Council / More tough decisions predicted in future as councillors set budget for year ahead
SHETLAND Islands Council’s budget for 2023/24 has been passed – but serious concerns have been expressed about the savings required in future years.
An extra in-year savings target of one per cent across the council in the upcoming financial year has also been imposed in a show of intent by elected members.
The budget contains a draw from reserves of £4.8 million which is deemed unsustainable.
This is after savings were identified, with vacancy management a key feature, and a plan put in place to transfer all of the council’s harbour account surplus – estimated at £18.2 million – to help pay for day to day services.
Many of the savings identified will see reviews carried out first before final decisions are made.
A number of councillors said there will be further tough choices ahead in the coming years.
The budget was set in stone at a meeting of the full council on Wednesday.
Leader Emma Macdonald said the budget should see the council “head in the right direction”.
A proposal worked up by Shetland Central member Davie Sandison during other committees this week to implement a further savings target of one per cent was approved.
North Isles Robert Thomson initially suggested going further to three per cent, but after chief executive Maggie Sandison warned against putting more demand on already-busy staff his proposal was withdrawn.
Earlier in the meeting council chief Sandison effectively encouraged councillors not to instruct officers to start any new projects due to the existing workload facing staff.
The budget-setting process was spoken about in advance by the council earlier this year with warnings over how “reduced government funding, high inflation and rising demand for services” would play out in 2023/24.
The council already agreed to increase council tax by 4.5 per cent, although it followed a freeze in 2022/23.
It comes as the council projects an overspend on core service delivery at the end of the current financial year of around £2.1 million.
At a meeting on Tuesday North Isles member Robert Thomson said with auditors’ eyes already on the council, public watchdog the Accounts Commission may “come down on us like a tonne of bricks”.
There was a similar tone at Wednesday’s full council meeting, with senior councillor Allison Duncan warning that auditors will “crucify” the council if it does not do more to tackle its spend.
He said “we have not learned any lessons from the past”.
Davie Sandison meanwhile reiterated his view that the council’s reserves – recently valued at nearly £380 million – need to be used sustainably.
A report to members said around £33.5 million in total will be drawn sustainably from reserves in 2023/24 for its general fund, which pays for day to day services.
This includes £15.4 million from returns generated on its long-term investments, and the £18.2 million draw from the harbour account surplus.
With this in mind Sandison believed that in reality the council needs around a ten per cent cut in its overall operation.
“That can take as long as we like – as long as we have a strategy set to get us to that end point,” the councillor said.
Thomson meanwhile conceded he felt “quite depressed” about the situation and said a stronger approach than one per cent was needed.
Lerwick South member John Fraser also warned against councillors favouring “pet projects” which could effectively be to the financial detriment of the wider council – himself included.
At the other side of the debate Shetland Central member Ian Scott said the council was sitting on an “enormous resource” – the reserves – and railed against the idea of making savings.
“To be quite honest, from what I’ve heard from some people today…we should be ashamed of ourselves,” he said.
“We are making these cuts because we want to, not because we need to.”
Leader Macdonald said she did not disagree with setting a further savings target, “but as members we need to seriously step up and take responsibility”.
She said it was important for the council to focus its resources on the areas that need it most, and to ensure it does what is right for the community.
In what was a lengthy day with plenty of agenda items, around five hours after the full council meeting started members signed off the budget – with Scott making sure his objection to the move was minuted.
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