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The reorganisation of Scottish local government has cost£281m - four times the amount estimated by the Scottish Of...
The reorganisation of Scottish local government has cost £281m - four times the amount estimated by the Scottish Office - a report published today shows.

The report, produced jointly by COSLA and the directors of finance section of CIPFA emphasises that the study was undertaken on a professional basis by practitioners working in councils who are directly involved in accounting for councils' income and expenditure.

'This is in stark contract to the deskbound exercises undertaken by the secretary of state's appointed consultants Touche Ross and officials within the Scottish Office in forecasting reorganisation costs and savings,' the report states.

And it warns that if the government fails to recognise the real costs in next year's finance settlement, there will be cuts in provision of the major services, increases in council tax levels and significant job losses and redundancies.

The £281m, which covers the years 1995 to 1998, includes staff costs - redundancies, compensation payments, etc, IT costs, the costs of the preparation for the change and capital expenditure.

The total Scottish Office provision for reorganisation is £76m - a shortfall of £205m, which equates to an increase in council tax levels of around 17%.

The report particularly highlights staff costs. The Scottish Office provided £43m for 'redundancy costs' while the report shows that actual costs, including redundancies, compensation payments, increased pension costs and detriment payments, was £105m.

The report also looks at the effect of the £410m worth of cut backs which councils have had to make this year and concludes they were necessary because of the under-funding of reorganisation, an inadequate finance settlement and inappropriate assumptions by central government on pay awards.

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