Comhairle must dig deep into reserves

Income from the likes of sports facilities has not returned to pre-Covid levels, contributing to the wider fiscal challenge.

Comhairle nan Eilean Siar will use more than a third of its overall financial reserves to help fill a budget void with the likelihood it will have to partially meet pay settlements for teachers and other council staff from its own resources.

Despite this, there are warnings that all “discretionary’ services will come under threat if the funding shortfall continues.

The scale of the challenge was confirmed at the Comhairle’s Policy and Resources Committee meeting last week, when a report confirmed £2.5 million will come from £4m reserves the authority holds to support its ‘forward budget strategy’.

There is also £3.5 million of reserves which the Comhairle is obliged by Audit Scotland to maintain for emergencies such as exceptional weather impacts which may now also be deployed to meet budget shortfalls.

Even after raiding the reserves, councillors were warned of an underlying deficit being carried into the next financial year of £3.1m, which could be set to rise to more than £5.6m if inflation continues as predicted.

The authority’s income from services, such as sports centres, has not returned to pre-Covid levels, creating additional budget pressures, the report confirmed.

With its grant settlement for the next three years from the Scottish Government held at “flat cash” level, chief executive, Malcolm Burr, described the situation as “ultimately unsustainable,“ adding: “We cannot meet annual deficits of £5.6m for very much longer.”

Councillors backed a raft of measures including a funded pilot scheme for adopting a ‘single authority’ model of service delivery in the Western Isles which would allow for the “pooling and merging of separate budgets.”

But, the report stated, there are limited options for turning the Comhairle’s budget position “from unsustainable to sustainable.”

The report concluded: “It is regrettably essential that the Comhairle considers difficult issues such as the provision of statutory against discretionary services, the level of services provided, and whether the Comhairle will have to revert in the near future to the provision of statutory services only.”

Loch a’ Tuath councillor, Donald Crichton, who chairs the sustainable development committee, accused the Scottish Government of “savaging” the Comhairle’s budget over the last ten years.

He said: “It all eats away at our public services and all that we’re trying to do in our communities, and it culminates in what we have today.

“We’re seeing our economies shrunk, and public sector jobs reduced, in a community where the public sector is the largest employer, and I’m surprised that Audit Scotland aren’t asking the Scottish Government why they have targeted one of the most rural and peripheral authorities in the country … (they) have reduced this council’s budget by more than any other in Scotland.”

A Scottish Government spokesperson insisted it was “treating councils fairly”, providing “a real terms” increase of 6.3 per cent to local authorities. They “are working with COSLA to agree a new fiscal framework”.