MORAY COUNCIL IS one of three local authorities in Scotland that have been identified by the Accounts Commission as being in danger of using up all its reserves – and going bankrupt.
Audit Scotland released a report on council finance that indicates local government funds are under more pressure than they have ever been – with their debts increasing as their income and reserves are depleted.
The report highlights that in the last financial year, 20 of Scotland’s councils drew on £79million from their cash reserves to keep services intact – only 10 had resorted to such action a year earlier.
The Auditor’s report said: “Councils tell us that they are finding the situation more serious than ever, with savings becoming increasingly difficult to identify and achieve. Councils are showing signs of increasing financial stress. Some risk running out of General Fund reserves within two to three years if they continue to use them at levels planned for 2017/18.”
In a financial overview of the position faced by Councils, there has been a 7.6% reduction in real terms from the Scottish Government since 2010/11 with local authorities now facing debt of £14.5billion and spend of around just 10% of their budget servicing that.
Moray’s Council Leader, George Alexander, repeated his own warning that the region would be bankrupt inside two years if they were not provided with greater financial assistance from the Scottish Government.
Councillor Alexander today told the BBC that he was “simply telling the truth” about the dire situation that Moray finds itself in.
Alluding to a situation where the Council would fail to produce a balanced budget and their responsibilities had to be taken over by the Scottish Government, the Council Leader said: “I do not think it has ever happened before – and we will do our utmost to avoid that.”
He insisted, however, that his comments were not scaremongering.