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
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
Following a pre-planning drop-in session at the end of September 2018, The Highland Council has given the public a further 28 days to share their views and comment on the proposal for a new Materials Recovery Facility (MRF) at the Longman landfill site in Inverness. The public can now visit the Council's website to find out more about the MRF and to share their views on the proposal.
Dr James Vance, Head Teacher at Culloden Academy has been appointed as interim Head of Education Services with The Highland Council's Care and Learning Service. Dr Vance, who starts his new employment in January 2019, will be based at the Council's headquarters on Glenurquhart Road, Inverness.
The Highland Council has submitted a planning application for a low head hydroelectric development at the Torvean Weir on the River Ness at land 430m south west of Highland Rugby Club, on Bught Road, Inverness Using an Archimedes screw the hydroelectric scheme will have a generating capacity of up to 100kW and an average annual renewable energy output of approximately 600,000 kWh per annum. The renewable energy generated will return an income to the Council through the Feed in Tariff mechanism and be connected to the local Archive Centre and leisure centre.
The Highland Council is carrying out the formal review of its Polling Districts and Places. This review is required in terms of the Electoral Registration and Administration Act 2013 as all polling districts and polling places should be reviewed at least every four years.
Joint operation identifies poor standards of food safety and staff living accommodation. Highland Council Environmental Health Officers were required to take formal enforcement action regarding poor standards of food safety during a recent multi-agency operation led by Immigration Enforcement.
The Scottish Government's announcement of a consultation on the introduction of a visitor levy ("tourist tax") has been welcomed by The Highland Council. Convener Bill Lobban recently gave evidence to the Scottish Parliament's Culture, Tourism, Europe and External Affairs Committee, where he emphasised the importance of tourism to the Highlands.
The Highland Council has appointed a new Chief Executive. The successful candidate is Donna Manson, currently Service Director for Children and Young People in the Scottish Borders.
Local services throughout Scotland could be plunged into crisis after - UNISON, Unite and the GMB - wrote to COSLA to say they will recommend their members reject their revised pay offer when they consult them in the coming weeks. The revised pay offer, made by COSLA on 6th September 2018, was a 3% increase for all local government workers earning up to £80,000, but the trade unions are angry that this is below inflation and does not improve low pay.
Members have discussed the consultation and proposed response to a review of the structure of the Scottish Local Government Pension Scheme. The Highland Council Pension Fund is one of eleven constituent funds of the Scottish Local Government Pension Scheme.
The Highland Council has agreed to plan for a potential budget gap of £66.7 million over the next three years. It was agreed by Members in June to develop plans for a multi-year budget for the next 3 financial years (2019-22) to meet the challenge of a potential funding gap dependent on a wide range of variables.
[Printer Friendly Version]