Concerns have been expressed about Fife Council’s financial health after a new report revealed the local authority is on course to overspend its budget by almost £7.4 million this year.
Departments throughout the organisation have been urged to do what they can to eradicate or curb overspends over the next six-months when the financial year eds.
Councillors have been warned the level of uncertainty created by economic impacts of issues such as Brexit and potential equal pay claims makes balancing the books extremely difficult.
Executive finance director Eileen Rowand described the need for corrective action as “critical” but noted there were a number of risks surrounding calculating the projected budget outturn, such as demand outstripping available budgets and environmental factors.
She said: “There is a vast amount of uncertainty in relation to the future funding that the council will receive in both the short and medium term.
“This makes it difficult for the council to plan over the longer term, however the council’s medium term financial strategy provides an established planning framework to respond to these financial challenges and ensure the financial sustainability of the council.”
Ms Rowand said this time last year, the council was showing a £6 million overspend but eventually delivered a £2 million underspend.
One area showing signs of strain is the council’s level of uncommitted reserves, which are projected to be £15.2 million in March 2020, reducing to £11.5 million by 2022-23.
This, Ms Rowand said, was “a bit low considering the risks we’re carrying”, as it is around 1.4% of the estimated budget and lower than the council’s traditional policy of maintaining uncommitted balances above 2%.
Council co-leader and Labour councillor David Ross stressed budgetary considerations are not the sole focus.
He said: “We’re delivering services people are relying on and we need to make sure people get the services they need.”
He added: “We’re seeing for the first time that every service is projecting an overspend and we’re also seeing that they are struggling to meet the spend we’ve agreed.
“We’re also seeing the impact of real cuts. We’ve seen cuts at the recycling centres, grass cutting and weed control – we’re seeing a lot more complaints about that this year.
“Some of the hours at leisure centres are having to be cut back. These are all the things that are beginning to add up and people are beginning to see the impact of cuts from council services.
“It’s now really coming to the crunch point, and we need to be making these points strongly to Holyrood and Westminster that local government is not the whipping boy and the place where you can take all the cuts.”
SNP co-leader David Alexander said history told him although the first financial update of the year was always the worst, the picture always improves.
He said: “Our reserves are low just now but if we can reduce our overspend then they can go up.
“Come budget time it’s usually better but we’re dependent on politicians elsewhere. We’re at the bottom of the food chain.”