£1bn black hole in council funding will hit services

Jobs and frontline budgets face cuts as local authorities react to cash crisis

THOUSANDS of jobs face the axe and a range of frontline local services could be reduced or withdrawn as new figures show Scotland’s councils approaching a financial black hole of around £1 billion.

The Scottish Government’s most up-to-date data on projected cuts to public spending shows it will have £2bn less over the next three years, with local government now bracing itself to bear the brunt of the burden.

If alternative savings cannot be found, however, the reduction to the Scottish budget would be around £3bn, with a deeper impact again on vital services such as care, schools and refuse collection.

Several councils have told The Herald, which today relaunches its Reshaping Scotland series, they are facing funding gaps between 2016 and 2019 in excess of what they had to deal with in the previous six years combined.

One leading political economist has warned the need for dramatic savings will mushroom after the current financial year, with funding for frontline services and salaries now expected to feel the impact.

Professor John McLaren, who heads the think tank Fiscal Affairs Scotland, said: “Scotland, like the UK, is only around a half of the way through the cuts to public services process initiated by the UK government.

“Unlike the earlier years, it is expected to be day-to-day spending budgets, rather than capital/investment budgets, that take the hits in the coming years.

“At over five per cent in each of the next two years, the cuts in spending could be more than double the average size seen in the past four years.

“As the NHS budget will continue to be protected, the position for all other public service budgets will involve even bigger cuts.”

Since 2010, councils have received £800 million less in real terms in their grants, with more than 40,000 posts removed through voluntary redundancies, natural wastage and internal changes to how they do business.

The imminent cuts to schools’ and social work budgets, home helps, parks, libraries, refuse collection and even environmental health services also come amid record levels of demand, an increasing elderly population, high energy prices, debt repayments and wage rises.

Evidence from England, where councils have had spending power reduced by one-third since 2010, has shown how they have had to refocus priorities to cope with the impact of cuts sparked by the reaction to the collapse of the banks on their poorest citizens.

Watchdogs have already warned in recent months that most Scottish councils have failed to make long-term plans for the financial precipice ahead.

With the need for reforming councils again falling under the spotlight, The Herald today asks what national and local government is doing to protect the millions of citizens who rely on their vital local services from the oncoming cuts.

Sir John Arbuthnott, who led an aborted attempt to restructure core council services in the country’s most densely populated area, the Clyde Valley, more than five years ago, said: “With the financial pressure ahead, we know what is needed and further change has to happen soon. The pace remains extremely slow.

“With elections forthcoming in May next year, let us see clear plans at national level and delivery by local government.”

Professor Richard Kerley, of Edinburgh’s Queen Margaret University, a leading expert on local government, added: “Plans need to be made now for next year and the year after that.

“All these changes required by public authorities take a longer amount of time than people think and its much easier for trading organisations.

“This should have started long ago, some have but many haven’t. All will be required to make significantly different choices in the few years ahead.”

NO-ONE can say they did not see it coming. As far back as 2009, when it was already known the impact of the banks’ bail-out on public spending would be felt for a decade, the warnings were there.

Scottish local government and the cherished services it provides – care for our elderly and most vulnerable, the schooling of the nation’s children, the collection of our waste and provision of clean, safe streets, parks and functioning roads – would face the greatest pressures for a generation.

Burdened with politically gerrymandered boundaries, a one-sizefits-all structure no longer fit for purpose, playing third fiddle to Westminster and Holyrood and with little scope to raise its own finances, something had to change.

In the immediate aftermath of the global financial collapse, some public services did. With overwhelming political support, the majority of Scotland’s 999 services were overhauled with the creation of a single police force and an equivalent for fire and rescue.

The Herald also launched a campaign, Reshaping Scotland, asking whether councils working across their boundaries, from back office functions through to frontline services, would deliver the long-term savings to deliver what tax payers pay for, need and expect.

It also asked whether Scotland’s political map and its requirement for 32 of every service, complete with staffing structures and administrative support, was – with a leaner local government – equipped for the challenges ahead.

Six years down the line, the perception is little appears to have happened. Merging social care and primary health, long mooted as the biggest drain on public spending and a sure way to free up cash, is still a year f r om full implementation.

First proposed in 2010, the merger of education and social work departments in Stirling and Clackmannanshire remains eagerly awaited to see what, if any, benefits it brings.

Despite over a year of effort and 250 meetings, the blueprint by former NHS chief Sir John Arbuthnott for councils in the west of Scotland to work together on everything from roads, transport and cleansing to back office functions and education services floundered.

Meanwhile, some individual councils have put themselves through considerable pain with internal reforms and mergers, shedding thousands of staff, raising prices and scaling back on, often dramatically, their core business.

Yet still, Scotland’s councils are looking at a scenario fast coming down the track where they can no longer afford to provide the services they do, and the outcomes society demands, without some sort of transformation.

Last week’s response by the Scottish Government to Westminster’s public finance plans and targets, projected £2billion less to spend on public services between 2016 and 2019.

With local government expected to take half that hit, that’s the equivalent of over 9,700 secondary school teachers, 8,900 senior social workers and almost 16,000 cleansing workers combined.

In the weeks ahead The Herald will ask what solutions government, both local and national, as well as interest groups, trade unions and academia can propose in the face of an acceleration of the impact of austerity on Scotland’s local services.

Sir John Arbuthnott, for one, believes his work from 2010 still has merit.

He said: “Council leaders realised that major cuts were inevitable and wanted advice on how effective their services were and how savings could be made by joint working. All areas of local authority responsibility were analysed for effectiveness and spend.

“The final report was approved unanimously by council leaders in November 2009 and laid out an implementation plan up to 2015.

“Despite considerable effort by the implementation group momentum was lost, though some progress has been made in social services.

“This has not surprised me as the report was asking for a great deal of change and vested interest persists in some areas. There is no need to repeat this exercise. With the financial pressure ahead, we know what is needed and further change has to happen soon.”

‘‘ Leaders realised major cuts were inevitable and wanted advice on how effective their services were