OIL-RICH Aberdeen may have to cut council services as the local authority tries to plug a £50 million funding shortfall over the next five years, it was revealed yesterday.
Council leader Jenny Laing admitted tough decisions lie ahead for the administration that balanced the books two years in a row without slashing spending or axeing jobs.
She stressed the Granite City remains the “lowest funded” authority in Scotland.
Aberdeen City Council, like other Scottish councils, has had to cope with a council tax freeze imposed by the Scottish Government while the cost of delivering services has steadily increased.
Mrs Laing said: “It will become increasingly difficult if the financial settlement we receive remains unchanged.
“We are aware that there may be shortfalls in our finances in the coming years. We are therefore taking all steps possible to tackle that – that’s looking at efficiency savings, transformational change which will allow us to make economies of scale.
“We will explore other options of that nature to close the gap. However, it may not be possible to meet all savings required in this way and we may have to look at cutting services.”
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The council has already entered into “shared service” agreements with neighbouring Aberdeenshire and Shetland councils. The projected budget deficit for the city council at present is £17m in 2016/17, rising to £30m in 2017/18, £40m in 2018/19 and £52m in 2019/20. Mrs Laing said: “What we have used to good effect in Aberdeen is working in partnership with both the voluntary sector and the business community in order to meet the challenges we face. A good example is the ‘friends’ groups around our public parks, where we have worked closely with them to enhance the public spaces that we have.
“Because they are involved, we have been able to lever in money which wouldn’t normally be available to the local authority.
“We have to accept that type of partnership working will have to be used more often as we go forward. We’ve also entered into shared service agreements with both Aberdeenshire and recently Shetland council to achieve economies of scale and we’ll continue to look at other ways in which to do that.”
But she was quick to play down any suggestion shared services should extend to an eventual merging of local authorities in Scotland.
Mrs Laing added: “I definitely wouldn’t be arguing for that. I think it’s important that we continue to have a council that represents Aberdeen City. “
The council administration is on target to pass its third “no cuts” budget in three years.
Thousands took to the streets in 2008 to voice their concern at plans to slash £27 million of public spending in the city.
Former council leader Kate Dean joined a march herself, citing her opposition to the local authority’s share of funding from the Scottish Government. The Lib-Dem-SNP coalition said it was forced to make the cutbacks, and have argued those decisions allowed the books to be balanced in subsequent years.
Finance convener Willie Young insisted the existing Labour-led coalition will explore “all possible options” before considering any cuts to services.
But he has rejected a call from the opposition SNP group to dip into council reserves of up to £116m to cover the deficit.
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