Just weeks into crisis, council’s ‘ludicrous’ £60m loss claim

Highland Council is already claiming the coronavirus crisis will cause it to lose a gargantuan amount of money.

Coronavirus crisis

by Colin Campbell                                                                                                                         Friday, May 1

SIX weeks into the coronavirus crisis Highland Council has announced it expects to lose £60million as a result. Local authority leaders – never slow to remind people of their perpetually desperate financial plight – say they were planning for a £20million budget shortfall this year but that has now quadrupled to £80million.

Should this claim be taken at face value? Or is it council doom-mongering of the most alarmist and hyped-up kind?

Senior councillor Andrew Jarvie has already broken ranks and described it as ludicrous. How many of his colleagues will follow his lead?

Mr Jarvie said of the £60million loss calculation: “It is ludicrous and impossible. I don’t know how this number has been arrived at. All we were shown were half-a-dozen bullet points, only two of which were actual numbers.”

And even the bullet points, meant to convey the gravity of the situation, seemed as blunt as a popcork at a showground shooting gallery.

Budget leader Alistair Mackinnon said losses include: a 63 per cent drop in planning income; a 52 per cent drop in planning applications; a 50 per cent drop in building standards applications; car park income falling from £77,000 to £525; an expected loss of £5million in council tax; and losses from licensing fees, and income from events, festivals and advertising.

Is that it? Is that the worst of the financial problems hitting the council because of the virus? And how does that add up to £60million, or even a fraction of it?

Take the loss of income from planning and building applications.

The cost of a planning application to build a house, according to the council’s website, is £401. For larger developments it’s proportionately more, but still no more than a few thousand pounds. How does the loss of that kind of money stack up to much more than a splinter of £60million?

Car park income has fallen by £76,000: the same question applies.

As for the loss of income from licensing fees and festivals, since when did Highland Council become so hugely dependent on that?

And what about the claim that they “expect” to lose no less than £5milion of council tax income? Are you still paying your council tax – I know I am – along I’ve no doubt with the overwhelming majority of people. The fallout in job losses from the virus may lead to some possible exemptions but at the moment that’s complete guesswork. So how has the £5million loss “expectation” been arrived at?

And what about the savings. Schools and council offices are closed, meaning no heating, running or maintenance costs. Street cleaning costs must have fallen, as there’s hardly anyone on them. Facilities like recycling centres have been closed. And if there are fewer planning and building applications to process, staff will have been usefully diverted to other work – or at least they should have been.

Andrew Jarvie…dismissed £60million loss claim.

Andrew Jarvie said: “There are huge savings in energy from 200 schools being closed, and in not paying out mileage to anyone because everyone is working from home, and there are millions in savings from capital projects that will not go ahead this year, and money that won’t be borrowed.”

So has all that been taken into account – and does the council still claim, just a few weeks since all this started, that it will cost it a staggering £60million?

The council will face difficulties as a result of the virus like every other business and organisation, large or small.

But to leap forward already with a forecast of gargantuan losses seems gloom and doom-mongering at its alarmist worst.

And it’s not as if Highland Council doesn’t have form with this kind of thing. They’re keen to remind the public about the supposedly dreadful financial plight they’re in just about every other week, but there’s no shortage of very high-earners in the upper echelons, and they always seem to have money available for projects they really, really want – a vast sum to build the notorious riverside Gathering Place is just one that comes readily to mind.

The public will look to councillors like Andrew Jarvie to examine these claims in detail and present the basic reality as things move on. Because based on what we’ve heard so far that conveniently neat and rounded “£60million loss” figure looks highly dubious – if it hasn’t entirely been plucked out of thin air.

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