Call for investigation into SIC financial management as councillor quits sounding board

An internal investigation has been demanded into how the SIC ended up in a financial mess following what one councillor described as a 10-year period of mismanagement.

Dissatisfaction with the council’s re-jigged democratic processes led another councillor to announce his withdrawal from a “sounding board” set up as part of the SIC’s efforts to streamline its processes and management.

It follows last week’s marathon budget meeting at which councillors agreed to cuts of £15.2 million and a series of reviews that will examine a whole swathe of further cuts in the coming years.

The SIC’s audit and standards committee resolved today to seek answers to the question that is foremost in the political arena given that even if it succeeds in making these cuts the authority will still be partly reliant on its oil reserves to fund revenue spending.

Councillor Jonathan Wills called for a thoroughgoing report to be ordered by new members of the committee elected in May, pinpointing exactly where the council had gone wrong over the past decade. He was backed by fellow councillor Gary Robinson who wanted to know how the SIC had ended up drawing £47.4 million from the reserves in the latest budget.

Dr Wills stated that the restructuring had uncovered “bitter things” about the council’s finances and demanded to know when the council had opted to gamble with the public purse. “We are now in the business of buying and selling shares on the market rather than living on the dividend,” he said.

Dr Wills said that the council’s restructuring did not go far enough and proposed the merger of the chief executive’s office and the corporate services department, with the chief executive taking over the role of the director of corporate services.

Mr Robinson added that the difficulty of moving amendments to proposals was not even a “school level of debate” and that the council’s submission on rural education to the Audit Commission had not even been discussed at the executive committee, but was nonetheless forming the council’s view as far as Edinburgh was concerned.

The executive committee was an example of the council operating “circles within circles”. Mr Robinson’s dissatisfaction led to his resignation from the sounding board which was part of the SIC improvement plan intended to “deliver real change”.

His letter to sounding board chairman Cecil Smith said: “It’s disheartening that having gone through the change process, committee meetings are being cancelled or postponed on a whim and little in the way of substantive business is being put in front of members when meetings are held. To me that would seem to go against what’s expected of good governance and make the whole improvement exercise a pointless one. I share the concerns already expressed by some long-standing members in respect of the new committee structure and the conduct of meetings.”

The move came after the committee had expressed gratitude to Audit Scotland and council officials for helping turn around a worsening financial situation. However Carol Hislop of Audit Scotland warned that the council was in danger of not submitting its accounts on time for the third year in a row, as the deadline had been moved forward by two months till September. She called on the council to seek help and advice from the auditors to help meet deadlines and requirements.

Dr Wills did not share the “rosy glow” with which council and Audit Scotland’s achievements had been received by the committee.

And it was alleged that the council was now in the business of rubber stamping plans that had been passed without proper scrutiny by councillors.

Councillor Laura Baisley said that a “gulf” had formed between the executive and back bench councillors and there was a “feeling of lost empowerment”. She added: “We are rubber stamping things rather than debating them. If they are not careful, new councillors will end up feeling like spare parts and this could lead to accusations of cabals and cliques.” She added that the drive to achieve change must not come at the cost of losing the experience and abilities of committee back benchers.

Committee vice-chairman Allison Duncan said that in the past certain aspects of council governance had been a shambles and there had been no alternative but to put a new structure in place.

But he was in no doubt where responsibility for the financial doldrums lay. “The answer is that the council have had a priority of spend, spend, spend, not save, save, save. The buck stops with the council,” he added.


Add Your Comment
  • Alan Skinner

    • February 16th, 2012 17:53

    Councillors Wills and Robinson have been councillors for four and five years respectively, so they have been not just witnesses to, but participants in, the financial mismanagement by the council of the last decade. They should be able to write the investigative report, not just call for one from the next council. They have been privy to all the financial information, or at least they should have been.
    Councillors are not just elected to represent our interests, but are also paid not insignificant amounts. In 2010/2011 the councillors cost us £485,025 in salaries and expenses. What do we get for our votes and our money?

  • Stewart Napier

    • February 18th, 2012 0:26

    Your article title is wrong. The issue is about mismanagement and not limited to financial mismanagement. Financial results are simply the consequence of management decisions taken by and deployment of those decisions.

    Note to the SIC (elected & exec)

    Successful management and financial results is achieved as follows:
    1. create policy that embodies the reason the SIC exists (Councillors – this is your job – stick to your meeting schedule, speak up on behalf of those you represent, discuss constructively and based on the facts debated, agree on policy that meets the long terms need of Shetland)
    2. develop both annual and longer term objectives/goals in line with this policy
    3. clearly communicate the policy and objectives to those individuals who are responsible for delivery in each area (to the SICs high level exec. team)
    4. make those execs. announce plans of what they are going to do to realise the objectives and communicate these plans openly (thus creating accountability)
    5. have employees objectives built around, each with an individual plan that feeds into the overall objectives
    6. deploy
    7. after deployment, evaluate what worked well and what didn`t
    8. each exec. then presents the findings of what went well and what didn`t – the key to long-term success is not in the result itself, but in the analysis and understanding of how the result was achieved (be the result good or bad).
    9. Based on the analysis of the result, set chelleging objectives for the next year and longer term.
    00. Have a leader who can identify what is needed, have them employ a suitable team who can meet these needs, get these people to understand why they are there and plan appropriately against it and hold them accountable to delivery.

    People should be allowed to make mistakes. If they learn from them, encourage these positives. If they don`t, replace them.

    Calling for reports on this and that is OK to identify failures or successes, however, if the end result and the reasons for this result is not understood by those who remain or by those who are newly employed/elected to replace those who were kicked-out, then nothing will change. Without consistency and accountability, improvement will not come. Same or similar failures will be repeated.

    It`s not about “spend, spend spend” nor about “save, save, save”, but it is about spending (investing) where needed and saving where needed.

    Policy that fulfils a need.
    Objectives in line with a policy.
    A plan to meet an objective.
    Deployment of the plan (spend where needed control where needed)
    Transparency of the deployment: progress and accountability.
    Reflection of the result vs deployment.
    Understand the result.
    Plan again using this experience.

    Clarity. Simplicity. Transparency. Accountability. Consistency. Leadership. Goal-oriented.
    Find someone who understands these things and you will get the best result that can be got.

  • Ted Knight

    • February 19th, 2012 10:06

    Direct rule from Edinburgh for a minimum of 5 years would seem an entirely appropriate proposition for Shetland.

    As for this “sounding board” cop-out nonsense – folk should check out the Shetland Times’ archive for an accurate non partisan timeline profile of the past decade’s money-blowing events should they wish to identify what went wrong and who was responsible for the shambolic state of affairs in the governance of Shetland.

    One couldn’t make it up? No need to – it happened.


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