Doom and gloom on the horizon in the pre-budget report published last week by Highland Council
"The Highland Council is anticipating it may have to make savings of £47 million to £72 million over the next 3 years, with a budget gap of some £26 million next year (2017-18)
The financial environment is very challenging, with an unprecedented degree of uncertainty which makes planning very difficult. There will be a very short timescale to react and provide options for budget savings once the Scottish Government settlement is made known on 15 December. It is expected that the budget will be for only one year.
If the grant settlement is a cut of around 4% again, this would result in recurring real reductions in funding and the Council will need to reduce or stop doing functions. Our choices of where to make savings are very much restricted by the Scottish Government. For example, a quarter of our budget is in teachers’ salaries and we have been required to maintain teacher numbers.
Every 1% reduction in grant equates to approximately £4.4m less funding. Taking into account anticipated levels of funding, budget pressures and a council tax rise of 3%, savings required are forecast to be between £47m to £72m over the next 3 years.
Budget pressures include inflation, pay and pension uplifts, additional legislative costs, or the inability to deliver all of the previously agreed savings. Budget pressures are estimated to be around £14 million next year and around £10 million in subsequent years.
The Council will be allowed to increase Council Tax by up to 3% from 2017-18 without incurring penalties. However, the Scottish Government plans to change the Council Tax multiplier. The changes to properties in Bands E to H will affect 27% of properties in Highland. It is anticipated that this will raise around an additional £5 million in Highland which could be redistributed across Scotland to reduce the attainment gap. This could mean a net outflow of resource of a potential £2.4 million of Highland taxes going to other areas in Scotland if this approach is decided by the Scottish Government.
The Council took action earlier this year in setting up the Redesign Board and this is delivering a programme of redesign with cross party and staff involvement. This approach is intended to achieve efficiencies, and generate additional income.
Leader of the Council, Margaret Davidson said: “This is really is the most worrying financial situation. Local Government is undoubtedly shrinking. £10m came out of our revenue budget in February 2016 and we expect to be 25% smaller in 3 years’ time.
“Our hands are very tied by the constrictions imposed by the Scottish Government. This will mean that budget reductions will be much higher for services which are not ring-fenced or protected by Scottish Government policy. Unprotected services could have to find 23% savings. We will need to discuss options with communities and we want to offer communities the opportunity to help themselves to provide some services locally, where the council can no longer do so.”
She added:
“The scenario which I find most unpalatable is that taxes raised locally in Highland may be taken from us to be spent elsewhere in Scotland. This would be the first time any government in Scotland has raised taxes locally and taken them away for national purposes and I will be bringing a motion to council to challenge this proposal.
“The current budget situation and future scenarios is an issue for all political groups and all 80 members have a responsibility to balance the budget. The Administration will be continuing to work together across the chamber to find consensus on the way forward in what is the most dire financial situation the Council has ever faced.
Budget Leader Cllr Bill Fernie added:
“The next three years are likely to be the most challenging ever faced by Highland council. Never in past years has there been such a sustained period of reductions from central government to local councils. The last few years have already been difficult and the next years come with reductions that will mean some very difficult decisions for all councillors.
“Myself and the budget team will discuss options and try to suggest the places that will let us retain as many of our frontline services as possible, but this will inevitably mean that non frontline services will bear the biggest impact of not just cuts, but total cessation. This is not a position we would ever like to be in but we must balance the budget or the consequences will be even worse. Wherever possible we will try to give notice to allow changes to happen.” "
cut all councillors expenses altogether,let them use public transport instead of luxury cars,and be like other millions of working class people,,take a packed lunch.
ReplyDeletethat will save a few million,also cut out all,lavish functions when they have decided what other cuts they can bestow on the poorer
narook.
Don't think any councillors use luxury cars Narook unless they already own them themsives of course.
ReplyDeleteWe have a large hole when it comes to our council budget
ReplyDeleteThis is the trickle down from Westminster. Behind that is the decades of tax that major companies have managed to avoid (Apple, Amazon, Boots, Vodafone etc)
Beyond that there are the companies that employ people part time and pay minimum wages, for example tax payers fund Tescos who operate like this as their p/t employees are often entitled to tax credits as they earn so little
Then there is housing. Many people rent from private landlords who charge huge amounts. For those who qualify this is paid by the tax payer via housing benefit. And who benefits, the landlord
No wonder Highland Council is short of money
Cut from the top, not the bottom!
ReplyDeleteThe debate around shrinking budgets for local councils seems to trigger Pavlovian comments which are as predictable as they are prejudiced.
ReplyDeleteTalk of lavish lunches and luxury cars is an irrelevant distraction, as has already been noted. Whingeing that it's all the fault of evil Westminster or nasty multinational corporations or rapacious landlords is equally facile.
The really tough challenge, and the gross unfairness, is set out right there in the quotes from Margaret Davidson and Bill Fernie. It is the SCOTTISH Government which is cutting local council's budgets. They are still getting Westminster's money via the Barnett formula. But the Scottish Government insists that notwithstanding the cuts, local councils must pay a whole lot of fixed or rising costs like teachers' salaries, officials' pensions, and a host of other legally-binding payments like social welfare, childcare, etc etc. So this means that the non-obligatory Council spending for the benefit of local communities - on local facilities, recreational amenities, libraries, pools, public toilets, grass-cutting, road-mending, rubbish disposal and all the other general community services - has to take the big cuts. Moaning about lunches, or blaming Westminster, misses the point completely.
The Council leader mentioned that the Scottish Government is allowing some increase in Council tax. That's fair enough - it's about time, after years of a freeze. But it is an outrage that the SCOTTISH government is then requiring that some if not all of the money raised from this increase on Highland residents' taxes should then be reassigned to other regions of the country. It's not as if the Highlands is a wealthy region: why should Highlanders' taxes be used to subsidise public services in - say - the Central Belt cities? Scottish Ministers should be challenged robustly over such iniquitous proposals.
Much as I've supported the SNP over the years I now find I can't at a local level in Nairn. Come the next local elections I will spoil my ballot paper unless a new viable candidate stands
ReplyDeleteBut back to the cuts... I don't agree with central government telling local councils as to how they should spend their money, nor am I in favour of centralisation of services as this takes away local control and input
The UK finds itself in complete disarray due to Brexit. All I know is that my outgoings are greater as the cost of fuel and food rise, and despite it being a cold morning I've resisted switching the heating on. For me that sums up the state of the country (UK) and it can only get worse as May remains arrogant but without any plan of what to do
Also an SNP voter and less than impressed by the two SNP councillors in Nairn. Might stay at home too.
ReplyDeleteStaying at home will be recorded as apathy. Vote but spoil your paper = a protest
ReplyDeleteIf and when our council tax is raised ...collected ..and then distributed across the central belt...I will not be paying it ...SNP can put me to prison ...be better than moving ever nearer the bread line....67 years old paid taxes all my life, and I am not adverse to charity, but it's a step to far, when our council is so in debt.
ReplyDelete. Remember lots of people didn t pay their poll tax in protest, and as for getting a bad credit rating , I am too old to care.
SNP are showing their true colours now.