DOUG COLLIE analyses council's annual accounts
The number and cost of exit packages for staff leaving Scottish Borders Council increased by 77.5% and 356% respectively in 2015/16 while 'savings' on frontline services added up to £7.8 million.
Those are just two of the contrasting financial trends included in SBC's annual accounts which were posted on the local authority's website at the weekend.
A total of 71 council workers were allowed to leave their jobs early compared to 40 in 2014/15. And the cost of those severance deals - SBC maintains each leaver represents substantial savings for the wage bill - totalled £2,234,000, up from expenditure amounting to £626,000 in the previous twelve month period.
One of the packages was worth £174,190 while two others exceeded £100,000 each and cost the local authority £261,880.
Despite repeated claims that the council tax freeze was making life nigh impossible for local government service delivery, and there was no fat left to cut from budgets, SBC's actual revenue spending outturn in the financial year 2015/16 came to £260.2 million, representing a net under spend of £1.284 million.
There was also an under spend of £800,000 on the £45 million capital budget. All of that means at March 31st this year the council has a General Fund Reserve Balance of £23.2 million, an increase of no less than £4.2 million from the 2015 balance of £19 million.
The accounts show that overall, savings of £7.825 million were delivered over the year.
According to the 111-page document: "The operating environment for the Council continues to be very challenging with financial and economic influences such as increasing demands on services, reducing Scottish Government funding, low interest rates and cost pressures from pay and price inflation all affecting the Council's finances. The Council, despite these challenges, remains financially sound and well placed to serve the people of the Scottish Borders in the future".
However, the document also sets out the authority's level of external debt and its onerous PFI [Private Finance Initiative] commitments over the coming 25 years. The costly PFI deal relates to the provision of three new secondary schools at Eyemouth, Duns and Earlston.
The Council's external debt stands at £175 million with no additional loans added to the portfolio in 2015/16. The average rate of interest paid on outstanding external debt was 6.5%. Interest payments on loans added up to £12.320 million, an increase on the 2014/15 figure of £11.806 million.
PFI payments accounted for £8.488 million last year. The total payable over 25 years will be £245.432 million, including interest of £37.428 million. On the face of it the Borders PFI arrangements do not represent value for money.
The accounts are bulging with lists of achievements and "Priorities for the Future". It is interesting to note that priorities in the section entitled Encouraging Sustainable Economic Growth includes the following statement: "Deliver the actions in the Borders Railway Blueprint, including a Central Borders Business Park, Great Tapestry of Scotland building, and inward investment activity".
It seems the tapestry project remains near the top of the SBC agenda despite doubts about the business case and widespread opposition from many council taxpayers.
Several contingent liabilities are built into the accounts. The document states: "There has been a European Court of Justice ruling relating to workers' annual leave payment entitlement. The financial implications of this judgement for Scottish Borders Council are unclear at present and therefore the Council, in agreement with our external auditors, have included this as a contingent liability in this years' annual accounts".
It is explained that the Council has agreed to act as guarantor for SB Cares and Live Borders - two arms length organisations set up by the local authority - with regards to their admission to the SBC Pension Fund. Should either of those entities be unable to meet their pension obligations the Council as guarantor would be liable to do so.
The accounts also show that during the year a claim was lodged against Capita PLC by Dumfries & Galloway Council on behalf of itself and SBC for additional expenditure incurred by both councils due to the delay in the rollout of broadband network and ICT infrastructure across the two regions.
One growth area worth mentioning is the amount spent on salaries for top earning employees, a budget which increased by 9.9% from £1,061,646 in 2014/2015 to £1,167,294 last year.The total remuneration for executives receiving more than £100,000 reads as follows:
Tracey Logan, chief executive - £127,437, including £1,092 for balance of counting officer fee for the Scottish independence referendum in 2014 and £2,784 for returning officer fee for the 2015 General Election.
Philip Barr, deputy chief executive - £20,960 + £83,840 paid by SB Cares for 80% secondment; Jeanette McDiarmid, deputy chief executive - £103,031.
Rob Dickson, corporate programme & services director - £111,251, including £2,276 for depute local returning officer fee for 2015 General Election. Compensation payments also made for annual leave not able to be taken due to emergency planning commitments.