Council money is snapped up by well-heeled firms
By JOHN ROBERTSON
SHETLAND public funds are handed out every year to some of the islands’ most prosperous businesses without the community being told where its money has gone.
The SIC allows commercial companies to ask for cash help with a range of basic activities regardless of their ability to pay for it themselves. The grants come from the Shetland community purse, not government funds, and few are made public.
Documents that have come to light show that earlier this year successful furniture and building supplies firm Lerwick Building Centre applied for help and got a grant of £7,718 to pay for what is recorded as “adverts” while a month later its sister company Irvine Contractors was offered £2,285 to spend on brochures.
International accounting chain Baker Tilly was awarded £2,289 to help staff from its local office attend the Fishing 2007 exhibition in Glasgow even though the organisation has an office in the city and is so well-heeled and well-established it operates in over 100 countries and generates more than £200m a year in fees in the UK alone.
The large UK and Netherlands-owned oil industry company SBS Logistics applied to the SIC and was offered £5,750 in March for brochures. Its headquarters is in Aberdeen but it has a base in Lerwick and began life here.
The businesses mentioned are among hundreds of companies, individuals and community groups who tap into the SIC economic development unit each year for small amounts of cash assistance from the community purse, little of which comes to public attention. The smaller grants are approved by officials without going before councillors.
They have only come to light following an official request under Freedom of Information Scotland laws which grant access to previously confidential data held by public authorities.
In contrast, government aid granted through HIE Shetland is made public every few months and another source of backing until earlier this year, Shetland Development Trust, regularly made public its awards of assistance, which was mainly large loans to business.
All SIC economic activity has now been brought back under the wing of the economic development department, as it used to be in the 1990s.
When questioned about the secrecy yesterday by The Shetland Times, development committee chairman Josie Simpson pledged to investigate it and whether it might need to change.
“At this moment in time I couldn’t give an answer,” he said. “But I’ll look into it. I’ll certainly ask the questions.”
He said it would be more difficult to assess which companies might be too well off to qualify for assistance under the various small grant schemes.
By far the biggest group of grant recipients from the economic development unit is farmers and crofters, including some of Shetland’s biggest, who return year after year for their grant cheques for lime, fertiliser and other goods without the wider community being aware of such regular public support.
Over 160 crofters and farmers get annual SIC agricultural business scheme grants, ranging last year from just £22.50 to £2,034. Their number includes various SIC councillors past and present.
So many are legitimately in for the cash on offer that it might seem unfair to single any out but several do stand out: the SIC pays money regularly to help improve Gremista Farm, owned by the wealthy Lerwick Port Authority. Over the past two years to April this year its tenant, Eric Graham, has secured five economic development unit grant offers totalling £20,582 for ditching, field drains, drain crossings, buying a bull and an agricultural shed. Some of the money was for the Ness of Sound farm which he rents from the SIC.
Another regular user is GB & AM Anderson with land around Lerwick and a farm in Weisdale and Kergord, as well as being the main local livestock dealer. In two years the partnership of Brian and Maurice Anderson has had five grants totalling £9,767. Larger agricultural grants which have hitherto not been revealed include £15,500 to J Irvine & Son at Setter Farm in Tingwall for an agricultural shed and a storage loft.
The grants revealed today are among awards worth several million pounds made each year from the oil cash held in the SIC Reserve Fund which councillors have been warned for years is being eaten away at an alarming rate and could run out next decade instead of providing for Shetland’s future.
Many of the grants to well-established firms are for so-called marketing projects. Last year 60 North Recycling got £3,400 for brochures (it had got a £25,000 working capital grant from the SIC the previous year) and Grantfield Garage got £1,041.
The previous financial year Brudolff Hotels was among the recipients of brochure grants. It was offered £2,910 while knitwear sellers Anderson & Co got offered £5,296 for their brochures. Brudolff was also in for £3,772 to attend the VisitScotland trade expo.
Looking at the grant awards from last year more generally, of the total of nearly £3.3m, the vast bulk (£1.96m) was gobbled up by the running costs of the NAFC Marine Centre in Scalloway, as was publicly recorded due to the matter being debated in an open meeting. Others debated openly include £425,000 to help run tourism body VisitShetland and £115,000 to Shetland Amenity Trust to create the latest invention for niche-market tourists – a Shetland Geopark for those interested in geology.
Companies operating in fragile rural areas have benefited under the grant scheme, particularly after economic downturns such as the RAF pulling out of Unst. Saxa Vord Ltd was offered £17,266 for a marketing investigation and the long-troubled factory run by Whalsay Fish Processors got £60,000 last year under the old scheme for improving fish factories.
More generally, Valhalla Brewery in Unst and its subsidiary Shetland Refreshments had offers of £27,325 for investigations, brochures, researching a new brewery layout, bore hole tests and working capital.
Delta Marine had a grant of £25,000 approved for upgrading one of its workboat/tugs while Tulloch Developments was offered £10,500 for a hollow concrete block-making plant. The previous financial year food and drinks wholesaler JW Gray was offered £20,000 towards a bulk tank for storing carbon dioxide.
The pointlessness of the council’s secrecy is highlighted by the fact that Shetland Enterprise announced in 2006 that it had offered a £75,000 grant to businessmen Stewart Isbister and Frank Miller towards their £250,000 Thule Charters boat business but the SIC kept quiet about the £25,000 it offered. However, a grant of £98,861 from the SIC to mussel-grower and processor Demlane was made public, along with £98,861 from HIE Shetland and £131,814 from the EU.
A lot of the economic development cash goes each year to community groups, which is unlikely to generate controversy. Grants also go to new businesses starting out to help them get on their feet. Among these last year were:
- Island Vista, a tourist-guiding business which was allocated a £10,000 grant for marketing to add to the £6,000 obtained from Shetland Enterprise;
- Self Catering Shetland which got £10,000 to help turn the Decca station into tourist flats with a wind turbine plus a further £1,627 grant for marketing;
- Davie Gardner’s new Atlantic Edge Music Services agency and consultancy has received several grants, including £4,575 to co-ordinate the Shetland stand at the Offshore Europe expo in Aberdeen last year;
- The seaweed product company Böd Ayre was awarded over £5,000 to hire a PR specialist, conduct product testing and attend a show.
The council also quietly pays grants of up to £10,000 to rural shops which want to buy equipment like new vans, machinery and shelving.
Highlands & Islands Enterprise (HIE) Shetland approved several grants last month for businesses and projects.
The largest sum, £20,910, was approved for Jim’s Garage, Lerwick, towards the replacement of fuel pumps under the rural petrol station grant scheme.
Other grants were:
- Northmavine Community Development Company for the final year’s running costs for Initiative at the Edge – £18,540.
- Dogs Against Drugs, Shetland for workforce development – £1,425.
- HIE Shetland towards staff attending conferences and exhibitions – £3,000.
A spokesman said the sums related to approvals, not payments. While finance may be approved, for a business investment for example, it did not guarantee that the developments would proceed. The approval simply showed that funds have been made available by HIE area office, but they would not be released until evidence was received that the project or activity has gone ahead.