SHETLAND Islands Council is planning to ask the public how to address its current financial crisis amidst talk of major cuts to jobs and services as the oil rich authority seeks to slash its spending by around 10 per cent.
However local government trade unions have questioned the need to cut so far so fast, saying they have been given no explanation despite repeated requests.
Months of discussion on how to slow down council spending have already seen several measures to save money brought in, including a reduction in senior managers and school closures.
Despite these measures, acting head of finance Hazel Sutherland has warned that this financial year the council will draw £47 million from its reserves, reducing its oil funds to £219 million, well below the agreed minimum of £250 million.
Now council leader Josie Simpson is calling on fellow members to back plans to cut spending by a huge £26 million over the next two years to bring the budget back into line, when senior councillors meet next Monday.
He wants to build the reserves back up to £250 million, which would give the authority an estimated income of £13 million a year to spend on “extras” that other councils can not afford.
“What this would mean in practice would be a very difficult budget exercise for the next two years,” Mr Simpson said.
“Talking cash, what this means is that we will need to find about £26 million over a two year period. When we take off the savings that we have already achieved, we are looking at about £18 million to £20 million still to find.
He then wants to hold a series of public meetings starting next month to see where local people believe the savings should be made.
“Council members will need to take difficult decisions in the months to come. We are committed to exploring all these issues with the local community.
“We want to explain the financial choices which the council has and to hear from folk what is important to them when the council comes to discuss changes to services. We will be arranging public meetings at the end of October to discuss this.
“The council provides lots of services, for a whole range of reasons, from protecting some of the most vulnerable folk in the community to supporting economic development projects.
“Everybody will have their own ideas as to what needs to change. What I want to say at this stage is that we are committed to working with our staff and local communities to make the best choices we can to help Shetland remain a safe and vibrant community to live in.
“By working together and talking through all the issues, I am confident that we can get through this difficult period and set in place a plan to put Shetland on a good financial footing into the future.”
However trade union leaders say they have already held discussions with management and been given no explanation of the rationale behind the proposed cuts.
Unison branch chairman Brian Smith said: “The unions have been pleading for months for the council to explain why they need this level of cuts in such a sort period of time.
“We have asked if the council has explored the implications for the local economy of that type of massive cutting and I am afraid we have got absolutely nowhere.
“The most that we have got is a half page document from the development department saying Shetland’s economy is in a good state and therefore is able to withstand massive public service cuts.
“We have had no explanation at all about the timescale, why it needs to be done so quickly. The joint unions are meeting them to try and thrash out some answers to these questions next Tuesday.”
The council currently employs 2,362 full time equivalent staff, just over one quarter of Shetland’s entire workforce.
Its annual capital spending is considered one of the key drivers of the local economy, boosting the construction, civil engineering and professional services industries.
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