Lesson one: don't fall into the first 'hit list' trap

Published on Thursday 30 August 2007 01:20

THERE are mysteries; then there are unfathomable mysteries; finally, there is local authority budgeting. As an Edinburgh councillor for 12 years, with a first-class honours degree in economics, I burned the midnight oil while wading through inch-thick budget documents trying to reconcile columns of figures - mostly to no avail.

So I have a soft spot for the hundreds of new councillors throughout Scotland as they try to come to terms with their local authority's financial structure. In particular, I am lighting a candle for the new Lib Dem-SNP administration in Edinburgh, which has been handed a proposal by council officials to close 13 primary schools, three secondaries, six nurseries and four community centres in an attempt to plug a projected 25 million black hole in the accounts.

The Labour opposition spokesperson on education, Andrew Burns, has denounced these cuts as "a dog's breakfast". Before we get to the school closure plan, let's just ask ourselves: how come Edinburgh has a 25 million overspend? Readers with a long memory might remember that Labour was in power before the May elections and that Mr Burns was the administration's transport convener.

It was the said Andrew Burns who was responsible for the abortive referendum on congestion charges and the ill-conceived city-centre road management plan that made it impossible for anyone to access Edinburgh's main shopping streets, before public uproar forced its modification. Mr Burns wasted millions of pounds with his botched proposals. The words "dog" and "breakfast" certainly apply here. Could Mr Burns's misjudgment have anything to do with the 25 million bill bequeathed to the new city council?

That said, let's cast a dispassionate eye over the school closure plan. I strongly suspect that the council officials prepared a doomsday scenario for the new administration - Labour had been in power for the previous 23 years - thinking the tally of schools for closure would be drastically cut back by councillors. In my experience, officials always (1) say finances are worse than they actually are; (2) offer up the most unpalatable cuts first, knowing they are likely to be rejected, and (3) come up with the "compromise" cuts after the politicians have been duly frightened. The trick is to know they are going to do this to you.

If the new council is to be criticised, it is for taking the financial figures presented to it at face value. That is not to say there is not a budget overspend - the outgoing Labour council was desperately putting off making hard decisions in the hope it could minimise the electoral hurricane that was heading its way.

One legacy of Labour's culture of neglect is that top managerial posts in Edinburgh council - such as the chief officer responsible for economic development - have remained unfilled for a considerable time. And many key officers in post, including the chief executive, are coming up to retirement. This indicates to me that the current full-time city officers are more focused on political fire-fighting - witness the school closure plan - than long-term strategic thinking. I strongly suggest that the new Edinburgh administration revamps its team of officials before embarking on any further emergency surgery to public services.

THE Lib Dem-SNP administration now finds itself in a tricky situation. Bravely and responsibly, it has tried to tackle the funding problem head-on. Unfortunately, by accepting the officials' excessive school hit list at face value, it has united the whole city - working class and middle class - against it, and given Labour a classic opportunity to regroup. It does not matter that, had Andrew Burns been given the chance to run Edinburgh's schools the way he ran (or did not run) its roads, the situation would be even worse. Once you accept office, you have to deliver.

In the best of all possible political worlds, here is what I would do. First, Edinburgh has significant capital assets it can sell or mortgage in order to buy a year's financial grace. Never make policy on the hoof or in a panic. Second, any prospective school hit list should be pruned by the administration itself. If you are going to take stick, do it on your own terms. Third, decide what your educational philosophy is rather than be directed by cash considerations. If you can unite the city around a fresh vision of what education is for, everything else will follow.

For instance, schools are the heart of a local community. Rather than close them, why not seek ways of using the school buildings for additional things? Why not make empty classrooms available for local business start-ups or social enterprises? Unfortunately, such joined-up thinking is rare in council circles.

A case in point: it is extremely short-sighted of Edinburgh officials to propose the closure of the current Castlebrae High and abort the building of a new local secondary. This project is being run by the council's own in-house developer, EDI, and is the mainspring of an urban regeneration programme that will transform that part of Edinburgh. But take out the school and you destroy the whole regeneration project, which will actually make the council money in the longer term.

Here's what I did learn about council finances: all departments carry a bit of "fat" in case they are made to cut back. It is normally around 5 per cent of budget. You can slice that without hurting services. And never, ever, believe the first set of numbers an official gives you.