SIC in ‘impossible’ situation without more government funding, Armitage says
SHETLAND Islands Council cannot be “unrealistic” and think that it can balance its budget without more funding from the Scottish Government.
That is the view of South Mainland councillor Alex Armitage, who said that the council’s bleak financial position was not “something we can sort out internally”.
There have been repeated warnings from council officers and elected members about the need to make difficult decisions to reduce spend, with the SIC setting itself a savings target of £11 million annually from 2027/28 onwards.
Shetland Islands Council withdrew £47 million from its reserves in 2025/26– the largest amount in a financial year – of which £26.1m was described as being “unsustainable”.
At Wednesday’s full council meeting, South Mainland councillor Allison Duncan expressed concerns about the SIC’s financial situation.
“We continue overreliance on our reserves to support service delivery,” he said.
“This is not sustainable in the longer term.
“The council’s financial future requires drastic action for the challenges ahead to avoid continued reliance on our reserves.”
Duncan added that balancing the council’s budget could only be achieved by councillors and SIC officials “working more closely together”.
But Green councillor Armitage, a fellow councillor for Shetland South, disagreed with Duncan.
He said the SIC needed a “bit of realism” about what he called its “huge budget deficit”.
“The idea we can balance our budget and maintain the central services we provide is impossible,” Armitage said.
“The only way we can balance our budget is if we have more funding coming from central government.”
He said the SIC should be pushing the Scottish Government “hard” for more funding, and to tell them that they were “living in an impossible situation”.
Armitage also said BP’s recent decision to market its business west of Shetland for sale was likely to be “bad news” for income into the SIC’s harbour account through Sullom Voe oil terminal.
He added that while the council should “look very closely at what we’re spending”, he did not believe their financial situation was “something we can sort out internally”.
Council leader Emma Macdonald said that the SIC had been “repeatedly making the case” to the Scottish Government that they needed more funding.
She added there was “increasing pressure in lots of areas that simply costs more money to do”.
“We’re definitely making the case that local government needs to be funded better and in a way that is more sustainable,” she said.
“Making the case for more funding is definitely something we will continue to do.”
And depute convener Catherine Hughson, who was chairing Wednesday’s meeting, said the SIC was not alone in finding its funding from Scottish Government lacking.
“It’s a problem right across the country,” she added.
But delivering services in Shetland “comes at a higher cost than anywhere else in Scotland,” she stressed, and said the SIC has to “be aware of that”.
Become a member of Shetland News
Shetland News is asking its readers to consider paying for membership to get additional perks:
- Removal of third-party ads;
- Bookmark posts to read later;
- Exclusive curated weekly newsletter;
- Hide membership messages;
- Comments open for discussion.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a member of Shetland News by either making a single payment, or setting up a monthly, quarterly or yearly subscription.
Already a member? Sign in to hide this message.
