Highland Highlife Facilities Again Under The Microscope As Budget Deficit Continues
20th November 2023
The latest Highland Highlife report to the Highland council Education Committee on Thursday 23 November 2023 sets out the current financial position and actions taken to address many issues.
Since its inception in 2011 Highland Highlife as a registered charity has saved the Highland council many millions of pounds. However with the continual squeeze on council finances the amounts paid have become inadequate despite continual new saving being applied. More saving are being looked at by the board and this will involve reducing offices and perhaps threaten facilities like libraries.
The report
This arrangement has consistently returned revenue savings for the Council with recent (5 year) savings averaging £1,086,496 p.a. (7% of Services Fee). Prior to 2023/24 savings have been achieved through income and efficiencies, whilst minimising service reductions. Notably, HLH has continued to take on additional services at the request of the Council, with 43 new services and facilities having been added to HLH since it was established in 2011. While this arrangement has meant that savings have been made for the Council, the wider economic situation in recent years has led to the terms of the contract being unsustainable.
Financial Position
6.1 The funding provided by the Council to HLH as a Services Fee is £16.1m (2023/24). The post-pandemic operating environment (particularly staff pay inflation) has meant that the Council has had to provide additional funding to HLH from Council reserves to help
protect services. This was included in the Council's budget when it was agreed at the Highland Council meeting held on 2 March 2023. HLH has mitigated a forecast £5.4m budget gap in 2023/24 by £2.4m through a combination of income, efficiencies and
agreed service reductions. The remaining £3m has been funded in 2023/24 from Council reserves. Given this, and the Council's own financial position, it is likely that a review of the SDC will have to include a reduction in the public service levels as well as a review
of the funding formula.
6.2 HLH has moved out of five properties and is in the process of looking at others which will make Council property budget savings, contributing to the Council's asset rationalisation.
6.3 Recruitment controls are in place to minimise the amount of additional Council funding required during financial year 2023/24. They are being implemented in advance of the work on the review of the SDC and might help to provide some flexibility depending on
future decision-making around the contract review.
The full report shows the wide range of services now undertaken by Highland Highlife on behalf of the council. Undoubtedly in terms of monetary savings it has been a huge success over past years. Nevetheless budgets are under severe pressure and it is likely that more changes will be need to maintain services that Highland people want.