SHETLAND Islands Council has received a pat on the back from local government watchdog the Accounts Commission for its progress since receiving a stiff reprimand 18 months ago.
The SIC came under heavy criticism in 2010 after a public hearing exposed major flaws in the way Scotland’s wealthiest and most northerly authority was run, highlighting a breakdown in working relationships within the organisation.
That year the council handed its chief executive David Clark £250,000 to leave after just eight months in the post, arousing fury in the local community.
In a follow up report published today (Wednesday), the Commission says the council has a long way to go to become a best value authority and highlights “significant concerns” about its finance section.
However it praises the SIC for its achievements since Orkney Islands Council’s chief executive Alistair Buchan was appointed on a temporary contract in August 2010.
Mr Buchan said the council had already addressed the Accounts Commission’s main criticisms concerning staffing levels and weak management in the finance department.
This week, he said, the council hopes to announce the appointment of a new finance director following the recruitment of a new senior accountant recently.
For the past two months the department has been run by Brian Lawrie, the former finance chief at Fife Council, on a temporary contract after two rounds of interviews failed to secure a replacement for Hazel Sutherland.
He added that it was shame the council’s failure to submit a complete set of accounts on time last year had overshadowed the “good work” that had been achieved by finance staff.
“I think the council has made considerable progress on its financial management and we are well on track to achieving savings of £9.7 million this year, which is a major achievement for this council. It’s a shame the specific problems last year overshadowed that,” he said.
Mr Lawrie plans to present advice to councillors next month which could resolve The Accounts Commission’s other main concern, the failure to group the SIC’s accounts with the councillor-controlled £220 million Shetland Charitable Trust, which has led to them being qualified six years in a row.
Accounts Commission chairman John Baillie: “We welcome Shetland Islands Council’s prompt action and the progress it has made. It is encouraging that the council now has in place many of the basic but essential building blocks needed to provide best value.
“This positive direction and change needs to be continued and the council needs to ensure it has the capacity to do this. This is especially important as it faces considerable challenges in the future.
“Although good progress has been made and the council is improving, there are still problems that need to be addressed.”
These challenges include maintaining progress following the May local authority elections, and appointing a permanent replacement for Mr Buchan when his contract ends in October, though there is a strong possibility he will stay on for a further six months until April 2013.
The Commission has asked the Controller of Audit to prepare a further progress report in 12 months time, which reflects they still have concerns.
The full report can be read here.