GLASGOW CALEDONIAN UNIVERSITY
Glasgow School for Business & Society
Public Spending Cuts: Mitigating Risks for Scotland’s Disadvantaged Communities
July 2012
Interim Report 4
Funded by:
The Joseph Rowntree Foundation
Public Spending Cuts: Mitigating Risks for Scotland’s Disadvantaged Communities
Report by:
Prof. Darinka Asenova, Prof. Stephen Bailey & Claire McCann
Department of Law, Economics, Accountancy & Risk
Executive Summary
This report is the fourth, and final, interim report as part of the “Spending Cuts: Mitigating the Risks to Scotland’s Disadvantaged Communities” project. It presents the initial findings of five anonymous Scottish local authority case studies comprising in-depth interviews with thirty-two representatives from finance, social work, education, youth services, equality and policy departments. Interviews followed analysis of key policy documents and committee meeting minutes available on the local authorities’ websites. Case study interviews and other fieldwork were conducted between August 2011 and July 2012. Investigating the decision-making frameworks, criteria and priorities of each local authority in protecting vulnerable and disadvantaged groups from any adverse impacts from the spending cuts, this report provides an overview of the key findings from the case studies.
Key findings from the five case studies
- The Equality Impact Assessment (EIA) procedure is being used by all five councils as a proxy risk mitigation tool for managing social risk in protecting disadvantaged and vulnerable communities when deciding cuts in, and reconfiguration of, services in the first year of budget cuts.
- The case studies demonstrate thatEIAs are unsuitable as a risk mitigation tool. EIAs fail on three counts. First, they do not entail or require specific risk mitigation models and so are poor as a guide for making budget cuts. Second, some at-risk socio-economic groups’ fall outside their scope. Third, the process is driven by compliance with existing statutory requirements arising from equalities legislation rather than being ‘needs-based’. Therefore, the apparent security for disadvantaged and vulnerable groups provided by the EIA process is illusory.
- There was no evidence of the development of ‘bespoke’ risk mitigation decision-making models or criteria. Utilisation of EIA processes to guide the first year’s budget cuts is understandable because of lack of a purpose-built risk mitigation tool but they are not suitable to address austerity measures in subsequent years of austerity. There is a need for a risk mitigation reform agenda that takes a much wider view than EIAs.
- The case studies suggest that, combined with service reconfiguration, the focus on immediate cost savings will increase inequality amongst the most vulnerable communities. The five authorities are engaging in a cost-saving programme through internal reorganization to protect frontline services in the first instance. There is evidence of service transfer, increased service charges, service reduction and service withdrawal which in the immediate and longer-term will impact adversely on disadvantaged and vulnerable communities.
- The lack of focus on long-term strategies in the case study authorities can be expected to result in the exacerbation of current inequalities by failing to mitigate risks faced by their disadvantaged communities in the long term. The challenge for local authorities in dealing with austerity measures is meeting the short-term ‘reactive’ objectives (such as crisis intervention and intensive support) alongside investment in longer-term ‘proactive’ future proofing of services.
- The results of the case studies make clear that local authorities need to develop more sophisticated data collection and evaluation methods to assess the impacts of the cuts so as to be able to better protect vulnerable and disadvantaged groups. This is necessary because the full impact of budget cuts on vulnerable and disadvantaged groups in the case study authorities will not become clear for some years as the long-term impacts of the cuts take hold.
- The case study authorities have complied with their statutory duties when making cuts and so discretionary services are being subject to disproportionately large reductions in spending. This approach results in loss of preventative services and so costs may be higher as a result in the long term.
- The compliance-driven approach adopted by the case study authorities misses the interconnectivity of service needs and social risks, creating institutional barriers to collective actions. Risk implications for vulnerable and disadvantaged groups are not sufficiently recognized in their entirety by policy makers, inhibiting risk mitigation.
- It is of utmost importance that the case study local authorities develop other existing frameworks to mitigate risks to the full range of disadvantaged and vulnerable socio-economic groups, not just those with EIA-protected characteristics. Existing frameworks include stakeholder and community engagement, knowledge exchange, networking and sharing of experiences with other local authorities.
- It is not clear from the case studies the extent to which consultations with stakeholders and communities are integrated into final decision making in the consideration of social risk. This suggests limited community empowerment in the case study authorities.
- There is a lack of dialogue in relation to social risk and risk mitigation within the case study authorities both in general and as part of the decision-making process. This results in a lack of innovation on the part of the case study authorities to determine other methods to mitigate risk.
- The case study local authorities need to be more innovative and developnew criteria to meet the needs of disadvantaged and vulnerable service users through a bespoke risk mitigation tool tailored to the local context in moving from a ‘service-based’ to ‘needs-based’ approach in decision-making and risk mitigation.
- Negotiated governance, management and mitigation of social risk must become a core part of council operations if they are to embed a risk-based approach within service reconfiguration. Although elements of best practice exist, at the moment it is peripheral particularly in terms of the management and mitigation of social risk. The mitigation of social risks should be linked to the organizational objectives.
- The results of the five Scottish case studies suggest there is still a long way to go if risk mitigation is to be embedded within a ‘social impact assessment’ approach totheir decision making processes and that much more progress needs to be made much faster in this respect.