Plans for new schools and road improvements across the Highlands have been thrown into doubt as council chiefs admit they can’t afford them.
Councillors yesterday reluctantly agreed to review their ambitious capital spending programme after a “shocking” forecast that almost £200million may need to be found within five years.
The local authority’s current annual budget is £570million.
The fabric of schools and roads will be the likely casualties if no more cash can be found because they are not ringfenced.
Finance chiefs confirmed that the current capital programme is “unaffordable” and the local authority faces “significant challenges”.
The council also asked Scottish Government to tell them what money it will get inthe next five, instead of annually, to enable councils to plan long term.
And council leader Margaret Davidson told a full council meeting in Inverness that she was “tired of the half truths from Scottish Government”.
She added: “We’ve seen too much smoke and mirrors. They give the impression of a cash bonanza yet when you look at the detail you find you’ve lost out.
“Often, any new money is liked with stringent conditions leaving councillors no room for manoeuvre.”
After the meeting, the council’s finance director Derek Yule confirmed that the capital programme was currently unaffordable if additional sources of revenue were not identified.
A total of £103million is set to be spent on education by 2019 and roads have £7.2million set aside for each of the next seven years.
Mr Yule, whose team has forecast a financial black hole of between £129.7million and £186.9million over five years, said: “What you’re looking at is maybe some delays in some of the projects although there are options such as alternative build, which has been used successfully by other councils. But I think there’s a feeling that we have to reduce the specification of some of the schools.
“It’ll be up to the council to decide. But if it wants to sustain a programme at the current level it’ll incur additional borrowing costs and that will create further difficulty in trying to balance the budget.”
Liz Gordon of the GMB union, which represents almost half of council staff, said: “I’m shocked by these figures. We’ll be monitoring developments closely and fighting to ensure our members’ jobs are safe.”
A spokesman for the Scottish Government said: “We’ve treated local government very fairly despite the cuts to the Scottish Budget from the UK Government.
“Taking into account the council’s financial settlement plus the other sources of support available through increases in council tax income and support through health care integration, Highland Council’s overall increase in spending power to support local authority services in 2017-18 amounts to £20.4million (4.4%).
“The Scottish budget process is linked to the UK budget process and the Scottish Government only has firm budget allocations from the Treasury for the next year.”
A budget review group is currently considering the possibility of multi-year budgets.