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Council / Council tax expected to be frozen next financial year

Councillors are also to discuss the creation of a Covid-19 support fund to plug the holes in government schemes

COUNCIL tax rates in Shetland are set to be unchanged at £1,206.33 for a band D property in the next financial year.

Council officials are also proposing a one per cent increase to housing rents and charges, which is less than anticipated.

Officials recommend to freeze council tax at 2020/21 levels,

Councillors will discuss next year’s budget at a meeting of the full council on Wednesday.

A report to members highlights that the Scottish Government has offered a financial incentive to local authorities to freeze council tax rates.

This incentive is worth £323,000 to Shetland Islands Council, which is £13,500 more than the income which would come from a three per cent tax hike – the assumed rise included in previous financial forecasts.

Councillors are warned, though, that a “substantial” funding gap of £7.7 million remains for the year ahead.

In his report finance manager Jamie Manson adds: “The council is considering a number of options in order to further reduce the remaining funding gap, namely by reducing expenditure through efficiencies and reconsideration of contingency funds, or increasing anticipated income through a further use of reserves, albeit in excess of the amount considered sustainable.”

The latest budget estimates assume that £14.1m will be withdrawn from the council’s long-term investments, which is described as sustainable.

A further withdrawal to meet the current £7.7m funding gap is deemed unsustainable and will have “longer-term implications on the extent to which the reserves can be relied upon to contribute to future budgets, and ultimately support the delivery of services across Shetland”.

Freezing council tax at 2020/21 levels, meanwhile, would mean the band D bill for the upcoming financial year would remain at £1,206.33.

If it was increased by three per cent then this would result in a £36.19 rise.

In previous years the SIC has used its power to increase council tax rates in a bid to chip away at funding gaps.

Councillors, meanwhile, will also be asked to approve the launch of a Covid-19 discretionary fund.

It would aim to disburse nearly £200,000 in funding from the Scottish Government to businesses facing immediate financial challenges due to the pandemic which have previously not been eligible to access government support.

The fund would provide grants of up £2,000 to businesses which can show a downturn in activity as a result of Covid-19 restrictions.

Scottish Parliament election, 6 May 2021