THERE could be a £19.6 million black hole in Fife Council's finances and their hard-pressed staff should get a "proper pay rise" from the Scottish Government.

But councillors were told last week that estimate includes a three per cent council tax rise and that jobs and services could be on the line if they don't get the money they need to close the gap in the general fund revenue budget for 2021-22.

Council co-leader David Ross said: "The one thing COVID has done is highlight the essential nature of local services and the very valuable work our workforce carry out, whether that's social care, giving food and support to our local communities, dealing with homelessness or getting the bins collected.

"The council staff have played a tremendous part in dealing with the COVID crisis.

"We need to recognise that and the government needs to recognise that by funding local authorities and their services properly.

"I very much hope we won't see a reduction in our grant but also that they recognise our staff should be rewarded for the work they're doing.

"They do need a proper pay rise but that has to be fully funded by the Scottish Government or it means cuts in services or loss of jobs."

The council's finance chief, Eileen Rowand, outlined the £19.6m gap that could exist in the budget for the next financial year – £13.2m of it down to COVID-related costs or loss of income – and said there were "limited" options for closing it.

However, due to a "high level of uncertainty", with funding support from UK and Scottish governments still to be determined, she said the figures were a best guess at this stage and could be much lower or higher.

The assumptions include a one per cent cut in the council's grant from the Scottish Government, a one per cent pay award increase and a three per cent rise in council tax.

Cllr Ross stressed: "These are baseline assumptions, working assumptions, they are not decisions.

"We're not saying, at this stage, that we will have a three per cent council tax increase.

"All of us recognise the impact this is having on individuals and families across the whole of Fife.

"Looking at council tax collection, which is falling behind where we would hope to be, I think that indicates the financial pressure that COVID is having on households across Fife and we need to take that into account.

"The downside is if we don't get income it could mean cuts to services and loss of jobs which, equally, we want to avoid."

Ms Rowand said the "unusual" move of proposing a one-year budget, rather than three-year, was down to the pandemic and the "many financial uncertainties" they face.

Part of that is down to the UK Government's decision to announce a Comprehensive Spending Review, which was due yesterday (Wednesday), instead of an Autumn Budget.

This will delay the Scottish Budget, now set for January 28, with the local government settlement set to follow shortly after.

It won't give much time for the council to respond to the definitive levels of funding and information will be shared with councillors to allow them to come up with draft budget proposals.

There was a similarly tight timescale this year and the council aim to set the budget on February 25.

Convener and council co-leader David Alexander highlighted that the report also included four scenarios based on varying assumptions about council income and costs, which could change the financial picture drastically.

He said: "It says the budget gap could range from £3.5m to £37.3m, yeah OK!

"As we get closer, I'm sure the numbers will narrow and again, we may get a budget that surprises us, you just don't know."