07 September 2001
Speaking in Edinburgh on September 5, Scotland's depute finance and local government minister Peter Peacock said he was 'concerned that we have not made sufficient progress to distinguish between the things local government exists to deliver – first-rate services for our customers – and the things we need to do to service ourselves as organisations – the backroom functions'.
But he suggested that the stability introduced by new three-year allocations and budgets provided the 'space to look at this divide more clearly'. In particular, ministers believe there is scope to tap into major economies of scale by getting councils to work together to provide key financial services.
Peacock said: 'It does seem unsustainable and unjustifiable that we still have 32 payroll systems in Scotland; that we have so many units for tax billing, collection and debt recovery; that we have so many separate arrangements for procurement for insurance and so on.'
The NHS in England has already embarked on a major shared services initiative that could see core financial services for all the country's health bodies run from as few as ten shared service centres. It is unclear whether Scottish councils will be steered down the same path or whether they will initially simply be encouraged to set up partnership arrangements with neighbouring authorities.
Peacock told Public Finance that ministers had no particular model in mind.
Peacock was addressing a CIPFA conference on three-year budgeting and planning. He told council finance leaders that last December's announcement of firm allocations for councils covering three years had been vital for creating the right climate for long-term change.
'I regard it as perhaps the most important single change in the structure of administering local government finance in the past 25 years,' he said. 'It provides the opportunity to move away from the previous annual debates about how the grant is divided up between authorities and to focus on what really matters – the delivery of improved services.'
While Scotland has negotiated long-term pay deals with teachers and council employees, further increasing financial certainty, English authorities are left guessing about future years' cost increases and levels of grant income.
PFsep2001
