CIPFA Scotland debate: ex-minister issues restructuring call

21 Nov 14

A former Scottish Government cabinet minister has called for a restructuring of Scottish local government and other public bodies in response to plans to devolve significant extra powers to Holyrood.

Speaking at CIPFA Scotland’s Directors of Finance Annual Public Finance Debate in Edinburgh last night, Susan Deacon, who served as cabinet minister for health and community care in the first Scottish Executive from 1999 to 2001, said she was instinctively against large-scale reforms.

This was because reorganisations lead to massive costs and meant people took their eye off the ball, she told delegates.

‘I inherited the after effects of an NHS reorganisation and you saw a drop in performance as a consequence of that – if you knew where to look it was there.’

However, in response to a question from the floor on the impact of potential new powers for the Scottish Government – currently being examined by the Smith Commission following the no vote in September’s independence referendum – Deacon said the time was right to look at widespread reform to councils and other public bodies. ‘I do think we need to have a look now at structures – not just in terms of our council structures but our other public bodies, which have all evolved and been considered separately.

‘There is a degree of dysfunctionality now that I think requires to be looked at, and it has always surprised me and disappointed me that there hasn't been more of a comprehensive look taken at some of that [since devolution in 1999].

‘We have not really looked at it holistically, and I think the time is right to do that. The question is how we do that, and whether we can manage that change effectively.’

Also speaking at the event, journalist and commentator Lesley Riddoch said people in Scotland felt a ‘sense of desperation about ever having any impact on their council’, given the size of Scotland’s 32 authorities.

She called for the role of community councils in Scotland to be expanded so they can hold powers at a more locally accountable level.

‘It’s not clear at all if community councils have any purpose. If they don’t, knock them on the head and put them out of their misery. If there is some sort of point of having something sat that community level, beef them up, give them some statutory functions, give them budgets, give them power.’

Asked by delegates what single thing should be changed, Riddoch said that powerful town councils should be re-established, as Scotland’s current 32 unitary authorities were among the largest in Europe, with an average population of 165,000 people.

lsquo;In most northern European countries, local government is extraordinarily powerful and extraordinarily local, and it is neither in Scotland.’

Richard Kerley, professor of management at Queen Margaret University, who specialises in public service management, said that the guide for the organisation of public services should be the test of subsidiarity.

However he highlighted that the track record of devolved governments at Holyrood was to centralise power.

‘There’s a problem there,’ he said. ‘That seems to me to suggest the possibility that whatever the measures of powers that will eventually be extended, they will be used to accrete more power.

‘Is that a good thing? No, it’s not. The test should be where are those decisions best taken.’

In a vote taken in the session on the question of whether radical transformation of public services requires structural reform within Scotland, delegates agreed overwhelmingly – 72% to 28% – that such change was required.

Speaking to Public Finance after the vote, Alex McPhee, executive director of finance and corporate support at East Ayrshire Council and chair of CIPFA Scotland’s directors of finance section, said he was surprised by the outcome of the poll.

‘I didn’t think that people would generally believe that restructuring was needed, so that was a surprise.

‘I think there was a general agreement that we do need to move towards a preventive spend model which involved communities much more, rather than a top-down model.’

Public sector accountants had to form part of the solution, he added.

‘We have power to help make things happen, particularly around issues of structural reform and preventative spend.’

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