Council chiefs in Renfrewshire have been warned they are “sleepwalking into a nightmare” as they face plugging a budget black hole of between £45-£50 million in the next three financial years.
The seriousness of the cash crisis facing the local authority has been laid bare in a report – which paints a bleak financial picture for the period from 2024 to 2027 – prompting a veteran politician to sound the alarm over the situation.
It has been estimated a council tax increase of five per cent in each year would slash the funding gap to a figure in the region of £30-£35m, meaning savings of around £12m each year would be needed to balance the books.
A paper, authored by finance director Alastair MacArthur, said: “It is not going to be possible to deliver savings at this scale without the council reprioritising spend and reducing the scope, level, and quality of some services.”
Councillor Eddie Devine, who has been an elected member for 16 years, said: “It’s by far the most serious it’s ever been, in my time as a councillor.
“I would imagine this council will be faced with making compulsory redundancies at some stage. That’s the only way you can reduce your costs by the amount that is needed.
“There’s no more efficiencies – if that’s what we were to call them – that can be made. We are at the bare bones as things stand and we’ve got the Dargavel saga to deal with. We have got to find between £42m and £45m for a new school.
“It could be a tipping point for the council and there will need to be change. As far as I’m concerned, nobody will recognise this council and others across the country in the next three or four years because of the changes needed.
"We are sleepwalking into a nightmare.”
According to the report, the 2023/24 budget is “heavily dependent” on the use of reserves which have “an increasingly limited lifespan”.
It added: “Without decisive action in the short term that drives out a substantial and sustainable reduction in the council’s net costs, the council risks rapidly becoming financially unsustainable with reserves exhausted.”
And while the local authority has delivered savings of £173m since 2011/12, councillors will be asked to agree that “further savings options” are developed.
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 seeks agreement on our continued work to develop savings and cost reduction measures.
“Compulsory redundancy does not form part of our proposals which consider how we can work differently in the future while ensuring we protect essential public services and continue to support people with the cost of living.”
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