‘Challenging scenario’ after shock budget cut for Highland Council

© DC ThomsonHighland Council Budget Leader, Councillor Alister Mackinnon.
Highland Council Budget Leader, Councillor Alister Mackinnon.

Highland Council bosses have warned of a ‘challenging scenario’ after receiving millions of pounds less in funding than expected.

The council needs £604m to deliver the current level of services, but will be more than £30m short – some £10m more than expected.

The gap comes from a 2.4% reduction in grant funding, with a significant part of that ring-fenced for delivery of Early Years and Health and Social Care services, plus additional pressures from public sector pay awards and teachers’ pensions.

The council had planned for an anticipated shortfall of £66.7 million over the next three years, around £21 million a year.

Budget leader Alister Mackinnon said “We were already preparing for a significant reduction, but this news sets us a huge challenge and may mean we will need to bring forward savings from future years.”

Last October,  council bosses including Mr Mackinnon and chief executive Donna Manson embarked on a region-wide round of public meetings to listen to and share information with communities about the budget realities being faced by the local authority.

Councillor Mackinnon said: “The work we have been doing stands us in good stead and we are much better prepared for a challenging scenario.

“The situation will require big changes to what we currently do and how we do it and will require support from our workforce and across the political spectrum.”

© DC Thomson
Highland Council Chief Executive Donna Manson.

Mrs Manson said: “The overwhelming theme has been that the council can be much more efficient and our aim is to do everything possible to demonstrate that we are listening and acting on what we have heard.”

Mr Mackinnon insisted there were no proposals for any voluntary or compulsory redundancies.

He said: “We have taken a new approach to the budget setting this year, looking at re-basing all budgets, focusing on outcomes and removing all inefficiency.

“We are also continuing to work on current in-year pressures with tighter financial controls and a freeze on filling vacant posts.

“We are determined to do the best we can for Highland within the resources we have and to deliver a budget which protects essential services and jobs which support the wider economy.”

A COSLA spokesman said: “We have significant concerns about the draft budget as announced, and the impact on individuals, communities and the Scottish economy.

“Local government cannot invest in people, places and inclusive growth with a core that is reducing, and where local choice and flexibility is squeezed by national policies and ring-fencing.”

The Scottish Government said Highland Council could raise council tax to support delivery of local services.

Highland Council’s opposition leader Maxine Smith said: “The budget gap is indeed something to be concerned about.

“The gap was wrongly assuming the Scottish Government would find money from an ever smaller pot it gets given from Westminster.

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“However, had the council delivered all of its promised savings this year and had it already planned ahead and taken account of known pressures such as job increases and pensions, it would not have been setting out with such a massive gap and the situation would have been much more manageable.”

She added: “We have not seen the worst of the proposed cuts yet, as the administration has kept very tight lipped about its plans, however we have worked on our own alternative budget items and do hope that with some negotiation we can, as an opposition help to ease the burden of devastating cuts or job losses.”

A Scottish Government spokesman said:  “Using their council tax powers they could generate an additional £3.8 million to support the delivery of essential local services.

“With this funding, Highland Council has the financial freedom to decide on their priorities for the coming year, with certain statutory requirements like education.”