Corporate Board minutes: June 2022

Attendees and apologies

Members

• John-Paul Marks (Chair), Permanent Secretary
• Lesley Fraser, DG Corporate
• Joe Griffin, DG Education and Justice
• Annie Gunner Logan, Non-Executive Director
• Ronnie Hinds, Non-Executive Director
• Paul Johnston, DG Communities (from 3pm)
• Stephen Kerr, Director, Social Security (for DG Communities until 3pm)
• Caroline Lamb, DG Health and Social Care
• Louise Macdonald, Interim DG Economy
• Shirley Rogers, Director of Performance, Delivery and Resilience (for DG Strategy and External Affairs and for item 3)
• Alyson Stafford, DG Scottish Exchequer
• Annabel Turpie, Director of Marine Scotland (for Interim DG Net Zero)

In attendance

• Anne Aitken, Deputy Director, Performance and Delivery Unit (item 3)
• Reuben Aitken, Director of Covid Business Support (item 5)
• Andrew Bruce, Director for Communications and Ministerial Support
• Colin Cook, Director of Economic Development (item 5)
• Jonathon Curry, Deputy Director, People Strategy (for Director, People and for item 4)
• David Martin, Non-Executive Director
• Jackie McAllister, Chief Financial Officer
• Neil Richardson, Non-Executive Director
• Fiona Ross, Non-Executive Director
• Jenny Stewart, Non-Executive Director
• David Torz, Permanent Secretary’s Office
• Claire Tynte-Irvine, Board Secretary
• Robyn Whitelaw-Grant, Head of Governance and Risk (item 3)

Secretariat

• James Gibbon, ET Strategic Governance Office
• Lesley Patrick, ET Strategic Governance Office

Apologies

• Roy Brannen, Interim DG Net Zero
• Ruaraidh Macniven, Solicitor to the Scottish Government
• Linda McKay, Non-Executive Director
• Nicola Richards, Director for People
• Ken Thomson, DG Strategy and External Affairs

Items and actions

Welcome and introductions

The Chair welcomed members and attendees. Apologies were noted from Roy Brannen, Ruaraidh Macniven, Linda McKay, Nicola Richards and Ken Thomson. There were no declarations of interest. 

The Board agreed the minutes of the meeting on 29 March 2022 and noted the updates to the action tracker.

Permanent Secretary overview 

The Chair welcomed Louise Macdonald to her first Corporate Board as Interim DG Economy. The Chair also welcomed the Non-Executive Directors (NXD) in attendance and the additional challenge and insight they could bring to discussions. The Chair paused to reflect on the contribution made by NXD Nichola Clyde, recognising her experience and leadership and acknowledging the impact of her loss across the organisation and on colleagues within People Directorate with whom she worked closely.

The Chair thanked those around the table and their teams for the intense activity across the organisation and praised work supporting COVID-19 recovery, welcoming Ukrainian refugees and responding to the Cost-of-Living crisis. There would be continuing demand for strong and effective leadership across the organisation, following today’s announcements around the Constitution, and on other priorities, including the National Care Bill, the National Strategy for Economic Transformation and The Promise, as well as action on preventing Drugs Deaths, tackling Child Poverty and achieving Climate targets. 

The Chair highlighted successes including the publication of the first Resource Spending Review (RSR) in a decade, agreement on a flightpath to a balanced Budget outturn and a significant review of workforce planning to ensure the organisation is the right size and shape to deliver while supporting our people. Further highlights included attendance and engagement in Civil Service Live, Ask ET and the increasing benefits from hybrid working across the organisation.

Reflecting on the First Minister’s announcement in Parliament, Board members noted the arrangements in place to support work on the Constitution and the rigorous governance surrounding the preparation of the relevant publications.

Delivery

Director of Performance, Delivery and Resilience provided an update on the suite of performance and delivery materials provided to Ministers and Delivery Executive to ensure risks and their potential consequences are highlighted at the earliest possible opportunity and mitigations are put in place. It was noted that a timetable has been established for the Programme for Government, with a focus on transformative delivery within available resources.

In discussion the Board noted: 

• the importance of understanding whether progress is being made towards delivering priority outcomes and what is required to make a difference
• improvements to ensure more detailed delivery reporting were welcomed including the capacity to highlight immediate priorities which require attention. This provides a common information basis for Ministers, Executive Team and Directors. It is not intended to be comprehensive nor to correlate directly with the Corporate Risk Register, which serves a different function
• careful planning will be required to manage in-year budget reductions and the potential impact on wider public sector delivery
• the importance of a culture consistently focussed on delivering outcomes, and whether the right actions are in place to do so 

Director of Communications and Ministerial Support provided an update on plans to monitor performance on responding to Freedom of Information requests (FOIs), Parliamentary Questions (PQs) and correspondence and ensure robust record keeping noting that this work responds to the Permanent Secretary’s expectations around these areas of core Civil Service competence and that response rate data alone cannot guarantee improvement, or account for quality of replies, but is an important first step.

In discussion the Board noted: 

• the importance of FOIs, PQs, correspondence and information management, given transparency is a core Scottish Government commitment
• given the significant demand and resource required, the process must be efficient. Quick successful allocation is important to this 
• the potential benefits of moving resource to meet time-limited demand within a specific area and the value of sharing best practice and improvement activity across the organisation
• the need to understand the impact of repeat requests, and whether adjustments to responses can help reduce these 

Organisational health

The Chief Financial Officer provided an update on the financial outturn for Financial Year (FY) 2021 to 2022, and an update on the budget position for FY 2022 to 2023. She highlighted improved processes to assist in identifying underspends earlier, including quarterly challenge meetings and reporting of actual spend against forecasts. Savings options have been identified for Ministerial consideration.

DG Scottish Exchequer provided an update on the RSR, noting that this first RSR since 2012 provided a trajectory to a sustainable fiscal balance for the organisation. A programme board will now focus on metric development and impact monitoring.

In discussion the Board noted: 

• the role for senior leaders and NXDs in ensuring transparency and challenge on available savings options, and for accountable officers in creating a shared understanding and aiding in delivery
• the additional knowledge that NXDs could bring using external data sets and benchmarking
• the need to maintain a strong focus on outturn trends to ensure effective understanding of the ongoing position and to ensure that all spend is targeted to achieving outcomes

Deputy Director, People Strategy, provided an update on the approach to workforce planning, noting the current recruitment restrictions have been effective in arresting growth. Over the summer, workforce requirements will be examined in a collaborative way, bringing together current information on people, costs and performance to support improved capability and ensure organisational priorities are delivered.

In discussion the Board noted:

• the link to corporate transformation, and potential impact of automation
• the importance of effective interpretation of historic changes in informing challenge, taking a multi-year view
• the need to ensure the workforce approach aligns with the financial context, with strategies in place to manage the changes necessary, while using the available headcount to ensure the necessary capability to deliver 
• the opportunity to model public service transformation, ensuring the right people are in the right position to deliver 

Director of Marine Scotland provided an update, including establishment of multi-function teams focussed on annual delivery plans with corresponding resource allocation, and shifting from unique delivery roles to a flexible skilled resource within a portfolio management approach.

Risk

Head of Governance and Risk provided an update, noting a number of risks remain very high scoring, and that many of these have limited controls confidence. Recent risk mapping aims to provide a more holistic view and build a ‘risk picture’ for each DG Family. 
In discussion the Board noted: 

• the need for Board members to assure themselves that realistic plans are in place to deliver key outcomes when assessing risk levels
• that the overall downward trend in economic indicators provides an increasingly challenging context for managing risk
• that opportunities for Public Service Reform should be built into the assessment of risk, including the opportunity cost if these are not realised

DG Economy and Director of Economic Development introduced a deep dive into the management of risk in the handling of public assets, noting the importance of reflecting on lessons from current practice. 

In discussion the Board noted: 

• the importance of a clear rationale for investment in assets which may be in a distressed state, with a defined strategy and the capacity and capability to deliver
• the value in a strategic overview, given the range of roles the Scottish Government can occupy and the cross-portfolio impacts, ensuring appropriate transparency, governance, and advice to Ministers 
• the potential to draw on the expertise of the Scottish National Investment Bank
• the need for strong boards that can project rigour through their organisations, noting the impact of public scrutiny on the operating environment for publicly owned assets
• the opportunity for a Team Scotland approach, developing a core capability to be applied across the public sector as required
• the need for clear guidance in assessing whether an asset should be considered for public investment and when, with clarity on the outcomes being delivered, noting the inclusion of material in the updated Scottish Public Finance Manual
• the importance of a collective overview and a whole-life approach to reviewing investments and the controls in place, considering the overall mix of assets across the public sector

Any other business

The Board Secretary raised on behalf of the Chief Financial Officer that an SCS Finance Objective would be circulated by correspondence for agreement and incorporation into performance monitoring.

The next meeting of Corporate Board is scheduled for Tuesday 27 September 2022.