ON THURSDAY Shetland Islands Council’s executive committee agreed to recommend a package of £12.5 million savings for next year – a cut of 10 percent to the council’s budget.The final decision rests with the full council next Wednesday.
A live report from the meeting appears below, but the key points are:
This year the council will save £15.9 million, £1.6 million ahead of its target.
If the budget is agreed on Wednesday, Shetland will have the best funded council services and the fourth lowest council tax.
Next year £27.7 million will be drawn from reserves, but only half of that is recurring spending.
An attempt to halve the 30 per cent funding cut to community councils was defeated.
The council will look at handing Viking bus station to the private sector, after receiving 518 signatures calling for it to remain open.
The community skip service will turn into a new paid service collecting bulky waste – up to six items will cost £30, with £10 concessions.
Talks are ongoing about amalgamating Shetland College and NAFC Marine Centre.
The council will consider borrowing £12 million to top up government funding to build a new Anderson High School at Clickimin.
5.18pm Boden says Cooper has hit on the two biggest risks to the savings target. The main risk is that some savings will come in late and staff’s job is to make sure they do come in on time. Robert Sinclair says there appears to be a healthy property market at the moment.
Stout questions the £500,000 buget for consultants. Gray says this a recognition there will need to be additional resources needed to help meet these challenging targets, but the consultants might be council staff, such as were used for the ferries review.
Robinson says it makes “emminent sense” to use people for a short period of time to do a specific job.
Bell says they have been dealing with the effects of the last council, and they are now putting their own imprint on things. He would like to paint the vision of what this council wil be like in 2017, what services will be delivered and by whom and only way to do that is to have a programme in place.
And that’s it folks. The meeting is over. All the savings have been agreed…for now.
5.13pm Theo Smith asks about Gray’s suggestion that the council might have to borrow £12m to build the school in Lerwick. Gray says if borrowing is the most economically sensible step, that’s what the council will do.
Cooper asks when savings will start and about the £1.75m receipt for sale of council assets. Gray says there is a recognition that savings may take time to be introduced and they won’t happen immediately on 1 April. He agrees that £1.75m is a challenge. £750,000 is expected to come from the sale of council houses, but from past experience that is not unrealistic.
5.07pm Now the final report – the budget book for next year. Gray presents:
Draw on reseves will be £27.7m next year. same as this year. But this year £23m are recurring costs, while next year that is reduced to £13.5m – “I am comfortable it is £27.7m. There is underlying progress because need to draw on reserves is £10m less and that helps get council towards financial self sustainability. This puts council 70 per cent towards it savings targets by 2017.
The council tax freeze mans Shetland retains fourth lowest council tax but best funded services. Also there is a contingency pot of money, which is held back on the assumption that certain things will happen. It may not be spent.
There is a spend to save pot of £2m designed to improve service efficiency, and £3m pot for economic development loans at commercial interest rates and with acceptable risk.
Harbour charge increase of 30% were absolutely necessary. £222,000 expected income is very little, and 30 % increase is lowest it could be.
Housing revenue £2.5m draw on resrves is not sustainable, but reasonable for one year to find solution to housing debt.
Anderson High School new build is a move not to use reserves for capital projects, but to use outside funding.
5pm Gray now presents the overall budget savings for the past quarter, saying the council has managed an underspend of £1.6m which brings the total savings for the past year to £15.9m. Good progress.
Robinson said staff should be congratulated. Stout amplifies this, saying what that really means is that our long term targets will be easier to achieve. Gray warns that some of these savings are “one off” but it is encouraging and will contribute to future years.
Boden says averaging it all out £1.6m is good news, as it means there will also be £160,000 interest on that which can be used next year.
4.54pm Regarding disposal of assets, Smith asks if Sinclair is confident £1.75m can be earned from the sale of council assets (predominantly sale of council houses) and £500,000 next year. He is, he says.
4.47pm Capital programme manager Robert Sinclair introduces his report on saving money. Theo Smith questions how achievable the budget targets are, and Sinclair is confident they can. Smith goes on to ask a number of specific questions about roadworks, Shetland College. heating replacement programme and landward Crudens improvements at Voe and Whalsay. “I believe you,” he says in response to most of the reassurances he receives.
4.37pm Cooper says many local businesses are looking for new courses to train apprentices. How much scope is there to discuss with industry the need for qualifications they are looking for, he asks. Grant says that is being looked at, and Cooper is heartened. “There is a real need to engage with industry.”
4.33pm Shetland College (including NAFC Marine Centre) cuts will impact on range and quality of courses, Allan Wishart says, and there are concerns.
Neil Grant says total budget is £3.4 million and £395,000 comes from council. Proposal is to reduce that to £295,000. Extra factors that have been added include cadet courses and music tuition courses, making the budget £120,000 short of being balanced. It is thought the “overshoot” could be offset by efficiency savings, and Grant thinks that is achievable.
George Smith says he is concerned that while we are conducting a review of tertiary education we are preempting that by making these savings. He would prefer if timing was more aligned because this review should identify “real efficiency savings”. Grant says there is flexibility in where and when savings are found.
Wills asks if review is looking seriously at amalgamating two colleges – Grant says yes!
4.25pm Harbour board now. 30% increase charges for tankers has not gone down well with the industry; charges for landing salmon are going up from £8.50 a tonne to £13.50 a tonne.
Wills congratulates the harbour board, saying it underlines the need to meet with the oil industry.
4.22pm Duncan says he knows someone who is interested in purchasing the Jarlshof toilets. That will be taken up on Wednesday.
Theo Smith – does £30 charge include VAT. Crossland thinks so. Much scratching of heads. No one knows.
4.19pm Cooper says he is heartened at the community discussions about council cuts and the willingness to find alternative ways of providing services. Can we look at ways of making it attractive for communities to do something for themselves.
Wishart says that has to be encouraged.
George Smith says one community council is keen to look at maintenance of public toilets in their area. Robinson and Cooper have had similar experiences.
Convener Malcolm Bell says a redesigned service could improve on what we have. He recalls skips filling up in 20 minutes, and thinks this £30 charge for bulky uplift with a £10 concessionary rate is a good idea.
4.15pm Crossland says his department will look at the idea of basing skips on council property, eg quarries, and using volunteers, but envisages problems.
Theo Smith asks about bulky uplift service. People woud be happy if a truck was used and people could split a £30 charge, but the current proposal is very vague.
Crossland explains people will phone the council, list six items for picking up, say where they will collect it using a spare open back essy cart with low loading. Staff will be redeployed from recycling service being scrapped. Estimated 15 to 20 pick ups a day – schedule a pick up day to make best use of time.
Wishart says there will always be ways around it – a big wardrobe could be used to put lots of things into and only be classed as one item. He things “over the banks” is over.
4.09pm Wills says the loss of skips will be an environmental disaster and will lead to people dumping bulky waste over the cliffs. He says it will cause uproar in the communities and wants further work done on this before Wednesday.
He thanks Wishart for work done on public toilets and Viking bus station, which should be kept in the public sector.
Stout says its a damnable endightment if we think we will overnight return to dumping things over the banks, especially in view of the Voar Redd Up. There is very little appetite for policing skips in community councils, and skip system doesn’t necessarily tick boxes as they get filled up so quickly. “27 minutes,” Wills said.
Perhaps there will be neighbourly gestures from 4×4 owners helping people take stuff to the dump.
4.04pm Wishart presents the environment and transport committee report. They are keen to keep the Viking bus station open perhaps by puting it into the private sector.
Tingwall airport is cheaper to run than passing the service to Sumburgh. Skips are being looked at, but there are technical issues involved about the skips are used in Shetland. Progress is being made on public toilets.
Coutts says he saw what community councils do on skips and bulk waste. They have manned skips for two hours a day, as opposed to unmanned skips.
Infrastructure director Phil Crossland says community councils were not consulted, but thay have looked at “staffed” skips.
3.59pm Education chair Vaila Wishart presents the childrens services report. Further work is going on to save £500,000 from youth services, with a report in May.
Wills says there was no consultation before £74,000 was saved by cutting the additional support needs summer playscheme. He says he will propose that money is saved from community planning and development at the full council on Wednesday.
Boden suggests the best way of dealing with that to propose taking the money from reserves. Wills said he will not ask for that money to come out of any specific budget. “This is a very serious situation,” he says.
3.49pm The development department report is up for discussion. Wills questions why marketing and Promote Shetland are not amalgamated. Development director Neil Grant says they have save £100,000 as requested – Promote Shetland will get £400,000, with another £100,000 going to SIC marketing.
Wills asks about putting the planning department out to tender. Grant says they are competitive. Wills says he hopes the planning department will stop harrassing Bressay primary school about putting up signs. He will demand to know how much this has cost and will publish the answer he receives.
Theo Smith (Shetland West) says building standards could be done in Southampton. It costs us a tremendous amount of money and could be privatised.
Robinson says government is reviewing building services to bring in an e-building standards service. Mnister is touting our service where improvements are being made.
3.43pm The social services report including a five per cent council house rent rise is agreed without any debate. There is to be discussion between the council and the recreational trust about the future of the youth hostel.
3.40pm The 30% cut is agreed by seven votes to three.
George Smith moves that the corporate services budget takes an extra half per cent cut to save the community councils from taking a hit. Cooper says that should have been argued earlier, Smith hits back saying he has been arguing for such things for years.
Robinson says he is disappointed at the way Smith has presented this at the 11th hour.
Smith gets two votes, against seven for keeping the 30% cut.
Robinson worries about how long this meetng is going to take.
3.28pm Duncan says he can find many places to save hundreds of thousands: “Tingwall airport – closure. As simple as that.”
Some comm councillors are thinking of resigning, he says. They have had a 50% pounding over the years. They need a long term plan, but if you go ahead with this you will find voluntary section will not support you as you hope.
Robinson says not all budgets are being cut by same percentage. The amenity trust budget being cut by 20 per cent, includes 100% cut to architectural heritage. “We need to get this into some kind of context and we are not being bad. If they can do things for the council we will ring fence funding for that.”
We put massive amount into comm cls. Average across scotland is £500/comm cl. I think with £150,000 budget we are putting in masses of funding and we won’t see comm councillors leaving in droves. “I don’t buy that argument.” If we cut savings £20,000 here and £20,000 there, it will add up to millions.
3.23pm Shetland Central member Davie Sandison says comm cls have already taken a 10% and a 40% hit, and are not ready for another 30%. Wills says this would mean the overall cut would be 60%, which is disproportionate.
Lerwick North member Allan Wishart is getting ‘deja vu’, saying in the past SIC has pulled back from the cliff. We are facing a financial crisis and should not forget that. My fundamental concern is there will be there will be a whole loda of other issues which will put us into trouble. He has not received one letter about comm cl cuts, he doesn’t believe they are not aware of the cuts.
Stirlingshire have £850 for their individual comm cls – “we should get this into perspective”. We should “get back to basics” and deal with our budgets.
3.11pm Duncan suggests 30% cut is too far and will lead to a loss of community councillors. He suggests the cut be lowered to 10%. Wills said he will back it if it goes up to 15%. Duncan accepts.
3.03pm Cooper asks about the future of the graduate placement scheme, which is to be suspended. Cooper suggests “marrying” graduates up with some local “go ahead” companies. Development director Neil Grant says there has been a reduction in apprentices in local businesses, and it is being looked at in relation with tertiary education.
Cooper says we could lose graduates from Shetland unless we act fast and we have achieved great things with some graduates in the past. “We can’t mess around with this,” he says.
George Smith asks if suspension was politically driven or financially driven? Ferguson reminds members that original priority was those young people who might struggle to get into work, rather than graduates who would be in a better position to find work.
Robinson says we should be doing everything we can to get graduates back into Shetland, but to get them working the private sector. Cooper suggests this goes back to the development committee for further discussion.
2.54pm George Smith asks how much is 30% – Gray says community council budget is roughly £200,000, so 30% is £60,000. Smith says he may well have an amendment.
Robinson asks if we are asking comm cls to do more, could they receive more money. Ferguson says that is being looked at.
Cooper says if we commission services from them, that doesn’t give comm cls any more to dispose of “as they see fit”.
Wills asks if SIC is cutting 30% over three years, why are comm cls being asked to take 30% in one year. “It doesn’t seem equitable.” Gray says comm cls “discretionary grants” are easy to cut quickly and to give “certainty”, there wouldn’t be any more cuts. Ferguson adds that comm cls funding is higher in Shetland than elsewhere and comm cl discretionary funding is low priority.
2.50pm Finance director Gray presents the corporate services budget.
Shetland South member Allison Duncan asks about a meeting with Citizens Advice Bureau about funding for debt advice. Gray said it was agreed that the debt advice service could be funded for an extra 12 months to give CAB time to put in claim for recurring funding from the National Lottery. This will be reviewed in six months.
Lerwick North member Michael Stout asks about community council funding. Gray says looking at 30% reduction in fudning to community councils. Discussions are ongoing with comm councils about this.
Corporate services director Christine Ferguson says there has been a seminar with comm cls; there is an acceptance that there is lots to explore but comm cls are all in different places. Also starting to discuss with community planning staff about taking that forward.”Very much work in progress.”
Meanwhile 30% reduction is to go ahead.
2.40pm A long and complicated presentation by Sandra Pearson, safety and risk team leader, about the best form of insurance the council should be looking at in the future in an “increasingly litiginous society”. She presents three options to prepare councillors for a bigger report on 13 March.
‘Disaster only’ insurance appears to be the cheapest option, but Lerwick South councillor Jonathan Wills is concerned that a situation like the Bressay bridge fiasco which cost the council £5m is covered. This will be built into the analysis, Pearson says.
Legal chief Jan Riise says this issue is being looked at nationally; but suspects bad professional advice is not covered by ‘disaster only’ insurance cover.
Alastair Cooper raises the question about Sullom Voe, if a tanker sank and blocked the harbour it would be a local disaster, but would not be covered by ‘disaster only’ insurance and therefore such marine issued should perhaps be separated.
2.21pm Robinson thanks staff for making £500,000 more in savings from central administration than was originally targetted.
2.17pm Shetland South member George Smith questions procurement savings, saying that it looks like the forecast £1m saving has been reduced to £250,000. Capital programme manager Robert Sinclair and Gray says it’s more complicated than that.
Smith says previous reports said we should be congratulating ourselves on procurement targets, and is wondering what benefits are being had from being a member of Scotland Excel. Sinclair says there are benefits, but accepts there is more work to do.
Robinson asks if we need to be smarter.
Chief executive Mark Boden says we don’t have a system to look at this properly, and the council is looking how to tackle this.
2.08pm Finance director James Gray says the return on the council’s investments is £4-5 million better than if it was not invested through the fund managers.
Leader Gary Robinson explains that this is four times the cost of the fund managers.
2.04pm – The meeting starts with a petition signed by 518 people calling for the Viking bus station to be kept open.