SIC moving in the right direction after Clark scandal, says Accounts Commission

The latest in a series of Accounts Commission reports into Shetland Islands Council has praised the local authority’s “prompt action” in getting its house in order after a sobering public hearing 18 months ago. 

Following a December discussion of Audit Scotland’s follow-up report into the council’s performance, the Accounts Commission said today the SIC had put in place “many of the building blocks” needed to show it is getting best value for taxpayers’ money.  

The report praised the new political arrangements and management restructuring put in place, and said the SIC was “developing a culture of continuous improvement”.

A breakdown in relationships among councillors and officials during David Clark’s tenure as chief executive prompted the Accounts Commission to read the riot act to the local authority following a two-day hearing in June 2010.

It demanded the SIC bring its spending under control after many years of living beyond its means and called for major surgery to the way it operates.

The commission does, however, point out that a long-term chief executive must be appointed soon. Alistair Buchan was drafted in temporarily from Orkney following Mr Clark’s departure, and he is expected to stay until April next year.

Broadly endorsing Audit Scotland’s findings, the commission said more needed to be done to demonstrate “more effective strategic financial management”. It also wants steps taken to ensure the SIC’s accounts are prepared correctly and submitted on time after well-documented problems last year.

The commission also expressed “serious concern” at auditors’ sixth successive qualification of the council’s financial statements, due to the omission of Shetland Charitable Trust’s books. It is hoped the trust’s governance changes will finally resolve that long-running issue.

Accounts Commission chairman John Baillie said: “We welcome Shetland Islands Council’s prompt action and the progress it has made. This positive direction and change needs to be continued and the council needs to ensure it has the capacity to do this. Although good progress has been made and the council is improving, there are still problems that need to be addressed.”

In response, Mr Buchan said a considerable amount had been achieved, but now was no time for complacency. He said there had been an “initial burst of intense activity” since he arrived in August 2010.

In ordering another follow-up report, Mr Buchan said, the commission had opted for the “least serious form of action possible”.

He believes the council is on course to meet its ambitious £9.4 million savings target for 2011/12, with attention now focused on setting next year’s budget. Councillors have agreed to strive for £18 million savings in the next two years, and the detail of that is to be spelled out in February.

Mr Buchan said: “We must push on from this, ensuring the changes take hold so we continue to see our work grow and transform the way this council does its business well into the future. Welcome as these findings are, we must all continue to look to the future and keep up the effort.”

He added: “Most importantly, however, the changes we are making are not to satisfy the Accounts Commission. They are to ensure that the council is as efficient and effective as possible in serving the Shetland community.”

SIC political leader Josie Simpson said the findings were “very positive” and showed much had been achieved in the last 16 months. He believes “genuine progress” had been made in the finance department.

With stand-in Hazel Sutherland leaving the council at the end of March, a permanent appointment to head the finance department is now imminent and a new senior accountant is in place.