Analysis: Where Edinburgh City Council could look to plug its £150m funding black hole

LAST week, SNP and Labour councillors met to discuss next year’s budget – with it now believed that up to £150m may need to be cut by 2023.

Wednesday, 18th September 2019, 5:23 pm
Waverley Court, Edinburgh Council

In a report earlier this year, Audit Scotland warned that “more fundamental, transformational changes” are required of local councils while having to provide more services – amid Scottish Government funding reducing in real terms since 2013.

But auditors pointed out this week that the city council “has no longer-term financial strategy” – although plans are set to be drawn up this year.

It’s not yet known where the axe will have to fall in order to balance the books. In May, a row erupted when opposition councillors called for alternative savings proposals to be published – which included charging for school music tuition. Additional proposals, which other local authorities have actioned, include increasing charges for leisure and culture facilities. Council tax, currently capped by the authority at a three per cent increase, could also rise more rapidly.

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Edinburgh Council set for 'horrendous' £150m of cuts by 2023 amid audit warning

In February, controversial cuts including replacing nursery teachers with early years practitioners and removing headteachers from stand-alone nursery schools were dropped, despite the authority being forced to cut £33m from the 2019/20 budget. Community policing, Edinburgh Leisure and Marketing Edinburgh all lost funding.

Before 2023, the council expects to see a tourist tax and workplace parking levy in place. But revenue from the tourist tax, expected to be around £14.6m a year and £9m annually from paying to park at work was hoped to raise extra cash – not prop up stretched budgets.

An expected extension of on-street parking permits will create a new revenue stream but it’s unknown at this stage if that will need to support lost parking revenues in plans to overhaul the city centre.

The biggest concern, as stated by the council’s external auditors, Scott-Moncrieff, is the financial struggles of the Edinburgh Integration Joint Board – funded by both the local authority and NHS Lothian. The health board only managed to balance its budget last year after the council was asked to hand over an extra £7.5m – while a budget for this year is yet to be agreed, five months into the financial year.

Ultimately it will be down to SNP and Labour councillors to agree what can be chopped without impacting on the daily lives of residents.