Maen nhw i gwaeth ar y ddefnyddio ddles herebyddio y ddefnyddio. Yn 2023 ydw i ddangos i ymddangos i ddefnyddio i ddesiwyr a Gweinigol i'r byd yma ystyried, a gwybod benderfyn allydd gyda myrraeth yma, Mary McNair. Rydyn ni i gyd yw'r rhai gwyfn nhw i'r debyrch i gynnalu y byd sy'n ei ardalod ac i gael eich mynd i'r byd yma ar y ddefnyddio. Yn y gweithio yma o'r ardaladau, rydyn ni i ddylch gael yma ym mhwy, six in private are members agreed we're all agreed thank you we now turn to agenda item two which is to take evidence from two panels of witnesses on local government fiscal arrangements the first session will focus on the recently published accounts commission financial bulletin 2021 to 22 our first panel today we are joined by bill moise who's the chair and andrew burns is a member of the accounts commission welcome and also they are accompanied today by carol coder who's the audit director and by deans who's senior manager at audit scotland and i welcome our witnesses to the meeting and before we open up to questions from members i now invite bill to make a short opening statement well to women thank you very much indeed and on behalf of my colleagues on the commission let me just say that i welcome the opportunity to discuss with the committee the financial bulletin that we published recently the financial bulletin which was published in january gives an independent assessment of council's financial performance during 2021-22 and the bulletin sets out the increasingly uncertain complex and challenging context in which councils are operating and the strain on budgets that continues to intensify 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 have to be made even with the additional coven 19 funding during 2021-22 councils had to make significant savings to balance their budgets many councils have also used reserves to bridge funding gaps and fund vital services when compared to 2013-14 scotland's government revenue funding to local government in 2021-22 represented the first real terms increase in six years if you exclude one off coven 19 money but an increasing amount of council funding is either formally ring fenced or provided on the expectation that it will be spent on specific services and national policy objectives this ring fencing or directing of funds supports the delivery of key scotland government policies but it removes local discretion and flexibility over how these funds can be used by councils to address local priorities two-thirds of councils intend to use reserves to help bridge the 2022-23 budget gap however the use of non-recurring reserves or that alliance on non-recurring savings is not financially sustainable in the medium to longer term in our view the achievement of recurring savings and a movement away from the reliance and use of non-recurring reserves will be key to ensuring longer term financial sustainability this makes the case for a continued focus on service reform based on strong engagement with communities is now more important than ever for 23 24 the scotland's government announced 570 million of additional funding in december of last year and this is expected to help councils address upcoming cost challenges however with the scale of inflationary pressures further change and reform across all councils is required to ensure longer term financial sustainability councils have also noted that Covid-19 and inflationary costs are having an impact on capital projects if these issues persist they will present risks to councils capital programmes which form a necessary component of modernising services to deliver improved outcomes for the local communities thank you very much for listening to me i'm now happy to take questions with my colleagues thank you thank you very much bill i'm gonna open up with the initial questions you touched on a little bit but we'd love to get a little bit more details so the committee is keen to understand the 2023 to 2024 budget impacts on local government and the commission in your financial bulletin notes the government's position that the settlement sees a cash increase of 570 million which you just mentioned in your statement but they also but it also acknowledges your bulletin also acknowledges causeless position that this is only around 70 million and now recently revised to 38 million once national policy commitments are taken into account and we'd be interested to hear what the accounts commission's views are on these figures and how can both interpretations be correct well covid funding has complicated the analysis of the availability of finance and spending patterns today pretty much everything we will talk about will be on the basis that we have excluded covid funding we're dealing with core funding because code funding was never meant to be a permanent part of funding local authorities so if you exclude covid funding then the real terms increase is 5.3 percent and i think that's the figure that we would rely on but i'll ask my colleagues if they want to elaborate on that no takers no takers okay well that's helpful as the covid funding piece is the part of that i think we'd also be interested to hear what the commission's views are on the director finance letter seeking an additional one billion the next year the cabinet secretary told the committee that this request was just impossible ever to meet as the as a public spending watchdog and considering the committee will hear from three directors of finance after this panel what is the commission's view on the director of finance request well this takes us i think into the territory of what level of funding is sufficient what level of funding is appropriate and that's really not something where we can help you very much that's essentially we would say a political judgment rather than a technocratic judgment and we're technocrats by and large again do you want to elaborate andrew no i mean just to amplify that convener i mean it's not a territory we would really is a commission want to stray into about what the quantum should be i mean there's clearly a difference of opinion between the government and causala that's obvious for everybody to see but as a commission as the convener as the chair has said i mean we need to look at the technical side of the debate and technically the position is as bill's just outlined or there has been this real terms increase this year for the first time in six years but the longer term picture is challenging undoubtedly and i guess all i can add in addition everybody knows this i mean it's obvious from the overall flow of our reports that there is huge and significant and growing pressure on local government finances nobody's sure they could deny that but there has to be a political decision about the overall quantum of funding to address those pressures and whether flexibility can be built into the funding packages that local government has available to it and i'm sure we'll make them onto that as a specific topic throughout the course of this morning's discussion hope that helps yeah thank you for that yes flexibility certainly is something that's being talked about a lot i'm not going to bring in willy coffee with a number of questions thanks very much convener and good morning bill and colleagues i wonder if i could start off talking about our much loved subject of ring fencing i think maybe somebody will write a book about ring fencing one day so perhaps we might all understand understand it but some of the figures that are going around bill tell us that you think that 23 percent of local governments revenue funding is director ring fence these are shared priorities of course scotty's government i think that portion is about seven percent but cos i think it's 60 percent could you offer some reflections on how each of the parties arrive at these figures and particularly yourselves how you arrived at the 23 well let me kick off then i'll bring brythen who's the the technical expert here we do think that about seven percent eight percent of local authority expenditure is ring fenced by law local authorities have absolutely no discretion and how to spend the money we get to the total of 23 by then adding in the money that is not technically legally ring fenced but it has serious conditions attached so that in practice local authorities would argue that they have very little discretion over how they spend that money the government of course will argue that they have discretion but in practice the pressures on local authorities to spend the money in the way the government says it wants to spend are pretty intense the message that accounts commission are keen to get across from the reports is that there has been a steady increase in the proportion of total revenue funding that's received by councils that has ring fenced either formally or coming with direction so the expectation is that it is spent on particular service areas or projects or priorities so in terms of our findings in the report this is not something we've done in the past however this year in terms of providing that additional clarity we thought that we would offer our assessment of what we consider to be ring fenced or directed so in the past we've also seen that huge discrepancy between what the Scottish Government would consider to be ring fenced and what caused like consider to be ring fenced ours broadly fits in between but the rationale behind it has been explained by the chair i think that a big aspect of it that we set out in exhibit three of the report is the transfers from other portfolios so we can see for the twenty three twenty four budget that that totals £1.5 billion so it's hugely significant that has steadily increased over the past three years so in twenty one twenty two it was 500 million twenty two twenty three increased to 1.3 billion and for twenty three twenty four increasing to 1.5 billion so that has been a huge part of of that increase in the either ring fenced or directed funding thanks for that bifet the your estimate though is is nowhere near in the middle of the two really i mean the cosla estimate of 60 percent i mean that have you any inclination any idea how i mean we can ask and expand all that but i was hoping to hear your views too but why do you think it's such a high percentage of 60 percent ring fenced it's probably quite difficult for me to answer that one mr coffey experts and directors of finance will be able to provide more but just in terms of the interpretations of what's being fenced so cosla would consider you know the for example the additional funding for pay deals or financial flexibilities included within the overall total that's being fenced also things like loans fund repayment so there's lots of different elements that i'm probably not the best expert to talk to you about that this morning but yeah the colleagues may be able to fill in in this session later thanks thanks very much for making a valiant attempt explaining the differences thanks very much for that on budget gaps bill that we can see that the notes have here budget gaps by council range from 1 percent of gael and but to 22 percent in shetland have you any idea could you offer some views and why such huge gaps exist between councils in terms of their funding gaps well again i'd like to bring blyth in because he really is the technical expert on this right sure yeah so within the financial bulletin we set out the aggregate budget gap for all councils for both 21 22 and 22 23 so for both years this is around about 0.4 billion so although there is that variance in terms of the individual budget gaps at a local level the quantum is broadly similar so there is that consistency it's correct to highlight that there are big differences so from the top shetland all the way down to our gael and but shetland can probably be considered an outlier in this particular analysis so as you can see i think it's up to close to 20 percent this is due to the decision making locally in shetland whereby reserves are used to plug that funding gap so i think for both years 21 22 and 22 23 99 percent of the gap is due to be closed by use of reserves now clearly that presents an issue in terms of the sustainability of that approach because reserves by their very nature are non-recurring and once they've been used they've been used so there will need to be consideration at a local level on that particular example about a more sustainable approach to to closing budget gaps in the future i think what that does do though as well it highlights that individual budget gaps are driven largely by local circumstances and local decision making so for example some councils may choose to use reserves if they have that luxury if we can call it that whereas others maybe not in that same position will will not be able to do so also previous performance in terms of delivering recurring savings will contribute to the budget gap that then kind of proceeds in in the following years there's other elements that can play into this as well around the decisions that councils take for example with council tax rate increases not so much over the last couple of years of course but you know there's a degree of variance in terms of how much councils raise through that also through fees and charges as well as the use of the financial flexibilities that have been afforded by the Scottish Government so that explains why there's a bit of a variance our analysis then builds on to how councils plan to bridge that gap so i can offer some analysis on that if that would be interesting yeah that's really helpful by again and you mentioned the reserves there which brings me on to my next query for you there's quite a varied picture there i think you said bill in your opening remarks at two-thirds of the councils are planning to use them so therefore a third aren't clearly is there guidance around the use of reserves and the level of which they should reasonably be able to deploy and councils broadly follow that advice and guidance clearly a third of them are deciding not to deploy them and are perhaps looking at cuts to to bridge the gap we worry about the use of reserves by councils i mean reserves are meant to be there for serious unexpected events or maybe to smooth financially the path from one pattern of services to another but they're not meant to fund day-to-day running costs co-running costs and we understand why councils are doing it but we have been saying to them increasingly loudly that this is not a sustainable strategy that reserves are finite and when they're spent they're spent and if you don't rebuild them you'll wake up one morning and find that you are in real trouble so we're pressing councils very hard to be very thoughtful about not just spending reserves but also projecting forward if we spend this level of reserve this year what do the next two or three years look like and at what point are reserves on present patterns of expenditure quite likely to run out and leave us stuck so for today i wouldn't criticise local authorities for spending reserves because they are in a very very tight position but if that pattern continues we will have more to say about it there will be guidance around it i would imagine though i mean if a council were to decide to deploy and spend all of its reserves in one year i'm sure they legally might not be permitted to do so is there guidance around that that they by and large follow i presume well they have to break even taking one year with the next but blyth do you want to i've needed to check that mr cofidges for to be sure what i would say is though that the accounts commissioner of scotland have issued guidance in the past with a i guess a recommended level which we would see has been prudent in terms of maintaining a reserves balance of around about two to four percent of net revenue expenditure so that gives you an idea of kind of what we would expect to see almost as that sort of contingency reserve clearly with the situation in the past few years with covid funding reserves have almost been artificially inflated so if you look at the report we present a figure of £4.1 billion of usable reserves which makes it look like councils are awash with cash and they've got so much contingency to fall back on but actually with an exhibit eight in the report we show that actually only 0.4 billion of that is uncommitted so that would be the true contingency the rest of that is committed for particular purposes now in terms of just fallen on from what the chair mentioned one of the messages that we were keen to get across in our reports certainly last year were around the transparency of reserves so we've seen a big improvement in that this year in terms of councils having a greater degree of detail as to what is actually making up those reserve balances but if we take that one step further what i think would be really helpful would be to have the transparency around the plans for spending those reserves including timescales so it's not clear from the accounts how long some of those funds have been in reserves and whether or not those plans are still you know in line with the priorities of the council so there's maybe a wee bit more for councils to do in terms of taking that forward to the next step but as I said definite improvements from what we saw last year to what we've seen this year okay thanks again Blithie lastly from me convener well we mentioned the savings targets a few moments ago to and my notes here say that 2021 22 most of the savings targets were achieved by council so has there been any assessment carried out by yourselves about the impact of those savings and jobs and services and so on and what we're looking at going ahead because you in your opening remarks you painted a quite a bleak picture of the task facing councils in terms of the funding gaps that they're having to face so having made successfully made all those savings from the past how much more can they do to save in the future well we'll be publishing a second overview report in may looking at councils performance as opposed to just finance and I would expect us to cover that kind of point then um do you want to see any more plans or Andrew may I bring it back Willie to the point you raised right at the start of your contribution about ring fencing I mean I think without going into whose figures are correct I mean I think one thing that you can hopefully we can all agree on around ring fencing which is linked to the point about potential savings is whatever the ring fencing percentage is it has a gearing effect on where savings can be made the more that's ring fenced the less areas there are for local authorities to make potential savings and so the vast bulk of the ring fencing no matter which figure is around education health and social care and that pushes the savings into roads footways libraries culture leisure and becomes increasingly difficult for local authorities therefore as you've been alluding to in your last questionnaire to make savings going forward because of the disproportionate gearing effect of the ring fencing no matter which percentage figure you accept it's a real challenge for local authorities is to where to find the savings year on year on year okay thanks very much oh carol I would just add to that that we've got the local government benchmarking framework and the data that's in that and we'll do an analysis of that in our local government overview but what we sometimes find is that performance using that data plateaus it doesn't necessarily drop off but what we're hearing anecdotally from councils is that services are becoming more rationed so the criteria in which to receive services are becoming tougher so in terms of how services are performing and what are the outcomes for people is that there's more unmet need now that's really difficult to quantify but the more that you have to ration services and and make criteria before people can access them more stringent then there are people that are not receiving services so there is the data and it tells part of the picture okay thank you very much for that build did you want to fail one other thought if i may i'm not sure it's wise just to look at savings in isolation i think increasingly councils have to think also about their charging policies what they charge for what they don't charge for whether their charges levied meet the costs of the service delivered and so on so i think it all has to be taken together and that's why we press councils not just to think in terms of one year but to have a medium-term financial plan that brings these things together and demonstrates their sustainability so we'll be coming to those issues just in a wee while i hope Bill but thank you very much for answering the questions back to you. Thanks Willie we've got a few supplements on the back of that so i'm going to bring in mark on local on a set savings savings targets and then paul is going to come in and take us back to ring fencing our favourite topic. Thanks community it's on future savings targets and we've seen local authorities produce or some of them have produced plans on where they expect to make savings and you know pretty tough decisions they're coming to one example is Glasgow where they've proposed making savings on teacher numbers but then we've had a government intervention essentially to say that that would be that would be blocked. My question is how do local government go about making plans for achievable savings targets when you know there is a potential for government to step in and say well actually no we don't like that and we won't let you do that. It puts councils in a very vulnerable position and one of our messages today and every time we're asked is that the whole question of ring fencing really has to be sorted out we have to get to the point where everyone's pretty clear what is absolutely required of local authorities and what are the areas of discretion. Just at the moment i think it's it's very unclear for councils and they've just got to do their best but that's not a satisfactory position going forward. Do you want to add? Just to add to what the chair said Mark, I mean it is linked to the issue of the gear and effect that I mentioned in response to Willi's earlier questions because the straight answer to your question is incredibly difficult for local authorities to make the savings year on year and what you've just raised you're very topical just in the news in the last week is one of those illustrations that Bill was alluding to where it's not formally ring fenced but now councils have been told they can't go there potentially I know this is open to potential legal challenge but it just illustrates the point that the more than more that happens then the less areas that local authorities have to make fiscal savings year on year and I'm sure it'll come round in the discussion it all feeds into the question about the levels of flexibility fiscal flexibility and freedoms that local authorities have or don't have going forward and you know that was supposed to be all was going to come out through the new deal and the early iterations of the local governance review which we obviously were all waiting with beta breath for but until we see all that then local authorities are in an increasingly difficult position. Thanks Paul. Thanks community and it's really just building on that question about ring fencing because one of the key things we have a differential between what causes are saying and what government are saying between 7 and 60 percent. There are shared objectives that are in there but it's maybe coming back to a procedural point that comes back to the point that you made Bill and Andrew in terms of where is that kind of agreed because we're going into a budget process and this is happening during the budget process which makes it extremely difficult for the councils to plan. Do you have any views in terms of the procedure before that in terms of how do we agree should objectives how do we agree you know in terms of the ring fence and where that sits because that for me I don't want to be in this position next year in terms of that so do we have as a lesson that you think we need to learn for next year in terms of ring fence particularly in terms of shared objectives and where we go because we can't be facing this every single year in terms of causes saying one thing Scottish Government saying the other and it seems procedural and I know that it's not as simple as that but is there something we can learn for next year's budget process to go let's try and simplify this in terms of that because it's far too complicated at this stage for a few weeks away from when councils will be sitting their budgets and we still don't know what's kind of you know what's our shared objectives and where do we go with that it's too messy I know what your views are on that well if I can kick off and then I'll bring in the experts one of the things that seems to me that that is not happening and it should happen is that councils have to move quickly to reassure the populations they serve that if they're changing how services are designed or delivered that doesn't mean to say services are going to be worse in some cases it might be we have to acknowledge that but my worry about the debate as it's going on at the moment is that it would be very easy for this approach to squeeze out innovation and just to say the way we've always done it is the way we're going to do it in the future and I think the audience is really on local authorities to get their populations on side to show a longer term plan than just this year this is what we're going to do it will work out next year later I think they really do have to start engaging their population making sure that people understand the arguments understand the risks understand how the risks are going to be managed and try and get their populations comfortable if the population is not agitating then ministers centrally are more likely to say well let's let's step back and let the local authority give it a go and see if it works I think the danger at the moment is that changes in the way services are designed and delivered are introduced at a very late stage apparently for financial reasons and nothing else and I can understand why parents have children in the case of education get jumpy and then when the population starts to get agitated central government ministers want to try and calm things down and they therefore want to leave things alone don't change anything but you can't run a local authority on that basis but I think the initiative has to come from local government Andrew, don't know that I mean I think I completely agree with the point you've just alluded to Paul about you don't want to be in this situation next year I think I can say you know quite firmly on behalf of the commission the commission don't want to see local government in this position next year either and I'm sure local government don't want to be in this position I'm also quite certain the Scottish government don't want to be in this position and it takes me back to what I said in response to Mark's supplementary I mean the long-awaited new deal which would include a fiscal framework would hopefully address many of the points you've just outlined a set of rules jointly agreed by the Scottish Government and COSLA around what was and wasn't ring fenced or loosely ring fenced or formally ring fenced whatever terminology you want to use and I know the cabinet secretary was here just a couple of weeks ago and made the point that the new deal is unlikely including the fiscal framework is unlikely to be ready for the new financial year and I understand the commission understands the reasons for that you know the pressures that the whole UK economy if not the whole world economy has been under has led to an understandable delay but this all goes back to the local government's review which was launched in December 2017 it's over five years ago and you know to get a position you want to see I think Paul that we want to see where this doesn't happen we need to see the new deal delivered on and I hope the committee will really press hard on that I mean we accept that there's challenges that the government and local authorities are facing in delivering in the final version of it but it is very very long overdue and it would hopefully help address many of the specific points about the rules and agreements between COSLA and the Scottish Government that you've raised that's right thank you that's very helpful thanks very much I think we're beginning to stray into a question that I'm really keen to ask a bill I think when you were at a previous panel with us but also in the introduction of the financial bulletin you've stated that if councils are to find a safe path through the difficult times ahead they need to focus more on service reform and I've got a couple of questions here what more can the Scottish Government the Parliament and COSLA do to assist with that process of reform and also I'd be interested to hear if you've got some specifics in mind just I've not been a councillor so I've got colleagues here who have been but you know what what are you getting out there that needs to be reformed well if I can take the first part and then I'll bring Andrew in on the second part because he has been a councillor and unlike you I have not but I mean I think one of the the points that we are trying to stress is that simply doing things the way they've always been done is not a sustainable strategy and councils have got to be prepared to think about different ways to innovate different ways to deliver services and most of all I think they've got to engage their populations if they don't engage people and talk to people and are honest with people and debate things and are seen to change their mind occasionally when the population seems to have the better arguments then they will not be trusted by the population and the pressures will be leave everything alone but given the financial pressures and also given what we learned during the Covid pandemic about how services could be changed and how they could be delivered and whether all the central government controls that apply need to be applied all the time I think there's a lot of merit in discussing how do we do things differently but it has to be an open discussion I think yeah maybe just thanks for me just to try and give one illustration convener me from my experience in a previous life and it is very difficult you know but one way of potentially transforming service delivery is to do it in cooperation with part your partner normally your geographically locally placed authorities you know so I was involved in state of Edinburgh council we had lots of joint work and we've made east west, Lothian and Fife on the borders even and you see that in some structures as well the transport partnerships, health and social care partnerships are often across regions and not just individual local authority areas but it's not straightforward and I'm afraid it does take us back to the whole debate we've just been having about ring fence and the gearing effect that I mentioned in response to Willie's earlier comment because the more that is ring fence or no matter which figure you accept the harder it becomes for local authorities to innovate so that the more flexibility they've got the easier it would be for the chair to see what he wants to see in terms of service innovation by local authorities so I guess that brings us back round to the new deal if we had an agreed set of rules between COSLA and the Scottish government about what was and wasn't to be delivered and what was directed and what wasn't directed then that would hopefully free up a bit of space around what could be done for example along the lines of the one I've just mentioned cooperation with partners mainly geographically adjacent local authorities so there certainly are things that can be done there's no doubt about that but you know a new framework would help greatly and just free up that space for that to be undertaken with a bit more vigor thanks for that carol i think coming back to the new deal again the partnership agreement will be very important in that and what you were saying earlier about shared objectives councils would argue that they're not shared objectives necessarily that they're not at the table in determining what some of the policy objectives are and they would like to be involved in that discussion and recognising that they are all the councils are diverse one size does not fit all and that local needs and the knowledge of local areas is held by the people in the councils they have got the engagement with communities as Bill said that's vitally important but I think if there was more flexibility for local government to work with Scottish government around shared objectives and how what is the role of local government going forward are they service providers are they implementers of national policy or are they stewards of place are they there to enable facilitate what happens locally so I think there's some there's some tensions in the system as it currently exists around what do local authorities do and the partnership agreement I think could be really important in setting that out and the recognition of the relationship between local government and Scottish government change where local government are given the flexibility to implement national policy in a way that suits local needs as opposed to be one size fits all thank you for that one of the things that comes to mind so the committee has just started as of yesterday a series of inquiries into the community planning partnership so you've mentioned partnerships but didn't mention that one and it's kind of interesting because in conversation with communities they feel that they're not at the table with councils and it would seem to me that potentially that is another opportunity there's yes there's kind of working geographically with fellow councils but it seems to me maybe there's this piece and we've you know we've got this in this local governance review and it seems to be the third part of the new deal is that relationship with third sector and with community that seems to need to be picked up and certainly we've got this opportunity with the review of the communities empowerment act to bring that in potentially yeah, I would strongly agree with the point you're getting at here that yes there are things within local authorities and the community partnerships are absolutely one mechanism where you with the involvement as the chair of the commission has already said with the involvement of local committees they can get input from the experts because it's service recipients who are often the experts you know that all of us are service recipients of many many local authority services and sometimes that input from service recipients is lacking and can be very very beneficial and through the council commission's best value reports of all 32 local authorities we do look at how local authorities are developing and using community partnership and community planning and the picture is very frankly across Scotland some are absolutely excellent and do involve the local communities in great detail others much less so and so I encourage the committee if you've got the time and inclination to have a look at some elements of the best value reports that the commission has produced with a highlight some of the best practice around community planning and community partnerships that's great yes we did get a varied picture yesterday carol I was just going to say if we look at how councils and communities and partners work through Covid there are lessons to be learned there the art of the possible was demonstrated during that period of time and I suppose what was different was there was a very clear common purpose that councils and communities and Scottish government were working to there was a scaling down of bureaucracy to make things happen at pace there was trust in the community to deliver services and trust in councils to know what was needed in in local areas and I think that is the exemplar of how it can work and I think disrespecting the boundaries between different agencies and working in terms of serving the place and the needs of the place is very very important and I think that's where we can make change I'd also direct you as well as the best value audit reports to the community empowerment principles document that we produced in 2019 and we did a Covid follow-up in 2021 and there were four guiding sorry five guiding principles which was community control, public sector leadership, effective relationships, improving outcomes and accountability now those principles could be applied to your previous question about reform as well and how do we make services change so I think we can look to Covid and how councils worked with with communities and partners then and say look at what can be done and why did that work and some of the things around that are about loosening of the ties trust and scaling down around bureaucracy thank you thank you very much for that carola we will definitely take a look at those principles that you've just outlined further I also liked what you asked you kind of posed a question previously about you know our council stewards of place and that certainly is something that's coming up now with the national planning framework and we're really talking about making place in 20 minute neighbourhoods so that's an interesting element there and it feels like there's some things that we need to join together more I'm not going to bring in Miles Briggs thank you convener good morning panel thanks for joining us today I wanted to ask a question with regards to local authority net debt and we know that's increased by 0.2 billion to 16.4 billion in the last financial year why do you think that's happened and is there a variation in different councils around that additional debt level and I wanted to also ask specifically with regards to public-private partnership agreements and any variation which is maybe impacting on debt levels in different councils which you're aware of as well so a few questions in in there well I'll ask Brian Thickey off and then we might come in thanks yeah absolutely so the overall increase in net debt was 0.2 billion pounds in 2021-22 actually contrasts quite sharply with the previous year so there was actually a £1 billion decrease this was a result of the late Covid funding that was received so it had a huge knock-on effect to the cash balances of councils so in comparison it does feel like quite a small movement but you know absolutely happy to talk through our understanding of why that has happened so just under half of councils increased their net debt in 2021-22 and without trying to oversimplify things what we mean by net debt is the overall total of debt that councils hold minus their cash and investments so ultimately the the overall increase in net debt could be related to an increase in total debt but it could also be related to a decrease in cash and investment balances so the analysis that we did carry out would suggest that that is the kind of main reason as to why that has happened so 19 of 32 councils increased their long-term borrowing 15 of 32 increased short term borrowing and 20 of 32 had lower cash and investment balances so that feels like the kind of main reason as to why that movement has has been recorded within the accounts what was going to say in terms of the overall understanding of net debt at a local level largely be driven by the local treasury management or capital investment strategies that are in place now that's not something that we've reviewed as part of our overview just given the nature of the overview but we do get information from local audit teams who carry out work and this will be firmly on their radar there haven't been any weaknesses identified that have been brought to our attention so that's about as much as i can offer by way of a conclusion on on how effective they are we did have a look at some year-on-year movements in terms of understanding any reasons why certain councils had a bigger increase in net debt than others but it was nothing particularly exciting some increases in finance lease obligations councils taking additional borrowing to assist with cash flow purposes taking advantage of quite attractive interest rates at a point in time so as i say nothing that really jumps out as a particular red flag and as i say the overall position seems fairly normal that's very helpful and detailed answer do you think there's any correlation between councils with net higher net debt levels then and their central government funding level is that being explored my own council here in Edinburgh Aberdeen are the two lowest funded for example the quick answer is it's not being explored so i'm not really able to offer an answer to that one at the moment but it's certainly something we can consider as part of future financial bulletin work going forward as i say it's not being on the radar up until now that's helpful thank you and in terms of public private partnerships is there any more detail of where they're going in the future and potential changes which i know some councils are looking payback terms things like that and has any of that been flagged to you during your investigations as well not at the moment we do have information that we draw from the accounts in terms of the split between the short and long term liabilities related to those ppp contracts and as the cabinet secretary mentioned to the committee a few weeks back the aspect of value for money in some of those contracts is perhaps not what it might have been so it's not something we've analysed at this point there's nothing that we've kind of been made aware of in terms of those changes to the approach council directors of finance might be able to offer more insight into that at a local level but as i say it's nothing that the accounts commission or the scond have picked up at this point that's helpful thank you we've talked about the Covid additional resources a few times from some of the questions and i just wondered if you had anything you could contribute with regard to lessons that have really been learned about maybe different service delivery models going forward and whether or not that's embedded i certainly know the third sector we're really utilised during the Covid period and whether or not there has been any longer term shift towards delivery of services and potential savings around that as well yeah thanks miss just on that point about lessons from the Covid 19 you obviously none of us would have wished it to happen but just building on the points that carol made i mean lots of things were done very very effectively and you made a specific point about the involvement of the voluntary sector and the service delivery at a local level you know i'm not going to sit here and claim it was all 100 perfect but it was a lot of really innovative and very very fast paced and effective service delivery undertaken during the immediate aftermath of the sort of march 20 december 2020 period some of that is still going on but i think the commission would say that there's a lot of also a lot of evidence that we're going back to old ways and it sounds like i'm a stuck record but it takes us back to the the new deal and the the fiscal framework that might come within that i mean if there was as carol was indicating if there was a loosening of rules if there was more trust if there was more flexibility potentially more revenue reason avenues for local authorities to follow and they could then pass on those conditions to the voluntary sector in their own local area all of that would sort of potentially replicate the atmosphere of service delivery and service transformation that we saw during the height of Covid 19 and i think the commission is worried that whilst there was a lot of good practices carol was saying during that period that and some of it has continued a lot of it is now starting to look like we're going back to the the old terms of rules and regulations i'm afraid yeah we've heard that previously so yeah so we're just pulling together the local government overview the more narrative report which will be out in may and that's something we we're exploring in that report what we haven't been able to see is a big shift towards different models of service delivery so there isn't a big shift that we've can see as yet around joint services or lead councils or what some services maybe it's once for Scotland i think that's been discussed as options as well we're not seeing that change yet but there is a lot of discussion and appetite about how the model for council councils needs to change and i think it does come back to that point about what's what are councils for but at the moment we're not seeing that shift and i suppose the danger is that the learning points and the flexibilities that were available during the Covid pandemic if they tighten up then it restricts councils ability to do things differently and i think there is a lot to be said about freedoms when there's more flexibility and there's more freedoms there's more ability to innovate and that involves discussions with with communities as well so it all kind of wrapped up community empowerment place local needs local knowledge local potential all of that kind of comes to play but at the minute we're not seeing that change what we are going to be saying in that report though is that it can't go on councils often financially not sustainable and services are not sustainable going forward unless there is a big shift to wait that services are provided yeah just one final question you know we've had integration of health and social care we've had a pandemic and we now have what the government's proposing with the national care service i know from speaking to councillors from all parties actually that then creates a kind of environment where actually you're not being able to look towards what has been what currently is and what you want in the future so do you think that's preventing some of that innovation and capturing different models which have been successful during the pandemic to to embed them now rather than it's sort of great i'm trying to think of the right word to say it's sort of a pause we're seeing while we wait to see what parliament's going to present to councils really i'm sure that that that is an issue i mean i think if you ask some of the people in the next session i'm sure they'll be able to confirm that but the uncertainty about what's happening with the national care service so the uncertainty about what the workforce might look like uncertainty about what local government will look like when social care is removed from it all of those things i think inhibit the creative space required to actually be looking at different ways of delivering things so i'm sure it gets in the way i think there's probably a question that you need to ask about you know council directors and chief executives as well thank you thank you thanks very much thanks miles i'm now going to bring in paul mclean thank you convener i want to move on to revenue raising options open to councils one on a short time basis and one in a more medium to longer term basis i'll start with the kind of the short time basis and it's really just what you're thinking about your views at the moment and about what's council's ability i suppose to to look to raise their own income and how much that changed over the last decade the second part of the question looking at longer term is we've been doing a wee bit work in terms of what other countries do in terms of local government finance scotland is approximately and the rest of the UK's approximately raises 15% if it's on income if you look at europe that's about 50 ish so and we've kind of looked at workforce park in levy we've looked at the visitor park tax levy and so on which is kind of almost a start but the question for me is do we have to look at how we can give local authorities more powers in terms do that now they can pick or choose from these powers that are there now and i'm not suggesting scotland goes down the street but some other countries for example have a local sales tax have local income tax great other taxes that they've got so it's really just looking at from both the short term and the medium to longer term what your thoughts are on that ability to raise their own income well we are certainly encouraging local authorities to think across the whole range of services of whether there's the case for charging if there is what level of charging would match the cost of delivering those services but there's a long way to go i mean the public in our estimation assumes that public services are free at the point of need based on the nhs model although it's not true of the nhs and it's not true of most services so there's a lot of work to do i think to change the acceptance of charging before you actually get into the detail of charging our view would certainly be that local authorities need to get on with it but it can't just be a kind of blind blanket charge for everything it's got to be really thought through and again the community has got to be engaged and they've got to understand the reasons for it but let me bring colleagues in carl do you want to come in yeah i was just going to to say that i know that some some parts of of the sector are calling for more powers around general competence rather than specific income raising powers because scotland is diverse and every council will tell you that they're different from the next and and what will suit those local communities in terms of how they can raise money so parking and visitor levies may not be great for certain communities but there are a different kind of levies that they might see that would be appropriate for them but do they have the general competence in order to pursue that so i suppose it's about again flexibility and freedoms i definitely can't answer off the top of my head what the change has been over the last decade in terms of income and fees it's never been an enormous part of the budget but i think the one thing that would be concerned about that any revenue raising powers and any revenue raised is not a substitute for core funding revenue is raised in the local community ought to be flexible for that council to to spend in the local community so i think that is the point i'd like to make yeah i mean we very much agree with the latter point that carl made there about any flexibilities that are delivered and i'll come on to hopefully try and address the short longer term points you raised paul in a minute it need to be seen as additional to core revenue you know that core revenue has to cover the delivery of core services but and i think it comes to your point about short and medium to longer term mean there are there's not been a lot of movement i don't think the commission can see in the last few years around flexibilities but there is a little glimmer of hope if that's the right phrase in terms of what's coming down the tracks and everybody will be aware you know we're sitting in Edinburgh whether transient or a visitor levy is now being approved and we'll come into operation in the next year or so none of us commission msp's local councils won't know the full effect of that for a few more years now but that that to the commission's view is a welcome willingness to devolve some powers to local authorities to give them that degree of flexibility to add on to the core revenue or the core grant that carl just alluded to but there's a lot more that could be done just on that point and it comes back to the point that carl made as well about the general competence and that's maybe something that needs to be raised and i don't know if that's something maybe through the new deal again in terms of looking at that because if it is at general competence it is widening the ability for local authorities to look at that but i don't think that can be done i think it needs to be done right across you know if that's a discussion because of in terms of that but i think that that's that's a really valid point i think you know i would agree and i mean me just to make a final point about the the 50 figure you mentioned poli am very familiar with this you know that is a figure that applies to most of continental europe and also i have to say much of england can raise up to 50 percent of local authorities can raise up to 50 percent of their revenue directly whereas it's much much lower as you said here in scotland there's been loads of work done on this i mean i've forgotten the exact name of the report but because i produced a really detailed study on this i think it was called strength in local democracy in 2089 which showed a path to get from where we are now i think 13 18 it varies a little bit to sort of 40 percent it brings us back around to a potential inclusion of some of that in a new deal on a fiscal framework because that would give local authorities a huge boost in terms of flexibility to add on to the funding of core services that would allow them to hopefully pick up on some of the transformation points that the chairs have been making in earlier comments to the convener. I've got a second question which is again this is different one obviously we can talk to about there obviously is there's inflation in pressures at the moment and obviously there's obviously long standing capital spending that the local authorities plan for now inflation from last year to this year has jumped up massively nobody could have predicted it had gone there i suppose the question is are you confident local authorities can invest infrastructure that they've almost agreed on in the last year or two in terms of where inflationary pressures are now at. I think the thing that really will have an impact and it's just beginning to emerge is the impact of increased interest rates we've had a lengthy period of very very low interest rates and we've kind of got used to that as being the norm and it's not the norm and what i was preparing for this one case that was drawn to my attention was Highland Council planning to do to build a school using borrowing and initially the project was the construction cost was 15 million initially the amount to be paid back was about 23 million but that was when interest rates were 2% with interest rates in the five to six percent region the amount the council will have to pay back is now 15 million and that's bound to influence the assessment of whether this is a viable project or not and i think we're seeing quite a lot of similar things happening that people are scratching their heads and saying well i wonder if we should do this project or if we should do it as quickly as we were planning or whatever so that's part i think that we just have to keep an eye on do you want to add? Bill just on that because again that's the next question i was going to ask was you know will will you be monitoring that over the next year because i think that there will be that impact on capital projects being delivered or delayed or spread over a longer period of time so undoubtedly i mean our annual financial bulletin will look at it from a financial point of view and our overview bulletin will look at it from the point of view of impact on services so yes thank you thanks very much we're now going to move to questions from Annie Wells who's joining us online Annie good morning convenient good morning panel we've heard mention of the the new deal sort of a during this session but what i would like to know is what's the commission's understanding of how the new deal between government and Scottish government is progressing and what in your view are the obstacles to reaching an agreement? Thanks Annie i mean i'm possibly going to repeat a little bit of what i've said in the earlier comments but i mean our understanding as a commission was that until very very recently it was on track to be formalised and concluded for the beginning of the financial year 23-24 so basically this April and the cabinet secretary i believe was before you just a couple of weeks ago and confirmed that that's unfortunately not going to be the case and i think from a commission's perspective we're sympathetic to the rationale and the reasons as to why because there's been specific global and UK pressures around financial issues that have led to that delay but i guess from our perspective at the commission all we would make a plea for is that you know it's that old saying isn't it you should really fix the roof while the sun's shining and the sun ain't shining just now in a fiscal sense it's a really really challenging time as the chair of the commission has outlined already for local authorities and we really do need to see a longer term fiscal framework where potentially we could move away from single year settlements for local authorities from the Scottish government to maybe multi-year settlements that would make a huge change to their ability to medium and long term plan all of part of a fiscal framework within a new deal so our understanding is probably very similar to yours at the moment it's based on what the cabinet secretary said a few weeks ago i think i'm right in saying that it'll be on the record she indicated that it would be potentially a few months away and i would just encourage everybody involved in this debate to keep the you know in the most diplomatic way possible keep the pressure on the government and COSLA to make sure that this is delivered within a few months because there is a danger that we just end up slipping into the next electoral cycle i mean i mentioned right at the start i think in answer to the kevinas one of the kevinas original questions that the local governance review which preceded all of this was first launched in december 2017 which was you know two cycles ago almost and i think we just collectively need to guard against this slipping into another electoral cycle and make sure that there is some jointly agreed fiscal framework within a new deal within the next few months as the cabinet secretary said perfect thank you for that andrea and i think we i think we all know the the saying when the sunshine and fix that roof but the other thing you spoke about the sort of a fiscal framework and how how that could operate in practice you mentioned that multi-year funding and and stuff like that i mean is there any other is there any other sort of a information you could shed light on as to how any other new financial arrangements could work well i might i might bring blive in caroline on the detail of this but i mean i would just refer the committee back to the resource spending review which was launched in may 2022 by the cabinet secretary of finance at the time um kate forbes and that that did outline in quite some detail the um what could be included in a fiscal framework and i think i'm right in saying that's now being repeated in some written evidence that the current local government cabinet secretary shall robson is given to this committee and it should give evidence orally just a few weeks ago i've mentioned a few times and there's a lot in the resource spending review none of which i think to the best of my knowledge i'll turn to blive in caroline a second has been rode back on which could be part of it's not just the longer term settlements one two three years but there's other aspects that are in that resource spending review which would make a great deal of difference to local authorities but i don't know if blive wants to come in on it or caroline the detail yeah just one minor point um so upon agreement of the fiscal framework there's then the option to consider what that includes now i know that the previous evidence session touched on this as well around the distribution model so that's something that could be reviewed at that point in time now clearly it's potentially present in a situation where there may be winners and losers from a change in the distribution model but you know it's for the Scottish Government and COSLA to determine what the right distribution model is so is that based on you know primarily driven by population or is there maybe a shift to to look more towards deprivation has been the kind of main driving factor between how funding is distributed so i think having the fiscal framework in place will make those discussions far more straightforward than they probably have been up until this point but i think that the sequencing of that is correct in terms of having the fiscal framework fully agreed before then engaging in those further discussions so that's another aspect that i think you know there could be some really big benefits from from exploring further i think there's some principles that we would like to say in the fiscal framework we'd want to see that there's more certainty and stability that services and funding hence services can be sustainable obviously given the discussion we've had already a reduction in ring fencing we'd like to see more transparency and also more certainty in respective kind of in-year changes the money that comes in during the year is a very complicated picture throughout the year many changes and additions to the budget small amounts large with conditions attached without with reporting requirements i think a reduction of the burden on councils in terms of reporting on on specific grants that they're given um trying to think of what else we will not see yeah i think that yeah just just those things really help councils improve their ability to plan and budget and look at services going ahead and create a bit of headspace to do the things that take a bit more time like looking at prevention so i think the new deal in itself how will it improve outcomes how will it enable there to be better trust between local government Scottish government and communities how will it enable them to work together to look at prevention how will it in an earlier intervention but also plans that are realistic and deliverable so i think there are quite a lot of principles that we would like to see when we do see what it what it looks like thank you very much for that my final question convener is when we heard about the local governance review but basically what has happened to the wider local governance review beyond just the relationship with local authorities and what should be happening to improve community empowerment local democracy and community wealth building do you believe that communities are more empowered than in 2015 when the community empowerment act was passed maybe a question for for bill i think the short answer is i'm not sure that we know in detail um we are making it quite clear to local authorities that we believe very strongly in community empowerment and community engagement it can be i know from personal experience quite a painful thing to do because people are not always very restrained in the criticisms that they offer but it undoubtedly improves relationships and services so as a as a philosophy we think it's the right thing to do and we want local authorities to be doing more of it across the piece as for examples than what we think of them carol do you have anything you can offer i wasn't thinking of examples but i was thinking about everything that just said kind of applies to that it's very difficult for community empowerment to work if there isn't flexibility in what councils can do so i think that that's the fundamental for me it's got to be real it's got to be based on trust and co-operation co-production all of the things that we did see happen during the pandemic but i think fundamental is that local flexibility to actually do things differently because if you engage communities you set up expectations that things might change that things will change in the way they want them to so the more flexibility locally to implement national policy in a local way to reflect local diversity i think that that's kind of the important part really annie just to try and go back to your opening point there about what's happened to the local governance review i mean i think we may be touched on this earlier but just to reiterate i mean our understanding of the commission and audit scotland is that the main tenets of the local governance review are basically you can see this in the forward and in the commentary to the resource spend on review are being subsumed into the resource spend on review which should deliver the fiscal framework as part of a new deal so they are all interconnected but there is a strong point i think you are alluding to which is that you know we need collectively we need to keep track of some of the commitments that were made way back in the local government the initiation of the local governance review which as i've said several times goes back to december 17 to make sure that those are being followed through in the delivery of a new deal fiscal framework as part of the rsr thanks very much for that panel thank you convener thanks annie and thank you that brings us to the end of our questions and i think it's been a very useful conversation to get your perspectives in a bit more detail so thank you so much for coming this morning and now to spend the meeting to allow for a change of witnesses our second panel today will focus on local government finance and potential fiscal arrangements under the new deal for local government and we're now joined in person by martin booth who's the executive director of finance at glasgow city council and the chair of sipha scotland branch and kirstie flanigan who's the executive director at our garland butte council and is the chair of the local government directors of finance section we're also joined online by robert emat who is the executive director of corporate services at dundee city council and i welcome our witnesses to the meeting and i'll open the session with the first few questions the cause of president told the committee that councils are facing probably the most worrying set of challenges that we have seen in local government for many years i'd be interested to hear if you agree and if so what are the specific challenges facing your local authority and the communities they serve and maybe i'll start with folks in the room so maybe start with kirstie yeah i would absolutely agree that we're facing a significant challenges i think many of the directors of finance within the section this is probably the worst year they've ever experienced in terms of trying to balance the budget and i think there's a perfect storm in that we've come out of covet we're in place in faced with increasing inflation pressures and increasing interest rates and also increased demand for services as well so all these together give us a really challenging situation for balancing budgets within the current year we're in within the next year we're about to enter in and the financial sustainability of services into the future thank you very much for laying out that difficult picture martin do you have anything to add kirstie's covered the main points that kind of the pressure from inflation this year particularly has made this i think that's what's made this the worst or most difficult year we've ever had and the demand for services on the back of that because of the cost of loving crisis really has been but overall the future financial sustainability of local government i think has to be brought into question which did lead to the unprecedented act of the 32 local government directors of finance writing jointly to the cabinet secretary at the end of last year and robert also if you want to come in you can if you can type it on our in the chat function but also i'll just bring you in now if you want to add anything to what we've just been talking about thank you convener i just i suppose i wanted to highlight the pressure from pay and and two-thirds any of our staff our pay so a lot of our costs are pay related and i don't know if you've seen um but the sgc have put recently put out their request for next year's pay settlement which is around a 12 asking for a 12% uplift so that pressure i don't want to comment on the specifics of that but just to highlight really that pressure hasn't gone away and there's still a dispute going on around teachers pay for the current year and i think in previous years we've had the ability to manage and to make changes to services in a context of a fairly low inflationary environment that they've been working in and we're now in a very different place in the last in the last in the last period of time and the other thing i'm thoughtful about in that context is that the cost pressure on pfi and ppp contracts on which are largely based on these statistical inflation indices and so they're not escapable thank you very much for that i'm going to move on to um conversation around the real terms increase so the accounts commission highlighted a real terms increase in Scottish Government funding to local government in the 10 years since 2013 to 14 and again in 2023 to 24 there's a real terms increase compared to equivalent budget figures for 2022 to 23 be interested to hear why local government argues that a settlement of 13.2 billion for local government is not enough and what more is required and maybe martin i'll start with you this time yeah thanks and it was entered on the back of the accounts commission report that you've just been discussing in the press coverage on the back of that a Scottish Government spokesperson was quoted where they quoted the real terms increase to Scottish Government's budget but then quoted from local government in a cash terms they didn't compare like with like because like for like they don't compare there has been significant cash increases but that's because they've come with additional services so just in recent years the introduction of 11 40 hours the introduction of free school meals those services that have been introduced that are funded increase that amount of funding and certainly earlier you asked about the 570 million the 570 million pounds is not an extra money to deliver existing services it's predominantly to deliver additional commitments from the Scottish Government whether that be funding towards pay whether it be the transfer of empty property relief from non-domestic rates to local government from Scottish Government so it's additional services the additional rollout the next stage of free school meals is included with that as well so actually the actual increase in Scottish Government local government funding from Scottish Government this year is 71 million the 38 you quoted earlier was before last week when another 38 million was sorry 32.8 million was returned to the local government settlement okay any courtesy anything to add i don't think i've got anything particular to add yeah i think it's i think it's it's unfortunate that uh that people compare it in different ways and we would like to get to a position that you know we're all comparing the the increases in the same way uh so uh i think it also the the context in which the 570 million was spoken about was in the context of the that that asks from us and and causula being one billion but the 570 million and the one billion are two different things because the 570 million is additional additional services so it doesn't actually meet any of the one billion pressures whereas martin says there's 71 million there that meets that one billion of pressures so it's unfortunate that different figures get bandied about in different ways thanks for that and hopefully with the work being done on a new deal we can get that clarity and that alignment robert i'm going to come to you with my next question first um so this is about the letter that um that the directors of finance wrote to the deputy first minister and it states that over over the last few out five years local government has delivered a range of new policy initiatives which have not always been fully funded over the longer term and to be interested in hearing from your perspective and then also others if you've got other things to add uh for example which policy initiatives in particular have been delivered by councils and what impact have these had on local authority finances thanks community so i think i suppose i'd start by by saying i i don't see any significant what councils are trying to do and what the governments are trying to do i would say we're very lined up and if i think about the priorities we've just agreed for our council about addressing child poverty about about addressing climate change and about growing the economy are very much in line with what the government's trying to do so that piece you were just talking about and about can we understand what the difference is and what we are trying to do so the initiatives that councils have been taking forward and i think the 1140 hours is perhaps one of the best examples where additional funding significant additional funding was provided to do something i think councils would support seeking trying to do going forward is absolutely very welcome that's what i mean i don't think in policy terms as a direction but there is a real challenge in terms of how we're managing to deliver ongoing services that continue to need to be provided now within my council we've we've made savings of the order of 140 million over the last 10 years or so in terms of making things more efficient redirecting resources to where they are needed so funding has come for new initiatives but we've had to look at what we are doing in the background on other services to meet additional cost pressures within services and they range they vary from council to council so the cost pressures that are being faced in remote remote and island ways are probably very different to the challenges that we face we face within Dundee so i suppose one of the discussions that we've been having with through COSLA is around funding for core services the day-to-day service that we're providing as well as investing in and delivering new services thanks Robert anybody else Christine yes so Robert mentioned early years there's also additional funding has been provided for additional teachers additional funding for free school meals and the issue we've got is that that funding is given one year and then it's never inflated in future years so then we have to meet the cost of that inflation in future years and that erodes some of our other core services and there was discussion earlier on about how much is controllable within local authorities and that figure becomes smaller when we've got to continue with these polished paying for the inflationary aspect of these policy initiatives so we would like where there is new policy initiatives for there to be inflation built into that in future years so it doesn't erode the existing core services thanks and just to add to that you know so it just as an example free school meals was funding was provided but we're all aware of the pressure and the inflationary pressure on food prices from our own domestic shopping bills that same pressure applies to local authorities in buying the food to deliver those free school meals but there's no inflationary account taken of it the other point that Robert made at the start about 1140 hours 1140 hours was building on an existing policy so there was already a number of hours provided but there was no protection to that bit of budget so that inflationary pressure has actually gone back even further than the 1140 hours and that you know paying inflation since that was introduced has been quite significant much higher than previous years but that's not funded okay thank you very much for that i'm now going to bring in willy coffee with some questions thank you very much convener and good morning to you i wonder if i could invite you to dive into the ring fencing swimming pool and offer some perspectives on the discussion that we had earlier you might have heard bill saying that the accounts commission's estimate was about 23 per cent was ring fence and cosler saying it's about 60 and the scottish government says it's about seven could ask you for your own perspective of how where you see that those figures and perhaps offer the committee an explanation of how you arrive at that maybe martin kick off please again it's one of these where everybody's kind of correct depending on how you interpret it so i think bill was quite clear about the sort of legal ring fencing part which is the bit the scottish government are referring to the other is about it's really about direction so for example for the last three or four years the scottish government has insisted that we provide flat cash to the as our contribution to the health and social care partnerships so for Glasgow that's just under 30 percent of our budget is what we spend on social work if we have to give them flat cash then that is that is restricting what we can do with that so i would argue that that 30 percent is absolutely directed which is really where you get to cause this figure of 60 percent obviously it was brought up earlier that last week there was a bit of a change to do with teachers that's directing spend so if we're not allowed to change our teaching workforce then that's directing that spend so i'd actually argue that if that comes in that figure is much much higher than 60 percent because again 39 percent of Glasgow spend is an education of which a very sizable percentage of that is teachers so when you start to add all these bits together as well as the funding that comes directly from departments for particular initiatives you're getting to a very high figure i would argue well over 70 percent but it's down to your interpretation of what's directed and how much flexibility there is around that direction okay thanks thanks martin cursedy robert any additional perspective on these figures and why they're so variable yeah i think i think martin's explained that very well but you know and and i agree i think we're above the 60 probably more towards the 70 so so that that does mean when we have our budget gap it's that 30 we're looking at to try and deliver that saving and that's really challenging because that's the services that mean a lot to the public i'm not saying education and social work don't either but you know you've got your waste your bins your you know your leisure facilities your cultural facilities so you know it means that that's a deeper cut for them because that we would consider that the remainder of it to be ring fenced robert finally so i'll hide it some of this is at the heart of where the decision making is for local government so you know we can have an argument about what the percentages are or where the control is and i suppose from a local government perspective we will want to see local decision making about the best way to invest whether it's in teachers or in social care and where the border is across those and we've been having a discussion you know around what's the balance between support staff in school and teaching staff in school and that i would contend is a local decision that needs to be made locally so some of that is around what that relationship and i think that's at the heart perhaps of the question that the new deal addresses around how do we make decisions that best serve our communities and you talked a little bit earlier about immunity empowerment and how are those decisions made at a community level or at a council level or at a governing level so they're achieving the best outcomes because i think you know just to go back to what i was saying before what we're achieving in outcomes i think we're consistent about what we want to get to it's about what's the best way of understanding those and probably having an open conversation about the best way to achieve them thanks very much for that robert thanks community i think i'm coming in after the next question as well so thank you for that moment thank you mark griffin thanks community i just wanted to talk about in your transfers from other government portfolios and how how they're treated how they're viewed by local government how central government contend that you know in your transfers they're part of the general revenue grant that councils have absolutely full discretion and autonomy to spend them as they see fit what is your view of you know in your transfers from other portfolios what reporting mechanisms are attached to those and what restrictions are there on how you can use them yes i think the first point would be i don't think we've got full discretion of how we spend those they come with very specific requests so for example in the last year free school music tuition and not charging for core care come charges and education were two policies that come in we've not got discretion to continue to charge for music tuition that would mean an issue that individual councils would have had different policies on in the past councils would have taken a decision that you know it may have been the lesser of two evils to charge children for music tuition that discretion was taken away and it was funded but these things all come with reporting so in 2022 there's 77 papers taken to the settlement and distribution group to agree the funding and that's for for generally for departmental transfers to agree the basis of funding and how it was allocated the year before that in 2021 there was 93 so that's a lot of individual pots of discretion that generally come with reporting on them the term that we are often given is it will be light touch but it's still reporting and in an environment where we're under significant financial pressure we're reducing our staffing every bit of reporting brings it brings a challenge because it's the same scarce resource that's having to do all of this so i would i would absolutely i think generally we would agree with with the with the intent the point that robber made i don't think we're miles apart on on agreeing what's important but but it's the the strings that come with it and the the level of direction i would argue that we should be agreeing strategic priority so absolutely robert mentioned child poverty dealing with child poverty is really really important but how best to deal with child poverty will not be the same in glasgo as it is in argyll and bute and actually giving the flexibility for local authorities to determine the best way to deal with child poverty to meet their local circumstances would be far more powerful can i just add to that as well i suppose it's the administration burden we've got from all these additional sources of funding that you know when we have to do reporting so and martin mentioned that the number of funds that there are it's an issue we raised in the directors of finance letter to the dffm as well because you know the expectations of the public is that there's still more that we can do in the time of the the real financial pressure that local government has so they see these new services coming online and think local government can still continue providing that's becoming challenging as well okay and i guess the ultimate test of whether you've got autonomy or not for these is there any clawback so if you decided to continue with charging for music tuition would the government clawback the funding that they provided for that or or anything else whether it was free school meals or or any other initiative can the government clawback that money if you choose not to spend it on where they are asking you to i think that's a really topical point with the situation from from last week when you know there was the education situation where the the government intended to put some legislation in about pupil teacher ratios and so so whilst whilst government would say we have autonomy over it if we do then something that that is not light because i think that there's some savings options where we're leaked into the public domain from some councils and then that's why that intervention has come in last week so it's an interesting question of what real autonomy we have we did get a letter from the deputy first minister at the beginning of November and it made it quite clear in that letter that you know we as democratic elected bodies have the freedom to spend our resources you know as the decisions that we need for our for our local for our local circumstances but you know whether if we actually put that into practice that that would be allowed i think it's a test thank you thanks mark can i bring willy back in thanks very much again convener i wonder if i can ask you for your perspective on the use of reserves perhaps at the councils that you represent we heard bill saying earlier that two-thirds of the councils are planning to deploy some element of their reserves to to meet the requirements in your head what could you offer a perspective on what your own council is doing and maybe a general perspective on how how you see the whole position about reserves and how they should be used and deployed in local government again i think our colleagues from the council commission covered this reasonably well and that they explained the difference between kind of earmarked reserves and un earmarked reserves so quite a lot of our reserves balances are are held for a particular purpose quite often a scottish government commitment quite often funding comes very late in a financial year and it can almost spend in year but it's still to be spent for that purpose so it's really the un earmarked reserves that we've been focusing on as blithe said every council will have a policy but audit scotland's guidance is between two and four percent of our un earmarked reserves obviously if it's a smaller council you might be nearer the four percent whereas a larger council you get more flexibility and you can be nearer the two percent glasgo's policy is two percent of net expenditure we hover around about that mark most of the time in the current financial year we will dip a little bit below that because it's there for resilience and we've tested resilience this year because of the cost of living and energy and utility inflation particularly but we will then aim to recover that over the medium term the the use of reserves to balance budgets i think there's a perhaps a little bit of misunderstanding we certainly wouldn't allow just to use reserves to to balance the figures it would be where there is a saving that's been put forward that isn't going to deliver its full value in year then we might use reserves to underpin that now again you can only use reserves once so that would be a very difficult decision to take but practicalities are that we would sometimes use reserves to buy us time for a particular saving to fully deliver so for example if you were taking a saving in education which operates really on a school year so from august to to june rather than from april to march then it's quite often difficult for education to make a saving starting first from 1 of april so you'll get roughly two thirds of that saving in year you might use reserves to underpin the other third because you know it's coming so i would consider that still to be prudent so i think that's probably the way most councils are using reserves to just buy them some some time over rather than just using cash and you one of the two thirds will be dipping into some reserves i think historically we've used a little bit of reserves but we take into account where our reserves balance is that will be more challenging this year because we've just come out of the cost of loving or inflationary pressure yeah similar to martin we i wouldn't advocate the use of reserves for for revenue spending and it's not something that we do i think sometimes the figures in the national reports there's maybe sometimes a timing issue you know it might be like certainly for covid we got quite a lot of money later on in the financial year and it was not to you know it was first things that the following year so while that might look like we're drawing in reserves it's for a particular purpose so you know i'm i'm not planning to use reserves the majority of our reserves we build up for to support our capital programme and commitments of that nature rather than use it for recurring revenue expenditure and no plans to do that in 2023-24 either thanks because say robert indeed what's the picture and indeed intent in those two reserves so the council's not decided what it's doing for next year yet but but a very similar position to what custody and martin have outlined that the what i was going to act was what we have seen and where we will be looking at using our covet reserves is around whether still haven't recovered from the impact of covet on the business of as usual of the council so two areas particularly for us where income hasn't recovered around leisure trusts and around car parking where the reserves that we set aside we recognised would be needed over a period of time while those built back up and it remains out as to the extent to which services will recover from covid and should the only other thing to add is i think we're increasingly facing significant risks around inflation and around cost pressures in year that perhaps over a you know a long period where we had relatively low inflation didn't exist where we're talking about three or four million pound increase in energy costs in a year that makes you think about whether two percent which for us is is just a little over eight million in the year is sufficient so maintaining that sufficient reserves to have resilience and not having to impact on services in the short term is is really important just one other thing to add which is indirectly related is that is that and we're using we're using money from this year to help with energy costs from next year's we're very keen that we protect services and i think i'm sure all councils are so we're not looking to making sure we're not cutting services for things that are temporary and i think as martin was describing money is we would use balances sometimes to smooth the impact of something so we provide the best services we can and we manage change effectively okay thanks very much for that robert my last question to you is on the funding formula just to get your perspective on whether the funding formula is correct appropriate needs adjusted or otherwise and there's a huge amount of debate about it and some of the figures that we have and in front of us today show that i mean Aberdeen city in Edinburgh get the smallest per head settlement in scotland but if you look at the real terms changes to the revenue allocations Aberdeens at the top at 7.2% in the scottish averages 3 so there's a whole set of variables in the funding formula just maybe to ask for your perspective on the funding formula are we happy and content with that i suppose the answer to that will be no but does it need to be adjusted and is that a fair way of allocating resource to scotland's councils i think the first thing would say is we wouldn't like to comment in any individual council we're kind of representing all 32 is as best as we can and there is differences i think that the argument is that there's a number of things that influence the costs of providing council services population and and the demographics of that population is clearly one of them i think the others are to do with a rurality so the kind of super sparsity thing that it costs more to collect a bin that's two miles away from the next bin than one that's next door to the next bin and deprivation so i think that there'll be a number of other factors but i think that they're probably the headline ones that providing services to rural and deprived communities influences that demographic or population allocation we have a system in place i don't think anyone would claim that system was perfect but at the precise moment time it's probably the best we've got making changes to that in a time of austerity in a time of reducing costs i think would potentially be devastating to some of our local authorities and and while i would argue that all of the local authorities are on a knife edge as regards financial sustainability i think changing the funding formula when we're in that position would be impossible for some authorities in an ideal world you would you would start to change that formula when you've got a growing pot so that in reality those that you would argue are overfunded and be very cautious with saying that would have lower increases and those that were where their population was growing or where their circumstance would change would have a bigger increase and that's how you do it but it's been a long time since we've been in that position i am old enough to remember when there's growth options in our budget every year but most of my colleagues don't remember that i can remember it martin thanks thank you very much for that perspective kirstie nothing to add from what martin said there i feel like i'm happy with the funding formula that's in place i think we've got a formula that as martin says it's not perfect but it's the best it's the best we've got at this moment in time and until we we have a have a move on the quantum in an upwards direction i don't think we could revisit that at this moment in time okay thank you robert indeed perspective on the funding formula is it right is it needed adjusted thank you apology it's imperfect and i think that it's very complex so i think it's really important to remember i suppose local government delivers a whole range of different services and in different ways to suit historic decisions that have been made and policy decisions that have been made that suit their own local circumstances so it is always going to be complicated the point i'd like to just draw out is that one of the things that i think most directors of finance would say is stability is really important and the floor mechanism that's within the distribution that provides is stability over the piece means that there aren't sudden shifts which could have devastating effects on individual services and if you look at where the biggest elements of the floor are and the impact of removing those from some of those size councils it will be devastating to say we're just gonna we're just gonna change the picture it needs planning and i think as castie was aligned to the floor would eventually grow out if the budget was growing but it's not and and that represents a challenge for us so so i would submit that at the present time not looking at the looking at the distribution is not the thing to do we should be look at what fiscal flasks abilities we've got to try and grow the resource to support what we're trying to do in local government and that will be a better focus of our our time at the moment though i think it's fair to say not every director finance will necessarily agree okay thanks very much for that everybody thank you thanks very much willy and i'm going to bring in paul mcleannan i think robert you just can you set me up for the next question because one of them is moving on to revenue raising options that are open to councils at the moment and i think you may be all being present in the last panel where i kind of asked a question around about both short term but also longer term and carol called or mentioned about general competence about councils having the ability to raise funds so i wonder if you can comment on just saying what's available at the moment what's preventing you doing that at the moment and probably looking more medium term i think we mentioned at the last panel that most local authorities for example in europe have the ability to raise about 50% of their own income in scotland it's about 15 ish so again it's maybe looking short term what would you like to see and what prevents you and medium to longer term what other powers do you think that local authorities could be looking at in terms of that mentioned about local sales and i'm not proposing these these are what are in other countries local sales tax and so on roof taxes and another visits to hotels all that kind of stuff in terms of that so i just want to be in comment on that and i've probably come to yourself robert just in terms of that first of all we can just mention about fiscal flexibilities and then go to the two others i think we've lost apologies and thank you so just to look at a couple areas i suppose firstly think about fees and charges that the councils can levy and i think that there's two aspects i'd like to draw attention to one is i think there's a natural limit particularly in a time of a cost of living crisis about what we can charge for services and the delivery of services so you know we've been having discussions about you know what can you charge for car parking and what income will you raise and where are the where is the demand and price point set and i would suggest at the moment that's limited the ability to raise prices and find that people respond and pay higher prices and generate significant income in that way i think is probably limited i think as councils we'd like to see control of the things like planning fees and things that we could we would about where we're there paying for services sitting sitting with councils so we make our own decisions about what we levy and that reflects what those costs are and that picture varies across across the country in terms in terms of the demand for services and the types of services that are that are delivered council tax is supposed as a whole subject area which you get into and it's not a perfect system it's a well understood system by the public in terms of tax raising powers i think most councils use the flexibilities that are within it around empty homes and things and second homes i would submit there are areas where councils could have more flexibility and you know to look at additional charges for empty homes particularly if you think of the significant shortage of housing and the fact houses are sitting empty then the more levers we've got to help us with that type of thing that's important but i also think there's a real challenge around council tax in terms of valuing the base and there's a quick win i think in the system for example in terms of revaluing a house if it's extended or enlarged or whatever or improved to an extent that it will put it into a different band on that. The last thing i can touch on if i may briefly is about rates because my view would be that having different poundage rates across Scotland would be would be at risk of creating a competition on something that wasn't necessary but i think rates can be a huge driver of economic activity and one of the things we're grappling with is how do we keep city centres alive and how do we keep shopping precincts and retail alive and provide it with a maximum support so rates is a hugely powerful thing so i think we welcome the devolution of an occupied property rent but i suppose i would contend that if we're if we're local government and we've got devolved powers to do our things then decisions about that should sit at the most appropriate local level for making sure you can you can influence what happens in your area because that all supports economic growth. I suppose just to go back to my point on poundage what we don't want is competition i don't want to be competing with nearby councils on on economic growth or want to be working collaboratively. Robert thank you for that. Mark, i'll probably come to you yourself of course to come in first and again as we're looking at the medium long term as well if you have any thoughts on that. I think just to add to Robert's point i think first of all fees and charges in lots of cases and i'd exclude the example Robert gave on planning but in lots of cases we're the provider of last resort we're not providing services to welfare individuals we're providing services to some of the poorest and most vulnerable in our society so our ability to raise charges i think is severely restricted by that i think some of the other things that are being talked about just now like work place parking levies and visitor levies they're not game changers they're not going to fundamentally change the position for councils some councils will gain nothing out of a visitor levy because they haven't got a big tourist population and other authorities it will it will make a significant help but again you know so if glass gets about three million visitors if that's two pound a night it might be six million pounds we're not one point eight billion pound net budget so it is helpful but it's in the roundings i think looking towards the medium term i think for a locally democratic organisation to be only raising in Glasgow's case about 12 percent of its net budget comes from council tax that doesn't tie in with local accountability so there has to be a much a fundamental review of the the base of that revenue raising powers and if that involves looking at local income taxes local sales taxes all of the other things that happen in other places of the world i think that has to be part of that medium term i suppose putting your your syffa hat on as well is that something that syffa or the director of finance have discussed at this stage robert's are representative on the fiscal framework work so robert would be leading on that but but it's it's something that's been discussed over a number of years but but it's it's not progressed i think changing council tax has probably been higher up the agenda but again it's how you can change that where it fundamentally changes the funding position okay i'll maybe bring robert back in at the end of this just to see if he's any comments on that one but kirsty anything just on no martin mentioned the visitor levin in argyll and bute that's obviously something that would that would give us significant revenue so but you know unfortunately there's a process to go through and then a lead-in time before that that's brought in i think the lead-in time's probably a bit on the long side i think it's deemed to be 18 month lead-in time from when you acknowledge you're going to use it and i think in europe things like that have come in in six months rather than 18 months but again it'll be interesting to see how we're restricted in in spending that funding because some of it will probably need to go towards existing resources that would otherwise have to cease because of funding cuts so i think it's for to be used for additionality for tourism there's a well-being legislation that kind of wraps around that as well how it's raised and yeah but we need to just see kind of what what additionality means because there'll be some services that we might want to continue to provide which we can't so therefore they would i would say they should be deemed as additional but that but that'll be a significant revenue for us in argyll and bute should members choose to adopt it. Robert just coming back to the point about the i mentioned about the fiscal you know fiscal discussions that are going on around about obviously looking at the medium long term i don't know have there been discussions held at that within that group on the medium to long terms things that we're talking about local sales tax for example so so yes we haven't talked about local sales tax but we have talked about what are the measures that could come in and what would be the process for bringing in measures to look at them because he makes a very good point about the time frame to respond to these things but also the fact that i mean visitor tax is a good one where there are costs associated with visitors and the income is probably likely to call it what's the word coincide with the with the costs of managing and looking after visitors in rural areas so but i think what we need is a process that is fleet of foot and we've had a discussion about that how do we produce a process that works but also how do we make sure that we produce a process that doesn't cut across other initiatives and other policies so if we're trying to for example if you were trying to encourage visitors what would that mean if you increased your visitor tax and what would that have what's the wider economic benefit so there's a real focus on making sure there is no unintended consequences of those things but there are the particular things that we are lucky thinking about is what can you do with council tax what can you do with rates what can you do with any other levies that you can raise and who you can raise them on there isn't a huge number of ideas if i'm honest of other things that people have thought of so obviously interested in the ideas people have got and there's also that weighing up the burden of bureaucracy and the cost of administering a tax versus what you're going to raise and how you're going to manage it which is of course one of the challenges around the visitor levy is how do you levy it how do you collect it what's the cost of administering it which is of course one of the advantages of council tax that it's collectible when we know where everyone is okay thank you thank you i think the second question has kind of been answered dropped up in answer thank you Paul are that going to bring in Miles Briggs thank you convener and i was interested with the the line of questioning and Paul had there with regards to the fiscal framework and you know flexibilities which have been called for so i just wondered in terms of that how do you would see funding rules and agreements between local and central government around that changing and to provide that flexibility you touched earlier Kirsty in terms of what government say in terms of you having the right to decide your local priorities and spend but it's clear that's not then the case when there's policy commitments which are only you know you've got to deliver possibly a joint conversation about delivering on the outcomes i think there's quite a lot of focus on inputs rather than what what what we can deliver jointly so you know that that's that's one area i think we we could work together because i think i think i don't know whether it was Robert earlier or somebody in the earlier session had said that you know a lot i think it was Robert a lot of what we're trying to do in in scottish government are trying to do and what local government are trying to do is quite similar so if we could just get together and you know and not have that not not of that focus on inputs i think that would be helpful just to expand on that point Robert i'd mentioned earlier about your classroom assistant so if our objective is to approve attainment in our schools which i think again is something that everybody agrees that we would want our children to do as well as they possibly can and to improve attainment in lots of authorities they have worked to approve attainment by by introducing classroom assistants to to spread the burden of teaching and to be able to teach in different ways by imposing limits on the number of teachers that might take away that flexibility and take you down a very specific route so number of teachers is an input that's not an outcome and really scottish government's commitment should be on on strategic objectives and outcomes and not on inputs yeah thanks robert did you want to come in on this as you're leading i think this comes back to one of the things that we're trying to introduce through the work on the physical framework is a transparent dialogue so we're looking to try and produce data for the government to have a look at earlier in the year when it's starting to develop plans about what's happening in local government what are the cost pressures we're facing in local government what are the services we're trying to deliver so that it's a transparent conversation i think there's always going to be some tension between what might be national priorities and what might be local priorities and how you might choose how you might choose to manage those so i think that we need to just accept that we need to work together in an open way and i really want to just emphasise what Kirsty was saying is we need to be thinking about what we're achieving so our our discussion should be about about attainment are we achieving attainment are we achieving positive destinations for our children living our schools they're the measures that i think we should be looking to be accountable for and we should be looking to deliver on how much should we how much are we growing the economy what are we going to to grow the economy what are we how are we supporting the the objectives not measuring what's going in because that implies that there's no room for efficiency in how things are done and there's always there's always a bit of scope to do things better and differently and it's important that we're not embedding the same way of doing things but we're looking at can we can we have it smarter in all of the things that we do thank you thank you for that and i think that's where looking back to the historic concordat which government used to talk about is there a model which we've already tried but which has been around freezing council tax previously not about necessarily more income for councils to raise which could be picked up which councils have signed up to previously which you think would work to provide that flexibility at a local level which everyone's telling us they want to see but also that national accountability around outcomes i should probably hold my hands up here and say i actually wrote the concordat along with a civil servant when i worked at causula 15 16 years ago i think the key things that were within the concordat to my mind were one of them was a reduction in ring fencing so legal ring fencing has reduced since then there was a significant move at that time but what happened that's been replaced with that direction the other big thing was that there would be a view to increasing or protecting an increasing local government share of the Scottish government budget that clearly hasn't happened now that's because there's been a significant increase in health spend in that time frame and i don't think anyone's suggesting there shouldn't be but maybe the focus again is too much on inputs and not enough on outputs and that focus should be on health and wellbeing rather than than just the nhs health is a much wider thing so i think some of the sentiments of the concordat were very positive i think we've probably lost sight of them over the years thank you anyone else want to come in at that point no otherwise back to you camino thank you i'm going to move to any wells online any are you there i am camino thank you and good morning panel this is a question for each of you and it's basically what progress has been made in your local authorities towards more use of the participatory budgeting and how much more budget and service service decisions do you think can be devolved to local areas i can kick off i would probably say there's maybe been limited use of kind of what the kind of historic definition of participatory budgeting was we did we did do it for our third sector grants which is a small element of our budget but it was proved that the administrative burden of doing that it wasn't really cost effective and i think participatory budgeting is work works fairly well if you've got a distinct pot of money but with the with the reducing resources we don't many councils don't have a distinct pot of money that you can put aside to kind of do that real participatory budgeting so we are we are looking whether we can involve our communities more in some localisation of some services but but yeah maybe limited in what we've actually managed to do in participatory budgeting to date sorry again kind of echoing curse these comments about it is it is a really difficult thing to do we did a number of pilots in participatory budgeting to really test how we'd engaged and how much support we needed to give to communities in some circumstances to be able to do that we do the Glasgow communities fund which is a fairly sizable amount of money maybe not a massive percentage of the council's budget which is our grants to the third and voluntary sector and we've developed that process on each three-year cycle to be more engaged and more specific but it's massively over the demand is way beyond what we can afford so that brings challenges as well I think that the real issue around full participatory budgeting which is where you take you know exactly how you're going to deliver services is really really difficult in a time when when you're making cuts I feel really sorry for our elected members who we're all elected to represent their local communities to do good to make their communities better and they're now overseeing a series of cuts that's not what they were really coming to election for and the same argument applies to our local community to ask people you know where you want to cut it's quite a difficult thing to do and we have to balance the budgets so again in a period of growth where if you're expanding services that becomes a much easier task but when you're making cuts it does feel very challenging as part of our budget process in Glasgow we do a public consultation we use Ipsos to randomly select participants so that they reflect the city on all the different kind of factors and thankfully we were back in person for most of them this year whereas the last couple years have been online so it was far more engaging but again you're asking people you know what they want to protect so it's it's a difficult ask it's not about where you'd like investment so you know I think we can make progress but we need to get the quantum sorted first thank you thank you just just to add to that I suppose I mean this we've still got some good examples we're doing a piece of work around a climate change participatory budgeting piece at the moment but it is what's the word labour intensive and part of that is to make sure that it's not that we reach out to everyone we need to reach out and there are excluded groups in the work that's going on there but that's working largely with areas where we have discretionary spend and I suppose my concern is discretionary spend will reduce if we're under more financial pressure in future years I think there is also a tension around you know we've got local elective members who are familiar with their communities they'll know what the issues are they will tell you that the issues that they people will come to them are around potholes and bins and dog waste you know there are things that will come forward and I think as Martin was saying I think if we're coming to a discussion that says would you rather have your grass cut or your potholes filled or a teacher then who's making that decision and where does that sit with national policy and all that conversation needs to be transparent because we need to make sure we're responding to community needs and my concern is that with if resources become scarce or we focus them on different priorities we're going to pull in from some of those areas which are really important to communities and that's where I think the voice of local elective members is really important being on the ground and for those of you that have been elected local elective representatives you'll know about the issues that come forward all of the time so I think it is a challenge and I suppose in my mind it's something we need to continue to work out the last thing I'll just say is Covid has made us take a step back I think all of that consultative and engagement stuff is much easier in person than it is trying to do online that's thanks very much for your answers I mean I just got one final question given that councils do have the flexibility to increase council tax in 2020-24 could I ask what processes and assessments do councils go through to make sure that the increases are proportionate and fair to households across their local authority areas? I think that's quite a difficult question certainly I would feel for me to answer because the setting of council tax is very much a member decision and also the setting of council tax should actually be the balancing entry to help to balance your budget but within the current cost of living crisis I think members are very mindful of the challenges that individuals face in meeting ends meet so I think there's a balance or consideration that members have got to take about how much people can afford against how much we really need to raise and I think Martin had mentioned earlier that the council tax figure for his council was around about 12 per cent if your overall budget we are a bit higher than that in Argyll and Bute to balance the budgets with the challenges that we're facing would mean you would have to raise council tax by quite a significant amount and that would be unpalatable for local members and also for the general public so it's a difficult one for me to answer I completely understand I think that elected members are very aware of the cost of the living crisis and the impact that's having on local communities so they're very cognisant of the need for constraint but they're also cognisant of the need to balance the budget and therefore to have potentially council tax increases it is a political decision I think from an equity point of view you could argue how fair council tax is, how much the value of your property reflects your wealth in some people that's probably a good measure but we know for certain members of our society it's not a good measure and we could all give examples of people living in big houses with low income there is council tax reduction that will help but I don't think that truly makes it a fair tax but I think it helps for the most extreme cases Robert did you want to come in? Just briefly to add that I think when we put the information to members to make that decision then we provide them with the context they're making it in so they're looking at what the cost of living rise is they are looking at feedback from the budget consultation we've done and what the public have got to say about it and they're looking at the other measures that they're putting in the budget that might be to alleviate cost of living pressures so I can't speak for next year but for example last year we allocated additional money to help with fuel poverty and to help with food supply in the local community so the council tax decision is not taken in isolation of the other decisions that are made as part of the budget that we are setting. Thank you very much for your answers and thank you convener. Thanks Annie, I'm going to bring in Mark Griffin. My last question is kind of an academic question and you know directors of finance have been very clear about the the gap in the budget from what they are facing in terms of demands and what central government is providing what what figure can you put on what you would need to increase council tax in each event of your authorities to make up that shortfall? Of course they covered that slightly and last time in the figure we'd need to put council tax up with to close the gap would just be unaffordable. I can quote figures from Glasgow because they're in the public domain because they've been to council committees so my first financial forecast had a gap of £120 million predominantly driven by inflationary increases through pay through utilities and pay for this year and for next year and based on assumptions of what that pay increase will be we 1% of council taxes net of council tax reduction is about £2.4 million so that's a 50% increase in council tax since then I've done an updated forecast which took the figure down to £70 million that sounds like a massive increase but that was following the direction that social work had to get flat cash so we don't give them any of their pressures but we don't take any savings so it was £70 million from 70% of the council as opposed to 100% of the council but again £70 million, £2.4 million that's not an achievable figure so it has to be it's one of the tools in the box as part of the budget balancing exercise so we need to take significant cuts as well with after sort of 10 years of cuts there's some efficiencies in there but a significant element of our cuts so there are reductions in service but it would not be possible to balance that with council tax. I know that it's something that would never be imposed but that's why I'm saying it you know the question is academic but I'm still interested to know what the level of increase would need to be to cover it. So if we didn't take any savings and if we included social work in Glasgow it would be 50% okay thank you. I gave me time to do the calculations for our violin but again but as Robert made the point and Martin made the point it's one of the tools in the toolbox we would never look at it in isolation but for us our gap is around about 12 million and half a million every 1% of council tax raises approximately half a million so you know we we would have to raise council tax by 22, 23, 24% in isolation and as I say that isn't something you would consider. Okay thanks and Robert. So on the same basis if you look at what we put forward in in January and we had a budget gap of 14.3 million then it's about 23% I think you'd have to put council tax up and in a how do you describe it an academic sense obviously we're looking at how else we might bridge that gap because that's clearly not a tenable position to be in. Okay thank you thanks. Thanks Mark. I just wanted to ask I think it might be the final question. In the previous panel I was talking to Bill Moyes about his statement around the need for councils to focus more on service reform to find the safe path through difficult times ahead and I just be interested to hear when you hear that reform I asked for specifics before but maybe you've got some thoughts about that that would help me understand what he's getting at there.  Yep we did hear that question earlier and we did react. I think to say that there's not been reform in local government is is is inaccurate and unfair. I think there's some big headline thing so the creation of the health and social care partnerships was a reform to try to deliver services better and to work much closer with our colleagues from health. We've all had significant channel shift in how we deliver services no longer do people queue up to pay their rent or their council tax in a cash office we've moved things online we've changed how we deliver services but just a couple of examples of services that have evolved over time I think we've probably gone for you know evolution rather than revolution that's revolution yes so you know we used to have single bins that were maybe you know steel bins that the refuse collectors would lift and empty into the back of of our refuse collection that moved to wheel bins which were much better from an environmental point of view because they capture things better we now have multiple wheel bins and other types of containers so that we reduce landfill and we collect different types of recyclet in different things and that's a continuing Glasgow with four bins at the moment we had a paper at our city administration committee just last week that's proposing an introduction of a fifth bin to further refine our recyclet to make it more recyclable likewise libraries used to give out books and that's all they used to do now if you go into a library you can go in there to access the internet to get training on it and other things we provide employment support advice in libraries we provide benefits advice particularly with the role of universal credit libraries had a key role to play in that our improving the cancer journey service and other long-term conditions support service is all delivered through libraries and they still give out books as well so that service has massively transformed over the last sort of 20 years and completely provides a completely different service still does books as well that's great to hear that it still does books and but also this whole idea of stacking functions in a building and a space that's open to the public anyway christie you got it so martin's given some examples of reform but we have to remember that sometimes reform doesn't doesn't generate necessarily a saving so some some reform it comes at a cost and i'm just linking to that we are faced with in our gael and bute council at the moment one one is to do with introduction of the bmw ban in 2025 and that that comes with a significant pressure for us to deliver that so i think that's service reform from a scottish government perspective but it comes at a significant capital and revenue cost for our gael and bute council there is also a the move for the smaller vehicles will will no longer be petrol or diesel from 2025 and i had a paper across my desk last week and for us to replace all our small vehicles within the council is nine and a half million now to put that into context that's the level of our capital grant in one year so for us to replace all our fleet we would have to use in one year all our capital grant so that means you would not be doing any capital works in any of your schools or any of your other buildings so so you know we have done lots of reform but it's just a a word of caution that some reform comes with additional cost as well Robert what about Dundee so i think i'm thoughtful about the fact that we've we've already gone through a significant reform programme i think that when you think about front line services once you've got them running efficiently then there isn't a huge amount to do except to do less of them and and so if you think about the waste collection and the people that are collecting the waste and the people providing good direct care services and the people teaching in schools and providing direct services so i think there's always more we can do we can always go a bit further and i think there is there are still come some collaborative approaches but they're not significant in terms of the core front line delivery that we're providing and one of the things we haven't talked about today is capital so if you think about roads in particular which i know is a is a key issue for many citizens then what we are spending on roads is not going up and then that means that the condition of our roads in the long term is not going to continue but capital isn't either and therefore you know we've got we're looking at a new school at the moment and the impact of inflation on the back of Covid and brexit and the war on Ukraine is significant in terms of the cost of delivering capital infrastructure in the future and i think that's an area where we are going to be under increasing pre