Council 'facing bankruptcy' as tax rises confirmed

The leader of West Dunbartonshire Council has claimed the local authority could face bankruptcy within several years, as a council tax rise of 7.8% was confirmed for the region.

Martin Rooney urged political parties and independent elected members to work together to solve a £9.2m deficit facing the local authority.

Rooney said the only options available for the council to raise money were increasing council tax, increasing sales fees and taxes, using reserves, management adjustment and savings.

South Ayrshire Council have also confirmed a council tax rise in the area, with an 8% increase accepted, while Inverclyde residents will see a 7.9% rise. East Dunbartonshire Council meets later.

In West Dunbartonshire, the Labour budget was approved over the SNP option, which had called for a 10.4% rise in council tax.

The approved budget will implement more than £1.4m in savings options and further management adjustments of £705,000 on top of the council tax rise.

Rooney said working together was the only way to stop the council going bankrupt.

"It will go bankrupt in the next administration and I am talking about 2027 to 2032," he said.

"That administration will not survive in the way that we do politics in West Dunbartonshire – throwing bricks at each other and trying to outdo each other or whatever it might be.

"People talk about cross-party working, maybe they want to start engaging with it rather than just saying it.

He added that discussion of the financial difficulties could result in better solutions being found but that "lots of councils have ways to raise money that we just don't have."

In South Ayrshire, councillors approved the 8% council tax increase in an attempt to cut into a £8.463m funding gap for 2026–27.

Three different proposals were debated, from the SNP, Labour and the Conservative minority administration.

The latter was the one ultimately approved, which the local authority estimates will generate about £5.96m.

Under the plan, councillors agreed £2.728m in savings alongside £1.59m in additional funding for the Health and Social Care Partnership (HSCP) and a £1.365m use of uncommitted reserves to bridge the gap.

Some of the cuts include £462,000 through lowering the registered capacity of early years centres, £368,000 in reductions to education absence cover budgets, and a further £267,000 in savings through ICT and corporate service redesign.

There will also be cuts to spending in cleaning the streets and business support programmes.

Smaller savings measures include removing funding for antisocial behaviour mediation (£10,000) and reducing community and problem-solving budgets.

Council leader Brian Connolly said the approved budget avoided closures of libraries, community facilities and halls while protecting school crossing patrols and senior golf concessions.

He warned that significant financial pressures remained for future years, with the council's medium-term financial plan still showing a funding gap for 2027–28.

Inverclyde Council will cut 26 jobs as part of its budget plans, with a 7.9% council tax rise to be implemented.

Fees and charges will also increase by 7.5% in 26/27 and 27/28 but local facilities such as Port Glasgow library, Port Glasgow swimming pool, and Greenock central library will remain open.

The 26 jobs will be lost across a variety of council services through non-replacement of vacant posts, early release, and service redesigns.

Council leader Stephen McCabe said he knew the moves would impact family finances but there was "no fat left to cut" from other services.

The leader of West Dunbartonshire Council used powerful terminology to describe the pressure its finances are under.

But could a Scottish council actually go bankrupt?

The straightforward answer is simple - it cannot. Scottish councils have a statutory duty to produce a balanced budget every year.

The problem would occur if they failed to meet this obligation. What would happen if councillors couldn't agree a budget? What if the necessary tax rises, increases in charges or cuts were too unpalatable?

This has never actually happened before, though Moray Council warned of such a risk several years ago.

If a council didn't produce a balanced budget, the likelihood is that civil servants would be sent in to make unpalatable choices, balance the books and keep essential services going.

This year's council tax rises across Scotland have varied from 4% to 10% - all above the current rate of inflation. The council tax makes up less than a fifth of each council's overall budget.

In general, councils went for these larger rises to minimise the need for the kind of new cuts which would be obvious or lead to major local controversies.

But while councils have produced balance budgets, there are still important questions over the underlying financial health of councils. The biggest council union Unison argues that many authorities are struggling to deliver on their basic statutory commitments.

There are still cuts and savings to contemplate. Each year, council officers forecast the budget gap - the difference between rising costs and rising income. This can be bridged through, for example, rises in council tax or charges and cuts. None of these are easy options. Some councils may be helped by extra financial powers such as the right to charge a visitor levy - others may not see the benefit.

Significant underlying changes to the way services are delivered, which may save money in the longer-term, usually mean spending more money to begin with.