Budget update

The Cabinet paper notes a number of new policy obligations on the council including investment in the expansion of childcare, health and social care integration, implementation of the Barclay Review and Carers Act.

While resources have been earmarked to support implementation of these policy obligations in accordance with Scottish Government requirements, the paper estimates that core revenue funding from central government – which provides the majority of the council’s budget – has been reduced by 2.5 per cent or £4.2 million. The council, meanwhile, expects costs to continue rising most notably the heightened levels of inflation and staff pay awards.

As a consequence of the proposed grant settlement, the council faces an estimated funding gap across the next three financial years of £7.9m in 2019/20, rising to £12.0m in 2021/22.

While the council has been given a one-year settlement by the Scottish Government, the council sets multi-year budgets to maintain strong financial planning. The draft budget proposes a 3% council tax increase in 2019/20 (the maximum permitted), followed by 5% increases in 2020/21 and 2021/22. A rent increase of 5% is proposed.

In support of the anticipated growth in East Lothian, a near £300 million programme of capital investment over the next five years is also proposed. This includes new and expanded schools, improvements to local facilities, and infrastructure.

Council Leader Willie Innes said:

“Our draft budget is focused on maintaining the highest possible quality of services for local communities, helping children achieve their potential, supporting vulnerable people and building the local economy.

“The amount of funding available to us from central government – which makes up 72% of our budget – is continuing to fall in real terms. With increased costs and additional national policy obligations, we face an increasingly challenging financial climate in Scotland’s fastest growing council area.

“People will rightly ask why we face such challenges when they are paying more council tax. Council tax provides around a quarter of the council’s budget. A Band D household pay around £1,200 annually. Yet we need to spend more than £6,000 for every child attending secondary school and almost £24,000 for one person in a care home.

“While additional council tax income contributes towards expenditure on such essential services, it falls a long way short of what we need to maintain current budget levels.

“Despite the very real challenges we face, the council has a strong track record of building on improvements to services while challenging ourselves to be increasingly efficient and innovative. We will maintain our focus on continuous improvement and delivering our priorities, including investment in new and improved council housing, schools, community facilities and local infrastructure – helping to build the more prosperous, safe and sustainable East Lothian we all want to see.”

The Scottish Government’s settlement – which provides the majority of funding for councils – is expected to be finalised later this month.

There will now be an opportunity for Political Groups to submit amendments to the budget proposals before the council’s full meeting on 12 February.