Glasgow facing £110m budget gap over this year and next, watchdog warns

Scotland’s largest local authority is facing a possible budget gap of almost £110m for this year and next, a report has revealed.

Local government watchdogs said Glasgow City Council had recorded a net overspend of £45.7m in 2024-25, with the Accounts Commission adding this was “the highest overspend incurred by the council in the last six years”.

Looking ahead, its report said the authority “currently does not have established longer term financial planning arrangements”, adding that projections show it could be facing a combined net budget gap of £109.7m for 2026-27 and 2027-28.

Accounts Commission deputy chairman Andrew Burns said: “The council is at a challenging point – decisions made over the coming months will have a significant bearing on financial sustainability and on the services that communities receive in future.

“There is no doubt about the scale and complexity of the challenges that Glasgow City Council faces, particularly equal pay and homelessness.”

The Accounts Commission report said the council “faces a number of significant financial challenges in the coming years”.

On homelessness, spending increased from £38m in 2025-26 to an expected £56m in 2026-27.

Delivering the new pay and grading structure for workers by April 2027 is seen as “critical”.

However the report added the authority’s cash reserves “continue to decline” and are “below the target set” by the council.

The report went on to warn Glasgow “continues to face significant risks in the medium and longer term, including its ability to generate new sources of income at the pace required within the budget”.

It said the authority faces the financial implications of “both the implementation of the new pay and grading scheme, including backdated pay, projected rates of homelessness within the city and the wider external funding uncertainty”.

The Accounts Commission concluded: “There is a need for a robust longer-term financial strategy to demonstrate how council priorities will be achieved across a range of scenarios.”

Mr Burns said “leadership, responsibility and robust oversight” is needed from councillors.

He added: “The council must also prioritise its medium-term financial planning, setting out the choices the council needs to make to live within its means.

“There must be clear plans to redesign services, the resources needed, costs and savings and the impact on communities and budgets.

“These are vital to ensure the council and its services are sustainable for the future.”

Scottish Labour local government spokesman Joe Fagan said the report “paints a stark picture about the huge challenges faced by Glasgow”.

He added: “The budget gap of £110m is significant and will likely require very difficult decisions to be made, which will impact on people living right across the city.

“The reality is that Glasgow, just like many other councils, is struggling with the impact of years of SNP incompetence and underfunding by the Scottish Government.

“SNP ministers must urgently wake up to the financial situation they are in and ensure that resources are available to enable local authorities to continue to provide the important services the public rely on.”

Scottish Conservative local government spokesman Alexander Burnett claimed the SNP had “run Glasgow into the ground”.

The Tory added: “This report must be an urgent wake-up call. They need to stop the excuses and fully fund the services local people rely on.

“This is a stark warning that Glasgow’s finances and frontline services have been pushed to breaking point by years of SNP failure.

“Now Glasgow faces a staggering blackhole of £110m in their finances, meaning local people will be left facing swingeing cuts and higher council tax bills because of the SNP’s mismanagement.”