Local authority spend - Infuriating waste of our tax money

IF the average household was to manage its income the way local authorities do, virtually every family in the country would need MABS, the service that advises people in financial trouble about money and budgeting.

That’s the inescapable conclusion to be drawn from today’s front-page report of runaway overspending by local authorities on projects involving hundreds of millions of euro.

The findings are a damning indictment of Government failure to clamp down effectively on the waste of taxpayers’ money that has been going on for years. Indeed, considering its own performance in the electronic voting debacle and other costly misadventures, the Government itself has been to the fore when it comes to squandering taxpayers’ money.

Given the glaring need to bring public spending under control, the Department of Finance attached strict terms and conditions to the National Development Plan, effectively requiring forensic audits into large-scale expenditure on major infrastructure schemes.

A tangible, if unpalatable, result of this approach, the report centres on an independent audit, commissioned by the Department of Environment, into how local authorities spend taxpayers’ money. By any yardstick, the findings are alarming.

In these hair-shirt times, it is a scary account of infrastructure projects running over budget, not being properly planned and tender rules being breached. In more than two-thirds of cases, spending rules laid down by the Department of Finance were ignored.

Covering the period 2006-2007, the audit reflects a mindset within the public service that seems utterly divorced from the fundamental realities of budgeting in the real world. If companies in the private sector were to operate like this, heads would roll.

The bald implication of the scrutiny carried out by accountants Ernst and Young between August 2008 and February 2009 is that little has changed, despite the exhortations of Finance Minister Brian Lenihan.

Though Environment is one of the biggest spenders, other departments such as Health and Education also have major budgets. There is now an urgent need to assess how they are being managed in terms of giving the taxpayer value for money.

The Department of the Environment has written to all local authorities, demanding they review their spending habits. And since the audit report was completed only six months ago, we can be sure similar habits are replicated right across the public sector. As the timeworn adage has it: easy come, easy go.

We can ill afford a culture that leads to such a costly drain on the Exchequer. Especially now that the economy is on its knees, more than 430,000 are out of work, young people are leaving the country in droves and the Government is borrowing over €30 million every day of the week to pay the wages of public service workers.

Against this depressing backdrop it is patently clear the kind of thinking that results in cost-overruns in the public sector must be rooted out. It is unacceptable that local authority executives should equate success with getting a grant, rather than how it is managed, to ensure taxpayers get value for their hard-earned money.