Community Council response to spending proposals

Tuesday December 12th 2017

Eskbank and Newbattle Community Council.

The Eskbank and Newbattle Community Council (ENCC) have written an open letter outlining their response to Midlothian Council’s proposed spending proposals.

To Midlothian Council Officers and Elected Members

Midlothian Change Programme 2018 – 2022

On behalf of the Eskbank & Newbattle Community Council (ENCC), I am pleased to submit this response to the proposed Change Programme.

We recognise the scale of the challenge facing Midlothian Council and understand that unprecedented measures will have to be taken. We hope to actively engage with officers and elected representatives to develop practical approaches to mitigate the negative impacts of any necessary cuts and to develop better partnerships to maximise community participation in alternative methods of delivering services.

However, we are not convinced that the Change Programme, as published, is an adequate or appropriate response to the current situation.

The programme offered is overwhelmingly negative. It offers little hope for the future. All this just at the time when Midlothian is about to embark upon the most concentrated period of growth in a century.

There is no mention of what we do well. What is worth keeping? What is worth protecting and what can we build on?

There is no identification of what we do badly. What should we dispose of? What can we give up?

Instead we are offered an incoherent ‘shopping list’ of incremental savings. There is no sense of pride in what we can do and have already achieved. There is little to engage and enthuse the wider community. In short – there is no vision.

Our first criticism of the proposals is that we are disappointed that Midlothian Council has not taken advantage of the 10, or more, months that have elapsed since the Scottish government made clear its intentions to make significant reductions in the Local Authority grant settlement.

In our view it is a missed opportunity to have spent this precious time – and so much effort – on prioritising cuts to basic services. Rather, this time should have been focused on growth and efficiency, developing more shared services, more urgently, with other local authorities and finding ways to generate additional income to compensate for central government shortfalls. Additionally, it is regrettable that Midlothian Council did not appoint some outside objective body/consultants to review officers’ proposals, propose alternatives and assess impacts.

Our second criticism is of your assumption that cuts are the answer. We cannot cut our way to resolving this budget shortfall, even in the short term, without an unacceptable reduction in the quality of life of Midlothian citizens. Unfortunately, council officers have taken exactly this unrealistic approach. In our analysis of the proposals, we note that 60% of the proposed savings come from the reduction or elimination of services and facilities that we all depend on. A further 13% of savings come from increasing charges, meaning that almost three quarters of the savings come from cancelling services people currently depend on, or charging them more for them.

Whilst increased charges must always be an option, a strategy that depends so much on a reduction in quality of life and limitation of care for the needy must surely be met by an energetic embrace of much more transformative options and a determination to make fundamental changes to the system that places local authorities in this position.

In formulating the budget options we believe effort should be focused on “What kind of Vision can we offer Midlothian?” and “What changes do we need to champion in local government financing to ensure we are never in this position again?”.

We do not believe that the answer to these questions can possibly be “Midlothian is to become a place where vulnerable people are unable to access vital services through lack of provision or lack of transport, where our children’s safety is compromised, where public spaces are unkempt and overgrown, and our libraries – one of the few spaces left in communities that aren’t monetised – are closed”. Nor do we believe that it would be acceptable for Midlothian not to develop a strategy to work with all relevant bodies to create a financing system that works for local government. If the Scottish Government won’t provide councils with the funding they need, they must give them the power to raise more money themselves.

Our final criticism is that so many of the proposed cuts are accompanied with a totally inadequate impact assessment that is disappointingly superficial, with no considered estimation of the potential costs of unintended consequences or mitigation efforts. In short, many of these proposals are unrealistic and non-implementable. It is hard to believe that there is a single member of the administration or management who believes that this plan is a credible blueprint for action.

Our alternative proposal, therefore, is that all effort is now dedicated to the development of an alternative strategy. This strategy should recognise that future budget settlements are unlikely to improve local government finances through grants and the only civilised solution to our funding difficulties lies in a multi-pronged approach that prioritises:

  1. Benchmarking Midlothian performance in service delivery against other Scottish local authorities, so that we can build on what we do well and remedy what we don’t do well.
    These performance parameters must be easy for citizens to understand and regularly reported on.
  2. Reviewing the proposed cuts to identify all sensible measures to achieve savings and implement optimisation of operational efficiencies to reduce costs, without fundamentally damaging the fabric of society.
  3. Retaining and developing the proposed commercial activities in the plan, but enhance the chance of success by actively partnering with established businesses to maximise revenue generation from MC assets and to import best practices.
  4. Increased rationalisation of the workforce to eliminate unjustifiable staff costs, through a continuous process of top-to-bottom review of current work practice.
  5. Increasing the number and accelerating the development of operational agreements with other Local Authorities to achieve economies of scale.
  6. Developing a realistic programme of work to develop community and third sector capacity to reduce demand on MC. This would include measures to maximise the contribution of the Community Justice Team.
  7. Coordinating with all other Local Authorities to lobby Scottish government to permit actions to raise income and council taxes to meet some of the increased costs.
  8. Quantifying the negative impact on Midlothian of insufficiently compensated development activity and seeking redress through modifying the governing legislation and permitted use of funds.
  9. (Recognising that steps 4 – 7 are only going to realise gains in the medium term and that the budget has to be balanced in the immediate term) :Seeking investment from Scottish government, instead of increased grant, for a 5-year plan to develop the skills, capabilities and commercial enterprises necessary to achieve the planned transformation of service delivery and increase in revenues.

The following paragraphs elaborates aspects of our views, related to the above proposals.

1. Accept that not all the proposals are unacceptable: Whilst the totality of the proposed cuts in the Change Programme represents an unacceptable level of degradation of service, there are certain elements in them that may be considered to make sense and should be considered for retention in any programme of cost-saving. Midlothian Council needs to do more to engage with the public to identify which measures attract most support and cause least harm. The current round of public consultations must be recognised as insufficient, given that officers and elected members had full background of all the issues while members of the public were presented with “like it or lump it” choices. It is totally unprofessional that the people who have been elected to make choices on behalf of the public should abdicate their responsibility on these matters and that professional officers did nothing to identify options for the public to consider.

2. Work with established business partners: Proposals contained in the spending plans for revenue generation are interesting but, given the shortage of commercial expertise in the organisation, for these proposals to be considered as credible it is necessary to demonstrate that the management capacity exists – and that the market exists – for the services proposed. Midlothian Council should undertake such ventures only if external partners can be persuaded to participate in their financing and development. Success in attracting external financing would be a convincing indicator of project and market viability. High priority areas for joint investment with external partners would include:

  • Banking; the creation of a Bank or Credit Union, to serve the needs of local people and businesses ought to be explored. A Credit Union for the Lothians would perform the vital service of supporting local businesses and communities, unlike the big national banks who are busy closing branches. In addition, banks, quite literally, create money.
  • Energy generation: in addition to embracing energy savings, the production of energy ought to be added to the options considered. This could take the form of small-scale community joint projects, or larger-scale, commercial operations. The energy company, OVO, already has a number of operations in partnership with local authorities in England.
  • Leisure Services: There can be no justification for continuing with ownership of the Winter Sports Centre at Hillend. It is long-established that the major market for this facility is in Edinburgh. The current “suggestions” that it might be made more profitable cannot be considered as convincing. A commercial partner should be sought for the further development of Hillend Winter Sports Centre – and perhaps other leisure facilities – to inject some much-needed cash for improvements and commercial skills. Midlothian Council should consider selling an appropriate stake in all such ventures, retaining some ownership/shareholding to benefit from future profits.

3.Reducing Headcount: Redundancies must be part of the options considered. It is unacceptable that consideration is being given to reducing levels of care while keeping people on staff who have no job. In parallel with sharing services, consideration ought to be given to sharing staff functions. With all of our neighbouring local authorities going through the same process and possibly applying the same logic, there will be a significant reduction in manpower across the Lothians alone. In that circumstance, it seems remarkable that only one senior management position will be cut. It is our view that there must be scope for considering sharing some levels of expertise across several local authorities, resulting in an overall saving to each.

4. Extend scope and speed of sharing services: The proposals for sharing of services with other local authorities are both disappointing and timid, given the scale of the approaching crisis. It seems hardly credible that it will not be possible to negotiate any sharing of services until the 2019-20 budget period and that, ultimately, less than a cumulative £2 million can be saved. It seems more credible that significant savings can be made from operating joined-up multi-authority services than from selling consultancy expertise to them.

5. Transferring responsibilities to Communities: Significant emphasis is being placed on transferring assets to communities, or to mobilise communities to maintain some facilities. This is a very worthwhile objective but is not being considered realistically. Experience from other Scottish Councils, under the Resilient Communities initiative, shows that it can take up to 5 years to develop the necessary capacity and capability in the community. Local examples such as the Kabin in Loanhead and the Storehouse in Penicuik illustrate the dangers of failing to prepare communities appropriately for taking on such responsibilities. Midlothian needs to develop a comprehensive plan to build community capacity and needs to invest in this activity and the necessary continuing support services.

6. Work with other authorities to change the environment: It is not unrealistic to assume that the public may be willing to pay more to preserve and protect essential services. We advocate an approach to Scottish Government – in concert with all other Scottish Local Authorities – to delegate authority for a proposal to significantly increase the revenue raised through Council Tax. A 3% increase is projected to raise £1.274 million, so a 15% increase would raise over £6 million, which would make a significant dent in the budget shortfall. This may seem extreme, but Midlothian Council must fully engage with the public to fine- tune any proposals and establish what people are willing to pay for. The process used for participatory budgeting should prove to be adaptable for this.

7. Ensure developers pay a fair share: Midlothian is required, under the terms of the recently approved MLDP, to accept the development of almost 8,800 homes over the period 2018 – 2024. Approximately 4,400 of these homes will be built in the period 2018 – 2019, if targets are to be met. Midlothian currently charges developers around £23-24,000 per dwelling in developers contributions for each home built, which will raise more than £100 million in this period. Unfortunately, this is not enough to compensate for the negative impact of such intensive development. We propose increasing charges to developers for every home they propose to build on a speculative basis, to a level which could eliminate the deficit completely. If, for example, the contribution was doubled, this would raise an additional £100 million in the next two years. Midlothian Council needs to adopt the principle that any home being built in Midlothian must make a positive contribution to the overall wellbeing and financial sustainability of the county. With significant growth over the next few years being one of the major contributing factors to the budget shortfall it is unacceptable that developers are not being required to increase their contributions significantly. It is recognised that there is a considerable body of law and regulation that constrains what can currently be asked of developer contributions and what uses can be made of them. That is no excuse for ignoring both the negative impacts of increasing development and the potential for leveraging that development to mitigate its effects. It will, undoubtedly, be a medium-term task to make the necessary changes to current law and regulations, but that is not a reason to fail to confront the self-evident need to make speculative development as profitable for communities as it is for developers.

8. Eliminate the Growth Penalty: The current situation, where local authorities suffer a reduction in Scottish Government Grant whenever Council Tax revenues are increased, severely penalises Midlothian, in particular, due to the growth targets we have had imposed on us by Scottish government. Midlothian must engage with all other Scottish Local Authorities to achieve a change to the formula for calculating these grants. Otherwise we will remain in the invidious position of being penalised for any growth we accommodate, or for any Council Tax increases implemented.

I look forward to receiving your considered response in due course. Yours sincerely,

Bill Kerr-Smith, Chairman
Eskbank & Newbattle Community Council

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