Council sees debt rise by more than £37m

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Financial pressure will continue to mount on public services across East Renfrewshire.

That was the view of Audit Scotland as they warned of increasing demand for services amid falling budgets in the years to come.

The council’s audit was signed-off unqualified, meaning that the auditors were happy all the important facts were contained within the report.

But the local authority’s debt rose from £140.2m to £177.3million – an increase of more than £37m.

Council chiefs were praised for delivering services within budget but an underspend of £7.3m from the general fund was highlighted.

In his report, auditor David McConnell said: “The council has identified a savings requirement of £28.581 million for the three-year period 2018/19 to 2020/21.

“The council is facing several challenges in maintaining a sustainable financial position in future. These include rising demands for services, increasing cost of services and reductions in local government funding.

“Looking at the council’s financial projections for 2019/20 and 2020/21, it is forecasting the need for savings of £12.127million and £10.057million respectively.

“The council plans to deliver these savings mostly by council tax increases, planned transfers from reserves and efficiency programmes.”

Mr McConnell also highlighted the council’s debt and reviewed the plans in place to cope with the removal of the public sector pay cap in November.

He added: “The council’s 2018/19 budget contains full provision for pay increases in line with the Scottish Government public sector pay statement.

“The pay claims made by employee representations present a challenge to the council’s financial resources and the council continue to work with COSLA to agree a pay settlement and to establish the impact on the council’s budget.

“The council’s outstanding loans at March 31, 2018, were £177.357 million – an increase of £37.074 million from 2017/18. The main reason for this increase is the liability for the new Barrhead High School that opened in August 2017.

“The council continues to have one of the lowest levels of debt across other local authorities.”

Conservative councillor Jim Swift raised concerns about the figures presented in the audit.

He said: “We can borrow money but we have to have the revenue to pay for it and that’s my concern.

“We’ve not got to the point yet of even identifying what we’ve got to cut to meet our budget going forward.

“In terms of ending the public sector pay cap, our biggest cost is our staff. People want to be paid more but we have to be able to pay them.

“If we’re increasing our commitments to spend on things we don’t have funding for and we’re looking to reduce our reserves, which is our buffer, we’re putting ourselves and our residents at risk.”

But East Renfrewshire’s Provost, Jim Fletcher, was more enthusiastic about the report.

He said: “There are councils throughout the UK who don’t have unqualified reports so the fact we’ve always had them is tremendously good news for the authority.

“The council historically has been very well run. That’s the reality of it. Where there have been weaknesses we’ve taken steps to address it.”