BUDGET OUTLOOK 2024-25 to 2028-29

Argyll and Bute Council · 10 August 2023
Back to Policy and Resources Committee — 10 August 2023 and its agenda

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 10 AUGUST 2023
BUDGET OUTLOOK 2024-25 TO 2028-29  
1. EXECUTIVE SUMMARY 
1.1 This report provides an update to the budget outlook covering the period 2024-
25 to 2028-29, reported to the Policy and Resources Committee on 11 May
2023. 
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 11 May 2023 and range between
0.5% increase (best case) and 0.5% reduction (worst case) with a mid-range of
0%. This assumption is based on the settlement over the last few years and the
estimates within the spending review which indicate that a flat cash settlement
in future years may be the most likely position, however this assumption will be
kept under review and updated as necessary during 2023-24.  
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 are no changes to the base budget since the report on 11 May 2023. 
1.6 Similarly, there are no changes to the assumptions in respect of employee
costs for Council services which were previously noted as follows: 
 The SJC pay award for 2023-24 has still to be agreed and may have an
impact on the base budget if the pay award is greater than the 3.5%
allowed for in the budget. The teachers’ pay award for 2023-24 has already
been agreed to 31 July 2024 and the current budget is sufficient to cover
the deal.
 For future years, the mid-range scenario has been estimated at 2% on the
basis that it is expected that as inflation reduces it could take pressure off
pay awards. . It also reflects what is affordable to Local Government and
this 2% assumption is currently in line with many other Councils
assumptions.  
 Increments are estimated between £0.329m and £0.657m with mid-range
£0.657m. 
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

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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 11 May
2023 are: 
 Amended - ASN Support increased to reflect continued growth in demand
 New - Repairs and Maintenance costs for the new Helensburgh Waterfront
Leisure Complex
 New - Depots – shortfall in previously agreed saving due to delays
 New - Public Transport Fares – shortfall in previously agreed saving due to
reduction in passenger numbers
 New – Insurance premiums have risen higher than previous forecasts 
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 agreed in February
2023, indicative allocations for 2024-25 to 2025-26 were agreed on the basis of
a flat cash allocation. In the budget outlook I have assumed flat cash
allocations across all three scenarios. 
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 £42.793m with
a gap of £11.481m in 2024-25. 
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-
range).
 Proposed increase to Council Tax (5% increase in 2024-25 in all scenarios,
reducing to a 3% increase in the mid-range and worst case scenarios in
future years with the best case scenario remaining at 5%).
 Policy savings already agreed by Council in February 2022. 
 Management/Operational savings already agreed by Council February
2023.
 Policy savings already agreed by Council in February 2023. 
1.13 In the mid-range scenario, the budget gap estimated over the five year period
2024-25 to 2028-29 is £25.700m with a gap of £7.580m in 2024-25.   
1.14 The budget gap in the best case scenario over the five years is £5.121m with a
gap of £4.848m in 2024-25 and in the worst case scenario, the budget gap
over the five years is £85.031m with a gap of £14.554m in 2024-25.  A

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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 2024-25 to 2028-29.

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 10 AUGUST 2023
BUDGET OUTLOOK 2024-25 TO 2028-29  
2. INTRODUCTION 
2.1 This report provides an update to the budget outlook covering the period 2024-
25 to 2028-29, reported to the Policy and Resources Committee on 11 May
2023. 
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 2024-25 to 2028-29. 
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, I advised that in considering
the assumptions relating to future years funding I have reflected on the funding
over the last 4 years after accounting for new policy commitments, and also the
spending review published in May 2022 which indicated that the total budget for
Local Government would remain flat cash until 2026-27. As a result of this the
assumptions in respect of future years Scottish Government funding range
between a 0.5% increase (best case) and a 0.5% reduction (worst case) with a
mid-range of 0%. 
4.1.2 The table below summarises the mid-range scenario estimates based on a flat
cash settlement. 
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Estimated SG Funding 223,738 223,738 223,738 223,738 223,738 
Council Tax 
4.1.3 The Council Tax base for 2023-24 was set at £58.896m which reflected a 5%

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inflation increase and 1.5% growth in the Council Tax base in 2023-24 and 0.5%
growth in future years as agreed by the Council on 23 February 2023. 
4.1.4 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 2024-25 (0.75% in best case and 0.25% in worst
case). 
4.1.5 
4.1.6
As reported in May, 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 £0.264m in 2024-25. Furthermore, the creation of the self-funded Counter
Fraud team also ensures minimum additional collections of £0.085m in 2024-25.
These additional Council Tax recoveries totalling £0.349m in 2024-25 are built
into the budget outlook. 
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 2023-24.   
4.1.7 The table below summarises the estimated total funding in the mid-range
scenario. 
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Estimated SG Funding 223,738 223,738 223,738 223,738 223,738
Council Tax Base 58,896 58,896 58,896 58,896 58,896
Council Tax Growth 294 590 887 1,186 1,486
Additional Council Tax
recoveries (para 4.1.5)
349 200 202 204 206
Total Estimated
Funding
283,277 283,424 283,723 284,024 284,326 
4.2 Base Budget 
4.2.1 The 2023-24 budget approved by Council on 23 February 2023 was
£284.536m.   
4.2.2 For future years, there are adjustments required to the base budget from
decisions by Council on 23 February 2023 and other adjustments as noted in
the table below: 
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Base Budget 2023-24 284,536 284,536 284,536 284,536 284,536
Remove one-off release
of funding from the
Earmarked Reserves in
relation to the Capital
Fund
(1,536) (1,536) (1,536) (1,536) (1,536)
Adjust for one-off 2023-
24 cost pressures
(442) (442) (442) (442) (442)

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Adjust for one-off 2022-
23 Management/
Operational savings
8 0 0 0 0
Adjust for one-off 2023-
24 Management/
Operational savings
2,581 2,581 2,581 2,581 2,581
Revised Base Budget 285,147 285,139 285,139 285,139 285,139 
4.3 Employee Cost Changes 
Pay Award 
4.3.1 
4.3.2
The SJC pay award for 2023-24 has still to be agreed and this may have an
impact on the base budget if the pay award is greater than the 3.5% allowed for
in the budget. The Scottish Government have agreed funding towards the SJC
2023-24 pay award equivalent to 2.5%, however negotiations are still ongoing. 
The Teachers pay award for 2023-24 has already been agreed (28 months deal
covering the period 1 April 2022 – 31 July 2024) and the current year budget is
sufficient to cover the deal, however future negotiations will have an impact on
the budget outlook. 
4.3.3 For future years, the mid-range scenario has been estimated at 2% on the basis
that it is expected that as inflation reduces it could take pressure off pay awards.
It also reflects what is affordable to Local Government and this 2% assumption
is currently in line with many other Councils assumptions. The best case
scenario also assumes 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.
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 £1.5m 
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 2023-24 (£0.657m).   
4.3.5 The table below summarises the employee cost increases 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 4.6.3. 
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Pay Award 3,049 6,159 9,331 12,567 15,867
Increments 657 1,314 1,971 2,628 3,285
Total Employee Cost
Changes
3,706 7,473 11,302 15,195 19,152

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4.4 Non-Pay Inflation 
4.4.1 Over the last few years, the Council have only included non-pay inflation within
the budget where it was deemed to be unavoidable or inescapable.  In terms of
the budget outlook, only 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.  No contingency is included within the
best case scenario.  This contingency will either be required, reduced or
removed to reflect changing circumstances before the 2024-25 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 4.6.3. 
Inflation Category 2024-25
Previous
estimates
(as at May
2023)
£000
2024-25
Updated
estimates
£000
Increase/
(Decrease)
£000
Utilities - Electricity, Gas, Oil, Water 644 831 187
Street Lighting Electricity 121 121 0
Vehicle Fuel 36 53 17
Central Repairs - Outside Contractors 68 68 0
Waste PPP/Landfill Tax 578 578 0
NPDO/HUB Schools 938 909 (29)
Community Pool Subsidies 95 95 0
Residential Schools 37 54 17
Pre-Primary Partner Providers 119 175 56
ICT 110 181 71
Catering Purchases and Milk 371 342 (29)
Insurance 53 83 30
Bitumen – Roads 17 24 7
Contingency for 250 250 0

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unidentified/insufficient inflation
estimate
Total 3,437 3,764 327 
4.4.5  The most significant movement in non-pay inflation since last reported in May
2023 relates to energy costs. Over the last sixteen months the wholesale cost of
energy, particularly electricity, has risen significantly. During 2022-23, the
Council was largely protected from the increase in prices as it had forward
purchased its energy needs before prices increased. However, having reached
the end of the period this covered, the Council is now exposed to the current
market rates which are significantly higher. The non-pay inflation figures have
been adjusted to account for early estimates of the potential impact on the
Council however this will be monitored throughout the year and updated
accordingly. 
4.4.6 The cumulative inflation for years 2025-26 to 2028-29 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.   
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Unavoidable/Inescapable 6,367 9,145 12,111 15,280
Total Non-Pay Inflation 6,367 9,145 12,111 15,280 
4.5 Cost and Demand Pressures 
4.5.1 
4.5.2 
Over the last few years, services have worked on the basis of having to contain
any cost and demand pressures within current resources, 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 2023.  Since the Policy
and Resources Committee on 11 May 2023 the following changes have been
made to the cost and demand pressures: 
 Amended - ASN Support increased to reflect continued growth in demand
 New - Repairs and Maintenance costs for new Helensburgh Waterfront
Leisure Complex
 New - Depots – shortfall in previously agreed saving due to delays
 New - Public Transport Fares – shortfall in previously agreed saving due to
reduction in passenger numbers
 New – Insurance premiums have risen higher than previous forecasts 
As mentioned in paragraph 4.4.5, the forward purchasing of the Council’s
energy needs for 2022-23 largely protected the Council from the significant
increases in energy costs, particularly electricity. As the Council re-contracts for
its energy now and is exposed to significantly higher market rates, the increase
in prices may exceed the existing 2023-24 budget and a cost pressure may be
required. This will be monitored closely and updated as more information

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becomes available throughout the year.
4.5.3  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. 
4.5.4 The cost pressures are detailed in appendix 3 and are summarised in the table
below and will be subject to review during the financial year.   
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Universal Credit – HB
Admin Grant
40 80 120 160 200
IFRS16 Implementation
Software
18 18 18 18 18
ASN Support 198 400 608 822 822
SEEMiS Membership
Fees
2 4 7 7 7
Sustainable rate for
partner providers
327 327 327 327 327
NPDO/HUB Schools –
2023-24 inflation
480 480 480 480 480
Election costs 0 0 0 300 0
Leisure SLA’s – 2023-24
inflation
10 10 10 10 10
Repairs and Maintenance
– Helensburgh Waterfront
Leisure Complex
105 105 105 105 105
Depots – saving shortfall 108 108 108 108 108
Public Transport – saving
shortfall
29 29 29 29 29
Waste (107) 87 (242) 128 128
Compliance with BMW
Ban
0 608 2,433 2,433 2,433
Waste PPP Contracts –
2023-24 inflation
255 255 255 255 255
Local Development Plan 50 0 50 0 0
Insurances 126 126 126 126 126
Allowance for pressures in
future years
500 1,000 1,500 2,000 2,500
Total Cost and Demand
Pressures 
2,141 3,637 5,934 7,308 7,548 
4.5.5 The cost and demand pressures relating to Social Work within the Health and
Social Care Partnership are summarised within paragraph 4.6.3. 
4.6 Health and Social Care Partnership 
4.6.1 The Council, at the budget meeting on 23 February 2023, agreed a base

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allocation to the HSCP of £76.253m for 2023-24 as well as indicative flat cash
allocations for 2024-25 to 2025-26.    
4.6.2 In the budget outlook, I have assumed flat cash allocations across all scenarios.
These are only assumptions and it will be a matter for Council to consider as
part of the budget process next year.   
4.6.3 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.   
2024-25
£000
2025-26
£000
2026-27
£000
Pay Inflation 691 1,396 2,115
Pay Increments 152 304 456
Non-Pay Inflation 3,997 8,055 12,307
Care Services for Younger Adults 460 929 1,409
Adult Services - Supported Living 55 110 110
Continuing Care for Looked After
Children
0 250 500
Unknown Cost and Demand
Pressures
500 1,000 1,500
Total Cost Increase estimates
for Social Work
5,855 12,044 18,397 
4.7 Estimated Budget Gap PRIOR to Measures to Balance the Budget 
4.7.1 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.     
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Base Budget 285,147 285,139 285,139 285,139 285,139
Employee Cost Changes 3,706 7,473 11,302 15,195 19,152
Non-Pay Inflation 3,764 6,367 9,145 12,111 15,280
Cost and Demand
Pressures
2,141 3,637 5,934 7,308 7,548
Total Estimated
Expenditure
294,758 302,616 311,520 319,753 327,119
Estimated Funding 283,277 283,424 283,723 284,024 284,326
Estimated Budget
Surplus / (Gap)
Cumulative
(11,481) (19,192) (27,797) (35,729) (42,793) 
4.8  Measures to Balance the Budget

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4.8.1 In 2023-24 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.  
4.8.2 Some of the policy options were agreed at the Council meeting on 23 February
2023 that impacted on 2024-25 and beyond.   These are now factored into the
budget outlook, reducing the budget gap. 
4.8.3 In terms of Council Tax, a 5% increase has been assumed across all scenarios
for 2024-25 on the basis that the majority of Councils increased their Council
Tax by at least 5% in 2023-24 and this is something that Council could consider
for another year. From 2025-26 the assumption on the Council Tax increase has
been reduced to 3% in the mid-range and worst case scenarios and left at 5%
within the best case scenario. It will be a matter for Council to decide the level of
Council Tax increase.   
4.8.4 The table below summarises the proposed measures to balance the budget in
the mid-range scenario.
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Fees and Charges
Increase
848 1,696 2,544 3,392 4,240
Council Tax Increase 2,960 4,848 6,795 8,811 10,896
Policy Savings agreed
February 2022
3 3 3 3 3
Management/Operational
Savings agreed February
2023
45 80 80 80 80
Policy Savings agreed
February 2023
45 293 769 1,405 1,874
Total Measures to
Balance the Budget
3,901 6,920 10,191 13,691 17,093
4.9 Estimated Budget Gap AFTER Measures to Balance the Budget
4.9.1 The table below summarises the estimated budget gap in the mid-range
scenario.
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Estimated Budget Gap
Prior to Measures to
Balance Budget
(11,481) (19,192) (27,797) (35,729) (42,793)
Savings Measures 3,901 6,920 10,191 13,691 17,093
Estimated Budget
Surplus / (Gap)
Cumulative
(7,580) (12,272) (17,606) (22,038) (25,700)
Estimated Budget
Surplus / (Gap) In Year
(7,580) (4,691) (5,334) (4,432) (3,662)

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4.9.2 In the mid-range scenario, the budget gap estimated over the five year period
2024-25 to 2028-29 is £25.700m with a gap of £7.580m in 2024-25.   
4.9.3 The budget gap in the best case scenario over the five years is £5.121m with a
gap of £4.848m in 2024-25 and in the worst case scenario, the budget gap over
the five years is £85.031m with a gap of £14.554m in 2024-25.  A summary of
all three scenarios is included within Appendix 1. 
4.9.4 The changes from the previous anticipated outlook reported to the Policy and
Resources Committee on 11 May 2023 are summarised in the table below: 
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Previously reported
budget surplus / (gap)
Cumulative
(6,762) (11,240) (16,219) (20,287) (23,795)
Adjustment to Non-Pay
Inflation
(327) (470) (617) (767) (921)
Cost & Demand
Pressures – ASN
Support
(123) (194) (402) (616) (616)
Cost Pressure – Repairs
& Maintenance
Helensburgh Waterfront
Leisure Complex
(105) (105) (105) (105) (105)
Cost Pressure – Depots
Saving Shortfall
(108) (108) (108) (108) (108)
Cost Pressure – Public
Transport Saving
Shortfall
(29) (29) (29) (29) (29)
Cost Pressure –
Insurance Costs
(126) (126) (126) (126) (126)
Revised Budget
Surplus / (Gap)
Cumulative
(7,580) (12,272) (17,606) (22,038) (25,700) 
5. CONCLUSION 
5.1 In the mid-range scenario, the budget gap estimated over the five year period
2024-25 to 2028-29 is £25.700m with a gap of £7.580m in 2024-25.   Council
officers are continuing to explore savings options during 2023-24 and these will
be presented to members at a future date to help balance the budget in future
years. 
5.2  This is a very challenging budget outlook position and the level of Scottish
Government grant and the pay award are the two assumptions that could alter
the figures significantly.  Both will be kept under close review and the budget
outlook updated as and when further information becomes available.

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6. IMPLICATIONS 
6.1 Policy -  Sets out the budget outlook that provides the financial
envelope for policy decisions.
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 Customer Service - None directly from this report but any proposals to
address the estimated budget gap will need to consider
customer service. 
Kirsty Flanagan
Executive Director/Section 95 Officer
14 July 2023 
Policy Lead for Finance and Commercial Services:  Councillor Gary Mulvaney 
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

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BUDGET OUTLOOK 2024-25 to 2028-29 APPENDIX 1
POLICY AND RESOURCES COMMITTEE - 10 AUGUST 2023
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2028-29
£000
Base Budget 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536 284,536
Base Budget Adjustments 611 603 603 603 603 611 603 603 603 603 611 603 603 603 603
Revised Base Budget 285,147 285,139 285,139 285,139 285,139 285,147 285,139 285,139 285,139 285,139 285,147 285,139 285,139 285,139 285,139
Pay Award 3,049 6,159 9,331 12,567 15,867 3,049 6,159 9,331 12,567 15,867 7,622 18,892 30,725 43,150 56,196
Pay Increments 329 658 986 1,315 1,643 657 1,314 1,971 2,628 3,285 657 1,314 1,971 2,628 3,285
Adjustment to Employee Base 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Employee Cost Changes (Council Services) 3,378 6,817 10,317 13,882 17,510 3,706 7,473 11,302 15,195 19,152 8,279 20,206 32,696 45,778 59,481
Non-Pay Inflation - Council Services 3,307 5,671 8,184 10,857 13,701 3,764 6,367 9,145 12,111 15,280 3,970 8,665 13,313 18,180 23,283
Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200
IFRS16 Implementation 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18
ASN Support 198 400 608 822 822 198 400 608 822 822 198 400 608 822 822
SEEMIS Membership Fees 2 4 7 7 7 2 4 7 7 7 2 4 7 7 7
Sustainable Rate for Partner Providers 327 327 327 327 327 327 327 327 327 327 327 327 327 327 327
NPDO and HUB Schools 2023/24 inflation 480 480 480 480 480 480 480 480 480 480 480 480 480 480 480
Election Costs 0 0 0 250 0 0 0 0 300 0 0 0 0 350 0
Leisure SLA's 2023/24 inflation 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
Repairs and Maintenance - Helensburgh Waterfront Leisure Complex 105 105 105 105 105 105 105 105 105 105 105 105 105 105 105
Depots - saving shortfall 108 108 108 108 108 108 108 108 108 108 108 108 108 108 108
Public Transport Fares - saving shortfall 29 29 29 29 29 29 29 29 29 29 29 29 29 29 29
Waste (117) 9 (263) 37 37 (107) 87 (242) 128 128 (97) 165 (221) 218 218
Compliance with BMW Ban 0 0 462 925 925 0 608 2,433 2,433 2,433 0 608 2,433 2,433 2,433
Waste PPP Contract 2023/24 Inflation 255 255 255 255 255 255 255 255 255 255 255 255 255 255 255
Planning (Local Development Plan) 50 0 50 0 0 50 0 50 0 0 50 0 50 0 0
Insurances 126 126 126 126 126 126 126 126 126 126 126 126 126 126 126
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 1,881 2,451 3,192 4,659 4,699 2,141 3,637 5,934 7,308 7,548 2,651 4,715 7,455 9,448 10,138
Total Estimated Expenditure PRIOR to measures to balance the budget 293,713 300,078 306,832 314,537 321,049 294,758 302,616 311,520 319,753 327,119 300,047 318,725 338,603 358,545 378,041
Scottish Government Grant 224,846 225,971 227,101 228,237 229,378 223,738 223,738 223,738 223,738 223,738 222,630 221,517 220,409 219,307 218,211
Council Tax 59,687 59,983 60,433 60,887 61,344 59,539 59,686 59,985 60,286 60,588 59,394 59,397 59,549 59,702 59,856
Total Funding 284,533 285,954 287,534 289,124 290,722 283,277 283,424 283,723 284,024 284,326 282,024 280,914 279,958 279,009 278,067
Budget Surplus / (Gap) PRIOR to measures to balance the budget (9,180) (14,123) (19,298) (25,413) (30,327) (11,481) (19,192) (27,797) (35,729) (42,793) (18,023) (37,811) (58,645) (79,536) (99,974)
Measures to Balance the Budget:
Fees and Charges 1,272 2,544 3,816 5,088 6,360 848 1,696 2,544 3,392 4,240 424 848 1,272 1,696 2,120
Council Tax Increase 2,967 6,105 9,422 12,927 16,630 2,960 4,833 6,771 8,777 10,852 2,952 4,816 6,741 8,728 10,779
Council Tax Increase (Growth element) 0 59 122 188 259 0 15 24 34 44 0 30 48 67 87
Policy savings agreed February 2022 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Management/Operational Savings agreed Feb 2023 45 80 80 80 80 45 80 80 80 80 45 80 80 80 80
Policy Savings agreed February 2023 45 293 769 1,405 1,874 45 293 769 1,405 1,874 45 293 769 1,405 1,874
Total Measures to Balance the Budget 4,332 9,084 14,212 19,691 25,206 3,901 6,920 10,191 13,691 17,093 3,469 6,070 8,913 11,979 14,943
Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget (4,848) (5,039) (5,086) (5,722) (5,121) (7,580) (12,272) (17,606) (22,038) (25,700) (14,554) (31,741) (49,732) (67,557) (85,031)
Budget Surplus / (Gap) In Year AFTER measures to balance the budget (4,848) (191) (47) (636) 600 (7,580) (4,691) (5,334) (4,432) (3,662) (14,554) (17,188) (17,990) (17,825) (17,474)
Best Case Scenario Mid-Range Scenario Worst Case Scenario

Page 15

NON-PAY INFLATION (COUNCIL) Appendix 2
Service Category Basis of Inflation Inflation
Percentage
Mid Range
2023/24
Council Wide Electricity Due to current market condition for electricity 16% increase mid range, with a 0.5% tolerance for best and worst case. 16.00% 671,989
Council Wide Gas Due to current market condition for gas 15% increase with mid range based on latest information available from Property Services,
with a 0.5% tolerance for best and worst case.
15.00% 111,310
Council Wide Heating Oils Due to current market condition for gas 8.70% increase with mid range reflecting May 2023 CPI rate, with a 0.5% tolerance for best
and worst case.
8.70% 34,825
Council Wide Solid Fuel Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 12,671
Council Wide Vehicle Fuel Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 52,682
Council Wide Central Repairs - Outside Contractors Based on labour and materials costs survey data from the Royal Institute of Chartered Surveyors (RICS) and information from the
property team on the typical allocation of their costs between labour and materials.
3.39% 68,225
Council Wide Insurances Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 83,328
Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 250,000
1,285,030
Education Pre-Primary Partner Provider Uplift Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 174,527
Education External School Placements Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 53,796
Commercial Services Catering Purchases Based on Office for National Statistics Inflation Rate for Food and Non-Alcoholic Beverages at May 2023, with a 0.5% tolerance for
best and worst case .
18.40% 342,949
Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools Based on Bank of England Monetary Policy Committee CPI Forecast for 2023 Q2, with a 0.5% tolerance for best and worst case. 8.20% 15,707
Legal & Regulatory Support Leisure SLA-Atlantis Based on RPI at September 2022 with a 0.5% tolerance in the best and worst case scenarios. 12.64% 78,857
Legal & Regulatory Support NPDO-Variable Element Based on Bank of England Monetary Policy Committee CPI Forecast for 2023 Q2, with a 0.5% tolerance for best and worst case. 8.20% 684,863
Legal & Regulatory Support NPDO-Utilities Rebate Based on Bank of England Monetary Policy Committee CPI Forecast for 2023 Q2, with a 0.5% tolerance for best and worst case. 8.20% -25,908
Legal & Regulatory Support NPDO-Electricity Due to current market condition for electricity 16% increase mid range, with a 0.5% tolerance for best and worst case. 16.00% 93,528
Legal & Regulatory Support NPDO-Gas Due to current market condition for gas 15% increase with mid range based on latest information available from Property Services,
with a 0.5% tolerance for best and worst case.
15.00% 35,844
Legal & Regulatory Support NPDO-Heating Oil Due to current market condition for gas 8.70% increase with mid range reflecting May 2023 CPI rate, with a 0.5% tolerance for best
and worst case.
8.70% 8,979
Legal & Regulatory Support NPDO-LPG Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 3,953
Legal & Regulatory Support HUB-Variable Element Based on Bank of England Monetary Policy Committee CPI Forecast for 2023 Q2, with a 0.5% tolerance for best and worst case. 8.20% 107,189
1,574,284
Customer and Support Services ICT Estimate based on feedback from ICT staff in relation to significant price increases for ICT services and equipment. 10.00% 180,886
Roads and Infrastructure Waste PPP-Private Contractor Inflation Based on 85% of the Bank of England Monetary Policy Committee CPI Forecast for 2023 Q2, with a 0.5% tolerance for best and worst
case.
7.00% 509,360
Roads and Infrastructure Waste PPP-Central Government Inflation Based on Landfill Tax increase between 22/23 and 23/24 with a 0.5% tolerance for best and worst case. Will be updated once the
2024/25 rate is published.
3.55% 68,777
Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on Bank of England Monetary Policy Committee CPI Forecast for 2024 Q1, with a 0.5% tolerance for best and worst case. 4.40% 24,411
Roads and Infrastructure Electricity - Street Lighting Due to current market condition for electricity 16% increase mid range, with a 0.5% tolerance for best and worst case. 16.00% 120,958
904,392
3,763,706
Council Wide Total
Executive Director Douglas Hendry - Total
Executive Director Kirsty Flanagan - Total
Total Non-Pay Inflation in the Mid Range

Page 16

COUNCIL COST AND DEMAND PRESSURES 2024-25 to 2028-29
Department Service Cost/Demand Pressure 2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
Executive Director -
Douglas Hendry
Education The demand for ASN support in Argyll and Bute has continued to grow with a significant
increase in, and early identification of children and young people presenting with complex
additional support needs, including mental health difficulties which manifests often in
dysregulated behaviours.  It is anticipated that growth continues over the next 5 years
however the extent of this growth is difficult to determine.  Scottish Government statistics
show that the number of pupils identified with ASN has increased markedly since 2010 and
there continue to be year on year increases. These increases are likely due to continue as we
see the impact of the Covid 19 pandemic on children and young people who were born from
2020 onwards and as we work with partners to streamline assessment processes which help
us to understand need more thoroughly.  Scottish Government statistical datasets show that
the percentage of school roll in mainstream schools of pupils with ASN has increased by
approximately 3% year on year.  Within many authorities, this means increased numbers of
children accessing specialist provision. As Argyll and Bute do not have equitable access to
Specialist provision in all areas, the cost pressure associated with offering appropriate
support within our local schools continues to increase in line with need.
198 400 608 822 822 198 400 608 822 822 198 400 608 822 822
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 refreshed it to cover the period 2021/22
to 2025/26.  As a result of this exercise there were implications on Membership fees with a
cost pressure on the Education service arising from financial year 2023/24.  Indicative
membership fees were provided for financial years 2021/22 to 2022/23 and these have been
factored in accordingly.
2 4 7 7 7 2 4 7 7 7 2 4 7 7 7
Executive Director -
Douglas Hendry
Education The Council has had a requirement to deliver 1140 hours of Early Learning and Childcare
from August 2021. The Council has been notified that the ring fenced funding will be reduced
by £1.124m from 2022-23. Also, as part of the 1140 expansion programme, the Scottish
Government 'Funding Follows the Child' guidance, requires local authorities to set a rate
locally that is paid to funded providers in the private and third sectors, including
childminders, to deliver the funded entitlement that allows them to deliver a high quality
ELC experience for all children. This rate should be sustainable and reflect national policy
priorities, including funding to enable payment of the real Living Wage to all childcare
workers delivering the funded entitlement and have a margin for re-investment built in. The
service has worked hard to mitigate the effects of this and has reduced expenditure as far as
possible.  However there remains a funding gap, the service are able to cover the over spend
for 2022-23 and 2023-24 from carry forwards so the cost pressure is requested from 2024-25
onwards. The service will continually review their plans looking for efficiencies where
possible.
327 327 327 327 327 327 327 327 327 327 327 327 327 327 327
Executive Director -
Douglas Hendry
Education Adjustment to the base budget for the Schools NPDO and Hub Schools contracts due to the
rate of inflation at February 2023 being higher than forecast when the 2023/24 budget was
prepared.
480 480 480 480 480 480 480 480 480 480 480 480 480 480 480
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 0 250 0 0 0 0 300 0 0 0 0 350 0
Executive Director -
Douglas Hendry
Commercial Services Adjustment to the base budget for the swimming pools service level agreements due to the
rate of inflation at February 2023 being higher than forecast when the 2023/24 budget was
prepared.
10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
Executive Director -
Douglas Hendry
Commercial Services There is an ongoing need for the Council to manage the maintenance and repair of its
buildings.  Now that the new Helensburgh Waterfront Leisure Complex is operational there
are additional pressures on this budget for maintenance and inspection of fabric, mechanical
systems and electrical systems for this new asset.  The cost of maintenance and inspection
over the next 9 years is estimated at £939k, averaging £105k per annum. 
105 105 105 105 105 105 105 105 105 105 105 105 105 105 105
Best Case Mid Range Scenario Worst Case
APPENDIX 3

Page 17

COUNCIL COST AND DEMAND PRESSURES 2024-25 to 2028-29
Department Service Cost/Demand Pressure 2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2028-29
£,000
Best Case Mid Range Scenario Worst Case
APPENDIX 3
Executive Director -
Kirsty Flanagan
Financial Services Universal Credit “Full” Service went live in Sept 2018, but managed migration has been
deferred to 2021 and will not be completed until 2024. 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 marginally since implementation of Universal
Credit but it is hard to predict just how quickly the rest of the working age caseload will
migrate from Housing Benefit to Universal Credit between now and 2024.  These figures
represent our best estimates at this time.
40 80 120 160 200 40 80 120 160 200 40 80 120 160 200
Executive Director -
Kirsty Flanagan
Financial Services Implementation of new IFRS16 system to manage leases and accounting requirements of
the IFRS Finance Leases accounting standard.
18 18 18 18 18 18 18 18 18 18 18 18 18 18 18
Executive Director -
Kirsty Flanagan
Roads & Infrastructure
Services
Previously agreed saving from 2018-19 for Depots (TB07) is now not fully achievable with a
shortfall of £107,500.  Delays in progressing the Depot Rationalisation programme and
limited capital investment available has resulted in the savings not being realised.  Cost
pressure to remove this saving with further work ongoing on the Depot Rationalisation
programme which will hopefully generate further savings in the future.
108 108 108 108 108 108 108 108 108 108 108 108 108 108 108
Executive Director -
Kirsty Flanagan
Roads & Infrastructure
Services
Previously agreed saving from 2021-22 for Public Transport Fare increases (R&I17) is now not
fully achievable with a shortfall of £29K.  Report provided from Consultants Stantec outlining
the proposed saving did not materialise due to a reduction in passenger numbers using local
public transport.
29 29 29 29 29 29 29 29 29 29 29 29 29 29 29
Executive Director -
Kirsty Flanagan
Waste Additional costs derived from the current waste model. Note that the treatment of waste
going forward has not been fully costed due to uncertainty as to how the council will deal
with the Bio Municipal Waste ban and the Deposit Return Scheme. Pressure has increased
due to an updated waste model.
(117) 9 (263) 37 37 (107) 87 (242) 128 128 (97) 165 (221) 218 218
Executive Director -
Kirsty Flanagan
Waste Achieving compliance with ban on biodegradable municipal waste 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.  There are also capital cost implications that are not included within these
estimates.  Due to the complexity of the model, estimates are subject to change. The best
case scenario reflects option 4 detailed in the report to the Environment, Development and
Infrastructure Committee on 01/12/2022. The mid range and worst case scenarios reflects
option 3 included in the same report and take into account the risk that the SG will not agree
a derogation.
0 0 462 925 925 0 608 2,433 2,433 2,433 0 608 2,433 2,433 2,433
Executive Director -
Kirsty Flanagan
Waste Adjustment to the base budget for the Waste PPP contract due to the rate of inflation at
February 2023 being higher than forecast when the 2023/24 budget was prepared.
255 255 255 255 255 255 255 255 255 255 255 255 255 255 255
Executive Director -
Kirsty Flanagan
Planning Local development plan will require to be done under the new Planning legislation which is a
revised process from the current one and will have a 10 year life. The new process has 2
stages where there is likely to be a cost pressure - a gate check followed by an examination
some time later.
50 0 50 0 0 50 0 50 0 0 50 0 50 0 0
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.
126 126 126 126 126 126 126 126 126 126 126 126 126 126 126
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 1,881 2,451 3,192 4,659 4,699 2,141 3,637 5,934 7,308 7,548 2,651 4,715 7,455 9,448 10,138

Page 18

SOCIAL WORK COST AND DEMAND PRESSURES - 2024-25 to 2026-27 APPENDIX 4
Service Cost/Demand Pressure 2024-25
£000
2025-26
£000
2026-27
£000
2024-25
£000
2025-26
£000
2026-27
£000
2024-25
£000
2025-26
£000
2026-27
£000
All Social Work Estimated Pay inflation reflecting a best case and mid-range of 2% and worst case
of 5%.
691 1,396 2,115 691 1,396 2,115 1,729 3,544 5,450
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.
76 152 228 152 304 456 152 304 456
All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable inflation
and worst case.
3,429 6,902 10,509 3,824 7,739 11,842 4,219 8,584 13,194
All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are recharged to
Social Work.
160 287 420 173 316 465 187 344 510
Adult Care Younger Adults Demand Growth (Excluding 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.
194 390 588 388 784 1,189 582 1,183 1,803
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.
36 72 109 72 145 220 107 218 332
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 2024-25 and
2025-26 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.
55 110 110 55 110 110 55 110 110
Children and
Families
Continuing Care demand for Looked After young people 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 0 250 500 250 500 750
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 COST AND DEMAND PRESSURES 4,891 9,809 14,829 5,855 12,044 18,397 8,031 16,287 24,855
Best Case Mid Range Worst Case