By Keith Aitken in Edinburgh | 7 October 2013
The powers of Scotland’s local spending watchdog, the Accounts Commission, should be reviewed to take account of councils’ increasing use of arms-length external organisations (Aleos), the commission’s outgoing chair has told Public Finance.
In a valedictory interview, John Baillie, who retires this October after ten years on the commission with six as its chair, also revealed that the watchdog would be looking afresh at its ability to ensure best value in council spending, and extending its audit programme for Community Planning Partnerships (CPPs).
PF last month reported mounting concern in Scotland’s voluntary sector over charitable status for Aleos and the extent to which they enable authorities to evade due scrutiny of their activities. The Scottish Council for Voluntary Organisations plans an inquiry into the behaviour of a selected sample of Aleos.
Baillie’s approach would draw on the commission’s duty to police the delivery of best value by councils, he said. ‘One of the matters we’re looking at just now is the power the commission has to assess the best value afforded to a council or a CPP by Aleos,’ he said. ‘We should be able to say, “show us how this is delivering best value”.’
Baillie pointed out that the commission had established a key principle in its 2005 paper Following the public pound that councils had a duty to achieve best value for all their public money, regardless of how or where this was being spent.
There was, he acknowledged, a growing debate about the effectiveness of councils’ supervision of Aleos, which therefore raised a question: ‘Should the Accounts Commission have additional powers to gain direct access to information from an Aleo, including direct access to its people?
‘We could also enhance our power to look at the governance issues around Aleos,’ Baillie added, arguing that the proper scope for such powers might be ‘governance of whether it’s achieving best value rather than the governance of the Aleo itself.’
Since the commission’s remit is limited to local authorities, the way ahead would likely involve finding the logical parameters of its existing powers, rather than seeking a new Aleo remit, he said.
Baillie also revealed that the commission has decided to look at its best-value powers again. This review was likely to place greater stress on the pace of improvement, he said. ‘It’s a much more targeted approach. Risk assessment in each council now informs the process better. It’s the stuff that we see as more risky that we would target for a best-value visit.’
The commission has pioneered methods to monitor CPPs, and published three pilot CPP audits earlier this year. Baillie said it would shortly embark on a further five, this time geared towards looking at the partnerships’ forward plans rather than their historic willingness to develop the sort of collaboration demanded by ministers.
‘One of my mantras is “fair and proportionate” – if we lose the reputation for being that, then people will stop taking us seriously,’ he said.
Baillie, a former KPMG partner, also recently stepped down after nine years on the Competition Commission. He retains a private practice and a visiting professorship at Edinburgh University, but admitted that he hopes to find some new public sector role, ‘because I find it fascinating, and I think I’ve got something to offer’.
