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Councillors’ anger over funding settlement

Allison Duncan remains fuming at the Scottish Government, while SNP member Robbie McGregor pointed to constraints caused by the Tory government's cuts at Westminster.

SHETLAND Islands Council members have reluctantly accepted a funding cut from the Scottish Government – but several councillors lined up to deliver a stinging rebuke to the SNP administration for “holding us over a barrel”.

A Full Council meeting was held in Lerwick Town Hall on Wednesday to formally respond to December’s draft budget, which provides the SIC with £78.8 million in revenue funding for 2018/19.

Finance chief Jonathan Belford warned that, based on current projections, there could be an alarming £20 million funding gap by 2020/21.

Belford’s report noted that this year’s proposed settlement is 1.8 per cent down on 2017/18. He did stress that the budget – which includes a reduced capital funding allocation of £6.6 million – was still subject to change before it is finalised on 21 February.

But, while the reduced funding offer was grudgingly approved, what really drew the ire of several council members was Scottish finance minister Derek Mackay’s indication that any revised offer for local authorities that do not accept the terms will be “less favourable”, though no numbers were specified.

Council leader Cecil Smith said “nothing much has changed” since he spoke to Mackay before Christmas in that “if we don’t agree then we’re obviously going to get less”.

He moved to accept the settlement and was reluctantly seconded by deputy leader Steven Coutts. No one tabled an amendment.

South Mainland councillor Allison Duncan found it “very objectionable” and said it amounted to “political blackmail by the nationalist government”.

There were strong words for Scottish finance secretary Derek Mackay at Wednesday's meeting in Lerwick Town Hall.

“We should stand up to this present government and the sooner we get rid of them the better,” he said.

SNP councillor Robbie McGregor jumped to his party’s defence – pointing out that the cuts foisted upon the SIC by Holyrood had their roots in over seven years of austerity from the Tory government at Westminster.

“I’d like some clarity on where councillor Duncan is coming from,” McGregor said. “Which government is it we want to get rid of? The reason we’re in a position where we’re getting reduced funding is because of austerity imposed by the UK Government.

“Why don’t we nail the blame to where it belongs? The Scottish Government is doing their very best to ameliorate the difficulties being caused.”

But several other members countered that the SNP government – in power since 2007 – still has the power to decide how best to allocate the funding it receives from London.

Shetland Central councillor Ian Scott, meanwhile, drew criticism from several quarters for suggesting now was the time to dip into the local authority’s oil reserves to protect services from the impact of diminished government funding.

The SIC has the flexibility to increase council tax by up to three per cent. If it chooses to make the maximum increase it would raise an additional £270,000 next year.

Belford’s report noted the reduced funding package was “generally in line with forecasts set out in the medium term financial plan and is therefore not unexpected, reinforcing the scale of the extremely challenging position for the council that lies ahead”.

Central ward member Ian Scott found few supporters for his latest call to dip into the SIC's reserves to protect key public services.

There are new obligations the council has to meet, such as the commitment to increased pre-school childcare – ultimately to 1,140 hours a year. Belford’s assessment was that the funding on offer is “in reality not enough” to fund the plan for implementing the policy that was submitted to the government in September.

Lobbying aimed at securing fair funding for the SIC’s ferry services is continuing and environment and transport chairman Ryan Thomson said he feels there is “still a reasonable chance of getting the fair funding in there”.

Scottish transport minister Humza Yousaf drew considerable criticism locally when imploring Shetland and Orkney Liberal Democrat MSPs to pledge their support for the SNP’s budget if he promised to include ferry funding.

Others point out that the SNP had already pledged to deliver fair funding, and Thomson used Wednesday’s meeting to call on “the people that be” to “stop playing these political games and think about the people it is affecting” in the islands.

More generally he felt there was “no other way of putting it – we are being held over a barrel here” and the tactic of strong-arming councils into acceptance was “entirely an unacceptable position”.

South Mainland councillor George Smith said it was clear the level of funding on offer in general “does fall short of what’s required not just to maintain what we’re doing, but in terms of aspirations to do more in meeting new challenges”.

Smith, a Labour party supporter, said it was “good that some of the cloaks that we maybe hide behind” in party political terms were coming off during the debate.

He acknowledged the Scottish Government “is under pressure in terms of the funding it receives from Westminster, but it can make choices about what its priorities are, and for years now it has penalised local government disproportionately to other service areas”.

“Cynically, I might suggest that is because – at the heart of things – the current Scottish Government hates local government, it doesn’t fit into its agenda of centralisation,” Smith added.

Lerwick South member Amanda Westlake: "“We’re going to have to lobby harder politically... because we are in a dreadful position here.”

McGregor intervened to offer an assurance that the SNP “does not hate local government” and the Our Islands Our Future initiative offered an opportunity: “If we’ve got issues, let’s knock on that open door and put our case forward. I, for one, will not sit back and see Shetland disadvantaged, I’ll shout the same way as the rest of you do.”

Several members pointed out that meeting the cost of potential pay settlements for local government workers could present a major challenge.

Lerwick South member Amanda Westlake said the council was already using £21 million of reserves to make up a shortfall in government money “to cover the basic services”.

“We’re going to have to lobby harder politically… with the MSPs and really have leadership that’s going to lobby [local government umbrella group] COSLA and promote these points very strongly for Shetland, because we are in a dreadful position here,” she said.

While stressing he was “not an SNP man”, councillor Scott said Duncan was being “a wee bit unfair no the Scottish Government because they have been completely strapped for money by the government in Westminster”.

“We voted for the Liberal Democrats, who pioneered the cuts with the Tory government,” Scott said. “This is a particularly vicious government in Westminster, and we as a community voted for the cheerleader of that very vicious government.”

He said the SIC had to fight the Scottish Government but also tell it “for goodness sake fight the people in Westminster, they’re the danger”.

Scott added that we had now arrived at “the rainy day that these reserves” are there for: “Our people are expecting us to say ‘no, we’re going to dip a wee bit more into our funds to safeguard our services’” in the hope that in two or three years’ time the Tories will be out of power and “a bit of humanity will be restored in Westminster”.

But North Mainland councillor Alastair Cooper pointed out that the SIC was sitting on reserves that none of Scotland’s other 31 local authorities had.

“If the centralisation agenda is carried through, our funds will no longer be Shetland funds, they’ll go into the pot,” he said. “When you come to Edinburgh, you ain’t got many supporters – we’re going to be fighting a lonely battle to hold onto our £300-odd million.”

Coutts and George Smith both pointed to an ongoing review of local government and said it was “absolutely crucial we play our full part in that” as the SIC currently has plenty of power but “very little control of our own resources”.

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