Cash shortfall hits projects in capital

COUNCIL leaders in Edinburgh have warned that no new capital projects can be funded until 2016 because of a shortfall in funding totalling tens of millions of pounds.

In a gloomy report, officials said there will be no new funds available to fund projects for whichever administration takes power after the local government elections in May.

The cost of capital projects such as building schools between 2012 and 2016 is £42.5 million above the funding that is expected to be available.

City of Edinburgh Council, controlled by a Lib Dem/SNP coalition, already faces a £1.5 billion debt bill and some schemes may have to be scrapped or scaled back.

Councillor Andrew Burns, leader of the Labour group, said: “In terms of capital projects, it will be difficult because not only have we got that £1.5bn of debt, but we’ve also got very steeply declining capital support from central government.”

Current planned projects include the replacement of south southside schools, Boroughmuir High School, for which the council has set aside £7.2m in 2015-16, and James Gillespie’s High, costing £20.2m by 2016.

Despite the constraints, finance leader Councillor Phil Wheeler, said: “The council will always have the scope to borrow from the Public Works Loans Board, and that is far cheaper than borrowing from a bank.”