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Letters / Blurting out the truth

As our council finds itself in the throes of budget setting for another year, a small insight into last year’s budget may well be of interest.

Last year, against ardent pleadings from the council leadership, councillors voted narrowly to freeze council house rents and council tax. A small effort to alleviate the predictable post Covid hike in the cost of living I’ll grant you – the tragedy of Ukraine was still only a threat – but a significant effort nevertheless.

It was to my mind the first of a number of steps that our council could easily make to help ease the impending crisis.  Universal free school meals for all and a free public bus service for all was my intention, but, a move which was clearly intended to ease the burden, delivered a quite unheralded downside.

In conversation with a fellow councillor in December, I was told that the council rents freeze resulted in a cut in the housing maintenance and repairs budget. Intrigued, further enquiries to our officers confirmed that the freezing of council house rents did indeed result in a £1 million cut in repairs and maintenance for the ensuing five years.

A £1 million cut. To give a background, our council housing is financed through a Housing Revenue Account (HRA) essentially made up by council house rents, an account which is ring-fenced to ensure that these revenues do not get pilfered and put to other uses.

Over the last five years our HRA has seen a rise in its value from £13 million to £20 million, with a yearly income of about £7 million and an expenditure of repairs and maintenance of about £3.5 million. Due to our HRA having all its reserves allocated for years to come, it appears that the £180,000 reduction in expected income could not be absorbed.

(As a general aside, I have always wondered how council housing would be treated if councillors and well-paid officers, MSPs and MPs actually lived in council houses.)

I completely accept that a working balance needs to be adequate to meet unforeseen circumstances and inherent uncertainties, but for distant future spending to trump the here-and-now, quite frankly, puzzles me.  Current much needed repairs and maintenance would, to my mind, surely be the priority. I remember when councils actually build council houses.

But what then of our children and grandchildren’s futures, I hear the sanctimonious pleading … there will be nothing left for them when they grow up, I hear you say. Well, I first heard this pious entreaty many years ago and these youngsters then are now themselves the proud parents and grandparents of their children and grandchildren and they themselves certainly could now do with a bit of help.

The one thing that surprises me though, is, that with such a massive cut in spending – oops … millionsorry savings from our budget – this handsome cut hasn’t made front page news.

To move slightly on from last year’s budget, I would just like to reiterate the actuality of our financial situation, which is at the moment showing a £400M usable reserve.

  1. Audit Scotland continue to tell us that our reserves can be used to deliver services.
  2. And as for our allocated reserves, our government tells us in its mandatory guidance, “that for the avoidance of doubt, the sums disclosed as allocated do not confer any obligation of the ear marked allocation to be expended in the disclosed manner, and are merely an indication of policy intention.”
  3. CoSLA are in full agreement that reserves are there to be used for services.
  4.  And of course, the Zetland County Council Act of 1974, a Private Members Bill passed by Parliament, safeguards our reserves and states that the reserves can be used for what is seen to be solely for the good of the people of Shetland.  The late Jo Grimond and the then council leadership are to be congratulated on their determined insistence.

Our useable reserves then, along with our council tax and other income streams, are there to bolster Holyrood’s core funding.  Due to the Tory and Lib Dems disgraceful austerity obsession (thank you, Alistair) public service funding has been seriously cut over the years, but our budget can be bolstered by drawing down whatever is felt necessary and whatever our councillors deem appropriate.

Our old friends, the Accounts Commission, though, has issued dire warnings foretelling the imminent draining of our usable reserves within five years (it’s four and a half years now) if we continue drawing down these “unsustainable” sums.

These “unsustainable” sums, which are rapidly “draining our reserves”, have quite remarkably produced a £200 million increase in these very same reserves over the past five years, a very unusual drain indeed which delivers a 100 per cent increase.

The Accounts Commission, comprising the great and the good of Scottish public and commercial life (they speak very highly of themselves) having predicted doom and disaster within five years, resisted the opportunity to give me a plausible scenario whereby we could possibly spend an extra £400 million within the next five years.

If our reserves do disappear it will be nothing to do with our spending of them and we will have far more to worry about than the loss of a few useable pounds.

So why then, I ask myself, does this mantra of “unsustainability” and predictions of imminent penury hold such sway in the face of reality?

To be honest I have no real idea, but I do recall how enthusiastically I myself, as a youngster, completely embraced my Catholic Catechism without question.  I am also minded of the Hans Christian Andersen tale of the Emperor’s New Clothes, in which, as I recall, unscrupulous rascals clothed the emperor in imaginary clothing. This led his many admirers, sycophants and flunkies, to extol his very handsome attire, as he paraded naked in front of his people.

Our very own parallel fantasy enfolding in front of us is quite the reverse. Our emperor has an abundance of swanky clothes, has any amount of wardrobes full of clothes and any amount of tailors working full time on his behalf.   In the Andersen fable though, thankfully, there was a wee laddie willing to blurt out the truth.

Councillor Ian Scott
Member for Shetland Central


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