The council is looking at a reduction in Scottish government grant for next year of over £3.8m – making a 10 per cent reduction of £9m over two years.
The reduced budget is part of a Scottish-wide reduction in support for local government of £350m for 2017/18. The SIC decided not to respond to the government’s offer at a meeting on Wednesday, while noting that it intends to accept it.
But the council slammed the way that the government wanted a reply by today when the council’s budget discussions only take place on 15th February. The Scottish government announces its own budget five days later.
Council leader Gary Robinson described the government’s way of doing business as a “silly game” and South Mainland councillor Allison Duncan said, “they are just holding a gun to our head”.
A motion proposed by West Mainland member Frank Robertson to accept the settlement but to make no further representation to the government received 10 votes compared to eight for an amendment proposed by George Smith that would add more detailed caveats to the “reluctant acceptance”.
Mr Robinson said earlier that the Scottish government was looking for an “indicative” position as of Wednesday’s meeting, which essentially meant nothing concrete, and said that opposition MSPs should be able to force some upward movement in the budget on the minority government.
The draft budget indicates a revenue settlement of £79.15m for the SIC for 2017/18 – down £3.8m from this financial year. Capital funding was to have been £6.942m, or 20 per cent more than 2016/17, but some of this is being withheld till 2018 to 2020, meaning an effective capital cut for next year of £76,000.
The SIC has the option to increase council tax by three per cent this year but this will only add £258,000 to the coffers. Additional income from properties in bands E to H would amount to £155,000.
Shetland community health and social care partnership will continue to receive £1.024m next year for integrated health and social care and a further £438,000 will be made available to deliver the living wage.
Finance manager Jonathan Belford told the special meeting of the SIC that the settlement was below earlier hopes but £1m above an earlier “erroneous draft” that had set the reduction “floor” at six per cent rather than the correct five per cent.
Councillors heard that it was a “middle of the road” budget in Scottish terms – meaning about average – and that if it was declined, any further offer was almost certain to be worse. Mr Belford recommended agreeing to the package.
Mr Belford’s report indicated that if the package was not agreed a revised offer would be made, but there was no information on how much lower the offer would be. The choice was to accept or reject what had been stated.
The take it or leave it approach had councillors fuming as there was no “discussion” to be done with Holyrood, which had effectively served up a fait accompli, subject only to its own budget alterations.
This provoked lengthy discussion among councillors about the government’s methodology and the significance of making a reply to the offer. Some councils had indicated that they were neither accepting nor rejecting what was on the table, but chief executive Mark Boden warned against this “ambiguous” approach.
The government had also erred by asking for a reply to its settlement from Mr Robinson, something that was not within his remit to make.
Not included in the financial settlement is funding for the inter-isles ferry service which has been the subject of a “great deal of work” with Transport Scotland and subject to additional funding.