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Opposition tells Highland Council administration it needs to improve its act or it will go bust

Highland Council Budget Leader, Councillor Alister Mackinnon.
Highland Council Budget Leader, Councillor Alister Mackinnon.

Highland Council bosses yesterday admitted that a lack of governance is behind the local authority’s current financial crisis.

This prompted opposition councillors to accuse the administration of ‘walking a tightrope without a safety net’ and potentially leading it into bankruptcy within two years.

The council has weeks to close a £5million overspend before the end of this financial year, and risks dipping into its already depleted reserves to balance the books.

More than £3m of the overspend is from demand-led children’s care, but the remainder is due to undelivered savings.

Budget leader Alister Mackinnon told councillors that he acknowledged the ‘lack of governance following the income targets that were set under redesign savings’.

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Mr Mackinnon was referring to the more than £2.25m savings which were agreed last February for the current financial year (2018/19), but have so far delivered only £332,000.

A large part of the savings was supposed to come from the introduction of car parking charges and programme of public toilet closures/charges.

These caused an uproar when they were introduced into the council’s budget for the current financial year (2018/19) with councillors, community groups and members of the public up in arms about the lack of consultation over moves which they felt would significantly impact their communities.

Mr Mackinnon told councillors that these unrealised savings targets would be rolled over to next year’s budget.

He outlined the range of measures underway to close the gap, which includes vacancy controls, restricting non-essential expenditure, stopping non-essential travel and restricting agency and overtime spending.

Previously earmarked balances, such as those in school budgets, will also be raided to balance the books.

Corporate resources director and deputy chief executive Derek Yule said head teachers had agreed to the withdrawal of some of these reserves to balance the books this year.

When Mr Yule announced his retirement two days ago, he said: “I know that the council is in a strong and viable position to address the many future challenges.”

Opposition councillor Richard Laird said: “Last year’s budget had a number of savings lines which can only be described as fantasy.

“With these budget pressures this coming year and every year thereafter this council is walking a tightrope without a safety net.

“We need to make sure the budgets we set can be achieved, because if we don’t there’s a real risk that we could be in this position again, and if that happens, we’re bust.”

SNP councillor Ron MacWilliam said: “It has been a breath of fresh air to hear the budget leader today giving an admission that there has been a lack of governance promising hugely improved financial governance.

“If they run the local authority the way they did this year, overspending £5.5m with only £2.9m in revenue reserves, the council will indeed be bankrupt and the Scottish Government will be required by law to take over.”

The council’s chief executive Donna Manson said a new corporate plan would be announced next week, focusing on scrutiny and driving performance.

She said: “This and our Programme of Change will underpin the work of the council moving forward, ensuring that we use all our resources to the best effect to ensure we are an efficient, responsible and sustainable organisation.”

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