By David Scott in Edinburgh
23 February 2011
Councils in Scotland face a multibillion-pound ‘dangling debit’ that will affect the next generation, MSPs have been told.
Giving evidence to the Scottish Parliament’s local government and communities committee today, John Baillie, chair of the Accounts Commission for Scotland, highlighted a number of areas where a huge backlog of expenditure had built up.
He was asked whether councils were in a position to deal with the serious budget problems facing them over the next year.
Baillie said: ‘The next year is, of course, important. But what I fear is what I refer to sometimes as the dangling debit for the medium to long term and for the next generation.’
The debit includes a £2.25bn backlog on roads, which is rising due to the severe winter weather this year; a property repairs backlog of just under £2bn; council borrowing to fund revenue spending on equal pay and single status; and a pensions liability that has risen from £3.8bn to £9bn.
Baillie added: ‘These all aggregate to a sizeable sum of money that somehow the next generation and perhaps some of us too are going to have to face and pay for in some way.
‘I do fear that councils are going to lose a lot of their flexibility through a need to have to do something about these things.’
The Accounts Commission chair was giving evidence to the committee on the commission’s report, An overview of local government in Scotland 2010, published on January 28.
Baillie was asked by the MSPs whether the commission was satisfied that councils were dealing appropriately with the risks facing them, such as pensions and equal pay liabilities.
He said: ‘There has been an improvement but we are not satisfied yet. The better performing councils are doing the right thing, others are lagging behind.’
Controller of audit Fraser McKinlay said he believed the number of ‘high risk’ councils was decreasing, a trend that was to be welcomed.
Processes and structures were improving and councils were focusing more on outcomes and working with partners. But he added: ‘There is still a long way to go and it is still very patchy.’
