'Even free tea for councillors faces the axe'

WHATEVER the cause, there is little doubt that the city's finances appear to be in dire straits. It is understandable that the new fledgling council has not been slow to heap the blame for this on the ousted Labour administration but the matter is not as clear-cut as it first appears.

The figures and analysis of what actions are now required to balance the books make grim reading. A predicted black hole approaching 10 million is opening, and cuts are required across the board. Schools will have to close and trim their budgets, nursery places are at risk, proposed new bus services could be shelved and even the money-spinning Christmas and Hogmanay Festivals may be scaled back. It is so serious there is even talk of no free tea and sandwiches in the councillors' lounge.

There is little doubt that it took some by surprise earlier this year that the former Labour administration was able to peg council tax rises to 1.5 per cent - the lowest rise since local government reorganisation in 1996 - when months before even they were predicting rises in the region of 4.6 per cent.

But due to a sleight of hand from the Executive which gave the city an additional 15m in December and the former council leaders dipping into the reserves, the rise was held to below the rate of inflation. At the time they claimed sound management which had seen 19m of efficiency savings made combined with raising millions from the sale of assets kept tax rises down, and they promised the same over the next four years. So how can things appear to have changed so quickly?

It would be naive to think that after 25 years in control and still harbouring hopes of at least being returned to power even if it was part of a coalition, Labour would have been prepared to drop themselves in it without an exit plan. Having made long-term pledges on future council tax rises then it is unlikely they had no clues about a solution.

Did they finally have a commitment from the Executive to seal Capital city status as Labour had promised, bearing in mind the authority receives 245 less per head of the population in grant aid than the Scottish average?

Labour may have been blown out of power at Holyrood but perhaps some comfort can be taken that there now appears to be broad agreement from the Liberal Democrats, Labour and even First Minister Alex Salmond that there is a need to recognise the special role that the Capital plays in the creation of wealth for the whole country. And this may also be the most opportune time to press the case once again for the retention of some of the millions of pounds of business rates that are sucked out of the city to benefit other parts of the country.

Without knowing what answers Labour had up its sleeve, it is difficult at this stage to know where blame should lie. Several factors such as an education overspend and the requirements of meeting obligations on backdated equal pay claims have conspired to twist the figures. But the fact remains that if they are in some way culpable they should have to explain their conduct as the result could yet be a massive hike in council tax next year.