3 November 2010
Flagship policies such as free personal care for elderly people should not be protected in public sector reforms, Scotland’s auditor general has said.
In an exclusive interview with Public Finance, Bob Black also called for ‘serious and urgent consideration’ to be given to the redesign of public services as Scotland faces its biggest budget crisis since the Second World War.
The Scottish National Party administration has indicated that it intends to protect funding for free personal care as well as free bus passes in its £30bn budget, due to be published in the week beginning November 15.
Speaking to PF this week, Black said that he fully acknowledged that any government could set a policy protecting a particular area of spending. ‘I appreciate that that is a perfectly appropriate policy line to take,’ he stressed.
But he went on: ‘Having said that, in terms of the drive to make the public sector more efficient, I would generally discourage ring-fencing of any part of the public sector because it carries an implication that everything in that area of spending is being delivered as efficiently as possible.
‘I don’t think any part of the public sector should be exempted from the continuing challenge to deliver the services more efficiently.’
A spokesman for the Scottish Government said it supported the continuation of the existing criteria for free personal care and free bus passes.
He said: ‘It’s about choices and we take the view that some of the achievements of devolution over the past ten years should not be given up or abandoned because of a financial squeeze imposed by Westminster.’
Latest figures produced bv the Glasgow-based Centre for Public Policy for Regions confirm that public spending in Scotland is set to fall by £3.3bn by 2014/15 – a reduction of 11.3% – while capital spending is due to be reduced by more than a quarter.
Black pointed out that these ‘very significant reductions’ follow a full decade of ‘growth’ in excess of 5% a year in real terms – ‘So we’re going from full speed forward into reverse gear within the space of a couple of financial years.’
He said the challenges now facing the public sector needed to be dealt with in two phases. In the short term, spending had to be reduced quickly to bring budgets into balance.
At the same time there was a need to think seriously and urgently about the redesign and restructuring of public services in Scotland ‘so we can preserve and build on the very best of the services we offer – but do this more efficiently and at lower cost in the future’.
Black suggested that the starting point for service redesign had to be a reflection on how much money was available and an assessment of what were the most important services that had to be provided within overall objectives.
He said: ‘Once we’ve decided that,we must look at the options for delivering these and be very clear headed and robust in assessing what are the most effective and efficient means of delivery.
‘The central concept must be the delivery of high-quality accessible services and we shouldn’t be precious about any of our existing delivery arrangements or organisational structures to achieve that outcome.’
The auditor general warned that the reality of the immediate financial position facing Scotland following last month’s Spending Review was closest to the ‘most pessimistic’ of the three budget scenarios described in an AuditScotland report published last November.
Commenting on the Scottish Government’s decision to delay reducing its budget until next year, Black said: ‘That was a judgment they made, I would imagine on the basis that the economy was in recession and there was need for the public sector to do as much as possible in the short term to keep the level of economic activity up.
‘But it does mean that we’re now facing the extremely difficult situation of having to take out 6.2% in real terms in the course of the 2011/12 financial year. It intensifies the challenge for the first year.’
