Scilly’s Finance Chief Warns Of ‘Severe Consequences’ Over Financial Position

Director of Finance, Peter Lawrence-Roberts

Director of Finance, Peter Lawrence-Roberts

The Council of the Isles of Scilly’s director of finance has said the Authority is in a, “very difficult” financial position and that, “there will be very severe consequences if swift and decisive corrective action is not taken.”

Peter Lawrence-Roberts made the stark warning in a report that was due to be debated in Full Council last Thursday.

But there’s confusion about why such an important paper, listed as item 6a in the agenda, was not debated publicly by the members present.

Each councillor that Radio Scilly has spoken to has given a different reason.

In the paper, Mr Lawrence-Roberts, who was absent from the meeting on sick leave, warns that the Council is spending in an unsustainable manner, and while many senior council members have been calling for severe cuts to budgets, he says departmental growth bids are being accepted that increase spending rather than reduce it.

Recent finance papers show an overall increase in the budget of £803,000 for 2013/14.

He said this year the Council will overspend by £764,000 over the base budget originally set. And in 2013/14 this figure will increase by a further £682,000, giving a £1.4m increase in two years over the original predicted budget.

“This is a huge figure which needs to be addressed urgently. Council spending at these levels is simply unsustainable,” says Peter.

More worryingly, the council’s reserves, which stood at £2.1m on 1st April 2012 will be in deficit by March 2016. It is illegal for a local authority to set an unbalanced budget.

Mr Lawrence-Roberts gives a number of options to councillors to stem the drain of cash, including a recruitment freeze and examining posts that were previously grant-funded but had now been drawn onto the Authority’s payroll.

He also want’s to review services to make sure they’re sustainable and provided at an appropriate level as well as re-procuring some externally to “release savings.”

He cites the example of the Council’s Sports, Fitness and Leisure services, which are going to add £121,000 to costs over the next two years.

The report states that in the four years to December 2012, headcount increased by 28.3%, at a time when every other council in the country is having to cut costs to ensure financial survival.

“We are in the same position,” he warns.

It is unclear why members did not debate the paper at the Full Council meeting. Radio Scilly contacted several members after the meeting to find out.

Cllr Christine Savill, who was the only councillor to raise the issue of the rapidly diminishing reserves, during a separate item on Council Tax, agreed there was very little debate.

She said members decided to go with the recommendation of the P&R committee, adding, “I certainly do not think that members have tried to “bury bad news” but acknowledge the current economic climate Scilly finds itself in and decided to accept a grant and freeze Council Tax for this year.

“I can assure you there was no item/discussion in closed session on the subject of Council Finances,” said Christine.

However, this conflicts with the view of Cllr Gordon Bilsborough, who said the item was first discussed as an excluded item at the P&R meeting on 21st February.

Gordon says an email was sent to all members on 4th March, following the end of the special meeting of the P&R Committee, advising them that the report was being uploaded the public website.

He says his main concern is why members were not warned about these impending deficits before now. “This is a matter which must be explained by the director of finance himself,” says Gordon.

Cllr Dudley Mumford said his understanding was that the paper was not debated due to procedural issues, including the fact that the director of finance and resources was unavailable that day.

At several points during last Thursday’s meeting, proceedings were halted over confusion about the running order and the availability of associated documents.

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