Council realigns PPP contracts to save capital projects and retain frontline services

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Scottish Borders Council committed today to deliver all its planned capital projects previously announced as well as protect frontline services, as it revealed its budget plans.

This means that its already ambitious capital investment plan, including three new secondary schools in Galashiels, Peebles and Hawick, primary schools in Earlston and Eyemouth and two care villages in Tweedbank and Hawick, are still very much on the agenda.

Going into this budget announcement, it was clear that the local authority had a £7.2m funding gap to fill, due to increased costs and a real-time drop in funding from the Scottish Government, due to inflation.

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The proposal in the budget plan, set to be ratified by full council next Thursday, is to bridge this by realigning the council’s PPP loan contracts – relating to four schools and the Jedburgh Grammar Campus – over the life of the assets rather than the previously agreed contracts.

This means the council will be tied into these contracts for the next 50 years, but officials say there is no extra cost involved.

A spokesperson told us: “Of the balance released, £9m would be used on a one-off basis to manage estimated financial gaps in the years 2023/24 to 2026/27, while £3.5m would permanently contribute to closing the financial gap in 2023/24.

“A further £20m is proposed to be allocated to a five-year change fund, targeting new technology, service changes and cost reductions to ensure the council remains financially sustainable while maintaining service standards.”

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The budget plan this year stands a good chance of being voted through, given that it was put together by a cross-party collaboration of councillors, working with council officers.

Council leader Euan Jardine said: “I think we all anticipated that developing budget plans during and immediately after the Covid-19 pandemic would be the hardest we’d ever experience, but this year it has proved to be even more challenging.

“For that reason I am incredibly proud that councillors across the chamber put aside political differences and successfully came together to develop this single plan. I want to take this opportunity to thank my colleagues for their efforts and support.

“The impact of the rapid rise in inflation and associated costs cannot be overstated, and these hit the council budget from all angles: catering in schools, energy prices, construction of our capital projects, and by placing more families in need of our support.

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“But, despite the financial challenges we will still deliver what was an already ambitious capital investment plan.

"We will still be able to invest in the regeneration of our town centres and support our communities and the most vulnerable.

“We are also maintaining our roads maintenance funding and protecting frontline services, where savings would have been felt by all. Given the current financial climate that really is incredibly positive news.”

Councillor Elaine Thornton-Nicol, leader of the SNP and Green group, said: “Since moving into opposition in 2017, the SNP group has challenged the administration each February with an alternative budget, but it was clear this year that this was not the best approach for our communities and constituents.

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“By collaborating across the political spectrum we feel we’ve got the best we can out of the budget for 2023/24, given the financial pressures being faced by the council and every resident of the Borders.

“The decisions have not been easy, and we appreciate the time taken by over 800 residents to complete the budget survey. Those responses have guided our discussions and we have debated various proposals. While we will never agree on every proposal, this is a good outcome.”

The budget is also costed around a 5% rise in Council Tax for the coming year.

Councillor Mark Rowley, executive member for service delivery and transformation, including finance and budget oversight, added: “In the face of the exceptional financial challenges facing local authorities it is no surprise that many are considering cutting back their capital investment programmes whilst also increasing Council Tax well above 5%.

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“The fact that we are avoiding that here in the Scottish Borders and continuing to invest in our communities and deliver key projects is thanks to careful financial planning and decision-making over many years.

“I have no doubt that the area will reap the benefits of this carefully-developed budget plan for many years to come.”

The draft financial plan will be considered at a meeting of full council on Thursday, February 23.