North Ayrshire Council not in danger of bankruptcy

Craig Hatton says a “suitable financial model” is in place to overcome a £16 million budget gap, and insists he’s confident there’s no danger of NAC following a number of local authorities in England into bankruptcy.

Speaking at a media briefing prior to NAC’s annual budget and council tax meeting on February 28, Mr Hatton said the council is not immune to the same “difficult financial landscape” facing families and businesses across Ayrshire and beyond.

The £16m in savings required this year, he said, made the 2024-25 budget one of the most challenging in recent times – following more than £120m in cuts made over the past 13 years.

Despite that, the council insists its spending plans for the next 12 months will aim to “continue to support residents through their ongoing financial challenges”, while protecting jobs and services as much as possible.

Asked whether there was any danger of NAC following the road of local authorities in England, such as Birmingham, Croydon, Northamptonshire and most recently Nottingham, into effectively declaring bankruptcy, Mr Hatton said: "We have a strong medium term financial plan.

"We have got a £16m gap for next year, and the proposals which go before council on Wednesday will seek to close that gap.

"We are far from Nottingham or other councils which have had to issue a section 114 notice [declaring that a council has incurred, or is about to incur, unlawful expenditure that is greater than its income] in England.

“The same doesn't exist in Scotland, but we are confident that we can keep delivering balanced budgets.

Finance chief Mark Boyd (Image: NAC)

“It will mean tougher and tougher decisions for the elected members, and clearly communities will see the impact of that on services removed going forward. But we are not in the same position as these councils which have been affected down south."

The public-private partnership loan for secondary schools being built in North Ayrshire was extended last year, and finance boss Mark Boyd said: "A year ago we approved that funding to address and alleviate challenges over the medium term. The plan we set out a year ago is what we are now enacting over this budget term.

"The paper approved last year was a total of £16m to support the budget programme over the medium term. £5m is being used over 2024/25, and then £4m and then three and a half, on a descending pattern so we can run in parallel with that and reduce our recurring cost base, in what is a very challenging financial landscape."

Asked about financial sanctions being placed on local authorities if they don't maintain teaching numbers, Mr Hatton said: "We continue to have dialogue with government about teaching numbers.

"Over the last five years we have seen a fall in the pupil roll of 1,000. The demographic in North Ayrshire is that we have more older people and fewer younger people, so obviously we wouldn't need as many teachers.

"That is the crux of our ongoing talks with Scottish Government. Hopefully we have a resolution for that some time soon.

"Our budget proposals are for reducing teaching numbers through voluntary redundancies and natural turnover."

Officials have recommended that council tax should be frozen at 2023/24 levels, with enough funding provided by the Scottish Government to pay for the equivalent of a 5 per cent increase.

However, the power to set council tax rates rests with elected councillors, and a final decision won't be made until the budget meeting on Wednesday.

At that meeting, councillors will be asked to consider a range of options, including a potential five per cent increase in fees and charges for the public to use NAC's services, not including school meals.

Officials have also suggested bringing in a £50 annual charge for the collection of garden waste, similar to schemes already in operation at other local authorities such as Glasgow, and removing school crossing patrols at locations where there is already a pedestrian crossing.