Ocean Kinetics - The Engineering Experts

Council / Ferry cash gives council significant rise in expected core funding for year ahead

Lerwick Town Hall.

FULL funding to run inter-island ferries has helped to see Shetland Islands Council’s provisional revenue funding covering day to day services for the next financial year rise by over £8 million.

Capital funding is down by nearly £850,000, though, meaning the total overall funding the council expects to receive is £7.2 million up on last year.

The Scottish Government announced its draft budget for 2021/22 last week, and after years of lobbying, Shetland Islands Council’s costs of running its internal ferries are finally set to be met in full.

With the ferry funding confirmed, the government says that the council will experience the highest uplift in revenue support – a plus of 8.1 per cent – of all local authorities in Scotland.

Shetland Islands Council finance manager Jamie Manson said the full ferry funding amounted to a total of £10.784 million, an increase of over £5 million.

The SIC's new finance director Jamie Manson.
SIC finance director Jamie Manson.

Across the piece, the council is expecting to receive total core revenue funding of £97.27 million – a significant rise on last year’s £89.22 million.

Also included is £3.05 million ring-fenced for the provision of early learning and childcare, which Manson said is £322,000 more than last year, but “slightly below our expectations”.

The finance chief also explained that the revenue figures include a “financial incentive” for councils to freeze council tax.

“The tables indicate an incentive of £323,000 for 2021/22, made available on a one-off basis, if Shetland were to do this,” he said.

A report on council tax rates will be presented to the full council in the February cycle.

Manson said total capital funding falls to £5.29 million, and this includes a specific capital grant of £100,000 for Cycling, Walking and Safer Streets.

Capital in 2020/21 totalled £6.142 million, which “included £900,000 of specific capital grant towards the expansion of early learning and childcare which explains the reduction in capital from last year”.

“On a like for like basis, the capital grant has reduced marginally by £13,000,” he said.

Manson explained that overall the council expects to receive £102.56 million in the upcoming financial year, compared to £95.36 million in the current year.

Shetland Islands Council leader Steven Coutts reiterated that the “resolution of the long-standing ferry funding is welcome in the draft budget”.

“Through COSLA we will continue to ensure that the case is made for council to receive fair allocation for the range of services provided to the community,” he said.

“Inflationary pressures have a significant impact on our budget.

“We also need to understand how much of additional funding also relates to national government priorities and come at additional cost.

“We will be working through the detail in days and weeks ahead and this will feed into our own budget timescale.”

Scotland’s finance secretary Kate Forbes.

Across the country the Scottish Government has pledged £11.6 billion for local councils.

It said that the additional revenue funding this coming year to local authorities amounts to nearly £600 million.

Finance secretary Kate Forbes said: “This budget is being delivered in exceptional circumstances as we continue to battle a pandemic that has shaken our society and economy to the core.

“The local government settlement will help to fund those vital public services that are much valued and needed.

“It includes additional funding of £59 million to complete the expansion of early learning and childcare to 1,140 hours a year, £72.6 million for investment in health and social care and £7.7 million to support the inter-island ferries in Shetland, Orkney and Argyll and Bute.”

The draft budget still needs to be given the backing by the majority of MSPs in the Scottish Parliament being approved.