Audit Scotland's annual report on East Lothian Council presented to full council today

The 2021/22 Annual Audit Report carried out by Audit Scotland was presented to a meeting of East Lothian Council today (Tuesday 13 December).

The Audit Report includes an independent audit of the council’s annual report and accounts including a review of the council’s key financial systems and considers four main areas of public sector audit requirements; financial management, financial sustainability; governance and transparency and value for money.

Contained within the audit are a number of ‘main judgements’ which detail that East Lothian Council ‘has appropriate and effective financial management arrangements’ with ‘appropriate budget setting and monitoring arrangements in place’.

It is clear that councils face cuts to essential services on a scale not witnessed for a generation

Cllr Norman Hampshire

The audit acknowledges the considerable impact the global Covid-19 pandemic has had on delivery of council services and notes ‘wider external factors including the war in Ukraine and Brexit has resulted in huge challenges on recruitment and retention of staff. This has had a considerable impact on the council during 2021/22 and implications for the services it delivers, sickness absence levels, and the suspension of non-essential projects and activities, such as capital construction.’

However it also notes that ‘the governance arrangements introduced in response to the pandemic remain in place, are appropriate and operated effectively. There is effective scrutiny, challenge and informed decision making.’

Looking ahead, Audit Scotland details ‘the council faces significant uncertainty for 2022/23 and beyond. Scenario planning has identified a potential funding gap ranging from £41.1 million to £63.4 million by 2027/28 (inclusive of the delivery of existing, approved savings).

East Lothian Council Leader, Cllr Norman Hampshire, said: “The council, in common with other local authorities across the UK, is facing considerable financial challenges. During the pandemic we took a number of decisions to help support and protect key services, particularly to those most vulnerable in our communities, and did so in a financially responsible manner. It is very encouraging to read the key findings of this independent audit which recognises the sound management of the council’s public funds.

“In addition to the continued provision of front line services within budget, the audit also details the considerable success in achieving planned savings. The 2021/22 budget included planned savings of £0.9 million which were fully achieved but unfortunately despite the council’s best efforts the continued predicted funding gap poses severe difficulties for the coming years. Whilst Audit Scotland recognises that East Lothian Council has appropriate budget setting and monitoring arrangements and processes in place it also recognises ‘significant uncertainty for 2022/23 and beyond in terms of financial settlement, recovery from Covid-19, inflation and rising living costs.’

“Increased funding to local authorities must be a priority for national governments as it is clear that councils face cuts to essential services on a scale not witnessed for a generation. We will continue to work in partnership with CoSLA to continue to exert pressure for appropriate funding levels.”

The 2021/22 Annual Audit Report can be viewed on the council website Agendas, reports and minutes | East Lothian Council Item 3.

Published: Tuesday, 13th December 2022