Issue 22


By Caroline Gardner, Auditor General for Scotland

Twenty years on from the establishment of the Scottish Parliament, much is made of Scotland’s distinctive approach to public services. There’s no doubt that there are some real successes, like the Scottish Government’s approach to social security, where the rhetoric of dignity, respect and fairness has so far been matched by the reality. But Scotland is facing the same headwinds that are affecting public services all over the world. And we are more exposed than ever before, as the Scottish Government is now responsible for taxes that fund around 40% of devolved spending.

The environment is also more challenging. Scotland’s population is ageing faster than in many developed countries, bringing a double whammy of higher demand for public services and fewer people of working age to provide them. The challenge is exacerbated by the legacy of a decade of austerity resulting from UK government policy and a remarkably slow recovery from the financial crash of 2008, which has led to belt-tightening across public services. That’s likely to continue for the foreseeable future; the Scottish Government’s budget is forecast to fall in real terms, and rising demand means it will need to find ways to make less money go further.

At the same time, public services have to cope with more uncertainty than ever before. The Brexit saga continues to cause anxiety about the future and, whatever the eventual outcome, it is likely to hamper Scotland’s economy and reduce tax revenues. The thousands of EU citizens who have chosen to live in Scotland will have to decide whether to stay here, potentially depriving us of a valued group of people who contribute to public services through their taxes and, in many cases, directly as workers. And there’s no doubt that the time and money that have been poured into trying to influence and manage the uncertainty have been a huge distraction for Scottish ministers, civil servants and public sector workers alike.

At the same time, new financial powers have made the Scottish budget more complex and raised the stakes much higher. Brexit impact aside, the Government will need for the first time to manage the volatility inherent in tax revenues and, in the event of a downturn, it will also face a bigger social security benefits bill.

The prospect of greater financial strain in that climate is very real, but it hasn’t really made it onto the radar of public attention yet. That’s likely to change if the economy performs as expected, with respected commentators like the Scottish Fiscal Commission and the Fraser of Allander Institute forecasting lean years ahead.

So what needs to be done? There’s widespread agreement that we can’t keep doing the same things in the same way, and the Government’s ambitions in the National Performance Framework go much further than simply maintaining the status quo.

Health and social care is the biggest nut to crack – apart from the impact on the lives of the growing number of older people in Scotland, the size of the healthcare pot already dwarfs everything else in the Scottish Government’s budget. The Government has committed to protecting the amount spent – the 2019/20 budget shows health expenditure growing by 3.4% in real terms, taking it to almost 50% of total revenue spend. That commitment is understandable, given the growing elderly population and the costs of healthcare inflation, but it means real terms cuts in other parts of the budget and it clearly can’t continue indefinitely and, because it’s been protected, its share of the total is growing at an unsustainable rate.

And even with record levels of spending, the NHS is not in a financially sustainable position. NHS boards are struggling to break even, relying increasingly on Scottish Government loans and one-off savings, and performance against the national standards is slipping. People are working hard to maintain the quality of care for patients, but there are signs of pressure in rising vacancy rates, turnover and sickness absence, along with concerns about stress and bullying.

There are more positive reasons for change, too - including the opportunity to provide services that are better suited to the needs of older people living with a number of long-term conditions. The Government’s response lies in the integration of health and social care, which is intended to encourage services to work together around the needs of people, avoiding unnecessary hospital admissions and getting people home as soon as possible when they do need to be admitted. There’s widespread agreement that the policy is right, but it’s not progressing smoothly or quickly enough.

We’re seeing the early signs of collaborative ways of working, together with improvements in areas like unplanned hospital stays. But the new integration authorities are operating in an extremely challenging environment and there is much more to be done. Most authorities are not yet managing key services provided by acute hospitals, limiting their ability to bring about change. The most significant barriers we identified are the financial pressures across health and care services, and a lack of leaders working together to improve the lives of people who need support.

Partners can get better at sharing learning from successful integration approaches across Scotland. Lasting change won’t happen without meaningful engagement with staff, communities and politicians. At both a national and local level, all partners need to be more honest and open about the changes needed to sustain Scotland’s health and care services.

Health and social care integration is critical if we’re going to manage the financial challenges we face. But it’s not the only area under pressure; in spite of people’s best efforts, the cracks are showing in areas like mental health services for children and young people and the justice system.

Given the nature and scale of the challenges, the solutions aren’t simple. A culture of greater openness would certainly help; in my last report on the NHS I called for an honest conversation about the need for change, to build greater public understanding of the challenges and involve people in shaping the solutions. That’s vital both to foster ownership rather than opposition, and to make sure that solutions are suited to the particular strengths and needs of different communities.

And we need to be braver. Eight years ago, Campbell Christie’s report set out a vision of ‘person-centred’ public services and called for ‘nothing less’ than transformation. The same spirit underpins the Government’s outcomes approach, which implies a radical approach to improving life for everyone who lives in Scotland. But ten years on progress has been patchy – and I don’t believe that’s for want of commitment or effort. The problem is that our systems and structures weren’t designed for what we’re now expecting them to do.

For example, we hear complaints that police officers are often the first to respond to vulnerable people, especially those with mental health problems, but in many ways the police are ideally placed to provide the first response – they work across Scotland 24 hours a day, and they often know their communities better than anyone else.

The problem isn’t that police officers are the first to respond, but that they often can’t arrange the help and support people need. That puts the police in a difficult position, it perpetuates an approach to health and care that isn’t flexible or responsive enough and, most of all, it lets down some of the most vulnerable people in society. If police officers, health and care workers and housing officers were given the freedom to do what’s needed to improve outcomes for the people they serve, public services would work quite differently, and we’d be much closer to achieving Campbell Christie’s vision.

We know what’s possible; now it’s time to put the accelerator down. The pressures on the system are increasing all the time and, more importantly, every day’s delay loses us the opportunity to make things better for the people whose lives could be transformed by change. Outstanding leadership and communication skills will be vital, as will a genuine openness to learning from the people across Scotland who have already shown us the way.

The stakes are high but so are the benefits if we get it right. Scotland is well placed: the National Performance Framework provides a good foundation; we’ve got committed people working in public, private and third sector organisations across the country; and there’s widespread recognition of the importance of good public services in supporting a strong society. We’ve got a great opportunity – let’s grasp it.

By Caroline Gardner, Auditor General for Scotland

Issue 22

Issue 22


A Commission for Scotland's Rail

The issue of whether our railways should be nationalized never seems to be far from discussion. However, the actual situation regarding trains, tracks and ownership in Scotland is a little more complicated than simply a public/ private sector debate.


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