Arm’s length but not hands off - More control needed of arm’s length organisations

09.03.2016

Bodies set up by local authorities to deliver public services need firmer governance according to a report issued today by the Scottish Parliament’s Local Government and Regeneration Committee.

Arm’s length organisations, known as ALEOs, are bodies which are formally separate from a council but subject to its control and influence. Increasingly local authorities are using ALEOs to deliver public services, such as leisure services, arts and cultural services and social care. Councils retain responsibility for the provision of these services even though they are delivered by ALEOs.  

The Committee’s report comes at the end of a short inquiry looking at how ALEOs operate. The Committee report makes it clear that as ALEOs are becoming responsible for delivering a greater number public services, local authorities must ensure that adequate monitoring, governance and public accountability takes place. 

Committee Convener, Kevin Stewart MSP said: 

“More and more of Scotland’s public services are being delivered by arm’s length organisations, such as leisure services and social care. These are services which many of us depend on from day to day. 

“Although ALEOs are set up for a number of reasons, what has become clear to us is that there must be a much more hands-on approach from the local authorities in which they operate. 

“Our Committee found that monitoring procedures for ALEOs varies widely across local authorities in Scotland – something which is simply not acceptable for services which are responsible for spending approximately £1.3 billion of public money.  

“This is why we suggest there should be greater democratic accountability, public awareness and involvement and that local authorities must continually monitor if an ALEO remains the most effective way of service delivery.”    

The Committee’s report also notes that the definition of an ALEO can vary from local authority to local authority. It recommends that a legal definition of ALEOs should be provided by the Scottish Government. 

Background 

Usually taking the form of a company or a trust, there is no definitive list of ALEOs operating in Scotland, although a report issued by Audit Scotland in 2011 stated that at that time each local authority typically operated approximately four ALEOs. 

Figures provided to the Committee from Audit Scotland demonstrated that in 2012-13, ALEOs spent approximately £1.3 billion and employ around 25,000 people. 

Some of the most well-known ALEOs include Glasgow Life which is responsible for delivering culture and art in Glasgow, Transport for Edinburgh which provides the bus and tram network in Edinburgh and Bon Accord Care which provides care services in Aberdeen.

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