News / SIC ahead of target on saving money
SHETLAND Islands Council has been warned against complacency after hearing that it had gone far in abandoning its past extravagance.
Councillors heard on Monday the council had exceeded last year’s ambitious savings targets by almost one third, significantly downsizing the draw on its oil-funded deposit accounts.
Council leader Gary Robinson said the council had reduced the amount it dipped into its reserves to pay for services from £100,000 to £59,000 a day.
However Shetland North member Alastair Cooper warned that the extra savings would impact on the local economy, particularly the building industry.
Last year the SIC embarked on the hugely challenging task of cutting its spending by 20 per cent over five years.
The savings target for last year was £15.3 million, but Monday’s meeting of the SIC executive committee heard that figure had been exceeded by £4.9 million.
As a result the council drew £21.5 million from its reserves, 40 per cent less than the year before.
For the first time in many years the size of the council’s reserve funds grew from £193 million to £206 million, though this was due to the exceptionally high 14.6 per cent return on its investments on the global money markets.
Finance chief James Gray still maintains his warning that the council remains in a “perilous position”, and greater savings need to be found to make it financially sustainable.
The main concern voiced at Monday’s meeting was a £1 million overspend in community care, which was blamed on delays in implementing decisions on the future of the Freefield Centre lunch service, day care and a new charging structure.
The council is also still burdened by the huge £40 million debt for housing construction workers building the Sullom Voe oil terminal in the 1970s, which still costs more than £800,000 a year to service.
Gary Robinson pointed out that March had not seen its usual rush to dispose of unspent budgets and the financial report had been prepared two months earlier than usual.
Thanking staff for their efforts in reducing council spending, he said: “We are getting there but we still have some way to go yet.”
However Alastair Cooper stressed that the extra savings had largely been achieved by “slicing the capital programme”.
He said: “That’s done more to reduce that call (on reserves) than actual savings we have managed to bank to date. The building industry is going to suffer for this.”
The full draft budget report can be viewed here.
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