Chamber and committees

I would not suggest that ring fencing is a precise science; rather, it is a question of judgment.

As I indicated in my earlier responses to the convener, in 2007, the Government substantively relaxed ring fencing in local authorities. I used to know the numbers off the top of my head, but I am a little rusty nowadays. I think that we reduced ring fencing to about 15 per cent of the local authority budgets, when it had previously been as high as around 70 or 75 per cent. We reduced it because local authorities argued that they would be better able to meet the needs of their local communities in their financial decision making by having that greater degree of flexibility.

That point lies at the heart of Ms Gallacher’s question. Local authorities have that flexibility to meet the different and distinctive needs in their localities because the demand that one local authority needs to meet will be different from that of another. We have tried to address that as far as possible.

When the Parliament wants the Government to ensure that particular outcomes are achieved—the Government might wish to do that, too—the tendency is to introduce ring-fenced funding so that we can be certain that resources are released in expectation of those outcomes. That relates to some of the questions that Mr Briggs put to me and it is often the judgment that is involved in deciding whether resources should be ring fenced or put into local authorities’ general funds.

On Ms Gallacher’s point about the budgets that are available for local authorities, the Government has wrestled with many financial challenges over the past 10 years. As we wrestled with the challenges of austerity, we tried to provide the best and strongest settlements that we possibly could for local authorities.

The Parliament, of course, must agree budget provisions and political parties always have the opportunity to shape the Government’s budget proposals by exerting influence over them. That will be the subject of debate in the forthcoming budget. One thing that strengthens local authorities’ ability to meet the needs in their communities is the degree of flexibility that the Government has provided for them by relaxing ring fencing.

The Government gives on-going consideration to those issues through our dialogue with the Convention of Scottish Local Authorities. I cannot give you a definitive assurance because the issues are still the subject of consideration. The Cabinet Secretary for Finance and the Economy is leading the work on the development of a rules-based fiscal framework, which is being discussed with local government. That work will conclude when those discussions are completed. The finance secretary will be able to update the committee and Parliament on the development of the fiscal framework once that work has been undertaken.

It is important to recognise that, for many years, significant flexibilities have been available to local authorities for their financial management. Back in 2007, when I was the finance secretary, the Scottish Government substantively relaxed ring fencing, which was a key request of local authorities, to enable them to have a range of flexibilities at their disposal. That in itself provided local government with much greater fiscal discretion in order to address issues.

I am not sure that I would establish a connection between proposed industrial action in local authorities and a fiscal framework for local government. Those are two distinct issues. It is, of course, a matter for local authorities to conduct their employee relationships and negotiations—where it is appropriate for them to do so. Local authorities deal with those for the majority of their employees. Teachers are a somewhat different case, because a tripartite negotiating framework is in place. However, fundamentally, it is for local authorities, as employers, to take forward the relationship. I do not think that industrial action necessarily relates directly to any fiscal framework.

A national care service is currently the subject of consultation. One of the key points that the Government has made throughout is the importance of ensuring that appropriate local voices are heard when considering the approach to a national care service. It is vital that we hear from and engage with local communities on the delivery of care services, because they matter to local communities. The situation will be different in different parts of the country, so there must be variation and variety in how the service is delivered. It is critical that we hear the voices of local communities during the development of the national care service. That is a fundamental point.

I accept that local government has particular observations about the proposals, and it is important that we hear the voices of individuals who are pressing the Government—as was evident in the independent review—on issues such as the consistency of service performance and delivery in different parts of the country, and the standards that citizens can expect in all parts of the country. Those two fundamental questions have to be wrestled with during the discussions on a national care service.

It is difficult to make a judgment about individual systems. The international review can help to inform our deliberations here about what the right factors and considerations are.

Fundamentally, the processes that appear to me, through the international review, to be having the greatest effect are the ones that provide sufficient opportunity and scope for communities to shape their contributions to how their priorities are determined. That would best be described as a more permissive approach to the scope and influence of local communities.

A second dimension concerns fiscal decision making. Some of the examples that have been cited have reflected the choices that are made by individual local communities as being of a character that can enable them to take much more responsibility in making fiscal decisions about their wellbeing. I will not suggest that that is easily replicable in this country. Essentially, it comes down to the degree of tolerance of difference in levels of local taxation and local responsibility between areas. I am not sure that we would be able to sustain the argument, or that that argument would be as well received in Scotland as it perhaps is in other places that have provided examples in the international review.

I am interested, throughout the process, in the right level at which decision making should be undertaken and discretion should be exercised. To come back to the argument that I put in response to Meghan Gallacher, I do not think that there is a precise-science answer. I worry about individual communities feeling a sense of loss of control over what happens in their individual localities.

If I think about the communities that I represent—Elena Whitham represents an area with a similar population composition—there are towns in my constituency where, in the past, significant civic discretion was exercised. That created a sense of focus in those communities, which was reactivated during the pandemic. Most, though not all, of the really successful and impactful developments that took place during the pandemic happened in those communities. In substantial towns, people came together and could put in place fixes to ensure that everybody was looked after. Colleagues who represent similar areas to mine will know exactly what I am talking about.

A lot of that has been eroded over many years, probably since local government reorganisation in the 1970s, and there is a sense of loss in communities about that. However, over the years, there have been many good examples of how that sense of loss has been addressed by good community endeavour.

When we move away from those functions, which are fundamentally about locality, a sense of community and pride in the community, we come to the more sophisticated delivery of public services, which Parliament legislates for. The delivery of those public services can often carry significantly onerous burdens. That particularly applies to the quality of public services in areas such as adult and child protection. I worry about the delivery of those services across 32 local authority areas, given that, although the population base in some areas is dramatically smaller than others, the burdens are the same. The burdens that Parliament applies to the delivery of the child protection service in the city of Glasgow is exactly the same as those that it applies for Clackmannanshire Council. We expect assurances to be offered on the same basis. However, because of the difference in size, cases will be handled more frequently in the city of Glasgow than in Clackmannanshire.

I took a number of steps as education secretary, and encouraging collaboration among local authorities was a particular priority. In the area that I represent, there has been a great deal of collaboration between three authorities—Dundee, Angus and Perth and Kinross—on the delivery and improvement of education services and child wellbeing services across those three council areas, and I see significant improvements arising as a consequence of that. It is really welcome when councils collaborate at a multi-authority level.

That should not be interpreted as a Government commitment to force that upon people, because that is not a particularly good way to proceed. In 2016, when I was education secretary, I advanced the concept of regional improvement collaboratives, and the idea was met by a fair amount of hostility and resistance. However, as Ms Whitham will have experienced in Ayrshire among the three local authority areas there, once people got into a room and started talking about their challenges and the common themes, the collaboration that came from that was pretty beneficial for children and young people in Scotland.

Indeed, one of the pillars of the educational response to the pandemic was the west of Scotland improvement collaborative. The collaborative did a huge amount of excellent work to record online learning, which was then made available on a choice basis to school pupils, families, teachers and local communities right across the country through the common platform that we created in the e-Sgoil. The collaborative was a fundamental source of thousands of the lessons that were recorded. I pay warm tribute to everybody who was involved in that, because it was a sterling piece of work that helped in the delivery of education.

Therefore, there very much is a space for collaboration among local authorities. What was achieved in education between 2016 and 2021, against a background of a lot of hostility to and scepticism about the concept, helped us enormously in delivering sustainable education during the pandemic.

We have to do that by creating the space to enable communities to advance the agenda, although I do not think that there is merit in replicating the burgh council model that was in place prior to the 1975 local government reorganisation.

One of the great privileges of my office is that I can see at first hand good innovations. In communities that I represent and in other communities around the country, I have seen developments emerge—through development trusts, for example—through which community capacity has been built up year after year by communities committing to that.

The concept of a development trust—that is an example and I am not prescribing it as a route; a Scottish charitable incorporated organisation or something else might be used—brings together community industry, which enables developments to take place. Other propositions grow from that, and communities can then exercise much greater and more distinctive delivery of services and purpose. Then, a positively engaged local authority will recognise that that is happening and seek to engage with the community to ensure that more functions are deployed in the locality in a way that has the impact that we all seek. That might well address some of the points that Mr Griffin put to me about the extent to which people feel that they can shape their local community agenda.

There are very good practices around the country under which local authorities enable much greater discretion to be exercised at local level. If that were to be done in partnership with the development of development trusts or SCIOs, or through wider community engagement activities, that could address the fundamental point that Elena Whitham puts to me and which I recognise—that, in some communities, people feel a sense of remoteness from public authority and are anxious to shape their community’s future better.

I recall some discussion of those points. To be on the safe side, I had better write to the committee about any specific work that has been undertaken.

To go back to the issues of local government finance, two points are relevant. First, the formula to distribute funding among local authorities is a matter of dialogue and agreement with local authorities. If there was to be any proposition to change the distribution of funding for them, that would obviously have to be agreed by them. I think that there is a reluctance in local authorities to discuss the distribution formula at present, and that has generally been the case.

Secondly, in previous budgets, we agreed a supplement for the City of Edinburgh. I negotiated that point with the late Margo MacDonald in the 2007 to 2011 session of Parliament, and that will still be factored into the budget arrangements that we have in place.

There are ways of discussing such issues. Health board funding is determined by the NHS Scotland resource allocation committee, and steps have been taken over time to address exactly the issue that Mr Briggs has put to me.

Those issues are fundamentally about addressing the points that I discussed with Elena Whitham about how to build capacity in communities so that they can exercise those influences. If we were to pitch up in communities and say, “Here’s a couple of hundred thousand pounds to do things,” some communities would be able to handle that without any difficulty whatever, because they have capacity that has probably been built up through the establishment of a development trust. There might be proceeds from wider revenue sources—for example, communities in my constituency benefit from the proceeds from renewable energy projects, so they have resources that can enable them to build up capacity.

However it happens, there has to be capacity in a community to handle things. We cannot just pitch up in a community and say to a group of volunteers, “Here you are. On you go, and good luck.” There has to be capacity, which has to be actively built up. We have a proper opportunity for local authorities to work with local communities to do that and to activate other sources of funding, whether it is through common good funds, sources such as renewable energy funds or other vehicles.

The Government and I are very supportive of the building up of that capacity. It enables communities to choose where they can exercise the greatest influence and deliver the greatest impact.

If I again think of my community, we had a day of biblical weather in my constituency on Sunday. In Alyth, which is a town that has been blighted by flooding, there is a real activation of community activity and engagement on a variety of issues but specifically on flooding. As the situation became severe on Sunday, the community activated itself. Volunteers undertook work to support and protect others and to put infrastructure in place. Through partnership with the local authority, the community has procured sandbag supplies, which are available for temporary deployment to deal with circumstances as they arise. On Sunday, volunteers were making all that happen.

The community has temporary flood defences—the ones that start off looking like pillows but end up weighing a ton once they are wet—which it deployed. Some good outcomes were delivered. That is because there is capacity to make that happen, which then engages the community. All that is done through capacity at the community level, through social media and by having a really engaged community. It is a perfect example of what I am talking about, albeit in an extreme situation. We all have communities that operate on that basis.

The challenge is how we make that a reliable, dependable and on-going feature in our delivery of public services. The Government cannot prescribe that from St Andrew’s house—it would be folly for us to do that. Having good dialogue and discussion with local authorities is essential, as is local authorities having the right outlook. If local authorities were to enter into the conversation thinking, “We must control everything; we must run everything,” they would put off local engagement. However, if there is a welcoming spirit to embrace what might be possible for a community to handle, we will see an awful lot more thriving as a consequence.

There is undoubtedly a discussion to be had on that, but I would have to inject the word “performance” into that discussion as well. Part of the reason why we have to introduce ring fencing is that we see too great a variation in performance among local authorities in Scotland. Some local authorities might be good at delivering outcomes in certain areas while others are poor at doing so. The Parliament—understandably, I think—pressures the Government to ensure that performance is at a higher level.

We have tried to address that in different ways. As part of the concordat with local authorities, in 2007, I introduced the concept of single outcome agreements. We tried to reduce the reporting burden on local authorities by putting in place agreements with them about what outcomes we could expect them to achieve if we relaxed ring fencing. I have to say that the response to that and the achievement of outcomes was highly variable around the country. The evidence supports that.

I am not in any way closed to what Councillor Evison proposes, but there would have to be an honest reflection of the fact that performance among local authorities is too variable around the country for us to be able to move confidently into that territory at this stage.

The Bellwin scheme was activated by the Government on Friday. The point that Mr Smyth raised with me is clarified by the announcements that were made by ministers. He is correct that the provisions of the Bellwin scheme compensate local authorities for additional costs that could not have been foreseen.

Discretionary scheme funding of the type that we had in 2016 is an issue that the Government can consider. I will visit the area in Annan tomorrow, where I will see for myself some of the issues that Mr Smyth has raised with me. I will have the opportunity to discuss with local stakeholders any issues that arise in relation to specific discretionary support of the type that Mr Smyth mentioned.