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

Auditors have warned that around £150m could be cut from city council finances by 2023 with no longer-term plan for balancing the books in place.

Wednesday, 18th September 2019, 6:00 pm
City Chambers, Edinburgh

The city council’s governance, risk and best value committee heard from external auditors, Scott-Moncrieff, for an update on the authority’s financial picture.

When the city council agreed its budget in February, around £33m was earmarked for the axe. The audit report reveals that last year’s budget was only balanced due to one-off measures – while the authority has no “longer-term financial strategy”.

It adds: “The savings requirement over the four year period for the framework is estimated to be £134.8m. The council also noted that if a similar finance settlement was received, as in 2019/20, the revised savings requirement would be almost £150million.”

Nick Bennett, from Scott-Moncrieff, said that “the challenges are ever-increasing”.

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He added: “The council has a well-developed medium-term revenue budget framework but there is no longer-term financial strategy.

“We do raise within the report the fact that only 60 per cent of the savings were achieved in the previous year. Given you have some significant financial challenges and a savings plan, it’s very important those savings are delivered.

“Given in previous years that the amount of achieved savings was only 60 per cent, the budget was balanced from savings that were from more central allocations like loan charges. They have already been built in so it’s important you keep an eye on achieving those savings.”

Labour Cllr Gordon Munro, raised concerns that technology problems through provider, CGI, which are also flagged in audit reports, will add to the council’s challenge in meeting savings targets.

He said: “It’s my understanding that quite a lot of the sum here is contingent on new technology performance and actually realising gains in that way.

“We do have what you are calling financial sustainability of the council as a significant risk for us.”

He added: “Audit Scotland say that councils face challenges in respect of their finances. This is not a challenge it’s horrendous.

“The figures were tough enough to start with but the increase to nearly 10 per cent of the council budget on top of the cuts to date of £240m will see more services lost and more workers leave.

“Holyrood can change this – they issued a report in 2015 that said what needed to be done, that’s the real challenge that needs to be met but it requires political will to make it happen.”

The council’s head of finance, Hugh Dunn, moved to reassure councillors that technology improvements were not the most important method to meeting savings targets and is confident more progress will be made this financial year.

He added: “We believe about £14.4m of the savings weren’t achieved last year. There are various reasons for that – you can put some down to the garden waste scheme that came in half way through the year. We now have a full year, so going forward, that is being achieved. Other ones linked to process, automation and customer are now being achieved.

“Of the element last year that wasn’t achieved, I would say that about 25 per cent of them have been achieved this year. The two areas I need to look at more are health and social care and property and facilities management.”

A council spokesperson added: “Our revised savings requirement for 2019/20 is £33m, as reported in February following confirmation of the Scottish Government’s financial settlement to the council.”