Warning on Clackmannanshire finances

28 Jun 19

“Serious concerns” remain over the finances of Clackmannanshire Council, which faces a budget gap of £23m over the next three years.

Auditors said that although the council, the smallest on the Scottish mainland, had significantly improved over the last 12 months, its financial position would not be sustainable without the transformation of services.

“The council’s financial position has improved but remains very challenging,” the Accounts Commission said in a progress report published today.

“It recognises its finances are not sustainable in the longer term without transformation and decisions on services.”

The commission found that in since its last assurance report, which called for urgent and decisive action to address concerns over the council’s finances, Clackmannanshire had demonstrated a determination to change by making savings, appointing a new management team and improving collaboration between councillors and officers.

The authority was also building effective working relationships with local councils and others as it sought to establish sustainable and efficient services for the future.

The combination of savings, ongoing organisational redesign, increased council tax, use of reserves and increased grant funding meant that the council had been able to avoid difficult budget decisions in 2019–20.

However, it recognised that its reliance on one-off savings and contributions from its capital receipts reserve was not sustainable, and that addressing the likely funding gap of £10.1m next year – followed by £6.7m the following year and £6.5m the year after – would be “very challenging”.

The funding of the joint board responsible for the integration of local health and social care services, which has a projected deficit of £2.5m, was also creating uncertainty over the council’s financial position, auditors said.

Stephen Moore, member of the Accounts Commission, said the scale of the challenge ahead for Clackmannanshire remained significant, and that auditors would continue to have a close interest in progress made.

"Whilst the council has had the determination to take on board many of the recommendations in our 2018 report, there is an urgent need for the council to implement change to tackle their financial position,” he said.

“Without transforming services, the council's finances are not sustainable in the longer term.”

But Clackmannanshire chief executive Nikki Bridle described the findings as “largely positive” and confirmation that the work carried out by the council since its last report had had a positive effect.

“Like all local authorities, we face significant financial challenges, but we are on a journey of continuous improvement, with clear plans in place to address the areas where improvements are needed,” she said.

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