Corporate Board minutes: September 2024

Attendees and apologies

Members

• JP Marks (Chair), Permanent Secretary
• Lesley Fraser, DG Corporate
• Stephen Gallagher, Director, Mental Health (for DG Health and Social Care)
• Joe Griffin, DG, Strategy and External Affairs
• Aidan Grisewood, Director, Jobs and Wellbeing Economy (for DG Economy)
• Manish Joshi, Non-Executive Director (NXD)
• Louise MacDonald, DG Communities
• Belinda Oldfield, NXD
• Michelle Quinn, Interim DG Net Zero
• Neil Rennick, DG Education and Justice
• Jayne Scott, NXD and Chair of Scottish Government Audit and Assurance Committee (SGAAC)
• Alyson Stafford, DG Scottish Exchequer
• Jenny Stewart, NXD

In attendance

• Jennie Barugh, Director of Fiscal Sustainability and Exchequer Development (item 5)
• Lewis Bennett, Economist, Societal Impact and Wellbeing Team (item 3)
• Andrew Bruce, Director of Communications and Ministerial Support (until 13:42)
• Louise Conetta, Head of Directorate Unit, Scottish Procurement and Property Directorate (item 2)
• Jonathon Curry, Deputy Director, People Strategy (item 6)
• Angela Flynn, Head of Financial Management and Reporting (item 5)
• Geoff Huggins, Chief Digital Officer (item 2)
• Claire Hughes, Head of Corporate Reporting (item 5)
• Martin Johnson, Director, EU Directorate
• Merlin Kemp, Joint Head of Foresight and Capability Unit (item 3)
• Simon Mair, Deputy Director, Place Based Service and Reform (item 2)
• Mary McAllan, Director of Public Service Reform (item 2)
• Jackie McAllister, Chief Financial Officer (CFO)
• Richard McCallum, Director of Public Spending (item 5)
• Iain MacNab, Head of Risk Management Policy (item 3)
• Nicola Richards, Director, People
• Kirsty Walker, Interim Board Secretary and Deputy Director, ET Strategic Governance Office (ETSGO)
• Robyn Whitelaw-Grant, Strategic Lead Risk, Control and Assurance (item 3)

Secretariat

• Fiona Brennan,  Graduate Development Programme, ETSGO
• Shaun Docherty, Policy Officer, ETSGO
• Stuart MacArthur, Head of Strategic Governance, ETSGO
• Owen McMahon, Executive Team Administration Assistant, ETSGO
• Lesley Patrick, Head of Corporate Governance Team, ETSGO

Apologies

• Gregor Irwin, DG Economy
• Caroline Lamb, DG Health and Social Care
• Ruaraidh MacNiven, Solicitor to the Scottish Government and Director, SGLD

Items and actions

Welcome, apologies, declarations of interest, and minutes

The Chair welcomed members and attendees to the third Corporate Board (CB) meeting of 2024. The minute of the 18 June 2024 meeting was approved as an accurate record, and no declarations of interest were offered.  The Chair welcomed NXD Jayne Scott, attending the meeting for the first time as Chair of SGAAC, and NXD Manish Joshi, attending for the first time as Deputy Chair of SGAAC.  The Chair provided a brief summary of events that have taken place since CB last met, noting particular satisfaction with Oracle readiness.  The Chair noted agreed change to agenda order, to support focus on Public Service Reform (PSR) and Strategic Horizon Scan Risks. 

Public service reform

Director of Public Service Reform (PSR) provided a progress update highlighting the need for reflection and consideration of the current approach. Chief Digital Officer then provided a summary and progress update on the digital transformation of public services.

 In discussion, the Board noted:

• The recognition of the significance of the prevention agenda to the overall Public Service Reform (PSR) outcomes
• Themes which could support the reform programme including: Pace (roll out of good ideas quickly); Invest to save; Focus; Culture; and Outcomes Based Budgeting
• An appreciation of the current fiscal challenges, and the need to manage change effectively while holding the line on current fiscal envelopes.  This challenge was noted for the deliverability surrounding ‘spend to save’ investments    
• Director of Mental Health gave an example of a recent digital innovation being implemented across all Health Boards, noting that historically Health Boards had innovated digitally to meet local circumstances.  A more strategic approach is needed, wherever possible, leveraging SG capabilities
• The importance of an overarching long term financial strategy to assist decision making across the programme and provide mitigation to the risk of short-term financial pressures influencing decision making. Spending reviews, whether published or not, were identified as a key process to drive these long-term financial strategies
• The importance of ensuring preventative activity was accurately forecast and built into long-term budget planning/processes was emphasised 
• An opportunity to consider a communications strategy that builds compelling narratives showcasing success, and, through the development of supporting toolkits, encourages further engagement with PSR across the public sector, accelerating reform
• The importance of milestone reporting and the quality data underpinning this, noting major reform is a multi-year process.  It was noted the PSR programme is a high trust, distributed model and therefore there is an important balance of governance/assurance and empowerment 
• While being mindful that transformation needs to be systems led and conducted by those closest to the work, further consideration should be given to whether the resourcing requirement of the core PSR team (including analytical support requirements) remains appropriate 

Organisational health – risk 

Joint Head of Foresight and Capability Unit and Economist , Societal Impact and Wellbeing Team, provided an update on the strategic horizon scanning workstream, which aimed to identify key risks, trends and opportunities for Scotland to support decision-making and policy development. Recent work had included interviews with stakeholders from across a wide range of sectors with workshops to follow, and a survey to gain insights from a representative sample of the Scottish public on attitudes on the future. Insights would be used to develop resources that could be utilised across the public sector to inform longer-term thinking.

In discussion, the Board noted:

• The importance of reflecting on and understanding generational improvements and competing generational perspectives on how progress is defined
• Links to the Programme for Government (PfG), the National Performance Framework, and the potential to use international comparators to better understand the wider context and goals
• The potential impact of horizon scanning on the organisation’s strategic thinking, enabling priority areas and trends to be targeted
• The element of uncertainty inherent in any forward-looking project, demonstrated by unpredictable major events over the past 10-15 years
• The importance of broad scenario planning designed to support ongoing collaboration and strategic forward thinking

SGAAC Chair update 

Chair of SGAAC summarised key points in writing from the meeting of SGAAC on 9 September 2024.  The Chair confirmed the committee had agreed to adopt a greater focus on preventative and systemic risk in future meetings; had heard an update from DG HSC on the delivery risk aligned to funding pressures and the corresponding short-term decisions taken as a result; had been pleased to note an in-year Path to Balance had now been identified although significant uncertainties remained, and continued to reserve their assurance on longer-term financial sustainability.

Organisational health – finance

The Chief Financial Officer (CFO) and Director of Fiscal Sustainability and Exchequer Development introduced the item which covered the in-year path to balance; 2025-26 financial position; and an update on the Annual Accounts. CFO confirmed an in-year path to balance had been identified, while recognising that utilising non-recurring savings is unsustainable.  CFO then confirmed progress made with the Annual Accounts 2023-24, which have been shared with the board, and noted an extraordinary SGAAC meeting on 7 October to complete the assurance process.  CFO asked the board to note that they are content with the draft accounts and this process. 

In discussion, the Board noted:

• The organisation will look to reduce its dependency on utilising non-recurring savings to balance budgets
• Cabinet has reached agreement on the necessary workstreams needed to deliver an affordable 2025-26 budget
• The importance and criticality of the UK Government Spending Review to support the development of the multi-year fiscal strategy

Organisational health – people 

Deputy Director, People Strategy provided an update on the SG workforce position, noting the impact of the implementation of financial controls on both external and internal recruitment.

In discussion the Board noted:

• The need for transparency around workforce figures and plans in place to address concerns
• The importance of core SG acting as a role model for other public bodies and leading by example

Corporate governance review

Interim Board Secretary and Deputy Director of ETSGO confirmed the paper would be presented by correspondence. 

Any other business  

No other business was raised.