Watchdog predicts £553m shortfall for Scotland’s councils

By Kirsty Morrison

THE ACCOUNTS COMMISSION has predicted a shortfall of £553 million for Scotland’s councils.

The gap between the amount of local government spending and income could grow from £87m in 2016/17 to an estimated £367m in the next financial year.

This is predicted to rise again to £553m in 2018/19.

The Accounts Commission said: “Councils’ budgets are under increasing pressure from a long-term decline in funding, rising demand for services and increasing costs such as pensions.

“All councils face future funding gaps that require further savings or a greater use of their reserves.”

According to South Ayrshire Council, their gap in revenue terms for 2017/18 would amount to £5.4m.

A council spokesperson said: “Our initial financial projections in June 2016 indicated that for 2017-18 we would have a gap in revenue terms of £5.4 million.

“This position is deteriorating as new factors and new information becomes known and the gap is likely to increase significantly further over the period.

“Managing this position and responding to new and changing demands requires the council to alter the approach we take.”

In 2015/16, authorities spent £19.5 billion that saw spending increase on “key services” such as social care “because of rising demand from an ageing population”.

The overall debt for councils currently stands at £13.72bn, costing local authorities about £1.5bn a year in interest and repayments.

Photo Credit: Howard Lake

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