Argyll and Bute budget uncertain despite government increase

Council leader Robin Currie

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Argyll and Bute Council’s budget for the coming year is subject to uncertainty and last-minute change, the authority’s leader has warned.

Following confirmation of how much the council will receive from the Scottish Government to fund revenue spending and capital projects in 2021-22, Councillor Robin Currie (Liberal Democrat, Kintyre and the Islands) also said that millions of pounds of savings will still have to be found.

The Scottish Government announced last week that Argyll and Bute Council will receive £213.3 million in revenue funding from the Scottish Government in the next financial year.

That’s a year-on-year increase of £4.5m – but in percentage terms it amounts to 2.2 per cent.

Only Eilean Siar – the Western Isles – will get a smaller percentage increase.

But Councillor Currie, while welcoming the funding ahead of setting his first budget as council leader, warned that all, bar less than £400,000 of that increase, is ring-fenced for priority projects.

Allocations from the Scottish Government will also only be finalised after debate in parliament.

This process is due to start in on Thursday February 25 – the same day as the council is due to set its budget.

Councillor Currie said: ‘After many years of reduced funding, any extra allocation for hard-pressed councils is not only welcome but desperately needed.

‘What local government needs most, though, is money to spend on the essential services that local people depend on.

‘We have no choice or control over how to use the bulk of the £4.571m additional funding. £4.185m of that must be spent on specific Scottish Government priorities, including early learning and childcare, discretionary housing payments, the Living Wage in social care, and more.

‘That leaves just £386,000 which can be used to help fund those core council services – an increase of 0.2 per cent.

‘It’s important to remember that we must also meet an estimated overall budget gap of over £6.3m. This means that to deliver a balanced budget we still face difficult choices and need to make significant savings.

‘Allocations can only be finalised, though, when the Scottish and UK Governments approve their own budgets.

‘The council is due to set its budget on February 25 – the same day that the Scottish Government’s budget will first be debated by parliament.

‘The UK Government budget date is March 3 and there will be further considerations in parliament on March 8 and 9.

‘All of this means that our own budget development is inevitably subject to uncertainty and last-minute change.’

More information is set to come on the council’s budget-setting process tomorrow, Friday February 12, when the papers go live for a meeting six days later of the authority’s policy and resources committee.

Councillor Currie added: ‘We also face considerable challenges in terms of our capital programme where there is a projected gap of more than £5m this year.

‘Again, the Scottish Government has announced additional capital money for councils. However, for Argyll and Bute this means just £157,000 extra for this year – and £125,000 of that must be spent on Scottish Government commitments.

‘We only have control, therefore, of £32,000 additional capital funding this year.

‘In the context of that significant budget gap, this means our only option for increased capital spending comes through borrowing.

‘However, that would create even more pressure on our revenue budget which funds essential daily services.

‘It’s also important to remember that we have to deal with increasing cost pressures relating to Covid-19 – at this stage these exceed £5m and are likely to increase over the next financial year.’

Announcing £11.6 billion of Scottish Government funding to local councils for the coming year, finance secretary Kate Forbes MSP said: ‘This budget is being delivered in exceptional circumstances as we continue to battle a pandemic that has shaken our society and economy to the core.

‘The local government settlement will help to fund those vital public services that are much valued and needed.

‘It includes additional funding of £59 million to complete the expansion of early learning and childcare to 1,140 hours a year, £72.6million for investment in health and social care and £7.7million to support the inter-island ferries in Shetland, Orkney and Argyll and Bute.

‘Just as we have chosen not to increase tax rates, ensuring people pay no more than last year, I have taken the significant step of offering funding equivalent to a council tax increase of around three per cent to councils who choose to freeze council tax.

‘I look to local government to join with me in providing the much-needed financial reassurance to those who are struggling.

‘We need to focus on how we rebuild and renew our country, and the funding I am providing to local authorities reflects the key role that they will continue to play in that journey.’