Strathclyde extra debt exposed
A study by the finance directors of 12 of Scotland’s new local authority bodies has revealed an extra #28m of debt was left by the now defunct Strathclyde council.
Strathclyde council, which covered a large part of West Central Scotland before regional councils were abolished by the last government – left debts of #50m to be picked up by taxpayers of its 12 successor authorities.
The additional deficit is equivalent to #35 on a Band D council tax bill and comes on top of a #70 bill for the previously-known deficit.
The FDs’ research revealed Strathclyde miscalculated grants due to be paid to it by the Scottish Office. The original deficit resulted from around #23m winding-up costs plus a failure to stick to accounting rules during the winding-up.
Glasgow, the largest of the successor councils, is leading the winding-up. Ian Tully, Glasgow’s head of accounting and budgeting and a study author, said the final decision on how to recoup the money was down to Strathclyde’s auditors Price Waterhouse and the Accounts Commission.
If the money was irrecoverable he acknowledged it would be charged to council tax bills. ‘It’s a case of debtors held in good faith that appear not to be recoverable,’ Tully said.