Highland Council’s claim that the coronavirus crisis will create an £80 million black hole in its finances has sparked widespread disbelief.
Earlier this year, the authority formed plans to tackle a budget gap of £20.5 million, but top brass have warned that the shortfall could quadruple due to the economic uncertainty caused by the outbreak.
Budget leader Alister MacKinnon outlined the areas where the council is losing money, citing planning and building standards applications, council tax revenue, income from events, loss of car park payments and licensing income among others.
The Dingwall and Seaforth representative said officers are preparing a full impact analysis to figure out exactly how much cash will be lost.
Highland economist Tony Mackay yesterday said there was no doubt the council’s finances will take a hit – but he believes the £80m figure “seems very high”.
He said: “The actual deficit will obviously depend on how long the coronavirus epidemic lasts for.
“Council tax losses are understandable because many local residents who have lost their jobs/incomes will understandably have great difficulty paying their taxes.
“I expect the Scottish Government to compensate the council for these losses.”
Opposition councillors demanded that Mr MacKinnon explain how he arrived at the £80m estimate he cited.
Ness-side councillor Ron MacWilliam said he had no idea “how that size of budget shortfall could even be conceivable” as he accused the administration of hiding behind red tape to avoid scrutiny.
He said: “I am outraged at the secrecy, and the public statements coming out of resilience meetings.
“I have strong reason to suspect that the people making these decisions are in breach of the Local Government Act.”
Independent councillor Andrew Baxter also demanded more information, saying most councillors were “in the dark as to the real state of council finances”.
He said: “We’ve received no more detail than the few figures dropped in to a council press release and the platitudes spouted during a weekly virtual briefing.
“We are told the council is preparing for recovery and renewal but we are provided with no information.
“Decisions that will impact the Highlands for years to come must be questioned.”
From the Tory opposition group, Thurso and Northwest Caithness member Struan Mackie said: “Very little information is available, fuelling an increasing number of members pressing for greater transparency.”
Earlier this week, Mr MacKinnon argued that the anticipated heavy financial toll of the pandemic was caused by several factors.
He said: “We are facing tremendous new cost pressures 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.”