Falkirk Council’s cash in bank will take a hit

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Balancing the books has never been tougher for Falkirk Council – and there is no sign of improvement on the horizon.

Councillors will meet next Wednesday to approve the local authority’s budget for 2013/14.

They will be told that despite a 0.62 per cent increase in grant from the Scottish Government, this has been immediately cancelled out by the increase in inflation, particularly the spiralling cost of fuel.

The 32 elected members will hear there is a £10.7 million gap in the money the council has available to spend and the cash needed to foot the bill for the services it provides.

Looking ahead, finance chiefs are predicting there will be a £35 million total shortfall in the three subsequent years.

Faced with finding a solution to the cash crisis has forced the Labour-led administration into making some tough decisions, admitted council leader Councillor Craig Martin.

However, he vowed to continue the promise to protect frontline services.

He said: “It is becoming very difficult and people will have to understand that we might not be able to continue to do so in the future. But what we have done is look at what is best for our communities.”

Since 2007, local authorities have had to agree to freeze council tax in return for a full grant settlement from the Scottish Government.

As well as instructing service heads to trim their costs, the local authority has also been forced to dip into its reserves to balance the books. Councillors have already agreed to take £2 million to fund its Spend to Save initiative, while £500,000 was ploughed into paying for bus services after the operator announced it was axing routes.

However, Mr Martin warned continuing to do so was “fraught with difficulties” and they would be looking at this again in the spring.

Now they want to take a further £2.3 million from the reserves.

Referring to previous criticism for having too much ‘rainy day’ cash, Mr Martin said: “This reflects the prudent way we have managed the council’s finances and we never lose sight of the fact it is taxpayer’s money which we must treat with respect.”

Bryan Smail, head of treasury and investment, said: “Finding over £10.7 million has been a significant challenge, particularly when it is on this scale every year. In the last four years, we’ve had to make savings of almost £40 million.

“It is relentless, but notwith-standing these challenges, we’ve still managed to be innovative and creative. This comes from a starting point of the second lowest council tax in mainland Scotland and third lowest rents.”

However, it isn’t all gloom with the council vowing to continue investing in the area.

The regeneration of Denny town centre, the Helix project, and its Tax Incremental Finance scheme, are all examples of spending cash to bring improvements, he said.

Mr Martin added: “These are all transformational initiatives and we have several of them, while other councils would be happy if they had only one.

“But that’s the Falkirk way: we won’t sit back but instead want to see things happen and the priority is to bring jobs in at this difficult time.”