At the edge of the precipice
SHETLAND Islands Council is to call on the public to help the local authority pulling away from the edge of the financial precipice.
With the bulk of the radical management restructuring planned to be completed during this week, the council’s focus will very quickly turn to its desperate financial situation.
The SIC must permanently reduce its budget by at least £18 million, or 13 per cent, over the next two years.
To achieve that, a reduction in services as well as job cuts, such as the 87 that have not been filled since the beginning of the year, are seen as inevitable.
Chief executive Alistair Buchan said that the council and the community it serves had a “shared interest” in getting this right.
“The financial situation now is extremely serious and the decisions that will have to be made will have a direct impact on every member of this community.
“The community has the right to be consulted, and I think the community has also a responsibility to put across its views as part of this process,” he said.
He admitted that he was fully aware that there was “a lot of consultation fatigue around in the community” and also accepted that the local authority was regularly the target of cynical comments, but insisted that now was the time to pull together.
Describing the SIC’s financial situation in the starkest terms, the chief executive said that no one should make the mistake of thinking that “we can carry on the way we are”.
“The reality is that the council’s reserves would be depleted in a very short period of years.
“If we had to do all this in a rush I would shudder at what would happen to Shetland.
“I agree with those who say that we should take a planned and strategic approach to changing the profile of our spending, and have proper regard for the social and economic impact in the community.
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“That is why I am addressing things like management restructuring at the speed I am. It is about making sure that we don’t go over the edge of the precipice, frankly. It is as serious as that. We have to rein this in now,” Mr Buchan warned.
He added that officers were making good progress in identifying savings in the current financial year. Already £7 million of the target of a £9.4 million reduction in the 2011/12 revenue budget have been identified, of which £4 million would be recurring savings. A further £5 million has been earmarked to be slashed off the capital budget.
The council has also set up a one off £5 million capital spend-to-save fund to finance efficiency work.
Mr Buchan said that he would achieve the target of reducing the council’s wage bill for top management by £1 million this year.
As part of that process the number of senior position at the SIC is being reduced from 75 to 38, five director and 33 manager posts.
All candidates for the 33 manager posts will have been informed by Wednesday this week with an announcement expected immediately thereafter. It is understood that 18 of the 33 posts will be appointed through matching with existing posts.
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