How Edinburgh Council risks Squandering £168k
On the old ward based statistics, Craigmillar was the most deprived area in the East of Scotland. Years of economic decline compounded by high levels of drug use and unemployment left a legacy of multiple deprivation.
You can imagine the surprise of community representatives when we discovered that the area has over £168,000 of its Fairer Scotland Fund allocation that will be almost impossible to spend by the March 2011 deadline. It will be even more of a surprise to find that the Council-appointed Neighbourhood Manager was suggesting that this money would be either difficult or impossible to spend as any project would have to be commissioned using a tendering process that takes around 6 months. Astonishingly this can apply to sums as small as £5000. It must apply to sums over £10,000.
This means that many tendering processes will cost more than the grant itself. It’s preposterous. It’s a complete waste of council resources, and the resources of the organisations that have to tender for this. It could only be bone-headed stupidity or a cynical attempt to ensure that the money cannot be spent on dealing with need in Craigmillar. I assume that the unspent money will go back to Council to cover its incompetence elsewhere.
The Neighbourhood Partnership met on Wednesday this week. It’s responsible for allocating Fairer Scotland Fund moneys. This Fund is to be used to support work in places with severe area deprivation, like Craigmillar. But instead we were told (with an extraordinarily straight face) by the senior official that we wouldn’t be able to spend it because Edinburgh Council’s Director of Finance wouldn’t let him.
I’ve been a member of the Neighbourhood Partnership, which covers both Portobello where I live, and Craigmillar, for 3 years now. The genuine difference made by the Partnership is hard to see. Broadly speaking it is official-led, with Community representatives sidelined by Council employees. It was unable to do much when the Education departments decided to close the excellent Instep project, which helped children adjust to High School.
The gigantic underspend is exacerbated by the fact there is so much need in Craigmillar. The money could and should have been spent on a variety of projects that could have saved the Council and other public services substantial sums of money. Instead it is being hoarded by the Council and their ludicrously over-wrought approach to tendering. Money that could have saved lives is instead filling Council coffers.
There is an urgent need for all public authorities to review their use of tendering. Since its introduction as a Thatcherite tool for giving public subsidy to the private sector public officials have become obsessed with its use. There may be circumstances where very large sums are involved and it is appropriate. But even the Scottish Government does not recommend its use for projects under £50,000. In these circumstances grants are much more efficient and effective.
The cynical might suggest that Edinburgh’s Director of Finance has set down these rules to ensure an underspend. Money not spent could be reallocated to the Council’s financial black hole. I’m sure that’s not the case. But along the way they’ve wasted a vast amount of money and time on wildly bureaucratic tendering processes. And that time and money has been diverted from the vital work done by voluntary sector groups fighting inequality and improving lives in Craigmillar.
There’s a simple answer here. Waive the ludicrous rules on tendering, and allow groups to apply for funds up to £50,000 as a grant. It’ll be cheap and effective and will result in vital funds being used to meet need, not line a Council bank account.
“The Procurement Reform Bill has the potential to make a difference to many lives,” Salmond said. “It will provide new powers to tackle companies that do not comply with their legal obligations, including blacklisting and employment law. Our Bill here in Scotland will give Parliament the opportunity to go further than Wales, by taking the power to regulate how companies are selected to bid and how their suitability should be assessed,” he said. “These regulations will address blacklisting, working within the framework of EU law.”
Lets wait and see, i have tendered for many contract only to see it time and time again awarded to bigger companies even though we know our bid for the work was cheaper…
hi came across your site and just wanted to say hello.
It’s true that even the most thorough tender process can still be gamed sometimes – but if somone is really determined to cheat the system, at the very least they should be forced to rigourously document their fraud, so that it can be examined in the future. Not all paperwork is useless….
Anyway, I’m not an expert in this area but from the sound of it the funds (going forward) will be in the gift of transparent institutions like the Neighbourhood Partnerships, so rather than tendering for a grant it will be more a case of political lobbying for a project to be funded. Not necessarily any easier these days!
Thanks for your comments. I think the problem with tendering for amounts this small is that £5-10k will be the cost of the tendering process.
While corruption is not unknown, the Neighbourhood Partnership meetings are all in public, and the funding is all publicised, so any incongruities would pretty quickly come to the fore.
And the reality of the tendering processes I’ve seen with FSF is that the specification is so tight that very few providers can tender.
If someone wanted to give their golf partner a contract, they’d just need to specify something that only their partner could provide.
On your other point, though, I am more in agreement with you: “I assume that the unspent money will go back to Council to cover its incompetence elsewhere”
A minute’s research reveals that the ring-fence on this funding was removed by the Scottish Government in 2008. The idea behind this seems to have been that redevelopment and fairness were not something to be tacked on to the other duties performed by the council and the neighbourhood partnerships etc, but were a key reason for these bodies’ existence. So it didn’t make sense to separate the ‘fairer scotland fund’ from the general budget.
This is a roundabout way of saying that the FSF per se was being abolished, but that the money would go to councils/NPs who would have responsibility for delivering instead.
Declaration of interest: I work for the city of edinburgh council. Not in anything to do with tendering, craigmillar, the finance department or any other related area though.
“There is an urgent need for all public authorities to review their use of tendering.”
Cases like this can be frustrating, but a thorough and transparent tendering process is necessary. What else is to stop a council manager allocating public money to an over-priced contract with a company run by his golf partner? Or an nhs buyer from not giving a contract to an asian family firm because he is a racist?