Council / Leader says SIC will continue to argue for additional Covid costs to be covered

Value of the council investments also increased by £79 million between April and September

Shetland Islands Council leader Steven Coutts. Photo: Shetland News

SHETLAND Islands Council (SIC) leader Steven Coutts says the local authority will continue to make a “very strong argument” for having its additional costs resulting from the coronavirus pandemic covered in full.

The net financial impact on the council stemming from the pandemic is projected to rise to an additional cost of £2.385 million by the start of April.


In an update to councillors on Monday morning finance chief Jamie Manson said the SIC is “working with COSLA and other local authorities to secure additional government funding to meet those pressures”.

In a report to members of the policy and resources committee Manson said by the end of the second quarter of 2020/21 the net impact amounts to an additional cost of £1.179 million.

By the end of the 2020/21 financial year, at the start of April, this is projected to more than double.

The figures are a melting pot of increased costs, loss of income and potential savings.


One of the largest areas of additional spend is in children’s services, covering areas like employing day cleaners in schools, critical childcare and additional staffing.

In infrastructure services the loss of income on ferries has been a major factor.

There is a hope that the Scottish Government will meet the additional costs and Coutts said the SIC will continue to make strong representation to COLSA over this.

South mainland member George Smith used the opportunity to acknowledge the amount of work from staff going into keeping track of the additional spend.

Manson added that at this stage the council forecasts total general fund revenue expenditure of £125.5 million on service delivery to the end of the financial year, against a revised budget of £126.5 million.


Total forecast capital expenditure amounts to £14.6 million against a revised capital expenditure budget of £19.4 million, with delays from the impact of Covid-19 to projects resulting in slippage.

Meanwhile Shetland Islands Council’s payment this year to the integration joint board, which covers health and social care in the isles, is set to increase by £222,000 to £24.301 million to recognise additional work and project costs.

The policy and resources committee also heard that the council’s investments increased in value by £79 million over the first six months of the 2020/21 financial year.

At the end of September they had an overall value of £393 million.

The combined investment return over the six-month period was 27.1 per cent, which was 9.5 per cent above the benchmark return.

Manson warned, however, that the performance of the investments could change over the remainder of the financial year.

This is highlighted in the unaudited figure for the value at the end of October, which was £388 million.

During October the equity markets “pulled back a little” with increasing concern over the second wave of coronavirus, and growing uncertainty around the prospect of further fiscal support in the US, which has been delayed due to the presidential election.


“I would expect a bit more volatility in the months ahead as we get through the winter,” Manson said.

He said the key focus, however, was the long-term performance.

South mainland councillor Robbie McGregor said he felt things were looking good long-term, but asked if Manson could give any views on what the future might hold.

“I’m afraid my crystal ball is probably still with the Christmas decorations hidden somewhere in this house,” he said.

But Manson clarified that the council aims for a long-term average return of 7.3 per cent.

“As long as the investments are generating around that over the long-term I will be quite happy,” he said.