Revenue Budget Overview 2025-26 to 2029-30
Argyll and Bute Council · 20 February 2025
Back to Budget Pack — 20 February 2025 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 27 FEBRUARY 2025 REVENUE BUDGET OVERVIEW 2025-26 to 2029-30 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 2025-26. It also provides budget estimates for 2026-27 to 2029-30; 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 10/2024 was published on 12 December 2024 and provides detail of the provisional total revenue and capital funding allocations for 2025-26. The Council’s provisional General Revenue Grant is £254.995m in addition to Revenue Specific Grant of £4.539m. 1.3 Following the publication of Finance Circular 10/2024 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 on 27 February 2025, but I have reflected what I consider to be a reasonable estimate of the changes that are expected. This increases the General Revenue Grant for 2025-26 to £259.134m and £4.539m in specific grants. 1.4 The Cabinet Secretary for Finance and Local Government announced on Tuesday 4 February 2025 that Scottish Government has now agreed to provide an additional £144m to Local Government in respect of the Employer’s National Insurance increase and this funding represents 60% of direct staffing costs. This announcement was made to provide some certainty for councils as part of their budget setting. The increased cost is estimated to be £4.314m for 2025-26 (Council £3.450m and HSCP £0.864m). Based on the announcement it is estimated that we will receive £2.578m of funding. 1.5 On 29 November 2024 the Council received a letter from the Department of Environment Food and Rural Affairs (DEFRA) providing our authority’s estimated payment amount in respect of Extended Producer Responsibility in relation to Waste Packaging. Our estimated payment for 2025-26 is £3.847m. The final allocation will be confirmed in Autumn 2025. As it is unclear at this stage what requirements will be attached to this additional funding, in addition to not knowing the final allocation until Autumn 2025 it is recommended that only a proportion of the funding is used to support the 2025-26 budget. There is a non-pay inflation pressure for waste/landfill tax for £0.790m and a cost pressure for BMW Ban for £0.558m and it is recommended that £1.348m is used
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for these purposes with the remaining £2.499m carried forward to 2026- 27. 1.6 The Council Tax budget for 2024-25 was set at £63.278m. Growth has been increased for 2025-26 to 0.75% to help rebase the position following a review undertaken by the Assessor at Dunbartonshire and Argyll and Bute Valuation Joint Board. 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 0.75% growth in 2025-26 amounts to an estimated increase of £0.472m. 1.7 The budget for 2024-25 has been rolled forward into 2025-26 and the main changes to the 2025-26 base budget are summarised below: • Removal of cost pressures relating to 2024-25 only of £0.130m • Removal of one-off Management/Operational savings of £1.694m • Release of Contingency back to general fund in 2024-25 of £0.200m • Adjustment to re-base contribution to Joint Boards of £0.114m • Adjustment for re-basing NDR (unbudgeted 2024-25 Rate poundage increase) of £0.300m • Adjustment to right-size ferries budgets ensuring income and expenditure match as this is specific grant funded £0.037m • Adjustments relating to pay within 2024-25 for Children’s Social Work (Education service) - £0.063m • SJC Pay Award 2024-25 - £2.636m • Pay Award Elected Members 2024-25 - £0.033m • Settlement Directions (Council services) of £2.992m. 1.8 The employee cost changes amount to £8.686m. This relates to estimated pay inflation for 2025-26, increments, employee base changes and the increase to employer’s national insurance. 1.9 Only unavoidable/inescapable inflation has been included within 2025- 26 and this amounts to £2.978m. This includes utilities, catering purchases, contract inflation, insurances and landfill tax. 1.10 There are a number of cost and demand pressures for 2025-26, amounting to £4.771m summarised as follows: • ASN Support - £0.202m • Maintenance/Repair of School Estate - £0.360m • Additional Staff Required in Hostels as per Care Inspectorate - £0.055m • Education ICT Network Infrastructure - £0.295m • Airports Maintenance - £0.040m • Increase to borrowing costs as a result of investment agreed at February 2024 - £0.282m • Universal Credit HB Admin Grant - £0.040m • NDR Reliefs - £0.068m
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• Compliance with BMW Ban - £0.558m • Bus Transport Contracts - £1.735m • Roads and Amenity Services Income Saving no longer achievable - £0.100m • School Transport for ASN pupils - £0.500m • Loans Charges for Weather Incident - £0.080m • Insurance premium increases - £0.309m • Valuation Joint Board requisition increase - £0.147m. 1.11 The revised payment to the Health and Social Care Partnership, reflects 2024-25 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 Health and Social Care Partnership. Due to the significant financial pressure that the Health and Social Care Partnership is facing as a result of the increasing number of older persons and the increased demand, it is recommended that Council consider passing over a further increase to the HSCP, this will pass over a share of the additional funding that the Council has received without conditions attached. It is recommended to pass over £0.370m equivalent to 1% pay award to ensure that the HSCP have sufficient budget to match the public sector pay policy for social work staff as well as £0.346m in relation to the anticipated shortfall in the Employer’s National Insurance funding. The revised payment amounts to £81.492m. 1.12 The budget gap prior to any measures to balance the budget is a deficit of £10.938m in 2025-26. 1.13 There are a number of measures to balance the budget that have previously been agreed at the Council’s budget meeting on 22 February 2024 which have a net effect of reducing the 2025-26 budget gap by £0.283m. 1.14 During 2024-25 a review was undertaken of all earmarked reserves to establish whether they were still required for the originally intended purpose. The results of the review were presented to Council on 26 September 2024 where Members agreed to release £1.558m of existing earmarked reserves back to the General Fund to help bridge the budget gap in 2025-26. This is one-off in nature and therefore reduces the gap in 2025-26 only. 1.15 There are a number of other measures to balance the budget that are for Council approval, summarised as follows: • General inflationary increase of 6% to fees and charges resulting in £0.363m of additional income. • New management/operational savings amounting to £2.102m. • New policy options savings amounting to £0.991m. 1.16 The budget gap after the measures to balance the budget is a deficit of £2.471m in 2025-26.
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1.17 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 1.16 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 to 8.9%. 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. 1.18 The budget gap over the period 2026-27 to 2029-30 across each scenario is summarised in the table below. Budget Gap 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Total £000 Best Case (5,907) (7,343) 262 (344) (13,332) Mid-Range (9,528) (10,373) (4,424) (5,212) (29,537) Worst Case (16,131) (16,763) (10,981) (12,124) (55,999) 1.19 The Council are asked to consider funding requests summarised within Appendix 8. 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 27 FEBRUARY 2025 REVENUE BUDGET OVERVIEW 2025-26 to 2029-30 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 2025-26. It also provides budget estimates for 2026-27 to 2029-30; 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 2025-26 to 2029-30 have been presented to Members throughout the year. Reports were presented to the Policy and Resources Committee on 9 May 2024, 15 August 2024, 10 October 2024 and 5 December 2024. 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 4 December 2024 and the Local Government Finance Circular 10/2024 was published on 12 December 2024. This circular provides detail of the provisional total revenue and capital funding allocations for 2025-26 (one year only). 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 2024 presented to the Scottish Parliament, currently scheduled for the end of February 2025. 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 £15 billion which includes: • A further £524.9 million of funding has now been baselined as General Revenue Grant, as part of our commitment under the Verity House Agreement to review ring-fenced funding; • Additional General Revenue Grant of £289 million to support local priorities; • An additional £15 million to support the expansion of Free School Meals; £125 million for adult social care workers in commissioned services; • £10 million to support provision of Free Personal and Nursing care;
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• An additional £25.7 million to improve pay for early learning and childcare workers; • An additional £41 million investment to maintain or restore teacher numbers to 2023 levels; • An additional £28 million for additional support for learning; • £33 million to support development of people working in children’s social work; • £40 million to tackle the climate emergency; • An additional £10 million to improve play parks for children; and • An additional £8.6 million resource and £20 million capital to improve inter-island connectivity. Scottish Government Funding for Argyll and Bute Council 3.1.3 The General Revenue Grant for 2024-25 noted within the February 2024 budget pack was £240.804m. The General Revenue Grant for 2025-26 is £254.995m as outlined within Finance Circular 10/2024. There is also £4.539m of specific grants. 3.1.4 Following the publication of Finance Circular 10/2024 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 on 27 February 2025, but I have reflected what I consider to be a reasonable estimate of the changes that are expected. This increases the General Revenue Grant for 2025-26 to £259.134m. The specific grants remain unchanged at £4.539m. 3.1.5 The table below represents the changes in General Revenue Grant between 2024-25 and 2025-26: £000 £000 Funding Budget 2024-25 as per budget pack 240,804 SG Policy Commitments – Health and Social Care: Children’s Social Care Pay Uplift 2024-25 180 LG Pay 2024-25 339 519 SG Policy Commitments – Council: No-one left behind 63 Council Tax Freeze 2,860 £62.7m Additional Funding (linked to Council Tax Freeze) 1,109 Children’s Social Care Pay Uplift 2024-25 63 Islands Cost of Living 705 Climate Intelligence Service 2 Building Standards Hub (26) SNCT Pay Offer 2024-25 456 Ed Psychology Refund 8
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Teachers Pensions (change to figure previously estimated in budget pack) 1,389 Scottish Welfare Fund 258 LG Pay 2024-25 1,032 Teacher Numbers 2,125 School Milk 15 Ukraine 91 Teacher Induction 31 Temporary Accommodation 15 10,196 Rounding (2) Updated Funding 2024-25 (FC 10/2024) 251,517 Updating of Indicators 882 Change to the floor (2,951) Indicators Removed/Reduced (64) One-off funding Removed (599) SG Policy Commitments – Health and Social Care 2,601 SG Policy Commitments – Council 700 Teacher Numbers – share of additional £41m 615 Additional Support for Learning – share of £28m 392 Teachers Pay – Full year effect 2025-26 223 Islands Cost of Living Fund Increase 17 Changes Column 5,801 Rounding 1 Estimated Settlement 2025-26 259,134 3.1.6 If you compare the settlement of £259.134m to the finalised cash funding in 2024-25 the funding has increased by £7.617m – in cash terms. However, this is not a like-for-like comparison as there is some funding in 2024-25 that was one-off and a full year effect of the teachers pay increase to be reflected. The like-for-like cash terms comparison is an increase of £7.993m or 3.19% £000 £000 2024-25 Settlement 251,517 Ukraine (91) Temporary Accommodation (15) Island Cost of Living (Community Share) (141) Scottish Welfare Fund Top Up (258) No-one left behind (63) Teachers Induction (31) 2024-25 Settlement for comparison 250,918 2025-26 Settlement 259,134 Teachers Pay Full Year Effect (223) 2025-26 Settlement for comparison 258,911
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Increase 7,993 Increase % 3.19% 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 (£2.601m, £0.700m, £0.615m and £0.392m) the increase reduces to £3.685m or 1.47% for core services. 3.1.8 In considering the assumption related to future years funding, I have reflected on the funding change in the last 5 years (at budget time) after accounting for new policy commitments: • 2021-22 funding increase of 0.39%. • 2022-23 funding decrease of 0.01% • 2023-24 funding increase of 0.09% • 2024-25 funding decrease of 0.98% • 2025-26 funding increase of 1.47% 3.1.9 The level of increase for 2025-26 was unexpected and it was significant in comparison to previous years, however, it is difficult to suggest that we should assume increases like this in future years. As our Council relies on the floor mechanism, our funding is always lower than the Scottish average. The floor percentage was set at 0.75% this year, resulting in us receiving 0.75% less than the Scottish average (on funding lines within the floor, which is the large majority of funding lines). Therefore, a flat cash settlement for Scotland would result in us having a 0.75% reduction. At this stage I would suggest that in the mid- range scenario we assume an all Scotland increase of 0.5%, resulting in a decrease for Argyll and Bute Council of 0.25%. The best and worst case scenarios would be varied by 0.50% resulting in range of between 0.75% reduction (worst case) and a 0.25% increase (best case). This will be kept under close review and may be updated following the publication of the Scottish Government’s Medium Term Financial Strategy which is usually published around May each year. Funding for Increase to Employer’s National Insurance Contributions 3.1.10 As part of the UK Budget announced on 30 August 2024, the Chancellor announced an increase to Employers National Insurance Contributions effective from 1 April 2025. The rate that employers pay in contributions will rise from 13.8% to 15% on a worker's earnings above £175 from April. The threshold at which employers start paying the tax on each employee’s salary will be reduced from £9,100 per year to £5,000. The Secretary of State for Scotland wrote to the Council Leader on 1 November 2024 to confirm that the Chancellor will provide funding to the public sector to support with the additional costs associated with these changes. Given the impacts of the policy change are complex, the Scottish Government settlement for 2025-26 announced in December does not reflect this additional support. HM Treasury will lead
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a technical process, which will include consultation with Devolved Governments, to understand requirements in more detail. During January, it became apparent that the Barnett Consequentials are likely to only fund circa 50% of the Employer’s National Insurance increase for public sector bodies. 3.1.11 The Cabinet Secretary for Finance and Local Government announced on Tuesday 4 February 2025 that Scottish Government has now agreed to provide an additional £144m to Local Government which represents 60% of direct staffing costs. This announcement was made to provide some certainty for councils as part of their budget setting. The increased cost is estimated to be £4.314m for 2025-26 (Council £3.450m and HSCP £0.864m). Based on the announcement it is estimated that we will receive £2.578m of funding. The distribution will not be confirmed until after the Council sets its budget but it is the best estimate at this stage. There is no funding for Commissioned Services and Arms Length Organisations. The estimated funding is outlined in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated NIC Funding – Council Share 2,062 2,057 2,052 2,047 2,042 Estimated NIC Funding – Social Work Share 516 515 514 513 512 Total 2,578 2,572 2,566 2,560 2,554 Extended Producer Responsibility (EPR) – Funding from DEFRA 3.1.12 Extended Producer Responsibility (EPR) is an environmental policy approach that holds producers accountable for the entire lifecycle of their products, including the post-consumer phase. Under EPR, manufacturers are required to take responsibility for the collection, recycling, and safe disposal of their products once they are no longer in use. The key idea behind EPR is to shift the financial and/or physical responsibility for waste management from municipalities (taxpayers) to producers (manufacturers). This creates an incentive for companies to design products that are easier to recycle, more durable, and have less environmental impact. 3.1.13 On 29 November 2024 the Council received a letter from the Department of Environment Food and Rural Affairs (DEFRA) providing our authority’s estimated payment amount (£3.847m) pursuant to the draft Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024 (the Draft Regulations) for the financial year April 2025 to March 2026. These draft regulations relate to Extended Producer Responsibility for Packaging. The indicative payment amount is provisional and subject to further review and adjustment. Payments provided via EPR for packaging are intended to enable local authorities
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to maximise the collection and recycling of packaging materials in order to support the transition to a circular economy. The final allocation will be confirmed in Autumn 2025. 3.1.14 It has been confirmed that the funding will be paid direct from DEFRA and is additional to the Scottish Government settlement in 2025-26, if it is spent on waste management. It is uncertain if the Scottish Government settlement may be adjusted in future years on the basis that we continue to receive funding from DEFRA. 3.1.15 As it is unclear at this stage what requirements will be attached to this additional funding, what further pressures there may be in future years, in addition to not knowing the final allocation until Autumn 2025 it is recommended that only a proportion of the funding is used to support the 2025-26 budget. There is a non-pay inflation pressure for waste/landfill tax for £0.790m and a cost pressure for BMW Ban for £0.558m and it is recommended that £1.348m is used for these purposes with the remaining £2.499m carried forward to 2026-27. No assumption has been made around recurring funding at this stage although it is hoped funding will continue without any downward adjustment to the Scottish Government settlement in respect of this. Council Tax 3.1.16 The Council Tax base for 2024-25 was set at £63.278m which reflected no inflationary increase as agreed by the Council on 15 April 2024. This is the starting position for 2024-25. 3.1.17 Financial Services have concluded a review of Council Tax income received on second homes and projections indicate receipts will be £0.328m over budget. This is a positive position and is very close to the original budget agreed in February, however, Members will be aware that the budget was amended in April in response to the level of representations that had been received. It is assumed that a similar level of income will be received in future years and the budget outlook can be updated to reflect this. 3.1.18 In terms of Council tax growth, following a review undertaken by the Assessor at Dunbartonshire and Argyll and Bute Valuation Joint Board, a number of self catering properties have been added to the Council Tax register. Growth has been increased for 2025-26 to help rebase the position and for 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. 3.1.19 As reported in the previous budget outlook reports, as part of the 2023- 24 budget setting process a business process review was undertaken of the Revenues and Benefits Service where one of the outcomes was anticipated increased Council Tax recoveries equating to £0.200m in 2025-26 which have been built into the budget outlook. This is a reduction of £0.149m from 2024-25 as recoveries are expected to be
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higher in the first two years of inception dropping down to an almost steady state from 2025-26 onwards. 3.1.20 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 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Council Tax Base 63,278 63,278 63,278 63,278 63,278 Council Tax Growth 472 789 1,108 1,428 1,750 Council Tax income on Second Homes in excess of budget 328 328 328 328 328 Adjustment to additional Council Tax recoveries (para 3.1.14) (149) (147) (145) (143) (143) Total Council Tax Income 63,929 64,248 64,569 64,891 65,213 General Fund 3.1.21 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 the saving in each of these years be transferred to the General Fund, with some being used to fund capital expenditure. £9.928m of savings will be transferred to reserves in 2025-26 in relation to this, this amount relates to the saving for the Council and the HSCP. 3.1.22 It was also agreed at the budget meeting in February 2024 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 3.1.23 The table below summarises the total estimated funding over the next five years within the mid-range scenario.
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Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Scottish Government funding as per Circular 259,134 258,486 257,840 257,195 256,552 Assumed funding from Employers NIC increase 2,578 2,572 2,566 2,560 2,554 Extended Producer Responsibility (EPR) Indicative Funding 3,847 tbc tbc tbc tbc Earmark EPR funding for future pressures (2,499) 2,499 0 0 0 Council Tax income 63,929 64,248 64,569 64,891 65,213 Transfer to Reserves in relation to Strathclyde Pension Fund (9,928) 0 0 0 0 Released Strathclyde Pension Fund Gain 2,000 2,000 0 0 0 Total Funding 319,061 329,805 324,975 324,646 324,319 3.2 Base Budget 3.2.1 As with previous years the base budget for 2025-26 is the current years approved budget adjusted for any: • one-off items included within 2024-25 that are not carried forward into 2025-26; • previously agreed items for future years; and • other adjustments since the 2024-25 budget was agreed. 3.2.2 As previously reported in the budget outlook report last year, funding was received during 2024-25 in respect of the Children’s Social Care pay uplift of which £0.063m relates to staff within Education and therefore the base needs adjusted for his amount.
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3.2.3 The SJC and Chief Officers pay awards have been implemented for 2024-25 with Councils having to provide 3.2% towards the pay award and Scottish Government providing the remaining funding. The Teachers had a pay award already agreed up to 31 July 2024 as part of a previous 28 month deal and they have now accepted a 4.27% pay offer. As with the SJC and Chief Officers, Councils are expected to fund up to 3.2% of the offer with SG funding for the remainder. The employee budgets for 2024-25 have been rebased due to the 2024-25 pay award. 3.2.4 On 4 April 2024 a Scottish Statutory Instrument was passed regarding increasing councillors pay with effect from 1 April 2024, the detail of which was presented to Council on 25 April. The financial impact of this is an increase of £0.033m which has been adjusted for as it was not included in the 2024-25 base budget. 3.2.5 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. There is also a decrease in funding relating to the creation of a building standards hub, however, this can be funded from increases to fees and charges within the service. 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 Early Learning and Child Care Real Living Wage for Commissioned Providers 138 School Meals 202 Teacher Numbers (previous specific grant) 2,125 CYP Community Mental Health 235 Scottish Assessors Barclay Implementation 2 Discretionary Housing Payments – Uplift to Grant 123 ASN Additionality (Difference between additional funding and cost pressure in 2025-26) 190 Building Standards Hub (23) Total 2,992 3.2.6 The revised base budget is noted in the table below. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Base Budget 2024- 25 301,965 301,965 301,965 301,965 301,965
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Adjust for one-off 2024-25 cost pressures (130) (130) (130) (130) (130) Adjust for one-off 2024-25 Management/ Operational savings 1,694 1,694 1,694 1,694 1,694 Release of contingency not required back to the general fund (200) (200) (200) (200) (200) Adjustment to Joint Boards (114) (114) (114) (114) (114) NDR Poundage Increase 2024-25 300 300 300 300 300 Right-Size Ferries budget matching income and expenditure 37 37 37 37 37 2024-25 Pay Base Adjustment - Children’s Social Care Pay Uplift – Education 63 63 63 63 63 2024-25 Pay Base Adjustments - Staff 2,636 2,636 2,636 2,636 2,636 2024-25 Pay Base Adjustment – Elected Members 33 33 33 33 33 Settlement Directions 2,992 2,992 2,992 2,992 2,992 Revised Base Budget 309,276 309,276 309,276 309,276 309,276 3.3 Employee Costs Pay Inflation Estimates 3.3.1 For future years pay awards for SJC staff, Teachers and Chief Officers, the previous mid-range assumption was a 2% increase to pay. The Public Sector Pay Policy was published alongside the Scottish Budget and it sets out a multi-year framework of a 9% pay envelope covering 2025-26, 2026-27 and 2027-28. It would be prudent to budget for 3% across each of the three years (in both the best case and mid-range scenarios). The worst case scenario assumes a 5% increase. For 2028-29 and 2029-30, the best case scenario has been reduced to 2%, mid-range remains at 3% and worst case remains at 5%. Negotiations have not commenced yet for 2025-26 and there remains a risk that the pay award is higher than budgeted. Every 1% over and above what is budgeted would add an additional pressure of circa £1.5m for Council staff (excluding HSCP).
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3.3.2 In terms of Councillors pay from 1 April 2025, The Scottish Local Authorities Remuneration Committee has undertaken an independent review of councillor remuneration with a number of recommendations proposed in respect of pay for all Councillors. Regulations have now been passed in Parliament and the cost of implementing the Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2025 is estimated at £0.206m and Members will be asked to agree to implement these Regulations as per recommendation (f). Detailed Employee Costing Exercise 3.3.3 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. 3.3.4 In terms of the level of employee budgets for 2025-26, the expectation would be that the budget would reflect the 2024-25 budget plus any increase due to incremental progression, pay inflation and any other unavoidable employee cost increases less previously approved employee budget savings. For 2025-26 there is an overall increase in the employee budget base of £0.133m. (excluding Social Work). There are a number of small variances to the employee base, both positive and negative as well as an increase as a result of posts within the Rural Growth Deal team now made permanent. Increments 3.3.5 The cost of employee increments have been updated following the salary template exercise. The employee increments for 2025-26 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 2025-26. Strathclyde Pension Fund 3.3.6 As detailed in the budget pack presented to Council in February 2024, the employer contribution rate paid to the Strathclyde Pension Fund decreased/will decrease from 19.3% to 6.5% in both 2024-25 and 2025- 26 and thereafter 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. Teacher Numbers 3.3.7 In 2024-25 Scottish Government removed £145.5m from the General Revenue Grant and issued this as a specific grant, conditional on
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maintaining teacher numbers at the level set out in each Council’s grant letter. For Argyll and Bute Council the funding amounted to £2.125m and there was an expectation that we maintain 848 teachers. As part of the Scottish Budget in December 2024 it was agreed that the funding would not be withheld and was returned to General Revenue Grant and this remains the case for 2025-26, however, for 2025-26, there is again an expectation that we will maintain 848 teachers, even although this is not the number we require to staff our schools. The budget equates to 837 FTE teachers which is slightly short of the target, however, officers are of the view that this is a risk based approach and should we not be able to deliver on our target, there will be mitigating circumstances to justify. The Scottish Government have indicated mitigations that will be taken into consideration and include changes to pupil roll and inability to fill posts. To budget for 848 teachers would result in an additional budget requirement of circa £0.800m and this is deemed to be both unaffordable and not required. There remains a risk that if we do not maintain the teacher numbers some funding could be withheld. Employer’s National Insurance Increase 3.3.8 With reference to paragraph 3.1.10 and 3.1.11, as part of the UK Budget there are increases to Employers National Insurance Contributions effective from 1 April 2025. The increase was originally anticipated to be fully funded, however, the Cabinet Secretary for Finance and Local Government announced on Tuesday 4 February 2025 that Scottish Government has now agreed to provide an additional £144m to Local Government which represents 60% of direct staffing costs. The cost for Council staff amounts to £3.450m and is summarised in the table below. It should be noted that these figures exclude Social Work. £000 Increase from reduction in threshold 2,156 Increase from increase in rate from 13.8% to 15% 1,294 Total 3,450 3.3.9 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 3.6.9. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Pay Award 2025- 26 4,298 9,050 13,944 18,985 24,177 Full year effect of 2024-25 pay 0 496 496 496 496
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award for teachers in 2025-26 base SLARC Recommendations – Elected Members 206 206 206 206 206 Change to employee base for 2025-26 133 133 133 133 133 Increments 599 1,194 1,789 2,384 2,979 Increase to Employers National Insurance 3,450 3,450 3,450 3,450 3,450 Increase in costs after one-off reduction in Strathclyde Pension Fund rate ceases 0 6,875 6,875 6,875 6,875 Total Employee Increases 8,686 21,404 26,893 32,529 38,316 3.4 Non-Pay Inflation 3.4.1 The position remains that only unavoidable/inescapable inflation has been included for 2025-26, 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 3.6.9. Inflation Category 2025-26 Previous estimates (Dec 2024) £000 2025-26 Updated estimates £000 Increase/ (Decrease) £000 Utilities - Electricity, Gas, Oil, Water 175 157 (18) Street Lighting Electricity 30 27 (3) Vehicle Fuel 34 30 (4) Vehicle Charging Point Electricity 6 6 0 Central Repairs-Outside Contractors 79 72 (7) Waste/Landfill Tax 797 790 (7) NPDO/HUB Schools 404 370 (34) Community Pool Subsidies 25 25 0 Residential Schools 36 30 (6)
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Pre-Primary Partner Providers 197 197 0 ICT 214 217 3 Catering Purchases and Milk 66 59 (7) Insurance 459 459 0 Bitumen – Roads 16 14 (2) Contribution to Joint Boards 39 35 (4) Annual External Audit Fee 10 9 (1) Public Transport 237 237 0 School Transport 153 153 0 SEPA – Waste Disposal 7 7 0 Non-Domestic Rates 162 10 (152) Strathclyde Passenger Transport Requisitions 0 12 12 Refuse Vehicle Ferry Fares 0 13 13 Housing Support Contracts 0 49 49 Total 3,146 2,978 (168) 3.4.3 In terms of the budget outlook for 2026-27 to 2029-30 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 2026-27 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 3.6.9. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Unavoidable/ inescapable Non-Pay Inflation 2,978 5,723 8,610 11,654 14,868 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 2026-27 onwards at £0.250m per annum in the best case scenario in the best case scenario, £0.500m per annum within the
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mid-range scenario and £1.000m per annum within the worst case scenario. 3.5.2 Since the Policy and Resources Committee on 5 December 2024 the following changes have been made to the cost and demand pressures: • NEW – Additional Staffing requirement in hostels - £0.055m • Amended – Waste BMW Ban – an updated financial appraisal has been completed in respect of the cost pressure as a result of the Waste BMW ban. The pressure for 2025-26 has been increased by £0.096m with larger increases in future years. • NEW – Airports - £0.040m – increase to maintenance budget which is no longer sufficient. • NEW – Valuation Joint Board – increase to requisition as advised by letter on 30 January 2025. 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 within the Health and Social Care Partnership are summarised within paragraph 3.6.9. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 ASN Support 202 410 624 624 624 Maintenance/Repair of School Estate 360 360 360 360 360 Additional Staff Required in Hostels as per Care Inspectorate 55 55 55 55 55 Election costs 0 0 350 0 0 Education ICT Network Infrastructure 295 295 348 348 348 Local Development Plan 0 50 0 0 0 Airports Maintenance 40 40 40 40 40 Increase to borrowing costs as a result of investment agreed at February 2024. 282 282 282 282 282 Universal Credit – HB Admin Grant 40 80 120 160 200 Civica Revenue and Benefits System 0 0 63 63 63 NDR Reliefs 68 68 68 68 68 Compliance with BMW Ban 558 3,037 3,609 3,609 3,609
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Bus Transport Contracts 1,735 2,003 2,003 2,003 2,003 Roads & Amenity Services Income - Saving no longer achievable 100 100 100 100 100 School Transport for ASN pupils has seen a significant increase due to an increase in number of pupils requiring school transport as well as increased costs. 500 500 500 500 500 Loans Charges for Weather Incident as agreed at P&R Committee 80 80 80 80 80 Migration from Skype for Business to Teams Telephony 0 63 300 300 300 Insurance premium increases 309 309 309 309 309 Valuation Joint Board requisition increase 147 402 448 448 448 Allowance for pressures in future years 0 500 1,000 1,500 2,000 Total Cost and Demand Pressures 4,771 8,634 10,659 10,849 11,389 3.6 Health and Social Care Partnership (HSCP) 3.6.1 The Council agreed an allocation to the HSCP of £78.611m for 2024-25 at its meeting on 22 February 2024 as well as an indicative flat cash allocation for 2025-26. The indicative allocation for 2026-27 onwards increases by £3.053m to account for the cessation of the one-off employer contribution rate saving relating to the Strathclyde Pension Fund. 3.6.2 As previously reported in the budget outlook report last year, funding was received during 2024-25 in respect of the Children’s Social Care pay uplift of which £0.180m is a straight pass through to the HSCP and will therefore increase their payment each year by this amount.
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3.6.3 Additional funding was allocated by the Scottish Government for the SJC pay award during 2024-25. As in previous years we agreed to pass over a proportionate share of this funding to the HSCP and this amounts to £0.339m within 2024-25 and increases their future payments by the same amount. 3.6.4 It was agreed during 2024-25 that the Hostels should transfer from the Health and Social Care Partnership to the Education Service. As a result of this, the budgets that were included in the indicative 2025-26 payment will be removed. This will have no bottom line impact on the HSCP. 3.6.5 The Local Government Finance Circular 10/2024 included additional funding to be passed over to the Health and Social Care Partnership for 2025-26. Funding for Mental Health Recovery and Renewal passed over to the HSCP in 2021 was time limited and ended in 2024-25 and therefore now needs to be removed from payment to HSCP. The net amount to be passed over to the HSCP is summarised below: • £125m for adult social care workers in commissioned services – ABC share £2.344m. • £10m to support provision of Free Personal and Nursing Care – ABC share £0.257m. • £3.7m for Mental Health Recovery and Renewal funding has come to an end – ABC share passed to HSCP in 2021 was £0.066m. 3.6.6 The Health and Social Care Partnership had been estimating a 2% increase in respect of pay for Social Work staff, this is same as the assumption that was made for Council staff. The Public Sector Pay Policy was published alongside the Scottish Budget and it sets out a multi-year framework of a 9% pay envelope covering 2025-26, 2026-27 and 2027-28. It would now be prudent to increase the budget assumption from 2% to 3%. As the Council received additional funding without conditions attached, this has enabled the increase to be built into future estimates for Council staff and it is recommended that the Council fund the extra 1% for Social Work staff in 2025-26 in light of the significant financial challenges that the IJB are currently facing. The increase to the assumption by 1% equates to £0.370m. 3.6.7 As outlined in paragraph 3.1.10 and 3.1.11, as part of the UK Budget there are increases to Employers National Insurance Contributions effective from 1 April 2025. The increase for Social Work staff is summarised in the table below. £000 Increase from reduction in threshold 553 Increase from increase in rate from 13.8% to 15% 311 Total 864
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Whilst initially it was expected that this would be fully funded by UK Government via the Barnett Consequentials, this is now not the case. The Cabinet Secretary for Finance and Local Government announced on Tuesday 4 February 2025 that Scottish Government has now agreed to provide an additional £144m to Local Government which represents 60% of direct staffing costs. It is recommended that the Council allocate budget to the HSCP for the 40% shortfall, recognising the significant financial challenges the HSCP are currently facing. If we assume 60% funding from Scottish Government and 40% funding from the Council, the payment to the HSCP will increase by £0.864m, equal to the estimated additional cost. 3.6.8 The revised payment to the Health and Social Care Partnership is noted below. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Base Payment (as per Budget 2024) 78,611 81,664 81,664 81,664 81,664 2024-25 Children’s Social Care funding 180 180 180 180 180 2024-25 share of SJC pay award funding 339 339 339 339 339 Hostels Transfer (1,407) (1,407) (1,407) (1,407) (1,407) Settlement Changes 2,535 2,535 2,535 2,535 2,535 To fund 1% increase to pay award assumption 370 370 370 370 370 Employer’s National Insurance Funding (60% SG and 40% Council) 864 864 864 864 864 Payment to HSCP 81,492 84,545 84,545 84,545 84,545 3.6.9 Members should note that the payment assumes that the HSCP will absorb any inflationary and cost and demand pressures. The latest estimated inflation and cost and demand pressures for Social Work
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have been discussed with the HSCP Chief Financial Officer. The mid- range estimates are summarised in the table below and further detail is contained within Appendix 4. These pressures are not included within the Council’s budget gap but are included within this report for information. Note that these only extend to three years rather than the five years that the Council’s budget outlook extends to. Extending the outlook to five years is a decision for the HSCP to take and their Chief Financial Officer is of the view that a five year planning window is not appropriate at the current time. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Increase to pay base due to 2024-25 pay award (partly funded) 384 384 384 Pay Inflation at 3% 1,197 2,430 3,700 Pay Increments 203 406 609 Increase to employee base 282 282 282 ENICs increase 864 864 864 Non-Pay Inflation 875 1,830 2,844 Non-Pay Inflation on NHS posts recharged to Social Work 90 182 277 Older People Demand Growth 500 1,000 1,500 Younger Adults Demand Growth 0 121 184 Mental Health Budget Adjustment 0 131 199 Budget Adjustment to reflect 2024-25 levels of overspend on Older Adult Services 2,000 2,000 2,000 Looked after Children – to reflect significant increase in demand for placements in external residential care. 700 700 700 Mental Health Budget Adjustment 0 265 397 Allowance for unknown cost and demand pressures 200 400 600 Social Work Pressures 7,295 10,995 14,540 Pay Award 2024-25 funding from Council (see para 3.6.3) (339) (339) (339) Pay Inflation funding from Council for 2025-26 (see para 3.6.6) (370) (370) (370) ENICs funded 60% SG, 40% Council (see para 3.6.7) (864) (864) (864)
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Net Social Work Pressures after Council funding 5,722 9,422 12,967 3.7 Live Argyll 3.7.1 During the year the management fee for Live Argyll was assumed to change in line with the Scottish Government funding variance. A saving is now included within the policy savings options (see paragraph 3.9.5) and therefore within this section the management fee is assumed to remain flat cash across the years. 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. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Management Fee Base Change 0 0 0 0 0 Cessation of SPF contribution rate saving 0 118 118 118 118 Change to Management Fee 0 118 118 118 118 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 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Base Budget 309,276 309,276 309,276 309,276 309,276 Employee Cost Changes 8,686 21,404 26,893 32,529 38,316 Non-Pay Inflation 2,978 5,723 8,610 11,654 14,868 Cost and Demand Pressures 4,771 8,634 10,659 10,849 11,389 (Decrease)/ Increase to HSCP allocation 4,288 7,341 7,341 7,341 7,341
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(not already in Council base)* Adjustment to Live Argyll Payment (prior to savings) 0 118 118 118 118 Total Net Expenditure 329,999 352,496 362,897 371,767 381,308 Total Funding 319,061 329,805 324,975 324,646 324,319 Budget Surplus / (Gap) Cumulative (10,938) (22,691) (37,922) (47,121) (56,989) *The transfer of hostels from HSCP to Education 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 22 February 2024 impacted on 2025-26 and beyond. These are now factored into the budget outlook, reducing the budget gap. 3.9.2 During 2024-25 a review was undertaken of all earmarked reserves to establish whether they were still required for the originally intended purpose. The results of the review were presented to Council on 26 September 2024 where Members agreed to release £1.558m of existing earmarked reserves back to the General Fund to help bridge the budget gap in 2025-26. This is one-off in nature and therefore reduces the gap in 2025-26 only. 3.9.3 There is a separate report included in the budget pack which relates to fees and charges together with the detailed schedule of charges for 2025-26. The general inflationary increase to fees and charges is proposed at 6% for 2025-26. The general inflationary increase would give additional income of £0.363m. 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 2026-27 to 2029-30, fees and charges have been estimated at a 6% increase in the mid-range scenario (3% in worst case and 9% in best case). 3.9.4 Savings options totalling £3.093m for 2025-26 were included in the Budget Outlook report presented to the Policy and Resources Committee on 5 December 2024. 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
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• Policy – meaning they require Council approval due to having staff or policy implications. The management/operational savings are set out in Appendix 5 to this report and the proposed policy savings are set out in Appendix 6 alongside savings templates for each of the policy savings options. 3.9.5 A summary of the savings identified are noted in the table below. The changes since the report in December are summarised below: • New Management/Operational Saving – Elections - £0.032m in 25-26 • New Policy Saving – Governance - £0.033m in 25-26 • Property Saving moved from Policy to Management/Operational - £0.050m in 25-26. Saving Type 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Management/ Operational 2,102 990 1,029 1,029 1,029 Policy 991 1,527 1,627 1,627 1,627 Total 3,093 2,517 2,656 2,656 2,656 3.9.6 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. 3.9.7 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 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Previously agreed Policy Savings 248 724 1,360 1,829 1,943 Previously agreed Management/ Operational Savings 35 35 35 35 35 Earmarked Reserves released to the General Fund 1,558 0 0 0 0 Fees and Charges Increase 363 748 1,156 1,588 2,046 NEW Management/ Operational Options 2,102 990 1,029 1,029 1,029
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NEW Policy Options 991 1,527 1,627 1,627 1,627 Council Tax Increase 3,170 6,530 10,075 13,812 17,753 Total Measures to Balance the Budget 8,467 10,554 15,282 19,920 24,433 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. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Budget Gap Prior to Measures to Balance Budget (10,938) (22,691) (37,922) (47,121) (56,989) Savings Measures 8,467 10,554 15,282 19,920 24,433 Estimated Budget Surplus / (Gap) Cumulative (2,471) (12,137) (22,640) (27,201) (32,556) Estimated Budget Surplus / (Gap) In Year (2,471) (9,666) (10,503) (4,561) (5,355) 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 to 8.9%. 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. The table below summarises the position across the years if Council tax is increased by 8.9% in 2025-26 reverting back to an estimated 5% in future years. Draft 2025-26 £000 Mid- Range 2026-27 £000 Mid- Range 2027-28 £000 Mid- Range 2028-29 £000 Mid- Range 2029-30 £000 Budget Surplus / (Gap) in Year as noted in 3.10.1 above (2,471) (12,137) (22,640) (27,201) (32,556) Council Tax additional income 2,471 2,609 2,739 2,876 3,019
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based on a further 3.9% increase (total Council Tax of 8.9%) Final Budget Surplus / (Gap) Cumulative 0 (9,528) (19,901) (24,325) (29,537) Final Budget Surplus / (Gap) In Year (9,528) (10,373) (4,424) (5,212) 3.10.3 Appendix 7 provides a summary of the draft budget for 2025-26 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. 3.11 Balancing Future Years Budget 3.11.1 The budget gap in the period 2026-29 to 2029-30 across each scenario is summarised in the table below. Budget Gap 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Total £000 Best Case (5,907) (7,343) 262 (344) (13,332) Mid-Range (9,528) (10,373) (4,424) (5,212) (29,537) Worst Case (16,131) (16,763) (10,981) (12,124) (55,999) 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 2025-26. It also provides estimates of the budget outlook for the period 2026-27 to 2029-30. 4.2 All proposals included within this report result in a balanced budget for 2025-26. 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 8. If Members are minded to support the funding request consideration needs to be given as to how they would be funded.
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5. IMPLICATIONS 5.1 Policy – There are policy implications associated with the new saving options and also previously agreed savings options which impact 2025- 26 and beyond. 5.2 Financial – The report outlines the budget position over 2025-26 to 2029-30. 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 Fairer Scotland Duty – See below 5.5.1 Equalities – Equality and Socio-Economic Impact Assessments have been carried out where appropriate for savings options already agreed or developed. 5.5.2 Socio Economic Duty – Equality and Socio-Economic Impact Assessments have been carried out where appropriate for savings options already agreed or developed. 5.5.3 Islands Duty - Equality and Socio-Economic Impact Assessments have been carried out where appropriate for savings options already agreed or developed. This includes consideration of Islands Duties. 5.6 Climate Change – The Council is committed to addressing climate change and reviews of how Services are delivered is ongoing within the available budget resources. 5.7 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. 5.8 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. 5.9 The Rights of the Child (UNCRC) – None. Kirsty Flanagan Executive Director /Section 95 Officer 13 February 2025 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES: Appendix 1 – 2025-26 to 2029-30 Budget Outlook Scenarios Appendix 2 – Non-Pay Inflation Estimates 2025-26
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Appendix 3 - Cost and Demand Pressures 2025-26 to 2029-30 Appendix 4 – Health and Social Care Partnership Cost Pressures Appendix 5 – New Management/Operational Savings Appendix 6 – New Policy Options Savings Summary and Templates Appendix 7 – Service Summary of Budget Position Appendix 8 – Funding Requests For further information contact Carolyn Earl, Interim Head of Financial Services carolyn.earl@argyll-bute.gov.uk
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BUDGET OUTLOOK 2025-26 to 2029-30 APPENDIX 1 BUDGET PACK - 27 FEBRUARY 2025 DRAFT 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 Base Budget Adjustments 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 7,311 Revised Base Budget 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 309,276 Pay Award - All Employees 4,298 9,050 13,944 17,305 20,733 9,050 13,944 18,985 24,177 12,217 20,532 29,263 38,431 Full year effect of 2025-26 pay award for teachers in 2026-27 base 0 496 496 496 496 496 496 496 496 496 496 496 496 SLARC Recommendations - Elected Members 206 206 206 206 206 206 206 206 206 206 206 206 206 Base Increase 2025-26 133 133 133 133 133 133 133 133 133 133 133 133 133 Pay Increments 599 897 1,194 1,492 1,789 1,194 1,789 2,384 2,979 1,194 1,789 2,384 2,979 Employer's National Insurance Increase 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 One-off element SPF 0 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 6,875 Total Employee Cost Changes (Council Services) 8,686 21,107 26,298 29,957 33,682 21,404 26,893 32,529 38,316 24,571 33,481 42,807 52,570 Non-Pay Inflation - Council Services 2,978 4,749 6,989 9,359 11,871 5,723 8,610 11,654 14,868 6,670 10,237 13,990 17,946 ASN Support 202 410 624 624 624 410 624 624 624 410 624 624 624 Maintenance/Repair of School Estate 360 360 360 360 360 360 360 360 360 360 360 360 360 School Hostels 55 55 55 55 55 55 55 55 55 55 55 55 55 Election Costs 0 0 327 0 0 0 350 0 0 0 370 0 0 Education ICT Network Infrastructure 295 295 348 348 348 295 348 348 348 295 348 348 348 Planning (Local Development Plan) 0 50 0 0 0 50 0 0 0 50 0 0 0 Airport Maintenance 40 40 40 40 40 40 40 40 40 40 40 40 40 Borrowing to pay for weather incident costs 282 282 282 282 282 282 282 282 282 282 282 282 282 Housing Benefits Admin Grant 40 80 120 160 200 80 120 160 200 80 120 160 200 Civica Revenue and Benefits System 0 0 37 37 37 0 63 63 63 0 137 137 137 Compliance with BMW Ban 558 2,733 3,248 3,248 3,248 3,037 3,609 3,609 3,609 3,341 3,970 3,970 3,970 Bus Transport Contracts 1,735 2,003 2,003 2,003 2,003 2,003 2,003 2,003 2,003 2,003 2,003 2,003 2,003 Saving no longer achievable in full (TB13b) - Roads and Amenity Services Charging 100 100 100 100 100 100 100 100 100 100 100 100 100 Loans Charges relating to Weather Incident as agreed at P&R Committee 80 80 80 80 80 80 80 80 80 80 80 80 80 Migration from Skype for Business to Teams Telephony 0 19 282 282 282 63 300 300 300 108 318 318 318 Insurances 309 309 309 309 309 309 309 309 309 309 309 309 309 Valuation Joint Board 147 402 448 448 448 402 448 448 448 402 448 448 448 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 4,771 8,036 9,731 9,694 9,984 8,634 10,659 10,849 11,389 9,483 12,132 12,802 13,842 Adjustment to Health and Social Care Partnership Payment 4,288 7,341 7,341 7,341 7,341 7,341 7,341 7,341 7,341 7,341 7,341 7,341 7,341 Adjustment to Live Argyll Management Fee 0 118 118 118 118 118 118 118 118 118 118 118 118 Transfer to/from Reserves 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Estimated Expenditure PRIOR to measures to balance the budget 329,999 350,627 359,753 365,745 372,272 352,496 362,897 371,767 381,308 357,459 372,585 386,334 401,093 Scottish Government Grant 263,060 264,865 263,021 263,678 264,337 263,557 260,406 259,755 259,106 262,248 257,801 255,868 253,949 Transfers to/from Reserves - Strathclyde Pension Fund (7,928) 2,000 0 0 0 2,000 0 0 0 2,000 0 0 0 Council Tax 63,929 64,407 64,888 65,373 65,859 64,248 64,569 64,891 65,213 64,090 64,251 64,412 64,572 Total Funding 319,061 331,272 327,909 329,051 330,196 329,805 324,975 324,646 324,319 328,338 322,052 320,280 318,521 Budget Surplus / (Gap) PRIOR to measures to balance the budget (10,938) (19,355) (31,844) (36,694) (42,076) (22,691) (37,922) (47,121) (56,989) (29,121) (50,533) (66,054) (82,572) Measures to Balance the Budget: Fees and Charges 363 940 1,569 2,255 3,002 748 1,156 1,588 2,046 555 753 957 1,167 Council Tax Increase 5,643 9,119 12,793 16,675 20,775 9,111 12,768 16,624 20,689 9,103 12,744 16,575 20,606 Council Tax Increase (Growth element) 0 113 182 256 334 28 46 64 83 56 91 127 166 Management/Operational Savings agreed Feb 2023 35 35 35 35 35 35 35 35 35 35 35 35 35 Policy Savings Agreed Feb 2023 248 724 1,360 1,829 1,943 724 1,360 1,829 1,943 724 1,360 1,829 1,943 Earmarked Reserves Released to the General Fund 1,558 0 0 0 0 0 0 0 0 0 0 0 0 NEW Management/Operational Options 2025 2,102 990 1,029 1,029 1,029 990 1,029 1,029 1,029 990 1,029 1,029 1,029 NEW Policy Options 2025 991 1,527 1,627 1,627 1,627 1,527 1,627 1,627 1,627 1,527 1,627 1,627 1,627 Rounding Adjustment (2) 0 0 0 0 0 0 0 0 0 0 0 0 Total Measures to Balance the Budget 10,938 13,448 18,595 23,706 28,745 13,163 18,021 22,796 27,452 12,990 17,639 22,179 26,573 Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget 0 (5,907) (13,249) (12,988) (13,331) (9,528) (19,901) (24,325) (29,537) (16,131) (32,894) (43,875) (55,999) Budget Surplus / (Gap) In Year AFTER measures to balance the budget 0 (5,907) (7,343) 262 (344) (9,528) (10,373) (4,424) (5,212) (16,131) (16,763) (10,981) (12,124) Mid-Range Scenario Worst Case ScenarioBest Case Scenario
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NON-PAY INFLATION (COUNCIL) Appendix 2 Service Category Basis of Inflation Inflation Percentage Mid Range 2025/26 Council Wide Electricity Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 104,206 Council Wide Gas Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 21,579 Council Wide Heating Oils Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 10,148 Council Wide Solid Fuel Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 7,413 Council Wide Water Charges Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 14,439 Council Wide Vehicle Fuel Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 30,034 Council Wide Central Repairs - Outside Contractors Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% 72,143 Council Wide Insurances Mid-point set at 20% for 2025/26 per uplifts in 2024/25. Reduced to 15% in subsequent years, with 0.5% tolerance for best and worst case. 20.00% 459,473 Council Wide Contribution to Joint Boards Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 34,987 Council Wide Non-Domestic Rates Estimate for the increase in Non-Domestic Rates, with a tolerance of 0.5% for best and worst case. 0.19% 10,000 Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 0 764,422 Education Pre-Primary Partner Provider Uplift Reflects the increase in the Real Living Wage from £12/hr to £12.60/hr, with a tolerance of 0.5% for best and worst case. 5.00% 197,070 Education External School Placements Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 30,119 Commercial Services Catering Purchases Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 58,882 Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% 6,806 Legal & Regulatory Support Leisure SLA-Atlantis Based on the movement in RPIX between September 2023 and September 2024 per the SLA, with 0.5% tolerance for best and worst case. 2.70% 18,310 Legal & Regulatory Support NPDO-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% 296,746 Legal & Regulatory Support NPDO-Utilities Rebate Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% (11,226) Legal & Regulatory Support NPDO-Electricity Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 16,274 Legal & Regulatory Support NPDO-Gas Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 6,595 Legal & Regulatory Support NPDO-Heating Oil Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 2,586 Legal & Regulatory Support NPDO-LPG Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 2,251 Legal & Regulatory Support NPDO-Water Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 9,672 Legal & Regulatory Support HUB-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% 46,444 680,529 Customer and Support Services ICT Estimate added at 10% to reflect input from ICT on increasing costs. 10.00% 216,698 Financial Services Annual External Audit Fee Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 8,471 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% 237,431 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% 152,562 Roads and Infrastructure Waste PPP-Private Contractor Inflation Based on a general inflationary uplift of 3%, with a 0.5% tolerance for best and worst case. 3.00% 224,792 Roads and Infrastructure Waste PPP-Central Government Inflation Based on Landfill Tax increase between 23/24 and proposed 24/25 rate with a 0.5% tolerance for best and worst case. 21.65% 508,770 Roads and Infrastructure Helensburgh Waste Disposal Costs Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at November 2024, with 0.5% tolerance for best and worst case. 3.40% 55,756 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% 7,211 Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 13,901 Roads and Infrastructure Electricity - Street Lighting Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 26,591 Roads and Infrastructure Electricity - Vehicle Charging Points Based on the November 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.40% 5,590 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% 12,125 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% 13,380 Development & Economic Growth Housing Support Contracts Reflects the increase in the Real Living Wage from £12/hr to £12.60/hr, with a tolerance of 0.5% for best and worst case. 5.00% 48,947 1,532,225 2,977,176 Council Wide Total Executive Director Douglas Hendry - Total Executive Director Kirsty Flanagan - Total Total Non-Pay Inflation in the Mid Range
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COUNCIL COST AND DEMAND PRESSURES 2025-26 to 2029-30 Department Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £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. It is anticipated that growth continues over the next 5 years however the extent of this growth is difficult to determine. 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 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. 202 410 624 624 624 202 410 624 624 624 202 410 624 624 624 Executive Director - Douglas Hendry Education There is an ongoing need for the Council to manage the maintenance/repair of Schools estate through the education central repairs budget. The demand on this budget has continued to increase due to the amount of statutory maintenance work and emergency repairs which no longer allows for any planned maintenance to be carried out. The cost of planned maintenance has fallen on the service which cannot be sustained. Failure to carry out planned maintenance will impact significantly on the cost of emergency repairs in the future. The Council has over 75 school buildings to maintain and more reactive maintenance work is required from Education Central Repairs due to reduced capital funding. 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 Executive Director - Douglas Hendry Education Following an inspection at Dunoon Hostel by the Care Inspectorate the service require additional staff on rota to support pupils that are currently attending Dunoon Hostel. 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 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 0 327 0 0 0 0 350 0 0 0 0 370 0 0 Executive Director - Douglas Hendry and Kirsty Flanagan Education and ICT The Education ICT Network infrastructure in its current design is no longer suitable to support the future delivery of the education digital learning vision and strategy. It requires a transformative technology upgrade, improved security, and reconfiguration to support in-school and at home learning. There are increased security threats and risks to the corporate and education networks by retaining the education network in its present state. ICT does not have the resource or capacity to undertake a strategic transformation of this scale and complexity without significant investment in hardware and software solutions, and additional engineering resources. It is anticipated a programme of works could take up to two years to fully deliver, and due to the rising security threats, commencement by Summer 2024 is recommended. Capital Costs and revenue costs for 2024-25 have been identified through repurpose of earmarkings. The cost pressure for Education from 2025-26 is £180k for specialist software licensing and an annual revenue requirement for additional engineering resource of £115k as a future cost pressure for ICT. 295 295 348 348 348 295 295 348 348 348 295 295 348 348 348 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. 0 50 0 0 0 0 50 0 0 0 0 50 0 0 0 Executive Director - Kirsty Flanagan Development & Economic Growth Argyll and Bute Council operate three licensed aerodromes at Oban, Coll and Colonsay. These aerodromes are licensed by the Civil Aviation Authority (CAA) as required by law to allow scheduled passenger flight services (for use by paying members of the public) to land and take off. The license stipulates the required safety standards and fire cover required for each aircraft movement. Operations at the licensed aerodromes are audited on a regular basis by the CAA and require the appropriate level of resource. The maintenance budget is no longer sufficient due to price increases and this cost pressure represents an increase to right-size the budget to reflect the pattern of necessary spending over the last few years. 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 Executive Director - Kirsty Flanagan Financial Services At the budget setting meeting in February 2024 it was agreed to borrow to pay for the £4.348m of costs relating to the weather incident that were not claimable through the Bellwin scheme. Whilst the Council secured additional funding in relation to the weather related costs, this allowed the Council to freeze the Council Tax, therefore the borrowing is still required, some in relation to the weather cost and some in relation to other capital investments. 282 282 282 282 282 282 282 282 282 282 282 282 282 282 282 Best Case Mid-Range Worst Case APPENDIX 3
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COUNCIL COST AND DEMAND PRESSURES 2025-26 to 2029-30 Department Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Best Case Mid-Range Worst Case APPENDIX 3 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 0 37 37 37 0 0 63 63 63 0 0 137 137 137 Executive Director - Kirsty Flanagan Financial Services This is due to the increase in NDR charges resulting from the Scottish Government’s rise in medium and large business rates poundage for 2025/26. This cost is expected to be recurring but subject to potential adjustment following legislative enactment and future revaluations. 68 68 68 68 68 68 68 68 68 68 68 68 68 68 68 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Achieving compliance with ban on biodegradable municipal waste (BMW) which comes into place on 1 January 2026. The costs are the best estimates at this stage and consultants have assisted in producing the estimates. The best case and worst case scenarios are based on the mid-range with a +/- 10% change 558 2,733 3,248 3,248 3,248 558 3,037 3,609 3,609 3,609 558 3,341 3,970 3,970 3,970 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Bus Transport contracts have seen a siginificant increase in new contract prices due to increased costs for fuel, insurance, maintenance, regualtory compliance and driver wages. New contracts have seen a combined annual increase of £975k across Argyll and Bute during 2024-25 with further contract renewals due in 2025-26. Work ongoing on whether savings could be made by reducing services or providing services in a different manner. 1,735 2,003 2,003 2,003 2,003 1,735 2,003 2,003 2,003 2,003 1,735 2,003 2,003 2,003 2,003 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Previously agreed saving from 2018-19 for Roads and Amenity Services Charging (TB13b) is now not fully achievable with a shortfall of £100k. Limited resources within Roads and Infrastructure Services has hampered the ability to procure external work and therefore the income generation expected as part of this saving. Further possible methods to secure external income will be looked at as part of the RIS Review. 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Executive Director - Kirsty Flanagan Roads & Infrastructure Services School Transport for ASN pupils has seen a significant increase due to an increase in number of pupils requiring school transport as well as increased costs. This trend is likely to continue over the coming years with the demand for ASN support expected to increase. 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 Executive Director - Kirsty Flanagan Roads & Infrastructure Services Loans charge for borrowing agreed at P&R on 15 August 2024 to cover £2.029m of the Weather Incident costs. £50k of the loans charges has been funded from elsewhere within the current budget. 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Executive Director - Kirsty Flanagan ICT Migration from Skype for Business to Teams Telephony to ensure those staff who need to make and receive external calls can do so. This was agreed at Policy & Resources Committee on 15 August. 0 19 282 282 282 0 63 300 300 300 0 108 318 318 318 Council Wide Council Wide Rightsize Council Insurance Budget - Insurance premiums have risen higher than previous inflationary forecasts due to changes in law, Increase in building values, higher contractor costs for building works, repairs and higher component parts for cars - Inflation 22% 309 309 309 309 309 309 309 309 309 309 309 309 309 309 309 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 flast 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. 147 402 448 448 448 147 402 448 448 448 147 402 448 448 448 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 4,771 8,036 9,731 9,694 9,984 4,771 8,634 10,659 10,849 11,389 4,771 9,483 12,132 12,802 13,842
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SOCIAL WORK COST AND DEMAND PRESSURES - 2025-26 to 2027-28 APPENDIX 4 Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 All Social Work Increase to pay base due to 2024-25 pay award (this is partly funded) 384 384 384 384 384 384 384 384 384 All Social Work Estimated Pay inflation reflecting a best case 2%, and mid-range of 3% and a worst case of 5%. 798 1,612 2,442 1,197 2,430 3,700 1,995 4,090 6,289 All Social Work Estimated Pay increments, 2025-26 is based on calculated position following salary template exercise, for future years the best case assumes only 50% of the increments in 2025-26 are required and in the mid-range and worst case, the increase is in line with the increase in 2025-26. 203 305 407 203 406 609 203 406 609 All Social Work Change to employee base for 2025-26 based on the salary template exercise. A significant element of the increase relates to the regrading of staff within Children’s Houses. 282 282 282 282 282 282 282 282 282 All Social Work NIC Increase 864 864 864 864 864 864 864 864 864 All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable inflation and worst case. 761 1,589 2,458 875 1,830 2,844 987 2,073 3,237 All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are recharged to Social Work. 75 151 230 90 182 277 105 213 325 Adult Care Older People Demand Growth: The number of older people is increasing and older people are living longer with significant health and support needs and significant expectations of the support they are entitled to receive. Best case assumes that this will be offset by efficiency improvement and increasing unmet need / demand. The mid range allows for a 1% increase each year. Worst case is 2% per year on the older adult services budget. 0 0 0 500 1,000 1,500 1,000 2,000 3,000 Adult Care Younger Adults Demand Growth - Physical Disability: services have been operating within budget following delivery of savings and previous budget increases. Best case is no additional demand pressures beyond inflation, mid range makes some allowance in 2026/27 onwards. 0 0 0 0 121 184 90 183 279 Worst CaseMid RangeBest Case
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SOCIAL WORK COST AND DEMAND PRESSURES - 2025-26 to 2027-28 APPENDIX 4 Service Cost/Demand Pressure 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 2025-26 £000 2026-27 £000 2027-28 £000 Worst CaseMid RangeBest Case Adult Care Mental Health Demand Growth - As above, services operating within budget overall. The best case assumes a 0% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 2% growth in 26/27 and 27/28 and the worst case reflects 3% growth. 0 0 0 0 131 199 97 198 302 Adult Care Budget Adjustment to reflect 2024/25 levels of overspending on Older Adult Services. This is in addition to future demand growth highlighted above. It is not expected that the overspending can be addressed quickly enough to enable this to be reduced in 2025/26. Best case assumes progress in 2026/27 and would require systems improvements and reductions in agency staffing utilisation. 2,000 1,500 1,500 2,000 2,000 2,000 2,500 2,500 2,500 Children and Families Looked After Children Budget Adjustment - to reflect significant increase in demand for placements in external residential care facilities. 700 700 700 700 700 700 700 900 1,100 Adult Care Mental Health Budget Adjustment - Services are operating within budget at present and therefore best case is to assume that this will continue in 2025/26. The budget will be reviewed annually to reflect spending patterns. 0 0 0 0 265 397 112 265 397 All Social Work Allowance for unknown cost and demand pressures which could arise. Per James Gow this is to reduce to £200k pa 0 0 0 200 400 600 200 400 600 TOTAL COST AND DEMAND PRESSURES 6,067 7,387 9,267 7,295 10,995 14,540 9,519 14,758 20,168
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MANAGEMENT/OPERATIONAL SAVINGS OPTIONS - 2025-26 APPENDIX 5 Saving £'000 FTE H/Count Saving £'000 FTE H/Count Saving £'000 FTE H/Count FS 001 25/26 Financial Services Increase in Agency Income from Scottish Water and a reduction in supplies and services budgets following a review. 51 0.0 0.0 51 0.0 0.0 51 0.0 0.0 RIS 002 25/26 Commercial Waste A high level review of self-catering units has highlighted that some do not have commercial waste contracts. A further more detailed review will be carried out but it is anticipated that there is additional income that can be budgeted for. This saving will be monitored and reported during the year. 700 0.0 0.0 700 0.0 0.0 700 0.0 0.0 CW 001 25/26 Council Wide Following a review of some supplies and services budget, there are a number of small efficiences that can be made within various cost centres will limited impact. 47 0.0 0.0 49 0.0 0.0 88 0.0 0.0 CS 002 25/26 Council Catering Service Over the last year the department has been revising delivery models to increaes efficiency and effectiveness of the service and are able to reduce the budget as a result of this. 50 0.0 0.0 50 0.0 0.0 50 0.0 0.0 CS 003 25/26 Property Services Condition Survevys - due to favourable market conditions and the frequency to undertake the condition surveys a one- off saving of £50k can be made in 2025/26. 50 0.0 0.0 0 0.0 0.0 0 0.0 0.0 2027-28Ref Service Area Saving Summary 2025-26 2026-27
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MANAGEMENT/OPERATIONAL SAVINGS OPTIONS - 2025-26 APPENDIX 5 Saving £'000 FTE H/Count Saving £'000 FTE H/Count Saving £'000 FTE H/Count 2027-28Ref Service Area Saving Summary 2025-26 2026-27 LRS 001 25/26 Schools Contracts - NPDO/DBFM As part of contract management measures there has been a contractual review of the ongoing base budget requirements and the base can be reduced on a recurring basis going forward. 108 0.0 0.0 108 0.0 0.0 108 0.0 0.0 LRS 002 25/26 Elections The annual budget for elections of £36,751 covers the running costs of the election office £4,848 with the balance of £31,903 being available to fund by- elections for the Council and Community Councils. Given that these are unpredictable and as such outwith our control it is proposed that this is treated as a centrally funded cost pressure going forward with the budget of £31,903 being removed from the core budget. 32 0.0 0.0 32 0.0 0.0 32 0.0 0.0 Loans Fund Loans Fund A detailed review of the loans fund will be undertaken, however, it is anticipated that a one-off saving of at least £0.500m will be achievable within 2024-25 that could be earmarked and used to balance the 2025-26 budget. The saving is a result of slippage in the capital programme and a better return on interest rate estimates. 500 0.0 0.0 0 0.0 0.0 0 0.0 0.0
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MANAGEMENT/OPERATIONAL SAVINGS OPTIONS - 2025-26 APPENDIX 5 Saving £'000 FTE H/Count Saving £'000 FTE H/Count Saving £'000 FTE H/Count 2027-28Ref Service Area Saving Summary 2025-26 2026-27 Funding Funding After the Council set its 2024/25 budget, the SG allocated the Island Cost Crisis Funding that was to be used to support increasing service costs in islands. As our budget was already set, this funding was set aside and can be carried forward and used to help balance the 2025/26 budget on a one-off basis. 564 0.0 0.0 0 0.0 0.0 0 0.0 0.0 2,102 0.0 0.0 990 0.0 0.0 1,029 0.0 0.0
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POLICY SAVINGS OPTIONS - 2025-26 APPENDIX 6 Saving £'000 FTE H/Count Saving £'000 FTE H/Count Saving £'000 FTE H/Count RIS 001 25/26 Roads and Infrastructure Services A reivew of Roads and Infrastructure is currently being carried out. Stage 1 was reported to EDI in June 2024 and Stage 3- 4 are progressing. Savings are expected to be identified and Members will be asked to agree each saving option when it is identified. The savings figure represents a target level of savings. 300 tbc tbc 800 tbc tbc 800 tbc tbc EDU 001 25/26 Education Services Education Service are about to commence a review of the service, in a similar way to Roads and Infrastructure. The savings figure represents a target level of savings for Year 1 only at this stage, as the review progresses, further savings will be identified. 200 tbc tbc 200 tbc tbc 200 tbc tbc CPD 001 25/26 Community Planning and Development Staffing efficiencies through workforce planning and service re-shaping to better meet needs from communities on assets and funding. 38 1.0 1.0 63 1.0 1.0 63 1.0 1.0 DEG 001 25/26 Development Policy Re-organisation of the service and the posts therein that carry out specific functions creating a better structure for the future. 44 1.0 1.0 44 1.0 1.0 44 1.0 1.0 2026-27 2027-28Ref Service Area Saving Summary 2025-26
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POLICY SAVINGS OPTIONS - 2025-26 APPENDIX 6 Saving £'000 FTE H/Count Saving £'000 FTE H/Count Saving £'000 FTE H/Count 2026-27 2027-28Ref Service Area Saving Summary 2025-26 DEG 002 25/26 Development Projects (Planning) Introduction of new charges for returned applications, retrospective planning applications and discharge of planning conditions/confirmation of compliance. For future years assumed increase income as a result of SG review of statutory planning fees. 45 0.0 0.0 45 0.0 0.0 145 0.0 0.0 LRS 003 25/26 Governance Following a review of the Governance Team it is proposed to take advantage of a retirement within the team to re- structure. The revised team structure will allow for better use of available resource and ensure that key priority areas service levels are maintained. 33 2.0 2.0 44 2.0 2.0 44 2.0 2.0 LA 001 25/26 Live Argyll 10% cut to Live Argyll Management Fee - savings options to deliver this level of saving will be determined by the Live Argyll Board. 311 tbc tbc 311 tbc tbc 311 tbc tbc CS 001 25/26 Community Sport Removal of payments to Camanachd Association and Scottish Rugby at £10,000 each. 20 0.0 0.0 20 0.0 0.0 20 0.0 0.0 991 4.0 4.0 1,527 4.0 4.0 1,627 4.0 4.0
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2025-26 BUDGET PREPARATION – SAVING OPTION Executive Director with Responsibility for Roads and Infrastructure Ref: RIS 001 25/26 Service Delivery Area Roads and Infrastructure Saving Target Detail of Savings Proposal During 2023/24 external consultants carried out a full review of the Roads and Infrastructure Service. Findings from stage 1 were reported to the EDI Committee, and subsequently the Council approved that officers move onto the next stages of the Review. Officers will now examine the recommendations in detail and opportunities for service improvements. Delivery of savings and detailed proposals on how the savings target will be met will be brought forward throughout 2025/26 for members approval and a target figure of £300k has been set. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 300 X X 800 X X 800 X XX
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2025-26 BUDGET PREPARATION – SAVING OPTION Executive Director with Responsibility for Education Ref: EDU 001 25/26 Service Delivery Area Education Saving Target Detail of Savings Proposal Given the many challenges currently faced by the Education Service it is essential to ensure that our service design and delivery model is both efficient and effective. Our goal is to achieve improved outcomes for our children and young people, while also providing best value and supporting the Council’s ongoing financial savings requirements. Therefore a review of the Education Service is being commissioned which will address the Service’s current structure, identify potential savings, as well as ideas for further innovation, collaboration, commercialisation, externalisation and/ or participatory budgeting of elements of the Service. As the review is in the early stages an estimated savings figure of £200k has been identified for 2025-2026. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 200 X X 200 X X 200 X XX
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2025-26 BUDGET PREPARATION – SAVING OPTION Chief Executive Ref: CPD 001 25/26 Service Delivery Area Community Planning and Development Saving Target £63k Detail of Savings Proposal Over the past few years we have been doing the following in preparation of asks to reform service and deliver differently to meet council priorities within the reducing budgets: Tests of change- income, collaboration • Trialling delivering CPP to another council through SLA • Initiating trial linking health improvement work (HSCP/NHSH) and community development work to support community organisations. • Creating shared budget posts for project work in CPP • External funding around posts, i.e. levelling up. Digital • Online tools and resources for community organisations • Online collaborative space, Basecamp, to enable partnership document sharing and communication Workforce -Trialling tests of change within team, • Team members trained in supporting communities on assets/ asset transfer, to strengthen offer and test this to come from the community development resource (x 4 officers) rather than one dedicated officer. • Knowledge transfers from post preparing for retirement and trials of work packages into different parts of team e.g. enhancing offer of funding support to communities by testing this in another area of team. Savings proposals are from the results of the above: Year 1 (2025-26) – £38k staffing efficiencies through workforce planning and service re-shaping to better meet needs from communities on assets and funding. Year 2 (2026-27) £25k test of change – collaborative working between NHS and Council Community Development service to support the capacity of community organisations who’s purpose supports people at most vulnerable stages such as those experiencing addictions, into positive outcomes. ‘One authority’ approach to setting up systems to address prevention, social need, community capacity, community-led recovery. This builds on test of change from 2024/25 joining health improvement and community development approaches to empower communities and those most in need.
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Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 38 1 1 63 1 1 63 1 1
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2025-26 BUDGET PREPARATION – SAVING OPTION Head of Development and Economic Growth Ref: DEG 001 25/26 Service Delivery Area Development Policy Detail of Savings Proposal Re-organise department: Re-organising the team will result in a better designed and more efficient team structure. The current Development Management team already possess the necessary expertise which will continue to develop over time. Existing Development Policy staff have the required expertise, even if not in full time roles. Re-organising will create a better structure for succession planning and a saving of £44k can be delivered by 2025/26. • Delete 1 Senior Strategies Office at LGE12 to create one LGE13 post to act as team lead for whole of Development Policy including GIS, planning policy and the specialists. • The other Senior Strategies Officer at LGE12 takes responsibility for LDP3 delivery and planning officers. • Delete vacant LGE11 Conservation and Design Officer post. If and when expertise is required this will be obtained from consultants (this cost can be capitalised in project work if supporting regeneration activity). Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 44 1 1 44 1 1 44 1 1
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2025-26 BUDGET PREPARATION – SAVING OPTION Head of Development and Economic Growth Ref: DEG 002 25/26 Service Delivery Area Development Projects Detail of Savings Proposal Development Management (DM): Increased Fee Income from Future Scottish Government Review of Statutory Planning Fees: Potential Saving: Increased Income £100k from April 2027 The Scottish Government have set out the aspiration that development management activity (i.e. the processing of planning and related applications) should be undertaken on a full cost recovery basis. Based on the 2024/25 budget for DM additional surplus income of £115k would be required to reach a cost recovery position for DM and Planning Enforcement activities. Whilst planning fee regulations have recently been updated in 2022, the Scottish Government have subsequently acknowledged that the current statutory fee structure still does not support full cost recovery across Scotland and have provided an undertaking for further review of statutory fees although there is no firm commitment as yet on the timescale for this to be realised. The Scottish Government have also indicated that with any increase in fee income there will also be an expectation that additional funds will be invested in the improvement of performance. Accordingly, it is proposed that any further saving to be drawn from an increase in statutory planning fee income is deferred until 2027/28 and may require to be reviewed in respect of any commitment imposed by the Scottish Government in relation to performance improvement. Introduction of Administration Charge for Returned Applications: Proposed Saving: Additional Income £10k from April 2025 The Development Management Service currently return an average of 200 planning and related applications per annum that have been submitted but which fail to meet the minimum legal criteria for consideration and determination. At present the cost of administering the registration and validation check of returned applications is borne entirely by the Council. The introduction of a £50.00 administration charge would generate additional income of approx. £10k per annum which is currently lost when planning fees are returned with the invalid application. There would be no additional cost to the Council in implementing this saving as this additional income would be raised by deducting the administration charge prior to returning an application and the balance of any statutory planning fee. Introduction of a Surcharge for Retrospective Planning Applications: Proposed Saving: Additional Income £10k April 2025 The Town and Country Planning (Fees for Applications)(Scotland) Regulations 2022 introduced scope for a planning authority to impose a surcharge on retrospective applications for planning permission as a means of discouraging this type of submission through the imposition of a financial disincentive for beaching planning control and seeking to regularise this at a later date.
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The Fee Regulations set out that the surcharge can be a maximum of 25% of the statutory fee payable. In order to implement the surcharge the Council would require to publish information that identifies how the surcharge is calculated and the circumstance in which it will be imposed. Based on a review of previous years income identified as a retrospective submission, the imposition of a 25% surcharge would be expected to raise additional income of £10k per annum. Introduction of a Discretionary Charge for Discharge of Planning Conditions / Confirmation of Compliance: Proposed Saving: Additional Income £25k from April 2025 A significant portion of 1000+ statutory planning and related permissions granted annually by the Council are subject to planning conditions which either seek to address a shortcoming in the information provided post determination, or to impose mitigation measures that are required to ensure that the development as built is compliant with the requirements of the Development Plan. The handling of post determination discharge of details pursuant to condition are an additional burden on both the admin and professional resource of the DM Service, as are requests from an applicant to confirm that mitigation measures have been satisfactorily completed. The Town and Country Planning (Fees for Applications)(Scotland) Regulations 2022 introduced scope for a planning authority to introduce discretionary charges in relation to providing written compliance with the terms of a planning condition. Benchmarking with other authorities would indicate that the imposition of a discretionary charge of £100 per submission is a reasonable cost for this service. Whilst the discharge of conditions is a regular activity within the Development Management Service the manner in which workflow and data is currently recorded for post determination submissions precludes detailed analysis. As a conservative estimate however it is expected that some 250 post determination requests to discharge conditions will be processed annually with potential income of £25k per annum. Development of workflow for the handling and recording of post determination submissions would be required prior to implementation but is expected to be capable of being addressed through adaption of existing IDOX/Civica systems. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 45 0 0 45 0 0 145 0 0
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2025-26 BUDGET PREPARATION – SAVING OPTION Head of Legal and Regulatory Support Ref: LRS 003 25/26 Service Delivery Area Governance Potential Savings Governance Team Following a review of the Governance Team it is proposed to take advantage of a retirement within the team to re-structure. This re-structure will see the deletion of one LEG 12 post and one LGE 7 post and the creation of an LGE 9 post. The revised team structure will allow for better use of available resource and ensure that key priority areas service levels are maintained. Total gross annual Saving with this option is £43,513 2025-26 2026-27 2027-28 £000 FTE H/Count £000 FTE H/Count £000 FTE H/Count Governance restructure 33 2.0 2 44 2.0 2 44 2.0 2
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2025-26 BUDGET PREPARATION – SAVING OPTION Head of Commercial Services Ref: LA 001 25/26 Service Delivery Area LIVE Argyll Saving Target 10% reduction in Management Fee Detail of Savings Proposal LIVE Argyll (LA) are a charitable trust which deliver a number of statutory and discretionary functions on behalf of the Council including Leisure, libraries, cultural services and learning development. Similar to previous years, this option, proposes a reduction to the annual management fee that is paid to LA by the Council. The management fee equates to 44% of LA operational costs with the remainder being underpinned by self-generated income (56%). There has been reduction in reliance on Management Fee in recent years from £4.07m to £3.2m whilst retaining full service provision. There was a 10% reduction in Management Fee in 2024/25 and as a result LA proposed a number of balancing actions in their Business Plan including a revised management structure, increasing income, closure / reduction of library services and utilisation of reserves, and these actions appear to have been implemented by LA. This option will require LA to produce a revised Business Care for Council to consider. It is possible that LA will come to a view that they make compulsory redundancies and this is a matter for them. It should be noted that the directors of the LA have a responsibility to ensure the ongoing viability of the company. Management Fee reductions alongside continuing unfunded cost pressures when taken in conjunction increases the risk of noncompliance and places a risk that directors deem the company no longer viable. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 311 Tbc Tbc 311 Tbc Tbc 311 Tbc Tbc
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2025-26 BUDGET PREPARATION – SAVING OPTION Head of Commercial Services Ref: CS 001 25/26 Service Delivery Area Community Sport – Shinty and Rugby Saving Target £20,000 Detail of Savings Proposal For over 10 years the Council have supported the development of community sport through the direct financial payment to Camanachd Association (CA) and Scottish Rugby (SR). In this year 2024/25 both SR and CA received a payment of £10,000 each. This figure has been consistent at this level for approximately 10 years. The funding is a joint partnership between CA / SR, Sport Scotland, Live Argyll and Argyll & Bute Council and it employs a dedicated Regional Development Officer in the Argyll & Bute Region to lead the plan for the promotion and development of each sport in Argyll & Bute. The 2x regional development officers (1 for each sport) work with Live Argyll, support schools (Active Schools) as well as local clubs to increase participation, improve accessibility to sport, improve the quality of development and support community development. There is no direct Council staff employed and agreement to fund the posts are on a 3-year basis but with 1 year funding support commitment. There is a high likelihood that the Regional Development Officers posts would be removed if any of the 3 funding partners pulled funding. Both CA and SR have been informed that this is a potential strategic savings option that is being considered. Camanachd Association The Camanachd Association have stated that Council funding supports Camanachd Association to: • Enhance shinty’s reach into communities through teacher training and collaboration with schools and active schools to maximise their contribution to shinty. • Empower young people to develop shinty participation and awareness in their community. • Foster corporate partnerships to further support the growth and development of shinty in Argyll and Bute. • Sustain and increase the number of boys and girls playing shinty that is inclusive for all. • Develop well organised run clubs and associations. • Recruit and train volunteers. Scottish Rugby SR have confirmed in January 2025 that the Council funding is essential to continue the Rugby Development Officer Post. The Argyll Post has been vacant for a few weeks but is currently out to recruitment with the outcome of this Savings Template now being a factor to Scottish Rugby to consider before appointment. The Development Officer works to:-
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• Extend rugby’s reach through collaboration with schools, teachers, and active schools programs to increase participation. • Empower young people to grow rugby’s presence and visibility within their communities, through developing local leaders and national and regional youth panels. • Build corporate and community partnerships that strengthen rugby’s foundation and future. • Sustain and grow the number of boys and girls participating in inclusive rugby activities. • Support the development of well-organized and high-performing clubs. • Recruit, train, and empower volunteers essential to the sport's development. It is likely the SR DO would cease with near immediate effect if this saving is made subject to appropriate notice or freeze on the current recruitment. Saving 2025-26 2026-27 2027-28 £000 FTE H/Count Cumulative £000 FTE H/Count Cumulative £000 FTE H/Count 20 0 0 20 0 0 20 0 0
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APPENDIX 7 SERVICE SUMMARY OF BUDGET POSITION 2025-26 Department Service 2024-25 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 DEFRA Finance Order Updates Post Meeting Adjustments Preprofiling 2024-25 Draft Budget £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Council Departments: Chief Executive's Unit Chief Executive 900 5 0 905 51 0 0 0 (38) 0 0 0 0 0 918 Executive Director (Douglas Hendry) Executive Director (Douglas Hendry) 29 2 0 31 25 0 0 0 0 0 0 0 0 0 56 Executive Director (Douglas Hendry) Head of Commercial Services 10,265 171 0 10,436 595 155 0 0 (466) 0 0 0 0 0 10,720 Executive Director (Douglas Hendry) Head of Education 115,495 1,990 2,700 120,185 4,589 337 797 0 (201) 0 0 0 0 0 125,707 Executive Director (Douglas Hendry) Head of Legal and Regulatory Support 21,228 37 0 21,265 247 377 0 0 (342) 0 0 0 0 0 21,547 Executive Director (Kirsty Flanagan) Executive Director (Kirsty Flanagan) (366) 2 0 (364) 20 0 0 0 0 0 0 0 0 0 (344) Executive Director (Kirsty Flanagan) Head of Customer Support Services 8,794 59 0 8,853 573 124 115 0 (27) 0 0 0 0 0 9,638 Executive Director (Kirsty Flanagan) Head of Development and Economic Growth 7,897 110 (23) 7,984 554 64 40 0 (128) 0 0 0 0 0 8,514 Executive Director (Kirsty Flanagan) Head of Financial Services 6,756 (31) 123 6,848 410 51 40 0 (132) 0 0 0 0 0 7,217 Executive Director (Kirsty Flanagan) Head of Roads and Infrastructure Services 33,315 348 190 33,853 1,301 1,327 2,893 0 (1,340) 0 (1,348) 0 0 0 36,686 0 0 0 0 0 0 0Non Departmental: 0 0 0 0 0 0 0 Joint Boards Joint Boards 1,458 (114) 0 1,344 0 35 147 0 0 0 0 0 0 0 1,526 Other Operating Income & Expenditure Elected Members 1,199 33 0 1,232 272 0 0 0 0 0 0 0 0 0 1,504 Other Operating Income & Expenditure Sundry Services 577 1,399 0 1,976 37 39 0 0 0 0 0 0 0 0 2,052 Other Operating Income & Expenditure Unfunded Pensions 1,554 0 0 1,554 0 0 0 0 0 0 0 0 0 0 1,554 0 0 0 0 0 0 0Non Controllable Costs: 0 0 0 0 0 0 0 Insurances 1,989 0 0 1,989 0 459 309 0 0 0 0 0 0 0 2,757 Non Domestic Rates 5,091 300 0 5,391 0 10 68 0 0 0 0 0 0 0 5,469 Apprenticeship Levy (Council) 612 7 2 621 12 0 0 0 0 0 0 0 0 0 633 Capital Charges (loans charges) 7,967 0 0 7,967 0 0 362 0 0 0 0 0 0 0 8,329 0 0 0COUNCIL TOTAL 224,760 4,318 2,992 232,070 8,686 2,978 4,771 0 (2,674) 0 0 0 0 244,483 Health and Social Care Partnership: Social Work Chief Officer (3,245) 0 2,278 (967) 36 0 0 0 0 (1,093) 0 0 0 0 (2,024) Social Work Acute and Complex Care 21,474 0 0 21,474 350 0 0 0 0 0 0 0 0 0 21,824 Social Work Children & Families 15,200 0 0 15,200 1,060 0 0 0 0 0 0 0 0 0 16,260 Social Work Health and Community Care 43,289 0 257 43,546 1,370 0 0 0 0 0 0 0 0 0 44,916 Social Work Strategic Planning and Performance 486 0 0 486 30 0 0 0 0 0 0 0 0 0 516 0 0SOCIAL WORK TOTAL 77,204 0 2,535 79,739 2,846 0 0 0 0 (1,093) 0 0 0 0 81,492 Rounding 1 TOTAL 301,964 4,318 5,527 311,809 11,532 2,978 4,771 0 (2,674) (1,093) 0 0 0 0 325,976 Funding: Scottish Government Funding 259,134 Scottish Government Funding for ENICs 2,578 Council Tax Income 69,570 Saving Options Funded by Reserves 1,064 Transfer from Reserves to General Fund 1,558 Balance to Reserves - Council (6,875 one off pension saving less 2,000 released for 25-26) (4,875) Social Work - one off pension saving to be held in Council reserves (3,053) OVERALL FUNDING SURPLUS / (GAP) 0
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Appendix 8 FUNDING REQUESTS 1. Introduction 1.1 Funding requests have been received to be considered as part of the Budget as outlined below. 2. MacTaggart Leisure Centre, Islay 2.1 During the budget process over the past two years MacTaggart Leisure Centre in Islay has benefited from a £30,000 uplift in their Service Level Agreement Payment. The Leisure Centre have said that the extra £30,000 above the Service Level Agreement has kept them afloat over the last 2 years. 2.2 The ever rising costs to run the Centre, electricity, utility bills, chemicals, insurance and staffing costs are becoming even more of a challenge and difficult to find the extra monies to cover these rising costs. The Centre also had unexpected plant faults, and it was essential they were repaired. 2.3 The waste heat from the Distillery has also contributed to their financial challenges, with the Distillery stopping production during August and October (and for a month at Christmas). When the Distillery started back up on 22 October, the Centre was not able to utilise the waste heat again due to the return flow pipe being burst underground to the Distillery from the Centre. The implications of this are that the Centre are now relying on oil usage which costs significantly more. The engineer working on this fix has advised that it is not a quick fix and as at January the Centre were still waiting on timescales for the repairs. 2.4 The Centre have asked for another year of the extra £30,000 due to the outcomes of this financial year being more financially challenging for the Centre than predicted. 2.5 The request is for funding of £30,000. Members are asked to consider this request and how it would be funded. 3 Argyll and Isles Tourism Cooperative (AITC) 3.1 Argyll and Isles Tourism Cooperative has received vital financial support from Argyll and Bute Council over a number of years. Combined with membership fees and other grant support, they have invested in campaign and search engine optimisation (SEO) content development. Primary websites Wild About Argyll and Love Oban, significantly uplift the reach of new and existing visitors and support businesses across the sector.
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3.2 This investment has led to the best visitor reach they have achieved in their 13- year tenure, meaning the destination is reaching and inspiring more visitors than ever before. • Over 500,000 unique visitors to our websites, delivering over 1m user sessions. • Almost 50,000 social media followers. • A newsletter database of 500+. 3.3 Recent visitor data for 2024 suggests that visitor numbers to Scotland are down from 2023 due to wider factors such as ongoing ferry issues, poor weather, the cost of living subduing the domestic visitor market, and rising business costs. AITC comment that they must continue to market the destination with VisitScotland to ensure that Argyll and Bute continue to enjoy the significant economic impact our visitors bring. 3.4 AITC will continue to support businesses with understanding and implementing (if applicable) the Visitor Levy and will continue to provide learning opportunities around the following themes: • Marketing practices • Social media content development • PR and media relations. 3.5 The budget requested to support the overall delivery of the marketing activities for 2025-26 will be delivered by the AITC team and specialist partners as required. Funds will be drawn from membership fees paid to AITC and requested £75,000 grant from Argyll and Bute Council. Grants from VisitScotland and other parties may be utilised if available. Where possible, they will use existing assets and repurpose relevant content. They will seek additional assets and campaign opportunities via key regional partners. The £75,000 Argyll and Bute Council grant is anticipated to be apportioned as follows. 3.6 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. Bloggers, 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. Campaign delivery 32,500
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Business support initiatives 5,000 TOTAL £75,000 3.7 The request is for funding of £75,000 and further information related to this request has been emailed to all Members on 13 February 2025. Members are asked to consider this request and how it would be funded. 4 Culture, Heritage and Arts Assembly, Argyll and Isles (CHARTS) 4.1 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 2025-26. This will be used to enable development their delivery plan 2025-26, building resilience and profile across the region's culture, arts and heritage sector. It aims to drive the sector forward and build on the successes the organisation has achieved to date, including through the £75,000 support received from the Council in 2024-25. 4.2 Since 2020, CHARTS has generated an income in excess of £1.2m for the culture sector, building on a total of £325,000 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. 4.3 The Board recognises that this request to the Council is higher than those made in previous years and there is a distinct reason for this. It is now 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), has come to an end, leaving the organisation at risk with a digital structure which is neither suitable nor secure for sector and stakeholder communications or to assist the organisation in generating increased income to help sustain the sector. As a charitable organisation the Board is conscious of the need to diversify income streams and this is a priority as the organisation develops in order to become more sustainable, including with plans to develop ecommerce from 2025, it is vital to upgrade the website, and its visitor offer. 4.4 CHARTS strategy meets the ambitions of the Argyll and Bute Economic Strategy (2024 – 2034) with a focus on partnership and collaboration and delivers across the four strategic key pillars: People, Place, Planet and Prosperity. The organisation designs innovative projects and programmes to secure investment for training and work across the sector and is increasing its work with young people to assist to sustain the regions rich cultural assets. As a Placemaking organisation, CHARTS assists to build the profile of the region as an attractive place to live and work. The organisation continually addresses the decline in the economically active population, improving workforce skills for members and stakeholders. CHARTS attracts highly experienced staff to project management roles, and promote equal access to education opportunity, project commissions and awards, supporting economic opportunities that help to sustain cultural businesses and creative ambition.
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4.5 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 and which has wide impact on skills development, supporting young people and other sectors such as tourism and food and drink, which they have been able to demonstrate across recent years through collaborations and commissioning. Their work not only aligns with a key aim of the Council’s Economic Strategy 2024-2034, but also other key national and local government strategies including the Visitor Economic Regional Growth Strategy, and the Argyll and Isles Strategic Tourism Partnership Visitor Economy Recovery and Growth Strategy, to support the future sustainability of the Argyll and Bute creative industries. 4.6 The request is for funding of £95,000 and further information related to this request has been emailed to all Members on 13 February 2025. Members are asked to consider this request and how it would be funded. 5 Loch Lomond and the Trossachs National Park – West Highland Way 5.1 Following many months of discussions and agreement amongst the West Highland Way Management Group partners, a new charitable body – the West Highland Way Trust – was registered with OSCR in October 2024. The charity is currently being set up and once it is fully operational, it will provide additional fundraising and income generation opportunities to support the Access Authorities to maintain the route. 5.2 As a short-term action to ensure that the Trust has a solid base to build from, there was agreement that contributions from each Access Authority would provide value for money and, to that end, so far Highland Council and National Park Authority have committed funding of £10,000 each for financial year 2024-25 and 2025-26. As a partnership they are seeking similar from Argyll and Bute, Stirling and East Dunbartonshire Councils. The ask, at this time, to Argyll and Bute Council is a one-off £10,000 contribution. NatureScot has also responded positively in terms of some financial support for this new way to help sustain the management and maintenance of long-distance routes. 5.3 The Trust presents an opportunity to significantly support the work of the public bodies, including financially, to ensure the West Highland Way is kept maintained to the appropriate standard so the communities and businesses along the route can continue to benefit from this key asset, along with ensuring access to and protection of the surrounding nature and environment. For the avoidance of doubt, the intention is that the working group of Access Authority staff continues to operate to support collaborative management, maintenance and investment for the whole route. In time, this group should be supported financially by the Trust with the increased revenue generation. 5.4 The whole ethos of the Trust is to pursue fundraising opportunities that would otherwise be unavailable to Access Authorities, so it is hoped that the Council would see this as a spend to save scenario in the longer term.
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5.5 The request is for funding of £10,000 and further information related to this request has been emailed to all Members on 13 February 2025. Members are asked to consider this request and how it would be funded.