ARGYLL and Bute Council is forecasting an overspend of more than £500,000 for the current financial year – despite over-recovering nearly the same amount in council tax.

And a report has revealed that a pay settlement for local government staff could add further pressure of more than £2million to the authority’s coffers – even after Scottish Government funding is provided.

The largest part of the already forecast overspend of £545,000 is of more than £700,000 for roads and infrastructure, including an under-recovery of £440,000 on piers and harbours.

This and other losses are offset to some extent by a predicted £493,000 over-recovery of council tax, and an unidentified amount over-recovered from crematoria.

The report forecasting the council’s current financial position will go before its policy and resources committee on Thursday, December 8.

Executive director Kirsty Flanagan said: “The forecast overspend does not include the potential impact of the 2022/23 pay settlement which has now concluded for local government staff (SJC conditions) with the application of the new pay scale and back pay during November.

"Please note that the negotiations for teaching staff and chief officers are ongoing.

“The Scottish Government has agreed to provide an additional £140m of recurring resource from 2022/23 to support the settlement and a further £120.6m of capital funding in 2022/23 and 2023/24 which will be baselined as General Revenue Grant from 2024/25 onwards.

“It has been advised that there is an expectation that a proportionate share of the additional funding is passed over to the health and social care partnership (HSCP), however, this is not a direction and is therefore at the discretion of the council.

"There remains a budget pressure that both the council and the HSCP will require to fund.

“It is recommended that members give consideration as to what share of this funding should be passed to the HSCP. If a proportionate share is passed to the HSCP, this would result in a gap for the council of around £2.1m and for the HSCP £0.5m.”

Also highlighted within the report are £286,000 forecast to be overspent due to a high demand for services and use of agency staff within social work.