Council facing 10-year funding gap

The report indicates that the authority could face a funding shortfall of up to £156 million

The potential scale of the financial challenges facing North Ayrshire Council over the next 10 years has been laid out in a special report to councillors this week.

The report indicates that the authority could face a funding shortfall of up to £156 million in its revenue budget over the next decade, with approximately half of that total – £70 million – occurring within the next three years.

This means the council will have to think hard about the services it delivers, how these are delivered and its partnership with local communities. A funding gap of this scale is expected to impact on the council’s workforce.

The report, which details the council’s longterm financial outlook from 2018/19 to 2027/28, was considered by cabinet members on Tuesday.

North Ayrshire Council leader Joe Cullinane said: ‘Since 2010, North Ayrshire has had to save £73 million as a result of austerity and now we face this significant gap in our funding over the next decade.

‘The difference between projected demand for services and anticipated funding shows that we need real terms increases if we are minimise the potential impact on existing jobs and services while meeting increased demands.

‘This is clearly a very worrying report. We will need to work with our communities, public and third sector partners and the trade unions to respond to the challenge and make the right decisions for our communities.’

Since 2010/11, North Ayrshire Council has had to make savings of £73 million from its revenue budget due to funding not keeping pace with the cost of and demand for services.

This new report provides a long-term financial outlook giving the council time to plan its response to future financial challenges. It is based on the council’s best estimates and anticipates that North Ayrshire’s grant funding will reduce at the same time as the authority faces a higher demand for services and increasing costs.

The outlook shows that the council will have to meet increased commitments such as inflation, workforce costs, and an increasing demand for services, particularly for a growing older population and vulnerable residents.

The projected shortfall is expected to impact on the size and shape of the council’s workforce and a commitment will be made to actively engage with staff and the trade unions as plans are developed.

Councils are legally required to set a balanced budget, meaning that expenditure cannot be more than the council’s income.