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SCOTS REVIEW COST FAR MORE THAN ESTIMATED

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The Accounts Commission for Scotland has criticised the government for its under-estimate of the costs of local gov...
The Accounts Commission for Scotland has criticised the government for its under-estimate of the costs of local government reorganisation in 1996.

In a report on the last financial year of the former regional and district councils, audit controller Bob Black says one of the major lessons of reorganisation is that greater attention should be paid to forward planning and to projecting costs accurately.

He compares the government's estimate that setting up the new 32-council structure in Scotland would cost£76 million with an estimate of£281m by the Convention of Scottish Local Authorities.

'I offer no view upon the accuracy of the various estimates of the costs of reorganisation, but it is difficult to avoid the general conclusion that the actual costs were significantly greater than the estimates provided for by the Scottish Office,' Mr Black says.

He notes that the Scottish Office, for example, had made no explicit provision for redundancy costs incurred by the outgoing councils in 1995-96. The outgoing councils spent£80m in severance costs that year.

'The net deficit of£78m for the 62 outgoing councils in 1995-96 must be viewed against these severe financial pressures,' Mr Black says.

Outgoing councils had acted responsibly in their management of what amounted to about 10,000 permanent job losses. New councils would otherwise have had to pick up the bill and perhaps make even more staff redundant.

But Mr Black criticises some councils for 'extensive' use of payments in lieu of notice at a cost of around£9.5m.

The Accounts Commission also notes how the outgoing councils were forced to manage an incredibly difficult transition period without many key staff at a senior level, since some had been appointed to senior posts in new shadow councils and others had opted for retirement.

'I have the clear impression that the loss of this expertise and resource added significantly to the problems of the outgoing councils in maintaining the control environment right up to the last day,' Mr Black says.

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