Reducing staff helps council to make savings

Berwickshire High School, Duns
Berwickshire High School, Duns

Scottish Borders Council made efficiency savings of £7.85m last year and increased its reserves by more than £4m, but repayments for three new schools remain a financial drain.

The private finance initiative that delivered new high schools at Earlston, Duns and Eyemouth in 2010 accounted for payments of £8.5m over the year.

Over the next 25 years, the repayments will total £245m, a figure including interest of more than £37m.

The annual unaudited accounts of the local authority, published last week, reveal that 85% of its savings were achieved within the agreed capital and revenue budgets for the 12 months ending March 31 and would be permanently recurring.

They were boosted by a revenue underspend of £1.24m and a capital underspend of £800,000 on budgets of £260.2m and £45m respectively. Over the year, the council also managed to increase its general fund reserve by £4.2m to £23.2m.

Reducing staff numbers remains a key part of the council’s drive to achieve savings over the next two financial years.

A total of 71 employees were allowed to leave their jobs via early retirement and voluntary severance deals in 2015-16, compared to 40 the previous year.

The cost of those packages came to £2.2m – up from £626,000 the year before.

“The operating environment for the council continues to be very challenging with financial and economic influences such as increasing demands on services, reduced Scottish Government funding, low interest rates and cost pressures from pay and price inflation all affecting the council’s finances,” said council chief financial officer David Robertson.

“Despite these challenges, the council remains financially sound and well placed to serve the people of the Scottish Borders into the future.”

The accounts reveal that the council’s external debt stands at £175m, with no additional loans added over the year. The average rate of interest was 6.5%, resulting in total interest payments on loans topping £12.2m – up from the preceding year’s £11.8m.