Warning that pay rises are ‘unaffordable’ with no extra financial help

Angus Council’s finance chief has said pay rises to a large chunk of the workforce are “unaffordable” unless council tax increases or more government cash comes in.

The local authority’s director of finance, Ian Lorimer, warned of the pressures at the authority’s scrutiny and audit committee on Tuesday.

He said current funding from the Scottish Government and revenue from council tax would not be enough to meet the already-agreed pay rise of 5.8% for lowest paid staff.

Speaking at the online committee, convener and Conservative councillor for Monifieth and Sidlaw, Craig Fotheringham asked: “We’re hearing about public service pay increases. What can this council afford? We’ve seen it in the press the past few weeks, 5%.

“Can we afford 5% for wage increases?

“Or is it going to be 1.5-2%?”

Mr Lorimer replied by pointing to the local authority’s projected £51m shortfall over the next three years as a likely block.

He said: “The funding position of the council... when council considered the medium-term budget strategy on November 3, where we projected a £51m gap over the next three financial years – that’s 19% of our current budget. “That’s the context. “That suggests that pay increases, if they’re not funded by additional support – through government or through council tax increases – are really very difficult to afford and that remains the position.

“But, I’m probably a bit happier to say a bit more about that when I can provide the detailed report that will be coming to council in a couple of weeks.”

The council’s chief executive Margo Williamson said: “As we look over the changes required and the capacity we’ve got to change over the next three years, it is really, really challenging.

“More challenging than I have ever experienced in my whole life in public service.”

“We’re looking to work with other councils, public bodies and looking to what other people are doing... throughout the UK, who are also facing changes to finances and how things are currently delivered.”

Kent and Hampshire councils in England recently warned that even “drastic cuts” to their services might not be enough to save them from bankruptcy.

SNP Councillor for Arbroath West, Letham and Friockheim, Martin Shepherd asked: “How will this council need to look in maybe 20 years’ time... if the situations doesn’t change in terms of budgets, inflation?

“The future’s always the great unknown... (What) is the longer term future of the council?”

He added: “We know that the short term is going to be hard.

“It worries me as a councillor and I just hope that we can all work together.

“We don’t want to see special measures – no one wants to see that happen to any council, just speaking broadly.”

“We projected a £51m gap over the next three financial years

PRESSURE: Angus Council director of finance Ian Lorimer suggested more money – through government or council tax increases – was needed.