£70million council shock
Accounts Commission told that the money was drained from Aberdeen’s coffers over the last three years
Published:
Around £70million has been drained from Aberdeen City Council’s reserves over the last three years, it was claimed yesterday.
External auditor Cathie Wylie stunned onlookers as she described the council’s “precarious” financial position at yesterday’s Accounts Commission hearing into the running of the local authority.
Council officials disputed the £70million figure, saying that £59million had come from capital receipts and that the amount taken from reserves was nearer £12million.
It also emerged at yesterday’s hearing that the next audit report on the city council is likely to be as damning as the previous two.
The five-strong panel conducting the inquiry revealed a draft copy of a social work services audit report, due to be released next month. It found the council’s score in five out of 10 indicators to be “weak”. Two more were unsatisfactory and the remaining three no more than adequate.
The hearing has been called to investigate Audit Scotland’s findings on a report into best value at the council, and another report from the local government watchdog on the selling of property below market value.
Depute council leader Kevin Stewart faced questioning after stating that councillors had been “lied to” over the property sales.
“I have to say I take severe umbrage at what happened – all members were lied to in terms of what information they were given,” he said.
Council chief executive Douglas Paterson, who announced plans to take early retirement at the start of the meeting, and council leader Kate Dean were grilled over low staff morale and “weak leadership” at the local authority.
Former leader of Edinburgh and Lothian council Keith Geddes quizzed Mrs Dean.
“This morning and just now you said you were not involved in some of the key decision-making at the council,” he said.
“This is only the second time the Accounts Commission has done this, it’s quite a serious step and I think there needs to be a recognition that there has to be a single point of responsibility.”
Trade union representatives and opposition Labour group leader Len Ironside questioned the structure of the council – a theme to which panel members repeatedly returned.
“The lack of overall direction, confusion between the area committees and overall bureaucratic burdens, would suggest we need to review the whole structure,” said Mr Ironside.
Conservative group leader Alan Milne criticised the pre-2003 Labour administration for saying “yes” to everything officials proposed. Asked what he would do if he was running the council, he said: “I would resign.”
Readers' Comments
I heard few other things too: 1) The lack of average profesional quality in councillors from all parties, both as source of policies and as means for scrutiny and control. 2)In words of the auditors: A staff entrenched in habits they refuse to change, with a culture of non-compliance, in other words prone to disobey or ignore orders, do whatever they think appropiate and not what they are told. 3)Management totally reactive, incapable of reasonably planning in advance, and unable to put a stop to overespending even when conscious of being beyond the Council financial posibilities.4)Representatives of the employees with a total disregard for the common good and convinced they deserve the best, independently of the means of who is footing the bill: Us.5) Willie Young stating the the Commission is not independent, thus any conclusion unfavorable to labour a political attack.
Vincent Mc Dee
Report this comment
"Willie Young stating the the Commission is not independent, thus any conclusion unfavorable to labour a political attack." That's a laugh considering one member of the accounts commission investigating Aberdeen is Keith Geddes ex labour leader of Edinburgh city council.
Peter Laing
Report this comment
I would like to point out that previous councils have been Labour, Lib/Con, and at this point Lib/SNP. As the sections from the accounts commission report shows, the latest council has in some ways inherited the problem as well at one time being a part of it. It seems unfortunate that SNP councillors are being asked to step down, when they are only dealing with a situation that they have inherited. No one likes cut backs or School closers, but when a council spends Money they haven’t got then there is no option. When heads of charities are giving them self’s £52,000 and that most of their funding goes on pay. Then I think it is only reasonable that funding to them should be cut by the council. After all it is our money. Also the last paragraph should be read by everyone. It points out that some of our primary schools are operating at low levels. Some individuals have been trying to make a case to keep certain schools open, and I have nothing but admiration for them. Well unfortunately these are the schools that are operating at low levels and with high maintance costs. Financial health 112. At the time of the audit visit in early 2007 the council’s overall financial health was poor. It is now precarious, and significant further work is needed to strengthen resource management to overcome the ongoing demand-led cost pressures in health and social care, which the council has struggled to address over recent years and to deliver the savings contained in both the 2007/08 and 2008/09 budgets. 118. The council’s budget for 2008/09 anticipates savings of almost £27 million being achieved. This looks optimistic given the difficulties encountered in realising savings over recent years and the acknowledged delay in seeing positive financial results from the transformation strategy improvements achieved during 2007/08. 119. The situation is now such that an ongoing failure to achieve savings commitments would have major strategic consequences for the council and the services it provides to citizens. Progress against the various transformation strategies and more general budget savings commitments made by the council will need regular and robust monitoring and remedial action where required alongside the revision and implementation of the strategy to restore balances. Source: Inspection of the Education Function of Aberdeen City council, HMIE, 2007 176. In 2006/07, one school in the secondary sector was operating at an occupancy level of less than 60 per cent. This follows a three year period where all secondary schools were operating at above that level. Two schools are operating at a ratio of over 100 per cent pupils to available places. Low occupancy levels are a more significant issue in the primary sector. In 2003/04 30.4 per cent of primary schools were operating at an occupancy level of less than 60 per cent; by 2006/07 this figure had risen to 43.6 percent. The council’s review of school accommodation known as Reorganise, Renovate and Rebuild (3Rs) reflects the beginning of a more systematic approach to managing the school estate.
grame tran
Report this comment
Some schools are operating at less than 25% occupancy. In fact one school has room for nearly 500 and can only have 3 teachers for the entire primary, numbers are so low. This is a city centre school with another school within quarter of a mile, which is operating at about the same level.
Peter Laing
Report this comment
Why was the Chief Executive allowed to resign, he should have been sacked years ago. No further public money must be wasted on the man, no severence package, no early retirement, just a good old fashioned private sector-esque sacking.
John McKenzie
Report this comment
One of the problems is that many councillors have little or no business or commercial experience and all of a sudden they are effectively in control of a multi million pound business! One or two current council members have only just left school so why are we surprised when they all make such a mess of things. The CEO and Council leaders would have been out of a job long ago had they been anywhere other than the Public Sector where htere is insufficient accountability until it is too late and the money has been spent. I recently attended a public meeting called by the council to discuss the proposed new travellers site in the Nigg / Altens area and none of the elected members even bothered to turn up. yet they are happy to spend our money on people who will contribute nothing to the city or its economy. The council are also content to spend thousands on a feasability study for a new 22,000 seat 'community' stadium when AFC barely half fill Pittodrie except for 'old firm' or European games. The only people who would gain from this project are Cove Rangers, in whom Mrs Dean has an interest and Stuart Milne in redeveloping the Pittodrie site. The one thing councillors need to do is to stop treating the electorate like idiots. Oh and nice speech for the SNP from Mr Tran. They are as culpable as the rest!
Eric Witton
Report this comment
Eric, how could these young councillors be to blame when they were not even there during the time that the audit covered? It is only since they arrived that the past mess has been highlighted and a start has been made to sorting it out. The new young councillors are the ones that are asking the questions which should have been asked years ago, instead of allowing the mess to get worse. The previous councillors were frightened to stand up to the unions, and just gave everything that was asked for. Of course it is emotionally hard for schools etc to be closed, that is why it was never done, but with numbers falling to levels below 30% occupancy, it has to be faced up to.
Peter Laing
Report this comment
May I point out, that there are certain people working for the council and with high pays, which are no longer required? This is because their position is surplus to requirements and can be amalgamated with another department, or completely done away with. These people have been offered a package, but every time an approach is made on the issue the unions step in and threaten industrial action. In an age of transparency maybe the nice Irish man from the union can pull him self away from the casino, and tell the people of Aberdeen what is the problem. The same can be asked of the nice little man from Glasgow, if he can pull him self away from Dag’s Bar and let us know what his problem is? All that certain individuals are trying to do is save the people money.
grame tran
Report this comment
I have been following this story on the STV, and was under the impression that it was the present council who were to blame for Aberdeens problems. Now it turns out it was previous councils to blame Why have STV been reporting this story in such a misleading way?
Tam Glen
Report this comment
I'm surprised it was even on STV at all. Aberdeen has barely been represented at all since we lost Grampian tv. Tam, part of the reason is likely that the reporters are from the central belt and have no idea about, and no inclination to find out about, the real story.
Peter Laing
Report this comment
I'm surprised it was even on STV at all. Aberdeen has barely been represented at all since we lost Grampian tv. Tam, part of the reason is likely that the reporters are from the central belt and have no idea about, and no inclination to find out about, the real story.
Peter Laing
Report this comment