Committee Set to Receive Latest Budget Position Update as Three-Year Funding Gap Increases

Dumfries and Galloway Council’s three-year funding gap has risen to £30M due to the Local Government Finance Settlement, plus inflationary and service cost pressures.

The Council’s Finance, Procurement and Transformation Committee will receive an update next week (Thursday February 8) on theCouncil’s budget position and financial projections for the next three years.

Committee members will hear how the Council will need to make estimated total savings of £30.08M over the next three financial years – 2024/25 to 2026/27.

The rise is due to the impact of the Local Government Finance Settlement announced on 21 December 2023 – including the Scottish Government’s proposed Council Tax freeze in financial year 2024/25 – as well as the cost of implementing nationally negotiated pay awards and non-pay increases such as inflation.

The report goes on to state that the funding gap will need to be addressed at Full Council on Tuesday 27 February, where Elected Members will agree the Council’s budget for financial year 2024/25.

A range of revenue-raising and savings options are outlined including increased council tax on second homes, council tax increases and changes to services.

Committee Chair, Councillor Ivor Hyslop, said: “Our Council made some tough decisions at last year’s Council budget in late February and this year will be no different.

“In the short-term, we are in a better position than most and through prudent financial management are able to draw on non-recurring resources to protect vital services.

“However, like all local authorities, in the medium-term we face mounting costs and reduced funding.”

Committee Vice-Chair, Councillor Richard Marsh, said: “The ongoing lack of a multi-year funding settlement continues to present significant challenges for service and financial planning for all public bodies including councils.

“The actual funding received by Local Government in the latest settlement reflects a cash-funding reduction of £62.7M, with our Council’s share of this reduction estimated at £3.1M. And no additional resources have been received to support pay increases, non-pay inflation or service pressures.

“Our reputation as a council for ‘sound financial management’ was this month highlighted by the Accounts Commission and we will continue to take a prudent approach to what is a challenging fiscal backdrop.”

To read the full report go to: Agenda for Finance, Procurement and Transformation Committee on Thursday, 8th February, 2024, 10.30 am - Dumfries and Galloway Council (moderngov.co.uk)

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