Council / SIC’s borrowing debt stands at nearly £50m
SHETLAND Islands Council (SIC) is currently sitting on nearly £50 million of debt in the shape of borrowing, according to new figures.
It comes as part of a wider look at debt across all UK local authorities by the BBC’s Shared Data Unit. At £2,136 in debts per person the SIC is 60th in a table listing 387 local authorities.
Locally the £49 million debt covers borrowing used to help pay for a range of capital SIC projects, from the new Anderson High School to the Toft pier.
The council has used the Public Loan Works Board on a number of occasions to help finance construction projects.
This is a lending facility for public bodies which is overseen by HM Treasury.
Interest rates on the various stands of the SIC’s current borrowing range from 1.94 per cent to 4.14 per cent.
Separately the council has reserves worth more than £300 million, which is put into investments to generate income.
The SIC draws money from the pot of reserves every year to cover the shortfall between the cost of services and the core funding from the government.
SIC chief executive Maggie Sandison said: “It was financially prudent for the council to borrow when the cost of borrowing was low and returns on investment were high.
“Borrowing for capital projects has enabled the council to keep investing its reserves to generate an income that is greater than the cost of financing the loans.”
The projects include the significant new Anderson High School and halls of residence project of the 2010s.
The new Eric Gray Resource Centre, Scalloway Fish Market and Toft Pier also used borrowing.
A Sullom Voe tug boat, a recycling sorting shed/equipment, the Clickimin roundabout and its nearby path are also listed.
The current loans have “maturity dates”, when they need to be paid off by, ranging from 2025 to 2064.
Councillors have previously been told that future high-cost projects like the proposed Cullivoe road project, which was recently estimated at £9.9 million, may need to tap into borrowing.
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