SCOTTISH Borders Council, the region’s largest employer, is facing a challenge which is “absolutely unprecedented” in the next financial year.

That stark warning was delivered last week by Councillor Michael Cook, the executive member for corporate improvement.

He was commenting on the news that the grant which SBC receives from the Scottish Government and which accounts for over 85% of annual revenue spending at Newtown, has been reduced by 4.02% to £197.5m.

That represents a cut of £8.28m in the resources currently disbursed to the council from Holyrood.

And when agreed pay awards and increments are taken into account, the council is facing a funding gap of £9.1m in 2017/18.

“The Borders public needs to understand that this state of affairs is not accidental,” said Mr Cook at Thursday’s full council meeting.

“The Scottish Government, despite receiving more cash from Westminster, has chosen to cut the amount of money coming to local government by £350m.

“They have moved the deckchairs around and we are now facing a level of challenge in our finances which is absolutely unprecedented.”

In a report to council, chief financial officer David Roberston offered an explanation for the cut.

“The Scottish Government has previously signalled its intention to protect police budgets and provide a settlement for the NHS which protects the level of resources available to health in real terms,” said Mr Robertson.

“With public commitments made to protect these services, the resources available to local government, which make up around a third of the total Scottish budget, have diminished.”

Mr Robertson said he and his staff had previously assumed there would be a cut of 2% or £4.03m in the annual settlement from Holyrood.

But with a much larger funding gap to bridge, he said the council faced “significant cost pressures” next year.

“It will require increases in the Council Tax, increases in fees and charges and a significant programme of cost reductions to balance the budget and protect core services,” said Mr Robertson.

Later at the same meeting, councillors agreed that Council Tax, after a nine-year freeze, should rise by 3% - the maximum permitted by the Scottish Government – on April 1 next year, thus bringing in an extra £1.5m.

And increases averaging between 3 and 4% were also agreed on a range of council-run services – from burials to school lets – in order to generate additional annual income of around £60,000.

Mr Robertson said the council’s corporate management team was working up proposals to bridge the funding gap ahead of the council setting its 2017/18 budget in February.

These includde a review of “all areas of the budget…to ascertain where there are opportunities to increase or accelerate savings”.