Moray Council sets balanced budget for 2026/27 amid significant financial pressures

The budget, built around the priorities in the Council’s Corporate Plan, has been set against major national and local challenges, including inflationary pressures, above trend pay awards, rising borrowing costs and reductions or restrictions in external funding streams.

Despite this difficult backdrop, the Council has delivered a balanced budget for the year ahead. In line with the indicative increase agreed in February 2025, the Council has confirmed a 10% increase in Council Tax. A further indicative rise of 6% is included for 2027/28.

When setting the budget, the Council faced a funding shortfall of £4.446 million after increasing Council Tax. Savings of £4.386 million have already been approved, combined with an additional £60,000 of new savings, the gap has been closed.

The Council has allocated £8.046 million for identified budget pressures, including pay awards, rising costs in social care and new statutory obligations.

The Council has also provided £91.243 million to the Moray Integration Joint Board (MIJB) for adult social care, children’s services and related statutory functions.

The use of up to £303,000 of earmarked reserves has been approved to support transformation projects, including the Buckie Harbour Masterplan and work to maximise socio‑economic benefits from renewable energy development.

Key areas of investment include:

• Money Advice Moray, which will continue to support low income households despite the loss of UK Shared Prosperity Funding.
• Moray Leisure Centre, where the Council proposes to take on certain maintenance and insurance costs to safeguard local access to sport and leisure facilities.
• Renewables related economic development, including a proposed new Moray Development Fund.
• Buckie Harbour development, with seed funding to move the Masterplan to the next business case stage.

Reprofiling of the discretionary repair grants for essential home repairs for pensioners in privately-owned properties, while continuing statutory disabled adaptations will allow the Money Advice Investment service to benefit more families Moray-wide, including the elderly.

Recognition of significant pressures in social care, including shortfalls in Real Living Wage funding for commissioned services is provided for by an increased contingency fund to manage rising and emerging pressures, such as teacher supply, children’s out of area placements, IT infrastructure costs and waste disposal.

The report makes clear that future years will require further savings, currently indicated to be £1.136 million in 2027/28 and £7.049 million in 2028/29.

The Council highlights several significant risks, including the reliance on savings without reserves to fall back on; ongoing pressures and potential overspend within MIJB; inflationary risks and interest rate volatility; uncertainties within Scottish Government policy and funding; and extreme weather impacts with no contingency.

Leader of Moray Council, Cllr Kathleen Robertson said: “I’m grateful to my colleagues across the chamber and officers who have worked collaboratively to pass this budget. Like many councils, Moray is facing sustained inflation, increasing demand for services and growing financial pressures, all at a time when national funding simply isn’t keeping pace with the reality on the ground.

“We have worked extremely hard to protect essential services and support our most vulnerable residents. But doing so has required difficult decisions, and we cannot avoid the fact that the scale of the challenge is increasing each year.

“Despite these pressures, we remain committed to investing in Moray’s future - supporting our communities, creating opportunities for our young people and helping build a stronger and greener local economy. Our transformation work and long term financial planning will continue to be critical as we navigate the years ahead.”