Edinburgh is facing annual budget cuts of more than £100 million, with council services in the firing line as the climate of austerity continues to bite.
The figure accounts for about a tenth of the capital’s annual spending and there are concerns that the city council, still reeling from the Edinburgh trams and statutory repairs scandal, will struggle to make the cuts.
Public spending watchdog the Accounts Commission says in a report today it is “concerned about the scale of the challenges that the council faces” and warns that “absolute priority” must be given to make sure planned savings are delivered in Edinburgh.
Council leaders say they will publish a draft budget later this year, setting out spending reductions which will then go out to public consultation.
Council leader Andrew Burns recently admitted “nothing can be off the table” as the authority decides where savings must be made.
“We need to deal with the significant financial challenges we face,” the Labour councillor said about today’s report.
“Our new approach to publishing and consulting on a draft budget earlier than any previous council will help us to do that.
“We will continue with our commitment to report openly and regularly on our achievements against the pledges we made.”
The capital has shed hundreds of staff in recent years as cutbacks bite and has debts of about £1.4 billion. It is facing 2 per cent annual cuts in the budget it gets from central government – about £20m a year.
The next four years will squeeze budgets even further. By 2017-18, it will need to have found £107m of ongoing annual savings.
Council leaders say an overhaul of procurement processes, the way it buys in goods and services from outside bodies, will deliver £41m of savings, and a further £49m have been identified. But additional cuts of £7m in 2015-16, £19m in 2016-17 and £17m in 2017-18 will be needed to meet its target.
Although financial problems are found across all 32 councils in Scotland, the situation in Edinburgh is “particularly challenging”, the report finds.
Chairman of the Accounts Commission John Baillie welcomed improvements identified by auditors in partnership working, economic development and children’s services, but said the scale of the financial challenge is substantial.
“The council does have plans for the next four years but there are significant risks and uncertainties around whether these targets are achievable,” he said.
“Its prospects for future improvement depend heavily on it achieving planned savings and addressing the funding gaps that remain. The council should give absolute priority to making sure the savings are delivered.”
Council chief executive Sue Bruce said: “I’m pleased that our achievements in recent years were recognised, especially given some of the challenges we’ve been tackling.
“The auditors found that we already manage our finances well and have a good understanding of what we need to do.”
Every service in Edinburgh - from running schools and libraries to the Edinburgh festivals - could face cutbacks, with council leaders admitting nothing has been ruled out. About £41 million has been targeted from procurement costs. Staff in frontline services are likely to be protected, but there could be workers in back office roles, although compulsory redundancies are ruled out. Empty council properties could also be sold off to find money.