Fife Council’s finance chief is warning significant change will be needed amid a predicted £17 million budget shortfall next year.
Eileen Rowand says the financial position is worsening and councillors face “increasingly difficult” decisions over service provision.
Service managers are already being told to tighten their belts as the authority faces ending this year £16m in the red.
The £17m black hole prediction includes budgeting for a 3% council tax rise from April..
A freeze could take the shortfall as high as £31.5m.
Ms Rowand’s prediction follows dire financial warnings from both the UK and Scottish Governments.
Both have outlined a bleak picture for the year ahead, with Holyrood looking to make £500m in cuts as a result.
Fife Council finance position ‘considerably worse’ than previous years
Ms Rowand says the national picture impacts on Fife Council’s financial position.
In papers to go before councillors next week, she says each 1% rise in council tax would generate £1.9m additional income.
The finance chief adds: “The council’s forecast position is considerably worse than it has been in recent years.”
This is due mainly to sharply-increasing costs related to health and social care.
Higher than predicted pay rises for local authority staff has also had an impact.
Ms Rowand says: “Budget constraints and increasing cost pressures are putting council finances under severe strain.
“With a proportion of funding being ringfenced or directed for national policy initiatives, there is less scope to properly plan ahead and target resources to local needs.
“As a result, councils are being faced with making increasingly difficult choices about spending priorities and service provision.”
Significant change needed
Fife Council balanced its books last year without any significant cuts.
However, Fife Health and Social Care Partnership alone is expected to end this year £11m in the red.
And the council is responsible for £7.2m of that.
It is due mainly to an increase in the number of home care packages and nursing and residential services for older people.
Meanwhile, the education services predicts a £4.5m overspend.
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