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Comhairle nan Eilean Siar has approved a tight budget using carried-over cash reserves and savings under various headings, meaning that council tax can once again be frozen in 2024/25.

But councillors heard at yesterday’s (Tuesday 20 February) meeting of the full council that there are significant, known and material risks in the cut-to-the-bone approach now needed to balance the books.

In their report to councillors, chief executive Malcolm Burr and chief financial officer Norman Macdonald said that some of the strategies used in preparation of this budget carried ‘significant financial risks.’

Managing the winter maintenance budget on the basis of using money underspent in previous years is ‘no longer feasible’ they said.

Overspends on winter maintenance, and on the costs of the cyber-attack, are likely to reduce budget reserves.

On social care, officers reported that the Integrated Joint Board (IJB) budget looks likely to see a funding gap of around £4m, which will require to be met from savings and the use of IJB reserves.

They said: “There remains significant pressure on IJB Budgets, and this represents a material risk for both the Comhairle and NHS Eileanan Siar.”

Health and social care issues, and the additional costs brought by severe weather for services and infrastructure, are two of the highest risk areas now identified.

The budget now approved by councillors was overseen during budget and strategy board meetings held in October and November 2023 and in January 2024, supplemented by a members’ workshop which provided a detailed overview of the costs and income across all service areas.

Council members identified some areas for review, most of which will require a lead‐in period, and these will be taken forward during the next year for implementation in 2025/26 and beyond.

Among budgetary savings recommended to councillors were savings in the school and education support budget, including  £435k saved by a reduction in teacher staffing allocation and a 25% reduction in materials and equipment for all schools.

The report also suggested: “Savings of £60k relate to the restructuring of the education and schools senior leadership team.

“A saving in e-Sgoil of £15k will be managed from the non-filling of an administrative post and a £40k saving in adult learning is proposed to be met from a relocation of the service.”

Early years will see savings of £153k realised from a staffing review, non-filling of vacant posts, funding reductions and fee increases.

And strategy and support for education and children’s services will see schools lose £67k from IT budgets, £21k saved from the central contracts and software and £32k saved through performance and staffing administration. 

The special education transport budget will be cut by £30k and public transport is to see evening bus services discontinued, community transport grants discontinued and a review of the bus station operation, potentially saving an employee salary and utility costs.

In sport and health, savings of £41k will be achieved through increased charges and reduced opening times in sports facilities, in line with low usage.

Smaller-scale savings will be made by reducing grants to community organisations and by measures such as reduced street lighting in rural areas.

Savings and economies such as those identified will help balance the books, alongside the use of reserves from previous years.

But councillors were told: “The dependence on reserves to balance the budget places an additional strain on subsequent years, due to the underlying deficit being carried forward.

“This position is unsustainable as the level of reserves has been severely depleted in recent years due to the impact of unbudgeted inflationary pressures.

“The current budget strategy fulfils its aim of reducing the use of reserves and also reducing the underlying deficit, acknowledging that this is a significant challenge due to funding pressures and the inevitable difficulties in identifying yet more savings to all service budgets.”

Comhairle nan Eilean Siar’s 2024/25 budget delivers to the formula proposed by Scottish Government, when they allocated £144m across all 32 Scottish local authorities to fund a council tax freeze.

But officers reported: “This proposal from Scottish Government had not been discussed with COSLA or Councils and was not therefore reflective of the terms of the Verity House Agreement between Scottish Government and COSLA.

“The funding is reported as representing the equivalent of a 5% rise, but this has been disputed by COSLA as an unrepresentative figure across all Councils. The Comhairle will receive £598k, which is just under the value of a 5% increase.

“It must be recognised that the underlying budget shortfall is ultimately unsustainable, reflective of the position across Local Government in Scotland.”

The full budget report to councillors can be found here.