ARGYLL and Bute Council yesterday put itself on a collision course with the Scottish Office by warning it might set a budget above government guidelines.
Councillors said that to prevent further reductions in essential services, they will consider setting the 1999-2000 budget above the level imposed by Scottish Secretary Donald Dewar.
Councillor Dick Walsh, leader of the Independent-led authority, said the decision was taken after a meeting with chairmen of the transportation, development and environment, housing and social work and education committees.
''We have come to the decision that in order to protect as many essential services as possible, we should look at spending over the guideline figure,'' he said.
Argyll and Bute Council, which administers the largest area in the country, including 27 islands, has been arguing with the Scottish Office that it should be treated as a special case. Councillors have been campaigning for additional government cash, claiming the area needs a special allowance awarded to island authorities.
Under the guideline figure from the Scottish Office, savings of #3.57m must be made.
But during budget meetings in February, culminating in a policy and resources meeting on March 4, savings will be proposed which will keep the budget for next year above the Scottish Office ceiling.
Councillor Walsh said: ''We find ourselves yet again having to deal with a most difficult budgetary situation. We have been working to produce a range of savings, none of which are palatable, to achieve the guideline figure.
''Now, committee chairmen have indicated a cut-off point in savings within their service, below which they are not prepared to fall, and we appreciate the flexibility written into the guidelines by the Secretary of State.''
If Mr Dewar's ruling is exceeded by more than 5% in budget and council tax setting, the authority can have its subsidies withdrawn.
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