CRISIS talks between Highland Council and trade unions are under way in a fight to save jobs amid a £26 million budget black hole.
Local authority financial bosses have spent a month crunching numbers since the proposed Scottish Government settlement was revealed in December and have now announced a gap of £25.8 million for next year.
Chief councillors have come up with a yet-to-be-revealed list of cuts and ways to claw in cash, including a three per cent council tax rise, but leader Margaret Davidson has warned that job losses are likely.
"Although every effort is being made to achieve a balanced budget without impact on staff numbers, unfortunately this will not be achievable across the whole organisation," she said.
"I appreciate this is a worrying time for everyone, however, we are committed to do all that we can to avoid compulsory redundancies wherever possible.
"The council has a very good track record of minimising compulsory redundancies.
"This has been achieved by working in partnership with trade unions to optimise the use of vacancies and turn over to achieve successful re-deployment outcomes."
The council has blamed the funding gap on a £9.4 million cut from the Scottish government, £8.3 million for the rising costs of providing services and £8.1 million on pay, price and contract inflation.
Even after coming up with money-saving ideas, a gap of just under £5 million remains, leaving the council with no option to cut services and charge more for what is left.
Budget leader Alister Mackinnon said: "£25.8 million is a huge cut to our budget and comes after we have already managed a cut of £20 million to our budget in efficiencies over the past year.
"We are also unable to increase council tax beyond three per cent without Scottish Government penalties.
"This leaves us very few places to turn to find more savings of this magnitude. There will be no option but to cut services and to charge more for what we provide."
Cuts will not be agreed until the council’s budget meeting on Thursday February 15 when the final Scottish Government settlement will be known.
Cuts from Holyrood may not be as severe as initially thought as the minority SNP government needs the support of at least one other party to pass its budget.
Last year the Greens secured a massive 11th-hour reprieve for local authorities, which saved £6 million for Highland Council alone.