Watchdog’s criticism of SIC demands action, says councillor

Scotland’s financial watchdog’s latest report on the SIC is so damning that it would “result in a vote of no confidence” in the administration of most other local authorities, a councillor suggested this week.

Lerwick South councillor Jonathan Wills was speaking in response to a financial risk analysis conducted by Audit Scotland, the findings of which were first publicised in this newspaper four weeks ago, highlighting a series of alarming shortcomings and pointing in particular to a colossal funding gap in the SIC’s capital programme over the next four years.

Councillors have indicated that they wish to spend nearly £70 million on capital projects in the next two years when the amount of funding available stands at only £33.2 million – without factoring in the estimated £49 million cost of the new Anderson High School, which the SIC is still hoping can be funded by Shetland Charitable Trust.

The latter body is also a source of concern for Audit Scotland. The fear is that its reliance on income from stock market investments could, in the current financial climate, mean the trust is unable to sustain its level of service provision and may have to transfer some services back to the council, putting further pressure on an annual revenue spend which is already stretched to the limit.

A further £4 million a year will have to be found to fund the cost of implementing the single status pay deal for council workers.

Dr Wills said the report painted a pretty “shambolic” and “deplorable” picture of the way the council is being run and called for some concrete measures to tackle the various failings instead of the “waffle and fudge” response to date.

He said: “[The outcome] in a normal council would probably be a vote of no confidence. I’m a little tired of hearing ‘we are where we are’ . . . elected office-bearers should be doing something about it.”

Although he stopped short of formally calling for resignations, Dr Wills was also heavily critical of the decision to abandon a points system for prioritising capital projects, meaning it is now unclear what any of the major committees’ main priorities are.

The report also includes a direct attack on elected members, pointing out that they were failing in their duties and reminding them that they are democratically accountable to the electorate for the overall performance of the council.

The report stated: “Councillors have yet to demonstrate they are able to collectively take the difficult decisions required to reduce the current draw on reserves in line with the agreed financial strategy. There is a risk elected members do not address the difficult financial choices required to ensure continued service delivery and progress on the capital programme within the agreed financial strategy.”

Finance chief Graham Johnston responded that in his view measures were being put in place to tackle some of the criticism from the watchdog. “The interpretation I would put on it is that the council is working to an agenda to improve the matters that have arisen,” Mr Johnston said.

Councillor Caroline Miller pointed to the creation of a finance working group and said she did not concur with Dr Wills’ gloomy analysis.

“I would be upset if we hadn’t highlighted these problems ourselves,” Mrs Miller said. “We perhaps could be doing things better . . .  but I don’t share Jonathan’s view that it is a complete disaster.”

Committee chairwoman and veteran councillor Florence Grains seemed even less concerned by the findings of the report, even though it clearly states that if the SIC does not cut back on its use of oil reserves for spending on services and capital projects, many council policies will simply not be achieved.

Mrs Grains described it as “fairly balanced” and dismissing Dr Wills’ remarks as being “rather hard” on the SIC. “We’ve plans in place to address many of the risks,” she added.

Members of the audit and scrutiny committee were told that Audit Scotland’s Mark Ferris will appear before any members who wish to attend the committee’s next meeting and it was agreed by that the convener and committee heads would be required to attend the session in six weeks’ time.