THE UK Treasury has allowed Shetland Islands Council into a special borrowing scheme which will save the authority at least £1 million over the next 40 years.
Lobbying with the help of local MP and Scottish secretary Alistair Carmichael has given the SIC access to the Public Works Loans Board’s certainty rate, which lets council’s borrow money at 0.2 per cent less than standard rates.
The council is now applying to the scheme to borrow £16 million to pay back its remaining housing debt after a deal was struck with Westminster and Holyrood last year.
The special rate will also apply to the £12 million the council will have to borrow as its share of the £36 million cost of building a new Anderson High School in Lerwick.
SIC chief executive Mark Boden explained that the council had not been allowed into the scheme when it opened for applications in November 2012 because at that time it did not know how much it would need to borrow until the long-standing £40 million housing debt had been resolved.
Since then the UK government has given the council £10 million, the SIC has written off £10 million and the council’s housing department has managed to save £4 million.
Boden said the savings had come through good management rather than staff cuts, with Shetland having some of the lowest housing management costs, highest levels of rent collection and lowest levels of arrears in Scotland.
“Now the debt is down to £16 million we have the capacity to do things like improve people’s property and maybe build new property which we couldn’t afford to do when the debt was £40 million,” he said.
“The extra £1 million we are saving can now be spent on good things for the community as opposed to interest payments.
“It’s a bit like moving your mortgage payments somewhere else so you get a better interest rate.”
Long awaited improvements to the council’s housing stock are already being made, he said.
New social housing will probably be built in partnership with Hjaltland Housing Association over the years as the Scottish government makes funding available as part of its commitment to give Shetland £10 million towards new builds following the housing debt negotiations.
Become a supporter of Shetland News
Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.
Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.
Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has over 380 supporters who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.
Your contribution will ensure Shetland News can: -
- Bring you the headlines as they happen;
- Stay editorially independent;
- Give a voice to the community;
- Grow site traffic further;
- Research and publish more in-depth news, including more Shetland Lives features.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.
Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.Support Shetland News