Council Urges Government To Provide Covid Funding Clarity

The Highland Council’s Corporate Resources Committee today discussed the Council’s improving financial outlook but acknowledged the severe uncertainty resulting from the ongoing Covid crisis. Of concern to the Council is a lack of clarity over funding that will come to the Council from a UK government scheme to recompense Councils for lost income and Members encouraged both UK and Scottish Governments to provide clarity on the scheme urgently.

Cllr Margaret Davidson, Leader of the Council said. “While this will be welcome news for local authorities in England and Wales, there is an equally pressing need for similar assistance for local authorities in Scotland. We have lost a significant amount of income which is directly due to the impact of the coronavirus and that is why Cllr Alister MacKinnon, our Budget Lead wrote to Kate Forbes, Cabinet Secretary for Finance this week asking what plans the Scottish Government has for implementing a similar income recompense scheme to help councils in Scotland."

She added: “I know Ms Forbes is working with COSLA but we need to see an acceleration of this work so all local authorities across Scotland know where they stand.”

Members of the Committee considered a range of potential scenarios for the potential year end position, focussed around a central scenario showing an overspend of £28.259m. Members recognised the hard work of officers in addressing the Covid crisis and also acknowledged the unprecedented level of risk facing the council in these uncertain times.

A loss of income from fees and charges is the biggest financial concern to the Council in the current year with a potential £18m of expected income of this nature to be lost. The UK government scheme, with funding to be controlled and administered by the Scottish Government, is intended to provide 75 pence of funding for every lost £1 of income. This funding would significantly reduce the forecast overspend facing the Council.

Chair of the Committee, Cllr Alister Mackinnon said “Last month we reported a projected budget overspend of £35.7m in a “mid case” scenario so it is encouraging that a short while later we are now looking at this figure dropping to £28.259m.  This reflects both the constantly changing wider context around Covid as well as the hard work and mitigation measures that have been put in place and I would like to thank the Chief Executive and her staff for all they have done.

 “The details of the adverse wider impact COVID-19 is having on the Highland economy are yet to fully emerge but are expected to be substantial and there is no doubt that the longer-term impacts of these factors will be felt by the Council, both in terms of reduced income generation and increasing demand for services over many years to come.

“Never has there been such a time of uncertainty and what has come over loud and clear in discussions today has been the need for us to all pull together for the benefit of everyone who lives and works in the Highlands.“


20 Aug 2020