Warning Over Council Budget Shortfalls

The Town Hall

The Council’s head of finance has warned members that they need to start planning for significant shortfalls in the budget next year.

And measures to “balance the books” could include reducing costs, dipping into reserves or trying to raise more income, most likely through increasing Council Tax rates.

Iain McCulloch, speaking at Tuesday’s Policy and Resources committee, said that the government was implementing changes in how local authorities are funded and there were likely to be cuts in the grants the Council receives.

However, the government has still not announced what these will be and the Council is unlikely to hear it allocation for next year until 19th December.

Changes to the way business rates are collected are also going to have an impact and there will be, “a huge amount of extra complexity” in managing the finances.

Iain advised the committee chairs that they would need to sit down with their officers and go through the budgets carefully to identify potential savings.

And while Scilly has been spared the worst of the cuts so far, Iain warned that, “we need to plan for the worst and hope for the best.”

Cllr Richard McCarthy said the process facing them was “challenging and daunting,” but recognised that it was also a valuable exercise that had to be done.

However, Cllr Christine Savill said it was also important that the Council sets its overall priorities rather than leaving this to individual committees.

Estimates made by the finance department show that in 2013/14 the council deficit could be anywhere between £174,000 at best and £451,000 in the worst case.

Committee chairs will need to have their budget figures in place by early next year.


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