Highland Council reports a healthy budget and reserves but finances not out of the woods
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Highland Council’s accounts show a £9 million underspend and healthy reserves.
Members said at the latest full meeting in Inverness that a collegiate approach helped get budgets back on track, but tough choices will have to be made in the future.
The revenue budget shows underspends in the majority of services, adding up to a surplus of £9 million in 2021/22.
The council has also hit its three per target for non-earmarked reserves.
The general fund has £19 million available to spend, which is three per cent of its annual revenue budget.
However, council leader Raymond Bremner sounded a note of caution, saying Highland Council accounts need to be viewed ‘in context’.
This context includes the Scottish Government resource review, rising inflation and staff pay pressures, among others.
Scottish Government spending review is key concern
Alasdair Christie, leader of the opposition, says it casts a shadow on the council’s spending plans.
“The biggest concern is the Scottish Government resource spending review,” he said. “Councillor Bremner feels it’s the biggest risk to us because the letter he signs says ‘this may mean making some difficult choices not to continue previous investment commitments’.
“So obviously we’re moving into a very difficult area.”
Councillor Christie asked the administration to provide regular reports on Highland Council accounts.
Conservative councillor Andrew Jarvie also called for enhanced scrutiny.
Councillor Jarvie asked why council previously forecast an overspend, only to later reveal a £9 million surplus. “It’s starting to feel like a narrative rather than a true reflection,” he said.
Councillor Alex Graham raised concern about the 'brevity' of the budget.
Administration leaders promised there would be a full debrief for members.
Convener Bill Lobban said it is the beginning of that process rather than the end.
When the SNP was in opposition, they worked with the administration on the budget. Now as leader, Mr Bremner called for that to continue.
“We welcomed the positive, progressive talks we had with the administration,” he said. “I felt it was a really productive process.”
Difficult decisions ahead
Councillor Bremner did not directly address Councillor Christie’s remarks about the threat to investments. Instead, he reminded council it needs to be careful.
“Sometimes we can a bit irresponsible by thinking ‘crikey, look at all that money there and we’re not spending it’,” he said. “It’s not. The context is absolutely crystal clear.
“We shouldn’t see any headlines saying we’ve got between £19 million and £150 million to spend.”
Indeed, head of finance Ed Foster said the council’s reserves must be spent in a 'prudent and sensible way'. The council will ensure every investment delivers a return, he said.
However, with service demands on the rise and concerns around Scottish Government finance, the road ahead looks rocky.
“We will face very difficult decisions in the coming years,” said Mr Foster.