|
|
|
|
1. As announced in the statement of 2 July, the Scottish Executive has taken immediate action on several of the key recommendations of the McIntosh report, as follows -
The Renewing Local Democracy Group
2. The report made several fundamental recommendations relating to the composition of councils, including: the introduction of proportional representation for council elections (9-11) 1 ; a review of the nature, volume and timing of business, with a view to organising the business so that a wider cross-section of the community could realistically consider taking on the responsibilities of council membership (17); and a review of the remuneration of councillors (19)
3. The Executive intends to take these recommendations forward as an interlinked set of issues and has appointed a group - the Renewing Local Democracy Group - under the chairmanship of Richard Kerley (Director for the full-time MBA at Edinburgh University Management School) to advise on them. The membership of this group was announced on 2 July. It includes representatives of the major political parties, as well as people with a range of skills who will be able to consider the issues in detail. The group’s formal remit is:
"Building on the recommendations of the McIntosh report, to consider ways in which council membership could be made attractive to a wider cross-section of the community, and councils could become more representative of the make-up of the community.
To advise on the appropriate numbers of members for each council, taking account of new management arrangements and the particular characteristics of city and rural authorities; and on the most appropriate system of election, taking account of the following criteria -
proportionality; and the councillor-ward link
fair provision for independents
allowance for geographical diversity and
a close fit between council wards and natural communities
To advise on an appropriate system of remuneration for councillors, taking account of available resources"
4. The group’s work will thus extend beyond the McIntosh recommendations, in that it is to advise on the appropriate number of members for councils, taking into account the differences between rural and urban areas and also the impact of the changes to the political management structures of councils that will result from the implementation of other of the McIntosh recommendations. The group met for the first time on September 7 1999 and will report early next year.
5. McIntosh also recommended that the legislation governing the Local Government Boundary Commission should be reviewed with a view to providing greater flexibility in determining ward boundaries. The Executive accepts this in principle. It will be examined in the context of the report of the Renewing Local Democracy group; since the electoral system chosen may itself have a fundamental effect of the work of the Boundary Commission.
The Leadership Advisory Panel
6. Another key set of McIntosh recommendations concerns the way in which councils organise their business and their political decision-making: every council is recommended to review its own conduct of business, against stated criteria of openness and accountability (13,14) and to draw up a job description for members (18). These reviews are to be scrutinised by a specially constituted advisory panel (29) and are to be completed by the end of 2000 (28)
7. This panel - to be known as the Leadership Advisory Panel - was appointed on 31 August, under the chairmanship of Alastair MacNish, Chief Executive of South Lanarkshire Council. It has members with a wide range of experience and expertise both within local government and beyond. Its remit is:
"To advise councils on the review of their decision making and policy development processes and the working practices which support those processes. In addition, the Panel will provide advice to Ministers on the outcome of the reviews councils undertake."
8. The Panel will work closely with each council throughout the review process, taking account of their views and in dialogue with them, so that the results should be acceptable to Ministers, Parliament and the public. The Panel itself will be providing more detailed and specific guidance on the conduct of reviews and the criteria against which the proposals will be assessed; but the main criteria are -
9. The McIntosh report emphasised, and Ministers agree, that in order to meet the first of those criteria, Councils with an informal political leadership structure should move to a formal structure. In many cases, this may require an Executive to be established in the Council, although Ministers do not want to be prescriptive about the type of structure that should be adopted. However, setting up an Executive does not of itself guarantee that the criteria will be met. As councils begin to undertake their reviews they will start to develop the detail of how an Executive will work in practice, both in terms of the operation of the Executive itself and how it relates to the Council as a whole. It is this level of detail which the LAP will require to adequately assess councils’ proposals. The panel will need to, and want to, understand the rationale behind proposals for each council’s particular circumstances. However it is expected that any proposal would:
10. The panel needs particularly to be able to clearly understand how the function of scrutiny of the executive will work in practice. In many respects the development of the scrutiny role is the area which presents the most challenges and which also presents the greatest opportunity for innovation.
11. It is important that these reviews should be open and transparent. They should involve interested individuals and groups in the review process and should detail the consultation arrangements carried out as part of the review and the results obtained. In any case, as a minimum, opposition groups on the council, the council’s senior management team and the general public should all feature in any consultation process.
12. The relationship between proposed new structures and existing area committees, area forums and community councils should also be spelled out in the council’s change proposals.
13. Councils are being asked to work to a tight timescale and are to produce their change plans, having completed their consultation, by the end of next year. Those plans will be submitted to the First Minister who will ask the Panel to advise him whether the proposals will meet the given criteria. Ministers hope that councils will have worked sufficiently closely with the Panel to ensure that their plans will be acceptable.
14. It will be evident that the thrust of the change process should be one of self-renewal by councils. Many have already begun the process and others are ready to start. Ministers hope that all authorities will see this as an opportunity to reorganise themselves in a way that fits the needs of government in the 21st century. Although different councils will produce different proposals, Ministers do not expect any council will be in a position to report that no changes are required: there is always room for improvement.
Other initiatives: the Community Leadership Forum, and Champions for Change
15. In order to assist this process of self-renewal further, Ministers have convened a Community Leadership Forum, bringing together local government Ministers and the Leaders of the 32 councils in Scotland. It met first on 9 and 10 September. Its aims are to explore the components which make for strong leadership through a process of discussion and interaction; and to exchange views and experiences on the process of cultural and organisational change in order to build on experience and good practice. It will be assisted by a number of individuals - Champions for Change - from other walks of life who bring to it a proven track record in the management of change.
16. The work of the Forum, the Champions for Change, the Leadership Advisory Panel and the Renewing Local Democracy Group are closely interlinked and their work will be dovetailed to produce a coherent package.
Local government and communities
17. Several of the McIntosh recommendations are concerned with local government’s relationship with communities (23-26). They focus to a large extent on the role of community councils, but also acknowledge the range of other ways in which a council can relate to the communities within its area. Ministers recognise that in many parts of the country community councils continue to meet a felt need and provide a vital link between local communities and the council; and they recognise also the value of there being a common organisation, the Association of Scottish Community Councils.
18. Community councils were however created to respond to a specific situation, namely the loss of local representation brought about by the creation of regional and district councils, and the abolition of the small burghs, in the reorganisation of the early 1970s. Much has changed since then: government policy on social inclusion, local government initiatives in developing other forms of consultation, for example through citizens’ panels and citizens’ juries, and local voluntary initiatives - all these things add up to a complex tapestry of relationships between councils and communities. It is against this background that the McIntosh recommendations need to be viewed.
19. Ministers believe that it is essential that communities are placed at the heart of decision making about the things that most affect them: health; education; housing; regeneration. This theory is being put into practice by building community participation into flagship programmes like community ownership, New Community Schools, Healthy Living Centres and Social Inclusion Partnerships. Local Authorities have a key role to play in all of these initiatives as service providers, partners and supporters of local communities and as partners of other agencies and the Scottish Executive.
20. Community participation is central to Executive policy but the Executive is keen to push the boundaries of community involvement further through two new programmes.
21. Local Authorities are central to the development of these programmes through their key role in Social Inclusion Partnerships and Working for Communities pathfinders and through the Convention of Scottish Local Authorities’ (COSLA) membership of the National Steering Group for the Listening to Communities programme.
Local government and other bodies
22. A further dimension is added by Community Planning, as the McIntosh report acknowledges. Acting on the recommendation of the Community Planning Working Party, which reported last year, five councils have acted as pathfinders to develop new ways of bringing together in partnership and with a common focus the whole range of bodies interested in aspects of the welfare of local communities. The pathfinders have now reported, and their reports have been evaluated, under the joint auspices of the Scottish Executive and COSLA. Other councils are keen to follow; and the Executive intends to work with COSLA in developing appropriate guidance and support for all councils.
23. McIntosh also made a recommendation that the option of transfer to local government should always be considered in any review of other bodies delivering public services (6). This is already being implemented. Prior options reviews involve a rigorous test of the range of functions provided by a public sector body. Such reviews are carried out every five years to determine the future status of the body and include the examination of several options including: - continuation in present form, abolition, privatisation, contracting-out, transfer of ownership and merger with other public sector organisations. During the review process each option is assessed fully against agreed criteria. Examination of the options of transfer of ownership or merger with other public sector organisations will cover the full range of possibilities available (including transfer to local authorities).
Civic education
24. McIntosh recommended that Parliament and local authorities alike should give further study to the development of civic education (27). Although the recommendation is addressed to Parliament and the local authorities, the Scottish Executive acknowledges a responsibility in this matter; and it is worth setting out here the various initiatives that are already underway with backing from the Executive, from local authorities and through the voluntary sector.
25. Ministers have:-
26. Civic education is also included within the curriculum in schools, giving children a grounding of knowledge that will help them participate fully in the democratic process when older. The 5-14 Programme offers a number of opportunities for pupils to learn about citizenship education under the subject headings of Personal and Social Development, Religious and Moral Education and, in particular, under Social Subjects within Environmental Studies.
27. In the context of the Scottish Parliament the Scottish Executive Education Department is currently looking at a range of measures aimed at highlighting the importance of education for citizenship: -
28. Ministers are acutely aware of the need to engage the most disadvantaged young people in the process of civic education. It is of key importance that such young people are given the tool of knowledge of democratic processes and the encouragement to make their voice heard in local decision making. The "Connect Youth" network of young peoples’ forums aims to involve and empower young people to become active citizens, particularly those with little or no previous experience of formal youth activities. We would however welcome views on other ways in which it may be possible to reach socially excluded young people and help them participate fully in the democratic process.
| Q1. How can we best reach out to the most disadvantaged young people and help them become active citizens? |
Finance
29. Although finance was not included in the remit given to the McIntosh Commission, their report includes a recommendation (5) that an independent review of local government finance should be set up. Ministers do take seriously the Commission’s view that financial matters are part of the agenda for change, but they are not persuaded that an independent review at this time would be beneficial. Instead, Ministers are already taking action.
30. The system of Local Government Finance has developed over a number of years through consultation between central and local government. Separate arrangements operate for local authorities’ annual revenue expenditure on services (other than housing) and debt servicing; for local authority capital expenditure and for housing finance. At their heart, these arrangements aim to provide a system of funding which is both fair and stable, but which can also respond to changing demands and circumstances. Local government finance is not, therefore, a fixed system, but is undergoing a constant process of review and evolution.
31. Local authority revenue expenditure is funded from a combination of local taxation (the council tax) and grant support from the Scottish Executive (known as Aggregate External Finance or AEF). AEF comprises three elements:
Specific Grants;
Non-Domestic Rates Income; and
Revenue Support Grant
The distribution of AEF aims to ensure that local authorities across Scotland are able to provide an equivalent level of basic service, to the same standards across the country, for a standard level of council tax; whilst acknowledging geographic, demographic and other differences which impact on their spending needs.
32. Whilst Non-Domestic Rates are collected locally, a standard system for calculating rates bills, linked to rateable values and a common poundage rate, applies across all local authority areas in Scotland. The proceeds are pooled and distributed to authorities as part of the needs-based central government grant distribution.
33. This distribution system allocates allowances to the various local authority service headings (e.g. social work, education, etc.) based on Ministers’ assessments of what authorities need to spend on these. These allowances are then distributed between individual authorities using criteria agreed through consultation with the Convention of Scottish Local Authorities. The allowances for different services are illustrative only, to help in calculating the total level of grant support for each authority. It is for individual authorities to determine their own expenditure priorities from the total resources available to them, other than for the small proportion of grant (around 8%) allocated through specific grants.
34. Separate arrangements apply for the annual section 94 allocations for authorities' non-housing capital expenditure. These are also determined following consultation with COSLA and are calculated on the basis of authorities’ relative expenditure needs for capital investment. Capital allocations, however, account for only around half of the total gross expenditure of local authorities, the rest being made up from authorities’ own resources, mainly receipts. The Government has agreed with COSLA that the priorities for gross capital spending should be pursued jointly through new partnership arrangements over the CSR period and that the existing system should be kept under review.
35. Ministers remain committed to the current framework for the needs based distribution of local government finance. Nevertheless, they recognise that there are many aspects of the present financial arrangements that need to be addressed and will aim to work closely and constructively with local government on these. Improved financial management, budget accountability and partnership use of resources are all central to our view of the modernising agenda for local government finance, to improve both accountability and management more generally. Ministers have suggested the following issues merit further consideration:
36. Local authorities may have further issues which they would like to add to this agenda and views have already been sought from COSLA in discussions with the Scottish Executive over the summer, when it was agreed that the Executive and the Convention would jointly develop a paper for consideration at the next Ministerial meeting between the 2 sides, scheduled for November. In addition, since the Report of the McIntosh Commission was published in July, action has continued on a number of other fronts.
37. Firstly, a programme of reviews of the arrangements for distributing grant to local authorities was set in hand following reorganisation in 1996. The reviews need to be completed as soon as practicable and progress has been achieved this year in a number of areas, including population distribution, loan and leasing charges and stability. The outcome of these 3 reviews will be ready for implementation in 2000-01. Ministers have also discussed the process itself with local authorities over the summer and have agreed their request to add to this programme a further review of the priority given to secondary indicators of poverty and deprivation in the distribution process. The remit for this further review will be agreed by November 1999 and the aim will be to complete it for implementation in 2001-02.
38. The review of the (non-housing) capital finance system is continuing and has been looking, in partnership with COSLA, at the single allocation formula and the development of arrangements to monitor delivery of the shared capital expenditure priorities (education, public transport and care and repair). A major part of the review is monitoring how the new arrangements for taking receipts into account in the distribution process will affect the distribution of net capital allocations in 2000-01.
39. The Scottish Executive also has in hand a major exercise that will lead to a revaluation of business rates, which will take effect on 1 April 2000, in Scotland, England and Wales. The Executive is committed to maintaining the principles of cross-border harmonisation and a level playing field for business and industry. Differences in the commercial property markets of Scotland and England could however lead to different rate poundages in future, even to raise identical sums as at present. Against this background, Ministers believe it would be wrong to introduce any further turbulence for business, for example by altering the national regime for non-domestic rates.
40. Taken together, the various reviews currently in hand or under consideration add up to a serious and heavy agenda and reflect Ministers’ commitment to keep the wider issues of local government finance under review.
| Q2. Ministers would welcome views on proposals for improving the resource allocation, management and transparency of the local government finance system, within the current policy framework. |
1 The numbers in brackets, here and throughout this paper, refer to the numbered recommendations in the McIntosh report. The report’s recommendations are reproduced at Appendix 1 to this paper.
2 In Departmental Circular 4/99 issued in April 1999
3 The Gordon Cook Foundation is a charitable organisation which funds work in the field of values in education throughout the UK
|
|
|