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Highland Council faces a shortfall of £96.9 million – £411 for every resident – in lost revenue due to the coronavirus lockdown

By Ian Duncan

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Highland Council.
Highland Council.

Highland Council is facing a £96.6 million black hole in its finances due to lost revenues during the Covid-19 pandemic, new research suggests.

This represents the equivalent of £411 for every resident – more than any other UK local authority – according to research by the BBC.

The potential total loss is the biggest faced by any local authority in Scotland and the fourth worst across the UK as a whole, after Birmingham, Essex and Manchester.

Aberdeen faces a potential shortfall of £82 million – £359 per resident – while Perth and Kinross is looking at a loss of £50 million, equivalent to£329 per resident there.

Highland has the highest proportion of furloughed staff in Scotland and the hit to the vital tourist economy has placed extra pressure on the council.

Extra costs have also arisen from the need to adapt services and provide financial support for vulnerable individuals as well as businesses facing financial hardship.

Indicative of losses suffered income at Rose Street car park in Inverness city centre, which normally generates income of around £200,000 per month dropped to just £75 in April.

The financial black hole splits roughly between £55 million in lost income and around £40 million in extra expenditure.

Ed Foster, Highland Council's head of finance, said balancing the books would not be possible without a lot of pain and it is expected there could be redundancies in adult social care if the council cannot get funding to plug the gap in its finances.

He said: "Because so much of our budget is tied up in staffing, in order to balance we would need to reduce headcount. The decisions we would have to make would be pretty damaging."

Councillor Alasdair Christie, chairman of the recovery board set up to steer the council out of the crisis, said the extent of the effect of the virus on the authority is still unknown.

He said: "At the moment we really don't know what's going to happen to us. The longer term impacts of this could be even worse. I think, because of the nature of our economy, we could see increasing unemployment and even more demand for our services."

Councils have received funding from the Scottish Government to help and talks are continuing over obtaining further financial help.

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