21st May 2018
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Council investment in local industry totalled £93 million in last decade

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The council invested £93 million in local industry during the decade up to March 2009, a meeting of the SIC development committee will hear next Thursday.

Around £55m of the money, provided through Shetland Development Trust and the council’s economic development unit, came from the Reserve Fund with the other £38m from capital and resources held by the development trust.

A total of £30.9m was paid out in grants and other non-repayable assistance, with the highest amount being £14.7m to the fishing industry. The remainder was made up of £6.9m (general industry), £4.5m (agriculture), £2.8m (tourism and heritage) and £2m (marketing, events and promotion).

In the loans section advances of £33.1m made by the development trust were matched by capital repayments totalling £33.5m. It is not clear, however, how much interest was due over and above the latter sum.

The report to councillors, prepared by head of economic development Neil Grant, was prompted by a huge public outcry over the council’s decision to write off around £0.5m in loan repayments from knitwear firm Judane (Shetland) Ltd.

The report does not mention Judane by name but states that there were “several high-profile losses” made in the aquaculture sector, while equity and participating interests of £9.5m were taken in local businesses including £4.5m in the Smyril Line. A total of £18m of whitefish quota was purchased and leased back to the industry.

During the 10-year period £4.5m of surpluses were generated from interest and dividend payments made on development trust investments. When provided to charities the tax element could be reclaimed and the gross value to the charities was £7.5 million.

The main beneficiaries from the surpluses were the social enterprise company Cope and the NAFC Marine Centre, while support was also given to organisations such as Shetland Amenity Trust (to develop heritage projects such as Old Scatness, Viking Unst and Sumburgh Head), Belmont House Trust, Sandsayre Pier Trust and the Shetland Bus Friendship Society.

Mr Grant states that the investments and assistance have “helped to achieve sustainability in the traditional industry sectors and develop new opportunities in the new and emerging sectors”.

Looking forward, he writes that the world economic climate will continue to make it difficult for companies to access investment and working capital and that there is likely to be a strong demand for loans and commercial investments in future years by local businesses.

The report also reveals that the total annual output of the Shetland economy, as recorded in the Shetland Regional Accounts 2003, was £706 million. The top five sectors by value were fisheries (£188m), construction (£60m), oil terminal (£56m), public administration (£46m) and retail (£38m). Tourism and agriculture were £16m and £12m respectively.

The total number of people employed in 2003 (full-time equivalent) was 9,109, including 1,108 in fisheries, 978 in public administration, 907 in retail, 885 in construction and 690 in school education.

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About Jim Tait

Jim Tait is news editor at The Shetland Times.

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