Accounts Commission Public Session - February 2026

Jo Armstrong 0:00
Welcome to do today's meeting of the Accounts Commission, which is being held in Edinburgh today.
We do have one member, Mike, who’s joining us online.
The public session of today's meeting is, as always, being recorded. 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 looking to observe the public session of the Commission meeting today. Those who are watching this morning, thank you for taking the time to join us.
You are however here to observe, observe and not to participate, therefore your camera and microphone are already off.
I’d particularly like to welcome representatives from Shetland Island Council who are watching the meeting online today. Thanks for joining us.
Please note that the meeting chat function is not in use. Those participating in the meeting will be brought in to the discussion by me. If you experience any technical issues, please contact our support colleagues separately via Teams or by email to the address given in the calendar invite.
Commission members, please ensure your, you keep your camera on throughout, but keep your microphone on mute.
For others participating in the meeting online, please keep our camera off and your microphone on mute, except when it's your item.
So that takes us to item 1, apologies for absence. Sarah.

Sarah Watters  1:29
There are no apologies today. 

Jo Armstrong  1:31
Thank you.
Item 2, declarations of connections.
Can I ask any member who have any connection or interest regarding any items on today's agenda to please state the connection or interest, and whether they consider it material up to need to recuse themselves?

Carol Evans
I've got a connection to item 13, funding Scottish public sector audit, because I work for audited bodies that pay a fee. So that's a connection and I think it's significant enough that I excuse myself. 

Jo Armstrong
Thank you.
Jennifer.

Jennifer Henderson
I'm in the same boat as Carol for item 13 as chief executive of a public body that pays an audit fee. I will also be recusing myself. And for the code of audit practice, obviously, I have a wider interest in that, but the advice is it's not significant enough to need to recuse myself from that discussion.

Carol Evans
And I’m similar for the second item as well.

Jo Armstrong
Malcolm.

Malcolm Bell
Yeah, thank you, chair. Likewise for item 14, as a member of an audited body, and item 13, as a member of an audited body that pays a fee. So likewise I will recuse myself.
And for item 5 and 11, I was convener of Shetland Islands Council until 2022, however, given the time that's passed between then and now, I do not believe it's a material connection, so this is merely a transparency statement.

Jo Armstrong
Thank you. Angela.

Angela Leitch
I also am a member of another body, and just to flag that, but I don't think that there's anything to suggest that I need to excuse myself from any other items on the agenda. 

Jo Armstrong
Duly noted, and we’ll make sure that those requirements are… oh sorry, Nichola.

Nichola Brown
I’m in the same position as Angela for those items 13 and 14 because of my, board member of the Mental Welfare Commission.

Jo Armstrong  3:42
Ah OK, right, we didn’t have that one. Thank you.
So that takes us to item 3, 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 10 to 17 in private for the reasons set out on the agenda. Are members agreed?
Item 4, minutes and matters arising from the previous meeting.
Sarah.

Sarah Watters  4:12
Yeah, there were three matters arising for the last meeting.
Item 5, is on the agenda today, we have the Scottish budget briefing and the local government financial bulletin supplement was published today.
Item 8, the Commission's response framework has now been published on the Commission website and a link will be sent to all members, we’ll include it in the minute.
And item 11, the impact of the Commission's findings, for 22/23 and 23/24, that will be updated as soon as the annual audit reports are published and shared with members and then conducted on an annual basis.
Happy to take any questions or comments on the minutes.

Jo Armstrong  4:55
Any comments on the minute? Happy to approve the minute it as it stands? 
Thank you. OK.
Item 5, one of the substantive items on today’s agenda, certainly the public session, which is the best value on Shetland Islands Council.
This is a statutory report by the Controller of Audit on best value in Shetland Islands Council. The report draws attention to the findings from the council's 24/25 annual audit report on how effectively it demonstrates best value.
The Commission is invited to consider and endorse the Controller’s report in this session. We'll then consider in private later today how we wish to proceed.
The Controller and the auditor are here to provide any clarifications or answers to the questions that members may have on both the Controller’s report and the annual audit report as it relates to best value. 
Helena, hand over to you. 

Helena Gray  5:53
Thank you and good morning everybody. And I welcome the opportunity to be here alongside the audit team to discuss my best value report on Shetland Island Councils today.
Overall my report highlights that the council has made progress in implementing the recommendations from the previous best value assurance report and subsequent best value thematic reports, but challenges remain in a number of key areas. 
In particular, my report highlights that while the council is in a strong reserves position relative to other local authorities, it has been drawing on this unsustainably to balance budgets in previous years.
The council's medium term financial plan highlights a cumulative budget gap of 134.3 million to 2029/30 under its most likely scenario.
While the council has outlined a number of areas it intends to take action, progress on these has been mixed and a step change is required to put the council on a more sustainable footing.
The council has a change programme, but auditors have found progress to develop detailed plans underpinning the programme has been slow ,and there is a risk that some projects will not be started within the timescales of the current corporate plan.
Auditors have highlighted that the council needs to be clear about what it intends to deliver, and when, and the council needs to be clear that it has the resources in place to support the programme.
Auditors have also highlighted that while the council reports quarterly against its change programme, reporting could be enhanced to include detail on anticipated costs and benefits from the projects.
Overall, the council has engaged well with communities, including gathering lived experience to inform planned development and ongoing service design.
The council can also evidence consider it has considered impacts on communities as part of its early development of transformation projects, but the council needs to increase the pace of progress of these projects to ensure that it delivers on behalf of its communities. 
With regards to performance reporting, the council has revised its performance management arrangements in light of the previous audit recommendations. Auditors have concluded that the council's performance management framework now supports effective performance reporting and scrutiny, and that suitable arrangements are in place for the preparation and publication of statutory performance information.
Overall, the council's service performance is in a strong position. It ranks fifth nationally for the number of indicators in the top two quartiles, as in, and is in the top two of both its family groups. Cost indicators show the council paying a relatively high amount to deliver key services, which is perhaps not unexpected given the unique challenges the council faces. 
I'll pause there, but let me conclude by thanking the audit team for all of their hard work on the audit, and the team and I will do our best to answer your questions today.

Jo Armstrong  8:41
Thanks, Helena, Thanks for your report and the audit itself.
We are in… our standard procedure is to discuss these reports by organising our lines of questioning into themes. And we have six of them today. So there's a lot to get through.
The first theme is finance. Mike, can I ask you to kick off with your question… lines of questioning?

Mike Neilson   9:06
Thanks very much, Jo, and thanks to the team for a report on a slightly different council. Clearly, Shetland is unique, and, because of its, primarily because it has large reserves as a result of having substantial sources of income in relation to energy. 
I'd like to look at a bit of progress since the update report we saw at the end of 2023, when we were concerned about the reserves situation, which could have, which at that point could have run out in 15 years if action wasn't taken, and also in relation to the pace of transformation, which, actually, this report feels as if things haven't moved since then. 
But to focus on reserves, it'd be good if you could explain a bit more of the distinction between sustainable reserves and unsustainable reserves, because that seems to be the way of recognising the long-term funding, the long-term reserves. But from what I can see there, it's as much as 10% of the budget is unsustainable. 
And I see that for … the projected outturn for the current financial year is actually at around 30, over 30 million, is actually considerably higher than had been planned for. So I think that question about sustainability and the unsustainable reserves. And linked to that, more about the plans for moving to sustainability.
I know that I think there are a lot of very interesting questions about the, how the reserves are actually composed, particularly, which, and how reliable the sort of special examples in the reserves in terms of unrealised income and so on. But I think maybe Derek will want to take us into that.
Thanks.

Helena Gray  11:48
Thanks Mike, and I'll and I'll just stop by offering an explanation of the sustainable and unsustainable reserves and then I’ll bring in the team to talk a bit more in some detail about the reserves position.
In terms of sustainable reserves, by that we mean the draw on reserves that can be met through the income the council has generated, for example from its investments or from its harbour trading income. By unsustainable draw on reserves, that then means a draw on the reserves that could not be met by that income.
And so that's, that's the terminology that that refers to. 
In terms of the overall reserve position, exhibit 2 in my report sets out how the position has changed over time and you'll be able to see that the total usable reserves have fallen compared to the 2022/23. But as always, there is nuance within that, so you can also see that uncommitted reserves at the end of 24/25 are above the level of uncommitted reserves in 22/23, and the general reserves position is also higher. And as Mike already has outlined, it's important to note that comparatively with other councils, Shetland is in a more comfortable reserves position. 
But I think what, the point I draw out in my report and auditors have made consistently is that that Shetland has been drawing on its reserve at that unsustainable level, so drawing more than it is able to through the income that it has generated. And that's a point that we're highlighting in our report, that the council needs to address.
I think, I'll bring in the team to talk a little bit about the overall council's approach to managing reserves, but that's obviously something that we've, we've highlighted that, and I know that they intend to develop a more formal approach to how they use their reserves as part of one of their key actions from the medium term financial plan. But Rachel, I don't know if you’ve got anything further to add at this point?

Rachel Browne  14:06
Thanks, Helena. Yes, if I can just talk a bit about the medium term financial plan that the council has. 
It has, uses scenario planning, so three scenarios, optimistic, pessimistic and the central most likely one which is what's used for budget planning purposes. And that obviously makes certain assumptions that are set out in plan around the external financial context, around the long term investment strategy that the council has for generating investment income and around what's going to come through ports and harbours. The council sets its fee and charges to recover the full cost of that, and that generates a surplus through the volume of activity through its ports and harbours. 
So that procedure goes, generates a budget figure, which, as I said, as Helena said, a sharply increased gap for 24/25 from the previous year and the council's very much focused on key actions to improve its medium term financial planning and to flesh out what's going to make that step change towards financial sustainability.
So, if you bear with me, I can run through those ten key actions, if members were interested, which includes developing a more detailed five year plan for harbour income and planned expenditures, and a more detailed forecast for the gas and related income, Shetland generates income from Shetland gas plant as well, with throughput gas through that facility. 
The council is progressing a review of fees and charges that, again, generate income from services and it's looking where it gets external or grant funding in to use that to fund the core infrastructure of the council, and what, the work that goes on in the central core to support the services that the grants are coming in for and to apply that external funding in a more supportive manner in that regard.
We talked in the best value thematic around staffing and workforce plans and generating more detailed staffing and that comes out in one of the key actions, in medium term financial planning, to have that more developed staff planning to understand the staff needs, the staffing needed to take forward those actions, and that's something else that's an ongoing progressed action in the ten key steps.
The council also needs to quantify elements of its our ambition corporate plan and its climate change strategy, and bring clearer links, better links, with those strategic plans and its financial planning. So that's more clear and transparent and that's in progress but needs further action. 
They're also looking to – clarification is a theme here – convert activities into smart objectives so they are clearer and more measurable, and the future of the medium term financial plan is also intended, to go on more demographic information, and population and demographics is obviously a key focus for the council's corporate plan and for the Community Planning partnership.
So understanding demographic changes in Shetland and the impact on financial demands and the impact on service is also a key part of that.
And the last key action is around reviewing continued use of the inflation factor for looking at what is a sustainable draw, and what that means for the level of investment income that would be needed to support sustainability.
Happy to answer any questions.

Jo Armstrong  17:54
I'm going to jump in a little bit if I might. Because I'm slightly unclear how bad this is.
It doesn't look good if you say there's a general draw and it's continuing and the cumulative effect is increasing.
Have you, have anybody done, presumably this is part of the reserve strategy, the extent to which the current draw on reserves, how long will that last given current expenditure, current cost pressures and current demand for services? Has anybody done an analysis that says, how long will that reserve last?

Helena Gray
Do you want? Yeah. I'll bring Rachel in on that. I think the headline point would be that so the current medium term financial plan assumes a sustainable drawdown on its reserves only.
That is their, that is the council’s intention. 

Jo Armstrong 
How do they define sustainable?

Helena Gray
So sustainable being from the income that they generate, drawing down…

Jo Armstrong
But that income’s uncertain, that income’s variable, given oil prices, fees and charges not being achieved…

Helena Gray
…to the points that Rachel was making around the steps that they are taking to improve their understanding and forecasting of that. But Rachel, I'll bring you in. 

Rachel Browne
So the team, the audit team, has not done an analysis to put number of years. 

Jo Armstrong
So is that going on, the council, that’s what they’re doing?

Rachel Browne
So with the council, it's around, how do they build, generating income that will replace oil and gas revenues, to look for that transition to money from clean energy sources in Shetland. 
And how do they then build that step change and the transformation to services. So that change. So we have the clearer and more detailed financial planning that links to transformation work that is on for the council.
Because the big challenge is how to reform services within the council and how to staff that as well. People, obviously a lack of people in Shetland is a key challenge for the council, and for Shetland.
So it's, it's how that, the work that we'll do in the remainder of the audit on the change programme, transformation projects and linking that back to financial planning, will be key points.

Jo Armstrong
I've jumped in, Mike, apologies. Mike and then Malcolm.

Mike Neilson   20:25
That's fine. That's very helpful. Just a couple of things. One is just, is the work they're doing going to produce a sensitivity analysis in relation to the risks that the income streams won't turn out to be as good as they are? Because if you accumulate these things over 5 or 10 years, then that gap can get quite big quite quickly. 
The second thing is, I inferred, I think, from the papers that you all felt that the, perhaps the concentration on raising revenue was slightly out of balance with the degree of concentration on reforming services in order to make them more cost effective. And I just wondered whether that's a good reading and if you think that, as it were, more drive is needed around the service reform.

Helena Gray  21:34
Thanks. I'll bring Rachel in to come back in on the sensitivity analysis, although obviously as Rachel's already outlined, the medium term financial plan includes three key scenarios, which will, and Rachel will go on to talk a little bit more about sensitivity analysis within that if she's, if she's able. 
In terms of that point around income versus transformation, I'm sure we'll come on to a detailed discussion around the council's transformation plan, programme, in due course. I think obviously income is one of the areas that they have highlighted, within their key actions from the medium term financial plan, it is one of the areas highlighted as a case study within the transformation programme. So clearly a focus for the council in terms of that medium to longer term financial sustainability. How to maximise that income, but also then how they use that income to support transformation as well is something that's, that the council have recognised.
I think more generally though, on, on transformation and that pace of change as we’ll come on to discuss, I'm sure. The transformation programme has a number of projects, but as I outlined at the beginning, the detail of those projects, including the benefits that they realise, and then the impact of those benefits on the medium term financial plan, is still unclear. I think that's an area where the Council do need to set out the benefits that they hope to realise. 
I suppose the final thing I would say, as well, as the Commission is well aware, the transformation work is it's not just about financial benefits, it is obviously about delivering corporate council objectives more generally as well, and that's a discussion that we've had around other councils’ transformation programme as well.
But, but Rachel, do you want to say any more about the, the scenario planning within the medium term financial plan?

Rachel Browne
…comments there. As I’ve said, there's, there's three scenarios. And the council's looking at what its investments will draw over a long period of time. You've made reference to volatile income sources. The council recognise that. The council's investment strategy for its investments is looking at the, spreading the risk. It’s got a diversified portfolio of investments. 
And the, the sensitivity analysis that you referred to, I would expect that level of detail to come out through the, the key actions to, to bolster the medium term financial plan and get more detail and clarity around that. But that's something that, that will come in time. That's not something that that would that beyond the three scenarios that are set out just now.

Malcolm Bell  24:34
Thank you, chair. And sort of building on Mike's question to some extent. There’s absolutely no question that the council provides very high quality services and I think they need to be congratulated on, on that. 
But the, the sustainable draw on reserves has been a repeated theme over many years and there's really been limited evidence of, of progress. So I just wondered whether the Controller and the team have a view on what the main barriers are to reducing that reliance. And what does the Controller see as the prospects for achieving the step change that you mention in your report that's, that's required?

Helena Gray
Thanks. I mean I think as I, as I've already outlined, I think the audit team, as you've identified, have consistently made this point that this is an unsustainable draw on the reserves and that this is a long running issue that the council needs to, needs to address. 
I think the recognition within the medium term financial plan that their aspiration is to, is to just have a sustainable draw on reserves, I think is important, but I think the key thing is now making progress against these ten key actions that the council have themselves identified and which we are, which we have flagged progress is mixed. So I think that must be an area of priority.
As I've already said as well, then thinking about how transformation and the transformation programme will actually support the ambitions set out in the medium term financial plan. So I think bringing those together is going to be key for the council's sustainable future.

Malcolm Bell
I think what the point is, it’s difficult, in terms of the prospects for achieving that.
How do you assess that? Because there's probably not an awful lot to go on. In terms of history.

Helena Gray
I mean like, like many councils, I suppose Shetland Islands Council is not the only council that is facing a budget gap and we have had that conversation around the need to deliver transformation, to think about how it is going to, to close that budget gap. So in that sense, Shetland Island Council isn't unique. I suppose what they do have actually is that more comfortable reserves position than others have, comparatively. And I think it is, you know how they are now going to be focusing on a sustainable use of its reserves going forward, feels key, but generally obviously this is a picture that other councils are also, are also facing.
I think again we might come on to talk about some of the capacity challenges as well within, within the council, and that obviously is an area where focus will be required to, I suppose, drive forward the actions that we've identified and the transformation programme.

Jo Armstrong
Thanks. Derek, do you have anything?

Derek Yule  27:50
Yeah, I’ve maybe a couple of questions, thanks. 
Maybe before we leave the question of reserves. I think as you said in the start, that Shetland is unique, but I think some of the language used is also unique because often when I've looked at councils, we've spoken about the use of reserves not being sustainable. But Shetland appears to be different in having this term sustainable reserves and unsustainable reserves. 
If I could just, more to improve my understanding. The council has access to significant income sources, which other councils don't have. I'm not entirely sure how these work their way through the accounts to create reserves that are deemed to be sustainable and then fed back into balance the budget. So I’ve still got a bit of confusion around that. So if there was any further explanation, it would be helpful.
But my main question was round about what you've got in your report talks about medium term financial strategy. And I, I wanted to focus on the strategy element of that. Because I was very conscious in presenting the report both you Helena and Rachel referred to a medium term financial plan, which to me is quite different from having a strategy and that's a bit I'm really struggling with, was where the council is currently.
I think I was, got some assurance when it was helpful to go through the ten actions, Rachel. But I think my big concern is the pace that needs to happen now to deliver on that, the resourcing available within the council to deliver on that. 
And as the Chair said, the risks attached to that. If one of the big risk’s around about investment returns, sources of income, how that feeds through. Because I get the impression the council's done the basics in terms of the number crunching, the scenario planning going forward. I'm less convinced that they've got the strategic direction around where the risks lie and how that feeds through into a longer term financial sustainability. 
So I don't know if you could help my understanding a bit, a bit better about where they currently are? Thanks.

Helena Gray  30:09
So I'll bring Rachel in to talk about the flow of income into reserves and then and through the accounts. Just on that specific point about medium term financial plan versus medium term financial strategy, we can have a separate discussion around the differences between the two.
I do think, so Shetland Island Council produce their sort of, their budget, they update their medium term financial plan each year at the time of the budget to inform those budget discussions. So obviously we'll be looking again at the next update, the one we're looking at, at the moment, was updated in October last year. 
I think what feels key and we've mentioned already a couple of times is the actions that the council has now committed to take in terms of strengthening its understanding around the income that it generates, its fees and charges approach, I think all of those feel key to that question that you're asking really, which is about the medium term financial sustainability and their strategy to get there. I think as I've already mentioned, it's a key part of that is their commitment to sustainable draw on reserves only and I'll bring Rachel in, in a moment. 
But it's also how with, as they set out more detail on the benefits that will be realised from the transformation programme, for instance, how that will feed into their medium term financial outlook strategy. Throwing another term there!
But into that sort of financial sustainability, I think all of that and how all of that comes together is key, as they develop a more formal approach to using their reserves as well and bringing all of that together, I think is going to be key to that, to that longer picture. 
But Rachel, do you want to come in on that sort of reserves again?

Rachel Browne  32:07
So in terms of reserves I’d referred to the council having harbour income. So that’s, something unique, well not to Shetland but unique to the islands. So that income stream is separate, that’s subject to its own legislation. It's separate, it has to be maintained in a separate reserve. 
The council, as I say, recovers its costs, generates a surplus on that, and the medium term financial plan forecasts against the scenarios … what income will be generated … income flows, again there’s forecasts around that … and they flow through, like Shetland gas plant, the money flows to Shetland and through Shetland Islands Council. That’s used to fund community projects and so on. 
So you'll see separate accounting for the harbour fund in the set of annual accounts that the council prepares. In in terms of investment income, there’s an investment strategy that sets out again what the, the benchmarks are for the fund managers the council engages and the council monitors performance of those. The market, obviously, can be volatile, but the, the fund managers’ approach and the council's … fund managers is around managing risk on that regard, that’s a longer term strategy, but more risk around that. 
And that flows through the annual accounts, usually around accounting for investment income and that flows through to reserves. So I don't know how much detail you want me to go into on the reserves.
And the, as Helena said, in developing the detail of that, and the better links between the strategies of the council and the change programme, intended benefits and unrealised benefits of that will become more evident over time. So, as I've said in the annual audit report and in the best value thematic, the recommendations to the council are to take forward that, those changes and bolster the, the detail of that, those changes and make the step change. So there's the element of, I haven't seen that yet, that's something that is very much in progress, and will be more evident over time.
And Helena’s projections, so we'll probably talk about capacity.

Derek Yule
No, I think, that's helpful. I mean, I think in my simple mind, what it really says, there’s a separate harbour account, it generates a surplus, that's basically what the sustainable reserve that’s referred to is, flowing in to help the council balance its budget. So that's where there's a big risk going in future, to sustain that income stream. That's, that's helpful.

Jo Armstrong  34:50
I’m conscious there’s quite a lot of other questions on tangential issues, but if there's anything else under the finance section… If there isn't anything more we’ll maybe move on to the next section which is on transformation.
Christine if you would like to…

Christine Lester  35:06
Thanks for the report. It is concerning and I think in particular leading on from the use and the dwindling reserves, we can move on to transformation.
And I'm particularly interested in the pace of change, well, the lack of pace of change, actually. I just wondered if you could give a bit more background as to why it appears to have stalled.

Helena Gray  35:29
So I think there’s probably a couple of things that I’ll highlight and then I'll bring in Rachel as well. 
I think, as I mentioned previously, the programme initially had a large number of projects, I think there were 42 projects underneath its transformation programme in autumn 2022.
But of these, a number didn't have dates against key actions or indeed details of resource requirements. 
Since then, the programme has evolved and there are now 21 projects sitting under the overarching themes of transformation. But again, the governance and documentation around these is mixed. As I mentioned in my introduction, auditors have highlighted that there is a risk that some of these projects will not have detailed plans within the timescale of the current corporate plan. So I think the first challenge for the council is around articulating what the projects are and the delivery actions and milestones associated with these.
So auditors have highlighted the need for the council to be really clear on its priorities and it's, and it's timescales. We've talked a bit about staff capacity already, and I do think staff capacity is a challenge to highlight. Again, the report highlights limited staffing capacity within the council at both the officer and the senior leadership level to progress transformation. So I think both of these things are areas which I think would be really important to address in terms of that, encouraging that pace of, pace of change.
I do think it is important also to flag that the transformation report does include some examples and case studies of where transformation has, has been successful and successful projects have been delivered, and I suppose, linking it back just to the discussion that we've just had around income and one of the areas, one of the case studies provided in the transformation project… report, is about project Orion, which is all about exploring those sustainable income sources around renewable energy generation, recognising the risks that we've already talked about in relation to financial sustainability from oil and gas. 
So I think, you know, it is important to recognise that there has been progress. But I think overall, auditors and I are encouraging that that pace of change really does need to increase.

Christine Lester
Right, so for clarification. So there were 42 and now there's 21. How long did it take to go from 42 to 21?

Helena Gray
I'm not sure I have that specific detail, I’ll look to the team.
The 21 are the number in December of this year, I think, and the 20, and the 42 in autumn 2022, but I don't know the timeline in between.

Christine Lester
Right, no, no, that, but that's, that's not very, sort of pace of change.
My question, my next question leads on from that and again it's the use of reserves. So to what extent do you consider that there may be a missed opportunity to use reserves in a way that you can deliver transformation because that spend to invest mentality, can you give a bit more information on that?

Helena Gray
Yeah. So I'll bring Rachel in as this was something that was explicitly covered in the BV transformation thematic. 
I think obviously the investments are not, they'll, there'll be a question of the accessibility of the investments and through the extent to which they can be used for transformation. But I do think the council has recognised the, the opportunities that their reserves and those investments present in supporting that transformation.
But Rachel is, I don’t know if you want to come in on that?

Rachel Browne  39:37
I'll just add that yes, we made that explicit point in the best value thematic work on transformation, that Shetland, uniquely, has an opportunity to use that financial flexibility that, there are got reserves, there are opportunities there.
Recognising that you know if you're, spend to save, that's not the phrase to use, but spending to invest in different ways of doing things, going to take money out of the investment pot. So the council has committed, the council recognises that, and has committed to developing and implementing a clearer investment strategy to take that into account. You know, because not all of their investments are immediately available for use, but to recognise that they do have that that option available to them that other councils don’t.

Christine Lester
So is that part of the delivery plans? In terms of priorities?

Helena Gray
So the council… the council has committed to develop that investment strategy by March of this year. And it’s, has set out in its response to the audit recommendation that this will include criteria for project selection, timelines, and measurable outcomes, as part of, I think, what they intend to take forward.
Obviously, that's due later this year and something that we will come back to as part of future audit work.

Jo Armstrong
Anybody got anything else on the transformation theme. Carol, anything? No.
Any other questions on transformation? Andy.

Andrew Cowie  41:09
Thanks, chair. And thanks for your report, reports that we've had the chance to read there. I recognise the phrase you use, strengthening performance, which is something to be celebrated, I think, in that challenging geography and circumstances. I'm conscious, as the Commission, we are commenting on thousands of people working really hard in Shetland in those challenging circumstances.
But the reputation that Shetland has had for many years, hard earned, is around forward thinking and a can-do mentality. So there's a couple of surprises that I just want to probe a little bit in the reports for me.
And that's picking up on the slow progress on transformation, that obviously colleagues have been talking about. So if we've been using the harbour analogy, let's use a shipping metaphor. If we're saying that's, the people on the bridge have to make some decisions around priorities and how they're going to spend appropriately, the engine room could well be the programme management office, that actually drives the programme and drives the projects that cost, realises benefits, etcetera, etcetera.
Is this under-resourcing that's coming out of the report actually recognised by the council? Does it come as a surprise to them or do they acknowledge it, as a way to really progress quickly?
The second surprise was reading around the digital aspects, so I'll just throw that question in as well, if I may, chair?
Paragraph 36 of your report, Helena, says that the council is at an early stage of adoption of digital, compared to other councils, which is surprising given the geography, et cetera, et cetera. A lack of a consistent approach. So again, do you as auditors get a vibe of urgency around adopting and getting further up that adoption curve compared to other councils? Because it's very unusual for Shetland to be at the back of the pack. 
Why are they at the back and not at the forward? Do you get a vibe of urgency as you're picking up the feel of the council?
Does that make sense?

Helena Gray  43:22
Thank you. It does, thank you, and I’ll bring in Rachel, to talk about the vibe and what she has observed at council meetings as well! But I'll just come in and offer a couple of points. 
So in terms of the resourcing and the PMO. So the council has a programme management officer comprising of a project manager and two project support officers, and that provides centralized support to the programme.
As a result of its size, it has limited capacity to support projects and it's therefore being quite selective over the different projects that it supports, and there's more detail within the report as to how they're divided up that, that resource.
The council has also set up a two-year rolling graduate development programme to support council projects and their transformation. That programme started in September 2024 and recruited eight graduates.
I think, though that may well be taking some time to bed in, so I think it's probably too early to say at this point, it's certainly not something I think …
… the programme. 
I think the final thing that I'd say is that the council has identified four directors to be senior responsible officers for the five overarching change themes.
But reports in December 2024 identified that director workload was, was a challenge.
In terms of prioritisation, the council have committed to improving how they RAG-rate the projects based on short, medium and long term timescales. So I think again Rachel will want to come in and, come in on the vibe, but I think there is a, there's a recognition of the challenge around resourcing and capacity … might want to come in and talk more generally around the workforce challenges facing the council. 
I would also say that I understand that there is a management discussion on the management structure due to take place and I'm sure that that will be on the radar, and certainly that’ll be something that we would be looking to consider in future work.
Just in terms of digital, I think there are a couple of points that I’d highlight as context to the points made in the report. One I think, is that poor digital connectivity has been a challenge for Shetland generally. So we highlight in the workforce thematic that around 20% of homes and businesses are still to access super-fast broadband compared to 3.5% in Scotland overall. And now I accept that those are figures that we've quoted in the workforce thematic, we don't have the latest figure, but I think just gives a sense of the, the wider challenge around digital connectivity.
The council has identified improving digital connectivity as one of its priorities in the council plan, but recognise that progress has been slower in terms of adopting that digital infrastructure compared to other councils.
Within the workforce thematic we highlighted that the council does have an ICT and digital strategy. I think a number of those projects are around connectivity and system replacement and upgrade, recognising a number of legacy systems.
But as part of that, auditors identified that each of the service areas is leading on its own redesign of services to consider how best to adopt technology and auditors highlighted that a more consistent joined-up approach to develop and adapt digital services across services might be helpful. And auditors also highlighted that because the council is at that early stage it should look to how other councils have adopted digital infrastructure to learn those lessons. 
So the Council has approved a digital innovation and AI feasibility project in September of last year, and that project aims to investigate digital innovation and AI and how those technologies might be used, useful for, might be used by the council, and that’ll explore different operational models and work with services.
I understand that they're estimated implementation for that project is … and that’s previously been reported through the corporate management team as part of the change programme, and that's obviously something that we will continue to review progress on as part of the audit work going on.
Rachel, do you want to come in, though, and, and just offer some reflections on the vibe at the Council and that pace, I suppose?

Rachel Browne  48:36
Yeah, I mean, so the council absolutely recognises the, the challenge around pace and bringing that forward and the discussions that we’ve had, audit reporting, the recommendations and responses to the action plan in that regard. So that's not a surprise to them, the council has very much recognised.
I think around pace of digital, the council recognises that it's a small council. I guess it has ambitions and has, it's engaging with others, other councils, they’ve shared good practice examples from the previous BV thematic work around that. 
And they're keen to learn, but they recognise they're not necessarily going to be the front runners in terms of limited capacity and prioritising that capacity, so where there’s other councils that are taking things forward that they can learn from. So I guess it’s very much open to and engaging with others around that line. 
So pace is recognised and, as a challenge for them, and that capacity, and to, to meet their ambitions. A small council with big ambitions, but they’re prioritising. 

Andrew Cowie
I guess that small cuts both ways, though, as you can also be more agile.
They've got more money to invest in that, so I probably wouldn't buy that push-back around, but we're only small, around that, but thank you.

Jo Armstrong
I would probably echo that too, Andy.
Angela.

Angela Leitch
Yeah, just on that, I think it's the small council. So that they are on an island but they do have partners. And I do wonder, what learning and what resource capacity could be realised more effectively then if they were working, or are they working as effectively with partners on all this, the transformation, the digital that Andy's picked up on, to share the, the skill set that is there, to share the knowledge and resources that are there for the benefit of the council as well as the other partners on the island?

Rachel Browne  50:45
So, based on the audit work we've done looking at the, the council and the community planning partnership and its work with, with others, Shetland very much has strong partnership links with other bodies, both public sector and private sector. So, and part of the council's ambition is to, is for Shetland as a whole, not just for the council, and I think some of that getting the, the buy in and pace across Shetland has an impact on the council’s own pace. But there's very strong partnership links. I have some examples mentioned in the BV thematic report, which I could draw on if that would be helpful. 
So there's, there's definitely scope for that, and there's ongoing work around that. But how that then translates into pace of change is, is something that's ongoing and subject to, will be subject to work for the rest of the, the audit appointment. 

Jo Armstrong
Yeah, I think it's an issue that probably we will want to comment on later. Thanks.
Mike?

Mike Neilson   51:49
Just a very quick question on the digital stuff, the feasibility project. It talks about implementation in 12 to 18 months. Does that just mean completion of the feasibility study or does that mean implementation? I assume it just means the feasibility study.

Helena Gray
Not sure I have the detail of that immediately.

Rachel Browne
I think that's correct. I couldn't swear to it, but I think so.

Jo Armstrong
Completion of the implement… the feasibility study?
That would fit with the timelines that we're dealing with up until now, so. Unless we’ve got anything else, that's what we're assuming.
Moving on then to our next theme which is performance.
Carol do you want to lead off on that one?

Carol Evans  52:42
So I'd like to say first of all to commend the council on its high performance and achieving the top one or two in certain areas. So I mean that's fantastic. 
However, I'd be interested to understand the extent to which that really good performance is because they've got the reserves and they've got the extra money because you can do well with, you've got a lot, a lot of money to throw at things, versus other councils who have a lot less money to throw at things. And we already know from the report that a lot of the services are more expensive due to geographic distribution and other challenges, and how sustainable that is. That's my first question.
And the second part is, I got the sense that kind of pre-2022 the council was quite innovative, and doing a lot of innovative things around its services, and I don't get that feel of innovation in this set of reports. And it's whether there is still that innovation going on around, or whether, with the current leadership, there's a bit of loss of that innovation and that then worries when you then go to transformation of services and whether they have the capacity with the current people they've got, to actually have that more visionary innovation thinking that they really need, because the focus is a lot around the income and less on the transformation. 
So, so 2 questions there really.

Helena Gray  54:01
Thank you. I’ll bring Rachel in to talk a bit about, I suppose, that innovation point, and what you've observed at the council. I suppose, just, just on the performance sense, the service performance and the cost indicators, I suppose. 
It's, you know, it's that challenge around correlation and causation, I think isn't it? And, and I think to really get to the bottom of that, you'd require more detailed econometric staff analysis than I think we then we have done. 
But I think what the local government benchmarking framework indicators show is that the council pays a relatively … to deliver some key services, which, as I mentioned before, is, is probably not surprising given its geography. 
I'll give a couple of examples. So for instance, the cost per primary school pupil at the local authority in 24/25 for Shetland was £12,405. Family group average was 9903, and Scotland average was 7606.
Just another example, so the net cost for waste collection in Shetland in 24/25 was £113.59. The family group average was £74.60 and then the Scotland average was £77.26. So I think that just gives an illustration that there were a range of factors I think, which probably wouldn't surprise us that influence that cost of providing services. 
There are areas where the council, the cost is lower than the family group average and the Scotland average. That's the cost per library visit and the cost per use of sports facilities. So it's not a wholesale that everything, but I, but I think it is helpful to have that illustration.
And in my report I've shown how cost indicators have moved both in the last year and since the base year, and I think it is important to recognise that 65% of cost indicators have improved since the, since the base year, where the Scotland average is 54%. 
But I think fundamentally that question I suppose as to, are they gold plating services, I suppose, I don't think it's, it's easy to answer. I mean I can share the cost information that we have and obviously the, the performance, but to go any further than that, I think would be, would be hard at this point.
Rachel, do you want to come in on that sort of innovation point?

Rachel Browne  56:41
In terms of leadership, the council, they're very much open to new ways of doing things. You commented on the capacity around that, to step up the pace of change. The council's working with others to create development opportunities to bring, to bring more people to the islands, which will be key for changing anything. Digital’s obviously a part of that, but having, having people coming to Shetland to have that sustainable population, working age population, to provide services as well as the population that’s using services.
So for me there's, there's definitely the intent and the commitment and the thinking outside the box, and where they can work with others. It's not just the council's doing anything … other partners and there’s government as well.
So for me, there's not a lack of commitment or intent. It's around how they move forward the change programme. And that's not just about council services. That's the wider, you know, supporting a sustainable population, people to come to Shetland, stay in Shetland, thrive in Shetland. Including encouraging young people to stay on the islands, that's key for me. …

Jo Armstrong
That neatly segues into our other three topics, which is leadership and governance, workforce and performance. Angela, you wanted to pick up a particular topic.

Angela Leitch  58:15
Well, it was, it was related to that. It was the role of elected members in Shetland in relation to performance and challenge, in particular. 
I've got another question but I’ll maybe come in after Ruth on that.
It kind of dovetailed into the previous discussion.

Helena Gray  58:35
Thank you. And I think the first thing I would say is obviously just to recognise the improvements in the performance reporting, which was an area of previous recommendations, and I think it’s important to highlight that.
But I'll bring in Rachel, I think, to talk a bit more about what you've observed, I suppose, in terms of that role of elected members. But also that particular question in relation to performance.

Rachel Browne  59:07
So in terms of elected member decision making and scrutiny, I've concluded that the information that’s provided to elected members does support effective decision making and scrutiny. 
And the council members, I’ve, as part of the audit work, have explored the information that they receive, how they use it, and obviously there are different personal preferences between individual elected members, so they are engaged with and using and feeding back on the performance information that they get on a regular basis.
I’ve made, not specifically on performance indicators, but made recommendations around further detail on elected member review of the likes of progress on the change programme. But that building of the performance management framework, using that to build performance information into strategic planning, planning and strategy development, that's an aspect in Shetland I think has improved. 
But in terms of elected members and performance, I don't have any concerns to report, I’m satisfied with how they’re engaging with that, that they are focused on what they need, or getting what they need to support their decision making around performance, and through that, how the money flows through to support performance of council services.

Angela Leitch
So it might be a difficult question to answer, but in terms of not just receiving the information and noting it and feeding it into future actions, to what extent is there that challenge and the ambition that we, you know, I think we see is there in the report, how's that supported by elected members?

Rachel Browne
Elected members, I think, are quite vocal in their ambitions, and I will say different ambitions, as it's local democracy, everyone's got a slightly different opinion. They’re, so I think that comes through in council meetings and council decisions. 
And there's an element of, how do you then get that prioritised path through, and a conscious awareness of the capacity of council officers and finances to then deliver those ambitions?
So there’s definitely ambition there with elected members and they have, in my opinion, constructive relationships with officers to then translate that into, into reality.

Jo Armstrong
Any other questions on?
Ruth do you want to ask?

Ruth Macleod  1:01:44
Yes, I was just going to ask in connection to the council's kind of failure to consistently respond to FOI requests and data protection legislation requests in a kind of timely manner, given the sort of statutory obligations it has there, and connected to that, the lack of key documents being updated for more than five years. 
I just wondered what that kind of said about culture, priorities, oversight, is that a capacity issue, what's happening there? Because particularly with the FOI and DP requests, there’s very clear obligations there and I just wonder why, why that slippage is being allowed to happen, what that tells us?

Helena Gray  1:02:33
I’ll just offer a couple of remarks on that. So I think the first thing to flag is as Rachel has already noted, that the auditors have concluded that the council has an effective structure for governance and challenge and scrutiny. But as you've highlighted, the annual audit report does report mixed performance on responding to FOI requests within the statutory working, 20 working days timeline. And also subject access requests. So the auditors based a recommendation that the council should review that progress… their processes around those. 
And the council have committed to a review of their governance documents, with an update to be presented, that was due to be presented to the council meeting on the 10th of December, I believe that's now coming into the council in May. And that will also include that review of FOI and subject access request processes. 
And the council has also committed to establish a governance working group to oversee that more regular review and updating of governance documents going forward. 
So I think there is that commitment to respond to the auditors’ recommendations but Rachel I don’t know if you’ve got any more?

Rachel Browne  1:03:58
I’ll not add much to what you’ve said because that was also what I was going to say.
The, the response rates for freedom of information and data protection requests, that was flagged by the council as an issue. So they're recognising that and it's a capacity issue, so they are very much aware and acting on it. And some, some cases are complex, and take a long time. So that's a fact… that's a factor for any council, or any public body, I should say.
So yes, it's very much recognised by the council, it was raised and reported by the council in that regard. And they've made their commitments for a review.
Around the review of the governance documents. One, I would say, yes, I've made the recommendation that they should be regularly reviewed to make sure they're all aligned and reflect current arrangements. I didn't note any significant misalignment or missing aspects that I would expect in governance documents, just that they were out of date.
And just to say, yeah, that the review of governance documents has been pushed back. My understanding is because that will be tied into management restructuring proposals, which are due to be brought. So there’s that alignment.

Jo Armstrong
Andrew and then… Angela, did you want to come back in or…?

Andrew Burns  1:05:18
Thanks very much Jo and thanks colleagues for the suite of reports we've got before us this morning.
I’ll just follow up on Ruth’s point and that latter answer you gave, Rachel, around the governance issues. I just wanted to pursue some of that. 
But I mean I think it's really important, first of all, to say that, if you look at your, top of your covering report, Helena, as Controller, there's an awful lot in here to welcome, and I think it'd be wrong of us not, and others have already done this, just acknowledge that. 
You know, it's quite clear that the council is showing service performance improvement, satisfaction levels are generally good compared to comparative councils and other councils generally, and all the recommendations from previous best value assurance reports have either been met or have been superseded. Those are things we often can't say about all local authorities’ BV reports that come before us. So I think it's really crucial to say that up front. 
But there’s a but, and there's always a but. And if you jump right to your last paragraph in your covering report, Helena, you say, and this is linked to a lot of the lines of the questioning that we’ve already had this morning, you know, a step change is required to achieve financial sustainability going forward. 
And underneath all of that is leadership and governance, that we're sort of digging around just a second ago. In paragraphs 13, I think it is, to 15, of your covering report, Helena, as Controller, show that there's some ongoing work and you just referenced this, I think, Rachel. There's a management restructuring review, which I think you say is going to report in May 2026 and that's going to be followed by a governance working group report in June 2026.
And I know that obviously given what you just said, this is ongoing work. But there's an awful lot of other things happening around May 2026. There’s a small factor of a local… Scottish Parliament election and that's going to be followed very quickly, obviously, by a local authority election in May 2027. 
So I guess I'm really just looking for some reassurance from your perspective, as auditors who are there on the ground or maybe from your perspective as Controller, Helena – are these two pieces of work going to report in May and June 2026 because they, they do seem quite fundamental to making progress on achieving financial sustainability in the longer term. They are linked, I think.
And you know, I would just like to have some reassurance as a Commission that they're going to be delivered in in the short term, because those dates are now just a few months away. I know you can't answer conclusively, but any help you can give from sort of work on the ground will be very welcome. Thanks Jo. Thanks Helena.

Helena Gray  1:07:49
I'll bring Rachel in. I wish I could predict the future, and whether those reports will indeed be delivered on time.
I think as Rachel's already outlined, the ambition and the commitment is, is articulated and, and we will continue through our audit work to, to review and, and keep that in mind to see whether indeed those commitments are delivered. I'm not sure we can offer much more by way of positive assurance in that regard. 
But Rachel…

Rachel Browne
I’ll say that’s the latest position that I've had from the council. We're now in audit planning for the 25/26 audit. So that will form part of our discussions.
I will say there's been a previous report related to restructuring, but that was a private paper for the council, so it's not being created from nothing. There’s work underway … and that’s more developed.

Andrew Burns 
That’s all good to hear, chair, thanks very much. I mean, I think it's just the very fact of flagging it up, and obviously, colleagues are aware of the importance of these documents actually being delivered to the long term financial sustainability, and I think it is important that they do actually stick to these timescales as best they can. Thanks very much.
Jo Armstrong
I'm going to take prerogative and move on to workforce.
Jennifer, are you able to pick that up?

Jennifer Henderson  1:09:17
I am and I think I’m going to be quite quick, Jo, because I think workforce has been a theme mentioned in your responses to a number of other questions, which I think reflects the fact that it was a pervading theme through quite a bit of the report. There were quite a number of references to capacity challenges being a reason why things hadn't happened or had gone slower. 
So I was just interested to tie that up, I suppose, and say, how confident are you from your audit work that the council are working to deliver a strategic workforce plan that's actually going to resolve their resourcing problems?
And that they are being as creative as they need to be given the geography and the multi-island context and everything else to actually… you referenced, Rachel, yeah, they are seeking to think about how they attract people to Shetland and things like that, but it's very specifically in your annual audit report, I saw that the council was due to get an update on its strategic workforce plan in December 2025.
And I just wonder if you've got any more information about, did that plan update come and if it did, did it give assurance that the kind of workforce challenges are on the way to being fixed, because it seems to me to be so fundamental to underpinning quite a lot of the stuff they want to deliver. 
They can't deliver if they haven't got enough people to do the delivery, so anything you could say about how the council is getting on with addressing their workforce challenges will be really useful. Thank you.

Helena Gray  1:10:50
Thanks. I’ll bring Rachel in to talk about the specifics of the workforce planning. And the service plans as well. 
I think, I think it is important, though, to highlight the rural location and, and I suppose the wider challenges that can come with that around affordable housing, connectivity as we've already discussed as well.
The council has run a recruitment campaign to promote and to attract people to live and work, which includes a dedicated web page that they, that they have, they also offer support for relocations.
As I've mentioned before, they've committed to better using digital technology and they have a flexible working policy that has, that they have used to help fill difficult posts. So I think this is clearly, we've identified it as a challenge, but it is also clearly an area of focus.
But I'll bring Rachel in to talk specifically about how the council have responded to those previous audit recommendations, as well as progress on its workforce plan.

Rachel Browne  1:12:01
With regard to the specific question around, did that report come December? I'm sorry, I don't have an answer, I can't remember. That, following up on that will form part of my 25/26 audit, we’re just starting planning just now.
And the Controller’s stolen some of the thunder around the activity the council is engaged in to boost that workforce. 
And the, in terms of the service plans, the details, that's, that's in progress, there's, majority of service plans, service workforce plans, have been developed. Again, linking that staffing to the medium term financial plan. That's all interlinked with bringing in service plans. Understanding how the council uses its casual, temporary, agency workers is going to be key. That's in progress as far as I'm aware, that's something that needs to be included, and used to inform further workforce planning, because there’s a high level of temporary contracts in Shetland in that regard.
And, sorry my thought’s just gone there, on what else they were going to do!
But around getting the, the workforce plans in place, service level workforce plans in place, they are prioritising elements of strategic workforce planning and following that, the outcome … future years’ audits in terms of assessing progress there.
I don't think there's anything else I would like to add. Some of that follow-up will come in this year's audit, OK, so that’s in progress and…

Jennifer Henderson
Thank you.

Jo Armstrong
Angela.

Angela Leitch  1:13:53
Thank you, and thank you for that, Jennifer. Can I just ask a wee bit about some of the practical steps that the council and partners are doing to try and… I won’t say address but, minimise the impact of the demographics of the situation they have in Shetland. I don't underestimate the challenge, but we've heard quite a bit about ambition that I'd quite like to hear about what practical steps are being taken to try and attract more people to the islands? Or to encourage people to work for some of the other employers on the island?

Helena Gray  1:14:29
Yeah, so I suppose, I mentioned already things like the recruitment, the campaign they've run to attract people and the relocation packages that they offer as well as flexible working.
And I think, you know, highlighted in the report, a couple of instances of where that has really helped posts.
I think in terms of the partnership aspects of it, I think Rachel might be able to say a little bit more on, on the detail of this, I think.
Population is one of the key ambitions I think of the, of the partnership, the Shetland Partnership. They, so they have four overarching objectives within that partnership where they review progress regularly.
One of the indicators that they review is population aged 16 to 29, they also measure the number of employees in Scotland, and they do take annual reports on those, the latest annual report of that partnership was published in September 2025. 
So I suppose it speaks to that point that we were making around commitment and, and monitoring progress and keeping an eye on that. But Rachel, I don't know if you've anything further to add in terms of those practical actions beyond the ones that I've already mentioned.

Rachel Browne  1:15:53
Beyond ones that you've already mentioned? You’ve covered what we, what we found in the, the workforce thematic work around that, about how to recruit to fill hard to recruit-to posts by using remote working and that kind of innovative practice. 
They're also looking to retain people who would perhaps otherwise leave, young people, to go to university or college, and some of the … redevelopment project around creating that additional student accommodation to boost the number of students that can be retained on Shetland. The University of the Highlands and Islands Shetland, and that partnership, so that's to, to retain young people and to attract them to Shetland and get jobs.
Say the, the website and the, I’ve forgotten what it’s called, that's terrible! To encourage people to come to Shetland and off the back of well-known Shetland events to have that … Shetland and build on that to attract people to come to Shetland.
Its, its importance in, in, not industry, but you know, the cultural importance of Shetland and quality of life in Shetland.

Jo Armstrong  
Conscious of time. Might I ask my colleagues to accept we move on to the last topic, which is community engagement. Unless anyone has any burning question on any other aspect? 
Nichola.

Nichola Brown  1:17:30
Thank you, and thank you for the reports. 
I wanted to ask a little bit about participatory budgeting. I didn't see it mentioned in the suite of reports and I guess just tying together those issues we've spent some time on around Shetland's position with reserves and its income generation. 
I wondered, whilst the report suggests that there's a good level of commitment to community engagement, how is Shetland doing in terms of achieving the national 1% target of spend on participatory budgeting? And have you got any more insights on that?

Helena Gray  1:18:14
Yes so this is something that was looked at in the, the first BV thematic, but I'm not sure we have more up to date information than that. But in the leadership thematic, we highlighted that between 2020/2021 and 2022 and 23, there'd been a nil return for participatory budgeting, as the Council has a very rigid definition, and had said that items couldn't be included within that unless it met that criteria. Since then the corporate management team and council have been considering this and revising and working on a more realistic approach, I suppose, to participatory budgeting. 
I understand that there were to be discussions with COSLA and elected members and officers on how to mainstream participatory budgeting, but I'm not sure we have a more detailed update from when we reported it in, in the thematic. 
I think more generally, what the audit team have highlighted in terms of community engagement around the, around the budget is that, there was a public consultation in December 2024 to get input on the 25/26 budget. They also ran a survey where there were around 975 responses which they intend to use to inform the next corporate plan and service redesign. 
And again in the, in the transformation thematic, the auditors were able to point to evidence of the council engaging with communities on areas around its Budget, Council Tax and the local development plan. And so I think, a clear signal that that engagement is happening. But on that formal participatory budgeting definition, I think there is ongoing work still happening, but I don't have the latest position.

Nichola Brown
That’s really helpful. Thanks.

Jo Armstrong  1:20:31
Any other questions on that topic or any of the other topics, or have we covered enough? No.
Thank you all. You've given us a really good additional information that we can work on and our intention is in our private session we’ll then discuss how we want to take this forward. But thank you all for what you've done so far.
I think that means we have a slight break.
Back in, back online at 11:35.

Jo Armstrong  1:21:03
… The Scottish budget briefing and financial bulletin supplement. 
Welcome all. Alison, I think you're leading off.

Alison Cumming  1:21:12
Yes. Thanks, Jo. Good morning everybody.
…Two related products to the Commission today. The first is our internally-produced briefing on the Scottish budget, which is produced for the Commission and the Auditor General. Your version has a slightly greater focus on, on local government related issues and Tom has been leading, really that work on the internal budget analysis from within our public finances team.
We've also tabled the Commission’s supplement to the 24/25 financial bulletin on the draft budget and the draft local government settlement. And you might have seen that was published earlier this morning. But the core analysis on the local government settlement is within that publication and we've just added some extra detail on certain elements in the internal budget briefing.
We've also specifically incorporated some more information about the baselining of funding and some pay and workforce issues that were requested by members at the January meeting of the Commission.
Just by way of introduction, just a few key headlines and, and points to note.
We're still at the draft budget stage, the budget is proceeding through the Scottish Parliament and Stage 1 debate, which is the first parliamentary vote on the budget, takes place this afternoon.
It looks like there's still quite a lot of negotiating going on between some of the opposition parties and the government, so I think that the probability is that there will be further changes to the draft budget, either this afternoon or at the final voting stage, which is in a couple of weeks’ time on the 25th of February.
So just bear that in mind. This is very much a point in time analysis.
The overall position for local government for 26/27 within the finance and local government portfolio, it's a headline settlement of £14.8 billion, but that rises to 15.7 billion when you include planned transfers from other portfolios. In totality, that represents a 2% real terms increase from 25/26.
But it's, it's worth highlighting that there are very different pictures within that for resource funding and capital funding. Resource funding is expected to rise by 3% in real terms and that includes, it’s, sorry, that reflects, compares to an equivalent increase in the overall Scottish government's REDL budget of 2.5%, so slightly above the Scottish budget uplift.
Capital’s a very different position, where we're seeing a 14% real terms decrease year on year, which compares to a 0.2% decrease in the overall Scottish Government's CDEL capital budget provision. Which implies, I know the Commission has a strong interest in this point, a greater reliance on borrowing to fund capital infrastructure requirements within local government.
The Scottish Government did also publish a three-year spending review and four-year capital plans alongside the draft budget this year. We've reflected our analysis and interpretation of that within the 24/25 financial bulletin supplement. But what I would want to highlight is it just underlines that if the settlement stays as projected in the spending review, it will be very challenging for local government. 
The published figures covered only that core portfolio funding and we don't have the detail on expected transfers, but just taking that portfolio funding in its own terms, every single element of funding would be decreasing in real terms over the three years to 28/29. 
Now these are planned figures. They could well change before, but it just shows I think, I think it strengthens the messages that the Commission included and put across in the financial bulletin about the need for local government to be preparing itself for the future. …
We also flagged that those medium term figures have been published at an aggregate sector level only. There are no council-level figures, which obviously has a significant impact on the usefulness of those figures for individual council medium term planning.
So myself, Tom and Martin, very happy to take questions. And I should also have said at the start that rumours of Martin's departure from Commission business were slightly exaggerated at the last meeting, but this is definitely expected to be your swansong for now.

Jo Armstrong  1:26:47
I'm pleased to see you back, Martin. Good. And it’s a good, it’s a good report. It gives insight into this, the really, really challenging time we're facing. I'm going to kind of just force us all to look at exhibit 1. Because exhibit 1 is telling us how difficult the world is going to be as a cumulative reduction in the next three years of two and a half, sorry, almost £5 billion. That's the reality, why transformation matters, and it's not transformation in three years’ time, it's transformation now to cope with that reduction that is quite baked into those numbers, it's a really quite scary set of figures.
Whilst I have this report, can I ask, for information, I think there's something in here I'd quite like to raise out, but I might be misunderstanding the number, but it's on the annual managed expenditure line, which shows, which is not relevant and is relevant because it covers teachers’ pensions? And teachers’ pensions are fully covered as a consequence of transfers from Treasury to Scotland.
I think that's quite an important kind of feature in this, is that the pensions line, both of health and police and fire, and local government are covered off by transfers from Treasury, and those are going up. 
Wanted that on the record, if my understanding of it all is correct.
OK. Questions from members. Derek.

Derek Yule  1:28:10
Yes, I mean, thanks, thanks for the report. And I think thanks for all the work that the team have done because it's a heck of a job trying to make head nor tail of the government's budget, to be perfectly honest.
And I wanted to ask about non domestic rates. 
Because I found the paragraphs quite difficult to get my head around. Whilst it's not part of local government budget it is because the income from NDR is ringfenced for local government. So I think what's in here is important in terms of a wider context of the funding coming to local government.
So I wasn't entirely sure, I mean we seem to talk about a real terms increase in funding and then it's lower in real terms than it was pre-Covid. And then the, the rates pool is in surplus but there's a forecast deficit over the next few years that they need to get back. 
So I wonder if you could say a wee bit, what does that mean for actual funding to councils. The government makes estimates about income it expects to receive from the non-domestic rates pool, which is then allocated to councils as part of the grant settlement. 
But some of the assumptions bring in policy decisions government might take, what the impact of revaluation, so I mean, there's a risk attached to that and I'm not quite sure if it's clear from what government estimates are. I can recall a number of years ago now, as a director of finance that COSLA got hold of government working papers, but then pulled holes in it because it was full of overestimated assumptions. And I'm not sure they ever let us near it after, after that. 
But I do have a real concern about where NDR is going and it is a, an important element of overall funding for local government.

Alison Cumming
Yeah, thanks Derek. I’ll come in and Tom or Martin might want to, to add.
Yeah, certainly there is a, I probably shouldn't say in public session a dark art, but I think it is quite a dark heart in terms of how the NDR pool is managed! 
So effectively the, what local, the funding local authorities will receive in year is based on that estimate that's locked into the budget. So that sort in-year risk is really borne by Scottish Government through a separate account of the non-domestic rates account, which is audited by the Auditor General, so we do have an interest through the Scottish Government’s annual audit in that.
But there has been, Scottish Government's risk appetite has varied over the years into the extent to which the non-domestic rates pool might be in surplus or deficit, and how that might be used to balance out some of the budget settlements in different years.
And the Auditor General has made successive recommendations about the need for Scottish Government to consider the sustainability of that NDR pool and to have a plan to get it back into balance when at times it has effectively been overdrawn in order to, to support the, the funding available to councils.
Revaluation years obviously increase the uncertainty around a lot of this as well, and provision needs to be made for potential appeals and that process.
The, the other point that I would just make aware that, that not all colleagues will have had the pleasure of being intimately involved with, with NDR forecasting and these things, is that the Scottish Fiscal Commission does prepare those forecasts on non-domestic rate income that go into the Scottish budget, so that has brought an increased level of transparency to the forecasting since the Fiscal Commission was formally established.
But I don't know if there's anything that Tom or Martin would want to add.

Martin McLauchlan  1:32:12
Just in terms of Derek's point around the risk profile to councils. The way the settlement is calculated is based on total estimated expenditure and then assumed Council Tax, ringfenced grants, NDR netted off to get to your revenue grant support.
But in actuality, it's a commitment given to revenue support funding. So if there is an overestimate in NDR what you'll generally see is an increase in GRG to compensate for that. So the actual revenue funding from the Scottish Government that councils plan based upon, is the totality of … plus GRG.

Derek Yule
Yeah, no, that’s right. I suppose the challenge is when it comes to revaluation, it’s actually, councils, because I think last revaluation it raised, we went up about 10%. So whilst it's adjusted at a national level, I think the implications for local government.
Particularly getting back what the paid into the pool.

Jo Armstrong
Jennifer.

Jennifer Henderson  1:33:16
I just wanted to A, say thank you very much for Exhibit 5 in the report because as I was reading the start of the report, I was like, this is all very interesting, but I wonder what it means for our work programme and then lo and behold up comes the table that told us how the budget changes in some way linked to things we were already planning on. 
And then my thought Alison was, I suppose, the opposite end of that question, which is, are there any budget changes where it might make us think we should be looking at something different in our work programme, because we see, for example, a lot of money being taken away from an area and that might motivate us to say we should do some follow-up about the impact of that. 
It's probably not a question for now, I know we've got our strategy session in next month. I thought it might just be something for us to cross check that there isn't anything in the way the budget lands that means we suddenly think we should be scrutinising an area that perhaps when we didn't know what the budget settlements were going to be, we thought that's an area we can leave alone for now. 
So it's more of a marker to bring that up next month if that would be alright.

Alison Cumming  1:34:21
Yeah. And I think the some of the most significant movements in the budget are in relation to housing, which is featuring in the Commission's plan, but we'll just do that thorough check that there's nothing else that, that would imply that there is a gap.
I think, as a bit of a taster of some of the things that I might bring into the strategy seminar in March. I think that it's more on the revenue generation side and the capital funding side that we might want to reflect on.
The extent to which… the financial bulletin can only ever go so far in those two particular areas, and there might be, but it might be getting close to the time for the Commission to do some more in depth work on those areas.

Jennifer Henderson
I suppose if I can just briefly build, I mean that was probably where my interest was sparked because I noticed the significant reduction in capital funding around the climate agenda and was just thinking… what will be the implications of that and when might it show up in some of our audit activities?

Jo Armstrong
Christine.

Christine Lester  1:35:25
Yeah, thanks, just leading on from the housing question. Exhibit 3, changes in resource funding, quite a reduction in housing there, and then later on in paragraph 10, due to changes in portfolio structure, it's not clear where the reductions have impacted. 
Can you just give me an idea of where they might be impacted, just for my understanding actually of where it’s going.

Alison Cumming
Tom may want to come in on the detail of this. I think we find it particularly complicated in analysing some of the changes this year in the way that housing was stripped out as a separate portfolio in year.
And a lot of the ways that that has then been created by Scottish Government into a separate budget in year has varied in terms of what came out of the old, well not old, there's still the social justice portfolio, and what came out of the climate change portfolio. So there are quite a lot of caveats to that exhibit, Christine, but Tom knows all this inside out, so I will pass over to Tom.

Tom Charman  1:36:27
Yes, of course. Unfortunately I can't really give you a definitive answer again, simply because due to the portfolio structure changing it’s quite difficult to trace them. In addition, something that's worth bearing in mind is the fact that the budgets will be updated so the 25/26 was updated in year at the autumn budget revision, which again we don't reflect in this because we do a budget to budget, draft budget to draft budget, sorry. So that did change things slightly, in memory. 
I don't have the exact figures but if memory serves, I believe the housing portfolio, when the autumn budget revision is taken into account, is more flat.

Christine Lester
So it’ll become clearer then, is what you're saying?

Martin McLauchlan
Yes, I think so.
Tom works quite closely with data analytics for stripping out look at those budget portfolios and looking at the budget line by line, and therefore look at past budgets and reorganise them to provide that trend analysis. So not only over the medium term, on the assumption there will remain a housing portfolio, we'll see that trend analysis more clearly, but again through the regular budget cycle, autumn and spring budget revisions, we'll be able to get a comparable basis.

Christine Lester
Yeah, OK, that's good.
It's just really helpful in terms of our strategy. Jennifer mentioned about what we do in the housing area just to have an idea of where we're going.

Mike Neilson  1:37:47
As ever, very helpful papers and very helpful to see the broader Scottish Government context as well as the specifics of local government. 
The only thing I would say, which is maybe a complement to what Jennifer was saying, is it rather confirms the work we're going to be doing in relation to housing and health and social justice, because those are two of the most impenetrable parts of the, of the budget that, that we see here, and it's very difficult to draw, to draw judgments. So, those, I think that both of those bits of work should be very helpful, I think.

Jo Armstrong
Again, it's a good backdrop and a kind of contextualising of our challenge around local government delivery of efficiencies, transformation and mindful of how they prioritise their spending
Angela.

Angela Leitch
And just on that, Jo, I think it is, transformation is absolutely key when you see these figures because they really are stark. 
But on top of that, back to an earlier discussion that we had about public service reform, it's going to take more than local government to address some of these issues. And we're seeing the same challenges faced by other parts of the public sector. 
So I do think that there is a real call for us to be pointing this out in many of the reports that we publish.

Jo Armstrong
Any other questions for Martin, Tom and Alison?
Thank you. Partly stunned us into thinking, oh my goodness. But again, a helpful kind of backdrop, thank you for that.
OK.
Martin, I'm pretty sure we will see you again.
[Inaudible]

Martin McLauchlan
No.

Jo Armstrong
We’ll take that personally!

Martin McLauchlan
[Unclear].
Maybe see you this time next year.

Jo Armstrong  1:40:03
That takes us to Item 7, which is the local government policy update.
Joe, you’re in the chair.

Joe Chapman  1:40:13
Thanks Jo.
Not a huge amount for me to update on since the report was published and obviously the key area is the, is the budget, and that’s been covered very comprehensively already.
I thought one thing I might just draw attention to is the fact that the, the three publications that the Commission put out in January that featured there, the delayed discharges, the best value on North Lanarkshire and the financial bulletin all had quite unusually high levels of, of both media coverage and engagement with, with the report on social media, and in terms of downloads of the reports from the website. And I thought it was quite interesting. We're obviously doing a little bit of thinking about this in terms of the strategy discussions we've got next month. 
Thinking about what is it that might prompt or generate that interest, so that's something that I’m looking at. But obviously three very different types of reports, one about a specific policy area, one about council finances in general and one's about a specific council. So they all have kind of different aspects that help to boost that engagement. But it's interesting to note that that the Commission seems to have a bit of a, I guess a sense of momentum, that its publications seems to be getting more and more and more attention as they come out.
Obviously the medium and longer term impact’s a different issue. But yeah, certainly that initial attention seems to be quite positive.

Jo Armstrong
That's interesting. Thanks for looking at that. Any questions for Joe. So we've got Jennifer.

Jennifer Henderson  1:41:40
Joe. It isn't in your report, but I did mention earlier I was going to ask you, so I'm not about to spring this on you, but I thought it's worth mentioning in the public session.
I'd heard on the news that the UK Government is giving grants to councils south of the border to help them with the debt that they've built up around the provision of special educational needs support, and I'm just wondering, A, does, do those grants potentially translate into consequentials for Scotland? B, have we, have we heard anything about whether the Scottish Government is thinking of following suit? 
I'm not completely clear how the funding works south of the border around that provision versus up here, but I just thought it was interesting that there'd been recognition that this had been something that councils were having to borrow to support and the government south of the border is trying to, what my inference probably simplistically, was sort of wipe, wipe the slate clean in terms of the money and allow them to think differently going forward about how that provision is funded so.
I don't know since I forewarned you at 9:00 this morning, I was going to ask you about it whether you had a chance to have a look!

Joe Chapman  1:42:49
Thanks for that. Thanks for the heads up as well. It's something I did, I did spot, haven't had a chance to look into completely. From what I've seen, I think it's, it's quite a specific situation that they're dealing with.
Of course, across the board, England and Scotland and elsewhere in the UK, additional support needs or whichever way it’s described or named is, is becoming an increasing financial pressure for councils. 
I think there's been a long term process in England where these debts have been built up. There's something called a statutory override that's kind of hidden them from the accounts which is due to come to an end in a couple of years and there have been warnings about the impact that that is then going to have on councils and they're going to.
From what I’ve read I think it's a specific approach that's being taken to help to relieve councils in England of that, of that debt and of that pressure when it, when it comes through. So I don't think it's quite the same as the government increasing their budget, which would, for a devolved policy area as this is, increase the consequentials. So I think it's a very specific type of measure that they're taking, but it's something that I will definitely look into and confirm that.
Obviously it’s of limited direct relevance to the Scottish context, but as I say, it's something that is similar to a pressure that councils in Scotland are increasingly facing as well.

Jennifer Henderson  1:44:11
As I say, when I heard it on the radio, my ears just pricked that because I was like, oh, is this a thing that's about to come and manifest in Scotland as a, as an issue and we just haven't understood it might be coming. So thank you, appreciate that.

Jo Armstrong
You’ve triggered a lot of questions, so we've got Andy, then Christine, then Mike then Nichola.

Andrew Cowie  1:44:32
Thanks, chair. Thanks for the paper, Joe.
I haven't given you a heads up!
West Lothian Council, I noticed, had 10,000 people respond to their budget consultation, which seems an amazing number.
Any intel as to why people took up their laptop or pen to respond? Could we learn anything from West Lothian around it?

Joe Chapman  1:44:58
I haven't looked into the specific case, and I think it's something that may well be picked up as part of the budget briefing, it certainly has in previous years.
Sort of in terms of that across the board, you know, how well councils have been engaging with residents and the kind of response they've got.
I’d just surmise that it’s part of that increasing attention that people are paying to the issue, and we have this sort of trend we're seeing this, you know, strong feelings around Council Tax, for example. There’s then an onus on councils and others to explain the kind of part that that plays in the budget that a council has alongside other sources of funding. So I think it's just, you know, when people have a strong opinion, they're more likely to, to participate in any kind of survey or consultation exercise. 
Whether there is any particular aspects to the approach the council took to particularly kind of clearly kind of reach people and get their attention, I'm not too sure, but it's like a combination of those two things, I think.

Carol Evans  1:45:59
As a West Lothian resident can I give a comment? We actually got through our door a bulletin which we get every month that I think actually people read and the majority of that bulletin was, ‘these are the things we might be stopping’ and I was reading it thinking ‘oh my goodness, please don't stop all those things!’ 
So I think that is a why there was such a response, because they actually detailed out every service they're thinking they're going to have to cut and they were all emotive services like playparks and different things.
And it, the, it was an easy way to actually respond. It came direct into your door. It was easy read format. It was very clear. There was pictures, there was graphics. So I think… I don't know what other councils have got, but certainly I thought well that's quite forward thinking.

Joe Chapman
And certainly in previous reports that I've done, I've picked out examples of councils who are setting out a whole range of different options, and you’re right, it's possible that that is quite eye catching and catching the attention as well.

Jo Armstrong
Christine.

Christine Lester  1:46:57
Thanks, Jo. And thanks, Jo, as ever, for a very informative paper.
Just going back to the recent publications and you mentioned three, but the fourth one was community health and social care performance, which really didn't perhaps get the promotion that, perhaps due to its publication date. But given the work and effort that went into the excellent data tool, just wondered if there's any way of measuring the uptake of that data tool and the usefulness.

Joe Chapman  1:47:32
Something about the specifics of that, and then, and then in general around the data tool, and how we, how we measure the use of that. So I think that there was a conscious decision made with the performance output that it would be something that we would direct to the sector rather than the public, so the delayed discharges one was the one that we did the media work around and we knew would, would attract that kind of attention.
The health and social care performance obviously supports that and it's something we can continue to reference, but it was mostly around or a large part of the purpose of that piece of work was to collate a whole range of disparate data from different sources and put that together to build a bit of picture, and then really invite authorities to, you know, look into that, investigate the trends, investigate factors that were kind of under, underlay, underlying the data that that included. 
So it wasn't that, it was, it didn't get attention, it was it was the fact that it was quite deliberately targeted at that audience rather than a, a media audience. And as you say with, with it coming out at the same time as delayed discharges, and I think there was a connection between the two, that's why we didn't see that the performance data feature in terms of media attention.
In terms of the data tool in general, I think the challenge that we have in measuring the use of that is that it's reliant on measuring what are called page views, so when people access a page rather than download a document. And it's, it's quite, increasingly common, I think, for people who kind of reject the tracking of websites that they visit, so it's more difficult to track page views. We'll get numbers, but they might not be the whole picture.
But we do look at the page view figures and that's something that will come through when I look at statistics for how much, how many downloads publications and things have had.
So it's a different way of tracking it. The best way I think, to see how much that's being used is to see if there's any response or anything that changes or any feedback we get from the sector, in particular to the content of that output.

Christine Lester  1:49:41
So I'm, I'm particularly interested, because it's published once, that doesn't mean we walk away now and don't do any more with it. So I'm particularly interested that having pointed it towards authorities and those delivering services, there's no reason why service users shouldn't be informed about the background that's available in this tool. In fact, they might find it very useful. So I just wonder if some thought could be given in the future to how we could use it or promote it in some way, whether it's through social media, links or whatever.

Jo Armstrong
Alison, can you say what's actually happening with that?

Alison Cumming  1:50:18
Yeah how we’ll pick that up, Christine. is that we want to better understand how IJBs themselves are, are using it, as part of our follow up work. 
And we also will come this afternoon to look at that IJB financial bulletin and obviously we're updating that financial tool every year, so there will be a decision also for the Commission as to the extent you want to invest resources in keeping it up to date in future years and the extent to which we want to see, and it was one of the recommendations in the bulletin that supported it, that went alongside the performance tool, as to whether we want to see the sector take this on and we want to see IJBs, with support from Public Health Scotland, own the, the publication and the transmission of their data. Something we would, I'm sure the Commission would want to hold them to account for. 
So it's I think it's a little bit of a let's see what happens in terms of the sector taking ownership, but I think it's a good point. I will pick up with Joanna if there's anything more we can do in terms of building public awareness of that tool, 

Christine Lester
Yeah, I think just the very fact that it’s performance.

Jo Armstrong
Yes, but if it's not updated then it becomes a frustration. If you click on it and it's six months out of date. So the issue for us is the extent to which we think it’s adding serious value and we allocate significant resource to maintaining it.

Christine Lester
No, I understand that. But I mean the public has a natural interest in performing.

Jo Armstrong  1:51:38
Indeed, it does. I don’t disagree with that. All I'm saying is if you point them in the direction of something that doesn't keep getting updated, you could be equally frustrated about not being seen to be on the ball. 
So I think there's a debate to be had, Christine. I think it’s a valid question, but I think it's a debate to be had about, are we taking responsibility for maintaining it or is the sector taking responsibility for maintaining it?
If it’s us, then that has implications for our work programme in other areas. I’m not saying we shouldn't, but it isn't a guaranteed kind of continued development of that report. 

Christine Lester
No, I understand that. But how would the public know that there was even that tool there, in order to ask for it to be developed by the sector?

Jo Armstrong
OK. I'm not saying they shouldn't know or can’t know … going to try and help us get that. If you've made it clear to them it's there, I would expect they'd expect it to be updated, and if we're not going to update it, we've got to be thinking about what is it we're pointing in the direction of. A static, old set of data sets or something that has value.

Christine Lester
No, no, I understand the updating part of it. My, my point is really is if the sector's going to take it on and the public doesn't push the sector to take it on, because the public doesn't know.

Jo Armstrong
No, no, that’s a fair, that’s a fair challenge.

Christine Lester
That's where I'm coming from.

Sarah Watters
We do have the Chief Officer of the IJB network coming to the Commission in March for a forum, for example.

Christine Lester
Maybe they should be making it public and not us.

Jo Armstrong
Mike and then Nichola.

Mike Neilson   1:53:03
Thanks very much. As ever, a really interesting read and emphasises just how much is going on around across the board. 
I suppose mine were more comments in relation to some of the stuff about the budget, particularly the IFS.
There seemed to me two things which are really important for us. One is that in the spending review, as opposed to the annual budget, it looks as if there is a significant shift from hospital care to social, health and social care. 
Quite difficult to understand the implications of that, but it feels like quite an important thing for us to dig into in the future. 
And the second in relation to capital, where we know that local government is seeing some further reductions.
It's very striking that as prisons are getting completed, there will actually be more money to go around for other portfolios and it doesn't appear that local government has benefited from that. 
Which again is, in terms of looking at the relative treatment of local government, is quite important, I think.

Jo Armstrong
OK, I'm, I'm slightly confused, Mike. That's the previous paper rather than Joe's papers. Or is there some?
I think.

Mike Neilson  
I think it’s one of the IFS references that…

Jo Armstrong
Is that something that we can be reflecting in our reports because I think it's useful kind of serious analysis.

Mike Neilson
Yeah, I think we'll probably come to it again today.

Alison Cumming  1:54:58
Yes. And I think there was a, as well as in Joe's report, there was a link at the end of the budget briefing to IFS analysis, which is very useful on the Scottish budget, alongside other, other Scottish based commentators. I think, Mike, be happy to have a conversation offline as well about where some of those, some of those indications might take us in terms of work programme thinking about as we head into strategy seminar in March.

Jo Armstrong
Nichola.

Nichola Brown  1:55:28
Thanks Jo. Two quick points. One is, just picking up Christine's point about the data tool – Ruth and I could take that into the comms group, as an item for discussion, I think that would be helpful to do that. 
The other thing is, Joe in your report, and it kind of tracks back a bit to Jennifer's first point on your paper about the additional support for learning. You've included the reference to the National Review announced by Jenny Gilruth.
Just to say that having had a quick cursory look to try and dig into that a little bit more, I've noticed that Janie McManus who's leading on it, will be leading an expert group due to report in two months, the review report will be completed in two months, according to the website, Scottish Government website, and shared at an event on the 12th of March. 
So it does beg the question for me about the nature of that review and the scope etcetera, and also who’s on the expert group. So I don't know whether that's something that is possible to dig into a little bit more?
Keen to know.

Joe Chapman
Yeah. I can certainly look into that and report back.

Nichola Brown
Thank you very much.

Jo Armstrong  1:56:52
Joe, again a useful kind of canter through quite a lot of what's going on in the sector. Thanks again for keeping us up to speed with what the issues are.
If no other questions that takes us on to item 8, which is the chair’s update. 
That’d be me.
I wanted to pick up kind of maybe three key areas of information.
One is the visit that Andrew and I had to the Western Isles, which was a follow up from the best value, which was an extremely positive session because I think the council were clearly had been shaken by the 102 cyber security report, not the report but the cybersecurity breach.
But they took on board our … and were very supportive of the time and effort to come up with their answers before we wrote our report so that was, that was useful.
They were very supportive of the Scottish Government’s digital security support and the national security authorities, the National Cyber Security Centre, as giving them additional capacity to deal with the issues.
And whilst they've learned a lot, learned it the hard way, I think it has actually been an extremely useful way of them realising the importance of digital and how to manage that, that, that risk, that risk effectively.
Another one I wanted to pick up was from our meeting I had with our, effectively our Scottish governments, which is Catriona MacKean.
And I, it's a really good kind of every month check-in with the sponsor team. And she's extremely supportive of what we're doing and keen to help wherever they can, so I'm, I'm pleased that that arrangement, that relationship is a really helpful and supportive one, and I think she gets a lot from our reports that we send her that she can see where we're going, what we're doing, and gives her clarity when she's advising her Cabinet Secretary.
And then recently I met with Ariane Burgess, the convener of the local government committee. And it was partly as a, as a desire to try and establish a slightly more structured approach to engaging with the committee, because we do get invited. It's slightly more ad hoc than it could be and slightly less clear as to how our work feeds into their scrutiny of, of the various public sector bodies, so I think there was an, there was an interest in re-engaging or engaging slightly differently. 
But clearly it's going to be the next, the next Parliament and the next chair, the next convener of the committee, so.
Their legacy report, I hope, will flag up there's a desire to engage with us in a slightly different way to help improve their scrutiny of, of the sector, in the right way, they clearly don't have authority to scrutinise local government but the kind of the, the wider public service reform, public sector reform agenda does hit the committee's desks or thinking.
So getting a different approach i.e. we can help in advance them think through some of the issues that they may then want to take evidence on I think was a useful, a useful starting point, so.
Three areas that are useful for, from, I think, getting a wider stakeholder engagement process going in a, in a way that gives us a chance to influence their thinking and also gives us a chance to understand, are we having the impact we're hoping, we want to have, and if we're not, how do we adapt to make sure our impact is as effective as it can be?
But those, that was the two, three things I wanted to pick up specifically, but I'm happy to take any questions on any item on the, on the paper on item 8.
Oh, Jennifer.

Jennifer Henderson  2:01:17
Only a quick question that just occurred to me earlier when Angela asked about when we last saw Louise Macdonald. Of course, Louise Macdonald has now left the Scottish Government and her replacement is Miriam Craven. I'm just wondering.
Is, is at some point there an opportunity for you to meet Miriam and just, I mean, I'm sure Catriona and Helena and others are making sure that Miriam is sighted on the work of the Accounts Commission, but feels like that's a acquaintance we should make.

Jo Armstrong
No, you're absolutely right, I do know Catriona is keeping her informed.
We have a stakeholder engagement paper or plan. 
And that clearly it has to is part of that, the extent to which a new cabinet secretary coming in, a desire to engage effectively with them and the new, there is clearly, the new DG coming in.
Give a bit of time and space to make that work, but you're absolutely right, they need to be on our radar and coming to the Commission rather than me going to see them would be key part of that engagement, I think, yeah.

Jennifer Henderson
I knew it would be on your radar.

Andrew Burns
We were just saying, in response to Jennifer’s valid point, that she was at the COSLA conference which myself and Carol attended. And I think Carol you were on a different table, but I was next to her for the evening so I did get to spend quite considerable time with her.

Jo Armstrong
Every time you go through to one of these things I keep thinking, oh, haven’t met them for a while or I haven't met them. What have I been doing with all my time?

Jennifer Henderson
You’re very busy, Jo!

Jo Armstrong  2:02:53
She's definitely on that, on that stakeholder engagement list.
Any other questions?
Takes us to item 9, which is any other public business anybody wants to raise?
On that basis, we close the public session, and if you can turn off the recording.