The council whose cap won't fit

Neil Munro reports from Argyll whose financial plight is often overlooked in the national rows over spending cuts

Argyll and Bute last week became the first local authority to agree detailed cuts in next year's education budget - Pounds 3.5 million at a cost of 106 redundancies - and the extent of the complexities faced by it and other new councils in the past year is just becoming apparent.

Joseph McGeer, Argyll's head of educational resources, grew suspicious halfway through the current financial year when Scottish Office figures showing each council's grant-aided expenditure clearly did not add up. Argyll was allocated 88 schools in the cash distribution when it had 101; the number of primary pupils was seriously underestimated, thereby attracting less in Government grant. On the other side of the balance sheet, the Lomond and Keil private schools were, bizarrely, credited to Argyll.

An embarrassed Scottish Office mounted an enquiry and discovered that some Pounds 20 million was "sloshing in error across a number of council boundaries", as Mr McGeer says. The mistake, affecting 16 councils, stemmed from school postcodes being wrongly allocated, with the result that Argyll's loss was West Dunbartonshire's gain.

It proved temporary salvation for the Dunbarton area which lost Helensburgh to Argyll in the local government shake-up. Once the postcodes found their true home, the Scottish Office transferred Pounds 2.2 million from West Dunbartonshire to Argyll.

"If we had not spotted the mistake and it had not been corrected," Mr McGeer says, "we would have been looking at extra cuts of Pounds 1 million on top of the Pounds 3.5 million which was agreed last week. It was none the less a significant miscalculation to hit authorities in the middle of the financial year."

Misfortune was piled upon miscalculation as Argyll had to cope with two different computing and accounting systems inherited from Strathclyde Region and Dunbarton District. The education and finance departments therefore had difficulty talking to each other, technologically speaking. Accounting differences meant, for example, that under regional rules staff travel was allocated to employee expenditure while district councils treated it as a transport cost. "This made it extremely difficult to compile the budget and just as difficult to explain the attempts to make the revenue estimates more coherent," Mr McGeer says.

The return of its rightful funds has not, however, been of much help to Argyll which has been hit as heavily by council reform and the public sector squeeze as Glasgow, where the spotlight normally falls. Indeed in the improbable competition to boast the more miserable fate, Archie Morton, the council's director of education, compares Glasgow's proposed 6 per cent cut in education with the 7.4 per cent removed from Argyll's Pounds 47.5 million budget last week. And that is on top of cuts of Pounds 1.37 million rushed through to bring spending into line before the end of this financial year.

Argyll will have to get used to bad news over the next couple of years as it faces an end to the redistribution of funds which have compensated councils that lost heavily in the transition to single-tier authorities. The current gap of Pounds 6 million for all Argyll's services will fall to Pounds 3.8 million in the coming year as a result of the successful raid on West Dunbartonshire's treasury. The "mismatch support" will amount to only a third of the shortfall in the coming year, however, and by April 1998 it will disappear altogether.

Mr McGeer comments: "Everybody thinks that the additional funding we received means we have extra money to spend. What in fact it means is that instead of being hit with a 6lb hammer, we are being hit with a four-pounder."

One of the more obscure juggling acts that local government is required to perform results in council departments suffering a knock-on effect every time the police, fire and valuation authorities increase their budgets. The 10 per cent rise declared by Strathclyde Police, which is not subject to capping penalties, forced Strathclyde Region's 12 successor councils to find savings. In the case of Mr Morton's budget, this was Pounds 700,000.

The authority maintains it is hard done by in other ways, because the Scottish Office fails to take account of its rural character. It has long protested that the remote islands allowance given to Orkney, Shetland and the Western Isles is not extended to the Argyll islands. It is also aggrieved that an equivalent council like Inverclyde has a similar education budget of Pounds 43 million but has only 47 schools, fewer than half the number in Argyll.

The drearily familiar sound of axe-wielding followed last week, as councillors come increasingly to realise they are barely in control of events. The cuts they now have to contemplate are beginning to hit at quality as much as quantity, as Allan MacAskill, the education chairman, acknowledges.

The item that has "struck a chord in the community", according to Alison Hay, a Liberal Democrat councillor, has been the threat to withdraw all instrumental music instruction, saving Pounds 183,000 but costing 12 jobs. Isobel Strong of Rothesay Academy, the teachers' representative on the education committee, confirms that it was the one issue on which she was lobbied most strenuously. It may well mean an end to the primary and secondary school bands of which Argyll is so proud.

The Pounds 3.5 million savings package cannot be achieved without the closure of up to 24 primary schools, almost a third of the total. The decision to close just two, Dalavich near Taynuilt and Ardentinny near Dunoon, has already caused councillors endless grief and a "Save Our Schools" movement has sprung up.

Yet it could have been much worse. The Independent-controlled administration has ordered all departments to come up with savings that go beyond what is strictly required to comply with the Government's capping limit. But when councillors realised this would cut an additional Pounds 1.5 million from education, requiring cuts in school supplies, an end to the school meals service, secondary school closures and compulsory teacher redundancies, they recoiled and allowed education officials to aim for the exact capping target.

The council has now started to take the offensive, opening a series of eight public meetings this week to take its case to the electorate. These will run until February 7, 11 days before the crunch session of the finance and personnel committee that will take the final decision on all departmental budgets.


Among the increased costs which have inflated Argyll's education budget and which the council is helpless to do anything about are: * A Pounds 658, 000 increase by Strathclyde Passenger Transport in the school runs contract, including the statutory installation of seat-belts on school buses.

* Pounds 325,000 for teachers' early retirement inherited from Strathclyde Region.

* Pounds 150,000 in enhanced pay levels as teachers move up through the salary grades.

* Pounds 145,000 in psychological support for children and their families required by the 1996 Children Act.

Including 19 other items, total additional costs run to Pounds 1.8 million.

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