Political split over £7 million debt write-off

Hamish Hutchinson • Published 4 Nov 2009 12:23 6 Comments

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A POLITICAL row has divided Clackmannanshire Council with SNP councillors accusing the Labour administration of financial mismanagement.

The SNP say that by writing off £7million of debt Labour are putting the council in a perilous position financially and putting services and jobs at risk.

However, council leader Janet Cadenhead told the Advertiser that the £7 million debt is from a period of more than 20 years - and she stressed it will have no impact on the council's budget for this year.

The concerns were raised by the SNP following a recent meeting of the council's Scrutiny Committee and the issuing of the Council's Statement of Accounts.

SNP councillor Gary Womersley said, "Once the public add up these bad debts of £7 million pounds, and an unbudgeted £500,000 for water charges and business rates for the new schools, this would require the Labour administration to increase Council Tax by 37.5 per cent to meet these.

"We have to remember too that Labour chose to finance the schools, without any public mandate, by increasing Council Tax by 12 per cent.

"Add to that other procurement issues such as further costs and Labour's financial mismanagement would be costing everyone a 70 per cent minimum in Council Tax increases.

"Labour can hide behind people struggling to decipher the Council Accounts, but when presented in terms that everyone can understand, perhaps all voters and staff can see how bad the finances have become.

"This certainly does not augur well - the Labour Administration and their lack of financial prudence are basically putting many jobs in peril.

"We have Single Status and Equal Pay coming up, yet have no reserves to pay for these.

"I just hope that Labour are not looking towards redundancies to get them out of the financial mess that they have crashed into - that would be completely indefensible."

Mr Womersley's colleague Mark English claimed that despite the Labour group's reluctance for external scrutiny the council's chief executive Angela Leitch has ordered a review of current practices in the council's finance department by another local authority.

Mr English said, "There has been criticism, not just by the SNP, of the current culture within the Labour Administration and the lack of transparency and openness within the council. Perhaps now we know the reason why. With the greater autonomy and funding given by the Scottish Government, comes greater responsibility and accountability. Unfortunately this Labour administration have found themselves to be totally failing in that regard."

However, council leader Janet Cadenhead hit back at the SNP's claims, denying there had been financial mismanagement on the part of the Labour administration and insisted that there was nothing untoward with a neighbouring local authority carrying out an audit.

She said, "Apart from a few categories, we can't pursue debt after five years whether it is due to legal reasons or that it would cost us too much to try to recover, and we should be writing it off.

"Some of that £7 million goes back to 1983, so this is over a huge number of years and there is no way £7 million is missing from our current revenue - and we are not increasing council tax.

"This is money that we are never going to be able to collect and no organisation, no matter who they are, is ever going to be able to collect 100 per cent of its debt.

"As far as the business rates for the new schools are concerned, we underestimated how much it would cost, although we still think we are being charged too much and are appealing.

"It is quite normal for another local authority to look at the finances, or other area of council business, and the SNP were told by the chief executive that this was happening.

"When it comes to the council's reserves, when Labour took over from the SNP there were absolutely no reserves. This council has now built up £5 million worth of reserves, knowing single status, equal pay and all the other things that are coming our way."

Clackmannanshire Council's chief executive Angela Leitch added, "Firstly, the write-off of bad debt was something that was completed as part of the budget process for 2008/09 and reported to a meeting of the council five months ago.

"It had been several years since old debt had been written off and while provision had been made in each successive budget, a formal write off had not taken place. This will be something that will happen more frequently in future.

"Even with strict management of debt, there is always an element of income that organisations fail to recover and we have and will continue to make provision for this each year.

"As regards the rates and water issues that have been raised, these were reported to the Scrutiny Committee on 22 October. The non-domestic rates are higher than we had anticipated and we have lodged an appeal with the regional assessor.

"Water charges were also higher than we had forecast but this has now been resolved.

"It is true that I have asked for an independent view of our finances, especially in the light of the significant pressure local authority budgets will experience in future years.

"The single status project, that is, the introduction of new pay and grading arrangements for our workforce, is a top priority.

"We intend to advise our employees of the details by the end of December and implement the new scheme by the beginning of April 2010."

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kevin
Unregistered User
Nov 5, 14:30
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we need to get rid of labour, they are utterly hopeless, they are so bad that people are actually going out and voting for scum like the BNP, this is not good, not good at all. if you look into the BNP you will see that they have strong links to nazism.

i hope all involved in this mess are promptly sacked

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Franklyspeaking
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Nov 7, 11:15
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Kevin raises a pertinent point about the emergence of the BNP in times of political strife, the labour group on Clackmannanshire Council are simply adding the fuel to such a fire of strife.

What really puzzles me, is the 'Consensual politics' assertion made by Janet Cadenhead when she was elevated to the esteemed position of Council Leader. An examination of what has happened since her election would be appropriate in the circumstances.

Ms Cadenhead -aided by political lightweights in the shape of Alistair Campbell (conservative) and John Biggam (Lib-dem)- has presided over a minority group of politicians who, on reflection, could be described as more in-tune with their greedy, money grabbing counterparts in Westiminster, than they are with the poor, needy and disadvantaged of our wee county.

There has been absolutely NO consensus between labour and the SNP during her term in office, instead, she ensures the labour party always achieves its aims by throwing the likes of Campbell and Biggam some scraps to keep them on board with the labour way of thinking and thus force through her illogical and unreasonable policies. If this fails then they can always rely on that upstanding stalwart of local democracy, Provost Derek Stewart who, despite holding an A-political position i.e. non-partisan, has ALWAYS saw fit to cast his deciding vote in council, in favour of his labour colleagues.

It therefore should come as no surprise to anyone with an interest in local politics, that what we have in Clackmannanshire, is nothing short of a despotic, self-centred, crony promoting mob who are more in tune with the wishes,desires and aspirations of certain noxious local entreprenurial individuals than they are with you and I. To try to add spin to the fact that £7 million has been written off, merely emphasises the contempt to which this woman holds the people of Clackmannanshire in!

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Alistair
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Nov 7, 12:30
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Wow, pretty stirring stuff from frankly speaking.

Stirring but accurate in my opinion.

It is about time party politics were removed entirely from local government and we had more 'independent' councillors like Craig Holden, albeit even he is a former party follower whose sympathies no doubt still extend to the party he once courted.

Hopefully in 2011 we will see more 'independent' councillors in the chamber, enough at least to hold the balance of power and rid Clacks of the party-political system we have endured for the past umpteen decades.

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Grace
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Nov 8, 11:18
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Hellornfrom the outside it certainly appears the council is not managing our public money in the most efficient manner. do we really need all the highly paid executives running such a small council as well as some of the stranger jobs they have created like artists in residence, walking officers and so on and so forth? to me the answer to any financial dilemma the council is facing is simple, cut the cloth to fit, for example, does a county the size of this really need leisure facilities in all of its villages? the council has been good at creating things such as the dumyat dollar and tullibody leisure centers but when cash is short the questions about the use of these facilities must surely be questioned. there is also a question overluxuries such as free car parking in alloa e.g. can the council really afford such luxuties?

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Jimmy Neebur
Unregistered User
Nov 12, 19:50
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Interesting comments... but afair we start just bulldozing the Wee County, whit aboot the point of this story. £7MILLION being written aff!!!!!! How on earth did this happen?!? Mibbae the cooncil should employ a heavy mob tae go roond knocking on doors so folk pay their cooncil tax. This nicely nicely approach of keeping emptying shops bins when they dinnae pay is just stupid and a wee letter every now and then isnae gonna get folk tae pay up. Take em tae court and take em for every penny they owe tae send oot a message tae the rest of the livin-on-tic neeburs.

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bob
Unregistered User
Nov 22, 07:49
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7 million or 9 million thats the question.

surely if you dont write-off 7 million ye woodny have a 9 million hole.

three folk will suffer herernthe workers redundant

the tax payer nae services

the chief exec as above. you should check oot this wan on google typical clacks amatur appointment

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