Dire Warning of cuts in services

Fiona Howard • Published 24 Dec 2009 10:35 0 Comments

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A DIRE warning of cutbacks and difficult decisions ahead has been issued by the leader of Argyll and Bute Council.

Over the next three years the council will be some £30m short and is facing an "unprecedented" financial situation as it prepares to set next year's budget, Council Leader Dick Walsh said on Thursday.

And while many pundits are saying that the recession is over Councillor Walsh says that for the public sector it is only just beginning.

In a pre-budget briefing last week Councillor Walsh said: "The public sector is about to feel the recession and it will probably be longer for us because of the national financial situation."

He warned that the council must balance its budget to balance its books and the freeze on council tax rises limits any local authority's ability to manoeuvre.

That, and commitments to such things as teachers' pay and the legal obligation to pay landfill tax, mean that many savings will have to be made in other areas.

Bruce West, head of strategic finance, explained that while Argyll and Bute Council will receive a settlement increase of 2.8% from the government, a number of factors including inflation and commitments such as teachers' pay and landfill tax, meant that massive savings will have to be made.

The council must make savings of £10m a year for three years.

Mr West said: "It is going to generate quite a difficult situation for the council, a number of difficult choices will have to be made over the next few years."

Councillor Walsh said: "The background to the budget is obviously the recession. It will have significant implications for people. There will have to be difficult decisions taken that will impact on people.

"It does create uncertainty until we go through the process.

"We feel that the public sector is about to experience the recession. As public sector funding reduces to enable the government to bridge its gap, that in turn will create major problems for local authorities. The situation is unprecedented.

"We will have to look at local services and quality. We will be committed to providing quality services."

And Chief executive Sally Loudon said: "In the public sector we are on uncharted territory and Argyll and Bute Council is not alone.

"We are looking at every opportunity we can to be more efficient as an organisation."

The local authority is hoping to engage its 4,500 staff in developing ways to make savings and Councillor Walsh said that the management team are very aware that the council is one of the biggest employers in Argyll and Bute and its staff live in the areas they work in and contribute greatly to the local economy.

Talks will be held with the trade unions to discuss options and implications of the situation.

The officers and leader warned that there may be a need to increase prices for some services like halls and swimming pools and leisure facilities, that there may be an increased reliance on the third sector in future to provide some services like care of the elderly and they may also look at shared services with neighbouring local authorities.

In a briefing statement the council says: "The Council accepted the role it has to play in getting the country back on an even financial keel and knows it will need to pick up its share of the cut in public sector expenditure.

"In Argyll and Bute the economy is more dependent upon the public sector than in many other places. This has protected it compared to some other areas - so far.

"However, long and sustained cuts to public sector funds potentially leave the local economy under a greater long term threat.

"This scenario provides a real dilemma for the council. It will need to consider how it reduces its expenditure in a way which minimises the impact on the local economy."

Councillor Walsh warned that public perceptions and expectations will have to change and there will be some very tough decisions ahead.

The council will bring its proposed budget to the table towards the end of January.

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