Highland Council Budget agrees a Road to Recovery

5th March 2020

Despite a large budget gap and many reductions that were agreed today the council says they are on course to balance the budget for next year ad following years while building up reserves. The budget for the current year is on course to ring in an underspend.

The Council is forecasting a budget gap of £67.455m over the next three years which arises due to inflationary costs pressures on pay and other non-staffing costs, the need to rebuild reserves and provide a fund to invest in transformational change, dealing with existing pressures to ensure a sustainable basis for the budget, and

expected changes in government funding over the period.

Councillors were asked to agree -

Members are asked to:

i) Agree a 3% increase in Council Tax in order to close the Council's

budget gap for 2020/21;

ii) Agree a further 1.84% increase in Council Tax to enable a £20,000,000 investment programme in the Council's roads infrastructure as detailed in Appendix 6;

iii) As a consequence of recommendations i) and ii) agree that Council Tax rates for 2020/21 will increase by 4.84% as reflected in Appendix 7;

iv) Approve the funding of the budget pressures as summarised in sections 5 and 6 of this report and detailed in Appendix 2;

v) Approve the planned £2m annual rebuilding of reserves as outlined in section 7.

vi) Approve the establishment of the Change Fund as referenced in section 8;

vii) Approve the rephased delivery profile of savings agreed in February 2019 as detailed in Appendix 3;

viii) Approve the package of new savings proposals covering the period 2020/21 to 2022/23 as summarised in section 16 and in the Change and Improvement Strategy ‘A Sustainable Highland' at Appendix 1;

ix) Agree that the impact of any changes in Government funding that may come as part of a final budget settlement is considered as part of the ongoing development of the Medium-Term Financial Plan over the coming months.

Highland Council today agreed a balanced budget which includes its biggest ever single investment in roads with an extra £20 million capital announced in its budget proposals for the year 2020/21.

To support the investment in roads there will be an increase in Council Tax by 4.84% (just over £1 per week for those households on Band D). Of the rise, 3% will be used to balance the budget and 1.84% for investing in roads.

Council Tax Reduction recipients will continue to be protected (generally Bands A-C).

The increase would enable a fund of £20 million for capital schemes and an additional £1.3 million of annual revenue for road maintenance.

The budget will see an increase in the Council's Reserves to improve the Council's medium to long term financial strategy and a more resilient position to address a number of challenges and risks which lie ahead.

Council also agreed a proposal to invest £1 million of additional funding in a "Highland Deal for a sustainable future" - a Skills for Work Charter which will develop a range of initiatives and opportunities to retain young people, address poverty and reverse depopulation trends in rural areas. A further £0.5 million is to be earmarked for rural transport projects.

Budget Leader Alister Mackinnon said:"This budget is a road to recovery for the Council. We need to build our Reserves for a sustainable future; make the best use of our resources to transform the Council; build our resilience; and make substantial improvement to our Roads.

"These are ambitious budget proposals which also seek to invest in people, skills, plant and places for a more sustainable future."

Leader of the Council Margaret Davidson said:"The reduction in available Capital money is a huge issue for us and will mean we have difficult choices to make, so this investment strategy for our roads will be tremendously important for people in the Highlands."

Depute Leader Alasdair Christie said:"A budget should not just be numbers on a page but should embody our values - and this budget does just that. I would like to thank members across the chamber for their contribution and support in creating a council budget which drive improvement, provide financial stability, and go some way to address poverty and rural deprivation delivering positive outcomes for people in the Highlands."

Plans to fully address the 2020/21 budget gap of £20.530m are outlined in this report and include the delivery of budget savings and increasing income generation through the Council's Change and Improvement Strategy ‘A Sustainable Highland' that can be seen in Appendix 1 to this report. In addition, an increase in Council Tax rates will be required to balance the budget.

Full details of all the changes can be seen in the Budget paper HERE

The full budget debate is available for viewing for one year at -

https://highland.public-i.tv/core/portal/webcast_interactive/458511

PHOTO

Cllr Struan Mackie , Caithness West speaking in the budget debate at Highland Council on 5 March 2020.