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RENEWING LOCAL DEMOCRACY: THE NEXT STEPS
CHAPTER 5: POWERS, RESOURCES AND STRUCTURES
Introduction
67. The preceding chapters of this document are focused primarily on issues of governance and participation. This chapter highlights forthcoming changes to the powers available to councils, and considers key aspects of the resources available to councils, the framework in which they operate, and the way in which they interact with the communities they serve, and offers a number of options for change.
Powers
68. The framework within which local authorities operate is constantly changing and evolving. Devolution has developed the relationship between councils, Ministers and Parliament. Other recent changes have provided councils with a 4-year term of office to allow for effective planning over a longer timescale, and the introduction of 3-year grant settlements.
69. The forthcoming Local Government in Scotland Bill will bring further change. The Bill takes forward a shared agenda for local government, with the overall aim of providing a framework to enable the delivery of better, more responsive public services. The measures in the Bill are designed to make it easier for councils to do their jobs, giving them more responsibility to act within a sensible framework, to work in partnership with other bodies and the communities they serve, and to embed a culture of improvement.
70. The Bill has 3 main components:
70.1 A duty of best value;
70.2 A power of well-being; and
70.3 A statutory basis for community planning.
71. The duty of Best Value and associated provisions are intended to give a statutory foundation to the comprehensive Best Value framework that has been developed in partnership with local government over the last 3 years. The main objective of Best Value is to deliver better, more responsive public services. The basic duty will oblige local authorities to pursue continuous improvement in their performance while ensuring that services are delivered with the appropriate balance between quality and cost. This will be supported crucially by a duty to ensure that local authorities are proactive in consulting and engaging with their communities on their performance.
72. The power of well-being is a new power which is designed to allow local authorities to work in a more innovative and flexible way in the interests of their communities. It will provide clarity for Scotland's local authorities and encourage a 'can-do' approach in delivering customer-focused services. The power of well-being will re-affirm the Executive's commitment to councils' strong community leadership role and enable joint working with communities and other agencies.
73. Community Planning provides a process through which a local authority, the local community and other organisations come together to plan, provide and promote the well-being of their communities. Joint collective action carried out effectively will result in better use of public money. The overall intention is to provide a basis for the delivery of better, more responsive services, services designed around the citizen and the user, not the provider. The Community Planning process provides a vehicle to enable joined-up working and to engage communities in the decisions that effect them.
Resources
74. Ministers also wish to consider other ways in which they can make it easier for councils to do their business, and encourage councils to take forward the modernisation agenda contained in the Bill. To achieve this, local government needs to invest in the future - in new and improved forms of service delivery; infrastructure that meets the needs of the 21 st century; information and communications technology to enhance their accessibility to citizens.
Capital Expenditure
75. Ministers want to provide a framework for capital investment which supports the power of well being and the duty of Best Value; gives local authorities more flexibility and responsibility; enables them to make real choices and to make full use of the various options for financing improved services, including private finance; and requires authorities themselves to account for their decisions about the level and nature of the capital investment they undertake.
76. For many years local authority capital expenditure has been controlled by central government. Local authorities require the consent of Scottish Ministers before they can incur capital expenditure. The system in place is largely concerned with limiting the amount of capital expenditure.
77. Ministers therefore propose to abolish the existing system of capital consents. It will be replaced by a system under which:
77.1 Local authorities would have the power to decide their own capital investment subject to certain conditions, principally that they make those decisions in a manner prescribed in regulations made by Scottish Ministers.
77.2 The regulations would require local authorities to set local prudential indicators (within a centrally agreed framework which would draw on the Chartered Institute of Public Finance and Accountancy's Prudential Code for Capital Finance in Local Authorities) establishing what they could afford to spend and borrow; to publish these indicators; and to limit their investment and borrowing to what could be afforded having regard to these indicators.
77.3 The setting of the indicators and the consequent decisions on spending and borrowing would be audited and publicly reported.
77.4 Ministers would have a reserve power to limit capital spending in certain circumstances, for example if an authority failed to apply the self-regulating approach properly; or to prevent an unsustainable surge in total local authority borrowing.
77.5 Ministers would have powers to support national priorities through the award of capital grant.
78. Subject to Parliament enacting the necessary changes to the law in the Local Government in Scotland Bill, Ministers will introduce these new powers and responsibilities at the beginning of 2004-2005. The Executive will work closely with councils, with Audit Scotland and other interested parties in preparation for implementation, and will consult further on the details.
Housing
79. These proposals for a new system for encouraging capital investment come at a time when there is much change in housing. Local authorities are currently preparing for new responsibilities with regard to housing. These include the preparation of local housing strategies, homelessness strategies, supporting people and the transfer of responsibility for development funding. Communities Scotland, in its role as regulator, will be starting to assess councils' performance on housing management. In addition, a number of councils are preparing proposals for the transfer of their stock to community ownership. We believe that this is not the right time to introduce such a fundamental change to housing finance. We are continuing to look at ways to ensure the most effective way of supporting capital investment in social housing, including community ownership.
Supporting Improvement
80. This paper highlights a number of measures which Ministers are taking to help to empower local leaders and remove barriers to the improvement of services. But Ministers want to do more. They wish to provide positive support to those in the front line; to councillors and council officers. They also wish to do what they can to make sure that councils have access to the best information advice and support; that they exchange ideas and disseminate best practice; and that they have the means to benchmark themselves against their peers and other service providers in the public and private sectors.
81. There are, of course, plenty of examples of excellent practice in individual services in individual councils. Ministers believe that the communities which councils represent have a right to expect good ideas and the best practice available to be taken up quickly, and councils and other public agencies will soon have a duty to pursue continuous improvement. But to achieve that councils need to work together to ensure that they share experience; bring fresh perspectives to bear and challenge outdated or inefficient ways of working.
82. Ministers recognise that organisations such as CoSLA, and the Society of Local Authority Chief Executives already have a central role in co-ordinating views and disseminating information between the leadership and senior management of councils. There are a number of other organisations which already play a part in supporting improvement, for example Quality Scotland, the Association of Public Sector Excellence and the Scottish Local Authority Management Centre. The Executive itself has an interest in securing the improvement of public services.
83. Ministers see a strong case for the development of a new service which would support improvement by, for example:
83.1 Providing information and advice for councils pursuing performance improvement;
83.2 Helping councils to undertake peer reviews;
83.3 Providing support to help implement improvement plans;
83.4 Providing access to a comprehensive database on council performance; and practice and innovation throughout the United Kingdom; and
83.5 Developing training for members and officers.
84. It is important that such a service has credibility with councils and that they see it as a genuine resource to support improvement rather than an imposition. It is also important that any such service capitalises on the skills and knowledge of those already engaged in improving services themselves, and those who have already have expertise in supporting service improvement.
85. Ministers are clear that this is not an appropriate role for the Executive to fulfil. Instead they believe that the Executive should work with CoSLA, councils and others with an interest in this area.
Structures
86. Ministers have also been considering a number of issues relating to the way in which councils carry out their business. The question of councils' political management structures is considered below, while the way in which councils can involve the communities they serve in the work they do is considered towards the end of this chapter.
Follow-up to the Leadership Advisory Panel (LAP)
87. The LAP process encouraged councils, on a voluntary basis, to examine their decision making and scrutiny processes. As a result of the LAP process, councils have introduced a range of new political management structures. Ministers wish to do what they can to encourage councils to maintain this process of self review. Some councils are further down the road of change than others, and for a small minority of councils the process is still at an early stage. There would be little or no point in carrying out a major review of the work done so far, and the success of the changes introduced as many changes are very recent.
88. Ministers emphasised throughout the LAP process that the development of councils' own scrutiny role would be the area which presented the most challenges and the greatest opportunity for innovation. The concept of a formal scrutiny mechanism, separate from the decision making process is a relatively new one for some councils. Some of the councils which introduced streamlined committee structures in response to LAP included separate scrutiny functions as an important element of their new structures. All of the councils which moved to an executive structure established a separate scrutiny function, sometimes chaired by a member of an opposition party. As part of the follow-up to LAP, Ministers wish to support local authorities in evaluating the work they have done on scrutiny so far, developing their approach to scrutiny still further, and building on their initial experiences of that work. Where scrutiny arrangements have not yet been introduced, Ministers wish to encourage councils to consider introducing appropriate mechanisms at an early date.
89. Ministers also recognise that the introduction of such scrutiny arrangements requires a significant change in the way in which councillors are supported by officials, and that joint officer/member training has a useful role to play. They wish to establish what progress has been made in this area, and to assist councils in promoting and sharing best practice. They recognise that the introduction of a statutory duty of Best Value, which requires councils to make a fundamental commitment to continuous improvement, will pose further challenges for working relationships at the heart of the decision making process.
Links with Communities
90. The forthcoming Local Government in Scotland Bill is designed to assist councils to work in partnership with the communities they serve. Ministers also attach importance to encouraging councils to find new and innovative ways of involving the communities which they represent in the work of the council. There are a number of ways in which this can be done. These include mechanisms such as area forums and citizens' juries and panels. Ministers do not wish to be prescriptive about the methods which councils should adopt, particularly as local needs and circumstances will vary from council to council, and the approach which is appropriate in one area may not be suitable in another. They do, however, wish to take this opportunity to encourage all councils to consider ways in which they can make their processes more accessible to the communities they represent. Many councils are already doing so, and Ministers would like to encourage councils to share best practice in this area.
91. Community councils are one particular example of a mechanism which works well in some areas. Ministers attach considerable importance to the role which community councils can play, and to the contribution they can make to local well-being. In many parts of the country, community councils provide a key link between local communities and the local authority, and the Association of Scottish Community Councils (ASCC) also has a useful role to play in representing its membership at a national level.
92. In some areas community councils do not play such a strong role and area forums and citizens' juries and panels have an important role to play here. Indeed, area forums are already successful in many areas and Ministers would like to encourage the development of such mechanisms across Scotland.
93. Ministers are also keen to encourage councils to consider imaginative ways in which specific groups within the community, such as young people, can be involved in the work of the council and their elected members.
94. There is one specific way in which councils can already encourage people with a stake in the quality of council services to make a more direct contribution to the work of the council. Councils can already co-opt community representatives onto council committees, although the majority of these co-opted members do not have voting rights. Ministers are aware, however, that the changing structure of councils may mean that the opportunities to involve co-opted members without voting rights may be more limited in future.
Ministers would therefore welcome views on:
whether there is an obvious lead body (or bodies) to provide an improvement service;
whether a new body should be created to provide such a service;
whether a partnership or consortium of existing agencies would be the best way forward;
if so, which agencies should be involved in such a partnership;
whether individual providers should be asked to bid for work to be carried out as a result of the provision of an improvement service;
possible options for continuing the LAP process;
the timing of such further work;
best practice in joint officer/member training;
ways in which specific groups of people can be involved in the work of the council; and
any possible implications for the co-option of non-elected members to the new decision making structures which councils are adopting as a result of the LAP process.
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