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Monday, December 05, 2016

Time to encourage the local

With all the fervour over Brexit, there is a peculiar vacuum in our national conversation about how Scotland is fairing in the face of low growth and a so-called “austerity” driven, purportedly, by massive “cuts” in public spending.

At TaxpayerScotland we have never bought the story of a public sector being hollowed out to its last bowl of gruel. Spending on annually managed expenditures is highly inflexible, and we are aware that other public sector overheads, particularly pensions and debt repayments, are gradually being dealt with - albeit from a very high starting level.

So, it is gratifying to have read Audit Scotland’s measured report on local government finance. We recommend it for all with a level head and scepticism about demands for more money by those who live off public spending.

A few highlights stand out:

  • Ten to fifteen percent of local council income goes on debt repayments. Past profligacy still costs today’s taxpayers a huge amount of our hard-earned cash
  • While debt levels vary, there is a general trend of very gradual reduction. But some councils are still deeply indebted.
  • Staff costs are being reduced, but again very slowly. And each staff layoff costs around £35,000 pounds of our money to achieve.
  • There is a wide range in performance between councils. The fact that taxpayers can compare this performance is one of the drivers of control and, we hope, change.
  • Council incomes are in fact going up, with both more money coming from central sources, and a large increase in fees from priced services. The pressures it seems are coming from the burden of social care and having to cater for a range of centrally imposed mandates.
  • Local Government finance is often thought to be turgid and boring, but the fact is that it is a lot more real than central government’s manipulation of Barnett consequentials, capital investment funding and puffed up promises over insignificant sums spun as if to declare them revolutionary. Key to local finance is that Council Tax is local and spent on local things local people can recognise; and it is a household bill that we actually have to pay.

    How much better if the central state had the courage to re-assess this localisation of tax and spend and trust the people to understand what is good value for money. We think taxpayers would quickly stamp on too much debt being carried, too many staff being employed and any repeatedly poor performance in delivery.

    Audit Scotland points out that forward planning at local level is being severely hampered by slow short-term planning from the centre. That’s a shame; local councils can act quickly if they get a clarity of purpose built into their management style. TaxpayerScotland recently gathered together all the functions we could find that our local councils performed on behalf of their taxpayers. We found at least 175 separate administration tasks. No wonder they like to have cabinet governance and corporate services departments, but again what a nonsense that the costs of these management structures is added to the repetitive tasks of bin collection, schooling and looking after the frail elderly.

    The obvious thing to do with our councils is to break up their corporate conglomerate structures and identify separated cost and revenue centres across the board; including localised overheads for each function. All those costs should be reported separately so that taxpayers can see the use to which their pounds have been put - and compare their council with others. We need to put in place the strongest possible incentives not to waste our money or spend it unnecessarily.



    'Government is the great fiction through which everybody endeavours to live at the expense of everybody else.'
    Frederic Bastiat