Argyll and Bute Council could face a budget gap of nearly £33m by 2023, a report has warned.
The figure is the ‘worst case scenario’ forecast by head of strategic finance Kirsty Flanagan in a document due to be considered by the authority’s policy and resources committee on Thursday.
Ms Flanagan’s mid-range forecast – the one thought to be the most likely – is for the authority to require savings of more than £17m between 2020 and 2023.
The best case scenario is a gap of £5.6m.
The forecast works on the basis of the same council tax increase as implemented this year, of 4.79%, being repeated in each of the following three financial years.
It is estimated, as part of the mid-range scenario, that council tax funding will treble over the three financial years which follow the current one.
Ms Flanagan said: “The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustment, non-pay inflation and cost and demand pressures, and not factoring in any previous savings decisions or future potential options, is an estimated gap over the three year period of £24.746m, with a gap of £8.298m in 2019/20.”
The report then outlines possible measures to balance the authority’s budget, including an increase to fees and charges of between 1% and 5%, and an agreed long-term redesign of the council’s catering and cleaning service being delivered by 2022.
It also lists savings agreed as part of the council’s budget in both February 2018 and 2019, and the proposed increase in council tax.
Ms Flanagan continued: “In the mid-range scenario, the budget gap estimated over the three-year period 2020/21 to 2022/23 is £17.605m with a gap of £4.917m in 2020/21.
“In contrast, the budget gap in the best case scenario over the three years is £5.658m with a gap of £1.326m in 2020/21, and in the worst case scenario, the budget gap over the three years is £32.836m with a gap of £9.071m in 2020/21.
“Councils now have discretion to increase council tax by a maximum of 3% each year.
“As part of the budget for 2019/20, councils were given the flexibility to increase the council tax for 2019/20 by 3% in real terms, which the Scottish Government confirmed as 4.79%.”
An increase in teachers’ pensions has also been factored into Ms Flanagan’s predictions for the next three financial years.
She added: “The base budget includes the estimated full year cost of the teachers’ pension scheme if it had been implemented on April 1 2019 at a rate of 22.4% – a cost of £1.846m.
“As the rate is increasing by a further 0.6% the full year cost has increased by £0.049m to £1.895m. This additional cost will need to be built into the employee increases.
“Due to the deferral of the rate increase, there will be a surplus in 2019/20 and this surplus could be carried forward to fund the increased cost in future years.”
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