Frustration as millions spent on major projects without single brick being laid


THE COUNCIL needs radically to overhaul its spending strategy to prevent it from squandering more millions on major capital projects without having anything to show for it, according to a damning report from its own finance chief.

Some £6.1m of public money has been spent on three major infra­structure projects – the proposed new Anderson High School, the Bressay transport link and the Mareel cinema and music venue – without a single brick being laid in the past decade.

Head of finance Graham John­ston’s report, which will go before the SIC’s audit and scrutiny com­mittee next week, seeks to address an “underlying concern” expressed by some members earlier this year that “a number of high profile projects appeared to have had a very long, troubled and inconclusive gestation”.

Too many major projects are being considered by councillors in an arbitrary and isolated fashion, without their grappling with the bigger picture and the need to switch resources from one priority to another, the report states.

Mareel is set to begin construction this winter, though the £1.1m spent to date could have gone to waste had the council not voted, by the narrow­est of margins, to continue with the project in June. Meanwhile, the building of a new high school in Lerwick and settling upon a new means of linking Bressay with the mainland remain a long way off completion and Mr Johnston’s report identifies a “compelling case” for better scrutiny in order that the council learns lessons and avoids repeating past errors.

The report proposes a wide range of measures including:
*Clear policy goals behind a project need to be established at the beginning of the process, before a project team is put in place;
*A clear budget approval stage for planning projects to be intro­duced, with no budget being set before this point;
*A clear definition of the roles and responsibilities of everyone involved in capital projects to be set out;
*A preference for the use of internal consultants wherever pos­sible, as part of a drive to make cost savings;
*More rigorous and compre­hensive project monitoring and dialogue within the council and its various committees;
*The carrying out of post-project reviews to ensure proper control and accountability and to learn lessons for the future.

Just under £3m has been spent on developing proposals for a new AHS at two different sites and the council is currently in the process of sub­stantially reworking the Knab site to try and cut the cost of the project, which has now been capped at £49m. Mr Johnston is critical of a process which for too long has failed to establish a final and settled choice of projects, despite such a sizeable expenditure to date.

The Bressay link project has already cost £2m without anything to show for it and it has been estimated that the total cost to the SIC will be well over £7m following its spat and legal battle with Lerwick Port Authority over abortive plans to build a bridge between Lerwick and the island earlier this decade. The authority has submitted a £5.25m insurance claim against the council for losses incurred after its plans for a bridge forced the LPA to re-tender the contract to dredge the north mouth of the harbour.

The preferred option of a tunnel is now being considered by Zet­Trans, but Mr Johnston states: “Argu­ably, Bressay has had more attention and resources than it deserves in cir­cum­stances where there are some pressing issues about the adequacy of the in­fra­structure on the Whalsay route.”

Pointing to concern about the need for more resources to be ploughed into social care as the population demographic of the isles changes, Mr Johnston argues that the danger with areas where policy and/or projects already exist in isolation is that they “may consume resources which are actually needed for higher priorities elsewhere which are not yet as well defined”.

The Mareel project, on which work began in 2001, exposed short­comings in overall council policy because it sprung up as a result of lobbying from an enthusiastic arts community rather than as a statutory obligation, the report states. Such lobbying is inevitable and, as a re­sult, the council’s framework “needs to be flexible and capable of adapt­ing to pressure from all sources”. “Policy formulation, in other words, needs to be an everyday considera­tion, and not something which is done one day and then left alone for extended periods.”

Mr Johnston argues that the lengthy ructions over whether Mareel was a priority and whether it could be afforded right up until August this year highlighted that the council’s policy framework had failed and consideration of financial constraints was absent.

“It can be concluded that the choice of project to meet a particular policy objective or service require­ment needs to be thoroughly and definitively taken at an early stage, so there is no wastage of time and money going down blind alleys, or turning back, or changing direction part of the way through projects.”

Mr Johnston points out that there are moves afoot within the council – with a new education blueprint, a transport policy framework under the auspices of the ZetTrans partner­ship and a new capital project prioritisation regime – to improve planning of major projects but that there remains a way to go.


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