Innovation needed to beat spending squeeze, Scots councils told

26 Mar 14

The new chair of Scotland’s local government spending watchdog has told the country’s 32 councils they will have to be more innovative and open-minded about service delivery to meet renewed budgetary pressures

‘Councillors need to have an open mind on how they organise the services they provide. That means looking afresh at what people need, how it can be delivered and who can best deliver it,’ Accounts Commission chair Douglas Sinclair said today.

‘Councils face increasingly difficult choices as budgets continue to tighten. So they need look at all the options available, and engage openly with the public so that they make the best decisions.’

Sinclair’s comments come in the commission’s annual Overview of Local Government in Scotland report, his first since replacing John Baillie as chair last autumn.

In the report, the commission warned authorities they must look beyond conventional savings to meet a medium-term funding gap that has been aggravated by the need to manage Westminster and Holyrood-led reforms in welfare, health and social care. 

Last year, councils spent nearly £21bn in aggregate, employed 204,500 staff and used buildings and other assets with a value of around £38bn, according to the report. 

Councils were able to increase the level of reserves in 2012/13, but the commission said most of the money put aside has already earmarked against future spending commitments. In fact, the amounts being set aside against contingencies fell for the first time in recent years, as councils sought to plug funding gaps.

‘The total level of reserves has increased but the level of “free” reserves has fallen, with councils predicting future funding gaps,’ the report said. ‘More work is needed to develop longer-term resource plans that show connections between savings, staff changes and how assets, such as land and buildings, are used to best effect in providing services.’

In his introduction to the report, Sinclair said councils needed to ask the question, ‘What works best and can we prove it?’ 

He added: ‘The commission recognises that options appraisal is challenging for councils, councillors, managers and staff. Loyalties run deep in councils, strong political beliefs are held and balancing competing interests is always difficult but the duty of Best Value – making best use of public resources – must always be paramount.’

He also voiced concerns about growing political tensions in authorities. 

‘While political coalitions have worked well in recent years there is evidence of heightened tensions in council chambers,’ Sinclair noted.

‘The commission has expressed its consistent view that it is unacceptable if political tensions become so extreme that they compromise a council’s ability to ensure effective leadership, demonstrate good governance and, as a result, weaken the public’s trust and confidence in the integrity of the council and its councillors to conduct public business.’

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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