All 7300 staff and managers at North Ayrshire Council will today receive letters from the authority’s chief executive explaining that council spending will be cut by up to 18% in the next three years, a reduction of more than £40 million.

The council has said it intends to reduce the number of people it employs by “organisational structure reviews, natural wastage and early retirement”, adding that it has always opposed compulsory redundancies and will continue to try to avoid them.

It believes it can shed about 800 posts while avoiding compulsory redudancies by “taking advantage of natural turnover”.

Expenses for councillors will be frozen for the next three years.

North Ayrshire will also look at its property portfolio to save £20m-plus, with council leader David O’Neill admitting this will include school closures. Although he could not put a figure on how many, he said it would amount to “a handful of closures”.

He said: “Right now we employ over 7000 people. In the course of the next three years we will see natural turnover of 800 people and we’ll take advantage of that. But this needs to be targeted so we can protect frontline services.

“The trade unions recognise this isn’t something particular to North Ayrshire and are understanding of our position and will be fully consulted.

“I’ve also announced that there will be a freeze on councillors’ expenses for the duration of this administration. This is not a tremendous amount of money.”

However, union leaders have said the council’s reduced workforce projections are overly optimistic.

Colin Turbett, North Ayrshire’s Unison representative, said: “In the current economic climate people will not want to leave their jobs, particularly some older employees who are unlikely then to work again.

“Our key concern is that while the council says it does not want to go down the road of comuplsories now, what will happen if it doesn’t get the numbers it wants?”

Latest projections for public finances indicate councils could be billions worse off within the next four to five years, with some functions having to merge in order to maintain services.

North Ayrshire, along with its neighbours in East and South Ayrshire, will have all its regulatory functions such as licensing, trading standards and environmental health under one umbrella within

a year.

Mr O’Neill also said the council would be looking at vehicle procurement to reduce the £12m a year spent on its fleet.

In her letter to staff, the council’s chief executive Elma Murray said: “We have known for some time we are facing a big financial challenge.

“I now have a much clearer idea just how big that

challenge is for North Ayrshire.

“We intend to make every effort to minimise the impact of cost saving measures on jobs, however, as pay costs amount to in excess of 50% of our annual budget, this will be a difficult challenge.”

The council will unveil its budget in February.