Council’s £106m funding gap could have ‘myriad of effects’ on the community

Council leader Emma Macdonald.

The SIC is facing a “whole host of challenges” as it grapples with real term funding cuts.

The council has warned that its Scottish government grant will not cover the services it currently provides – and wants to highlight these challenges with the community.

It currently estimates the funding shortfall between 2023-26 will be around £106 million.

Historically, the council has tended to plug the gap by spending its reserves.

But with Audit Scotland having raised concerns about its unsustainable use of reserves, the council has now admitted that it will have to start to look at “changing how it works and what it does”.

Council Leader Emma Macdonald:  “We face the same problems as other local authorities, but there are additional issues which amplify their impact here in Shetland.

“We have an ageing population, which puts increasing pressure on services.

“Our infrastructure, such as ferries and roads, needs more and more maintenance, or replacement.

“As every householder will appreciate, with inflation at 10.5  per cent our costs for essential materials such as fuel and food are extremely high, further compounded by our location.  We’re still dealing with the impact of Covid, and Brexit – the list goes on.

“There are a whole host of challenges for us as a council, as elected members, and as a community, which we cannot ignore and which we will have to deal with in order to work through the next few years, and we will have to work very closely with all our partner organisations.

“Council members will ultimately make decisions on the budget for the years ahead, but we know that decisions taken at a high level will have a myriad of effects, right across what we do.  It’s our task to share that information as we consider the potential changes in the years ahead.

“We’ve initially published a document outlining the current situation, which you can find on our website, and will be providing further information in the coming weeks and months, as well as giving folk an opportunity to share their thoughts.”

Councillors are set to debate and decide budgets for 2023/24 in a few weeks’ time.

Ahead of the decisions, members are looking to start a “conversation with the community” to highlight the challenges ahead.

The council has published a document called Our Budget Challenge setting out its challenges.