News / Further service cuts ‘inevitable’ – Robinson
SHETLAND Islands Council will have to embark on yet another round of spending cuts as well as increase council tax, the SIC’s political leader has warned.
Gary Robinson said further cuts in services were “inevitable” after Thursday’s disappointing local government settlement announced by finance minister Derek Mackay.
At £78.14 million, the SIC’s grant funding for 2017/18 was slashed by more than five per cent compared to the current year.
Even if councillors decide to increase council tax by up to three per cent for next year, the draw from its own reserves will be substantial, possibly in the region of between £17 and £20 million.
Last year, the SIC funded 13 per cent of its activities from income generated from its own reserves, a percentage that is likely to rise in 2017/18.
However, the strain on council funds is likely to ease a little after Transport Scotland accepted responsibility for funding Shetland’s inter-island ferry service.
A multi-million pound announcement from the government is expected as early as next week.
“It is inevitable that there will be some council services that we will not be able to deliver anymore,” Robinson said.
“We spent the last five years driving out all the efficiencies – we are now a far more efficient organisation that employs far fewer staff – but the latest funding cuts now mean that services will stop.”
He said he saw no alternative to recommending an increase in council tax by up to three per cent.
Acknowledging that this will perhaps not raise much more then an extra £200,000, he said the SIC was “backed into a corner” and had little room to manoeuvre.
“The maximum the government allows us to increase the council tax is three per cent, so we will have to consider that to protect services,” he said.
Finance officers will now spend the next few months understanding the finer details of Thursday’s announcement and work out its implications.
Robinson added that the council’s ambition was not to divert from its strategy of using its reserves (currently valued at £326 million) in a sustainable manner to plug the hole inflicted by the funding settlement.
With reference to the impending deal on funding inter-island ferries, Robinson said the Scottish government has acknowledged that it should pay for operating the ferries “because that’s what it does in other places”.
“The top end figure would be somewhere between £6 and £7 million. The Scottish government should pay it in full, but there is no certainty.
“We want to ensure that the council is not worse off than any other local authorities,” he said.
Speaking from Dublin airport on Friday afternoon, Robinson also criticised the government for removing funds from the usual local government allocation to manage it centrally.
“There is less money going through the funding formula than previously and there is more money being put into things like the attainment fund,” he said.
“This attainment fund is not new money. It has been taken off all Scottish local authorities and is being distributed through a different mechanism, one that is entirely at the control of the Scottish Government.”
“That is taking away from local authorities, and it is not going to benefit us very much in Shetland. The measures they are going to use to distribute that money is going to work against us.
“We make a multi-million pound contribution to education here every year which the Scottish Government don’t recognise.”
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