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Aberdeenshire Council £7.1 million over budget in ‘stark reminder’ of pandemic’s impact on local authority finances

Councillor Jim Gifford, leader of Aberdeenshire Council.
Councillor Jim Gifford, leader of Aberdeenshire Council.

New figures showing Aberdeenshire Council went more than £7 million over budget in the months of April, May and June are a “stark reminder” of the pandemic’s impact on the authority’s finances, the council leader has said.

During yesterday’s full Aberdeenshire Council meeting, held online, members were updated on the current position of the council’s coffers after months of dealing with Covid-19.

Councillors heard from the council’s head of finance, Alan Wood, who told them the authority’s financial position “has materially changed from the original plan we set in March”.

Mr Wood said: “The year to date position for quarter one should have been a surplus of £14 million.

“This would have been as a result of costs tending to be lower in the first quarter of our financial year, while our income is relatively constant.

“The actual position after quarter one is a surplus of £7 million and therefore we’re worse off than compared to the expected position by £7.1m.”

Up to the end of June, Aberdeenshire Council incurred £42.465 million of additional expenditure related to Covid-19.

During that period, £40.499 million was provided by the Scottish Government towards these costs.

Back in June, councillors agreed to redraft the council’s medium-term financial strategy after Mr Wood explained that the pressure on the authority’s finances could increase to more than £30 million by the end of the year.

The medium-term financial strategy is expected to be set in November.

Council leader Jim Gifford said: “I think we’re getting very used to seeing these very stark reminders of what our response to Covid-19 has cost the council in financial terms, and the figures absolutely speak for themselves.

“In these challenging times we’re still spending a significant amount of money on continuing to provide services across the whole council area, but the financial shortfall detailed in this report is a challenge that we all need to address.”

Councillor Gwyneth Petrie, leader of the council’s SNP group, said: “This is our first update on the revenue budget where we begin to see the impact that Covid-19 has had on our finances, with a significant deficit just in the first quarter.

“The challenges will be addressed during the budget process, but I think we can all agree, as has been said, that we have a difficult few months ahead.”

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