Council faces ‘£20m funding black hole’

Council Leader Catherine Johnstone and finance convenor Councillor Kelly Parry consider next year's budget
Council Leader Catherine Johnstone and finance convenor Councillor Kelly Parry consider next year's budget

Further belt tightening is on the cards as Midlothian Council prepares for a possible £20 million budget deficit in 2017/18.

The SNP Group has said everything is on the table in a bid to balance the books - even raising council tax.

But the Labour Group disputes the scenario saying a £10m deficit is more likely.

SNP councillors are in early discussions with council officials and finance convenor Councillor Kelly Parry said: “We have realised that things are going to get tougher and tougher. We have seen a one per cent cut in our budget this year and looking ahead we know of the challenges around pay and some around, we suspect, future cuts in funding from Westminster. We really need to prepare for that.”

She added that increasing the council tax was one of a number of options: “Putting up the council tax isn’t an easy decision to make. It does hit the most vulnerable. It is one of the measures on the table.

“What we don’t want to do is unfairly burden those who haven’t got the broadest shoulders. We have got statutory obligations and have to meet those first and foremost. We have our priorities to try to improve the outcomes of local residents. It is not going to be an easy exercise. It is going to be a challenge.

“The more resident feedback the better we can get an idea where people want us to prioritise funding decisions.

“We have reserves of just over £12m. That is a problem. If we are looking at a £20m gap we don’t have enough money in reserves to make that. I don’t think we should be taking everything out the reserves. It is something on the table as well as the council tax.

“How much do we need to keep and how much do we keep going further and further on this course? What will we be looking at the next again year? We have to be mindful that we might get another Tory government after that. We don’t want to leave ourselves financially vulnerable.”

Labour Group Leader, Derek Milligan said: “At the moment we do not know the outcome of the Scottish elections, where the eventual make up of the parliament will have a huge impact on the budgets of local authorities.

“That said, the Labour group is in constant discussions with lead finance officers about the ever-changing budget position. It is our understanding, as recently as Friday, that the anticipated budget gap for 2017/18, if the Scottish Government impose similar cut to this year, is likely to be around £10m, not the £20m that appears to have been claimed by the administration to your paper.

“Perhaps they are more aware of the plans of their SNP partners to make even deeper cuts to local council budgets, should we be unfortunate enough to have an SNP government after the election.

“On the other hand it could just be that once again they have got their sums wrong.”

Midlothian Green Councillor Ian Baxter said: “This problem has been building for years. It’s a combination of the SNP’s council tax freeze and John Swinney’s massive cut to council funding announced in December. The council’s cross-party Business Transformation Steering Group was set up to address the budget gap but the Labour group has boycotted it for the last four years and its only suggestion seems to be to clear out the council’s reserves and hope something turns up.”