Madam Mayor a qualified audit report is a significant event. A qualified audit report in any major
business would cause heads to roll. A qualified audit report two years running would be followed by
the resignation of the entire board. There are of course differences between business and councils.
We have 2 audit reports. Firstly the technical accounts preparation was good. When I joined this
council there were over 50 errors in the draft accounts, some of them major. This year there were
no major errors. I congratulate the accounts team. However as a council we also have an audit
report on whether we are obtaining value for money – whether the council is well run – and that is
where the auditor has qualified her opinion.
I am disappointed that this motion won’t be debated today. The auditor said that the council should
be and be seen to be open and transparent in its decision making. Oh dear.
Never mind, I hope for a good debate at Cabinet on how the council addresses the failings identified
by the auditor. There is only one response that I would consider unacceptable and that is to say that
the complacent dismissive response that this is a legacy issue that has already been dealt with. That
is the response we had last year from the Conservatives and yet the value for money opinion has
been qualified again this year. Again the response is complacent. The Council issued a press release
in response to a qualified audit report headed ‘Auditor Gives Seal of Approval’. Well if your ambition
is to waste money and duck difficult decisions then you have the auditor’s seal of approval.
That is not to deny that some progress has been made since the new Portfolio Holder for Finance
took over. I do accept that he inherited a mess and has made some improvements, but he was
starting from a position where budgets were routinely missed by a significant margin. It is an
improvement that the 2012/13 final outturn was close to budget. However, as the auditor has
highlighted that it NOT because the budget was followed but because unbudgeted remedial cuts
were made during the year to make up for budget overspends. As the auditor has highlighted, such
unplanned in year cuts are wasteful and may not give value for money. The culture in some parts
of this organisation is to rush from one money saving idea to the next and implement it yesterday
without going through the proper processes. What we should actually be doing is taking the difficult
decisions during the budget setting process, setting a realistic budget and then sticking to it.
There are 3 major issues that the auditor raised that I would like to see addressed when this comes
1) procurement was again identified as a weakness. The recently appointed procurement
consultants have identified £1.8m of savings. Put another way we have been wasting £1.8m
2) difficult decisions need to be taken. We all know that central government is forcing local
government to make major cuts. We need to take those difficult decisions in an open and
transparent manner and allow public scrutiny of those decisions
3) Finally we need to improve our budget setting process and not rely on knee-jerk in year cuts
to save money