Warning West Lothian Council could ‘run out of money’

Saturday September 30th 2023


Written by Local Democracy Reporter, Stuart Sommerville

The leader of West Lothian council has warned that they could “run out of money” unless more cuts are made to services.

The surging number of homeless people has pushed the council to an overspend of £3.5 million only four months after drastic cost cutting in its annual budget.

Councillors will hear on Tuesday that more services will have to face cuts – including a jobs freeze – in a bid to balance the books.

And council leader Lawrence Fitzpatrick warned ahead of the meeting that services were facing disaster and highlighted the financial crisis that has already claimed big city councils such as Birmingham.

Councillor Fitzpatrick said: “We have all seen what has happened with Birmingham City Council recently who have essentially gone bust and they will now be forced to close many facilities and stop all but essential services.

“I believe it’s time to reflect on where we are going and what future we face unless a significant increase in funding is provided to councils.”

He added: “We have done everything that is required of us in terms of agreeing a long-term budget strategy and having strict budget monitoring and controls in place. However, the reality is that we do not have enough funding to deliver the level of services we currently provide. It is not sustainable and this is an extremely worrying situation for local council services.”

Urgent action has been agreed to manage the overspend including recruitment controls and stopping non-essential spending.

Councillors on the Executive – the council’s main decision making committee will be asked to consider bringing on other cost cutting measures.

The long-standing problem of insufficient funding has been exacerbated by the cost of living crisis and increasing costs means that the council will have to deliver savings of £26.9 million over the next three years to help contribute to the budget gap.

The council receives 80% of its funding directly from the Scottish Government, with income through Council Tax making up less than 20% of the council’s budget.

Councillor Fitzpatrick said: “I think it is very important to be clear and up-front in terms of the position we and other councils are in. The figures are set out in front of us and it is clear that we can no longer continue to deliver the services we currently deliver and remain solvent.

“The simple reality is that if we continue to deliver the existing level of services we deliver now, we will run out of money.

“If this were any other organisation, they would be facing insolvency and administration. In terms of what that means for council services – roads, schools, care homes, open spaces – this would be disastrous.”

The monitoring report highlights that the overspend mainly relates to increased costs to deal with homelessness (£2.54m) and residential school placement costs (£736,000). Transport costs for ASN and inflationary costs for catering and supplies for schools and care homes, and staff pressures in care homes also contribute significant amounts to the overspend.

Uncertainty remains over pay increases for non-teaching staff. The council has budgeted for a 3% pay award but an increase beyond that would create a further cost pressure to the council if not fully met by additional Scottish Government funding.

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