South Lanarkshire Council won’t need to make any budget cuts next year after receiving a larger grant from the Scottish Government.
Cross-party budget talks have been taking place over the past month in order to bridge an estimated budget gap of £11.768 million.
However, executive director for finance Paul Manning (pictured inset) told the council’s executive committee on Wednesday, February 10, that there was “capacity for investment” after an increased grant settlement was announced.
At the start of the budget process, South Lanarkshire Council had assumed the grant settlement for 2021-22 would be cut by one per cent.
However, last month finance secretary Kate Forbes announced funding for local government would be increased next year, resulting in a 2.5 per cent increase for South Lanarkshire Council.
As a result, councillors will now have an extra £7.6 million over and above current commitments to invest in the region when they decide next year’s budget on Wednesday, February 24.
The grant settlement includes specific funding tied to a council tax freeze so it is expected councillors will agree to keep the tax at its current rate.
However, Mr Manning warned that although there was “capacity for investment”, some of that may need to be used to cover a potential pay award following the Scottish Government’s plans to increase pay for public sector workers.
Mr Manning said: “One of the things that was announced at the same time as the settlement was the Scottish Government’s public sector pay policy.
“That doesn’t directly impact on local government but, in my opinion, what is being put on the table by the cabinet secretary may well influence what happens within local government negotiations.”
It is expected that around £3 million could be needed to properly fund a similar pay award in South Lanarkshire.
The government’s plans would see all public sector workers earning less than £25,000 receive a three per cent pay increase with a one per cent increase for everyone else capped at £800.
Mr Manning added: “The settlement includes funding for those councils who agreed to freeze their council tax.
“That is a pretty fundamental point in this year’s settlement.
“In comparison to the revenue budget strategy that we had, the position has improved.”
On February 25, the budget bill will be
presented to the Scottish Parliament for debate and it is anticipated that it will be approved by March 10.
As a result, there is the possibility that the grant settlement outlined by the finance secretary could increase after South Lanarkshire Council has set its budget but Mr Manning said that would be unlikely.
