Council's huge spend on 'golden goodbyes'

EXCLUSIVE by EWAN LAMB

There was a 298% increase in the cost of staff exit packages at Scottish Borders Council in 2018/19 with three of the twelve 'golden goodbyes' accounting for £401,000 of taxpayers' cash.

The massive rise in spending to allow employees to leave early is outlined in a set of unaudited accounts which will be considered by members of SBC's Audit & Scrutiny Committee next week.

Figures show £153,699 was spent on just five packages in 2017/18 compared to £613,042 on the dozen packages agreed in the last financial year. Three individuals each received between £100,000 and £150,000 before leaving their jobs.

The highly controversial acquisition of the Lowood Estate, near Melrose - SBC shelled out £11 million including costs - in December does not rate a separate mention in the 124-page accounts document even though a management commentary lists highlights and achievements.

In a foreword to the accounts, council leader Shona Haslam says: "During 2018/19 Scottish Borders Council has achieved significantly higher financial plan savings than ever before whilst maintaining frontline services for communities wherever possible with £16.4 million delivered in year, £11.7 million permanently. Capital investment in the area is also significantly higher than that in 2017/18 with £47.8 million invested in schools, flood protection, roads, lighting and other assets."

Councillor Haslam continues: "Plans for 2019/20 - the launch of a revised 5 years programme of transformation across the Council – called ‘Fit for 2024’. This programme has the aim of delivering a Council that is adaptable, efficient and effective, and one ultimately capable of not only meeting the challenges ahead, but of fully optimising outcomes for the citizens and communities for which it is responsible. During the period from 2013/14 to 2018/19 the Council’s approach to longer term financial planning has delivered savings of £47 million alongside significant improvements in performance."

The report to members says on revenue spending that the actual out turn for the financial year 2018/19 was a revenue expenditure of £257.5 million representing a net under-spend of £1.302 million against the revised budget. But a later section says: “These accounting adjustments result in an overall Deficit on the Provision of Council Services for the year of £11.0 million.”

SBC's outstanding external debt as at 31 March 2019 was £199 million. Additional long term borrowing was undertaken during the year amounting to £10 million, with £8 million of this new borrowing used for the early repayment of two existing loans. Short term borrowing of £5 million outstanding from the 2017/18 year end was repaid in April 2018 with no further requirement for short term borrowing during the 2018/19 year. The average rate of interest paid on outstanding external debt was 4.79%.

A management commentary concludes: "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."

Other noteworthy entries at a glance:

Contingent liabilities

*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 this has been included as a contingent liability in this years` annual accounts.

*Legal action has been raised against the Council in respect of a failure to conclude a land sale transaction. The matter is subject to ongoing process in the Court of Session.

Contingent assets

*During 2016/17 a claim was lodged against Capita Plc by Dumfries and Galloway Council on behalf of itself and Scottish Borders Council for additional expenditure incurred by both Councils due to the delay in the rollout of broadband network and ICT infrastructure across the Scottish Borders and Dumfries and Galloway. This claim is still on-going.

*The European Commission issued a decision which found that European truck manufacturers had engaged in price fixing and other cartel activities over a 14 year period between 1997 and 2011 in relation to trucks over six tonnes. Scottish Borders Council is joining with other Scottish Local Authorities and public bodies to raise legal actions seeking compensation for losses it has suffered as a result of this illegal activity.

*Payments required in 2019/20 in respect of three PPI schools - £10.999 million

*Interest payable on loans in 20/1819 - £14.366 million (up from £11.681 million in 2017/18).

*Number of staff earning more than £50,000 per annum in 2018/19 - 136 (up from 125 in 2017/18).

A notice posted on the council's website advises members of the public how they can object to the annual accounts which are due to be audited by Audit Scotland, the local authority's external auditors, for a fee of £275,000.

The notice states: "Any person interested may object to the accounts or to any part of the accounts by sending their objection in writing, together with a statement of the grounds of the objection, to the appointed auditors, Audit Scotland, 4th Floor, 102 West Port, Edinburgh, EH3 9DN no later than Monday 22nd July, sending a copy of that objection and statement to the Chief Financial Officer at Council Headquarters, Newtown St Boswells, TD6 0SA.

 

"Where any person objects to the accounts the Auditors shall, if requested by that person, or the Council or by any officer of the Council who may be concerned, afford an opportunity of appearing before and being heard by the Auditor with respect to that objection. Any person or officer may appear and be heard personally or by a representative."