Dundee is facing a huge financial crisis which will take years to recover from, and will require massive support from central government, the leader of the city council has said.
Speaking to the Tele, John Alexander said that an estimated £17 million needs to be found to plug the gap in the council’s finances for just three months, due to the coronavirus lockdown.
Fraser Macpherson, the leader of the Liberal Democrat group on the council, joined Mr Alexander for the video call, and he warned that both Holyrood and Westminster needed to support local authorities through the financial crisis.
Mr Alexander said: “Clearly protecting the people of Dundee is the first priority, and the financial aspect comes secondary to that, but we can’t lose sight of the situation. £17 million, bear in mind, is only for three months so that is for a quarter – that is not the gap for the entire year.
“So if this continues for another three months, that’s another £17m gap in the council’s budget.
“It is a significant challenge – we need to get clarity on how that gap is going to be plugged because the essential services that the council provides, and the 7,000 employees that we have, are not going anywhere.”
Mr Alexander said he was having ongoing discussions, including one with Cosla on Friday, to discuss financial support for Scottish councils.
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He said that financial experts estimated it could take around three to five years for Dundee to recover rather than there being a “quick bounce back” from the economic downturn.
He also said while an extra £155m extra funding announced last month by the UK Government to support Scottish councils was a hugely positive move, it would not meet the full bill the local authorities are facing.
He added: “I don’t have the ability to borrow money to plug that gap, and I don’t have the ability to plug that gap in isolation.
“We need central government support in order to do that. If we don’t have that as we move forward through this crisis, then it is another crisis that we’re going to have to deal with and it will have serious ramifications for how we deliver services.”
Organisations supported or funded by the council such as Leisure and Culture Dundee also had to be considered.
Councillor Macpherson said: “I don’t think we can underplay the financial position affecting the local authorities.
“I speak to my colleagues – we’ve been doing webinars with my party colleagues across Scotland – and it’s quite clear this is not a Dundee problem, this is a whole country problem.
“£155m sounds like a lot of money, but if you take £155m, divvy it up between 32 local authorities, it doesn’t touch the side of £17m, times four, in a financial year.
“It will take central government to realise that local authorities are vital, are providing vital services and they are going to have to be supported going forward if we are going to maintain the sort of level and quality of service that we’ve been providing in Dundee over the years.
“So, a big challenge ahead without a doubt, but the message to national government or governments across the country is that local government needs support.”