SHETLAND Islands Council is enjoying a pre-Christmas victory celebration after winning a campaign to keep its powers to support the local economy.
However council leader Gary Robinson said the campaign is far from over to protect Shetland’s funding regime in the future.
Early this year shockwaves rippled through the local authority and business community when Brussels announced Shetland was being pushed off the map for regional aid.
While the rest of the highlands and islands could continue to receive public funding as high as 40 per cent for business projects, Shetland would only be allowed to hand out 20 per cent grants – a major blow for comapanies wanting to expand or start new ventures.
A top level council campaign to change the ruling won support from both Scottish and UK governments.
European commissioner Johannes Hahn also backed the islands following a visit in September where he suggested Shetland could be held up as an example of how best to use regional economic assistance.
That month the European Commission indicated it would be changing its stance on the issue, which was confirmed on Thursday when a new assisted areas map was published for the next six years from July 2014.
The problem arose because Shetland’s vibrant economy inflated by current oil and gas activity indicated higher levels of prosperity than the rest of the highlands and islands.
As a result the Shetland mainland was being ranked alongside major European cities like London, Paris and Frankfurt, rather than the likes of Orkney and the western isles.
Robinson said the council now must work hard to ensure such a threat is never repeated.
He explained the fundamental problem lay in the EC’s criteria for assessing areas for funding.
“We have resolved this issue but we can’t be complacent. I think if more work had been done on this prior to this year we wouldn’t have had so much catching up to do.
“At the moment they only consider economic and social cohesion based on a region’s gross domestic product and its level of unemployment.
“I think there should be three criteria, including territorial cohesion that takes into account distance from markets and the high cost of living.”
Robinson said the current council is actively engaging more with Holyrood, Westminster and Brussels than previous councils.
He hopes to have Shetland gaining similar status as other remote island groups in Europe such as the Canary Islands who enjoy far greater transport subsidies.
“We have to start tackling some of the things that cause the high cost of living in the islands, which we have shown is anything up to 40 per cent higher than the Scottish mainland, and transport is one of the big ones.”
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