GR Direct - Sony - Save up to £300 on selected Bravia OLED & LED TVs
Monday 24 June 2024
 13.7°C   S Moderate Breeze
Ocean Kinetics - The Engineering Experts

Council / SIC needs to prioritise projects as not everything is achievable, finance boss warns

FINANCIAL forecasts suggest the council has made “limited progress” in addressing its long-term sustainability – but considerable challenges remain.

That is a key message from Shetland Islands Council’s (SIC) latest medium term financial plan, which forecasts how the local authority’s bank balance may look over the next six years.

The last plan, published in 2020, estimated a cumulative deficit of £103.6 million through to 2025/26 if no action was taken.

But the latest plan has a revised deficit of £76.8 million for the same period.

A recent entry into the council’s corporate risk register describes the current ‘risk rating’ of the ‘financially unsustainable position’ as “very high”.

A report due to be presented to councillors next week said this can be explained by “lower than anticipated net expenditure in 2020/21 and other positive changes, such as the Scottish Government providing additional funding to meet Covid-19 pressures and the full cost of inter-island ferry services”.

But there remains a “considerable challenge” in medium and long-term sustainability, the report warns, and this is beginning to impact how the council can finance its future capital plans.

On top of this, the council’s core funding from the Scottish Government for the next financial year is £590,000 less in cash terms than 2021/22, although local authorities will be able to raise council tax rates.

“The need to take action to address the council’s financial unsustainability is now becoming more pressing as the council seeks to proceed with a range of investments in services and infrastructure,” a report from finance manager Jamie Manson added.

Last year the council approved business cases which created an additional capital commitment of £35 million.

This is on top of the council’s current asset investment plan, which includes £120 million up to 2025/26.

Become a supporter of Shetland News

 

A large chunk of this is for a ferry and terminal replacement programme, while other planned spend includes a new Cullivoe road, the Knab site redevelopment and housing maintenance.

Further spend will also likely be needed in the years ahead to support programmes in climate change and the isles’ schools estate.

There is a statutory requirement to comply with a ‘prudential code’ when considering how much the council can borrow, though.

The SIC has “limited headroom” to increase its borrowing, the report warns, and using reserves as an alternative would result in lower returns on its investments in the years ahead.

The report concluded that the plan does not have the answers – that is down to the council developing strategies to address deficits.

“The council needs to acknowledge that it cannot achieve everything it would like to achieve with the resources it has available, and needs to prioritise which projects and programmes are taken forward in the future,” Manson warned.

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.

 
Categories

Newsletters

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.