Councils poised to merge services to save public sector cash

KEY services across council boundaries in the north of Scotland could be merged to cut costs in the face of the expected financial squeeze in the public sector.

Council leaders in the Highlands, Moray, Aberdeen City and Aberdeenshire have held initial talks to speed up moves towards joint working.

Millions of pounds could be saved by sharing some education services as well as waste disposal, payroll handling, transport and council tax collection.

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The leaders – conveners and deputy conveners – met earlier this month to give political impetus to the move, which has already been discussed by senior officers. They believe that the scale of the financial crisis facing the public sector is so great that action is required now.

Although the proposals are likely to trigger opposition from unions concerned about further job losses, they could, if successful work as a model for Scotland's other 28 councils.

Last week, Andrew Goudie, the chief economic adviser to the Scottish Government, warned that the public sector in Scotland faces a spending squeeze of up to 35 billion over the next 15 years.

Allan Wright, depute convener for Moray Council, which is facing cuts of 40 million over the next 6-7 years, said: "In the prevailing economic climate, it is essential that cost and service sharing between councils becomes a priority."

John Stewart, leader of Aberdeen City Council, which has to make 23m in cuts this year, said a range of possibilities for service sharing was discussed with "nothing considered off limits.

"The basis of the discussions were what opportunities are there across every service that we provide, from the more obvious to the less obvious.

Aberdeenshire Council is seeking savings of 10m this year on its budget. A spokesman said: "In the current financial climate local authorities have to look at every opportunity to be more efficient and effective in terms of service delivery, including shared services."

Highland Council, which has already made 23m savings and needs to find a further 36m over the next three years, also confirmed it was involved in the talks.

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The initiative has been welcomed by Sir John Arbuthnott, the former principal of Strathclyde University, who led a Clyde Valley Review team which examined joint working plans for eight local authorities in the central belt, including Glasgow.

His review identified possibilities for integrated working in seven areas – health and social care, waste management, social transport, property sharing and management, joint development of support services, common charging strategy for services and economic activities. It also suggested joint education boards to manage schools across larger areas.

Sir John, who also chaired a Royal Society of Edinburgh working group which urged councils to share services, said : "I'm pleased that this group of local authorities is undertaking this work. It's very timely and exactly what we should be doing. The pace of change and challenge is now urgent. We cannot step back and take a long view of this."

He added: "Shared services is a relatively old concept but it has not really paid the dividends that people expected. The impetus now is to capitalise on the work that has been done and we must extend it."

Arbuthnott's Clyde Valley review – published last November – prompted calls from union for councils to "come clean" on plans to share services.

The Scottish Government, which this year has a budget of 29bn, has already set up an independent committee to examine options for controlling public spending, chaired by Crawford Beveridge, a former chief executive of the Scottish Enterprise development agency.