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.