Aberdeen City Council has voted to halt and reduce general fund spending due to uncertainty over the potential costs of a public sector pay rise.
The council said that it had made £13.7m of £18.1m savings budgeted for this year by the end of the second quarter.
However, uncertainty over the outcome of negotiations regarding the level of public sector pay rises means there is uncertainty about achieving the remainder.
A report by the council’s chief financial officer Jonathan Belford, said: “The full year impact of an additional 1% increase in any pay award settlement would cost the Council approximately £3.2m and with Educational Institute of Scotland expectations of a 10% increase for teachers, this would represent a 7% increase on current forecasts.”
Belford said that the council would honour any future pay deal but questions hang over how the council can finance an unknown liability.
He said: “In addition to all the actions underway by the Extended Corporate Management Team to manage the financial position, I am recommending that the Committee instruct the corporate management team (CMT) to stop and reduce general fund spending wherever possible.”
The move excludes capital investment in the capital programme and expenditure on the housing revenue account.
