Council / Ferry funding creates waves at SIC budget meeting

SHETLAND is to make the case for either cutting the inter islands ferry service to fit the council’s budget or transferring the ferry service to direct control of the Scottish Government.

Councillors approved capital and revenue budgets for the forthcoming financial year on Tuesday that would see the council make a one-off “unsustainable” draw on reserves of £3.5m to balance the books.

About £3m of that was to make up for the lack of “fair ferry funding” which the council believed had been agreed in principle with the Scottish Government. The rest was from a growth in service provision.

The meeting of the full Shetland Islands Council heard that continuing discussions on more ferry money – an indicative amount of £5m is being offered by the government – will be part of negotiations on the future of the service. These talks will in turn open the door for discussions on fixed links that are due to take place as part of the National Transport Strategy.


A “very clear” report by finance manager Jamie Manson set out council service expenditure of £114m for 2019/20 which will be met by a government grant of £79.3m, £9.7m in council tax and £17m in reserves, of which £3.5m was “unsustainable” and a sum that matched the hole in the council’s figures.

Manson said that the central government grant would only cover council services deemed legally essential – any icing on the cake had to be supplied by the SIC’s own revenue raising. Other councils did not have the luxury of a £283m useable reserve.

SIC leader Steven Coutts. Photo: Shetland News

SIC leader Steven Coutts blamed the Scottish Government for failing to make good commitments on “fair ferry funding” a position that won the backing of various councillors including environment and transport committee chairman Ryan Thomson.

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But SNP South Mainland councillor Robbie McGregor said that some councillors did not grasp the Scottish Government did not have control of all the sources of money.

“We only get in Scotland what is given to us by the masters of the British Nationalist councillors here in Shetland. They give Scotland funding sums which are inadequate for Shetland and Scotland’s needs,” added McGregor.

He blamed MSP Tavish Scott and the other list MSPs for failing to engage with the parliamentary budget – a process only list MSPs Maree Todd (SNP) and John Finnie (Greens) had been involved with.

Lerwick South councillor Amanda Hawick asked at what point her colleagues would accept that the £3m extra sought for ferries would not be forthcoming, as had been indicated by her discussions with ministers.

Lerwick North councillor John Fraser said that the Scottish Government had chosen to embark on a number of huge infrastructure projects including the Aberdeen bypass, but there was “no capital investment for Shetland” and suggested this was because the isles had not backed “Little Nickie” and “Big Eck”.


Hawick warned that the council was not living within its means and was in danger of sliding back to the bad old days when it had been rapped by auditors for massive overspending, peaking with a £43m deficit in 2012.

But councillors were in agreement that sticking to a three per cent rise in council tax was a good thing rather than using the full 4.9 per cent allowed by the government as this would hit the poor hardest.

The council is also being squeezed in capital budgets with real term funding shrinking year on year.

What is dubbed “fair funding for ferries projects” – repair and replacement – of £54.25m will take up most of the £129.5m capital expenditure planned for the council between 2019 and 2024.


There was also a groundswell of support for the concept of fixed link tunnels and the “spend to save” principle. It was up to the council to make the strong case for the social and economic benefits these would bring.

South Mainland councillor George Smith asked what had happened to schemes like widening of the Levenwick Road and road improvements on the West Side, all of which had dropped off the radar.

SIC chief executive Maggie Sandison said that planning work on the Levenwick road was being undertaken so that it will be ready to roll once the cash is available.

Other schemes are subject to the council’s own strict planning appraisals.

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