How Would You Close the Budget Gap?
Thank you for opening our budget consultation tool.
In phase one of our consultation, we asked you for your views on our priorities and actions outlined in our Council Plan. Thank you to those of you who took part and you can find the responses on this link: Phase one consultation responses. These will inform our Council plan review and help us to better explain what our role is and how climate change is affected by the decisions we make.
This is phase two of our budget consultation, and we are now asking for your views on different ways to close our budget gap which this year is projected to be £9.5 million.
Let’s get started!
This is a really simple task. We have given you the four options and are asking you how, using these options, you would raise £9.5 million. Two of the options are capped because they cannot be raised beyond a certain limit. You can find out why by clicking on the information button on each option.
You need to reach at least £9.5 million but your final choice of options may take you slightly above that figure (which is fine, we can underspend).
We have a legal obligation to balance our budget every year – we cannot plan to overspend. So, we are asking you to help us decide how we close our budget gap by using a slider tool.
There are four ways to do this:
- Reducing our spend – which mostly means cutting services
- Increasing Council Tax
- Increasing fees and charges
- Using council reserves (our savings)
None of these are easy decisions and so we are asking for you views on how best to find the £9.5 million we need. Your responses will be used to inform final decisions on the council’s 2025/26 budget, which will be set at the end of February 2025.
To help you decide, we have provided a lot of important background information on our finances which you can read more information by following the link below and by watching the videos we created. Some of the numbers have increased since then:
How Do We Decide What We Spend Our Budget On?
More info
Where does the Council’s money come from?
The council’s income comes from several sources (shown in the pie charts below and the animation on the previous page). Gross Income includes all the income we receive including our internal income and other income we receive to pay for specific activities on behalf of other bodies such as the Dept. for Work and Pensions). Net income is what we recieve directly from Scottish Government and from Council Tax.
Where is the money currently spent?
All of our income is spent on delivering services to the public and running the council’s day-to-day operations. The pie chart below shows the main areas of expenditure. We have also shared an animation showing you how we’d spend if the council’s income was just £10.
Why is the Council short of money?
Around 81% of the council’s net income is a grant from the Scottish Government. We are told what our grant will be when the Scottish Budget is finalised by the Scottish Parliament in February/March 2025, but we are usually given an idea around mid-December.
We will, alongside all other councils through COSLA (the organisation that represents all local government in Scotland), be asking Scottish Government for an increase in grant funding to cover the increases in the council’s costs caused by inflation, pay increases and increased service demand. However, as the final decisions on grant funding are made by the Scottish Parliament, we cannot control this source of net income (81% of our income).
Our other main source of income is Council Tax. In financial year 2024/25, we expect to collect £63.5 million in Council Tax. Increasing this tax is one of the options available for managing funding shortfalls.
In the 12 years since financial year 2013/14 to the present day, we have managed to cut our budget and save £97 million, nearly a third of our income (29.3%). Most of those savings have come from cutting costs, employing fewer people and being more efficient, rather than through cutting services. However, those cuts have all been made and we will now have to reduce and maybe stop some services.
We are unable to cut back in some of our largest spending services because of Scottish Government policy or because that money is directed to specific services, like teaching and social care.
As a council, we are legally required to deliver most of the services we provide, with detailed regulations setting out what must be delivered, and by whom, with regular external inspections to make sure we are delivering those services well. A few other services, such as economic development, meet our local priorities but are not legally required.
That means only around 36% (£125 million) of the council’s costs can be reduced.
Like families, the cost of providing our services usually increases from one year to the next due to inflation. However, we have also seen the demand for some services go up which then means we need more staff and supplies to meet that need. Any nationally agreed pay increases also add to the council’s local costs each year.
We make estimates for likely cost increases for all of our services and activities each year as this lets us calculate how much our expenditure is likely to be for the next year. We then compare this figure to the income we expect to receive to meet those costs.
What is our budget gap for financial year 2025/26?
As we have already said, we have a legal requirement to set a balanced budget each year (our expected income must be more than what we expect to spend). Our current best estimate for financial year 2025/26 is that our costs will be more than our income by £9.5 million (3.2%). This means that we have to either cut expenditure and/or increase income so that we can balance our budget.
What are we asking you to do?
Deciding where to cut expenditure and increase income is difficult and most options will directly affect you as Angus citizens. This is why we are asking you to share your views on those options.
The Options
The options which are available to the Council to make up this budget gap of £9.5 million are to:
1. Reduce Expenditure (what we spend on services)
2. Increase Council Tax
3. Increase Fees & Charges for Council Services
4. Use Council Reserves (money we’ve saved for emergencies)
We would now like to hear the views of Angus citizens on what that balance should be. Using the options in the consultation, please find a way to close our estimated budget shortfall £9.5 million for next financial year and return a balanced budget. You need to reach at least £9.5 million but your final choice of options may take you slightly above that figure (which is fine, we can underspend).