Time to call the council cash culture to account

The problem was that Gordon’s sensible pledge to cut costs instantly exposed the lack of any similar commitment on the part of the Scottish Executive to be prudent with its cash.

Gordon Brown has an incentive: he has to raise taxes from the unwilling. Not so the Executive: Jack McConnell and Co get a fat cheque from the Treasury which they usually can’t spend. When asked if they would follow the Chancellor’s lead, Executive spin doctors immediately said: (1) we do intend to cut waste, and (2) we have no plans to fire any civil servants or cut programmes. Which any fool can see is baloney, and not very good baloney at that.

By this autumn, and the start of the new Scottish parliamentary session, the story had changed a bit. Doubtless worried that the absurd 431 million bill for the new Holyrood would read like rampant financial incompetence, the First Minister suddenly announced a war on waste that would save even more cash (relatively) than Gordon Brown was aiming for. However, as there were no details of where the purported savings might be coming from, this sounded very hollow. So cheeky Wendy Alexander slapped down some 21 parliamentary questions to demand more details, knowing they don’t exist. No prizes for grasping that Wendy has never been on Jack’s Christmas-card list.

Then came last week’s Scottish budget from Andy Kerr (before he was handed the poisoned chalice of the health portfolio). By this time, Andy had come up with some vague numbers to support the First Minister’s political bravado. However, as the Executive has pointedly refused to carry out the kind of serious research into efficiency savings as carried out for Gordon Brown by Sir Peter Gershon, there is every cause to think that Mr Kerr has been scribbling on the backs of envelopes.

Indeed, at a conference on Monday to launch the new Centre for Public Policy for the Regions, Ms Alexander suggested that, on Mr Kerr’s figures, the Executive was only proposing to seek efficiency savings of around a third of Whitehall’s target - not a patch on what the First Minister originally claimed. And in a rare (if veiled) comment on Scottish matters, the Permanent Secretary of the Treasury, Gus O’Donnell, who was at the same conference, actually agreed with Wendy. O’Donnell said her numbers "were correct ... I say no more". That’s Treasury-speak for: "Jack is fibbing, but I can’t say so in public."

Here are the stakes in this debate: if the Executive could be bothered to make efficiency gains in line with the Chancellor’s target - in other words, deliver current outputs for 2.5 per cent less outlay - Scotland would have 1.2 billion extra cash to spend over the next three years. The financial laziness of the First Minister and the finance minister will cost Scotland the equivalent of three more wasted Holyroods. So why is Jack being so lackadaisical?

The heart of this issue for the Executive and the Labour group at Holyrood is that it is suffused with the culture of local government: former council leaders include Jack McConnell (Stirling), Tom McCabe (Hamilton District, then South Lanarkshire), Frank "Pie" McAveety (Glasgow), Kate McLean (Dundee), and Peter Peacock (Highlands). Councils by their nature are tribal. Council conveners defend their departmental turf to the death. Funding is more about local patronage than efficiency: I sat through many closet Labour group discussions in Edinburgh as councillors strove to switch spending from Tory to Labour wards in order to "punish" Tory voters.

Transplanted to Holyrood, and given a staggering 86 billion of your money to spend over the next three years, this is not a culture that is capable of seeking value for money, or even effectively policing departmental efficiency. Instead, it measures effectiveness by the bastard rule of how much loot can be shovelled out the departmental door before the end of the financial year. Quantity, not quality, is the watchword.

SO IT is no surprise whatsoever that the Executive has eschewed the path followed by Labour in Whitehall, where a vast panoply of managerial checks and balances has been introduced to police departmental spending. Some of this comes from Gordon Brown at the Treasury, which has forced spending departments to deliver detailed targets in advance of any funding - I look forward to Tom McCabe being as ruthless with his colleagues: "Ten per cent more cash, Mr Kerr, if you prove you can deliver 15 per cent better health."

The other force for financial efficiency in Whitehall comes from Downing Street. Tony Blair has set up a battery of new agencies to make spending departments more accountable. For instance, there is the Prime Minister’s Office of Public Service Reform, dedicated to making radical changes in the civil service and public sector, so that services are driven by users, not managers. Imagine if Malcolm Chisholm had had such an agency breathing down his neck while he was still health minister.

Then there is the Prime Minister’s Delivery Unit, a watchdog body that makes sure individual spending departments are actually doing as they are told. Its agenda is "ruthless prioritisation" and "stronger problem solving" - words rarely in the vocabulary of any Executive minister I’ve ever met. There is also a Corporate Development Group (better management practices), an Efficiency Review Team (making savings) and a Strategy Unit (where we are going next).

Nothing like this whiplash exists in Scotland. In fact, devolution brought no significant change to the cosy round of departmental government. The First Minister would rather govern badly by kitchen cabinet than create a streamlined machine to control and modernise his spending departments. Ditto the senior civil servants. The permanent civil service, under John Elvidge, runs the show through a collegiate "Management Group".

The only concession to a reform agenda has been the synthetic appointment of a "director of change", Sally Carruthers, who used to be personnel director at John Lewis. But Carruthers works for Elvidge and has no autonomy.

Until some future First Minister (or ambitious finance minister) creates his or her own Praetorian Guard to destroy the local-authority culture at the heart of the Executive, and force through efficiency reforms, there will be more Holyrood fiascos. And none of Jack’s mythical financial savings will ever appear.