South Lanarkshire Council expect coronavirus to impact council spending “for some time to come”.
The comments come after a report by the accounts commission into local government finance which outlined large rises in costs and spending, combined with falling income as a result of the pandemic.
Executive director for finance Paul Manning said councillors were regularly “updated on estimates of the total cost to the council of COVID-19” and that they continued to plan for the long-term impacts.
This week, the Accounts Commission revealed that local authorities in Scotland saw a combined increase in funding of £500m last year and that 22 of the 32 councils, including South Lanarkshire, were able to increase their reserves in 2019/20.
However, much of that funding is ring-fenced such as the £200 million made available for expanding early learning and childcare.
Over the last seven years, councils have seen greater reductions in funding than other areas of the Scottish Government budget and South Lanarkshire have had to cut £151 million from their budget in the last decade.
Concerns were also raised by the commission about the financial stability and leadership of Integration Joint Boards (IJBs), the bodies set-up to manage local health and social care services.
Most IJBs couldn’t deliver services within their budgets and needed extra money from health boards and councils.
Elma Murray, interim chairwoman of the commission, said: “Even before COVID-19 the pressures and demands on council services had intensified.
“At the same time, reductions in local government funding over the past seven years have been greater than in other areas of the Scottish Government budget.
“COVID-19 has fundamentally affected local government services, increasing their reliance on working with their partners and communities.
“The financial impact of the pandemic on our public services is extreme and creates increased uncertainty of how those services will be provided in the future.
“Good governance, strong financial management and transparency of decision making will be critical in dealing with the impact and consequences of the pandemic.”
Outlining the situation in South Lanarkshire, Mr Manning said the council were in a good place to deal with future challenges.
He said: “Audit Scotland found the council was well placed to address the financial challenges faced by the sector, noting SLC demonstrated ‘sound financial management’ and financial planning.
“The council has had to find £151m in efficiencies in the last decade and is currently finalising its budget for 2021/22.
“As part of that process we are consulting on a number of savings options which have been presented to elected members to consider as we seek to close a budget gap which is currently estimated at £11.8m, though options submitted to the executive committee on 13 February could reduce that to under £5m.
“As part of our financial planning we are anticipating that the impact of COVID-19 will continue for some time to come.”
