Councillors ‘need to better informed about borrowing’

Written by Tom Freeman on 19 March 2015 in News

Report for Audit Scotland suggests council borrowing is not for long-term

Local authority borrowing has not been adequately scrutinised in some parts of Scotland because councillors have not had the clear information to make informed decisions, a new Accounts Commission report has suggested.

Although councils are following the relevant codes of practice in terms of the affordability of borrowing in the short-term, they are not always providing evidence of it in the long-term, the report found.

If governance are to be solid, councillors need to be trained how to scrutinise the plans, it said.

Douglas Sinclair, chair of the Accounts Commission, said: "This is a highly complex technical area. Councillors don't need to know every detail but they do need to know enough to ask the right questions. This is a critical part of council business which requires close and effective scrutiny, particularly in times like this when budgets are so tight.

"We hope this report will help councillors and officers make improvements through clearer information and wider analysis of options so that they can be confident that their borrowing policies deliver best value in the longer term."

Scotland’s 32 councils have a total debt of £14.8bn, including £2.7bn from Public Private Partnerships.

Scottish Conservative local government spokesman Cameron Buchanan said the report made “worrying reading” and was a warning to councils over borrowing levels.

“As demand for services increase, local authorities need to look at how long-term their financial plans actually are. The Scottish Conservatives are currently setting up a commission to look into the issue of how councils are funded, and we agree that a much wider debate is well overdue,” he said.

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