New finance chief says books are in good shape
Shetland Islands Council had a “positive financial conclusion to the year”, councillors heard this week.
Members gathered to review the books for 2014/15, with finance chief Jonathan Belford saying the figures were a good base point for the current financial year.
The draft out-turn showed the council had exceeded its target for the year with a total draw of £2 million from its reserves to balance the budget. That was lower than the year target of £14.1 million.
The previous year £14.9 million was required to balance the figures and £21.5 million in 2012/13.
However, more work needs to be done to find savings and income, as the council’s reliance on reserves is expected to stay at an unsustainable level.
Mr Belford said: “It is positive to see from my point of view that there’s underspending or additional income across all directorates, and that provides a good starting point for 2015/16, which will of course be challenging.”
In 2014/15 the SIC spent £106.2 million of its general fund, less than its budget of £110.6 million, giving an underspend of £4.4 million.
However, depute-convener and social services committee chairman Cecil Smith flagged up underspends in community care services of £1.4 million.
“It may look nice on paper,” he said, but there were difficulties in recruiting staff.
“We have a real issue,” Mr Smith said, and that needed to be addressed.
The value of the council’s externally invested reserves stood at £278.9 million, up from £203.4 million in the previous financial year.
Councillors were told the increase in their value was down to transfers of £46 million and investment income of £29.2 million. The income showed a 14.3 per cent return achieved during the year.
North Isles councillor Robert Henderson asked if some of the extra cash could be used for infrastructure projects. Toft pier was “collapsing” and the troublesome road at Levenwick could be improved.
Mr Henderson said some of the reserve money could be used “to do jobs we’re not able to do at the moment”.
Political leader Gary Robinson said the reserves were tied up in the medium term financial plan. The council did not have an extra £75 million to spend, he said.
There was, for example, money tied up in the new Anderson High School, as well as money from the treasury for the historic housing debt.
“I don’t think we’re in such an advanced position as it is on paper,” Mr Robinson said.
Shetland South councillor George Smith also raised concerns about the road in Levenwick, noting that a bus had gone off the road there earlier in the week.
He said the council needed to look at addressing some of the situations raised by Mr Henderson.
Following the meeting Mr Robinson said he was happy with the reduced draw on reserves.
He said: “It’s a good position to be in because we do know that we have reductions in our grant from the Scottish government in the pipeline.”
• Full report in tomorrow’s Shetland Times.