Fears for public services as £129m black hole looms

● Warning equal pay claims could cost tens of millions

Scotland’s biggest council is facing a £129 million budget black hole in the coming years and there are concerns over its ability to deliver key services, according to a public spending watchdog.

The problems facing Glasgow are worse than elsewhere around the country, while the cost of settling equal pay claims could also run into tens of millions of pounds.

But the city has made “steady progress” in dealing with recent financial challenges and has a plan to tackle the looming situation, according to the Accounts Commission report.

A funding gap of £129.1m has been identified in council coffers over the next three years as budgets are squeezed.

Glasgow was also forced to set aside a £35m provision in its 2017-18 financial statements towards the potential cost of settling pay claims, after losing a Court of Session Case involving 8,000 claimants last year.

Today’s report states: “We are seriously concerned about how the potential financial cost of the matter might affect the council’s ability to deliver its services.”

About £270m has already been cut from budgets since 2012, although today’s report says service have continued to be delivered. Key improvements have been made in recent years in areas including educational attainment, the wellbeing of children and wide heath outcomes in the city, the report finds.

Effective leadership and record of strong financial management, with £102.5m of savings made through its Transformation Programme over the last two years, is also recognised.

Graham Sharp, chair of the Accounts Commission, said: “The scale and complexity of Glasgow’s socio-economic challenges are unique in Scotland and, like all local authorities, it’s facing considerable financial pressures.

“The council has made steady progress since our last report and has a good track record in making savings, but we are seriously concerned about the impact that resolving equal pay claims could have on how the council delivers public services.

Council leader Susan Aitken said the “clear and steady progress” delivering services to communities has been recognised in the report

“The challenge of resolving equal pay is substantial and it would be unusual if it wasn’t a focus for the audit team. However, it is a challenge we are committed to deal with and we are making substantial progress.”