The future for Scottish local authorities is looking “bleak” unless more money is forthcoming from central government.
High inflation, rising interest rates, geo-political pressures and the Covid-19 pandemic are putting pressure on budgets.
Chief financial officer Lorraine Paisey has highlighted the problems facing Moray Council and others across Scotland.
And as £58 million in savings has been made by the local authority since 2010, she said it was “difficult” to see where further cuts could be made while maintaining statutory duties.
‘Bleak’ future for councils
The local authority will meet on March 1 to set the budget for the financial year ahead.
As well as uncertainty in the economy, a pay deal for teachers has not been agreed for 2022/23.
Also no award has been settled for all staff for the next financial year.
Although details are scarce, establishing a Scottish National Care Service is expected to have a “very significant” impact on council funding.
The local authority gets about 80% of its revenue, more than £190 million, from the Scottish Government.
Most of the rest comes from council tax.
Budget proposals put forward by the Conservative administration to tackle the £21.6 million shortfall include a 5% increase on council tax.
They also want to use £14.77 million in Covid reserves to balance the books.
However a further £18.74 million in savings will need to be found in 2023/24.
In her report Ms Paisey highlighted the difficulty faced by the authority having to set a budget within a long-term plan, when there had been a range of financial forecasts from UK and Scottish governments.
£58m savings
She said: “Continued reduction in real term funding seems inevitable given other Scottish Government commitments and generally downbeat forecasts for the Scottish economy.
“The proposed Scottish National Care Service would have a very significant impact on local authority funding.
“And it is as yet unclear what the outcome of this proposal will be and what impact it will have.
“Without significant increases in core funding the financial outlook for Scottish local authorities appears bleak.
“The council has made savings totalling £58 million since 2010/11, and it is increasingly difficult to identify areas where further savings can be
made whilst delivering the statutory duties of a local authority.”
Conversation