Updated financial and capital strategies for the next five years have been agreed at a meeting of East Lothian Council.

The financial strategy aims to support an extensive transformation programme which protects essential services in the face of mounting financial challenges. This is at a time when East Lothian is one of Scotland’s fastest growing areas, resulting in added pressures on the delivery of public services.

The strategy, agreed at today’s full council meeting, recognises that - as a result of the COVID-19 pandemic - the council must review how it uses assets such as buildings to support the way services are delivered, and maximise its income.

Maintaining good financial control, continuing to progress opportunities for partnership working and focusing on prevention and early intervention to reduce inequalities, are other important aspects of the strategy.

The council will also continue to support a capital investment programme aligned to local priorities, work to stimulate economic growth and minimise borrowing.

Council Leader Norman Hampshire said:

“Every household in East Lothian will recognise the importance of the council having clear plans in place to continue managing its finances effectively, while focusing on priorities such as protecting and enhancing the environment, giving children and young people the best possible start in life and supporting those who are vulnerable.

“The council tax paid by local householders contributes around a quarter of the money we need for our revenue budget, with the majority of funding coming from national government. But funding pressures have continued to grow, and with rising demand and increased costs, the amount of funding available to us is not keeping pace with the scale of service provision.

“These challenges have been compounded by the impacts of the COVID-19 pandemic.

“That’s why the council needs to build on its work to be increasingly entrepreneurial, efficient and effective.

“Our five-year financial strategy gives us a strong platform on which to build, in order to deliver critical services in a way which continues to be sustainable and meets the needs and expectations of our communities.”


The financial strategy for management of the council’s separate housing budget will focus on ensuring rent levels remain affordable for tenants, working with partners to deliver affordable housing needs, reducing rent arrears and delivering a new housing management system to improve forward planning and deliver improved customer service.

Capital strategy

Meanwhile, the capital investment strategy provides an overview of how capital expenditure plans, capital financing and treasury management activity contribute to the necessary infrastructure supporting local services.  Its purpose is to firmly place decisions around borrowing in the context of the overall longer-term financial position of the council and to provide improved links between the revenue and capital budgets.


Holding an adequate level of reserves to meet unexpected costs is a key management tool for delivering the Financial Strategy.  In determining medium term financial plans and preparing budgets, the council needs to consider the establishment and maintenance of reserves in accordance with its statutory powers.

Councillor Hampshire commented:

“It is important for councils to hold reserves as a measure of financial security. This is particularly important for unexpected events or emergencies which cannot be anticipated.

“While we have previously used reserves to help balance the annual budget, this is not seen as a prudent practice in terms of managing recurrent expenditure.

“We need to be able to maintain reserves in order to be resilient and ensure we are delivering effective financial planning in the interests of communities who depend on our essential services.”

Budget process

Councillors also received an update on budget development for the 2022-23 financial year, with details of specific government funding allocations for councils expected to be available later this month.

Draft budget proposals are expected to be considered by Cabinet in January 2022, with the option of amendments being submitted before a full council meeting to agree the budget for 2022/23 (including the setting of council tax and rent levels) is held on 1 March.

Published: Tuesday, 14th December 2021