Auditors Concerned Over ‘Realism’ Of Council’s Future Budgets

town hall 8The Council’s auditors say the Authority’s financial controls are still weak and they’ve failed to put in place realistic plans for an expected 40% cut in government funding in the coming years.

The report, written by auditors from Grant Thornton was presented at last week’s Full Council meeting.

The auditors say the Council’s systems of governance, risk management and operation in 2014/15 were “generally weak” with “considerable room for improvement in many areas.”

And they say even though these issues were raised last year, the majority of the recommendations have still not been addressed.

Earlier this year saw the departure of the Council’s Senior Finance Manager, Laura Roberts, after just seven months in the job.

And at the recent Finance, Audit and Scrutiny Committee meeting, newly appointed Senior Finance Manager Ben Barrett said his department was understaffed and there were continuing problems recruiting into two vacant positions

The auditors raised concerns over the ‘realism’ of predicted budgets produced by the Authority for the next three years, which show a 1% increase in Council Tax each year while government funding remains at the same level.

They say the Local Government Association anticipates a cut of 40% to core government funding over the life of the current parliament.

And they say the Council has not been able to provide any evidence to support its view that it will be protected from these cuts.

Auditors corrected a number of errors made in the official 2014/15 accounts, which were passed by councillors in April.

These included incorrect pension and remuneration details for the senior management team and misstatement of claims made by former employees for untaken leave.

Under their ‘Value for Money’ section, the auditors also highlighted a large discrepancy in what the Council planned to use from its cash reserves and what it actually spent.

At the end of March 2014, the accounts showed the reserves stood at £2.02m with no plans to draw on that money.

During last year, councillors approved spending of £900,000 on resurfacing the roads. But budget overspends meant a further £255,000 had to come from reserves. That’s left the Council with just £865,000 in their savings account.

Although passenger numbers were up at the Airport last year, it still made a trading loss of £179,000.

The Water and Sewerage account also showed a loss of £45,000.

30 Responses to Auditors Concerned Over ‘Realism’ Of Council’s Future Budgets

  1. Local Realist October 6, 2015 at 8:56 pm

    It would be a shame for Scilly to loose unitary authority status and it won’t be jeopardised if people will just allow the Chief Executive and Mrs Mompoloki to do their jobs. There is no way I can say this without creating offence but the truth is that the vast majority of Scilly’s Councillors are not up to the job as it is in 2015. Few of them have the outside the box vision and skills required to set policy for an authority that has such a wide portfolio and such legal responsibility as it does now. It is incredible to hear how they waste officers time in meetings as they split hairs over the images or formatting used in council documents or they waste everybodies time asking for clarification on financial figures that they dont even understand. Few councillors have real business skills and running a local authority requires business acumen. I dont think running a business in Scilly which is a closed market with a captive audience and which has a tradition for unofficial monolopy by agreeing not to compete with other businesses develops the skills needed in today’s local authorities. They still pick apart policy documents and cry foul though. The Heart group that was keen to ride on the coattails of alleged malcontent has failed to deliver the transparency and scrutiny it moaned on about and was expected by the electors who supported Heart’s proponents at the ballot box. We need to stop this “there’s no transparency’ sideshow and let the senior leadership team get on with it and without questioning them all the time. Then we will see their results. Theo Leijser and Diana Mompoloki should be given a period of non-interference. 6 months with a promise of no meddling by Councillors who are always trying to throw a spanner in the works. Let them run a technocracy to deliver something which will benefit all islanders in the future. Heres my most powerful example. Belgium functioned well when it was between 2010-11. They operated an entire country for 589 days without an elected government in power. Experts go on with it. I would like our senior leadership team to be able to get on with the job of developing sustainable energy, reducing our bills, changing our economic focus away from tourism to green energy solutions and cyber business. We need them to create more open market housing so more business minded people can move in to Scilly. Their new thinking may bring a refreshing change. New, more driven and entrepreneurial Scillonians would make many Scilly businesses more sustainable. We need new blood and new ideas and not just homes for people already her So please, lay off and let our council experts get on with their masterplan and we will all see the benefits which will be an about-turn in Scilly’s fortunes and economic destiny.

    • Gordon Bilsborough October 6, 2015 at 10:28 pm

      Local Realist. I cannot help thinking you may be either a Council Member or an Officer.
      Please enlighten me. Why hide behind a veil of secrecy? If you want to be taken seriously, please tell us who you are; or have you got something to hide? If you do not reply, I will assume that my suspicions are correct.

    • U R ludicrous October 6, 2015 at 11:33 pm

      Neither real or local, beware of the agent provocateur.

    • Ted October 6, 2015 at 11:52 pm

      You are a council officer and I claim my five pounds.

    • Despairing Local October 7, 2015 at 8:19 am

      I find this particular post rather difficult to believe, as far as I am aware the councillors are the very people who set the direction and policy of the council not officers.
      I find it more than a little disconcerting that you assume that the Chief Executive and Mrs Mompoloki have formulated a master plan independently of our elected members and that they should be left to get on with it.
      Call me old fashioned but I rather like accountable democracy and find the concept of two highly paid employees running the show without input from those elected by us to work for us an unhealthy prospect.
      It is my belief that suggestions of this nature are being brought about not because of the calibre of councillors per se but rather a lack of strong leadership from the Chairman / Vice Chairman and their unhealthy over familiarity with officers.

    • Adam Morton, St.Martins October 7, 2015 at 9:46 am

      Hilarious! If I thought you were being serious of course ,I would point out that your post lacks any integrity by the absence of your name! People would assume close involvement with the LA or that you were the editor trying to create debate over the matter. I would then go on to point out that it doesn’t require business acumen to spend other peoples money unwisely .In the real world ,a business person would have to EARN money before they spent it or at least guarantee a return on investment to satisfy lenders with a plan that had targets and performance indicators.Re Belgium -for that matter I don’t recall Scilly descending into chaos through lack of a CEO. In fact, even when they hired an interim CEO, he did the exact opposite to the current one- no change just more of our money disappearing for nothing!
      Sadly I fear you may be right regarding Mr Leijser who seems to actually believe the words you have written! Our Councilors too seem to think that grant procurement in itself is an industry with a future hence why they chose our current CEO! The LA seems to be deluding itself that they can cherry pick a desirable location in an AONB for more of their mates to come here; riding electric buggies to work in shiny glass offices punching keyboards. What they neglect to notice is that the cyber geeks too will require basic services even when on stratospheric wages. There will be the teeny problem of replacing the 150.000 tourist passengers to provide a working business model for transport . It would be grim irony indeed if they were later to turn round and endorse the very improvements denied to the existing industries and population when Mr Leijser hijacked all the funding for barely needed public realm improvements . This happened at a point we are unlikely to ever achieve again when we had a vote hungry coalition government and sympathy with our plight after a record bad winter and the withdrawal of BIH. Baroness Kramer sent them away to consult with the community and come back with a plan , a thing which they emphatically DID NOT DO!
      The problem our LA officers have is that they are used to the mainland where gaps can be filled from the adjoining area. Over here its too isolated, no economy of scale and non competitive due to the extra cost in our offshore location. No one wants to run our loss making water and sewerage works, no one wants to run our loss making airport and no one wants to run a trust port and no one is going to compete for our transport because they would go bankrupt! Meanwhile the realist locals must wait for them to trip up and waste our money in time to see them retire with a nice severance package and then start the process all over again!

    • Peter October 7, 2015 at 10:37 am

      I have often suggested here that Scilly’s only hope of salvation is a benign dictatorship – a latter-day Augustus Smith. However, I don’t think many people would be convinced that the Theo and Diana Duo could be safely entrusted with the level of absolute power that Local Realist advocates. Your assumption is that Theo and Diana are “experts”. Credentials please. I’m not on the islands, but I’ve never seen reported any passion or commitment to the islands from either of them. Theo and Diana: prove me wrong. But I suspect Local Realist is right that most councillors are way out of their depth in running a unitary authority with the typical level of councillor talent found in an area the size of a parish council.

      Re moving from tourism to green energy and cyber business: Scilly’s geographical isolation is both its biggest problem and its biggest asset. The problem aspect is self-evident, but tourists visit and love Scilly precisely because of its isolation. I don’t see how geographical isolation is anything other than an extra financial burden for both green energy (which often is not green at all) and cyber business. Other than tourism, the only industries I can think of which could exploit Scilly’s unique location are marine science and space research. Both require efficient transport links with the rest of the country.

      Benign dictatorship, or even LR’s proposed Theo and Diana dictatorship, will never happen. New forms of industry will never be established, due to both apathy and poor transport, tourism will continue to decline (yes, i hear the good news stories, but look at the overall trend), and Ye Olde Feudal Duchy will continue to stifle development, and thus Scilly is doomed. To all those who are offended, come on, prove that I’m wrong and tell all of us the specific steps involved in saving Scilly.

      • Geoff Seasick October 10, 2015 at 9:03 am

        We have a type of dictatorship now but it is far from benign, there is a truly unholy alliance at the apex of the authority as a result of a carefully crafted over familiarity between the queen and her senior worker bees.
        The queen bee has been deluded into thinking she is still in charge when it is increasingly obvious to the rest of the hive that she is a token and her fertile egg laying days are behind her!
        Let’s be honest on her past record there was never going to be any honey!

        • Geoff Seasick October 13, 2015 at 11:41 am

          As an example of the impotence of Queen Bee, does anyone remember the Eighth Commandment?
          To refresh your memories it was her proclamation that “there shall be a Water Barometer” this was to ensure that we were all mindful of the need to be prudent with our use of tap water (the barometer never materialised) but the sentiments were irrefutably laudable.
          Is anyone surprised to learn that our esteemed leader has demonstrably abandoned ‘Dear Prudence’ by allowing the installation of a mains water irrigation system on the roof of the TIC to keep the living green roof green, how environmentally sensitive is that? Laudable to laughable at a stroke!

    • Ewart October 7, 2015 at 7:37 pm

      The comments of Local Realist just confirms the need to pas all of the Legal responsibilities of the Council of the Isles of Scilly to Cornwall Council. It is quite apparent that the Councillors have abdicated their responsibilities to the Employees of the Council. In all probabilities this could be an ultra vires action on their part.
      Employees are there to carry out the decisions of all the Elected Members, all of them not just a few chosen ones.

  2. Jenny October 6, 2015 at 7:20 pm

    The Prime Minister stated only last week on local TV he need for Local Authorities to join up/amalgamate, call it what you will. He used an example of his own LA. The I.O.S was a Parish Council at one time and although Cornwall CC has it owns problems, there are local Cornish parish councils who represent the needs of their small communities. Often these communities have far greater population numbers than the Isles of Scilly. Directors of Services ( paid more than a MP), CEO (paid as much as a Prime Minister) and Senior Officers paid more than operational officers of Police Forces and Emergency Services. It is a high cost community for just 2800 inhabitants and unsustainable.

  3. Ted October 6, 2015 at 8:11 am

    Let’s face it – Scilly in future will be part of Cornwall Council and have (if we’re lucky) one councillor on that body and a skeleton staff on St Mary’s.

    St Mary’s could support a parish council I suppose. The off-islands just the lesser parish meeting.

    In the end, Scilly has a population less than many parishes on the mainland and 50x less than your average local authority. It’s a wonder that the Council of the Isles of Scilly has lasted this long in any case.

  4. Fran grottick October 5, 2015 at 4:09 pm

    Councillors accepted the Accounts , they did not approve them. Several Councillors did raise significant concerns as to the CIOS viability going forward. Sadly, there was,apparently, a glitch in the system and the beginning of the. Meeting is not available.
    In my view, this is deeply regrettable.
    Fran Grottick

    • Geoff Seasick October 6, 2015 at 11:50 am

      to onlookers it very much seems that the Senior Leadership Team operate outside of any political governance, I for one am deeply suspicious about the convenient system ‘glitch’ that saw the most contentious item omitted from public scrutiny.
      We are all suffering because a cabal led by a poorly informed leader who is arrogantly and misguidedly convinced of her own ability threw the baby out with the bath water. Nobody denies the democratic right to enact change but what was absolutely unforgivable is that there was no credible plan of action prepared to follow that change.
      The pantomime that is the everyday operation of the council is evident to all, reorganisation was an absolute farce, the salaries bill and the number of employees both skyrocketed and performance has dropped away in an inverse ratio.
      Those who work for the council at the grass roots are justifiably nervous.

    • Public Domain October 14, 2015 at 2:18 pm

      Thank you for the clarification – presumably you are saying that the recommendation was changed from that suggested in the report:

      “1. That the audited Statement of Accounts 2014-15 be approved and be signed off by the Chairman and Senior Manager: Finance and Resources (Section 151 Officer).”

      to ‘accepted’. But, does this subtle change of wording mean the Accounts are not approved and will have to be represented again to Council for formal approval? I would doubt it and humbly suggest that whatever point you may have been trying to make by changing the wording, will be considered semantic.

      By accepting them and presumably the chairman signing them, you as a council have actually approved them.

      However, there are clearly still many unanswered questions arising from the information within the statement of Accounts, so I wholeheartedly will be pleased to be proven wrong, and hope that members do get an opportunity to scrutinise them again – perhaps when the final report is received from the auditor….

  5. Brenda Brown October 3, 2015 at 3:08 pm

    Please, please, please, Scillonians, take to the streets demanding that the administration of the islands be taken over by Cornwall County Council.

    I endorse this statement 100%

    I am looking forward to reading Mr Easticks comments, as he has our interests very much at heart.

  6. Old Geordie October 3, 2015 at 12:04 pm

    Couldn’t you just ask Mr u turn for some money from the overseas aid budget after all 28 miles offshore should mean you qualify.

  7. Ewart October 2, 2015 at 8:05 pm

    Reading this and other posts on Scily today, is it not for the Government to step in and put the Council into special measures.

    • Chargepayer October 3, 2015 at 11:07 am

      That will only happen if this council manages to embarrass central government.
      Rest assured Cornwall don’t want us they have problems of their own.
      It is very likely that civil servants have made sure that their ministers are aware that the IOS Council is a basket case however, we probably do not rate more than amusement value and the odd chuckle over tea and biscuits!
      Our salvation (if it is feasible) is probably in the hands of a Mr Simon Garlick of Grant Thornton Auditors. I believe Mr Garlick is “the Auditer” and probably the person who will call time on the council when it continues to fail to meet normal accounting standards. I imagine the ‘misstatements’ were quite a worry for audit.

      • Ewart October 3, 2015 at 10:28 pm

        It is not clear,have the Auditors qualified the accounts or have the signed them off. If they have qualified the accounts, there is a possibility the Government will
        have to consider putting Council into special measures.
        The Council have over a number of years shown a total lack of governance, there has to come a time when enough is enough, they are simply not capable
        of running the affairs of the Islands.

        • Alex October 4, 2015 at 6:59 pm

          The auditors have not qualified the accounts. However as part of the audit they identified a number of errors in the accounts prepared by the council but these errors were adjusted so the final accounts were correct.

          However they have also raised concerns about serious weaknesses in the financial systems operated by the council.

          • Simon October 4, 2015 at 10:47 pm

            I suppose the auditors opinion offers uniformity, it does seem that there are serious weaknesses in every other area under council control.
            What a dreadfully sad state of affairs.

  8. Peter October 2, 2015 at 3:52 pm

    Please, please, please, Scillonians, take to the streets demanding that the administration of the islands be taken over by Cornwall County Council. It might mean losing face, but you are doing yourselves no favours by allowing Scilly Council to destroy the economy and infrastructure of the islands. And, yes, I know Cornwall Council is not exactly wonderful, but at least it’s not a Mickey Mouse council.

  9. Chargepayer October 2, 2015 at 11:28 am

    This audit is a powerful indictment of the political and management leadership of our council it represents an authoritative and potent measure of inadequacy.

    • Paul Linge October 2, 2015 at 5:18 pm

      Had an audit this poor ever been put before council when a certain lady was an ordinary councillor she would have been seen to be apoplectic with rage and scathing with her sharp comments in meetings, how times change!
      This ‘Senior Management Team’ is a product of her creation, nobody else to blame now.
      Small wonder that so many finance department officers have left, they have professional reputations to protect.

  10. Public Domain October 2, 2015 at 10:13 am

    I’m not sure you can attribute the £200k+ overspend to the roads works. The project was planned and curtailed at £3m. Funding sources was approved by the P&R committee on 15 April 2014:

    That the Capital Programme for the Highways and related works in the 2014/15 capital budget at £1,450,000 be revised with an additional sum of £70,000 taken from General Reserves and therefore the project to be funded as follows:

    £146,476 – Highway Reserves
    £64,500 – Children Services
    £72,760 – Education Capital Budget
    £80,000 – Storm damage claim
    £946,000 – General Reserves
    £116,264 – Borrowing from General fund to be funded by a reduction in the Highways Repairs revenue budget year on year of £40,000.
    £24,000 – Pot Holes grant from prior year from the balance sheet”

    This £1.45m was enhanced by £1.8m in Dept of Transport Grant, which covers the £3m spent.

    Transport committee was updated on the project on 15 January 2015, and informed that ‘the works and snagging was complete’ and promised a ‘full accounting after the retention period is complete.’

    Indeed, the information in the accounts (Page 7 if you’re interested) shows that the £3m spent on the highways was 57% externally funded. This leaves just £1.29m falling to the councils coffers so actually we should being seeing a £160k UNDERspend.

    In short, we must look elsewhere for the reasons behind the overspending.

    • Cook da Books October 2, 2015 at 4:13 pm

      What about incorrect details and misstatements? One assumes the Linguist is au fait with the auditors meaning and should therefore hang her head in shame. Economy with the truth if not with our money.

    • High Lanes Drifter October 3, 2015 at 12:48 am

      Quite so how dare the nasty people suggest the Dear Leader has failed an audition, don’t they know she is perfect for every role! Running these insignificant Islands is no more than a walk on part in a low budget (dirty word) soap opera. Why she could easily run this puny municipality whilst single handedly paddling a canoe up the Hudson river.
      Repent you nay sayers and bask once more in her radiance!

  11. Stephen Smith October 2, 2015 at 9:07 am

    Perhaps the Councillors had a full and round debate and secured answers to these questions at the Full Council meeting, however, the webcast rather inconveniently starts after this item.

    Does rather underline the auditors finding on weak governance though.

  12. Cook da Books October 2, 2015 at 12:53 am

    FOR SHAME!!! Surely the time has come for several resignations!