Inverclyde Council 'can't afford' to maintain assets

The council’s chief financial officer Alan Puckrin has warned members of the policy and resources committee that the level of Scottish Government grant it was expecting to receive was ‘significantly short’ of what was needed to maintain the council’s key resources.

Mr Puckrin’s remarks were echoed by council leader Stephen McCabe, who told his fellow elected members that they were facings challenges in ensuring that assets such as the council’s school, leisure and general property estate were maintained to a high standard.

READ MORE: Inverclyde Council launches 2024-26 budget consultation

The discussion was sparked by councillor Tommy McVey, who highlighted the council’s historic use of reserves and borrowing to maintain its capital programme, which funds key projects throughout the area.

He stated that using funds in this manner was ‘unsustainable’ and asked Mr Puckrin what steps the council would have to take if it faced further financial hardships in the future.

In response, the senior finance official said: “As things stand, the level of government grant that we’re getting and that is projected to continue for the next number of the years by the Scottish Fiscal Commission is going to be significantly short of what we need to maintain our core asset base."

He added: “Elected members have decided to prudentially borrow £1.5m a year from now for the rest of the decade to partly plug that gap but that is still going to leave a gap of over £2m a year, and that assumes that there’s no inflationary uplift to the amounts allocated for property, for schools, for roads, for IT-related adaptations and for the maintenance of our parks.

“So, what happens is every year there is a real terms cut, we’ve got less money going in.

“Clearly that is unsustainable unless elected members choose to put more money into the capital programme which they are perfectly entitled to do, provided the medium-term revenue budget and the medium to long term capital budget can be demonstrated to be sustainable then the auditors won’t have an issue with that.

“The challenge for elected members is demonstrating it is sustainable and for that reserves is not the answer.”

Mr Puckrin told members that the municipal body does not have any unallocated cash left in reserve and that earmarked funds would have to be re-allocated if the local authority wished to fall back on this money in future.

This could mean that key projects from the council’s capital programme may have to be scrapped or reduced in scale.

The council officer’s comments came after a report presented to the committee noted ‘increasing maintenance demands’ on the local authority’s estates, as well as further financial pressures caused by increased contract costs.

His sobering comments were followed by an equally frank admission from councillor McCabe, who said: “I think it’s right to make the point that as it stands at this point in time, we can’t afford to maintain our current asset base.

“That’s not unique in the life of local government, even in my lifetime. Back in the days before reorganisation the regional council in particular struggled to maintain its schools.

“That’s why after reorganisation we ended up inheriting a school estate which was maybe in poor condition and we know that through a programme of rationalisation and reinvestment and attracting funding from the government through a PPP and prudential borrowing we were able to modernise our school estate.

“The challenge we’re facing going forward is being able to maintain that school estate to a high standard, and our leisure estate and our general property estate.

“I think you [Councillor McVey] are right to highlight those challenges.

“In the coming budget we’ll make some difficult decisions and then following on from that we’ll continue to make difficult decisions on an ongoing basis."