Government Programme for Government
North Ayrshire Council · 16 September 2026
Back to North Ayrshire Council — 16 September 2026 and its agenda
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NORTH AYRSHIRE COUNCIL 16 September 2026 North Ayrshire Council Title: Scottish Government Programme for Government 2026-31 Purpose: To provide an update on the recently published Programme for Government and for Council to consider the potential implications for North Ayrshire as part of the Public Sector reform programme, and to agree the principles to be adopted for future engagement with Scottish Government. Recommendation: That Council agrees to: (i) Note the detail included within the Scottish Government’s Programme for Government and the potential implications for Councils and IJB’s. (ii) Note the progress to date on regional collaboration work and the challenges in progressing this, set against a backdrop of financial and demographic pressures across the region. (iii) Consider the approach from Scottish Government to progress intensive dialogue over the next 3 months with the Ayrshire Councils around opportunities for a regional approach to Public Sector reform. (iv) Agree the principles that will be taken into these discussions with Scottish Government, and (v) Agree that a further report is brought back to Council to consider the future direction and implications of this work. 1. Executive Summary 1.1 The Scottish Government published its Programme for Government (PfG) on 1st September 2026. This included a section on Delivering a Stronger NHS and Public services and included reference to replacing 14 territorial Health Boards with 2 new Strategic Health Boards, delivering reform of social care and empowering regions and communities through looking at how resources may be pooled at a regional level while also strengthening community level governance. The PfG sets out an initial direction of large-scale Public-Sector Reform that will have significant implications for the Health Service, Councils and Integration Joint Boards. 1.2 The Scottish Government has also stated that they would convene a dialogue with partners across parliament and local government about the future of local governance
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in Scotland and undertake engagement to reach agreement on reform of social care. They stated that this dialogue would take place over the next 3 months. Each Ayrshire Council has since received an invitation from the Deputy First Minister and Cabinet Secretary for Finance and Local Government and the Cabinet Secretary for Public Sector Reform to build on the Ayrshire regional collaboration work undertaken to date and to explore any opportunities that could come from a stronger regional approach to service delivery. 1.3 The Ayrshire Councils continue to work closely to explore opportunities for sharing services on a regional basis. It is recognised that progress to date has been limited and this is set against a backdrop of significant financial pressures across each council and increasing demands from a challenging demographic profile, including a growing elderly population and more complex needs. The reducing overall population across the region also negatively impacts on the region’s proportionate share of national Scottish Government grant funding. 1.4 In advance of the upcoming dialogue with Scottish Government, it is important for the Council to consider and agree some key principles that could help shape and influence the discussions. It is also recognised that these or similar principles would also require to be considered by our neighbouring Ayrshire councils. The proposed key principles include; • Devolution and transfer of powers and resources to local government, particularly in the areas for well-being, economic growth, infrastructure and assets that support the key strategic priorities of the area. • Local Government retains its existing powers, functions and responsibilities that consider subsidiarity. • Any future regional arrangements are supported by a strong community model that follows the principals of subsidiarity that builds on the Council’s Locality Planning model or similar. • Ensure that resource considerations are appropriately addressed and funded across Scottish Government and each Council to further progress any work and the sustainability of any future regional arrangements. • That an appropriate public consultation and engagement exercise be undertaken as proposals emerge. 1.5 The initial timeframe set out by the Scottish Government to engage with partners appears very challenging. It is unclear at this time the level of expectation around what can be achieved over the next 3 months and whether this is aligned to agreeing a broad strategic direction or if there is more expectation around agreement of responsibilities, service design, structures, governance and potential delivery models. It is anticipated that any future considerations would require agreement nationally, via COSLA and locally, for Councils that are impacted. Further reports will be brought back to Council in due course to consider any future implications or decisions.
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2. Background Programme for Government (PfG) and Public Sector Reform 2.1 The Scottish Government published its Programme for Government (PfG) on 1st September 2026. The PfG set out details of the planned programme of activities aligned to the Scottish Government priorities and the Public Sector Reform programme across; • Eradicating Child Poverty • Growing the Economy • Tackling the Climate Emergency • Delivering a stronger NHS and Public Services 2.2 Within the section on Delivering a Stronger NHS and Public services, as part of what is described as “national renewal through public sector reform” and a “rewiring of the Scottish State over the course of this parliament” there is reference to replacing the 14 current territorial Health Boards with 2 new Strategic Health Boards and delivering reform of social care. It is evident that this would have significant implications for the Health Service, Councils and Integration Joint Boards (IJBs). Whilst the direction around Health Boards is clearer, the implications for Councils and IJB’s is not. The commitment from Scottish Government is to “use the next 3 months to reach an agreement on reform of social care which makes best use of the funding in the system, delivers fairer and more efficient services and achieves economies of scale, while maintaining a focus on community need.” It is not clear if this timeline for engagement is aligned to agreement of a broad strategic direction or if there is more expectation around agreement of responsibilities, service design, structures, governance and potential delivery models. Although not clear, it is anticipated that any future considerations would require agreement nationally, via COSLA and locally, for Councils. 2.3 Included within the PfG, as part of Public Sector reform and in particular “Empowering regions and communities” is a commitment to “engage in an intensive dialogue over the next 3 months with partners in local government, and other parties across parliament to reach a clear shared direction about the future of local governance in Scotland. The Scottish Government believes there is a need for regional local government, alongside community empowerment, and will engage with partners to find common ground.” 2.4 Following the publication of the PfG, each Ayrshire Council received correspondence from the Deputy First Minister and Cabinet Secretary for Finance and Local Government and the Cabinet Secretary for Public Sector Reform to build on the Ayrshire regional collaboration work undertaken to date and to explore any opportunities that could come from a stronger regional approach to service delivery. This is set within the context of the significant demographic, financial and service pressures faced by Councils. The Scottish Government have also stated an ambition that services are sustainable for future generations, and how Scotland can best balance regional capacity, local accountability and community empowerment in the years ahead. . 2.5 Similar to the point made in section 2.2 of the report, it is not clear if the 3-month timeline is simply to reach a clear shared direction or if there is a greater expectation that extends into a review of structures and delivery models etc. The PfG does state
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that by the end of the year the Scottish Government would anticipate moving from “debate to delivery” and that they do not approach this dialogue with predetermined structural solutions. It is recognised however, that any progress would likely be subject to agreement initially being reached on a shared direction within this timeframe. From an Ayrshire perspective, the Scottish Government have stated they are keen to learn more about the collaborative work undertaken to date and the ambitions and priorities for the region. Further, a Public Service Reform Summit is also due to take place in late September, bringing together leaders from across the public sector to begin a detailed discussion on the challenges and opportunities ahead. 2.6 The PfG also includes reference to a commitment to “empower school leaders, raise standards and reduce variation, with decision making as close to the classroom as possible. This includes working closely with local government, school communities and headteachers” with the stated aim of “maximising the opportunities that reform of governance and service delivery could bring.” Again, it is not clear the direction this commitment could take, however, with reference to reform of governance and service delivery, this brings into sharp focus the current relationship, responsibilities and governance arrangements between Scottish Government, Councils and school leaders. 2.7 In terms of the wider public body landscape, as part of “simplifying and decluttering delivery” the PfG makes explicit reference to reducing the number of public bodies to create a system that is integrated by design that improves service delivery. The major proposals include but are not limited to; • Create a single overarching environment body (SEPA, NatureScot, Zero Waste Scotland and potentially Scottish Forestry.) • Bring Transport Scotland back into the Scottish Government. • Integration of Scottish Food Commission and the Scottish Pubs Code Adjudicator into the Food Standards Scotland. • Reform of the National Records of Scotland and Registers of Scotland. • Simplify the health and care assurance landscape to support integrated services. • Review the audit and scrutiny landscape and inspectorate functions to identify opportunities for rationalisation and simplifying processes whilst maintaining assurance. 2.8 This is a significant programme of structural reform which will require to be supported by legislation. The Scottish Government’s year 1 legislative programme will include 9 Bills, one of which is the Public Service Renewal (Scotland) Bill. This Bill will seek to provide the statutory backing to the reform of the public service delivery landscape, including the merging and abolition of public bodies and the transfer of functions between Scottish Government and public bodies. This timeframe appears very ambitious and is consistent with the reference to moving from “debate to delivery.” Ayrshire Collaboration Programme Update 2.9 On the 17 September 2025, the report to Council outlined the Ayrshire Collaborative work programme and need to further develop this work in view of the financial challenges facing the region and within the context of recent Best Value audits for Workforce Planning and Transformation in Councils. This programme included
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progressing shared service opportunities across some specific areas, including Economic Development, Roads and Education senior phase. 2.10 The report also highlighted that, in view of the scale of the financial challenges facing each Council and the impact this will likely have on services and outcomes across the region, further exploration of a wider Ayrshire approach through a public sector reform lens, is a necessary and appropriate action for future consideration. As part of this work, it is important to ensure that the principles of community empowerment and local democracy, one of this Council’s strategic priorities, are not diminished. 2.11 On the 11 February 2026 Council approved a shared Economic Development service that included North and East Ayrshire Council. The shared service came into operation on the 1 July 2026, with North Ayrshire Council being the lead for the shared service. This arrangement being supported by a service level agreement between partners and appropriate supporting Council and regional governance structures being progressed. The shared service arrangement does not currently include South Ayrshire Council. 2.12 The current work programme builds on existing areas of shared service e.g. Ayrshire Civil Contingencies, Ayrshire Growth Deal, Economic Development and Ayrshire Roads Alliance, and HSCP lead partnership arrangements. Further opportunities are to be assessed and prioritised against agreed criteria through an initial screening assessment for all functions and services. This work programme also includes examining ICT contract arrangements and wider procurement opportunities across the region. 2.13 In summary, the Ayrshire Collaboration work progressed to date has delivered some success and has demonstrated that partnership working across the 3 Councils can be achieved, however, it is also recognised that progress is time consuming, resource intensive, lengthy and complex with no guarantee of commitment, success or sustainability. This is currently evident through areas including Economic Development and Ayrshire Roads Alliance where only 2 Ayrshire Councils from the 3 participate. 2.14 On 20 May 2026, Council endorsed participation in the Ayrshire Transformation Board to strengthen integrated working across North, East and South Ayrshire Councils, the 3 Integration Joint Boards and NHS Ayrshire Arran. The IJB received an update in August on the agreed Pan-Ayrshire business case, which sets out the transfer of resources from the Health Board to support the shift in the balance of care from hospital-based services to community-based provision. The PfG announcement to replace the 14 territorial health boards with 2 new strategic health boards and the associated stated intention from the Scottish Government to reform social care will inform the future direction and scope of the work of the Board. 2.15 The wider national context to consider, from a funding perspective, includes a broadly flat cash level of projected Scottish Government core grant funding to Councils over the medium-term. When set against the Ayrshire demographic and the demands and cost of service delivery across the region, this will inevitably create larger Budget deficits across the short, medium and long-term. Fair funding for local government remains a priority for COSLA and budget lobbying will continue. A recent long-term forecast based on current planning assumptions indicates a potential budget deficit of £171m to 2033/34 across the Ayrshire region. From a North Ayrshire Council perspective, the short-term effects of this financial landscape have already been
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borne. Council tax increases for 2025/26 of 7% and 8.5% for 2026/27 sit above prevailing levels of inflation, and in addition to delivering further savings and planned use of council reserves, in 2026/27 the HSCP has moved its eligibility criteria model to critical only care needs. In the absence of additional Scottish Government funding, this is an unsustainable position for Councils. From the launch of the PfG it is evident that public sector reform is the approach to be taken by Scottish Government to address the pressures on public finances by developing a simpler and focused public sector landscape with a clear focus on delivering priority outcomes. Principles for Engagement 2.16 Following the publication of the Scottish Government PfG and the Scottish Government commitment to engage in intensive discussions with partners over the next 3 months, the content of the PfG highlights a potentially significant level of impact on local authorities, IJB’s and Health and this will likely extend into various potential areas of structural reform. 2.17 The Leaders of the Ayrshire Councils have each received correspondence from the Scottish Government to build on the Ayrshire regional collaboration work undertaken to date and to explore any opportunities that could come from a stronger regional approach to service delivery and have proposed a meeting to discuss further. Given the potential implications arising from the PfG the Council Leader has extended an invite to all Group Leaders to participate in this meeting once further details are received. Without knowing the precise scope and detail of the discussions, it is important for Council to consider a broad set of principles that could potentially help guide, shape and influence discussions. Although it must be recognised that these may not be achievable the opportunity to make a case that empowers Ayrshire within a framework of subsidiarity and democratic governance is considered essential within reform discussions. 2.18 The proposed key principles to support future discussions with the Scottish Government are set out below for consideration and include; • Devolution and transfer of powers and resources to local government, particularly in the areas for well-being, economic growth, infrastructure and assets that support the key strategic priorities of the area. • Local Government retains its existing powers, functions and responsibilities that consider subsidiarity. • Any future regional arrangements are supported by a strong community model that follows the principals of subsidiarity that builds on the Council’s Locality Planning model or similar. • Ensure that resource considerations are appropriately addressed and funded across Scottish Government and each Council to further progress any work and the sustainability of any future regional arrangements. • That an appropriate public consultation and engagement exercise be undertaken as proposals emerge.
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2.19 Depending on progress made through early engagement with Scottish Government as part of the initial 3-month period of intensive dialogue, resource implications to further progress any work for the Council and the region will require to be kept under review and could lead to a request for funding and resource from Scottish Government. At the meeting of 17 September 2025, North Ayrshire Council earmarked an initial sum of £0.250m to help progress the Ayrshire Collaboration work programme. Council will be kept informed as to any further requests for funding, with the Council’s Change fund being the recommended primary source to address any short-term requirements. 2.20 As noted throughout the report, the PfG publication outlines a wide-ranging programme of public sector reform which could have significant implications for Councils, IJB’s and the Health Service. From a North Ayrshire Council perspective, the immediate next steps will include engagement with Scottish Government and East and South Ayrshire Councils as part of a 3-month period of intensive dialogue to “build on the Ayrshire regional collaboration work undertaken to date and to explore any opportunities that could come from a stronger regional approach to service delivery.” Further reports will be brought back to Council in due course to consider any future implications or decisions. It is also anticipated that any national and/or regional implications for Councils will be considered by COSLA through the normal governance arrangements. 3. Proposals 3.1 It is proposed that Council agrees to: (i) Note the detail included within the Scottish Government’s Programme for Government and the potential implications for Councils and IJB’s. (ii) Note the progress to date on regional collaboration work and the challenges in progressing this, set against a backdrop of financial and demographic pressures across the region. (iii) Consider the approach from Scottish Government to progress intensive dialogue over the next 3 months with the Ayrshire Councils around opportunities for a regional approach to Public Sector reform. (iv) Agree the principles that will be taken into these discussions with Scottish Government, and (v) Agree that a further report is brought back to Council to consider the future direction and implications of this work. 4. Implications/Socio-economic Duty Financial 4.1 No direct financial implications from this report, however, future resource considerations would require to be appropriately addressed and funded across Scottish Government and each Council to further progress any work as part of the 3- month period of dialogue. Any requirements will be reported in due course. From a strategic perspective, it is recognised that reform of public services should create an
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environment for any financial efficiencies to be re-invested into key priority areas to protect outcomes for communities. Human Resources 4.2 No workforce implications at this time, however, recognise that any areas of future public service reform would most likely have workforce implications. Engagement with the workforce and Trade Unions would be a key component in progressing any reform activity and the appropriate governance arrangements would require to be put in place. Legal 4.3 The Programme for Government (PfG) includes reference to a range of anticipated year 1 Bills as part of the legislative framework that will be taken forward. This includes a Public Service Renewal (Scotland) Bill. This Bill would seek to give statutory backing to the reform of the public service landscape. One of the key legal implications for all Councils is the current statutory powers, responsibilities and obligations across the range of services provided and what implications any proposed reform would have on these powers. This will require to be carefully assessed and monitored. Equality/Socio-economic 4.4 No direct implications at this stage, however, any future reform proposals would require appropriate consultation and require to be Equality Impact assessed. Climate Change and Carbon 4.5 No direct implications currently. This remains a key priority area for both North Ayrshire Council and the Scottish Government and any environmental impacts of future reform proposals would require to be assessed. Environmental and Sustainability 4.5 No direct implications currently. Key Priorities 4.6 As a general principle any future reform proposals for the region will require to align to each Council’s key priorities. Community Wealth Building 4.7 None. However, Community Wealth Building remains a regional priority area. Similarly, any future reform proposals would require to be considered through the lens of Community Wealth Building.
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Islands Communities Impact Assessment (ICIA) 4.8 Any future reform proposals that have a disproportionate impact on island communities will require to be Island Communities Impact Assessed. United Nations Rights of the Child (UNCRC) 4.9 None at present. However, UNCRC impacts will require to be assessed for any future reform proposals. Consumer Duty 4.10 None. 5. Consultation 5.1 To date, consultation on regional collaboration has already been included in North Ayrshire’s annual Budget Engagement programme. Further collaboration has taken place across all Ayrshire Councils with the aim being to explore shared service opportunities. Moving forward there will be a requirement to undertake consultation aligned to any specific reform proposals that arise through this upcoming process of dialogue. Craig Hatton Chief Executive For further information please contact Mark Boyd, Head of Service (Finance), on 01294 324560. Background Papers None.