Council / Council budgets struggling to keep up with demand, according to spending watchdog

Leader Steven Coutts reiterates Shetland Islands Council has suffered among the highest cuts to local government funding over the last five years

LOCAL AUTHORITIES across Scotland continue to struggle balancing the books and are increasingly dipping into reserves to keep up with growing demand for services.

And the financial pressure can only get worse, according to an Accounts Commission report published on Tuesday morning.

In its Local Government in Scotland report, the financial watchdog also said that the integration of health and social care was progressing too slowly, while the majority of integration joint boards (IJB), the bodies tasked with the job, needed additional funding to break even.


The national findings are reflected locally, with Shetland Islands Council (SIC) achieving savings of £1.3 million so far in 2019/20 against a target of £15.6 million.

Despite having to dip into its reserves to balance the books, however, the SIC’s reserves grew to a value of £355 million by the end of September this year.

Over the last three years the SIC experienced a relative increase in its general fund reserves of 24 per cent – the highest in the country – according to Audit Scotland.


The Shetland IJB budget, meanwhile, showed a deficit of over £3.1 million for the 2018/19 financial year before the body broke even thanks mainly to an additional one-off payment from NHS Shetland.

The report said that Shetland – and Orkney – had additional income through “significant harbour activities” (£30m and £15m respectively), but it also acknowledged that the smaller island local authorities were generating little extra income through higher levels of council tax.

SIC leader Steven Coutts said he “recognised these findings” and added: “We have suffered amongst the highest cuts to local government funding over the last five years.


“We continue to strive to provide high quality services and allow everyone in our community to achieve the best possible outcomes; however this is not easy, given declining real-terms funding and increasing costs and demand.

“All this is made much harder by a government settlement that does not take into account the acknowledged unfair financial burden the lack of full ferry funding places on the council and those who live in the islands of Shetland.”

Graham Sharp, chair of the Accounts Commission, said: “There’s a need for councils to continue rethinking how they deliver services, as well as look at ways to increase their income.

“For some councils in Scotland, finding ways to do this is getting more and more difficult as their current income doesn’t match demand.

“We urgently need much faster progress in the reform of our health and social care services. The current position is increasingly unsustainable.”