“Report on Local Government Finance Inquiry”
The next item of business, for which we are extremely tight for time, is a debate on motion S3M-6318, in the name of Duncan McNeil, on the Local Government and Communities Committee report on local government finance. I call Duncan McNeil to speak to and move the motion on behalf of the Local Government and Communities Committee in no more than 11 minutes, please, convener.
15:05
I am pleased to open this debate on behalf of the Local Government and Communities Committee. The situation facing local government was described by Professor Alan Alexander, one of our witnesses at a round-table event, as the “perfect storm.” We have increasing demand for the services that councils provide, an aging population demanding better social care, higher demand for homelessness and other welfare support services, increased pension contributions and equal pay settlements. If that were not bad enough, it seems that even the weather is against councils, as they have just come through the worst winter that we have seen in many years and have had to endure significant flooding problems in parts of the country. That is set against a situation in which local government is unable to raise council tax and has had little or no increase in funding centrally, with council tax becoming more difficult to collect in a recession and the income raised from building warrants being on a downward spiral.
Against that backdrop, in June last year we announced our inquiry to ensure that there was a wider understanding of and debate on the financial pressures on local government. We began taking evidence for the inquiry in September 2009 and published our report in January of this year. I thank everyone who gave evidence to our inquiry, all the members of the committee and our clerks and researchers for their hard work, patience and support.
During the inquiry, there was a question about whether problems had arisen as a result of the recession or whether the recession had just exaggerated existing financial pressures that should have been addressed. Some of our other work, such as our inquiry into the debacle that is equal pay, suggests that some problems are of the councils’ own making. However, whatever the basis for the current situation, it is clear that different choices will have to be made and that there will be no quick fix.
We recently wrote to all 32 local authorities to find out what the up-to-date position is with their finances. The 27 responses that we received showed that the situation is pretty bad at the moment and likely to get worse over the next few years. Our inquiry report anticipated that, so we looked at how those financial challenges could be addressed. I think that everybody realises that the scale of the financial issues is such that they cannot be addressed merely by looking for efficiency savings. However, finding efficiency savings is important, and authorities should constantly strive to be more efficient and provide value for money.
Local authorities and trade unions told the committee that a lot of inefficiency had already been driven out of the system. However, some other witnesses, including Audit Scotland, were more sceptical, with some believing that the necessary scale of efficiencies could be achieved only with greater regulation. The committee nonetheless concluded that the way forward was to undertake more work on benchmarking to improve performance and efficiency. That is now being progressed by the Scottish Government and the Society of Local Authority Chief Executives and Senior Managers—we welcome movement in that area.
The other huge issue relating to efficiency savings is shared services. Just before we concluded our inquiry, Sir John Arbuthnott published his report on joint working and shared services in the Clyde valley, and there was certainly a lot of food for thought in that report. There was concern that local authorities had not done enough of that kind of work in the past and that decisions were being taken now only in response to the financial crisis rather than because of any kind of long-term change in the management process.
In his report, Sir John Arbuthnott said that local authorities
“cannot meet this challenge with short term solutions, such as year on year efficiency savings or ‘salami slicing’ budgets. The Councils and their public and private sector partners need to take a more strategic long term view.”
However, witnesses told us of tensions that can arise when services are shared or centralised. For example, a national scheme to drive efficiencies in procurement might involve a cost to the local economy.
The Arbuthnott report also highlighted a range of supports that the Scottish Government could provide. One suggestion was that the Scottish Government might introduce secondary legislation to smooth the way for interauthority shared services. The Government’s response to our report did not offer a view on that proposal, but it confirmed that work is on-going to see what further could be done. Perhaps the cabinet secretary will take the opportunity today to outline some of that work.
Public services cannot be delivered without staff, but when budgets are tight, questions are inevitably asked about whether big enough savings can be made without impacting on pay and jobs. Of course, none of that is easy. It is never easy for politicians to cut the wages of their voters or to threaten them with the sack. In local authorities, the big issue is that staffing accounts for about 50 per cent of total budgets, so how we achieve savings is a very pertinent question.
From the local authority responses that we received, it is clear that many authorities are looking to shed jobs to balance their books. In the main, they are trying to avoid going down the route of compulsory redundancies and are trying to manage any job losses by way of turnover and not filling vacancies or by voluntary redundancies. However, several authorities indicated that the scale of future budget deficits is likely to mean that compulsory redundancies cannot be ruled out.
The committee fully appreciates that such decisions are difficult. Like freezing pay, reducing staff numbers might seem an attractive option to achieve savings, but we also appreciate that it is not a good idea to cut capacity to the extent that it will be difficult to deliver services in the future. Like all the other decisions that local authorities need to make, such decisions should be made with a strategic long-term view rather than as part of a short-term, knee-jerk reaction, which could have a detrimental impact in the future.
On the need for a strategic overview, I could not agree more. However, did the committee consider whether that should include the ending of some services or whether the savings should be achieved through percentage cuts across services in order to keep a residue for the future?
We did not look at those very detailed discussions, but we believe that it is important that local authorities deal with the issue not just as a response to a financial crisis but as a totality in which they work alongside others.
Using redundancy to achieve savings might deal with one problem by reducing the workforce, but it can lead to increased costs. In fact, one council said in its latest response to us that it would not achieve a new saving for up to two years because of the need to make redundancy payments. That, too, needs to be taken into account. Making public sector workers redundant is a very expensive process.
Another issue that councils need to consider is whether they should charge for services. A number of councils already charge for services, but there is no uniform charging policy across the country. Although we can see that councils are perhaps being pushed in that direction, we agreed with the Arbuthnott report’s recommendation that councils should work together to introduce consistency
“where this does not cut across local priorities, to make this more easily understood by citizens and to avoid a ‘postcode lottery’ for fees and charges”.
The responses that we have received from councils suggest that existing charges are increasing by 2 to 3 per cent and that a number of councils have introduced, or are thinking about introducing, new charges.
As I have said, we wanted to look at how local authorities could deal with a looming budget crisis. As our report outlines, there are various ways in which councils can make—and are making—savings, but in the round-table discussion Professor Alexander highlighted the significant issue of the lack of flexibility that is available to local authorities. He said that when the recession bites, they will have to make economies where they can rather than where they would choose to. Many in the third sector would claim that that is happening already and that they are paying the price. That would be considered a short-term decision.
The committee is acutely aware that the choices on services that local authorities make now will have a significant impact on the people of Scotland, and that we will all have to live with those consequences. As Professor Richard Kerley said:
“until we know what we want local government to do, we cannot know what measure of money it needs to collect in order to do that.”—[Official Report, Local Government and Communities Committee, 1 September 2009; c 2207.]
The member will need to conclude.
Right.
There is no evidence that local authorities or the Convention of Scottish Local Authorities are having that debate. Do we want local government or local administration? Do we want oversight or regulation, shared services or stealth charges? The debate needs to include the communities that councils serve.
I move,
That the Parliament notes the conclusions and recommendations contained in the Local Government and Communities Committee’s 2nd report 2010 (Session 3): Report on Local Government Finance Inquiry (SP Paper 377).
15:16
I welcome the Local Government and Communities Committee’s report, which offers a wide-ranging assessment of the potential impact of the current economic situation on local authority finances and the challenges that now face local government. I am sure that as well as informing today’s debate, its conclusions will provide valuable input into the work that is being done by others in preparation for the next spending review. The Government will give careful consideration to the issues that are raised in the report and to the points that Mr McNeil made, some of which I will comment on specifically.
The report also contributes to the wider discussion about the formulation of what I think Mr McNeil called the strategic perspective on public service provision, which will be informed by the Finance Committee’s on-going inquiry into public sector efficiency and the independent budget review that I commissioned earlier this year. I see the discussion that we have over the next few months as being fundamental to the creation of an agreed strategic perspective on how to tackle many of the difficult challenges that exist in that area.
I will cover three areas. First, I will comment on the committee’s recommendations. Secondly, I will set them in the context of the local government settlement. Thirdly, I will look ahead to the challenges that now face us on public expenditure.
In its report, the committee identified a number of key issues, which I broadly agree represent the major challenges that we face. They include the need for sensible but challenging efficiency savings; the importance of ensuring quality front-line services in the face of challenging budget numbers; the issue of what happens to pay, which makes up such a significant proportion of local government costs; issues around outsourcing, charging and local taxation; the impact on partners, particularly in the third sector; the need for innovative funding solutions to facilitate economic development; and the need to take a long-term strategic view as we consider the way forward. That represents a strong agenda for us to concentrate on. Indeed, in line with the concordat, we are already discussing all those issues with our local government partners.
I note that many of the recommendations that are contained in the committee’s report are directed primarily at COSLA and local authorities, so I will concentrate my remarks on those recommendations that are directed at the Scottish Government.
First, the committee drew attention to the risk that minimum efficiency standards could become the norm. Instead, it recommended that greater use should be made of benchmarking and that the Scottish Government and COSLA should undertake a review of benchmarking. Since the first year of formal efficiency programmes, local authorities and the public sector as a whole have exceeded minimum targets. Following joint work with SOLACE, a timetable has been created to establish benchmarking arrangements during June, which will be subject to analysis and review during the rest of the year.
As Mr McNeil mentioned, the committee sought information on what action the Scottish Government intends to take on the suggestion in the Arbuthnott report that secondary legislation could smooth the way for interauthority shared services. We have already met the councils that are involved in that, and they are considering what further action, including legislation, might be required. Once we know that, we will work in partnership with them to address any issues or barriers to collaboration and sharing across the public sector.
The committee recommended that pay parity and best value in the third sector should be examined. The third sector has a vital role to play not only in delivering services but through membership of community planning partnerships. A central point of constructing community planning partnerships was to ensure that third sector organisations are represented on them and have an input into the decisions about the design, delivery and funding of local services. The third sector will have clear and direct access to those deliberations and discussions. We will, of course, continue the partnership that has already been established between COSLA, SOLACE, the third sector and the Scottish Government to assess and consider the involvement of the third sector in many of those aspects of decision making.
The committee asked for better information on public sector employment. Official statistics already provide detailed disaggregated information. We are currently evaluating the results of a consultation that concluded in March 2010 and included a question on the employment of arm’s-length organisations that are wholly owned by councils.
The committee asked whether the council tax freeze, which is now in its third year, will continue in 2011-12. The freeze has provided welcome relief to hard-pressed households across Scotland, and we certainly intend to continue to provide relief on that basis in 2011-12. How we do so will be an important part of our deliberations on the 2011-12 Scottish budget.
The committee asked for more flexibility in business gateway contracts in this challenging economic climate. The business gateway board has already agreed in principle to consider proposals that will deliver that sort of flexibility with a view to adopting them shortly. I welcome the progress that has been made on that.
In its recommendations, the committee asked for updates as work progresses on a business rates incentivisation scheme and tax increment financing schemes. On business rates incentivisation, I can report that the Scottish Government and COSLA are producing a scheme that is intended to come into effect from April 2011. On tax increment financing, I can report that a number of schemes are in preparation and the Scottish Futures Trust is in detailed discussion with the councils involved.
In these challenging and difficult economic times, it is important to set the issues that we are considering today in the context of what has been achieved so far in support for local government. The Scottish Government has provided local authorities with funding of £12 billion in the current financial year, and a total of £35 billion during the period 2008 to 2011. In each year between 2003-04 and 2007-08, the share of the Scottish budget going to local government fell. We have delivered on our commitment to reverse that trend. The share now going to local government has risen year-on-year from 33.4 per cent in 2007-08 to 34.1 per cent in 2010-11. On a like-for-like basis, the 2010-11 total is £279 million higher than the equivalent amount was in 2009-10. All that is in spite of the fact that our 2010-11 budget is £500 million less than we anticipated we would have at our disposal.
The cabinet secretary is aware that councils are asked to make 2 per cent efficiency savings on their budgets, and they are able to retain those savings. If the Government’s view changes and councils are no longer able to retain those savings, what will that do to the proportion of local government expenditure in the overall budget?
That is, of course, a hypothetical question. The difference between the current Government and the previous Government, in which Mr Purvis’s party was a participant, is that this Government allows local government to retain its efficiency savings. Under the Liberal and Labour Executive, efficiency savings that were made by local government were top-sliced and removed from the local government settlement, so I do not think that Mr Purvis is in a terribly strong position to question the Government’s commitment to embedding local authority savings at a local level.
In the time that I have left, I will look further ahead at the serious challenges that we face in public and local authority finances. We await the outcome of the comprehensive spending review, but the analysis that the Government’s chief economic adviser published last month demonstrated that the likelihood is that the departmental expenditure limit will be cut by 3 per cent per annum over the next four years. That will pose major challenges for the funding arrangements in Scotland, and we will work with our local authority partners to ensure that we take all the steps that we can to protect front-line services; that we deliver the efficiency agenda, which is essential in the public finances at this time; and that we concentrate on designing public services that meet the needs of their users. That is the shared ambition of the Scottish Government and local authorities in Scotland, and it is a task to which we are all entirely committed. In a very challenging financial situation, we will work with local authorities in Scotland, informed by the report of the Local Government and Communities Committee, to deliver the public services that the people of our country have a right to expect and a set of services that they deserve.
15:25
I congratulate Duncan McNeil and the members of the Local Government and Communities Committee on undertaking an inquiry into local government finance and on producing such a helpful document at the end of their deliberations. I also thank the clerks of the committee for steering the members through to their considered outcome. From identifying benchmarking as the best way in which to improve performance and efficiency to asking the Scottish Government what action it intends to take in relation to the Arbuthnott report’s suggestions on shared services, and from recognising that there are other ways of holding down costs other than freezing or cutting pay to criticising forcefully the process of e-auctions in the awarding of contracts for social services, the report has been a worthwhile exercise.
Above all, the committee has been helpful in asking for a focus on the priorities that our councils need to set in order to ensure that front-line services for our local areas and vulnerable communities’ needs are not endangered. The starting point for that is a time when local government has been given a standstill budget. Although the Scottish Government’s own budget is going up by £1 billion this year, the SNP’s cuts are happening now. We all know that, as a direct result of Mr Swinney’s decisions, jobs are being cut, charges for services are increasing and previously eligible people are being excluded from services.
On Monday’s “Newsnight Scotland”, however, the cabinet secretary gave a good impersonation of a deserter fleeing the battlefield, so keen was he to abandon his responsibilities for protecting front-line council jobs in Scotland. Mr Swinney may dodge the questions on “Newsnight Scotland”, but everyone knows that the demands on local government have increased and there is not enough funding to meet them because of the cabinet secretary’s funding allocations. We saw in his interview that the Scottish Government is in denial about the cuts that are happening now in local government and the role that it has to play in them. Rather than address the actual situation, Mr Swinney continues with the pretence that was established between the Scottish Government and COSLA in their Alice in Wonderland concordat.
In spite of claims to the contrary, there is clearly a mismatch between the Scottish Government’s claims that it has provided enough funding and local experiences of classroom assistants being laid off, pensioners being charged more for services and people being told that they no longer qualify for previously free services. The SNP may insist that the council tax freeze is fully funded, but even if that were true—which I contest—the Government is not adequately funding all the additional responsibilities that it has passed on to local government or taking into account the additional pressures and demands that have been created by the recession.
Can Mr McMahon explain to Parliament the consistency between the line of argument that he is pursuing and the comments that Andy Kerr made overnight, which called on me to implement the cuts in the 2010-11 budget that will be announced by the Conservative and Liberal Government on Monday?
I do not believe that there is any inconsistency. Andy Kerr asked the cabinet secretary to be honest about the decisions that must be made now, instead of deferring them, as Mr MacAskill asked his officials to do, until a time that was more beneficial to the SNP.
Aberdeenshire Council, City of Edinburgh Council, Dundee City Council, Falkirk Council, Highland Council and South Ayrshire Council have all asked publicly for the pressures on them to be eased and for the council tax freeze to be reviewed. The fact is that those who are hardest hit by the recession, and by social exclusion generally, are those who benefit least from the council tax freeze, yet Mr Swinney’s response to the committee’s report shows that he intends to do nothing to address that.
The Institute for Fiscal Studies has said:
“the gains from a freeze in council tax are greatest as a percentage of net income for the middle of the income distribution ... The largest cash gains go to the richest households, however, as they tend to live in larger properties with the largest council tax liabilities.”
When I challenged John Swinney that Scottish ministers, rather than people on lower incomes, are among those who benefit most from the council tax freeze, he argued that that was fair enough as ministers’ pay had been frozen. Rather than worry about poor Mr Swinney having to make do on a cabinet secretary’s meagre frozen salary, I point out that the Chartered Institute of Public Finance and Accountancy believes that another consequence of the council tax freeze is that
“local autonomy has effectively been limited”
and
“accountability has been impaired by this national arrangement”.
CIPFA also says:
“Continuation of a national arrangement to freeze local taxation undoubtedly impacts adversely on local accountability.”
It estimates that
“the council tax freeze has significantly impacted upon the gearing effect and that the balance of funding between local taxation and Scottish Government grant is now 85% to 15%.”
In light of all the information that is available, when every commentator, trade union and financial expert can identify that autonomy has been eroded, and when cuts of more than £300 million are threatening the jobs of more than 3,000 local government employees because of his current budget, let alone what we may face in the future, only in concordat wonderland could the cabinet secretary argue that he has provided a good deal for local government.
Mr Swinney’s glib responses to the report’s recommendations clearly indicate that he has no grasp of the reality facing our local authorities and no idea of how to address the problems that they face in the future.
The member needs to wind up.
Like the committee, I welcome the fact that Audit Scotland is undertaking a review of the achievement of efficiency savings, as we may get some hard facts on the true picture in respect of cuts and savings rather than the Scottish Government and COSLA’s self-assurances and mutual back-slapping.
The committee is—
I am sorry, but the member is out of time.
15:32
I congratulate the Local Government and Communities Committee on a very thoughtful report. Given that the Parliament spent the first two years of this session dividing endlessly on local government finance and failing to reach a consensus, it is a tribute that, as far as I can tell, the report was unanimous. Achieving any form of unanimity on local government finance is something that eluded the Conservative Government in the 1980s and the current Government, and I expect that it will not be easy to achieve in the future.
An important issue that has not been touched on in the debate is that, although tax policy and issues such as the appropriate level of allowances and the appropriate tax rates were quite heavily considered in the recent election campaign, the method of taxation was not considered to a great extent. A factor that has bedevilled the debate on local government finance for many years has been that it has been a debate about the system of taxation rather than about the balance between taxation and spending. I wonder whether we will make any progress on local government finance until we can get to a consensus that everyone can be happy will last.
At present, we have no idea whether the current system of local government finance, be it the council tax or the proportion of revenue coming from central Government, will still be in place after the next election, because there is such a significant disagreement between the parties in the Parliament on the appropriate balance. We need at some point to get to a position of stability if we are going to ask local government to take, as the report indicates, a more strategic overview rather than simply reacting in the short term to events.
It is difficult, and I think that the report gives due regard to the fact that it is difficult, to consider local government finance without looking at public finances more broadly. The cabinet secretary mentioned the United Kingdom’s public finances, but equally important is the evidence in the report about the public finances at a local authority level; I was struck by the example from the City of Edinburgh Council. The report makes some fair points—I have seen examples of these issues throughout the country—about reduced income from section 75 contributions, on which many councils have become quite reliant; reduced income from building warrants; asset sales raising much less than they did; and, of course, reduced income from interest for cash held on deposit. Those issues have all had a significant impact at local level.
The council tax freeze has been debated at some length and will, I suspect, be debated further. I understand from the cabinet secretary’s response that he is committed to extending the council tax freeze to 2011-12, but not necessarily to delivering it in the same manner as it has been delivered for the past three years. It would be interesting to get some detail on the specifics of how a council tax freeze might be delivered next year.
I was struck by Michael McMahon’s argument for the equity of the council tax freeze. We have in the past heard arguments against the freeze on that basis from members on different sides of the chamber. If we accept that the main beneficiaries have been the middle earners, and that the biggest beneficiaries in cash terms have been the highest earners, that proves that in some way—not necessarily a perfect way—council tax is related to income. As the council tax benefit system appropriately deals with people at the lower end of the income scale, and as those at the higher end tend to live in higher-value properties, there is an element of progressiveness in the council tax system, which has not always been acknowledged by its opponents. Anyone who chooses to argue against the council tax freeze because of its impact on various income groups should bear that in mind.
An interesting theme in the report is the importance of benchmarking between councils, on which greater emphasis must be placed. We need to ensure that, if there is benchmarking between councils, and perhaps within councils and against other public authorities, the information is not retained solely within councils. To be useful, it must be publicly available so that everyone can assess whether the local authority is sufficiently efficient, or whether the differences that apply throughout the country can be explained away by some of the differences that benchmarking would throw up.
Benchmarking should not be an internal process in local government that the public do not see. It should be used to drive up performance and allow people to ask the difficult questions about why some local authorities seem to be more capable than others of being more efficient and delivering better services at lower cost.
Duncan McNeil ended his contribution on an important point. He said—I think that I am quoting him correctly—that there is no evidence that either local government or COSLA is debating what the role of local government should be. That is fair comment, but I wonder whether it is a debate that we ought to leave to local government or COSLA. The fundamental issue, which we have not addressed since the creation of the Scottish Parliament, is the boundary between the devolved Government and local government. We cannot simply leave that to local government to determine; there must be a broad and sustained consensus between local and central Government—and, I would hope, between parties—on the appropriate division of powers in that respect.
There are many thoughtful things in the report, and I commend the committee for its work.
15:38
The Local Government and Communities Committee, of which I am a member, conducted its inquiry in order to assess the potential effects of the current economic situation and other pressures on local authority finances, and to identify the key challenges that local authorities are likely to face. It is essential that the Government properly examines the committee’s findings and implements any key recommendations.
I will highlight three key areas in which the Government’s centralised programme has detrimentally affected local government finance. The first relates to funding distribution. The funding allocations that were announced in November last year sparked outrage in Aberdeen when senior councillors threatened that they may have to pull out of the concordat agreement.
Alison McInnes and Mike Rumbles argued in the chamber that no council should be allowed to fall below a collar of 90 per cent of the average funding total. In response, the Government merely stated:
“That is not a characteristic of the current distribution formula.”—[Official Report, 11 February 2009; c 14933.]
Even Brian Adam—whom I do not see in the chamber at the moment—has voiced his concerns about the lack of development on the back of the review of local government funding distribution. He said:
“People in the North-east, including myself, will be bitterly disappointed that this review of the distribution formula has in essence seen no change to the way money is shared between local authorities.”
He stressed his concerns about the disparities between local authorities’ funding, and called for the fundamental review to be conducted independently of COSLA.
The Liberal Democrats have long argued that such wide variations in funding per head of population cannot be right given that all local authorities have similar duties to provide essential services. As a result of such concerns, the Government agreed to a review of the distribution process in 2008. The cabinet secretary accepted all the recommendations in the subsequent report and said:
“Those recommendations will be implemented in time to inform the next local government finance settlement, which will cover the 2011-14 period.”—[Official Report, 26 November 2009; c 21560.]
The second area of the Government’s attitude to local government finance that requires greater scrutiny is that which relates to the concordat. The concordat is intended to represent a commitment to local democracy. However, the bare financial essentials increase local government’s financial dependence on central Government because they increase the proportion of expenditure that is funded by grants. Exacerbated by the council tax freeze, that results in councils becoming even more reliant on central Government grants.
In 2008, Brian Adam claimed:
“The historic concordat is about respect, not central control. It is about partnership, not diktat.”—[Official Report, 11 December 2008; c 13392.]
That was followed in February 2009 by John Swinney’s claim that local government
“sits alongside the Scottish Government as an equal partner”.—[Official Report, 11 February 2009; c 14893.]
However, it is clear that the financial and decision-making autonomy of local authorities has been further hampered by the plethora of outcomes, indicators and targets that the Government imposes on them through single outcome agreements. There are 3,599 targets, outcomes and indicators in the single outcome process. In many contexts, local authorities do not have a clue what is expected of them. Ironically, it was only a few months after taking office that Mr Swinney announced that local authorities complain about the blizzard of targets and measures and said that we should move to a simpler system.
The SNP must stop using local authorities and teachers as scapegoats and start to take some responsibility for its own commitments. It cannot centralise policies only to localise the blame as soon as things go wrong. In the wake of the signing of the concordat, the SNP was full of nothing but praise for local government and gave an overarching impression of co-operation and respect.
Mr Tolson mentioned 3,000 or so targets that are in the single outcome agreements. Does he accept that not all of those relate to every local authority? He gave a total figure for all the targets that exist in any shape or form in single outcome agreements that have been formulated and agreed by the said local authorities.
What the cabinet secretary seems to be saying is exactly in agreement with me. There are all those targets out there in whatever way one wants to look at them.
The final area of the Government’s approach to local government finance that causes me great concern is that which affects the voluntary sector. I am not alone in being concerned about that. John Wilson is a member of the committee who worked in the voluntary sector for many years before becoming an MSP and he is often heard voicing his concerns in the committee on behalf of the voluntary sector.
The voluntary sector has a direct impact on the regeneration of Scotland’s communities. It encourages the growth of Scotland’s economy, the wellbeing of its citizens and the improvement of its public services. The flexible, personal approach that is brought by volunteers, who work within an increasingly professional voluntary sector, holds the key to the improvement of the nation’s social and physical environments.
Will the member give way?
I will happily give way.
Sorry—it is too late. You are too near the end of your speech, Mr Tolson.
All right. Sorry.
In summary, whether in relation to funding distribution, the concordat or the voluntary sector, the Government has failed miserably to perform. One can only wonder what more damage it will do in its final year in office. Ultimately, and unfortunately, it will be those who are most in need in our society—
The member must finish there. We must move on to the rest of the debate.
—who suffer at the hands of the SNP Government’s incompetence and arrogance.
15:44
During the current session of Parliament, the Scottish Government has prioritised Government resources to further Scotland and her economic needs in the face of a tight budgetary settlement from Westminster. I am sure that we can all agree on one thing—that budget settlements will become progressively tighter over the next few years. However, there will be varying opinions in the Parliament about the timing and scale of the cuts that are coming.
I will leave the blame for Britain’s near bankruptcy for another day and try to build consensus where possible this afternoon. We need to get from the debate a working consensus across party lines to deal with the realities that we face as a nation. Unfortunately, one or two members have not taken a consensual tone in their speeches. They will have to be held accountable for that.
It is important to provide a little context for the debate. Local government has had a fair deal from the Scottish Government, which has reversed the trend of reducing local government’s share of Scottish expenditure that was set by previous Executives. The working arrangement that the SNP Government and COSLA agreed in 2007 has also served local authorities well. I hope that that relationship is now mature and enduring enough to work constructively on the challenges in managing the downward spiral of Scotland’s financial settlements that lies ahead.
That is the context in which the Local Government and Communities Committee undertook its finance inquiry. I, too, thank all those who gave evidence in that inquiry, the clerking team and everyone else who helped to produce the report.
There is a great deal of realism in the report. As a Parliament, we must be realistic about expenditure in future years. United Kingdom public sector net borrowing and the UK net debt are overwhelming, but we must manage the consequences in the Scottish Parliament. Scotland will have to take its share of the cuts. As we consider the challenges that our local authorities face, I seek assurances from members on behalf of the people of Scotland that, regardless of the party badge they wear, neither they nor their Westminster MP counterparts will accept cuts that are above and beyond our fair share.
Dr Andrew Goudie’s “Outlook for Scottish Government Expenditure” makes frightening reading. It predicts that Scottish Government departmental expenditure limit expenditure may not recover to last year’s levels until 2022. We know that the task that we face is enormous, and Scotland’s councils have as large a task as any other public body has in dealing with the cuts. Our report makes important points about how the cuts can be managed. We need to make moving towards common ground a priority and work together to help councils to meet the challenges.
I want to ensure that I heard the member correctly before I refer to the Official Report of the meeting tomorrow. Did he say that it is justifiable for Scotland to take a per capita share of any reductions in the UK budget, given that we are in a shared crisis?
I am delighted that the member chose to intervene rather than say something misleading. He should read the Official Report tomorrow. I am talking about Scotland taking a fair share of cuts. Now that Mr Purvis’s party is in government at Westminster, perhaps he thinks—
Is that a new policy from the SNP?
That is a very good question. We will wait to see what the Lib Dem-Conservative coalition does down south as it brings savage cuts to Scotland. Mr Purvis will have to take his share of the blame should that happen.
Let us consider what local authorities can do. A key issue that we considered and a key aspect of the report was shared services. Michael Cook from COSLA admitted in giving evidence that local authorities could have done more in the past with respect to shared services. He said:
“we may not have waved the flag strongly enough to signal our success in driving forward efficiencies”.—[Official Report, Local Government and Communities Committee, 23 September 2009; c 2355.]
The committee’s convener alluded to that. The committee shared the feeling that the financial crisis may have forced the hand of local authorities, but they should have done much of the work on shared services before they got into the predicament in which they now find themselves.
Sharing services provides many opportunities, but it has pitfalls. On the opportunities that it provides, people in Glasgow will not be aware that, if they phone the Glasgow trading standards department, they will reach a call centre in the Western Isles. Services are being shared at the moment, and they could be shared in a range of areas, such as in council tax collection, bin collection and parking enforcement. Such things should have been considered before, but we must focus on them now.
On the pitfalls of sharing services, we have already heard that explaining things to constituents in different local authority areas will be quite difficult. For example, the same officers may levy different parking fines in different areas, or people in one local authority area may have to pay for domestic refuse uplifts, whereas people in another local authority area may not have to pay for them, although the same lorry may collect the refuse. Messages must be communicated to constituents if services are going to be shared.
The one thing that we should focus on is that any efficiency savings will eventually lead to redundancies, which could be significant. It is the rightful place of trade unions and employers to manage how those redundancies take place but, when they do, we in Parliament must be mature and must achieve consensus. We should avoid party politics. When our local authorities and trade unions try to do the best for their workers, services and constituents, the people will not accept members playing party politics.
15:50
The Local Government and Communities Committee began its inquiry into local government finance with a round-table evidence session that not only allowed committee members to ask questions but allowed expert witnesses to challenge one another. As we have heard, what prompted the committee to focus on local government finance was the financial recession, which was clearly going to reduce the resources that are available to local government. However, as the round-table session established, after almost 10 years of year-on-year increases in funding, there was a need to consider what services local government was providing, how they were funded and at what level, and what was sustainable. The principal question from the session was, “What do we want local government to do and how do we fund it?” At the session, Angela Scott from CIPFA noted that some 50 per cent of most local authorities’ budgets goes on salaries. Given that staffing is the most important resource and the biggest single cost in the delivery of services, I intend to spend most of my speech considering staffing issues.
If we accept that staffing is such a big cost, it would be easy to assume that if we reduce pay costs, that will solve the funding problem. However, we know that it is not that simple. For example, the Scottish Government is not involved in pay settlements. Pay is negotiated by the trade unions and local authorities. Further, although a pay freeze can be introduced, it can only ever be a short-term measure. It is not sustainable. A second option, then, is to reduce the numbers of staff. As we have heard, some councils have already started along that path, but there are concerns that there is no strategy behind such reductions. Vacancies will occur and will not be filled, but they will not necessarily be in areas in which the council wants to reduce numbers. Local authorities need to have a framework for their workforce, and non-filling of vacancies needs to fit within that framework.
I will make two further points on vacancies. First, when vacancies arise that a local authority needs to fill, it may be possible to retrain other staff. Unfortunately, though, when budgets are tight, it is often training budgets that are first to be cut. That can be a false economy. Secondly, we all talk—sometimes a little too glibly—about protecting front-line services but, for every staff member on the front line, there is a need for support. It may be possible to reduce administration costs, but they cannot be removed completely or it can be counterproductive. The Scottish Government has a role to play in ensuring that local authorities have a framework for staff to deliver their services. In further evidence to the Local Government and Communities Committee, in a different session, Audit Scotland suggested that some local authorities may not have the expertise to develop that sound framework. Could the Scottish Government assist with that? So far, there have been no compulsory redundancies but, even where redundancy is voluntary, there is a cost; it is not just the redundancy cost that needs to be weighed against the saving but any on-going pension costs.
The committee held a separate inquiry into equal pay and single status agreements, which we debated in Parliament. I think that I am correct in saying that the whole committee was exceedingly concerned about the picture that unfolded: local authorities not acting but sitting back and waiting for other local authorities to act first; trade unions afraid that if they did not get the best deal they could be open to legal challenge; and all the time the women involved waiting years for the pay to which they were entitled.
What was even more frustrating for the committee was that, when we brought COSLA back to give us an update, almost nothing had changed. Yes, there have been further single status settlements, but we have only to look at the refuse collectors situation in Edinburgh to see that that has not been without its problems. When the cabinet secretary was convener of the Finance Committee, he called on the Scottish Executive to sort it out. I hope that he continues to focus on the issue. I raise it today not just because I believe that the women deserve to receive a settlement but because, in the context of a debate on local government finance, the situation represents a cost that is still unknown and therefore still a problem for local government.
What positive measures does the Scottish Government intend to take to support local government to deliver the services that people want and expect? In 2007, the SNP Government introduced a council tax freeze, about which we have heard much today, on the understanding that it was the precursor to the introduction of a local income tax. It has not materialised and the council tax freeze now seems like a bad idea. The money that was used to secure the freeze could have been better used. What will the Scottish Government do next year? Will there be yet another council tax freeze? Furthermore, if the Scottish Government claims that more money is going into local government, why are we already seeing reductions in services and increased costs?
The member’s time is up, I am afraid.
15:56
When looking at the Local Government and Communities Committee report on local government finance, it is important that we recognise that the committee spent a significant amount of time examining the issues. Although other members have already said this, it is worth reinforcing that the committee concentrated its scrutiny on five themed evidence-taking sessions on local government finance. There is no doubt that some of the issues that the report identifies and the recommendations that it makes have relevance for other employers and employment sectors.
I will speak in depth later about the committee’s detailed findings, but it is important to look carefully at the origins of the public sector budgets problem. The committee agreed that the current economic backdrop is highly challenging, to put it mildly. We could say, in the words of the previous Chief Secretary to the Treasury, Liam Byrne MP,
“I’m afraid there is no money.”
In addition, as was the case previously, there is currently an independent budget review in Scotland. I hope that, when the review reports in July, it will provide a detailed overview to help to move the agenda forward on better financial planning arrangements.
While the member is making comments about there being no money, does he recognise that the Scottish Government’s budget for 2010-11 is the highest that it has ever been and that there is £1 billion more in the budget than there was last year?
There might be more money but, at the same time, there is more Scottish Government expenditure on public-private partnerships and private finance initiatives.
In COSLA’s strategic approach to the upcoming spending review, it bases its key assumptions on a 12 per cent real-terms reduction for the whole of the public sector in Scotland over the next spending review period. That period starts in April 2011 and the clock is ticking, with the prospect of a UK Government budget on 22 June this year. There is a clear need to treat some of the funding issues with urgency. The reality of potentially significant cuts ahead could lead to muddled decision making by local government that will impact on most sectors of society, particularly the vulnerable.
Earlier speakers talked about the amalgamation of services. Was there any discussion of amalgamating authorities? As we have so much to save, it seems that we should be looking at making savings in that league.
Although there was a brief discussion about amalgamating authorities, we did not develop the idea because we did not think that it was important to concentrate on it at this time. However, I will say more later about our lengthy debate on the Arbuthnott report.
In my area of Central Scotland, local councils are placing school closures high on the agenda even though the disconnect between the taxpayer and local government is already genuine, especially as local government officials still receive performance-related pay despite having earnings in excess of £100,000 a year.
There are issues with staffing. Job losses are an increasing prospect, as the committee report highlights and as others have said. On adjusting budgets in the public sector, especially in the short term, Audit Scotland notes that there is little room for manoeuvre.
One of the key issues that arose in the evidence sessions, which the report identifies, is the lack of a detailed level of disaggregated statistics on public sector employment. The committee has asked the cabinet secretary to clarify the situation.
I turn to shared services, the Arbuthnott review of the Clyde valley authorities and discussions that are taking place between local authorities in other regions of Scotland. One of the key pointers is the need for better scenario planning and a review of current local priorities. When we consider the fact that many local authority chief executives got a 14 per cent pay increase in the blink of an eye in 2002-03 on the back of the McIntosh review, perhaps we can understand the rationale behind the current UK Government’s proposal to curb executive pay levels and institute a fair pay review, given the on-going delays in the implementation of equal pay and single status agreements, which Mary Mulligan mentioned.
The committee noted that elected members have to take on a higher profile in the management of local authorities. Officers, just like civil servants, do not always know the needs of the communities that they serve. Elected members are politically accountable to the public and they need to take ownership of issues, instead of deferring and referring to the officials.
In order not to disappoint Jim Tolson, I will point out that, in the current financial context, the voluntary sector often bears the burden, so it is no surprise that the committee states in its report that it intends to hold an evidence session on the issue and that it will report back to the Parliament in due course.
There was a great deal of discussion in the committee, which the report reflects, about the need for local authorities to find solutions, especially in the short term—hence, the use of tax increment financing has come to the fore, although such schemes
“may not be able to provide these short-term solutions.”
As the committee details in its report—Duncan McNeil, the convener, referred to this in his speech—there is concern about the cost to local authorities of potential redundancies, which are not a cost-free option.
I welcome the general principles of the committee’s report and thank committee members, clerks and those who provided evidence, who tried to ensure that we had a meaningful discussion on local government finance. I look forward to hearing the cabinet secretary’s response.
16:02
One of the disappointing features of our moving from a period of economic expansion to a period of economic contraction is the fact that we have received reports of health boards that have met and exceeded savings targets and, in the committee’s report, we see examples of local authorities that have met and exceeded their targets. Of course, there is nothing wrong with that, but it begs the question why they have not done so before. What is it about the pressure of reduced expenditure that suddenly prompts those bodies to be able to operate more efficiently? I find that slightly disappointing. I think that we would all hope that the health service or local government would be able to operate efficiently per se—not only when they are under a particular pressure—because they are expending public funds.
Against that background, I will look at two aspects of the report: shared services and efficiency savings. Margo MacDonald and Derek Brownlee made pertinent comments on shared services. Liberal Democrats are concerned that the boundary between local government and the Scottish Government has not been addressed in the 11 years since devolution. There are local government members who are concerned and nervous about the imprecision of and drift in that definition and the way in which it has changed.
If an authority is invited to share a service, it may feel, as Margo MacDonald alluded to, that it is being placed under threat of being merged or abolished. Those are different debates. As far as Liberal Democrats are concerned, the debate is about the legitimacy of local government and the local democratic element in local government that ought, properly, to be preserved. One can understand those in local government feeling nervous about their situation and not giving themselves whole-heartedly to the arguments in and necessity of the debate on service delivery. For example, I am thinking of the issues that are raised in the Arbuthnott report and which the Local Government and Communities Committee repeated in the report that we are debating this afternoon. Liberal Democrats are very interested in anything that improves the efficient delivery of a service, but we recognise that there are impediments to the debate that prevent it from being taken forward whole-heartedly.
Bob Doris asked councils to explain why they have different delivery mechanisms for refuse collection if they use the same lorries. The question is a more fundamental one: is the democratic body that has been elected to make those decisions able and capable of explaining the differences? One authority may want to charge for a service that another authority may not charge for. If we are to understand the situation, we first have to understand the democratic difference and who makes the decisions. However, that does not preclude several authorities deciding that it is more efficient to collaborate and get together on the sharing of services.
On efficiencies, in the first eight years of the Parliament, I was for quite a bit of time responsible for the Water Industry Commission for Scotland and its development. I am fascinated by some of the remarks made in the report in that regard. Scottish Water and local government are not entirely analogous, but there are one or two quite important points to be made about Scottish Water. Scottish Water is measured against relevant companies in its sector that demonstrate particular features. That suggests that, in looking at benchmarking our local authorities, we must not compare apples with oranges and pears with bananas; we have to look at the performance of particular authorities that have particular characteristics.
We applied to Scottish Water the principle of picking out the very best of performance from across the whole of the UK. It might be worth bearing that in mind in relation to the measurement that we may want to apply to local government—indeed, one might want to go further. There is no doubt that making those comparisons and insisting that Scottish Water performs against those benchmarks had a huge impact on the company’s performance across a range of indices.
Of course, that approach also raised questions about how Scottish Water delivered—or would or could deliver—a particular service. At that time, we did not have the terrible feature of budgeting in Scottish local government of starting with a budget in 1810 and progressively adding to it. By 1850, it must be better; by 1900, it has got to be bigger—
You must finish, Mr Finnie.
—and, by 1950, it is bigger still. Under that scenario, budgets just get bigger. No one ever asks, “What are you delivering, and how are you delivering it?”
That is what benchmarking did for Scottish Water. I commend what was done; it was effective. We should not try to compare the wrong things, but use benchmarking. The two elements of the committee’s report that I have mentioned have much to commend them as we face financial difficulties in our local government services.
16:09
I congratulate the Local Government and Communities Committee on a detailed and thoughtful inquiry and report. I hope that the Scottish Government and COSLA will take on board many of the recommendations and conclusions that the committee produced after several months of hard work.
I offered to speak in the debate not because I have a detailed knowledge of the contents of the report, nor because I am a member of the committee. Thus far in the debate, committee members have gone into considerable detail in explaining the contents of the report. I offered to speak because I want to talk about the consequences of a Tory-Liberal Democrat coalition—not the shiny new Con-Dem coalition that was formed last week, with all those shiny new faces, but one that has been running Dumfries and Galloway Council for the past three years—as that illustrates some of the problems to which the report refers.
Next Monday, Mr Gideon George Osborne, the new Chancellor of the Exchequer, intends to reveal how he will save £6 billion through efficiency savings and waste reduction. In a speech given as recently as 29 March, he confidently told voters:
“Not a single penny will come from the frontline services that people depend on.”
We will see on Monday.
If we look at the record of Dumfries and Galloway Council over the past three years, the story is rather different. The council administration’s budget this year removed £491,000 from the secondary school budget, axing 23 teachers posts. I always thought that delivering education to our young people was a front-line service—an important one that influences both individuals’ futures and our country’s future economic success. The council has taken 49.1 million pennies from a front-line service.
That was not all. Later this year, the council is to consult on cutting a further £133,000 by cutting the number of primary classroom assistants, who help to free up teachers’ time so that they can teach and who support children’s education. In fact, the politicians in the administration wanted to inflict £545,000 of cuts on secondary schools, but their officials warned them—going with the grain of the committee’s report—that the cost of severances would be so significant that such cuts would not be possible. That must be set against the backdrop of the fact that in the previous year the education maintenance programme was underspent by £5.2 million—money that was not spent on repair of the region’s schools.
Now a new line of attack is opening up, because the school meals service is under attack. Because of poor uptake, councillors are considering reducing secondary school meals provision to a cafe deli-type service in 10 of the region’s schools, including five in my constituency—Langholm academy, Annan academy, Dumfries academy, Dumfries high school and St Joseph’s college, pupils from which were here earlier today. It has been estimated that the proposal will result in the loss of up to 20 council catering posts, as well as reducing the quality and choice of food in schools. I suspect that it is unlikely to reduce the problems of poor uptake.
Not just education is suffering the axe. The community transport fund has been cut by £169,000. Community transport initiatives such as that in Annandale have been invaluable to residents in rural areas, transporting disabled and elderly people to medical appointments and lunch clubs, and providing day trips to other parts of the south of Scotland. For example, recently a group of teachers and pupils from Hightae primary school, a small rural school in my constituency, used the Annandale initiative bus to arrange a trip up to the Scottish Parliament. That small school could not afford the charges that are levied by commercial companies.
In his recent proposed regulation of bus services bill, my colleague Charlie Gordon wanted to strengthen support for community transport by making older and disabled people eligible to use their travel passes on it. It was shameful that no other party represented in the chamber supported the bill. Instead of supporting the fantastic community transport service, Dumfries and Galloway councillors took an axe to it.
Can the member remind us how many Labour MSPs supported the proposed bill? I recollect that it was far from the majority.
I do not know how many signed up to it, but the bill was overwhelmingly supported by Labour members. I am not aware of a single Labour member who did not support it.
Because Dumfries and Galloway Council does not charge for parking, our civic leaders came up with a nice little surprise for disabled people—a tax on parking especially for them, by charging for blue badge applications. The result was that the only people in Dumfries and Galloway to pay for parking were the disabled, because everyone else gets it free. Both the Labour group and the Dumfries and Galloway Coalition of Disabled People challenged the measure under the Disability Discrimination Act 2005, and it has been suspended. Unfortunately, there does not seem to be much chance of the people who paid the charge getting their money back.
Council staff wages have also been reduced. As a result of the single status agreement, community wardens have seen their wages cut. I find that extraordinary, because I thought that people whose jobs were red circled would be kept where they were while everyone else caught up with them. In fact, people in an important service, who assist the police and the public, have seen their wages cut.
Members may ask whether Labour councillors proposed alternatives. They did. Sadly, proposals to cut councillors’ salaries, to reduce the use of consultants on council business and to cut the number of trips, conferences and other junkets enjoyed by councillors and officials were thrown out.
Members might also ask what SNP councillors did. I am sorry to tell them that, as usual, SNP councillors voted with the Tories. In fact, they proposed cuts that were even greater than those that the Conservative and Liberal Democrat administration proposed.
I commend the committee’s report, which makes an important, valuable contribution. I condemn the cuts that have been inflicted on the people of Dumfries and Galloway by the Con-Dems on the council.
16:15
I congratulate Duncan McNeil’s committee on its report. The relationship between central Government and local government has been an uneasy one in recent years, for obvious reasons. Local government receives nearly 60 per cent of its finance directly from central Government, yet it is the face of democracy that most often impinges on the day-to-day lives of citizens. At least half my postbag is concerned with matters that really fall within the province of local government. The fact that people sometimes feel impelled to seek help from their MSPs or MPs on local government matters illustrates the dichotomy.
Over the years, local government has had its powers subtly and consistently eroded. That cannot be for the public good. I was particularly pleased when the SNP Government started a reversal of that trend, with the establishment of single outcome agreements and a weakening—if not the total abolition—of ring fencing. There is more to be done, but it is a start.
The Local Government and Communities Committee’s report draws our attention to the prediction by the Institute for Fiscal Studies
“that real terms reductions across all UK Government Departmental Expenditure Limits (DEL) will be around 2.3 per cent each year between 2011 and 2014.”
Whatever figures we study, it is apparent that a period of belt tightening in the public sector is a necessity, whichever Government is in office.
Can vital public services be spared? We have been given numerous ways in which retrenchment can take place in a relatively benign manner, for example through authorities sharing backroom services with other councils and outsourcing some services. Some people have even suggested a drastic reduction in the number of local councils in order to gain efficiencies of scale. Why, they ask, does a small country such as ours need 32 local authorities, each with its own infrastructure? While those options are being considered, we are tempted by other policies—some of which are very desirable—that could add to local government commitments.
The inescapable truth is that the largest financial obligation of all councils is their pay bills, which amount to a massive total of £7 billion a year, with cost-of-living pay increases of 3 per cent for 2008-09 and 2.5 per cent for 2009-10—and all the other additions that we have heard about already. The Arbuthnott review concluded that stratagems such as year-on-year efficiency savings or the salami slicing of budgets would not be enough to survive the expected financial tsunami. I agree.
Staff costs will need to be cut, but the question is how to do that without great pain or large disruption of services. The Local Government and Communities Committee reports that one council has instituted a vacancy freeze. Such a policy will certainly save costs, but what does it say about the value of the posts that are left unfilled by chance?
One way forward is to shift further the balance of power and decision making to communities, to empower local people to take control of the services that they value and to let them make the decisions. Funding for those services could be transferred from central Government to local government by means of a progressive local income tax, with a rate to be set locally. Now that the Liberal Democrats are in government in the United Kingdom, that might be a realistic option.
I am sure that members are familiar with the important concept of Arnstein’s ladder of citizen participation. It was formulated in 1969, and it remains implicitly at the core of approaches to citizen participation. The ladder represents the struggle between citizens who are trying to move up, to gain more power, and organisations, including councils, that kick them down again. Although many citizens do not wish to reach the top of the ladder and have ultimate control—so the ladder is a flawed concept in that respect—I have no doubt that many people wish to have far greater control over their own local services than is the case today. Let us work out ways of giving more such control to local people, and I have no doubt that wise decisions will follow.
16:19
The committee’s report gives an excellent overview of the challenges that face local government.
The current regime in the City of Edinburgh Council could be described as an example of how not to run a coalition. There is a lack of clear priorities, there is no strategic vision, the voluntary sector is being poorly treated and there is a failure to deliver good relations with the workforce.
Duncan McNeil was right to say that local government must set priorities. We are in an extremely tight financial climate. The problem is that councils have had their hands tied behind their backs by the SNP Government for the past three years. Derek Brownlee was right to point out that the council tax freeze has not been cost free. In Edinburgh, the freeze has been paid for through higher council house rents, higher costs for sports facilities and in-year funding cuts to voluntary organisations. In future it will be paid for through the privatisation of thousands of jobs by the SNP-Lib Dem council.
In its first year in office, the SNP-Lib Dem coalition boldly announced a massive schools and community centres closure programme, which was deeply unpopular and for which there was no clear evidence; nor was there any relationship with the SNP’s flagship policy on class sizes. The proposals were discredited, unceremoniously dumped and replaced with another programme of school closures, for which different reasons were given. Again, there was a lack of rigour in the proposals.
In the Scottish Parliament we debate the huge cost of the Scottish Futures Trust almost every week. However, Edinburgh is doubly hit by a reduction in Government support and an inadequate programme for replacement. Moreover, the curriculum for excellence is being implemented without the guidance and resources that teachers and parents tell me are desperately needed.
We have similar problems with regard to flooding investment, in relation to which the council is being forced down a slower and more expensive procurement route in the absence of the previous Scottish Government’s funding deal. The council dropped its proposals on the social care tender, after a massive campaign exposed the reduction in quality of service for vulnerable adults and their families.
Lessons must be learned from those decisions. Clear priorities with a sound basis must be established. If there will be losers, we must admit that. We must consider the quality of service, and if the evidence is there for everyone to see we must be honest about that. When difficult decisions have to be made, there needs to be transparency, strong evidence and—this is crucial—consultation with the people who rely on the services.
National policies for local government have to be funded effectively. However, the SNP Government has put a financial straitjacket on Edinburgh. The situation is compounded by the council’s lack of political judgment and lack of concern about the impact of its decisions on communities and vulnerable people. Our capital must deliver prosperity and economic success, for the future of not just the city but the whole country. What does it say about the competence of our local coalition that 10 months into the waste dispute there is no resolution to the issue? As the months have passed, residents have submitted complaint after complaint about the poor quality of rubbish collection—and, as Mary Mulligan said, the council has still not sorted out equal pay.
The city must be in competition for an award for worst ever management of a new tram project. There was bound to be some disruption. We were all braced for that. However, the lack of agreement and political management at the heart of the council has not helped. When the Cabinet Secretary for Finance and Sustainable Growth signed off £500 million from his budget, the project had a clean bill of health from Audit Scotland. Yesterday, he visited the M74 northern extension project, which is three years late and is coming in at £692 million. I signed off the project at £177 million—
Oh, this is absolutely ridiculous.
I say to the cabinet secretary that my point is that major investment projects do not always come in on time or on budget—and that is not a plea for costs to rise further. There must be tight financial management, and we need more rational discussion and involvement on the part of the Scottish Government. We need grown-up engagement. The tram project must be fixed. It is a major problem for Edinburgh’s finances. Big projects reach a point at which whoever is in government has a responsibility to work with the project organisers. Our capital city deserves better from the Scottish Government and from its council coalition.
Last week I called for a new look at business rates. Edinburgh makes a massive contribution to the Scottish Government’s coffers and I am delighted that the Government is considering pilots on tax incremental financing. A fairer deal on business rates and tax incremental financing would not sort out all our problems but would make a difference.
I call on the Scottish Government to work constructively with the City of Edinburgh Council. The recommendations in the committee’s report that relate directly to what I said about the council need to be considered carefully. We need new solutions for the future. For those reasons, I commend the committee’s recommendations.
16:24
Reflecting on the speeches made by Sarah Boyack and Dr Murray, I, too, was thinking of local issues in which I have been involved recently as a local member. For example, I have spoken to parents who are concerned about the wrap-around nursery provision that is under threat of being taken away from them by the council. I have also spoken to a headteacher who told me that, for the first time in his career, staff were being made redundant. If I follow the rationale of the two speeches to which I referred, I must point out for accuracy that the latter situation is in Midlothian, which has a majority Labour-controlled council.
However, this debate and, indeed, the thrust of the Local Government and Communities Committee’s report go beyond that aspect. There is now a growing recognition that we must see reductions in the budget of the Scottish Parliament, which primarily gets its resources from Westminster, and that of councils, which primarily get their resources from this place. In fact, in Bob Doris’s speech, we see a creeping recognition by the SNP that the banking crisis was both US and Scottish in origin, given the performance of the Royal Bank of Scotland and HBOS.
That is ridiculous.
To take out from the banking crisis in the UK the biggest single bank that contributed to it, which has its headquarters in Edinburgh, is ridiculous and naive in the extreme.
Will the member give way?
If I have time, I will do so, because Mr Doris gave way to me. I will make my point first.
I think that the public recognise that the Scottish budget and councils’ budgets cannot grow higher than the rate of inflation in perpetuity. Indeed, the SNP today highlighted in a press release a YouGov opinion poll that asked people in Scotland whether they agreed that no cuts were necessary: only 12 per cent agreed with that view. That shows why there is less talk from the Scottish Government now about there never being any cuts; the talk now is more about when they may happen. On that point, I give way to Mr Doris.
On Mr Purvis’s ridiculous comments about the worldwide banking crisis having started in Scotland with RBS, can he tell me what powers this place has over banking regulation? If we do not have enough of those powers, which would he give us?
Despite the SNP’s mentality, Scotland is not just the SNP. RBS and HBOS, as Scottish banks that are part of the Scottish economy, were partly culpable for the crisis that we are now in. Earlier, Mr Doris seemed to move away from the view that the Scottish budget, which is a devolved spend, should be immune from the crisis. He made an accurate and fair observation.
The debate has partly been about how any reductions will be made and who they will affect—that is the critical aspect of this Parliament’s work and, indeed, of councils’ work. Of course, the focus must be on ensuring that services for the most vulnerable in society are protected over services for those who have the broadest shoulders. In that respect, there should be no disagreement among any of the parties about some areas—we must move together. For example, last year, we proposed, and the Scottish Government established, a cross-party structure to look at some of the very serious issues that the Local Government and Communities Committee has addressed, such as pensions, pay policy and long-term capital planning. We must have cross-party consensus on those areas, because the decisions that we take now will have long-term consequences—indeed, they will impact on councils.
The debate is also about another key issue. It is about more than the budgets that councils currently have at their disposal; it is about the type of local and central Government services that are delivered overall. In that regard, we have seen piecemeal proposals. For example, at the Finance Committee this week, the cabinet secretary talked about combining directorates, saying that some councils could share directors of education. We have also had some discussions about the Arbuthnott report. All such suggestions are problematic because they are made in a vacuum: there is no coherent, long-term look at how local services should be configured.
The Liberal Democrats believe in moving towards parity of finance so that local government, which delivers the majority of services in Scotland, is responsible for raising the revenue that is required for those services. Some in this chamber say that that debate is broadly about what they call fiscal autonomy. However, that debate seems irrelevant in the context of the vast majority of services that people, communities and families receive. We must address that issue. On local income tax, I did not hear Ian McKee or other SNP members talk about local rate setting when the Government was consulting on its LIT proposals. Certainly, the Labour Party was absent without leave on that issue.
All those issues must be considered within a context of looking at what powers local government should have and then giving local authorities the appropriate fiscal structure to raise the finance. We know that the council tax is not such a structure or policy, and that it does not provide the ability to raise revenue that could radically increase the powers of local government.
We have a number of choices. We can make long-term decisions now to deal both with the structure and with the key issues of pay, pensions and long-term capital investment, or we can simply wait so that those issues can form part of a campaign for the Scottish Parliament elections next year. I fear that the Government’s approach is to leave those choices until next year, but that will not do anyone any favours.
16:31
The issue of local government finance has proved to be one of the most intractable, divisive and complex in modern politics. It has been our equivalent of the 19th century Schleswig-Holstein question, the answer to which was known to only three men, of whom one had died, another had gone mad and the third had forgotten it.
In my political lifetime, we have had a property-based system of local taxation in the form of rates, which gave way to a personal tax in the form of the community charge, from which we went back to a property-based tax with personal discounts relating to household size and composition, which is the form taken by the council tax. We also saw the bold declaration by the SNP during the previous Scottish Parliament elections that it would abolish the council tax and replace it with a local income tax. Of course, that proposal failed to reach first base.
The previous Administration fared no better in that regard after commissioning the Burt committee’s local government finance review. The ink was barely dry on that report, which recommended that the council tax be replaced with an annual property tax based on market values, before it was almost instantly dismissed by the then Scottish Executive. Let us not forget that all this controversy and turmoil relates to the appropriate form of local taxation to raise a mere 11 per cent of the total revenue income of all local authorities in Scotland.
Michael McMahon spoke against the council tax freeze, but it is ironic that the council tax freeze of the past three years has served only to make the council tax more acceptable—in so far as any tax is acceptable—and thus to make any reform more difficult to achieve. However, it is fair to ask, as some have done today, whether a freeze policy that was intended only as a stopgap measure is sustainable for much longer, given the difficult financial environment that has resulted from Labour’s debt legacy. I suspect from Mr Swinney’s hints in his opening speech that the SNP is unlikely to miss the opportunity to trumpet a four-year council tax freeze as one of the few achievements of his Government in the lead-up to next year’s elections to this Parliament, but it will be interesting to learn from him the mechanism by which he hopes to achieve that.
It is interesting to consider how issues that have been highlighted in its report on local government finance have been reflected in subsequent evidence sessions of the Local Government and Communities Committee. I will highlight three such topics. The first is the subject of equal pay and single status, progress on which has become something of a mission on the part of the committee, as Mary Mulligan said in her speech. Sadly, the committee’s desire is not shared by Scotland’s councils, which are not only dragging their feet in reaching settlements but are reluctant to provide information on the scale of their liabilities lest that prejudice their leisurely negotiations.
Recent evidence obtained by the committee demonstrates that the much-maligned no-win, no-fee lawyers—who were castigated in the Parliament not so long ago by, among others, the cabinet secretary—are the ones who are actually resolving cases with councils on behalf of workers. Unfortunately, workers’ trade union representatives appear to be paralysed and fearful of reaching any settlement lest it lead to litigation against them.
Dear, dear!
Given that Mr Swinney had to apologise for his previous remarks in the chamber on that subject, he should be very careful that he does not need to apologise again.
When one considers that the disclosed estimate of liability of £163 million is a figure that no one seriously believes to be anywhere near the final figure for settling equal pay claims, and sets that against the other financial pressures on local government, it is a scandal that so little has been done after so long.
The second issue relates to shared services, in which much faith has been invested as a way of improving performance. We have had the benefit of the Arbuthnott report, but it was depressing to hear only last week in evidence from the Scottish Council for Voluntary Organisations that the third sector has largely been shut out of discussions on shared services, which have been conducted at an intercouncil level and have not actively involved alternative service providers, who we know have already made such a big contribution to improving standards in services such as care in the community. If we are to go down the route of shared services, a lot more out-of-the-box thinking will need to be done than appears to be going on at present.
Thirdly, we hear a great deal about the great strides that councils are making on efficiency savings. We are told that they were required to make £175 million of savings in 2008-09 and—wonder of wonders—they have apparently achieved £258 million of savings, but, on closer examination, all is not what it seems. Those efficiency savings are not audited; they are self-certifying. When Audit Scotland representatives were asked, during recent evidence to the committee, to give an example of a council that had provided more services for the same money or the same services for less money—a good indicator of what is an efficiency saving—they were at a loss to provide a single such example off the top of their heads. They said that they would get back to us and I hope that they do, because as Ross Finnie and others have said, if benchmarking is to have any meaning or value, successes need the oxygen of publicity. We need to know that one council has achieved a saving in a particular service so that we can challenge all the other councils on why they are not doing the same.
After 11 years in the Parliament, I may have become too cynical, but I cannot help but feel that efficiency savings have more to do with creative accountancy than real-world results. I hope that I am proved wrong, because a great deal has been invested in that concept as a way of getting through the current financial difficulties while sustaining front-line services.
16:37
The remit of the report was
“To assess the potential effect of the current economic situation and other pressures on local authority finances; and to identify the key challenges likely to be faced by local authorities.”
To my mind, there are three main issues on which action requires to be taken. Mr McLetchie and others have mentioned shared services. Only yesterday, in the Finance Committee, the cabinet secretary and I shared some views on how the provision of shared services could be progressed. Recent reports suggest that the councils for Edinburgh, West Lothian, East Lothian, Midlothian, the Borders and Fife will seek to pool a raft of services. If that improves service efficiency and delivery for their customers, it must be welcomed.
As we have heard, guided by Sir John Arbuthnott, who completed a review of shared services in the Clyde valley, the Local Government and Communities Committee asked for further information from the Scottish Government on what action it intended to take on secondary legislation that could smooth the way for inter-authority shared services. Given what Mr Swinney said to me in yesterday’s meeting of the Finance Committee, it is fair to say that that is an area in which he believes that radical action could be taken. Therefore, I was pleased to hear him say—at least, I think that I heard him say—that he is to hold further meetings with those who were involved in the Clyde valley review with a view to making progress on the issue.
Increasing the pace of change as we come out of recession is a challenging task, but the Local Government and Communities Committee considers that it is vital that we increase the pace of change in the delivery of shared services if local government is to be successful in meeting the challenges of the changing nature of public sector finances. On that note, I was disturbed to find myself agreeing with what Derek Brownlee said in his thoughtful speech—either he is influencing me or I am influencing him in the Finance Committee; I am not sure which it is. He spoke about the progressive qualities of the council tax. More interestingly, he called for a wider debate on what the future role of local government should be, and I agree with him on that. Perhaps the committee could return to that.
Many members have mentioned the council tax freeze. It is difficult to state categorically what will happen to council tax beyond the current session of Parliament, but a number of witnesses who appeared before the committee questioned whether it was sustainable. Michael McMahon mentioned the joint submission from Dundee, Falkirk, South Ayrshire and Highland Councils, which said:
“This measure may not be sustainable and reduces the flexibility to local authorities in relation to generation of funding, and puts added pressure on the grant settlement which is providing funding to local authorities in lieu of increasing council tax. Extending the council tax freeze will require additional funding to be allocated by the Scottish Government, which will in turn lead to higher levels of efficiency saving required and additional pressure on pay awards to maintain service levels.”
When the Scottish Government announced plans to freeze council tax levels, it was as part of its preparations for replacing the council tax with local income tax, as Mr McLetchie mentioned. That suggests that the freeze was never intended to be sustainable in the longer term. As the committee’s report makes clear, the economic situation now is markedly different from what it was in 2007 when the freeze was first announced.
The committee also considered economic development and the business gateway contracts in its report. Concerns have been raised that there is insufficient flexibility within those contracts to deal with the challenges of the economic climate, yet the SNP consistently tells us that economic growth is its main priority. We hear from the cabinet secretary that a review is being held. I hope that the business gateway’s focus will now be on helping business survival rather than on the original model for business start-ups. Mr Swinney has said, and I have no reason to disbelieve him, that he is willing to listen to further arguments on the subject, so I hope that that means that the Government will consider the overall policy direction for the business gateway.
David Anderson from the City of Edinburgh made a telling point when he said:
“Economic development has been a bit of a Cinderella function in local authorities outside the major cities.”—[Official Report, Local Government and Communities Committee, 16 September 2009; c 2313.]
He said that, in Edinburgh, his department had a budget of £83 million, but that the council’s economic development service had a budget of only around £5 million, and, as Mr Anderson kindly put it,
“That is not a huge amount of resource ... What councils have available for discretionary spend on economic development is limited.”—[Official Report, Local Government and Communities Committee, 16 September 2009; c 2302.]
In concluding, I ask the minister to amplify his comments on the committee’s recommendation that there should be a business rates incentivisation scheme, to be implemented from 2011-12. I think that the cabinet secretary confirmed that he has accepted that recommendation, although it was a bit strange to see that response. I wonder whether it was given before many businesses in Scotland found their rates bills increasing dramatically, without consultation or transitional relief.
At the end of the debate, it is vital to look forward. Will local councils adopt a more vigorous shared services format without legal impediments? Will economic development become a major priority for councils, along with a refocused and energetic business gateway that tends to customers’ current needs? Surely economic growth is the best antidote to fiscal deficit. Will we see another council tax freeze? Perhaps only Mr Swinney knows the answer to that one, but it leaves many councils unable to balance their books. Alternatively, will we see only more meetings about meetings and precious little action? I hope not, and I hope that the Government will accept the call for action that is included in the report. I commend the report to the Parliament.
16:43
I will go through some of the issues that have been raised during the debate. Michael McMahon said that the local government budget is at a standstill. There is just no way that any analysis could substantiate that point. The local government budget is £270 million higher than the equivalent amount in 2009-10, and it would have been £174 million higher than that had we not had to take compensating action to deal with the fact that the budget that we anticipated that we would have at our disposal was reduced by £500 million by the previous UK Government. Those are the bare facts.
The minister and his colleagues keep repeating the mantra that there have been £500 million of cuts when they know full well that £347 million of that is accelerated capital and only £129 million is the local health capital budget. The minister has also had the highest budget that any finance minister has ever had, with year-on-year increases every year since the SNP took power. Why can the minister not acknowledge that?
I might acknowledge that if there was a scintilla of fact about it. I say gently to Mr Whitton that, yesterday at the Finance Committee, he got the detail of the questions that he asked me hopelessly wrong, and he has just repeated himself. The £500 million has nothing to do with accelerated capital and everything to do with a reduction in the planned spending that Andy Burnham advised me about in the comprehensive spending review in 2007. That is the answer to the question, and I suggest that Mr Whitton checks his facts.
Jim Tolson lamented the distribution formula and argued in favour of a new minimum per capita floor in relation to the funding formula. That would cost £110 million. Now that Mr Tolson is a supporter of a party of government, I respectfully suggest that he tell me where that £110 million would come from. It could come from two sources. It could come from an expansion of the Scottish block of expenditure. If that is delivered by the new Secretary of State for Scotland, no one will be cheerier than me. Alternatively, it could come from a redistribution among the local authorities in Scotland. However, I imagine that Mr Tolson, in true Liberal Democrat fashion, would not have the consistency to welcome the fact that Fife Council’s budget allocation would have to be reduced as a consequence of that.
The cabinet secretary may not have the figure at his disposal, although, as he is a man of figures, I am sure that he has. Can he tell us how much additional rates revenue councils took last year?
I do not have the figure for council tax revenue in front of me, I am afraid, but I will confirm it to Mr Purvis. I am sure that I have already confirmed it in a parliamentary answer—I confirm most things to Mr Purvis in response to parliamentary questions. We can come back to that detail in due course.
Mary Mulligan asked what we are doing to support local authorities, which was very much Sarah Boyack’s point into the bargain. In her condemnation of the City of Edinburgh Council and the apparent absence of Government support, Sarah Boyack admitted that I have given consent to borrow £25.688 million to support equal pay claims in the City of Edinburgh Council. I would have thought that that featured in the efforts to tackle equal pay. Sarah Boyack also mentioned the fact that we are contributing £500 million to the trams project in Edinburgh. The City of Edinburgh Council must contribute to the trams project, too, and some of the difficulties that the City of Edinburgh Council is about to face perhaps have something to do with that project. I gently remind the Parliament that the Government was not a supporter of that project, although we are certainly having to pay.
Does the cabinet secretary not accept the view of many people in the city, particularly in the business community, that major public infrastructure—whether it is roads, trams or trains—needs to be taken on board by whoever is the Government of the day and that it is not good enough for his colleagues on the council to attack the project without being constructive about it? It is a huge project that is critical to our future.
Sarah Boyack cannot have it both ways. She is blaming the City of Edinburgh Council for the management of the trams project and then blaming it for not taking a management role in the trams projects—that is a completely ridiculous proposition.
Sarah Boyack also commented on the M74. She might have signed off the M74 project, but that was probably in 2003 or sometime around then.
No, it was in 2001.
It was in 2001—even earlier. There is the slight impediment of the fact that the previous Government was taken to court over the M74, which might have contributed to the difference in the cost profile. Having visited the M74 site on Monday, I know that a fantastic amount of controlled work is being done to deliver that project, which will be an excellent investment. We carry responsibility for that project, as it is a strategic trunk road project. The Edinburgh trams project is a local project that is the responsibility of the City of Edinburgh Council.
A substantial point was made about the forward projections for the budget, which is meaningful to the debate and is at the heart of a point that I discussed with the Finance Committee yesterday, on the appropriateness of the reductions in public expenditure that are planned for 2010-11. The chancellor of the new UK Government has confirmed to me that he will set out on Monday the reductions that he intends to make to the 2010-11 budget. He has also confirmed to me that there will be the opportunity to delay the impact of that into 2011-12. The judgment that I have arrived at, which I have articulated publicly, is that there is a consensus view in the Parliament that it is important to maintain public expenditure in the current financial year to support economic recovery. I am saying not that that is a unanimous view, but that it is the majority view of the Parliament.
The approach that I have articulated is not, as Mr Purvis has accused me of doing, to delay things until after the election. As he knows full well, the 2011-12 budget will be set before the parliamentary elections in May 2011. My view is that the right thing to do is to maintain public expenditure to support economic recovery. I am, therefore, mightily confused by the Labour Party’s arguments. In the press overnight, Andy Kerr encouraged me to cut public expenditure in 2010-11 to make good the changes that are proposed by the Conservative and Liberal Government in London—indeed, he demanded that I apply those during 2010-11. I have been lectured for months—as has everyone in the Parliament—about the importance of maintaining and contributing to economic recovery, but that position has been undermined by Andy Kerr’s comments in the press. Perhaps the Labour Party should think carefully about what it is arguing that the Government should do.
Mr Finnie made another thoughtful speech in the Parliament, in which he asked why on earth, if there was an opportunity to make an efficiency today, it had not been made before. That is a fair point, but I say gently and respectfully to Mr Finnie, because he knows that I say everything to him respectfully, that he was a minister for eight of the past 11 years, so there was an opportunity for him to pursue that efficiency. We are pursuing the agenda of efficiency in as systematic a way as we possibly can.
My final remark is to say to Mr McLetchie that, in 2007, a journalist said to me, “I’ll eat my hat if you can implement a council tax freeze.” I remind Mr McLetchie that I have done it on three occasions so far.
16:51
The convener of the Local Government and Communities Committee has comprehensively set out the scope of the committee’s inquiry into local government finance and the findings of our report. It is worth saying that our report to the Finance Committee during the budget strategy phase for 2011-12 will inevitably reflect some of the same themes.
On behalf of the committee, I add my thanks to those that were offered by the convener to the committee clerk and her staff, as well as to the Scottish Parliament information centre and the official report for ensuring the production of such a comprehensive report.
As I am speaking on behalf of the committee, I will try to be circumspect and will merely say that, as members and parties, we start from different articles of faith about the funding situation for local government. There is little point in rehearsing those differences; indeed, the report manages to sidestep them to some extent. As has been obvious from the debate, different members will, depending on their political standpoints, make greater or lesser allowance for the role of the UK Government in determining what Scotland has available to spend on its local authorities. In a sense, it would be more interesting to be having this debate after rather than before the UK Government’s budget statement next month, to see what that leaves us to divide up, but we will let that be.
I wish to concentrate instead on two areas—first, the impact of the local government financial situation on the voluntary sector and, secondly, the opportunity for local government to carry out its economic development role.
The voluntary sector was the subject of a number of the committee’s evidence sessions, firstly on the issue of voluntary sector pay. We were prompted by petition PE1231, which called for a national framework for public service contracts to ensure equitable wages and conditions for front-line workers in the local government and voluntary sectors. There was acknowledgment from all sides that it was difficult to foresee how complete parity could be achieved in the current financial climate, but the Scottish Government indicated that it was committed to improving the situation.
Incidentally, the issue of the voluntary sector featured in the committee’s work a year ago when we undertook the evidence sessions that have been mentioned on home care services for the elderly. Perhaps one of the most important outcomes that the committee has achieved this year was an undertaking from the Scottish Government that the use of so-called reverse e-auctions would be banned in the future when it came to procuring services for such vulnerable people.
More generally, the inquiry provided a chance for the committee to examine the impact of the current economic situation on the voluntary sector. The committee heard evidence on the issue and recommended that there should be better information on the comparison between the services provided by the third sector and those provided by the public sector; again, the Scottish Government responded to that positively.
Other evidence that the committee heard revealed the difficulties that are faced by a number of major charitable trusts, such as the Lloyds TSB Foundation for Scotland. It pointed towards the possibility of what members have referred to as a “perfect storm” for the voluntary sector, in which both public and charitable sources of funding come under pressure.
It is worth focusing on the impact of the current economic situation on local authorities’ ability to perform their important role in promoting economic development. In the round-table discussions, some witnesses cast doubt on the ability of local authorities beyond our biggest cities to undertake that role adequately. The Scottish Government responded by indicating its willingness to listen to further arguments and to review the current business gateway contract.
Following further examination of the contracts that were let in 2007, the business gateway Scotland board is now considering the arguments for refocusing the business gateway advisory and specialist support services. The Scottish Government is also considering other options in that area.
Other members have picked up on a wide range of themes in the committee’s report. The cabinet secretary mentioned the need for a long-term strategic view, and responded to the important point that was made in the report and in evidence to the committee about the need to concentrate more firmly on benchmarking than on minimum standards.
Michael McMahon indicated, in a revealing contribution, that he is perhaps not yet fully committed to joining any progressive coalition of forces against UK cuts to the Parliament.
I would be more than happy to join a progressive alliance if the SNP was actually a progressive party.
As I indicated, I intend to rise above the fray, but I remind Mr McMahon who the bad guys are when it comes to cuts.
Derek Brownlee made a case for stability, and pressed for detail on the council tax freeze. Jim Tolson discussed the distribution formula for local authorities and the council tax freeze, and subtracted the number he first thought of. Bob Doris gave some context to the report, particularly regarding the pitfalls of shared services and the need to build a united front on the issue of cuts.
Mary Mulligan, in a considered speech, talked about the whole purpose of local government and the costs that redundancies can bring for local authorities. John Wilson indicated the importance of 22 June as the date for the emergency budget statement, and raised issues around the Arbuthnott report. Ross Finnie asked us to consider the boundary between local and national Government, and pursued the comparisons that were often made to the committee in relation to Scottish Water.
Ian McKee talked about the desire for control over a local authority by its citizens, and Sarah Boyack spoke about the City of Edinburgh Council, the curriculum for excellence, motorways and trams.
Today’s debate has been insightful, and the report has engaged the Parliament and the Scottish Government in an entirely helpful way. Nobody underestimates the financial pressures that local government is under, but nobody should doubt the external financial pressures that apply to this Parliament—and which will continue to apply for as long as its overall budget is determined elsewhere.
I thank the committee, its convener and staff for all their work during the past three years. I wish my successor as deputy convener of the committee every joy in the future—or at least every joy that it is possible for any well-adjusted person to derive from a subject such as local government finance.