Falkirk Council: Plea for financial aid as rising energy and fuel costs hit

Added to these costs, the council is still trying to calculate the cost of the pay deal that has now been accepted by council staff – while teachers have also voted in favour of industrial action after rejecting a five per cent deal.

Members of Falkirk Council’s executive also heard on Tuesday that the financial reports were being written in the midst of huge uncertainty.

Chief finance officer Amanda Templeman said they would have to “wait and see” what happens next after last week’s mini-budget sent interest rates soaring – something that could have big repercussion for the council’s capital spending.

Guiding councillors through the financial reports, Ms Templeman, gave verbal updates as the information had changed so significantly since they were written.

Reporting on the council’s treasury strategy, she told councillors: “The announcements that were made as part of the mini-budget looked to significantly increase government borrowing and that resulted in the cost of government borrowing, which is our gilt yields, rising significantly.

“That’s important because that potentially has a direct impact on the council as our long-term borrowing rates are based on those gilt yields.”

“As those gilt yields were rising really quickly the Bank of England announced it would buy £65 billion of bonds to reduce the pressure on the yields and to try and stabilise the markets.

“That announcement had an impact and the rates reduced by around one per cent at that point. So, the markets have calmed somewhat but rates do remain high and the markets are demanding more reassurance on the position and the Chancellor therefore intends to bring forward full spending plans earlier than originally planned.

“Importantly, that’s going to include an assessment of those plans by the Office of Budget Responsibility so really we need to wait to see what that looks like to see how the markets react and that will drive our interest rates.”

The impact of rising energy and fuel costs were also made clear to councillors in an update on the council’s financial position.

The increase in energy costs for schools is currently £1.058m while recent tenders for school bus contracts saw prices rise by £750,000 million.

The leader of Falkirk Council, Councillor Cecil Meiklejohn, said she was very concerned about the rising costs for organisations such as the council and the NHS.

She said: “As these are not devolved matters I propose that we write to the UK Government highlighting that local government, like our citizens, is suffering from the impacts of energy and fuel costs.

“Local government is providing vital, essential services and we need to be able to keep those services going. The higher fuel costs could impact on our ability to deliver those services.”

Conservative group leader Councillor James Kerr said his group “understand how difficult it is for communities” and agreed they would back the letter.

He said: “We’re not bothered where the money comes from as long as we get the money for our residents. It’s very important that we try every opportunity and every avenue that’s available.”

The Labour group leader Councillor Anne Hannah said they too would support the letter.

“We are concerned about ensuring we get as much money into the area as possible, not just into our constituents’ pockets but also into the services they rely on,” she said.