Fife Council sounds financial warning bells despite savings

Fife Council has sounded financial warning bells for the coming years despite a current total underspend of approximately £72m.

The local authority has spent less money than anticipated for the current budget, Eileen Rowland, executive director of finance and corporate services, told the cabinet committee on Thursday.

A large portion of the underspend is from general fund services. Additional items are underspent by approximately £46.7m.

The good news is that Fife Council now has £17m of balances that can be made available “for one off investment in the future.”

However, finance officers and councillors both expressed concern about future financial pressures.

“We have to be careful,” Ms Rowland said. “We know we’re going to see financial challenges in the future. We’ve obviously balanced the position for 2023-24, but 2024-25 very much depends on what happens going forward.”

The revenue monitoring report stated that the level of service underspend will not continue in future years because future service budgets have been reduced by approximately £22m.

Councillor David Ross, leader of the administration, said: “On the surface, it looks like we are in a good financial position and compared to a lot of other councils we are.

“However, I would highlight that some underspend is from vacant positions we can’t fill and probably the non-delivery of services to the level that we want. That all ties in with the high staff absent rates we’ll discuss later.”

In addition to future budget pressures, the report also claims that the council has collected £1.775m less council tax than it planned for this year.