Angus Council’s financial health is on the critical list just weeks ahead of the most challenging budget in the authority’s history.
The risk status around the council’s financial sustainability has been raised to its highest ever level.
And it has brought another warning over the potential threat to statutory council services when the 2023/24 budget is revealed in March.
“The risk of us being financially unsustainable has never been greater,” warned finance director Ian Lorimer.
It’s a financial maelstrom officials say could cast the rural authority into the national spotlight and lead to top-level exits.
Combination of factors
Mr Lorimer previously revealed the dire outlook which has left Angus staring into a £50 million-plus financial abyss over the next three years.
But inflation, the Scottish Government grant settlement for 2023/24 and issues including the yet-to-be decided teachers’ pay settlement have elevated the corporate risk rating around council finances to the top ranking.
Critical risk outcomes include:
- Cost overrun >10% of annual budget
- Failure to deliver multiple critical objectives
- National press coverage
- Senior officer resignations
Council chief executive Margo Williamson told scrutiny committee councillors this week that risk ratings in two crucial areas have been increased.
She said: “The financial sustainability risk score has been increased from 20 to 25.
“The transforming for the future risk score has been increased from 9 to 15.
“This aligns with the magnitude of the financial challenges over the next three years.
‘Critical failure’ concern
Finance chief Mr Lorimer was quizzed by scrutiny committee member Iain Gall on the potential ramifications for Angus if the area cannot overcome its financial challenges.
“Is there a risk that within the next three years we come to a critical failure if we don’t see the budget grant change significantly?” he asked.
Mr Lorimer responded: “The challenge is on a scale we have never seen before.
“The risk score is at the maximum of 25.
“The risk of us becoming financially unsustainable has never been higher because of a combination of circumstances.
“Teachers’ pay is just one of the big and difficult pressures we are facing.
“It’s really about a mismatch of resources available and the duties and expectation of the council.”
In October, Mr Lorimer delivered a stark projection of the financial outlook for the next three years.
He said the council must fill a financial black hole the equivalent of axing every primary school teacher and half of the area’s secondary teachers.
Budget plans being worked on
Budget discussions are continuing.
But councillors have already approved an 11% hike in commercial waste charges.
Housebuilders will also have to pay for refuse bins at new developments for the first time.
There is also speculation off-street car parking charges may return.
They have been suspended since the start of the pandemic.
The scheme failed to come close to its projected £750,000 annual income after being re-introduced in 2018.
There has been a warning car parks could virtually empty overnight as happened then.
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