Councillors told to ‘bite the bullet’ and make unpopular decisions to get spending back on track

North Isles councillor Robert Thomson.

The SIC’s finances no longer add up, councillors fear, with borrowing and spending spiralling out of control.

Finance manager Paul Fraser told members of the policy and resources committee today (Monday) they have some “difficult decisions” to make.

He was responding to North Isles councillor Robert Thomson who highlighted the millions of pounds of borrowing repayments due in the near future on top of the many millions more earmarked for spending on major capital projects.

“If we were to repay all of these loans and invest in all of these things in the asset investment plan, then I don’t think two plus two equals four,” he said.

Mr Fraser agreed.

He said the council had earmarked its reserves to pay off loans - but was also using it to cover day-to-day expenses.

Taking all the spending into account, Mr Fraser said it became apparent that “this isn’t going to work”.

He said councillors needed to start looking at their borrowing decisions “quite closely” and “quite soon”.

Ultimately, Mr Fraser said the axe would have to fall on day-to-day services.

“Once we start looking at it in that context, it won’t be easy decisions for members to make,” he added.

Mr Thomson said the council was spending too much of its reserves on day-to-day costs, which meant it did not have the “headroom” to invest in capital projects.

He said councillors needed to “bite the bullet” and look at ways of cutting spending just to maintain its assets.

“It’s going to take some really difficult decisions on our behalf but I think we can’t shy away from it any longer,” he said.

While accepting not all the cuts could be made at once, Mr Thomson said it was important to come up with a medium-term plan to get the council back on track.

“If we don’t do that we will be in real trouble,” he said.

“We cannot go on kicking the can down the road, which is what we have been doing.”

He said the time had come to take the sort of decisions which “the people in Shetland aren’t going to be happy about - but which we’ve got to do”.

Mr Thomson highlighted initiatives such as “shifting the balance of care” - a project which aims to deliver more care services at home - as ways to save money.

However, council leader Emma Macdonald clarified that this was only likely to reduce the growth in social care spending – rather than make actual savings.

And integration joint board chairman John Fraser said the project was not about savings - but outcomes. ”It’s not about pounds, shillings and pence - but the people,” he said.

Mr Thomson accepted it was not all about money.

“But it is also about money because we have a finite amount of it,” he added.

He said this might mean the council had to accept it cannot deliver the “Rolls Royce” type service - and settle for one that is merely adequate.

Lerwick South member Dennis Leask was also concerned about how to keep the finances on track - particularly with so many projects under consideration for the future.

And depute leader Gary Robinson said the question for councillors was whether they wanted to do more, less or around the same, going forward.

“Doing more will require careful and thoughtful management just now,” he said.