Highland Council seeks to tackle near-£100m budget blackhole caused by coronavirus lockdown
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Bosses at Highland Council say they will need Scottish Government assistance to tackle major financial challenges caused by the Covid-19 crisis.
The embattled local authority has revealed a series of cost-cutting measures as it faces up to the cash crisis caused by the pandemic, which it says has resulted in both extra expenditure and loss of income.
A sharp fall in income caused by the lack of economic activity during the lockdown is to blame for the dire situation.
Budget leader Alister Mackinnon said the deficit has reached £97 million – up £10 million from three weeks ago.
But the council has vowed not to shed any jobs and instead will bring in strict spending controls and seek government aid.
The council is committed to spending on staff (£300 million), adult social care (£100 million) and debt (£57 million).
So it has announced a recruitment freeze and a halt to non-essential spending like consumables, travel costs and mobile phones.
It is also hoped that a debt repayment holiday as well as a government support package will be secured.
Councillor Mackinnon said: “We are confident of expecting funding from the government but what is extremely challenging and very risky is the income from council tax fees and our charges income.
“For example we have seen a marked increase last month, the first month of the financial year, in the number of direct debits that have been cancelled or rejected by the banks and it just shows the financial hardship there is out there.
“The budget gap could be up to £97 million. I’d like to highlight that because it is a huge uncertainty how the impact of Covid will be felt for the rest of the year – what we do know is that it will be significant.”
Deputy leader of the council Alasdair Christie is heading up the recovery board to put plans in place to restart the region and he said savings will have to be made starting with non-essential spending.
“We are a pretty prudent council anyway but lockdown has shown us that the travel budget and things like that could be looked at where we have had to find alternatives with virtual meetings.
“Non-essential spend is a lot of consumables, it is about making things last longer, it is about not travelling if we can use technology.
“In terms of community services there could be a piece of land or an area of a park which could be allowed to go to natural meadow with wildflowers.
“It is about being sensible, having those conversations with communities about it before doing it and there are areas of the Highlands where people have done it themselves.”
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