The leadership of Fife Council is in “complete denial” about a £20 million hole in its accounts, it has been claimed,
Peter Grant, the SNP group leader in the region, has said there is no plan of action from the Labour-led administration to balance the local authority’s books.
The claim follows a report detailing a projected net deficit of £3.325m in the current financial year, out of a budget of nearly £800m.
However, Councillor Grant says the windfall has been aided by unique circumstances, without which the council would face an overspend of more than £20m.
Critical of the way the administration has handled the budget, he said the local authority’s finances could spiral out of control.
Mr Grant said: “The real scale of the problem is not immediately apparent this year because there have been unforeseen underspends on things like loan charges and because the recession has meant that pay awards and inflation have been lower than anticipated. These underspends are probably just one-off ‘windfalls’, very nice when they happen but we can’t rely on them happening again next year.
“The underlying position is that the council has an overspend on service provision of nearly £20m. Uncommitted balances at the end of this financial year are expected to be just over £22m.
“If the administration don’t start to show proper political leadership, the £20m overspend won’t just go away in fact, it’s likely to get worse next year.”
The report detailed that Fife Council should have an uncommitted balance of more than £24m by the end of next March, although it has been warned that this will need to be maintained to offset future budgetary pressures.
Mr Grant added: “Labour and their allies seem to be in complete denial about the scale of the problem and about the fact that it’s incumbent on them to do something about it.
“We have some of the best local government officers in Scotland but they’re being led by an incompetent administration who are more concerned with next week’s headlines than with doing the job they were elected to do.”
However, Fife Council’s leader, David Ross, admitted that while the local authority faced financial challenges, providing services for the region’s most vulnerable people could not be compromised.
Highlighting an increase in demand for social care, he said his administration is juggling its budget to ensure realistic savings could be made without compromising services.
“The most important thing arising from this report is that we have received assurances from officers that we will continue to meet our responsibilities to provide social care and to care for vulnerable children,” he said.
“It is well known that Fife Council, in common with local authorities across Scotland, faces significant budget pressures and rising demand for services going forward, with a need to make further savings of £77m over the next three years.
“This report clearly shows we are dealing with these pressures now, on a daily basis. These pressures are particularly challenging for social care and children’s services.
“Although we have always budgeted for rising demand in these services, with additional investment of £12m this year, the increase in demand we are now seeing is significantly more than previously estimated.
“This on its own accounts for the extra costs of £10m we need to find for these services to the end of this financial year.
“This isn’t about blame, it’s simply recognising the realities of the situation.”