WARNINGS have been issued that East Lothian Council could be “bankrupt” unless financial woes ease.

The local authority was forced to plug a funding gap of nearly £19 million when it set its budget in February.

That included digging into council reserves, as well as increasing council tax by seven per cent – among the highest rise set by any council in Scotland.

More financial challenges are expected in the coming years and more savings will likely need to be found.

Councillor Norman Hampshire, council leader, highlighted the potentially grim future facing the council during a meeting of Dunbar Community Council.

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He said: “It is tough.

“I have been on the council for over 30 years. There have been difficult budgets but now we are into a different ball game altogether.

“If we keep going the way we are going, we are going to be bankrupt as a council.”

In February, the council used more than £7.3 million to balance the budget and estimates it will need to find savings in excess of £71 million over the next five years.

Mr Hampshire stressed to members of the community council that reserve funds would not be there each year.

'Not going to be easy'

He said: “We have got some really tough decisions to take over the next year: how we get the council budget back into balance.

“We have got a cross-party working group and it is something we need everybody to be putting ideas on the table to get to this balanced position.

“It is not going to be easy.”

One of the main issues facing East Lothian Council is the demand for growth.

Thousands of new homes are being built across the county, which brings in additional money through council tax.

However, the additional homes – and population increases – bring about their own challenges.

Mr Hampshire noted that the money collected through council tax made up less than a quarter of the money required by the local authority. Instead, the bulk of funding comes from the Scottish Government.

He said: “Usually, we would be able to say council tax rises by three to four per cent.

“Now, we are at seven per cent and we still had to use £7 million in savings.

“The challenge in front of us is really, really difficult here in East Lothian because of growth.

“We have just given permission for three new primary schools [Whitecraig, Blindwells and Old Craighall] and a secondary school [Rosehill High School in Wallyford] and we have to make savings to fund these new things.

“The demand for growth is huge – everybody wants to build here.”

Among the other cost-cutting measures agreed in February was to reduce household waste (green bin) collections from fortnightly to every three weeks from April next year.

At the same time, a charge – likely to be £35 per annum – will be introduced for garden waste (brown bin) collections.

READ MORE: East Lothian Council approves seven per cent council tax rise and bin collection changes

The council leader, who was previously a member of Dunbar Community Council, was joined by ward colleagues Councillor Lyn Jardine (leader of the opposition) and Councillor Donna Collins at the latest meeting.

Ms Jardine told the group that work had already started on trying to address the budget for the following financial year.

She said that discussions were taking place at both a county-wide level but also through the local authority umbrella group CoSLA in a bid to ensure East Lothian was getting “a more fair share” of the overall funding pot.

A council spokeswoman said: “As part of the budget setting this year, councillors agreed to extend the timeframe for future budget planning from three to five years in line with the development of financial and capital strategies.

“This will help inform future budget development in order to ensure the council remains on a sustainable financial footing.”