Aberdeen called to account

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Auditors have told Aberdeen City Council to appoint an outside expert to oversee its finances after public hearings last month revealed the council's reserves were nearly exhausted.

Officials from Scotland's Accounts Commission grilled leader Kath Dean (Lib Dem) and chief executive Douglas Paterson over what auditors had called a "precarious" financial situation (LGC, 15 May).

Aberdeen blamed its plight on historic high social services spending and lack of staff co-operation with new ways of working.

The commission said Aberdeen faced "extremely serious" financial challenges but still lacked "a full appreciation of the seriousness of its current circumstances", even though it had only £3m in reserves.

Its report said Aberdeen had spent over budget for three years, and "given the previous record of failure to meet savings targets, we cannot have confidence that these savings will be delivered".

Mr Paterson announced his early retirement last month amid controversy over a £27m cuts package (LGC, 15 May), a move the commission said created "an immediate opportunity for new leadership at management level". 

But the report added: "We do not believe that the council currently has the capacity to carry forward the changes that are needed whilst managing its financial position and budget.

"The council [should] secure appropriate external assistance, including from an expert in local government finance."

Commission members urged the Scottish Government to intervene if Aberdeen failed to appoint such an expert.

They also said highly critical education and social services inspections made them doubt the council's conviction that its organisational structure "is fit for purpose", and rejected its claim that a "fundamental morale problem" among staff was due to a culture of non-compliance.

"It seems to us that there has been a failure to engage with employees in the changes which have taken place or which have been attempted," they said.

A council statement said Aberdeen was "minded to accept" the commission's recommendations, and was "more than happy" to appoint an external finance expert.