COUNCILLORS will be warned that the local authority faces the prospect of "significant and damaging cuts" if funding from the Scottish and UK governments does not cover rising costs.

Fife Council leader Councillor David Ross will lay out the stark picture at a full council meeting today (Thursday).

In his leader report, he confirmed the budget gap for 2023/24 was estimated at around £32 million, however, it is set to rise to £46m and £61m in subsequent years.

"In a meeting with all political groups on the council, the executive director of finance and corporate services outlined her proposals to narrow the budget gap for 2023/24 by a combination of budget realignment, substitute funding, adjusting for staff turnover and the use of balances," he said.

"However, these proposals are based on the assumption of a three per cent increase in council tax (a decision on this will be taken by the council at its budget meeting in February) and on a ‘flat cash’ local government settlement from the Scottish Government.

"If the settlement results in a further cash cut (‘flat cash’ is already a real-terms cut in council funding) then the council’s financial position would be worsened.

"These measures may help the council to set a budget for the coming financial year that avoids significant cuts to services but balances cannot be used on a recurring basis, they are available only once.

"The council will face making significant and damaging cuts to services in future years if the funding coming from both UK and Scottish governments is not increased to cover rising costs."

The amount of funding from the Scottish Government is expected to be announced on December 15 when budget proposals, including the local government settlement for 2023/24, are outlined.

Cllr Ross continued: "Through a survey of Scottish councils, COSLA estimates that the total budget gap faced by councils is £612m taking account of inflation, energy costs and demand pressures.

"When pay increases for next year are taken into account, each one per cent pay increase costs approximately £100m across Scottish councils, then it is likely that local authorities will need more than £1bn in additional funding next year just to stand still.

"The professional view this year from Directors of Finance (DoF) across Scotland is that the financial pressures being experienced are so extreme as to call into question the financial sustainability of local government.

"In an unprecedented move, the Directors of Finance from all 32 local authorities have written to the Deputy First Minister outlining their concerns at the financial position of local government in Scotland and noting the impact of these financial pressures on local services including schools, waste, roads, family support, public health and social care."