SHETLAND Islands Council has been handed a £3.8 million budget cut after reluctantly agreeing to the Scottish Government’s latest local government settlement.
Its revenue funding for 2017/18 stands at £79.15 million, a reduction of 4.6 per cent on its 2016/17 settlement, which will increase pressure on public services and looks set to result in council tax rising for the first time in a decade.
Scotland’s 32 local authorities have vented their frustration with the SNP government for its insistence that councils had to agree to the terms no later than Friday (20 January).
A report from finance chief Jonathan Belford recommended accepting the deal, because any refusal would result in a revised offer that “will undoubtedly be less favourable”.
That gained councillors backing by a narrow margin of 10-8 during a special SIC meeting at Shetland Museum on Wednesday morning.
Belford said the overall funding package was ‘considerably lower” and “while not unexpected the scale of the reduction in resources continues to present an extremely challenging position for the council”.
Taking into account the previous year’s funding cut, the value of its revenue grant has fallen by almost a tenth (£9 million) since 2015/16.
Work aimed at addressing the government’s commitment to finding a fairer means of funding inter-island ferry services has been conducted with Transport Scotland, meaning it does not form part of the overall local government settlement.
Capital funding would have amounted to £6.942 million – a 20 per cent rise on last year – but with £1.2 million of that being withheld until 2018-2020, there is an effective cut of £76,000.
A three per cent rise in council tax, because of the relatively small number of properties in the islands, would only raise an estimated £258,000 – barely a fifth of the deficit the SIC needs to plug.
Nevertheless, even with council elections imminent, council leader Gary Robinson says he personally feels raising council tax – which the SNP had frozen amid various attempts at reform since 2007 – by the full three per cent will be necessary.
“My personal view is I think we will have to raise council tax,” he said, “if we wish to maintain the level of service that Shetland enjoys at the moment.”
That decision will be taken when the council agrees its own budget on 15 February, and Robinson said he believed the government had based its local government settlement on the assumption that councils will look to raise revenue locally.
Speaking more generally, with cutbacks having continued for more than half a decade now in line with reduced funding from Westminster to Holyrood, he said that every year “becomes more challenging”.
“In 2011 or 2012, when we started this process of trying to get the council back on track, there were a lot of things that we could do to save money and nobody really noticed that there was any difference,” Robinson said.
“We’ve come so far down that line that the only things we can look at is things that people will notice if we change them, or if we stop doing them altogether.”