Corporate Board minutes: December 2024

Attendees and apologies

Members

• JP Marks (Chair), Permanent Secretary
• Lesley Fraser, DG Corporate
• Caroline Lamb, DG Health and Social Care
• Joe Griffin, DG Strategy and External Affairs
• Gregor Irwin, DG Economy
• Manish Joshi, Non-Executive Director (NXD)
• Louise Macdonald, DG Communities
• Belinda Oldfield, NXD
• Michelle Quinn, Interim DG Net Zero
• Roy Brannen, 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 3)
• Andrew Bruce, Director of Communications and Ministerial Support 
• Jonathon Curry, Deputy Director, People Strategy (for Director, People)
• Geoff Huggins, Chief Digital Officer (item 4)
• Nick Ford , Director of Procurement and Property (item 4)
• Simon Mair, Deputy Director, Place Based Service and Reform (item 4)
• Mary McAllan, Director of Public Service Reform (item 4)
• Ruth Meyer, Unit Head, Public Service Reform (item 4)
• Jackie McAllister, Chief Financial Officer (CFO)
• Richard McCallum, Director of Public Spending (item 3 and 5)
• Iain MacNab, Head of Risk Management Policy (item 4 and 6)
• Lisa McGuinness, Director of Strategy, Performance, Delivery and Readiness (item 4 and 6)
• Ruaraidh MacNiven, Solicitor to the Scottish Government and Director, SGLD
• Kirsty Walker, Interim Board Secretary and Deputy Director, ET Strategic Governance Office (ETSGO)

Secretariat

• Fiona Brennan, Graduate Development Programme, ETSGO
• Shaun Docherty, Policy Officer, ETSGO
• Carolyn Younie, Head of Strategic Governance, ETSGO
• Lesley Patrick, Head of Corporate Governance Team, ETSGO

Apologies

• Nicola Richards, Director, People

Items and actions

Welcome, apologies, declarations of interest, and minutes

The Chair welcomed members and attendees to the fourth Corporate Board (CB) meeting of 2024. The minute of the 23 September 2024 meeting was approved as an accurate record, and no declarations of interest were offered.  The Chair expressed satisfaction with the good progress made on actions and DG Communities confirmed Action 207 would now be jointly owned with DG Corporate.

SGAAC Chair update

Chair of SGAAC summarised key points from 25 November 2024 meeting. SGAAC welcomed Audit Scotland’s report on fiscal sustainability and reform in Scotland. Challenges in DG Health and Social Care portfolio were noted, with a further paper on service delivery to return to SGAAC in the future. Climate adaptation was also identified as a key issue for future committee consideration.  SGAAC was assured on the 2024-2025 Path to Balance and continued to reserve assurance on 2025-2026 and longer-term fiscal sustainability.

Organisational health – finance

The Chief Financial Officer (CFO), Director of Fiscal Sustainability and Exchequer Development, and Director of Public Spending introduced the item which covered the in-year financial position; 2025-2026 financial position; and an update on the Scottish Budget. A projected balanced in year position was noted, with a risk of slippage across capital. An overview of the highlights and key messages from the Scottish Budget were provided, alongside the key decisions and remaining risks. There was also a high-level update on next steps including the development of individual and overall fiscal sustainability delivery plans.

In discussion the Board noted:

• High organisational readiness was required to ensure successful delivery of increased capital funding levels for financial year 2025-2026
• The Infrastructure Investment Plan (IIP) would be a key organisational tool for supporting the multi-year capital profile and medium term fiscal sustainability
• Deployment of Scotwind funding was a contributing factor in capital spike in FY 2025-2026 and delivery risks would need to be managed to ensure it was appropriately utilised in year
• Dependency on the UK-G spending review, currently anticipated for Spring. Proactive planning could help inform, rather than respond to this publication and would also support the medium term fiscal sustainability of the organisation
• Private sector engagement would be key to ensure all delivery partners are positioned to support an increase in delivery
• The prioritisation of ‘spend to save’ initiatives would be critical for delivery of reform, such as Public Service Reform

Organisational health - Public Service Reform

Director of Public Service Reform (PSR) introduced the item and provided an update on key developments since the board last convened.  The recent Audit Scotland report was addressed, with the Director for PSR giving a brief overview of the initial response to the report (as published on 21 November) which also considered the budget, resourcing, and the overall governance of the PSR programme.  The Board was asked to consider the proposals regarding leveraging existing DG assurance mechanisms and progressing ‘deep dives’ within DG families. Chief Digital Officer and Director of Procurement and Property then provided an update on corporate efficiencies and the benefits being delivered through the digitisation of public services.

In discussion, the Board noted:

• The encouraging progress made in the digitisation of services; the need to promote these developments and improve our storytelling to ensure our work is better understood by all stakeholders
• A “Digital Scotland" speaks to the ambitions of our tech community.  An opportunity exists to develop this industry and attract further inward investment given the skills, capabilities, and more generally, the ecosystem under development
• The digitisation of Visit Scotland as an example of transforming the way a product is delivered
• Success is about coaching a whole systems culture for accelerated digital and corporate transformation. Scotland is making encouraging progress, and there is scope to go further faster next year
• Currently, the adoption of digital services is optional. This can affect the pace of reform. Once an optimal model has been established, there will be more scope to mandate and accelerate reform.
• Digitisation of services will naturally increase as users become more comfortable using self-service products
• The programme has clear objectives, but must be more delivery focused to achieve its transformative ambitions
• The resource requirements for the distributed delivery model for PSR and that the PSR team will be moved to DG Strategy and External Affairs which will improve access to resources, offer greater strategic alignment and help improve delivery
• The importance of the “invest to save” process being well managed to create meaningful investments which will accelerate, and incentivise, reform.   
• The requirement for more of a services mindset: where reform is focussed on the service being provided as opposed the organisation providing it

Organisational health – people

Deputy Director, People Strategy introduced the item and provided an update on the reframing of the corporate capacity and capability risk to be focused on employee engagement and wellbeing, the impact of guidance being interpreted as imposed restrictions and the transition to Oracle led data on reporting. An update on the development of the TOC and budget process development was also provided.

In discussion the Board noted:

• The scenario modelling was helpful to inform discussion and understand how different choices can impact the projection
• Strategic choices which consider the organisation as a whole may better support overall Target Operating Model (TOM) delivery, as opposed to more tactical choices to date
• Improvement of TOC position can be supported through the effective deprioritisation of activities that do not best support government priorities
• Maintaining an appropriate composition of the workforce is required, ensuring mechanisms to continue to recruit external for key skills and ensuring new talent flow

Organisational health – risk

Head of Risk Management Policy provided an overview of how the Corporate Risk Register has developed throughout 2024, highlighting significant change to SG’s risk profile. Growing maturity around risk management across the organisation was noted, with more active discussion of risk taking place at all levels. There was increased risk in the system due to financial pressures, with management strategies in place. A number of static risks may require further action. The importance of openness and transparency in risk management was noted.

In discussion, the board noted:

• Positive progress in embedding a strategic approach to risk management across the organisation, with further work needed to drive forward use of risk appetite statements and ensure that clear success indicators are being identified
• The Budget has improved mitigations against a number of risks, including the housing risk

Any other business

No other business was raised. The Chair noted progress in implementation of the Corporate Governance Review recommendations.