‘Pragmatic’ council budget planned for Edinburgh amid ongoing Covid uncertainty

Councillors in Edinburgh will next week consider a report outlining proposals for a balanced overall budget for 2021/22 as uncertainty persists around future changes and financial pressures brought about by the ongoing Covid19 crisis.

'Pragmatic' council budget planned for Edinburgh amid ongoing Covid uncertainty

The report has been published ahead of today’s planned announcement by the Scottish Government of the 2021/22 Local Government Financial Settlement (LGFS). 

Financial flexibilities already agreed with the Scottish Government have contributed to the balanced budget position for 2021/22, with an acknowledgement that more fundamental service reform, improvement and prioritisation will be required in future years.

At their meeting on February 2, the finance and resources committee will also consider the council’s new three-year Business Plan, titled ‘Our Future Council, Our Future City’, which brings together the council’s strategic priorities in a single plan responding to the need for change and seeks to shape a fair and green post-pandemic recovery for the capital over the years ahead.

The Business Plan aims to deliver a sustainable, fair and thriving future for Edinburgh, responding directly to the aspirations tens of thousands of residents have shared for their home city as part of the 2050 Edinburgh City Vision process and guided by the council’s three key priorities of tackling poverty and inequality, boosting sustainability and enhancing wellbeing.

As well as reporting a balanced budget position for 2021/22, the Revenue Budget report sets out a budget framework for the following four years. During this time, due to a combination of rising demand, inflationary pressures, legislative reform and a level of funding that is not expected to keep pace, the council will be required to save more than £100 million whilst maintaining an appropriate level of reserves. Difficult decisions on where to prioritise investment will therefore be unavoidable. 

Finance and resources convener Councillor Rob Munn said: “Like all Scottish local authorities, we find ourselves in a difficult situation, both in terms of how long Covid restrictions will be in place and what further pressures the pandemic will place on our budgets in the months to come. We’ve already faced budget pressures of around £85m through increased expenditure and lost income.

“That’s why it’s entirely pragmatic to set a balanced one-year budget for the next financial year while preparing for broader reforms from 2022 onwards.

“Our recent Best Value audit by the Accounts Commission found that we’re managing our finances well but recommended that we set out longer-term financial plans and that we pull together our ambitious strategies into a single plan. Both the Business Plan and the five-year budget framework we’re proposing respond directly to this recommendation and, taken together, they will help us reprioritise and, where required, redesign services to address budget gaps and progress our core priorities over the coming years.”

Vice convener Councillor Joan Griffiths said: “In setting out a balanced budget position for 2021/22, I am particularly pleased to note that, through careful financial management, we’re able to sustain vital frontline services; the services our communities have so depended upon during the incredibly difficult and challenging situation we’ve all faced since the pandemic began. 

“We remain fully committed to our established priorities of tackling poverty and inequality, boosting sustainability and promoting wellbeing – all of which were set based on direct public feedback on what is most important to the people of Edinburgh.

“There’s no doubt some very challenging times lie ahead but we’re determined to maintain our focus on investing in attractive, safe and sustainable places to live, building thousands more affordable homes and high-quality modern schools and early years settings to give our children the best possible start in life. The residents of Edinburgh deserve nothing less.”

The Business Plan sets out three core priorities for the city:

  • ending poverty and preventing adverse outcomes such as homelessness and unemployment;
  • becoming a net-zero city; and
  • ensuring wellbeing and equalities are enhanced for all.
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