Annual audit shows funding gap looms large at Falkirk Council

A budget gap of £24.6 million will leave the council facing difficult decisions in March when it comes to set its annual budget.

By Kirsty Paterson, LDR
Tuesday, 11th January 2022, 3:44 pm
Stock photo by John Devlin.
Stock photo by John Devlin.

The figures are part of Falkirk Council’s annual audit report which will go online later this month, once the annual accounts are approved.

Some of the gap – around £7m – will be bridged through ‘spend to save’ projects, where investment in more modern ways of working is intended to save cash while also becoming more efficient. The council is also hoping that Falkirk Integration Joint Board – which is responsible for health and social care across the district – will find savings of £1.4m.

The massive impact of Covid on council finances means that it is allowed to use ‘fiscal flexibilities’, which give it more options when deciding how it spends and borrows money. This means it can use grant funding of £5.3m in 2022/23 – and another £1m could come from the reserves.

Nevertheless, the audit report warns: “The council faces increasingly challenging savings decisions in March 2022 to allow it to fulfill its statutory requirement to set a balanced budget.”

This year, the auditors flagged up changes that were needed to the value of the council’s school estate, which they said had risen by £34m.

This was similar to an adjustment made last year for council houses, which had risen in value by £85m.

The council’s finance chief, Bryan Smail told members that there had to be a balance between properly valuing the council’s estate – which is of little practical use – and the high cost of getting accurate valuations.

Concerns were raised about the long-term overspend in Children’s Services, where the council’s plans to stop using expensive residential care for looked-after children has been severely hampered by the pandemic.

The audit praised the fact that the council had introduced live streaming of meetings and said that the library of webcasts is “improving openness and transparency ”. The audit also welcomed better public performance reporting through a new website, Falkirk Performs, but it also recognised that more work still needs to be done for the council to fully meet its reporting requirements.