Councillors have agreed to establish a working group charged with squeezing a projected capital spend of £36.5 million into an allocated budget of just £15 million for next year, amid fears that they are stocking up problems with overly-ambitious future spending plans.
Members and officials will work together to establish just how many of the SIC’s estimated £230 million-plus wish list of projects can actually be afforded in the coming years as they seek to draw up a five-year plan for spending which will include the first two years after the next election.
After a priority-setting process decried by one critic as a “shambles”, the council did eventually settle upon a £19.9 million capital programme for the next 12 months at a special Full Council meeting in Lerwick Town Hall on Tuesday.
It is part of an overall £34 million programme in 2009/10 once spending of £11 million on new tugs at Sellaness and £2.6 million on the housing revenue account have been factored in – making it roughly equivalent to the annual capital programme of Highland Council, covering the largest land mass in Scotland.
The major projects going ahead this year are the Mid Yell junior high school and cinema and music venue Mareel, while the new AHS – estimated to cost between £4-5 million a year if a leaseback arrangement with Shetland Charitable Trust is agreed – is not part of the programme.
Councillors have agreed that their reserves will be drawn down below the floor policy of £250 million during construction of the Lerwick school.
Members agreed to head of finance Graham Johnston’s suggestion that spending on feasibility studies and design work for future projects be approved provisionally, with the caveat that expenditure will only happen if it has been established that spending on the projects in question in future years will be affordable.
His report warned of “hard decisions” to come, stating: “The biggest concern is that the council is storing up aspirations and commitments for 2010/11 and beyond which exceed future spending limits.”
Mr Johnston suggested to members that they may want to consider removing £820,000 of spending in 2009/10 on additional care home beds, Whalsay terminals and the Walls pier on the grounds that they will amount to £10 million spending if taken further forward next year, and a further £25 million in the subsequent three years, at a time when the council is trying to wean itself off the habit of dipping into the oil reserves.
Members voted 17-1 in favour of Lerwick North councillor Allan Wishart, who had previously raised his concern that the meeting could descend into a “bun fight” with councillors putting forward their own pet projects for funding, after he suggested moving ahead with the capital programme as it stood.
Lerwick South councillor Jonathan Wills said the whole process was “quite frankly a shambles” and hit out at chief executive Morgan Goodlad and other senior figures for their failure to detect that “unaffordable aspirations” had been building up over a number of years, to the point where they have now spiralled out of control.
Dr Wills has repeatedly called on the council to start living within its means in the past 12 months, saying this week that if the SIC keeps going along its current trajectory it is “going to hit a concrete wall”.
Although he was seconded by councillor Allison Duncan, when it came to a vote Dr Wills found no support for his proposal that spending on new projects, with the exception of an NHS resource centre and Leog replacement, be halted.
Mr Cluness concluded the meeting by saying he felt the council had used its oil reserves to provide “excellent infrastructure” for the community over the past 30 years and “managed our resources very well”.