Council budget black hole may be bigger than £107m

The Tories say schools and care homes could face swingeing cuts

UK government spending cuts, a yawning deficit in health and social care finances, failure to secure already approved savings and a rising population could all result in a larger than expected gap between income and expenditure over the next five years.

Key public services such as schools, care homes and museums could face swingeing cuts if the city council fails to agree a radical reform programme, critics have warned.

The predictions emerged in a report on progress towards a revamp which will seek to slash costs through having fewer management layers and increasing the number of staff under each senior officer.

Planning and delivery of services will also be devolved to local communities in a bid to boost efficiency.

It is estimated the changes will result in a reduction of around 946 job posts, although union leaders have warned this figure could rise once additional proposals are unveiled.

Senior opposition figures said the council’s restructuring plans would have to be far bolder.

Councillor Iain Whyte, Conservative member for Inverleith, said: “This transformation programme, as it’s called, is not transformational enough – it’s not radical enough.

“It only saves half of what we need. We need to reorganise further and more effectively to save far more of that, because otherwise the £34 million that’s called service prioritisation in here will be cuts to frontline services.

“The bottom line is that this is about transforming the council and I don’t think that the previous policy statements of the administration on things like no compulsory redundancy or a presumption against outsourcing allow us to do the things that transform the service enough, that transform the council enough, and make it modern and effective for the people out there.”

He added: “The bottom line in two years’ time or three years’ time is £30m to £50m of savings that we can eat into with a better transformation programme but, otherwise, will mean cuts in health and social care, cuts in education, cuts in culture – cuts in places that people out there don’t want to see.”

Amid plans for a £10.8m reduction in payments to voluntary and third-party groups, fears are now growing that there will be a significant blow to the Capital’s ability to serve and look after residents.

City bosses said they would do all they could to protect core departments but admitted that senior staff had been ordered to come up with plans for further cuts.

Councillor Alasdair Rankin, finance leader, said: “Whilst the coalition is committed to maintaining frontline services to the greatest extent that we can, we do have to save around £107m from the revenue budget between now and 2019-20.

“The coalition’s three budgets to date have achieved almost £80m in annual savings but our budgetary projections make it clear how much further we have to go.

“Further proposals are in development and instructions have been given to directors to come forward with their proposals for some £34m of additional savings.”