Exploring the scale of the challenge facing Scotland’s councils

In our 2015 overview report on local government in Scotland, we said: ‘Councils tell us that they should manage budgetary pressures in 2015/16 but the years beyond pose a level of challenge not previously experienced.’

The Commission recognises the achievement of councils – both councillors and officers – in meeting these challenges to date.

What we say in this year’s overview is that the scale of the challenge in 2016/17 and beyond has significantly increased because of the local government funding settlement. This has substantial implications for services to the public, councillors and the local government workforce.

Next year councils and health boards, through health and social care partnerships, jointly have the responsibility to make a significant start in the shift from hospital care to care at home and care in the community. This is the most far-reaching public service reform since the establishment of the Scottish Parliament.

nr_160317_local_government_overview_cover And these challenges are compounded by: a one-year financial settlement, cost pressures and increasing demands on services from an ageing and growing population. The majority of our recent Best Value audits have highlighted a dependency on incremental changes to services, increasing charges and reducing employee numbers in order to make savings. But these are neither sufficient nor sustainable solutions set against the scale of the challenge facing councils. Cuts can only be part of the solution. What’s required is a more strategic approach, longer-term planning and a greater openness to alternative forms of service delivery.

It’s challenging for councillors and officers to fundamentally change the way a council has provided a service over a lengthy period of time. But there are significant consequences to not conducting comprehensive option appraisals: services may not be as efficient or effective as they could be and may not be achieving value for money, and resources may not be directed to priority areas such as preventative services. In considering all viable options, it’ll be essential that councillors are provided with comprehensive and objective information on the cost, benefits and risks of each option. Comparisons with other councils can be illuminating – for example in managing sickness absence. If all councils matched the best performers, there would be an equivalent gain of 200 teachers and 700 other council staff across the country.

Councils will need to ensure they have people with the necessary knowledge and skills to manage the changes that lie ahead, particularly in options appraisal, programme management, commissioning, finance and scrutiny.

And in a climate of reducing resources the importance of scrutiny has never been greater. Scrutiny arrangements must add demonstrable value in monitoring the planning, execution and follow-up of key decisions. The public needs to have confidence that their council’s arrangements are transparent, independent and effective. If they are not, the public interest is not being met.

The Commission hopes this report will be a helpful tool for councillors and officers, and as always, we welcome feedback

About the author

AuditScotland_P_001Douglas Sinclair is chair of the Accounts Commission for a term of office until 30 November 2017. He has held the position of Chief Executive in district, regional and unitary councils in Scotland, as well as being former Chief Executive of COSLA.