Councillors in Fife have been warned to prepare for the worst after the latest financial forecast highlighted an estimated £115 million budget gap over the next three years.
Fife’s executive committee members are aware of the size of the challenge facing the local authority when it comes to balancing the books, having had three potential scenarios outlined to them in August.
However, members have now been warned to expect a “pessimistic or worse” budget shortfall between now and 2019/20 amid fears a grant reduction could be greater than previously envisaged when the Scottish Government announces its finance settlement on December 15.
According to the latest estimates, that means that Fife Council will probably have to find savings of almost £32 million next year, rising to £70.5 million in 2018/19 and £115 million by the decade’s end.
Because the Scottish Government will announce a one-year budget next month amidst continued uncertainty surrounding its content, Fife councillors heard a full draft budget will not be produced in advance, as has been the case in previous years.
Council meetings scheduled for February will also be delayed so the budget-setting meeting will take place on February 16, giving councillors more time to consider the financial picture.
Council leader David Ross commented: “There is still uncertainty around the council’s financial future as we don’t yet know the detail of the Scottish Government’s local government finance settlement.
“Our share of that money will not be known until later next month.
“However, we are planning ahead and asking council services to plan for a future based on 90% of their current budgets by 2020.”
There was some good news as councillors heard that the worst case scenario had been revised downwards from the last update in August.
At that meeting of the executive, Eileen Rowand, finance and corporate services executive director, had previously painted the ‘pessimistic’ scenario as a projected £42.5 million shortfall next year and an estimated £141 million gap by 2020.
A review of assumptions/estimates and adjustments to items such as loan charges and contingencies has seen those figures fall sharply.
However, Ms Rowand admitted those numbers are likely to change before February, with high level talks suggesting the budget gap will indeed be “in the region of the pessimistic scenario or worse”.
Councillor John Wincott, the council’s spokesman, summed up the mood when he said: “I’m amazed that we’re going: ‘Yay, it’s only £32 million next year’.
“It still feels quite swingeing to me.”
It was also confirmed budget proposals from all political groups will be published in advance of the council budget meeting rather than on the day, and Mr Ross called on political colleagues to work together in light of the serious financial challenges the council faces.
He added: “Council services have now put forward savings proposals that all political groups will consider before publishing final budget proposals.
“I’m suggesting that we delay our budget meeting in February to allow more time for all proposals to be considered and discussed and potentially reach agreement on common ground.
“It’s vital that we work together for the future of our services and that the people of Fife have the opportunity to see and understand what’s being proposed and agreed.”
