Thousands of council jobs and public services could be axed and local tax raised as Scotland grinds to a halt over soaring energy bills. Senior officials warned they will be forced to close pools, libraries and cut more than 10,000 posts as budgets are stretched to breaking point.
An investigation by the Sunday Mail has found that: tens of thousands of staff could be laid off; council tax could rise by at least 10 per cent; councils face budget black holes of millions as energy bills rise by at least £100million; libraries and swimming pools could shut to save money; and road and street repairs could be scaled back.
Stephen McCabe, leader of Inverclyde Council, said he is facing a £20million budget shortfall and predicted “tens of thousands” of jobs would have to be axed across Scotland to balance the books.
City of Edinburgh Council leader Cammy Day said: “There’s nothing else left to cut. Cutting jobs means services will reduce.”
The Sunday Mail asked every local authority in Scotland if it had checked the impact of spiralling energy costs on its budgets and services. Some are seeing bills rise by 150 per cent and are looking to find millions in extra cash.
Labour’s McCabe, council leader in Inverclyde since 2007, said: “This is undoubtedly the worst financial crisis we’ve faced during my time as council leader.”
McCabe said the group which runs leisure operations in the area is facing an additional £400,000 for energy bills alone this year and has had to consider shutting facilities early.
He said: “They’ve been considering things like closing the swimming pools for periods of time, like the facility in Gourock.”
McCabe said all councils are “in the same boat”, adding: “There are going to be a significant number of job losses
over the coming years – probably into the tens of thousands.”
Despite the Scottish Government lifting the freeze on council tax last year, several local authority leaders said years of stagnant rates have made it impossible to generate significant extra income now without bringing in rises of at least 10 per cent.
McCabe said: “We would be imposing council tax increases on families at a time when they are facing cost of living increases. To get a significant amount of money from council tax, you’re talking about double-digit increases, which would be pretty unpalatable for a lot of people.”
While the majority of local authorities said they had not yet set out spending plans for the next financial year, many admitted they face challenges. Some said they had seen a rise in energy bills of as much as 150 per cent in the past few months, with millions in extra cash now having to be put aside to ensure the lights and heating is kept on in streets, schools, libraries, council buildings and leisure centres.
Labour councillor Day said Edinburgh would have budget shortages of up to £90million this year, with energy bills predicted to double to £10million. He warned jobs and services will have to be examined to balance the budge.
Day said: “Staffing is the largest part of our budget. While we will absolutely support our no compulsory redundancies policy, we will have to look at everything. Things like road repairs won’t happen as quickly, as there will be fewer people to do them.”
Day added that the Scottish Government must now use its reserves to help councils get through the crisis.
He said: “The government sits on hundreds of millions of pounds of unallocated reserves There’s no use keeping money aside for a rainy day because it’s pouring right now.”
In Shetland, a spokesman confirmed there had been a 44 per cent rise in the price of heating oil and a 15 per cent hike in electricity costs since April. Falkirk Council said its electricity bill had risen by 30 per cent in the last year while gas had soared by 150 per cent.
A spokesman said: “Our energy consumption levels will remain roughly the same. However, as costs increase, we will look to use financial reserves but know this is not sustainable in the long term and we will look for other options to reduce costs.”
Lorraine Paisley, chief financial officer at Moray Council, said it has seen a 30 per cent increase in electricity bills, equivalent to about £411,000, since April 2021 and a 153 per cent rise in gas prices in the same period.
Angus Council said it had set aside an extra £1million for energy costs this year but since the budget was set in March, it may have to pay another £600,000.
A spokesman said: “There are only a small number of services we can cease or reduce and there are no current plans to curtail services provided by our culture and leisure trust. This must, however, be kept under review.”
Cosla, which represents all of the country’s 32 local authorities, said all councils are facing cuts.
A spokesman said: “Following the Scottish Government’s resource spending review, councils will have to manage a ‘flat cash’ settlement for the next three years – essentially this will mean real-terms cuts. This continues the trend over the last decade. Councils have had to make increasingly difficult decisions about services available to communities.”
A Scottish Government spokesman said: “The First Minister has committed to an emergency budget review to assess all opportunities to target additional resources to those most in need during this cost of living crisis. We will continue to do everything within our resources and powers to help those most affected.
“We are treating councils fairly and providing a real terms increase of 6.3 per cent to local authority budgets this year. This comes against a cut to the Scottish Government’s overall budget of 5.2 per cent in real terms.”
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