Council / Squeeze continues as hopes for ‘fair ferry funding’ dashed again

Finance secretary Kate Forbes.

THE STANDOFF between island councils in Shetland and Orkney and the Scottish Government over ‘fair ferry funding’ is set to continue after just £11.5 million in total was earmarked for the two local authorities in the 2020/21 draft budget, which was presented to the Scottish Parliament on Thursday afternoon.

Shetland Islands Council (SIC) leader Steven Coutts said the local authority continued to be squeezed financially with reductions in real terms funding from the Scottish Government.


The SIC had requested nearly £9.5 million for running its ferries in 2020/21.

The draft budget was unveiled by public finance minister Kate Forbes following the resignation of finance secretary Derek Mackay earlier in the day.

She said the budget was designed to invest in vital public services across Scotland as well as to accelerate the country’s transition to a net-zero economy.

The minister added that local authorities would benefit from an extra £500 million in revenue funding, as well as an extra £100 million towards social care.


Coutts said immediately after the budget announcement that initial indications for the council’s finances were not looking good.

SIC political leader Steven Coutts.
SIC leader Steven Coutts: ‘Seeking immediate clarification ‘. Photo: Shetland News

“We will await some of the further detail, and how this will affect our ability to deliver front line public services for Shetland. Costs are rising and without a fair settlement from government we will continue to face challenges.

“Again we don’t have the detail but it would appear that the government has not delivered on its commitment to full and fair funding for our inter-island ferries.

“The government accept that there is a shortfall of £9.49m in revenue funding. This is what full and fair funding means, and that is what we expected to see in this budget.”


However, at the moment there is just £11.5 million earmarked in extra funding for ferry services in the Northern Isles and beyond. Orkney is hoping to get £7 million of funding.

Last year, the SIC received just of £5 million of a £10.5 million budget, leaving the council to fill a £3 million black hole in its budget.

“We will be seeking immediate clarification on the detail and justification for this,” Coutts said.

As with previous year, the SNP minority government needs at least two votes from other MSPs to get the budget over the line. In the past, this has always been done with the help of the Greens who in return have regularly secured extra funding for local government.

Coutts added: “This is a proposed budget and we will be working hard to ensure that before the Scottish Parliament approves the final budget, Shetland is treated fairly.

Shetland MSP Beatrice Wishart reacted by saying: “Parliament has already agreed that the government should deliver full and fair funding for Orkney and Shetland’s ferry services but it seems that the evidence presented to the government has been ignored yet again.”


Highlands and Islands Conservative MSP Jamie Halcro Johnston said: “Despite years of promises from ministers, our island councils will yet again be left picking up costs of millions of pounds for delivering vital lifeline internal ferry services which, in other parts of Scotland, are fully funded by the Scottish Government.

“These services are absolutely critical to our island communities, and it is simply not right that council services in other areas risk being impacted in order to pay for our essential transport infrastructure.

“Orkney and Shetland deserve a better deal and local people will rightly be disappointed by this latest failure from the SNP to meet long undelivered promises”.

Highlands and Islands Labour MSP Rhoda Grant added: “Scottish Labour is calling for the government to properly fund Scotland’s hard-pressed local authorities, so they can deliver the vital services that communities need, which would also include providing ferry services.

“It is worth stressing that previous money given for ferries was given against the backdrop of council cuts meaning the council was not better off.”

NHS Shetland’s budget meanwhile has grown by just over £3 million to £53.9 million in 2020/21.