The proposed additional £289 million funding from the Scottish Government to local authorities may provide a small amount of additional revenue and capital funding for 2025/26, although the Scottish Parliament has not agreed the budget yet.

Despite services delivering a range of more than £50m in savings over the last 10 years, the council still faces having to deliver further savings over the next five years to balance the budget.

The budget gap prior to considering any savings options is £14.9m. After accounting for previously agreed savings, possible future savings, increases to fees and charges, and an indicative Council Tax increase of 5%, the gap reduces to £6.4m in 2025-26 and £27m over the next five years.

The council is currently working through what the settlement could mean, and will continue to refine budget assumptions. The additional Scottish Government funding will still not close the budget gap leading to difficult decisions for the council.

A four-week budget survey launched this week aims to gather public views on what services matter most.

The majority of funding (80%) for council services comes from Government grants with 20% coming from council tax.

Councillor Jim Lynch, leader of Argyll and Bute Council, said: “Setting budgets is never easy but this year we are facing our largest funding gap ever. With existing budgets already pushed to their limits, despite significant year-on-year savings, we’re facing choices that are even more difficult.

“This includes looking at the services we have a duty to deliver and those we don’t. Really, this is a matter of making the most of what we have, rather than delivering everything our communities and we would like to do for Argyll and Bute.

“Having exhausted all other avenues, very few options remain. The stark reality is, do we raise income to protect services or stop those that we currently deliver? We’re asking you for your opinion on what your priorities are for the council to deliver. This affects everyone across Argyll and Bute so I would encourage you to have your say.”

Councillor Ross Moreland, policy lead for financial services, added: “We can only make savings from a small proportion, about 26%, of the council’s overall budget. Inflation, utility costs and budget directed for specific purposes by the Scottish Government means that uncontrollable costs, like these take up most of the council’s budget. This makes balancing the budget even more difficult.

“We have long campaigned that to support life locally, and across Scotland as a whole, the Scottish Government needs councils to do the work of delivering services. To do that work, we need Scottish Government funding. Whilst we welcome the additional funding from Scottish Government, this modest increase still means we are facing significant challenges to address budget gaps.

“We have now exhausted nearly all cost-saving options and face the harsh reality of looking at what services we can afford to keep delivering. Nobody wants to make that decision but this is the reality of local government in Scotland, with limited funding available to provide essential services to residents.”

The council will set its budget on 27 February 2025.