SIC sets first ‘sustainable budget’ since 1990s

Councillors have given their backing to a sustainable budget for 2015/16 – the first time the SIC has managed to do so since 1997.

The landmark approval means the authority has dramatically cut its reserve fund withdrawals by 80 per cent.

In 2011/12 the council withdrew £36 million from reserves to help support its spending.

Now, figures from outgoing head of finance, James Gray, show that will be cut to a more manageable £6.9 million.

The council says this will be funded from the investment income generated by the reserves, which should maintain them for future generations despite an anticipated rise in costs and significant reductions in government funding.

It comes after the council signed up to its medium term financial plan in 2012, when it recognised a critical need for the authority to get its spending under control.

Key elements discussed in the chamber today include:

• A freeze on council tax for the eighth consecutive year. That is in line with a concordat between local authorities and the Scottish government. The council says it still charges the fourth lowest level of countil tax out of 32 local authorities;
• Since 2011/12, the council has made £35 million in savings across all services;
• The authority had a savings target in the next financial year of £2.1 million, but the actual saving will be £3.3 million, and each directorate will be allowed to use any excess amount to reduce their savings target for the following year.

Political leader Gary Robinson said: “This certainly is a critical point in the history of Shetland Islands Council. If we look back to the last time in the 1990s when a balanced budget was set, that in itself was very much a one off between years the council didn’t balance the books.

“The challenge is to ensure this is not just a one-off. There’s no reason we shouldn’t be able to set set budgets for further years that are sustainable.

“When the council first met in May 2012 it seemed an almost impossible task to bring our spending down to affordable levels and balance the books once more. However, thanks to an enormous amount of work by staff at all levels and the efforts of elected members we can at last set a sustainable budget for the year ahead, and I commend them for their efforts.”

He thanked the community for their “forebearance during a period of necessary change”.

“We must remember, however, that we face more pressures in the years to come. The amount we are granted by the government to run our services will continue to fall, and our costs will inevitably rise.

“We’re already looking at how we plan our spending and services in the longer term, but it is critical that we continue to focus on keeping our budgets in check and living within our means.”

• Full story and reaction in Friday’s Shetland Times.