Tuesday, October 27, 2009

Finance Committee today ...

Substituted for my colleague, Donald Wilson, on the Finance Committee (agenda here) this morning ... the meeting lasted from 10am through to 2.30pm :-(

... I think Donald may have known something I didn't :-((

More seriously - two significant issues dominated the vast bulk of the time:

  1. the report on the award of contracts for the provision of Care and Support Services - here
  2. the report on the Council's 'Long Term Financial Plan' - here

On the former, the report was (on division) referred to the upcoming Full Council Meeting on the 19th November; and I have to say in my 10-years as a Councillor I've rarely seen professional Officers look so uncomfortable trying to defend a policy issue.

After 2 powerful deputations, the subsequent two-and-a-half hours of questioning Officers failed to convince almost any of the Opposition Politicians present that what is happening could not be handled a lot more effectively. The suspension of 'Direct Payments' (which isn't even mentioned in the report!) seemed to be the main point-of-contention, but it underlies a serious disquiet amongst users with the whole process of contracting-out such services - which are being provided to the most vulnerable in our City.

And, despite repeated denials, it still appears to me that 'Direct Payments' have been suspended for one reason - and one reason only - because if they hadn't been, then the contracts which are about to be awarded (if the Administration get their way on the 19th?) would not be viable in terms of scale and/or financially?

There's a lot more to come on this - of that I'm sure.

On the second issue --- I've posted at length on the current budgetary pressures facing us all, but most recently here and here.

In essence, I've been trying to get across the point that yes the budgetary pressures are indeed very real but that INCOME is still increasing and the main problem is actually EXPENDITURE.

And, despite all the negative language, what this report proves is that City of Edinburgh Council funding is going up and the main problem is the gap between that increasing funding and the levels of increasing expenditure. I don't disagree this is serious - and I don't disagree that solutions for the problem need to be found ... but the problem is not primarily because of income (which is still increasing), it is primarily because of expenditure which is increasing at an even greater rate.

For the last 10-years, that rate of 'expenditure-increase' has been covered by an equally sizeable rate of 'income-increase' - for the next 10-years a similar (and continuing) rate of 'expenditure-increase' isn't being matched by an equivalent rate of 'income-increase' ... but income is still increasing.

Appendix 1a of the report (page 39) shows just that - Aggregate External Finance (AEF: Government grant to Councils) going up year-on-year, but not as fast as the rate of expenditure. It's that divergence which leads to the projected funding gap ... income is still rising but not as fast as expenditure.

There is a huge difference between the problem being one of expenditure - which it primarily is - and the way the whole situation is being portrayed by many who insinuate that everything is down to falling income. Income is not falling - income is rising.

It comes down to this --- you can't blame someone else if the problem is primarily about the rate of your own expenditure ... much easier to accuse others of reducing your income, even if it's just not true.

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