Renfrewshire Council faces 'key decisions' in efforts to tackle £50m funding gap

Renfrewshire Council will need to make “key decisions” about services as it targets £35m in savings over the next three years.

The extent of the cash crisis facing the local authority has been reiterated in the latest financial update, which will be presented at this week’s meeting.

A funding gap of £45m to £50m remains the position for 2024 to 2027 – but this would reduce to £30m to £35m with a five per cent uplift in council tax each year.

A paper, authored by Alastair MacArthur, director of finance and resources, will be considered by elected members on Thursday.

It states: “The council will still be required to take key decisions on service reform, scope and design which ensure service costs are in line with available resource over the medium to longer term, with reserve balances being used prudently to provide some time and space for service change to be embedded.

“Without this decisive action, and delivery of substantial savings and cost reduction, the council will find itself in a position where reserves are exhausted and no longer capable of supporting the recurring revenue budget deficit.

“In such circumstances, the council would move to a position of being financially unsustainable – necessitating immediate, unstructured spend controls and rapid cost reductions which would undoubtedly impact services and communities more severely than any planned change.

“Elected members will have seen recent examples in England where major councils have moved into such territory for a variety of underlying reasons and where the impact on services is expected to be both rapid and significant.”

In the report, Mr MacArthur adds that securing £35m of savings will be a significant task for the local authority, because of the scale and need to do so after a “long period of financial challenge”.

Councillor Eddie Devine, who represents Paisley Southeast, believes the council could be unrecognisable at the end of the current term in 2027.

He said: “Birmingham City Council basically declared itself bankrupt earlier this month. Is this the direction that Scottish local authorities are heading in?

“I’ve never seen anything like it in my life as an elected member in terms of the scale of what we are looking at.

“You can see it in this report, which talks about service reform and the need to deliver substantial savings and cost reduction.

“Renfrewshire Council needs to explain to the public exactly what that means.

“I honestly don’t think this council will be recognisable at the end of the current term.

“It will be a lot different to what we have been used to.”

A council spokesperson said: “We have a strong financial track record in Renfrewshire and have made significant savings of more than £170m since 2011, but like all councils across Scotland we continue to face hugely challenging financial circumstances.

“This latest financial outlook update to councillors details the significant pressures we are facing and highlights the continuing need to develop savings and cost reduction measures.”