Caithness Map :: Links to Site Map Great value Unlimited Broadband from an award winning provider  

 

PPP Accounting Flexibility To Be Considered - Short Term Benefit But Long-Term Pain

25th January 2024

A briefing has been provided to all members of the Council on an accounting flexibility introduced by Scottish Government and available to Councils to utilise in 2022/23 or 2023/24.

A number of reports to Council in recent months have covered this topic, and a number of other Councils have utilised the flexibility in 2022/23 or are considering doing so in 2023/24.

This flexibility provides an opportunity to extend the number of years which the Council accounts for costs related to its private financed school PPP contracts.

This could extend the time period from the current 25-30 years, to 45 years.

A briefing has been issued to all members from the Council's Head of Corporate Finance, in advance of the matter being considered formally by the Council.

If the accounting flexibility was utilised, this would result in a large credit into Council reserves estimated at £68m, and ongoing credits over the short-to medium term estimated at £6m p.a.

There are longer-term implications. It would extend the time period over which costs are charged into the revenue budget. In total there would be £146m of charges against future years. The briefing to Members has also highlighted that additional interest costs could arise depending on use of the credits created.

Leader of the Council Raymond Bremner said: "It’s important to realise this accounting flexibility is not a magic solution to the Council’s financial challenges. The Council is still faced with a budget gap over 3 years of £113m, and the increase in Council reserves won’t solve that challenge. The Council is still faced with difficult choices in how it balances its budget in a sustainable way. That will require recurring budget savings, cost reductions and income generation, not a one-off use of reserves. The accounting flexibility can however assist with how the Council addresses that financial challenge by giving scope to use reserves to redesign how we deliver services and transform our operating models.

Convener Bill Lobban added: “Accounting flexibilities are another tool in our toolbox which we can use to get the best use of all our resources and help to minimise the impacts of our budget gap. This particular tool is akin to having an increase of credit limit on a credit card but as we all know, there are interest costs involved in using that credit. I am sure members will give careful consideration to this matter when it comes before them."

The accounting flexibility does not alter the contracts the Council holds with the companies operating the PPP schools, and nor will it alter how much they are paid. There will be no change to the operational arrangements in these schools or on the ground. Parents, pupils and staff will not be impacted. This is purely an internal accounting mechanism which would operate per Scottish Government accounting rules.

The Council has 3 private financed school contracts in scope for this accounting flexibility.

School PPP1; 4 schools: Ardnamurchan High and Hostel, Glen Urquhart High, Spean Bridge Primary, Strathdearn Primary.

Schools PPP2: 11 schools: Dingwall Academy, Kinlochleven High, Millburn Academy, Portree High, Drummond, Inshes, Bun-Sgoil Ghàidhlig Inbhir Nis (BSGI), Kinlochleven, Resolis, Culbokie, Cawdor.

Wick Campus DBFM: 2 Schools: Wick High and Newton Park Primary.

A report will be brought to Members at the Council’s special meeting on 29 February.

 

Related Businesses

 

Related Articles

Yesterday
Apprenticeships Offer Earning Opportunities Alongside Learning In Refurbishment Of Historic ParkThumbnail for article : Apprenticeships Offer Earning Opportunities Alongside Learning In Refurbishment Of Historic Park
Today, Morrison Construction introduced some of their local apprentices who are working on the UK Governments' Levelling Up Funded refurbishment project at the Northern Meeting Park in Inverness.  All these apprentices have been recruited from the Highland area.  
13/4/2024
Independent Candidate Wins Inverness South Bi-electionThumbnail for article : Independent Candidate Wins Inverness South Bi-election
The by-election to elect a councillor to represent Ward 19 - Inverness South on The Highland Council has been won by Duncan Cameron McDonald - Independent who was one of the eight candidates who contested the vacancy.   Voters in the ward went to the poll yesterday (Thursday 11 April) and the by-election count was held this morning in The Highland Council Headquarters in Inverness.  
10/4/2024
Technology Placement Programme In Highland
The Technology Placement Programme offers funding to businesses in the Highland Council area to cover up to 70% of the cost of employing a student or graduate.   The Technology Placement Programme offers funding to businesses in the Highland Council area to cover up to 70% of the cost of employing a student or graduate.  
3/4/2024
Council Announces Extra Digital Funding To Support Highland BusinessesThumbnail for article : Council Announces Extra Digital Funding To Support Highland Businesses
Following the success of its Business Digital Grant scheme launched last year, The Highland Council is delighted to announce further funding.  This is to help Highland companies access digital support alongside other business growth support.  
27/3/2024
Wick Public Service Obligation Celebrates Successful Second Year Subsidising Wick Aberdeen FlightsThumbnail for article : Wick Public Service Obligation Celebrates Successful Second Year Subsidising Wick Aberdeen Flights
The Highland Council is delighted to confirm a highly successful second year for Public Service Obligation (PSO) flights between Wick and Aberdeen.   The period from April 2023 to March 2024 has seen a substantial increase in passenger numbers, with several months seeing over 1,000 passengers using the service, and overall the service has seen year on year growth of 25%.  
18/3/2024
Members Agree Digital Ambition For Highland Council - Or How To Make Cuts Without Saying SoThumbnail for article : Members Agree Digital Ambition For Highland Council - Or How To Make Cuts Without Saying So
Members of Highland Council, who met on Thursday 14 March 2024, approved a corporate Digital Ambition, which has been designed to deliver significant organisational change across Council services, recognising the current priorities within the organisation.   The Strategy, which is embedded within the wider Council Delivery Plan, has been developed to focus attention and resources on areas of change which will deliver the greatest benefit to the Council.  
14/3/2024
Clarification On The Role Of MCR Pathways' Coordinators And Mentors In Highland Schools
The Council remains committed to supporting mentoring in our schools, including the support that is currently delivered through the MCR Pathways programme.   Highland Council is currently undertaking a review of Employability Support provided by a number of different council services and how these relate to the work carried out by external partners and in our schools.  
15/3/2024
Council Agrees A New Draft Highland Outcome Improvement Plan
Highland Council members have considered and agreed a revised draft Highland Outcome Improvement Plan.   The partnership plan has been reviewed and updated by the Community Planning Partnership.  
15/3/2024
Members agree Highland Council's new Community Wealth Building Strategy
Members at today's (14 March 2024) meeting of The Highland Council agreed the local authority's new draft Community Wealth Building Strategy.   They were also asked to note that a period of public engagement on the draft will now begin, with a final strategy returning to full Council for consideration in September.  
15/3/2024
£60m Capital Investment Approved For Roads And Infrastructure In Highland
Plans to invest up to £60m new Capital in Highland roads and infrastructure have been approved by Members at the Council meeting on 14 March 2024.   The decision will see an additional £40m Capital investment in roads and transport infrastructure.