The SIC is hopeful of a positive outcome in its dispute with the European Commission, which is trying to force it to claw back around £1 million paid out to first-time fishermen over the past decade or so.
Seventy-eight first-time fishermen have benefited from aid payments dished out by the local authority. But just over two years ago the commission pronounced that the grants had contravened its strict state aid rules and ordered the SIC to demand repayment from all parties concerned, prompting the council to launch an appeal and sanction spending of up to £250,000 on challenging the ruling in court.
Councillors were given an update on the matter in private during Thursday’s development committee meeting in Lerwick Town Hall. They were told that negotiations between the council, commission, Scottish government and the department for environment, food and rural affairs (DEFRA) were ongoing and “significant progress” had been made.
Committee chairman and SIC vice-convener Josie Simpson said he felt things were heading in the right direction. It is understood that the council has already bartered an agreement not to reclaim some of the payments, but Mr Simpson said he could not be drawn on whether that was the case at this stage.
“This state aid case has been rumbling on for years and years,” he said. “Hopefully we’re making progress and can see the end in sight. It’s very, very sensitive at the moment and I wouldn’t want to jeopardise the outcome.”
The council reacted furiously back in November 2007 to the ruling, having initially believed that “de minimis” rules, under which payments of around £24,000 can be dished out in aid to companies in the fishing industry over a three-year period, meant the payments were providing legitimate support to one of the isles’ staple trades.
In March 2008 it was confirmed that de minimis did apply to payments of £7,000 to 20 crews under a scheme to modernise fishing vessels. But the situation regarding £100,062, including interest, in a grant paid to the Shetland Fish Products fishmeal factory in Bressay was believed to be less positive. The SIC is also arguing the case over the payments to dozens of first-time fishermen dating back to the mid-1990s.