Council lashed by auditors for massive underspend

editorial image

ABERDEENSHIRE Council’s external auditors have condemned the local authority for a £20 million underspend which the shire’s leaders have hailed as evidence of council efficiency.

A report from auditors Deloite criticised the scale of the underspend, citing evidence that the money had come from other budgets in desperate need of investment.

Cuts cited by the auditors included a £1.8m spending shortfall on permanent teachers; £1m in relation to vacant posts regarding the provision of home care for older people; a further £1.2m earmarked for economic growth which went unspent; alongside a failure to spend nearly £33m from the £107m capital budget set aside for infrastructure improvements such as school building and road repairs.

The report states: “Management has recognised that they should have been aware of this likely result earlier in the year, and have undertaken additional work in order to prevent a similar situation occurring in the future.”

The full report will go before councillors on Thursday 27 for consideration.

Councillors from the SNP opposition have called for an apology from the Liberal-Conservative-Independent administration, which had previously described the underspend as evidence of the council’s efficiency.

Shadow Council Leader, Inverurie & District SNP Councillor Hamish Vernal, said that the report left the political leadership of past and present administrations “cruelly exposed”, and called on the Council’s Leader and Depute Leader – both members of the previous Lib Dem/Conservative administration - to apologise for misleading the people of Aberdeenshire regarding the underspend.

“The objective of any council should be to run a balanced budget, rather than to over or under spend”, he said. “This report by the council’s external auditors offers a forensic analysis which leaves the current administration’s boasts about good financial management cruelly exposed.”

Cllr Vernal continued: “I very much welcome the fact that council officers have recognised that they should have done more to prevent this situation arising at all.

“With officials now accepting the auditor’s criticism, it seems the only people left happy to pretend that last year’s underspend was a good thing is the political leadership of the ‘Aberdeenshire Alliance’.

“The Leader and Depute Leader of the Council should now apologise to the people of Aberdeenshire for trying to spin their financial failures as a measure of success.”

His sentiments were echoed by Cllr Rob Merson, who said that the auditor’s report demonstrated the “high price” being paid for the administration’s ‘100 Day’ project funding.

“While the community projects that will benefit are worthwhile, we should not forget that the resources to pay for them have come at the expense of front-line staffing and services.

“The underspend meant that a number of cuts which were made last year, such as to warden cover in sheltered housing accommodation and classroom assistants, were completely unnecessary.

“No-one should be fooled into thinking that these projects are coming at anything other than a high price for some of the most vulnerable people in Aberdeenshire who depend on frontline council services being properly resourced.”

The local authority defended its record, however, saying that while the council’s officers accepted the criticism, the underspend represented a comparatively small proportion of the overall budget, and that the report had been, overall, a good one.

Council head of finance Alan Wood said: “Our budget is managed well and once again we have received an ‘unmodified statement of accounts’ which in effect gives the council a clean bill of health.

“The opinion of Deloitte’s is that the financial statements give a true and fair view, have been prepared properly and in accordance with accounting codes of practice.

“The most recent audit has a number of items which we will work to address as part of our budget process and will be discussed by councillors. An action plan will be prepared and reported to the next meeting of the council on November 22.

“The underspend in terms of our overall budget is less than 4% which means we are spending 96p in every £1. We will take on board the comments from our auditors and review the way this information is monitored and presented throughout the year.”