Thursday, 15 March 2012

Council Debt - Easy Answers

The practice of submitting questions to Council meetings to be answered by Convenors has been around for a while. We introduced it in 2003, I think. Normally opposition members seek to elicit information that they hope will be useful in debate or is pertinent to a local issue. When an Administration Councillor asks a question it can be assumed that it has been "planted" to give the Convenor the opportunity to showboat or prove a point. Therefore I was intrigued to see a question submitted to today's Council meeting from Cllr Tim McKay, LibDem colleague of Phil Wheeler, Convenor of Finance, about Council debt. the question and answer are as follows -
What assurance can the Convener give that the Council’s current level of
indebtedness is reasonable and manageable?

Council sets its capital expenditure plans in accordance with the prudential 
code, a framework introduced by CIPFA in 2004-05. The objectives of the 
prudential code are to provide a framework for local authority capital finance 
that will ensure for individual local authorities that:
  1. capital expenditure plans are affordable;
  2. all external borrowing and other long-term liabilities are within prudent and 
    sustainable levels; and
  3. treasury management decisions are taken in accordance with professional
    good practice.
Oh well, that's okay then. £1.5bn of debt, which costs £110m / year (every year) to service, and growing by the day. That's £3000 of debt for every man, woman and child in Edinburgh, the highest in Scotland, dealt with by 3 bullet points. No figures (perhaps for obvious reasons) no analysis or projections, just "Trust us, we know what we're doing".

Why am I not reassured ?

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