Recommendations before the Policy and Resources Committee include retaining Council Tax for the Western Isles at the 2020/21 level of £1,193.49 at Band D, the lowest in Scotland.

The Budget Strategy report highlights a cash increase in the settlement for cores services of £0.8m but a number of uncertainties which may yet impact on the Comhairle’s finances, including future pay awards and costs arising from the COVID pandemic.

The Comhairle has prepared for the 2021/22 Settlement by developing and agreeing, in December 2020, Business Plans which aim to deliver savings of £2.338m in 2021/22 and £1.170m in 2022/23. Implementing these agreed savings is critical to the budget for the next two years.

The business planning, together with the growth in the settlement, the prudent management of budgets throughout 2020/21 and the measured use of balances means that the Comhairle can agree its revenue budget for 2021/22 without recourse to further savings.

Roddie Mackay, leader of the Comhairle, said: “These are very challenging times but our previous work has left us in a better position than we might have been in. There remain significant uncertainties ahead and we will continue to adopt a cautious and prudent management towards the finances of the Comhairle.”

He added: “It is fair to say that when I told you last year that we continued to operate in a period of significant challenge I had not imagined the impact that the pandemic would have on our economy and society.

“However, I have been hugely impressed with the response from the Comhairle and our communities and I want to take this opportunity to pay tribute to all our staff who have worked hard to maintain essential services during this past year. Not just in our care services but also across the islands in vital services ranging from waste collection to procurement and education.

“A tremendous amount of work went into supporting businesses through facilitating a range of Scottish Government funding and including our own Local Business Support Scheme. We also secured additional funding for the islands when we moved into Level 3 after Christmas and I particularly welcome the extension of rates relief for retail, hospitality and leisure sector for next year.

“Our funding increase this year that means, together with the business planning that we agreed in December, that we can set a budget with a small deficit that we can confidently fund from balances.

“This includes my recommendation that we take advantage of the offer of funding from the Scottish Government to freeze Council Tax for the coming year.

“Despite the significant uncertainty COVID has brought our work on the detail through the Budget Board throughout 2020, the prudent use of balances over our time in the council means that we can manage this without detriment to services.

“There remains much uncertainty ahead, pay awards for 2020/21 are not yet agreed, the IJB budget has a gap of around £0.8m, we are faced with a £0.7m overspend on gritting; and we still have ongoing costs from the pandemic which could impact on the speed with which we can deliver our business plans.

“Whilst we are still working with a one-year settlement from the Scottish Government I am optimistic that the planning we have done will stand us in good stead for budget next February.

“To support this I am therefore proposing a cautious approach to the allocation of the additional funds that we will receive from the Scottish Government for COVID for next year. We await the UK budget on 3 March which I hope will set out a longer-term strategy and enable the Scottish Government and ourselves to plan for the next phase of the recovery.

“I have already mentioned the pressures facing the IJB but the Comhairle has a long tradition of supporting Health and Social Care and I am proposing that we increase the Cùram is Slàinte nan Eilean Siar Budget by passing on in full the additional monies in the settlement.

“Whilst in line with our estimates our capital funding for next year is disappointing. However, our innovative approach to funding has enabled us to progress the Lewis Residential Care Development, with the care facility scheduled to open next Spring and we have now submitted the revised case for the £54m Barra and Vatersay Community Campus which aims to commence on site by the end of the year.

“However, we must not lose sight of the need for investment in our core infrastructure, particularly our roads and buildings and I welcome the Scottish Government’s establishment of funding for bridges which will provide essential support for what is now a £3m project. For communities like Bernera bridges and causeways as just as much lifeline infrastructure as ferries are elsewhere.

“This budget represents a reasonable and responsible continuation of the journey we started in 2018 and I recommend that we agree it, commit to its early implementation and continue to work together and take advantage of all opportunities as the recovery map becomes clearer in the months ahead.”