Falkirk council facing 'unprecedented financial challenge' auditors warn
dailyrecord.co.ukAuditors have warned that Falkirk Council is facing an "unprecedented financial challenge" that mean it is "inconceivable that service reductions will be avoided".
The council is facing a budget gap of £69 million over the next four years and in its annual audit report, auditors Ernst & Young flagged the council's financial sustainability as "red" due to the risk of not managing to close that gap.
The auditors told members that was partly because in the past members of Falkirk Council have not "made difficult choices", but have instead often used the council's reserves to keep services running. Read more: Falkirk Council warned that whistleblowing allegations are putting reputation at risk On top of that known budget gap, however, are external factors including rising inflation and the cost of borrowing that are creating risk and uncertainty.The auditors look at four key areas: financial management, financial sustainability, governance and transparency and value for money.The report stated that the council "continues to demonstrate good financial management arrangements and control of the in-year budget".It also warned that while the Council has taken important steps towards the development of a realistic and affordable capital programme, "key priorities may be unaffordable in the short to medium term".The warning was even more stark for financial sustainability, with the report stating that it is "inconceivable that service reductions will be avoided as the Council responds to the financial challenge ahead".Chief executive Kenneth Lawrie told members of Falkirk Council that the red rating was "disappointing but inevitable" given that the council faces a budget gap of more than £69 million over the next four years.He
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