Scots local finance leaders flag up reform worries at CIPFA debate

11 Nov 16

Senior local government finance figures in Scotland have raised concerns that the Scottish Government’s public service reform plan is placing too much focus on governance changes, to the detriment of improving outcomes.

At CIPFA Scotland’s Directors of Finance Annual Public Finance Debate in Edinburgh yesterday, attendees voted by 30 votes to 3 that reforms to a host of public services being proposed by ministers were too focused on structural alterations.

The vote followed a debate with senior public sector figures that examined changes to services including education and health and social care across the country. The event was sponsored by UBS Asset Management.

Since returning to power following elections in May, Nicola Sturgeon’s SNP government has made school reform a priority, with plans being developed to boost the powers of head teachers and for regional education boards to encourage co-operation across council areas. Plans for a council tax increase in bands E-H from next April have also been approved. This is intended to raise £100m to tackle the attainment gap in education.

Speaking at the debate, Bill Alexander, director of care and learning at Highland Council, said these proposed structural reforms would not in themselves improve attainment or close the attainment gap.

“Indeed, I would suggest that some of them could do significant damage,” he said. The analysis for more empowered head teachers and less bureaucracy was correct, Alexander said, but there was no sense in breaking the local democratic link between communities, schools and education services.

“If we wrench education away from the rest of children’s services we will be doing a disservice to children and families. We do need change, but we need the right platform for innovation.”

Considering the proposals, Fraser McKinlay, the controller of audit & director of performance and best value at Audit Scotland said it was not clear what the link was between the stated policy objective and, in particular, the proposed regionalisation.

“The analysis is absolutely sound, but the bit I’m not getting – and I have to say this is something we say in reports about policy implementation quite often – is that I don’t see how we’ve gone from the analysis of what we think the issue is to the solution being regional boards,” he said.

“If it was about collaboration and partnership and all these things there were other ways to skin that particular cat. I think that is the bit we will be interested in, as well as for our part being very interested in following the money.”

The session also heard from Mark White, the director of finance at NHS Greater Glasgow and Clyde health board, who highlighted the challenge of health and social care integration, which is being taken forward by 31 integrated joint boards formed between local government and the NHS – and by a different lead agency model in the Highland Council area.

White said that getting funding into care to get people out of hospital was “a very difficult thing to do”.
He acknowledged the IJBs, which begun to integrate health and social care under partnership agreements from April 2016, were a first step “towards what is an extremely complex solution”.

“I think over time they will evolve. They will either evolve into being legal entities or they may evolve into being the scenario in Highlands, but I think it is a great first step.”

But Alexander said continuing with two organisations would cause problems, whereas the lead agency model of integration at Highland Council meant staff had one boss and one budget “so we can effect change”.

McKinlay argued such reform plans could be helped by longer funding settlements for services.

“We absolutely recognise in health and other places that a settlement of more than one year would help enormously,” he stated. The way in which health boards every year have to land the jumbo jet that is health board finances on a penny piece on 31 March seems to us not be helping if we’re trying to take a long term approach to public services reform.”

Geoff Mawdsley, the director of the Reform Scotland think-tank also spoke at the debate. H said he welcomed the fact that parliament had more leeway due to fiscal devolution, and called for a “quid pro quo” for freedoms for local government.

“My view, and Reform Scotland’s view, is that councils need to be given back control of their council tax. Local councils should be able to say to their electorates that we want to put up taxes and explain why they are doing it.

“That is local democracy, and if we’re not going to move in that direction then quite honestly councils are just going to become administers of central government policy, and therefore they are no longer part of local democracy."

Speaking to PF after the debate, CIPFA Scotland local government section chair Derek Yule said the card vote result showed directors of finance were being more proactive in raising concerns about changes.

He called for government to set longer term policy objectives to help planning. “I think as a profession we are very keen to work with government to help deliver policy objectives, but politicians need to help us in terms of working on a longer term strategy so that proper planning can be done.”


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