Councillor speaks out after report highlights council budget concerns

The chairman of the council’s audit committee has slammed the Scottish government for failing to allocate a fairer funding package for Shetland’s internal ferries.

Allison Duncan has spoken after an interim audit report warned the SIC was not doing enough to keep its spending under control.

The findings, presented by Caroline Watt of Deloitte, showed the council did have effective financial management process in place.

But it warned there was “room for improvement” in the SIC’s budget setting process and the reporting of progress.

Her report stated the council had planned an “unsustainable draw on reserves of £3.4 million to address its funding gap in 2019/20”.

It added the authority had not found savings needed to close £15.6 million gap by 2024.

Her report stated: “We consider the medium term funding gap identified by the council to be optimistic and underestimates the significance of the funding gap by approximately 40 per cent.

“The council needs to prioritise and progress transformational change, considering alternative methods of service delivery or taking difficult decisions such as changes to the level of service provided in order to reach a financially sustainable position in the medium to longer term.”

Speaking at the end of Wednesday’s audit committee meeting, Mr Duncan described the report as a “wake up call” and insisted the council had to work hard to reduce the £15 million-plus funding gap in time.

“This unsustainable draw on reserves is partly due to the Scottish government failing to honour fair ferry funding,” he said.

• See full story in Friday’s Shetland Times.