The leader of Aberdeenshire Council has warned that there will be “winners and losers” as it prepares to set its budget for the year ahead.
Currently, the local authority is looking at an overspend in its general fund of £6.5 million. However, it will have to pay its share of the overspend in the Health and Social Care Partnership which has been forecast at being £26.2m over budget.
Aberdeenshire Council has to contribute around 43% of funding to the partnership, expected to be in the region of £11m. With this in mind, the council believes it will be overspent in total by around £18m – but this figure could increase yet.
Speaking to the LDRS, Gillian Owen admitted that setting the upcoming budget for the next year has been “tougher” than the last. This time last year, the local authority was facing a £35.45m black hole while battling a council tax freeze.
A number of cuts were made to claw back much-needed cash including axing school crossing patrollers and janitor posts, as well as closing service points. But one year on, the council is faced with more financial woes but less solutions on the table.
She explained: “When you’ve got £66m to find, you end up balancing the books. When you have to find £40-50m more, the pond is getting smaller in terms of what you can do. Many councillors will talk about salami slicing, but there’s not much of the sausage left to actually slice.”
Half-way through the financial year, council teams were asked to move to essential spend only. This meant that everything the local authority was paying for had to be looked at, leading to difficult cuts being made.
An example of this was the recent decision to stop presenting celebratory gifts of flowers and whisky to residents marking milestone birthdays and anniversaries. However, taking this route seems to have had a positive impact as £4.2m has been saved since November. But, Mrs Owen stressed: “That doesn’t mean to say we are out of the woods.”
The council leader also revealed that Aberdeenshire is due to get more financial aid from the Scottish Government than it was expecting. While this is a positive outcome, she explained that it may not necessarily be available for protecting council services.
She said: “It more or less nets out when you take into account the ring-fenced ways we’re expected to spend it. It isn’t necessarily cash we have got to spend, it’s cash that we pass forward.”
Mrs Owen revealed Aberdeenshire Council is the fourth worst underfunded in Scotland. She also suggested that if it received the national average, it would get enough money to wipe out its deficit and comfortably pay its partnership percentage. But despite the extra boost, the council leader issued a stark warning to residents across the region.
“There will be some winners and some losers, and obviously the losers won’t want to miss out and they will want to keep digging their heels in,” she said. “Things are tough and I suspect it will remain that way for quite some time.
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“We do not have the money to do everything people think we should do or perhaps, what we have done in the past. Things will have to stop and that’s the focus.”
While Mrs Owen wasn’t willing to confirm any potential cuts or savings, there was one thing she was happy to admit. “We’re not going to raise council tax by 20%,” she stated.
Her admission came after it was reported that a “super hike” was due to hit residents across the region. The council leader also wanted to “disperse a myth” about raising council tax by 17%.
She explained the figure was put in budget papers last year but it was purely based on plugging the financial gap without making any cuts or savings. And while the council tax level has yet to be determined, feedback from residents could help to make the decision easier.
Mrs Owen revealed: “Of those who responded to the budget engagement, 54% said they could manage a 5% rise, 25% said they’d manage 10% rise. That is a steering figure for us but it can’t be the be all and end all because bottom line, we need to balance our books.”
Councillors will discuss and set its budget for 2025/26 on February 20.