East Renfrewshire: Council faces £30m budget black hole

There are fears the cash crisis will lead to services being cut and jobs being axed.

Residents are also set to face rising charges, including council tax.

And the bleak outlook is made even more challenging as, with the council having already made savings of more than £80m since 2015/16, it has become increasingly difficult to cut spending.

As he launched the first phase of a public consultation on spending plans, council leader Owen O’Donnell highlighted the prospect of no extra money in real terms from the Scottish Government – the biggest source of funding for all councils – over the next three years.

He said this, combined with inflation running at 10%, has created East Renfrewshire’s £30m budget shortfall.

Councillor O’Donnell added: “We already know that the budget process over the next three years is going to be extremely challenging and will require some very difficult decisions to be made.

"I am in no doubt that the major reason for this is the long-term structural underfunding of local authorities. To be clear, these are decisions we do not want to have to make but we are legally obliged to deliver a balanced budget.

"A radical approach to funding will be required, so it’s important residents consider this budget briefing before the engagement process, which will start in the next few weeks.

"The council has already made savings of more than £80million since 2015/16, so to bridge a gap of a further £30million is going to be very difficult.

"It is already expected that it will leave us with no option but to consider cutting services and jobs and increasing charges, including council tax.

"Once the public engagement process is completed, we will listen to the views put forward before setting the council’s budget on March 1 next year.”

The council's budget briefing lists details of where the local authority’s funding comes from, what it spends money on, the cost pressures being faced and the restrictions on which services it can support.

In the second phase of the council’s budget engagement, which will be launched in the next few weeks, residents will have the chance to provide feedback on which services are most important to them.

They will also be able to put themselves in the shoes of the council by trying to decide what services should be cut to make the required savings.

The ‘Budget Briefing 2023-2026: Shaping our Future’ document highlights that the council is facing challenges from soaring inflation, rising energy costs and pay awards.

East Renfrewshire also has a growing population which needs to be supported with council services.

Most of the council’s £300m funding pot comes directly from the Scottish Government, with just 18% raised from what residents pay in council tax.

And a significant amount of the grant funding from the Scottish Government is ring-fenced for national initiatives and policy priorities, such as education and social care.

Around £25m of the £80m worth of savings made since 2015/16 have been delivered via an efficiency drive that has included providing more online services to customers and introducing a number of internal systems which have streamlined processes.

The council has also made extensive use of its financial reserves, committing to using £5.2m from reserves in the current financial year instead of having to make further cuts to frontline services.

However, using reserves to avoid such cuts means there will be less cash available in the future.

Council chiefs have said that, despite the tough financial climate, they remain committed to significant capital investment in important local services.

Long-term projects, such as new schools and leisure facilities, are funded through the council’s capital budget, which is a different pot of cash from the revenue budget used to pay for the day-to-day costs of running council services.

The full budget briefing can be seen online by searching for 'Budget Briefing' at www.eastrenfrewshire.gov.uk.