Councillors agree £16 million in cuts for one year with more to come in 2013

Shetland Islands Council took a marathon eight and a half hours today to thrash out a budget for next year which will lop £16 million off its spending.

Councillors’ reluctance to agree to hasty cuts in sensitive areas, particularly those targeting the young and elderly, means officials will be working hard on a raft of reviews to evaluate services in the next few months. It means a number of unpopular decisions will be left for a new batch of councillors after May’s elections.

Among the threatened services given at least a stay of execution are day care services, the Freefield lunch club, Viking Bus Station, winter gritting and music tuition. A major review is already well under way into slashing ferry costs, and now the entire education system is to be scrutinised for £3 million a year savings (see separate story).

SIC political leader Josie Simpson pronounced himself “very pleased” after the arduous session in Lerwick Town Hall, which ended at 6.30pm on Thursday with a £120 million budget in place for 2012/13. A further £14 million of cuts will come the year after.

At the start of the day it had been proposed to draw £9.6 million more from the oil reserves than is apparently sustainable. After hour upon hour of deliberation that figure rose to around £10.9 million, which head of finance Hazel Sutherland said was “within the parameters” of the two-year budget plan.

During the day members had to wade through proposals for 158 “efficiencies” and 80 service cuts.

The threat to close day care services throughout Shetland to save £2 million a year was at least delayed until a full review of the activities and the impact of their loss is carried out.

It had been proposed to quite literally shut down and lock the doors on the parts of the care centres which are used by visiting old folk – many of them lonely and isolated – who come for meals, activities and warmth and companionship.

If the closures had to happen then some councillors would have preferred it if they were phased in rather than what Rick Nickerson called the “pretty abrupt” end proposed by officials. Gussie Angus said as many as 70 part-time jobs were at stake.

Social services committee chairman Cecil Smith said officials should look into opening up public halls for lunches as an alternative, as apparently already happens in Virkie.

Introducing the cuts proposals for community care, Mr Smith admitted some people would no longer receive their care services and others would see a reduction in choice. Jobs would go too, although it is expected that most workers will be offered alternative employment elsewhere in the council.

Another controversial cut which has been avoided for the meantime while the service is reviewed is the closure of the Freefield Centre where cheap lunches are provided for the over-60s and disabled folk who have been referred there by social workers. An instant campaign set up on Monday by Doreen Williamson and fellow Freefield customers helped stave off closure for now.

Allison Duncan said the proposed cut, to save £80,000, was “another attack on the most vulnerable”, some of whom did not see another soul from one day to the next. “Freefield has been successful for a long time and I don’t see why we should change it,” he said. “Leave our old people alone.”

Rather than targeting the closure of specific schools, the whole education service will be mined for £3 million savings. SIC education spokeswoman Betty Fullerton said afterwards that she viewed a full-scale review as “a fairer way of doing it”, rather than “picking off” individual communities.

S5 and S6 pupils at the Janet Courtney Hostel will have to pay £25 a week for their breakfast and dinner, though it will be means-tested. Opposition from councillors including Mr Nickerson and Mr Duncan was swept aside by nine votes to six.

Members were told by head of children’s services Helen Budge that the cost of a hostel place was still heavily subsidised, and that the £25 would cover the cost of meals only. Mr Duncan described the charges as a “damned disgrace” and fumed that some university-bound students would start paying fees two years earlier.

Culture spokeswoman Florence Grains and Mr Nickerson were exercised about plans to raise music tuition fees by 50 per cent and cut the proportion of pupils being taught an instrument from 40 per cent to 25 per cent. The measures could tally up to more than £350,000 over two years.

Mr Nickerson said the cuts and extra charges risked “destroying” 40 years of developing top-class musicians. Later in the day Mrs Grains lost a vote to remove the tuition fee measures 15-4 after members heard a review is already underway and will report back to councillors shortly.

A ploy from Bill Manson to slow down the adoption of maximum primary school class sizes was rejected as plans were deemed to be already too far advanced.

The neighbourhood support workers and community workers who were for the chop have been saved to bring harmony and deter dog poops for another day. The £80,000-a-year service will be reviewed.

Convener Sandy Cluness and Jonathan Wills combined to stop support grants worth £37,000 a year being removed from Shetland charities Befriending, Advocacy Shetland and Family Mediation.

The gritting and snow-ploughing service is going out to review, looking for a cut of £375,400 this year. Concerns were expressed about care workers not being able to access clients or suffering car accidents if cutbacks meant side roads were not kept clear to the usual high standard.

The Viking Bus Station building, set for closure along with its rural freight centre, is now at least to have its future reviewed first. So will the plan to stop buying and putting up three Christmas trees in Lerwick every year, costing £11,400.

Councillors also came up with ideas of their own, mostly from Dr Wills, to save potentially hundreds of thousands of pounds a year. Those which will be looked at are:

* Farming out the council’s remaining sports and leisure services to Shetland Recreational Trust, which is funded by Shetland Charitable Trust rather than the SIC;

* Cutting fees paid to the fund managers who speculate on the money markets with council reserves;

* Merging the development department’s marketing section with the local tourism body Promote Shetland.

Dr Wills’ idea of clawing a further £1 million from the economic development unit, which is contributing proportionally less to the cuts than key public services including education and social care, was rejected in favour of drawing a little more from the reserves.

Mr Simpson said he had been “a little worried” at the direction being taken on Thursday morning when the debate lacked focus, but things had come together in the afternoon.

He lavished praise on staff for their hard work in setting a platform for councillors to address the grave financial position, and said he believed the right balance had been struck between safeguarding services and protecting the £200 million oil reserves.

Chief executive Alistair Buchan said he was content there were enough staff resources to carry out all the reviews asked for. He was unable to put a figure on the job losses the cuts will cause, but stressed that compulsory redundancies remain an “absolute last resort”.

By Neil Riddell & John Robertson


Add Your Comment
  • Michael Inkster

    • February 9th, 2012 22:48

    I would be interested to know how much the Council’s annual spend is on stationary, printing costs and stamps/franking etc – do the Councillors know what the figure is? There is also the indirect labour cost of staff time in printing letters etc to be factored into the equation. I suspect that the figure, if known, is well into seven figures. Is there any reason why Shetland Islands Council shouldn’t become a “paperless Council”? There would be significant benefits in adopting such a strategy in my view other than the obvious financial savings. Has this been considered and if not why not? M Inkster

  • Alan Skinner

    • February 10th, 2012 9:18

    Councillor Wills is absolutely correct to be questioning the fees that we are currently paying our investment managers. It seems to me that we are paying fees for active management, whilst performance is not even matching passive index tracking, the costs for which should be minimal. A review of our investment arrangements should save a few hundred thousand pounds per annum.
    I would be happy to assist that process, on an unpaid basis.

  • Brian Smith

    • February 10th, 2012 13:46

    Ah, but Shetland has to have ‘the best’.

  • Kevin t Robertson

    • February 10th, 2012 14:16

    I do not like when you hear that they are going to make such cuts on the young and old. The oil money is for Shetland and i think this is the only two groups of people who should not get cuts made to what they receive from the Oil monies. It is also the only two age groups that are guaranteed to be affected as we are all young and old at some point. I do not think this age groups doesn’t affect everyone in Shetland at some point.

    Marreel I may use this at some point but how many people will never darken the door. This has been a huge waste of shetland money and will the council stick to there no decision not to bail it out?

    Skate park i think it was stated in the paper that it had a membership of 40 odd that’s a very small percentage of the shetland community is it not to spend over a £140,000 on?

    Closing schools is not something i like to see. But who decides what schools to close as there seems to be a lot of smaller schools that is nearer to each other than the north ones they suggested to combine into one. I think there are alot around the empty Scallowa school?

    Why does the council always have to pay to get in consultants when they make a decission on it them selfs mostly against the advise of the consultant. Must be a cheaper way to do nothing than pay someone?

    How much does it cost to subsidies certain departments who get meals at cheaper rates? Why not stop this as all workers do not receive this and take it off the proposed £25 for the school bairns?

    If the Ferry fares are increased they should charge any council worker who resides on the mainland a parking fee to park in any council car park during each of there working days. This would add a huge figure of money to what ever they propose to increase the ferry fares by. And it would lighten the blow to Islanders who will be punished for living on there Islands?

    Councilors exspenses why do they get milage paid when all other coucil employees are exspected to pay there own travel to and from work. This is not equality when there is need for big savings?

  • Maureen Bell

    • February 10th, 2012 15:41

    Passive fund management certainly costs less but performance rarely matches active fund management.

    Why not, in line with proposed reductions in bonuses and pay to bankers, negotiate with current fund management groups performance based charges rather than set fees?

    Performance based pay is becoming much more acceptable by fund managers and better for investors.

  • Jonathan Wills

    • February 10th, 2012 17:49

    Brian Smith rightly criticises the way yesterday’s (Thurs) council meeting was run. Under our shiny new constitution, the Convener is supposed to chair such meetings and it is the council Leader’s job to present his and his committee chairs’ proposals for the budget. For reasons not explained to us, the Political Leader took over the chair. I complained about this but was overruled. Hopefully the next council will follow its own procedures. They do matter because it’s important to ensure even-handedness and allow opportunities for dissenting proposals to be outlined in detail, rather than being dismissed as “whims” and “making policy on the hoof”, to quote Cllrs. Cooper and Fullerton respectively when they dismissed my carefully thought out alternative proposals.

    Thanks to this weird way of running the meeting, we had to go through the whole list of proposed economies twice – once to decide which items we were willing to let through unchallenged and again to debate the more contentious proposals. My suggestion that we should start by looking at some “big ticket” items – such as my proposed amalgamation of the Chief Executive’s Department and the Corporate Services Department (saving at least £100,000) was also overruled. The idea was not debated until the very end, when members were exhausted by hours of debate over smaller, and socially very damaging, cuts which would not have been necessary, had we started by discussing some obvious, major economies. We ended up cutting a thousand here and ten thousand there when we should have begun by tackling the £100,000+ economies in ferry costs, economic development and, above all, in an unnecessarily complicated and expensive administration.

    Brian Smith is also correct to complain of the lack of political direction. My position, and that of other “opposition” members, is that these cuts are falling disproportionately on those least able to bear them. That’s why we suggested the council concentrate on its statutory duties and its social services. It is regrettable but true that, at a time of financial crisis (caused not so much by the Scottish Government as by the council’s political administration over the past decade), we must make economic development a lower priority. I am not ashamed to say that my political priorities are social care, child protection, education and community benefits such as the excellent Neighbourhood Support Worker scheme, day care for senior citizens and childcare. If it comes to a choice between these and more big loans for large and successful seafood enterprises, so be it.

    This council has set its last budget but, hopefully, it will be reviewed when the truth sinks in: there is no way to make such huge cuts in education and social care over only two years without causing chaos and distress. The new Political Leader, whoever he or she may be after May, will have to come to the council with more socially friendly policies – to make the savings in administration, ferries and economic development that could and should have been made yesterday, and to ensure that Shetland continues to be a caring community, as near to “socialism in one county” as may be possible.

  • Chris Smith

    • February 10th, 2012 20:04

    A newspaper, as opposed to a left-wing (Shetland Times), or even a right-wing rag, does not editorialise in news stories, as in:

    “It had been proposed to quite literally shut down and lock the doors on the parts of the care centres which are used by visiting old folk – many of them lonely and isolated – who come for meals, activities and warmth and companionship.”

  • Christopher Ritch

    • February 11th, 2012 10:26

    “above all, in an unnecessarily complicated and expensive administration.”

    Although I am glad that Jonathan now recognises where the real savings can be found, it seems odd that when Gordon Dargie made the same argument about school administration costs last year Jonathan was unwilling to consider it.

    It is a pity because the Uyeasound community could have been spared much chaos and distress, and some real savings achieved into the bargain. Perhaps Jonathan could compare the “savings” gained by closing Uyeasound Primary with the increased transport costs, or even the very expensive “blueprint for education” (How much has it cost so far?)

  • Clive Munro

    • February 11th, 2012 11:48

    Where to start? Well, how about the twisted logic that wants to cut £3m from education so that we can protect our reserves for future generations. Isn’t giving them the best possible education now the best way we can equip future generations to look after themselves when the time comes? As for Betty Fullerton’s apparent disdain for our “gold plated” ASN provision. Doesn’t she realise that’s kinda the point-it should be as good as it possibly can be! We may need to downgrade some services to silver or bronze but that’s definitely not one of them. She’s right about Town Hall weddings though, start charging £100 a quid a go for them and watch our problems disappear. Actually, those comments of hers about weddings illustrate perfectly what a petty, peacemeal approach Councillors seem to have taken to Thursday’s meeting. Surely the whole thing should have been preceded by a proper, serious debate about what sort of Shetland they wanted to see and then proceeded along the lines of how best to achieve that within the current economic climate. For me Brian Smith and others who warn of cutting too much too soon and tipping Shetland into a social and economic downward spiral are spot on. We should use our reserves to enable us to slow down the implementation of cuts and get to the stage a few years down the line where we maybe have few reserves but a sustainable economy. I’m personally sick of hearing about these bloody reserves: the Council reminds me these days of a miser dying of hypothermia because they can’t bear to spend the loot they’ve stashed under the floorboards! They’re more like a millstone than an asset as far as I can see and If and when they’re gone we’ll simply be like every other local authority in the country, and that’s fine by me because whenever i’m South I don’t see signs of impending Armaggedon everywhere I look. Then the next Council can do it’s proper job of concentrating on delivery of statutory services and stop giving out easy money to businessmen who’d rather risk our money than their own. We’ll still have The Charitable Trust and that can go back to serving the purpose for which it was created, and avoid the need for many of those mean spirited cuts in social and welfare provision which were proposed on Thursday. Mainly, it has to be said, by the same people who seem to think the Trust’s money is theirs to use on their own pet projects. Well it’s not, it’s ours.

  • Robert Lowes

    • February 11th, 2012 16:41

    The SIC could shave a significant cost from it’s ICT budget by switching their computers from Microsoft Windows and Microsoft Office and their expensive licenses to equivalent free software. Many councils across in the UK are now using variants of Linux and Open Office for their day to day needs. The city of Munich is migrating 14,000 computers to Linux, as are govt departments in Brazil, Thailand and Eastern Europe. An additional benefit comes from the fact that many FOSS (free open source sofware) packages have lower system requirements than their paid-for equivalents, which in turn reduces the spending on new hardware, as computers using them have a longer practical operational life. They are also capable of running Windows-only software for which no free equivalent exists.

  • steve barber

    • February 12th, 2012 19:15

    i work for the Council here in Cornwall, and we are well into this process, only we don’t have oil reserves to dip into – in fact the Council’s reserves, such that they are, have been untouched, so far – terms and conditions of Council employees have been cut, including mileage allowance, the freezing of salary increements and the reduction of annual leave entitlement – all very painful but agreed via a Union ballot to reduce the likelihood of compulsory redundancies
    As for Shetland, i lived and worked up there for a few years in the late 90’s – my children went to school there, and we admired the facilities on offer – even the highways were of a better standard than down here – and as for the leisure and care facilities!
    so i do think Shetland is a special place and that the Shetland people, as it is down to them through their elected members, need to think carefully as to how to proceed – try to protect the most vulnerable and to preserve the fantastic facilities that have been built up over the past few decades

  • Jonathan Wills

    • February 13th, 2012 23:46

    Christopher Ritch misunderstands me. Amalgamating small rural primary schools remains one of the few areas where the council can reduce costs while improving the standard of service. My concern is that all school budgets are being hit by spreading our dwindling income too thinly. So I will continue to support the amalgamation of small schools where the case is made, and I’m even willing to look at rejigging how our junior secondaries operate.
    Robert Lowes will be glad to hear that the council is already investigating his suggestion that we move our computers from Microsoft to open source software. That seems essential if we’re to make more use of remote learning in schools, for example, and have more SIC office staff working from home.
    The figures reported to today’s (Monday) Executive Committee are really very alarming: we are likely to need at least another £22.5m taken from the reserves to balance the budget in 2013/14, and that’s before we take into account those 2012/13 budget savings that are unrealistic (maybe £6m worth): the savings that won’t make it through the forthcoming “reviews” (which staff don’t have time to conduct properly, on top of their other work); the rather optimistic harbour revenue estimates for the coming year; and of course “contingent liabilities” such as the unresolved claim by Lerwick Port Authority because the council foolishly took legal action to stop dredging work at the site of the infamous Bressa brig. Tot that lot up and you’re getting near £40m that we might need from reserves, at the worst case, to keep the council running the year after next.
    Thereafter, it looks just as bad. The downward line on the graph isn’t straight: it’s a rapidly steepening curve, leading us into a financial abyss. All the reserves could be gone in five or six years, if we carry on like this. That would mean a permanent 10% reduction in council spending – bad news for everyone.
    Senior council office bearers must know this, yet they’ve just steered through a fantasy budget that victimises the least well off and ignores big economies like the ones I tried to get them to consider at last Thursday’s budget meeting.
    What will happen when Audit Scotland and the Accounts Commission spot the deliberate mistakes? Will they not ask why we didn’t set a more realistic budget? It will be too late to call the present administration to account. They’ll mostly be retired or turfed out by the electors, leaving the new council to face the escalating problems.
    If the councillors elected on 3rd May don’t call in this fantasy budget and review it urgently, we face the unpleasant prospect of the Government sending in commisioners to do it for them. Being a councillor isn’t going to be a lot of fun over the next few years. But hopefully some younger, brighter minds will stand for election and do what they can to save the council and its essential services to the community.

  • Christopher Ritch

    • February 14th, 2012 11:50

    What I do not understand is why Jonathan thinks there will be significant savings gained by closing small schools. Transport will never get any cheaper. The original “savings” for closing Uyeasound printed in the blueprint documents was almost quarter of a million pounds. The actual “savings”??? Compare these to the costs of the blueprint exercise (another unknown) and the social and economic costs to the community – it makes no sense to me.

    Uyeasound school used to cost a fraction of one percent of the Education budget, the other small schools which could be amalgamated will be similar. Administration costs amount to – how much? Last June, Jonathan said these were not a secret, but I have yet to see them made public. They might be 25% of the budget, + or – a few million, but the fact remains – meaningful savings will be gained by pruning the bureaucracy, not by closing schools.

  • Marina Thomason

    • February 14th, 2012 18:34

    If ANY savings can be made (and I agree with Christopher Ritch that transport costs will only increase) by amalgamating small schools this would be through cutting teacher numbers. It has been agreed by the council that national staffing levels will be applied after the summer break although I understand that this may be under review as headteachers are extremely unhappy about it and quite rightly so. In some schools in Shetland it means that their will be only 2 class teachers for a school of 50 pupils, each one teaching in a composite class of 3 or 4 different age groups.
    Why would anyone think that increasing the numbers of pupils to teacher ratio is improving the standard of service?


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