Highland Council’s current financial position is far worse than it predicted last year, it has been revealed.
In a corporate resources report to go before councillors next week, the council says the current year overspend is £5.5 million, far worse than its previously predicted figure of £2.2 million.
The local authority risks dipping into its historically low reserves to fund the overspend by the end of March when it must by law balance its books.
Most of the overspend is in the care and learning service, with spending on looked-after children rocketing to £3.1 million from around £900,000 predicted earlier in the year.
The council says there has been an increase in the number of children requiring placements and the complexity of their needs.
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A shortage of foster homes in Highland is adding to the problem, a council spokeswoman said.
An overspend of more than £360,000 has come from delaying the implementation of income from parking and toilets.
The council’s general reserve fund is currently £8.4 million, already well below Audit Scotland’s suggested level of between 2% and 4% of revenue budget reserves.
If the reserves were used to cover the shortfall, the council would be left with less than £3 million in its coffers to invest in its programme for change, or cover unpredictable contingencies.
The report outlines the measures the council says it is taking to balance the books.
It pledges to review all of its earmarked balances to ensure they are still being held appropriately. If not, they will be used to bring down the overspend.
The Devolved Schools Management balance, accumulated under or overspends in school budgets, will come under particular scrutiny.
The council says it is talking with head teachers about the reduction or removal of any balances held.
Jobs will only be advertised if absolutely necessary and there will be a restriction on recruiting agency staff.
The current freeze on non-essential spend will continue.
The council spokeswoman said: “There are no cuts to the current year’s budget. Vacancy controls and efficiency savings across the whole council are designed to manage the in-year overspend across all budgets.”
Shadow budget leader Dr Ian Cockburn said the Opposition would take this to the Audit & Scrutiny committee for a full inquiry.
He said: “This is not good enough for any organisation never mind a public body.
“Savings that were to be made last year have not been achieved and we have to know why.
“The new budget has just been passed and we will be seeking assurance that robust financial practices are put in place and implemented.”
