Culture, Sport and Leisure Services in Scotland February 2017

Context ongoing austerity better outcomes with reducing resources increasing demand changing delivery landscape competition

Research process focus on: review of POBE data (Scottish Government) how Councils and ALEOs are responding to the challenges new delivery models review of POBE data (Scottish Government) survey of Councils and ALEOs (32 responses – 19 ALEOs and 13 Councils) case studies

Today budget changes in culture and sport new delivery models the future

Budgets Tougher than ever before?

POBE (2016) Changes in Local Government Expenditure by Service Area 2014/15 – 2016/17 (Scottish Government) Education and social work up - everything else down Culture and Related Services (incl. sport and leisure) down 7.5% over the period Central Services and Planning and Development particularly badly hit (housing too) Some caveats do apply to the data

POBE (2016) Net Revenue Expenditure on Culture and Related Services 2014/15 – 2016/17 (Scottish Government)

POBE data (2016) 7.5% reduction between 2014/15 and 2016/17 Culture – 4% reduction (museums and galleries and libraries) Sport – 9% reduction (all areas of service) wide variation: 20 Councils increased expenditure on culture and related services between 2013/14 and 2015/16 BUT….28 Councils forecasting a decrease in the last year (from 2015/16 – 2016/17) actual outturn data show that culture and related services took largest reduction (along with planning and development) – forecasts for other areas are more negative…

ALEOs Maturing but under pressure

ALEO Survey 19 ALEOs responded budget breakdown different to POBE (and includes capital spending) best viewed in terms of general patterns than absolute numbers

ALEO Governance and Strategy mix of governance models and Board structures all report involvement in strategy development, mainly in partnership with Councils NDR still primary driver for ALEO development, but growing awareness of other benefits? wide range of positive impacts reported few negatives – some fragmentation and complexity but at the margins primary drivers of growth income generation, new facilities and new services

ALEO Survey - Culture Budget changes since 2014/15 Cuts in most areas (some ALEOs increased capital spend and direct provision) Source: EKOS Survey

ALEO Survey – Sport and Leisure Budget changes since 2014/15 Cuts in direct provision and community sports activities Source: EKOS Survey

ALEO Survey - Expected future budget changes Expectation is to make savings equivalent or greater than other services Savings most likely in direct provision Source: EKOS Survey

ALEO Income – changes in last year Increased income from trading activities Management fee from Council decreasing Source: EKOS Survey

ALEO Survey - How ALEOs expect to achieve savings income generation and pricing changes staff costs back office reductions in scale in some services property rationalisation Culture – pressure on libraries (again) Sport and Leisure – pressure on indoor and outdoor facilities (scale) many expect negative impacts on income generation, frequency, quality and range of services but majority rate their ability to meet future challenges as good or very good

Councils Budgets, budgets, budgets

Council Survey 13 authorities responded (but some deferred to ALEOs) Some responses incomplete (particularly financial) budget breakdown different to POBE (and includes capital spending) best viewed in terms of general patterns than absolute numbers degree of caution required less in-house delivery than in previous surveys

Council Survey - Culture Budget changes since 2014/15 Slightly less negative picture than ALEOs but small numbers Also note cuts to arms length bodies Source: EKOS Survey

Council Survey – Sport and Leisure Budget changes since 2014/15 Cuts in direct provision and ALEOs Source: EKOS Survey

Council Survey - Expected future budget changes Expectation again is to make savings equivalent or greater than other services Savings most likely in direct provision and ALEO investment Source: EKOS Survey

How Councils expect to achieve savings reducing staff costs reducing scale of some services property rationalisation back office pricing interest in alternative delivery models (CAT and trusts) libraries again looking vulnerable Councils generally less negative (than ALEOs) about impacts also evidence-based and confident that the evidence exists

Future Issues Changing landscape?

Challenges financial pressures competing priorities limited statutory protection still some political scepticism regarding ALEOs (back-door privatisation/ loss of accountability etc) limited scope to invest in ALEOs (existing and new) – risks constraining service delivery and income optimum scale demonstrating outcomes

Opportunities health and well being economic development esp tourism/ regeneration/ creative industries ALEOs as Council partners wider partnerships – CPPs and HSCPs income generation but needs investment evidence-based planning sharing good practice across the sector

Key Messages

Summary ALEO models increasingly prevalent – move towards scale and multi- function financial pressures maybe worse then ever before – tipping point? ALEO models show benefits in income generation and efficiency but some persistent political concerns initial NDR savings no longer reinvested in Trust/ service annual budgets also a constraint on strategic planning outcome focus continues – preventative spend and well being

Summary (cont) Councils externalising services cannot expect major efficiencies with insufficient base budgets ‘salami slicing’ of budgets well past point of diminishing returns – need more radical solutions capital investment remains critical particularly as competition ramps up cutting culture, sport and leisure saves little but costs so much ALEOs – closer to Councils not further away (‘independent’) – public service ethos remains critical

And finally… slashing culture and sport budgets will NOT deliver necessary savings …and allowing these services to decline will have huge costs to communities now and in future make the case for your role in achieving the big priorities: health and well being economic growth inequalities think strategically about externalisation and partnership – even across Council borders