Council's 'vision and leadership' under the spotlight

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council will be one of seven local authorities to be subjected to a 'Best Value' audit this year as part of the annual inspection of its financial systems and accounts.

Audit Scotland, the national public spending watchdog which acts as SBC's external auditors, will charge the council £275,000 for its work at Newtown St Boswells in 2018/19, according to a report which will be considered by the Audit & Scrutiny Committee next week. The auditing fee is up from £270,000 last year.

The annual audit plan reveals details of the preparation of the so-called Best Value Assurance Report (BVAR) as well as outlining the areas of risk and other issues to be examined by the Audit Scotland team.

According to the audit plan: "The [BVAR] work planned in Scottish Borders Council this year will focus on the Council's arrangements for demonstrating Best Value in the following areas: • vision and leadership • partnership and collaborative working • progress with its transformation programme • performance and outcomes • self evaluation and improvement • procurement."

The report to the committee also states: "We aim to add value to the Scottish Borders Council through our external audit work by being constructive and forward looking, by identifying areas for improvement and by recommending and encouraging good practice. In so doing, we intend to help the Scottish Borders Council promote improved standards of governance, better management and decision making and more effective use of resources."

In recent months Borders councillors have voted to spend £9.6 million on the purchase of the Lowood Estate, near Melrose, and to commit a further £16 million so that I-pads can be handed out to hundreds of the region's school pupils. It is not known whether these two multi-million pound projects will form part of the Best Value audit.

Audit Scotland explain in their report that the council implemented a new financial system, Business World, from April 2017. "Although mostly delivered as planned, there were issues with the implementation of the system, as reported by Internal Audit and in our 2017/18 Management Report and 2017/18 Annual Audit Report. An update to the system has taken place during 2018/19. There is a risk that issues reported in 2017/18 have not been addressed and impact on the controls in place over preparation of the 2018/19 annual accounts."

Turning to financial sustainability, the document reports: "The council has a financial strategy covering the 5 year period 2019/20 – 2023/24. This strategy includes the requirement to identify £30.4m of savings over the period of the plan. There is a risk that the council will be unable to manage its budget pressures within available resources, leading to a reduction in the provision of services."

And so far as financial management is concerned the watchdog comments: "The latest financial report for quarter three of 2018/19, reported in February 2019, indicated that there could be an adverse variance at the year end of £1 million, mostly due to pressures in Health & Social Care and Assets & Infrastructure budgets. The report also noted that £16.4 million of savings have been delivered for 2018/19, with £4.7 million of these delivered on a temporary basis. There is a risk that the council will not achieve a balanced year end position and also of future budget overspends if a sustainable budget is not developed timeously."

In a section dealing with EU withdrawal SBC's external auditors say: "There are considerable uncertainties surrounding the implications of EU withdrawal and public bodies should assess the potential impact on their operations and identify specific issues and planned responses.

"We will assess how the council has prepared for EU withdrawal, specifically looking at implications for workforce, finance and regulation. We will also consider how the council responds to any emerging issues after March 2019."