Corporate Board minutes: December 2022

Attendees and apologies

Members

• John-Paul Marks(Chair), Permanent Secretary
• Colin Cook, Director for Economic Development (for interim DG Economy)
• Lesley Fraser, DG Corporate 
• Joe Griffin, DG Education and Justice 
• Ronnie Hinds, Non-Executive Director 
• Paul Johnston, DG Communities
• Caroline Lamb, DG Health and Social Care
• Linda McKay, Non-Executive Director
• Alyson Stafford, DG Scottish Exchequer
• Ken Thomson, DG Strategy and External Affairs
• Annabel Turpie, Director of Marine Scotland (for Interim DG Net Zero)

In attendance

• Jennie Barugh, Director of Fiscal Sustainability and Exchequer Development (item 3)
• Andrew Bruce, Director for Communications and Ministerial Support
• Alison Cumming, Director for Budget and Public Spending (item 3)
• Jonathon Curry, Deputy Director, People Strategy (item 3)
• Nick Ford, Director for Scottish Procurement and Property (observing)
• Claire Hughes, Head of Fiscal in-year Management (item 3)
• Simon Mair, Deputy Director, Covid Recovery (item 4)
• Iain MacNab, Head of Risk Management Policy (item 2)
• Ruaraidh Macniven, Solicitor to the Scottish Government
• Mary McAllan, Director of Covid Recovery and Public Service Reform (item 4)
• Jackie McAllister, Chief Financial Officer
• Nicola Richards, Director for People
• Jim Robertson, Chair of the Scottish Government Audit and Assurance Committee and Non-Executive Director
• Laura Turney, Head of Public Service Reform Unit (item 4)
• Claire Tynte-Irvine, Board Secretary
• Robyn Whitelaw-Grant, Head of Governance and Risk (item 2)

Secretariat

• Christine Allardyce, ET Strategic Governance Office
• Lesley Patrick, ET Strategic Governance Office

Apologies

• Roy Brannen, Interim DG Net Zero
• Annie Gunner-Logan, Non-Executive Director 
• Louise MacDonald, Interim DG Economy

Items and actions

Welcome and introductions

The Chair welcomed members and attendees. Apologies were noted as above. There were no declarations of interest. 
The board thanked Linda McKay and Annie Gunner Logan for their contributions both to Corporate Board and across the organisation, noting this was the last Corporate Board within their NXD tenure.
The board agreed the minutes of the meeting on 27 September 2022. Updates to actions were noted.

Risk overview

The Chair of SGAAC provided an overview of key concerns and challenges raised at SGAAC for the board to assess whether appropriate mitigating action is in place. He welcomed the Executive Team workshop on Risk Appetite scheduled in February 2023. The Head of Governance and Risk provided an overview of risk assessments across the organisation, highlighting the need for assurance on target risk scores, the controls in place and levels of risk appetite.
In discussion the board noted:

• opportunities to review the scoring of risks including impact of the Cost of Living and the Ukraine Super Sponsor Scheme
• the development of workforce plans as a mitigation for risk on Capacity and Capability
• that following DG Net Zero assurance meeting, Climate Change adaptation has been escalated for consideration as a corporate risk
• the opportunity to increase focus on longer term strategic risks, including sustainability of health services

Organisational health

The Chief Financial Officer provided an update on the financial outturn for Financial Year (FY) 2021/22, and on the budget position for FY 2022/23, where risk bands were narrowing as levels of spend become clearer.
Director of Fiscal Sustainability and Exchequer Development provided an update on fiscal sustainability indicators, noting an improved position for FY 2023/24 and 2024/25, with a widening gap from 2025/26 onwards, noting the limitations of currently available data.
In discussion the board noted: 

• several risks remained current, including outstanding pay deals, although some were not expected to affect the current financial year
• funding shortfalls should be addressed without use of non-recurring funding wherever possible, noting the adverse impact on funding for future investment if one-off funds are used now
• the Accountable Officer control framework was proving effective in the current year. There were fewer benefits seen in relation to future years, driven by factors including data quality
• greater confidence in the likely capital outturn based on historic trends, noting the need to ensure allocation of capacity to relevant programmes
• the opportunity to identify the key issues for longer term funding allocations and which spend has the greatest impact on outcomes, including where provision might duplicate or compete with alternative sources
• the importance of continued active management of fiscal and funding risks taking account of the medium-term economic context
• the need for investment in financial capability across the organisation, at all levels

Deputy Director, People Strategy set out the proposals to deliver continued workforce controls, detailing the current position and progress made and requesting the board’s agreement to areas of focus for 23/24. The Chief Financial Officer reinforced the connection between financial allocations and staffing levels, noting that this would be enhanced through the delivery of the shared services programme.

In discussion the board noted:

• progress within DG Economy, noting the cultural change associated with the transformation programme
• the approach being applied in Marine Scotland, with recruitment based on annual delivery plans, and a skills matrix to support staff movement
• the need for quality data to support performance reporting
• a focus on ensuring that the organisation has the right capabilities focussed on priority areas as well as the right level of resourcing, with active management to retain and embed necessary skills
• the connection to the Public Service Reform agenda and workforce activity across the wider public sector
• the importance of a communications strategy to support talent retention, well-being, diversity and resilience
• the board endorsed the steps proposed

DG Corporate provided an update on deliverables and funding for corporate services and Corporate Transformation, confirming that this offered a reasonable basis for progress in 2023/24, with further funding models being developed over the next year.

Delivery – Public Service Reform

DG Communities and the Director for Covid Recovery and Public Service Reform provided an overview on existing successes and current challenges. They highlighted the need for a whole government approach to ensure maximum value and impact from change at scale, sharing best practice and building a truly person-centred approach. Transformational change required coordinated engagement on common goals now to secure results in the medium term.
DG Education and Justice summarised progress on Police and Fire reform and outlined further options, such as collaboration across emergency service support functions. Education was developing a new model to enhance attainment and outcomes.
DG Health and Social Care outlined challenges, including the changing health of the nation, variations across Scotland, diagnostic and technological advances. An effective reform approach needed to ensure the drivers for these changes were understood and addressed within coordinated structural and strategic solutions.
DG Communities considered on the relationship between SG and Local Government, the effective engagement of the third sector and the future resourcing of delivery, whilst maintaining a person-centred approach.
In discussion the board noted:

• the support from the board for the focus on short-, medium- and long-term approaches underpinning the reform principles set out in the paper, with stronger and more person-centred services at more sustainable cost 
• successful reforms in police and fire had the necessary pace and support of the service in delivery, and there was potential for further progress
• as well as controls, an outcomes focus should be embedded within accountability and governance mechanisms to support long-term delivery
• the opportunity in a renewed outcomes-focused framework with local government, including the potential involvement of the third sector and acknowledging the interface with Social Security Scotland’s reach and impact in local communities
• the potential to explore drawing in private sector input to generate benefit for the wider economy through reform, including from more digital business models and services
• the need to avoid overlap between SG, local government and other public bodies to produce a person-centred approach including the need for place-based coordination of economic development plans
• the potential in a zero-based evidence-led review of bodies within and across portfolios, supported by collaborative and consistent engagement, lead through portfolios but based on a common agenda and unified timetable in support of the budget narrative

The board endorsed the approach outlined, underlined the need to build momentum behind wider reform and noted the potential benefits in sharing this analysis more widely in doing so.

Any other business

No other business was raised. The next meeting of Corporate Board is scheduled for Tuesday 21 March.