Edinburgh council bosses discuss increasing parking charges in a bid to “protect front-line services"

The council leader said he will be “blunt and honest” with people about the decisions being faced ahead of next month’s budget

Increasing parking charges, using up reserves and leaving hundreds of jobs unfilled are among the options being mulled by Edinburgh Council bosses in a bid to “protect front-line services”.

Speaking ahead of a “difficult” budget next month, council leader Cammy Day said he wanted to be “blunt and honest” with people about the decisions being faced in order to plug a funding gap of around £20m.

He warned whilst his priority was to shield funding for action on poverty, net zero, and to “get basic services right” that “every service across the council” would experience “some level of cuts” to address the organisation’s financial challenges in the year ahead.

Increasing parking charges, using up reserves and leaving hundreds of jobs unfilled are among the options being mulled by Edinburgh Council bosses in a bid to “protect front-line services.” Photo: Scott Louden

“When we’re getting ten, twenty million pounds of cuts something has to go somewhere,” he said.

And things are likely to get much worse before they get better – as he revealed a “worst case scenario” could see the authority’s financial black hole grow to £200m in the next five years.

But he played down any immediate concerns about ‘effective bankruptcy’ as has been increasingly declared by councils in England unable to meet their legal duty to set a balanced budget.

He said the Scottish Government should “recognise” his cash-strapped council was the lowest funded in the country per-head by giving it more funding and freedom to spend it how it likes, with less cash ring-fenced.

Council bosses are proposing slashing £8.2m from city schools to help bridge the gap, however he said he was “not convinced” his administration and fellow councillors across the chamber would approve the full cut to the already-stretched education budget.

The Labour city leader told the Local Democracy Reporting Service potential measures to balance the books included raising parking charges – just a year after drivers were slapped with a 20 per cent hike.

Increases to fees and charges across the council will generate some additional income, having brought in an estimated £1.19m in 2023/24.

A “big chunk” of the budget’s overall gap – which sits at around £50m before various mitigations are factored in – will be filled by reducing contributions to the council’s pension pot.

Cllr Day said as the pension fund was “in a really good place” compared to previous years this could be done without impacting employees’ benefits.

In addition the council “deliberately won’t fill vacancies” to save cash.

“We’ve got a few hundred vacancies and they just won’t get filled as quickly,” he said. “But that for me is still a cut.”

Money from the city’s Covid recovery fund and general council reserves – but “not a lot” from the latter – will also be eaten into.

“All these things are being looked at to try and protect front-line services,” Cllr Day said. “But I don’t want to pretend that year on year we’ve not cut things. Every year we do because we’re underfunded by the Scottish Government.

“Every service across the council will undoubtedly take some level of cuts this budget.

“It worries me that I can’t as the leader of the city deliver the services we would like to deliver because of the consistent erosion of council funding.”

However he said he planned to be “blunt” with the public about the “really hard decisions” being faced and the resulting impact on public services.

Reflecting on events south of the border where a number of local authorities have declared effective bankruptcy due to dire financial positions, Cllr Day said: “The public sector is not in a good place.

“We’ve seen what happened in Birmingham, Nottingham and some other authorities down south where chief officers have told them they are now effectively not a going concern.”

Asked whether he was concerned about Edinburgh Council going bust, he said a “worst case scenario” modelled by finance officers showed the council could find itself facing a £200m deficit within five years “if things went badly wrong”.

However he said Edinburgh had a “really good finance team who are really robust in what they do” and remained confident the authority would not reach that point.

He added: “I say that on the assumptions that revenue grant funding continues at a reasonable level, that pay rises continue at a reasonable level, and the council tax continues to be allowed to increase and that there are no more constraints put on us by the government.

“But some of the smaller councils who have very limited reserves to help them get through difficult times, I’m not sure how they’re going to cope with this.”

A spokesperson for finance secretary Shona Robinson said: “In 2024-25, Edinburgh City Council will receive £988.6 million, an increase of £48.5 million or 5.2% compared to 2023-24, to fund local services. In addition, all Councils will receive their fair share of the currently undistributed sum of £365.3 million following agreement with COSLA.

“In the face of a profoundly challenging financial situation, the Scottish Government is making available record funding of more than £14 billion to councils in 2024-25 – a real-terms increase of 4.3% compared with the previous year if the council tax freeze is accepted.

“We recognise the crucial role councils play in their communities, which is why we have increased their overall share of the Scottish Budget. Scottish Ministers have made no secret of the tough choices that have been required to balance the Budget, after an Autumn Statement that failed to provide the funding Scotland needs for its public services.

“This will come as a blow for Anas Sarwar’s authority, as the Labour leader has said he support the SNP’s plans to freeze the council tax.”

Councillors will meet to set the 2024/25 budget on Thursday, February 22.