Scotland Finance

Money talks… but it don’t dance, it don’t sing and it don’t walk


From Rob Ellis via Flickr

The next meeting in the series hosted by the Academy for Government (see previous blog) took place one rainy Friday in April. The subject for this meeting was the funding of local government in Scotland. Kim Fellows reports back…

While you might have thought this would be a dry topic, the territory of accountants and auditors turned into an extremely interesting and lively session.

Robin Haynes from the Scottish Government addressed the meeting about the mechanisms for funding local government, including property tax and central government funding. Fraser McKinlay, Audit Scotland, shared his insights into local government finances past, present and future.

I am not aiming to reflect the discussion only to capture my thoughts following the meeting. One key point made about local government finance is that the funding is a means to an end. Money talks and buys the services for communities that people use everyday. In Scotland as the latest Accounts Commission overview report makes clear, services for education and social work have been relatively protected. However, other services including parks, culture and roads have been hit relatively hard.

Everyone knows that public services are between a rock and a hard place. Ever increasing demands of an ageing population, potential impacts of Brexit and public expectations together with budgets that are under pressure means that public services – for example, health – and council services that people need and depend on everyday of their lives whether they know it or not, are feeling the strain. Everyone shouts when the bins aren’t collected or pavements are broken.

Or course, money isn’t everything. The meeting agreed that yes, money is vital; however, you have also have to adapt and change how things are done, look at commercial opportunities and consider how services are delivered in response to changing circumstances. The meeting reflected that there seems to be little appetite to face the consequences of actions that are taken at national and local levels that impact not just one service but many.

For example, if you cut funding for local government services then people will remain in an expensive hospital bed waiting for a bed in a care home. So-called bed blocking isn’t just an issue of money; it affects the quality of life of individuals and their families. Many councils are using public consultations and participatory budgeting as tools to involve their own tax payers in the process of budget setting and making funding choices.

The meeting agreed that there have been commissions, working groups and committees that have considered the future of local government funding around a new fiscal framework, but as yet no proposals have been accepted. Is it time now to look at England and ask if Northamptonshire is the “canary in the coalmine”? If Scotland is to have the public services that it needs for all its citizens in the 21st century is this the time to bring the debate outside the rarified circles of governments and into the public domain? Perhaps the local governance review currently taking place makes 2018 the right time for this conversation. I hope so.

The discussion resonated with me over the days after the meeting as I walked in Edinburgh parks, used the council gym, library and my bus pass. I wondered idly why members of the public will fight to keep open one facility – for example, a swimming pool – but will not fight for other council services? How can those of us who have influence help to connect citizens with the local services that their tax in all its forms buys?

At the end of the meeting there was an appetite to return to this topic, informed by issues considered in previous meetings, with a discussion of funding models options for local government incorporating learning from around the world.