Aberdeen City Council findings – podcast transcript

Anne:  This is Anne McCubbin here to talk to John Baillie, Chair of the Accounts Commission about the Commission’s findings on Best Value at Aberdeen City Council. John, first of all could you tell us a bit about the background, why there was a hearing up in Aberdeen and so on?

John:  As part of its normal cycle of Best Value audits the Commission reviewed the Controller of Audit’s report sent to us on Aberdeen City Council in mid-March and we discussed the details of that report with her then.  There was a general view around the table that the concerns arising from out review of that report were serious enough to warrant wanting to go to talk to Aberdeen City Council in a public hearing to understand better why it was that the financial position was as reported by the Controller of Audit and why it had taken them so long to achieve their own vision for the area, this vision having been established at the turn of the Millennium.  

Anne:  So the hearing took place a couple of weeks ago and since then you’ve been compiling evidence and now produced findings.  What do those findings say?

John:  Yes, we have a number of key findings.  These include the concern we have about the organisational structure for the management of the city council. We think it’s too complicated and needs simplifying.  

We also think that the staff of Aberdeen City Council need to be better engaged in the process.  There has been a failure to engage the employees in the changes involved in trying to turn Aberdeen into a city that delivers Best Value services for its people.  

Linked to that the problem has arisen with the major services of education and social work which, frankly, are just not delivering the standard of quality that Aberdeen city expects and its people expects and there have been very critical reports by Her Majesty’s Inspector of Education and the Social Work Inspection Agency.  

These are all of a sufficient scale to make the collective position very serious but if you add to it the predicament that Aberdeen City Council finds itself in with the finances in that the last three years have had actual expenditure significantly in excess of budget and the reserves are diminishing. 

You can see that they need to monitor finances very closely, probably on a daily or weekly basis, and make sure that the actual expenditure in the future does not exceed the budgeted expenditure. So with all of that happening at one and the same time we think the council does not currently have the capacity to deal with this and remedy the position.

Anne:  So what are your recommendations?

John:  We’re recommending a number of steps.  Firstly the council needs to recruit immediately an experienced chief executive.  

The second thing is that the council needs to secure external assistance from peers to assist it in implementing the changes and turning round the council.  Third thing is that in order to ensure the successful implementation of an improvement plan it would be useful if the council could establish an all-party leadership board for that specific purpose.  

The next thing we want to see is a review of the organisational structure which frankly is too complicated and is getting in the way of delivery of proper service.  It needs simplified and it needs to secure the enthusiastic acceptance of employees of the council – currently that is not secured.  

Next thing is in view of the rather precarious state of the finances of the council they need to employ on some form of consultancy someone to help them monitor their actual expenditure against their budget.  It is critical that actual expenditure should not exceed budget.  

Next we need more effective governance arrangements to take the place of one or two slippages in governance and scrutiny matters just now.  These would include the appointment of one of the opposition party members to lead the scrutiny committee or the scrutiny arrangements.  

And then finally we believe that all significant property transactions should be signed off by both the Chief Financial Officer and by the Monitoring Officer this would ensure the appropriate governance and accountability over these significant matters.

Anne: So within those recommendations you’re calling for external support – an independent financial advisor being one of them.  Is there anything the council should keep in mind when appointing these people?  Who should they approach and what should they be looking for?

John: The essential qualification is hard-bitten experience in local government.  This is not a job for theory this is a job for those who can do and deliver who probably have had their hands dirty elsewhere in local government. 

The local government finance expert for example falls into just that category, somebody who’s tough enough to advise actual expenditure being curtailed so that it falls within budget.  

And likewise those who are advising the council on structures should have a depth of experience that enables them to have credibility and authority.

Anne: So what happens next?  Both from your point of view and are there any consequences aren’t taken up by the council?

John:  By law the council has three months to consider our findings and recommendations and then whether to implement them.  What we are saying is that if they decide that they do not wish to implement our recommendations we believe that the relevant ministers should consider this and take whatever action those ministers think appropriate.  

As for our own continued involvement we have given the council 12 months to address these matters and we’ll revisit in that time using Audit Scotland to do so we’ll then take a view at that time. 

As well as that, of course, we have the very frequent monitoring that we need from the external auditor whom we expect to be sitting in on the budgetary control meetings and reviewing all relevant documentation as the year goes on.  If there is any chance of the actual expenditure exceeding budget then we should know fairly immediately thereafter.
Anne: John thanks very much.