Annual Self-Assessment 2021-22
Executive summary: SA2 - Resource and planning management
To provide a visible and transparent way of measuring where we are on our improvement journey through time each sub-theme is scored using the system set out below, and provides both a current and forward looking perspective.
- Score 1: Current performance - Excellent; Improvement phase - Effective
- Score 2: Current performance - Good; Improvement phase - Embedding
- Score 3: Current performance - Fair; Improvement phase - Evolving
- Score 4: Current performance - Poor; Improvement phase - Emerging
SA2.1 Annual budget setting and monitoring
SA2.2: Medium Term Financial Planning
SA2.3: Strategic Asset Management
SA2.1 Annual budget setting and monitoring
- Current performance: 2
- Improvement phase: 2
Assessment of current performance (how well are we doing?)
The annual budget is set each year at Council in preceding late February/early March. In reality, Council sign off is the culmination of a near-year round process of estimating income and cost pressures for the next year, identifying efficiencies and growth bids within the context of the Council’s requirement to develop a balanced budget.
Council has always delivered a balanced budget and has avoided the use of reserves to fund on-going activity. The 2021-22 year was no exception and the revenue outturn financial position as at 11 July 2022 was that the Council’s net expenditure for 2021-22 was £242.3m, having taken into account appropriations to and from reserves, and was £1.5m less than the Quarter 3 (Period 9) projected outturn for 2021-22 and £2.4m less than the Quarter 3 (Period 9) rolling budget for 2021-22. (It is possible that these figure will be revised slightly to take into account PFI accounting entries).
Cabinet agree a timetable for planning, preparation and approval of the budget each year. The timetable for 2021-22 was unusual in that the timetable was not agreed by Cabinet until November 2020. This is a direct consequence of the response to COVID. Originally forecast at £8.8m, the funding gap for 2021-22 was estimated at £18.4m at 2 November 2020 before falling back to £11.9m (£12.5m including additional growth above identified pressures) when the budget was agreed at Council on 4 March 2021. The reduction from £18.4m was due to the AEF from Welsh Government being better than anticipated. This report contains key budget assumptions and these link through to the Medium Term Financial Plan. The link with service planning is met through assumption that services will retain the same flat-line budget, however, services have an opportunity to make bids for additional funding funded from any increases in aggregate external finance or an increase or council tax.
The November 2020 Cabinet paper outlines the series of member seminars that were undertaken to shape the budget. All Overview and Scrutiny Committees met in January 2021 and scrutinised the budget and were invited to give their view on what was the most appropriate level of council tax increase.
The Council has used a wide variety of techniques to engage stakeholders including social media and a formal consultation. A report detailing the consultation and engagement activities is appended to the 4 March 2021 Council budget papers. Although over half of the 1,439 visits to the webpage led to someone taking an action – for instance watching a video, only 98 formal submissions were made to the survey.
Setting Council Tax is necessarily a political process and the increase agreed Council on 4 March 2021 of 3.75% resulted in Pembrokeshire County Council continuing to have the lowest Band D council tax of any Welsh local authority and one of the lowest across England and Wales. The budget strategy included an assumption that over time, the gap between Council Tax levels in Pembrokeshire and the rest of Wales will close. The 3.75% decision resulted in the gap being maintained at much the same level.
Budget monitoring of the 2021-22 budget was undertaken by Cabinet, the Corporate Overview & Scrutiny Committee and the Governance & Audit Committee. In order to focus attention on achieving a balanced budget, expenditure is projected to the year end. Budget monitoring reports, if necessary, prompt decisions on virement of budgets or may precipitate decisions, such as a moratorium on expenditure if there is a risk of overspending. Net expenditure at year end has tended to be less than the amount projected. This is because of late grant allocations by Welsh Government (see improvement actions)
The budget outturn monitoring report for 2021-22 was considered by Cabinet on 11 July 2022 and was considered by the Governance and Audit Committee on 12 July 2022. The final outturn position has been noted above and other noteworthy elements of this report are:
- Large value of grants arriving late in the year. The Actual Outturn as at July 2022 for 2021-22 was £27.1m contribution to reserves. This figure may be revised once the Statement of Account work is completed and any material change will be reported to Cabinet.
- The cost reduction/efficiency target for 2021-22 was £7.506m, with £6.088m, 81.1% being achieved
The main underspends were for cultural services, Education (other), capital financing costs and the council tax reduction scheme. The main overspends were in Central, Corporate & Democratic Services, and adult social care. Pages 5 to 20 of the County Council Budget Outturn Monitoring Report 2021-22, Cabinet 11 July 2022 has detailed information on overspends and underspends.
Evidence (how do we know?)
As referenced in the body of the report, the 2021-22 budget was set at Council on 4 March 20121. The outturn monitoring report for 2021-22 was considered by Cabinet on 11 July
Agenda for Council on Thursday, 4th March, 2021, 10.00a.m. - Pembrokeshire County Council
Agenda for Cabinet on Monday, 11th July, 2022, 10.00a.m. - Pembrokeshire County Council
Quarterly budget monitoring through Cabinet and Corporate Overview and Scrutiny Committee
Oversight by Governance and Audit Committee, for instance, Period 6 Budget Monitoring 2021-22
Some of the evidence to support this conclusion comes from internal documents which have not been published. This includes:
- Finance Medium Term financial plan
- Corporate External Review
Improvement actions (what can we do better and how?)
- High rates of inflation (June’s CPI rate was 9.3%) make it difficult for services to predict how far their flat-line budget will go. It also means that all services, through service planning, are expected to plan for real-terms cuts even if there is a strong possibility that some services will receive additional funding. External reviews have suggested piloting baseline budget reviews as an alternative method of setting the budget for some services. However, this is a time-consuming and resource intensive process and may not be practical in the short term,
- It is recommended that the council introduce rolling multi-year financial planning arrangements (3-5 years), aligned to the corporate planning timescales. In order for this to be effective, it needs to link to medium term service planning as well as the medium term financial plan.
- Strengthen link to policy and budgets both with the MTFP. Within individual budget rounds, limit the use of tactical methods to save funding (such as not filling vacant posts) with the aim of increasing the percentage of planned budget savings that are delivered in year.
- More up-stream work on working up budget saving proposals may need to be completed prior to the start of the financial year. This would also allow different budget options to be presented.
- Managers taking more ownership of the monitoring of their own budgets, reducing their dependency on finance teams for routine queries. There is an opportunity to make more of the functionality with the FiMS system
- Some annual grants have been made available for many years and arrive late in the financial year - there is a balance to be struck between assuming that these grants will be available (which an risks and overspend if not received) and being too cautious and not factoring in these grants as probable income which may not maximise the probable resources available to the Council.
- Budget monitoring pulls information in from a wide range of IT systems and these systems will require investment and IT support in order to maintain an effective budget monitoring system
SA2.2: Medium Term Financial Planning
- Current performance: 2
- Improvement phase: 2
Assessment of current performance (how well are we doing?)
The Medium Term Financial Plan (MTFP) is produced as part of the budget setting process. The latest 2022-23 to 2025-26 MTFP was approved by Council on 3 March 2022 and was appended to the budget papers. The plan covers four years.
The MTFP includes contextual information on the Council’s priorities, key considerations for delivering services over the medium term such as demand pressures. It also includes information about technical aspects of the Council’s budget such as reserves as well as the size of the cumulative funding gap the Council has had to close over the past eight years, some £110.6m from 2014-5 to 2021-22. One of the reasons for the size of this gap is that Aggregate External Finance has not kept pace with the level of inflationary, demand, demographic and legislative pressures that the Council has experienced.
The MTFP includes a set of assumptions, set out in a transparent and accessible way on how funding levels and the cost of services and the demand for services will pan out over the medium term. Inevitably there are uncertainties and the MTFP presents three scenarios to enable decision makers to manage risk. The MTFP also includes different scenarios based on different rates of Council Tax. However it is worth noting that Council Tax funds for 26.2% of the Council’s net expenditure budget which means that the Council has relatively direct control over the funding it needs to provide services.
The MTFP contains a longer term outlook that raises the possibility that the share of the Council’s budget that is spent on social care and education will increase at the expense of all other services alongside an assessment of other key risks. It is clear that this risk is increasing.
The MTFP produces estimates of the funding gap for each of the four years it covers. In summary, the best, most likely and worst case scenarios over four years of the current plan were £35.5m, £39.6m £52.5m respectively.
Early drafts and assumptions that underpin the MTFP are shared with Members through budget seminars. However, as noted by the Corporate Findings from External Reviews, the focus tends to be on the forthcoming financial year in order to achieve a balanced budget rather than what the four year picture is
Current projections for inflation are higher than previously anticipated and this coupled with the possibility of economic recession has introduced a higher level of uncertainty to medium term financial planning than at any time since the financial crisis of 2008.
Evidence (how do we know?)
The Medium Term Financial Plan was agreed as part of the 3 March 2022 Council papers
Agenda for Council on Thursday, 3rd March, 2022, 10.00a.m. - Pembrokeshire County Council
Some of the evidence to support this conclusion comes from internal documents which have not been published. This includes:
- Review of Finance external review
- Corporate External Review
Improvement actions (what can we do better and how?)
- All Medium Term Financial Plans rely on making assumptions on future government funding levels, council tax levels, workforce and non-workforce inflation, demand, demographic and legislative pressures. As 2022-23 has progressed, the assumptions we made, based on the best information we had during the MTFP’s development have been overtaken by events and now look too optimistic. It is probable that the level of uncertainty during 2022-23 is much higher than any time in recent decades, but the nature of medium term financial planning is that there are always uncertainties which will be confirmed at a later date and dealt with. Trying to produce ‘better predictions’ is less likely to be effective than maintaining a risk based approach which enables decision makers to build the latest intelligence into rolling plans.
- Our key improvement action is the integration of medium term financial planning with corporate planning setting indicative multi-year budgets that align to the achievement of the council’s priorities. The Corporate Findings report recommended that the MTFP binds corporate priorities together through a suite of medium term plans covering service planning and workforce planning.
- We need to move to a position where we look to the medium term, or longer as opposed to concentrating on the immediate priorities of the forthcoming financial year and set indicative multi-year budgets that align to the achievement of the council’s priorities.
- MTFP assumptions need to be built into service plans as, in practice, current financial planning arrangements are based on an annual cycle. Moving to a rolling multi-year cycle would encourage members and officers to consider the sustainability of the council’s plans over the medium and longer term in line with the sustainability duty. It will also better support more innovative ways of making savings to be explored, such as capital funded projects to make revenue savings over the medium term.
SA2.3: Strategic Asset Management
- Current performance: 3
- Improvement phase: 3
Assessment of current performance (how well are we doing?)
Property is the Council's most valuable asset after people, and the effective management of property is essential to the Council improving how it delivers services and supports communities. The property function is essential to the effective and efficient working of the Council by providing office and other spaces for the delivery of Council service. It supports the Council’s Well-being Objectives especially around regeneration (acquiring and disposing of assets) and supporting a new relationship with communities (through community asset transfers).
The Property section also provides services to the public and businesses, for instance Haverfordwest Airport, providing units on industrial estates for rent and managing the County Farm estate. This generates 60 enquiries a day to the Property Helpdesk, perhaps higher than might be expected given the relatively specialist nature of Property’s direct service provision.
The Property section can point to some notable successes in 2021-22, such as disposing of surplus assets like Cherry Grove and the Old Narberth School (in both cases, the culmination of protracted projects to find an appropriate use and both will now be used by community group) and have acquired 57 properties to be used for affordable housing. Progress has been made on developing a new Strategic Asset management Plan and improving information systems.
Whilst the Property Service has also made a contribution to the corporate budget (through capital receipts and rate revaluation and negotiating property agreements, it is difficult to assess whether the financial contribution of relevant assets is being maximised. Weaknesses in asset condition information make it difficult to assess performance using the sustainable development principle. The overall financial performance of the Property Service Team’s budget has shown significant improvement over the last ten years, for instance through greater rental incomes. Net expenditure for the service has improved over recent years to a £635k surplus (predicted outturn for 2020/21). This surplus has been generated with a net expenditure of some £2.782 million and an income of some £3.241 million.
However, there are a number of corporate issues that need to be addressed for Property. These include: absence of an up-to-date strategic plan setting out what the organisation as a whole wants as a whole from the property is owns; responsibility for aspects of property being fragmented across the organisation and limited performance information about how assets are performing and the likely levels of future investment needed in them.
Some of the management information that the Property section needs is either out of date (such as condition surveys) and/or requires more work in order to support greater administrative efficiencies. This is impacting on our ability to produce the accurate valuations that are required in our accounts. This issue has been highlighted by Internal Audit reports as well as by Audit Wales.
The service is also under pressure because of a lack of suitably trained staff and has found difficulty in the recruitment and retention of new staff. This reflects a wider situation within the sector and is also indicative of wider recruitment and retention issues across many council services and in the public sector as a whole.
As Property does not have a broad suite of performance indicators it is hard to judge the effectiveness of the service or how well the Council as a whole is managing its assets. Developing effective performance indicators is a priority.
There are known capacity issues in teams which work closely with property, especially building maintenance, that are impacting on the organisation’s ability to plan preventative work (in order to stop assets deteriorating) and maintain accurate valuations.
Evidence (how do we know?)
Audit Wales will publish its report on Asset Management as part of its Springing Forward Project in late October/November. The draft of this report has informed this assessment
Services Overview and Scrutiny Reviewed Property Services at its meeting on 16 November 2021. The report of its findings were considered and accepted by Cabinet at its meeting on 14 March 2022.
Agenda for Cabinet on Monday, 14th March, 2022, 10.00a.m. - Pembrokeshire County Council
Some of the evidence to support this conclusion comes from internal documents which have not been published. This includes:
- Internal Audit review of Property
- External Review of Property
- Property Services Medium Term Service Plan
Improvement actions (what can we do better and how?)
The recommendations in the External Property Review summarise the actions that need to be considered and / or taken. These action are similar to the actions in the draft Springing Forward Audit Wales report. As both independently produced reports come to similar recommendations on improvement actions, this gives us a high degree of assurance that these actions are well-placed to deliver
Some of these actions are at corporate level, for instance, within development of the second phase of a new Target Operating Model for the Council, deciding whether to re-organise the function to provide a corporate landlord function. Others are at a service level and these are listed below:
- Produce a new Strategic Asset Management Plan which clearly sets out the circumstances in which we hold property assets and develops our property portfolio so that it supports the broader improvement journey of the Council. The plan is at advanced draft stage and is addressing the financial performance of our assets – the size of the financial challenge the council faces necessitates that property is aligned to corporate priorities and that financial performance is maximised (all but done)
- Improve the quality of the information we hold on our assets and introduce a schedule of inspections so we are confident about their value and that it is used to inform decision making. Work is on-going on prioritising and scheduling these inspections
- Develop a set of performance indicators for the service, including benchmarked data, so that the Council can track how property assets are contributing to its aims and that these indicators are monitored corporately.
- Both the external review and the Audit Wales report included recommendations around reviewing governance structures around assets, a function that is currently undertaken by the Corporate Asset Management Group. The external review also recommended setting up regular meetings with the relevant Cabinet member and internal colleagues to facilitate communication around property issues and to manage risk.
- Ensure that the service is properly resourced and in particular, match support needed for the community asset transfer process with the ambitions of the Council in this area
SA2.4: Workforce planning
- Current performance: 3
- Improvement phase: 3
Assessment of current performance (how well are we doing?)
Context
Workforce planning is much broader than the work of the HR Service, though the HR service’s support and expertise in this area is key.
By way of context, in excess of 90% of people who work for the Council also live in Pembrokeshire, a high percentage that reflects the peripheral. This means that factors like Pembrokeshire’s local housing market play a more significant part in our ability to recruit than they would in some other authorities. Pre-pandemic, Pembrokeshire, like many other councils, had experienced recruitment and retention problems for a range of jobs including: teaching and school leadership roles, planning, engineering, finance and social work. During 2021-22 as the economy began to grow, these recruitment difficulties have become more widespread and more acute. Many of the organisations we work with to deliver social care are also experiencing severe recruitment issues. Information about the demographics of Pembrokeshire’s workforce and pay gaps is published annually.
Key projects
A significant amount of work undertaken by the HR Service to enable the Council to respond to the COVID-19 pandemic throughout 2021-22 as many employees were in temporary roles or were returning to substantive roles as COVID projects finished.
Supporting the authority supporting the appointment, and induction of key posts following the departure of the previous Chief Executive (see section on SA3.3). A new Target Operating Model has been designed and extensive HR support has been required in designing new job descriptions and helping to manage the recruitment of key posts in the latter part of 2021-22 and into 2022-23.
Developing an apprenticeship programme and 25 employees currently on apprenticeship programme with a further 12 to on-board. Work is being undertaken to establish a more annual programme and discussions taking place with other Authorities to share best practice.
Continued to invest in training across a wide range of areas. This ranges from leadership and management training the current though to more generic training, for instance, adapting to hybrid working. There is a separate process for Social Care workforce planning, training and development and there is a specific plan. Some of this is delivered at a regional level (see section SA4.2). Whilst externally focussed, the Council’s Futureworks team, which delivers employment and skills programmes to help people move into employment also plays a role in meeting the Council’s own skills needs.
Social care is seeing success in addressing workforce issues via and expansion of the ‘grow your own’ training approach and the last batch of six new trainees social worker posts attracted 60 applicants. A Competency framework is in place to give a structure for progression and to improve retention rates for newly qualified social workers.
The HR service has a key role in meeting our equality objectives as an employer. Practical action to address under representation in the workforce is being achieved through the kick-start programme and 113 young adults were given placements. The Gender Pay Gap has declined from 6.7% in 2019 to 4.6% in 2021 (see also the equality report).
A performance appraisal system was set during 2021-22. This reinforces the behaviour standards adopted in previous years and the use of the new system will be compulsory throughout the organisation in the 2022-23 year.
For employee relations – Departmental and corporate joint negotiation committee structures in place. A particular priority for 2021-22 was to Increase use of mediation & informal dispute resolution to diffuse work conflict. Mediation is embedded in our approach to conflict resolution – but limited to a small cohort of trained hr officers; investment in a rolling programme of ACAS certification required. Work will continue to develop the HR Intranet to further enhance the suite of ‘toolkits’.
For well-being, a key part of overall welfare as well as retention rates we have maintained Welsh Government Corporate Health Standard at Silver level and planned for a Workplace Wellbeing Programme, a package of training and support for Line Managers to support the mental health of their teams using Mind’s Wellbeing Action Plans. The related Time To Change Action Plan has been updated on the intranet and Time To Change Champions relaunched following initial training being delivered.
Evidence (how do we know?)
Audit Wales will publish its report on the Council Workforce planning as part of its Springing Forward Project in late October / November. The draft of this report has informed this assessment
Our report on Equality report on employment was determined through an Individual Cabinet Member Decision for Education and Learning. This Cabinet member also has responsibility for equalities.
Some of the evidence to support this conclusion comes from internal documents which have not been published. This includes:
- External HR review
- Human Resources Medium Term Service Plan
Improvement actions (what can we do better and how?)
- Audit Wales has undertaken a review of workforce management as part of a broader piece of work it has done on post Covid recovery. This recommended that the organisation as a whole develops Workforce plan, and this is also a message from the external review of HR. Whilst a draft plan exists, the both reviews stress the importance of tying a new workforce plan into other medium term plans. Audit Wales has recommended that the sustainable development principle is used to do this. The new strategy will put particular focus on career pathways in key professions where we have recruitment and retention issues and will complement the Social Care Workforce Strategy and the draft Education workforce strategy.
- Continue to expand the use of apprenticeships across the Council and monitor their take up by key protected characteristics. Whilst the ‘grow your own’ route to addressing skills gaps requires time to be effective (as well requiring capacity for supervision) it is much less effected by the current problems with availability of housing. Priorities for training, not already covered through apprenticeships include Leadership and management, developing core management competencies, financial management training and continued rollout of the culture change and behavioural standards programme.
- Improving Performance indicator information by developing a set of performance and outcome measures that reflect the Council’s ambitions for its workforce, and monitor these measures at a corporate level, including formal reporting and oversight and benchmarking performance on workforce management with other organisations
- The HR Service wants to work more closely with departments in a fuller business partner role (providing high level advice, guidance, and insight to Departmental Management Teams). In parallel, HR systems need further development to realise their capability so that service managers can get the information they need without HR support. This will build upon the work that has been done over the past year and shorter term priorities will be further digitisation recruitment as well as absence management. This will build upon the work already in train to fully exploit the capabilities of the iTrent system.
- During autumn 2022, the Council will embark on a staff survey which is being managed by Culture Amp. The outcome we want to achieve from this work is better workforce planning. The survey will Looking at key areas such as:
-
Image/perception of the organisation
- Wellbeing
- Communication Empowerment
- Performance management Career opportunities
- Diversity & Inclusion
- Reward
- Leadership
- Workload & Flexibility
SA2.5: Procurement
- Current performance: 2
- Improvement phase: 2
Assessment of current performance (how well are we doing?)
The Council has a small, specialist procurement team of six people with plans to expand this to support local procurement bringing the team strength to seven. In addition, the service provides services to Pembrokeshire College and the Education Improvement Consortium Partneriaeth under formal agreements.
The team played a critical role alongside other teams in supporting businesses we contract with during the COVID pandemic. The Council has a strong track record in using local suppliers but there is opportunity to improve the level of support for local businesses to compete for our work and a need to formally embed social value into our procurement processes. It has also managed procuring good and services during COVID to ensure that processes were compliant with regulations, managing risk.
An external review of the service undertaken and report was completed in Jan 2022. The review commented on the contribution that the service has made to savings over previous financial years through category management and the level skills and knowledge within the team in what is a technical area. The review noted that continued work is needed on professional development and that the context of the procurement service is changing and that it is opportune to re-look at the vision that underpins the service and what the Council, as a whole, wants from the whole organisation.
The Well-being of Future Generations Act challenges local authorities to use procurement as a way of achieving well-being objectives. The Social Partnership and Public Procurement (Wales) Bill contains provisions to establish duties on public bodies to ensure that public procurement is undertaken in a socially responsible manner, using the power of the public purse to the broad benefit of people and communities in Wales. Finally, the Council’s response to climate change is partly dependent on managing down the carbon emissions linked to spend with external providers.
Evidence (how do we know?)
Some of the evidence to support this conclusion comes from internal documents which have not been published. This includes:
- External Service Review
- Procurement MTSP
Improvement actions (what can we do better and how?)
- The procurement service works with the rest of the Council to develop a vision for what the whole organisation wants from procurement as a whole. This will inform the new procurement strategy.
- Use the opportunity of redrafting the procurement strategy to incorporate it within a broader commercial strategy. This will be a relatively complex task as the new strategy will need to:
- link to the Medium Term Financial plan
- make clear the Council’s policy on strategic issues such as the role played by SMEs, progress how procurement can help achieve zero waste and zero carbon
- include an income strategy. The income strategy needs to evaluate the opportunities for trading under the new General Power of Competence and establish the risk appetite for trading.
- The Council’s third party expenditure was £228M in the 2021-22 financial year. This means that even modest percentage increases in the amount spent locally has the potential to make a significant difference in helping to create and sustain the local economy thus playing an important role in our poverty prevention strategies. We will need to develop performance indicators to measure our progress.
- The draft Social Partnership and Public Procurement (Wales) bill will directly affect the working of the service. Welsh Government indicates the draft Bill also contains ‘provisions to establish duties on public bodies to ensure that public procurement is undertaken in a socially responsible manner, using the power of the public purse to the broad benefit of people and communities in Wales’. At the time of writing the Bill is at Stage 1, having been introduced into the Senedd on 7 June 2022