Managing in the Public Sector

Week 3
 Political Levels
• Global
• Regional
• National
• Sub-national
• Local
• Community
 Political: Westminster
• 650 MPs at next General Election
• 533 in England
• 59 in Scotland
• 40 in Wales
• 18 in Northern Ireland
• House of Lords 826 unelected Members

https://www.youtube.com/watch?v=RAMbIz3Y2JA
 Political: Westminster
Draft Bills
First Reading
Second Reading
Committee Stage
Report Stage
Third Reading
Lords Stages and Amendments
Royal Assent
 Political Influences
Widdicombe McIntosh Kerley
Pluralism Proportionality Single Transferable Vote
(STV)

Participation Link between Councillor Councillor Ward Link

& Wards

Responsiveness Chance for Elected Larger Wards

Independents

Geographical Diversity Not Unanimous

Fit between wards and

communities
 Political: European Parliament

• 751 MEPs
• 73 from UK
• 60 in England
• 6 in Scotland
• 4 in Wales
• 3 in Northern Ireland

https://www.youtube.com/watch?v=NS8kkqdHsJI
 Political: European
Structure Role
Council of Members • Negotiates & adopts EU Laws
• Coordinates member states policies
• Develops common foreign & security Policy
• Concludes international agreements

European Commission • Proposing legislation

• Implementing decision
• Upholding EU treaties
• Managing day to day business of the EU

European Parliament • In conjunction with the above roles legislative function

of the EU

European Courts of • Deals with disputes between parties

Justice • Ensure EU law is interpreted and applied in the same
way in every member state.
 Political Holyrood
Matters Criteria
Devolved Controlled by Scottish Government e.g. health, education &
training , local government, law, social services, housing,
tourism & economic development and now TAX
Reserved Controlled by UK Government (for Scotland any matter not
explicitly listed in the Scotland Act 1998 is implicitly devolved
to Scottish Parliament) Reserved - Defence

Number Set Up
73 Constituency MSPs elected by a First Past the Post system (FPTP)
56 Regional MSPs elected by a propositional representation system known
as Additional Member List System (AMLS)
 Political: Local Government
Number Make Up
29 Mainland Councils
3 Island Councils
1222 Elected Councillor's

2007 Election introduced proportional representation in Scottish

local government elections (Single Transferable Vote System
(STV).
 Elections
• Returning Officer – oversee elections in one or
more constituencies
• 4/5 Year Period between Elections
• Election Agent & Expenditure
• Turnout
The Financial System: (3 year settlement)
1. Westminster: C.S.R.: Decisions about English spending
programmes (Barnett Formula)

2. Scottish Executive: Decisions about spending programmes

L.A. Share

3. Cosla Distribution Committee (minus 4 LA’s)

4. Each Councils Share of Council Total (+ council tax)

https://www.youtube.com/watch?v=oNw-1516a08
 Budget Forecast for 2018-2019

Source bbc.co.uk
 Local Government Budget 2017/18 (BP1)
Total: £10,252.9b (16-17: £10,303.3b)

General, Specific Grant & Non Domestic Rates:

£9,163.6b (16-17: £9,587.9b)

Support & Specific Grant: £1,089.3b

9.2% reduction in real terms funding to Scottish Councils

between 2010/11 and 2017/18

NHS Budget 2017-18 £13.2b (est -£2,500

per person) 2011/12 - £11.7b (BP Slide 2)
 Local Government Funding (BP1)
• The overall financial health of local government was generally good in
2015/16
• Significant challenges for local government finance lie ahead. Councils’
budgets are under increasing pressure from a long-term decline in
funding, rising demand for services and increasing costs, such as social
care & pensions.
• Councils need to change the way they work to deal with the financial
challenges they face. All councils face future funding gaps that require
further savings or a greater use of their reserves. .
• Long-term financial strategies must be in place to ensure council spending
is aligned with priorities, and supported by medium-term financial plans
and budget forecasts. Even where the Scottish Government only provides
councils with one-year financial settlements, this does not diminish the
importance of medium and longer-term financial planning.
http://www.audit-scotland.gov.uk/report/local-government-in-scotland-
financial-overview-201516
 NHS Funding (BP2)
• Since 2008/09, the health budget has increased in cash terms
and had small real-terms increases and decreases each year.
– Real-terms increase in the total health budget was five per cent
– the budget per head of population only increased by 1.6%
– the population aged 75 and over increased by 11.8%
– the number of patients waiting for an inpatient or day case
appointment increased by 5.6 per cent
– the number waiting for an outpatient appointment increased by 89
per cent
• 2015-16 Savings
– Target: £293.1m
– Achieved: £291.3m (- £1.8m 0.6%)
http://www.auditscotland.gov.uk/uploads/docs/report/2016/nr_161027_nhs_overv
iew.pdf
 Sources of Funding - Revenue
• 85% of revenue funding from central
government and the rest largely from council
tax
• Core Funding
– Aggregate External Finance
• General Revenue Grant
• Non-Domestic Rates Income
• Specific Grant
– Housing Revenue
 Sources of Funding - Capital
• LA’s can borrow for capital spent without government
approval
• Any borrowing applied for must be affordable and the
Prudential Framework is used to do that
– Capital Grants
• Specific
• General
– Other – Lottery, sportscotland
– Capital Receipts
• Sale or disposal of a fixed assets
• Fund Capital expenditure or payment of loans
 European Funding (BP 3)
• European Structural Fund
– SMART – Sustainable – Inclusive
– Focus on EU Priorities
• E.g. Employment, Innovation, education, poverty
reduction & climate/renewable energy
• European Regional Development Fund (ERDF)
– Thematic Concentration
• Innovation & Research, Digital, Support SME’s, Low
carbon economy
• European Social Fund (60th anniversary 2017)
– Investing in People
• Finding jobs, Disadvantaged, Better Education,
Improvement of Public Services
 European Funding (BP3)
• Scotland was due to receive £787m (€941m) in direct
European funding between 2014 and 2020, or more than
£110m a year.
• The Scottish Government said projects, running to 2018-19,
were “legally committed” and would be unaffected if Scotland
left the EU.
• However, organisations funded in the past were less sure.
Enable Scotland campaigns director Jan Savage said: “We
would be concerned that, if this funding were to disappear,
people would lose out on the opportunity to live as part of an
equal society.
http://www.scotsman.com/news/scotland-set-to-lose-200m-a-year-in-
funding-after-uk-leaves-eu-1-4167989
 Best Value Toolkit: Financial Management
Audit Scotland (BP4)
• Is there evidence that through regular testing of its financial systems, the
organisation reports outputs that are timely, accurate, reliable, clear, in a
convenient format and readily understood by their recipients?

• There is appropriate and timely reporting on key variances, and there is

evidence that these are acted upon.

• The organisation provides financial information and reports that is

accurate, timely, and meets the needs of users.

• There is a clear link between financial and performance reporting, and

does this demonstrate the effectiveness and impact of the organisation’s
use of its financial resources?
 Best Value Toolkit: Financial Management
Audit Scotland (BP5)
• Does the leadership of the organisation set the tone whereby financial
management and health is given due emphasis and financial skills are
value and developed?
• Is there evidence that financial management skills are widely distributed
throughout the organisation?
• Is there evidence of regular and high quality challenge of financial
matters?
• Is there a robust financial planning process, linking strategic objectives to a
well thought through financial strategy?
• Is there a medium to long-term financial strategy?
• Does the organisation have a clear understanding of the costs it incurs,
including its cost drivers and how costs change in response to changing
levels of activity?