Editorial: The Old Rock 17.06.11

Where does the balance lie between cuts that are proposed as a result of the inevitable reduction in revenue support and capital grants from the Scottish government for 2012/13 and those that are deemed necessary because too much money is being withdrawn from Shetland’s oil reserves?

For the current financial year revenue support fell by a relatively modest £2.5 million; what is the expectation for next year? This is important because if the policy pledge of not taking the reserves below £250 million is, as looks likely, to be broken, we must again discuss whether it is necessary for the council to cut services so drastically in a single financial year, with potentially dangerous implications for the economy, instead of more gradually reducing its dependence on the reserves. As this column observed in November last year: “The state-dependent nature of our small island economy means cuts in public spending will have a much more detrimental impact here than elsewhere in the country. We need to do what we can to soften the blow.”

What are the political and economic risks of challenging the SNP’s council tax freeze? If the council had refused to accept this and a pay freeze on public sector salaries of £21,000 and over this year, it would have been penalised with a 6.4 per cent reduction in revenue support instead of 2.6 per cent. What are the views of those in other councils? Can strength in numbers be mustered to challenge the SNP’s crushing of local autonomy, made under the guise of offering greater autonomy?

Is the council lobbying the local MP, who is a member of the coalition government, to put the case for moderating the scale of the cuts in light of a mountain of evidence that economic recovery has failed to take root? The mantra of “there is no alternative” needs to be resisted (see Old Rock, 1st April 2011). He has argued against closure of the local coastguard station on the grounds that it will have a negative impact on the safety of shipping in waters around the islands; yet he continues to support cuts that it is now clear will play a part in posing serious dangers to the Shetland economy.

Can the SIC augment its revenue income from new sources or sell any capital assets to help reduce the proposed level of cuts?

Is the council fully aware of the likely economic impact of cutting a further £18 million, £9 million, £6 million from its budget? Is anyone studying this, and if not, why not?


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