External auditors find council makes "significant progress"

Midlothian Council has made “significant progress” in addressing financial pressures including approving a Medium Term Financial Strategy in June 2019, according to a new report by the council’s external auditors, Ernst & Young LLP (EY).

Reduced budget gap

At the full Council meeting on Tuesday 1 October, councillors will hear the report, which covers the financial year to March 2019, acknowledges Midlothian has reduced its projected budget gap to 2022/23 from almost £19 million to £8.3 million.

Tackled projected overspend

In terms of openness and transparency, financial reporting was “clear and consistent” throughout the year, the report adds. The council also took steps to reduce the impact of a projected overspend of £3.002 million identified in August 2018. 

Good governance

It goes on to note the key features of good governance were “in place and operating effectively”, while the draft financial statements and supporting working papers were of a “good quality”.

However, the report highlights more work needs to be done to deliver a balanced budget for 2021/22 onwards.

Cross party working

“All 18 elected members must work together to build a consistent and shared vision that will deliver the change necessary; improving services and securing the additional savings required to underpin the council’s long term financial strategy,” the report adds.

Findings welcomed

Council Leader Councillor Derek Milligan welcomed the findings. He said: “This report is for the financial year ending March 2019.

A significant step change

“Since then, we’ve approved the first Medium Term Financial Strategy in June, marking a significant step change for us to strengthen financial sustainability and allow us to plan and implement service delivery more effectively.

A shared vision

“I’m confident therefore that if, as the EY report stresses, all 18 councillors from all parties work together along with the Chief Executive and Corporate Management Team, we can identify the further savings required while continuing to work with partners to deliver a shared vision and priorities for Midlothian.”

Action plan in place

The EY report comes after the council considered and implemented an action plan in August 2019 to respond to recommendations in the Best Value Assurance Report by the local government public spending watchdog, the Accounts Commission.

Putting citizens first

Councillor Milligan said: “The EY report findings are an improvement on the year before and with our Medium Term Financial Strategy and Best Value action plan in place, we can assure local people we are committed to providing best value while continuing to put them at the heart of everything we do.

Fast growing population

“There are challenges, especially as we are the fastest growing population in Scotland, but we’re making significant progress delivering new schools, community facilities and housing.”

Disappointed by 'red status'

Councillor Milligan added: "We are obviously disappointed by the auditors continuing to mark our ‘financial sustainability’ status as red, especially with a medium term financial strategy agreed in June and services delivered within budget in the last financial year.  Audit Scotland in its report, Local government in Scotland: Financial overview 2017/18, highlighted  “the financial outlook is for reductions in Scottish Government revenue funding to council. This will mean continued and increasing financial pressures on council services, especially those that are not protected”. Reflecting the challenging financial climate, I anticipate, therefore, that no council will have scored better than an amber for financial sustainability in the current year."

30 Sep 2019