The Citizens Advice Bureau helped clients with a total debt of over £2.8 million, figures in the local branch’s annual report have shown.
But funding for the CAB’s debt advice service – funded by local authorities in most other areas of the Highlands and Islands – is only due to run until the end of this financial year.
The news was highlighted by manager Karen Eunson at this week’s meeting of the recently-launched Tackling Inequalities Commission, which focused on major financial difficulties households encounter during its meeting on Monday.
It heard that a fifth of households are living in extreme poverty – defined as a household income of 40 per cent of the UK average of £36,400.
Based on the Shetland household average income of £33,934.23, that would be households living on £13,573.69 or less annually. Figures provided by the commission state that 2,087 households fall into that category.
Households reliant on benefits in a typical remote island setting only receive 30 per cent of what they require for an acceptable living standard, the commission has heard.
Evidence also showed food prices had risen by almost half since the credit crunch gripped hold in 2008. Electricity had risen a similar amount, but benefits and wages had failed to keep pace.
The commission met in private on Monday to respect the sensitivities of those giving evidence who may be in dire straits, but at a press briefing the following day Ms Eunson said much of her evidence had focused on debt – with a third of the issues brought to CAB centring on the issue.
“I was emphasising the cost to Shetland, not just to individuals but the wider Shetland community and economy, of not providing that service.
“Unfortunately, we’re in a position where we have no funding for that service beyond the end of March next year. That was my finishing point to the commission.”
According to CAB’s annual findings, clients with a total debt of £2,884,476 were seen during 2014/15 – representing an increase of £375,528 compared to the previous year.
The average debt was £14,405 per client, up from the previous average of £13,417.
Ms Eunson said Shetland – other than North and West Sutherland – was the only area in the Highlands and Islands not to have its debt advice funded through the local authority.
She said debt advice at the Market House was paid for through a “patchwork” of funding, largely made up of the Big Lottery. But that is only due to run until the end of next March.
“The council here used to fund the debt advice and that was pulled a number of years ago. We managed to pull in the lottery funding, but lottery funding is coming to an end. We have enough to see us through to the end of this financial year.”
She added: “The commissioners yesterday seemed to fully recognise need for the debt advice.”
Of the new debt cases – around 200, based on the average debt figure – brought before CAB:
• Thirty-three per cent are in full time employment.
• Thirty-nine per cent are single.
• Almost a quarter, 24 per cent, live on less than £6,000 per year.
• Seventeen per cent have a long-term illness, while the same figure have mental health issues.
• Thirty per cent of debt clients have rent arrears and 40 per cent have council tax arrears.
Following this week’s sitting of commissioners, Ms Eunson also highlighted the impact of government welfare reform changes.
She added ongoing benefit reductions had posed significant problems for people in work, as well as out of work.
“Fifty-two per cent of households in Scotland living in poverty are working households – so work is no guaranteed route out of poverty,” she said.
The commission also heard from SIC policy manager, Emma Perring, and The Salvation Army’s Angela Nunn. More from them and SIC political leader Gary Robinson in Friday’s Shetland Times.