Tough financial decisions ahead for SIC, councillors told

Councillors have been warned they face tough choices ahead as the authority grapples with a need to make efficiency savings to help maintain a healthy balance.

Elected members discussed a detailed report by finance chief Jamie Manson during the first instalment of a two-day full council meeting on Wednesday which saw most councillors gathered at the town hall, while others joined the discussion via video link.

The report highlighted a general fund overspend of just over £2million, largely caused by growing maintenance costs across the SIC’s ageing ferry fleet. 

The delayed college merger was also partly to blame, because it resulted in the council funding Shetland College and Train Shetland for longer than it should have done.

The net draw on reserves for 2019/20 stands at £21.722 million – up from just over £15 million the previous year.

Thrown in the mix is a 6.2 per cent drop in value of the council’s long-term investments, which experienced “negative growth” in the 12 months to 31st March – well under the anticipated average return of 7.3 per cent.

“The deterioration in the value of investments was largely as a result of impact of coronavirus on the global markets,” the report stated. 

The council’s investments experienced “significant volatility” due to the virus.

Vessel maintenance on the SIC’s ageing ferry fleet accounted for an overspend of £1.486 million, while costs attributed to the Shetland College and Train Shetland hit the council for a further £1.102 million.

The limitations of the virtual meeting software were laid bare at Wednesday morning’s meeting, with the majority of councillors taking part in the discussion in the main hall of Lerwick’s Town Hall. 

Following the discussion, and the individual questions and comments, posed a difficulty for those not present in the room.

Council leader Steven Coutts said that it was important councillors reflected on the context of the 2019/2020 budget. He added there had been a “failure” from the Scottish government to once again “fund key elements” of the local authority’s budget.

“In terms of budget, we have done particularly well.”

The word “unsustainable” came up time and time again, with councillor Amanda Hawick questioning whether  the SIC could continue to draw £20 million from their reserves each year.

“What is clearly unsustainable is the government treating the Shetland Islands Council and its people unfairly,” Mr Coutts said.

NO COMMENTS

Add Your Comment

Add Your Comment

Please note, it is the policy of The Shetland Times to publish comments and letters from named individuals only. Both forename and surname are required.

Comments are moderated. Contributors must observe normal standards of decency and tolerance for the opinions of others.

The views expressed are those of contributors and not of The Shetland Times.

The Shetland Times reserves the right to decline or remove any contribution without notice or stating reason.

Comments are limited to 200 words but please email longer articles or letters to [email protected] for consideration and include a daytime telephone number and your address. If emailing information in confidence please put "Not for publication" in both the subject line and at the top of the main message.

200 words left

logo

Get Latest News in Your Inbox

Join the The Shetland Times mailing list to get one daily email update at midday on what's happening in Shetland.