Transport / Councillor warns of ‘tsunami’ of ferry running cost increases
Shetland Islands Council has requested around £23m from the Scottish Government for operating ferries next year – an increase of more than £5.5m
SHETLAND Islands Council’s next annual funding request to the Scottish Government for running inter-island ferries is up by more than £5.5 million on the current year – with one elected member calling it a “tsunami” of increased costs.
A big part of this is the price of fuel, which has risen significantly, as well as maintenance of the ageing vessels.
The local authority has asked for £23.082 million for the 2023/24 financial year, which is up from the £17.496 million it received this year.
After a long-running battle the council managed to get the full deficit in running its ferries covered by the Scottish Government last year.
But the increased price of fuel – as well as staff costs – mean the request for 2023/24 represents a fairly steep rise.
For the current financial year the council expects to spend £1.65 million more than budget on ferry fuel alone.
For the government ask there is an increase of nearly £2 million for fuel, while the price of maintenance shows a rise of £2.554 million. Increases in salary costs are estimated at just over £1 million.
Shetland South member Allison Duncan questioned whether there was a confidence the full request will be delivered by the Scottish Government.
But development director Neil Grant said at the moment it was just an ask – and the ball is in the government’s court.
Finance chief Jamie Manson said the council should know by the end of the year if its full bid has been successful.
Duncan said he felt it was like a “tsunami” of cost increases.
“If these estimated figures come to fruition and we don’t get a satisfactory response financially from the Scottish Government, this is going to have a devastating effect on the Shetland finances,” he said.
The Shetland South member warned that if the council did not receive the full funding the local authority may have to dip into the reserves or review ferry services.
But council leader Emma Macdonald said the figures were raised with transport minister Jenny Gilruth during her visit to Shetland in August.
She said the government was well aware of cost pressures.
Meanwhile Shetland Central member Davie Sandison said there will be a number of “radical shocks” for the council when it comes to budget setting as costs price.
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