there are some good examples within the thematic on engagement with elected members.

Andrew Cowie   44:08
Thank you for that.

Angela Leitch  44:13
Just one question and it's really wider than North Ayrshire to be honest. In relation to public service reform and the good practice and good performance that we're seeing around this. I just wondered if there had been any discussion with South Ayrshire when they were considering their recent vacancy.

Helena Gray  44:38
…The details of that.

Fiona Mitchell-Knight  44:41
So the discussions around joint working across the Ayrshires have considered, at senior officer level, different models, and, you know, different senior officer teams across the Ayrshires have been part of those discussions. But where the discussions are now are, the short term projects that they can realistically progress, and some investment to consider those further, more ambitious changes for the future, and that is part of those discussions. 
But the councils were not in a position at this point to be able to say oh, South Ayrshire’s not going to have a chief executive, because obviously there's the political aspect to it, it needs Scottish Government support and elected Members, so it's a longer term ambition, but certainly part of the discussions.

Jo Armstrong  45:50
[Inaudible]
Christine, I think…

Christine Lester  45:58
Yeah. Thanks very much, Jo. Delighted to see this report, it’s really nice and positive given the circumstances that many local authorities find themselves in just now.
Performance, particularly interested in a more general level on, on the aspects of performance that weren't going so well, that were less positive, given what I've just said about everything being positive. 
But actually it was in paragraph 22, there was no available data, or it was unknown about 2 of those performance indicators. Just was interested what those 2 would be, if we know.?

Helena Gray  46:39
…we have that information to hand. 
I don't think we have it.

Christine Lester  46:43
Because I mean, it might not be that important, but it might actually be important.

Helena Gray  46:50
I think it is, so I don't think we have that information to hand at this point, but I think. What the overall picture I hope is, that there is a good approach to performance management and reporting and that there are, there is a regular programme of activity of reporting using both internal indicators, but also the local government benchmarking framework as well. So I think that, that gives a, hopefully a picture of assurance about the breadth of reporting for them, but I’m afraid I don’t think we have detail of those two.

Christine Lester  47:27
I'm sure other Members have questions around performance so…

Ruth Macleod  47:34
Yes, thank you. I just wanted to ask if you could say a bit more about how the Council was addressing issues around sharing information about performance reporting. It’s obviously capturing that … with the work around displaying performance information on the website and then back …  a struggle of keeping and updating, I know that some of that was to do with capacity, but is there a clear enough focus on making sure that the wider public is aware of performance and how that’s shared and how it's accessible through things like the website.
Is it easy to see and understand how North Ayrshire’s performing?

Helena Gray  48:18
Thank you. So I'll say a couple of things then bring the team in as well. So obviously this was something that auditors highlighted in the 22/23 leadership thematic where auditors concluded that the Council had dedicated public performance reporting web pages that these weren’t always up to date, and had a commitment to have a performance dashboard which was offline at that point because there were challenges with maintaining it.
In the 24/25 annual audit report, we do give an update on that. Paragraph 55 highlights that the refresh of the performance dashboard was completed in August of this year. I think there are a few small steps still to be got through in terms of improving accessibility around that, but it is expected to be published in March next year.
The newly designed website was also launched in July of last year and includes links to the Council plan, updates on progress, scrutiny and inspection reports, and the actions that the Council are addressing, are taking to address recommendations within them. So auditors have concluded that the Council is meeting the requirements in terms of public performance reporting.
Hope that provides the reassurance you’re looking for.

Derek Yule  49:42
Thanks, Jo. I had a specific question, it was round about paragraphs 26 and 27 of the report, just trying to understand. Reference is made to education and in terms of sort of national rankings, that the Council appeared to have a high cost per pupil and low attainment and that's, I do recognise the sort-of challenging area.
But I wonder how that sat with the following paragraph which makes reference to the sort-of positive view of the Chief Inspector education and I guess also I would have to confess I'm not always a great fan of these indicators that are cost based, but it did prompt a question in my mind.
Does or how does performance monitoring link to financial planning if it, if it does?

Helena Gray  50:34
Thank you. So again, bring in the team, but I'd say a couple of quick words by way of introduction on education, I think a few things that it's worth highlighting within this.
One I think would be some of the specific challenges that North Ayrshire face in terms of deprivation. And you'll have seen we included the SMID indicator at the outset of this report, it's something that I'll be keen to do going forward, but I think it is an important piece of context for the Council.
I think I'd also highlight in terms of the higher cost per pupil, that obviously the government policy of maintaining teacher members will be a factor within that as there is a declining pupil roll in North Ayrshire which has one of the lowest pupil to teacher ratios in the country.
I obviously, I can't speak for the Chief Inspector, but I think what the positive report from HMIE highlights is how the Council supports schools to improve the quality of education. A lot of the indicators that we've talked about are obviously around student attainment and cost per pupil. I think, again, without wanting to speak for the Chief Inspector, I think it's a reflection of the support that the Council provides schools in supporting quality improvements in education rather than looking at some of the specific indicators that we've just highlighted.
Fiona. David. Don't know if you want to say a little bit more about that relationship between performance management, performance management and financial planning.

David Jamieson  52:13
Pupil, teachers … We commented in the previous year's annual audit report about the pupil teacher ratio. I think in North Ayrshire it was 12.3 against the national figure of 13.2.
The Council had it as a risk in the previous financial plan, but following discussions with Scottish Government around teacher numbers, there has been some movement.
In 25/26 they’re maintaining teacher numbers and the plan is to reduce the number, that's one of their, one of their planned savings. Learning resource review, I think it’s called, in the transformation plan.

Fiona Mitchell-Knight  53:09
To say that, you know, in our leadership report we reported positively on the link between the strategic objectives and the alignment with financial plans.
So for instance, I mentioned earlier that review of local government benchmarking framework indicators triggers improvement activity which then gets built into service plan delivery or the sustainable change programme. And the budget finances that so there is alignment.

Derek Yule  53:44
That’s helpful, thanks.
I'm conscious it’s not the role of the Commission to comment on government policy. But I'm going to tread carefully.
But this is the second Council report that the Commission has considered where it's been highlighted that they've been unable to make savings because of government policy regarding teacher numbers, and I guess that's a note that in terms of recognising the challenges that Councils are facing, and we have spoken about the financial challenges. 
So I mean I think all we can do is note the position, but note with interest the challenges councils are facing in that regard.

Jo Armstrong  54:30
[Inaudible]
Nichola, you’re going to lead us off on this one.

Nichola Brown  54:40
Thank you. Can I say Helena and Fiona and the team … [inaudible] … evidenced by a range of factors including above-expectation performance in participatory budgeting, engagement with young people … and a renewed commitment to consultation around the budget ... a hot potato and not easy to do, working with communities.
So I guess my first question was really around that, what I thought was a considered, embedded approach to engagement around the
 budget, in particular for this year and wondered if there's a wee bit more to say on that or if you feel that they have learning points for other authorities in that regard?

Helena Gray  55:49
Thanks and again this is something that we've discussed in the past, the challenges of engagement on, on the budget. And I think what you've highlighted is that there's a good story to show here and that's not always been the case. We've seen councils trying to engage communities on the budget and struggling to get responses and levels of uptake within that. So I think your question around lessons learned is absolutely something I would hope that the sector might look on and want to consider and take forward. 
And you know… explore would be the nature of the questions asked. I was struck that in the latest consultation, there was just, it was six quite focused discussion points. The consultation was managed in a way that people could choose which bits they wanted to engage in as well. So I think there's lots within that. And as you said the overall level of responses, at just over 4000, is really encouraging. 
I suppose the other thing I'd add though is I think it's important to note as you have done that the budget consultation engagement comes on top of the track record of good community engagement, and again, my report highlights the conclusions that were drawn out in the BVAR previously on this as well. And I do think that's an important factor. The relationships, the trust is there and I think that's critical. 
So just in terms of learning the lessons, I think it's also about thinking about the foundations on which the budget engagement is built upon. And I think clearly, in North Ayrshire, that was there already.

Nichola Brown  57:29
Another question and then I think colleagues might have others.
So that's, that’s the really positive story. How is that reported or what has been reported to elected members as a result of that investment and the achievements around prioritising community engagement?

Helena Gray  57:52
So I'll bring the team in, they might have a little bit more to add on that, but I think, it's obviously an area where in terms of the budget consultation elected members have visibility as part of their discussions around the budget and the feedback and the responses to that consultation as well. 
In terms of that advice on the impact of investing in in community, I'm not sure that that's something that we've got sight of.

David Jamieson  58:24
We are, we are aware again that one of the risks that the Council has in its strategic register is community capacity building and empowerment. And there's a lot of detail around what the Council does to actually mitigate that risk. I don't have the detail, but certainly something that is described as a very high risk for the Council.

Helena Gray  58:52
And I think in particular areas as well, there'll be updates to elected members. So for instance, I know that in March 2022, full Council received an update on progress on locality plans, which was obviously a previous recommendation from a, from a BVAR, as well. So I think there are, so there is advice and updates to elected members on that. But whether there's been a piece of advice that looks at the impact and the value of having had that investment, I’m not sure.
That's not to say that it's not existed, but it's just…

Nichola Brown  59:26
It might be there somewhere. It certainly feels as though that investment has made an impact, which is something to be celebrated. Thank you.

Malcolm Bell  59:40
Thanks chair. I absolutely endorse what Nichola said about the learning from the budget consultation process. I think that's, that's excellent.
But I would contrast that with, there's a comment in the best value audit which talks about scope for improvement in public reporting, and that's with… I could have asked this under transformation.
And I totally accept there's a difference between public consultation and public reporting, they’re not the same things, but that seemed a little inconsistent to me, so I just wondered if you could say a bit more on where you feel they could improve on, on public reporting.

Helena Gray  1:00:19
Yeah, so again, I’ll bring the team in who might want to say a bit more about that specific recommendation, but I think I would, I think it doesn't feel inconsistent, I think to the points that we've already highlighted. 
You know, particularly as you look at, as Nichola has done, the achievements around participatory budgeting, to over achieve the 1%. I mean we often talk about not, Councils struggling to achieve that one percent so to have over-achieved I think is something that we've not heard of very much. And also the, you know, long standing policy in place for community asset transfers. 
The Council plan was developed on the basis of extensive consultation and engagement. And so whilst auditors have highlighted that the Council could do more to report publicly on its transformation work, I don't think this is an indicator of a wide concern around community engagement. 
I'd also flag that the Council have indicated their commitment to take forward that audit recommendation and have a good track record in progressing audit recommendations quickly, so again, I don't have any, any concerns in that regard. I think it's just a way of sort of encouraging the Council to more openly share what it's doing in its transformation programme, but I don't have concerns.

Jo Armstrong  1:01:40
Andrew.

Andrew Burns  1:01:42
Thanks, Jo, and thanks Helena and colleagues for the set of reports. And I have to say, like other colleagues largely commented overall, I think this is an unusually positive set of reports and everyone at the Council, I think elected members and officers should be congratulated on getting the council to the position they’ve got a positive performance to date. And when you look at the detail and some of the sections in particularly pace of continuous improvement and best value follow-up actions, and contrast it to the, maybe the last dozen or so councils we've read, I mean it's remarkably positive and it compares well to, say, Dundee back in November 23. 
So they're in a good place, but there's a but, there's always a but! And when you look at, somebody's referenced this already, you look at the last annual audit report, paragraph 5 makes it clear, and Fiona mentioned this, that officers and I assume that elected Members are self-aware of this. They're still in a position where everything they're doing is not going to close the budget gap. So I just wondered if there was anything further to be said about the role that community asset transfers could potentially play in this. 
Because when you look at the detail in the reports, for a council the size of North Ayrshire, there’s a lot of community assets transfers ongoing. There are 10 done with maybe about a couple of dozen in the pipeline. That is a lot compared to other local authorities of comparable size.
And I couldn't see, I might have missed it, but is there any quantification of what that is potentially saving? Or I anticipate it was a short term cost as opposed to saving, but I just wondered if there was any potential for identifying or quantifying potential savings over the medium to longer term of that quantum of community asset transfers because they are a significant number. But I couldn't see any detail about what that might constitute in total. Hope that makes sense.

Helena Gray  1:03:30
The team will correct me if I'm wrong, but I don't think we're aware of that quantification. That's not to say that that quantification hasn't happened.
But we are… I think the one thing that I would flag though is that financial savings isn't necessarily the motivation behind community asset transfers.
We need to remember that its primary purpose is around community capacity building and empowerment. Yes, there might well be financial savings and, or costs in, in the short to long run, but that's not necessarily the primary purpose for which we’d be exploring that. But I don't think we have that quantification. As I say that's not to say it’s not something the Council have done, but it's just not been on our radar.

Andrew Burns  1:04:20
Thanks, Helena. It might be interesting just to, in due course, to have a look at that because it might be something worth disseminating amongst others or highlighting, as it is an unusually a high level of transfers and I think it could be quite significant.
Thanks very much. Thanks Jo.

Jo Armstrong  1:04:38
Conscious we have given this a really good run-through… I'm conscious as reminded about … this is a good report, one we rarely see. It's worthwhile reflecting on that…
There are clearly issues and concerns we have in other areas, but when we draft our, when we think about what we're going to do next, worth reflecting on…
If nothing else, I think we will call this section to a close and stay in the public session, so if I could ask you to hang around for a bit, then we will…
[Inaudible.]
Policy update. Joe.

Joe Chapman  1:05:27
[Inaudible]
Key things I guess to update on are that the Scottish budget date has been slightly revised to the 13th of January, that's a Tuesday. Basically, at the request of the Finance Committee, but still obviously a lot later than it would ordinarily be or has been in recent years, which is going to have implications for council budget setting process and timescales. 
So that's something we'll obviously continue to monitor. And in terms of our internal and external reporting regarding that, the team will obviously be considering the implications of that.
Couple of other things just to update in terms of things that have developed since the report was produced. Members might have seen the news even today that there's been an announcement by teacher unions who are now holding a ballot on strike action. Just to set the … that, there’s still not yet any agreement on teacher’s pay for this year, and of course, the continuing discussion around reducing contact time, which, you know, there hasn't been any updates since the last … report on that, but Scottish Government and COSLA both saying that they are actively working to develop that. So it's something I'll monitor and again will report in subsequent reports if there are any developments.
And one other thing which I've just picked up on this week, which is that there is a community wealth building bill going through the Scottish Parliament, which the relevant committee has produced its stage 1 report on and they agreed the, supported the general principles. It’s something I’m going to have a look into to see if there's anything of interest to the Commission there. Just something I’ve picked up that members might  be interested in.
Happy to answer any questions on anything that’s in the report or anything else. As usual.

Jo Armstrong  1:07:20
[Inaudible]

Derek Yule  1:07:25
Yeah, thanks, chair, and thanks for the report, Joe, it’s always very thorough. 
I'm going to ask a question which I don't expect you to be able to answer this, it's probably more aimed at Audit Scotland. It's round paragraph 7 and the reference to Falkirk Council now seeing the first completion of a PF… I was slightly confused by the narrative and the sort of savings that the Council are quoting, given that, I think most if not all councils took advantage of the service concession. I did not expect savings like that to materialise unless the deal was so close to ending that they didn't include that in a... 
So my question really is, are Audit Scotland planning to do any work around this, if not immediately, before the near future as some of these deals come to an end to see what the implications are going forward? Because I'm conscious there will be additional costs, and the Council are focusing on what they might save, but there will be costs to some of these schools now come back into Council ownership and responsibility in terms of the whole range of services they will now have to provide as well as the ongoing maintenance of these buildings. 
So, it's maybe just a question to put a marker down. I think it's something, I know we've looked at it in the past; it’d be useful to look at it again at some of these contracts that might be coming to a conclusion.

Joe Chapman  1:08:47
Thanks, Derek. I don't think there's anything specific on that subject matter, if I can put it that way. 
But of course, it's something that is, that is going to be a fundamental part of the annual audits of councils year by year. And of course, as you say, there will be things that they will save money on by not having to pay fees and borrowing costs.
And in other ways there will be costs that now they incur because they're taking on the management and ownership of schools and kind of auxiliary services. So, it's something that of course, you know, will be looked at closely as part of annual audits.
And of course, there's been a lot of media coverage recently also around the costs of the PFI/PPP contracts. So, I guess from, from that perspective, it's something that is interesting to now reflect on the fact that we're kind of moving into a phase where those contracts are, the ones, certainly, the first ones are starting to come to an end.
Thank you.

Angela Leitch  1:09:44
Thank you. Joe, thanks as ever for the updates. Always interesting to see what’s happening. 
On the pride in place fund that's been announced. I just wonder if you’ve done much in the way of really understanding how those allocations were made this time round, the criteria for the 12 councils. Given that some of them don't seem to be the areas of highest deprivation or areas where in our reports we've seen that there's a need in terms of regeneration.

Joe Chapman  1:10:24
It's not something I've looked into, but I think it's something that, it's something I want to look more widely at in terms of these different funding programmes that are provided via the UK Government and also the Scottish Government. As the differences in how those are… 
I think, similar to that I was watching a committee session recently with chief executives as part of the local government committee's pre budget scrutiny, and there was consideration there of the invest to save fund. And again there was discussion there around the pros and cons of that and the way that that was managed; it was kind of welcomed in principle, but it was, nevertheless, pots of money that were being provided for very specific things, which kind of plays into that wider issue of ring fencing as well and providing money in small pots and bidding in for that. 
So, I think there's a broader issue there of this fund and other funds like it, as to how they are administered and how effective they are and kind of the pros and cons of them. And of course we had a comment from Clackmannanshire Council, saying that they believe that they should have been considered for funding under the, this particular scheme, and didn't get that funding.

Sarah Watters  1:11:38
Just to add, I mean, COSLA was involved in discussions on the levelling up funding and previous funding so we can find out from COSLA colleagues if they've been involved in the distribution methodology for want of a better term, or not.

Jo Armstrong  1:12:08
No more questions for Joe. We'll move on. Again a useful update.
That takes us to chair’s update, which is mine.
I have some things I wanted to pick up on, which is a very positive discussion with the Cabinet Secretary.
Fair alignment with what she’s hoping we're going to be looking at and what we've come up with in our work programme refresh of late. So that's good.
Really values our work. Particularly understands the issues around IJB financial sustainability, and is encouraging us to look further into that area if we can.
And she definitely looks forward to seeing what our work programme looks like when we  produce it in November. So, we've got that willing listener and a Cabinet Secretary looking or us to hold the sector to account, but more importantly, actually to help identify where good practice is and areas where we think good practice might have relevance across the sector.
A meeting with the Permanent Secretary next week, which is again around how can Accounts Commission support public service reform agenda, probably also to make sure we're not an impediment to that, if we’ve got cross-sector, cross-silo collaboration, what does our role look like? And how we can make sure we don't prevent that from happening, if that's the appropriate outcome for discussions. I'm thinking clearly around the single island authority type model. 
Excuse me.
And there's clearly quite a lot of press around the Glasgow City Council meeting, you and Ruth went to last week. If there’s anything you’d like to share with the Commission on the back of that?

Andrew Burns  1:13:55
Thanks, Jo. Just to say, thanks to Ruth and Sarah for their support with the visit, and I mean, despite the sensitivity of the subject matter, it was a very positive visit. 
We were given lots of reassurance, not just about the report that's going to Glasgow City full Council at the end of this month, but, as a follow up to the Section 102 report, but they also shared with us copies of all, which are publicly available, all the reports that went I think before their various committees back in May, which really underscored the fact that they've made significant changes to committees’ terms of reference, scheme of delegated functions and review of arrangements for the chief officer departures, all of which, sort of pre-empted the letter that I sent to all chief executives and leaders. 
As I said, they've got a report going to full council in a couple of weeks just to sort of close off all those actions on the back of the 102 report. But I thought it was a really positive meeting, very constructive, the council were very receptive to the things that they need…

Ruth MacLeod  1:14:55
That covers it. It was, it was a very good meeting. It was a challenging subject matter, obviously, but everyone again was very open and it was just a good strong discussion.

Jo Armstrong  1:15:10
We do know those section 102 reports do make a difference… [Inaudible]
Any other questions on my update, anything anyone wishes to raise or ask?
That takes us to any other public business which anyone wishes to raise.
…public. So on that basis we will close this session of the meeting.
For those that have been watching, thank you for joining.