Highland Council Has The Biggest Budget Gap In Scotland Of All 32 Councils

15th May 2024

Todays Audit Scotland report Local government budgets 2024/25 reveals how dire council budgets are. This makes many more cuts in services likely in coming years.

Recent reports by Highland Council already revealed the difficult position that affects many services.

The Audit Scotland report shows the stark reality that Highland council is in unenviable position of having the biggest budget gap of all of the 32 councils.

Highland Council Not Clear on the saving nd affects according to the Audit Scotland report. The report states, "Highland's savings are included in the All other category as detail was not provided by type of savings (ie, recurring, non-recurring and unidentified). The chart elements add up to £599 million which is higher than the total anticipated budget gap. This is because some councils identified bridging actions of greater value than their budget gap to allow for additional investment in priority areas.

Why did Highland not provide the details like all other councils.

The recent budget papers did not make clear affects like job cuts when services are being cut.

Across councils he cumulative gap over the two years to 2026/27 is £780 million, meaning that councils need to identify and deliver recurring measures such as savings or increased income of five per cent of their overall revenue budget to be financially sustainable. However Highland is significantly worse with a a seven percent gap.

Accounts commission member Derek Yule stated on Radio Scotland today that effectively the councils face a 3 percent cut but up to a further 5 percent going forward.

It will be increasingly difficult to balance budgets without further difficult decisions on cuts to services.

Teh full Audit Scotland report HER
Pdf 20 Pages

From Highland council meeting on 29 February 2024
[url=https://www.highland.gov.uk/download/meetings/id/82943/item_3_revenue_budget_council_tax_and_medium-term_financial_plan_202425_to_202627] Revenue Budget, Council Tax and Medium-Term Financial Plan 2024/25 to 2026/27[/url]
Pdf 136 Pages

The report states -
It is clear that with the scale of budget gap being faced, the Council needs to take a strategic, transformative and multi-year approach to its financial challenges. The current scale and model of service delivery is not sustainable. The Council needs to align its service delivery and operating models to the resources it has available to it.

This will require significant change to what services the Council delivers, and how it delivers them.
This level of budget gap arose as a result of the impact of high inflation, high interest rates and the cost of living crisis resulting in significant increases in the cost of service delivery. These increased costs are in an environment where due to the considerable pressure on public sector finances and the Scottish Government budget, the Council is faced with a cash reduction in the core grant settlement for 2024/25 after allowing for additional resources which come with additional expenditure requirements or conditions, and an assumed flat cash position in the subsequent two years. The legacy impact of reliance on £23m of reserves to fund the current year (2023/24) budget, was a further factor, with the medium-term financial
plan needing to address that £23m on an ongoing and sustainable basis. £23m of the budget gap relates to that use of reserves in 23/24