Corporate Board minutes: 7 September 2021

Attendees and apologies

Present

• Leslie Evans (Chair), Permanent Secretary
• Andy Bruce Director, Communications & Ministerial Support
• Liz Ditchburn, DG Economy
• Lesley Fraser, DG Corporate
• Joe Griffin, DG Education & Justice
• Annie Gunner Logan, Non-Executive Director
• Ronnie Hinds, Non-Executive Director
• Shirley Laing, Director for Housing & Social Justice (as substitute for DG Communities)
• Caroline Lamb, DG Health & Social Care
• Madhu Malhotra, Director for Equality, Inclusion & Human Rights
• Jackie McAllister, Chief Financial Officer
• Hugh McKay, Non-Executive Director
• Linda McKay, Non-Executive Director
• Rachael McLean, Head, Strategy & Business Division (as substitute for Solicitor to the Scottish Government)
• Nicola Richards, Director for People
• Alyson Stafford, DG Scottish Exchequer
• Ken Thomson, DG Constitution & External Affairs

In attendance

• Jennie Barugh, Director, Performance & Strategic Outcomes
• Kersti Berge, Director, Energy & Climate Change
• Luke Cavanagh, Unit Head, Corporate Analytical Services
• Sarah Hart, Head, Strategic Co-ordination & Public Body Engagement
• Gerard Howe, Deputy Director, COP 26
• Andrew Watson, Director, Budget & Public Spending
• Robyn Whitelaw Grant, Head of Governance & Risk Team

Secretarait

• Claire Tynte-Irvine, Board Secretary

• Jo Ward, ET Secretariat

• Gillian Wilson, ET Secretariat

Apologies

• Paul Johnston, DG Communities

• Ruaraidh Macniven, Solicitor to the Scottish Government

Items and actions

Welcome, introductions, apologies, declarations of interest, minutes

The chair welcomed everyone to the third Corporate Board (‘the Board’) meeting of 2021.

Annie Gunner Logan declared an interest in her capacity as Chief Executive Officer of a social care interest group, in the proposals relating to financial savings in Health and Social Care.  

The board agreed the minutes of the meeting on 1 June 2021, and noted action 122 marked as complete in the action tracker requires reviewing to ensure that the action has been completed.

Permanent secretary overview

The chair provided an overview of events since the last board meeting in June 2021, noting:    

• a busy summer including the delivery of all but one of the First 100 Days commitments; and the new joint policy platform with the Scottish Green Party
• The Programme for Government is published today, taking into account the financial context this year, and setting the delivery and performance focus for the organisation
• the continued impact of the Delta variant of COVID-19, particularly in reference to well-being and resilience, including the gradual return to the workplace  
• that the recruitment processes for the Permanent Secretary, DG Economy and DG Net Zero roles are underway

The chair took the opportunity to acknowledge and thank Liz Ditchburn for her intellectual challenge, strategic insight and valuable contribution to the Corporate Board in her role as DG Economy and wish her all the best for the future.

Financial stewardship

The board received an overview of the financial performance for the previous year, the financial position and an update on the Resource Spending Review noting:

• the net fiscal reported resource funding pressure for 2021 to 2022 represents the largest shortfall at this point in the financial year
• the scale of the challenge remains unprecedented and continues to increase in future years
• cabinet agreed on 7 September to further spend reduction targets to be delivered over the remaining budget flight path with action identified to manage the remaining £218 million pressure asap with Cabinet advised accordingly
• the forecast position for 2021 to 2022 remains stable based on insights from the use of new analytical tools
• progress in delivering the spend reduction targets will be closely monitored over the remainder of the year and reported within the Corporate Board Report
• additional 2021 to 2022 consequentials relating to NHS funding have been announced but precise implications for Scotland are yet to be assessed
• preparatory work on the Resource Spending Review continues across SG and will also be fed into the 2022 to 2023 Budget process with indicative allocations due shortly
• UK Spending Review will be announced on 27 October, and therefore likely the Scottish Government (SG) budget will be expected to be published three weeks later
• the forecast position for 2021 to 2022 remains stable based on insights from the use of new analytical tools

In discussion the Board noted and agreed:

• the need to ensure adequate focus on addressing the longer term structural issues which result in in-year budget challenges, including on forecasting
• that many 2022 to 2023 saving options relate to phasing existing commitments, such as NHS backlogs; free school meals; and concessionary travel, with associate delivery risks and challenges
• Accountable Officers and Cabinet Secretaries are continuing to take a lead role in agreeing savings to achieve a balanced budget and addressing risks to delivery
• that there are improvements underway in regards to the current culture, systems and practice elements of the financial management system
• the value of NXD engagement with Accountable Officers as a significant element of the testing and challenge of financial processes
• the need for further evidence of how the agreed spend reduction targets will be delivered to assure NXDs ahead of the next board meeting, particularly if there are developments that move away from the flightpath

Balanced scorecard, performance framework and corporate risk register

The board noted the papers supplied, which included the assessment of organisational health and performance against National Performance Framework outcomes in the Balanced Scorecard, an update on the development of the Government Performance Framework and an analysis of the current Corporate Risk Register.

In discussion, the board noted:

• the welcome pace of return to pre-pandemic norms for some key indicators of staff well-being
• the continued pace of organisational growth and gradually increasing seniority and specialisation among Scottish Government staff, in the context of the need for financial sustainability and increased focus on delivery
• the importance of using effective metrics to assess the experiment in hybrid working, including its impact on the resilience of the organisation in the longer term
• the value in a mutually reinforcing connection between improving productivity and the delivery of our organisational vision and values
• strong support for the emerging performance framework and the accompanying review of delivery capacity and capability
• the need for the performance framework to act as an enabler of improved delivery and performance as well as measuring this
• the opportunity to expand engagement in this process beyond The Scottish Government, including in the context of existing commitments to joint working, for example on COVID-19 Recovery
• the opportunity to build ownership and integration, both organisational and on delivery, including the connection to delivering value for money
• a welcome commitment to simplicity and coherence with existing structures in the design of the framework
• the need for clarity on when SG’s appetite for risk is breached, particularly on long standing high-rated risks, and the value of conveying this information to ministers
• the need to ensure that such reporting offers ministers confidence around the steps in place to mitigate risk and relates these to key policy priorities
• the ongoing requirement to evaluate static risks and the overall calibration of different risks across the risk register to crystallise action and recognise what may be chronic or require escalation to the ministerial level
• the extent to which risks on the register identify and mitigate key risks to policy delivery and performance 

Deep dive on climate change

Kersti Berge, Director, Energy & Climate Change, provided an overview of Scottish Government commitments to deliver a just transition to Net Zero by 2045, and a successful COP26 for Scotland. This included the scope and scale of the challenge, the shape of the programme, the governance structures and processes, the key risks, the resourcing challenges and the increasing focus on climate adaption and resilience, alongside the delivery against targets for emissions reductions and a just transition.

In discussion, the board noted:

• that Climate Change statutory targets register as a very high risk on the corporate risk register and reducing this risk is a significant challenge both in terms of public will and in the scale of financial investment required, in addition to action required by UKG
• the challenges in securing assurance, given statutory targets have been missed and that adaptation is not given equivalent focus; while noting the challenging nature of those targets and that no country has yet mapped out plans and resourcing that would achieve full assurance on climate change
• the need for clarity on and adherence to the key critical pathway decisions now needed to meet statutory targets
• that transformational change is underway, with significant increases in spending on delivering climate outcomes and challenging targets for transport and heat, but while progress has been made in reducing emissions by over 50%, this has mainly been in electricity generation
• the need for an entrepreneurial approach to delivering climate outcomes, through a practical focus on key areas for action such as heat, transport, food and land use
• the increasing engagement by ministers, accountable officers and governance boards, which has resulted in improved ownership of climate change outcomes across Scottish Government, though further progress is needed to secure detailed action plans and resourcing for delivery
• the importance of ensuring climate outcomes are considered at the heart of the Resource Spending Review
• that the new Green Party Ministers provide additional perspective and input to the action required to meet statutory targets and the importance of their input feeding through to delivery plans
• the opportunity to use learning gained during the COVID-19 pandemic on achieving behavioural change
• the value of clear gateways and thresholds to ensure climate outcomes are considered within all aspects of Scottish Government planning from the start, including infrastructure project planning
• the progress the Scottish Government has made in reducing emissions by 50% within its own estate and operations
• the importance of focusing on areas of significant emissions, balancing the need to model good practice internally with ensuring sufficient focus and resource is committed to securing buy in and change across all sectors in Scotland

AOB

There was no further business raised.