Council Leader warns of budget challenges
Local authority faces a Budget shortfall of £15m for 2025/26
Published: 3 October 2024
The leader of East Renfrewshire Council has warned the council is facing significant financial challenges which are likely to impact the services it delivers to the public.
Council Leader Owen O'Donnell said the local authority was facing a Budget shortfall of £15m for 2025/26 and would have to increase council tax and make cuts to balance the books, as well as using money from its reserves. The council could also increase the cost of services it charges for.
Councillor O'Donnell stressed that East Renfrewshire is a financially well-run council and remains one of the best performing in Scotland.
But he said years of real-term cuts in its funding from the Scottish Government had left the council facing very difficult decisions.
He said: 'All the indications are that our funding settlement from the Scottish Government is going to be extremely challenging. We'll find out in December but are planning now for a flat cash settlement and our estimated budget gap of £15m is based on that. If our settlement from the Scottish Government is worse than this then that will mean an even bigger budget gap for us to close.'
The council carried out extensive public engagement in late 2022 on its spending plans for 2023 to 2026, with more than 1700 residents submitting views - the biggest ever response it received. Among the findings were that some people would be prepared to pay a little more in Council Tax in order to protect services and would also be willing to pay more for services which the council charges for.
Councillor O'Donnell said: 'On the back of the Council Tax freeze this year, it is highly likely that Council Tax will have to increase at a higher level than normal in order to protect services. But Council Tax alone, which only accounts for around 17% of our funding, will not be able to fill the gap. We will also have to make cuts to services and draw down on our reserves.'
The council leader also said East Renfrewshire Health and Social Care Partnership, which delivers vital services such as Care at Home and district nursing for vulnerable residents, is also facing huge budget challenges.
The HSCP, which is jointly funded by the council and NHS Greater Glasgow and Clyde, needs to achieve savings of £11.8m in the current financial year, the most challenging position in its history.
A range of difficult decisions have already had to be made to try and bridge this shortfall and residents have already seen changes to some services as a result.
The HSCP predicts further cost pressures of up to £7m for 2025/26 which means there will be more difficult decisions to come.
Councillor O'Donnell said: 'The HSCP is facing a perfect storm of increasing demand for vital services as our population ages and big rises in prescription costs. The financial challenges faced by the HSCP are significant and involve incredibly important services for some of the most vulnerable people in our communities.'
Despite the challenges faced by the council and the HSCP, Councillor O'Donnell said the council would do all that it could to keep standards of service at the highest possible levels.
He added: 'We are determined to navigate the tough choices we have to make. The council has set up a cross-party Budget Strategy Group to support transparency and build a consensus. This collegiate approach has worked well over the last two years and I am sure that will continue.'
