Shetland Islands Council is to receive a major six figure sum to help clear its housing debts. However, political leader Gary Robinson has described the £840,000 from the Scottish government, which will be paid until the end of the parliamentary term, as a “sticking plaster”.
Plans were announced for the funding to help wean the SIC off the government’s housing support grant, which will be abolished from next April.
The council uses its funding to help plug the massive £40 million housing debt which it built up in the early years of the oil era at Sullom Voe.
It is the only Scottish local authority which still receives the funding. Demand for the revenue grant has dwindled throughout the country as extra funding has become available.
Mr Robinson said more money was needed in the long run, although he said some help for housing was better than none at all.
“I’m disappointed that the housing support grant is being phased out, but we were the only remaining local authority in Scotland still in receipt of it,” he said.
“We now need to redouble our efforts to get the outstanding housing debt paid off, which is somewhere in the region of £40 million. The housing support grant was used to service the housing debt.
“The funding of £840,000 is a short term sticking plaster, but we could have ended up with a situation where we could have got nothing beyond next April. Any chance to secure additional funding is to be welcomed.”
Mr Robinson said it was “not a significant enough” contribution to stave off rent increases for council tenants.
Earlier this week MSP Tavish Scott tabled an amendment in parliament seeking the government to reconsider the threat to the housing subsidy. But he withdrew the amendment after hearing the deal had been struck.
Mr Scott said: “Can I commend the minister for making that phone call. I will wait until I hear the details before I understand what that will mean for tenants but, believe me, if the leader of Shetland Islands Council has accepted the deal that will be good enough for me.”
Regional list MSP Jean Urquhart welcomed the announcement. She said: “I was delighted to hear that the Scottish government and Shetland Islands Council have reached an agreement on an issue that was causing concern in the islands.
“I was equally pleased that the Scottish government listened to the concerns of local tenants and put in place a package that will help the council in tough economic times.
“We must now focus our attentions on holding Westminster to their promise of writing off Shetland’s historic housing debt, whose repayments continue to cripple both the housing situation and Shetland’s finances as a whole.”
Making the announcement, housing minister Margaret Burgess said: “Ending the housing support grant was important for the whole of Scotland, as it has become and outdated part of the system.
“However, we were aware the Shetland Islands Council, as the only local authority still in receipt of this grant, might need support if this change was to happen.
“As a result we have agreed financial support to help the council adapt. I hope it will help the council keep any future rent increases to a minimum.
“It also means the Scottish government can concentrate its resources on helping social landlords across the whole of Scotland to increase the supply of social housing.”