Borrowing/Treasury Management – podcast transcript 
I’m here with Douglas Sinclair, chair of the Accounts Commission, to talk about a report on Borrowing and Treasury Management
Douglas, can you tell me what this report is about…
Yes, it is a look at how Scotland’s councils are performing  in two critical areas of their business – firstly borrowing, borrowing money  to invest in key projects like schools and roads. And secondly, treasury management – a big title but in essence what it means is how they manage their day to day cash flows – money coming and money going out. 
So what have you found?
Well councils’ debt from traditional borrowing now stands at just over 12 billion pounds and has changed little over the last three years although just over half of the 32 councils in Scotland have increased borrowing over the last decade.

But on top of this they also have debt from other forms of borrowing like Public Private Partnerships which takes the debt total to 14.8 billion pounds.

So what does this mean for the public?

Well, it matters a great deal because these are huge sums of money and public does need to know that it is being spent wisely – getting the best value and funding for important projects which benefit their communities and that cash flows are managed efficiently on their behalf.

As you’d expect, councils have developed strategies to suit their own local priorities and needs. Links between capital investment and managing cash flows have been strengthened over recent years. And that’s good.

Also councils are following the principles of the relevant codes of practice in showing short- term affordability, but they are not always highlighting the strategic importance of borrowing and treasury management or providing evidence of long-term affordability and sustainability.

And that really is the area they need to look at more closely.

So what do you want to see happen next?

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. 

So scrutiny does need to be improved through better training for councillors, cutting out jargon to make reports clearer, and ensuring governance arrangements are adequate.

So 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 for their council tax payers.

Douglas, thank you very much.