Highland Council is “not currently financially sustainable in the medium to long-term”, a brutal new budget report has revealed.
A raft of cost-cutting proposals have been unveiled by the council as it tries to plug a £49m budget gap.
Council leader Raymond Bremner said the local authority was facing a “perfect storm” of pressures, putting it under greater financial strain than ever before.
That strain is causing its leadership team to propose hiking council tax by 4%. It will also dip into its reserves – effectively its rainy day fund – to the tune of £22m.
As things move forward, it is being stressed that nothing is off the table as far as changes go.
Highland Council head of finance Edward Foster has also delivered a stark warning about the situation.
He said: “In its current structure and model of service delivery the council is not considered to be financially sustainable over the medium to long-term.
“It will not be able to offer the same breadth and level of service provision as currently.”
Budget is ‘extremely challenging’
Highland Council’s financial struggles are not a new phenomenon.
As a result, deciding where the axe needs to fall has gone hand-in-hand with its annual budget report for some time.
But even against that standard, the latest report is alarming.
Councillor Bremner said: “This is an extremely challenging context for setting a budget.
“We are faced with a perfect storm of circumstances. While it is imperative we make savings, we need to invest in transformation and that is why our approach is a balance of investment and plugging the gap for the coming year.”
The council has outlined that most of the additional pressure is from things that are beyond its control.
Pay increases will eat up £19m.
A further £19.7m will go towards dealing with inflation-related costs – the sky-rocketing price of energy and transport costs among them.
Road investment bright spot among savings
It won’t surprise anyone who has watched the news recently that more cuts are on the way.
Across the country, it seems like every sector of public life is struggling at the moment.
And these ones certainly make for gloomy reading.
But among the cutbacks, there is room in the budget for a £14m investment in roads.
This cash will go towards repairing and maintaining the roads network – one area that Highlanders have been very vocal about towards the council.
While that will be welcome, it’s still a long way short of the level of funding needed to bring Highland roads up to scratch.
Previously, the Scottish Road Maintenance Condition Survey in December 2021 showed them nearly four in 10 Highland roads need to be repaired.
Bringing them all up to scratch would cost an eye-watering £195m.
What else will change?
The budget paper will be presented at a special meeting of Highland Council on Thursday.
Afterwards, councillors will debate the proposals and finalise the year’s financial plan.
The changes are outlined in full in a 176-page report.
Among some of the other savings are:
- £100,000 from reducing food waste in schools
- £150,000 from reducing the number of broken Chromebooks in schools
- Re-purpose or sell off 16 janitors’ houses, £40,000
- Mothballing schools with forecasted falling rolls, £500,000
- Stopping bin collections on public holidays, £50,000
Council convener Bill Lobban said the local authority will consider everything when it comes to making savings.
“Given the level of overall gap, nothing is off the table,” he said.
“It will be fairly obvious to the public that if you have a £50m gap, things have to change.
“We won’t turn around and say we have to save this money, but things will stay exactly the same and everything will be wonderful.
“That’s a fairy story. We have to be realistic and we have to be honest with people.”
Conversation