POLICE Scotland is unlikely to achieve necessary cost savings to balance its budget next year, the force has announced.
A budget gap of £68.2 million has been identified for the coming financial year but it is only expected to achieve cost reductions of £58.4 million, leaving a near £10 million shortfall under the “most likely” scenario.
But the shortfall could be around five times bigger under a “worst case scenario” outlined in the force’s draft corporate plan, which was presented to the Scottish Police Authority (SPA) in Inverness today.
Staff costs make up over four-fifths of the police budget and the force expects pay inflation of 1% in the years to come.
But if pay rises at 2.5% it would push the budget gap to £82.2 million.
Some cost reductions such as changes to police officer public holiday entitlement, departmental reorganisation and cutting building costs have also been given an “amber” rating, indicating an elevated risk that they will not be achieved.
If these plans falter total cost reductions would reduce to £33.6 million - leaving a total shortfall of nearly £50 million.
The corporate plan states: “The fact that around 85% of our budget is allocated against our staff costs creates a challenge in relation to achieving our savings targets, particularly when we are faced with a number of constraints on managing our people, including the Scottish Government commitment to maintain police officer numbers at or above 17,234.”
The strategy has been developed “in the context of reducing public sector budgets”, it added.
“Whilst considerable progress has been made, the cost reduction plans are currently insufficient to meet the funding challenge in 2014/15 and beyond.
“Police Scotland is committed to working with the SPA to address this funding challenge over the course of the forthcoming year.”
A similar funding gap of £56.3 billion has been identified in 2015/16, but no scoping on cost savings has been done in the current corporate plan.
Police met its £64 million savings target this year and has “built a solid foundation for meeting cost reductions in the future”, according to Deputy Chief Constable Neil Richardson.
The force also expects to exceed the expected £1.1 billion cuts by 2026 through recurring savings established this year.
In his forward to the corporate plan, Chief Constable Sir Stephen House said police reform has taken place “against a challenging financial background”.
“We have significant savings to make and must meet the budgets set for us annually by the SPA,” he said.
“We will use our resources smartly and efficiently in the interest of the public purse and ensure policing in Scotland is modern, effective and responsive to the needs of communities.
“We face the biggest change in the delivery of public services for a generation. The success of Scottish policing is built on the professionalism and dedication of our people.
“I want our whole organisation to live and breathe our focus on keeping people safe and I want people to value Police Scotland as a national asset.
“I believe that this corporate strategy sets the clear direction we need for the next two years, to provide us with the foundations to enable us to transform the delivery of policing in Scotland.”