1. The Future for Public Finances Angela Scott Head of CIPFA in Scotland

2. cipfa.org.uk content  Brief overview of the IBR report  State of Finances as per Dr Andrew Goudie’s forecast  Examples of response  Required leadership  Implications for voluntary sector

3. cipfa.org.uk Recommendations of Independent Budget Review Panel  Efficiency  Further efficiencies: progressive development of shared services, more outsourcing of services, improvement of procurement practices, better mgmt of absence  Reduce number of public bodies  Remuneration and workforce  Pay and recruitment freeze not enough to fill gap  Public sector employment needs to reduce by 5.7% to 10% by 2014-15

4. cipfa.org.uk cont,d  Universality  Review whether all free/subsidised universal services should be retained in current form  Public bodies to examine potential for additional income by reviewing charges  Review eligibility criteria for free personal and nursing care  Capital  Enhanced role for SFT in prioritisation of investment and maintenance on a national basis, capital procurement, management and disposal of public assets, financing options  Change status of Scottish water  Feasibility of adding road charging

5. cipfa.org.uk Cont’d  Protection  An approach which would not have protection as an over- riding presumption eg nhs  If protect NHS, then take a wider definition of health spending  Discontinue council tax freeze

6. cipfa.org.uk Outlook for Scottish Government Expenditure Dr Andrew Goudie The report concludes:  Reductions averaging approximately three per cent a year in real terms between 2011-12 and 2014-15 are likely within the UK plans  By 2014-15, the part of the Scottish Budget which the Scottish Government controls (DEL) could be between £3.5 and £4 billion lower in real terms than in 2009-10  Over this period, analysis of emergency budget would suggest that Scottish expenditure (DEL) could reduced on average by 3.3% a year in real terms over 4 years – cumulative real terms fall of 12.5%.  It will take a period of sustained adjustment lasting up to 12 to 15 years before 2009-10 levels of expenditure are reached once again

7. cipfa.org.uk Responding to the forthcoming reductions  Central government response  ????????????  17/18 th November presentation of SG Budget to Parliament  Local government response  Planning for the worst  NHS  Expecting to be “protected”

8. cipfa.org.uk Examples of responses Were already on the Table:  Procurement  Asset Management  Redesign  Shared services (backroom and frontline eg Arbuthnott)  Outsourcing  Now On the table now  Staffing  Pay and terms and conditions  Headcount reductions  Income  Council tax unfreezing  Fees and charges  Demand Management  Reducing existing service provision  Removing service provision

9. cipfa.org.uk Responding the forthcoming reductions: The Leadership Challenge tp://www.cipfa.org.uk/corporate/download/Leading_ha rd_times_web.pdf  S/T actions v medium and L/T strategies and plans  Navigating where there are high levels of uncertainty and anxiety

10. cipfa.org.uk Creating the conditions for success: 7 principles  Being pro-active and starting early  Getting people engaged  Responding to local needs and priorities  Recognising the nature of the problem  Being open to a range of skills and techniques  Thinking creatively and acting innovatively  Having a shared understanding of what “efficiency” means

11. cipfa.org.uk Making the right moves: 10 actions leaders need to take  Engage and communicate  Know where your costs are now and how they compare  Understand where value lies  Understand funding scenarios  Identify options for change  Build a vision for how you will look  Create a balanced portfolio of change projects  Implement effective financial and risk management  Build the capability to change  Ensure that governance is fit for purpose

12. cipfa.org.uk Implications of spending reductions on the third sector