UHI Shetland - Open the door to your future
Thursday 18 July 2024
 11.5°C   S Light Breeze
Ocean Kinetics - The Engineering Experts

Council / Councillor sounds another warning over finances

AN ELECTED member believes Shetland Islands Council (SIC) is “lurching into a crisis” when it comes to its finances.

Allison Duncan – who has repeatedly voiced concern on the matter over recent years – said he felt it was “not appropriate” to leave deficits to the next council, which will be elected in 2022.

Unaudited accounts presented to a meeting of the full council on Wednesday reiterated that the council was not in a “financially sustainable position over the medium term”.

If no action is taken then the anticipated cumulative budget deficit amounts to more than £100 million by 2025/26.

“The council will need to adapt its service provision if it is to continue delivering positive outcomes for service-users in the future without exacerbating the existing cumulative budget deficit,” the accounts said.

The council continues to budget draws from its reserves but part of this is usually deemed unsustainable.

The accounts do show a £5.45 million underspend on general services, though, in the last year as a knock-on effect of the coronavirus pandemic through services being changed or work postponed.

The council’s net worth also increased by £37.3 million through 2020/21 to just over £600 million, which is in part due to gains on long-term investments.

But there is a warning that “if the council does not take action to reverse a recent trend of using its reserves to fund budgetary deficits, and to limit the draw on reserves to a sustainable level, it will likely result in the erosion of the asset base in around 10 years”.

Echoing Councillor Duncan, Lerwick member Amanda Hawick said the SIC faces some “serious challenges” going ahead.

But council leader Steven Coutts took the opportunity during Wednesday’s meeting to highlight some of the positives over 2020/21.

He pointed to the signing of the islands growth deal which will benefit Shetland, Orkney and Western Isles, full funding for running ferries, the now finalised college merger and investment in early learning in addition to new fish markets and a revamped Toft Pier.

“I’m content that we are doing an awful lot for the community,” Coutts said.

He added that early intervention work in the council is doing amounts to “preventative spend” which should have a benefit later down the line.

Become a supporter of Shetland News

Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.

Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.

Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has  over 600 supporters  who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.

Your contribution will ensure Shetland News can: -

  • Bring you the headlines as they happen;
  • Stay editorially independent;
  • Give a voice to the community;
  • Grow site traffic further;
  • Research and publish more in-depth news, including more Shetland Lives features.

If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.



Subscribe to a selection of different newsletters from Shetland News, varying from breaking news delivered on the minute, to a weekly round-up of the opinion posts. All delivered straight to your inbox.

Daily Briefing Newsletter Weekly Highlights Newsletter Opinion Newsletter Life in Shetland Newsletter

JavaScript Required

We're sorry, but Shetland News isn't fully functional without JavaScript enabled.
Head over to the help page for instructions on how to enable JavaScript on your browser.

Your Privacy

We use cookies on our site to improve your experience.
By using our service, you agree to our Privacy Policy and Cookie Policy.

Browser is out-of-date

Shetland News isn't fully functional with this version of .
Head over to the help page for instructions on updating your browser for more security, improved speed and the best overall experience on this site.

Interested in Notifications?

Get notifications from Shetland News for important and breaking news.
You can unsubscribe at any time.

Become a supporter of Shetland News

We're committed to ensuring everyone has equitable access to impartial, open and quality local journalism that benefits all residents.

By supporting Shetland News, you play a vital role in ensuring we remain a pivotal resource in supporting the community.

Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.