Savings of £22 million for Moray Council over next four years
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MORAY Council faces having to make more than £22 million of savings - with the threat of cuts to frontline services - over the next four years.
Growing budget pressures were outlined to councillors at a meeting of the full council on Wednesday.
Council leader Graham Leadbitter (Elgin South SNP) admitted the council was in a "very challenging position".
In the short term the council needs to save £700,000 from its 2021-22 finances as "budgeted expenditure is overcommitted against funding".
Tory group leader Cllr Tim Eagle warned of cuts to frontline services.
Lorraine Paisey, chief financial officer, said Covid ear-marked reserves are expected to be fully utilised by 2024/25, giving maximum protection against the need to make savings in the short term.
"That still results in a projected savings target of over £13 million in 2023/24," added Mrs Paisey.
She added: "It seems unlikely that transformation of services would generate financial savings of that magnitude within that short time frame, particularly given the nature and scale of current proposals, and so attention will have to be given to service cuts as it is anticipated that much of the
projected budget gap will have to be met in this way."
The council has an annual budget of around £238 million.
One saving already recommended for 2022/23 is an £800,000 reduction in the budget for out of area placements for looked after children.
She said the council had taken a decision to set aside monies to fund transformation of services and other priorities, but the funding is all from reserves and can only be used for development and not for recurring
"This means that as well as generating savings for 2023/24, a clear strategy within services receiving transformation funding will be needed to sustain improvements when this funding ends without generating recurring additional revenue costs as failure to do so will further increase the savings
which require to be identified."
And she said there are still significant uncertainties regarding the council’s finances, particularly regarding teachers’ pay awards for 2021/22, pay awards for 2022/23 and for future years and the impact of the consolidation of the Living Wge.
Inflation continues to increase and the impact of this is beginning to be felt.
"The recently agreed pay award is likely to result in contract price increases, particularly for social care providers and Early Learning and Childcare partner providers and is also likely to create pressure, along with higher rates of inflation, for higher pay awards for local authority staff and procured services in the near future."
Further uncertainty exists regarding Early Learning and Childcare, the expansion of which has been funded through specific grant from Scottish Government and in the first three years of the expansion the grant has been underspent. However, an underlying overspend is
forecast for 2021/22.
The draft settlement from the Scottish Government indicates a significant reduction in the specific grant funding for this service in 2022/23 and Mrs Paisey said options for the service will have to be developed and reported on.
She said it would be prudent to make provision for some level of overspend at least in the earlier part of the financial year when the budget for 2022/23 is set.
Cllr Tim Eagle (Buckie Conservative) said he "had a moral problem with saddling a future council" with a debt of more than £20 million.
"I do not want to go into an election this year with the public in Moray thinking everything is rosy with the council, because it is not.
"Without a significant uplift in the next couple of years we are going to face massive challenges and significant cuts to frontline services."
Rhona Gunn, depute chief executive (economy, environment and finance, said it is unlikely that a programme of transformation would deliver millions of pounds of savings.
She said: "We do expect there will have to be significant attention paid in year 2023-24 and other years to other means of achieving savings, principally service reductions and other cuts."
Council Leader Graham Leadbitter (Elgin South SNP) said: "It is a very challenging position we are in."
And he insisted he was fighting Moray's corner and "pushing hard" for more funding for the council in the Scottish Government settlement.
Cllr George Alexander (Forres Independent) said: "We are elected to deal with the money we get given by the Scottish Government. We are never happy with that and we are justified in not being happy with it.
"They (Scottish Government) are hell of a good at telling us what to do but not giving us the money to finance it."