Council sets ‘protective’ budget for year ahead

Vital council services in Orkney can only be protected from significant cuts this year by the Council taking more money from its reserves - and by a 10% increase in Council tax.
 
These difficult messages were heard as the Council met this afternoon to set their budget for the year at £101.7m
 
With a significant shortfall between that figure and the Council’s allocation from the Scottish Government, the Council will need to take over £17.4m from its reserves and generate £11.3m in Council tax.
 
As well as increasing demand for services, the Council has also seen its costs rising,  particularly for energy costs which has gone up by 15%.
 
This means Council tax will increase by 10% with Band D properties set at £1,369.21 a year – an increase of £124.48, or just over £10 a month, from last year.
 
Council Leader James Stockan has described the continual draw on reserves as unsustainable. He said “Households and businesses across our community have been facing tough financial choices over the last year as their costs have risen - and they’ve had to look at where they can save money but also whether there’s opportunities for them to increase their income.
 
“Orkney Islands Council is no different.
 
“Whilst we do have our reserves, just like a household or a business, we cannot get backed into a financial corner and put ourselves in the position of paying for our day to day costs from our ‘savings account’.  That ‘savings account’ needs to be used for the bigger things that we need to do like new buildings, or invested for future use.
 
“We know some people might find the 10% hard when other costs are increasing too, but be assured we’re doing it to help to protect those important Council services that you, your family, your friends and your neighbours, need and rely on– the more we collectively raise in council tax, the more we’re working together to protect those services for the good of everyone in Orkney.”
 
In Orkney around 11% of Council income comes from Council tax – in some areas it’s as much as 19%.
 
Orkney residents pay amongst the lowest Council tax rates in Scotland – only Shetland, Western Isles, South Lanarkshire and Angus currently pay less.
 
A further amendment was put forward at the Council meeting by Councillor Kristopher Leask and Councillor Rachel King, that a report come forward setting out a strategy for Council tax in Orkney to be brought in line with national average  - and agreed by all Councillors present.  
 
Today’s report also set a serious tone for the future, with a stark warning that although budgets, in cash terms, are being protected for 2023/24 significant savings will be required in the future.
 
Oliver Reid is the Council’s Chief Executive.  He said “Just like householders across our community have been doing, we’re needing to make some changes, as we try to balance the books .
 
“During the next year officers will be bringing reports forward that look at how we can generate income for the Council, how we can change the way we run services to do it more efficiently or as a last resort where we might need to make cuts.
 
“One key decision Councillors will be making in this financial year for example is whether we should go ahead with Orkney’s Community Wind Farm Project, which the Scottish Government gave us planning permission for last year.  It could generate an additional £6m a year in income for us, as well as providing a community benefit scheme for communities to carry out projects of their own.”
 
The full committee report and a recording of the meeting are available at https://www.orkney.gov.uk/council-meetings.htm?postid=7001&postdiaryentryid=15352