YORK’S council leader has been accused of setting up a £2.5 million “vanity fund” and throwing a veil of secrecy over democracy in the city.

City of York Council’s ruling Labour group plans to create a “delivery and innovation fund”, allowing up to £100,000 at a time to be spent on initiatives agreed by the authority’s leader, Coun James Alexander, and a senior officer.

The move is part of the Labour’s budget plans for the next two years, to be discussed tonight at Guildhall, but has been criticised by Conservative leader Ian Gillies claims it is a sign of Labour’s “controlling” approach to power. He said he feared the use of the money would be purely at Coun Alexander’s discretion.

The fund enables money to be spent without the approval of the cabinet as a whole. A similar Venture Fund existed previously, and helped pay for new flood defences in Peckitt Street and public toilets in Silver Street. Expenditure from that had to be repaid, money from the new fund will not.

Coun Gillies said: “It can essentially be used for anything Coun Alexander wishes to use it for. However worthy the expenditure might turn out to be, it can’t be right to set up a £2.5 million fund for use purely at the council leader’s discretion. One has to question not only Coun Alexander’s judgement for proposing what amounts to a “vanity fund” at this time of cutbacks, but his apparent need to control as much of the council’s decision-making apparatus as he can.”

Coun Alexander said the fund – which would contain £1 million in 2012/13 and £1.5 million the next year – would only be used once full business cases had been presented. He said spending would be “published openly”, and the aim was to save public money. A report said the fund would support major projects, areas requiring “one-off investment” and “new and innovative ways of working”. The release of money would be agreed by Coun Alexander and Ian Floyd, director of customer and business support services, with anything more than £100,000 requiring cabinet approval. Coun Gillies said the fund was evidence of Labour’s “secrecy and hyper-control of events” since taking power last May. He also cited their plans to abolish public decision sessions for cabinet members, a reduction in cabinet meetings and the “last-minute” release of budget papers.

He said: “The council has never been run like this before and one has to ask why Labour appear unable to trust in the democratic process.”

Coun Alexander said spending like that in the new fund had been sanctioned in the past by council leaders and chief officers through the Venture Fund. He said: “Coun Gillies clearly does not understand how the council operates.

“The criteria for allocation of this funding will be a business case based on what long-term savings can be achieved, such as spending on resources now to ensure a shared service between councils can operate to reduce costs to the taxpayer.

“This is essentially the Venture Fund under another name.

“Coun Gillies sought to increase funding for such capacity-building four years ago, so it does not seem right that when he seeks to do this with the same rules, it is right, but when I do it, it is wrong.”

He said all fund expenditure would be available for scrutiny.

‘Personal pot’ jibe by Greens

GREEN Party councillors have also called for the proposed new “delivery and innovation fund” to be scrapped.

The group’s amendment, which will be debated at tonight’s budget meeting, also proposes reversing funding cuts to voluntary sector organisations, including the Future Prospects job-finding initiative, youth work and neighbourhood services.

Green leader Andy D’Agorne said the fund was “ill-timed and undemocratic” and would act as a “personal pot” for Coun Alexander.

He said he feared for the future of care services for the elderly under plans for some areas to be outsourced to the private sector.

“The ruling Labour group should be working more with staff unions, voluntary and community organisations to create new ways of delivering these services, rather than privatising care services and axing most of the council’s neighbourhood work,” he said.

He also criticised the proposed “restructuring” of ward committee budgets to save £220,000 and plans to spend £200,000 on a closed-circuit cycle track at the University of York at the same time as cycle training for young people is facing a cut.