Local authority in 'challenging situation' as dwindling revenue leads to budget rethink
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Highland Council will have to abandon the budget it agreed two months ago and rewrite it from top to bottom due to the impact of Covid-19.
The local authority leader Margaret Davidson and budget leader Alister Mackinnon say there is now no way to deliver the spending and investment plans that were passed in February.
Instead, they hope to bring councillors together and agree a new budget alongside major recovery plans led by the deputy leader of the council Alasdair Christie.
That is due to the massive and sudden drop-off in revenue from harbour dues, fuel oil sales and car parking income combined with difficulties collecting council tax.
It means that breaking even with low levels of reserves while budgeting for millions of pounds of cuts at the same time as preserving statutory public services has become harder than ever before.
Councillor Davidson said: “The budget will have to be redone, it feels like two years since we did the budget but it has been two months, and we have so much to take into account – we have recovery to take into account, we have got services to keep on the road.
“But we need to cope with that – these services are not optional, someone has to collect the bins and we have to make it work
“We have got far, far less income coming in, I mean everything from the leisure centres to the car parking, to fuel oil sales in our harbours, plus we had millions of pounds of savings to deliver and they are going to be really difficult to deliver now.
“What we really need from the Scottish Government is the recognition of how important the services we deliver really are and we are going to be needing support, not just in June, this is going to be with us in the short term, this is a virus that will be in our communities for some time.
“We need to be clear about how we are going to cope with that, the costs associated with that and look at how we work with our other public sector partners to get the economy of the Highlands really moving again.”
Cllr Mackinnon praised council, NHS and shop staff across the region for allowing the region to continue in an "orderly fashion" but said people have to face the facts.
“The reality is that the budget we set two months ago – we will have to go back to that again and look at it cross-party. At this moment in time the position is extremely challenging," he said.
"There is no getting away from it – our revenue has diminished, right across the board our income has dropped dramatically.
“Any income we get from the Scottish Government is going straight out to our hubs to ensure that communities and vulnerable people have heating and food and medicine.
“It is my intention as budget leader to have a cross-party budget as we go forward, we will need another budget, we will have to analyse at this moment in time where our income streams are and where income is not coming in.
“Our main priorities at the moment are the health and wellbeing of our staff and the health and wellbeing of every resident of the Highlands, we are also looking at a recovery budget because whenever the lockdown stops businesses and the economy cannot just pick up.
“We will set-up a budget recovery team that will be cross-party and led by deputy leader of the council Alasdair Christie – we will look at opportunities for us to maybe do things differently.”
Cabinet secretary for finance and Highland MSP Kate Forbes said she was aware of the issues faced by councils and would listen to any requests for extra funding in light of the budget.
“I’m very mindful of the pressure Highland Council is under and grateful to be working with local authorities across the country to support business and vulnerable people hit hard by the coronavirus.
“The support for services has been fully funded but if there was a request for more money then I would certainly look at that in light of the budget.”