SHETLAND Islands Council is still spending between £50,000 and £60,000 a day more than it can afford, according to its finance chief James Gray.
On Wednesday morning councillors reaffirmed their determination to cut spending to a sustainable level by the end of this council in 31 March 2017.
At the meeting Gray presented the SIC’s medium term financial plan which requires sticking to tough budget targets this year and saving a further £10.5 million over the next three years.
Councillors also agreed to raise the floor on their reserves from £125 million to £150 million, and to introduce a £15 million contingency fund to help smooth out future investment returns.
There was some rare positive news from the head of finance that the reserves had earned more than expected on the money markets.
Gray said that the 14.6 per cent return had been “exceptionally high”, the additional cash having been put into a special fund to cover for years when returns fall below 5.75 per cent.
He added that raising the reserves threshold by £25 million meant that the local authority could earn an extra £1 million per annum to be “spent on services to the people of Shetland in perpetuity”.
Political leader Gary Robinson told the meeting that after years of over spending this council had the real chance to get its budget under control again.
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