“Over the decade of devolution, in which the Scottish budget has increased from £17bn to £34.7bn, funding levels across the public sector have been largely determined by an increase on the previous year’s allocation. With financial analysts predicting that the Scottish budget could be between 7% and 13% lower in real terms by 2013-14, the requirement is now for reduction rather than growth. The challenge to make public services lean and effective will be considerable and, with wages a major cost, it is inevitable there will be job losses, although both the Scottish Government and the local authorities are committed to voluntary rather than enforced redundancies.” – Audit Scotland Report - Glasgow Herald: 5/11/09
So Glasgow is being ‘ripped off by Holyrood’ according to Willie Bain (PPC Glasgow NE) while the reality is the action of the UK Governing Party he seeks to be an MP for is the one squeezing the Scottish pocket money allocation. The councils in Scotland that are being hit hardest are mainly, but not wholly, Labour run or previously Labour run. In both North Lanarkshire and Glasgow the impact of the budget reductions from Westminster on Scotland are going to hit hard with wide spread need for school closures, for example, to bring council budgets previously propped up by ‘ring fenced’ funds from ‘special needs / area of deprivation’ calls on Holyrood or Westminster no longer available. In Labour run North Lanarkshire battle lines are already being drawn up within the ruling party between the realists and the luddites with the unpleasant prospect of a blood letting that will make Labour’s previous worst Scottish council blood letting in Dumbarton look like a tea party. Similar to their ‘big brother’ in Labour run Glasgow they are finding the rationalisation needed to contain education budgets, just one of many areas, hurts their own parochial interests – it’s all Holyrood and the SNP’s fault, they wail – yet Glasgow gets the biggest allocation from the Council pot (£1.1 billion in 2008 – 2009), not including the extra funding being provided for the Commonwealth Games.
The feather bedding has gone and the two councils that were the main opponents of the SNP’s deal on the council tax freeze are suffering and squealing the loudest. Many in Scotland believed that their opposition to the new deal was simply the gut Labour ‘anti SNP’ on anything position and were surprised when the two largest, Labour Council bastions were out voted by the rest of COSLA and forced to toe the new line, creating a new relationship between the two arms of government in Scotland. Maybe as the impact of the new accord bites we see the real reason – run away spending and the problems they knew it would cause to the Labour vote in the run up to both the General Election in 2010 and Holyrood the year after.
The whole of the 2007 COSLA / Scottish Government agreement can be found here but I will aim to distil the key points that have changed the relationship.
The Council Tax freeze was achieved by the SNP Government putting an initial extra £70 million of the Scottish Budget into the COSLA pot. At the time there were arguments the money would come from top slicing other national budgets but the reality is it was funded by a reduction in Scottish Government running costs by over £500 million (Scottish Executive written answer to Lord Foulkes, MSP, Labour).
In return COSLA agreed to the SNP’s plan to have a set of 45 Single Outcome Agreements (SOA) to determine the effectiveness of councils in key areas of performance. These SOA’s replaced a whole raft of statutory and binding notices with a simpler way of annual reporting that reflects local needs rather than central diktat. Over arching these SOA’s are 15 agreed key national performance indicators such as crime, health inequalities and education. The SOA model that the Scottish Government has introduced is based on one developed by the US State of Virginia which uses an outcome agreement approach to measure the performance of state agencies.
In terms of ring fenced budget requirements on Scottish Councils, the concordat reduced the number from 59 to 17 areas. The 17 are all statutory areas such as the Police or the Fire Service and were agreed by both sides. This, in turn, gives local councillors greater flexibility to meet their local needs, as defined by their applicable and agreed SOA’s, in partnership with other agencies such as NHS Scotland, especially in areas such as the provision of care in the home packages.
The fiscal package agreed between the SNP and COSLA has put in place annual increases to the council’s financial pot, against the real term reduction of the overall value of the Scottish pocket money of around 2% per annum over the term, the rises being between 0.5 and 2.3% per year and maintain the capital expenditure fund at £2.9 billion per year over the course of the concordat.
COSLA and the SNP open their joint Concordat Statement with the following:
“This concordat sets out the terms of a new relationship between the Scottish Government and local government, based on mutual respect and partnership.”
For me, as a voter, the concordat is delivering what it says on the tin and persuades me further that fiscal autonomy for Scotland would work, as it is already working within councils across Scotland, by creating real responsibility and accountability within the Scottish body politic. The Calman Report agrees that fiscal autonomy for Scotland is the way ahead, 80% of Scots asked want fiscal autonomy (of which 45% want it within a UK Union and 35% want independence as the final outcome of fiscal autonomy) and the SNP, through this concordat, are making a very powerful case across both views.
That leaves Westminster in a quandary as all the Unionist Parties want the Calman Report booted into the long grass as far as fiscal autonomy for Scotland goes, yet this and the election of ‘Call me Dave’ is worth around 25% of Labour and the Libdems Scottish vote share going to the SNP in 2011 (Glasgow Herald survey) and that is what the SNP is getting right.