Council budget squeeze tightens

Published on Thursday 11 February 2010 08:42

A MASSIVE £41 million of budgets cuts will today be revealed by the city council, meaning community centre and nursery closures and grants slashed for everything from voluntary groups to festivals.

The city council's Liberal Democrat/SNP administration has wielded the axe as expected as the city faces up to a 90m gap in its finances over the next three years.

At a meeting in the City Chambers, it was set to outline the 41m of "savings", which is much higher than the 27m it initially expected to find.

Extra pressures facing departments, such as the cost of changes to teachers' annual entitlement when they are off sick, reductions in planning fee income as well as the ongoing impact of the recession, have all added up to increase the black hole.

Nearly a third of the cuts are in front line services – with school budgets to be reduced as expected by one per cent, saving 2.4m.

Parents are also to be hit by a 3p increase in the price of school milk, while plans to extend free school meals are to be shelved to save the council 1.6m. However, there was some good news for parents, with the administration rejecting proposals by officials to increase the price of school meals.

A review will get under way into the city's nursery and community centre provision, but at least one nursery and potentially half a dozen community centres are expected to close.

The cuts are likely to mean hundreds more council posts being axed. But city leaders pointed to some increased investment, with council tax being frozen for a third consecutive year, an extra 3.16m of spending on care for vulnerable children and an additional 3.7m on services for vulnerable adults.

Councillor Phil Wheeler, the city's finance leader, said: "One of our main concerns over the last six months of deliberations has been to mitigate the impact on front line services and our citizens, especially the more vulnerable ones.

"I hope that people will understand that it is not just Edinburgh but the whole country that is in a tight financial situation at the moment.

"We have got to find savings but we have got to do so as reasonably as we can."

As well as the 41m of savings for the year beginning in April, the council has also identified a further 11.5m of savings for 2011/12 and 7.4m for 2012/13.

Around 28 per cent of the 41.6m of savings will impact front line services.

The council is having to make cuts ahead of anticipated reductions in funding and demographic change.

Aside from the savings, the city's revenue budget remains just above 1 billion – made up of 811m from government grants and 227m from council tax, although spending on capital projects will reduce by more than a fifth to 235m.

The Lib Dem/SNP administration has also given a commitment that Lothian Buses will remain in public ownership.

In reference to comments that savings could be made by ending the city's tram plans, Cllr Wheeler said: "It is important to point out that cutting the trams would not make any difference to our budget.

"The majority of the tram funding comes from the Scottish Government and if they did not go ahead the money would be lost to Edinburgh."

Festival funding is to be cut by 1.5 per cent but Cllr Wheeler insisted that there was still a commitment to helping to fund the festivals.

"We are still committed to supporting the Festival because it is an essential part of our offer to tourists and other visitors to the city" he said.

"We have applied a 1.5 per cent saving but it is not a swingeing cut; it is a realistic cut given the pressures on the public sector."

The extent of the cuts to front line services are certain to anger opposition groups, who had called for the savings to be found elsewhere.

Another of the council's proposals is to put an extra 2m into its reserves, taking them to 10.4m, as part of its attempts to ensure that its "rainy day" fund reaches 12.5m – or one per cent of council spend – by 2012.

Although opposition councillors have previously criticised the need to continue building up reserves at a time when the money could help the city recover from the economic downturn, finance chiefs defended the approach.

Karen Kelly, the council's head of financial services, said: "There is a code of conduct we follow that says to set reserves that are appropriate to the risks. We do not think that 10.4m is a big sum of money to be holding in reserves. The main risk is equal pay settlements but there are others.

"We have been working at building reserves for a couple of years because the reserves were far too low. We had taken a real beating on equal pay and on overspending of previous years so we had to build them up."

The budget was set to be agreed at a special meeting of the council in the City Chambers today.

AND NOW FOR THE GOOD NEWS..

MORE money is to be provided to care for vulnerable groups, as the council attempts to face up to pressures caused by demographic change.

An extra 3.16 million is to be spent on care for vulnerable children and an additional 3.7m on services for vulnerable adults.

Money has also been set aside for the development of two new care homes, with 8.3m to be spent on the 60-room Kings Inch care home in Gilmerton and a further 7.6m on a new care home at Drumbrae on the site of Drumbrae Primary School.

Another 1.3m is to be spent on economic development, while 38m will be spent on improving council homes for existing tenants and getting them up to required standards.

Flood prevention schemes will also benefit from funding. 18m is to be spent on completing flood protection works on the Braid Burn and another 25m will be earmarked for the second phase of the Water of Leith flood prevention scheme.

Opposition councillors draw up their plans

UNDER the council's budget process, each opposition group is assigned a finance department official to help them draw up their own budget proposals.

Labour's budget proposals include saving 390,000 by giving a pay freeze to every council worker on a salary of more than 40,000 and 1.5 million by a management reshuffle, including merging departments. is

Labour is also proposing to find 130,000 of ring-fenced funding to save four Edinburgh Leisure crches facing closure

The Conservatives want to cut backroom education staff by one third in three years and also pledge not to cut school budgets. Other proposals include an extra 3.3m for services for older people and those with disabilities or mental health, and a pay freeze.

Green councillors were not willing to "waste council resources" on drawing up an opposition budget.

It seems unlikely that any of the opposition proposals will be incorporated as opposition groups usually vote for their own budget.