The majority of councils’ funding comes from the Scottish Government. Argyll and Bute Council campaigns for funding for services, along with other councils across Scotland, through CoSLA (Convention of Scottish Local Authorities).
CoSLA has described the financial settlement for councils as ‘a very poor settlement for local government which fails to address the dire financial situation of local government’.
CoSLA points out that the settlement across all councils:
- Does not provide the funding needed to address the demand-led pressures in social care
- Does not provide assurance for the future of our services.
- Does not end the continuing cuts to our non-statutory services, particularly in culture and leisure.
You can read more about that on CoSLA’s website
What is Argyll and Bute Council’s budget position?
The council’s budget provides for a huge range of services. Schools, roads, social care, toilets, economic growth, leisure, customer service, environmental health, planning, local employment, refuse collection, transport…just some of the services the council budget funds.
Estimates showed a budget gap of around £14 million in the budget for 2026/27.
The council delivers more services than we have a duty to deliver. And Argyll and Bute needs its council to provide some services that other councils do not provide, primarily air and ferry services.
We will continue delivering more than we have a duty to do. But less budget means fewer extras.
Why does the council have another budget gap?
In brief, demand and costs for services increase, but our funding doesn’t match those increases.
Just some examples of what needs funding - the council transports 3,000 school children to school every day in term time. Our school and public transport service contracts increased by £1.7 million between 2024 and 2025 alone and are expected to go up again this year. At the same time costs of transport for young people with additional support needs went up by £500,000.
Maintaining the buildings and IT equipment for our school pupils is costing £655,000.
As well as pressure on budgets for running services, the council faces significant projects costs to improve our infrastructure.
An example was the £2.5 million cost for re-building one of the area’s 900 bridges, irreparably damaged in a storm (Balliemore in Glen Lean). Or the estimated £96 million investment needed for one of its 36 piers and harbours (Craignure on Mull).
How many savings are already agreed?
The council has already identified and agreed £3.1 million of efficiency savings, and a further £3 million of savings options that will go to the final Council budget meeting in February for consideration.
The options going to the February meeting would mean the loss of 36.8 FTE (full time equivalent) jobs involving 66 employees, and the reduction or stopping of some services. You can read more on our website.
Where does the council budget come from?
The council’s budget comes from:
- 80% from the Scottish Government (SG)
- 20% from council tax and fees and charges.
Some funding is ring-fenced for specific purposes that the council can’t change, for example funding for active travel developments.
Some funding is revenue – to deliver every day services, for example teaching staff and school costs, utility costs or costs of staffing and running waste and or social care services.
Some funding is capital – to invest in infrastructure vital to life in the area, including improvements to roads, bridges or schools, major developments such as the Argyll and Bute rural growth deal, or making buildings energy efficient to save money longer term. Councils cannot spend capital funding on running services.
What is the council’s funding spent on?
Our short video gives an idea of what council funding delivers: Council funding
Education and social care services need most of the council’s budget. Everything else has to come from what is left.
For every £10 of council tax in 2025 – 2026:
- £5.25 went to Education
- £2.78 to Social Work
- £0.65 to Environmental (eg Refuse Collection)
- £0.50 to Roads and Transport
- £0.27 to Cultural and related services (eg Leisure and Library Services)
- £0.55 to other services (eg Planning and Housing Services)
What about reserves – why have money in reserve when you have a budget gap?
In brief, reserves are not spare cash, reserves are money that is held for specific purposes which include:
- Contingency funding for responding to unplanned, emergency demands such as the multi-million pound impacts of severe weather
- Funding received from Scottish and UK Governments and other sources for a specific purpose that cannot be spent in one financial year, or funding that can be used over a longer period of time for a specific purpose or project
- To fund one-off costs and provide funding for investments, for example, transformation programmes, or capital investment contributions. These can span several years and support the long term sustainability of the area.
Part the of budget planning process each year involves considering if all reserves are still relevant to the priorities and demands of the council.
If a reserve is no longer required, the funding will be returned to the General Fund for general use. For more detail please see our information on financial reserves.
When will the council set its budget?
There will be a meeting of full Council on 25 February to set the budget for 2026/27.
Thank you to everyone who gave their support for fair funding for Argyll and Bute and underlined why council services are so important. We passed your support to CoSLA.
New release - Budget black hole and rising costs threaten council services (November 2025)
