Glasgow City Council facing £120 million budget gap

Glasgow City Council is facing a £120m budget shortfall over the next three years, with new charges, service cuts and selling off property among the options to plug the gap.
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The council’s finance director, Martin Booth, has said the financial situation is “extremely challenging”, as, following years of budget cuts, inflation has “significantly exacerbated” the position.

In a report to councillors, which reveals the council is planning a three-year budget process, he said savings of £120m would be needed.

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The predicted figure is lower than it could have been after the Strathclyde Pension Fund reported a huge surplus, which will allow a reduction in pension contributions from the council. 

Mr Booth’s report stated the pension fund’s strong results will “provide reductions in employee costs in the first two years of this budget”.

He is “satisfied” the council can assume local government will receive “a minimum of flat cash for the next three years” from the Scottish Government, and can plan a three-year budget.

“This provides more time to plan and implement budget options so allows for more complex and significant proposals to come forward,” the report added.

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A cross-party budget working group will consider options in November, and savings targets have been agreed for all services, except social work.

Principles to “underpin” the savings options include redesigning services or prioritising “services identifying areas where services need to be reduced or ceased based on risk, affordability and demand”.

Property and land which is “commercially attractive” could be identified for sale while options to minimise running and repair costs will be considered.

Opportunities to “increase existing charges and the introduction of new charges” will be explored as well as how technology can “improve service delivery and provide efficiencies”.

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The financial forecast has been prepared based on “assumptions on the likely levels of funding” from the Scottish Government” and “known and anticipated changes to expenditure as a result of pay increases and budgetary pressures”.

“For a significant number of years the council has had to identify savings in order to produce a balanced budget,” the report added. “The inflationary pressure faced in recent times has significantly exacerbated this position.”

It stated: “The financial challenges facing Glasgow City Council remain extremely challenging and despite the benefits from Strathclyde Pension Fund we still require to make savings of £120m over the three year period to produce a balanced budget.”

Councillors on the city administration committee will be asked to agree to plan for three-year savings from 2024/25 at a meeting to tomorrow, and to set a balanced budget when the council meets on February 15 next year.

The Scottish Government budget will be set on December 19 and the council expects to have confirmed figures by mid-January.

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