Councils across Scotland faced significant financial challenges during 2021/22 and are now entering the most difficult budget setting context seen for many years. Increasingly difficult choices about spending priorities will need to be made.
The Accounts Commission, the independent body that holds councils to account, said that even with additional Covid-19 funding during 2021-22, councils had to make significant savings last year to balance their budgets.
Many councils have also used reserves to bridge funding gaps and fund vital services. This is expected to be the case in 2022/23. The £570 million of additional funding for 2023/24, announced in the December budget, will help councils address upcoming cost challenges, but further change and reform across all councils is required to ensure longer-term financial sustainability.
When compared to the 2013/14 Scottish Government revenue funding position to local government, 2021-22 represented the first real-terms increase in six years (excluding one-off Covid-19 money). But an increasing amount of council funding is either formally ringfenced or provided on the expectation it will be spent on specific services and national policy objectives. This supports the delivery of key Scottish Government policies yet removes local discretion and flexibility over how these funds can be used by councils.
William Moyes, Chair of the Accounts Commission, said: “It’s clear the financial situation of councils is increasingly fragile. Councils are having to deal with the effects of inflation, the increasingly desperate cost of living impacts and rising demand for services, whilst at the same time delivering vital day to day services to their communities.
“To be financially sustainable, councils must deliver savings and reduce reliance on non-recurring reserves to fill budget gaps.
“If they are to find a safe path through the difficult times ahead, councils need to focus more on service reform, alongside meaningful engagement with their communities, about what services can be provided given the financial pressures they are facing.”
Longer-term joint planning is needed to address child poverty in Scotland, which has increased since targets were set in 2017, according to a new Audit Scotland report.
The Scottish Government’s policies and spending remain more focused on helping children out of poverty rather than long-term measures to prevent it. Over a quarter of children in Scotland – 260,000 – were living in poverty before the Covid-19 pandemic. And the current cost-of-living crisis risks making the situation worse.
Covid-19’s impact on data collection means child poverty statistics are only available up to 2019/20, the half-way point in the Scottish Government’s first child poverty plan. But even with the data it would not be possible to assess the plan’s success. This is because the Scottish Government did not set out what impact the 2018-22 plan was expected to have on levels of child poverty.
The government’s second child poverty delivery plan takes a more joined-up approach to tackling child poverty, spanning central and local government and their partners. But detailed joint planning is now needed to ensure policy actions are delivered and progress measured. Policy development also needs to meaningfully involve the views of children and families with experience of poverty.
Stephen Boyle, Auditor General for Scotland, said:“Poverty affects every aspect of a child’s wellbeing and life chances and has wider implications for society.
“The Scottish Government needs to work with its partners to quickly set out the detail of how the second child poverty plan will be delivered, monitored and evaluated.
“Government policy takes time to have an impact on child poverty and so it is essential ministers also act now to set out options for reaching their long-term targets in 2030.”
William Moyes, Chair of the Accounts Commission, said:“Councils have a key role to play in tackling child poverty through measures such as housing, education, childcare and employability. But there is limited information available across councils about what they are doing and its impact.
“Better collection and sharing of information about councils’ child poverty work will help support learning and improvement across Scotland.”
The Scottish Government moved at pace with its partners to respond financially to the pandemic – but public sector leaders need to be clearer about how one-off Covid-19 funding is being spent and what impact it has had, according to a new report by public spending watchdog Audit Scotland.
The Scottish Government worked with councils, NHS boards and other public sector bodies to direct billions of Covid-19 funding in difficult circumstances. However, they were not prepared for the scale or speed of the response required and lessons need to be learned.
Spending decisions were recorded differently across government departments, and it was not always clear how data was used to inform funding allocations. Decisions were not centrally collated, making it hard to see how some financial decisions were reached. So far, there has also been limited evaluation of the difference the financial response to the pandemic has made to people’s lives.
The Scottish Government managed its budget effectively over the last two years, but some Covid-19 funding remains unspent. At the end of 2020/21 over £2 billion was added to reserves by the Scottish Government, councils and integration authorities – but it is not possible to say how much of that is from Covid-19 funding.
Stephen Boyle, Auditor General for Scotland, said: “The Scottish Government and public bodies worked well together to distribute money during the pandemic, but lessons should be learned to improve planning for any future large-scale disruptions.
“It is vital for transparency and financial planning that the Scottish Government and other public bodies are clear about how one-off Covid-19 funding is being spent, including money in reserves.
“More work is also needed by the Scottish Government to collect the data that will allow it to understand the difference its interventions have made and plan the country’s recovery from Covid.”
William Moyes, Chair of the Accounts Commission, said: “Councils played an important role in the financial response to Covid-19 because of their local knowledge and the systems they had in place to distribute money.
“Pandemic spending largely protected councils and other public bodies over the last two years. But the financial challenges they were facing pre-Covid remain, and council budgets are particularly under pressure.
“Many services relied on one-off Covid-19 funding to remain sustainable, and it’s important that there is clarity about how they will be paid for in the future.”
Evaluating the financial response to the Covid-19 pandemic – which saw the Scottish Government allocate £15.5 billion between 2020-2022 – the report highlights the significant challenges faced across the country.
The report acknowledges that despite these extraordinary difficulties:
existing Scottish Government systems were utilised efficiently to help deliver financial support as quickly as possible, whilst developing new, streamlined processes that minimised the risk of fraud
the Scottish Government maintained a balanced budget
short notice UK Government funding was directed quickly by the Scottish Government to tackle the wide ranging impacts of the pandemic
over £5 billion was allocated for health and social care to support vital services and public health infrastructure for testing and vaccinations programmes
more than £4.7 billion was allocated to businesses in lifeline support
local authorities were allocated £1.8 billion to fund vital general and targeted services, including £200 million to cover councils’ lost income
Finance Secretary Kate Forbes said: “The COVID-19 pandemic created challenges on a scale our economy and people have never faced in living memory. At every stage, the Scottish Government worked to safeguard lives, businesses, jobs and livelihoods, acting as quickly and efficiently as possible to support people and businesses.
“Despite the impacts of the pandemic, many of which are still being acutely felt, we worked collaboratively with all sectors of the economy to identify those most in need and then with local authorities and partners to utilise existing systems to ensure financial support was delivered swiftly and effectively.
“We also set up a number of new support streams, to make sure businesses were being paid as quickly as possible. My thanks go to all of our partners who worked with us to deliver support at pace.
“It is important to remember the severity of the pandemic and that decisions were taken at pace as we considered how best to allocate funding to support business and people through the necessary public health restrictions.
“We will now carefully consider the Audit Scotland report and engage with relevant sectors to ensure that future decision making is as informed as possible and best supports the people of Scotland.”
Drug and alcohol services in Scotland are complex and a clear plan is needed to improve people’s lives and increase transparency around spending, says public spending watchdog Audit Scotland.
Drug-related deaths have been rising steeply since 2013. A record 1,339 people lost their lives to drugs in 2020 – the highest rate in Europe. Alcohol deaths have been decreasing since the early 2000s, but rose by 16 per cent in 2020, when there were 1,190 deaths.
Alcohol and drug partnerships (ADPs) are charged with helping people at the local level. But how services are delivered remains complicated and lines of accountability are not always clear.
Overall funding for ADPs fell over the last few years before returning to 2015 levels by April 2021, but with no real terms increase. The Scottish Government has also provided additional investment for new initiatives, including a drug deaths taskforce and new evidence-based treatments and standards. But it is too early to gauge their effectiveness.
Spending remains difficult to track, including how money is distributed and what it is achieving. For example, in September 2021 the Scottish Government committed to invest £250m to reduce drug deaths – £50m for the next five years.
But details of how much of the £50m will be spent on each local area, or how the funding will be distributed, have not been published. More widely, data gaps around drug and alcohol referrals, waiting times and outcomes persist. And there is a considerable time lag in public reporting.
Stephen Boyle, Auditor General for Scotland, said: “We’ve recently seen more drive and leadership around drug and alcohol misuse from the Scottish Government. But it’s still hard to see what impact policy is having on people living in the most deprived areas, where long-standing inequalities remain.
“Drug and alcohol data is not good enough, and there is a lack of transparency about how money is being spent and allocated. The Scottish Government needs to set out an integrated plan, with clear measures showing how extra spending is being used to reduce the tragic loss of life we’ve seen over the last decade.”
William Moyes, Chair of the Accounts Commission, said: “Delivery of drug and alcohol services in Scotland is complex and difficult to navigate, with many organisations working across different sectors. What we need to see now is clearer accountability across all partners.
“In the longer term, more focus is needed on the root causes of drug and alcohol dependency and breaking the cycle of harm stretching down generations and across communities.”
The Scottish Government must focus on transforming health and social care services to address the growing cost of the NHS and its recovery from Covid-19.
Improving the NHS will be very difficult against the competing demands of the pandemic and an increasing number of other policy initiatives, including plans for a National Care Service.
The health service in Scotland is on an emergency footing and remains under severe pressure. There is a growing backlog of patients waiting much longer for treatment because of the response needed to Covid-19. That has made workforce planning and delivering on ambitious recruitment plans all the more important. But the Scottish Government has historically struggled to recruit enough people with the right skills.
The NHS’s ability to plan remains hindered by a lack of robust and reliable data, including workforce, primary care, community, social care, and health inequalities data.
Meanwhile the pandemic has increased the fiscal pressures on the NHS, which remains financially unsustainable. This is despite the Scottish Government allocating £2.9 billion for pandemic-related costs in 2020/21 and committing more funding in 2021/22 and beyond.
Stephen Boyle, Auditor General for Scotland, said: “Reforming the NHS is key to the Scottish Government’s pandemic recovery plan and needs to remain a priority. Putting Covid costs to one side, health spending is rising every year, meaning less money for other public services.
“There’s now a clear opportunity to do things differently by building on the innovation and collaboration we’ve seen across the NHS in the last few years.
“For that to happen, our leaders must take the public with them and involve them in the shift from care being delivered in hospitals to much closer to people’s homes. But better-informed policy decisions and services won’t be possible without better collection and use of data.”
“It is disturbing to see so many failings in an organisation, not least because it deals directly with concerns raised by members of the public”
Public trust in the body that investigates complaints about the behaviour of MSPs and councillors is now at risk because of serious failings in the way it is run.
The Commissioner for Ethical Standards in Public Life in Scotland (CESPLS) assesses complaints about the conduct of MSPs, local authority councillors and members of public bodies and then decides which to investigate.
Failings identified by the appointed auditor include:
an absence of openness and transparency
a breakdown in key relationships with stakeholders and within its own office
no effective scrutiny or challenge which might have flagged up issues earlier
The Commissioner’s Office has since accepted 22 recommendations made by the appointed auditor and has made progress in addressing issues raised.
Stephen Boyle, Auditor General for Scotland, said: “It is disturbing to see so many failings in an organisation, not least because it deals directly with concerns raised by members of the public.
“It is vital that progress underway continues and that the recommendations made by the auditor are implemented.
“The overarching risk is that there will be a loss of public trust in the ability of the Commissioner’s Office to properly investigate and consider complaints made against individuals in public life in Scotland.”
The report has been made in relation to serious issues identified in the audit relating to 2020/21.
Ian Bruce was appointed as Acting Commissioner on 20 April 2021 and has instituted a series of remedies. These include:
the production of a revised strategic plan for the next three years, which now incorporates the values that were missing from the previous version and clear statements of intent about how the office will fulfil its statutory obligations in accordance with the expectations of the Parliament, public and stakeholders
a new biennial business plan covering all office functions and addressing each of the auditor’s recommendations
the reinstitution of Senior Management Team (SMT) meetings in accordance with previous good governance arrangements and re-eagement with our Advisory Audit Board, whose members are drawn from the independent members of the Scottish Parliamentary Corporate Body’s AAB
the recruitment of three new Investigating Officers and a new Corporate Services Officer, to ensure all office functions are appropriately covered
meaningful re-engagement with the SPCB and on-going communications with the SPCB and the Parliament’s Standards, Procedures and Public Appointments Committee to keep the Parliament updated on our situation and plans
meaningful and on-going engagement with all stakeholder organisations, including the Standards Commission for Scotland, the Convention of Scottish Local Authorities (COSLA), the Society of Local Authority Lawyers & Administrators in Scotland (SOLAR) and the Society of Local Authority Chief Executives (SOLACE)
ensuring that the directions issued by the Standards Commission are complied with.
Progress to rebuild the organisation and its relationships with stakeholders is well underway.
The Acting Commissioner Ian Bruce stated: “I am grateful for the auditors’ work on the review and have welcomed their recommendations, the majority of which are addressed in our strategic and business plans.
“I have been grateful, also, to the SPCB and the Standards Commission for Scotland for their support since my appointment and their recognition of the many changes that I have already made.
“I and the entire team are dedicated to working in accordance with our new plans and the new values that we have adopted as an organisation. It is incumbent on me and on all of the staff to earn the trust of the public and the many stakeholder organisations that rely on our effective operation as an office. We are absolutely committed to doing so.”
The Covid-19 vaccination programme has made excellent progress in vaccinating a large majority of the adult population in Scotland, according to a new report published today (30 September) by Audit Scotland.
By 17 September, more than 90 per cent of people aged 18 or over had received at least one Covid-19 vaccine. Levels of vaccine wastage have been low, and the programme has helped reduce the number of people getting severely ill and dying.
However, uptake has been lower amongst young people, those in the most deprived areas and those from some ethnic minority backgrounds.
The vaccine rollout has also relied on a temporary staff drawn from across the NHS. This is an expensive model and the Scottish Government recognises that it needs a longer-term solution.
NHS boards and health and social care partnerships currently expect vaccine delivery costs to be around £223 million in 2021/22. But the final cost for this year will depend on clinical advice issued by the Joint Committee on Vaccination and Immunisation, so it could differ substantially from the current estimate.
Stephen Boyle, Auditor General for Scotland, said: “The delivery of the vaccination programme has been a success so far, with good collaboration and new digital tools developed to help the process.
“Early scenario planning by the Scottish Government and NHS boards has allowed them to continue to react quickly to formal UK clinical advice.
“There is now an opportunity for the Scottish Government to use what’s it’s learned to manage the challenges of the next part of the vaccine programme, and the wider delivery of NHS services.”
Accounts Commission:Councils and communities worked well together but impacts of Covid are unequal
Scotland’s councils reacted quickly, working alongside communities and partners to address the unprecedented challenges created by Covid-19, says a new report from the Accounts Commission. Many challenges remain significant, however, made more urgent by the multiple impacts of Covid-19 on communities and services.
Councils have a critical role in providing vital services which communities depend on. In its Local Government Overview 2021 report, the Accounts Commission, who report to the public on the performance of local government, make clear that councils, alongside their partners, quickly provided innovative and sustained support to vulnerable people.
This included supporting those who were shielding or self-isolating, switching to delivering services digitally and managing significant funding to support local businesses.
With many council services disrupted, stopped or reduced, in particular education, social care and culture and leisure, the impact on some service users was severe and unequal. This included carers who lacked access to respite care, people with learning disabilities who were unable to access critical services and support, those receiving care at home and school children whose education was disrupted.
Covid-19 has also exacerbated and laid bare fundamental issues that need to be addressed to ensure services are maintained and that councils can tackle the multiple challenges ahead.
To help achieve this, longer-term financial certainty for councils will be vital. Whilst the Scottish Government has provided significant financial support to councils to assist in managing the net cost of Covid-19 in 2020/21, considerable amounts of funding took the form of one-off payments.
Furthermore, funding for councils beyond 2021/22 remains uncertain. Addressing this issue is vital.
Elma Murray, Interim Chair of the Accounts Commission, says: “Councils, communities and their partners have worked incredibly hard to continue to deliver vital services to local people. The stark reality is that some council services won’t restart, and some services will have to be delivered differently.
“Underpinning this is the increasingly urgent need to address inequalities throughout Scotland’s communities. And for councils this is made more challenging because they continue to operate in a climate of significant financial uncertainty, which must now be addressed.”
Progress on closing the poverty-related attainment gap between the most and least deprived school pupils has been limited. And more evidence is needed to understand educational achievement beyond exams.
A joint report by the Auditor General for Scotland and the Accounts Commission found that exam performance and other attainment measures at the national level have improved.
However, progress since 2013-14 has been inconsistent. And there are large variations in local authority performance, with some councils’ performance getting worse on some measures.
The poverty-related attainment gap remains wide and existing inequalities have been exacerbated by the Covid-19 pandemic. The national curriculum recognises that school is about more than exams.
And there has been an increase in the types of pathways, awards and qualifications available to young people. But better data is needed to understand if other important broad outcomes, like wellbeing and self-confidence, are improving.
The Scottish Government, councils, schools and the other bodies responsible for planning and delivering education were working well together before Covid-19.
That allowed them to respond rapidly in exceptionally difficult circumstances. Funding for education has remained largely static – rising from £4.1 billion in 2013/14 to £4.3 billion in 2018/19.
However, most of that real-terms increase was due to the Attainment Scotland Fund, which the Scottish Government set up to close the attainment gap.
Stephen Boyle, Auditor General for Scotland, said: “Significantly reducing the attainment gap is complex. But the pace of improvement has to increase as part of the Scottish Government’s Covid-19 recovery planning.
“That process needs to particularly focus on the pandemic’s impact on the most disadvantaged children and young people.”
Elma Murray, Interim Chair of the Accounts Commission, said: “There is variation in educational performance across Scotland, but this is not solely about exam performance.
“Education also supports and improves the health and wellbeing of children and young people, which has been impacted by the Covid-19 pandemic.
“It is vital that councils, schools and their partners work to reduce the wide variation in outcomes as well as understanding and tackling the short and longer-term impact of Covid-19 on learning and wellbeing.”
EIS General Secretary Larry Flanagan said: “The impact of poverty on children’s life chances remains a matter of huge concern, and much more needs to be done to support young people living in poverty to overcome the barriers that they continue to face.
“Schools do all that they can with insufficient resources to support young people from all backgrounds but cannot, in isolation, overcome such serious societal issues as inequality and poverty.”
“We have long known of the devastating impact that poverty can have on young people, and this has been made worse during the pandemic when young people from less affluent backgrounds have been far more likely to have had their in-school learning disrupted and to face barriers in accessing education outwith the school environment.”
“It is clear that much greater and sustained investment is needed to tackle the impact of poverty on young people’s education, and all of Scotland’s political parties must fully commit to tackling this issue in the context of education recovery during the next Parliament.”
The Scottish Government acted quickly to prevent the NHS from being overwhelmed by Covid-19, but it could have been better prepared to respond to the pandemic, according to a new report from Audit Scotland.
Staff across the NHS and Scottish Government took early action during the first wave in 2020, including increasing intensive care capacity and pausing non-urgent treatment. Service innovation, such as a huge rise in video consultations, also happened within weeks and it is important these are learned from.
However, there is now a substantial backlog of patients, with NHS boards prioritising those in most urgent need. It will be hard to deal with this backlog alongside the financial and operational challenges already faced by boards.
The Scottish Government based its initial response to Covid-19 on the 2011 UK flu pandemic preparedness strategy. Scotland took part in three pandemic preparedness exercises in the years before the coronavirus outbreak.
But not all the actions identified in these exercises were fully implemented.
These included measures to ensure access to enough PPE and to quickly address social care capacity, both of which became significant issues during the first wave of Covid-19.
Covid-19 has caused or contributed to the deaths of around 9,000 people in Scotland so far. People from the most deprived areas, of South Asian origin, or of Caribbean or Black ethnicity are among those who have suffered disproportionately from the pandemic. Deaths from other causes were also higher than average at the start of the pandemic.
Stephen Boyle, Auditor General for Scotland, said: NHS staff have shown extraordinary commitment to treating and caring for Scotland’s people during a pandemic that has highlighted the need to deal with long-standing health inequalities.
“Getting the full range of health services back up and running will be challenging. But there are clear lessons to be learned from the pandemic, both in how the country could have been better prepared and in the innovation that we’ve seen. It’s essential that these advances are now retained and built upon.”
