Aberdeen sold assets too cheaply

Embattled Aberdeen City Council has called in the police to investigate £5m of losses on its property disposals programme.

The losses have been uncovered by an Audit Scotland report into the council's property services department, which discovered that officers had sold land and buildings too cheaply. Grampian Police have been called in by the council, although auditors did not find evidence of fraud.

The council faces a rare public hearing this month by Scotland's Accounts Commission into a crisis that has resulted in £27m of cuts (LGC, 3 April).

This hearing will also examine audit controller Caroline Gardner's findings on the property disposals, where she found "ineffective management" and failures to keep councillors informed and a lack of professional care.

Auditors examined 26 sales, finding 10 where information was withheld from councillors and 11 that lacked valuation evidence for the sale price.

One building, Carden House, was sold for less than half its true value of £1.25m. Councillors were told the buyer was a primary care trust, when it was a property developer.

"The external auditors were unable to conclude whether the errors in reporting represent naivety, incompetence or a deliberate attempt to mislead," Ms Gardner said.

Chief executive Douglas Paterson said: "This report draws attention to serious deficiencies… A series of actions have already been put in place to address all the shortcomings identified."