Falkirk Council is facing the fourth largest percentage budget gap of all Scottish local authorities this year. But an Accounts Commission report, presented to members of Falkirk Council's scrutiny committee on Thursday, made clear that many local challenges are part of a very difficult national picture across Scotland.
For 2022 to 2023, Scottish local authorities faced budget gaps of £0.4 billion in real terms, varying from a 0.2 per cent surplus to a 23 per cent gap. Falkirk, with an 8.1 per cent budget gap as a proportion of net cost services, was behind only Shetland, Orkney and Moray in 2022 to 2023.
The previous year, Falkirk had been fifth in the table, which meant it was "going in the wrong direction, "councillors agreed. The Scrutiny meeting was considering a report from 2021 to 2022 but members also heard that the Accounts Commission's most recent report, published in May 2023, made it clear that the situation is not improving.
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It states: "Councils have never faced such a challenging situation", as "costs are going up and the amount of money councils receive to run services is set to get less."
The earlier report noted that while funding from the Scottish Government increased in real terms, an increasing proportion is formally ring-fenced or provided with the expectation it will be spent on specific services.
And it also found that the economic situation is impacting on council's capital programmes. The commission noted too that "the outlook for local government finances is challenging with many relying on reserves to help bridge the funding gaps."
Falkirk agreed to use £10.3 million to help bridge the deficit in 2022 to 2023 - and in this it was not alone. The Accounts Commission report highlights that two-thirds of local authorities planned to use reserves to help bridge the gap.
Councillor Brian McCabe asked why Falkirk's budget gap is so large. Chief finance officer Amanda Templeman said that wasn't an easy question to answer as there are many factors.
She added: "What I would say is that we have previously flagged in reports that as a council we've historically had one of the lowest council taxes but we've also historically had one of the higher provision of services.
"And there's a sense that those two diverging streams are going to cause us problems. The need to redefine our services and bring them back to what's affordable is becoming more urgent and that's reflected in the reports in front of members."
She said some of Falkirk's recent controversial options for saving money were a result of the council offering more than the statutory minimum. But recent votes have shown that councillors are still unwilling to take decisions that would be very unpopular.
In the last month, plans to close four high school swimming pools were knocked back while changes to home-to-school transport have been delayed. Members of the Scrutiny Committee said they planned to note their concern at a meeting of full council.
Councillor McCabe said:"Yes, historically we did have the lowest council tax and the highest levels of provisions and that's what we should be aiming for. However, the two examples you gave - the pools and school transport - we can't agree on and I don't see why we should be making these draconian cuts."
He said that if the Scottish Government did not give councils more latitude in making spending decisions he warned the local authority would "have real problems, if not this year then next." This year's draft annual accounts will be with the auditors by the end of June so councillors can see a fully up-to-date position.
