Updated revenue forecast reported to Members

Whilst there still remains a great deal of uncertainty, current projections for the year end outturn position suggest a net budget overspend of £8.7m, an improvement from the £11.3m forecast overspend reported to Council in October. This position takes into account expected sources of additional government funding.

Officers will continue to mitigate the level of forecast overspend in the remainder of the year wherever possible, by reducing and non-essential spend and continuing to hold many vacancies.

A number of options to deal with a year end overspend include the use of reserves, the use of contingencies, or the use of fiscal flexibilities including borrowing.

Budget Leader Alister Mackinnon said: “It is still early in the financial year and there is a significant risk that unforeseen events occur which would result in additional cost pressures. A severe winter, storm events, and demand-led services, such as looked after children could have significant impacts. Other risks relating to the EU Exit remain uncertain, but we anticipate additional increased costs for supplies and a further loss of income in relation to harbour dues. The impact of further Covid-related issues and future waves could also be significant.

He added: “A greater focus will now shift to planning for the 2021/22 budget, and ensuring not just recovery, but longer term sustainability in future years.”