SIC ‘moving in the right direction’, says council watchdog

Shetland Islands Council has “made good progress” in reforming the way it is organised and conducts its business, according to a follow-up report just published for the Accounts Commission.

But financial management remains an “area of significant concern” for the watchdog because a proper set of 2010/11 accounts was not received until 30th September – three months past the deadline – and next year’s budget will confront members with “difficult decisions … to ensure that the levels of reserves are maintained”.

The 32-page report, which the council’s political leader Josie Simpson and chief executive Alistair Buchan responded to at a press conference this afternoon, has been written by Audit Scotland controller of audit Fraser McKinlay to update the Accounts Commission on the SIC’s so-called improvement action plan.

Introducing this has been the main task of Mr Buchan, who was seconded from Orkney Islands Council in August last year after the debacle which led to the departure of chief executive David Clark. He was forced out less nine months into the job.

After a two-day public hearing into the council in June 2010, the commission made 13 main recommendations for reform, which were accepted in full by councillors last November.

They included: developing leadership, governance and strategic direction; improving working relationships among councillors and between councillors and officials; creating robust and transparent decision-making procedures which command public confidence; and generating the capacity to deliver a financial strategy.

The council’s committee system has been reformed, the number of directors reduced to five as part of a major management shake-up and a series of new protocols introduced. The council has had support from a variety of different organisations and consultants.

Mr Buchan is praised in the report for leading the improvement work “with considerable commitment and resilience, guiding the council through a series of important and difficult decisions”.

Mr McKinlay states: “The council is moving in the right direction and there is a clear commitment to improve. The council’s self-awareness has improved and it understands it must continue to focus on its priorities and what needs to improve for the future.”

He adds: “The full impact of the improvement action taken to date has yet to be realised and the council understands that there is still a long way to go before it can demonstrate all the attributes of a Best Value council.”

On financial management and accountability, he is less complimentary: “Some aspects of financial management have improved; the council has introduced more effective financial planning and budget setting arrangements and agreed a strategic budget plan and agreed principles to underpin its reserves policy. Budget monitoring reports to elected members have improved, but need to improve further.

“Some aspects of financial management remain an area of significant concern however. The latest budget monitoring report indicated that the council has significant challenges in delivering its 2011/12 budget. The process of finalising the annual accounts was problematic …”

Mr McKinlay also raises the old chestnut of the qualification of accounts. This happened again because the SIC and Shetland Charitable Trust accounts were not grouped.