Council chiefs have revealed they are facing a financial shortfall of £156million over the next decade - just a week after the Times revealed proposals to buy the Rivergate Shopping Centre for £55million.

The shocking scale of the Council’s cash crisis was laid bare in a special report for councillors yesterday (Tuesday) and revealed that almost half of the shortfall - £70million will occur in the next three years.

The funding gap likely means services will be hit and jobs are expected to be cut in the coming years, with council chiefs admitting “A funding gap of this scale is expected to impact on the Council’s workforce.”

Just last week the Times exposed secret documents which reveal North Ayrshire Council met with the owners of the Rivergate Shopping Centre, Kennedy Wilson to discuss a potential bid to buy the mall.

If it goes ahead it would likely be funded through a loan but could still pile extra strain on their the cash-strapped council’s already underpressure finances.

Council leader Joe Cullinane described the shock report as “very worrying”.

He said: “This is clearly a very worrying report. We will need to work with our communities, public and third sector partners and the trade unions to respond to the challenge and make the right decisions for our communities.”

North Ayrshire Council has already had to make savings of £73m from its revenue budget since 2010 due to funding not keeping pace with the cost of and demand for services.

The latest estimated shortfall means council bosses will have to think hard about the services being delivered, its partnership with local communities.

The report, which details the Council’s long-term financial outlook from 2018/19 to 2027/28, was discussed by Cabinet members yesterday.

North Ayrshire Council Leader Joe Cullinane said: “Since 2010, North Ayrshire has had to save £73million as a result of austerity and now we face this significant gap in our funding over the next decade.

“The difference between projected demand for services and anticipated funding shows that we need real terms increases if we are minimise the potential impact on existing jobs and services whilst meeting increased demands.”

This new report provides a long-term financial outlook giving the Council time to plan its response to future financial challenges.

It is based on the Council’s best estimates and anticipates that North Ayrshire’s grant funding will reduce at the same time as the authority faces a higher demand for services and increasing costs.

The outlook shows that the Council will have to meet increased commitments such as inflation, workforce costs, and an increasing demand for services particularly for a growing older population and vulnerable residents.

The projected shortfall is expected to impact on the size and shape of the Council’s workforce and a commitment will be made to actively engage with staff and the trade unions as plans are developed.

Councils are legally required to set a balanced budget meaning that expenditure cannot be more than the Council’s income.

Councils manage a number of separate budgets to meet their obligations:

The Revenue Budget – this funding is used to meet the cost of the day-to-day running of Council services, including salaries, heating, lighting and services.

Capital Funding – This is money spent on major, longterm assets (such as new school buildings like Garnock Community Campus or facilities like the new Portal leisure centre). Capital money is funded differently and cannot be used to fund everyday services covered by the Revenue Budget.

Housing Revenue Account – This is money derived largely from rental income from Council houses and used to manage, maintain, repair and improve the council housing stock.