Helen Martin: The council must be careful with our cash

off track: The 'pin the donkey' estimated cost of extending the line to Newhaven is likely to increase. Picture: Ian Rutherford
off track: The 'pin the donkey' estimated cost of extending the line to Newhaven is likely to increase. Picture: Ian Rutherford
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ONE of the most enraging issues in this day and age is the way councils spend public money.

We can all appreciate the challenging complexity of calculating how to deliver standard public services from social care and education to libraries, road maintenance and refuse collection. But it’s the other projects that really get us riled up.

Adam McVey admits businesses on Leith Walk will lose income as a result of the impending tram works. Picture: Ian Georgeson

Adam McVey admits businesses on Leith Walk will lose income as a result of the impending tram works. Picture: Ian Georgeson

As the trams inquiry continues and plans to extend the system to Newhaven at a “pin the donkey” estimate of £285 million (including loan interest) are under way, we all know the final cost would be much higher.

And on top of that we are in the midst of the council IT fiasco thanks to a deal with Canadian firm CGI which has developed a reputation for incompetence, including the chaos over Scottish farm subsidies. Their new IT system, on which all our council services and much of our finances depend, has undergone “critical failure” and an 18-month delay, both of which impact directly on many of us.

That was a £186m project, intended to save us £6m a year. It hasn’t.

Councils do not have money. They are guardians of our money. Surely the time has come for stricter regulations governing contractual agreements made on our behalf.

Why, for example, are there no penalty clauses if projects are not delivered within the agreed deadline, let alone if the resulting system doesn’t even work?

Like any building project, we have to accept the trams work risked coming up against unforeseen problems that hadn’t been taken into consideration with the original quote.

So presumably, contractors or other specialists were obliged to carry out as many surveys as possible to identify potential problems before that quote was submitted. Not sure I’d bet on that.

But a new IT system? Well that’s not going to be complicated by unknown underground gas or sewage pipes, electric cabling or uncovered archaeological treasures. Global companies and large offices regularly install new IT systems. How would they react to “under-performance” of the contractor, “critical failure”, massive financial loss, services destroyed and an 18-month delay?

Councillor Joanna Mowat, the council’s governance, risk and best value convener, said the decision to claim money back from CGI would be a “commercial” one. Surely it shouldn’t be a “decision” at all – it should have been a clause written into the contract in the first place guaranteeing an automatic reimbursement.

No-one in their right mind pays for goods or services that don’t work – well, no-one except councils and governments spending public money.

All contractors want to win high-value public contracts. If all such contracts contained bonus clauses for successful completion within the deadline and penalty clauses for over-running or failure, contractors would have to accept that. If they refused to do so they might as well hold up a placard saying: “We’re not sure we can pull this off!”

Now we all quiver when Edinburgh announces another “project”. Even the Scottish Parliament refuses to put a penny into extending the tram network. But councillors, no matter which city or area they represent, are not qualified in setting up multi-million-pound business arrangements.

New national, contractual requirements with compulsory clauses for all large publicly-funded projects, and a government office set up to formally approve each contract would help protect public money. . . and also let councillors off the hook of total responsibility.