Corporate Board minutes: March 2024

Attendees and apologies

Members

• John-Paul Marks (Chair), Permanent Secretary
• George Burgess, Interim Director of Agriculture and Rural Economy (for DG Net Zero)
• Lesley Fraser, DG Corporate
• Joe Griffin, DG Strategy and External Affairs
• Gregor Irwin, DG Economy
• Caroline Lamb, DG Health and Social Care 
• Louise MacDonald, DG Communities
• David Martin, Non-Executive Director (NXD)
• Belinda Oldfield, NXD
• Neil Rennick, DG Education and Justice
• Jayne Scott, NXD and Deputy Chair of Scottish Government Audit and Assurance Committee (SGAAC)
• Alyson Stafford, DG Scottish Exchequer

In attendance

• Jennie Barugh, Director of Fiscal Sustainability and Exchequer Development (item 4 until 15:00)
• Andrew Bruce, Director of Communications and Ministerial Support
• Alison Cumming, Director of Budget and Public Spending (item 4)
• Jonathon Curry , Deputy Director, People Strategy (for Director, People)
• Nick Ford, Director of Procurement and Property (item 6)
• Merlin Kemp, Head of Strategic Insights Unit (item 3)
• Susan Malaney, Senior Finance Manager (item 4)
• Mary McAllan, Director of Public Service Reform (item 6)
• Jackie McAllister, Chief Financial Officer (CFO)
• Iain MacNab, Head of Risk Management Policy (item 3)
• Ruaraidh MacNiven, Solicitor to the Scottish Government (SG) and Director of SG Legal Directorate
• Kirsty Walker, Interim Board Secretary and Deputy Director, Executive Team Strategic Governance Office (ETSGO)
• Kirsty Whyte, Team Leader Fiscal Performance and Risk (item 4)
• Robyn Whitelaw-Grant, Strategic Lead Risk, Control and Assurance (item 3)

Secretariat

• Shaun Docherty, ETSGO
• James Gibbon, ETSGO
• Stuart MacArthur, ETSGO
• Owen McMahon, ETSGO

Apologies

• Roy Brannen, DG Net Zero
• Nicola Richards, Director, People
• Jim Robertson, NXD and Chair of SGAAC

Items and actions

Welcome, apologies, declarations of interest, and minutes

The Chair welcomed members and attendees to the first Corporate Board (CB) meeting of 2024. The minutes of the 12 December 2023 meeting were approved as an accurate record, and no declarations of interest offered. Interim Board Secretary provided an overview of progress with actions on the action tracker.

SGAAC Chair update

Deputy Chair of SGAAC summarised key points from SGAAC on 4 March 2024. SGAAC noted that assurance could not be given by the relevant Programme Boards on delivery of the 2030 Child Poverty and Climate Change targets at this point. SGAAC continued to reserve assurance on Medium Term Fiscal Sustainability and the 2024/25 Path to Balance, with challenges in DG Health and Social Care highlighted. It was recommended that the pilot for a streamlined approach to DG Assurance be fully rolled out. Support was given to the Directorate for Internal Audit and Assurance (DIAA) annual plan. Progress with implementation of Audit Scotland recommendations was noted, and importance of identifying and maintaining practical outputs asserted. 

Chair of Corporate Board noted that fiscal sustainability was due to be discussed within the Organisational Health – Finance item. A Health and Social Care recovery roadmap was in development, and Ministerial announcements regarding Climate Change were expected. The continued support and challenge provided by SGAAC was welcomed, and importance of assurance being evidenced noted. 

Organisational health - risk

Strategic Lead Risk, Control and Assurance and Head of Strategic Insights Unit provided an update on the Corporate Risk and Strategic Risk landscapes. New and proposed risks had been identified which cut across multiple portfolios, and their ownership discussed at a meeting of the Executive Team (ET). The 2024 Horizon Scanning project had begun – to identify risks and opportunities over a 10 to 20 year period. The intention to engage with NXDs on this was noted.

In discussion, the board noted:

• with reference to the Cyber Resilience risk, the effects of the recent cyber-attack on Dumfries and Galloway NHS Board, value of sharing lessons learned, and importance of the SG’s cyber resilience strategy
• the decrease in the Cladding Remediation risk score following progress of the Housing (Cladding Remediation) Bill and development of approaches to ensure collaborative efforts with building companies to resolve combustible cladding issues
• the de-escalation of the Civil Contingencies risk from the Corporate Risk Register was due to the new Senior Responsible Officer (SRO) model, with further information sought on how this had impacted the risk
• importance of a collective, strategic, long-term approach to managing large-scale risks such as the Preventative Public Health risk
• importance of ensuring SG and its senior leaders dedicate sufficient focus to opportunities presented by digital advancements like Artificial Intelligence – and potential role for Corporate Board in supporting this

Organisational health – finance

CFO, DG Scottish Exchequer, Director of Budget and Public Spending and Director of Fiscal Sustainability and Exchequer Development provided an update on the in-year financial position, the 2024-25 Budget position, arrangements to support public sector pay strategy, and next steps on multi-year sustainability. Progress with achieving a path to balance was noted, and the importance of portfolios challenging 2024-25 budget assumptions to ensure a realistic picture highlighted. Publication of the latest Medium Term Financial Strategy (MTFS) was scheduled for 30 May 2024, with Economy, Spending and Tax to be retained as the three pillars and an emphasis on clear actions. 

In discussion, the board noted:

• gratitude for the work of CFO and her team to reach a projected balanced position for Resource and Capital in 2023-24
• importance of continued focus on fiscal sustainability, affordability and accurate forecasting moving into 2024-25, and of transparency and clarity about financial challenges
• potential impact of political events like a UK Government election on Scotland’s financial position
• positive progress on removing unfunded commitments, and importance of identifying savings from activity that does proceed and of finding recurring savings
• pay pressures remained a significant risk. Importance of a collective approach was noted, including around responding to any potential industrial action, and of building on efforts to ensure drivers and controls are understood by all

Organisational Health - People

Deputy Director, People Strategy provided an update on workforce and people data, noting the organisation was on track to meet its adjusted target on workforce size by the end of the financial year. Levels of Temporary Responsibility Supplement (TRS) and Temporary Promotion (TP) had reduced, and contingent worker numbers had reduced to below pre-pandemic levels. In the people data, Average Working Days Lost (AWDL) remained above the 7.0 target. People Directorate intended to continue to provide assistance through the People Strategy, and by supporting the leadership cohort to mitigate risks to employee engagement posed by further significant changes – such as the move to a 35 hour week and introduction of Oracle Cloud. 

In discussion, the board noted:

• positive progress against Workforce objectives
• AWDL remained a significant challenge 
• engaging leaders and managers across SG would be important to reducing AWDL. Oracle Cloud was expected to provide richer data and tools to drive improvements
• importance of prioritisation in keeping workloads manageable – with NXDs encouraged to support conversations on prioritisation through the DG Assurance process
• hybrid working as a factor in people and wellbeing data trends

Public service reform 

Director of Public Service Reform (PSR) provided an update on the PSR programme, noting the majority of activity now had a responsible director agreed, but further analytical support was required. Portfolios had been commissioned to share their short, medium and long-term plans, which would support a report to Parliament planned for May 2024.

Director, Procurement and Property introduced the Corporate Efficiency Levers dashboard, which showed the tangible impact and progress with seven PSR workstreams within DG Corporate. With support from DG Scottish Exchequer, a proposed funding model had been developed for scaling up programmes of work. 

In discussion, the board noted:

• the value of the dashboard, and usefulness of benchmarking and illustrating the benefits and cashable savings from Corporate Transformation
• the opportunity to share positive stories to drive further progress
• support for proposed approach of reinvesting a proportion of savings into upscaling programmes of work
• PSR represented a change to SG’s operating model, and driving it forward remained a key priority
• productivity gains as another aspect of PSR that can deliver tangible impact and improved value for money
• importance of communications with partners given the importance and complexity of the programme, the opportunity for SG to inspire change, and the key role of partners in successful delivery

Corporate governance review

Interim Board Secretary highlighted the recommendations from the Corporate Governance Review.

In discussion, the board noted:

• comments would be provided to ETSGO via correspondence
• the volume of Programme Boards, and opportunity for DGs (with NXD support) to review for their own portfolios and identify any no longer required

Any other business

The Board was invited to provide any comments on supporting papers via correspondence.