04 March 2005
Public services in Scotland are delivered as part of a patchwork operation that is starting to fray. Minister Tom McCabe is stitching together a reform package that might begin with a reorganisation of local government but is unlikely to end there. David Scott reports
When Tom McCabe succeeded Andy Kerr as Scottish finance minister last autumn, a subtle, but significant, change was made to the brief. While Kerr had been minister for finance and public services, McCabe became minister for finance and public service reform. Four months into the job and it is becoming clear that he intends to live up to his title.
Like the rest of the UK, Scotland is set to make its contribution to Sir Peter Gershon's efficiency review by finding savings of more than £1.7bn over the next three years and reducing the number of public sector jobs. Unlike England, it has not set any targets for job cuts – but there is a wider, longer-term agenda.
With a well-established Parliament and government, devolved Scotland now seems ready for a radical look at the way services are delivered right across the public spectrum: local government, health boards, local enterprise companies (Lecs – the development and training organisations that operate under Scottish Enterprise) and a range of quangos, all of which are serving a population of just over 5 million.
The issue McCabe wants to address is not the government of Scotland but its governance. In a country its size, is there a case for sustaining 32 councils, each with its own director of education and council tax collection department? Should councils continue to operate separately from other public services, like those delivered by the 15 health boards, 22 Lecs, police and fire boards and other public bodies? Or should there be genuine joined-up government that also rearranges geographical boundaries so that each public body covers the same area?
The issue was highlighted recently when local authorities announced above-inflation increases in their council tax. Dundee was just one to complain of a low tax base caused by squeezed administrative boundaries in the 1995 local government reorganisation.
As McCabe points out, the city's population and school numbers are falling, so the council gets less in government funding. There is also the problem of council boundaries not being coterminous with those of other public services such as health boards and Lecs.
Before the 1995 reorganisation, Dundee was part of the Tayside region, served by a top-tier regional council. Tayside still exists as an area covered by the health board and Lecs. But there are three unitary local authorities within its area: Dundee, Perth and Kinross, and Angus. The pattern is repeated elsewhere in Scotland. Only in council areas that survived the 1995 shake-up, such as Fife, Dumfries & Galloway and Scottish Borders, are the boundaries coterminous.
The problem is recognised by McCabe, who describes the 1995 reorganisation as fundamentally flawed. Speaking to Public Finance, he says he has no interest in considering a wholesale review of local government boundaries in isolation. 'Quite frankly, I would regard that as a waste of time and money,' he says. 'It seems to me that the future of public services must be focused on far greater cohesion between different sections of the public sector. That may mean cohesion in terms of the way in which we can jointly deliver services and it may mean, on occasion, a better cohesion in terms of administrative boundaries.'
Instead of imposing solutions, the minister wants to encourage a wide-ranging debate about joined-up government. He says: 'Rather than following the pattern in the past where there was to a very large degree a top-down approach to these matters, I would like to try to engage with organisations in Scotland to see where they feel there are clear and obvious opportunities for them to organise themselves in a way that better serves the public.'
Most people agree that many of the problems that make joined-up government difficult stem from the 1995 reorganisation by the last Conservative administration. Big regional councils such as Strathclyde, Tayside and Lothian, which had been part of a two-tier local government structure, were dismantled to make way for 32 unitary councils. The Tories were accused of trying to gerrymander boundaries and create units that did not make administrative sense.
While there are clearly no plans for further major local government reorganisation in the immediate future, some people are now asking whether there is a need, for example, for three separate councils in an area such as Ayrshire (where there is a council for North, East and South) and two separate councils (North and South) in Lanarkshire. Is there any reason why such councils should not be amalgamated in the interests of efficiency and in creating boundaries that link in with other public bodies?
Certainly, the amalgamation of back-room offices such as council tax collection and payroll departments is firmly on the current agenda. Keith Geddes, a former president of the Convention of Scottish Local Authorities (Cosla) and a respected commentator on public affairs, believes the chance should be taken to go further.
'There are massive savings to be made from a reduction in the number of councils from the current 32 to, say, 15, a figure recognised by most experts as a sensible number,' he suggests. 'Such a reduction would also have the immense benefit of ensuring a concentration of expertise and ability at both councillor and official level.'
McCabe, himself a former leading Labour councillor, agrees that questions need to be asked about whether devolved Scotland can sustain its existing number of local authority directors of major services.
The minister says: 'As a prompter for discussion, I would ask if we really do need 32 directors of finance and 32 directors of education, and if we need 32 separate ways of collecting council tax. Perhaps there are occasions where one authority could be in the lead for a range of services while another could be in the lead for others.
'All of that would need to be against a very important background that this isn't an exercise in reducing the overall investment in local services, but is to try to make sure as much of that as possible is freed up for the development of services.'
McCabe acknowledges that there is a wider issue that extends right across the public sector in Scotland. He stresses the importance of community planning – the system that encourages councils to join with other agencies in order to provide the most effective and efficient public services.
'As we ask more people to take an involvement in the development of their community, it seems to me there is a logical progression towards taking a more holistic view of the things that make a community healthy, be that services provided by local government, the standard of the health service or the way that community develops economically. All of those things involve local government, the health service and Lecs.'
Until a wider review takes place, effective community planning seems the way forward. But the minister does not desist when asked if we could be reaching the stage where we had a 'super Edinburgh' or 'super Dundee' authority, responsible not only for local government services but for other public services as well.
'I certainly think there is a case for a lot more concentration but it shouldn't be centralisation for centralisation sake. There should be the creation of organisations that can compete with other major centres around Europe and around the world. Perhaps there are some models we see in other cities that we can learn from.
'If a super Edinburgh meant a city that can compete with the best on economic terms, in terms of attraction to tourism, quality of life and world-class health services, then that is a good idea.'
Douglas Sinclair, Scottish chair of the Society of Local Authority Chief Executives and Senior Managers, is pleased that the minister for finance has raised the issue. 'I agree with the view that nobody would have designed the present system of local government with a clean sheet of paper. The challenge to us is to come up with something different,' he says.
He adds: 'However, we don't need a review of local government. We need a review of local governance. By no stretch of the imagination can we consider the present set-up to be sensible. With 32 councils, 15 health boards, 22 enterprise companies, eight police boards and fire boards, what we have amounts to institutional porridge.'
His analysis does not take account of the existence of separate bodies such as Scottish Water, executive agencies such as Communities Scotland and various non-departmental public bodies. McCabe said recently there might be a case for transferring the powers of some quangos to local government, although he qualified this by saying any transfers might not just be a one-way process.
'What we need is a mature debate about what would be a sensible institutional map for Scotland, and having a set of principles that underpin that,' Sinclair suggests.
It has to be acknowledged that some positive progress has been made in recent years. Apart from the creation of strategic transport partnerships, there are community health partnerships and a joint future health programme that encourages the kind of positive co-operation that was unheard of several years ago.
But, according to Dr Iain Docherty, who specialises in local government issues at the school of business and management at Glasgow University, joined-up government at present doesn't work because of the present local government boundary structure.
'Some of the boundaries created at the time were ludicrous, politically inspired and not justified. The whole thing is a mess… too many different services have been reviewed in isolation,' he adds.
However, Cosla chief executive Rory Mair believes that there is unlikely to be any reorganisation for some years, so efforts should be focused on making joined-up government work rather than worrying about the present set-up being a mess. 'Decisions that were taken independently of each other do not necessarily mean they were wrong,' he says.
And he emphasises that if there is to be any change, it should bring decision-making closer to the people and not further away. 'We want to see real accountability being delivered to citizens in terms of the services they get,' Mair states.
The newly established Local Government Improvement Service in Scotland (equivalent to the Improvement and Development Agency in England) is likely to play a vital role in the push for greater efficiency in the public sector. Its director, Colin Mair, says much will depend on whether the agenda is to be about the management of public services or about governance covering all forms and levels of democratic accountability.
He adds: 'Councils do not need to wait for change to be driven by the Executive. Local authorities are already empowered to form almost any joint arrangements they think appropriate and can also propose changes to their boundaries. That would allow different arrangements in different parts of Scotland to emerge.
'The longer term issue of how different parts of the public sector are structured and relate to each other might nevertheless benefit from a vehicle like a commission to look across the whole of Scotland and at all public services.'
Some of McCabe's comments about possible boundary reviews have already led to local protests and a feeling of uncertainty, which may not be in the interests of public service employees. But he is currently doing no more than trying to encourage serious discussion about the longer-term delivery of all public services in Scotland, not just local government. He admits that tackling issues such as reorganising boundaries will be difficult but declares: 'The fact that it is difficult does not deter me.'
And the minister believes a debate about the future of public services, involving people who have years of experience in running them, should not be seen as a threat but as an opportunity. l
Tom McCabe, Douglas Sinclair and Colin Mair are speaking at the 2005 CIPFA in Scotland conference, being held at the Glasgow Hilton Hotel on March 10 and 11