Crisis-hit Aberdeen City Council was branded an embarrassment last night as the clamour grew for its leaders to resign.
Business leaders said the actions of the council, which is facing £50million of budget cuts, were in danger of scaring business away from the city.
Aberdeen and Grampian Chamber of Commerce said its members were “very upset and angry” about the situation because it was sending out a dreadful message to the rest of the UK.
The Federation of Small Businesses urged politicians to pull together to find solutions.
Council leader Kate Dean and her deputy, Kevin Stewart, were under increasing pressure to resign after their opponents claimed the city was in danger of going bankrupt.
The Lib Dem-SNP administration claims the revised deficit figure has always been in the public domain, although it has never moved to correct scores of media reports that it is facing £27million of cuts.
Opposition Labour councillors say Mrs Dean is “deluded” if she thinks she can explain away the current position by simply saying the figure is not new.
Group spokesman Willie Young said: “There is a fair chance that if the council does not sort itself out we will go bankrupt – that is a fact.”
Aberdeen and Grampian Chamber of Commerce president Mike Salter said: “The level of cuts, whether they are £27million or £50million, are quite simply embarrassing for the city. It is sending out a dreadful message to the business community.
“They are very upset and angry and it is giving out entirely the wrong message for the city and the wider audience.”
Mr Salter said there was no doubt the financial problems counted against the city as it tried to attract new business.
“Part of the problem is the city council got the lowest settlement (from the Scottish Government) of any local authority in Scotland but, having said that, Aberdeenshire got the second lowest but it seemed to have managed it better,” he said.
“The city is where it is and, instead of trying to knock political spots off each other, politicians should be getting their heads together and come up with cross-party solutions.”
Andy Willox, of the Federation of Small Businesses, which has 20,000 members in Scotland, said: “The level of budget cuts being faced is not welcoming news.
“For anyone in Aberdeen, be it a business or those who live there, it is embarrassing for your council to be highlighted in this manner, which is not positive.”
Aberdeen North SNP MSP Brian Adam said: “The people of Aberdeen are no longer willing to accept any response that does not come forward with a solution to ensure services can continue in a viable way for the future.”
Finance Secretary John Swinney said yesterday the full scale of the cuts had emerged because of the experts he sent in to reverse the authority’s precarious financial position.
“What the material that has emerged highlights is that, over the course of the past 12 months, the city council has been identifying a whole range of changes that are required to be made to service provision and service delivery,” he said.
“The city council has been accumulating a very serious financial problem and a very serious financial challenge which has been highlighted clearly by the Accounts Commission.”
Asked if he thought the city’s residents had been misled by the authority on the size of the budget savings needed, Mr Swinney, MSP for Tayside North, said this was not a matter for him.
“What is a matter for me is to ensure the people of Aberdeen operate in a city which is financially sustainable,” he said.
Meanwhile, council leaders are gathering today for the weekly meeting of the urgent-business committee to discuss the issue.
Mr Stewart said: “These figures have always been in public domain.
“We have a huge task to do but I am determined we will make the budget savings and put the city back on a firm financial footing.”
Tommy Campbell, of the T&G branch of the Unite trade union, said he would be demanding an explanation of why the council thought it prudent in the current climate to spend £300,000 on a feasibility study for a £53million community stadium.