Highland Council outlines 'challenges' to balancing budget in the face of coronavirus crisis
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Councillors were told of the significant and serious impact Covid-19 is having on Highland Council's budget at a meeting today.
The scale of the financial challenge was laid out in a report to the corporate resources committee today which modelled two different potential scenarios – in the "mid case" scenario, a budget gap of £65.7 million is projected, and in the most severe, a potential gap of £96.9 million is projected.
The council says that, at this time, the level of risk the council faces is greater than perhaps ever before, including to staff, communities and the provision of essential council services.
The council has already spoken about how coronavirus and the lockdown have reduced income generation and increased demand for services.
Chairman of the resources committee and budget leader, Councillor Alister Mackinnon, said: “Covid-19 has impacted on all of our communities.
"Many people are finding themselves vulnerable and in need of financial assistance and advice. There has been interruption to education and exams, loss of jobs and businesses and, with people facing uncertain futures, issues of stress, anxiety and isolation.
“To respond, the council has had to quickly adapt to provide new services, including the Humanitarian Assistance Centres, the Helpline, food projects, hardship and welfare projects, business grants, childcare for key workers and virtual education.
"All of this comes at a cost and we do not know how long these services will need to be provided.
“We need to be in a position to plan for the future but there are so many variables and future uncertainties that forecasting, and modelling, is impossible to do with any accuracy.
"There is a great risk that whatever scenario we plan for may be significantly different from what actually transpires, with the council potentially facing a financial deficit that significantly outweighs our reserves.”
He added: “We will all be working hard to mitigate the budgetary impact, but the stark reality is that our income streams have drastically dropped and there is no doubt the challenges to balance our budget are huge.”
The committee is to make representations to government to advise that the council may require significant further financial support or other intervention in order to manage its budget in the 2020/21 financial year.
A Budget Recovery Group will also be established and will meet regularly, reporting to Committee.
A further report will be brought to the full Highland Council meeting on June 25, outlining the council’s potential response to dealing with the financial impact.
Related article: Highland Council told it will get no Scottish Government cash
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