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Benefits and Costs of Co-locating Services in Rural Scotland

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CHAPTER NINE: CONCLUSIONS AND RECOMMENDATIONS

This project combined both qualitative and quantitative methods to explore the attitudes and associated values that rural residents hold regarding the provision of local services, specifically in the context of using co-location as a means of ensuring service delivery. Three case study areas were selected and used for stakeholder workshops, which fed into the design of an economic choice experiment, also undertaken in these areas.

In Eastriggs the presence of local services, provided by familiar faces, was felt to be important, although this was not confirmed by the choice experiment. Transport links were found to be good, as was the local post office, and people recognised that they were lucky to have two small local shops with long opening hours. Lacking were a GP surgery, a local police service, sheltered accommodation for elderly people and a rail link. Participants felt strongly that a village hall was needed, and that this could provide a co-location venue for other services, for example a local council office and social facilities. Having a venue that could meet the needs of many groups was thought to be potentially very good for Eastriggs, and a facility that the village has a need for.

The remaining case study areas could be considered to be more remote than Eastriggs, and the role of local services in acting as a focal point for local communities was highlighted. In Applecross co-location is already a 'way of life' with three examples. The shop and post office share premises and the petrol station is part of the same site. The primary school and village library also share premises 52 and the new community hall provides accommodation for many different groups and activities. It is unclear how new co-location could add to the provision of services in Applecross, as there is such a small population base, and the problems identified related to services such as nursing care for the elderly, secondary education, transport links and costs, emergency health services, and police.

In Stornoway and Lewis education and health services were thought to be good. However, there were concerns about declining services. Transport was found to be cheap, reliable, friendly, and generally thought to be regular enough. Services for elderly people were considered to be very good. Transport off island was considered to be very expensive and represented one of the main problems for island life. Other problems identified were the lack of dentists, lack of clothes shops, lack of DIY shops and lack of things for youths to do. While co-location may provide an answer to some of the service problems identified, there are wider service issues, notably the cost of transport off-island, that co-location could not address.

The strength of the choice experiment approach is that it provides a basis for estimating wider non-market service benefits. These include convenience elements such as distance, opening hours and social aspects such as familiarity with staff. The estimated non-market values for different levels of service provision in our experiment can be used to extrapolate to any hypothetical service level combination of the same attributes. The non-market benefits of any combination of service attributes can then be combined with any market benefits of service provision in order to derive the total value accruing to that level of service. The service combination benefits can in turn be compared with cost of provision estimates.

In this study the stated preference analysis provides an insight into the net social benefits ( i.e. social benefit minus cost) of different delivery options based on real service outlets. Using approximate service costings for the co-located provision in the three survey areas, indicative benefit/cost ratios were found to range from -1 to 6.15; the negative ratios arising from negative benefits of some services scenarios where reduced distance to services does not compensate for other elements of service that are poorer, such as opening hours. The positive benefit/cost ratios suggest that before adding in any market benefits, some combinations of services (based on the baseline provision) are delivering non-market benefits in excess of the costs of provision. We suggest that this information helps to qualify hitherto speculative statements about the benefits that can be attributed to rural services.

This information should be considered in designing service delivery alternatives. It is clear that some service configurations will deliver greater social benefits than others and this factor should be part of any process that seeks to ration the distribution of access in rural Scotland.

At this point this research remains less specific about the apportionment of generated benefits between public and private service providers and the ways in which public funds can be employed to generate the greatest leverage from private initiatives in a co-located form. The social cost-benefit approach effectively abstracts from the public-private distinction in provision; what counts is whether benefits exceed costs. But the calculus underlying this approach can clearly be altered in cases where private supply can be leveraged to give best value to public contributions. We can conclude by suggesting that the nature and extent of this leverage warrants further consideration as part of any co-location agenda.

A number of policy recommendations arise from the results of this research:

  • Co-located services delivers the greatest benefit where it reduces distances required to access services. Service providers should also recognise the importance of other service attributes.
  • Co-location is not a "one size fits all" solution to service provision. Different communities with varying circumstances will value and prioritise different elements of services. This should be recognised when planning service delivery.
  • The existence of social benefits should be considered when assessing options for co-location where commercial considerations might otherwise preclude provision.
  • The social and community focus provided by local services, particularly in more remote areas, suggests a role for local communities in providing services through volunteerism and provision of services by local community trusts. Co-location of these services may provide community focus, as people using different services are drawn to the same hub.
  • Cost considerations are an important factor in judging service efficiency, but it is often unclear how costs are being shared and what savings can be inferred. More transparent cost accounting would facilitate cost comparisons.

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Page updated: Wednesday, March 28, 2007