Highland Council has said it will make ‘no redundancies where possible’ as it presses bosses to find £15 million in budget savings.
In a bid to close its budget gap, it’s introduced a recruitment freeze and banned all non-essential spend.
The council has calculated that it will need an additional £40.9 million to deliver services next financial year.
That figure is based on an expected flat cash settlement coming from the Scottish Government budget announcement on 15 December.
However, if its core grant is reduced, the Highland Council’s budget gap could widen even further.
Figures provided in a report ahead of full council tomorrow, show that even in ‘normal’ times the council faces up to a £100 million shortfall in five years.
But with inflation soaring and national pay disputes ongoing, it warns the next few years will be even tougher than that.
Highland Council budget could include £100m savings
In the closing months of the current financial year, Highland Council looks set to overspend by nearly £9 million. They say this is down to £4 million unplanned spend on the national pay offer and £4.2 million in service overspends caused by inflation.
The council is also feeling the pain of the energy crisis, with its utility bills coming in £1.1 million over budget.
In the financial year 2023-2024, that budget gap looks set to quadruple.
Head of finance Ed Foster puts it bluntly:
“The potential budget gap of £40.9m for 2023/24 reflects the mismatch between
anticipated costs and income if the council is to deliver the same services in
the same manner as 22/23 and with a ‘flat cash’ Scottish Government grant.
“In short it would cost £40.9m more to deliver services than the income the council
expects to receive.”
Council rows back on ‘no redundancy’ strategy
The council has taken immediate steps to bring this under control. Just three months ago, a report for Highland Council referenced a “no redundancy” strategy.
However, in recent months the language has evolved. The council now refers to “no redundancies where possible”. It hopes to achieve this through stringent recruitment controls, including aiming to fill vacancies internally.
Nonetheless, an emergency item for tomorrow’s meeting requests permission to advertise for a replacement for chief executive Donna Manson. The top job comes with a salary of £159,499 with pay review pending.
At the same time, every service has been asked to produce savings ideas to take their delivery costs down by £15 million.
Councillors will discuss the approach at a meeting of full Highland Council tomorrow.
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