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Coronavirus / Councillor backs idea of SIC developing its own business support fund to save local jobs

Councillor Stephen Leask. Photo: Shetland News

THE VICE-chairman of Shetland Islands Council’s development committee has suggested the local authority could look into developing its own fund to help local businesses struggling as a result of the coronavirus pandemic.

Councillor Stephen Leask said “no business, company or organisation or self-employed people should be left behind”.

He added that if “push comes to shove” he would not be against the idea of dipping into the council’s reserves to support businesses and save jobs.

Calls have been made previously for the SIC to put its hands into its own pockets to support businesses which may have fallen through the cracks when it comes to financial support from the government.

Orkney Islands Council for instance established its own £5 million business support scheme.

Leask said Shetland Islands Council has done a “fantastic job” administering the payouts from national government.

But he said the local authority “could take a strong action to prevent businesses coming off a financial cliff edge”.

“We must have a financial mechanism in place to assist companies ailing due to the Covid crisis, so that they can support jobs and be economically viable for the Shetland economy,” Leask added.

The council drew £21.722 million from its reserves in 2019/20 to balance the books – an increase of over £6 million on the previous year.

The value of the council’s externally invested funds stood at £314 million on 31 March 2020, which was a decrease of £27 million from the same date in 2019.

Leask said he believes a “balance” needs to be struck, however, in an effort to support local employment.

“It has to be for the support of jobs,” the Lerwick councillor said.

“It’s all very for well us having fantastic amenities, the education, which is vitally important in itself, care homes etc, but when there are families on the bones of their backside – that doesn’t have a good sit for me.

“We need that balance. We need a balance between how we prioritise our funding and if it comes through the reserves, so be it.

“I’d rather see the reserves being used in a way that it can help businesses. I do tend to feel that if push comes to shove we do have to help businesses to save jobs.”

Leask welcomed the UK and Scottish governments’ recently announced combined £100 million investment in Shetland, Orkney and the Western Isles, but he said that will not help in the immediate term.

“That’s basically set aside for specific projects, which is brilliant in itself, but at the same time we need to look at how we can help in the interim period,” he said.

“That’s what I think is key. I think we have to be in a situation where we can actually help and assist businesses to overcome and override this whole crisis.

Recent figures showed that as of 11 June 490 people were claiming Job Seekers Allowance in Shetland, an increase of 200 on the year prior.

There is also a fear that some businesses may struggle to maintain their staffing levels once the furlough scheme ends in October.

Around a quarter of Shetland’s workforce has at one point been on the job retention scheme.

Leask said one barometer of the economic impact is the number of folk applying each vacant job that comes up – something which he said has been evident locally.

He is part of a local business resilience forum set up after the coronavirus outbreak struck Shetland.

One particular sector under threat, Leask added, was hospitality, which he said has “serious concerns” over its future.