Highland Council’s budget leader Alister Mackinnon brought a glimmer of cheer to councillors on Corporate Resources committee in Inverness yesterday when he confirmed the council has halved its projected overspend and was hopeful of achieving a balanced budget or ‘maybe even an underspend.’
He said: “The overspend has reduced from £5.112 million to £2.238 million, and that is as a direct result of the urgent corrective action that we took as an administration.”
Any underspend would help replenish the council’s depleted reserves, currently standing at around £8million, he said.
Mr Mackinnon said the budget team now gets weekly reports to monitor income and expenditure, and are also monitoring recruitment where savings are currently being made.
The council has frozen new recruitment in all but essential posts for the time being.
Mr Mackinnon warned there were still huge challenges ahead, one of them being a bad winter.
He said: “It’s started early this year, and it’s something we will have to monitor as well.”
He said unforseeable budget pressures arise each year from the council’s responsibility for looked-after children, but emphasised that the council would continue to do “whatever is right for the child.”
Mr Mackinnon said another looming risk to council finances are the as-yet unsettled public sector pay awards, with every 1% pay rise representing around £3.5million as a cost to the council.
He said: “Anything above this is unaffordable in the current climate and would have to be funded by savings this year and ongoing. We’re no different to other councils but it is a huge risk for us.”
