A landmark agreement to significantly cut the council’s historic housing debt has been signed off, paving the way for new homes to be built and lifting the threat of massive rent rises.
Councillors have given unanimous backing to a three-way deal between the SIC and Scottish and UK governments.
The total package from Westminster and Holyrood amounts to £20 million.
That will provide debt relief and support for much-needed future housebuilding projects. The SIC has already agreed to write off £10 million of the debt.
The debt, which grew out of the cost of meeting a growth in demand for housing during the 1970s oil era at Sullom Voe, stood at £40 million when a campaign was launched last year by The Shetland Times. Almost 2,300 people signed the newspaper’s petition before it was handed to to Scotland’s local government minister Derek Mackay in July.
Since the campaign was launched finance staff have been chipping away at that figure, getting it down to £36 million but it was still proving a burden.
Despite promises from governments of various colours over the years that the debt would be settled no resolution could be agreed.
A significant breakthrough ocurred in December when the Westminster government pledged £10 million to help address the debt situation.
The Scottish government has now entered into the agreement, prompting the announcement from the SIC today.
Today’s agreement means the debt now stands at £16 million. That was described by the SIC’s head of finance, James Gray, as “not a problem debt”. It will now be refinanced externally.
The news also means the threat of rent increases of more than 30 per cent has been lifted.
SIC leader Gary Robinson welcomed the announcement.
“This is a tremendous outcome. Our councillors and officers have put a great deal of energy and effort into reaching this point.
“The Shetland Tenants Forum was also closely involved, and I’m extremely happy that this means we will be able to maintain affordable rents for existing tenants. It also opens the way for much-needed investment in affordable housing.”
Convener Malcolm Bell added: “I’m very pleased that this process has led to such a positive outcome. I’d like to pay tribute to the UK and Scottish governments in bringing this matter to such a satisfactory conclusion – and particularly to the role played by our MP, Alistair Carmichael.”
• For more on the deal and reaction to the news see Friday’s Shetland Times.