SIC political leader Gary Robinson has hailed a budget announcement that the UK government will stump up £10 million to patch up Shetland’s historic housing debt.
He said today that two-thirds of a three-way settlement were in place and pressure would be maintained on the Scottish government to make good on its earlier £10 million commitment.
Earlier this week Westminster came under fire from councillors for stalling on providing its share of cash to the council, which ran up heavy debt on house building and associated costs during the 1970s oil boom.
That criticism prompted a response from the isles’ MP Alistair Carmichael and yesterday the £10 million announcement was made at Westminster as part of Chancellor George Osborne’s Autumn Statement.
Without the UK input, councillors heard at an executive committee meeting on Monday, there would be no new council houses built in Shetland for 25 years.
Mr Robinson said: “We are clearly delighted that the lobbying we have been engaged in for over a year now has finally paid off and we have been granted £10 million from the UK government in recognition of the difficulties we have had for many years on the historic housing debt.
“Of course it is just one part of the jigsaw. There’s a decision to be made in the council next Wednesday that would see the council pay off £10 million.”
Social services committee chairman Cecil Smith said it was extremely welcome news and that the council had taken every opportunity when talking to the Scottish and UK governments to highlight the significance of oil and gas developments to the community, and the impact of the historic housing debt. It was “very heartening” to see Shetland’s contribution to the national economy recognised at the highest level.
Mr Smith said: “I would like to pay tribute to the work that has been done by our officers, and my fellow council members, to help resolve this situation. I’d also like to thank our MP Alistair Carmichael, who has worked so hard on our behalf.”
Mr Carmichael also welcomed Mr Osborne’s announcement that the money would be in recognition of the vital contribution that the council makes in supporting the oil and gas industry.
He said: “The council asked for £10 million to address the ongoing issue of their historic housing debt and the Treasury has delivered. I am delighted that we have been able to secure what the SIC asked for. This has been far from straightforward. If it were easy I am sure it would have been sorted years ago.
“It has ultimately been resolved because there has been a political commitment within the coalition government to recognise Shetland’s contribution to the national economy and see us treated fairly. We have reached that point now and the SIC are being given the money they requested.”
The money will come in two £5 million lump sums for “infrastructure development” in the 2014-15 and 2015-16 periods respectively and will be given to the Scottish government. The money will be ring-fenced to ensure that it is given to the SIC.
According to Mr Carmichael the funding will be dependent on the Scottish government matching the commitment, but the Treasury is examining how to ensure the money reaches the SIC even if the Scottish government “refuses to contribute”.
He added: “Now that we have delivered this £10 million I would expect the Scottish government to do the same. They have never been slow to deliver an opinion on this matter. They now need to put their money where their mouth is.”
Mr Robinson said that pressure would be maintained on the Scottish government until it comes up with its own budgetary statement.
He said: “It was agreed the final part of this was for the Scottish government to come up with £10 million for new housing investment. That way all three parties will contribute to a lasting solution to something that has been a problem.”
A report tabled by finance director James Gray earlier this week stated that writing off £10 million of debt will cost £575,000 in lost investment income for the council. The alternative would have been for the SIC to raise council house rents by 35 per cent next year, rather than the five per cent the executive committee recommended.
SIC political leader Gary Robinson at the same meeting said it was “a disgrace” that the council alone was having to shoulder the burden and that it was time for the governments to stump up.
“Both the Scottish government and Westminster are well aware that anything from the Scottish government is useless without a Westminster contribution,” he said.
Environment and transport committee vice-chairman Michael Stout had expressed his “anger and resentment” at the grossly unfair situation where Shetland was bearing the burden for providing a national asset. “We have Westminster in particular standing there with folded arms and refusing to help,” he said.
This year The Shetland Times ran a campaign over the housing debt and the newspaper’s “drop the debt” petition was supported by more than 2,250 people before it was presented to Scotland’s local government minister Derek Mackay in July.