SCOTTISH Borders Council’s budget for the forthcoming financial year will be the most challenging in more than two decades, senior councillors have warned.

The news comes as the local authority already faces a £3m revenue overspend at the end of 2023/24.

That is largely the result of an ‘unavoidable’ £1.8m spent within out-of-area placements for young people and an additional £900,000 due to increases in the cost of additional support needs and school transport.

Successful action has been taken to tackle the overspend through a freeze on discretionary spending and other measures.

But when members of the council’s decision-making Executive Committee met recently they admitted that the current and forthcoming financial situation was “sobering”.

Independent councillor, and former leader of the local authority, David Parker said: “I think 2024/25 is going to be the most challenging financial year the council has faced since 2001/2002, when the council had a major educational overspend to deal with.

“It is worrying that we have a £3m unplanned overspend at the moment. It’s understandable why we have it but equally it is a concern.

“If you look at the out-of-area placements budget between 2023/24 and 24/25, £4.8m has had to be added to that budget because of the very significant pressures in it, and although officers are doing an excellent job trying to deal with those pressures, the fact is that some of those are completely unavoidable, and it looks to me that throughout 24/25 that’s going to be a continued issue.

“The other fundamental challenge is transport where we can see £900,000 required in relation to contracts to do with schools. We are about to go through a whole round of tendering in relation to contracts Borders wide for the year ahead and who knows what that pressure will be like in 2024/25.

“This is a sombre paper with very significant financial challenges, and as an administration and as a council we need to set out very clearly and very soon what processes and procedures we are going to put in pace to tackle this major budgetary challenge, the likes of which I have not seen in the 30 years I have been on this council.”

Last week it was announced that council tax would be frozen for the coming year.

It comes after the council accepted £3.2 million of funding from the Scottish Government.

While council tax will not increase from April 1, Scottish Water announced that it would be raising its charges for water and waste water services by 8.8 per cent.

The local authority collects these charges on behalf of the utility firm.

The council will be setting its budget later this month on February 29.