Revenue Budget Overview 2026-27 to 2030-31
Argyll and Bute Council · 19 February 2026
Back to Budget Pack — 19 February 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 25 FEBRUARY 2026 REVENUE BUDGET OVERVIEW 2026-27 to 2030-31 1. EXECUTIVE SUMMARY 1.1 This report summarises the position with regard to the key issues surrounding the revenue budget estimates and setting of council tax for 2026-27. It also provides budget estimates for 2027-28 to 2030-31; within the report the mid-range estimates are noted, with the best case and worse case estimates included in Appendix 1. 1.2 The Local Government Finance Circular 01/2026 was published on 13 January 2026 and provides detail of the provisional total revenue and capital funding allocations for 2026-27. The Council’s provisional General Revenue Grant is £271.004m in addition to Revenue Specific Grant of £2.932m. 1.3 Following the publication of Finance Circular 01/2026 there has been some changes to distributions in addition to previously non-distributed funding now having an agreed distribution methodology. These changes will not be confirmed until the Finance Order is approved at the end of February 2026, but I have reflected what I consider to be a reasonable estimate of the changes that are expected. In addition, there are two elements of funding still to have distribution agreed; Scottish Disability Assistance, our share is assumed to be £0.035m as per previous year and Personal Nursing Care, our share is assumed to be £0.153m based on assumed GAE allocation. This increases the General Revenue Grant for 2026-27 to £273.050m. The specific grants have changed to £2.946m. 1.4 Other funding to be accounted for is: A further reduction to the Level Playing Field Support from 2027-28 which is not part of the floor mechanism Funding in respect of Packaging Extended Producer Responsibility (pEPR). Funding for 2026-27 has been advised and there is a carry forward from previous years of unallocated pEPR funding. A prudent assumption in the mid-range scenario has been reflected from 2027- 28 onwards. 1.5 The Council Tax budget for 2025-26 was set at £70.204m. Growth has reverted back to 0.5% in 2026-27 after a temporary increase to 0.75% in 2025-26 to rebase the position following a review undertaken by the Assessor at Dunbartonshire and Argyll and Bute Valuation Joint Board which increased the budget by £0.300m. Future years growth has been assumed as 0.25% in the worst case scenario, 0.5% in the mid-range scenario and 0.75% in the best case scenario. The 0.5% growth in 2026-27 amounts to an estimated increase of £0.353m.
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1.6 The budget for 2025-26 has been rolled forward into 2026-27 and the main changes to the 2026-27 base budget are summarised below: Funding for ferries now recurring within the General Revenue Grant as opposed to a Specific Grant £2.810m. Increase to the Loans Fund debt charges of £0.095m. Removal of one-off Policy savings in 2025-26 of £0.020m. Settlement Commitments (Council Services) of £0.310m. 1.7 The employee cost changes amount to £16.833m. This relates to estimated pay inflation, increments, employee base changes, increase to standby rates and the re-instatement of employer’s superannuation rate. 1.8 Only unavoidable/inescapable inflation has been included within 2026- 27 and this amounts to £2.489m. This includes utilities, residential schools, contract inflation and insurances. 1.9 There are a number of cost and demand pressures for 2026-27, amounting to £4.496m summarised as follows: ASN Support - £0.208m School Clothing Grants - £0.056m Residential Schools - £0.600m Waste Uplifts provided externally - £0.060m IT Licences for Education - £0.140m Freedom of Information (FOI) Requests - £0.198m Planning (Local Development Plan) - £0.050m Housing Benefits Administration Grant - £0.040m Payroll and Pensions Team Resource - £0.155m Microsoft 365 Licences - £0.030m Compliance with BMW Ban - £1.568m Bus Transport Contracts - £0.400m Minimum Income Standards (MIS) Research - £0.030m Valuation Joint Board - £0.255m Security Operations Centre - Quorum Cyber Contract Renewal - £0.043m Wi-Fi Network Subscription License Costs - £0.015m Civica Housing Case Management System - £0.032m Right sizing of budgets within Customer Support Services - £0.057m. Management of Council Dams - £0.095m Harbours Repairs and Maintenance - £0.260m Resurfacing of Taxiways at Oban Airport - £0.100m Flexible Food and Fuel Fund - £0.104m 1.10 The revised payment to the Health and Social Care Partnership, reflects 2025-26 in year adjustments and the net changes to the settlement in respect of Social Work that we have been directed to pass over to the
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Health and Social Care Partnership. Health and Social Care Partnerships in Scotland continue to face significant financial pressures. Rising demand for services, workforce shortages and the increasing complexity of care are pushing costs upward at a pace that exceeds available funding. At the same time, inflationary pressures and the need to maintain safe staffing levels are stretching already constrained budgets. Our HSCP is no different to those across Scotland and will require to make difficult decisions about service prioritisations, transformation and efficiency savings to ensure long-term sustainability. The most recent budget outlook for 2026-27 for Social Work forecasts a £6.6m gap between the expected cost of delivering the current level of service and the resources available to support Social Work and Social Care services. Savings and Reserves of £3.714m have been identified leaving a budget gap of £2.872m which Members may wish to consider funding. 1.11 The budget gap prior to any measures to balance the budget is a deficit of £13.383m in 2026-27. 1.12 There are a number of measures to balance the budget that have been agreed at previous Council budget meetings which have a net effect of reducing the 2026-27 budget gap by £1.107m. 1.13 There are a number of other measures to balance the budget as follows: General inflationary increase of 6% to fees and charges resulting in £0.440m of additional income. New management/operational savings amounting to £3.091m, endorsed by Council on 26 November 2025. New policy options savings amounting to £2.999m. Underspend in the 2025-26 Loans Fund of £1.500m. 1.14 The budget gap after the measures to balance the budget is a deficit of £0.703m in 2026-27. 1.15 The setting of Council Tax should happen on the same day as the Council sets its revenue budget as once all proposals are considered, Council Tax is the balancing figure. The gap outlined in paragraph 1.14 above is based on a 5% Council Tax increase (this is the assumption that has been in the budget outlook during the year). In order to get to a balanced budget, Council will need to increase Council Tax by 6%. The alternative to increasing Council Tax further is that Council would need to fund the gap using reserves or other funds held, which would be a one-off fix, however, Members need to be mindful of the significant gap in future years as well as the pressures facing the capital plan. 1.16 The budget gap over the period 2027-28 to 2030-31 across each scenario is summarised in the table below.
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Budget Gap 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Total £000 Best Case (3,384) (507) (846) (979) (5,714) Mid-Range (11,044) (5,775) (6,361) (6,731) (29,911) Worst Case (21,747) (11,783) (12,653) (13,326) (59,509) 1.17 It is proposed to establish a Programme Management Office (PMO) responsible for co-ordination and delivery of both capital and transformation projects, to address issues including: Insufficient capacity to progress transformational change and maintain business as usual. Scale and complexity of organisational change that requires a more consistent, corporate and disciplined approach to programme and project management. Ensuring the Council can deliver its strategic priorities, respond effectively to external audit scrutiny and build the foundations for sustainable multi-year transformation. Addressing recent external audit findings (see below) and best practice evidence identified by the Accounts Commission. 1.18 Two options have been presented for consideration by Council and it is estimated that either option will require a drawdown of up to £0.600m over a two-year period, to be funded from the Strathclyde Pension Fund gain monies that were set aside to support transformation and spend-to- save initiatives by Council at the February 2024 budget meeting. 1.19 The Council are asked to consider funding requests summarised within Appendix 6. Members are asked to give consideration to these requests and how they would be funded.
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ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 25 FEBRUARY 2026 REVENUE BUDGET OVERVIEW 2026-27 to 2030-31 2. INTRODUCTION 2.1 This report summarises the position with regard to the key issues surrounding the revenue budget estimates and setting of council tax for 2026-27. It also provides budget estimates for 2027-28 to 2030-31; within the report the mid-range estimates are noted, with the best case and worse case estimates included in Appendix 1. 2.2 Regular reports on the budget outlook 2026-27 to 2030-31 have been presented to Members throughout the year. Reports were presented to the Policy and Resources Committee on 8 May 2025, 21 August 2025, 9 October 2025 and 4 December 2025. 3. DETAIL 3.1 Funding Finance Settlement 3.1.1 The Scottish Budget was announced by the Cabinet Secretary for Finance and Local Government on 13 January 2026 and on the same day Scottish Government Local Government Finance Circular 1/2026 was published. The Scottish Budget included multi-year spending plans, however, the Circular only gives details of the provisional Local Government settlement (revenue and capital) at Council level for 2026- 27 only. It is expected that information at Council level for 2027-28 and 2028-29 will be available around the Spring. The provisional total funding allocations form the basis for the annual consultation between the Scottish Government and COSLA ahead of the Local Government Finance (Scotland) Order 2026 presented to the Scottish Parliament, currently scheduled for the end of February 2026. 3.1.2 The circular outlines that the Scottish Government will work in partnership with local government to implement the budget and the joint priorities in return for the full funding package worth almost £15.7 billion and includes: A further £773.8m of funding that has now been baselined as General Revenue Grant, as part of the Scottish Government’s commitment under the Verity House Agreement to review ring- fenced funding. Additional General Revenue Grant of £253.9m to support local priorities. An additional £3m to support Free School Meals.
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£160m for adult social care workers in commissioned services. An additional £11m to improve pay for early learning and childcare workers in commissioned services. £11m to support development of people working in children’s social work. £7m to support provision of Free Personal and Nursing care. £20m to tackle the climate emergency. £40m to improve active travel infrastructure. An additional £11.4m resource and £15.5m capital to improve inter- island connectivity. Scottish Government Funding for Argyll and Bute Council 3.1.3 The General Revenue Grant (GRG) for 2025-26 noted within the February 2025 budget pack was £259.134m. The General Revenue Grant for 2026-27 is £271.004m as outlined within Finance Circular 01/2026. There is also £2.932m of specific grants. 3.1.4 Following the publication of Finance Circular 01/2026 there has been some changes to distributions in addition to previously non-distributed funding now having an agreed distribution methodology. These changes will not be confirmed until the Finance Order is approved at the end of February 2026, but I have reflected what I consider to be a reasonable estimate of the changes that are expected. In addition, there are two elements of funding still to have distribution agreed; Scottish Disability Assistance, our share is assumed to be £0.035m as per previous year and Personal Nursing Care, our share is assumed to be £0.153m based on assumed GAE allocation. This increases the General Revenue Grant for 2026-27 to £273.050m. The specific grants have changed to £2.946m. 3.1.5 The table below represents the changes in General Revenue Grant between 2025-26 and 2026-27: £000 £000 Funding Budget 2026-27 as per budget pack 259,134 SG Policy Commitments – Health and Social Care: Children’s Social Care Pay Uplift 2025-26 164 LG Pay 2025-26 361 Employer’s National Insurance 515 SRA Kindship Care* 26 Holiday Activities for Disabled Children* 14 1,080 SG Policy Commitments – Council: School Milk* 15 Inter Island Connectivity (switch from specific grant to GRG) 2,810 No one left behind* 63
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Prisoner Early Release* 9 Nature Restoration Fund* 84 Employer’s National Insurance 2,057 Island Cost of Living* 145 Ukraine and Others, resettlement* 92 Single Use Vapes* 4 Adopt and Adapt Funding* 69 DHP Housing Emergency* 12 DHP Top Up* 13 RRTP Top Up* 20 LA Pay 1,061 Teacher Induction* 23 Scottish Welfare Fund* 71 Invest to Save* 300 Teachers Pay 459 7,307 Rounding (4) Updated Funding 2025-26 (FC 1/2026) 267,517 Updating of Indicators (7,962) Change to the floor 5,719 Changes Row 4,728 One-off funding Removed* (960) Indicators Still to be distributed (35) SG Policy Commitments – Health and Social Care 3,128 SG Policy Commitments – Council 446 Teachers Pay – Full year effect 2026-27 281 Estimated Settlement 2026-27 272,862 Undistributed Funding for Scottish Disability Assistance (assume same as last year) 35 Undistributed Funding for Free Personal and Nursing Care (assume based on GAE distribution) 153 Total Estimated Settlement 2026-27 273,050 *One-off funding 3.1.6 If you compare the estimated settlement of £273.050m to the finalised cash funding in 2025-26 the funding has increased by £5.533m – in cash terms. However, this is not a like-for-like comparison as there is some funding in 2025-26 that was one-off, funding in 2026-27 which is a full year effect of a decision in 2025-26 and funding in 2026-27 that is new. The like-for-like cash terms comparison is an increase of £6.059m or 2.3% £000 £000 2025-26 Settlement 267,517 One-off funding removed (960) 2025-26 Settlement for comparison 266,557 2026-27 Settlement 273,050
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Less Teachers Pay Full Year Effect (281) Less Free Personal and Nursing Care Increase (153) 2026-27 Settlement for comparison 272,616 Increase 6,059 Increase % 2.3% 3.1.7 Although there has been a cash increase, an element of the increase is due to additional funding to support Scottish Government Policy. Adjusting for these amounts (£3.128m & £0.446m) the increase reduces to £2.485m or 0.9% for core services. 3.1.8 In considering the assumption related to future years funding, the Scottish Spending Review published alongside the Scottish Budget suggests limited real-terms growth, effectively a very tight or flat cash outlook for the Finance and Local Government portfolio. It is expected that detailed estimates at Local Authority level will be available in the Spring and at which point I will further review the our assumptions. Meantime, and as a result of Argyll and Bute Council receiving benefit from the floor mechanism, I recommend that we assume a 0.5% reduction in Scottish Government funding in the mid-range scenario which reflects flat cash and the floor being set at 0.5% below the Scottish average. The best and worst case scenarios would be varied by 0.50% resulting in range of between 1% reduction (worst case) and flat cash (best case). Level Playing Field Support 3.1.9 Level Playing Field support for PPP projects was introduced many years ago to ensure that a local authority’s choice between using a PPP model and conventional public procurement was not distorted simply by the difference in how loan costs are supported by the Scottish Government. Argyll and Bute Council receive Level Playing Field Support from the Scottish Government for the Waste PPP Contract that comes to an end during 2026. The Level Playing Field Support reduced in 2026-27 (part year) and there will be a further reduction of £0.430m in 2027-28 that is outwith the floor mechanism. The estimated Revenue Support Grant has been adjusted to account for this reduction in 2027-28 and beyond. Extended Producer Responsibility (EPR) – Funding from DEFRA 3.1.10 As part of the 2025-26 budget process, £2.499m of the estimated 2025- 26 funding available in respect of Packaging Extended Producer Responsibility (pEPR) from the Department of Environment, Food and Rural Affairs (DEFRA) was carried forward into 2026-27. As previously reported, the funding allocation for 2025-26 has been confirmed at £2.786m, £1.061m less than the original estimate provided by DEFRA of £3.847m, reducing the carry forward into 2026-27 to £1.438m. The funding for 2026-27 has been confirmed at £2.851m. It remains uncertain as to whether this funding will be recurring at this level in 2027-28 and future years, and without a reduction in Scottish
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Government grant. At this stage, funding is assumed to continue into 2027-28 and future years at the 2026-27 level in the best case, at 50% of the 2026-27 level in the mid-range and £nil in the worst case scenarios. Funding conditions and future years budget pressures, in respect of potential new spending commitment remain unclear. Council Tax 3.1.11 The Council Tax base for 2025-26 was set at £70.204m which reflected a 9.9% inflationary increase as agreed by the Council on 27 February 2025. This is the starting position for 2026-27. 3.1.12 The 2024-25 final outturn included additional income of £1.234m in respect of 2024-25 and prior years, an element of which was expected to be recurring in 2025-26 and future years. A significant element of this additional income (some £0.5m) related to the reclassification of self- catering units as domestic dwellings by the Assessor, following completion of both the 2022-23 and 2023-24 canvasses during the year, which saw the transfer of properties from the Non-domestic Rates to Council Tax registers. There is a significant level of uncertainty in respect of the regulatory environment in this respect, with a risk of appeals being granted and properties returning to Non-domestic Rates. This uncertainty in respect of both timing and financial value, presents a risk to financial planning assumptions. At this stage, a re-base of the current Council Tax budget, estimated at £0.150m in the worst case, £0.300m in the mid-range and £0.450m in the best case scenarios, has been assumed within the Budget Outlook. 3.1.13 In terms of Council tax growth, throughout the year a growth of 0.5% has been assumed within the mid-range scenario (0.25% in worst case and 0.75% in best case). The 0.5% growth in 2026-27 amounts to an estimated increase of £0.353m. The growth in future years remains the same as 2026-27 in all scenarios. 3.1.14 The estimated Council Tax income over the next five years (excluding future years Council Tax increases, which are dealt with later in the report) is noted in the table below. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Council Tax Base 70,204 70,204 70,204 70,204 70,204 Council Tax Re-Base 2025-26 300 300 300 300 300 Council Tax Growth 353 707 1,063 1,421 1,781
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Total Council Tax Income 70,857 71,211 71,567 71,925 72,285 General Fund 3.1.15 An earmarked reserve of £1.3m was previously set aside for employee pay increases beyond budget. £0.039m of this was drawn down in 2025- 26 leaving £1.261m available in 2026-27 to be used to offset pay award costs. 3.1.16 As reported in the budget pack in February 2024, reduced employer contribution rates payable to Strathclyde Pension Fund will result in one-off savings in 2024-25 and 2025-26. It was agreed that £2m of the pension fund gain would be released each year for a period of 3 years (2024-25 through to 2026-27) in order to help bridge the budget gap. Total Funding 3.1.17 The table below summarises the total estimated funding over the next five years within the mid-range scenario. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Estimated Scottish Government Funding 273,050 271,686 270,328 268,976 267,631 Reduction to Level Playing Field Support Funding 0 (430) (430) (430) (430) Extended Producer Responsibility (EPR) Indicative Funding 2,851 1,426 1,426 1,426 1,426 Previously Earmarked EPR funding for future pressures 1,438 0 0 0 0 Council Tax income 70,857 71,211 71,567 71,925 72,285 Previously Earmarked 1,261 0 0 0 0
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Reserve for Pay Awards Released Strathclyde Pension Fund Gain 2,000 0 0 0 0 Total Funding 351,457 343,893 342,891 341,897 340,912 3.2 Base Budget 3.2.1 As with previous years the base budget for 2026-27 is the current years approved budget adjusted for any: one-off items included within 2025-26 that are not carried forward into 2026-27; previously agreed items for future years; and other adjustments since the 2025-26 budget was agreed. 3.2.2 The SJC and Chief Officers pay awards of 4% for 2025-26 and 3.5% in 2026-27 have been accounted for. The Teachers have agreed a revised pay offer of 4% from 1 August 2025, rising to 4.25% from 1 April 2026 with a further 3.25% from 1 August 2026 to 31 July 2027. 3.2.3 Although the majority of the funding from the Scottish Government is not strictly ring-fenced, there are elements of the funding that are directed to deliver on Scottish Government policy. The base budget needs to be adjusted to reflect the additional costs for delivering on these directions and the budget increase is limited to the funding provided. The adjustments for the Council are listed in the table below and it should be noted that any relating to the HSCP are detailed at section 3.6 of the report. Increase / (Decrease) £000 Real Living Wage for Commissioned Providers – Early Learning and Childcare 158 School Clothing Grant Inflation 4 Ferries (this increase has been limited to £27k rather than £163k as the remainder is already included in pay and other inflation lines) 27 Scottish Assessors Association 22 Increase to DHP 99 Total Settlement Commitments 310 3.2.4 The revised base budget is noted in the table below.
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Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Base Budget 2025- 26 328,289 328,289 328,289 328,289 328,289 Community Sports Saving in 2025-26 – funded from reserves for 1 year only (20) (20) (20) (20) (20) Increase to Loans Fund debt charges 95 95 95 95 95 Funding for ferries now included within General Revenue Grant. 2,810 2,810 2,810 2,810 2,810 Settlement Commitments 310 310 310 310 310 Revised Base Budget 331,484 331,484 331,484 331,484 331,484 3.3 Employee Costs Pay Inflation Estimates 3.3.1 The Public Sector Pay Policy, published alongside the Scottish Budget, set out a multi-year framework of a 9% pay envelope covering 2025-26, 2026-27 and 2027-28. This underpinned our original planning assumption of 3% across each of these years. However, following agreement of the SJC and Chief Officers pay award for 2025-26 and 2026-27 at 4% and 3.5% respectively, these assumptions were subsequently updated. The increase of 3.5% for 2026-27 has been applied across all scenarios, 3% for 2027-28 in both the best case and mid-range scenarios, with 5% in the worst case scenario has been assumed. For 2028-29 to 2030-31, the best case scenario has been reduced to 2%, while the mid-range remains at 3% and worst case remains at 5%. 3.3.2 The teachers agreed a revised pay offer of 4% from 1 August 2025, rising to 4.25% from 1 April 2026 with a further 3.25% from 1 August 2026 to 31 July 2027. This increase has been included within the budget outlook. 3.3.3 On 8 January 2026 a Scottish Statutory Instrument (SSI) was laid before parliament regarding increasing councillors pay by 3.3% with effect from 1 April 2026. The financial impact of this is an increase of £0.036m which has been accounted for within the overall pay award figures. Note that the lead committee has 40 days to consider the SSI before it will formally pass.
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Detailed Employee Costing Exercise 3.3.4 Financial Services have populated salary templates with details of the current establishment and where necessary liaised with budget holders to confirm their staff. The templates calculate the next years pay bill including superannuation and national insurance contributions. The cost of the employees from the template is compared to the previous year and reasons for differences explained. 3.3.5 In terms of the level of employee budgets for 2026-27, the expectation would be that the budget would reflect the 2025-26 budget plus any increase due to incremental progression, pay inflation and any other unavoidable employee cost increases less previously approved employee budget savings. Increments 3.3.6 The cost of employee increments has been updated following the salary template exercise. The employee increments for 2026-27 equate to £0.599m. For future years it has been assumed that the best case will be half the previous year cost with mid-range and worst case, equal to the cost in 2026-27. Chief Officers Pay 3.3.7 In 2021 COSLA and the Association of Local Authority Chief Executive’s (ALACE) jointly commissioned an independent review of Scottish Local Authorities Chief Executive’s pay. Prior to this review, Chief Executive’s pay had not been fully reviewed since 2001. COSLA Leaders considered the findings of the review and recommended a new agreed pay framework which had consequential impacts on other Chief Officers pay. The additional cost within 2026-27 relating to Council employees is £0.129m. Standby Rates 3.3.8 An increase to the current Standby Rate of pay from December 2025 was approved by Council 26 November 2025. The full year recurring impact at an estimated additional cost of £38k from 2026-27 has been incorporated into the budget outlook across all budget scenarios. Strathclyde Pension Fund (SPF) 3.3.9 As detailed in the budget pack presented to Council in February 2024, the employer contribution rate paid to the Strathclyde Pension Fund decreased from 19.3% to 6.5% in both 2024-25 and 2025-26 and thereafter will rise to a sustainable long-term rate of 17.5% from 2026- 27. The reduction in the first 2 years equates to reduced costs of £6.875m per annum relating to Council employees (excluding HSCP). From 2026-27 the costs will rise again to 17.5% therefore this increase is required to be built into projections from 2026-27 onwards.
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3.3.10 The employer contribution rates to the Strathclyde Pension Fund (SPF) are based on an actuarial triennial valuation. As noted in the previous paragraph, the last valuation, which took place during 2023 recommended a 3 year package of rates at 6.5% for 2024-25, 6.5% for 2025-26 and 17.5% for 2026-27 (previously that rate was 19.3%) and this was adopted. The reduction in rates was a response to the Strathclyde Pension Fund being valued at 147% funded at the last actuarial valuation. This meant that the fund’s assets were 1.47 times the amount needed to meet the liabilities it had at that date. The most recent publicly available estimate of the Strathclyde Pension Fund shows that the Fund’s position has continued to improve since the 31 March 2023 valuation. As of 31 March 2025, an indicative funding level was reported at around 174% and I understand that the position has improved further to 187% in July 2025. The next formal actuarial valuation will be carried out as at 31 March 2026 and reported in 2027, which will reset contribution requirements for the subsequent 3-year period. It is anticipated that there should be a further recurring reduction in the rate, based on the current surplus position, however, this is not certain and will depend on the valuation as at 31 March 2026. The equivalent annualised rate from the previous reduction would have been 10.2%. In order to signpost that there is a likelihood of a reduction to the rate, I am suggesting that we assume no change in the worst case scenario, a reduction to 15% in the mid-range scenario (£2.799m) and a reduction to 13% in the best case scenario (£5.039m). These estimates will be updated throughout the year as more information becomes available. 3.3.11 The changes to the employee budgets estimated over the next five years for Council services are summarised in the table below. The employee cost increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 3.6.7. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Pay Award 2026- 27 9,283 14,195 19,254 24,465 29,832 Change to employee base for 2026-27 (91) (91) (91) (91) (91) Increase to Chief Officers Pay 129 132 136 141 145 Increase to Standby Rate 38 38 38 38 38 Increments 599 1,198 1,797 2,396 2,995 Increase in costs after one-off reduction in SPF rate ceases 6,875 6,875 6,875 6,875 6,875
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Estimated future reduction to SPF rate 0 (2,799) (2,799) (2,799) (2,799) Total Employee Increases 16,833 19,548 25,210 31,025 36,995 3.4 Non-Pay Inflation 3.4.1 The position remains that only unavoidable/inescapable inflation has been included for 2026-27, this is with a view to only including a provision in the budget for an inflationary increase where it is absolutely required. 3.4.2 The table below summarises the non-pay inflation in the mid-range scenario for Council services with more detail available in Appendix 2. The non-pay inflation increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 3.6.7. Inflation Category 2026-27 Previous estimates (Feb 2025) £000 2026-27 Updated estimates £000 Increase/ (Decrease) £000 Utilities - Electricity, Gas, Oil, Water 195 253 58 Central Repairs-Outside Contractors 75 98 23 Waste/Landfill Tax 335 62 (273) NPDO/HUB Schools 382 423 41 Community Pool Subsidies 26 39 13 Residential Schools 31 44 13 Pre-Primary Partner Providers 166 272 106 ICT 238 243 5 Catering Purchases and Milk 60 73 13 Insurance 414 491 77 School & Public Transport 402 433 31 Non-Domestic Rates 10 (189) (199) Housing Support Contracts 41 72 31 Other small inflationary movements (School clothing grants, Audit fees, etc) 120 175 54 Total 2,495 2,489 (6) 3.4.3 In terms of the budget outlook for 2027-28 to 2030-31 the estimated impact of unavoidable / inescapable non-pay inflation has been calculated based on projected inflation rates at this point in time. The worst case scenario is 0.5% higher than the value included within the mid-range and the best case is 0.5% less than the mid-range scenario. An allowance for unidentified inflation has been included from 2027-28
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onwards at £0.250m per annum within the mid-range scenario and £0.500m per annum within the worst case scenario. 3.4.4 The overall additional budget requirement for non-pay inflation estimated over the next five years is summarised in the table below. Further detail is provided in Appendix 2. The estimated inflationary increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 3.6.7. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Unavoidable/ inescapable Non-Pay Inflation 2,489 5,901 9,496 13,326 17,406 3.5 Cost and Demand Pressures 3.5.1 For a number of years, services have worked on the basis of having to contain any cost and demand pressures within current resources where possible. An allowance for unidentified cost and demand pressures has been included from 2027-28 onwards at £0.250m per annum in the best case scenario, £0.500m per annum within the mid-range scenario and £1.000m per annum within the worst case scenario. 3.5.2 Since the Policy and Resources Committee on 4 December 2025 the following changes have been made to the cost and demand pressures: Amended – Schools Residential – projections have been updated and the pressure has been reduced by £0.200m NEW – Waste Uplift provided externally - £0.060m NEW – IT Licences for Education - £0.140m NEW – Freedom of Information (FOI) Requests - £0.198m Amended – Waste BMW ban updated projections reduce the cost pressure by £0.911m NEW – Minimum Income Standards (MIS) Research - £0.030m NEW – Right sizing of budgets within Customer Support Services - £0.057m NEW – Payroll and Pensions Team Resource - £0.155m NEW – Management of Council Dams - £0.095m NEW – Harbours Repairs and Maintenance - £0.260m NEW – Resurfacing Taxiways at Oban Airport - £0.100m NEW – Flexible Food and Fuel Fund - £0.104m 3.5.3 The estimated cost and demand pressures identified for Council services are noted in the table below, with further detail provided in Appendix 3. The cost and demand pressures relating to Social Work
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within the Health and Social Care Partnership are summarised within paragraph 3.6.7. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 ASN Support 208 422 422 422 422 School Clothing Grants 56 56 56 56 56 Schools Residential 600 600 600 600 600 Waste Uplift provided externally 60 60 60 60 60 IT Licences for Education 140 140 140 140 140 Education ICT Network Infrastructure 0 53 53 53 53 Election Costs 0 350 0 0 0 Freedom of Information (FOI) Requests 198 198 198 198 198 Local Development Plan 50 0 0 0 0 Universal Credit – HB Admin Grant 40 80 120 160 200 Civica Revenue and Benefits System 0 63 63 63 63 Payroll and Pensions Resource 155 77 77 77 77 Microsoft 365 Licences 30 380 380 380 380 Compliance with BMW Ban 1,568 651 914 914 914 Bus Transport Contracts 400 400 400 400 400 Minimum Income Standards (MIS) Research 30 0 0 0 0 Valuation Joint Board 255 301 301 301 301 Security Operations Centre - Quorum Cyber Contract Renewal 43 43 43 43 43 Wi-Fi Network Subscription License Costs 15 58 58 58 58 Civica Housing Case Management System 32 4 4 4 4 Right sizing of budgets within 57 58 58 59 60
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Customer Support Services Management of Council Dams 95 98 101 104 107 Harbours Repairs and Maintenance 260 270 280 290 300 Resurfacing of Taxiways at Oban Airport 100 0 0 0 0 Flexible Food and Fuel Fund 104 104 104 104 104 Allowance for pressures in future years 0 500 1,000 1,500 2,000 Total Cost and Demand Pressures 4,496 4,966 5,432 5,986 6,540 3.5.4 Included within the cost and demand pressures and inflation are amounts relating to School clothing grants of £0.056m and £0.009m respectively. The Scottish Government has shown a commitment to supporting families with school clothing grants, particularly those on qualifying benefits. Originally the amount of the grant was set at £120 for primary school children and £150 for secondary school pupils payable once per academic year. Within the 2026-27 budget settlement the Scottish Government provided £0.700m additional funding Scotland wide towards the School Clothing Grants of which Argyll and Bute Council’s share was £0.004m. This was provided as part of the Scottish Governments commitment to provide funding to allow the grants to rise in line with inflation albeit Local Authorities retained the flexibility as to whether to apply any increase as long as the minimum grant levels of £120 and £150 were paid. The additional funding included within the cost pressures and inflation, if approved by Members, would allow the grant awards to increase by 6% to £127.20 for primary school children and £159 for secondary school pupils which would reflect the fact that no inflation has been applied since implementation in 2021-22. 3.6 Health and Social Care Partnership (HSCP) 3.6.1 The Council agreed an allocation to the HSCP of £81.992m for 2025-26 at its meeting on 27 February 2025 which included an additional recurring funding contribution of £0.500m. The indicative allocation for 2026-27 onwards increased by £3.053m to account for the cessation of the one-off employer contribution rate saving relating to the Strathclyde Pension Fund resulting in an increased base allocation previously agreed for 2026-27 of £85.045m. 3.6.2 In 2023-24 funding of £0.438m was received in respect of Whole Family Wellbeing for Children’s Services Planning Partnership and was added to the HSCP payment at that time. During 2025-26 additional funding of £0.104m was received in respect of this which again is a straight pass through to the HSCP and will therefore increase their payment further
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by this amount. This funding is continuing into 2026-27 but there has been no confirmation beyond this date and therefore, this has been removed from payment from 2027-28 pending confirmation that the funding will continue. 3.6.3 Additional funding was allocated by the Scottish Government for the SJC pay award during 2025-26. As in previous years we agreed to pass over a proportionate share of this funding to the HSCP and this amounts to £0.361m in 2026-27 and increases their future payments by the same amount. 3.6.4 As part of the Local Government Finance Circular 1/2026 an additional £0.164m will be distributed in 2025-26 in relation to Children’s Social Care Fund and this requires to be passed over to the HSCP. 3.6.5 The Local Government Finance Circular 1/2026 included additional funding for 2026-27 in relation to the Real Living Wage to be passed over to the Health and Social Care Partnership for 2026-27. This comprised of £2.955m relating to Adult Care and £0.173m relating to Children’s Social Care, totalling £3.128m. 3.6.6 There are two funding amounts still to be distributed by Scottish Government. The first is the Scottish Disability Assistance funding that was received in previous year and is already included with the HSCP base payment amounting to £0.035, it is assumed that the distribution will remain the same. The other is an increase to Free Personal and Nursing Care of £7m Scotland wide. It is assumed that our share will be £0.153m based on the GAE distribution methodology for Personal and Nursing Care for Older People. Should there be any material change to these figures once distribution is known, the payment to the HSCP will be adjusted. 3.6.7 Health and Social Care Partnerships in Scotland continue to face significant financial pressures. Rising demand for services, workforce shortages and the increasing complexity of care are pushing costs upward at a pace that exceeds available funding. At the same time, inflationary pressures and the need to maintain safe staffing levels are stretching already constrained budgets. Our HSCP is no different to those across Scotland and will require to make difficult decisions about service prioritisations, transformation and efficiency savings to ensure long-term sustainability. The most recent budget outlook for 2026-27 for Social Work forecasts a £6.6m gap between the expected cost of delivering the current level of service and the resources available to support Social Work and Social Care services. Savings and Reserves of £3.714m have been identified leaving a budget gap of £2.872m which Members may wish to consider funding. 2026-27 £000 Opening Budget Deficit (2,964)
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Cost and Demand Pressures - Pay (5,209) Cost and Demand Pressures – Non-pay (5,644) Additional Funding 7,231 Budget Gap Prior to Savings (6,586) Savings Proposals 3,414 Application of SW Reserves 300 Remaining Budget Gap in 2026-27 2,872 3.6.8 The revised payment to the Health and Social Care Partnership is noted below. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Base Payment (as per Budget 2025) 85,045 85,045 85,045 85,045 85,045 Adjustment for Whole Family Wellbeing fund 104 (438) (438) (438) (438) 2025-26 Pay Award (additional 1%) 361 361 361 361 361 2025-26 Children’s Social Care 164 164 164 164 164 Settlement Changes for 2026-27 3,128 3,128 3,128 3,128 3,128 Share of £7m Free Personal and Nursing Care 153 153 153 153 153 2026-27 Budget Gap 2,872 2,872 2,872 2,872 2,872 Payment to HSCP 91,827 91,285 91,285 91,285 91,285 3.7 Live Argyll 3.7.1 At the 2025-26 budget meeting in February 2025 it was agreed to defer a policy saving option relating to Live Argyll of £0.311m to 2026-27 and the management fee base has been reduced to reflect this. There is also a change from 2026-27 onwards to increase the management fee by £0.118m to account for the cessation of the one-off employer contribution rate saving relating to the Strathclyde Pension Fund.
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Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Management Fee Base Change – saving deferred from 2025-26 to 2026-27 (311) (311) (311) (311) (311) Cessation of SPF contribution rate saving 118 118 118 118 118 Change to Management Fee (193) (193) (193) (193) (193) 3.8 Budget Gap PRIOR to Measures to Balance the Budget 3.8.1 The budget gap prior to factoring in any previous savings decisions or potential options towards balancing the budget is summarised in the table below. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Base Budget 331,484 331,484 331,484 331,484 331,484 Employee Cost Changes 16,833 19,548 25,210 31,025 36,995 Non-Pay Inflation 2,489 5,901 9,496 13,326 17,406 Cost and Demand Pressures 4,496 4,966 5,432 5,986 6,540 (Decrease)/ Increase to HSCP allocation (not already in Council base)* 9,731 9,731 9,731 9,731 9,731 Adjustment to Live Argyll Payment (prior to savings) (193) (193) (193) (193) (193) Total Net Expenditure 364,840 371,437 381,160 391,359 401,963 Total Funding 351,457 343,893 342,891 341,897 340,912
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Budget Surplus / (Gap) Cumulative (13,383) (27,544) (38,269) (49,462) (61,051) *The transfer of funding in relation to the 2025-26 adjustment for Whole Family Wellbeing Fund does not need to be included in the budget gap calculation as this budget is included within base budget. 3.9 Measures to Balance the Budget 3.9.1 Some of the policy options that were agreed at the Council meeting on 27 February 2025 impacted on 2026-27 and beyond. These are now factored into the budget outlook, reducing the budget gap. 3.9.2 There is a separate report included in the budget pack which relates to fees and charges together with the detailed schedule of charges for 2026-27. The general inflationary increase to fees and charges is proposed at 6% for 2026-27. The general inflationary increase would give additional income of £0.440m. There is no general inflationary increase applied to Piers and Harbours to ensure that any income generated is not in excess of expenditure. In terms of the outlook for 2027-28 to 2030-31, fees and charges have been estimated at a 6% increase in the mid-range scenario (3% in worst case and 9% in best case). 3.9.3 Savings options totalling £6.193m for 2026-27 were presented to Council on 26 November 2025. The options have been categorised as either: Management / Operational – meaning they do not result in either redundancies or any change in policy and can be implemented without Council approval Policy – meaning they require Council approval due to having staff or policy implications. Council agreed to endorse the Management/Operational savings totalling £3.134m and these were incorporated in the Budget Outlook report presented to the Policy and Resources Committee on 4 December 2025. The proposed policy savings are set out in Appendix 4 alongside savings templates for each saving options. 3.9.4 A summary of the savings identified are noted in the table below. The changes since the report in November are summarised below: Regulatory Services saving removed from Management/Operational savings as no longer deliverable - £0.043m HR Policy Saving reduced by £0.060m in 2026-27 as now delayed until 2027-28.
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Saving Type 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Management/ Operational 3,091 2,965 2,680 2,680 2,680 Policy 2,999 2,500 2,500 2,500 2,500 Total 6,090 5,465 5,180 5,180 5,180 3.9.5 The number of staff affected by potential redundancy required the Council to undertake a statutory 45 day consultation. This has been concluded in accordance with the Council’s redundancy policy and procedures seeking to avoid compulsory redundancy wherever possible. 3.9.6 An underspend within the Loans Fund is anticipated in 2025-26 due to a number of factors including slippage within the capital programme resulting in a delay in the need to borrow and new borrowing secured at lower interest rates than the existing debt portfolio average. £1.5m of this underspend can be earmarked to contribute towards the 2026-27 budget gap. 3.9.7 Throughout the year there was as assumption of an increase to Council Tax of 5% in the mid-range scenario across each of the next 5 years. This estimate is included within the budget gap figure in Section 3.10. 3.9.8 The table below summarises the proposed measures to balance the budget in the mid-range scenario. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Previously agreed Policy Savings 1,155 2,092 2,833 2,924 2,781 Previously agreed Management/ Operational Savings (48) (9) (9) (9) (9) Fees and Charges Increase 440 907 1,402 1,927 2,483 NEW Management/ Operational Options 3,091 2,965 2,680 2,680 2,680 NEW Policy Options 2,999 2,500 2,500 2,500 2,500 Underspend in 2025- 26 Loans Fund 1,500 0 0 0 0 Council Tax Increase 3,543 7,299 11,259 15,436 19,840 Total Measures to Balance the Budget 12,680 15,754 20,665 25,458 30,275 3.10 Budget Gap AFTER Measures to Balance the Budget 3.10.1 The table below summarises the estimated budget gap in the mid-range scenario.
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Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Budget Gap Prior to Measures to Balance Budget (13,383) (27,544) (38,269) (49,462) (61,051) Savings Measures 12,680 15,754 20,665 25,458 30,275 Estimated Budget Surplus / (Gap) Cumulative (703) (11,790) (17,604) (24,004) (30,776) Estimated Budget Surplus / (Gap) In Year (703) (11,087) (5,814) (6,400) (6,772) 3.10.2 The setting of Council Tax should happen on the same day as the Council sets its revenue budget as once all proposals are considered, Council Tax is the balancing figure. The gap shown in the table above is based on a 5% Council Tax increase (this is the assumption that has been in the budget outlook during the year). In order to get to a balanced budget, Council will need to increase Council Tax by 6%. The alternative to increasing Council Tax further is that Council would need to fund the gap using reserves or other funds held, which would be a one-off measure, however, Members need to be mindful of the significant gap in future years as well as the pressures facing the capital plan. The table below summarises the position across the years if Council tax is increased by 6% in 2026-27 reverting back to an estimated 5% in future years. Draft 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Mid- Range 2030-31 £000 Budget Surplus / (Gap) in Year as noted in 3.10.1 above (703) (11,790) (17,604) (24,004) (30,776) Council Tax additional income based on a further 6% increase (total Council Tax of 6%) 703 746 785 824 865 Final Budget Surplus / (Gap) Cumulative 0 (11,044) (16,819) (23,180) (29,911)
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Final Budget Surplus / (Gap) In Year 0 (11,044) (5,775) (6,361) (6,731) 3.10.3 Appendix 5 provides a summary of the draft budget for 2026-27 at service level. 3.10.4 Members should note the recurring nature of proposals and how this impacts future year’s budget estimates. As an example, should Council reject a budget saving that is recurring in nature, say for £0.150m and replace with a one-off measure, the next year budget gap will be increased by £0.150m. Included within the measures to balance the 2026-27 budget noted above are £7.687m of savings or additional funding that are one-off in nature and therefore do not contribute to the budget gap in future years. This increases pressure on the 2027-28 budget gap and the Council will need to begin the budget process earlier and accelerate work on medium to longer term savings to be in the strongest position to achieve financial balance for 2027-28. 3.11 Balancing Future Years Budget 3.11.1 The budget gap in the period 2027-28 to 2030-31 across each scenario is summarised in the table below. Budget Gap 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Total £000 Best Case (3,384) (507) (846) (979) (5,714) Mid-Range (11,044) (5,775) (6,361) (6,731) (29,911) Worst Case (21,747) (11,783) (12,653) (13,326) (59,509) 3.11.2 As part of the 2026–27 Scottish Budget, the Scottish Government confirmed the removal of the legislative cap on Council Tax premiums for second homes and long-term empty properties. A Scottish Statutory Instrument (SSI) was laid on 28 January 2026 that would enable local authorities to vary premium levels to reflect local circumstances from 1 April 2026. The SSI must be approved by resolution of the whole Scottish Parliament before it comes into force. If Parliament approves, the regulations can be formally made and then come into effect on 1 April 2026. It is expected that the SSI would be approved by mid- March. As the legislation will not be in force until 1 April 2026, Council Tax bills issued in advance of that date will be based on the existing 100% premium. If Council were minded to agree an increase over what is currently charged for second homes, affected taxpayers would receive a revised bill after 1 April 2026, recalculating liability for the remainder of the financial year and adjusting instalments accordingly. This will require additional in-year billing activity and associated customer contact but can be accommodated within existing systems and processes.
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Initial modelling indicates that increasing the second homes premium from 100% to, for example, 110% could generate additional income of around £0.43m per annum, assuming a broadly stable Council Tax base. However, the actual yield will depend on taxpayer behaviour and wider housing market responses. 3.11.3 At the Council meeting held on 26 June 2026, an approach to the medium term budget was agreed that focused on the development of a five-year savings pipeline, while recognising the need to address the significant budget gap facing the Council in 2026–27. Four themes are being taken forward, as set out below: Empowering Communities Increasing Income Right Sizing Council Asset Base Delivering Services Differently. 3.11.4 Officers have been progressing with developing options for the medium term approach, albeit that for a period of time the focus of attention had to be on identifying savings in the short term to assist with balancing the 2026-27 budget. The options being considered are summarised below. Empowering Communities Visitor Levy Social and Economic Charter for Energy SSEN Local Fund Procurement Strategy to include community wealth creation Crowdfunding platform Clyde 2070 and the scope for community benefits Planning gain framework Increasing Income Improved Council Tax debt collection Increase to Council Tax on second homes Opportunities in relation to investment in renewables Right Sizing Council Asset Base Fleet Utilisation Programme and Replacement Programme Sports Pitches, Changing Rooms, Pavilions and Stadiums Marine Assets Corran Halls Business Model and Redevelopment Delivering Services Differently Review of duties and powers – linking into work by the Improvement Service Digital opportunities, including AI and automation Solace Transformation programme 3.11.5 The RIS Review is continuing and there are a number of workstreams being taken forward which should deliver an improvement in data for
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decision making, improved customer service and where possible savings. Once the data is improved, a further review will be carried out outlining other saving opportunities. The service are working to secure savings of up to £0.700m in relation to commercial waste and have offered up savings of over £0.900m in financial year 2026-27 as part of the 15% savings option exercise that was carried out across services. In addition, they have secured the RIS review savings target of £0.500m for 2026-27 due to the significant work in progressing a new contract post the existing waste PPP contract which comes to an end in September 2026. 3.11.6 The Education Review was agreed by Council on 26 November 2025. In addition to offering up savings of £1.334m in 2026-27 rising to £2.500m in 2027-28, ten themed recommendations were agreed that are designed for phased delivery over a 2-4 year period. Careful planning will be undertaken to ensure that the various interdependencies of different recommendations are taken forward in a systematic, coherent manner. 3.11.7 It is proposed to establish a Programme Management Office (PMO) responsible for co-ordination and delivery of both capital and transformation projects, to address issues including: Insufficient capacity to progress transformational change and maintain business as usual. Scale and complexity of organisational change that requires a more consistent, corporate and disciplined approach to programme and project management. Ensuring the Council can deliver its strategic priorities, respond effectively to external audit scrutiny and build the foundations for sustainable multi-year transformation. Addressing recent external audit findings (see below) and best practice evidence identified by the Accounts Commission. 3.11.8 Our external auditors Forvis Mazars as part of their Best Value Thematic Review on Transformation (reported to Audit and Scrutiny Committee on 27 January 2026) have recommended that the Council should consider the creation of a Programme Management Office to manage Transformation and other major projects to ensure oversight and increase the pace of change. The options noted below address that recommendation. 3.11.9 The PMO will provide a central core of expertise, standards and assurance, while enabling services to retain ownership and delivery responsibility for individual projects. A PMO will ensure consistent governance, standardised project management approaches and clear accountability for delivery, enabling faster and more effective decision- making. It would also improve the pace and quality of delivery, strengthen benefits realisation and financial discipline, and enhance the management of risks and interdependencies across the programme.
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3.11.10 The successful establishment of a PMO will require strong senior leadership with significant experience of delivering comparable organisational change and this can be delivered by one of two options. In both of the options, it is envisaged that the postholder would lead the PMO for a minimum period of two years. During this time, the Chief Executive will review the wider senior management structure to ensure it remains fit for the future, noting that a number of senior officers are approaching retirement age. 3.11.11 The core functions of the lead postholder will be to: Establish and lead the PMO Delivery Unit Drive organisational transformation initiatives Develop a detailed and costed medium term transformation plan for dealing with a full project and transformation portfolio. Develop and manage a pipeline of strategic projects. 3.11.12 Option 1 A new permanent Head of Service post (Head of Transformation) be established to lead the PMO. Appointing a new permanent post Head of Service post to lead organisational transformation offers long-term continuity, succession planning and sustained impact. A permanent leader will embed themselves within the culture, build lasting relationships, and ensure that transformation initiatives are consistently driven forward, adapting to evolving needs over time. Their ongoing presence allows for ownership and accountability throughout the change process and beyond. 3.11.13 Option 2 Procure external expertise to lead the PMO. Bringing in a temporary subject expert for a fixed period would provide specialist knowledge and a focused, time-bound injection of expertise. While this can accelerate specific aspects of transformation, the temporary nature of the role may limit continuity and ownership once their tenure ends. Knowledge transfer and maintaining momentum can be challenging when the expert departs, potentially resulting in fragmented progress or the need for further interventions. 3.11.14 A permanent appointment supports sustained change and organisational learning, while a temporary expert is best suited for targeted, short-term objectives where deep, specialised input is required. 3.11.15 In both options, the PMO hub would be resourced by project managers and support staff, drawing in part on existing resources currently responsible for delivering projects beyond business-as-usual activity or larger, more complex initiatives. It is recognised, however, that the PMO will require additional capacity, either through the recruitment of in- house staff or the commissioning of specialist external support where specific expertise is not available internally. It is estimated that either option will require a drawdown of up to £0.600m over a two-year period, to be funded from the Strathclyde Pension Fund gain monies that were
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set aside to support transformation and spend-to-save initiatives by Council at the February 2024 budget meeting. 3.11.16 As officers, our recommendation is that Option 1 is pursued. This would require Member approval for the creation of a recruitment panel. If Members are not minded to proceed on that basis then officers can implement Option 2 under the current delegation which set aside funding in the General Fund for transformation/spend to save projects and required that officers provide reports on the drawdowns from the General Fund balance to be submitted to the Policy and Resources Committee as part of the monitoring pack. 4. CONCLUSION 4.1 This report summarises the position with regard to the key issues surrounding the revenue budget and setting of council tax for 2026-27. It also provides estimates of the budget outlook for the period 2027-28 to 2030-31. 4.2 All proposals included within this report result in a balanced budget for 2026-27. 4.3 There remains a significant budget gap in future years and officers will continue to explore options to generate future savings or additional income. 4.4 The Council are asked to consider the funding requests summarised within Appendix 6. If Members are minded to support the funding request consideration needs to be given as to how they would be funded. 5. IMPLICATIONS 5.1 Policy – There are policy implications associated with the new saving options and also previously agreed savings options which impact 2026- 27 and beyond. 5.2 Financial – The report outlines the budget position over 2026-27 to 2030-31. 5.3 Legal – Any legal implications have and will be considered when developing savings options. 5.4 HR – Any HR implications have and will be considered when developing savings options. 5.5 Customer Service – There may be some customer service implications arising from the new savings options. Future customer service implications will be considered when developing savings options.
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5.6 Risk – There is a separate report assessing financial risks and there is also an overall assessment of risk included within the separate report on Reserves and Balances. 5.7 Climate Change – The Council is committed to addressing climate change and reviews of how Services are delivered is ongoing within the available budget resources. 5.8 Fairer Scotland Duty – Integrated Impact Assessments have been completed for savings as required. 5.9 Equalities (protected characteristics) – Integrated Impact Assessments have been completed for savings as required. 5.10 Consumer Duty – Integrated Impact Assessments have been completed for savings as required. 5.11 Island Communities - Integrated Impact Assessments have been completed for savings as required. 5.12 Children’s Rights and Wellbeing – Integrated Impact Assessments have been completed for savings as required. Kirsty Flanagan Executive Director /Section 95 Officer 11 February 2026 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES: Appendix 1 – 2026-27 to 2030-31 Budget Outlook Scenarios Appendix 2 – Non-Pay Inflation Estimates 2026-27 Appendix 3 - Cost and Demand Pressures 2026-27 to 2030-31 Appendix 4 – New Policy Options Savings Summary and Templates Appendix 5 – Service Summary of Budget Position Appendix 6 – Funding Requests For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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BUDGET OUTLOOK 2026-27 to 2030-31 APPENDIX 1 BUDGET PACK - 25 FEBRUARY 2026 DRAFT 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Base Budget 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 328,289 Base Budget Adjustments 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 3,195 Revised Base Budget 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 331,484 Impact of Pay Award - SJC, Teachers and Chief Officers 9,192 14,104 17,477 20,917 24,426 14,104 19,163 24,374 29,741 17,378 25,973 34,998 44,474 Pay Increments 599 899 1,198 1,498 1,797 1,198 1,797 2,396 2,995 1,198 1,797 2,396 2,995 Re-instate Employers Superannuation Rate 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 Chief Officers Pay Increase 129 132 136 141 145 132 136 141 145 132 136 141 145 Standby Rate Increase 38 38 38 38 38 38 38 38 38 38 38 38 38 Estimated Employers Superannuation Rate Reduction from 2027/28 0 (5,039) (5,039) (5,039) (5,039) (2,799) (2,799) (2,799) (2,799) 0 0 0 0 Total Employee Cost Changes (Council Services) 16,833 17,009 20,685 24,430 28,242 19,548 25,210 31,025 36,995 25,621 34,819 44,448 54,527 Non-Pay Inflation - Council Services 2,489 4,918 7,831 10,945 14,272 5,901 9,496 13,326 17,406 6,871 11,155 15,713 20,561 ASN Support 208 422 422 422 422 422 422 422 422 422 422 422 422 School Clothing Grants 56 32 32 32 32 56 56 56 56 79 79 79 79 Schools Residential 600 600 600 600 600 600 600 600 600 600 600 600 600 Waste uplift provided externally 60 60 60 60 60 60 60 60 60 60 60 60 60 IT Licences for Education 140 140 140 140 140 140 140 140 140 140 140 140 140 Education ICT Network Infrastructure 0 53 53 53 53 53 53 53 53 53 53 53 53 Election Costs 0 327 0 0 0 350 0 0 0 370 0 0 0 Freedom of Information (FOI) Requests 198 198 198 198 198 198 198 198 198 198 198 198 198 Planning (Local Development Plan) 50 0 0 0 0 0 0 0 0 0 0 0 0 Housing Benefits Admin Grant 40 80 120 160 200 80 120 160 200 80 120 160 200 Civica Revenue and Benefits System 0 37 37 37 37 63 63 63 63 137 137 137 137 Payroll and Pensions Resource 155 77 77 77 77 77 77 77 77 77 77 77 77 Microsoft 365 Licenses 30 380 380 380 380 380 380 380 380 400 400 400 400 Compliance with BMW Ban 1,568 651 914 914 914 651 914 914 914 651 914 914 914 Bus Transport Contracts 400 360 360 360 360 400 400 400 400 440 440 440 440 Minimum Income Standard (MIS) Research 30 0 0 0 0 0 0 0 0 0 0 0 0 Valuation Joint Board 255 301 301 301 301 301 301 301 301 301 301 301 301 Security Operations Centre - Quorum Cyber Contract Renewal 43 43 43 43 43 43 43 43 43 43 43 43 43 Wi-Fi Network Subscription License Costs 15 58 58 58 58 58 58 58 58 58 58 58 58 Civica Housing Case Management System 32 4 4 4 4 4 4 4 4 4 4 4 4 Right sizing of budgets within Customer Support Services 57 58 58 59 60 58 58 59 60 98 101 104 107 Management of Council Dams 95 98 101 104 107 98 101 104 107 340 355 360 375 Harbours Repairs and Maintenance 260 135 140 145 150 270 280 290 300 58 58 59 60 Resurfacing of Taxiways at Oban Airport 100 0 0 0 0 0 0 0 0 0 0 0 0 Flexible Food and Fuel Fund 104 104 104 104 104 104 104 104 104 104 104 104 104 Allowance for Cost and Demand Pressures Future Years 0 250 500 750 1,000 500 1,000 1,500 2,000 1,000 2,000 3,000 4,000 Total Cost and Demand Pressures 4,496 4,468 4,702 5,001 5,300 4,966 5,432 5,986 6,540 5,713 6,664 7,713 8,772 Adjustment to Health and Social Care Partnership Payment 9,731 9,937 9,937 9,937 9,937 9,731 9,731 9,731 9,731 9,731 9,731 9,731 9,731 Adjustment to Live Argyll Management Fee (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) (193) Total Estimated Expenditure PRIOR to measures to balance the budget 364,840 367,623 374,446 381,604 389,042 371,437 381,160 391,359 401,963 379,227 393,660 408,896 424,882 Scottish Government Grant 273,050 273,050 273,050 273,050 273,050 271,686 270,328 268,976 267,631 270,320 267,617 264,941 262,292 Packing Extended Producer Responsibility Funding - DEFRA 2,851 2,851 2,851 2,851 2,851 1,426 1,426 1,426 1,426 0 0 0 0 Further Reduction to Level Playing Field Support Funding 0 (430) (430) (430) (430) (430) (430) (430) (430) (430) -430 (430) (430) Transfer from Reserves - EPR funding carried forward from 2025-26 1,438 0 0 0 0 0 0 0 0 0 0 0 0 Transfer from Reserves - SPF Gain agreed February 2024 2,000 0 0 0 0 0 0 0 0 0 0 0 0 Transfer from Reserves - Funding set aside for Pay Award 1,261 0 0 0 0 0 0 0 0 0 0 0 0 Council Tax 70,857 71,538 72,075 72,616 73,161 71,211 71,567 71,925 72,285 70,884 71,061 71,239 71,417 Total Funding 351,457 347,009 347,546 348,087 348,632 343,893 342,891 341,897 340,912 340,774 338,248 335,750 333,279 Budget Surplus / (Gap) PRIOR to measures to balance the budget (13,383) (20,614) (26,900) (33,517) (40,410) (27,544) (38,269) (49,462) (61,051) (38,453) (55,412) (73,146) (91,603) Measures to Balance the Budget: Fees and Charges 440 1,140 1,903 2,735 3,642 907 1,402 1,927 2,483 673 913 1,161 1,416 Council Tax Increase 4,251 8,510 13,039 17,853 22,968 8,024 12,004 16,200 20,624 8,474 12,944 17,675 22,682 Council Tax Increase (Growth element) 0 32 64 98 134 21 40 60 81 11 21 32 44 Policy Savings Agreed Feb 2023 619 1,456 2,197 2,288 2,145 1,456 2,197 2,288 2,145 1,456 2,197 2,288 2,145 Management/Operational Options Agreed Feb 2025 (48) (9) (9) (9) (9) (9) (9) (9) (9) (9) (9) (9) (9) Policy Options 2025 536 636 636 636 636 636 636 636 636 636 636 636 636 New Management/Operational Options 2026 3,091 2,965 2,680 2,680 2,680 2,965 2,680 2,680 2,680 2,965 2,680 2,680 2,680 New Policy Savings Options 2026 2,999 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Underspend in Loans Fund in 2025/26 1,500 0 0 0 0 0 0 0 0 0 0 0 0 Rounding (5) Total Measures to Balance the Budget 13,383 17,230 23,010 28,781 34,696 16,500 21,450 26,282 31,140 16,706 21,882 26,963 32,094 Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget 0 (3,384) (3,890) (4,736) (5,714) (11,044) (16,819) (23,180) (29,911) (21,747) (33,530) (46,183) (59,509) Budget Surplus / (Gap) In Year AFTER measures to balance the budget 0 (3,384) (507) (846) (979) (11,044) (5,775) (6,361) (6,731) (21,747) (11,783) (12,653) (13,326) Mid-Range ScenarioBest Case Scenario Worst Case Scenario
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# NON-PAY INFLATION (COUNCIL) Appendix 2 Service Category Basis of Inflation Inflation Percentage Mid Range 2026/27 Council Wide Electricity Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 137,716 Council Wide Gas Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 29,234 Council Wide Heating Oils Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 13,421 Council Wide Solid Fuel Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 10,419 Council Wide Water Charges Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 19,279 Council Wide Vehicle Fuel Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 39,395 Council Wide Central Repairs - Outside Contractors Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 98,279 Council Wide Insurances Mid-point set at 16% in line with the 2025/26 increase in insurance costs, with 0.5% tolerance for best and worst case. 16.00% 490,534 Council Wide Contribution to Joint Boards Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 47,285 Council Wide Non-Domestic Rates Estimate for the increase in Non-Domestic Rates, with a tolerance of 0.5% for best and worst case. -3.45% (188,983) Council Wide COSLA Annual Membership Fees Annual membership fee inflation agreed by member Councils. 7.50% 12,912 709,491 Education Pre-Primary Partner Provider Uplift Reflects the 2025/26 increase in the Real Living Wage from £12.60/hr to £13.45/hr, with a tolerance of 0.5% for best and worst case. 6.75% 271,606 Education External School Placements Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 44,136 Education School Clothing Grant Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 8,917 Commercial Services Catering Purchases Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 72,664 Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 7,658 Legal & Regulatory Support Leisure SLA-Atlantis Based on the movement in RPIX between September 2024 and September 2025 per the SLA, with 0.5% tolerance for best and worst case. 4.50% 31,414 Legal & Regulatory Support NPDO-Variable Element Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 333,909 Legal & Regulatory Support NPDO-Utilities Rebate Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% (12,632) Legal & Regulatory Support NPDO-Electricity Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 21,525 Legal & Regulatory Support NPDO-Gas Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 8,723 Legal & Regulatory Support NPDO-Heating Oil Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 3,420 Legal & Regulatory Support NPDO-LPG Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 2,977 Legal & Regulatory Support NPDO-Water Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 12,793 Legal & Regulatory Support HUB-Variable Element Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 52,261 859,371 Customer and Support Services ICT Estimate added at 10% to reflect input from ICT on increasing costs. 10.00% 243,490 Customer and Support Services Customer Service Point Contracts Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 746 Financial Services Annual External Audit Fee Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 11,204 Roads and Infrastructure Public Transport Reflects a 3% uplift for annual inflation set within the terms of the contracts between the Council and the service providers. 3.00% 275,994 Council Wide Total Executive Director Douglas Hendry - Total
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Classification: OFFICIAL# Service Category Basis of Inflation Inflation Percentage Mid Range 2026/27 Roads and Infrastructure School Transport Reflects a 3% uplift for annual inflation set within the terms of the contracts between the Council and the service providers. 3.00% 157,139 Roads and Infrastructure Helensburgh Waste Disposal Costs Based on estimate for RPI at 2026 Q1 tracking the Bank of England forecast for CPI at November 2025, with 0.5% tolerance for best and worst case. 3.70% 62,050 Roads and Infrastructure Scottish Environmental Protection Agency Reflects the annual inflation trend in the 2023/24 and 2024/25 financial years with a 0.5% tolerance for best and worst case. 8.00% 7,789 Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 18,386 Roads and Infrastructure Electricity - Street Lighting Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 35,171 Roads and Infrastructure Electricity - Vehicle Charging Points Based on the November 2025 Bank of England Monetary Policy Committee CPI Forecast for 2026 Q1, with a 0.5% tolerance for best and worst case. 3.10% 9,144 Roads and Infrastructure Strathclyde Passenger Transport Requisitions Based on the 2025/26 Scottish Government Revenue Funding floor adjustment value for the Council, with a 0.5% tolerance for best and worst case. 1.95% 12,360 Roads and Infrastructure Refuse Vehicle Ferry Fares Reflects impact on the budget of the published increase in Calmac Ferry Fares for 2025/26, with a tolerance of 0.5% for best and worst case. 5.00% 14,049 Development & Economic Growth Housing Support Contracts Reflects the 2025/26 increase in the Real Living Wage from £12.60/hr to £13.45/hr, with a tolerance of 0.5% for best and worst case. 6.75% 72,344 919,866 2,488,728 Executive Director Kirsty Flanagan - Total Total Non-Pay Inflation in the Mid Range
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COUNCIL COST AND DEMAND PRESSURES 2026-27 to 2030-31 Department Service Cost/Demand Pressure 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Executive Director - Douglas Hendry Education The demand for ASN support in Argyll and Bute has continued to grow with a significant increase in, and early identification of children and young people presenting with complex additional support needs, including mental health difficulties which manifests often in dysregulated behaviours. Scottish Government statistics show that the number of pupils identified with ASN has increased markedly since 2010 and there continue to be year on year increases. These increases are likely due to continue as we see the long-term impact of the Covid 19 pandemic on children and young people who were born from 2020 onwards and as we work with partners to streamline assessment processes which help us to understand need more thoroughly. Scottish Government statistical datasets show that the percentage of school roll in mainstream schools of pupils with ASN has increased by approximately 3% year on year. Within many authorities, this means increased numbers of children accessing specialist provision. As Argyll and Bute do not have equitable access to Specialist provision in all areas, the cost pressure associated with offering appropriate support within our local schools continues to increase in line with need. 208 422 422 422 422 208 422 422 422 422 208 422 422 422 422 Executive Director - Douglas Hendry Education Rightsize of School Clothing Grant Budget - Argyll and Bute Council pay the national minimum rate for School Clothing Grants. The payment is currently £120 for Primary School Children and £150 for Secondary School children. Over the past two years the number of clothing grants issued has increased and left Education with a demand pressure. Furthermore it is proposed that a 6% increase to the school clothing grants is applied to increase payments to £127.20 and £159 for primary and secondary pupils respectively. 32 32 32 32 32 56 56 56 56 56 79 79 79 79 79 Executive Director - Douglas Hendry Education Rightsize the Schools Residential Budget - The Education Service contribute 38% towards the cost of jointly funded out of area Residential Placements with Social Work contributing 62%. Education also have a number of out of area day placements which they pay 100% of the cost. Over recent years the cost of these placements has risen significantly due to a reduction in subsidy for Grant Aided Special Schools (GASS) by the Govenment, along with the increase in demand for these type of placements. This has led to a cost pressure of £600k. 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 Executive Director - Douglas Hendry Education A number of schools get their waste uplifted by Biffa as the Internal Service could not provide this service due to the size of the bins, this contract has been in place for a number of years. Education have managed to offset this pressure from underspends elsewhere within the service, however this is no longer sustainable. 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 Executive Director - Douglas Hendry Education IT Licenses for Education, these costs had historically been paid from a central budget, however as this cost increased this was no longer affordable. The schools equipment budget was then top sliced to cover, however this is no longer affordable due to falling school rolls, inflation never having been applied to amount per pupil calculation. Therefore, this is a rightsize of this budget which will be paid from a school central budget and will be added to the non pay inflation calculation which is included in the budget outlook projection. 140 140 140 140 140 140 140 140 140 140 140 140 140 140 140 Executive Director - Douglas Hendry and Kirsty Flanagan Education and ICT The Education ICT Network required transformative technology upgrade, with improved security and reconfiguration to support in-school and at home learning, was approved as part of the budget for 2025- 26. However, the recommended cost plan included additional revenue consequences from 2027-28, estimated at £53k per annum, in respect of network equipment licencing costs. 0 53 53 53 53 0 53 53 53 53 0 53 53 53 53 Executive Director - Douglas Hendry Legal and Regulatory Services Estimated cost (to be borne by the Council) of carrying out local Government elections in May 2027 (and in financial year 2027/28). Operating approx. 100 polling stations and carrying out poll and count for 11 Multi member wards – requiring 11 separate counts 0 327 0 0 0 0 350 0 0 0 0 370 0 0 0 Executive Director - Douglas Hendry Legal and Regulatory Services Due to the continuing increase in Freedom of Information (FOI) requests and Subject Access Requests (SAR) and the increasing complexity of these requests, along with a steep rise in complaints, the existing team are only able to meet the statutory requirements and timescales of fulfilling these requests by working longer hours both in the evenings and on Saturdays, which is not sustainable in the longer term. Officers have been carrying out this work, often unpaid. This is a small team who are also involved in the Election work and record management duties. The volume of work is taking both the Governance, Risk and Safety Manager and the assistant Compliance and Regulatory Officer away from their operational remits and is not an effective use of their time. Consequently, the department has a demand pressure request for three additional posts to alleviate the current pressure and to meet all the Councils statutory requirements. In addition to seeking additional staffing to meet the increasing workload, it is proposed that the Team engage with ICT & the Customer Engagement and Transformation Manager who have expertise in use of automation to obtain advice and assistance on how the Team could utilise AI to reduce the bureaucratic burden as much as possible by exploiting all AI options including BOTS. 198 198 198 198 198 198 198 198 198 198 198 198 198 198 198 Best Case Mid-Range Worst Case APPENDIX 3
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COUNCIL COST AND DEMAND PRESSURES 2026-27 to 2030-31 Department Service Cost/Demand Pressure 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Best Case Mid-Range Worst Case APPENDIX 3 Executive Director - Kirsty Flanagan Development & Economic Growth Local development plan will require to be done under the new Planning legislation which is a revised process from the current one and will have a 10 year life. The new process has 2 stages where there is likely to be a cost pressure - a gate check followed by an examination some time later. 50 0 0 0 0 50 0 0 0 0 50 0 0 0 0 Executive Director - Kirsty Flanagan Financial Services Universal Credit “Full” Service went live in Sept 2018, managed migration for working age claimants began in August 2023 and will be completed by December 2025. Details of the migration of Pension age Housing Benefit claimants have not yet been released initial indications was that the overall migration to Pension Credit will be completed in 2028/2029 although that looks unlikely now. The DWP will reduce the Housing Benefit Administration Subsidy they pay to the Council as some claimants come off of Housing Benefit processed by Council staff and go onto Universal Credit processed by the DWP. The Council’s caseload has reduced since implementation of Universal Credit but it is hard to predict just how quickly the rest of the caseload will migrate from Housing Benefit to Universal Credit between now and 2028/2029. These figures represent our best estimates at this time. 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 Executive Director - Kirsty Flanagan Financial Services The Council has been engaged in discussions with the supplier of the Revenues and Benefits Management System and also the Electronic Document Management System. We expect cost increases in the future as the supplier moves the systems to the Cloud. The cost presure is an estimate at this time and will be refined as we get nearer to 2027-28. 0 37 37 37 37 0 63 63 63 63 0 137 137 137 137 Executive Director - Kirsty Flanagan Financial Services The workload of the payroll and pensions team has grown due to increased volume of salary sacrifice/AVC schemes, increased requirements regarding pension reporting and increased workload as a result of the implementation of the new i-Trent system. An element of this pressure will be one-off in nature as implementation issues are rectified but there will also be a recurring increase in workloads on an ongoing basis. A report is being presented to Policy and Resources Committee on 19 February 2026 in relation to this pressure. 155 77 77 77 77 155 77 77 77 77 155 77 77 77 77 Executive Director - Kirsty Flanagan Financial Services Flexible Food and Fuel Fund - UK Shared Prosperity Fund (UKSPF) revenue funding will end in March 2026, with no replacement allocation for Argyll and Bute from successor UK Government funds for at least the next three financial years. A report is being presented to Policy and Resources Committee on 19 February 2026 in relation to this pressure. 104 104 104 104 104 104 104 104 104 104 104 104 104 104 104 Executive Director - Kirsty Flanagan ICT Microsoft 365 License Costs. An earmarked reserve, set up to contribute towards the licensing and set-up costs for the Microsoft 365 rollout, is projected to be fully depleted during 2026-27, with an estimated budget pressure of £30k in 2026-27, increasing to £380k in 2027-28. These estimates are subject to change, should licence upgrades be required for Power BI or Teams Telephony. 30 380 380 380 380 30 380 380 380 380 50 400 400 400 400 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Relates to compliance with the biodegradable municipal waste (BMW) ban on mainland sites in addition to continuing land filling on the island sites until the full ban comes into place on 1 January 2028. The cost pressure also takes into consideration the contract changes required following the end of the PPP agreement in September 2026. Due to the uncertainty with the cost pressure at this stage, it was deemed prudent to have a contingency allowance built in at this time and this will be monitored during 2026-27 and if no longer needed would be reported through the routine budget reports. 1,568 651 914 914 914 1,568 651 914 914 914 1,568 651 914 914 914 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Bus Transport contracts have seen a significant increase in new contract prices due to increased costs for fuel, insurance, maintenance, regulatory compliance and driver wages. For example, during 2024/25, new contracts resulted in an overall increase in annual costs of £975k across Argyll and Bute. Contracts due for renewal during October 2025 have been extended into early 2026 to provide additional time for negotiation. The new contract values are currently expected to be confirmed by the end of February 2026 with cost increases estimated at £400k. 360 360 360 360 360 400 400 400 400 400 440 440 440 440 440 Executive Director - Kirsty Flanagan Economic Development Commissioning Minimum Income Standard (MIS) research work in partnership with Shetlands Islands Council. 30 0 0 0 0 30 0 0 0 0 30 0 0 0 0 Council Wide Council Wide A letter from the Dunbartonshire and Argyll and Bute Valuation Joint Board was received on 30 January 2025 advising of the financial challenges facing the Board and the estimated 2025-26 to 2027-28 budget gaps along with a request to increase the level of contribution that we make to the Board. Since 2012-13 the core constituent funding to the Board has either reduced or been flat cash for the past 7 years with the Board heavily reliant on reserves. As the reserves will be fully depleted by 2025-26 there is a required for the requisitions to increase. 255 301 301 301 301 255 301 301 301 301 255 301 301 301 301 Executive Director - Kirsty Flanagan ICT The Security Operations Centre (SOC) contract with Quorum Cyber provides constant monitoring of the council’s networks and 24/7/365 protection by proactively monitoring, detecting and analysing data, and providing incident response and recovery. It works alongside the council’s internal security posture to ensure we can operate securely, at all times. It is now an essential service for the Council and was funded for the first three years from earmarkings but will require a cost pressure from 2026/27 of £43k per annum. 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 Executive Director - Kirsty Flanagan ICT The Council’s Wi-fi network is based on a subscription licensing model from CISCO. Our current subscription was paid from excess capital and revenue but expires in January 2027 and will need renewed at a cost of £175k. This will cover a three year subscription. 15 58 58 58 58 15 58 58 58 58 15 58 58 58 58
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COUNCIL COST AND DEMAND PRESSURES 2026-27 to 2030-31 Department Service Cost/Demand Pressure 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2030-31 £000 Best Case Mid-Range Worst Case APPENDIX 3 Executive Director - Kirsty Flanagan ICT / Housing Works with Civica to upgrade the Civica Housing Case Management System, including the addition of Multi Factor Authentication and system version upgrades. 2026/27 initial cost of £31,900, with future annual costs of £3,510 from 2027-28 (subject to inflation). 32 4 4 4 4 32 4 4 4 4 32 4 4 4 4 Executive Director - Kirsty Flanagan CSS - Various budget right-sizing Right sizing of various budgets that have moved over the last few financial years that as a group now have a material impact and the department’s ability to absorb these pressures is no longer possible. These increases are made up of; the COSLA digital office costs, income budget for insurance recoveries that are no longer realised, Local Government Information Unit (LGIU) invoice, reduction in demand for Registration services which has been overestimated since the post-pandemic single year wedding surge, which skewed the figures. 57 58 58 59 60 57 58 58 59 60 57 58 58 59 60 Executive Director - Kirsty Flanagan RIS -Management of Council Dams Cost pressure associated with the management of dams to ensure inspections, oversight and cyclical maintenance works are in place to meet the requirements of SEPA. Historically these costs were charged to the property maintenance budget which is intended for the upkeep of Roads and Infrastructure buildings such as depots therefore is not sustainable. Insufficient budget resulted in the non-compliance of the requirements set by SEPA in relation to our dams. The 3 dams this cost pressure relates to are Bishops Glen (£33k), Kirk Dam (£31k) and Millknowe Floor Storage (£31k) and assumed inflation of 3% has been added for future years. The additional budget will cover a number of activities including weekly inspections, maintenance costs including cleaning and replacing equipment , SEPA licences and annual surveys. 95 98 101 104 107 95 98 101 104 107 95 98 101 104 107 Executive Director - Kirsty Flanagan RIS - Other Harbours - Repairs/Maintenance Ageing assets and cost increases for repair work required to be undertaken has resulted in a cost pressure in this area and a forecast overspend for 25-26 is anticipated in respect of this. This relates solely to repairs and maintenance therefore it is not possible to capitalise these costs as assets are not being enhanced. 130 135 140 145 150 260 270 280 290 300 325 340 355 360 375 Executive Director - Kirsty Flanagan Economic Development Resurfacing of taxiways at Oban Airport. All sections in need of repair date back to when the RAF operated the airport and were not ungraded when the Council licensed the aerodrome. The surfaces are deteriorating and as a result are producing loose stones and fragments of bitumen presenting a hazard which could cause damage to aircraft therefore resulting in a potential claim against the Council. 100 0 0 0 0 100 0 0 0 0 100 0 0 0 0 Council Wide Council Wide General provision for unidentified Cost and Demand Pressures 0 250 500 750 1,000 0 500 1,000 1,500 2,000 0 1,000 2,000 3,000 4,000 TOTAL 4,302 4,468 4,702 5,001 5,300 4,496 4,966 5,432 5,986 6,540 4,644 5,713 6,664 7,713 8,772
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POLICY SAVINGS OPTIONS - 2026-27 - NO STAFF IMPACT APPENDIX 4 Release of Earmarkings 2025-26 Saving One-off Saving FTE H/Count Saving FTE H/Count Saving FTE H/Count COM01 Live Argyll Reduction to Live Argyll management fee in 2026/27 by 15%. A 10% saving is already in budget outlook as a deferred saving agreed by Council in 25/26 - this relates to an additional 5% only. 156 0.0 0 156 0.0 0 156 0.0 0 COM02 Catering Increase Charges for School Meals 50 0.0 0 50 0.0 0 50 0.0 0 COM08 Energy Efficiency Fund Remove Energy Efficiency Fund which will reduce future works to reduce capacity for the Council to reduce its carbon footprint 210 DEG01 Transformational Projects Stopping support to Strategic Events and Festivals. Applications for 2026-27 are being presnted to P&R Committee in February. If approved this saving would not be deliverable in 2026-27 unless alternative funding was identified on a one- off basis. 90 0.0 0 90 0.0 0 90 0.0 0 DEG03 Regulatory Services Removal of Crown Estate Funding for Redevelopment of 5-7 East Clyde Street Helensburgh 270 DEG06 Transformational Projects Capitalisation of project management costs within Rural Growth Deal PMO. This has been incorporated within capital planning assumptions within budget pack. 112 0.0 0 112 0.0 0 112 0.0 0 EDU06 Early Years Third Sector Grants Removal of Early Years Third Sector grants allocated to non-statutory services. 0 0.0 0 40 0.0 0 40 0.0 0 FS04 Revenues and Benefits Devolved Empty Property Relief - Removal of forecast underspend. 330 RIS01 Amenity Services 15% Increase in Fees and Charges for parking 22 0.0 0 22 0.0 0 22 0.0 0 RIS02 Amenity Services 15% Increase in Fees and Charges for Cemeteries and Crematorium (6% already accounted for in budget outlook) 33 0.0 0 33 0.0 0 33 0.0 0 2028-29Ref Service Area Saving Summary 2026-27 2027-28
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POLICY SAVINGS OPTIONS - 2026-27 - NO STAFF IMPACT APPENDIX 4 Release of Earmarkings 2025-26 Saving One-off Saving FTE H/Count Saving FTE H/Count Saving FTE H/Count 2028-29Ref Service Area Saving Summary 2026-27 2027-28 RIS07 Ports and Harbours Campbeltown Overtime to be covered by Shipping Berthing Fees 35 0.0 0 35 0.0 0 35 0.0 0 Totals 480 330 498 0.0 0 538 0.0 0 538 0.0 0
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POLICY SAVINGS OPTIONS - 2026-27 - STAFF IMPACT APPENDIX 4 Release of Earmarkings 2025-26 Saving One-off Saving FTE H/Count Saving FTE H/Count Saving FTE H/Count CSS01 Customer and Engagement Team Close Service Points and Move all Phone and Email Traffic to CSC 224 6.4 10 224 6.4 10 224 6.4 10 CSS02 Communications Remove part time Research and Insight Officer post and also residual saving from previously changing an LGE11 post to two part time LGE10 posts. 38 0.5 1 38 0.5 1 38 0.5 1 CSS04 HR Refocus work and use of more digital systems and processes that should save staff time. Also a small amount of savings in non staffing budgets, e.g. training and travel and subsistence. 35 0.76 2 191 TBC TBC 191 TBC TBC DEG08 Development Policy and Housing Transfer costs to Strategic Housing Fund for 2 staff working on the delivery of housing. 147 2.0 2 147 2.0 2 147 2.0 2 EDU03 Early Years Remove 2 early years posts that are vacant due to reducing rolls. 82 2.0 2 82 2.0 2 82 2.0 2 EDU04 Life Long Learning and Support Remove a 0.4fte Teacher Post at end of current contract period. This post supported schools with English as an Additional Language, inclusion, UNCRC including Rights Respecting Schools. 18 0.4 1 24 0.4 1 24 0.4 1 EDU05 Wellbeing, Inclusion and achievement Post for wellbeing work comes to an end July 2026. 46 1.0 1 74 1.0 1 74 1.0 1 EDU09 Early Years Teachers Removal of teacher time to every ELC facility. 108 1.6 16 108 1.6 16 108 1.6 16 FS01 Revenues and Benefits Removal of two Benefits Posts 10 80 2.0 2 80 2.0 2 80 2.0 2 FS02 Revenues and Benefits Removal of one post from Council Tax Admin Team 20 0.6 1 20 0.6 1 20 0.6 1 LRS04 Legal Services Removal of part time Senior Solicitor post due to retirement 7 hours @ LGE12 14 0.2 1 14 0.2 1 14 0.2 1 LRS05 Legal Services Reduction in Solicitor LGE11 post by 14 Hours 25 0.4 0 25 0.4 0 25 0.4 0 2028-29Ref Service Area Saving Summary 2026-27 2027-28
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POLICY SAVINGS OPTIONS - 2026-27 - STAFF IMPACT APPENDIX 4 Release of Earmarkings 2025-26 Saving One-off Saving FTE H/Count Saving FTE H/Count Saving FTE H/Count 2028-29Ref Service Area Saving Summary 2026-27 2027-28 LRS06 Legal Services Removal of Admin Post Currently Vacant 25 0.9 1 25 0.9 1 25 0.9 1 RIS03 Amenity Services Close, Sale or Transfer of Public Conveniences 100 4.0 12 100 4.0 12 100 4.0 12 RIS04 Roads and Infrastructure Services Reduction in Administration Costs 36 1.0 1 44 1.0 1 44 1.0 1 RIS05 Amenity Services Removal of Amenity Service Environmental Wardens 178 5.0 5 214 5.0 5 214 5.0 5 RIS06 Roads Winter Maintenance 10% Reduction in Winter Maintenance Budget which brings us closer to the average treatment routes for all Scottish Authorities 270 TBC TBC 270 TBC TBC 270 TBC TBC RIS08 Parks Reduction to operational budget in parks resulting in reduced level of service 88 3.0 3 106 3.0 3 106 3.0 3 RIS09 Street Sweeping 15% reduction to street sweeping budget resulting in a reduced level of service 147 5.0 5 176 5.0 5 176 5.0 5 Totals 0 10 1,681 36.8 66 1,962 36.0 64 1,962 36.0 64
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Commercial Services Ref: COM01 Service Delivery Area Live Argyll Detail of Savings Proposal In 2025/26 a 10% reduction in Management fee was approved at the February 2025 Budget Meeting but was deferred to this financial year. This totalled £0.311m and has been deducted from the 2026/27 management fee within the budget outlook. For 2026/27 it is proposed that a further 5% reduction is applied to the Management Fee totalling £0.156m. The total reduction to the management fee over the 2 year period 2025-2027 is therefore £0.467m. The table below shows scenarios, service changes and balancing actions outlined by Live Argyll to respond to the proposed Management Fee reduction:- All scenarios / options listed in the table (above) will be required to be delivered to reach the £0.467m target as outlined. A decision by the Live Argyll Board in 2025 to close a number of smaller libraries has been publicly unpopular and has not been progressing in 2025/26. This proposal supersedes that previous decision. During January and February 2026, Live Argyll have been undertaking engagement with Live Argyll Members and wider public relating to how communities may be affected by potential changes to service provision relating to leisure, libraries, culture, halls, active schools and community learning development. Engagement has included online surveys, attendance at staff workshops and community planning events. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 156 0 0 156 0 0 156 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Commercial Services and Education Service Ref: COM2 Service Delivery Area Increase Charges for School Meals Detail of Savings Proposal Increase the charge payable for school meals by 6% taking the cost of a Primary Meal from £2.30 to £2.45 and a Secondary School Meal from £2.40 to £2.55. Based on current uptake this would generate additional income of £50k. Due to the cost-of-living crisis and priority of protecting families there has been no annual increase of chargeable school meals since 2021-22. There is a mixed picture nationally in terms of school meals provision and charging. A range of other Council charges are:- West Dunbartonshire Council £3.19 for both Primary and Secondary, East Dumbartonshire Council £2.60 and £2.71, Highland Council £2.40 and £2.65, with North Lanarkshire charging £3.40 and £3.45. There is also a balance to be struck between increasing the cost of a school meal whilst not wishing to prompt the student to seek a meal outside of school. Most high schools have alternative options if prices are deemed to be excessive and therefore overall income could fall. A 6% increase in school meal charges could increase income by circa £50k. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 50 0 0 50 0 0 50 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Commercial Services Ref: COM8 Service Delivery Area Energy Efficiency Fund - Carbon Reducing Projects Detail of Savings Proposal Remove Energy Efficiency Fund Earmarking – One off Saving This would reduce ability for the Council to reduce its Carbon Footprint. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 210 0 0 0 0 0 0 0 0
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Classification: OFFICIAL DEG - 2026-27 BUDGET PREPARATION – SAVING OPTIONS Head of Development and Economic Growth (DEG) Ref: DEG01 Service Delivery Area Transformational Projects Detail of Savings Proposal Stopping of support of Strategic Events and Festivals Risk: Loss of support for key community/economic events across Argyll and Bute. For example, the Cowal Games, albeit this is a competitive fund. Loss of over £2m of economic impacts linked to this one event. £9m loss associated with all events albeit the council are part funders through this fund. Note that a paper asking for approval of applications in 2026-27 is being presented to Policy and Resources Committee on 19 February 2026. If the recommendations in the paper are approved then this saving would not be deliverable in 2026-27 unless alternative funding was identified on a one-off basis. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count £90k 0 0 £90K 0 0 £90K 0 0
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Classification: OFFICIAL DEG - 2026-27 BUDGET PREPARATION – SAVING OPTIONS Head of Development and Economic Growth (DEG) Ref: DEG03 Service Delivery Area Regulatory Services Detail of Savings Proposal Removal of Crown Estates funding allocated to redevelopment of 5-7 East Clyde Street, Helensburgh Note: £80K of Crown Estates funding to be retained to support ongoing works and costs associated with the compulsory purchase, legal costs incurred in services and potential appeal, to fund ongoing maintenance to the property to protect public safety and potentially to secure majority ownership of the site. Risks: 1. Due to difficulties delivering this project due to multiple owners, legal issues and pursuing compulsory purchase provisions, these monies will not be allocated within the next year. 2. Future development could be supported by funding from the Strategic Housing Improvement Plan (SHIP) and from ACHA 3. Full monies will not be available if the Council requires to involve formal powers to demolish the property. This will fall to corporate budget/strategic housing fund Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 270 0 0 0 0 0 0 0 0
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Classification: OFFICIAL Head of Development and Economic Growth Ref: DEG06 Service Delivery Area Transformational Projects Detail of Savings Proposal There is the opportunity to capitalize the costs associated with the Rural Growth Deal (RGD) Project Officer and Administrative and Finance Assistant posts. Note that this funding cannot be taken from the capital grants associated with the RGD as councils and key delivery partners must fund PMO costs in line with the deal agreement. Therefore, if this option is taken then capital funding would have to be identified within the capital plan. Note that this saving has been incorporated within the capital planning financial assumptions in the Capital Plan Update report within the budget pack, therefore if this saving was agreed it would not impact the capital position further than what is already stated within the report. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 112 0 0 112 0 0 112 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Education Ref: EDU - 06 Service Delivery Area Early Years – Third Sector Grant Funding Detail of Savings Proposal Removal of Early Years Third Sector grants allocated to non-statutory services. This grant provides essential funding support for partner providers delivering statutory services. The saving proposal relates only to the funding allocated to partners delivering non statutory services. This will include Parent and Toddler Groups and school age childcare providers Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 0 0 0 40 0 0 40 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Financial Services Ref: FS04 Service Delivery Area Revenue and Benefits – Devolved Empty Property Relief Detail of Savings Proposal Empty Property Relief policy has been devolved to local authorities. There is a 3-year Empty Property Relief SG grant allocation of £608k in each of the years 2023-24 to 2025-26, with no specific conditions. An underspend in 2024-25 (£224k) was transferred to an earmarked reserve for business support / economic development purposes. A new Business Support Grants Scheme was approved by council during 2025-26. There may be an opportunity for 2025-26 awards (based on current applications) to be managed from the existing available reserve balance as at 31 March 2025, with no further transfer to reserves from the 2025-26 underspend. The forecast underspend in 2025-26 is circa. £330k (New Empty Property Relief Policy costs + dedicated officer post circa. £270k). Members may wish to consider earmarking the forecast 2025-26 underspend of circa. £330k to contribute to meeting the forecast 2026-27 budget gap. 2025-26 saving carried forward and earmarked to contribute towards 2026-27 budget gap. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 330 0 0 0 0 0 0 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS01 Service Delivery Area Fees and charges for parking Detail of Savings Proposal RIS collects income on behalf of the council for On street parking £32,000 and Off street parking £115,000 Total £147,000 The proposal would be to increase these fees and charges by 15%, generating additional £22,000 of income. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 22 0 0 22 X X 22 X XX
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS02 Service Delivery Area Fees and charges for bereavement services Detail of Savings Proposal RIS collects income on behalf of the council Cemeteries £41,000 and Crematorium £322,000 Total £363,000 The proposal would be to increase these fees and charges by 15%, generating additional £33,000 of income (6% already built into budget outlook). Some informal benchmarking with neighbouring Councils has taken place as summarised in the table below. Burials Local Authorites Adult New Lair Adult Interment Ashes New Lair Ashes interment Foundations Argyll& Bute £1,239 £1,052 £225 £237 £205 Glasgow City £1,542 £1,148 £711 £338 £235 Stirling Council £1,580 £1,408 £546 £381 £408 Highland Coucil £935 £1,003 £658 £234 £183 East Dunbartonshire Council £1,321 £1,088 £676 £516 £439 West Dunbartonshire Council £1,361 £1,044 £1,029 £230 £287 Inverclyde Council £1,273 £1,182 £701 £197 £213 Average £1,322 £1,132 £649 £305 £281 %age difference between ABC and Average 7% 8% 189% 29% 37% Crematoria Local Authorities Adult Cremation Direct Cremation Argyll& Bute £1,034 £721.00 Glasgow City £886 £397 Stirling Council NIL NIL Highland Council £1,003.00 £820 East Dunbartonshire Council NIL NIL West Dunbartonshire Council £993.00 £553 Inverclyde Council £925.00 £492.35 Average £968 £597 %age difference between ABC and Average -10.54% -31.71% The information outlines that there is scope for increasing fees and charges relating to burials, however, ABC is already the highest charging council for cremations and therefore it is suggested that Council may wish to only focus on increases above inflation for burials.
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Classification: OFFICIAL This demonstrates that, whilst there is scope for increasing fees and charges relating to burials, ABC is already the highest charging council for cremations. Council would need to give consideration as to whether the fees should be increased by 15% for both burials and cremations and the impact that may have. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count Burial 4 0 0 4 0 0 4 0 0 Cremation 29 0 0 29 0 0 29 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Services Ref: RIS07 Service Delivery Area Ports and Harbours Detail of Savings Proposal This saving proposes the introduction of two new charges for out of hours rope-handling services at Campbeltown Harbour, specifically targeting commercial vessels. The new charges are recommended to come into effect from 1 April 2026. The charges will be applied each time a commercial vessel arrives at or departs from the harbour. This ensures that all users of the service contribute to the costs associated with the provision of rope-handling, particularly in instances where services are required outside normal working hours or on public holidays. By introducing these charges, the Council aims to align its operational practices with those of other commercial ports within the region. This harmonisation is intended to ensure consistency across the area and to enable the Council to recover costs incurred from providing rope-handling services during periods that attract higher operational expenses. It is anticipated that the implementation of these new charges will generate approximately £35,000 per annum in additional income for the Council. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 35 0 0 35 0 0 35 0 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Customer Support Services Ref: CSS01 Service Delivery Area Customer Engagement Team Saving Target Current 2025/26 Budget is £ 1,660k of which £201k is uncontrollable (ICT and Blue Badge Contracts), leaving £1,459k controllable. 15% of that would give a savings target of £219k Detail of Savings Proposal (slightly amended following statutory consultations) 1. Close Service Points to walk in customers and move to an appointment only system, retaining offices solely as statutory registration offices (which bring in £330kpa income) and by appointment support and application processing hubs for vulnerable and digitally excluded customers. 2. Move all phone and email traffic currently handled by CSPs into CSC, except emergency backup. This would reduce initial customer service response standards, but they would still be well within acceptable norms. 3. Surrender additional income expected from Ceremony fee increases mandated by Scotgov. The above would: • Allow a more efficient use of resources as currently circa 15% of the Customer Engagement Team budget is spent servicing the needs of face-to-face customers and under 3% of all customer interactions are done face-to-face. This is because officers need to be at counters at defined times, even when there is little footfall. An appointment system allows a more flexible allocation of resource, whilst still ensuring a supportive face to face service for customers requiring it. 76% of all customer interactions are now done digitally and the Contact Centre and appointment only Service Points will service the remainder. • Allow us to reduce FTE in CSPs by the amounts noted below and would save £209,846k • The balance of £9k would come from additional registration income as NRS will be increasing marriage registration fees, which have been frozen for a number of years. Service Point/CSC Current FTE Proposed Reduction Remaining FTE Average F2F traffic per Month FQ1-3* Registration Events 2024 & 2025 Campbeltown 2.7 0.7 LGE6 2.0 150 226 & 217 Dunoon 2.8 0.5 LGE6 2.3 137 454 & 460 Helensburgh 4.5 0.8 LGE6 3.7 202 803 & 767 Islay 2 0.4 LGE7 0.2 LGE9 1.4 36 110 & 101 Lochgilphead 3 1.0 LGE6 2.0 94 374 & 328 Mull 1.7 0.7 LGE6 1.0 46 107 & 113 Oban 3.5 0.2 LGE6 3.3 155 472 & 540 Rothesay 1.5 0.5 LGE6 1.0 111 182 & 170 Tiree 0.4 0.4 LGE7 0 3 23 & 25 CSC** 10.4 0.4 LGE6 10 N/A N/A Total 32.5 4.8 LGE6/0.8 LGE7/0.2 LGE9 8 Headcount 26.7 933 2751 & 2721 * Includes walk-in and by appointment face to face customers (approx 6% are by appointment). **CSC Reduction is from staff who have voluntarily adopted reduced flexible working hours.
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Classification: OFFICIAL Saving Calculation (Based on current salary templated costs +3.5% for 26/27 uplift): Grade / Number SAVING LGE6 4.8 FTE £170,592 LGE7 0.8 FTE £29,831 LGE9 0.2 FTE £9,423 Additional Ceremony Income, Funeral Income and Sundries £14,000 Total Saving £223,846 Risks: 1. A more evolutionary transition of resources from face to face into digital development resources had been planned and so taking the totality of efficiencies for budget savings jeopardises the pace of digital transformation. 2. Moving from an on demand to an appointment based service does make it more difficult for more vulnerable customers to readily access council services – as noted in the Integrated Impact Assessment. Footfall is however now below 1000 a month across the CSP estate and the proposal is not to entirely close offices (except Tiree which is already closed), but to move to a more sustainable appointment only service. We also have a Community Service Point offering following the successful pilot at Cove and Kilcreggan, which will be promoted to encourage take up. 3. We will have less resilience in communities in the event of another large scale emergency such as Covid. Current Data Regarding Activity at Service Points and Other Contact Channels: Mediated transactions are those requiring a human agent input (phone, email, face to face) Mediated transactions are just under 24% of the total from FQ1-3 and of the total just 3% are Face to Face (14,990 transactions out of 485,286). However single customers often do multiple transactions at each visit, so the number of customers visits (footfall) over FQ1-3 to all CSPs was 8,400 or 933 per month. An approximate cost per face to face customer visit is £24.34. (£1.92 for digital and £3.96 for other mediated). Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count £224 5.8 FTE 8 £224* 5.8 FTE 8 £224* 5.8 FTE 8 • Assumes nil inflation and steady income from marriage ceremonies.
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Classification: OFFICIAL 2025-26 BUDGET PREPARATION – SAVING OPTION Head of Customer Support Services Ref: CSS02 Service Delivery Area Communications Saving Target Controllable budget £312k. (15%) (Staff = £295,098 / Other = £17,159) Detail of Savings Proposal Immediate term – 11.25% of budget Remove part time LGE10 Research and Insight Officer post - £27,401 - No one single contact for producing area-wide updates on population statistics for the area, however, we now have a new data hub and this new resource gives access to useful data relating to the Argyll and Bute economy, cost of living, demography, and the most recent population census. - the Comms Team would reduce time spent on posting information to social media to create time to collate/analyse social media data on what works (one week per month would have fewer posts to use the planning/production time for this analysis instead as it helps shape effective content) - limited Argyll and Bute representation on council meetings about population stats From staffing budget (no impact on staff) - £11,000 - This is the residual from changing a LGE11 post to two part time LGE10 posts Longer term Budget is largely employee costs: Manager, Senior Comms Officer, 2 x Comms Officers, part time graphic designer. Currently looking into if/how AI or other technology opportunities could help reduce the time we spend on various tasks, but if reductions are required in future, knowing how best to make them will overall depend on priorities for the council and what most needs comms support. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 38 0.5 1 38 0.5 1 38 0.5 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Customer Support Services Ref: CSS04 Service Delivery Area Human Resources and Organisational Development Saving Target 15% of controllable budget £365, 188 Non controllable budget includes corporate contracts/ Systems and social work training budget which is managed by the social work training board and there are currently proposals to remove it from the HROD budget and transfer it to social work Detail of Savings Proposal The purpose of the HR and OD team is to ensure employee experiences are positive and that the council as an employer creates an environment where employees can thrive and deliver their best work. Some of the risks associated with reducing the level of service provided by the HR and OD team include: - Increasing sickness absence rates and cost of sick pay - Increasing litigation and cost of legal processes/settlements - Widening the capacity and skills gap to support rapid transformation across services The HR and OD team have digital transformation projects in progress which are set to transform the way in which employees and managers access information, process data and manage the employment relationship. Additionally, a planned programme of savings linked to this, and a refocussing of OD implemented in 2024 has been identified with £45k already delivered in 25/26 and another £105k planned for delivery over the course of 26/27 and 27/28. On request for a review of potential savings the following increased savings (inclusive of already planned savings) are being proposed. Calculations include additional 7% pay award on current salary template costings In 2026/27, it is proposed to remove 0.76 FTE in relation to a reduction in post hours on two SLGE 6 posts in the HR Operations Teams on a recurring basis totalling £10,000 and £25,000 on a recurring basis in non-staffing savings from various budgets including additional reduction in training budget, travel and subsistence etc delivering a total recurring saving of £35,000. In 2027/28, an additional proposed reduction of 1.39 FTE in relation to the removal of a 0.5 FTE SLGE 9, removal of a 0.74 SLGE 6 and a 0.15 FTE reduction in hours for a SLGE 9 on a recurring basis totalling £61,000 and £95,000 on a recurring basis in relation to further savings based on review of realised outcomes from HROD digital project and ongoing refocussing OD activities. This will generate a further saving of £156,000 in addition to the £35,000 recurring from 2026/27 bringing the cumulative total to £191,000. Future savings potential is currently unknown although exploration of shared service arrangements for some HR and OD activities over the next two years at national level and via the ongoing exploration of a Single Authority Model could present opportunities for efficiencies and economies of scale.
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Classification: OFFICIAL Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 35 0.76 2 191 TBC TBC 191 TBC TBC
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Classification: OFFICIAL Head of Development and Economic Growth Ref: DEG08 Service Delivery Area Development Policy and Housing Detail of Savings Proposal Propose to transfer salary costs to the Strategic Housing Fund of staff who are currently working almost entirely on projects relating to the delivery of housing. Two members of staff are identified who currently lie outwith the Development Policy and Housing team but are currently working under the direction of the Development Policy and Housing Manager on housing related tasks. Transferring the salary costs of these staff to the SHF provides the equivalent saving to the Council. The Corporate Support Manager, currently residing within the Chief Executives Service is working full time on housing delivery issues. This post is an SLGE13, and the salary mid-point for 26/27 including Oncosts is £77,897. The Arc Regeneration Project Manager, currently residing within DEG is currently working almost full time on the delivery of housing related issues, this specifically involves the development of new short term let planning control areas, the development of Phase 4 at Dunbeg, and contributing to other housing delivery issues including the Oban Strategic Development Framework, and Ganavan footpath improvements. The post is an SLGE12, and the salary mid-point for 26/27 including Oncosts is £69,149. NB: There is an assumption that the current working arrangements / areas of focus, are continued for this arrangement to make sense. It is recognised that the current staff structure and job titles do not neatly reflect the ongoing operational arrangements. It may be necessary to consider a re-structure to make this arrangement permanent, but that will of course require consultation with HR, the employees involved, and potentially creation of new posts with new job evaluations. This would be a medium-term solution if required. The Arc Regeneration Manager could alternatively be funded by the Lorn Arc TIF funding, however this would need to be carefully considered in terms of the ability of the TIF scheme to finance the proposed infrastructure developments going forwards. Ten years of the Arc Regeneration Project Manager costs would equate to £778,970 plus any inflationary costs and this is a significant amount in terms of TIF expenditure. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 147 2 2 147 2 2 147 2 2
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Education Ref: EDU - 03 Service Delivery Area Early Years Detail of Savings Proposal Remove 2 Early Years Lead posts which are not required due to reducing ELC rolls in some areas. These posts are currently vacant, therefore no impact on current staffing. Risk is, if Scottish Government further expands Early Learning and Childcare entitlement the service may not have the capacity to support delivery. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 82 2 2 82 2 2 82 2 2
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Education Ref: EDU - 04 Service Delivery Area Lifelong Learning and Support Detail of Savings Proposal Remove a 0.4fte Teacher Post at end of current contract period. This post supported schools with English as an Additional Language, inclusion, UNCRC including Rights Respecting Schools. With the legislation now fully in place, and schools understanding their responsibilities along with all schools now on the Rights Respecting School Journey, capacity has been created within the system. These responsibilities will sit with current permanent posts and this temporary post will not be required from June 26. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 18 0.4 1 24 0.4 1 24 0.4 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Education Ref: EDU - 05 Service Delivery Area Wellbeing, Inclusion and achievement Detail of Savings Proposal Principal teacher of wellbeing post which has been developing the work from an education perspective to enable the delivery of the single point of access for accessing support for neurodivergent children young people and their families. This temporary post will have delivered on this work and will come to an end in July 2026. Part saving in 2026-27 and full saving from 2027-28. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 46 1 1 74 1 1 74 1 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Education Ref: EDU - 09 Service Delivery Area Early Years Teachers Detail of Savings Proposal The service currently allocates teacher time to every ELC including partner providers. Since the development of 1140 hrs the EY workforce increasingly includes graduate practitioners and highly skilled practitioners. As a result, the service can offer up the equivalent of 1.66 FTE Teacher Posts from our smallest settings where the adult child ratio is already very good. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 108 1.66 15 108 1.66 15 108 1.66 15
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Financial Services Ref: FS01 Service Delivery Area Revenues and Benefits - Benefits Detail of Savings Proposal Opportunity through managed migration to Universal Credit from Housing Benefit to release 2 FTE (1 SLGE9 and 1 SLGE6) from process efficiencies and increased productivity - 1 post vacant from November 2025 (SLGE6), the other would require to be made redundant (SLGE9 expected to be voluntary). Trade Union consultation has taken place, targeted voluntary redundancy. Potential redundancy cost implications (expected to be minimal). 2025-26 part year saving from November 2025 (£10k) carried forward and earmarked to contribute towards 2026-27 budget gap. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 90 2 2 80 2 2 80 2 2
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Financial Services Ref: FS02 Service Delivery Area Revenue and Benefits – Council Tax Admin Detail of Savings Proposal Opportunity to secure efficiency savings from within Council Tax Admin team. A reduction of 0.6 FTE SLGE6 post proposed. (Long term sickness absence currently being managed from within existing resources.) This post would require to be made redundant. Trade Union consultation has taken place, targeted voluntary redundancy. Potential redundancy cost implications (expected to be minimal). Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 20 0.6 1 20 0.6 1 20 0.6 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Legal and Regulatory Support Ref: LRS04 Service Delivery Area Legal Services Detail of Savings Proposal Removal of Senior Solicitor post. Postholder was on phased retirement and finished December 2025. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 14 0.2 1 14 0.2 1 14 0.2 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Legal and Regulatory Support Ref: LRS05 Service Delivery Area Legal Services Detail of Savings Proposal Reduction in Solicitor LGE11 post by 14 hours. Following a period of special leave the postholder has requested a flexible working arrangement with a move to 21 hours. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 25 0.4 0 25 0.4 0 25 0.4 0
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Legal and Regulatory Support Ref: LRS06 Service Delivery Area Legal Services Detail of Savings Proposal We propose to review the current clerical support hours as this post is currently vacant. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 25 0.9 1 25 0.9 1 25 0.9 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS03 Service Delivery Area Public conveniences Detail of Savings Proposal Argyll and Bute Council operates 57 dedicated public conveniences across one of the largest and most rural local authority areas in Scotland. The facilities and services have consistently been highlighted by communities as an important and valued part of local infrastructure - particularly in areas that support tourism, long-distance travel, and ferry-based connectivity. However, they are not a statutory service. The public convenience estate has a projected net operating cost of just over £0.331m for 2025-26. This includes staffing, utilities, supplies, and income offsets. This proposal is aimed at withdrawing council involvement in toilet facilities, whether by closure, sale or community asset transfer. Proposals will require significant engagement with stakeholders prior to implementation to identify where sale or transfer could take place and therefore a target saving of £100k has only been assumed at this stage. There has been investment in facilities, for example on Iona, as part of the harbour upgrades at these locations. However, from local knowledge, and from feedback from elected members and communities, many of our facilities are in poor condition. It would take a signficant amount of capital to bring all the toilet facilities up to an acceptable standard. The financial challenges facing the council mean that we need to review existing provision and identify how we can reduce expenditure by either • Introducing alternative service provision (community asset transfer / sale / lease to local business / comfort scheme), or • Where this is not possible, agree which facilities to close. This has been identified through the review of Roads and Infrastructure in the Asset Management workstream. It is anticipated that any proposals to change existing service provision will result in a negative response from our stakeholders, especially those with particular health conditions A comprehensive comms strategy outlining the reasons for the proposals, the alternatives being considered (Community Asset Transfer, partnerships with local businesses, increased use of existing publicly accessible council buildings). Identifying capacity within the council to support communities to take on the running of public conveniences through sale, Community Asset Transfers, licenses to occupy, or leases.
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Classification: OFFICIAL The proposals are at a very early stage, and the mitigations mentioned above have not yet been developed. Public engagement without these mitigations in place will be extremely problematic. A target saving of £100,000 has been entered for financial year 2026-27, however, as noted above, the proposals are at an early stage and if Council are minded to accept this saving, it will be a target saving with further proposals and detail brought forward to Council during the year. There will remain a risk that the saving couldn’t be delivered in full in year, however, every attempt would be made to deliver it. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 100 4.0 Circa 12 100 4.0 Circa 12 100 4 Circa 12
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS04 Service Delivery Area Administration costs Detail of Savings Proposal Roads and Infrastructure Services currently have a budget of £366,000 for admin costs. This proposal would reduce the admin resource by 1 x SLGE8 post (1 FTE), releasing a saving of £36k in 2026-27 (part year), rising to £44k from 2027-28 (full year). Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 36 1 1 44 1 1 44 1 1
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS05 Service Delivery Area Amenity Service Wardens Detail of Savings Proposal The proposal involves the removal of the Amenity Service Environmental Wardens. This will require the downscaling or stopping of our environmental enforcement activity, or the reconfiguration of enforcement activity within Roads and Infrastructure Services, e.g parking enforcement staff becoming more involved in environmental enforcement, transfer of some enforcement activity to regulatory services. This will involve the removal of 5 posts at SLGE7, providing a saving of £178k in 2026-27 (part year), rising to £214k from 2027-28 (full year). The activities currently carried out by the wardens are as follows • Removal of abandoned vehicles • Fly tipping investigation and enforcement • Commercial waste enforcement • Dog fouling enforcement and education • LEAMS inspections • Management of the assisted pull out service • Pest control • Liaison with traveller encampments Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 178 5 5 214 5 5 214 5 5
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS06 Service Delivery Area Roads Winter Maintenance Detail of Savings Proposal The budget for winter maintenance for 2025/26 is £2.662m. This proposal would involve a reduction in winter maintenance by 10%, delivering a saving of £0.270m. This will bring us closer to our comparator rural councils, and also mitigate against any reduction in the capital budget for road resurfacing. A report went to EDI Committee on 11 September and the Committee endorsed that a further review of the winter maintenance policy is undertaken prior to the 2026/27 winter maintenance season which includes a review of the total percentage of the road network that is currently treated and, recognising this is 10% higher than the average for the rural group authorities, whether efficiencies on this can be achieved. With a report to Committee during early summer 2026. Reduction in staffing cannot be confirmed at this stage until review is carried out. The saving at this stage represents a target saving that will be further refined as part of the review to be reported during 2026. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 270 tbc tbc 270 tbc tbc 270 tbc tbc
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS08 Service Delivery Area Parks Detail of Savings Proposal The total operational budget for Parks across Argyll and Bute is £989,176. This does not include £248,300 HQ overhead allocation. This proposal is to reduce expenditure by 15% where there is sufficient capacity to do this, i.e. not on small islands where budget is part of a post – Islay, Coll, Colonsay. The saving would equate to 3 FTE at grades SLGE4 and SLGE5 which would be achieved by reducing 1 FTE in each of the Mid Argyll, Lorn and Helensburgh and Lomond areas. Activities reduced would include seasonal bedding and grass cutting. The staffing levels in these areas is currently as follows Mid Argyll - 4FTE Oban and Lorn – 5FTE Helensburgh and Lomond - 9FTE The parks establishment on Bute is only 2.3FTE (5 employees), which was considered to be too small to reduce any further. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 88 3 3 106 3 3 106 3 3
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Classification: OFFICIAL 2026-27 BUDGET PREPARATION – SAVING OPTION Head of Roads and Infrastructure Ref: RIS09 Service Delivery Area Street Sweeping Detail of Savings Proposal The operational budget for street sweeping across Argyll and Bute is £895k. This proposal would see the budget reduced by £147k in 2026-27 (part year), rising to £176k from 2027-28 (full year), through a reduction of 5 FTE across Helensburgh and Lomond, Lorn, Mid Argyll and Bute and Cowal. Saving 2026-27 2027-28 2028-29 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 147 5 5 176 5 5 176 5 5
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APPENDIX 5 SERVICE SUMMARY OF BUDGET POSITION 2026-27 Department Service 2025-26 Budget Other Base Budget Adjustments Settlement Commitments Updated Base Budget Employee Budget Changes Non-Pay Inflation - Inescapable Cost and Demand Pressures Live Argyll Management Fee Adjustment Measures to Balance the Budget Social Work Pressures Absorbed by HSCP Adjustment to IJB Allocation 2026-27 Draft Budget £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Council Departments: Chief Executive's Unit Chief Executive 1,014 0 0 1,014 218 0 0 0 (25) 0 0 1,207 Executive Director (Douglas Hendry) Executive Director (Douglas Hendry) 56 0 0 56 73 0 0 0 0 0 0 129 Executive Director (Douglas Hendry) Head of Commercial Services 10,565 (20) 0 10,545 1,387 204 0 (193) (546) 0 0 11,397 Executive Director (Douglas Hendry) Head of Education 126,151 0 162 126,313 7,568 494 1,064 0 (1,305) 0 0 134,134 Executive Director (Douglas Hendry) Head of Legal and Regulatory Support 21,604 0 0 21,604 692 431 198 0 (335) 0 0 22,590 Executive Director (Kirsty Flanagan) Executive Director (Kirsty Flanagan) (440) 0 0 (440) 85 0 0 0 0 0 0 (355) Executive Director (Kirsty Flanagan) Head of Customer Support Services 9,638 0 0 9,638 1,180 122 177 0 (569) 0 0 10,548 Executive Director (Kirsty Flanagan) Head of Development and Economic Growth 8,531 0 0 8,531 1,398 89 180 0 (653) 0 0 9,545 Executive Director (Kirsty Flanagan) Head of Financial Services 7,217 0 121 7,338 828 50 299 0 (160) 0 0 8,355 Executive Director (Kirsty Flanagan) Head of Roads and Infrastructure Services 38,150 2,810 27 40,987 3,258 683 2,323 0 (1,824) 0 0 45,427 Non Departmental: 0 0 0 0 0 Joint Boards Joint Boards 1,525 0 0 1,525 0 47 255 0 0 0 0 1,827 Other Operating Income & Expenditure Elected Members 1,502 0 0 1,502 142 13 0 0 0 0 0 1,657 Other Operating Income & Expenditure Sundry Services 2,115 (104) 0 2,011 (42) 53 0 0 (100) 0 0 1,922 Other Operating Income & Expenditure Unfunded Pensions 1,554 0 0 1,554 0 0 0 0 0 0 0 1,554 Non Controllable Costs: 0 0 0 0 0 Insurances 2,757 0 0 2,757 0 491 0 0 0 0 0 3,248 Non Domestic Rates 5,469 0 0 5,469 0 (189) 0 0 0 0 0 5,280 Apprenticeship Levy (Council) 632 0 0 632 35 0 0 0 0 0 0 667 Capital Charges (loans charges) 8,258 95 0 8,353 0 0 0 0 (619) 0 0 7,734 0 0 0COUNCIL TOTAL 246,298 2,781 310 249,389 16,822 2,488 4,496 (193) (6,136) 0 266,866 Health and Social Care Partnership: Social Work Chief Officer (2,310) 0 3,292 982 50 0 0 0 0 (5,208) 6,286 2,110 Social Work Acute and Complex Care 59,026 0 153 59,179 2,627 0 0 0 0 0 0 61,806 Social Work Children & Families 7,808 0 0 7,808 802 0 0 0 0 0 0 8,610 Social Work Health and Community Care 16,951 104 0 17,055 1,659 0 0 0 0 0 0 18,714 Social Work Strategic Planning and Performance 516 0 0 516 72 0 0 0 0 0 0 588 0 0SOCIAL WORK TOTAL 81,991 104 3,445 85,540 5,210 0 0 0 0 (5,208) 6,286 91,828 Rounding TOTAL 328,289 2,885 3,755 334,929 22,032 2,488 4,496 (193) (6,136) (5,208) 6,286 358,694 Funding: Scottish Government Funding 275,901 Council Tax Income 75,106 Saving options funded by existing earmarked reserves 950 Savings options funded by expected 2025-26 underspends to be earmarked 540 Transfer from reserves 6,197 OVERALL FUNDING SURPLUS / (GAP) 0
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Appendix 6 FUNDING REQUESTS 1. Introduction 1.1 Funding requests have been received to be considered as part of the Budget as outlined below. 2 Argyll and Isles Tourism Cooperative (AITC) 2.1 Argyll & Isles Tourism Cooperative (AITC) seeks continued investment of £75,000 from Argyll and Bute Council to deliver the 2026/27 destination marketing programme, enabling a scale of activity that maximises economic return from a sector that is critical to local employment, rural communities and supply chains, yet remains operationally fragile. Funding at this level allows AITC to move beyond core visibility and deliver a more ambitious, fully integrated programme focused on extending the season, spreading visitors across the destination where capacity exists, strengthening national and international reach, and providing enhanced support to tourism businesses navigating rising costs, transport challenges, and policy change 2.2 Council support, combined with membership income and external grants, has enabled AITC to deliver its strongest ever marketing reach in 14 years, demonstrating value for money from Council investment through shared, destination-wide reach that individual businesses could not achieve alone 2.3 The proposed 2026/27 programme focuses on extending the season, spreading visitors responsibly across the destination, and increasing economic yield, in line with national tourism policy. Activity will continue to be data-led, using VisitScotland visitor insights to target high-value leisure markets, including older travellers, families, international visitors, intergenerational groups, and experience-seeking younger adults 2.4 Effective design of a Visitor Levy for Argyll & Bute will depend on meaningful industry representation to ensure the scheme is transparent, proportionate, compliant and workable across a geographically large, rural destination with a diverse accommodation portfolio. Continued support for AITC enables a consistent, informed point of engagement between the Council and the tourism sector, helping to identify practical impacts, mitigate unintended consequences and build business confidence and compliance. 2.6 The £75,000 Argyll and Bute Grant is anticipated to be apportioned as follows: ACTIVITY BUDGET OUTCOMES PR, media – destination positioning / print 5,000 • Reach new audiences. Travel Trade Activity 5,000 • Reach new audiences.
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Bloggers, Vloggers, Influencers 10,000 • Reach new audiences. • Extend the season. Paid social promotion 2,500 • Boost marketing reach across all campaigns. New format, license-free photography and video 5,000 • Assets that can be shared with Visit Scotland, A&BC & and AITC Members. SEO Copywriting and new content development 10,000 • Insight-based new content across all Wild About Argyll & Love Oban areas. Integrated, data-led destination campaigns aligned to agreed visitor trends & requirements 32,500 • Data-based campaigns positioning Argyll against key visitor trends. Business support initiatives 5,000 • Continuation of skill development for member businesses. TOTAL £75,000 2.7 The request is for funding of £75,000 and further information related to this request has been emailed to all Members on 12 February 2026. It is recommended that Council consider approving this request of £75,000 and identify how this will be funded. 3 Culture, Heritage and Arts Assembly, Argyll and Isles (CHARTS) 3.1 The Culture, Heritage and Arts Assembly, Argyll and Isles (CHARTS), is requesting £95,000 of financial support from Argyll and Bute Council for the year 2026-27 which will secure critical strategic development activity. This will include to enable the continued and complex management of Council owned assets/collections, which has included very successful methodologies to date. CHARTS will also increase its support to professional practitioners, culture venues and communities addressing a breadth of demographic issues faced, through being enabled to robustly upgrade the capabilities of our website with new digital technologies fit for strengthened, diverse and dynamic communication, empowering members and better matching need with resource. 3.2 Since 2020, CHARTS has generated an income in excess of £1.8m for the culture sector, building on a total of £400,000 support from Argyll and Bute Council across the same period. This demonstrates significant return on Council investment that has enabled CHARTS to continue its successful project delivery and grow reputation for the region. 3.3 The Board recognises that this request to the Council is higher than was able to be granted last year but it remains imperative that CHARTS upgrades its website capabilities as key function to sustaining the sector, as its original website operations system funded by the Council in Place Partnership with Creative Scotland (2019), is neither suitable nor secure to assist the
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organisation in generating increased income to help sustain the sector. As a charitable organisation with no physical home, its website is the virtual centre for all levels of communication. Reliant on grant aid, we have found funding for websites specifically difficult to access and the Board is sees this as a priority as the organisation develops in order to become more sustainable with plans to develop ecommerce and our visitor offer. 3.4 Delivery plans for 26/27 will continue to address challenging demographic need and align with the ambitions of Refresh, Argyll and Bute Council’s Economic Strategy (2024 – 2034). With a focus on partnership and collaboration across all areas of work, CHARTS delivers across four strategic key pillars: People, Place, Planet and Prosperity and the organisation develops creative approaches to attract interest in the region to secure investment. As a Placemaking organisation, CHARTS helps build the profile of the region as an attractive place to live and work. The organisation continually addresses challenges presented by rural poverty and deprivation including isolation and the decline in the economically active population, increasing engagement and work opportunities and building workforce skills for our members and stakeholders. CHARTS attracts highly experienced staff to project management roles, and promotes equal access to educational opportunity, project commissions and awards, supporting economic goals that help to sustain cultural businesses and creative ambition. 3.5 CHARTS purpose is to work towards a sustainable future for the important culture, heritage and arts business sectors which has been identified as a key economic driver with real growth potential. The scope of CHARTS current work and strategic plans offer wide-ranging impact for skills development, supporting young people and other sectors such as tourism and food and drink, which we have been able to demonstrate across recent years through collaborations and commissioning. Our work not only aligns with a key aim of the Council’s Refresh, Economic Strategy 2024-2034, but also other key national and local government strategies including the Visitor Economic Regional Growth Strategy, the Argyll and Isles Strategic Tourism Partnership Visitor Economy Recovery and Growth Strategy, and the Argyll and Bute Gaelic Language Plan to support the future sustainability of Argyll and Bute’s heritage and creative industries. Across recent years CHARTS impact to the care and protection of critical council owned heritage assets, has been substantial including for the Argyll Collection and Campbeltown Museum Collection, both of which have received support from Museums Galleries Scotland in the past 12 months. 3.6 The request is for funding of £95,000 and further information related to this request has been emailed to all Members on 12 February 2026. It is recommended that Council consider approving this request of £95,000 and identify how this will be funded. 4 MacTaggart Leisure Centre, Islay 4.1 MacTaggart Leisure Centre on Islay has benefitted from a £30,000 uplift in their Service Level Agreement payment over the last 3 years. Without this uplift it is
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unlikely that the business would have continued to remain open for the communities of Islay and Jura. 4.2 Islay and Jura Community Enterprise Ltd have written once again requesting an uplift of £30,000 for 2026-27. There continues to be financial pressures relating to utilities, chemicals and payroll costs. Electricity costs alone have increased by £9,000 from last year which has had a negative impact on the Centre. 4.3 The Centre are also going into another year with the Distillery waste heat pipe broken, resulting in much higher energy costs for oil. The engineer working on this fix has advised that it is not a quick fix and although they are in continual contact with them it is taking some time to go through the corporate channels. 4.4 The Board of Directors are taking steps to try and further reduce energy costs, looking at feasibility for wind power and procurement of energy suppliers. 4.5 In addition to the request for £30,000, which is critical to keeping the Centre open, engagement with Council officers has taken place in respect of the ongoing SLA and desire to review/update the agreement to offer a more sustainable solution. In the view of MacTaggart Leisure, achieving parity with other community pools would require increasing the payment to between £60,000 and £70,000, rather than the £30,000 initially requested. However, these discussions are ongoing, and forecasts are to be equitably reviewed. 4.6 Officers believe it would be beneficial to review the Service Level Agreements (SLAs) for the Community Pools to help establish a sustainable long-term funding position. This approach should reduce the need for additional in-year funding requests and prevent situations where the SLA payment is followed by separate funding applications. It would also support a clear and consistent method for managing annual increases. 4.7 It is recommended that Council consider approving the initial request of £30,000, identify how this will be funded and instruct officers to review the Community Pools SLAs during 2026–27. Officers would then report back to Council later this year with proposals for a future approach that could be implemented from 2027–28.