Lib Dems accuse Didcot Town Council of financial mismanagement (Wantage and Didcot Liberal Democrats)

Wantage and Didcot Liberal Democrats <info@wantagelibdems.org.uk>

Lib Dems accuse Didcot Town Council of financial mismanagement

July 1, 2010 12:47 PM

David Rouane, Liberal Democrat Town Councillor for Didcot Northbourne

At a meeting earlier this week of Didcot Town Council's Finance Committee, Lib Dem Cllr David Rouane accused the Conservative administration of raising taxes unnecessarily, and of failing to provide the facilities and services which they promised when they set the tax level.

Cllr Rouane's said: "I have asked to be permitted to address the committee because I am worried that, because the report before you is written in the gloriously understated style much loved by auditors, it may lead you to believe that there is nothing to worry about and that it in fact gives a 'clean bill of health'. It does not.

"In sections A, B and C it does say that records are properly kept and that all of the standard controls are in place. The officers are to be congratulated on this. But it is Section D which I want to bring to your attention and in particular the sentence: 'criticism could be levelled at the council in either not spending what they have demanded as council tax or raising tax unnecessarily'.

"This, in my view is one of the most serious criticisms which could be levelled at a public body: that it did not provide the services it had promised even though it had taken the money off the tax payer to do so. I would pick on two examples which indicate two different types of mismanagement:

"Firstly, the Detached Youth Worker. This underspend, and the reason for it that 'no grant application was received' indicates a passive form of financial management. No one was actively managing this budget.

"Secondly, there is the routine carrying forward from one year to the next of unspent budgets. I feel particularly strongly about this because I raised it as an issue during the budgeting process where this committee based its estimates on the previous year's budget rather than on year to date expenditure or a forecast of the present year.

"The natural consequence of this is over budgeting leading to, according to the auditor, savings of £8k - £10k. Why does any of this matter: isn't underspending a good thing? Well, no it isn't.

"Take the Youth Worker example. Because of the passive approach of the relevant committee, and the failure of this committee to police it, fewer services were provided to the young people of the town than was intended by the Council. We don't know what the consequences are for the young people concerned.

"Or look at the carrying forward of underspends and contingencies. Towards the end of last year we told a member of staff that her post was going to be made redundant because of lack of funds. I argued in council that this decision did not need to be made at that time and that we should wait until the budget process and see if there were any savings which could be made to fund the post. We now know that there were: We made someone redundant even though we made a surplus of £75k.

"So, what is to be done? Firstly, the committees, and this committee in particular needs to take a more pro-active approach to financial management. Under Standing Order 56a this committee is charged with the 'administration of the F&GP budget'. You have in your papers a variance report for each of these headings allowing you to do this. But in addition to this, under Standing Order 56b you are also charged with 'the financial administration of the Council' as a whole. The only document you have before you today to allow you to do this is a balance sheet. This is in no way adequate for this task.

"Secondly, the committees need to upskill. Standing Order 35 allows a committee to 'invite any person, whose special knowledge might aid the committee' to join it as a non-voting member. There would be nothing unusual in a Finance Committee co-opting a finance professional onto the committee to aid its decision making. Internal audit is not a burden; it is a valuable exercise but only if we learn from the report."