Council Tax looks set to rise by 3% in Orkney with £7 million proposal from reserves also supporting services

Councillors have recommended Orkney Islands Council’s budget for the next financial year.

The policy and resources committee today agreed that £82 million should be spent on running council services in in 2017-18.

Members recommended that savings of £842,000 should be found during the year ahead.

This follows a reduction of £1.1 million in the funding the council will receive from the Scottish Government to run services in 2017-18.

Councillors also recommended:

• That Council Tax charges should rise by 3%, which would increase the Band D annual charge from £1,037 to £1068.

• That funding support for the voluntary sector increase by 1% for the seventh year running.

• That existing fees and charges for council services should increase by at least 3% from April 1. Exceptions would include Orkney Ferries fares, charges for planning applications and building warrants, licensing fees, car parking, trade waste collections, and social care charges that are set by legislation

The measures recommended by the committee would result in a reduction of the council’s workforce by the equivalent of 8.3 full time equivalent posts (FTE). Of these, 2.5 FTE posts are currently vacant.

For the remaining posts, the intention would be to avoid compulsory redundancies if at all possible and look instead at alternatives such as redeployment, voluntary redundancy and retirement.

The committee’s recommendations go to a meeting of the Full Council on February 22.

Council Convener Steven Heddle said: “The council’s funding from the Scottish Government is again being reduced for the year ahead, not by as much as first announced in December, but still by a significant amount.

“This reduction, combined with an ever-growing demand for some of the services we provide, has again meant a challenging budget setting process for our elected members and for the officers involved.

“This process has been underway over many months and a great deal of thought and effort has been devoted to finding ways to minimise the impact on our community, our staff and the organisation itself.

“This has led to savings considered as high risk being rejected at this time and additional savings considered as low and medium risk totalling more than £300,000 also being removed.

“Reflecting the value we place upon our partners we have recommended an increase in funding to the voluntary sector despite cuts to our own budgets.”

The committee recommended today that a contribution of £7 million should come from the Strategic Reserve Fund to support services during the year ahead.

Councillor Heddle added: “Feedback to the Budget Simulator exercise last October included a willingness among the public for increased fees and charges, an increase to the Council Tax, and a larger-than-usual draw on OIC’s reserves, to help protect education, social care and other key services.

“The contribution from our reserves we are recommending for 2017-18 is over £3 million more than the amount taken a year ago to support the running of services.

“This increased contribution has to be seen as a short-term measure. It will enable us to cushion the immediate impact on council services as we prepare for an anticipated gap of around £12 million in our funding over the next five years.

“It is vital that we keep in mind the importance of the reserves to the council and the people we serve. They enable us to invest in projects like new care homes that are of great importance to Orkney – as well as smaller initiatives that help maintain vibrant communities across the county.

“This is why, in challenging financial circumstances, it is important that we take a judicious approach and keep our reserves at a sustainable level over the years ahead.”

After a nine year freeze, the Scottish Government has given local authorities the option to raise the Council Tax by up to 3% for 2017-18.

The committee’s recommendation that Council Tax bills in Orkney should increase by 3% from April 1 would bring in an additional £242,000 in revenue for OIC.

New Scottish Government legislation will result in additional Council Tax charges for higher-value properties. In Orkney, these increased charges for properties in valuation bands E to H would result in a further £174,000 in revenue for the council.