Counting the cost

Local government in Scotland is currently the subject of a flurry of different commissions, legislation and pieces of work designed to see how more power can be devolved down to councils and in turn, to communities. The challenges facing local government in the current economic and demographic climate are huge, so what more should councils be doing to address these issues?

Every year, Scotland’s public spending watchdog, the Accounts Commission, publishes a comprehensive overview of how local government has performed during the previous year. In 2013, councils spent nearly £21bn, employed 204,500 staff and used buildings and other assets with a value of around £38bn. As local government faces reducing budgets and increasing demand, finances remain tight and councils are anticipating further budget reductions. To date they have balanced budgets mainly by reducing staff numbers but the commission believes this alone is not sustainable in the longer term.

Accounts Commission chairman Douglas Sinclair said: “Councils face increasingly difficult choices. To help make these decisions they need to make better and consistent use of options appraisal so that they can deliver the best possible value-for-money services to their communities. Councils need to ask the question, ‘What works best and can we prove it?’

“The commission recognises that options appraisal is challenging for councils, councillors, managers and staff. Loyalties run deep in councils, strong political beliefs are held and balancing competing interests is always difficult but the duty of best value – making best use of public resources – must always be paramount. Potential cuts require rigorous appraisal of alternatives so that decisions are transparent and based on solid information. Over and above these internal challenges, councils are having to deal with the impact of welfare reform, to plan with their partners for changes in health and social care and to deepen and strengthen the effectiveness of community planning.

"In this complexity of change, the foundation stones of good governance and accountability remain constant. A fundamental principle of good governance is councillors and officers operating in clearly defined and understood roles. The role of the councillor can best be described as being at the start and the end of the process; at the start deciding policy, and at the end, holding officers to account for their performance in implementing the policy.

“The part in the middle, the management of the council, is the responsibility of officers. Our audits have consistently shown that where roles are clear and respected and where best value is at the heart of its business, a council will be best placed to meet the challenges of 2014 and beyond. In contrast, bad governance is debilitating, time-consuming and expensive.”

An interesting aspect of the report was evidence of increasing political tensions and instability, “leading to strained working relationships”.

Sinclair added that strong political and managerial leadership is more important than ever and while political coalitions have worked well in recent years, there is “evidence of heightened tensions in council chambers”.

He said: “Of course there will always be different views and approaches across political parties; that is the essence of local democracy. However, the commission has expressed its consistent view that it is unacceptable if political tensions become so extreme that they compromise a council’s ability to ensure effective leadership, demonstrate good governance and, as a result, weaken the public’s trust and confidence in the integrity of the council and its councillors to conduct public business.”

The report says the best performing councils are able to identify when to set aside political differences and work on a constructive basis to support the council as a whole. It added that in these local authorities, councillors from all political groups generally agree on the overall priorities for the area, with debate focusing on how best to deliver them.

Aberdeen City Council was among those highlighted in the report, which said in the past, auditors had observed political tensions among councillors in several meetings which affected the efficacy of decision-making. It said: “Behaviour in the council chamber was regularly disrespectful and it had been necessary for councillors to be reminded of the requirements of the councillors’ Code of Conduct. A number of local issues had been particularly challenging and had added to the political tensions.

“Helping to improve working relationships can absorb a large amount of councillor and senior manager time when there are already pressures on senior managers to deliver the changes required to address existing service and financial issues.”

However, looking ahead, the Accounts Commission believes further pressures and tensions are likely. It stated: “Locally, the political make-up of councils is closely balanced, with half of councils run by coalitions, and reduced budgets mean that choices and decisions on services are harder. Nationally, the referendum on independence is the main political issue in Scotland in 2014, with heightened political activity for all parties and elected representatives, including councillors.”

Community planning partnerships (CPPs) have been criticised in the past as not performing as they should and failing to show adequate levels of buy-in from partners. The report states: “Partnership working is now generally well established and many examples of joint working are making a difference for specific communities and groups across Scotland. But overall, and ten years after community planning was introduced, CPPs are not able to show that they have had a significant impact in delivering improved outcomes across Scotland.

“Community planning is at a crossroads. This offers a significant opportunity to establish a system of leadership, governance and performance that ensures continuous improvement in community planning. This will not be easy. Barriers stand in the way, and this virtuous cycle will only be achieved through a level of sustained leadership that is significantly stronger than we have seen to date.

“CPPs need to focus more clearly on where they can make the greatest difference in meeting the complex challenges facing their communities. They need to make their single outcome agreements (SOAs) a true plan for the communities that they serve. They need to show how they are directing the significant public money and other resources available to CPP partners to target inequalities and improve outcomes. SOAs need to specify what will improve, how it will be done, by whom, and when.

“CPPs also need to ensure that partners align their service and financial planning arrangements with community planning priorities. This means ensuring that budget setting and business planning decisions by CPP partners such as councils and NHS boards take full account of community planning priorities and SOA commitments.”

So what should councils be doing differently in 2014 and beyond?

According to the commission, they need to review how services are currently delivered and consider options as to how they might be in future. Local authorities also need to increase focus on partnership working and longer-term resource planning. The commission says councillors must maintain a clear understanding of the financial position, while also understanding the public reform agenda, including the impact of welfare reform and keeping up to date through training and development.

Providing strong leadership and governance to support change is also important, while maintaining good professional working relationships and providing strong political leadership. The commission also recommends getting assurance that governance is sound, including where arm's-length external organisations are in place, and also providing stronger leadership of CPPs and working with partners to make the best use of the overall public resources available in the area.

Sinclair added: “The commission’s messages and recommendations are not new; they reflect recommendations and messages in previous overview reports. The fact they are similar serves to underline their continuing relevance and importance.”

However, Convention of Scottish Local Authorities (COSLA) president Councillor David O’Neill said the report was doing nothing apart from "stating the obvious and being extremely bland". O’Neill said:  “It is very disappointing that this year’s Overview Report is nothing more than a tick box exercise.  It gets full marks for blandness and for stating the obvious but delivers nothing in terms of moving things forward or offering real, constructive proposals.  In a nutshell, it tells us nothing that we are not already aware of.

“As each year passes it seems that getting a headline is more important than the content of the report – however this year I think it will even struggle to achieve that.

“Two examples that really annoy me and fall into the category of stating the obvious.  Firstly, that councils need to look at innovative ways of saving money, we have been doing that for years and do we really need to be told that from them. Secondly, and the one that takes the biscuit is, that when times are tough and cuts have to be made political coalitions in councils become more difficult.  I can also assure them that we do have an open mind as to how we organise services.

“I would also tell the Accounts Commission that Councils engagement with the public they are elected to serve has never been greater and I find it more than a little galling to be pulled up by them on this when they were one of the few public sector organisations who refused to come and give evidence to the commission I chair on strengthening Local Democracy – which smacks to me of do as we say, not as we do.”