Proposals to set the annual revenue budget for Aberdeenshire Council will be discussed by councillors when they meet this week.
Councillors will be presented with a report from the Head of Finance setting out the draft revenue budget for the period 2013-18.
The report sets out the funding deal for Aberdeenshire Council of £390.8 million for 2013/14, on the condition that council tax is frozen, teacher numbers are maintained and places are secured for all probationer teachers.
Failure to meet these commitments would result in a reduction to the council’s grant of 1.4%, around £5.5 million.
The report advises that funds have been allocated from the current year’s finances to improve broadband across Aberdeenshire. However, the report also advises that further savings will be required from 2015/16 onwards, as the council’s budget is expected to remain static, whilst the cost of delivering services is expected to increase.
The 2013/14 budget has been reviewed in detail and inflationary and budget pressures have been incorporated. Of the £52 million savings agreed in November 2010, over £5million have now been identified as no longer required and the impact of this has been built into the budget.
Officers have also reviewed the budget to look at spending patterns within services, which may have resulted in underspends occurring over the past few years. Where appropriate, these budgets have been reduced, with services being given the opportunity to access funding to fill posts as the job market improves, or steps to address the recruitment difficulties begin to take effect.
Following the review of the budget, a budget surplus of £19.531 million has been identified for 2013/14 to be placed into the council’s general fund reserves, which could be moved back into the revenue budget as and when required.
Looking to the future, the report reflects the indicative financial position of the council up to 2017/18, which reveals that from 2015/16 the council is facing shortfalls in funding increasing dramatically in 2017/18 to a shortfall of £23 million.
The report suggests that further work should begin now to identify how these shortfalls could be addressed.
Head of Finance Alan Wood said: “The officer’s recommendations demonstrate that the council’s finances continue to be in good shape. Money has been set aside from this year’s budget to pay for improvements to broadband, and further amounts identified within service budgets can be moved into general reserves.
“It is clear that some areas of the council are struggling to recruit which, on one hand, is a positive sign of the very buoyant local economy.
However, it is a major contributing factor to the Council’s financial position which has been reported over the last two years.
“There are also proposals to remove some of the proposed savings which officers have stated are no longer required.
“The council continues to be very aware of the financial challenges facing us in the future. It is clear that in a few years, the council will face a funding shortfall, and officers are continuing to find ways to put us in the best possible position to cope with the future.”