Scotland’s public services - going their own way

  • The path to public services reform in Scotland has been different to elsewhere in the UK
  • These differences have meant that the need to respond to dramatic budget cuts has not been as great
  • We look at how Scottish councils are responding to the changes and challenges

Our Pioneers senior managers’ risk report 2015 showed how English councils are responding to the extreme challenges brought about by financial austerity.

Council CEOs describe wholesale transformation at a frantic pace, with radical innovation, commercialisation and culture change taking place in many organisations.

In England we saw the urgent need for new governance and risk management models to underpin many of these risky changes.

However, in Scotland the path to public service reform has been a different one.

Balancing the books

The most noticeable difference, until recently, was that the need to respond to dramatic budget cuts was not as great in Scotland, although this is starting to change. By comparison, the overwhelming aim of transformation programmes is to improve Scottish communities.

As part of the ‘Pioneers’ research we spoke to the CEO of a leading Scottish council, that is on course to balance its books by 2017 thanks to the implementation of its five year Transformation Strategy. This strategy was designed to reduce spending and is very much aligned to the principles outlined by the Christie Commission.

However, the Scottish Government Draft Budget, announced in December, means a review of the position for 2016/17, to identify additional savings.

Reduction in funding

According to Audit Scotland there has been an 8.5% real-terms reduction in councils’ funding from the Scottish Government between 2010/11 and 2013/14.

Meanwhile, the Spending Review and Autumn Statement included capital funding for the Scottish Government of £1.9bn through the block grant, an increase of 14% in real terms over five years.

Scottish councils do have financial challenges however, with increasing debt and reducing reserves.

Currently Scottish councils are unable to increase council tax or take advantage of the recently announced 2% social care precept.

Audit Scotland has urged councils to take a long-term view (of 5-10 years) to ensure financial sustainability.

Demographic differences

Spending on public services costs more per person than in England for several reasons.

Notably, while Scotland covers one third of the land mass of Great Britain, the population represents 8% of the 60 million.

Demand for services has increased, putting more pressure on council resources. Along with the impact of welfare reforms, this is due largely to demographic changes.

In the Scottish council we spoke to, for example, the number of residents aged over 75 is due to increase by 51% by 2030. The younger working population is decreasing, and youth unemployment is a serious issue.

Community focus

Public services in Scotland are being developed from local government foundations distinct from England, and additional conditions are being placed on councils as part of the local government finance settlement.

For example, Scottish councils are required to maintain teacher numbers, at a time when school rolls are falling and schools are being merged.

Nevertheless, there is a strong community focus in Scotland, which flows through in the way things get done. Reform is focused on working with, rather than for, communities and ensuring greater integration of public services to improve outcomes.

Community planning was given a statutory basis in the Local Government in Scotland Act 2003. Every council is a member of a Community Planning Partnership (CPP) as part of the reform agenda.

Scotland looks very different to England politically. The SNP government leadership influences goals, priorities and methods.

Fewer councils and a smaller Parliament means central government is much more accessible to local government, allowing engagement in decision making and policy.

Outsourcing council services

Scotland is currently not moving to commercialise councils and outsource services to anything like the same degree as England.

However, the council we spoke to believes that if a service can be delivered safely, more cost-effectively and efficiently by another private, public or voluntary organisation, then there should be a presumption towards externalisation.

Shared services, arms-length organisations, leisure trusts and community partnerships are recent developments.

Risk and governance are critical measures in transforming Scottish local government. Risk managers will be asked to manage this new risk agenda.