More improvement needed in management of capital expenditure, Accounts Commission finds

Councils need to make more progress in their management of capital investment, according to a new report from the Accounts Commission.

The report, ‘Major Capital Investment in Councils: follow up’, found that councils need to improve the way they manage major projects like schools, roads, housing and flood prevention.

Between April 2012 and October 2015 councils completed 149 capital projects and in October 2015 they had 245 projects worth around £6 billion underway, over 40 per cent of which are schools.

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Councils have spent £7bn on capital investment over the last three years, more than half of Scottish public sector capital expenditure.

The report highlights some progress on recommendations made by the Accounts Commission in 2013, as well as actions taken and examples of good practice, but overall it concludes they need to increase the pace of improvement.

Councils have improved their structures and processes to help them manage capital investment activity more effectively, it said, but they need to do more work to comply fully with good practice.

The commission found weaknesses in capital investment planning. It said councils need to do more to develop their long-term capital investment strategies and plans, particularly regarding how capital investment contributes to their strategic objectives, how projects are prioritised and the benefits the projects are expected to deliver.

It recommended that they review business cases as projects progress and evaluate them after completion so that good practice and lessons learned can be shared within councils and with others.

Councils also need to provide better information to councillors to allow them to scrutinise capital investment effectively, it said.

Accounts Commission chair Douglas Sinclair said: "Councils spend a great deal of money on capital projects such as schools and roads which are vital for local services.

"Our 2013 report recommended actions to help councils improve performance. They have made some progress since then but they need to do further work to fully comply with good practice.

“In particular, they should provide councillors with better information through clear, good quality reports to enable them to effectively challenge and scrutinise capital investment decisions, plans and progress."