Budget Outlook 2025-26 to 2029-30
Argyll and Bute Council · 5 December 2024
Back to Policy and Resources Committee — 5 December 2024 and its agenda
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 5 DECEMBER 2024 BUDGET OUTLOOK 2025-26 TO 2029-30 1. EXECUTIVE SUMMARY 1.1 This report provides an update to the budget outlook covering the period 2025- 26 to 2029-30, reported to the Policy and Resources Committee on 10 October 2024. 1.2 The estimates within the report are based on the mid-range scenario with best and worst case scenarios noted in Appendix 1. 1.3 The assumptions in respect of future years Scottish Government funding remain unchanged from those reported previously and range between flat cash (best case) and 1% reduction (worst case) with a mid-range of 0.5% reduction. This assumption is based on the settlement over the last few years and with the most recent year 2024-25 being a 0.5% reduction. The UK Budget was announced on 30 October and the Barnett consequentials coming to Scotland are £3.4 billion in 2025-26, of which £2.8 billion is resource spending and £0.6 billion is capital. It is expected that a substantial element of the resource spending may be ring-fenced for NHS, but it remains to be seen what benefit may come to Local Government. The Scottish Government budget is due to be announced on 4 December. 1.4 There are two additional elements of funding that have been included within the funding section, the first relates to the Scottish Government commitment to fund the increase to the pay award over 3.2% for both the Teachers Pay Award and the SJC Pay Award. The second relates to the increase in Employer’s National Insurance Contributions announced at the UK Budget. It is anticipated that this increase will be fully funding and funding has therefore been assumed equal to the increased costs. 1.5 There are no changes to the Council Tax assumptions from those previously reported. 1.6 There have been two changes to the base budget; the budget required for Joint Boards was higher than required and £0.114m has been removed from the base budget and the NDR rate poundage increase for 2024-25 was not included in the budget and this requires to be right-sized by increasing the budget by £0.300m. 1.7 The employee cost changes section has been updated to reflect the fully costed staffing establishment exercise that has been undertaken by financial services. This exercise has provided more accurate estimates for pay inflation and increments and reconciles any changes to the base budget. Whilst the employee base budget has increased by £0.128m, the employee costs
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changes (excluding increase in employers National Insurance contributions) represent a decrease of £0.518m on the previous estimate reported in October. 1.8 As referred to in paragraph 1.4, the UK Budget announced an increase in Employer’s National Insurance Contributions from 1 April 2025 and this has been costed for Council staff and amounts to an increase of £3.441m within 2025-26. It is anticipated that this should be fully funded. 1.9 For non-pay inflation, the estimate has decreased by £0.154m to that reported in October. The most significant movements relate to a new pay inflation in respect of non-domestic rates, which has been offset by the remove of the contingency for unidentified/insufficient inflation within 2025-26. 1.10 There are a number of cost and demand pressures for Council services built into each scenario. Changes to these pressures since the report on 10 October 2024 are: Amended – Bus Transport Contracts – a review of the bus contracts due for renewal within 2025-26 has been undertaken and an estimate of the likely renewal increase as been made based on the renewals within 2024-25. The pressure for 2025-26 has increased by £0.858m. NEW - 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. Increased budget required for 2025-26 amounts to £0.500m. Amended – In light of the budget gap, cost/demand pressures identified that are £0.020m or under have been removed and services will look to absorb these within existing resources. These amount to £0.043m in 2025-26. Amended – the £0.500m contingency that was built into account for cost pressures not yet identified has been removed for 2025-26 as we are almost 9 months through the year and most pressures for 2025-26 should have been identified. 1.11 There will be a political decision to be made as to the future allocation to the Health and Social Care Partnership. As part of the budget in February 2024 an indicative flat cash allocation for 2025-26 was agreed and this has now increased as follows: HSCP’s share of the Children’s Social Care Pay Uplift - £0.180m HSCP’s share of the pay award funding from Scottish Government - £0.339m HSCP’s share of the anticipated Employer’s National Insurance Funding - £0.899. From 2026-27 and increase of £3.053m to account for the cessation of the one-off saving in relation to the Strathclyde Pension Fund. 1.12 The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustments, non-pay inflation, cost and demand pressures and not factoring in any previous savings decisions or future potential options is an estimated gap over the five year period of £52.006m with
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a gap of £14.872m in 2025-26. 1.13 The measures to balance the budget over the next five years are as follows: Policy savings already agreed by Council in February 2024. Management/Operational savings already agreed by Council February 2024. Release of Earmarked Reserves as agreed by Council in September 2024. Proposed increase to fees and charges of between 3% and 9% (6% mid- range). New Management/Operational and New Policy options presented by Officers for consideration as part of the budget in February 2025. Proposed increase to Council Tax (5% increase in 2025-26 in the mid and worst case scenarios rising to 7% in the best case scenario, with a 5% increase in all scenarios in future years). 1.14 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £27.718m with a gap of £6.448m in 2025-26. 1.15 The budget gap in the best case scenario over the five years is £14.303m with a gap of £3.123m in 2025-26 and in the worst case scenario, the budget gap over the five years is £66.067m with a gap of £12.633m in 2025-26. A summary of all three scenarios is included within Appendix 1. 1.16 It is recommended that the Policy and Resources Committee: a) Consider the current estimated budget outlook position for the period 2025- 26 to 2029-30. b) Note that the budget outlook now includes new management/operational and policy options presented by officers for consideration as part of the budget in February 2025. It should be further noted that detailed templates will be provided to Council for all new policy options and included within the budget pack.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 5 DECEMBER 2024 BUDGET OUTLOOK 2025-26 TO 2029-30 2. INTRODUCTION 2.1 This report provides an update to the budget outlook covering the period 2025- 26 to 2029-30, reported to the Policy and Resources Committee on 10 October 2024. 2.2 The budget outlook has been prepared using three different scenarios, best case, worst case and mid-range. Relatively small variations in assumptions can lead to fairly significant changes in the outcome. In the paragraphs that follow, the mid-range outlook is shown, however, all three scenarios are detailed within Appendix 1. 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Consider the current estimated budget outlook position for the period 2025- 26 to 2029-30. b) Note that the budget outlook now includes new management/operational and policy options presented by officers for consideration as part of the budget in February 2025. It should be further noted that detailed templates will be provided to Council for all new policy options and included within the budget pack. 4. DETAIL 4.1 Funding Scottish Government Finance Settlement 4.1.1 There are no changes to my previous assumptions around the level of future Scottish Government funding at this stage. The UK Budget was announced on 30 October and the Barnett consequentials coming to the Scottish Government’s budget resulting from the UK Budget changes amount to £3.4 billion for 2025-26, of which £2.8 billion is resource spending and £0.6 billion is capital. It is expected that a substantial element of the resource spending relates to boosts to NHS funding which is likely to be ring fenced by the Scottish Government. Whilst the consequentials appear to indicate an increase, the detail will not be known until the Scottish Government budget, due to be announced on 4 December, with individual Local Government allocations the following week, around 11 December. The funding assumptions at this stage continue to be set between a 1% reduction (worst case) and flat cash (best case) with a mid-range reduction of 0.5%.
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4.1.2 As reported previously to Policy and Resources Committee, in respect of the Children’s Social Care pay uplift, the Scottish Government notified us in June 2024 of Argyll and Bute Council’s share of the £19.861m funding provided which totalled £0.243m. £0.180m of this funding is a straight pass through to the HSCP, therefore the payment made to them will be adjusted accordingly, and £0.063m is for the Education Service. The base budget for Education will be increased accordingly to pay for the uplift therefore this additional funding has no overall impact on the budget gap. 4.1.3 The Scottish Government agreed to fund the increase over 3.2% for both the Teachers Pay Award and the SJC Pay Award for 2024-25 and committed that this funding would be recurring. It was advised that for Teachers funding of £43m would be distributed (our expected share to be 1.53%) and for SJC £77.5m (our expected share to be 1.769%). In respect of SJC funding, this will be for both the Council and the HSCP and it is expected that we will pass through the share to the HSCP. The table below summarises the funding: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Teachers Pay Funding £43m (ABC 1.53%) 658 655 652 649 646 SJC Pay Funding £77.5m (ABC 1.769%) 1,371 1,364 1,357 1,350 1,343 Total 2,029 2,019 2,009 1,999 1,989 SJC Split: Council 1,032 1,027 1,022 1,017 1,012 SJC Split: Social Work 339 337 335 333 331 4.1.4 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 at the Budget does not reflect this additional support. HM Treasury will lead a technical process, which will include consultation with Devolved Governments, to understand requirements in more detail. At this stage it is assumed that the increase will be fully funded and this is calculated as £4.340m for 2025-26 (Council and HSCP). The futures years figures have been adjusted in line with the Scottish Government grant assumptions. There is a risk that Scotland will not get sufficient funding to cover all the increased costs and there is a risk in respect of distribution. The estimates are outlined in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000
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Estimated NIC Funding – Council Share 3,441 3,424 3,407 3,390 3,373 Estimated NIC Funding – Social Work Share 899 895 891 887 883 Total 4,340 4,319 4,298 4,277 4,256 4.1.5 The table below summarises the mid-range scenario estimates based on a 0.5% settlement reduction each year. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated SG Funding 244,657 243,434 242,217 241,006 239,801 Children’s Social Care Pay Uplift 243 243 243 243 243 2024-25 Pay Funding recurring in future years 2,029 2,019 2,009 1,999 1,989 Funding for Employers National Insurance Increase 4,340 4,319 4,298 4,277 4,256 Total Estimated SG Funding 251,269 250,015 248,767 247,525 246,289 Council Tax 4.1.6 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. 4.1.7 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 it 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. 4.1.8 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. 4.1.9 As reported previously, 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 higher in the first two years of inception dropping down to an almost steady state from 2025-26 onwards.
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4.1.10 Within this report, I will present the budget gap, prior to any Member based decisions and therefore at this stage in the report, the Council tax base is assumed to remain at the same level as 2024-25. General Fund 4.1.11 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. 4.1.12 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. 4.1.13 The table below summarises the estimated total funding in the mid-range scenario. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated SG Funding 251,269 250,015 248,767 247,525 246,289 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 4.1.7) (149) (147) (145) (143) (143) 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 Estimated Funding 307,270 316,263 313,336 312,416 311,502 4.2 Base Budget 4.2.1 The 2024-25 budget approved by Council on 22 February was £301.885m. An amendment in respect of re-running the Council Tax annual billing amounting to £0.080m was agreed on 15 April 2024 resulting in a revised base budget of £301.965m. 4.2.2 Adjustments are then made to the base budget for one-off items agreed as
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part of the 2024-25 budget that should be removed from the base going forward. 4.2.3 In 2023-24 a £1.4m contingency was set aside for inflationary pressures, £0.936m of which was allocated to cover increased utility costs for 2024-25 based on projections at that time. However, based on actual costs at the end of 2023-24 it is estimated that £0.200m of this can be returned to the General Fund in 2024-25 resulting in a reduction to the base budget. 4.2.4 The budget required for Joint Boards was higher than required and £0.114m can be removed from the base budget from 2025-26. 4.2.5 The NDR rate poundage increase for 2024-25 was not incorporate into the budget which has result in an overspend within 2024-25. It is estimated that an additional £0.300m requires to be added into the base to right-size the Non- Domestic Rates budgets. 4.2.6 The base budget reflecting the changes above is noted in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 2024-25 301,965 301,965 301,965 301,965 301,965 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 back to the general fund (200) (200) (200) (200) (200) Adjustment to Joint Boards (114) (114) (114) (114) (114) NDR Poundage 2024- 25 300 300 300 300 300 Revised Base Budget 303,515 303,515 303,515 303,515 303,515 4.3 Employee Cost Changes Pay Award 4.3.1 The SJC and Chief Officers pay awards are being implemented for 2024-25 with Councils having to provide 3.2% towards the pay award and Scottish Government providing the remaining funding. (There is a risk that this could be re-opened but this is expected to be a low risk at this stage.) 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 previous budget outlook reflected the increases required to fund the 3.2% level. 4.3.2 For future years, the previous assumption of a 2% increase remains unchanged. The best case scenario also remains at a 2% increase (on the
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basis that the increase is not likely to be less than this) and the worst case scenario assumes a 5% increase. The pay assumption is very difficult to predict but there is an expectation as general inflation reduces that pay inflation will also reduce, however, there remains a risk that the pay award could be higher and this will be monitored and updated as necessary. Every 1% over and above what is budgeted would add an additional pressure of circa £1.5m. 4.3.3 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 within the budget outlook. Discussions continue between the Scottish Government and the Scottish Local Authority Remuneration Committee (SLARC) regarding Councillors remuneration which may have a further impact on the budget outlook position and will be included within the budget estimates at a later date if required. Increments 4.3.4 The cost of employee increments have been updated following the salary template exercise. The previous assumed cost was £0.605m in 2025-26 and this has now reduced to £0.595m. 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 4.3.5 As detailed in the budget pack presented to Council in February 2024, the employer contribution rate paid to the Strathclyde Pension Fund will fall from 19.3% to 6.5% in 2024-25 and 2025-26 and rise to a sustainable long-term rate of 17.5% in the 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 4.3.6 As part of the 2023-24 Local Government Finance Settlement the Scottish Government held back £45.5m on the condition that Council’s maintained teacher numbers at the 2022 census level. The December 2023 census showed a reduction in teacher numbers of 160. Ultimately, Scottish Government released the £45.5m to all local authorities, regardless of whether they maintained teacher numbers. Scottish Government has, for 2024-25, removed £145.5m from the General Revenue Grant and has instead issued this as a specific grant, conditional on maintaining teacher numbers at the level set out in each Council’s grant letter. For Argyll and Bute Council this is £2.1m and there is an expectation that we will maintain 848 teachers, this was the figure returned in the 2023 census and 13 teachers more than in the base budget. To maintain a figure of 848 teachers would result in a cost pressure of £0.880m. Discussions are continuing between COSLA and the Scottish
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Government and at this stage the additional cost has not been added into the budget outlook but there remains a risk that if we do not maintain the teacher numbers in our grant letter then some or all of the specific grant could be withheld. Detailed Employee Costing Exercise 4.3.7 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. 4.3.8 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, 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 £0.128m. (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. 4.3.9 Whilst there is an increase to the employee base the pay award and the increments budgets have been refined now that we have an updated fully costed establishment and there is a reduction to the previous estimates of £0.518m. Employer’s National Insurance Increase 4.3.10 With reference to paragraph 4.1.3, as part of the UK Budget there are increases to Employers National Insurance Contributions effective from 1 April 2025. The increase, which is assumed to be fully funded, amounts to £3.441m for Council staff and is summarised in the table below. It should be noted that these figures exclude Social Work. £000 Increase from reduction in threshold 2,140 Increase from increase in rate from 13.8% to 15% 1,301 Total 3,441 4.3.11 The table below summarises the employee cost movements in the mid-range scenario for Council services which are now updated following the conclusion of the detailed employee costing exercise. The increases reflect the gross increase as a result of the pay award and funding for the 2024-25 pay awards above the 3.2% level is outlined in the funding section of this report. The employee cost increases relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.6.
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2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Pay Award 2025-26 2,837 5,878 8,980 12,144 15,371 Pay Award – Elected Members 33 33 33 33 33 Increments 595 1,190 1,785 2,380 2,975 Children’s Social Care Pay Uplift – Education (para 4.1.2) 63 63 63 63 63 2024-25 Pay Base Adjustments 2,617 2,617 2,617 2,617 2,617 Full year effect of 2024- 25 pay award for teachers in 2025-26 base 0 496 496 496 496 Increase to Employers National Insurance 3,441 3,424 3,407 3,390 3,373 Change to employee base for 2025-26 128 128 128 128 128 Increase in costs after one-off reduction in Strathclyde Pension Fund rate ceases 0 6,875 6,875 6,875 6,875 Total Employee Cost Changes 9,714 20,704 24,384 28,126 31,931 4.4 Non-Pay Inflation 4.4.1 The Council only include non-pay inflation within the budget where it is deemed to be unavoidable or inescapable. In terms of the budget outlook, unavoidable/inescapable non-pay inflation is built into the best case and mid- range scenarios with a general inflation allowance over and above this built into the worst case. 4.4.2 Officers continue to review areas of non-pay inflation on an ongoing basis. The principle of only budgeting for unavoidable/inescapable remains, however, it has to be noted that in this current financial climate, some budgets with no inflation allowed for are now stretched beyond the point of containing the cost within budget and therefore the budget will now buy less than what it used to be able to buy (so in effect, we will see some cuts as a result). 4.4.3 When creating a budget outlook for future years, there is a risk that inflation assumptions could change during the year. Due to the current inflation uncertainty, it would be prudent to include a contingency for other inflation increases not included in the calculations. A contingency allowance of £0.500m is included within the worst case scenario and a £0.250m allowance included within the mid-range scenario each year from 2026-27 only. No contingency is included within the best case scenario. 4.4.4 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 4.6.6.
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Inflation Category 2025-26 Previous estimates (Oct 2024) £000 2025-26 Updated estimates £000 Increase/ (Decrease) £000 Utilities - Electricity, Gas, Oil, Water 173 175 2 Street Lighting Electricity 30 30 0 Vehicle Fuel 34 34 0 Vehicle Charging Point Electricity 5 6 1 Central Repairs-Outside Contractors 89 79 (10) Waste/Landfill Tax 803 797 (6) NPDO/HUB Schools 452 404 (48) Community Pool Subsidies 37 25 (12) Residential Schools 36 36 0 Pre-Primary Partner Providers 197 197 0 ICT 215 214 (1) Catering Purchases and Milk 64 66 2 Insurance 459 459 0 Bitumen – Roads 16 16 0 Contribution to Joint Boards 39 39 0 Annual External Audit Fee 10 10 0 Public Transport 231 237 6 School Transport 153 153 0 SEPA – Waste Disposal 7 7 0 Non-Domestic Rates 0 162 162 Contingency for unidentified/ insufficient inflation estimate 250 0 (250) Total 3,300 3,146 (154) 4.4.5 The most significant movements in non-pay inflation since the last reported update in October 2024 are: A new non-pay inflation for non-domestic rates which reflects the estimated increase in the poundage rate which will determine the non- domestic rates that we pay on our properties. This poundage rate will be confirmed as part of the Scottish Budget. Removal of the contingency for unidentified/insufficient inflation within 2025-26. The contingency remains in the outlook for future years. 4.4.6 The cumulative inflation for years 2026-27 to 2029-30 is noted in the table below and is based on future years estimates of inflation at this point it time, however, due to the volatility of inflation recently it is very difficult to predict and the estimates will be kept under close review. 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Unavoidable/Inescapable 5,635 8,728 11,985 15,421 Total Non-Pay Inflation 5,635 8,728 11,985 15,421
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4.5 Cost and Demand Pressures 4.5.1 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, however, there are a number of cost and demand pressures already identified for Council services which were reported as part of the budget in February 2024. Since the Policy and Resources Committee on 10 October 2024 the following changes have been made to the cost and demand pressures: Amended – Bus Transport Contracts – a review of the bus contracts due for renewal within 2025-26 has been undertaken and an estimate of the likely renewal increase as been made based on the renewals within 2024- 25. The pressure for 2025-26 has increased by £0.858m. NEW - 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. Increased budget required for 2025-26 amounts to £0.500m. Amended – In light of the budget gap, cost/demand pressures identified that are £0.020m or under have been removed and services will look to absorb these within existing resources. These amount to £0.043m in 2025- 26. Amended – the £0.500m contingency that was built into account for cost pressures not yet identified has been removed for 2025-26 as we are almost 9 months through the year and most pressures for 2025-26 should have been identified. 4.5.2 As with inflation, when creating a budget outlook beyond one year, there is a risk that unknown cost and demand pressures will emerge that have not been included within the outlook. It is suggested that a £0.250m general allowance for this is included within the best case scenario, £0.500m within the mid-range scenario and a £1m allowance included within the worst case scenario each year from 2026-27 onwards. 4.5.3 The cost pressures are detailed in appendix 3 and summarised in the table below and will be subject to review during the financial year. 2025-26 £000 2026- 27 £000 2027-28 £000 2028- 29 £000 2029-30 £000 Universal Credit – HB Admin Grant 40 80 120 160 200 ASN Support 202 410 624 624 624 Maintenance/Repair of School Estate 360 360 360 360 360 Election costs 0 0 350 0 0 Education ICT Network Infrastructure 295 295 348 348 348 Compliance with BMW Ban 462 925 925 925 925 Local Development Plan 0 50 0 0 0 Increase to borrowing costs 282 282 282 282 282
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as a result of investment agreed at February 2024. Civica Revenue and Benefits System 0 0 63 63 63 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 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 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 Allowance for pressures in future years 0 500 1,000 1,500 2,000 Total Cost and Demand Pressures 4,365 5,957 7,364 7,554 8,094 4.5.4 The cost pressure in respect of the compliance with the BMW ban needs to be reviewed. We have recently received an updated financial appraisal from the consultants who prepared the options appraisal that was presented to Committee in December 2022 and officers are working through the updated figures. The future budget requirement needs to reflect the estimated costs post BMW ban as well as the estimates included within this outlook, particularly within inflation in respect of landfill tax and waste costs and officers will revise the budget requirement prior to the budget meeting in February 2025. 4.5.5 The cost and demand pressures relating to Social Work within the Health and Social Care Partnership are summarised within paragraph 4.6.6. 4.6 Health and Social Care Partnership 4.6.1 The Council, at the budget meeting on 24 February 2024, agreed a base allocation to the HSCP of £78.611m for 2024-25 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. 4.6.2 As previously reported and detailed in paragraph 4.1.2, funding has been received in respect of the Children’s Social Care pay uplift of which £0.180m is a straight pass through to the HSCP therefore the payment made to them will
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increase by this amount each year. 4.6.3 In paragraph 4.1.3, it is noted that the Scottish Government agreed to fund the increase over 3.2% for both the Teachers Pay Award and the SJC Pay Award for 2024-25 and committed that this funding would be recurring. A proportionate share of the funding will be passed through to the HSCP. For 2025-26, this amounts to £0.339m. 4.6.4 With reference to paragraph 4.1.3, as part of the UK Budget there are increases to Employers National Insurance Contributions effective from 1 April 2025. The increase, which is assumed to be fully funded, amounts to £0.899m for Social Work staff and is summarised in the table below. £000 Increase from reduction in threshold 582 Increase from increase in rate from 13.8% to 15% 317 Total 899 4.6.5 The adjustments to the HSCP payment are summarised below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Re-instate SPF at 17.5% 0 3,053 3,053 3,053 3,053 Children’s Social Care Pay Award Funding – HSCP Share 180 180 180 180 180 SJC Pay Funding – HSCP Share 339 337 335 333 331 NIC Increase Estimated Funding – HSCP Share 899 895 891 887 883 Total 1,418 4,465 4,459 4,453 4,447 4.6.6 Social Work services have already identified a number of cost and demand pressures and these are summarised below and included within Appendix 4 for information purposes. It is expected that the HSCP absorb their cost and demand pressures from their funding allocation. Note that these only extend to three years rather than the five years within this Council budget outlook. 2025-26 £000 2026-27 £000 2027-28 £000 Increase to pay base due to 2024-25 pay award (partly funded) 384 384 384 Pay inflation 798 1,612 2,442 Pay Increments 203 406 609 Change to Employee Base 282 282 282 NIC Increase (assume fully funded) 899 899 899 Non-Pay Inflation 965 2,012 3,121 Care Services for Older People 458 924 1,397
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Care Services for Younger Adults 60 121 184 Mental Health Demand Growth 65 131 199 Continuing Care for Looked After Children 939 993 1,048 Mental Health Budget Adjustment 112 265 397 Unknown Cost and Demand Pressures 200 400 600 Total Cost Increase estimates for Social Work 5,365 8,429 11,562 4.7 Live Argyll 4.7.1 In the budget outlook, I have assumed allocations to Live Argyll on the same basis as the Scottish Government funding assumptions which range from a 1% reduction (best case) and flat cash (worst case) with a mid-range reduction of 0.5%. This is only an assumption and it will be a matter for Council to consider as part of the budget process next year. The indicative allocation for 2026-27 onwards also increases by £0.118m to account for the cessation of the one-off employer contribution rate saving relating to the Strathclyde Pension Fund. 4.8 Estimated Budget Gap PRIOR to Measures to Balance the Budget 4.8.1 The budget gap in the mid-range scenario after allowing for the current base commitments, employee adjustment, non-pay inflation and cost and demand pressures is summarised in the table below. This is the budget gap prior to factoring in any previous savings decisions or potential options towards balancing the budget. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Base Budget 303,515 303,515 303,515 303,515 303,515 Employee Cost Changes 9,714 20,704 24,384 28,126 31,931 Non-Pay Inflation 3,146 5,635 8,728 11,985 15,421 Cost and Demand Pressures 4,365 5,957 7,364 7,554 8,094 Adjustment to HSCP Payment 1,418 4,465 4,459 4,453 4,447 Adjustment to Live Argyll Payment (16) 102 101 101 100 Total Estimated Expenditure 322,142 340,378 348,551 355,734 363,508 Estimated Funding 307,270 316,263 313,336 312,416 311,502 Estimated Budget Surplus / (Gap) Cumulative (14,872) (24,115) (35,215) (43,318) (52,006) 4.9 Measures to Balance the Budget 4.9.1 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.
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4.9.2 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. Recurring cost pressures totalling £0.023m were also identified in relation to this which have been incorporated at Section 4.5 above. 4.9.3 In 2024-25 a general inflationary increase of 6% was applied to fees and charges. For the budget outlook a range of between 3% (worst case) and 9% (best case) with a mid-range of 6% has been included. There is no general inflationary increase of 6% applied to Piers and Harbours to ensure that any income generated is not in excess of expenditure. 4.9.4 Officers have been working on identifying options to balance the budget for 2025-26. A cross-party Budget Working Group has been established and options have been discussed at this Group and are now included within the budget outlook estimates. Trade Union consultation will take place for any options that have staffing implications. The options have been categorised as either: Management / Operational – meaning they do not result in either redundancies or any change in policy and can be implemented without Council approval Policy – meaning they require Council approval due to having staff or policy implications. The management/operational savings are set out in Appendix 5 to this report and the proposed policy savings are set out in Appendix 6. Detailed templates will be provided to Council for all policy options as part of the budget pack that will be published in February 2025. 4.9.5 A summary of the savings identified are noted in the table below. The savings reduce between 2025-26 and 2026-27 due to one-off savings included within 2025-26. Saving Type 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Management/ Operational 2,046 984 1,023 1,023 1,023 Policy 1,008 1,533 1,623 1,623 1,623 Total 3,054 2,517 2,646 2,646 2,646 4.9.6 In terms of Council Tax, a 5% increase had been assumed in the mid and worst case scenarios and a 7% increase in the best case scenario for 2025-26. From 2026-27 a 5% increase has been assumed in all scenarios. In light of the significant budget gap, this is an area that Members will require to give due consideration to as part of the budget setting for 2025-26 and beyond. If
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Members were minded to increase the Council Tax by 10% instead of the 5% that has been assumed in this budget outlook, this would reduce the budget gap by £3.162m. A 10% increase in Council Tax equates to a weekly increase of £2.84 and for those people who are in receipt of 100% Council Tax Reduction any increase should be offset by an increase in the benefit. 4.9.7 The table below summarises the proposed measures to balance the budget in the mid-range scenario. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 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 385 771 1,156 1,541 1,927 NEW Management/ Operational Options 2,020 958 997 997 997 NEW Policy Options 1,008 1,533 1,633 1,633 1,633 Council Tax Increase 3,170 6,530 10,075 13,812 17,753 Total Measures to Balance the Budget 8,424 10,551 15,256 19,847 24,288 4.10 Estimated Budget Gap AFTER Measures to Balance the Budget 4.10.1 The table below summarises the estimated budget gap in the mid-range scenario. 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Estimated Budget Gap Prior to Measures to Balance Budget (14,872) (24,115) (35,215) (43,318) (52,006) Savings Measures 8,424 10,551 15,256 19,847 24,288 Estimated Budget Surplus / (Gap) Cumulative (6,448) (13,564) (19,959) (23,471) (27,718) Estimated Budget Surplus / (Gap) In Year (6,448) (7,116) (6,395) (3,512) (4,247) 4.10.2 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £27.718m with a gap of £6.448m in 2025-26. 4.10.3 The budget gap in the best case scenario over the five years is £14.303m with a gap of £3.123m in 2025-26 and in the worst case scenario, the budget gap over the five years is £66.067m with a gap of £12.633m in 2025-26. A summary of all three scenarios is included within Appendix 1.
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4.10.4 The changes from the previous anticipated outlook reported to the Policy and Resources Committee on 10 October 2024 are summarised in the table below: 2025-26 £000 2026-27 £000 2027-28 £000 2028-29 £000 2029-30 £000 Previously reported budget surplus / (gap) Cumulative (9,147) (14,788) (21,145) (24,484) (28,565) Base Adjustment: Reduce Joint Boards Budget 114 114 114 114 114 Base Adjustment: NDR Poundage – reflect increased rate for 2024- 25 (300) (300) (300) (300) (300) Employers National Insurance estimated movement in funding in line with funding assumptions 0 (17) (34) (51) (68) Updates to pay estimates 518 203 387 574 765 Updates to non-pay inflation 154 (191) (535) (878) (1,218) Updates to cost and demand pressures (815) (1,076) (1,076) (1,076) (1,076) NEW Management/ Operational options 2,020 958 997 997 997 NEW Policy options 1,008 1,533 1,633 1,633 1,633 Revised Budget Surplus / (Gap) Cumulative (6,448) (13,564) (19,959) (23,471) (27,718) 5. CONCLUSION 5.1 In the mid-range scenario, the budget gap estimated over the five year period 2025-26 to 2029-30 is £27.718m with a gap of £6.448m in 2025-26. Council officers are continuing to explore further savings options and these will be presented to Members within the budget pack. 5.2 This is a very challenging budget outlook position and the level of Scottish Government grant and the pay award are two assumptions that could alter the figures significantly. These will be kept under close review and the budget outlook updated as and when further information becomes available. 6. IMPLICATIONS 6.1 Policy - There are policy implications associated with the new saving options and also previously agreed savings options which impact 2025-26 and beyond. 6.2 Financial - Sets best, worst and mid-range scenarios in respect of the budget outlook. 6.3 Legal - None directly from this report but Council will need to balance the budget.
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6.4 HR - HR implications are noted within Appendix 6 policy options and officers will engage with Trade Unions prior to the budget meeting in February 2025. 6.5 Fairer Scotland Duty - See below. 6.5.1 Equalities Equality and Socio-Economic Impact Assessments will be carried out where appropriate for savings options being developed. 6.5.2 Socio Economic Duty Equality and Socio-Economic Impact Assessments will be carried out where appropriate for savings options being developed. 6.5.3 Islands Duty Equality and Socio-Economic Impact Assessments will be carried out where appropriate for savings options being developed. This includes consideration of Islands Duties. 6.6 Climate Change The Council is committed to addressing climate change and reviews how Services are delivering this on an ongoing basis within the available budget resources. 6.7 Risk - Risks in respect of any new saving options will be outlined on savings templates to be included within the budget pack in February. 6.8 Customer Service – Some policy options may have an impact of customer service and this will be outlined on savings templates to be included within the budget pack in February. 6.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan Executive Director/Section 95 Officer 12 November 2024 Policy Lead for Finance and Commercial Services: Councillor Ross Moreland APPENDICES: Appendix 1 – Budget Outlook, Best, Worst and Mid-Range Scenarios Appendix 2 – Non Pay Inflation Appendix 3 – Cost and Demand Pressures (Council Services) Appendix 4 – Cost and Demand Pressures (Social Work) Appendix 5 – NEW Management/Operational Options Appendix 6 – NEW Policy Options 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 POLICY AND RESOURCES COMMITTEE - 5 DECEMBER 2024 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 Base Budget 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 301,965 Base Budget Adjustments 1,440 1,440 1,440 1,440 1,440 1,550 1,550 1,550 1,550 1,550 1,542 1,542 1,542 1,542 1,542 Revised Base Budget 303,405 303,405 303,405 303,405 303,405 303,515 303,515 303,515 303,515 303,515 303,507 303,507 303,507 303,507 303,507 Pay Award 2,837 5,878 8,980 12,144 15,371 2,837 5,878 8,980 12,144 15,371 7,093 14,908 23,114 31,731 40,779 Pay Award - Elected Members 33 33 33 33 33 33 33 33 33 33 33 33 33 33 33 Full year effect of 2025-26 pay award for teachers in 2026-27 base 0 496 496 496 496 0 496 496 496 496 0 496 496 496 496 Pay Increments 595 893 1,190 1,488 1,785 595 1,190 1,785 2,380 2,975 595 1,190 1,785 2,380 2,975 Children's Social Care Pay Uplift - Education Share 63 63 63 63 63 63 63 63 63 63 63 63 63 63 63 Rebase 2024-25 after Pay Award Agreed 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 2,617 Employer's National Insurance Increase 3,441 3,441 3,441 3,441 3,441 3,441 3,424 3,407 3,390 3,373 3,441 3,407 3,373 3,339 3,306 Base Increase 2025-26 128 128 128 128 128 128 128 128 128 128 128 128 128 128 128 One-off element SPF 0 6,875 6,875 6,875 6,875 0 6,875 6,875 6,875 6,875 0 6,875 6,875 6,875 6,875 Total Employee Cost Changes (Council Services) 9,714 20,424 23,823 27,285 30,809 9,714 20,704 24,384 28,126 31,931 13,970 29,717 38,484 47,662 57,272 Non-Pay Inflation - Council Services 2,806 4,668 7,115 9,698 12,430 3,146 5,635 8,728 11,985 15,421 3,486 6,605 10,352 14,294 18,451 Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200 ASN Support 202 410 624 624 624 202 410 624 624 624 202 410 624 624 624 SEEMIS Membership Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Maintenance/Repair of School Estate 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 Election Costs 0 0 327 0 0 0 0 350 0 0 0 0 370 0 0 Equipment Maintenance associated with Hybrid Council Meetings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Maintenance of Debt Counselling and Welfare Rights System 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Community Resilience Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Education ICT Network Infrastructure 295 295 348 348 348 295 295 348 348 348 295 295 348 348 348 Compliance with BMW Ban 462 925 925 925 925 462 925 925 925 925 462 925 925 925 925 Planning (Local Development Plan) 0 50 0 0 0 0 50 0 0 0 0 50 0 0 0 Borrowing to pay for weather incident costs 282 282 282 282 282 282 282 282 282 282 282 282 282 282 282 Civica Revenue and Benefits System 0 0 37 37 37 0 0 63 63 63 0 0 137 137 137 Bus Transport Contracts 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 Roads and Amenity Services saving no longer achievable in full 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Stadiums Income saving no longer achievable in full 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Loans Charges relating to Weather Incident 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Migration from Skype for Busines to Teams Telephony 0 19 282 282 282 0 63 300 300 300 0 108 318 318 318 Increase in insurance premiums 309 309 309 309 309 309 309 309 309 309 309 309 309 309 309 ASN Transport 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 Reversal Earmarkings - Revenue Implications 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Allowance for Cost and Demand Pressures Future Years 0 250 500 750 1,000 0 500 1,000 1,500 2,000 0 1,000 2,000 3,000 4,000 Total Cost and Demand Pressures 4,365 5,663 6,797 6,760 7,050 4,365 5,957 7,364 7,554 8,094 4,365 6,502 8,476 9,146 10,186 Adjustment to Health and Social Care Partnership Payment 1,418 4,471 4,471 4,471 4,471 1,418 4,465 4,459 4,453 4,447 1,418 4,459 4,447 4,435 4,423 Adjustment to Live Argyll Management Fee (33) 86 85 84 83 (16) 102 101 101 100 0 118 118 118 118 Total Estimated Expenditure PRIOR to measures to balance the budget 321,675 338,716 345,696 351,702 358,248 322,142 340,378 348,551 355,734 363,508 326,746 350,908 365,384 379,162 393,957 Scottish Government Grant 252,498 252,498 252,498 252,498 252,498 251,269 250,015 248,767 247,525 246,289 250,039 247,542 245,069 242,621 240,198 Transfers to/from Reserves - Strathclyde Pension Fund (7,928) 2,000 0 0 0 (7,928) 2,000 0 0 0 (7,928) 2,000 0 0 0 Council Tax 64,086 64,565 65,047 65,533 66,020 63,929 64,248 64,569 64,891 65,213 63,778 63,940 64,104 64,268 64,427 Total Funding 308,656 319,063 317,545 318,031 318,518 307,270 316,263 313,336 312,416 311,502 305,889 313,482 309,173 306,889 304,625 Budget Surplus / (Gap) PRIOR to measures to balance the budget (13,019) (19,653) (28,151) (33,671) (39,730) (14,872) (24,115) (35,215) (43,318) (52,006) (20,857) (37,426) (56,211) (72,273) (89,332) Measures to Balance the Budget: Fees and Charges 578 578 578 1,156 1,156 385 771 1,156 1,541 1,927 193 385 578 771 963 Council Tax Increase 4,449 7,873 11,492 15,317 19,357 3,170 6,514 10,042 13,762 17,684 3,162 6,490 9,993 13,679 17,557 Council Tax Increase (Growth element) 0 89 157 230 306 0 16 33 50 69 0 32 65 100 137 Management/Operational Savings agreed Feb 2023 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 Policy Savings Agreed Feb 2023 248 724 1,360 1,829 1,943 248 724 1,360 1,829 1,943 248 724 1,360 1,829 1,943 Earmarked Reserves Released to the General Fund 1,558 0 0 0 0 1,558 0 0 0 0 1,558 0 0 0 0 NEW Management/Operational Options 2025 2,020 958 997 997 997 2,020 958 997 997 997 2,020 958 997 997 997 NEW Policy Options 2025 1,008 1,533 1,633 1,633 1,633 1,008 1,533 1,633 1,633 1,633 1,008 1,533 1,633 1,633 1,633 Total Measures to Balance the Budget 9,896 11,790 16,252 21,197 25,427 8,424 10,551 15,256 19,847 24,288 8,224 10,157 14,661 19,044 23,265 Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (3,123) (7,863) (11,899) (12,474) (14,303) (6,448) (13,564) (19,959) (23,471) (27,718) (12,633) (27,269) (41,550) (53,230) (66,067) Budget Surplus / (Gap) In Year AFTER measures to balance the budget (3,123) (4,740) (4,035) (576) (1,829) (6,448) (7,116) (6,395) (3,511) (4,248) (12,633) (14,636) (14,281) (11,680) (12,837) 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 August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 117,231 Council Wide Gas Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 24,273 Council Wide Heating Oils Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 11,413 Council Wide Solid Fuel Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 8,340 Council Wide Water Charges Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 16,262 Council Wide Vehicle Fuel Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 33,783 Council Wide Central Repairs - Outside Contractors Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 3.70% 78,507 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 August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 39,361 Council Wide Non-Domestic Rates Estimate for the increase in Non-Domestic Rates, with a tolerance of 0.5% for best and worst case.To be updated when new poundage rates 2025/26 are announced in December 2024. 3.00% 161,864 Council Wide Contingency for unidentified/insufficient inflation estimate No general provision for 2025/26. 0 950,507 Education Pre-Primary Partner Provider Uplift Estimate for the increase in the Real Living Wage, with a tolerance of 0.5% for best and worst case.To be updated when new RLW figure is announced in November 2024. 5.00% 197,070 Education External School Placements Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 36,106 Commercial Services Catering Purchases Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 66,239 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 August 2024, with 0.5% tolerance for best and worst case. 3.70% 7,406 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 August 2024, with 0.5% tolerance for best and worst case. 3.70% 322,930 Legal & Regulatory Support NPDO-Utilities Rebate Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 3.70% (12,216) Legal & Regulatory Support NPDO-Electricity Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 18,308 Legal & Regulatory Support NPDO-Gas Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 7,420 Legal & Regulatory Support NPDO-Heating Oil Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 2,909 Legal & Regulatory Support NPDO-LPG Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 2,532 Legal & Regulatory Support NPDO-Water Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 10,881 Legal & Regulatory Support HUB-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at August 2024, with 0.5% tolerance for best and worst case. 3.70% 50,542 728,437 Customer and Support Services ICT Estimate added at 10% to reflect input from ICT on increasing costs. 10.00% 214,204 Council Wide Total Executive Director Douglas Hendry - Total
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NON-PAY INFLATION (COUNCIL) Appendix 2 Service Category Basis of Inflation Inflation Percentage Mid Range 2025/26 Financial Services Annual External Audit Fee Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 9,529 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 85% of an estimate for RPIX Rate at 2025 Q1 tracking the Bank of England CPI forecast for CPI at February 2024, 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 August 2024, with 0.5% tolerance for best and worst case. 3.70% 60,675 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 August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 15,639 Roads and Infrastructure Electricity - Street Lighting Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 29,915 Roads and Infrastructure Electricity - Vehicle Charging Points Based on the August 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and worst case. 2.70% 6,288 1,467,016 3,145,960 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 - 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 - 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 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 APPENDIX 3 Best Case Mid Range Scenario Worst Case
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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 APPENDIX 3 Best Case Mid Range Scenario Worst Case Executive Director - Kirsty Flanagan Roads & Infrastructure Services Achieving compliance with ban on biodegradable municipal waste (BMW) in 2025. This is the estimated revenue costs from potential scenarios, remaining in or coming out of the current waste PPP contract. Coming out of the Waste PPP contract would create an additional one-off cost (reflected in the worst case senario in financial year 2025-26). Due to the complexity of the model, estimates are subject to change and Caledonian Economic Consultants are currently updated the figures in the original options appraisal. The best case scenario reflects option 4 detailed in the report to the Environment, Development and Infrastructure Committee on 01/12/2022. The worst case scenario reflects option 3 included in the same report and takes into account the risk that the SG will not agree a derogation. The mid-range scenario assumes that the positive discussions with the Scottish Government will result in the Scottish Government contributing towards the pressure facing the Council. 462 925 925 925 925 462 925 925 925 925 462 925 925 925 925 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 Financial Services/Roads and Infrastructure 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 Executive Director - Kirsty Flanagan Financial Services The Council’s contract with Civica for the Revenue and Benefits Management System ends in August 2024, this is the system that allows us to bill and collect Council Tax and administer Housing Benefit on behalf of the UK government under statute. In addition the contract for the corporate Electronic Document Management system currently used by Revenue and Benefits services, Social Care, Human Resources and Creditors will end in September 2024. The Council has been engaged in discussions with the supplier of both systems, Civica for around a year to negotiate a reasonable way forward before Civica press ahead with plans to migrate their systems to the Cloud and remove its support and development of its existing on premise solutions. The outcome of these discussions is an extension to the contracts for current on premise solutions for three further years to August/September 2027 with full support, however with increases in annual recurring support and maintenance charges and licensing costs. Beyond that three year period we expect significant increases in charges as the supplier moves the systems to the Cloud. The cost pressure for 2027-28 onwards will be added when more information becomes available. 0 0 37 37 37 0 0 63 63 63 0 0 137 137 137 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 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 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
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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 APPENDIX 3 Best Case Mid Range Scenario Worst Case 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 4,365 5,663 6,797 6,760 7,050 4,365 5,957 7,364 7,554 8,094 4,365 6,502 8,476 9,146 10,186
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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 2% and a worst case of 5%. 798 1,612 2,442 798 1,612 2,442 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 baed 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 899 899 899 899 899 899 899 899 899 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. Demand pressure estimates 3% growth in homecare and care home placements, this increase is supported by the growth in clients and care requirements over a number of years although in some areas the service capacity is being fully utilised and service expansion is proving difficult. The best case assumes a 0% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 1.5% growth and the worst case reflects 3% growth. 0 0 0 458 924 1,397 916 1,862 3,848 Adult Care Younger Adults Demand Growth - Physical Disability: There has been continuing increase in demand for care and support services for profoundly disabled younger adults (ie under 65) whose parents have historically provided care but are no longer able to. The best case assumes a 1% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 2% growth and the worst case reflects 3% growth. 30 60 91 60 121 184 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 - There has been a continuing increase in demand for residential placements and supported living for mental health services. The best case assumes a 1% increase in spending reflecting the limited service capacity in the area, the mid-range reflects 2% growth and the worst case reflects 3% growth. 32 65 98 65 131 199 97 198 302 Children and Families Looked After Children Demand Growth - there is a continuing demand for placements of children who are cared for by the HSCP. The best case scenario is that the expected additional demand can be funded from within existing resources as a result of planned improvements to the service delivery model (eg shift away from high cost external residential care to local foster and kinship care), the mid case reflects that additional demand in 24/25 be funded from existing resource with £250k per annum thereafter and the worst case reflects £250k per annum. 26 53 80 53 107 162 79 161 245 Children and Families Looked After Children Budget Adjustment - to reflect significant increase in demand for placements in external residential care facilities. 886 886 886 886 886 886 886 886 886 Adult Care Mental Health Budget Adjustment - The Mental Health Supported Living and Residential budgets are carrying a recurring unbudgeted commitment. To address this situation, it is proposed to continue to realign the budget over 2025-26, 2026-27 and 2027-28 whilst also reviewing cases and redesigning services. The adjustment will be reviewed annually to reflect spending reductions delivered as well as any changes to funding and practice resulting from the implementation of the Independent Review of Adult Social Care. 112 265 397 112 265 397 112 265 397 All Social Work Allowance for unknown cost and demand pressures which could arise. Per James Gow this is to reduce to £200k pa 200 400 600 200 400 600 200 400 600 TOTAL COST AND DEMAND PRESSURES 4,688 6,951 9,254 5,365 8,429 11,562 7,235 12,302 18,582
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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 at this stage it is anticipated that there is additional income that can be budgeted for. 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 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 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 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 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 2,020 0.0 0.0 958 0.0 0.0 997 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 PS 001 25/26 Property Services Team restructure of property services which will included the deletion of one post that is currently vacant. 50 1.0 1.0 50 1.0 1.0 50 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 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 1,008 3.0 3.0 1,533 3.0 3.0 1,633 3.0 3.0