Auditors to take ‘fresh look’ at SIC’s use of £400m reserve fund

Council chamber.

New auditors are to take a “fresh look” at the thorny issues of council reserves and financial sustainability.

Audit Scotland has replaced Deloitte as the SIC’s external auditor until 2026/27 – and plans to revisit some of the most contentious topics of financial conversation.

Audit director Brian Howarth told councillors on Monday that his team would take a fresh look at financial sustainability and reserves – issues he said had been raised frequently over “many years”.

Deloitte had repeatedly told the council its draw on reservices was “unsustainable” as it was headed for a £106 million funding shortfall by 2026.

When setting a budget for the current financial year, councillors agreed to take £4.3m unsustainable draw on its reserves – on top of a £15m sustainable draw.

But while most councillors have heeded the warnings and agreed to seek savings, Shetland Central member Ian Scott has often questioned the financial assessments presented to the council, considering the vast reserves at its disposal.

The SIC currently has more than £400m in reserves.

Lerwick North and Bressay member Stephen Leask asked Mr Howarth the elaborate on his comments during Monday’s audit committee meeting.

He said he would take a look at the size of the reserves, the rate at which it is being used and how its investments have performed.

While recognising the issue had been well discussed over recent years, Mr Howarth said it wanted to take another look “rather than assume the position from previous auditors”.