£6m black hole cuts Comhairle options

The scale of the projected deficit means that all services provided by the council that are not ring-fenced to meet statutory obligations will be under threat with council tax rises also expected. A Comhairle spokesman warned that there are “few options remaining”.

In the latest funding settlement, the Comhairle has received the second worst outcome among the 32 Scottish local authorities – a 4.7 per cent increase in the face of inflation which is running at around ten per cent. Only Shetland received a lower percentage increase in funding.

Comhairle leader Paul Steele told the Gazette this week: “The Comhairle has had the largest percentage reduction (in funding) over the last term and now the second lowest increase so the settlement is going to mean tough choices as we move towards setting a budget. Whilst this will be difficult, I and my Comhairle colleagues will do everything we can to protect vital services as far as possible.”

A council spokesman added: “The Comhairle will receive an additional £2.7m, but when known commitments, such as the current year pay award, additional Health and Social Care funding and funds for other government priorities are deducted, the £2.7m reduces to around £450k, which does little to address inflationary pressures.

“As with all budgets, we will be doing work over the next period to try and address the funding gap. After years of funding cuts, this will be a real challenge, as there are few options remaining”.

In light of acting finance minister John Swinney’s announcement of council allocations, all of Scotland’s council leaders, including Mr Steele, have signed a statement expressing “extreme disappointment with the settlement for local government”.

The statement continued: “As part of offering up a solution, Leaders call on the Scottish Government to pause the current plans for a National Care Service and redirect the funding allocated within the Scottish Budget into social care and preventative services through local government”.

CoSLA vice president Stephen Heddle, who leads Orkney Islands Council, said: “The Scottish Government has made political choices.

"Cuts to our core budget hit the most vulnerable in our communities the hardest and are damaging to our workforce. That is why council Leaders were unanimous that we must fight for a fairer settlement.”

Frustration over the treatment of local government will be heightened by a new report from the independent Accounts Commission which warns about “unsustainable” pressures on councils.

The commission said: “For many years now councils have had to make efficiency savings, redesign services, and use reserves to meet budget gaps arising from service demand and budget pressures.”

The report says that revenue funding to local government between 2013-14 and 2021-22 increased in real terms at less than a quarter of the rate of increase for the overall Scottish budget – 6.1 per cent against 27.2 per cent.

It adds: “If we remove Covid-19 funding in 2021/22 from our analysis, the Scottish Government budget is set to increase by seven per cent in real terms, as opposed to a real-terms cut in local government funding of 0.1 per cent”

William Moyes, chair of the Accounts Commission said: “It’s clear the financial situation of councils is increasingly fragile.

"Councils are having to deal with the effects of inflation, the increasingly desperate cost of living impacts and rising demand for services, whilst at the same time delivering vital day to day services to their communities.”

Donald Crichton, chairman of Comhairle nan Eilean Siar’s sustainable development committee, said: “Unless there is a fundamental change in the way the Scottish Government views or values local authorities, we are really heading for the precipice in the way we are able to deliver services.

“We are being undermined year by year. It is really astonishing the prejudice they have against local authorities who are the key delivery mechanism to the communities we serve throughout Scotland.

"As the Accounts Commission confirms, there has been a massive reduction in the allocation to local authorities relative to the Scottish budget as a whole. That is a political decision.

“The funding formula works against island authorities so we are getting a smaller share of a smaller cake.

"Orkney and Shetland have oil funds to dip into but we do not and we are now digging deep into the reserves even to maintain the current level of services. That is unsustainable”.

Last September, the Accounts Commission for Scotland stated: “Comhairle nan Eilean Siar saw a 14.6 per cent decrease in real terms funding between 2012-14 and 2018-19. … Had the Comhairle received the same proportion of overall funding in 2020 as it did in 2010, it would have received an additional £20 million”.