Major Capital Investment in Councils – follow up report January 2016
Podcast transcript
I’m speaking today with Douglas Sinclair, chair of the Accounts Commission to discuss a new report about how councils make major capital investments. 
Douglas, can you tell us what this report is about? 
Yes, it’s a follow up report to one we carried out two years ago, which provided a good practice guide to help councils manage and monitor capital investment. There has been progress since then but councils need to up the pace of improvement in how they manage their capital investment.
So what does this mean for the public?
Well, what we are talking about here are key projects that everyone relies on.  New and upgraded schools for our children, plus roads and housing and, as the horrendous flooding over the Christmas and New Year period reminded us, flood prevention schemes. 
All of these come under the category capital investment by councils, and sometimes we forget the sheer scale of it - seven thousand million pounds over the last three years.  Over six million pounds every day, every year. That’s a heck of a lot of public money. And six thousand million pounds is now committed to 245 more projects. So it’s really important that councils are getting the best value from that spending.
Now this is a follow-up report, so how have councils responded to the recommendations you made two years ago?
It’s good to say that many councils have taken a range of positive actions and there are examples of good practice.  For example, they’ve improved their structures and processes to help them manage capital investment activity more effectively. And all that’s good. But, as this report makes clear, there’s a lot more to do and they do need to up the pace of improvement.
In what way?
Well first, making it clearer how capital investment contributes to their strategic objectives. Second, why and how projects are prioritised, and third, clearly set out the benefits these projects are expected to deliver.  They also need to review business cases as projects progress and evaluate them after completion so that good practice and lessons learned can be shared, not only within the council, but other councils.
And councils also need to provide better information to their councillors to allow them to scrutinise capital investment effectively. 
What does the Accounts Commission want to see happen next?
Well, there are very clear pointers in the report. We hope councils will take the time to look at them in detail and make best use they can make of them so that they can deliver further improvements in how capital investment is delivered.  And that benefits not just councils, but the public as a whole.
Douglas, thank you. And the report is available to download from our website, www.audit-scotland.gov.uk 

Douglas, thank you very much.