Transport / SIC to look into viability of transferring responsibility of ferries to government

The council is considering handing the running of the inter island ferry service to the Scottish Government. Photo: Shetland News

SHETLAND Islands Council (SIC) is seeking advice on the feasibility of transferring responsibility for inter-island ferry services to the Scottish Government amid a shortfall in funding for running the vessels.

The news comes as the SIC is in line to be given £5 million from the government towards operating its ferry services when its ask was £9.49 million.


The council has responsibility for operating the service to the islands such as Whalsay, Unst and Yell, but there is growing frustration over the level of funding provided by the government to do so.

Chairman of the SIC’s environment and transport committee Ryan Thomson said on Monday that he felt the time was nigh for an SNP minister to visit Shetland to explain why the government was not fulfilling its obligations on the ‘fair’ funding of ferries.

A report presented to councillors at a meeting of the policy and resources committee on Wednesday highlighted that the SIC is “cognisant of the risk of not achieving an agreement for fair funding for Shetland and the likely impact on the council’s medium-term financial plan”.


As a result, officers will now be seeking guidance on the viability of handing responsibility for the services to the Scottish Government.

The report confirms that the SIC is still expecting to continue dialogue with the government on the matter in the months ahead.

“The council expects to continue engaging with Transport Scotland throughout the coming year with a view to reaching a fair funding agreement for all ferry services across Scotland, which is consistent with the commitment made by the Scottish Parliament,” the report from finance manager Jamie Manson said.


“In the absence of a fair funding settlement from the Scottish Government for the second consecutive year, the council will need to consider significant reductions to internal ferry services in the near future in order to avoid significant reductions across other council services,” it added.

Manson told councillors at Wednesday’s meeting that the £5 million may not be the finalised settlement, with confirmation due to come in the weeks ahead.

As it has done in previous weeks, months and years, the council chamber reverberated with frustration at how the ferry funding situation has again panned out.

North mainland member Alastair Cooper said he would like to see more details on the timeline and process of the next steps.

But the councillor said the fair funding process had been ongoing for a decade and yet only half of the SIC’s ask was forthcoming.

“I think it’s probably time to be honest with the community and say I don’t think this is going to work,” he conceded.

Council leader Steven Coutts laid the blame at the Scottish Government for not delivering ‘fair’ funding when the SIC’s needs of £9.49 million was known as early as September.


He said future engagement for the SIC is questioning the government and the parliament on why “fairness has not been exhibited”.

Thomson said the government claiming it was continuing to engage with local authorities on fair ferry funding was “simply not true”.

South mainland member Allison Duncan added that first minister Nicola Sturgeon should also be invited to Shetland to explain the ferry funding situation.

In the council’s proposed capital budget for 2020-25, there is provision for ferry vessel and terminal replacements over the five years worth £100 million.

“The delivery of these projects is the subject, and a key element, of discussions with Transport Scotland in relation to the government’s commitment to fair funding for the inter-island ferry services,” a report from Manson said.

“The plan assumes that grant funding will be received to support the replacements, pending the outcome of work with Transport Scotland and the Scottish Government.

“If funding is not secured from the Scottish Government, the council will be unable to commit resources to progress plans to replace the inter-island ferry fleet.”

The prospect of fixed links such as tunnels was also raised in discussions on Wednesday, with Duncan keen to see reports from an SIC delegation’s fact-finding visit to Faroe on the subject back in 2007.