Questions remain as Highland Council issues statement about its £602 million budget
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Highland Council has offered more clarity on its cuts and funding plans after we exclusively revealed proposals to slash investment in some areas.
Adult social care in the region appeared to be a big loser with £12 million to be stripped out over three years and jobs also are potentially on the line.
The release by the local authority also highlights the strategy it has adopted to close an estimated £113 million funding gap over the next three years which it says was informed by public consultation.
But there was no mention anywhere of the roads budget which looks like it may have been hit hard due the tough financial climate amid soaring costs driven by inflation that are compounded by interest rates making borrowing unaffordable.
The administration will ask the full council to freeze council tax after the Scottish Government offered an uplift of £6.865 million – an amount equivalent to a council tax hike of 4.8 per cent.
Earlier dire warnings from former finance boss Ed Foster in 2022 that such pressures “will require a wholesale change in the services and service levels the council provides” seem to have come true.
And that was said when the local authority was facing a larger than ever before budget gap of £40.9 million – this year the blackhole has ballooned to just over £65 million.
Adult Social Care
Now, according to the council, the budget “recognises the financial challenges faced in relation to Adult Social Care” and that both the local authority and NHS Highland admits “that continuing to deliver adult services the same way is not sustainable.”
The budget provides £20 million of funding from council reserves to support the Adult Social Care through “change and transformation” that will also ease “the achievement of a multi-year £12.6 million saving target against that budget.”
The budget also identifies the “pass-through” of funding from the Scottish Government, to adult social care budgets, which is estimated at £10.8 million in 2024/25.
But questions remain for service users – will any of that impact care packages? How does it make sense to invest £20 million, to cut £12 million over three years with the government providing £10.8 million.
Budget Strategy
Audit Scotland called on Highland Council a number of years ago to attempt to make longer-term financial planning decisions which it did and this year’s three-year strategy “central to proposals” are focussed on a budget gap of £113 million.
The council said: “Inflation, interest rates, pay increases, wider economic factors and cost pressures in key areas such as adult social care, have had a direct and significant impact on the council’s financial position.”
It added that “the recent Scottish Government’s council tax freeze also imposes a limit on the council’s ability to raise income through this means,” though it does appear a matter for local authorities to decide for themselves.
The bottom line is that the council must set a balanced budget and it hopes that through “financial strategies and savings plans” it can do that but it also wants to progress “significant change programmes” funded by reserves.
The council said: “With the scale of the budget gap being faced, a strategic, transformative and multi-year approach is necessary to address the financial challenges. The current scale and model of service delivery is not sustainable.
“The council needs to align its service delivery and operating models to the resources it has available to it. This will require significant change to what services the council delivers, and how it delivers them.
“A key component of addressing the budget gap is the agreement of saving proposals to deliver recurring and sustainable cost reduction, income generation, redesign and efficiency savings.”
What council bosses say
Leader of the Council Raymond Bremner said: “It has been our priority to protect jobs and services wherever possible, so you will see there is a significant focus on income generation and efficiency.
“Many of these proposals are born out of the suggestions from communities and staff and I am very grateful to everyone who submitted ideas and views and engaged with us over recent months.
“This information has been invaluable to us in preparing our proposals which will have as little impact as possible on essential services and vulnerable groups.
"Many of the proposals would see major improvements, such as generation of green energy and reducing waste, as well as generating more income from tourism.”
Convener Bill Lobban added: ““The budget gap we are facing over the next three years presents an enormous challenge. The work which has been done to prepare for this will set us on a path of major change and reconfiguration of everything we do.
"Transformation at scale is absolutely necessary to address the financial challenges of this enormity.
“We have listened to what people have been saying to us during this budget process and proposals reflect what communities and staff have told us.
"I commend these proposals to members for their consideration at our budget setting council meeting next week, and I would also like to thank all members for their support in the engagement process.”
