A choice between freezing pay or cutting jobs and services will have to be made within Fife Council, without further funding from the Scottish Government.
That was the warning from the authority’s Labour co-leader David Ross as councillors discussed grim financial predictions for next year, with a £19.6 million gap projected in the revenue budget.
Covid-19, which has cost the council an estimated £76m since the start of the pandemic, has contributed to £13.2 million in lost revenue.
Council finance bosses have made calculations on the assumption that the grant from the Scottish Government will be cut by 1%.
And Mr Ross said it was unfair that frontline workers who had supported communities should be penalised as the council faced difficult spending decisions.
He said: “The one thing that I think Covid-19 has done is to highlight the essential nature of local services and the very valuable work that our workforce carry out, whether that’s social care, whether that’s in communities getting food out and supporting local communities, dealing with homelessness and housing, keeping the bins collected.
“Across the council our workforce has played a tremendous, valuable part in dealing with this crisis and I think we need to be recognising that and government needs to be recognising that, in not only funding local authorities for their services properly, and I very much hope we won’t see a reduction in our grant, but also recognising that the pay levels of our staff, who should be rewarded for the work that they’re doing and shows the value of some of these workers.
“They do need a proper pay rise but that needs to be fully funded by the Scottish Government, or it means cuts in services and loss of jobs.”
The Scottish Government said staff pay was a matter for Fife Council.
Meanwhile, council tax in Fife is expected to rise by 3% in April and Mr Ross fears cash strapped families may not be able to afford the hike.
“I think all of us recognise the financial pressures on families across the whole of Fife and individuals, and looking at our council tax collection, which is falling behind where we would hope it would be,” he said.
“I think that indicates the financial pressures that Covid-19 is having on households across Fife and we need to take that into account.
“These are working assumptions, they’re not decisions. We’re not saying at this stage, yes we will have a 3% council tax increase.
“The downside is if we don’t get income, it could mean cuts in services and loss of jobs, which equally we want to avoid.”
Fife Council’s executive director of finance Eileen Rowand said the pandemic and Brexit had made budgeting more difficult.
“It is evident that there is a high level of uncertainty, even more so than usual,” she said.
A Scottish Government spokesperson said: “We value the sacrifices and efforts of all our public sector workers including local authority staff which is why we have taken exceptional measures in every area of government to deal with the challenges of Covid-19.
“Councils are independent of the Scottish Government and they are responsible for managing their own budgets and use of resources, and this includes the pay and terms of conditions for their employees.”
