Council chiefs welcome broadly positive report on reform

SIC political leader Josie Simpson and chief executive Alistair Buchan have welcomed the broadly positive report for the Accounts Commission into the local authority’s performance following a testing year of reform and reorganisation.

Audit Scotland’s controller of audit Fraser McKinlay said the council had made “good progress” over the past 12 months. He did note financial management remained an “area of significant concern” and pointed to “difficult decisions” ahead as the council sets its 2012/13 budget.

Responding to the 32-page report at a press conference in Lystina House this afternoon, Mr Simpson said he was “satisfied” with its findings but acknowledged more work still needs to be done.

Mr Buchan said the last few years had been “very hard for the Shetland community and its council”, but he sees the new report as a vindication of the wide-ranging improvement plan he set in motion in autumn 2010.

He pinpointed a new management structure, improved governance arrangements, better working relationships and “clarity and structure” both in report-writing and the way council meetings are conducted.

“This important report demonstrates very clearly that Shetland is now forging ahead,” Mr Buchan said. “Change can be a painful process but I say a heartfelt ‘well done’ to our staff, our councillors, our partners in all walks of Shetland life, and also to the many members of the public, all of whom played a key role in getting us to this point.

“Our challenge now is to keep up the momentum which we have established and to start to reap, for the community, the rewards which come from doing the right things in a better way.”

Mr Simpson echoed the chief executive’s view, and said everyone involved deserved credit for “their hard work and forbearance”. He said: “We have turned the corner and the future for Shetland and for the council now looks much more certain and secure. We have set the course, and the thing to do now is to hold steady and keep going.”

The local authority is in the midst of seeking huge savings from its annual budget, with £18 million to be cut over the next two years. The already difficult task was made greater when the Scottish government announced last Thursday that it was trimming the SIC’s block grant by nearly £1 million a year for each of the next three years.

Mr Simpson insisted the restructuring and financial cutbacks would have been necessary without outside input and dismissed the notion that the council was now beholden to the Accounts Commission.

“I think that any accountant can look at the graph [of oil reserves] that we were faced with,” he said. “It was falling off the edge four or five years down the road. I think we had to take heed to that, and that’s what we’re doing.”

Trade unions and some within the business community have voiced anxiety about the speed at which the cuts are to be made, fearing damage to the wider Shetland economy. But Mr Simpson and Mr Buchan re-asserted their belief that the cuts are being made in a “sensible” manner with “judicious” use of the oil reserves.

Those at the top of the council are convinced that breakdowns in key working relationships between and among some councillors and staff have largely been overcome. Councillor Cecil Smith, whom Mr Buchan praised as an “absolute stalwart” for his efforts, said there had been an “immense change” on that front. “We all have a duty to make sure that continues,” he said.

The overhaul of senior management, which has seen 16 department heads and 56 service managers replaced by five corporate directors and 34 executive managers, has been carried out speedily. The report pointed to “some disruption and increased anxiety” among staff as a result, but Mr Smith said making changes swiftly had been the right way to go.

He said: “We were given an opportunity when Alistair joined us: you can do this two ways, you can do it quickly or do it slower, but whichever way you do it there’s going to be some pain. We all agreed we wanted to do it as fast as we could, so that’s the journey we took.”

The SIC’s number of full-time equivalent staff soared from 2,536 to 3,010 between 2007 and 2010, but the report notes that figure has fallen by four per cent since October 2010. A total of 118 jobs have been shed in the past year, partly through early retirements.

Referring to well-documented problems within the finance department, Mr Buchan said the council was “cautiously” looking into whether its staffing level needs beefing up. Staff were criticised for submitting error-strewn statements earlier this year and it was three months after the deadline before a satisfactory set of accounts was finally lodged with Audit Scotland.

Two consultants were brought in through the Scottish Chartered Institute of Public Finance and Accountancy. Mr Buchan again paid tribute to the hard work of finance staff in turning things around, and laid part of the blame for this summer’s woes at the feet of the hired help.

“By bringing in the recognised professional body … we could have been forgiven for thinking they’d do a job for us,” Mr Buchan said. “They clearly did not. Having said that, we’ve had positive discussions with them in terms of what they’ll do for us in the future to make up for that.”

He said a lot of the focus would now be on dispersing jobs outwith Lerwick, and on selling some of the council’s numerous properties. Two buildings in St Olaf Street are being put up for sale, and it is expected a much wider range of Lerwick properties will also be sold off once many staff are moved into the new office complex at North Ness. 

Mr McKinlay’s report will go before the Accounts Comission on Thursday.