Edinburgh council cash woes worse than thought

High profile issues such as the tram project take up a lot of time and effort. Picture: Lisa Ferguson

High profile issues such as the tram project take up a lot of time and effort. Picture: Lisa Ferguson

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Edinburgh City Council must make “substantial improvements” to help meet demand for services and achieve necessary savings, a report has found.

The Audit Scotland report said the local authority faces having to find £138 million in savings by 2017-18.

The council watchdog reviewed the authority in May 2013 and identified a need for £107m of savings, but a follow-up report has since found that, while improvements had been made in some areas, the “scale of the challenge facing the council has substantially increased”.

During the 2013 inspection, the council reported the gap between the savings required by 2017-18 and those already identified in council plans as being £17m. That figure has now risen to £67m.

In its findings on behalf of the Accounts Commission, the watchdog said it had “growing concern” about the increased level of savings required by the council to balance its books and that elected members had “expressed concerns” about the pace of change following the last report.

The council’s net annual spend is £950m.

Douglas Sinclair, chairman of the Accounts Commission, said: “The City of Edinburgh Council has made some progress and that is encouraging. But it still has a long way to go, amid increasing demands and rising levels of required savings, and the continued lack of a workforce strategy.”

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The council aims to achieve many of its savings through a “transformation” programme entitled Bold (Better Outcomes Through Leaner Delivery) which is being drawn up by chief ­executive Sue Bruce.

Details on Bold are to be made available to the council finance committee in the New Year but it is understood that all five major council departments will be reorganised to make the city “leaner and more efficient”.

The scandal-hit department of services for communities, once led by senior city official Mark Turley, looks set to be dismantled as the local authority attempts to recover from recent controversies and make high-ranking officials more accountable. The department was hit by scandals involving statutory notices, Mortonhall Crematorium and school maintenance.

Ms Bruce said: “Audit Scotland’s findings acknowledge the progress that the council has made in key areas. The report rightly highlights the financial challenges the council faces.

“This programme is in its initial stages and we recognise that there is work to do to meet our objectives. As we move forward into 2015, developing an effective workforce strategy will be a priority for the leadership team.”

COMMENT

Richard Kerley: Cash-strapped councils must reduce costs by losing staff

IF YOU take the Edinburgh figures and compare them with other local authorities with similar kinds of budget shortfalls they are not that startling. East Renfrewshire faces a shortfall of £30 million and West Lothian £40m, and these local authorities are about a quarter of the size of Edinburgh.

Budgets are under pressure across the board and there is no magic wand, but there is a lot of positioning going on with a view towards influencing government thinking regarding a future review of the council tax freeze, which is set until the end of this parliament.

Edinburgh is doing a lot of money-saving exercises but has the added pressure of being the capital city. Council managers have had a lot of high-profile issues to deal with in recent years such as the tram project, the statutory repairs scandal, Mortonhall and the fatal accident at Liberton High. These problems and incidents take up a lot of time and effort.

Clearly the city would have had extra money to spend without the trams project but a big slice of the initial funding – £500m – came from the Scottish Government. However, there is no one specific problem but a range of different issues such as the school estate, roads and procurement.

Sue Bruce’s Better Outcomes through Leaner Delivery (Bold) transformation programme will obviously be key to achieving the £138m required in savings. However, savings are always harder to project and are potential costs. You can look at the spend of each primary place and project forward in terms of death rates so as to plan the costs of free personal and nursing care, but savings prove otherwise and are harder to get to.

Every council is giving clear signals about a reduction in the number of people it employs. Many councils must simply try and find ways of coping with fewer people.

• Richard Kerley is professor of management at Queen Margaret University and chairman of the Centre for Scottish Public Policy

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