Councils facing tough decisions amid more cuts
A key public spending watchdog has warned that Scotland’s local authorities are facing the most difficult spending challenges for years – as Stirling Council prepares to make £17million of cuts.
The Accounts Commission said even with additional Covid-19 funding accrued during 2021-22, councils were still faced with making “significant savings” last year in order to balance their budgets.
In addition, many councils have used reserves to bridge funding gaps and fund vital services, with this expected to continue this year.
The organisation says the extra £570m of funding announced for 2023/24 will help councils address some cost challenges, but insists “further change and reform” is required for councils to reach long-term sustainability.
Also, the report’s authors say that increasing amounts of the funding is ringfenced or provided on the expectation that it will be used for certain services, which removes “local discretion and flexibility” over how these funds can be allocated by councils.
The warning comes after Stirling Council launched its own public budget engagement in November, aiming to bridge a £17m funding gap.
It seeks to ask the public what services are most important to them - with the upcoming hole almost double the size of its annual roads and land services budget.
Finance and economy committee convener Cllr Margaret Brisley said: “This time last year we were looking at a funding gap of £29m - but that was over the next five years.
“Now, with everything that’s happened in the past year, including the significant increases to inflation, we’re facing more than half that figure just for the year ahead.
“That’s £17m - which is the equivalent of paying for 331 social workers for a whole year. That’s the real value of the gap we’re facing. These budget pressures mean we will have to continue to find ways to save money while protecting your key services, transforming how we work and generating more income.”
Finance chiefs at Clackmannanshire Council launched a similar consultation in the Wee County last month.
Chairman of the Accounts Commission, William Moyes, said: “It’s clear the financial situation of councils is increasingly fragile. Councils are having to deal with the effects of inflation, the increasingly desperate cost of living impacts and rising demand for services, whilst at the same time delivering vital day to day services to their communities.
“To be financially sustainable, councils must deliver savings and reduce reliance on non-recurring reserves to fill budget gaps. If they are to find a safe path through the difficult times ahead, councils need to focus more on service reform, alongside meaningful engagement with their communities, about what services can be provided given the financial pressures they are facing.”