Clackmannanshire Council must 'urgently address' financial sustainability, auditors warn

A Scottish council has been commended for “continuous improvement” of its local services but must “urgently address” its financial sustainability, a new audit report has said.

The Accounts Commission said Clackmannanshire Council must make savings of £22m by 2026/2027 and that it “cannot continue” depending on reserves and one-off savings amid “significant” financial pressures.

Council leaders say they are prioritising “transformative working”, with £70m worth of savings made since 2010 against a current revenue budget of £161m.

The new report said the local authority has succeeded in developing key areas over the last five years including community engagement, addressing climate change and setting priorities.

But it added that in recent years, some services for local people deteriorated, with staffing challenges further reducing performance.

Auditors have urged the council to develop and deliver its programme of transformation to ensure financial sustainability.

They said more detail is needed regarding the projects that will deliver savings and improve outcomes and it must ensure it has the resources in place to deliver this change.

The Commission also urged the council to develop a medium-term financial strategy, clearly linked to its other strategic plans for transformation, workforce and investment in buildings and infrastructure.

Financial plans must also show how current funding challenges with the local Health and Social Care Partnership will be addressed.

Jo Armstrong, chair of the Accounts Commission, said: “Today’s report highlights the progress made by Clackmannanshire Council. The council should rightly be proud of these achievements.

“There are positive working relationships between councillors and staff and across political parties, with evidence of collaborative working to agree priorities and budgets.

“But we cannot ignore the fact that the council faces a particular combination of challenges, including strain across recruitment, staff capacity and high sickness absence.

“This is alongside the financial challenges faced by all local authorities in Scotland. The council must develop in more detail and deliver on its plans to transform how it works and the services it will deliver in the future.

“This is critical to ensure it can operate within budget. We look forward to reviewing the progress made in the 2023/24 annual audit report.”

Council leader Ellen Forson said: “It was great to hear the Accounts Commission say that our report is probably one of the best reports they’ve seen at its public meeting on September 12. For Scotland’s smallest mainland authority to show we continue to punch above our weight on so many fronts was really good to hear. It’s fantastic to have our hard work and all the progress we have made acknowledged by our watchdog.

“I’m also keen to point out that, while we have made significant progress, we are not complacent. We absolutely realise the significant challenges ahead, particularly in respect of financial sustainability as the Accounts Commission has highlighted.

“We also recognise that many of these challenges lie outwith our control. That is why we have prioritised transformation and collaborative working, with the aim of achieving financial stability, for the past six years, and will continue to do so in the future.”

Chief executive Nikki Bridle echoed the leader’s comments and added: “My thanks go to our staff, our communities, our partners and our collaborators for their hard work and support in helping us to get to where we are.

“I very much look forward to continuing to work together on our shared ambitions and priorities for Clackmannanshire.

“There is no doubt we are working in a very challenging context and we remain resolute in seeking to address these challenges together.”