Taking the high ground, by David Scott

22 Feb 07
Holyrood could face a radical shake-up after Scotland's May elections. So what difference would it make to public services? David Scott quizzes the key politicians

23 February 2007

Holyrood could face a radical shake-up after Scotland's May elections. So what difference would it make to public services? David Scott quizzes the key politicians

Seldom has Scotland's future as a nation been the subject of such heated controversy as now, with the political parties lining up for an election that could dramatically change the way the country is governed. If recent opinion polls prove to be correct, the vote on May 3 could end the Labour-Liberal Democrat coalition that has existed since devolution in 1999.

The Scottish National Party believes it now has its best chance of overtaking Labour and becoming the largest party in the 129-member Parliament. It has been consistently ahead in the polls, albeit by a narrow majority. This lead would not be enough for it to govern Scotland outright and go ahead with its policy of holding a referendum on independence. But it opens up some intriguing possibilities, such as a partnership with another party or the emergence of the first rainbow coalition in Britain.

At the same time, the three-hundredth anniversary this year of the Act of Union has fuelled the debate about whether Scotland's marriage with the rest of Britain should continue. There have been fierce exchanges about whether the country could stand on its own, including differences of opinion over government statistics claiming that it has an £11bn 'black hole' in its finances.

With public services high on the election agenda, Public Finance interviewed the key politicians on this issue from the four main political parties. The results suggest that, aside from the vexed issue of council tax, there is more to unite the parties than divide them.

Labour, the SNP, the Liberal Democrats and the Conservatives generally agree that there are too many public bodies and unnecessary duplication (32 councils, 14 health boards, 22 local enterprise companies, eight police forces and eight fire services as well as innumerable quangos – all of these in a country with a population of just 5 million and a Parliament based in Edinburgh).

The parties believe there is a need to simplify the system, cut out the duplication and encourage greater co-operation over a range of services such as local government and health.

Of the four politicians, Tom McCabe, the minister for finance and public service reform, has most to lose. He has been part of an Executive that has taken a very different approach from that south of the border – focusing on the way public services are managed and organised, rather than concentrating on choice and competition. He is currently considering responses to an Executive consultation document, Transforming public services, which set out the principles for reform and raised a series of questions about the streamlining of public bodies, including service integration and shared services.

He says: 'The key driver here is how we organise ourselves in the interests of improved service delivery.'

The minister spent much of the summer touring Scotland as part of a 'dialogue' exercise with public bodies. 'The whole dialogue process has been enormously encouraging at every level, whether it be senior professionals, frontline workers, third sector representatives, or indeed, service users,' he tells PF. While admitting he found 'some anxiety' among the public sector workforce, he claims there is generally great enthusiasm for change – 'enthusiasm for seeking out far greater symmetry between organisations and sometimes merging organisations'.

Although the Executive has set out the principles for reform, it has avoided producing any firm proposals for structural change. McCabe insists this is a deliberate policy because it does not want to impose a 'top-down' approach and is keen to encourage the public sector to come up with its own ideas.

His approach has undoubtedly encouraged a number of councils to embark voluntarily on changes that include plans to amalgamate or merge management services. However, John Swinney, finance spokesman for the SNP, believes the Executive is taking a 'dilatory' approach to reform. 'It's taken a long time to basically come up with a document that doesn't set a direction… it's been a slow process with very little progress,' he says.

The SNP has pledged to 'simplify' the government of Scotland by removing the duplication between government departments, agencies and, in some cases, local authorities. That's not dissimilar to what the Executive is planning.

But Swinney adds: 'We would democratise public services by giving much greater responsibility to local authorities and other elected bodies and effectively look for ways in which the benefits of that simplification and streamlining of the process can be passed on to all taxpayers.'

The SNP can argue that it has firmer plans than the Executive, since it has pledged a review of quangos and would abolish two bodies in the first instance – Communities Scotland, the executive agency that is responsible for regeneration and housing, and Sportscotland, the national agency for sport. The national functions of these bodies would be transferred to the Scottish Executive and local functions to councils or other appropriate local organisations. Local enterprise companies, which operate under the umbrella of the Scottish Enterprise development agency, would be abolished and their functions merged with council economic development departments.

When McCabe began the reform process two years ago, he suggested there were too many chief executives and directors of finance in local government. However, there is still no sign of any Labour plan to reduce the current number of 32 unitary councils.

McCabe hesitates when asked about whether Labour will come up with plans for structural changes in local government, then points out that he is encouraged that a number of councils are now voluntarily discussing such changes.

Interestingly, the SNP also has no definite plans to scale down the number of local authorities. 'The focus of our administration would be on rationalising and simplifying the government of Scotland rather than on a wholesale reconstruction of local authorities,' Swinney says.

The Liberal Democrats, however, would put their 'joined-up government' policy into action by setting up a 'super council' for each of the three islands councils of Orkney, Shetland and the Western Isles. Under this plan, the councils would be merged with other public bodies in each of the three islands. In addition to the current council services, the new organisations would be responsible for areas such as health and enterprise functions.

Deputy finance minister George Lyon, a LibDem MSP, says: 'As well as driving up performance in the islands, we would like to see this project acting as a pilot to see if the model would work in other parts of Scotland.'

His party wants fewer quangos, with those remaining made more democratic and more accountable to the Holyrood Parliament and its committees.

Lyon is keen on a 'one-door' model, citing one that operates in Canada. 'Under that scheme, people can walk into one office and get all the public services they want. It's very appropriate for the more rural areas,' he says. He also believes that the regulation of public bodies needs to be streamlined.

While the Scottish Tories would undertake a 'root and branch' reform of local government, this does not necessarily mean major structural changes. The party wants to examine council functions and see how these interact with other services such as health and enterprise, says finance spokesman Derek Brownlee.

The Tories are also keen to devolve more power to a local level – not necessarily to councils but to bodies such as community councils, which currently have no statutory responsibilities for service provision.

One significant change in Tory policies from recent years is that the party has scrapped its plans to remove education from local authority control. Brownlee says: 'There isn't a great deal of appetite in most parts of Scotland to look at taking education out of local authority control. It's now more an issue of how you deal with standards rather than how you fiddle with structures.'

The Tories believe that public sector reform will be difficult to achieve if it is being promoted by a party that puts more emphasis on the interests of public sector workers than on the people who receive the services. 'One of the big challenges will be achieving reform across the big spending areas like health, education and justice that benefits the users rather than a reform that is easier to get past the employees, who have a great deal of influence in the political scene just now,' Brownlee says.

McCabe gives the impression that public sector reform is very much 'on hold' and has not advanced much since the consultation paper was published last June. Asked whether there will be a significant reduction in the number of public bodies in Scotland, he replies: 'Yes, I would hope so.'

But the minister insists that reform is still on course, and will become even more important once the outcome of the Comprehensive Spending Review is known this year.

When the Scottish Parliament was set up in 1999, Scotland's budget was £17bn. That figure has almost doubled and is approaching £31bn this year. 'It's quite a sobering statistic. By any measure, that's a big increase,' McCabe emphasises.

The days of that scale of increase are clearly over, and McCabe warns that things are about to 'become a lot tighter'. He adds: 'It will require people [in the public sector] to look again at what they regard as their first priorities.'

Lyon, his partner in the Lab-LibDem coalition, agrees. 'We're committed to the efficient government agenda and, given what is likely to come out of the next Spending Review, efficiency will be even more important if we are to maintain the current level of service, if not improve it,' he says.

The question is whether the coalition will be in a position to implement its reform agenda after May. Not only is the SNP expecting to topple the governing partnership but the LibDems, who have had encouraging results in the opinion polls, are also hopeful of undermining Labour's position and having greater influence in their own right following the election.

Whichever party or parties are victorious on May 3, it is clear that public sector reform will remain on the agenda. The difference will merely be in the detail.

Tom McCabe is one of the speakers at the CIPFA in Scotland annual conference, taking place in Glasgow on March 1–2


Did you enjoy this article?