City Guide to Edinburgh, Scotland

City Guide to Edinburgh, Scotland

Credit Crunch Hits Edinburgh City Council Finances


By edg - Posted on 30 October 2008

Alexander and Bucephalus

The economic downturn will hit Edinburgh City Council coffers hard next year. An autumn budget statement, the first to be published by the Council, highlights increased costs and lower income.

Until recently, around £43m had been expected this year from the sale of land and properties to pay for new capital projects. However, current estimates are that there will be a shortfall of £20m. Meanwhile, increases in the price of fuel and energy could cost the Council around an extra £10m next year. The budget statement concludes that the combined effect of inflation and the downturn in the economy, along with the increase in demand for care services and affordable housing, means the Council is facing a very difficult financial position.

Residents, businesses and charities are to be consulted on the City
of Edinburgh Council's plans for next year in the face of growing
financial pressures.

In September, Councillors on the Finance committee agreed that there should be a high-level strategy for Council funding, including a ten-year programme for capital investment.

However, the Finance Convenor, Councillor Gordon Mackenzie, said recent events meant the situation had to be reassessed continuously: "Our intention is to plan for the long-term but we must also focus on the problems of today, especially with the current uncertainty over economic conditions. Of course, we will continue the drive for efficiency savings, but we will also have to look again at what are the really important services we provide. So, we do want to hear from people throughout Edinburgh about where we should concentrate our efforts and resources."

Online questionnaire

Questionnaires for the business community, voluntary sector and general public will be online in November, and Neighbourhood Partnerships will also be involved in the discussions about priorities for next year. The budget setting process is carried on throughout the year, but the consultation feedback and other detailed information will be considered from December, with the Council due to meet in February to agree its financial plan for 2009 - 2010.

Councillor Mackenzie added: "This city, like every other community, will feel the effects of the credit crunch and rising prices. It will impact on our plans, but what we have to do is ensure that we continue to deliver as much for the people of Edinburgh as we can, and to keep ourselves well placed for when the recovery comes. Every budget process is difficult and this one is likely to involve particularly tough choices."

The autumn budget statement will be considered by councillors at the Policy and Strategy committee meeting on 4 November.