Fife Council predicting an £18.6m overspend by end of March

Although the local authority have balanced the books without major cuts for the last few years, councillors were told that may not be possible. 

Eileen Rowand, executive finance director, admitted: “It is a very challenging position.

“We’ve been able to manage over recent years without taking difficult decisions but we’re most definitely in that territory now.” 

At the cabinet committee meeting on Thursday, councillors agreed to instruct service directors to “identify plans to mitigate overspends". 

They were also asked to “note the worsening high-level financial position”.

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Ms Rowand went on: “We’re asking service directors to identify plans to reduce the level of overspend because we clearly cannot operate from a position where we have this level of overspend.”

Council services are currently predicting an £18.6m overspend by the end of the financial year on March 31. 

Councillors have been given an update on the financial picture facing Fife. (Image: Newsquest)

“The current forecast suggests an overspend in the current year of £16.7m,” the committee report said. 

“This is a combined result of service overspends of £18.6m and an underspend of £1.9m [in contingencies].” 

Fife Health and Social Care Partnership are responsible for more than half of the predicted overspend – by the end of the year, it is expected to be £11m in the red. 

Part of the tab will be picked up by NHS Fife under the partnership arrangement, but the council are expected to be on the hook for nearly £7.2m. 

Education services are expecting a £4.5m overspend; Fife’s Place Directorate is reporting a £3.5m gap; and the Communities Directorate has forecast overspend of £4.5m. 

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“Some services are managing large overspends and actions to minimise or mitigate these should be taken,” Ms Rowand's report said.  “Further control measures will also be considered.”

The council are also expecting a significant budget gap from the outset of 2025/26.  

At this stage, it's just guesswork, but assuming that Holyrood gives the same amount of funding as it did last year – and assuming a three per cent council tax increase – Ms Rowand said Fife is looking at a £17m budget gap for 2025/26, and that could rise to £46m by 2027/28.

However, those numbers ultimately come down to Fife’s funding package from the Scottish Government, which in turn depends on Holyrood’s funding package from the UK Government in Westminster. 

“I think the position is difficult at both levels of government and the level of resource that comes to Scotland from the UK Government will influence the level of funds that is allocated to local government from Holyrood,” Ms Rowand said. 

SNP group leader David Alexander added: “We kind of know the Scottish Government’s position, and we know how bad that is, but what we don’t know is how much worse things are going to get from the UK Government.

"That is going to be a big decisive factor here with how bad things are going to get.” 

The Scottish Government budget will be announced in early December and the local government settlement will then follow.

Ms Rowand said officers are already working on budget proposals for the coming year. 

“We will share those with political groups towards the end of October,” she said. “That will put groups in a position to come forward with budget proposals to close the budget gap in February.”