Official Report 351KB pdf
Good morning and welcome to the Local Government and Regeneration Committee’s 12th meeting in 2014. I remind everyone to switch off mobile phones and other electronic equipment, as they can affect the broadcasting system. Some members might consult tablet devices during the meeting, because we provide meeting papers in a digital format.
I have no introductory remarks.
No, that is okay, convener.
May I just pass on Sue Bruce’s apologies to the committee? I know that you understand the reasons for her not being here, but she wanted me to convey her apologies to the committee in person.
Thank you—that is much appreciated.
We do a range of things. We have an overall community engagement strategy, which contains a number of tools that can be used by not just the local authority and community planning partnership but groups in the community in engaging with communities on specific issues.
Thank you. You mentioned harder-to-reach groups. The Argyll and Bute Council area includes a number of island communities. Is it more difficult to communicate with them? Do they feel that they are listened to? Have you put in place special arrangements to help island communities to engage?
Our islands are very different. Some are very active and engaged and come knocking on our door for support. We encourage our other island communities to engage. I mentioned the third sector in the context of the harder-to-reach groups, and the sector does some work for us on islands. If we are putting on a significant corporate communications or engagement event, we will do specific events around the islands. A lot can be done by videoconference.
Sally Loudon talked about multiple channels of communication, and there are a number of similarities with the approach in Fife.
You have talked about area committees and engagement on budgeting in local areas. How much community involvement is there in the area committees’ day-to-day work?
The area committees are public committees that have a responsibility to scrutinise the delivery of local services and direct how those services are delivered. The approach to the area committees is to provide a broad platform for local engagement and information about service delivery. As for the wider public’s direct involvement in the committees, the meetings are open to the public, but turnout is probably limited.
I recognise a lot of what Sally Loudon and Steve Grimmond said about community capacity, a place-based approach and community planning. From a finance angle, I will give examples of what we have done in Edinburgh to consult more and get more community involvement in the budget.
You mentioned community planning. Are members of the public involved much in that? Do they sit on the board? At what level do they input? Mr Dunn, would you like to go first?
Perhaps I could let the other witnesses go first, so that I can think about that.
I am happy to answer that. I will also expand on my original answer, if that is okay.
Sure.
I will pick up on some of the points that Steve Grimmond and Hugh Dunn made. We have local area committees, too—we are administratively split into four areas. We also have local area community planning groups, which consist of the local authority, all our community planning partners and the community councils. In some areas, the community councils bring themselves together and then put only a few reps on to the local area community planning group. Therefore, the community is represented through the community councils, but the local area community planning groups are open to the wider public.
Are any members of the public on the community planning partnership board?
No individual member of the public sits directly on the community planning board, although the community councils and the third sector are represented.
There is a way to go on direct public involvement in community planning. No local community representative sits on the Fife community planning partnership board; rather, representatives of the public and third sector agencies sit on the board.
As with the situation that Sally Loudon described in Argyll and Bute, in my area, there are representatives on the board, but they are representatives of community councils and are not there as individuals.
I want to explore some of the answers that have been given so far. In my first question, I will concentrate on participation in local government elections. I am glad to hear that the percentage turnout for elections in Fife Council and Argyll and Bute Council was in the upper 40s and that in Edinburgh turnout was roughly 40 per cent. The national average in the 2012 local government elections was 39 per cent. What is being done to target the areas in your authorities where the turnout is lowest? In particular, I ask Mr Dunn to give examples of the turnout in places such as Craigmillar, Pilton and Wester Hailes. Likewise, are there examples from some of the former mining communities in Fife where the turnout might be low? Similarly, in Argyll and Bute, are there pockets where people do not tend to participate in the electoral system?
Undoubtedly in Fife, there is a correlation—although perhaps not a direct one—between the areas of most significant multiple deprivation and low turnout in recent elections. Our approach to that is embedded in our broader approach to community engagement and community capacity building. In providing support to enable and encourage local communities to articulate their views and engage with council processes, the authority seeks to target areas of greatest need.
We have a similar approach to community capacity building. On participation in elections, we do some focused work through schools to try to engage young people in elections. In the previous local government elections, our lowest turnout area was Dunoon, at just over 41 per cent, and our highest turnout area was Kintyre and the isles, at 50.6 per cent. There is a range, but all the areas are above the national average.
In recent years, we have looked at the substantial increase in the number of postal votes. However, I would like to take your question away for consideration, because my work is not directly linked to that area. I am happy to take the question away and to provide a response within the next week. I will go to the person who deals with the issue day to day and get more detail on it.
That would be grand. Thank you.
I am conscious that I did not specifically answer the question about the Local Government Boundary Commission for Scotland and the issue of a weighting for deprivation in relation to the number of elected members. We have begun to look at that in Fife and, as Sally Loudon indicated, we do not necessarily take the view that there is a direct correlation between an elected member’s workload and deprivation. A number of factors influence an elected member’s workload. Curiously, although the Local Government Boundary Commission has referred to a weighting for deprivation in defining the number of elected members at the authority-wide level, that will not be replicated in the second stage of the exercise, when individual wards will be determined. There is an element of inconsistency in the rationale, which means that in Fife any standardisation of the number of electors for each elected member would not reflect inequalities.
I welcome the witnesses’ comments, particularly on the Local Government Boundary Commission for Scotland review that is taking place. When we talk about the accountability and autonomy of our public bodies, it is important that we make a direct link to electoral accountability—we need to look at that.
Mr Dunn, you said that you started the process with communities in September. Is that right?
That is correct. Our budget proposals usually go to the finance and resources committee towards the end of September, which signals the start of the budget consultation process. Various leaflets are produced, information goes on to the internet and emails are sent to groups for which we have contact addresses asking for questions, queries and responses. We then go round the wards in the city and have public meetings at night at which the public can ask questions. There are usually presentations on the budget that set out the general thrust of the council’s financial position and the proposals. The public are told that they are welcome to come back with responses to the proposals by Christmas and that we will respond to them. The budget will then be drafted by the administration towards the end of January so that it can be debated and approved by the council, usually in the second week of February.
Do both council officers and elected members attend the public meetings, or just council officers?
Usually, the meetings are attended by council officers and the local members, plus, probably, the finance convener or vice-convener. I think that I need to say that attendance can be mixed, and that is why we need to look at other means and modes of communicating with stakeholders.
The process in Fife commences at the back end of the summer with a full, broad-based consultation using a variety of channels. At that stage, we seek to engage with communities both directly through public meetings and online engagement and through feedback opportunities so that people can vote on different options and priorities. The intention at that stage is to share as much information as possible about the range of choices that the local authority has to make in reaching a final budget. We do that both thematically—seeking local views on, say, education or local service delivery—and on the basis of looking at the range of services that are provided and some of the choices that need to be made.
Over the years, our budget consultation process has started at different times. It typically starts between October and the end of November, and we do all the things that Steve Grimmond and Hugh Dunn outlined. In addition, we do web chats with the leader of the council. The first one that we did was really successful, but there were not as many participants in this year’s budget consultation exercise, so we are having a look at that.
One of the main issues that we have been presented with, mainly by local authorities, is the spending discretion that local authorities have and their lack of powers to raise their own finance. In particular, some complaints have been made about the freezing of the council tax and the settlements that have been made over the past seven years.
I think that, at our meetings, people generally look at the quantum—the total amount of cash. In the recent round of discussions, there were some questions about the cumulative effect of the council tax freeze and how much extra money could have been generated otherwise. The public generally do not look at how much comes from Government grant, how much comes from what used to be non-domestic rates and how much comes from council tax. They just look at the quantum, so generally we show the total resources that the council has. However, in the last round of discussions, some questions were asked about the cumulative effect of the council tax freeze over the period and the total level of resource that might have been provided otherwise.
As a matter of curiosity, Mr Dunn, who expressed those views?
It was just the odd comment that came in through the consultation. The odd question was asked about the cumulative effect of the council tax freeze but, as I said, people tend to look at the quantum of resource. In Edinburgh, people look at the quantum of almost £900 million, and we outline that that is the available resource. We do not tend to split the resources into what comes from Government grant, council tax and what used to be non-domestic rates and is now part of the revenue support grant. The odd question was asked about that, but generally people are look at the quantum of resource that is available now and is likely to be available going forward.
Given the limited flexibility to raise additional income—the situation is compounded by the effect of the council tax freeze, as there has not been a debate locally on the merits and demerits of taxation through that route—the consultation that we have undertaken on our budget setting has tended to focus on a fixed envelope of resource and on the choices to be made within that envelope. I would not suggest that the public has raised the issue to a significant extent, although it is certainly true that, in some of our face-to-face consultations and in responses around making choices about investment, people have said that they would prefer to apply more resource to the priorities rather than have to make increasingly difficult choices between them. That suggests that there is a desire for a fuller debate that looks at not only the resources that are raised locally but how they are applied. The budget process does not allow for such a debate, because the resources that are raised locally are limited.
There is much talk about the limitations on councils to raise finances. The issue seems to be viewed entirely through the prism of locally based taxation, but local authorities apply a range of charges, be they universal charges for parking services or charges for services such as social care packages. Local authorities currently generate income through means that go beyond local taxation.
That is true. In Edinburgh, we are producing a comprehensive charging policy for our services. The policy sets out the general principles—we did not really have such a policy previously—and will go to the sub-committee this month. You are correct that we charge fees for certain services.
Mark McDonald’s comment is true. In Fife, 13 per cent of the resource is generated through income and fees, so although it is still a relatively small proportion of the resource that is available locally, it is certainly part of the consultation exercise, because we can still pull some levers.
Anne McTaggart has a wee supplementary.
Can you think of any other tax or way of supplementing your income? Some of the charges and so on that you have power over have been mentioned, but are there any others? I am thinking about tourism, for example.
Mr Dunn, there was a proposal from Edinburgh a while back.
I was just going to mention that there was a proposal for a bedroom tax for hotels.
The phrase “bedroom tax” throws up other connotations.
That is why I called it tourism.
The proposal was for a tourism tax—a levy on hotel rooms in the city. There was a debate about the fact that we spend a lot of money on things such as hogmanay and whether the city should, through a tax on hotel rooms—if I can call it that—get some benefit back from the payments that it makes.
Has Argyll and Bute Council thought about that? Have you thought about any other means of taxation that would be of benefit?
As we said in our submission, we would need to look at the costs and benefits of any proposed increase in taxation powers. A tax on hotel rooms could act as a disincentive in some of our tourism areas. It might be fine in a very buoyant tourism area, but in some of our areas, tourism can be quite fragile, so we would need to ensure that, if such a tax were applied across the board, it did not act as a disincentive. Alternatively, we might choose to apply it in certain areas and not in other areas.
Before I bring in Stuart McMillan, I have a few questions on the same topic. Elsewhere, local authorities have the ability to establish their own companies. Should our local authorities have some flexibility in that regard? For example, it is only in recent times that local authorities have had the ability to move into electricity generation. Would it help you guys if you could establish your own companies and plough money back into public services?
The City of Edinburgh Council has a range of council companies and arm’s-length external organisations such as the EDI Group, which does property development, and the Edinburgh International Conference Centre. The key thing when it comes to setting up a company is to have a robust business case that outlines the reasons for setting it up and the objectives that are sought. It is also necessary to put in proper governance arrangements that show that the council has control over what is happening.
Do any of your companies make any profit? I am well aware that exhibition centres do not make profit.
Some of the companies have made profits. The property downturn affected our property companies, but they are coming through that and there are signs of recovery. We own 91 per cent of Lothian Buses, which is a very profitable company. In the last financial year, the council got a £3 million dividend from that.
You are lucky guys in that regard, but we will not move on to buses.
Similarly, I think that we have a reasonable degree of flexibility in our ability to set up arm’s-length companies and joint venture vehicles that we can develop and from which we can generate income. Our most recent arm’s-length vehicle is in the area of waste management and energy generation. Over time, we anticipate that that will generate income that will come back to the authority for reinvestment.
It would be interesting to get more detail on that endeavour, because some members found out about a similar venture when we were in Malmö in Sweden.
I will give an example of an area in which flexibility would be useful. At present, if the council wants to invest in a company through shares and loans, we cannot do that through borrowing, because it is not treated as a capital asset. If that avenue were opened up to local authorities, that would be extremely helpful, particularly in relation to investing in regeneration and economic recovery.
Good morning, panel.
Who is going to take that first? Ms Loudon?
The question should be referred to the two areas that have arm’s-length organisations.
You keep us right, Ms Loudon.
There is an issue in there. In Fife, predominantly we have set up arm’s-length trusts, which are significantly supported by the local authority. They are not profit generating; generally, they are income sapping. We have wrestled with the issue of having the benefits of almost single-focus trusts, which can focus on an area of activity, whether it is sport or culture, and ensuring that there is a degree of continued democratic oversight.
I agree. As I said in my previous answer, it is also about ensuring that the governance arrangements are strong. If you are giving funding, your service level agreement, or whatever agreement you have with the organisation, should show what you expect for the money that you are putting in and what key outcomes you expect from the outside organisation.
That is very helpful. I appreciate that there will be different methods and models around the country, so I accept that people cannot answer for any other local authority area. Your answers have been helpful so far.
The budget process has evolved. Last year, we went out in September—
Was that the first year?
That was the first year that we managed to get the budget out in September. The previous year, we got it out in mid-November, which although it was an improvement on what we had done before, was not ideal because a lot of the community groups do not hold meetings in December, with Christmas coming up and so on. It was good that we got it out with six weeks’ consultation before Christmas, but a lot of people were coming back and telling us that there are other things happening, with children and so on, at that time of year.
So it is a recent initiative.
Very.
Mr Grimmond, you mentioned that in Fife the second phase of the public consultation takes place online. Not everyone has access to the internet or wants to do things online. How did you have discussions with people who are not online?
Sorry. I must have misrepresented the situation. I intended to say that the second phase—the draft administration budget—is consulted on both face to face, through a number of public meetings, and through online information. There are multiple channels.
That clarifies the matter. Thank you.
I ask for very brief answers, please.
Looking at the budget going forward, I think that one of the big issues is the demographic issue. That puts on-going pressure on councils each year.
There is no doubt that demand is rising and resources are declining. In Fife, we calculate that, over a four-year period, there would be a £92 million gap between the rising demand and the diminishing resources if we were to continue to do things exactly as we do them now. There is a recognition that it is reasonable for us to expect to deliver continuous improvement and on-going efficiency, so an element of the gap should be addressed through an efficiency target within the authority—that can deliver part of the answer. However, it is unlikely that it will be able to fill the whole of the gap, which will need to be addressed partly through the quantum of resources that is available or a transformation of the way in which services are delivered.
I echo Mr Grimmond’s comments and add a couple of points for context. Between 2010 and 2013, we faced significant reductions in our budget. Over that period, we took either 10 or 15 per cent out of each of the services’ overall budgets. The vast majority of that was done by making efficiency savings, and performance levels have remained the same or have improved.
As the panel might be aware, a number of committee members went on a fact-finding visit to a number of European authorities. One of the interesting things that we considered was the number of local authorities—or municipalities, as they are referred to—compared with what exists here in Scotland.
The evidence is in the document from the commission on strengthening local democracy in Scotland, which shows the number of local authorities across European countries and how Scotland stands out as having fewer local authorities per head of population. There is one country where there would be seven or eight different local authorities in an area the size of Argyll and Bute. The evidence that that is a good thing is that local election turnout is greater in those other countries than in Scotland.
Perhaps I could rephrase the question slightly, then. Are there challenges faced by councils because of the scale of the local authority areas that they serve?
The geographic spread of Argyll and Bute is a huge challenge. As I said earlier, the overall strategic organisation is split into four administrative areas, but we have 23 inhabited islands and three peninsulas. Each of those areas is very different in nature and the solutions for service delivery and economic regeneration are different in each of them. One could conclude that having more local local authorities would help in that regard, but there would still need to be a mechanism for dealing with some of the more strategic issues that an area such as Argyll and Bute faces.
Convener, the international comparisons that are being identified through your committee and through work from elsewhere are illuminating in enabling a debate to take place. There are a variety of solutions. Without answering the question whether there should be more or fewer local authorities, I can say that we recognised that, to be responsive to communities in Fife, we needed to set up a mechanism—the seven-area committee mechanism that we have set up—to enable more localised engagement, which cannot be done when an authority is attempting to engage with more than 300,000 citizens.
I do not think that I can really add much. There is a lot of research that members can look at to make decisions about the services that they want councils to provide and about the appropriate size of local authority to deliver them.
I ask you to be very brief, Mr McDonald. I am aware that we are coming up for an hour of evidence, and I do not want to keep these folks here all morning. A number of other folk wish to contribute.
I appreciate that, convener. I will skip the question about powers, because we have dealt with it somewhat.
We have a couple of examples of what we do with groups that are harder to reach. Undoubtedly an issue with a lot of consultation is that a lot of the usual suspects come forward. We try to put in mechanisms to reach other people, and the example that I gave of the integrated children’s services plan, which covered very young children and nurseries all the way up to parents and other service users, is an attempt to get beyond the usual suspects.
I have two things to add to that. It is about using multiple channels. The risk with the more traditional channels, such as public meetings, is that they tend to be populated by the usual suspects, although that is not always the case. As we diversify the ways in which we try to reach people, whether by going online or increasing the use of social media and so on, we find that the communities that are more likely to use those routes are broader.
As part of the budget consultation exercise, we have always been keen to go back at the end to show people the proposals and changes that have been made. Last year, we put a proposal to cut the number of additional police officers for 2014-15 out for consultation. That got changed. Proposals on additional support needs were also changed. Members might have heard of the Edinburgh guarantee. It had one-year funding the year before, but we have mainstreamed the funding because of information that we got back from respondents. That shows that things can be changed through engagement and we are keen to show people that, if they engage in future, they might be able to change some proposals.
I want to go back to the first question that came up about voting. Do the local authorities have information from the census and the population of the area about the numbers of people who are not registered to vote? Is there any information about a correlation between people who do not vote, and who are not registered to vote, and areas of high deprivation? John Wilson touched on that point, and I bring it up as someone who has been campaigning on doorsteps and going up and down streets in areas that would be described as areas of higher deprivation, and finding that house after house after house was not on the electoral register. Is work being done on that?
Ms Loudon can go first. This is a complex question.
It is.
The witnesses might well want to submit further evidence on what the valuation boards are doing, if their area is covered by a valuation board.
I would appreciate it if we could submit some information to the committee on that, because the issue is fairly complex.
Likewise, if that is acceptable.
The assessor has worked on the issue, but I am happy to take the point back.
I had a funny feeling that that would be the case but it would be extremely useful if the committee could get the information that Mr Rowley has requested.
I think so, convener. Perhaps, once we have that information, the committee could decide whether more work needs to be done in that area if we are serious about considering the correlation between deprivation and not being registered to vote.
There is a debate to be had about the role of local government and the services that it should provide. I think that the areas that you mentioned are covered quite widely in the council submissions—including the one from Glasgow City Council—that the committee received.
I will play devil’s advocate. Mr Rowley has pointed out the European situation. In Denmark, for example, local authorities deal with health at county level; the municipalities deal with social security issues. Would it create a more joined-up approach if you had those powers? Mr Dunn? You are looking to your colleagues from the Society of Local Authority Chief Executives and Senior Managers.
Yes. Health and social work services will be integrated from April next year. That is already starting to happen. I hope that we can deliver synergies from that, which will enable us to free up resources for front-line services.
If we step back and look at the international evidence, there is—without a doubt—an argument for a stronger link when we consider the fiscal autonomy between the resources that are raised locally and the resources that are deployed locally. That would seem to be a strong line.
Ms Loudon?
I think that Mr Grimmond has answered the question.
I notice that in Scotland only 10.7 per cent of local government revenue is from local taxation. The United Kingdom average is 12.7 per cent. In Scandinavia and Holland, health boards—or their equivalent—are controlled by local authorities. Would you wish to have that control in your areas in order to increase your revenue streams?
Again, I am not ducking the question but I think that there is a lot of evidence in the commission’s interim report that will help the committee in its deliberations.
What evidence from the interim report do you think will help the committee?
The evidence in relation to place, local fiscal powers and local accountability.
That is one of the reasons why you are here today and why you were asked about your islands.
Health and social care integration moves us into interesting territory, because the creation of integrated boards can be viewed either as bringing elements of health and social care for the first time into an arena that involves more democratic accountability through local government or as a drift away from direct accountability into a different vehicle that is slightly at arm’s length from health bodies and local government. The process of developing health and social care integration raises wider questions about the governance of wider public services—not just health and local government services.
Anne McTaggart has a wee supplementary.
I give a wee reminder of an issue that arose when we did the fact-finding visits. I am somewhat concerned that we are not really worried about participation rates and turnout at elections. The places that we visited have a turnout of 70 per cent, whereas our rate is maybe 40 per cent or maybe not that at times. The rate in Europe is nearly double ours. I am not saying that that is all the witnesses’ fault, but we should all be concerned about that.
Steven Grimmond did not answer my question. Does he think that the health board should be under Fife Council’s control?
I answered the question as far as I am prepared to answer it.
All right—thank you.
That was a chief executive’s diplomatic answer.
I will take the accountability issue a step further. Your colleagues from East Lothian Council say in their submission that local accountability can be achieved only when councils have greater control of finance raising. Is that true?
Who wants to go first? I call Mr Dunn, the finance man.
I understand what is being said; the debate is about what is collected locally and about showing a link between services and the council tax or whatever is collected locally. I see the point that the council makes.
There is a direct relationship between the income that is raised locally and the funding that is deployed locally. Moving towards that would seem to be a good thing.
In community consultations that we undertake, someone usually raises the issue of the amount of money that is raised locally. There is a misconception that the council tax is the full amount of funding that is available to a local authority and people are surprised when we explain to them the percentage of our overall funding that the council tax forms.
I will remain on the subject for a wee second. In Denmark, we had interesting discussions about the overall total that is raised locally, which is a standard amount. Local authorities there must negotiate among themselves about whether they want to raise or lower their local income tax. Those debates seem to work and agreement is reached. How easy would taking such an approach be in Scotland, given the difficulties that COSLA has recently had in dealing with changes to the distribution formula on the basis of the census?
Some such questions are political. That is why we are all being—
As chief executives, how easy do you think that it would be to have such discussions and reach agreement at SOLACE, rather than COSLA?
We could have the debate at SOLACE and SOLACE could give a professional view, but the politicians would need to make the decisions at COSLA. Until now, the debate in COSLA has been about the use of the distribution formula, whereas some of the evidence to the committee is about local government finance, which is a much wider issue than just the distribution formula. I suspect that that is what the committee wants to focus its attention on.
In Denmark, there is still a top-line figure and negotiation still goes on. We can talk about the distribution formula or other things. However, we do not seem to do particularly well on negotiation here. Would it be easy for SOLACE to come up with the professional advice to give to politicians on such negotiation?
SOLACE could have a view as a professional body, but directors of finance would have a view as a professional body as well. In addition, the COSLA officers would give professional advice to the wider COSLA membership.
I think that there are two parts to your question, in that there is always likely to be an element of national distribution and then an element of local flexibility.
I do not think that this is about national distribution, because that is somewhat different. In Denmark, a top line is set in terms of the amount of money that local authorities can raise themselves. There is then a negotiation between the municipalities, because some might want to raise or lower their level of local taxation, but in order for them to do so another municipality has to agree to lower or raise the level of its taxation so that the top-line figure remains the same.
I find it difficult to answer the question on that.
Okay. Do you have a view, Mr Dunn?
I would want to study the model before I could comment on it.
Right—fair play to you. It was worth a try.
The council does not have a position in terms of a constitutional commitment, but it is COSLA’s view that there should be a constitutional position for local government. The main issue for us in Argyll and Bute is to have at our disposal all the levers that we can get in order to increase the population and improve the economy. Any powers that can be given to local government to allow that to happen would be welcomed by the local authority.
However, what one hand giveth, the other hand can take away at any point unless you have that constitutional place.
Absolutely.
I have little to add to Sally Loudon’s answer, but I think that a stronger constitutional basis for local government would make it stronger going forward.
I support what has been said.
Okay. I thank you very much for your evidence. We move into private session.
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