The local authority which recently splashed out almost £10 million to buy a country estate and borrowed a similar sum from the Public Works Loans Board is now facing revenue deficits at the end of the financial year which will require another round of cuts to public services.
Scottish Borders Council's financial plight is outlined in a report to be considered by the Executive Committee next week.
In it chief financial officer David Robertson details the budget pressures which will see a significant overspend for 2018/19,
The report warns: "At this stage in the financial year the Council continues to experience considerable financial pressures, primarily in Assets & Infrastructure and Health & Social Care, attributable both to increased costs and to delays in the delivery of planned savings required by the revenue budget. The underlying pressure in the account indicates that these pressures could result in an adverse variance at the year-end of around £1 million unless further action is taken."
Mr Robertson says the council's Corporate Management Team (CMT) has reviewed the position and taken action through a range of alternative measures to identify savings which, if delivered as intended, will offset this position and deliver a balanced budget by the 31st March 2019.
Local government services in the Scottish Borders have been decimated in recent years as the council imposed millions of pounds of spending cuts annually after their allocation of cash from the Scottish Government was reduced.
But in December it was confirmed SBC had paid the Hamilton family £9.6 million to buy the remainder of their Lowood Estate, near Melrose, to accommodate housing and industrial development. There has been criticism of the decision to spend millions on a custom-built gallery to house the Great Tapestry of Scotland in Galashiels, a project due to get underway in the spring of this year.
In a reference to that particular scheme Mr Robertson writes: "There has been an acceleration of revenue costs from 2019/20 relating to the Great Tapestry of Scotland project which are being funded from budget transfer from elsewhere in the Council.".
The report to councillors states: "Compounding the service pressures are costs associated with national pay agreements for 2018/19. These costs are projected to be in the region of £2 m in 2018/19, over and above thee costs originally budgeted for. Of this total £1.019 m of this total will attract assumed funding from the Scottish Government to fund additional teacher pay costs above the original Scottish Government pay offer.
"The remaining costs relate to the SJC / Chief Officers pay offer and will fall to the Council. These additional costs are based on best estimates of a complicated and currently still evolving position which does not yet have the agreement of the Trade Unions."
It is increasingly evident. claims Mr Robertson, that the Council is finding it more and more difficult to balance the revenue budget given the sustained service demands e.g. in the number and costs of care packages being commissioned by Adult Social Care, and the pressures associated with pay and price inflation.
"It is essential to ensure the financial sustainability of the council that the revenue budget is balanced and that this is achieved through the delivery of permanent savings in line with the timescales approved in the financial plan. CMT has recognised the need to enhance the delivery of service change and savings through a revised approach, which if approved will commence in 2019/20.
"Inevitably, in a change programme of this size some areas are lagging behind expectation or have been subject to revision requiring revision to original plans. The original plan for £3.3 m of savings delivered temporarily in 2018/19 will now be addressed on a permanent basis from new proposals as part of the 2019/20 financial planning process.
"These revised plans will result in permanent cost reductions and as such they have been reflected as being delivered on a permanent basis. The remaining £4.650 m of planned permanent savings, which were delayed in the current year and required to be offset temporary measures, will now be delivered on a permanent basis in 2019/20."
In a section of his report dealing with SBC's cash balances, Mr Robertson reports: "The total of all usable balances, excluding developer contributions, at 31 March 2019 is projected to be £21.071 m, compared to £28.793 at 31 March 2018." It appears the available money in the council's coffers has decreased by nore than £7 million or some 25% in the space of 12 months.
Turning to Risk and Mitigation, the chief financial officer writes:"The major risks associated with this report are that the level of projected balances proves to be insufficient. Service budget pressures plus unexpected liabilities are the most likely sources of pressure on reserves. Current pressures being highlighted through the 2018/19 revenue monitoring process increase the likelihood of a draw down from reserves being required in 2018/19."
It looks as though elected members will have some tough decisions to make before the 2019/20 budget is set and new council tax demands are fixed.
A council critic commented: "“It looks as though the budget has been appallingly managed. Those in charge appear to have failed miserably to get on top of the finances which means the council budget this year is about £3 million light.
"Yet more cuts will be necessary and the nature of the savings may be revealed by the end of February. An alternative budget proposed by the non-Tories will no doubt be presented but the Conservative-led majority will win and we can look forward to significant cuts in services due to incompetent management."
No comments:
Post a Comment