Council approves medium term financial planning approach.

The Highland Council has approved a number of key recommendations as part of its medium term financial planning approach.

Councillors considered revenue budget projections for the coming financial year, medium term planning for future budgets over the next 5 years and forecasted budget gaps, as well as a number of capital developments and future capital strategy.

Despite the significant challenges and risks which were highlighted and noted, there were a range of very positive developments progressed with Councillors reaffirming existing commitments to five new schools, enhanced investment in roads, support for a new North Coast care facility, housing for education staff in the Small Isles, and the development of the new community loans fund.

Members also agreed an approach to developing the Council’s wider capital strategy with detailed discussions to be taken forward in a sub-committee of the Corporate Resources Committee prior to coming to a meeting of the full Council for approval.
Alongside the many positive initiatives that councillors supported, there was also discussion of the challenges that lay ahead with regard to the Council’s revenue budget. It was acknowledged that aspects outside of the Council’s control such as the local government pay award and changes to

National Insurance could have a significant impact on the Council’s finances. The degree of uncertainty around both this and the local government funding settlement, combined with potential pressures such as contractual inflation, meant that the

Council needed to plan for a budget gap in 2022-23 ranging from £9m at best, to as much as £35.4m.

In preparation for this, Councillors agreed a package of initial savings for 2022/23 amounting to £1.61m which included efficiencies through reduced staff travel costs, procurement savings, cost recovery, deletion of some vacant posts, and an increase in commercial waste charges. An amendment from Cllr Blair Allan to not increase the pre-paid tickets for the Corran Ferry and to spread the shortfall in savings across drive-up fare categories was accepted. It was also agreed that members of the Corporate Resources Sub Committee would need to meet to consider what approaches should be taken in the event that the worst case scenario should prevail.

The Depute Leader, Cllr Alasdair Christie said

“The Council is taking a very careful approach to its budget setting process which is taking into consideration the recovery journey that the Council, businesses and individuals are all on as we emerge from the health and economic damage caused by the pandemic. We remain in very uncertain times. This meeting is the first of three Council Meetings, the others being in December and next March, that will shape the final budget of the Council.

"The next step is to continue working towards the finalisation of the budget. A key part of the jigsaw to accomplish this is the confirmation of the amount of money the Scottish Government will be providing to the Council. This is not expected to be known until later in December.

"Today at the meeting, even in these challenging times, the Council has been able to progress significant investment in a range of important services, across a wide geographic area, supporting rural and urban communities to thrive. This has included updates on investment in the following schools: Beauly Primary, Broadford Primary, Charleston Academy, Culloden Academy, Dunvegan Primary, Nairn Academy, Ness Castle Primary, Park Primary, St Clements School and the Tain 3-18 Campus. Additionally we have been able to take forward in an exciting partnership the provision of a new Adult Social Care Homes on the North Coast of Sutherland. All these projects will help improve the lives and learning experiences of our residents and their families.

“As we move forward in developing budget proposals, asset rationalisation will be fundamental to a more sustainable future. We aim to develop a very positive and responsible budget building on the principles of our medium term investment plan.”

28 Oct 2021