Although it will take a few days to analyse the full implications, it is clear that the grant settlement to Local Authorities will be cut by at least 3.5% and likely to be over 4%. The grant makes up 80% of our budget, and as anticipated it is a much bigger cut than previously expected, resulting in a gross budget gap of around £40 million next year for The Highland Council.

In the light of the severity of this cut, and the short timescale available to implement it, a Voluntary Redundancy (VR) scheme will be made available to staff, combined with an option for staff to voluntarily reduce their hours. This scheme will be open from Monday 21 December until 29 January.

These measures will go alongside a range of savings and service cuts, which are to be agreed at Council in February, to help the Council achieve a balanced budget.

The scheme will be open to all staff, except for staff delivering NHS commissioned services. Teachers, HGV drivers, staff who work in residential childcare and criminal justice may apply, however it is important to recognise that there is a very limited scope to reduce numbers in certain areas such as these.

Not everyone who applies will have their application approved and cases will be prioritised based on service needs and potential savings to the Council, taking into account any service reductions which may be agreed by Council in January/February.

Chief Executive Steve Barron said: “These are not easy times and I appreciate the uncertainty such measures bring, however we are left with few alternatives. The scheme is an opportunity which will allow staff to consider whether they wish to leave the council through voluntary severance/early retirement. The scheme will be open for a short period of time to allow us to prepare for next year’s budget and to reduce the level of uncertainty as much as possible.”

Leader of the Council, Cllr Margaret Davidson added: “The Scottish Government’s decision puts Local Authorities in an extremely difficult position. We are already having to deal with the impact of eight years’ of the council tax freeze, and this latest announcement equates to a budget cut of at least a further £16 million.

“We have no alternative but to cut services and to reduce our workforce accordingly. This will undoubtedly impact on performance and staff morale and there is no getting away from that. This is just the first of many unpalatable decisions we will have to make in the coming weeks and I am deeply saddened to see the Council forced into this position.”