THE GOVERNMENT and island councils have hailed progress in talks aimed at reaching a deal to devolve more powers after a ministerial working group met for the twelfth and final time ahead of the Scottish Parliament election in May.
Transport and islands minister Derek Mackay and local government minister Marco Biagi joined politicians from Shetland, Orkney and Western Isles councils in Lerwick on Monday.
Afterwards SIC leader Gary Robinson said talks had “come a long way in a few years” and the councils looked forward to seeing legislation making its way through parliament later this year to “strengthen our communities and put them at the forefront of Scottish life for the future”.
He hailed a “really positive discussion” that was in-keeping with the tenor of the previous 11 sessions of the working group, adding he would “hope to see some of this feeding into the Islands Bill, and also into manifestos for May’s election”.
Mackay said it would now be down to ministers of the new government – almost certain to be SNP-led – to “determine how they wish to proceed”.
Robinson said areas of progress included devolving control over Crown Estate revenues from the seabed – “one of the key planks of our campaign from the outset” – and transport.
A “STAG” study into ferry routes within Shetland is being conducted and should conclude in June or July. Robinson hopes that will be followed by a new funding solution, particularly for the capital cost of replacing ferries and terminals.
“I don’t think it’s any secret that both Orkney and Shetland are in the position where we can just about afford the revenue costs of services,” Robinson said, “but we have very little at all in the budget for capital replacements.
“That’s something that we’re keen to move on, because as these assets get older they also become less reliable and I think we’re starting to see that already with some services.”
Mackay said the SNP was committed to “fairer funding” for ferries, but that could only be defined once a detailed picture has been built up.
“We’re absolutely committed to ongoing dialogue,” he said, “and that timescale is important because we’ll have all the facts before us in the summer to make a well-informed decision.”
He would not be drawn on whether the SNP manifesto for May’s election would contain a commitment to easing island councils’ ferry bills.
Meanwhile, Mackay warned that the UK Government’s position in negotiating a new fiscal framework with Scotland could jeopardise plans to devolve management of seabed revenue up to a 12-mile nautical limit to island authorities.
“What we were discussing today was regulation and management… how we pilot that and allow greater involvement,” he said, “but we absolutely need that transfer to come from UK Government to Scottish Government.
“That is in danger now because of the UK Government’s position on the fiscal framework, and the first minister has made clear that we are not going to sign up to an arrangement that structurally reduces Scotland’s budget.”
Also taking part in the talks was local government minister Biagi, who defended the funding settlement which saw Shetland Islands Council lose out more in percentage terms than any other Scottish local authority, sparking stern criticism from SIC councillors.
“South of the border, over three years, they cut 27 per cent off of local government budgets,” Biagi said, “and as a result of the Barnett formula, every time the UK Government cuts funding in England there’s a corresponding cut in funding to Scotland.
“We’ve been able to protect local authorities in Scotland from anything like that level of reduction and they’re in a challenging but, I would say, fair settlement position at this point that is just a one per cent reduction in overall gross expenditure.”
Asked why Shetland ended up with a bigger proportional cut than other areas, Biagi said accounting for local government was “quite complex” but Shetland still received the “second highest per-head spend in Scotland”.
“We have a mechanism that reduces the movements year-to-year, keeps those authorities used to receiving high allocations in that sort of territory, so Shetland was on the floor, minus 4.4 per cent, but so was the likes of Glasgow and Edinburgh, and [it] remains per-head one of the best funded in the county by a long way.”
Robinson welcomed councils being handed more control the collection of business rates, though he feels that “can still go further”, while he remains disappointed that council tax was once again frozen and is looking forward to “seeing some proposals to move away from the current status quo”.
Biagi pointed out that the SNP had sought to reform council tax in the last parliament, but could not get a majority behind an alternative system.
He said the SNP had honoured its 2011 manifesto commitment to freeze council tax and consult on finding a “fairer method of paying”. The government remains committed to putting forward a proposal for “substantial reform” before parliament shuts down in less than five weeks’ time.
“In order to reform it will have to come in stages,” Biagi said, “but we have been very clear since the publication of the commissions report that we want a system that reflects the principles of being broader, fairer and more empowering to local democracy, and those are the principles we will take forward.”
Robinson said it was right for the change to be a gradual shift because “quite evidently some people would be extremely uncomfortable if there was a revaluation and your house that was worth whatever it was in 1991 is now going to be taxed at a much higher rate.”
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