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The truths they don't want you to read....

Saturday, February 12, 2011

How financing works...

Not in the real world, of course, but in a sort of parallel financial universe....

Road works in North Uist were scheduled as part of the overall budget strategy.

The road works were cancelled (or postponed) resulting in an underspend on the budget of £98,000.

The underspend was taken back into the central budget, as a "saving".

The COU (aka DSO) were given the underspend of £98,000 to fund 4 redundancies, as the COU was performing so badly, and couldn't afford the money to either continue to employ the staff, nor to sack them.

So what was being claimed as a saving was actually nothing more than delaying approved spending, and was used to fund another item of expenditure in a department that was overspending because it was out of financial control.

It's a bit like you skipping having some urgent car maintenance done, using the money to buy a painting, and telling the bank manager you are being prudent.


BTW: Does anyone know - even a Councillor - just how much the overall HR Policy 'savings' are actually costing the Council?  I'm told that much of the expenditure is hidden in 'consultants', but has anyone actually done a value for money calculation on anything other than a fag-packet?

6 comments:

Anonymous said...

Forgive my innocence. I can appreciate that what you describe is lousy accounting practice and not in line with democratic decision making.

But is it actually legal?

Dr Evadne said...

Snort...

I too in my simplistic understanding and vague interest in such matters believe that the cash they get allocated from our road tax gets spent on things other than roads. I think the evidence for this is patently obvious. Is it really that impossible for them to cancel all junkets, 'courses', award ceremonies, lunches, jollies, twinning, the vast number of non-jobs (HR), and so on? It would increase popular regard for them, slightly, and enable them to divert money to services.
Thank you.E

Tony Giles said...

This isn't that uncommon in the real world of business as well, it's not peculiar to councils.

Obviously this is just pushing the issue into next year (or whenever the work is done) but that's not an issue as you've achieved your current goal. It doesn't matter if (using your analogy) the car blows up next year as you're not being measured on it now.

It's a failing in how budgets and success is measured not in the accountancy practices themselves.

Anonymous said...

My issue with this is that it is "funding redundancies". Does that mean that this money which was supposed to be spent improving the roads in Uist has actually been used to line the already fat cat council workers pockets so that they can retire in even more luxury?

Anonymous said...

Maybe the COU would have money in the bank if they cut down on flexy time giving under worked and over paid fat cat managers well over 20 days paid holidays on top of the 40 days they already get or maybe if they stopped hiring in 7 or 8 extra workers from sub contractors and made proper use of there own men

Anonymous said...

An observation of contract work being undertaken. I don't know who is contracted to do the Nicolson School grounds work, but whilst I spent an energetic hour or so in the Fitness Room at the Sports Centre I observed a very relaxed operative with a few tools weeding the Shot Putt area of the sports field just outside the Fitness Room window.

My initial amusement at the speed that the chap was working at somewhere between slow and comatose quickly gave way to questions. Why was he weeding the Shot Putt area it surely won’t be needed until the end of the summer term? And why on earth wasn’t weed killer being used? There must be a child eco friendly one suitable for this sort of situation at a fraction of the cost of the chap doing the work, who clearly looked like he was going to take all week to complete the task, and of course the weeds will be back if he inadvertently misses a few so job creation at its best. I’m back Wednesday perhaps I’ll report progress.