Robinson: Budget should put financial troubles ‘behind us’
Rosalind GriffithsBudget proposals for the next financial year were announced by the council’s political leader Gary Robinson at the full council meeting on Wednesday.
Next year, 2014/15, will see a £14.8 million draw on reserves, but this, he said, is down from £30 million in 2011/12 and “shows the distance we have come”. Further savings should be made up to 2017 but, if the 2014/15 budget is delivered: “Our difficulties should be behind us.”
Next year there will be cuts of eight per cent on corporate services, 13 per cent on development and 12 per cent on infrastructure. Children’s services and community care will be “protected”, with only two per cent reductions.
The only two new capital projects will be the new Anderson High School and broadband infrastructure.
The council’s financial position is steadily improving, executive director of finance James Gray told the meeting.
The news came after a report by Audit Scotland gave a positive picture of the situation. The financial statements were unqualified and were deemed by auditors to give a “true and fair view” of transactions in the financial year 2012/13.
Although the council had made good progress in saving money it could not be complacent, however, and would have to make “difficult decisions” regarding provision of services. This would specifically mean not eroding its reserves. The council’s medium term financial plan should ensure a minimum reserve balance of £150 million by 2017/18. The plan requires savings of £23 million over the next four years.
Mr Gray said that the council’s reserve fund, in the 20 years from 1993 to the present, has stood at roughly £200 million. These investments are managed by fund managers and they have earned an average annual income of 5.75 per cent, or £11.5 million. Taking inflation into account, at a rough figure of 2.5 per cent, or approximately £3.25 million, a sum of £6.5 million income is left. This could be spent by the council every year without plundering the reserve fund.
During the last year, after taking into account statutory adjustments, the overall draw on reserves was £21.4 million, almost £5 million less than budgeted.
Audit Scotland auditors called the financial report “all satisfactory” and “very positive”, but the “key challenge” was to keep the draw on reserves down.
Another positive piece of news came about the council’s pension fund, which is in good shape, according to external auditor Carol Hislop who addressed the meeting.
Ms Hislop said the pension fund statement gave a “true and fair view” of the situation, with the fund having £306 million net assets. This is similar to the pension funds of other authorities, she said.
john irvine
There is no doubt about it that the SIC are over staffed, some of which are grossly overpayed.
When is this going to addressed? the savings made each year would amount to millions!
Alec Williamson
The worrying figure there is that a further 12 percent is to be shaved from infrastructure yet Education and Social care, the biggest offenders by far, are getting “protected” yet again.
It doesn’t take anything more than opening your eyes to see the effect these cuts have already had on the councils buildings, roads, and we now have ferries having to tie up if one man is off sick!
I happen to know (as they are relatives and friends of mine) that there are many infrastructure workers now on zero hour contracts. No holidays, no benefits at all. Why is this being kept so quiet?
The fact is hundreds of front line workers have lost their jobs, others have taken pay cuts of up to 40%, yet all this is hushed up because they were gagged under the various council “media policies” – they can’t even talk to thier councillor about such issues.
Luckily, those not taken back on under dodgy contracts have been able to move straight into jobs in the private sector due to the massive amount of work going on just now.
All the positive spin and creative accounting in the world cannot hide the simple fact that the clock is still ticking until cuts are made where they need to be.
David Spence
Alec, I have a very worrying view of the future that ‘ zero hour contracts (basically exploitation where the employee will have next to no rights) ‘ and people or authorities being ‘ gagged (powers curtailed) ‘ will become the norm if this vile Tory Party gets its way.
It will be considerably worse if the Tories get re-elected in 2015, and their proposal to quit the EU (I know, time and time again the Tories and Labour have promised a referendum and nothing has been done) will only make their strangle hold on the people of this country very much worse off (since they will not be under the guize of the European Human Rights Act) and they will be able to rule as they please with impunity.
Something to look forward too lol