Glasgow City Council at 'critical' point over £110m budget gap

Glasgow City Council is facing a "critical" point in a bid to turn around its finances, Scotland's public spending watchdog has warned.

The Accounts Commission said "robust oversight" was needed to tackle a £110m budget gap spanning the next two financial years.

Its report found that other potential costs, over an ongoing equal pay dispute and the rising of cost of homelessness, could add to the budget pressures.

The commission said that decisions over the next few months would have a "significant bearing" on the council's future financial sustainability.

The 2026 Best Value report found that the council had a £45.7m overspend from the 2024-25 financial year.

It said there were no "established longer term financial planning arrangements" and the city faced a combined £109.7m budget gap for 2026-27 and 2027-28.

The Accounts Commission highlighted that alongside high levels of poverty and deprivation, two key issues placed additional pressure on Glasgow's finances.

The first was the long-running issue of equal pay, which the commission said must be addressed quickly to avoid further significant financial impact.

Glasgow City Council previously paid out about £770m after it emerged female workers in roles such as catering or cleaning had for years been receiving up to £3 an hour less than those in male-dominated areas such as refuse collection.

It has committed to implement a new pay and grading structure from April 2027.

The Accounts Commission said meeting this deadline was "critical" in order to avoid further equal pay liabilities and a "financial and operational impact on the council".

The spending watchdog also said homelessness costs were adding "significant additional pressure", which is expected to cost the council £56m this year.

The growth in homeless applications has been linked to the asylum backlog.

After being granted leave to remain, asylum seekers are classed as refugees and must leave UK Home Office accommodation - at this point they can turn to local councils for assistance.

Last year, Glasgow City Council leader Susan Aitken said the city had "run out" of temporary accommodation for people declaring themselves homeless.

"We're having to put them up in hotels, and that's very, very expensive," she said.

The Accounts Commission also said Glasgow City Council must outline necessary choices to enable it to "live within its means".

It said cash reserves "continue to decline" and were below the council's own targets.

It advised the local authority to ensure that elected councillors play a "key role" in overseeing financial sustainability.

Andrew Burns, deputy chair of the Accounts Commission, said: "There is no doubt about the scale and complexity of the challenges that Glasgow City Council faces, particularly equal pay and homelessness."

He added: "We need to see leadership, responsibility and robust oversight by councillors."

Glasgow City Council depute leader Ricky Bell said the issues raised were "not a surprise".

The SNP councillor said: "The Accounts Commission recognises that many of those challenges are not unique to Glasgow – and that others, such as the pressure on homelessness budgets, are not of the city's making."

He added that the council had made significant progress on a new pay and grading system since the period the Accounts Commission examined.

Scottish Labour local government spokesman Joe Fagan said the report painted a "stark picture about the challenges faced by Glasgow".

He added: "The budget gap will likely require very difficult decisions to be made, which will impact on people living right across the city."

Scottish Conservative local government spokesman Alexander Burnett said Glasgow had been left with a "staggering blackhole" in its finances

He added: "Local people will be left facing swingeing cuts and higher council tax bills because of the SNP's mismanagement."