The Highland Council says it is preparing for a budget gap of over £80 million due to the impact of the coronavirus crisis.
Councillors were briefed on the budget situation yesterday but that prompted Conservative opposition leader councillor Andrew Jarvie to describe the statement as ‘ludicrous and impossible’, saying no balance sheet has been provided to justify the claim.
Budget leader, councillor Alister Mackinnon, said:“Officers are currently preparing a full impact analysis to assess lost income and new cost pressures we are facing.
“Just in terms of income lost, we have seen a 63% drop in our planning income alone, with a 52% drop in planning applications and a 50% drop in building standards applications in comparison to the same five-week period last year.
“So far this year, our car park income has dropped from £77,000 to just £525 and we expect to lose some £5 million in council tax receipts.
“Other losses will include licensing fees and income from events and festivals and from advertising.
“We are facing tremendous new cost pressures at the same time, including additional adult social care, welfare, supply teaching and the costs of providing child care for key workers, which alone is amounting to £500,000 every 10 weeks.”
Mr Jarvie, however, said he had no real idea how the figure of £80 million was arrived at.
He said: “We were told the situation was ‘fluid and complex’ and there would be another briefing.
“We were given bullet points and no word of any savings due.
“There will be huge off-setting of savings in energy and fuel use alone and from schools and depots being closed.”
Mr Jarvie added that money had been flooding in from the UK and Scottish Governments to assist the Covid-19 effort.
He said: “They’ve been telling councils to let them know what the challenges are and they will top up.
“But this ludicrous figure undermines any case for additional funding.”
Opposition SNP joint-leader Maxine Smith said: “As part of the current cross party political leadership, the SNP leaders are working closely with the administration to examine the contributors to this £80 million gap in more detail.
“Our normal revenue annual turnover would be around £300 million.
“In times like this, we have had to put people and their health and well-being first, and that was always going to hit the finances.
“We knew the latter would suffer and the council is not alone in this as businesses worldwide have crashed.
“We will work together with all partners, business included, to help revive the Highland economy after the crisis is over.
“Meantime we do not see this as a time to score petty political points as we truly are in this together and together we will make our way through it and out of it.”
Mr Mackinnon said many of the budget savings agreed in March would not now be deliverable.
He said: “We are preparing for recovery and renewal in the medium to long term, but we are a long way from any return to normal.”
