20th May 2018
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Duncan: cuts forced on SIC by ‘absolute shambles’ of past councils

The SIC is having to make “draconian” cuts because of reckless spending resulting from shambolic governance and an absence of strong leadership since the turn of the century.

That was the view of council audit and standards committee chairman Allison Duncan. He was speaking this afternoon after members digested a “first-rate” report from finance chief James Gray outlining how the local authority found itself overspending to the tune of more than £30 million a year by 2012.

Mr Gray suggested the impending threat of school closures and big cuts in ferries might have been avoided had councillors not squandered tens of millions of pounds in the past decade.

Spending on fiascos such as the Bressay Bridge, Smyril Line, AHS and SSG Seafoods cost the council over £25 million. But Mr Gray identified a bloated payroll as the fundamental cause of overspending. Employee costs spiralled from £54 million to £93 million between 2003 and 2012.

Mr Duncan said past councils had received umpteen warnings from Audit Scotland and previous finance directors to curb spending.

Many councillors were reluctant to publicly apportion blame to individuals, though several privately endorse Mr Duncan’s opinion that former convener Sandy Cluness was responsible “for a lot of this”.

He said the convener’s office sat empty too often during the 2007-2012 council – whereas successor Malcolm Bell is working round the clock to the extent that Mr Duncan is “surprised his wife hasn’t asked him for a divorce!”

He told the committee: “I, along with our political leader Gary Robinson, asked [Mr Cluness] to resign in the last council because of the spend, spend, spend attitude and he refused to do so. It’s put us in a very difficult position now.”

Education and social care were the main departments where staff numbers mushroomed.

Corporate services director Christine Ferguson, who was in charge of community care for part of that time, said a “lack of coherence” meant departmental aspirations frequently conflicted with an overall need to cut costs.

“I was not only here, but actually a senior manager in what is now seen as one of the worst-offending services,” she acknowledged. “Finance policies at corporate level recommended a reduction in spending… separately we had service priorities and targets which were at odds with that.”

After hearing that, Mr Duncan branded past governance arrangements “an absolute shambles”. “That’s not the word we use,” Ms Ferguson objected.

Asked by Mr Duncan whether there had been a lack of control over recruitment, she responded: “All the council’s policies and procedures were adhered to in that regard.”

Earlier, Mr Gray had set out how the draw on oil reserves had been “far too high” for too long. In the early 2000s, overspending had mainly gone on capital projects (“a tap you can turn off very quickly”), but the reserves were subsequently raided to top up year-to-year spending on staff and services.

Even when the brakes were applied on public spending nationally following the 2008 financial crash, SIC expenditure “wasn’t checked – it continued to grow”.

Mr Gray set out measures to avoid a repeat, including: a clearer outline of what was being drawn from reserves, better financial planning, maximising income from fees and charges, and recognising that stock market investments go down as well as up.

North Isles councillor Gary Cleaver was eager to know why there had been a “massive recruitment drive” in education and social care.

He pointed out there had not been a “sudden baby boom” resulting in more schoolchildren needing taught. And in social care, there has been a “demographic time bomb ticking for decades”. So why had the council not been “reshaping services to deliver them with the staff we had?”

Ms Ferguson said more had been spent on care to meet added demand due to an ageing population and a “huge increase” in the number of people with disabilities. Providing care is a “complex and enduring issue” and the SIC had invested in a “very high quality model”.

Pointing to disaster stories elsewhere in the country, often owing to fewer resources, Ms Ferguson said that “in many ways you get what you pay for”. But “I fully accept the disconnect between service policies and financial policies in the past”, she added.

Councillor Billy Fox raised a chuckle by asking whether Mr Gray had tallied up how many times he’d made a sharp intake of breath while piecing together his report. “My sharp intake of breath was when I first came to Shetland two years ago,” came the diplomatic response.

* See tomorrow’s Shetland Times for more, including reaction from Mr Robinson, Mr Bell and Jonathan Wills.

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8 comments

  1. Jerry McIver

    Shetland has a population not much more than Arbroath but has indulged itself with its own wealth for decades. There have been some undeniable advantages this has bought, mainly great infrastructure, but its also very obvious that its been utterly unsustainable for years. Trouble is, peoples expectations have also risen as a result.
    Future pain is going to be unavoidable as spending is cut back to somewhere approaching reality.
    With any luck, Shetland will get back to a position of balancing the books and maintaining its trust fund. The alternative is to keep on spending like a lottery winner until the bank account is empty.
    The good times of old have certainly passed.

    Reply
  2. James J Paton

    Dear Editor

    My mother, as ever, send my da Times on Friday’s and I get it here in Skipton on Saturday mornings – wonderful.

    I was just a little disappointed this week – although the Folk Festival coverage was fantastic – to read the headline and the glaring omission/typo of the letter ‘n’ in the headline of the article about the appalling financial decision-making of councillors in various councils over three decades.

    Poverty could have been eradicated in Shetland over the past 30 years by sensible investmnet of cahritable funds and indeed investemnt in new sustainable and community/employee owned job creating businesses and you have to ask the question why, and by whom, was it not. Boycotting Tescos and opening various food and houshold goods shops on Da Street, community/employee owned of course, would be a very good start in terms of keeping money and profit in Shetland rather than it ending up in the City of London and non-Shetland based shareholders pockets.

    And for the umpteenth time of asking why are the SCT funds not invested ethically?

    Yours sincerely

    Reply
  3. ian tinkler

    Absolutely nothing changes, our councillor donkeys of old are still with us today, wasting fund as if there was no tomorrow… Just look at funds put at risk over the last year by our recently elected clowns. Hundreds of thousands to Mareel, with little chance of any return. Any pay back yet, any chance ever of Mareel ever having the profits to cover the £600,000 loan? So inanely wasted by Wiles and co. Millions more from the Charitable Trust to keep Viking Energy afloat. Clever investment that with no affordable and viable interconnector. Nice one Drew and Wiles! I would like to ask why these funds were probable squandered before the Judicial Review findings are known? That surely goes beyond stupidity. Extraordinary how our fools in the Town Hall lament and wax on about their council predecessors mistakes. Some of this lot are far worse, let self-interest and stupidity rule, as I said, nothing changes.

    Reply
  4. Sandy McMillan

    The past is the past, it is no use blaming those who cannot answer back, the spending is probably still going on, there has not been a whisper of what has been saved, is it not time the public were told how things are going after cleaning out the vulnerable,
    Now they have to start to move up the scale to the big cuts, starting with middle management or higher, until they start to executed in these areas we wont see any significant cuts.

    Reply
  5. James J Paton

    Dear Editor

    What ill considered tosh from Messers Tinkler and McMillan.
    One pointing at two cllrs in particular and indeed one falsely, and the other trying to absolve the perpetrators (perpe’traitors’) when it was the vast majority of councillors and senior officers – most of who are still alive and kicking, if not now or not long fae syne councillors and can answer back if they dared to!

    Is Mr McMillan really after ‘The Big Cuts’?

    Yours sincerely
    James J Paton

    Reply
  6. Salary/employee costs jumped nearly £40 million pounds. I would suggest that is were you start the cull. SIC employees earning over £50K are more than OIC and Western Isles put together at the last count.

    Raymond Smith Kirkwall

    Reply
  7. ian tinkler

    James Paton, Is it not self-evident to anyone, with half a brain, what I stated is mandatorily obvious. Just how you would explain the millions of pounds given to the Viking Energy project if it is now halted? Would you disagree it may have been prudent to wait until it was certain to progress and only then, to invest further millions? As for Mareel, let’s wait for the true cost to be revealed. For some reason the council is withholding that data and resisting a request via the Freedom of Information act. I do so wonder why.

    Reply
  8. ian tinkler

    Viking Energy not viable, says chairman!! Ten million pounds Charitable Trust funds lost! Now which of the Council donkeys backed this project, were and are still Charitable Trust trustees? Good time to go perhaps before you wreck something else and waste more resources

    Reply

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