A row is brewing over Fife Council’s spending plans amid concerns the cost of settling equal pay claims could leave a black hole in the local authority’s budget.
Forecasts indicate Fife faces a financial shortfall of £21 million next year which will rise to a staggering £75 million by 2018/19.
The council does have around £40 million in reserves that could potentially be used to plug any gap.
But Fife’s finance chief Brian Livingston has warned against using those uncommitted balances when drawing up a budget for next year due to various uncertainties, not least the spectre of equal pay settlements which are thought to have cost North Lanarkshire Council around £75 million earlier this year.
A similar equal pay figure for Fife would give the council a headache in terms of balancing the books at a time when services are already squeezed, with library closures among the cuts currently in the pipeline.
Fife Council leader David Ross believes the administration is taking a sensible approach to budgeting for 2016/17.
“It would be extremely foolhardy of us to be dipping into balances left, right and centre when we are facing significant challenges,” he stressed.
“I hope we will be able to mitigate some of the impact but when balances are gone, they are gone and it would be imprudent to count on that.
“We’re facing reductions in our revenue budget year on year and going forward we can’t take £75 million out of a budget without it having an impact on services.
“Our job is to do whatever we can to protect the services we think people need and want.”
North Lanarkshire is understood to have reached agreement with around 4,000 female workers, and tribunals relating to more than 1,000 cases in Fife are due to be heard over the next few months.
A hearing on so-called first wave cases, those relating to before the introduction of single status in 2007, is expected in December.
A tribunal on second wave cases or those raised post-2007, could begin as early as next month.
Critics of the council’s stance on uncommitted balances will point to proposed cuts to the likes of the library service, with plans to reduce the number of branches by 16 currently being discussed.
SNP councillor David Alexander accused the council of “understating” the financial resources at its disposal and said he had obtained information that Fife’s equal pay settlement will be “nothing like” the hit taken by North Lanarkshire.
He added that at least a further £7 million could be realised if services across the council eliminated estimated overspends before the end of the financial year, which they have all been instructed to do.
However, Mr Livingston stressed that the balances should be maintained at their current level.
“I can’t argue I’m being a bit cautious but I have to be,” he acknowledged.
“It is important to recognise future pressures and risks that will necessitate the need to maintain sufficient balances to mitigate these risks.”