The decision taken this week was accompanied by a hard-hitting statement from Council leader Roddie Mackay who told colleagues that they could not protect the least well-off if they did not raise the money to do so.
The SNP group on the Comhairle had put forward a motion to continue a council tax freeze but this was defeated by 18 votes to 12.
Mr Mackay said the reduction in revenue allocations has been 15 per cent over the last seven years, equating to £17.5m. The Scottish average was a two per cent reduction.
Mr Mackay said: “Our officers have approached this year’s budget on the basis of absolute realism, reflecting that pay increases and particularly inflation may require revision of the budget in the course of next year.
“We have used every feasible saving from services, as far as these were possible during the Covid pandemic, and have also identified further £500,000 of savings, again practical and realistic, to be taken forward in this coming financial year.” They would also draw half a million pounds from reserves.
Addressing those who said they should dig deeper into reserves, Mr Mackay hit back: “Without the Comhairle’s policy of retaining a sustainable level of reserves, we would be looking at unacceptable cuts in public services and, almost certainly, an end to our policy of no compulsory redundancies as an instrument of budget control.
“Even if this budget is agreed, our reserves will barely cover next year’s predicted deficit. Once again, and very regrettably, we are still working with one-year settlements from Government, which makes strategic financial planning particularly difficult and necessitates the protection of reserves to allow for significant year on year variations. Who really knows what inflation will be for 2023/24, or the level of public sector pay awards?”
As reported last week, chief executive Malcolm Burr wrote to the local MSP, Alasdair Allan, warning that Scottish Government cuts to council budgets threaten “irreversible” damage to the islands’ economy.