West Lothian Council could face a budget gap of £94 million within ten years, financial officers have revealed.
The council’s Executive met before summer recess to hear figures from its accountants which show that even in the best case the budget gap would be as high as £75m by 2032.
The budget agreed this year came after news in December that the gap had grown £10m in just four months.
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Predictions then said the council would come to the end of its current five year term 2027/28 with a deficit of £57m.
Head of Finance, Donald Forrest called the £94m gap “ the most pessimistic of scenarios”.
In a report to the recent Executive meeting Mr Forrest told councillors in the chamber at Livingston: “Although there have been some positive developments in recent months, e.g. inflation reducing to below 10% and the rate of increase of energy prices starting to drop back, the outlook for local government funding remains constrained.”
He added: “Given the government’s non-local government spending priorities, the scope for improved settlements for councils is limited. It is expected that refreshed spending envelopes for future years will not present a positive funding context for public services generally, including local government.”
The report was keen to stress the ongoing levels of financial uncertainty in local government funding as well as the increasing demands for spending. The report detailed expected increases across a range of council services between 2028/29 and 2032/33.
Some of the risks include:
Lower economic growth compared to the rest of the UK would have an impact on Scottish income tax receipts.
• The ongoing uncertainty about the impact of a new National Care Service on council service delivery and funding.
• The continuation of directed spending for Scottish Government priorities, via ring fencing, conditions associated with grant funding or policies limiting local discretion, severely constraining how local authorities allocate their resources to delivering local priorities.
• The uncertainty of potential future pay awards
The mid range figure accountants cited for between best and worst case scenarios is a gap of £84m by 2032/33.
Mr Forrest concluded: “Whilst the forecast is subject to a high degree of uncertainty, and is undertaken at a high level, it provides an opportunity to reflect on the continued difficult financial outlook facing the council.
“It is clear form the full range of scenarios that funding will continue to be less than projected expenditure, and despite delivering over £150 million of savings over the last 15 years, the council will continue to have a constrained financial position that requires more budget savings to be identified.”
Given the funding scenario Council leader Lawrence Fitzpatrick asked: “Would it be fair to ask if we were to maintain the same level of service provision as we have now would we need to see a substantial uplift in the award from Holyrood?”
“That is correct”, replied Mr Forrest.
