A FIFE Council chief has admitted that the level of financial risk facing the council is beyond anything seen in decades.

Eileen Rowand, Executive director for finance and corporate services, gave an update to councillors at a meeting of the cabinet committee on Thursday.

Despite forecasting an underspend of £2.478m, Ms Rowand said uncertainty with pay disputes and rising costs meant challenging times ahead.

"It is the first monitoring report of the year and there is still quite a level of uncertainty," she said. "The big risk for us currently with projections is in general where we are with ballots and the teachers in a position where the offer has been rejected."

Uncertainty over what funding will be received by the Scottish Government from the UK Government and passed onto local authorities was expressed.

"It is really quite worrying," she acknowledged. "The council has coped for a number of years on funding positions that has been below inflation but inflation has been fairly low so we have been able to manage that.

"We are in different times now and it is really impacted by the level of funding that comes from the UK government and what is passported to the Scottish Government.

"From the current commentary, I am not hopeful there will be further money coming to the Scottish Government so it makes it extremely challenging and as to what can be passported to the council.

"A block of our budget is staffing so it will impact on the number of staff that the council can afford to employ. It is quite concerning given where we are at this point in time."

Dunfermline South councillor James Calder raised concerns about an overspend of £26.8 million mainly caused by pay increases.

"It is obviously a significant amount," he said. "Is this the worse case scenario we are facing here? Is there is going to be need for an emergency budget if not going to get enough funding from the Scottish Government?

"I know using underspend from things like vacancies to help. Is this something that could end up becoming permanent? There are 400 Fifers with unmet care needs as we cannot recruit enough carer. Should we become more successful in recruiting, are there going to be issues there as we well?"

Ms Rowand said services were still working hard to try and attract staff.

"In terms of underspending on vacancies, services are trying very hard to recruit staff," she said. "It is very important we can deliver services. HR are working closely with services and looking at how we can look at recruiting in different ways.

"This is not just a concern for this council. It is a concern for a number of councils across the country. We are doing what we can."