Council tax could rise for all homes in Angus for the first time in almost 10 years as the local authority looks to bridge the gap of a £15 million funding shortfall in its budget for the next year.
Council tax bills have been frozen in Scotland since 2007. However, from April the freeze will be replaced with a discretion for local authorities to increase the tax by a maximum of three per cent annually.
Angus Council is proposing to put the tax up by the maximum amount, which it claims will generate £1.3m - equivalent to 10 per cent of the funding shortfall.
The local authority says its vision is that it will be a “better, stronger, more sustainable but smaller organisation by 2020” and expects to have just 75 percent of its current budget by 2020.
It is preparing for a £15m shortfall in 2017/18 and projecting a £41 to £51m budget reduction over the next four years.
Councillor Paul Valentine, deputy leader of the council, and Councillor Bill Duff, finance spokesman, said at a budget briefing on Friday that this will most likely mean job losses and “one off measures” to help bridge the funding gap.
The councillors would not disclose how many job cuts there will be nor what the one off measures are, saying more information will be disclosed ahead of the budget meeting on February 16.
Cllr Duff added: “We know in this year to come about £15m is the gap we’ve got.
“So it’s tough and it’s going to get tougher. That’s where we are.
“For a while the council was what we call salami slicing, so it was two per cent off everything, three per cent, four per cent.
“We now realise we can’t make the sort of savings by salami slicing, so it’ll have to be a more strategic approach. That’s what Transforming Angus is about.
“It’s about how the council is going to work in the next five or six years or so and where we’re going to be in 2020.
“The figure of £15m sounds like a very scary number. That is the gap, that’s not the cuts.
“I think the cuts figure is a fraction of that figure. It’s not £15m worth of cuts tomorrow. That would be pretty serious.
“There are three elements. There are some cuts, yes, the council tax rise proposed and there are some one-off measures which, hopefully, we will use to bridge the gap.”
He said that consultant EY - which takes a percentage of savings - has helped the council to make some savings already and at a quicker rate.
Cllr Valentine said it has been the “toughest” budget in which to balance the books, with the size of the cuts coming on top of savings that have had to be made in previous years.
He added: “It always gets that bit more difficult the further you go along. It looks like it’s going to happen for the next three or four years at least, so we have to make sure we are well positioned to deal with these things.”
Audit Scotland’s Best Value audit report in 2016 detailed that Angus Council is on track to make changes but wants to see the authority pick up the pace.
The council said it has always had a record of pretty good sound financial management, so the changes that other councils have had to make a few years ago it is having to implement now, meaning the change is “faster and is probably going to run deeper”.
One proposal to bridge the £15m funding gap is to increase council tax for every home in Angus.
This is on top of the national increase on council tax bands E to H, meaning those in the higher tax bands could be hit with a double whammy of rises in April.
It is expected that these two rises combined will raise more than £3m of additional council tax income for Angus Council.
Cllr Duff said: “The gap I mentioned of £15m isn’t all being achieved by savings because, for the first time, we are going to increase the council tax, not that that is any massive secret.
“Some of that gap will be plugged by extra tax income.”
Cllr Valentine added: “I don’t think people are going to be as upset as you think because a lot have been saying for some time that council tax needs to go up.
“Obviously, when you introduce an increase, some people are going to be upset but I don’t think it is going to be anything like as bad as some people would imagine.”
Angus Council has 500 fewer staff than it did five years ago and Cllrs Valentine and Duff said there could be job losses this year as the authority plans to decrease in size by 2020.
Cllr Valentine said the authority wasn’t “hiding that.”
He continued: “There have been discussions with staff and trade unions, so everybody knows there is the potential for job cuts.
“We’re not quite sure of the numbers yet but we know we’re going to be a smaller organisation.
“Our vision will be a better, stronger, more sustainable but smaller organisation by 2020.”
Teachers will not be part of the job loss process as the authority has to meet a certain ratio of teachers to pupils.
The council has said compulsory redundancies are a last resort and it will be looking at voluntary redundancies, early retirement and redeploying staff first.
It will also be examining posts that have been vacant for some time to see if they are still needed.
Cllr Duff said the council will “probably still be the biggest employer in Angus.”
He added: “We’re not talking massive numbers in the next year. That £15m isn’t all cuts. If it was then you would be looking at bigger numbers.
“The long term trend is a council that’s going to have a smaller budget in 2020 than it does now, and a significantly smaller budget.
“We spend two thirds of our cash on wages, so where else can we go? There’s not a lot of choice.
“We’re going to be smaller but in relation to other organisations and businesses in Angus we’re still going to be a huge part of people’s lives.
“We’re still going to be providing education, roads, waste, all the cultural and leisure stuff.
“We’ll just be doing things hopefully a little bit smarter, a little bit better with probably a few less people.”
Cllr Duff said one of the areas that the council is looking at is the real estate it has in every town with the possibility of some council buildings being sold.
He said it’s about trying to utilize the properties most effectively with staff being encouraged to use a ‘hot desk.’
He added: “It’s about using a smaller footprint so we don’t need as much real estate. That frees up buildings that we can either redeploy, sell or rent out.
“It’s about staff being more flexible.
“Rather than staff driving from Arbroath to Forfar for a meeting they can skype, so that saves money.”
Angus Council says it will be turning up the dial on digital and is striving to have “end to end digital processes” wherever it can.
The authority says digital would be the default but people would be able to opt in or out as to whether they wanted to receive communications from the council electronically or by more traditional measures, such as letters in the post.
Cllr Duff said: ”That’s the way the world is moving. I think the council has got to catch up with some of that stuff.
“We’re looking at things like the famous potholes - at the moment you can phone up the ACCESSline, and they can write it down and get on to roads, but there is now technology out there to available to report it electronically and that’s not very far away.
“You’re out with your smart phone and you see a pothole and you know where it is. There might be a faster way of getting that pothole repaired.”