The unavoidable increased financial costs facing South Ayrshire Council are in excess of a substantially increased income for the coming year.    

For several months the Council’s Budget Working Group of senior councillors and officers has been seeking ways of matching the money that the Council has, compared with the money that is needed.

And now a challenging call to Directors and Heads of Service within the Council to examine and reduce planned expenditure has been made by the Leader of  South Ayrshire Council, Councillor Gibson T. Macdonald who has warned: “Unjustified cost increases are not acceptable to the Council or to Council tax payers.”

The Council Leader pledged: “We are examining every available area of cost-saving. The challenge being earnestly faced is the most serious one that this Council has ever had to meet. Legally the challenge has got to be met.”
 
And Councillor Macdonald explained: “Anyone who looks after a household or personal budget is aware that you can only spend what you have got.  You can’t have everything you want, and you know instinctively that decisions have to be made on what is important and can be afforded, and what cannot, to make sure you live within your budget.

“Though we deal in millions of pounds it is just the same with the Council.  Councillors are examining every available area of cost-saving.

“This is a huge challenge and answers have to be found before the council tax is set on 8th February, 2007. The decisions that have to be made  are complex.

“It is a most painful exercise and once the Budget Working Group completes the massive amount of analysis of the options available to be examined, it is a fact that some of the recommendations which Councillors will ultimately have to take decisions on will be hard to swallow.

“These decisions will be difficult ones to make – but despite the fact that we have an income of an incredible £227 million, the amount the officers believe we need to spend is  £241 million, and so there is £14 million between our income, and what we are being asked to pay for.

“Whatever adjustments have to be made, they must be made to achieve a budget which is acceptable to the Councillors, and the consequent implications on Council tax acceptable to the Council tax payers of South Ayrshire.”

Directors and Heads of Service within the Council are being asked to examine and reduce planned expenditure and it is being emphasised that unjustified cost increases are not acceptable to the Council or to Council tax payers. 

Councillor Macdonald pointed out: “We have been completely open in stating our intention that Council tax will rise in line with the rate of inflation plus one percent.”

And he gave the undertaking: “When it comes to the budget-setting meeting in February, we intend to put forward proposals which enable us to honour the commitment that has been given to the people of South Ayrshire.”

Explaining further background to this year’s budget setting, Councillor Macdonald said: “We are facing up to service demands of £14 million MORE  than has been made available to the Council by the Scottish Government or through council tax increases.”

And he explained the background to what he termed “unavoidable” expenditure, pointing out: “The Council is having to foot the bill for nationally agreed staff salary and wages increases, increased utilities costs, contractual increases, plus several million pounds more for the job evaluation/single status exercise currently under way.

“We have invested more than £4 million in Social Justice provision to protect the older and more vulnerable in our communities, and at the same time faced up to a short-fall of more than £1 million because the Scottish Government has failed to financially support Free Personal Care for the elderly.

“And now we are dealing with requests for increased spending by all four departments of the Council.”

Documents provided to the Budget Working Group indicate additional income in  2007/08 of £10 million.

Said Councillor Macdonald: “However, that still leaves a gap of £14 million.
The Budget Working Group meetings are closely examining all aspects of the Council’s net expenditure which is in excess of £241 million.

“We must bridge that gap.”

The Council’s Administration has already openly explained that the additional one percent that is referred in formulating the projected increase in Council tax is to go towards the Council’s expense relating to the important PPP project which will provide £73 million of new school building for South Ayrshire.

December 2006