Agendas, reports and minutes

14. Capital Programme Refresh
Ùrachadh a’ Phrògraim Chalpa 

(a)Corporate Capital Programme and the Current Financial Context 
Co-theacsa Ionmhasail

There had been circulated Report No. HC/24/19 dated 12 June 2019 by the Head of Corporate Finance and Commercialism. 

During discussion, Members raised the following issues:-

• it had to be noted that, given the huge challenges facing the Council in terms of the revenue budget over the next few years, the Capital Programme at its current level had to be seen to be at the maximum level of affordability;  
• the Council would need to keenly balance competing demands for revenue and capital spend over the coming years to ensure its long term financial sustainability;
• affordability was critical as this was tied into the Revenue Budget and there was a need to be realistic in terms of timescales;
• a further report would be submitted to the next meeting in September on new governance proposals and in the meantime all Members were encouraged to attend the monthly Briefings in order to be fully informed as to the current position;
• it was suggested that, in terms of future projects, one of the main factors over the next 5 years could be the Council’s ability to provide match funding;
• in relation to cost pressures, it had been stated that one factor had been the requirement to accommodate investment in affordable housing due to the Council deciding to balance the revenue budget by using the income from second homes Council tax and further detail was sought in this regard;
• there was a need for further information on the timescale which had been assumed within the capital plan for around £5m of funding from developer contributions;
• it had been stated that net property costs increased after capital investment as any savings from having newer, more energy efficient buildings were outweighed by increased rates costs. In this regard, and to mitigate against any extra costs, it was hoped that initiatives such as the installation of solar panels would be used on all future projects wherever possible;
• it would be helpful if a further report could be submitted to a future meeting on the potential to set up a Capital Scrutiny Sub Committee/Working Group with a view to ensuring that the Council was maximising spend on the key priorities of roads and schools by accounting for every pound/penny and as such only agreeing the funding for essential aspects of future projects; and
• it was hoped that consideration of new and simpler designs for school buildings, including modular designs, would be undertaken at an early date.                

Decision

The Council NOTED the challenges around the funding of capital investment and APPROVED the proposed timescale for refresh of the Capital Programme

(b)Care & Learning Capital - Early Learning & Childcare Programme and School Estate Improvement Programme
Prògram Calpa Sgoiltean

There had been circulated Joint Report No. HC/25/19 dated 21 June 2019 by the Director of Development & Infrastructure and the Head of Resources, Care & Learning.
        
During discussion, Members raised the following issues:-

• the proposed distribution of capital funding for the projects required for the delivery of the Early Learning and Childcare expansion programme and other essential school building improvements was welcomed. In this regard, it was essential that there were sufficient staff in place to implement the proposals;
• this was a very positive report and as such thanks should be conveyed to the Officers concerned and to the Scottish Government;
• the investment of £37m of Scottish Government funding, supported by £22m of capital funding from the Council, would have a extremely positive impact on over 100 schools across the Highlands (including 95 Primary Schools and 6 Secondary Schools). As such, it was essential that the necessary actions for expenditure were progressed in as short a timescale as possible in order to enable completion by August 2020 as stated in the report;
• improved procurement and programming approaches were being developed to ensure that best value was achieved and this was welcomed;
• there had been 83 school settings where capital investment had been required to support the delivery of the Early Learning and Childcare provision and it was encouraging to note that to date work had been completed in 11 of these schools with a further 13 to be completed by August 2019;
• the proposal to allocate funding to the projects at Beauly, Dunvegan and Kiltearn Primary Schools was necessary to ensure the significant upgrade required in each case and should be supported;
• it had to be noted that there were a number of schools in Tain which currently had modular units;
• in relation to Tain, it was highlighted that schools in this area had previously been identified as the worst in the Highland area and this had not changed. As such, it was imperative that these extremely challenging conditions were recognised and addressed as a priority;
• Local Members should be involved in all future proposals and correspondence from the Council in relation to local schools and in particular St Clements School which was in a very poor condition. In this regard, it was confirmed that the Chief Executive would be contacting all Parent Councils to set out the position; and
• whilst supporting the proposals as listed in the report, it had to be acknowledged that there were other schools throughout the Highlands which were also in a poor condition and which required the scheduling of improvement works as soon as was possible in future.               

Decision

 The Council:-

(i) AGREED the distribution of capital funding for the projects required for the delivery of the ELC expansion programme and other essential school building improvements, all in line with the approach outlined in the report and as listed in Appendix 1;
(ii) HOMOLOGATED the decision to award the contract at Ullapool Primary School as detailed in Paragraph 5.15;
(iii) AGREED to allocate the funding to the projects at Beauly, Dunvegan and Kiltearn Primary Schools as detailed in Paragraphs 6.3 to 6.5 and 6.8 and Appendix 1; and
(iv) NOTED that a report would be taken to a future meeting of the Care, Learning & Housing Committee to conclude the Statutory Consultation for the Tain 3-18 Campus as detailed in Paragraph 6.9 of the report.

15. Change Strategy and Change Fund Phase 3
Cunntas às Ùr mun Phrògram Atharrachaidh & Tagraidhean Maoin Atharrachaidh Ìre 3

Declaration of Interest – Mr A Christie declared a financial interest in this item as a Non-Executive Director of NHS Highland but, having applied the test outlined in Paragraphs 5.2 and 5.3 of the Councillors’ Code of Conduct, concluded that his interest did not preclude him from taking part in the discussion.    

There had been circulated Report No. HC/26/19 dated 18 June 2019 by the Chief Executive. 

During discussion, Members raised the following issues:-

• in relation to the savings identified within Category 3, and specifically the proposed Energy saving of £0.500m, clarification was obtained that recognition had been given to the fact that costs were currently increasing but that urgent action would be taken to address this in conjunction with other measures, such as reducing energy consumption through compliance and behaviour change, rationalisation of Council property, effective management of energy supply contracts and generation of income through the implementation of viable renewable schemes;        
• in regard to Asset and Energy Management, it was confirmed that one of the most important asset rationalisation projects for the 2019/20 period related to office moves and changes in Inverness, with a particular focus on the Headquarters building and a new approach to Mobile and Flexible Working;
• in terms of future proposals in relation to renewable energy, it was confirmed that this would focus largely on a solar/hydro approach; and
• it had to be a priority that any new arrangements would enable more informed decisions to be made by the Council in a much quicker timescale than had previously been the case.   

Decision

The Council NOTED positive progress being made to implement the Change Programme.

The Council also AGREED:-

i. The 4 priority areas for expenditure from the third phase of the Change Fund would be:

- 3 packages of external research and advice relating to:-

(i)     the current Community Services revenue budget: £75,000;
(ii)    investigation, analysis and options for improvement to the Council’s financial and performance systems: £70,000; and
(iii)   an analysis of suicide data to inform new partnership strategy for prevention: £15,000.
 
- Asset and Energy Management – Project Management, specialist expertise, EPC compliance and legal conveyancing: £172,000.

ii. A total sum of £332,000 for expenditure from the Change Fund in 2019/20 against the 4 areas as detailed in Section 10 of the report.

16. Governance Review: Progress update, initial recommendations and next steps
Ath-sgrùdadh Riaghlachais

There had been circulated Report No. HC/27/19 dated 20 June 2019 by the Chief Executive.

Decision

The Council NOTED the progress made by the review to date as detailed in the report.

Members also AGREED:-

(i)     changes to the Audit and Scrutiny Committee, including a reduction in the membership and introduction of a mandatory training programme;
(ii)    the development of an enhanced Training, Development and Wellbeing Programme for all Elected Members for the September Council meeting; 
(iii)   changes to report formats; and
(iv)    a revised schedule and reporting framework for the Governance Review.

17. Transitional Management Arrangements
Ath-structaradh Eagrachail – Ullachaidhean Stiùiridh Eadar-amail

There had been circulated Report No. HC/28/19 dated 18 June 2019 by the Chief Executive.

Decision

The Council AGREED the temporary arrangements in place to cover statutory functions in Education, Social Work and Financial Governance.

The Council also NOTED progress to date on recruitment to the newly established Chief Operating Officer and Executive Chief Officer posts.   

18. Annual Accounts for the Year to 31 March 2019       
Aithris air Cunntasan Neo-sgrùdaichte

Declaration of Interest – Mr A Christie declared a financial interest in this item as a Non-Executive Director of NHS Highland but, having applied the test outlined in Paragraphs 5.2 and 5.3 of the Councillors’ Code of Conduct, concluded that his interest did not preclude him from taking part in the discussion.

There had been circulated Report No. HC/29/19 dated 18 June 2019 by the Head of Corporate Finance and Commercialism.

During discussion, Members raised the following issues:-

• congratulations should be conveyed to the Officers, and also to the Budget Team, in respect of the transparency of the report;   
• whilst recognising the significant progress which had been made with proper governance, it had to be acknowledged that there would be considerable challenges to be faced by the Council in future; 
• thanks should also be conveyed to staff across the Council who had embraced the need for change over recent months;
• it was important to note that significant change had already taken place without the need for any compulsory redundancies;
• in respect of the Highland Council Year End position, it was noted that the Council’s accounts had shown that, as at 31 March 2019, the general fund non-earmarked reserve stood at £7.925m which was a decrease of £0.637m over the year. In total, usable reserves had decreased by £5.519m to £66.470m which was partly due to developer contributions being lower than in the previous year but also because there had been a transfer between specific and general reserves. In addition, part of the general reserves had been used to reduce the deficit and it was felt that, whilst it was important to recognise the positive work which had been undertaken, there should perhaps have been more transparency on this particular aspect in the report for Members;
• in terms of the Commentary on the Year End position, and specifically Other Budget Headings, it was highlighted that whilst the budget had been £2.8m, actual spend had been £5.5m and it was considered that care would need to be taken to ensure that this was not repeated in future, specifically in relation to this budget being monitored more closely;
• in relation to projects with the largest capital spend in 2018/19, and specifically investment in school buildings, it was important to recognise that the figure quoted of £24.9m was also the figure for the next 5 year period which represented a reduction in real terms. As such, it would be essential that work was undertaken to produce capital within the Council to match with the Scottish Futures Trust funding in order to enhance the funding available wherever possible;
• in regard to Local and National Statutory Performance Indicators 2017/18, reference was made to Care & Learning (Education) whereby children from deprived backgrounds receiving 5+ awards at SCQF Level 6 had decreased from 11% to 9%. In this regard, there was a need for a focus on this area in future in order to ensure improvement as this statistic compared negatively with the situation elsewhere in Scotland;
• also in relation to Statutory Performance Indicators, reference was made to Development & Infrastructure (Planning) and specifically the cost per planning application which had decreased from £3,684 to £2,672. In this regard, there was disappointment with this situation as it had previously been suggested that there should be increased investment in the Planning Service to enable more planning applications to be dealt with thereby increasing income for the Council and it was hoped that this suggestion could now be taken forward;
• it was hoped that the overspend in the Care & Learning budget from previous years would not be repeated and that there would not be a shortfall in any other budgets in the coming year;
• the issue of car parking charges had to be addressed as soon as possible; and
• although it was acknowledged that it was a complex issue, there was now an urgent need to reassess the way in which the Council paid foster carers in order to be able to keep children in the Highlands as opposed to having to send them outside the area.                  

Decision

The Council AGREED the unaudited Annual Accounts for the Highland Council, Highland Charities Trust, Highland Charitable Trust and the Highland Council Pension Fund for the year ended 31 March 2019.

It was also NOTED that these would be presented to the appointed Auditor by the prescribed date of 30 June 2019.

19. Update on the Council’s long term arrangements for managing its Residual waste
Pròiseact Sgudail Iarmadaich

There had been circulated Report No. HC/30/19 dated 20 June 2019 by the Head of Environmental and Amenity Services. 

During discussion, Members raised the following issues:-

• the update and recommendations on the long term arrangements for managing residual waste had been brought to the full Council to provide reassurance for all Members on the action being taken, including the examination of all future options;  
• there was dismay at what had not been included in the report, such as the fact that the ban on putting biodegradable waste to landfill had been highlighted in the Waste (Scotland) Regulations in 2012 and the Council was only now being asked to approve Invitation to Tender documents;    
• it was a matter of concern that no decisions had been taken over the previous seven year period and it was now too late to have a facility in place by 2021;
• sixteen Local Authorities had already taken action in this respect and it was regrettable that the costs for the Council would now be significantly higher than if decisions had been made earlier;
• further clarification was required in relation to the various categories of mixed municipal waste;
• there had been too many delays by the Council in relation to proposals as to how to deal with waste which currently went to landfill and as such the Implications section of the report was very concerning;
• it was disappointing that Members now had effectively no choice but to agree the recommendations in view of the limited timescale;
• it had been stated in the report that ‘the contractor, as the designer and operator of the facility, was best placed to manage this risk’ but it had been understood that designs had already gone through the planning process and been agreed and as such clarification was required in this regard;
• it had also been stated that ‘the selection of the former landfill site at Longman does present construction challenges’ and it was questioned as to why this issue had not been raised previously;
• it had been stated in the report that ‘the available capital allocation and the anticipated costs of the project have not been included in this report so as not to affect our ability to reliably test the market’ but in this respect it was suggested that this financial information had already been produced in public as part of the Capital Plan;
• there was a need to be clear and transparent with the residents of Inverness as to the future location of the facility;
• whilst confirming that there had always been openness and transparency on this issue, it was highlighted that if this project had been brought forward sooner, it would have meant that available funding would not have been able to have met the costs of other initiatives, such as school projects;
• in relation to the production of financial information, it was suggested that it would have been preferable if this had accompanied the report, perhaps as a confidential appendix; and
• there was a wider debate on waste strategy continuing across Scotland at the present time, including the Scottish Government, and all Members of the Council were encouraged to attend meetings on this subject as much as possible in the months ahead.                     

Decision

Members NOTED the contents of the report and AGREED that:-

(a) the Council would continue to develop invitation to tender documentation for a waste management facility and publish the opportunity in the market during late Summer 2019; and

(b) Officers would continue to work with the Scottish Government to develop transition arrangements towards the ban on landfilling its waste.   

20. Suspension of European Social Fund Payments

Declarations of Interest – Mr A Jarvie and Mr P Saggers (Board Members of Inverness, Nairn & Badenoch & Strathspey Citizens Advice Bureau) and Mr A Christie (General Manager of INBS Citizens Advice Bureau) declared non-financial interests in this item but, having applied the test outlined in Paragraphs 5.2 and 5.3 of the Councillors’ Code of Conduct, concluded that their interests did not preclude them from taking part in the discussion.

There had been circulated Report No. HC/31/19 dated 18 June 2018 by the Director of Development & Infrastructure. 

During discussion, Members raised the following issues:-

• this was extremely disappointing as the European Social Fund was one of the largest funders for revenue and allocated tens of thousands to projects across the area;
• it was extremely concerning that £22m of funding was being withheld with no timescale as to when it would be released and as such there was an urgent need for the Scottish Government to resolve this matter to ensure that money was provided for vital projects;
• as well as delaying grants, this situation was now also holding up the payment for new bids which were time limited (including bids submitted by the Council in relation to poverty alleviation);
• with reference to the correspondence which had been received from the Scottish Government, it would have been more helpful if a potential solution could have been identified;
• Citizens Advice Bureaux across the Council area were also being severely affected and in one instance a redundancy notice had had to be issued;
• It had to be recognised that this issue was affecting not just the Scottish Government but also other Governments across Europe, with the main problems associated with the accounting system;
• this was actually ‘an interruption’ as opposed to ‘a suspension’ and the Scottish Government was currently engaged in trying to resolve the issue;
• in noting that any decision was unlikely to come forward before the end of the year, it was suggested that the Highlands & Islands Territorial Committee should also be consulted/included in future discussions; and
• it was imperative that all Members of the Council worked together on this issue and presented a clear united approach in order to identify a solution and provide as much reassurance as possible for projects across the Highlands in the interim.                

Decision

Members NOTED the suspension of European Social Fund payments and AGREED to endorse actions already underway seeking urgent information from the Scottish Government to enable the Council to determine whether Council supported activity was directly affected and thus whether there was a need to take mitigating action or not.

21. Review of the Highland Scheme of Establishment for Community Councils 2018-19 – Phase 1 feedback
Ath-sgrùdadh Comhairle Coimhearsnachd – Molaidhean Co-chomhairle Dàrna Ìre

There had been circulated Report No. HC/32/19 dated 15 June 2019 by the Acting Head of Policy.

During discussion, Members raised the following issues:-

• it would be important to try and encourage Community Councils wherever possible to include this as an item on future agendas for their meetings in order to encourage as many representations/responses as possible;  
• in relation to the financial formula in particular, it had to be noted that there had only been two responses in this respect to date; 
• reference to Kilmorack Community Council should be removed from the boundary changes section of any future reports;
• in order to provide an appropriate level of detail to encourage responses, it would be helpful if the Scheme of Establishment Document for Review could be circulated to all Community Councils;
• it had been suggested that the National Trust should be updated on proposed changes to boundaries with particular reference to the area surrounding Culloden Moor; and
• in order to encourage future membership, there was a need for increased promotion of Community Councils, including through the Council Website, Local Press and Social Media.      

Decision

The Council NOTED the feedback received during the Phase 1 consultation as part of the review of the Community Council Scheme

The Council also AGREED the following to proceed to Phase 2 consultation:-

• revised Phase 1 boundary proposals set out at Paragraph 5.3;
• new boundary proposals received as part of Phase 1 at Paragraph 5.5;
• recommendations for amending the existing Scheme proposals set out at Paragraphs 5.9 - 5.12; and
• new proposals to amend the Scheme set out at Paragraph 5.13.

22. Climate Change Update
Cunntas às Ùr mu Atharrachadh Gnàth-shìde

There had been circulated Report No. HC/33/19 dated 12 June 2019 by the Director of Development & Infrastructure.

In this regard, it was confirmed that a Climate Change Seminar had recently been held during which an overview had been provided of the work undertaken to date which could be circulated to all Members if they so wished.

Also, it was intended to set up a cross-Party Climate Change Panel over the Summer and further consultation with Group Leaders would be undertaken in this respect prior to more formal consideration as part of the Governance Review and thereafter the full Council.  

Decision

Members NOTED the contents of the report and that an update report would be brought back to the Council in September 2019 once the Climate Change Members Panel had met and agreed an action plan.  

23. Deeds Executed
Sgrìobhainnean Lagha a Bhuilicheadh

It was NOTED that a list of deeds and other documents executed on behalf of the Council since the meeting held on 9 May 2019 was available in the Members’ Library and on the Council’s Website.

24. Recess Powers
Cumhachdan Fosaidh

It was AGREED that, during the recess period, powers should be granted to the Chief Executive, Director of Development & Infrastructure, the Interim Chief Officer (Resources for the Care and Learning Service) and the Interim Chief Officer (Resources for Community Services) in consultation with the Convener, Leader of the Council, Depute Leader of the Council, relevant Committee Chair and the Leader of the Opposition, to deal with issues arising during that time and that a report should be prepared for the first meeting of the Council or relevant Committee following the period where these powers had been exercised.

The meeting ended at 5.30pm.