ALEOs: getting it right?

Audit Scotland has published a report on Arm's-length external organisations (ALEOs) this morning. There are now more than 130 ALEOs in Scotland running a range of public services. The number of leisure trusts has doubled in the past decade.

The report claims that ALEOs can offer benefits over traditional in-house services. These include 'flexibility' and reduced costs. But they also warn that councils remain accountable for the use of public funds and poor governance is a cause of concern. The report sets out good practice guidelines on how councils establish and deliver services through ALEOs, including accountability for finance and performance.

What the report omits are some of the real reasons for establishing ALEOs. In the main, the driver is tax dodging and avoiding equal pay responsibilities. ALEOs also offer an opportunity to avoid public scrutiny and accountability. None of these are appropriate motives for a democratically accountable council.

Most ALEOs were established with a range of fanciful claims about income generation and new services. Very few have delivered and this report makes no real effort to measure the claims and compare that with what has actually been delivered. That would have been a more useful exercise to inform councillors considering this approach.

This was apparent in 2006 when UNISON Scotland published an analysis of leisure trusts. That analysis still holds good today. ALEOs simply add to an increasingly fragmented service delivery environment, when we should be focused on integrating services around common outcomes.