The council’s significant health and social care overspends are deemed unsustainable, necessitating £46 million in savings by 2027/28.

The council will have to significantly change how it delivers services to make the savings needed. Added to this, the council’s money set aside for contingencies dipped below its rolling three-year target. This will need to be monitored.

The council has some strong foundations for the future. This includes strong engagement with local communities. It is also implementing some innovative solutions to address its workforce challenges and is developing three-year plans across all services to deliver change. Now the council should review its Medium-Term Financial Strategy to take into account the impact of these plans and provide transparency in how reserves will be used in the future.

Andrew Burns, deputy chair of the Accounts Commission, said: “Fife Council has reached a turning point. Significant change needs to happen now to ensure the sustainability of services and so the council can continue to balance its books. Tough decisions lie ahead.

“The council has excellent engagement with local communities and strong working relationships across councillors of all parties. It must now build on these strengths, working with communities to develop clear plans on how significant savings and changes to the delivery of services can be made.”

Chief executive of Fife Council Ken Gourlay welcomed the Accounts Commission’s report and confirmed that work is well underway to transform services in the region. 

“The findings highlight a number of challenges that are not unique to Fife,” he said. 

“We are operating in difficult financial times – difficult both for public services and the residents we serve. Poverty is entrenched in parts of our society leading to widening inequality gaps, pressure on health and social care services is escalating as our population ages, and there’s an ongoing housing emergency.  

“These are issues across Scotland and tackling them in Fife is at the heart of our plans as a council and with partners. 

“Over the past few years, we’ve been working under the same funding constraints as other councils. However, good financial management, combined with new ways of working and service efficiencies have enabled us to avoid major cuts in services. Through last year’s budget process, councillors agreed to use some of our reserves to invest in projects that were one off in nature. 

“The council approved a revised medium term financial strategy earlier this month and the decisions taken at last week’s budget meeting reduced significantly the challenge in 2027/8 from £46 m to £16m.  There are clear plans to reinstate general fund balances to our 2% target, and this is based on directors taking action in year. Looking forward we’re advancing work to deliver on change programmes that will lead to more efficient ways of working, while improving services at the same time.  

“We have a strong record of delivering change with 2 large scale programmes being delivered in the last 10 years. That said, we recognise that the pace and scale of change must ramp up to meet the challenges ahead. We will continue to develop and implement our transformation plans and I welcome the fact that the Commission recognises the strong foundations we have in place for this work.”