Western Isles Council facing budget gap of £4.1m

Western Isles Council has warned it is facing a £4.1m budget gap in the coming financial year.

Comhairle nan Eilean Siar has said it is “once again in a challenging financial position” following the Scottish Government’s budget announcement last week.

Following a meeting of the local authority’s budget board on Tuesday, the council said options to tackle the black hole include using limited reserves, increasing council tax, increasing charges, and/or reducing service budgets.

“The funding that has been awarded to Comhairle nan Eilean Siar is again simply not enough to deliver our services to the public at their current level,” council leader Paul Steele said.

“Comhairle nan Eilean Siar and all local authorities need open and frank discussions with Government to establish real solutions for local government funding and to halt this current trend.”

The Independent councillor added: “The Comhairle cannot continue to cut services back year on year, and the people of the Western Isles cannot continue to be asked to pay more and receive less.”

The warning comes a week after the SNP Government at Holyrood set out its tax and spending plans for the next year.

The Budget includes changes to income tax, increases for Scottish child payments, and separate taxes on mansions and private jets.

The Government also announced that funding for local government will increase by 2% in real terms under their proposals.

After analysing the 2026/27 Local Government Settlement, Comhairle nan Eilean Siar has said it is facing an estimated £5.4m funding shortfall, which it has reduced to £4.1m using investment returns and loan interest.

Despite an increase in the Comhairle’s settlement, it said public sector pay awards, directed spend on Health and Social Care and other Scottish Government priorities have left just £500,000 in uncommitted additional funding.

The Comhairle said this figure is below the rate of inflation and leaves councillors in a “challenging” financial position.

Cllr Steele said the settlement funding “does not reflect the 2% real terms increase or positive settlement that was announced by the Scottish Government in its Budget announcement”.

He added: “It is the view of the Comhairle that progressing Public Sector Reform (PSR) is one of the best routes to break this cycle.

“Alongside work to progress PSR, Scottish Government must take the financial position of the Comhairle seriously and demonstrate through actions, not words, that sustainable funding of Local Government and investing in local services is a real priority.”