Councillors at special full meeting of Highland Council agree to set aside £10.9 million of reserves to help plug a budget gap following the impact of the Covid-19 coronavirus
Register for free to read more of the latest local news. It's easy and will only take a moment.
ALMOST £11m of council reserves have been set aside to plug a budget hole caused by the impact of the Covid-19 pandemic.
Councillors approved the measure at a special meeting of the full council today after examining a report which said the shortfall was the result of plunging revenues in the wake of the lockdown, and then lower than expected compensation from central government.
The local authority believes it will receive £8 million less than hoped through the UK government’s income recompense scheme, while a further shortfall of £2.9 million is being predicted after the Scottish Government 'rebuffed' requests for “flexibility around the use of second homes council tax income”.
The report also outlined concerns that fresh Covid-19 restrictions, and further uncertainty over a second wave of the virus, were also likely to cause challenges.
Councillors were also asked to note four possible future measures to raise extra funds if further budget holes emerge – each of which would result in more borrowing by the council. No vote will be taken on those options until a future date, once the council has a greater idea of the ongoing impact of the virus.
Depute Leader Cllr Alasdair Christie said: “Our decisions today highlight the ever-increasing uncertainty facing the council in the current climate, with short- and medium-term adverse impacts on the council’s financial position.
“The report presented before us today details evidence of significant improvements the council has made in managing its financial challenges during the coronavirus pandemic through prudence, tighter budget controls and members’ scrutiny.”
He added: “We know how hard these past six months have been for individuals, groups, schools, care providers and businesses. I would like to take this opportunity to sincerely thank everyone for their contributions to helping our area. We need to be helping each other as much as we can to tackle any second wave and to help the Highland’s recovery."
Councillors also agreed to continue lobbying both UK and Scottish governments for additional funding. Members also approved the release of £3m Crown Estate Investment Funds; and £2.293m of roads investment funding will also be released so that this work can now begin.
Cllr Christie said: “This investment in the council’s infrastructure will be particularly important in enabling employment and assisting economic recovery across the Highlands.”
Until greater certainty is reached on the budget position, any further budget spending will continue to be restricted to essential spending only.
The report stated: “At the time of a national pandemic our communities and staff have demonstrated outstanding resilience and capacity to work together and support our drive to be a sustainable council; it is important that we go forward with confidence in having a range of options to deliver a sustainable council and communicate with confidence to our Highland communities the capacity to deliver services, provide support and take care of the most vulnerable with our partners all within the financial capabilities open to us as an organisation.”
An amendment by Cllr Maxine Smith and seconded by Cllr Pauline Munro was agreed by the council to allow wards with unspent Covid money to spend their cash on projects to assist children and adults post-Covid, such as contributing to playpark equipment. Members also agreed to reconsider the deferment of the £100,000 Playpark Fund and that a report would be brought back to a future meeting of the council on this matter.
Click here to read more council news .
