“Fundamental change” is required to ensure Scotland’s councils deliver services in the face of ever decreasing funding, according to the local authority public spending watchdog.

The Local Government Overview 2019 report by the Accounts Commission found that despite reducing funding and increasing demands, across local government, councils are either improving or maintaining most services, although it is clear some services are showing signs of pressures. 

It states that main challenges and uncertainties for councils haven't changed, but pressures are continuing to build. For example, councils are having to plan for withdrawal from the EU, continue to tackle a growing gap between demand and resources, and contend with less flexibility over where money is spent.

With the Scottish Government funding to councils likely to reduce in future in order to continue to maintain and improve outcomes for their communities, councils need to be open to transformational change and implement new ways of working and delivering outcomes. 

There is also a need for councils to improve the quality of data, supporting them to make decisions and improvements, as well as better demonstrate how spending decisions and priorities have impacted on service performance and outcomes for communities.

Nearly 70% of councils’ spending is on social care and education, and more money is being committed to Scottish Government priorities. This leaves councils less flexibility in where to spend and where to save.

Councils need to ensure they have the staff, skills and leaders to deliver change. This requires effective workforce planning, but the quality of planning is inconsistent across councils. An increasing proportion of the workforce is nearing retirement. If there is insufficient succession planning, skills and knowledge will be lost as these people retire. The Society of Chief Officers of Environmental Health in Scotland report that the number of professionally and technically qualified environmental health staff has decreased by 12 per cent from 2016 to 2018. 

Savings programmes and staff reductions mean some uncertainty for council staff. Unless managed well, this could have an impact on the morale of the workforce and individual staff’s wellbeing. Surveys carried out by Unison found that in 2018,75 per cent of Environmental Health employees interviewed reported that morale in their organisation was low.

Graham Sharp, chair of the Accounts Commission, said: “It’s important to recognise that councils are working hard to maintain and, in some cases, improve services. Now fundamental change is needed to ensure services meet the shifting demands of local communities, with councils working and collaborating with communities to deliver the change needed. Councils must now focus on changing how front-line services are designed and delivered.”

Local government body COSLA has welcomed the report which it said chimes heavily with similar recent reports showing that despite substantial cuts in funding councils continue to show strong performance in key service areas and deliver essential services for their communities.

Gail Macgregor, resources spokeswoman for local authority umbrella body Cosla, said the report "clearly shows that councils have performed well and continued to deliver essential services for their communities over the last year despite the severe financial challenges that they face".

She added: "Today's report also makes clear that difficult times and choices lie ahead – coupled with continuing pressure on our finances."