Accounts Commission: building financial sustainability through service redesign

Greater ambition to redesign services must happen

In the four years I’ve been a member of the Accounts Commission, we’ve seen councils facing deepening pressures. There is a growing and more complex demand, with the cost of delivering services rising faster than funding. 

Local government has been responding, changing how it works and delivering differently for years.

Now the scale and pace of change must shift to match the challenges ahead – we need to see greater ambition aligned with community engagement, effective planning, funding and delivery of service redesign. 

Failing to do this risks the financial sustainability of local government over the next three to five years.

Greater ambition is needed

As we set out in our latest report, the pace, scale and ambition of change must accelerate to meet current and future challenges. 

Councils have already made considerable savings, including from transformation, but this has been insufficient to close the existing budget gap. 

While only part of the solution, transformational approaches in areas such as early intervention, prevention, partnership working or digital can reduce costs while bringing meaningful improvements for those who use council services. 

The Accounts Commission recognises that delivering transformation is challenging and some initiatives may not succeed. But delaying action risks greater costs, tougher decisions and increased challenges in future years. 

Learning and collaborating are vital

Councils can’t redesign services alone – it’s critical they work across local government, and with local, regional, and national partners.

Although communities are all unique, councils across Scotland face similar challenges, with opportunities to share knowledge, data, expertise and experience around planning and delivering change, with greater efficiencies from shared learning.

National sector-led transformation work, led by SOLACE and the Improvement Service, alongside local approaches, has the potential to help councils achieve financial sustainability and deliver better outcomes. 

This work aims to capture lessons from early reform efforts across the sector, identify the challenges that need to be addressed, and outline an ambitious vision and roadmap for the future of local government.

What do we mean by service redesign?

It’s about redesigning and changing how local government operates and delivers services to improve people’s lives, but in a financially sustainable way.  

We’re clear there’s no single definition of what redesign looks like. 

Each council must have the flexibility to transform services in ways that best suits their communities, whilst building on the experience of what’s worked locally, regionally and nationally.

Delivering reform successfully

In our most recent report, which brought together the audit evidence of how many of Scotland’s councils are approaching these fundamental elements of transformation, we found a very mixed picture. 

Without vision, planning, governance, collaboration and innovation being consistently in place, councils won’t be maximising the potential to successfully deliver the transformation that’s needed. More details on these key elements are highlighted in the exhibit below.

Working with communities

Working with communities is vital. Truly transformational approaches have the potential to reduce costs and improve outcomes for those who use council services, including faster and more accessible service delivery. 

But councils must be clear about the benefits and impacts of service redesign. Decisions can have unintended consequences, particularly for the more vulnerable members of communities who often have a greater need for council services. This includes the risk of digital exclusion – together with the Auditor General for Scotland, we reported on this in August 2024.

Actively involving communities when resources are limited is time and money well spent.

Failing to do so risks opposition to decisions, potential legal action and savings having to be made elsewhere.

As councils redesign services, there are significant opportunities to learn from and work with each other, building on the many initiatives already in place. That’s why our latest report provides a wealth of examples from Scotland’s councils, highlighting many examples of redesign. We’d urge senior officers and councillors to look across local government and consider what could work for their area, building on learning and experience.

Delivering for the future: Transformation – Case studies