I AGENDA ITEM No ...................

To: Policy and Resources Committee

From: Chief Executive

NORTH LANARKSHIRE COUNCIL

Subject: Scottish Executive’s Response to the McIntosh Commission - Comments by North Lanarkshire Council

REPORT

Date: 23 November 1999 I Ref: NJ/Ol/MCR072

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Purpose of Report

The purpose of this report is to draw attention to the Scottish Executive’s response to the McIntosh Report and to seek approval to comments by the Council.

Background

The Scottish Executive has published a response to the McIntosh Report and comments are sought on this response by 29 November 1999 (Appendix 1)

Views are sought on a number of issues on which the Scottish Executive have invited further comments. This report seeks to address each of the eight specific questions in order.

North Lanarkshire Council Draft Response

question One

How can we best reach out to the most disadvantaged young people and help them become active citizens?

Response

North Lanarkshire Council has initiated a number of opportunities for young people to become active citizens by e.g; developing a youth strategy in partnership with young people themselves. Earlier in the year the Council arranged three ‘Open Space’ events, one for practitioners from departments, other agencies and the voluntary sector who work directly with young people, the second for young people themselves including the most disadvantaged from homeless accommodation or residential children’s homes and a third which brought the two groups together for a 2% day conference.

Consultation and participation were central to the process of preparing the first Children’s Services Plan with copies of the Summary circulated to all children of nursery and school age in North Lanarkshire together with meetings for particular user groups including children looked after and accommodated and young people who live in supported accommodation.

The Council, through the Social Strategy, established a pilot project - Health and Homelessness - in partnership with Lanarkshire Health Board to promote health, fitness and opportunities for young homeless people accommodated by the Council and Blue Triangle Housing Association. Following the successful implementation of the pilot a further three programmes were delivered during 1999.

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However, there is much more which requires to be done to engage more positively with young people. The development of our Youth Strategy and Community Learning Strategies should help to address this issue. The role of formal education through the curriculum requires to be further explored.

While the issue raised in the Response paper centres on disadvantaged young people, the question should be raised of why this should be seen as an issue only for one category of young people. It is suggested that the wider question of involvement of young people in civic life generally and the whole process of civic education should be the principal focus.

Ouestion TWQ

Ministers would welcome views on proposals for improving the resource allocation, management and transparency of the local government finance system, within the current policy framework.

Response

Pooling funding streams: This is worthy of fbrther consideration and should be linked to the Modernising Government agenda, particularly in terms of integrated service provision. There are already developments undenvay in areas such as the overlap between social work and primary health care which could be researched to identify the attendant difficulties, benefits and opportunities. I.T. must be a key driver for progress in this area and it would be useful to clarify the Executive’s position on this and the future of initiatives such as Invest to Save and the Capital Modernisation Fund to finance the necessary I.T. developments.

Long Term Stability: The introduction of the Comprehensive Spending Review (CSR) has been helpful but has lost momentum with the advent of the Scottish Parliament and the bedding in of its own financial procedures. Assuming that current indications of a further CSR in Summer 2000 are realised, it would be beneficial to see this established as an annual, rolling three year review. Useful work has been done by the CIPFA Directors of Finance section in preparing guidance on three year budgeting, which is due to be issued in the near future. Supporting arrangements on the finding side by the Executive will, however, be essential if the maximum benefit is to be obtained for both revenue and capital planning.

Financial Management: The suggestion of an exchange of best practice in this area is welcome and could build on arrangements already in place, such as practitioners’ seminars, conferences and so on. The idea of secondments between different strands of the Scottish public sector (including the Executive), and perhaps also the private sector, as a means of promoting best practice should be supported. There may be scope here for CIPFA andor Audit Scotland to develop a forum which could develop this and other initiatives designed to improve financial management.

Business Improvements Districts: Much would depend on precisely what this entails and what the purpose of these would be. There is certainly a need to foster a better understanding of the current rates system in the business community and to begin to amend the perception of local authorities as unfriendly to business and incapable of being trusted with control of business taxation. If this strand is to be pursued the scope of the exercise should be widened to allow consideration of the general issue of the relationship between local authority services and finding, insofar as these impact on the business sector.

The Executive’s response to McIntosh also indicates that local authorities may wish to raise other financial matters for consideration:- section 3.15 to 3.18 highlights other issues to be discussed.

Best Value: The Executive is concerned with the overall allocation of finds which are mainly provided via the Treasury’s block grant mechanism. The principal elements in this allocation are local government, the health service and government agency bodies such as Scottish Enterprise and Scottish

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Homes. It would be interesting to know whether, and if so how, Best Value or its equivalent is applied in these other areas and to what extent it is taken into consideration in the overall allocation of funds. This could be a productive approach to the question of whether local government receives an appropriate level of resources. Caution is needed, however, to ensure that the system of resource allocation remains essentially needs-based.

GAE Distribution: The current arrangements are soundly based and represent a credible and objective approach to complex and difficult issues of resource allocation between Councils. This point needs to be emphasised, notwithstanding the acknowledged turbulence in the system as a result of local government reorganisation. The specific issue regarding indicators of deprivation may be particularly problematic given the limited availability of quality data but is in principle no different to other factors involved in the distribution process. If there is a political desire to address this matter as a priority, this can be achieved through an injection of additional funding. This could either be the subject of a bidding process or be distributed on a basis agreed between the Executive and COSLA, pending the development of robust indicators.

Capital Control: The annuality problems associated with section 94 arrangements have long been recognised and the Executive’s commitment to three year budgeting makes annual capital consent limits difficult to justify. The overall requirement for section 94 control is also questionable given the incorporation of debt charges into revenue guidelines. With the onset of resource accounting into central government, this may be the right time to address this issue.

Council Tax: A number of proposals to improve Council Tax collection were contained in the joint Scottish Office/COSLA consultation paper ‘It Pays To Collect’ issued last year. These ranged from joint billing and collection of council tax and rent, to the lodging of earnings arrestments directly with employers, rather than through Sheriff Officers. Many of these would require changes in legislation and little progress has been made since the paper was issued. With the Parliament now up and running, and other aspects of Council Tax collection receiving political attention, the time may be ripe for pressure to be applied to accelerating the delivery of arrangements to improve the level of collection and reduce arrears.

Ouestion Threc

Should local authorities in Scotland be given a power of general competence? Does the lack of such a power really hamper authorities? What form should that power take? What safeguards should we provide?

Response

The relationship between Local Government and other key public and private agencies has developed significantly over the past few years. There are a number of Partnership arrangements established to address key strategic issues e.g. Social Inclusion; New Deal; Childcare Provision.

The Community Planning Agenda is being developed by all Local Authorities in Scotland, with Plans to be submitted to the Scottish Executive by the end of the year.

In formulating the Community Plan for this area the North Lanarkshire Partnership have expressed the principles which will be adopted by working together. One of the underpinning principles is that of Continuous Improvement - the key purpose of a community plan is to articulate the way in which the residents of the area can benefit through new approaches to service delivery by the public sector agencies. This will be at the heart of all community planning activity. The partner agencies undertake to apply a philosophy of continuous improvement to their joint activity, to set in motion processes which seek to identify opportunities for more efficient and effective partnership working as a matter of course.

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If through the Community Planning process organisations identify areas of joint action the powers currently conferred on Local Authorities may restrict participation. Local Government legislation and in particular the Local Government Act (Scotland) 1973 does not now reflect the new role for Local Government, acting in partnership with others, and in a community initiative role, for the benefit of the residents in an area.

More fundamentally the whole issue of a power of general competence goes to the heart of the relationship which should be developed between Central and Local Government and can truly be regarded as a test of the trust which Central Government is prepared to invest in Local Government. Local Councils are being asked to take on a leadership role for their communities and, in doing so, they have what no other local agency or deliverer of local services possesses which is a democratic legitimacy based on the fact that members are elected to office.

If Local Government is to be regarded as more than just the sum of the local services it provides, then it is important that that role should have a legal basis whereby Councils can take action to meet the perceived needs of their communities without always running the risk of the ultra vires rule being broken. It is accepted that this might be statutorily constrained by a financial limit (McIntosh has suggested, say, 1 per cent of the Council’s general fund expenditure) and that restrictions would be required to ensure that Councils did not encroach on the statutory functions of other agencies.

Ouestion Four

Should the Scottish Local Government elections be held on the same day as the Scottish Parliamentary elections or should they be held mid-term?

Response

In terms of the electoral cycle a case can be made for either the Local Government Elections being timed mid point of the Parliament or on the same day as those for the Scottish Parliament and the Scottish Executive’s Response document sets out well the cases for and against.

It could be argued that a combined poll diminishes the importance of Local Government with electors focusing on national issues and that voters may be confused by the different electoral systems. The danger is that a vote in the Local Government election is not in fact a vote in relation to the Council or indeed any of the Local Government candidates and that in itself diminishes the role of the Council.

The alternative argument is that if the primary purpose is to increase voter turnout then this can best be achieved by a combined poll along with the Scottish Parliament elections. An ancillary point relates to the mechanics of the combined poll. Although Local Government coped with the May 1999 elections, and the evidence tends to show that voters coped with the number of ballot papers, in many areas the system showed signs of strain. Further clarification would be required in relation to the process of having two counts.

It is suggested that the balance of the argument lies in there being separate elections for Local Government. If Local Government seeks to enhance its own democratic legitimacy and its community leadership role, then that purpose can best be served by a separate and distinct electoral process.

question Five

Should there be legislation to allow political management structures that involve a directly elected leader? If so, how should that leader be elected? Should there be some sort of provision that would allow local people to insist that the idea of a directly elected leader be put to the people? What sort of safeguards on the power of the leader would be needed?

3.3 8 Response

3.39 The debate on the concept of an elected leader has been limited because the role is not clearly defined.

3.40 It could involve an elected figurehead, with an entirely facilitating and influencing function, or it might involve a range of powers. These powers could range from a simple veto to a wide variety of policy making responsibilities, including powers of appointment.

3.41 Essentially there are a number of different models for the elected leader, and the advantages and disadvantages for each model need to be identified and subjected to close scrutiny. It is not possible to elaborate on such an analysis in this paper, but a number of issues which may be raised are:-

0 there does not appear to be a great deal of factual evidence on how the notion will refresh democracy - as opposed to a potentially greater likelihood of encouraging better leadership, or acting as a more effective change agent.

0 the question of how much power should be concentrated in the hands of one individual must be considered very carefully - much of the debate has assumed a ‘strong’ Leader role, but there is a case to be made that the role could be exercised effectively through the building of alliances, facilitation and leadership

0 any concentration of executive power in the hands of one individual would need to be balanced by equally robust mechanisms for review and check.

0 the increased profile given to one individual potentially contradicts the emphasis being placed otherwise on the need for community planning, and on the notion that a community and citizen focus should be at the core of the constitutional arrangements of local democracy.

0 the role of the elected Leader, and the extent of powers delegated to the position, cannot be considered without a parallel re-assessment of the roles of other elected members whether as ward councillors or as policy makers, and the collegiate manner of decision making through the Committee system..

0 the idea of an elected Leader is only one of a number of options available to revitalise political management and leadership - there are other models available which do not involve the elected Leader.

3.42 In considering a future role of elected Leader, one must also have regard to the civic and ceremonial roles carried out by current provosts. This civic or ceremonial role is a very important function of local government and should not be discounted. There has to be some doubt as to whether one person could adequately combine the present civic duties with that proposed for a post of elected leader with substantial executive responsibilities and for political leadership.

3.43 The proposed role of elected leader which is most commonly envisaged is more like the role currently performed by a Council Leader. Not all Councils have separate posts but where they do, it is the Council Leader who is effectively the political head of the Council.

3.44 The Commission did not find any significant body of support for directly elected leaders (“provosts or mayors”) and this would suggest that there is not widespread support for any legislative change to provide for delegation of power to a single member.

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Furthermore, analysis of the Scottish Local Government Information UnitKOSLA 1999 Scottish Councillor’s’ Survey shows that although a large majority of Scotland’s councillors support the McIntosh recommendations that Councils should have a power of general competence, control over business rates and that there should be an independent review of local government finance, there was very little support for a directly elected leader.

While the issue should be further examined as the McIntosh debate progresses along with the Leadership Advisory Panel, the view is offered at this stage that there is no immediate requirement for legislation to allow for executive delegation of power to a single member: and while the presently separate positions of Provost and Leader of the Council should be subject to appointment by the Council itself, there is not considered to be a significant demand for a leadership model involving election by the wider community.

Ouestion Six

Views are invited on -

whether the ban on employees serving as members of their own Council should remain

whether, if the general ban was maintained, a relaxation on the need for an employee to resign on nomination to their own authority would be worthwhile (while maintaining the requirement to resign if elected to serve); and if a relaxation were to be considered, whether option (i) or option (ii) above is preferable.

Response

The arguments about retaining the ban on employees serving as members of their own authority are clear; there can be a clear conflict of interest which could lead to acute difficulties particularly on discussion on management, policy or budgetary proposals. Equally important is the question of perception and public confidence. Whether or not an employee is, by virtue of their job, in a position of direct conflict, if he or she is an elected member, a public perception would be created of conflict of interest. On the separate question of amending legislation to allow an employee to stand for office without prior resignation on the basis of a resignation if elected, it would seem more equitable if there was some relaxation to the present rule that the employee must resign at the time of nomination. Option 1 is less complicated that Option 2 and therefore may be preferable.

Question Seven

Views are invited about whether the salary threshold should be increased, and if so, to what level?

Response

Politically restricted posts account for only 2% of local government staff in Scotland and it is suggested that there is no overwhelming argument for raising the current salary threshold for politically restricted posts. The current system, including the review mechanism is, however, unduly complex and not well understood by many staff and should be reviewed with a view to making the rules clearer.

Ouestion Eieht

The party whip in Council business. Views are invited. Would amendment of standing orders be effective?

Response

3.57 The primary responsibility for reviewing whipping practices should rest with political parties themselves, as identified in both the McIntosh Report and the Scottish Executive Response.

3.58 The general background to this debate should recognise that if a candidate for political office as an elected member is elected on a particular party ticket then that member should recognise that the party system requires a degree of discipline to be in force.

3.59 There are a number of areas where political groups could make it clear that it is inappropriate for whipping to be applied such as quasi judicial issues concerning issues such as planning or licensing, propriety matters and staff disciplinary matters. It is suggestion that, rather than the Council Standing Orders, it would be more appropriate if the National Code of Local Government Conduct could articulate these areas in detail so that members, officers and the public alike could all be clear on where whipping should or should not be applied.

3.60 The Executive’s reservations on whether amendment of standing orders would be as effective as McIntosh suggests are recognised. It is suggested that while guidance on the circumstances where the use of the party whip is appropriate or inappropriate is a matter for the National Code, Councils could make provision for recording in their Standing Orders declarations that the whip has been applied in particular items of business.

4.0 Recommendations

4.1 It is recommended that the Committee

(i) approve the comments detailed in this report;

(ii) authorise the Chief Executive to submit these to the Scottish Executive as representing the views of the Council; and

(iii) authorise that these views be communicated to CoSLA.

SCOTTISH EXECUTIVE

REPORT OF THE COMMISSION ON LOCAL GOVERNMENT AND THE SCOTTISH PARLIAMENT

THE SCOTTISH EXECUTIVE’S RESPONSE

September 1999

SCOTTISH EXECUTIVE

FOREWORD BY MINISTER FOR COMMUNITIES

When the report of the Commission on Local Government and the Scottish Parliament (the McIntosh report) was published we lost no time in indicating that we welcomed its recommendations, and weimmediately set in hand a programme of action based upon them. Our overall response was set out in the statement which I made to the Scottish Parliament on July 2, in which I said that the heart of the McIntosh report is a process of self-renewal by councils, a process which the Scottish Executive is happy to endorse and assist.

I also promised in my statement that we would issue a consultation paper setting out how we plan to develop the McIntosh recommendations. There are also a number of issues on which we wish to hear further views before taking decisions.

This paper fulfils that commitment. It first sets out, in Chapter 1, the various strands of action which we are pursuing. Chapter 2 introduces and discusses the topics on which we are now inviting further comment; and the final chapter deals with other recommendations, which were not specifically addressed to the Executive.

Local government belongs to us all: it matters to every individual in the country. Our aim is to take it forward into the 21" century. In doing that, we want to hear from everyone who has a point of view. Your comments are invited, particularly on the questions highlighted in the paper, but also on any other aspect of the programme set out in this paper. Details of how and when to submit your response are given below.

Wendy Alexander Minister for Communities

CONTENTS

CHAPTER 1 : WHAT THE EXECUTIVE IS DOING ............................................................. 3

CHAPTER 2: QUESTIONS FOR CONSIDERATION .......................................................... 13

CHAPTER 3 : OTHER RECOMMENDATIONS ................................................................... 22

APPENDIX 1 : SUMMARY OF MCINTOSH RECOMMENDATIONS ............................... 24

APPENDIX 2: MINISTERIAL STATEMENT OF 2 JULY ................................................... 27

Responses to this paper should be sent to

Donald Coutts Local Government Division 2A The Scottish Executive Area 3-H Victoria Quay EDINBURGH EH6 6QQ

Or by e-mail to donald.coutts@scotland.gov.uk

Ministers may wish to publish responses to this paper. Should you wish your comments to be treated in confidence, you should make this clear in any papers you submit.

Further copies of this paper are available by writing or e-mail to the above address or by telephoning and leaving a message on 013 1 244 1477. Please speak slowly and clearly giving your name, address and postcode. Please give the title of the document you want and the number of copies required.

Comments should reach us by 29 November

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CHAPTER 1: WHAT THE EXECUTIVE IS DOING 1. As announced in the statement of 2 July, the Scottish Executive has taken immediate action on several of the key recommendations of the McIntosh report, as follows - The Renewing Local Democracy Group

2. The report made several fundamental recommendations relating to the composition of councils, including: the introduction of proportional representation for council elections (9- 11)’; a review of the nature, volume and timing of business, with a view to organising the business so that a wider cross-section of the community could realistically consider taking on the responsibilities of council membership (17); and a review of the remuneration of councillors (1 9)

3. The Executive intends to take these recommendations forward as an interlinked set of issues and has appointed a group - the Renewing Local Democracy Group - under the chairmanship of Richard Kerley (Director for the full-time MBA at Edinburgh University Management School) to advise on them. The membership of this group was announced on 2 July. It includes representatives of the major political parties, as well as people with a range of skills who will be able to consider the issues in detail. The group’s formal remit is:

“Building on the recommendations of the Mclntosh report, to consider ways in which council membership could be made attractive to a wider cross-section of the community, and councils could become more representative of the make-up of the community.

To advise on the appropriate numbers of members for each council, taking account of new management arrangements and the particular characteristics of city and rural authorities; and on the most appropriate system of election, taking account of the following criteria -

proportionality; and the councillor-ward link fair provision for independents allowance for geographical diversity and a close fit between council wards and natural communities

To advise on an appropriate system of remuneration for councillors, taking account of available resources”

4. The group’s work will thus extend beyond the McIntosh recommendations, in that it is to advise on the appropriate number of members for councils, taking into account the differences between rural and urban areas and also the impact of the changes to the political management structures of councils that will result from the implementation of other of the McIntosh recommendations. The group met for the first time on September 7 1999 and will report early next year.

5 . McIntosh also recommended that the legislation governing the Local Government Boundary Commission should be reviewed with a view to providing greater flexibility in determining ward boundaries. The Executive accepts this in principle. It will be examined in the context of the report of the Renewing Local Democracy group; since the electoral system

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’ The numbers in brackets, here and throughout this paper, refer to the numbered recommendations in the McIntosh report. The report’s recommendations are reproduced at Appendix 1 to this paper.

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chosen may itself have a fundamental effect of the work of the Boundary Commission.

The Leadership Advisory Panel

6. Another key set of McIntosh recommendations concerns the way in which councils organise their business and their political decision-making : every council is recommended to review its own conduct of business, against stated criteria of openness and accountability (13,14) and to draw up a job description for members (1 8). These reviews are to be scrutinised by a specially constituted advisory panel (29) and are to be completed by the end of 2000 (28)

7. This panel - to be known as the Leadership Advisory Panel - was appointed on 3 1 August, under the chairmanship of Alastair MacNish, Chief Executive of South Lanarkshire Council. It has members with a wide range of experience and expertise both within local government and beyond. Its remit is:

“To advise councils on the review of their decision making and policy development processes and the working practices which support those processes. In addition, the Panel will provide advice to Ministers on the outcome of the reviews councils undertake. ”

8. The Panel will work closely with each council throughout the review process, taking account of their views and in dialogue with them, so that the results should be acceptable to Ministers, Parliament and the public. The Panel itself will be providing more detailed and specific guidance on the conduct of reviews and the criteria against which the proposals will be assessed; but the main criteria are -

0 Council business should be managed in such a way that policy proposals and matters for decision by the Council are subject to open debate

e the Council must be able to effectively scrutinise the actions of the leadership or Executive and hold it to account for its performance

e the work of the Council should take place, as far as possible, in public and the reviews should look at whipping practices to see if they could be relaxed

e Council business should be organised in a way which makes it possible for as wide a cross-section of the community to realistically consider becoming a Councillor.

9. The McIntosh report emphasised, and Ministers agree, that in order to meet the first of those criteria, Councils with an informal political leadership structure should move to a formal structure. In many cases, this may require an Executive to be established in the Council, although Ministers do not want to be prescriptive about the type of structure that should be adopted. However, setting up an Executive does not of itself guarantee that the criteria will be met. As councils begin to undertake their reviews they will start to develop the detail of how an Executive will work in practice, both in terms of the operation of the Executive itself and how it relates to the Council as a whole. It is this level of detail which the LAP will require to adequately assess councils’ proposals. The panel will need to, and want to, understand the rationale behind proposals for each council’s particular circumstances. However it is expected that any proposal would:

e provide all members of the Council with effective roles

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0 spell out the relationship between proposed new structures and any decentralised decision making or advisory forums and community councils

0 strike a balance between giving the Executive the freedom it will need to operate effectively and the need for robust scrutiny through the Council and other appropriate forums

10. The panel needs particularly to be able to clearly understand how the function of scrutiny of the executive will work in practice. In many respects the development of the scrutiny role is the area which presents the most challenges and which also presents the greatest opportunity for innovation.

11. It is important that these reviews should be open and transparent. They should involve interested individuals and groups in the review process and should detail the consultation arrangements carried out as part of the review and the results obtained. In any case, as a minimum, opposition groups on the council, the council's senior management team and the general public should all feature in any consultation process.

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12. The relationship between proposed new structures and existing area committees, area forums and community councils should also be spelled out in the council's change proposals.

13. Councils are being asked to work to a tight timescale and are to produce their change plans, having completed their consultation, by the end of next year. Those plans will be submitted to the First Minister who will ask the Panel to advise him whether the proposals will meet the given criteria. Ministers hope that councils will have worked sufficiently closely with the Panel to ensure that their plans will be acceptable.

14. It will be evident that the thrust of the change process should be one of self- renewal by councils. Many have already begun the process and others are ready to start. Ministers hope that all authorities will see this as an opportunity to reorganise themselves in a way that fits the needs of government in the 21" century. Although different councils will produce different proposals, Ministers do not expect any council will be in a position to report that no changes are required: there is always room for improvement.

Other initiatives: the Community Leadership Forum, and Champions for Change

15. In order to assist this process of self-renewal further, Ministers have convened a Community Leadership Forum, bringing together local government Ministers and the Leaders of the 32 councils in Scotland. It met first on 9 and 10 September. Its aims are to explore the components which make for strong leadership through a process of discussion and interaction; and to exchange views and experiences on the process of cultural and organisational change in order to build on experience and good practice. It will be assisted by a number of individuals - Champions for Change - from other walks of life who bring to it a proven track record in the management of change.

16. The work of the Forum, the Champions for Change, the Leadership Advisory Panel and the Renewing Local Democracy Group are closely interlinked and their work will be dovetailed to produce a coherent package.

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Local government and communities

17. Several of the McIntosh recommendations are concerned with local government’s relationship with communities (23-26). They focus to a large extent on the role of community councils, but also acknowledge the range of other ways in which a council can relate to the communities within its area. Ministers recognise that in many parts of the country community councils continue to meet a felt need and provide a vital link between local communities and the council; and they recognise also the value of there being a cornmon organisation, the Association of Scottish Community Councils.

18. Community councils were however created to respond to a specific situation, namely the loss of local representation brought about by the creation of regional and district councils, and the abolition of the small burghs, in the reorganisation of the early 1970s. Much has changed since then: government policy on social inclusion, local government initiatives in developing other forms of consultation, for example through citizens’ panels and citizens’ juries, and local voluntary initiatives - all these things add up to a complex tapestry of relationships between councils and communities. It is against this background that the McIntosh recommendations need to be viewed.

19. Ministers believe that it is essential that communities are placed at the heart of decision making about the things that most affect them: health; education; housing; regeneration. This theory is being put into practice by building community participation into flagship programmes like community ownership, New Community Schools, Healthy Living Centres and Social Inclusion Partnerships. Local Authorities have a key role to play in all of these initiatives as service providers, partners and supporters of local communities and as partners of other agencies and the Scottish Executive.

20. push the boundaries of community involvement further through two new programmes.

Community participation is central to Executive policy but the Executive is keen to

a The Listening to Communities programme will provide practical support to communities and encourage organisations to change their structures, processes and behaviour to make community participation a meaningful reality. Supported by S3m to March 2002, the programme aims to get the best out of community focused initiatives by better co-ordination and sharing of expertise. Initially the programme will support the piloting of People’s Juries and Citizen’s Panels in Social Inclusion Partnerships, and the development of a National Skills Development Programme for community representatives and the people from agencies who work with them. The ultimate aim is to provide the strategic framework that will support the development of effective community participation in programmes aimed at promoting social inclusion.

e Working for Communities is another example of an Executive programme designed to bring together service providers and excluded communities. In this case the focus is on delivering local services which meet local needs and priorities. The initiative is supported by ElOm of investment to March 2002. It funds 13 pathfinder projects, across Scotland, aimed at testing innovative ways of giving communities much more influence over the delivery of local services. The programme will allow best practice to be developed and rolled forward to other areas.

21. Local Authorities are central to the development of these programmes through

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their key role in Social Inclusion Partnerships and Working for Communities pathfinders and through the Convention of Scottish Local Authorities’ (COSLA) membership of the National Steering Group for the Listening to Communities programme.

Local government and other bodies 22. A further dimension is added by Community Planning, as the McIntosh report acknowledges. Acting on the recommendation of the Community Planning Working Party, which reported last year, five councils have acted as pathfinders to develop new ways of bringing together in partnership and with a common focus the whole range of bodies interested in aspects of the welfare of local communities. The pathfinders have now reported, and their reports have been evaluated, under the joint auspices of the Scottish Executive and COSLA. Other councils are keen to follow; and the Executive intends to work with COSLA in developing appropriate guidance and support for all councils.

23. McIntosh also made a recommendation that the option of transfer to local government should always be considered in any review of other bodies delivering public services (6). This is already being implemented. Prior options reviews involve a rigorous test of the range of functions provided by a public sector body. Such reviews are carried out every five years to determine the future status of the body and include the examination of several options including: - continuation in present form, abolition, privatisation, contracting- out, transfer of ownership and merger with other public sector organisations. During the review process each option is assessed fully against agreed criteria. Examination of the options of transfer of ownership or merger with other public sector organisations will cover the full range of possibilities available (including transfer to local authorities).

Civic education 24. McIntosh recommended that Parliament and local authorities alike should give further study to the development of civic education (27). Although the recommendation is addressed to Parliament and the local authorities, the Scottish Executive acknowledges a responsibility in this matter; and it is worth setting out here the various initiatives that are already underway with backing from the Executive, from local authorities and through the voluntary sector.

25. Ministers have:-

e set out a new agenda for the development of community education in Scotland following the publication of the report “Communities: Change Through Learning’ (November 1998).”

e advised local authorities2 to develop targets to demonstrate local progress in achieving Ministers’ new priorities for community education particularly in relation to social inclusion, lifelong learning and active citizenship.

e supported the work of Community Learning Scotland, an active member of Scottish Youth Work Forum, which promotes and supports the development of youth forums.

e welcomed the initiative led by Community Learning Scotland and YouthLink that

’ In Departmental Circular 4/99 issued in April 1999 8

involved young people in developing and establishing a youth Parliament that met for the first time last June.

26. Civic education is also included within the curriculum in schools, giving children a grounding of knowledge that will help them participate fully in the democratic process when older. The 5-14 Programme offers a number of opportunities for pupils to learn about citizenship education under the subject headings of Personal and Social Development, Religious and Moral Education and, in particular, under Social Subjects within Environmental Studies.

27. In the context of the Scottish Parliament the Scottish Executive Education Department is currently looking at a range of measures aimed at highlighting the importance of education for citizenship: -

e The Scottish Consultative Council on the Curriculum have been asked to undertake a mapping exercise to identify and highlight for teachers the relevant strands of citizenship within the 5-14 curriculum framework.

e The current review of the 5-14 national guidelines on Environmental Studies will provide an opportunity to specify more clearly aspects of the political literacy strand of citizenship within People in Society in Social Subjects.

e HM Inspectors of Schools are co-operating with the Gordon Cook Foundation3 to produce a publication that will provide schools with a means for auditing and evaluating citizenship within the curriculum.

A proposed clarification and exemplification of personal and social education will highlight aspects of citizenship in the current 5-14 guidelines on Personal and Social Development.

The production of curriculum materials related to the new Scottish Parliament will provide an opportunity to highlight the political literacy strand.

28. Ministers are acutely aware of the need to engage the most disadvantaged young people in the process of civic education. It is of key importance that such young people are given the tool of knowledge of democratic processes and the encouragement to make their voice heard in local decision making. The “Connect Youth” network of young peoples’ forums aims to involve and empower young people to become active citizens, particularly those with little or no previous experience of formal youth activities. We would however welcome views on other ways in which it may be possible to reach socially excluded young people and help them participate fully in the democratic process.

II Q1. How can we best reach out to the most disadvantaged young people and help them ll become active citizens?

The Gordon Cook Foundation is a charitable organisation which funds work in the field of values in education 3 throughout the UK

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Finance

29. Although finance was not included in the remit given to the McIntosh Commission, their report includes a recommendation ( 5 ) that an independent review of local government finance should be set up. Ministers do take seriously the Commission’s view that financial matters are part of the agenda for change, but they are not persuaded that an independent review at this time would be beneficial. Instead, Ministers are already taking action.

30. The system of Local Government Finance has developed over a number of years through consultation between central and local government. Separate arrangements operate for local authorities’ annual revenue expenditure on services (other than housing) and debt servicing; for local authority capital expenditure and for housing finance. At their heart, these arrangements aim to provide a system of funding which is both fair and stable, but which can also respond to changing demands and circumstances. Local government finance is not, therefore, a fixed system, but is undergoing a constant process of review and evolution.

3 1, Local authority revenue expenditure is funded from a combination of local taxation (the council tax) and grant support from the Scottish Executive (known as Aggregate External Finance or AEF). AEF comprises three elements:

Specific Grants;

Non-Domestic Rates Income; and

Revenue Support Grant

The distribution of AEF aims to ensure that local authorities across Scotland are able to provide an equivalent level of basic service, to the same standards across the country, for a standard level of council tax; whilst acknowledging geographic, demographic and other differences which impact on their spending needs.

32. Whilst Non-Domestic Rates are collected locally, a standard system for calculating rates bills, linked to rateable values and a common poundage rate, applies across all local authority areas in Scotland. The proceeds are pooled and distributed to authorities as part of the needs- based central government grant distribution.

33. This distribution system allocates allowances to the various local authority service headings (e.g. social work, education, etc.) based on Ministers’ assessments of what authorities need to spend on these. These allowances are then distributed between individual authorities using criteria agreed through consultation with the Convention of Scottish Local Authorities. The allowances for different services are illustrative only, to help in calculating the total level of grant support for each authority. It is for individual authorities to determine their own expenditure priorities from the total resources available to them, other than for the small proportion of grant (around 8%) allocated through specific grants.

34. Separate arrangements apply for the annual section 94 allocations for authorities’ non-housing capital expenditure. These are also determined following consultation with CBSLA and are calculated on the basis of authorities’ relative expenditure needs for capital investment. Capital allocations, however, account for only around half of the total gross expenditure of local authorities, the rest being made up from authorities’ own resources,

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mainly receipts. The Government has agreed with COSLA that the priorities for gross capital spending should be pursued jointly through new partnership arrangements over the CSR period and that the existing system should be kept under review.

35. Ministers remain committed to the current framework for the needs based distribution of local government finance, Nevertheless, they recognise that there are many aspects of the present financial arrangements that need to be addressed and will aim to work closely and constructively with local government on these. Improved financial management, budget accountability and partnership use of resources are all central to our view of the modernising agenda for local government finance, to improve both accountability and management more generally. Ministers have suggested the following issues merit further consideration:

The innovative pooling of funding streams between central Government, local government and other public bodies, to deliver savings and joined up government, and to look at new ways of drawing in private sector resources.

e Ways of promoting greater long-term stability in the financing of local government.

e Ways of improving financial management in both local and central government and the scope for both sides to exchange best practice.

An examination of whether Business Improvement Districts could promote closer working between councils and businesses in their area.

36. Local authorities may have further issues which they would like to addto this agenda and views have already been sought from COSLA in discussions with the Scottish Executive over the summer, when it was agreed that the Executive and the Convention would jointly develop a paper for consideration at the next Ministerial meeting between the 2 sides, scheduled for November. In addition, since the Report of the McIntosh Commission was published in July, action has continued on a number of other fronts.

37. Firstly, a programme of reviews of the arrangements for distributing grant to local authorities was set in hand following reorganisation in 1996. The reviews need to be completed as soon as practicable and progress has been achieved this year in a number of areas, including population distribution, loan and leasing charges and stability. The outcome of these 3 reviews will be ready for implementation in 2000-0 1. Ministers have also discussed the process itself with local authorities over the summer and have agreed their request to add to this programme a further review of the priority given to secondary indicators of poverty and deprivation in the distribution process. The remit for this further review will be agreed by November 1999 and the aim will be to complete it for implementation in 200 1-02.

38. The review of the (non-housing) capital finance system is continuing and has been looking, in partnership with COSLA, at the single allocation formula and the development of arrangements to monitor delivery of the shared capital expenditure priorities (education, public transport and care and repair). A major part of the review is monitoring how the new arrangements for taking receipts into account in the distribution process will affect the distribution of net capital allocations in 2000-0 1.

39. The Scottish Executive also has in hand a major exercise that will lead to a revaluation of business rates, which will take effect on 1 April 2000, in Scotland, England and Wales. The Executive is committed to maintaining the principles of cross-border harmonisation and a

11

level playing field for business and industry. Differences in the commercial property markets of Scotland and England could however lead to different rate poundages in future, even to raise identical sums as at present. Against this background, Ministers believe it would be wrong to introduce any further turbulence for business, for example by altering the national regime for non-domestic rates.

I

40. Taken together, the various reviews currently in hand or under consideration add up to a serious and heavy agenda and reflect Ministers’ commitment to keep the wider issues of local government finance under review.

I 4 2 . Ministers would welcome views on proposals for improving the resource allocation, management and transparency of the local government finance system, within the current policy framework.

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CHAPTER 2: QUESTIONS FOR CONSIDERATION 41. This chapter deals with a miscellany of recommendations, on each of which Ministers wish to hear a wide range of views before coming to conclusions.

A power of general competence 42. The McIntosh report recommended that legislation should be introduced to provide councils with a statutory power of general competence. The report describes the current position on the powers of local authorities. Local government legislation sets out the constitution of authorities and a variety of other Acts give them specific powers, duties and functions. But there is nothing in legislation that embodies the authorities’ role as a champion for its community. Local government in Britain may do only those things which statute empowers it to do. This is said by some to prevent authorities from engaging in activities that would benefit their communities since anything for which they do not have specific powers could be deemed “ultra vires” (i.e. outside the legal scope of their powers). This also has a close read-across to local authorities’ community planning role where the type of activities in which they become involved may stray into areas where the legal basis for their actions in at best unclear.

43. At its broadest, a power of general competence would allow an authority to do anything that it believed to be of advantage to its area that was not otherwise specifically reserved or prohibited. Such unfettered power has obvious dangers and most agree that there would need to be some form of built-in control. That is where the problems begin: how could we give enough power and enough certainty to the scope of that power to make it effective without providing carte blanche for authorities to interfere in the work of other public bodies, Government Departments, agencies and the voluntary sector? What sort of financial controls would there need to be and how would that impact on our present systems? While we see that there is a case for something to be done, we need to be careful not to make the situation worse by creating a new set of uncertainties.

44. There are arguments both for and against giving local authorities a power of general competence. In its favour:

0 it would help with the community planning role in that:-

0 councils could identify things that would be of benefit to their area that are not being done by another agency and take action without the need for specific statutory powers to be created; and

0 councils would have more freedom to take part in joint action in partnership with other agencies.

it would encourage innovative solutions to problems that could help deliver the Best Value agenda

0 it would express in statute for the first time the fundamental purpose of local authorities as democratically elected champions for their communities.

it would symbolise the new trust that exists between local and central government, expressing the belief that local authorities will make responsible decisions about how

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to promote the interests of their area without the need for close statutory controls.

0 the McIntosh report notes that it would give specific form to the principle of subsidiarity .

0 it would reduce the need for authorities to spend resources checking the vires of proposed actions to be taken in the interests of their area.

45. Against:

0 it could increase the pressures on councils to spend which would lead either to less resources going to other services or to an increase in council tax.

0 it could lead to a duplication of provision unless the council engage in a careful reassessment of priorities, particularly at the margins as local authorities overlapped with the services that others provide.

0 there could still be a problem with vires if councils were thought to be using their powers irresponsibly.

it is not entirely clear that current legislation is a real bar to useful local activities so there may be no need for new legislation.

46. The Government at Westminster announced last year4 that it intends to introduce legislation for England and Wales to place on councils a duty to promote the economic, social and environmental well-being of their areas and to strengthen councils’ powers to enter into partnerships. That legislation will not apply in Scotland since local government is a devolved matter. It will enshrine in law the role of the council as the elected leader of their local community. The legislation will require councils to take a long-term view of the well-being of their areas and will put sustainable development at the heart of council decision making. They will be required to weigh up decisions against the three elements - economic, social, and environmental - and if necessary strike a balance between them. As well as the new duty, councils will also be given a discretionary power to promote the well-being of their areas providing that it is not used in ways that prejudice other council functions or the functions of other statutory bodies. The Government will also retain a reserve power to exclude particular activities or to set a financial limit where national interests might need to be protected. A Bill will be introduced to provide for these matters as soon as Parliamentary time allows.

47. The proposals for England and Wales represent a more tightly drawn power of general competence. Here, COSLA have suggested that the power should be couched in terms of a Power of Community Initiative which they would like to see complementing and mirroring a Duty of Community Planning. In their response to the McIntosh Commission’s second consultation paper COSLA suggested some of the safeguards that might be put in place to control the use of such a power:

‘ ‘mere the statute requires a council to do certain speciJic things and prohibits it JFom doing others the council would still have to comply with those requirements and prohibitions in the exercise of its power of community initiative. It would mean, in eflect, that the council only had the fieedom to do things in fields where the law did

In the White Paper “Modern Local Government: In Touch with the People” July 1998 ISBN 010 140 1426 4

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not already set out what councils can and cannot do. ”

“Secondly, the new power would be prescribed by a requirement that it did not prejudice theJirnctions of other statutory bodies in the area. ”

“Thirdlyl a council would be required to ensure that the power was not exercised contrary to the provisions of the Human Rights Act 1998 or that it was in breach of a council ‘s fiduciary duty towards its council taxpayers and ratepayers. ”

“Lastly, there will be a requirement to set a sensible limit on the expenditure. This would be best expressed as a percentage of the council’s general fund expenditure; I % would be an appropriate level. ’’

48. Since local government is a devolved matter, the Scottish Parliament is free to decide what will work best in the Scottish context. It may be that given OUT different legal system and different traditions, a different approach to that being adopted in England and Wales would be appropriate. Equally, many of the fundamental issues are the same and that is an argument for developing similar legislative proposals to those which the Government has put forward for England and Wales. Views on these questions are invited.

Q3. Should local authorities in Scotland be given a power of general competence? Does the lack of such a power really hamper authorities? What form should that power take? What safeguards should we provide?

The term of office for councils, and the timing of local elections

49. McIntosh recommended that councils should be elected for a four-year term, and that elections should be arranged to fall at the mid-point of the term of a Scottish Parliament. (8)

50. The case for a four-year term rests on the argument that there is a need for reasonable stability for planning purposes and enough time for the council’s policies to be seen to take effect. The fact that the Scottish Parliament is also elected for four years is also relevant. However there remains the question whether the local elections should be held at the same time as the parliamentary election or at mid-term. There are potential advantages and disadvantages to each and commentators have suggested the following as relevant factors:-

Turn-out.

5 1. Turn-out at parliamentary elections is normally much higher than for local elections; but when the two coincide most voters in the parliamentary election use their local government vote as well. That was also borne out in the recent elections to the Scottish Parliament. Thus the local government poll is augmented, which is desirable; but arguably the increase is for the wrong reason. The democratic mandate of local government ought to be a strong one in its own right.

Voting on local rather than national issues

52. It is argued that when national and local elections are held simultaneously, the voters will vote on the same set of issues, i.e. national ones, in both. As against that, there is evidence that local elections held in the mid-term of a government are used to express a protest at unpopular aspects of government policy. Perhaps more to the point, parties campaigning in a

15

national election tend to have little time or resources to spare for a distinct local campaign.

Voter confision, and administrative issues

53. In the elections of May this year, voters were faced with three ballot papers. On the whole the electorate seems to have proved able to cope with this, helped by a public education campaign. If however the local elections had been held on the same system as the Scottish Parliament election - an option which the Renewing Local Democracy is to consider - there would have been four ballot papers; and the consequence of that is unknown.

54. A combined poll is more expensive; but overall the costs of combining elections are probably smaller than those of separate elections.

55. The May elections this year put a very heavy strain on the administrative arrangements of the returning officers. In the future, if local elections are held on any other system than the traditional first-past-the-post, the administrative problems - and the risk of breakdown - will be magnified.

Implications for the political parties

56. A combined poll in effect forces candidates to choose which election they will stand in, and some will be casualties and end up with nothing. It is a question for the parties whether they have access to enough good candidates who will want to have to run this risk at every major election.

Voter fatigue

57. The choice of timing of elections also affects how many separate polls there will be over the coming years. Voters in Scotland are asked to vote in elections for local government, for the Scottish Parliament, for Westminster, and for the European Parliament. The table on the following page sets out how those elections might fall in the next 12 years (one cannot of course be certain that the various legislatures will run for the maximum possible period before a new vote is taken).

5 8 . The table shows that if the local government elections are held at the same time as the Scottish Parliamentary elections, voters will be asked to turn out 6 times over the next 12 years. If the McIntosh recommendation of mid-term elections were adopted, voters would be asked to turn out 8 times (assuming that the local government and European elections were held on different days in 2009 when both would be due). Under the McIntosh recommendation and given our Westminster assumption, they would be asked to turn out every year for the period 2001 to 2005.

16

Timing of elections Scottish

Parliament European Parliament

99 I J I J

Westminster Local Local Local Government Government Government

(present (McIntosh (phased with legislation) recommendation) Parliament)

J J J

02

03

04

05

06

07

08

09

10

11

(The dates for the Westminster elections are particularly uncertain and, purely for the purpose of illustration, the table assumes that each administration runs for its maximum 5-year term.)

? J J

J J

J

J J

I

J ? J

J

J J

J J J

59. The decision on when local government elections should be held is also to some extent dependent on the conclusions that are reached by the Renewing Local Democracy Group. If they recommend an electoral system that is different to that used for the Scottish Parliamentary elections, that has implications for the voting arrangements and timing, as noted above. The question for decision then is whether the electorate will be able to cope with casting three or four votes at once using different types of voting system. The choice of voting system also has implications for the speed with which it can be introduced. For these reasons Ministers will not decide on the timing of elections until the Group has reported. We would however like to hear views on the timing of elections.

44. Should the Scottish local government elections be held on the same day as the Scottish Parliamentary elections or should they be held mid-term?

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Delegation of powers to a single member

A directly elected council leader

60. The McIntosh report says that the Commission found “only slight interest” in the idea of delegation to a single councillor and “not much evidence that it has been worked out in any detail”. It says the same about the concept of a directly elected leader (mayor or provost) (1 5) . Nevertheless it does not entirely close the door on these ideas. Ministers too believe that they should not rule out anything that may help councils put in place structures that fit their particular circumstances and at the same time help to fit local government for the 21” Century. Councils will be working closely with the Leadership Advisory Panel to develop their ideas and identify structures appropriate to them. It may be that when new organisational frameworks are worked out in detail some councils want to adopt structures that require delegation to single councillors. The most common form of such a structure would be one where single councillors hold executive portfolios and form the membership of an Executive Group. Ministers will therefore keep closely in touch with the work of the Leadership Advisory Panel as councils develop their schemes. If, having studied the matter, there is a demand from councils for legislative change it will be considered at that time.

61. Direct election of a council leader would also require legislative change. It is possible that some councils and some voters (particularly in urban areas) would find it an attractive option. Equally, Ministers are aware that in other areas there is little enthusiasm for the idea. Ministers are committed to giving local voters a strong voice in the decision about the type of political management structure that should be adopted for their Council. Various political management structures incorporating a directly elected leader are possible. The leader could for example select an executive group with individual portfolios from the council or could work in tandem with a council manager to whom strategic policy and day to day decision making would be delegated under the political guidance of the leader.

62. The Department of Environment, Transport and the Regions has published a Local Government (Organisation and Standards) Bill, for England and Wales, that will require that a referendum be held to allow the electorate to accept or reject any scheme put forward by the council that includes a directly elected mayor. The results will be binding on the council. It also provides a means whereby local people can call for the introduction of a directly elected mayor if the council has not itself come forward with such proposals. If 5% or more of the electorate sign a petition demanding a directly elected mayor, the council would be under a duty to draw up a formal detailed proposal on that basis and to hold a referendum on this within a given period.

63. There are both potential advantages and disadvantages in having directly elected leaders. A directly elected leader can raise the profile of the council, act as its champion and provide strong and clear leadership that is highly evident to the electorate. There is also the possibility that a directly elected leader would re-invigorate local politics and help increase turnout at local elections. However, Ministers also recognise and appreciate the concern that many have about the concentration of so much power in the hands of one person and the risk that presents for the misuse of that power and patronage. There are also concerns that such a leader could distance local communities further from the decision making process. Given the strong powers that would be vested in a directly elected leader, those local views could be ignored with impunity.

Q5. Views are therefore invited on these various ideas. Should there be legislation to allow political management structures that involve a directly elected leader? If so, how should that leader be elected? Should there be some sort of provision that would allow local people to insist that the idea of a directly elected leader be put to the peopIe? What sort of safeguards on the power of the leader would be needed?

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Election of council employees to the council; and political restrictions on council officers 64. McIntosh has recommended that, subject to appropriate safeguards, employees other than the most senior and those in politically sensitive posts should be permitted to stand for election and to serve as elected members (22).

65. There are two separate ways in which local government employees may be restricted in their political activities. Firstly, under the Local Government (Scotland) Act 1973, no local government employee may stand for election to the council that employs them. If they wish to stand, they must resign their job. There is no bar under this Act preventing employees of one council standing for election to or becoming members of another.

66. Secondly, under the Local Government and Housing Act 1989 local government officers in certain “politically restricted” posts’ are barred from standing for election to any local authority or the House of Commons or European Parliament. The Local Government Officers (Political Restrictions) Amendment Regulations 1998 also bar Scottish local government employees fiom standing for election to the Scottish Parliament. Such employees are further barred from acting as election agents or sub-agents, becoming an officer of a political party or branch (if that involves participating in the general management of the party or acting for the party with those outside that party), canvassing for a political party or a candidate for election or speaking to the public at large in favour of a political party.

67. The net effect of this is that the majority of local government employees may stand for election to authorities other than their own, but that there is a class of employee whose political activity is more closely restricted and who may not become a member of any authority.

68. The McIntosh Report concerned itself primarily with the first of these types of restriction - the ban on employees standing for their own authority. The report sets out the main issues for consideration. They note:

the ban bites more strongly since the 1994 re-organisation introduced unitary authorities. It is a particularly acute problem in more rural areas where the council can be the largest employer (and has always been an issue in the islands authorities);

there may be implications.under the European Convention on Human Rights;

there may be scope for conflicts of interest;

it is important that the public perceive that there can be no conflict of interest; and

there could be particular problems if the majority of a council were also its employees (although the report dismisses this, as a matter which the electorate could settle at the ballot box).

69. There are strong arguments in both directions. Ministers have noted the submissions made on the subject by COSLA, SOLACE and SOLAR who all expressed opposition to the idea of

‘.. Section 2 of the Local Government and Housing Act 1989 sets out a number of posts that are classified as politically

restricted. The definition covers chief executives, chief officers such as Directors of Finance, deputy chief officers, the council’s monitoring officer, anyone on point 44 or above of the Administrative Professional and Technical pay scale, any member of staff who regularly gives advice to councillors and any member of staff who speaks on behalf of the authority to journalists or broadcasters.

5

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lifting the ban. Equally, Ministers are aware that the ban can cause more difficulty in some areas - notably the Highlands and Islands - than others, and this may not be equitable 70. The McIntosh report suggests that employees in non-politically restricted posts could serve as members if there were “appropriate safeguards”. The difficulty is however to devise appropriate safeguards. While some rules are easy to conceive (that for example prevented teachers from taking on the education portfolio), it is more difficult to envisage a scheme that avoided all potential conflicts of interest. For example, should an employee be allowed to join in the debate and vote on the budget when this could affect his own job? If not, does that provide fair representation on a key issue for those he represents? On the other side of the equation, is it sensible to bar all Council employees from membership, particularly in areas where the local authority is the largest employer, when such people would have valuable skills to bring to the councillor role? Given that Ministers are shortly to introduce legislation to implement the New Ethical Framework that will enforce high ethical standards amongst councillors, is the threat of conflict of interest really so great?

.

71. Ministers are also aware that there could be potential operational difficulties. In their response to McIntosh, SOLAR note “ even where it is a relatively junior member of staff who is a member of the Council, that employee’s manager will encounter very serious problems in fulfilling their r61e vis-a-vis that person.” However, it may be possible that some form of code or guidance could be developed to govern the working relationship.

72. If it were to be thought that the general ban should not be lifted, there may still be scope for some relaxation of the rules relating to non-politically restricted employees standing for election. At present, the employee must resign at the time of nomination, It could be that employees would stand for election if the rules meant that they would only have to leave their job if they were successfully elected to the council that employed them. It would be possible either to:

(i) amend the 1973 Act to allow employees to stand for election to their own council without resignation, but maintain the requirement for resignation if they are successfully elected; or

(ii) amend the terms and. conditions of appointment such that employees who resign to stand for election to their own council are given a guaranteed right of return to their post within a fixed timescale after the election if they are unsuccessful. This would also need to include provisions with regard to continuity of service with respect to pension and other rights.

73. Option i. is clear cut and would not require any consequential changes to protect pension rights and so on, but it could be seen as inviting employees to express views in public that may be at variance with the policies of the council that they as an employee are required to implement. There is however no ban at present on those in non politically restricted posts stating political views, and indeed those who are employed by one council but are a member of another clearly and publicly demonstrate their political affiliations. Option ii. is more complicated since the employee would have a gap in service, but would mean that the candidate was not an employee of the council during the time they were canvassing and publicly expressing political views about the activities of their own council. Option ii. maintains the greatest distinction between employee and employer.

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74. There is little hard evidence to show whether the requirement to resign on nomination is actually a problem for employees and therefore whether any amendment to the current requirements would be worthwhile.

46. Views are invited on - whether the ban on employees serving as members of their own Council should remain

whether, if the general ban was maintained, a relaxation on the need for an employee to resign on nomination to their own authority would be worthwhile (while maintaining the requirement to resign if elected to serve); and if a relaxation were to be considered, whether option i or option ii above is preferable.

75. The issues to be considered in relation to holders of politically restricted posts are rather different. Problems of the potential for conflict of interest are more acute and for that reason, McIntosh agrees that the ban should remain. Politically restricted posts account for only some 2% of local government staff in Scotland. There is in any case a statutory appeal mechanism whereby any officer caught by the ban may apply to the Local Government Political Restrictions Adjudicator for an exemption. Ministers do however recognise that the legislation introducing the ban was introduced some time ago and that there is a case for reviewing its operation to date. In particular, they are considering whether to increase the salary threshold at which the ban begins to bite.

4 7 . Views are invited about whether the salary threshold should be increased, and if so, to what level?

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CHAPTER 3: OTHER RECOMMENDATIONS 7 6 . Not all of the McIntosh recommendations are for action by the Scottish Executive. This chapter draws attention to them, and sets out Ministers’ own views on them, where appropriate.

Local government and the Scottish Parliament

77. The McIntosh Commission was specifically instructed to consider the relationship between local government and the Scottish Parliament, and its first two recommendations are concerned with this. It recommends that local government and the Parliament should commit themselves to a covenant setting out the basis of their working relationship; and that Parliament and local government should set up a standing joint conference.

7 8 . The Commission had to do its work before the Parliament was elected, and therefore without knowledge of the committee structure the Parliament would adopt. In the event, there is a local government committee of the Parliament; and Ministers will consult with that committee about this recommendation.

79. Alongside these two recommendations, McIntosh also recommended that a formal working agreement be drawn up between the Scottish Executive and COSLA. The Executive has inherited a good relationship with COSLA and intends to maintain it: Ministers will discuss this recommendation with COSLA.

The party whip in council business

80. McIntosh recommends that the political parties should review their advice to local parties on the application of the party whip to council business, so as to ensure that it is not applied inappropriately or indiscriminately; and that councils should incorporate in their standing orders rules to the effect that where whipping is applied in council business it should be declared at the commencement of the relevant discussions and minuted for public information and record (1 6).

81. Ministers strongly support the recommendation that parties should review their use of the whip. The McIntosh Report clearly sets out how over-application of the party whip can damage local democracy. It can make it impossible for the electorate to be sure who is taking the decisions and who should be held accountable for those decisions. It can make it difficult for councillors properly to represent the views of their wards. It is one of the reasons why public debates in committee or council can appear to the electorate to be a sham and one of the reasons why there is public disillusionment with the working practices of councils.

82. Like McIntosh, Ministers recognise that there is a perfectly legitimate and indeed necessary role for party politics and party discipline in local government. It enables effective decisions to be taken and electoral manifestos to be delivered. But Ministers do not believe that should be at the expense of transparency, of openness of decision making and of clear accountability.

83. Ministers regard this recommendation as being of key importance. They would urge the political parties to review their whipping practices with a view to ensuring that the whip is applied appropriately.

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84. Whether amendment of standing orders would be as effective as McIntosh appears to suggest is a more debatable question. It is a matter in which legislation could be brought in to enforce the requirement, if that is considered desirable and necessary.

11 0 8 . Views are invited. Would amendment of standing orders be effective? II Elected members and officers

85. McIntosh recommends that COSLA should draw up a mutual protocol of understanding, governing the relationship between elected members and officers (2 1). Ministers support this recommendation and look to COSLA to move forward on this. The need for clarity of understanding about the respective roles of officers and members will be all the greater in the new forms of political organisational structures for councils that will be developed in response to recommendations elsewhere in the McIntosh Report.

Electoral administration

86. McIntosh recommended that the rules and arrangements for conduct of local elections should be reviewed, with the general aim of simplifying procedures for the public and improving access (7).

87. Ministers support this recommendation in principle. The revitalisation of local democracy needs to be tackled on every front possible; and that includes making sure that the physical act of voting is made as easy as possible for all voters. The Scottish Parliament does not at present have powers to legislate in all these areas. Matters relating to the franchise such as the question of a rolling electoral register are a reserved matter- that is to say that the Westminster Parliament has retained responsibility for making legislation on this for England, Scotland and Wales, as it has for Parliamentary elections in general.

88. The UK Government has been actively considering all these matters in relation to parliamentary elections. In January 1998 the Home Office Working Party on Electoral Procedures was established, and the group (known as the Howarth Group) reported in July of this year. Their terms of reference required them to consider recommendations for changes to electoral practice that will contribute to democratic renewal in the United Kingdom. Amongst other things, they recommend the introduction of a rolling register, postal voting on demand and that there should be a number of pilot schemes at local elections to test the effectiveness of more flexible ways of voting (such as mobile polling, all postal ballots and electronic voting.)

89. The Scottish Executive considers that it would be appropriate if the local government committee were to study this matter in relation to local elections. The committee could look at the work of the Howarth Group and at experience in Scotland.

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APPENDIX 1: SUMMARY OF McINTOSH RECOMMENDATIONS

Relations with Parliament and Ministers 1. which we call a Covenant - setting out the basis of their working relationship. (Paragraph 34)

The Parliament and the 32 councils should commit themselves to a joint agreement -

2. Parliament and local government should set up a standing Joint Conference to be a place where parliamentarians and local government representatives may hold a dialogue on a basis of equality. (34)

3 . A formal working agreement should be established between local government and the . Scottish Ministers (45)

4. competence. (52)

Legislation should be introduced to provide councils with a statutory power of general

5. An independent inquiry into local government finance should be instituted immediately. (57)

6 . The option of transfer to local government should always be considered in any review of other bodies delivering public services; and likewise where new services are developed, prior consideration should always be given to whether local government should be their vehicle, subject to consideration of efficiency and cost effectiveness. (62)

Electing the council 7. The rules and arrangements for conduct of local elections should be reviewed, with the general aim of simplifying procedures for the public and improving access (66) and with particular reference to -

A rolling electoral register More accessible polling places

Electronic voting Wider and easier access to postal voting

8. elections due to be held in 2005, midway through the second Parliament (72, 74).

Councils should be elected for a four-year term.(70). This should take effect at the

The electoral system 9. A review should be set up immediately, to identify the most appropriate voting system for Scottish local government, with a view to legislation which should take effect in time to govern the next council elections in 2002 (89)

Proportional representation should be introduced for local government elections.

10. Scottish local government should be (89) -

The criteria to be used in determining the system or systems of PR to be adopted for

proportionality the councillor-ward link fair provision for independents allowance for geographical diversity and

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a close fit between council wards and natural communities.

11. consideration. (89)

Of the possible electoral systems, AMS, STV and AV Top-up should be given particular

12. reviewed with a view to providing greater flexibility in determining ward boundaries. (89)

The legislation governing the Local Government Boundary Commission should be

The conduct of council business 13. Every council should carry out a review of its management of business and working practices, under the guiding principles of accountability and accessibility. (94) A prime aim of these reviews should be to set on a formal, open and accountable footing the political leadership within the council, in whatever form is most appropriate to the circumstances of the individual council, so that policy proposals and matters for decision by the council should be subject to open debate, and so that the council may scrutinise the actions of the leadership and hold it to account for its performance. (1 03)

14. executive, but should also be able to consider other options. (106, 110)

Councils should give particular consideration to formalising the political leadership as an

15. We do not consider that it is necessary at present to legislate to permit delegation to a single councillor nor direct election of a council leader; but we consider that the latter option should be kept in view, in the light of developments which may take place elsewhere in Great Britain. (1 12, 1 13)

16. The political parties should review their advice to local parties on the