Eight senior SIC staff including depute chief executive to leave in management reshuffle

Eight of Shetland Islands Council’s senior staff including depute chief executive Hazel Sutherland are to quit the new regime by taking voluntary redundancy or early retire­ment. They will be gone by the end of September, saving the local authority around £500,000 a year in wages.

The eight are the first to go as the council reshuffles and streamlines its hierarchy but at least seven other managers from the top 75 are also expected to agree severance pack­ages in the coming weeks.

The local authority declined to reveal the names of those who are going yesterday afternoon because managers were to tell their staff first. A public announcement was expected early today.

Ms Sutherland, who has been an executive director in charge of exec­utive services and finance, did not respond to inquiries about her inten­tions although other staff members have been aware of her decision for some days.

The other executive director, Gordon Greenhill, said he had no intention of leaving and has been interviewed for one of the five new director posts this week.

A colleague who is a head of service on the next rung down admit­ted it was a fair guess that he was going but he preferred not to be named ahead of the official announcement.

The council has had to delay the five appointments following slower progress than expected in its inten­sive assessments and interviews this week. The process to select chief executive Alistair Buchan’s slim­med-down new team has apparently become protracted due to the number of hopefuls on the shortlist. Names of the successful candidates, who are all already among the top 75 employees, will now be revealed on Monday instead of tomorrow. They are expected to start work next week.

There is some speculation that one or possibly two of the jobs might not be filled by existing staff mem­bers, which would prompt the local authority to advertise externally.

Some of those who do not succeed in their bid for a director job may then seek severance packages. One of those being interviewed this week described the atmosphere in the council just now as “horrible” due to all the uncertainty and jockeying for jobs.

There was a further change of plan for the council on Wednesday when it was unable to hold its planned meeting to sign off its draft accounts for 2010/11 because they were not ready. That re-arranged session will now take place on Wednesday 6th July.

According to provisional figures the council spent £132.9 million in 2010/11 against an income of just £106.6 million, requiring the £26.2 million shortfall to be spent from its reserves.

The biggest spender was education on £42.7 million, social work cost £31.2 million and roads and transport cost £19.2 million.

Looking ahead, the council is facing an overspend of £25 million in 2012/13 which officials believe needs to start being addressed now. In her report to Monday’s meeting of the Full Council, Ms Sutherland said: “The financial prospects … are so concerning that it is necessary to begin the work programme for meeting the challenges earlier, and in a more comprehensive way, than ever before.”

If the council does succeed in cutting the £9.4 million of ongoing costs that it is seeking from this year’s expenditure then the problem next year could be reduced to one of finding £15-16 million. Currently around £5 million of the £9.4 million has been secured.

Councillors are being asked to agree a new policy on its financial reserves for the medium and long term. It is proposed they agree to abandon their old policy of ensuring that the General Fund reserves were maintained at a minimum level of £250 million. It is argued that the fund is actually made of three main funds – the Reserve Fund, the Capital Fund and Repair and Renewals Fund – and separate policies and budgets should be agreed for each instead.

A further statement of intent is to bring in a new policy which presumes that the council will charge for all its services rather than operate any for free. Currently it earns about £11 million a year from services. In future if councillors want a service to be provided free they will have to vote for it to be so.