EAST Lothian Council’s depute leader has warned of “tough choices” ahead as its finance chief predicted the local authority would have to make funding cuts of £40million over the next five years.

Finance boss Jim Lamond presented the council with three scenarios for the coming five years based on differing staff pay increases, a reduction of funding from the Scottish Government, and inflation.

And he told councillors that “planned efficiencies” of over £39 million, needed by 2023, was the most realistic outcome.

At Tuesday’s meeting of the council in Haddington Town House, head of council resources Mr Lamond: “I think there is quite a significant risk of this scenario being quite realistic.”

His warning came as the council prepares to begin work on its budget for the next financial year.

Councillor Norman Hampshire, depute leader, called for a cross-party effort to create a budget which would safeguard public services.

Earlier in the meeting, which was held in Haddington Town House, on Tuesday, the council’s auditors revealed that over the last financial year it spent £360million on services and had assets worth £900million.

Mr Hampshire said: “I do not want to put out scare stories but some of the changes that are coming will be hard. We have tough choices to make.

“This administration will do everything it can to protect education and social services in East Lothian. We have to try and work together to deliver a balanced budget that protects services for people here.”

Mr Lamond cited moves to devolve a number of taxes to the Scottish Government from the UK Government as adding additional strain on public sector funding.

He said: “The future sustainability of public sector funding and the Scottish Government expenditure will be increasingly dependent upon the performance of the Scottish economy.

“Despite the many uncertainties facing Scottish local authorities, in particular those arising from a reduction in Government funding, the need for medium to longer term financial planning is becoming increasingly important.”

The finance chief said he drew up the scenarios which the council could face to allow for long term planning in the coming budget based on what may happen down the line.

Councillor Brian Small, leader of the Conservative Oposition Group, said: “We have always known the gravity of the situation we are facing, it is not going to be easy and for us the budget planning starts now.

“I think we have to be careful about examining what can be achieved by efficiencies.”

Councillor Stuat Currie, SNP group leader, however said he was not as pessimistic about future funding from the Scottish Government.

He said: “It is hide behind the sofa time. Everyone has to be realistci about what can be achieved and how we do that.

“I am not as pessimistic in this area. There are massive changes coming but I think East Lothian is better placed than many local authorities not just to meet the changes but to continue the services.”

The new draft budget proposed by the council administration is expected to be presented to a meeting of the cabinet in January.

No indication has been made about service cuts that are under consideration, however Edinburgh City Council recently said it was looking at cutting £21million from its budget for next year equating it to 100 jobs, a three per cent council tax rise and plans to charge people £25 a year for garden waste removal.