Council budget plans a bureaucratic mess, says expert
COUNCILS face their most serious budget problems since they were set up, having lost the autonomy to raise tax and with a complex new system of regulations, according to one of Scotland’s leading public finance experts.
ProfessorArthur Midwinter has warned of blurred lines of responsibility under the new funding system for public services, which are being drawn up between ministers and councils.
With less than a month before the new financial year begins, these agreements between councils and government are far from ready, and a deadline of late June is now aimed for.
By that time, local authorities will have to select from a “menu of indicators” which ones they want to use to hit broad-ranging national targets. According to a draft document on the outcome agreements expected in return for the money to pay for a council tax freeze, there are currently 52 such indicators and more may be added.
It says the two sides of government are supposed to reach agreements on “mutual accountability”, though there is little detail on how that will be done.
The detail will be further discussed tomorrow, when the Convention of Scottish Local Authorities (Cosla) meets in St Andrews at its three-day annual conference.
The Herald yesterday highlighted that voluntary and charity groups are uncertain whether the tight financial settlement will mean their grants will be cut.
An analysis of the concordat agreed between ministers and Cosla leadership, written by Professor Midwinter, warns that the idea of joint accountability “is hard to take seriously”.
He was adviser to Holyrood’s Finance Committee and is now adviser to Labour leader Wendy Alexander. In a paper he has written for the Chartered Institute of Public Finance and Accountancy, he stresses he is writing as an independent academic.
“Joint accountability cannot work in any practical way with such constraints,” he writes. “The concordat provides a bureaucratic mess which lacks clear audit trails and creates a new tier of micro-management.”
Professor Midwinter says the low growth in budgets, set against high expectations of what can be delivered, “creates the most serious set of budgetary problems for local government since the fiscal crisis of the mid-1990s”. He goes on to warn that the freezing of council tax, which is expected to be completed tomorrow at a meeting of Clackmannanshire Council, is part of “an unnecessary distraction from the core funding problems local government now faces, with the loss of fiscal autonomy, to deal with unforeseen circumstances”.
Labour and the SNP clashed yesterday over the funding of public services. Commenting on a survey showing that nearly three-quarters of health charities have no funding beyond this month, Ms Alexander said: “Labour warned that the sums did not add up.”