Key council services in Edinburgh are facing "critical" risks amid challenges bringing in new staff to take on lower paid jobs.
A report's "shocking" findings said health and social care is the department worst affected by ongoing workforce shortages, which are likely to continue "beyond 2023".
Presented to the council's scrutiny committee, it rated the level of risk to service delivery and workforce as "critical" which gave rise to major concerns amongst councillors in the meeting on Tuesday (May 2).
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"We've got two critical findings on this which I've never seen before," said the Conservatives' Jo Mowat, who has been a city councillor since 2007. "They go together, service delivery and workforce, I don't know which one you want to put ahead of the other, they're obviously dependent - if you can't get the workforce you can't deliver the service."
Cllr Mowat pointed out that delivery of services is "the fundamentals of what we do in the council".
She said: "If we can't deliver the services there's a question about what are we here for and what do we do.
"We can't afford to carry a council with critical risks in service delivery because when we fail to do that we're failing to educate children, provide care to vulnerable people in their homes, clean the streets."
The report explained the rare critical rating "reflects significant challenges in recruitment and retention of staff across the council, while demand for services continues to rise".
It said: "The council continues to experience challenges in service delivery due to demand and in attracting and retaining people (particularly in some statutory services). Significant challenges are noted within the Health & Social Care Partnership.
"Officers continue to monitor service demand and delivery pressures and, where necessary, plans are put in place to address significant challenges."
Convener Cllr Kate Campbell, SNP, criticised the report for being 'inadequate' as it did not offer a response or solution to the problems highlighted.
"This is really really shocking," she said. "We as a committee have a very important role here to scrutinise."
Edinburgh Council CEO Andrew Kerr told councillors a lot of the issues were to do with recruiting social workers and care at home workers.
Mr Kerr said initiatives are ongoing with universities to attract graduates and apprentices to social care.
And he added consideration was being given to pay rates "given how expensive it is to live in Edinburgh".
The high cost of living in the capital is "clearly having an affect on how we do things" the chief executive said, adding: "If you look right across every sector right now we are struggling to get lower paid workers, and that's everything from retail to bars and clubs and anything to do with the tourist industry are struggling to get the right people because of exactly the same issue.
"If you're not getting paid a high salary then you are undoubtedly struggling to keep your head above water, I think that's a serious issue we're all having to deal with in a market sense."
However Mr Kerr said it would be "naive" to say recruitment and retention of staff was the only factor which resulted in the rating.
He said: "It is something about the way we're working and that has been reported in inspections of these services.
"We've got some change in practice to do alongside attracting the workforce and maybe the two things are connected in some way, however what has been obvious is that our inability to attract workforce is exposing further and further the practice that needs to be changed.
"We're not delivering the services to the extent that we need to do."
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