The council also committed to building a new school in Tillydrone whilst revising its capital programme to ensure all spending is sustainable.

Phase 1 of the TOM shifted the organisation to a new way of working with a focus on organisational restructuring and the adoption of digital technology.

Over the last three years, TOM helped make £125 million in savings while empowering staff to better serve residents.

The next phase will through broader service design further improve demand management and secure the right outcomes for people, especially the city’s most vulnerable.

TOM 1.2 will help address a five-year funding gap of £134m as set out in the Medium-Term Financial Strategy, which was also approved this week.

Aberdeen City Council co-leader Alex Nicoll said: “Today we were left in no doubt about the budget pressures we face, resulting from the war in Ukraine, Covid-19 recovery, and high inflation.

“Our Target Operating Model describes how we might respond to financial pressures while continuing to transform our services for the benefit of staff and residents.”

The council heard from officers that estimated construction costs for several projects were vastly over their original values.

A new primary school at Tillydrone is to be re-tendered and will be built in summer 2023 rather than January 2023.

Co-leader Councillor Ian Yuill added: “We remain committed to investing in our city and are delighted to confirm that the new primary school for Tillydrone will progress.

“At the same time, we must take a prudent and sustainable approach to spending, which is why we must be satisfied our building programme is affordable. When it comes to our capital programme, we need to deliver best value for residents, just as we do when it comes to running operations.”

Contracts for four sites for new council houses at Kincorth, Craighill, Tillydrone, and Kaimhill will also be re-tendered.

A report on the financial performance for the year to 30 June 2022 showed that the recovery from the Covid-19 pandemic was continuing to impact the council’s financial position alongside other global events.