Brian Monteith: Local solution to Scotland's spending crisis

Published on Friday 6 November 2009 21:17

THANK goodness for Scotland's auditor-general. If Robert Black did not exist we would have to invent him – for in the unreal world of Holyrood, where so many politicians think that they can still spend, spend, spend money they do not have, his report about the looming £3 billion spending shortfall was the glacially cold bath they deserve.

The publication of his report, prepared by Audit Scotland, is a testimony to one of the real achievements of devolution – the creation of such independent scrutiny of public spending in Scotland – something that rarely happened in Westminster.

The report has brought back to the top of the agenda the need for politicians to face reality and explain how they propose to continue showering the public with free gifts when they do not have the money to pay for them. It is no wonder Alex Salmond and John Swinney want borrowing powers – rather than cut expenditure they would simply pile on more debt.

Now the tired old remedy being suggested by public officials for Scotland's imbalance between income and spending is rationalisation – though I notice that its advocates are careful not to use that loaded word, which conjures up compulsory redundancies and unemployment.

Thirty-two councils? That is far too many they say – it's time to merge them. Eight police forces? Why not just have one? Fourteen health boards? Why not just six, or four or, er, one?

Some of us are old enough to remember that we have been here before and can recognise a false prospectus when we see one. Politicians who claim great savings can be made by merging local councils and various government agencies are either fools or are lying through their teeth. What actually happens is that many, many millions are spent on funding retirement and redundancy schemes, especially for senior officials, involving handsome pay-offs and boosted pensions.

A few months later, after the new bodies have been created, stories appear that those officials that have benefited so well from the public purse are either working for a new authority or providing their services as expensive consultants. Later, over the life of a parliament or two, the new public bodies grow and grow until their complement easily exceeds the old numbers. A lot of costly pain for no gain.

There is also the problem of what really happens at the new bodies – all of which are bigger institutions with bigger responsibilities than what went before. Say central government was to roll up the three Ayrshire councils into one – the new chief executive would need to have a far larger salary than any of the current officials – and the deputies (probably three, to match the areas of the current councils) would most probably have similar salaries to the current chief executives – where is the saving in that?

I have no doubt that some savings could and would be found – usually in shedding surplus office space as people share buildings – but so long as the public bodies continue to deliver the same services in the same way, and often free, the idea of streamlining (a weasel word if ever their was one) the structure is a financial mirage.

The other problem with rationalisation is that, yes, the public wants to enjoy good services at an affordable cost, but it also wants those services to be accountable. The problem with big public bodies is that they remove accountability and become aloof and alienated from their customers. Bigger means more distant, bigger means one size fits all, bigger means the leadership being beholden to no-one. How often do you read of a council or quango CEO resigning for failing to do the job?

The beauty of smaller units is that greater accountability is possible – and with accountability comes better decision-making and a greater awareness and sensitivity to costs and performance.

Instead of ever larger education authorities with their guidelines and instructions as controlling straightjackets, we need greater freedom for headteachers, encouraging innovation to respond to local needs. The cause politicians should be championing is localism – for our hospitals, for our schools for our police forces.

Of course some chiefs of police would like a single force – they would be queuing up to be at the top of that pyramid – but the evidence shows that it is the smaller police forces that consistently have the better clear-up rates. If policy was evidence-based we would be breaking up big beasts like Strathclyde Police (clear-up rate 45 per cent), not merging it with Central (clear-up rate 58 per cent), Dumfries and Galloway (66 per cent) and the rest.

To deliver real change and real sustainable savings requires a review of what is actually being done, asking the question "is it absolutely necessary", and if it is then asking if there are ways it can be done better?

This should mean that some services are seen as unaffordable – I happily pay for my medication and did so for my eye tests. Why I should now expect them to be free is beyond me – especially when, if one looked in Yellow Pages, it was possible to find opticians that offered free eye tests, no strings attached. Continuing with the modest charges for eye tests and prescriptions would save nearly 148 million annually – going some way to pay for the increasing cost of free personal care for the elderly, although that policy is itself another unaffordable shibboleth of Holyrood.

We do not need to look far to see that cutting expenditure can be done – all it needs is an absence of the "public sector good – private sector bad" dogma that is so prevalent in Scotland. Hammersmith and Fulham Borough Council south of the Border is showing the way by delivering a 3 per cent cut in council tax – a reduction for the third year in a row. This has been achieved not by swingeing cuts to services but by carefully reviewing what it does and finding it can be slimmer. It has not merged with another council – it remains locally accountable – but it has trimmed spending, pooled resources and yes, shed jobs.

Until our own councils and public bodies do the same we will need Robert Black reminding politicians that their day of reckoning is coming.

&#149 Brian Monteith is policy director of ThinkScotland.org and former convener of the Scottish Parliament's audit committee.