West Dunbartonshire Council could be plunged into further debt

Feb 5 2010 by Amanda Mckendrick, Lennox Herald (main ed)

SKINT West Dunbartonshire Council could be plunged into more debt after bosses proposed a £10 million loan.

The £9.8 million loan – which would cost £1.3 million a year for the next decade – would be used to plug a black hole caused by a controversial staff pay deal.

The single status agreement has added an extra £9 million to the authority’s annual wage bill and council chiefs have already applied to the Scottish Government for approval to borrow the lump sum.

But councillors have warned against the move, saying the loan would be like “getting a Provy to pay a Provy”.

Independent councillor George Black said: “Had the opportunity to apply for £10 million to satisfy the aspirations of the workforce come up when we were going through the single status process, I would have put both hands up for it.

“But we have now already settled with the workforce from within the £21 million pot set aside for single status.

“Why would a cash-strapped local authority borrow £9.8 million and put itself in the position of then having to repay £13 million over a 10 year period? We would be repaying half a million pounds every year in interest alone.

“It's like getting a Provy to pay a Provy.

“We heard from the director of finance at the budget consultation meeting that we have to find £2.5 million of savings this year, £11 million of savings next year and £12 million the following year. If we take this loan we would have to find a further £1.3 million every year on top of that.

“I hope we don't get approval to borrow this money but, if we get the go-ahead, I’ll be voting that we don't take it.”

Councillor Jim Bollan also attacked the plan and questioned why councillors were not made aware of the bid before the loan application was made.

He said: “The officers' thinking is that the money is available, so why not take it.

“If we are trying to borrow £10 million why was no-one told about it?

“It just affirms my view that officers are running this council.”

Finance Convener Craig McLaughlin said he did not view borrowing the money as an option.

He added: “Borrowing money to pay for something which has already been paid in full doesn’t stack up.”

A spokeswoman for West Dunbartonshire Council confirmed an application had been made to the Scottish Government for approval to borrow funds for pay modernisation.

She added: “West Dunbartonshire has applied for several million pounds and if any amounts were to be agreed then the corporate management team would make a recommendation to the strategic finance working group and then to council on how the funding should be utilised in the future.

“The pay modernisation programme added nearly £9 million to the ongoing annual costs of the council.”