Politicians need to grasp the nettle and introduce an outcomes-based approach to enable longer-term financial planning for local government in Scotland
The financial constraints faced by councils in Scotland came up time and again in the recent evidence session taken by Holyrood’s Local Government and Regeneration Committee.
There was a discussion on two emerging approaches – outcome-based budgeting and priority-based budgeting. Both methods aim to realign resources to more appropriately reflect the drive to an outcome focus and away from traditional input-based measures.
I was one of the witnesses at the session along with representatives from the Convention of Scottish Local Authorities, the Society of Local Authority Chief Executives, Unison, the Improvement Service and Audit Scotland.
I reiterated CIPFA’s call for a fundamental revision to the existing formula-based resource allocation systems. We believe that the replacement should focus on integrated service delivery and the achievement of outcomes.
This would represent a radical move away from the present sector-based formulae, which essentially protect inputs and outputs. With local government in Scotland spending £18bn each year, it’s vital that the money is allocated in an appropriate way.
Modernisation of financial planning systems will be necessary to accommodate budgeting on an outcomes basis and to enable planning for the longer term. But, clearly, bravery will be required from politicians in moving to such a new approach given that outcomes can only be measured over longer timeframes, perhaps over a generation, rather than within a four-year electoral cycle.
And there are plenty of other issues to consider. On the day of the evidence session, the SNP government announced its plans to reorganise Scotland’s eight police boards into a single force. There are significant financial and governance challenges ahead in dismantling the eight boards and the challenge should not be underestimated.
The problems are there for all to see, but there is a clear thread of a solution all the way from national funding through to local financial planning.
Don Peebles is policy and technical manager at CIPFA in Scotland
