A STATE aid manual for council staff involved in providing financial assistance for economic activities has been approved as the SIC seeks to get to grips with how it can and cannot use its £300m-plus of oil reserves to support local industries.
The council has been the victim of a number of complaints to the European Commission arguing that assistance to particular companies or projects breaches the EU’s state aid rules, prohibiting any assistance which would distort trade.
The development committee last week recommended that the full council approves the manual, with chairman Josie Simpson describing it as “a good start to a big problem we have”. But SIC convener Sandy Cluness noted that the document would “have to be a loose leaf booklet” because of the uncertainty surrounding the issue and the fact that the Commission may alter its rules and regulations at any time.
The guide states: “Any individual may decide to complain to the EU about the award of funding to a particular entity or project. They may do so even when the assistance has been awarded under a permissible state aid measure or even when the assistance has been considered not to be a state aid.
“What is important when such complaints happen, and they will, is that the council can demonstrate that proper process has taken place before funding has been awarded to make sure that the funding is state aid compliant.”
The council now has confirmation that the reserve fund, which is worth £87m of the £318m council reserves, is classed as being part of the apparatus of the state. It was previously regarded as being outside the scope of state aid because the money was not derived from taxation.
Last November, the Commission ordered the SIC to recover a host of grants it had made to the fishing industry – a ruling against which it has launched a £250,000 appeal.
The council has also had to row back from plans it had to build a new £4.2m abattoir for the agriculture industry after a complaint was submitted by Boddam slaughterhouse operator Magnie Smith, meaning it can only provide matched funding for any new facility.
Complaints are also believed to be have been submitted relating to a host of other council investments, including two recent anonymous complaints over Mareel, Shetland’s cinema and music venue, which are believed to have come from the local licensed trade and are currently being examined by the Commission.
UK fisheries minister Jonathan Shaw is due to visit Shetland to meet industry representatives next Tuesday and the council is hoping to have discussions with him about their state aid appeal.
• The charitable trust’s stock market investments have recovered slightly in recent weeks and as of last Friday were valued at £179.2m, meaning the total size of the pot is around £209m. It means the total size of Shetland’s oil nest egg stands at around £527m.