The great divide: COSLA

“COSLA in meltdown as councils on verge of quitting”

“COSLA ‘faces destruction’ as another council quits”

While the Scottish press has enjoyed creating juicy headlines in recent weeks, the reality behind the newspaper columns paints a complex and potentially worrying picture for Scotland’s council representative body. COSLA’s remit is to be the national voice for local government north of the border, lobbying on behalf of its member councils and dealing with pay negotiations. Councils choosing to be part of COSLA pay a subscription and since 2007, all 32 have maintained their membership.

However, since the start of the year, five councils have voted to break with COSLA, leading many to claim the organisation is facing a crisis. Dumfries and Galloway, Aberdeen City, Renfrewshire, Inverclyde and South Lanarkshire have put the wheels in motion to leave COSLA, citing their dissatisfaction with the financial settlement they are receiving from the Scottish Government. Glasgow City Council is expected to follow suit this week.

However, what the headlines often fail to say is while all four have given 12 months notice to quit, they can still withdraw their intention at any time. At Aberdeen City Council, the motion which was agreed to by councillors instructed the local authority’s chief executive to write to COSLA before 31 March 2014 to advise that Aberdeen City Council “will terminate its membership of the organisation with effect from 1 April 2015, but reserves the right to withdraw such notice at any point during 2014/15 in view of the impending review of the COSLA constitution and standing orders”.

This constitutional review is currently under way within the organisation. One of the key proposals is to shift decision-making powers from the Labour-dominated monthly council leaders’ meeting, to its quarterly convention, which is based on delegates. The findings of the review are expected in the summer.

Inverclyde Council made the decision as part of the council’s budget announcement and similarly has given notice to terminate membership from 1 April 2015. Inverclyde’s leader, Councillor Stephen McCabe, said: “The constitutional review which was approved by COSLA is due to report in June 2014. If this results in a significant transfer of power from the leaders’ group to the convention, this would seriously reduce the influence of this council and lead us to question the value to Inverclyde of our continuing membership of COSLA. Therefore we are giving COSLA the statutory notice of our intention to leave the organisation.”

But McCabe has revealed that should the review report in June with a different recommendation; the council has left the door open to withdraw its notice to quit COSLA.

“Depending on the outcome of the COSLA review, we reserve the right to withdraw our notice to terminate our membership,” he said.

A spokesman for COSLA, speaking after Aberdeen’s decision was announced, expressed little shock at the move. He stated: “This is not a surprise, COSLA, as a membership organisation is governed by a set of rules, this notice to quit is a member council following our procedures which in itself is a good thing. The reason for it happening now is that under our rules a council has to give a full financial year’s notice of its intention. Indeed this is why you could see more councils deciding to take a similar course of action in the coming days and weeks.

“The course of action adopted by Aberdeen and Dumfries and Galloway Councils reflects their response to a proposal to review those rules. The reality is that COSLA is the only local government association in the United Kingdom with a 100 per cent membership. This will continue to be the case for the rest of this financial year and all of next financial year and during this time the organisation will be doing its absolute utmost to ensure that we resolve the issues that have been raised with us and as well as representing our full 32 council membership.”

Funding seems to be at the heart of the problem, with many councils continuing to feel pinched, with shrinking budgets and increased demand on their services. There are two possible ways of calculating how much money councils are likely to get from the Government next year. The so-called ‘flat cash settlement’ means they’ll essentially get the same amount; or changes could be made to some of the factors which feed into how the distribution formula works. Council leaders at COSLA have previously backed the former; however, figures released by the Scottish Government suggest most would benefit from the other option.

Finance Minister John Swinney has written to COSLA, asking for confirmation that they wish the Scottish Government not to uprate needs-based indicators when allocating funding for individual local authorities in 2015/16. Earlier this month, the Scottish Parliament approved over £10.6bn of funding to deliver local services across Scotland, with extra support for students and businesses. The 2015/16 local government finance settlement represents flat cash with extra money for new responsibilities. COSLA leaders had previously taken the view that the needs-based indicators should not be uprated and that all 32 councils should receive the same share of funding in 2015/16 as they will receive in 2014/15 – meaning the latest figures on populations and deprivation would not be applied.

Swinney said: “I am respectful of the relationship we have with local government and of their internal decision-making, and for those reasons I am minded to accept the proposal from COSLA that they do not wish the Government to uprate the funding formula for 2015/16.

“However, I also want this decision to be made with the utmost

transparency. The view COSLA has expressed will have funding implications for councils around the country. I have set out to all local authorities the two different scenarios to ensure that the full facts are available and that informed decisions are taken. I have now written to COSLA to provide them with the two different funding scenarios for local councils – one based on uprating the needs-based indictors and one based on COSLA’s approach to stick with 2014-15 rates.

“My preference will always be to have a fair and equitable settlement for all councils that is based on local needs and gives the maximum opportunity to deliver strong local services for local people. I will continue to work closely with COSLA to ensure that is achieved.”

While normally reserved to local town halls, the issue has reached the Scottish Parliament, with First Minister Alex Salmond discussing the matter during a recent First Minister’s Questions. Salmond said: “[It] is worth noting that it was the Scottish National Party Government in 2011, after eight years of total inaction by the previous Labour-Liberal Executive, that introduced a funding floor that ensured that all local authorities should receive 85 per cent of the funding average.

“[There] is a time period between signalling an intention to leave the organisation and leaving it. Therefore, it would probably be in everybody’s best interests if we took a calm sook on it and allowed COSLA and the individual councils to come to their consideration. However, it would probably be helpful to some councils if we set out the indicative position that would have arisen if the same funding formula that has been applied since the 1980s had been applied in the year after next compared with the COSLA proposal. We have to take the COSLA proposal extremely seriously, because that is what we have always done. We have said that that funding formula is within its gift. However, it is important that all the councils understand and know the implications of what some of them seem to have voted for as part of the considerations within the Labour group.

“The tensions seem to be centred around two areas. One is whether the funding formula that has been used since the 1980s should be applied again or whether there should be a roll-out, in the year after next, of a funding formula that depends on the previous census figures. That is one of the areas of contention. The other area of contention is that there seems to be dissatisfaction among some councils in COSLA about the nature of decision making regarding how much comes from the leaders’ group and how much comes from the convention itself.”
This is not the first time councils have parted ways with COSLA. In the early 2000s, the organisation was rocked by bitter schisms which saw Glasgow, Falkirk and Clackmannanshire Councils temporarily leave and both COSLA’s chief executive and president at the time also quit. The councils were unhappy about COSLA’s handling of the finance settlement from the then Scottish Executive, and issues around membership fees. However, these problems were overcome and all three subsequently rejoined COSLA, though Falkirk didn’t return until 2007. By this stage, Pat Watters was in the role of president, one he would hold for a historic three terms, with Rory Mair in the chief executive position.

With the formation of the SNP minority government at Holyrood in 2007, a new agreement with local government was formed. The Concordat between the Scottish Government and COSLA was hailed as historic and set out a new way forward for local and central government. The Concordat stated that it “underpins the funding to be provided to local government over the period 2008-09 to 2010-11”.

It said: “The new relationship is represented by a package of measures. It is endorsed by both the Scottish ministers and by the COSLA presidential team. The package has been agreed within a tight financial context. Both sides believe that the proposals on offer, arrived at following detailed negotiation, represent the best outcome that can be achieved. They further believe that taken as a whole, the package will lead, over time, to significant benefits for users of local government services.”

The Concordat paved the way for single outcome agreements, the removal of ringfencing, the right to retain efficiency savings and increased autonomy. However, despite this new way of working, problems have continued to arise. With the Concordat, councils had to sign up to a number of SNP policy pledges, including an aspiration to cut class sizes and provide free school meals. In 2009, tensions erupted over class sizes, teacher numbers and the future model of education delivery. This latest ‘crisis’ will mean all eyes move to COSLA’s annual conference which is due to take place in a couple of weeks. Always a busy and important couple of days in the local government calendar, this year it will gain extra significance amid the furore of recent weeks.