Council agrees £343m of capital investment

At their extended meeting on 14 September, Members agreed a revised Capital Programme, covering a 5-year period 2024/25 to 2028/29.  The Programme will see £343m of capital investment over this period in line with an affordable level of borrowing.

A mid-year budget report set out the Council’s financial position in relation to in-year budget savings, risks and pressures and other key developments relating to the Council’s current financial position.

Until settled, there is the risk and uncertainty which remains regarding the cost and funding implications of pay settlements, as well as a range of inflationary and other pressures including energy and infrastructure costs. The increase and current level of interest rates has a direct impact on the Council through borrowing costs and also indirectly, on the costs of service delivery, as well as the Council’s Capital Programme.

Leader of the Council Raymond Bremner said:

“It is clear that the level of revenue budget gap next year could be in the region of £60m-70m, before any mitigating actions are factored in.

“With that being the case, the level of gap and the requisite level of savings and service reductions to close that gap will yet again be unprecedented. The level of gap into future years continues to be significant and a multi-year approach was needed in order that the Council will achieve a financially sustainable position.”

Cllr Bremner continued: “As elected members, we all want to invest as much as we possibly can in our schools and infrastructure. With the current financial position that continues to prevail, the Council isn’t able to afford everything it would like to do. What we have agreed to do is allocate finance to areas where we need to spend money until future funding becomes more readily available.”

“The revised programme sets out the Council’s commitment to projects under way as a result of previous phases of the Scottish Government’s Learning Investment Programme (LEIP). The programme will also allocate funding supporting repairs and maintenance of named school projects that are included in the Council’s bid to Phase 3 of LEIP whilst we await the outcome of these bids. The Council remains totally committed to building the named schools, but, as has been the case to date, this is contingent on funding being made available from the Scottish Government.

“We will continue to progress these projects as far as the Council can to ensure that they are deliverable should Scottish Government funding be forthcoming.”

It is expected that reserves will form an important part of the Council’s medium term financial planning. The overall level of reserves is significant, with Non-Earmarked Reserve of £70.5m and Earmarked Reserves of £61.3m at year-end.

Councillor Bremner added: “Reserves are limited and can’t simply replace the need for sustainable and recurring funding solutions. They need to be carefully managed and help us in the budget process, allowing more time for the delivery of necessary cost reductions and transformative change to achieve financial sustainability. But this needs to be done on a clear and planned basis, while ensuring the Council maintains an appropriate and prudent level of reserves going forward.”


15 Sep 2023