Budget Outlook 2023-24 to 2027-28

Argyll and Bute Council · 8 December 2022
Back to Policy and Resources Committee — 8 December 2022 and its agenda

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 8 DECEMBER 2022
BUDGET OUTLOOK 2023-24 TO 2027-28  
1. EXECUTIVE SUMMARY 
1.1 This report provides an update to the budget outlook 2023-24 to 2027-28,
reported to the Policy and Resources Committee on 13 October 2022. 
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 16 June 2022 and range between
0.5% reduction (best case) and 1.5% reduction (worst case) with a mid-range
reduction of 1.0%.  
1.4 In respect of the 2022-23 pay award, the Scottish Government has agreed to
provide an additional £140m of recurring resource from 2022-23 to support the
5% pay offer and a further £120.6m of capital funding in 2022-23 and 2023-24
which will be baselined as General Revenue Grant from 2024-25 onwards to
ensure that everyone receives an increase of at least £1,925 or £2,000
(dependent on spinal column point).  Although part of this is capital funding, the
Council will require to make a few substitutional accounting adjustments so for
the purposes of the outlook, the total additional funding for pay has been built
into the outlook. 
1.5 There are no changes to my previous assumptions around the growth in
Council Tax. For 2023-24 the Council tax base has been assumed to grow by
1% in the worst case scenario, 1.5% in the mid-range scenario and 2% in the
best case. In future years this then drops down to 0.25% in the worst case
scenario, 0.5% in the mid-range scenario and 0.75% in the best case. 
1.6 As reported in October, the budget outlook includes an adjustment to the base
budget in relation to the 2022-23 pay award.  The budget outlook in October
reflected the estimated net impact pending confirmation of additional Scottish
Government funding.  The gross amount is now included within the base
budget adjustment with the funding reflected in the funding section. 
1.7 The employee cost assumptions have been updated as Financial Services
have concluded their salary template exercise costing the establishment for
2023-24.  There is an overall decrease to previous employee cost estimates of
£0.760m which includes a decrease to the employee base, mainly in Education
due to teacher entitlement and changes in spinal column points within schools
settings and year on year reductions in ELC hours. 
1.8 The assumptions for pay inflation and increments remain as reported in

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October but have been updated following the salary template exercise.  
 Pay inflation for 2023-24 has been updated to 3.5% within the mid-range
scenario based on the current 2022-23 pay negotiations which require the
Council to fund a 3.5% increase in the current year. The best case and
worst case scenarios remain at 2% and 5% respectively.
 Pay inflation for 2024-25 onwards reverts back to 2% in the mid-range and
best case scenario, and 5% in the worst case scenario as previously
reported.
 Increments reflect the actual cost calculated within 2023-24 with the best
case in future years half of the current cost and the mid-range and worst
case the same as the current cost.   
1.9 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. The estimates for non-pay inflation have increased by
£0.080m with the main increases being utilities. 
1.10 There are a number of cost and demand pressures for Council services built
into each scenario and the cost has increased by £0.705m in 2023-24 which
mainly relates to the increase cost for tipping fees and haulage for Helensburgh
and Lomond waste. 
1.11 In addition to the identified cost and demand pressures an allowance for
unidentified cost and demand pressures has been included in mid-range and
worst case scenarios of between £0.250m and £0.500m per year. 
1.12 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
2022, indicative allocations for 2023-24 to 2024-25 were agreed on the basis of
a flat cash allocation. In the budget outlook I have assumed flat cash
allocations across all three scenarios. 
1.13 The budget gap in the mid-range scenario after allowing for the current base
commitments, employee adjustments, non-pay inflation and 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 £53.306m with
a gap of £13.853m in 2023-24.  This is an extremely challenging budget gap of
a value that the Council have not seen for a significant number of years.  The
increase to pay award as well as the rising costs of inflation are the two
significant factors contributing to this large budget gap.   
1.14 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).
 3% reduction to the Live Argyll Management Fee.
 Savings options agreed in February 2021 and February 2022 that impact on
2023-24 and beyond.  
 Proposed increase to Council Tax (3% in all scenarios).
 Emerging savings options as part of 2023-24 budget setting process as

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detailed at 4.8.3. 
1.15 In the mid-range scenario, after accounting for all measures to balance the
budget, including some that will require Member approval, the revised budget
gap estimated over the five year period 2023-24 to 2027-28 is £32.156m with a
gap of £3.234m in 2023-24.   
1.16 The budget gap in the best case scenario over the five years is £16.917m with
a surplus of £1.744m in 2023-24 and in the worst case scenario, the budget
gap over the five years is £73.268m with a gap of £15.991m in 2023-24.  A
summary of all three scenarios is included within Appendix 1. 
1.17 Officers are continuing to explore further savings and income generating
options which will be reported via the Budget Working Group and brought
forward to the Council budget meeting in February.   
1.18 It is recommended that the Policy and Resources Committee consider the
current estimated budget outlook position for the period 2023-24 to 2027-28.

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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE
FINANCIAL SERVICES 8 DECEMBER 2022
BUDGET OUTLOOK 2023-24 TO 2027-28  
2. INTRODUCTION 
2.1 This report provides an update to the budget outlook 2023-24 to 2027-28, reported
to the Policy and Resources Committee on 13 October 2022. 
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 2023-24 to 2027-28. 
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, with the exception of the additional funding
associated with the pay award as noted in paragraph 4.1.2.  In my report in June, I
advised that the Resource Spending review indicated that Local Government is
expected to receive a flat cash settlement up to 2026-27.  The flat cash position is
at portfolio level and does not include any transfers to Local Government from
other portfolios in-year.   These transfers are likely not be confirmed until
December 2022 and that, along with the fact that due to our declining population
our settlement is usually worse that the average, lead me to the funding
assumptions built into the outlook.  The funding assumptions range between a
0.5% reduction (best case) and 1.5% (worst case) with a mid-range reduction of
1.0%.   
4.1.2 In respect of the 2022-23 pay award, the Scottish Government has agreed to
provide an additional £140m of recurring resource from 2022-23 to support the 5%
pay offer and a further £120.6m of capital funding in 2022-23 and 2023-24 which
will be baselined as General Revenue Grant from 2024-25 onwards to ensure that
everyone receives an increase of at least £1,925 or £2,000 (dependent on spinal
column point).  Although part of this is capital funding, the Council will require to
make a few substitutional accounting adjustments so for the purposes of the
outlook, the total additional funding for pay has been built into the outlook.

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4.1.3 The table below summarises the mid-range scenario estimates expressed in
percentage terms and monetary value. 
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
% Change to Funding -1.0% -1.0% -1.0% -1.0% -1.0%
Estimated SG Funding
Reduction
(2,016) (2,143) (2,122) (2,101) (2,080)
Pay Award Additional
Funding*
3,749 3,729 3,692 3,655 3,618
Estimated SG Funding 218,079 215,916 213,757 211,619 209,502 
*It should be noted that the pay award funding noted above relates to the share that the
Council would retain based on a proportionate share being passed over to the HSCP.
However, the amount passed to the HSCP is for Members to consider and within the
budget pack in February, the total gross funding will be presented with an increase to the
HSCP payment. 
Council Tax 
4.1.3 The Council Tax budget for 2022-23 was set at £55.262m which reflected a 3%
inflation increase and 1.5% growth in the Council Tax base as agreed by the
Council on 24 February 2022. 
4.1.4 There are no changes to my previous assumptions around the growth in Council
Tax. It has been assumed that a 1.5% growth in the mid-range (1% in worst case
and 2% in best case) should be maintained for 2023-24 with the drop down to
0.5% in the mid-range in 2024-25. 
4.1.5 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 2022-23.   
4.1.6 The table below summarises the estimated total funding in the mid-range
scenario. 
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Estimated SG Funding 218,079 215,916 213,757 211,619 209,502
Council Tax Base 55,262 55,262 55,262 55,262 55,262
Council Tax Growth 829 1,109 1,391 1,674 1,959
Total Estimated
Funding
274,170 272,287 270,410 268,555 266,723 
4.2 Base Budget 
4.2.1  The 2022-23 budget approved by Council on 24 February 2022 was £262.812m.  
4.2.2 As reported in October the budget outlook includes an adjustment to the base
budget in relation to the 2022-23 pay award.  The pay award for 2022-23 has
concluded for SJC employees. While negotiations in relation to Teachers and
Chief Officers are ongoing an estimated cost on the same basis as SJC

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employees results in an increase of £5.873m to the base budget.   
4.2.3 For future years, there are adjustments required to the base budget from decisions
by Council on 24 February 2022 and other adjustments, including the pay award
detailed in paragraph 4.2.2, as noted in the table below: 
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Base Budget 2022-23 262,812 262,812 262,812 262,812 262,812
Additional Funding in
Finance Order (see
paragraph 4.1.4)
6,315 6,315 6,315 6,315 6,315
Additional budget required
in relation to the Teachers
Pay Settlement 2021-22
(see paragraph 4.1.5)
121 121 121 121 121
Remove one off 2022-23
Election costs
(350) (350) (350) (350) (350)
Remove one off 2022-23
Management/Operational
savings
2,174 2,182 2,182 2,182 2,182
2022-23 Pay Award 5,873 5,873 5,873 5,873 5,873
Revised Base Budget 276,945 276,953 276,953 276,953 276,953 
4.3 Employee Cost Changes 
Detail employee cost update exercise 
4.3.1 Financial Services have populated salary templates with details of the current staff
establishment and where necessary liaised with budget holders to confirm their
staff.  The templates calculate the next years pay bill, including superannuation
and national insurance contributions, using the assumptions for pay award and
increments as noted above.   
4.3.2 In terms of the level of employee budgets for 2023-24, the expectation would be
that the budget would reflect the 2022-23 budget plus any increase due to
incremental progression, inflation and any other unavoidable employee cost
increases less previously approved employee budget savings.  For 2023-24 there
is an overall decrease to previous employee cost estimates of £0.648m for Council
Services (excluding Social Work) and this mainly relates to decrease in Education
due to teacher entitlement and changes in spinal column points within schools
settings and year on year reductions in ELC hours. Note that the Pupil Teacher
ratio adjustment may impact the employee base and this will be calculated once
census data is received at the end of November. 
Pay Award  
4.3.3 The agreed proposal for SJC employees is based on a 5% undifferentiated pay
offer, which includes a £3,000 cap for those earning above £60,000 based on a 37
hour week, and a commitment to ensure that everyone receives an increase of at
least £1,925 or £2,000 depending on spinal column point. The Council is required

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to fund a further 1.5% of the increase having already built 2% into the previously
reported budget outlook. Based on this, the budget outlook has been updated to
assume an increase of 3.5% again in 2023-24 as it is likely that the cost of living
crisis will continue into next year and there will continue to be a requirement to
increase the pay offer above the 2% that was previously estimated. The pay
inflation estimate in 2023-24 is £5.155m.
4.3.4 For future years beyond 2023-24, the pay assumption reverts back to 2% in both
the mid-range and the best case, reflecting that current indications are that
inflation rates should begin to fall during 2023-24 and also that 2% is deemed to
be affordable. For scenario purposes, 5% has been built into the worst case.
Increments
4.3.5 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 half of the
previous year cost, for mid-range and worst case, it will be equal to the cost in
2022-23 (£0.657m).
Reversal of National Insurance Increase
4.3.6 It was announced by the UK Government on 22 September 2022, that the 1.25%
rise in National Insurance (both employers and employees) that was implemented
in April 2023 will be reversed from 6 November 2022 and therefore this can be
removed from the budget estimates going forward.
4.3.7 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.
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Pay Award 5,155 8,204 11,314 14,486 17,721
Increments 657 1,314 1,971 2,628 3,285
Reversal of National
Insurance Increase
(858) (858) (858) (858) (858)
Change to employee base (648) (648) (648) (648) (648)
Total Employee Cost
Changes
4,306 8,012 11,779 15,608 19,500
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 Given the current instability around inflation rates officers continue to review areas
of non-pay inflation of significant value and volatility on an ongoing basis. The

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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 2023-24 budget process.   
4.4.4  The table below summarises the non-pay inflation increases in the mid-range
scenario for Council services since last reported on 13 October 2022 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 2023-24
Previous
estimates
£000
2023-24
Updated
estimates
£000
Increase
£000
Utilities - Electricity, Gas, Oil, Water 1,314 1,219 (95)
Street Lighting Electricity 116 175 59
Vehicle Fuel 60 60 0
Central Repairs - Outside Contractors 66 66 0
Waste PPP/Landfill Tax 502 502 0
NPDO/HUB Schools 1,074 972 (102)
Community Pool Subsidies 70 80 10
Residential Schools 90 90 0
Pre-Primary Partner Providers 181 356 175
ICT 155 172 17
Catering Purchases and Milk 306 306 0
Insurance 146 162 16
Bitumen – Roads 159 159 0
Contingency for unidentified/insufficient
inflation estimate
250 250 0
Total 4,489 4,569 80 
4.4.5 The inflation for years 2024-25 to 2027-28 is noted in the table below and is based
on future years estimates of inflation at this point it time.  It may be that the
inflation could rise to a peak over the next couple of years and then fall again and
this would alter the estimates in the table below, however, this is very difficult to
predict and the estimates will be kept under review.

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2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Unavoidable/Inescapable 7,807 11,356 15,251 19,530
Total Non-Pay Inflation 7,807 11,356 15,251 19,530 
4.5 Cost and Demand Pressures 
4.5.1  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 2022.  Since the Policy and
Resources Committee on 13 October 2022 the following changes have been
made to the cost and demand pressures: 
 New – Increase to tipping fees and haulage costs for Helensburgh & Lomond
residual waste.
 New – New IFRS16 system to manage leases as required by new accounting
standard.
 New – Implementation of new payroll system as support for the current system
will cease.
 New – IT support contract ceased with ACHA.
 New – Helensburgh Leisure Development two hour free parking.
 Amended – Additional Cost for Oracle Fusion.
 Amended – pressure in 2023-24 for HR System.
 Amended – Additional costs derived from the current waste model.
 Amended – Increased cost of salt for Winter Maintenance.
 Amended – Removal of sustainable rate cost pressure for Early Learning and
Childcare in 2023-24 only.
 Removed – Compliance with BMW ban. No impact in 2023-24. 
Officers have identified a significant shortfall in income within piers and harbours,
the most significant being in relation to Craignure.  It appears to be related to
Calmac using smaller/less tonnage vessels resulting in a reduced berthing charge
as well as a reduction in passenger numbers.  The service are investigating the
position further and will look to get a meeting with Transport Scotland to discuss
and understand whether the use of smaller/less tonnage vessels will continue. 
There is likely to be a recurring cost pressure that will need to be built into the
budget outlook and considered as part of the budget process. 
Depending on what option is pursued in respect of the BMW there will be a
revenue and capital cost pressure totalling at least £4.4m for the period January
2023 to September 2026 (see EDI report 1 December for more information).  It is
recommended that this is considered as part of the budget process.  Beyond this
time, there is likely to be a significant revenue cost pressure for the new operating
model going forward.  Officers are in the early stages of assessing the operating
model costs which will include, EFW gate fee costs, haulage cost and the
operations at the existing PPP sites, which will be offset by a reduction in landfill
costs.  There will need to be consideration given as to whether the existing PPP
sites will be managed in-house or outsourced.  The cost pressure post-BMW Ban

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will be reported to Members as soon as is practically possible.   
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 no allowance for this is included within the
best case scenario, a £0.500m general allowance is included within the worst case
and a £0.250m allowance included within the mid-range scenario each year. 
4.5.3 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.   
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Universal Credit – HB
Admin Grant
40 80 120 160 200
Oracle Fusion 40 40 40 40 40
IFRS16 Leasing System 15 15 15 15 15
Payroll System
Implementation
85 0 0 0 0
ASN Support 0 75 206 206 206
SEEMiS Membership Fees 9 11 13 16 16
Sustainable rate for partner
providers
0 327 327 327 327
Election costs 0 0 0 0 300
HR System 150 (50) (50) (50) (50)
Waste 156 49 243 (86) 284
Increase to tipping fees and
haulage costs for H&L
residual waste
646 646 646 646 646
Local Development Plan 0 50 0 50 0
House Loans 19 19 19 19 19
Parking 15 15 15 15 15
IT – Increased bandwidth in
schools
26 26 26 26 26
IT support contract with
ACHA ceased
40 40 40 40 40
Salt for Winter Maintenance 196 196 196 196 196
Cessation of red diesel 78 78 78 78 78
Helensburgh Leisure
Development – 2 hour free
parking
24 24 24 24 24
Insurance 414 414 414 414 414
Allowance for pressures in
future years
250 500 750 1,000 1,250
Total Cost and Demand
Pressures
2,203 2,555 3,122 3,136 4,046 
4.5.4 The cost and demand pressures relating to Social Work within the Health and
Social Care Partnership are summarised within paragraph 4.6.3. 
4.6 Health and Social Care Partnership

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4.6.1  The Council, at the budget meeting on 24 February 2022, agreed a base
allocation to the HSCP of £69.005m for 2022-23 as well as indicative flat cash
allocations for 2023-24 to 2026-27.  On 2 March 2022 the Local Government
Finance Circular 1/2022 was published which distributed additional funding of
which £4.037m was required to be passed to the HSCP, therefore their allocation
increased from £69.005m to £73.042m.  
4.6.2 In the financial monitoring pack presented to the P&R Committee on 8 December
2022, there is a recommendation that Members give consideration as to what
share of the Scottish Government allocations of the £140m Revenue and £120.6m
Capital funding in 2022-23 towards the SJC pay award should be passed to the
HSCP. If a proportionate share is passed to the HSCP this equates to £0.490m
and £0.422m respectively.  The Council will need to consider whether any funding
passed to the HSCP is baselined within 2023-24. 
4.6.3 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.   
4.6.4 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.   
2023-24
£000
2024-25
£000
2025-26
£000
Pay Inflation 1,174 1,868 2,576
Pay Increments 103 206 309
Non-Pay Inflation 3,590 7,038 10,562
Care Services for Younger Adults 416 842 1,276
Adult Services - Supported Living 913 1,825 2,738
Continuing Care for Looked After
Children
0 250 500 
Unknown Cost and Demand
Pressures
750 750 750
Total Cost Increase estimates
for Social Work
6,946 12,779 18,711 
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.

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2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Base Budget 276,945 276,953 276,953 276,953 276,953
Employee Cost Changes 4,306 8,012 11,779 15,608 19,500
Non-Pay Inflation 4,569 7,807 11,356 15,251 19,530
Cost and Demand
Pressures
2,203 2,555 3,122 3,136 4,046
Total Estimated
Expenditure
288,023 295,327 303,210 310,948 320,029
Estimated Funding 274,170 272,287 270,410 268,555 266,723
Estimated Budget
Surplus / (Gap)
Cumulative
(13,853) (23,040) (32,800) (42,393) (53,306) 
4.8 Measures to Balance the Budget 
4.8.1 In previous years, a general inflationary increase of 3% has been applied to fees
and charges.  Within the last reported budget outlook a range of between 2%
(worst case) and 4% (best case) with a mid-range of 3% was included. However,  
in light of the increasing inflation we are experiencing on many cost areas, the
calculations have now been updated to a range of between 3% (worst case) and
9% (best case) with a mid-range of 6%. This results in additional income of
£0.390m in 2023-24 in the mid-range scenario. 
4.8.2 A number of savings options were agreed in February 2021 and February 2022
that impact on 2023-24 and beyond.  These are now factored into the budget
outlook, reducing the budget gap. 
4.8.3  The Executive Leadership Team have been exploring savings and income
generating options to bridge the budget gap in 2023-24 and beyond.  A number of
management/operational savings are summarised within Appendix 5 and amount
to £2.322m in 2023-24.  A high level saving of £0.700m in Education linked to
pupil teacher numbers has also been identified and further work is being carried
out to substantiate this saving and further detail will be brought forward in due
course.  Officers have previously advised that Scottish Government have now
granted a flexibility relating to the accounting treatment of service concessions and
this will give rise to a recurring saving until the end of the life of the current service
concessions.  A paper with further detail on the service concessions flexibility
which will include a retrospective gain will be reported to Council as part of the
budget.  Officers are continuing to explore further savings and income generating
options which will be reported via the Budget Working Group and brought forward
to the Council budget meeting in February.   
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Management/Operational
Savings (see Appendix
4)
2,322 636 636 636 636
Education saving based
on forecast pupil
numbers
700 700 700 700 700

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Service concessions 4,803 4,833 5,001 5,477 6,113
New Savings 7,825 6,169 6,337 6,813 7,449 
4.8.4 As part of the pay negotiations, the Deputy First Minister confirmed an additional
£140m of General Revenue Grant from 2022-23 onwards which went towards the
5% pay offer.  This still left a gap in Local Government of circa £140m (based on
most Councils having budgeted for a 2% increase).  It was agreed that the
Scottish Government in consultation with COSLA would explore further flexibilities
that would enable the gap in pay costs to be funded.  The Deputy First Minister
wrote to COSLA on 1 November 2022 in respect of the additional flexibilities and
outlined that “it is for individual councils, as democratically elected bodies, to
consider the needs of their communities, with a focus on the most vulnerable, their
legal obligations and the totality of resource funding available to them, and to then
take the decisions necessary, openly and transparently, to operate as effectively
as possible.”  This does appear to offer Councils much more flexibility to look at
service areas that were protected in the past and officers will now give this
consideration as they continue to develop options for Members to consider as part
of the budget process.   
4.8.5 In terms of Council Tax, a 3% increase has been assumed across all scenarios,
this being the increase applied in 2022-23.  It will be a matter for Council to decide
the level of Council Tax increase.   
4.8.6 In respect of Live Argyll, at the budget meeting on 24 February 2022, Council
agreed to defer the proposed 3% reduction in the management fee for 2022/23
and noted that this will be applied in 2023-24 and will be subject to any future
budget decisions. 3% of the 2022-23 management fee equates to £0.122m and
this reduction has been built into the budget outlook from 2023-24 onwards.  No
further reduction has been built in, this would be a matter for Council to consider. 
4.8.7  The table below summarises the proposed measures to balance the budget in the
mid-range scenario. 
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Fees and Charges Increase 838 1,686 2,545 3,416 4,298
Management/Operational
Savings Feb 2021
20 20 20 20 20
Policy Savings Feb 2021 128 128 128 128 128
Policy Savings Feb 2022 3 6 6 6 6
New Savings Proposed 7,825 6,169 6,337 6,813 7,449
Council Tax Increase 1,683 3,450 5,278 7,170 9,127
Reduction to Live Argyll
Management Fee
122 122 122 122 122
Total Measures to Balance
the Budget
10,619 11,581 14,436 17,675 21,150 
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.

Page 14

2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Estimated Budget Gap
Prior to Measures to
Balance Budget
(13,853) (23,040) (32,800) (42,393) (53,306)
Savings Measures 10,619 11,581 14,436 17,675 21,150
Estimated Budget
Surplus / (Gap)
Cumulative
(3,234) (11,459) (18,364) (24,718) (32,156)
Estimated Budget
Surplus / (Gap) In Year
(3,234) (8,225) (6,905) (6,354) (7,438) 
4.9.2 In the mid-range scenario, after accounting for all measures to balance the
budget, including those that will require Member approval, the revised budget gap
estimated over the five year period 2023-24 to 2027-28 is £32.156m with a gap of
£3.234m in 2023-24.   
4.9.3 The budget gap in the best case scenario over the five years is £16.917m with a
surplus of £1.744m in 2023-24 and in the worst case scenario, the budget gap
over the five years is £73.268m with a gap of £15.991m in 2023-24.  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 13 October 2022 are summarised in the table below: 
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Previously reported
budget surplus / (gap)
Cumulative
(7,284) (13,619) (21,274) (27,210) (33,011)
2022-23 Pay Award cost
& funding refined
(12) (32) (69) (106) (143)
Removal of Principal
Repayment Holiday
Impact
162 170 179 188 197
Employee Cost Changes
following Salary
Template Exercise 
760 849 939 1,031 1,124
Reversal of National
Insurance Increase
858 858 858 858 858
Adjustment to Non Pay
Inflation
(80) (601) (1,232) (1,992) (2,902)
Adjustments to Cost and
Demand Pressures
(705) (387) 672 382 (1,138)
Fees and Charges
Adjustment
92 184 276 368 460
New Savings Options 2,975 1,119 1,287 1,763 2,399
Rounding

Page 15

Revised Budget
Surplus / (Gap)
Cumulative
(3,234) (11,459) (18,364) (24,718) (32,156) 
4.10 Budget Working Group 
4.10.1 As part of the 2021-22 and 2022-23 budgets, a cross party Budget Working Group
(BWG) was established comprising of six Members from the administration, three
Members from the opposition and two Trade Union representatives. The BWG did
not have any decision making authority but could report to and make
recommendations to either the Council or the Policy and Resources Committee. 
Its primary purpose was to engage with officers and provide scrutiny on the
identification of savings options as they are developed. 
4.10.2 Given the significant budget gap over the next five years it was agreed at Policy
and Resources Committee on 16 June 2022 that a similar group will be
established to support the 2023-24 budget approach. The group now meet
regularly to discuss the up to date budget gap and options to deliver a balanced
budget. 
5. CONCLUSION 
5.1 The budget gap in the mid-range scenario after allowing for the current base
commitments, employee adjustments, non-pay inflation and 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 £53.306m with a gap of
£13.853m in 2023-24.  This is an extremely challenging budget gap of a value that
the Council have not seen for a significant number of years.  The increase to pay
award as well as the rising costs of inflation are the two significant factors
contributing to this large budget gap.   
5.2 After accounting for all measures to balance the budget, including those that will
require Member approval, the revised budget gap estimated over the five year
period 2023-24 to 2027-28 is £32.156m with a gap of £3.234m in 2023-24.   
5.3 Officers are continuing to explore further savings and income generating options
which will be reported via the Budget Working Group and brought forward to the
Council budget meeting in February.   
5.4  This is a very challenging budget outlook position and the level of Scottish
Government funding could alter the position significantly.  The Depute First
Minister has announced that the Scottish Budget will be published on 15
December ahead of the Finance Circular being issued on the 19 December,
however, this announcement was made prior to the UK Autumn Budget Statement
being delayed, therefore clarity is currently being sought as to whether this will
impact the publication dates of the Scottish Budget. 
6. IMPLICATIONS

Page 16

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
29 November 2022 
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)
Appendix 5 – NEW Management/Operational Savings 
For further information contact Anne Blue, Head of Financial Services
anne.blue@argyll-bute.gov.uk

Page 17

BUDGET OUTLOOK 2023-24 to 2027-28 APPENDIX 1
POLICY AND RESOURCES COMMITTEE - 8 DECEMBER 2022
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
2023-24
£000
2024-25
£000
2025-26
£000
2026-27
£000
2027-28
£000
Base Budget 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127 269,127
Base Budget Adjustments 7,818 7,826 7,826 7,826 7,826 7,818 7,826 7,826 7,826 7,826 7,818 7,826 7,826 7,826 7,826
Revised Base Budget 276,945 276,953 276,953 276,953 276,953 276,945 276,953 276,953 276,953 276,953 276,945 276,953 276,953 276,953 276,953
Pay Award 2,946 5,951 9,016 12,142 15,331 5,155 8,204 11,314 14,486 17,721 7,364 15,097 23,216 31,741 40,692
Pay Increments 657 986 1,314 1,643 1,971 657 1,314 1,971 2,628 3,285 657 1,314 1,971 2,628 3,285
Additional Teacher Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Reversal of NIC Increase (858) (858) (858) (858) (858) (858) (858) (858) (858) (858) (858) (858) (858) (858) (858)
Adjustment to Employee Base (648) (648) (648) (648) (648) (648) (648) (648) (648) (648) (648) (648) (648) (648) (648)
Total Employee Cost Changes (Council Services) 2,097 5,431 8,824 12,279 15,796 4,306 8,012 11,779 15,608 19,500 6,515 14,905 23,681 32,863 42,471
Non-Pay Inflation - Council Services 4,139 7,162 10,463 14,072 18,024 4,569 7,807 11,356 15,251 19,530 6,600 11,655 17,056 22,843 29,060
Housing Benefits Admin Grant 40 80 120 160 200 40 80 120 160 200 40 80 120 160 200
Oracle Fusion running costs 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
IFRS16 Implementation 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15
New Payroll System Implementation 85 0 0 0 0 85 0 0 0 0 85 0 0 0 0
ASN Support 0 0 198 198 198 0 75 206 206 206 0 145 444 444 444
SEEMIS Membership Fees 9 11 13 16 16 9 11 13 16 16 9 11 13 16 16
Sustainable Rate for Partner Providers 0 327 327 327 327 0 327 327 327 327 0 327 327 327 327
Election Costs 0 0 0 0 250 0 0 0 0 300 0 0 0 0 350
Software support for a  new HR system & Backfill for project team. 100 (50) (50) (50) (50) 150 (50) (50) (50) (50) 200 (50) (50) (50) (50)
Waste 88 39 165 (107) 193 156 49 243 (86) 284 224 59 321 (65) 374
Waste - Increase to tipping fees/haulage in H&L 478 478 478 478 478 646 646 646 646 646 839 839 839 839 839
Planning (Local Development Plan) 0 50 0 50 0 0 50 0 50 0 0 50 0 50 0
House Loans 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19
Parking 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15
IT - increased bandwidth in schools 26 26 26 26 26 26 26 26 26 26 26 26 26 26 26
IT - support contract with ACHA ceased - loss of income 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
Increase in cost of Salt for Winter Maintenance 176 176 176 176 176 196 196 196 196 196 216 216 216 216 216
Cessation of Red Diesel usage 78 78 78 78 78 78 78 78 78 78 78 78 78 78 78
2 hour free parking at Helensburgh Pool - loss of income 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24
Rightsize Council insurance budgets 414 414 414 414 414 414 414 414 414 414 414 414 414 414 414
Allowance for Cost and Demand Pressures Future Years 0 0 0 0 0 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500
Total Cost and Demand Pressures 1,647 1,782 2,098 1,919 2,459 2,203 2,555 3,122 3,136 4,046 2,784 3,348 4,401 4,608 5,887
Total Estimated Expenditure PRIOR to measures to balance the budget 284,828 291,328 298,338 305,223 313,232 288,023 295,327 303,210 310,948 320,029 292,844 306,861 322,091 337,267 354,371
Scottish Government Grant 214,895 213,821 212,752 211,688 210,629 213,817 211,679 209,562 207,466 205,391 212,736 209,545 206,402 203,305 200,256
Specific Funding for Additional Teachers 515 512 509 506 503 513 508 503 498 493 510 502 494 487 480
Additional Funding in relation to 2022-23 Pay Award 3,749 3,739 3,720 3,701 3,682 3,749 3,729 3,692 3,655 3,618 3,749 3,719 3,663 3,608 3,554
Council Tax 56,367 56,790 57,216 57,645 58,077 56,091 56,371 56,653 56,936 57,221 55,815 55,955 56,095 56,235 56,376
Total Funding 275,526 274,862 274,197 273,540 272,891 274,170 272,287 270,410 268,555 266,723 272,810 269,721 266,654 263,635 260,666
Budget Surplus / (Gap) PRIOR to measures to balance the budget (9,302) (16,466) (24,141) (31,683) (40,341) (13,853) (23,040) (32,800) (42,393) (53,306) (20,034) (37,140) (55,437) (73,632) (93,705)
Measures to Balance the Budget:
Fees and Charges 1,257 2,529 3,818 3,416 6,447 838 1,686 2,545 3,416 4,298 419 843 1,273 1,708 2,149
Live Argyll - 3% decrease to management fee 122 122 122 122 122 122 122 122 122 122 122 122 122 122 122
Management/Operational Savings agreed February 2021 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Policy savings agreed February 2021 128 128 128 128 128 128 128 128 128 128 128 128 128 128 128
Policy savings reported Agreed February 2022 3 6 6 6 6 3 6 6 6 6 3 6 6 6 6
Council Tax Increase 1,691 3,445 5,265 7,152 9,109 1,683 3,425 5,227 7,092 9,021 1,674 3,403 5,188 7,031 8,933
Council Tax Increase (Growth element) 0 34 69 105 143 0 25 51 78 106 0 17 34 52 70
NEW Management/Operational Savings 2,322 636 636 636 636 2,322 636 636 636 636 3 6 6 6 6
NEW Teachers Savings 700 700 700 700 700 700 700 700 700 700 1,674 3,403 5,188 7,031 8,933
NEW Service Concessions Savings 4,803 4,833 5,001 5,477 6,113 4,803 4,833 5,001 5,477 6,113 0 17 34 52 70
Total Measures to Balance the Budget 11,046 12,453 15,765 17,762 23,424 10,619 11,581 14,436 17,675 21,150 4,043 7,965 11,999 16,156 20,437
Budget Surplus / (Gap) Cumulative AFTER measures to balance the budget 1,744 (4,013) (8,377) (13,921) (16,917) (3,234) (11,459) (18,364) (24,718) (32,156) (15,991) (29,175) (43,439) (57,476) (73,268)
Budget Surplus / (Gap) In Year AFTER measures to balance the budget 1,744 (5,757) (4,364) (5,544) (2,997) (3,234) (8,225) (6,905) (6,354) (7,438) (15,991) (13,184) (14,264) (14,038) (15,792)
Best Case Scenario Worst Case ScenarioMid-Range Scenario

Page 18

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 30% increase mid range, with a 0.5%
tolerance for best and worst case.
30.00% 721,852
Council Wide Gas
Due to current market condition for gas 50% increase mid range, with a 0.5% tolerance
for best and worst case.
50.00% 247,358
Council Wide Heating Oils
Due to current market condition for heating oils 50% increase mid range, with a 0.5%
tolerance for best and worst case.
50.00% 133,424
Council Wide Solid Fuel
Due to current market condition for solid fuel 25% increase mid range, with a 0.5%
tolerance for best and worst case.
25.00% 57,594
Council Wide Water Charges Current rate of inflation with a 0.5% tolerance for best and worst case. 10.10% 59,103
Council Wide Vehicle Fuel
Historic rate carried forward from last year - will be reviewed during 2022-23 4.97% 60,453
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% 65,993
Council Wide Contingency for unidentified/insufficient inflation estimate £250k built in to mid-range and £500k built in to worst case scenario 250,000
Council Wide Insurances Current rate of inflation with a 0.5% tolerance for best and worst case. 10.10% 162,172
1,757,949
Education Pre-Primary Partner Provider Uplift
Reflects estimated rate based on a combination of the recently announced increase in
the Real Living Wage rate for staff costs and relevant uplifts for non-staff costs.
9.86% 356,339
Education External School Placements Based on prior year uplifts 8.00% 90,261
Commercial Services Catering Purchases
Figure used by facility services based on national estimates for year 1 with a 0.5%
tolerance for best and worst case.
15.00% 306,596
Legal & Regulatory Support Leisure SLA-MAKI/Islay Pools
Based on RPI at February 2022 with a 0.5% tolerance in the best and worst case
scenarios.
8.18% 13,757
Legal & Regulatory Support Leisure SLA-Atlantis Based on RPI at May 2022 with a 0.5% tolerance in the best and worst case scenarios.
11.86% 65,701
Legal & Regulatory Support NPDO-Variable Element
Based on year on year RPI uplift with a 0.5% tolerance for best and worst case. 8.18% 599,843
Legal & Regulatory Support NPDO-Utilities Rebate RPI at February 2022 with a 0.5% tolerance for best and worst case. 8.20% -23,945
Legal & Regulatory Support NPDO-Electricity
Due to current market condition for electricity 30% increase mid range, with a 0.5%
tolerance for best and worst case.
30.00% 134,896
Legal & Regulatory Support NPDO-Gas
Due to current market condition for gas 50% increase mid range, with a 0.5% tolerance
for best and worst case.
50.00% 79,654
Legal & Regulatory Support NPDO-Heating Oil
Due to current market condition for heating oils 50% increase mid range, with a 0.5%
tolerance for best and worst case.
50.00% 34,401
Legal & Regulatory Support NPDO-LPG
Due to current market condition for LPG 25% increase mid range, with a 0.5% tolerance
for best and worst case.
25.00% 17,967
Legal & Regulatory Support NPDO-Water Current rate of inflation with a 0.5% tolerance for best and worst case. 10.10% 35,412
Legal & Regulatory Support HUB-Variable Element Based on year on year RPI uplift with a 0.5% tolerance for best and worst case.
8.18% 93,883
1,804,765
Customer and Support Services ICT Historic rate carried forward from last year - will be reviewed during 2022-23
15.00% 172,135
Roads and Infrastructure Waste PPP-Private Contractor Inflation Based on RPIX at February 2022 with a 0.5% tolerance for best and worst case.
7.09% 465,049
Roads and Infrastructure Waste PPP-Central Government Inflation
Based on Landfill Tax increase between 21/22 and 22/23 with a 0.5% tolerance for best
and worst case.
1.96% 36,765
Roads and Infrastructure Roads - Bitumen for Road Surfacing Based on price increases in 2022/23 with a 0.5% tolerance for best and worst case.
40.00% 158,512
Roads and Infrastructure Electricity - Street Lighting
Due to current market condition for electricity 30% increase mid range, with a 0.5%
tolerance for best and worst case.
30.00% 174,458
1,006,919
4,569,633
Council Wide Total
Executive Director Douglas Hendry - Total
Executive Director Kirsty Flanagan - Total
Total Non-Pay Inflation in the Mid Range

Page 19

COUNCIL COST AND DEMAND PRESSURES 2023-24 to 2027-28
Department Service Cost/Demand Pressure 2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
Chief Executive's Unit 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
Chief Executive's Unit Financial Services Implementation of new financial ledger system - Oracle Fusion Project 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
Chief Executive's Unit Financial Services Implementation of new IFRS16 system to manage leases and accounting
requirements of the IFRS Finance Leases accounting standard.
15 15 15 15 15 15 15 15 15 15 15 15 15 15 15
Financial Services Implementation of new Payroll System to manage the Council's monthly pay roll.
Cost relates to the creation of a small project team for one year to configure and
test the new system, prepare and test the data transfer from the current system and
deliver end user training and post-implementation support  to the payroll team.
85 0 0 0 0 85 0 0 0 0 85 0 0 0 0
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.  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 continued improvements in recording and the introduction of the additional need
types 'Child plans' and ‘Other’ in 2011.   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.
0 0 198 198 198 0 75 206 206 206 0 145 444 444 444
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.
9 11 13 16 16 9 11 13 16 16 9 11 13 16 16
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.
0 327 327 327 327 0 327 327 327 327 0 327 327 327 327
Best Case Mid Range Scenario Worst Case
APPENDIX 3

Page 20

COUNCIL COST AND DEMAND PRESSURES 2023-24 to 2027-28
Department Service Cost/Demand Pressure 2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
2023-24
£,000
2024-25
£,000
2025-26
£,000
2026-27
£,000
2027-28
£,000
Best Case Mid Range Scenario Worst Case
APPENDIX 3
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 0 250 0 0 0 0 300 0 0 0 0 350
Executive Director -
Kirsty Flanagan
HR Costs for a project team for a  new HR system & Backfill . This is a total new system
build.
100 -50 -50 -50 -50 150 -50 -50 -50 -50 200 -50 -50 -50 -50
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.
88 39 165 (107) 193 156 49 243 (86) 284 224 59 321 (65) 374
Executive Director -
Kirsty Flanagan
Waste Increase to tipping fees and haulage costs for H&L residual waste.  Scottish
Government laid an Amendment Order on Friday 1 July 2022 which came into force
at 1700 on 1 July which indicates that Landfill tax will be due on materials previously
not chargeable and we have now received notification of an increase in the cost.
478 478 478 478 478 646 646 646 646 646 839 839 839 839 839
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.
0 50 0 50 0 0 50 0 50 0 0 50 0 50 0
Executive Director -
Kirsty Flanagan
Housing Rightsize budget for House Loans which is a historic budget which has simply been
rolled forward year on year
19 19 19 19 19 19 19 19 19 19 19 19 19 19 19
Executive Director -
Kirsty Flanagan
Parking Loss in income at Glen Loin Car park, Arrochar due to end of lease and responsibility
for car park returning to owners, Luss Estates
15 15 15 15 15 15 15 15 15 15 15 15 15 15 15
Executive Director -
Kirsty Flanagan
IT Increased bandwidth for schools to allow digital transformation to support the move
to online learning
26 26 26 26 26 26 26 26 26 26 26 26 26 26 26
Executive Director -
Kirsty Flanagan
IT IT Support contract ceased with ACHA.  £40k income received from this annually will
now not be received.
40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
Executive Director -
Kirsty Flanagan
Roads Increased cost of Salt for Winter Maintenance, average useage of 15,000 tonnes of
salt over the winter period would equate to £163k of additional costs.
176 176 176 176 176 196 196 196 196 196 216 216 216 216 216
Executive Director -
Kirsty Flanagan
Roads Change at 1 April 2022 to stop the use of Red Diesel in certain vehicles has resulted
in an unavoidable increase in fuel costs in Roads and Infrastructure.
78 78 78 78 78 78 78 78 78 78 78 78 78 78 78
Executive Director -
Kirsty Flanagan
Roads Helensburgh Leisure Development - 2 hour free parking period resulting in the loss
of parking income
24 24 24 24 24 24 24 24 24 24 24 24 24 24 24
Council Wide Council Wide Rightsize budget for Council insurances which is a historic budget that requires to be
increased in line with the current insurance costs.
414 414 414 414 414 414 414 414 414 414 414 414 414 414 414
Council Wide Council Wide General provision for unidentified Cost and Demand Pressures 0 0 0 0 0 250 500 750 1,000 1,250 500 1,000 1,500 2,000 2,500
TOTAL 1,647 1,782 2,098 1,919 2,459 2,203 2,555 3,122 3,136 4,046 2,784 3,348 4,401 4,608 5,887

Page 21

SOCIAL WORK COST AND DEMAND PRESSURES - 2023-24 to 2025-26 APPENDIX 4
Service Cost/Demand Pressure 2023-24
£000
2024-25
£000
2025-26
£000
2023-24
£000
2024-25
£000
2025-26
£000
2023-24
£000
2024-25
£000
2025-26
£000
All Social Work Estimated Pay inflation reflecting a best case of 2%, mid range of 3.5% and worst
case of 5%.
671 1,355 2,053 1,174 1,868 2,576 1,677 3,438 5,287
All Social Work Estimated Pay increments, best case is that 50% of the incremental changes based
on 2022/23 are absorbed and in the mid-range and worst case, the increase is in
line with the increase in 2022/23.
52 103 155 103 206 309 103 206 309
All Social Work Non-pay inflation, best and worst case based on unavoidable/inescapable inflation
and worst case.
3,098 6,008 8,945 3,494 6,841 10,259 3,889 7,680 11,591
All Social Work Non-pay inflation impact of payroll inflation on NHS posts which are recharged to
Social Work.
96 197 303 96 197 303 106 217 335
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.
173 348 525 346 700 1,061 519 1,055 1,608
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.
35 71 107 70 142 215 106 215 327
Adult Services Learning Disability Budget Adjustment - The Learning Disability Supported Living
budget is carrying a recurring unbudgeted commitment of circa £812k which is
contributing to the recurring overspend on the Social Work budget. To address this
situation, it is proposed to realign the budget over the three year period from
2023/24 to 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.
271 541 812 271 541 812 271 541 812
Adult Services Further investment in Learning Disability Budget totalling £250k per annum, the
mid range £500k per annum and the worst case £750k per annum given immediate
and on-going budget pressures in this service area.
250 500 750 500 1,000 1,500 750 1,500 2,250
Adult Services Physical Disability Budget Adjustment - The Physical Disability budget is carrying a
recurring unbudgeted commitment of circa £316k which is contributing to the
recurring overspend on the Social Work budget. To address this situation, it is
proposed to realign the budget over the three year period from 2023/24 to
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.
105 211 316 105 211 316 105 211 316
Best Case Mid Range Worst Case

Page 22

Service Cost/Demand Pressure 2023-24
£000
2024-25
£000
2025-26
£000
2023-24
£000
2024-25
£000
2025-26
£000
2023-24
£000
2024-25
£000
2025-26
£000
Best Case Mid Range Worst Case
Adult Services Mental Health Budget Adjustment - The Mental Health budget is carrying a
recurring unbudgeted commitment of circa £197k which is contributing to the
recurring overspend on the Social Work budget. To address this situation, it is
proposed to realign the budget over the three year period from 2023/24 to
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 and any additional funding provided to
address mental health issues as a consequence of the COVID pandemic.
37 73 110 37 73 110 37 73 110
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 form high cost external residential care to
local foster and kinship care), the mid case reflects £250k per annum and the worst
case reflects £500k 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.
0 0 0 0 0 0 0 0 0
Adult Services Kintyre Care Centre - cost pressure as a result of transfer of KCC facility to HSCP
Management.
750 750 750 750 750 750 900 900 900
TOTAL COST AND DEMAND PRESSURES 5,538 10,157 14,826 6,946 12,779 18,711 8,713 16,536 24,595

Page 23

MANAGEMENT/OPERATIONAL SAVINGS IDENTIFIED 8 DECEMBER 2022 APPENDIX 5
Service Area Saving Summary
Saving
£'000 FTE H/Count
Saving
£'000 FTE H/Count
Saving
£'000 FTE H/Count
Council Wide
Estimated saving in relation to additional voluntary contributions to
the pension sscheme. 100 0.0 0.0 100 0 0 100 0 0
Earmarked Reserves
Utilisation of Capital Fund to replace capital previously to be funded
by earmarked reserves, thereby, releasing a one-off saving from
earmarked reserves. 1,536 0.0 0.0 0 0 0 0 0 0
Commercial Services Increase to commercial income and events 50 0.0 0.0 250 0 0 250 0 0
DEG - Development
Management
Additional Planning Fees from major applications - one off saving.
Note this could be increased to £390k if carry forward of 2022/23
additional income is allowed. 340 0.0 0.0 0 0 0 0 0 0
Roads and
Infrastructure
Increase unbudgeted income from Commercial Waste  (rightsizing of
income budgets). 250 0.0 0.0 250 0 0 250 0 0
HR &OD
Pause A&B Manager programme for 1 year while the approach is
redesigned which would provide a one-off saving then rightsizing
would allow potential future recurring savings which cannot be
quantified at this stage. 20 0.0 0.0
Registrars
Introduced pilot for funerals service. The findings of the pilot will
inform any future income projections. £6k represents the area the
pilot is being undertaken for a limited time period. 6 0.0 0.0 6 0 0 6 0 0
Registrars Reflecting on the pattern of income generated over the last 5 years. 10 0.0 0.0 10 0 0 10 0 0
Internal Audit
HSCP contract due for renewal in March 2024. Increase charge to
HSCP for Internal Audit Services in line with benchmark of other Local
Authorities. 0 0.0 0.0 10 0 0 10 0 0
Governance, Risk
and Safety 10% inflation on recharge to HSCP for Governance Services. 10 0.0 0.0 10 0 0 10 0 0
2,322 0.0 0.0 636 0.0 0.0 636 0.0 0.0
2023/24 2024/25 2025/26
To be explored further To be explored further