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Market uncertainty affects SIC grant uptake

UNCERTAINTY surrounding Britain’s exit from the EU and in the oil industry has led to a low number of businesses asking for development grants from Shetland Islands Council this year.

Figures show that the SIC’s economic development budget has a projected underspend of £357,000 for 2016/17, and this is largely due to a low demand for grants from local businesses.

The numbers, which will be presented to the council’s development committee on Monday, show that around £275,000 of the underspend is due to the funding situation.

Economic development manager Douglas Irvine said that while demand can’t be predicted, uncertainties in the financial market have put off some businesses to applying for grants.

Funding is given out by the council to “stimulate local economic activity by supporting individuals, businesses and organisations to turn ideas into commercial reality”.

“We do have several projects in the pipeline here in Shetland, and there are some businesses looking for more stable market conditions to invest in,” Irvine said.

“They’re a bit uncertain at the moment, in comparison to where it’s been.

“There’s three main things worrying businesses at the moment: where’s the oil price going and what impact will that have on development around Shetland and what impact will that have on businesses?

“The second thing is: where is all this public sector funding cuts going to lead to, and what impact will that have. And the third thing is Brexit, and what impact will that have on external markets.”

Irvine added that some of the grant budget goes towards match funding for businesses and organisations applying for European and government assistance, but there have been delays in some of these schemes starting up this financial year.

“For example we have quite a strong interest in LEADER and the FLAG [Fisheries Local Action Group] funding, but they’re only starting now, so we know we’re not going to be spending this year’s budget – it will be a commitment on next year’s budget.”