Council chiefs want to slash tens of millions more from Aberdeen’s budgets – including cutting the city’s wage bill by £40 million.
A renewed wave of restructuring is being proposed at Marischal College.
Top officials claim continuing on as things are is “not sustainable”.
Furthermore, they warn there is risk, if they can’t balance the books, of investors pulling out of Aberdeen.
The city brought in £370m floating bonds on the London Stock Exchange.
Aberdeen City Council’s current spending ‘not sustainable’: Tens of millions in cuts needed
To address looming budget gaps, they want to bring in a second wave of the controversial restructure known as the target operating model (Tom).
The reorganisation was launched in 2017, aimed at saving £125m over five years.
That target was hit, though council chiefs complain that how much money they get from the Scottish Government has faced real term cuts for a decade.
Last year, budgets in Aberdeen were slashed by more than £30m – the most anywhere in Scotland.
And now, even middle-of-the-road estimates suggest another £134m will need to be cut by financial year 2027-28.
As well as the vast reduction in staffing costs, the council could reduce spending on contractors.
That would save another £54m over the next five years.
Bosses are also suggesting the need to increase income by around £32m in that time, through making better use of its buildings and seizing opportunities in the move to green energy.
Meanwhile, £8m would be saved by reducing spending on council buildings such as schools, housing and depots.
Chiefs also want to rethink the relationships with council arms-length organisations, such as Sport Aberdeen and Aberdeen Performing Arts.
Aberdeen’s shortfall: Best case £47m, worst case £211m
Savings would balance the shortfall in what customer services director Andy MacDonald called the “central scenario” in his forecasting.
By financial year 2027-28, the budget blackhole faced by the local authority is expected to reach that projected £134m.
But it could be £47m in the best case scenario or £211m on the downside, the director said.
Making the most of new technology is also expected to plug the gap.
However, the first stage of the Tom already focused on digital solutions.
In May, the SNP and Liberal Democrat partnership taking charge of the council vowed to continue the policy of no compulsory redundancies.
Cuts continue to loom across Aberdeen City Council’s work
These plans come as councillors will also be asked to next week cancel or delay key projects.
New schools and nurseries could be ditched in the face of rising construction costs.
Now, in addition, Mr MacDonald is seeking approval for Tom 1.2 after the turmoil of Covid.
In a report prepared for councillors, Mr MacDonald said: “The council must fundamentally address either HOW it delivers services going forward (service design and transformation) or WHAT it delivers (demand management and self-help).
“Clearly demand management could simply be interpreted as stopping the provision of services and should be seen as a last resort.
“The more dynamic approach is to look to transform the organisation going forward.”
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