Annual Self-Assessment 2022-23

SA2- Resource Planning and Management

SA2.1 Annual Budget Setting and Monitoring

Assessment of current performance- how well are we doing?

  • The context for budget setting continues to be challenging; the wider economy was volatile in 2022-23 and saw the highest rates of inflation for 40 years, added to the complexity of managing and planning the budget.
  • The 2022-23 net revenue outturn reported to Cabinet in July 2023 was £263.1m after taking account of movement in reserves.  This is £1.6m less than the January 2023 projected outturn for 2022-23 and £2.9m less than the January 2023 rolling budget.  A moratorium on expenditure, vacancy management, slippage in the Capital programme and an increase in income received in the final quarter accounts for much of this difference.
  • The external factors and the practical steps we undertook to achieve a balanced 2022-23 budget include:
    • Budget monitoring through Cabinet (three reports in-year at October 2022, December 2022 and February 2023 meetings), Overview and Scrutiny meetings, Governance and Audit Committee meetings and through internal meetings such as Senior Leadership Team and Budget and Performance Challenge Board.
    • Monitoring covered all aspects of the budget: revenue, capital, revenue collections, usable reserves and treasury management.
    • Moratorium on non-essential spend and recruitment freeze during 2022-23 in response to projected overspends identified through budget monitoring.  The recruitment freeze did not apply to all posts and recruitment continued to critical posts.
    • Recruitment difficulties leading to many services struggling to recruit sufficiently skilled and qualified staff to those posts not covered by the recruitment freeze.
    • Capital programme slippage and increased interest rates reduced anticipated loan repayments and increased interest received on balances held.
  • Clear planning for, and communication of the annual budget setting process and production of medium term plans.  Cabinet considered the Financial Planning Timetable and Budget Strategy and Beyond for 2023-24 year at its September 2022 meeting.  A programme of elected member engagement events was held through the year, and as knowledge of the likely budget parameters became more certain proposals could be considered in ever greater detail.
  • Stakeholder engagement and consultation.  A mixture of quantitative and qualitative methods were used as part of this work, for instance a comprehensive survey of views and a Facebook live session.  The reach of both of these engagement/consultation exercises was approximately 2.5% of Pembrokeshire’s adult population.  Analysis suggest that the 581 people who responded are broadly representative for Pembrokeshire’s population (though the percentage of disabled people who responded was lower than might be expected).  Responses were considered by Council at its meeting on 2 March 2023 the detail of which is in the evidence section below.  In broad terms, the preferred options of those consulted were similar to those determined by Council. 
  • Balanced budget for 2023-24 set at March 2023 Council.  This bridged a funding gap for the year of £18.6m through: budget savings (£8.0m): additional Council Tax income (£5.2m as a result of a 7.5% Band D increase in Council Tax); contribution from second homes Council Tax Premium (£3.8m); and contributions from reserve (£1.6m).
    • Prioritisation.  Budget savings were identified through a clearly prioritised ‘racked and stacked’ list of savings identified with service changes with the least impact (especially on vulnerable customers) being implemented whereas those with a significant impact were not taken forward in 2023-24.
    • Increase in Council Tax of 7.5%, the fourth highest increase in Wales (compared to a Wales average increase of 5.5%).  The Council continues to have the lowest Band D Council Tax for County Council purposes. 

 

Evidence- how do we know?

 

Improvement actions- what can we do better and how?

  • Many of the factors that helped balance the 2022-23 budget and reverse the projected overspend identified in July and November 2022 are short term but the impact of the pressures will be felt over the term of the Medium Term Financial Plan and beyond.  The pressure to find savings over the next four years is unlikely to reduce (see Section 2.2).
  • Recruitment and retention problems (a re-current theme throughout this self-assessment) continue to impact heavily on finance staff and their work.  On a positive note, many new staff were recruited in 2022-23 but staff shortages are impacting on progress on developing the new Financial Management System and realising its potential to simplify systems and improve financial reporting.
  • A programme of Structured Budget review has commenced, but again progress has been impacted by staffing vacancies.
  • Business partnering between finance staff and services’ staff will assist budget monitoring throughout the year, the preparation of budgets for future years and aid identification and development of budget savings by developing strong relationships and understanding between finance and the services they support.
 

Current performance - 2

Improvement phase - 2

2021-22 performance - 2

2021-22 improvement phase - 2

 

SA2.2 Medium Term Financial Planning

Assessment of current performance- how well are we doing?

  • The Medium Term Financial Plan (MTFP) is produced as part of the budget setting process and the latest 2023-24 to 2026-27 MTFP was approved by Council on 2 March 2023 appended to the budget papers.  The plan covers four years and is designed to be a living document and subject to change.  The MTFP 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 nine years, some £123.9m from 2014-15 to 2022-23.
  • The 2023-24 to 2026-27 MTFP tracks how the relative size of budgets is changing in the light of demand.  In 2023-24, 70.8% is accounted for by Education (including Schools) and Social Care, an increase from 69.4% for 2022-23 with a resulting squeeze on other services’ budgets.  The plan extrapolates trends and based on these it is likely that the Social Care budget is likely to overtake Education as the largest net expenditure budget in the near future.  By 2040-41, based on income and expenditure trends, Education (including Schools) and Social Care will take up the entire Council budget.  Whilst this is very unlikely to happen, it illustrates how unfunded increases in demand are squeezing Council services.
  • Key risks identified in the 2023-24 to 2026-27 MTFP are grouped under four headings of funding, demand, uncertainty and financial resilience.  These have been updated from the previous version and reflect the risks that have been identified corporately such as the cost of living crisis and the war in Ukraine.
  • Risk planning is on a live basis.  For instance a recent presentation to Extended Leadership Team highlighted variations in changes between the assumptions underpinning the 2023-24 – 2026-27 MTFP and the most recent economic data giving managers more timely information to plan for future spending.  For instance:
    • Inflation in May was 8.7%, higher than the OBR’s assumption of 6.9%.  This is likely to feed into higher future costs. 
    • Bank Base rates in June were 5%, higher than the 4% assumption for the 2023-24 budget.  Each 1% increase in loan interest rate equates to a £0.7m additional Capital Financing Cost.
    • Demand for Children’s and Adult Social Care, and Homelessness continues to increase, with cases becoming more complex (and expensive).
  • Some elements of the MTFP will depend on decisions of Council at a future date and this adds an element of uncertainty.  For instance, in the context of Pembrokeshire having the lowest Band D Council Tax (County Council element) in Wales, there is an assumption in the 2024-25 to 2026-27 MTFP of successive 7.5% increase in Council Tax increases throughout its four year term.  The actual level of Council Tax in any one year remains a decision for Council itself.  The setting of second homes Council Tax premiums is also determined by Council. 
  • Budget planning for 2024-25 has commenced with review and ‘scoring’ of budget savings options identified but not taken in 2023-24, together with new savings opportunities identified as part of service improvement plans, and suggestions received from staff and members through an online suggestion box.  This will be developed into a clearly prioritised ‘racked and stacked’ list of savings for 2024-25.
  • A programme of Member engagement events will be held through the year, enabling members to fully understand the likely budget parameters and be able to consider proposals for balancing the 2024-25 budget and 2024-25 to 2027-28 MTFP prior to final budget approval by Council.

 

Evidence- how do we know?

 

Improvement actions- what can we do better and how?

  • Continued integration of medium term financial planning with corporate planning, setting indicative multi-year budgets that align to the achievement of the Council’s priorities. 
  • Establishing a more effective link between service plans and the MTFP.  As medium term service plans become more mature they will need to reflect the financial implications of the MTFP’s priorities.

 

Current performance - 2

Improvement phase - 2

2021-22 performance - 2

2021-22 improvement phase - 2

 

SA2.3 Strategic asset management

Assessment of current performance- how well are we doing?

  • Property is the Council's most valuable asset after people, and is essential to the effective provision of all Council services.  The Council’s overall asset portfolio has a value of circa £800 million.
  • The property portfolio is wide ranging and includes, schools, youth centres, family centres/hostels, day and community centres, administration buildings, Housing Revenue Account (HRA) dwellings, industrial units/business parks, offices such as the Bridge Innovation Centre, retail including Riverside Shopping Centre, market halls, garages/garage plots, Gypsy and Traveller sites, car parks, leisure centres, libraries, museums, civic amenity sites, crematorium and cemeteries, depots, County Farms and grazing land, two harbours, public toilets, allotments, playing fields/playgrounds and open space, community assets and an airport.

The Property service, which is responsible for the overall strategic management of the Council’s corporate assets, has successfully implemented improvements such as: 

  • Introduction of the property helpdesk to provide a quick and one stop place for enquiries and focuses delegation of work linked to a case management system.
  • Case management system and associated forms to assist with the digital channel shift.
  • Commencing the roll-out of an Electronic Document Management System.
  • Documented and improved processes and procedures (ongoing).
  • Delivering a restructure in light of vacancy management and the need to re-purpose the team so it can respond more effectively to the needs of the Council and the public as well as stakeholders.
  • Rent reviews and lease renewals for commercial assets (non-housing) – a package has now been outsourced to deliver the extra income anticipated from the reviews which in some cases has secured an increase in rent.
  • Maintaining 90% occupancy target for industrial units/business parks. This has been delivered in the context of a significant turnover in occupation of units and an increased interest in units which has generated additional work for the team.
  • Rent deferments offered to tenants of commercial housing to assist with financial pressures as a consequence of Covid. This has resulted in arrears, which under the Coronavirus Act 2020 are not able to be enforced, as the forfeiture for non-payment of rent and the right to re-entry were not enforced in legislation. The team is currently working with the legal team and sundry debtors to pursue debt in accordance with the Council’s debt policy.
  • Successful appeal of Non-Domestic rating assessments and securing in excess of £1m to date in savings for the authority on the 2017 list.
  • The production of a new Strategic Asset Management Plan as mentioned in the last year’s improvement actions has been successfully delivered, approved by Cabinet on the 13 February 2023.
  • A new Corporate Asset Management Board has been established, chaired by the Chief Executive and comprising of key officers from across the Council.  The purpose of the group is defined in its Terms of Reference and it will have oversight of all Council assets.
  • Disposals and purchases are reported to Cabinet periodically.
  • Community Asset Transfers are reported to Cabinet quarterly and details available on our web site.
  • Generally rents are increasing and income up usually by a few percentage points annually.
  • Strategic work on external recommendations have not been implemented due to structural changes this will follow when the team is re-established
  • Consideration of developing a bespoke suite of performance indicators for the property service is underway though further work is to be done in this regard.
  • External consultants from Osprey have undertaken an airport review commissioned by the Welsh Government Aviation Team to look at the operating status at Haverfordwest airport. A number of recommendations have been made and are currently being explored. This work has been partially implemented but requires further work to be completed.
  • Audit Wales undertook a study on asset management in 2022-23.  Overall, Audit Wales found that the Council recognises that there are significant weaknesses in its strategic arrangements for managing its assets and is looking at options to make improvements.  In so doing it needs to consider how it can use the sustainable development principle to shape its work in this area.  Governance and Audit Committee considered the Council’s response form to the recommendations in the report at its 29 November 2022 meeting.  Action on recommendations that are still outstanding will be rolled forward into the 2023-24 year.

 

Evidence- how do we know?

 

Improvement actions- what can we do better and how?

  • Digital Improvements – Channel Shift/Self-Service, FAQ’s, virtual viewings, dedicated website and rebranding etc.
  • Delivery of the Asset Management Strategy.
  • Deliver recommendations in response to Audit Wales’ Springing Forward report.
  • Review and update the Community Asset Policy and the use of volunteers for parks etc.
  • Develop a strategy for the statutory allotments and improve their management.
  • Improve the data for carbon reporting and establishing the biodiversity value of Council assets.
  • Re-establish the PSB property group for Pembrokeshire.
  • Review and implement recommendations made by Osprey on Haverfordwest airport.
  • Explore alternative operating models for Haverfordwest airport.
  • Introduce charging interest on late rent payments. 

 

Current performance - 3

Improvement phase - 3

2021-22 performance - 3

2021-22 improvement phase - 3

 

SA2.4 Workforce Planning

Assessment of current performance- how well are we doing?

  • Throughout 2022-23 the Council faced significant recruitment and retention issues (in common with many other organisations in the public sector) which pre-dated April 2022.  Steps to address these in 2022-23 included:
    • Greater use of trainee posts: for instance, two additional trainees from the LGA National Graduate Development Programme, two trainee planning posts, trainee property surveyors.
    • Accelerating our apprenticeship programme.  This includes work on promoting apprenticeships more generally through Futureworks as well as an Adult Social Care Apprenticeship Programme.
    • Regular Job Fairs and Open Recruitment Events took place around the county, providing face-to-face opportunities for us to promote the Council as an employer of choice. Operation Nightingale 2023 (see section 5.2) has been supported, with an increase of applications received as a result along with recruiting to the Community Well-being and Independence Team.  Also a significant recruitment campaign to fill finance team jobs was undertaken as part of an Authority Wide Finance Improvement Programme.
    • Sharing posts with other local authorities (for instance sharing a solicitor with a neighbouring authority).
    • Advertising the Council’s flexible terms and conditions that apply to many of its jobs such as flexi-time and hybrid working especially as a way of appealing to people with caring responsibilities or to widen potential pool of applicants.
    • Increasing resources within the recruitment team in response to its increased workload (in June 2022 over 100 live vacancies were advertised on our website) and analysis of effectiveness of our advertising.
  • Despite these initiatives, the Council continues to experience recruitment and retention problems and skills shortages in key areas such as property, planning, legal, financial services, social care, public protection and building maintenance, as well as in teaching posts. 
  • Whilst there is evidence that pay rates for some jobs in Pembrokeshire are lower than neighbouring authorities, other factors, such as Pembrokeshire being relatively peripheral with potentially longer commute times, competition for talent from other public bodies also contribute to recruitment and retention difficulties.  The impact of recruitment difficulties can include higher costs, for instance reliance on agency staff and limited capacity to develop income generation ideas as well as hindering service delivery.
  • The Council continued to develop its Target Operating Model.  The first phase of this, essentially the shape of the organisational structure and its senior leadership team was agreed by Council at its in March 2022 meeting with appointments throughout the first two quarters of the year.  The second phase was considered by Senior Staff Committee at its 28 November 2022 meeting with appointments to key posts in the remainder of the year. 
  • Audit Wales published report into the Council’s workforce management in August 2022 as part of a piece of work across all Councils.  The key findings of the report were:
    • The Council recognises that it does not have a clear vision or plan for its workforce and it wants to address this but limited capacity at a strategic level in its Human Resource Service is hindering progress.
    • The Council is strengthening its arrangements for engaging with its staff but needs to ensure it is actively applying the sustainable development principle in its approach to managing its workforce.
    • The Council recognises that its corporate arrangements for monitoring performance in relation to its workforce need improving.
  • In response, the Council produced an organisational response which was considered by Governance and Audit Committee at its 29 November 2022 meeting.  In summary a draft workforce development plan has been produced which will reference the range of workforce development plans (e.g. Social Care Workforce Plan, Teachers Workforce strategy) and a draft of the plan is on the forward work programme of Corporate O&S for September 2023.
  • Following preliminary work, we undertook a non-school staff engagement survey in October/early November 2022.  Over half of staff responded some 1,502 people.  Results show a 51% favourable engagement score, 30% neutral and 19% negative and 7,406 comments received.  Results have been presented to Senior Leadership Team and with Heads of Service. Meetings conducted with all Directors and HOS. Working groups have established to review data and actions from these have been input into the Culture Amp platform.  Results were also shared with Governance and Audit Committee at its 18 April 2023 meeting.
  • Throughout the year, we continued to develop the functionality of the IT system that supports HR.  Some of these actions and complete (such as enabling employees to input their qualifications and skills which helps support the talent management and when required, redeployment) though a number of tasks remain on-going.  Completion of these will assist the work planning process.

 

Evidence- how do we know?

 

Improvement actions- what can we do better and how?

  • Workforce planning – a draft of how the Council will progress this is due to be considered by Corporate O&S Committee. 
  • Talent Management – we will expand our talent management pool building on the leadership and management programme.
  • Succession Planning - establish a robust succession planning approach and identify critical roles and pathways.
  • Leadership Development - this work will initially focus on the Senior Leadership Team and Extended Leadership Team and establish vision and values to develop high performing teams.  The outcome of this work will contribute the Corporate Governance Improvement Plan.
  • Inspiring Women Leadership Programme – we will develop a pathway to female leadership.
  • Performance Development Reviews - the aim of this to embed a performance management culture and is part of the development of a broader performance management framework.
  • HR digitalisation programme - explore digitalisation of people processes, automation and artificial intelligence capacities.  This will free up HR staff time to spend on more strategic issues.
  • Staff recognition programme - this will encourage people to share success and to demonstrate that people are valued within the organisation.
  • Employer of choice - this will be based around recruitment, development of employees and retention rates.  It will also improve our employer band.
 

Current performance - 3

Improvement phase - 2

2021-22 performance - 3

2021-22 improvement phase - 3

 

SA2.5 Procurement

Assessment of current performance- how well are we doing?

  • In Financial Year 2022-23 we spent £119.3m with businesses who had a base in Pembrokeshire.  This was 52.17% of our total Procurement Spend. This represented an improvement on the previous year’s figure of 48.77%.
  • The Council has a strong record of accomplishment using local suppliers, however, 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 the Council’s procurement processes. With the Council’s levels of third party expenditure, each additional 1% spent locally can put approximately £2m of additional funding into the local economy, helping to create and sustain jobs, thus playing an important role in our poverty protection strategies.
  • Cabinet approved a new five year Procurement Strategy (2023-2027) in February 2023, capturing and addressing the legislative requirements on the Council. The Well-being of Future Generations (Wales) Act 2015 is embedded into the Strategy, and delivery against the aims of the Act will be measured through progress against a series of Responsible Procurement Objectives contained within it. The Procurement Strategy is now live and published on our Intranet. The Strategy contains Responsible Procurement Objectives in which are contained a number of improvement targets and actions which are being worked on, also embedded in the Strategy are being implemented in accordance with the stated timescales.
  • The revision of the Contract Management process has been carried out, and the revised process has been agreed with the Director of Resources.
  • The service provides procurement support for Pembrokeshire College and for Partneriaeth under formal SLA’s to generate income. The Procurement support SLA’s with both the College and Partneriaeth continue to work well and bring valuable income to the Procurement Service.
  • The Service has been subject to an external service review resulting in a series of recommendations to assist it moving forward, and an action plan against these recommendations has been created.  The majority of the action plan recommendations have been completed or are nearing completion as the recommendations are implemented into the service.
  • The review of Contract Procedure Rules (CPRs) is pending prior to the commencement of the relevant provisions in the new Social Partnerships and Public Procurement Act. These changes will need to be factored into any review of CPRs, so it is impractical for the service to review them now before they change. The review will be undertaken when the legislation is published and introduced. 

 

Evidence- how do we know?

 

Improvement actions- what can we do better and how?

  • The Procurement service will support Legal Services in the review of Contract Procedure Rules (CPRs).
  • Revise and strengthen the Council’s approach to Contract Management.
  • Continue to make progress against the Responsible Procurement Objectives details in the Council’s new Procurement Strategy.
  • Increase communication and engagement with Pembrokeshire based suppliers to ensure they are aware of all procurement    opportunities.
  • Hold a seminar for elected members on the new Procurement Strategy (scheduled September 2023).
  • Implement any relevant provisions of the new Social Partnership and Public Procurement Act within the Council.
 

Current performance - 2

Improvement phase - 2

2021-22 performance - 2

2021-22 improvement phase - 2

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ID: 10974, revised 25/10/2023
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