Page last updated at 13:08 GMT, Thursday, 8 January 2009

Council facing 'bigger shortfall'

Glasgow council tax form
George Black said savings were needed to avoid "dire" consequences

Scotland's largest council is facing a bigger financial shortfall than previously forecast, it has emerged.

Glasgow City Council's chief executive said the authority would likely have to save over 40m next year rather than the 25m previously thought.

George Black said action was needed to avoid the council's reserves being "completely wiped out".

He described the current financial downturn as "like nothing we have ever experienced before".

But the Scottish Government denied that it was imposing cutbacks on councils.

Writing in Insider, the council's in-house magazine, Mr Black said it was vital that he was clear with staff about how bad the current situation was, and how much worse it could get.

If we do not all do what we can to deliver those savings then the effect on the council, and on the services we provide to the people of Glasgow, will be dire
George Black
Glasgow City Council chief executive

"Our income is falling and will continue to fall in the coming years and every single member of staff must take what responsibility they can for ensuring that we spend less," he said.

"For example, fees from planning are down by 1m per month and until the world economy improves we will need to spend less to cover this sort of shortfall.

"Many members of staff have given long service to the council and it may be tempting to think that we've had financial difficulties before and that things always pick up in the end.

"The circumstances we face just now are like nothing we have ever experienced before. We are a very long way away from things picking up and I expect them to become substantially more difficult before they do." Mr Black said that last May, officers had forecast the need for 50m savings over the next two years.

As the economic climate worsened, that was revised upwards to 53m in November.

But he said the savings needed in 2010/2011 were likely to be "well over 40m".

The chief executive said this was down to a continuing fall in income and Glasgow's likely share of 500m savings which the Scottish Government had earmarked for councils in 2010/2011.

A government spokesman said that it operated on a fixed budget and despite what it believed was the worst settlement for Scotland since devolution, it was providing local government with record levels of funding.

He added: "Through the concordat, we have reduced ring-fencing with a corresponding reduction in bureaucracy and we have, for the first time, allowed councils to keep their own efficiency savings to re-invest in front-line services.

"In contrast, it is the UK Government's decision which could see around 500m wiped from the Scottish Government's 2010/11 overall budget - just as our economy will be crying out for investment."

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