‘Serious concerns’ raised about council’s finances and need for ‘urgent change’

Lerwick Town Hall. 

The council is facing an “urgent wake up call” to avoid running out of cash by the end of the decade.

The Accounts Commission has today raised “serious concerns” about the SIC’s finances and called on leaders to “increase their pace and focus to deliver urgent change”.

The organisation, which holds Scottish local authorities to account, said it was “not confident” the SIC could show it was financially sustainable.

In a highly critical “best value assurance report”, the commission warned there were no clear plans yet to address a forecast funding gap of up to £142 million in the next five years.

The report also criticised the council’s reliance on reserves, which it warned would be exhausted by the end of the decade, based on current spending levels.

Commission chairman William Moyes said it should serve as an “urgent wake up call” to the council.

“If these issues are not tackled, and tackled pretty soon, then this could become really serious,” he said.

Despite the bleak findings, Mr Moyes stressed that Shetland was “not a council in crisis” nor was it in “meltdown” and there were examples of good work throughout the organisation.

“We are not saying this is a disaster, or anything like that, but the council does have to take its financial sustainability seriously,” he added.

“They have to tackle the problems before they become absolutely insuperable.”

The SIC’s political leader Emma Macdonald said: “We have already been working to address some of the issues which are highlighted, and our members and officers will now focus on developing an improvement plan, taking into account all the points raised in the audit.

“I am pleased to see that the commission has recognised how well our services perform, and that we have among the highest service satisfaction scores in the country.

“As the summer recess ends, councillors and officers will be focussing on the challenges immediately facing the council and our community – around the cost of living, energy costs, connectivity and financial planning for the future – and look forward to demonstrating to the commission the progress we make on our improvement plan over the next 18 months.”

More in tomorrow’s edition of The Shetland Times.