Arms Length External Organisation Saved Highland Council £9million
17th May 2018
A report published today by the local authority spending watchdog looks at how councils are using the estimated 130 ALEOs (arms-length external organisations) in Scotland, which have an annual spend of more than £1.3 billion, and the impact they are making.
ALEOs can take many forms - such as companies, community organisations or charities. Most run sports and leisure centres or cultural services like museums and theatres. Others provide social care services, property management, and commercial activities.
The Accounts Commission report says they have brought benefits, including reducing costs, increased uptake in sport and leisure and improved standards of care.
Councils have strengthened their oversight of ALEOs. They are showing improving practice in evaluating them as an option but could do more to involve the public and wider stakeholders in that process.
High Life Highland has realised a saving of £9.1 million in its first five years of operation; with rates and VAT savings making up around 56 per cent of the savings, and the remainder being achieved through income and efficiencies. Former Wick councillor Bill Fernie said,"As chairman of the Education, Culture and Sport committee it was a significant decision we took to grasp the opportunities for a more business like and efficient operation to make big savings and give a better long-lasting service for people in Highland."
The report also highlights issues in councils' use of ALEOs. It stresses the need to continue to follow the principles of the Following the Public Pound code agreed by the Commission and the Convention of Scottish Local Authorities. The Commission has since published updated guidance on governance, accountability and potential conflicts of interest such as councillors sitting on ALEO boards as well as carrying out their council role.
Councils see ALEOs a half-way house between providing services themselves and contracting out entirely to the private sector. They can operate flexibly to improve services for local people and bring in more income and benefit from tax breaks while allowing councils to retain some control and influence.
Around half of ALEOs are registered charities and this allows them relief from non-domestic rates. But the Scottish Government has indicated this would not be available to new ALEOs.
Graham Sharp, chair of the Accounts Commission, said: "ALEOs can and do provide significant benefits. But they are not without risk and changes in tax relief may make the creation of an ALEO a less attractive option for the future.
"This is highly complex area. Councils need to give it careful consideration to ensure they make the right decisions for their own communities."
130 ALEOs / £1.3bn turnover
Number of ALEOs estimated in Scotland
4 councils
Four councils have eight or more ALEOs
25 councils / £430m turnover
Number of councils with leisure and/or culture ALEOs
3 councils / £186m turnover
Number of councils with social care ALEOs. They employ over 5,300 FTE staff
65 ALEOs / £550m turnover
Number of charitable ALEOs. They receive an estimated relief of £45 million on non-domestic rates
The full report can be seen at
http://www.audit-scotland.gov.uk/report/councils-use-of-arms-length-organisations
Related Businesses
Related Articles
The Highland Council is delighted to confirm a highly successful second year for Public Service Obligation (PSO) flights between Wick and Aberdeen. The period from April 2023 to March 2024 has seen a substantial increase in passenger numbers, with several months seeing over 1,000 passengers using the service, and overall the service has seen year on year growth of 25%.
Members of Highland Council, who met on Thursday 14 March 2024, approved a corporate Digital Ambition, which has been designed to deliver significant organisational change across Council services, recognising the current priorities within the organisation. The Strategy, which is embedded within the wider Council Delivery Plan, has been developed to focus attention and resources on areas of change which will deliver the greatest benefit to the Council.
The Council remains committed to supporting mentoring in our schools, including the support that is currently delivered through the MCR Pathways programme. Highland Council is currently undertaking a review of Employability Support provided by a number of different council services and how these relate to the work carried out by external partners and in our schools.
Highland Council members have considered and agreed a revised draft Highland Outcome Improvement Plan. The partnership plan has been reviewed and updated by the Community Planning Partnership.
Members at today's (14 March 2024) meeting of The Highland Council agreed the local authority's new draft Community Wealth Building Strategy. They were also asked to note that a period of public engagement on the draft will now begin, with a final strategy returning to full Council for consideration in September.
Plans to invest up to £60m new Capital in Highland roads and infrastructure have been approved by Members at the Council meeting on 14 March 2024. The decision will see an additional £40m Capital investment in roads and transport infrastructure.
A draft Delivery Plan sets out a roadmap which will ensure the delivery of £54.6m savings and over £100m investment agreed by Council over the next 3 years. The report is a difficult to follow series looing at areas but does not specify where the cuts to jobs will come over the next three years.
The Co-Chairs of the Inverness Castle Delivery Group, Fergus Ewing MSP and Cllr Ian Brown, are delighted to announce the award of £30,000 from Highlands and Islands Enterprise (HIE) in support of framing the 57 panels that will form the Tapestry of the Highlands and Islands. This financial commitment from HIE has contributed significantly to the preservation of the 57 panels created by communities across the Highlands and Islands, of which 32 will be included in the first exhibition as part of the Inverness Castle Experience.
Dawn Meston from The Highland Council's Housing team won a prestigious award at the Scottish Empty Homes Awards held at The Studio, Glasgow on Thursday 29 February 2024 in recognition of her contribution to bringing empty homes back into use across Highland. Between 1 April and 31 December 2023, a total of 25 empty properties were brought back into use following Dawn's intervention as Highland's Empty Homes Officer.
The Chair of The Highland Council's Economy and Infrastructure Committee has confirmed details of a trial, to start next week, of a thermal process for carrying out pothole repairs. An external contractor, Thermal Road Repairs, has been appointed to undertake the work using a thermal repair process.