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Scottish councillors need better training to scrutinise borrowing

Councillors in Scotland need better training and for the jargon to be cut out of reports so that they can better scrutinise borrowing arrangements, auditors have said.

Borrowing is a major source of funding for Scottish councils to invest in key services like schools or roads. A new report from the Accounts Commission says that councils are meeting professional requirements but need to do more to set out the longer term implications of borrowing and other debt on their finances.

It adds that authorities need to make better use of information to clearly set out the impact of borrowing in the longer term to help councillors make informed decisions and undertake their scrutiny roles.

The report says total councils' debt from traditional borrowing now stands at £12.1bn and has changed little over the last three years with just over half of councils have increasing their borrowing levels over the last decade.

Councils have other debt of £2.7bn from Public Private Partnerships, bringing total debt to £14.8bn. While the report focuses on council borrowing the commission says its recommendations could apply to all debt.

Although Scotland's 32 councils have developed strategies to suit their own local priorities and needs they are not always highlighting the strategic importance of borrowing and treasury management or providing evidence of long-term affordability and sustainability.

Douglas Sinclair, chair of the Accounts Commission, said: "This is a highly complex technical area. Councillors don't need to know every detail but they do need to know enough to ask the right questions. This is a critical part of council business which requires close and effective scrutiny, particularly in times like this when budgets are so tight.

"We hope this report will help councillors and officers make improvements through clearer information and wider analysis of options so that they can be confident that their borrowing policies deliver best value in the longer term."

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