Council faces ‘grim’ £66.7m budget gap

Highland Council has warned there will be ‘very hard decisions to make’ as it starts planning how it can plug a £66.7million budget gap over the next three years.

The shortfall from 2019 to 2022 could range from £34.1m to £124.9m, depending on potential changes in the amount of revenue grant funding received from the Scottish Government and the annual staff pay award.

However, focusing on a scenario of a one per cent annual reduction in government grant funding and an annual three per cent pay award, councillors have agreed to prepare for a budget gap of £66.7m over the three years.

Budget leader Councillor Alister Mackinnon said: ‘In Scotland, local government has probably been the hardest hit of the wider public sector in terms of real terms reductions in funding. This council has seen a cut in real terms over the past five years and the outlook continues to look grim.’

Over the period from 2013 to 2019 Highland Council has already had to approve budget savings of £102.1m as well as agree council tax rises of three per cent in each of the last two years to deliver a balanced budget.

‘The future is by no means certain,’ continued Mr MacKinnon, ‘but by assuming a budget gap of £66.7m, this allows us to prepare a plan which we can adapt as new information arises.

‘This way, by starting our planning early, we can prioritise and accelerate proposals or defer certain options if we can.

‘Work is already well advanced in developing information to inform the budget process.

‘This involves taking a close look at services and identifying where there are opportunities for becoming more efficient and commercial and ensuring there is best value for every penny spent.’

Mr MacKinnon said it would not be easy to make savings on top of those Highland Council had already made and income generation, commercialisation and efficiencies would become even more vital to protect essential services.

He said: ‘We do not have the luxury of the significant reserves we once had to give us any wriggle room. There will be very hard decisions to make and we all need to work across the chamber to do the best we can for the people of the Highlands.’