Council / Shortfall resulting from draft ferry funding figure ‘beyond disastrous’

There are hopes, however, that the £5m figure could rise before the Scottish Government budget is passed

Whalsay ferry Linga berthing at Vidlin. Photo: Shetland News

THE SCOTTISH Government’s draft budget contains a £200,000 drop in funding for Shetland Islands Council (SIC) to run its ferries compared to what the local authority received last year.

The provisional figure of £5 million falls some way short of the £9.49 million ask the local authority had submitted for ‘fair’ ferry funding.

Environment and transport committee chairman Ryan Thomson said this shortfall in funding would be “beyond disastrous for Shetland”.

However, the settlement could increase over the coming weeks as the budget often gets tweaked in order for it to pass through parliament.

Shetland’s sole SNP councillor Robbie McGregor said he was “disappointed at the level of funding” indicated for ferries in the draft budget.

“We need to continue dialogue and discussion,” he said.

The overall provisional settlement for Shetland Islands Council, meanwhile, is around £600,000 less in total than last year.

SIC finance manager Jamie Manson said that while the unrestricted general revenue element has increased slightly by 1.7 per cent to £81 million, the capital grant has reduced by 33 per cent to £6.1 million compared to last year.


There was disappointment locally when the draft budget, announced on Thursday, contained a total of just £11.5 million for supporting Scotland’s inter-island ferries.

That pot of cash – which was a £1 million increase on 2019/20 – has been split over the last two years between Shetland and Orkney, but there is suggestion that for 2020/21 the Western Isles could get a slice too.

The government introduced the funding a couple of years ago in a bid to support the Shetland and Orkney councils, which did not receive any specific grants to run its ferries, unlike the Western Isles.

However, the settlements received so far – £5 million in 2018/19 and £5.2 million in 2019/20 – have both fallen short of the SIC’s ask, with £7.9 million for example requested for the current financial year.

Become a supporter of Shetland News


This has left a shortfall in the council’s books, with councillors saying that the gap leads to difficult decisions in the local budget-setting process.

In the Scottish Parliament last year islands minister Paul Wheelhouse said the Scottish Government “understands the significant financial challenges that can fall on individual local authorities and remains committed to the principle of fair funding for the provision of ferry services and ferry infrastructure”.

Back in 2017 there was cross-party support in the Scottish Parliament for a motion from the two Northern Isles MSPs to honour its commitment to the fair funding of ferries.

SIC finance chief Manson explained that around £8.2 million of the draft settlement for the council is ring-fenced for specific purposes – with £5 million of this allocated for ferries.


He said that at this stage last year the provisional ferry funding for 2019/20 was £5 million before it increased to £5.2 million as the budget went through parliament.

SIC political leader Steven Coutts, however, said that the government had accepted that the council had a shortfall of £9.49 million in revenue funding.

“Costs are rising and without a fair settlement from government we will continue to face challenges,” he said.

The SNP minority government generally needs at least two votes from other MSPs to get the budget over the line.

In the past, this has been done with the help of the Greens who in return have secured extra funding for local government.

SNP Highlands and Islands MSP Maree Todd was approached for comment, but her team referred the matter to the Scottish Government.

A spokesperson for the government said: “Local authorities are wholly responsible for their own internal ferry services, but we understand the significant financial challenges that can fall on individual councils from doing so.


“Additional funding support of £11.5m for local authority ferry services has been allocated within the Scottish budget for financial year 2020-21. This is an increase of £1m on the last financial year, in a challenging financial context, and this brings the total additional support provided for local authority ferry services over the past three years to £32.5m.

“Decisions on the precise allocation of this additional funding will be taken in due course.”

Become a supporter of Shetland News

Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.

Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.

Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has  over 600 supporters  who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.

Your contribution will ensure Shetland News can: -

  • Bring you the headlines as they happen;
  • Stay editorially independent;
  • Give a voice to the community;
  • Grow site traffic further;
  • Research and publish more in-depth news, including more Shetland Lives features.

If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.



Subscribe to a selection of different newsletters from Shetland News, varying from breaking news delivered on the minute, to a weekly round-up of the opinion posts. All delivered straight to your inbox.

Daily Briefing Newsletter Weekly Highlights Newsletter Opinion Newsletter Life in Shetland Newsletter

JavaScript Required

We're sorry, but Shetland News isn't fully functional without JavaScript enabled.
Head over to the help page for instructions on how to enable JavaScript on your browser.

Your Privacy

We use cookies on our site to improve your experience.
By using our service, you agree to our Privacy Policy and Cookie Policy.

Browser is out-of-date

Shetland News isn't fully functional with this version of .
Head over to the help page for instructions on updating your browser for more security, improved speed and the best overall experience on this site.

Interested in Notifications?

Get notifications from Shetland News for important and breaking news.
You can unsubscribe at any time.

Become a supporter of Shetland News

We're committed to ensuring everyone has equitable access to impartial, open and quality local journalism that benefits all residents.

By supporting Shetland News, you play a vital role in ensuring we remain a pivotal resource in supporting the community.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.