Falkirk Council still facing 'challenging' financial position despite savings made

Members of Falkirk Council’s executive heard on Tuesday that there had been some improvement in the council’s financial position over the past year as departments had made more savings than expected.

A range of factors contributed, including lower borrowing costs than expected, lower energy costs than had been feared and savings made through the teachers’ strike and a recruitment freeze across the council.

The savings made, however, will not impact on the future gap between income and spending, which is still predicted to be more than £60 million over five years.

But they do mean that the use of reserves being used to balance the books has reduced from £15.9 million in November 2023 to £14.7 million.

The council has a financial cushion in the form of service concessions – which come from changes to how PFI school payments are being made.

But members have been repeatedly warned that continuing to use them to balance the books is unsustainable.

While the financial year has not yet ended, it is anticipated that £11.3 million of service concessions and £3.4 million of Covid reserves will have been used.

But members were told that the council remains in an “exceptionally challenging” financial position as unknowns for the year ahead include any future pay agreements.

The report was presented as the council begins the process of setting its budget for 2024/25.

Councillors were also reminded that money-saving decisions that were expected to be part of last year’s budget were not approved in the end.

Councillors did not back the proposal to shut four high school swimming pools and they refused to approve plans to change entitlement to home-to-school transport.

The leader of the council, Councillor Cecil Meiklejohn, said that while there were positives in the report, “it still clearly indicates the challenges before us”.

She said there remained areas of “high risk”, including future pay awards and stressed that best use must be made of any service concessions.

“There are also concerns around the unachieved savings and the implications for the coming budget and that will need to be addressed,” she said.

Independent councillor Laura Murtagh said she was keen that there should not be a repeat of last year when significant financial decisions had not made before the budget was agreed.

She said: “Had it not been for savings made in other areas, that would have come out of service concessions.

“I think it’s really important that we reflect on that as we go forward.”

Chief executive Kenneth Lawrie said it was a “legitimate way of putting forward savings, although we wouldn’t wish to rely on it overly”.

He also noted Ms Murtagh’s concerns that Equality and Poverty Impact Assessments (EPIA) had not been provided to elected members before groups met to make decisions.

Ms Murtagh, who is the council’s equalities champion, was very critical of the lack of EPIAs, which tell members how vulnerable groups might be impacted by decisions, last year.

She said: “Even when they were provided with 36 hours to go, they were not accurately done and they were not appropriate to that budget-setting process.

“I think it’s really important that isn’t forgotten.”