Budget Outlook 2025/26 to 2029-30

Argyll and Bute Council · 15 August 2024
Back to Policy and Resources Committee — 15 August 2024 and its agenda

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 15 AUGUST 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 9 May
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 on 9 May 2024 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.  Although the
spending review published in May 2022 had indicated that the total budget for
Local Government would remain flat cash until 2027-28, our Council relies on
the floor mechanism to protect our funding and the floor was set at 0.5% below
the annual change in 2024-25 and is likely to continue at this level. 
1.4 There are no changes to my previous assumptions around the growth in
Council Tax. The Council tax base has been assumed to grow by 0.25% in the
worst case scenario, 0.5% in the mid-range scenario and 0.75% in the best
case. 
1.5 There has been one change to the base budget since the report on 9 May
2024 which relates to the Council’s share of the Children’s Social Care Pay
Uplift (£0.063m). 
1.6 Assumptions in respect of employee costs for Council services are as follows: 
 The SJC and Chief Officers pay awards for 2024-25 have still to be agreed
and may have a further impact on the base budget if the pay award is
higher than the 3% allowed for in the budget. Two offers have been rejected
by the Trade Unions recently, the first being an increase equating to 4.24%
which would have increased the budget gap in 2025-26 by £1.446m, and
the second proposed an increase of 3.2% which would have increased the
estimated gap by £0.233m. It is still unclear at what level the pay award will
be agreed for 2024-25 and subsequently the financial impact this will have
on future years but this will be kept under review as further information
becomes available.
 The Teachers pay award for 2024-25 has already been agreed up to 31
July 2024 as part of a previous 28 month deal however any increase
beyond that date is still in the negotiation stage.

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 For future years, the mid-range scenario remains at 2% but a risk remains
that it could be higher and this will be closely monitored.  
 Increments are estimated between £0.329m and £0.605m with a mid-range
of £0.605m. 
1.7 For non-pay inflation, only unavoidable/inescapable inflation has been built in
for the best case and mid-range scenarios with a contingency of £0.250m built
into the mid-range. A further general inflationary increase has been built into
the worst case scenario. 
1.8 There are a number of cost and demand pressures for Council services built
into each scenario. Changes to these pressures since the report on 9 May
2024 are: 
 Amended – Bus Transport Contracts – a further contract renewal has been
received which has increased the cost pressure by £0.210m.
 New – Education ICT Network Infrastructure – technology upgrade,
improved security and reconfiguration to support in-school and at home
learning (£0.295m). There is a separate report on the agenda providing
Members with further detail.
 New – Roads and Amenity Services Charging Saving – the saving is no
longer fully achievable due to lower than anticipated income generation.
This will now be considered as part of the Roads and Infrastructure Review
(£0.100m).
 New – Insurance premiums – renewal notices have been received which
include inflation of 22% which is significantly higher than the inflation
previously built into the budget outlook (£0.309m). 
1.9 In addition to the identified cost and demand pressures an allowance for
unidentified cost and demand pressures has been included in mid-range of
£0.500m per year (best case scenario £0.250m per year and worst case
scenario £1m per year). 
1.10 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 which has now increased
by £0.180m, as detailed in paragraph 4.1.2, in relation to the HSCP’s share of
the Children’s Social Care Pay Uplift. The indicative allocation for 2026-27
increases further by £3.053m to account for the cessation of the one-off saving
in relation to the Strathclyde Pension Fund. 
1.11 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 £48.118m with
a gap of £13.314m in 2025-26. 
1.12 The measures to balance the budget over the next five years are as follows: 
 Proposed increase to fees and charges of between 3% and 9% (6% mid-

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range).
 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).
 Policy savings already agreed by Council in February 2024. 
 Management/Operational savings already agreed by Council February
2024. 
1.13 In the mid-range scenario, the budget gap estimated over the five year period
2025-26 to 2029-30 is £26.504m with a gap of £9.484m in 2025-26.   
1.14 The budget gap in the best case scenario over the five years is £13.659m with
a gap of £3.416m in 2025-26 and in the worst case scenario, the budget gap
over the five years is £91.085m with a gap of £21.355m in 2025-26.  A
summary of all three scenarios is included within Appendix 1.  
1.15 It is recommended that the Policy and Resources Committee consider the
current estimated budget outlook position for the period 2025-26 to 2029-30.

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 15 AUGUST 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 9 May 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 consider the
current estimated budget outlook position for the period 2025-26 to 2029-30. 
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. In my report in May 2024 I advised that it would
be prudent to assume a 0.5% reduction in future years within the mid-range
scenario.  Although the spending review published in May 2022 had indicated
that the total budget for Local Government would remain flat cash until 2027-28,
our Council relies on the floor mechanism to protect our funding and the floor
was set at 0.5% below the annual change in 2024-25 and it is likely to continue
at that level.  The funding assumption has been set between a 1% reduction
(worst case) and flat cash (best case) with a mid-range reduction of 0.5%. This
will be closely monitored and updated during the year as required.   
4.1.2  In respect of the Children’s Social Care pay uplift, the Scottish Government
notified us in June 2024 of Argyll and Bute Councils 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 table below summarises the mid-range scenario estimates based on a
0.5% settlement reduction each year.

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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
Total Estimated SG
Funding
244,900 243,677 242,460 241,249 240,044 
Council Tax 
4.1.4 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. 
4.1.5 On 15 April 2024 it was reported to Council that an adjustment to the level of
Council Tax received relating to the double charge on second homes would be
prudent given the number of representations made in relation to this. As such
anticipated Council Tax income was reduced by £0.261m within the budget
outlook which will be monitored throughout the year. This adjustment is included
within the base figure of £63.278m. 
4.1.6 There are no changes to my previous assumptions around the growth in Council
Tax. It has been assumed that there will be a 0.5% growth in the mid-range
scenario for all years from 2025-26 (0.75% in best case and 0.25% in worst
case). 
4.1.7 
4.1.8
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. 
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 
4.1.9 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. 
4.1.10 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.

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4.1.11  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 244,900 243,677 242,460 241,249 240,044
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
Council Tax Base 63,278 63,278 63,278 63,278 63,278
Council Tax Growth 315 631 949 1,268 1,589
Adjustment to additional
Council Tax recoveries
(para 4.1.7)
(149) (147) (145) (143) (143)
Total Estimated
Funding
300,416 309,439 306,542 305,652 304,768 
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 There has been one change to the base budget since the report on 9 May 2024,
as detailed at paragraph 4.1.2, relating to funding received for the Children’s
Social Care Pay Uplift. The Council’s share of this was £0.063m and the budget
within Education is required to be increased accordingly. 
4.2.3  For future years, there are adjustments required to the base budget from
decisions by Council on 22 February 2024 and other adjustments as 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
Children’s Social Care
Pay Uplift
63 63 63 63 63
Revised Base Budget 303,592 303,592 303,592 303,592 303,592  
4.3 Employee Cost Changes 
Pay Award

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4.3.1  The SJC and Chief Officers pay awards for 2024-25 have still to be agreed and
may have a further impact on the base budget if the pay award is higher than
the 3% allowed for in the budget. Two offers have been rejected by the Trade
Unions recently, the first being an increase equating to 4.24% which would have
increased the budget gap in 2025-26 by £1.446m, and the second proposed an
increase of 3.2% which would have increased the estimated gap by £0.233m. It
is still unclear at what level the pay award will be agreed for 2024-25 and
subsequently the financial impact this will have on future years but this will be
kept under review as further information becomes available. 
The Teachers pay award has been agreed up to 31 July 2024 as part of a
previous 28 month deal and any increase beyond that date has still to be
negotiated. 
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 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 throughout the year if more information becomes
available. Every 1% over and above what is budgeted would add an additional
pressure of circa £1.7m. 
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  There are no changes to my previous assumption around the cost of employee
increments. It has been assumed that for future years, the best case is assumed
to be half of the previous year cost, for mid-range and worst case, assumes
equal to the cost in 2024-25 (£0.605m). 
4.3.5
Strathclyde Pension Fund 
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.

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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 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.   
4.3.7 The table below summarises the employee cost movements in the mid-range
scenario for Council services.  The employee cost increases relating to Social
Work within the Health and Social Care Partnership are summarised within
paragraph 4.6.4. 
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
2029-30
£000
Pay Award  3,448 6,651 9,918 13,250 16,649
Pay Award – Elected
Members
33 33 33 33 33
Increments 605 1,210 1,815 2,420 3,025
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
4,086 14,769 18,641 22,578 26,582 
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

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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.  No contingency is included within the
best case scenario.  This contingency will either be required, reduced or
removed to reflect changing circumstances before the 2025-26 budget is set.   
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 4.6.4. 
Inflation Category 2025-26
Previous
estimates
(May 2024)
£000
2025-26
Updated
estimates
£000
Increase/
(Decrease)
£000
Utilities - Electricity, Gas, Oil, Water 192 179 (13)
Street Lighting Electricity 25 23 (2)
Vehicle Fuel 35 32 (3)
Vehicle Charging Point Electricity 0 5 5
Central Repairs-Outside Contractors 83 76 (7)
Waste PPP/Landfill Tax 206 206 0
NPDO/HUB Schools 424 391 (33)
Community Pool Subsidies 34 31 (3)
Residential Schools 36 33 (3)
Pre-Primary Partner Providers 227 227 0
ICT 203 210 7
Catering Purchases and Milk 123 64 (59)
Insurance 93 459 366
Bitumen – Roads 16 15 (1)
Contribution to Joint Boards 43 38 (5)
Annual External Audit Fee 10 9 (1)
Public Transport 220 220 0
School Transport 153 153 0
SEPA – Waste Disposal 0 7 7
Contingency for unidentified/
insufficient inflation estimate
250 250 0
Total 2,373 2,628 255 
4.4.5  The most significant movement in non-pay inflation since last reported in May
2024 relates to insurance premiums which have seen a 22% inflationary
increase in renewal prices. Previously an increase of 5% had been included
within estimations however given that the renewal notices have increased by
substantially more than this it would seem to prudent to include an increase of

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20% 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 4,989 7,487 10,136 12,951
Total Non-Pay Inflation 4,989 7,487 10,136 12,951 
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 9 May 2024 the following
changes have been made to the cost and demand pressures: 
 Amended – Bus Transport Contracts – a further contract renewal has been
received which has increased the cost pressure by £0.210m. 
 New – Education ICT Network Infrastructure – technology upgrade,
improved security and reconfiguration to support in-school and at home
learning (£0.295m). There is a separate report on the agenda providing
Members with further detail.
 New – Roads and Amenity Services Charging Saving – the saving is no
longer fully achievable due to lower than anticipated income generation. This
will now be considered as part of the Roads and Infrastructure Review
(£0.100m).
 New – Insurance premiums – renewal notices have been received which
include inflation of 22% which is significantly higher than the inflation built
into the budget outlook (£0.309m). 
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. 
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
SEEMiS Membership Fees 0 7 7 7 7

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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
as a result of investment
agreed at February 2024.  
282 282 282 282 282
Civica Revenue and
Benefits System
0 0 63 63 63
Bus Transport Contracts 710 710 710 710 710
Roads & Amenity Services
Income - Saving no longer
achievable 
100 100 100 100 100
Insurance premium
increases
309 309 309 309 309
Allowance for pressures in
future years
500 1,000 1,500 2,000 2,500
Total Cost and Demand
Pressures 
3,260 4,528 5,698 5,888 6,428 
4.5.4 The cost and demand pressures relating to Social Work within the Health and
Social Care Partnership are summarised within paragraph 4.6.4. 
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 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 increase by this amount
each year. 
4.6.3 In the budget outlook, I have assumed flat cash allocations across all scenarios,
with the exception of the Strathclyde Pension Fund adjustment. These are only
assumptions and it will be a matter for Council to consider as part of the budget
process next year.   
4.6.4 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

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Pay Inflation 1,049 2,301 3,590
Pay Increments 172 344 516
Non-Pay Inflation 969 2,017 3,126
Care Services for Older People 211 426 644
Care Services for Younger Adults 59 119 180
Adult Services - Supported Living 115 230 345
Adult Services – Mental Health 61 123 187
Continuing Care for Looked After
Children
323 896 1,469
Unknown Cost and Demand Pressures 500 1,000 1,500
Total Cost Increase estimates for
Social Work
3,459 7,456 11,557 
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 303,592 303,592 303,592 303,592 303,592
Employee Cost
Changes
4,086 14,769 18,641 22,578 26,582
Non-Pay Inflation 2,628 4,989 7,487 10,136 12951
Cost and Demand
Pressures 
3,260 4,528 5,698 5,888 6,428
Adjustment to HSCP
Payment re SPF gain
180 3,233 3,233 3,233 3,233
Adjustment to Live
Argyll Payment 
(16) 102 101 101 100
Total Estimated
Expenditure
313,730 331,213 338,752 345,528 352,886
Estimated Funding 300,416 309,439 306,542 305,652 304,768
Estimated Budget
Surplus / (Gap)
Cumulative
(13,314) (21,774) (32,210) (39,876) (48,118)

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4.9  Measures to Balance the Budget 
4.9.1 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.  
4.9.2 Some of the policy options were agreed at the Council meeting on 22 February
2024 that impacted on 2025-26 and beyond.   These are now factored into the
budget outlook, reducing the budget gap. 
4.9.3  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 on the
basis that the majority of Councils increased their Council Tax by at least 5% in
2023-24 prior to the freeze in 2024-25. 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.    
4.9.4  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
Fees and Charges
Increase
385 771 1,156 1,541 1,927
Council Tax Increase  3,162 6,514 10,049 13,778 17,709
Previously agreed Policy
Savings 
248 724 1,360 1,829 1,943
Previously agreed
Management/Operational
Savings 
35 35 35 35 35
Total Measures to
Balance the Budget
3,830 8,044 12,600 17,183 21,614 
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
(13,314) (21,774) (32,210) (39,876) (48,118)
Savings Measures 3,830 8,044 12,600 17,183 21,614
Estimated Budget Surplus
/ (Gap) Cumulative
(9,484) (13,730) (19,610) (22,693) (26,504)
Estimated Budget Surplus
/ (Gap) In Year
(9,484) (4,246) (5,880) (3,082) (3,811)

Page 14

4.10.2 In the mid-range scenario, the budget gap estimated over the five year period
2025-26 to 2029-30 is £26.504m with a gap of £9.484m in 2025-26.   
4.10.3 The budget gap in the best case scenario over the five years is £13.659m with a
gap of £3.416m in 2025-26 and in the worst case scenario, the budget gap over
the five years is £91.085m with a gap of £21.355m in 2024-25.  A summary of
all three scenarios is included within Appendix 1. 
4.10.4 The changes from the previous anticipated outlook reported to the Council on 9
May 2024 are summarised in the table below: 
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
2028-29
£000
Previously reported
budget surplus / (gap)
Cumulative 
(8,315) (12,294) (17,800) (20,497) (23,849)
Non Pay Inflation
Adjustment
(255) (522) (843) (1229) (1688)
Adjustment to Cost
Pressure relating to bus
contracts
(210) (210) (210) (210) (210)
New Cost Pressure –
Education ICT Network 
(295) (295) (348) (348) (348)
New Cost Pressure –
Roads & Amenity
Services - Saving no
longer achievable
(100) (100) (100) (100) (100)
New Cost Pressure –
Increased Insurance
Premiums
(309) (309) (309) (309) (309)
Revised Budget
Surplus / (Gap)
Cumulative
(9,484) (13,730) (19,610) (22,693) (26,504) 
5. CONCLUSION 
5.1 In the mid-range scenario, the budget gap estimated over the five year period
2025-26 to 2029-30 is £26.504m with a gap of £9.484m in 2025-26.   Council
officers are continuing to explore savings options during 2024-25 and these will
be presented to Members at a future date.  
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 -  Sets out the budget outlook that provides the financial
envelope for policy decisions.

Page 15

6.2 Financial -  Sets best, worst and mid-range scenarios in respect of
the budget outlook.  The medium to longer term
financial strategy is being updated and the Council are
actively continuing to pursue opportunities to mitigate
against future budget gaps. 
6.3 Legal -  None directly from this report but Council will need to
balance the budget. 
6.4 HR -  None directly from this report but there is a strong link
between HR and budgets.
6.5 Fairer Scotland Duty - See below
6.5.1 Equalities None directly from this report but any proposals to
address the estimated budget gap will need to consider
equality issues.
6.5.2 Socio Economic Duty None directly from this report but any proposals to
address the estimated budget gap will need to consider
socio economic issues.
6.5.3 Islands Duty None directly from this report but any proposals to
address the estimated budget gap will need to consider
any island specific issues. 
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 -  None directly from this report but any proposals to
address the estimated budget gap will need to consider
risk.
6.8 
6.9
Customer Service – 
The Rights of the
Child (UNCRC) -
None directly from this report but any proposals to
address the estimated budget gap will need to consider
customer service. 
None 
Kirsty Flanagan
Executive Director/Section 95 Officer
23 July 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) 
For further information contact Anne Blue, Head of Financial Services
anne.blue@argyll-bute.gov.uk

Page 16

BUDGET OUTLOOK 2025-26 to 2029-30 APPENDIX 1
POLICY AND RESOURCES COMMITTEE - 15 AUGUST 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 1,517 1,517 1,517 1,517 1,517 1,627 1,627 1,627 1,627 1,627 1,619 1,619 1,619 1,619 1,619
Revised Base Budget 303,482 303,482 303,482 303,482 303,482 303,592 303,592 303,592 303,592 303,592 303,584 303,584 303,584 303,584 303,584
Pay Award 3,448 6,651 9,918 13,250 16,649 3,448 6,651 9,918 13,250 16,649 11,414 22,873 34,905 47,539 60,805
Pay Award - Elected Members 33 33 33 33 33 33 33 33 33 33 33 33 33 33 33
Pay Increments 329 658 986 1,315 1,643 605 1,210 1,815 2,420 3,025 605 1,210 1,815 2,420 3,025
Adjustment to Employee Base 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) 3,810 14,217 17,812 21,473 25,200 4,086 14,769 18,641 22,578 26,582 12,052 30,991 43,628 56,867 70,738
Non-Pay Inflation - Council Services 2,068 4,097 6,240 8,511 10,919 2,628 4,989 7,487 10,136 12,951 4,789 9,085 13,544 18,182 23,017
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 7 7 7 7 0 7 7 7 7 0 7 7 7 7
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
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 2,116 925 925 925 925
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 710 710 710 710 710 710 710 710 710 710 710 710 710 710 710
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
Increase in insurance premiums 309 309 309 309 309 309 309 309 309 309 309 309 309 309 309
Allowance for Cost and Demand Pressures Future Years 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000
Total Cost and Demand Pressures 3,010 4,028 4,899 4,862 5,152 3,260 4,528 5,698 5,888 6,428 5,414 5,528 7,292 7,962 9,002
Adjustment to Health and Social Care Partnership Payment 180 3,233 3,233 3,233 3,233 180 3,233 3,233 3,233 3,233 180 3,233 3,233 3,233 3,233
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 312,517 329,142 335,751 341,644 348,069 313,730 331,213 338,752 345,528 352,886 326,019 352,539 371,399 389,946 409,692
Scottish Government Grant 248,129 248,129 246,129 246,129 246,129 244,900 243,677 242,460 241,249 240,044 245,670 243,236 238,826 236,440 234,078
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 63,601 64,079 64,560 65,045 65,531 63,444 63,762 64,082 64,403 64,724 63,292 63,454 63,617 63,781 63,940
Total Funding 303,802 314,208 310,689 311,174 311,660 300,416 309,439 306,542 305,652 304,768 301,034 308,690 302,443 300,221 298,018
Budget Surplus / (Gap) PRIOR to measures to balance the budget (8,715) (14,934) (25,062) (30,470) (36,409) (13,314) (21,774) (32,210) (39,876) (48,118) (24,985) (43,849) (68,956) (89,725) (111,674)
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 above SG Funding 4,438 7,854 11,465 15,280 19,310 3,162 6,498 10,017 13,728 17,640 3,154 6,474 9,968 13,644 17,512
Council Tax Increase (Growth element) 0 89 157 229 306 0 16 32 50 69 0 32 65 100 136
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
Total Measures to Balance the Budget 5,299 9,280 13,595 18,529 22,750 3,830 8,044 12,600 17,183 21,614 3,630 7,650 12,006 16,379 20,589
Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (3,416) (5,654) (11,467) (11,942) (13,659) (9,484) (13,730) (19,610) (22,693) (26,504) (21,355) (36,199) (56,950) (73,346) (91,085)
Budget Surplus / (Gap) In Year AFTER measures to balance the budget (3,416) (2,238) (5,813) (475) (1,718) (9,484) (4,246) (5,880) (3,082) (3,811) (21,355) (14,843) (20,751) (16,396) (17,738)
Mid-Range Scenario Worst Case ScenarioBest Case Scenario

Page 17

NON-PAY INFLATION (COUNCIL) Appendix 2
Service Category Basis of Inflation Inflation
Percentage
Mid Range
2025/26
Council Wide Electricity Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 121,998
Council Wide Gas Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 22,187
Council Wide Heating Oils Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 10,866
Council Wide Solid Fuel Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 7,816
Council Wide Water Charges Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 15,288
Council Wide Vehicle Fuel Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 32,463
Council Wide Central Repairs - Outside Contractors Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at May 2024, with 0.5% tolerance for best and
worst case.
3.60% 76,392
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 May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 37,903
Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 250,000
1,034,386
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% 226,603
Education External School Placements Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 33,139
Commercial Services Catering Purchases Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 64,389
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 May 2024, with 0.5% tolerance for best and
worst case.
3.60% 7,206
Legal & Regulatory Support Leisure SLA-Atlantis Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at May 2024, with 0.5% tolerance for best and
worst case.
3.60% 24,454
Legal & Regulatory Support NPDO-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at May 2024, with 0.5% tolerance for best and
worst case.
3.60% 314,202
Legal & Regulatory Support NPDO-Utilities Rebate Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at May 2024, with 0.5% tolerance for best and
worst case.
3.60% (11,886)
Legal & Regulatory Support NPDO-Electricity Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 17,630
Legal & Regulatory Support NPDO-Gas Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 7,145
Legal & Regulatory Support NPDO-Heating Oil Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 2,801
Legal & Regulatory Support NPDO-LPG Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 2,438
Legal & Regulatory Support NPDO-Water Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 10,478
Legal & Regulatory Support HUB-Variable Element Based on estimate for RPI at 2025 Q1 tracking the Bank of England forecast for CPI at May 2024, with 0.5% tolerance for best and
worst case.
3.60% 49,176
747,775
Customer and Support Services ICT Estimate added at 10% to reflect input from ICT on increasing costs. 10.00% 210,112
Financial Services Annual External Audit Fee Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 9,177
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% 219,821
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.
2.00% 149,861
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. 1.57% 55,237
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% 7,043
Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 15,059
Roads and Infrastructure Electricity - Street Lighting Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 22,801
Roads and Infrastructure Electricity - Vehicle Charging Points Based on the May 2024 Bank of England Monetary Policy Committee CPI Forecast for 2025 Q1, with a 0.5% tolerance for best and
worst case.
2.60% 4,604
846,277
2,628,438
Council Wide Total
Executive Director Douglas Hendry - Total
Executive Director Kirsty Flanagan - Total
Total Non-Pay Inflation in the Mid Range

Page 18

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 The SEEMiS group, provider of the Council's Education Management Information System, recently
reviewed their long term financial plan and it is anticipated there may be a small pressure from 2026-27
onwards.
0 7 7 7 7 0 7 7 7 7 0 7 7 7 7
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
Best Case Mid Range Scenario Worst Case
APPENDIX 3

Page 19

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 Scenario Worst Case
APPENDIX 3
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 2,116 925 925 925 925
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 £710k across Argyll and Bute  Work ongoing on whether savings could be
made by reducing services or providing services in a different manner.
710 710 710 710 710 710 710 710 710 710 710 710 710 710 710
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
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 General provision for unidentified Cost and Demand Pressures 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500 1,000 2,000 3,000 4,000 5,000
TOTAL 3,010 4,028 4,899 4,862 5,152 3,260 4,528 5,698 5,888 6,428 5,414 5,528 7,292 7,962 9,002

Page 20

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 Estimated Pay inflation reflecting a best case 2%, a mid-range of 3% for
2024/25 then 2% for 2025/26 and 2026/27 and a worst case of 5%.
Adjusted for the impact of the reduction in the employer's pension
contribution rate to 6.5% in 2024/25 and 2025/26 and to 17.5% in
2026/27.
699 1,526 2,369 1,049 2,301 3,590 1,748 3,583 5,802
All Social Work Estimated Pay increments, best case is that 50% of the incremental
changes based on 2023/24 are absorbed and in the mid-range and worst
case, the increase is in line with the increase in 2023/24.
86 172 258 172 344 516 172 344 516
All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable
inflation and worst case.
777 1,606 2,476 891 1,847 2,861 1,003 2,090 3,255
All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are
recharged to Social Work.
63 139 217 78 170 265 93 201 312
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 0 211 426 644 423 859 1,310
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.
29 59 89 59 119 180 88 179 273
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.
31 62 93 61 123 187 92 187 285
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.
0 0 0 0 250 500 0 250 500
Children and
Families
Looked After Children Budget Adjustment - to reflect significant increase
in demand for placements in external residential care facilities.
323 646 969 323 646 969 323 646 969
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.
115 230 345 115 230 345 115 230 345
All Social Work Allowance for unknown cost and demand pressures which could arise. The
best case assumes unknown pressures totalling £250k per annum, the mid
range £500k per annum and the worst case £750k per annum.
250 500 750 500 1,000 1,500 750 1,500 2,250
TOTAL UNFUNDED COST AND DEMAND PRESSURES 2,373 4,940 7,566 3,459 7,456 11,557 4,807 10,069 15,817
Worst CaseMid RangeBest Case