£30 million of reserves in 'cash-strapped' council's coffers

EXCLUSIVE by DOUG COLLIE

"Cash-strapped" Scottish Borders Council ended the last financial year with an under-spend of more than £1.5 million, its reserves broke through the £30 million barrier and the cost of remunerating the authority's team of top officials increased by over 20% in the space of twelve months.

These and many more pieces of financial information are contained in SBC's unaudited accounts for 2019/20 which appeared on the council's website earlier today among the agenda papers for tomorrow's Audit & Scrutiny Committee meeting.

According to the Conservative controlled council's leader Shona Haslam, in a foreward to the accounts, highlights during the last financial year included: "Against a very difficult financial background, the Council has achieved £13.3 million of Financial Plan savings, £9.3 million of which were on a permanent basis; delivered a net under-spend of £1.538 million from a revenue budget of £263.3 million".

Councillor Haslam also points out that SBC delivered Capital Investment of £44.3 million in schools, flood protection, roads, lighting and other assets; undertook a five yearly review of all Common Good & Trust Fund assets; delivered savings in processes and new digital developments in order to protect front line services in the Borders wherever possible.

From 2013/14 to 2019/20 the Council had delivered permanent savings of £55 million alongside significant improvements in performance, she said

The 127-page document displaying the accounts also reveals SBC had as of 31 March 2020 a total Reserves Balance of £30.1 million (£28 million at 31 March 2019) a net increase of £2.1 million during the year.

A section of the report covering senior employees' earnings reflects the council's Corporate Management restructure, readers are told.

In 2018/19 total remuneration paid to top officials stood at £736,373. The amount paid in 2019/20 is recorded as £890,616, a 20.9% difference.

Chief executive Tracey Logan's total remuneration last year was £143,432, according to the accounts, including a fee of £5,422 in her role as returning officer at elections. Her remuneration in 2018/19 was £129,246.

The overall cost of salaries and expenses for the 34 Borders council fell slightly in 2019/20 from £758,000 to £743,000. But those elected members in so-called senior positions, including Cabinet members accounted for £360,419 compared to £337,909 in 2018/19, equivalent to a 6.6% increase in their combined salaries, fees and allowances.

Leader Councillor Haslam's remuneration of £34,944 was an increase from £33,992 while convener David Parker's £26,208 was up from £25,494.

There was a dramatic drop in the sums paid to finance golden goodbyes or exit packages, as the council calls them. In 2019/20 six individuals receive a total of £111,107, well down on the previous year's £613,042 required to fund 12 packages, three of them above £100,000.

The paragraphs outlining the council's loan debts and outstanding payments for three PFI schools always makes for interesting reading. In 2020/21 a PFI payment of £11.457 million will be needed as next year's contribution towards the development of new high schools in Eyemouth, Earlston and Duns, completed some ten years ago.

Total payments for the schools will amount to £260.373 million, including interest of £42.271 million.

Meanwhile actual borrowing from the Public Works Loans Board (PWLB) stood at £167.131 million at March 31st 2020, up from £159.632 million at the close of the previous financial year. When other outstanding loans are taken into account total borrowing stands at £206.628 million (£199.121 million in 2018/19).

A management commentary sets out SBC's debt position. On debt management it says: "The Council continued to maintain an under-borrowed position, this means that the capital financing need was not fully funded by external loan debt and instead internal cash supporting the Council’s reserves, balances and cash flow has continued to be used as a temporary tactical measure.

"This strategy remains both prudent and cost effective in an environment where investment returns are low and counterparty risk is high."

In a section headed  External Debt taxpayers are told: "The Council’s outstanding external debt as at 31 March 2020 was £207 million. Additional long term borrowing was undertaken during the year amounting to £7.5 million, with no requirement for short term borrowing during the 2019/20 year. The average rate of interest paid on outstanding external debt was 4.67%."

SBC remains by far the region's largest employer. The latest statistics show it has a total of 4,992 employees - 1,295 male and 3,697 female. The workforce breaks down as 2,586 full time and 2,406 part-time staff.

FOOTNOTE: Readers of the accounts book may be able to spot a howler on page four where, included in a profile of the Scottish Borders a population total for the region of 155,510 ("mid-2019 estimate National Records of Scotland") is included. The quoted figure is 40,000 higher than the actual estimate of 115,510 which can be found on the NRS website..