Budget for year ahead discussed

Elected Members have recommended Orkney Islands Council’s budget for the next financial year.

The Policy and Resources Committee agreed that £82 million should be spent on running Council services in 2018-2019 and that savings of £1.8 million should be found during the year ahead.

Councillors also recommended:

• That Council Tax charges should rise by 3%, which would increase the Band D annual charge from £1068 to £1100.
• That existing fees and charges for Council services should increase by at least 4% from 1 April. Exceptions would include Orkney Ferries fares, charges for planning applications and building warrants, licensing fees, trade waste collections, and social care charges that are set by legislation.

OIC’s overall funding from the Scottish Government to run council services over the year ahead amounts to £69 million. In addition, following a long campaign by the Council for fair funding for Orkney’s internal ferry service, an additional £5.5 million has been allocated by the Government. This will mean that Orkney Ferries services are fully funded over the year ahead.

Council Leader James Stockan said: “Although the award of fair funding is very welcome, we still need to find savings of £1.8 million. This is to close the gap between the funding we receive to run other Council services - and the actual cost of providing those services across the county. It amounts to 3% of the revenue support grant we’ll receive from the Scottish Government to run services other than ferries.

“This has meant a challenging budget setting process for our Elected Members and for the officers involved. It has been underway over many months and a great deal of thought and effort has been devoted to finding ways to lessen the impact on our community, our staff and the organisation itself.

“We are having to recommend a range of cuts to services that are valued by people in Orkney. These are difficult decisions, but it is crucial that we put the Council on a sound financial footing as we prepare for twin challenges in the years ahead – further reductions in our Government funding and an ever-growing demand for many of the essential services we provide.”

The measures recommended by the Committee would result in a reduction of the Council’s workforce by the equivalent of 14.2 full time equivalent posts.

Of these, 5.5 FTE posts are currently vacant. For the remaining posts, the intention would be to avoid compulsory redundancies if possible and look instead at alternatives such as redeployment, voluntary redundancy and retirement.

The Committee also recommended today that a contribution of up to £4.7 million should come from the Strategic Reserve Fund to support services during the year ahead.

For the current year a much larger contribution of £7.4 million was needed – to keep internal ferry services running as the Council continued to press for fair funding from the Government - and reduce the need for substantial cuts to services.

“To continue depleting the reserves at that level would be unsustainable,” added Councillor Stockan.

“Our reserves allow us to fund vital projects large and small – everything from new care homes in Stromness and Kirkwall, to improving community facilities like the halls in Deerness and Sandwick.

“This is why the much larger contribution we agreed a year ago had to be a one-off short-term measure. We need to protect the reserves as a legacy for our children and grandchildren – for the good of our community over many years ahead.”

The Committee’s recommendation that Council Tax bills in Orkney should increase by 3% from April 1 would bring in an additional £221,000 in revenue for OIC.

If agreed when the Committee’s recommendations go to a meeting of the Full Council on February 22, the following Council Tax charges would apply in Orkney for the year ahead:

Households with only one adult living in the property will continue to receive a discount of 25% on the charges detailed above.