Public services are at breaking point and could collapse unless additional funding is provided quickly, East Lothian' s council leader has warned.
Speaking as a new report revealed the local authority is facing a £1 million increase in its energy bills alone in the coming year, Councillor Norman Hampshire said rising costs had put services under devastating strain.
And he appealed to the Scottish Government to use £600 million expected to come through tax changes announced at Westminster to support public services across Scotland.
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The council leader warned: "If they don’t we are going to see the demise of public services in Scotland."
Mr Hampshire was speaking after a virtual meeting of the council's cabinet heard a financial review of the current general services budget had already seen an overspend of nearly £900,000.
Interim head of financial services David Henderson warned that the council was at risk of not meeting its budget this year despite using £9million from its reserves and introducing over £2million in cuts and efficiencies.
He told the meeting: "The council is operating in an extremely complex and financially challenging environment.
“There is a significant risk the council will overspend in 2022/23.
"The complexity of the financial landscape and uncertainty over future risks means the scale of the challenges facing the council in the years ahead cannot be overestimated.”
His report revealed that a shortfall of around £2.4million in the expected staff pay increase which averages at 7.4|% under proposed agreements was not being met by Scottish Government funding.
And it revealed the huge impact of increase energy costs for the council. saying electricity costs had risen by 25% with gas costs rising by 160% in the year.
Councillor Hampshire said the UK 'mini budget' announced by UK Chancellor Kwasi Kwarteng had done nothing to help the council accusing him of "spooking" the markets and adding to local authority woes.
He said: "The additional costs of utility inflation - 25% increase in cost of electricity and 160% increase in gas, that is just unbelievable.
“Nobody dreamed of that increase and that is only the start. The prediction is that is going to increase even more and it is going to be a breaking point for this council."
He pointed out the general inflation increase had made it almost impossible to continue providing the services required adding “staff are breaking their backs to find savings in every single area we can but there are limits to where we can get to.”
And he said: "The mini budget that was held by the UK Government seems to have just ignored the financial situation we are all trying to live in.
"They have taken this decision to have massive tax cuts that have spooked the markets. The Bank of England can see that inflation is going to rocket, they are going to have to put interest rates up and that impact on a council like East Lothian that has massive growth taking place, huge borrowing to build infrastructure.
"The cost of that borrowing is going to rocket and we will have to pay for that through our revenue and that will impact on every service across this council.
"The only hope we have coming forward is that there is £600 million coming to the Scottish Government and we need them to do the right thing, not to reduce the 45% tax rate, keep it where it is and use that money to support public services in Scotland.
“Local authorities, health boards and public services desperately need this funding, if they don’t we are going to see the demise of public services in Scotland unless that support is given to us quickly.”
A spokesperson for East Lothian Council pointed out that a financial report in June this year had warned the local authority faces a funding gap of £48 million over the next five years ahead of current additional pressures.
They said: "There are concerns that income is not keeping pace with the rising cost of delivering services.
"The council has made use of reserves to set a balanced budget but the level of reserves will not be available going forward, and it needs to be recognised that the bulk of council finance results from central government funding with council tax revenue only contributing around 24% of total budget."
They added: "As noted at this week’s cabinet meeting, a number of substantial pressures are emerging across budgets with the most significant relating to utility inflation, general inflation, availability of labour and materials as well as ongoing negotiations over pay.
"There remains a growing range of uncertainties and financial risks facing the council the scale of which may be difficult to manage within existing revenue constraints during 2022/23 and beyond."
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