Shetland Islands Council could find a chunk of the £18 million it still needs to save over the next two years by hiving off services and staff to the private sector. The idea was one of the meatiest tossed into the pot on the first night of the local authority’s Have Your Say tour which stopped off in Cunningsburgh last night.
Around 50 people came to the hall to answer the council’s unprecedented call for help to end years of living beyond its means – all ideas for savings gratefully received.
The financial crash diet is deemed essential because chronic overspending, rising costs and dwindling income are eroding cash reserves so badly that within five years there could be nothing left of what was once a £340 million nest egg for future generations.
Under this worst-case scenario a penniless council would have to slash all services by 25 per cent because it would be hugely reliant on what the government gave it in its annual grant.
The reserves were never meant to fall below £250 million but have been raided in recent years to pay for ambitious schemes like giant ferries and staff pay rises under the single status jobs review. The remaining millions are not faring too well on the money markets and the fear is that the fund may be incapable of recovering its previous rude health. It is likely to be down to £219 million by the end of this financial year.
The urgent action being taken now is intended to slash spending to a level which will hopefully allow the magical £250 million reserves floor to be restored within 10 years. Then Shetland will be able to live happily off the interest year after year.
Children’s Services director Helen Budge told the meeting the council was set to spend £195 million this year, £98.5 million of it from government grants, £51 million from income from charges and £45 million from reserves. The three big spenders are education, social care and roads and transport.
The original target for savings was a brutal £26 million over two years but some internal reshuffling and snipping has yielded £8 million of permanent savings, leaving the current quest for another £18 million.
Economic development chairman Alastair Cooper described it as one of the biggest challenges the council had ever faced.
Council leader and meeting chairman Josie Simpson said: “We need to use our money more cleverly than in the past.”
While the situation is serious it is nowhere near as grim as that faced by almost all the other local authorities in Scotland which have no reserves. The SIC knows it will get no sympathy from them. Mr Simpson admitted other council leaders ridiculed the SIC when it traipsed to Edinburgh to plead poverty.
The meeting heard that government funding to the SIC is not set to recover to pre-2010 levels until 2026 due to the battered state of UK finances.
The problem has been spelled out through the media in recent weeks backed by chief executive Alistair Buchan’s blog and two internet videos. Now comes the Have Your Say tour to gather the community’s ideas to add to the council’s own before another round of consultation to consider detailed proposals and, as Mr Buchan has spelled out, “tough decisions”.
At the start of the Cunningsburgh meeting the unusual step was taken of setting out the rules of engagement for the evening. Mr Simpson asked people to show respect, to avoid apportioning blame and desist from racism, sexism or ageism.
A few years ago in Shetland that request would not have been necessary but, for whatever reasons, public debate has become more acrimonious. For the main part the etiquette was heeded during a constructive meeting although several people came close to starting the blame game. Mr Simpson intervened, again asking people not to “speak against each other”.
At one point councillor Betty Fullerton felt the need to wade in to protect officials who she was disappointed to hear being “lambasted” by some in the audience.
Asking the general public to analyse the council’s complex overspending problem and come up with solutions which don’t wreck the economy or the quality of life is a tall order. In the event, no instant fixes were forthcoming in the Cunningsburgh Hall but a good solid start was made during two hours of questions and suggestions.
The aforementioned privatisation proposal was offered up by Andrew Nicolson from Cunningsburgh, whose family run a bus and haulage company. He stressed he was not criticising the work ethic of council workers but voiced the view that the way the council runs its affairs involves masses of paperchasing and teams of managers and administrators, making jobs slow and expensive whereas good private sector operators in Shetland thrived on lean management. If they were given services like the Direct Labour Organisation’s trades and transport services to run they would have no problem taking on some of the council’s staff too, he said.
“The private sector could help you immensely,” Mr Nicolson said. “It’s nobody’s fault. I’m not having a go at anybody. It’s just the way it’s set up in the public sector in Britain. It just creates inefficiencies.”
Former council vice-convener Jimmy Smith from Sandwick, now back in the real world of business, ploughed a similar furrow, calling for less over-the-top regulation by bureaucrats in departments like environmental health and planning, who he said were holding up development and prosperity in Shetland. The UK was bad for it, he said, but Shetland took it even a stage further. “Get oot o wir gaet and let wis get on we things!” he urged.
He also called for the council to be generally more efficient in what it does. In education and social care it should be able to deliver the standards achieved in Orkney and the Western Isles for much less than it currently spends. “There must be a better way of spending less and getting the same result,” he said.
He regretted the “Rolls-Royce” standard of so much of what the council had done over the years, calling for “Volvo estate” quality to do instead.
Councillor Jonathan Wills was the only person to suggest pay cuts for council staff, perhaps tapered to take the most from those earning the most. He even mentioned job cuts but was “almost frightened” to say which 400 from the 3,010 full-time equivalents should go.
About 80 per cent of the council’s spending goes to pay for its workforce and it is from within its ranks that around £14 million of the £18 million saving is going to have to be found, according to Mr Buchan.
In a leaflet to accompany the cuts tour he said the council was going to stop hiring people from outside the local authority for a time, unless “an extremely good case” is made.
One suggestion on the night was for more to be done to share work and jobs between public bodies like the council and NHS Shetland.
Two former council staff members had a go at the whole Have Your Say approach to cuts. Retired Shetland College boss and leisure services manager George Smith was disappointed to not be presented with some of the council’s own ideas for cuts nor the results of proper social-economic impact analysis of the effects of slicing £26 million a year out of the local economy.
Former teacher Gordon Johnston agreed, saying it was “ridiculous” to be asking people for a shopping list of cuts.
But Mr Simpson said if the local authority had tabled its ideas at this stage it would have been accused of not listening to the people. Its ideas would come out later in the process when the next series of meetings takes place.
Men driving aimlessly and endlessly in cooncil vans is perhaps the most visible sign of public sector inefficiency and it has been the target of scrutiny by council costcutters already.
But it remains the No.1 bugbear of many people, like businesswoman Evelyn Jamieson who was one of several who raised the matter in the hall.
New infrastructure director Phil Crossland was able to say vehicle use was being studied and he revealed that Shropshire council, where he had once worked, had over three times the number of staff but only 380 vehicles to the SIC’s 300-plus.
There were the expected requests that cherished services be left well alone, including youth services and swimming pools. There was even a call for the music tuition service to be improved instead of continuing in its current haphazard manner.
Others had no time for frippery. Such “play things” as golf courses and luxurious Yell ferries were the object of one man’s closure list in order to protect old folk’s homes.
Street lights, including the 78 lining the boulevard through Cunningsburgh, were also not needed.
But union official Robert Williamson warned against hitting quality of life. He said Shetland had become “a wonderful place to come back to to go into care”, arguing that what needs to be addressed was the islands’ propensity for exporting its best talent to the rest of the world.
The council tour continued in Scalloway last night with Bixter, Symbister, Brae, Lerwick and Cullivoe to come over the next fortnight. An extra date is to be added in Unst due to unpopular demand.
Anyone with sudden inspiration can submit their ideas to firstname.lastname@example.org or write to the town hall.