Auditor unable to give assurance Glasgow City Council is delivering best value amid £110m budget gap

Glasgow City Council is at a ‘critical point’ as it seeks to tackle financial pressures, rising homelessness, growing demand for services, persistent high poverty levels and unresolved equal pay claims. The claims were made in a report by the Controller of Audit, considered by the Accounts Commission.

In addition to these challenges, the council faces a budget gap of at least £110 million between 2026/27 and 2027/28 and the body has called on the council to be more transparent about the scale of the financial challenges it faces.

The auditor reported that it was unable to provide assurance to the Commission or the public that Glasgow is demonstrating Best Value on governance, performance management and financial planning.

Andrew Burns, Deputy Chair of the Accounts Commission said: “There is no doubt about the scale and complexity of the challenges that Glasgow City Council faces, particularly equal pay and homelessness. The council is at a challenging point; decisions made over the coming months will have a significant bearing on financial sustainability and on the services that communities receive in future.

“We need to see leadership, responsibility and robust oversight by councillors. The council must also prioritise its medium-term financial planning, setting out the choices the council needs to make to live within its means. There must be clear plans to redesign services, the resources needed, costs and savings and the impact on communities and budgets. These are vital to ensure the council and its services are sustainable for the future.”

The report said agreeing on a new pay and grading structure by April 2027 is ‘critical’ and that it is the responsibility “for officers, councillors and trade union representatives”.

Glasgow City Council has a mammoth equal pay bill as a result of a botched pay deal in 2006. The council has paid out more than £750m to settle equal pay claims since 2019, across settlements agreed in 2019 and 2022.

Last month councillors voted to approve a plan to bring an end to the dispute—but the move was slammed by trade unions.

According to council papers, the new system will see 63% of those affected gain financially, while 11% will have their wages reduced. The highest drop in wages is expected to be around £11,500.

The report said that equal pay claims are not included in a forecasted £110 million gap but that “the council’s reporting recognised the risk associated with this”.

The council must also show ”sustained leadership from councillors and officers, together with local and national partners” in a bid to tackle the challenges—including homelessness.

Net costs in respect of homelessness rose from £38 million last year to an expected £56 million in 2026/27. The council's own financial outlook, published in August 2025, showed homelessness accounting for £65.7 million of the £109.7 million gap — around 60 per cent.

The report also highlights that a £105 million Budget Support Fund that was established in 2022/23—and designed to support the implementation costs of budget savings options, including severance costs, and to provide support for future budgets—has been used to support the council’s deficit position and homelessness pressures.

In 2024/25, its balance reduced from £53.6 million to £28.5 million, with £14.6 million used in relation to increased demand in respect of homelessness. Subject to audit, the council has reported the fund was fully used up in 2025/26.

In response to the report, Glasgow City Council said it believes there has been a significant developments in the time since the report was carried out.

Councillor Ricky Bell—who will replace Susan Aitken as council leader on September 10 and is the current city treasurer—said: “The issues and challenges called out in this report are not a surprise to us – they are things that we are planning for and working to address every single day.

“The Accounts Commission recognises that many of those challenges are not unique to Glasgow – and that others, such as the pressure on homelessness budgets, are not of the city’s making.”

However, the Commission's findings state the council faces challenges "some of which are unique to the authority".

Cllr Bell continued: “It’s unfortunate that the period when the Commission received and considered this report really straddled the point where we took papers to committee on our new pay and grading system and setting out a new financial forecast.

“I’m confident that, if they were to look again today, they would recognise that areas where we maybe couldn’t give them the certainty they would have liked even a month ago have really moved on quite significantly.”