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Council / SIC investments rise in value by more than £100m

A warning was made, however, that the value of reserves fluctuate and need to be viewed long-term

Lerwick Town Hall.

THE VALUE of Shetland Islands Council’s (SIC) external investments swelled by more than £100 million in the space of a year.

At 31 March this year the value stood at £423 million – a steep rise from £314 million on the same date in 2020.

This equated to a 40.3 per cent return, which is far greater than the long-term return of 7.3 per cent the council hopes for.

But members of the SIC’s policy and resources committee were warned at a meeting on Monday that the performance of the investments is volatile, with some years up and some years down.

A report to councillors stated: “It is important to recognise that stock market values will fluctuate from year to year, and this should not form a basis for altering the current course so that the council can continue to set affordable budgets and address the medium to long-term financially sustainability challenges.”

For example in 2019/20 there was a drop in the value of the investments.

In 2020/21 the council only drew £1.837 million from its reserves, which was some way off the budgeted £25.83 million.

The Covid pandemic has affected all corners of the council, and this for instance included delays to capital and maintenance projects, which resulted in savings.

But a lot of work has been reprofiled into the budget for 2021/22, and some ring-fenced funding has been carried forward to this current financial year.

Finance manager Jamie Manson said the council was as “confident as we possibly can be” that all Covid related costs have been tracked and that they will be covered by the Scottish Government.

Council leader Steven Coutts said it was “no mean undertaking” for all of the SIC’s departments to collate their Covid costs and he praised staff working on delivering services during the last year.

Meanwhile the policy and resources committee became the latest to back plans to bid for up to £25 million in UK Government funding for a new Fair Isle ferry and harbour improvements.

It means that it only needs to be approved by the full council on 16 June before an application is sent to the UK Government’s Levelling Up fund.

As it has in previous committee meetings, the idea received unanimous backing.

Shetland South member Allison Duncan said the project would be a huge benefit to the Fair Isle community.

But he said the delay in receiving funding was down to the Scottish Government, who the councillor said should be “ashamed of themselves”.

Duncan criticised the government’s increasing spend on two new ferries for the West Coast of Scotland.

The councillor also called on Northern Isles MP Alistair Carmichael to be involved in future negotiations.

Fellow south member Robbie McGregor, who represents the SNP, said he would not be drawn into politics on the issue – with his main concern the community of Fair Isle getting a new ferry.

Their colleague George Smith also said it was “long overdue”.