Watchdog to send official north to examine how council is being governed

Scotland’s local government watchdog is taking the unusual step of sending in a representative to further examine how Shetland Islands Council is being governed.

After qualifying the council’s accounts for the fourth year in a row on technicalities, the Accounts Commission is sending in controller of audit Caroline Gardner to carry out an additional investigation following what has turned out to be one of the most turbulent years in SIC history.

The decision follows consideration of a statutory report on the council which highlighted two qualifications, one because Shetland Charitable Trust refuses to group its accounts with those of the SIC and the other relating to the valuation of £90 million of the council’s investments.

But the decision to step in is also related to problems in relationships between senior officials and councillors. This week saw six councillors calling for a new investigation as they submitted a 20-point complaint to convener Sandy Cluness with a string of allegations of misconduct by SIC chief executive David Clark.

Accounts Commission chair John Baillie said: “Shetland Islands Council’s accounts have been qualified for the fourth year in a row. This is serious in itself, but even more concerning given that the qualifications may be symptoms of deeper problems at the council.

“Bearing in mind the council’s duties to deliver best value to local people we have decided to seek further evidence from Audit Scotland on how the council is being run.”

Mr Clark said: “There is no secret that the SIC has a fundamental difference of position with Audit Scotland in certain aspects of financial reporting. Beyond that, we are committed to working with them and look forward to meeting with them in due course. Meanwhile the council will continue to deliver what are recognised as excellent public services.”

The Accounts Commision decision comes after councillors heard directly from Audit Scotland’s assistant director Fiona Mitchell-Knight on Wednesday. Her report raised a raft of concerns about the council’s habit of raiding its oil reserves to fund spending, money wasted on capital projects and members’ continuing inability to take tough decisions.

A number of councillors, most notably Allan Wishart, stressed to Ms Mitchell-Knight that members have to live in the community and deal with people, rather than spreadsheets and figures, which he said made it very difficult for them to take unpopular decisions and cut spending.

Councillors themselves agreed on Wednesday to bring in local authority umbrella group Cosla and the government’s Improvement Service to try and help improve the way the SIC is being run.