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Highland Council bosses make a desperate appeal to Finance Secretary Kate Forbes to reverse the Scottish Government’s budget cuts to local authorities, as they fear an estimated £38 million budget gap will leave no choice but to 'cut core council services'

By Scott Maclennan

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Council Leader Margaret Davidson.
Council Leader Margaret Davidson.

Highland Council bosses have made a desperate appeal to the Finance Secretary Kate Forbes to reverse the Scottish Government’s budget cuts to local authorities, saying otherwise there will be no choice but to “cut core council services.”

Council leader Margaret Davidson met with Ms Forbes – who is also a Highland MSP – last week to tell her that current estimates indicate the potential for an overall budget shortfall of around £38 million.

The impact of that would be so severe and substantial that, according to Councillor Davidson, if the council wanted to plug the gap using council tax income it would have to go up by some 30 per cent.

The figure of £38 million stems from five main areas: pay pressures – £12.5 million; National Insurance – £3.5 million; costs or reduced income due to Covid – £6 million; and a reduction in the council’s core funding settlement from government – £3.9 million.

The remaining balance comes from other cost pressures – inflationary increases in contract costs, demographic/demand cost increases, managing existing budget pressures and additional costs arising from legislative change.

Cllr Davidson recognised the additional funding provided by government to support areas such as adult social care, teacher numbers, free school meal expansion and free music tuition, but that investment is ring-fenced and cannot be used for anything other than those specific government priorities, so the actual amount the council has to spend is cut further.

The council is now calling on the Scottish Government to provide greater transparency in relation to its budget settlement and is seeking further funding to address the range of external budget pressures.

Cllr Davidson said: “Each percentage increase in council tax raises only

£1.3 million of revenue, meaning that it would require an increase of some 30 per cent to close the gap, which we simply will not expect our communities to afford.

“This leaves us with no option but to reduce, or cut, core council services.

“It is particularly concerning that the settlement does not include funding for the increased National Insurance employer contributions for which the Scottish Government received compensatory funding from the UK government through the Barnett consequentials.

“This funding has indeed been passed directly to the NHS in Scotland and to local governments in England, Wales and Northern Ireland. We need fairness in Scotland too.

“We want to know why we have not received the funding to cover National Insurance employer contributions and why the Scottish Government is not taking account of the enormous inflationary pressures which local authorities are facing, as well as the impact on families and businesses.”

Deputy council leader Alasdair Christie said: “With no funding to support those costs, the council will have to reduce services elsewhere to pay for them and this will impact further on hard-hit Highland communities.

“We are at the crossroads of our recovery and a little bit more support and investment in local government from the Scottish Government would go a long way.”

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