£10.6m health and social care overspend ‘a risk’ to Moray Council finances as budget day looms

Members will be asked to approve a council tax freeze at the meeting next week.

By Hazel Lawson, Local Democracy Reporter

February 22 2024, 3:23 pm

Image: Moray Council

Moray Council will set its budget next week – with the job of finding savings of £11.7 million.

But a £10.6 million overspend by Moray Integration Joint Board, interest rates and winter weather are posing a financial risk to the local authority.

The IJB, responsible for certain delegated health and social care services, is looking at how it can address the overspend.

If that is not successful the council could be liable for around £5 million of it.

And if interest rates rise by 1% it will increase the local authority’s spend on loans by £1.5 million.

Council tax expected to be frozen

To add to the woes, anything other than a mild winter will incur an additional spend. That figure in 2022/23 came to £700,000.

In her report chief financial officer Lorraine Paisey said: “An over-commitment by Moray IJoIJB which, if not eradicated, is anticipated to increase the call on the council’s funds by a further £5 million.

“All of these factors mean that while the structural deficit remains, and as further fluctuations in the budget gap are inevitable, progress to remove that deficit must continue with pace and urgency.”

There are also concerns the budget is being stretched by additional commitments brought in by the Scottish Government.

Moray Council needs to make £11.7 million in savings in the next financial year.

This included the extension of free school meals.

While the overall savings needed for the financial year 2024/25 amount to almost £19.2 million, nearly £7.5 million have already been agreed.

That includes an increase to the brown bin permit charge to £50.

The Scottish Government council tax freeze will hamper the council raising extra money.

Council liable for £5m of IJB overspend

But at the meeting next week, members will be asked to approve that council tax freeze – and set aside almost £9.3 million to provide for budget pressures.

They will also be asked for reserves of £701,000 to be used to reshape services.

Money for Moray Growth Deal totalling £1.136 million is expected to be released.

And £10,225 million from Covid reserves, which can be spent on other things, could be used to balance the budget.