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A different way of working
Local Government Chronicle – 16 June 2011

Imagine a country where ministers and council leaders meet in an atmosphere of mutual respect and civility to negotiate their powers and finances, where government spending is directed to outcomes agreed locally and where ringfencing is a distant memory. By Mark Smulian

English councils, used to conflict and abuse from communities and local government secretary Eric Pickles, might look enviously at Scotland.

But not everything is harmony amid the heather, as the Scottish National Party government settles into office.

A lengthy council tax freeze means local financial autonomy is fading, politicians are talking about centralising services in the name of efficiency and the spectre of local government reorganisation refuses to die.

Scotland has had 32 unitary councils since 1996, and the introduction of proportional representation in local elections in 2007 broke Labour's historic hold over the central belt, bringing in joint administrations of almost every political permutation.

Elections the same day brought the SNP to minority power at Holyrood on a platform of scrapping council tax and replacing it with a local income tax (LIT).

It ultimately failed to do that, but it wanted a council tax freeze pending the proposed change.

Negotiations with councils over that led to the concordat of 2007. This laid down council finances, and policies to be delivered in return for an end to most ringfencing.

But its real significance lay not in these specifics but in creating 'parity of esteem' between the Scottish Government and the councils.

Unlike England's forgotten Central/ Local Partnership, the concordat is widely seen as having created a genuine partnership between the tiers based on mutual respect.

Ronnie Hinds, chair of Solace Scotland, said: "The concordat formally lapsed when the parliament was dissolved but we would want to see the best aspects of it continue, and the most important is the focus provided by the single outcome agreements.

"It has given us the way to home in on end results across the public sector.

"We are a smaller polity than England so a lot is down to personal relationships and it the concordat has given direction without being too bureaucratic."

East Lothian Council chief executive Alan Blackie agrees: "Relations with the Scottish Government are relatively harmonious.

"The most important thing is that there is good dialogue with the government at both officer and elected member levels. My council leader can see the cabinet secretary, and that certainly would not have happened before we had a Scottish Government.

"There is a good dialogue with the civil service and [permanent secretary] Peter Housden is very approachable and makes sure his directors also are."

Rory Mair, chief executive of the Convention of Scottish Local Authorities (Cosla), describes the relationship as one "where both sides respect each other and where we might disagree but if we do we explain why and we do not fall out, and we do not voice disagreements in a way that would damage the other party".

The Scottish Government also appears to value the concordat. John Swinney reappointed as its finance secretary held a meeting with Cosla in May at which he declared the concordat had "transformed the way we work together and recognises that local authorities are partners in the delivery of public services". He added that the meeting "continued to build on the relationship".

Is it all really such sweetness and light? Ross Martin, a former Labour councillor who now runs the Centre for Public Policy in Scotland think tank argues that though central and local government relations have improved, "the problem in Scotland is that there has never really been a proper discussion about central/ local relations since devolution and the concordat was a bit of sticking plaster on that".

John Curtice, professor of politics at the University of Strathclyde, said: "Relations between local and central government in Scotland are less confrontational than in England, which isn't difficult with Eric Pickles there, but they are not without controversy.

"The concordat has worked if you consider that councils were made an offer they couldn't refuse, but one that involved several carrots on the end of the stick.

"But the SNP has said it will keep the council tax freeze for this parliamentary term so that has long-term consequences for the financial autonomy of Scottish local government."

Newly endowed with an outright parliamentary majority, the SNP is sticking to its five year council tax freeze pledge, and seeking a long term move to LIT.

Although it insists the freeze is fully funded, there are stirrings against it in local government.

Colin Mair, chief executive of the Improvement Service, points out: "The money raised locally is now under 10% of budgets so it does affect freedoms and flexibilities if councils wanted to raise more locally.

"The freeze costs 70m a year but that is cumulative and there is an opportunity cost of what you could do with that money, which is becoming an issue."

Freezing council tax is, in effect, fiscal centralisation and part of an emerging trend that worries councils.

Last autumn Labour began to talk about a centralised social care service, on grounds of efficiency and easier links to the health service.

A similar financial argument has been advanced for centralising both the police and fire services.

Professor Curtice explains: "Labour started the idea when [then leader] Ian Gray said it would save costs and improve services and the SNP took it up because everyone needs to save money and it thinks this might do that."

Mr Martin says centralisation reared its head during the election period "for no more dignified reason than that the parties were squabbling about what to say on public service reform and had no particular plans, so they chose this".

Any change waits upon the Christie Commission (see box) but behind centralisation lurks the possibility of restructuring, a mere 15 years since the current councils were created.

Fiona Lees, chief executive of East Ayrshire Council, says: "We need not structural change but a review of the kind of services we deliver.

"The issue with restructuring is that if you have lived through more than one of them you know they come with unrealistic views of savings and efficiency. I'm quite clear that anything done should be of direct benefit to communities and that is not always the case with restructuring."

Rory Mair says council leaders are "unpersuaded there is a case for restructuring, quite apart from the centralisation argument.

"The costs of restructurings are usually higher than expected and the benefits lower."

Colin Mair argues for any reorganisation to be on the basis of public service integration under a democratically elected local council.

"For example the islands have three or four public authorities each serving a few thousand people, they could perhaps become one and that model could perhaps be applied elsewhere in theory."

Despite its relative harmony Scotland cannot escape the financial squeeze affecting councils across the UK.

While shared services are now common as a route to efficiency savings in England, they are less developed in Scotland, partly because there are no councils small enough to easily share senior managements.

Mr Hinds thinks a bit of centralisation might be beneficial: "It is fair comment that shared services has been more talked about than implemented here and I would support it if the Scottish Government were to give us a bit of direction.

"For example, on ICT it may be there should be standardisation rather than 32 different ways of doing everything.

"A degree of direction may be the external catalyst we need to get moving and the lack of it the reason why we have been less successful on shared services than we might have been."

Mr Blackie says: "We need to look at headcount, ICT, shared services and better procurement and we need to learn from England.

"Shared services has been talked and thought about a lot but there has been little impact on the ground here."

The Christie Commission may point a way forward. Rory Mair says he expects "a route map rather than a detailed report", but hopes "any change proposed should be justified by the evidence and there should be some way to evaluate evidence objectively".

The easier relations between local and central government in Scotland arise in part from it being a small country where key players are well known to each other, councils are similar in scope and voters remain deeply wedded to public services and so are less impressed than their English counterparts by tales of municipal 'waste'.

These factors may make it hard for England to adapt Scottish practices, and vice versa.

As Rory Mair puts it: "It is not a matter of us pick and mixing things from England, but of being aware of developments in local government there just as we are of those in Scandinavia.

"Our councils do everything and are all the size to do that, whereas in England you have a huge range of councils, so it really is different here."