Council ‘facing £8.3m funding gap’

COUNCIL chiefs in Argyll and Bute have warned they may have to look at plans for next year’s budget earlier than usual – with a funding gap of £8.3 million on the cards.

Argyll and Bute Council’s executive director has also said that the prediction already factors in a five per cent council tax increase in the 2025/26 financial year.

But a pledge has also been made to look at additional sources of revenue after a councillor warned that there was “only so much” the authority could do to increase council tax or reduce services without affecting local residents.

The budget for 2025/26 will be set next February.

The discussion took place at a meeting of the council’s policy and resources committee on Thursday, May 9.

Executive director Kirsty Flanagan said: “£8.3million is a huge figure, and we have not had something like that for some time.

“It also assumes a five per cent increase in council tax, so members will need to give that figure some consideration.

“One of the two biggest assumptions that affect the budget outlook is the Scottish Government grant. We have built in a 0.5 per cent reduction, which it is prudent to do. Had we not got the additional £62.7million, we would have had to assume more than 0.5 per cent.

“The other is the two per cent pay award.

A lot of finance colleagues are putting in two per cent for next year, and we will see how the conversations go this year.

“We are hoping that with inflation reducing, that will take some pressure off, because much more is not affordable. It is one we will have to keep under review.

“We are already in the May, and months seem to go by so quickly, but we may have to look at this earlier than usual if we want to bridge the gap.”