Seòmar agus comataidhean

Yes. It is not my area of specialist knowledge, but all of the issues are considered as part of the energy requirements of our country going forward and the energy use that will be required in the modern world.

Data is just one part of that future, but it is a critical part. We could be at the forefront of much of the technology. We have some fantastic data centres and data capability—here in Edinburgh in particular, where we have innovation and partnering with universities that are at the forefront of using the knowledge for public good. I also point out that the work is not out on its own; it is about using the knowledge and capability for improving public services for the public good.

I am happy to write to you, convener, if you would like a little more assurance on the data centre issue in particular.

I recognise that those issues are not just for local government, as the national health service, for example, faces some of the same challenges.

The report that the Accounts Commission published in the summer was helpful. It called on councils to align workforce plans and strategic priorities, so that they can ensure that their workforces are the right size and shape and that their staff have the right skills. It is about having the right people in the right places.

We know that there are some critical workforce shortages in this area, and it is no surprise that they are mainly in social work and social care. Not every part of the workforce will be on a downward trajectory. If you look at social care and the investment that is required into the future, you can see that we will need more people to come and work in health and social care, so we need to ensure that the funds will be there to prioritise those frontline services, which will mean doing things differently elsewhere.

As we have touched on already, planning and environmental health are ripe for a shared-service approach. At the moment, councils try to hold on to those specialist staff but find that, often, they go to another local authority, perhaps because it is bigger and has a better rate of pay. Could we do something regionally in that space? Could some services be nationally provided? We absolutely need to be willing to have those discussions about whether every one of 32 local authorities needs every one of those departments. There is already some sharing of staff, which I welcome, but that needs to be the default across the board. Perhaps some larger local authorities could provide those services to smaller neighbouring local authorities. We need to get our heads into that space because, otherwise, councils will continue to fish for people in the same small pond rather than thinking about how they can deliver the services differently but more sustainably. That would be beneficial, as dealing with the costs of recruitment and backfilling gaps in the workforce with agency staff is an expensive way to deliver services.

The social care space also has some good examples of local authorities being able to recruit and retain staff more ably than others. People should look at how those local authorities have been able to hold on to staff and reduce agency costs. The same thing applies in the health service, although some health boards have managed that better than others. Again, where there is good practice and something has been shown to work, I would need some convincing about why that is not being adopted elsewhere, if I can be so blunt.

This is not some complex magic answer. A lot of the answers are already there, but they need to be scaled up and that approach needs to become the default for how services are provided.

Yes. We want to try to be helpful.

Ellen, would you like to answer, as you have been closer to the detail?

On your comment about the pressures facing the public sector, we talked about inflationary pressures, pay inflation and everything costing more, and that is before we get on to demographics. There are pressures on services, not just in local government but in health because of demographic changes, and there will be more demands on all public services as a result.

That is why we need to prioritise getting funds to the front line. We have been pretty explicit about that. When we set out the public service reform strategy and the fiscal sustainability delivery plan, those were all about reduction in corporate costs through doing things differently. Digital has a huge role to play in that, as do shared services. It is also about rationalising the estate and getting as much money into front-line public services. However, those front-line public services can also be delivered in a different way.

The invest to save fund is not the only thing that is happening. We expect all public services to be getting on with this agenda, anyway. The invest to save fund is about helping to oil the wheels of some of that change. For example, if you have a twin track of an existing service but you want to transform something somewhere else, that might take a bit of investment to make it happen.

We have been explicit that the priorities are shared services, integrated working, digital innovation and community empowerment, with the opportunity for communities to take on assets. Some of the assets that local government and other public bodies have are either surplus to requirements or are coming under pressure because of funding pressures. Communities have quite often taken on such assets and made them work in a way that was not possible through statutory services. I am a big supporter of that.

The invest to save fund was the starter for 10 to find the level of interest—it was a bidding-in fund. As I mentioned, I am keen to keep an invest to save proposition going through the spending review because, if the public sector knows that it will not be a one-off or one-year fund, bodies might work on projects that will take two or three years to deliver, which might be more ambitious.

We know from the work that Ivan McKee has done that the return on investment must be set out clearly and has to be deliverable and tangible. The projects that will be funded will be those that show a return, and that money can then be reinvested. It is about getting a gearing effect going. The level of interest has been huge, and we want to see more of that.

First of all, I recognise that back-office functions, as we describe them, are of course critical to front-line delivery. However, there is sometimes the ability to share some of those functions. In the local government space, each local authority, to a greater or lesser extent, has people who are there to support the education function, the corporate function and various other functions of local authorities.

One question is whether those functions could support, and be shared across, more than one local authority. That is being done. Aberdeen and Aberdeenshire councils already share some education support functions. In the west of Scotland, there are shared services around waste management, where one local authority is contracted to another to provide those services. That has saved a lot of money. My point is that we need to see that everywhere. We see good practice but, if it was to happen everywhere, what would that look like, in terms of making sure that the money that is available can sustain the services that need to be sustained?

I go back to the demographic challenge. On social care, yes, there is a requirement to change how social care is delivered, and there is scope to do that but, given those demographic challenges, that budget will not reduce; it will have to continue to increase. If we accept that, we need to look at how services are delivered. Willing volunteers are now coming to the table who want to look at that. It is tricky, because you are talking about giving up a bit of power, trust, accountability and all of that. However, some local authorities have got on and done it, so it can be done.

The pot that we announced is just shy of £30 million, and bids have come in from across the public sector. As I said, the criteria would give priority to reform in areas such as digital, shared services, upstream prevention and so on.

I would welcome bids that take a place-based approach and involve, for example, corporate functions being shared with other public sector bodies. Issues with some governance arrangements would have to be overcome but, if back-office functions can be shared across more than one public body, I am all for that.

On estates, we must recognise that working patterns have changed—you mentioned earlier the effect of Covid—and people are unlikely to go back to the working practices of the past. That means that the estate can look different because people are working differently, and there are huge possibilities around the sharing of space, with people coming together to provide services all under one roof.

We should not think about this just in sectoral terms. If people present us with good, fully worked-through ideas and can show that they will make savings and can be delivered, we are all ears.

I recognise the point that Meghan Gallacher is making about council tax payers and fairness. I point out for context that the provision in the budget for local government did see a further real-terms increase in funding in 2025-26, after increases in revenue funding in both of the past two financial years. It is not just us who are saying that; that has been independently verified by the Accounts Commission. As a longer-term context, the total local government finance settlement has increased by almost 50 per cent between 2013-14 and 2025-26. That is the background context.

I should say that I fully recognise that costs have increased for every part of the public sector. The role of inflation means that everything costs more, and of course pay has increased because of inflationary pressures. I absolutely accept all of that.

We said to local government that, because it was a reasonable settlement, we hoped that council tax increases would be kept to a minimum. There was a real difference in council tax rises across the country, as I am sure Meghan Gallacher will be aware. We will set out our position on this at the budget, but you have heard this morning from local government, which of course will argue strongly against any freezes or caps and will set out why it is against such moves. We have funded freezes and caps in the past, but we are also keen to give local government the flexibility that it requires.

We are also addressing some issues with particular local authorities—Meghan Gallacher mentioned one in particular. Some of our smaller local authorities have a fragility, and that is why we are keen to work with them in the reform space and to look at things such as shared services, where costs can be better managed by two or three local authorities coming together. We think that that is a good example of reform. The invest to save fund, which I am sure we will come on to, is there to help oil the wheels of such changes.

We will come to our conclusions on this, but we understand the impact on council tax payers, and that is why we gave that real-terms uplift to local government over the past few years.

I am sorry to interrupt. We all need to set out our principles. I have set out two principles. The first is that we would not support a proposal that would lead to a significant increase in council tax in any particular area, and the second is that any proposed solution must be revenue neutral. I am keen to hear what other parties’ principles are. I would like all the various principles to be set out honestly and openly, because I would like to find out where there might be some landing spaces, given the principles that we have all set out. I have set out my principles.

Beyond that, I am willing to look at where there might be a landing space for us to make progress. In the past, the process has stalled because we have not been able to reach enough political agreement on some of those principles. Every party has an opportunity to respond to the consultation. COSLA will meet every political party. We have a chance to develop our own policies in the manifesto space, but let us start by setting out our principles. I have set out two, and I am keen for other parties to set out their principles.

A significant increase is an increase that is unaffordable, astronomical, high or unreasonable. It is not possible to put figures on it, but we all recognise that we do not want to hike up people’s council tax simply because they happen to live in an area in which—through no fault of their own—there have been big increases in property values. For example, I would not support a proposal that would penalise people in Edinburgh and the Lothians simply because there happen to have been big increases in property values in the region.

That is an example of the type of details that we would want to work through. We would want to consider what “reasonable” means and what the mitigations would be. One option would be to mitigate over a number of years any increase in costs that people might face. If we were able to reach an agreement on a particular system, we could mitigate any such increases by means of a transition over a number of years that meant that those increases were modest and not significant in any reasonable person’s estimation.

However, we are miles away from being at that point. At the moment, we are having a debate with a view to finding a consensus, instead of trying to find areas of division by challenging one another on what we intend to do and outing one another as wanting to do this or that.

Incidentally, the example that one of your colleagues highlighted this morning involved an increase at the extreme end of a 14-band model that I have not agreed to—it is an option, but I have not agreed to it—which would affect properties worth more than £1.8 million. No one should start from the position, “This is what you’re trying to do.” I am not trying to do that; it is not my proposition. It is genuinely the case that, the more we try to do that, the less chance we will have of finding common cause and doing something about the 1991 property valuations. Let us not start with areas of division but try to find areas in which some principles can be set out on which we can agree. That is my plea and suggestion.