Cautious Aberdeen City Council to appoint financial monitoring panel to safeguard bond venture

Cash-strapped Aberdeen City Council is taking steps to reduce the risk of its £370million bond by recruiting a team of financial monitoring experts.

According to reports, the authority has plans to appoint a three-strong “economic policy panel” at a cost of more than £2,000 a day.

Last year Aberdeen took the pioneering step to become the first authority in Scotland to complete a successful bond issue.

The cash raised last November has been allocated to a series of infrastructure projects in the city.

But the economy of the venture is reliant on the authority maintaining its Aa2 rating from Moody’s.

The steps to appoint experts to monitor the situation comes ahead of the credit ratings agency carrying out its first annual review in late September or early October.

Aberdeen’s planned panel would see members expected to do 12 days’ work a year including visiting the Granite City once every six months, the local Press and Journal newspaper has reported.

Their allowances – along with travel, recruitment and administration costs – are expected to total between £60,000 and £80,000 a year.

Council officers believe the panel would provide a “robust check” on the economic analysis provided to the ratings agency and send out a “positive signal to existing investors”.

Recruitment adverts are due to go out soon for “independent experts to provide an annual commentary on the economic performance of the city and wider region”.

Interviews are planned to be held next month.

Council leader Jenny Laing insisted the panel had “an important part to play”.

She added: “We have demonstrated our ability to innovate and to lead from the front in local government finance – but we cannot rest on our laurels.”

However, with £20milllion of cuts being made at the council, the idea has met with strong political opposition.

SNP group leader Stephen Flynn said: “The SNP group opposed the creation of this panel from the outset as we remain entirely unconvinced as to what actual purpose it will serve beyond creating a further layer of bureaucracy for politicians to hide behind.

“Everyone is aware that the local economy is in a state of change and we have to diversify and enhance our offering.”