Budget is still not easy: Highland Council has 'challenges'
Highland Council has released details of its annual accounts which paint a mixed picture of the local authority taking “significant strides” while the future remains challenging.
Reporting to the last full council meeting before the summer recess, the head of corporate finance and commercialism Edward Foster described the financial position as having limited capacity to absorb any kind of shocks.
That is despite reaching 68 per cent of the planned annual savings of more than £24 million by the end of the first quarter.
Budget leader Alister Mackinnon said: “That highlights the challenges that we have as a council, but also the improvements that we have made, the savings that we have achieved shows that with proper governance in place – which we have – we are making huge strides.
“Nevertheless there are huge challenges in front of us.
“We are in a far, far better position after quarter one and we wish to reap the benefits that we have achieved to date.”
Despite that, Mr Foster cautioned that because of last year’s £2.3 million deficit – money which had to be paid for out of the council’s reserves – the general reserve fund reached the lowest it has been.
He said: “Our non-earmarked reserves – the core reserves held for general purposes – were reduced to about £7.9 million from about £8.5 million.
“So at that level, that £7.9 million general fund reserve, that is the lowest it has been – that is a low position at around 1.4 per cent of our annual revenue budget. That gives us limited capacity to absorb any kind of shocks that can happen, any unforeseen events that might happen.
“From what I can see of the future, the future does not look any brighter in the year ahead in terms of that wider context. So the work we are continuing to do around all the things we can do around efficiency around improvement, around commercialisation, around income generation – those are all hugely important things that will stand us in good stead.”
