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Council / Audit report raises ‘serious concerns’ about SIC delivering best value

Council leader Emma Macdonald said work is already underway to address issues raised in the best value assurance report

Lerwick Town Hall.

SHETLAND Islands Council (SIC) leaders need to increase their pace and focus to deliver urgent change, according to a public watchdog.

It comes after a mixed audit report on the council was formally published by the Accounts Commission on Thursday.

It is the same report which was discussed at a meeting of the commission earlier this month.

Thursday’s publication includes the commission’s views – and it does not hold back.

The commission – which holds local authorities to account by reporting on their performance – said it is not confident the council is able to show it is financially sustainable, and it remains “deeply concerned” about the SIC’s capacity and ability to make the changes needed.

The report, prepared by Audit Scotland, ruled that the council has been slow to improve its plans for financial sustainability and has not yet demonstrated that it is meeting its ‘best value’ duty in a number of important areas.

Best value is about ensuring good governance and effective management of resources, with a focus on improvement.

It also highlights that while the council’s elected members and senior management have good working relationships, “they are not yet providing the strategic leadership needed to co-ordinate and drive forward plans”.

A number of strengths were also highlighted, including the delivery of services and high customer satisfaction.

The SIC’s response to the Covid-19 pandemic was also praised, as was the partnership working at play in Shetland.

In response Shetland Islands Council leader Emma Macdonald said the local authority has already been addressing the issues raised, adding that an improvement plan will be put in place.

But Accounts Commission chairman William Moyes said the report highlights some “serious problems”.

A follow-up report is due in 18 months time.

“We’re pressing them gently but firmly to show us in 18 months time that they’re on top of some of the issues that we’ve raised,” Moyes said.

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“We’re trying to be honest. We’re not in any sense saying everything is bad – far from it.

“There’s lots of evidence of good services and of customers being very satisfied with what they get.

“But the thing that worries us, is that there’s some potentially really serious problems not that far away. And we’re not convinced at the moment that the council is ready for them.”

One issue in particular is the funding deficit which could grow over the coming years if not addressed.

The report says there is an estimated funding gap over the next five years of between £61.2 million and £142.1 million if nothing is changed.

This is something though that has been on the minds of finance officials for a number of years and is regularly mentioned in reports to councillors.

However, Moyes felt there is no “clear plan in the council about what they’re going to do about that”.

“If they can’t close that gap, then we have to question whether they are a sustainable council now,” he added.

“We are sure they are, but they need to demonstrate to us, to the elected members, to the population of Shetland, that they’re on top of this.”

The chairman also said he was “personally very worried” that the council has to dip into its reserves to generate a balanced budget.

“That’s not a sensible approach, that’s not a sustainable approach,” he said.

“They need to get to the stage where they’re not reliant on their reserves to subsidise mainstream running costs.”

But Moyes said the commission is not looking to apportion any blame on anyone in the council.

“What we’re saying to them is, you may not have spotted you’ve got some really serious problems, and you now need to do something about them.”

Executive director of performance audit and best value Antony Clark said earlier this month that the commission had a “long and somewhat chequered history with Shetland Islands Council” given that serious concern was expressed about its leadership back in 2010.

In response to the publication, council leader Macdonald said: “We have already been working to address some of the issues which are highlighted, and our members and officers will now focus on developing an improvement plan, taking into account all the points raised in the audit.

“I am pleased to see that the commission has recognised how well our services perform, and that we have among the highest service satisfaction scores in the country.

“As the summer recess ends, councillors and officers will be focussing on the challenges immediately facing the council and our community – around the cost of living, energy costs, connectivity and financial planning for the future – and look forward to demonstrating to the commission the progress we make on our improvement plan over the next 18 months.”

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