Plans for merged council service provision may not be enough to meet new budgets

Published on Wednesday 25 November 2009 20:47

THE sharing of services between several councils and within council areas is now seen as the only way forward for local government and the public sector if they are to meet unprecedented cuts in spending without damaging essential services.

This week's unveiling of radical plans for the sharing of services among eight councils in the west of Scotland, coming shortly after proposals were disclosed for the pooling of resources across the south and east of the country, demonstrate that the agenda for change is being stepped up.

But is enough being done? Are councils just scratching the surface of the problem? And with payrolls a massive cost for local government, can the savings required from shared services be achieved if, as expected, the unions vigorously oppose the inevitable loss of jobs?

The issue of sharing services has been on the agenda for a number of years. In Scotland, it was first promoted by former Labour finance minister Tom McCabe. He sparked controversy among senior local government officials when he questioned why a country the size of Scotland needed 32 council chief executives, 32 directors of finance and 32 directors of education.

There were hints that Mr McCabe and his colleagues wanted to see councils merged across borders to run front-line services such as education and there were suggestions that ministers were ready to unveil a plan to dismantle the existing 32 councils and replace these with just 15.

When the SNP won power as a minority administration, it confirmed its pledge to retain the current local government structure. But the new finance secretary, John Swinney, the minister who pioneered the "historic" concordat between the Scottish Government and local authorities, made it clear he expected councils to demonstrate, in return for a guarantee there would be no boundary changes, that they would enter into partnerships involving other councils and public bodies.

There are already a number of examples of shared initiatives throughout Scotland, such as Orkney Islands Council's initiative to join up a wide range of functions with health and enterprise partners, West Lothian's "joined up" civic centre, the online recruitment portal launched by the Convention of Scottish Local Authorities (Cosla), the Scotland Excel centre for procurement and Customer First, an initiative that aims to provide customers with easier access to public services.

But more radical plans are now emerging with this week's disclosure that eight councils in the Clyde Valley region are considering plans drawn up by Sir John Arbuthnott for the sharing of services such as healthcare, transport, road maintenance, certain education services and back office functions.

Similarly, the recent proposals unveiled for Edinburgh, Lothians, the Scottish Borders and Fife, represent a significant step forward in shared services initiatives.

However, it is clear more needs to be done. At an appropriately timed conference on shared services in Edinburgh this week, Mr Swinney emphasised the need to increase the pace of change. He warned: "Unless we deliver more impetus on shared services we will be unable to meet the challenge of the public spending pressures and, as a consequence, some of the impact is likely to be felt on core services where we want to avoid that pressure being felt at all costs."

The finance secretary was asked by a member of the audience whether the Scottish Government should intervene and do more to direct councils on the way ahead for shared services.

Mr Swinney hinted at the possibility of intervention, but only as a last resort. He stressed his belief that "local partners" were best placed to decide how best they would be able to take forward the shared services agenda but stressed that he expected to see stronger local leadership on the issue: "If I don't see it happening then I may well have to take recourse to the type of action you suggest – but that's definitely not my preference," he said.

The planning of shared services is far from being a simple process and involves a great deal of co-operation. Cross-boundary rivalries have to be cast aside and staff won over to the concept if it is to work.

As Professor John Baillie, chairman of the local authority spending watchdog, the Accounts Commission, pointed out, there are a number of "barriers" to shared services.

These include significant set-up costs, resistance from staff due to possible job losses, problems in combining the terms and conditions of jobs and equal pay, logistical and cultural issues; leadership problems and the threat of reputations being damaged if a sharing project goes wrong, concern over loss of local control and a reluctance to share data.

Emphasising his commission's view that more needs to be done to promote shared services, Mr Baillie said: "Many of these barriers appear to be quite high, but given the will, particularly the political will of local government, they are far from insurmountable."

So far, the savings achieved from the limited shared service initiatives introduced are relatively small.

Eddie Frizzell, a professor of public services management at Queen Margaret University, told The Scotsman this week that there had been a fudging of the real issue: the implication for jobs. "No government so far has been willing to say where you can make savings in services if you don't cut the number of people employed," he said.

Sir John Arbuthnott side-stepped questions on the jobs implications when interviewed by the BBC.

Pressed to say what the job implications of the Clyde Valley project would be he said: "I can't give you a figure at the moment because they (the councils] are working on it. It's not a figure I have up my sleeve."

But he believed it was not in the interests of anyone to add more unemployed to the already growing number of people out of work in Scotland.

Mark Ferguson, branch secretary for Unison in Renfrewshire, who participated in a panel at the shared services conference, said he did not think enough consideration was being given to the potential loss of council jobs and the impact on local economies.

"If you see bigger authorities eating up some of the work of the smaller authorities then you can see those jobs disappearing from those communities," he warned.

Local authority leaders give the firm impression that, despite some of their reservations, they are now committed to a radical shared services agenda though there are differences of opinion on how important an issue it is. A vote taken at the conference showed that 62 per cent of the audience considered it to be "very important" and 36 per cent "reasonably important".

Despite reservations, it is felt there is no other alternative if a major budget crisis is to be avoided amid predictions that spending could be slashed by up to 15 per cent.

It is also recognised by some, that public service loyalties may need to be sacrificed and changes made to allow more involvement by the private sector.

Sir John said: "Four years from now is too late. This is a crucial time for councils. They must get on and move towards that savings target." The strategic human resource spokesman for Cosla, Councillor Michael Cook, advised: "We need to do much more if we are to serve the customer and meet the challenges ahead." And Mr Swinney warned: "There is simply no alternative in the economic climate."