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Auditors put question mark over savings target

Lerwick Town Hall. Photo: Shetland NewsLerwick Town Hall. Photo: Shetland News

SHETLAND Islands Council (SIC) has been given a largely positive final audit report for the last financial year – but auditors were left unsure over whether its £15.6 million saving target is realistic given its “lack of detail”.

Members of the full council met on Wednesday to hear from auditors Deloitte, which has gone over the local authority’s accounts and governance with a fine tooth comb.

The council recently set a savings target of £15.6 million over the next five years and financial planning formed a large part of the report.

But auditors admitted that they were “unable to conclude on whether the savings target of 3.4 per cent per annum in the medium term financial plan is realistic or achievable given the lack of detail in how these savings will be delivered”.

“Although the council has a history of making required savings, this is becoming increasingly difficult as costs continue to grow (anticipated at 5.1 per cent growth in 2018/19) against a backdrop of flat or reducing funding,” they added.

SIC chief executive Maggie Sandison pictured in February.

Council officers are working on service redesign and business transformation programmes to make its operations more sustainable in a bid to tackle rising costs and demand.

The audit report, however, concludes that the “council has strong budget setting and financial monitoring arrangements which are robust enough to sufficiently manage financial activity and capture and address any challenges to the achievement of financial targets”.

Speaking after Wednesday’s meeting, SIC chief executive Maggie Sandison admitted that the targets were “challenging” – but she stressed the council has to look to the future to identify where savings can be made.

“I think what we’re needing to do as a council is really consider what our services need to look like in three years time, four years time, ten years time – not what we currently do today,” she said.

“It’s about transformation and change. We know the demographics of both our community and our staff are changing – we’re getting older – so actually is it the right functions that we are carrying out at the moment, can we afford to keep doing everything that we currently do?”

Sandison added that part of the “difficulty” with the savings targets is that “we have staff trying to run the services and also trying to find the time to review them, so we have to put in appropriate resource and support to our managers to make sure they can get the job done”.

The chief executive, meanwhile, said in response to the apparent “lack of detail” that the officers are currently undertaking wide-ranging reviews before presenting hard figures to the council.

“If you go in and say we’re going to generate £150,000 from this review, then you may actually constrain the review,” Sandison said.

“You could find more, you could find less, you may find out that actually the whole service needs to change. So what we’re encouraging is a review process that allows the best outcomes.”

At Wednesday’s meeting, councillor Allison Duncan – who earlier chaired an audit committee meeting on the same report – said he was glad to see that the auditors found “no serious failures in their investigations”.

He said “great credit” needed to be paid to SIC staff “across the board”.

Elsewhere in the report, auditors said that interlocking of health and social care between the council and NHS Shetland to form the integration joint board has “continued to be an area of concern”.

The council was also recommended to do more to involve the community in decision making processes, rather than once a decision has been made, while it could also engage more with local folk when next refreshing its long term financial plan.

Auditors also noted that there continues to be an issue with gender balance in the council’s senior posts, with 25 per cent of officers female – much less than the national average of 52 per cent.

Meanwhile, Deloitte was satisfied that “adequate consideration” is being given by the council to prepare for Brexit, although officers were reminded that they should increasingly focus on its impact as the outcomes become clearer.

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