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‘Creative accouting’ accusation in relocation budget

11:00 21 January 2014

The EDDC offices at Knowle in Sidmouth as it is today. Photo by Simon Horn. Ref shs 7705-15-12SH To order your copy of this photograph visit www.exmouthjournal.co.uk and click on myphotos24

The EDDC offices at Knowle in Sidmouth as it is today. Photo by Simon Horn. Ref shs 7705-15-12SH To order your copy of this photograph visit www.exmouthjournal.co.uk and click on myphotos24

Archant

District council budget bosses have been accused of ‘creative accounting’ and being unable to justify setting aside £400,000 of taxpayers’ cash for the authority’s relocation from Knowle.

The amount, split over the next two financial years, has been earmarked as a ‘marker’ to show there will be an expense to the mooted move.

But it is unclear exactly how the money will be spent – or what the final figure will be.

Some members said they would not accept such budgeting in their own businesses, but others described it as ‘perfectly sensible’ at a meeting on Wednesday.

A ‘disappointed’ Councillor Roger Giles told colleagues on the overview and scrutiny committee: “It is such a substantial sum of money – what is it going to be used for? What is it going to be spent on?”

Councillor Peter Halse added: “We have already spent a small fortune [on the relocation] and now we are talking about even more money.

“If we approve this it gives us permission to print money we didn’t know we had.

“We have created £400,000 – I don’t like that way of accounting.”

He said that he was not opposed to the relocation if the right offer was made, but said that ‘creative accounting’ is not necessary.

Justifying the move, head of finance Simon Davey said the allocation will not affect the budget’s bottom line.

Committee chairman Tim Wood added that it seems ‘safer’ to flag up the expense before the money is needed than revealing it at a later date and dubbed the move ‘eminently professional’.

Chief executive Mark Williams said there was ‘nothing sinister’ about budgeting for the relocation in this way, and the authority will be seeking advice from experts on how to proceed.

A council spokesman explained that the amount is an ‘educated guess’, included to cover the costs of the initial project, should a site be approved.

He added: “Once members have made a decision on office relocation and have agreed the associated costs and receipts then these more exact costings will be included in the capital programme to replace the estimates previously put in as a marker.”

The authority has pledged to keep the move cost-neutral to taxpayers and is considering taking out a loan of up to £4million to fund it.

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